Understanding the Concept of a Product and its Three Key Levels

Understanding the core concept of product is essential in marketing and sales strategies. A product can be defined as a definable entity that can be delivered to customers in a repeatable way, which meets a perceived need and can be priced. This article will explore the detailed aspects of products, focusing on their three main levels: the core, actual, and augmented product levels, and how these levels can be used to analyze and improve product offerings.

Product Definition: Meeting Perceived Needs and Repeatable Deliverability

A product is more than just a tangible good or service; it is a definable entity that meets a perceived need and can be delivered to customers in a consistent and repeatable manner. The importance lies in the repeatable nature of the product, ensuring that each customer receives a substantially similar experience, which minimizes additional costs for the supplying organization. A well-delivered product should also be priced, even if that price is free or nominal.

The Three Levels of a Product in Marketing

Core Product

The core level of the product refers to the fundamental benefit or service that the customer expects and is willing to pay for. This level gets to the heart of what the product is supposed to do and provide to the customer. For example, if you are selling a software tool, the core benefit might be its ability to streamline processes, improve efficiency, or automate certain tasks. It’s a basic need that the product seeks to fulfill.

Actual Product

The actual level of the product involves translating the core benefits into an actual tangible or intangible product form. This could be a physical object, a digital service, or even a set of features that meet the core product promise. Continuing the example of a software tool, the actual product might be a downloadable software application with specific features and functionalities that improve efficiency.

Augmented Product

The augmented level of the product includes all the added benefits and features that make the product more attractive to the customer. These are often non-tangible benefits that enhance the overall user experience. For instance, customer support, free or cheap delivery, multi-platform support, or access to training materials. These added elements create additional value and differentiation in the market, making the product more appealing to potential customers.

Using the Three Product Levels to Improve Product Offering

Understanding the three product levels can be a powerful tool for product development and marketing. By focusing on each level, companies can ensure that their product meets the core needs of the customer, is effectively designed and marketed, and offers a unique value proposition. For example, during the development phase, companies can use the Kano model to define the mandatory, performance, and delight aspects of their product. This helps in tailoring the product to the target audience and ensuring that it meets their needs in all areas.

During the design phase, the visual elements, user experience, and functionality are critical. Companies can focus on creating a user-friendly interface and enhancing the product’s value through additional features. Focus testing can be used to validate the design and gauge the user experience, while stress scenario testing can help identify any weaknesses or areas for improvement. Reengineering and redesigning the product based on feedback and testing can lead to a winning product that stands out in the market.

Conclusion

Understanding the concept of a product and its three key levels is crucial for effective product development and marketing. By defining the core, actual, and augmented levels of a product, companies can ensure that their offerings meet customer needs, are well-designed, and offer a unique value proposition. This comprehensive approach helps in creating a product that not only meets but also exceeds customer expectations.