Tuesday 12 August 2014

Product Levels


Kotler in his book mentions the customer value hierarchy which addresses different levels of products offered by marketers to their customers. Product levels are important because understanding it helps marketers study the requirements of the consumer, and to strategies in order to increase their sales .


Product Levels for Lipton Ice Tea


Core Benefit- The requirement caused by Thirst

Basic Product- liquid in nature to address the thirst

Expected Product- A clean and healthy option(cool), with good quality.

Augmented Product- An Iced Tea concept which positions itself apart from other products addressing the similar requirement. Also providing options within the same category.

Potential Product-Lipton is always trying to add value to Tea and always manages to position themselves ahead of their competitors by coming up with new flavors and types of ice tea.


We can also link the Keniche Ohmae's model of 3C's (which Kotler fails to do), that is, Customers, Competitors and Company with the Product Levels in the following way,


Customer- Core Benefit, Expected Product.
Customers look to get their core requirements fulfilled, which is one of the main reason that customers buy products. They always look for faults and are not entirely satisfied which is why they always expect something more. 

Competitors- Basic Product, Augmented Product
Competitors need to have a basic product in place a as point of reference for the                  customers to buy. In the point of view of the company, competitors are always trying to                        better their product, which enforces the company to also come up with positive                                    changes to their products.

Company- Basic Product, Potential Product
 A company should always position itself ahead of its competitors by taking self initiatives                     in terms of innovation and bringing out new products in the market.                






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