This document discusses product levels and classification. It outlines 5 levels that add increasing customer value: 1) core benefit, 2) basic product, 3) expected product, 4) augmented product, and 5) potential product. Products can also be classified based on durability, tangibility, and use into nondurable goods, durable goods, and services. Consumer goods are classified as convenience goods, shopping goods, specialty goods, and unsought goods based on shopping habits. Differentiation of products can occur through form, features, performance, quality, durability, reliability, and style.

1. PRODUCT
Many people think that a product is a tangible offering, but
a product can be more than that., a product is anything
that can be offered to a market to satisfy a want or need .
Products that are marketed include a physical goods,
services , experiences, events, persons, places, properties,
organization, information, and ideas .

2. Product levels : the customer
value hierarchy
 In planning its market offering, the marketer
needs to address five product levels .
Potential product
Augmented product
Expected product
Basic product
Core
benefit

3. Each level adds more customer
value , and the five constitute
a customer hierarchy .
 1Core benefits- this is the fundamental
level .the service or benefit the customer is
really buying. A hotel guest is buying “rest and
sleep.” the purchase of drill is buying “holes.”
marketers must see themselves as benefit
providers .
 2Basic product- At the second level ,the
marketer has to turn the core benefit into a basic
product. Thus a hotel room includes a bed,
bathroom, towels, desk, dresser, and closet .

4. 3Expected product
 - At the third level, the marketer prepares an
expected product, a set of attributes and
conditions buyers normally expect when they
purchase this product. Hotel guests expect a
clean bed, fresh towels, working lamps, and a
relative degree of quiet. Because most hotels
can meet this minimum expectation, the
traveler normally will settle for whichever
hotel is most convenient or least expensive.

5. Augmented product
 At the fourth level , the marketer prepares an
augmented product that exceeds customer
expectations. In developed countries, brand
positioning and competition take place at this
level. In developing countries and emerging
markets, competition takes place mostly at
the expected product level. However in India,
there is a visible move by some companies to
augment their products and services by
providing superior customer experience.

6.  The new competition is not between what
companies produce in their factories , but
between what the add to their factory output
in the form of packaging, services,
advertising, customer advice financing,
delivery arrangements, warehousing, and
other things that people value .

7. Some things should be noted about product -
augmentation strategy. First, each augmentation
adds cost. Second, augmented benefits soon become
expected benefits and necessary points-of-parity .
Today`s hotel guests expect cable or satellite
television with a remote control and high-speed
internet access or two phone lines. This means
competitors will have to search for still other
features and benefits . third , as companies raise
the price of their augmented product, some
competitors offer a “stripped-down ” version at a
much lower price.

8. Potential product
 At the fifth level stands the potential product,
which encompasses all the possible
augmentations and transformations the
product or offering might undergo in the
future, here is where companies search for
new ways to satisfy customers and
distinguish their offer.

9. Product classification
 Product can be classified on the basis of characteristics :
Durability , tangibility, and use .each product has an
appropriate marketing-mix strategy .
 Durability and tangibility product can be classified into
three groups , according to durability and tangibility :
1 Nondurable goods – these are tangible goods normally
consumed in one or a few uses, like beer and soap .
Because these goods are consumed quickly and
purchased frequently, the appropriate strategy is to
make them available in many locations, charge only a
small markup, and advertise heavily to induce trail and
build preference .

10.  Durable goods – these are goods that normally
survive many uses : refrigerators, machine tools,
and clothing . Durable products normally require
more personal selling and service, command a
higher ire more seller guarantees .
 Services – these are intangible, inseparable,
variable, and perishable products . As a result ,
they normally require more quality control,
supplier credibility , and adaptability . Examples
include haircuts, legal advice , and appliance
repairs .

11. Consumer-goods classification
The cast array of goods consumers buy can be classified on
the basis of shopping habits . We can distinguish among
convenience, shopping, specialty, and unsought goods .
Convenience goods – the consumer usually purchases
frequently , immediately, and with a minimum of effort. Examples
include tobacco products, soaps, and newspapers, convenience
goods can be further divided .
Staples goods- consumer purchase on a regular basis . Exa. Colgate
toothpaste .
Impulse goods – are purchased without any planning or search effort .
Exa. -chocolates, candy bars and potato chips are impulse goods .
Emergency goods – when need is urgent. Exa . – umbrella etc.

12.  Shopping goods – these are goods that the
consumer, in the process of selection and
purchase, characteristically compares on such
bases as suitability , quality, price, and style.
exa. – furniture, clothing, used cars .
Homogeneous shopping goods – these are similar in quality but
different enough in price to justify shopping comparisons.
Heterogeneous shopping goods – these are differ in product
features and services that may be more important than price .

13.  Specialty goods –these goods have unique characteristics
or brand identification for which a sufficient number of buyers are
willing to make a special purchasing effort. Examples include cars,
stereo components, photographic equipment, and men`s suits .
 Unsought goods – these goods are those the consumer does not
know about or does not normally think of buying, like smoke detectors. The
classic example of known but unsought goods are life insurance ,
encyclopedias, and reference books, unsought goods require advertisement
and personal-selling support .

14. Differentiation
 Form
 Features
 Performance
 Conformance quality
 Durability
 Reliability
 Style