Every product has five levels. A marketer must consider these levels to achieve better customer value. These five levels are also known as ‘customer value hierarchy’ as shown in figure 1:
Figure 1: Five Product Levels
The five levels of a product are defined below:
Core Benefit: Core benefit is the most important level of hierarchy. At this level, the customer is buying the essential benefit or service. Here, marketers are the benefit providers to customers. For example, guest of a hotel is buying rest and sleep, a woman at a spa resort is buying comfort and luxury.
Basic Product: In the next level, it is the job of marketer to transform the core benefit into a basic product. For example, a hotel room is the core benefit while, a bed, a bathroom, a desk, a chair, towels and a closet are the basic products.
Expected Product: At this level, the marketer needs to prepare an expected product. An expected product comprises of all those attributes which a customer expects while buying a product. For example, a visitor at a restaurant expects clean table, good quality food, quick services and vibrant ambience. Mostly, all restaurants try to provide these attributes, but customers also look for least expensive restaurant along with these attributes.
Augmented Product: The fourth level of product provides augmented product to its customers, which is beyond their expectations. These types of products have additional attributes and benefits which enable the customers to differentiate between the available product and other products offered by competitors. For example, a hotel may include fine dining and 24* 7 room service, fresh flowers, a remote-control television set, rapid check-in and express check-out, which are all extended services provided by the hotel to build up a augmented product.
Potential Product: The last and the fifth level is that which offers the potential product. This type of product covers all the prospective alterations and extensions that the product may go under in future. At this level, the companies make most of their efforts to find out new ways to gratify their customers and offer unique products to them. For example, an innovative transformation of the traditional hotel product can be like offering all-suite hotels where the occupant books a set of rooms.