Sunday 21 August 2011

Product Levels: The Customer Value Hierarchy

Setting Product Strategy>Product Characteristics>Product Level

Marketer needs to address five product levels in planning its market offering. Each level adds more customer value, and the five constitute a customer value hierarchy.

(a) The fundamental level is the core benefit: The service or benefit the customer is really buying. Marketers must see themselves as benefit providers.

(b) At the second level, the marketer has to turn the core benefit into a basic product.

(c) At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product.

(d) At the fourth level, the marketer prepares an augmented(make greater/increase) product that exceeds customer expectations.

(e) At the fifth level stands the potential product that 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 its individual offer.

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