The 4 Ps – Product (1/2)
In this lesson, you’re expected to:
– learn about the different product levels and how customers perceive a product
– understand the various stages that a product goes though in its life cycle
The traditional term product is a confusing one in today’s highly competitive global markets. Many people think a product is a single, tangible offering – but it is more than that.
Broadly, a product is anything that can be offered to a market to satisfy a want or need and consists of a set of attributes, including physical goods, services, experiences, events, persons, places and organizations.
In current buyers’ markets, where customers have a wide choice of suppliers, it is usually insufficient to provide tangible goods alone. As most markets are fiercely competitive, firms have to surround their core product with a set of carefully selected additional tangible (e.g. attractive design, packaging) and intangible attributes or benefits (e.g. efficient service). This mix of benefits makes up the desirable customer offering.
In planning its customer offering, the marketer needs to address three basic levels. Each level adds more customer-perceived value that results in the appropriate market offering. The three levels are:
– Core Product (need or benefit)
– Actual Product
– Augmented Product
The most common model in introductory marketing textbooks shows the product as having three levels while more advanced marketing books discuss the model with five levels (including expected product and potential product).
(1) Core Product
The first level (at the center of the model) is the core need or benefit that the product is trying to meet or deliver. The best way to think about this is from a consumer’s perspective – why is the customer buying this product solution?
Note that products to consumers are simply solutions to problems or needs that they are facing. Marketers must see themselves as benefit providers.
Let’s use a simple example: why does a consumer purchase breakfast cereal? Because they are hungry (have a need) in the morning.
(2) Actual Product
The actual product is the second product level and is quite simple to understand. The actual product is that the overall product design and the product features. If you were to describe a product in detail, then you would be describing its product features – which is the actual product (set of product features).
As an example, let’s consider breakfast cereal again. When describing the cereal you would identify the following product features: shape, taste, texture, size, color, aroma, crunchiness, ingredients, packaging, name, brand and so on.
A key goal of a marketer is to ensure that the product design meets the core need (or required set of benefits) for the consumer. This means that there should be a relationship between the first product level (core need) and the second product level (a set of product features designed to meet that core need).
Augment means “to add to” or “to make greater”. Thus, the third level in the product level model is increasing the offering and set of benefits to the consumer. We have already designed the product’s features (as part of level two), so product augmentation is adding to the product’s offering OUTSIDE of the product itself.
A good way to look at product augmentation is by using an example. Again we will go back to our breakfast cereal example. We could support (add extra value and benefits) the overall product offering of breakfast cereals by:
– Having recipe ideas on the packaging
– Having a QR code on the packaging (with a link to a site or offer)
– Having a code to access free online games
– Providing a discount coupon for a future purchase
On the other hand, the cost of things like research and development, consumer testing, and marketing needed to launch the product can be very high, especially if it’s a competitive sector.