There are three product levels, they each add more customer value than the previous level and they constitute a customer value hierarchy. The decision of customers is usually based on the value that they expect to receive from buying and consuming it. The first level is the core benefit.
It is the actual or fundamental benefit that the customer seeks when he buys the product. It is need to the most basic need that he/she wants to satisfy. For example, someone will go buy a red bull for the energy drink or someone will buy a car to have private transport. An example from the case study, Rick and Cynthia just moved into a new apartment and want to buy a new Television, they are various reasons for wanting a television but we can put it as an entertainment. The second level is the basic/tangible/actual product.
The manufacturing and marketing departments have to co-operate closely to ensure that the basic product is able to offer the need-satisfaction benefit that customers want. It is the service/product that the customers buy. For example, a car is composed of a roof, doors, windows … etc.. From the case study it will be all the features and attributes of a television as well as its design and packaging. The Television chosen by Rick and Cynthia is a HD Plasma TV so the HD is already a feature as well as the plasma. The third level is the augmented product.
It is when the product doesn’t only meet the customers’ expectations but even exceeds them. It is a way of differentiating a product from others which constitutes a competitive advantage for the company. For example, adding special sound in a car or the fact that cars are on warranty… Relating to the case study, we can say that the staff at game was very friendly and knowledgeable which adds a plus to sell a TV. The HD PVR that was sold with installation included. The fact that they will deliver the product to Rick and Cynthia’s home.
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