Kotler’s Five Product Levels Model is a tool that marketing managers can use to assess and improve the level of customer satisfaction. The Model was developed by Philip Kotler, a well-known marketing theorist.
History of Kotler’s Five Product Levels Model
Kotler’s Five Product Levels Model was first introduced in 1967 in his book “Marketing Management: Analysis, Planning, and Control.”
The Financial Times ranked the book as one of the top 50 best business books ever made in the mid-1990s.
The Model has been widely used by marketing managers ever since to help them improve customer satisfaction.
What is Kotler’s Five Product Levels Model?
Kotler’s Five Product Levels Model, also known as the Hierarchy of Effects model, is a tool used by marketers to understand how customers make purchase decisions. The Model starts with the core product, which is the fundamental need or want that the customer is trying to satisfy. Philip Kotler’s Model provides a valuable framework for understanding how customers make purchase decisions and how marketers can influence those decisions.
What is a Product?
A product is anything that can be offered to a market to satisfy a need or want. Kotler’s Model is often used in conjunction with the Product Life Cycle, which describes the stages a product goes through from launch to retirement.
Customers Add Value to a Product in Three Different Ways:
- Customer Need: The customer’s need is the starting point for Kotler’s Model. The customer begins with a need, which can be either functional or emotional. For example, a customer may need a new car because their old one is not running well, or they may want a new car because they want to feel more stylish.
- Customer Want: The customer’s want is the desired outcome of using the product. In our car example, the customer may want a car that is safe, reliable, and affordable.
- Customer Demand: The customer’s demand is the quantity of a product that the customer is willing and able to purchase at a given price. The demand for a product may be high at one price and low at another price.
What are the Five Product Levels Model of Philip Kotler?
Kotler proposed five different levels of a product. These are:
1. Core Level Products:
These are the basic products that a customer needs in order to satisfy their need or want. For example, a customer may need a car to get from point A to point B. The core product of a car is transportation.
2. Generic Level Products:
These are products that are similar to other products in the market. For example, a generic car is a car that is like all other cars on the market. It has four wheels, an engine, etc.
3. Expected Level Products:
These are products that meet the customer’s expectations. For example, a customer may expect a car to have a certain level of safety, reliability, and comfort.
4. Augmented Level Products:
These are products that exceed the customer’s expectations. For example, a customer may not expect a car to have GPS, heated seats, or a sunroof.
5. Potential Level Products:
These are products that the customer has not even thought of yet. For example, a customer may not even know that cars can have GPS, heated seats, or a sunroof.
Kotler’s Five Product Levels Model is a helpful tool for understanding how consumers perceive value. By understanding all five levels, marketers can create products and services that meet the needs and expectations of their target consumers.
What Benefits Does the Model Provide (Advantages Five Product Levels)?
There are several benefits that Kotler’s Model provides:
- It helps marketers understand how customers make purchase decisions.
- It helps marketers create products and services that meet the needs and expectations of their target consumers.
- It helps marketers segment their markets and target their marketing efforts.
- It helps marketers position their products and services in the marketplace.
- It provides a framework for understanding the customer’s journey from awareness to purchase.
How Can Marketers Use Kotler’s Model?
There are several ways that marketers can use Kotler’s Model:
- Segment your market: By understanding the different levels of customer needs, you can segment your market and target your marketing efforts.
- Create products and services that meet customer needs: By understanding all five levels of customer needs, you can create products and services that meet the needs and expectations of your target consumers.
- Position your products and services in the marketplace: By understanding how customers make purchase decisions, you can position your products and services in the market.
- Understand the customer’s journey: By understanding all five levels of customer need, you can create a map of the customer’s journey from awareness to purchase.
- Use Kotler’s Model as a framework for understanding customer value: By understanding all five levels of customer need, you can create a framework for understanding customer value.
Real-Life Examples of Kotler’s Five Product Levels Model
1. Apple iPhone
Core Level Product: A phone that makes calls, sends texts, and takes pictures.
Generic Level Products: A smartphone that has a touch screen, app store, and internet capabilities.
Expected Level Products: A smartphone that is sleek, easy to use, and has an excellent camera.
Augmented Level Products: A smartphone that has a fingerprint reader, facial recognition, and augmented reality features.
Potential Level Products: A smartphone that can be used as a virtual reality headset, a payment device, and a health tracker.
2. Nike Sneakers
Core Level Product: A pair of shoes that are comfortable and provide support while you are walking or running.
Generic Level Products: A pair of sneakers that are available in different colors and styles.
Expected Level Products: A pair of sneakers that are comfortable, stylish, and provide support while you are walking or running.
Augmented Level Products: A pair of sneakers that are comfortable, and stylish, provide support while you are walking or running, and come with Nike+ membership.
Potential Level Products: A pair of sneakers that are connected to the internet and provide real-time feedback on your performance.
3. Ford Car
Core Level Product: A car that gets you from point A to point B.
Generic Level Products: A car that is available in different colors and styles.
Expected Level Products: A car that is reliable, safe, and has a comfortable ride.
Augmented Level Products: A car that is reliable, safe, has a comfortable ride and comes with Ford’s SYNC system.
Potential Level Products: A car that can drive itself, is connected to the internet, and can be used as a mobile office.
4. Amazon Kindle
Core Level Product: An e-reader that allows you to read books electronically.
Generic Level Products: An e-reader that is available in different colors and styles.
Expected Level Products: An e-reader that is lightweight, has a long battery life and has a clear display.
Augmented Level Products: An e-reader that is lightweight, has a long battery life, has a clear display, and comes with a free Amazon Prime membership.
Potential Level Products: An e-reader that is connected to the internet and allows you to read books electronically and listen to audiobooks.
5. Starbucks coffee
Core Level Product: A cup of coffee that is brewed fresh and has a rich flavor.
Generic Level Products: A cup of coffee that is available in different flavors and sizes.
Expected Level Products: A cup of coffee that is brewed fresh, has a rich flavor and is made with high-quality beans.
Augmented Level Products: A cup of coffee that is brewed fresh, has a rich flavor, is made with high-quality beans, and comes with free refills.
Potential Level Products: A cup of coffee that is connected to the internet and allows you to customize your order.
By understanding all five levels of customer need, you can create a map of the customer’s journey from awareness to purchase.
Conclusion: Kotler’s Five Product Levels Model
In order to create a well-rounded product, it is important to understand Kotler’s Five Product Levels Model. This Model outlines the different levels of product development and can help businesses create a successful product that meets customer needs.
The Model is a valuable tool for businesses looking to create a successful and profitable product. By understanding the different levels and what they offer, companies can develop products that meet customer needs while also providing value.
