Lesson 6.1: What Is a Product? The Three Levels

Introduction

Welcome to Lesson 6.1 of Foundation Marketing! Today, we're diving into the concept of products and how they are structured in marketing. Understanding what a product truly is and its levels can help us create excellent marketing strategies that resonate with consumers.

Learning Objectives

By the end of this lesson, students will be able to:

Identify the three levels of a product: the core benefit, the actual product, and the augmented product.
Understand the continuum from pure goods to pure services, recognizing where products fit within this spectrum.
Classify products into categories: convenience goods, shopping goods, specialty goods, unsought goods, and industrial goods.
Analyze a product mix by exploring its width, length, depth, and consistency.
Make product-line decisions through stretching, filling, and pruning.

The Three Levels of a Product

A product is not just a single item—it's a layered concept that can be understood at three levels:

1. Core Benefit

The core benefit is the fundamental need or want that a product fulfills. Think about why a consumer purchases a product. For example:

Smartphone: The core benefit is communication.
Toothpaste: The core benefit is oral hygiene.

In essence, the core benefit answers the question, "What is the customer really buying?"

2. Actual Product

The actual product includes all the features that make the core benefit tangible. It encompasses variables like design, quality, branding, and packaging. For instance:

Smartphone: The actual product includes the brand name (like Apple or Samsung), design, features (camera quality, storage), and warranty.
Toothpaste: The actual product includes flavor, texture, packaging, and brand (like Colgate or Crest).

3. Augmented Product

The augmented product adds additional services or benefits that enhance the customer experience beyond the actual product. This might include:

Smartphone: Customer service, a warranty, and software updates.
Toothpaste: Promotions, subscription services, or free samples.

Recap of the Three Levels

Core Benefit: What the product accomplishes.
Actual Product: Features and characteristics of the product.
Augmented Product: Additional services that enhance value.

The Continuum from Pure Goods to Pure Services

Products exist on a spectrum from pure goods to pure services. This continuum helps marketers understand how to position their offerings. Here’s how it looks:

Pure Goods: Items that are completely tangible (like a car or a loaf of bread).
Hybrid Products: Items that are a mix of goods and services (like a restaurant meal, where you get food plus service).
Pure Services: Intangible products (like a haircut, where there is no physical product).

This understanding helps you decide how you want to market your product based on its classification.

Product Classifications

Products can be classified into various categories that help marketers determine how to sell them effectively. Let's look at some of these classifications:

1. Convenience Goods

These are items that consumers purchase frequently and with minimal effort. Examples include:

Snacks
Grocery staples (like milk or bread)

2. Shopping Goods

These goods require more consideration before purchase. Consumers usually compare quality, price, and style. Examples:

Clothing
Electronics

3. Specialty Goods

Specialty goods are unique and have specific characteristics for which consumers will spend considerable time or money. Examples include:

Luxury cars (like a Ferrari)
Designer handbags

4. Unsought Goods

These are items that consumers do not think about purchasing until the need arises. Examples include:

Life insurance
Funeral services

5. Industrial Goods

These are products used in the production of other goods and services. Examples include:

Machinery
Raw materials (like steel)

The Product Mix

Understanding a product mix can help optimize how products are presented in the market. The product mix consists of four elements:

1. Width

Width refers to the number of different product lines a company offers. For example, if a company sells shoes, clothing, and accessories, it has a wide product mix.

2. Length

Length refers to the total number of items in a company’s product lines. If there are 10 shoe styles, 15 clothing styles, and 5 accessory styles, the length is 30.

3. Depth

Depth indicates how many variations of each product line exist. For instance, if a shoe line has sneakers, dress shoes, and sandals in various colors and sizes, that’s depth!

4. Consistency

Consistency measures how closely related product lines are in terms of usage and production. For example, if a company sells only fitness wear, there is high consistency.

Product-Line Decisions

Effective product-line decisions are crucial for managing a product portfolio. Companies can make three main types of decisions:

1. Stretching

Stretching involves adding products to the existing line at either the lower or upper end. For example, a premium ice cream brand might introduce a budget line of ice cream.

2. Filling

Filling occurs when additional products are added within the existing range to fill gaps. An example would be a company that produces various cookie flavors deciding to add a peanut butter flavor.

3. Pruning

Pruning removes underperforming products from the line. If a brand finds that a specific product is not meeting sales goals, it may decide to discontinue it.

Conclusion

Understanding the layers of products and how they fit within the marketing mix is crucial for successful marketing strategies. By mastering the concepts of core benefits, actual products, and augmented products, along with product classifications and mix elements, students will be well-equipped to create impactful marketing campaigns.

Study Notes

The three levels of a product: core benefit, actual product, augmented product.
Continuum: pure goods to pure services.
Product classifications: convenience goods, shopping goods, specialty goods, unsought goods, industrial goods.
Product mix dimensions: width, length, depth, consistency.
Product-line decisions: stretching, filling, pruning.