Philip Kotler's 5 Levels of Product with Examples

Table of Contents

What are Five Levels of Product?

The “Five Levels of Product” also called the “Five Levels Product Model” is a concept put forth by marketing experts Philip Kotler and Kevin Lane Keller. This idea was introduced in their book titled “Marketing Management,” which was published in 2003.

This model is also known as Kotler’s 5 Levels of Product. These five product levels include the following:

Core Benefit/Product
Generic Product
Expected Product
Augmented Product
Potential Product

So, why did Kotler and Keller come up with this? Well, they wanted businesses to understand that a product isn’t just about what it physically is; it’s also about what it means to customers.

By looking at these five levels, companies can make products that not only meet but also exceed what customers want. This helps businesses make better products and keeps customers happy.

The 5 Levels of Product: Defining

Let’s understand what each product level is with their examples.

Core Product

Core Product or Core Benefit refers to the fundamental utility or main advantage that customers receive when they buy a product or service. In simple terms, it’s what a customer really wants when they make a purchase. For instance, when you buy a toothbrush, the core product is having clean teeth. This concept is crucial in marketing because it helps businesses understand why customers choose a particular product.

Importance of Core Product:

Value Proposition: The core product forms the basis of your value proposition. It defines what customers gain from your product or service.
Customer Attraction: Think of the core product as a magnet that attracts customer interest. It’s what sets your brand apart and draws potential customers in.
Retention Engine: The core product fosters customer loyalty by consistently fulfilling their core needs. Effective marketing emphasizes this reliability.

Examples of Core Products:

Apple iPhone: Its core product is communication and connectivity, but it’s also a fashion statement and a pocket computer.
Nike Running Shoes: Core product: performance and comfort. They also serve as a fashion statement and motivation boost.
Netflix: Core product: a library of on-demand entertainment. Features like tailored content and exclusive shows enhance it.

Generic Product

A Generic Product is like the simpler version of something you buy, often found in stores without famous brand names. They are known for their affordability, making them an excellent choice for budget-conscious shoppers.

Generic products play a crucial role in providing cost-effective choices, ensuring accessibility to quality goods, and offering versatile options for consumers.

Read More: Buyer Behavior – Definition

Key characteristics of generic products include:

No Fancy Brand Names: Generic products don’t carry famous logos but rather describe what they are, like “sneakers” or “cola.”
Affordable Prices: They are usually cheaper since you’re not paying for fancy advertising or brand names.
Same Quality Inside: Despite lacking famous names, generic products are often just as good as branded ones, offering the same quality and functionality.

Examples of Generic Products:

Store-Brand Cereals: These budget-friendly cereals offer the same taste and nutrition as big-name brands.
Generic Pain Relievers: They contain the same active ingredients as their brand-name counterparts, offering relief without a high price.
Supermarket Bottled Water: While lacking a famous mountain on the label, they provide pure hydration at an affordable cost.

Expected Product

Expected Product is what customers naturally anticipate when they purchase a product. It encompasses the standard features and conditions associated with a specific product category. Here are its features:

Customer Satisfaction: Meeting expectations leads to customer satisfaction, fostering loyalty and trust.
Trust Building: Consistency in delivering the expected product builds trust and a positive brand reputation.
Reduced Returns: When products align with expectations, there are fewer returns and complaints, saving time and money.

Read More: 6 Steps in Market Research Process

Examples of Expected Products:

Smartphone Battery Life: Customers expect a smartphone to have a reasonable battery life that lasts throughout the day with regular use.
Hotel Cleanliness: When booking a hotel room, guests anticipate a clean, tidy space with fresh linens and toiletries.
Fast Food Order Accuracy: At fast-food restaurants, customers expect their orders to be correct and complete.

Meeting expected product standards is vital for satisfying customer needs and establishing a strong brand reputation. Employing strategies like quality assurance, clear communication, effective training, and customer feedback can help in consistently delivering the perfect expected product.

Augmented Product

Augmented Product refers to a product enriched by additional features or services offered by the seller, differentiating it from competitors. Augmented products play a vital role in boosting sales, building customer loyalty, and establishing a positive brand image.

Strategies like value-added services, warranties, exclusive bundles, and loyalty programs can effectively implement product augmentation. Here are three key features:

Read More: Market Research – Definition

Value-Adding Features: Augmented products include bonus features or services that enhance the customer experience.
Competitive Edge: They set the product apart in a crowded market, attracting more customers.
Increased Customer Loyalty: By delivering extra value, they foster customer loyalty and trust.

Examples of Augmented Products:

Smartphone Accessories: Such as free screen protectors or cases.
Fast-Food Combos: Offering a free dessert with a meal.
Tech Gadgets: Bundling free headphones or chargers with smartphones.

Potential Product

Potential Product is at the fifth position in Kotler’s Five Product Levels Model. Potential product is the forward-looking aspect of product development, considering all possible future enhancements and innovations a product could undergo. Here are three key features:

Future-Centric: It focuses on a product’s evolution, considering emerging trends, technology advancements, and changing consumer needs.
Innovation Playground: It encourages creativity and experimentation, fostering innovative ideas and features.
Competitive Edge: Embracing the potential product allows a company to stay ahead of competitors by anticipating future customer demands.

Examples of Potential Products:

Space Tourism Packages: Preparing for civilian space travel by designing space tourism packages.
Sustainable Packaging Materials: Developing eco-friendly materials to replace traditional plastics.
Blockchain-Based Financial Services: Exploring decentralized financial services using blockchain technology.

Embracing potential products future-proofs innovation diversifies revenue streams, enhances brand reputation, cultivates an innovative culture, and helps seize emerging market opportunities. Strategies include customer-centric innovation, agile development, cross-functional collaboration, and market validation.

Read More: PESTLE Analysis – Definition

Benefits of Kotler’s 5 Levels of Product

Kotler’s 5 Levels of Product is like building a delicious cake but in the world of marketing. Each level adds something special to make customers want it more. Here’s why these levels are important for successful marketing:

Core Benefit (The Cake’s Delicious Taste): This is what the customer really wants, the main reason they buy. Understanding this helps marketers focus on what matters most to customers. It’s like knowing people love chocolate cake.
Generic Product (Basic Ingredients, like Flour and Sugar): These are the essential things that make the core benefit possible. It’s like having good-quality flour and sugar to bake the cake. Marketers need to make sure these basic ingredients are of top-notch quality.
Expected Product (Standard Toppings, like Icing): Customers expect certain things when they buy a product. Just like we expect icing on the cake. Meeting these expectations is crucial for keeping customers happy.
Augmented Product (Extra Goodies, like Sprinkles or Filling): These are the extras that make the product more exciting. It’s like adding colorful sprinkles to the cake. Augmented products give a competitive edge and make customers choose one product over another.
Potential Product (Future Cake Toppings): This is about thinking ahead and imagining what else could make the product even better. It’s like dreaming of new cake flavors or toppings for the future. Businesses that think about the potential product are ready for whatever customers might want next.

Overall, Kotler’s 5 Levels of Product helps marketers understand what customers desire, ensure quality, meet expectations, stand out in the market, and prepare for the future.

How To Apply Kotler’s 5 Levels of Product Model in Practice?

Applying Kotler’s 5 Levels of Product in practice is like crafting a winning recipe for your business. Here are five simple strategies to make it happen:

Know Your Cake (Core Benefit)

Just as a baker starts with knowing people want cake, understand what your customers truly desire. Listen to them, conduct surveys, and analyze data to identify their core needs. For instance, if you’re selling smartphones, it’s about knowing they want to stay connected.

Use the Finest Ingredients (Generic Product)

Ensure the foundation of your product is top-notch. Like a baker uses the best flour and sugar, focus on quality. In the case of smartphones, this means having reliable hardware and software. Quality builds trust.

Ice It Right (Expected Product)

Think of standard features as the icing on the cake. Customers expect certain things, like touch screens on smartphones. Don’t skimp on these. Meeting expectations keeps customers happy.

Sprinkle Some Extras (Augmented Product)

Add that extra pizzazz, like free headphones with a smartphone. These bonuses set you apart and make your product more appealing. It’s like offering a side of fries with a burger – it makes the meal memorable.

Prepare for New Flavors (Potential Product)

Anticipate what customers might want next. Think about future trends and needs, like developing new smartphone features. Being prepared for the future keeps you ahead of the competition.

In practice, these strategies help you create products that not only meet but exceed customer expectations. It’s like baking a cake that’s not just delicious but has the perfect icing, some sprinkles, and exciting new flavors in store. This recipe of Kotler’s five product levels builds trust, keeps customers satisfied, and ensures your business stays ahead in the market.

Examples of Five Levels of Product

Let’s understand more about the 5 levels of product by aligning them with companies’ offerings i.e. products.

Coca Cola

Let’s use Coca-Cola as an example to illustrate the five levels of a product:

Core Product: At its core, Coca-Cola offers refreshments and satisfies thirst. It provides consumers with a satisfying and enjoyable beverage experience.
Basic Product: The basic product includes the physical aspects of Coca-Cola, such as the beverage itself, its taste, and its signature carbonation. It’s what you actually get when you purchase a can or bottle.
Expected Product: Beyond the basics, consumers expect consistency and quality from Coca-Cola. They expect it to taste the same every time they buy it, whether in New York or Tokyo, or Delhi.
Augmented Product: Coca-Cola enhances its offering with additional features like various flavors (e.g., Coca-Cola Cherry, Coca-Cola Vanilla), different packaging options (cans, bottles, etc.), and marketing campaigns to create an emotional connection with consumers.
Potential Product: This level represents future innovations and possibilities. Coca-Cola may explore new formulations, eco-friendly packaging, or health-focused variations to meet evolving consumer demands and stay competitive in the market.

Apple

Again, let’s use Apple as an example to illustrate the five levels of a product:

Core Product: At its core, Apple provides innovative technology solutions that simplify and enhance people’s lives. It’s not just about products; it’s about a seamless and intuitive user experience.
Basic Product: The basic product includes the physical devices Apple offers, such as iPhones, iPads, MacBooks, and Apple Watches. These devices serve specific functions and provide tools for communication, productivity, entertainment, and more.
Expected Product: Apple’s customers expect more than just devices; they expect a sleek design, high-quality materials, and a reliable user experience. They also expect compatibility with various apps and services from the App Store.
Augmented Product: Apple enhances its offering with features like user-friendly interfaces (iOS/macOS), customer support services (AppleCare), ecosystem integration (iCloud), and unique functionalities (Face ID, Siri) that create a distinct brand experience.
Potential Product: This level represents Apple’s ongoing innovation. The company explores new technologies like augmented reality, wearable health devices, and sustainable practices to anticipate and address future consumer needs, maintaining its position as a leader in the tech industry.

Kotler’s 5 Levels of Product Model [Meaning and Examples]