What are Kotler’s Five Product Levels, and what are best practices, tools and online templates for teams and organizations?
Definition of Kotler’s Five Product Levels
The Five Product Levels model was developed by economist Philip Kotler in the 1960s. His book, Marketing Management, was voted one of the 50 best business books of all time in the mid-1990s by the Financial Times. Kotler changed the way marketing was viewed by contending that it was not a singular department, separated from all the others, but that marketing as an activity was an organization-wide responsibility. He asserts that the definition of a product goes far beyond being a physical object or a service. He defines a product as anything that can meet a need or a want, and his Five Product Levels Model provides a way to show the different levels of need customers have for a product, such as: Core benefit, Generic Product, Expected Product, Augmented Product and Potential Product.
Description of Kotler’s Five Product Levels
The model considers that products are a means to an end to meet the various needs of customers, and asserts that there are three ways in which customers attach value to a product:
- Customer Need: the lack of a basic requirement.
- Customer Want:a specific requirement for a product or service to meet a need.
- Customer Demand:a set of wants plus the desire and ability to pay to have them satisfied.
Customers will choose a product based on their perceived value of it and are only satisfied if the product’s value to them meets or exceeds expectations. If the product’s actual value falls below expectations, they will be dissatisfied. An explanation of Kotler’s Five Levels follows below:
- Core benefit: The core benefit is the basic need or want that the customer satisfies when they buy the product. For example, a hotel provides a bed to sleep in when a person is away from home.
- Generic product: The generic product is a basic version of the product made up of only those features necessary for it to function. In this example, a hotel would provide not only a bed, but a few additional items such as sheets, towels and a bathroom.
- Expected Product: The expected product includes additional features that the customer might expect. In the hotel example, the sheets, towels and bathroom would be clean.
- Augmented Product: The augmented product refers to any product variations or extra features that might help differentiate the product from its competitors and make the brand a clearer choice amongst the competition. This could be additional amenities such as a helpful concierge service or tourist guides available to hotel guests.
- Potential Product: The potential product includes all augmentations and improvements the product might experience in the future. This means that to continue to surprise and delight customers the product must be constantly improved. In the hotel example, this could mean gifts, chocolates, or luxury bath products that will make the customer happy and choose that product over others in the future.
The greatest advantage of Kotler’s Five Product Levels Model is that it enables an organization to identify how to satisfy the needs and wants of the customer, in order to help differentiate itself from its competitors.
Tools & Templates
Various types of market surveys and customer service interviews can be used to provide insights, data and additional support when using the Kotler’s Five Product Levels method.
upBOARD's Online Kotler’s Five Product Levels Tools & Templates
Unlike most traditional Five Product Levels techniques, upBOARD’s online Five Product Levels tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device. Many of our planning tools are part of our larger Business Strategy process since the first phases of strategy development include exploring emerging trends, the competitive landscape and customer needs. View video to learn more about the full strategy process:
Learn more about upBOARD’s portfolio of other business strategy best practice tools and templates, including:
ADL Matrix, Affinity Diagrams, Baker’s 4 Strategies of Influence, Balanced Scorecard, Benchmarking, Blue Ocean Strategy, Bowman Strategy Clock, Build-Measure-Learn Feedback Loop, CAGE Distance Framework, Competitive Analysis, Competitive Landscape Analysis, Contingency Planning, Core Competence Analysis, Critical Success Factors, Discovery Driven Planning, Five Forces Model, Force Field Analysis, Gap Analysis, GE McKinsey 9-Box Matrix, Go To Market Strategy, Hambrick & Frederickson’s Strategy Diamond, Hedgehog Model, Hook Model of Behavioral Design, Hoshin Planning System, Kay’s Distinctive Capabilities Framework, Kotler’s Five Product Levels Model, Kotler’s Pricing Strategies, Lafley & Martin’s Five Step Strategy Model, McKinsey’s Seven Degrees of Freedom for Growth, Mission Statements, Mullin’s Seven Domains Model, OGSM Framework, Ohmae’s 3-C’s Model, PEST Analysis, Porter’s Diamond, Portfolio Management, Purpose Statements, Pyramid of Purpose, Scenario Planning, Simonson & Rosen’s Influence Mix, SOAR, Strategic Goals, Strategic Roadmap, Strategy Map, Strategy Roadmap, Strategy Uncertainty Map, SWOT Analysis, TOWS Matrix, Triple Bottom Line, USP Analysis, Value Chain Analysis, Value Disciplines Model, Value Net Model, Values Statement, Vision Statements, VRIO Analysis, and Weisbord’s Six-Box Model.