In the factory we produce cosmetics,
and in the store we sell hope.
Charles Revson, Revlon
Each new product, product, service is created to meet the needs of potential buyers. Philip Kotler identifies several levels at which the product must meet the needs of the consumer in order to be successfully sold on the market. But before we move on to studying them, let's define the basic concept: what is a product?
Product Anything that can satisfy a desire or need and is offered to the market for attention, acquisition, use or consumption. These can be physical objects, services, persons, places, organizations and ideas (Fundamentals of Marketing, 5th European edition, 2015, F. Kotler, G. Armstrong, W. Wong, D. Saunders).
Product development- this is a rather lengthy process, because even at the stage of its design, the developer must evaluate the future product according to three main levels:
- goods by design- how the product will solve the problem of the consumer or what benefit he will receive by purchasing the product;
- real product- how the product will look like, what are its main characteristics, packaging, name, quality;
- backed goods- product benefits based on the previous two levels. The added value of the product for which the consumer will purchase it.
At the heart of product development is the level of product by design. It is at this stage that the manufacturer must answer the question: what is the consumer actually buying? What problem are we solving by offering him our product? What is the benefit for the consumer?
Buying a beautiful dress, a woman actually buys self-confidence. Buying a drill, a man actually gets a hole in the wall. By purchasing an expensive smartphone, the consumer is actually buying belonging to a certain social stratum.
Product in real performance
At the level of real performance the product takes on a physical form.
Kotler highlights 5 main characteristics, which the product must have at this level:
Quality
properties
external design
brand
package
Any product that you purchase has a set of characteristics, even a service. Turning to the hairdresser, you get a package - service, appearance master, brand - the name of the salon and its reputation in the city, the external design of the beauty salon, etc.
The main task this level - to convey to the consumer the main advantage of the product. For example, Nokia phones are reliable, Iphone is the best smartphone on the market in terms of a number of characteristics, Samsung is distinguished by display brightness and color saturation.
Highlighting and trying to convey to the end consumer the main advantages of the product at the level of real performance, we are not talking about competition yet. So far, these are only distinctive features that allow you to differentiate goods in a variety of offers. The real competition starts at the level of the reinforcing product.
It is at this level that producers offer additional services that turn the material consumption of a product into an emotionally rich action. For example, when we buy the services of an Internet provider, we expect that in the event of a connection problem we can get a free consultation, call a specialist at home, or receive detailed instructions on how to fix problems without leaving our computer. But over time, such reinforcements become commonplace, and truly progressive companies are looking for more and more new ways to provide the consumer with new reinforcements.
In fact, when purchasing almost any product (including even consumer goods), the consumer acquires something more than just a physical item, service or object. Offering for sale even an idea, the developer must present it in such a way that the set of characteristics of the idea satisfies the need of the buyer and surprises with reinforcements. A consumer good is a complex set of benefits that this moment top priority for him.
Remember! A product must pass three levels of evaluation before you begin production.
Specialists must take into account such a concept as product levels in order to make it as useful and effective as possible for the consumer. There are two main concepts that describe product levels.
The concept of 3 product levels
Philip Kotler in his works described the concept of three levels of goods. This concept is based on the division of goods into levels in the following sequence:
First level- this is essentially the idea of \u200b\u200bthe product, its "heart". At this level, we are not talking about the product itself in its material form, but rather about the needs and concerns of the client, which this product is able to solve. For example, a consumer does not acquire a car in itself, but the ability to move around the city with comfort. It is important that the seller does not focus on the properties of the product, but sells exactly the solution to the problem of the buyer.
Second level This is a real product. At this stage, the product, as a rule, has a number of essential characteristics: properties, quality, external design, brand or brand, packaging.
Third level- This is a product with reinforcements. That is, it is not only the product itself and the benefits that it brings, but also the additional benefits and services that are attached to it: for example, a repair guarantee, a home delivery service, etc.
Consider the three-level concept using the example of a conventional screwdriver. At the first level, we see it as a way to get screwed screws. At the second level there will be the product itself: a tool with a handle and a drill that will steadily turn the screws for a certain time, set by the manufacturer as a service life. The third level is all that will make it possible to distinguish this product from many others: the ability to give it for repair during the warranty period, a set of drills for different purposes, the possible combination in a screwdriver as an additional one - the functions of a drill, an additional power supply for work without recharging and etc.
The concept of 5 product levels
Another classification of product levels - five-level, is a more extended version of the concept discussed earlier.
As in the previous concept, everything starts with core value level, which the consumer receives, that is, in fact, from the result that will be acquired with the purchase of this product.
Then comes base product, filled with those mandatory characteristics, without which it is impossible to imagine the existence of this product. This includes the brand, packaging, quality level.
Next level - expected product. These are the properties that the buyer expects to find in this product. This is the so-called "ideal product", which represents all the required features, as well as the expectations of the buyer. Such expectations are based on the experience of buying competing products, so the more developed and competitive the market, the higher the expected level of product.
Fourth level - backed goods, or augmented level. This is a combination of properties and characteristics that make this product unique and allow it to stand out from other competitors. All the additional services surrounding the product make up a complex product, which, if the company has the appropriate resources, can one day become a brand, because this makes the product more competitive.
Last level - potential commodity. This includes all potential features that could improve the product in the future. This level is necessary in order to form a product development strategy, develop and expand markets for its use. The presence of this level helps the product regain lost market positions in the event of a difficult market situation or quickly adjust the product to changing market requirements and expectations.
Kotler's "5 product levels" model is often used in marketing when developing new products and improving a company's existing product range. In this article, we will take a closer look at each of the five levels of product quality that directly affect a company's competitiveness in the industry.
The structure of product levels is as follows: the level of key value, the level of basic characteristics, the expected, supplemented and potential level of the product.
Key value level
The level of core value of a product is a fundamental need that a consumer wants to satisfy by purchasing a product. Core value is the result of purchasing a product. The core value level is the core or heart of any product; the level is the reason for the existence of the product. All other product levels must not conflict with the core value level.
Base stat level
The basic characteristics include such characteristics, without which the product is not able to perform its key functions, without which the product would not exist. These characteristics are commonly referred to as mandatory characteristics or "the must".
Expected level
The expected level of the product is a set of characteristics that the product should have in the opinion of the target consumer, consumer expectations. This level is often called the "ideal product profile" and it includes a set of basic required features, as well as all the expectations and perceptions of the target consumer about the functions of the product.
Usually, the consumer bases expectations and ideas about the functions of the product on his own personal experience use of competitive products. Therefore, the expected level partially reflects the competitive situation in the market. The higher the development of the market and the stronger the competitive situation in the market, the more the “expected level” will differ from “ basic level goods" and vice versa.
Augmented level
Complementary or differentiating level of a product is a set of characteristics important for the consumer that make the product unique, not similar to the products of key competitors. This level reflects a higher degree of development of the product or service of the campaign. If a product has an augmented level, then a brand can grow out of this product, the product has a sustainable competitive advantage.
Potential level
The potential level of a product is a set of possible improvements and modifications of a product that can ensure its competitiveness in the future. It is necessary for the formation of a long-term vision and strategy for the product available for the campaign. At this level, characteristics appear that do not yet exist in the current campaign product, and the consumer does not even think about such potential characteristics.
In case of loss of competitive advantage (copying by competitors) or toughening of competition, weakening of the position of the product on the market, the potential level of the product will help you quickly respond to a change in the situation.
Are you interested in the practical use of the model?
Ready solutions
You can download a template for creating a product development action plan in the section.
There are three levels of product: product by design, product in actual performance, and product with reinforcement.
1. Product by design - the core of the concept of the product as a whole. At this level, they answer the question: what will the buyer actually buy? After all, in essence, any product is a packaged service to solve a problem. For example, customers do not purchase drills of a certain diameter, but holes of the same diameter. Therefore, the task of the market figure is to reveal the needs hidden behind any product and sell not the properties of this product, but the benefits from it.
2. The developer will have to turn the product according to the plan into a product in real performance. Lipstick, computers, etc. All of these are real products. A real product can have five characteristics: quality, properties, appearance, brand name and packaging.
3. Finally, the developer may provide additional services and benefits (delivery and credit, installation, after-sales service, warranties) that make up the reinforced product. If we consider a computer, then instructions, work programs, delivery services, programming, repair, guarantees, etc. serve as reinforcement for a product.
Classification of goods in terms of marketing.
Product groups:
- Durable goods - withstand repeated use;
- Non-durable goods - consumed in one or more cycles of use;
- Services.
Classification of consumer goods:
1. Consumer goods: purchased without hesitation and comparison;
Basic everyday goods - toothpaste, ketchup;
Impulse buying items - magazine, chewing gum;
Goods for emergency cases - umbrellas, shovels.
2. Pre-selection products: options are compared before purchase:
Similar - same quality, different prices;
Dissimilar - should have a wide range.
3. Special demand items: have unique characteristics and brand preferences, do not compare;
4. Goods of passive demand: they do not think about buying them (life insurance, encyclopedias). They require a personal sale.
Consumer properties of the goods:
- Properties of social purpose: the demand for goods by consumers depends on the solvency and social norms of consumption. In addition, on the season, style and fashion.
- Functional properties: the ability to meet the needs of the buyer. They are divided into three groups:
Indicators of excellence in the performance of the main function - the beneficial effect of consumption (qualitative and quantitative indicators);
Indicators of universality - the breadth of the range of application of the goods;
Performance indicators of auxiliary functions - the characteristics of the goods during transportation, storage, maintenance and repair.
- Reliability of a product in consumption: the ability of a product to fully perform its functions during its service life. Groups of reliability indicators:
Reliability - the ability to continuously maintain performance during the service life or operating time;
Durability indicators - service life and resource;
Maintainability - the ability of a product to detect and eliminate possible damage and failures. It largely depends on the unification of the components used.
Persistence - the ability to maintain performance after storage or transportation (in days, etc.). Important for determining the warranty period.
- Ergonomic properties: convenience and comfort of product operation at all stages in the system "man - product - environment".
Groups of indicators of ergonomic properties:
Hygienic - the impact of the product on a person during operation: light, dust, temperature, humidity, hygroscopicity, noise, vibration, the ability to keep the product clean.
Anthropometric - the correspondence of the product and its elements to the shape and mass of the human body: size, weight.
Physiological and psychophysical - the correspondence of the product to the power, speed, energy, visual, taste, sound, taste and olfactory capabilities of a person.
Psychological - the correspondence of the product to the existing and emerging skills of a person, i.e. his perception, thinking and memory.
- Aesthetic properties: the ability of a product to express its socio-cultural significance, degree of usefulness and perfection in human-perceived signs, such as conformity of form to content, style, fashion, environment, proportionality, etc.
- Environmental properties: the level of harmful or beneficial effects of the product on environment during storage, transportation and consumption.
- Consumption safety: characterizes the safety of using the product. Types of safety: electrical, chemical, mechanical, fire, biological, vehicles.
Economic properties: consumption of material to create goods and fuel and energy - in the process of consumption.
3. Task
Explain the possible discrepancy between the subjective categories and quality and the subjective categories of price. In what cases the consumer: is dissatisfied with his purchase; become a fan of the products of this company?
In the wording of the question, it was correctly noted that such categories as quality and price (more precisely, the willingness to pay the price) are subjective. Also subjective are the feeling of dissatisfaction with the purchase and the feeling of commitment to the goods of this company. Let us describe these categories and the relationships between them in more detail.
The main defining characteristic of a product (service), as you know, is the price 1 . Acting as a buyer of various goods (services), we are used to believing that high consumer properties mean a high price of goods (services) - this is the core of the subjective ratio of the PRICE / QUALITY categories. In this ratio, it is common for the consumer to strive to obtain the maximum quality for a limited, minimum price. Realizing that this is not always possible, the consumer strives for some optimal PRICE/QUALITY ratio, and not to the detriment of the latter.
So, the discrepancy between subjective quality categories and subjective price categories depends on 2:
- the degree of readiness for the perception of the goods;
- relationship to the product.
Let's explain this.
1) The discrepancy between the subjective categories of price and quality is determined by the degree of readiness of the buyer to perceive the goods. At any given time, people are in varying degrees readiness to make a purchase. Some are completely unaware of
product - in this case it makes no sense to talk about the discrepancy between the subjective categories of quality and price. Other buyers may be informed about the product (service), but not enough to adequately assess the price / quality ratio; this type of buyers is inclined to believe that any price for a product is expensive, because the buyer seeks to obtain the maximum quality for the minimum price, but does not know the merits of the product.
The third type of buyers is aware of the properties of the product, but has no interest (need) in the product; for this type of buyers, the main discrepancy between the subjective categories of quality and price is similar to the previous type of buyers.
The fourth type of buyers - interested in the product; this type of buyer has an adequate idea of the quality of the goods, but the discrepancy between the categories of quality and price may arise due to the fact that at the time of purchase the buyer may simply not have enough money. The fifth type of buyers are those who intend to buy a product (service) for the offered price; as a rule, these buyers no longer have a discrepancy between the subjective categories of price and quality, otherwise these buyers would belong either to the third or fourth types.
2) The discrepancy between the subjective categories of price and quality is determined by the attitude of buyers to the product. The market audience can relate to the product (service) enthusiastically, positively, indifferently, negatively or hostilely. Not always this attitude is caused by the quality of the goods. This means that in the sense of the discrepancy between the subjective categories of price and quality, the attitude towards the product makes the following adjustments: buyers with an enthusiastic and positive attitude towards the product are ready to pay more money for less quality; while buyers with an indifferent, negative or hostile attitude towards the product are either not ready to pay money for any quality of the product at all, or are ready to pay less money for a very high quality product 3 .
Now let's say a few words about dissatisfaction with the purchase and commitment to the products of this company.
It is known that the final satisfaction with the purchase consists of 12-17 components. The main reason for dissatisfaction with the purchase is the failure to obtain the expected ratio of subjective categories of price and quality.
It is important to remember that not only the poor quality of a product or service can lead to dissatisfied customers. The most extreme case of dissatisfaction with a purchase due to poor quality is marriage.
Other common reasons for customer dissatisfaction are the company's work not with its customers, i.e. erroneous positioning of the product on the market, the wrong choice of the target audience.
As studies show, there is a big difference between completely satisfied customers and simply satisfied ones. It is completely satisfied customers that are the key to long-term financial success.
Now about the cases when the buyer becomes an adherent of the goods of this company. The main reason for customer loyalty is the compliance of the purchase with the expected value for money 4 . Further, it should be noted that commitment is a multifaceted concept. Consumers may be loyal to the products themselves, as well as brands, stores, and other stand-alone entities. According to the degree of commitment, buyers can be divided into four groups: unconditional adherents, tolerant and fickle adherents, "wanderers".
Die-hard adherents are consumers who are always
buy goods of the same brand.
Tolerant adherents are consumers who are committed to two or three brands.
Falterers are consumers who transfer their preferences from one brand to another: their buying pattern shows that consumers gradually shift their preferences from one brand to another.
"Wanderers" are consumers who do not show commitment to any of the branded products. The noncommitted consumer either buys any brand currently available or wants to buy something different from the existing range.
List of sources used
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1 Marketing. Textbook for universities, edited by A.N. Romanova. - M .: Banks and stock exchanges, 2002. - Pp. 24.
2 Basovsky L.E. Marketing. - M .: Infra-M, 2001. - P. 164.
3 See Golubkov E.P. Marketing research theory: theory, practice, methodology. – M.: Finpress, 2000..
4 Golubkov E.P. Marketing research theory: theory, practice, methodology. – M.: Finpress, 2000..
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