Philip Kotler's five product levels
Understanding the five levels of a product is crucial for the Product Manager not only to maximize the value offered to the customer but also to drive innovation.
I acknowledge that my major gap in Product Management is in the Marketing area. While I do not claim to be an expert, I am seeking to deepen my knowledge on the subject. One concept I already knew, and recently revisited, is the five levels of the product created by Philip Kotler.
In this article, I present a summary of Philip Kotler's concept and its relationship with Product Management work.
Five Levels of the Product
Philip Kotler introduced the concept of the five levels of the product, providing an essential framework for understanding the true value that a product offers to consumers.
These levels outline the layers of a product as well as help Product Managers to deeply understand customer needs and develop more effective product strategies.
Core Product
This level represents the essence of the product, the main benefit that meets the customer's needs. As Kotler highlights in his book "Marketing Management," this is the focal point around which all other levels are built. For example, a smartphone meets the need for communication and access to information.
Generic Product
Here, the Product Manager identifies the basic elements of the product. Kotler mentions that this is the level where the customer considers whether the product meets their minimum needs. In the case of the smartphone, it's about physical characteristics and basic functionalities.
Expected Product
In this case, customers expect certain attributes from the product. According to Kotler in "Principles of Marketing" these are the features that make a product acceptable and competitive in the market. For example, regarding smartphones, customers expect good screen quality, fast performance, and a variety of available apps.
Augmented Product
Here, the Product Manager can differentiate the product by offering additional benefits that exceed customer expectations. Kotler highlights that this is where innovation can be applied to add value to the product. For example, exceptional customer service, extended warranty, or access to exclusive content through the smartphone.
Potential Product
This level covers the future possibilities and innovations of the product. For Kotler, this space is for creativity and anticipating future customer needs. In the case of the smartphone, it could involve the integration of emerging technologies, such as augmented reality or more advanced artificial intelligence.
Importance for the Product Manager
The five levels of the product have fundamental relevance for the Product Manager as they provide a robust framework for understanding consumer expectations and creating strategies that maximize product value.
For example, let's consider Tesla. The success of Tesla's electric cars goes beyond the physical product itself. The company stands out not only for innovation in electric vehicle technology but also for the experience offered to customers, such as remote software updates that continually improve car performance. This exemplifies how understanding the different levels of the product allows the Product Manager to go beyond tangible features and focus on offering a broader and more complete experience to customers.
Furthermore, understanding the five levels enables the Product Manager to identify gaps in the market and develop product strategies that are more closely aligned with consumer needs. For example, Amazon revolutionized not only the concept of e-commerce but also the customer experience by offering everything from fast delivery to easy product returns, all aimed at enhancing the quality of the product to ensure customer satisfaction and loyalty.
The ability to anticipate trends and future customer needs is another crucial point. By exploring the potential of the product, the Product Manager can innovate and adapt the product to meet emerging market demands. In fact, a notable example is the launch of the iPhone by Apple. In addition to the functionalities of a phone, Apple anticipated the growing demand for a device that also offered music, a camera, and internet access, ushering in a new era of smartphones and transforming the market.
Thus, the application of the five levels of the product empowers the Product Manager to go beyond simple physical product features. It allows them to focus on broader aspects such as customer experience, anticipating future demands, and creating added value. These aspects are crucial for the success and competitiveness of a product in the modern market.
Practical Example
A practical example utilizing Philip Kotler's five levels of the product in managing a fictional product: a smart electric bicycle named "EcoRide." This example will illustrate how each level can be applied to maximize the value offered to the customer and drive innovation.
Core Product: Sustainable and Efficient Mobility. Application: The EcoRide is designed to meet the primary need for mobility by providing an ecological and efficient alternative to conventional transportation.
Generic Product: An electric motor, rechargeable battery, lightweight frame, brakes, and lighting system. Application: Ensuring that the EcoRide meets the minimum requirements of a cyclist: ease of use, safety, and the fundamental functionality of moving from one point to another without excessive physical effort.
Expected Product: Bluetooth connectivity, mobile app for monitoring, ergonomic design, water resistance, and durability. Application: The EcoRide offers competitive features, including a system that enables users to track distance traveled, monitor battery health, and perform preventive maintenance through the app.
Augmented Product: Mobile technical support, extended warranty, software updates, and partnerships with bike-sharing services. Application: The EcoRide differentiates itself by providing services that surpass expectations, including on-site customer maintenance and software updates aimed at enhancing the user experience.
Potential Product: Integration with emerging technologies includes autonomous navigation systems, augmented reality for cycling routes, and integration with smart public transportation systems. Application: Exploring future possibilities for the EcoRide, adapting it to meet future market demands, and maintaining leadership in innovation in the electric bicycle segment.
In this scenario, the application of the five levels of the product allows the Product Manager of EcoRide to create an electric bicycle that meets basic transportation expectations, moreover offers an enriched and innovative experience. Furthermore, it keeps the brand ahead in terms of innovation and adaptation to future trends, ensuring its relevance and success in the market.
In summary, the five levels of the product are a powerful tool for the Product Manager, enabling the creation of products that meet and exceed customer expectations. By understanding and applying these levels, product managers can drive the success and relevance of their offerings in the ever-evolving market.
Bibliography:
- Kotler, P., & Keller, K. L. (2016). Administração de Marketing.
- Kotler, P., & Armstrong, G. (2017). Princípios de Marketing.