¨ In planning its market

offering, the marketer

needs to address five
product levels
¨ Each level adds more
customer value, and
together the five
constitute a customer-
value hierarchy.
¨ The core benefit is the
service or benefit the
customer is really
buying.
¨ Marketers must see
themselves as benefit
providers.

A hotel guest is buying rest and

sleep.
¨ Basic product At the
second level, the
marketer must turn the
core benefit into a
basic product.
Thus a hotel room should basically include a bed,
bathroom, towels, desk, dresser, and closet.
¨ Expected Product At
the third level, the
marketer prepares an
expected product.

In beach resort hotels, guests minimally expect a

swimming pool, a beach, a beach restaurant, a main
restaurant, and good service.
¨ At the fourth level, the
marketer prepares an
augmented product
that exceeds customer
expectations.
¨ Differentiation arises
and competition
increasingly occurs on
the basis of product
augmentation.
¨ Each augmentation
adds cost. Augmented
benefits soon become
expected benefits and
necessary points-of-
parity in the category.

If today’s guests expect all these facilities in

a hotel, competitors must search for still other
features and benefits to differentiate
themselves.
¨ Differentiation is the process of adding a set of
meaningful and valuable differences to distinguish the
company’s offering from that of the competitors’.
¤ Product Differentiation is a marketing strategy
whereby businesses attempt to make
their product unique to stand out from competitors.
¤ Service differentiation: When the physical product
cannot easily be differentiated, the key to
competitive success may lie in adding valued
services and improving their quality.
¨ Form differentiation: A
product can be
differentiated based
on the form of the
product. The physical
structure, size and
shape of the product
can be used to
differentiate it from
others.
¨ Form differentiation:
Although essentially a
commodity, any medicine
or pills can be
differentiated by
dosage, size, shape,
color, coating, or action
time.

The absorption of ascorbic acid is increased and

thus a marked improvement of the bioavailability
of vitamin C is attained as compared to the non
retarded form.
¨ Features Most
products can be
offered with varying
features that
supplement their basic
function.
¨ Performance quality is
the level at which the
product’s primary
characteristics operate
¨ Conformance quality
is the degree to which
all produced units are
identical and meet
promised
specifications.
¨ Durability, a measure
of the product’s
expected operating
life under natural or
stressful conditions.

Durability is a valued attribute for

vehicles, kitchen appliances, and other
durable goods.
¨ Repairability
measures the ease of
fixing a product when
it malfunctions or fails.
¨ Ideal repairability
would exist if users
could fix the product
themselves.
Repairability Index
Apple's iPhone 15 Pro and
iPhone 15 Pro Max have a
new frame design, which
could make repairing the
devices' screens or swaps
of their batteries easier.
However, iFixit gives the
new phones a poor
repairability score: 4 out
of 10.
¨ Reliability is a
measure of the
probability that a
product will not
malfunction or fail
within a specified time
period.
¨ Style describes the
product’s look and feel
to the buyer and
creates distinctiveness
that is hard to copy.
¨ Design is the totality
of features that affect
the way a product looks,
feels, and functions to a
consumer.
¨ It offers functional and
aesthetic benefits and
appeals to both our
rational and emotional
sides.
¨ Customer training
¤ Customer training
programs are courses
created to help users,
use your product.
¤ Customer training is
also useful in helping
the intermediaries sell
your product.
¨ Maintenance and
repair programs help
customers keep
purchased products in
good working order.
These services are Rolls-Royce launched IntelligentEngine, a new

critical in business-to- initiative aimed at developing intelligent aircraft

engines that would also learn from their own previous
business settings. experience and the experience of other engines, and
with technological advances, may one day even be
able to repair themselves.
¨ Customer consulting
¤ Customer consulting to
gather information
from your client,
understand their goals,
and recommend the
right products.
¨ Ordering ease
describes how easy it
is for the customer to
place an order with
the company.
¨ Augmented services
describes those parts
of the service offering
that the customer is
aware of and
responds to but are
not part of the product
core.
¨ Delivery refers to how
well the product or
service is brought to
the customer, including
speed, accuracy, and
care throughout the Cemex promises to deliver concrete
faster than pizza, equipping every truck
process. with a global positioning system (GPS).
Its 24/7 LOAD service program
guarantees delivery within a 20-minute
window
¨ Need family: The core
need that underlies the
existence of a product
family.

Example: food
¨ Product family: All the
product classes that
can satisfy a core
need with reasonable
effectiveness..

Example: bakery
¨ Product category: A
group of products
within the product
family recognized as
having a certain
functional coherence,
also known as a
product class.

Example: pastry.
¨ Product line: A group of
products within a
product category that
are closely related.
¤ They perform a similar
function
¤ They are sold to the
same customer groups.
¤ They are marketed
through the same outlets
or channels.
¤ They fall within given
price ranges.
Example: shortcrust pastry.
¨ Product type: A group
of items within a
product line that share
one of several possible
forms of the product.
Example: sweet shortcrust pastry.
¨ Item (also called
stock-keeping unit or
product variant): A
distinct unit within a
brand or product line
distinguishable by size,
price, appearance, or
some other attribute.

Example: pasta frolla

 Water Flavored

110 PART II • DEVELOPING A BRAND STRATEGY

Nonalcoholic
Beverages Alcoholic

Water Flavored

Milk Juices Wine

Nonalcoholic Alcoholic
FIGURE 3-3 Hot Soft
Beer
Beverage Category beverages drinks
Hierarchy Distilled
Milk Juices Wine
spirits

FIGURE 3-3 TheHot organization of the Soft product category hierarchy that generally prevails in
Beer
Beverage Category beverages drinks
Hierarchy
an important role in brand awareness, brand consideration, and consumer dec
example, consumers often make decisions in a top-down fashion, first decidin
water or some type of flavored beverage. If the consumer chooses a flavored dr
The organization of the product category hierarchy that generally prevails in memory will play
sionrole
an important would
in brandbeawareness,
whether
Un-Cola to have
brand an alcoholic or a nonalcoholic
Cola and consumer
consideration, decision making.drink,
For and so on. F
example,might
consumers
then often make decisions
choose in a top-down
a particular brand fashion,
withinfirstthedeciding
product whether to havein which they a
category
water or some type of flavored beverage. If the consumer chooses a flavored drink, the next deci-
The depth
sion would be whether to haveof brand awareness
an alcoholic or a nonalcoholicwill influence
drink, the likelihood
and so on. Finally, consumers that the bran
whereas
might then the breadth
choose a particular of brand
brand within awareness
the product category indescribes theinterested.
which they are different types of situa
The brand
depth ofmight
brand awareness
come towillmind.
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general, thatdrinks
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comesgreat
to mind,
breadth of awar
whereas the breadth of brand awareness describes the different types of situations in which the
¨ A product system is a
group of diverse but
related items that
function in a
compatible manner.
For example, the extensive iPod product
system includes headphones and headsets,
cables and docks, armbands, cases, power
and car accessories, and speakers.
¨ A product mix (also called a product assortment) is
the set of all products and items a company offers
for sale.

The length of a product mix refers to the total number of items in the mix.
The depth of a product mix refers to how many variants are offered of each product in the line.
¨ Objectives of
increasing the product
line length
¤ One objective is to
create a product line
to induce up-selling. C-Class opens the Benz brand to
potential future buyers by catching
them while they’re young with the
hopes that they upgrade as they get
more affluent and older.
¨ Objectives of
increasing the product
line length
¤ A different objective is
to create a product
line that facilitates
cross-selling.
Hewlett-Packard sells printers as well as
computers and many other accessories.
¨ Objectives of
increasing the product
line length
¤ Still another is to
protect against
economic ups and
downs. Electrolux offers white goods under different
brand names in the higher tier, middle-
market, and lower tier.
¨ Strategies of
increasing the product
line length
¤ Line stretching occurs
when a company
lengthens its product
line beyond its current
range, whether down-
market, up-market, or
both ways.
 Down-Market Stretch A
company may want to introduce
a lower-priced line for any of
three reasons:
1. Strong growth
opportunities in the down
market.
2. The company may wish to
tie up lower-end
competitors who might
otherwise try to move up-
market.
3. The middle market might
be stagnating or
declining.
Old Navy is for the family bargain-shopper, the Gap
is for a more moderate income-level
Up-Market Stretch
Companies may wish to
enter the high end of the
market for any of these
reasons:
1. To achieve more
growth.
2. To realize higher
margins
3. To position themselves
as full-line
manufacturers.
¨ Two-Way Stretch
Companies serving the
middle market might
stretch their line in
both directions.