Product Levels The Customer Value Hierarchy

In planning its market offering, the marketer needs to address five product levels (see Figure 12.2)r Hacli level adds more customer value, and the five constitute a customer value hierarchy. The fundamental level is the core benefit: the service or benefit the customer is really buying, A hotel guest is buying "rest and sleep.' The purchaser of a drill is buying ''holes.'" Marketers must see themselves as benefit providers.

At die second level, the marketer has to turn the core benefit into a basic product. Thus a hotel room includes n bed, bathroom, towels, desk, dresser, and elnsei.

At die thud level, the marketer prepares an expected product, a set 0f at tributes and conditions buyers normally expect when they purchase this product, lintel guests expect a clean bed, fresh towels, working lamps, and a relative degree of quiet. Because most hotels can meet this minimum expectation, the traveler normally will settle for whichever hotel is most convenient or least expensive.

At the fourth level, die marketer prepares an iiijgpivnted product that exceeds customer expectations, In developed countries, brand positioning and competition [¿ike place at this level, hi developing countries and emerging markets such as Choi a and India, however, competition takes place mostly at the expected product level.

Differentiation arises on the basis of product augmentation. Product augmentation also leads the marketer to look at the user's total consumption system: the way the user performs (lie tasks of getting and using products and related services.3 As Levitt Observed long ago:

five ProCi.d Lewis

Customer Value Hierarchy

The new competition is not between what companies produce in their factories, hnt beiviceA whcit they idd to their factory output in the form uf packaging, services, advertising, customer advice, financing. delivery arrangements, warehousing, and other iliin^s that people valuftl

So trie things should be noted about prod uci-angine mat ion strategy. First, each augment at ion adds cost. Second, augmented bent1 fil s soon tfepome expected benelltsand necessary poiuts-of-parity, Today's huit:! Ruesis expect cable or satëUltc television Wifh a remote control and high-speed Intiimcl accessor two phone linçS-This means Competitors will InVe to Search tor still other features and limite H is. Third, lis companies raise the price tit their aug-nienicd product, some compel hors offer ;t "Stripped-down" version at it much lower price. Thus, alongside the growth of fine hotels like i-our Seasons and Hit/. Carlton, we sec the emergence ofkrwer-cost hotels and motels tike Motel H and Comfort [nil, which cater to clients w]ni simply want the basic product.

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Responses

  • DEMETRIA LUCCHESI
    Which are the five hierarchy of values marketing?
    7 years ago
  • Madihah
    What is customer value hierarchy in marketing?
    7 years ago
  • Egidio
    What are the five product levels in marketing?
    7 years ago
  • florian
    What is product hierarchy in marketing?
    7 years ago
  • Dennis
    How will a company address the five product levels?
    7 years ago
  • brenda
    What is the level of consumervalue hierarchy?
    6 years ago
  • AVAH WATSON
    What are the levels of customer value hierarchy?
    6 years ago
  • daniel kuster
    How do the five product level constitute a customer value hierarchy?
    3 years ago

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