3 product levels in marketing example. The concept of a product in marketing

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 mandatory features, as well as all the expectations and perceptions of the target consumer about the features of the product.

Usually, the consumer bases expectations and ideas about the functions of a product on his personal experience of using 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 the “basic level of the product” 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.

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TOPIC 4. PRODUCT PLANNING IN MARKETING.. 1

4.1. Product understanding in marketing. Product classifications. 2

Three levels of product understanding in marketing. 2

Goods classification. 2

4.2. Assortment policy of firms.. 4

Main product range. 5

Policy directions in the formation of the product range. 7

4.3. Trademarks. Branding. 8

4.3.1. Trademarks.. 8

The main types of trademark designation. eight

Functions of trademarks and brands. ten

The main types of brand names.. 10

Strategies for distribution and replication of brand names.. 11

Analysis of the product range and brands of chocolate factories in the market of St. Petersburg. 12

4.3.2. Branding. 13

Components of a brand. fourteen

Branding history. fifteen

The most expensive brands in the world. fifteen

An integrated approach to the brand. 17

4.4. Packaging as a subject of research in marketing. 17

Key factors in the creation of packaging.. 17

4.5. Positioning the product on the market. 18

Positioning aids. eighteen

Options for positioning the product in the market. 20

4.6. Product competitiveness. Factors that determine it. 21

The concept of competitiveness.. 21

Competitiveness parameters.. 22

4.7. Organization of product management in the company. 26

4.8. Product life cycle. 28

Types of life cycles. 29

The main stages of the traditional life cycle. thirty

4.9. The importance of new products. Types of novelty.. 36

Novelty by the level of significance of innovations.. 36

Classification of innovations in terms of novelty. 37

Causes of new product failures.. 37

4.10. New product planning process. 37

Sources.. 39

Product understanding in marketing. Product classifications

In marketing, a product is understood not only as the goods themselves, not only as physical entities that we use as consumers: food, clothing, household appliances. The understanding of a product in marketing is much broader than what we encounter in everyday life. The category of goods includes services, information, and much more.

Product Anything that can satisfy a need or need and is offered to the market for the purpose of attracting attention, acquisition, use or consumption. These are physical objects, services (transport, legal, medical, marketing), information, ideas.

This list does not exhaust the range of products. What is a product in marketing is quite an interesting topic for a presentation at a seminar.

In marketing, it is recommended to consider the product at three levels, each of which carries a certain load, reveals some element in the understanding of the product. Philip Kotler depicts these three levels as three concentric circles.

Three levels of product understanding in marketing

In the center - goods by design (1) - the main benefit or service that is provided to the buyer. The main purpose of a vacuum cleaner is to quickly remove dust, a car is to move a person or cargo. Depending on how accurately this idea meets the needs of a potential client, the overall, strategic success of the product in the market is determined. If this core is initially defined incorrectly, then under no circumstances, even with the most talented and competent marketing, the product will not be in demand.

Product in real performance(2) - properties and qualities of the product, design, packaging, brand name. Many elements of this real performance will be discussed in detail in the lectures. In particular, about the brand name, packaging, the definition of competitiveness, as a certain combination of properties and qualities. One way or another, a set of properties without which this product cannot exist is a product in real performance.

There are also some elements that do not belong to the product itself, but without which the product may not be in demand on the market. These are the elements that ensure the acceptance of the goods more favorably and ensure its operation more efficiently. This is the third level of product understanding - backed goods (3). This includes a range of services that provide greater demand for the product, and ensure its more efficient use or operation. These are, for example, after-sales services, delivery and lending conditions (for example, the modern real estate market is a market for 90% of purchases on credit, and without these services there would be no market at all), installation services, warranty service. The listed services are universal. Also, for each type of product, there may also be specific services, which are determined by the peculiarity of this product. Let's say that transport services as a type of service have their own services that are part of the reinforcement category: for example, services that provide easier access for the client to the transport service.

Product classification

The parameters of marketing services, marketing support depend on the place of the product in this classification. This place determines what elements the marketing supply will consist of. Let's denote the two largest groups within the classification:

goods as physical objects

· services.

The conditions of their marketing support vary greatly, this is determined, first of all, by properties (characteristics) of services distinguishing them from physical goods.

The first feature of the service is immateriality . This feature strongly affects service marketing . So, services are difficult to advertise, because for this they must first be visualized. A product as a physical object can be demonstrated, shown during use, and the good mood of the people who consume it can be associated with it. It is difficult to show the service itself, especially services whose consumption process is hidden, for example, a banking service. In television commercials where bank services are advertised, most often, attention is focused rather on the positive emotions of others, and the service itself is not shown anywhere. It is difficult to do this, and in this case it is inefficient to visualize it.

The process of developing a service is also difficult, and this is due to its intangibility, as well as the fact that services not subject to storage (second characteristic of services). This complicates the planning process. So, as an example, let's compare goods and services produced for the same amount. If the owner of an industrial enterprise producing furniture could not sell the goods produced this week, he can do it the next. Furniture remains in stock. But if the owner of the hotel could not rent out the rooms during the week, then this income disappears from him forever. Accordingly, service planning requires more responsibility than product planning, and greater risk inherent in service marketing than product marketing (third characteristic).

The last feature is variability in service quality compared to the quality of the product. If you buy a video recorder from a series manufactured by SONY, then with a fairly high degree of confidence we can say that the properties and qualities of this product will correspond to other units within the series. If any property or quality is missing, then this product will be replaced. The quality of services depends on many factors. For example, foreign language teaching services. The quality of these services depends on the qualifications of the teacher, on the correspondence of his temperament to the temperament of the student, on the mood of both the teacher and the student, etc. The above conditions affect the differences in the marketing of services and goods.

The above classification of goods-services also has an internal division.

Products are divided into two subgroups:

· products consumer purpose (household appliances, clothes);

· products industrial purpose (used in the production of other goods: machinery, equipment, electricity, fuel, vehicles, communication systems).

Services are also divided into two subgroups:

· consumer services;

· services industrial purpose .

Due to the fact that the characteristics of services are extremely diverse, they are further classified according to the following criteria:

consumer services related to the rental of goods (rental),

services with goods owned by the consumer (repair),

personal services of a non-commercial nature, i.e. they are not related to the operation or maintenance of a particular product (training, legal services).

As for industrial services, there are a lot of different classes and groups, so we will designate the main ones.

To the category production relate:

maintenance and repair services,

business consulting services,

financial services (money transfer, account maintenance, purchase and sale of securities),

· marketing services,

information services (delivery of information, maintenance and maintenance of data banks, processing of this information).

In some cases, it becomes necessary to give an even more detailed classification. So, for example, to determine the parameters of marketing support for goods or services, it makes sense to classify goods based on shopping habits :

· products daily demand (their buyer acquires without much thought quite often: toothpaste, salt, soap, bread, etc.). For such products, the decision-making process is very short (spontaneous decision) and they are often bought based on habits.

· products preselection , i.e. those that the consumer, in the process of choosing and buying, usually compares with each other in many respects: quality, design, price, etc. (cars, household appliances, jewelry).

· products special demand - products with unique characteristics, such as branded products that fall into the category of especially fashionable products, for which customers are willing to spend extra effort, an immeasurably long time to acquire. Very few products fall into this category, but if a product does, it takes on very special characteristics in the minds of buyers that are not determined by its quality and design combined. Marketing support of such goods has a special composition of activities.

· products passive demand . These are goods that the consumer does not know about, or knows, but does not think about buying them until the need arises. Thus, freight transport services, from the point of view of an individual client, belong to this category; funeral services.

A more detailed classification of goods is given in the textbook by F. Kotler.

Product policy requires the adoption of consistent decisions regarding individual items and product range. It is convenient to consider each commodity item offered to consumers in terms of three levels (Fig. 2).

Figure 2 - Product levels

The first level - the concept of the product - the core of the concept of the product as a whole. At this level, it is not so much about a real object or service, but about those needs that the future product must satisfy. For example, cosmetics are conceived as a means of making a person outwardly beautiful, a drill as a means of making holes, and so on.

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.

The second level is an object or service in real performance. The developer has to turn the product according to the plan into real product. At this level, the product must have the following characteristics: a set of necessary properties, quality level, specific design, brand name and specific packaging. For example, lipstick, drills are real-life products. A real product can have five characteristics: quality, properties, appearance, brand name and packaging

The last - the third level - goods with reinforcements. It is the commodity itself, with the additional services and benefits attached to it, which together make up the reinforcement. It can be personal attention to customers, home delivery, money back guarantee, etc. If we consider a computer, then instructions, work programs, delivery, programming, repair, warranty services, etc. serve as reinforcement for a product. to the problem he is trying to solve through the use of the product. With this approach, it is possible to identify and apply the most effective ways from the point of view of competition to reinforce their product offering.

In addition to these three levels, a fourth level is also considered in some cases. This is a product for the consumer. It combines the previous three levels plus product characteristics that provide public recognition of the consumer, his image and new perspectives for self-expression.

When making decisions about a product, an enterprise should clearly understand the economic consequences of such decisions (costs and benefits). So, for example, when making decisions on guarantees, it is necessary to provide for the costs of ensuring warranty obligations (warranty workshops, spare parts, personnel, etc.). When selling goods in installments (crediting the buyer), one should keep in mind the increase in the working capital of the enterprise. When making decisions on the development of a brand policy of an enterprise, it is necessary to decide whether it is necessary to resort to the use of trademarks at all, since this will lead to additional costs (patent research, brand development, patenting). When making decisions on the delivery of goods to buyers on FOB, Free, CIF, "free" terms, it is necessary to clearly understand who pays for the freight, insurance, as well as the moment of transfer of ownership from the seller to the buyer and the assumption of the risk of accidental loss or damage to the goods.

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 additional services surrounding the product constitute 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.

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:

1. goods by design- how the product will solve the problem of the consumer or what benefit he will receive by purchasing the product;
2. real product- how the product will look like, what are its main characteristics, packaging, name, quality;
3. 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 a hairdresser, you get packaging - service, appearance of the 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 even an idea for sale, 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 product for a consumer is a complex set of benefits that are currently the most priority for him.

Remember! A product must pass three levels of evaluation before you begin production.