The total product [Product layers]

We will now discuss the idea that products have layers; an idea introduced by Theodore Levitt in 1983. Understanding this milli-marketing concept will assist marketing practitioners to audit their products, design and develop new products for selected target markets, and position their products more accurately in the consumer’s mind.

Direction

In this module we will introduce the idea that product have layers – core product layer, expected product layer, augmented product layer, & the potential product layer. How an understanding of product layers is employed by marketing practitioners when,  positioning a new product or re-positioning an existing product, when designing & developing marketing strategies and tactics, and managing a product on a day to day basis.

Overview of product layers

For marketing practitioners, understanding product layers is crucial as consumers search for and select products that are perceived as best value. Therefore, having a framework when creating a new product or repositioning an existing product is crucial; marketing practitioners must identify what is core and meets the basic needs of the consumer, what is expected at different price points, and what augments and distinguishes a product from alternative products.

Product layers - the second of three parts of the total product

After completing this chapter students should be able to identify the different product layers and demonstrate how marketing practitioners can employ this knowledge to design and develop better satisfying2  products appropriate to the prevailing situational factors [COMP]

The product layers and the total product

On this slide you can identify how the product layers [core, expected, augmented, & potential] ‘sit’ within and contribute to the total product. What we explore are the characteristics of each from both a consumer’s and an organisation’s perspective.

The core product

As we can identify in this picture some budget airlines choose to focus on the core product and by doing so target consumers who seek a cheap flight. On the other hand premium airline provide a core product, however, their higher price results in higher expectations[expected product layer] and to compete and stand out from the crowd the airlines must  design develop and deliver an augmented product.

The core product

If we employ airlines as an example we can identify how in many regards the core product, of delivering passengers and their bags safely to their destination, is core to this industry and any deviations would not be tolerated.

Meeting price expectations

As we can identify in this picture is the entertainment system on an Emirates Aircraft. Once back of seat entertainment systems were an idea that engineers were working on it was a potential product – when it was released it was no longer in the future and an augmented product for some airlines. It is important to remember that many of the meetings that take place in organisations everyday are about designing, developing and delivering a potential product in order to stand out from the crowd.

Potential product become augmented and then expected product layers

There was a time when an a phone was just a phone, then came mobile phones, then came smartphones with cameras, we can see what is once a potential product, becomes and augmented product, then an expected product and then a core product – to the extent that the quality of the camera is a core service.

Managing expectations to minimise dissatifaction

In this picture we have a cruise liner, a cruise liner creates different types of products to meet the preferred price of different passengers. The Staterooms on the upper level are more luxurious [and expensive] than the room closer to the bilge. Imagine the dissatisfaction if the brochure only showed the best rooms and therefore created heightened expectations. To manage expectations cruise brochures detail the different cabin options and prices available. Clearly, the cruise ship companies are focussed on occupancy rates and having a balance is important.

Managing expectations to minimise dissatifaction

Long distance train travel also offers different levels of comfort and price and different levels of augmentation.

Brands position and are a heuristic

Organisations, to develop clear communication and consumer comprehension, often develop a segments of the market approach by offering different brands at different price points, we are familiar with the automobile manufacturers but the tourism industry does similar.

Brands position and are a heuristic

Organisations, to develop clear communication and consumer comprehension, often develop a segments of the market approach by offering different brands at different price points, we are familiar with the automobile manufacturers but the tourism industry does similar.

Sub-brands to create a unique value proposition

The airline industry also segments the marke and create sub-brands for different travellers and locations [and comfort levels] within the same aircraft.

Brands position and are a heuristic

Organisations, to develop clear communication and consumer comprehension, often develop a segments of the market approach by offering different brands at different price points, we are familiar with the automobile manufacturers but the tourism industry does similar.

Expectation scenarios

What we can conclude is that people, through their product experiences, form different product expectation scenarios. 100% of consumers make their choice decision expecting satisfaction, however, there are different expectations. You notice this when people are pre-boarding and waiting for seat allocation. ‘I hope we get upgraded to business class’. Although ideal it rarely happens.

Expectation scenarios

It is important to manage expectations – if an organisation over promises and under delivers they are likely to encounter higher levels of disatisfaction and the consequences of a lack of marketplace trust.

Activity: The Swatch Group

Spend a few minute exploring the Swatch Group – a great example of mult-branding to meet the dreams, desires, and demand of their customers.

the core product

In his classic article, Levitt (1960) stated most products are built upon a core product. The core product is the basic product – this meets the basic needs of the consumer and nothing more. For example, the core product of an airline is to get passengers and their possessions safely to their destination within an acceptable time. The core product is the minimum product that would include a product in a product category.

Although the core product is the basic product [i.e., the minimum product that meets the customer’s needs] it may not necessarily meet the customer’s wants]. Kano (1995), in his frequently cited article refers to the core product as the ‘basic qualities of a product’; he highlights that basic qualities are central to a product. His research suggests that failing to deliver the core product will lead to high levels of dissatisfaction. Furthermore, although delivery of the core product may avoid dissatisfaction it is unlikely to result in customer satisfaction.

the expected product

However, most customers want and expect more than the basic qualities of the core product. The product that the customer expects is often referred to as the expected product. The expected product is the industry standard product at a particular price point – what most products deliver in a product category at a particular price point. For example, the expected product of budget airlines Ryanair and Easyjet is similar – the expected product of premium airlines Emirates, Qantas, and Singapore Airlines is similar, however, the expected product of Ryanair and Singapore Airlines is quite different.

the augmented product

Delivery of the core product and the expected product layers may avoid customer dissatisfaction, and result in what could be referred to as customer ambivalence – customers who are neutral, neither dissatisfied or satisfied. The next product layer the augmented product layer is therefore important to marketing practitioners. Many organisations provide more than just what is expected: more than the industry standard; they augment their product with product qualities that are attractive to the target market. This layer is called the augmented product [some textbooks refer to this as the supplementary product].  Providing attractive product qualities enables the marketing practitioner to position a product from the product offerings of competitors [e.g., Singapore Airlines who augment their product through their inflight cabin staff – “Singapore girl – a great way to fly”]. Kano (1995) refers to the augmented product qualities as ‘attractive qualities’ he states that often they are unexpected and initially they can lead to high levels of customer delight. However, sustaining delight is difficult and over time attractive qualities can become expected, however, they are qualities that customers are unwilling to risk losing by choosing an alternative product.

We can conclude that different product layers, core, expected, and augmented, influence the buyer decision process and n time customer satisfaction.

the potential product layer

It is easy to forget that marketing is about best satisfying products. Therefore, marketing practitioners are continually focused on the future and what products they need to design and develop. Sometimes the potential product is a major leap forward, however, often it is a continual process of small step improvements. Whilst the potential product is important to the organisation it is often out of sight and out of mind of the consumer. The design and development of a potential product is the preliminary stage of the product life cycle.

Video: The total product [Product layers]

For marketing practitioners, understanding product layers is crucial as consumers search for and select products that are perceived as best value. Therefore, having a framework when creating a new product or repositioning an existing product is crucial; marketing practitioners must identify what is core and meets the basic needs of the consumer, what is expected at different price points, and what augments and distinguishes a product from alternative products.