Levels of a Product

Philip Kotler introduced the concept of three levels of a product.

1. Core Product is the fundamental benefit or solution consumers buy when purchasing a product. It is the main reason behind the purchase decision. For example, the core product of a car is not the vehicle itself but the transportation and convenience it provides.
2. Actual Product is the physical item or intangible service that the customer buys. It includes the product design, brand name, features, quality level, and packaging. For instance, the actual product for a car might be a specific Tesla model with certain features and design elements.
3. Augmented Products include additional services or benefits that come with the product's purchase, which can differentiate it from competitors—for example, warranties, after-sales service, product support, and free delivery for a car.

These levels offer a structured approach to product development and marketing strategy for marketers. The core product level helps identify the basic need or benefit that drives consumers' purchasing decisions, guiding the product design process. The actual product level, involving tangible features and attributes, allows marketers to differentiate their offerings from competitors. The augmented product level, which includes additional services or benefits, enhances customer value and creates a competitive advantage.