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An economist in the 1960s by the name Philip Kotler developed a theory of evaluating the efficiency and benefits of products referred to as the three levels of product theory. This theory simply evaluates the benefits of any product or offer from general to specific and unique qualities of a specific product.
Kotler’s main objective in developing this theory was to improve the way producers marketed their products this was to be achieved by expounding and clarifying the meaning of marketing. Before Kotler’s work, marketing was viewed as barely the physical process that resulted to the transfer of goods and services from producers to consumers (Answers 1997, pp1). His expounded definition of marketing included the satisfying aspect that the goods contain and all actions that marketers engage in.
He also recognized a more complex process that involves the emotions of both the marketers and the consumers. This is in accordance with what I quoted earlier i.e. the theory looks at something from general to specific facts. He defined marketing as “a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others” (Five Products Level, 2005. pp1).
According to Kotler, products have no value it’s their benefits that makes them valuable. For instance, a desktop computer or a bed has no value but the value is in the services, entertainment and comfort, they offer (MMC learning, 2009, pp1). Kotler’s theory can also be used by consumers when choosing between two offers as in the case of this essay.
His theory will help compare two offers an IKEA TROMSÖ Loft bed frames with desk top and a Monash Sport (Caulfield) Gym Membership (plus Group Fitness membership). Kotler’s theory is discussed in details below
His theory suggests that any product should be view from three levels i.e. the core product level, the actual product level, and the augmented level (Learn marketing 2010, pp 1-3).
Core product level
This level represents actual direct benefits of any product in other words it represents the services offered rather than the product itself. It is an intangible part of any product but it’s the main reason why people buy things. As we had seen earlier this is also what gives products their value considering our two offers they all have different value and they serve very different purposes but their core product aspect is what enables us to prefer one to the other.
It is evident that everyone always wants to sleep in a nice and comfortable place and a good bed helps a lot in achieving this. A desktop can also be of much help to a college student due to the fact that it can be a reliable source of information this would help him a lot in conducting his research and doing assignments. It is also a source of entertainment and storage for old memories i.e. in photos and video clips. These in other words are the core benefits of a desktop and a bed.
On the other hand a Monash gym membership can also be of much benefit especially to one’s health and good physical appearance. Every college student desires for good looks hence this may convince them to choose the membership instead of the bed and the desktop. The good looks and good health are the core benefits of the membership. In my opinion to a college student this is not fun compared to the entertainment and comfort offered by a desktop and a bed respectively.
This is due to the fact that entertainment to them is more valuable compared to physical exercises done in the gym. One may argue out that a student who is good in sports may prefer the membership but unfortunately if one is a game player it is most likely that he is offered free membership to the gym. This means that it is most probable that he would go for the desktop and the bed.
Actual product level
This is the tangible part of a product e.g. a bed, the gym or a computer. Ones needs are the one that make him buy some products. However, buying does not satisfy his needs it’s the services that the products offer that satisfies ones needs (MMC learning 2009, pp 3) as discussed above.
This level does not impact a lot on ones decision in choosing between two things but the one that provides the services. In a nutshell, the actual product provides the service that is required by individuals and the service is the one that is valued. Therefore, if there is no actual product definitely there will be no service.
This level takes us back to the intangible part of a product. Its main focus is on the psychological satisfaction that a product offers. The assurance and the trust that one develops concerning the reliability of a product is what makes this level equally important to the other level.
It is at this level is the level that one tends to consider the little unique benefits of an offer by asking questions like ‘why this instead of that?’ ‘What does this have that the other does not have? It is in this level that one considers the brand name or the organization involved.
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If one was to choose between two offers that we were considering, then his decision may be greatly be affected by the little unique qualities of the individual offers. For instance, it’s not just a bed that is being offered but an IKEA TROMSÖ loft bed. The loft aspect is what may make choose this instead of the gym membership.
In simple terms, everyone in Monash has got and sleeps in a bed but the loft aspect of it changes everything i.e. not everyone sleeps on a loft bed. The specifications and additional features of the desktop may also impact a lot in ones decision e.g. if it comes with free preinstalled software and games. The brand and model can also have an effect.
The gym membership also is affected by this by the fact that it is not membership of any gym but its Monash sports gym membership. If one was to choose between a loft bed plus a desktop and membership in a small privately owned gym then he would not think twice he would definitely go for the first one.
The added offer of group fitness membership in the gym as just meant to convince one that this is a better offer. This is in real psychological game and choosing it from the other offer is the winning point.
In conclusion, Kotler’s three level product theory considered all aspect of a product starting from its main purpose to the simple advantages that it has others of the same or different kind.
Answers. (2011). Marketing: Marketing American Heritage Dictionary- Marketing (pp 1). Web.
Five Products Level. (2005). Description (pp1). Web.
Kotler et al. (2004). Products, Goods, services and experiences Chapter 11: (p. 384-3910). Web.
Learn marketing. (2010). Three Levels of a Product/Augmented Product Concept. (Pp1-3). Web.
MMC learning. (2009). Product. (pp 1). Web.