Five Level of Product with example by Philip Kotler


In different market offerings, Product is a key element. To achieve the market leadership, firm should offer superior quality product and services which satisfy customer needs and wants and provide value to them. Many people think that product is a tangible thing but product is anything offered by marketer to satisfy the needs and wants of customers. It includes Physical goods, services, experience, events, person, place, properties,organization,information,and ideas. While planning market offering,  marketers have to gone through Five levels which are discussed below:

  1. Core Benefit:At first level, core benefit means after purchase of product the benefit customers get from our product which differentiate our product from competitors product. Core benefit which satisfies the needs and wants of customer and provide value to them.For example: When a guest went to hotel, the core benefit which they get from hotel is rest and sleep. Here marketers must see themselves as benefit providers.
  2. Basic product: At second level, Marketers have to convert core benefit into basic product means by consuming that basic product consumer gets core benefit.For example- When guest went to hotel they went there for rest and sleep ,here we convert that rest and sleep into basic product which provides them core benefit. Like bed,bathroom, towel etc which provides them core benefit.
  3. Expected product:At third stage, here markets design the product according to customers expectations means set of conditions and attributions which buyer expect at the time of purchase.For example Hotel guest expect that there should be a clean bed,fresh towel, working lamp and relative degree of quietness.
  4. Augmented Product: At fourth level, Marketer prepare augmented product which exceed expectations of customers. At this stage marketers adopt different strategies which differentiate them from competitors.For example- Comfortable bed,Soft Towel, etc. In hotel.
  5. Potential Product:At fifth level, which is the last stage marketer identify potential of product and identify possible augmentations and transformations of the product or services which we offer in future. At this stage, companies identifies new ways to satisfy customers need and adopt strategies which differentiate there product from competitors.


After these five stages, the differentiation and competition between different product and services increases. To compete in the market , marketers have to maintain their relationship.Companies have to come with a product or services which satisfies need and wants of customers and provide value to them.

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