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Three & Five Levels of Product with Example

Product is the combination of Goods and Services offered to the target market by a company. There are two concepts of levels of Product and services. This article explains these levels with examples.

Definition of Product

The product can be a Good or Service offered to the market for attention, acquisition, use or consumption or to satisfy consumer/market needs.

Read more about product classification.

Two concepts of product level

I. Three Levels of Product 

II. Five Levels of Product

I. Three levels of Product

3 levels of Products can be given as below:

1. Core Product

  • Core Benefit/ingredients
  • What are the buyers really buying?
  • Also called a generic part.


  • For a car, the basic requirement is steel, electrical part, fibre, glass, rubber etc.
  • For a refrigerator, it is the steel, compressor, freon gas, etc.
  • For a restaurant, it is space, chairs, table, workers, kitchen etc.

2. Actual Product or Formal Product

  • Brand Name
  • Quality Level
  • Features
  • Design
  • Packaging

Example: Tata Car or HUL Detergent – Name? Design? Features?

3. Augmented Products

Additional Consumer Service and Benefits offered by Manufacturer or Marketer.

  • After Sales Service
  • Warranty
  • Guaranty
  • Installation
  • Delivery and Credit

Example: for refrigerator, it is a water tap on the door, separate compartments, innovative design, Automatic temperature control etc.

Here marketer is searching for differentiation, additional value and innovation.

“The tangible component of the product along with the formal and core components is called the augmented product.”

R Saxena

II. Five levels of Product

Below are 5 levels explained.

  1. Core Product
  2. Basic Product
  3. Expected Product
  4. Augmented Product
  5. Potential Product

The Product Levels – Explained

1. Core Product

Core Benefits from product and their attributes

2. Basic Product

Essential or necessary attributes

3. Expected Product

Characteristics Expected by customers

4. Augmented Product

  • After Sales Service
  • Guaranty Warranty
  • Return / Replacement Policy
  • Payment Options
  • Customer Complaints Management
  • Consumer Education and Training
  • Installation for bulky products
  • Delivery Parts and Systems

5. Potential Product

Potential product is also known as Future Products.

This is all about three and five levels of product in marketing with suitable examples.