Customer Value Hierarchy

Customer Value Hierarchy:

 

In planning its market offering, the marketeer needs to address five product levels. each Product adds more customer value and the five constitute a customer value hierarchy.

Core Benefit : It is the fundamental level in customer value hierarchy. It is the benefit or service the customer is really buying. In case of butter, the customer is buying a medium for cooking or lets say for greasing. 

Basic Product : This is the second level in customer value hierarchy. The marketeer must turn the core benefit into a basic product. In case of butter, the marketeer must provide with basic butter that solves the need as a cooking medium.

Expected Product : This is the third level in customer value hierarchy. Here the marketeer prepares an expected product, a set of attributes and conditions that customers normally expect when they purchase this product. In case of butter, a customer expects a smooth, clean and hygienic butter. Also that it should be greasy enough to act as a cooking medium.

Augmented Product : At the fourth level, the marketeer prepares an augmented product that exceeds customer expectations. To fight competition the marketeer tries to offer an augmented or may an even better than expected product. In case of butter the marketeer can offer the option for low fat butter or a substitute of margarine. He may also offer an option of salted or non salted butter for better results in cooking.

Potential Product : At the fifth level stands the potential product, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future.