Kotler and Keller's Five Product Levels

Exceeding Customer Expectations

(Also known as the Customer-Perceived Value Hierarchy and the Extended Products Model.)

Five Levels

Take products to the next level.

© iStockphoto/nkbimages

When you're developing a new product or service, it's clearly important that you meet your customers' wants and needs. But it's also vital that you significantly exceed your customers' expectations, so that you can stand out from the competition.

However, this can be difficult. For instance, how can you actually define customer expectations? How can you keep ahead of your competitors? And which features should you highlight as part of your marketing strategy?

One tool that can help with this is Kotler and Keller's Five Product Levels model. In this article, we'll look at this model, and we'll discuss how you can use it to develop new products that exceed your customers' expectations.

About the Five Levels

Marketing experts Philip Kotler and Kevin Lane Keller published the Five Product Levels model in their 2003 textbook, "Marketing Management." The model is based on Kotler's earlier research, and on a 1980 Harvard Business Review article by Theodore Levitt.

The model highlights five ways that you can add value to a product. The higher up the levels you go, the more value you provide to customers, the more you will exceed their expectations, and the more you will differentiate your product from those of your competitors.

The Five Product Levels are:

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