It is also very useful to classify the features and benefits of any one product along the lines suggested by the following model proposed by Theodore Levitt (he of the ‘Product Life Cycle’) in his HBR paper, The Differentiation of Almost Anything. This model is known by various names and is inter- preted in as many different ways. However, for our purposes the author offers the following which his experience has found most useful.
FIGURE 4.1: THE LEVITT CONSTRUCT
In this model the product can usefully be considered to consist of three layers, each founded on those closer to the middle. The product’s future is the reservoir of ideas which surrounds all three. This has no boundary, it is limited only by the company’s collective imagination.
Generic product
Expected product
Augmented product
Potential product After Theodore Levitt,
The differentiation of almost anything
To describe, illustrate and reveal the relevance of each part of the product in turn:
Generic or core
This is the heart and the foundation of the product. The generic is both internal to the company and to the product itself. It consists of all those things a company must do in order to get the product to offer the features that will yield the benefits required.
For goods such as a car, it could include the zinc galvanization of the under body, both zinc coated metal and the process that deposits the zinc. This ‘galvanization’ is a feature which confers less rust, longer life for the body shell and thus the benefit of the vehicle maintaining its value longer.
For a service business such as an airline it is everything the company must do to get the aircraft operational including:
• Training all the crew – both air crew, cabin crew, airside and landside crew etc.
• At the end of a flight and before the next – emptying all the tanks that need to be emptied, and filling all those that should be full.
• Servicing the engines regularly, ensuring the landing gear tyres have no bald patches etc.
It also involves the operational process necessary to get the passengers on to the plane with their luggage:
• Taking the bookings.
• Managing the check-in for passengers and their luggage.
• Shepherding them on to the plane at the appropriate time etc.
Some commentators believe that the ‘generic’ comprises more than 70%
of everything that the company does to bring about the product. And yet, done well, the generic is often invisible to the customer. The same commentators say that it often directly contributes less than 11% of the satisfactions that a customer derives from the product – mainly because whatever skills and processes are involved they are beyond the customers’
willingness or skills to evaluate. Because of this the ‘generic’ is, and should
be, so much in the background that customers take it for granted. Yet the quality of the generic is vital. It stays in the background only so long as things go well. When things go wrong, even though that mishap may be trivial, it can have a dramatic impact on the customer’s perception of the quality of the total product. As a former airline CEO once said, “…if the seat tray in front of the passenger is dirty with coffee stains from several flights ago, and is wobbly because some screws are missing, they can be excused for believing that this is the way we service our engines.”
Without a well founded generic no ‘total’ product can be built.
Expected (or hygiene factor, or cull test)
Customers feel qualified to judge this aspect. Any absence of factors which go to make up the expected for them, can have a direct impact on their ability to enjoy the basic benefits from the product. For a car it could be the quality of the ride, the in-car entertainment, a large enough boot space, an automatic transmission etc. For the airline it could be the times of the scheduled flights to the desired destination. Does the airline go direct or will passengers have to change flights at a ‘hub’, the speed of check-in, the reliability of the baggage handling etc.
Sometimes the ‘expected’ is referred to as either a ‘hygiene factor’ (a term borrowed from Hertzberg’s explanation of motivation) or a cull test, in that the absence of the right factors here will ensure that the company is not short-listed, it will not be invited to tender; or, current customers will leave if factors formerly present, are no longer provided.
Augmented (or competitive differential advantage) Sometimes referred to as the ‘product surround’ this aspect of the product is ‘motivational’ (from Hertzberg again) in that it can cause customers to switch their business to this company.
The contents of this part of the product should provide benefits which uniquely satisfy customers, and do this – in the perception of the customer, better than the competitors products. The items that comprise the
‘augmented product’ should be aimed at the customers’ ‘mission critical’
issues, as per the exercise in Chapter 2.
The benefits offered here, therefore, must be targeted at, and be specific to, the intended customer. The acronym K.I.S.S (‘Keep it simple stupid’
– we will encounter this again under promotion, Chapter 4, Part 4) is appro- priate, because if there are too many benefits promoted the customer may not be able to identify those which are pertinent to them.
Examples of augmented factors are:
FOR THE MOTOR CAR
• Guaranteed buy-back at a guaranteed price.
• Air conditioning.
• It confers status in the driver’s community.
• Side impact bars for safety – etc.
FOR THE AIRLINE
• Limousine collection and delivery to the airport of departure and delivery to the destination at the other end.
• Larger more comfortable seats on long-haul flights.
• Power points for notebook computers in business class.
• Seat-back video screens etc.
The lists can go on – but note how each facet is easy to copy, one auto- manufacturer does it and soon the rest will follow, it is the same with the airline examples. If an innovation gives a company an advantage, the others in the market would be negligent not to follow suit, or to try and leapfrog with a different innovation. And thus yesterday’s augmen- tation can become an ‘expected’ tomorrow.
The potential product (or reservoir of ideas)
In an increasingly competitive world, as yesterday’s differential rapidly becomes today’s expected, it is necessary to have the ability to stay one step ahead of the competition. The wise marketer, therefore, will constantly be collecting and evaluating ideas as to how to differentiate his/her product from all the sources they can.
It is the mark of a good entrepreneur that they are not too proud to borrow ideas from others. Often they will pass these off as their own ideas, which
is plagiarism. The more capable will have no trouble giving source attri- bution, which is scholarship and thus honourable.
New ideas can be obtained wherever one looks; keep cuttings, make notes (Somerset Maughn’s note books went for a fortune at auction, not just for the collector’s value, but for the wealth of plot ideas) no one ever knows when an idea will come in useful. It is the sign of a good marketer that he or she does not try to transpose these ‘new’ ideas, unaltered into their own market, it may not be right in its raw state, it may often require translation.
The author once consulted for a major department store. It was about the time that the phrase, “Have a nice day” was first crossing the Atlantic.
The client wished the floor staff of several stores to adopt the saying so as to see how well it would work in the UK. Typically customers were cynical and the occasional few were openly derogatory – “…and what’s it to you!” was one vehement remark which caused upset. One evening the author discussed this with a London taxi driver. When the taxi reached its destination, the taxi driver wished the author a safe journey and asked the author to give the taxi driver’s regards to Plymouth. Before handing the author the receipt for his fare, the taxi driver asked to be told what he had just said – after a short discussion in which the author was at a loss to answer to the taxi driver’s satisfaction, the taxi driver declared that he was saying the equivalent of “Have a nice day” in English-English, as apposed to American-English, and by golly he was!
This makes the point beautifully – the marketer should never just trans- pose an idea into his/her market, they should know their market sufficiently to translate the idea (i.e. into English-English).
The marketer’s strategy therefore must be to put in place a continuous programme expressly for the generation, evaluation and ‘banking’ of ideas.
Marketers should read widely, particularly the business and trade press (but should not be confined to them). Including, in business to business markets ‘Management by Walking About’ (i.e. MBWA), occasionally accompanying sales people when they visit customers – these are a most powerful way for a marketer to keep in touch with the market (better than any paper report).
In consumer markets, there is little that provides better results than regular focus group discussions with customers and consumers (see Chapter 7).
The following two examples of potential ideas come from many years of running focus group discussions with customers of taxi companies and patients of medical practices. Some of these ideas are:
FOR TAXI COMPANIES
• Payment by credit card (increasingly common indeed, in some places it is an ‘expected’ – a true ‘cull test’. Airline passengers will frequently not use cabs that don’t accept credit cards).
• Loyalty schemes for regulars (air miles in some cases).
• Choice of music for longer journeys.
• A rack of today’s papers close to the passenger.
• Cell-phone for passenger use, paid for with the fare or by credit card.
• Lady drivers for lady passengers, particularly after dark etc.
FOR A MEDICAL PRACTICE
• Refreshments in the waiting room, tea, coffee etc (a practice in north Somerset serves wine in the evenings according to The Times, 11 November 1996).
• Very early (6.00am) and very late (9.00pm) surgeries to serve those who commute to work.
• A crèche for the patients’ children.
• Public telephone facilities (not everyone has a mobile).
• The doctor comes to the waiting room to greet patients.
• Consulting rooms on mainline rail terminals, etc.
Ideas so gathered should be evaluated, and if they prove they have poten- tial, should be stored in readiness for the day that the opposition either copies the current competitive differential, or betters it. When that happens, the appropriate new idea should be brought into action with ultimate speed, so as to ensure that the competition has little chance to gain a lead by exploiting their (temporary) parity or advantage.
Ideas in the category ‘potential’ should be stored in such a way that they are regularly, and not too infrequently, dusted off, and updated. There is usually not enough time to do this when it is recognized that their presence in the marketplace is required.
The total product concept has enormous beneficial impact on the poten- tial profitability of the product. Factors that ‘augment’ the product form the basis for so called ‘Value Based Pricing’ (see the last section in this chapter, i.e. Part 4, Pricing).
Activity No. 6
Deconstruct the product that you addressed in Chapter 2, Exercise 2, and in Chapter 3. Say what you believe to be the relevant facets of:
The generic product,i.e. the necessary +70% that makes up the ‘generic’
part of the product which customers don’t care about until it goes wrong.
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The expected product,i.e. the minimum the product must have to be acceptable. What the customers feel capable to judge you by.
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Now the augmented product – what does actually give you a compet- itive advantage? What will make customers come to you, stay with you, wait for you, and hopefully pay more for your product?
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Now brainstorm to discover all the ways, no matter how fanciful, whereby you can provide a competitive advantage in the future: in other words build a list of the factors that could comprise the potential product.
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