The Product Hierarchy

The Product Hierarchy:-

The product hierarchy stretches from basic needs to particular items that satisfy those needs. We can identify six levels of the product hierarchy, using life insurance as an example:

1. Need family:—The core need that underlies the existence of a product family. Example: security.

2. Product family:—All the product classes that can satisfy a core need with reasonable effectiveness. Example: savings and income.

3. Product class:—A group of products within the product family recognized as having a certain functional coherence, also known as a product category. Example: financial instruments.

4. Product line:—A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets or channels, or fall within given price ranges. A product line may consist of different brands, or a single family brand, or individual brand that has been line extended. Example: life insurance.

5. Product type:—A group of items within a product line that share one of several possible forms of the product. Example: term life insurance.


6. Item (also called stock-keeping unit or product variant):—A distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. Example: Prudential renewable term life insurance. 

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