The product hierarchy stretches from basic needs to particular items that satisfy those needs. It is identified six levels of the product hierarchy, using life insurance as an example:
- Need family- The core need that underlies the existence of a product family in the product hierarchy. Example: security.
- Product family- All the product classes that can satisfy a core need with reasonable effectiveness. Example: savings and income.
- 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.
- The 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.
- Product type- A group of items within a product line that share one of several possible forms of the product. Example: term life insurance.
- Item (also called stock-keeping unit or product variant)- A distinct unit within a brand or product line distinguishable by size, appearance, or some other attribute. Example: Prudential renewable term life insurance.