The product hierarchy
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.
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