Product Hierarchy

Product hierarchy is a framework that categorizes products based on their levels of complexity and consumer needs. It consists of several layers, starting from the broadest category, such as the product class (e.g., beverages), down to specific products (e.g., a particular brand of soda).

Levels of Product Hierarchy:

1. Product Need:

This level represents the fundamental reason for a product’s existence. For instance, motor vehicles are created to fulfill the need for travel. This core product need is exemplified by Toyota vehicles, which serve the basic desire for transportation.

2. Product Family:

Here, the focus is on the broader core need that a product addresses. Rather than concentrating on a single market, this level considers the entire market for a specific need. In the case of travel, this need can be met by various modes of transportation, including planes, trains, and ships. Thus, the product family for Toyota would encompass all vehicles.

3. Product Class:

This level involves categories that are derived from the same company. While similar to product families, product classes do not extend beyond a single company. An example of a product class is personal computers, which represent a specific category within a company’s offerings.

4. Product Line:

A product line consists of a group of products within a class that share similar functions, target the same customer base, or fall within a particular price range. For instance, a laptop represents a product line within personal computers, as it is a portable and wireless type of computer.

5. Product Type:

This level refers to the different variations available within a product line. For example, within the Hyundai i20 product line, specific product types include the i20 Astana, i20 Sportz, and i20 Magna, each catering to different customer preferences.

6. Product Unit:

Also known as the Stock Keeping Unit (SKU), this level represents an individual item within a product type or brand that can be distinguished by attributes such as size, price, or features. A product becomes a distinct unit if it operates independently and is not reliant on other product types.