You may know already that a product is a multi-layered concept. When talking about products, marketers generally distinguish the core product, actual product and the augmented product. Here, we want to explore the augmented product in more detail. What is an augmented product and why do we use product augmentation? What are strategies that can be used for product augmentation – and what are good examples of augmented products? Read on to learn more.
What is an Augmented Product? Definition of Augmented Products
Let’s start with a brief review of the definition of augmented products. An augmented product is one that has been enhanced or “augmented” by the producer by adding new features, advantages, benefits, or services to support and enhance the value of the original product. In simple terms, product designers employ this strategy to differentiate their own products from the competition while giving substantial benefits to their customers.
An augmented product might include any additional features or offerings that “add value” to the actual and core product. The purpose is to attract more consumers, clients, or purchasers by offering showy incentives and add-ons that the competitors’ products do not have. The idea is to create an enhanced product to thrive in a competitive market.
Product augmentation can happen at various stages in the product cycle. A product usually goes through multiple cycles and revisions, resulting in many versions. Initially, we think about product augmentation during the new product development process (NPD). But also later, when the product advances in its lifecycle, added features and benefits can help to increase differentiation versus competitors and keep sales up.
The augmented product should not be confused with the core product and the actual product. We will define each of these product layers in the next sections.
The process of augmenting a product does not fundamentally modify the actual product but tries to raise its total value in the client’s perspective. The augmentations are not intended to modify the product’s operation or any of its essential characteristics. Because no fundamental modifications are made to the original product, the augmented product is also known as an extended product.
An augmented product generally contains features such as credits, return policies, warranties, additional perks, or unique packaging. In the next sections, we will look at particular instances of augmented products.
The Augmented Product compared to the Core Product and Actual Product
As previously stated, there are three levels of products: The Core Product, the Actual Product and finally, the Augmented Product. Although we explore the Augmented Product in more detail in this article, it is vital to understand what the Core Product and Actual Product layers are about. Especially the Actual Product and the Augmented Product layers are often confused.
The Core Customer Value or Core Product
The first level is called the core customer value, core benefit or simply core product. To identify the core customer value of a product, just answer a simple question: What is the buyer really buying? In other words, what is the customer really looking for? In most cases, the core value is the basic need that is satisfied by the product. The core product is the underlying need and the reason why the product is bought in the first place. It is the core problem solved by the product. In contrast, all later levels of the product add detail and potentially additional reasons for buying this specific version of the product. They are basically “add-ons”.
The Actual Product
The second level of product is the actual product. Marketers should turn the core benefit or core product they identified into an actual product. This involves developing product features, design, a quality level, a brand name and even a packaging. The actual product offers the best and easiest options for differentiation. Alternative products that offer the same core benefits can be set apart by different features, designs, qualities etc.
The Augmented Product
A product is completed by the last layer – the augmented product. While the actual product offers most differentiation potential, the augmented product adds further options to differentiate. It is usually built around the core value and the actual product. It simply offers additional consumer services and benefits.
The Purpose of Product Augmentation
Why is there a need for product augmentation? The primary purpose and goal of an augmented product or product augmentation in general, is to help marketers differentiate their products from competing offerings. Product augmentation therefore is a critical technique to in a generic marketplace to generate the sales that a company seeks.
It might be challenging to build a truly unique product that your customers buy only for the benefit of the product itself. The augmented product then contributes to a better customer experience. This also makes major contribution to brand loyalty and creates a favorable purchase experience for the customer.
In a nutshell, the purpose of product augmentation is to generate a major competitive advantage for the real product so that it performs successfully in the market. Clearly, this also depends on the type of product we are looking at. While some products are set apart already by their core value, some other products may be so generic that the only way to differentiate themselves is by using advanced product augmentation techniques.
How does Product Augmentation work?
Product augmentation can be accomplished by adding a variety of different add-ons to the original product. Here are some potential add-ons or perks with further details:
- Warranty: It’s the most frequently used “upgrade” to a product. While in most countries required by law, many producers extend the warranty voluntarily as an extra benefit to customers, which goes a long way toward creating trust in consumers. It is just a guarantee that the product will perform as expected for a set length of time. Customers prefer generic appliances since they come with this add-on.
- Free Delivery: A large purchase that includes free delivery may greatly brighten a customer’s day. Again, a free delivery advantage is a fairly popular augmented product approach that most businesses employ. It is particularly well-liked in consumer-oriented sectors. This incentive is also provided by other shops if the purchase reaches a particular amount.
- Free Installation: It is generally applied in the case of electronic or highly technical equipment, when a professional installation offer might be a useful supplement. A one-time installation by an expert can also aid to reach the product’s maximum performance.
- Routine Updates: A product that is up to date with the newest market trends is always preferred by the consumer. Routine software upgrades, particularly for digital items, may thus contribute significantly to a positive user experience.
- Free Trial Periods: A product that comes with a significant financial commitment often comes with a free trial time so that users may test it out to ensure that it meets their expectations. For many products this is a popular augmentation approach.
- Free Samples: Who doesn’t like getting something for free? Most people already buy their favorite brands when it comes to generic physical products. In this instance, convincing people to switch to your product may be challenging. Offering free samples might help with the first push.
There are many other strategies towards product augmentation, depending on the particular product, competitive environment and target group expectations.
Advantages of Product Augmentation
Product Augmentation, which mainly provides distinction, does bring a number of benefits.
Here are a few of them:
- Helps to add product features and benefits that are one-of-a-kind, making the product unique in the eyes of customers
- Provides superior market positioning that is distinct from the competition
- Increases consumer willingness to accept a price premium
- Increases the perceived attractiveness in existing and potentially additional target markets
- May help to grow customer loyalty as they appreciate the added value, esp. if added after purchase
Examples of Augmented Products
It’s not surprising that businesses who can effectively build augmented products provide a great purchase experience and have a better chance of growing a loyal base of repeat customers. Let’s now review a few examples of augmented products.
Discounts and Freebies
A discount coupon for a future purchase, as well as an offer of a refund if the consumer is disappointed, are good examples of product augmentation. A complimentary recipe book given along with the purchase of a kitchen device, results in an augmented product.
More costly products are frequently accompanied with heightened augmentation. In-store financing for furniture purchases, a free trial period, or free delivery are all options that complement the products being sold. To entice clients, a cable operator competing for new business may offer a more convenient home installation timetable.
In 2019, Apple Inc. (AAPL) debuted its video and TV streaming service. To raise awareness of the new product and bolster drooping iPhone sales, the business designed an add-on or augmentation for anyone purchasing a handset from the company’s website: “Starting today, consumers who buy any iPhone, iPad, Apple TV, iPod touch, or Mac will receive a free year of Apple TV+.”
Customer service and shop atmosphere are augmentations that brick-and-mortar businesses provide to their whole product line. Others include a flexible return policy and in-store demos. A business that offers culinary goods may provide free cooking instructions with each purchase. Apple, for example, teaches and guides customers on how to use their goods at the retail stores. Product augmentations include an interesting website to assist clients learn about a product or service, as well as an online support team.
When it comes to practically any transaction, customers have a plethora of alternatives. An augmented product is designed to stand out from similar items or subsitutes sold by other suppliers.
Free SMS and Data
In addition to prepaid services, telecom operators provide free value-added services. Free SMS and data are among the options available. Some telecom operators also offer features such as free caller tune. All of the services included in the package may be considered part of the augmented product.
Additional Free services by car dealers
Car dealers offer free servicing to their customers. While selling the car, they may provide two or three complimentary services. Customers are attracted to this free maintenance to a large extent since they do not have to pay more for such service for a certain time period.
Many food vendors provide free delivery along with their services, which is tempting to customers. It persuades them to buy more in order to receive free meals home delivery. This improves revenue while keeping clients satisfied.
Free credit and debit cards, as well as insurance services
Banks provide free credit and debit card services to account holders. These are just services that make customers live easier. As a result, we can regard them as augmented products. Often, credit cards also include insurance services, such as travel insurance when paying for flights with the credit card.
Consumer expectations are constantly growing as a result of an abundance of products in the marketplace, technological advancement and changing needs. Relying on the core product and actual product may just not be enough anymore to convince customers and set own products apart from competition. Therefore, increasing focus is on the augmented product. By adding additional value to products, firms can gain a competitive edge and increase sales.