Customer Value Hierarchy

Core Benefit: The consumer of a matchbox is not really consuming the matchbox. He or she wants to create a fire to accomplish something else, example light a stove to cook food. Therefore the core benefit for this particular consumer, when purchasing a matchbox, is making and eating food.

Basic Product: let us take the example of domestic airlines. the core benefit would be to commute from one place to another in the fastest possible way commercially. The basic product would include the flight itself along with a pilot, co pilot, cabin crew, seats to sit on and basic safety equipment like the seatbelt. These features will remain consistent throughout all competitors as this is the basic offering of each one. In the case of matchboxes, the basic product is simply the matchbox with matches inside and a friction pad on the side.

Expected Product: Assuming a rational consumer has the awareness of the basic product he or she is about to purchase, there will be certain basic expectations while purchasing the product. Eg: In case of the airline as above, the consumer will expect clean seats and a pilot with a sound mind operating the aircraft. He might expect the air hostesses to be very attractive and he might also expect more leg space on his seat.
Therefore any direct service or feature that a consumer could fathom, having knowledge of the basic product, to build on his or her own experience of that product is, for this purpose, an expected product.
In case of SHIP matchboxes, a consumer expects nothing more to do with the matchbox than light a fire and hence the expected product is little or nil. At the most, He or she might want a longer stick to support the flame (which is also available under different branding and positioning altogether).

Augmented Product: This includes improvements on the product as against its competition in a way that exceeds consumer expectations. An augmented product draws a sense of awe because it is something that the consumer would not imagine to exist.
A hypothetical example of an augmented product in the gadget industry would be a phone the size of a palm that doesnt need charging at all. It remains unaffected by water, dust and shock. It could be wrapped around your wrist since it would be bendable and doubles up as a smart watch.

Potential product:
We saw the death of the typewriter just as we saw the potential in the infancy of the desktop computer. The desktop computer was at that time, the potential product which created a brand new industry life cycle for itself at the cost of flattening the industry life cycle graph of the typewriter. The desktop computer was the future of the typewriter. It could be said that augmented products may have within them the power to create requirements around themselves and hence create their own demand.