Product Hierarchy Example Of Different Product Levels And Models

Introduction to product hierarchy example

Product hierarchy example is a part of marketing that explains how a product can be categorized using different tools. Knowledge of what happens under this head, we will start with the basic terms to get in-depth knowledge.

What is the product?

A product is any tangible object which can be sold in the market for a reasonable profit. To run a business, several companies make different kinds of products to fulfil the requirements of the customers and consumers.

Talking about services, which can also be sold are the non-tangible products which are served to the customers like transportation, banking, saloon, restaurants (a combination of products and services).

The classification above was however based on tangibility, products can be classified on basis of use, durability, availability, etc. The term customers refer to the person either taking it for resale or further processing however the term consumers refer to the people purchasing the products for final consumption (finished goods).

Now, during the manufacturing of a product, it is understood by various terminologies for the smooth functioning of the business which is product mix and product hierarchy.

Product Mix

Product Mix, or product portfolio or product assortment does the categorization of the products that a business offers. Considering in brief, the different product lines offered are termed as product mix.
The range of products under a product line is termed as items that can be similar in terms of use, customers’ needs, technology, etc. 

For example, The ITC product line is Hotels, FMCG, Packaging Paper board, and agribusiness. There are various dimensions of the product mix :

Product Mix
Product Mix

Length

The length in the product mix refers to the total number of products under the umbrella of the product mix. 

For product mix example : P & G ( Proctor and gamble ) products have 3 product lines namely – beauty line which has olay and venus, health line which has pringles, oral-b, and whispers while household care which holds tide and ace. Therefore the length for P&G will be 7.

Depth

The concept of depth describes the variations offered in each product in a different product line. 

For product mix example: Cadbury in its product line of silk chocolates provides flavours like caramel, fruit, and nuts, bubbly, etc.

Breadth

The term breadth depicts the variety or the range of different product lines that a business deals with. Briefly, it describes the extent of the activities a firm is enrolled in its product mix.

For product mix example: ITC has diversified its activities into 4 areas like food, cigarettes, lifestyle retailing, and education with stationary which acts as width or breadth of ITC.

Consistency

Consistency as the word suggests being regular or common. Here the term refers to the relationship or closeness of the product lines which can be concerning the distribution channels, use, production, price range, advertising media, etc.
The consistency helps the firms to easily add up a new product and use the image of its existing product lines with lower costs. 

For product mix example: The above-quoted ITC have less consistency since all the product lines satisfy different needs of buyers. However, Nestle is a good example of this umbrella.

Product Hierarchy

Product hierarchy is one term that often gets confused in the marketing sector. However, this concept cannot be understood alone so we will quote a product hierarchy example for a better explanation along with taking business as a whole rather a single product:

PRODUCT HIERARCHY
PRODUCT HIERARCHY

Product Need

The first step under the product hierarchy example is product need which symbolizes the reason for which a product exists.
For product hierarchy example: people need products for their health care. Now here is the basic product need which is satisfied by Colgate

Product family

 Now the next step i.e product family is from the point of view of the business market and is company-specific. So this level refers to the basic need that the company’s product satisfies. 

There is a bigger picture viewing a business market rather than an individual market. 

For product hierarchy example: In oral hygiene of Colgate there can be a variety of options like toothpaste, toothbrushes, floss, and mouthwash.

Product Class

The terms product class and product family are close and can be used interchangeably for many companies. It describes the group under the specific product family having a unique function also called the product subcategory.

For product hierarchy example: Colgate with its whitening category or sensitivity factor (Sensodyne) is called product class.

Product line

This area deals with various products that fall under the umbrella of one product class that are closely associated due to the same function performed by them, marketed to the same channels, sold to the same customers, or have similar price ranges. 

For product hierarchy example: Colgate Sensodyne has three varieties which are termed as product line as they perform the same function of dealing with sensitive areas in our teeth. So the product line here is 3.

Product type

This level now describes the items which are present in a specific product line that shares one specific function.

For product hierarchy example: Colgate Sensodyne has three flavours namely normal whitening, mint, and Ayurveda. So the individual products are referred to as product types.

Item / Product variant / Stock keeping unit

The final stage or the destination in the product hierarchy example is an item or commonly known as SKU. This category differentiates the product type with a specific price, appearance, size, or other attributes.

For product hierarchy example: Colgate Sensodyne mint variant is available in 30 grams, 60 grams, and 100 grams as well with different cost structures. So a 100-gram product is termed as ITEM.

Now the above-quoted example of COLGATE was just a product hierarchy example explanation. Likewise, various brands deal with multi-products and multi-brands and can frame a similar product hierarchy example for themselves.

Hierarchical Data Model

The hierarchical data model is one of the oldest models in which it was figured like a tree. Condition applied that the parent or the owner can be related to various children or the members but the child can only have one parent to represent the product hierarchy example. 

In short, it explained that a single member can have multiple directories and so on but they cannot be interlinked to one another. 

Although this structure helps to understand the link between heads and subheads, the hierarchical data model still has drawbacks that need to be updated.

This can be shown as −

Hierarchical Data Model
Hierarchical Data Model

Disadvantages of Hierarchical data model

  •  In the hierarchical data model, many to many relationships cannot be built since it only connects one too many nodes.
  • This model is rigid and a further modification may mismanage the entire hierarchical data model as a whole. 

Therefore to fill the gaps in the hierarchical data model, the network data model was formulated to represent the product hierarchy example.

Network Data Model

The network data model is one that allows the number of records to be linked to a common file to represent a product hierarchy example.

  • It is the way to organize data and give structure to various data elements. As a result, the parent’s node is termed as the owner, and the child’s node is termed as members.
  • It can be imagined as an inverted tree where the members are connected to the owner.
  • There can be multiple connections between these members which makes the network data model flexible so is referred to as many to many relationships.
  • Also, the network data model solves the shortcoming of the hierarchical model to represent the product hierarchy example.

The network data model can be shown as −

Network Data Model
Network Data Model

Advantages of Network Data Model

  • For complex data, the network data model is the more flexible one to operate.
  • Simpler to navigate because of clear connections between the nodes.
  • Since the network data model has many to many relationships, the table record can be assessed easily in the database.

Disadvantages of Network Data Model

  • Alterations are difficult since a single addition of information can alter the whole database altogether. In short, the structure of the network data model is complicated and so it requires the complete acquisition of knowledge before further modification to represent product hierarchy example.
  • Difficult to handle and maintain the freshers or first-time users.
  • Not all the connections can be framed or assigned under the title of owner and member.

Compare between Hierarchical data model & Network data model

Hierarchical data model Network data model
  • One to many 
  • Many to many
  • Difficult navigation because of its rigid connections
  • Simply assessed due to the interconnections
  • Less flexible due to hierarchy maintained.
  • Great flexibility 
  • Files are segregated
  • Files are closely related

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