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Augmented Product


The augmented product refers to additional services, benefits, or features that a company provides with its core product to enhance customer value and differentiate it from competitors. These enhancements can include warranty, customer service, after-sales service, free delivery, etc. The augmented product is a component of the three levels of a product, which also includes the core product and the actual product.


The phonetic transcription of the keyword “Augmented Product” is: /ɔ:gˈmentɪd ˈprɒdʌkt/.

Key Takeaways

  1. Extended Offering: An augmented product is a product that is enhanced with additional features, services, or perks beyond the physical product or core product, offering consumers more value. This kind of product offering typically includes aspects such as excellent customer service, warranty, free delivery, installation, and more.
  2. Differentiation: Augmentation provides an opportunity for businesses to set their product apart from competitors. By offering extended services or additional features along with their products, they can differentiate themselves in the market, potentially attracting more consumers and enhancing customer loyalty.
  3. Value Creation: The concept of augmented product highlights the idea that the value of a product is not just in the physical good, but also in additional elements such as post-purchase services, benefits, and experiences. These additions can significantly enhance the product’s value, thereby increasing consumer satisfaction and fostering positive brand associations.


The concept of an Augmented Product is important in business and finance as it refers to additional value provided to products or services that differentiate an offering from its competitors, helping to create competitive advantage and enhanced appeal. Augmentation extends beyond the core or actual product, such as usability and after-sales service, providing customers more than just the physical product. This could include elements like warranties, customer support, free delivery, or free installation. By providing superior augmented services, businesses can enhance overall customer satisfaction, build brand loyalty, potentially command premium prices, and help stimulate sales and profit growth.


The main purpose of an augmented product in business is to provide extra benefits over and above the core features of the product, creating additional value for customers. This concept is often used as a competitive strategy to differentiate a product from its competition in the market. By offering additional features, services, or improvements that go beyond customer expectations, businesses can enhance customer satisfaction and loyalty. For example, a company may sell a laptop (which would be the core product) with extended warranties, free software upgrades, or excellent customer service as the augmented aspects.

An augmented product is crucial for brand positioning in today’s crowded markets as it provides businesses with the opportunity to deliver more customer value than the actual product itself would offer in isolation. This can be used as a unique selling proposition (USP) by a company to stand out from the competition, charge premium prices, and create brand loyalty. Also, it allows businesses to cross-sell other products and services and foster long-lasting relationships with their customers. Ultimately, an augmented product strategy can lead to increased market share, customer retention, and net profit.


1. Apple Inc: When you purchase an iPhone, you’re not just buying a phone but an “augmented product.” In addition to the physical product (the device), it includes added services and benefits like the Apple warranty, AppleCare support, iCloud storage, easy connectivity with other Apple devices, access to the App Store and other software updates, and the prestige of owning a product from a high-end brand itself.

2. Amazon Prime: Amazon Prime is not just a delivery service, but an augmented product. Prime subscribers get extra benefits such as access to Amazon’s streaming services, Prime Video and Prime Music, free two-day shipping, access to deals during special sale events, and eBook borrowing from Kindle library among other things.

3. Automobiles: Automakers often augment their core products (the vehicle) with value-added services and features. For instance, Tesla not only sells electric cars but also offers a complete package with features like autopilot capability, over-the-air software updates that improve the vehicle’s performance and add new features over time, Tesla Supercharger network that provides charging solutions, and high-end service experiences.

Frequently Asked Questions(FAQ)

What is an Augmented Product in finance or business terms?

An Augmented Product refers to a product that has added features, services, or additions which sets it apart from similar products offered by competitors. These enhancements add value to the product, making it more appealing to consumers.

What is the significance of an Augmented Product in business?

From a business perspective, the significance of having an Augmented Product is that it can provide a competitive edge over competitors. It can also play a pivotal role in customer satisfaction and customer retention, which in turn can lead to higher sales and profitability.

Can you give an example of an Augmented Product?

Certainly. An example of an Augmented Product could be a car sold with free maintenance for a certain period. Although other car manufacturers may offer a similar basic product, the free maintenance adds extra value, augmenting the product.

How can a business determine which features to add to make an Augmented Product?

A business can determine which features to add by undertaking comprehensive market research to understand customer needs and desires. Beyond this, it can also analyze the success of competitor products and identify gaps that can be filled.

How does the concept of an Augmented Product relate to marketing?

An Augmented Product directly impacts a company’s marketing strategy. The added features or services can be used to differentiate the product from those of competitors, providing a unique selling proposition. This can greatly influence the way a product is marketed and can even form the base of a marketing campaign.

What is the risk associated with creating an Augmented Product?

While augmenting a product can make it more appealing, it can also increase its cost. If the consumer doesn’t perceive the added features as valuable enough to justify the price increase, or if they’re not communicated effectively, it could lead to a decrease in sales.

Does every business need to offer an Augmented Product?

Not necessarily. Conversion into an Augmented Product depends on the type of product, the target market, the competition, and the company’s overall business strategy. Not all customers might value additional features, some might prioritize affordability.

How does an Augmented Product affect customer retention?

An Augmented Product can significantly boost customer retention rates. If customers find the additional features or services useful and feel they are getting more value for their money, it can increase their satisfaction and loyalty, making them more likely to repurchase.

Related Finance Terms

  • Core Product: The fundamental service or benefit that the customer is really buying.
  • Actual Product: The tangible, physical product that you can get in the store, which includes the brand name, features, design, quality level, etc.
  • Product Differentiation: The process of distinguishing a product or service from others, to make it more attractive to a particular target market.
  • Value-Added Services: These are extra services provided with the core product, usually designed to make the product more enticing to customers.
  • Brand Image: The customer’s perception of the product or brand, influenced by the marketing and customer experiences.

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