The Three Product Model

Every successful product is actually three products in one. Read on for what we mean.

March 25, 2021
That’s right — every successful product is actually three products in one. Read on for what we mean.

Business — and, by extension,  entrepreneurship — is complex. It is a constant balancing act of prioritization, predicting the future, creating systems and processes, marketing, finding the right people to join the team, find the right customers, researching and developing innovative ideas, understanding the evolving marketplace, timing moves appropriately, cash flow management, messaging, differentiation — the list goes on and on. 

Each of these things have their own challenges and complexities. Some come down to solving cold hard numbers issues Others have more to do with intuition and analyzing trends around market direction, and still others are concerned with the psychology of a potential customer archetype. 

But every business venture starts in the same place: product. 

In other words, what is it that you are selling? Maybe the idea of the product came from a need, maybe it was a trend, or maybe it was a product that made all other products irrelevant (a.k.a.  innovation, and we can talk about that another time). No matter where the idea came from, it’s important to know that regardless of how simple your product may seem, each product is multidimensional, and there is never merely a single reason for your customers to buy your product.

In fact, there are at least three ways of looking at product. 

The Three Products

  1. Actual Product

The Actual Product is the easiest to identify — it’s just the tangible object you are selling. It’s whatever you picture when you imagine it in your mind.



  • Checking Accounts
  • Savings Accounts, Loans, etc.


  • Shoes, athletic wear


  • iPhone, computers, tablets

The inventors of the world spend most of their time developing this aspect of the product, trying to come up with something new and useful. What problem does it solve? How is it better than the current solutions? How will it work? 

These are the questions often asked when it comes to identifying and developing the actual product. And for  a customer, it’s the most immediately apparent part of the product. 

  1. Augmented Product

Going deeper, the Augmented Product refers to every added benefit of the thing being sold — the things that accompany the Actual Product.  Sometimes, these are simply the distinguishing factors of a product or service.



  • Higher rates of return
  • Secure transactions
  • Rewards or perks


  • Technical aspects of clothing (quickdry, lightweight, etc.)
  • Wearable tech, apps


  • AppleCare
  • Camera quality
  • Storage space
  • Processing speed

The augmented product is all about the  features and benefits. Typically, these are low cost, high value additions to a product that lower the barrier of purchase by creating extra value. It’s the warranty on a car that provides peace of mind. It’s the networking opportunities that come with a continuing education course. It’s the added features that enable your Actual Product to compete with products in a similar category.

  1. Core Product 

Finally, the Core Product is the psychological reason for buying the product. Essentially, it’s the brand. 



  • Sense of safety with my money
  • others being smart at something I am not
  • Security for the future


  • Athletic prestige
  • Achieving one’s athletic potential


  • Efficiency/productivity
  • “Fitting in”
  • Status
  • Exclusivity

The Core Product is where the fun really starts. We often say “the world doesn’t need another _____ company.” You can put almost any product in that blank space. This begs the question, “What does the world need?” 

The answer is, more often than not, an idea, or a feeling. Therein lies the Core Product. It is the part of the product a person can align their identity with, the thing that speaks to the core of the customer. 

The world doesn’t need another athleticwear company, but it does need the assurance that each individual is able to reach their highest athletic potential. 

It’s as simple as this: no core need fulfillment, no purchase.

Evaluating The Products
Now, think of three of the best businesses in the world. 

Whichever businesses came to mind, you can be certain that what makes them the best is how each of them constantly reevaluates their, Actual, Augmented, and Core Product. For your business, it’s just as critical to do the same, as you go through the process of product design and conception.

We’re here to help you think about your business, and your product, in more dimensions. Message us today if you’re ready to get deeper and start scaling your business.

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