Also referred to as extended product, an augmented product is any product that offers physical or non-physical features that elevate user experience. For example, premium customer support or extended manufacturer warranty augments the basic product called smartphone. These value-adding features help differentiate a product from the competition and also provide the seller the leverage to price the product higher than the competition, despite not incurring significant additional costs.

The market value of the “augmented” features is purely depended on how those features are perceived by the consumer. If the phone’s nifty features aren’t too useful in real life, they may not add be value-adding after all. Marketing plays a huge role in delivering those values to the consumer and altering perception. A few other examples of product augmentation are free additional months of service, cheap/free one-day delivery, free product installation, customized packaging, 24/7 helplines, color and flavor variations, etc.

Why are Products Augmented?

The primary objective behind product augmentation is to make a product a lot more visible in the marketplace. This differentiation becomes particularly important when selling generic products such as bread, cereal, widely used software such as web browsers, etc. Adding extra features help the seller create multiple revenue streams and also expand its market share. For example, the iPhone 7 user experience was augmented by the wireless in-ear headphones called AirPods, which Apple sold separately. Also, such product augmentation often translates into customer satisfaction and loyalty.