Augmented Product

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DEFINITION of 'Augmented Product'

A commodity that has both the primary physical attributes and the non-physical attributes that are added to increase the product's value. Non-physical attributes of an augmented product may include a product warranty, service or installation, and may increase the price of the basic product being purchased, and allow the company selling the good to provide the consumer with other services that may make using the product easier.

BREAKING DOWN 'Augmented Product'

A consumer has a host of choices across a wide price range when purchasing this type of electronic. In order to differentiate themselves from the competition, companies selling computers will augment the basic computer - the actual product - with warranties, customer service hotlines and other add-ons in order to make their products stand out.

The consumer then has the choice of buying a basic computer or an augmented product that has more bells and whistles. A company's success in selling an augmented product is heavily dependent on consumer perception of the value the add-ons bring, which makes marketing the product very important.
 

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