Final answer:
The second level of a product is called the 'actual product,' which includes tangible aspects like design and brand name along with service features. It's selection D from the given options. The intangible aspects such as advertising and guarantees play a significant role in product differentiation.
Step-by-step explanation:
The second level of a product is the actual product, which refers to the tangible product itself, service features, design, quality level, brand name, and packaging. The correct answer is D. actual product. When firms attempt to make their products stand out from competitors, they often focus not only on the physical aspects of a product but also on intangible aspects such as guarantees, quality reputation, customer service, and advertising which shape consumer preferences.
Product differentiation may also occur in the perceptions of the product. For instance, despite similar tastes, customers may have preferences for certain brands of ketchup, mayonnaise, beer, or cigarettes due to advertising and past habits, highlighting the importance of intangible factors in product differentiation.