Economic Utility

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Transcript Economic Utility

ECONOMIC
UTILITY
WHAT IS UTILITY?
Useful products make our lives better. They
provide us with something worthwhile. They
have utility – usefulness.
Utility is about satisfying wants and needs.
If customers are satisfied with what a product
offers because it fulfills a desire, the product has
utility.
If not the product lacks utility.
SELF-INTEREST FUELS UTILITY
 Consumers and Businesses buy products that benefit them
– the products with the most utility.
 The first products consumers buy are the ones that benefit
them most – the products with the most utility.
WHAT TO MAKE?
Businesses work to satisfy consumers demand for
products and services.
Marketing tries to:
 Improve existing products and services
 Develop better products and services
 Change how products and services are delivered
These changes are called “Creating Utility”
FORM & TASK UTILITY
 A Product’s Form is tangible – whatever can be noticed by
the senses.
 Styles
 Scents
 Flavors
 Textures
 Sounds
 Colors
 Marketers change the tangible parts of goods to Create
Utility
 Form Utility is created when the physical characteristics
of a product are changed to make it more useful
 Task Utility is created when the characteristics of a
service are changed to make it more useful.
TIME UTILITY
 Getting the timing right to make a product available to
consumers
 Requires looking ahead and anticipating what will be
needed in the future.
 Marketers make changes to avoid or correct problems
with timing.
 Time Utility is created when products are made
available at the time they are needed or wanted by
consumers.
PLACE UTILITY
 Place is the right location for products and services – on a
shelf, in the showroom, at the fair, in the warehouse, at the
office…
 Making changes to a product or service’s location can
create Place Utility
 The usefulness created by making goods and services available at
the place they are needed or wanted by consumers.
POSSESSION UTILITY
 Possession involves selling the product or transferring the
product’s ownership.
 The exchange of money for a product or service shifts
possession
 Possession Utility is the usefulness created when ownership
of a product is transferred from the seller to the buyer or
when a service is performed by the provider for the buyer.
 Marketers make changes that affect the purchasing process
by making it easier to buy a product or service.
HOW DOES MARKETING INFLUENCE
UTILITY?
Marketing is about making a connection between a
product or service and the consumer
To do this they share information on product
benefits with consumers and encourage them to
buy.
Marketing tools:  Displays
 Personal Selling
 Advertising
 Mailings
 Social Media
HOW DOES MARKETING INFLUENCE
UTILITY?
 Form Utility: Product changes are made in production –
Marketing recommends changes to the product form after
analyzing what consumers want.
 Time Utility: Marketing works to understand when consumers
want a product and work to plan and schedule all of the steps in
the product development cycle.
 Place Utility: Marketing determines the best location to place
the product where it will meet consumer’s needs.
 Possession Utility: Marketing analyzes what barriers prevent
consumers from buying the product or service and design ways
to remove them.
UTILITY ACTIVITY
 In groups of 2, you will pick a product or service.
 You will have 15 minutes for your team to come up with an example of
a Time, Place, Possession, and Form Utility change for your product or
service that will increase sales and customer satisfaction.
 You will need to present your ideas to your classmates using a drawing,
demonstration, or model.
 As each team presents the changes to the product or service, the other
student teams will guess which utility is used in each example.