High School of Business Principles of Business Economic Utility High School of Business Principles of Business

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. 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. Styles Textures Scents Sounds Flavors Colors

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 Social Media Mailings

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.