Economic Goods, Services & Utility Marketing Principles Chapter 1

General Purposes of Marketing People have economic needs & wants Producers create goods & services to satisfy consumer’s needs & wants Marketing adds usefulness to goods & services by bringing sellers(producers) & buyers(consumers) together so exchange can occur.

Economic Goods & Services Things produced that satisfy consumer’s needs & wants Goods: Tangible (can touch) Services: Intangible (can not touch)

Before Exchange Can Occur Goods & Services Need Utility Utility(usefulness): The attributes of a product or service that make it capable of satisfying consumers’ wants & needs.

Utility is added through Marketing & the 7 Marketing Functions Distribution Financing Marketing-Information-Management Pricing Product/Service Management Promotion Selling

Goods & Services Must Have Utility(usefulness) – 5 Ways Utility is Added to Goods & Services Form Place Time Possession Information

Economic Utilities 1. Form Utility Changing raw materials or putting parts together to make them useful to consumers. Example: A tree is not useful to consumers until it is cut down and produced into a good like a chair or desk. Putting raw materials together so it satisfies consumers’ needs adds form utility.

Economic Utilities 2. Place Utility Adding usefulness by having a product where customers can buy it. Example: Selling winter coats in Alaska. Winter coats would not have utility in Florida. Example: Selling products at stores that are located in cities where populations are large.

Economic Utilities 3. Time Utility Adding usefulness by having a product available when it is convenient & needed by customers. Example: Retailers offer large supplies of backpacks in the late summer, near the beginning of the school year. Example: Selling candy @ Valentines

Economic Utilities 4. Possession Utility Adding usefulness by helping consumers take ownership of products. Example: Taking credit cards and checks rather than just cash enables customers to buy products. Offering 0% free financing. Offering free delivery with purchase of a product.

Economic Utilities 5. Information Utility Adding usefulness to goods & services by providing information so the customer is comfortable buying. Example: Salespeople explain features of products. Example: Packaging explains qualities and uses. Example: Advertising informs consumers about products.

Goods & Services Must have Utility All types of utility are added throughout the marketing process so products have value to consumers.