Utility & Buying Motives

Utility Utility – the added value in economic terms created by the functions of marketing Form Place Time Possession Information

Form Utility Involves changing raw materials into usable goods or putting parts together to make them more useful

Place Utility Involves having a product where customers can buy it

Time Utility Having a product or service available at a certain time of year or a convenient time of day

Possession Utility Exchange of a product for money Accepting alternative to cash Checks Debit cards Layaway Credit cards

Information Utility Involves communication with the consumer

Types of Markets Market – all people who share similar needs & wants and who have the ability to purchase a given product Consumer Market – consists of consumers who purchase goods & services for personal use Organizational Market – business-to-business market includes all businesses that buy products for use in their operations

Client versus Customer Customer: a person who purchases goods or services from another Client: a person or group that uses the professional advice or services of a lawyer, accountant, advertising agency, architect, etc. The difference between a customer and a client can be rather confusing, and in some instances, both terms may be used to refer to any type of business patron. When a company has ongoing interaction with someone, that person tends to be referred to as a client rather than a customer. The term "client" tends to suggest the need for long-term care and consideration. There are also some industries in which one term is preferred over the other due to the typical way in which people do business. Difference in Relationship In general, the difference between a customer and a client is that a protective, ongoing business relationship is formed with a client, but not necessarily with a customer. For example, a customer might walk into a store one time, choose a few items, and make a purchase before leaving. A client, on the other hand, comes back repeatedly to make additional purchases and establishes a long-term relationship with a company. This difference can be subtle, but it is important since many businesses want to establish these long-term associations. I’ve shortened them to make a point: You don’t want customers any more after reading those definitions. You want clients. You don’t want people who buy from you once because you simply have the “goods” they need right now. You want ongoing relationships with people who use your professional advice and expertise — who buy from you because of how you help them, not what you hand them. You may think this is splitting hairs; that it’s semantics. But it’s really a mindset. Cultivate relationships so that you become indispensable for what you know (that you can transfer), how you help, and how you make people feel about the interaction. When you do that, you’re building a client base, not a customer list.

Customer Buying Motives Buying motives: reasons a customer buys a product Rational Motives: conscious, logical reasons for a purchase Product dependability Time or monetary savings. Product quality Good customer service

Customer Buying Motives Emotional Motives: feelings experienced by a customer through association with a product Social approval Fear Power Love Prestige Patronage Motives: reasons for remaining a loyal customer of a company

Routine Buying Decisions Used for purchased that are made frequently and do not require much thought Familiar with products

Limited Buying Decision Take more time than routine buying decisions Associated with a product that is more expensive or is purchased less frequently Buying jeans

Extensive Buying Decisions Occurs when the consumer methodically goes through all five steps of the decision-making process Purchasing a car Not made lightly