1. Product Development and Utility 5.4 Notes

2. Product Development & Utility  Product development adds value to the value equation of a product (benefits-costs) by adding something called UTILITY.  Utility refers to what is added to a product to make it valuable in the marketplace.

3. Form Utility  The relationship between a product or service’s form and its function. What the product is meant to do will often dictate what it looks like.

4. Form and Function Form The product’s “look” or the type of service provided Function What the product or service is intended to do Components of form utility Material, scent, flavour, colour, design, and packaging

5. Components of Form Utility Material – new technology = new materials available for productsMaterial – new technology = new materials available for products EX: Teflon, titanium EX: Teflon, titanium Scent – new scents help increase consumer appeal of a productScent – new scents help increase consumer appeal of a product EX: Aromatherapy EX: Aromatherapy Flavour – natural (and artificial) flavours are often added to a product to increase consumer impressions of the product.Flavour – natural (and artificial) flavours are often added to a product to increase consumer impressions of the product. Made with 2% OJ Made with 2% OJ

6. Components of Form Utility (Cont) Colour – consumers demand colour. Having many different options is key. Colour also influences consumers perception of a product.Colour – consumers demand colour. Having many different options is key. Colour also influences consumers perception of a product. EX: Bicycle design based on current colour trends in Cars EX: Bicycle design based on current colour trends in Cars Design – the design of the product is often the MOST IMPORTANT aspect of the product.Design – the design of the product is often the MOST IMPORTANT aspect of the product. EX: Shape of cars identifies it as sports versus family car EX: Shape of cars identifies it as sports versus family car Packaging – the package of a product is the last line of advertising. An appealing package design can help persuade the un-determined customer.Packaging – the package of a product is the last line of advertising. An appealing package design can help persuade the un-determined customer. Ex: Rethink Beer Ex: Rethink Beer

7. Other types of Utility  Information Utility – provides consumers with instructions, directions, and user manuals of the product, which adds more value to the product.  Place Utility – when the product is in an easily accessible location for the consumer to get, it adds value to the product. Easier the product is to find, the more place utility it has.Easier the product is to find, the more place utility it has.  Time Utility – when the product is available to the consumer when THEY want it, it adds value. EX: 24/7 convenienceEX: 24/7 convenience EX: On-line shoppingEX: On-line shopping  Possession Utility – when an item is easy to purchase (based on income) it has value added to it. EX: Payment PlansEX: Payment Plans EX: Reduced price if you pre-pay.EX: Reduced price if you pre-pay.