1. ECONOMIC UTILITY High School of Business Principles of Business

2. 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.

3. 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.

4. 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”

5. 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  Scents  Flavors  Textures  Sounds  Colors

6. 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.

7. 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.

8. 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.

9. 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  Advertising  Mailings  Personal Selling  Social Media

10.  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. HOW DOES MARKETING INFLUENCE UTILITY?

11. UTILITY ACTIVITY  In groups of 3-4 students, you will pick a product or service. Your teacher can help you with ideas.  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.