2 General Purposes of Marketing People have economic needs & wantsProducers create goods & services to satisfy consumer’s needs & wantsMarketing adds usefulness to goods & services by bringing sellers(producers) & buyers(consumers) together so exchange can occur.
3 Economic Goods & Services Things produced that satisfy consumer’s needs & wantsGoods: Tangible (can touch)Services: Intangible (can not touch)
4 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.
5 Utility is added through Marketing & the 7 Marketing Functions DistributionFinancingMarketing-Information-ManagementPricingProduct/Service ManagementPromotionSelling
6 Goods & Services Must Have Utility(usefulness) – 5 Ways Utility is Added to Goods & Services FormPlaceTimePossessionInformation
7 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.
8 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.
9 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 Valentines
10 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.
11 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.
12 Goods & Services Must have Utility All types of utility are added throughout the marketing process so products have value to consumers.