Chapter 1, Section 1.2 Marketing Principles Economic Utilities Chapter 1, Section 1.2 Marketing Principles

New & Improved Products Marketing generates competition, which in turn fosters new & improved products Example: Computers have gotten smaller, lighter, more powerful, & less expensive

Lower Prices Demand increases Manufactures can produce in larger quantities Which lowers price Fixed cost will not increase Demand increase competition increase which lowers price

What is Utility? The attributes of a product or service that make it capable of satisfying consumers’ wants and needs. Utility adds VALUE to a product The functions of marketing add value.

5 Economic Utilities Form Utility Place Utility Time Utility Possession Utility Information Utility

Form Utility Changing raw materials or putting parts together to make them more useful Not directly related to marketing Example: Chain Wheels Handlebars Gears What do these parts make??

Place Utility Having a product where customers can buy it. Most convenient Most efficient Catalogs, retails stores, internet

Time Utility Having a product available at a certain time of year or a convenient time of day. Give me some examples!

Possession Utility The exchange of a product for some monetary value. Cash Credit/Debit Cards Checks Layaway Customer Credit (Net 30)

Information Utility Communication with the consumer Salespeople Displays Packaging and Labeling Advertising

Can You…….. Name the 5 economic utilities and how they add value to products??