1. Use It
Economics LAP 13

2. Describe the types of utility.
Objectives:
Describe the types of utility.
Explain the relationship between utility and marketing.

3. Describe the types of utility.

4. Marketers use utility to measure consumer satisfaction.

5. “A little off the sides is all I asked for!”
Utility As Usefulness
“A little off the sides is all I asked for!”
Faulty products aren’t helpful to you.
Useful products make your life better.
A helpful product is a useful one.
Cracked coffee mug
Bad hair cut

6. Utility As Satisfaction
To satisfy consumers’ wants and needs, marketers look at how consumers view the product. ?

7. Utility and Self-Interest
Consumers buy products to benefit themselves.
Businesses provide useful products to stay in business.
A camera phone that shoots both stills and video
Example:

8. Measuring Utility
Marketers measure satisfaction in terms of low or high utility.
Example:
The higher the utility, the more satisfying the product.
High utility
Low utility

9. Creating Utility Marketers attempt to increase:
The probability of purchases
The level of consumer satisfaction

10. Making changes is called creating utility.
By making changes to existing products
How?
By developing new products
Now open 24 hours!
New designs
Shop at target.com
Updates
Better hours
Online options

11. Types of Utility
When marketers create utility, they usually adjust one or more of the four types of utility:
Form/Task utility
Time utility
Place utility
Possession utility

12. Types of Utility Form utility = Task utility =
the usefulness created by changing the form of a good
Businesses can change product styles, scents, flavors, or colors.
the usefulness created by changing the characteristics of a service
Businesses can do things in a new or improved way.
Towel-dry service
Fastest delivery in town!

13. Types of Utility Time utility =
Businesses can make sure the product is available when you want to buy it.
the usefulness created when products are made available at the time they are needed.
How useful is holiday candy available after the holiday?
How helpful is a tax service if offered after the deadline?

14. Types of Utility New! Place utility =
the usefulness created by making sure products are available where they are needed
Businesses can make sure the product is available where you want to buy it.
New!
A bus service could expand into your neighborhood.
Your bank could set up online account management.

15. Types of Utility Possession utility =
Businesses can make it easy for you to become the product’s owner.
the usefulness created when ownership is transferred to the user
As the owner, you can do what you want with your jeans.

16. Explain the relationship between utility and marketing.

17. Utility and Marketing Utility reveals what consumers prefer.
Marketers cater to consumers’ preferences by making changes.
These changes influence the degree of utility a product offers.

18. Utility tells marketers:
Utility and Marketing
Utility tells marketers:
How satisfied a consumer is with a product
How useful a particular product is to a particular consumer at a particular time
Each gallon of milk is ranked individually—according to its usefulness.
Spoiled milk—Low utility
Fresh milk—High utility

19. Utility and Marketing Utility varies. One product vs. another product
One consumer’s view vs. another consumer’s view
Utility now vs. utility later

20. Role of Production
For the system to work well, both marketing and production are needed.
For a consumer to be satisfied, the four types of utility must be present.
In fact, both are necessary for all four types of utility to be present.
Form/Task utility
Place utility
Time utility
Possession utility

21. Influencing Utility Marketing influences utility by:
Providing information—which can make the product’s purchase (and usefulness) more likely
Being involved in the four types of utility—which must be present for consumer satisfaction

22. Form Utility and Marketing
Marketers affect form utility indirectly when they:
Study which features bring the most satisfaction
Recommend the changes producers should make

23. Time Utility and Marketing
Marketers are directly involved in time utility when they:
Find out when consumers need the product
Plan how to get the product there on time
Make the necessary changes to get it done

24. Place Utility and Marketing
Marketers are directly involved in place utility when they:
Figure out where the right location is
Plan how to get the product there
A snowsuit in Hawaii would have little place utility.
Actually deliver the product to the right place

25. Possession Utility and Marketing Discount pricing Answer questions
Marketers directly create possession utility when they:
Address whatever holds consumers back from making a purchase
Make the purchase as effortless as possible
Discount pricing
Answer questions
If affordability stands in the way of a purchase, marketers can provide options:
This allows a willing buyer to take ownership of a product as soon as possible.
Layaway options
Payment plans

26. Utility and the Marketing Concept
Utility supports implementing the marketing concept.
All about what the consumer thinks
Utility also plays a role in the implementation.
A measurement tool to research what consumers want

27. Think of something you bought recently.
Consider how the four utilities were provided.
What improvements—or increased utility— would you like to see?

28. John and Marcia Collect information from a local business
Select the television they prefer
Purchase it online

29. Lelia Ventling and Mary C. Hollaway, MarkED
Acknowledgments
Original Developers:
Lelia Ventling and Mary C. Hollaway, MarkED
Version 1.0
MarkED Resource Center
Copyright ã 2006

30. Digital-based photography sources:
LIQUID LIBRARY
Various images used in this presentation are ©2004 Liquid Library. All rights reserved
DIGITAL VISION LTD.
Consumers
#267160B, 298
Photos copyright Digital Vision Ltd., all rights reserved.
833 Fourth Ave. SW, Suite 800 Calgary, AB, Canada T2P 3T5
MICROSOFT CLIP GALLERY LIVE
Various clipart used in conjunction with PowerPoint 2000[R], Microsoft[R] All rights reserved One Microsoft Way Redmond, WA USA
PHOTODISC, INC. Meetings and Groups
Volume 69
#69213, 07106
Photos PhotoDisc, Inc 2013 Fourth Ave., Seattle, WA 98121

31. Copyright:
All photographic digital images on this CD are owned by the aforementioned photographic resources or their licensors and are protected by the United States copyright laws, international treaty provisions, and applicable laws. No title to or intellectual property rights to the images on this CD are transferred to you. These sources retain all rights and are not to be used, digitally copied, transferred, or manipulated in any way. To do so is a violation of federal copyright laws.