Economics LAP 13 Objectives: Describe the types of utility. Explain the relationship between utility and marketing. Describe the types of utility. Marketers use utility to measure consumer satisfaction. Utility As.
Download ReportTranscript Economics LAP 13 Objectives: Describe the types of utility. Explain the relationship between utility and marketing. Describe the types of utility. Marketers use utility to measure consumer satisfaction. Utility As.
Economics LAP 13 Objectives: Describe the types of utility. Explain the relationship between utility and marketing. Describe the types of utility. Marketers use utility to measure consumer satisfaction. Utility As Usefulness Faulty products aren’t helpful to you. Cracked coffee mug AUseful helpfulproducts product is ayour useful make lifeone. better. Bad hair cut “A little off the sides is all I asked for!” Utility As Satisfaction To satisfy consumers’ wants and needs, marketers look at how consumers view the product. ? Utility and Self-Interest Consumers buy products to benefit themselves. Businesses provide useful products to stay in business. Example: A camera phone that shoots both stills and video 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 Creating Utility Marketers attempt to increase: • The probability of purchases • The level of consumer satisfaction Creating Utility Making changes • By making changes to existing products is called creating utility. • By developing new products New designs Now open 24 hours! Updates Better hours Online options 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 Types of Utility Form utility = Task utility = the Businesses usefulness created can by change changing product the form styles, of scents, a good flavors, or colors. Businesses the usefulness can created do things by changing in a new the or characteristics improved way. of a service Towel-dry service Fastest delivery in town! Types of Utility Time utility = Businesses can makecreated sure the product is the usefulness when available when want to buy it. products are you 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? Types of Utility Place utility = the Businesses usefulness can created make by sure making the product sure products is available are available wherewhere you want theyto are buy needed it. New! A bus service could expand into your neighborhood. Your bank could set up online account management. Types of Utility Possession utility = the Businesses usefulnesscan created makewhen it easy ownership for you is transferred to the user to become the product’s owner. As the owner, you can do what you want with your jeans. Explain the relationship between 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. 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 Spoiled milk—Low Each gallon of milk utility is ranked individually— Fresh milk—High utility according to its usefulness. Utility varies. One product vs. another product One consumer’s view vs. another consumer’s view Utility now vs. utility later For the system to work well, both marketing and production are needed. For a consumer to be satisfied, the four types of utility must present. In be fact, both are necessary for all four types of utility to be present. Form/Task utility Time utility Place utility Possession 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 Marketers affect form utility indirectly when they: Study which features bring the most satisfaction Recommend the changes producers should make 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 Marketers are directly involved in place utility when they: Figure out where the right location is Plan how to get the product there Actually deliver the product to the right place A snowsuit in Hawaii would have little place utility. Marketers directly create possession utility when they: Address whatever holds Make the purchase as consumers back from effortless as possible making a purchase If affordability stands in the This allows a willing buyer to take way of a purchase, ownership of a product as soon as possible. marketers can provide options: 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 • Think of something you bought recently. • Consider how the four utilities were provided. • What improvements—or increased utility— would you like to see? John and Marcia Collect information from a local business Select the television they prefer Purchase it online Acknowledgments Original Developers: Lelia Ventling and Mary C. 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