5 types of utilities
4/5
Types of Utility
updated
2015 Jan 19
Production and Marketing
supply various kinds of utility that are needed to provide consumer satisfaction
.
Definition
of terms
Within the world
of "teaching marketing", and websites discussing the various "utilities
of marketing", you'll find a variation on whether there are 4 or 5 Types,
and sometimes different wordings of the type.
Fundamentally, the concept
is used to explain that the process of marketing creates several "things"
which make a product/service useable to the end user, without these "things"
being done, it is not possible to acquire, and use the product properly.
-
Form -
when someone makes something, they assemble a product from parts and you
can use it
-
Task -
when someone does something for you, like put ice cream in a cone, or change
the oil in your car
(some
marketing education profs and websites don't use the word Task, they discuss
"Promotion" or they merge the meaning of "task" into "form")
-
Time -
making sure the product is available when people need it
-
Place -
making sure the product is accessible, bring it to the customer, or have
it in convenient place
-
Possession -
letting the customer have the product, usually after they pay, they can
"possess" it and hold it, transport it etc.
so when
we say Marketing provides these 5 types of utilities,
we
mean
the process of marketing does things which makes it possible for
you to have the finished product, or have some service done, or have
it done at a particular time, or in a particular place
Definition
of terms
Utility
When we say
utility, what we mean is for a product to be something we can use and get
some usefulness out of - utility
vv
FORM
When
someone makes something, they assemble a product from parts and you can
use it. Marketing people use research to make sure that the form and shape
of the product fits the expectations of the customer.
For
example, the form, when applied to a clothing item, can be the shape of
the garment and the range of sizes and the selection of fabric. So the
"utility" of the marketer, is that they assemble various fabrics together
into a garment that you can wear, instead of you gathering all the component
parts yourself and making it yourself.
When
applied to a service like software, it can be versions for different applications,
or operating systems, like Windows and Mac.
xx
TASK
In
the context of providing a service, when someone does something for you,
like
-
cut your
hair because you can't, or don't want to do that, or
-
does something
for you that you don't have time to do, like cut your grass, or
-
performs
a skill on you that you don't have competency in, like extract a tooth,
we refer
to that as the "task" utility - usually these are services, and like services
they are intangible and cannot be "stored" or replicated exactly.
In
providing the utility of completing a task for someone, marketing people
require more communication with the customer in order to make sure that
expectations are met precisely since the way the task is carried out can
vary so easily.
x
TIME
The
"social-cultural environment" of customers in the current marketing climate
is one in which people often are quite impatient to take possession of
the product once they have made the final decision to buy.
It
is important, in a competitive environment, to use every opportunity to
streamline your supply chain and distribution channels to allow a customer
to physically obtain the chosen product as quickly as possible.
In
the case of food service items, you can't have the burger ready and have
the customers wait many minutes for the fries, they just won't come to
your drive-through next time.
This is
one of the reasons why (say some fast food experts) that McDonald's fries
are skinnier and smaller than, say, Harvey's, they are designed to cook
faster so McDonald's can serve customers faster because the McDonald's
focus is on the "Fast" in fastfood.
PLACE
The
utility of place refers to having the product exist in a location that
is easily accessible to the buyer at the moment in time when their payment
transaction is concluded.
If
you are selling products in a huge warehouse style store, like Home Depot
of Costco, the utility of "place utility" can be as simple as having the
product in boxes on pallets ready to pe picked up and the customer can
simply walk directly to the cashier to make payment.
When so
many products are sold online, or in a marketing situation which may be
partly online, and partly in a store, it is more and more important to
make sure the "place utility" is as competitive as possible because sometimes
the final decision about whether to buy, or not buy, is made by the customer
based on how they can physically get their hands on the product as soon
as possible.
For
example, it is no good having a detailed YouTube video of how your low
priced air-conditioner works, if the customer has to drive many miles to
find a store with one actually in stock.
POSSESSION
The
utility of Place and Possession are very much inter-related and depend
on each other.
When
someone buys something from a vendor, essentially, it is a "transfer of
ownership".
Part
of being successful in the competitive world of "selling stuff" is to make
it easy for the customer to pay, and take possession.
The
marketing utility that allows the customer to physically access what they
bought, it referred to as "possession".
Having
a variety of easy payment methods, cash, debit, credit card, paypal, etc.
is part of facilitating possession as is the physical location of the product
and how it is delivered to the customer.
One of the competitive positions
Leon's furniture stores utilize is the incentive that people can make very
low payments to obtain large purchases, and walk out of the store with
their selection immediately - allowing for "possession" in an easy way.
In B2B
situation, leasing and credit purchase options, such as 2/10 net 30 are
also part of "possession".
.
.
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