Five Different Types of Utility in Marketing
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The five utilities in marketing center on the development and offering of solutions that are useful to targeted customers. The five primary utilities are form, time, place, possession and information. Some marketers also identify service as a distinct utility, as it emphasizes intangible facets of satisfying the customer. A friendly and helpful attitude from company associates is one example of intangible service.
Form is a simple utility. It involves the development of a product that meets the format, size, shape and scope that customers need. For example, small size and sleek nature are primary traits required in the form of a compact car. Marketers are also emphasizing form utility when they promote a compact car as easy to drive or easy to park. Creating custom shoes that fit on a particular buyer's foot is another example of form utility. When promoting form utility, companies often focus on the basic design features and specific user the company had in mind during development.
Time utility refers to the efficiency with which a customer gets to experience a product or solution after desiring it. In some industries, fast delivery drives the value proposition, which is the customer's perception of the mix of benefits provided by a particular solution. Fast food and quick lube service industries are primary examples. Companies that promote to consumers in these sectors build highly efficient systems that allow them to meet the needs of busy customers or those who want convenience.
The premise that people need convenient access to products is the place utility. Retail companies typically try to set up shop in standalone or mall-based locations that make them accessible to target shoppers. Convenience stores represent an entire category of retail that focuses on the needs of people on the go. Having warehouses in optimal locations also enables distributors and online companies to get goods out the door as efficiently as possible to meet customer demands.
Possession refers to the utility of a buyer actually taking ownership of a purchased item. In a car dealership, the term "delivery" refers to the turning over of a vehicle to its new owner after purchase. Some companies allow customers to buy with credit or payment plans so they can take possession of purchased items even before completing full payment. This feature appeals to consumers or businesses with a desire for immediate possession despite budget constraints. Suppliers often allow business buyers to purchase inventory on account, which means the business receives the goods immediately and pays later.
Information utility is the communication that companies engage in with customers to trigger buying activity and to manage purchasing processes. Companies use promotional messages delivered through advertising and public relations to share company, product or service information. The goal is to attract interested buyers. Salespeople in a high-priced or complex business environment are also important in answering customer questions and addressing concerns through the sharing of information. Car dealerships, appliances stores and electric stores all commonly rely on sales associates to share useful information with customers.
Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.