What Is Utility Marketing
Utility marketing is a method of communicating the utility of product to consumers for convincing them for making purchases. It is a crucial element which is involved in product designing for facilitating marketers in attracting more prospects. The term “utility” defines the want satisfying power of a commodity. It reflects all those qualities of product or service which can fulfill the needs or wants of customer.
Utility can be related to value-in-use of a commodity as the level of satisfaction derived on consuming it is equal to its value-in-use. It is an economic term which defines the set of benefits which a customer will receive on acquiring or consuming the commodity. This concept is psychological and subjective in nature that varies from person to person. A same product may provide different level of utility to two different persons.
Market utilities are key aspect of marketing which need to be well-understood by every business. Having a better understanding of all this will enable marketers in adding more value to their products and reaching out to large range of customers. People will more likely move toward such products which possess more value-in-use thereby providing them with maximum satisfaction.
Types of Utilities Marketing
A utility is of many forms which are discussed as given below: –
Form utility is a utility which is formed or created by firm by giving a particular design to product. Whenever the form or shape of product is changed, it results into form utility. It is more commonly associated with psychical goods, where customer enjoys and appreciates the looks, design and features of product.
For example, a piece of wood is used by the carpenter for making a table. Here, the carpenter has created form utility by converting an ideal piece of wood into useful commodity like furniture.
Place utility is concerned with distribution channel which means making products available at right places from where customers can easily access them. The products need to be available physically on a store or virtually online for enabling people to buy them. Creation of place utility require more efforts as products need to be transported and placed into right places from where they can be quickly and easily reached by customers.
For example, home delivery of foods, a store with many locations, mobile services and many more like this offers value to customer via ease of availability.
Service utility is related with service firms which performs various tasks in order to provide value to customers. They satisfy the needs of customers by undertaking some sort of task i.e., delivering services as per the requirements.
For example, various professionals like doctor, teacher, engineer, lawyer etc. create service utility by providing their specialized range of services to customers.
Time utility means the efficiency with which the customer is able to get the product after desiring it. Marketer must efficiently know to handle time difference in between the creation of products and its consumption. This utility adds more value to customer by making a product available efficiently as and when required by them.
For example, a farmer creates a time utility by producing the wheat and storing it for few months after harvesting period. He then sells this crop at the time when there is more demand and price rise which results in adding more value to wheat.
Possession utility is the value derived by consumer on acquiring a commodity for usage. It is the value which is added by changing the possession of product from one person to another one.
For example, a book on economics has more utility in case if it is owned by economics’ student as compared to layman.
Knowledge utility means the communication which is used by companies for spreading information about product or services among customers. The information is spread with the intention of triggering buying activities and managing the purchase processes. A promotional message containing full information is delivered by companies via advertising and public relations for attracting interested buyers. This way when the value of a product is increased by increasing knowledge about its usage, it is termed as the creation of knowledge utility.
Natural utility comprises of all free goods present on earth and posses a capacity to satisfy human wants. These include air, water, sunshine etc.
Overall customer value
As we have discussed above, it is seen that the overall value and convenience to customers is related with different forms of economic utilities in marketing.
The value to the customer enlarges just beyond the product (form utility). It is seen from above list of utilities that this value too extends to tasks (service utility), easy to access and convenience location, and also ease of purchase and convenient process.