Chapter 3 1 Business Utility Business Provides Utility

Chapter 3. 1 Business Utility

Business Provides Utility • One of the major tasks of business is to provide Utility. • Utility (in business) defines the characteristics of a product that satisfies human wants and needs. • When businesses Add Utility they Add Value. • Adding Value – enhancing a feature or service to inspire a customer purchase.

Form Utility • Form Utility is added when a business changes the form of something to make it more useful. • This is the main job of the production function in business. • For example, an auto manufacturer… How So? • turns steel, plastic, fabric and glass into an automobile.

Place Utility • Place Utility is added when products are available at convenient places. • Production/Marketing Function • ATM placement… How So? • Any other examples?

Time Utility • Time Utility is added when products are made available at the times that customers need and want them. • Production/Marketing/Management • Examples? • Bank Hours • Newspaper Delivery

Information Utility • Information Utility is added when marketing provides information about a product to a customer. • Telling customers about the product and where to buy them. • Marketing Function of Business

Information Utility • Examples? • Websites – describing products and provide purchase opportunities. • Advertising and Promotions • Product Owner Manuals – Product instructions or directions.

Possession Utility • Possession Utility is added when it becomes easier for a customer to acquire a product. • Finance/Marketing Function • Examples? • Various kinds of Credit (Car Loan)

Buyers Markets • Two Types of Markets based on the type of buyer: • Consumer Market – consists of customers who buy products for their own use. • Business Market – consists of customers who buy products for use in a business.

Consumer Markets • Consumers are the actual End User of the products. • They buy products for their own personal use. • Business-to-Consumer (B 2 C) –Businesses selling primarily to consumers

Consumer Market • Customers in the Consumer Market buy: groceries, clothes, home goods, cars, etc. • They DO NOT use their purchases for any business reason. • Most commercials on TV are aimed at customers in the consumer market.

Business Market • Customers in the Business Market buy products for business purposes. • The customer is actually a Business that buys products from another business. • Business to Business (B 2 B) – Businesses selling to other Businesses

Industrial Markets • Industrial Market (Type of Business Market) • Businesses that sell to each other are often considered industries. • Industry – a group of businesses that produce similar goods or services. • What are some Industry examples? • Automobile Industry • Banking Industry • Telecommunications Industry

Commercial Markets • Commercial Market (Large Business Markets) • Commercial business refers to buying and selling on a large scale. • Commercial businesses are For-Profit Businesses. VS. • Organizational businesses are Non-Profit Businesses. • What are some organizational businesses that are nonprofit?