Have you ever questioned the benefits of marketing to businesses and to you personally? Marketing bridges the gap between you and the maker or seller of an item. In doing so, it helps make products more useful because you are able to purchase them when you need them. Marketing makes buying easier for consumers. It also helps to create new and improved products as well as lower the prices.
The functions of marketing add value to the product. This means that marketing makes the product or service being offered more useful. The added value in economic term is called utility.
There are five economic utilities involved with all products form, place, time, possession, and information. Of the five, the utility of form is the only one that is not directly related to marketing. The remaining four are marketing utilities.
Form Utility. It involves changing of raw materials or putting parts together to make them more useful. In other words, it deals with making, or producing things.
Let us look at a tree to determine its utility. In its original state, a tree has value as an object of beauty. It also prevents soil erosion and produces oxygen for us to breathe. When the tree is cut down to use in making other products, however, its usefulness increases. Lumber from the tree might be used to make pencils, paper, furniture, and buildings. The raw material (wood) becomes a part of finished items that have more value to us than the raw material itself.
The same would be true if a manufacturer were assembling parts into a product. For example, the parts of a chair (the wood frame, the fabric used for the upholstery, the glue and nails used to hold the parts together, the reclining mechanism), they are relatively useless by themselves. Putting them together adds form utility.
Place Utility. It involves having a product where customers can buy it. Businesses often study consumer shopping habits through their newsletter printing that include a survey column to determine where would be the most convenient location for consumers to shop. Some businesses decide on a direct approach by selling their products through catalogs, posters and newsletters. Others decide to rely on retailers for help in selling their products.
Time Utility. It is having a product available at a certain time of the year or a convenient time of the day. Marketers increase the value of their products by having them available when consumers want them. In order to achieve that goal, marketers must plan their operations well in advance.
Take for example, toy manufacturers who introduce their new products to retailers through cheap newsletters or full color newsletters at a toy fair in New York. That is when retailers decide which products they will sell during the holiday season some nine months later.
Retailers also offer convenient shopping hours to accommodate their customers. Mall stores open 10 a.m. to 9 p.m. while some convenience stores are open 24 hours a day.
Possession Utility. How do you come into possession of the items you want? Unless they are given to you as a gift, you generally buy them for a given price. That exchange of a product for some monetary value is what we call possession utility.
Retailers may accept alternatives to cash like personal checks or credit cards, in exchange for their merchandise. They may even offer installment or lay-away plans. Every one of these options adds value to the product being purchased. In fact, without these options, some customers would not be able to buy the items they want.
Information Utility. It involves communication with the consumer. Salespeople provide information to customers by explaining the features and benefits of the products. Packaging and labeling provide information to customers about qualities and uses of a product.
Try to study these economic benefits of marketing to be successful in your business field.