What are the four different kinds of utility that marketers can provide give an example not from the book of a product that delivers each type of utility?

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Form Utility
Time Utility
Place Utility
Possession Utility
Information Utility
4. Possession

The utility marketing model helps business owners design marketing campaigns that appeal to the psychological motivations that drive consumers to make purchases. Because marketing strategy is an important part of your brand-building efforts, it’s a good idea to craft your marketing for maximum appeal. Marketing is more effective when you include the four basic utilities, or values, that products offer consumers.

The utility of form refers to the appeal of a finished product. Companies often do market research to get a sense of which version of finished products consumers like best. While large companies may use pricey market research companies to find out this type of information, you can conduct market research easily by asking your customers which version of a product you sell they like the best. For example, say your small business specializes in hand-forged knives. You could set up a display, ask customers to pick which handle styles and blades they would buy, and invest in marketing the knives customers like the best.

The utility of time, or timeliness, takes into consideration everything that goes into making products or services available to consumers right when they’re ready to buy. Business that are good at making products or services available to consumers in a timely manner have an easier time convincing them to buy. Factoring in the utility of time connects to inventory management and involves inventory and operations planning such as product manufacturing and shipping. For example, Amazon addresses the value of time utility with its Amazon Prime membership program, which offers members free two-day delivery to get their purchases fast. And to illustrate what happens when a business doesn’t consider the utility of time, consider that a taxi company might not be very successful if its marketing materials mentioned it being closed during rush hour.

Place utility addresses convenience, an element of the marketplace that is increasingly important to busy consumers. A business can create increased place value by leasing stores in convenient locations. For example, if you run an interior design business, you may get a lot of business if you set up shop near a furniture store and market that fact to potential customers. Place utility can also apply to online businesses. Having a mobile-friendly website gives you access to the millions of consumers who buy goods and services from their smart devices.

The utility of possession simply means the satisfaction a consumer feels from buying a product or service. For example, you can boost the possession utility by marketing a product’'s many uses as a benefit. You can also increase utility of possession by offering financing, which allows a consumer to enjoy the product or service immediately while paying little or no money for it. There are endless ways to market products and services to make them more appealing to consumers. Highlighting features to communicate the values in the utility marketing model can help attract more customers and increase sales.

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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 Utility

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

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.

Place Utility

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 Utility

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

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.

In the field of behavioral economics, we often come across the term utility (see also key insights from behavioral economics). In this context, utility refers to the perceived value (i.e., usefulness) an individual receives when they purchase a good or service. There are four different types of utility: form utility, place utility, time utility, and possession utility. The extent to which these utilities affect purchase decisions depends on the individual. Nevertheless, it is safe to say that all of them can have a significant impact. Therefore, firms have an incentive to maximize the perceived utility of their products to attract more customers and maximize revenue. Hence, we will look at the four types of economic utility in more detail below.

1. Form

Form utility is created by the design of the product or service itself. The more precisely a good or service is targeted towards customer needs and desires, the higher its perceived added value (i.e., form utility) will be. In other words, form utility is obtained by transforming customer needs into products or services. To do this, companies analyze their target markets and survey potential customers to find out what they need. This information can then be used to align product features with actual customer needs. Thus, form utility can be created through things such as high-quality materials, ergonomic design, or a wide selection of options to chose from.

To give an example of form utility, think of a car manufacturing company. We’ll call it Super Cars. In theory, this company could sell all the parts of their cars separately. However, by assembling the parts (and manufacturing cars), Super Cars adds significant value for their customers and thereby increases form utility.

2. Place

Place utility can be obtained through the process of making a good or service more easily available to potential customers. The easier it is to purchase a product, the more attractive it becomes. Thus, place utility has a lot to do with distribution channels and the physical locations at which goods or services are sold. Additionally, some economists argue that even things like the discoverability of the product on the internet through search engine optimization affects place utility. After all, a wide variety of goods and services can be bought online these days.

Going back to our example from above, let’s assume Super Cars is an American company. If its cars are sold exclusively within the US, buying a Super Car is not very attractive for Europeans. However, if the company decides to open dealerships across Europe and sell Super Cars overseas, the availability (i.e., place utility) of its cars for European customers increases.

3. Time

Time utility is created by providing easy availability of a good or service at the time when customers need or want it. The more easily and quickly a product can be purchased (and used) at that time, the higher its perceived time utility is. In addition to that, time utility is always high in times of scarcity. Hence, a company’s supply chain management has a significant impact on time utility. Among others, this includes processes such as logistics and delivery as well as storage. Companies are continually improving their supply chain management, which has led to services such as same-day delivery and 24/7 availability.

In the case of Super Cars, one way to increase time utility would be to reduce delivery times. Customers often have to wait several weeks or even months for a new car. However, many of them need their vehicles as soon as possible. Thus, if Super Cars manages to reduce delivery times by even just a few days, its cars become more attractive to potential customers.

4. Possession

Possession utility describes the benefits that can be derived from owning and using a specific product. Generally speaking, the more “useful” a product is to an individual, the higher its possession utility will be. In some cases – especially according to marketing theory – the term possession utility is also used in the context of facilitating possession, i.e., through easy payment methods such as credit cards or leasing contracts. The reasoning behind this is that a simpler acquisition process usually leads to a higher perceived value of a good or service.

For example, possession utility can be created whenever a client is handed the keys to their new Super Car. Simply because from that moment they have possession of the car and are free to do whatever they want to do with it. Additionally, Super Cars can create possession utility by offering leasing contracts, which make it easier for potential customers to get access to a new car.

Summary

In the field of behavioral economics, the term utility refers to the perceived value (i.e., usefulness) an individual receives when they purchase a good or service. There are four different types of utility: form, place, time, and possession utility. Form utility is created by the design of the product or service itself. Place utility can be obtained through the process of making a good or service more readily available to potential customers. Time utility is created by providing easy availability of a good or service at the time when customers need or want it. And last but not least, possession utility describes the benefits that can be derived from owning and using a specific product.