Use It Economic Utility Economics LAP 13

Use It Economic Utility Economics LAP 13

Objectives Describe the types of utility. Explain ways in which business affects economic utility.

Describe the types of utility.

• If you’re hungry for a snack, which will you choose? • It depends on what you’re in the mood for. • Individuals and businesses make similar choices.

What Is Utility? • Would you buy: Ø A pair of shoes two sizes too small? Ø A ham sandwich if you’re a vegetarian? • A product with utility has the ability to satisfy customer wants or needs. • Services can also possess utility.

It’s All Relative • A constant is permanent and unchanging. • Utility is relative. • The same product might have different utility levels depending on: Ø Who’s using it Ø When s/he’s using it

Measuring Utility • Typically measured indirectly • Compare levels of satisfaction • Higher satisfaction, higher utility

Types of Utility • Form/Task • Time • Place • Possession

Explain ways in which business affects economic utility.

The Marketing Concept • All about the customer • Influences utility

Form/Task Utility • Businesses create and enhance form/task utility by: Ø Developing new products Ø Adding new features to goods and services already on the market

Time Utility • Marketers figure out when customers need the product. • Other areas of the business get involved in: Ø Planning Ø Purchasing Ø Production Ø Shipping/Delivery • Good businesses are able to make changes quickly to avoid/correct timing problems.

Place Utility • Businesses must put their products in: Ø The right place Ø The place where customers can (and want to) buy them • Businesses plan and move the product to the right place.

Possession Utility • Make it easier for customers to afford products • Tailor sales presentations • Do whatever it takes

Utility and the Internet • E-commerce is changing: Ø How businesses operate Ø How they create or enhance economic utility for their customers • Affects all four types of utility

• A recent purchase • How were the four utilities provided? • What improvements/increased utility would you like to see in the future?

• Shawn’s dilemma • Should he be dishonest to make a sale? • What would you do?

Acknowledgments Original Developers: Christopher C. Burke, Kerry Winfrey, MBAResearch Version 2. 0 Copyright © 2014 MBA Research and Curriculum Center

Digital-based photography sources: Think. Stock Photos Various images used in this presentation are © 2013 Think. Stock Photos. All rights reserved www. Think. Stock. Photos. com

Copyright: All photographic digital images on this CD are owned by the aforementioned photographic resources or their licensors and are protected by the United States copyright laws, international treaty provisions, and applicable laws. No title to or intellectual property rights to the images on this CD are transferred to you. These sources retain all rights and are not to be used, digitally copied, transferred, or manipulated in any way. To do so is a violation of federal copyright laws.