What is utility in marketing?

Question

Justin Parker · Accepted Answer

Utility in marketing is the usefulness or value that a service or product is expected to give to consumers. Another way to put it is that utility is the advantage or benefit that a consumer derives from the use of a particular product or service, this concept is then incorporated into an organization's marketing strategy and campaigns.

There is a variety of different utilities in marketing, some common types include:

Form utility

Form utility is the value that is derived by using raw materials or resources to form a finished product that meets a specific consumer need. For example, a carpenter might transform wood into a table that a consumer can then use for several purposes. This creates a utility and is then marketed as such.

Time utility

Time utility applies to the creation of a service or product in an expeditious manner so as to make it available when customers want it or need it. For example, when a convenience store is open 24 hours a day for 7 days a week this creates a time utility for potential customers. The convenience store can then market this utility by saying they are open 24/7.

Place utility

Place utility refers to the location and convenience in terms of access to a particular product or service. It might also refer to a specific distribution channel. For example, companies that participate in e-commerce benefit from giving their customers all day and easy access to purchase products online. This convenience is then advertised in marketing materials.

Possession utility

Possession utility has to do with making a product or service simple to purchase or own. For example, if a merchant offers different financing options or simple return policies this produces a possession utility for consumers. Any information that might relate to the ease of purchase or other related features is then also incorporated into different advertising strategies.