Topic September 5, 2022

UTILITY
In marketing, utility refers to how a product can be useful to customers in a way
that convinces them to make a purchase. Marketing utility is the idea that the best
way to sell a product to a consumer is to show them how the product could provide
value to their life.

Marketing utility is the idea that the best way to sell a product to a consumer is to
show them how the product could provide value to their life. 

When developing a marketing strategy, it's important to understand the type of utility
your brand or product can give to customers. To appropriately market a product to an
audience, you need to be able to develop a value proposition, which explains the
unique benefits a product can provide to consumers. Utility in marketing helps
businesses guide their marketing plans based on how customers use their products.
Knowing the types of marketing utility can help you identify the specific ways a
product or brand can connect with their target audience. Good utility marketing can
have a range of business benefits including:

 Strengthening customer relationships: When you provide value to a

customer, you create an opportunity to develop a mutually beneficial business
relationship. Utility marketing emphasizes showing customers how your
company and its products can specifically add value to their lives, which
creates a valuable personal connection with your target audience.
 Developing a brand identity: Using marketing utility to drive product
development and advertising can help you strengthen your brand based on the
service it provides. Once consumers understand the utility of a company's
product, they can begin associating the entire brand as the source of solutions
in a particular area.
 Reaching new audiences: An important part of utility marketing is finding
alternative uses for a product and repurposing its functions to meet various
needs. This helps companies reach customers that may not be interested in a
product's initial function but can appreciate other forms of utility and value
that the product provides.
 Guiding repeat purchases: Because marketing utility involves showing
customers how they can improve their lives with a product, it can help secure
repeat purchases. Once a customer tries a product and experiences the value it
provides firsthand, they often need to make repeat purchases to sustain that
value.
 What are the main types of marketing utility?
 To effectively use a utility-based marketing strategy, you first need to
understand the different ways customers can gain value from a product or
service. A marketing utility model can address a single type or combine multiple
aspects of a product's utility to target various market segments. There are a few
primary categories to consider when determining a product's potential utility:


 Form
 Form utility refers to how the physical state of a finished product can provide
value to customers. A final product that is fully assembled typically offers more
value to consumers than one that comes in individual components because the
customer doesn't have to put effort into putting the product together before they
can use it. Products that are fully ready to purchase offer form utility to
customers.
 For example, a customer could purchase all of the parts required to build their
own computer and spend time putting them together themselves. This requires
the customer to not only have knowledge of building computers, but to dedicate
their own time to making the computer. The average consumer would likely
prefer to buy a completed computer because it provides them with form utility.
 Time
 Time utility is the idea that a product is accessible to customers whenever they
need them. It is based off the idea of supply and demand, meaning that a
company that offers time utility is always able to provide consumers with the
amount of products they need whenever they need them. When a product has
time utility, customers can be confident that they can easily buy it without
having to wait. Companies that incorporate time utility into their marketing
strategy emphasize their reliable supply chain and ability to adapt to seasonal
changes in demand.
 For example, a company that offers a two-day delivery guarantee can emphasize
this aspect of their business to promote time utility to their customers.
Consumers can appreciate this time utility and associate the company with fast
service because they know that they can have a product within two days if they
need it.
 Place
 Place utility means that a customer can purchase products in locations that are
convenient to them. The more widely available a product is to your target
consumer, the more place utility you can provide. Utility-based marketing that
focuses on place involves selecting the distribution channels that your target
customers use the most. When customers know that they can access a product
in a location they already frequent, they gain value by not having to change
their daily habits to access a product.
 For example, a company that sells car air fresheners could incorporate place
utility into its marketing plan by purchasing shelf space at the front of all of the
auto shops and car washes in a particular area. The company's target audience
of car-owners already frequent these locations, so they can appreciate the value
of being able to purchase air fresheners while completing other tasks related to
car maintenance.

 Possession
 Possession utility is the idea that customers can gain value from a product
simply by owning it. Once a customer has a product in their possession, they
gain value by being able to use it in any way they want. The methods that a
company uses to make sure that customers can have physical access to their
products they purchase can contribute to the value of possession. Possession
utility is linked to both time utility and place utility because all three forms of
utility emphasize making it easy for consumers to make a purchase.
  For example, companies that advertise in-store financing are taking advantage
of possession utility in their marketing plan. Customers who sign up for a line
of credit don't have to pay the full amount before they can have the product in
their possession. If a consumer buys a car using a line of credit from the
dealership, they can still choose to paint the car or make modifications to the
interior simply because they have ownership of the car.
 Information
 The information a company provides to customers about a product can also be
an important type of utility. Customers value being able to make an educated
decision about their purchases, so businesses can convince them to make
purchases by providing useful information. Product details, website
descriptions and in-person interactions with sales associates are all ways to
provide information utility.
 You can use information utility in marketing by advertising your company's
industry expertise. Emphasizing free consultations or 24/7 customer service
lines demonstrates the value of knowledge that you can share with customers if
they make a purchase.

MARKETING PHILOSOPHY

In 2012, Dr Philip Kotler defined marketing as “The science and art of exploring,
creating, and delivering value to satisfy the needs of a target market at a profit.
Marketing identifies unfulfilled needs and desires.

Marketing concepts or marketing management philosophies are the philosophies used

by the businesses to guide their marketing efforts.

In simple terms, marketing concepts relate to the philosophy a business use to

identify and fulfil the needs of its customers, benefiting both the customer and the

company.
Same philosophy cannot result in a gain for every business, hence different
businesses use different marketing concepts (also called marketing management
philosophies).

Marketing concepts are driven by clear objectives like cost efficiency, product quality,
customer’s need fulfilment etc.

1. Product Concept: This is another marketing philosophy that is concerned with quality
of the product rather than the quantity of the product. The consumers are always
looking out for quality products and are not worried about price and the availability of the
product.

Example:
Apple is one corporation that places a great value on product concepts. It provides
the best products to its customers. Apple's products are of exceptional quality, cutting-
edge features, and outstanding performance. Customers get attracted to Apple's
products, which creates a marketing pull.
 2. The production concept is a marketing philosophy where your business focuses on
producing more goods in such a way to drive prices down. The idea is that the
more your products are available and affordable, the more people will buy your goods.

This concept works on an assumption that consumers prefer a product which is

inexpensive and widely available. This viewpoint was encapsulated in Says Law
which states ‘Supply creates its own demand’. Hence companies focus on
producing more of the product and making sure that it is available to the customer
everywhere easily.

Increase in the production of the product makes the companies get the advantage
of economies of scale. This decreased production cost makes the product
inexpensive and more attractive to the customer.

A low price may attract new customers, but the focus is just on production and not
on product quality. This may result in a decrease in sales if the product is not up
to the standards.

This philosophy only works when the demand is more than the supply. Moreover, a
customer not always prefers an inexpensive product over others. There are many
other factors which influence his purchase decision.

Example:

 Companies whose product market is spread all over the world may use
this approach.
 Companies having an advantage of monopoly.
 Any other company whose product’s demand is more than its supply.

More product quantity= more customers

3. Selling Concept

Production and product concept both focus on production but selling concept focuses
on making an actual sale of the product. Selling Concept focuses on making every
possible sale of the product, regardless of the quality of the product or the need of the
customer. The main focus is to make money. This philosophy doesn’t include building
relations with customers. Hence repeated sales are very less. Companies following this
concept may even try to deceive the customers to make them buy their product.

Companies which follow this philosophy have a short-sighted approach as they ‘try to
sell what they make rather than what market wants’.

Example: More sales=Better business

Examples of companies that use the selling concept are life insurance and timeshare
companies. Salespeople in these industries research their target demographic and
focus their advertising and promotion on the results of that research to sell as many
units of a product as they can to increase profits.

4. Societal Marketing Concept

Adding to the marketing concept, this philosophy focuses on society’s well-being as

well. The business focuses on how to fulfil the needs of the customer without affecting
the environment, natural resources and focusing on society’s well-being. This
philosophy believes that the business is a part of the society and hence should take
part in social services like the elimination of poverty, illiteracy, and controlling
explosive population growth etc.

The idea of the societal marketing concept is that the businesses should satisfy
the needs and wants of customers, but this target should be aligned with the long
term interest of society.

Example: Their needs + society first = better business

Coca Cola is the top soft drinks company, and Coca-cola is also
committed to the social-environmental responsibilities by providing products
across the world regardless of their ethnicities.

Adidas
Adidas is one of the top leading sportswear companies in the world.
When it comes to the environment, Adidas is committed to manufacture its
products that could be reused over and over again.

5. Marketing Concept

Selling Concept cannot let a company last long in the market. It’s a consumers market
after all. To succeed in the 21st century, one has to produce a product to fulfil the
needs of their customers. Hence, emerged the marketing concept. This concept works
on an assumption that consumers buy products which fulfil their needs. Businesses
following the marketing concept conduct researches to know about customers’ needs
and wants and come out with products to fulfil the same better than the competitors.
By doing so, the business establishes a relationship with the customer and generate
profits in the long run.

However, this isn’t the only philosophy that should be followed by all the businesses.
Many businesses still follow other concepts and make profits. It totally depends on the
demand and supply and the needs of the parties involved.

Example: I create what they need = better business

Examples include businesses that give to charities, change production

methods to meet environmental standards, or improve nutrition in products.
This concept may cost more in the beginning, but often increases customer loyalty,
satisfaction, and sales.