When a company makes products available where they are convenient for consumers it creates which type of utility?

Four components – time, place, possession and form – make up the utility marketing model. Marketing models educate business owners, marketing and advertising professionals about consumer spending habits. Consumers purchase products for a variety of reasons. The utility marketing model takes into consideration how consumers feel about a product, the convenience of purchasing the product and obtaining the product when they want it.

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Four components – time, place, possession and form – make up the utility marketing model. Marketing models educate business owners, marketing and advertising professionals about consumer spending habits.

The Time Utility Component

Ensuring a product is available when the customer wants it adheres to time utility. Consumer demand for products varies depending on the weather, holiday season or everyday wants and needs. For example, the demand for warm coats increases during the winter, and the demand for Christmas, Halloween or Easter decorations increases when these holidays approach, while the demand for soda and other soft drink products may remain the same throughout the year because customers can drink these products at any time.

The Place Utility Component

Place utility is the value consumers put on where they purchase products. Stores make it easier for the consumers to purchase items, as opposed to driving to a factory or warehouse where the products are manufactured or stored. Consumers find what they need in a place conveniently located near home or work.

The Possession Utility Component

Possession utility is the value consumers put on purchasing a product and having the freedom to use the product as it was intended or finding a new use for the product. For example, many people use flower pots for planting, but these pots have other uses such as storage for small objects found around the house or as a centerpiece for the dining room table.

The Form Utility Component

Form utility is the value a consumer sees in a finished product. Consumers purchase items such as furniture, electronics or vehicles in part because the consumer is incapable of finding and putting all the parts together to create the product. The customer sees value in the finished product, or the form created by each product part.

Importance of Utility Marketing

Understanding consumer demand allows you to make better business decisions. For example, determining when to increase production and inventory allows you to meet increased demand during specific times of year. Pinpointing which regions sell the most products or the types of retail outlets, including department stores or discount stores, that sell the majority of your inventory helps when determining how much inventory to send and where to send it. Understanding why consumers value your products helps you create more effective marketing campaigns.

Drawbacks of Utility Marketing

Since consumers purchase products for reasons other than the four types described in utility marketing, business owners should not rely solely on this method. Consumers make these decisions based on emotion, necessity, boredom or the need to compete with others.

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