Question

Identify the three kinds of utility and describe each one briefly.

Answer 1

The concept of 'utility' is very crucial in the field of behavioural economics or business marketing strategy.The success or failure of a business to much extent depends upon the same.Utility refers to the want satisfying capacity of any good or service.It refers to the value or the benefit or the satisfaction that a consumer gets after consuming any units of a goods or services.There are many types of utilities,which together helps to maximise the customer satisfaction.The 3 important among them are being discussed here:-

a)Form utility:It mainly refers to the utility derived from the design,the physical features and the psychological aspects of any goods or services that is being rendered to the customer.Success or failure of any product to much extent depends upon the form of the product or service.It includes the ease of operating,lower costs,productivity,installation involved in the usage of any product.This is customer centric as in order to make decisions a lot of research is done to ascertain the consumer preferences,choices,that can be best suited for them.

b)Place utility:This mainly includes the utility involved in providing the correct product or service at correct place,which should be easy and smooth for purchasing at convenient locations.In simple words,it aims to make the product or service accessible/available to the vicinity or most convenient locations where consumers can easily buy it.This is also important as any product is manufactured at any specialised location but the consumers are spread over a wide geographical area.It mainly involves two decisions i.e.regarding the physical movement of products from producer to the consumers and the channels involved in the  distribution process.

c)Time utility:This is concerned to the availability/accessibility of any product or services to the customers at right point of time in correct form.Once again we know that time is the most significant factor.A product or service is required by a customer at different point of time and if it is not fulfilled at the time of requirement then the concerned product or service is of no use.The utility of any goods or services can be maximised at the time of requirement only,so major policy decisions needs to be taken to ensure this.