Which utility is created by making a good or service available when customers want and need to purchase it?

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By Indeed Editorial Team

Published March 8, 2021

There are many strategies that companies can use to convince consumers to buy their products. One of the primary methods marketing teams use to connect with customers is by identifying the ways that a product could be useful to their target audience. This concept, known as marketing utility or utility-driven marketing, helps marketers decide on a marketing angle based on the various ways a customer could benefit from making a purchase.

In this article, we explain the idea of utility-driven marketing and explore the types of marketing utility to consider when preparing a marketing plan.

What is marketing 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. Also known as the utility marketing model, marketing utility involves identifying the needs of a particular consumer group then finding ways to align business activities with those needs.

Marketing utility involves discovering how to integrate a product into a customer's lifestyle by emphasizing how it can solve a problem related to the consumer's needs. A good marketing utility strategy can help identify what factors influence consumer buying habits and integrate those elements into advertising campaigns.

Businesses use marketing utility on a product level by highlighting the different ways each product can enhance a consumer's life and on a brand level by associating the company itself with certain types of usefulness.

Why is utility important in marketing?

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.

Related: What Is Usability?

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.

Related: Guide to Distribution Channels

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.