Utility & Buying Motives

Utility

Utility – the added value in economic terms created by the functions of marketingFormPlaceTimePossession Information

Form Utility Involves changing raw materials into

usable goods or putting parts together to make them more useful

Place Utility

Involves having a product where customers can buy it

Time Utility

Having a product or service available at a certain time of year or a convenient time of day

Possession Utility

Exchange of a product for money Accepting alternative to cash

ChecksDebit cardsLayawayCredit cards

Information Utility

Involves communication with the consumer

Types of Markets

Market – all people who share similar needs & wants and who have the ability to purchase a given product

Consumer Market – consists of consumers who purchase goods & services for personal use

Organizational Market – business-to-business market includes all businesses that buy products for use in their operations

Client versus Customer

Customer: a person who purchases goods or services from another

Client: a person or group that uses the professional advice or services of a lawyer, accountant, advertising agency, architect, etc.

Customer Buying Motives

Buying motives: reasons a customer buys a product

Rational Motives: conscious, logical reasons for a purchaseProduct dependabilityTime or monetary savings.Product qualityGood customer service

Customer Buying Motives

Emotional Motives: feelings experienced by a customer through association with a product Social approval Fear Power Love Prestige

Patronage Motives: reasons for remaining a loyal customer of a company

Routine Buying Decisions

Used for purchased that are made frequently and do not require much thoughtFamiliar with products

Limited Buying Decision

Take more time than routine buying decisions

Associated with a product that is more expensive or is purchased less frequentlyBuying jeans

Extensive Buying Decisions

Occurs when the consumer methodically goes through all five steps of the decision-making processPurchasing a carNot made lightly