Utility And Types Of Utility

           UTILITY  :

                       Utility can be defined as the amount of satisfaction expected to be derived from the consumption of good or service at a particular time. it is the power or capacity of a good to yield satisfaction. utility is a subjective concept and that is the reason it differs to person to person,time to time and place to place.

           TYPES OF UTILITY :

                                 some of the types of utilities are 1.form utility

                                                                                     2.place utility

                                                                                     3.time utility

                                                                                     4.possession

           FORM UTILITY :

                        The process of increasing the attractiveness  of the product to a group of consumers by altering its external appearance. in a business context, from utility might involve making a product ready for consumption by converting it to a form that is more beneficial to consumers than the raw materials used to make it.

     Ex: Carpenter changed the wood into chair which creates the form utility.

           PLACE UTILITY :

                         This utility is created by transporting goods from one place to another. Thus, in marketing goods from the factory to the market place, place utility is created. Similarly, when food-grains are shifted from farms to the city market by the grain merchants, place utility is created.

             TIME UTILITY :

                          Storing, hoarding and preserving certain goods over a period of time may lead to the creation of time utility for such goods e.g., by hoarding or storing food-grains at the time of a bumper harvest and releasing their stocks for sale at the time of scarcity, traders derive the advantage of time utility and thereby fetch higher prices for food-grains. Utility of a commodity is always more at the time of scarcity. Trading essentially involves the creation of time utility. 

  

             POSSESSION UTILITY :                          

                          The utility of possession refers to the benefit customers derive from ownership of a company's product once they have purchased it.

 

                 Ex:  if a company sells mobile, then it offers customers an added value in listening to music, games etc.  Offering favorable financing terms toward ownership is another way a company might choose to improve the value of possessing its products.