Product Development Product Development and Utilityand Utility

5.4 Notes5.4 Notes

Product Development & UtilityProduct Development & Utility

Product development adds value to the value Product development adds value to the value equation of a product (benefits-costs) by equation of a product (benefits-costs) by adding something called UTILITY.adding something called UTILITY.

Utility refers to what is added to a product to Utility refers to what is added to a product to make it valuable in the marketplace. make it valuable in the marketplace.

Form UtilityForm Utility

The relationship between a product or The relationship between a product or service’s form and its function. What the service’s form and its function. What the product is meant to do will often dictate product is meant to do will often dictate what it looks like.what it looks like.

Form and FunctionForm and Function

FormFormThe product’s “look” or the type of service providedThe product’s “look” or the type of service provided

FunctionFunctionWhat the product or service is intended to doWhat the product or service is intended to do

Components of form utilityComponents of form utilityMaterial, scent, flavour, colour, design, and Material, scent, flavour, colour, design, and

packagingpackaging

Components of Form Utility Components of Form Utility

• MaterialMaterial – new technology = new materials available – new technology = new materials available for productsfor products

EX: Teflon, titanium EX: Teflon, titanium

• ScentScent – new scents help increase consumer appeal – new scents help increase consumer appeal of a productof a product

EX: AromatherapyEX: Aromatherapy

• FlavourFlavour – natural (and artificial) flavours are often – natural (and artificial) flavours are often added to a product to increase consumer added to a product to increase consumer impressions of the product.impressions of the product.

Made with 2% Made with 2% OJOJ

Components of Form Utility (Cont)Components of Form Utility (Cont)

• ColourColour – consumers demand colour. Having many different – consumers demand colour. Having many different options is key. Colour also influences consumers perception options is key. Colour also influences consumers perception of a product.of a product.

EX: Bicycle design based on current colour trends in CarsEX: Bicycle design based on current colour trends in Cars

• DesignDesign – the design of the product is often the MOST – the design of the product is often the MOST IMPORTANT aspect of the product.IMPORTANT aspect of the product.

EX: Shape of cars identifies it as sports versus family carEX: Shape of cars identifies it as sports versus family car

• PackagingPackaging – the package of a product is the last line of – the package of a product is the last line of advertising. An appealing package design can help advertising. An appealing package design can help persuade the un-determined customer. persuade the un-determined customer.

Ex: Rethink BeerEx: Rethink Beer

Other types of UtilityOther types of Utility Information UtilityInformation Utility – provides consumers with instructions, – provides consumers with instructions,

directions, and user manuals of the product, which adds more value directions, and user manuals of the product, which adds more value to the product.to the product.

Place UtilityPlace Utility – when the product is in an easily accessible location – when the product is in an easily accessible location for the consumer to get, it adds value to the product. for the consumer to get, it adds value to the product.

• Easier the product is to find, the more place utility it has.Easier the product is to find, the more place utility it has.

Time UtilityTime Utility – when the product is available to the consumer when – when the product is available to the consumer when THEY want it, it adds value. THEY want it, it adds value.

• EX: 24/7 convenienceEX: 24/7 convenience• EX: On-line shoppingEX: On-line shopping

Possession UtilityPossession Utility – when an item is easy to purchase (based on – when an item is easy to purchase (based on income) it has value added to it. income) it has value added to it.

• EX: Payment Plans EX: Payment Plans • EX: Reduced price if you pre-pay.EX: Reduced price if you pre-pay.