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Economic Utility and the Value Chain

Economic Utility and the Value Chain. Marketing Roseville Area High School. Utility – The value that a business adds to a product. Form Utility. Changing raw materials or putting parts together to make them more useful. Zipper, thread, cloth jacket. Place Utility.

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Economic Utility and the Value Chain

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  1. Economic Utilityand the Value Chain Marketing Roseville Area High School

  2. Utility – The value that a business adds to a product

  3. Form Utility • Changing raw materials or putting parts together to make them more useful. Zipper, thread, cloth jacket

  4. Place Utility • Having a product where customers can buy it. Retailers, internet, outlet malls, catalogs

  5. Time Utility • Having a product available at a certain time, when customers want it. • 24 hours, holidays

  6. Possession Utility • Exchanging a product for some monetary value (alternatives to cash) Plastic, extending credit, buy now pay later

  7. Information Utility • Communication with the consumer. Displays, packaging, web sites

  8. How do the following businesses add value to their materials (inputs)? • Revlon states that they do not test their products on animals • Wells Fargo locations in Cub foods • Dentist office open on Saturdays • A car dealership with 0% financing • Turkey store now has taco-flavored meat

  9. Key Concept • Businesses add value to materials through a value chain of activities. • The role of business in society is to add value to materials. • Customers pay for the VALUE that the business adds to the materials. • Review: What are the 5 types of utility (value) that businesses can add to materials?

  10. Economic utility (value) is added at each step in the value chain.

  11. Value Chain • VALUE CHAIN – The process a business uses to transform materials into products that have value for customers.

  12. If you have a job: • What place do you have in the value chain? • How do you add value to materials for your business? • Draw the value chain for your business (list in order each activity that adds value). • Is there anyone in your business who is NOT directly in the value chain?

  13. What does this have to do with marketing?

  14. Aviation Weather.gov • How does this government service add: • Form utility • Place utility • Time utility • Possession utility • Information utility

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