Unit 1: Business Essentials - Lesson 1.2 Business in Action

Key Topics

1. Five Types of Utility
2. Consumer Market vs. Business Market
3. Consumers vs. Customers

Utility in Business

• Definition: Utility, or economic utility, refers to how a product or service fulfills a consumer's need by adding usefulness or value.
• Five Types of Utility:
  • Form Utility: Making a product more useful, like transforming raw materials (e.g., iron to steel products).
  • Place Utility: Offering products/services in convenient locations (e.g., nearby boba shop).
  • Time Utility: Availability of goods/services at convenient times (e.g., opening a coffee shop earlier).
  • Information Utility: Providing information about a product/service (e.g., advertising phone features).
  • Possession Utility: Easier acquisition of products (e.g., offering credit or international shipping).

Market Types

• Business Market (B2B): When customers buy products for business use (e.g., buying beads for bracelet making).
• Consumer Market (B2C): When customers buy products for personal use (e.g., buying an apple or getting a haircut).

Consumers vs. Customers

• Consumer: The person who uses the product.
• Customer: The person who purchases the product.
• Example: Buying a gift - the buyer is the customer, the recipient is the consumer.