Time Utility - Definition, Importance & Example
What is Time Utility?
Time Utility is a concept in marketing which says that providing customers with products or services at the right time exactly when they want them irrespective of any other variation or parameters. Many companies educate their business, marketing and advertising professionals about the customer purchase behaviour and needs of the consumers which create a utility function. There are total four types of utilities which are form, possession, place and time. Time utility is dependent on the aspect of time and 'when' the product or service is required.
Importance of Time Utility
Understanding the consumer demands is very important while making important business decisions. It will help the company decide when to increase the production of goods and inventory and when to run their important marketing campaigns. That said, company should not only rely on these methods to make the decisions because there are many other reasons which makes the consumer demand.
Time Utility is providing the consumer his desired goods at the time when he requires them. Depending upon the everyday needs, holiday season or weather conditions, consumer demand will vary. Ensuring that the goods are delivered to the consumers at the right time forms the time utility.
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Time Utility Example
Demand for cold-drinks often increase during the summer season and hence companies like Coco-cola and Pepsi increase their production and advertising during this peak period.
Similarly demand for blankets, woolen garments will increase during winters so the manufacturers need to make sure that customers get them during the peak winter season.
There are other similar examples as well like umbrellas or energy drinks.
Hence, this concludes the definition of Time Utility along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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