Place Utility - Meaning, Importance & Example

Published by MBA Skool Team, Last Updated: August 08, 2021

What is Place Utility?

Place utility refers to the utility created for the product by the virtue of its location. The attractiveness of a product can be increased by changing its physical location. If we talk in marketing terms the product should be available at the place where it more accessible to the consumers. There are many examples like these e.g. Swiss Watches, German Cars where a place is associated with a product or service adding utility.

Importance of Place Utility

The place utility plays an important role because sometimes the decision whether to buy a product or not is decided by the location or availability of the product. The easily the product is available to the consumer, higher are the chances that consumer will buy it. The companies are trying their best to spread their distribution channel & making their product available to the consumer in all possible retail formats.

Transportation is widely used to move a product from one place to another and adds time & place utility to the product.

Example of Place Utility

One example can be availability of water and other drinks near marathon venues or other sporting events. this is one way to look at place utility. Other utility is for example, swiss chocolates. They are associated with Switzerland as a place but they are in demand everywhere so the availability at other places increases the revenue and also strengthens the brand.

Hence, this concludes the definition of Place 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.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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