com a genuine business opportunity Products provide customers with four types

Com a genuine business opportunity products provide

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that this kind of service would meet customer needs made Amazon.com a genuinebusiness opportunity.Products provide customers with four types of utility or benefit: 1. Time utility . The value to a consumer of having a good or a service available at a convenient time. A concessionaire selling bottled water at a summer concert is making liquid refreshment available when it’s needed. 2. Place utility . The value to a consumer of having a product available in a convenient location. A street vendor selling hotdogs outside an office building is making fast food available where it’s needed. 3. Ownership utility . Value created by transferring a product’s ownership. A real estate agent helping a young couple buy a home is transferring ownership from someone who doesn’t need it to someone who does. 4. Form utility . The value to consumers from changing the composition of a product. A company that makes apparel is turning raw material (fabric) into a form (clothing) that people need. A company that produces liquid detergent, rather than powdered detergent, is adding form utility for some consumers. How can you decide whether an idea provides utility and has the potential to become a business opportunity? You should start by asking yourself the questions in Figure 10.4 "When Is an Idea a Business Opportunity?" : if you can’t come up with good answers to these questions, you probably don’t have a highly promising product. On the other hand, if you conclude that you have a potential product for Chapter 10 Product Design and Development 10.3 Identifying Business Opportunities 538
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which people would pay money, you’re ready to take the next step: analyze the market to see whether you should go forward with the development of the product. Figure 10.4 When Is an Idea a Business Opportunity? KEY TAKEAWAYS An idea turns into a business opportunity when it has commercial potential—when you can make money by selling the product. Time utility provides value by having a product available at a convenient time. Place utility provides value by having a product available in a convenient location. Ownership utility provides value by transferring a product’s ownership. Form utility provides value by changing the composition of a product. Chapter 10 Product Design and Development 10.3 Identifying Business Opportunities 539
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EXERCISE (AACSB) Analysis Provide two examples of each of the four types of utility: time, place, ownership, and form. Don’t use the examples given in the book. Chapter 10 Product Design and Development 10.3 Identifying Business Opportunities 540
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10.4 Understand Your Industry LEARNING OBJECTIVE
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