What is Form Utility?

Definition: Form utility is an economic concept that identifies the value obtained by consumers from products designed in the most convenient ways for them. It is the idea that a product or service is more valuable for the consumer if the way it is presented and modeled matches is actual needs.

What Does Form Utility Mean?

Form utility involves the transformation of raw materials into finished goods. Companies that sell products that produce form utility normally don’t just sell components by itself, they assembly and process these components, chemicals or elements to develop products that are specifically manufactured to meet certain need. The form that the product takes is the source of its value for the consumer, in this particular concept. There are many elements that shape the form utility of a product. How the products are packaged and displayed to customers is particularly important since a proper display can create a form utility in itself.

For example, beverages sold in small size presentations are perfect to fit the needs of consumers that are occasionally thirsty, as opposed to big-size presentations that are more suitable for family gatherings or group meetings. There are other elements like comfort, technical specifications, size, weight, color or shape that can be changed to increase the form utility of goods.

Example

Mug Designers Co. is a company that designs coffee mugs for commercial and domestic purposes. The company is in the process of designing a new product line and the Product Development Team is concerned about how to increase the form utility of the company’s products. By using past market research reports they obtained information about the most crucial elements that customers considered useful or desirable in a coffee mug. They identified color, shape and size as the essential ones.

This information allowed the team to establish clear goals about the product line’s width, which means the number of new products designed in different presentations. They established 5 different color sets for each mug, with 3 different sizes and 10 different shapes. After doing the math, the team calculated 150 different mugs to be designed to increase the form utility of the product line.