Total utility is the overall satisfaction a consumer receives from a product, including both initial and additional satisfaction. Measuring it is subjective, and understanding the law of diminishing marginal utility is important. Companies can increase total utility by educating consumers on the versatility of their products.
Total utility is the cumulative degree of satisfaction a consumer receives from consuming a specified product. Because this type of utility is comprehensive, it includes both the consumer’s initial and direct satisfaction, as well as the marginal utility or additional satisfaction that is gained from the purchase. Typically, consumers tend to focus their attention on goods and services that offer the highest degree of total utility, rather than similar products that may offer less in terms of personal satisfaction.
It is important to note that total utility is a subjective phenomenon. Two consumers who buy the same product will not necessarily receive the same level of satisfaction from the consumption of that product. For this reason, measuring total utility can be somewhat difficult, making it necessary for producers to rely heavily on consumer feedback on derived benefits and whether that total utility is likely to generate additional purchases.
Understanding total utility involves understanding what is sometimes known as the law of diminishing marginal utility. Essentially, this concept states that each time a consumer uses a product repeatedly, the degree of satisfaction obtained decreases slightly. For example, a very thirsty individual can receive immense satisfaction from drinking a glass of water. A second glass of water is likely to bring some satisfaction, but not as much as the first. At some point, the individual is no longer thirsty and therefore does not receive any further satisfaction from subsequent glasses of water.
The idea of total utility has sometimes been presented as a means of taking into account customer satisfaction from the first moment of purchase until the last round of consumption. This approach often motivates companies to develop marketing campaigns that educate consumers about the many ways their products can be used, thereby increasing their value to customers and hopefully increasing satisfaction or utility. Food producers tend to use this strategy by developing meal plans and recipes featuring their products, demonstrating the versatility of their products, and providing consumers with inspiration on how to get the most out of the product, above and beyond its originally intended function.
Likewise, pharmaceutical companies sometimes conduct ongoing research as a means of discovering additional health situations where a particular drug can be used to effectively treat various conditions. An example is bupropion, which is not only useful in helping people overcome tobacco dependence, but can also be effective when used as an antidepressant. Likewise, alprazolam has been found to be useful not only in treating anxiety disorders, but also as a treatment for agoraphobia and several other social phobias that often accompany anxiety. By providing information about the full usefulness of these drugs, manufacturers increase profits by providing products that are useful to more people.
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