Providing the right products and/or services to a company’s customers at the right time, usually as per their convenience, is the primary aim of implementing time utility. Using it, an organization is able to identify the appropriate time when the company should expand the production facilities as well as implement precise and impactful marketing campaigns so as to drive sales.
Availability of products at almost all the times (like on national holidays, adverse weather conditions, peak demand, etc.) is ensured by time utility which increases and adds to the level of customer satisfaction.
during summer seasons, the demand for cold drinks skyrockets and is increased substantially. In order to ensure that the customers of the company are getting the desired products, the beverage manufacturing organizations ramp up their production facilities so as to meet the surge in consumer demand.
Advantages of Time Utility
Being a widely followed concept by several business organizations across the world, time utility provides a variety of advantages, such as:
Increased Revenue: With efforts laid on better availability of products or services, time utility helps a business organization to increase its sales, which ultimately helps to enhance revenue and improves profitability.
Better Brand Awareness: By ensuring that the customers can get the products at the right time, businesses tend to increase customer satisfaction as they derive value from the organizationâ€™s products and services. This leads to better recognition of the organizationâ€™s products in the market and creates a buzz for the organization leading to improved prospects of brand awareness.
Ability to Obtain Cheap Credit: An increase in the overall production facilities leads to better sales, and an organization is able to achieve the benefits of economies of scale. This helps to obtain credit facilities at a cheaper rate lowering the interest rate burden of the company, which ultimately strengthens and improves the financials.
Disadvantages of Time Utility
Time utility promises to provide customer satisfaction, but in a quest of doing so, business organizations have to conquer and face a variety of business challenges, such as:
Increases Overall Business Risk: Business organizations operate in a dynamic business environment, which is often marred by a variety of challenges, such as:
Legal and political factors
Changes in customerâ€™s tastes and preferences
Natural calamities, etc.
Since time utility prompts to increase the production facilities, there is always an inherent business risk of overproduction, which could lead to:
Enhanced warehousing costs and storage expenditures
Increased chances of pilferage, theft, and product obsoleting
Enhanced manufacturing cost
Promotes Aggressive Advertising: Since the goods manufactured are required to be sold to the consumers, it prompts business organizations to indulge themselves in aggressive marketing as well as advertising, which leads to a faster and higher cash burnout.
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