What is form utility?


Form utility is the final form of utility presented to the customer by a finished product. The value presented by service or object is perceived as greater than the sum of its parts.


The prices of most goods are not determined solely by the sum of their parts. The value a customer places in a service or object plays a big role in determining the final price. Form utility stands for what a complete product or an object means for the customer.

Furniture is not perceived solely as raw wood, but rather as a complex design put together by skillful carpenters and given an artistic value in addition to physical functionality. Form value can be expressed in a variety of ways, ranging from visual appeal to answering a customer’s specific need for functionality, to saving time and money that would have been otherwise wasted without the product.

Different companies pursue different kinds of form utility strategies. Products in the affordable segment of the market seek to provide it at the lowest cost possible, attracting customers with minimal sought functionality. Highly-functional products are on the other end of this scale, providing a multitude of options and maximizing efficiency of actions, often at a high price.

Luxury products operate using perceived customer value, being presented as symbols of status rather than defined solely by the materials they were made of or their functionality. Apple products could be used as examples of the latter two utility forms, combining high functionality with the status of a brand item. The latter explains why the price for these gadgets is way above similar products offered by competition, despite the latter being on par or superior in terms of fulfilling customer needs.

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