The Core Utility of a product is its most functional, practical, aspect in solving a need of a customer. For a car its transportation. For a restaurant its food. For a house its shelter. The core utility delivers upon the most basic promise of the product, it fulfills the most basic need the purchaser has. The identification of your core utility allows you to discover all possible competitors, substitutes, and complements for your product. If a marketer only fulfills the basic needs of a prospect they ignore, and leave unfulfilled, the want and desire elements people demand. The want and desire elements are provided by the product’s Secondary Offering.
The combination of the Core Utility and the Secondary Offering create the basis of a Value Proposition and a Positioning Statement. Simply stated, a value proposition is a descriptive summary of the features and resulting benefits that will satisfy the needs, wants, and desires of your prospect. It answers the question as to why someone should buy. The Value Proposition is the basis of the product’s Positioning Statement, or how it compares and is different from its competitors.
Here are some examples:
Product: Take Out Pizza – Core Utility: Food.
Substitutes: Cook at home. Go hungry (i.e. “Do nothing”). Sit Down Restaurants. Other Take Out food shops.
Secondary Offering: 1) Quick, Home Delivery. 2) Anxiety Relief – Everyone likes pizza, therefore there’s no need to guess what you should make for dinner. 3) Convenience, no need to cook.
Value Proposition: Hot, Pizza Delivered to Your Door in 30 Minutes or Less.
Product: Long Distance Parcel Delivery – Core Utility: Transportation.
Substitutes: Bus Service. Standard Mail. A very large pigeon.
Secondary Offering: Time, Certainty
Value Proposition: Overnight Delivery summed up by the tag line “When it absolutely, positively, has to get there before 9:00 AM”
As you see in these examples, there are a number of possible substitutes or competitors for the product or service, but the tipping point as to WHY a customer chooses you is provided by the Secondary Offering as it compares to competitive offers. In example 2, the Post Office recognizing that not all packages absolutely, positively, need to be there before 9:00 am but rather only need to be guaranteed delivery, offer a 2 – 4 business day CERTIFIED delivery service.