Assessment of Skills and Knowledge(ASK) in Fundamental Business Concepts Practice Test

Promotion, layaway, and credit help create what type of utility?

1. Form

2. Time

3. Place

4. Possession

The correct answer is: Possession

The correct answer, which identifies the type of utility created by promotion, layaway, and credit, is possession utility. Possession utility refers to the value added to a product or service when a consumer has the ability to purchase and own it. When businesses utilize promotion strategies, they attract consumers by enhancing awareness and desire for a product. Layaway programs enable customers to reserve products and pay for them over time, making it easier for them to eventually own the item without an immediate full payment. Credit options, like loans or credit cards, provide another means for consumers to obtain products immediately while paying over a longer period, thereby facilitating acquisition and ownership in a manageable way. Together, these strategies remove barriers to ownership, thereby increasing possession utility. They transform a product from a mere offering into something the consumer can effectively acquire and keep, enhancing the overall experience of ownership.