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Question
Product is a bundle of utilities. Explain.
Solution
When a customer decides to buy a product, his/her main focus lies on the utility which he/she receives while consuming it. A customer seeks different types of satisfaction from the product. Benefits derived from a product can be of three types- functional benefits, psychological benefits, and social benefits. For instance, when a consumer purchases a car, it provides him functional utility as a means of transport. Besides, he also receives a psychological benefit in the form of pride and self-esteem that he has bought a car. Along with it comes the social benefit in the form of acceptance by peers. Thus, a product is said to be a bundle of utilities, and a buyer while buying a product values all such kinds of utilities.
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