Marginal utility: understanding, type, example and how it works

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Marginal utility understanding type example and how it works

Marginal utility: understanding, type, example and how it works

Marginal utility understanding type example and how it works

The company looks for the level of customer satisfaction with their products. Some target audiences can be broken down into various segments, but marginal marginal utility marginal measures customer satisfaction when they buy more certain product units. You must consider your current brand state to find out where you can increase the scale of your business and encourage new customers and sales of your products.

In this article, we explain what marginal utility, type of marginal utility, how it works, and also for example in marketing strategies.

What is Marginal Utility?

Marginal utility or marginal utility is the term economy that measures the benefits of customers in buying services from an organization. The increasingly reduced marginal utility law illustrates how the benefits or utilities of the product have the opposite effect on the number of contemporary units they already have.

The marginal utility of a product can be based on customer perceptions of a brand that influences their decision to remain loyal to him or see similar products made by different companies because of their level of satisfaction.

Furthermore, marketers need to work develop a strategy that keeps demand remains high for products and services even though the marginal utility decreases.

Marginal utility type

There are various types of marginal utilities used when assessing customer satisfaction, including:

Marginal utility zero

If the customer decides to buy more goods, their satisfaction remains constant. Buying many newspapers or magazines is an example because you can save it for reference, but it has the same value as the first copy because it is identical.

You need to be committed to serving customer needs to create a positive experience for them, so you can increase their satisfaction no matter how many of the products they buy. Social media and email marketing make your customers stay involved with your product and can affect marginal utility depending on the feedback you receive.

Positive marginal utility

Marginal positive utility is when customers are satisfied and buy some units of your product. They can provide reference to your product’s advantages to friends, family, or colleagues depending on how much they like the product and the efforts they do in displaying brand loyalty to the public.

Influencers can play an important role if they buy your product in bulk and show it in social media channels and their website.

Negative marginal utility

Marginal negative utility is when customers buy too many products, and get to the point where they can only use several units in a certain period. This can happen if the customer buys foods that are easily damaged in large quantities, but they can only consume some at the time the expiration date arrives.

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You must ensure that customers can use your products as well as possible to increase their chances of buying from you in the future.

Example of marginal utility

Let’s review the example of a marginal utility to help you understand this concept:

Budi currently has five bottles of soda, and he decided to buy a sixth bottle when he went shopping. On the other hand, Josh has 60 bottles of soda and decided to buy a bottle of soda again because he save the rest in the fridge at home.

To find a marginal utility for Chris and Josh, you need to divide the amount of purchase they do for a product with the number of products they have today.

For Chris, you have to divide one with six, so he increases his soda supply of 16.6666667% with just one purchase.

For Josh, for one with 61, because of the calculation factor in the extra bottle he bought, and you will get 0.016393344. In other words, Josh’s marginal utility is 1.6 or 2% if rounded, so Chris has a greater chance to be satisfied with the purchase of one soda even though the fact he only has six soda.

Tips for using a marketing strategy to increase marginal utility

Marginal utility not only shows the benefits you produce, but customer satisfaction taking into account the number of units they buy. Here you can use marginal utility calculations to improve the relationship you have with your customers:

Engage with your customers on social media

Customers can send messages directly to you if they want to express their opinions about your product, but you have to get involved with them to see if they are still planning to buy more units from you after the purchase they do now.

The better the relationship you build with customers, the greater your chances of increasing marginal utility. Adjust your conversation with the person’s message, but you want to pay attention that the targeted demographics use a different platform.

Collect data from the survey

Surveys can be displayed in e-mail messages if customers subscribe to your email list. It is recommended that you try hard to make users fill out the contact form on your website.

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After you get all their contact information, you can send surveys via email to find out the feedback they have and you will know exactly the products they buy from your business. You can also measure their interest in buying the same product again or if they want to buy a product that is different from you.

Consider running an advertising campaign

Pay per click (PPC) campaign attracts additional exposure to your website if you buy the right keywords available through search engines. They can open your website, click the hyperlink and navigate to your contact form page to give their opinions, so you can measure their customer satisfaction.

Another effective way is to design your website having an icon that asks customers whether they buy your previous product. If so, they can click the icon and it will display a survey as an item of action they must fill.


That is the discussion of the marginal utility that is useful in measuring your success in marketing the product or service you provide.

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