Functions of Marketing

On the basis of functional approach classification of the marketing activities can be made in the following manner.

A. Exchange Function

The function involves three activities, I.e. Buying, Assembling and Selling.

➤ 1. Buying and Assembling

Buying is the one part of exchange process, other being the selling. Buying is the first step in the process of marketing. A manufacturer has to buy raw materials for production; a wholesaler has to buy goods to sell them to the retailer, a retailer has to buy goods to be sold to the consumer. Buying involves transfer of ownership of goods.

Assembling means creation and maintenance of the stock of goods, purchased from different sources. The goods have sometimes to be collected and assembled at one place. This is generally done by middlemen.

Buying and assembling are two distinct processes. Both these processes involve elements such as kind, quality, price, date of delivery and other terms and conditions. All these require specialized knowledge on the part of the buyers.

➤ 2. Selling

Selling is important from the point of view of the seller as well as the consumer. The profit making object of a business concern is achieved only through the sale of goods. After industrial revolution and increasing use of machinery, mass production has become possible, which in its turn, requires mass selling of goods. This function involves product planning and development, creation of demand. Market research, selection of channel of distribution, negotiation of terms of sale such as quality, quantity and price of product, etc.

B. Physical Supply

This function relates to the process of transporting the goods from the place of seller to the place of buyer and includes two main functions:

1. Transportation

2.  Storage and Warehousing.

➤ 1. Transportation

Transportation is the movement of goods from the center of production to the center of consumption. Marketing system requires an economical and effective transportation system. A good system of transportation increases the value of goods by the creation of place utility. The opening of new markets have been possible by the quick transportation and communication. It has resulted in the extension of markets, regular supply, lower price, and improved services to the consumers.

➤ 2. Storage and Warehousing

When production is seasonal but consumption is perennial or when production is continuous but consumption is seasonal, storage becomes necessary. Storage involves holding and preserving of goods between the time of their production and the tome of their consumption Storage tends to adjust the supply or demand of the product and also holds the price line. Thus, storage can be regarded as a function of equalization. It creates time and place utilities.

C. Facilitating Function

These functions make the marketing process easy and include standardization and grading, branding and packaging, insurance, financing, information, marketing risk, market research and advertising, sales promotion and pricing.

➤ 1. Standardization and Grading

Standardization has been accepted as an ethical basis of marketing. A standard is a measure that is generally recognized as a model for comparison. Standards are determined on the basis of colour, weight, quality, and other factors of a product. It facilitates purchase and sale of goods. Goods are purchased by brand name.

Grading is the act of separating or sorting out goods into a number of grades according to established specification such as quality and size of the product. Grading is required for the products like food grains, fruits, cosmetics, etc.

➤ 2. Branding and Packaging 

Branding is the art of marketing. It is the measurement of giving a particular name, term, sign or symbol to a product/service for specific identification of one seller or group of sellers. This identification creates consumer awareness, which in turn helps to build good product image and enhance chances of repeat purchases. A brand is essentially a sellers promise to provide specific features, benefits and services consistently to the buyers.

Packaging is also an effective marketing tool which helps in bringing the success of a company’s product in market. It is an activity of designing the container or the wrapper for the product for its protection and identification. Packaging also facilitates the sale of a product by marketing the product more attractive and catchy. A good package system necessitates a number of steps like deciding the packaging concept, developing new package designs and package testing, etc.

➤ 3. Risk Bearing

Marketing of goods involves innumerable risks due to theft, deterioration, accidents, natural calamities etc. which are insurable risks; the most important factor responsible for the non-insurable risk is fluctuation in prices, The other factors may be change in fashion, competition in the market, changes in habits in the consumers, etc.

Businessmen have to foresee in the business risks and take concrete steps to avoid such risks like insurance and hedging. Still the there are risks which are to be borne by the businessmen.

➤ 4. Financing

 It is very difficult to carry on marketing activities smoothly without the availability of adequate and cheap finance. Finance is required to keep sufficient stock in anticipation of demand, which involves the use of capital to finance the marketing agencies like middlemen and wholesalers in their various activities. Commercial banks, co-operative credit societies, and government agencies arrange for the short term finance, medium term finance and long term finances. Trade credit is also one of the important sources of finance.

➤ 5. Market Information

Information of market information has been recognized with the extent of markets and mass production. Decisions on marketing are based on information regarding market conditions. In fact, marketing research has now become an independent branch of marketing. Marketing information system is a set of procedures or methods for planning, analyzing and presenting proper information, which is used in making clear market decisions.

➤ 6. Marketing research

Marketing research today is one of the important functions of marketing required by decision maker. The decision marker has no direct contact with the market and therefore timely and accurate information is needed. The market needs and desires must be determined. It is important for the development of goods and services. After these, goods and services are marketed, the marketing research effort must measure the extent to which the market’s needs and desires are actually being satisfied.

Marketing research gives full information regarding market, economy, government, culture and technology:

Marketing research provides sufficient information in respect of the following:

1. Information to the producers regarding market trends.

2. Information of prevailing prices to strengthen their bargaining position.

3. To promote the order in marketing by achieving effective distribution and fair pricing of products.

4. To avoid waste in marketing and non-marketing activities.

Reasons for population of marketing research:

1. It enables to find out selling product and has enabled the wheels of modern large scale industry to keep moving.

2. It enables to identify customers and their needs, likes and dislikes, etc.

3. It enables forecasting of future performance and situation.

4. It helpful product improvement.

5. It finds out the ways and means of cheaper distribution.

6. It avoids wastes and failures.

➤ 7. Advertising

Advertising is major means whereby the market is informed of the existence and availability of a particular and services that can satisfy the needs and desires of the consumers. Advertising uses various non-personal sources, such as television and magazines, to the market and to purchase of products and services.

A number of important responsibilities are carried out by individuals in advertising. These includes:

1. Determining the size of the advertising budget (appropriation).

2. Choosing the media to (For example, newspapers, magazines, television).

3. Developing copy (what the advertising message should say).

4. Choosing and working with advertising agencies.

5. Testing the effectiveness of advertisements.

➤ 8. Sales promotion

activity of the marketing is related with creating the demand for the product, promotion helps in persuading the buyers to favour the firms and its products, by spreading the information about the product or service throughout the market.

Promotion includes all those functions which are related with marketing of a product and all other activities designed to increase sales and extend the market. Sales promotion is also undertaken to increase sales directly

With the help of personal selling and publicity through the media of press or poster advertising, distributing of free samples or giving seasonal discounts are also one of the important activities of sales promotion.

➤ 9. Pricing

Pricing is another major functional area of marketing. Pricing is one of the important elements of marketing mix that generates profits. Some the of the important decisions to be made by those who are responsible for pricing include the following:

1. Deciding on basic objectives for prices.

2. Deciding on a basic approach to price setting. For example, are prices for products to be generally established because of the costs they incur or are they to be related to the demand in the market?

3. Placing a specific price on each product.

4. Deciding if and when these specific prices are to be changed.

5. Putting prices on new products.

6. Establishing markup, markdown and discount policies.

7. Ensuring that pricing policies adhere to legal requirement.