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| Functions of Marketing |
The primary goal of marketing function is exchange of goods and services to maximize the satisfaction of customer. Marketing function begins from identifying the needs of customers and ends with satisfaction of these needs. The main function of marketing primarily includes buying, selling, transporting, storing, standardizing and grading supply chain management, advertisement and media management, financing, risk taking and securing market information It can be broadly classified into three
- Exchange functions
- Supply chain functions
- Utility functions
1. EXCHANGE FUNCTIONS
BUYING
Buying primarily involves decisions on what to buy, what quality, how much, from whom, when and at what price. Buying decisions are highly influenced by demand and supply for the product. The buying function is carried out by all the entities in the marketing chain. Manufacturers buy raw materials from their supplies, distributors, retailers buy from wholesalers buy from distributors, retailers buy from wholesalers and customers buy from retailers, this may vary depending on channel or distribution. Entities in the marketing chain are influenced by quality, service and price. The products that the retailers buy for resale are purely on the basis of the need and preferences of their customers.
SELLING
The core objective of selling is to facilitate sales. Selling is concerned with the persuasion of prospective buyers to actually complete the purchase of a product or service, in other words transfer of ownership. The volume of sales has a direct correlation with the profits of the business concern and therefore it plays an important role in realizing the ultimate aim of earning profit. Most of the marketers use personal selling, advertising, publicity and sales promotion and other techniques to enhance the volume of sales.
PRICING
Pricing of products or services play a vital role in marketing and as it directly impacts the profitability of business. The success of a product or service vastly depends on its pricing, and it is not always easy to get the pricing right. If the price is too high demand will reduce and you as a marketer may price yourself out of the market. If your price is too low, your sales volume may not generate enough revenue to cover the costs associated with your business. Therefore, it is very important to get the pricing right.
ASSEMBLING
It is important to note that assembling and buying are separate functions, assembling starts after the goods have already been purchased. Buying mainly involves transfer of ownership of the goods, whereas assembling involves creation and maintenance of the inventory of goods purchased from different sources. In assembling goods are usually procured from various sellers or suppliers and then assembled at one place under the control of the buyer. Thus, buying and assembling are two different processes.
2. SUPPLY CHAIN FUNCTIONS
TRANSPORTATION
The success of distribution in marketing system depends upon an economical and effective transportation system. It is important to note that availability of resources required by industries such as labor, raw materials are scattered or concentrated in certain geographical regions and in order to integrate these resources transportation plays an instrumental role.
The main purpose of transportation is to enhance the value of goods by the creation of place utility. The development of various kinds of transportation has led to opening of new markets.
STORAGE
Storage refers to the holding and preservation of goods until they are dispatched to the consumers. Storing or warehousing is very significant in marketing and aims at protection of the quality and quantity of the stored products. The purpose of warehouse is to compensate for the time difference that arises due to the time gap between production and consumption of products, therefore warehousing fills this gap by creating time utility. Need for warehouses arise also because some goods are produced only in a specific season but are demanded throughout the year. Similarly, certain products are produced throughout the year but demanded only during a specific season.
RETAILING
The word retailing has its origins in the French verb “retailer”, which means “to cut up”, and refers to one of the fundamental retailing activities which is to buy in larger quantities and sell in smaller quantities. A retailer is an intermediary in the marketing channel who actually plays a dual role of marketer and customer, retailers play a special role as they interact with both consumers and producers. Retailers provide a value addition for the consumers by ways offering convenient shopping locations, market information and other services such as free parking privileges, tutorial on product use and after sale service which facilitates the sales of products and creates higher utility from consumption.
STOCK MANAGEMENT
Inventory or stock management is a significant function of marketing and reflects the health of the supply chain and as well as impacts the financial health. Every organization constantly strives to maintain optimum inventory to be able to meet its requirements and avoid over or under inventory that can impact the financial figures. Effective management of inventory plays a major role in deciding marketers' potentials to function with good profit margins. High inventory turnover ratio indicates that a company is efficient in managing its inventories and is having high sales. Holding too much inventory can occupy space and incur significant costs. On the other hand, shortage of inventory can lead to catastrophic slowdown across the supply chain, affecting many other downstream companies.
STANDARDIZATION AND GRADING
Standardization helps the marketers keep the costs low and target many potential customers. It also brings in uniformity in establishment of certain standards or specification for products in terms of quality and quantity. E.g., color, shape, appearance, material, taste, sweetness, etc. government may also set some standards e.g., in case of agricultural products. A standard conveys a uniformity of the products. Grading involves classification of standardized products into certain well-defined classes or groups. It involves the division of products into clauses made up of unit processing similar characteristics of size and quality. Grading of products creates a trust in customers.
3. UTILITY FUNCTIONS
FINANCING
The financing function of marketing deals with providing credit facilities to all the entities involved in the marketing channel such as distributors, wholesalers, retailers and customers. The services of providing the credit and money needed to meet the cost of getting merchandise into the hands of the final user is commonly referred to as finance function in marketing. In marketing, finances are needed for working capital and fixed capital, which may be secured from various sources such as – commercial banks, Lending institutions both organized and un-organized and trade credit (provided by the manufacturers to wholesaler and by the wholesaler to the retailers).
CUSTOMER SERVICE
In order to manage customers, marketers must be concerned with the entire experience a customer derives from using the products or services offered by the marketer. Customers seek value directly from the use of products or services they buy. Customer’s buying experience covers the entire purchasing experience and is a combination of product and non-product benefits.
MARKETING INFORMATION
Marketing information is using the management information system designed to support decision making in marketing. In order to ensure success of marketing decisions the marketing decisions should be based on correct and timely market information. True facts and information minimize the risk and results in cost reduction. The marketing department should collect, analyze and interpret facts and information from internal sources, such as records, salespeople and findings of the market research department. They also collect data and information from external sources, such as business publications, government reports and commercial research firms. Proper research and effective market information will ensure accurate and effective decision making which is essential for the success of marketing plans.
PROMOTION
Promotion helps marketers create and increase brand awareness, provide information about the products and services, increase volume of customers and build sales and profits. Promotion is one of the major “tools” used in marketing. Promotion attempts at influencing the customer to purchase the product or service. Promotion can be in different forms such as personal selling, advertising, sales promotion and public relations. Each of these are equally important, as they each have their own unique features that determine the role they play in promotion.
