What is marketing? Explain various functions of marketing.

Q. What is marketing? Explain various functions of marketing. 

Ans. MEANING OF MARKETING: Marketing is a comprehensive term and it includes all resources and set of activities necessary to direct and facilitate the flow of goods and services from the producer to the consumer. Marketing is providing the right goods and services to the right people, at the right place, at the right time and at the right price with the right communication and promotion.

The concept of market gives us the concept of marketing. Marketing is a broader concept which includes all human activities in relation to the market. It includes product planning and development, buying and assembling, pricing and discounting, distribution and selling, branding and packaging, standardization and grading, transportation and warehousing, promotion and advertising, financing and risk bearing, analysis of market in terms of its present and potential customers.

In the words of Philip Kotler, “Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging goods with others.”

According to Richard Buskrick, “Marketing is an integrated system of action that creates value in goods through the creation of form, place, time and ownership utilities.”

FUNCTIONS OF MARKETING: Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer. These activities are called marketing functions. 

According to Clark and Clark, “A marketing function is a major specialised activity performed in marketing.”

According to Converse, Huegy and Mitchell, “A marketing function is an act, operation or service performed in the process of distributing goods and services.”

A brief explanation of marketing functions is as follows: 

(A) RESEARCH FUNCTIONS: The success of marketing depends upon the fact that how much we are able to understand the needs of our customers and to produce accordingly. The research functions are: 

1. Marketing Research: Marketing research is the systematic search for and analysis of facts related to a marketing problem. It has become one of the most important functions of marketing in modern times. Marketing research is the intelligence service of the organisation. It helps in analysing the buyer’s behaviour, relative popularity of product, effectiveness of advertising media, pricing policies, packaging and grading policies, distribution structure, strength and weaknesses of the competitors etc. 

The major task of marketing research is to provide the marketing manager with timely and accurate information about the change in nature of consumer’s demand, changing position of supply, prices prevailing in the market, attitude of consumers towards price of the product, sales incentive/promotion schemes, availability of substitutes, potentialities for increasing the sales, market trends, etc.

Nowadays marketing research is not only fact finding and information gathering activity but it is a problem solving and action recommending function of marketing.

2. Product Planning and Development: Product planning and development are two important functions of marketing. Product planning is a process in which the type, form and design of the product is determined on the basis of informations obtained with the help of marketing research. It is the starting point of every marketing programme. It is a pre production activity through which a marketeer try to fill the gap in the market demand and generate revenue out of it. Successful marketing depends on the efficient manufacturing of the product, matching with the interest of consumer, his assumptions and choices etc. 

Product development begins with the conception of idea to its successful commercialisation. The product must be so designed and developed that it meets the requirements of consumers. Product development involves decisions regarding colour, shape, style, size, quality and other features in order to arrive at a want satisfying product, which will give maximum satisfaction to the consumer and optimum profit to the manufacturer.

Product planning and development involves a number of decisions, such as, what to produce or buy, how to have its packaging, how to fix its price and how to sell it. 

This function of marketing includes new inventions, changes in product, elimination of product, determining the level of production and many other decisions regarding products of the company. Thus, product planning and development is an important function of marketing. The main objective of this function is to provide want satisfying products to the consumers which increases their welfare and standard of living. 

(B) EXCHANGE FUNCTIONS: In marketing, exchange means transfer of ownership. It involves two separate functions i.e. buying and selling. Both buying and selling are complementary to each other and not the contradictory. It is also known as merchandising functions, this include the activities which are conducted for creating the demand and making the products available in the market.

1. Buying and Assembling: Buying is the most important function of marketing, because it is carried out by all marketeers: the manufacturers, the wholesalers, the retailers etc. A manufacturer has to buy raw materials for production; a wholesaler has to buy products to sell them to the retailers; a retailer has to buy products to be sold them to the consumers.

The success of a marketer depends on his efficiency to buy the products of customer’s choice at competitive prices. Buying as a marketing function involves many activities such as:

(i) Determination of requirements 

(ii) Finding the sources of supply,

(iii) Placing the order and

(iv) Receiving the products.

Assembling is also an important function of marketing along with buying. Assembling has two different meanings. Firstly, assembling means creation and maintenence of stock of products, purchased from different sources at a common point. This is generally done by middlemen. This gives a chance to the buyer to select the products of his choice. Secondly, raw materials accessories and spare parts are purchased and assembled in order to produced finished goods and services.

2. Selling: For many persons selling means marketing, because selling is an indispensable part of marketing. The purpose of all marketing activities is to sell the products of the firm. Selling enables the firm to achieve its objectives by satisfying the needs of the customers. Nowadays, selling has become a very complicated function of marketing. A marketer has to develop such a marketing strategy that help him to sell his products.

Under selling, a marketer has to perform several functions such as:

(i) Determining the potential customers,

(ii) Persuading them to buy the products,

(iii) Creating demand for the products,

(iv) Selection of channel for distribution, and 

(v) Market research, advertisement, salesmanship and other sales promotional activities are widely used to create demand and increasing the sales.

(C) PHYSICAL DISTRIBUTION FUNCTIONS: These functions are related with creation of place and time utilities. Physical transfer of goods from the manufacturer to consumer take place by the means of transportation and storage. Followings are the physical distribution functions of marketing:

1. Transportation: Transportation is the physical means of carrying products from one place to another. It plays an important role in marketing. Business and transport are like twin brothers. With the development of one, another also develops. Transport helps in assembling and dispersing the products. It links together the manufacturers and the consumers who are located at different places. By carrying the products to such places where they are needed, it creates place utility. Transport also helps in widening the market area. 

Marketing system requires an economical and effective transport systems. There are different means of transportation, such as: (i) Road Transport, (ii) Rail Transport, (iii) Air transport, (iv) Water Transport and (v) Pipeline. The firm can use any mode of transport depending upon their requirements. Large scale production, specialisation, emergence of national and international markets increases the importance of transportation as a marketing function. Now, most of the companies uses their own means of transportation which ensure safe and timely delivery and also act as mode of advertisement. Take the example of Coca Cola, Pepsi, LG, Nirma, Bisleri, Pizza Hut, etc.

2. Storage and Warehousing: Storage is another function of marketing and it involves the holding of products in proper condition from the time they are produced until they are demanded by the consumers. When production is seasonal but consumption is perennial or when production is continuous but consumption is seasonal, storage becomes necessary. Moreover, the goods produced in advance have to be stored by the manufacturers till their demand arises. Nowadays storage function has been performed at different levels by manufacturers, wholesalers, retailers and professional warehouse-keepers.

Warehousing is also an important function of marketing. Warehousing is an act of storing goods that will be sold or distributed later. Warehouse is a place where the products can be stored safely. Warehousing is a necessary business activity to carry on production and distribution on a large scale. Warehouses help the marketeers to make the supply of the product elastic, which result in price stabilisation. Moreover, storage and warehousing create both time and place utilities. 

Marketing managers are taking special interest in the storage and warehousing function, because a slight lapse in storage may destroy the commodity and may cause heavy loss to the company. Owing to this reason the large size companies maintain their warehouses near the markets and keep their goods property stored. Many companies are using this strategy, for example, Hindustan Lever Ltd., Bata, Godrej, etc. 

The importance of storage and Warehousing can be judge from the following facts:

(i) Storage of some products increase their value and price. For example: rice, tobacco, liquor, etc. if storage for long time, will get more.

(ii) Some produces like tea, coffee, seeds require curing and processing before they are ready for sale. Hence, in this case storage is necessary.

(iii) Agriculture products are produced seasonally like: wheat, rice, grams, etc. but they are required for consumption throughout the year. Hence, storage is necessary for buffer stock.

(iv) Storage and Warehousing also helps in price stabilization, elasticity of supply, grading, packaging, risk minimising and financing.

3. Standardisation and Grading: Standardisation means setting standard of quality. It assures quality and promote uniformity of products. It also widens the market of the product. Standardisation assures the customers that the goods are pure and uniform in quality and performance. Generally, there are four bases for determining standards:

(i) Quality,

(ii) Quantity,

(iii) Measurement and

(iv) Size. 

It facilitates purchase and sale of products, because in case of Standardization/standard products, goods are purchased by their brand name. Industrial products are given brand names by their manufacturers to convey to the users that their products confirm to certain well deined standards. In actual practice various standard form are used by the marketers for their products such as (i) ISO, (ii) ISI, (iii) AG mark, (iv) Quality Mark, etc.

Grading means separating the products according to established standards. Each grade has uniformity in all attributes. The products are so grouped in accordance with predetermined standards, therefore, grading follows standardisation. Granding starts where standardisation ends. Both are closely related activities. Buying and selling becomes easier. Grading is very common in spices, food grains, fruits, milk products, petroleum products and other agricultural products, according to their size, quality, colour, taste, strength, juice contents, etc. Both buyers and sellers are benefited by standardisation and grading function of marketing.

(D) FACILITATING FUNCTIONS: Facilitating functions make the marketing process more esay and systematic. Facilitating functions are supporting activities to the marketing process. These are:

1. Branding: Agricultural products and mining products need grading whereas manufacturered products need branding. 

The main aim of branding is to identify the products of the company from similar products of the competitors. It enables the consumers to differentiate the product of similar types and to make their choice of products among the various brands. The brand ensures the quality and standard of the product. It helps the company in creating an image for its product in the market. 

Now, branding has become an important marketing function because a good brand name ensures success in the market. Branding helps in the distribution of products in a wider market. Hence, branding is an essential part of marketing. There are many popular brands. For example, LG, BPL, Tata, Bata, Nirma, Godrej, Lakme, etc. 

2. Packaging: Packaging is concerned with formulating container or wrapper for the product. Its main objectives is to provide convenience in handling, ensure freshness and quality and to prevent adulteration. It also helps in distinguishing the product of the company from that of competitors.

With the evolution in packaging materials and packaging technology in designing the package, the packaging has become an important function of modern marketing. Packaging plays an important role in buying decisions by the consumers. Consumers like good package products. Manier times, products are demanded because of their good looks and useful packages. Packaging acts as a multi-purpose arrangement such as:

(i) it gives protection to the product,

(ii) it acts as a silent salesman,

(iii) it facilitates more sales,

(iv) it ensures quality,

(v) it helps in advertising,

(vi) it increases the standard of living,

(vii) it ensures price stabilization and

(viii) handling convenience.

All these factors prove that packaging is an inseparable part of modern marketing. Infact, packaging boosts the sales, majority of products we consume in our daily life comes in packaging.

3. Pricing: Determining the price of a profuct is an important function of marketing. A sound pricing policy is an important factor for selling the products to the customers. The price policy of a firm should be such that it attracts all type of customers. Price policy of the company directly affects the profit element and successful functioning of the company.

Nowadays, marketers have to decide so many prices, for example:

(i) Wholesale price,

(ii) Retail price,

(iii) Unit price,

(iv) Prices for foreign markets or international pricing, and

(v) Resale price maintenence policy.

Price of the is now used as a competitive weapon by the marketers. In a close substitute product market, fixation of proper price is must. Any wrong decision in pricing the product may cause heavy loss of demand for the product. In determining the price of the products, several factors are to be kept in mind such as:

(i) Cost of the product,

(ii) Services offered,

(iii) Profit margin desired,

(iv) Competitor’s price,

(v) Government policy,

(vi) Marketing policies,

(vii) Marketing objectives,

(viii) Demand for the product, etc.

Pricing function includes pricing, discounts, allowances and terms of credit.

4. Financing: Finance is the life and blood of all economic activities. It is very difficult to carry on marketing activities smoothly without the availability of adequate and cheap finance. Nowadays, most of the marketing departments arrange themselves, finances for marketing activities. A marketing department arranges finance in two ways:

(i) By accepting advances from the wholesalers for supply of goods, but it is only possible when there is a seller’s market.

(ii) By accepting fixed deposits in lieu of granting agencies/authorized dealership/franchisee to sell the company’s products. Huge amount is collected in this way.

5. Advertising: Modern age is the age of advertising. There is hardly any product or service which goes to the consumer without advertising. That is why, nowadays, advertising is considered as the main function of marketing. Generally, customers have no knowledge about the new products launched in the market. Therefore, it is possible that until the customer is not duly informed about the product, its quality, price and the place where from it can be purchased, etc., he will not buy the same. This information is supplied with the help of advertisement.

The responsibility of advertising lies with the advertising department but in many cases this responsibility is shared by the marketing department. He takes the decision about the advertising budget, message, media selection and looks after the advertising programme and sales promotion activities like distribution of free samples, gifts, sales literature, launching sales incentive schemes, arranging sales contests, displays, participation of company in fairs and exhibitions etc. In the modern times without advertising marketing is not possible. Hence, advertising have also become an important function of marketing.

6. Risk Bearing: Business world is full of risks. Unforeseen conditions and uncertainties give rise to risks. Marketing of goods involves number of risks. A marketer has to face risk due to:

(i) Change in demand,

(ii) Change in fashion,

(iii) Fall in price,

(iv) Competition,

(v) New inventions,

(vi) Change in habits and tastes of consumers,

(vii) Change in technology,

(viii) Losses from spoilage, depreciation and obsolescence,

(ix) Losses from fire, theft, accident,

(x) Losses from natural calamities, etc.

That is why, it is said that marketing is a risk-bearing activity.

It is very difficult to eliminate all the risks completely. Some of the risks can be avoided by taking precautionary measures, for example, risk of fire, theft, etc. There are certain risks which can be minimized through proper planning and forecasting. For instance, risk bearing due to change in demand, price, fashion, technology and tastes of the consumer can be minimised through proper marketing research. Competition risk can be avoided through business combinations. Marketing department of the company is responsible for managing the risks. Hence, risk bearing is also an important function of marketing.

7. After Sales Services: Nowadays marketing functions do not end on sale. Rather, they continue even after sale as the marketer provides number of after sales services like home delivery, guarantee and warrantee, free repair services, financing facility, etc. These services improve the standard of marketing functions.