Personal Selling – Meaning and Personal Selling Process

Q. What is Personal Selling ? Write a detail note on personal selling process.

Ans. Meaning of Personal Selling: Personal Selling is an important part of the promotion mix. It is an important and most effective method of selling. It is the process of assisting and persuading a prospective buyer to buy a product in a face to face situation. It is a major promotional tool used to increase profitable sales by offering wont satisfying products to the customers. 

It renders valuable services to consumers, producers and the society. It is a effective form of direct sales promotion, involving face to face relationship between sellers and the potential customers. The objective is not only to sell the product but also to make permanent customers. Personal sellings is very much essential for the survival and growth of business. 

According to Richard Buskirk, “Personal selling consists of contacting a prospective buyer of a product personally”.

Personal Selling Process: Selling process is the sequence of steps involved in the conversion of human desire into demand for a product or a service. It is purely a psychological process because, the mind of a customer runs through certain mental stages before he makeup his mind to buy a product or service. The selling process differs from salesman to salesman. There are certain steps involved in the personal selling process for the conversion of human desires into demand for a product or service.

The process of personal selling consists of the following steps: 

Personal Selling Process

Pre-Sale Preparations

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Prospecting for Potential Customers

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Pre-Approach

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Approaching

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Presentation

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Demonstration

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Overcoming the Objections

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Closing the Sale

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Follow up

1. Pre-Sale Preparations: The first step in personal selling is the preparation of sale persons. The sales persons must be properly selected,  trained and motivated for the job. Before going in the field, it is essential for the salesman to prepare thoroughly on all the important aspects of selling. He must know who are the prospective customers, what are their problems and solution to their problems. He must know the relative strengths and weaknesses of the product as compared to his competitor’s product. He must know about himself, his company, his product and about the need and desires of the consumers. He should prepare himself about competing brand, the competing products, competitor’s marketing strategies and his selling strategy. Prior knowledge of its product, Company and competitors constitute the essence of pre-sale preparations. 

2. Prospecting For Potential Customers: Prospecting in personal selling refers to the process of acquiring basic demographic knowledge about the potential customers (i.e. prospects) for the product or services. Prospecting generation consists of obtaining names and addresses of persons, who may turned out to be prospects. Prospect is the person, who has wants to be satisfied and has ability and willingness to buy. 

In this step, the sales person prepares a list of potential customers and tries to identify who really needs the product and has a purchasing power and willingness to purchase. Its purpose to locate the potential buyers and to avoid those who appear to be unprofitable and to make sure that the sales efforts should not be wasted. It should always be remembered that everyone is not a prospective customer.

The prospective customers can be discovered from various sources such as the company’s sales records, customer’s information requests from advertisements, other customers, newspaper announcements, public records, telephone and trade directories, lists of trade associations, past and present customers, etc. 

3. Pre-Approach: Before calling on the prospective customers, the salesperson should try to get information about their nature and behaviour. He must possess the detailed information relating to prospective customers with regard to their education status, income, occupation, their preferences, personality traits, products they are using, brands they are buying, likes, dislikes, etc. This information will help in approaching the prospective customers and making presentation in a better way. Following are the objectives of pre-approach:

(i) To obtain maximum information for planned presentation. 

(ii) To save time and energy.

(iii) To select the best approach to meet the perspective customers. 

(iv) To meet the prospective customers with confidence and enthusiasm. 

(v) To provide additional information.

(vi) To avoid serious mistakes.

4. Preparation: This step also includes a preparation made by the sales person. He must be well dressed, well informed and well equipped with sample of products, sales literature, etc. It also involves the training of sales persons, making them well acquainted with the product, market trends and techniques of selling. Some more information should be given to them about the prospective customers so that he is able to communicate precisely (exactly/accurately) with the prospective. A travelling salesman must get an appointment to meet the prospective customer.

5. Approaching: Approaching the customer means taking the initial contact with the prospective customer. This is the most critical step because the customer’s first impression about the sales person may be a lasting impression that has long-run consequences. This step is based on AIDAS formula. 

Before doing anything else, the sales person must introduce himself and his products to the prospective customer. He has to attract attention of prospective customer to his product. Selling process cannot be developed further as long as the customer is not attracted and ready to give due attention to the sales talk. He should be very polite while approaching and must make the customer realise as to how the product will benefit him, so that he may not have much difficulty at the time of presentation.

A counter sales person should also approach the customer properly to gain his attention. He should make the customer feel that he is getting undivided attention. If the sales person is busy with some other customer, he should assure the new customer that he would be attended very soon. The prospective customer is convinced that he will be rewarding to spend time with him. He should treat the customer and make him feel at home. 

There are four prime methods for approaching the customer:

(i) Reference approach: When the sales person uses the reference letter to approach the customer.

(ii) Introduction approach: When the sales person uses his identity card or visiting card. Give his self introduction and introduces the company under which he is engaged. 

(iii) Product approach: In this, salesperson puts his products before the customer when he meets him. 

(iv) Customer benefit approach: The sales person explains the benefit which a customer can obtain from the product or dealing with the company. 

6. Presentation: Before making presentation, a salesman should try to understand the nature, need and spending power of the customer. The presentation should be such that the customer takes continuous interest in the product. He must be curious to know more about the product, its features, its merits etc. 

The first step in the sales presentation is to get the attention of the customer towards the product. Attention can be drawn by using the following tricks:

(i) Mentioning the names of mutual friends or well known persons. 

(ii) Placing the product sample or visual aids before the customers.

(iii) Allowing the customer to touch, hold or actually use the product. 

(iv) Complementing the customer on the appearance of his store, office, plant or residence.

(v) Demonstration about the use of the product.

Once the customer’s interest has been obtained, the next step is to arouse the interest in his product. The sales person should clearly explain the functions of the product, how it is better than other brands, how it is used, its price, etc. His emphasis is on the benefits of the product to the customer rather than on technical specifications. The success of the sales person depends upon the attitude of the buyer.

7. Demonstration: The next step in the process of personal sharing is giving demonstration. It is the best method of presentation. Through demonstration the customer can be satisfied that the product will satisfy his needs. Demonstration creates desire for the product. The process of demonstration also includes the involvement of the prospective customer. He may also be informed of the special features, merits and benefits of the product. 

The sales person can also show the survey reports, photographs, catalogues, related materials, relevant data, referring to specific problems in other products, free gifts, consumer benefit schemes, etc. The customer must be convinced and interest to possess the product must be aroused. “You and not I” attitude must be followed. 

8. Overcoming the Objections: After demonstrating and explaining the product, its features, price, benefits, etc. the sales person should entertain certain queries from the customer. Queries and objections should not be considered to be an unpleasant task. A sales person should realise that it is the golden opportunity to convince and persuade the customer. This also gives him a chance to give some additional information about the superiority of the product over the competitive products in the market

The sales person should handle these queries, doubts and objections with full confidence, intelligence, enthusiasm and patience. He should not feel irritated by the queries and should never argue with the customer white handling doubts even though the customer disagrees violently and persistently. He should write time and again to convince the prospective customer to buy the product. 

9. Closing the Sale: This step is the climax of the selling process. It aims at taking an order for the products from the prospective customer. A sales person has to act with patience and intelligence to close the sale. He can employ a trial close by which he can judge the customer’s willingness to buy the product. 

A sales person must know the right moment at which the sales story can be closed.  When he is convinced that the customer has made up his mind to buy the product, then he should close the sale by asking questions: What design have you decided ? Which colour have you decided ? Do you want this gift wrapped ? What else would you like to buy ?, etc. 

The sales should be closed in such a manner that the customer feels that he has made the right choice. A sales person should reassure the customer that he has made the right choice. The customer should also be reassured of better services in future. 

10. Follow-up: The next step in the process of personal selling is follow up. It removes all the posts-sales problems. It also provides feedback from the customers. Follow up action refers to the activities undertaken to ensure the customers that he has taken the right decision of buying the product. These activities include: execution of order as per the specifications agreed with the customer, installation of product (if required), checking and testing its smooth performance, maintenence service,  etc. After sale services should be quick, punctual and satisfactory. 

Factors Affecting Price Determination & Price Setting Process (Easy notes)

 Q. What factors do affect the price determination of a product? Briefly explain the process of price setting in practice.

Ans. Pricing is an art of translating the value of the product or service into quantitative terms (i.e. rupees) by the marketing manager before it is offered to target consumers for sale. Pricing decisions should be consistent with the marketing objectives of the company. For determination of prices of its products the management must have to take a number of factors into consideration. The influencing factors for a price determination/decision can be divided into two groups, such as:

FACTORS AFFECTING PRICING DECISIONS 

A. INTERNAL FACTORS: Internal factors are those which are well within the control of the company. Internal/controllable factors are as follows:

1. Pricing objectives: The objectives set for pricing affect the decision regarding fixation of price for a particular product. Firms may have a variety of objectives such as price stability, sales maximisation, target return on investment, meeting the competition, survival, etc. Pricing decisions should be made only after proper consideration of pricing objectives.

2. Cost of production: Cost plays an important role in the pricing of the product as both have a close relationship. Cost of production serves as the base for price fixation. Whatever may be cost of production, the price is one at which the seller is prepared to sell and the buyer is prepared to buy.

3. Marketing Mix: Price is one of the important elements of marketing mix and therefore must be coordinated with the other elements: production, promotion and distribution. Any change in price will have an immediate effect on the other three elements. 

4. Product Differentiation: The price of the product also depends upon the characteristics of the product. In order to attract the customers, different characteristics are added to the product, such as quality, size, colour change, attractive package, alternative uses, etc. Generally customers pay more price for the product which is of the new style, fashion, better package etc.

5. Organisational considerations: Pricing decisions are occur at two levels in the organisation. It is the top management which generally has full authority over pricing. The marketing manager’s role is to assist the top management in price determination and administer the pricing within policies laid down by the top management. The top management sets the guidelines within which the price is to be administered and determine the price range within which the actual price is dealt at lower level.

However, in some companies, some authority is granted to subordinate executives for setting prices, especially where pricing varies in different markets or where ther are numerous products and frequent pricing decisions are required.

6. Product life cycle: Pricing decisions are affected by the stages of product life cycle. As the product follows a number of stages i.e. introduction, growth, maturity, saturation and decline. The price which is relevant in one stage may not necessarily be relevant in the next stage and therefore it requires price administration during each stage.

In the introductory stage, the prices are kept low so that the product can easily penetrate the market. As the sales increases and the product reaches the growth stage, the prices can be raised to a certain extent. During the maturity stage, the prices are either kept at the same level or lower down to face the competition. In the declining stage, prices are further reduced to maintain demand.

B. EXTERNAL FACTORS: External factors are those which are generally beyond the control of the company. These are as follows:

1. Product Demand: Product demand has a great impact on pricing. Since demand is affected by many factors, such as: number of prospective buyers, their preferences, their capacity and willingness to pay, number of competitors, what they are charging for similar products, etc. Therefore, these factors must be taken into consideration while fixing the price.

2. Elasticity of demand: Price elasticity of demand also affects the pricing decision. Price elasticity means a relative change in demand due to certain percentage change in price of the commodity. If the demand of product is inelastic, high price may be fixed. Contrary to it, if demand is elastic, the firm cannot fix high prices rather it should fix lower prices than that of competitors.

3. Competition: No manufacturer is free to decide his prices without considering competition unless he has monopoly. Competition is a crucial factor in price determination. While determining the prices, a marketer must know the pricing objectives, policies and strategies, strengths and weaknesses of the competitors. This also helps to know the possibilities of raising or lowering the prices. Even in monopolistic conditions, the manufacturer has to consider the competition with that of substitute products while deciding the price of his product. For example, if price of scooter increases, the consumers will shift towards motorcycle. Number of competitors and their sizes also affect the price decisions.

4. Economic conditions: Economic  environment of the country is an important factor affecting the pricing decisions. Inflationary and deflationary conditions affect the pricing. In recession period the prices are reduced to a sizable extent to maintain the level of turnover. On the other hand, the prices are increased during the boom period to cover the increasing cost of production and distribution. To meet the changing economic conditions, several pricing decisions are available, such as:

(i) Prices can be boosted to protect profits against rising costs;

(ii) Price protection system can we linked with the price on delivery to current costs;

(iii) Emphasis can be shifted from sales volume to profit margin and cost reduction, etc.

5. Government regulations: The government of the country influences the pricing policies in a number of ways. Government regulates the prices of the products, it makes available services it renders to the community like electricity, transport, railway, postal, etc. Government interference in the form of taxes and fixation of prices , influence the pricing decisions. Like other marketers, government also sells necessity goods through its fair price shops such as sugar, rice, kerosene oil, atta, etc.

Government happens to be the largest employer and the buyer in the economy affecting the pricing system. Government has framed different laws to restrict price hikes, artificial scarcity, consumer exploitation, and monopoly tendencies. These are MRTP Act, Essential Commodities Act , Consumer protection Act and so on. The prices cannot be fixed higher, as government keeps a close watch on prices in the private sector. 

6. Consumer behaviour: The behaviour of the consumers and users for the purchase of a particular product, do affect pricing, particularly if their number is large. In other words, the composition and behaviour of consumers have a great impact on pricing decisions. For example, if the consumers are small users, though large in number as in case of daily needs consumer products, they do not have much influence on pricing decisions. On the other hand few consumers , but large users have considerable influence on the pricing decisions.

The pricing decisions are also affected by the fact Whether the consumer is an individual industrial user or a household user. The firm cannot have the same price policy for both the classes of consumers. Buying pattern of the consumers also plays an important role in prisoning of a product. If the purchase frequency of product is higher, lower prices may be fixed, resulting in higher sales along with the higher overall total profit. 

7. Distribution channel: A number of intermediaries exist between the manufacturer and the final consumer. Each of them charges for their services, which ultimately adds up to the cost of the product. Therefore, longer the distribution channel, higher will be the price of the product and vice-versa. If due attention is not given on this factor, it might happen that the price of a product may become so high that the consumer might reject it. 

8. Suppliers: Suppliers of inputs, especially raw materials and fabricated parts have great impact on the price of a product. If the suppliers raise the price, it will lead the manufacturer to increase the price of the product, which will ultimately affect the consumers. The scarcity or abundance of the raw material also has considerable influences on the final pricing decisions.

9. Market position of a company: Besides the above, there are a number of factors which directly or indirectly influences the pricing decisions. Such as: social and ethical considerations, consumers’ reactions towards rising prices, wage rates, productivity, trade customs, speculation, etc. 

Thus, the above are some important factors which affect the pricing decisions of a company. The marketers obviously can exercise substantial control over the internal factors, while they have little control over the external factors.

PROCESS OF PRICE SETTING IN PRACTICE 

There is no specific procedure applicable to all forms for price determination. Generally , the following procedure may be followed. 

1. Select the target market: The very first step for determining the base price of a product is to select the segment or segments, where the marketer wants to pursue. The demographic and psychographic characteristics of the selected segment will effect the pricing decision.

2. Identify the potential customers: The potential customers are those who will pay the price for a product. They are therefore, the focal point in price determination. It is short-sighted (narrow or limited way of thinking) to select a pricing policy or strategy without first identifying those people whom the pricing plan is supposed to affect. The buying motives, paying capacity, location, price sensitivity, consumer’s prior attitude about the marketer and his brand, etc. of the potential customers will have considerable effect on price determination.

3. Estimate the demand: Each price level gives different levels of demand. Higher the price, lower will be the demand. Estimating the demand for an established product is easier than for a new product. There are two steps in estimation of demand:

(a) Knowing the expected prices.

(b) Determining the sales volume at various prices. 

Expected price refers to price range. Surveys may be conducted of potential buyer or competitor’s prices may be studied or the product may be tested in limited area to know the expected prices. After knowing the price range, sales volume at different prices are estimated. The product with elastic demand will be priced lower than the product with an inelastic demand. For example, the increase in the price of convenience products say salt may not affect the demand. Contrary to it, the increase in price of speciality products say scooter may affect the demand level.

4. Anticipate competitive reactions: After estimating the demand of the product, competitive situation in the present and in future should be studied because present and potential competition also influences the price determination. Competition may come from three sources: 

(i) Competition directly from the substitute products: For example, a scooter manufacturer has to face a competition from the other manufacturers of scooters.

(ii) Competition from the substitute products: For example, a scooter manufacturer has to face a competition from the manufacturers of motorcycle.

(iii) Competition from unrelated products: For example, a scooter manufacturer has to face a competition from the manufacturer of small cars, air-conditioners and consumer durable seeking the same consumer’s disposable income.

Estimating the future competitive situation is more important, when the production of the product can be started with low initial capital and the profit margin is quite attractive. The marketer should study the competitor’s product, price, promotional competition either by reducing the prices or by entering into new market segments.

5. Establish expected share of market: The next step is to determine the market share which a company will try to capture. Low priced products may capture a larger share of the market and a high priced product may capture a small share of market. Larger share of the market can also be captured by adopting promotional techniques and by going for non-price competitive strategy. For deciding the market share, the market share should not be fixed beyond the production capacity of the plant.

6. Select pricing strategy: Keeping in view the marketing objectives in mind, a suitable pricing strategy should be selected. There are two main pricing strategies for pricing the new product.

(I) Skimming Pricing: It is a strategy in which prices are kept high with a view to skim the cream of demand. It is possible when the product has distinctive features or when there is no competition and the consumers are not price sensitive. Later on, the firm can easily lower down the prices to attract other segments of the market.

(II) Penetration Pricing: It is a strategy in which prices are kept low with a view to capture large market share. This strategy is useful when consumers are price sensitive, there is a fear of competition and the cost of production goes down with the increase in sales of production.

Both these strategies have their own merits and demerits. The company has therefore, to select the best suitable strategy.

7. Consider company’s marketing policies: In the next stage of price determination process, the product policies, the distribution policies and the promotion policies of the company must be considered.

(i) Product policies: The price of the product is more influenced by the nature of the product, i.e., whether it is a new product or an old product, perishable product or durable product, consumer product or industrial product. Perishable products which cannot be stored for a long period are priced low to facilitate its easy disposal. The change in fashion also forces the marketer to price the products at a level so that they get disposed off before the fashion changes. 

The composition of product, its quality, durability, resistance to heat, light, water, breaking strength, shrinkage, etc. also affects the prices. Product mix is also one of the consideration.

(ii) Distribution policies: The nature of channels used and the gross margin requirements of the middlemen influence the pricing decisions. The length and complexity of the distribution channel greatly influence the price. The long and more complex channel, higher will be the price and vice-versa.

(iii) Promotional policies: The more the promotional activities undertaken, higher will be the price. Because expenses incurred will have to covered from the price.

8. Select the specific price: After considering all the above facts ultimately a specific price is selected. The selection of a specific price vary under different market conditions. The price may be determined through the forces of demand and supply or by cost of production or on the basis of competition prices. 

There is no readymade formula for fixing the prices. It requires a lot of experience to have a good pricing decision after following the procedure. The price must be fixed by watching the interest of all the parties i.e. a fair return on investment to manufacturer, a good profit margin to middlemen and a fair price to consumers.

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.

Buyer Behaviour & nature of Indian Consumers buying behaviour

 Q. What is buyer behaviour? What is the nature of Indian Consumers buying behaviour? 

Ans. MEANING OF BUYER BEHAVIOUR: Buyer behaviour is known as consumer behaviour. The whole behaviour of a person while making purchases may be termed as consumer behaviour. It is an attempt and prediction of human action in the buying role. Understanding the consumer behaviour of the target market is the essential task of marketing management under the modern marketing concept. 

Consumer behaviour consists of both physical as well as mental activities. The study of consumer behaviour provides a sound basis for identifying and Understanding consumer needs. The study of consumer behaviour is concerned with consumer's buying behaviour rather than actual consumption. 

According to Schiffman and Kanuk, The study of consumer behaviour is the study of how individuals make decisions to spend their available resources (I.e. time, money and efforts) on consumption-related items. It includes the study of what they buy, why they buy, when they buy, where they buy, how often they buy it and how often they use it. 

Thus, consumer behaviour includes the acts of individuals directly involved in obtaining and using goods and services including sequence of decision decision processes that precede and determine these acts. Also, it is necessary to study the consumer behaviour for sound marketing planning. 

NATURE OF INDIAN CONSUMERS BUYING BEHAVIOUR: Due to diversity in social system, customs, religion, language, food habits, cultures, sub-cultures, etc. the behaviour of Indian consumers is not uniform. Following characteristics are found in their behaviour.

1. Bargaining: Indian customers are very fond of bargaining. They prefer buying goods by reducing the price as told by the seller. Indian sellers too don’t frame a uniform price policy. In rural markets, the trend of bargaining still persists, but in urban areas now, customers prefers one price policy of the seller. They prefer to visit stores where there is no bargaining.

2. Price consciousness: Because of less income in the agriculture occupation, Indian consumer focus on price instead of the quality of the product. But now, consumers are quality conscious. They purchase quality products even at high price.

What is buyer behaviour? What is the nature of Indian Consumers buying behaviour?

3. Brand consciousness: Because of less education facilities, rural population are still unaware about the standard brand names of the product. They are concerned with the product and not with its brand name. But with the expansion of education and means of communication, the behaviour of Indian consumers is going on changing. Now they like branded products and they have brand loyalty of some reputed manufactures.

4. Complaining: Indian consumers are less complaining people. They believe that if a seller cheats on them, God will punish him. They are innocent and illiterate people. They do not kmow the laws and rights as a consumer. But now with the expansion of consumerism, consumers are more aware about their rights. They have started exhibiting their complaints through media and representation before 'Consumer Forums' under Consumer Protection Act, 1986. 

5. Role of women: The role of women is increasing day by day particularly in buying decisions and buying from the market. Women are generally interested in varieties and good looking products.

6. Changing consumption pattern: Because of increase in education, increase in income, increase in standard of living and also desires of more comforts, the pattern of consumption is now being changed. Indian consumers are more desirous of comforts and luxury products. 

7. Guarantee: Indian consumers are more interested in guarantee and warrantee. They prefer to purchase those commodities which are guaranteed by the manufacturers, regarding quality, durability, efficiency and effectiveness. 

8. Credit: Credit facilitates the consumers to buy those products which they cannot buy with their current cash resources. Indian consumers like to buy the products on credit, because their disposable income falls short to fulfill the demand for consumer durables. 

So, the proper understanding of consumer behaviour is essential for the marketers as it serves as the foundation of the marketing.

What is buyer behaviour? What is the nature of Indian Consumers buying behaviour?