Functions Of Marketing

FUNCTIONS OF MARKETING: A Marketing function is an act or operation or services by which the original producer final consumers are linked together. If marketing functions are not properly carried out, the business unit may not be in a position to dispose off its products and all the efforts made for production may not bear fruits. The prime objective of marketing is to take the goods from the producer and perform all functions necessary to make them available to the ultimate consumers. In the process of marketing place, utility is created when goods and services are available at the places where they are needed, time utility when they are needed and possession utility when they are transferred to those people who need them.


All marketing functions can be divided into two types
i. Concentration
ii. Dispersion.

The process of concentration is concerned with gathering raw materials, manufactured goods at a central place namely market. 

Dispersion means distribution of goods to final consumers.

Concentration involves a number of marketing functions like: (a) buying (b) Trading (c) Storing (d) Grading (e) Financing etc.

The process of distribution may include the following.
(a) Selling (b) Transportation (c) Grading (d) Risk Bearing etc.

Another classification of marketing functions is given by professors Clark and Clark, which is widely accepted by one and all.
Functions of marketing is classified into three types
1.Functions of Exchange.
2.Functions of Physical Supply.
3.Facilitating Functions.


FUNCTIONS OF EXCHANGE: Exchange refers to transfer of goods and services from money’s worth. This process can be divided into (a) Buying and assembling and (b) selling

A. Buying and Assembling: Buying is the first step in the ladder of marketing functions. A Manufacturer has to buy raw materials for production, wholesaler has to buy finished goods for the purpose of sale to the retailers, a retailer has to buy goods for resale to the consumers. Efficient buying is essential for successful selling. Large sized business concerns maintain a separate department namely purchasing department for the purpose of buying.

Modes of Buying: Goods may be purchased in any of the ways given below:
i. By Inspection: Under this method goods are bought after examining the goods by the buyer in the seller’s premises.

ii. By Sample: A purchase by sample is made after the buyer examines the sample of goods supplied by the seller.

iii. By Description: Some sellers issue catalogues containing description of goods offered for sale. The intending buyer places an order specifying a particular number mentioned in the catalogue.

iv. By Grading: This refers to standard quality of goods. Under this method purchase can be made by telegram, telephone, or mail.
Assembling begins after the goods have been purchased. It refers to gathering of goods already purchased from different places at one central place. Assembling facilitates transportation and storage. It is significant in cases of seasonal goods and agricultural products.


B. Selling: The ultimate aim of every business is to earn profits and in realizing this aim selling plays an important role. Nothing really happens until somebody sells something. Selling enables a firm to satisfy the needs of consumers. It is the process through which ownership of goods id transferred from the seller to the buyer. Sales are the source of income for the manufactures, wholesalers and retailers.

The importance of selling has increased significantly with an increase in the number articles offered for sale by a large number of producers. When the production was on a small basis the producers had no problem to dispose off their products. But now, with the increase in the volume of production, selling has become a problem and the producer has to induce to sell his products.


FUNCTIONS OF PHYSICAL SUPPLY: There are two important functions under this classification: (a) Transportation (b) Storage and ware housing.

A. Transportation: Transport means carrying of goods, materials and men from one place to another. It plays an important role in the marketing. It creates place utility by moving goods from the place where they are available in plenty, to places where they are needed. Both assembling and distribution of goods from the places of production to the places of consumption but it also enables consumers to go to marketing areas where there is wide choice of goods than in the places where they like, Transportation is also useful in stabilizing the prices of various commodities by moving them from the areas where they are in surplus to the areas where they are scarce. Various types of transport are used for carrying goods like (a) Land transport, (b) Water transport and (c) Air transport.

B. Storage and Ware Housing: Storage is another function of marketing process and it involves the holding and preservation of goods from the time they are produced to the time they are consumed. Generally, there is a time gap between the production and consumption of goods. Therefore, there is need for storing so as to make the goods available to the consumers and when they are required. By bridging the gap between production and consumption, storage creates time utility; it also creates place utility by holding goods at different places.


The importance of storage can be studied as follows.


a. Generally, goods are produced in anticipation of demand of the product in future market. All the goods are not sold immediately after production. For the unsold stock of goods storage in indispensable.
b. Some goods are produced throughout the year but demand for them is only in a particular season. For example rain coats, umbrellas, crackers etc. These commodities are to be stored till the arrival of season.
c. Many commodities are produced during a particular season but they are used through out the year. Such goods have to be stored so as to make them available through out the year. For example agricultural products.
d. Certain products which can get higher prices in future market are stored for a longer period. For example, tobacco, liquor, rice, etc.
Warehouse is a place for storage of goods. The functions of storage can be carried successfully with the help of warehouses. Warehouses create time utility by storing the goods through out the year and releasing them as and when they are needed. Several types of warehouses are used for storage of goods, which are as follows.
i. Private warehouses: Private warehouses are owned by big business units for the storage of their own goods. Only big business houses can afford to have such type of warehouses.
ii. Public warehouses: These are the business concerns which offer storage space on rent. These ware houses are licensed by the government. They are helpful to businessmen who cannot afford to maintain their own warehouses. These warehouses are generally located near railway lines and main roads.
iii. Bonded warehouses: These are located near the ports for the storage of imported goods. When the importer cannot pay customs duties immediately on the goods imported by him, he can store them in bonded houses. Importer can remove the goods in parts after paying import duty.


Facilitating Functions: There are the functions which help or facilitate in the transfer of goods and services from the producer to the consumer. They are not directly connected with the transfer of goods. Under this category the following functions are included.

a) Financing: Finance is the life blood of every business. It is needed for marketing of goods and services. The goods produced or purchased cannot be sold immediately to the ultimate consumers and much time is involved in marketing process. Hence there is need for finance for the purchase of raw material, meeting transportation, storage costs, insurance etc. Further, generally goods are passed on from manufacturer to wholesaler and from wholesaler to retailer on credit basis. Ultimate consumers also prefer to purchase goods on credit. Therefore, all agencies engaged in marketing have to make some arrangement for finance. Prof J.F Pile has rightly stated that “Finance is the lubricant of marketing machinery”.
There are three main sources of finance. They are as follows.


i. Long-term finance: It is needed for purchasing fixed assets like land, building, plant and machinery, furniture etc. The main sources of this finance are shares, debentures, financial institutions.
ii. Medium-term finance: It is needed for raising working capital. The main sources are financial institutions and commercial banks.
iii. Short-term finance: It is mainly required for meeting short term payment normally for less than one year. It can be raised from commercial banks and trade creditors.


b) Risk Bearing: Risk means he possibility of loss due to some unforeseen circumstances in future. Marketing process is confronted with risks of many kinds at every stage. Risk may arise due to changes in demand, a fall in price, bad debts, natural calamities like earthquakes, rains etc. The marketing risks may be classified under the following heads:
I. Time risk: Goods are bought by the business with a view to sell them at a profit out of anticipated rise in prices in future. During the time lag conditions might change and the price my fall. Thus time risk is involved in marketing.

II. Place risk: place risk arises when the prices of the same product are different in different places. The businessmen may purchase goods in market where prices are low with a view to sell them at other places where the prices are high. But the price in the other market may come down causing loss.

III. Competition risk: Businessmen have to face risk arising from the forces of competition. The competing firms may introduce modern methods of production due to which quality may be improved or cost of production may be reduced. Under such circumstances, a firm may be forced to sell at a loss which is called risk of competition.

IV. Risk of change in demand: The manufacturers produce goods on large on large scale in anticipation of demand in future. But, sometimes the demand of the product may not come to expectations resulting n losses.

V. Risk arising from natural calamities: Risks from natural causes are beyond human control. These include rains, earthquake, floods, heat and cold. These risks cause heavy loss.

VI. Human risks: These risks arise due to adverse behavior of human beings like theft, strikes, lockouts, bad debts etc.

VII. Political risks: Political risks arise due to change in political factors such as changes of government/ changes in government policies etc.


c) Market Information: According to Clark and Clark market information means “all the facts, estimates, opinions and other information used in marketing of goods”. The main object of any business is to create and maintain demand for the product produced. For this purpose market information is useful. On the basis of information the seller can know what type of goods are needed by the consumer, when and where they are needed and in what quantity.

d) Standardization: Standardization means establishment of certain standards based on intrinsic qualities of a commodity. The quality may be determined on the basis of various factors like size, colors, taste, appearance etc. It is helpful to the consumers as they safely rely on the quality of the standardized products.

e) Grading: Grading means classifications of standardized products in to certain well defined classes. In the words of Clark and Clark “It involves the division of products into classes made up of units possessing similar characteristics of size and quality”. Grading is very important for agricultural products like wheat, cotton etc.
Grading is of two types, fixed and variable. Fixed grading refers to the grading of goods according to fixed standards whereas variable grading refers to the application of varying standards.

f) Branding: Branding means giving a name or symbol to a product in order to differentiate it from competitive products. It helps the consumers in identifying their products. Branding may be done by selecting symbols and marks such as charminar cigarettes, camel inks, binny textiles or by using the name of manufactures such as Ford cars, Godrej street furniture. A Good brand should be brief, simple, and easy to spell and remember.

g) Packing: Packing means wrapping and crating of goods before distribution. Goods are packed in packages or containers in order to protect them against breakage, leakage, spoilage and damage of any kind. It consists of placing the goods in boxes, tins, bottles, cans, bags, barrels of convenient size to the buyers.