Marketing Functions
MARKETING FUNCTIONS
Introduction
·
Marketing functions refer to the core
activities involved in the flow of goods and services from producers to
consumers.
·
These functions ensure that the right product
reaches the right consumer at the right time and price.
Selling
- Definition:
The process of convincing customers to purchase a product or service.
- Activities
Involved:
- Persuasion
- Negotiation
- Customer
relationship management
- Importance:
Generates revenue; creates consumer demand; builds customer loyalty.
Buying
- Definition:
The process of acquiring goods and services for resale or production.
- Types:
- Consumer
Buying: For personal use
- Industrial
Buying: For business purposes
- Key
Factors: Quality, quantity, price, timing,
and source.
Transportation
- Definition:
The physical movement of goods from the place of production to the place
of consumption.
- Modes:
Road, rail, air, water
- Importance:
Adds place utility by making products available at the desired
location.
Storage
- Definition:
Holding and preserving goods until they are sold.
- Types:
Warehouses (private/public/cold storage)
- Benefits:
- Maintains
product supply
- Protects
against spoilage or theft
- Adds
time utility
Financing
- Definition:
Provision of funds to carry out marketing activities.
- Sources:
- Bank
loans
- Credit
facilities
- Trade
credit
- Need:
Helps manage production, storage, transportation, and promotional
expenses.
Risk Bearing
- Definition:
Managing uncertainties in marketing such as damage, theft, demand
fluctuations, or changes in prices.
- Types
of Risks:
- Natural
risks (floods, fire)
- Economic
risks (inflation, recession)
- Human
risks (theft, fraud)
- Mitigation:
Insurance, diversification, careful planning
Grading and Standardization
- Grading:
- Sorting
of products into categories based on quality, size, weight, etc.
- Standardization:
- Setting
and maintaining product specifications (e.g., ISI)
- Importance:
- Enhances
customer trust
- Facilitates
bulk buying and selling
- Helps
in price fixation
Marketing Information
- Definition:
Data related to market trends, customer preferences, competitors, etc.
- Sources:
- Market
research
- Sales
records
- Feedback
systems
- Benefits:
- Informed
decision-making
- Quick
response to market changes
- Effective
planning and promotion
Features and Characteristics of Markets
·
A market is a place or system where
buyers and sellers interact to exchange goods or services.
Key Characteristics
- Presence
of Buyers and Sellers: Essential for any market to
function.
- Existence
of Goods/Services: There must be a product or
service to offer.
- Price
Mechanism: Price is determined by demand and
supply.
- Competition:
Can be perfect or imperfect; affects pricing and product quality.
- Medium
of Exchange: Currency, credit, or digital
payment.
- Communication
Network: Enables negotiation, promotion, and
feedback.
- Legal
Framework: Ensures fair practices, consumer
protection.
Market Segmentation
·
The process of dividing a heterogeneous market
into smaller, homogeneous segments based on common characteristics.
Purpose:
- Better
targeting of marketing efforts
- Increased
customer satisfaction
- Efficient
resource allocation
Bases of Segmentation:
|
Basis |
Description |
Example |
|
Geographic |
Region, climate, population density |
Urban vs. rural markets |
|
Demographic |
Age, gender, income, education |
Products for teenagers |
|
Psychographic |
Lifestyle, values, personality |
Luxury vs. budget products |
|
Behavioral |
Purchase frequency, brand loyalty, usage rate |
First-time vs. repeat buyers |
Characteristics of a Good Market Segment:
- Measurable
– Size and purchasing power can be quantified.
- Accessible
– Can be reached through marketing channels.
- Substantial
– Large enough to be profitable.
- Differentiable
– Distinct from other segments.
- Actionable
– Strategies can be effectively developed and implemented.
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