FUNCTIONS OF MARKETING

Some of the major functions of marketing are as follows:

1. Selling

2. Buying and Assembling

3. Transportation

4. Storage

5. Standardization and Grading

6. Financing

7. Risk Taking

8. Market Information.

The marketing process performs certain activities as the goods and services move from

producer to consumer. All these activities or jobs are not performed by every firm.

However, they must be carried out by any company that wants to operate its marketing

systems successfully.

1. Selling:

It is core of marketing. It is concerned with the prospective buyers to actually complete the

purchase of an article. It involves transfer of ownership of goods to the buyer. Selling plays

an important part in realising the ultimate aim of earring profit. Selling is enhanced by means

of personal selling, advertising, publicity and sales promotion. Effectiveness and efficiency in

selling determines the volume of company’s profits and profitability.

2. Buying and Assembling:

People in business buy to increase sales or to decrease costs. Purchasing agents are much

influenced by quality, service and price.

The products that the retailers buy for resale are determined by the needs and preferences of

their customers. A manufacturer buys raw materials, spare parts, machinery, equipment’s,

etc. for carrying out his production process and other related activities. A wholesaler buys

products to resell them to the retailers.

Assembling means to purchase necessary component parts and to fit them together to make a

product. ‘Assembly line’ indicates a production line made up of purely assembly operations.

The assembly operation involves the arrival of individual component parts at the work place

and issuing of these parts to be fastened together in the form of an assembly or sub-assembly.

Assembly line is an arrangement of workers and machines in which each person has a

particular job and the work is passed directly from one worker to the next until the product is

complete. On the other hand, ‘fabrication lines’ implies a production line made up of

operations that form or change the physical or sometimes chemical characteristics of the

product involved.

3. Transportation:

Transportation is the physical means by which goods are moved from the places where they

are produced to those places where they are needed for consumption. It creates place, utility.

Transportation is essential from the procurement of raw material to the delivery of finished

products to the customer’s places. Marketing relies mainly on railroads, trucks, waterways,

pipelines and air transport.

The type of transportation is chosen on several considerations, such as suitability, speed and

cost. Transportation may be performed either by the buyer or by the seller. The nature and

kind of the transportation facilities determine the extent of the marketing area, the regularity

in supply, uniform price maintenance and easy access to the supplier or seller.
4. Storage:

It involves holding of goods in proper (i.e., usable or saleable) condition from the time they

are produced until they are needed by customers (in case of finished products) or by the

production department (in case of raw materials and stores); storing protects the goods from

deterioration and helps in carrying over surplus for future consumption or use in production.

Goods may be stored in various warehouses situated at different places, which is popularly

known as warehousing. Warehouses should be situated at such places from where the

distribution of goods may be easier and cheaper. Situation of warehouses is also important

from the view of prompt feeding of emergency demands. Storing assumes importance when

production is regional or consumption may be regional. Retail firms are called “stores”.

5. Standardization and Grading:

The other activities that facilitate marketing are standardisation and grading. Standardisation

means establishment of certain standards or specifications for products based on intrinsic

physical qualities of any commodity.

This may involve quantity (weight or size) or it may involve quality (colour, shape,

appearance, material, taste, sweetness etc.) Government may also set some standards, for

example, in case of agricultural products. A standard conveys a uniformity of the products.

Grading means classification of standardised products into certain well defined classes or

groups. It involves the division of products into classes made of units possessing similar

characteristics of size and quality. Grading is very important for raw materials, marketing of

agricultural products (such as fruits and cereals), mining products (such as coal, iron and

manganese) and forest products (such as timber). Branded consumer products may bear grade

labels A, B, C.

6. Financing:

It involves the use of capital to meet financial requirements of agencies dealing with various

activities of marketing. The services to provide the credit and money needed, the costs 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 three sources—owned capital, bank loans and advance and trade credit. (Provided by

manufacturers to wholesaler and by the wholesaler to the retailers.) In other words; various

kinds of finances are short-term finance, medium-term finance, and long-term finance.

7. Risk Taking:

Risk means loss due to some unforeseen circumstances in future. Risk bearing in marketing

refers to the financial risk interest in the ownership of goods held for an anticipated demand

including the possible losses due to a fall in prices and the losses from spoilage, depreciation,

obsolescence, fire and floods or any other loss that may occur with the passage of time.

From production of goods to its selling stage, many risks are involved due to changes in

market conditions, natural causes and human factors. Changes in fashion or inventions also

cause risks. Legislative measures of government may also cause risks. Risks may arise during

the course of transportation.

They may also be due to decay, deterioration and accidents, or due to fluctuation in the prices

caused by changes in their supply and demand. The various risks are usually termed as place

risk, time risk and physical risk, etc.

8. Market Information:

The importance of this facilitating function of marketing has been recognised only recently.

The only sound foundation on which marketing decisions may be based is correct and timely

market information. Right facts and information reduce the aforesaid risks and thereby result

in cost reduction.

Modern marketing requires a lot of information adequately, accurately and speedily.

Marketing information makes a seller know when to sell, at what price to sell, who are the
competitors, etc. Marketing information and its proper analysis has led to marketing research

which has now become an independent branch of marketing.

Business firms collect, analyse and interpret facts and information from internal sources, such

as records, sales-people and findings of the market research department. They also seek facts

and information from external sources, such as business publications, government reports and

commercial research firms.

Retailers need to know about sources of supply and also about customers “buying motives

and buying habits”. Manufacturers need to know about retailers and about advertising media.

Firms in both these groups need information about ‘competitor’ activities and about their

markets.

Even ultimate consumers need market information about availability of products, their quality

standards, their prices and also about the after sale service facility. Common sources for

consumers are sales people, media advertisements, colleagues, etc.