FUNCTIONS OF MARKETING
A. Functions of exchange
B. Functions of physical distribution
C. Facilitating Functions
Grading and standardization
A. Functions of Exchange
By the process of marketing, buyers are able to purchase what they need. Buying involves determination of needs, selection of quality and variety, deciding on brand and size, bargaining on prices, determination of quantity, selection of source of supply, method of payment, mode of delivery, and possibility of credit facility.
Selling refers to exchange of goods for money. Selling cannot take place without buying for both are compulsory to each other. By selling transfer of title to goods and services is effected. Selling involves deciding on what to sell, when and .where to sell, and at what price. Before selling advertising, publicity, or personal selling is required. This function requires determination of selling price, commission, discount, packing, and sales promotion methods.
B. Functions of Physical Distribution
Once the goods have been produced, they must be stored until they are delivered or demanded. Storage is holding the goods when they are manufactured. The means of storage includes shops, stores, and warehouses. By the process of storing we hold the goods when they are produced and dispose them of when they are demanded. It creates time utility. Goods are stocked when they are abundant and released when they are short. It also works for aging and ripening.
If storage creates time utility, transportation creates place utility for goods and services. By transportation we take goods and services from the place of supply to the place of demand. It solves the problems of surplus or scarcity. Goods may be transported through sea, land, or air. Modern technology has provided the marketers quick means of transportation such as trains, trucks, airplanes, and ships.
C. Facilitating Functions
Finance is the life-blood of a business. Without money no business activity, no matter how small, can be performed. Business needs funds which are available in usually three forms, Viz., 1, capital, 2, loans, and 3, retained earnings. Finance is needed to purchase fixed and current assets, pay off liabilities, and meet expenses of the business.
Grading and Standardization
Grading is the specification of a quality, rank, or class according to value. Standardization is the process of making goods of uniform size and shape. Grading and standardization have made the selling work very easy. Goods produced in one country can be easily sold in another just by quoting grade or standard. The examples of grades are Basmati rice, Mexipak wheat. The examples of standards are measures, horsepower, watts, weights; and volumes. Brand names are used to specify grades and standards. Grades and brands facilitate recognition, advertising, and buying and selling of goods.
Successful marketing requires up-to-date and maximum information about markets, technology, demand, supply, public taste and preferences, internal and external environment, competition, national and international situations. Information may he obtained from a primary or secondary source, which must be reliable. Some companies conduct their own research to get first-hand and latest knowledge. Information is the key to success in the human life.
Risk must be considered and studied carefully. Risk is an essential factor of every business. Before starting a new business the investor must calculate how much risk he can assume.
Different businesses carry varying amount and nature of it. Some risks are insurable and others are not. The uninsurable are changes in fashion, unfavorable movement of prices, new inventions, competition, consumer demand and taste, death of a key employee. The insurable risks are fire and theft etc. There are various forms of risks which are permanent phenomena of a business. Figuring out risk correctly reduces the chances of loss and improves profitability.