Principlals of Marketing Unit 2

UNIT 2
MARKETING FUNCTIONS
THE FUNCTIONS OF MARKETING

MEANING
 Marketing is made up of a number of activities known as ‘marketing
functions.’
 Marketing functions are such activities as marketing perform to achieve the
ultimate objective of fulfilling the needs of the consumer.
 The philosophy of marketing finds its practical applications in the various
steps taken in the marketing process by which goods leave the producers,
journey through various intermediary channels and with the aid of various
other agencies, finally reach the consumers scattered all over the area.
CLASSIFICATION OF MARKETING FUNCTIONS

Clark and Clark .1
ProperPlye .2
Harry L. Hensen .3
Cundiff Still Govani .4

MERCHANDISING FUNCTIONS
Merchandising consists of those activities which are necessary to make available to

the market the product and services that fit the needs of that particular market and to
create demand for these products and services
I. Product planning and development
Product planning is the starting point of entire marketing programme in a firm. It

implies all activities which enable a firm to determine what should constitute its line
of products.
:Planning and development of a product includes the following activities

i) Creating idea of a new and improved product.
ii) Screening of data.
iii) Development and testing of the concept to find out the best product out of
various alternatives.
iv) Evaluating its prospects.
v) Giving physical shape, testing, branding, packaging and labeling , etc.
vi) Test marketing to give the product a trail
vii) Pricing the product
viii) Product for sale ( commercialisation)
II. Standardising and Grading

• Standardising is the process of setting up standards to produce goods in
conformity with those standards.
“A standard is a constant physical characteristic that gives uniformity to a group of
product”.
 The standards are set with regard to size, shape, colour, design and material.
 Grading facilitates sale of goods by description and it avoids lot of botheration
involved in inspection etc. Grading creates good impression in the minds of
buyers because they are assured of a particular standards of goods.
III. Buying and Assembling
 Buying refers to the process of acquiring goods at the right price, at a right
time, in right quantity and form a right source of suppliers.
 Assembling refers to the activities of assembling units of industry where
finished articles are brought out of assembly of various parts. Eg bi-cycle,
laptops
BUYING PRACTICES
Buying Practices
 Concentrated Buying: Under this system, purchases are made from a limited
number of sources or from a single source of supply.
 Diversified or Scattered Buying: It is the practice by which the buyers make
purchases from a large number of suppliers. It affords competitive prices,
better services and a wider choice in planning of assortments.
 Reciprocal Buying: Under this practice, buying is made on reciprocal basis,
that is if you buy from me. I shall buy it from you. But restricts choice and
may result into higher prices.
 Conservative or Hand to mouth Buying: This is a practice of buying strictly on
the basis of current needs. Such policy is most suitable when prices are falling.
 Speculative Buying: Under this practice buying purchases are made in bulk by
placing large orders with a view to sell the same at higher prices in the near
future.
IV. SELLING
Selling refers to the process of transfer of ownership of goods or services to a buyer in

exchange of money.
“The heart of marketing task is selling and it is in connection with the formulation of
selling policies and methods followed in carrying them out that the real mettle of the
manufacturer and the middlemen is tested”.
--- Philips and Duncan
Elements/ sub functions of selling
Selling functions has five basic elements:

i) Product planning and development
ii) Establishing contact with the buyers
iii) Creation of Demand
iv) Negotiation
v) Entering into contracts
Methods of selling
1. Personal Selling
2. Indirect Selling
3. Sale by Inspection
4. Sale by Description
5. Sale by Sample
6. Sale by Approval or Return
7. Mail Order Selling
8.Hire Purchase Selling
PHYSICAL DISTRIBUTION FUNCTION

TRANSPORTATION
.Transport means movement of goods and persons from one place to another
.It carries ideas and inventions to the people
Transport increases
1) The mobility of labour and capital,
2) Widens the market,
3) Leads specialisation and division of labour,
4) Helps in stabilising prices,
5) Contribution to a large portion of our wealth
6) Provides employment
AUXILIARY FUNCTIONS
Financing: Finance is needed to create production facilities through purchase of
production of fixed assets such as plant, land and building.
It is also needed for the purchase of raw materials, payment of wages, meeting
transportation costs etc.
Risk Bearing : There are always risks in business. The marketing process is also
confronted with risks of many kinds at every stage. Future circumstances are
influenced by so many factors and a change in any situation will bring the risk
element. Eg. Change in demend, Prices of raw materials may increase, Change in
Government policies, Natural calamities.
SOME MORE FUNCTIONS
BRANDING
 Branding means giving a name to a particular product so that the consumer is

able to distinguish this product from other similar products.
 A brand may consist of a word, a symbol or a number.
 Branding of a product may be done in three ways :-
Symbols and marks eg. Lotus Ghee
Special names eg. LUX Soap
Use of names of manufacturers along with the product eg. Bata Shoes.
PACKING AND PACKAGING

 Packing means wrapping, compressing or filling goods for the purpose of their
protections and convenient handling.
 Packaging is related to putting articles in the market in convenient sized lots.
 Packaging facilitates advertising and branding of goods.

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UNIT 2

THE FUNCTIONS OF MARKETING

CLASSIFICATION OF MARKETING FUNCTIONS

Cundiff Still Govani .4

Merchandising consists of those activities which are necessary to make available to

I. Product planning and development

Product planning is the starting point of entire marketing programme in a firm. It

:Planning and development of a product includes the following activities

II. Standardising and Grading

III. Buying and Assembling

Selling refers to the process of transfer of ownership of goods or services to a buyer in

Elements/ sub functions of selling

Selling functions has five basic elements:

PHYSICAL DISTRIBUTION FUNCTION

SOME MORE FUNCTIONS

 Branding means giving a name to a particular product so that the consumer is

PACKING AND PACKAGING

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