Functions of Marketing

Marketing occupies an important position in the organisation of a business unit. As traditionally defined, “marketing consists of those efforts which effect transfers in ownership of goods and care for their physical distribution.”

It is the process by which products are made available to the ultimate consumers from their point of origin. It consists of all those activities which are meant to ensure the flow of goods and services from the producer or the manu­facturer to the consumer.

Marketing is the function of business concerned with the creation of a customer. This means that marketing is the essence of all business. Marketing is the most important business activity because it links the two basic economic functions of production and consumption.

Trade, in the sense of exchange of goods and services, is as old as civilization itself. But trade as such is different from marketing. Trade takes place after production but marketing precedes and pervades production and even follows up trade or exchange.

Some of the functions of marketing are as:-

1. Buying and Assembling 2. Selling 3. Transportation 4. Storage and Warehousing 5. Standardization and Grading 6. Market Research

7. Product Planning and Development 8. Packaging and Labelling 9. Branding 10. Pricing 11. Promotion 12. Risk 13. Financing 14. Market Information.

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Top 14 Functions of Marketing: Buying, Assembling, Selling, Transportation, Storage, Warehousing, Branding Etc.

Functions of Marketing – Product Planning and Development, Standardization and Grading, Buying and Assembling, Selling, Storage, Transportation and a Few Others

Following are some of the functions of marketing described below:

Function # 1. Product Planning and Development:

It is the time when every activity of a producer clusters around the needs and wants of consumers. A producer has to produce the goods and services according to the needs of his customers so that the object of customer satisfaction may be achieved. Therefore, the very first functions of marketing is to plan a product and to develop it so that it may satisfy the expectations of customers.

Function # 2. Standardization and Grading:

Standardization and grading are two important aspects of marketing of today, because with the help of these two aspects, marketing functions became easy, production becomes uniform, prices becomes equal and marketing becomes extensive.

Function # 3. Buying and Assembling:

For the purpose of functions of marketing, buying means the acquisition of goods and services by the seller or industrial user for the purpose of resale. Assembling means collection of different types of goods and services by mediators for the purpose of resale.

Function # 4. Selling:

Selling is the object around which all the activities of marketing cluster because no activity in the world of marketing is completed unless and until the real sale of goods and services bought or acquired by the seller or intermediary has been effected.

Function # 5. Storage:

Storage is considered to be the main activity of marketing these days. Whenever and wherever the production is seasonal and consumption is parental or whenever and wherever consumption is seasonal and production is parental, the goods are to be stored in good condition from the time of production till the time of consumption.

Function # 6. Transportation:

Transportation refers to the real distribution of goods from the place of production to the place of consumption.

Function # 7. Marketing Finance:

It means the arrangement of adequate finance for distributing the goods and services to their real consumers.

Function # 8. Risk Bearing:

Marketing involves many large risks. Some of the risks can be insured such as – flood, fire, theft, robbery etc.; on the other hand, some of the risks cannot be insured, such as fall in the prices, changes in the demand, and changes in fashion. These risks can never be eliminated, however, these risks can be minimized through effective system of sales forecasting, market research, sales promotion, product diversification etc.

Function # 9. Market Information:

Market information plays a vital role in the success of an enterprise. Market information includes the collection of data regarding trend of market, government policy, price policy of different business enterprises, tastes of consumers, and change in fashion, channels of distribution, etc. These informations are collected by different business enterprises, specialized agencies, and government at different times.

Function # 10. Pricing:

Pricing is the most important decision taken by a businessman. It is the decision upon which the success or failure of an enterprise depends to a large extent. The factors that must be kept in mind while determining the pricing policy are – cost of production, prices of competitors, marketing policy, government policy, the buying capacity of consumers etc.

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Functions of Marketing – Functions of Marketing Recognized by Business Leaders: Primary Functions and Secondary Functions

Marketing targets a long term success and indulges in all sorts of activities important for achieving marketing objectives which are referred to as Functions of Marketing.

Marketing Process runs parallel to the process of production. Every process of production carry one or two marketing processes which smoothens the flow of manufacturing resulting in regularity of supply.

Since Marketing is a complicated process, it performs various functions at various levels of production, post production and even after sales.

Following functions are generally recognized functions of Marketing by business leaders:

1. Primary Functions:

It is further categorized as:

i. Basic functions

ii. Functions of Exchange

i. Basic Functions:

a. Research:

This function sets out the target of selling a product of organization. Company has to carry market research for identifying size, behavior, taste, culture, believe, gender, etc. of target market segment, their wants, needs, approach and then, produce a product which will fulfill those expectations.

Improvement is sales volume is hugely dependent on market research as it focuses on the exact requirements of the consumer. Study of buyer behavior, their mindset is a part of market research. Before introducing a new product company conducts market research through special agencies specializes in this area. After taking their report into consideration top management decides the timing, nature of new product, pricing etc.

Research is a third eye of top management which foresees the market and helps in goal setting.

b. Standardization, Grading:

According to International Marketing association, “Standardization refers to a uniform global or regional product strategy which capitalizes on both the commonalities in customer in custom needs across countries and passing on cost saving to the customer via lower prices, the following a product -driven orientation of achieving lower costs through mass production.”

Standardization usually established by statutory or legal departments of governments.(AGMARK, ISI)

On the other hand Grading is a process of classification of products after the process of standardization ends. It involves categorical bifurcation of standardized products for better efficiency.

c. Packing and Labeling:

Packaging is a science, art of designing, evaluating and production of packages for protection of product while in storage, distribution, sale and use.

Packaging protects, saves, preserves, informs and sells final product.

“Wrapper speaks about a chocolate”, is a famous statement made for stating the importance of packaging.

Labeling on the other hand is providing suitable name and their information on the package which talks about all the essential elements of the product.

ii. Functions of Exchange:

a. Buying Function:

Production is a complicated process which at the end results in a final product. But various steps are involved which includes, buying quality raw material for the production process, raw material as well as other spares must ensure quality standards so as to allow final product so as to satisfy expectations of consumer. Purchase department is generally responsible for purchase of raw material and other parts but marketing assists in this purchasing decisions.

b. Assembling Function:

Assembling starts after the purchasing of Goods. It is a separate function from buying. Product passes through various process in the production activity and marketing performs key role in this situation. Buying involves transfer of ownership of the goods, whereas assembling involve creation and maintenance of the stock of goods purchased from different sources. Usually goods are not purchased from different sellers they would have to be collected and assembled at one place under the control of the buyer. Thus buying and assembling are two distinct processes.

Production department produces product on the basis of guidelines regarding essential characteristics that meet the target market needs as provided by marketing department. Product assembling and production process follow marketing department’s guidelines for performing their functions.

c. Selling Function:

Selling is a post-production activity of finalizing a transaction. The selling department is responsible for selling of a product and after sales services in most of the organizations. Some companies differentiate sales department into three sub departments such as, Pre sales, sales and after sales service department.

But marketing performs essential role in setting up an environment for increase in sales which results in profit maximization of the company.

Therefore marketing efficiency will ultimately results in better sales and achievement of corporate goals.

2. Secondary Functions:

i. Distribution:

It is a post-production activity of physical movement and handling of product.

Transportation and distribution required right from the raw material movement till the final goods distributed to various wholesalers.

Transportation creates space utility which if effectively organized smoothens the distribution and supply from the producer’s end.

Distribution acts like middlemen and bridges gap between demand and supply.

Some producers give authority to intermediaries like stockiest, wholesalers to sale directly from their respective places so as to fulfill customer demand.

Modern techniques in transportation have created magic in distribution. On line shopping is done only because of speedy transportation and logistics.

In on line shopping buyer orders certain product without even knowing about the supplier and receives it from a long distance supplier with help of modern transportation systems.

ii. Storage:

It’s another pivotal function of production which helps in preserving goods for future sale. Storage ultimately creates time utility which is the function of utmost significance. It simplifies flow of goods and enables supply of goods on a regular basis whenever demanded. It is basically concerned with making goods available at the right place and right time.

When production is seasonal and consumption is constant throughout the year or when production is regular and consumption is seasonal storage becomes essential. Moreover, modern production is carried on in anticipation of demand and hence goods manufactured have to be stored safely till their demand arise.

Storage function is performed at various levels like, manufacturer, wholesalers, distributors, professional warehouse- keeper.

iii. Advertising:

According to the American Marketing Association, “advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.”

In Merriam Webster advertising is defined as, “the action of calling something to the attention of the public especially by paid announcements.”

In simple words advertising is a means of communicating essential information about the product or service.

iv. Market Risk:

The process of movement of finished goods from its starting point i.e. point of production to the point of consumption is characterized with lots of risks like- a) Political, b) Social, c) Accidental, d) Economic, e) Technical.

These risks should be considered for effective results. Marketing department must carry detailed study about the risks involved and solution for covering those risks.

v. Insurance and Finance:

Financing deals with part of marketing for providing money for business. It refers to raising of capital, searching for loan options for starting production.

Insurance is securing the production from risks involved which includes inherent risks as well as other risks. Marketing department must be attentive in terms of insurance policies and lowering risks.

We have studied functions of marketing which included some primary functions and also secondary functions.

Every function must be thoroughly understood and learned by managers for effective use of marketing in management.

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Functions of Marketing – Functions Performed by Manufacturers, Wholesalers and Retailers

Most people interpret marketing as selling and advertising. Selling and advertising is part of marketing not the whole of it. Marketing starts from the time of inception of an idea to have a product/service till making customers brand loyal to that product/ service.

Following are the functions performed by manufacturers, some by wholesalers, and others by retailers:

1. Buying:

In order to plan what can be the best buy from customer’s point of view; a marketer should study buying patter of customers. The quality of the product depends on the effective purchasing system.

Buying includes the purchase of machinery, spare parts of machinery, raw materials to complete the production process and meet the customer requirements. Functions such as determination of needs, the selection of proper source of supply and making product available on the stores are relatively complex.

2. Selling:

It is the core of marketing and one of the important reasons behind all the activities of marketing. It is also an expensive function as to sale a product a marketer should create awareness among customers and this process is a cost to company. Many times a company suffer losses if they fail to read the pulse of market.

3. Assembling:

It is a process of putting together all the goods, to manufacturer large number of finished goods. For example, automobile companies where cars are produced in bulk and sold over number of cities. Availability of raw material in good quantity and quality is very important in this kind of production process.

4. Standardization and Grading:

It is a process of maintaining homogeneity in the quality of product throughout the production process. It helps in creating an identity of the product in customer’s mind. There are many different packaged fruit juices in the market but because of their packaging customers easily differentiate between differentiate brands. Grading is a part of standardization. It is process of testing the standard of the product.

5. Physical Distribution Functions Include Transportation and Storing:

Making a product available to the point of consumption from the point of origin is another vital role in marketing. It is because of quality transportation and storing, a good which is manufactured at one part of the country can be consumed at another part of the country.

For example fish farming happens in Karnataka and the same fish is transported to West Bengal and sold there. It is not only primary sector which gets benefits by transportation all sectors are benefited by transportation. Similarly storing is important at all level because as soon as product id delivered it is not been sold so storing plays an important role.

6. Financing:

Business across the industries is based on credit. There is a long gap between the product is produced and product is being consumed. So, this entire process need long term financing. Manufacturer sell goods to distributor on credit and the distributor extend the same facility to retailer. If all the channels will not work together and on credit the system will collapse.

7. Risk:

When a good is transported from manufacturer to distributor via road, rail, ship or by flight there is a risk involve in it. The goods can be damaged or completely destroyed by flood, sea perils, storm or theft. All this put manufacturer and other channel members at risk. Manufacturers accept this risk when they schedule production of a product speculatively before consumers have entered orders.

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Functions of Marketing – Buying and Assembling, Selling, Transportation, Storage or Warehousing, Standardization and Grading, Market Research, Branding and a Few Others

Marketing functions may be classified into three types – functions of buying and assembling, functions of physical storage and distribution, and facilitating functions that help the process of exchange between sellers and buyers.

Function # 1. Buying and Assembling:

Buying is an important function of marketing. It involves transfer of ownership of goods. A manufacturer is required to buy raw materials for use in production. He/she may buy finished goods as well for consumption or for resale. Wholesalers and retailers, likewise, buy goods for resale at a profit. Buying requires a lot of advance planning and careful monitoring of market trends. Right quantity, right quality, and right price are three important things that require close attention.

The source of supply also must be dependable. The buyer, it is often said, requires a hundred eyes, the seller not even one. As the saying goes, ‘well bought goods are already half-sold’. Assembling is different from buying. It involves collection of goods purchased from different sources at a common place or centre. Assembling makes transportation (as goods can be transported in bulk) and grading economical. It ensures steady supply of materials/goods whenever required.

Function # 2. Selling:

Selling is the essence of marketing. It is concerned with finding the prospective buyers, persuading them to buy and complete the process of transfer of ownership of goods or services at a profit. Selling helps the firm to realize the ultimate goal of earning profit by offering what the customers want.

Selling effort can be very successful if the firm is able to support the same through advertising, promotion, publicity, and personal selling. In these days of mass production, selling has assumed added significance. The firm needs to keep a close watch on what the customers want from time to time. Market research would help in tracking the changing trends in market place. The firm needs to watch the moves of competitors as well if it wants to its business to grow.

Function # 3. Transportation:

Transportation refers to the physical movement of goods from places of production to places of consumption. It is an important function that connects the buyers with sellers—who are usually separated by distance. It creates place utility by moving goods from places where they are produced to places where they are in demand. Without efficient, safe, and speedy transportation, it is not possible to produce on a massive scale and place items for sale in different locations.

Modern means of transportation—land, air and water transport—have greatly contributed to buying and selling of goods in global markets now. Transportation enables a firm to overcome hindrances of place and time. The firm can reach out to consumers wherever they are located by putting rail, water, and air transportation means to good use.

Function # 4. Storage or Warehousing:

Storage is the process of holding and preserving materials/goods for future use. Goods are generally produced in anticipation of demand. Storage helps in preserving materials/goods from the time they are obtained till the time they are put to use. Materials or goods held in storage are protected against all kinds of risks such as – damage, deterioration, pilferage, theft, etc.

Goods/materials may be stored in various warehouses situated at different places. Construction of warehouses in convenient locations, therefore, is essential for successful marketing. Inventories or materials lying in storage could turn out to be graveyards of business, if they are not taken care of in a proper way.

Function # 5. Standardization and Grading:

Standardization is the process of setting standards or specifications for a product. The specifications are nothing but desirable qualities liked by customers in the form of design, colour, weight, shape, appearance, taste, etc. Standardization helps in purchasing by description. Buyers can be sure about the desirable quality and quantity specifications, for example, if they carry the ISI (Indian Standards Institution) mark/stamp in India. Goods of uniform quality and quantity can be marketed easily, if established standards are adhered to.

Grading is the process of dividing products into well-defined classes or grades possessing similar features. Grading is important in respect of agricultural products such as vegetables, food grains, cotton, tobacco etc., for mining products such as – coal, iron ore, etc., and forest products such as – timber. Grading into A, B, C category helps in getting a remunerative price for different classes of materials based on their inherent quality. Standardization specifies standards of quality to be maintained. Grading helps in classifying items into convenient lots as per the established standards.

Standardization and grading—as key marketing functions—offer lot of benefits to buyers as well as sellers which are depicted as follows:

i. It is easy to sell goods by way of sample or description. Based on different grades and quality, items can be sold in different markets consisting of different classes of buyers—low income groups, middle income groups, high income groups, etc.

ii. Standardized items fetch better prices for the sellers.

iii. It is easy to sell them through commodity exchanges.

iv. They enjoy a wider market.

v. They can be evaluated quickly and easily.

vi. It is easy to obtain financing by offering them as a collateral security.

vii. Even when they get damaged, it becomes easy to get insurance claims settled quickly.

Function # 6. Market Research:

It is a systematic study of facts relating to various aspects of marketing, such as – buying habits, competitive moves, technological changes, demand-supply situation, etc. It involves collection, analysis, and presentation of relevant market information to the decision makers so that appropriate decisions may be taken in a timely fashion.

Right information at the right time would help marketing managers to change the product mix, cut prices, alter design, offer strong promotional support, etc., in tune with changing market trends and situations. The information can be gathered through primary sources—such as – customers, salesmen, dealers—or external sources such as – press reports, trade directories, government publications etc. To offer quality at an affordable price, marketers require quality information on a continual basis.

Function # 7. Product Planning and Development:

A product is nothing but a bundle of tangible and intangible benefits offered to the customers. For example, a refrigerator is not just merely steel, plastic, gas, brand name, number of doors, etc., but it also involves factors like after sales service, delivery and installation, assistance in the purchase of product, dealer network and service.

To survive and flourish in the marketplace, a firm has to develop new products and improve the existing ones keeping in mind the changing tastes and preferences of its customers. Product planning and development implies important decisions regarding the size, design, colour, quality, and other essential features of a product. Like human beings, products too have a limited life. They need to be improved constantly keeping an eye on market trends, technological changes, and competitive moves.

Function # 8. Packaging and Labelling:

Packaging offers protection to the product. It can be used to give information about the product in an attractive manner. Packages ensure easy, safe and convenient handling of products from one place to another. Generally speaking, heavy items are put in boxes and containers. Liquid items are poured into bottles, barrels, and cans. Fragile items are wrapped up with specialized packing material. The whole attempt is to see that product does not get damaged while in transit.

The material used for the package—the colour, the shape, and size of the package—is utilized in order to make a special sales appeal of the product as well. Tubes, plastic/metal containers, special cans, economy packs, refill packs, tetra packs, reusable containers, and the smaller sachets are all part of packaging innovations in recent times. Reducing the cost of packaging, enhancing the shelf life of the product, increasing the handling convenience, and enhancing the overall product appeal are important considerations behind such innovations.

Labelling is part and parcel of a package. It offers written information about the product—such as – name and address of the producer, date of packing, directions for use, maximum retail price, local taxes, etc. It helps the buyer to understand the nature of the product, its distinctive features, its composition, its performance etc. There are grade labels and descriptive labels.

In grade labelling, product classifications are based on standards of quality. Products are classified into A, B and C or 1, 2, 3 categories based on quality. In case of branded products, mostly descriptive labelling is used, providing detailed information about product features and quality. For most products in India, statutory labelling requirements are laid down and the marketers are expected to follow them.

Function # 9. Branding:

Branding is the process of assigning a distinctive name, sign, symbol or any combination of these to a product. The purpose is to differentiate a product offering from competition. The brand gives an assurance to the customer that the product has all those excellent features that are considered important.

For example, Starbucks (coffee brand) gives a complete experience to the customers through the aroma of the beans, the rich taste of the coffee, the product displays, the attractive art work on the walls, the contemporary music playing in the background and the cozy clean feel of the table. Same is the case with brands like Nirma (a functional brand that serves the function for which it is bought) Parker (an image brand that offers image value to the end-user), KingFisher Airlines, (an experience brand that offers unique experience to the users).

Function # 10. Pricing:

Pricing is all about fixing a reasonable and acceptable price for a product or service. The term ‘price’ denotes the quantity of money received by the firm for its products. Price is what you pay and value is what you get. Unless there is ‘value for money’, customers do not buy a product. Hence, a firm must fix the price of a product keeping certain important things in mind—such as – the actual cost of production, the demand for the product, the degree of competition prevailing, etc.

The customers’ perception about the company and its brand portfolio also play a major role in getting an attractive price for product offerings. The price should cover the costs, in any case, and leave something on the table for the producer. It should neither be too high nor too low. A firm has to fix the prices for its products carefully since pricing policies determine sales volumes and profits. They also impact a firm’s long run survival significantly. A firm must invariably be armed with enough pricing power to ward off threats from competitors at a future date.

Function # 11. Promotion:

‘Promotion’ includes all activities aimed at influencing the behaviour of the buyers. It consists of informing and persuading prospective customers to make the product and services known and acceptable to the end users. The seller tries to differentiate his/her product from other competitive products. By emphasizing the special features of a product, the seller adds value to it.

The aim is to create awareness, generate interest, and make the buyer buy the product. Without adequate promotional effort, it is not possible to create, maintain, and increase the demand for products, and services. Techniques such as advertising, personal selling, publicity, and sales promotion are used to promote a product or service.

Function # 12. Risk:

Risk refers to loss arising out of unforeseen circumstances in the future. It includes financial risk that is inherent in the ownership of goods held expecting demand at a future point of time. It includes all those possible losses in the intervening period such as – a fall price, spoilage, depreciation, obsolescence, and any other loss occurring due to passage of time.

Risk is an inherent part of every business, i.e., from production of goods to its selling stage, many risks are involved due to changes in market conditions, natural causes (fire, flood, earthquake, cyclone) and human factors (dishonesty, recklessness, negligence, theft) changes in fashions or trends; any changes in government policy, strikes, and lockouts, etc., also bring in additional risks. Insurance is a protection against such risks. By paying a small premium, marketers can cover the above losses to a large extent.

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Functions of Marketing – Top 11 Functions: Buying and Assembling, Selling, Transportation, Storage, Financing, Risk Taking, Market Information and a Few Others

In the process of marketing, marketing functions constitute one of its activities. These functions may be classified on different bases and the authorities are not unanimous as to these classifications. The list of various functions ranges from 5 to as many as 20 or 30.

 

We discuss the functions below:

Function # 1. Buying and Assembling:

Buying is the first step in the marketing pro­cess. After buying raw materials, the manufactur­ers convert them into finished products. Wholesal­ers buy finished products from the manufacturers, the retailers buy from the wholesalers and ulti­mately consumers buy – thus the process starts fun­ctioning – marketing is on.

Assembling involves creation and maintenance of the stock of the goods purchased from one seller only. Buying from different sellers will involve not only assembling but also collecting. Thus, buy­ing and assembling are two distinct processes.

Buying involves – determination of the needs as to the kind, quality, quantity of goods, selection of proper source of supply, carrying on negotiations with the supplier etc. Buying of goods may be by inspection, by sample and by description. All these activities involved in buying are not so sim­ple. They require specialised knowledge and all these activities are usually carried through a cen­tralised purchasing department.

Function # 2. Selling:

Selling constitutes the most important function of marketing. The sellers, the consumers and the general public – all are equally involved in the good or the bad of the selling operations. Business has the ultimate object of profit-earning and, un­less sales are effected, surplus cannot be created; so the prime object of a business is to sell. It is said that buying and selling constitute the critical area of a business.

The importance of selling is increas­ing because today’s mass production necessitates mass selling. Selling has different modes to oper­ate – personal selling, sales by advertisement, sales by inspection, sales by sample and sales by description. Whatever may be the method of sell­ing, the selling technique has now undergone a pro­found change and a separate department exclu­sively for dealing in sales is organised in every concern.

Function # 3. Transportation:

Transportation creates place utility. The place of production is not necessarily the place of con­sumption. Goods have to be transported – carried from one place to another. Raw materials have to be carried, crops have to be carried, finished prod­ucts have to be carried – so everywhere there is the need for transportation in the process of mar­keting.

Marketing is inconceivable without trans­port facility. Mass production has enhanced the need for transportation for the collection of raw material and distribution of finished products. Transportation by facilitating warehousing also creates time utility. From the place of production to the place of storage, goods are transported.

Function # 4. Storage:

Storage invests goods with both time and place utilities. Mass production cannot be expected to be consumed instantly on production, goods have to be stored. Waiting for the opportune moment to re­lease the goods to the market is necessary and here is the need for storage. Storage helps in stabilising price by preventing seasonal fluctuation in prices of many agricultural commodities.

It, thus, creates balance between demand and supply through time. It is true that if transportation and communica­tion define the length and breadth of the market area, then storage gives depth to the market. The importance of warehouses is increasing because of the necessity for storage.

Private and public ware­houses are operating to meet the needs of storage. The growth of warehouses in large number is a def­inite proof for the growing need of storage.

Function # 5. Financing:

Financing is an ancillary of marketing but there is no doubt that the function is important. It is not conceivable how the marketing process will con­tinue without finance. In all the activities in­volved in marketing, finance is required. Whether it is for production, selling or stock keeping, expen­diture has to be incurred – finance will be required.

Finance is needed both for fixed assets and current assets, i.e., both fixed and working capitals are necessary. For the manufacturer, fixed capital is re­quired for his factory, plant and machinery and working capital is required for the purchase of raw materials and other current expenditure to keep the organisation going. Finance needed is procured either from the owner’s own source or he can take loan for financing his business.

There are various sources of finance. Commercial banks and Government financial institutions are playing a dominant role in the matter of finance besides oth­er agencies in the public and in the private sectors. Trade credit is also an important source for the provision of working capital to the marketing en­terprises.

Function # 6. Risk Taking:

Risks are inherent in any activity of marketing. Risks arise out of unforeseen circumstances; so they are not always predictable but the fact remains that risks are always there in a business, no mat­ter what type of activity it is carrying on. Risks arise out of serious hazards such as theft, bur­glary, forgery etc., and out of personal disabilities such as illness, injury etc.

There are risks also in transportation of goods and in the shipment of goods. Risks are also there in the decay, deterio­ration and accidents. A serious risk in marketing is the fluctuations in the prices of the commodities due to maladjustment between supply and demand.

So, the risks may be classified as – time risk, place risk, risk of changes in demand, risk of com­petition, political risk, risk of interdependence (highly specialised processes of production and distribution are inter-linked) and other risks.

Risks and uncertainty are two basic features of business. So they are, where business is. But with careful and scientific analysis of the market- conditions and through market research and also with sufficient foresight into the market forces, risks may be avoided to a large extent undoubted­ly. In organised markets, such as in the commodity exchanges, hedging operations enable the specula­tors to guard against risks of loss.

Function # 7. Standardisation, Grading and Branding:

Standardisation:

Standardisation provides “ethical basis” for the marketing transactions. It “involves the deter­mination of basic limits or grades, an establish­ment of model processes and methods of producing, handling and selling goods and services”. Consu­mers expect a certain standard of products and, to conform to this standard, standardisation is neces­sary.

In manufactured and industrial goods, stan­dardisation does not pose any problem but in case of natural products such as vegetables, fruits etc., uniformity of quality is impossible and wide vari­ations in their size and quality are found. In such cases, the principle of standardisation has to be applied in terms of grades.

Grading:

Grading is “the process of sorting individual specimens of a given product to the standard grades or classes to which they belong”. It is an important function of marketing. On the basis of certain standards, grading has to be done and the standard is the measure that is generally accepted as having fixed value.

Grading may be fixed or variable. In fixed grading system, different grades are kept at some fixed levels arid no changes are made from time to time. In case of variable grad­ing system, “the weights of the grading factors may be varied to take account of changes in the general quality of the supply coming on the mar­ket”.

Grading offers advantages such as easy selling by sample, easy marketing, and reduction of the cost of marketing. Grading helps the businessmen to use their graded goods as a good collateral se­curity. Transportation and storage costs are also reduced due to grading since the graded goods can be easily transported.

Insurance claims against the loss of graded goods can be settled more easily. Grading also helps future trading as graded goods only can be traded in future markets. Grading also provides the ethical basis in marketing.

Grading has its limitations. All goods cannot be graded and even graded goods do not always con­form to the standards.

Branding:

In today’s marketing, branding is imperative. Mass production and mass selling need a brand name, trade mark or a trade name. Branding is naming a product to distinguish it from other prod­ucts of similar nature. It reflects a standard of quality. A particular brand of a product of a manu­facturer may be advertised in its brand name. So, advertising becomes easier.

Branding also encour­ages improvement in the quality of the product, otherwise a particular brand of a product cannot be popular. We choose many articles of daily con­sumption on the basis of their brands. There are so many brands of toilet soap, detergent powder, cig­arettes, etc.

We prefer some of these articles sim­ply on the basis of their brands and we do not feel any difficulty in purchasing when we name the brand. Branding, actually, creates some sort of monopoly discriminating in nature. We distinguish between goods on the basis of their brands because certain brands have proved their worth and they are of great demand. Branding creates product di­fferentiation.

Branding ensures uniform standard, enables the manufacturers to push their products in the market and eliminates middlemen in many cases from the channels of distribution. Branding also helps re­duction in price of the product as the producer can maintain the resale price of the branded goods. Dealers need not be paid higher commissions for selling the popular branded goods and thus the price is reduced.

Function # 8. Market Information:

Market information, in modern marketing, is in­dispensable for the producers. Various information – such as the number of consumers and their loca­tion, their purchasing power, their preferences and prejudices, their motivations etc., – are very vital in the marketing of products. Data have, there­fore, to be collected before actual marketing opera­tion starts. Nothing now-a-days is done blindfold­ed.

On the basis of the available market information, the whole plan has to be chalked up for marketing a product. Various sources are ex­ploited for collecting market information – inter­nal as well as external. Governments, trade associ­ations and other relevant agencies also supply market information.

Big organisations have their own market research methods for collecting infor­mation. Market intelligence is now a sure course of action before launching the actual marketing pro­gramme.

Function # 9. Marketing Research:

Marketing research is – “the systematic gather­ing, recording and analysing of data about problems relating to the marketing of goods and servic­es”. This definition is not comprehensive. A more detailed description of Marketing research will include collection, analysis and interpretation of data for helping marketing manager to arrive at a decision. This is the goal of marketing research which is missing in the first definition.

Marketing research includes product research, market re­search, sales policy research and sales promotion policy research. Marketing research is assuming importance because of the expansion of the mar­ket, time lag between production and consumption owing to mass production and mass consumption and, also, ever-changing character of the market.

A complete knowledge about the market which is to be catered to must be acquired by the marketing management to be successful in the consumer- oriented market today.

Function # 10. Packaging:

“A package is used to contain, protect and iden­tify a product”. Packaging is a very useful function of marketing because products are to be protected from deterioration and exposure during storage, transportation and use.

Packaging may make a product more attractive and may thus enhance its marketability. The package communicates product information by means of labelling. Packages are sometimes re­garded as ‘silent salesmen’. Package introduces customer to the rest of the members in the product line. It acts as a link between advertising and points of purchase display.

Importance of packaging is felt in more than one way. Packaging helps in building a favourable im­age for the firm and it is to a great extent for pack­aging that the sale is increased, transport cost is reduced, handling of the product is facilitated and there can be economical use of the floor space.

Function # 11. Product Planning and Development:

To satisfy customer needs, products should be according to specifications of the consumers. A con­sumer-oriented product policy has to be followed. So product planning is essential. Products should be so planned by the marketing management per­sonnel that they can satisfy the needs of the consu­mers.

Product planning and development is contin­uous on the part of the management who are with the marketing operation. To improve the quality of the products, planning is always carried on and thus in the marketing functions, product planning and development is a continuous process and not a one-time job. The changing tastes of the consumers necessitate the product quality to be improved and modified.

Besides the functions discussed here, there are functions like pricing, advertising and sales pro­motion which are also very important.

Proper pricing of the products is a compulsion for the producer. An improper pricing may lead to the ouster of the products from the market or heavy loss for the organisation. Whatever is produced has to be advertised either to create a new market for it or maintain the market for an old product.

Efforts must be made in all conceivable ways to promote sales. There are various ways of sales promotion and the methods of sales promotion are chosen after considering various factors operating in the market.

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