MARKETING AND ITS FUNCTIONS

DEFINITIONS OF MARKETING

"Marketing is a social and managerial

process by which individuals and groups
obtain what they need and want through
creating and exchanging products and value
with others."

(Kotler & Armstrong 1987)

The mission of marketing is satisfying customer needs. That takes place in a social
context. In developed societies marketing is needed in order to satisfy the needs of
society's members. Industry is the tool of society to produce products for the satisfaction of
needs.

There are broad and narrow definitions of marketing. Different types of approaches to
marketing are needed when analysing the possibilities to improve marketing.

Marketing has a connective function in society. It connects supply and demand or

production and consumption. At micro-level, marketing builds and maintains the
relationship between producer and consumer.

At business unit level, marketing can have an integrative function. It integrates all the
functions and parts of a company to serve the markets.

The narrowest definition is to see marketing as a function of a business enterprise

between production and markets taking care that products move smoothly from
production to customers.
NATURE OF MARKETING

1. Marketing is an Economic Function

Marketing embraces all the business activities involved in getting goods and services , from
the hands of producers into the hands of final consumers. The business steps through
which goods progress on their way to final consumers is the concern of marketing.
2. Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from seller to the purchaser
or from producer to the end user.
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or organisation
interacts with the customers and stakeholders with the objective to earn profit, satisfy
customers, and manage relationship. It is the performance of business activities that direct
the flow of goods and services from producer to consumer or user.
4. Marketing is a Managerial function
According to managerial or systems approach - "Marketing is the combination
of activities designed to produce profit through ascertaining, creating, stimulating, and
satisfying the needs and/or wants of a selected segment of the market."
According to this approach the emphasis is on how the individual organisation processes
marketing and develops the strategic dimensions of marketing activities.
5. Marketing is a social process
Marketing is the delivery of a standard of living to society. According
to Cunningham and Cunningham (1981) societal marketing performs three essential
functions:-
1. Knowing and understanding the consumer's changing needs and wants;
2. Efficiently and effectively managing the supply and demand of products and services;
and
3. Efficient provision of distribution and payment processing systems.
4. Marketing is a philosophy based on consumer orientation and satisfaction
5. Marketing had dual objectives - profit making and consumer satisfaction
SCOPE OF MARKETING

1. Study of Consumer Wants and Needs

Goods are produced to satisfy consumer wants. Therefore study is done to identify
consumer needs and wants. These needs and wants motivates consumer to purchase.

2. Study of Consumer behaviour

Marketers performs study of consumer behaviour. Analysis of buyer behaviour helps

marketer in market segmentation and targeting.

3. Production planning and development

Product planning and development starts with the generation of product idea and ends
with the product development and commercialisation. Product planning includes
everything from branding and packaging to product line expansion and contraction.

4. Pricing Policies

Marketer has to determine pricing policies for their products. Pricing policies differs form
product to product. It depends on the level of competition, product life cycle, marketing
goals and objectives, etc.

5. Distribution

Study of distribution channel is important in marketing. For maximum sales and profit
goods are required to be distributed to the maximum consumers at minimum cost.

6. Promotion

Promotion includes personal selling, sales promotion, and advertising. Right promotion
mix is crucial in accomplishment of marketing goals.

7. Consumer Satisfaction

The product or service offered must satisfy consumer. Consumer satisfaction is the major
objective of marketing.

8. Marketing Control

Marketing audit is done to control the marketing activities.

TYPES OF MARKETING

The concept of marketing

encompasses a wide coverage
and may even be associated
with sales. In fact, sales and
marketing are two different
concepts although both are
closely coordinated. Marketing
is the presentation of the
products and services and
making them available to the customers with the goal of generating profits.

Sales, on the other hand, is the output of marketing implementations. A business produces
good product sales out of effective marketing programs while poorly planned marketing
plans end up in low sales generation.

Focusing more on the concept of marketing, a business organization must invest in

intensive marketing activities, what with the stiff competition that exists in almost every
kind of industry. Marketing introduces your products and services to your potential
customers and target market. It is an important factor in the success of a business.

Marketing is otherwise known as advertisement of the products and services that your
company can offer to the market. So, the old maxim that no advertising is the worst kind of
advertising remains to be true especially at this time when modern marketing methods
have been introduced.

Marketing can be conducted in various types and techniques. A company can invest in any
marketing technique that works best and is effective to the customers. But in this article, let
us mention three proven types of marketing that most companies have been using in their
product and services campaigns.
Offline Marketing:

The advent of modern marketing has

been very helpful for most business, but
traditional marketing is still as effective
and powerful as it used to be. Not to be
overlooked in this age of computers and
internet technology, offline marketing is
still widely used by many businesses.

Tri-media or advertising through print ads, television, and r adio have proven to be
effective means of advertising and increasing product awareness even until now.
Newspapers continue to be used actively and widely circulated by many print media
organizations where businesses occupy portions and spaces in the Classified Ads to
introduce their products and services.

However, companies reap more benefits if online and offline marketing methods are
combined. A good example is the use of direct mail in order to lead customers to the
company website. In fact, a company can save a lot with proper combination of marketing
methods since offline marketing can be costly.

Online Marketing:

Online marketing is equally powerful and effective as

offline marketing. In fact, companies save a lot on
their marketing campaigns which are done through
the internet. Small-scale businesses can benefit
greatly from online advertising if marketing budget is
an issue.

Apart from the savings a company can get, it can also

advertise its products alongside large-scale
companies. Affiliate marketing is a common type of online marketing where a company ties
up with an affiliate or an online advertiser that will take care of advertising the companys
products and services to thousands of online users. Another example is online video
campaign with a production cost that is a lot lesser than television advertising.

One particular advantage of online marketing over traditional forms of advertising is that it
can easily reach a huge number of individuals in a short span of time. Plus, the
advertisement lasts longer and is unlimited.

FUNCTION OF MARKETING

Business owners everywhere recognize that if they want to make money, they have to sell
their products or services. But what you might not know is that there are actually seven
functions of marketing that span everything from distribution to pricing.

Distribution

Distribution is about deciding how you'll get the goods or services you want to sell to the
people who want to buy them. Having an idea for a product is great, but if you aren't able to
get that product to the customers you aren't going to make money. Distribution can be as
easy as setting up shop in the part of a city where your target customers are -- but in an
increasingly interconnected world, distribution more often than not now means that you'll
need to take your products or services to the customers.

Financing

It takes money to make money. As a business owner, an important function of marketing a

product is finding the money through investments, loans, or your personal capital to
finance the creation and advertising of your goods or services.

Market Research

Market research is about gathering information concerning your target customers. Who are
the people you want to sell to? Why should they buy from you as opposed to a rival
business? Answering these questions requires that you do some on-the-ground
observation of the market trends and competing products.
Pricing

Setting the correct price for your product or service can be a challenge. If you price it too
high, you might lose customers -- but if you price it too low you might be robbing yourself
of profits. The "right" price normally comes through trial and error and doing some market
research.

Product and Service Management

Once you've determined the target market and set the price of your product or service, the
goal becomes to effectively manage the product or service. This involves listening to
customers, responding to their wants and needs, and keeping your products and services
fresh and up to date.

Promotion

Most business owners are familiar with the idea of promotion. Advertising your products
and services is essential to attracting new customers and keeping existing customers
coming back. As the marketplace changes, you'll want to respond appropriately by tailoring
your promotion messages to new media (such as Facebook or Twitter), by sticking with
more conventional outlets -- or by using a mix of the old and new.

Selling

While we tend to think of selling and marketing as being closely linked, selling is last on the
list of the seven functions of marketing. This is because selling can happen only after you've
determined the wants and needs of your customer base and are able to respond with the
right products at the right price point and time frame.

The societal function of marketing

In modern society production and consumption are apart from each other. Marketing
connects them. From the societal point of view, marketing is a philosophy which shows
how to create effective production systems and consequently prosperity.

The traditional and integrating functions of marketing

Traditionally, marketing has been seen as a link between production and customer. The
situation could be captured better by using the term selling. Selling is associated to the so-
called "Production and Sales Eras of Marketing". Slogans: "Make what you can make" and
"Get rid of what you have made" describe the traditional view of marketing/selling.

The following figure shows the role of traditionally oriented marketing in (traditionally
oriented) management.

Marketing was born out of a need to take better into consideration the demand factors in
production planning. The function of marketing is to channel information of consumer
needs to the production and satisfaction of needs to consumers. The basic power of
marketing is the aspiration to produce and sell only that kind of products which have
demand. Marketing integrates the whole company to serve this demand. Marketing aims at
effective production systems, where information is transmitted effectively between
production and consumption.

THE IMPORTANCE OF MARKETING:

Why You Should Be Marketing Your Business

Marketing is possibly the most important activity a business can partake in. It is the one
activity that most directly affects the amount of recognition and sales that a company gets
and this determines the level of profitability. Basically, if youre marketing your business
well, it will make profits and if youre notyou could be in trouble. Even the most brilliant
products and services wont survive without marketing efforts. How could a business
continue if nobody knows about them?

The marketing umbrella covers many different fields, from advertising to public relations
to promotions to sales. Marketing combines all of these fields in order to introduce your
product or service to your potential customers. If youre not using the channels in the best
way, your potential customers wont have any way of knowing about your product or
service! Many great companies have a hard time or end up failing because their sales are
dropping due to lack of marketing efforts. One of our courses, Lean Marketing for
Startups, examines some great marketing tactics that even small companies can pull off
well. Affiliate Marketing Training explains the concept behind Affiliate Marketing,
another great way for your company to advertise itself on the cheap.

The good news is that marketing isnt rocket science. Though it does take some smart ideas
and thoughtful execution, marketing can be simple and incredibly cost-effective. Here are a
few reasons why Marketing is important to your business.

Awareness and Recognition

In order for your business to succeed, you need customers to know and recognize your
brand and product. Unless your business name is known and you already have connections
built with all your potential buyers, it is extremely important to promote your company
and build awareness. Without marketing, you wont be able to maximize your full potential
because your customers wont be aware of you and your services. Using Marketing
methods increases your chances of being utilized by prospective customers.

Increased Sales

As soon as potential customers begin to recognize your company, your chances of making a
sale are increased. Your company will start to see a hike in sales if marketing campaigns
are doing their job well. They also encourage new customers to spread the word about
your company, causing even more word-of-mouth promotion. Keep close track of your
sales during different marketing campaigns so that you can determine which ones are
directly impacting sales and which ones might not be working as well. Our course, Get
Your Marketing In Order For Higher Profits, provides more information on how stellar
marketing drives sales.

Building Trust

The more familiar consumers are with a company, the more likely they are to purchase
something from you. Marketing not only increases awareness of your brand but also builds
your customers trust in you. Your audience will be thrilled to hear about your successes,
campaigns you are running, giveaways, and other activities because they all work together
to form an image of your company as a sturdy, reliable business that they can depend upon.
As this trust is nourished, your business will continue to expand and your sales will
increase, too.
Contributing to a Marketplace

A healthy marketplace operates on competition. By marketing your brand, you are

outwardly competing with other businesses like yours and this is the idea of healthy
competition. Consumers have more than one option to choose from and they get to pick the
option that most appeals to them. You can leverage this in your favor by making sure you
have the best product or service on the market and also by being clever about the way you
market yourself. Make sure that your company image is friendly, trustworthy and reliable
in your marketing and you will succeed in competing against other businesses on the
market!

Marketing is a very important aspect in business since it contributes greatly to the success
of the organization. Production and distribution depend largely on marketing. Many people
think that sales and marketing are basically the same. These two concepts are different in
many aspects. Marketing covers advertising, promotions, public relations, and sales. It is
the process of introducing and promoting the product or service into the market and
encourages sales from the buying public. Sales refer to the act of buying or the actual
transaction of customers purchasing the product or service.

Since the goal of marketing is to make the product or service widely known and recognized
to the market, marketers must be creative in their marketing activities. In this competitive
nature of many businesses, getting the product noticed is not that easy.

Strategically, the business must be centered on the customers more than the products.
Although good and quality products are also essential, the buying public still has their
personal preferences. If you target more of their needs, they will come back again and again
and even bring along recruits. If you push more on the product and disregard their wants
and the benefits they can get, you will lose your customers in no time. The sad thing is that
getting them back is the hardest part.

Marketing Promotes Product Awareness to the Public

It has already been mentioned in the previous paragraph that getting the product or
service recognized by the market is the primary goal of marketing. No business possibly
ever thought of just letting the people find out about the business themselves, unless you
have already established a reputation in the industry. But if you are a start-out company,
the only means to be made known is to advertise and promote. Your business may be
spending on the advertising and promotional programs but the important thing is that
product and company information is disseminated to the buying public.

Various types of marketing approaches can be utilized by an organization. All forms of

marketing promote product awareness to the market at large. Offline and online marketing
make it possible for the people to be educated with the various products and services that
they can take advantage of.

A company must invest in marketing so as not to miss the opportunity of being discovered.
If expense is to be considered, there are cost-effective marketing techniques a company can
embark on such as pay-per-click ads and blogging.

Marketing Helps Boost Product Sales

Apart from public awareness about a companys products and services, marketing helps
boost sales and revenue growth. Whatever your business is selling, it will generate sales
once the public learns about your product through TV advertisements, radio commercials,
newspaper ads, online ads, and other forms of marketing. The more people hear and see
more of your advertisements, the more they will be interested to buy.

If your company aims to increase the sales percentage and double the production, the
marketing department must be able to come up with effective and strategic marketing
plans.

Marketing Builds Company Reputation

In order to conquer the general market, marketers aim to create a brand name recognition
or product recall. This is a technique for the consumers to easily associate the brand name
with the images, logo, or caption that they hear and see in the advertisements.

For example, McDonalds is known for its arch design which attracts people and identifies
the image as McDonalds. For some companies, building a reputation to the public may take
time but there are those who easily attract the people. With an established name in the
industry, a business continues to grow and expand because more and more customers will
purchase the products or take advantage of the services from a reputable company.

Marketing plays a very essential role in the success of a company. It educates people on the
latest market trends, helps boost a companys sales and profit, and develops company
reputation. But marketers must be creative and wise enough to promote their products
with the proper marketing tactics. Although marketing is important, if it is not conducted
and researched well, the company might just be wasting on expenses and time on a failed
marketing approach.

MARKETING - PROMOTION STRATEGY

Promotion is the method

you use to spread the word
about your product or
service to customers,
stakeholders and the
broader public.

Once youve identified your

target market, youll have a
good idea of the best way to reach them, but most businesses use a mix of advertisin g,
personal selling, referrals, sales promotion and public relations to promote their products
or services.

1. Advertising

2. Selling

3. Sales Promotion
1. Advertising

What is advertising?

Advertising is a form of communication designed to persuade potential customers to

choose your product or service over that of a competitor

Successful advertising involves making your products or services positively known by that
section of the public most likely to purchase them.

It should be a planned, consistent activity that keeps the name of your business and the
benefits of your products or services uppermost in the mind of the consumer.

Why advertise?

The objective of advertising is to increase your profit by increasing your sales. Advertising
aims to:

Make your business and product name familiar to the public

Create goodwill and build a favourable image

Educate and inform the public

Offer specific products or services

Attract customers to find out more about your product or service

Commonly used media

There are many media options open to advertisers. Which media you use will depend on
who you are trying to reach, what you want to say and your budget. Often a combination of
media (the media mix) can be used to good effect. Remember to keep your branding and
message consistent across all media. This includes use of colours, logos, design elements
and fonts.

Word of Mouth Advertisement

Word-of-mouth marketing is probably the best form of advertisement a company can ever
invest in. Not a single penny is spent by the company with this kind of advertising; only
excellent customer satisfaction is needed to make this campaign effective. Always keep a
proactive approach in dealing with customers and go the extra mile. Building good
relationships with customers keeps them in the business. The good news is they will tell
their friends and people they know about your company and the kind of customer service
you have. With an effortless process, your customers gradually increase in number which
in turn increases company profit.

In business, companies must understand that everything is a risk. Even the cost of investing
in marketing campaigns is a risk since it is not a guarantee that the company will succeed.
But a company that will not make the move to be known to the public will also run the risk
of losing the business eventually because of lack of public awareness on the products and
services. Any type of marketing can be effective as long as a proper marketing strategy is
designed.

Stationery

Stationery, which includes letterheads, envelopes and business cards, is a means by which
your business image or name identification is projected. Good quality stationery, used
with care and attention and with a high standard of presentation, is an everyday means of
presenting your business image.

Window display or office front

The external presentation of your business office or shop is one of the principal ways of
establishing your business image. An attractive, well maintained exterior with clear, bold
sign writing is an essential start. Windows should be bright, attractively presented,
scrupulously clean and well lit at night. The display should be arranged neatly and aimed at
projecting an attractive company image and providing a reason to buy your products or
services. Above all it should have sufficient impact to attract attention.

Press advertising

This is a commonly used form of general advertising and includes advertising in all press
such as newspapers, magazines and journals. Press advertising is suitable for image
building, information dissemination and sales campaigns. It is also a very affordable option
for small businesses.
 Radio

Radio is considered by many advertisers as an ideal medium due to its ability to reach
specific target groups e.g. teenagers, racing followers or grocery buyers. Radio advertising
covers spot adverts (usually 15 or 30 second), promotions or talkback/DJ discussions. Most
radio stations offer packages which include production and extension of your radio
campaign through their websites.

Television

Television is a powerful advertising medium because it creates impact through sight, sound
and movement however the cost of producing the advertisement and procuring sufficient
air time to allow the campaign to work often makes it prohibitive for small business.

Direct mail

This is a broad category covering direct communication with the consumer through email,
post or fax. It can include newsletters, catalogues and letters. If you plan to use email, be
sure to comply with national anti-SPAM legislation which makes it illegal to send
unsolicited commercial electronic messages. Visit the Australian Communications and
Media Authority website for more details - www.acma.gov.au.

Outdoor

This is any type of advertising which is done outdoors, including static advertising such as
billboards, backs of street benches and bus shelters or mobile advertising displayed on
buses, trains, taxis or towed signage.

Ambient

Refers to any form of advertising that occurs in a non-standard medium outside the home,
and usually where your consumers are likely to be. Its limited only by your imagination
and includes things like advertising on the back of shopping receipts or toilet doors at the
cinema, placing branded coasters at the local pub, projecting onto buildings, advertising
inside lifts or distributing branded cups.

Cinema
You can purchase cinema advertising by individual cinemas or screens for a set amount of
screenings or runs. Most providers offer packages which include production and
screening of your advertisement

Point of Sale

Advertising at the point where the consumer makes a purchase decision eg: floor stickers,
in-store digital advertising, shopping trolley signage, shelf or counter posters or playing
interviews about your product in store.

Online

The options for online advertising continue to grow rapidly. They include advertising on
your website, advertising on other websites, creating links to your website from other
websites, publishing blogs, offering online product games, social networks and forums.

Directory listings

Many consumers use business directories to find a supplier. Directories include the yellow
or white pages, union directories, trade directories or local business directories.

2. Selling

What is selling?

Put simply, selling is the exchange of goods or services for an agreed sum of money.

Depending on the circumstances, a sales transaction can include one, some or all of the
following stages.

Prospecting and qualifying identifying qualified prospects ie: those that are likely to
want or need your product or service and can afford to pay for it.

Pre-approach undertaking research about prospects to assist in the actual selling

process.

Approach making actual contact with the prospect in person, by phone or in writing.

Presentation and demonstration presenting and demonstrating the features and

benefits of your product or service in order to convince the prospect that their want or
need can be satisfied.
Handling objections demonstrating the product or service value to overcome real or
perceived objections or misunderstandings that are impeding the purchase decision.

Closing bringing the selling process to a successful conclusion by either asking for the
order or responding to a positive decision from the prospect.

Follow-up proactive or reactive contact with the purchaser to establish their satisfaction
level and to address any problems that may exist.

In planning the selling element of your marketing strategy you will need to consider the
following:

The size and structure of your sales team

Recruiting, training, motivating and evaluating individuals and the team as a whole

The remuneration structure

The location/territory to be serviced

Management and communication systems

Selling is a particularly important element if you are marketing services because the
purchaser of a professional service is in fact buying the capabilities of the seller. So he or
she would be closely evaluating the behaviour and characteristics of your sales person,
your business, its reputation, facilities and appearance.

3. Sales Promotion

What is sales promotion?

Sales promotion relates to short term incentives or activities that encourage the purchase
or sale of a product or service. Sales promotions initiatives are often referred to as below
the line activities.

What are the major sales promotion activities?

Sales promotion activities can be targeted toward final buyers (consumer promotions),
business customers (business promotions), retailers and wholesalers (trade promotions)
and members of the sales force (sales force promotions). Here are some typical sales
promotion activities:
Consumer promotions

Point of purchase display material

In-store demonstrations, samplings and celebrity appearances

Competitions, coupons, sweepstakes and games

On-pack offers, multi-packs and bonuses

Loyalty reward programs

Business promotions

Seminars and workshops

Conference presentations

Trade show displays

Telemarketing and direct mail campaigns

Newsletters

Event sponsorship

Capability documents

Trade promotions

Reward incentives linked to purchases or sales

Reseller staff incentives

Competitions

Corporate entertainment

Bonus stock

Sales Force Promotions

Commissions

Sales competitions with prizes or awards