Why Marketing is Important: Basics of Marketing
“A market is an area over which buyers and sellers negotiate for the exchange of a well defined commodity.”
“Marketing is the process of determining consumer demands for a product or service motivating its sale and distributing it into ultimate consumption at a profit.”
Why Marketing is important & Its Functions :
This is an important function of marketing and occupies much of the time of both business undertaking and consumers. This may be relatively simple or exceeding complex whether this function is conducted by the manufacturer, the wholesale or the retailer. In the present economic stage, the success of business depends on the effective purchasing system. So large business concerns have separate purchasing department, may have experienced staff of buyers. The buying function includes the determination of needs, the selection of proper source of supply, title from the seller to the buyer. The buying function includes the determination of needs, the selection of proper source of supply, title from the seller to the buyer.
Selling is indispensable function of every business and is basic reason for the operation of business concerned that more sales must be obtained at less cost. But this function is expensive because it involves many activities i.e. creating demand, finding buyer, negotiating price and transferring the title.
Assembling is the physical act of putting together and collection of goods to obtain larger quantities of similar goods. It is more essential in case of marketing of agriculture commodities which are generally grown in similar quantities by larger number of producers in territories spread over vast areas. Concentration of raw material is necessary for the regular supply of the standardized materials because these are used in large volume by manufacturers.
4. Standardizing and Grading:-
Standardizing involves the determination of basic measure or limits to which articles being standardized. To standardize into give performance to grades.
Grading is a reality a part of standardization. It is process which tests the conformity of commodities to standards that have been previously set up. Product of agriculture and the extractive industries are usually graded according to general standard. Grading may be based on shape, size, color, strength, appearance, specific gravity and chemical contents.
5. Packaging and Packing:-
Packing is meant the placing of goods in small packages i.e. can or bottles etc. It may be regarded as an aspect of marketing because it has a considerable influence on sales in the domestic consumer market.
Packing is concerned with the wrapping and crating necessary for the transport or storage of goods. Many goods must be packed in order to be preserved or delivered to the buyers.
Dividing is another important function of marketing. As the wholesale require the product in large units according to the requirements of retailers. But retailers require the products in small quantity so they divide the stock into small units according to the need of customers. It enables the businessmen to reduce the bulk of commodities in order to take them more readily transportable.
7. Storage or Warehousing:-
Storage is a major marketing function which involves the utilization of substantial manpower and capital resources. The ultimate consumer finds it necessary to purchase some goods in advance of need and to store them for the future use. On the other hand, goods are produced in large quantities in anticipation of future demand and for the unknown customers. Warehouses are required to store the goods for the adjustment of supply to demand.
Transportation involves all kinds of movement of persons and goods from one place to another. It is the function of transportation to convey commodities from places where their utility is relatively low to places where it is higher. Because of the nature of natural resources, variations in climatic conditions, concentration of skilled or unskilled labor, large scale manufacturing, and raised or manufactured largely or exclusively in certain places. The principal economic basic for transportation is the enhancing the value of goods by the creation of place utility. Thus effective transport is indispensable to economic progress.
The whole modern production and marketing mechanism is based on credit and money. No person can think of conducting business without sufficient finance. There is wide gap between the production of goods and consumption of goods. So the product, distributing and consuming require large funds. When a retailer sells commodities on credit, he is rendering financing services. He may, in part shift this function back on the wholesaler who has extended credit to him, while the wholesaler, in return, may pass part of burden back to the credit granting manufacturer.
10. Risk Taking (Insurance):-
When the goods are sent by the seller to the buyer through rail, road and ship, there may be risk of loss. The goods may be lost or damaged or destroyed by sea perils, flood, fire, theft, storm and change in the temperature. The businessman and other exporters think, therefore, in terms of minimizing these risks by shifting them on others shoulder’s. So insurance provides safety against any unforeseen circumstances and ways to the business people to cover losses or dangers.
11. Market Information’s:-
As the demand for various products in national or international market have raised, the amount of information needed has also regarding trademark, quality go goods, method of packing, test and fashion of consumer nature of demand, prices to considerably increased. It helps a businessman to secure information regarding trademark, quality of goods, method of packing; test and fashion of consumer nature of demand, prices of goods are procedure of distribution. There are various method and ways by which such investigations and experiment may be conducted. It thus enables the producers to formulate and to carry out selling policies.
Basics of Marketing