Marketing plays a very important role for the success of the organization. So, following are seven functions of marketing which should be understood by strategists. Basically to point out the strengths and weaknesses of the organization more effectively.
- Analysis of customers
- Selling of products/services
- Planning of products and services
- Marketing Research
- Opportunity analysis
Functions of Marketing
Following is the detail of 7 important functions of marketing, you need to be aware of them all. Once you do understand all these functions of marketing. Then you can easily understand the Strategic Management and strategic management implementation in business.
Analysis of Customers
It is one of the major functions of marketing in which the needs, wants and desires of the customers are examined or evaluated. For this purpose customer surveys are administered, consumer information is analyzed. Also market and Product Positioning Strategies are evaluated, profiles of customers are developed. In fact where optimal marketing segmentation strategies are determined. An effective mission statement can be developed with the help of customer profiles. Even that are maintained by the organization during customer analysis. The demographic characteristics of the customers of the organization are identified through these profiles. The needs and wants of customers are better identified with the help of managers, distributors, suppliers. As well as with wholesalers and creditors etc. by providing useful information about customers. The buying patterns of the customers are continuously monitored by the successful organizations.
More From Business Study Notes:- Product Positioning Strategies
Selling of Products and Services
The potential of an organization to sell some products or services guide the implementation of strategy. There are many marketing activities that are included in the selling function like advertising, personal selling. Also sales promotion, sales force management, publicity and customer relations etc. When an organization adopts market penetration strategy, these activities are quite important. The effective selling tools for industrial and consumer products vary. Those organizations that deal with industrial products should apply personal selling activity to the functions of marketing. On the other hand the organizations that deal with the consumer products should adopt the policy of advertising. While performing an internal strategic management audit, the strengths and weaknesses of the organization in its selling function should be considered.
There is an emerging trend in which the products and services are advertised on the internet. For this activity, sales rates are based on the advertisement rates. In this situation, the rate of Advertisement is based on the number of expected individuals. In order to view a given advertisement which is quite different from the traditional advertisement form. These advertising rates of new cost per sale online advertisement are possible. Since there is a system of checking of different users on the internet that views particular online advertisements. Also there is further possibility to keep record of the online viewing customers of particular advertisements. So that actually buy that product or service. The advertisement is free in such cases when there is no sale. Banner is the most popular type of advertisement on the internet. However, mostly people on the internet ignore the advertisement through online banners.
Planning of Products and Services
Functions of marketing include an important function in which the products and services are planned. For this purpose certain activities are carried out like test marketing, positioning of product and brand. Also Product Packaging, devising warranties, determining options of product, ascertaining features of the product. Along with checking style of the product, ascertaining quality of the product, deletion of older products and customer services provision etc. When an organization is involved in a New Product Development Process or Diversification Strategy, then planning of products and services is particularly important for it.
More From Business Study Notes:- New Product Development Process
Test marketing is considered as one of the most potential techniques of planning of products and services. In test marketing technique, alternative marketing plans are tested. The future sales of new products and services are also forecasted in test marketing technique. Following are some of the important considerations that should be focused by the organization while conducting their test marketing.
- The number of cities that should be included
- The types of cities that should be included
- All the type of information that should be collected during testing
- Type of action that needs to be taken after the completion of the testing.
It is more effective for the consumer goods organizations to perform test marketing as compared to industrial goods organizations. The organization is able to point out its weak products and poor marketing strategies. As before starting large scale production of its proposed products which is only possible through test marketing.
Pricing is one of the major functions of marketing which needs to be handled carefully. Since customers are much sensitive to this aspect of marketing. Following are the stakeholders list that is directly affected from the pricing function of marketing.
The prices that are charged from the customers against the offered products or services should be fair enough. When an organization decides to control the pricing of its product or services. Then it formulates and applies forward integration strategy. Moreover, when the government decides to have control over prices of products and services of its country. Then it imposes constraints on certain price discriminations, price fixing, unit price. Along with price advertising, minimum price and price controls.
Those organizations that compete with one another should avoid discounts. There should be no credit terms and conditions for selling of products or services to the customers by the organizations. The costs, markups and prices should not be discussed among people at meetings of trade associations. No list is struggled to prepare that reflects new prices of products in the meetings with competitors. There should not be restrictions on production to keep prices high along with the avoidance from rotation of low bids on contracts. The strategists should focus both long run as well as short run aspects of price. Since any change in it can easily be copied by the competitors. All the price cuts of competitors are aggressively matched by dominant organizations mostly.
Change in Price
Another aspect of pricing of products and services is related to the exchange rate of dollars. When there is an increase in the price of dollar. Then there is a choice in front of the multinational organizations of the USA. These can either enhance the prices of their products and services in the foreign countries. Nor bear the risk of losing market share and sales. These organizations alternatively keep prices of their products and services steady. In fact while earning less portion of profit but ultimately enhances the dollars income from their exports.
Functions of marketing include distribution functions in which goods are moved from the point of their production to the final customers. Distribution function is much broader enough and includes the following sub-functions.
- Distribution channels
- Distribution coverage
- Retail site location
- Sales territories
- Inventory levels and location
- Transportation carriers
- Wholesaling and retailing etc.
In recent years, the manufacturing organizations have not sold their goods directly to the customers. There are a number of marketing entities that perform the function of intermediaries. Of course by developing a connection bridge that connects manufacturers with the customers. There intermediaries may be in the form of retailers, wholesalers, middlemen, agents, brokers, facilitators, simple distributors or vendors etc. Whatever the form they have, their main role is to transfer the goods manufactured from the manufacturer. Yet deliver it to the customer at a proposed price. Organizations do not have much resources, expertise or connections with general people that they utilize to spend on the distribution of their goods. For this purpose they need intermediaries that can serve this function effectively.
Forward Integration Strategy
When the organization decides to formulate and implement market development or Forward Integration Strategy. Then its distribution becomes quite important. Effective distribution of the products is considered as one of major challenging and complex decisions that organization needs to consider. There are flourishing intermediaries in the economy. Since the producers lack the required financial and other resources to perform direct distribution to the final customers. Those producers who have the required resources and expertise to directly distribute the products to customers gain the competitive advantage. Although by generating more profits which will be helpful in the improvement and expansion of their operations. For example it is not possible for General Motors to purchase its independent dealers which are more than eighteen thousand in number.
The potential organizations do working to point out different alternative ways. Subsequently, that can become convenient for them to reach their final market. There are a number of approaches for distribution of products to the final consumers. The simple way is through direct selling but with the involvement of one or more wholesalers. Along with retailers, the process can become more complex and systematic. The weaknesses and strengths of all the alternative channels should be accessed through the economic, adaptive and control criteria. The costs and benefits of different wholesaling and retailing options should be considered by the organizations. Thus the channel members of the distribution should also be positively controlled by the organization. Also the proper adaptation to future change can be made. When a marketing channel is finalized by the organization. Then it should work in collaboration with that channel for a longer period of time.
The systematic collection, recording and analysis of the information about the problems. Basically pertaining to marketing of products or services is referred to as marketing research. The important strengths and weaknesses of the organization are highlighted in the marketing research. There are many tools, instruments, techniques, procedures and concepts. Through which marketing researchers employ in order to gather information. All the major functions of organization are supported by the activities of marketing research. Those organizations that have potential skill of Marketing Research can point out the strengths and weaknesses of the organization. In fact which are further improved through formulation and implementation of efficient strategies.
The last function of marketing is the opportunity analysis in which certain market decisions are analyzed. In order to assess the costs, risks and benefits associated with those decisions. Cost/benefit analysis is mostly used in the function of opportunity analysis. There are three steps in performing cost/analysis which are as follows:
- Calculation of total costs linked with decision
- Estimation of total benefits emerged from the decision
- Comparison of total costs is made with the total benefits.
When the expected benefits are more than the expected costs associated with the decision. Then the opportunity available is more attractive. In certain cases the variables that are involved in the cost/benefit analysis cannot be measured. So it is better to perform reasonable estimates so that the whole process is facilitated. Risk is another key factor that should be considered in the analysis. Therefore, it is also beneficial for organizations to conduct cost/benefit analysis. In fact when it is trying to find alternative ways to become socially responsible.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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