the functions of marketing explained with examples
The 7 Functions of Marketing Explained With Examples
The functions of marketing assist to provide complete consumer satisfaction. This Buzzle article explains the 7 functions of marketing with examples.
Sounds Familiar
Movie buffs may be familiar with one of the most important marketing functions―promotion. A promotional campaign for a movie targets the common public and markets the film at the grass-roots level.
Marketing is one of the most important components for a business. No entrepreneurial venture can be completely successful if it is not marketed properly. There are different types of marketing gimmicks, and one needs to choose the most appropriate one as per the industry and target audience.
The marketing phase is defined by certain functions, which, when followed properly, lead to customer satisfaction. The paragraphs below list and explain the 7 functions of marketing and their importance.
The Seven Functions of Marketing
Product and Service Management
- When a company develops a product, it is done so in accordance with what its customers want.
- For new companies, this could be more challenging, since their products have not garnered preferences, as yet. Irrespective of this fact, every business has to design and change their product as per the customer requirements.
- Thus, product/service management deals with the designing, changing, updating, and modeling your product as per the customer's satisfaction.
- This may involve changing the color, size, functionality, quality, etc.
- The company could even decide to branch out into different sectors and create new versions of the product, to suit the consumer's needs.
- Consider that a company manufactures liquid soap.
- Over a period of time, if they understand (through reviews) that their customers prefer a particular fragrance, the next batch of production may possibly have liquid soaps with intoxicating fragrances, like strawberry, cocoa, lemon, etc.
- It may also be possible that the company is already aware of its target audience, and so they distribute the liquid soaps with two pre-decided fragrances.
- Now, again with the help of research, if they find out that only one of the brands is more popular, they may accordingly work on the one that has more public awareness, rather than the one which is not very popular. Accordingly, the production rates change as well, and so do the sales.
Distribution
- In simple words, it is how you plan to distribute your products.
- You must have an idea about channel management so that you can distribute your products carefully.
- You can distribute goods directly to the shop, go through wholesalers and retailers, go online, or even out of the country.
- It is very difficult to plan product distribution, because you need to study and understand your target customers well enough.
- You need to plan how and where to distribute your goods. In today's scenario, it is increasingly difficult to attract customers to one shop, since they are spoiled for choice. Therefore, if you plan to sell goods in a regular store, study the area and the competition thoroughly.
- If you plan to distribute products abroad, you need to find distributors accordingly.
- Online businesses work in a different way, and you need to be aware of the rising and falling tendencies on the internet.
- Consider a new company that manufactures hand-stitched chiffon tunics.
- To build up a reputation, the company would obviously choose a good clothing store to begin with, since no one may trust an online source.
- Once the clothes have been distributed at a popular boutique, the brand gains popularity, and then, the company can choose to distribute the same online.
- This way, the company no longer has to depend on the boutique brand name to sell their clothes, they can have their customers buy clothes directly from them.
Promotion
- This is one of the most important functions of marketing, almost synonymous with the term itself.
- Promotional tactics develop and increase brand awareness.
- You may have seen billboards and hoardings all over the city―the idea is to expose your consumers to your product name and brand as much as possible.
- Promotions involve highly innovative advertising strategies. And these strategies could range from print media to telemarketing, and from public campaigns to online marketing.
- Ultimately, your product should have brand recall.
- You may have often noticed that when a new supermarket or store is launched, they often have substantial discounts and other attractive offers. This is a promotional tactic..
- If there is a new company that sells ready-to-eat meals, they may offer one packet free on the purchase of 2 similar packets.
- Or, a supermarket may offer a 15% flat discount on goods for the first three days. These are effective promotional strategies that attract customers.
Price
- This is one of the challenging aspects of marketing.
- Fixing a price for your product requires extensive market research.
- This can be extremely difficult―if you set a low price, you are bound to get losses; if you set a higher price, you may not get customers at all.
- Again, prices keep varying as per the market situation.
- If your competitor has set a particular price, you may set the same as well, but after undertaking sufficient research about the other aspects of production and management.
- You may have to undergo a few trials runs until you are confident about setting the correct price range.
- You may also consider offering benefits, but be sure that your company generates profits.
- Consider a business that sells seasonal fruits.
- In such a case, the owner may or may not have competition. If he does, he may have to adjust the prices accordingly.
- If not, he may be the only seller in a widespread geographical area, and he can afford to increase the prices.
- In fact, if there are any weather changes, his product may become very expensive or cheap.
- Also, if the government imposes any import-export restrictions, the price may vary accordingly.
Selling
- You can sell your product only after understanding your customers.
- Decades back, selling was a simple affair that involved the buyer and seller.
- Over time, we have had retailers, wholesalers, shop owners, producers, distributors, etc.
- You may sell your products via retailers, or may sell it online as well.
- Selling depends on how much your product is preferred by the target customer base.
- Marketing is an efficient tool that helps company owners sell their products―whatever the method of selling.
- You may choose to sell your products directly or indirectly.
- If you own a store where you sell your own manufactured goods, you can personally see to it that you have assisting staff for the customers.
- If you sell products online, you must have proper explanatory brochures.
- If you go through retailers, make sure to explain all about the product.
Financing
- This again, is one of the most obvious functions of marketing. You need to invest to obtain returns.
- A company needs to have sufficient finance for advertising their product. In corporate terms, this is called, 'marketing fund'.
- There needs to be sufficient money available for marketing your product on television, in newspapers, through pamphlets, flyers, on the radio, on the internet, etc.
- Once the product starts gaining popularity, the company has to spend more in order to make their product easily available, attractive, and wanted.
- They may offer discounts, or reduce the cost of certain products, or have a free-product policy, etc.
- Suppose a company decides to rely completely on online advertising.
- In this case, the marketing funds will be restricted to creating a website, using other websites to launch your product, etc.
- Once the product becomes popular, the company may set aside some funds to attract customers.
- For instance, if it is an e-leaning company, they may offer their learning material and e-books free of cost to the first 50 people who register on the site.
- This will attract interested users, increase customer traffic, help the company gain popularity, and also help customers to decide if they are really interested in the site or not.
Marketing Information Management
- This function involves understanding your target audience.
- It involves understanding your customers' interests, needs, and wants.
- You have to collect information about them, analyze the same, and store it for future reference.
- You have to undertake a lot of research for this as well. One of the prominent ways to obtain and manage consumer information is to surf social media sites.
- When a particular product is in demand, you will find people chatting about the same on an everyday basis, and to an extent, you will understand what a section of the audience likes or dislikes.
- This is just one way, of course, another way is to carry out live surveys.
- As mentioned above, conducting customer surveys is one the most efficient ways to understand what your customers think about your company.
- A company may dispatch some of its promotional staff to malls and other stores to survey customers.
- Some may distribute feedback forms and analyze the data.
- Through these reviews, the company gets an idea about the customer's likes and dislikes. This information is stored and analyzed, and helps companies develop better business models.
The Significance of Marketing
- As mentioned earlier, no business succeeds without marketing.
- The ultimate aim of marketing is customer satisfaction. Your customers have to know about your products and services.
- Marketing helps increase sales, profits, and customer traffic.
- It helps a company establish a loyal customer base. For instance, consider a company that manufactures a brand of baby soap. If the owner markets the product in the most appropriate way possible, he is sure to garner a loyal clientèle. Tomorrow, irrespective of any negative reviews, bad publicity, or no promotion, the loyal customers of the product will continue to buy the same.
- On the contrary, if a product is not advertised at all, neither will it gain the attention of the media nor will it establish a faithful consumer base. Considering the fierce competition, it will be gone from the market in no time.
- Another important point to be noted is the brand awareness that is brought forth due to marketing. This is particularly true for new companies.