Unit 5
Marketing Function
Merchandizing Function
Merchandising Function is also known as exchange function. This function of marketing helps in the transfer of products as well as ownership from producer to customers. The merchandising Function is a key function in marketing as it matches the products with buyers' need and makes them available in the market.
The major merchandising functions in marketing involve:
- Product planning and develpoment.
- Buying and selling.
Buying Function
Concept
As one half of exchange, buying is the heart of marketing. In the absence of buying, marketing process does not exist. The process of taking goods by paying certain price is called buying function. Having said that, in marketing, the function of buying is much beyond that. In boarder sense, the buying function of marketing includes:
- Determination of necessary products/ services.
- Identification of supply sources.
- Selection of quantity, quality, grade and size associated with the product.
- Decision on price and discount.
- Delevery date and means of transport.
- Transfer of ownership.
Elements/Functions of Buying
The major elements of buting are listed below:
- Planning for Buying
- Contactual Function
- Negotitation
- Assembling
- Contractual Function
Method Of Buying
Many buying method are adopted based on the nature of products, volume and the condistion of market. Some of the popular methods of buying are listed below:
- Conservative Buying
- Speculative Buying
- Contract Buying
- Concentrated Buying
- Diversified Buying
- Reciprocal Buying
- Buying by Inspection
- Buying by description
- Buying by Sample
- Market Buying
- Group Buying
- Buying through commision agent
Selling Function
Meaning of Selling
Selling is the process of demand identification, creation, and development of a product that satisfies the needs or wants and persuasion of customer in developing successful exchange relationship. Selling and marketing are often considered distinct function with the promotional element of the marketing mix. However, when looking at marketing and communications as a big umbrella that ecompasses all promotional efforts, selling is a more personalized form of communication than other marketing functions.
"Selling function is not only concerned with transfer of ownership of goods from sellers to buyers. It also includes the activities like to find out the demand of the product, provide information about availability, advantage, disadvantages and use of the products, etc."
-Prof. Pyle
"Selling in its broad sense, has the purpose not only of making sales but indentifying prospective customers, simulating demand and providing information and service to buyers."
-Cundiff, Still, and Govani
Elements/Functions of selling
The major elements of selling are listed below:
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- Product planning and development
- Contactual function
- Demand creation
- Negotiation
- Contractual function
Components Of Distribution Function
Distribution(Place) is one of the major elements of marketing mix. Distribution refers to the movement of production and services from producer to the consumers using various channels. Distribubtion is concerned with the activities invloved in transferring products from producers to final buyers and users. In boarder terms, distribution can be defined as the process where by products and services are delivered from producers to consumers and organizational buyers at a desired place and time.
"Distribution is a term employed in manufacturing and commerce to describe the broad range of activities concerned with the efficient movement of finished products from the end of the production line to the consumer."
"Distribution includes the various activities the company undertakes to make the product accessible and available to target customer."
Production and sale centre, in most of the cases, do not remain in the same place. Distribution is thus essential to transfer products from the point of production to the point of consumption. Distribution creates time utility, place utility and ownership utility of products. Management of products storing creates time utility whereas exchnage creates ownership utility, Management of good transport system creates place utility.
Production have no utility at production place. Their utility increases after they have been taken to consumption places. For example,publisher have no use of books, but when they reach among readers and students, their utility increases.
Distribution system combines channel of distribution to have a smooth movement of products form point of production to point of consumption. Distribution hence focuses on delevering right product to the right place at the right time through right channel with minimum chances of loss or damage and transferring ownership from seller to buyer or at a different distribution chains.
Methods of Distribution
Based on the directness of distribution, there are mainly two methods of distribution:
- Direct Distribution
- Indirect Distribution
Direct Distribution
If the producer itself is involved in the distribution of its products, is is called direct distribution. It is a method of distribution used by organizations to move from production point to buyer on their own.
Direct distribution may involve the following techniques:
- Distribution through the producer's own Distribution Network.
- Distribution through the producer's own Sales Agents.
- Distribution Through The Produce's own Sales Depots.
Advantage of Direct Distribution
There are certain advantage of indulging in direct distribution. They are listed below:
- The producer exrecises greater control over distribution system or distributors.
- Standardized services can be offered to all the customers.
Limitation Of Direct Distribution
- Producer has to spend a lot of time in distribution activities,
- Producer has to invest a lot of money in creating and building its own distribution network.
- Producer may have difficulty in developing and establishing public relations with all the customers.
Salesmanship
Salesmanship can be defined as the ability of an individual to sell a product to a customer by eliminating their ignorance and doubtfulness about the product in such a way that both the buyers as well as the sellers gets to benefit from the deal. It also include the ability to generate a need for the product and to make customers want the product.
The concpet of salesmanship has envolved over time. Traditionally, in this concept, the salesperson uses to distribute the samples of the product to the potential customers and then wait for them to buy it. The process was not very effective and also was not very budget friendly. Thus,a new modern concept of salesmanship was developed where the salesperson creates a demand amongst the potential customer. This is purely based on the interactive features of salesmanship where s/he is able to convice the potential customer to buy their product. It saves a lot of resources in terms of time and money. Salesmanship has become an important concept as in the modern days, there is a large amount of competition. This concept is very important for both buyer and seller as it provices effective crystal-clear communication amongst them. It is very useful to create brand awarness and customer loyalty.