Chapter 10: Marketing

Marketing is the process where there is interaction between buyers and sellers for the purchase of goods and services. Marketing has different approaches, sometimes involving pre and post-production processes. Marketing performs the following functions in the exchange of goods and services:

1. Planning

2. Designing of the product

3. Packaging

4. Labelling

5. Branding

6. Warehousing

7. Transportation

8. Support services

A customer, at the time of purchasing a product, will look forward to the utility that the product offers. Customers seek many types of benefits from a product which can be social, psychological or functional. Therefore, it can be said that the product is a bundle of utilities as there are many benefits of owning the product.

The products that are used as inputs in the production of other goods are known as industrial products. These goods are used as raw materials for producing finished goods, on the other hand, consumer products are those products that customers utilise for consumption. The points of distinction between industrial and consumer products are as follows:

Labelling is an important part of the packaging process. It gives the product users a basic idea of what the product is all about. Here are the functions of labelling:

1. It provides a small description of the product where it mentions the application, warnings, directions of use etc.

2. It helps to identify the product easily. It helps consumers to differentiate between products.

3. It helps in easy classification into different categories of the same product.

4. It helps businesses to promote their product. Attractive labelling is a great way to promote any product.

5. It provides the necessary information as mandated by law regarding the product.

Intermediaries are an important part of product marketing. They help in the transfer of goods from the production centre to the consumers.

In the case of non-durables, intermediaries perform the following functions:

1. Sorting goods into homogeneous groups based on their characteristics.

2. Maintains large stock of goods that ensures supply is well maintained.

3. Breaking down bigger stocks into small units.

4. Maintaining a variety of goods in a single place.

5. Helping the manufacturers in promoting the product by putting up display boards and banners.

6. By acting as a middleman and setting the deal by negotiating the product price so that both consumer and manufacturer are satisfied.

7. Acquiring goods from manufacturers and keeping them in safe custody and bearing the risk of market fluctuations.

The movement of products from the place of production to the place of consumption is called physical distribution. The components of physical distribution are as follows:

1. Order processing: Order processing consists of steps such as order placement, order transmission, inventory maintenance, goods delivery etc. As such processes are time-consuming, a physical distribution system must ensure proper order processing. Customer satisfaction can be achieved by fast and accurate order processing.

2. Product transportation: Product transportation is the physical movement of goods from the production unit to the consumers.

3. Warehousing: It is the process of storing the goods obtained from manufacturers before being introduced for sale to the customers. Warehouses provide ready stock of goods that can be made available in the market.

4. Inventory maintenance: Inventory is maintained to provide a timely supply of goods; it promotes customer satisfaction. Inventory maintenance is cost intensive; therefore, a firm must find the balance between inventory and customer satisfaction.

Advertising is a technique for promoting a product. Companies use advertising as a medium to attract customers towards their products in order to make a sale. The most common mediums of advertising are newspapers, television, internet, social media, magazines etc.

Here are some of the important features of advertising:

1. Advertising is a paid form of promoting products or services. The sponsor bears the cost of advertising.

2. It is an impersonal mode of communication. It involves no face-to-face communication between the advertiser and the customer. It is devoid of personal touch.

3. There are some sponsors who like to design an advertisement and also bear the costs that are involved.

Sales promotions are incentives that are sometimes offered to encourage sales of the product. The typical sales promotions will include gifts, discounts, free samples etc. These activities are in addition to the other promotional activities taken by the company, such as direct selling and advertising. These promotions drive purchases. Sales promotional activities are beneficial during a new product launch, where they can boost sales.