The Marketing Functions

Modern marketers try to make consumers realize how marketing meets their demands for goods and services.  The term added value describes the advantages that marketing provides for the consumer. The value added emphasizes what the consumer receives in return for the costs involved in brining the product to the market.  In the process of adding value to products, many marketing functions occur.  The marketing functions explain the working to the overall marketing system.  They help connect the producer and the consumer.  How these functions are carried out and who performs them may vary from one economy to the next, but they are still carried out in every marketing system.  The eight functions of marketing are classified in three main groups:

• Exchange;
• Physical distribution; and
• Facilitating functions.

The two exchange functions are buying and selling.  Exchanges involve the transfer of products from the buyer and seller.  Before marketers can buy goods for resale, they must determine the customers’ needs through careful research.  Marketers must find the suppliers who can best provide the goods that will satisfy these needs.  They must also arrange the best shipping dates for the merchandise.  The selling functions include targeting customers, meeting competition, and setting prices.  They also involve persuading consumers to buy goods.

Physical Distribution functions involve the actual movement of goods from one producer to another, from producer to marketer, and from marketer to consumer.  Tow important physical distribution functions are transporting and storing.  Many products travel log distances, often by rail or truck, from the producer to the actual market so that consumers have access to the products.  Marketers must not only find the best way to ship a product but the must also know time schedules and costs involved.  On their way to the market, goods may often be stored in warehouses.  This is necessary when they are produced ahead of time they will be needed or when large shipments must be broken down into smaller shipments before being marketed.  Transportation thus gets goods to the right place, while storage gets them to the market at the right time. 

Facilitating Functions support and make easier the basic buying and selling, transporting and storing functions.  These functions include: 

• Standardizing and grading (offering goods of uniform size and quality)
• Financing (providing the necessary funds to produce, store, transport, and sell goods and services).
• Risk bearing (planning the uncertainties of marketing activities through risk management and insurance).
• Gathering marketing information (continually collecting and analyzing the information needed to plan, organize, conduct, and evaluate marketing activities). 

I will talk about each one of these functions later in greater detail.