Session II

Scope of marketing- Functions of marketing - Utilities of marketing - Importance of

marketing (Sector wise)

Scope of Marketing

In today's world of marketing, everywhere you go you are being marketed to in one form or

another. Marketing is with you each second of your walking life. From morning to night you

are exposed to thousands of marketing messages every day. Marketing is something that

affects you even though you may not necessarily be conscious of it.

The definition of marketing as discussed under the heading ‘What is marketing’ in last

session, can be summarized as the exchange of things that satisfy needs and wants of the

consumers; where the terms ‘exchange’ and ‘things’ have broad connotations today.

Marketing ‘things’ include not only physical goods (e.g. biscuits) but also people (e.g.

physicians), places (e.g. Kerala – God’s own country), property (e.g. shops in malls or

financial bonds), events (e.g. common wealth games), experiences (e.g. fun worlds),

organizations (e.g. schools), information (e.g. encyclopedia), services (e.g. legal services), and

ideas (e.g. innovative concept) etc.

Therefore, the scope of marketing is not limited to the physical goods, and dealing with the

consumers but includes virtually anything on the offer that may not necessarily be

addressing to consumers.

LET US EXAMINE THEM BRIEFLY

Goods: A tangible item which can be an article, commodity, material, merchandise, supply, wares produced from agricultural, construction, manufacturing or mining activities.

Services: Products that have intangible properties such as banking, consultancy, education, insurance, accounting, expertise, medical treatment or transportation. Experience: Marketers can create stage and market experiences to the customers. For

example Water Park, and theme parks provide experience marketing.Another different real life experience is been enjoyed by customers at modern retail outlets. Now retailing is not an activity involved in just selling goods to the customers, it has now become an experience. Shopping in a mall where the delightful experience comprises of not only shopping but also, spending time with family and friends, eating out, watching movie andenjoying the complete day.

Marketing of Experiences

People

Marketing can help people to market themselves. Politicians are the most suitable and common

example of people marketing. Politicians market themselves to the customers (voters) by promising

them certain bundle of benefits. Cricketers, film stars, authors, painters, musicians and sportsperson

market themselves. Some of the well-known personalities are Amitabh Bachchan, Sachin Tendulkar,

Salmaan Khanetc. These people are not only successful in marketing themselves but also they lent their

names to products like perfumes (Shilpa Shetty), retail stores by the name of true blue (Sachin

Tendulkar), and cloths and accessories by Salman Khan with the name of ‘Being Human’

Marketing of People

Places

Cities, state and nation can be marketed to the consumers. Place marketers include real estate developers, commercial banks, businesses etc. One can’t forget the incredible India campaign by Indian government to market India as tourist spot. In India, Bangalore is known as the silicon valley of India. Kerala is known as God’s own country. Madhya Pradesh is known as “Heart of incredible India”. A campaign by Amithabh Bachan for Khushoo Gujrat

Marketing of Places

Organizations

Organizations market themselves to create and boost their image in customers mind. They try to create

a unique and favourable image in the eyes of customers that can give organizations an edge over others

in the market place. ‘Tata group’comprising of multiple brands, stands for trust and quality globally.

Philips promises its customers products which are technologically advance and hassle free. So its

marketing campaign is based on sense and simplicity platform

Marketing of Organizations

Property

Properties, whether tangible like real estate or intangibles like stocks can be marketed to the customers.

Properties are bought and sold and this exchange process seeks the role of marketing. Real estate

developers (DLF, Unitech, and Supertech) develop property and seek buyers for the same. Same is the

case with any investment company that wishes to sell its securities to individuals as well as institutions

Marketing of Properties

. Events

Marketers promote different events from time totimetheir customers. These events can be for

individuals or organizations. Sports events like Commonwealth games, Cricket world cup series,

Musical Concert, Awards, and Fashion shows, etc are events

Marketing of Events

Information

Information is basically produced and marketed and distributed by universities, schools, colleges,

newspapers, magazines, books etc to the customers at a price. The customers here might be

parents, students and communities. For example

Marketing of Information

IDEAS

Every marketer offers some idea. Some offer it for money others do it for society

in general. Marketersmake profit from society and they shall also give back to the

society. Social marketing comprises of creating awareness on few ideas like

Family Planning, AIDS awareness, discouraging-smoking, child labour, domestic

violence, wearing of helmet while driving, blood and eye donation etc.

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The scope of marketing really is related to the old and new concept of ‘marketing’.

Formerly the scope of marketing used to remain very much limited since the wants of the

consumers too were quite limited. The competition was almost equivalent to nil. In marketing,

the satisfaction of the consumers was not at all considered. The marketing was commodity

based and immediately after the sale of the products, the marketing process was over. Nowa-

days, the scope of marketing has become quite extensive, and the satisfaction of the customers

too is kept in view. The process of marketing continues even after the sales have been affected.

Today, the function of conforming the product, in accordance with the changing wants, habits

and fashions of people, is undertaken by the process of marketing.

To summarize, scope of Marketing can be the, Study of Consumer

Wants and Needs, Study of Consumer behavior, Production planning

and development, Pricing Policies, Distribution, Promotion and

Consumer Satisfaction.

Activity

Collect 5 advertisements from latest newspaper or magazines for marketing of (i)

services (ii) properties (iii) ideas (iv) places and (v) events. Understand the messages

conveyed in each case. How each message is different from another and which is

more appealing.

Functions of Marketing.

The business enterprise has two and only two basic functions: Marketing and Innovation.

Marketing and Innovation produce results; all the rest are costs. A firm can realize all its

business goals by generating customer satisfaction. The mechanics of the marketing process

through which a firm endeavors, to achieve it are generally referred to as functions of

marketing.

The functions of marketing encompasses the following five activities:

a) Define the market area

b) Research Consumer needs and wants

c) Developing and Redeveloping the product or service

d) Selecting, Training, Motivating and Controlling Manpower

e) Developing Sales approach and Advertising support

However the above activities describe more of Marketing Management.

Clark and Clark have classified the functions of Marketing into

a) Exchange Functions

b) Physical supply functions

c) Facilitating Functions

Linking the producer and the ultimate consumer represents the movement or flow of products

and their title from a seller to the buyer.

a. EXCHANGE FUNCTION: - This function consists of the following:

1) Marketing research: It is a technique of finding out the likes and dislikes of the consumers. The

feedback from the market enables the business to produce goods and services as per the needs

of the consumers. It is useful in collection of information about market environment, nature

and extent of market competition. It helps consumer oriented marketing as it rise to analyze

the markets and products to be sold.

2) Product planning and development: It means to select promising product, conduct its

promotion on commercial lines and make arrangements to supply the same to consumers.

Product development means to bring change in the existing product by improving its features,

functions, benefits, convenience etc. or to bring new product as per the requirements of the

consumer.

3) Buying: This function in marketing is concerned with selection of goods to be sold. It also

includes buying raw materials which are used to manufacture finished goods. Efficient and

economic buying is essential to earn good profits. The function involves planning of purchases,

selection of proper sources of supply, selection of goods to be sold, terms of safe mode of

delivery, negotiation etc. There are four methods of buying.

• By inspection

• By sample

• By description

• By grade

4) Assembling: It means bringing together, collecting and concentrating goods of the same type

from the various sources of supply at centrally located places. It becomes necessary in case of

goods produced by small producers scattered over a wider area. Agricultural goods, non-

standardized goods and seasonal goods need assembling. Assembling ensures regular supply of

goods in large quantities and thus enjoys wider market.

5) Selling: The objective of selling is to dispose goods at satisfactory prices. All marketing efforts

revolve around selling. It includes possession of prospective buyers to actually complete the

purchase of goods. It covers the cost of marketing and leaves a reasonable margin of profit.

This function is becoming difficult, complicated and challenging because of market competition,

availability of substitutes and changes in the needs and expectations of the consumers. This

calls for the best marketing strategy.

II PHYSICAL SUPPLY- This consists of the following:

1) Transportation: It facilitates movement of goods from the place of production to the place of

consumption. In today’s modern industrial system based on factory production there is mass

production, which calls for mass distribution. The distance between the places of production

and consumption has also increased calling for good transport system. The cost of transport

must be justified by the creation of place utility. Transportation provides for:

• Help for growth and distribution of wealth.

• Develops distinct markets.

• Encourages specialization.

• Division of labour.

• Helps in making better use of labour and capital.

• Stabilizes prices in various markets.

• Creates employment.

Modern transport have brought the world closer, widened the market, not only to cover our

country but also the entire globe.

2) Storage: It is storing good systematically at a suitable place called godown or warehouse.

Storage protects the good and stabilizes prices of seasonal goods. It also helps certain goods to

mature in their quality and facilitates trading in future markets.

Storage is necessary because there is time gap between the production and

consumption of goods. It is necessary in concentration and distribution. It is essential in both

agricultural marketing and manufactured goods marketing. The goods to be stored may be

selected, inspected, branded and packed in the warehouses and transported from there.

III) FACILITATING MARKET FUNCTIONS

To ensure smooth flow of goods the following facilitating marketing functions are needed.

1) Standardization-It means prescribing basic limits or grades to different classes of products. It

refers to establishment of norms for features, qualities and functions of a product.

For example: - footwear of a certain length and shape answer to a certain size which will fit a

certain foot size. If the product confirms to be standard, the pair of shoes can be referred to as

a certain standardized size.

2) Grading-It is an extension of standardization function. To grade is to divide goods into lots

which has nearly the same characteristics as to size, colour weight etc. It is the classification of

goods into grades after due inspection. Grading helps the marketer to compare the different

qualities of the same product in different markets. The main purpose of grading is to stabilize

price of goods and to keep it more or less uniform in different places at different times. E.g. ISI,

Bureau of Indian Standards, ISO, Agmark.

3) Branding- A brand is a symbol, name, term, mark or any other sign of identification which

highlights goods or services of a certain seller. By seeing this identity marks on the products the

consumers can associate them with a seller. It popularizes the product, differentiates them and

creates consumer preferences. It makes advertising campaign more effective. Branding is an

important marketing function as it promotes sales and higher turnover.E.g. Common examples

include the Nike "swoosh," the golden arches of McDonald's and the apple used by Apple

Computers.

4) Packing and packaging-Packing means covering or wrapping the product for safety,

convenience and handling. Packages are the wrapper materials used in packing. Packaging

includes planning the package, size, shape, colour, labelling etc. It is an important marketing

function as it brings about a change in demand through product differentiation and positioning.

However it should adhere to social and environmental norms.

5) Financing- An integral part of marketing means providing money and credit to producers,

wholesalers and retailers in the marketing operations. It assumes importance because of the

time lag between the production and consumption of goods. Availability of adequate funds is

extremely important for smooth functioning of the business.

6) Risk management-Risk means an element of uncertainty or possibility of loss. The major risks

which marketing have to face are physical loss (damage of goods- secured by insurance),

economic loss (fluctuation between demand and supply minimized by market research) and

credit loss (insolvency and bad debts- reduced by maintaining proper reserves for future

contingency)

7) Pricing-Pricing plays an important role in modern marketing as profit depends on turnover and

turnover upon the price of the product and service. The price should cover all costs including

normal profit. The pricing policy should be framed very cautiously as the unsound policy may

bring the life of an enterprise to an end. It also pulls down the reputation and goodwill of the

organization. However it has to be flexible and permit changes from time to time as needed.

8) Promotion-A basic marketing function refers to use of techniques such as advertising campaign,

personal selling, sales promotion techniques, not only is the buyer influenced by promotion but

marketer can also increase their market share through effective promotion and persuasive

communication.

9) Marketing information system-Information is a vital resource in any business. MIS will be able

to study environmental changes, trends in the market demand, price, etc. through effective

market intelligence up-to-date, internal records, internal market research, computer based DSS

& exhaustive data bank.

Utilities & Kinds

The marketers sell benefit through the exchange process to satisfy the various needs of the

customers. This benefit is termed as utility/value satisfaction.

Utility is the measure of satisfaction obtained by receipt of something of value in the exchange

process. Utility of each product changes from person to person, product to product and the

different stages of the product life cycle.

The various kinds of utility could be as follows:

1. Form utility - Conversion of raw materials into finished product so that it becomes beneficial to

the consumers. It could be in the form of a total transformation /grading to mere change in

package which could enhance the usefulness of the product. E.g. Grading milk - the milk is first

boiled, cooled, pasteurized (to kill germs), then it is put in cartons and sold. It is also graded

into low fat, skimmed milk, full cream etc. Milk is going to be totally transformed to curd. E.g.

Packaging – package of a box of apples (cardboard, paper).

Time utility - Certain goods become useful/are needed only at a part time after which its utility

no longer exists. Therefore, the marketer should make sure that these goods are available at

the right time. E.g. Newspapers, medicines. There are certain goods that improve in value with

the passage of time, making it more useful to the consumer. Thus creating time utility e.g.

Wine, pickles.

2. Place utility - When goods are taken from areas of abundance to areas of scarcity creation of

place utility takes place. Moreover, consumers prefer to buy goods that are easily available

than taking efforts to locate them. Examples of place utility range from a retail store’s location

to how easy a company’s website or services are to find on the internet. E.g. Apples of Kashmir,

bananas from Philippines, Kiwi from Africa are being sold in Dubai.

3. Information utility - It is the utility which aids the consumer to know if a particular product exists

and from where it can be brought without which the product has no value and the marketer

cannot increase the sales. E.g. Air humidifier or Colgate toothpaste, a product becomes more

useful to the consumer if it can be described as to why it should be used, when it should be

used, how it should be used, who should use it and where it is available. This kind of

information persuades the target market. This maybe done through mass advertisements,

publicity, personal selling and sales promotion.

4. Possession Utility - The process of transferring the product where they acquire the right to own

the product in exchange for some consideration is called possession utility. In other words, the

titles to the goods have been exchanged after which the consumer could do anything with the

product. E.g. buying a watch, buying shares etc. or in a car dealership, the term "delivery"

refers to the turning over of a vehicle to its new owner after purchase.

5. Image Utility - This is a special kind of information utility where the emotional and psychological

value that a person attaches to the product is increased. This is associated with prestige/self-

esteem wherein importance is for reputation or social standing in owning that product. E.g. you

have got a western gold watch and now it is in fashion, your prestige increases. It can also be

the satisfaction acquired from the emotional or psychological meaning attached to products.

Some people pay more for a toothpaste perceived to be more effective at fighting cavities and

whitening teeth.

Importance of Marketing

As for every business the leading factor for success is the customer. Thus with the customer as a controller, marketing becomes a major integrative function of the organization. However, Marketing cannot be kept apart and the Product, Pricing, Placement and promotions of the product ultimately depends on the marketing function. Currently marketing is a core business discipline since it contributes greatly to the success of the organization. It’s also essential to appreciate the concept of marketing as the cost of marketing amounts to forty to sixty percent of the total cost. Production and distribution depend largely on marketing. Marketing covers advertising, promotion, public relations, and sales. Marketing plays an important role to the marketer, customers society and economy Importance to the Marketers

1. Marketing Promotes Product Awareness to the Public The primary task of marketing is to get the product or service recognized by the market. It is important that public awareness of product and company information is spread to the buying public, this is possible if heavy advertising, sales promotion, personal selling, direct marketing is done for creating awareness. There is no fixed rule for all butobviously the use of a particular technique depends upon the nature of product, market and the financial conditions of the company.

2. Marketing Helps In Enhancing Product Sales

Apart from public awareness about a company’s products and services, marketing helps boost sales and revenue growth. Once the public learns the your product through TV advertisements, radio commercials, newspaper ads, online ads etc, it will generate sales. More the people know a product or a service; more interested they would be in buying the products.

3. Marketing Builds Company Reputation Marketers continuously aim to create an image of the company in general public eyes. They tend to create brand name recognition. This is done so that consumers can easily associate the brand name with the images, logo, or caption that they hear and see in the advertisements. For example, McDonalds is known for its arch design which attracts people and identifies the image as McDonalds. With an established name in the industry, a business continues to grow and expand because more and more customers will purchase the products from a trustworthy and reputed company. Importance to Customers 1. Marketing creates Utilities: Marketing creates different types of utilities, form utility – from a plumber to furniture, place utility- product moving from the factory to the customer, time

utility- product available when needed, information utility- ingredients of the product and even how to use the product, and possession utility- transfer of ownership from retailer to customer. 2. Large number of choices available: Marketers create needs and wants and try to satisfy that through offering variety of product choices. If one wantssoap, there are n numbers of brands available. For example Lux, Pears, Rexona, Dove are range of soaps offered by HUL. 3. More platforms available: With the advent of technology, the marketers are offering customers both offline and online platforms to purchase. Now marketers are serving more number of customers through different ways, reminders of sales comes through sms, e-mail, facebook, whatsap, Even customers have become smarter, they search for information from different online platforms and buy the best deal. Importance to the Society

1. Source of Employment: Marketing offers a great range of wide and exciting career opportunities. Marketing offers employment in the field of personal selling, packaging, and advertising, marketing research, consultancy, distribution and channel sales. Thus, marketing gives employment to many people. It is estimated that about 40% of total population is directly or indirectly dependent upon marketing. In the modern era of large scale production and industrialisation, role of marketing has widened. This enlarged role of marketing has created many employment opportunities for people. 2. Marketing Is Helpful in Raising and Maintaining the Standard Of Living of the Community:

Marketing is all above giving a standard of living to the community. Paul Mazur states,

“Marketing is the delivery of standard of living”. Professor Malcolm McNair has further added

that “Marketing is the creation and delivery of standard of living to the society”.

By making available the uninterrupted supply of goods and services to consumers at a

reasonable price, marketing has played an important role in raising and maintaining living

standards of the community.

Community comprises of three classes of people i.e., rich, middle and poor. Everything which

is used by these different classes of people is supplied by marketing. In the modern times,

with the emergence of latest marketing techniques even the poorer sections of society have

attained a reasonable level of living standard. This is basically due to large scale production and

lesser prices of commodities and services. Marketing has in fact, revolutionised and modernised

the living standard of people in modern times.

3.Welfare of Customers and Stakeholders:

Though profit maximisation is main motive of every business but many marketers have taken up corporate social responsibility in order to give back to society. Different forms For example, HUL’s – Behaviour Change Program where washing hands with soap before a mother touches her baby is proven to prevent many of infant deaths in villages. Where, over 40% of child deaths under the age of 5 happen in the first 28 days of life. Washing hands with soap before a mother touches her baby is proven to prevent many of these deaths. This campaign is to help teach mothers this lifesaving habit and ‘Help A Child Reach 5’.

Importance to the Economy

Marketing Is Helpful in Development of an Economy: Adam Smith has remarked that “nothing

happens in our country until somebody sells something”. Marketing is the kingpin that sets the

economy revolving. The marketing organisation, more scientifically organised, makes the

economy strong and stable, the lesser the stress on the marketing function, the weaker will be

the economy.

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KNOWLEDGE ASSESMENT

1. ______________the potential customers of future.

A. Customer b) Consumer c)Prospects d)Marketer

2. Consumer Markets comprises of ___________

A. Fast moving consumer goods (FMCG) b) Industrial markets c) Intermediate

markets d) All the above

Market offering can be combination of

A. Product & services b) Information c) Place d)All of above

4. Market consists of

a) Potential buyers b) Actual buyers c) Both a and b d) None of the above

5. Marketers builds company’s reputation by creating _______________ of company in

general public’s eyes. a) Sales b) Image c)Logo d)None of above

6. The public comes to know about the product of the company through ________________

a) Television b)Newspaper c) Radio d) Online

7. Marketing is a core business discipline it covers_________________.

a) Advertising b)Promotions c) Public relations d)All the above

8. Scope of marketing is not limited to products, services but now one can market ideas,

people, events, places, properties, information, organisations and _____________.

a) Goods b) Agents c) Experiences d) None of above

9. Customer value is a difference of total customer benefits and _______________

a) Total customer experience b) Total customer cost

C Warranty d) None of the above

10. Marketing creates ____________________utilities.

a) Form utility b) Place utility c) Time utility d Information utility e) All of the

above

Ans: 1. A 2. D 3. D 4. C 5. B 6. E 7. D 8. C 9. B 10. E

Assessment Fill in the blanks

1. A marketing exchange _________ be necessarily a ________. (options: need to, need not to, physical, virtual)

2. Per unit cost in most of the markets actually ________because of _______market and mass consumption, that

results from ______ awareness and acceptance. (options: goes up, comes down, increased, decreased,

development of, reduction of)

3. Of all the functions of management, which one generates revenue?

a. Finance

b. Accounts

c. Human resource

d. Marketing

e. Operations

4. Conversion of raw materials into finished product is __________utility

5. __________ means bringing together, collecting and concentrating goods of the same type from the various sources

of supply at centrally located places

6. __________ is associated with prestige/self esteem

7. Match the following importance of marketing with its sector.

Importance Sector

A Standard of living Business

B Provides employment opportunities Social significance

C Healthy competition Consumers

D Eco- friendly goods Firm

E Promotion & easy availability of products society

2 markers

1. What are the various marketing activities?

2. According to scope of marketing what is the old and new concept of marketing

3. How can marketing functions are classified?

4. Explain any one exchange functions of marketing.

5. What function of branding and grading of goods is to be performed by a marketer?

6. What are the physical supply functions of marketing?

7. How does Marketing foster economic growth?

8. What are utilities in marketing?

9. Is marketing different from selling?

10. What is Standardization?

11. What is Marketing Information system?

3 markers

1. Examine the scope of marketing?

2. Explain “Buying’ and ‘Selling’ as two important Exchange functions of Marketing.

3. Briefly explain the Physical supply functions

4. How does Risk Management and Financing facilitate as marketing functions?

5. How are utilities useful to marketers? Explain Form utility with examples.

6. What type of utility do the following products provide and how?

a) Canned fruits b) laptops c) frozen vegetables

d) Coke vending machine e) African kiwi f) skimmed milk

5 markers

1. Classify the functions of Marketing and explain any one kind briefly’

2. Examine the importance of marketing to any two sectors

3. Give any five general importance of marketing.

4. “Marketing is the creation and delivery of the standard of living.” In the light of this statement explain the benefits of

marketing

5. Distinguish between marketing and selling

6. Rawabi a farmer in Gujarat had a dozen Australian cows yielding good milk. He pasteurized the milk and made

butter packs out of them. Some of them he made yoghurt. He packed the milk in zip packs sealed them and to

various center points for retail distribution. A special article was published in gulf times, of Rawabi's role in

distribution of milk to charities, which made him very popular.

Identify the utilities in the above example. And explain them in a line each

Assignment

1. An advertisement in a national newspaper announces that Norah Jones is going to perform in Delhi soon, and the

tickets for the life performance are available for sale now. In order of relevance, list everything what is being

promoted, and is being sold separately.

2. Is marketing relevant to an NGO? What an NGO exchanges for a donation?

3. Pick up a particular product of your choice. Ask your parents what used to be the substitute for this product when

they were of your age. Compare the product that existed in their description and that exists today, also the after-sale

service, warranty, quality, no. of people employed etc. to develop an argument in favor of ‘marketing improves

standard of living’.

Activity 1. Collect a week’s newspaper advertisements of at least two of the

following things: people, places, property, events, experiences, organizations, information, services, and ideas. Try to identify the common points of emphasis (needs, exchange, uniqueness etc.) in each of the two things’ advertisements separately.

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