Functional Approach

This function is concerned with seeking out the sources of supply, assembling of products, and activities associated with purchase. It can be either the assembling the raw products from the production areas or the assembling of finished products into the hands of other middlemen in order to meet the demands of the ultimate consumer.

Selling function

It is more than merely passively accepting the price offered. It consists of various activities that are sometimes called merchandizing, physical arrangements of display of goods, advertising and other promotional devices to influence or create demand. It may also include the decision on the proper unit of sale, proper packages, best marketing channel and proper time and place to approach potential buyers.

It is concerned with making goods available at the desired time. It may be activities of elevators in holding large quantities of raw materials until they are needed for further processing. It may also be holding of supplies of finished goods as the inventories of processors, wholesalers or retailers.

Transportation function

It is concerned with making goods available at the proper place. It also includes the activities involved in preparation for shipment such as crating and loading. Adequate performance of this function requires weighing alternative routes and types of transportation as they might affect transportation costs.

Processing function

It includes all those manufacturing activities that change the basic form of the product, such as converting live animals into meat, fresh peas into canned or frozen peas, or wheat into flour and finally into bread. It is sometimes not included in the list of marketing functions because it is essentially form-changing activity.

It is the establishment and maintenance of uniform measurements of both quality and quantity. It simplifies buying and selling, because it makes the sale by sample and description possible. It makes mass selling, which is so important to a complex economy, possible. Effective standardization is critical to efficient pricing process. Standardization also simplifies the concentration process, because it permits the grouping of similar lots of commodities early in movement from producing points. Policing of standards is crucial to ensure quality control in processing plants and inspections to maintain the standards in the marketing channel.

It is the use of money to carry out various aspects of marketing. When there is storage or delay in the distribution of goods someone must finance the holding of goods. The holding period may be for one year or more, as in operations of the canning industries, or a relatively short time, as in the marketing of perishables. Financing may take the obviously recognizable form of credit from various lending agencies or the more subtle form of tying up the owner’s capital resources. It is critical in modern marketing.

Risk bearing function

It is the accepting of the possibility of loss in the marketing of a product. Risks can be classified into two broad categories-physical risks and market risks. Physical risks are those that occur from destruction or deterioration of the product itself by fire, accident, wind, earthquakes, cold, and heat. Market risks are those that occur because of the changes in value of a product as it is marketed. Risk bearing may take a more conventional form, such as the use of insurance companies in the case of physical risks or the utilization of futures exchanges in the case of price risks. The entrepreneur himself may bear the risk without the aid of these specialized agencies. The function of risk bearing is often confused with the function of financing. Financing arises because of the time lag between the purchase and sale of products, whereas the need for risk bearing arises because of the possibility of loss during the holding period.

Market intelligence function

It is the job of collecting, interpreting and disseminating the large variety of data necessary to the smooth operation of the marketing processes. Market research to evaluate possible alternative marketing channels that may be used, the different ways of performing other functions, and the market potentialities for new products may be classified as part of the broad function of market intelligence. Efficient marketing cannot operate in an information vacuum. An effective pricing mechanism is dependent on well-informed buyers and sellers. Successful decisions on how much to pay for commodities or what kind of pricing policy to use in their sale require that a large amount of market knowledge be assembled for study. Adequate storage programs, an efficient transportation service, and an adequate standardization program all depend on good information. It may either be performed by those who specialize in its performance or by everyone in the market structure who buys and sells products.