The Performance of Marketing Functions

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By: Site Engineer, Staff

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Many individuals and organizations participate in performing the various marketing activities which we have just described. In spite of their large number, they can be classified into three broad categories; namely, producers, middlemen, and facilitators.

Also, we may include consumers, as a fourth category, among those who perform marketing functions, because sometimes they participate in the performance of marketing functions such as the transportation of the goods. They may also actively take part in financing the seller by paying in advance for goods or participate in pricing-fixing through haggling.

Producers

  1. Processors (e.g., Lever Brothers, Arewa Textiles, Premier Breweries).
  2. Extractors (e.g., Shell Petroleum, Development Company Limited, Nigerian National Fishing Company).
  3. Assemblers (e.g., Peugeot Automobile Company Limited, ANAMCO, Philips).
  4. Service Companies (e.g., Consultants, Auditing firms, Many Contracting Firms, Banks and Insurance Companies).

Middlemen (Wholesaler)

Merchant Wholesalers

a) General Merchandise Wholesalers

b) Limited Line Wholesalers

c) Specialty Wholesalers

Agent Middlemen

a) Brokers

b) Commission Houses

c) Manufacturers agents

d) Selling agents

Middlemen (Retailer)

  1. Department stores
  2. Supermarkets
  3. Discount Houses
  4. Superstores
  5. Specialist Stores
  6. Mail Order Retailers
  7. Automatic Vending
  8. Shopping Centres
  9. Scrambled Shops

Facilitators

  1. Transporters
  2. Public Warehouses
  3. Advertising Agencies
  4. Financial Institutions
  5. Marketing Research Organizations

Consumer/User

  1. Final (Household) users
  2. Institutional Users
  3. a) Industrial and commercial users
  4. b) Government users
  5. c) Others

The Marketing Concept

As the preceding discussion shows, marketing revolves around the consumer, obviously because every company needs his patronage in order to remain in business in the long run. The marketing concept expresses this simple idea that all activities of the business organization should be coordinated and oriented toward the satisfaction of the needs of the consumer, as a means of attaining organizational goals.

The concept suggests that the company should accept the following fundamental ideas in formulating and implementing its policies:

  1. The satisfaction of customers’ needs is the surest means of sustaining their patronage, and therefore, of earning a profit.
  2. The profitable satisfaction of customer needs requires the integration and coordination of all business activities.
  3. The satisfaction of consumer needs is the economic justification for the existence of a business.
  4. Profits are the major incentives for being in business, and a prerequisite for remaining in it.

Since the concept was first articulated in the 1950s, Philip Kotler and his associates have broadened it by adding that marketing should not consider the needs of only its customers, but also the welfare of society. This broadened form of the concept is called the social or societal marketing concept.

The marketing concept is a relatively new philosophy, which was developed in the United States of America in the 1950s. Two business philosophies – the product orientation and a sales orientation – predated it.

A product orientation philosophy or concept rests on the premise that a well-engineered, well-manufactured, and fairly priced product can be sold easily, to achieve the company’s objectives. The sales orientation philosophy which succeeded the product orientation one rests on the notion that, with good selling techniques, any product can be sold.

The basic difference between these two earlier orientations, on one hand, and the marketing concept on the other is that while they focus on the needs of the seller, the marketing concept focuses on those of the buyer. Focusing on the needs of buyers is known as consumer orientation.

The marketing concept was developed in the western world, in the light of the experiences of business in that part of the globe. Although in developing countries, however, some people have questioned the relevance of the concept.

For instance, the expert has cautioned against its indiscriminate adoption in developing countries, because, in his view, its appropriateness is a function of:

  • The company’s profit objective, in terms of whether long-run or short-run profits are desired;
  • The type of products which the company markets, whether they are consumer goods or industrial goods; and
  • The extent of competition

In his opinion, the concept is not appropriate for consumer goods companies who operate in a sellers’ market, if they seek to maximize profits in the short run. It is no wonder, therefore, that the concept does not appear to have been adopted by many businessmen in Nigeria.

Whatever it’s conceptual and operationalization limitations, especially in developing countries, the marketing concept represents a useful model for achieving long-run consumer patronage and hence corporate goals.

The Marketing Environment

Marketing, as we stressed earlier in our definition of the term, takes place within a dynamic environment. This environment impinges on the marketing of the organization’s goods and services. It consists of two main factors:

  1. The company’s internal environment made up of its corporate goals and policies in the areas of production, research and development, personnel, and finance and accounting, all of which affect marketing policies, actions, and performance;
  2. The general or external environment of the company generally referred to as the uncontrollable variable in marketing. This is made up of the economic and socio-cultural environment, competition, technology, and government laws and regulations.

The significance of the internal marketing environment lies in the fact that, in making its decisions, the marketing department is constrained by the company’s personnel, financial, and production capacities and policies. However, top management can control this environment.

Although the external environment is outside the control of the marketer, it cannot be ignored. This is because changes in the environment can affect the availability of marketing input (e.g., marketing personnel), and the ability and willingness of marketing intermediaries and facilitators, to continue to patronize the company.

For these reasons, the marketing environment must be analyzed and predicted, so that the company can formulate its marketing plans accordingly. This is more so in view of the constantly changing nature of the environment, which may thus generate threats and opportunities to which the company must react quickly.

Some Recent Development/Changes in the African Marketing Environment

(a)        Economic Factors

  1. Increased competition among business firms
  2. A more varied assortment of consumer goods
  3. The mass importation of consumer goods
  4. Smuggling
  5. Inflation
  6. Oil Glut
  7. Increasing unemployment
  8. Establishment of more refineries (Warri and Kaduna) and iron and steel complexes.
  9. Improved infrastructural facilities (transport, communication, water, electricity)
  10. Increased government spending.
  11. Rural Banking, electrification, and integration.

(b)       Political-Legal Variables

  1. Indigenization of business
  2. Business regulatory laws on prices, income, labor, import, inspection, import quota, etc
  3. Change to the presidential system
  4. Government ownership of mass media organizations
  5. Hostility towards South Africa
  6. Government commitment to the liberation of the African continent
  7. Government takeover of schools
  8. Free education
  9. Government housing policies

(c)        Technological Factors

  1. Establishment of research institutes
  2. Creation of Ministry of Science and Technology
  3. Establishment of Universities of Technology
  4. Government Encouragement of (a) Importation of foreign technology (b) Development of local indigenous technology

(d)       Socio-Cultural Variables

  1. Increased consumer education, awareness, and selectiveness
  2. More resort to the legal process to seek redress
  3. Commercial effort sustenance and organization
  4. An increasing sense of national unity
  5. Increased materialism
  6. Increased crime and corruption (armed robbery, stealing, embezzlement, bribery)
  7. Poor attitude to work

Marketing programmes aim at coping with the internal and external marketing environment of the marketer. This involves the formulation of product, price, promotion and pricing policies and plans. These constitute the company’s marketing mix, which we shall examine in greater detail.

The Marketing Mix

The term marketing mix is used to describe the combination of the four Ps – price, promotion, product, and place – which a company uses as a facet of its marketing strategy. These four Ps, alternatively called marketing decision variables, constitute the controllable variables in marketing. They are so called because the company can manipulate them at will.

The unique ways in which the components of each of the four Ps are combined partly specify each company’s marketing strategy. It should be noted, however, that the selection of a marketing strategy also involves the choice of target markets, the choice of marketing objectives, and the scheduling of selected marketing actions, and the establishment of a marketing control system.

Strategic Decision Areas in Marketing

Identifies the decision areas for each variable.

1. Product

  • Features
  • Accessories
  • Installation
  • Instructions
  • Product quality
  • Warranty
  • Product lines
  • Product Mix
  • Package
  • Branding

2. Place

  • Channels
  • Market exposure
  • Kinds of Middlemen
  • Who handles storage and transportation
  • Service levels

3. Promotion

  • Kinds of salespeople;
  • Selection, training, and motivation of salesmen;
  • Kind of advertising media;
  • Copy-thrust publicity;
  • Sales promotion.

4. Price

  • Flexibility level
  • Price objectives
  • Pricing policies
  • Allowances
  • Pricing method
  • Specific prices

The four Ps are examined below.

The Product

The term product is used in marketing to refer to what the company offers for sale. It consists not only of the tangible entity but also the bundle of services and other intangible or symbolic attributes which accompany it. These non-tangible attributes include the image of the product, and the pre-sale and the post-sale services which the company offers along with it, such as instructions for use, maintenance, and repairs. For example, a refrigerator includes the physical entity, the image that attaches to it, the guarantee, the instructions, and the accompanying repair and maintenance services.

Product Concepts

It is usual to find companies that produce many products. A group of related products that are offered by a company is called the product line. For example, Lever Brothers have a variety of Tree Top fruit drinks made up of lime, orange, pineapple, grapefruit, and blackcurrant. These are related and together make up a product line. On the other hand, the whole array of products which a company offers for sale is called its product mix. Using Lever Brother as an example again, its product mix consists of soaps, non-soap detergents, toilet preparations, edible oil and fats, and fruit drinks. Each of these makes a product line, while all, taken together, make up the company’s product mix. The number of product lines in the company’s product mix makes up the breadth of the mix, while the depth refers to the number of product items in a product line. A product item is an individual product version or brand. For example, blackcurrant is a product item while Omo is another.

Classification of Products

We can classify products into two broad categories – consumer and industrial products.

1. Consumer Products

Products which the consumer buys so that he or his family may enjoy the benefits or satisfaction contained in it are called consumer goods. On the other hand, those which are bought for resale, or for the production of other products for sale, are referred to as industrial products. A note of caution is necessary here.

Ordinarily, if you see a man on the street, you cannot tell whether he is a teacher, an engineer, or a farmer unless you find out what work he does. Similarly, a product cannot be classified as a consumer or an industrial product unless we inquire into the purpose for which it is bought.

A car, generator or table bought for household use is a consumer product. But the same car, generator or table bought for resale, or to aid the production of other products intended for sale, is an industrial product.

We may further classify consumer goods into convenience, shopping, and specialty products. Convenience Products are those which the consumer normally buys with minimal effort, without the inclination to compare prices from one shop to another. The purchase is routine, and the products are usually inexpensive and frequently bought. Examples are ball-point pens, bread, handkerchiefs, ice-cream, and milk. Shopping Goods are those for which the consumer puts forth considerable effort in buying. They are usually more durable and expensive than convenience products. Examples are shirts, suitcases and radio sets.

Finally, specialty products possess unique characteristics. Consumers spend a lot of time making up their minds on which type they want, plan meticulously for the purchase and are willing to spend considerable effort and time until they find the exact types they want. Examples are cars, furniture, and works of art. They are usually expensive.

2. Industrial Products

Industrial goods may be classified into raw materials, equipment, accessories, component parts, services, and supplies.

Raw materials are goods which have not been processed at all, or which have been processed only to the extent necessary for convenient physical handling. They form part of the product. Examples are rubber lumps and sheets used in manufacturing tyres and tubes, and cotton used in making threads and textiles.

Major equipment are installations or major capital items such as power generating plants, bulldozers, and tractors they are usually expensive, infrequently bought, and are the main determinants of a firm’s production capacity.

Accessories are less expensive and have shorter lives than major equipment. Like major equipment, however, they do not form part of the finished product. Examples are typewriters, photocopy machine, and calculating machines.

Component parts are finished or semi-finished items needing little processing. They form part of the finished products. Examples are clocks, light bulbs, and seat belts, which form part of a car.

Services are intangible products. Examples are management consulting, advertising, cleaning and legal services which firms make use of. Supplies are frequently purchased items, which are usually inexpensive and which do not form part of the finished products. Stationery and fuel are examples.

The above classification has significance for marketers since a company’s marketing strategy will depend partly on the nature of the product being offered for sale. For example, a company marketing tractors will be expected to have a different marketing strategy from one marketing chewing gums.

 

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