Introduction to Marketing II: Functions of Marketing – SS1 Marketing Lesson Note (First Term)

The functions of marketing are the activities that move goods and services from producers to consumers.

Behavioural objectives

1. List the seven functions of marketing.
2. Explain each function of marketing.
3. Give an example of processing.
4. State the factors that influence the choice of transportation.
5. State the functions of marketing in Nigeria.

What are the functions of marketing?

There are seven functions of marketing: buying, selling, financing, storage, transportation, processing and promoting.

• Purpose: they help consumers buy the products and services they need.
• Link: they form the marketing bridge between producers and consumers.
• Support: they also support storage, risk bearing, pricing, product development and trade.

1. What is the buying function?

Buying is the function of deciding what to purchase and then obtaining it for use or resale.

• Decisions involved: what to buy, what quality, how much, from whom, when and at what price.
• Reason for buying: people in business buy to increase sales or to decrease costs.
• Purchasing agents: they are much influenced by quality, service and price.
• Retailers: the products they buy for resale are decided by the needs and preferences of their customers.

2. What is the selling function?

Selling is the function of providing a way to give the customer what he or she wants.

• Direct sale: the producer sells straight to the final customer.
• Wholesale: the producer sells at wholesale prices to retailers.
• Industrial sale: the producer sells a product made especially for other businesses.

3. What is the financing function?

Financing is the function of providing the money a business needs to start and to stay in operation.

• Business funds: it covers investors, budgeting and other financial concerns of the business.
• Customer payment: it also covers how a customer will pay for the goods or services sold.

4. What is the storage function?

Storage is the function of keeping goods in proper condition from production until they are needed.

• Finished products: they are kept until consumers need them.
• Raw materials and stores: they are kept until the production department needs them.
• Protection: storing protects goods from deterioration.
• Surplus: it helps in carrying over surplus for future consumption or for use in production.
• Warehouses: goods may be stored in warehouses at different places.
• Seasonal goods: storage is more important when production or consumption is seasonal, as with grains harvested once a year.
• Retail stores: retail firms are called “stores”.

5. What is the transportation function?

Transportation is the physical movement of goods from where they are produced to where they are needed for consumption.

• Scope: it is needed from the procurement of raw materials to the delivery of finished products to the customer’s place.
• Roads: trucks and lorries carry goods to markets and shops.
• Railways: trains carry bulky goods over long distances.
• Waterways: boats and ships carry goods by river and sea.
• Pipelines: pipes carry liquids and gases such as crude oil and petroleum products.
• Air: aircraft carry urgent or light goods quickly.

What factors influence the choice of transportation?

The type of transportation chosen depends on suitability, speed and cost.

• Suitability: the means must fit the type of goods being moved.
• Speed: goods that are urgent or perishable need a faster means.
• Cost: the price of moving the goods must suit the seller’s budget.

6. What is the processing function?

Processing is the function of turning a raw product into something the consumer can use.

• Wheat to bread: wheat is milled into flour and baked into bread.
• Cassava to garri: cassava tubers are peeled, grated, pressed and fried into garri.
• Tomatoes to paste: fresh tomatoes are cooked and packed as tomato paste.

7. What is the promoting function?

Promoting is the function of making people aware of a product or service and persuading them to buy it.

• Awareness: a product is useless to a business if no one knows about it.
• Effort: promotion covers the efforts made to get the word out about what is being sold.
• Persuasion: it convinces people that the product is necessary, better than competitors’ products and of good quality.
• Examples: radio and television adverts, posters, handbills and free samples.

Summary table of the seven functions

What are the functions of marketing in Nigeria?

In Nigeria, marketing moves products to consumers and also supports storage, risk bearing, pricing, product development and trade.

1. Movement of products: it moves products from manufacturers to consumers.
2. Storage: it provides storage for goods between the time of production and consumption.
3. Standardisation and grading: it enhances the standardisation and grading of products.
4. Market information: it gives society vital information on the type of products, prices and where the products are found.
5. Risk bearing: it facilitates the bearing of risk in the distribution of products.
6. Pricing: it facilitates the adoption of an acceptable price strategy for a company’s products.
7. Product development: it facilitates the development of new and better products.
8. Import and export: it facilitates the import and export of goods.
9. Buyer-seller relationship: it encourages a good relationship between buyer and seller.
10. Market opportunities: it helps companies to identify market opportunities.

Evaluation

1. List the seven functions of marketing.
2. What decisions are involved in the buying function?
3. Why is storage more important when production or consumption is seasonal?
4. State three considerations in choosing a type of transportation.
5. Explain processing, using an example.

Assignment

Explain any five functions of marketing in Nigeria.