Marketing can be seen as an essential part of any company’s success because of the countless ways it helps businesses to associate themselves with products and services that people want to buy, create brand recognition and increase sales. Knowing the many functions of marketing can help businesses to encourage their potential customers to seek and buy their products and services.
What are the Functions of Marketing?
While marketing includes a vast array of activities aiming at selling products or services (eg, market research to understand customer needs and market trends, product development to create or improve products, pricing strategies to determine optimal price, distribution activities to bring products to consumers, and advertising/promotion to raise awareness and persuade target customers etc).
Other key activities include sales methods to seal deals, customer service to maintain customers and earn loyalty, digital marketing to leverage the internet, analytics to measure marketing efficacy, public relations to manage the image of the brand, and event marketing to meet the public directly.
Each of these function contributes in some way to ensuring that your product or service remains prominent, memorable, credible and attractive and, ultimately, that your business prospers.
Why are the Marketing Functions Important?
Functions such as marketing are crucial, because they all contribute to the overarching objective of the business – reaching, connecting with and converting prospects into customers. Market research helps a company understand the dynamics of its market and their consumers’ behaviours so that they can innovate to provide the right offer at the right time.
Strategic pricing, branding and distribution – creating the always-on offer – both delivers the goods and makes them available and attractive, while promotion and advertising raise the visibility of the offer and promote recognition of the brand.
Moreover, sales and customer service functions are needed to close the deal and to keep customers satisfied, thereby sustaining relationships that lead to repeat business and word-of-mouth. In short, the marketing function is the engine of a company that breaks through competitive landmines to achieve sustainable growth and profit.
The 10 Essential Marketing Functions
Knowing the 10 functions of marketing is important business know-how because each function includes the design, implementation and management of marketing strategy to achieve growth and profit.
1. Product/Service Management
Within product/service management we are concerned with conceiving, producing, maintaining, and continually improving products and services that satisfy users’ needs and requirements.
Product management that is responsive to the pressures of a marketplace filled with competitors is absolutely necessary to keep apace of the fast-changing world. For this, a company’s product managers must continuously refine and develop a new product based on what is demanded by a changing customer base, as well as the pace of technological development.
For instance, in recent years, Apple has regularly updated its product features, through software upgrades as well as hardware re-releases, to respond not only to changing customer demand (such as growing electronic payment capabilities) but also to changing regulation (a key driver behind developing the new Apple Card and Apple Pay product). In the case of Tesla, updating the product in the form of regular hardware and software updates addresses both technical innovation and customer demand.
Product/service management skills are important because they keep a business’s offerings current and so able to grow and succeed.
2. Marketing Information Management
Marketing information management is the process of collecting, processing, and using information to make managerial decisions. This function helps firms identify target audiences, monitor competitor activity and track market trends.
In our data-fuelled age, the quality of the data-driven decision is crucial.se how marketeers reach their potential customers, how they respond to ads or the way they shop. The biggest percentage of online store turnover goes for market research, customer feedback, and analytics. For instance, customers of the world’s largest online store Amazon are recommended products by using complex analytics.
Further, this function is vital because it helps businesses to react to the ever-changing demands of the market and consumer preferences in time, thus improving on the effectiveness of their marketing strategies.
3. Pricing
Setting prices determines the monetary value of a product or service and involves balancing the price against sales volumes or quantities required, and the earnings of the retailer who provides it. The pricing of goods or services may therefore be based on production costs, competitors’ prices, and levels of customer demand, which can sometimes vary from perceived value.
The right pricing strategy can add lots of money to a business’s bottom line: dynamic pricing, where prices are adjusted in real time according to demand (think Uber), can dramatically boost profits; cost leadership as practised by many companies such as Walmart, which reduces prices in order to appeal to the widest customer base, can do the same.
Understanding pricing may seem obvious but it’s essential because of its inherent influence. Price sets a ceiling on what a customer perceives as its value, ultimately affecting sales – one of the key drivers of profit. This means having a pricing strategy that is both customer-centric and business-orientated can influence what is bought, and for how much, with the added advantage of a satisfied customer.
4. Distribution (Place)
Distribution, or place, is all about deciding how and where products will be sent to your customers. Here, you are deciding which distribution channel (sale outlets) best suit your products – be they physical stores, e-commerce platforms or third-party retailers.
This helps that a product can be found and delivered to the customer without any problems. This is also where delivery services support the company, such as Amazon with their expedient delivery service improving the customer experience.
It is very important to know distribution in detail as it ensures that products reach the consumers in time and at the least price, and makes the marketing strategy successful.
5. Promotion
Promotion, the act of communicating the value of a product or service to a potential customer, delves into spreading the word about a product or service, typically through advertising, public relations, social media marketing and sales promotions.
When promotion is done well, brands improve recognition, engage customers and boost sales. Nike, Coca-Cola and others continually cultivate their remarkable attributes through emotionally powerful advertising and social media campaigns that keep their products in the forefront of consumers’ minds.
We should advertise and promote because this will, first of all, raise awareness of brand and services to potential clients; secondly, promote value of the product and increase sales; and finally, it will offer a wide range of products to our clients, increasing our income. This CEO understands the importance of small businesses promoting their products and services. Without promotion, quality products and services will go unnoticed by potential buyers.
6. Selling
S function of convincing customers to purchase a product or service. This is typically done through direct interaction with customers, including functions such as personal selling, customer service and other forms of customer interaction.
Thus successful selling is a relationship-building enterprise. Luxury brands like Tesla or Rolex can use a high-touch sales approach, which includes consulting services and educates customers about the brand. It’s an engaging personalised conversation that creates value for the customer and can breed brand loyalty.
The ability to understand selling is crucial for any business as once we understand the complete process of conversion, the sale takes place and the erstwhile potential customer becomes a paying client. If selling is done successfully, there is a hike in sales, customer satisfaction and a repeat business as well.
7. Financing
Financing deals with the money you use to fund marketing activities, as well as the credit you give to your customers. Overall, this function helps you have the funds needed to develop, advertise and sell your products.
The product purchased can be paid for in installments (for example, it can be purchased in separate payments over several months), or customers can use a credit line (they will be charged a certain amount later).Lots of companies provide financing, for instance, car dealer shops, engage into financing as it helps to sell car products.They offer financing opportunities to their customers in order to persuade to purchase higher priced products.
Financing is important because without finance no company can have a marketing campaign that is camera ready and appealing to customers and no products/services can be provided to customers due to lack of finance. Another reason why finance is important for companies is that without financing firms will be trapped in current volatile conditions and will not be able to expand sales and also satisfy customers with the number of payments options they have and provide desirable payment plans.
8. Risk Management
Risk in marketing is the identification, evaluation, and prioritisation of risks (such as changes in customer preferences or economic downturns) directed at the marketing activity so as to minimise adverse effects (management of risk).
Risk management is important because companies may want to predict eventualities and manage possible uncertain outcomes. Mercantile companies might want to assess risk for such factors as fluctuations in exchange rates, cultural differences, regulatory changes etc.
Through risk management, companies can avoid expensive errors and produce stable growth on volatile markets.
9. Market Planning
Market planning is based on planning what is required to achieve marketing objectives. It involves understanding the target audience, setting marketing goals and identifying the channels that will reach customers.
A good marketing strategy is executed through a market plan, whereby a company devotes its energies and activities towards a well-defined and feasible set of marketing objectives that align with the wider business strategy. For example, when Starbucks decides to enter a new market, the first thing they will do is to conduct detailed market research, uncovering local tastes and preferences, and designing a marketing strategy that is attuned to the needs of their chosen customers.
You need to understand market planning for two reasons: first, because this is a blueprint for helping businesses achieve their objectives; second, because it helps to make the best use of available resources and efforts and measure the results of marketing activities.
10. Customer Relationship Management (CRM)
Customer relationship management (CRM) – the function that seeks to develop and nurture long-term relationships with customers – was always going to be the real beneficiary. Two old enemies made common cause: data and technology were to act in concert to overthrow the hyphen in ‘CRM’.
Because of CRM systems, companies track their customers’ interactions with them and pay attention to what they like and how they buy to personalise marketing efforts on a one-to-one basis. Companies such as Netflix and Spotify are leading in this space, making individualised recommendations incessantly to enhance the customer experience.
The reason why CRM must be understood clearly is because if a business fails to recognise the importance of having a strong relationship with customers, sales profit will decrease significantly, consequently reducing customer retention and brand loyalty.
Conclusion
The best marketing functions seamlessly blend with each other to create a more complete picture of finding and serving customers. Understanding and implementing any of these functions will draw your business into a more effective marketing environment – one that allows you to reach, serve and retain customers in a compelling way, through strategic new product development, purposeful promotion, or excellent customer care.