MARKETING AND MARKETING CHANNELS

Marketing means different things to different people.To the consumer, marketing may refer to the weekly food shopping trip to the supermarket. The farmer deals primarily with local farm product buyers and may associate marketing with the loading of hogs into the pickup for the trip to market or with the calling of local elevators to determine which is offering the highest price grains. In contrast, middlemen such as retailers, wholesalers and processors may view marketing as aprocess for gaining competitive advantage over market rivals, improving sales and profits and satisfying consumers.

The American Marketing as the performance of business activities that direct the flow of goods and services from producer to consumer or user.

J.H.Buck, a Unilever food marketing specialist, gave his organisation’s definition of marketing as ‘ the planning and execution of all aspects and activities of products so as to extent optimum influence on the consumer to result in maximum long term profit’.

We will define a market as an arena for organizing and facilitating business activities and for answering the basic economic questions: what to produce, how much to produce, how much to produce and how to distribute production. A market may be define by (1) a location ( for example, the St. Louis market); (2) a product (for example, the grain market); (3) a time ( for example, the May soybean market); or (4) a level (for example, the retail food market). The choice of market definition depends on the problem to be analysed. The most observable features of a market are its pricing and exchange processes. Markets join together the various components of the food industry: the farm supply sector, the farm sector, the food marketing system and national economies. The totality of the farm input, farm sector, the food marketing system and national economies. The totality of the farm input, farm production and food marketing processes is sometimes referred to as agribusiness.

Traditional Marketing vs Modern Marketing

Sl.No. / Traditional Marketing / Modern Marketing
1. / Meaning:
It deals with production and products to be sold out at any cost to consumers. / It deals with production and distribution, satisfying the needs of consumers.
2. / Satisfaction of consumers:
It deals with circulation of products, irrespective of satisfaction of consumers. / It considers consumer satisfaction as an important aspects.
3. / Profit generation:
Profit – earning has weightage / Profit motive is secondary to the satisfaction of the consumers.
4. / Approach:
It is product – oriented. / It is consumer – oriented.
5. / Mutual relations:
It does not find any relationship among the various marketing functions. / It takes into account relationship, Co ordination and integration among all the marketing functions.
6. / Social responsibility:
It has such an approach. / It takes with satisfaction of consumers as asocial responsibility. Therefore, it provides quality products, in time at reasonable prices.Moreover to pay taxes in time to government and participate in government welfare programmes.
7. / Research and Development;
It is absent in this regard. / However,it has a basis of research and development of products, marketing research for products, consumers and publicity.

Salient Features of Marketing:

  1. The salient features of marketing are;
  2. It is a creative function
  3. It promotes business and employmentIt co-ordinates finance , production and distributin and determines and direct the scale and value of the total efforts.
  4. There is an emphasis on what the customer / borrower wants.
  5. There is an emphasis on the social good, on increasing employment, by giving the customer / consumer the chances to decide and
  6. It is a process of exchange between seller and buyer. It may be a commodity or a service.

The Principal Marketing Functions

Sl.No. / Specific Function / Activities involved
1. / Marketing Information and Research / Economic, business, trade, industry, consumer, user, product, sales and advertising research and analysis.
Information handling and data processing.Marketing operations research. Competitive intelligence.
2. / Product Planning / Determining and developing the company’s product mix. Matching the products’ specifications,packaging, pricing, performance and servicing to customer needs through product and service improvements and new product development.
3. / Sales and Distribution / Field selling
Selection of distribution channels
Warehousing
Transport
Sales analysis
Sales reporting
Sales forecasting
Sales budgets and quotas
Merchandising
Sales communications
4. / Advertising and Promotion / Advertising to the customer or user in all media.Consumer promotion directed at the customer or user, e.g., reduced price offers, bandedpack offers, premiums, competitions, couponing etc. Point -of – purchase display material. Trade promotion, e.g., incentive schemes, display competitions, sales contest.

Elements of Marketing Mix:

The basic marketing mix is the blending of four inputs or sub- mixes which form the core of the marketing system: (1) Product mix,(2) Place mix,(3)Promotion mix, and (4) Price mix. The out puts are optimum productivity and satisfaction.

Fig:Elements of marketing

Marketing management is responsible for creating customers by persuading them through advertising and personal salesmanship that the company’s product or services match their indicated needs and preferences more closely then competitors’ offerings,by developing products and services through technical and market research which appear to offer profitable sales opportunities and at aprice, time and place the customer want.

Marketing Channel:

A channel of distribution may be defined as “ an organized network of agencies and institutions which in combination performs all of the activities required to link producers with users and users with producers in order to accomplish the marketing tasks.” Marketing channels play an important role in the selling of goods.Generally, a channel includes three parties- manufacturer, the middleman(wholesaler/retailer/agent middleman) and the consumer.A channel of distribution represents the path for the movement of title, possession and payment for goods and services.

Functions of Marketing Channels:

The channels of distribution perform the following functions:

  • Channels provide the route to link the producers and users. Goods produced in far away places are made available to the users.
  • Goods are stored by the middlemen in the channel and released to the market depending on demand. They facilitate storage of goods.
  • Introduction of new products/ merchandising is made easier. They bring to the notice of their customers new products and help the manufacturer in demand creation. They also act as good salesmenin promoting new products.
  • Consumers can purchase a variety of products from the retailers because retailers usually stock various products manufactured by different manufacturers. Besides, they “break the bulk”, ie., products are offered in small quantities to the buyers.
  • Channels provide the financing function. They advance money to the manufacturers and render credit facilities to the retailers.
  • They give advice regarding the price which is acceptable to the producer and the consumer.
  • Physical possession and transfer of title to goods are made easier.
  • They provide market information to the buyers.
  • They bring products nearer to the consumer. In some cases to the doors of the consumer.
  • They play a crucial role as price regulator of products.
  • in promoting new products.
  • Consumers can purchase a variety of products from the retailers because retailers usually stock various products manufactured by different manufacturers. Besides, they “break the bulk”, ie., products are offered in small quantities to the buyers.
  • Channels provide the financing function. They advance money to the manufacturers and render credit facilities to the retailers.
  • They give advice regarding the price which is acceptable to the producer and the consumer.
  • Physical possession and transfer of title to goods are made easier.
  • They provide market information to the buyers.
  • They bring products nearer to the consumer. In some cases to the doors of the consumer.
  • They play a crucial role as price regulator of products.
  • in promoting new products.
  • Consumers can purchase a variety of products from the retailers because retailers usually stock various products manufactured by different manufacturers. Besides, they “break the bulk”, ie., products are offered in small quantities to the buyers.
  • Channels provide the financing function. They advance money to the manufacturers and render credit facilities to the retailers.
  • They give advice regarding the price which is acceptable to the producer and the consumer.
  • Physical possession and transfer of title to goods are made easier.
  • They provide market information to the buyers.
  • They bring products nearer to the consumer. In some cases to the doors of the consumer.
  • They play a crucial role as price regulator of products.

Project report

A project report is prepared by an expert after detailed study and analysis of the various aspects of a [roject. It gives a complete analysis of the inputs and outputs of the project. It enables the entrepreneur to understand, at the initial stage, whether the project is sound on technical, commercial, financial and economic parameters.

Finanacial institutions and commercial bankers are the interested parties in the project report which is prepared for direct submission to financial corporations, bankers for getting loans.The entrepreneur gets the report prepared by a consultant. As such, these parties providing term loans go for the report because it spells out how production should be organized to yield maximum.

Project report includes information on the following aspects:

Economic Aspects: The project report should be able to present economic justification for investment. It should present analysis of the market for the product to be manufactured. It provides an analysis of the economics of production.

Technical Aspects : The appropriate report should give details about the technology needed, equipments and machinery required and the sources of availability.

Finanacial Aspects : The report should indicate the total investment required including sources of finance and the entrepreneur’s contribution. It should present a camparison of cost capital with the return on capital.

Production Aspects: It should contain a diescription of product selected for manufacture and the reasons for such selection. The report should also bring out the fact whether the product is exportworthy. It should also give details of the design of the product.

Managerial Aspects: The report should contain qualifications and experience of the persons to be put on the management of the job. If the entrepreneur will look after management, the report must emphasise as to how he is qualified to manage the venture.

Contents of a Project Report:

The following are the contents of a project report:

Objective and scope of the report.

Product characteristics ( specifications, product uses and application, standards and quality)

Market position and trends ( installed capacity, production and anticipated demand, export prospects and information on import and export, price structure and trends).

Raw materials ( requirement of raw materials, prices, sources and properties of raw materials).

Manufacture (processes of manufacture, selection of process, production schedule and production technique)

Plant and machinery ( equipments and machinery, instruments, laboratory equipments, electric load and water supply and the essential infrastructure).

Land and building ( requirement ( requirementof land area, building, construction schedule).

Financial implications ( fixed and working capital investment, project cost and profitability).

Marketing channels (trading practices and marketing strategy).

Personnel ( requirements of staff, labour and expenses on wage payment)