Q.What is marketing? What functions does it perform in the process of exchange of goods and services? Explain.

Marketing is not the same as selling or advertising -- it is a much wider activity. Traditionally it is described as the performance of business activities that direct the flow of goods and services from producers to consumers, and it includes activities carried out even before a product is made (identifying needs, designing, packaging, branding) and after it is sold (customer follow-up). In short, marketing creates and delivers value to satisfy customer needs, while making the exchange of goods and services possible.

In the process of exchange, this CBSE Class 12 Business Studies chapter states that marketing performs twelve functions:

• Gathering and Analysing Market Information -- studying customer needs and the firm's opportunities and threats.
• Marketing Planning -- setting marketing objectives and the action programmes to achieve them.
• Product Designing and Development -- making the product attractive and competitive.
• Standardisation and Grading -- ensuring uniform, predetermined quality.
• Packaging and Labelling -- designing the container and the label.
• Branding -- giving the product a distinct identity.
• Customer Support Services -- after-sales service, complaint handling, maintenance.
• Pricing of Product -- analysing price factors and setting the price.
• Promotion -- informing and persuading customers (advertising, personal selling, sales promotion, publicity).
• Physical Distribution -- making the product available at the right place and time.
• Transportation -- moving goods to where they are needed.
• Storage or Warehousing -- storing goods to bridge the gap between production and sale.

Many people think marketing is the same as shopping, selling, or advertising, but it is a much broader activity. Traditionally, marketing has been described as the performance of business activities that direct the flow of goods and services from producers to consumers. Taking the modern, social view, Philip Kotler defined marketing as "a social process by which individual groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others."

The key point is that marketing is not merely a post-production activity. It includes activities performed even before a product is made -- identifying customer needs, gathering information, designing the product, giving it a package and a brand name -- and continues after the sale through follow-up activities that keep customers satisfied and bring repeat business.

To move goods and services from the producer to the consumer, a marketer performs a set of functions. This chapter lists twelve of them.

1. Gathering and Analysing Market Information. The marketer collects and studies information about customer needs, and about the firm's own strengths, weaknesses, opportunities, and threats, so that sound marketing decisions can be taken.

2. Marketing Planning. The marketer develops complete marketing plans -- for raising production, promotion, and so on -- and specifies the action programmes needed to achieve the marketing objectives.

3. Product Designing and Development. A good design makes a product attractive and gives it a competitive edge, so decisions about the product's design and development are an important marketing function.

4. Standardisation and Grading. Standardisation means producing goods of predetermined specifications to achieve uniformity; grading means sorting products into categories on the basis of quality, size, and other characteristics. Both assure buyers of consistent quality.

5. Packaging and Labelling. Packaging is designing the container or wrapper; labelling is designing the label put on it. These have become so important that they are called the pillars of marketing.

6. Branding. Giving a product a brand name (rather than selling it by its generic name) creates product differentiation, helps distinguish it from competitors, and builds customer loyalty.

7. Customer Support Services. After-sales service, handling complaints and adjustments, maintenance, technical services, and consumer information all aim at maximum customer satisfaction and repeat sales.

8. Pricing of Product. Price is a major factor in a product's success; the marketer must analyse the factors that determine price and take decisions on pricing objectives, strategies, and changes.

9. Promotion. Informing customers about the product and persuading them to buy it, using the tools of advertising, personal selling, sales promotion, and publicity.

10. Physical Distribution. Making the product available at the right place and time, covering decisions on channels of distribution and the physical movement of goods (inventory, storage, and transportation).

11. Transportation. The physical movement of goods from the place of production to the places where they are needed, since users are usually spread over a wide area.

12. Storage or Warehousing. Storing goods to bridge the time gap between production and sale, to smooth out irregular demand or supply, and to keep enough stock to meet contingencies.