To get from point A to the point of sale, there needs to be a clear plan for selling. Understanding the functions of marketing helps business owners focus on the right areas. The 7 functions of marketing are the road map that covers each of the steps.
Let’s look into the 7 functions of marketing and why they’re all important components of marketing.
How are you going to get your products and services to your customers?
Distribution, while a study on its own, is an essential function of marketing. You might not think of it in the same category as marketing. But without functional distribution, the value chain ends far before it reaches your customers.
Distribution can imply certain planning elements depending on whether you’re selling goods or services. Moving products from a warehouse to well-thought-out retail locations is a quintessential distribution example. Distribution covers how you move products from one place to another. Trucking, rail, air freight, and shipping are the main methods.
The complexity of distribution depends on the business and its size. Many businesses have a central warehouse where all orders are delivered to. From there, products are shipped to stores. Larger businesses will have many warehouses, each of which has specified stores they deliver to.
Distribution planning must account for many specific factors affecting each business differently. They must account for seasonal fluctuations in supply and/or demand. When a business relies on imports, tariffs and customs regulations will become a part of distribution planning.
In general, distribution is simpler for businesses delivering services. But in many cases, service businesses must plan their distribution carefully as well. For example, for in-person service deliverables, office location is very important. Then, for customers that live very far away, the right setup for Zoom meetings and booking arrangements must be factored in.
Where are you going to get the money to start your business? If there is a lot of time between your startup and sales, how are you going to support your business at the beginning phases?
Financing is another factor that you may not intuitively associate with marketing. But marketing cannot exist without financing, nor can any aspect of your business. Financing is needed to open stores, distribution channels, and new marketing initiatives. Marketing is needed to deliver value and ensure customers are making purchases. The two are tied together from start to finish.
Entrepreneurs have several options for financing a new business. For smaller businesses, savings may suffice. Often, business loans and grants are necessary for getting a business started. In some other cases, shares of a business are sold shortly after launch to finance the early phases.
In addition to startup financing, other financing decisions may be called for. For example, is your business willing to offer credit to customers? If so, what credit options will you give them?
Of course, financing decisions vary widely according to individual and business circumstances. Nevertheless, financing is a critical function of marketing, and marketing requires money.
How are you going to inform potential customers of your products and services? How will you persuade them to make purchases?
Promotion is all about informing and persuading potential customers to support your business. For large businesses, it’s often also about simply reminding customers of the existence of a brand and its products. In either case, promotion communicates that your business offers value to customers.
Promotion is perhaps the most intuitive function of marketing. After all, promotion is what drives your industry’s customers to your business and earns you your market share. But promotion comes in several forms.
The first major form of promotion is advertising. Advertising can work effectively via one of many mediums. Even seemingly old or outdated mediums can produce good results. Businesses looking to advertise make decisions based on market research. They advertise where they know most of their customers or watching, which can include any combination of:
PR is the next major form of promotion. Public relations is centered on improving a business’s image. PR is normally focused on communities or missions that promote the common good. Businesses are increasingly expected to demonstrate social responsibility. So, many businesses participate in initiatives to promote recycling, equality, or other relevant topics. These are also used to help improve a company’s position in its market.
How will your products change ownership for your business’s monetary gain? How will you deliver your services and collect your compensation?
Selling is the process of convincing your customer to make the decision to buy. It’s a simple step, but it requires a lot of effort. A customer doesn’t just simply pull up and take off with your products. That simple decision to buy or not comes with a lot of subtle decision-making on the customer’s part. Your marketing has helped coax their mind into coming to your store and looking at your products. But they must then take those products to the cashier and pay for them.
A business’s selling decisions include those which lead the customer to make their purchase. This includes both your POS system and any salespeople you have on your payroll. For high-ticket purchases, it’s rare to just see a line of products without a salesperson in sight. Think about cars or expensive electronics.
Salespeople will communicate the value of your brand and your products to customers. They are the front-line professionals that ensure you get the sales you need. They help customers choose cars, clothing, or any other product while keeping the customer’s mind on the value of the purchase.
Selling is a technique and salespeople have their methods for closing sales. Ideally, a customer walks out of your store with more than they were thinking of buying when they walked in. But at the very least, selling involves not losing customers due to last-minute value objections. A customer might investigate a product but then decide they don’t want to spend the money. Left alone, these objections can fester in a customer’s mind. With a salesperson there to communicate with the customer and skillfully show off your products’ value, you need not lose customers to attrition.
How will you produce your products according to customer demand? How will your products maintain your brand’s standards and help you maintain your market share?
Product management is an ongoing process, not a simple one-off job. Once you’ve sold products to your end customers, you still need to keep up with their demands. Most products and services sold are a part of wider industries that have their own trends. Product management is the marketing function that ensures your products maintain their necessary qualities and keep up with the relevant trends.
Product management in marketing requires customer feedback. Greater engagement with customers is the key to understanding whether or not you’re keeping up with your market’s demands. Ideally, you can get more detailed feedback from them. Normally, customer reviews play a large part in product management.
If you want to maintain your market share, good product management will keep your business competitive. If you slack off on your product management, competitors will swoop in and offer your customers a better value proposition. This is why you need a good product management system to:
Sound decision-making requires research and information. This function of marketing is important because it enables you to keep up with changes in your market and stay competitive.
Analysis is normally required both before and after launching a product. However, failing to do adequate research before launching a new product or service can be a fatal, business-ending mistake. The purpose of this marketing function is to:
Fortunately, the internet has largely demystified these concepts. If the stakes are high, a business will normally hire a professional, full-time marketing team for these tasks. For simple information-gathering, social media and online publications make the most basic information more accessible.
In many cases, market research can be found through simpler methods. On-the-ground, “real-life” research is still conducted. As is the case with advertising, the variables depend on your industry and business situation. However, every business needs to find reliable market information to make profitable decisions.
Lastly, pricing is the marketing function that determines whether or not you sell. Pricing is in its own category. Every product or service has a set acceptable price range. That price is based on supply and demand, for which there is normally already copious market research available.
Pricing is variable based on the quality of products or services. In many industries, you can get away with selling for a much higher than average price. Luxury vehicles are one of the better examples. However, businesses selling at that rate have to provide a unique value proposition that can be justified.
Selling at lower than the accepted average can be wise in some industries. If you can beat your competition’s prices at the expense of quality, that can be acceptable for many market segments. However, businesses still have to make sure there is a market for that. In some cases, low pricing will be perceived as suspicious and undesirable, while in other cases high costs cannot be conceivably justified in a customer’s mind. This is why pricing is such an important function of marketing and should rely on quality market research.
Then, there’s the business’s financial situation. The costs of distribution will also affect most businesses ’ pricing. To be competitive, businesses need to provide reasonable prices that are realistic to their bottom lines.
The 7 functions of marketing should be studied by all business owners who plan on making any marketing attempts. Understanding these functions and their importance enables businesses to make informed and fruitful marketing decisions.