Livestock Economics, Marketing and Business Management

APPROACHES TO STUDY OF MARKETING

Approaches to study of marketing

• Marketing can be studied through any one of the following four approaches.
  • Functional approach
  • Institutional approach
  • Commodity approach
  • Behavioural system or decision making approach.

Functional approach

• Here the entire marketing process is broken down into many functions.
• A marketing function may be defined as a specialized activity performed in accomplishing the marketing process.
• The marketing functions are classified into three

Exchange Functions

• Exchange functions are those activities involved in the transfer of ownership of goods. There are two exchange functions viz. buying and selling.
• Buying and selling are the complementary functions around which all marketing efforts revolve and they are basic to the entire marketing process.

Physical functions

• Physical functions are those activities that involve handling of the products, storage, movement and processing of the goods.
• Storage, transportation and processing functions are primarily concerned with making the goods available at the desired time, at the proper place and in the correct form.

Facilitating functions

• Facilitating functions are those which make possible the smooth performance of the exchange and physical functions.
• These activities are not directly involved in either the exchange or the physical handling of products.
• However, without them, the modern marketing system would not be possible.
• They might correctly be designated as the grease that makes the wheels of the marketing machines go round. They are

• Standardization and grading
• Financing
• Risk bearing
• Market intelligence

Standardization and grading

• It is the establishment and maintenance of uniform measurements of both quality and quantity. This function simplifies the process of buying and selling.
• It establishes a rational relationship between price and quantity and hence gains the consumer’s confidence. It takes into account size, shape, form, composition, weight etc.

Financing

• It is concerned with advancing of money to the marketing functionaries to carry out various functions of marketing.

Risk bearing

• It is concerned with the acceptance of the possibility of loss in the marketing of a product. These risks are classified as physical risks and market risks.
• The physical risks are those which occur from destruction or deterioration of the product itself by fire, accident, wind, earthquakes, cold, heat, etc.
• Market risks are those which occur because of the changes in the value of the product as it is marketed.
• Changes in prices, tastes and preference of the customers may lead to losses and they come under market risks.

Market intelligence

• This is the job of collecting, interpreting and disseminating a variety of data necessary for the smooth operation of the marketing process.

Institutional approach

• In this approach, principles of marketing are formulated around the instiutions performing the marketing functions. This approach considers the nature and character of various middlemen and related agencies and also the arrangement and organization of the marketing machinery.
• In this approach, the human element receives primary emphasis and hence institutional approach is simply the study of middlemen.

Commodity approach

• In this approach, specific commodities are selected and they are followed through from the producer to the consumer.
• For study of  marketing of milk, it begins by examining the sources of supply, volume and nature of demand, different marketing functions involved etc.

Behavioural systems approach or decision making approach or management approach

• Marketing process is continuously changing in its organizational and functional combinations.
• Understanding and predicting these changes are a major problem in marketing.
• Every marketing system is composed of people who are making decisions in an attempt to solve problems in marketing.
• They take decisions on the product to be handled, the distribution polices, pricing, advertising, selling etc.
• In this approach, an attempt is made to find out how marketing decisions are made and should be made.
• In transferring the product from producer to consumer various functions are carried out by different marketing functionaries and they are called as marketing functions.
• They are, buying, selling, standardizing, grading, transports, storage and risk bearing.