Financing and marketing management (1+1)

Unit 12 - Approaches for studying the problems in marketing

12.1. Approaches for studying the problems in marketing
Functional approach
The functional approach is one of the methods used in classification of activities that occur in the marketing processes by breaking down the processes into functions. A marketing function is defined as a major specialized activity performed in accomplishing the marketing process. A widely acceptable list of marketing functions includes exchange functions, physical functions and facilitative functions. Exchange functions are mainly composed of buying and selling while physical functions are comprised of storage, transportation and processing. However, facilitating functions are composed of standardization, financing , risk bearing and market intelligence.
Institutional approach
Another method of market analysis is to study the various agencies and business structure which perform the marketing processes. Where the functional approach attempts to answer the “what” in the question “who does what”, the institutional approach to marketing problems focuses attention on the “who”. Marketing institutions are the wide variety of business organizations that have developed to operate the marketing machinery. The institutional approach considers the nature and character of various middlemen and related agencies and also the arrangement and organization of marketing machinery. In this approach human element receives primary emphasis.
Commodity approach
Increasing attention is being given to the development of theory in marketing. Theorists have used functional, managerial and institutional approaches with relatively little emphasis on the commodity approach during the past decade. In this topic, the role commodities might play in formulating hypothesis which could lead to better theory in marketing is explored. While the commodity approach is perceived as obsolete with few marketing journals or textbooks referring to it as a marketing research method, commodity based papers are still prominent in the market literature this topic expounds sources and conditions of supply, storage, transportation and standardization and demand of agricultural commodities. It also explains the role of middlemen in commodity marketing. While sources of supply may refer to the geographical location of the agricultural commodity or the different stages of the marketing system, conditions of supply refer to the form of the product which may either be in its raw or processed form. Storage refers to the logistical, technical and economic consideration during the process of storing agricultural commodities. Transportation and standardization refers to the process of ensuring requisite quantitative and qualitative standards are met as well as the physical movement of the commodity from point of purchase to point of sale. Demand of agricultural commodity tries to capture the preferences of the middlemen in the movement of agricultural commodities from the point of purchase to the point of sale is also explained.