Warehousing is a convenient place where goods are kept. It protects the products from dust, water, insects and sun. It creates the place and time utility. It also helps to maintain the stock so that there is no chances to be shortaged of products in the market. It means, it helps to regular flow of goods in the target market. As a result, there is no price fluctuation in the market. It also helps to take teh credit from the financial institutions. It accepts the risk and transfer to the insurance companies. Hence, it plays a vitakl role in marketing function. So respected office should take the correct decision on how to use, how much or what number of products should be kept on it.
Types of warehouses
The types of warehouses can be classified into the following categories.
1. Private warehouses: Those warehouse which are established and owned by private and large business for the private use is known as private warehouse. These type of warehouses are mainly established and owned by manufacturers to store their products until they are sold in the market. They are constructed near the factory building or near the market.
Private warehouses are mainly convenient to the owners. They are designed to meet the specific requirements of products storage and handling the needs of the company an organization. At present, the importance of such warehouse is decreasing because there are inadequate physical facilities more than other type of warehouse comparatively.
2. Co-operative warehouses: Those warehouse which are established and managed by co-operative societies are known as co-operative warehouses. The ownership of these warehouses are on the hands of few primary co-operative societies. Mainly those who can not invest the capital single to establish co-operative, they contribute equal capital and establish the co-operative warehouse. Services of such warehouse are first available to its members then to other people. Such warehouses are mainly established by the petty producers or farmers to store their products.
3. Public warehouses: Public warehouses are owned and managed by individuals, firms, companies or even public bodies like municipalities or government to store the products of general public. Licence should be taken from the government and should adopt the government rules and regulations to establish and operate teh public warehouses. They are run on commercial basis, so they are also known as commercial warehouses which offer specialized service to all the interested parties such as producers, traders, merchants even general public etc. against nominal charges.
4. Bonded warehouses: Bonded warehouses are those warehouses which are licensed by the government to accept imported goods for storage before custom duties are paid by the importers. These are mainly situated near the ports which are established by the government under the close supervision of custom authorities. Such warehouses plays significant role to promote international trade.
The importers have to enter into a bond with the custom officers, along with sureties, assuring the payment of duty before removing the goods from the bonded warehouses, which are known as 'bonded warehouses'. The goods in which custom duty is not paid, they are kept in the bonded warehouses, are known as goods in bond.
5. General Merchandise warehouse: The warehouse which provides the facility to store all kinds goods is known as general merchandise warehouse. Such types of warehouses are the most common type of warehouses. This is just a place to store for manufactured, semi- manufactured and new materials until they are required by producers, distributors, retailers, customers etc. It is a simple warehouse and does not provide any additional benefits to the product.
6. Speciality commodity warehouse: Speciality warehouse is constructed to store the certain goods which requires special treatment. It gives storage facility only for a particular products. Chemicals, fertilizers, petroleum products coffee, tobacco, cotton, wool etc. needs special warehouses with special facilities. The purpose of this warehouse is to keep the products of intrinsic value in original form.
7. Refrigerated warehouse: Refrigerated warehouse is established to store the perishable products such as fish, fruits, vegetables, dairy products etc. So that it is also known as cold store wares. It provides longer life to perishable products and maintains the intrinsic value of goods. These goods are available throughout the year dut to the establishment f cold storage houses. It also helps to maintain the reasonable price in the market. Generally, such type of warehouse is established at the consuming centre.
ion and grading of the product. The standard weights and measures are kilo, meter, liter etc. Thet determine quantity which ensure smooth marketing operation. They are enforced by the government and its local bodies.
b. Size: This is another important base for the standardization and grading of the product. Size helps to determine the standard and grade of the product. Readymade garment, shoes, nut-belt, pipe, screw, etc. are sold in size standards.
quality. It is difficult to establish the standard. However high, medium and low quality are the bases for this purpose. Furniture, food items, cotton and medicines etc. are classified under this basis.
d. Colour: Some of the products are also standardized and graded on the basis of their colour. Mostly, agricultural products 
Standardization means the establishment of certain standards of the qualities or the intrinsic physical properties of a commodity. It certifies that the products are of a certain quality. It is a model. It is a grade or a class. It is measured in units of qualities or characteristics of product of service. It may be based on a number of characteristics such as color, quality, weight and shape and size etc.
It plays important role in marketing as it assures for the quality uniformity of the product to the customers.
Elements/Functions of Standardization:
There are some elements/functions of standardization which are discuss briefly.
1. Determination of standard: Standard is a model. It is an example. It is a grade and class, which generally measures accepted fixed value. It consists of basic limits to the qualities of product. It may be based on a number of facto
rs such as colour, quality, weight, shape and size and strength etc. To determine the standard of the product is major duty of Manager in the organization. Because it assures the customers for consuming or using the product through it's quality uniformity. There are three types of standard-- Quality standard
- Quantity standard
- Standard of size and measurement
2. Grading: Simply, grading means the division of productd into classes of similar characteristics in size and quality. It separates the products on the basis of pre-determined norms or standards of shape and size, colour, degree fo cleanliness, acidity or other significant characteristics. It classifies the products in accordance with the needs of the standards. It indicates a certain standard of quality or performance, which facilitates to the people for easy using the goods and services.
3. Inspection: After grading the product, it is necessary to inspect the effectiveness of grading. The aim of checking or inspecting is to test the goods in order to determine the characteristics. It is the process to confirm the standard of the product. It helps whether it maintains or does not maintain the quality.
4. Labelling: A label may be a piece of paper including printed statement or a met
al imprinted, may be a part of package or attached on it. It includes price, content, name, place, quality, weight etc. of products. The process of attaching the label is called labelling. It helps to know the detail information of products.There are many importance of standardization but among them ten of them are listed below:
1. Easy sales
2. Wider market
3. No risk
4. Satisfaction
5. Good will
6. Easy claims against losses
7. Easy loan facility
8. Reasonable price
9. Low transport cost
10. Reduce sales cost
11. Product information
12. Mass production
13. Employment opportunity
14. Long period contract
In modern marketing technology, selling is a means of promotion, i.e. persuassive communication. It persuade a propective buyer to buy the goods or services. Main objectives of selling is to dispose goods at satisfactory price. It is related with product planning and development in addition to create the demand.
Elements/Functions fo selling
There are different elements or functions of selling. They are listed and discussed below.
a. Product planning and development
b. Contact
c. Demand creation
d. Negotiations
e. Contract
Product planning and development is one of the important elements of selling. If there is no product, the question of selling does not come. The starting point of marketing is with a satisfactory product through which consumer's satisfaction aimed. All producers must aim to make to produce a quick mover.
It is the process, which covers the technical knowledge of the product as to its cost and profit consideration available from sale. It is the starting of new idea of one product up to the day it has gone out of the market. The nature of the product is decided by product planning, while product development acts according to plan, i.e. it makes the goods available in accordance with the plan, in connection with the quality, quantity, price, place and time of a customers. It includes product designing, branding, packaging and labeling. So, it is customer- oriented function
, which covers several marketing activities.Selling function can be operated smoothly if there is contact between buyers and sellers. After contacting the potential buyers, the sellers must create the demand for particular product. Demand creation means special efforts to stimulate a want or desire for goods with the ultimate objectives of sale as profit. It is the process that designed to stimulate the existing desire to take the shape of demand.
Negotiation is the bargaining or discussion between the buyers and sellers to fin
alise the terms and conditions of scale. It can be oral or in written form wher the buyers try to reduce the price and request to provide the better services from the sellers. Finally, they come into the point which leads them to make a contract. Contract is the written agreement where all the terms and conditions for buying and selling are clearly written when it is prepared, both buyers and sellers will sign there. After the signature, the sale is completed and the title is transferred from sellers to buyers. If there is any dispute, the parties proceed to the court of law to get redress.
According to prof. Pyle, Marketing function has two major groups. They are concerntration and dispersing function which is clearly given in the following lists or groups.
Marketing Functions:
Concerntrating:
1. Buying and Assembling
2. Transportation
3. Storing
4. Grading
5. Financing
6. Risk Bearing
Dispersing:
1. Selling
2. Transportating
3. Storing
4. Grading
5. Financing
6. Risk Bearing
7. Dividing
But according to Clark and Clark "Marketing functioning as an act, operation or service by which original producers and the final consumers are linked together."
From the above definition, marketing functions can be classified into the main three categories.
Marketing Function
1. Merchandising function:
a. Buying
b. Selling
c. Standardization and
d. Grading
2. Physical function:
a. Transportation
b. Warehousing
3. Facilitating function:
a. Financing
b. Risk Bearing
c. Marketing Information
d. Promotion
1. Merchandising function: It is also known as exchange function. This function helps to transfer the goods as well as ownership from one party to another party. This function is done for matching the products with buyer's need and making available them in the target market.
a. Buying: It is one of the important functions of marketing. It is the process to transfer of ownership from seller to buyer. Buying is indeed an art and we need expert buyers to make scientific purchases in modern market. In marketing, the buying and selling are very important. There are some basic objectives of buying.
1. to get the right quantity
2. to get the right quality
3. to get in right time and
4. to get in right place.
Buying is very closely related to production and marketing department. Producers must work in co-operation to fulfill the needs of marketing set by top management.
Elements/Functions of buying: There are some elements of buying which are also known as functions of buying. They are discussed as follows:
1. Planning to Purchase: It is the first element or functions of buying. The buyers should make the plan to purchase the goods. Their plan may vary and base on their anticipated sales and consumers' demand. It must be depend on customers' demands and needs. Under planning of purchase, three elements, functions are listed beloew:
a. Preparation of budget b. Determining the rate of turnover and c. Changes in price.
2. Contact: It is related with the location and determination of sources of supply. The buyers must contact to the number of potential suppliers. While selecting the suppliers, the buyers must consider the efficiency, financial strength, reputation and goodwill of the suppliers.
3. Negotiation: It refers to the process fo bargaining between buyers and sellers. 
Buyers and sellers meet together with a view to discuss the contents of contract such as price, payment, quality, quantity, mode and time of delivery, transportation and discount etc. After the detailed discussion, they agree to make the terms and conditions for buying and selling goods and services.
4. Assembling: It means bringing or collecting a large number of similar goods of many producers or different sources at a proper place at proper time. It is also known as centralization.
5. Contact: It is a written document where all the terms and conditions such as quality, quantity, price, discounts terms of delivery and payment etc. are clearly written. When it becomes finalized, both buyers and sellers activities start. If anyone party violate this contract, another party can appeal to the court for justice and penalty has to be paid as specified in the contract agreement.
Methods/Types of Buying: Buying methods depend on the nature, size and volume of business. There are some methods to buy the goods. Thet are discussed below. a. Concentrated buying b. diversified buying c. Reciprocal buying d. Hand to mouth buying e. Speculative buying f. buying by samples g. buying by inspection h. Buying by description i. buying by contract j. buying by tender.
If purchases are made from a ssingleor a very few suppliers,is known as concentrated buying. Under this method, the buyers purchase all the required goods from a single seller or selected a few sellers. Buyers can get reasonable price rate, quantity discount, best services, low handling and transportation cost, adn prompt delivery. But if the supplier fairs to maintain regular supply, it will have adverse effect. There is also limited choice to buy the goods due to single or few number of suppliers.
If purchase are made from a large number of suppliers that is known as diversified buying. The buyers enjoy competitive price and wider selection facilities. The danger of putting all eggs in one basket is removed. But this method can't provide quantity discount to the buyers. Similarly, it also increases transportation cost.
Reciprocal buying is like barter system where buyers and sellers enter into a contract to buy and sell the products mutually. Under this method, better quality of goods can be obtained at reasonoable price. It helps to build the good relation and increases purchasing and selling activities. But it reduces the choice of suppliers. There is limited choice and sometimes prices may be higher too.
Hand to mouth buying method also known as conservative buying. Under this method, buyers purchase in small quantities or lots to meet the current or immediate needs. There is no risks of loss and no speculation. Minimum capital is sufficient to purchase the goods and no problem of storage. Speculative buying is also known as forward buying because purchase are made in a big quantity. This method is opposite of hand to mouth buying. By expecting a hugher price in the near future, buyers may purchase the goods in large quantities. However, there is high risk of overstocking and fluctuation of price due to imbalance of market.
Under the buying by samples method, buying purchase the goods according to the sample. Sample are given to the customers by the suppliers. The seller sends the s
ample and price list of the products to the customers. The products and price should be accurate according to the sample and price list. Otherwise, the buyers can return the product. It is very easy for distant places because they can inspect the samples but the best selection of sample is required. But in the method of buying by inspection, the buyers directly visit different stores to inspect the products. The buyers inspect and examine the products directly with the product, thet can purchase the goods. This method is more applicable for wholesalers and retailers.
If the purchase is made on the basis of detail information about the product feature, price and quality etc. through the booklet or catalogue is known as buying by description. Under this method, seller provides all the detail information such as size, performance and uses of product, so that buyers can purchase on the basis of description given by the sellers. Advertisement and brand name of the product also sopport to purchase and sale of the goods. Un
der this method of buying by contract, purchase is made under a contract for a long period with fixed suppliers. The buyers purchase the goods continuously at a fixed price according to the contract. It is mainly suitable when the price is stable and not liable to wide fluctuation but the buyer cannot got the benefit of favourable change in the price. When products are made on the basis of tender is known as buying by tender. Generally, large companies and government offices purchase the goods under this method. All the interested suppliers will send the quotation or submit the form according to the buyers requirement.
1. Advertising: Advertising is paid form of non-personal presentation and
promotion of ideas, goods and services. It is done by an identified sponsor. It includes mass media such as radio, Tv, newspaper, maggzines, display etc. It conveys the message about the products and try to persuade the consumers to buy the goods. So, it can be taken as an important and effective tool to create the demand of the product.2. Personal selling: Another element to create the demand is personal selling. Under this
presentations, meetings, incentives programs are used as tools to create the demand of customers. Similarly, push sale is done under this method.3. Sales Promotion: Sales promotion is such markting activities other than advertising, personal sellling, publicity and public relation. It is an aggressive method of selling which is used for short term to ecourage the customers. Samples, coupons, discounts, contests, free goods, gifts, trade fair and exhibitions etc. are used as tools of sales promotions. These tools create the demand of the products and help to increase the sales volume more than in normal period.
4. Publicity: Publicity is non-personal and non-paid stimuli of demand for a product/services or a business unit through mass media such as radio, Tv or stage. It is done through news and feature story in a publication to craate teh favourable impression towarda the product ro organization.
5. Public relation: Public relation is another important tool to create the demand. It creates, develop and maintains the good rlation between the organizations and the general public customer meetings, periodical reports, press conference, public speech etc are the
tools used under this method. These tools help to increase the goodwill and maintain the good-relation as a result it helps to promote the sales by creating the demand of customers.
There are different concepts of needs, wants and demand below. All these words may have same meaning in ordinary sense. Here, their meaning, uses and concepts are discussed below which make us to understand more during the learning of market and marketing. In economics and marketing viewpoints they have different meanings. They are being discussed below clearly.
Needs: Needs are a state of felt deprivation. The necessity of something is need. For marketing, human need is the starting point which is complex in nature. When one want is satisfied another want is felt. Human needs can be physical, social and individual. Physical needs are food, clothing shelter. Social needs are love and affection, friendship etc. and individual needs for knowledge and self expression. These needs are not created by marketers but they are a basic part of the human life.
Wants: The term wants means something desired or needed. It is said that man is a bundle of desires and the nature of human beings is to desire many things for the betterment living standard and for the satisfaction by consuming different goods and services. Human wants are un
limited but resources are very limited. Limited resources should be implemented wants. For this purpose, economists suggested to rank the problem and study about the alternatives use of resources. The cube is that wants expands with the civilization. The most important nature of want is that it differs from person to person, it depends upon society, civilization and various other factors like living status, wealth, age, gender and so on. Some important features of wants are wants are unlimited, complementary, competitive, vary with time, place and person, all wants are not equally important, wants multiply with civilization. Thus, in the marketing wants should be properly identified and evaluated to meet their unfulfilled wants.
Demand: In ordinary sense demand and want mean same thing, but in economics, there words give different meaning. Demand is not the same as desire or need or want. Demand
for a commodity means effective desire, willingness and ability to pay. So, demand means the combination of effective desire, price, quantity and time. Demand is the quantity that will be purchased from particular commodity at various prices at a given time and place. By demand we we mean the various quantities of a given commodity which consumers would buy in one market in a given period of time at various prices, or at various incomes at various prices of related goods.
In demand, two things should be noted.
i. Demand always means demand per unit of time.
ii. The condition on which the thing is demanded should be specified.
A buying motive is the reason why the customer purchase the goods. Motive is the driving force behind to purchase the goods. So, motive refers to thought, urge, feeling, emotion and drive which make the buyer to react in the form of a decision. Motivation explains the behaviour of the buyer why they are going to buy the goods. They buy the goods due to several motives such as economic, social, psychological etc. for example in winter seasons we are motivate to purchase the woolen clothes to protect from the cold. Likewise, we are motivated to purchase the fans in summer season to get the relief from the hot.
Knowledge of buying motive of customers is important for the producers and suppliers. The needs and desires of customers and their buying behaviour should be properly discussed. This will help them to take proper step for
drawing the attention and sale the goods. So, buying motive is concerned with the reasons that impulse the buyer to take the decision for the action. It motives or induces the customers that may be affected due to several reasons such as pride, fashion, fear, safety, love and affection, comfort and convenience and economy. After analyzing and evaluating it, the producers as well as suppliers can effort to develop the product and advertisement creativity.Different authors have classified buying motives in different ways. According to Malvin S.Hatrick, there are two classifications.
a. Primary buying motives: Primary buying motives are related to the basic needs of human being such as hunger, thirst, sleep, sex etc. Due to these needs people get motivated to purchase the goods.
b. Secondary buying motives: Secondary buying motives are those, which are influenced by the society where he is born and lives. It is created after fulfilling the basic needs. These motives are curiosity, comfort, security, love and affection.
It can be further classified under three main headings.
Classification of buying motives:
1. Emotional
a. love and affection
b. Curiosity
c. Fashion
d. Pride and Prestige
e. Sex and Romance
f. Fear
2. Rational
a. Economy
b. Utility
c. Comfort and convenience
d. Durability
e. Security
3. Patronage
a. Service Motive
b. Quality
c. Location
d. Store loyalty
e. Friendliness behaviour
1. Emotional Buying Motives: Buying motives based on feelings or passions are known as emotional buying motives. These motives are not based on judgement, but they purchase on the basis of motion. There are some motives/elements which are as follows.
a. Love and affection: It is an important buying motive which includes the buyers to purchase the goods. Due to love and affection to the children, we buy toys, dress biscuits etc. A husband may buy saris and cosmetics for his wife due to the love and affection.
b. Curiosity: Curiosity is the desire for new experience which motivates the people to buy the specific goods. Thus, to get the new experience, customers purchase the goods.
c. Fashion: It is an important motive that can change the mind of the customers. Generally, customers try to copy particularly the movie stars, sportsmen and athletes etc. So, all the producers advertise their products with the help of these popular personalities.
d. Pride and prestige: Due to the pride and prestige in the society, customers purchase expensive and luxuries goods in- order to maintain their status. They purchase toyota car, Karizma motorcycle, fifty-nine inch colour television etc. to get the high position in the s
ociety.e. Sex and Romance: Sex and romance is another important emotional buying motive that induces the customers to purchase the goods. Due to sex and romance, they purchase fancy dress, cosmetic items, perfumes, shaving lotions etc.
f. Fear: People are generally afraid of losing their health, wealth and life. Thus, it motivates to purchase the goods such as insurance policy, hiring lockers in bank and membership of health club etc. These goods or services help them to avoid their fear.
2. Rational Buying Motives: Rational buying motives are those which are based on sound judgement. They purchase the goods through proper testing, comparing and observing the goods on the basis of price, quality, durability etc. This motive is important to the customers because it helps them to save the unnecessary cost. It includes the following motives.
a. Economy: Under this motives, the customer prefer that products which are more economy or cheap in price. To get more profit and discount, customers purchase such goods. This element attract and encourages the customers to buy such goods in large quantities.
b. Utility: Customers want to purchase that goods which have more or higher utility. Utility satisfies the wants of the customers.
c. Comfort and convenience: Every people has the desire to live in comfort and convenient way as a result they get motivated to purchase such goods which provide comfort and convenience. Customers purchase T.V., DVD, motorcycle, washing machines, heater, cooler, sofa set etc. for their pleasure and comfort.
d. Durability: It is another element of rational buying motive. Due to the durability of the products, customers are motivated to purchase the goods for example toyota car, pulsar motorcycle, sony TV etc are purchased due to their durability to use.
e. Security: It is important to the people. People are not feeling secure from the floods, earthquakes, theft, docoits etc. in the society. So, the customers purchase the key lockers, open the bank A/c and keep the watchman etc to be secured.
3. Patronage Buying Motive: When the customers purchase the goods or services on the basis of particular place, special discount, present price, decoration, behaviour and behaviour and other facilities are known as patronage buying motives. Following points are discussed under this motive.
a. Service motive: Service is an important motive which inspires the customers to purchase the goods. Customers purchase the goods to get the services, such as credit facility, home delivery facility, free installation, free repair and maintenance services.
b. Quality: Due to the quality of the goods, customers are motivated to purchase certain goods or services. If products assure the quality, the customers are even ready to pay the higher price of such goods.
c. Location: Location also affects to purchase the goods. Customers prefer to buy those goods which are easily available near their home or locality.
d. Store loyalty: Store loyalty is another important element which plays significant role in buying motive. We purchase different goods due to the loyalty of the store such as attractive appearances, trust in weight, quality, price etc.
e. Friendliness behaviour: Friendliness behaviour of salesman also affects the customers
to purchase the goods from the same suppliers which is also discussed under the patronage buying motives.
There are different types of non-institutional customers. They are as follows:
1. Impulsive customers
2. Nervous customers
3. Silent customers
4. Talkative customers
5. Argumentative customers
6. Deliberate customers
7. Women customers
8. Suspicious customers
9. Price minded customers
10. Ill mannered customers
11. Undecided customers
12. Decided customers
13. Truthful customers
14. Untruthful customers
15. Favoured treatment customers
1. Impulsive customers: Customers those who take quick decisio
n on emotion is known as impulsive customers. They purchase the goods not on the basis of requirements but purchase on emotion. They have been impressed by the behaviour of the salesman. So, the salesman should have brief talk and minimize conversation to handle such customers.
2. Nervous customers: Nervous customers are those who are nervous and have lack of self confidence in decision making.Decision taken by those nervous customers may be wrong. The salesman win the confidence of such type of customers through providing proper suggestion and guidance about the product. Similarly,the salesman should give the detail description and relative advantages about the products to the customers.
3. Silent customers: Inactive and do not express own views and opinions about the products is known as silent customers. It becomes very difficult to know the internal feelings of such customers as they do not express their opinions. The salesman must friendly demonstrate maximum number of products so that they would be able to win the confidence of such customers.
4. Talkative customers: Talkative and do not want to hear others without caring about salesman is known as talkative customers. The salesman must behave in polite and courteous manner for such type of customers. They should have patience hearing, tactful handling and should never come into emotion. They should give more emphasis to such customers to complete sales.
5. Argumentative customers: Argumentative customers are interested in making arguments with salesman. They challenge the salesman and introduce themselves knowledgeable and superior.The salesman should motivate them by providing evidential proof and should give guarantee to the customers about the product.
6. Deliberate customers: Those customers who are more practical and matured in taking decision to purchase the goods are known as deliberate customers. They purchase the goods after the detail study about the product from different angles. Such customers do not want to buy substitute products. The salesman should demonstrate fact and actual products with detail information to motivate such customers.
7. Women customers: These customers have been playing important r
ole to buy different goods. They have sharper sense and keener taste than the men and attracted with colourful and fashionable items. They want quality products in lower price. They are slow in decision making and have better bargaining power. The salesman should motivate them by respect and courteous manner. Similarly, they should talk politely and behave them like a queen.
8. Suspicious customers: Those customers who are more critical and unfriendly in nature, are known as suspicious customers. Such customers never believe to the salesman and always doubt in every explanation and statement of salesman about the product. The salesman should provide actual proof by demonstration of goods and give guarantee of the products. The salesman should not come into the emotion and should have adequate patience. Similarly, they should assure them to replace the products if such product does not maintain quality.
9. Price minded customers: Those customers who give more priority to the price rather than the quality of the product is known as price minded customers. They are attracted by the lower price of the product and try to reduce the price as much as possible. The salesman should convince tactfully that price should be considered in relation to quality and durability. They must force that low price goods may be inferior in quality, durability and may not be cheaper in long run.
10. Ill mannered customers: These customers are negative and crude in nature. They always try to dominate or condemn the salesman or may speak roughly relating the price, quality, service etc.Such customers may be motivated with polite and courteous behaviour. So, salesman should not come into the emotion and deal with tactful manner by using own knowledge and ideas which can inspire them to purchase the goods.
11. Undecided customers: These customers cannot easily decide to purchase
the goods at right time. They consume more time to take decision and always postpone their decision for next visit. The salesman should suggest and encourage them about the quality and utility of the product. Similarly,salesman should show fear about changing price, latest design, fashion etc. As as result, customers can take the decision easily.
12. Decided customers: Those customers who have more knowledge and confidence in their decisions are known as decided customers. They are confident over whatever they buy and that are the best and meet their requirements. The salesman have to support and tactfully divert them towards the product. They should be able to understand about their needs and display the product accordingly.
13. Truthful customers: These types of customers listen and support the salesman but do not purchase the goods. They never oppose the expression of salesman and do not purchase the goods. Similarly, they do not tell the reason for not purchasing the goods which is very difficult to deal. That is why the salesman should find out the reason for not purchasing the goods. The salesman must convince and provide all kinds of incentives and preferences according to the provision of sales.
14. Untruthful customers: These customers want to create confusion by unnecessary dealings. They try to trick the seller from the wrong information. They may mention wrong price of competitors goods and may say unless the price is lowered, they may go another store to purchase the goods. So, salesman should be very careful to such customers. They should provide actual price and quality of products and should explain that it is not possible to sell the products at the lowest price.
15. Favoured treatment customers: Those customers who are expecting special incentives from salesman are known as favoured treatment customers. They want to get special facilities like price, discount, credit facilities etc. So, the salesman should motivate them by
providing reduction in price, credit and other additional facilities etc.
There are different features of institutional customers but only some of them are discussed below.
1. Few in number 2. Purpose of buying 3. Complex buying structure 4. Budgetary constraint 5. well informed 6. Derived Demand 7. Direct purchase from producers
Institutional customers are few in number but they buy large quantities to supply the goods to the large number of customers of different localities. They purchase the goods for the processing, for the further production, fro organizational use and for reselling purpose, etc. The requirements may vary, for example producers purchase the raw materials for productions or processing. Similarly, offices purchase the goods for official uses while for relatives, to sell the goods to the ultimate consumers. Buying structure of the customer is more complex than non-institutional customers. They should take the permission from the top level management and also discuss in different level purchase under the certain terms and conditions. Intitutional customers have budgetary constraints. Budget is allocated to each product and amount can be spent under the provisions of budget. There is no authority to purchase the excess goods. They should take the permission to purchase such excess goods. Institutional customers are well informed about the product feature, quality, durability, price etc. Before purchasing the goods, they compare and access the relative merits and demerits of goods from different angles and finally they purchase the goods.
The demand of institutional customers depend on the demand of ultimate consumers. It is known as derived demand. In accordance with the demand of different customers, their demand will be created. So, the demand of these customers is derived from the demand of ultimate consumers. Institutional customers do not buy directly from the producers. They are the institutional customers who purchase the goods to supply the different customers. They need large quantities of products which are possible only from the producers.
Buying process of non-institutional customers are discussed below in point wise clearly:
1. Need Recognition: All of the customers must identify their needs. The needs can be activated by internal stimulus such as thirst, home, hunger, sex and external stimulus such as advertisement and display. The customers should study and analyze them to find out their needs and problems. Then, they can make the purchase for satisfying their needs.
2. information searching: After the recognition of needs, the customers should try to find the information about the products which can purchase by them. The information may be about features, advantages and benefits of the products. The information about the products can be collected from the personal sources, public sources, commercial sources and experimental sources. Personal sources includes family, friends, neighbours, relatives, etc where as public sources includes mass media like television, radio, newspapers, internet, magazine etc. then commercial sources includes advertisements, salespersons, packaging, display, etc. and experimental sources includes handling and examining etc. of products.
3. Evaluation of Alternatives: This is third stage of buying process. After searching the information from different sources, these should be properly evaluated from different angles. While evaluating goods and services, different bases can be used such as product attribute, brand belief, their utility etc. That alternative should be selected which can provide maximum satisfaction to the consumers. Similarly, they should consider the opinion of family, friends and relatives etc to evaluate the alternatives.
4. Purchase Decision: After evaluation of alternatives, the consumers should take teh decision to purchase or not to purchase the goods. While taking purchase decision they should select the product on the basis of name, mode of payments, delivery, warranties and after sales services etc.
5. Post Purchase Evaluation: This is last stage of buying process of non-institutional customers. The customers continue to evaluate the goods after making purchase. The customers may or may not be satisfied with the goods. If the satisfaction is more than expectation, they will continue to consume and purchase the same goods from same suppliers but if the satisfaction, they become unsatisfied and will not consume and purchase the goods from same suppliers.
Buying process of institutional customers
There are different process of buying goods and services by the customers. Some of the process of buying are discussed below.
1. Problem recognition: The buying process of institutional customers begin when problems or needs are recognized. The customers must recognize their needs which may be caused by internal or external stimuli. The needs or problems such as to participate in trade and exhibitions, purchase new machines and equipments, purchase raw materials etc.
2. Product specifications: The buyers must prepare detail specifications about the products or services. It is generally done by technical personnel by which the value of goods is analyzed.
3. Supplier search: The buyers must search the potential suppliers and list out the suppliers who can supply the goods according to their requirements. The list of suppliers can be prepared from the internal and external sources. The internal sources may be company, files catalog and purchase department where as external sources may be from the public notice.
4. Inviting proposals: Invitation can be done publically through different media such as television, magazines, newspapers and radio etc. All the interested suppliers will submit the proposals along with samples as per the needs of the buyers in order to supply the goods.
5. Evaluation of Alternatives: Several criterias may be adopted such as performances of the suppliers, regularity, quality, terms of delivery, price, reliability and its evaluation. After evaluating all the alternatives, customers must take the decision to purchase or not to purchase the goods.
6. Purchase Decision: The supplier is selected and purchase step is taken. Before taking the decision to purchase, negotiation is made such as terms of sale, method of payment, warranty and credit arrangement etc.
7. Post purchase evaluation: It is the last process of institutional buyers. In this stage,performance of product and supplier is evaluated. Actual performance is compared with specification. It helps to determine whether to continue the supplier or change or end the situation. It the customer is satisfied, the purchase can continue otherwise the relation may get broken.
There are mainly two types of customer.They are institutional customers and non-institutional customers. Those customers who purchase the goods for further processing, selling, production or office use is known as institutional customer. The examples of institutional customers are middlemen, producers and office.
The customers who purchase the goods for own or family is known as non-institutional customers. Ultimate customers and family members are included under this category.
1. Product mix: Any thing that satisfies the needs and demands of the people is known as product. It is primary elements under the marketing mix as all the marketing activities are related to the product. If the product fails to meet the requirements of the customers, it can't face the competition and no other activities will support it. Thus product plays vital role in the marketing.
The organization must considered the following components about the product mix.
a. Product, planning and development
b. Standardization and grading
c. Branding
d. Packaging
e. Labeling
f. After sales services and
g. Warranties etc.
2. Price mix: Price mix is the amount of money which is paid by the people to get the product. The manager of the organization determine teh reasonable price that influence to the customers to purchase the goods and services. Similarly, the price must satisfy both the suppliers and buyers. High or low of the price will effect the demand adn supply of the product. So, teh components like (a) price list, (b) Discounts and allowances (c) competitors price (d) Pricing objectives (e) Terms of sale (f) Government policy and (g) cost of production etc. should be considered by the manager to determine the price.
3. Place(distribution) mix: It supports to delivery the product from origin of production to place of consumptions. By focusing to provide the right to product, right to quantity, right time to right place. Thus, the producers must consider and manage the components like proper selection of distribution channel, dealer motivation physical distributions like order processing, material handling, warehousing inventory management, proper transportation to make the product accessible and available.
4. Promotion: The activities like communication and promotion of products to the ta
rget market is included in the promotion. It's very essential to the organization because organization can't be succeed without the promotional tools. Promotion will make fruitful to all others elements of marketing mix. It helps the customers to stimulate and create the demand of the products. Advertising, sales promotion, personal selling, direct marketing, publicity and public relation etc come under the promotion mix.
Marketing mix means the set of marketing tools which is used by the organization to meet the customers' needs and achieve the goals in a target market. Product, price, place and promotion are the marketing tools. The tools are also known as 4Ps or components or elements of marketing. The tools will influence the customers towards the product. So, the organization must create and manage the effective marketing mix to fulfill the unsatisfied wants and demands. Therefore, the components or elements play vital role in the marketing which were developed by Mc-Carthy.
According to Mc. Carthy- Marketing is the controllable variables which the company puts together to satisfy its target market.
So, we can say that marketing mix is the combination of product, price, place (distribution) and promotion which should be properly done by producers to satisfy the needs of the customers and goals of the organization as well.
The four elements of marketing are product mix, price mix, place mix and promotion mix.
Importance of marketing can be discussed in three different headings as consumers, firms and society.
1. Importance of marketing to the consumers:
Marketing provides different information about the product and services to the consumers. It helps them to know and understand the different benefits and techniques of products through advertising, publicity and public relation. Marketing also provides satisfaction to the consumer by providing different products to meet their demand and tastes when they need.It provides different varieties, designs, colors sizes and quality of products, which facilitate customers to select the best one according to their demand and capability. Marketing develop the living standard as it provides such types of products which completely change the way of living style of the customers in the society. It also creates values of the products to the customers through the creation of place, time, quantity, utility and images.
So, the customers can get required products according to their time and place. Marketing creates the value of place through providing the goods at the required place and creates the value of the time by offering the goods and services at the time when customers required them.
2. Importance of marketing to the firms:
Marketing is also very important to the different firms. It can easily distribute the products because it suggests in applying proper and effective channels of distribution. It also suggests to manage the transportation and wire-housing systems which help the firm to delivery the product from origin of production to the site of consumption. It provides valuable information which helps them to make effective plan for future and right decision. Firm can maximize the profit through the marketing. It suggests to reduce unnecessary costs and utilize the revenue in proper way. Information of exchange among consumers and firms is important for the business organization. Exchanging information is possible only from the marketing because it accumulates the opinion and ideas of different customers and supplies to the management.
3. Importance of marketing to the society:
There is a very great importance of market and marketing in the society. It is an important source for the creation of employment opportunities in the society. Many people may involved in different activities of marketing such as production, distribution, promotion and selling. Marketing helps in developing the living standard of the customers in the society. It provides goods and services according to the demand and preferences of the customers. Such goods or services provide satisfaction to the customers. Marketing helps to utilize the different resources such as natural, financial, physical and human resources in the society. These resources help the economic development of the country.
Selling concept is developed after the failure of product concept. It assumes that consumers will either buy or not buy enough products unless the organizations persuade them to buy the products. It believes that customers will purchase the goods if aggressive promotional tools are used. So, this concept applies advertising and personal selling to persuade the customers to purchase the goods. This concept is very common in modern business organizations.
Marketing concept is consumer oriented concept as it focuses first to determine the needs and demands of consumers and then to supply the goods accordingly. It believes that the key to achieve organizational objectives is to deliver the goods more effective than competitor through integrating marketing activities to fulfill the needs and wants of the target activities. It mainly focuses on consumers needs and satisfaction. It is very useful to get the success in the competitive market.
It's main objective is to make what customers want and focuses to determine t
he target market before producing the goods that's more effective than the competitors. Marketing concept also integrates all the activities that affect the customers through co-ordinates marketing efforts.Societal marketing concept is the latest concept of marketing. It is the combination of two words. They are societal and marketing. It focuses that the organizational objectives should be obtained through the satisfaction of customers' need and the society's well being. It also suggests the organization to maintain the balance among the three considerations. They are company profit, consumer satisfaction and society's interest because marketing creates environmental problem, shortage of resources and rapid population growth. In fact, this concept is developed when inflation, environmental destruction, negligence to social welfare and increasing population appears there. So, this concept concentrates that business organization should bear such anti-social conduct through bearing social responsibility such as control of pollution, creating employment opportunity and public awareness.
Hence, organization should be able to solve the entire problems through the right decision about the social welfare. It helps the organizations to operate different activities in long time.
Evolution of marketing can be studied by dividing them into different stages according to their periond of development and research. Here, the evolution of market can be studied in seven different stages. Stages of evolution of market are self-sufficient stage, exchange oriented stage, production oriented stage, sales oriented stage, marketing oriented stage, consumers oriented stage and management oriented stage.
In self-sufficient stage of the evolution of market, the concept of marketing was totally absent because each family was self-sufficient. The human beings were nothing more than hunting and gathering foods. They had neither to sell nor to buy any goods. They consumed what they produced. People started to produce more than what they need with the growing of population. The surplus goods were exchanged in term of goods needed to those who had surplus and ready to exchange in exchange oriented stage. This exchanging system is also known as barter system. In this stage, people invented the coin to avoid the problem arouse in exchanging of goods as inconvenient, tedious, time consuming and measurement problem. Production oriented stage was developed after the industrial revolution in the world. Production oriented stage helped to develop the viewpoints in producers as if the products are good and have reasonable price with wide availability, customers' will buy the goods with little marketing efforts. The primary concern under this stage was to produce more goods through the high production efficiency. Producer thought that the high production could maintain the lower production cost, as a result there was no problem of selling. They started to establish sales department to sell the products at a price determined by the producers. In sales oriented stage, they assumed that customers would normally not purchase enough unless approached through incentive sales promotion salesmanship efforts. They thought that the products were not purchased but they had to be sold with the help of incentive tools. It was clear that the main problem in the economy was not to produce the goods but to sell them. So, organization and marketers started to use aggressive promotional tools, such as advertising and salesperson to pursuade the customers about the goods. Their main purpose was to attract the customers to the products. Greater emphasis was given in increasing the sales than customers' satisfaction. It was emphasized first to determine the needs and demands of the people and to distribute the goods more effectively and to efficiently than competitors in marketing oriented stage. They decided to find out the needs of the customers and produce what customers actually needed.
Consumer oriented stage is the modern concept of marketing which was introduced after 1950 A.D. It believes the philosophy consumer and satisfaction not the product. It focuses to provide maximum satisfaction as a result people are getting the required products at their home. Home delivery services, after sales services, free camp and free installation etc are the examples of this consumers oriented stage.
Management oriented stage focuses and suggests to the management that marketing must be well planned, well organized, well staffed and well controlled. In this stage, the producers must first determine what it can sell, how much it can sell, what approaches must be used to convince the changing customers. Thus, several local, regional, national and international organizations are established to manage the marketting activities around the world. FNCCI, Nepal Chamber of Commerce, SAFTA, EU and WTO are some of the examples of the organizations. These organizations are operating different activities to manage the marketing aroung the world.Evolution of marketingtypes of market
There are different types of market. Among them major types of market can be classified on the basis of the following features:
1. Geography Basis
a. Local Market
b. Regional Market
c. National Market
d. International Market
2. Volume Basis
a. Wholesale Market
b. Retail Market
3. Delivery Basis
a. Spot Market
b. Future Market
4. Control Basis
a. Regulated Market
b. Unregulated Market
5. Nature Basis
a. Commodity Market
b. Capital Market
c. Service Market
6. Function Basis
a. General Market
b. Specialized Market
7. Time Basis
a. Very short period Market
b. Short period Market
c. Long period Market
d. Very Long period Market
8. Competition Basis
a. Perfect competition Market
b. Imperfect Market
c. Monopoly Market
1. On the basis of Geographical area:
On the basis of geographical area, market can be divided into four types as local market, regional market, national market and international market. In local market, perishable goods like fruits, vegetables, fish, meat and milk are exchanged among the local people.
The market which occupies a large area is known as regional market. This market may cover several villages and towns or even districts. People from different places visit there to exchange the goods.
If the market of goods or services been expanded nation wide, it is known as national market. Products like clothes, tea, coffee, cigarettes, drinks, cement, electrical goods as T.V., computer, refrigerator, vacuum cleaner, heater, etc. are bought and sold nationwide. This market is wider than regional market.
International market is known as world market or import- export market. If goods and services are sold and bought all over the world, it is known as international market. Some international products such as Toyota, Phillips products, Gulf Oil, Sony, Aiwa etc. are exchanged worldwide.
2. On the basis of the volume, market can be divided into two different types as wholesale market and retail market. The market, which deals a large amount of goods is known as wholesale market. This market purchases the goods from producers and sells to the retailers in wholesale amount. Generally, they do not sell the goods to ultimate consumers. The market which deals with the small quantities of product is known as retail market. This market sells the goods to thd ultimate consumers in retail price. This market keeps direct relation to the consumers.
3. On the basis of Delivery:
On this basis market can be classified as spot market and future market. This market deals on the certain period of time and for the for the long period. In this spot market, the delivery of goods and payment take immediately after the agreement between buyers and sellers. In this type of market, selling, buying and paying take place at a time.
In the future market, arrangement or contract for buying and selling is made in present but goods or services are delivered in future. Payment and physical delivery take place in the future according to the agreement between buyers and sellers.
4. On the basis of Control:
The types of market which are diveded on the basis of control are reguulated market, unregulated market. The market which is controlled by rules and regulations of government and trade association is known as regulated market. The government regulated the production, quality, features, prices and distribution. This is one of the reasonable and fair market.
5. On the basis of nature of Product/Subject:
Commodity market, capital (financial) and service market come under the basis of nature of product of market. All kinds of products are bought and sold in the commodity market. Consumers' goods and industrial goods are available in this market.
The market where financial aspects are available such as deposit of cash, provision of loans, buy and sell of shares, debenture and securities etc. is known as capital market. It further divided into money market and capital market. It also provide short as well as long term loan to the people and organizations can be provided by this market.
If the physical goods are not transferred but services are purchased and sold, then it is known as services market. Some organizations like electricity authority board, tele-communication office, water supply office etc are included in this service market.
6. On the basis of Functions:
Market can also be divided into mixed or general market and specialized market market on the basis of its functions. All varieties of products are purchased and sold in general or mixed market. This is very common and popular market.
The market where specific products are purchased and sold are known as specialized market. No variety of products is available in this market. The example of this market are vegetable market, gold ornament market, share market etc.
7. On the basis of time:
On the basis of time, market can be classified into different types or kinds. They are very short period market, short period market, long period market and very long period market. The market where goods of daily requirements are exnchanged, it is known as very short period market. Mainly perishable goods like vegetables, meat, fruits, milk etc are available in the very short period market.
Much more time is given to adjust the demand than very short period market. Demand plays vital role to determine the price of the products. Long period market provides sufficient time to adjust the demand of the customers for the products. The price is mainly determined on the basis of demand and supply.
Very long period market is a permanent types of market because goods are produced and supplied according to the changing environment. Time is sufficient to supply the goods, adopt and implement all kinds of devices for tehe production and adoption of the changing environment sufficient time is given.
8. On the basis of Competition:
On the basis of the competition of production, consumption, distribution, demand and supply of the goods and products market can be divided into three different kinds. Three different kinds of market divided on the basis of competition are perfect market, unperfect market and monopoly market.
Perfect market is on e of the impracticable market because price is not detemined on the basis of interaction of both buyers and seller, etc. In this market, buyers and sellers are fully aware about the prices of the products. All the products are homogenous in nature. Both buyers and sellers have perfect information., freedom to enter and leave the market.
But imperfect market are opposite to the perfect market. Price is not uniform and there is no free competition and buyers. If the single producer or supplier controls the market, it is known as monopoly market. In this type of market, there is no competition for the products and producers or sellers. The price is determined by the interest of suppliers.