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As we have discussed, an exchange may take place between two people, but three people are required to create a market. There are always many potential buyers and many potential sellers and the set of these potential buyers and sellers is market. A market essentially needs competition (except in absolute monopoly). A market may be a physical market with few shops to a large complexes and shopping malls. A market also may be virtual and today virtual markets are no inferior to the physical markets, thanks to greater access to information technology.

Note: Market is not necessarily a geographical area.  Groups of buyer s and sellers can be located wide apart from each other. With the advanced and developed communication and transport facilities, the buyers and sellers can easily contact each other even if they are physically at long distances.


A market may comprise:

  • One Seller and many Buyers
  • Many sellers and One Buyer
  • Many sellers and Many Buyers
  • Few sellers and Many Buyers
  • Many Sellers and Few Buyers

Types of Markets



Type of Market


(a) Local market;  (b)  Regional market;  (c)  national market;  (d)  World/  global area marker


(a) Cotton/vegetable/tea market; (b) share market; (c) bullion market; (d) capital market; (e) real estate market

Nature of transaction

(a) Cash/spot market; (b) futures market

Volume of transaction

(a) Retail market; (b) Wholesale market


Definition of Marketing

Marketing has been defined in several ways: like

  • Meeting needs profitably
  • The process of determining consumer demand for a product or service, motivating its sale and distributing it into ultimate consumption at a profit.
  • Creation and maintenance of mutually satisfying exchange relationships etc.

From several definitions given world-wide it can be interpreted that

  • Focus of marketing is on consumer.
  • A human need is a state of  deprivation  of  some  basic  satisfaction,  which  results  in  desire  for specific  satisfiers  of  these  needs,  namely  wants.  Wants for specific products backed by an ability and willingness to buy them results in demand.
  • The concept has become more comprehensive-moving from assessing and fulfilling consumer demand, to identifying needs and wants and determining products and services. Indeed in the present age, marketing includes not only anticipating the consumer needs but also kindling needs and providing new products and services to fulfill them.

Functions of Marketing

The ultimate aim of marketing is exchange of goods and services from producers to consumers in a way that maximizes the satisfaction of customer’s needs. Marketing functions start from identifying the consumer needs and end with satisfying the consumer needs. The universal functions of marketing involve buying, selling, transporting, storing, standardizing and grading, financing, risk taking and securing marketing information. However, modern marketing has some other functions such as gathering the market info and analyzing that info. Market planning and strategy formation. To assist in product designing and development also comes under the marketing functions. The marketing functions have been discussed here briefly:

  1. Market Information: To identify the needs, wants and demands of the consumers and then analyzing the identified information to arrive at various decisions for the successful marketing of a firm’s products and services is one of the most important functions of marketing. The analysis involves judging the internal weaknesses and strengths of the organization as well politico-legal, social and demographic data of the target market. This information is further used in market segmentations.
  2. Market Planning: Market-planning aims at achieving a firm’s marketing objectives. These objectives may involve increasing market presence, dominate the market or increase market share. The market planning function covers aspects of production levels, promotions and other action programmes.
  3.  Exchange Functions: The buying and selling are the exchange functions of marketing. They ensure that a firm's offerings are available in sufficient quantities to meet customer demands. The exchange functions are supported by advertising, personal selling and sales promotions.
  4. Product Designing and development: The product design helps in making the product attractive to the target market. In today’s competitive market environment not only cost matters but also the product design, suitability, shape, style etc. matter a lot in taking production decisions.
  5. Physical Distribution: The physical distribution functions of marketing involve transporting and storing. The transporting function involve moving products from their points of production to locations convenient for purchasers and storing function involve the warehousing products until needed for sale.
  6. Standardization and Grading: Standardization involves producing goods at predetermined specifications. Standardization ensures that product offerings meet established quality and quantity. It helps in achieving uniformity and consistency in the output product. Grading is classification of goods in various groups based upon certain predetermined characteristics. It involves the control standards of size, weight etc. Grading helps in pricing decisions also. The higher quality goods and services attract higher prices.
  7.  Financing: The financing functions of marketing involve providing credit for channel members or consumers.
  8. Risk Taking: Risk taking is one of the important marketing functions. Risk taking in marketing refers to uncertainty about consumer purchases resulting from creation and marketing of goods and services that consumers may purchase in future.
  9. Packaging, labeling and branding: packaging involves designing package for the products, labeling means putting information required / specified on a product’s covering. Packaging and labeling serve as promotional tools now a days, Branding distinguishes the generic commodity name to a brand name. For example, Wheat Flour is a generic name of a commodity while “Pillsbury Aata” is a brand name. In service industry, also branding matters a lot.
  10. Customer Support: Customer support is a very important function of marketing. It involves pre sales counseling, after sales service, handling the customer complaints and adjustments, credit services, maintenance services, technical services and consumer information. For example, water purifier comes with an onsite service warranty of 7 years helps in marketing and is an important marketing function as well.


Scope of Marketing

The  scope  of  marketing  in  modern  days  covers,  besides  goods  and  services,  other  entities  like experiences,  events,  persons,  properties,  organizations,  information  and  ideas.  Marketing is a combination of business management and the philosophy of business.

Marketing as a Management Function

Marketing in action is marketing Management. From one perspective it  is a functional area of management and is within the firm using various developed techniques for achieving specific objectives. Its major role is to identify the current and future needs and wants of specifically defined target markets.  The organization acts upon this information to produce goods and services to satisfy customer requirements.  Marketing provides entrepreneurship by identifying opportunities in customer requirements and driving mobilization of resources to capitalize on them.  Marketing forms interface with the existing and potential customers.


Following is a brief summary of functions of Marketing from perspective of Management:

  1. Marketing Objectives: marketing management determines the marketing objectives. The marketing objectives may be short term or long term and need a clear approach. They have to be in coherence with the aims and objectives of the organization.
  2. Planning: After objectively determining the marketing Objectives, the important function of the marketing Management is to plan how to achieve those objectives. This includes sales forecast, marketing programmes formulation, marketing strategies.
  3. Organization: A plan once formulated needs implementation. Organizing functions of marketing management involves the collection and coordination of required means to implement a plan and to achieve pre determined objectives. The organization involves structure of marketing organization, duties, responsibilities and powers of various members of the marketing organization.
  4. Coordination: Coordination refers to harmonious adjustment of the activities of the marketing organization. It involves coordination among various activities such as sales forecasting, product planning, product development, transportation, warehousing etc.
  5. Direction: Direction in marketing management refers to development of new markets, leadership of employees, motivation, inspiration, guiding and supervision of the employees.
  6. Control: Control refers to the effectiveness with which a marketing plan is implemented. It involves the determination of standards, evaluation of actual performance, adoption of corrective measures,
  7. Staffing: Employment of right and able employees is very crucial to success of a market plan. The market manager coordinates with the Human Resource Manager of an organization to be able to hire the staff with desired capability.
  8. Analysis and Evaluation: The marketing management involves the analysis and evaluation of the productivity and performs mace of individual employees.


Marketing as a business philosophy

From another perspective marketing is much more than a management function.  It is a way of thinking about business and a way of working running through every aspect of the firm's business. It is a customer and profit-oriented approach permeating the entire business. It is, therefore, an attitude of mind and hence an overall business philosophy.


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