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17-6 Principles of Marketing [CH 17

assembles it for your consumption. Place utility is achieved as all of the elements to
the sandwich are transported in a usable form for the store to easily assemble your
order. Ownership utility is recognized when you exchange your cash for the finished
product that you, their customer, receive as the ultimate consumer. In this exchange

process of created utilities, you take final ownership for consumption.

Eight Functions of Marketing
Marketing adds to the want-satisfying power of goods and services by performing

eight basic functions. Marketing entails a lot more than just advertising and selling. It
is the whole spectrum of business from conception to consumption. The neophyte
thinks of marketing as beginning with the product they want to produce and sell.
However, thinking from that locus of thought generally leads to failure, for marketing

actually needs to begin with the consumer and becomes a complex activity that
reaches into many aspects of an organization. Marketing actually involves eight
functions: buying, selling, transporting, storing, standardization and grading,
financing, risk taking, and market information. These eight marketing functions add

to the utility created by marketing with some performed by manufacturers, some by
wholesalers, and others by retailers. These functions are grouped as exchange
functions, physical distribution functions, and facilitating functions.
Exchange functions of marketing is buying and selling. Buying is important as

marketers study purchasing habits of consumers for goods and services. Knowing
consumer purchasing behavior is critical to a firm’s success because the firm is then
able to best decide how to meet the needs of their customers. Retail outlets will buy
for the fall season in March and the Christmas season in July. This amount of lead

time requires that they have an understanding of their buyers to make their own
purchase decisions. The Industrial market purchases replacement machinery, raw
materials and equipment upgrades to complete production deadlines and meet their
customer’s needs. Obviously, to succeed, these firms must sell their goods and

services to someone. Their selling is accomplished through their promotional strategy
which can include advertising, public promotions, sales representatives to the client
are the standard sales methods.
Physical distribution functions include transportation and storing. Physically

moving the product from source to outlet is transportation. This can occur at all levels
of productivity, from primary producer (farmer) to secondary producer (food
processor — Green Giant canary); from secondary producer to tertiary producer
(retail outlet — Piggly Wiggly grocery store). In industrial production the retailer

cannot store all of the production, so warehousing of goods is required until the retail
consumer/ultimate consumer will purchase and take delivery. Storing is accomplished
at all three levels of productivity.
Facilitating functions is a term that is used to describe those acts that facilitate

the market place. Facilitating functions include financing, risk taking, securing
market information, standardization and grading. These functions assist the market

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