- Written by Kannan
1) Marketing generates revenue to firms:
Profit is the core on which the whole super structure of business is built. Marketing alone generates revenue (or) income to an enterprise. Functions of marketing development and widen the markets. When markets are widened sales increases and thus profit to the firm increases.
2) Marketing as a basis for making decisions:
The problems of the entrepreneur are what, how, when, how much and for whom to produce. In the past, the producer was in direct contact with consumers. Hence the problems were tackled very easily. However, to-day the producer does not have any direct contact with the consumers. Therefore, the problems of the producer become very acute and complicated.
Now a days, these problems are solved by the marketing departments. The marketing department collects all information regarding what, how, when, how much and for whom to produce and these informations are passed on to the top management. The top management uses all these informations for decision making.
3) Marketing helps the top management to manage innovation and changes:
Marketing and innovation are the two basic functions of any business. We are living in a dynamic world. There is nothing permanent except change. Change is the essence of life and change means progress. To-day the minds of the consumers are not firm. But fluctuating (or) changing very often. The behaviour and demand of consumers keep on changing. Hence, in order to run a business successfully a business man should adapt himself to the changing preferences, changing styles, changing fashions etc, and innovate new customers, new product, new markets, new methods and procedures. Marketing helps to adopt change and innovate. Retailers communicate to the wholesalers about consumers demand. Wholesalers, in turn, communicate to manufacturers about market demand. Market research also acts as a source of marketing information on consumer behaviour and market trends. Salesmen of a market oriented concern are its ears and eyes for information feedback.
Marketing, in sum, tries to find out the right type of production that the firm should manufacture, the right place where it is to be made available for use; and the right price at which it is to be made available, and the right channel, though which it is to be brought to the notice of the consumers.
Marketing is, thus, the father of innovation and product development, prompter of entrepreneurial talent, developer of economy, stimulator of consumption and higher standard of living and guardian of price system.
If the functions of marketing are not performed properly the economic system may get out of balance resulting in piling of goods with retailers, wholesalers and manufacturers, closure of factories and retrenchment of workers. Marketing secures a closer balance between output and consumption. In this age of mass production, modern marketing has enabled a smooth system of mass distribution. Hence, marketing plays an important role in the economic stability of a country.