Small Business Marketing:
How To Use The Eight Basic
Marketing Functions


by Tom Egelhoff

People are always amazed when I tell them that their new business will require them to spend 80% of their time marketing the business. The reason is that marketing encompasses many different parts of your business.

Most people think marketing falls in with advertising. All advertising is a form of marketing but all marketing is much more than just advertising. That's why we need to cover the eight basic marketing functions so you can see why you'll spent 80% of your time marketing your business.



The Marketing Manager...YOU!

In most small town businesses, you wear many hats. You are the marketing manager, sales manager, production manager, personnel manager, accountant, dispatcher and you probably sweep out the place at night. Whether you want to believe it or not, all of the above functions fall under the marketing umbrella.

Before I cover the eight basic marketing functions, I need to add some duties that most people don't think fall under the marketing umbrella. Here are some of the above and how marketing relates to each.

Sales Manager - Marketing determines who the target market is and how to reach them in order for a sale to be made.

Production Manager - The result of the marketing strategy determines how much demand there will be for a product and how much to produce.

Personnel Manger - Anyone who meets the public is a marketing weapon. The sales people identify prospects as either qualified or non-qualified customers. And use the advertising message from the marketing plan to make the sale.

Accountant - The entire marketing strategy must operate within a budget. From uniform shirts or name tags to the design and layout of the business all are determined by the marketing plan section of the overall business plan.

As you can see, you are already performing a number of these tasks but it never occurred to you, as you were doing them, that you were performing marketing functions.

That's the problem! The whole reason for marketing is to bring people to your business and exchange a product or service for more than the cost to you.

Many businesses that don't understand the basic functions of marketing, stop doing it once the ads are placed in the local media. Advertising is merely the first step in the marketing process.

The real marketing starts when the customer shows up. Does customer referral, customer service, repeat business and customer satisfaction ring a bell? All are marketing functions.



The New Marketing Manager...YOU!!
(Using the Eight Basic Marketing Functions)


A marketing manager's chief responsibility is to identify the target market for products and services. To create an advertising or promotional strategy to appeal to the target market. And, last but not least, select the proper media to expose the message to the customer that will hopefully result in a sale and profit to the company.

In addition to the above, the marketing manager has eight other functions that must be addressed and cannot be eliminated for a business to become successful.



Exchange Functions - Buying and Selling

(Functions 1 and 2 of Eight)
These two functions go hand in hand. First, it takes more than just a good product to be successful. I'm sure the last company to make buggy whips probably made the best darn buggy whip you ever saw. The product was superior. The product was also obsolete. You must have a product that fills a present and (very important) future need.

You must buy the best raw materials available at the best possible pricing to produce your product. (Pricing to be covered later). If you don't produce a product then you need to select products that will fill your target market's needs that your sales staff (probably you) can sell at a profit.



Distribution - Transportation and Storage

(Functions 3 and 4 of eight)
If you purchase products for sale or resale, they must be moved to you or to customers by some means. In the case of inventory storage, the seller may inventory the product for you or you may be required to take delivery and incur inventory costs yourself.

Each of these two functions will have an effect on your marketing and advertising message. If the product is inventoried somewhere else shipping time may be a factor. If you inventory the products yourself delivery will be faster.



Facilitating

(Functions 5,6,7 and 8 of eight)
There are four other areas for consideration that complete the basic marketing functions.

Quality and Quantity - You may carry quantities of products with a varying degree of quality. Your marketing will help determine how much of each will be kept on hand and in what amounts.
Financial - Your financing arrangements with suppliers will affect marketing by increasing or decreasing your pricing. Volume discounts or extended terms that affect pricing will, in turn, effect your advertising and marketing budget.

Risk - You assume three risks concerning the products or services you provide. One, customers won't want your product or service, two, they may want it but won't pay the price you are asking, or three, new products or services make yours obsolete.

Marketing information - In this fast moving world of the Internet, faxes, new technology and company mergers, it is more important than ever for the marketing manager to keep abreast of new advances and changes in the market place. You must be prepared to change your message as news or changes in market information become available. If your products or services are the "buggy whips" of the 90's, your company could be in trouble. Don't let lack of information stop your company in its tracks.

Which of the eight are the most important to your business? Each can have a positive or negative effect on various parts of your business. Each will effect different businesses in different ways.

The point is to be aware of each of them, how each affects your specific business and include them in your marketing decisions.



The Last Word On Marketing Functions

So we now have eight more ways that marketing becomes more complicated then we originally thought. Eight additional things to consider each day during the decision making process.

The most important thing to keep in mind is...perhaps your competition is still ignoring these functions.


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