INTRODUCTION TO BUSINESS 11

BUS 121

Faculty of management and Social Sciences

Department of Business Administration
University of Delta, Agbor, Delta state

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Learning objectives:
- Marketing functions of business
a. definition of marketing
b. 4Ps of marketing
c. Product life cycle: e- marketing
d. key marketing function

Production functions of business

a. definition of production
b. production process
c. production management

Finance and accounting function of business

a. definition of financing
b. reporting financing trend
c. debt and equity financing

Accounting function

a. define accounting
b. reporting
c. ratio analysis

Government and business

a. regulation of product safety
b. Advertising
c. industry competition
d. government role in Business

The social responsibility of business

a. define ethics
b. define business ethics
c. social responsibility to customers, employers, stakeholder, creditors, environment, community and
society
d. cost of social responsivity

International business
a. definition of international business
b. import
c. export
d. foreign direct investment
e. out sourcing
f. barriers to international trade

Problems of Nigerian Business enterprises

a. problem of big firms
b. Small and medium size enterprises
c. problems of large and SMEs in Nigeria

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Marketing Functions of a Business
What is marketing?

Marketing is the overall approach to speaking to customer about a brand ( e.g. product, service or
idea). Marketing refers to the action or activities undertaken to promote sales and purchase of a
product or service. It involves advertising, selling and selling and delivery products to
consumers. Marketing is the activity or processes for creating, communicating, delivery and
exchanging items that have value to customer, clients, partners and society

Marketing is a strategy that companies adopts to satisfy customers’ needs, increase sales,
maximize profit and get ahead of their competitors. The four Ps of marketing: product, price,
place and promotion are often referred to as the marketing mix. These marketing mix are key
elements involved in planning and marketing a product or service.

1. Product: a product could be an idea, a physical entity (goods) or a service. Creating a

marketing starts with understanding the product itself.
2. Price: is the amount that consumers are willing to pay for a product
3. Place: is where the product should be available. It refers to the place where ones
product or service is sold. Eg. catalogue, on line, mail order
4. Promotion: is the way you tell customers about the products or services and how to
sell it.

Marketing Function of Business

Marketing function is a role which helps a company to identify and source for potentially
successful products for the market place they operate on. They help to promote the product by
differentiate them from similar products. The marketing function helps to understand the
customer requirement and feedback to make sure that the right product or service offering
reaches the market under the brand name.

Marketing function differ from organizations to organizations. For the big companies, their
functions include:

- performance market research

- Making marketing plan
- product development
- market development
- market penetration
- advertising
- distribution for sale
- pricing
- after sale customer service

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 - public relation

Marketing functions of a business are:- 1. Buying 2. Selling 3. Transportation 4. Storing 5.

Standardization, Grading and Branding 6. Market Financing 7. Pricing 8. Risk Assuming 9.
Advertising. The marketing function could be grouped into three: function of exchange (buying
and selling), functions of physical treatment (transportation, storage and
standardization/grading/branding and ancillary functions (risk/insurance and advertising and sale
promotion)

Buying:
Buying is an important function in all business concerns. The main process of marketing
is buying. There are two main aspect of exchange: buying and selling. In the absence of
buying, exchange or marketing cannot take place. Without buying, selling cannot be
done. Buying and selling are two functions to be performance at the same time in the
marketing process.

Buying function does not mean only buying something. In the buying function of
marketing, ownership of goods is transferred to the buyer, for which buyer pays certain
price. Goods can be bought to either be consumed, resale or use in production. Buying is
used in broader sense to include:

- determining the necessary goods

- finding out the supply source
- selecting the quantity, quality grade and size
- deciding on the price
- deciding on discount
- delivery date
- means of transport and
- other agreement

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 - transferring ownership

There are three main modes of buying, such as:

(i) Buying by inspection,

(ii) Buying by sample or pattern, and

iii) Buying by description or brand.

In an inspection method of buying the buyer visits the seller’s premises and inspects the whole
lot of goods proposed to be bought and finally approves for effecting the buying transaction. This
method is suitable for both the buyers and sellers when they live in the same area or locality.

This method is mostly followed by the individual consumers. Industrial consumers even when
located at far-off places follow this method for special and quality products. The Central and
State Governments follow this method of buying for their requirements after observance of
certain formalities with the sellers.

‘Buying by sample or pattern’ method is very common and convenient. The buyer considers the
sample or pattern as the representative of the bulk or lot, and examines the attributes or
specifications of the sample to see its conformity with the requirements.

Selling:
Selling is a process whereby salespersons interact directly with the company’s buyers and tries to
persuade them on the benefits of buying a particular product or service. Selling is the process
whereby goods and services finally flows to the consumers who need then and the firm
performs its function of distributing its products among consumers.”

The primary objective of a business enterprise is realized through the activity of selling by way
of supplying goods and services to the consumers. “A selling function, in the present day
economy, involves three major steps as under:
i) Informing the consumers or customers about the availability of the products in the market;

(ii) Ascertaining the consumer behaviour and demand for the products and competitive position
in relation to the rivals; and

(iii) Making efforts to create demand for new products which are introduced in the market which
include consumer needs assessment, location of new consumers or users, etc.
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Transportation:
Transportation is an indiscernible function of marketing. It provides the physical means of
carrying goods and persons from one place to another. Transport imparts place utility to goods
by moving then from different centres of production to the places of consumption. There are
several means of transport which may be grouped under three heads:

(a) Land transport,

b) Water transport, and

(c) Air transport.

Storing function of marketing:

Storage is an important marketing function, which involves holding and preserving goods from
time they are produced until they are needed for consumption. By preserving the goods from the
time of production to the time of consumption, storage aids in the steady flow of goods to the
market. Further, by holding the goods in different warehouses situated at different places, it
ensures a prompt supply of goods to those market areas where they are wanted.

Standardization, Grading and Branding:

Standardization refers to the process of setting certain standards for a community on the basis of
its desired qualities. A standard is an established measure of quality which provides a model for
comparison between the products of the same kind. Standards describe the nature and
characteristics of the products with reference to shape, size, colour, performance and like
requisites.

Note that not only finished products are standardized, but also the materials, processes and
performances are standardized. Grading, branding and packaging are important aspects of
standardization.

Market Financing:
This is a market in which people trade financial securities. It is a market place where the trading
of securities takes place. Examples are stocks and bonds, raw materials, precious metals are
known as commodities in the financial market

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Pricing:
Pricing the product or service is one of the most important business decisions one makes, as it is
the governor of marketing activity as sale are determined by pricing of product, service or idea.
Pricing is the amount one pays for a good or service or an idea. It is amount for which a product,
service or idea is exchange.

The consumers can select the goods easily, compare their values and make necessary bargains.
However, to offer goods at certain fixed prices within the price line, the retailer is required to
select the product items in such a way that their prices can fit in with the pattern of price lines.

Risk Assuming:
In marketing, there are innumerable risks which are to be assumed either by the seller or by
somebody else. Goods may be destroyed by fire, shipwreck, train car motor accident, flood,
storm and a variety of other causes. They may be stolen, burgled or decayed. There are also risks
of falling prices, bad debts or changing demands.

Advertising:

Advertising is one aspect of marketing, which involves a paid form of messaging designed to
increase sales. It is a promotional activities aimed to sell a product or service to a target
audience. To introduce a new product in the market or to boost the demand the demand of a
product, service or idea, advertising is carried out.

PRODUCT LIFE CYCLE: E- MARKETING

Products, like people have life cycle. The product life cycle is the course of the life
a product. It begins when the product is in development and ends after the product
has been removed from the market. Product life cycle is the progression of a

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product through five stages: development, introduction, growth, maturity and
decline. The concept was developed by a German economist Theodore Levitt
1965. A product begins with an idea and in modern day business, when it
undergoes research and development and is found to be feasible and potentially
profitable the product is then produced, marketed and rolled out.

Product life cycle refers to the length of time a product is introduced to consumer
into the market until it is removed from the shelves. Product life cycle are used by
management and marketing professional to help determine or decide when it is
best time to increase advertising, reduce prices schedules, expansion to new
product markets, or redesigning packaging etc.

Factors that determine the life cycle of a product

a. saturation of the product in the market

b. increased competition of the product
c. decrease demand of the product
d. dropping sales of the product

Market Development Stage

This stage refers to first phase in the life cycle of a new product in the product life cycle. This is
the research phase before a product is introduced into the market. This is the stage when
companies focus on establishing themselves through activities such as market research, develop
prototype, test product effectiveness, create awareness and develop strategies on how to lunch
the product or service. Product development is important because:

- it help companies gain and retain top talents

- it improve productivity
- development help companies earn more profits

Once a product is developed, it typically goes through four stages of the product life cycle.- from
introduction – growth – maturity - through decline. The four stages in the product life cycle are:

1. Introduction
2. Growth

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 3. Maturity
4. Decline

1. Introduction stage

The introduction stage is when a product is first lunched in the marketplace. This is the first stage
in the product life cycle where a company tries to create awareness about the product, service or
idea. Sales are typically low and demand grows slowly. In this stage, company profit is small as
the product is new and untested. Competition is less and in some cases none existence at this
stage. During this stage, market and promotion are high and companies invest quite a bit of effort
and capital in promoting the product and getting it inti the hands of consumer

2. Growth stage

In this stage, marketing size and sales revenue grows exponentially. During this stage,
consumers start buying and taking the product or service. The product concept is proven
as it more becomes leading increase in demand and sales. This stage characterized by
heavy competition, increase in sale volume advertisement and promotion of the product
to beat competitors. As the market grows, the market itself expands. Products are often
tweaked during the growth stage to improve their function and features. Marketing in the
stage is aimed at increasing the product’s market share

3. Maturity Stage

When a product reaches maturity, its sales tend to slow, signaling a largely saturated market. In
this stage, price undercutting and increased promotional efforts are common as companies try to
capture customers from competitors. Due to fierce competition, weaker competitors will
eventually exit the marketplace. The strongest players in the market remain to saturate and
dominate the stable market.

The biggest challenge in the maturity stage is trying to maintain profitability and prevent sales
from declining. Retaining customer brand loyalty is key in the maturity stage. In addition, to re-
innovate itself, companies typically employ strategies such as market development, product
development, or marketing innovation to ensure that the product remains successful and stays in
the maturity stage.

4. Decline Stage

In the decline stage, sales of the product start to fall and profitability decreases. This is primarily
due to the market entry of other innovative or substitute products that satisfy customer needs
better than the current product. There are several strategies that can be employed in the decline
stage, for example:

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  Reduce marketing efforts and attempt to maximize the life of the product for as long as
possible (called milking or harvesting).
 Slowly reducing distribution channels and pulling the product from underperforming
geographic areas. Such a strategy allows the company to pull the product out and attempt
to introduce a replacement product.
 Selling the product to a niche operator or subcontractor. This allows the company to
dispose of a low-profit product while retaining loyal customers.

EXAMPLES OF PRODUCT LIFE CYCLE

Typewriters: when first introduced in the late 19th century typewriters grew I popularity as a
technology that improve the ease and efficiency of writing. However, new technologies such as
computers, laptops and smartphone replaced typewriters.

VCR (Video Cassette Recorder): many grew up watching video tapes using VCRs. With the rise
of streaming services like Netflix, VCRs have been effectively been phased out and are deep
decline.

Other examples are: charcoal irons

E- Marketing
The word e- marketing stands for electronic marketing. It refers to the marketing conducted over
the internet. Two synonyms of E-marketing are internet marketing and online marketing. E-
marketing is the process of marketing brand (product or service) using the internet through
computers and mobile devices medium. E- Marketing encompasses all business activites via the
worldwide web (WWW). The aim is to attract new business, retaining current businesses as well
as developing its brand identity.

Advantages of e-marketing

i. Reduction in marketing cost

ii. increase interactiveness
iii. Use for specific interest ( Educated persons)
iv. ability to reach customer faster and cheaper
v. It help in geo marketing
vi. quick and faster response time
vii. Easy data collection
viii. very cost effective
ix. web exposure

Disadvantage of e- marketing

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 i. not suitable for tech illiterate customers
ii. unreliability in technology( power and network)
iii. expensive to set up and maintain ( banking sectors)
iv. customer not be technologically literate
v. Not ideal for all businesses

Key Marketing Functions

The goal of marketing is to promote and sell products in a competitive

marketplace. The seven key marketing functions are:

Promotion: help to foster brand awareness while educating target audience on a

brand product. Promotion may include any of the following strategies

- email marketing
- social media advertisements
- public relations
- digital or print advertising
- content marketing
- brand partnerships
- influencer marketing
- events

Selling: This is a key marketing function that involves communicating with

potential customers in order to increase sale revenue. Effective selling techniques
can help one distinguish one product, brand or service from competitors. To
succeed in sales of products, sales person should: set goals, be persistent, be
sincere, educate customers and ask for feedback

Product management: The role of a marketer in product management is to ensure

that a finished product meets customer needs. Its roles are to examine the overall
visual of the product, its usefulness and its delivery. This is done through some
product management strategies: communicating with customers, implementing
feedbacks, conducting market research and analyzing competitors.

Pricing: Several factors most be considered before determining the price of a

product. Such factors includes: the price of your competitors, the price customers
are willing to pay, the quality and quantity of the product

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Marketing information management:

Information is key in any business transaction. It is important to collect and store

data such as customer choices and demographic characteristics. Relevant
information can gathered through various marketing tools such as: market survey,
social media engagement, market research reports

Financing:

Financing is a marketing that involves securing funding internally and externally

to create marketing campaigns. Funds must be set aside to improve previous
marketing campaigns and remain updated with future trends

Distribution:

This is the process of moving one products or services from the company to the
customer. There are several physical and digital methods of distribution. These
includes: online stores, wholesale stores, retail stores and catalogs and sales calls.
The channel of distribution is determined by the type of products, brand or target
audience

Functions of marketing

The most important aspect of any business are the customers. These functions help to
understand the customer requirement, feedback and to make sure that the right product

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or service offered reaches the market under the brand name. The functions of
marketing include:

1. Market Planning
One of the most important functions of marketing is to plan, research the market trends.
The entire planning exercise is done by the marketing department/function. Market
planning takes the entire organization's view and strategy to make sure that the right
market strategy and tactics are used for designing and developing the product/service
offering for the customers.
2. Product Design
Product life cycle design and management is an important task performed by the
marketing function. The entire PLC is management by the marketing function. Product
design includes product functionalities, customer requirements, research and
development activities. Branding is also included in this step.
3. Product development
After the product is designed, the product has to be developed as per the design. It
includes prototyping, testing, test marketing, user feedback etc.

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After the confirmation, the product is handed over to manufacturing for development.
4. Distribution
Though distribution is main responsibility of operations and logistics department, the
marketing function has a vital role to play in terms of market plan, locations, distribution
strategy in making sure that product reaches the right location
5. Financing
Marketing function also has inputs in financing. To make sure that the right audience is
able to buy and afford the product. Marketing department plays important role in pricing,
financing along with the finance department.
6. Sales Support
Once the product is ready to be shipped and made available in the market, the sales
force needs to be enabled to understand the product offerings including features,
pricing, promotions, margins etc. to make sure that sales is able to sell it effectively.
7. Packaging and Labelling
Marketing function has the responsibility of planning the artwork and labelling as per the
protocols and branding. The packaging and labelling has to be in sync with the
production schedule.
8. Customer Service and Support
Aftermarket support is very much an important aspect of marketing function. The
customer may have queries or require support for the product usage or repair.
The marketing function needs to enable the support and technical staff to answer the
customer queries.
9. Market Research and Development
Market research is an ongoing task of the marketing department. Marketing function
needs to understand the market and target audience well to make sure that the right
product features are designed and developed.

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