106 MARKETING — Departmental stores provide special] Such facilities are not prov facilites to the customers, Delivery | the customers in a supermarket, parking, sports, entertainment, communication, lavatory, and other facilities. Variety of goods. | All Kinds of goats are sold in|Only pure, fresh and standard departmental store, So it is said, -] products such as food, groceries] ‘from needle to aircraft is found in a] and daity necessities are sold in g departmental store.” supermarket, Price Different services are provided in| No service is provided to te departmental stores Prices of goods|customers in a supermarket are high in departmental stores. | Profit margin is low. Prices are Jow in supermarkets (Capital More capital needed fo establish al Supermarket can be established departmental store than to estatlish| and operated investing less a supermarket. capital than departmental store, ‘Mostly rich and lady customers go] Mostly householders — got to departmental store. supermarket to buy household vided 1] Departmental store is decorated, | But no salesmanship is needed in advertised so, sellers nced| supermarket, as it is self salesmanship. servicing market. ‘More expense is needed to| Operation of supermarkel advertise, decorate, and providing |becomes cheap compared different facilities to the customers| departmental store. in departmental store. Wide selection facility ts provided | Comparatively — less selection in departmental store. [facility is available in supermarket, Mall is popularly known as shopping mall. It is a large modern retail complex containing a variety of stores. For example, Kathmandu Mall, CTC Mall, etc. It is being popular in Kathmandu Valley. The history of shopping mall is not very long. ‘The first shopping mall was the Country Club Plaza founded in 1922. Today there are several megt shopping malls in front of our eyes, Shopping malls are housed in a series of connected of adjacent buildings or in a single large wel) designed building, Shopping malls have great impact in our economic and social life They are not only places to shop; they also have become places fot having fun and spending time. Shopping malls provide differet tppraved by CDC, Sanothimi BhaktapurCHAPTER +3: Marketing Functions 107 kinds of facilities such as food court, sports, multiplex (a cinema that houses several different screening rooms under a single roof), ATM, fresh room, kids club, lockers, changing room, parking, disabled toilets, public phone, customer services desk, photo me, swimming pool, and so on. Thus, customers spend a considerable time in shopping malls. Shopping malls are becoming our part of daily urban life. They are not only marketplace for us; they are also a time spending place, meeting place, and connecting place. People like to spend their leisure time at shopping malls, According to one research, aesthetics, entertainment, product variety advantages, socialization, and convenience are the primary attractions of shopping mall to the customers. The same research also revealed even, when tourists come from out-of-town or from another country, they mostly visit popular shopping malls. Eventually, a shopping mall is a moder shopping center. It has one well designed mega building or one or more buildings. It is shopping destination and recreational place to modern customers. The success of mall depends on its architectural design of building, facilities, and central location. City Center, CTC Mall, K L Tower, Civil Mall, Peoples Plaza, Sherpa Mall, Labim Mall, United World Trade’Center, Rising Mall, Times Square Mall, Kathmandu Mall, ByePlex Mall, etc. are popular shopping malls of Kathmandu Valley. Multiple Shops A multiple shop (also called chain store) is large sized retail business establishment. Many shops are operated in certain place, or region, or country, or different places of the globe to sell same types of goods in multiple shops system. They are operated under the ownership, management, and control of single business firm. All shops maintain uniformity in product, price, decoration, advertising, sales process, and so on, However, the prices of products may be different being based on the country due to local taxes. It eliminates middlemen from the distribution channel. Approved by CDC, Sanothimi BhaktapurMARKETING A multiple shop operates on cash and carry principle. It does not allow credit facility to its customers. It provides products at reasonable price to the customers. They maintain direct relation to customers. Multiple shops deal in only limited products. Mostly, multiple shops sell branded, packaged, standardized, and graded products. Central ownership and control, uniformity, cash and carry principle, direct relation with customers, centralized purchase and decentralized sales, geographical dispersion of shops, and dealing in limited products are distinct features of multiple shops or chain stores. Different authors and scholars have defined multiple shops differently. Some of the popular definitions are given below that will help us to understand the meaning of multiple shops. A multiple shop is a network of a number of branches situated in different localities in the city or in different parts of the country. All the branches are under central ownership and control. - S. A, Sherlekar ‘A multiple shop consists of a number of similar shops owned by a single business firm. ~ James Stephenson A multiple shop is a system under which there are large numbers of retail shops owned by the same proprietor, which are scattered over the various places of a particular city or a country and are engaged in the same line of activity. ~S. E, Thomas A chain store system is a group of retail stores of essentially the same type. Centrally owned and with some degree of centralized control of operation. —E. W. Condiff & R. R. Still A chain store system consists of a number of retail stores, which sell similar products, are centrally owned, and are operated under one management, - Tousley, Clark, & Clark Wal-Mart, Marks & Spencer, McDonald's, Bata Shoe Company, Shajha Bhandar, etc. are some examples of multiple shops or chain stores. In conclusion, a multiple shop is a large sized retail establishment. It consists of a number of retail stores, which sell similar products, are centrally owned, and are operated under one management. Moreover, a multiple shop maintains uniformity in decoration and operation. It sells its products on the basis of cash and carry principle. It establishes direct long-term relationships with valued customers. DC, Sanothimi Bhaktapura ne ee Features ‘The features of multiple shops are as follows: Central ownership and control: Multiple shops are operated in different parts of a city, different regions of the country, and in different countries of the world, However, they are operated under single ownership and control of a business firm, All multiple shops follow the policy and direction of the central management. Uniformity: Entire shops of different places maintain uniformity in product, price, decoration, advertising, sales process, and so on in multiple shops, However, the prices of products may be different being based on the country due to local taxes. Cash sales: Multiple shops apply the cash and carry principle, It does not provide credit facilities to its customers. Thus, there is no possibility of bad debt in multiple shops, Direct relation with customers: Multiple shops keep direct relation with customers through different shops and they identify needs and wants of customers through market research, Centralized purchase and decentralized sales: Centralized purchase and decentralized sales policy is adopted in multiple shops. Purchase department purchases products and sends to all shops for resell purpose, Scattered shops act as sales agents. They do not purchase products. So, multiple shops are operated with centralized purchase and decentralized sale policy. Geographical dispersion of shops: Multiple shops are located in different parts of cites, different regions of the country, and different countries of the world, So, multiple shops are not limited to any one place. They have vast geographical dispersion. Limited products: Multiple shops deal in only limited products. Mostly, multiple shops deal with branded, packaged, standardized, and graded products. Advantages The advantages of multiple shops are as follows: Economy: Large quantities of products are purchased to send to all the shops operating under single management. Purchase department purchases huge quantity at a time. It gets heavy discount in bulky buying. As specialists are involved in production or purchase, which brings economy in multiple shops. Approved by CDC, Sanothimi Bhaktapur12) MARKETING Price of products Risks (Operating expenses Tit the center of city. Departmental stores provide special facilities to the customers, 50 price of products become! higher. Departmental — store provides different facilities such as home| delivery, communication, parking, transport, sports, entertainment, rest house ete, to customers, Departmental store is risky, ‘Operation cost of departmental store is high because it decorates shop, advertises, provides services to customers etc. due to which operation cost of departmental store becomes high. Multiple shops do not provide such] different parts of city, region, country or foreign countries Price in multiple shops becomes comparatively low. facilities. [Multiple shops are comparatively tess risky. Operation cost of multiple shops ts low, they do not spend much on decoration, advertisement ete. so operation expense is low in multiple shops. Decoration Departmental store ts attractively decorated, but all departments are’ decorated differently, according to the nature of goods. Multiple shops are decorated To attract customers but all in the same] ony. (Credit facility Departmental store may provide credit facility to its customers. Multiple shops do not provide credit facility, goods are sold on the cash ‘and carry basis. Departmental division Departmental stores are divided into different departments, Multiple shops are not divided into different departments but divided| into different shops. Usefulness 6. Departmental stores are useful for Multiple shops are useful for alll rich and lady customers. Consumers' Cooperatives A consumer cooperat their economic interests. ved by CDC, Sanothimi Bhaktapur types of customers. ‘A consumer cooperative is a business organization which is owned and managed by its members to fulfill their needs and aspirations. Aim of cooperative is to fulfill the needs and aspirations of their members. Itis service oriented rather than profits. ive operates in the competitive environment or open market. It is collectively established by economically weak persons to be free from economic exploitation of organizations in a capitalist economy and promoting large _ businessCHAPTER +S: Marketing Functions 113 A consumer cooperative is operated on the basis of mutual understanding, cooperation, and mutual trust. Robert Owen of England was the father of cooperative society. He had first established cooperative organization in 1844 A, D. - Rochadale Society of Equitable Poiner. After this, several cooperative organizations were established in different countries like Italy, Germany, France, etc. Popularity of cooperative society later spread to different countries of the world. After the Cooperative Credit Society Act was enacted in India in 1904 A. D., many cooperative societies came to exist in India. In Nepal cooperative societies began to be established only after the Cooperative Society Act was introduced in 2016 B.S. Basically, a consumer cooperative is a business institution collectively operated by economically weak persons and common interest. Any person can voluntarily enter in such organization and quit its membership. Nobody can force against one’s own will. As it is established and operated by the persons of the same interests, the same economic status, and for the same objectives, all the members can behave equally and have equal rights. Discrimination against race, caste, religion, gender, etc. is not allowed in a consumers' cooperative. Democratically elected management committee conducts it very effectively. All the members get equal voting rights. Fundamentally, a consumer cooperative gives priority to sell products to its members at lower price, only then to the general public. However, it is a business organization; its main objective is to serve its members and ensure welfare of the whole society. If any profit has been earned, it deposits 25 per cent in its reserve fund, allocates some percent for social welfare activities, and distributes the rest amount to its employees and shareholders as bonus and dividend respectively. Cooperative Act of Nepal has restricted to distribute more than 15 per cent bonus to the members of a consumer cooperative. A consumer cooperative is operated with the objective of each for all and all for each principle. Thus, mutual cooperation, friendships, and unity are the fundamentals of a consumer cooperative. It provides products at lower price to its members than by other business institutions but it does not sell on credit even to its members. Different authors and scholars have defined consumers’ cooperative differently. Some of the popular definitions are given below that will help us to understand the meaning of consumers’ cooperative. A cooperative is a form of organization where in persons voluntarily associate together as human beings on the basis of equity for promotion of economic interest of themselves. - Henri Calvert Approved by CDC, Sanothimi Bhaktapur‘ 1 MARKETING A cooperative is self-help as well as mutual help. It is a joint enterprise of those who are not financially strong and cannot stand on their own legs and therefore, come together not with a view to getting profit but to overcome disability arising out of the want of ‘adequate financial resources, = H, N. Kunz A cooperative is only one aspect of a vast movement which promotes voluntary association of individuals having common needs that combine towards the achievement of common economic end. = V. L. Mehta A. cooperative organization is a voluntary association with unrestricted membership and collectively owned funds, organized on democratic principle of equity by persons of moderate means of incomes who join together to supply their needs and wants through ‘mutual action, in which the motive of production and distribution is service rather than profits, - M.C. Shukla In conclusion, a consumer cooperative is a business organization which is owned and managed by its members to fulfill their needs and aspirations. It is a form of autonomous organization that is oriented towards service rather than profits. Moreover, it is voluntary organization which has open membership. Each for all and all for each principle is the soul of consumers’ cooperative. Features The features of a consumer cooperative are as follows: * Voluntary organization: A consumer cooperative is a business organization voluntarily established by low income persons. Any person having cooperative feeling and no personal interest can be a member of consumer cooperative. No coercion is given to be a member of consumer cooperative. Anybody can be a member or quit it voluntarily. «Open membership: There is open membership in a consumer coperative, Those having good thoughts without personal interest can join it. Discrimination against race, caste, religion, gender, etc. is not allowed in consumer cooperative. In Nepal, at least 25 founder members are required to establish cooperative according to the ‘Cooperative Act. . Service motive: A consumer cooperative is established with service motive rather than profits motive. It provides quality products at lower price. It does not limit its services to only its members even it provides services to the whole society, and invests excess amount in the welfare of general public. ' by CDC, Sanothimi Bhaktapurpoe CHAPTER 15 eting Funeti Voting right: A consumer cooperative is based on the democratic principle, All the members of the cooperative have equal voting right ‘One man one vote is the voting principle in a consumer cooperative. Democratic management: A consumer cooperative runs democratically. There cannot be found dominance or imposition of any person or group. A management committee is elected by its members to run cooperative. The management committee works for the interest of all the members of the cooperative as well as general public. Legal existence: A consumer cooperative is established under an Act. In Nepal it is established under Cooperative Act 2049. It works in its name. It uses its own seal on its documents. A consumer cooperative remains as separate legal entity from its members. Distribution of profits: A consumer cooperative does not work for profits but it may earn profits. If any profit has been earned, it deposits 25 per cent in its reserve fund, allocates some percent for social welfare activities, and distributes the rest amount to its employees and shareholders as bonus and dividend respectively. Cooperative Act, 2049 of Nepal has restricted to distribute more than 15 per cent bonus to the members of a consumer cooperative, Cash transaction: A consumer cooperative runs on cash and carry principle. No credit facility is provided. So, there is no chance of bad debts. Credit is not given even to its members. Mutual cooperation: A consumer cooperative organization comes into existence from mutual cooperation. Personal interest and bad conduct cannot took place in cooperative. So, a consumer cooperative operates with the principle of each for all and all for each. Government control: A consumer cooperative works remaining under government rules and regulations: Otherwise, it should bear legal consequences. In Nepal, cooperative organizations are established, operated, and winding-up tinder the Cooperative Act 2049. Concerned authority monitors the activities of a consumer cooperative. Advantages “4 ‘The advantages of a consumer cooperative are as follows: Easy formation: Formation of a consumer cooperative is easy. Whenever a joint application is filed in the office of concerned Department by minimum number of members as prescribed by the Approved by CDC, Sanothimi BhaktapurMARKETING Cooperative Act, it gets registered. As par value of share is low in a cooperative, a number of members like to join coopera ve. * Elimination of middlemen: The main objectives of a consumer cooperative are to eliminate middlemen from distribution channel, to eliminate commission of middlemen, and to provide quality products to its members at a cheaper rate. It purchases large quantity of products directly from producers. So, middlemen such as agents and Wholesalers have no role in a consumer cooperative. © Democratic management: A management committee of cooperative is democratically elected by its members on the basis of one man one vote, Those who get majority votes become members of management committee. A consumer cooperative conducts all its functions in democratic manner. No monopoly or dominance of any person or group prevails over it. . Cash transaction: A cooperative conducts its all transactions only in cash. No credit facility is given even to its members. So, there is no chance of bad debts. * Low price: A consumer cooperative buys large quantity of products directly from producers in heavy discount. It eliminates middlemen and their commission and profits. Thus, it can provide quality products at low price to its members. * Minimum operation expenses: Consumer cooperative runs by its members. It does not require high promotional expenses. Thus, it can operate at minimum expense. * Incentive to work: Experienced, skilled, and intelligent members of management committee lead consumer cooperative towards its success. Better performance gives better results, It gives the incentive to work for the development and expansion of the cooperation. * Cooperative attitude: A consumer cooperative is operated in mutual trust. Progress of the cooperative is the progress of its members. Each member knows about how to cooperate to others and how to get cooperation from others. So, cooperative attitude develops in all members of a consumer cooperative. Disadvantages The disadvantages of a consumer cooperative are as follows: + Lack of financial resources: Economically weak consumers are the members or investors of a consumer cooperative. Thus, it lacks d by CDC, Sanothimi BhaktapurCHAPTER -5; Marketing Functions HT financial resources. Consequently, it is difficult to operate in a large scale and to appoint experienced and skilled employees, Ineffective mismanagement: Management of a cooperative is run by its members. They may not have administrative know how, They can be unsuccessful in planning, organizing, leading, and controlling. Cooperative cannot appoint experienced and skilled employees due to lack of financial resources. So, management of cooperative organization cannot be effective. Selfish elements: A consumer cooperative is a voluntary business organization operated by persons having the same objectives. Its membership remains open for all. Sometimes, selfish persons may enter into a consumer cooperative. They may harm the cooperative. Limited scope: The scope of a consumer cooperative is limited. It deals in only groceries and household products. It cannot deal in all kinds of products and also cannot operate in many places. Generally, the customers of cooperative are its members. Limited customers: Generally, customers of consumer cooperative are its members. It gives first priority to its members. Thus, general public do not show interest in a consumer cooperative. Danger of conflicts: A consumer cooperative can survive, develop, and expand only with mutual cooperation and unity of its members. But there remains possibility of groupism and conflict among, its members at the time of election of its management committee. Besides this, selfish members may also enter, which creates disputes among, members in the cooperative. No provision of credit: A consumer cooperative is operated with the principle of cash and carry. No credit facility is given to customers or . This may abolish faith of its members towards the cooperative. Voluntary organization Open membership © Lack of financial Service motive resources Voting rights © Mismanagement Democratic management «Selfish elements Legal existence «Limited scope Distribution of profits «Limited customers Cash transaction © Danger of conflict ‘Mutual cooperation No provision of credit Government controt Approved by CDC, Sanothimi Bhaktapur } }LARKETING Office and Store of Mail Order Mail Order Business A mail order business is a business where orders for products are placed over the phone, through a catalog, or online. This type of business usually does not have any physical locations, According to business dictionary, a mail order business is a method of selling in which buyers and sellers donot make face-to face contact, It requires effective advertisement to inform and attract customers. Except industrial equipment and too bulky goods, almost everything is sold through mail order, generally at lower than retail store prices. A mail order business is a non-store or direct retailing system. It is selling or shopping through post or websites. It is also known as arm chair selling or shopping. Buyers send order for products and sellers deliver through mail in mail order business. Buyers should make advance payment through the post. This system of business largely depends on advertising. Demand is created by advertising through newspapers, or catalogues, booklets, or radio, or television, or websites, or combine of few or all. All kinds of products cannot be dealt through mail. Standardized, graded, branded, and well packaged products are suitable for mail order business, Different authors and scholars have defined mail order business differently, Some of the popular definitions are given below that will help us to understand the meaning of mail order business. A mail-order business is retail trading houses which receive order ‘from the public through post and deliver the articles by post. ~ Y. K. Bhushan A mail order business may be briefly described from buyer's point of view as shopping by post. - $. E. Thomas A mail order business or house is a retail establishment which has as its primary method of operation the receipt of orders through the mail and the delivery of merchandise by means of parcel post. ~ Tousley, Clark, & Clark In conclusion, mail order business is a direct retailing business. It is shopping or selling by post or websites. Middlemen have no role it this business. A retailing store is not necessary to locate in the centetCHAPTER «8. Marketing Tunetions 19 of city. It can be operated at any place where communication and es are available n fact transporta Features The distinct features of mail order business are as follows: © Contacts Mail order business lacks direct contact between seller and buyer. It is buying and selling by post. £ order and delivery are done through post, o, placement of © Capital: Mail order business involves moderate amount of capital for its start, It does not require huge investment, * Location: Mail order business can be started at any place and there is no need of prime lo communication facilities are ess ion, But transportation and ntial, . Advertising: Mail order business is based on advertising, Demand is created by advertising through newspapers, logues, booklets, radio, television, and websites, © Catalogue: Mail order business is based on catalogue. It sends attractive catalogue to the potential customers. For this purpose, mail order business creates data base of customers. * Products: All kinds of products are not traded by mail order business. Only graded, standardized, branded, and well packaged products are suitable for mail order business. Advantages ‘The advantages of mail order business are as follows: . Low start-up costs: The mail order business is relatively less expensive to start. It does not require ultra modern business office and well designed and huge building. . Work from home: Work from home facility is another advantage of a mail order business. You can use a spare room, or basement, or kitchen table to assemble your mailings or ship your products. ¢ Wider market: Mail order business can reach national or international level. Advertising, post office, and websites help to expand your market. Mail order firm can get international customers by listing website in search engines such as google.com. e Income: There is good income potential in mail order business. Due to economical, no need of middlemen, no need of expensive showroom, and no need of employees. (Bieeaientieeiens. Approved by CDC, Sanothimi BhaktapurTARKETING . hic i 8. Disadvantages The disadvantages of mail order business are as follows: * Lack of personal contact; Seller and customers cannot haye direct personal contact with each other in mail order business Customers cannot get as much satisfaction as desired from the products, As a result, they may be attracted towards othe, retailing institutions. © Unnecessary delays: Mail order business suffers from unnecessary delays in receiving orders and delivering products, . Lack of selection of goods: Mail order business deals with only limited products. ‘They are delivered by post, Thus, customers do not have selection facility in mail order business, * Possibility of fraud: Customers may be cheated by the dishonest sellers in mail order business. There may be cheating in quality, quantity, and price of products. Hence, it is risky business for customers, * Lack of services: Customers cannot get any services and personal counseling from sellers in mail order business. . Credit facility: Customers could not get credit facility in mail order business. They have to pay advance at the time of order. «Limited products: Only durable, branded, standardized, graded, non-explosive, and lightweight products are dealt in mail order business, Online Shopping Online shopping is another type of retailing. It is an act of buying products or services over the Internet. In online shopping buyers need to go online, search website of supplier, select something, and pay for the same as prescribed payment mode in the Internet. Customers buy from digital platforms in online shopping. Online retailers provide different types of products to its customers. Online shopping is also known as e-shop, ot web-shop, or virtual shop. It is a form of commerce or i- marketing which allows customers to directly buy products from a seller over the Internet: Customers use online to shop products whenever they want. limi BhaktapurCHAPTER <5: Markerng sctions (2 In online shopping, buyers commonly use credit card to make payments, however some systems enable users to create accounts and pay by alternative means, such as Debit card, PayPal, Wire Transfer, Postal Money Order, ete. Time saving, transportation expenses saving, flexible buying, cheaper product than store shopping, need not wait on queues, avoid crowd, and easy to search what we want to shop are the reasons of online shopping. Online shopping has grown in popularity over the years. Today, most retail stores have a website for customers to buy from online such as Best Buy.com, WalMart.com, Sears.com, Bhatbhatenionline.com, KTM Plaza, etc. Some companies only sell their products over Internet, they do not have a retail stores such as Amazon.com, Ebay.com, Alibaba.com, Target.com, Flipkart.com, Groupon.com, Ikea.com, etc. Daraz, SastoDeal, Nepbay, Socheko, Hamrobazaar, Gajabko, Smart Doko, Logix Digital System, etc. are top online shopping sites in Nepal unctions of Retailer ng: selling; warehousing; risk bearing; credit facility; grading, standardizing, branding, and packaging; advertising and sales promotion; and act as last middleman are major functions of retailer. 1 3. Buying Retailers buy product from wholesaler (or sometime from producer) for the purpose of reselling. It is an important function of retailers Buying consists of determining needs, selecting appropriate supplier, and negotiating on terms and conditions of purchase. There is a saying - goods well bought are half sold. Thus, retailers should have buying skills to buy in a rational way. Product should buy after considering its quality, quantity, market demand, and so on. Rational buying ascertains success of retailers. Selling Selling is another side of retailers’ job. They sell products to ultimate consumers or business users in small quantities. Retailers should have salesmanship for effective selling. There is a saying- those who have an art in dealing can sell everything easily. Effective personal selling is essential to be a good retailer. Warehousing Warehouse keeps products safe until they are sold. It creates time utility of the products. Additionally, it also reduces scarcity of products by keeping balance in demand and supply. Retailers should keep consumer products in optimal quantity. Both over and under Approved by CDC, Sanothimi BhaktapurCHAPTER <3: Marketing Functions 123 wholesalers, or agents, or producers. In their absence, the whole business gets paralyzed. Differences between Wholesaler and Retailer Riese Wholesalers Retailers Purchase and | Wholesalers purchase goods from | Retailers purchase goods from sales producers and sell to retailers. wholesalers (sometimes from producers) and sell to ultimate consumers. Scope ‘Scope of wholesaler is wide, Some — | Retailer's scope is limited. wholesalers’ functional scope Generally, retailers’ scope is limited becomes national or even to-a local place. international. Salesmanship js not needed for ‘Salesmanship is necessary for retailers. Profit margin | Wholesalers sell goods taking litle | Retailers sell goods taking more profit margin. profit margit Location Location for wholesalers is not Location is important for retailers i mily transport and | The place where people gather and is communication facility is needed. | crowded, or walk through is suitable for retailers. Specialization | Wholesalers deal in certain types of | Retailers deal in many kinds of goods, So they acquire goods. They cannot acquire specialization in dealing in certain | specialization in any goods. ds, | Voliime of 1 ities purchase large Retailers purchase small quantity of |_purchas quantity of goods. goods. Trade Wholesalers are the first Retailers are the last middlemen in channel middlemen in the distribution the distribution channel, They work channel. They work as a bridge to | as a bridge ta link consumers and link producers and retailers. wholesalers. Display and | Wholesalers need not display nor | Retailers need to decorate and decoration | decorate any goods to show display goods to show consumers. consumers. Volume of | Wholesalers need huge capital. Retailers can conduct retailing capital business with small investment or capital. Standardization, grading, financing, risk bearing, market information, and salesmanship are major facilitating or auxiliary functions of marketing. Standardization The standard serves as a basis of comparison. It is a measure that is generally accepted as having fixed value. A standard should be universally acceptable. Thus, it should be done with the assent of Government Body, Approved by CDC, Sanothimi BhaktapurIM MARKETING Chamber of Commerce, Trade Association, and Consumers’ Association The standards ensure consistent quality of the product. Standardization is the process of creating standard product. It is done on the basis of quality, quantity, color, size, style, design, and other features. For examples, garments are standardized in size, color, quality, and design. Iron is standardized in ductility and gauze, Liquid materials such as water, oil, fuel, etc. are standardized in milliliters and liters. Groceries and fruits are standardized in grams and kilograms. Similarly, shoes are standardized in number, bulb is standardized in Watt, and so on. Standardization helps in ensuring the safety, interactivity, and compatibility of products. It facilitates buying and selling of product effectively and efficiently. Likewise, it ensures consistent quality stability in quality and price, demand creation, risk reduction, market expansion, competitive advantages, and effective communications. Thus, a company should produce standard products after carrying out market research. Different authors and scholars have defined standardization differently. Some of the popular definitions are given below that will help us to understand the meaning of standardization. Standardization is a measure that is generally accepted as having affixed value, ~ Duddy & Revzan Standardization is the general term which includes establishment of standards for products, inspection of products in order to determine the standards to which they conform, and where necessary the lotting of products into lots conforming to established standards, - Touslay, Clark & Clark The determination of basic limits or grades in the form of specification to which manufactured goods must conform and a class into which the product of agriculture and the extra active industries may be sorted is known as standardization.-National Commission on Agriculture Standardization In conclusion, standardization is the process of creating standard product. It is done on the basis of quality, quantity, color, size, style, design, and other features, It brings convenience in buying and selling the products. Grading Grading is the process of sorting individual units of a product into defined grades of similar features, size, color, quality, and quantity. Products having similar attributes are put on one group in grading. It is an auxiliary function of marketing. Grading is done with the help of standardization. Generally grading is done in agriculture products such as raw materials, mineral, fruits, vegetable, rice wheat, etc, which are not produced according to predetermined ie CDC, Sanothimi BhaktapurCHAPTUR +S) Marketing Punctions 125 specifications. Easy to identify without physical verification, facility for the consumers, assured quality, better price for the seller, little possibility of fraud, and less adulteration are the benefits of grading. Grading protects consumers from unfair trade practices by traders or farmers. Different authors and scholars have defined grading differently. Some of the popular definitions are given below that will help us to understand the meaning of grading, Grading is the act of separating or inspecting the goods according to the established specifications. ~ Condiff, Still, & Govoni Grading means the division of products into classes made up of units processing similar characteristics of size and quality. ~ Clark & Clark Grading is the use of standard for sorting ungraded products into lots that are similar in variety, size, quantity etc. - Daddy & Revz In conclusion, grading is the process of sorting individual units of a product into defined grades of similar features, size, color, quality, and quantity. It simplifies buying and selling functions of marketing. Standardization Vs Grading ‘The differences between standardization and grading are as follows: * Standardization is permanent but grading is temporary. © Once standardization has been made, it does not change but grading changes. © The process of determining standard of a product is standardization whereas the process of sorting products on the basis of the standardization is grading, * Standardization provides basis for grading but grading does not provide basis for standardization. Bases of Standardizing and Grading Bases for both standardization and grading are as follows: * Quantity: Quantity is the main basis for standardization and grading of product. For example, units, kilograms, liters, meters, etc. Generally, groceries, vegetables, liquid materials, fruits, etc. are standardized and graded on the basis of quantity. © Quality: Products have different features and quality. For example, best quality, medium quality, and lower quality. Groceries, furniture, cotton, medicines, clothes, etc. are standardized and graded on the basis of quality. + Size: Products can be standardized and graded on the basis of their sizes. Shirts, pants, shoes, nails, etc. are standardized and graded on the basis of size. For example, Small size, 32 inches waist pants, 6 number shoes, 2 inches nails, and so on. Approved by CDC, Sanothimi Bhaktapurbh MARKETING * Color: Products can be standardized and graded on the basis of color too, Generally, yam, fruits, etc. are standardized and graded on the basis of color. Financing Financing is the act of obtaining money. It is science of managing money in an enterprise. It is essential to conduct marketing activities. Finance is considered as life blood in marketing, There should be optimal level of finance in a company. It is necessary for manufacturing, selling, and distributing functions. A good financial manager can manage optimal finance efficiently. Banks and finance companies help to fulfill financial requirements of producers and channel members. Finance is essential at every activity of marketing. Producers, wholesalers, and retailers cannot perform their functions efficiently and effectively without adequate finance. According to American marketing Association, marketing finance includes the provision and management of funds needed to finance carrying of stocks and granting of mercantile and retail credit including installment credit. Commercial banks, credit union, finance companies, etc. provide financial support or loan to marketers to conduct their marketing activities. Risk Bearing Risk refers to the possibility or chance of meeting danger, or suffering loss, or exposure to danger, or peril, It is combination of hazards measured by probability. There are several kinds of risks in marketing such as (i) physical damage or loss, (ii) decline in price, and (iii) bad debts. No entrepreneurial effort is possible without the elements of risk, Marketers should manage business risk properly. Physical risks are related to accidents, electricity, radiation, pressure, noise, etc. They badly impact in the smooth running business. It interrupts in the growth and development of business. Similarly, change in technology and fashion may be the cause of price decline. Likewise, extending too much and unworthy credit increases risks of bad debt. There are other types of risks too, such as pure risk, speculative risk, fundamental risk, particular risk, and so on. These risks cannot be totally assumed. Some can be transferred to insurance company, some can be minimized, and others are unavoidable. Therefore, efficient management of risk is the major concern of marketers. Asa marketer you have to bear risk because it can be calculated, you'll nevet know until you try, no risk no innovation, risk is chance to learn new things. and no risk no profits. Insurance company can cover risk of fire, theft, goods in transit, employee fraud, and life insurance for partners in a partnership peoepeeC NC, Sanothimi BhaktapurCHAPTER «5 Marketing Funetions 127 Entrepreneurs take only calculated and moderate risks but they do not take blind risk like gamblers. Market Information Market information systems (also known as market intelligence stems), used in gathering, analyzing, and disseminating information about market. It is designed to support rational marketing de pre sion making, In the words it is a system in which marketing data is formally gathered, stored, analyzed, and distributed to managers in accordance with their informational needs on a regular basis. Similarly, in the words of Professor Dr. Philip Kotler, father of modern — marketing, —_ marketing, decision makers require to gather, sort, analyze, evaluate, and distribute accurate information Information is vital resource in marketing management. It has to be collected, processed, and interpreted. Information should be complete, reliable, and up-to-date. All marketing decisions are taken after analyzing market information, There are various sources of market information Internal record, bulletin published by Chamber of Commerce, description published by Central Bank, business journal, market research, newspapers, channel members, Trade Association, Consumers’ Association, Government Report, and so on are the main sources of market information. Marketing decisions can be taken on the basis of market information. Computer based information system provides more facility to marketers. It offers several advantages such as timely information, complete information, reliable information, more up-to-date information, consideration of alternatives, and so on. Needless to say, marketing research system and intelligence system should be strong for effective market information. Salesmanship Salesmanship is the skill of persuading people to buy things. It is one of the skills used in personal selling by salesperson. It is face to face and direct persuasion to customers to take rational buying decisions. In the words of Donald Hammond (2009), salesmanship is the art of influencing or persuading people to do what sales representative wants them to do, For example, teachers, authors, politicians, engineers, ete., practice the art of influencing others to do what they want them to do. Approved by CDC, Sanothimi Bhaktapur128 MARKETING Salesmanship is an art of guiding customers to buy what they need. In other words, it is an art of selling goods or services efficiently. It is that skill which: converts human needs into wants. Salesperson having good salesmanship can give a solution to the customer's problems. He or she maintains good relationship with customers, works hard to achieve marketing goals, and to provide long-term service to customers. Different authors and scholars have defined salesmanship differently. Some of the popular definitions are given below that will help us to understand the meaning of salesmanship. Salesmanship is Salesmanship is the ability to persuade people to buy goods or services at a profit to the seller and benefit to the buyer. - National Association of Marketing Teachers of America Salesmanship is an ability to remove ignorance, doubt, suspicion, and emotional objection concerning the usefulness of a product. - J. C. Jagasia Salesmanship refers to conscious efforts on the part of the seller to induce a prospective buyer to purchase something that he had not really decided to buy, even if he had thought of it favorably. It consists of persuading people to buy what you have for sale in making them want it, in helping to make up their minds, ~ Stephenson in attempt to induce people to buy goods. - W.G Carter Salesmanship is the power to persuade plenty of people to pleasurably and permanently purchase your product at a profit. - Holtzclaw Salesmanship is the art of increasing satisfaction by persuading those people who should do so to buy specific goods or service. - Sefred Gross Salesmanship is the process whereby the seller ascertains and activates the needs or wants of the buyer and satisfies these needs or wants to the mutual continuous advantage of both the buyer and the seller. = Peterson & Wright In conclusion, salesmanship is an art of guiding customers to buy what they need. It converts human needs into wants. It is all about selling products by persuasive manner. The salesperson having good relationship maintained with customers, works hard to achieve marketing goals, and to provide long-term service to customers. 5.4 Field Visit and Class Presentation ——— The students of Grade XI should carry out field work report after field visit and they have to present field work report prepared by them in the class. Thus, the students must have the knowledge of field visit, field work, and field work report. Field visit is also known as field trip. Students visit to an area outside of the normal classroom where they can learn new things, have different experiences, and learn valuable life lessons. For example, students can visit countless locations for field cr CDC. Sanothimi BhaktapurI oe RR See CUNRT ERTS Marke MtaRrabEtTOuN A visit such as Chitlang, Farping, Chandragiri, Nagarkot, Dhulikhel, Kakani, Kulekhani, Lakuri Bhanjyang, Heritage Places, Chagunarayan, Industrial Estates, Shopping Malls, and other nearby places. Field work is a descriptive term for the collection of raw data. The term ‘field work’ is mainly used in the natural and social science studies such as in anthropology, biology, geography, ecology, sociology, etc. However, it is used in other subjects like marketing, human resources management, and so on, Field work is an investigation carried out in the field rather than a laboratory. It gives the students an opportunity to apply course to work in practical situation. They can face real life situation, After finishing field work students need to prepare field work report in a specific format. Then, they must prepare power point slides to present their own works in the class room in front of his or her friends and tT teachers. It is a real life challenge —_——a to the students. However, it is a golden opportunity to know the society, to gather information, to give it a specific shape, and present it in a systematic manner. Students will learn how to praise others and how to Whats a case? praise themselves. In this chapter the students can carry out field visit to understand the merchandizing and facilitating functions of marketing, distribution system, and marketing intermediaries - retailers, wholesalers, and agents. Field visit, field - work, and class presentation are essential. Buying Buying is the procurement of goods or services from suitable source of supply for different purposes such as to consume, to resell, or to business use. It includes the functions such as need recognition, identification of proper source of supply, quality, price, and negotiation for terms and condition of trade, price, discount, mode of transport and delivery of goods. Approved by CDC, Sanothimi BhaktapurETING Large sales: Multiple shops remain scattered in different place: » buy at any place where they . Customers believe that quality. products can be purchased at comparatively low prices in multiple shops. They love to buy in multiple shops. Thus, large sales volume can be possible in multiple shops regions, and countries, Customers ¢ feel conveniens Standard quality: Multiple shops are operated in different places to sell limited types of products. The products sold out by all these shops are same in brand, quality, shape, and size, Multiple shops do not deal in non branded and low quality products. No bad debts: Multiple shops are operated under cash and carry principle, Or, products are sold only in cash in multiple shops, No there is no chance of bad debts. allowed at all. Hene cred Elimination of middlemen: No middlen shops, Purchase department purchases required products directly from producers, Firm maintains direct relation with customers, Similarly, customers can buy products at reasonable price in their comfortable place. Multiple shops do not take the help of middlemen like a Collection of products: Generally shops collect required products from headquarter but it is not necessary to collect product from headquarter for every time, If products are finished in one shop or store; it can promptly take from nearby shops and sells to customers. n have role in multiple yent or wholesaler. Low operating expenses: Multiple shops are managed and controlled by single management, Advertising and sales promotion activities are done by the central management, Employees or salespersons are also managed by the central office, So, it does not require high operating expenses. Competitive and uniformity in prices: Price of products remains competitive and similar or uniform in all shops oF stores; but prices may be different in the shops located outside countries due to local taxes, which is common in business. Disadvantages The disadvantages of multiple shops are as follows: Huge capital: A number of shops are operated under multiple shops system. They are operated under the management and control of single business firm. Huge capital is needed to establish and operate such shops. Only large business houses can establish and run multiple shops. © Sanothimi Bhaktapureels CHAPTER -S + Marketing Functions 1M ~ * Limited products: Multiple shops deal in only limited products. Generally multiple shops deal branded, packaged, standardized, and graded products. + Lack of credit facility: Multiple shops are operated under cash and carry principle. Customers cannot purchase products on credit. Therefore, multiple shops are not useful for those customers who want credit facility. « Lack of interest and initiation: Since the regional managers, department chiefs, and other employees are appointed on salary basis, they need to implement central policy and obey direction. They are also interfered in their performance. If any problem arises, they need to ask the central management for solution. Thus, they do not take initiative nor are interested in their duty. * Defect of monopoly: Multiple shops are run under the ownership, management, and control of a firm. They are managed and controlled. by central management, So, monopoly of a firm prevails over pricing. Thus, there are defects of monopoly in multiple shops. + Ineffective control: Shops remain far from central office, It becomes difficult for the central management to keep multiple shops under effective control and supervision. So, the control of central office over the scattered shops becomes ineffective. isadvantages of MultipleShops © Large sales © Limited products © Standard quality «Lack of credit facility + No chance of bad debts |» Lack of interest and * Direct relation with © Elimination of middlemen | initiation customers © No necessity of collection of * Defect of monopoly «Centralized purchase and | goods ‘Ineffective control decentralized sales. |» Lowoperating expenses + Geographical dispersion of } ¢ Low and uniformity in shops « Limited products Difference between Departmental Store and Multiple hops ae as follows Al the warieties of products are| Limited ns ‘are available in dealt in departmental store | multiple shops. everything is available in it, Departmental store is established | Multiple shops are established _in Approved by CDC, Sanothimi Bhaktapur