4 Selling versus Marketing

Kulbhushan Chandel

    1. Learning Outcome

After completing this module, the students will be able to:

  • Describe the concept of selling.
  • Explain various types of selling.
  • Understand marketing and various marketing activities.
  • Explain the difference between selling and marketing.

    2. Introduction

 

Production has no meaning unless it reaches to the persons who want them. People have wants and needs. These wants and needs are fulfilled through the process of production and exchange of goods and services. But goods and services do not move automatically. There is a mechanism to facilitate the process of exchange. This mechanism is a set of activities and is termed as marketing. Thus, marketing encompasses all tasks and activities of exchange conducted by manufacturers and intermediaries with an aim of satisfying demand of consumers. Marketing includes selling. However, the term selling and marketing are used interchangeably. There is a need to understand the concept of selling and marketing and the difference between the two.

 

3. Selling

 

Selling implies the process of transfer of title to goods or services in exchange of money. It is through selling that goods or services reach to ultimate consumer. Selling is considered as the vital function of marketing. In fact, all marketing activities are directed towards effective selling. A firm can earn profit only through successfully selling its goods i.e. disposing of goods at reasonable prices. Selling consists of personal and non-personal activities aimed at creating, maintaining and even developing demand for products or services.

 

The selling process includes following steps:

  •  Establishing contact with the buyer
  • Creating demand
  • Negotiating terms and conditions of exchange
  • Completing all formalities
  • Entering into contract of sale i.e. legally transferring ownership of goods from seller to buyer.

    Selling is a creative and difficult art. A seller should have zeal, imagination and presence of mind. Best selling practices will ensure repeated or more sales.

 

3.1 Types of selling

Selling can be classified on the basis of channels used for distribution of goods. It can be:

(i) Direct selling (ii) Wholesaling (iii) Retailing (iv) Franchising

 

3.1.1. Direct selling (Channelless Retailing )

Direct selling means transferring the title to goods and their possession directly to the buyer. It aims at serving the customers without engaging any middleman. Under direct selling, various means of promotion are used to induce customers. Advertising is used to create awareness and interest. Personal selling is required to convince the prospect and secure sale. Sales promotion is employed for impulse buying.

 

Direct selling can be personal or impersonal. Personal selling refers to face to face interaction between buyer and seller. It usually includes sales talk, demonstrations, handling prospective buyer’s queries, negotiations and transfer of ownership in exchange of money which may be collected immediately or at some future date as happens in case of credit transactions.

 

Impersonal selling means selling the goods or services not through face to face interaction but by making use of courier or postal services. The orders are received over phone, through e-mail or by post and then goods are dispatched. Money can be collected before transferring ownership i.e. before goods are delivered or at the time of transferring ownership i.e. by V.P.P.

 

There are various means of direct selling which are summarized as follows :

(i) Mail order Sale : Mail order sale means selling by post. The seller approaches the customers through post office by using mail publicity i.e. sending catalogue, pamphlets, booklets etc. Orders are collected through the mail or over the telephone. However, orders are executed through V.P.P. Books, toys, clothes, footwear and cutlery are the common examples of goods which are sold by mail order. Follow up method is generally used in mail order by sending a series of reminding letters to persuade the prospect.

 

(ii) Door to door selling : Goods may be sold directly by door to door selling through salesmen. Initial contact can be made over phone or mailed in coupon. This is an effective method but costly. This method can be employed to create market for novel product.

 

(iii) Telephone shopping or teleshopping : Telephone shopping means making direct phone contact with the prospects and giving them details about product to convince and secure orders over phone. In teleshopping, products are demonstrated on T.V. screen and toll free numbers or contact numbers are also displayed. Orders are received on phone or through e-mail. Free home delivery is provided to a customer which is a convenient and cheaper method for shopping. In-store sale is facilitated through telemarketing. It also reduces in-home selling cost as salesperson is not required to convince the prospect.

 

(iv) Automatic vending machines : Well known brands are sold by vending machines. Cold drinks, Coffee or Shakes are some products which are suitable to be sold by vending machines.

 

(v) Manufacturer’s showrooms : In this method of direct selling, sales are undertaken through manufacturer’s outlets or exclusive showrooms. In India, textile industry is making extensive use of showrooms. These showrooms also act as promotion tool. For instance, one can find a large number of Vimal, Raymond showrooms in most of the urban areas across the country.

 

(vi) Factory Outlets : These outlets are owned and used by manufacturers to sell surplus goods. Goods are generally sold at less price which may be as much as fifty percent below the retail price.

 

3.1.2 Wholesaling

It means selling the product through wholesaler. Wholesaler as merchant middleman buys goods from manufacturers in bulk quantity and sells them to retailers or buyers in relatively small lots. However, wholesaler as agent middleman does not take title to goods. He only facilitates the exchange process and charges commission for his services. He is an important link in distribution chain and performs various functions.

 

3.1.3 Retailing

It refers to selling goods through retailers who buy goods from wholesaler in small quantity and sell them to customers in much smaller lots. Big retailers buy directly from manufacturers. Retailer is also an important link in distribution chain. He deals directly with consumers and collects information about their needs which is helpful to producers.

 

3.1.4 Franchising

Franchising is a system of selling under which an exclusive right is granted by the manufacturer to certain dealers to sell his product in specified areas. The franchiser (manufacturer) provides equipment and also managerial services to franchisee (dealer). The franchiser retains control over the style or technique by which products are sold.

 

3.2 Methods of selling

There exists various methods of selling which are explained as follows :

    (i) Sale by Description : In this method, goods are sold by description given by the buyer regarding shape, brand, design, content and such other features. There is no inspection of goods before purchase. In such transactions, there is an implied condition that goods will be in conformity to the description otherwise the buyer is entitled to cancel the agreement.

 

(ii) Sale by Inspection : This method refers to inspection of goods by the buyer before making actual purchase. The goods are sold only after buyer is satisfied about product in all respects.

 

(iii) Sale by Sample : It refers to selling goods by showing only sample i.e. small portion which is expected to represent the whole lot of actual goods. There is implied condition that lot of goods supplied by the seller shall correspond to the sample shown.

 

(iv) Sale on Approval or Return Basis: In this method, goods are sent to prospective buyer (i.e. who may become actual buyer in future). If he is satisfied with goods, he sends an intimation of approval to the seller. However, the buyer will have to return the goods within the specified period if he does not like them. He cannot keep goods for long if no intimation of approval or disapproval is given.

 

(v) Hire Purchase Selling : This is a system of selling under which an agreement is entered into between seller and buyer that buyer will take possession of goods and will make payment in instalments at a fixed interval. The ownership of goods will be transferred to buyer after the payment of last instalment.

 

4. Marketing

 

Marketing is a network of activities essential to transfer goods and services in exchange of money or money’s worth for the mutual benefit of consumers and manufacturers. Marketing focuses on consumer satisfaction. Marketing plans, policies, strategies and programmes are formulated to effectively serve the customer demand. Marketing research is conducted to get adequate and latest information regarding target markets and current consumer wants. Marketing aims at creating form, place, time, possession and awareness utilities.

 

Marketing as per, Philip Kotler, ‘is a customer oriented approach backed by integrated marketing aimed at generating customer satisfaction as the key to satisfying organisational goals.’ Marketing starts and ends with customers. Marketing information and planning, integrated marketing activities and feedback and control are the foundations of marketing. These have been discussed in detail as follows:

 

(I) Marketing information and planning

 

Marketing can be effective only when it has sound information system and planning. For this marketing analysis is necessary. There is also a need to develop strategy and marketing programme.

  • Analyzing marketing environment : Marketing starts with collecting information to develop a data base for effective decision making. Therefore, marketing environment is analysed. As the goods produced are to be offered to the consumers or buyers, the study of their preferences, tastes, buying motives, willingness to buy, paying capacity and desire for credit helps in assessing their needs, desires and developing product accordingly to ensure maximum consumer satisfaction. The intensity of competition which may emerge from existing firms, new entrants and firms dealing in substitute products is assessed. Competitors’ marketing strategies and policies are studied. It provides direction for effective marketing decisions regarding product, price, distribution and promotion. Apart from this, political, economic, social, cultural, technological, legal, political, demographic and ecological factors are analysed. This analysis reveals opportunities or threats for the firm. It also gives clue about potential demand. On the basis of this analysis, the firm prepares itself with effective marketing plans and programmes to act as early beginners for availing opportunities or protect from threats emerging from the environment. The firm carries out marketing research and prepares the customers’ profile, suppliers’ profile, industry profile, market profile and competitor profile for better assessment of environment, market segmentation and selection of target market.
  • Assessing the internal environment : The firm assesses the internal environment to determine its own strengths and weaknesses. It may be its production capacity, product, manpower, technology, financial resources or marketing capabilities. Assessment of internal environment is essential so as to develop the marketing mix with limited resources in a way that it will suit the marketing needs in a best possible manner.
  • Developing marketing strategy : Marketing strategy is a comprehensive and integrated plan of action designed to achieve marketing objectives. For formulating marketing strategy, a firm first decides target market by analyzing the market and selecting some segments as it thinks appropriate i.e. market segmentation is done and target market is selected. The customers’ profile, characteristics, buying behaviour or motives in target market is studied which will help in finalizing marketing mix. Further product positioning and product differentiation is decided. After this, an appropriate marketing mix is developed. The relative weightage of each component i.e. product, price, promotion and distribution in total marketing programme is decided and the impact of uncontrollable factors on this marketing mix is determined. Various product, price, distribution and promotion strategies are decided for the target market. Different strategies are co-ordinated for developing overall marketing strategy.
  • Formulating functional plans and programmes : For the success of marketing strategy, detailed functional plans are prepared such as sales-force plan, pricing plan, sales and profit plan, product mix plan, distribution channels plan, sales promotion plan, cash flow plan and advertising plan. The functional plans are activity related plans. These plans or sub programmes are consolidated into marketing programme. This comprehensive marketing programme becomes the marketing plan.

    (II) Integrated marketing activities

For serving the customers in a better way, various activities are performed in a co-ordinated manner. These activities are essential and if performed in an organised way, these provide synergic effect. Various activities which are performed for smooth flow of goods and services are as under:

  • Product designing : The execution of marketing plan starts with designing and developing the product as per requirement of target market. Design is the major selling feature of all products. Good design provides attractiveness, safety, utility, ease of operation and advertising feature.
  • Product line simplification: It means eliminating from product line those products which provide no incentive to the firm to continue their production. A firm goes for simplification in case of decreasing marketing share, increasing promotional budgets, decreasing sales volume as a percentage of firms’ total sales or increasing variable costs as compared to revenue.
  • Diversification: Diversification means increasing the number of products in product portfolio of the organisation. A company opts for diversification for corporate survival, stability or growth purpose.
  • Branding: Branding means giving name or symbol to a product so as to enable consumer to distinguish it from other similar products. Branding helps in popularizing the products.
  • Packaging: Package means specially designed wrapper, container or case which is used for packing goods. It gives identity to the product. Packaging refers to putting goods in convenient sized lots like bottles, jars, cans, bags etc. Packaging facilitates branding and advertising of goods.
  • Product labelling: Labels are fixed to products to describe their quantity, quality, ingredients, and other features. Labelling is compulsory by the manufacturers in case of drug, cosmetics and food items. They are required to give their name, date and place of manufacture, expiry date and batch number.
  • After-sale services: Manufacturers or dealers of machines, instruments, equipments, gadgets etc. provide after sales services.
  • Standardisation and Grading : Standardisation refers to the process of setting up standards so as to ensure that goods are produced as per those standards. Grading means dividing the products into different classes as per their size, quality and other features.
  • Product Pricing : Product pricing is vital function of marketing and involves the determination of adequate price which can achieve pricing objectives. Prices are fixed in such a manner that on one hand, customer’s preference for product is created and on the other hand, genuine profits are earned.
  • Buying: Buying is an important function of marketing. Manufacturers have to purchase raw materials and other things. Trading houses buy goods for the purpose of selling them to others. Good buying ensures acquiring of such goods which can be profitably sold to customers.
  • Inventory Management : Inventory management is important function of marketing. It aims at reconciliation of two conflicting goals of management i.e. (i) to offer better customer service by strictly dispatching orders as per scheduled delivery dates and (ii) to minimize capital investment and cost of handling inventory.
  • Warehousing: Warehousing means storing the goods from the time of their production till they are demanded and it involves certain other functions like sorting, packing in convenient lots, risk- taking etc.
  • Transportation : Consumers are usually scattered geographically. They are made available goods and services at their places through various means of transport like airways, waterways, roadways and railways. Goods are also made available to wholesalers and retailers through various means of transport for resale.
  • Advertising and Sales Promotion : These activities are necessary to create, maintain and develop demand for the product. Even best products may fail to attract customer due to lack of proper advertising and sales promotion.
  • Selling : Selling implies the process of transfer of title to goods or services in exchange of money. The buyer gets the ownership of goods but may or may not hold their possession immediately. Selling is considered as the vital function of marketing.

    (III) Feedback and control

 

The marketing activities aim at securing maximum customer satisfaction and increasing profitability. Therefore, post sale research is conducted. The customer satisfaction level is assessed through surveys. Their opinions and problems are noted. If required, necessary modifications are made to provide better product in future. Changes may also be initiated in pricing, distribution and promotion policies as per the information collected through customers, distributors, wholesalers and retailers. Thus, feedback helps in improving marketing effectiveness, profitability and customer satisfaction.

 

5. Selling Versus Marketing

Selling and marketing are not same. These can be distinguished as follows:

 

6. Summary

 

Marketing encompasses all tasks and activities of exchange conducted by manufacturers and intermediaries with an aim of satisfying demand of consumers. Marketing includes selling. However, the term selling and marketing are used interchangeably. There is a need to understand the concept of selling and marketing and the difference between the two. Selling implies the process of transfer of title to goods or services in exchange of money. Selling consists of personal and non-personal activities aimed at creating, maintaining and even developing demand for products or services. The selling process includes certain steps such as (i) Establishing contact with the buyer (ii) Creating demand (iii) Negotiating terms and conditions of exchange (iv)Completing all formalities (v) Entering into contract of sale. Selling can be classified as (i) direct selling (ii) wholesaling (iii) retailing and (iv) franchising. Marketing focuses on consumer satisfaction. Marketing information, planning, integrated marketing activities and feedback are the foundations of marketing. Marketing information is collected by analysing marketing environment and assessing the internal environment. Then, marketing strategy is developed and functional plans and programmes are formulated. For serving the customers in a better way, various activities are performed in a co-ordinated manner. These activities include product designing, branding, packaging, product labelling, after-sale services, standardisation, product pricing, inventory management, warehousing, transportation, advertising, sales promotion and selling. The marketing activities aim at securing maximum customer satisfaction and increasing profitability. Therefore, post sale research is conducted. The customer satisfaction level is assessed through surveys. This feedback helps in improving marketing effectiveness, profitability and customer satisfaction.

 

The discussion points out that selling and marketing are different. Selling starts after production whereas marketing starts before production. In selling, emphasis is on maximising sales but in marketing, emphasis is on customer satisfaction. Personal selling has great importance in selling whereas in marketing, personal selling, advertising, product designing, packaging, product pricing and product distribution are equally important. Thus, marketing is a wider term and selling is one of the important marketing functions.

Items
Learn more
Few important sources to learn more about selling and marketing :
  1. Bose,S. Biplab (2010) Marketing Management, Himalaya Publishing House, Mumbai.
  2. Davar S. Rustom, Davar R.Sohrab, Davar R.Nusli (2000). Salesmanship and Publicity, Vikas Publishing House Pvt. Ltd., New Delhi.
  3. Havaldar and Cavale (2011). Sales and Distribution Management: Text and Cases, 2nd Edition, Tata McGraw Hill Education Private Limited, New Delhi.
  4. Johnson, Kurtz and Scheuing. Sales Management: Concepts, Practices and Cases, 2nd Edition, McGraw-Hill Inc.
  5. Kotler, Philip; Keller, Kevin; Koshey, Abraham; and Jha Mithileshwar, (2009). Marketing Management: South Asian Perspective. 13th Edition. Pearson Education, New Delhi.
  6. Sherlekar,A.S.(1996). Marketing Management, Himalaya Publishing House, Mumbai
  7. Still, Cundiff and Govoni. Sales Management: Decisions, Strategies and Cases, 5th Edition, Prentice Hall of India Private Limited, New Delhi.
  • http://www.marketing91.com/selling-and-marketing/
  • https://www.fimm.com.my/pdf/seminar%20slides/FIMM-Diffrence%20S&M.pdf
  • http://www.djconnell.ca/articles/Selling_vs_Marketing.PDF
Points to Ponder
  1. Marketing is a wider term and includes selling.
  2. Personal selling has great importance in selling whereas in marketing, personal selling, advertising, product designing, packaging, product pricing and product distribution are equally important.
  3. Selling starts after production whereas marketing starts before production.
  4. In selling, emphasis is on maximising sales but in marketing, emphasis is on customer satisfaction.