The functional classification of marketing

The functional classification, which has been the most widely used in recent years, looks at marketing from the point of view of the functions performed in the course of moving the goods from the manufacturer's assembly line to the consumers hands.
These functions are not mutually exclusive. For example, the manufacturer of men's shoes, whose assembly line turns out, let us say, 10,000 pairs of shoes in one day, is also engaged in packaging shoes, one pair to the box. At this point, they are handled, perhaps packed six packages to a case, placed on a conveyor to the shipping room. There they are handled again as they are lifted off the conveyor and stored or placed in waiting trucks or railway cars.
After shipment is made, they are handled again at the receiving end, where again they may be stored or shipped out immediately to a retail store. The goods are handled once again when they are sold to the ultimate consumer who either carries them home or has them sent. The shoes may be handled by as many as nine hands for each pair before they arrive at the home of the ultimate consumer.
Storing is also a function which is not exclusive. The manufacturer may store the finished shoes overnight, or he may warehouse them for days, weeks or months. The distributor, if he enters the picture, will do likewise. The retailer, if he buys in large quantities, may store them until he transfers the packages to the retail outlet and thence to the consumer. Even the consumer may bring the pair of shoes home and put them away until he is ready to use them.
Similarly, there is shipping between manufacturer and his own branch, or manufacturer to distributor, or distributor to retailer, or retailer to multiple consumers.
Involved in all these functions is the matter of financing and risk-taking. There is risk-taking at every transaction where title passes, and in many where title does not pass. There is risk in selling operations, in advertising and promotion. There is even risk on the part of the consumer in buying.
The financing of risks is often overlooked by the casual student of marketing, but obviously it assumes an important part of the total marketing process. Putting up the necessary money to carry on trade and commerce is an important function in distribution, often involving outsiders such as banks, lending institutions, and even the federal and state governments which participate in the extension and regulation of consumer credit.
The functional approach to the study of marketing has been the most useful and the most widely used. It is, in fact, the foundation of modern marketing study. Certain phases of this functional approach will be studied in greater detail in subsequent chapters, such as wholesaling, retailing, marketing research and transportation.