BANKING
DIPLOMA EXAMINATION
Banking
Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)
Marketing
of Financial Services-JAIBB
Introduction
to Marketing
The Scope of Marketing
In twenty first century marketing is not related with the production and
distribution of goods and services. The scope of marketing is so much expanded
that it has play vital role to improve our standard
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1. Goods :
Physical goods constitute the bulk of most country’s production and marketing
effort.
Physical goods can be food, car,
television, clothing, housing and so on. Most of the marketing activities are closely
related with goods. Without goods transportation, warehousing, grading and
standardization activities can not be performed.
2. Services :
Services play a vital role in the modern economy. As economies advance,
developed nations are give more emphasis on production of services. Services
include the work of airlines, hotels, care rental firms, barbers and
beauticians, maintenance and repair people and service of accountants, lawyers,
engineers, doctors, software programmers and management consultants. Many
market offering are consist of a mix of goods and services. Such as fast food
restaurant, where the customers are consume both good and service at a time.
Pure service would be a psychiatrist listening to a patient or legal advice of lawyer.
3. Experiences :
Marketers can create, stage and marketed experience. As for example, Walt
Disney World’s Magic Kingdom, where he create a visiting fairy kingdom, stages
pirate ship, or haunted house and marketed different experiences for the
customers. Another example, customers can gather experience by spending one
week at a baseball camp playing with some retired baseball great players.
4. Events :
Marketers can marketed events as goods and services. Marketers promote time -
base events, such as the Olympics, company anniversaries, major trade shows,
sports events. There is a whole profession of meetings planners who will work
out the details of an event and stages it to come off perfectly.
5. Persons :
Celebrity marketing has become a major business. A politician can
marketed himself through campaigning political mandate, personal image or
success. Today every major film star has an agent, a personal manager and ties
to a public relations agency. Artists, musicians, doctors, high level lawyer
and other professionals are drawing help from celebrity marketers.
6. Places :
Place marketing can be expressed in two different ways, one is places are used
or play a vital role in marketing activities. Such as historical cities,
regions or sea beach or natural beautiful areas to attract tourists. Other is
places are used like as goods. Such as real estate or apartment marketing.
7. Properties :
Properties are intangible rights of ownership of either real property or
financial property. Such as real estate, apartment and stocks, bonds etc.
Properties are bought and sold, so it requires marketing effort. Real estate
agents work for property or apartment owners or seekers to sell or buy residential
or commercial real estate or apartment. Investment companies and banks or their
agents are involved in marketing of securities to both institutional and
individual investors.
8. Organizations :
Organizations are actively works to build a strong, favorable image in the mind
of their public or customers. Universities, colleges, museums, NGOs ( non
government organization ) and clubs all lay plans to boost their public image
to compete more successfully for audiences and funds.
9. Information :
Information can be produced and marketed as a product. Universities, colleges,
schools and research organizations are collect data and facts and develop or
produce information and thereafter distributed to parents, students, manufacturing
organization and communities at a price. We buy CDs and visit the internet for
information. At present in the knowledge society production, packaging and
distribution of information is one of the major
industries.
10. Ideas :
Every market offering includes a basic idea at its core. The buyer of a
television set is really buy recreation and prestige. Products and services are
the platforms for delivering some ideas or benefits. Marketers search hard for
core need of their customers and they are trying to satisfying them. Many
organization promote ideas to create better environment in the society. As for
example, slogan of “ planted trees and save the environment
”.
Demand States and Marketing Tasks
Different type of demand are exist in the market for different type of products
and services, which are discuss below. Marketer observed the demand in the
market and take necessary action to change the nature of demand or adjust it
with the help of different type of marketing tools and techniques.
1. Negative demand :
A market is in state of negative demand if a major part of the market
(customer) dislikes the product and may even may pay a price to avoid it. Such
as vaccination, dental work, air travel etc.
The marketing task is to analyze why the market dislikes the product and
whether a marketing program consisting of product redesign, lower prices and
more positive promotion can change beliefs and attitudes.
2. No demand :
Target customers may be unaware of or not interested in the product. College
students may not be interested in foreign language course. A new service holder
may not be interest to take a life insurance policy.
The marketing task is to find ways to connect the benefits of the product with
the person’s natural needs and interests.
3. Latent demand :
Many customers may have a strong need that cannot be satisfied by any existing
product. There is a strong latent demand for harmless cigarettes and more fuel
efficient cars.
The marketing task is to measure the size of the potential market and take
necessary research program and develop products and services to satisfy the
demand if that are profitable.
4. Declining demand :
Every organization, sooner or later face declining demand for one or more of
its products. Such demand for gramophone, radio, black and white television
etc.
The marketer must analyze the cause of the decline and determine whether demand
can be restimulated by new target markets, by changing product features, by
price reduction or by more efficient and effective
communication.
5. Irregular demand :
Many organizations face demand that varies on a seasonal, daily, or even hourly
basis, causing problems of idle or overworked capacity. Such as road transport
city buses are idle during off - peak hours and insufficient during peak hours.
The marketing task is to find ways to alter the pattern of demand through
flexible pricing, promotion and other incentives.
6. Full demand :
Organizations often face full demand when they are pleased with their volume of
business.
Such as mobile phone companies faces
full demand situation in Bangladesh.
The marketing task is to maintain the current level of demand, so that they can
face the changing customer preferences and increasing competition. The
organization must maintain or improve its quality and continually measure
customer satisfaction.
7. Overfull demand :
Some organization face a full demand level that is higher then they can expect
or capable or want to handle. At present in Bangladesh L .P. gas companies
enjoying overfull demand.
The marketing task is to finding ways to reduce demand temporarily or
permanently. In this situation marketers generally take the steps to raising
price and reduce promotional activities and services.
8. Unwholesome demand :
Unwholesome demand is the demand of that products and services which are
harmful to the society. Organizations give their time, money, resource, effort
and energy to discourage the consumption of these type of products and
services. Such as unselling campaigns have been conducted against cigarettes,
alcohol, hard drugs, X - rated movies, large families etc.
The marketing task is to use negative messages and information ( harmful sides
of the products and services ) in promotional activities, increase the price
and reduce the availability of that products and
services.
Types of Markets
A market is a set of all present and potential buyers. We can classify the
market according to the nature, objectives, behaviour of the market, which are
discussed below.
1. Consumer markets :
This market is constitute by the consumer who buys goods and services for their
ultimate consumption. They do not process it to produce another goods and
services or resell it to another customer. Their buying behaviour is mostly
emotional and they are not well informed about goods and services. Producer or
marketer requires to getting a clear sense about their target customers. Most
of the product’s strength depends on developing a superior product and packaging
and backing it with continuous advertising and reliable service. Consumer
marketers decide on the features, quality level, distribution coverage and
promotional activities that will help their product or service to achieve the
best position in the market.
2. Business markets :
This market is constitute by the business men or professionals who buys goods
and services to produce another goods and services or resell it to another
customer. They are well - trained and well - informed professional buyers who
have the skill to evaluate the competitive offerings. Business buyer purchase
products to make profit. Their buying behaviour is purely rational. Business
marketers must demonstrate how their products will help business customer to
achieve their profit goals. In this market advertise has very small role, but
stronger role is played by sales force, price and company’s reputation for
reliability and quality.
3. Global markets :
Companies selling their goods and services in the global market place and face
additional decision and challenges. Marketer must be decide which countries to
enters, how to enter each country, how to adapt their product and service
features to each countries, how to price their product in different countries.
In the global market, marketer must have to take other decisions, such as how
to adapt their communication to fit the cultural practices of each country.
These decisions must be made on different legal system, different styles of
negotiation, different type of requirements for buying, owning and disposing of
property and so on.
4. Non - profit and
governmental markets :
Companies selling their goods to non - profit organizations such as churches,
Universities, Education boards, charitable organizations or government
agencies. In this market, company must be careful to set price for their goods,
because these organizations have limited purchasing power. Lower prices can be
affect the features and quality of the goods. In this market, different type of
formalities are needed to make sales.
Core Marketing Concepts
Marketing have different type of core concepts, which are helpful to understood
marketing as a modern social science. These core concepts are discussed below.
1. Target markets and
segmentation :
A marketer can not satisfy all type of customers in a market at a time. Not
everyone likes same soft drink, same dress, restaurant, automobile, movie etc.
Customer likeness or dislikes of goods and services are depends upon the age,
sex, income, culture, education, status and so on. Therefore, marketer
segmented total market according to age, income, culture, education, status of
the customers. Then firm decides which segment is more profitable and which
segment is easy to serve or to satisfy.
2. Marketers and prospects :
A marketer is
someone who seeking a response ( attention, a purchase, a vote, a donation )
from another party. Where another party is called the prospects. If two parties
are seeking to sell something to each other, then we called them both
marketers.
3. Needs , wants and demands :
The marketer must try to understand the needs, wants and demand of the target
market. Needs describe the basic human requirements. People need food, air,
water, clothing and shelter to survive. People also have some strong needs for
recreation, education, health care, justices and entertainment. A marketer can
not create needs for his market.
These needs become wants when they are directed to specific objects that might
satisfy the need. A persons needs can be food but his wants can be rice, brad
or fruits.
Demands are wants for specific products backed by ability to pay. Three factors
are important to create demand for a product. First, desire to buy a specific
product, second, ability to buy ( purchasing power ) and third, willingness to
pay. Demand can be created by the marketers.
4. Product or offering :
People satisfy their needs and wants through products. A product is any
offering that can satisfy a need or want of the customers. Product is the most
important factor in marketing for any type of manufacturing and business
organizations. Marketers chose their marketing policies and strategies on the
basis of the product nature, position and stage of product life cycle. Major
types of basic offerings of business or social organizations are goods,
services, experiences, events, persons, places, properties, organizations,
information and ideas.
5. Value and satisfaction :
The product or offering will be successful if it is able to delivers value and
satisfaction to the target buyer. The value is a ratio between what the
customer gets ( benefits ) and what they gives ( cost ). The buyer chooses
different offerings on the basis of which is perceived to deliver the most
value. The benefits include functional benefits and emotional benefits. The
costs include monetary cost, time cost, energy cost and psychic costs. The
marketer can increase the value of the customer offering in several ways. Raise
benefits, reduce costs, raise benefits and reduce costs, raise benefits by more
than the raise in costs, Lower benefits by less than the reduction in
costs.
6. Exchange and transactions :
Exchange is the core concept of marketing, involves obtaining a desired product
from someone by offering something in return. Exchange is only one of four ways
in which a person can obtain a product. The person can self - produce the product
and service, as when a person hunts, fishes, produce cloths or gathers fruits.
The person can use force to get a product, as in a holdup or burglary. The
person can beg, as happens when a homeless person asks for foods. Five
conditions are more essential to create exchange. these are.
(a) There is at least two parties.
(b) Each party has something that may be valuable to the other party.
(c) Each party is capable to communicate and delivery.
(d) Each party is free to accept it or reject the exchange offer.
(e) Each party believes that it is appropriate or desirable to deal with the
other party.
Exchange is a
process rather than an event. Two parties are engaged in exchange if they are
negotiating, trying to arrive at mutually agreeable terms.
A transaction
is a trade of values between two or more parties. A transaction involves
several dimensions, at least two things of value, conditions of agreement, a
time of agreement, and a place of agreement.
7. Relationship and networks :
Relationship marketing has the aim of building long term mutually satisfying
relations with key parties – customers, suppliers, distributors – in order to
earn and retain their long term performance and business. Marketers accomplish
this by promising and delivering high quality products and services at fair
price to the other parties over time. Relationship marketing builds strong
economic, technical and social ties among the parties. It helps to cut down
transaction costs and time.
The ultimate
outcome of relationship marketing is the building of a unique company asset
called marketing network. A marketing network consists of the company and its
supporting stakeholders, such as customers, employees, suppliers, distributors,
retailers, adverting agencies, university scientists and others with whom it
has built mutually profitable business relationships.
8. Marketing channels :
To reach a target market, the marketer uses three kinds of marketing channels.
The marketer uses communication channel to deliver and receive message from
target buyers. This includes newspapers, magazines, radio, television, mail,
telephone, billboards, posters, CDs, audiotapes and internet.
The marketer uses distribution channels to display or deliver the physical
product or services to the buyer or user. This includes warehouse,
transportation vehicles, distributors, wholesalers and retailers.
The marketer also uses selling channels to effect transactions with potential
buyers. Selling channels include not only the distributors and retailers but
also the banks and insurance companies that facilitate
transactions.
9. Supply chain :
Marketing channels connect the marketer to the target buyers, the supply chain
describe a longer channel stretching from raw materials to components to final
products that are carried to final buyers. The supply chain represents a value
delivery system. Each company captures only a certain percentage of the total
value generated by the supply chain.
10. Competition :
Competition includes all actual and potential rival offerings and substitutes
that a buyer might consider. Competition can be classify into four categories.
(a) Brand competition : A company
sees its competitors as other companies offering a similar product and services
to the same customers at similar price.
(b) Industry competition : A company
sees its competitors as all companies making the same product or class of
products.
(c) From competition : A company
sees its competitors as all companies manufacturing products that supply the
same service.
(d) Generic competition : A company
sees its competitors as all companies that compete for the same
customers.
11. Marketing environment :
The marketing environment consists of task environment and broad environment.
The task environment includes the immediate actors involved in producing,
distributing and promoting the offering. The main actors are the company,
suppliers, distributors, dealers, agents, brokers, manufacturer
representatives, marketing research agencies, advertising agencies, banks,
insurance companies, transportation and telecommunication companies and the
target consumers.
The broad environment consists of demographic environment, economic
environment, natural environment, technological environment, political
environment, legal environment, social environment and cultural environment.
These environments contain forces that can have a major impact on the actors in
the task environment.
Marketing Philosophy
Marketing management is the conscious effort to achieve desired exchange outcomes
with target market. But what philosophy should guide a company’s marketing
efforts ? What relative weights should be given to the interests of the
organization, the customers and society ? So, marketing activities should be
carried out under a well thought philosophy of efficiency, low cost and mass
distribution. There are five competing concepts under which organizations
conduct marketing activities. These are discussed
below.
1. Production concept :
The production concept is one of the oldest concept in business. The production
concept holds that consumers will prefer products that are widely available and
inexpensive. Managers of production oriented businesses concentrate on
achieving high production efficiency, low costs and mass distribution. They
assume that consumers are primarily interested in product availability and low
prices. This concept hugely used in the developing countries. It is also used
when a company wants to expand the market.
2. Product concept :
The product concept holds that consumers will favour those products that offer
the most quality, preference or innovative features. In this concept price of
the product is not an important factor. Managers in these organization focus on
making superior products and improving them over time. They assume that buyers
admire well made products and can appraise quality and preference. Company
first try to produce a better quality product with the help of their engineers
but they do not consider the needs and wants of the consumer. Here company
think that if they are able to product a better quality product then they can
sell it easily in the market.
3. Selling concept :
The selling concept holds that normally consumers are not interest to buy
enough of the company’s product, until they are forced. The company must
therefore, undertake an aggressive selling and promotional effort. This concept
assume that typically consumers are not buy much more and must be stimulated to
buy more. It is also assume that company has an efficient and effective selling
and promotional tools to stimulate more buying.
The selling concept is practiced most aggressively with unsought goods,
that buyers normally do not think to buy it. Such as insurance, encyclopedias.
These industries have preferred various sales techniques to locate prospects
and disclose the product benefits to the prospects. The selling concept is also
practiced in the non - profit organizations to collect funds and political
parties. Most firm practice the selling concept when they have over capacity.
Their aim is to sell what they make rather than what market
wants.
4. Marketing concept or
consumer oriented concept :
The marketing concept or consumer oriented concept holds that the key to
achieving its organizational goals consist of the company being more effective
than competitors in creating, delivering and communicating customer value to
its chosen target market. Marketing concept rests on four pillars. These are
discussed below.
(a) Target market : First company
segmented total market according to some effective basis. Then they choose a
target market, which market is more profitable and at the same time it is easy
to serve. Company do best when they choose their target market carefully and
prepare effective marketing programs.
(b) Customer needs : A company can
define its target market but fall to correctly understand the customers needs.
Understanding customer needs and wants is not always simple. Some customers
have needs which they are not fully conscious, or they can not articulate these
needs, or they use some words that requires some interpretations. So, it is
essential to find out the actual needs and wants of the customers.
(c) Integrated marketing : When all
the company’s departments works together to serve the customer’s interest, the
result is integrated marketing. Integrated marketing takes place on two levels.
First, the various marketing functions - sales force, advertising, customer
service, product management, marketing research - must together. Second,
marketing must be embraced by the other departments, they must also have to
think about customer.
(d) Profitability : The ultimate
purpose of the marketing concept is to help organizations to achieve their
objectives. In the case of private firms, the major objective is to earn
profit. In the case of non - profit or public organizations, it is surviving
and attracting enough funds to perform useful work.
5. Societal marketing concept
:
The societal marketing concept holds that the organization’s task is to
determine the needs, wants and interests of the target markets and deliver the
desired satisfactions more effectively and efficiently than competitors in a
way that preserves or enhances the consumer’s and the society’s well being. The
societal marketing concept calls upon marketers to build social and ethical
considerations into their marketing practices. Here company must try to make a
balance among company profit, customer want satisfaction and public interest.
At the same time company try to build up a health and wealth society so that
company can able to survive in long run.
Difference between selling concept and marketing concept
Starting
point
|
Focus
|
Means
|
Ends
|
Factory
|
Products
|
Selling
and promoting
|
Profit
through sales volume
|
Selling
concept
|
|||
Target
market
|
Customer
needs
|
Integrated
marketing
|
Profit
through customer satisfaction
|
Marketing
concept
|
|||
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