Marketing of Financial Services:Introduction to Marketing

BANKING DIPLOMA EXAMINATION

Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)

Marketing of Financial Services-JAIBB

Introduction to Marketing 

Q.1 What is the nature & scope of marketing & why is marketing important?

Ans.: Nature & Scope of Marketing: Marketing is an ancient art & is everywhere. Formally or informally, people & organizations engage in a vast numbers of activities that could be called marketing. Good marketing has become an increasingly vital ingredient for business success. It is embedded in everything we do- from the clothes we wear, to the web sites we click on, to the ads we see.

 Marketing deals with identifying & meeting human & social needs or it can be defined as “meeting needs profitably”.

The American Marketing Association has defined marketing as “an organizational function & a set of processes for creating, communicating & delivering value to the customers & for managing customer’s relations in ways that benefit the organization & the stake holders.

Or

Marketing management is the art & science of choosing target markets & getting, keeping & growing customers through creating, delivering & communicating superior customer value.

Or

“Delivering a higher standard of living”

For a managerial definition, marketing has been defined as “the art of selling products” but people are surprised when they hear that the most important part of marketing is not selling. Selling is only the tip of marketing iceberg.

Peter Drucker says it this way that the aim of marketing is to know & understand the customer so well that the product or service fits him & sells itself. All that should be needed is to make the product or the service available.

 Eg. The success of Indica, the first indigenously designed car by Tata Motors. Backed by strong customers delight, the company designed a vehicle with luggage space & legroom & offered it a price easily available & affordable to middle class.

(2) Gillette launched its March III razor.

Marketing people are involved in marketing 10 types of entities: goods services, events, experiences, persons, places, properties, organizations, information & ideas.

Therefore ideal marketing should result in a customer who is ready to buy.

Importance of Marketing: Financial success of any organization depends upon marketing ability of that organization. There should be sufficient demand for products & services so the company can make profit. Therefore many companies created chief marketing officer (CMO) position to put marketing on a more equal footing with other e-level executives.

Marketing is tricky & large well known business such as Levi’s, Kodak, Xerox etc. had to rethink their business models, Even Microsoft, Wal-Mart, Nike who are market leaders cannot relax.

Thus, we can say that making the right decision is not easy & marketing managers must take major decisions about the features of the product prices & design of the product, where to sell products & expenditure on sales & advertising. Good marketing is no accident but a result of careful planning & execution. Marketing practices are continuously being refined to increase the chances of success. But marketing excellence is rare & difficult to achieve & is a never ending task

Eg. NIRMA – The brand icon of the young girl has adorned the package of Nirma washing powder. The jingle has become one of the enduring times in Bangladeshi advertising.

Q.2 What are some fundamental marketing concept?

Ans.: The various fundamental concepts are :-

(1) Exchange Concept : The Exchange concept holds that the exchange of a product between seller & buyer is the central idea of marketing Exchange is an important part of marketing, but marketing is a much wider concept.

(2) Production Concept : The production concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available & expensive. Manager of production oriented business concentrate on achieving high production efficiency low cost & mass distribution. Eg. Haier in China take advantage of the country’s huge inexpensive labor pool to dominate the market, to manufacture PC & domestic appliances.

(3) Product Concept : This concept holds that consumers will prefer those products that are high in quality, performance or innovative features.

Managers in these organization focus on making superior products & improving them. Sometimes, this concept leads to marketing myopia, Marketing myopia is a short sightedness about business. Excessive attention to production or the product or selling aspects at the cost of customer & his actual needs creates this myopia.

(4) Selling Concepts : This concept focuses on aggressively promoting & pushing its products, it cannot expect its products to get picked up automatically by the customer. The purpose is basically to sell more stuff to more people, in order to make more profits. Eg. Coca Cola

(5) Marketing Concept : The marketing concept emerged in the mid 1950’s. The business generally shifted from a product – centered, make & sell philosophy, to a customer centered, sense & respond philosophy. The job is not to find the right customers for your product, but to find right products for your customers. The marketing concept holds that the key to achieving organizational goals consist of the company being more effective than competitors in creating, delivering & communicating superior customers value. This concept puts the customers at both the beginning & the end of the business cycle. Every department & every worker should think customer & act customer.

Distinguishing Features of the Marketing Concept :

(i) Consumer Orientation : The purpose of any business is to create a customer. It is the customer who determines what a business is-

(ii) Integrated Management with Marketing as the Fulcrum : Integrated management means that all the different functions of a business must be tightly integrated with one another. This is essential because every function has a bearing on the consumers & the aim is to see that all the functions make a favourable impact on the consumer.

(iii) Consumers Satisfaction : The marketing concept emphasizes that it is not enough if a firm has consumer orientation, it is essential that with such an orientation, it should lead to consumer satisfaction.

(iv) Realization of all Organizational Goals, Including Profits : The firm should not forget its own interests. It treats consumer satisfaction as the pathway to the attainment of goals of the organization. 

In short the marketing concept essentially represents a shift in orientation.

From production orientation to marketing orientation.

From product orientation to customers orientation.

From supply orientation to demand orientation.

From sales orientation to satisfaction orientation

From internal orientation to external orientation.

(6) Social Marketing Concept : This concept holds understanding broader concerns & the ethical, environmental & legal & social context of marketing activities & programs. The cause & effects of marketing extend beyond the company & the consumes to society as a whole. Social responsibility also requires that marketers carefully consider the role that they are playing & could play in terms of social welfare.

(7) Holistic Marketing Concept : This concept is based on the development, design & implementation of marketing programs, processes & activities that recognizes their breadth. Holistic concept realizes that “everything matters” with marketing.