BANKING DIPLOMA EXAMINATION
Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)
Marketing of Financial Services-JAIBB
Marketing Environment
A. Demographic
environment.
Marketers are much more interested
to monitor the demographic environment, because population makeup the market.
The world population explosion has
been a source of major concern, for two reasons. The first is the fact that
certain resources needed to support this much human life ( fuel, foods and
minerals ) are limited and may run out at some point. Unchecked population
growth and consumption would eventually result in insufficient food supply,
depletion of key material, over crowding, pollution and an overall
deterioration in the quality of life.
Second cause for concern is that
population growth is highest in some countries and communities that can least
afford it. In the developing countries, the death rate has been falling as a
result of modern medicine, but birth rate remained fairly stable. Feeding,
clothing and educating of their children while also providing a rising standard
of living is nearly impossible in these countries.
2. Population age mix :
National populations vary in their
age mix. At one extreme is Mexico, a country with a very young population and
rapid population growth. At the other extreme is Japan, a country with one of
the world’s oldest populations. In Mexico milk, diaper, school supplies and
toys would be the important products. But in Japan most of the population
consume many more adult products.
So, the marketers have to create
separate products and services for different countries and have to choose
different price, distribution and promotional strategies for them.
3. Ethnic market :
Countries also vary in ethnic and
racial makeup. At one extreme is Japan, where almost every one is Japanese. But
on the other extreme is United States, where virtually people came from all
nations. Each group has certain specific wants and buying habits. Several food,
clothing and furniture companies have directed their products and promotions to
one or more of these groups.
4. Education groups :
The population in any society falls
into five groups, illiterate, high school dropouts, high school degree, college
degree and professional degrees. The marketers have to observe the size of each
groups in a society and according to their size they have to design their
production plan for different products and services.
5. Household patterns :
The traditional household consists
of a husband, wife and children. But in some other societies we observed that
their household patterns are nontraditional including single live - alones, adult live – togethers, single parent
families, childless married couple and so on. Single or separated families
needed smaller apartment, inexpensive and smaller appliances, furniture and
small size food packets. So, the marketers have to consider to the household patterns
of the different societies.
6. Geographical shifts in population :
Population movement from one country to another or from
rural to urban areas. Location makes a difference in goods and service
preferences. Those who lived in large cities their most of the purchase are
expensive furniture, perfumes, cloths and so on. Suburbanites buy home workshop
equipment, outdoor furniture and outdoor coking equipments etc. So, the
marketers have to consider to the geographic shifts in population.
7. Shift from a mass market to micro - markets :
The
effect of all these changes is fragmentation of the mass market into numerous
micro - markets differentiated by age, sex, ethnic background, education,
geography, lifestyle and other characteristics. Each group has strong
preferences and marketer has to reached the customer through increasingly
targeted communication and distribution channels. Marketers are increasingly
design their products and services and selected their marketing programs for
specific - micro markets.
B. Economic
environment.
Without the purchasing power,
consumers are not able to fulfill their needs and wants properly. The available
purchasing power in an economy depends on current income, price, savings, debt
and credit availability. Marketers pay close attention to major trends in
income and consumer spending patterns.
1. Income distribution :
Nations economic condition mostly
depend on the level and distribution of income and industrial structure. There
are four types of industrial structures are observed in the national economy.
(a) Subsistence economies :
In a subsistence economy, the vast
majority of people engage in simple agriculture, consume most of their output
and barter the rest outputs for simple other goods and services. These
economies offer few opportunities for the marketers.
(b) Raw material exporting economies :
These economies are rich in one or
more natural resources but poor in other respects. Much of their revenue comes
from exporting these resources. For example, Zaire and Saudi Arabia has copper
and oil resources and they export them in the international market. These
countries are good markets for extractive equipment, tools and supplies,
materials handling equipments and trucks. Depending on the number of foreign
residents and wealth or rich rulers and landholders, they are also a good
market for western - style commodities and luxury goods.
(c) Industrializing economies :
In an industrializing economy,
manufacturing begins initially to account for 10 percent to 20 percent of gross
domestic product. Industrializing economies countries are India, Egypt,
Philippines, Malaysia and so on. As manufacturing increases, the country
depends more on imports of raw materials, steels and heavy machinery and less
on imports of finished textiles, paper products and processed foods.
Industrialization creates a new rich class and a small but growing middle
class, both demanding new types of goods and services.
(d) Industrial economies :
Industrial economies are major
exporters of manufactured goods and investment funds. They buy manufactured
goods and export them to other types of economies in exchange for raw materials
and semifinished goods. The large and variety of manufacturing activities of
these nations and their sizable middle class make them rich markets for all
sorts of goods.
2. Saving, debts and credit availability :
Consumers expenditures are affected
by consumer saving, debt and credit availability. Consumers saving habit
increase the amount of deposits, which is helpful for banks to reduce the bank
interest rate and increase the loan availability. Access to lower interest rate
helps the companies to expand faster. When credit facilities are available then
consumers can purchase many goods and services, otherwise these are not
possible at present. Marketers must pay careful attention to major changes in
income, cost of living, interest rate, savings and borrowing patterns because
they can have a high impact on business, specially for companies whose products
have high income and price sensitive.
C. Natural
environment.
1. Shortage of raw materials :
2. Increased energy cost :
3. Increased pollution levels :
4. Changing role of governments :
D. Technological
environment.
One of the most dramatic forces
makes rapid changes of human life is technology. The economy’s growth rate is
affected by the discoveries of new major innovated technologies. The marketers
are monitoring the new innovation and trend of technology.
1. Accelerating pace of technological change :
Many of today’s common products were
not available 40 years ago. People of that time were did not know personal
computers, digital wristwatches, video recorders, mobile phones and fax
machines. The advent of personal computers and fax machines has made it
possible for people to telecommunicate the others that is, work at home instead
of traveling to offices that may be takes 30 minutes or more. Some people hope
that this trend of technology will reduce auto pollution, healthy society,
bring the family close together and create more home centered entertainment and
activities. It will also have substantial impact on shopping behaviour and
marketing performance.
2. Unlimited opportunities for innovation :
Scientists are working on a
startling range of new technologies that will revolutionize products and
production process. Some of the most exciting work is being done in solid -
state electronics, biotechnology, robotics and material sciences. Researchers
are working on AIDS cures, happiness pills, painkillers and nonfattening foods.
They are designing efficient robots for firefighting, underwater exploration
and home nursing. In addition scientists are also working on fantasy products,
such as small flying cars, three - dimensional television and space colonies.
The challenge in each case is not only technical but also commercial – to
develop affordable versions of these products.
3. Varying research and development budgets :
The United States annual research
and development expenditures are highest in the world, nearly 60 percent of
these funds are still earmarked for defense. Japan has increased its research
and development expenditures much faster than the United States and is spending
mostly on nondefense related research in physics, biophysics, biochemistries,
material science, geography and computer science. Many companies are content to
put their money into copying competitors’ products and making minor feature and
style improvements. So, new innovation of technology depends upon the nature of
research work and on the amount of budgets allocated for research and
development works.
4. Increased regulation of technological change
:
As products become more complex, the
public needs to be assured of their safety and security. Consequently,
government agencies’ powers to investigate and ban potentially unsafe products
have been expanded. Safety and health regulations have also increased in the
area of food, automobiles, clothing, electrical appliances, medical sciences
and construction. Marketers must be aware of these regulations when proposing,
developing and lunching new products in the markets.
E. Political legal
environment.
1. Legislation regulating business :
2. Growth of special - interest groups :
F. Social cultural -
environment.
1. High persistence of core cultural values :
2. Existence of subcultures :
3. Shifts of secondary cultural values through
time :
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