Marketing An Introduction

Marketing An Introduction: Jaiib/DBF Paper 1 (Module D) Unit 1

Dear bankers,

As we all know that  is Marketing An Introduction for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are providing the Marketing An Introduction (Unit-1), SUPPORT SERVICES – MARKETING OF BANKING SERVICES/ PRODUCTS (Module D), Principle & Practice of Banking JAIIB Paper-1.

♦Market

  • The word “Market” in common parlance refers to the place where goods  can be bought or sold.
  • A market consists of all the potential customers sharing a particular need or want who might be able to engage in an exchange to satisfy that need or want.

Types of Market

Basis of Classification Types of Market
Geographical Area Local Market, Regional Market, National Market, World/Global Market
Product Cotton/Tea/Vegetable market, Share Market, Bullion Market, Capital Market, Real Estate Market, Retail Loan Market
Nature of Transaction Cash/Spot Market, Future Market, Commodity Market
Volume of Transaction Retail Market, Wholesale Market

♦Marketing

  • Marketing is the process of determining consumer demand for a product or services, motivating its sale and Distributing it into ultimate consumption at a profit.

Marketing- A Management Function

  • Marketing provides entrepreneurship by identifying opportunities in customer requirements and mobilizing resources to capitalize on them. Marketing forms an interface with the existing and potential customers. It passes through the management functions of analyzing, planning, implementing and controlling.

Selling vs Marketing

BASIS FOR COMPARISON SELLING CONCEPT MARKETING CONCEPT
Meaning Selling concept is a business notion, which states that if consumers and businesses remain unattended, then there will not be ample sale of organization’s product. Marketing concept is a business orientation which talks about accomplishing organizational goals by becoming better than others in providing customer satisfaction.
Associated with Compelling consumer’s mind towards goods and services. Directing goods and services towards consumer’s mind.
Starting point Factory Target Market
Focuses on Product Customer needs
Perspective Inside-out Outside-in
Essence Transfer of title and possession Satisfaction of consumers
Business Planning Short term Long term
Orientation Volume oriented Profit oriented
Means Heavy selling and promotion Integrated marketing
Price Cost of Production Market determined

♦Marketing Management

  • Marketing management is the process of decision making, planning, and controlling the marketing aspects of a company in terms of the marketing concept, somewhere within the marketing system. Before proceeding to examine some of the details of this process, com­ments on two aspects will be helpful background.
  • According to Philip Kotler, “Marketing Management is the art and science of choosing target markets and building profitable relationship with them. Marketing management is a process involving analysis, planning, implementing and control and it covers goods, services, ideas and the goal is to produce satisfaction to the parties involved”.

Functions of Marketing Management

  • Analysis
  • Planning
  • Implementation
  • Control

Important of Marketing for Banks

  • Marketing can support banking business only when the minimum 2 of the above 3 are competent enough. There is no point is doing marketing for a business if the product is not worth it, its just waste of money and effort as sooner or later customer would find out the value of the product and was it worth their investment/time.
  • Same rule applies to customer service and digital technology.
  • Marketing is no doubt necessary for banking as the competition is intense and nearly everyone wants to keep their hard earned money safe and secured. But to gain someone’s trust and for a long time Banks needs to fundamentally change the sales and marketing dynamics and include the above three in its core.

♦Products and Services

What is Product?

  • According to Philip Kotler “A product is anything tangible or intangible that can be offered to a market for attention, acquisition use or consumption that might satisfy a need or want”.

Characteristics of Physical Products

  • Tangible
  • Homegeneous
  • Production and distribution separated from consumption
  • Core value produced in factory
  • Customers do not participate in the production process
  • Cab be stored
  • Transfer of ownership possible

What is a service?

  • Philip Kotler and Paul N. Bloom define services as any activity or benefit that one party can offer to another, which is basically intangible and does not result in the ownership of anything. They added that its production may or may not be tied to a tangible product.

Characteristics of Service Products

  • Intangibility: Intangibility is an important consideration that complicates the functional responsibility of a marketing manager, specially while influencing and motivating the prospects/customers. The goods of tangible nature can be displayed, the prospects or buyers can have a view and they can even test and make a trial before making the buying decisions. The selling processes are thus found easier
  • Inseparability: This is also a feature that complicates the task of professionals while marketing the services. The inseparability focuses on the fact that the services are not of separable nature. Generally, the services are created and supplied simultaneously
  • Heterogeneity: Another feature is heterogeneity which makes it difficult to establish standard. The quality of services can’t be standardised. The prices charged may be too high or too low. In the case of entertainment and sports, we find the same thing. The same type of services can’t be sold to all the customers even if they pay the same price.
  • Perishability: This means that the service “units” cannot be stoked. If a seat is unfilled when the plane leaves or the play starts, it cannot be stored and sold next day or next week, that revenue is lost forever.

Different between Physical Goods and Services

Physical Goods Services
Tangible Intangible
Homogeneous Heterogeneous
Production and distribution separated from consumption Production, distribution and consumption are simultaneous process
A Thing An activity or process
Core value produced in factory Core value produced in buyer seller interactions
Customers do not  participate in the production process Customers participate in the production
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership

♦Marketing of Financial Services

  • The characteristics of services viz, intangibility, inseparability, heterogeneity and perishability are all present in financial services, too. Some assume special meaning in the context of financial services. Intangibility has two aspects:
  • At one level, it is concerned with the fact that services are impalpable in the sense that they have no physical form.
  • Many services are intangible from a conceptual point of view, in that are not easily defined and may be difficult to understand. (Bateson)

Types of Financial Markets in India

  • The credit Market
  • Equity and term lending market
  • Gilt-edged securities market
  • Insurance market
  • Mutual funds
  • Consumer finance market
  • The money market
  • Debt market
  • Leasing and hire purchase
  • Foreign exchange market
  • Stock markets

Marketing of Banking Services

  • Bank marketing is the aggregate of functions, directed at providing services to satisfy customers financial (and other related) needs and wants, more effectively and efficiently than the competitors keeping in view the organizational objectives of the bank.

This definitions highlights the following points:

  • Bank Provide services
  • Aim is to satisfy customer needs and wants of specific nature
  • The nature of needs and want s of the customer is primarily financial, while some may be incidental to or related to these.
  • The competitive element, efficiency and effectiveness are major factors in the process.
  • Organizational objective are still the driving force.

♦Marketing Mix

  • It is a marketing tool that combines a number of components in order to strengthen and solidify a product’s brand and to help sell the product or service. Companies have to come up with strategies to sell their products, and coming up with a marketing mix is one of them.

Marketing Mix 4P’s

  • A marketing expert named E. Jerome McCarthy created the Marketing 4Ps in the 1960s.
  • This classification has been used throughout the world. Business schools teach this concept in basic marketing classes.
  • The marketing 4Ps are also the foundation of the idea of marketing mix.

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  1. Promotion: How the awareness is created among the customers.
  2. Place: Where the customer wants delivery of product.
  3. Price: What the customer is ready to pay for this product.
  4. Product: What are the features of the product.

4Cs Marketing Model

The 4Cs marketing model was developed by Robert F. Lauterborn in 1990. It is a modification of the 4Ps model.

It is not a basic part of the marketing mix definition, but rather an extension.

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Cost – According to Lauterborn, price is not the only cost incurred when purchasing a product. Cost of conscience or opportunity cost is also part of the cost of product ownership.

Consumer Wants and Needs – A company should only sell a product that addresses consumer demand. So, marketers and business researchers should carefully study the consumer wants and needs.

Communication – According to Lauterborn, “promotion” is manipulative while communication is “cooperative”. Marketers should aim to create an open dialogue with potential clients based on their needs and wants.

Convenience – The product should be readily available to the consumers. Marketers should strategically place the products in several visible distribution points.

The Marketing Mix 7P’s

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♦Brand Image

  • Today’s generation is quite impressionable and hence in order to enhance their personality, or to meet social standards, they gravitate towards branded products that are creating a stir in the market. This brand image is simply an impression or an imprint of the brand developed over a period of time in the consumer’s mindset.
  • This image of a brand is ultimately a deciding factor that determines the product sales. The brand image is very important, as it is an accumulation of beliefs and views about that particular brand. The character and value of the brand is portrayed by its image, as it is the main component in the scheme of things.
  • The brand image is eventually the mirror through which the company’s key values are reflected.

Why Brand is Important?

  • User Association: Brand is used as prestige or success by associating with glamorous personalities.
  • Value Proposition: Buying decisions are affected of influenced with brand value.
  • Experience: A proven track of good performance only can create brand. It creates faith among customers.

How Brand are Build?

  • Quality
  • Positioning
  • Strong communication
  • Time and consistency
  • Innovation
  • Consistent customer satisfaction
  • Early entry in Market

♦Colours Play an Important Part in Logo

  • Orange: The Colour of dynamism, an organization, responsive to market condition & Customer needs.
  • Blue: The colour of trust and depth.
  • Maroon: The colour of warmth an organization that goes beyond the basics to understand its customers and provide them with products and services with a view to building lasting relationships.
  • Grey: The colour of stability.
  • White: The colour of ethics and organization which has set for itself high standards of corporate governance standards which guide its professionals who are committed to the highest levels of integrity and work ethics.
  • Electric orange: The colour of dynamism- brighter & Sharper.

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