Introduction to Marketing and Its Importance

Marketing Management

Marketing (management) is the process of planning and executing the conception, pricing, promotion and distribution of goods, service, and ideas to create exchanges with target groups that satisfy customer and organisational objectives.

Functions of Marketing Management

Analysis

Planning

Implementation

Control

Characteristics of Services

1.    Intangibility

2.    Inseparability

3.    Heterogeneity

4.    Perishability

	Physical Goods		Services
1	Tangible	Intangible
2	Homogeneous	Heterogeneous
3	Production and Distribution are	Production,	Distribution	and
	separated from consumption	Consumption are simultaneous process
4	A thing	An activity or process
5	Core value produced in factory	Core  value  produced  in  buyer-seller
		interactions
6	Customers do not participate	Customers participate in the production
7	Can be kept in stock	Cannot be kept in stock
8	Transfer of ownership	No Transfer of Ownership

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The Servuction process

Marketing of Financial Services

Bank Marketing

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 Product Planning 

A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Product Personality

The Core

The Associated Features

The Brand Name and Logo

The Package and Label

Product Levels

Product Categories

Product Item, Product Line and Product Mix

The Banking Product

Product Planning

The process of product planning consists of determining the strategies in respect of various elements:

Product Line

Product Mix

Branding

Packaging and New Product Development

Product Life Cycle 

Introduction

Growth

Maturity

Decline

New Product Development

The Process of product Development comprises five main stages:

Idea Screening

Concept Testing

Product Development

Test Marketing

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Commercial Launch

Diversification

Diversification refers to entering attractive opportunities which are outside the existing businesses of the firm. Three types of diversification

Concentric Diversification

Horizontal Diversification

Conglomerate Diversification

Other Aspects of Product Development

·         Branding

·         Packaging

1.    Primary Package

2.    Secondary Package

3.    Shipping Package

·         Labelling

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 Pricing

Cost Based Pricing			Value Based Pricing		Competition Based Pricing
·	Mark up Pricing		·	Perceived   value	·  Going – Rate Pricing
·	Absorption	Cost	·	pricing	·	Auction- Type Pricing
·	Pricing			Value Pricing		English Auctions
	Target-return Pricing					Dutch Auctions
·	Marginal	Cost			·	Sealed – bid Auctions
	Pricing					Group Pricing

Pricing Strategies

·         Geographical Pricing: different locations, different prices, cost of transportation included.

·         Price Discounts and Allowance : Cash Discount, Quantity Discount, Functional Discount, Seasonal Discount

·         Psychological Pricing: To many consumers think that higher priced product to be of better quality. By setting the price in particular range sellers can create an impression about the product belongs to the particular class

·         Promotional Pricing :

·         Discriminatory Pricing: when different prices are changed to different buyers.

·         Product-Mix Pricing :

·         Market-skimming Pricing: Product is initially priced higher, and over a period of time it is reduced to attract more buyers, with a view to ‘skimming’ the revenues layer to layer from the market.

·         Market-penetration Pricing: Setting the price low initially in order to penetrate the market quickly and deeply attracting a large market share.

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  Distribution

Functions of Distribution Channel

Market Information

Promotion

Contact

Matching

Negotiation

Product Information

Physical Distribution

Financing

Risk Taking

Channel Types

Following factors influenced producers to select the channels for distribution. Product Characteristics

Market Characteristics

Customer Characteristics

Company Resources

Competition

Product Lines

Channels for Banking Services

The following factors affects the channel decision

Intangibility

Inseparability

Variability

Perishability

Client Relationship

Channels

1.    Branches are the primary distribution outlets for banking services. These are fixed in location and customer is required to visit the branches.

2.    Other Channels

Tele-banking and Call Centres

ATMS

Personal Computer

Plastic Cards

Virtual Branches

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3.    Intermediaries in Banking Services Direct Sales Agents Automobile Dealers

Merchant Establishments

Physical Distribution

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 Promotion

Role of Promotion in MARKETING

Promotion is the exercise of communicating the properties of different elements of marketing mix to the customers with the motto of influencing them. This involves the following aims:

a)    Persuasion

b)    Inform

c)    Reminding

d)    Reinforcing

Promotion Mix

The promotion mix comprises the following tools:

Advertising

Sales Promotion

Public Relations

Personal Selling

Direct Marketing

Promotion-mix Strategies

There are two basic promotion-mix strategies

Push Strategy – promotion efforts are directed at the channel members to induce them to purchase the products and sell them to the final customer.

Pull Strategy - promotion efforts are directed to the final consumer to induce them to buy the product

Factors influencing the Promotion Mix

Three major factors affecting the choice of promotion mix are

Type of Product / Market

Buyers’ Readiness Stage

Product Life Cycle Stage

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  Marketing Information System

Need of MIS

a)    Complex marketing activity

b)    Knowledge / information explosion

c)    Communication Gap

d)    Prompt Decisions

e)    Non-Price Competition

Kind of Information needed

Information about market forces

Information about the bank’s market behaviour Internal Information

Components of MIS

MIS consists of four subsystems, which facilities the entire MIS system.

a)    Internal Record System

b)    Market Intelligence System

c)    Marketing Research System

d)    Marketing Management and Science System