Marketing

What is marketing?
Marketing is one of the major and important functions of any industry whether it is manufacturing or service industry. It is a business philosophy that states that the customers’ want and satisfaction are the economic and social justification for the existence of an organization.
Marketing is identification of customers’ needs, stimulating demand for a product and then satisfying the need by selling the product at the right time, at the right place and at an acceptable price. It is rejuvenating the dormant buying activities by innovation and introduction of new products.Thus it is an activity of creating, promoting and delivering goods and services to consumers. It relates mainly to channel of distribution of goods and services with the aim of providing satisfaction to the needs and demands of the customers.
Broadly it includes activities covering assessment of the demand of products, studying competition, government policy and regulations, behaviour pattern of customers, pricing module, promotion and distribution of product. It also includes measuring of out put of selling activities and taking suitable steps for boosting sales in the target market.
Marketing is finding today the opportunities in tomorrow’s market. It is teamwork that demands commitment from one and all in the organization for converting new ideas into profit. It also includes ongoing promotions, including advertising, public relations, sales and customer service.
Marketing and Selling: -
Though marketing and selling sound to be synonyms but they are different.
The main task involved in marketing is identification of different types of customer needs thorough market intelligence and then drawing suitable scheme to suit their needs and execute them in an effective manner. In marketing the demand is created first by germinating and inciting the latent needs and desires. A feeling of necessity is induced. Marketing is satisfying the need of the customer by designing the product to suit the need. There is an element of innovation.
In marketing, demographic pattern, market trends, changes in consumption pattern, impact of cultural invasion etc, are studied and prototype of the product is designed, tested in the market lab and thereafter the final product is shaped and placed in the market.
Under selling concept, goods are produced first and by various methods of selling, customers’ are persuaded to buy the products. A salesman sells what he has on his shelf, in his store and stock. He tries to bend the customers’ demand to fit with his product. Selling is preoccupied with sellers need to convert his product in to cash. Selling focuses on the needs of the seller and marketing on the needs of the buyer. The end result is increase in business turnover.
Marketing Management: -
Marketing Management understands human behaviour in response to the stimuli to which they are subjected. A skilful marketer is one who is practical psychologist and sociologist, who has keen insight into individual and group behaviour, who can foresee changes in the behaviour that develop in dynamic world, who has creative ability and can visualize probable response of customers.
Fundamentals of Marketing: -
For effective marketing one has to identify the needs of the market, demand of products, and methods to serve the market. Therefore analysis of market is necessary for marketing a product. It is helps in understanding:
1.The group of existing and potential customers in the market.
2.The group of customers to be targeted in the market?
3.Various needs of these customers?
4.The products or services to be developed to meet the needs.
5.Probable response of the customers in using the products and services.
6.Who are other players i.e. competitors in the market?
7.What is the price structure of competitors and their pricing policy?
8.What are the marketing strategies of competitors, their channels of distribution and after sales service policy?
9.To which group of people they are targeting in the market?
What are needs and wants: -
Needs are the basic human requirement. A seller does not create needs. Needs pre-exists. These needs become wants, which are directed to specific object for their satisfaction. Wants are shaped by ones environment, knowledge, culture, society etc. The seller influences wants and induces dormant desire and makes it active, and attractive to the purchaser to buy things, which they were not intending to buy. Therefore understanding customer is necessary for getting larger share in the market.
What is Market?
Traditionally, by the term market we visualize it to be a place where buyers and sellers meet to buy and sell goods. However, in the present era, market is no more restricted to a physical place or to a geographical boundary. Globalization and technological developments have widened the scope of market and has liberated it from the shackles of geographical boundaries as buying and selling activities can now be undertaken from any place. It is no more necessary that buyer and seller meet physically for sale and purchase. Internet has opened a new set of market-“e-market”. It is a virtual market where different products are offered for sale through web and purchases are also made through websites. A purchaser can have the visual of the product from different angles. Payment modes are also prescribed on the site, which is either through credit/debit card or directly through the account of the purchaser.
Marketing Network: -
It consists of entire range of customers i.e. stakeholders, customers, employees, suppliers, distributors, retailers, agencies etc, with whom the institution has built mutual profitable business relationship.
Buying decision: -
Marketing is stimulating demand for the product. A sale does not materialist unless it involves purchase. Buying is a complex behaviour. Before finally going for a product, a customer ascertains whether the product;
a.Is suitable, serves his purpose and meets his need.
b.Is within his budget and in his price range?
c.Is to his convenience?
d.Is the best deal in the market?
e.What is the life of the product
f.Has short obsolesce life or long life.
g.Has got warranty and after sales service facility.
And once the buyer is satisfied he
1.Develops belief about the product.
2.Develops favorable attitudes and inclination about the product.
3.Makes a thoughtful choice.
Major role in making the decision to buy a product depends on the feed back of those who are either using the product or have used the product. Their feedback or advice influences the decision of purchaser.
Elements of successful marketing:
Successful marketing campaign depends basically on following three factors. These are market, message, and timing.
1.Market: -
Since marketing of products is no more restricted to a particular physical place, one has to select a market, which has enough resources to support the business in a big way. The business cannot work unless market players both buyers and sellers are active. There has to be unrestricted, uninterrupted supply of variety of products in the market and buyers, enough resources, and then only transactions can materialize.
2.Message: -
For successful marketing, one has to understand customers’ wants apprehensions, problems, and desires etc. The message, including the offer, must be clear and appealing. It should not only address customer’s apprehensions but should also be harmonies with his thinking. Talking to people to find out their views and problems can be helpful in marketing to a group with a common background.
3.Timing: -
The timing of launching the product is critical. Markets tend to go through "waves" when they are receptive to certain products and messages the time is then ripe for launching the product. Seasonal products like woolens can be marketed only in winters and not in summer.
Attracting Customer: -
Today’s customers are smart and their knowledge level is high. They are also well aware of their rights and duties of seller. They can no longer be taken for granted. They are more informed, more demanding, and less forgiving. They are both price and quality conscious. For attracting customers following aspects are given importance.
1. Product Concept:
The business is guided by the assumption that consumers’ prefer those products, which are unique, which offers most innovative features and give quality performance. The term product includes set of attributes and conditions, which buyers normally desire for satisfaction of want or need. These include physical products, services, benefits, information and experience or anything that can be offered to a market. Buyers admire well-made products. Organizations therefore focus on making superior products and improving the quality and features on a regular basis.
2. Selling Concept:
It is believed that consumers show buying inertia or resistance or reluctant to change the product, which is being used by them. Hence they must be coaxed for buying or should be given exchange offer for the product having extra features. Therefore organizations undertake aggressive selling and promotion efforts.
3. Marketing Concept:
The premise behind this concept is to be more effective than the competitors in creating, delivering and communicating superior customer value for achieving organizational goals.
4. Customer Retention:
Customer retention is the outcome of customer satisfaction. A highly satisfied customer stays longer, talks favorably to others about the product and services. He is more loyal.
What is Brand?
A brand is an offering from a known source. Brand conveys attributes, benefits, values, culture, and personality of the institution and its product. Branding is the art and corner stone of marketing. It is a name, term, sign, symbol, or design or a combination of them. Brand helps in identifying and differentiating the goods or services of a seller or group of sellers.
Customers pay significant presence for brands that meet their requirement. When brands’ meaning is positioned in a customer’s mind, he or she will remember the brand and opt for the product. A brand name creates an image of the product in the mind of the people e.g. Maruti, Indica, Hyundai for car, Bata for shoes, LG., Sony for electronic goods etc.
Advantages of Brand: -
Brands help in building the corporate image and make it easier in launching new products. The brand name makes it easier for the seller to process orders and track down problems. Brand name and trademark provides legal protection and helps in facing competition. Branding also helps the seller in segment markets
Who is Brand Ambassador?
Now a day’s corporate and big business houses are roping up celebrities for marketing their entire range of products and services. These celebrities are known as brand ambassador for that organization. For example Hema Malini is the brand ambassador for Bank of Rajasthan, Rahul Dravid for Bank of Baroda, Sania Mirza for Tata Tea, Amitabh Bacchan for the products of Dabur.
Market Segmentation:
As the choices, preferences, perception, utility differs from individual to individual, organizations marketing a product can rarely satisfy every one. Hence profile of distinct groups of buyers about their needs, wants, demands and requirement of various products and services is worked out after examining demographic, psychographic and behavioural pattern. Segmentation is identification and bifurcating the target market into sub sections according to their needs. For example a bank decides to target its product to medical practitioners. This is segmenting the market as there are also other professionals viz architects, chartered accountants, advocates, consultants, fashion designers, engineers etc.
Facing Competition: -
Globalisation and technology have opened floodgates of challenges. Technology has broadened the vision of customers, made them knowledgeable and intelligent and has raised their expectations. Their awareness level is quite high and is increasing with the passage of time. They want instant satisfaction of product, service and their information needs. As an Internet user, customers are also aware of other institutions offering the similar or improved products and or services.
To face competition it is necessary that the end user is kept apprised on a continuous basis about the product and services. Sending details of the product or service on regular basis to the end user keeps him aware of the organization.
Keeping constant touch and maintaining liaison with the customers is an excellent way of eliminating competition from their minds. With the technological development, e-mail has become an instant and cheapest mode of communication. Constant communication and touch both close and remote with the consumers plays an important role in facing competition. It improves the sale value of the business. When customer's need or want for the product or service is "satisfied," he doesn't tend to look for other providers for the same or a similar product or service. He does not migrate to other service provider, which benefits the institution.
Acknowledging suggestions and attending efficiently and promptly to the grievances of the user creates credibility of the organization and helps in building customer loyalty.
Systems of Marketing: -
Organizations adopt different strategies to keep customers aware of their products, services and induce them to go for their products. They make them loyal and dependent customers by building strong bonds of trust. Some of the marketing methods are discussed below.
1. Relationship Marketing: -
The idea behind relationship marketing is to establish a learning relationship with customers. Relationship helps in creating cross-selling opportunities. The goal of relationship marketing is to increase customer satisfaction and to minimize any problems. Relationship marketing builds strong economic, technical and socialites with the customers who are valuable and profitable. It cuts down transaction cost and time. Relationships is building mutually satisfying long-term relationship with key parties, customers’ etc., for retaining their business. It makes most sense for customers whose lifetime value to the organisation is the highest.
In banking industry relationship makes customer more loyal and willing to invest additional funds. The purpose of high-end relationships is not only to increase customer satisfaction and retention, but also to cross-sell and bring in investment. By engaging in "smarter" relationships, a bank can learn customers' preferences and develop trust. Regular contact with the customers, whether over the Internet, through a phone call, or through personal contact, helps in building trust and mutual loyalty. As relationships develop, customers tend to make use more services of the bank.
2. Digital Marketing:
Technology has not only made consumers demanding but has enhanced their desire for personalized service and to find everything they need under one ‘rooftop’. Customers want convenient access and ‘one stop’ web sites that can provide them all information.
The growing popularity of wireless devices has opened the "virtual" marketplace. Non-traditional competitors have started offering products and services. As the technology advances both the Internet and mobile will have the ability to gather more information about a consumer, their preferences, buying pattern location, etc.
3.Data Based Marketing:
For selling more products data of potential consumers is must. Data based marketing is defining the needs of customers and matching the appropriate products and services to those needs. Database marketing is necessary for achieving success of a product. Data helps in analyzing and deciding ways to serve customers intelligently and customizing product sand services based on customer information.
According to Phillip Kotler “ Marketing is becoming a battlefield more on information than on sale power visible" for that customer. Many organisations are using customer relationship management (CRM) software for data based marketing.
4.Vertical Marketing: -
In the conventional marketing system business firms independently concentrate to maximise. They compete with each other and non-coordinates with others for having complete or substantial control over the market. However, in vertical marketing system the players in the market act in a unified manner. This eliminates or minimizes conflicts e.g. Hindustan Lever, Proctor and Gamble, and Gujarat Cooperative Milk Marketing Federation are able to get cooperation from their distributors and retailers in implementing their strategies for sale promotion and policies.
5.Horizontal Marketing: -
Every organization has certain expertise and core competencies. They also have some grey areas. Under this system two or more independent and non-related business organizations join hands in exploring new marketing opportunities and take benefit of the expertise of other. For an example Tata Group does not finance but {Through Rallis India} has teamed up with ICICI bank to give agricultural inputs, Car manufacturers and car dealers, have tied up with banks for financing purchase of vehicles, estate agents and builders have tied up with banks for housing loans.
6.Multiple Marketing: -
Under this system organizations use two or more than two marketing channels for reaching one or more customer segment e.g. in addition to direct marketing banks have also outsourced marketing of Credit Cards.
7. Telemarketing: -
Telemarketing is marketing conducted over the telephone. The purpose of telemarketing is to make a sale. Most telemarketing calls are known as "cold calls". These are unsolicited commercial calls where the called subscriber has not given explicit prior consent to the calling party.
Telemarketing is one of the most controversial types of marketing. Sometimes telemarketers have personal information about a customer, or the caller randomly selects the names and telephone numbers either from telephone directory or service provider or from other vendors or outlets and contacts the person. A large number of subscribers find that such calls are a nuisance and inconvenient since they encroach on the called party’s time and often interfere with the called party’s activities. Additionally, such calls disturb the privacy of the subscriber. In the wake of widespread public resentment against such calls, Telecom Regulatory Authority of India (Trai) has formulated the Telecom Unsolicited Commercial Communications Regulations (TUCCR). The Department of Telecommunications (DoT) has issued guidelines for telemarketers in order to check unsolicited commercial calls.
Launching of products: -
Before launching products an organization has to do lots of thinking and mental exercise. It has to decide the target market i.e. identification of segments and groups i.e. whom to sell, where to sell, when to sell, and in what quantity to sell. It has to develop a system to find out the probable response of customers, market and competitors. Thus it has to decide in detail on the following aspects.
a) The Product: It covers the line of, type of, range of products to be offered in the market. This includes product variety, quality, design, features, brand name, packaging, sizes, services, warranties, and returns. It includes identification of market and innovation and launching of new products.
b) Price: Before launching a product or service in the market it is necessary to decide the price. The price has to be competitive. A pricing policy is necessary for deciding wholesale price, retail price, discount, payment period credit terms etc? Organisation has also to address whether there will be one price or varying price? What will be the level of pricing?
c) Branding: It is selection of trademark, unique product identification.
d) Channels of distribution: Selection of location of outlets through which the products and services would be offered.
e) Selling Policy: Whether it should be wholesale selling or retail selling. What target group is to be approached and what will be methods of selling?
f) Sales Promotion: What is the budget for advertisement, public relations, building corporate image, and market penetration. Whether there will be direct marketing?
g) Servicing policy: What arrangements are to be made for providing after sales service.
h) Fact finding: What will be the system for ascertaining the impact of marketing operations, obtaining feed back about the product, quality of after sale service from the end users.
Forecasting Market:
Marketing and selling are continuous process. Sales are the end result of marketing. Sales cannot materialize unless there are users and the organisation marketing a product has reputation. Organizations have realised that there is something worse than losing money in any particular quarter or period and that is losing reputation. Hence Maintenance of reputation is must. Therefore, for projecting future demand and deciding on marketing strategies following factors need to be examined.
1.Individual Factor:
a. What are the motivational factors behind purchasing i.e. behaviour in response to the stimuli

to which they are subjected?
b. Changes in consumers’ buying behaviour.
c. What are customers’ buying habits and buying capacity?
d. What are living habits of customers?
e. What is the social status and environment (Present and future, as revealed by friends,

consumers attitudes towards product)
2.Competitor’s Position:
a. Number of competitors in the market, their size and strength.
b. What other products are being offered in the market
c. Degree to which competitors compete on price vs. no price
d. Trends both technological and social
3.Government policy:
a. What regulations affect price
b. What are the regulations affecting fair competition
Marketing in Banking: -
Marketing is not new in banking. Increasing competition has forced banks to have a scientific and tested marketing and sales planning system. Banks have realized that it is the knowledge and awareness that makes a product or service to take off in the market and the inherent quality and uniqueness of the product keeps it alive resulting into constant demand from consumers. Hence, unless masses know the range of service products offered by banks no one will have special leaning towards the bank and its products. In a non-marketing climate the customer remains anonymous and unimportant to the growth of the business. Banks are therefore adopting marketing orientation, identifying the important customer and formulating suitable strategies to fulfill the demands of customers
Marketing activity in banks is associated with identification of current and potential customer needs, development and promotion of products and services that are acceptable to the customer at a price that is realistic and profitable to the bank.
With the help of experts in the field of marketing, banks are developing in house skills of selling financial services. Banks are re-looking, reengineering and modifying systems and procedures and fusing it with technology to meet the spurt in demand of financial products. In present days marketing has become aggressive and combative. Therefore knowledge of technology and marketing is must for sustainable growth. This also helps in improving customer satisfaction. Banks are improving the customer services by professionalisation, by modernizing their systems and by creating greater degree of customer consciousness amongst staff. Banks are also inculcating passion for efficiency in their staff.
Marketing approach in Banks:
Today banks are operating in a highly competitive, rapidly changing and dynamic environment. With the opening of private sector new generation banks the competition has become tough. These new generation banks have different work culture, work ethics and do not carry the weight of past legacies they are technologically advanced and are not averse to change. These banks have opened floodgates of competition not only in the traditional banking operations but also in modern line of business. With their innovative marketing management skill these new generation banks have gained an edge over old stalwarts in the field.
Banks are finding the going tough and for profitable survival, they have to find out new ways of selling services and explore new markets to increase their competitive edge. Banks have realized that for meeting competitive challenges they have to adopt a ‘Marketing Philosophy which revolves around need satisfaction of the customer. For successful marketing commitment of staff at all level is necessary. Bank officials, branch managers have therefore to identify different types of customers, their needs and draw up a suitable scheme to suit their needs and execute them in an effective manner. Bankers have to be innovative and should foresee the future demand. A banker has to have through knowledge of his area so that he can assess the changes taking place and ascertain the opportunities existing for profitable deployment. He should be aware of the cultural environment in which he operates and be familiar with the attitudes of local people towards savings, borrowing, spending their values and, traditions. This knowledge goes a long way in designing and offering new products, and in creating marketing strategies.
For satisfying the identified needs of different segments and sub segments of customers banks have introduced number of packages of services by combing more than one core service. Broadly speaking there are three basic strategies as under.
1.Market Penetration: - In this existing range of services are sold to the existing customers’ e.g. a term deposit customer may be approached by bank for another type of deposit account or for a credit facility. Proper database helps in market penetration.
2.Market Development: - By offering vide range of services to new or potential customers their base is enlarged.
3.Product Development:- New services are developed to meet the needs and demands of existing customers.

Banking a Service Industry: -
Banking is a service industry where no physical products are sold. Service is an activity or benefit that one party offers to another. Services are people based. They are intangible and cannot be seen. Customer service is not a static concept. A service that may be regarded as good today may not be so tomorrow. Due to the spread of awareness and awakening and increase in the general level of education, people have become conscious of their right to receive prompt, efficient and courteous customer service from banks. From the banker’s point of view, proper customer service and customer satisfaction is important not only to lure new business and customers but also to retain existing one. Banks deal only in various types of financial products and services. A physical product can be seen, touched; its quality can be tested and ascertained by the purchaser. A physical product has shelf life. It can be stored. Whereas, all these are not possible in case of banking services as the services provided by banks are intangible. Service delivery depends on the service provider. We see the person delivering the product but the way the product is delivered is only felt. It is the feeling of satisfaction that makes the service good or bad. It is the feeling that makes the difference in marketing of banking services.
Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product perceived performance or outcome in relation to his or her expectations. The customer is satisfied if the performance meets the expectations; he is dissatisfied if the performance is short of his expectation. Level, criteria and standard of satisfaction differs from person to person. Hence in banking industry it is the service provider i.e. employees who play an important role in customer satisfaction and marketing of financial products. A satisfied customer is in himself publicity for the bank as he does publicity with the word of mouth. As he does positive publicity a dissatisfied customer does adverse publicity dissatisfied customer drives out satisfied customers from the bank. A dissatisfied customer patronizes the bank only out of sheer necessity and does not bring more business of his own and his acquaintances. Having an alternative he migrates to other bank. Feeling of customer satisfaction is dependent on employees. It has been found that higher employee satisfaction ultimately further customer satisfaction, which results in customer retention.
Cross Selling: -
Market penetration strategy is the fundamental of cross selling. Cross selling is based on the principle of ‘matching need’s with need arousal. For every service that a customer is cross-sold the bank gains in following ways.
a. Other services of banks are sold.
b. Probability of customer switching over to another bank is reduced
c Banks cost of operations is reduced
d. Income /earning goes up

To make cross selling effective it is necessary that

1.Bank staff has a broader perspective about the variety of needs of the customer,
2.Staff members have complete knowledge and are aware of the entire range of services being

offered by the bank.
3.There is full involvement of all the employees
4. Staff is well aware of the positive points of the product and salient features of the products of

competitors.
5.Employees have to come out of the cocoon of their restricted operational approach.

6.Environment in the bank is charged with motivation and zeal to excel.
Marketing is must for survival of an institution. It gives publicity to the institution and makes

its presence felt in the market. It indicates that the institution is alive to the needs of masses.