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Banking Diploma Reading Material

Introduction to Marketing-2

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The Scope of Marketing:

In twenty first century marketing is not related with the production and distribution of goods
and services. The scope of marketing is so much expanded that it has play vital role to
improve our standard of life and at the same time help to create health and wealth society.
Following areas or items where marketing principles, policies and strategies are applied and
on the other hand these are widely used in marketing activities.

1. Goods :
Physical goods constitute the bulk of most country’s production and marketing effort.
Physical goods can be food, car, television, clothing, housing and so on. Most of the
marketing activities are closely related with goods. Without goods transportation,
warehousing, grading and standardization activities can not be performed.

2. Services :
Services play a vital role in the modern economy. As economies advance, developed nations
are give more emphasis on production of services. Services include the work of airlines,
hotels, care rental firms, barbers and beauticians, maintenance and repair people and service
of accountants, lawyers, engineers, doctors, software programmers and management
consultants. Many market offering are consist of a mix of goods and services. Such as fast
food restaurant, where the customers are consume both good and service at a time. Pure
service would be a psychiatrist listening to a patient or legal advice of lawyer.

3. Experiences :
Marketers can create, stage and marketed experience. As for example, Walt Disney World’s
Magic Kingdom, where he create a visiting fairy kingdom, stages pirate ship, or haunted
house and marketed different experiences for the customers. Another example, customers can
gather experience by spending one week at a baseball camp playing with some retired
baseball great players.

4. Events :
Marketers can marketed events as goods and services. Marketers promote time - base events,
such as the Olympics, company anniversaries, major trade shows, sports events. There is a
whole profession of meetings planners who will work out the details of an event and stages it
to come off perfectly.

5. Persons :
Celebrity marketing has become a major business. A politician can marketed himself through
campaigning political mandate, personal image or success. Today every major film star has
an agent, a personal manager and ties to a public relations agency. Artists, musicians, doctors,
high level lawyer and other professionals are drawing help from celebrity marketers.

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6. Places :
Place marketing can be expressed in two different ways, one is places are used or play a vital
role in marketing activities. Such as historical cities, regions or sea beach or natural beautiful
areas to attract tourists. Other is places are used like as goods. Such as real estate or
apartment marketing.

7. Properties :
Properties are intangible rights of ownership of either real property or financial property.
Such as real estate, apartment and stocks, bonds etc. Properties are bought and sold, so it
requires marketing effort. Real estate agents work for property or apartment owners or
seekers to sell or buy residential or commercial real estate or apartment. Investment
companies and banks or their agents are involved in marketing of securities to both
institutional and individual investors.

8. Organizations :
Organizations are actively works to build a strong, favorable image in the mind of their
public or customers. Universities, colleges, museums, NGOs ( non government organization )
and clubs all lay plans to boost their public image to compete more successfully for audiences
and funds.

9. Information :
Information can be produced and marketed as a product. Universities, colleges, schools and
research organizations are collect data and facts and develop or produce information and
thereafter distributed to parents, students, manufacturing organization and communities at a
price. We buy CDs and visit the internet for information. At present in the knowledge society
production, packaging and distribution of information is one of the major industries.

10. Ideas :
Every market offering includes a basic idea at its core. The buyer of a television set is really
buy recreation and prestige. Products and services are the platforms for delivering some ideas
or benefits. Marketers search hard for core need of their customers and they are trying to
satisfying them. Many organization promote ideas to create better environment in the society.
As for example, slogan of “ planted trees and save the environment ”.

Demand States and Marketing Tasks

Different type of demand are exist in the market for different type of products and services,
which are discuss below. Marketer observed the demand in the market and take necessary
action to change the nature of demand or adjust it with the help of different type of marketing
tools and techniques.

1. Negative demand :
A market is in state of negative demand if a major part of the market (customer) dislikes the
product and may even may pay a price to avoid it. Such as vaccination, dental work, air travel
etc.
The marketing task is to analyze why the market dislikes the product and whether a
marketing program consisting of product redesign, lower prices and more positive promotion
can change beliefs and attitudes.

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2. No demand :
Target customers may be unaware of or not interested in the product. College students may
not be interested in foreign language course. A new service holder may not be interest to take
a life insurance policy.
The marketing task is to find ways to connect the benefits of the product with the person’s
natural needs and interests.

3. Latent demand :
Many customers may have a strong need that cannot be satisfied by any existing product.
There is a strong latent demand for harmless cigarettes and more fuel efficient cars.
The marketing task is to measure the size of the potential market and take necessary research
program and develop products and services to satisfy the demand if that are profitable.

4. Declining demand :
Every organization, sooner or later face declining demand for one or more of its products.
Such demand for gramophone, radio, black and white television etc.
The marketer must analyze the cause of the decline and determine whether demand can be
restimulated by new target markets, by changing product features, by price reduction or by
more efficient and effective communication.

5. Irregular demand :
Many organizations face demand that varies on a seasonal, daily, or even hourly basis,
causing problems of idle or overworked capacity. Such as road transport city buses are idle
during off - peak hours and insufficient during peak hours.
The marketing task is to find ways to alter the pattern of demand through flexible pricing,
promotion and other incentives.

6. Full demand :
Organizations often face full demand when they are pleased with their volume of business.
Such as mobile phone companies faces full demand situation in Bangladesh.

The marketing task is to maintain the current level of demand, so that they can face the
changing customer preferences and increasing competition. The organization must maintain
or improve its quality and continually measure customer satisfaction.

7. Overfull demand :
Some organization face a full demand level that is higher then they can expect or capable or
want to handle. At present in Bangladesh L .P. gas companies enjoying overfull demand.
The marketing task is to finding ways to reduce demand temporarily or permanently. In this
situation marketers generally take the steps to raising price and reduce promotional activities
and services.

8. Unwholesome demand :
Unwholesome demand is the demand of that products and services which are harmful to the
society. Organizations give their time, money, resource, effort and energy to discourage the
consumption of these type of products and services. Such as unselling campaigns have been
conducted against cigarettes, alcohol, hard drugs, X - rated movies, large families etc.

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The marketing task is to use negative messages and information ( harmful sides of the
products and services ) in promotional activities, increase the price and reduce the availability
of that products and services.

Types of Markets
A market is a set of all present and potential buyers. We can classify the market according to
the nature, objectives, behaviour of the market, which are discussed below.

1. Consumer markets :
This market is constitute by the consumer who buys goods and services for their ultimate
consumption. They do not process it to produce another goods and services or resell it to
another customer. Their buying behaviour is mostly emotional and they are not well informed
about goods and services. Producer or marketer requires to getting a clear sense about their
target customers. Most of the product’s strength depends on developing a superior product
and packaging and backing it with continuous advertising and reliable service. Consumer
marketers decide on the features, quality level, distribution coverage and promotional
activities that will help their product or service to achieve the best position in the market.

2. Business markets :
This market is constitute by the business men or professionals who buys goods and services
to produce another goods and services or resell it to another customer. They are well - trained
and well - informed professional buyers who have the skill to evaluate the competitive
offerings. Business buyer purchase products to make profit. Their buying behaviour is purely
rational. Business marketers must demonstrate how their products will help business
customer to achieve their profit goals. In this market advertise has very small role, but
stronger role is played by sales force, price and company’s reputation for reliability and
quality.

3. Global markets :
Companies selling their goods and services in the global market place and face additional
decision and challenges. Marketer must be decide which countries to enters, how to enter
each country, how to adapt their product and service features to each countries, how to price
their product in different countries. In the global market, marketer must have to take other
decisions, such as how to adapt their communication to fit the cultural practices of each
country. These decisions must be made on different legal system, different styles of
negotiation, different type of requirements for buying, owning and disposing of property and
so on.

4. Non - profit and governmental markets :

Companies selling their goods to non - profit organizations such as churches, Universities,
Education boards, charitable organizations or government agencies. In this market, company
must be careful to set price for their goods, because these organizations have limited
purchasing power. Lower prices can be affect the features and quality of the goods. In this
market, different type of formalities are needed to make sales.

Core Marketing Concepts

Marketing have different type of core concepts, which are helpful to understood marketing as
a modern social science. These core concepts are discussed below.

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1. Target markets and segmentation :

A marketer can not satisfy all type of customers in a market at a time. Not everyone likes
same soft drink, same dress, restaurant, automobile, movie etc. Customer likeness or dislikes
of goods and services are depends upon the age, sex, income, culture, education, status and so
on. Therefore, marketer segmented total market according to age, income, culture, education,
status of the customers. Then firm decides which segment is more profitable and which
segment is easy to serve or to satisfy.

2. Marketers and prospects :

A marketer is someone who seeking a response ( attention, a purchase, a vote, a donation )
from another party. Where another party is called the prospects. If two parties are seeking to
sell something to each other, then we called them both marketers.

3. Needs , wants and demands :

The marketer must try to understand the needs, wants and demand of the target market.
Needs describe the basic human requirements. People need food, air, water, clothing and
shelter to survive. People also have some strong needs for recreation, education, health care,
justices and entertainment. A marketer can not create needs for his market.
These needs become wants when they are directed to specific objects that might satisfy the
need. A persons needs can be food but his wants can be rice, brad or fruits.
Demands are wants for specific products backed by ability to pay. Three factors are important
to create demand for a product. First, desire to buy a specific product, second, ability to buy (
purchasing power ) and third, willingness to pay. Demand can be created by the marketers.

4. Product or offering :
People satisfy their needs and wants through products. A product is any offering that can
satisfy a need or want of the customers. Product is the most important factor in marketing for
any type of manufacturing and business organizations. Marketers chose their marketing
policies and strategies on the basis of the product nature, position and stage of product life
cycle. Major types of basic offerings of business or social organizations are goods, services,
experiences, events, persons, places, properties, organizations, information and ideas.

5. Value and satisfaction :

The product or offering will be successful if it is able to delivers value and satisfaction to the
target buyer. The value is a ratio between what the customer gets ( benefits ) and what they
gives ( cost ). The buyer chooses different offerings on the basis of which is perceived to
deliver the most value. The benefits include functional benefits and emotional benefits. The
costs include monetary cost, time cost, energy cost and psychic costs. The marketer can
increase the value of the customer offering in several ways. Raise benefits, reduce costs, raise
benefits and reduce costs, raise benefits by more than the raise in costs, Lower benefits by
less than the reduction in costs.

6. Exchange and transactions :

Exchange is the core concept of marketing, involves obtaining a desired product from
someone by offering something in return. Exchange is only one of four ways in which a
person can obtain a product. The person can self - produce the product and service, as when a
person hunts, fishes, produce cloths or gathers fruits. The person can use force to get a
product, as in a holdup or burglary. The person can beg, as happens when a homeless person
asks for foods. Five conditions are more essential to create exchange. these are.

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(a) There is at least two parties.

(b) Each party has something that may be valuable to the other party.
(c) Each party is capable to communicate and delivery.
(d) Each party is free to accept it or reject the exchange offer.
(e) Each party believes that it is appropriate or desirable to deal with the other party.
Exchange is a process rather than an event. Two parties are engaged in exchange if they are
negotiating, trying to arrive at mutually agreeable terms.

A transaction is a trade of values between two or more parties. A transaction involves several
dimensions, at least two things of value, conditions of agreement, a time of agreement, and a
place of agreement.

7. Relationship and networks :

Relationship marketing has the aim of building long term mutually satisfying relations with
key parties – customers, suppliers, distributors – in order to earn and retain their long term
performance and business. Marketers accomplish this by promising and delivering high
quality products and services at fair price to the other parties over time. Relationship
marketing builds strong economic, technical and social ties among the parties. It helps to cut
down transaction costs and time.
The ultimate outcome of relationship marketing is the building of a unique company asset
called marketing network. A marketing network consists of the company and its supporting
stakeholders, such as customers, employees, suppliers, distributors, retailers, adverting
agencies, university scientists and others with whom it has built mutually profitable business
relationships.

8. Marketing channels :
To reach a target market, the marketer uses three kinds of marketing channels. The marketer
uses communication channel to deliver and receive message from target buyers. This includes
newspapers, magazines, radio, television, mail, telephone, billboards, posters, CDs,
audiotapes and internet.
The marketer uses distribution channels to display or deliver the physical product or services
to the buyer or user. This includes warehouse, transportation vehicles, distributors,
wholesalers and retailers.
The marketer also uses selling channels to effect transactions with potential buyers. Selling
channels include not only the distributors and retailers but also the banks and insurance
companies that facilitate transactions.

9. Supply chain :
Marketing channels connect the marketer to the target buyers, the supply chain describe a
longer channel stretching from raw materials to components to final products that are carried
to final buyers. The supply chain represents a value delivery system. Each company captures
only a certain percentage of the total value generated by the supply chain.

10. Competition :
Competition includes all actual and potential rival offerings and substitutes that a buyer might
consider. Competition can be classify into four categories.
(a) Brand competition : A company sees its competitors as other companies offering a
similar product and services to the same customers at similar price.

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(b) Industry competition : A company sees its competitors as all companies making the
same product or class of products.

(c) From competition : A company sees its competitors as all companies manufacturing
products that supply the same service.

(d) Generic competition : A company sees its competitors as all companies that compete for
the same customers.

11. Marketing environment :

The marketing environment consists of task environment and broad environment. The task
environment includes the immediate actors involved in producing, distributing and promoting
the offering. The main actors are the company, suppliers, distributors, dealers, agents,
brokers, manufacturer representatives, marketing research agencies, advertising agencies,
banks, insurance companies, transportation and telecommunication companies and the target
consumers.
The broad environment consists of demographic environment, economic environment,
natural environment, technological environment, political environment, legal environment,
social environment and cultural environment. These environments contain forces that can
have a major impact on the actors in the task environment.

Marketing Philosophy
Marketing management is the conscious effort to achieve desired exchange outcomes with
target market. But what philosophy should guide a company’s marketing efforts ? What
relative weights should be given to the interests of the organization, the customers and
society ? So, marketing activities should be carried out under a well thought philosophy of
efficiency, low cost and mass distribution. There are five competing concepts under which
organizations conduct marketing activities. These are discussed below.

1. Production concept :
The production concept is one of the oldest concept in business. The production concept
holds that consumers will prefer products that are widely available and inexpensive.
Managers of production oriented businesses concentrate on achieving high production
efficiency, low costs and mass distribution. They assume that consumers are primarily
interested in product availability and low prices. This concept hugely used in the developing
countries. It is also used when a company wants to expand the market.

2. Product concept :
The product concept holds that consumers will favour those products that offer the most
quality, preference or innovative features. In this concept price of the product is not an
important factor. Managers in these organization focus on making superior products and
improving them over time. They assume that buyers admire well made products and can
appraise quality and preference. Company first try to produce a better quality product with
the help of their engineers but they do not consider the needs and wants of the consumer.
Here company think that if they are able to product a better quality product then they can sell
it easily in the market.

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3. Selling concept :
The selling concept holds that normally consumers are not interest to buy enough of the
company’s product, until they are forced. The company must therefore, undertake an
aggressive selling and promotional effort. This concept assume that typically consumers are
not buy much more and must be stimulated to buy more. It is also assume that company has
an efficient and effective selling and promotional tools to stimulate more buying.
The selling concept is practiced most aggressively with unsought goods, that buyers normally
do not think to buy it. Such as insurance, encyclopedias. These industries have preferred
various sales techniques to locate prospects and disclose the product benefits to the prospects.
The selling concept is also practiced in the non - profit organizations to collect funds and
political parties. Most firm practice the selling concept when they have over capacity. Their
aim is to sell what they make rather than what market wants.

4. Marketing concept or consumer oriented concept :

The marketing concept or consumer oriented concept holds that the key to achieving its
organizational goals consist of the company being more effective than competitors in
creating, delivering and communicating customer value to its chosen target market.
Marketing concept rests on four pillars. These are discussed below.

(a) Target market : First company segmented total market according to some effective
basis. Then they choose a target market, which market is more profitable and at the same time
it is easy to serve. Company do best when they choose their target market carefully and
prepare effective marketing programs.

(b) Customer needs : A company can define its target market but fall to correctly understand
the customers needs. Understanding customer needs and wants is not always simple. Some
customers have needs which they are not fully conscious, or they can not articulate these
needs, or they use some words that requires some interpretations. So, it is essential to find out
the actual needs and wants of the customers.

(c) Integrated marketing : When all the company’s departments works together to serve the
customer’s interest, the result is integrated marketing. Integrated marketing takes place on
two levels. First, the various marketing functions - sales force, advertising, customer service,
product management, marketing research - must together. Second, marketing must be
embraced by the other departments, they must also have to think about customer.

(d) Profitability : The ultimate purpose of the marketing concept is to help organizations to
achieve their objectives. In the case of private firms, the major objective is to earn profit. In
the case of non - profit or public organizations, it is surviving and attracting enough funds to
perform useful work.

5. Societal marketing concept :

The societal marketing concept holds that the organization’s task is to determine the needs,
wants and interests of the target markets and deliver the desired satisfactions more effectively
and efficiently than competitors in a way that preserves or enhances the consumer’s and the
society’s well being. The societal marketing concept calls upon marketers to build social and
ethical considerations into their marketing practices. Here company must try to make a
balance among company profit, customer want satisfaction and public interest. At the same

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time company try to build up a health and wealth society so that company can able to survive
in long run.

Difference between selling concept and marketing concept

Starting point Focus Means Ends
Factory Products Selling and Profit through
promoting sales volume
Selling concept
Target market Customer needs Integrated Profit through
marketing customer
satisfaction
Marketing concept

Marketing segmentation

A. Levels of market segmentation.

1. Segment marketing :
2. Niche marketing :
3. Local marketing :
4. Individual marketing :
B. Pattern of market segmentation.
1. Homogeneous preferences :
2. Diffused preference :
3. Clustered preference :
C. Market segmentation procedure.
1. Survey stage :
2. Analysis stage :
3. Profiling stage :
D. Basis for segmenting consumer markets.
1. Geographic segmentation :

2. Demographic segmentation :
(a) Age and life - cycle stage :
(b) Gender :
(c) Income :
(d) Generation :
(e) Social class :

3. Psychological segmentation :
(a) Lifestyle :
(b) Personality :
(c) Values :

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4. Behavioural segmentation :
(a) Occasions :
(b) Benefits :
(c) Users status :
(d) Usage rate :
(e) Loyal status :
(i) Hard core loyals :
(ii) Split loyals :
(iii) Shifting loyals :
(iv) Switchers :
(f) Buyer readiness stage :
(g) Attitude :

5. Multi – attribute segmentation ( Geoclustering ) :

6. Targeting multiple segments :

E. Major segmentation variable for business markets.

1. Demographic :
(a) Industry :
(b) Company size :
(c) Location :

2. Operating variables :
(a) Technology :
(b) User or nonuser status :
(c) Customer capabilities :

3. Purchasing approach :
(a) Purchasing - function organization :
(b) Power structure :
(c) Nature of existing relationship :
(d) General purchase policies :
(e) Purchasing criteria :

4. Situational factors :
(a) Urgency :
(b) Specific application :
(c) Size of order :

5. Personal characteristics :
(a) Buyer - seller similarity :
(b) Attitude toward risk :

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(c) loyalty :

F. Effective segmentation.
1. Measurable :
2. Substantial :
3. Accessible :
4. Differentiable :
5. Actionable :

G. Selecting the market segments.

1. Single - segment concentration :
2. Selective specialization :
3. Product specialization :
4. Market specialization :
5. Full market coverage :

Marketing Environment

A. Demographic environment.
Marketers are much more interested to monitor the demographic environment, because
population makeup the market.

1. World population growth :

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.

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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.

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(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 semi-finished 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.

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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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Challenges of bank marketing:

1) Technology:
Marketing by private sector banks and foreign banks is more effective than public sector
banks because these banks are IT oriented. Private sector banks and foreign banks are
attracting more customers by providing e-services. Thus, technology has become a
challenge before the public sector banks.
2) Untrained Staff:
Often it happens that when a prospective customer approaches the branch, the employees
seem to have very little knowledge about the scheme. This reflects an ugly picture of our
bank’s image. Banks are not losing one prospective customer but 10 more customers who
would be touch of this man. Attitude of the employees towards customers is also not very
well. Thus, it is a need of time to reorient the staff.
3) Rural Marketing:
This is a big challenge before the commercial banks to enhance rural marketing to
increase their customers. Banks should open their branches not only in the urban and
semi-urban areas but also in the rural areas.
4) Trust of Customers:
Marketing can be enhanced only by increasing the customers. Customers can be increased
or attracted only by winning the trust of the customers.
5) Customer Awareness:
Customer awareness is also a challenge before the banks. Bank can market their products
and services by giving the proper knowledge about the product to customer or by
awarding the customer about the products. Bank should literate the customers.

COMMON APPROACHES TO PRICING FINANCIAL SERVICES

1) Cost-Based Pricing
2) Parity Pricing
3) Value-Based Pricing
4) Regulation-Based Pricing

CHALLENGES IN PRICING FINANCIAL SERVICES

1) Financial Services Prices are Often Multi-Dimensional
2) Elusive Measures of Quality
3) Economic Forces
4) Poor Consumer Price Knowledge
5) Difficulty in Determining Customer Profitability
6) Indeterminable Costs
7) Conflicts of Interest

Strategies for the enhancement of bank marketing:

· Emphasis on Deposits

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· Form a Saleable Product Scheme

· Effective Branding
· Products for Women
· Customer Awareness
· Advertisement
· Selling Products in Rural Areas
· Informing Customers About Products
· Customer Convenience
· Re-orient Staff
· Sale of Products and Services through E-delivery Channels
· Sale of Products and Services through Web-sites

Strategic Business Unit

Strategic Business Unit (SBU) is a profit center which focuses on product offering and
market segment. SBUs typically have a discrete marketing plan, analysis of competition, and
marketing campaign, even though they may be part of a larger business entity. An SBU may
be a business unit within a larger corporation, or it may be a business unto itself.
Corporations may be composed of multiple SBUs, each of which is responsible for its own
profitability. General Electric is an example of a company with this sort of business
organization. SBUs are able to affect most factors which influence their performance.
Managed as separate businesses, they are responsible to a parent corporation. Companies
today often use the word segmentation or division when referring to SBUs or an aggregation
of SBUs that share such commonalities.

Competitive Strategy
Competitive strategy refers to how a company competes in a particular business. Competitive
strategy is concerned with how a company can gain a competitive advantage through a
distinctive way of competing.

A competitive strategy answers the following questions.

- How do we define our business today and how will we define it tomorrow?

- In what industries or markets will we compete? The intensity of competition in an industry

determines its profit potential and competitive attractiveness.

- How will we respond to the competitive forces in these industries or markets (from
suppliers, rivals, new entrants, substitute products, customers)?

- What will be our fundamental approach to attaining competitive advantage (low price,
differentiation, niche)?

- What size or market position do we plan to achieve?

- What will be our focus and method for growth (sales or profit margins, internally or by
acquisition)?

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Marketing Communication Mix

A marketing communication mix is a combination of marketing variables for a specific
product/service, arrived at by choosing the best mix from the 4 Ps of marketing. It defines
how you will position your product in the market. The four Ps are - Product: brand name,
styling, etc. Place: distribution channels, warehousing, etc. Price: retail price, seasonal
pricing, etc. Promotion: advertising, sales promotion, etc.

Advertisement: Any paid form of non-personal presentation and promotion of ideas, goods,
or services by identified sponsor.

Sales Promotion: A variety of shot-term incentives to encourage trial or purchase of a

product or services.

Public Relation And Publicity: A variety of programs designed to promote or protect a

company's image or its individual products.

Personal Selling: Face-to-face interaction with one or more prospective purchasers for the
purpose of making presentations, answering questions, and procuring orders.

Direct Marketing: Use of mail, telephone, fax, e-mail, or internet to communicate directly
with or solicit a direct response for specific customers and prospects.

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