(Study Materials) IBPS Specialist Officer : Professional Knowledge - Marketing

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Professional Knowledge for Specialist Officer - Marketing

Introduction

This material is made for the aspirants who are going to appear for Marketing Officers (Scale I) post of IBPS Specialist Officers. We’ve left no stone unturned to cover all basic topics of Marketing in this small pdf book. So this will be helpful as a basic reference guide to review marketing topics. You can download more materials of the same from .

The objective of all business enterprises is to satisfy the needs and wants of the society. Marketing is, therefore, a basic function of all business firms. When a salesperson sells washing machines, a doctor treats a patient or a Government asks people to take their children for getting polio drops, each is marketing something to the targets.

Traditionally, small firm owners did not give as much importance to marketing as to other functions such as accountancy, production and selling. Training programmes, enterprise development and the current thrust for competitiveness have now given high priority to promoting marketing awareness among small business owners, and marketing is now assuming its rightful place along with other business functions. Since early 1990s there has been a change in the thinking of businessman from product orientation to consumer orientation. Modern business concerns lay emphasis on ‘selling satisfaction’ and not merely on selling products. The activities have to be coordinated so as to develop the marketing mix, which provides maximum satisfaction to the customers. That is why marketing research and product planning occupy an important role in marketing. The other important functions of marketing include: buying and assembling, selling, standardization, packing, storing, transportation, promotion, pricing and risk bearing. Thus, the scope of marketing is very wide and no more restricted to merely selling of products.

What is Marketing ?

Marketing may be narrowly defined as a process by which goods and services are exchanged and the values determined in terms of money prices. That means marketing includes all those activities carried on to transfer the goods from the manufacturers or producers to the consumers. We shall be learning later in the lesson that marketing is more than a mere physical process of distributing goods and services. It is the process of discovering and translating consumer wants into products and services. It begins with the customer (by finding their needs) and ends with the customer (by satisfying their needs).

The scope of marketing can be understood in terms of functions that an entrepreneur has to perform. These include the following:

  1. Functions of exchange : which include buying and assembling and selling?

  2. Functions of physical supply : include transportation, storage and warehousing

  3. Functions of facilitation : Product Planning and Development, Marketing Research, Standardisation, Grading, Packaging, Branding, Sales Promotion, Financing

The Marketing Concept

The marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors1. Under marketing concept, the emphasis is on selling satisfaction and not merely on the selling a product. The objective of marketing is not the maximization of profitable sales volume, but profits through the satisfaction of customers.

The consumer is the pivot point and all marketing activities operate around this central point. It is, therefore, essential that the entrepreneurs identify the customers, establish a rapport with them, identify their needs and deliver the goods and services that would meet their requirements.

The components of marketing concept are as under:

  • Satisfaction of Customers: In the modern era, the customer is the focus of the organization. The organization should aim at producing those goods and services, which will lead to satisfaction of customers.

  • Integrated marketing: The functions of production, finance and marketing should bem integrated to satisfy the needs and expectations of customers.

  • Profitable sales volume: Marketing is successful only when it is capable of maximizing profitable sales and achieves long-run customer satisfaction.

Marketing in Simple Words

Marketing is nothing but to Tell about your product and to Sell it. The technical definition is “Marketing is the process of planning and executing the concepts, pricing, promotion and distribution of ideas/goods/services to satisfy individual’s/organizational”

Types of Marketing

There are several types of marketing are there, some of them are

Bench Marketing

  • The Bench Marketing is nothing but the comparison of the business processes with competitors and improving prevailing ones.

Drip Marketing

  • Drip Marketing is nothing but sending promotional items to Clients.

Viral Marketing

  • Viral Marketing is nothing but, Marketing by the word of the mouth, having a high pass-rate from person to. The best example for this is Creating a ‘buzz’ in the industry.

Guerilla Marketing

  • Guerilla Marketing is an Unconventional marketing intended to get maximum results from minimal resources. (just remember Maximum results from Minimum resources)

Social Media Marketing

  • Marketing using online communities, social networks, blog marketing etc is called the social media marketing.

Direct Marketing

  • If the company directly reaches to the customers on a personal basis (ex : phone calls, private mailings, etc) rather than raditional channel of advertising (like TV, Newspapers, etc) then that type of marketing is called the

Direct Marketing.

  • Types: There are number of types in direct marketing, Some of them are……

Direct Mail Marketing :

Advertising material sent directly to home and business addresses (This is the most common form of direct marketing)

Telemarketing :

It is the second most common form of direct marketing, in which marketers contact consumers by phone.

Email Marketing :

This type of marketing targets customers through their email accounts (you might have observed them in your e mails too)

Indirect Marketing

  • Distributing a particular product through a channel that includes one or more resellers is called Indirect Markeging (simply we can say that telling about our product indirectly)

Difference between Direct and Indirect Marketings :

  • In Direct marketing you advertise your own products or services.

  • But in Indirect marketing you advertise somebody else’s Product.

  • Ex: Example of direct marketing is Shivani Sharma… As she markets her blog on her own. Example of Indirect marketing is Katrina Kaif, as she markets LUX but she doesn’t own that company ;)

Internet Marketing

  • Marketing of products or services over the Internet is called Internet Marketing. It is also know as i-marketing, web-marketing, online- marketing, Search Engine Marketing (SEM) and e-Marketing.

Digital Marketing

  • • The marketing which uses digital advertising is called digital marketing. Television, Radio, Internet, mobile etc.

Marketing Mix (4 Ps) :

The Marketing Mix model (also known as the 4 P’s) is a tool used by marketers while defining the marketing strategy. Iif you could identify the right combination of these elements, your marketing would succeed. E. Jerome McCarthy introduced the 4 P’s of Marketing as a way to describe the mix of factors required to successfully market a product.

The 4 P’s are :

  • Product

  • Price

  • Promotion

  • Place (distribution)

5 P’s of Marketing :

  • 4 P’s

  • Product

  • Price

  • Promotion

  • Place (distribution) and

  • People

  • Packaging

  • Process

7 P’s of marketing

  • Product

  • Price

  • Place

  • Promotion

  • People

  • Process

  • Physical evidence

Important Note: Here the first 4 P’s are considered as the basis of any marketing process. The last 3 P’s are a recently added.

SWOT Analysis

SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is a tool for auditing an organization and its environment. The SWOT Analysis is the first stage of planning and helps marketers to focus on key issues. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

Customer Relationship Management (CRM)

In order to sell my product, I should maintain good Customer Relations. I mean I should interact with customers and know their needs and according to that I have to design my product. This is called Customer Relationship Management (CRM in short). The CRM concerns the relationship between the organization and its customers (to learn more about customers’ needs and behaviors in order to develop stronger relationships with them).

Three Levels of a Product

  • Core Product

  • Actual Product

  • Augmented Product

Market Research

Researching (or gathering information) about Customers or Market. I mean, to discover what customers want, need, or believe (and ofcourse, how the Act). Once you came to know all the details then you can easilea get an idea on how to market your product.

Market Information

The Information about Market. I mean the information like the prices of the different commodities in the market, and getting the Demand and Supply information.

Market Segmentation

Market Segmentation is nothing but dividing the market into Parts. Into different homogeneous groups of consumers. The purpose of this is to allow your marketing program to focus on the subset of prospects that are “most likely” to purchase your offering. If done properly this will help to insure the highest return for your marketing expenditures.

Branding

Displaying the importance of the product and other things in the form of Logo is called Branding (this logo may consists some symbols, colours and letters)

Marketing versus Selling

The basic difference between marketing and selling lies in the attitude towards business. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective2. It starts with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces profits through creating customer satisfaction.

Importance of Marketing in Small Business

Since marketing is consumer oriented, it has a positive impact on the business firms. It enables the entrepreneurs to improve the quality of their goods and services. Marketing helps in improving the standard of living of the people by offering a wide variety of goods and services with freedom of choice, and by treating the customer as the most important person.

Marketing generates employment both in production and in distribution areas. Since a business firm generates revenue and earns profits by carrying out marketing functions, it will engage in exploiting more and more economic resources of the country to earn more profits.

A large scale business can have its own formal marketing network, media campaigns, and sales force, but a small unit may have to depend totally on personal efforts and resources, making it informal and flexible. Marketing makes or breaks a small enterprise. An enterprise grows, stagnates, or perishes with the success or failure, as the case may be, of marketing. “Nirma” is an appropriate example of the success of small scale enterprise.

Marketing of Services

The services sector is more than twice the size of the manufacturing sector. The growing competitive market for services means that a marketing orientation has become essential for the survival for service industries too. India’s high capabilities in Information Technology are well known. In addition, there is the most popular segment of its services sector, the entertainment industry, particularly films and TV happens to be one of the fastest growing in the world. Indian films are popular across West Asia, Afghanistan, Central Asia, Russia, South Africa and South East Asia. They are now penetrating the western world.

Marketing Research

Marketing research is the means by which the information necessary to run a business is obtained. It helps an entrepreneur to take decisions concerning the type of product, the price policy, the channel of distribution, and sales promotion can be made rightly with the help of marketing information at the right time. It is the gathering, recording, and analysis of all facts about problems relating to the transfer and sale of goods and services from producer to consumer. For example, a hotel should find out what all services are needed to satisfy its customers and the soft toy manufacturer making teddy bears needs to find out if children really want purple teddy bears and so on. Every company, irrespective of size, must research its market, customers and competition; initially to set it on the right course and then continually to monitor its performance. Small-scale firms are often unable to afford continuous marketing research. However, they can use personal contacts and other informal methods for collecting required information about markets.

Market Segmentation

A market consists of large number of individual customers who differ in terms of their needs, preferences and buying capacity. Therefore, it becomes necessary to divide the total market into different segments or homogeneous customer groups. Such division is called market segmentation. They may have uniformity in employment patterns, educational qualifications, economic status, preferences, etc.
Market segmentation enables the entrepreneur to match his marketing efforts to the requirements of the target market. Instead of wasting his efforts in trying to sell to all types of customers, a small scale unit can focus its efforts on the segment most appropriate to its market.

A market can be segmented on the basis of the following variables :

Geographic Segmentation : The characteristics of customers often differ across nations, states, regions cities or neighborhoods. The entrepreneur can decide to operate in one or a few or all the geographic areas, but pay attention to differences in geographic needs and preferences.

Demographic Segmentation : Variables such as age, sex, family size, income, occupation, education, religion, race and nationality are widely used for market segmentation.

Psychological variables : Personality, life style, social class, etc. can also be used for market segmentation. For example, some products like pens, watches, cosmetics and briefcases are designed differently for common men and status seekers.

Behavioural Segmentation : Buyers are divided into groups on the basis of their knowledge, attitude, use or response to a product.

Marketing Mix

In order to cater to the requirements of identified market segment, an entrepreneur has to develop an appropriate marketing mix. Marketing mix is a systematic and balanced combination of the four inputs which constitute the core of a company’s marketing system – the product, the price structure, the promotional activities and the place or distribution system”. These are popularly known as “Four P’s” of marketing.
An appropriate combination of these four variables will help to influence demand. The problem facing small firms is that they sometimes do not feel themselves capable of controlling each of the four variables in order to influence the demand.

A brief description of the four elements of marketing mix is as follows :

1. Product: The first element of marketing mix is product. A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include physical objects, services, events, persons, places, ideas or mixes of these. This element involves decisions concerning product line, quality, design, brand name, label, after sales services, warranties, product range, etc. An appropriate combination of features and benefits by the small firm will provide the product with USP (unique selling proposition). This will enhance the customer loyalty in favour of its products.
Products and services are broadly classified into consumer products and industrial products. Consumer products are bought for final consumption; where as Industrial products are bought by individuals and organisations for further processing or for use in conducting business. Other ways of classifying products are as follows:

a. Convenience products : These are consumer products that the customer buys very frequently, without much deliberation. They are low priced of low value and are widely available at many outlets. They may be further subdivided as :

  • Staple Products : Items like milk, bread, butter etc. which the family consumes regularly. Once in the beginning the decision is programmed and it is usually carried on without change.

  • Impulse Products : Purchase of these is unplanned and impulsive.

  • Usually when the consumer is buying other products, he buys these spontaneously for e.g. Magazines, toffees and chocolates. Usually these products are located where they can be easily noticed.

  • Emergency products : Purchase of these products is done in an emergency as a result of urgent and compelling needs. Often a consumer pays more for these. For example while traveling if someone has forgotten his toothbrush or shaving kit; he will buy it at the available price.

b. Shopping products : These are less frequently purchased and the customer carefully checks suitability, quality, price and style. He spends much more time and effort in gathering information and making comparisons. E.g. furniture, clothing and used cars.

c. Specialty products : These are consumer goods with unique characteristics/ brand identification for which a significant group of buyers is willing to make a special purchase effort. For example, Mitsubishi Lancer, Ray ban glasses.

d. Unsought product : These are products that potential buyers do not know exist or do not yet want .For example Life Insurance, a Lawyers services in contesting a Will.

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