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Marketing Notes for Competitive Exams
Dear readers, since Marketing is a major portion of SBI Exams,
so here we are presenting you some quick notes on Marketing . Hope
they prove to be useful in the upcoming exam.
Market : It is a physical place or an environment where sellers
and buyers meet together to exchange goods and services.
Marketing : It is the sum total of all activities that are
related to the free flow of goods from the producer to the
customer. Getting the right goods & services, to the right
people, at the right place, at the right time and at the right
price.
Marketing Management: It is the art and science of choosing
target markets and getting, keeping and growing customers through
creating, delivering and communicating superior customer value.
Market Research: It is a process of collection and analyzing
information regarding customer needs and buying habits, the nature
of competition in the market, prevailing prices, distribution
network, effectiveness of advertising media etc for arriving at a
decision.
Relationship Marketing: It is basically building mutually
satisfying long term relationships with key parties like customers,
suppliers, distributors and other marketing partners in order to
earn and retain their business.
Direct Marketing: It consists of a manufacturer selling directly
to the final customer. It is also called zero level channel. The
major examples are door-to-door sales, telemarketing, Internet
selling etc.
Packaging: It involves putting the goods in attractive packets
according to the convenience of consumers. Well designed packages
can build brand equity and drive sales. The package is the buyer's
first encounter with the product and is capable of turning the
buyer on or off.
Personal Selling: It is a part of promotional activity. It
involves communicating directly with the target audience through
paid personnel of the company or its agents for making sales.
SWOT Analysis:
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PEST Analysis:
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Marketing Mix (4P's):
Product, Price, Place, Promotion
Viral Marketing: Marketing by the word of mouth having a high
pass route from person to person is called viral marketing. It can
create a splash in the market place to showcase a brand and its
noteworthy features.
Product Policy: It is concerned with defining the type, volume
and timing of the products a company offer for sale.
Rights of consumers: Right to safety, Right to be informed,
Right to choose, Right to be heard Right to seek redressal, Right
to consumer education.
Cross Selling: An exposure to various other unutilized services
of the bank to a customer is called cross selling. It also includes
identifying customer needs, matching the products to customer
needs, convincing the customers of product benefits &
responding to questions and objections of customers.
SME's: It stands for Small & Medium Enterprises. Market
Expansion: It is growth in sales through existing and new products
by adopting
competitive strategies. It includes expanding the total market,
defending market share, expanding market share etc.
Product Diversification: It refers to manufacturing or
distributing more than one product by the producer or dealer.
Marketing Plan: It is a written document that summarizes what
the marketer has learned about the market place and indicates how
the firm plans to reach its marketing objectives. It is the one of
the most important outputs of the marketing process.
Green Marketing: It is a new environment friendly marketing
technique. Product Elimination: It is a process of removing product
from the product line (it is a
group of products that are closely related to each other). Drip
Marketing: The method of sending promotional items to clients is
called drip
marketing. Selling: It is confined to persuasion of consumers to
buy firm's goods and services. It
involves the transfer of ownership of goods to create possession
utility. Bench Marketing: A comparison of the business processes
with competitors and
improving prevailing ones is called bench marketing. Qualities
of a good seller: Devotion to the work, Submissive, Sympathy,
Active mind
set, Communication skill, Creativity, Motivation. Prospect: A
'likely' interested customer of the bank is termed as a prospect.
Customer Relationship Management (CRM): It allows the company to
discover whom
its customers are, how they behave and what they need or want.
It also enables the company to respond appropriately, coherently
and quickly to different customer opportunities.
Call: In marketing, calling the prospective customer is known as
a call.
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Sales Forecasting: It is the expected level of company's sales
based on a chosen marketing plan an assumed marketing environment.
It involves sales planning, sales pricing, distribution channels,
consumer tastes etc.
Motivation: It refers to inspiring one self and others to
perform better. Branding: The essence of a product, its quality and
competitiveness displayed in the
form of letters, symbols and colours is known as branding. Sales
Forecasting: The method of estimating volume of sales that a
company can expect
to attain within a planned period is called sales forecasting.
Marketing for Growth:
Advertising: Any paid form of non-personal presentation and
promotion of ideas, goods or services by an identified sponsor.
Segmentation: The process of dividing a market into a number of
sub markets is known as market segmentation.
Positioning: The development of marketing mix to influence a
customer's perception of a brand is called positioning.
Consumer Behaviour: A consumer's buying behaviour is influenced
by cultural, social, personal and psychological factors.
Promotion: When a marketer persuades a person or group of
prospective buyers, the communication is termed as promotion.
Product Life Cycle (PLC): It is the life period of product in
the market. The different stages includes Introduction, Growth,
Maturity, Decline.
Bancassurance: Bancassurance simply means selling of insurance
products by banks. In this arrangement, insurance companies and
banks undergo a tie-up, thereby allowing banks to sell the
insurance products to its customers.
Consumer Goods: Goods meant for personal consumption by the
households or ultimate consumers are called consumer goods. It
includes items like groceries, cloths etc.
Industrial Goods: Goods meant for consumption as use as inputs
in production of other products orprovision of some service are
termed as industrial goods.
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Demarketing: Marketing aimed at limiting market growth; for
example, some governments practice demarketing to conserve natural
resources, and organizations use a demarketing approach when there
is so much demand that that are unable to serve the needs of all
potential customers adequately.
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What is the market? Any structure which may be a place or may
not be can be defined as the market that allows buyers and sellers
to exchange any type of goods, services and information. It can
also be called as an arrangement constructed by buyers and sellers.
It facilitates trade and enables the distribution of resources in a
society. Thus a market: 1. It establishes the prices of goods and
services. 2. It consists of systems, institutions, procedures,
social relations and infrastructure. 3. It brings a sense of
competition. 4. It works on a basic force of demand and supply.
Types of market: On the basis of place 1. Local market 2.National
market 3.International market
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On the basis of time 1.Very short period market 2.Short period
market 3.Long period market 4. Very long period market On the basis
of competition 1. Perfectly competitive It consists many sellers.
E.g. Mobile market, internet providers etc. 2. Imperfectly
competitive (a) Monopoly one seller. E.g. Indian Railway (b)
Duopoly two sellers. (c) Oligopoly few sellers. E.g. petroleum
product market (d) Monopolistic many sellers On the basis of
product 1. Consumer market - These are the markets where products
and services bought by consumers for their own and family use.
Types: (a) Fast moving consumers goods (FMCG)
High volume Low unit cost Fast and frequent purchase
E.g. Biscuits, soaps, detergents, newspapers etc. (b) Consumer
durables
Low volume High unit cost
E.g. Freeze, TV, computers, motorbikes, laptops etc. (c) Soft
goods - It is like consumer durable.
Low/high volume High/low unit cost Frequently purchased
E.g. Clothes, shoes, specs etc. (d) Services
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Targeted consumers Brand name more important Intangible
E.g. Health insurance, beauty parlours, insurance etc. 2.
Industrial market- These markets are not intended directly to
consumers but among businessmen.
Finished goods market Raw material market Services
E.g. Accountancy, legal advice, security services, waste
disposal services etc. What is a market economy? It is an economy
system in which economic decisions regarding monetary control,
products and their production and methods and control over
distribution are based on supply and demand. These are decided
solely by the aggregate interaction of a countrys citizens as
consumers and businesses and there is very little government
intervention or central planning. Since in market economy, markets
are governed by the law of supply and demand, the market itself
will determine the price if goods and services. Businesses can
decide which goods to produce and in what quantity and consumers
can decide what they want to purchase and at what price. The prices
of goods and services are determined in a free price system. In
such economy, the government allows and protects ownership of
property and exchange. Government plays an important role as the
protector of property rights and individual liberty. In theory,
market economy is completely different from practical market
economy. However most developed nations today can be classified as
mixed economies, they are often said as market economies because
they allow market forces to drive most of their activities,
typically engaging in government intervention only to the extent
that it is needed to provide stability. It can be contrasted with
planned economy or centrally planned economy, in which government
decisions drive most aspects of a country's economic activity. What
do you understand by Market Penetration? Market Penetration is
basically a strategy to increase the base or market share of the
existing product. It is one of the four growth strategies of the
product market growth matrix defined by Ansoff. It occurs when a
company penetrates a market in which current or similar products
already exist. Market Penetration can be done by the following
means:
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(a) Attracting nonusers of the product (b) Encouraging existing
users to use more quantity of products. (c) Advertisement (d) Mega
sales (e) Lowering prices (f) Bundling Market Penetration can also
be mathematically calculated using following formula Market
Penetration = (sales volume of the product 100) total sales volume
of all competing products. What is a product? A product can be
defined as anything which can be offered to a market to satisfy a
need or want. Here want or need can be different from different
angles. For example if a product biscuit is sold in a market, it is
satisfying the need of stomach of a person and same time maximizing
profit of the company selling the biscuit. In retail product are
called as merchandise. Product can be classified as: 1. Tangible
Vehicle, cloth, gadget etc. 2. Intangible Cannot be perceived by
touch. E.g. sad songs, action movies etc. 3. Branded It carries a
brand name. 4. Unbranded It does not carry any brand name. Note
Goods, idea, method, information, object or service that is the end
result of a process and serves as a need or want satisfier. It is a
bundle of tangible and intangible attributes like benefits,
features, functions, uses etc. that a seller offers to buyers for
purchase. NOTE - Keep visiting for more notes on Marketing. We will
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On the basis of tangibility (a) Tangible goods However in
economics, all goods are considered tangible but in reality certain
classes are not tangible like information. All tangible goods
occupy physical space. (b) Intangible goods - Cannot be perceived
by touch. E.g. information (it is different from services because
final in goods can be transferrable and traded but not services)On
the basis of relative elasticity (a) Elastic goods It is one for
which there is a relatively large change in quantity due to a
relatively small change in the price.
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(b) Inelastic goods It is one for which there is very little
change in quantity due to relative change in the price. Note 1.
Normal goods Elasticity is greater than zero. 2. Inferior goods
Elasticity is smaller than zero. 3. Luxury goods Elasticity is
greater than one. 4. Necessary goods Elasticity is less than one.
Other types: (a) Convenience goods These are easily available to
consumers without any extra efforts. It mostly comprises
non-durable goods. E.g. fast foods, sweets, cigarettes, etc. (b)
Staple convenience goods This type comprises basic demands like
breed, sugar, milk etc. (c) Impulse convenience goods These are
goods which are bought without any prior planning with impulse.
E.g. Candies, chocolates, wafers. (d) Consumer goods These are
final goods that are brought from retail stores to meet the needs
and wants. (e) Emergency goods These are goods that are bought
quickly when they are urgently needed in the time of the crisis.
These are typically distributed at the stores. E.g. Tents,
flashlights, lighters, shovels, umbrellas etc. (f) Specialty goods
These goods are unique or special enough to persuade the consumer
to exert unusual effort to obtain them. It means that they are
bought after extensive research. E.g. Designer clothes, painting,
perfumes, limited edition cars, stunning design, typically
expensive, antiques, diamonds, wedding gowns etc. What is a
customer? Customer can be defined as the recipient of a good,
service, product or idea obtained from a seller, vendor or supplier
for a monetary or their valuable consideration. Types: (a)
Intermediate customer These are who purchases goods for resale.
(b)Ultimate customer These are consumers. What is a Captive Market
? Captive markets are markets where the potential consumers face a
severely limited amount of competitive suppliers Their only choices
are to purchase what is available or to make no purchase at all.
Captive markets result in higher prices and less diversity for
consumers. The term therefore applies to any market where there is
a monopoly or oligopoly. Examples of captive market environments
include the food markets in cinemas, airports, and sports arenas
and food in jails prisons. What is Marketing ? Marketing is the
activity, set of institutions and process for creating,
communicating, delivering and exchanging offerings that have value
for customers, clients, partners and society at large. It is a
function that links consumers, public to the marketer of a product
through information. Here
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the information addresses the issues regarding all aspects of
the products. Products can be tangible or intangible. It differs
from selling because in selling, the main motive remains the
maximization of profit by way of selling a product but with absence
of value but in marketing value is also considered at the par with
profit. So marketing is a integrated effort to discover, create,
raise and satisfy customer needs with values. It is one of the
competing concepts which can be looked as an organizational
umbrella function to benefit the organization with superior
customer value. What is niche marketing? Niche marketing is a type
of marketing in which a narrowly defined customer group is
targeted. It focuses on small segment of consumers who have unique
and similar needs. The market in which this marketing technique is
applied is called niche market. E.g. Blackberry application or
Android application, sports car, luxury cars, internet based
marketing etc. This technique of marketing can be contrasted with
mass marketing. What is Relationship Marketing? Relationship
Marketing is a technique of marketing which involves creating and
maintaining strong ties with customers and other parties like
dealers, suppliers, contractors, shareholders, stakeholders,
employees etc. This technique revolves around a concentric chain of
long term relationship. It also includes Partner Relationship
Management (PRM) apart from Customer Relationship Management (CRM).
Its main objective is to find, maintain and enhance the customer
base and mutually long term satisfying relationship.In Relationship
Management buyer and seller continuously improves their
understanding and thus they build up more loyalty towards each
other. The final product of this system is a unique asset that is
marketing network. This marketing technique includes following
steps:
Creating a customer database Identifying key customers Creating
details Getting closer through different channels Maintaining
relationship Advantages of Relationship Management Consistency of
business within the marketing network Long term brand recognition
Easy redressal of customer grievances
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What is marketing process? This is the process, which is
performed by marketing managers using all marketing mixes as and
when required. The marketing process involves the following
variables: (a) The product itself (b) Place for selling (c)
Marketing channel (d) Price These variables combine in a market
offering which the consumers may decide to buy if it provides
satisfaction as per their needs. The marketing process seems to be
very easy in theory However it is very complex one to perform. If
any small change occurs in the marketing environment, the whole
concept of marketing offering and strategy changes drastically.
What is cross selling? Cross selling is the practice of selling an
additional product or service to an existing customer. The
objectives of cross selling can be either to increase the income
derived from the client or clients or to protect the relationship
with the client or clients. The approach to the process of cross
selling can be varied. Unlike the acquiring of new business, cross
selling involves an element of risk that existing relationships
with the client could be disrupted. For that reason, it is
important to ensure that the additional product or service being
sold to the client or clients enhances the value the client or
clients get from the organization. In practice, large businesses
usually combine cross selling and upselling techniques to enhance
the value that the client or clients gets from the organization
(and vice versa). For the cross selling there can be substantial
barriers. Let us see some of them: 1. Presence of multiple vendors.
2. Different purchasing points within an account, which reduce the
ability to treat the customer like a single account. 3. The fear of
the incumbent business unit that its colleagues would spoil their
work at the client, resulting with the loss of the account for all
units of the firm. Let us see some forms of cross selling: Selling
addon services--- is another form of cross selling. That happens
when a supplier shows a customer that it can enhance the value of
its service by buying another from a different part of the
supplier's company. When one buys an appliance, the salesperson
will offer to sell insurance beyond the terms of the warranty.
Though common, that kind of cross selling can leave a customer
feeling poorly used. The customer might ask the appliance
salesperson why he needs insurance on a brand new refrigerator, "Is
it really likely to break in just nine months?" The kind of cross
selling can be called selling a solution. In this case, the
customer purchasing a TV is provided with Direct to home inbuilt
set top box. In this case customer can be relived from purchasing a
set top box to watch different channels.
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Examples of cross selling 1. A CDMA mobile 2.A Life Insurance
company suggesting its customer sign up for car or health
insurance. 3. A television brand suggesting its customers go for a
set top box of its or another's brand. 4. A laptop seller offering
a customer a mouse, pen drive, and or accessories. 5. A shampoo
seller suggesting conditioner of its own company for better result.
What is SWOT analysis? It is a structured planning method proposed
by Albert Humphrey. It is used to analyse the following factors of
an organization: (a) Strengths It includes all the characteristics
of a company which is not with other companies. It needs to be
exploited. (b) Weakness It gives a inside look of the areas where
there is scope for improvement (c) Opportunities It includes
external chances that can be used to improve performance of the
company. (d) Threats It includes external as well as internal
elements that could cause trouble for a project. It can be looming
or sleeping.What is USP in marketing? USP stands for Unique Selling
Proposition. The unique selling proposition (USP) is a marketing
concept that was first proposed as a theory to understand a pattern
among successful advertising campaigns of the early 1940s. It
states that such campaigns made unique propositions to the customer
and that this convinced them to switch brands. The term was
invented by Rosser Reeves of Ted Bates & Company. Today the
term is used in other fields or just casually to refer to any
aspect of an object that differentiates it from similar objects.
So, USP basically provides uniqueness to a particular product. It
impresses a viewer/audience so much that the voice or view of the
Ads buzzes into their ears. For example for this site that you are
using now, I can propose USP tuition till your service. So, through
USP, a seller tries to present his product as a unique one and
better than all other competitive products. It provides an instant
theme for the buyer to purchase the product. What is Upselling?
Upselling is a sales technique whereby a seller induces the
customer to purchase more expensive items, upgrades, or other
add-ons in an attempt to make a more profitable sale. Upselling
usually involves marketing more profitable services or products but
can also be simply exposing the customer to other options that were
perhaps not considered previously. Upselling implies selling
something that is more profitable or otherwise preferable for the
seller instead of, or in addition to, the original sale. In a
restaurant and other similar settings, upselling is commonplace and
an accepted form of business. In other businesses, such as car
sales, the customers perception of the attempted upsell
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can be viewed negatively and thereby affect the desired result.
Some examples of upsales include: (a) Suggesting a premium brand of
alcohol when a brand is not specified by a customer (b) Selling an
extended service contract for an appliance (c) Suggesting a
customer purchase more RAM or a larger hard drive when servicing
his or her computer (d) Selling luxury finishing on a vehicle (e)
Suggesting a brand of watch that the customer hasn't previously
heard of as an alternative to the one being considered. (f)
Suggesting a customer purchase a more extensive car wash package.
(g) Asking the customer to super-size a meal or add cheese at a
fast food restaurant. Techniques A common technique for successful
upsellers is becoming aware of a customer's background and budget,
allowing the upsellers to understand better what that particular
purchaser might need.Another way of upselling is creating fear over
the durability of the purchase, particularly effective on expensive
items such as electronics, where an extended warranty can offer
peace of mind. The vendor can tell that you are only investing not
so much money so, this particular thing cannot be so durable.
Upselling also works with items like cars, where the seller
suggests doing rubber paint inside the chassis to make the car more
durable Read more:
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What is product life cycle management? This management is a process
of managing a product throughout its lifecycle. It starts from its
introduction, growth, maturity and disposal. This management
integrates people, data, processes and business systems. It works
in the following areas: (a) Product system engineering (b) Product
and portfolio management (c) Product design (d) Manufacturing
process management (e) Product data management This management
process basically involves: (a) Conceive Imagine, specify, plan,
innovate (b) Design Describe, define, develop, test, validate (c)
Realize Make, procure, produce, deliver, launch (d) Service
Maintain, support, sustain (e) Dispose Recycle, disposal, retire
What is product life cycle? In the same fashion of our life cycle
i.e. birth, growth, maturity and finally death, a product also
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goes through a life cycle which consists of following stages:
(a) Product introduction/market development this is the stage when
a new product is first brought to market. It can be on the basis of
demand or innovation of a company. In this stage sales are low and
slow. However, thanks to our communication channels and modern
management techniques that at this stage also sales goes up. (b)
Market growth at this stage the demand begins to accelerate and it
takes off. (c) Maturity (d) Disposal What is marketing management?
It is a business discipline which applies different type of
marketing techniques, resources, and trends. The application of
this discipline can vary significantly based on businesss size,
culture and environment. Marketing management employs various tools
like SWOT analysis, product positioning, product differentiation,
value chain analysis, strategic group analysis, statistical
surveys, ethnographic observations, competitive intelligence,
environment scanning etc. So, this discipline is very broad one and
to create an effective marketing management, it is very necessary
for a company to have its elaborated and objective understanding of
its own business model and markets. What is marketing environment?
It is an umbrella term used for forces and variables inside as well
outside the organization which influence the decision of marketing
managers. Marketing environment comprises trends that appear and
disappear and determine the success of the organization marketing
efforts. For better marketing and formulation of a marketing
strategy, it is necessary to scan internal and external marketing
environment variables. Marketing environment can be classified into
three groups: (a) Micro (internal) Objective of the company Finance
Resources like man power, raw material, capital etc. (b)Macro
(external) Technology Economic Social Physical
National/international (c) Market (just outside) Competitors
Intermediaries Suppliers Threats Opportunities What is marketing
mix? Marketing mix is a tool in the hand of marketer, which is a
mixture of several ideas and plans, to promote a particular
product. Different models of marketing mix: Four P model-- This is
also known as producer oriented model. It was proposed by EJ
McCarthy in 1960.
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Elements: (a) Product The thing which is offered (b) Price
High/low, stable/fluctuating (c) Promotion Brand recognition and
positioning (d) Place Convenient for consumers Seven P model It was
proposed by Booms and Bitner in 1981. Elements: (a) Physical
evidence Interior (b) People Human resources (c) Process Quality
Four C model It is a consumer oriented model. It was proposed by
Lauterborn in 1993. Elements: (a) Product Consumer (b) Price Cost
(c) Promotion Communication (d) Place Convenience/channel for
consumers Seven C model Elements: (a) Consumers (b) Cost (c)
Communication (d) Convenience/channel (e) Corporation (f) Commodity
(g) Circumstances Compass model Elements: (a) N National and
international (b) W Weather (c) S Social (d) E Economic Read more:
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