CH1 INTRODUCTION TO MARKETING AND KEY MARKETING CONCEPTS

INTRODUCTION MARKETING ENTRES OUR DAILY LIFE AND INFLUENCES OUR DECISIONS ESPECIALLY OUR SELECTION OF BRANDS AND PRODUCTS WHAT ROLE DOES IT PLAY IN THE BANKING INDUSTRY?

DEFINITION OF MARKETING “PROCESS OF PLANNING AND EXECUTING THE CONCEPTION, PRICING, PROMOTION, AND DISTRIBUTION OF IDEAS, GOODS, AND SERVICES TO CREATE EXCHANGES THAT SATISFY INDIVIDAUL AND ORGANIZATIONAL OBJECTIVES” This definition encompasses 5 key elements of marketing

5 KEY ELEMENTS OF MARKETING IT IS A PLANNIG PROCESS IT INVOLVES THE CONCEPTION, PRICING, PROMOTION AND DISTRIBUTION OF SOMETHING ITS OBJECT CAN BE A TANGIBLE GOOD, SERVICE, OR IDEA IT SEEKS TO MEET OBJECTIVES OF INDIVIDUALS AND ORGANISATIONS IT WORKS THROUGH EXCHANGE PROCESSES

DEFINITION OF KEY ELEMENTS: 1)IT’S A PLANNING PROCESS marketing involves an on-going process of developing plans, executing them, monitoring their results and modifying them then needed 2)IT INVOLVES THE CONCEPTION, PRICING, PROMOTION AND DISTRIBUTION OF SOMETHING Marketers have to design, develop products, set prices, and promote products. This involves the use of the MARKETING MIX (4P’s- product, price, promotion and place)

3) ITS OBJECT CAN BE A TANGIBLE GOOD, SERVICE, OR IDEA This prefers to the term product, which is the central element in which the marketing mix revolves. 4) IT SEEKS TO MEET OBJECTIVES OF INDIVIDUALS AND ORGANISATIONS Marketing seeks to satisfy its own objectives and those of its customers (their needs and wants) 5) IT WORKS THROUGH EXCHANGE PROCESSES Marketing only occurs when a party with a need for a product is capable of offering something of value to satisfy marketers objectives. (exchange must be possible)

Market- group of potential customers Types of markets- product markets, demographic markets, geographic markets and psychographic markets Different markets have different management styles and management philosophies to guide the marketing management One philosophy, that leads to long term marketing success is the “marketing concept” It is the basis for decision making and a guide for effectively managing resources, therefore marketing is an organizational philosophy that influences and directs all operations

FOUR PILLARS OF THE MARKETING CONCEPT CUSTOMER ORIENTATION Marketing-orientated firms believe that its financial objectives will be best served by identifying it’s target market and responding to it’s needs and wants Good products and service quality form repeat purchases and create satisfied customers who become loyal customers

2. PROFIT To reach profit objectives there must be a balance between customer satisfaction and profitability. 3. TOTAL COMPANY EFFORT Marketing concept must become the philosophy for the entire organization. Its important to integrate and coordinate the activities of employees based on: people who work for the business are the business.

4. SOCIAL RESPONSIBILITY Important for banks as they provide a quasi-public service. Banks are expected to play an active, socially responsible role in civic affairs. “consumerism demands that business start out with the needs, realities and values of the customer. It demands that business base its reward on its contribution to the customer.”

EVOLUTION OF THE MARKETING CONCEPT FIRMS DISCOVER/REDISCOVER THE MARKETING CONCEPT WHEN: -sales/market share declines -slow growth -change in consumer buying patterns -increase competition -increased marketing expenses

1. SALES/MARKET SHARE DECLINES Diminishing demand for product/service is the most likely cause of marketing awareness. Commercial banks are losing market share of financial assets to non-traditional financial sectors. 2. SLOW GROWTH Demand for goods and services isn’t infinite. Must search for other related consumers needs that can be met.

3. CHANGE IN CONSUMER BUYING PATTERNS customers wants and needs are not static, constantly changing. Marketers must respond to these changes in order to prosper. 4. INCREASE COMPETITION Causes the 3 points listed above. Which causes a firm to become more marketing conscious. 5. INCREASED MARKETING EXPENSES Marketing consciousness may be the result of budgetary concerns .

STAGES IN ADOPTING THE MARKETING CONCEPT Early 1950’s- premarketing era, customers needs were fulfilled by basic financial service (didn’t need marketing) Late 1950’s- started the use of ad’s and sales promotion techniques. Late 1960’s- improved services to fit the changing of customers needs 1970’s- use of market segmentation to gain an competitive advantage 1980’s- use of strategic business plan as a management tool

1990’s- banking industry mebers joined a movement to provide better quality and customer oriented services- evolution of the marketing concept. Mid 1990’s- new legislation enhancing their ability to compete

IMPORTANCE OF MARKET DEFINITION Businesses define themselves in terms other than marketing oriented. Terms such as; - Product oriented Production oriented Selling oriented Customer oriented

PRODUCT ORIENTED This means the firm is concerned with the product itself- interested in quality Theodore Levitt said since consumers buying habits change, firms shouldn’t define their business in terms of current products being sold, but in terms of the rapidly changing consumer needs that are being met PRODUCTION ORIENTED Firm is more concerned with the method of production- interested in efficiency.

SELLING ORIENTED Define themselves in terms of sales efforts, sales oriented firm convince customers to do what the firm desires (different to marketing oriented) . CUSTOMER ORIENTED Follows the marketing concept, organization strives to meet the needs and wants of their customers. This lead to one-to-one marketing, customers expectations for quality can be categorised into 5 areas:

REPONSIVENESS- want staff to be willing to take care of their needs and want prompt and accurate resolution for any errors that occur ASSURANCE- expect staff to be courteous and competent, want polite and help staff EMPATHY- staff should show a genuine interest in customers wants and needs and should apologize for any inconveniences RELIABILITY- staff must always work to maintain their creditability and dependency TANGIBLES- attention to details makes an impression on customers (well-kept offices)