basic concepts of marketing - banking study material & notes

7/23/2019 Basic Concepts of Marketing - Banking Study Material & Notes

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Marketing is essentially the process of communicating regarding the value of a product or

service to the customers, for selling that product or service. Therefore, marketing is understood

as an organizational function with a set of processes for creating, delivering and communicating this

value to its customers , and includes customer relationship management that also benefits the

organization.Marketing can be understood from a societal point of view, as the link between

a society’s material requirements and its economic patterns of response to those requirements. It

satisfies these wants and needs by exchange processes and by building long term relationships.Marketing is hence a science of choosing the target markets through thorough market

analysis and market segmentation, as well as understanding the consumer behavior and

providing superior customer value.

The main definition of marketing is often credited to Philip Kotler, who is recognized as

the originator of the most recent developments in the field of marketing.

Some basic terms used often in Marketing are:

Needs:

A need is a state of being deprived of something. Human need is the most basic concept of

marketing. Since, need is a part of human nature, there are many kinds of needs like physical

needs, social needs, spiritual needs, etc. Needs are basically shaped up by the culture,

surroundings, personality, religion.

Wants and demands:

Want is explained in terms of an object which will define the need. For instance, if thirst is need,

then water, cola drink, or a fruit juice may be the want. Or if hunger is need, then pizza, burger,

bread, etc is a want. Wants depend upon the internal as well as external factors. There may be

more than one object that may fulfill a need. This list of objects is called a want-list.

People have various choices from the want-list to fulfill a particular need. However, due to limited

resources, people seek best value of their money. When a want is backed by purchasing power, it

becomes a demand. Therefore, lack of buying power, means no demand. A marketer has to know

of the potential want list of his target market and then make them available the best value for their

money. Note here that, money is required to create and also fulfill a demand. This is the most

fundamental concept of marketing.





Product:

Anything tangible or intangible which is offered to satisfy a need or want is defined as a product.The goods are called tangible and services are called intangibles. The tangible products are physical

products, while the intangible products can only be experienced. For instance, a service of a hotel

can be experienced (hence, intangible) while food in the restaurant in the same hotel can be tested

(hence, tangible).

When products are offered in the markets, they are known market offering. A good market offering

must have a good value for money.

Value & Satisfaction:

It is the fundamental concept of marketing, that when there are many offerings in the market, the

customer makes a purchase based on their perception. The customers estimate the product value

and judge whether the product has the capacity to fulfill their need. In a potential want list there

may be many products, which have potential to fulfill the need and want of a customer. However, a

customer chooses the one which gives him or her the best value for money and satisfaction of

fulfilling a want.

Exchange:Since, the wants that are backed by purchasing power create demand. The demand is fulfilled

through the process of exchange. Exchange is defined as the act of obtaining a desired object from

someone by offering something in return. Barter is a type of exchange. For an exchange to happen,

more than one person are required. people must have something of value to offer each other. Each

of the participants must be free to accept or reject the offer ofexchange. The participants should be

able to communicate with each other about their requirements and also be able to deliver the

products. These are some basic conditions to make an exchange happen. Exchange may be for

profit or also for no profit.





Transactions:

A successful exchange is known as a transaction. Whether for profit or

no profit , an exchange must give some value to the exchange partners.

The transaction is used as an unit of measurement in marketing. The

values associated with transactions are the trade values. A monetary

transaction involves exchange of money for goods or services and a

barter transaction involves good or service for good or service.

Relationships:

As you might be aware, a marketer does not want just a single transaction. The aim is to

continuously make market offerings and incur continuous exchanges / transactions which create

relationships. Today’s marketing is hence , relationship marketing. The focus of marketing is not

merely to get maximum profit from a single transaction but to develop long running relationship

with the customers. A good relationship will be followed by the transactions and also run long term.

Markets:

As we have discussed above, an exchange may take place between two people at the minimum, but

at least three people are required to create a market. In a market there is always some gap

between the supply and demand. There are always many potential buyers and many potential

sellers. This set of potential buyers and sellers makes a market. A market quintessentially needs

competition (with exception of absolute monopoly). A market can be physical or virtual. Nowadays

virtual markets are also considered at par to the physical markets, due to greater access to

information technology.

Short Codes for Marketing Aptitude:

7 P’s of marketing

4 C’s of Marketing 5 M’s of

Marketing

Product

Price

Place

PromotionPeople

Process

Physicalevidence

Customer needs andwants

ChannelCost to the consumer

Communication

Management

Money

Manufacturingmanpower

Market

basic concepts of marketing - banking study material & notes

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