Discuss about the 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 constituted 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.

The business buyer purchase products to make profit. Their buying behavior 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:
The Company 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 types of formalities are needed to make sales.

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Marketing Short Notes on- 'Customer loyalty'

Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring one even more customers. However, that focus is not how one builds customer loyalty. 

One builds loyalty by- 

1. Keeping touch with customers using email marketing, thank you cards and more. 

2. Treating your team well so they treat your customers well. 

3. Showing that you care and remembering what they like and don’t like. 

4. You build it by rewarding them for choosing you over your competitors. 

5. You build it by truly giving a damn about them and figuring out how to make them more success, happy and joyful. 

In short, one builds customer loyalty by treating people how they want to be treated.

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Define Window dressing. How Window dressing works?

Definition of Window dressing
Window dressing is a term that describes the act of making a company's performance, particularly its financial statements, look more attractive than what it is in actual.

A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund's holdings.

How It Works/Example:
Let's assume Company XYZ wants to look attractive to potential acquirers. It might do some window dressing by announcing much higher sales projections, obtaining and holding a lot of cash, or making other announcements that are

likely to raise the stock price, even if only for a short time. The objective is to make a favorable impression on potential acquirers.

Companies are not the only ones to engage in window dressing. Mutual funds do it as well, often by cutting their losses and buying high-fliers (sometimes that are not even in the fund's investment sector) near the end of a reporting period.

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Define Millionaire Deposit Scheme (MDS) with its feature and benefits

Definition of Millionaire Deposit Scheme (MDS)

Millionaire Deposit Scheme (MDS) Account is a time specified monthly deposit scheme for clients where the deposited money will become one million on maturity.

Features and Benefits:
1. Tenor: 4, 5, 6, 7, 8, 9 and 10 year’s term;
 

2. Deposit on monthly installment basis;
 

3. Attractive rate of interest;
 

4. Account can be opened at any working day of the month;
 

5. Monthly installment can be deposited through a standing debit instruction from the designated CD/SB Account;
 

6. Monthly installment can be deposited in advance;
 

7. An account can be transferred from one branch to another branch of the bank;
 

8. Credit facility for maximum of 2 years can be availed at any time during the period of the scheme;
 

9. Allowed to open more than one MDS Account for different amount at any branch of the Bank;

But these features and benefits can be varied bank to bank.

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Explain the four pillars of Marketing 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.

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.

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 require some interpretations. So, it is essential to find out the actual needs and wants of the customers.

Integrated marketing:
When all the company’s department’s 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, and marketing research - must together. Second, marketing must be embraced by the other departments; they must also have to think about customer.

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.

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Explain the states of Demand and related Marketing tasks

Different types of demand are existed 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 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.

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 as, 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.

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.

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The Seven Steps in the Marketing Process

It is natural that people in different situations define marketing differently. However, we will approach the definition of marketing by first learning about the seven steps in the process of marketing. While this process is not always followed, it is important that any student of marketing understand what steps must be taken to be successful in a marketing effort. 

The marketing process can be described in the following seven steps:

A. Understand the market wants/needs of interest

B. Based on relative size and needs of the market, select certain segments of the market that are of the most interest to you and your organization

C. Thoroughly describe these segments based on their individual needs

D.
Create a product or service that will meet the specific needs identified

E.
Communicate the concept of the product or service to the targeted customer in a way that makes sense to the customer

F.
Deliver the product or service to the targeted customer in a way that will be convenient to the customer

G.
Solicit feedback from the customer about how your product or service could be improved to meet the customer’s needs even better

This process is applicable to most situations encountered by those wanting to market a product or service. The process of marketing can be divided into ‘upstream’ and ‘downstream’ activities. That is, steps A through D are all ‘upstream’ activities that should be performed before a product actually exists.

As marketers, we understand that many sellers don’t have the option or input to create a new product or service. However, this e-book is designed for people who want to do marketing the right way. If you must pick up the process after steps A, B, and C have already been performed, realize that some steps have already been done, and you should check to see if they have been done correctly.

Also note that marketing research plays an integral role in each of these stages. That is, the organization that is truly focused on customer needs must be driven by an active research effort.

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Popularity/ Advantages of Savings Accounts

Savings bank accounts are very popular among the general public because of the following advantages:

(a) A savings account can be opened with as little as Rs. 500 only. It helps the people of small means to save for their future.

(b) The balance lying in the savings bank earns some interest. The customer is benefited as his money grows with the bank.

(c) The money lying with the bank is quite safe. There is no fear of theft.

(d) The money can be withdrawn conveniently from the savings account.

(e) The customer gets the cheque book facility if his account is duly introduced by another account-holder and he keeps a minimum balance of $. 1000. It is quite easy to make payment to third parties by issuing cheques.

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Briefly discuss the marketing mix in banking sector in Bangladesh

Recently, banks are in a period that they earn money in servicing beyond selling money. The prestige is get as they offer their services to the masses. Like other services, banking services are also intangible. Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. These intangible services are shaped in contracts. The structure of banking services affects the success of institution in long term. Besides the basic attributes like speed, security and ease in banking services, the rights like consultancy for services to be compounded are also preferred.

Price:

The price which is an important component of marketing mix is named differently in the base of transaction exchange that it takes place. Banks have to estimate the prices of their services offered. By performing this, they keep their relations with extant customers and take new ones. The prices in banking have names like interest, commission and expenses. Price is the sole element of marketing variables that create earnings, while others cause expenditure.

While marketing mix elements other than price affect sales volume, price affect both profit and sales volume directly.

Banks should be very careful in determining their prices and price policies. Because mistakes in pricing cause customers’ shift toward the rivals offering likewise services.

Traditionally, banks use three methods called “cost-plus”, “transaction volume base” and “challenging leader” in pricing of their services.

Distribution:

The complexity of banking services is resulted from different kinds of them. The most important feature of banking is the persuasion of customers benefiting from services.

Most banks’ services are complex in attribute and when this feature joins the intangibility characteristics, offerings take also mental intangibility in addition to physical intangibility. On the other hand, value of service and benefits taken from it mostly depend on knowledge, capability and participation of customers besides features of offerings. This is resulted from the fact that production and consumption have non separable characteristics in those services.

Most authors argue that those features of banking services make personal interaction between customer and bank obligatory and the direct distribution is the sole alternative. Due to this reason, like preceding applications in recent years, branch offices use traditional method in distribution of banking services.

Promotion:

One of the most important elements of marketing mix of services is promotion which is consist of personal selling, advertising, public relations, and selling promotional tools.

Personal Selling:

Due to the characteristics of banking services, personal selling is the way that most banks prefer in expanding selling and use of them.

Personal selling occurs in two ways. First occurs in a way that customer and banker perform interaction face to face at branch office. In this case, whole personnel, bank employees, chief and office manager, takes part in selling. Second occurs in a way that customer representatives go to customers’ place. Customer representatives are specialist in banks’ services to be offered and they shape the relationship between bank and customer.

Advertising:

Banks have too many goals which they want to achieve. Those goals are for accomplishing the objectives as follows in a way that banks develop advertising campaigns and use media.

1. Conceive customers to examine all kinds of services that banks offer

2. Increase use of services

3. Create well fit image about banks and services

4. Change customers’ attitudes

5. Introduce services of banks

6. Support personal selling

7. Emphasize well service

Advertising media and channels that banks prefer are newspaper, magazine, radio, direct posting and outdoor ads and TV commercials. In the selection of media, target market should be determined and the media that reach this target easily and cheaply must be preferred.

Banks should care about following criteria for selection of media.

1. Which media the target market prefer

2. Characteristics of service

3. Content of message

4. Cost

5. Situation of rivals

Ads should be mostly educative, image making and provide the information as follows:

1. Activities of banks, results, programs, new services

2. Situation of market, government decisions, future developments

3. The opportunities offered for industry branches whose development meets national benefits.

Public Relations:

Public relations in banking should provide;

1. Establishing most effective communication system

2. Creating sympathy about relationship between bank and customer

3. Giving broadest information about activities of bank.

It is observed that the banks in Turkey perform their own publications, magazine and sponsoring activities.

Selling Promotional Tools:

Another element of the promotion mixes of banks is improvement of selling. Mostly used selling improvement tools are layout at selling point, rewarding personnel, seminaries, special gifts, premiums, contests.

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Discuss the regulations that directly influenced on advertising specific financial services

Some of the regulations that have a direct influence on advertising specific financial services are discussed below-.

Advertising Commercial Banking Services:

Advertising of commercial banking services is monitored through the various regulations enforced by the Federal Reserve as well as the Office of the Comptroller of the Currency. For example, the Truth in Savings Actspecifies items of information that depository institutions should disclose about deposit accounts featured in their advertisements. Terms such as the rate of interest, applicable fees, and terms of the deposit such as the minimum length of time that is required prior to withdrawal of the funds need to be clearly communicated to consumers. For credit products, the Truth in Lending Act (regulation Z of the Federal Reserve) dictates that the true cost of credit must be communicated in written form to consumers. Regulation Z also establishes the method to be used to determine the cost of credit and requires that lenders communicate this information in the form of the annual percentage rate (APR).

Regulators may also monitor advertisements to ensure that banks do not exaggerate the extent to which they claim to make credit available to customers as a means for generating leads. In addition, commercial banks, which are ensured by the Federal Deposit Insurance Corporation (FDIC), need to mention their coverage status with the FDIC in their ads and other consumer communications.

Advertising of Insurance Company:

Each state’s department of insurance regulates insurance advertising. The objectives of insurance advertising regulations are twofold. The first objective is to prevent the creation of biases in consumer assessment of the probability of catastrophic events. This objective relates to the established fact that consumers typically are unaware of the risks and probabilities for events for which they purchase insurance products, as discussed in Chapter 2. For example, insurance advertising that bolsters the fear of catastrophic events through dramatic imagery is not allowed. Negative outcomes of disasters should also not be overstated in insurance advertisements. The second objective of insurance advertising regulations is to prevent the creation of inferences that suggest that an insurance company is unusually generous in its payout behavior. As a result, insurance advertisers have to take great care not to exaggerate either the severity of harmful events or their own willingness to payout customer claims. In addition, images of currency and checks should not be included in advertisements for insurance products as they may make consumers infer unconsciously that the insurance company has a high propensity to payout claims and is usually generous.

An additional objective in insurance advertising is to prevent misleading information from being communicated to consumers. Formally, an ad can be considered misleading when it causes individuals with average levels of intelligence to arrive at inferences that conflict with reality. In order to establish if such inferences are a result of the advertisement, formal market research utilizing third-party companies and random samples of consumers would be used. Insurance advertising is further restricted by the terminology that may be used. Terms such as “liberal” and “generous,” for example, cannot be used as they boost impressions of the payout behavior of the insurance company. Similarly, references to words such as “financial disaster” and “catastrophic” are not allowed because they may exaggerate the extent of the harm consumers might face if they do not have insurance coverage. The fact that insurance prices vary from one consumer to the next due to varying risk levels also limits the pricing terminology that can be used in insurance advertising.

Therefore, terms such as “low,” “budget,” and “low-cost” cannot be used.

Advertising, Investment and Brokerage Services:

The advertising of investment and brokerage services is regulated by the SEC as well as the NASD. These regulators require that advertisers ensure that consumers understand that past returns of an investment may or may not be realized in the future. As a result, statements to this effect need to be mentioned in consumer communications, including advertisements in mass media and direct mail. Advertisements for mutual funds must also encourage potential investors to seek the detailed technical information on the fund by requesting the fund’s prospectus. The ads should facilitate such action by providing consumers the necessary contact information.

Additional Securities and Exchange Commission rules should be consulted for the details of information that must be included in mutual fund advertisements. Readers are encouraged to further examine sources specializing in financial services advertising regulations for additional details.

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Explain the different steps in advertising for bank or financial services institutions

Several steps are essential for successful execution of advertising campaigns in financial services. These steps are-

Determining the Objectives of Advertising:

The first step is to determine the objectives of the advertising campaign, reflecting the overall marketing strategy of the company.

For example, the objective of an advertising campaign might be to generate new policies for an insurance product or to increase the level of consumer awareness of the brand or the company. Recognizing and identifying the exact objective of an ad campaign is critical to accurate assessment of its merits and potential. Examples of popular advertising objectives in financial services are target levels for customer inquiries, new policies signed, and advertising recall.

(2) Determining the available Budget

The next step in the advertising process is to determine the budget required to carry out the ad campaign. Often, the required budget is significantly different from what is available, and may be dictated by organizational budgetary constraints. For example, the budget available for advertising a particular financial service might be determined based on a percentage of the total premium revenues generated in the prior year. Clearly, an increase in the intensity of an advertising campaign would require higher budget allocations and may call for the abandoning of traditional budget-setting approaches for advertising. The total budget that is required to execute an advertising campaign is a function of the reach and frequency (and hence the gross rating points) necessary to create consumer response and the cost of media used to secure this level of exposure. The associated dollar figure, therefore, needs to have been estimated prior to negotiations with higher levels of management, in order to ensure the availability of sufficient funds for executing an effective advertising campaign.

(3) Estimating the Return on Investment (ROI):

The next step in the advertising process is to determine the return on investments associated with the advertising campaign. Four items of information are needed in order to conduct this estimation, one of which is an estimate of the lifetime value of an acquired customer. The lifetime value of the customer is the total profit that an acquired customer represents to the company. It is quantified as the sum of the profits associated with the stream of transactions that the customer will undertake with the company over the years. In addition, an estimate of the total number of consumers who will be exposed to the advertising campaign is required. An estimate of the percentage of reached consumers who will eventually purchase the advertised financial product or service is also required.  Clearly, negative return on investment estimates would make the advertising campaign and unlikely prospect for further action.

(4) Developing the Contents of the Ad:

Once the return on investment computation has shown favorable results, the next step in the advertising process is to develop the contents of the ad, as reflected in its execution style and informational content. In this step, the services of advertising agencies that specialize in producing financial services ads are required. These specialized agencies often also engage the support of legal experts who can determine the compliance of advertising content with existing regulations. Often, testing of ad content using small-scale samples, focus groups, or test markets may be needed.

(5) Media Selection:

The next step in the advertising process is to determine the media that will be used. In general, financial services that are more complex and require the communication of detailed information tend to rely on print forms of advertising.

Television advertising, which capitalizes on multiple sensory inputs, tends to be the most effective although often the most expensive. Once the media to be used for an ad campaign has been determined by the ad agency, a media schedule needs to be developed in order to achieve the original objectives of the ad campaign which had been identified. There are specific media scheduling and campaign execution strategies that are most effective in certain forms of financial services. For example, an effective ad-scheduling tactic is to advertise in pulses with heavy advertising in one month, reduced advertising the following month, and a return to high advertising levels in the third month.

(6) Scheduling and Campaign Execution:

There are specific media scheduling and campaign execution strategies that are most effective in certain forms of financial services. For example, an effective ad-scheduling tactic is to advertise in pulses with heavy advertising in one month, reduced advertising the following month, and a return to high advertising levels in the third month.

This tactic tends to result in more sales and higher levels of consumer response than a constant and steady level of ad spending.

(7) Measurement:

The final step in the advertising process is to assess the impact of the ad campaign through formal market research or examination of company records. It is critical to measure and record sales levels and other advertising responses following an ad campaign in order to determine the financial effects of the invested advertising dollars.

Such measures may help fine-tune the advertising strategy of the company and provide estimates for optimizing future advertising campaigns. For direct advertising campaigns, such measures are obtained through the tracking of consumer inquiries following the ad campaign and the use of tracking numbers, which can pinpoint the exact promotional material to which the consumers are reacting. For ads delivered through mass media such as television, radio, and newspapers, the tracking of consumer responses may be considerably more difficult and might require examining aggregate changes in sales for the months following the ad campaign, or the purchase of market research data from specialized research firms.

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