Product Marketing - Summarized Concepts Describing the Roles of the Product Marketer

Peter Drucker, author of Management: Tasks, Responsibilities, Practices, stated that "the aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself". IT marketing agencies, whether as a department within a larger company or a private company altogether, have a responsibility to promote products specifically related to the IT industry. It has been proven time and time again that market-driven technology companies are more profitable than those not driven by the market. In these types of organizations, marketing managers are the center pieces that connect the programming or development teams, advertising teams, and sales teams. Managers in IT marketing agencies accomplish this by identifying and quantifying market needs, and then they rely on the product development team to find a solution for that need. The advertising team communicates the newly discovered solution through promotion, and the sales representatives assist the customers through the purchasing process. The position of the marketing manager is critical in the product development or re-launch cycle and involves an intricate system of research, analysis, strategizing, planning, and execution.

The first step for the marketing manager in IT marketing agencies in the product development cycle is to perform an extensive market analysis, both in quantitative and qualitative formats. Research should focus on the competition, the market, the specific product, and the customers. The marketing manager must fully understand the competition and where each competitor is positioned in the market. With that information, he or she would need to ask whether or not the company can distinguish itself in the market and articulate that distinction clearly to customers. Marketing managers often use a tool called SWOT (strengths, weaknesses, opportunities, and threats) analysis. This tool is helpful in determining the company's and competitors strategic positions in the marketplace. Additionally, this tool will assist the marketing manager in identifying potential unmet needs or problems that customers currently face in the industry. In doing so, the marketing manager could potentially uncover additional products or services the company could offer to position themselves more strategically in the market.

Research conducted by IT marketing agencies should also focus on specifically what customers think about the company's products. To find this information, companies can conduct qualitative and quantitative market research. Oftentimes, quantitative market research can be done through third party vendors who specialize in collecting and compiling data from the market about a company's product. Often, quantitative research involves analyzing the performance of the product through predetermined ratios or data (profit, sales in comparison to competition, customer satisfaction surveys, determining percentage of market share, etc.). Qualitative research should be done in-house by IT marketing agencies or departments within a company and typically involves asking open-ended questions about the industry, product, company, and competitors to gather more information about the product line and its position. For example, the customer could be asked which company they look to in identifying market trends or why they chose to purchase a certain product.

Once the analysis of the product, market, competition, and company is complete, a strategy for the product should be formulated by the managers in IT marketing agencies using the data collected. The goal should be to find the type of solution that requires the least amount of investment in technology but has the greatest positive impact on fulfilling the customer's needs. Whether a product is new or existing, certain decisions will have to be made in this step using the information compiled in the research phase. It is at this point that pricing decisions are typically made and managers determine what pricing would be effective based on the target market position and competitive analysis. The development, marketing, and sales teams must fully understand the price and how it was calculated. They must also understand the inherent value of the product and why customers should be willing to pay the decided-upon price. A report should be compiled by IT marketing agencies that articulates clearly the lessons learned from the data collected and the target goals for market position, revenue, and market share. The risk of the investment or product modifications should be clearly defined as well, with targets for potential gains and potential losses based on price point and sales forecasts. Additionally, the decisions made in the strategic write-up should include statements about how the company will produce the new or re-launched product and the benefits/drawbacks of those choices. Buying a simple technology versus partnering with an outside company to build the product, for example, will have large impacts on the future decisions of the company and its strategic position. In making these decisions, core competencies should be considered along with strategic position and cost of investment.

After the overarching strategy is defined clearly and understood by the entire product development team, a firm plan for execution should be developed. This plan should clearly describe what problems the product will solve, what the position of the product is in the market, what the value of the solution is, and what makes the product unique. Next, a sales process should be defined that will fit with the product type market position, and customer expectations. Marketing plans should be developed and should define how the company is going to reach potential customers. Existing customers, potential customers, and competitors' customers should all be considered when creating a marketing plan. Marketing managers in IT marketing agencies should also consider the marketing mediums through which information will be passed and which will have the highest impact on sales. Additionally, marketing managers should include in this plan a process for customer retention and ensuring customer satisfaction. This is especially true if the product relies on recurring revenue or product upgrades/add-ons. A specific "launch" plan should be laid out that defines how the product will be revealed to the public and how the product will be launched within the organization. Included in the launch should be definitions of who the stages of customers will be. Who are the "early adopters" in the market, and how can we tell them about our product? How can we provide a platform for the early adopters to promote our product once they have used it? Finally, product marketing managers in IT marketing agencies should partner closely with technical managers to make sure that staff is well-versed in the market research. It is important that the technical sales force understand the technical background of the product and also the market data compiled. In being trained on this information, the technical staff will be better equipped to describe the product benefits as perceived by the market. Since the relationship between the product marketing manager and technical managers should be strong and effective, the marketing manager should have a clear technical background. He or she should be able to follow the technical manager when conversing about the details of the product development process and should be able to understand and describe technical concepts.

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Introduction To Internet Marketing

Internet Marketing

The continuous and rapid revolution in the advancement of modern era has made every thing so comfortable for everyone and that is the reason why most of the people are fancy to use Internet because of its reliability, speed & performance. Along with message delivering through e-mail, seeking information through searching and browsing, a lot of people are using Internet for online shopping or ecommerce, which have evolved the field of Internet marketing and internet marketing exporters have found an proficient way to find their potential customers.

"The dot.com world was about coming up with an interesting idea and finding unknowledgeable investors to throw at them. But we are now back to live in the practical world, where technology can provide business with an edge over their competition" (Richard Greenwood)

Marketing is actually the craft of connecting different producers (or potential producers) of product or service with prospects, both existing and potential. Marketers basically use four variables while writing marketing plans and making market strategies. They are sometimes referred to as the four P's (which are Project, process, people & product). The combination of these variables is referred as Marketing Mix. A marketing mix is the combination of these four variables in a way that will meet or improve organizational objectives. A separate marketing mix is usually crafted for each product offering. Whenever a strategies or plans are build it engages a blend of these four combinations. A strategy of selling expensive beneficial products in discount stores has poor coherency between distribution and product offering.

Drawbacks of Internet Marketing The actual size of the market is usually not available Difficult to get demography and penetration figures Coverage is not consistent There can be lack of authority There is no certain control, which causes lack or reliability

Benefits of Internet marketing · Easy, less expensive and comfortable access to the information · Most of the information is free · There are numerous web sites available through which the required subject can be covered efficiently. · Contains a lot of background information · Information can be found in a very short time · Has a broad geographic scope · Briskly improving and increasing · Many companies are interested to add their own web pages

Non-stopping development of business online has also augmented the field of online marketing. Before starting any business the most important element, which have the most considerable influence of the success or failure of the business is the initial business idea. For the success of any business there must be a proper business idea along with appropriate techniques to run the business accordingly.

The precise approach towards the Business The business plan for any organization consist of three main parts which are

1. Product 2. Targeted Market 3. Unique Selling proposition (USP)

Product The product is any thing for which you are going to charge your customers. These are the things which you are selling and it can be any thing like books, e-books, electronic items, software to download, it can also be a membership of any online community, a professional service, or any thing else which you are interested to sale. The 'value' of the product is its most valuable feature. The product you are selling should have the following characteristics · It should be beneficial for the customers · It should be good enough to solve the customer's problems · Full fill their requirements · The product should satisfy the customers

Targeted Market The Targeted market for any business is the audience and the customers to whom the product is being sold.

Even if their analytics provider doesn't partner with a search or e-mail provider, many marketers are now using their Web analytics package to make decisions about their overall marketing plan-and their business in general. (Karen J. Bannan)

Following are some essential points to keep in mind while selecting the targeted audience · The targeted market should have an appropriate size · It should be large enough to generate a good profit · It should be small enough to fit in the total resources of the business · If the business is small then it should avoid contending with comparatively large business · The targeted audience should be easily reachable on the internet through the particular websites.

USP (Unique Selling Proposition) The USP is basically the market strategy or the motive of the business through which the corporation is connected with the targeted market. It is the most important part of the business idea in which the corporation decides how to persuade the customers and letting them know that how our product is different from any other item on the shelf waiting to be sold. It should influence the customers and provide them with the reasons that why our product is the best solution for their requirements. When we talk about the profit margin, then it may not necessarily be the financial profit only; there can also be many side advantages, which are essential for running the business smoothly.

Establishing your business on Internet Nowadays Internet is not just a source to get information but it is also a very effective place to run you business. Many people are doing their business on internet and even more people are willing to join them. But unfortunately all of them do not get success and there are also many dot-bombs or fail e-commerce startups. This is because of the lack of awareness about the self-education before starting the business.

The best thing about establishing an internet business is that, there is no big investment required to start an e-business, so if the business is don't in a proper way so you can get a good profit without investing too much.

Understanding of Customers For the progress of any business, it is essential to have a good understanding of the customers. This issue becomes even more vital when we talk about the online business, where we mostly have no idea about the customers.

Due to this fact, large corporations are spending millions of dollars on marketing research to get as many information as possible about their customers, which allows them to improve their product and make them according to the appropriate requirement of the customers. Although this research is help full but if the business is so this expense can be avoided. "They will try to replicate the in-store experience on many levels, developing applications that enable users to see how something will look on someone. The challenge is to develop applications that simulate the in-store experience while still maintaining the speed, convenience and efficiency of the Internet" (Speicher, GCI) It is important to have a sound knowledge of different ways by which customers buy their products. Few points are important in this regard

· Vendors should design their offerings to meet the appropriate needs of their customers. · Venders can persuade buyers at decisive steps during the buying process. · Venders can provide the additional offers for further business.

Trends & Strategies to boost sale in Internet Marketing

Vivid Word Pictures When developing the advertisement of your product, web pages or other or other sales tools, some vivid word pictures should be used to give a pleasant feeling to the customers. It exaggerates their desire to have it and prompt them to buy the product.

Use of appropriate advertising and marketing methods There should be a continuous observation to the advertising and marketing method of the business which ensure the use of latest advertising methods and some old methods which have not been tried.

" eBay says it reaches 56.1 million active users. The obvious drawback: A vast majority of those users aren't in the real estate market. But to reach those who are, eBay is a tool--like direct mail or news-paper advertising--that some practitioners are using to market listings, drive traffic to their Web sites, and attract new prospects."

Cost of the ads If there are some ads allied with any business then it should be carefully examined that if the size of the ads is bigger then it should be reduced to run more ads for the same cost.

Some times the short ads can provide even more response then longer ads and can provide with a bigger return of the cost.

Postcards advertisements There can also be another effective way of advertising by printing a good small ad on a postcard and then send it to the targeted market. People often read postcards if the message is nice and short. This small ad on a postcard can be very effective at times and can make a very rapid change on the sale of the products.

Inspiring words & phrases Lively words and phrases in the advertisements and sales copies make people interested in the product. Try to find some dull sentences and replace them with some active and lively words to obtain the involvement of the prospects.

Eradicate the fear of lost In the manner of revealing the benefits of your product to the customers the other important aspect is to tell them what they lose if they do not buy that specific product. Consumers want any product because of the benefits it offers and on the other hand if they have been told the downside of not buying the product so it will persuade them even more for purchasing that product.

Use of surprise strategies To remove the last minute hesitation, any surprise or pleasant announcements regarding the product also helps influencing the customers to buy the product. The surprise can be any unexpected bonus or additional benefits just before the completion of concluding action of the sale.

Use of special packages For getting a boost in any business the vendors can also introduce some special packages, which combines two or more related items and set a lower prize as compare to each item. These sorts of packages leave a good impact on discount hunters and procrastinators.

Promoting the business sales to new prospects and existing customers Every business always hunts for new customers for intend of improving their sales. But the auction from the existing customers of the business should not be overlooked. It is much easier to get further business from them rather then depending on new prospects. Additional benefits, products and services should be offered to the current customers to get more sales from them.

"As a result of our exposure on eBay, we can attribute two sales, one listing, approximately three good prospects per month, and about 700 visitors per day to our Web site," (Christopher Walker)

Receiving appreciation from the customers is always good for the motivation of any business. The same sort of respond should be provided for such customers, which induce them to do more business.

Hype the product by the help of customers Often the existing customers of your business can be an important asset for capturing a better market of your product. Incentives can be provided to the customers to let them introduce your products to their friends. Assistance from them can increase the sale of the business in a great deal with out wasting much of the money in ads.

Internet Marketing Through E-mails Email marketing is one of the most influential marketing tools accessible to businesses of all sorts and sizes. No matter how you define success, you can achieve outstanding results with Email marketing while investing only a small amount of time and an even smaller amount of money.

"54% of small businesses surveyed rated Email as the top online promotion to drive site visitors and customers to their web sites and storefronts." (Experts of small business) Following are the key benefits of Email marketing

1. Economical Email marketing is a reasonable & affordable way to stretch a limited marketing budget. Unlike direct mail, there is virtually no production, materials or postage expense.

"This information has been only available to big businesses who had research and marketing departments, companies like American Express, Now any business can have it." (Bill Chasse)

2. Effectiveness Email marketing allows active communication with existing customers and prospects instead of passively waiting for them to return to your web site or storefront. Emails can easily be targeted by source, interest, or list. In general, Email communications sent to the prospect and customer lists, and it improves the ROI of all lead generation and customer relation programs, single-handedly.

3. Instantaneous response Email marketing has two great advantages over other marketing vehicles. First, with the existing and easily obtainable self-service tools, anyone can generate and send compelling Email newsletters, promotions, announcements or more in hours or days. No agency or production time is necessary to create and send professional communications. Second, Email marketing generates an instantaneous response. The call to action is apparent: "Click here to take advantage of this offer", or "to learn more about this service", or to "attend this event".

4. Quantifiable results Unlike other vehicles for marketing, results from Email campaigns are easily measured. Results are reported in terms of "opens", which report the number of people saw your offer or newsletters, Click Through Rates (CTRs), which measure how many people actually clicked on the links in your Email, and in a many cases, who actually clicked on those links.

5. Uncomplicated For small and medium business there are web-based Email marketing products. Most of them include professional HTML templates, list segmentation and targeting capabilities, as well as, automatic tracking and reporting. So, you are free to concentrate on your unique message while the rest has already been done.

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Your Company Need More Marketing? Or Just Better Marketing?

Many sales problems can be solved by improved marketing. Selling harder is often not the solution. More . . . or just better . . . marketing may be what's needed. Marketing presents a special problem for any company that has not yet developed a professionally staffed marketing department. This article looks at the various marketing functions. It describes some successful approaches to determining when to add "more" marketing to your company.

In The Beginning

Most successful companies grow from a small enterprise based on the founder's idea or vision. In the early stages, the founder usually plays many roles. It's common to see a founder handling engineering and/or sales roles. As the company succeeds and grows, many of these tasks are delegated to others.

The one area most often key to the long term success of the company is the function of marketing. This article covers:

• The marketing functions
• The problems they can prevent or solve
• The contributions you can expect from marketing

Marketing: The Difference Between Buying And Selling

The definition of marketing has been attempted by many authors. It is commonly referred to as the process of relating the potential customers' needs and wants to the company, and then addressing the company's solutions to meet those needs and wants back to the marketplace.

We have described marketing as the process of focusing on Who the customer really is, and What the customer is actually buying from you . . . rather than what you're selling. What customers can buy from your firm . . . that they cannot buy from another . . . is the real reason they do business with you.

The marketing functions within your company that support this work can be divided into product marketing and marketing services to support demand creation and sales. Both functions are necessary to have an effective marketing effort. However, they are distinct. How much of each you need . . . and who should perform these duties . . . are important issues.

What Is Product Marketing?

The classic definition of product marketing includes the issues of product, price, promotion, and sales channel (place). The concept of product marketing holds true whether your company is a "product" or a "service" company. In the case of a service company, your "product" is the service provided.

To succeed, these product marketing issues (product, price, promotion, and place) must be handled so they are effective from the customer's point of view. In the beginning, these issues are usually a key part of the founder's vision. When the company succeeds, they often become too complex . . . and too important . . . to be handled part-time, by the chief executive.

Product marketing works over two different frameworks, each important, and fundamentally very different. These two areas are strategic and tactical.

Strategic Marketing

Strategic product marketing is the future component of the marketing problem. Strategic issues include:

• What business is your company in?
• What business should you be in?
• What products or services should be designed and offered?
• What technical capabilities need to be developed within the company or acquired from outside the company?

Other related strategic issues include:

• Marketing channel strategies (How do you reach your customers, then sell and deliver the goods?)
• Competitive positioning (What sets your company apart in the minds of your customers?)
• A complete understanding of, and ability to communicate to customers, What they can buy from your company that they cannot buy from any other company.

The strategic role requires a person who is a generalist, with a broad view of the market, the industry, and the company. This is the role most usually maintained by the founder/CEO. Portions of this strategic function may be provided by a senior marketing manager or by outside consultants.

Tactical Marketing

Tactical product marketing deals with issues that relate to the success of current products or services. These include:

• New products or services introductions
• Promotion of existing products
• Development of marketing programs and literature that are effective in reaching the customer
• Communicating the unique position that separates your company from your competitors
• Ensuring that the sales channels are being used effectively to reach customers

The development of tactical plans is a product marketing function. The execution of some of these tactical items may be accomplished by marketing services, as described next.

The tactical role requires a person with the desire and skills to "get it done." Both tactical and strategic roles require great communications skills, and the ability to deal successfully with a wide range of peo-ple, both inside and outside your company.

What Are Marketing Services?

Marketing Services executes tactical marketing programs. This may include sales contests, public relations, advertising, trade shows, dealer programs, direct mail campaigns, etc. This function manages or provides the creative, and produces items such as brochures, advertisements, press releases, trade shows, etc.

There is obviously an overlap between tactical marketing and marketing services in the area of defining and planning these programs. A senior, experienced, marketing services professional may be able to perform some of the functions of tactical marketing. Unfortunately, many times we place an excellent marketing services person in a position which really is tactical marketing . . . and the results are not satisfactory.

Marketing Services' function is to create and manage the tools, support materials, and collateral that tactical marketing has determined necessary to effectively implement the programs designed to achieve the strategy.

Skilled marketing services professionals have excellent input regarding these tools and materials to assure effective results. Asking them to perform the tactical product marketing function is quite another thing!

What Do Marketing Problems Look Like?

Sometimes it's easy to see a marketing problem. One example of this is a stalled product.

You've spent many months developing a new product and feel sure of its merits in the marketplace. You've introduced the product, but it seems to be going nowhere. What do you need to do to take advantage of your investment and ensure the success of the new product (and perhaps your company)?

• Should you lower the price?
• Should you raise the price?
• Do you need to spend money on advertising?
• Do you need to kick off a public relations campaign?
• Do you need new sales channels, or do you need a program to "kick start" your existing channels?

Obviously some of these issues are tactical product marketing. Some may involve marketing services, or the problem may be fundamentally strategic.

Possibly, you have an unneeded or unwanted product or service. Maybe you have not fully determined what the differences are your product or service provides which are valuable to potential customers.

Another example of a potential marketing challenge is an important new product introduction.

• How do you ensure that you get the best press coverage?
• Should you introduce the product at a trade show? Or with a press conference? Or with a press tour?
• What literature and sales tools will you need?
• Does this new product (or service) fit your existing sales channel?
• What is the competitive environment in which this product will be introduced?
• How should the product be priced and positioned to take maximum advantage of the competitive situation
• What do your prospective customers think of the new product?

Again, some of these problems are tactical and some are Marketing Services. Executing an effective new product launch by relegating the planning and execution to Marketing Services, or worse, to your advertising agency, is a mistake. Given that 90% of new product introductions fail to achieve their sales goals, perhaps it's time to consider that the execution may not be the problem. Perhaps there was never a viable plan.

Sometimes it's more difficult to recognize the problem as belonging to marketing. It can still clearly be rooted there however. An example of this is the conflict between sales and the factory. Often the conflict looks like this:

The salespeople are frustrated. They see opportunity they can't turn into business, and they blame the factory for not listening to them, and for being unresponsive.

The sales person says, "Why don't they hear what I am telling them?" The factory staff in this case is often frustrated with field sales. "Why can't they just sell what we have?", is a common question from the factory.

Are the salespeople just complaining, so you should disregard them? Are the factory people being too "hardheaded?" Or is it possible that a marketing job, clearly defining the position of the product and communication of this to sales, has not been done?

If sales does not know the positioning, you will be getting inconsistent results and information from them. Has this happened to you?

Some marketing problems are easier to identify. You have an idea for a wonderful new product. But,

• What features should it have?
• What is the importance to your customers of each feature?
• Is there something else even more important about which you are unaware?
• How do you tell the story of the product so that you can get your sales people excited, and your customers to buy?

To answer these questions, what do you do? Do you conduct a focus group? Or a user survey? By phone, or letter, or face-to-face interviews? Or just design it, release it, and hope you were right?

The bottomline is that all of the above scenarios describe marketing problems which can be solved with the right marketing talent. Whether that expertise is full-time or a part-time, on-staff or from outside services are trade-offs you make to get the best solution your budget can afford.

Final Thoughts

The key to marketing is to see your company as you are seen by your customers. If you're satisfied with your company's results and feel that the future of your company is secure, then you may have all the marketing you need.

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Car insurance rates for seniors

One of the most authoritative organizations that researches and comments on insurance matters is the Insurance Institute of Highway Safety. A part of its remit is to monitor the general levels of claims and to make informed predictions based on the trends. As the number of boomers reaching retirement age has been increasing steadily, the IIHS suggested there was likely to be a steady increase in the number of claims made by drivers over the age of 75. At the time, this seems a reasonable assumption. As we age, everyone finds their reflexes slow down and their eyesight is no longer as sharp. Yet the IIHS has now admitted it made the wrong call. In fact the number of accident claims involving the elderly has fallen. In the most recent data covering 2009 through 2010, this trend has continued.

So what has happened to throw off the statistical expectation? Well, score one for the medical profession. Even though the cost of medical care has been rising rapidly, the safety net for our seniors ensures they still have access to good quality treatment. This is helping them stay in better shape. Now add in the fact our seniors are more socially responsible. They know they may be starting to lose their edge so they begin to drive more slowly, and avoid driving at night when they may have greater difficulty is seeing. As the mental faculties also come under pressure, they keep to the routes they know well and generally take greater care. The most responsible go through driving courses designed to help seniors navigate our roads with the least risk. Some modify their vehicles to make them safer.

The cheapest car insurance comes through membership of Carfit. This is a project run jointly by a number of organization representing the interests of the aging. The idea is to offer advice and practical assistance to upgrade skills and make vehicles safer to drive. This reflects the reality that the elderly cannot easily adapt to modern life unless they continue to drive. With insurance companies offering the cheapest car insurance rates as an incentive and occupational therapists to advise, there's no reason why seniors cannot continue driving without having an accident.

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Financial Markets - An Overview

FINANCIAL MARKETS - AN OVERVIEW:

In common parlance, a market is a place where trading takes place. Whenever we think about markets, a picture that flashes across our minds is of a place which is very busy, with buyers and sellers, some sellers, shouting at the top of their voice, trying to convince customers to buy their wares. A place abuzz with vibrancy and energy.

In the early stages of civilization, people were self-sufficient. They grew every thing they needed. Food was the main commodity, which could be very easily grown at the backyard, and for the non-vegetarians, jungles were open with no restrictions on hunting. However, with the development of civilization, the needs of every being grew; they needed clothes, wares, instruments, weapons and many other things which could not be easily made or produced by one person or family. Hence, the need of a common place was felt, where people who had a commodity to offer and the people who needed that commodity, could gather satisfy their mutual needs.

With time, the manner in which the markets functioned changed and developed. Markets became more and more sophisticated and specialized in their transaction so as to save time and space. Different kinds of markets came into being which specialized in a particular kind of commodity or transaction. In today's world, there are markets which cater to the needs of manufacturers, sellers, ultimate consumers, kids, women, men, students and what not. For the discussion of the topic at hand, the different kinds of markets that exist in the present day can be broadly classified as goods markets, service markets and financial markets. The present article seeks to give an overview of Financial Markets.

WHAT IS A FINANCIAL MARKET?

According to Encyclopedia II, 'Financial Markets' mean:

"1. Organizations that facilitate trade in financial products. i.e. Stock Exchanges facilitate the trade in stocks, bonds and warrants.
2. The coming together of buyers and sellers to trade financial product i.e. stocks and shares are traded between buyers and sellers in a number of ways including: the use of stock exchanges; directly between buyers and sellers etc."

Financial Markets, as the name suggests, is a market where various financial instruments are traded. The instruments that are traded in these markets vary in nature. They are in fact tailor-made to suit the needs of various people. At a macro level, people with excess money offer their money to the people who need it for investment in various kinds of projects.

To make the discussion simpler, let's take help of an example. Mr. X has Rupees 10 lacs as his savings which is lying idle with him. He wants to invest this money so that over a period of time he can multiply this amount. Mr. Y is the promoter of ABC Ltd. He has a business model, but he does not have enough financial means to start a company. So in this scenario, Mr. Y can utilize the money that is lying idle with people like Mr. X and start a company. However, Mr. X may be a person in Kolkata and Mr. Y may be in Mumbai. So the problem in the present scenario is that how does Mr. Y come to know that a certain Mr. X has money which he is willing to invest in a venture which is similar to one which Mr. Y wants to start?

The above problem can be solved by providing a common place, where people with surplus cash can mobilize their savings towards those who need to invest it. This is precisely the function of financial markets. They, through various instruments, solve just one problem, the problem of mobilizing savings from people who are willing to invest, to the people who can actually invest. Thus from the above discussion, we can co-relate how financial markets are no different in spirit from any other market.

The next issue that needs to be redressed is what is the distinction between various financial instruments that are floated in the market? The answer to this question lies in the nature or needs of the investors. Investors are of various kinds and hence have different needs. Various factors that motivate investors are ownership of controlling stake in a company, security, trading, saving, etc. Some investors may want to invest for a long time and earn an interest on their investment; others may just want a short term investment. There are investors who want a diverse kind of investment so that their overall investment is safe in case one of the investments fails. Hence, it is the needs of the investors that have brought about so many financial instruments in the market.

There is one more player in the financial market apart from buyers and sellers. As stated above, the one who wants to lend money and the one who wants to invest the money may be situated in different geographical locations, very far from each other. A common place for this transaction will require the meeting of these persons in person to close the transaction. This may again result in a lot of hardship. It may also be the case that the rate at which the lender wants to lend his money or the duration for which he wants his money to incur interest, may not be acceptable to the borrower of the money. This would result in a lot of glitches and latches for closing the transaction. To solve this problem, we have a body called the Intermediaries, which operate in the financial markets. Intermediaries are the ones from whom the borrowers borrow the harbored savings of the lenders. Their chief function is to act as link to mobilize the finances from the lender to the borrower.

Intermediaries may be of different kinds. The basic difference in these intermediaries is based upon the kind of services they provide. However, they are similar in the sense that none of the intermediaries are principal parties to a transaction. They merely act as facilitators. The kinds of intermediaries that operate in financial markets are:

• Deposit-taking intermediaries,
• Non-deposit taking intermediaries, and

• Supervisory and regulatory intermediaries.

Deposit-taking intermediaries are those that accept deposits from a principal. They accept deposits so that the deposits can be utilized for the purpose of advancing loans to the persons who are in need of it. Example - Reserve Bank of India, Private Banks, Agricultural Banks, Post Office, Trust Companies, Caisses Populaires (Credit Unions), Mortgage Loan Companies, etc.

Non-deposit taking intermediaries are those which only manage funds on behalf of the client. They act as agents to the principal. They merely bring together the borrower and the lender with similar needs. Unit Trusts, Insurers, Pension Funds and Finance Companies are an example of this kind of intermediaries.

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