I am still unable to comprehend completely the idea of Marxism and materialism and dialectical materialism etc, I find some of the terminology verbose and unnecessarily complex, can anyone explain it in more simple layman like terms?
Let me give it the old college try.
Marx & Engels believed that all history could be explained as class struggle, the rich exploiters (bourgeoisie) vs. the poor workers (proletariat). They thought that the inevitable outcome would be for the proles to rise up, throw off their chains (capitalist bourgeoisie) and establish a new government, the Dictatorship of the Proletariat.
All wealth would then be distributed to the workers (the bourgeoisie would be eliminated) who were entitled to it because they created it. From then on, products like shoes would be produced by the shoe-making experts and stockpiled. If you needed a new shoe, you went to the stockpile and took what you needed, but no more. “From each according to his ability, to each according to his need.”
Marx argued that although this was inevitable, society would be better off if the revolution was deliberately forced sooner. He thought that the more developed societies were the most likely to have that happen first, like England and USA. He didn’t foresee it happening in Russia.
Oddly, although Marx thought that all history was the result of class struggle, he predicted that once the revolution happened, there would be no more class struggle, since everyone would be living in paradise.
As we have learned, Marx was wrong on many counts. His biggest mistake was to not take into account human nature.
Is this simple enough?
The human nature that says - “If I can get new shoes just by taking them from the pile, and all shoes are pretty much the same, why bother to spend all day slaving in a shoe factory?”
That’s a rhetorical question, right?
Ideally the people who hated the very thought of working in a shoe factory would enjoy growing food or driving the lorries. Therefore each person working at what they are best suited for will ensure that everyone’s needs would be met. Marx was an optimist who believed that everyone would feel fulfilled through honest labor.
As I have come to understand it, Marxism is commentary on how the Industrial Revolution would play out. Western Europe was wrapping its brain around an unprecedented shift in human productivity. If machines and factories could ratchet up productivity exponentially after a slow ramp-up previously - what would happen?
In a New Era of Plenty, the Proletariat could establish a different foundation for governance because power would not be concentrated by those who control scarce resources.
They got it wrong 
I can well remember the predictions that, with the advent of computerisation and automation, we would all be working a 10 hour week by now and spending the rest improving our minds.
I’m not sure what this aspect of marxism is, but Marx also talked about how the class owners controlled or bribed the levers of power and influence to keep themselves in power. The political system, military, police, church, media, educational system, etc are all co-opted and used to either mentally or physically subjugate the proletariat to keep them subdued.
Not only did he not foresee it happening in Russia, the Russian Revolution did not fit in his model. His model called for the proletarian revolution to occur in highly industrialised societies, because that combination of capital and oppressed labour was what would trigger the Proletarian Revolution. The Russian Revolution did not meet those conditions, since Russia was a lightly industrialised state.
So on its first major test of verifiability, the Marxist theory failed.
Lenin then spent considerable time gloss on Marxism to account for the Russian Revolution. The result was Marxist-Leninism, which in turn led to splits in the Communist movement in other countries.
For example, in Canada there are two Communist parties: the Communist Party of Canada, and the Communist Party of Canada (Marxist-Leninist).
But it’s so much more fun to drink and get high and listen to awesome music and boff as much as possible, or to ride around on ATVs and hunt and fish, or sleep, or go swimming, or… 
Or as Marx put it, “communist society…makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind…”
More precisely, they predicted that industrial capitalism (as it existed in the 19th century) would eventually collapse because it was ultimately based on contradictions that would cause it to unravel. That pre-industrial standards of property and trade originally meant for shop owners and artisans didn’t work in an era of giant industrial combines; and that capitalism would ultimately undermine the civil society that allowed it to come into existence in the first place. The working poor in the 19th century were already paupers, and Marx saw it only getting worse until the workers would revolt from sheer desperation, and their occupation of the factories would give them the means to carry the revolution to success.
IOW, Marx and Engels made the mistake of over-extrapolating the trends in their time to asymptotic conclusions. What actually happened was that industrialism made goods and services cheap enough that the “poor” were vastly better off materially than previous generations. Organized labor meant that an industry couldn’t hire and fire at will like Farmer John deciding to let his handyman go. Laissez-faire standards are virtually extinct (to the bitter protest of the Randians). And eventually most western societies decided that they were rich enough to afford basic safety nets for the populace. Note that even the United States today, relatively backward in progressiveness, would be a socialist paradise by the standards of 1880.
One might say that capitalism reformed just barely enough to forestall the Revolution. 
As for “dialectal materialism” and the other philosophical tenets of his writings, I’d have to take a couple of semesters of Philosophy before I could even tell you what it purports to be.
Marx, 1882:“Russia’s peasant communal landownership may serve as the point of departure for a communist development.”
No doubt tl;dr, but here’s an attempt to answer the op.
Marx first insisted that to understand a society we had to understand how it produced, distributed, and consumed goods and services. Before anything else, we have to eat. Different societies produce in different ways. While we tend to see these differences in terms of technology, Marx argued that the way people were organized was more important because people are more important than things.
In many societies, people are organized into and born into classes. Classes are defined by how production is organized. So we have slave societies, where some people are forced to work for others and may be bought and sold as things: we have classes of slaves and slave owners. We have feudal societies, where production is based on the classes of lords and serfs. We have capitalist societies where the division is between employers and employees, or capitalists and workers, or bourgeoise and proletariat. These aren’t the only classes in each of these societies, but they are the main ones when we ask how goods and services are produced.
In each of these societies, one class, numerically smaller, exploits the other. By exploitation Marx means one class does most of the productive work but the other class reaps most of the benefits. That is obvious to most people when we look at slave societies. It is obvious in feudal societies: the legends of Robin Hood and the peasants in The Holy Grail speak to that.
Marx argued that it was also true in capitalist societies, for workers produced more value in a day than they received in pay. If that is correct, then they are exploited. Exploitation means some people develop their lives more fully at the expense of others, a prospect that leads to conflict and historical change, sometimes over centuries, sometimes in sharp moments of revolution. Revolution, however, is not inevitable and does not depend on people being desperate and destitute.
Finally, institutions such as religion and government reflect and protect the status quo. They are not independent of the economic relations of a society. Thus he is called a “materialist”: ideas come from material reality, the world as it is, not just through the process of thought.
Ultimately, Marx’s greatest insight may have been to insist that whenever we talk about ideals and Big Ideas like equality and freedom and justice, we need to assess these not just in terms of politics but also economics. That the two are connected and interact makes him “dialectical”: think yin and yang, opposites in conflict that in fact make up the whole. If this doesn’t seem like much, consider how much political discourse today about liberty and equality and democracy ignores economic liberty and equality and democracy.
Competition between ownership and labor:
It’s all about Labor and exchange. John owns a factory that makes hammers. Fred is one of the 57 employee’s that work there. Fred works 40 hours a week and produces 400 hammers. For every 10 hours worked, 100 hammers are produced. 10 Hammers are produced every hour. Fred is paid $10 an hour. Fred makes 10 hammers an hour. Therefor each hammer costs $1 in Labor to make. This excludes of course of course rent/mortgage for the factory, taxes on the business, material costs, electric bill and other expenses. We are taking about Labor only.
Lets say, for example, that each hammer costs John and additional dollar to make in total expenses. Now the cost of labor and production is 2 dollars. John sells the hammer for 5 dollars making a 3 dollar profit. So for every hammer produced, 3 dollars go into John’s pocket and 1 dollar goes into Fred’s pocket. Notice also that John has been reimbursed for the 1 dollar Labor that he paid Fred by absorbing it into the sales price of 5 dollars. Thus John is exploiting Fred. Fred has no capacity to go and sell the hammer himself so his Labor has been taken from him, the product he produced, and been replaced with a dollar.
And Marx would argue that Fred also had no capacity to produce the hammer: he does not possess the capital to do so and cannot obtain it. If he is going to eat, he must sell his labour to John, or another capitalist. Wage labour is a defining characteristic of capitalism, according to Marx, just as slavery was a defining characteristic of other societies.
Marx saw everything in terms of class. He was convinced that everybody’s primary affiliation was to whatever economic class they were in. And he believed this had always been true and always would be true.
So Marx thought a classless society would be perfect. Without separate classes, people would not divide into groups to struggle against each other. And because he believed everyone worked for the interests of their class, in a society in which everyone was the same class, everybody would be working for the interest of everybody.
Marx, obviously, was wrong in his central premise. History had ample examples of societies which were divided along lines other than economic class. In Marx’s own time, nationalism was growing as a force and clearly outweighed class interests. German workers felt they had more in common with German business owners and German aristocrats than they did with French workers. So when war came it was Germans siding together against French rather than workers siding together against the upper classes.
Marx’s belief in class allegiance was wrong in another even more fundamental way. He failed to see that many people saw group allegiance as a means to an end rather than an end in itself. Regardless of whether the group was an economic class or a nationality or an ethnic group or a religion, many people put their own personal self-interest ahead of the group interest. They were supporting the group because they saw it was to their own individual advantage.
Marx’s classless paradise would have broken down because of this. Marx felt that the removal of different classes would have eliminated any reason for competition. With everyone in a single class, everyone would be working for the benefit of that class as a whole. Which is nonsense. What would have happened is that people would have been seeking to benefit themselves regardless of whether or not their actions benefited the universal class.
It sounds as if Marx pretty accurately predicted the excesses of capitalism and the problems that are inherent in that type of system - excesses and problems that we can still see pretty clearly today. But he didn’t understand how or if the proletariat - the masses - would respond?
It would be more accurate to say he thought they SHOULD respond in one way, but that there was nothing inevitable about how they WOULD respond. He did not believe people would just spontaneously revolt. Thus the need for activism and education. His book Capital may be read as a way for workers to rethink capitalism in the face of all of its defenders. It also has a reference to oral sex. 
This is in the realm of IMHO, but I think that what Marx did not foresee was change, in spite of dialectical materialism, which says that “everything changes.” Instead of workers becoming dissatisfied with their lot, rising up and executing their “masters” in many countries, the workers were able to negotiate better conditions, and the “masters” were flexible enough to make changes, at least in the US. We had more of a negoiation than a clash.
Not that it wasn’t without violence and bloodshed. But it wasn’t a revolution in the Marxian sense, it was an evolution in the economic sense, and might have happened if Marx never existed.
Also IMHO, Marxism/Communism has been a convenient excuse for dictators to justify their control. Think Lenin, Stalin, Castro, and others. Instead of invoking a supernatural being, i.e., “God,” the often-ruthless dictators invoked a political theory that was attractive to the “have-nots,” which incorporated religious aspects.