service marketing in banking sector (2)

8/3/2019 Service Marketing in Banking Sector (2)

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SERVICE MARKETING IN

BANKING SECTOR


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INTRODUCTION

The name bankderives from the Italian word banco.

In fact, the word traces its origins back to the Ancient RomanEmpire, where moneylenders would set up their stalls in themiddle of enclosed courtyards called macellaon a long bench

called a bancu, from which the words bancoand bankarederived.

"banking business" means the business of receiving money oncurrent or deposit account, paying and collecting cheques drawnby or paid in by customers, the making of advances tocustomers, and includes such other business as the Authoritymay prescribe for the purposes of this Act.
http://en.wikipedia.org/wiki/Italian_languagehttp://en.wikipedia.org/wiki/Macellumhttp://en.wikipedia.org/wiki/Macellumhttp://en.wikipedia.org/wiki/Italian_language


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DEFINITION

Bank marketing does not only include service

selling of the bank but also is the functionwhich gets personality and image for bank on

its customers mind.The reasons for marketing

Change in demographic structure: Intense competition in financial service sector:

Banks wish for increasing profit:


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Major Players

Global

JP Morgan Chase

Bank of America

HSBC Citigroup

Deutsche Bank

Goldman Sachs

Morgan Stanley Merrill Lynch

BNP Paribas

Indian

SBI

ICICI

PNB HDFC

Bank of Baroda

Corporation Bank

IDBI UTI


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RECENT INNOVATION &

DATA

Only HSBC and American Express received a AAA creditrating. The highest rating an Indian bank got in the list is AA forState Bank of India.

The top Indian bank in the list is State Bank of India ranked at

69. Its is ranked at 60 in 2008 because the valuation was donefor the group of all the State Banks. Valuation for 2009 is donefor SBI alone.

The next bank in the list is ICICI Bank which is the largestprivate sector lender.

HDFC bank is the 3rd Indian bank in the list.


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Bird View

Name of bank Global loss Indian gain

USB $18billion $15.4Million

Credit suisse $7.22billion $6.4Million

HSBC $9.3billion $666Million

CITIGROUP $9.83billion Rs1,710CR

MORGANSTANLEY

$2.1billion $17.69Million


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India - Strategic Map

ServiceQu

ality

Rural Urban

Low

High

Regional

Citibank

ABN Amro

State Bank of India

ICICI Bank

HDFC

IndusInd Bank

Vysya Bank

Karur Vysya

PNB

Andhra BankCanara Bank

Co-operative Banks

Rural Banks

Bank of Baroda

Bank of India

Stan C

HSBC

Geographical Spread


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MARKETING MIX

PRODUCT/SERVICE:

A product is anything that can be offered to a market forattention, acquisition, use or consumption that mightsatisfy a want or need

Recently, banks are in a period that they earn money inservicing beyond selling money. The prestige is get as theyoffer 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 transferringprocedures.

Besides the basic attributes like speed, securityand ease inbanking services, the rights like consultancyfor services tobe compounded are also preferred.


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PRICE:

The prices in banking have names like interest, commissionand expenses.

Price is the sole element of marketing variables that createearnings, while others cause expenditure. While marketingmix elements other than price affect sales volume, priceaffect both profit and sales volume directly.

Banks should be very careful in determining their pricesand price policies. Because mistakes in pricing causecustomers shift toward the rivals offering likewiseservices.

Traditionally, banks use three methods calledcost-plus,transaction volume baseand challenging leader in pricing of their services.


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PLACE

The complexity of banking services are resulted fromdifferent kinds of place. The most important feature ofbanking is the persuasion of customers benefitingfrom services.

Branch offices use traditional method in distributionof banking services.


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PROMOTION

One of the most important element of marketing mix of servicesis promotion which is consist of personal selling, advertising,public relations, tools.

PERSONAL SELLING:

Personal selling occurs in two ways.

First occurs in a way that customer and banker performinteraction face to faceat branch office. In this case, wholepersonnel, bank employees, chief and office manager, takespart in selling.

Second occurs in a way that customer representatives go tocustomers place. Customer representatives are specialist inbanks services to be offered and they shape the relationshipbetween bank and customer


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Promotion mix

AdvertisingPersonal

selling

SalesPromotion

PublicRelations

DirectMarketing

Blended Mix of Promotion Tools


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You see a gorgeous woman at a party.You go up to her and say, "I'm fantastic."

That's Direct Marketing.

You're at a party with friends and see a gorgeous girl.

One of your friends goes up to her and pointing at you says, "He's fantastic."

That's Advertising.

Cont.


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You're at a party and see a gorgeous girl. You get up and straighten your tie, you walk

up to her and pour her a drink. You open the door for her, offer her a ride, and then

say, "By the way, I'm fantastic."

That's Public Relations.

You're at a party and see a gorgeous woman. She walks up to you and says "I hear

you're fantastic."

That's Brand Recognition.

Cont.


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Cont.

Advertising

1. Conceive customers to examine all kinds of services that banksoffer

2. Increase use of services3. Create well fit image about banks and services4. Change customers attitudes5. Introduce services of banks6. Support personal selling

7. Emphasize well service


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PUBLIC RELATIONS

1. Establishing most effective communication system.

2. Creating sympathy about relationship between bankand customer

3. Giving broadest information about activities of bank.E.g providing all kind of schemes and activitis online,also atthe inquiery counter.

SELLING PROMOTIONAL TOOLS

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

Cont.


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PEOPLE

People are important for bank means as an employeeas well as customer.

For hospitality and customer relations it is veryimportant to focus on people.

It also plays a vital role in quality control, personalselling, and employee morale.


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PHYSICAL EVIDENCE

In Banking the physical evidence is basicallydepends on customers experience,their

feedback.

Here, the core product is the satisfaction of

customer. Another evidence are the leaflets

,broucher,schemes,


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Process :Process determines the efficiency of banking

operations and thus the service quality in a bank.

Tele-bankingATMs

Computerization (core banking)

Plastic Cards


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MARKET SEGMENTATION

Banks should care about following criteria for selection of media.

1. Which media the target market prefer2. Characteristics of service3. Content of message4. Cost5. Situation of rivals

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

1. Activities of banks, results, programs, new services2. Situation of market, government decisions, future developments3. The opportunities offered for industry branches whosedevelopment meets national benefits.


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MARKET TARGETING

Evaluating Market Segments

Selecting Market Segments

Choosing a Market-Coverage Strategy

Targeting Process:[1] Classify the locations according to the service

requirements[2] Select the target group of customer


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POSITIONING

Products can be positioned on specific attributes oragainst another product class.

"Without a position, it is almost impossible to achievea meaningful and sustainable point of differentiation."

Product Differentiation:

Image Differentiation

Location Differentiation

Service Differentiation

Physical Attribute Differentiation

Personnel Differentiation


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Business Process - Transactions

Bank CustomerMFI Agent

Transaction Data

Bank Systems

BC Systems

Cash

Instant ReceiptTransactionstored on card

Transaction Datatransferred viaphone lines

Updates forCustomer

Cash

Bank Branch


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STP

SBI offers to its customers.

DOMESTIC TREASURY

SBI VISHWA YATRA FOREIGN TRAVEL CARD

BROKING SERVICES REVISED SERVICE CHARGES

ATM SERVICES

INTERNET BANKING

E-PAY

E-RAIL RBIEFT

SAFE DEPOSIT LOCKER

GIFT CHEQUES

MICR CODES

FOREIGN INWARD REMITTANCES


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DEVELOPMENT IN MARKETING SCOPE

INTERNAL MARKETING

For personnel of the organization to be considered their own goals andservice situation, values of the organizationare sold to them.

The communication techniques carried out for customers are alsoperformed for the personnel in internal marketing and this twotechniques go together.

For example, the ads that aim creating firms image should beprepared with regarding to audience which is composed of firmspersonnel.


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NETWORK MARKETING

This approach takes the organization as a sequencewhich involves producer and customer that marketservices to each other in the organization.

In this structure, the activities of departments thatcompose organization would be more focused on market.This will also affect the structure of organization.

Cont.


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RELATIONSHIP MARKETING

It was mentioned that close relationship was establishedbetween producer and customerin service sector. Inaddition to this, life cycle of a customer relationship was

also mentioned under the product outline.

According to the researchers, maintaining therelationship for extant customer increases the profitoffirms.

It should be emphasized that this fact has an importancefor service sector.

Cont.


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Life cycle of a customer relationship is composed of threestages.

At the first stage, firms try to be well knownand to acquirenew customers.

At the second stage, the connectionbetween customerand bank has been achieved. During the stage, bankintensified their activities on acquired customers and bothof them promises mutually.

At the third stage, these promises are accomplished andthe service is consumed. During the stage, firms faceReality Instants which could possibly achievesatisfaction of customer and continuous relationship.This could be also true for second stage. So, theseinstants should be managed successfully.

Cont.


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List of 17 Indian banks in the global 500 :

State Bank of India ICICI Bank HDFC Bank Punjab National Bank Bank of India Canara Bank

Bank of Baroda Axis Bank Kotak Bank Union Bank of India Indian Overseas Bank IDBI Bank Limited State Bank of Patiala Indian Bank Power Finance Corp Oriental Bank of Commerce Syndicate Bank


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SWOT ANALYSIS.

STRENGTHS

Indias developing economy

Small scale, medium scale,& large scale industries financial support by government,

Providing global market.


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WEAKNESSES

Lack of adequate infrastructure.

Complex information system.


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OPPORTUNITIES

More proactive role from the government of India interms of framing policies.

Allowing entry of more multinational banks into thecountry giving us a global perspective.


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THREAT

Global player can be capture the whole market


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CONCUTION

The banking industry has changed drasticallyoverthe past decade. The banking reforms and theopening of the economy to foreign and private bankshave improved the workingof the public sector

banks.

Increased competition and technologyhaveenhanced the quality of service offered to the

customers and also improved the returns for bankers.

service marketing in banking sector (2)

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