MARKETING OF BANKING

AND INSURANCE
PRODUCTS
• The term was first academically defined in
1937 when the newly born American
Marketing Association (AMA) asserted:
– “Marketing consists of those activities
involved in the flow of goods and services
from the point of production to the point of
consumption.[2]"
• Adding to Kotler's and Norris' definitions,
the Chartered Institute of Marketing's
(CIM) definition claims marketing to be the
"...management process of anticipating,
identifying and satisfying customer
requirements profitably .
Marketing management ?
• Marketing management ?
• Is the process of planning and executing
the conception, pricing , promotion and
distribution of ideas , goods ,services , to
create exchanges that satisfy individual
and organizational goals.
• For a marketing plan to be successful, the
mix of the four "Ps" must reflect the
desires of the consumers in the target
market
 Types of markets
• Consumer markets.
• Business markets.
• Global markets.
• Non-profit and governmental markets.
 Marketing mix

product price promotion place

Evolution of marketing.
The five distinct concepts of
marketing
• The exchange concept.
• The production concept.
• The product concept.
• Marketing myopia.
• Sales concept.
• The exchange concept.
product exchange buyer-seller.
• The production concept -mass production
and least price.
• The product concept.
improved products , new products
Focused on the quality, design and
quantity of the product
• Marketing myopia.
excessive preoccupation with the product ,
production or selling , ignoring the
customer.
• Sales concept..
as promotional methods are having more
importance ,advertising, personal selling,
discounts ,sales promotion , public
relations etc lies on this.
Selling and marketing
The marketing concept
• The key to achieve the organizational
goals consists of the company being more
effective than its competitors in creating ,
delivering and communicating customer
value to its chosen target markets.
The marketing concept

Target Customer Integrated

market needs marketing

Profits through
Customer
satisfaction
Integrated marketing/Societal
Marketing Concept
Integrated marketing/Societal Marketing
Concept
when all the company’s department work
together to serve the customer’s interests
the result is integrated marketing.
e.g. :sales dept, advertising , customer
service , product mgmt, marketing
research.
Relationship marketing
• building stronger, long-term relationships
with customers
 Top
• Traditional management
organization chart
Middle
management

Front-line
people

customers
 customers
• Modern customer –
oriented organization
chart Front –line people

Middle management

Top management
MARKETING VS SELLING

MARKETING MANAGEMENT
A process of planning and executing the
conception, pricing , promotion and distribution of
goods and services and ides to create
exchanges with target groups that satisfy
customer and organizational objectives.

FUNCTIONS OF MARKETING MANAGEMENT

Analysis
Planning
Implementation
Control
MARKETING SERVICES
 So ,What is it?
• AMA “ Activities , benefits or satisfactions
which are offered for sale or are provided
in connection with the sale of goods”
• Zeithmal and Bitner “ services are
deeds , processes and performances”
• Something that can be bought and sold,
but which cannot be dropped on your foot.
Special Features

?
IMPORTANCE OF MARKETING FOR
INDIAN BANKS

"The relevance of aggressive marketing

in banks has come to the fore as never
before" - M N Goiporia.

CHARACTERISTICS OF SERVICES
Intangibility
Inseparability
Heterogeneity
Perishability
Nature and Scope of services
 Evolution
• Self servicing
• Outsourcing
• Business proposition.
• Until 20th century focus was on product
marketing –support services
• Public sector undertaking /Monopoly
• Until 1970 same principles -manufacturing
marketing of services
• 1980s deregulation of services
 Services sector in the Indian
Economy
• Economic activities – 3 category
–Primary, Secondary, Tertiary
• Share in GDP (Hidden & Unorganised)

–1950-51 – 57% Agri, services -29%, Industry– 14%

–2000-01 – 25% Agri, services – 49%, Industry– 26%
–Annual Growth rate of services highest during 9th
five year plan(1997-2002) at 7.8% ,agri-2.1,
industry – 4.5%
–Social and personal services has the highest growth
rate of 9.1% followed by, financial , real estate and
business services (source : Economic survey, GOI)
 Reasons for growth

• Two major reasons – interim dd from firm , Final dd from consumers

• Development of IT
• Aging population
• Working women
• Increase in Life expectancy (male 68, female -66)
• Change in socio-cultural values
• Advances in product technology
• Economic affluence (NCEAR- no of middle income household on
raise 550million in 2009-2010 , 53million – 94-95)
• Increased leisure time
• Government policies
• Internationalization
• Growth of DINKS
• Attitudinal Change in youth
 Scope of Services

• Insurance • Postal services

• Tourism • Banking
• Health care • Education
• Transport • Telecommunication
• Software • Electricity
BANK MARKETING
Provides services
Aimed to satisfy customer’s needs and
wants
Needs and wants may be non financial in
nature
Competitive element, efficiency and
effectiveness
Organizational objectives are still the
driving force
Commercial objective to make profit
Social Objectives
Essentials for a Banks Success
Cannot exist without customer
Create, win and keep customers
Organizational design should be
oriented to the customer
Deliver total satisfaction to the
customer
Customer satisfaction is affected by
the performance of all the personnel of
the bank.
 Are
Are Banks
Banks truly
truly
marketing-savvy
marketing-savvy and
and customer
customer --
centric?
centric?
• Myth 1 – The larger the range of products, the
more customer-centric

Mythbuster – The range of products has

emerged from being
competition-centric.
• Myth 2 – Better technology (read CRM) leads to
• better customer service.

Mythbuster – Technology
alone does not deliver,
helps people do.
• Myth 3 – Launch a product and the customer will start
• using instantly.
• - Give a customer a card and he will learn how to play
• with it immediately

Mythbuster – Customers need

To be educated too…
• Myth 4 – The only way to get a customer is from
• competition.

Mythbuster – Customers
are not only present
where competition is.
• Myth 5 – Just advertise and - You will sell.

Mythbuster – Advertising will only sell,

Not retain customers.
Myth 6 – No difference between marketing & selling

Mythbuster – “Selling focuses on the needs of the

seller; marketing on the needs of the buyer.
Myth 7 – In the absence of relationships ‘trust’ builds
financial brands

Mythbuster – Trust is not a differentiator at all…

it is the very minimum that the customer expects!!
So
So what
what will
will the
the differentiators
differentiators
be
be ::

• Technology ?

• Brand ?
 Marketing Lessons
OLD New
Product Consumer

Price Cost

Place Convenience

Promotion Communication
Wining companies are those that can
meet customer needs economically and
conveniently and with effective
communication

Services Marketing Mix – 7P’s

Product, Price, Place, Promotion, People, Physical
evidence, Process
PRODUCT
A product is anything that can be offered
to a market for attention, acquisition, use
or consumption that might satisfy a want
or need

PRODUCT PERSONALITY
THE CORE
THE ASSOCIATED FEATURES
THE BRAND NAME & LOGO
THE PACKAGE AND LABEL
PRODUCT CATEGORY
Durability, tangibility and use
Product item, Product Line, Product mix
Banking product
PRODUCT LIFE CYCLE
Introduction, Growth, Maturity, Decline
The product Life cycle operates at three
levels product level, product sub category,
brand level.
Promotion
Role of promotion
Persuasion
Inform
Reminding
Reinforcing
 Promotion mix
Blended Mix of Promotion Tools
Personal
Advertising selling

Sales Public
Promotion Relations

Direct
Marketing
Promotion mix strategies
• Push strategy -Retailer
• Pull strategy - Customer
Factors influencing promotion mix
• Types of product/market
• Buyer’s readiness stage
• PLC stage
Promotion mix integration