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Market
Market
Market
Marketing
Introduction
In the most simple and non-technical language marketing
may be defined as a business function entrusted with the creation and
satisfaction of customer to achieve the aims of business itself. Thus, the
term may be logically broken down as follow:
MARKETING MIX
d) Product servicing
2 Place: Physical distribution is the delivery of goods at the right
time and at the right place to the consumers place mix includes the
following variables:
a) Types of intermediaries available for distribution
b) Marketing channels available for distribution
A marketing manager has to select a channel which is convenient,
economical and suitable for the distribution of specific product.
3 Promotion : Promotional activities are for encouraging retailers
and dealer to keep the stock of company’s product and also for
encouraging consumers to purchase company’s products due to
various plus points. Promotion mix includes the following
variables:
a) Advertising and publicity of the product,
SERVICES MARKETING
SERVICES
A service is an act or performance offered by one party to
another. They are economic activities that create value and provide
benefits for customers at specific times and places as a result of bringing
about desired change in or on behalf of the recipient of the service. The
term service is not limited to personal service like medial service, beauty
parlors, legal services, etc. According to the marketing experts and
management thinkers the concept of services is a wider one. The term
services are defined in a number of ways but not a single one universally
accepted. Following are some of the definitions:
CHARACTERSITICS OF SERVICES:
Services have different types of characteristic are mentioned
below:
INTRODUCTION :
The marketing mix concept was popularized by an American professor
Jerome McCarchy in terms of 4Ps – product, price, promotion and place. The
major part of marketing after considering the environmental variables is
assembling and managing the marketing variables. The most important task is
to blend the 4 elements in different combination in order to have a greater
marketing impact and also to be cost effective.
Some modifications in the 4Ps are required when applied to service due
to some special features of services.
7 Physical Evidence :
Generally a service transaction involves the transaction of the
service provider with the customer in a service environment. Services like
hotel services and hospitals are delivered in physical environment created
by the service firm.
Physical evidence is termed as the social environment along with
the tangible cues. Zeithami and Bitner defines physical evidence as “ the
environment in which the service is delivered and where the firm and
customer interact; and any tangible commodities that facilitate
performance communication of the service”.
Physical Evidence includes all the efforts taken by the service
provider to tangibilise their services, they includes:
a) Physical facilities
On the other hand the small investors, the banks stable depositors,
have now become more of borrower to have more financial muscle for
their investing ambition. Though it may prove to be temporary, in the
first instance banks lost their deposits from a section where it was least
expected.
Marketing came into banks in the late 1950s not in the form of
marketing concept but in the form of the advertising and promotion
concept. Soon, however, it was realized that marketing transcends
advertising and friendliness. In 1960s bankers attitude towards marketing
flourished and in 1970s the bank marketing profession changed
dramatically. In the decade, banks throughout Europe have found it
necessary to introduce marketing function as a response to an
increasingly competitive market place. The quality, integration and
effectiveness of these functions naturally vary somewhat between banks.
Since then, with support from ABA the member banks achieved
significant progress in marketing function in America. By 1970 there was
a formal marketing department in 55 percent of the banks with deposits
over $ 10 million.
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the process, the population served by a bank office from around 64,000 to
14,000. Deposits grew from Rs. 4665 crores to Rs. 200,569 crores, by
forty-three times, making it almost 48.1 percent of nationalization it was
a mere 15.5 percent. Similarly credit increased from Rs. 3599 crore to Rs.
121,865 crore, by about 39 times. Though all these growth in the banking
sector was due to the compulsions imposed in the banks and socialistic
policy guidelines of the government, emphasis on marketing was also
observed in those days. As banking moved from class banking to mass
banking it picked up the concept of marketing using it synonymous with
‘selling’. The first major step in the field of marketing was initiated by
State Bank of India in 1972 when it reorganized itself on the basis of
market segments viz., commercial and institutional, small industries and
small business, agriculture, personal and service banking segments. It
was in early 1980s, banks in India started thinking in terms of product
development, market penetration and market development.
Though there was a heavy growth in the banking business in the post-
nationalisation period, there was also a heavy price to pay for these
achievements. Over the years, the productivity efficiency and profitability
of the system suffered. The reasons are many. In reaching quantitative
targets set, either over-enthusiasm on the part of the banker or, as it often
happened, due to pressures political and administrative, quality has been
sacrificed for quantity. Further, to add salt to the injury, populist
measures like loan melas, loan waivers dealt a severe blow to the very
credibility of rural lending and thus seriously affected the credit
discipline amongst the borrowers. Besides the above, the large volume of
directed credit and investment, administered structure of interest rates,
high level of preemption in the form of resource requirements and
detailed direction in respect of operational and administrative matters
In the past, the Banks did not find any attraction in the Indian
Economy due to the low level of economic activities and meager business
levels. Though the SBI was set up as early in the 19 th century in order to
extend credit facilities backward regions remained neglected till
independence.
But when the private sector banks failed in delivering goods to the
society, it resulted in the nationalization of 14 commercial banks in 1969.
With this, a radical change in the banking policy came into being.
On one hand the bankers have to mobilize deposits for the existence
and on the other hand they have to be very liberal in providing credit
facilities to the needed. It is really a challenging the task for the bankers
and therefore new strategies have to be evolved to maintain balance.
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and means have to be found to compete in the future and to survive with
profit and business growth.
The following are some of the vital challenges that threaten the Indian
banking industry.
1. competition from foreign banks and now new private sector banks:
The competition in the Indian banking industry have
intensified with the entry of more and more foreign banks and now
private sector banks, with better technology, market orientation and cost-
effective measures. Financial institutions have also stated entering into
the domain of banks. The share of business of public sector banks has
considerably declined. Hence there is a compelling need for the Indian
banking industry to either change or modify its marketing strategy in
order to attract the customers and also to withstand the stiff competition
from foreign banks and new private sector banks.
2.Technological Advancement :
The methodology of banking business ahs drastically
altered due to advent of technology both in terms of computers and
communication. It has opened new vistas in the banking sector and in
turn ahs brought new possibilities for doing the same work differently
and in a most cost-effective manner. With the help of technology it is
now possible to have 24 hours a day banking and all seven days in week.
New business potentials and opportunities which have remain unexplored
have not opened up with Tele banking, Internet banking and E-banking.
3.Innovation :
Innovation is another importance forced of change in the
Indian banking sector. Now-a-days banks have become innovative and
pro-active and offer top-class service to the customers. They play
dynamic role not only as a finance provider but also as a departmental
store of finance. Due to this new instruments and new products like
factoring, leasing, merchant banking, forfeiting venture capital, corporate
advisory services are emerging. These innovative services may increase
the revenue with cost effective measures.
4.Diversified Activities :
There is a universal trend toward banks diversification
normally through insurance depository participant service, investment
banking etc. Furthermore bank have diversified their activities by
rendering various service like depositing gold, paying, tax liability and
telephone bills and collecting interest on securities on behalf of the
customers.
All these diversified activities have made the banks to
develop and offer consultancy counseling and customer designed
packages for efficient management of funds. The banks traditional roles
as financial intermediaries is gradually assuming lesser importance in
their overall business as the banks diversify their activities and redefine
their roles.
It is important to note that the percentage of non-interest
income in increasing and the interest income of the banks is decreasing.
This shows that the income through service exceeds the income through
lendings.
7.profitability Nature:
Profit is a barometer for judging the performance of any bank.
Profits are needed to meet the expectations of the stake holder, benefit of
employees and also for building capital. Banks have to pay attention to
the following emerging areas in order to protect and enhance their
profitability.
(a) Product development and management skill.
(b) Skills for operating in electronic environment
(c) Modern credit management skill
(d) New risk management practices
8.Corporate Governance:
Corporate Governance play a highly significant role in
corporate governance revolves around enchancing shareholders value, it
has also the responsibility of marketing the banking services by
introducing and producing new products and services.
Introduction
Marketing Approach
The corporate objectives of the bank are to be worked out within the
broad framework of the national policy. The corporate objective are of
two types, Short Term and Long Term.
b) To become the universal bank over the period of next 3 years, etc.
Marketing Strategy
2 Marketing Mix
therefore, all the more necessary to ensure that not only the felt needs but
also the latent needs of the customers are foreseen and satisfied.
Conclusion
Step One:
Choose a Unique Bank Marketing Promotion A well-
publicized exciting bank marketing promotion works to bring in clients
who are new to the community and provides an incentive for those who
are unhappy with their bank to finally make the switch. People enjoy
having fun and winning prizes. Implementing a high-profile bank
marketing promotion that incorporates these activities can be all that is
needed to bring clients through the door.
Step Two:
Determine The Bank Marketing Goal Having a specific goal
for a public promotion can greatly influence its outcome. It is important
to define this goal before moving forward. What is the bank's highest
priority for marketing right now? Increased loan applications? New
checking accounts? Increased deposits? Sometimes the bank's marketing
goal is not that easy to pinpoint. Many times banks are simply looking to
increase overall awareness within the community. If this is the case, it is
important to consider how the population currently feels towards the bank
and specifically what changes are desired. Setting tangible goals allows
the promotion's success to be measured.
Step Three:
Connect The Promotion To The Goal Once the objective of
the promotion and the attention-grabber have been chosen, it is now time
to tie them together. Let's assume a cash cube money machine was
selected as the incentive. If the primary marketing objective was to
increase new checking accounts, then every new checking client will earn
the opportunity to step into the cash cube to win hundreds or thousands of
dollars worth of real cash or custom imprinted vouchers that represent
cash or prizes. Based on the bank's marketing budget available, the cash
and prizes can be altered to meet any needs. Prizes may include anything
from cash, checking incentives, savings bonds and CD's to pizza coupons
and sporting tickets.
Step Four:
Utilize Traditional Bank Marketing Most banks still rely heavily on
traditional marketing to advertise their specials and rates. When a special
promotion such as a cash cube in the lobby is introduced, it is important
to use newspaper, radio and other advertising already in place to cross-
promote the event. Existing ads can be altered to include the phrase "Stop
in today for your chance to grab cash and prizes in our cash cube!" Using
Step Five:
Take the Promotion on the Road Participating in community
events is a great way to gain exposure and promote that "neighborhood
bank" feeling. People like to feel as if they are doing business with a bank
that cares. During the duration of the promotion, check the local calendar
to see if there are any festivals or large community events in which the
bank could participate. The opportunity to have the cash machine in a
public venue will achieve visibility, build brand recognition, and gain
customers. Of course, public events would not necessarily have the same
level of prizes as the cash machine in the bank lobby! That becomes one
more reason for people to come into the bank.
MARKET SEGMENTATION
Definition:
IMPORTANCE OF SEGMENTATION
TO THE
BANKING SERVICES
formulated should have a close link with the emerging trends in the
business environment. The task of formulating a strategic plan is
found challenging. The policy makers need sufficient information
about the different segments so that they succeed in formulating a
strategic plan for future marketing. The professionals are found in
touch with different segments which helps policy planners in
getting the desired information for incorporating necessary
improvements. We are aware of the fact planning is an ongoing
process. To be more specific when we find the market competitive,
it is imperative that we formulate an action plan for the years to
come so that necessary preparations are made. The segmentation
signals the policy planners and the necessary improvements in the
strategic plan can be made possible.
Segmentation strategy:
A strategy for segmenting the market is found significant to make the
segmenting process more effective. The banking organizations need to be
select a strategy which is found helpful to them in marketing
successfully. Three strategy for segmentation are Mass Marketing or
Undifferentiated Strategy, Selective Marketing or Differentiated Strategy
and Niche Marketing or Concentrated Strategy.
1. Mass Marketing or Undifferentiated Strategy : If we find sale of
MARKETING STRATEGY
TYPES OF STRATEGY:
1. Market-leader strategy:
it is natural that the market share of the concerned bank is at the top.
We find a hypothetical structure showing the position of a leader
bank. The bank is leader since in almost all the areas we find it in a
commanding position, such as the interest, promotional measures and
the package designed. The leader is orientation point for the
competitive banks and willingly or unwillingly, they have to realise
the dominance of the leader. While formulating marketing strategy,
leader banks need to expand the total market, market share vis-à-vis to
defend the same. An expansion in the total market is essential to
continue as a leader. This makes it essential that the leader banks are
very punctual while formulating the marketing mix and whatever the
services are made available by them establish an edge over the
followers .for maintaining the position, the banks are required to be
innovative in almost all the areas of the marketing mix. They are
supposed to pay high rate of interest which is not paid by others; they
need to practice innovative advertisement found creative in nature,
they are require to formulate an outstanding mix of services, whatever
the package they developed are superior to all and so on. It is natural
that the dominating banks prefer to remain number one and for this it
is also essential that they find ways to expand total market demand,
they protect its current market share through good defensive and
offensive actions and they always try to increase its market share
though we do not find a change in the size of market.
must first define its strategies objective. The military principle of the
objective holds that every military operations must be directed toward
a clearly defined, decisive and attainable objective. We can’t deny that
the strategies objective of the majority of the market challengers is to
increase the profitability. A number of strategic decisions are found in
the very context:
and launch it. We accept the fact despite such an effort of copying
the product, it is not possible to overtake the leader. We can’t
negate that the follower is in a position to generate more profit
since that organization is not involved in the innovation process. It
is natural that all followers would not challenge the market leader.
DIFFERENT TYPES OF
BANK MARKETING PROVIDE
LOAN
Their interest rates are almost 75-100 basis points cheaper than
private and foreign banks
India, Bank of Baroda and Canara Bank, are offering both fixed and
floating home loan products almost 75-100 basis points cheaper than
private and foreign banks. After the recent rate hike by the Reserve Bank
of India (RBI), the private sector and foreign banks like ICICI Bank and
Standard Chartered have also raised rates to manage the rising cost of
funds. However, their public sector counterparts are yet to join the
bandwagon and are unlikely to react before the quarterly review of the
RBI Annual Policy slated for next month. As a result, public sector
banks, now following the same marketing model like the private sector
and foreign banks, are now offering competitive rates in home loan
segments.
To make life further tough for the private and foreign banks, PSBs
have beefed up their marketing campaign to sell home loan products. For
example, BoB has launched a pilot project in Mumbai, named Project
Parivartan, in which BoB officers are going door-to-door to sell home
loans. This move is probably for the first time that a public sector bank is
going door-to-door to sell their products, initiatives normally associated
with private banks. The project, according to BoB sources, has become a
huge success for the bank and may be rolled out in Ahmedabad and
Chennai this month. The bank has deployed its own resources for this
ICICI BANK
service - rather than interest rate - have been the hallmark of ICICI with
the company capitalizing on the absence of `door delivery' for housing
loans. In a marked shift from the existing industry norms, ICICI carved a
niche for itself by going to the potential borrower rather than waiting for
him to come to them.
HSBC
Has made rapid strides in the home loan segment. HSBC provides
loans for ready property, under construction property, self-construction
and home improvement. HSBC home loans range from Rs. 5 lakhs to Rs.
3 crore and the maximum repayment period can go upto 25 years.
Flexible repayment options of HSBC allow home loan borrowers to
choose between fixed and floating rate home loans. They also have the
option of switching from a floating rate home loan to a fixed rate home
loan once a year at no extra cost. Once the home loan is approved,
customers get a Gold Credit card, free for the first year with annual
charges being waived.
HDFC BANK
Case Study
The origins of State Bank of India date back to 1806 when the
Bank of Calcutta (later called the Bank of Bengal) was established. In
1921, the Bank of Bengal and two other Presidency banks (Bank of
Madras and Bank of Bombay) were amalgamated to form the Imperial
Bank of India. In 1955, the controlling interest in the Imperial Bank of
India was acquired by the Reserve Bank of India and the State Bank of
India (SBI) came into existence by an act of Parliament as successor to
the Imperial Bank of India.
Today, State Bank of India (SBI) has spread its arms around the
world and has a network of branches spanning all time zones. SBI's
International Banking Group delivers the full range of cross-border
finance solutions through its four wings - the Domestic division, the
BROKING SERVICES
Centres with full particulars of the contact persons. All investors can
approach these branches for their broking needs.
State Bank offers you the convenience of over 8500 ATMs in India, the
largest network in the country and continuing to expand fast! This means
that you can transact free of cost at the ATMs of State Bank Group (This
includes the ATMs of State Bank of India as well as the Associate Banks
– namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad,
State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State
Bank of Saurashtra, and State Bank of Travancore) and wholly owned
subsidiary viz. SBI Commercial and International Bank Ltd., using the
State Bank ATM-cum-Debit (Cash Plus) card.
INTERNET BANKING
The Internet banking portal of our bank, enables its retail banking
customers to operate their accounts all across India, removing the
restrictions imposed by geography and time. It's a platform that enables
the customers to carry out their banking activities from their desktop,
aided by the power and convenience of the Internet.
SBI’s
Life insurance and Mutual funds
Services
Life insurance
This plan is benefit from a fexible Unit Linked Pension Plan with
the following added values:
• Option I: Pure Pension Plan.
• Option II: Pension cum Life Cover Plan.
• Regular income for life time, post vesting Age.
• Tax Benefits on premium paid as per the prevailing Tax laws
Mutual Fund
Benefits of SIP:
1. Disciplines approach to investments.
2. Takes advantage of Rupee cost averaging
CONCLUSION
SUGGESTIONS
BIBLIOGRAPHY
Books Referred
WEBLIOGRAPHY
www.reprintarticlesite.com
www.iloveindia.com
www.financialexpress.com
www.statebankofindia.com