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Bank Marketing 1
Bank Marketing 1
Bank Marketing 1
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INDEX
SR.
NO.
DESCRIPTION
Pg no.
Executive summary
1.
2.
3.
4.
5.
6.
Meaning of Marketing
7.
8.
9.
10.
11.
12.
13.
Market Segmentation
14.
15.
16.
17.
18.
Technology in Banking
19.
20.
Case study
21.
22.
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23.
Conclusion
24.
Refrences
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DEFINITION OF BANK
According to Oxford English Dictionary, Bank is, An establishment for
custody of money received from or on behalf of, its customers. Its
essential duty is the payment of the orders given on it by the
customers, its profit mainly from the investment of money left unused
by them.
Banking Regulation Act, 1949 (Sec. 5(c)), has defined the banking
company as, Banking Company means any company which
transacts business of banking in India. According to Section 5B,
banking means the accepting of deposit of money from the public for
the purpose of leading or investment, which are repayable on
demand or otherwise and are withdrawable by cheque, draft, order or
otherwise.
Different economists, banking professionals and authorities explained
their viewpoint regarding bank or commercial bank. It has been rightly
said by A.K. Basu that a general definition of a bank or banking is by
no means easy, as the concepts of banking differ from age to age,
and country to country.
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The chief concerns of most bank executives still focus on legal and
regulatory issues, according to most surveys. Community banks are
particularly concerned with eliminating barriers that give unfair
advantages to financial services competitors, such as credit unions.
However, another concern pertains to technology: keeping nonblank
competitors out of the payment system.
2015
Maintaining profitability
Service quality
Maintaining profitability
Service Quality
Regional Economy
Operations/systems/technology
Cost
Management
reduction
Productivity improvement
Capital adequacy
Asset/liability management
Electronic Banking
Industry Overcapacity
When this gateway system was first proposed, access to the Internet
was very new and few banks had the resources and knowledge to set
up their own direct-access lines for customers. Customers have
shown a growing interest in online banking services, and banks have
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credit
and
miscellaneous
banking
activities.
The
issues.
recommending
Narasimham
internal
autonomy
Committee
long
with
Reports
while
compliance
with
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MARKETING CONCEPTS
Its application to Banking, When we apply marketing to the banking
industry, the bank marketing strategy can be said to include the
following
i)
ii)
iii)
Planning for each of the source markets & each of the use
markets (A Bank needs to be doubly market oriented it
has to attract funds as well as were of funds & services.
iv)
BANK MARKETING
We define bank marketing as follows: Bank marketing is the
aggregate of functions, directed at providing services to satisfy
customers financial (and other related) needs and wants, more
effectively and efficiently that the competitors keeping in view the
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2)
3)
4)
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5)
6)
relations,
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the Indian public sector banks, though ultimately the Chief Executive
is responsible for the total marketing function. Hence, the total
marketing function involves the following:
a) Market research
future
financial
market
i.e.
appropriate
products
to
meet
activities
and
i.e.,
promotional
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2. Bank of Baroda
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report
prepared.
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services
residents
to
Ranade:
customers
opinion (1958)
3. Canara Bank
two
internal
new
schemes (1989)
4. Central Bank of a. Market survey of customer Conducted
India
by
the students of
services
deposits BITS,
b. Marketing
(Customers)
Pilani.
For
internal
use
only
service (1986)
5. Indian Overseas a. Potential areas for future For
Bank
business expansion
use only
in
OBC
internal
Upendran
with
reference to metropolitan
branches (1989)
7. Punjab
Bank
National a. Sample
survey
on For
customers
For
(1987)
b. Sample
survey
Formal Report
scheme
(1982)
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internal
on use only
internal
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customer For
on
internal
turnover
accounts) J S Kalra:
their
BMP Thesis
(1989)
b. Changing Profile of Punjab
and
Sind
Customers
Banks
and
their
expectorations, a survey
based study (1988)
9. State
Bank
Bikaner
of a. A
survey
on
customer For
internal
10. Syndicate
Bank
internal
Syndicate
Bank-
For
internal
use only
For
internal
use only
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For
internal
use only
K P Ramesh
service in a metropolitan
Rao
branch (1979)
BNP Thesis
Formal Report
Bank
bank (1989)
Undertaken by
a Consultant
INCREASING
IMPORTANCE
OF
MARKETING
IN
BANKING INDUSTRY
The various other factors which have led to the increasing importance
of marketing in the banking industry are categorized as follows:
Government Initiatives
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increasing
competition
in
the
banking
industry,
thereby
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funds
is
reducing
the
importance
of
banks
as
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ii.
iii.
Planning for each of the source markets and each of the user
markets (A bank needs to be doubly market oriented its has
to attract funds as well as users of funds and services).
iv.
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Small
Industries
and
Small
Business
Segment,
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Some of the women are housewives and therefore they have different
need and requirements whereas some of them are working ladies
having different needs and requirements.
In the profession segments, we find different categories of
professions an therefore we find a change in their needs and
requirements.
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therefore
the
banking
organizations
should
know
their
expectations.
Some of the organizations are known as cultural organizations, some
of them are not for profit making, some of them are philanthropic
and some of them are related to trade and commerce. The emerging
trends in the social transformation process determine the hierarchy of
needs.
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Almost
all
the
organizations
are
to
get
tremendous
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essential that they innovate their service mix and make them of world
class. Against this background, we find it significant that the banking
organizations minify, magnify combine and modify their service mix.
It is essential that ever product is measured up to the accepted
technical standards. This is due to the fact that no consumer would
buy a product which contains technical faults. Technical perfection in
service is meant prompt delivery, quick disposal, presentation of right
facts and figures, right filing proper documentation or so. If computers
starts disobeying the command and the customers get wrong facts,
the use of technology would be a minus point, and you dont have any
excuse for your faults.
PRODUCT PORTFOLIO: The bank professional while formulating the
product mix need to assign due weightage to the product portfolio. By
the concept product portfolio, emphasis is on including the different
types of services/ schemes found at the different stages of the
product life cycle. The portfolio denotes a combination or an
assortment of different types of products generating more or less in
proportion to their demand. The quality of product portfolio
determines the magnitude of success. It is excellence of bank
professionals that help them in having a sound product portfolio.
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schemes and services are included in the service mix of bank product
and all the services or schemes cant be preferred by all. Of course
we find some of the public sector commercial banks now evincing
stage. This makes it essential that a bank manager thinks in favour of
developing
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environment
conductive.
PROMOTION MIX
In the formulation of marketing mix the bank professionals are also
supposed to blend the promotion mix in which different components
of promotion such as advertising, publicity, sales promotion, word-ofmouth promotion, personal selling and telemarketing are given due
weightage. The different components of promotion help bank
professionals in promotion the banking business.
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The RBI has to be more liberal so that the public sector commercial
banks make decisions in the face of changing business conditions.
There is no doubt in it that the commercial banks bear the
responsibility of energizing the social marketing, they are also
supposed to bear the social costs. It is also right that the foreign
banks have been found making the business environment more
competitive. These emerging trends necessitate a close look on the
pricing problem. The policy makers find it difficult to bring a change
since the regulations of the RBI make things more critical. The
expenses are not regulated by the RBI and the banking organizations
are forced to increase the budgetary provisions. The sources of
revenue are regulated which complicates the task of bank
professionals. This makes it essential that the Reserve Bank of India,
the Government of India and the banking organizations thing over this
complicated issue with a new vision.
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THE PEOPLE
Sophisticated technologies, no doubt, inject life and strength to our
efficiency but the instrumentality of sophisticated technologies start
turning sour if the human resources are not managed in a right
fashion. Generation of efficiency is substantially influenced by the
quality of human resources. It is against this background that a
majority of the management experts make a strong advocacy in
favour of developing quality people and late, the people management
has been include dint he marketing mix of organizations is general
and the service generating organizations in particular.
Not only the public sector commercial banks but almost all the public
sector organization and albeit other government departments, of late,
have been facing the problem of quality people resulting into
inefficiency, deceleration in the rate of overall productivity and
profitability or so. The front-line staff are rough and indecent, the
branch mangers are helpless and even the bankers have been found
involved in the unfair practices. The public sector commercial banks
need to assign on overriding priority to the development of quality
people majority of the management of the experts have realized the
significance of quality people in the development of an organization
and the boardrooms are also found changing their attitudes. The first
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Data
Interchange
(EDI)
for
company-wise
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have fewer networks of bank branches in the rural areas. Under such
scenario different marketing approach for different areas is required. If
the bank follows the same marketing strategy for all areas the
success would be difficult.
Marketing approach for urban area: The urban areas of India are
developed taking into account all parameters of development. The
level of income of the people, the literacy rate and level of education
as well as awareness of the people about rights of the customer are
higher than that of the rural and even semi urban areas. Thus here for
effective bank marketing different approach is necessary than that of
rural areas.
The marketing strategy should be based on customer service and
the use of modern technology in banking. Under competitive
environment for the success of the business, better customers and
retaining existing customers is possible only with customer service.
Use of modern technology in urban areas will also go long way for
marketing of banking services. Technology based service like credit
card, debit card, ATM, anywhere banking, internet banking, and
mobile banking are necessary for urban areas. This is because it
enables
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Conclusion:
Banking sector has undergone various changes after the new
economics
policy
based
on
privatization,
globalization
and
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TECHNOLOGY IN BANKING
Technology is proving to be a vital tool in enhancing banking activities
around the globe. The advent of ATMs, and Internet Banking are key
pointers to this. The role of an information system can in no way be
underestimated. The expanding role of information systems have
aided banks achieving Anytime, Anywhere and Anyhow banking. The
improvement in telecommunication infrastructure is redefining the was
banking is being conducted.
Information Technology made its presence felt in banks in India a few
decades ago. However, it is still being used as a support systems.
Most of the software packages used in bank work on stand-alone
systems and are not integrated.
Banks in India need to have an integrated systems that takes care of
all the front-office and back-office operations. However, Indian banks
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Customers had to adjust their schedule to the bank and very rarely
was it the other way around. A person in a city like Bombay usually
had to wait for a weekend to deposit a cheque, because by the time
he reached home, the bank would have closed. Today, while the
timings of banks have not changed drastically banks have become
more customer friendly. Now power has shifted into the hand of the
customer.
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ATMs that ICICI Banks customer base has grown from two million to
five million in the last two years. Srivastava attributes this increase to
the increase in ATM outlets.
HDFC Bank, is the other big player from the banking industry which
has aggressively used ATMs to its advantage. Says Mudit Saxena,
vice-president for retail marketing and head of Net Banking at HDFC
Bank, The average per-day transaction at an HDFC Bank ATM is
350-400, with some ATMs recoding as many as 700 transactions per
day. Other tech savvy banks like UTI Bank and ABN Amro Bank
have also become extremely aggressive in installing ATMs.
In the case of UTI Bank, the ATMs have added a fillip to the banks
customer base. Says V K Ramani, president for IT at UTI Bank,
Form the first year of ATM installation, we have seen a surge in our
customer base. Currently, we have 647 ATMs servicing a base of 1.3
million customers. Over 90 percent of cash withdrawals are done
through ATMs. The number of ATM transactions have also increased
from one million in September 2001 to over 2.5 million in September
2002. With growth figures like this, its no wonder that every branch
manager wants an ATM installed in his area of operations.
Alok Shende, Industry manager for IT practice at Frost & Sullivan,
summarieses the evolution of the Indian banking industry perfectly
when he says, Banks followed two broad approaches when adopting
technology. The first approach was evolutionary. Banking players
who had large brick and mortar legacy particularly the public sector
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states
that
additional
hurdles
relating
to
legal
and
MOBILE BANKING
Whats M-Banking?
M-Banking allows a customer to request for account balance, cheque
books, cheque status, demand drafts, and bankers cheques as well
as stop payments, make fixed deposits enquiry and transfer bills
online. HDFC customers, for instance, can pay their Max Touch and
BPL Mobile both provide cellular services Bombay State Electricity
Supply, and Maharashtra State Electricity Board bills. Says Shyamlal
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Mumbai)
As a delivery channel gains ground, it can be used to sell products of
other vendors too. For example, the SBI ATM at CST railway station
in Mumbai dispenses season tickets too. Analysts believe that as
banks discover the marketing power of ATMs, one would see a trend
where ATMs would be used to deliver products of other vendors as
well. ICICI Bank has gone one step further by allowing devotees of
Tirupati to offer payments to the temple at Tirupati temple through
their ATM.
This could be the future of ATMs, where more non-cash transactions
will be done. Some banks are even toying with the idea of selling
movie tickets through ATMs. Going forward, as the volume of noncash transactions increase, one can see a trend where banks
maintain kiosks instead of ATMs, as there might not be a need for
all the features of an ATM.
Says Chopra of ABN Amro, "The next five years will see a marked
shift, wherein customers will show a preference for non- branch
delivery channels. Also, the large number of customer calls will also
necessitate use the of toll free numbers.
Irrespective of the delivery channel, one thing is clear-it's boom time
for customers, as banks try a variety of options to lure them
Who knows, the next time you go to deposit your cheque, you just
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synchronisation
of
performance-orientation
and
employee
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rise until 80% of Indians are not having credit cards.. Compare the
banking to developed countries and you will find bank marketing in
India to be great.
The bank of the future has to be essentially a marketing organisation
that also sells banking products. New distribution channels are being
used; more & more banks are outsourcing services like disbursement
and servicing of consumer loans, Credit card business. Direct Selling
Agents (DSAs) of various Banks go out and sell their products. They
make house calls to get the application form filled in properly and also
take your passport-sized photo. Home banking has already become
common, where you ~an order a draft or cash over phone/internet
and have it delivered horn. ICICI bank was the first among the new
private banks to launch its net banking service, called Infinity. It allows
the user to access account information over a secure line, request
cheque books and stop payment, and even transfer funds between
ICICI Bank accounts. Citibank has been offering net banking to its
Suvidha program to customers.
Products like debit cards, flexi deposits, ATM cards, personal loans
including consumer loans, housing loans and vehicle loans have
been introduced by a number of banks.
Corporates are also deriving benefit from the increased variety of
products and competition among the banks. Certificates of deposit,
Commercial papers, non-convertible Debentures (NCDs) that can be
traded in the secondary market are gaining popularity. Recently,
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CASE STUDY
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