Professional Documents
Culture Documents
Bcom MBS U-1
Bcom MBS U-1
Bcom MBS U-1
UNITED UNIVERSITY
FACULTY OF COMMERCE & MANAGEMENT
DND
UNIT - 1
INTRODUCTION TO
MARKETING OF BANKING SERVICES
DND
CONCEPT OF MARKETING
• Marketing is an economic activity in which goods and
services are exchanged in lieu of money. The marketing
program starts with a product idea and does not end until
the customers are completely satisfied.
• Customers must be satisfied for the company to retain them
and make repeat business.
• Marketing is the combination of activities designed to
produce profit through ascertaining, creating, stimulating,
and satisfying the needs and/or wants of a selected segment
of the market.
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COMMON CONCEPTS
USED IN MARKETING
1. Needs; a need is a state of felt deprivation of some basic
requirement e. g. people need food, clothing, shelter, and safety
for survival.
2. Wants; these are desires for specific satisfiers of the needs e.g. a
person needs food but wants fish and chips. He needs shelter but
wants a mansion.
3. Demands; are wants for specific products that are backed up by
the ability and willingness to buy them. A want becomes a demand
when it is backed by purchasing power.
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SCOPE OF MARKETING
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3. Pricing Policies
• Marketer has to determine
pricing policies for their
products.
• Pricing policies differs form
product to product.
• It depends on the level of
competition, product life cycle,
marketing goals and objectives,
etc.
5. Distribution
Study of distribution channel is important in marketing. For maximum
sales and profit goods are required to be distributed to the maximum
consumers at minimum cost.
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6. Customer Satisfaction
The product or service offered
must satisfy consumer.
Consumer satisfaction is the
major objective of marketing.
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2. Consumer-oriented:
A business exist to satisfy human needs, hence banks must find
out what is the desire of customer (or consumer) and thereby
produce goods & services as per the needs of the customer.
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4. Exchange Process:
All marketing activities revolve around commercial exchange process.
The exchange process implies transactions between buyer and seller.
It also involves exchange of technology, exchange of information and
exchange of ideas.
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2. Source of Revenue:
Among various activities , marketing is the only one that generates
adequate revenue directly to the bank because marketing consists of
economic activities, which include production of various banking
products, distribution and many other supportive function.
Performance of all these activities generates adequate revenue to the
bank.
4. Distribution of product:
Marketing helps banks to provide products and services to their
targeted/potential customers in an effective and efficient way
which helps in smooth functioning of the organization.
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ELEMENTS OF
BANK MARKETING MIX
• The elements of marketing mix are the convenient means of
organizing all the variables controlled by the banks that
influence transactions in the marketplace.
• It is a ‘checklist approach’ where bank’s attempt to list and
organize the variables under their control which may be
important in influencing transactions in the market place.
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1. Product
• In bank marketing mix the product is intangible in nature.
Product as a marketing mix in banking denotes the offer of
banking products and services that the bank defines in
accordance with the needs of specific target groups (retail
clients, corporations, individual industries).
• The main products of banks are Saving Account, Current
Account and Demat Account. The other products are Home
loan, personal loan, Insurance, Credit cards, etc.
2. Price
• Pricing is more difficult in case of services than in the
products. A bank’s ability to acquire funds at lower prices,
i.e. interest rates, and loan them at the highest possible
margins determines the profitability of banking operations.
• In addition to this, determining the price is also limited by
certain external factors, such as the rate of statutory
reserves, inflation, levels of development of the banking
market, with the resulting degree of competition.
3. Place
• Place determines where the service product is going to be located. The
location of the service providers and their accessibility are important
factors in services marketing.
• Accessibility relates not just to physical accessibility but to other means
of communication and contact. Distribution refers to banks’ activities
whereby their services are placed at the disposal of users in the right
place and at the right time.
• In addition to distribution through a network of branches and counters,
the development of electronic banking brings additional channels such
as ATMs, internet centers, call centers, video communication, mobile
banking, etc.
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4. Promotion
• Promotion is the tool to create awareness to the public regarding the
products. Brand promotion helps a lot in service sector why because
services can be duplicated easily.
• Promotion includes the various methods of communicating with markets
whether through advertising, personal selling activities, sales promotion
activities and other direct forms of publicity, and indirect forms of
communication like public relations.
• Promotion in banking plays a special role in strengthening corporate
reputation, goodwill and other elements of intangible assets.
5. People
• In bank marketing another element which plays a major role is people. All
human actors who play a part in service delivery and thus influence the
buyer’s perceptions.
• People as a marketing mix instrument in banking include the staff of the
branch selling services and offering accompanying services, auxiliary staff,
as well as other users who find themselves in the branch at the moment of
service performance.
• Now a day‘s banks are also concentrating on the training activities to
impart necessary skills to the employees. The factors such as skills,
attitudes and knowledge of the human resources play a vital role in
determining the competitiveness of the financial sector. The banks can
deliver value to customers only when they maintain quality of human
resources.
Dr. Nishant Dabhade
6. Process
• Process is the way in which the services are created and delivered to
the customer in bank marketing. Technology is supporting a lot to the
banks now a days.
• In order to improve the efficiency in service the banks prefer the latest
technologies.
• Processes in banking show a bank’s ability to perform the tasks
assigned to it, and an illustration can be the process of disbursing loans
in the sense of terms, complexity and total risk.
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7. Physical Evidence
• The physical evidence of service includes all of the tangible
representations of the services – such as brochures, letterhead,
business cards, report formats, signage, and equipment.
• In some cases it includes the physical facility where the service is
offered, for example, the retail bank branch facility. Physical
environment is extremely important for forming the users’
impression about the bank, and particular standards define the
outer and inner appearance of branches.
• The main intention is for the users to have an identical experience
of service provision at every branch.
MARKETING APPLICATIONS
IN BANK INDUSTRY
• Banking is the business activity of banks and similar
institutions. Customers are offered innovative products to
redefine banking convenience.
• With bank’s expertise, customer can rest assured that our
wealth is protected and nurtured at the same time.
• Banking product cannot be seen or touched like
manufactured products. In marketing of banking products,
the product and the seller are inseparable; they together
define the banking product.
Dr. Nishant Dabhade
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• By marketing of
bank product,
bank’s objective is
to identify and
manage better the
brand
communication that
determines the
quantity and quality
with their brand
relationships.
Dr. Nishant Dabhade
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PRODUCT MARKETING
• The entire process, right from the market analysis, to delivering
product to the customer and receiving feedback, is called product
marketing.
• The process is aimed at finding out the right market for its product and
its placement in such a way that it gets good customer response.
• It involves promotion and sale of a product to its target audience, i.e.
prospective and existing buyers.
Example: Marketing for tangible objects like books, handbags, laptops,
mobiles, clothes and so on.
SERVICE MARKETING
• When a person or business entity promotes services, it offers to its
customers or clients, it is known as service marketing.
• It is aimed at providing solutions to the problems or difficulties of
the clients. It includes both business-to-business (B2B) and
business-to-consumer (B2C) marketing.
• A service is an act of performing something for someone in
exchange for adequate consideration. It is intangible, consumed at
the time of its production, can’t be inventoried and resold.
Example: Marketing of banking services, Professional services,
coaching centers, health services, telecommunication, etc.
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THANK YOU
END OF
UNIT -1
Reference Books:
• Dynamics of Banking Marketing, VBS publishes.
• Marketing of Banking & Financial Services, Serials Publication.
• Services Marketing: People, Technology and Strategy, Pearson Education.
Dr. Nishant Dabhade
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