Marketing
of
Banking Services
Pujit Singh(UM10304)
Shivam Miglani (UM10307)
Sahib Singh(UM10809)
Kushal Walia(UM10905)
WHAT IS BANKING?
Basic Definition: A system of trading money which:
provides a safe place to save excess cash, known as
deposits.
supplies liquidity to the economy by loaning this money
out to help businesses grow and to allow consumers to
purchase consumer products, homes, cars etc.
What are banks?
Institutions which deals in money and credit.
An intermediary, which handles other peoples money
both for their advantage and to its own profits.
A financial institution that links the flow of funds from
savers to the users.
Plays an important role in the economy of any country as
they hold the saving of the public.
High-contact v/s Low-contact Services
What option do you use for delivery of
Bank Service.
Visit the Bank in person and conduct transactions with a bank clerk.
Use Postal service to send deposits or request new cheque books
Use an ATM.
Conduct transactions by telephone with a customer service representative.
Use the keys on a telephone to interact with the back in response to voice
commands.
Conduct home banking through your own computer, using modem and special
software
Conduct transactions by computer through WWW
Complete banking transactions though mobile phone/PDA?
Types of Banking Services
Banks' activities can be divided into:
Retail banking: dealing directly with individuals and small
businesses;
Commercial banking: providing services to mid-market business;
Corporate banking: directed at large business entities;
Private banking: providing wealth management services to high net
worth individuals and families;
Investment banking: relating to activities on the financial markets.
What is Universal Bank? bankassurance
Central Bank Services
Retail Bank Services
Transactional accounts
Checking accounts (American english)
Current accounts (British english)
Savings accounts
Debit cards
ATM cards
Credit cards
Traveler's cheques
Mortgages
Home equity loans
Personal loans
Certificates of deposit/Term deposits
EFT, Wire transfer etc.
Retail Banks also include:
Community development bank are regulated banks that provide
financial services and credit to underserved markets or populations.
Private Banks manage the assets of high-net-worth individuals.
Offshore banks are banks located in jurisdictions with low taxation
and regulation. Many offshore banks are essentially private banks.
Savings banks accept savings deposits.
Postal savings banks are savings banks associated with national
postal systems.
Investment Bank Services
Business loan
Capital raising (Equity / Debt / Hybrids)
Mezzanine finance used in LBOs, Real estate finance
Project finance
Revolving credit
Risk management (FX, interest rates, commodities, derivatives)
Term loan
Cash Management Services (Lock box, Remote Deposit Capture,
Merchant Processing)
Credit services
Investment Banking Services
What is BANK MARKETING?
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
than the competitors keeping in view the organizational
objectives of the bank.
Each individual working in the bank is a marketing person who
contributes to the total customer satisfaction.
Bank should ultimately develop customer orientation among
all the personnel of the bank.
Need of Bank Marketing
Pre- Liberalization, it was said Marketing is not bankers cup of tea
But the Bank cannot exist without the customers.
The purpose of the bank is to create, win and keep a customer: The
customer is and should be the central focus of everything the bank does.
It is also way of organizing the bank as starting point for organizational
design should be the customer
Ultimate aim of a bank is to deliver total satisfaction to the customer
Customer satisfaction is affected by the performance of all the personnel
of the bank from chief executive to the person working at the counter.
So why not a separate marketing
department?
Studies have shown that a separate marketing department may widen the
gap between marketing and its operations
Back-end personnel may think that the bank has now marketing specialists
and hence they need not bother about customer related responsibilities any
longer.
However, some Indian banks have started marketing department for deposit
services function only. functions same but with more promotional activities.
Marketing is much more than just advertising and promotion it is basic part
of total business operation
Total Marketing function of banks
Market research identification of customers financial needs
recasting & researching future financial market needs and
competitors activities.
Product development Appropriate products(services) to meet
consumers financial needs.
Pricing of the service Promotional activities and distribution system
in accordance with the guidelines and rules of the RBI and at the
same time looking for opportunities to satisfy the customers better.
Developing market orientation - marketing culture: among all the
customer-consciousness personnel of the bank through training.
Concept of bank marketing
Identifying the most profitable markets now and in future;
Assessing the present and future needs of customers;
Setting business development goals and making plans to meet
them
Managing the various services and promoting them to
achieve the plans
Adapting to a changing environment in the market place.
Marketing strategies
Designed after taking into account the strengths and weaknesses of the
organization.
bank with clientele from various segments could think of market
penetration by offering the existing range of services to existing
customers.
Bank which are not facing acute competition could think of Market
Development by offering the existing services to new customers.
design new product range for their customers of various segments.
Segmentation
How the sellers determines which buyers
characteristics produce the best partitioning of
the particular market?
The seller does not want to treat all customers
alike nor does he want to treat them all
differently
Segmentation
Banks deal with individuals, group of persons and
corporates
More or less homogenous groups in terms of their
needs and expectations.
Market segments, targeting one or more
segments, developing products and marketing
programs tailor-made for these segments.
Criterion for Market
Segmentation in India
Agricultural Sector
1.
Marginal
2.
2 to 5 acres
3.
5 to 10 acres
4.
10 acres and above
Industrial Sector
1.
Tiny
2.
Co-operative
3.
Small-sized
4.
Large- sized
Criterion for Market
Segmentation in India
Services Sector
1.
Market Targeting- in which each segments attractiveness is measured and a
target segment is chosen based on its attractiveness.
2.
Positioning -which is the act of establishing a viable competitive position of the
firm and its offer in the target segment chosen.
Household Sector
1.
Marginal
2.
Low Income
3.
Middle Income
4.
High Income
Types of Marketing
Traditional
external
marketing
Internal
marketing
Interactive
marketing
1. Traditional external marketing
consists of usual four Ps of Product, Price, Place and
Promotion of marketing mix
Product: The products offered are the services which includes
various types of bank accounts, different types of loans,
investment services, Credit cards, Demat accounts, online
banking, mobile banking and many more.
Pricing
includes interest , fees or commission charged by the bank.
Also the interest paid by the bank.
Typical for banking sector since RBI regulates rates of interest,
Organizations are supposed to sub-serve weaker sections and
the rural regions of the country.
Buyers look for satisfaction which differs from person to
person.
Keeping in view the level of satisfaction of a particular
segment, the banks have to frame the pricing strategies.
The interest charged and the interest paid should have a corelation between them.
General steps for pricing
Develop
marketing
strategy
Make
marketing
mix
decisions
Estimate
the
demand
curve.
Calculate
cost
Place
It refers to the establishment and functioning of a
network of branches and other offices through which
banking services are delivered.
Objective is to get the right product ,at right places at
right time at the least cost.
Extensive branch network- access to large section of
people
Proximity may play a determinant role in selecting the
bank.
Banks are coming up with extension counters, specialized branches,
mobile branches, banks acquisition and amalgamation so as to have
sufficient point of contacts with the customer.
With the advent of technology other point of contacts have come up. Such
as:
ATM
Telephone banking
Online banking
Mobile banking
Video banking etc.
Promotion
Advertising
Publicity
Sales Promotion
Personal Selling
Push and Pull Strategies
2. Internal marketing
It involves the people(5th P) of the bank i.e. the
employees.
Employees should also be treated as internal
customers, and sort of marketing mix should be
followed.
Quality Human resource can be a point of
differentiation
3. Interactive marketing
The quality of service provided during the buyer-employee
interaction.
Efforts for previous strategies will turn futile if the interaction
does not takes place satisfactorily.
It involves :
Process (6th P)
Physical evidence (7th P)
Process
Refers to the systems used to assist the organization in
delivering the service.
Aids to the promotion of customer satisfaction
It involves:
speeding delivery of services
reducing the paper work
standardization of procedures
customization as per individual demand
simplicity etc.
Physical evidence
It includes signage, reports, punch lines, other tangibles, employees dress
code etc.
The companys financial reports are issued to the customers to emphasis or
credibility.
Signage: Each and every bank has its logo by which a person can identify
the company. It creates visualization and corporate identity for the banks.
Tangibles: banks give pens, writing pads to the customers.
Punch lines: Depicts the philosophy and attitude of the bank. Banks have
influential punch lines to attract the customers.
Current Marketing Strategies
Referral services
Direct mailing
Cold calling
Offering items having your brand identity
Using the media
Getting celebrities to endorse the product or service.
Sponsoring events
Using permission-based Marketing
Customer satisfaction
Recommendation of Talwars committee,1975:
Establishment of customer service committee/staff
committee in the every ranch.
Customer meets to be held at the branches at least once
in a half year.
15th of every month (next day if 15th is a holiday) to be
observed as customers day at branches and administrative
offices.
Provision of complaint-cum-suggestion box in every
branch.
Customer Satisfaction (Contd)
Provision of May I help you counter in branches.
Immediate credit of cheques up to Rs.2,500 which has
since been increased to Rs.15,000.
Payment of penal interest in case of delay of collection of
cheques.
In the year 1995 Banking Ombudsman was established
by RBI with objective of resolving customer grievances in a
quick and inexpensive manner.
Rural bank marketing
Follows 80-20 Parato principal
Bankers need to understand the rural psychology
Employing local literate youth for confidence building
Banker must be aware of agriculture aspects, cultural and
communal aspects, institutional facilities etc.
Process of change should be known to him
Status of various development plans should be known
RURAL Strategy
R:Retail Business for Rural Community As
(Consumer & Producer)
U: Urban facilities, Investment, Infrastructure
R: Animal Husbandry & Allied Activities
A: Agri Production(Field Crops, Plantation)
L: Linkages & Synergy
New Avenues for Rural
Business: Special Focus
Horticulture, Plantation, Vegetable growing, Floriculture,
aromatic and medicinal plants, Bio-diesel plants etc. for high
investment Opportunities
Post Harvest and Food Processing
Seed Multiplication & Processing
Dairy Farming, Sericulture, Aqua-Culture & Others.
Irrigation Projects & Wasteland Developments.
Rural Tourism & Other emerging areas.
ICICI Bank A Case study
Industrial Credit and Investment corporation of
India bank - largest private sector bank in market
capitalization
Second largest bank in India in terms of assets and
market capitalization.
Wide range of banking products and financial
services for corporate and retail customers in the
areas of investment banking, life, non-life
insurance, venture capital and asset management.
MARKETING OF SERVICES BY
ICICI BANK:
7 Ps:
1.
Product
2.
Pricing
3.
Place
4.
Promotion
5.
Process
6.
Physical Evidence
7.
People
7 Ps of ICICI Bank
1.
Product :
Saving account: offers a power packed
Savings Account with a host of convenient
features and banking channels to transact
through.
Senior citizen services: convenience with
benefits
Fixed Deposits : Safety, Flexibility, Liquidity
and Returns
Recurring Deposits: Affordability and higher earnings.
Roaming Current: access your accounts at over 500 networked
branches across the country.
Loans: Home Loans. Personal Loans. Car Loans, two Wheeler
Loans, Commercial Vehicle Loans. Loans against Securities,
educational loans etc
Investments: ICICI Bank Tax Saving ,Foreign Exchange Services,
Senior Citizens Savings Scheme, 2004.
Cards: Credit card, ATM card, travelers card
Demat services
Online money transfer
Mobile banking
7 Ps of ICICI Bank
1.
2.
3.
4.
2. Pricing
Pricing Decisions related to interest, fee or
commission.
RBI and IBA
Raising Number of Customers
2 Fold Strategies
7 Ps of ICICI Bank
1.
2.
3.
3. Place
Services are sold through branches
Making Promised Services available to the ultimate
users.
3800 branches and 11162 ATMs in India
7 Ps of ICICI Bank
4. Promotion
1.
Advertising - Television, radio, movies, theatres
2.
Print Media- Hoardings, newspaper, magazines
3.
Publicity- Road shows, campus visits, sandwich man, Sponsorship
4.
Sales Promotion- Gifts, discount and commission, incentives, etc.
5.
Personal Selling- Cross-sale (selling at competitors place),
personalized service
6.
Telemarketing- ICICI one source Call center (mind space
7.
Social Media and Website
7 Ps of ICICI Bank
5. Process
1.
Standardization- ICICI bank has got standardized procedures
got typical transactions
2.
Customization- Specialty counters at each branch to deal
with customers of a particular scheme
3.
Simplicity- Separate counters exist with clear indication
4.
Customer Involvement- Money matters and signature
7 Ps of ICICI Bank
6. Physical Evidence
1.
Signage
2.
Financial Reports- The Companys financial reports are issued to the
customers to emphasis or credibility
3.
Tangibles- Pens, Writing Pads to the internal customers. Passbook and
Cheque books to the customers.
4.
Punch lines- Hum Hai Naa
5.
Employees Dress Code- ICICI bank follows a dress code for their
internal customers
7 Ps of ICICI Bank
1.
7. People
All people directly or indirectly involved in the
consumption of banking services.
2.
Workers, Employees, Management and other
Consumers
3.
Employees of a Bank represents the organization to
its customers.
4.
Internal Marketing
Banking marketing and Social
Media
Ways in which banks are using social media for the purpose of total marketing:
Community Building Telling the services offered by them through their
websites and net banking. Live chat and free online account facilities.
Product Research When launching a new service, getting to know the
customer needs through online surveys and social media accounts.
Customer Service Better feedback mechanisms and complaint handling
Advertising & Promotion facebook, twitter etc. , Cashback offers on
flipkart.
Transparency
Conclusion
Banking is extremely competitive industry in which customer is everything
Range of services increased
The relative similarity of products offered by different banks has led to
increased emphasis on quality and customer satisfaction.
Bank ATMs not only offer 24-hour banking services but may also dispense tickets,
stamps, and abbreviated bank statements.
To survive in the market, bank must follow bank marketing approach and
should have:
Innovative marketing practices (Go green initiative by SBI)
Whole hearted commitment to customer orientation by all employees 50% to 170
% return on investments only by handling customer complaints.
Bank marketing helps in achieving the organisational objections commercial(profit) & social objectives(development role-rural areas) of the
banks.
Hence, Bank marketing has become necessity for banks.
THANK YOU
