Executive summary

This is an assignment created by me under the topic of “The importance of

understanding the “Micro and Macro Environment” forces that would impact the
operations of a service organization and developing the appropriate Marketing Mix
elements for Organizational success” process of an service organization.

According to that I have Select a service organization which is in operations in Sri

Lanka as a Commercial bank of Ceylon so first I have discussed and briefly give a
description about the organization history and Macro & Micro Environment analysis of
commercial bank under the task 01 & 02

Under Task 03 With reference to the selected organization, I have selected one service
and carry out a detailed analysis and identify key unique features in its marketing mix (7
Ps) elements and I have explained what is physical evidence with the example.

Under Task 04 I have discussed about relationship marketing with reference to the
service which I have selected above .

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Introduction

Assignment Background

Services have grown dramatically in recent years. Services now account for close to 80
percent of the U.S. gross domestic product (GDP). Services are growing even faster in the
world economy, making up 64 percent of the gross world product. Service industries vary
greatly. Governments offer services through courts, employment services, hospitals,
military services, police and fire departments, the postal service, and schools and
universities. A large number of business organizations such as airlines, banks, hotels,
insurance companies, consulting firms, medical and legal practices, entertainment and
telecommunications companies, real-estate firms, retailers, and others offer services.
(Source Principles of Marketing Philip Kotler)

Today’s Business world is becoming ever more competitive and new technology,
business trends and business strategies are playing a vital role within it. To survive in the
market, each and every organization has to analyze key factors which affect its
profitability so here in this assignment I discussed about the commercial bank of Ceylon
and its environment factor, how marketing mix impact the industry and also finally
relationship marketing related to the service industry that I have select.

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Task - 1
1. Commercial Bank of Ceylon

Commercial Bank has on record over 90 years of unparalleled growth and

achievement. Having made a distinctive mark in Sri Lankan banking history, Commercial
Bank stands out for its superlative service and technological superiority.

Commercial Bank identified as the benchmark private sector bank in Sri Lanka. Over
the years they have, with clear vision, set standards, created an identity and forged a
unique trend in banking that has brought us recognition year after year. They have
maintained their cultural identity, reached to the grass roots and created a style that has
set the trend. Today, our superlative range of products and services, powered by state-of-
the-art technological superiority and peopled by a dynamic, highly motivated team has
made them what they are, the leaders in private banking in Sri Lanka.
 Services
Commercial Bank of Ceylon one of the leading bank in Srilanka. Here are the services
that commercial bank conducting for public. Loans
Personal Loans
Saving Accounts Deposits
Regular Saving Housing Loans
Certificate of Deposits
Power Saving Leasing
Fixed Deposits
Other
Super Saving Foreign currency Housing Loans
Money Market Accounts Savings Deposits
Isuru Minor Savings Account Educational loans
Savings Certificates Seven Days Call Deposits
Arunalu Minor Savings Gold Loans
Treasury
Account Bills/Bonds Professionals Loans
REPO Rates
Udara Senior Citizen’s
Supermarket Banking
Savings
The services are available in
Specialized Services
1.1. Online selected outlets of the Com SMS
Com E-load
banking – following supermarketchains
Online Banking
Cargills food city
Dialog eZ Cash
Arpico super center
this is call Bank at Dumbara super our Remittance Card
finger-tips, even Nihals when Telephone Banking
we are on the move Bancassurance
Mobile App
with Online
Mobitel mCash
Banking providing our access to the Commercial Bank
USSD Banking
account at any times.

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This service is the most popular among srilankan new generation because this the most
effective and convenient banking method by using our mobile phone with internet we
access our account

Benefits-

 can view our account balance

 Transfer funds between our own accounts or third party accounts
 We also can pay utility bills and settle Credit Card bills and carry out many other
activities
 This facility is available on any mobile network within or outside of Sri Lanka.

1.2. Mobile Banking - USSD Based

this is one of the special service they provide to their customers it means we can send and
receive money from a host of different countries via using different telecommunication
networks

Mobile banking USSD version is compatible to all phone models & the facility is
available on the Dialog, Etisalat and Mobitel Networks. No special software is required or
no handset compatibility is required to access this facility, we can simply submit the
Mobile Banking application form to the branch and we will receive a password together
with instructions on activation and operation of the facility.

we can access this facility by dialing #8823# from Etisalat and Dialog phones and
following the instructions given on the screen.

1.3. e- exchange services

This is a convenient, low cost, online money transfer that is made available through their
vast network in over 50 countries worldwide. We can transfers funds from wherever we
are and cn

Task 2

2. Macro & Micro Environment

The macro marketing environment takes into

account all factors that can influence an

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organization, but are outside of their control. There are six major macro marketing
environment forces to deal with (PESTLE): political, economic, socio-cultural,
technological, legal and environmental.

Micro environment- The factors in the immediate environment.

Macro environment- Broad forces which shape the character of opportunities and threats.

2.1. Importance -

An understanding of macro and micro marketing environment forces is essential for

planning and especially it helps a service business to compete more effectively against its
competitors. Understanding those environments will help on identification of
opportunities and threats of our business. It enables an organization to take advantage of
new and emerging strategic opportunities.

2.2. Micro environment-

The forces close to the company that affects its ability to serve. All factors
which impact directly on a firm and its activities in relation to a particular market.
(Suppliers, distributers, Customers, Competitors, stake holders Public) It made up
of all those organizations and individuals who directly affect the activities of a
company.
 Suppliers- Suppliers are either individuals or business houses. They provide
resources needed by the company. The developments in the suppliers’
environment have a substantial impact on the marketing operations of the
company. Companies can lower their supply costs and increase product quality to
gain competitive advantage in the market. Supply shortages have to be fully
monitored and plans should be made to avoid it.
 Market intermediates- They are either business houses or individuals. They help
the company in promoting, selling and distributing the goods to customers. They
are (middlemen, distributing agencies, market service agencies and financial
institutions.)

 Customers- The target market of the company is usually of five types.(Consumer

market, Industrial market, Reseller market, Government and other non- profit
markets and International market) its very important to identify clearly these

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 above customer bases for a service organization not only service but also product
related companies

 Competitors- there is no company stands alone in serving and satisfying the needs
of a customer market. It faces competition so this identification helps the
company in facing a any kind of competitors with confidence. The company in
order to come out successfully has to adopt means which may help it to more
stabilized in the market.• The competitive environment consists of certain basic
things which every marketing manager has to take note of.• Philip Kotler ‘the best
way for a company to grasp the full range of its competition is to take view point
of a buyer.”

 Public- Public is defined as ‘any group that has an actual or potential interest in or
impact on a company’s ability to achieve its objective. According to Kotler
‘companies must put their primary energy into effectively managing their
relationships with their customers.
2.3. Macro environment –
Macro environment refers to those factors which are external to company’s
activities and do not concern the immediate environment. It includes general forces
that affect all business activities in market. (Political & legal forces, economic,
social & cultural, technological forces, environmental,)
 Political and Legal forces- Includes laws, government agencies and pressure
groups that influence or limit various organizations and individuals in a given
society. \

 Economic environment- The economic environment consists of factors that

affect consumers purchasing and spending power. Under economic environment
manager generally studies trends of the market growth and profit , patterns of
real growth in income, variations in geographical income distribution, major
economic variables etc.

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  Social and cultural forces- Socially responsible marketing is that business firms
should take the lead in eliminating socially harmful products

 Demographic forces- Demographic data helps in preparing geographical

marketing plans, household marketing plans, age and sex wise plans. It
influences behavior of consumers which in turn will have direct impact on
market place. A marketer must communicate with consumers anticipate
problems, respond to complaints and make sure that the firm operates properly.

 Technological Environment- Most important changing force now a days.

Especially when it comes to services companies should changes rapidly and be
aware of technology changers, Creates new markets and opportunities,
Challenge is to make practical, affordable products and services Safety
regulations result in higher research costs and longer time between
conceptualization and introduction of product.

Marketing environments are continuously changing and businesses operating in such

turbulent environments need to be flexible. Globalization and lower barriers to entry now
mean that there is an even greater threat of substitute products and new entrants to
market.

Even though the marketer has no direct control over the macro external environment, a
greater understanding and awareness of these changing market conditions can be
achieved through external analysis. External analysis will help identify future events,
uncover possible threats and realize potential opportunities.

Task – 3

3. NRFC fixed deposits

NRFC fixed deposit accounts are for Sri

Lankans living abroad. You could open an
NRFC account while working abroad or
within 90 days of your return. An NRFC
account entitles you to save and earn in the
currency of your choice.

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  Essentials

 For Sri Lankans living abroad

 Attractive rates of interest
 Save and earn in the currency of your choice

These accounts could be opened for periods ranging from 1, 3, 6 and 12 months
where higher rates of interest are paid. Minimum balances required to open
accounts are as follows.

Currency Minimum Deposit

US DOLLARS USD 1,000
STG. POUNDS GBP 1,000
SWISS FRANCS CHF 1,000
JAPANESE YEN JPY 100,000
AUSTRALIAN DOLLARS AUD 1,000
SINGAPORE DOLLARS SGD 1,000
CANADIAN DOLLARS CAD 1,000
HONG KONG DOLLARS HKD 1,000
EURO EUR 1,000
SWEDISH KRONER SEK   5,000
NORWEGIAN KRONER NOK  5,000
NEW ZEALAND DOLLAR ZND   1,000
CHINESE YUAN CNY   5,000
4. Marketing mix

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 Just like the marketing mix of a product the service marketing mix comprises of Product,
Price, Place and Promotion. However as a service is not tangible the marketing mix for a
service has three additional elements: People, Process and Physical Evidence.

 People

People are an essential ingredient in service provision; recruiting and training the right
staff is required to create a competitive advantage. Customers make judgments about
service provision and delivery based on the people representing your organization. This is
because people are one of the few elements of the service that customers can see and
interact with. Example- Commercial bank employees attitudes and their
working style, customer handling etc. those are some of the examples for the people. Staff
requires appropriate interpersonal skills, attitude, and service knowledge in order to
deliver a quality service.

 Process

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 This element of the marketing mix looks at the systems used to deliver the service.
What was the process that allowed you to obtain an efficient service delivery? Banks that
send out Credit Cards automatically when their customers old one has expired again
require an efficient process to identify expiry dates and renewal. An efficient service that
replaces old credit cards will foster consumer loyalty and confidence in the company. All
services need to be underpinned by clearly defined and efficient processes. This will
avoid confusion and promote a consistent service. In other words processes mean that
everybody knows what to do and how to do it.

 Physical Evidence (Physical Environment)

Physical evidence is about where the service is being delivered from. It is particularly
relevant to retailers operating out of shops. This element of the marketing mix will
distinguish a company from its competitors. Physical evidence can be used to charge a
premium price for a service and establish a positive experience. Customers will make
judgments about the organisation based on the physical evidence. For example if you
walk into a Bank you expect a clean and friendly environment, if the Bank is smelly or
dirty, customers are likely to walk out. This is before they have even received the service.

Example – commercial bank they use mostly blue

as a colour that makes customers to feel and identify
their bank easily and also the arrangements with in
the bank logo those all are physical evidence

Task 4
The essence of relationship marketing is a
personal or emotional connection to a brand. This connection is centered on trust that is
created through the consistent delivery of a product or service that meets or exceeds
customer expectations.

Relationship marketing is a facet of customer relationship management (CRM) that

focuses on customer loyalty and long-term customer engagement rather than shorter-term
goals like customer acquisition and individual sales.

A Relationship-based Marketing approach has the following benefits for a banking

industry

 Over time, retail bank customers tend to increase their holding of the other
products from across the range of financial products / services available.
 Long-term customers are more likely to become a referral source.
 The longer a relationship continues; the better a bank can understand the customer
and his/her needs & preferences, and so greater the opportunity to tailor products
and services and cross-sell the product / service range.

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  Customers in long-term relationships are more comfortable with the service, the
organization, methods and procedures. This helps reduce operating cost and costs
arising out of customer error.

By building CRM strong customer relationship management banks can gain following
advantages

Advantages:

 Quality and efficiency

 Decrease in overall costs
 Decision support
 Enterprise agility
 Customer Attention
 Increase profitability
 reduced costs, because the right things are being done (ie., effective and efficient
 operation)
 increased customer satisfaction, because they are getting exactly what they want
(ie. meeting and exceeding expectations)
 ensuring that the focus of the organisation is external
 growth in numbers of customers
 Maximisation of opportunities (eg. increased services, referrals, etc.)
 increased access to a source of market and competitor information
 highlighting poor operational processes
 long term profitability and sustainability

With increased number of banks in Srilanka products and services and practically no
switching costs, customers are easily switching banks whenever they find better services
and products. So because of that banks are finding it tough to get new customers, and
more importantly, retain existing customers

Conclusion

Banks are now focusing on retaining customers and increasing market share but on the
other hand private banks have increase aggressively when compare to last decades and
exceedingly and aggressively focusing to improve serivces. The wealthier the customers,
the more demanding they are - and the clients expect more and more from their banks, to

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understand what their wants and needs are and banks must follow up their customer in
rest and expectations by building good relationship to retain in the market.

Reference

 Combank.net
 PCM Study KIT
 http://businesscasestudies.co.uk
 http://www.businessdictionary.com
 www.wikipedia.org/
 http://www.studiowide.co.uk
 Kotler,P.and Armstrong, G. (2009) Marketing an Introduction.
7thedn.Singapoore: Pearson Education. PP 97,210

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