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CAIIB-General Bank Management Module D -MARKETING MANAGEMENT

BY

S.V.ATRE Bsc, BA, LLB, MBA, CAIIB
FACULTY,

BANK OF INDIA,
MANAGEMENT DEVELOPMENT INSTITUTE, CBD BELAPUR, NAVI MUMBAI

WHAT IS MARKETING ?

• IS SELLING & MARKETING ARE SAME ?

DEFINITION – PETER DRUCKER
• Marketing is not only much broader than selling, it is not a specialised activity at all. • It encompasses the entire business. • It is the whole business seen from the point of views of its final result that is from the customer‟s point of views. • Concern and Responsibility for marketing must therefore permeate all areas of the enterprise
contd…….

DEFINITION – PHILLIP KOTTER
• Marketing is the business function that identifies current unfilled needs and wants, • defines and measures their magnitude, • determines which “Target Markets” the organisation can best serve • and decides on appropriate products, services and programmes to serve these markets. • Thus, marketing serves as a link between society‟s needs and its pattern of industrial response.

Collecting & Analysing the Needs, Wants & Demands of Customer

Feedback

Developing & Designing a Product

CONCEPT OF MARKETING

Delivering the Product

Conveying the Customer about the Product

Pricing the Product

INTRODUCTION TO MARKETING MANAGEMENTQuestions 1) To make available goods and services to buyers according to their requirement Is called : a) selling b) trading c) marketing d) any of the above

INTRODUCTION TO MARKETING MANAGEMENTQuestions 1) To make available goods and services to buyers according to their requirement Is called : a) selling b) trading c) marketing d) any of the above .

Marketing combines which of the following : a) philosophy of business and business practices b) business practices and customer requirements c) customer requirements and philosophy of business d) all of the above .INTRODUCTION TO MARKETING MANAGEMENTQuestions 2.

INTRODUCTION TO MARKETING MANAGEMENTQuestions 2. Marketing combines which of the following : a) philosophy of business practices business and b) business practices and customer requirements c) customer requirements and philosophy of business d) all of the above .

planning distribution b) advertising and promotion. after sale service c) pricing. packaging. marketing research. product development d) none of the above .Which of the following is not a part of the marketing activity a) sales and sales management.INTRODUCTION TO MARKETINGMANAGEMENT-Questions 3.

after sale service c) pricing.INTRODUCTION TO MARKETINGMANAGEMENT-Questions 3.Which of the following is not a part of the marketing activity a) sales and sales management. marketing research. packaging. planning distribution b) advertising and promotion. product development d) none of the above .

planning. control and marketing . marketing and implementation c) analysis. Which of the following is more appropriate to the process of marketing management. implementation.INTRODUCTION TO MARKETING MANAGEMENTQuestions 4. implementation and control d) analysis. a) analysis and planning b) planning.

control and marketing . implementation. marketing and implementation c) analysis. Which of the following is more appropriate to the process of marketing management.INTRODUCTION TO MARKETING MANAGEMENTQuestions 4. implementation and control d) analysis. planning. a) analysis and planning b) planning.

a) it is anything that can be offered to satisfy a need or want of the customer b) a product can be a physical goods c) a product can be a service or idea d) all the above together .INTRODUCTION TO MARKETING MANAGEMENTQuestions 5. Which of the following is an appropriate definition of product.

a) it is anything that can be offered to satisfy a need or want of the customer b) a product can be a physical goods c) a product can be a service or idea d) all the above together . Which of the following is an appropriate definition of product.INTRODUCTION TO MARKETING MANAGEMENTQuestions 5.

MARKETIING OF WHAT  PHYSICAL GOODS  SERVICES  IDEAS  MARKETING DIFFERS FOR EACH CATEGORY .

MARKETIING OF SERVICES • AS A BANKER WE ARE CONCERNED WITH THE MARKETING OF SERVICES • WHICH GREATELY DIFFERS FROM MARKETING OF GOODS (contd) .

Distribution and Consumption are simultaneous processes • An activity or process • Core value produced in factory • Core value produced in buyer-seller interactions • Customers do not participate in • Customers participate in the process the production • Can be stored • Transfer of ownership possible • Can not be stored • Transfer of ownership not possible .DIFFERNCE BETWEEN PHYSICAL GOODS & SERVICES PHYSICAL GOODS • Tangible • Homogenous • Production& Distribution separated from consumption • A thing SERVICES • Intangible • Heterogeneous • Production.

e.DEFINITION OF SERVICE • Services are by and large “Activities” or they are a series of activities – rather than things • The services are intangible • They take place in the interaction between the customer and the service provider i. Services are produced and consumed simultaneously .

Efficiency and Effectiveness are major factors .MARKETING OF BANKING PRODUCTS • Banks provide services • Its aim is to satisfy customers‟ needs and wants • The needs and wants of the customer are financial in nature • Competition.

CONSUMER BEHAVIOUR • STUDY OF THE CONSUMER EHAVIOUR IS ESSENTIAL FOR MARKETING • UNDERSTANDING CONSUMER BEHAVIOUR IS THE GREATEST CHALLENGE • CAN CONSUMER BEHAVIOUR BE PREDICTED • CONSUMERS ARE HUMAN BEINGS .

CONSUMER BEHAVIOUR “To buy or not to buy” What to Buy? When to Buy ? Consumer behaviour is influenced by :• Needs and Motives • Hierarchy of Consumer Needs • Decision making process .

Sleep .NEEDS & MOTIVES 5. Self-Actualisation Self Fulfillment 4.Oxygen . Status and Success 3.affection and a sense of belonging 2. Recognition. Social Needs Friendship. Esteem Needs – Self respect. Physiological Needs : Food . Safety Needs – Avoidance or Protection from Threatening situations and economic security 1.

love or social recognition.Individual Perception • • • • An individual is motivated by his personal needs for self esteem. his behaviour is affected by his particular perception of himself and the world around him. Selective Perception • Human consumers have the ability to select from the many sensations bombarding our brains .

They rely on habit because :1)they resort to habit when they select products because it is easy 2)they rely on habit because of necessity 3)they resort to habit because it is the rational thing to do .CONSUMER BEHAVIOUR Learning and Habit Development – Cognitive theory views • Learning as a mental process of memory thinking • and the rational application of knowledge to practical problem solving • Most consumer behaviour is habitual.

FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING • Location : Where a bank branch is located often influences the choice of the bank. • Very often the “bank next door” wins on that basis alone » contd…. .

the years it has been operating in the country. . the background of the bank. all influence the choice contd…. international connections. its promoters.FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING Safety : Depositors are very often placing their hard earned money in a bank and a worrying factor for them is “is the bank safe?” • To quell the fear.

wants to be sure that the returns being earned are attractive .FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING • Returns : A consumer having satisfied himself that his money is safe.

. Phone billing + ATMs or offer him greater choice – a range of term deposit products which offer him high returns and liquidity. a consumer gets more demanding and would like his bank to offer a variety of services and products which increase convenience for him. • Ex.FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING • Range of Services : With greater sophistication in the environment.

CUSTOMER SERVICE AS A MARKETING TOOL .

CUST SERVICE AS A MRKTING TOOL • MARKETING COST IS VERY HIGH • SUCCESS OF MKTG IS UNCERTAIN • SATISFIED CUSTOMER IS THE BEST MARKETING MANAGER FOR THE BANK • NOT ONLY HE RETAINS BUSSINESS HE CANVASSES NEW BUSINESS ALSO • HIGHER SUCCESS RATIO • ITS FREE .

Customer Service -The Essence Of bussiness • Customers are the backbone of the Organizations • They posses the power to make or break any organisation irrespective of its nature and size . • You forget your customers and you are out of your bussiness .

• So. .CS-The essence of business. it is necessary to take adequate care of them and at the same time increase their number.

• UNLESS THE SITUATION IS RECOVERED QUICKLY• A LOST CUSTOMER WILL BE LOST FOR EVER.NEED OF CUST SERVICE • IN A FREE MARKET ECONOMY THE CUSTOMER HAS CHOICE • IT COSTS MORE TO GAIN A NEW CUSTOMER THAN TO RETAIN AN EXISTING ONE. .

SOMEBODY ELSE WILL.NEED OF CUSTOMER SERVICE • DISSASTISFIED CUSTOMERS HAVE FAR MORE FRIENDS THAN SATISFIED ONES. . • IF YOU DONOT LOOK AFTER YOUR CUSTOMERS.

CUSTOMER’S NEEDS • • • • • SPEED TIMELINESS ACCURACY COURTESY CONCERN .

TOOLS STAFF EMPOWERMENT • • • • • • • ATTITUDE POLITENESS LISTENING PROMPTNESS KNOWELEDGE COMMUNICATION CUSTOMER EDUCATION .

COMMON COMPLAINTS • • • • RUDE SERVICE /RESPONSE AT THE COUNTER UNATTENDED PHONES DELAYED SERVICE INSENSESITIVITY AND APATHY TOWARDS CUSTOMER • UNINFORMED STAFF .

SOMEBODY ELSE WILL .COMPLAINTS REDRESSAL • WELCOME COMPLAINTS.THEY ALLOW FOR RECOVERY • THE CUSTOMER MAY NOT ALWAYS BE RIGHT BUT HOW YOU RESPOND CAN MAKE ALL THE DIFFERENCE • IF YOU DONOT LOOK AFTER THEM.

TIPS • AVOID CONFRONTATIONS • YOU MAY WIN THE ARGUMENT BUT WILL LOSE THE CUSTOMER .

CUSTOMER DELIGHT • GIVE HIM MORE THAN WHAT HE NEEDS OR DEMANDS • SERVE WITH SMILE • MAKE HIM A DELIGHTED CUSTOMER • MAKE HIM A FRIEND .

LEGAL PROTECTION TO CUSTOMERS • • • • Consumer protection act Banking Ombudsman scheme Right to information act Lenders’ liability act .

The Consumer Protection Act • Consumers are provided with easy access to justice. . • Simple and faster mechanism • since it is a welfare legislation the interpreted to the benefit of the consumer.

quantity. • Protection from goods which are dangerous to life and property. • To be informed about the quality.potency.COPRA PROTECTS FOLLOWING RIGHTS OF CONSUMERS.standard and price of goods • To have competitive price • The consumer interest will receive proper consideration .purity.

COPRA • The right to seek redressal against unfair trade practices/exploitation. • The right to consumer education. .

• b) to consider such complaints and facilitate their : I) satisfaction or • ii)settlement by agreement or • iii) by making a recommendation or • iv) award .THE BANKING OMBUDSMAN SCHEME 1995 • POWERS AND DUTIES • a) to receive complaints relating to banking services.

.and for charging of commision in respect thereof.etc.Non payment/inordinate delay in payment or collection of cheques.of small denomination notes tendered for any purpose. • 2.Non -acceptance .Ombudsman’s authority include • All complaints concerning deficiency in service.such as: • 1.drafts/bills. without sufficient cause.

issue of drafts to customers and others • 4.letter of credit commitments by banks.Non.Non-adherence to prescribed working hours by branches • 5.Failure to honour gurantee .All complaints concerning deficiency in service .such as: • 3. .

Complaints pertaining to deposit accounts.Claims in respect of unauthorised or fradulent withdrawals from deposit accounts. .OMBUDSMAN • 6.etc • 7. • 8.Complaints from exporters in India pertaining to the bank’s operations in India.

. deposits and other bank-related matters.OMBUDSMAN • Complaints from Non -Resident Indians having accounts in India in relation to their remittances from abroad .

• 2. .Non observance of RBI directives on intt rates.Complaints concerning advances only in so far they relate to: • 1.Delays in sanction/non-observance of prescribed time schedule for disposal of loan application • 3.Non observance of any other directions or instructions of RBI as specified for the purpose.

.Pre-requisite for filing a complaint with the Ombudsman • 1.The complainant should have filed a complaint with the bank in writing and • either the bank had rejected the complaint or • the complainant had not received any satisfactory reply within two months.

Pre requisites for filing complaint • 2.The complaint should be made not later than one year after the bank had rejected the representation or sent its final reply on the representation of the complainant. .

. • The BO must strive to promote a settlement of the complaint by agreement between the complainant and bank through concillation or mediation.Settlement of complaint • The BO must notify the branch or office of the bank named in the complaint about the receipt of complaint along with a copy of the complaint.

. BO may follow any appropriate procedure.PROCEDURE • For the purpose of promoting a settlement BO is not bound by any legal rule of evidence . • BO will pass an Award after affording the parties reasonable opportunity to present their case.

LEGAL PROTECTION TO CUSTOMERS • Right to information act • Lenders’ liability act .

WORD OF MOUTH IS VERY POWERFUL. Jeff Bezos .CUSTOMERS TELL EACH OTHER ABOUT THAT .QUOTES • • • • • IF YOU BUILD A GREAT EXPERIENCE.

• Donald Porter .QUOTES • Customers don’t expect you to be perfect • They do expect you to fix things when they • go wrong.

the harder it is to • produce outstanding customer service. • William H Davidow .QUOTES • The longer you wait.

• Anonymous .fears and aspirations. • problems.QUOTES • Customer service is awareness of needs.

QUOTES • • • • • • Quality in service or product is not what you put into it. It is what the client or customer gets into it Peter Drucker .

QUOTES • • • • • • Our greatest asset is the customer. . Treat each customer as if they are the only one! Laurice Leito.

QUOTES • It takes less effort to keep an old customer satisfied • than to get a new customer interested • Robert Half .

. the way you handle your employees is the way they will handle (manhandle) your customers.HORRELL” .QUOTES • • • • What you give is what you you get returned I.D.e. • “E.

• “Don Silvensky” • (CEO MicroteTek) .QUOTES • HAPPY STAFF • MAKES CUSTOMERS HAPPY.

CONSUMER AND MARKET SEGMENTATION .

• Each potential buyer has individual needs and desire and specific circumstances that effect his purchasing and consumption behaviour.CONSUMER & MARKET SEGMENTATION • The market for product or service is not one homogenous mass of customers. .

.CONSUMER & MARKET SEGMENTATION Market segmentation is the division of the total market into several relatively similar and meaningful groups.

• but rather with distinguishing customer needs or interests. • starts not with distinguishing product possibilities. • the well tested system for guiding marketing strategy. .CONSUMER & MARKET SEGMENTATION • Market segmentation.

Therefore target segments which a bank wants to pursue may be defined by : Age/Income/Occupation/Education contd… .APPLICATION OF SEGMENTATION TO BANKING 1) The most commonly applied application in Banking in the category of deposits is by demographic variables.

APPLICATION OF SEGMENTATION TO BANKING 2) For example.000 p. a typical definition for a target segment for deposit customers could be :.Individuals (within a city/locality) .Income Rs.Occupation Salaried Individuals .a.Age Group 20 to 55 years . + .100.Education Graduates contd… .

APPLICATION OF SEGMENTATION TO BANKING 3) Very often target segments could be defined by profession : Doctors Chartered Accountants Lawyers Consultants contd… .

APPLICATION OF SEGMENTATION TO BANKING 4) Other organizations and non-profit entities to whom banks market : Trusts Associations. Societies Schools. Colleges Small Establishments – like shops contd…. .

Catholics. .  Very often localities have a skew of ethnic/community groups like Gujarathis. Tamilians – this forms a basis also for target segmenting contd….APPLICATION OF SEGMENTATION TO BANKING 5) Since location is a great influencer in Retail Banking – “Locality mapping” is undertaken. Sindhis.

Demographic .Geographic Mapping .Community clusters .Listing of entities contd…. .APPLICATION OF SEGMENTATION TO BANKING 6) In Retail Banking – Segmentation is done at various levels so that it actually provides proper guidance to the marketing staff : .

the target segment of companies could be defined by the following variables : Location Sales turnover Industry category Number of employees .APPLICATION OF SEGMENTATION TO BANKING 7) For corporate lending.

MARKETING MIX • Marketing tools in relation to products. known as the Marketing Mix. contains four elements : i) ii) iii) iv) Product Price Place Promotion Customer Solution Customer Cost Convenience Communication contd … .

• Channels of distribution should be thought of as means to increase •the availability and/ or convenience of service that help in satisfying the need of the existing user or increase their use among the existing or new customers. one of the„P‟s in marketing mix. .CHANNELS OF DISTRIBUTION •Distribution refers to “Place”.

Various characteristics of services also had a lot of say in restructuring the channels of distribution .CHANNELS OF DISTRIBUTION  Branches have been the delivery system for Banking.

Housing Finance Branches. the technological evolution has brought a great change and development of innovative channels of distribution. SME Branches contd… . • The types of Branches in operation include : .Full Service Branches .Specially Branches like Corporate Banking Branches.CHANNELS OF DISTRIBUTION • However.Limited Service Branches (SPOKES) linked to Main (HUB) branches . NRI Branches.

CHANNELS OF DISTRIBUTION Electronic Banking Services include :- a) b) c) d) e) ATMs Intelligent Terminals Home Banking Telemarketing Internet Banking .

MARKET SEGMENTATION-QUESTIONS 1.The aggregation of a heterogeneous market into two or more relatively homogeneous and meaningful groups is called : a) consumer groups b) market groups c) market segmentation d) market and consumer groups .

The aggregation of a heterogeneous market into two or more relatively homogeneous and meaningful groups is called : a) consumer groups b) market groups c) market segmentation d) market and consumer groups .MARKET SEGMENTATION-QUESTIONS 1.

Market segmentation begins with which of the following : a) distinguishing product possibilities b) distinguishing customer needs or interests c) distinguishing service range d) any of the above .MARKET SEGMENTATION-QUESTIONS 2.

MARKET SEGMENTATION-QUESTIONS 2. Market segmentation begins with which of the following : a) distinguishing product possibilities b) distinguishing customer needs or interests c) distinguishing service range d) any of the above .

MARKET SEGMENTATION-QUESTIONS 3. Which of the following is the important aspect used to segment a market: a) significantly related to buying and consumption behaviour capable of being used in design and implementation of marketing strategy b) identifiable and measurable without great effort c) capable of being used in design and implementation of marketing strategy d) all of the above .

MARKET SEGMENTATION-QUESTIONS 3. Which of the following is the important aspect used to segment a market: a) significantly related to buying and consumption behaviour capable of being used in design and implementation of marketing strategy b) identifiable and measurable without great effort c) capable of being used in design and implementation of marketing strategy d) all of the above .

When one product or service can serve most or all of the market. the segmentation is : a) least possible b) more desirable c) not feasible d) not possible . usually.MARKET SEGMENTATION-QUESTIONS 4.

the segmentation is : a) least possible b) more desirable c) not feasible d) not possible .MARKET SEGMENTATION-QUESTIONS 4. usually. When one product or service can serve most or all of the market.

Which of the following can be categorized as benefit of non adoption of market segmentation : a) economies of scale b) standardization of product c) minimal inventories d) all the above .MARKET SEGMENTATION-QUESTIONS 5.

MARKET SEGMENTATION-QUESTIONS 5.Which of the following can be categorized as benefit of non adoption of market segmentation : a) economies of scale b) standardization of product c) minimal inventories d) all the above .

heterogeneity and perishability .Which of the following is the prominent difference between the goods and services. inseparability. inseparability and nonperishability d) intangibility. which also suggests different marketing strategy: a) intangibility and separability b) inseparability and homogeneity c) intangibility.MARKETING MIX – BANK MARKETING-QUESTIONS 1.

MARKETING MIX – BANK MARKETING-QUESTIONS 1. inseparability and nonperishability d) intangibility. heterogeneity and perishability . inseparability.Which of the following is the prominent difference between the goods and services. which also suggests different marketing strategy: a) intangibility and separability b) inseparability and homogeneity c) intangibility.

Intangibility.MARKETING MIX – BANK MARKETINGQUESTIONS 3. inseparability and heterogeneity are manifested in services marketing. at which of the following levels: a) strategic level b) tactical level c) a and b both d) none of the above .

MARKETING MIX – BANK MARKETINGQUESTIONS 3. at which of the following levels: a) strategic level b) tactical level c) a and b both d) none of the above . inseparability and heterogeneity are manifested in services marketing.Intangibility.

Marketing mix represents a series of ------------------responses employed to implement a chosen strategy: a) tools b) measures c) tactic d) any of the above .MARKETING MIX – BANK MARKETINGQUESTIONS 4.

Marketing mix represents a series of -------------------responses employed to implement a chosen strategy: a) tools b) measures c) tactic d) any of the above .MARKETING MIX – BANK MARKETINGQUESTIONS 4.

MARKETING MIX – BANK MARKETINGQUESTIONS 5.component of any marketing strategy. a) important b) core c) latest d) first . Marketing mix is --------------.

Marketing mix is --------------.MARKETING MIX – BANK MARKETINGQUESTIONS 5.component of any marketing strategy. a) important b) core c) latest d) first .

NEW CHALLANGES IN BANK MARKETING • YOUNG CUSTOMERS • TECHNOLOGY • NON BANKING PRODUCTS (INSURANCE.MUTUAL FUNDS ) • PHYSICAL PRODUCTS (GOLD COINS etc) .

the boss liked the Indian chappie so he gave him the job.. I'll come down after we close and see how you did.Real Marketing-How to market all our products to single customer • Manager of a Retail store in US asks: "Do you have any sales experience?" The Indian says: "Sir. I was a salesman back home in India.“ • Well." . "You start tomorrow.

you'd better be doing better than just one sale.Real Marketing-How to market all our products to single customer • His first day on the job was rough but he got through it. Just ONE sale. the boss came down." The boss says: "Just one? No! No! No! You see here our sales people average 20 or 30 sales a day. • After the store was locked up." If you want to keep this job. "How many sales did you make today?" Indian boy says: "Sir. .

Real Marketing-How to market all our products to single customer • By the way, how much was the sale for?" Indian boy says: " $101 237. 64"
Boss says: "$101 237. 64? What the hell did you sell

Real Marketing-How to market all our products to single customer • Indian boy says: "Sir, First I sell him small fishhook. Then I sell him medium fishhook. Then I sell him large fishhook. Then I sold him new fishing rod and some fishing gear.

Real Marketing-How to market all our products to single customer • Then I ask him where he's going fishing and he said down on the coast, so I told him he'll be needing a boat, so we went down to the boating department and I sell him twin engine Chris Craft.

.Real Marketing-How to market all our products to single customer • Then he said he didn't think his Honda Civic would pull it. so I took him down to our automotive department and sell him that 4X4 Blazer.

and since he had no accommodation. I took him to camping department and sell him one of those new igloo 6 sleeper camper tents. .Real Marketing-How to market all our products to single customer • I then ask him where he'll be staying.

while we're at it. .Real Marketing-How to market all our products to single customer • Then the guy said. I should throw in about 100 worth of groceries and two cases of beer.

Real Marketing-How to market all our products to single customer • The boss said: "You're not serious? A guy came in here to buy a fishhook and you sold him a boat. a 4X4 truck and a tent? .

actually he came in to buy Anacin for his headache. fishing is the best way to relax your mind.Real Marketing-How to market all our products to single customer • Indian boy says: "No Sirji." . and I said: Well.