Principles and

Practices of
Banking:
Support Services- Marketing of
Module
D
Banking Services/Products

Marketing Concept

Market

Types of Market

Geographical Area

Product

Nature of Transaction

Volume of Transaction

Marketing

Evolution of Modern Marketing

Marketing A Management Function/ A Business

Philosophy

Selling Vs Marketing

EVOLUTION OF MODERN MARKETING

Industrial revolution

Barter System

Digital revolution

Customer and market driven

Wants of customers

CRM

Customer Satisfaction

Nothing is worthwhile unless it touches the customer

Selling
Selling is an
operational activity

Marketing
Marketing is a total
management
Marketing is customer
focused

Selling is product
focused
Selling is oriented to
Marketing is oriented
the needs of the firms to the needs of the
buyer
Selling encashes
profitable opportunity

marketing coverts
customer needs into
such opportunities

Selling aims at
maximizing sales
volume

Marketing aims at
maximizing customer
satisfaction

Marketing Management

Process of planning and executing the conception,

pricing, promotion and distribution of goods,
services and ideas to create exchanges with target
groups that satisfy customer and organizational
objectives.

Functions of Marketing management:

Analysis

Planning

Implementation

Control

Importance of Marketing for Indian Banks

Products and Services

Physical Products

Services

Tangible

Intangible

Homogenous

Heterogenous

Production and Distribution

are separate

Production and Distribution

are simultaneous process.

Core value produced in

factory

Core value produced in

buyer-seller interactions

Customers do not participate

in production

Customers participate in
production process

Can be kept in stock

Cannot be kept as stock

Transfer of ownership

No transfer of ownership

Classification of Goods

Pure tangible goods: Tangible good with no service

Tangible goods with accompanying services

Hybrid: Equal parts of goods and services

Major Service with accompanying minor tangible

goods: Consultancy

Pure Service: Teaching

Servuction Process

Combination of Services

Marketing of Financial
Services

Fiduciary Responsibility

Implication of Intangibility, inseparability and

heterogeneity are manifested at both strategic and
tactical levels in services marketing.

Marketing strategy provides the organization with a

sustainable competitive advantage in the markets it
operates.

Organization should understand consumer needs

and identifies how those consumers should be
grouped into different market segments.

Product attributes, pricing decisions, methods of

distribution and communication should all seek to
reflect the chosen position.

Financial Markets in India

Credit Market

Equity and term lending market

Gilt Edged Securities market

Insurance market

Mutual Funds

Consumer finance market

Money market

Debt Market

Leasing and hire purchase

Foreign Exchange Market

Stock Markets

Marketing Mix

Tools

Four Ps
Product Customer needs and wants
Price Cost to the customer
Place - Convenience
Promotion Communication

Four As
Acceptability
Affordability
Accessibility
Awareness

Services Marketing Mix

7P Marketing Model

Product

Price

Promotion

Place

People

Physical Evidence

Process

Consumer Behavior and

Product

Consumer Behavior

Customer is King of the market

Product should have desired effect on the customer.

Understanding the consumer behavior is most

important to understand the product development and
management.

Maslows Hierarchy of Needs

Physiological needs Food, Drink oxygen and sleep

Safety Needs Economic security

Social needs Friendship, Affection and sense of belonging

Esteem Needs Self Esteem

Self Actualization Self-fulfilment

Family Life Cycle

Young Bachelor

Half Nest

Full Nest

Empty Nest

Customer Relationship
Management

Long Term Customer Retention

Relationship with external Market who influence or

provide referrals

Integrating marketing activities, customer service

and quality standards

Gap Analysis

First Expectation of customer and perception of

company about consumer expectations

Second Service design and standards

Third Delivery of service

Fourth Service Delivery and External

Communication

Fifth Expected services and perceived services

Product

Product Personality

The Core Features

The Associated Features

The Brand Name and Logo

The Package and Label

Product Levels:

Core Benefit

Basic Product

Expected Product

Augmented Product

Potential Product

Product Categories

Non durable Goods

Durable Goods

Services

Consumer Goods

Industrial Goods

Product Item, Line and Mix

Product Life Cycle

Introduction

Growth

Maturity

Decline

Characteristics

Profit

Strategic Thrust

Customer Targets

Competition

Differential Advantage

Process of Product
Development

Idea Screening

Concept testing

Product Development

Test Marketing

Commercial Launch

Product Strategies

Quality improvement

Feature Improvement

Style Improvement

Product Elimination

Diversification

Other Aspects of Product Development:

Branding

Packaging

Labelling

Pricing

Importance of Pricing:

Price is the amount of money charged for a product/service.

Doesnt only recover cost but also generate expected

income with repeat orders.

Objectives of Pricing:

Profits

Survival

Market Share

Cash Flow

Status quo

Product Quality

Communicating Image

Objectives

Long Term

Short Term

Profit Maximisation

Profit optimization

Minimum return on sales

turnover

Minimum return on
investment

Achieving a particular sales

level

Achieving a particular
market share

Deeper Penetration of the

market

Entering new markets

Providing
commodities/services at
prices that will stimulate
economic development

Stabilising prices and

margins in the market

Keeping parity with

competition

Fast turnaround or early

cash recovery

Factors Influencing Pricing

External

Internal

Objectives of the firm- both

corporate and marketing
Characteristics of the
product

Market Characteristics

Buyers Behavior

Competitors policy

Government Controls and

regulations

Life Cycle Stage

Usage Characteristics

Social considerations

Price Elasticity

Bargaining power of suppliers

Costs of Manufacturing and

marketing the product

Understanding with price

cartels

Composition of product line

of the firm

PRICING METHODS

Mark up Pricing

Absorption cost Pricing

Target Return Pricing

Marginal cost Pricing

Perceived Value Pricing

Value Pricing

Going Rate Pricing

Auction Type Pricing

English Auctions: One Seller Many buyers

Dutch Auctions: One Seller many buyers and many sellers one
buyer

Sealed Bid Auctions: Each seller is permitted to bid only once

and they are not aware of the bid submitted by other sellers.

Group Pricing

Pricing Strategies
Geographical pricing
Price discount and allowances
Psychological pricing
Promotional pricing
Loss-leader pricing
Special event pricing
Cash rebates
Low-interest financing
Longer payment terms
Warranties and service
contracts
Psychological discounting

Pricing Strategies (Contd.)

Discriminating pricing
First degree
Second degree
Third degree
Customer groups
Product form
Image pricing
Channel
Location
Time

Pricing Strategies (Contd.)

Product-mix pricing
Product line pricing
Captive-product pricing
Two-part pricing
By-product pricing
Product-bundling pricing

Market skimming pricing

Market-penetration pricing

Bank Pricing

There are two major costs, which have to be

considered while pricing bank products:

Interest cost

Servicing cost

Interest cost constitutes 67 % of the price and

service cost is around 33 % in any bank product.

Other Factors are:

Risk and Return

Monetary policy

Capital Adequacy

Cost Benefit Analysis

Distribution

The various distribution methods for delivering a

product to a customer (noit doesnttalk
abouttransportit
means
the
channels
for
distribution)

Distribution Channels are mainly a method by which

a product is delivered to the final consumer. The
channel plays a very important role.

Basic Functions of
Distribution Channels

Collection of market informationliking of people the trend of

buying etc.

Promotionthe word describes itself.

Contact: locate and communicate with the buyers.

Match the product to the customers needs.

Negotiation: settle for the final price

Product Information: provide detailed info about the product to

customers.

Physical Distribution: Physically distribute the product

Financing: Credit to retailer, intermediaries buy the product in

bulk, etc.

Risk Taking

Channel Types

Direct Channel (Zero Level): Consists

ofManufacturer and buyer

Indirect Channel:

One Level:Manufacturer, Retailer and then buyer

Two level:manufacturer, Wholesaler, Retailer

Three Level:Manufacturer, Wholesaler, Jobber*,

Retailer

Factors Influencing Channel

Selection

Product Characteristics

Market Characteristics

Customer Characterisitics

Company Resources

Competition

Product Lines

Channels For Banking

Services

Branches

ATMs

Telephone Banking

Internet Banking

Plastic Cards

Virtual Branches/Automated Video Banking

Channel Management

Channel management is also called as IT channel

management, distribution channel management,
channel sales management and sales channel
management.

Channel levels:

Zero level

One level

Two level

Three level

Channel Dynamics

Vertical marketing system (VMS)

Horizontal marketing system:

Eg. Deposits and advances channeled through branch

offices

Two or more unrelated companies put together

resources to exploit emerging market opportunities

Multi-channel marketing systems

Using one or more channel to reach the customer

Advantages:
The Interwoven channel Management
(ICM) connects businesses with their
direct and indirect channels through
information, business processes and
sales applications to streamline the sales
process and realize more profitable
channels.

Promotion

Definition

Promotion is the exercise of communicating properties

ofdifferent elements of marketing mix to customers with the
intention of influencing them.

Aim
Although the aim is quite clear, i.e.to sell a productand
also, to get more customers but still:

Persuasion: To persuade customers to buy something

Informthe customers about the prospects and make him aware

Remind:Keep on reminding him about the product and

servicesand keep irritating him(Strict No to last action).

Reinforce:Reinforce Customer Satisfactionin simple words

get feedback and try to improvise for future.

Promotion mix
Blended Mix of Promotion Tools
Personal
selling

Advertising

Public
Relations

Sales
Promotion

Direct
Marketing

Promotion mix strategies

Push strategy
Pull strategy
Factors influencing promotion mix
Types of product/market
Buyers readiness stage
PLC stage
Promotion mix integration

Direct Selling (DS):

It is also called as multi-level selling or network
marketing.
The company sells door to door or at home sales
parties.

Direct Marketing (DM):

It is an interactive marketing system that users one
or more media to affect a measurable response or
transaction at any location.

Relevance of DS/DM to
banks

Banks have transformed from a totally computed

environment to core banking system linking all the
bank branches as a single branch, data being
maintained at a nodal point termed as Centralized
Data Centre (CDC).

Benefits of DM

Saves Time

Convenient, Easy and Hassle Free

Various products for customer disposition

Real time, personalized customized marketing

Reduces operational cost

Various delivery channels to the customer

Deployment of available manpower for other jobs

Code of Conduct for

DSAs/DMAs

Tele calling a prospect

Leaving message

No misleading statement

Tele Marketing Etiquettes

Gifts or Bribes

Precaution to be taken on visits/contacts

Appearance and Dress code

Marketing Information System (MKIS)

Features of MKIS

Master Plan
Coordination
Future Orientation
Computerized Environment
Analyze Quantitative Information
Regular flow of Information

Functions of MKIS
Collecting and assembling data
Processing of data
Analysis of data
Storage of data
Discrimination of information

Need of MKIS
Complex marketing activity
Knowledge /information explosion
Communication gap
Prompt decision
Non-price competition

USAGE OF COMPUTERS IN MKIS

Hardware usage
Software usage
Frequency of computer usage
Communications of information
Sources of information
Support for marketing management
Support for marketing mix decision

Kinds of information needed

Information about market forces
Information about the banks market
behavior
Internal information
Components of MKIS
Internal marketing information
Marketing intelligence system
professional market research agencies like
ORG, MARG, IMRB, etc.
Marketing research system
information pertaining to specific marketing
problems.
Advantages of MKIS

Thank You
Presented by:
Ankita Surana
Contact Details:
Email: ankitasurana26@gmail.com
(M) - 9016674667