service marketing in banking sector
TRANSCRIPT
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SERVICE MARKETING IN
BANKING SECTOR
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INTRODUCTION
The name bankderives from the Italian word banco.
In fact, the word traces its origins back to the Ancient RomanEmpire, where moneylenders would set up their stalls in themiddle of enclosed courtyards called macellaon a long bench
called a bancu, from which the words bancoand bankarederived.
"banking business" means the business of receiving money oncurrent or deposit account, paying and collecting cheques drawnby or paid in by customers, the making of advances tocustomers, and includes such other business as the Authoritymay prescribe for the purposes of this Act.
http://en.wikipedia.org/wiki/Italian_languagehttp://en.wikipedia.org/wiki/Macellumhttp://en.wikipedia.org/wiki/Macellumhttp://en.wikipedia.org/wiki/Italian_language -
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DEFINITION
Bank marketing does not only include service
selling of the bank but also is the functionwhich gets personality and image for bank on
its customers mind.The reasons for marketing
Change in demographic structure: Intense competition in financial service sector:
Banks wish for increasing profit:
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Major Players
Global
JP Morgan Chase
Bank of America
HSBC Citigroup
Deutsche Bank
Goldman Sachs
Morgan Stanley Merrill Lynch
BNP Paribas
Indian
SBI
ICICI
PNB HDFC
Bank of Baroda
Corporation Bank
IDBI Axis
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RECENT INNOVATION &
DATA
Only HSBC and American Express received a AAA creditrating. The highest rating an Indian bank got in the list is AA forState Bank of India.
The top Indian bank in the list is State Bank of India ranked at
69. Its is ranked at 60 in 2008 because the valuation was donefor the group of all the State Banks. Valuation for 2009 is donefor SBI alone.
The next bank in the list is ICICI Bank which is the largestprivate sector lender.
HDFC bank is the 3rd Indian bank in the list.
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Bird View
Name of bank Global loss Indian gain
USB $18billion $15.4Million
Credit suisse $7.22billion $6.4Million
HSBC $9.3billion $666Million
CITIGROUP $9.83billion Rs1,710CR
MORGANSTANLEY
$2.1billion $17.69Million
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India - Strategic Map
ServiceQu
ality
Rural Urban
Low
High
Regional
Citibank
ABN Amro
State Bank of India
ICICI Bank
HDFC
IndusInd Bank
Vysya Bank
Karur Vysya
PNB
Andhra BankCanara Bank
Co-operative Banks
Rural Banks
Bank of Baroda
Bank of India
Stan C
HSBC
Geographical Spread
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MARKETING MIX
PRODUCT/SERVICE:
A product is anything that can be offered to a market forattention, acquisition, use or consumption that mightsatisfy a want or need
Recently, banks are in a period that they earn money inservicing beyond selling money. The prestige is get as theyoffer their services to the masses.
Like other services, banking services are also intangible.Banking services are about the money in different types
and attributes like lending, depositing and transferringprocedures.
Besides the basic attributes like speed, securityand ease inbanking services, the rights like consultancyfor services tobe compounded are also preferred.
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PRICE:
The prices in banking have names like interest, commissionand expenses.
Price is the sole element of marketing variables that createearnings, while others cause expenditure. While marketingmix elements other than price affect sales volume, priceaffect both profit and sales volume directly.
Banks should be very careful in determining their pricesand price policies. Because mistakes in pricing causecustomers shift toward the rivals offering likewiseservices.
Traditionally, banks use three methods calledcost-plus,transaction volume baseand challenging leader in pricing of their services.
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PLACE
The complexity of banking services are resulted fromdifferent kinds of place. The most important feature ofbanking is the persuasion of customers benefitingfrom services.
Branch offices use traditional method in distributionof banking services.
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Promotion mix
AdvertisingPersonal
selling
SalesPromotion
PublicRelations
DirectMarketing
Blended Mix of Promotion Tools
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You see a gorgeous woman at a party.You go up to her and say, "I'm fantastic."
That's Direct Marketing.
You're at a party with friends and see a gorgeous girl.
One of your friends goes up to her and pointing at you says, "He's fantastic."
That's Advertising.
Cont.
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You're at a party and see a gorgeous girl. You get up and straighten your tie, you walk
up to her and pour her a drink. You open the door for her, offer her a ride, and then
say, "By the way, I'm fantastic."
That's Public Relations.
You're at a party and see a gorgeous woman. She walks up to you and says "I hear
you're fantastic."
That's Brand Recognition.
Cont.
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One of the most important element of marketing mix of servicesis promotion which is consist of personal selling, advertising,public relations, tools.
PERSONAL SELLING:
Personal selling occurs in two ways.
First occurs in a way that customer and banker performinteraction face to faceat branch office. In this case, wholepersonnel, bank employees, chief and office manager, takespart in selling.
Second occurs in a way that customer representatives go tocustomers place. Customer representatives are specialist inbanks services to be offered and they shape the relationshipbetween bank and customer
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Cont.
Advertising
1. Conceive customers to examine all kinds of services that banksoffer
2. Increase use of services3. Create well fit image about banks and services4. Change customers attitudes5. Introduce services of banks6. Support personal selling
7. Emphasize well service
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PUBLIC RELATIONS
1. Establishing most effective communication system.
2. Creating sympathy about relationship between bankand customer
3. Giving broadest information about activities of bank.E.g providing all kind of schemes and activitis online,also atthe inquiery counter.
SELLING PROMOTIONAL TOOLS
Another element of the promotion mixes of banks isimprovement of selling. Mostly used selling improvementtools are layout at selling point, rewarding personnel,seminaries, special gifts, premiums, contests.
Cont.
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PEOPLE
People are important for bank means as an employeeas well as customer.
For hospitality and customer relations it is veryimportant to focus on people.
It also plays a vital role in quality control, personalselling, and employee morale.
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PHYSICAL EVIDENCE
In Banking the physical evidence is basicallydepends on customers experience,their
feedback.
Here, the core product is the satisfaction of
customer. Another evidence are the leaflets
,broucher,schemes,
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Process :Process determines the efficiency of banking
operations and thus the service quality in a bank.
Tele-bankingATMs
Computerization (core banking)
Plastic Cards
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MARKET SEGMENTATION
Banks should care about following criteria for selection of media.
1. Which media the target market prefer2. Characteristics of service3. Content of message4. Cost5. Situation of rivals
Ads should be mostly educative, image making and provide theinformation as follows:
1. Activities of banks, results, programs, new services2. Situation of market, government decisions, future developments3. The opportunities offered for industry branches whosedevelopment meets national benefits.
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MARKET TARGETING
Evaluating Market Segments
Selecting Market Segments
Choosing a Market-Coverage Strategy
Targeting Process:[1] Classify the locations according to the service
requirements[2] Select the target group of customer
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POSITIONING
Products can be positioned on specific attributes oragainst another product class.
"Without a position, it is almost impossible to achievea meaningful and sustainable point of differentiation."
Product Differentiation:
Image Differentiation
Location Differentiation
Service Differentiation
Physical Attribute Differentiation
Personnel Differentiation
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Business Process - Transactions
Bank CustomerMFI Agent
Transaction Data
Bank Systems
BC Systems
Cash
Instant ReceiptTransactionstored on card
Transaction Datatransferred viaphone lines
Updates forCustomer
Cash
Bank Branch
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STP
SBI offers to its customers.
DOMESTIC TREASURY
SBI VISHWA YATRA FOREIGN TRAVEL CARD
BROKING SERVICES REVISED SERVICE CHARGES
ATM SERVICES
INTERNET BANKING
E-PAY
E-RAIL RBIEFT
SAFE DEPOSIT LOCKER
GIFT CHEQUES
MICR CODES
FOREIGN INWARD REMITTANCES
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DEVELOPMENT IN MARKETING SCOPE
INTERNAL MARKETING
For personnel of the organization to be consideredtheir own goals and service situation, values of theorganizationare sold to them.
The communication techniques carried out forcustomers are also performed for the personnel ininternal marketing and this two techniques gotogether.
For example, the ads that aim creating firmsimage should be prepared with regarding toaudience which is composed of firms personnel.
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NETWORK MARKETING
This approach takes the organization as asequence which involves producer and
customer that market services to each otherin the organization.
In this structure, the activities of departmentsthat compose organization would be morefocused on market. This will also affect thestructure of organization.
Cont.
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RELATIONSHIP MARKETING
It was mentioned that close relationship was establishedbetween producer and customerin service sector. Inaddition to this, life cycle of a customer relationship was
also mentioned under the product outline.
According to the researchers, maintaining therelationship for extant customer increases the profitoffirms.
It should be emphasized that this fact has an importancefor service sector.
Cont.
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Life cycle of a customer relationship is composed of threestages.
At the first stage, firms try to be well knownand to acquirenew customers.
At the second stage, the connectionbetween customerand bank has been achieved. During the stage, bankintensified their activities on acquired customers and bothof them promises mutually.
At the third stage, these promises are accomplished andthe service is consumed. During the stage, firms faceReality Instants which could possibly achievesatisfaction of customer and continuous relationship.This could be also true for second stage. So, theseinstants should be managed successfully.
Cont.
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List of 17 Indian banks in the global 500 :
State Bank of India ICICI Bank HDFC Bank Punjab National Bank Bank of India Canara Bank Bank of Baroda Axis Bank Kotak Bank Union Bank of India Indian Overseas Bank
IDBI Bank Limited State Bank of Patiala Indian Bank Power Finance Corp Oriental Bank of Commerce Syndicate Bank
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SWOT ANALYSIS.
STRENGTHS
Indias developing economy
Small scale, medium scale,& large scale industries financial support by government,
Providing global market.
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WEAKNESSES
Lack of adequate infrastructure.
Complex information system.
Delayed process
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OPPORTUNITIES
More proactive role from the government of India interms of framing policies.
Allowing entry of more multinational banks into thecountry giving us a global perspective.
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THREAT
Global player can be capture the whole market
Personal financers
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CONCLUTION
The banking industry has changed drasticallyoverthe past decade. The banking reforms and theopening of the economy to foreign and private bankshave improved the workingof the public sector
banks.
Increased competition and technologyhaveenhanced the quality of service offered to the
customers and also improved the returns for bankers.
BANKING IS THE BUZZ WORD
IN INDIAN ECONOMY