MARKETING OF BANKING SERVICES

Group I

Abhishek I Aditi Gowda I Amrutha I Anil A M I Anju A M

INTRODUCTION TO BANKING SECTOR (INDIA)

Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India Banking Industry is one of the most important service industries. The Indian banking sector comprises 26 state sector banks, besides a number of private as well as co-operative sector players.
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INTRODUCTION TO BANKING SECTOR (INDIA) CONTD.

In the last decade, the sector witnessed many positive developments the growth is well reflected through parameters including profitability, annual credit growth, and decline in non-performing assets (NPAs). India has the potential to become the third largest banking sector by 2050 after China and US, according to a PricewaterhouseCoopers (PwC) report titled Banking In 2050.
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MERGING MARKETING & BANKING

Before the mid 1950's the banks had no understanding or regard for marketing Marketing approach in banking sector had taken significance after 1950 in western countries and in the late 1950 onwards in India. Banks had started to perform marketing and planning techniques in banking in order to be able to offer their new services efficiently. Marketing scope in banking sector should be considered under the service marketing framework. 4

MERGING MARKETING & BANKING(CONTD.)

Bank marketing does not only include service selling of the bank but also is the function which gets personality and image for bank on its customers mind.

REASONS FOR IMPORTANCE OF MARKETING IN BANKING

Change in demographic structure Intense competition in financial service sector Banks wish for increasing profit To protect and develop their market shares Like all other services it becomes important to market in order to tangibilize complexity of banking services.
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MARKETING MIX IN BANKING SECTOR

PRODUCT
Banking services are intangible. Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. These intangible services are shaped in contracts.
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PRICE
Banks have to estimate the prices of their services offered. The prices in banking have names like interest, commission and expenses. Traditionally, banks use three methods called cost-plus, transaction volume base and challenging leader in pricing of their services.
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DISTRIBUTION/PLACE
The place where the banking products or service are delivered is an important element in bank marketing. Extension counters/satellite offices Special counters/specialized branches ATM/Tele banking/home banking Strategic alliances Mobile offices
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PROMOTION
When bank comes out with a new product, it makes its target customer segment aware of it only through marketing promotion. It consists: Personal selling Advertising Public relations Selling promotional tools
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PROCESS
The process is a crucial element which gives value to the buyer and an element of uniqueness. It provides competitive advantage to the bank. The importance of process in bank marketing strategy is based on 'value chain concept' given by Michael Porter. The concept basically stresses close attention to all the organizational activities which go into marketing the final product to the customer.
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PEOPLE
Like any other service industry, banking is a labor intensive industry. Each employee in a bank is both a recipient and provider of service. Unless each employee extends support to his colleagues and also receives support from them, workflow will get obstructed and the victim will be the customer. In other words to satisfy a customer, people who participate this must be right and apt ones.
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PHYSICAL EVIDENCE
Physical evidence is the strategic tool for the bank marketer. Banking products are intangible. Tangibilising the intangible commodity is a major challenge to the bank marketer. One among the important methods is the upkeep of branch premises and interior decor. This is relevant not only from the point of view of physical evidence but also for tangibilisation strategy. Another strategy is imaginative designing of bank stationery used by customers. Product packaging could be another tangibiIisation strategy and marketers called it a s a separate 'P' of marketing strategy. Packaging in banking products could take many ways for instance an attractively designed product brochure or a catchy brand name which a customer can easily understand or a pictorial design which can represent a particular product

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RECENT TRENDS
Market focus is shifting from mass banking products to class banking with introduction of value added and customized products.

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REAL WORLD EXAMPLES

Credit card companies such as Citibank, which recently tapped the high networth clientele (First Citizen shoppers) list of Shoppers' Stop to issue complimentary credit cards as virtual new year's gift to them, down to astrology portals such as Ganeshaspeaks.com which in a tie-up with Hutchison India offered astrological services to all its subscribers.

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HDFC
Mr Ajay Kelkar, Vice-President and Head, Marketing HDFC Bank said, "We are looking at positioning HDFC as a one-stop financial supermarket and the objective of the promos is not just acquisition of new customers, but we are also looking at creating product awareness, enhancing usage and also providing value-adds to our customers to reward them for their faith and loyalty."
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HDFC(CONTD.)
He said that below-the-line promotions constitute a major part of the bank's overall marketing plans this year, and therefore, a large percentage of the marketing budget is allocated to promos. "These promotions are conducted based on the results thrown up by data analysis and data mining. Therefore, they are intended to have maximum impact on our target audience."

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ICICI
Leading financial institutions like ICICI have begun to adopt similar marketing strategy. When India's leading customized jewellery designer, Ms Poonam Soni, decided to host a major show in Mumbai for unveiling her new collection called "Woven Hues" for a select audience, she found the ICICI Bank team more than eager to be associated with her brand Signature Line. The ICICI Bank's target was the high networth individuals who attended the show in Mumbai on July 10. Ms Poonam Soni said, "ICICI definitely got their share of branding without interfering with our logistics. Apart from the fact that my clientele is very niche, the presence of former Miss Universe Lara Dutta and lots of celebrities aptly met their marketing requirement."
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CONCLUSION
Today, marketing services are of great emphasis on both customer and bank. The quality and quantity of banking products increased and a result of this, recent developments in marketing thoughts in services such as internal marketing, network marketing, data base marketing and relationship marketing became more favorable practices.
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CONCLUSION
Successful marketing in a bank calls for commitment at all levels to the task. Achieving higher business standards and operational performance through marketing of banking services should be one of the directional goals of the organization. In conclusion, it may be understood that the success of marketing of banking services depends on how the organization properly blends the marketing concepts with the right approach required to penetrate into each market segment.
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THANK YOU

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