MARKETING OF FINANCIAL SERVICES

Marketing is concerned with Identifying customer needs and determining ways in which the organization is able to meet the needs in a profitable manner (both goods and service) are matched with market and through which the customers are able to enjoy the products. Marketing of financial services means marketing of something of a promise. The most important fact in marketing of the financial service is that setting of a promise complicate the task of a marketer since the marketer find it difficult to identify the time where the service states degenerating or where the service falls. !o thus marketing of financial services is considered as customer satisfaction engineering. The following are some of the important steps which an organization providing the financial services should take to embrace marketing. This first step is to define objective in clear and specific terms which could be achieved during a defined period of time. "or eg in the banking sector the bank should set up goals for the growth of deposits. The ne t step is to collect information about present and potential customers in order to identify their specific needs. Marketing is undertaken for this purpose and on the basis of market research appropriate financial products should be developed to satisfy the needs of different segment of customers. "or each segment identified the likely volume of business likely cost of reaching the business likely long term prospects of profitability and likely parameters of marketing strategy have been determined. The following model has been developed by #rthur Median is show the marketing approaches to a banking service. Identify the customer$s financial needs and wants. %evelop appropriate banking products and services to meet the needs of the customers. %etermine the prices for the products and services developed.

#dvertise and promote the products to the &'isting and potential customer of financial services.

!et up a suitable distribution channel and banking (ranches. "orecasting and researching of future market needs.

Nat!re of financial service Marketing The marketing of financial services re)uire a separate approach from the marketing of goods. !ervice are typically distinguished from goods on the grounds of Intangibility Inseparability *eterogeneity +erishability !imultaneity "iduciary responsibility

Intangi"ilit# This is the main distinguishing feature since services are processes on e'perience rather than physical objects and therefore cannot be processed. # customer may purchase a particular service that typically has nothing to display as a result of the purchase. It is important to remember that intangibility has essentially two meanings. #t one level it is concerned with the fact of service are impalpable in the sense it has no physical form. ,n the other sense intangibility cannot be defined and may be difficult to understand. Insepara"ilit#$% The second factor distinguishing financial services from goods is inseparability. !ervices are essentially acts and e'periences means that they must be produced and consumed simultaneously. &eterogeneit#$% The interaction between the consumer and service namely heterogeneity. The )uality of services typically depends on personal interaction as the conse)uences the chance of variability in service is very high. The characterization of service as an act rather than an object leads to the emphasis on the individuals providing the service and their interaction with the customer.

'eris(a"ilit#$% This is another goods.

distinctive feature namely perishability. !ervices are

produced on demand and cannot be inventoried so it needs a short distribution channel than

Si)!ltaneit#$- #nother distinguish feature of services is simultaneity. !ervices cannot be delivered to the customer or user. "or availing the services it is essential that the user are brought to the provider or the provider go to the users. Fi*!ciar# responsi"ilit#.- This is an additional feature of financial service marketing. In marketing of financial services fiduciary responsibility refers to the implicit responsibility of financial services organization for the management of the customers$ funds and the nature of financial advices supplied to the customers in terms of )uality reliability and safety of the products it supplies. The responsibility is much in case of financial organizations. In case of a bank the raw materials used to produce financial services are deposits of customers. In case of selling a loan product the bank as the responsibility to the person who are taking loan at the same time it has the responsibility to the person who had invested their money in the bank.

Marketing strateg#$ % Marketing strategy encompasses the /ps$ of the marketing mi' product price promotion and place and seeks 01$ attract the target audience. The design of a particular marketing mi' that will be used in based on the distinctive needs of the targeted market segment. T(e )arketing )i pro*!ct strateg# The success of a product is contingent on how will it compares with the competitor products in satisfying the target market needs or wants. 'ricing strateg# !elling a product at a price the target market seeks as same with the products previewed benefits is the key is the marketing success. 'ro)otion strateg# This focus on communicating the availability of products or service to the target market. #dvertising campaigns point of purchase materials and products publicity are the main elements of promotion. The development and the implementation of attention getting informative and persuasive communication techni)ues is vital to creating market awareness for the bank products. (ank$s typically communicate with the customer through print advertising in the newspapers and magazines. %irect marketing through direct mark and statements inserts and point of purchase advertising through (rokers and posters in the banks. 2ow the banking programmes and Internet are normally been used to communicate to the customers in the modern era of growth. 'lace or *istri"!tion strateg# This refers namely concerned with making the products available at the desired time and place the two important elements of the distribution strategy for the banks are site location and case of access. #s the result many banks have joined nation wide automatedteller-machine (#TM) networks to ma'imize the number of locations where the customers can access their banking need. Many banks now a days are providing telephone banking service and the banking services that enable the customers to perform the transactions and make the accounts en)uires 3/ hrs a days and 4-days a week.

+asic "ricks for )arketing strateg# !ome of the key elements which are the basis for formulating the strategies are as follows. 0. C!sto)er foc!s.- The customer focus is to be incorporated in marketing management and back office operations that has immediate access to the customers. 3. Capt!ring t(e gro,t( opport!nities .- In competitive world information technology is available to note what the competition offer. To gain upper hand any smart business unit should identify the new business opportunities and identically anticipate the new business opportunities and acute demand which are easily sale able to the customers and also evaluate the risk return scenario of the project. 5. S!ccessf!l *ifferentiation.- !uccess in competitive world information demands a unit ability to create a different product image in the minds of the targeted customer. The product offered by the company must be rated as different and superior to others in the line and should be priced competitively. /. Innovation an* )anage)ent a"ilit#$% 6ltimately the success of the firms marketing strategy depend on whether it is an innovative and the e'tend of its innovators. &'pertise management is the ability to operate with new and information customers and the market place. 7. -!alit# an* professionalis)$% Much more than in product markets service markets are prons on subject factors of image reputation )uality of services and the professions in the management. !ervice )uality delivery system and process and time liners and conformity with the specification are the pre-re)uisite for a successful marketing strategy. Seg)entation Market segmentation is an element of the marketing strategy recognizer the wisdom of specializing to suit the needs of a segment of market rather than trying to be 8all things to all people9. Market segmentation is the process of subdividing a market into groups of customers who have similar products or customer needs. Through segmentation it allows any subset of the market to be targeted with a distinct marketing ma'.

Marketing c!sto)er Infor)ative .MCIFs/ s#ste) is a software programme that organizes the information of the household and individual and sort or summarizes the information similarity and differences among the groups of customers. (ecause of this focus it also referred to as relationship management systems. T(e i)portance of MIFs$% M:I"s can greatly assist clear-customer focused marketing efforts. (anks use the information generated by M:I"s to identify profitable customers and single service customer as well as markets with potentials for cross sales activities. M:I"s system allows banks to identify the most and the least profitable products and branches as well. M:I"s system offers modeling capabilities that permit bankers to run test scenario that predict the effect that such changes as new fees increases in minimum balance re)uirement and declining cost will have on profitability. The data generated by an M:I"s are critical in preparing strategic reports too and are used to support strategic marketing Initiatives. Fo!r Con*itions for an Effective Seg)entation Firstl# the characteristics of a segment must be Identifiable and measurable. Secon*l# it should be accessible that means it must be possible to reach the segment effectively with proper marketing strategies. T(ir*l# the segment must have the potential to generate profile. Fo!rt(l# each segment should react uni)uely to different marketing efforts. ;hich means each segment should have potential customers who are responding )uickly Strategies for Market seg)entation Market can be segmented in a number of different ways. # bank should choose an approach that subdivides the market into groups that differ in some distinct way from one another in respect of their preferences. !ome principal !egmentation alternative are. <eographic !egmentation

%emographic !egmentation +sychographic !egmentation =olume !egmentation (enefits !egmentation Geograp(ic Seg)entation$% This divides the market according to the geographic units. # firm might decide to market different products in different areas or to market their products in certain areas since a bank cannot have location everywhere .It must be carefully allocate its limited resources to meet its business goals. It may locate its new branch offices in most promising geographic market area.

0e)ograp(ic Seg)entation$ % This categorizes the manner in terms of population characteristics. !uch as age se' income occupation and position in the life cycle. "or e'ample the banks establish an e'ecutive banking group specifically for accountants and doctors has taught an occupational segment. The bank also develop an e)uity credit line aimed at homeowners with income in e'cess of 51 111 is targeting another specific demographic segment

's#c(ograp(ic Seg)entation$% This enacts classifying the markets in behavioral terms according to life style socialism or personality profits. "or eg. # bank might identify the young professional on the fast react as the premier market segment for credit card sales.

Vol!)e Seg)entation$% This refers to the market attempt to distinguish heavy medium and users of a product. In much business a small proportion of the users generate a large portion of the sales. This is called 8pareto principle9.

+enefit Seg)entation$% This is the process of categorizing the market in terms of the man produce. >elated benefit sought by different groups for e'ample. # bank practices geographic segment the same bank may also practices industrial segmentation. ,nce an organisation has identified the markets segment the ne't slip is to select the target markets.

Financial service 'ro*!ct *esign 'ro*!ct # product is anything that can be offered to market for attention ac)uisition use or consumption that might satisfy a want or need. In a banking conte't all banking service (checking of savings a?c :,% !afe keeping service lock bo' operation cash management service are also products. "orm a marketing point of view a product has 7 different aspects. 0. 3. 5. /. 7. the core product the generic product the e'pected product the augmented product the potential products

T(e core pro*!ct. it is the essential benefit that the customer is buying eg. The conveniences of being able to pay for goods and services with che)ues

T(e generic pro*!ct. It provides that benefit eg. the basic product - che)ue T(e e pecte* pro*!ct$ % It includes the product features that customers assume will be part of the product &g.- +rompt and accurate clearance of che)ues accurate monthly statement and ability to access the amount through #TM! T(e a!g)ente* pro*!ct It includes all specific features and benefits that help the marketer differentiate the product from the comptetions &g. +ackage product unit accounts and can provide a number of customer benefits such as no annual fee credit cards loan discounts and bonus rates on :%$s

(anking products are augumented by the level and )uality of service provided to the customer the reputation of the bank physical environment of the bank the brochures and other printed materials provides to the customer and any specific brand names given to the products. T(e potential pro*!ct It includes all the modification that the product might undergo over time. &g@ #ccess through a special display telephone or an #TM that dispense a snap shot checking statement.

0evelop)ent an* test )arketing in financial sector !ome bank develop banking product or service delivery system that are new to the market. The following are the various stage in new pdt development 0. e'ploration and idea generation 3. product screening 5. concept of testing /. business analysis 7. product development A. Test marketing 4. Implementation and commercialization B. evaluation E ploration an* i*ea generation In a bank new product ideas might come from ongoing research to help identify consumer banking needs that are not being met. o They might come from management or other employees o !ome firms offer cash incentives to employees for generation new product ideas. Ideas might also come from customers banks in other parts of the

country or from competing banks. #lso an idea for a new product occasionally comes from banking regulators o Idea generation is to find in a structured goal oriented manner new ways to serve the bank$s customers in a meaningful way 'ro*!ct screening Ideas for new products must be screened against product objectives product policy and company resources # preliminary judgment must be made as to whether an idea deserves further study. &ach idea for a new product must also be evaluated to ensure that it does to take business away from e'isting products. Concept testing It is the function of consumer marketing research but it does not simply entail asking a large 2o. of consumers what they think of a new pdt idea It is best to first assemble small focus groups to e'plore reaction to a new pdt concept. This type of research is called )ualitative research. It can provide insight into how the product might be positioned or promoted. +!siness Anal#sis This stage in the development of a new pdt involves developing a written business case and recommendation based on the results of market analysis +roduction feasibility analysis marketing strategy development and cost and revenue projections. The business analysis includes supporting materials that indicate there is sufficient demand for the product and show that the product fits in with the bank$s over all goals and objective 'ro*!ct *evelop)ent %uring this stage the bank determines whether it is feasible to produce or provide the product ? service at a cost and )uantity that will make the product$s retail price attractive to customers. The elements of the product that will be particularly important to customers must be identified at this point and clearly highlighted as the product is designed.

This is also the stage at which the promotion distribution and pricing strategies are developed. The development stage involves production of the prototypes ? samples of the new product In banking the development phase for a new savings product would re)uire modification of the savings computer system by the programming staff the design of forms and documents to be used in setting up the a?c$s and the writing of procedures for the branch staff to follow in completing the forms and processing them. Test )arketing :onsumer goods manufacturers usually test market new products. If a company to try out a new product in one ? two geographic Markets +erhaps using a different promotional approach in each market to test their relative effectiveness. Test marketing is increasing in banking too. The benefits of test marketing are that the banks can assess customer response as well as familiarise employees with the planned new products. Test marketing can be e'pensive and time consuming however and can offer competitors an opportunity to )uickly copy the bank$s new product? !ervice It is beneficial to move )uickly from the test marketing stage to a full C scale implementation of the product I)ple)entation or co))erciali1ation This is the stage at which a company commands its resources to a full C scale introduction of the product to the market. Introducing a new banking product re)uires heavy involvement by the marketing department. # great deal of money is invested in advertising and sales promotion. The launching of new product is often tied to an employee incentive campaign to boost initial sales. #t the same time the bank might offer a premium to the customer for purchasing the new product Eval!ation The final stage in developing a new pdt involves the use of primary an secondary research to monitor the progress of the new pdt in relation to the company$s goals.

&ffecting monitoring enables the bank to take corrective action where needed as well as gain additional knowledge that will facilitate the introduction of the ne't new product.

'RICING

'ricing strateg# for financial pro*!ct +ricing decision may relate to pricing new product or changing prices of e'isting products. # bank should consider changing the price of an established product when. 0. There is a sudden change in the banks costs. 3. 5. The competition initiates a price change. The establishment of a new price becomes permissible as a result of a change in

regulations. 'ricing Strategies ;hen pricing a new product (where it is new to the firm new to the market or both) bank management will have at least three general objectives in mind. 0. <etting the product accepted 3. Maintaining strength in the market in the face of competition. 5. :reating profit. Two of the most important strategies for pricing new product are skimming pricing and penetration pricing. Ski))ing pricing$% !kimming pricing is a strategy that involves setting a high initial price for the product so as to skim the cream of demand for the product. Thus strategy is especially suitable for products that are new to the market for the following reasons. 23 The amount of the product that can be sold is less likely to be affected by price when the product is new than it will be later when competition has more of an influence. 43 # skimming price strategy allows the marketer to attract customers who are less price sensitive before lowering price to attract those who are more price sensitive.

53 # high initial price may help the new product achieve an image of audit and prestige. 63 # skimming price can be used to test the demand for a product. It is preferable to begin with a high price and then reduce it rather than to begin with a low price and then have to raise it to popularity of the product. 'enetration pricing +enetration is the opposite of skimming. It uses a low initial price as a means of capturing a large share of the market as early as possible. Thus strategy warrants serious consideration when one or more of the following conditions e'ist. 0. The )uantity of product sold is highly sensitive to price even in the introductory stage of the product life cycle. 3. !ubstantial economies in production or distribution costs can be achieved with large volume of sales. 5. The product will face the threat of strong competition soon after introduction or at the time of introduction. /. There is not an elite market for the product that is no group of potential customers is likely to be willing to pay a premium price to obtain the product early. Ot(er pricing strategies Three other pricing strategies may be used either in pricing new products or repairing e'isting ones. 23 'erceive* val!e pricing$ % This strategy is based not on the Duestion 8what does it cost us to deliver thus product9E but rather on the )uestion9 what is the perceived value of this product to the customer9E The more tangible and intangible features that are added to a product the higher the perceived value of the customer and conse)uently the higher price that can be charged. To use perceived value pricing effectively a firm must reduce the customers price sensibility or the price elasticity of demand by differentiating the product trying other products to it or adding nonprice benefits. cover 6nforeseen costs or to capitalize fully on the

:onsumers willingness to pay for perceived value helps justify a bank$s e'penditure to develop an image or position in the market and to make the necessary investment to provide a high level of customer service. The bank with a regulation for )uality products and a high level of personalized service and whose overall image among the target market is highly favorable will be able to change slightly higher fees than its competitors. :ustomers who feel that the employers at there bank know them treat them personably and professionally are eager to help them are not likely to shop around to save a few dollars on a checking account or to get a slightly higher interest rate on a certificate of deposit. 43 Relations(ip pricing3 $% >elationship pricing strategies encourage customers to have multiple accounts and services with the bank. Thus encouragement is provided in the form of lower fees higher savings interest rates or lower loan interest rates for customers with multiple accountants. !ome e'amples are 23 #llowing combined balances in all accounts to offset balance re)uirement for no charge checking. 43 +ricing higher rates on deposits and charging lower rates on loans or reducing loan application fees for customers who have both checking and saving with the bank and maintain a specified combined monthly balance. 53 :harging a lower rate on personal loans to a customer who agrees to have the monthly payment automatically deducted from has or checking accounts. 63 :harging a lower general fees or lower interest rate to credit card customers who also have a checking or saving accounts. 73 +aying a higher interest rate on larger savings or certificate of deposit balances. To use relationship pricing effectively a bank must have either an integrated system that enables the various computer application for checking saving and loans to communicate with one another or a monthly updated central information file linking all relationship for each account holder. Three benefits accure to the bank that uses relationship pricing. 0. &conomic 3. The second benefit relates to customer retention 5. The third benefit is or should be increased profitability.

53 +e(avio!r )o*ification pricing$% Thus strategy uses pricing to get customers to take certain actions that will lower costs for the bank. "or e'ample a bank in an automated letter network must pay on interchange fee when the customer uses another banks #TM. To discourage its customers from using #TM$s of other banks and thus causing it to pay the interchange fee a bank often charges customers more for using other banks #TM than for using its own. Thus pricing strategy will work only to the e'tent that demand is elastic that is that customer will choose the lower-period attainable rather than pay the higher fee. In addition the bank$s #TM must be conveniently located. If they are not customers who use #TM$s fre)uently may decide to move there accounts to a bank with more convenient #TM location. 8(# +anks c(ange prices 0. The number of accounts or market share has declined. 3. +rices are too high relative to the competition and relative to the benefit of the product. 5. +rices are too low given cost increases or heavy demand. /. The bank prices seems higher to customers than they really are 7. The product has been enhanced adding cost to the bank or value to the customer.

G!i*elines of Service 'ricing The following are the guidelines for pricing of services. 0 . The pricing strategy should be such that demand fluctuations are successfully handled. 3. !ervice prices should be based on costs so as to take in to account the cost of tangible clues of intangible !ervices. 5. The pricing strategy should be such as to provide value addition and )uality indication to the customers. /. The pricing strategy should be such as to cope-up with the degree of competition.

S(ort%ter) 'ricing Tactics in Service In*!stries +rice Tactics %ifferential or fle'ible pricing ,bjectives a. (uild primary demand during nonpeak time b. &ven out of fluctuations in demand "orms ? &'amples a. +rice time differentials (eg. Telephone services) b. :ustomer ability (housing loans and rate of interest increasing with principal) c. !ervice product price differentials (barber shops) d. +lace differentials (discount at hotels %iscount pricing a. To enable service production and consumption to take place. b. To encourage actions like early payments bulk purchase or peak %iversionary pricing usage To make customer visit # service station may offer during off seasons) Telephone corporation offering lower tariffs for nonpeak periods

office at least once to avail basic service at a discount and with that e'perience try <uarantee pricing out others a. To enable high )uality operator to compete with others b. To satisfy a customer seeking clear assurance before *igh price maintenance pricing paying for it. To hold out against the price threat of the low priced sellers and the customer Foss leader pricing associate price with )uality To charge a reduced price for the first order with a hope to get further business at better prices.

certain discount on car wash only but for other repairs or maintenance jobs charge the full rate. &mployment agencies charge either or both the parties after the assignment gets over

:ellular phones services pricing.

To attract first time trials a restaurant offers a discount on the day of inauguration.

0ISTRI+9TION

0istri"!tion strateg# %istribution strategy is mainly concerned with making the product available at the deserved time and place. &ven the right product for a market segment provides limited satisfaction or none at all if it is not available when and where consumers want it. #ccordingly two important demands of distribution strategy for banks are sets location and case of access. "urthermore the current social environment places a heavy emphasis on time as well as convenience. #s a result many banks have joined automated letter networks to ma'imize the number of location where customers can access there accounts. Many banks also provide telephone banking services and pc banking services that enable customer to performer transactions and make account 3/ hours a day 4 days a week. !ince banking products and services are largely intangible they are difficult to separate from the people who distribute them. There is especially true at the time the customers initiates the relationship with a bank but it also applies to the say-today servicing of accounts. #lthough the use of technology has reduced contact with tellers there will always be a need for personal customer services whether it be in person or by phone. The growing implementation of customer relations and sales training programmers in banks reflect managements recognition of the importance of the human demand in the banks distribution strategy.

Eig(t c(annels of *istri"!tion for +ank so!rces #TM card :redit card %ebit card Telephone +ersonal computer (ranch #utomated Foan machine =irtual branch :::::::::::::::::::::::

0EVELO'MENT OF FINANCIAL SERVICES Ideas that have survived the screening process are then worked up into specific service concepts that is to say the basic idea for the new product must be translated into a specific of features and attributes which the product will display. #t this stage it is common to test this newly defined product and to identify consumer and market reactions in order to make any necessary modifications to the product before it is launched. !creening the ideas :oncept development tested Marketing strategy development-who should be target consumers pricing stability (usiness analysis !ervice development-infrastructure Market testing :ommercialization. 2+% strategy

Idea generation

Idea screening

%evelopment and Testing

+roduct Faunch

0. 2ew product development strategy.- # clear strategy is important to ensure that all those involved understand the importance of 2+% and what the organizations wishes to achieve. The process of 2%+ is to be orientated towards taking advantage of new market segments seen as crucial to the continued competitiveness of the organizations re)uired to maintain profitability or designed to reduce e'cess capacity or even out fluctuating demands. The ideas that should be considered are likely to vary according to the purpose of the 2%+ programme. 3. Idea generation.- Ideas may be generated from both inside and outside an organization. Ideas may be generated internally from specialize 2+% teams from employee feedback or suggestions. &'ternally ideas may be generated based on customer feedback market research specialist new product development agencies or by copying competitions. 5. Idea screening.- The variety of ideas produced at idea-generation stage. Idea screening means deciding in advance a set of criteria to be used when ideas are evaluated.

%oest the idea fit with the organizations strategyE %oes the idea fit with the organizations capabilitiesE %oes the idea appeal to the right market segmentsE Is the idea variable in terms of cost and profitE

/. %evelopment and Testing.-#t this stage it is common to test this newly defined product and to identify consumer and market reactions in order to make any necessary modifications to the product before it is launched. 7. +roduct launch.- #t this stage the major decisions are essentially of an operational nature-decision regarding the timing of launch the geographical location of the launch and the specific marketing tactics to be used in support of that launch. Test Market # rest market in the field of business and marketing is a geographical region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out. The criteria used to judge the acceptability of a test market region or group includes. 0.a population that is demographically similar to the proposed target market@ and 3. relative isolation from densely populated media markets to that advertising to the test audience can be efficient and economical. 0. The test market ideally aims to duplicate Geverything$ C promotion and distribution as well as Gproduct$ C on a smaller scale.

Test Marketing 'roce*!re

0.determine the number of cities 3. selection of the cities 5. duration of the test /. collect necessary information 7. take necessary actions ;here should we communicate thisE

;hen do the communications need to take placeE

A0VERTISING AN0 SALES 'ROMOTION

T(e Fo!rt( '$ 'ro)otion It is now established that there are clear differences in information usage between goods and services. "irst the difference is that consumers of services are less likely to purchase without information than those of goods. !econd the consumer of services will prefer personal sources over impersonal sources of information. #nd third the basic characteristics of services have implication for communication strategy. The above three influence the decision regarding the a) :ommunication ,bjectives b) Target #udiences and c) +lanning of each of the sub elements in promotion mi' 'ro)otion O";ectives The basic objectives of the promotion mi' are@ 0 . %evelop personal relations with client (personal relations might result in satisfaction more than their service offer) 3. Make a strong impression of competency honesty and sincerity.(professional orientation to service transaction so as to win buyerHs confidence in sellerHs ability to deliver the service) 5. !hould be able to use indirect selling techni)ues (creating derived demand or act as a buying consultant) /. 7. Manage to maintain a fine image by positive word of mouth. +ackaging and customization

#dverting is only one element of the promotion mi' but it often considered prominent in the overall marketing mi' design. Its high visibility and pervasiveness made it as an important social and encomia topic in Indian society. 0. #dvertising is the dissemination of information by non-personal means through paid media where the source is the sponsoring organization. #dvertising may be defined as the process of buying sponsor-identified media space or time in order to promote a product or an idea. The #merican Marketing #ssociation :hicago has defined advertising as 8 any from of nonpersonal presentation or promotion of ideas goods or services by an identified sponsor9. #dvertisement is a mass communicating of information intended to persuade buyers to by products with a view to ma'imizing a company$s profits. The elements of advertising are. (i) (ii) (iii) It is a mass communication reaching a large group of consumers. It makes mass production possible It is non-personal communication for it is not delivered by an actual person nor is it addressed to a specific person. (iv) It is a commercial communication because it is used to help assure the advertiser of a long business life with profitable sales. (v) #dvertising can be economical for it reaches large groups of people. This keeps the cost per message low. (vi) The communication is speedy permitting an advertiser to speak to million of buyers in a matter of a few hours. (vii) #dvertising is identified communication. The advertiser sings his name to his advertisement for the purpose of publicizing his identity.

Financial Services A*vertising "inancial advertising depending on the product is governed by regulation and the #dvertising !tandard #uthority and depending on the subject matter additionally by statutory regulation under the "inancial !ervices and Market #ct 3111 (8"!M#9) and under the :onsumer :redit legislation. #dvertising.- #dvertising +aid non personal communication delivered through various media and designed to inform persuade or remind members of a particular audience. 2ature of advertising #dvertising is distinguished from other forms of promotion as follows. It has a verbal and?or visual message. The sponsor of the message is identified %elivery is through recognizable media There is payment by the advertiser to the media for carrying the message #dvertisers are increasingly being able to reach specific audiences with tailormade messages. #dvertising can be classified by the target audience to which is directed. :onsumer advertising generally appears in mass media and is directed to end consumers. may be product or institutional in nature. The #dvertising +lan #s pointed out earlier advertising plan and decision making focus on three crucial areas@ objectives and target selection message strategy and tactics and media strategy and tactics. Fet us elaborate on these points. 0. ,bjectives and Target !election.-#n important part of the objective is the development of a precise disciplined description of the target audience. It is often tempting to direct advertising at a broad audience@ but everyone is a potential customer. It is best to consider directing the advertising to more selected groups to develop stimulating copy. It is )uite possible to develop several campaigns each directed at different segment of the market or to develop one campaign based on multiple objectives.

3. Message !trategy and Tactics.- Message strategy must decide what the advertising is meand to communicate C by way of benefits feeling brand personality or action content. ,nce the content of the campaign has been decided decisions must be made on the bnest-most effective-ways of communicating that content. The decisions such as the choice of a spokesperson the use of humor or fear or other tones and the selection of particular copy visuals and layout are what we call 8 message tactics9 5. Media !trategy and Tactics.-Message strategy is concerned with decisions about how much is to be allocated to create and test advertising copy media strategy concerns decisions on how many media rupees to spend on an advertising campaign. /. Media tacties.- :omprise the decisions on which specific media (television radio magazines etc) or media vehicles (>eader$s ?digest etc) to spend these dollars. !ales +romotion.- !ales promotion is one of the most loosely used terms in the marketing vocabulary. ;e define sales promotion as demand. !timulating devices designed to supplement advertising and facilities personal selling. In other words sales promotion signifies all those activities that supplement coordinate and make the efforts of personal selling and advertising more effective. It is non recurrent in nature which means it cant be used continuously. %efinition of sales promotion.- #ccording to #merican Marketing #ssociation 8Those marketing activities other than personal selling advertising and publicity that stimulate consumer purchasing and dealer effectiveness such as display shows and e'hibitions demonstrations and various non-recurrent selling efforts not in the ordinary routine9. ;.I !tanton defines sales promotion as all those activities other than advertising personal selling public relations and publicity that are intended to stimulate customer demand and improve the marketing performance of sellers. %emand-stimulating devices designed at supplement advertising and facilities personal selling. !ales promotions include such things as coupons in-store displays

premiums trade shows in-store demonstrations and contents.

The target for these activities may be middlemen end users or the producer$s own sales force.

O";ectives of Sales 'ro)otion The basic objectives of sales promotion are.(i)To introduce new products.- To induce buyers to purchase a new product free samples may be distributed or money and merchandise allowance may be offered to business to stock and sell the product. (ii)To attract new customers.- 2ew customers may be attracted through issue of free samples premiums contests and similar devices (iii) To induce present customers to buy more.-+resent customers may be induced to buy more by knowing more about a product its ingredients and uses. (iv) To help firm remain competitive.- !ales promotions may be undertaken to meet competition from a firm. (v) To increase sales in off season.- (uyers may be encouraged to use the product in off seasons by showing them the variety of uses of the product. (vi) To increase the inventories of business buyers.- >etailers may be induced to keep in stock more units of a product so that more sales can be effected.

#%=&>TI!&M&2T #2% !#F&!+>,M,TI,2 ," "I2#2:I#F !&>=I:&! +romotion. This includes advertising sales promotion publicity and personal selling and refers to the various methods of promoting the product brand or company advertising The #merican marketing association defines advertising as Jthe placement of announcements and persuasive messages in time or space purchased in any of the mass media by business firms nonprofit organisations government agencies and individuals who seek in form and or audience about their products services organisations or ideasJ. 'ai* a*vertising takes place< print media(magazines and news papers) (roadcast media(radio and television)

out door and transit advertising %irect marketing ,nline through the world wide web advertisements in newspapers magazines brochures leaflets circulars mailings e-mails te't transmissions. fa' transmissions catalogues follow-up literature and other electronic and printed material posters and other promotional media in public places including moving images cinema and video commercials advertisements in non-broadcast electronic media including online advertisements in paid-for space (eg banner and pop-up advertisements) viewdata services marketing databases containing consumersH personal information sales promotions advertisement promotions

+roduct advertising focuses on selling a specific product or services <oal of advertising is to inform influence and persuade the target market It create awareness to the target audience !&(IH! :,%& ," #%=&>TI!&M&2T 0. 3. #2K #%=&>TI!&M&2T !*,6F% (& T>6T*"6F."#I> #2% :F&#> IT !*,6F% (& "#:T"6#FFK :,>>&:T #2% 2,T #2 &L#<<&>#T&% ,> MI! F&#%I2< !T#T&M&2T 5. IT !*,6F% 2,T :,2T#I2 #2K +>,MI!& ,> <6#>&2T&& ," I2:,M& ,> #++>&:I#TI,2 ,> #2K ,T*&> <#I2! /. :,>+,>#T& #%=&>TI!&M&2T !*,6F%2,T (& <I=&2 %6>I2< T*& +&>I,% !6(!:>I+TI,2 I! ,+&2. +>,%6:T #%=&>TI!&M&2T I" <I=&2 !*,6F% 2,T >&"&> T, :,>+,>#T& +&>",>M#2:& 7. IT !*,6F% 2,T :,2T#I2 #2K I2",>M#F I2",>M#TI,2 2,T <I=&2 I2 T*& +>,!+&:T,6!. A. %6>I2< T*& +&>I,% !6(!:>I+TI,2 I! ,+&2 2, !T#T&M&2T !*,6F% (& <I=&2 T, T*& +>&!! #(,6T T*& !T#T& ," !6(!:>I+TI,2 ,> ,=&> !6(!:>I+TI,2 +>#:TI:& M&M(&>! ," T*& :,MMITT&& ," #%=&>TI!I2<

'ersonal sales ,ral presentation given by a salesman who approaches individuals or a group of potential customers. Five interactive relationship +ersonal interest Mention and response !hort-term incentives to encourage buying of products. Instant appeal #n'iety to sell

!#F&! +>,M,TI,2 >6F&! The sales promotion rules are designed primarily to protect the public but they also apply to trade promotions and incentive schemes and to the promotional elements of sponsorships. They regulate the nature and administration of promotional marketing techni)ues. Those techni)ues generally involve providing a range of direct or indirect additional benefits usually on a temporary basis designed to make goods or services more attractive to purchasers. The rules do not apply to the routine non-promotional distribution of products or to product e'tensions for e'ample the suitability of one-off editorial supplements (be they in printed or electronic form) to newspapers and magazines. +romoters are responsible for all aspects and all stages of promotions. +romotions should be conducted e)uitably promptly and efficiently and should be seen to deal fairly and honourably with consumers. +romoters should avoid causing unnecessary disappointment.

M#>M&T >&!&#>:* Market research is the identification of customersH financial needs and wants and forecasting and researching future financial market needs and competitorHs activities. It is the systematic design collection analysis. and reporting of data and findings relevant to a specific marketing situation facing the company. T(e Marketing Researc( 'rocess N %efine the problem and research objectives N %evelop the research plan N :ollect the information N #nalyze the information N +resent the findings N Make the decision Research Approaches In the marketing research the primary data can be collected in five main ways. through observation focus groups surveys behavioral data and e'periences.

O"servational researc( "resh data can be gathered by observing the relevant actors and settings. :onsumers can be unobtrusively observed as they shop or as they :onsume products. Foc!s Gro!p Researc(

# focus group is a gathering of si' to ten people who are carefully selected based on certain demographic psychographic or other considerations and brought together to discuss at length various topics of interest. +articipants are normally paid a small sum for attending. # professional research moderator provides )uestions and probes based on a discussion guide or agenda prepared by the responsible marketing managers to ensure that the right material gets covered. S!rve# Researc( :ompanies undertake surveys to learn about peopleHs knowledge beliefs preferences and satisfaction. It can also put the )uestions to ail ongoing consumer panel run by itself or another company. It may do a mall intercept study by having researchers approach people in a shopping and ask them )uestions. +e(avioral 0ata :ustomers leave traces of their purchasing behavior in store scanning data catalog purchases and customer databases. Much can be learned by analyzing these data. :ustomerHs actual purchases reflect preferences and often are more reliable than statements they offer to market researchers.

E peri)ental Researc( The most scientifically valid research is e'perimental research. The purpose of e'perimental research is to capture cause-and-effect relationships by eliminating competing e'planations of the observed findings. The design and e'ecution of the e'periment eliminate alternative hypotheses that might e'plain the results research and marketing managers can have confidence in the conclusions. &'periments call for matched group of subjects subjecting them to different treatments controlling e'traneous variables and checking whether observed response differences are statistically significant. >esearchers have a choice of three main research instruments in collecting primary data. They are@ Duestionnaires Dualitative measures Mechanical devices

,nce the sampling plan has been determined the researcher Must decide the subject should be contacted on the basis of the methods like@ Mail )uestionnaire Telephone Interview +ersonal Interview ,nline Interview

Consider the example of market research in bank marketing; Marketing begins with information about the market in which the bank operates. In the field of bank marketing research is important. The bank which really practices marketing or which is market oriented while thinking of introducing anew type of che)ue system or a ticJ service for e'ample will not make a decision on the alternatives until it has found out what its customers want. Market research is the process by which a bank attempts to obtain the customer and the competitor information Marketing research is an. integral part of the decision making process. Market research in banking is an essential tool of marketing for affective planning. It can be used to gather more knowledge about the market in which the bank is operating. ;ith the help of this marketing research new service can be developed and e'isting services can be improved. (etter and more effective promotion programmes can be designed which can be accepted by the customers. Marketing research serves as a communication channel between tile market and the bank. The single most important reason for undertaking market research is to improve the )uality of managerial decision making Market Research in Indian Banks The following broad areas of market research were considered for the studies in Indian (anks are. 2ew service development 2ew service product acceptance >esearch and development of e'isting financial service (ank image study

 Measuring bank$s advertising effectiveness Measurement of market potentials Market research of competitive service product :ustomer$s opinion study :ustomer profile study and Market share analysis Most of the market research studies were conducted for internal use and no formal reports were prepared. It is important to note that the subjected or issue researched by the bank@ Most important subject for market research is the customer service?customer profile?opinion studies. In the case of Indian (anks only three banks have researched the Market !hare #nalysis. >ural areas are also a part of the market research activities. !tudy on all India !avings and %eposit Trends and +atterns Measuring bank$s advertising effectiveness (ank$s advertising and +ublicity and its image among consumers !urvey on personal finance and banking.

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