MARKETING STRATEGY
Marketing strategy is a method of focusing an organization's energies and
resources on a course of action which can lead to increased sales and dominance
of a targeted market niche. A marketing strategy combines product development,
promotion, distribution, pricing, relationship management and other elements;
identifies the firm's marketing goals, and explains how they will be achieved,
ideally within a stated timeframe. Marketing strategy determines the choice of
target market segments, positioning, marketing mix, and allocation of resources. It is
most effective when it is an integral component of overall firm strategy, defining
how the organization will successfully engage customers, prospects, and
competitors in the market arena. Corporate strategies, corporate missions, and
corporate goals. As the customer constitutes the source of a company's revenue,
marketing strategy is closely linked with sales. A key component of marketing
strategy is often to keep marketing in line with a company's overarching mission
statement [4].

Tactics and actions

A marketing strategy can serve as the foundation of a marketing plan. A marketing
plan contains a set of specific actions required to successfully implement a
marketing strategy. For example: "Use a low cost product to attract consumers.
Once our organization, via our low cost product, has established a relationship
with consumers, our organization will sell additional, higher-margin products and
services that enhance the consumer's interaction with the low-cost product or
service."

A strategy consists of a well thought out series of tactics to make a marketing plan
more effective. Marketing strategies serve as the fundamental underpinning of
marketing plans designed to fill market needs and reach marketing objectives [5].
Plans and objectives are generally tested for measurable results.

A marketing strategy often integrates an organization's marketing goals, policies,

and action sequences (tactics) into a cohesive whole. Similarly, the various strands
of the strategy , which might include advertising, channel marketing, internet marketing,
promotion and public relations can be orchestrated. Many companies cascade a
strategy throughout an organization, by creating strategy tactics that then
become strategy goals for the next level or group. Each one group is expected to
take that strategy goal and develop a set of tactics to achieve that goal. This is
why it is important to make each strategy goal measurable.

Marketing strategies are dynamic and interactive. They are partially planned and
partially unplanned.
THE 7PS OF MARKETING

The 7ps of marketing are tools or ingredients that the marketing manager mixes
in the right proportion required by the consumers. A good understanding and
manipulation of the marketing mix is the beginning of the success or failure of
your marketing strategy. Now let’s take a brief look at the marketing mix: 

Product: Your product is crucial. People say that a good product will sell on its
own, and, in my humble opinion, it's very true. If your product is really great and
benefits your clients, they'll spread the good news. They'll tell their friends and
family. They'll even tell total strangers. They'll be very excited to share your brand
and name with others causing you to have a great windfall of cash and plenty of
business.
Price: Price tends to be a little tricky. Many people are often afraid to charge what
they really should and constantly offer discounts. Let me tell you something:
these are both very big no-no's that you should avoid like a plague. Charge what
you're worth and never discount without a strong reason. Therefore, price is the
amount of money that customers have to pay to obtain the product.
Place: You remember the old "location, location, location"? This is exactly what
this p's about. There is basically no point in doing any marketing if people can't
see it, right? So make sure that you're noticed. Make sure that people you're
trying to get to buy from you actually know you exist by selecting the right place.
Place also means all the company activities that make the product available to
target consumers i.e. the physical distribution channels etc. Promotion:-
Promotion always comes last, because you should only start promoting your
business once you have all the other ps in place. What are you going to tell people
to encourage them to buy from you and how you're going to do it? Answer these
two questions and you'll have a great plan for your promotion ready to use.

People: An essential ingredient to any service provision is the use of appropriate

staff and people. Recruiting the right staff and training them appropriately in the
delivery of their service is essential if the organization wants to obtain a form of
competitive advantage. Consumers make judgments and deliver perceptions of
the service based on the employees they interact with. Staff should have the
appropriate interpersonal skills, aptitude and service knowledge to provide the
service that consumers are paying for. Many British organizations aim to apply for
the Investors In People accreditation, which tells consumers that staffs are taken
care of by the company and they are trained to certain standards.

Process: Refers to the systems used to assist the organization in delivering the
service. Imagine you walk into Burger King and you order a Whopper Meal and
you get it delivered within 2 minutes. What was the process that allowed you to
obtain an efficient service delivery? Banks that send out Credit Cards
automatically when their customers’ old one has expired again require an
efficient process to identify expiry dates and renewal. An efficient service that
replaces old credit cards will foster consumer loyalty and confidence in the
company.

Physical Evidence: Where is the service being delivered? Physical Evidence is the
element of the service mix which allows the consumer again to make judgments
on the organization. If you walk into a restaurant your expectations are of a clean,
friendly environment. On an aircraft if you travel first class you expect enough
room to be able to lie down!
Physical evidence is an essential ingredient of the service mix; consumers will
make perceptions based on their sight of the service provision which will have an
impact on the organizations perceptual plan of the service.

MONITORING AND EVALUATION: This help you know how effective ur strategy is
performing in practice, it can also help inform your future mkting strategy. A
simple approach is to ask each new customer how they heard about ur product.

NOTE: Once you have decided on urn muting strategy, draw up a muting plan that
sets out how you intend to execute that strategy and evaluate its success. The
plan should be constantly reviewed and if necessary, updated so you can respond
quickly to changes in customers’ needs and attitude in urn industry.
UNDERSTANDING UR STRENGHT AND WEAKNESSES

STRENGHT: - Personnel and flexible customers services –Special features or benefits

of that urn pet offers –Special knowledge or Skill etc.

WEAKNESSES:-Limited financialresources, lack of an established reputation,

inefficient accounting system.etc

OPPORTUNITY: - Increases demand from a particular mkt sector, using the internet to
reach new mkt, new technology that allows you to improve product quality.

THREAT: - The emergence of a new competitor, more, sophisticated, attractive or

cheaper version of ur product or service. New legislation increasing ur cost, a
downturn in the economy, reducing overall demand.

However, having done the SWOT analysis, you can then measure the potential
effects each element may have on ur marketing strategy. E.g. If new regulation
will increase the cost of competing in a market where u are already weak, you
might want to look for other opportunities. On the other hand, if you have a good
reputation and your key competitor is struggling, the regulation might present the
opportunity to push aggressively for new customer.

Types of strategies:
Marketing strategies may differ depending on the unique situation of the
individual business. However there are a number of ways of categorizing some
generic strategies. A brief description of the most common categorizing schemes
is presented below: Strategies based on marketing dominance- In this scheme,
firms are classified based on their market share or dominance of an industry.
Typically there are four types of market dominance strategies:

Leader

Challenger

Follower

Nicher.

Real-life marketing
Real-life marketing primarily revolves around the application of a great deal of
common-sense; dealing with a limited number of factors, in an environment of
imperfect information and limited resources complicated by uncertainty and tight
timescales. Use of classical marketing techniques, in these circumstances, is
inevitably partial and uneven.

Thus, for example, many new products will emerge from irrational processes and
the rational development process may be used (if at all) to screen out the worst
non-runners. The design of the advertising, and the packaging, will be the output
of the creative minds employed; which management will then screen, often by
'gut-reaction', to ensure that it is reasonable.

For most of their time, marketing managers use intuition and experience to
analyze and handle the complex, and unique, situations being faced; without easy
reference to theory. This will often be 'flying by the seat of the pants', or 'gut-
reaction'; where the overall strategy, coupled with the knowledge of the
customer which has been absorbed almost by a process of osmosis, will
determine the quality of the marketing employed. This, almost instinctive
management, is what is sometimes called 'coarse marketing'; to distinguish it
from the refined, aesthetically pleasing, form favored by the theorists.

MARKETING STRATEGIC PLANNING

What is Strategic Marketing Planning?

Every Chief Executive Officer and marketing executive periodically faces urgent
strategic marketing challenges that can affect the future of the company for many
years. Frequently these decisions are made without having an opportunity to
study the situation and make the best possible decision.

Strategic planning is not a panacea for ills. It will not automatically ensure success.
Sometimes one will make mistakes, assume incorrectly and make incorrect
decisions stemming from this. The alternative, not to undertake any strategic
planning, is even more dangerous. If one does not do any planning, one is
planning to fail.

A better approach is to perform an annual comprehensive review of markets and

opportunities, then make long-term strategic decisions without the distractions of
day-to-day marketing and sales activities. Daily decisions then fit into the
company's overall strategic marketing goals.

It's important for a strategic marketing planning process to look at the company
from the customer's point of view by asking questions that have a long time
horizon, such as:

1.     What needs or problems cause customers to consider buying from our
company?

2.     What improvements in the customer's personal or business life can we enable
or improve?

3.     Which customer market segments are attracted to our company or products?

4.     Which customer motivations or values lead people to decide to purchase our
products?

5.     What changes or trends in our customer base are affecting their general
interest or attraction to products like ours?

In view of the above, according to Philip Kotler and Gary Armstrong in Principles

of Marketing Seventh Edition defined ‘Strategic Marketing Planning as the process
of developing and maintaining a strategic fit between the organization’s goals and
capabilities and its changing marketing opportunities’.
It follows therefore, that strategic planning set the stage for the rest of the
planning in the firm. It relies on defining a clear company mission, setting
supporting company objectives, designing a sound business portfolio, and
coordinating functional strategies. Put in another way, at the corporate level, the
company first defines its overall purpose and mission. This mission then is turned
into detailed supporting objectives that guide the whole company. Next,
headquarters decides what portfolio of business and product is best for the
company and how much support to give each one. In turn, each business and
product unit must develop detailed marketing and other departmental plans that
support the companywide plan. Thus strategic marketing planning occurs at the
business levels. Marketing strategic planning support company strategic planning
with more detailed planning for specific marketing opportunity.
Strategic vs. Tactical Marketing Plans

What makes a strategic marketing plan different from a more tactical marketing
communications plan? The key difference is the focus on meshing overall
customer situations with your overall company direction.

For example, the trend toward increased use of outsourcing to both domestic and
global vendors creates markets for those suppliers. However, those vendors need
to have a strategic marketing vision in order to see these new markets early
enough to take advantage of the opportunity.

For consumer marketers, this means using geographic and demographic

segmentation, as well as psychographic segmentation (i.e., values, attitudes,
lifestyles), and product usage motivations.

For example, the aging population bubble creates a general increase in demand
for a wide range of products. It also creates market niches that are large enough
to make product development and marketing worthwhile.

The same shifts can also reduce demand for other products. These long term
shifts in markets are frequently misinterpreted as short-term competitive
pressures or fluctuations in the economy. Instead of increasing advertising or
sales efforts, it might be better to abandon a declining market.

Without a strategic marketing plan a company could waste resources or miss an

opportunity.

What's the cost of missing an opportunity? Of course, it's impossible to know at

the time the opportunity is missed, but years later it will become clear when a
competitor opens a new factory or enters a new market -- and their revenue
grows faster than their competitors.

In other words, the annual cost of a strategic marketing plan review is miniscule
compared to the revenue, market share, and profitability it can generate.

Developing the Strategic Marketing Plan

The strategic marketing plan process typically has three stages:

1.     Segment the market

Geographic

Demographic

Psychographic

Behavior

2.     Profile the market segments

Revenue potential

Market share potential

Profitability potential

3.     Develop a market segment marketing strategy

Market leader or product line extension

Mass marketing or targeted marketing

Direct or indirect sales

After analyzing market segments, customer interests, and the purchase process,
it's time to create the strategic marketing plan. The strategic marketing plan
document usually includes:

1.     Executive Summary:  present a brief overview of the proposed plan for quick
management review.

2.     Current market Situation Analysis - Where is the company now?

a.     Market Characteristics

b.     Key Success Factors

c.      Competition and Product Comparisons

d.     Technology Considerations

e.     Legal Environment

f.       Social Environment

3.     Threats and Opportunities: outline ur threat and opportunity that might
impact the product. Here also u perform the SWOT analysis

4.     Marketing Objectives and Issues: - Where does management want the
company to go?

a.     Product Profile

b.     Target Market /mkt shares

c.      Target Volume in Dalasi and/or Units and the issues that will affect these
objectives.

5.     Marketing Strategies - What should the company do to achieve its objectives?
Present a broad marketing approach that will be used to achieve the plan
objectives.
a.     Product Strategy

b.     Pricing Strategy

c.      Promotion Strategy

d.     Distribution Strategy

e.     Marketing Strategy Projection

f.       Physical evidence Strategy

g.     Process strategy

h.     Using people/staff as a strategy

6.     Action programs: specify what will be done, who will do it, when it will be
done, how much it will cost.

7.     Budget: A projected profit and loss statement that forecasts the expected
financial outcomes from the plan.

8.     Control: Indicates how the progress of the plan will be monitored.

Benefiting from a Strategic Marketing Plan

The top-down process of developing a strategic marketing plan helps insure that
all tactical marketing programs support the company's goals and objectives, as
well as convey a consistent message to customers.

This approach improves company efficiency in all areas, which helps improve
revenue and market share growth, and minimizes expenses -- all of which lead to
higher profitability

Marketing Appreciation
Making or Breaking Good Business Glue
Think about what it is that you do for a living. Unless you have been hiding under
a rock for the last few years, you will know that whatever product you sell, or
service you provide, your potential customer can find the same product or service
online or elsewhere. Have you "Ever heard of Google? Today we're living in a
Google world. Think about it; whatever product or service you sell or represent can
be found online better and cheaper than you offer it, in twenty seconds and two
mouse clicks. So what is it, I ask, that keeps your customers loyal to you and
your company? Is there really a way, a practice that would help you put the
"high touch" back into this "high tech" world? Yes... It's called Appreciation
Marketing. Building better and stronger relationships with your inner circle and
your client base is more important today than it ever was before. Not only is it
fundamentally wise, but where your present and future success is concerned, I
think it's essential.

So why would anyone ever do business with you? – The answer is simple because they like
you. Because they have a relationship with you.

In our fast-paced and automated world many business people and service providers are now
desensitized and have fallen for the e-myth that an e-mail or a text message is a sufficient way to say
thank you. (if any appreciation is shown at all)

If you have a business of any kind, you know how important keeping a customer
is. Basically, if you don't have customers you don't have a business. It is said that
it is much easier to keep a customer than to gain a new one. Why is that? Usually,
when someone has decided to do business with you, you have created some
amount of trust with them. You've developed a rapport with them. That's good!
But so many times, when we "close the sale" we get so excited that we forget
about the customer! We are so caught up in making the sale that we forget that
the sale is only the beginning. The beginning of what? The Beginning of a Long
Relationship! That is where Appreciation Marketing comes in. That is when "make
or break" happens.

Appreciation Marketing is the glue that holds your business together. It is the
personal touch that sets you and your business apart from the competition. It is
what causes your customers to loyally keep coming back to you and on top of
that, send you great referrals! In this fast paced world we live in, when was the
last time you received a real thank you note in the mailbox when you made a
purchase? I'd say that showing true appreciation has become a lost art.

PLANNING APPRECIATION MARKETING SYSTEM

 Tips for marketing Appreciation

Send a thank you note in the mail after a sale or a meeting.

Send a thank you gift when someone sends you a referral.

Send "items of value" on a regular, planned basis. These should not relate
to your product or business. It could range from useful, simple tips of about
almost anything, to coupons, or informative articles. It could be a
recommendation to a great business or service.

Send birthday cards to your customers and contacts. That will really make
their day and set you apart!

Appreciation marketing happened in 2 ways:-

Spontaneously - by being open, listening, and in tune to people.

Automatically - by having a regular system in place that happens whether

you are at work or at the beach.

Now that you know the importance of appreciating your customers

spontaneously and regularly, it's important to have in place actual systems
that will help you do this.
Sending automatic emails is a good way to keep in touch and show appreciation
to your customers. Set up a system that sends out messages automatically. You
can do this through a system like ‘I Contact ’. You can write a whole years worth of
messages in one day if you want to and set the system up to send them out on
the exact days you choose. But it's so easy to delete a message by a quick click of
the mouse. Emails should only support the main system you use. And that is the
next point...

Find a system that lets you set up a contact manager, remind you when birthdays
and other important dates are coming up, has a huge selection of cards and gifts,
let's you create your thank you cards and other cards of appreciation, let's you
type it and select the customers to send it to. I t is good to have an Appreciation
Marketing system that prints, stuffs, and mails your cards and gifts very
inexpensively.

The key is to just start doing it! The fact of the matter is, we do appreciate our
customers! So why not show it! Besides, our business depends on it, because our
goal is to build long lasting and loyal customers and a continual flow of highly
qualified referrals. Appreciation marketing could be the very idea that either
makes or breaks your business. “Whether you are an entrepreneur, manager,
teacher, parent, coach, or simply a friend, if you want to be successful with other
people, you must master the art of appreciating others.”

Note:-That in today’s business world excellent customer services is not enough.

We must go beyond customer services and build powerful, productive and
profitable relationship. Though Traditional marketing is important, Recognition
and Appreciation marketing will beat self promotion every time. Therefore instead
of spending thousands/millions of Dalasi to capture lead, generate referrals,
increase business or buy customer loyalty, why not think twice ....all that you ever
need is a little human touch------CALLED APPRECIATION MARKETING.

IMPORTANCE OF APPRECIATION MARKETING

Appreciation marketing wins over self promotion every single time.

Appreciation. Marketing garner customer loyalty better.

 Appreciation. Marketing keeps the ball of your business rolling

Appreciation. Marketing teaches humility as pie on top of the menu

Appreciation. Marketing teaches patience as a hallmark

Appreciation. Marketing makes you to know that GRATITUDE should be an

ATTITUDE and this is the breakfast ritual of champions.
 Appreciation. Marketing  makes you see the good in others and situations

Appreciation. Marketing leads to quality referrals.

Appreciation. Marketing leads to multi-level businesses

Appreciation. Marketing teaches how to listen to customers views.

MANAGING THE MARKETING MIX

 
Once the company has decided on its overall competitive marketing strategies, it is ready to begin
planning the details of its marketing mix. The marketing mixes are set of controllable tactical marketing
tools that the firm blends to produce the response it wants in the target market. The marketing mixes
consist of everything the firm can do to influence the demand for its products. The many possibilities can
be collected into seven group of variable known as the 7p’s: At this point, the company wants to design
and put into action the management of marketing mix that will best achieve its objectives in its target
markets. Managing the marketing mix involves four management functions: viz—analysis,
planning, implementation, and control. The company first develops overall strategic plans. The
company-wide strategic plans are then translated into strategic marketing plan and other plans for each
division, and products.

Through implementation, the company turns the strategic and marketing plans into actions that will
achieve the company strategic objectives. Marketing plans are implemented by people in the marketing
organization who work with those both inside and outside the company. Control consists of measuring
and evaluating the result of marketing plans and activities and taking corrective action to make sure
objectives are being reached.

Marketing analysis: - This provides information and evaluations needed for all of the other marketing
activities. Besides, managing the marketing mix/functions begins with a complete analysis of the
company’s situation. The company must analysis its market and marketing environment to find attractive
opportunities and to avoid environmental threats. It must analyze company strength and weaknesses, as
well as current and possible marketing actions, to determine which opportunities it can best pursue.
Marketing analysis feeds information and other inputs to each of the other marketing functions.

Managing the marketing mix therefore, is the central task of marketing professionals. As said earlier
above, the marketing mix is the set of marketing tools – often summarized as the ‘seven Ps’: the product,
its price, promotion, place, people, physical evidence and process that the firm uses to achieve its
objectives in its target market(McCarthy, 2001). The design of the marketing mix normally forms the core
of all marketing functions and the arms that support them. The central assumption is that if marketing
professionals make and implement the right decisions about the features of the product, its price, and how
it will be promoted and distributed, then the business will be successful. Unfortunately, marketers have
ignored the tautological nature of this view. What is the ‘right’ decision when it comes to making
these choices concerning the marketing mix? Most marketing professionals would answer that the right
marketing mix is the one that maximizes customer satisfaction and results in the highest sales or market
share. But a moment’s reflection reveals the fallacy of this approach. Customer satisfaction and sales can
always be increased by offering more product features, lower prices than competitors, higher promotional
budgets and the immediate availability of the product, of outstanding customer service and support. But
inadequate margins and excessive investment requirements would make this strategy a quick route to
bankruptcy. Some writers have tried to get around this problem by stating that the objective is to devise a
marketing mix that provides superior customer satisfaction at a profit to the company.

Marketing analysis includes a look at:

The Product/services in terms of: Brand, Quality, Design, Features, Variety, Packaging, Service, Support,
Guarantees and also bearing in mind the following questions:

What does the customer want from the product/service? What needs does it satisfy?

What features does it have to meet these needs?

Are there any features you've missed out?

Are you including costly features that the customer won't actually use?

How and where will the customer use it?

What does it look like? How will customers experience it?

What size(s), color(s), and so on, should it be?

What is it to be called?

How is it branded?

How is it differentiated versus your competitors?

What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).

A look at Place in terms of: Distribution channels, Coverage, Assortments, Locations, Inventories, Transport and
bearing in mind then following questions:.

Where do buyers look for your product or service?

If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or
direct, via a catalogue?

How can you access the right distribution channels?

Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples
to catalogue companies?

What do you competitors do, and how can you learn from that and/or differentiate?

A look at Price in terms of: List price, Discounts, Allowances, Trade margins, Payment terms, Credit and bearing
in mind then following questions:-.

What is the value of the product or service to the buyer?

Are there established price points for products or services in this area?

Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a
small increase be indiscernible, and so gain you extra profit margin?

What discounts should be offered to trade customers, or to other specific segments of your market?

How will your price compare with your competitors?

A look at Promotion in terms of: Sales force, Direct marketing, Sales promotion, Advertising, Public relations,
Exhibitions, Internet and also bearing in mind the following questions:

Where and when can you get across your marketing messages to your target market?

Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using
direct marketing mail shot? Through PR? On the Internet?

When is the best time to promote? Is there seasonality in the market? Are there any wider
environmental issues that suggest or dictate the timing of your market launch, or the timing of
subsequent promotions?

How do your competitors do their promotions? And how does that influence your choice of promotional
activity?

A look at people: An essential ingredient to any service provision is the use of appropriate staff and
people. Recruiting the right staff and training them appropriately in the delivery of their service is
essential if the organization wants to obtain a form of competitive advantage. Consumers make
judgments and deliver perceptions of the service based on the employees they interact with. Staff
should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service
that consumers are paying for. Many British organizations aim to apply for the Investors In People
accreditation, which tells consumers that staffs are taken care of by the company and they are trained
to certain standards.

A look at process: Refers to the systems used to assist the organization in delivering the service. Imagine
you walk into Kairaba King’s restaurant and you order a Whopper Meal and you get it delivered within 2
minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send
out Credit Cards automatically when their customers’ old one has expired again require an efficient
process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster
consumer loyalty and confidence in the company.

A look at physical Evidence: Where is the service being delivered? Physical Evidence is the element of
the service mix which allows the consumer again to make judgments on the organization. If you walk
into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first
class you expect enough room to be able to lie down. Physical evidence is an essential ingredient of the
service mix; consumers will make perceptions based on their sight of the service provision which will
have an impact on the organizations perceptual plan of the service.

All the market analysis is focused on the Target Market and aligning it to the company objectives
with a view of increasing customer services @ profit.

IMPLEMENTING MARKETING
Your strategic marketing plan must do more than just what you want or intend to happen. It must
describe each step required to make sure that it happens.

The plan should therefore include a schedule of key tasks. This sets out what will be done, and by when.
Refer to the schedule as often as possible to avoid losing sight of your objectives under the daily
workload.

Resources

It should also assess what resources you need. For example, you might need to think about what kind of
vehicles u need to carry out ur plans, how many are on ground and how this will affect your project. You
might also need to look at how much time it takes to sell to customers and whether you have enough
salespeople.

Cost

The cost of everything in the plan needs to be included in a budget. If your finances are limited, your
plan will need to take that into account. Don't spread your marketing activities too thinly - it is better to
concentrate your resources to make the most of your budget. You may also want to link your marketing
budget to your sales forecast.

Control

As well as setting out the schedule, the plan needs to say how it will be controlled. You need an
individual who takes responsibility for pushing things along. A good schedule and budget should make it
easy to monitor progress. When things fall behind schedule, or costs overrun, you need to be ready to
do something about it and to adapt your plan accordingly.

From time to time, you need to stand back and ask whether the plan is working. What can you learn
from your mistakes? How can you use what you know to make a better plan for the future?
It is important for a marketing plan to:

set clear, realistic and measurable targets - for example, increasing sales by 10 per cent

include deadlines for meeting targets

provide a budget for each marketing activity

specify who is responsible for each activity

Make sure you think through each of your objectives logically. For example, you might set a target for
the number of new enquiries. But if you don't provide the resources and training to follow up
these enquiries and turn them into sales, you will have increased costs without any benefits.

Link to your strategy

Assess the business environment to identify the opportunities and threats that you face. Look for where
you can capitalize on your strengths or where you need to overcome a weakness.

All parts of your business must work together. For example, if you have limited cash flow you should
avoid seeking large orders from customers who demand extended credit or that will involve you in
heavy, up-front costs.

Remember to focus on your long-term strategy. Reducing customer service might boost short-term
profits, but next year you might not have any customers left.

Make it happen

A plan will not happen by itself. You need to make someone responsible for monitoring progress and
chasing up overdue activities. Reviewing progress will also help you learn from your mistakes so that you
can improve your plans for the future.

Banks today are operating in a highly competitive and rapidly changing environment. In the changing
economic scenario, a professional approach to business development is essential and the survival of
a banking institution depends on its ability to take up challenges coming up in the environment. 
Developing business through marketing of bank’s services is one of the crucial areas which need
attention of the bankers to ensure profitable survival.

BANKING MARKETING : CONCEPTS

The role of marketing in an organization’s existence and growth need not be overemphasized in
today’s competitive environment. According to Peter Drucker, “marketing is so basic that it cannot
be considered a separate function”. It is the whole business seen from the point of view of its final
result, that is, customer’s point of view. Survival of an organization depends upon its ability to
acquire resources necessary for its sustenance. One of the modes of survival, as observed by Philip
Kotler, is “exchange”, whereby an organization creates and offers goods and services that are able to
attract and satisfy the purchasers, in exchange of its value. This option can be gainfully exercised
only if the organization develops the capacity to produce the needed goods and services. The
organizations should be geared to identify the customer needs and preferences which are subject to
change over a period of time.

One of the policy issues discussed in marketing is the ultimate objective of the marketing efforts of
an organization. The general belief is that the objective of marketing is to maximize the market’s
consumption of your products and services. However, it would be desirable to set the goal at
maximizing consumer satisfaction, rather than consumption. The organization, in the long run, is
likely to benefit from a customer oriented approach to marketing. The approach, in other words,
should ensure strong foundation for the institution’s existence, because the concept of marketing
has its origin on the premise that man is a creature of needs and wants. And there is constant
effort on his side to satisfy his needs. Further, his needs and wants keep changing with time,
circumstances and the immediate environment in which he is operating. Marketing management
essentially involves the efforts to achieve the need satisfaction of the target group the institution is
trying to serve.

There are various philosophical aspects which can give conceptual orientation to marketing
personnel’s approach. The “selling concept” assumes that the consumers will either not buy or not
buy enough of an organization’s products unless the organization makes a substantial effort to
stimulate their interests in its products. This becomes all the more relevant when the
organizations are functioning in a rich environment of competitors. “Product Concept” in
marketing philosophy assumes that the consumers will favor those products that offer best quality
for the price, while “production concept” assumes that consumers will favor those products which
are available and affordable. An organization’s task, therefore, should be to serve target markets in a
way that produces not only want satisfaction, but long-run individual and social benefit as the key to
attracting and holding customers.

The need for a well defined institutional framework within the organization to manage the
marketing efforts should be reckoned by any business concern. It is, therefore, essential that the
institution constitutes a marketing wing which will take care of the marketing function of the
organization. This compartment has to work smoothly with other segments of the organization.
Acquiring modern marketing orientation requires support from top management, a committed task
force, constant review of strategies and a consultant’s help if considered necessary. The marketing
wing should be adequately supported by a “Marketing Information System”, which is a critical
element in effective marketing. The information system is the channel linking external environment
with the executives of the institution.

BANK  MARKETING :

Marketing philosophy, in any context, refer to the need satisfaction of the institution’s clients. The
basic step involves identifying the needs of the customers and developing products to suit their
needs or modifying the existing products accordingly. It also requires the need for foreseeing wants
of the customers in future and developing suitable products of their requirement. Deryk Weyer of
Barclay’s Bank attempted a comprehensive definition for Bank Marketing. According to him, it
consists of identifying the most profitable markets now and in future; assessing the present and
future needs of customers; setting business development goals and marketing plans to meet them
and managing the various services and promoting them to achieve the plans, all in the context of a
changing market environment.  Successful marketing in a bank calls for commitment at all levels to
the task defined in this regard. Achieving higher business standards and operational performance
through marketing of banking services should be one of the directional goals of the organization.

In view of the competitive surroundings in which a bank is compelled to function, there is need for
formulation of a strategic action plan for its marketing efforts. A marketing strategy, in general, is a
systematic, appropriate and feasible set of concepts and actions through which the institution strives
to achieve its goal of customer satisfaction and profitable survival. Strategy should be designed after
taking into account the strengths and weaknesses of the organization. For example, a bank or branch
with clientele from various segments could think of “market penetration” by offering the existing
range of services to existing customers. On the other hand, a bank which is having expanding
business through new branches or branches which are not facing acute competition could think of
“Market Development” by offering the existing services to new customers. However, the real
marketing challenges arise from the institution’s capability to design new product range for their
customers of various segments. The strategy, therefore, lies in increasing the client base and
consolidating the relationship with existing and new clients through existing or newly developed
products.

The operational aspects of strategies for marketing contain actions such as development of
Relationship Banking, designing of effective delivery system, ensuring customer-oriented services
and modifying the system into a personal selling organization. In western banking, officials assigned
the job of personally contacting the customers and offering the services at doorsteps had been able
to make a significant impact on the development of business for their organizations. The importance
and role of personal selling and customer contacts in the marketing efforts of a banking institution
stem from the success of such efforts in many banking institutions all over the world.

The implementation of the strategies is as crucial as its design in ensuring successful marketing. The
communication of the adopted strategies to different tiers of the institution and ensuring of its
proper understanding by personnel at all levels is essential for successful implementation of the
strategies.  The communication becomes difficult in organizations which have substantial branch
network spread over a large geographical area. The field staff at the branch level should be trained
to implement the strategies after modifying them to suit the environment in which they are
operating. The knowledge of the local environment, demographic features and cultural aspects is an
essential requirement for the field staff involved in marketing efforts for the organization.
RURAL PSYCHOLOGY AND BANK MARKETING :

Banks have a great role to play in the development of rural areas and improvement in rural life. In
order to play this role effectively, the banker should have fair knowledge of the socio-psychological
aspects of the rural society he is serving. First of all, the banker should be aware of the “Human
Groups and Institutions” in the area of operation. This means that one should be aware of the role of
agriculture in the rural economy, cultural aspects of the society, community aspects, family and farm
patterns, institutional facilities, etc.  Secondly, the ‘Process of Change’, if any, taking place in the
rural scenario, should be known to him. The general changes that take place in the rural scenario
include urbanization, industrialization, migration, social mobility, changes in values, farm structure,
etc. Thirdly, there could be ‘Planned Changes’, generally emanating from administration of voluntary
organizations, such as resettlement, land reforms, community development, agricultural extension
work, education etc, of which the field staff should be familiar. Fourthly, a general idea of the status
of various development projects under execution, welfare measures, schemes under
implementation, etc. will help the banker to have a complete picture of the rural society in which he
is operating. The knowledge on all these aspects of the rural society will help the banker in choosing
the right approach to the clients in rural areas since education of the people on the services offered
is an integral part of effective marketing.  The psychology of the rural people should be properly
understood. It is only normal that the people in rural areas do not adopt a practice immediately. In
fact, the tendency of an illiterate person is to distrust the same. The banking habits are no exception
to this. But subsequently, on being properly educated, he may develop interest and would like to
know more about. If the information imparted convinces him that the idea is something useful, he
enters the t third stage of thinking about the possibility of accepting the idea for his benefit. Thus,
there are different stages in the “adoption process” of the rural folks, which should be clearly
understood by the field personnel.

The cultural pattern of the rural folks influences their economic behaviour considerably. Some rural
communities may have a “modern pattern” of culture. These communities would be ever willing to
try something new if they are convinced that it can improve their present position. Dissemination of
information on bank’s services become easy and the results are achieved at a faster pace with such
groups. On the other hand, groups characterized by “traditional pattern” of culture are generally
opposed to change. Their main concern will be to preserve what has been the tradition and resists
intrusion in to their ways of living. Effective marketing becomes difficult while dealing with such
groups.  Members of the group with a modern pattern of culture tend to be individualistic, while
system of social control will be more in groups with traditional pattern. In such groups, where
tradition is emphasized, a far reaching change in attitude towards anything, especially banking habits
can be brought about only with the support of their “Clan Leaders”. The clan leaders are the people
whom the rest of the community will listen to or whose approval, explicit or otherwise, the people
look forward to for accepting anything new. It is quite possible that these leaders are not formal
leaders of the group such as political leaders, but could be an elderly person or a religious leader of
the community trusted by the general public. Success in approaching such rural societies definitely
lies in understanding the rural psychology in this regard and identifying such influential individuals
from the rural masses. Any effort, therefore, to popularize the banking services in rural areas call for
absolute knowledge about the social structures, the culture, the functioning of the rural groups and
the nature and type of their leadership.

Changes are taking place in contemporary rural society, though at a slower pace. The elements of
dynamism of stability are existent in the rural environment, in the case of urban areas, though not
operative in identical degrees or patterns. The changes, however, have been generally confined to
changes in the agricultural pattern, community aspects and some general changes in the economic
scenario. These changes, however, generate scope for institutional services in various segments of
the rural economy’s operation and the banking institutions should capitalize on the same through
deep penetration into rural households. This can be made possible only if the bank’s personnel are
aware of the changes taking place in the rural environment and design their approach to the
situation in a skillful manner. Modifying the services to suit the dynamic environment is considered
as the backbone of marketing efforts. However, while designing or modifying, it should be ensured
that the products are not inconsistent with basic attitudes and cultural values of the people. Rapidity
of acceptance of innovations is a function of many factors, including the nature of innovation and its
relationship to existing cultural patterns.

Banking institutions are vehicles of economic development. According to Rostow, economic theories
and development concepts should be linked to sociological and psychological elements, if it is to be
maximally useful. Gunar Myrdal had opined that “attitudes” and “institutions” play a significant role
in rapid economic development. Psychology, as a science of human behaviour emphasizes the
influence of human factors which accelerate or impede the rapid acceptance of innovative ideas.
Marketing efforts in the rural areas should be designed with proper emphasis on these influential
factors.

BANK MARKETING : ROLE OF PERSONNEL

The marketing strategy for rural areas, by and large, assigns a responsible role on branch officials in
bringing out socio-economic transformation of the rural society. There is need for a total marketing
approach from the personnel to penetrate all levels in all areas of banking operations. Efforts need
to be made to design and launch suitably tailored services to meet its changing needs of the rural
population. The personnel attempting marketing in rural areas should be able to establish an organic
link with rural masses. They should be committed to the cause of rural upliftment and should
implement in totality the market strategies formed for the purpose. The knowledge of the command
area of the branch and the ability to identify potential customers and their financial needs are pre-
requisites for the success of marketing strategies. This calls for the need of training the staff with
sharp focus on improving the knowledge of the bank staff about the rural atmosphere and the skills
necessary to deal with the rural customers. There is also need for developing a sense of belonging
towards the organization, customers and the society. The field staff, to the extent possible, should
know the language and dialect of the people and should be able to communicate in a manner which
is appealing to the people. The organization on their part, therefore, should take adequate care in
identifying the right people for this specific job. They should also foster innovative and creative
approach in working to bring in new and original ideas and develop talent. There is also need for
rationalization of the work load for the personnel in the rural branches to enable them to give
adequate attention to the villagers and their requirements. Further, the institutions need to
motivate their personnel for popularizing the services in rural areas. Every member of the staff is a
salesman of the bank’s services and an ambassador of the institution among people. Marketing
efforts made by the personnel and its effect on business development should be appreciated and
rewarded by the bank management.

The bank personnel, as a matter of strategy, should try to find a place in the hearts of the rural folks.
Role of “personal influence” on acceptance of an organization or services in the rural scenario should
be kept in mind. The “personal influence” refers to the effect of statements made by one person
about the bank or its services on another person’s attitude towards the institution. In a village,
people generally know one another and have time and patience to converse with one another.
Opinion on the institution and its services are discussed among local people. A satisfied customer
always acts as an ambassador of goodwill for the bank and brings clientele through his own efforts. 
The personnel, therefore, should strive for customer satisfaction as a marketing strategy, if not as
the objective of the organization.

In conclusion, it may be understood that the success of marketing of banking services in rural areas
depends on how the organization properly blends the marketing concepts with the right approach
required to penetrate into rural households. And the final result of the efforts will depend on the
sincerity and zeal of the field personnel making the efforts and the organizational support available
to them.

NATURE AND FEATURES OF SERVICE INDUSTRY

A service is any activity or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything. Its production may or may not be tied to a physical
product. Activities such as renting a hotel room, depositing money in the bank, travelling on an
airplane, visiting a doctor, getting a hair cut etc are all examples of services. A company must
consider four characteristics of services when designing marketing programs. These
features/characteristics are:

INTANGIBILITY: Service intangibility means that services cannot be seen, tasted, felt, heard or
smelled before they are bought. For example people undergoing cosmetic surgery cannot see the
result before the purchase, and airline passenger have nothing but the airline ticket and a promise of
safe delivery to their destinations.

To reduce uncertainty, buyers look for ‘SIGNAL’ of service quality. They draw conclusions about
quality from the place, process, physical evidence, people, and price, equipment and communication
materials that they can be seen. There4, the service provider’s task is to make the service tangible in
one or more ways. Whereas product marketers try to add intangibility to their tangible offers,
service marketers try to add tangibles to their intangibility offers.

Consider a bank that want to convey the idea of that its service is quick and efficient. It must make
this positioning strategy tangible in every aspect of customer contact. The bank’s physical setting
must suggest quick and efficient service: Its exterior and interior should have clean lines; internal
traffic flow should be planned carefully; waiting time should seem short at teller windows ATMs; and
background music should be light and upbeat. The bank’s staff should be busy and properly dressed.
The equipment-computers, copy machine, desk- should look modern. The bank ads and other
communications, should suggest efficiency, with clean and simple designs and carefully chosen
words and photos that communicate the bank’s positioning. The bank should choose a name and
symbol for its service that suggest speed and efficiency. It pricing for various services should be kept
simple and clear.

INSEPARABILITY: Physical goods are produce, then stored and later sold and still later consumed. In
contrast, service are first sold, the produce and at the same time consumed. Service inseparability
means that services cannot be separated from their providers, whether the providers are people or
machines. If a service employee provides the employee service, then the employee is a part of the
service. Because the customer is also present as the service is produced, provider-service interaction
is a feature of services marketing. Both provider and the customer affect the service outcome.

In the case of entertainment and professional services, buyers care a great deal about who provide
the service. It is not the same service at an Alice-Billy concert if Alice gets sick and is replace by
Anne-Maria. A legal defense supplied by Samuel Nobody differs from one supplied by Kingsley
Somebody. When customers have strong preferences, price is used to ration the limited supply of
the provider’s time. Thus Kingsley Somebody charges more than do less well-known lawyers.

VARIABILITY: Service variability means that the quality of services depends upon who provides them
as well as when, where, and how they are provided. For example, some hotels- say Kairaba Hotel’s –
have reputations for providing better services than others. Within Kairaba Hotel’s, one registration
desk employee may be cheerful and efficient, whereas another standing just a few feet away may be
unpleasant and slower. Even the quality of a single Kairaba Hotel’s employee’s service varies
according to his or her energy and frame of mind at the time of each customer encounter.

Service firm there4 should take several steps to manage service variability. They can select and
carefully train their personnel to give good service. They can provide employee incentives that
emphasize quality, such as employee of the month awards or bonuses based on customer’s
feedback. A firm can check customer satisfaction regularly through suggestion and complaint
systems, customer’s surveys and comparison shopping. When poor service is found, it can be
corrected.

PERISHABILITY: Services perish ability means that service cannot be stored for later sale or use.
Some doctors charges patients for missed appointments because the service value existed only at
that point and disappear when the patient did not show up. The perishabilty of service is not a
problem when demand is steady. However when demand fluctuates service firm often have difficult
problems. For example, public transportation companies have to own much more equipment than
they would if demand where even throughout the day.

Service firms can use several strategies for producing a better match between demand and supply.
On the demand side, charging different prices at different times will shift some demand from peak
period to off-peak periods.

On the supply side, firms can hire part-time employees to serve peak demand. Colleges add part
time lecturer when enrolment goes up, and restaurants call in part-time waiters and waitresses to
handle busy shift. Peak time demand can be handled more efficiently by having employees do only
essential tasks during peak periods. Some of this task can be shifted to customers, as when
customers fill out their own medical records or bag their own groceries.

MARKETING STRATEGIES FOR SERVICE FIRM

Until recently, service firms lagged behind manufacturing firms in their use of marketing. Many
service businesses are small (auto repair shop, dry cleaners) and often consider marketing unneeded
or too costly. Other service businesses (colleges, hospital) once had so much demand that they did
not need marketing until recently. Still others (legal, medical and accounting practices) believe that it
was unprofessional to use marketing).

Still, just like manufacturing businesses, good service firm use marketing to position them strongly in
chosen target markets. E.g. the Kairaba Hotel’s can position itself as offering a memorable
experience that ‘enlivens the senses, instills well-being and fulfils even the unexpressed wishes and
needs of our guests’. These and other service firms establish their positions through traditional
marketing mix activities.

However, because services differ from tangible products, they often require additional marketing
approaches. In a product business, products are fairly standardized and can sit on shelves waiting for
customers. But in a service business, the customer and frontlines service employee interact to create
the service. Thus, service providers must work to interact effectively with customers to create
superior value during service encounters. Effective interactions, in turn, depend on the skills of
frontline service employees, and on the service production and support process backing these
employees.

Thus successful companies focus their attention on both their employees and customers. They
understand the service-profit chain, which links service firm profit with employee and customer’s
satisfaction. These chain consist of five links:

Healthy service profits and growth---superior service firm performance, which

  

Result from................................................................................................................

Satisfied and loyal customers---satisfied customers who remain loyal, repeat purchase, and
refer other customers, which result
from.........................................................................................................................

Greater service value ---more effective and efficient customer value creation and services
which result from..............................................................................

Satisfied and productive service employees ---more satisfied, loyal and hardworking
employees, which result from..........................................................

Internal service quality---superior employee selection and training, a quality work

environment, and strong support for those dealing with customers.

There4, reaching service profits and growth goals begins with taking care of those who take care of
customers. The following story illustrate the concept of the service-profit-chain by Mr. Samuel
Nobody, the chairman of Kairaba Hotel’s and Towels during an interactive interview with some
prospective managers :-Mr. Samuel Nobody tell job candidates that the hotel chain wants to satisfy
three groups: customers, employees and stockholders. Although all of the groups are important, he
ask in which order should the group be satisfied. Looking at the candidate contributions, Mr. Samuel
Nobody, however reasons differently. First, employees must be satisfied. If employee love their jobs
and feels a sense of pride in the hotel they will serve customers well Satisfied customers will return
frequently to the hotel. Moreover, dealing with happy customers will make employee even
more satisfied, resulting in better service and still greater repeat business, all of which will yield a
level of profit that will satisfy Kairaba Hotel’s stockholders.

INSURANCE MARKETING
  INTRODUCTION:
Wherever there is uncertainty there is risk. We do not have any control over uncertainties which
involves financial losses. The risks may be certain events like death, pension, retirement or uncertain
events like theft, fire, accident, etc.
Insurance is a financial service for collecting the savings of the public and providing them with risk

Coverage. The main function of Insurance is to provide protection against the possible chances of
generating losses. It eliminates worries and miseries of losses by destruction of property and death. It
also provides capital to the society as the funds accumulated are invested in productive heads.
Insurance comes under the service sector and while marketing this service, due care is to be taken in
quality product and customer satisfaction. While marketing the services, it is also pertinent that they
think about the innovative promotional measures. It is not sufficient that you perform well but it is also
important that you let others know about the quality of your positive contributions.
The creativity in the promotional measures is the need of the hour. The advertisement, public relations,
word of mouth communication needs due care and personal selling requires intensive care.
 INSURANCE MARKETING:
The term Insurance Marketing refers to the marketing of Insurance services with the aim to create
customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the
formulation of an ideal mix for Insurance business so that the Insurance organization survives and
thrives in the right perspective.

 MARKETING –MIX FOR INSURANCE COMPANIES:

The marketing mix is the combination of marketing activities that an organization engages in so as to
best meet the needs of its targeted market. The Insurance business deals in selling services and
therefore due expertise in the formation of marketing mix for the Insurance business is needed. The
marketing mix includes sub-mixes of the 7 P’s of marketing i.e. the product, its price, place, promotion,
people, process & physical attraction. The above mentioned 7 P’s can be used for marketing of Insurance
products, in the following manner:

1. PRODUCT:
A product means what we produce. If we produce goods, it means tangible product and when we
produce or generate services, it means intangible service product. A product is both what a seller has to
sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their
product.
In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are
the two leading companies offering insurance services to the users. Apart from offering life insurance
policies, they also offer underwriting and consulting services.
When a person or an organization buys an Insurance policy from the insurance company, he not only
buys a policy, but along with it the assistance and advice of the agent, the prestige of the insurance
company and the facilities of claims and compensation.

It is natural that the users expect a reasonable return for their investment and the insurance companies
want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the
services or the schemes should be motivational. The Group Insurance scheme is required to be
promoted, the Crop Insurance is required to be expanded and the new schemes and policies for the
villagers or the rural population are to be included
2. PRICING:
In the insurance business the pricing decisions are concerned with:
i) The premium charged against the policies,
ii) Interest charged for default in the payment of premium and credit facility, and
iii) Commission charged for underwriting and consultancy activities.
With a view of influencing the target market or prospects the formulation of pricing strategy becomes
significant. In a developing country like India where the disposable income in the hands of prospects is
low, the pricing decision also governs the transformation of potential policyholders into actual
policyholders.
The strategies may be high or low pricing keeping in view the level or standard of customers or the
policyholders.
The pricing in insurance is in the form of premium rates. The three main factors used for determining
the premium rates under a life insurance plan are mortality, expense and interest. The premium rates
are revised if there are any significant changes in any of these factors.

• Mortality (deaths in a particular area):

When deciding upon the pricing strategy the average rate of mortality is one of the main considerations.
In a country like South Africa the threat to life is very important as it is played by host of diseases.

• Expenses:
The cost of processing, commission to agents, reinsurance companies as well as registration are all
incorporated into the cost of installments and premium sum and forms the integral part of the pricing
strategy.

• Interest:
The rate of interest is one of the major factors which determine people’s willingness to invest in
insurance. People would not be willing to put their funds to invest in insurance business if the interest
rates provided by the banks or other financial instruments are much greater than the perceived returns
from the insurance premiums.

3. PLACE:
This component of the marketing mix is related to two important facets –
i) Managing the insurance personnel, and
ii) Locating a branch.
The management of agents and insurance personnel is found significant with the viewpoint of
maintaining the norms for offering the services. This is also to process the services to the end user in
such a way that a gap between the services- promised and services – offered is bridged over. In a
majority of the service generating organizations, such a gap is found existent which has been
instrumental in making worse the image problem.
The transformation of potential policyholders to the actual policyholders is a difficult task that depends
upon the professional excellence of the personnel. The agents and the rural career agents acting as a
link, lack professionalism. The front-line staff and the branch managers also are found not assigning due
weight age to the degeneration process. The insurance personnel if not managed properly would make
all efforts insensitive. Even if the policy makers make provision for the quality up gradation, the
promised services hardly reach to the end users.
It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or
users. They are required to be given adequate incentives to show their excellence. While recruiting
agents, the branch managers need to prefer local persons and provide them training and conduct
seminars. In addition to the agents, the front-line staff also needs an intensive training programme to
focus mainly on behavioral management.

Another important dimension to the Place Mix is related to the location of the insurance branches.
While locating branches, the branch manager needs to consider a number of factors, such as smooth
accessibility, availability of infrastructural facilities and the management of branch offices and premises.
In addition it is also significant to provide safety measures and also factors like office furnishing, civic
amenities and facilities, parking facilities and interior office decoration should be given proper attention.
Thus the place management of insurance branch offices needs a new vision, distinct approach and an
innovative style. This is essential to make the work place conducive, attractive and proactive for the
generation of efficiency among employees. The branch managers need professional excellence to make
place decisions productive.

4. PROMOTION:
The insurance services depend on effective promotional measures. In a country like India, the rate of
illiteracy is very high and the rural economy has dominance in the national economy. It is essential to
have both personal and impersonal promotion strategies. In promoting insurance business, the agents
and the rural career agents play an important role. Due attention should be given in selecting the
promotional tools for agents and rural career agents and even for the branch managers and front line
staff. They also have to be given proper training in order to create impulse buying.

Advertising and Publicity, organization of conferences and seminars, incentive to policyholders are
impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall
paintings and publicity drive through the mobile publicity van units would be effective in creating the
impulse buying and the rural prospects would be easily transformed into actual policyholders.

5. PEOPLE:
Understanding the customer better allows designing appropriate products. Being a service industry
which involves a high level of people interaction, it is very important to use this resource efficiently in
order to satisfy customers. Training, development and strong relationships with intermediaries are the
key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the
staff and agent level, is one of the important areas to look into.

6. PROCESS:
The process should be customer friendly in insurance industry. The speed and accuracy of payment is of
great importance. The processing method should be easy and convenient to the customers. Installment
schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data
Warehousing will smooth the process flow.
IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can
either complement or supplement the channels of distribution cost effectively. It can also help to
improve customer service levels. The use of data warehousing management and mining will help to find
out the profitability and potential of various customers product segments.
7. PHYSICAL DISTRIBUTION:
Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers
have a large reach and presence in India. Building a distribution network is very expensive and time
consuming. If the insurers are willing to take advantage of India’s large population and reach a profitable
mass of customers, then new distribution avenues and alliances will be necessary.
Initially insurance was looked upon as a complex product with a high advice and service component.
Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability.
As the awareness increases, the product becomes simpler and they become off-the-shelf commodity
products. Today, various intermediaries, not necessarily insurance companies, are selling insurance. For
example, in UK, retailer like Marks & Spencer sells insurance products.
The financial services industries have successfully used remote distribution channels such as telephone
or internet so as to reach more customers, avoid intermediaries, bring down overheads and increase
profitability. A good example is UK insurer Direct Line. It relied on telephone sales and low pricing.
Today, it is one of the largest motor insurance operators.
Technology will not replace a distribution network though it will offer advantages like better customer
service. Finance companies and banks can emerge as an attractive distribution channel for insurance in
India. In Netherlands, financial services firms provide an entire range of products including bank
accounts, motor, home and life insurance and pensions. In France, half of the life insurance sales are
made through banks.
In India also, banks hope to maximize expensive existing networks by selling a range of products. It is
anticipated that rather than formal ownership arrangements, a loose network of alliance between
insurers and banks will emerge, popularly known as bancassurance.
Another innovative distribution channel that could be used is the non-financial organizations. For an
example, insurance for consumer items like fridge and TV can be offered at the point of sale. This
increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods
will be possible and insurance can be one of the various incentives offered.

 
BANKING MARKETING
Banks today are operating in a highly competitive and rapidly changing environment. In the changing
economic scenario, a professional approach to business development is essential and the survival of a
banking institution depends on its ability to take up challenges coming up in the environment. 
Developing business through marketing of bank’s services is one of the crucial areas which need
attention of the bankers to ensure profitable survival.

BANKING MARKETING : CONCEPTS

The role of marketing in an organization’s existence and growth need not be overemphasized in today’s
competitive environment. According to Peter Drucker, “marketing is so basic that it cannot be
considered a separate function”. It is the whole business seen from the point of view of its final result,
that is, customer’s point of view. Survival of an organization depends upon its ability to acquire
resources necessary for its sustenance. One of the modes of survival, as observed by Philip Kotler, is
“exchange”, whereby an organization creates and offers goods and services that are able to attract and
satisfy the purchasers, in exchange of its value. This option can be gainfully exercised only if the
organization develops the capacity to produce the needed goods and services. The organizations should
be geared to identify the customer needs and preferences which are subject to change over a period of
time.

One of the policy issues discussed in marketing is the ultimate objective of the marketing efforts of an
organization. The general belief is that the objectives of marketing are to maximize the market’s
consumption of your products and services. However, it would be desirable to set the goal at maximizing
consumer satisfaction, rather than consumption. The organization, in the long run, is likely to benefit
from a customer oriented approach to marketing. The approach, in other words, should ensure strong
foundation for the institution’s existence, because the concepts of marketing have its origin on the
premise that man is a creature of needs and wants. And there is constant effort on his side to satisfy his
needs. Further, his needs and wants keep changing with time, circumstances and the immediate
environment in which he is operating. Marketing management essentially involves the efforts to achieve
the need satisfaction of the target group the institution is trying to serve.

There are various philosophical aspects which can give conceptual orientation to marketing personnel’s
approach. The “selling concept” assumes that the consumers will either not buy or not buy enough of
an organization’s products unless the organization makes a substantial effort to stimulate their
interests in its products. This becomes all the more relevant when the organizations are functioning in
a rich environment of competitors. “Product Concept” in marketing philosophy assumes that the
consumers will favor those products that offer best quality for the price, while “production concept”
assumes that consumers will favor those products which are available and affordable. An organization’s
task, therefore, should be to serve target markets in a way that produces not only want satisfaction, but
long-run individual and social benefit as the key to attracting and holding customers.

The need for a well defined institutional framework within the organization to manage the marketing
efforts should be reckoned by any business concern. It is, therefore, essential that the institution
constitutes a marketing wing which will take care of the marketing function of the organization. This
compartment has to work smoothly with other segments of the organization. Acquiring modern
marketing orientation requires support from top management, a committed task force, constant review
of strategies and a consultant’s help if considered necessary. The marketing wing should be adequately
supported by a “Marketing Information System”, which is a critical element in effective marketing. The
information system is the channel linking external environment with the executives of the institution.
BANK  MARKETING :

Marketing philosophy, in any context, refer to the need satisfaction of the institution’s clients. The basic
step involves identifying the needs of the customers and developing products to suit their needs or
modifying the existing products accordingly. It also requires the need for foreseeing wants of the
customers in future and developing suitable products of their requirement. Deryk Weyer of Barclay’s
Bank attempted a comprehensive definition for Bank Marketing. According to him, it consists of
identifying the most profitable markets now and in future; assessing the present and future needs of
customers; setting business development goals and marketing plans to meet them and managing the
various services and promoting them to achieve the plans, all in the context of a changing market
environment.  Successful marketing in a bank calls for commitment at all levels to the task defined in
this regard. Achieving higher business standards and operational performance through marketing of
banking services should be one of the directional goals of the organisation.

In view of the competitive surroundings in which a bank is compelled to function, there is need for
formulation of a strategic action plan for its marketing efforts. A marketing strategy, in general, is a
systematic, appropriate and feasible set of concepts and actions through which the institution strives to
achieve its goal of customer satisfaction and profitable survival. Strategy should be designed after taking
into account the strengths and weaknesses of the organization. For example, a bank or branch with
clientele from various segments could think of “market penetration” by offering the existing range of
services to existing customers. On the other hand, a bank which is having expanding business through
new branches or branches which are not facing acute competition could think of “Market Development”
by offering the existing services to new customers. However, the real marketing challenges arise from
the institution’s capability to design new product range for their customers of various segments. The
strategy, therefore, lies in increasing the client base and consolidating the relationship with existing and
new clients through existing or newly developed products.

The operational aspects of strategies for marketing contain actions such as development of Relationship
Banking, designing of effective delivery system, ensuring customer-oriented services and modifying the
system into a personal selling organization. In western banking, officials assigned the job of personally
contacting the customers and offering the services at doorsteps had been able to make a significant
impact on the development of business for their organizations. The importance and role of personal
selling and customer contacts in the marketing efforts of a banking institution stem from the success of
such efforts in many banking institutions all over the world.

The implementation of the strategies is as crucial as its design in ensuring successful marketing. The
communication of the adopted strategies to different tiers of the institution and ensuring of its proper
understanding by personnel at all levels is essential for successful implementation of the strategies.  The
communication becomes difficult in organizations which have substantial branch network spread over a
large geographical area. The field staff at the branch level should be trained to implement the strategies
after modifying them to suit the environment in which they are operating. The knowledge of the local
environment, demographic features and cultural aspects is an essential requirement for the field staff
involved in marketing efforts for the organization.

RURAL PSYCHOLOGY AND BANK MARKETING :

Banks have a great role to play in the development of rural areas and improvement in rural life. In order
to play this role effectively, the banker should have fair knowledge of the socio-psychological aspects of
the rural society he is serving. First of all, the banker should be aware of the “Human Groups and
Institutions” in the area of operation. This means that one should be aware of the role of agriculture in
the rural economy, cultural aspects of the society, community aspects, family and farm patterns,
institutional facilities, etc.  Secondly, the ‘Process of Change’, if any, taking place in the rural scenario,
should be known to him. The general changes that take place in the rural scenario include urbanization,
industrialization, migration, social mobility, changes in values, farm structure, etc. Thirdly, there could
be ‘Planned Changes’, generally emanating from administration of voluntary organizations, such as
resettlement, land reforms, community development, agricultural extension work, education etc, of
which the field staff should be familiar. Fourthly, a general idea of the status of various development
projects under execution, welfare measures, schemes under implementation, etc. will help the banker
to have a complete picture of the rural society in which he is operating. The knowledge on all these
aspects of the rural society will help the banker in choosing the right approach to the clients in rural
areas since education of the people on the services offered is an integral part of effective marketing. 
The psychology of the rural people should be properly understood. It is only normal that the people in
rural areas do not adopt a practice immediately. In fact, the tendency of an illiterate person is to distrust
the same. The banking habits are no exception to this. But subsequently, on being properly educated, he
may develop interest and would like to know more about. If the information imparted convinces him
that the idea is something useful, he enters the t third stage of thinking about the possibility of
accepting the idea for his benefit. Thus, there are different stages in the “adoption process” of the rural
folks, which should be clearly understood by the field personnel.

The cultural pattern of the rural folks influences their economic behavior considerably. Some rural
communities may have a “modern pattern” of culture. These communities would be ever willing to try
something new if they are convinced that it can improve their present position. Dissemination of
information on bank’s services become easy and the results are achieved at a faster pace with such
groups. On the other hand, groups characterized by “traditional pattern” of culture are generally
opposed to change. Their main concern will be to preserve what has been the tradition and resists
intrusion in to their ways of living. Effective marketing becomes difficult while dealing with such groups. 
Members of the group with a modern pattern of culture tend to be individualistic, while system of social
control will be more in groups with traditional pattern. In such groups, where tradition is emphasized, a
far reaching change in attitude towards anything, especially banking habits can be brought about only
with the support of their “Clan Leaders”. The clan leaders are the people whom the rest of the
community will listen to or whose approval, explicit or otherwise, the people look forward to for
accepting anything new. It is quite possible that these leaders are not formal leaders of the group such
as political leaders, but could be an elderly person or a religious leader of the community trusted by the
general public. Success in approaching such rural societies definitely lies in understanding the rural
psychology in this regard and identifying such influential individuals from the rural masses. Any effort,
therefore, to popularize the banking services in rural areas call for absolute knowledge about the social
structures, the culture, the functioning of the rural groups and the nature and type of their leadership.

Changes are taking place in contemporary rural society, though at a slower pace. The elements of
dynamism of stability are existent in the rural environment, in the case of urban areas, though not
operative in identical degrees or patterns. The changes, however, have been generally confined to
changes in the agricultural pattern, community aspects and some general changes in the economic
scenario. These changes, however, generate scope for institutional services in various segments of the
rural economy’s operation and the banking institutions should capitalize on the same through deep
penetration into rural households. This can be made possible only if the bank’s personnel are aware of
the changes taking place in the rural environment and design their approach to the situation in a skillful
manner. Modifying the services to suit the dynamic environment is considered as the backbone of
marketing efforts. However, while designing or modifying, it should be ensured that the products are
not inconsistent with basic attitudes and cultural values of the people. Rapidity of acceptance of
innovations is a function of many factors, including the nature of innovation and its relationship to
existing cultural patterns.

Banking institutions are vehicles of economic development. According to Rostow, economic theories
and development concepts should be linked to sociological and psychological elements, if it is to be
maximally useful. Gunar Myrdal had opined that “attitudes” and “institutions” play a significant role in
rapid economic development. Psychology, as a science of human behavior emphasizes the influence of
human factors which accelerate or impede the rapid acceptance of innovative ideas. Marketing efforts
in the rural areas should be designed with proper emphasis on these influential factors.

BANK MARKETING : ROLE OF PERSONNEL

The marketing strategy for rural areas, by and large, assigns a responsible role on branch officials in
bringing out socio-economic transformation of the rural society. There is need for a total marketing
approach from the personnel to penetrate all levels in all areas of banking operations. Efforts need to be
made to design and launch suitably tailored services to meet its changing needs of the rural population.
The personnel attempting marketing in rural areas should be able to establish an organic link with rural
masses. They should be committed to the cause of rural upliftment and should implement in totality the
market strategies formed for the purpose. The knowledge of the command area of the branch and the
ability to identify potential customers and their financial needs are pre-requisites for the success of
marketing strategies. This calls for the need of training the staff with sharp focus on improving the
knowledge of the bank staff about the rural atmosphere and the skills necessary to deal with the rural
customers. There is also need for developing a sense of belonging towards the organization, customers
and the society. The field staff, to the extent possible, should know the language and dialect of the
people and should be able to communicate in a manner which is appealing to the people. The
organization on their part, therefore, should take adequate care in identifying the right people for this
specific job. They should also foster innovative and creative approach in working to bring in new and
original ideas and develop talent. There is also need for rationalization of the work load for the
personnel in the rural branches to enable them to give adequate attention to the villagers and their
requirements. Further, the institutions need to motivate their personnel for popularizing the services in
rural areas. Every member of the staff is a salesman of the bank’s services and an ambassador of the
institution among people. Marketing efforts made by the personnel and its effect on business
development should be appreciated and rewarded by the bank management.

The bank personnel, as a matter of strategy, should try to find a place in the hearts of the rural folks.
Role of “personal influence” on acceptance of an organization or services in the rural scenario should be
kept in mind. The “personal influence” refers to the effect of statements made by one person about the
bank or its services on another person’s attitude towards the institution. In a village, people generally
know one another and have time and patience to converse with one another. Opinion on the institution
and its services are discussed among local people. A satisfied customer always acts as an ambassador of
goodwill for the bank and brings clientele through his own efforts.  The personnel, therefore, should
strive for customer satisfaction as a marketing strategy, if not as the objective of the organization.

In conclusion, it may be understood that the success of marketing of banking services in rural areas
depends on how the organization properly blends the marketing concepts with the right approach
required to penetrate into rural households. And the final result of the efforts will depend on the
sincerity and zeal of the field personnel making the efforts and the organizational support available to
them.

 
References
 Abell, "Defining the Business: The Starting Point of Strategic Planning"^ "The Marketing Imagination"

^ J. B. Quinn, "Strategies for Change: Logical Incrementalism" (Richard D. Irwin, 1980)

^ a b Baker, Michael The Strategic Marketing Plan Audit 2008. ISBN 1902433998

^ Quick MBA Marketing plan based on consumer and competitor analyses

^ Marketing plan basics Table of marketing targets, actions, means and results

H. A. Simon, Rational decision making in business organizations, 'American Economic Review'

J. Pfeiffer and G. R. Salancik, 'The External Control of Organizations'

K. Paolo Sumagaysay, "The oversaturated world"

Principles of Marketing by Philip Kotler and Gary Armstrong (seventh Edition).

Principles of Marketing by Philip Kotler (third Edition).

Appreciation Marketing by Gary Armstrong.

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