SERVICE MARKETING IN BANKING SECTOR

INTRODUCTION
The name bank derives from the Italian word banco. In fact, the word traces its origins back to the Ancient Roman

Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived.
"banking business" means the business of receiving money on

current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act.

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

Change in demographic structure: Intense competition in financial service sector: Banks wish for increasing profit:

Major Players
Global JP Morgan Chase Bank of America HSBC Citigroup Deutsche Bank Goldman Sachs Morgan Stanley Merrill Lynch BNP Paribas Indian SBI ICICI PNB HDFC Bank of Baroda Corporation Bank IDBI UTI

RECENT INNOVATION & DATA

Only HSBC and American Express received a AAA credit

rating. The highest rating an Indian bank got in the list is AA for State Bank of India.
The top Indian bank in the list is State Bank of India ranked at

69. Its is ranked at 60 in 2008 because the valuation was done for the group of all the State Banks. Valuation for 2009 is done for SBI alone.
The next bank in the list is ICICI Bank which is the largest

private sector lender.

HDFC bank is the 3rd Indian bank in the list.

Bird View
Name of bank USB Credit suisse HSBC CITIGROUP MORGAN STANLEY Global loss $18billion $7.22billion $9.3billion $9.83billion $2.1billion Indian gain $15.4Million $6.4Million $666Million Rs1,710CR $17.69Million

India - Strategic Map

Citibank

High

Stan C HSBC ICICI Bank Karur Vysya

ABN Amro

HDFC
IndusInd Bank Vysya Bank State Bank of India Bank of Baroda

Service Quality

Bank of India
PNB Andhra Bank Canara Bank Co-operative Banks

Low

Rural Banks

Rural

Regional Geographical Spread

Urban

MARKETING MIX
PRODUCT/SERVICE:
A product is anything that can be offered to a market for

attention, acquisition, use or consumption that might satisfy a want or need

Recently, banks are in a period that they earn money in

servicing beyond selling money. The prestige is get as they offer their services to the masses.
Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. banking services, the rights like consultancy for services to be compounded are also preferred.

Like other services, banking services are also intangible.

Besides the basic attributes like speed, security and ease in

 PRICE:
The prices in banking have names like interest, commission

and expenses.

Price is the sole element of marketing variables that create earnings, while others cause expenditure. While marketing mix elements other than price affect sales volume, price affect both profit and sales volume directly. and price policies. Because mistakes in pricing cause customers shift toward the rivals offering likewise services. cost-plus, transaction volume base and challenging leader in pricing of their services.

Banks should be very careful in determining their prices

Traditionally, banks use three methods called

PLACE
The complexity of banking services are resulted from different kinds of place. The most important feature of banking is the persuasion of customers benefiting from services. Branch offices use traditional method in distribution of banking services.

PROMOTION
One of the most important element of marketing mix of services is promotion which is consist of personal selling, advertising, public relations, tools. PERSONAL SELLING: Personal selling occurs in two ways. First occurs in a way that customer and banker perform interaction face to face at branch office. In this case, whole personnel, bank employees, chief and office manager, takes part in selling. Second occurs in a way that customer representatives go to customers place. Customer representatives are specialist in banks services to be offered and they shape the relationship between bank and customer

Promotion mix
Blended Mix of Promotion Tools
Advertising

Personal selling

Sales Promotion

Public Relations

Direct Marketing

Cont.

You're at a party with friends and see a gorgeous girl. One of your friends goes up to her and pointing at you says, "He's fantastic."

That's Advertising.

You see a gorgeous woman at a party.

You go up to her and say, "I'm fantastic."

That's Direct Marketing.

Cont.
You're at a party and see a gorgeous girl. You get up and straighten your tie, you walk up to her and pour her a drink. You open the door for her, offer her a ride, and then say, "By the way, I'm fantastic."

That's Public Relations.

You're at a party and see a gorgeous woman. She walks up to you and says "I hear you're fantastic."

That's Brand Recognition.

Cont.
Advertising
1. Conceive customers to examine all kinds of services that banks offer 2. Increase use of services 3. Create well fit image about banks and services 4. Change customers attitudes 5. Introduce services of banks 6. Support personal selling 7. Emphasize well service

Cont.
PUBLIC RELATIONS

1. Establishing most effective communication system.

2. Creating sympathy about relationship between bank and customer 3. Giving broadest information about activities of bank.
E.g providing all kind of schemes and activitis online,also at the inquiery counter.
SELLING PROMOTIONAL TOOLS

Another element of the promotion mixes of banks is

improvement of selling. Mostly used selling improvement tools are layout at selling point, rewarding personnel, seminaries, special gifts, premiums, contests.

PEOPLE
People are important for bank means as an employee

as well as customer.
For hospitality and customer relations it is very

important to focus on people.

It also plays a vital role in quality control, personal

selling, and employee morale.

PHYSICAL EVIDENCE
In Banking the physical evidence is basically

depends on customers experience,their feedback.

Here, the core product is the satisfaction of

customer. Another evidence are the leaflets ,broucher,schemes,

Process :
Process determines the efficiency of banking operations and thus the service quality in a bank.

Tele-banking ATMs Computerization (core banking) Plastic Cards

MARKET SEGMENTATION
Banks should care about following criteria for selection of media. 1. 2. 3. 4. 5. Which media the target market prefer Characteristics of service Content of message Cost Situation of rivals

Ads should be mostly educative, image making and provide the information as follows: 1. Activities of banks, results, programs, new services 2. Situation of market, government decisions, future developments 3. The opportunities offered for industry branches whose development meets national benefits.

MARKET TARGETING
Evaluating Market Segments

Selecting Market Segments

Choosing a Market-Coverage Strategy Targeting Process:

[1] Classify the locations according to the service requirements [2] Select the target group of customer

POSITIONING
Products can be positioned on specific attributes or

against another product class. "Without a position, it is almost impossible to achieve a meaningful and sustainable point of differentiation." Product Differentiation:

Image Differentiation

Location Differentiation Service Differentiation Physical Attribute Differentiation Personnel Differentiation

Business Process - Transactions

Cash Cash

Bank Customer

Instant Receipt Transaction stored on card

MFI Agent

Bank Branch Transaction Data transferred via phone lines

Bank Systems

Updates for Customer

Transaction Data

BC Systems

23

STP
SBI offers to its customers.
DOMESTIC TREASURY SBI VISHWA YATRA FOREIGN TRAVEL CARD BROKING SERVICES REVISED SERVICE CHARGES ATM SERVICES INTERNET BANKING E-PAY E-RAIL

RBIEFT
SAFE DEPOSIT LOCKER GIFT CHEQUES MICR CODES

FOREIGN INWARD REMITTANCES

DEVELOPMENT IN MARKETING SCOPE

INTERNAL MARKETING
For personnel of the organization to be considered their own goals and

service situation, values of the organization are sold to them.

The communication techniques carried out for customers are also performed for the personnel in internal marketing and this two techniques go together.

For example, the ads that aim creating firms image should be prepared with regarding to audience which is composed of firms personnel.

Cont.
NETWORK MARKETING
This approach takes the organization as a sequence

which involves producer and customer that market services to each other in the organization.
In this structure, the activities of departments that

compose organization would be more focused on market. This will also affect the structure of organization.

Cont.
RELATIONSHIP MARKETING
It was mentioned that close relationship was established

between producer and customer in service sector. In addition to this, life cycle of a customer relationship was also mentioned under the product outline.
According to the researchers, maintaining the

relationship for extant customer increases the profit of firms.

It should be emphasized that this fact has an importance

for service sector.

Cont.
Life cycle of a customer relationship is composed of three stages.
At the first stage, firms try to be well known and to acquire

new customers.

At the second stage, the connection between customer

and bank has been achieved. During the stage, bank intensified their activities on acquired customers and both of them promises mutually. the service is consumed. During the stage, firms face Reality Instants which could possibly achieve satisfaction of customer and continuous relationship. This could be also true for second stage. So, these instants should be managed successfully.

At the third stage, these promises are accomplished and

List of 17 Indian banks in the global 500 :

State Bank of India ICICI Bank HDFC Bank Punjab National Bank Bank of India Canara Bank Bank of Baroda Axis Bank Kotak Bank Union Bank of India Indian Overseas Bank IDBI Bank Limited State Bank of Patiala Indian Bank Power Finance Corp Oriental Bank of Commerce Syndicate Bank

SWOT ANALYSIS.
STRENGTHS
Indias developing economy Small scale, medium scale,& large scale industries financial support by government, Providing global market.

WEAKNESSES
Lack of adequate infrastructure.
Complex information system.

OPPORTUNITIES
More proactive role from the government of India in

terms of framing policies.

Allowing entry of more multinational banks into the

country giving us a global perspective.

THREAT
Global player can be capture the whole market

CONCUTION
The banking industry has changed drastically over the past decade. The banking reforms and the opening of the economy to foreign and private banks have improved the working of the public sector banks. Increased competition and technology have enhanced the quality of service offered to the customers and also improved the returns for bankers.