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Marketing in Banking Sector

A case study on Dutch Bangla Bank Limited

13 December 2012

Marketing in Banking Sector: A case study on Dutch Bangla Bank Limited

Prepared for Prof. Mr. Shakil Huda Course Instructor M501: Marketing Theory & Practice

Prepared by Ahsan Azhar Shopan Roll: 54 MBA 47D

Institute of Business Administration University of Dhaka December 13, 2012

Letter of Transmittal

December 13, 2012

Mr. Shakil Huda Professor Institute of Business Administration University of Dhaka

Sir:

I am pleased to inform you that I have completed the report as per your instruction, on the theme Describe a marketing scenario covering all marketing aspects, as a requirement of the course, Marketing Theory and Practices. The title of my report is Marketing in Banking Sector: A case study on Dutch Bangla Bank Limited

I am really thankful for the opportunity to work on this report as it allowed me to get a thorough understanding of marketing process and helped me to gain practical insights about marketing strategies.

I will be very happy to address any further queries in this regard.

Thanking you,

Ahsan Azhar Shopan Roll: 54 MBA 47D Institue of Business Administration University of Dhaka

Table of Contents
Executive Summary ............................................................................................................ v Introduction ........................................................................................................................ 1 The Bank ............................................................................................................................. 2 2.1 Company Profile........................................................................................................ 2 2.2 Objectives ................................................................................................................. 3 2.3 Mission...................................................................................................................... 3 2.4 Vision........................................................................................................................ 3 2.5 Core Values ............................................................................................................... 3 2.6 Functions ................................................................................................................... 3 2.7 Corporate Strategy ..................................................................................................... 4 2.8 Organizational Goals ................................................................................................. 4 2.9 Operations ................................................................................................................. 5 2.9.1 Deposit Collection ............................................................................................ 5 2.9.2 Life Line Disbursement..................................................................................... 5 2.9.3 Foreign Trade ................................................................................................... 5 2.9.4 Foreign Currency Endorsement ......................................................................... 5 2.9.5 Investment ........................................................................................................ 6 2.9.6 Social Responsibility ........................................................................................ 6 2.10 Overall Standings .................................................................................................... 6 Marketing Mix .................................................................................................................... 8 3.1 Service ...................................................................................................................... 8 3.1.1 Deposit Services ............................................................................................... 8 3.1.2 Term Deposit .................................................................................................... 8 3.1.3 Loan & Advances ............................................................................................. 9 3.1.4 ATM Booths and Cards .................................................................................... 9 3.1.5 Internet Banking ............................................................................................. 10 3.1.6 Mobile banking ............................................................................................... 11 3.1.7 Fast Track ....................................................................................................... 11 3.1.8 SMS and Alert Banking .................................................................................. 11 3.2 Price ........................................................................................................................ 11 3.3 Place........................................................................................................................ 12 3.4 Promotion................................................................................................................ 12 Marketing Strategies ......................................................................................................... 13 4.1 Market Segmentation ............................................................................................... 13 4.2 Target Marketing ..................................................................................................... 13 4.3 Market Positioning .................................................................................................. 13 4.4 Distribution Channel................................................................................................ 14 Market Opportunities and Issues ..................................................................................... 15 Current Market Situation ................................................................................................. 16 6.1 Customers ............................................................................................................... 16 6.2 Competitors ............................................................................................................. 16

SWOT Analysis ................................................................................................................. 17 7.1 SWOT analysis of Dutch Bangla Bank Limited ....................................................... 17 7.1.1 Strengths ......................................................................................................... 17 7.1.2 Weaknesses .................................................................................................... 17 7.1.3 Opportunities .................................................................................................. 18 7.1.4 Threats ............................................................................................................ 18 7.2 SWOT analysis of Mobile Banking ......................................................................... 18 7.2.1 Strengths ......................................................................................................... 19 7.2.2 Weaknesses .................................................................................................... 19 7.2.3 Opportunities .................................................................................................. 20 7.2.4 Threats ............................................................................................................ 20 Marketing Research .......................................................................................................... 21 Feedback............................................................................................................................ 21 Program Formulation and Implementation..................................................................... 21 Control ............................................................................................................................... 22 Human Resources Management ....................................................................................... 22 Financial Projection .......................................................................................................... 23 12.1 Sales Forecast ........................................................................................................ 23 12.2 Expense Forecast ................................................................................................... 23 12.3 Profit Forecast ....................................................................................................... 24 Action Program ................................................................................................................ 25 Conclusions and Recommendations ................................................................................. 26 References.......................................................................................................................... 28

Executive Summary
Banking sector of Bangladesh is one of the major sectors, which contributes significantly to the national economy. The sector comprises a number of banks in various categories where the commercial banking system dominates Bangladesh's financial sector. The banking industry faces some exceptional challenges when it comes to marketing. The public tends to view banks and other financial institutions with suspicion, or they take them for granted. In either case the ability to positively impact the public's perceptions of banks requires creative and forthright marketing. Dutch-Bangla Bank Limited is one of the leading commercial banks in Bangladesh and a successful trendsetter in creative marketing in the banking sector of the country. It is Bangladesh's most innovative and technologically advanced bank. DBBL is most widely recognized for its donations to social causes and its IT investment (largest ATM network). DBBL has been established for serving all types of people, it follows Mass Marketing strategy, because this strategy indicates service for all level of people from the higher chain to lower chain. DBBL makes position in customers mind by offering different types of accounts, saving schemes and loan program. The bank has a strong network of service consisting of 104 branches and over 4000 employees over the country. Dutch-Bangla Bank is the first bank in Bangladesh to be fully automated and introduce Electronic Banking. It is also the first bank to introduce mobile banking in the country. In 2010, Dutch Bangla Bank Ltd. introduced "Fast Track" in the country. Fast Track is first of its kind in the country that is like a mini branch. Along with the generic ATM withdrawal service, it lets the customer deposit small amounts of money to DBBL account. DBBL has won the mind of the customers as well as people of Bangladesh by contributing for the society. The organization has been granted numerous national and international awards for its role in the development of Bangladesh. Though DBBL still has some weaknesses and threats as well as strengths and opportunities it has already proved that it is one of the strong market leaders in banking sector of our country and is expected to continue its journey of success and contribute in the economic and social development of our country.

Introduction
A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. It serves as a connection between customers that have capital deficits and customers with capital surpluses. In doing this they offer the major benefits of maturity and risk transformation. As a financial intermediary, a bank plays a crucial role in the operation of any economy. The economic development of a country depends, largely, on the efficient functioning of its banking system as it helps mobilizing resources and allocating funds.

Banking sector of Bangladesh is one of the major sectors, which contributes significantly to the national economy. The sector comprises a number of banks in various categories. Considering ownership the sector can be classified in to four major categories - such as Nationalized Commercial Banks (NCBs), Specialized Banks (SPBs), Private Commercial Banks (PCBs), and Trans-National Banks (TNBs).

The commercial banking system dominates Bangladesh's financial sector. Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The banking system is composed of 4 nationalized commercial banks, 9 specialized banks, 38 private commercial Banks and 10 trans-national banks.

We all know well that now the era has changed and people want innovation in everything thus most banks are using the marketing approach for providing better services to their clients. The banking industry faces some exceptional challenges when it comes to marketing. The public tends to view banks and other financial institutions with suspicion, or they take them for granted. In either case the ability to positively impact the public's perceptions of banks requires creative and forthright marketing.

This study will focus on the services provided and marketing strategies followed by the Dutch-Bangla Bank Limited as one of the leading commercial banks in Bangladesh and a successful trendsetter in creative marketing in the banking sector of the country.

The Bank
Dutch-Bangla Bank Limited is a scheduled joint venture commercial bank between local Bangladeshi parties spearheaded by M Sahabuddin Ahmed (Founder & Chairman) and the Dutch company FMO. The bank is often colloquially referred to as "DBBL", "Dutch Bangla" and "Dutch Bangla Bank". DBBL was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. DBBL commenced formal operation from June 3, 1996. The Bank is listed with the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.

Dutch-Bangla Bank Limited (DBBL) is Bangladesh's most innovative and technologically advanced bank. DBBL is most widely recognized for its donations to social causes and its IT investment (largest ATM network). DBBL stands to give the most innovative and affordable banking products to Bangladesh.

2.1 Company Profile At present DBBL is considered as a leading commercial bank among all commercial banks in Bangladesh. A brief company profile of DBBL is given below: Name Category Corporate Slogan Business type Established Founder Chairman Current capital Dutch Bangla Bank Limited Private Limited Bank Your Trusted Partner Joint Venture Company April 1995 M. Shahabuddin Ahmed and Dutch Company FinancieringsMaatschappij voor Ontwikkelingslanden (FMO) Assets: 123267 million Tk. Liabilities: 114327.4 million Tk. Total investment: 79660.7 million Tk. Capital: 10534.8 million Tk. Capital adequacy ratio: 11.23%. 124 10 2216 205 4015

Branches SME location ATM Booth Fast Track locations Employees

2.2 Objectives DBBL has the following organizational objectives: To achieve positive Economic Value Added (EVA) each year. To be market leader in product innovation. To be one of the top three financial institutions in Bangladesh in terms of cost efficiency. To be one of the top five Financial Institutions in Bangladesh in terms of market share in all significant market segments we serve.

2.3 Mission Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social responsibility. "Profits alone" do not hold a central focus in the Bank's operation; because "man does not live by bread and butter alone".

2.4 Vision Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. DBBL's essence and ethos rest on a cosmos of creativity and the marvel-magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development.

2.5 Core Values Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue from its pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its vaunted marquees "Your Trusted Partner".

2.6 Functions Dutch-Bangla Bank is one of the well known second generation private bank in Bangladesh. It has much better reputation, position in, and contribution to the economic sector of Bangladesh only for its better quality services and efficient team of performers. But it has not

reached here over night. It has some distinction features so that it is now very close of the peak of success. Those distinctive features are as stated: The Dutch-Bangla bank provides service with high degree of experienced & expert & use of modern technology. The bank has the biggest IT investment as a bank in the country. The institution creates long term relationship based on mutual trust. It responses to customer needs with speed & accuracy. It shares its values & beliefs with the clients. It provides products & services at competitive pricing. It ensures safely & security of customers valuables in trust with us. It introduces diversified & dynamic banking system. It targets every income level person for its banking service. The financial institution ensures higher level of transparency and accountability at all level of doing business for having efficient and effective business operation. It is the pioneer in maintaining Corporate Social Responsibility (CSR) as a banking financial institution all over the country. It holds the biggest ATM (Automated Teller Machine) network.

2.7 Corporate Strategy Financing establishment of small units of industries and business and facilitate their growth Small Balance Sheet size composed of quality assets. Steady and sustainable growth. Investment in a cautious way. Adoption of new banking technology.

2.8 Organizational Goals To employ funds for profitable purposes in various fields with special emphasis on small scale industries. To undertake project promotion on identify profitable areas of investment. To search for newer avenues for investment and develop new products to suit such needs.

To establish linkage with other institutions which are engaged in financing microenterprises.

To cooperate and collaborate with institutions entrusted with the responsibility of promoting

2.9 Operations As one of the leader of banking financial institutions of the country, the Dutch-Bangla Bank Limited has a wide variety of operations. It earns a lot of profit from those operations. The important thing is that the operations are little unique from the competitors. The different operations are stated shortly as follows:

2.9.1 Deposit Collection As a leading commercial bank of the country, Dutch-Bangla Bank Limited collects huge amount of idle money from the country people as deposit in against of paying interest depending upon the account features. It pays different percentage of interest for different maturity of fixed deposits. It disburses flat 4% interest for savings account. As usual, it does not pay any interest for the current account.

2.9.2 Life Line Disbursement The bank has a wide variety of life line. The collected idle money is distributed among the applicants after judging their possibility. Life line can be for commercial, personal, business, home, car, health, children, education, marriage etc. It takes interest based on the maturity period of the life line. It earns almost 85% of its income from this operation.

2.9.3 Foreign Trade Foreign trade is another source of income for the bank. It is involved in both export and import business. It earns little from this sector but it contributes a lot to thenational economy. Here, L/C (Letter of Credit) is the main source of income.

2.9.4 Foreign Currency Endorsement Foreign currency endorsement is another source of income for the bank. It supplies money of the different recognized foreign currency like US Dollar, British Pound, Japanese Yen, Saudi Real etc to the immigrants after having their passports and visa.

2.9.5 Investment Investment is an important operation of the bank. It can be of long and short term. It contributes significantly in the profit earning of the bank that goes to the stockholders ultimately. This investment improves the infrastructural, national development.

2.9.6 Social Responsibility Social Responsibility is a very important operation for DBBL. This has been one of the biggest priorities for the bank since its inception. As a result the organization has been granted numerous national and international awards for its role in the development of Bangladesh. Though it is not a major operation from the view of profit earning but it has generated a very strong image of the bank among the national and international community also. The bank often arranges different types of social campaign like eye replacement, blood donation and free medical checkup, various natural calamities, social awareness against of dowry system, early marriage and other social problems.

Dutch-Bangla Bank is one of the largest private donors in Bangladesh with total donations exceeding Tk. 1.3 billion. In 2007, DBBL donated Tk. 220 million towards social causes. In 2008, DBBL announced a donation of Tk. 100 million to fund the construction of an 11 storey research center, titled "Dutch-Bangla Bank Research Centre for Advanced Research in Arts and Social Sciences" at the Dhaka University campus in Dhaka, Bangladesh. It was Dhaka University's largest ever donation from a private company. The research center, which would be the first of its kind in Bangladesh, will be supervised by renowned teachers, scholars and researchers. It will also award scholarship to researchers and scholars at home and abroad. In February 2011, it was announced that local sponsoring shareholders will not be receiving dividends to "achieve greater things". In May 2011, DBBL announced the largest scholarship program in Bangladesh where DBBL would have to donate Tk. 102 crore every year. The structure of this scholarship had greatly benefited students who had the academic performance, but required the financial aid.

2.10 Overall Standings The Dutch-Bangla Bank Limited began its journey with Tk. 200 million as authorized capital. But its expansion of business has led it towards this position. Now it has Tk. 4000 million as authorized capital, Tk. 2000 million as paid up capital and a total capital of Tk. 10534.86 million and a capital surplus of Tk. 1151 million which is remarkable for the banking 6

industry. In 2011, it had a net profit of Tk. 2154.88 million after tax where the total operating income was 9090.48. It had a statutory reserve of Tk. 3657.69 million. It earned total revenue of Tk. 14144.63 million and had total expenses Tk. 9334.75 million. It possessed a total asset of Tk. 123267 million of which earning asset is Tk. 101055.73 million which was outstanding. (As per the financial statements ended Dec 31, 2011)

At first the bank had begin its operation with only 3 branches and a very few officials. Those branches are Motijheel Local Office, Agrabad branch and Banani branch. But now it has a strong network of service consisting of 104 branches and around 4000 officials over the country.

Marketing Mix
The elements of marketing mix are given below:

Service Marketing Mix Promotion


Figure 3.1: Marketing Mix 3.1 Service

Price

Place

DBBL is a financial service providing organization. Its main purpose is to earn profit through providing banking services. DBBL provides different services. The services of DBBL are given below:

3.1.1 Deposit Services DBBL offers to its customers short term & long term deposits. Those services are: Savings Deposit Account Current Deposit Account Short Term Deposit Account Resident Foreign Currency Deposit Foreign Currency Deposit.

3.1.2 Term Deposit Monthly term deposit Term deposit 3 months Term deposit 6 months Term deposit 12 months Term deposit 24 months Term deposit 24 months 1 year payout Term deposit 36 months 6 months payout Term deposit 36 months 1 year payout Term deposit above 36 months 8

3.1.3 Loan & Advances DBBL also facilitates different types of loans and advances. The loans and advances of DBBL are: Transport Loan Real Estate Loan (Res. & Comm.) Industrial Term Loan Agricultural Term Loan Other Term Loan FMO Local currency Loan for SME FMO Foreign currency Loan Cash Credit (Hypothecation) Small Shop Financing Scheme

3.1.4 ATM Booths and Cards Dutch-Bangla Bank is the first bank in Bangladesh to be fully automated and introduce Electronic Banking. The automation was completed in 2003, but further additions and features are continuously being added and upgraded. DBBL has the largest IT budget in Bangladesh. DBBL maintains the state-of-the-art Electronic-Banking Division. The Electronic-Banking Division oversees and maintains DBBL's investment as well as implementing upcoming projects.

DBBL also has the largest ATM network in Bangladesh. This gives DBBL clients full access to 'anytime anywhere' banking nationwide. All international and many local banks use the DBBL ATM network for their own clients. At present, DBBL has 2216 ATM Booths and 6 types of Cards. The ATM service of DBBL has accelerated the quality of service of DBBL. However it has recently stated that it will stop expansion on its ATM network as the current numbers have exceeded demand and hence diminishing returns (if any). Although it is widely believed it is a loss-making/subsidized unit which DBBL rationalizes as quasi CSR.

DBBL maintains its own network and automation without the involvement/assistance of any third party companies. Access to ATM services fee is Tk. 230 annually for DBBL clients. In 2008, Dutch-Bangla Bank started offering full banking automation services to other banks where without any investment or technical knowledge, member banks can automate themselves in matter of months using DBBL's infrastructure (this includes required hardware, 9

card issuance, ATM usage & switching software). Partner banks are charged a subsidized Tk. 10, although the end price for the customer may be higher due to the extra charges levied by the partner bank.

DBBL is a primary license holder for both VISA and Mastercard. It is authorized to issue and accept payments from both organizations. The cards of DBBL are: DBBL-NEXUS Classic Card (debit) DBBL-NEXUS Maestro card (debit) DBBL-NEXUS VISA Electron card (debit) DBBL-NEXUS Silver OD card (credit) DBBL-NEXUS Gold OD card (credit)

By default, when opening a DBBL account, all clients will receive the DBBL Nexus Classic card. DBBL debit cards come with the client's photo printed on it and requires a secret PIN verification by the client. A credit card only requires a signature (which can be forged) and no PIN verification for a transaction. That is why, for day-to-day banking, DBBL recommends debit cards. Each card comes with a PIN number which must be protected at all times by the client. The PIN number is used as a password for withdrawing cash at DBBL ATMs and accessing DBBL banking services. In addition to normal debit card features, DBBL Nexus Gold and DBBL Nexus Silver debit cards come with automatic overdraft facilities (credit). This allows the cards to have a credit amount. Clients can access the credit amount instead of choosing to access the money in their account. This allows the debit card to perform in the same manner as a credit card. A small loan is issued when clients exercise this feature.

3.1.5 Internet Banking On 3 June 2010, Dutch Bangla Bank Ltd. announced to allow internet payments system. Using their Internet Payment Gateway merchants will be able to charge their customers' Visa, Masters, DBBL Nexus and Maestro cards. Any Visa/MasterCard cardholder (local or overseas) can use their cards to pay at a number of e-Merchants against their purchase of goods. They can also pay DESCO electricity bills. DBBL is working with airlines, railways, utility companies, educational institutions, and stock exchanges for facilitating purchase of tickets, payment of bills/fees and IPO subscription through the Internet Payment Gateway.

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3.1.6 Mobile banking 2011 was a historic year for the banking sector of Bangladesh as DBBL inaugurated Bangladesh's first mobile banking service, expanding the banking service from cities to remote areas. It is a Banking process without bank branch which provides financial services to unbanked communities efficiently and at affordable cost. Mobile Banking provides banking and financial services, such as cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement, ATM money withdrawal through mobile technology devices, i.e. Mobile Phone. The slogan for this service is Mobile Banking in your hand.

3.1.7 Fast Track In 2010, Dutch Bangla Bank Ltd. introduced "Fast Track" in the country. Fast Track is first of its kind in the country that is like a mini branch. Along with the generic ATM withdrawal service, it lets the customer deposit small amounts of money to DBBL account. Currently a customer can deposit a maximum of Tk. 1 lac per day with a maximum of Tk. 50,000/- per transaction through this service. Moreover, the Fast Track also provides account opening service and loan information. Presently the number of Fast Tracks is 205.

3.1.8 SMS and Alert Banking Since 2004, DBBL has facilitated different alerts regarding account maintenance of the customers through SMS. This service is called SMS and Alert banking service.

3.2 Price Price is the consequence of any product or service. All the organizations provide products or services for money. DBBL charges different amounts for different services. It charges for accounts, money transfer, debit and credit cards etc. The charges (including tax) for accounts are given below: Current Account: Maximum Tk. 575 semiannually Savings account: Maximum Tk. 345 semiannually Fixed Account: Nil

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Table 3.1 presents the charges of debit/credit card at Dutch Bangla Bank Limited.

Table 3.1: Charges and Fees for Debit/Credit Card at DBBL Debit Card Type of services Issuance fee (1st year only) Annual Fee (2nd year onward) Replacement Fee PIN Change Fee Classic Free 400 400 200 Maestro 500 500 500 200 Visa Electron 500 500 500 200 Credit Card Silver 1000 1000 500 200 Gold 1500 2000 700 200

3.3 Place Dutch-Bangla Bank operates the largest ATM network. DBBL has over 2216 ATMs installed all over Bangladesh. It has 124 branches in major cities and 10 SME locations for SME service. It also has 205 Fast Track points. DBBL clients have unlimited and free access to all DBBL ATMs nationwide. Clients of member banks (not DBBL), may be charged a transaction fee as determined by the member bank.

3.4 Promotion Promotion is an important marketing tool of any organization. Every organization spends lots of money for its promotion. Promotion helps an organization to reach to the pick of success. Marketing promotion tools are used by DBBL are commercials, poster advertisement, direct consultation etc. The marketing tools of DBBL are: TV commercials Leaflet News paper advertisements Direct consultation Promotion through donation program, scholarship, social awareness etc.

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Marketing Strategies
Marketing strategy refers the marketing logic by which the business unit hopes to achieve its marketing objectives. According to our selective organization, DBBL follows some strategy for the betterment of their bank. Those strategies are discussing below:

4.1 Market Segmentation Market segmentation means dividing market into different distinct group of buyers, needs, characteristics or behavior. There are four types of segments. They are: Geographic Segmentation Demographic Segmentation Psychographic Segmentation Behavioral Segmentation

In market segmentation, DBBL mainly follows geographic & psychographic segmentation. In geographic segmentation, DBBL has segmented its market area in cities, towns, & Thana level. They established 124 branches and 2216 ATM booths in cities, towns, and Thana levels across Bangladesh. Psychographic segmentation is done based on the psychology of people. DBBL has different types of accounts, ATM Cards and other services for people of different psychologies.

4.2 Target Marketing Target marketing is a set of buyers sharing common needs or characteristics that the company decides to serve. A company can target Mass Marketing, Segmented Marketing, Niche Marketing and Micro Marketing. As DBBL is a private bank and has been established for serving all types of people, it follows Mass Marketing strategy, because this strategy indicates service for all level of people from the higher chain to lower chain.

4.3 Market Positioning Positioning can help the company in building competitive advantage. DBBL has established itself as a different bank from others by providing the latest banking services to its customers through largest ATM network in the country. DBBL also makes position in customers mind by offering different types of accounts, saving schemes and loan program. People of different

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types and needs can take loan from DBBL. DBBL has won the mind of the customers as well as people of Bangladesh by contributing for the society. It donates in many educational institutions and research centers. It helps the flood affected people, DBBL also gives scholarship to poor and brilliant students. All the business activities of DBBL are done in full conformity with social, ethical and environmental standards. By performing these social customer responsibilities (SCR), DBBL has created a strong position is customers mind.

4.4 Distribution Channel Distribution channel is a channel through which a business organization provides its service to its potential customers. DBBL has a strong distribution channel to the customers. There are two distribution channels: 1) Direct distribution channel. 2) Indirect distribution channel.

DBBL follows both of the distribution channels. Proving services in bank interacting with customer, it follows direct distribution channel. It follows direct distribution channel by providing services in its 124 branches. DBBL has a large number of ATM booths. DBBL also introduced internet banking system by providing banking services through ATM booth and internet banking. DBBL also follows indirect distribution channel. DBBL follows both of the channels in order to provide service more effective and efficient way.

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Market Opportunities and Issues


A company requires three things to be successful in its target market. These are: 1. Ensuring quality of services. 2. Maintaining quality between demand and supply. 3. Setting reasonable prices.

A company must follow the above mentioned three things to capture the market strongly. As DBBL is technologically advanced and pioneer bank in Bangladesh, it should pay more attention on these three things to fulfill its strategic marketing plan for the year 2010.

1. Ensuring quality of services: ensuring quality of services can lead a company to reach in the highest position. For this reason, DBBL tries its best to retain and improve services quality. As DBBL wants to increase its revenue at 10% maintaining quality of services is a must. For achieving this, the market research department works in improving quality and retains interest of customers. 2. Maintaining quality between demand and supply: we know that demand is unlimited and means of satisfying demand is limited. So every business organization has to maintain the equality of demand and supply. In order to fulfill the customers need. DBBL should set up more branches where banking demand is very high like Dhaka and other divisional cities. 3. Setting reasonable prices: As Bangladesh is a developing country all of the customers have not the capacity to buy higher priced products. Keeping this economic condition in mind DBBL need to set price relatively low than the other banks. It should reduce the service charges of ATM card, account charges, interest charges for loans etc. to attract the customers and these facilities will increase the number of customers as well as profit.

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Current Market Situation


Current market situation refers a companys position in the market. In present market, DBBL has been able to gain much popularity for providing better services. It has actually emphasis on its customers and competitors for the development of the current position in the market. The current market situation of DBBL is described below:

6.1 Customers DBBL has different types of accounts and services. Peoples of different sectors in our society are the customers of DBBL. They have different accounts in DBBL. At present DBBL have almost 5 million customers.

6.2 Competitors Competitor is an important factor in the business world. Without competitor a company cannot justify its performance. So, competitors play an important6 role for the development of any company. DBBL has to face its competitors. Competitors of DBBL are mainly public and private banks and financial institutions. Some of the names have been mentioned below:

BRAC Bank Limited Eastern Bank Limited IFIC Bank Limited Trust Bank Limited National Bank Limited The City Bank Limited Southeast Bank limited Mercantile Bank Limited One bank Limited United Commercial Bank Limited IDLC finance Limited Lanka-Bangla Finance Limited

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SWOT Analysis
Every organization is interested to know its strength and weakness. Therefore most of the companies follow a research based process known as the SWOT analysis. Here the letter S stands for Strengths, W stands for Weaknesses, O stands for Opportunities and T stands for Threats. So, the purpose of this analysis is to determine the strengths, weaknesses, opportunities and threats of an organization or a product or a service. Strength and weakness are internal factors whereas opportunities and threat are external factors. The management should develop the strategic marketing plan of an organization or product/service based on its SWOT analysis.

7.1 SWOT analysis of Dutch Bangla Bank Limited Like other organizations DBBL also has strength, weakness, opportunities and threats. The SWOT analysis report for DBBL is given below:

7.1.1 Strengths Being a modern and advanced bank DBBL has much strength. Some of those strengths are pointed below: The bank has very advanced technology to deal with customers. DBBL is a highly popular bank In Bangladesh. Basically it is very popular to people in money transferring. The bank has very strong market growth. The bank has already captured more market share. DBBL has strong distribution channels. DBBL has qualified, skilled and devoted employees.

7.1.2 Weaknesses The second research factor of SWOT is weaknesses. DBBL has some weaknesses those may be fear to it. Weaknesses of DBBL are described below: DBBL sometimes fails to maintain network available for ATM booths. It has no right to change interest rates. Interest rate is fixed by Bangladesh bank. Several times ATM booths of DBBL become inactive. The DBBL is unable to minimize the charge of the account and ATM card.

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7.1.3 Opportunities DBBL has many opportunities to capture market. These are described below: DBBL always tries its best to expand its branch offices and ATM booths. The bank has a wide range of project to expand its business. DBBL may come into a position of AAA in stock exchange market rating. In a long run DBBL may be turned into an international bank. DBBL can increase the LC accounts of the exporters. Earn more revenue by providing exclusive banking opportunities. DBBL can become a pioneer in banking sectors in Bangladesh.

7.1.4 Threats The last one of SWOT is threats. Threat means the occurrence which is probable that may be occurred or not. But if these will be occurred it will be hazardous for the organizations. DBBLs threats are described below: Fall in share market may be a threat of DBBL. Sometimes some particular rules and regulations of Bangladesh Bank (Central Bank of Bangladesh) may be a threat for DBBL. Probability of decreasing value of dollar is also threats of DBBL. It may be fallen in a loss from different productive investment sectors. Exclusive features of competitor banks may reduce the popularity of DBBL.

7.2 SWOT analysis of Mobile Banking Mobile banking is the latest addition to the services provided by DBBL and it is the first of its kind in Bangladesh. It has a great prospect as a unique and useful service and is already gained the attraction of the customers specially in the rural areas. Users are slowly getting used to the concept of mobile in hand held device as digital cash or wallet to carry out purchase. It is necessary for DBBL management to know the strength, weakness, opportunities and threats of mobile banking in order to maintain its attraction and provide satisfactory and innovative service to its clients. The SWOT analysis report for mobile banking is given below:

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7.2.1 Strengths Potential customer in rural and urban area where branch banking is not possible. Partner is available. New investment like Mobile Banking where no bank in Bangladesh is not start such kind of business. Low cost for opening Mobile Bank Account. Possible to give hand to the remote area customer of their remittance earn from abroad. Mobile bill pay or recherch through Mobile Banking is possible. Out let is available. Transaction process is easy. Save money in rural area. Salary/Allowance Disbursement. Strong network of Telecom Company. Efficient Employee of DBBL as well as Telecom Partner. Cost effective.

7.2.2 Weaknesses Outlet is not available as per requirement. Mobile ATM booth is not available. Amount of transaction is very little. Advertisement is not adequate that most of the people dont know about Mobile Banking. Employees are not efficient that M-Banking is new in Bangladesh. Insecure out let that rubbery the money in remote area where security is not available. New concept in Bangladesh is the beast weakness. Cash in and out cost is more than interest rate. Lack of Knowledge of operating Mobile transaction within customer.

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7.2.3 Opportunities Lot of potential customer in Bangladesh that around 7 corer people use Mobile phone. It may become possible that the shopkeeper receive their payment through Mobile transaction. Salary and allowance may distribute through Mobile Banking. Government and other International agencies positive attitude toward low classification rate. Opportunity to expand banking business. Large market for bank. Gain more profit through Mobile Banking. To reach the modern banking facilities to the rural area where banking facilities does not reach till now.

7.2.4 Threats Potential competitors such as Bkash. Customer may not properly use the process of M-Banking. Security risks from robbery & holdup. Cost of cash in and out is high compare to interest rate on bank deposit.

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Marketing Research
Marketing research is a systematic design, collection, analysis and reporting data relevant to a specific marketing situation facing an organization. DBBL has a market research department to increase the standard of its services. ATM network service is the outcome of this research department. This research department always works for generating new ideas. DBBL emphasizes on this department much more because it thinks the generated idea will be helpful in order to implement its marketing plan.

Feedback
Feedback is the process of getting customer response from service provided. DBBL provides different types of services to its customers. At the same time, it gets different types of feedbacks from its customers. Generally DBBL gets feedbacks from customers, financial institutions, stock exchanges, competitors and Bangladesh Bank (The central bank of Bangladesh). DBBL considers these feedbacks, recommendations & send these recommendations to program formulation and implementation department of DBBL. DBBL does all these activities to implement its strategic marketing plan.

Program Formulation and Implementation


The program formulation and implementation department of DBBL works with response getting from feedback department & programs taken for implementing marketing plan. The elements for implementation of the programs taken by DBBL are: Strategy, structure and method are considered as hardware by DBBL. Style, ability, staff and value are considered as software by DBBL. Relationship among different types of shareholder and their needs. Calculating all exhibition cost, competition cost and advertising cost. Empowerment of research and development division. Technologically skilled manpower. Ensuring better training for sales representative. Department of advertisement sectors.

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Control
Control is the process of measuring & evaluating the result of marketing strategies, plans and taking corrective actions to ensure that objectives are achieved. Many surprises occur in the implementation of marketing plans. The marketing department must practice constant marketing control. The department also follows the steps of marketing control. There are four steps of marketing control followed by DBBL: 1) Setting marketing goals. 2) Measuring performance. 3) Evaluating differences between expected & actual performance. 4) Taking corrective action.

Human Resources Management


DBBL pays more attention to its HRM department to implement the proposed revenue as a part of its marketing plan. At present the total number of stuff of DBBL are 4015. DBBL always encourages excellence in performance by reward & recognition. The banks strategy is to attract, retain and motivate the most talented people. The banks HRM policies are based on trust and relationship. The banks policy is to look after people who want to make a longterm career with bank. Moreover a number of well thought out policies are in place for welfare of employees in the form of DBBL superannuation fund, gratuity fund, house building loan scheme and car loan scheme.

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Financial Projection
To operating any business organization, consideration of expense, earning, purchase, sales, profit etc. is most important. Financial Projections include three types of elements. These are: 1) Sales forecast 2) Expense forecast 3) Profit forecast

12.1 Sales Forecast For almost every kind of business sales is the most vital thing for earning profit. Every business organization or service holder tries their best to increase their sales volume. DBBL has no product for physical sales. But it tries to cover banking facilities all over the country & encourage the customers for using more DBBL services. DBBL had a total operating income of Tk. 7159.08 million in 2010, Tk. 9090.48 million in 2011 & its expected total operating income in 2012 is Tk. 10828.50 million from its sales forecast. Table 12.1 shows the revenue chart for the year of 2010, 2011 & 2012 (proposed). Table 12.1: Revenue chart for the year 2010, 2011 and 2012 (proposed) Revenue Interest Income Interest Paid on Deposit Net Interest Income Investment income Commission Exchange Other operating Income Total Operating Income = 2012 (Proposed) Tk. (millions) 13621.02 (6778.17) 6842.85 1191.10 1228.84 1565.71 10828.50 2011 Tk.(millions) 9984.15 (5024.15) 4960.00 1169.32 1682.57 1278.59 9090.48 2010 Tk. (millions) 7175.23 (3448.38) 3726.85 1278.80 1142.54 1010.89 7159.08

12.2 Expense Forecast To run a business organization expense is must. Expenses cant be avoided in operation of business but everybody try to minimize the additional expenses for earning more profit. For establishing business, providing salary for employees, advertising services, motivating workers, establishing cost of branches etc. expenses occur. DBBL has to face such types of expenses. The operating expense of DBBL for 2010 was Tk. 2960.62 million & 2011 was Tk. 23

4310.60 million. It assumes that its operating cost will be Tk. 5644.90 million in the year of 2012. The marketing plan of DBBL for the year of 2012 is emphasis to reduce the additional cost. Table 12.2 shows the expense chart for the year of 2010, 2011 & 2012 (proposed). Table 12.2: Expense chart for the year of 2010, 2011 & 2012 (proposed) Expenses Salary & Allowance Rent, Tax, Insurance, Electric Bill Legal Expense Postage, Stamp, telecommunication Advertisement, Stationary MD Salary Directors Fee Auditors Fee Depreciation and Repair Other Expenses & Losses Total Operating Expenses 2012 (Proposed) Tk. (millions) 2674.59 735.60 1.60 184.47 236.59 9.37 0.16 0.69 1082.49 719.35 2011 Tk. (millions) 2081.55 568.73 2.50 115.60 184.27 10.48 0.10 0.57 771.91 574.89 2010 Tk. (millions) 1476.79 374.22 1.54 92.28 124.5 12.3 0.08 0.45 483.41 395.02

5644.90

4310.60

2960.62

12.3 Profit Forecast Earning profit is the main target of any business. It acts as a motivating factor for operating the business. Table 12.3 shows the profit chart for the year of 2012 (proposed). Table 12.3: Profit chart for the year 2012 (proposed) Description Revenue (Expense) Tk. (millions) 10828.50 (5644.90) 5183.60 (Fixed Cost) Profit Before Provision (Provision) Profit Before Tax (Tax) Net Profit (1000) 5083.60 (931.46) 4152.14 (2080.35) 2071.79 Tk. (millions)

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Action Program
Action program is how marketing strategy will be applied. To fulfill action program marketers should answer the following question: What will be done? When will it be done? Who will do it? How much will it cost?

The marketing executive team of DBBL wants to implement the strategic marketing plan of 2010. They have bought out answers of above question and the answers are given below:To apply this strategic marketing plan. It will be done throughout year. It will be done by CEO to executives of DBBL. It will cost approximately 5664.90 million taka.

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Conclusions and Recommendations


Large network of DBBLs ATMs serve as visible billboards which gives the bank a great level of exposure in comparison to its competitors in the market of the country. It is also a very good strategic move by DBBL to make other banks partners in the ATM service and let their customers to access the booths. This has certainly caused a significant amount of profit for DBBL.

Introduction of mobile banking has been another great strategic initiative by DBBL. Being the first bank to provide such service has obviously developed an image of more technologically advanced organization in comparison to others in the same category. DBBL must emphasis on this service in the upcoming years just as they gave to their ATM network.

The bank has recently revised many of its policies and introduced new services to attract students and rural people which is a praiseworthy initiative. It must continue it to stand out from other banks in Bangladesh. Regarding Fast Track points, DBBL should also initiate accepting cheques as well as cash. It may also up the amount limit per day or per transactions.

DBBL has already won several awards for exhibiting high level of corporate social responsibilities and it is expected that it will continue the good works for many more years to come. Such social activities inspire the customers to deposit their money in to the bank as they expect them to use it for useful causes.

It has been found from several customer interviews that behaviors of some of the employees in DBBL are not professional. The bank should take proper actions regarding the matter in order to maintain customer satisfaction and not let degrade its image for a small portion of the employees.

The management of Dutch Bangla Bank Limited should also take care of the regular maintenance of their ATM network. The ATM server often goes down and a significant number of the machines have become out of order at a time for a long time causing sufferings to the customers. DBBL must take proper initiatives to repair and restart these machines or

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else their reputation for the ATM network would go down. Nevertheless, DBBL should concentrate on quality rather than only on quantity.

Without the contribution of a bank, our economy is lifeless. In this regard, it can be said, DBBL plays a vital role for the economic development of our country. It has successfully created a positive impact on banking consumers mind. DBBL already proved that it is one of the strong market leaders in banking sector of our country and it is expected to continue its journey of success and contribute in the economic and social development of our country.

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References
1. Dutch Bangla Bank Limited Annual Report 2011 2. Dutch Bangla Bank Limited Annual Report 2010 3. Dutch Bangla Bank Official Website (www.dutchbanglabank.com) 4. Role of Marketing in Banking (Retrieved from www.scribd.com) 5. Mobile Banking in your hand (Retrieved from www.scribd.com) 6. Philip Kotler, Kevin Lane Keller, Abraham Koshy and Mithileshwar Jha, Marketing Management: A South Asian Perspective, 13th Edition, Pearson Education, 2009. 7. Wikipedia (www.wikipedia.org)

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