failure of new products are:

• insufficient analysis of the market — 45%;

• product defects — 29%;

• disadvantages of effective marketing activities — 25%;

• excessively high costs — 19%;

• actions of competitors — 17%;

• lack of support when commodity enters the market — 14%;

• manufacturing problems — 12%;

• other causes—24%.

The purpose of volume (mass) of the Bank's policy is to influence prices via the supply market of
banking products. The result could be an artificial increase in demand and higher prices. However,
due to the fact that the effect of individual financial and credit Institute to offer the main product of
the financial markets — monetary assets is very limited (the main influence on the turnover of the
money supply by a Central Bank in conducting monetary policy).volume policy is for banks of such
a large value as the product.

Fig. 3.1. Content product strategy of the Bank

In General, the content product strategy of the Bank can be opened through a cyclic sequence of
two stages (Fig. 3.1).

In the first stage of formation of the product strategy of the Bank valued all the services provided
by the Bank at the moment, and the second dealt with the desirability of changing the structure of
the assortment, and also about the need to expand the product line.

Banking service as a product is invisible, intangible act or performance of work is not

accompanied by the possession of something tangible. Typically, such actions or activities occur at
the time of direct contact of the manufacturer banking services and the consumer. From these
reasons, according to experts, the quality of banking services is related to the interactive process
taking place between the Bank and the client.
 Therefore, banking service can be described as the Bank performs certain actions in the interests
of clients. However, in connection with a significant expansion of banking activities in recent times,
there are non-traditional types of banking products, not directly connected with the provision of
services (purchase-sale financial liabilities of the Bank traded in the stock market).

Among the factors that determine the perception of service quality, the main are these:

• competence (the organization has the necessary skills and knowledge sufficient to provide
services of high quality);

• reliability (the organisation is stable, the required level of activities is maintained at all times
and everywhere; the commitments are executed on time, Etc.);

• sensitivity to clients (employees are eager, always and everywhere to answer the queries of the
client);

• accessibility (both physical and psychological contact with employees of the organization
should be easy and pleasant for the customer);

• understanding (trying to understand the client's specific needs and to adapt to them);

• communication (organization informs customers about services in a language they understand,

adapted to the peculiarities of the target group);

• a trust (determined by the reputation of the organization," her honesty, guarantees a

responsible attitude to customers);

• security (clients must be protected from physical, financial, moral and other types of risk);

• politeness (respect, consideration and friendliness of staff);

• tangibility (tangible evidence of service — the facilities, staff, logos, etc.).

The basis of any banking product creates the need to meet the specific needs. Therefore, the
essential side of a Bank product is the so-called plan, that is, its focus on solving problems and the
satisfaction of specific needs.

In fact, the customer receives not the product itself, having a certain set of properties, and its
ability to satisfy a particular need. For example, the client is not just invested in the form of a
Deposit, and gets the opportunity to satisfy their needs in settlement services, services for collection,
electronic funds transfer, cash management and investments, from foreign exchange and the like.
For the Bank, great importance is the presentation and dissemination are not properties of their
product, and of real use and benefit to the client from its consumption.
 If the idea is the content of the banking product, in form it is precisely a certain set of properties
that allow to realize this idea, that is, to satisfy customer needs. So, Deposit by design is a service
aimed at ensuring the needs of the investor in getting returns on their funds at the same time, the
form of this service may be in the form of the certificate of Deposit.

Services provided by banks are divided into four types (table. 3.2): strategic, current, operational,
special.

In accordance with the current legislation of the licensed banks have the right to exercise the
following banking operations:

• accepting deposits (deposits) from legal entities and individuals;

• opening and maintaining current accounts of clients and correspondent banks, including
money transfer from these accounts using payment instruments and crediting funds to them;

• placement of attracted funds on its own behalf, on own conditions and on own risk.

The Bank, in addition to these operations, has the right to carry out such operations and
agreements:

• operations with currency values;

• issue its own securities;

• organization of purchase and sale of securities on behalf of clients;

• operations on the securities market on its behalf (including underwriting);

• granting guarantees and sureties and other obligations from third persons which envisage
their execution in cash;

• acquisition of rights to demand performance of obligations in monetary form for goods

delivered or services rendered, with the transfer of the payments acceptance (factoring) and the risk
of completion of such requirements;

• leasing;

• services for safekeeping and renting safes to storing valuables and documents;
 • issue, purchase, sale and maintenance of checks, bills of exchange and other negotiable
payment instruments;

• issue Bank payment cards and transactions using these cards;

• provision of consulting and information services concerning banking operations.

Table 3.2.

Main types of Bank services and banks providing

Types of banking
Provided by the Central Bank A commercial Bank
services
Strategic Monetary policy and issue;
Enable the ensuring the resources for Investment loans,
CUSTOMER) the financing research and investment loans, plastic
Bank to develop and development of strategically cards, syndicated loans,
achieve significant important industries; the mergers and acquisitions of
strategic change in maintenance of purchasing banks, mortgages,
the character, power and exchange rate of the transaction, savings accounts;
directions and scale national currency, the granting formation of
of activities, or and revoking banking licenses; industrial-financial groups
lifestyle declaring bankruptcy

Current Banking supervision; the Consumer credit;

Allow the Bank monitoring of compliance with unsecured credit;
customer to standards; consideration of transactions on the money
optimally achieve the bills; communicating to the market; savings account;
goals set in the government; money circulation; budget accounts; cheque
annual plan foreign exchange reserves clearing

Operational
Allow the Bank Loans to banking institutions;
Deposit, Deposit of
customer to prepare maintaining currency; actions to
valuables; secured loans; life
for and quickly ensure supervision;
insurance; credit insurance;
respond to negotiations with the IMF on
factoring; leasing
unplanned problems granting loans

Special Guarantee customer savings;

Refinance; second
Allow the client guarantees on Bank notes; Bank
mortgage; insurance cover;
support; the selection of
to sale of services
managers
professional

help

in emergency

crisis situations

The first three operations are the only banking, to realize that in the aggregate are allowed only
to legal entities With a banking license. Non-banking organizations have the right to carry out
operations on the basis of the license for certain banking transactions and other specified
transactions and transactions they can carry out in the manner specified by laws of Ukraine.

Subject to the written permit of the National Bank of Ukraine banks also have the right to:

• to make investments in the authorized funds and shares of other legal entities;

• put into circulation, to pay (distribute) the state and other monetary lotteries;

• to transport currency values and implement the collection of cash;

• conduct transactions on behalf of clients or on its behalf:

• with money market instruments;

• with instruments based on exchange rates and interest;

• with financial futures and options;

• trust management of funds and securities under contracts with legal and physical persons;

• Depositary activity and activity on keeping the registers of registered securities owners.

To basic banking services consist of attracting deposits and further loans. From the difference in
interest on these banks and receive the largest share of gross profit. However, even within these
two services could be developed lots of different forms of banking products. A variety of banking
products is constantly increasing due to the fact that the provision of similar services by individual
banks differently.

The rapid growth of the range of banking services require Bank employees knowledge of all
modifications of the products — both those that are provided by a particular Bank, and
implemented in the wide world practice of banking.
 By analysis the product line of the Bank, employees of the marketing Department begin to
develop a strategy for its development. The first task on this path is to optimize the structure of
services provided by the Bank, from the point of view of their belonging to different stages of the
life cycle of a banking product. Another important task in the framework of the development
strategy of the product line is the development of new products in development undergo a series of
sequential steps:

1) removing product on the market;

2) development;

3) maturity;

4) decline.

The beginning of the stage to bring the product to market is the time towhen the Bank was first
proposed by his target audience. The main feature of this stage is a slow growth in product sales
and, as a consequence, little or no profit. The first stage of the life cycle is associated with significant
costs and significant marketing efforts to create widespread awareness of the product. Inevitable at
this stage is the high level of prices for the product. However, in some cases, the Bank may donate
part of their profits in order to gain recognition by customers of its new product and market
expansion of its sales.

The main advantage for the Bank at this stage is the almost complete lack of competition.

The duration of the stage of launch of product to market may vary within wide limits and is
determined by the quality of the product, according to users ' needs, the effectiveness of the
selected marketing strategies and consistency of its implementation.

Stage of product development (growth) is characterized by rapid increase in sales; as a result, at

this stage the amount of profit of the Bank reaches the maximum level. Although marketing costs
will remain quite significant, their share in the total cost of maintenance is significantly reduced.
The costs associated with providing this service, the target market, are reduced, and hence reduced
the price of the product.

Stage of development is associated with a significant increase of competition and key strategic
efforts of the Bank directed at further introduction on the market of this product. The level of
competition largely depends on the level of success of the product in the market. Characteristic is
the fact that banks that have previously began to produce this product have significant competitive
advantages, but this does not exempt the user from worries about further improvement of the
product, as the competitors probably will try in every way to improve and further develop it with
the aim of advancing leaders in the competition.
 At the stage of growth the Bank is aiming to expand sales and penetrate new market segments.
This extension allows the Bank to maximise profits and attract a significant number of new clients.
Therefore, this stage of the life cycle of the product is sufficiently profitable for the Bank and, hence,
Its continuation is a strategic priority of the Bank.

Maturity stage the product is characterized by a slowdown in sales, and even its reduction. This
is due to the following reasons. First, at the time of maturity of the product needs of consumers can
vary significantly. Secondly, this product can come in a similar but improved service. Third, the
Bank could not withstand competitive pressures. Finally, the service may not be enough profitable
for the Bank due to the emergence of new opportunities for more efficient capital investment.

The amount of profit the Bank at the stage of maturity of the product goes down. However, the
product receives wide distribution and covers the maximum customer base. A result of significant
increased competition is the achievement of a minimum level of product prices. One of the factors
contributing to the decline in prices, is a significant reduction at this stage of the marketing
expenses.

The specified stage of the life cycle of a product has a high stability and steady income, therefore
the Bank and stage of development, is interested in its maximum extension. At the stage of
maturity, the main efforts of the Bank aimed at retaining the market share, increase consumption of
this product, based on its improvement, and modification of marketing complex, and perhaps even
new product positioning in the market.

Sometimes the last phase of the maturity stage of the product associated with the beginning of
falling sales and profits, is called the stage of "saturation, Riku".

Decline stage in the life of the product is associated with a steady decline in sales and reduced,
possibly even to zero, of the profit of the Bank. For various banking products duration of the
downturn is different. The decrease in sales can occur very sharply, maybe gradually, reaching
eventually stabilize at a certain level.

Competition in the downturn is weakening. This is largely due to peregrinovna attention to new
kinds of products related to unattractive terms of sales and profits. As a result of significant
weakening of the competitive pressure from banks disappearing a special need to support the
significant cost of marketing, and in some cases there is even the opportunity to raise prices.
However, this does not indicate the profitability of this service to the Bank, because the volume of
sales of a product in the decline stage is extremely low. .

Saving in the product line of the Bank services, which entered into a recession, is often extremely
unfavorable. This is due, on the one hand, the implementation of certain costs of providing services,
and on the other hand, with the diversion of forces and funds from the Bank for the development
and implementation of new, profitable products. However, the Bank may benefit to use legacy
products. For example, the presence in the product line of the Bank at the same time services that
are at the stage of market introduction. and services that are in the decline stage, can help to
stimulate sales of new services as they are in the background of a legacy will have obvious
advantages.

In addition to the classic shape of the curve of the product life cycle, there are a large number of
its modifications. For example, the curve characterizing the life cycle of "timeless" credit services is
the so-called curve "re-cycle", i.e. the increase in loans is punctuated with their decline.

Banks provide electronic services whose scope is constantly expanding, described by the
so-called "Grebnevo" curve, each cycle of which reflects the opening of new sectors using the
services.

The use of banks NOW accounts (savings and current) can be described using the curve of the
boom which reflects the dramatic growth of sales and profits of banks and their subsequent
stabilization at a high level.

Other variations of the curve that describes the life cycle of a product can serve as curves
"capture", which reflect the rapid rise in popularity of certain services and the equally rapid decline,
and curves "failure", which characterize a very short time and a slight increase in sales and profits
with the subsequent ascension these indicators to zero.

The whole product range is regularly subjected to analysis to determine at what stage of the life
cycle are its constituent elements. It is based on the study of indicators of sales of certain services
market share of each of them, the level of costs and profitability.

The study of the stages of the life cycle of products allows you to appropriately optimize the
structure of the product line of the Bank. There are no universal methods, because the optimal
structure of the product line is individual for each Bank and depend on the market situation.
However, care should be taken to prevent various kinds of extremes. For example, a unilateral
effort to develop new products or, conversely, excessive devotion to the traditional products is
unlikely to bring the desired success. Under this policy you must comply with the principles of
optimization and balance of the structure of the product line.

In addition, the structure of the product line must be balanced, based on profit margin and
diversity of services, since a significant number of different types of services in the Arsenal of the
Bank, insure it against the possible negative consequences associated with changes in market and
customer needs. At the same time you cannot neglect the provision of free services to not for profit
and for sales promotion of banking products and the development of the image Bank.

An important area of commercial policy of the banks is the development of banking products. It
is necessary to distinguish three situations:
 • improving an existing product (services);

• development and implementation of a new Bank, but known on the market of the product;

• the development of a new market product.

In the simplest case, "novelty" may be to change the name of an existing product. Practice shows
that the improvement of the already offered product, as a rule, is the best way of upgrading the
product line of the Bank. Thus it is possible to avoid the risk of rejection of the product market, and
costs associated with product development, too expensive and introduce it to the market. Of course
the improvement allows to increase the Bank's revenue without losing your market share. New
product development — nitropaste option, but it promises a decisive competitive advantage. If the
product meets the current needs of customers, it is possible to obtain extra income ("skimming"). A
new product may not bring the Bank's income, but will contribute to technological capacity
building as part of a "power Bank".

Another aspect to consider the process of product development is associated with the needs of
Bank customers. A new product may be either new or old customers ' needs. In the first case does
not exclude the situation in which the needs, they developed a new product, formed a small part of
customers. This means that the bike will have to take care of the formation of these needs by
creation of appropriate infrastructure, mass awareness advertising campaign, the implementation
of joint projects with non-banking institutions and the like. An example would be the
implementation in the Ukrainian banking market of plastic cards of international payment systems.

Otherwise, when a new product meets the needs of our customers, in product development it is
necessary to consider the possibility of reducing market share of the old product, which meets the
same needs as new due to the that is to say the flow of customers. As a result, the costs of
introducing a new product can not be justified. Thus, development of new products is closely
connected with the study of customer needs, competitors ' offers and calculate the economic
feasibility of innovations. The stages of marketing development of new banking products is shown
in Fig. 3.3.

Fig. 3.3. The development cycle of a banking product

So in the concept stage trying to get as many ideas and suggestions in new products, employees,
Bank customers and visitors. Furthermore, ideas and suggestions can be marketing research, the
products of other banks, and the like. Corporate culture should promote the ideas of the employees
of the Bank. At the stage of formalization and the description of the product describes the product
features, determined by its usefulness to the client and profitability for the Bank, evaluated the
associated risks. Banking product is investigated concerning the required for its implementation
resources, technology, funding, staffing, and possible contraindications — legal, regulatory, image.
This step collects the signatures of all managers and professionals who are related to the
implementation of the product and control over its implementation. Then comes the final approval
of the product. This occurs usually at the meeting of the collective body, empowered, or the Board
of Directors. During the approval stage of the product developed a marketing plan for a product
introduction. It contains customer, market research, calculation of costs and expected profits, the
definition of the criterion of break-even forecast of sales volumes, preparation of process maps,
development of programs of promotion (particularly advertising campaign), training of the
personnel. If marketing insights meet the top management of the Bank, the product is finally
approved and started on rioc.

In parallel with the development of new products is ongoing work on the revision of the existing
product line of the Bank. These studies may lead to insights about modernizing the product or its
replacement. In the latter case, begins the description of a cycle of works that discussed above.

Only with the implementation of the above stages in the Bank, which operates in a competitive
environment, it is possible to justify the costs associated with developing and launching new
banking products.

The commodity policy of the Bank is a vital element of the marketing policy. From the structure,
the quality, depth, richness and harmony of the product portfolio of the Bank largely depends on
its level of competitive advantage. A significant impact on the strategic performance of the Bank
has innovative component of product policy, which is manifested in the periodic updating of
assortment. The emergence of new services and refusal to provide legacy products. The commodity
policy of the Bank should be read in conjunction with this component of the marketing strategy of
the Bank, as the pricing strategy.