CAIIB-General Bank Management Module D -MARKETING MANAGEMENT

BY

S.V.ATRE Bsc, BA, LLB, MBA, CAIIB

FACULTY,

BANK OF INDIA,
MANAGEMENT DEVELOPMENT INSTITUTE, CBD BELAPUR, NAVI MUMBAI

WHAT IS MARKETING ?

IS SELLING & MARKETING ARE SAME ?

DEFINITION PETER DRUCKER

Marketing is not only much broader than selling, it is not a specialised activity at all. It encompasses the entire business. It is the whole business seen from the point of views of its final result that is from the customers point of views. Concern and Responsibility for marketing must therefore permeate all areas of the enterprise
contd.

DEFINITION PHILLIP KOTTER

Marketing is the business function that identifies current unfilled needs and wants, defines and measures their magnitude, determines which Target Markets the organisation can best serve and decides on appropriate products, services and programmes to serve these markets. Thus, marketing serves as a link between societys needs and its pattern of industrial response.

Collecting & Analysing the Needs, Wants & Demands of Customer

Feedback

Developing & Designing a Product

CONCEPT OF MARKETING

Delivering the Product

Conveying the Customer about the Product

Pricing the Product

INTRODUCTION TO MARKETING MANAGEMENTQuestions 1) To make available goods and services to buyers according to their requirement Is called : a) selling b) trading c) marketing d) any of the above

INTRODUCTION TO MARKETING MANAGEMENTQuestions 1) To make available goods and services to buyers according to their requirement Is called : a) selling b) trading

c) marketing
d) any of the above

INTRODUCTION TO MARKETING MANAGEMENTQuestions

2.

Marketing combines which of the following :

a) philosophy of business and business practices b) business practices and customer requirements c) customer requirements and philosophy of business d) all of the above

INTRODUCTION TO MARKETING MANAGEMENTQuestions

2.

Marketing combines which of the following :

a) philosophy of business practices

business

and

b) business practices and customer requirements c) customer requirements and philosophy of business d) all of the above

INTRODUCTION TO MARKETINGMANAGEMENT-Questions
3.Which of the following is not a part of the marketing activity
a) sales and sales management, marketing research, planning distribution b) advertising and promotion, after sale service c) pricing, packaging, product development d) none of the above

INTRODUCTION TO MARKETINGMANAGEMENT-Questions
3.Which of the following is not a part of the marketing activity
a) sales and sales management, marketing research, planning distribution b) advertising and promotion, after sale service c) pricing, packaging, product development

d) none of the above

INTRODUCTION TO MARKETING MANAGEMENTQuestions

4. Which of the following is more appropriate to the process of marketing management. a) analysis and planning b) planning, marketing and implementation c) analysis, planning, implementation and control d) analysis, implementation, control and marketing

INTRODUCTION TO MARKETING MANAGEMENTQuestions 4. Which of the following is more appropriate to

the process of marketing management. a) analysis and planning b) planning, marketing and implementation

c) analysis, planning, implementation and control

d) analysis, implementation, control and marketing

INTRODUCTION TO MARKETING MANAGEMENTQuestions

5. Which of the following is an appropriate definition of product. a) it is anything that can be offered to satisfy a need or want of the customer b) a product can be a physical goods c) a product can be a service or idea d) all the above together

INTRODUCTION TO MARKETING MANAGEMENTQuestions

5. Which of the following is an appropriate definition of product. a) it is anything that can be offered to satisfy a need or want of the customer b) a product can be a physical goods c) a product can be a service or idea

d) all the above together

MARKETIING OF WHAT

PHYSICAL GOODS SERVICES IDEAS MARKETING DIFFERS FOR EACH CATEGORY

MARKETIING OF SERVICES
AS A BANKER WE ARE CONCERNED WITH THE MARKETING OF SERVICES WHICH GREATELY DIFFERS FROM MARKETING OF GOODS

(contd)

DIFFERNCE BETWEEN PHYSICAL GOODS & SERVICES PHYSICAL GOODS

Tangible Homogenous Production& Distribution separated from consumption A thing

SERVICES
Intangible Heterogeneous Production, Distribution and Consumption are simultaneous processes An activity or process

Core value produced in factory

Core value produced in buyer-seller interactions

Customers do not participate in Customers participate in the process the production

Can be stored
Transfer of ownership possible

Can not be stored

Transfer of ownership not possible

DEFINITION OF SERVICE
Services are by and large Activities or they are a series of activities rather than things The services are intangible They take place in the interaction between the customer and the service provider i.e. Services are produced and consumed simultaneously

MARKETING OF BANKING PRODUCTS

Banks provide services Its aim is to satisfy customers needs and wants The needs and wants of the customer are financial in nature Competition, Efficiency and Effectiveness are major factors

CONSUMER BEHAVIOUR
STUDY OF THE CONSUMER EHAVIOUR IS ESSENTIAL FOR MARKETING UNDERSTANDING CONSUMER BEHAVIOUR IS THE GREATEST CHALLENGE CAN CONSUMER BEHAVIOUR BE PREDICTED CONSUMERS ARE HUMAN BEINGS

CONSUMER BEHAVIOUR
To buy or not to buy What to Buy? When to Buy ?
Consumer behaviour is influenced by : Needs and Motives Hierarchy of Consumer Needs Decision making process

NEEDS & MOTIVES

5. Self-Actualisation Self Fulfillment

4. Esteem Needs Self respect, Recognition, Status and Success 3. Social Needs Friendship,affection and a sense of belonging 2. Safety Needs Avoidance or Protection from Threatening situations and economic security

1. Physiological Needs : Food - Oxygen - Sleep

Individual Perception
An individual is motivated by his personal needs for self esteem, love or social recognition, his behaviour is affected by his particular perception of himself and the world around him.

Selective Perception
Human consumers have the ability to select from the many sensations bombarding our brains

CONSUMER BEHAVIOUR
Learning and Habit Development Cognitive theory views Learning as a mental process of memory thinking and the rational application of knowledge to practical problem solving Most consumer behaviour is habitual. They rely on habit because :1)they resort to habit when they select products because it is easy 2)they rely on habit because of necessity 3)they resort to habit because it is the rational thing to do

FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING

Location : Where a bank branch is located often influences the choice of the bank. Very often the bank next door wins on that basis alone

contd.

FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING

Safety : Depositors are very often placing their hard earned money in a bank and a worrying factor for them is is the bank safe? To quell the fear, the background of the bank, its promoters, international connections, the years it has been operating in the country, all influence the choice contd.

FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING

Returns : A consumer having satisfied himself that his money is safe, wants to be sure that the returns being earned are attractive

FACTORS INFLUENCING CONSUMER BEHAVIOUR IN BANKING

Range of Services : With greater sophistication in the environment, a consumer gets more demanding and would like his bank to offer a variety of services and products which increase convenience for him. Ex. Phone billing + ATMs or offer him greater choice a range of term deposit products which offer him high returns and liquidity.

CUSTOMER SERVICE AS A MARKETING TOOL

CUST SERVICE AS A MRKTING TOOL

MARKETING COST IS VERY HIGH SUCCESS OF MKTG IS UNCERTAIN SATISFIED CUSTOMER IS THE BEST MARKETING MANAGER FOR THE BANK NOT ONLY HE RETAINS BUSSINESS HE CANVASSES NEW BUSINESS ALSO HIGHER SUCCESS RATIO ITS FREE

Customer Service -The Essence Of bussiness

Customers are the backbone of the Organizations They posses the power to make or break any organisation irrespective of its nature and size . You forget your customers and you are out of your bussiness

CS-The essence of business.

So, it is necessary to take adequate care of them and at the same time increase their number.

NEED OF CUST SERVICE

IN A FREE MARKET ECONOMY THE CUSTOMER HAS CHOICE IT COSTS MORE TO GAIN A NEW CUSTOMER THAN TO RETAIN AN EXISTING ONE. UNLESS THE SITUATION IS RECOVERED QUICKLY A LOST CUSTOMER WILL BE LOST FOR EVER.

NEED OF CUSTOMER SERVICE

DISSASTISFIED CUSTOMERS HAVE FAR MORE FRIENDS THAN SATISFIED ONES.

IF YOU DONOT LOOK AFTER YOUR CUSTOMERS, SOMEBODY ELSE WILL.

CUSTOMERS NEEDS
SPEED TIMELINESS ACCURACY COURTESY CONCERN

TOOLS STAFF EMPOWERMENT

ATTITUDE POLITENESS LISTENING PROMPTNESS KNOWELEDGE COMMUNICATION CUSTOMER EDUCATION

COMMON COMPLAINTS
RUDE SERVICE /RESPONSE AT THE COUNTER UNATTENDED PHONES DELAYED SERVICE INSENSESITIVITY AND APATHY TOWARDS CUSTOMER UNINFORMED STAFF

COMPLAINTS REDRESSAL
WELCOME COMPLAINTS,THEY ALLOW FOR RECOVERY THE CUSTOMER MAY NOT ALWAYS BE RIGHT BUT HOW YOU RESPOND CAN MAKE ALL THE DIFFERENCE IF YOU DONOT LOOK AFTER THEM,SOMEBODY ELSE WILL

TIPS
AVOID CONFRONTATIONS YOU MAY WIN THE ARGUMENT BUT WILL LOSE THE CUSTOMER

CUSTOMER DELIGHT
GIVE HIM MORE THAN WHAT HE NEEDS OR DEMANDS SERVE WITH SMILE MAKE HIM A DELIGHTED CUSTOMER

MAKE HIM A FRIEND

LEGAL PROTECTION TO CUSTOMERS

Consumer protection act Banking Ombudsman scheme Right to information act Lenders liability act

The Consumer Protection Act

Consumers are provided with easy access to justice. Simple and faster mechanism since it is a welfare legislation the interpreted to the benefit of the consumer.

COPRA PROTECTS FOLLOWING RIGHTS OF CONSUMERS.

Protection from goods which are dangerous to life and property. To be informed about the quality,quantity,potency,purity,standard and price of goods To have competitive price The consumer interest will receive proper consideration

COPRA
The right to seek redressal against unfair trade practices/exploitation, The right to consumer education.

THE BANKING OMBUDSMAN SCHEME 1995

POWERS AND DUTIES a) to receive complaints relating to banking services. b) to consider such complaints and facilitate their : I) satisfaction or ii)settlement by agreement or iii) by making a recommendation or iv) award

Ombudsmans authority include

All complaints concerning deficiency in service,such as: 1.Non payment/inordinate delay in payment or collection of cheques,drafts/bills,etc. 2.Non -acceptance , without sufficient cause,of small denomination notes tendered for any purpose,and for charging of commision in respect thereof.

All complaints concerning deficiency in service ,such as:

3.Non- issue of drafts to customers and others 4.Non-adherence to prescribed working hours by branches 5.Failure to honour gurantee ,letter of credit commitments by banks.

OMBUDSMAN
6.Claims in respect of unauthorised or fradulent withdrawals from deposit accounts,etc 7.Complaints pertaining to deposit accounts. 8.Complaints from exporters in India pertaining to the banks operations in India.

OMBUDSMAN
Complaints from Non -Resident Indians having accounts in India in relation to their remittances from abroad , deposits and other bank-related matters.

Complaints concerning advances only in so far they relate to:

1.Non observance of RBI directives on intt rates. 2.Delays in sanction/non-observance of prescribed time schedule for disposal of loan application 3.Non observance of any other directions or instructions of RBI as specified for the purpose.

Pre-requisite for filing a complaint with the Ombudsman

1.The complainant should have filed a complaint with the bank in writing and either the bank had rejected the complaint or the complainant had not received any satisfactory reply within two months.

Pre requisites for filing complaint

2.The complaint should be made not later than one year after the bank had rejected the representation or sent its final reply on the representation of the complainant.

Settlement of complaint
The BO must notify the branch or office of the bank named in the complaint about the receipt of complaint along with a copy of the complaint. The BO must strive to promote a settlement of the complaint by agreement between the complainant and bank through concillation or mediation.

PROCEDURE
For the purpose of promoting a settlement BO is not bound by any legal rule of evidence , BO may follow any appropriate procedure. BO will pass an Award after affording the parties reasonable opportunity to present their case.

LEGAL PROTECTION TO CUSTOMERS

Right to information act

Lenders liability act

QUOTES
IF YOU BUILD A GREAT EXPERIENCE,CUSTOMERS TELL EACH OTHER ABOUT THAT . WORD OF MOUTH IS VERY POWERFUL. Jeff Bezos

QUOTES
Customers dont expect you to be perfect They do expect you to fix things when they go wrong. Donald Porter

QUOTES
The longer you wait, the harder it is to produce outstanding customer service.
William H Davidow

QUOTES
Customer service is awareness of needs, problems,fears and aspirations.
Anonymous

QUOTES
Quality in service or product is not what you put into it. It is what the client or customer gets into it Peter Drucker

QUOTES
Our greatest asset is the customer. Treat each customer as if they are the only one! Laurice Leito.

QUOTES
It takes less effort to keep an old customer satisfied than to get a new customer interested Robert Half

QUOTES
What you give is what you you get returned I.e. the way you handle your employees is the way they will handle (manhandle) your customers. E..D.HORRELL

QUOTES
HAPPY STAFF
MAKES CUSTOMERS HAPPY. Don Silvensky (CEO MicroteTek)

CONSUMER AND MARKET SEGMENTATION

CONSUMER & MARKET SEGMENTATION

The market for product or service is not one homogenous mass of customers. Each potential buyer has individual needs and desire and specific circumstances that effect his purchasing and consumption behaviour.

CONSUMER & MARKET SEGMENTATION

Market segmentation is the division of the total market into several relatively similar and meaningful groups.

CONSUMER & MARKET SEGMENTATION

Market segmentation, the well tested system for guiding marketing strategy, starts not with distinguishing product possibilities, but rather with distinguishing customer needs or interests.

APPLICATION OF SEGMENTATION TO BANKING

1) The most commonly applied application in Banking in the category of deposits is by demographic variables. Therefore target segments which a bank wants to pursue may be defined by : Age/Income/Occupation/Education

contd

APPLICATION OF SEGMENTATION TO BANKING

2) For example, a typical definition for a target segment for deposit customers could be :- Individuals (within a city/locality) - Age Group 20 to 55 years - Income Rs.100,000 p.a. + - Occupation Salaried Individuals - Education Graduates contd

APPLICATION OF SEGMENTATION TO BANKING

3) Very often target segments could be defined by profession : Doctors Chartered Accountants Lawyers Consultants contd

APPLICATION OF SEGMENTATION TO BANKING

4) Other organizations and non-profit entities to whom banks market : Trusts Associations, Societies Schools, Colleges Small Establishments like shops contd.

APPLICATION OF SEGMENTATION TO BANKING

5) Since location is a great influencer in Retail Banking Locality mapping is undertaken. Very often localities have a skew of ethnic/community groups like Gujarathis, Sindhis, Catholics, Tamilians this forms a basis also for target segmenting

contd.

APPLICATION OF SEGMENTATION TO BANKING

6) In Retail Banking Segmentation is done at various levels so that it actually provides proper guidance to the marketing staff : - Demographic - Geographic Mapping - Community clusters - Listing of entities contd.

APPLICATION OF SEGMENTATION TO BANKING

7) For corporate lending, the target segment of companies could be defined by the following variables : Location Sales turnover Industry category Number of employees

MARKETING MIX
Marketing tools in relation to products, known as the Marketing Mix, contains four elements : i) ii) iii) iv) Product Price Place Promotion Customer Solution Customer Cost Convenience Communication contd

CHANNELS OF DISTRIBUTION
Distribution refers to Place, one of thePs in marketing mix. Channels of distribution should be thought of as means to increase the availability and/ or convenience of service that help in satisfying the need of the existing user or increase their use among the existing or new customers.

CHANNELS OF DISTRIBUTION

Branches have been the delivery system for Banking. Various characteristics of services also had a lot of say in restructuring the channels of distribution

CHANNELS OF DISTRIBUTION
However, the technological evolution has brought a great change and development of innovative channels of distribution. The types of Branches in operation include : - Full Service Branches - Limited Service Branches (SPOKES) linked to Main (HUB) branches - Specially Branches like Corporate Banking Branches, Housing Finance Branches, NRI Branches, SME Branches contd

CHANNELS OF DISTRIBUTION
Electronic Banking Services include :-

a) b) c) d) e)

ATMs Intelligent Terminals Home Banking Telemarketing Internet Banking

MARKET SEGMENTATION-QUESTIONS

1.The aggregation of a heterogeneous market into two or more relatively homogeneous and meaningful groups is called : a) consumer groups b) market groups c) market segmentation d) market and consumer groups

MARKET SEGMENTATION-QUESTIONS

1.The aggregation of a heterogeneous market into two or more relatively homogeneous and meaningful groups is called : a) consumer groups b) market groups

c) market segmentation
d) market and consumer groups

MARKET SEGMENTATION-QUESTIONS
2. Market segmentation begins with which of the following : a) distinguishing product possibilities b) distinguishing customer needs or interests c) distinguishing service range d) any of the above

MARKET SEGMENTATION-QUESTIONS
2. Market segmentation begins with which of the following : a) distinguishing product possibilities

b) distinguishing customer needs or interests

c) distinguishing service range d) any of the above

MARKET SEGMENTATION-QUESTIONS
3. Which of the following is the important aspect used to segment a market: a) significantly related to buying and consumption behaviour capable of being used in design and implementation of marketing strategy b) identifiable and measurable without great effort c) capable of being used in design and implementation of marketing strategy d) all of the above

MARKET SEGMENTATION-QUESTIONS
3. Which of the following is the important aspect used to segment a market: a) significantly related to buying and consumption behaviour capable of being used in design and implementation of marketing strategy b) identifiable and measurable without great effort c) capable of being used in design and implementation of marketing strategy

d) all of the above

MARKET SEGMENTATION-QUESTIONS

4. When one product or service can serve most or all of the market, usually, the segmentation is :
a) least possible b) more desirable c) not feasible d) not possible

MARKET SEGMENTATION-QUESTIONS

4. When one product or service can serve most or all of the market, usually, the segmentation is :
a) least possible b) more desirable

c) not feasible
d) not possible

MARKET SEGMENTATION-QUESTIONS

5.Which of the following can be categorized as benefit of non adoption of market segmentation : a) economies of scale b) standardization of product c) minimal inventories d) all the above

MARKET SEGMENTATION-QUESTIONS

5.Which of the following can be categorized as benefit of non adoption of market segmentation : a) economies of scale b) standardization of product c) minimal inventories

d) all the above

MARKETING MIX BANK MARKETING-QUESTIONS

1.Which of the following is the prominent difference between the goods and services, which also suggests different marketing strategy: a) intangibility and separability b) inseparability and homogeneity c) intangibility, inseparability and nonperishability d) intangibility, inseparability, heterogeneity and perishability

MARKETING MIX BANK MARKETING-QUESTIONS

1.Which of the following is the prominent difference between the goods and services, which also suggests different marketing strategy: a) intangibility and separability b) inseparability and homogeneity c) intangibility, inseparability and nonperishability

d) intangibility, inseparability, heterogeneity and perishability

MARKETING MIX BANK MARKETINGQUESTIONS

3.Intangibility, inseparability and heterogeneity are manifested in services marketing, at which of the following levels:

a) strategic level b) tactical level c) a and b both d) none of the above

MARKETING MIX BANK MARKETINGQUESTIONS

3.Intangibility, inseparability and heterogeneity are manifested in services marketing, at which of the following levels:

a) strategic level b) tactical level

c) a and b both
d) none of the above

MARKETING MIX BANK MARKETINGQUESTIONS 4. Marketing

mix represents a series of ------------------responses employed to implement a chosen strategy: a) tools b) measures c) tactic d) any of the above

MARKETING MIX BANK MARKETINGQUESTIONS

4. Marketing mix represents a series of -------------------responses employed to implement a chosen strategy: a) tools b) measures

c) tactic
d) any of the above

MARKETING MIX BANK MARKETINGQUESTIONS

5. Marketing mix is --------------- component of any marketing strategy. a) important b) core c) latest d) first

MARKETING MIX BANK MARKETINGQUESTIONS

5. Marketing mix is --------------- component of any marketing strategy. a) important

b) core
c) latest d) first

NEW CHALLANGES IN BANK MARKETING

YOUNG CUSTOMERS TECHNOLOGY NON BANKING PRODUCTS (INSURANCE,MUTUAL FUNDS ) PHYSICAL PRODUCTS (GOLD COINS etc)

Real Marketing-How to market all our products to single customer Manager of a Retail store in US asks: "Do you have any sales experience?" The Indian says: "Sir, I was a salesman back home in India. Well, the boss liked the Indian chappie so he gave him the job. "You start tomorrow.. I'll come down after we close and see how you did."

Real Marketing-How to market all our products to single customer

His first day on the job was rough but he got through it. After the store was locked up, the boss came down. "How many sales did you make today?" Indian boy says: "Sir, Just ONE sale."
The boss says: "Just one? No! No! No! You see here our sales people average 20 or 30 sales a day." If you want to keep this job, you'd better be doing better than just one sale.

Real Marketing-How to market all our products to single customer By the way, how much was the sale for?" Indian boy says: " $101 237. 64"
Boss says: "$101 237. 64? What the hell did you sell

Real Marketing-How to market all our products to single customer Indian boy says: "Sir, First I sell him small fishhook. Then I sell him medium fishhook. Then I sell him large fishhook. Then I sold him new fishing rod and some fishing gear.

Real Marketing-How to market all our products to single customer Then I ask him where he's going fishing and he said down on the coast, so I told him he'll be needing a boat, so we went down to the boating department and I sell him twin engine Chris Craft.

Real Marketing-How to market all our products to single customer Then he said he didn't think his Honda Civic would pull it, so I took him down to our automotive department and sell him that 4X4 Blazer.

Real Marketing-How to market all our products to single customer I then ask him where he'll be staying, and since he had no accommodation, I took him to camping department and sell him one of those new igloo 6 sleeper camper tents.

Real Marketing-How to market all our products to single customer Then the guy said, while we're at it, I should throw in about 100 worth of groceries and two cases of beer.

Real Marketing-How to market all our products to single customer The boss said: "You're not serious? A guy came in here to buy a fishhook and you sold him a boat, a 4X4 truck and a tent?

Real Marketing-How to market all our products to single customer Indian boy says: "No Sirji, actually he came in to buy Anacin for his headache, and I said: Well, fishing is the best way to relax your mind."