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Service marketing in banking

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Service marketing in banking

  1. 1. SERVICES MARKETING IN BANKING BY Mir Zeeshan Ali
  2. 2. BANKING “ A bank is a financial institution that accepts deposits and channels those deposits into lending activities “
  3. 3. WHAT ARE BANKS  Institutions which deals in money and credit.  An intermediary, which handles other people’s money both for their advantage and to its own profits.  A financial institution that links the flow of funds from savers to the users.  Plays an important role in the economy of any country as they hold the saving of the public.
  4. 4. TYPES OF BANK  Central Bank: The Reserve Bank of India is the central Bank that is fully owned by the Government  Public Sector Banks: State Bank Group, Regional rural banks  Private Sector Banks: Foreign Banks, Scheduled and Non- Scheduled Banks  Co-operative Sector: State Co-operative Banks, Central Co- operative Banks, Primary Agriculture Credit Societies  Development Banks/Financial Institutions: IDBI, ICICI, NABARD
  5. 5. WHAT IS BANK MARKETING “Bank marketing is the aggregate of functions, directed at providing services to satisfy customers financial (and other related) needs and wants, more effectively and efficiently than the competitors keeping in view the organizational oBjectives of the Bank.”
  6. 6. WHY BANK MARKETING NECESSARY  The existence of the bank has little value without the existence of the customer.  Aim is not only to create and win more and more customer but also to retain them through effective customer service.  Appropriate promise to a customer through a range of services (products) and also to ensure effective delivery through satisfaction is important.
  7. 7. CONCEPT OF BANK MARKETING  Identifying the most profitable markets now and in future;  Assessing the present and future needs of customers;  Setting business development goals and making plans to meet them  Managing the various services and promoting them to achieve the plans  Adapting to a changing environment in the market place.
  8. 8. MARKETING STRATEGIES  Designed after taking into account the strengths and weaknesses of the organization.  Bank with clientele from various segments could think of “market penetration” by offering the existing range of services to existing customers.  Bank which are not facing acute competition could think of “Market Development” by offering the existing services to new customers.  Design new product range for their customers of various segments
  9. 9. SEGEMENTATION  Banks deal with individuals, group of persons and corporate.  More or less homogenous groups in terms of their needs and expectations.  Market segments, targeting one or more segments, developing products and marketing programs tailor-made for these segments
  10. 10. Criterion for Market Segmentation in India  Agricultural Sector Marginal 2 to 5 acres 5 to 10 acres 10 acres and above  Industrial Sector Tiny Co-operative Small-sized Large- sized
  11. 11. TYPES OF MARKETING
  12. 12. Traditional external marketing  Consists of usual four ‘Ps’ of Product, Price, Place and Promotion of marketing mix Product: The products offered are the services which includes various types of bank accounts, different types of loans, investment services, Credit cards, online banking, mobile banking and many more.
  13. 13. PRICING
  14. 14. GENERAL STEPS OF PRICING
  15. 15. PLACE  It refers to the establishment and functioning of a network of branches and other offices through which banking services are delivered.  Objective is to get the right product ,at right places at right time at the least cost.  Extensive branch network- access to large section of people  Proximity may play a determinant role in selecting the bank.
  16. 16. CONT…  With the advent of technology other point of contacts have come up. Such as: ATM Telephone banking Online banking Mobile banking Video banking etc.
  17. 17. PROMOTION  Advertising  Publicity  Sales Promotion  Personal Selling  Push and Pull Strategies
  18. 18. INTERNAL MARKETING  It involves the people(5th P) of the bank i.e. the employees.  Employees should also be treated as internal customers, and sort of marketing mix should be followed.  Quality Human resource can be a point of differentiation
  19. 19. INTERACITVE MARKETING  The quality of service provided during the buyer-employee interaction.  Efforts for previous strategies will turn futile if the interaction does not takes place satisfactorily. It involves : • Process (6th P) • Physical evidence (7th P)
  20. 20. PROCESS  Refers to the systems used to assist the organization in delivering the service.  Aids to the promotion of customer satisfaction  It involves: speeding delivery of services reducing the paper work standardization of procedures customization as per individual demand simplicity etc.
  21. 21. PHYSICAL EVIDENCE  It includes signage, reports, punch lines, other tangibles, employee’s dress code etc.  The company’s financial reports are issued to the customers to emphasis or credibility.  Signage: Each and every bank has its logo by which a person can identify the company. It creates visualization and corporate identity for the banks.  Tangibles: banks give pens, writing pads to the customers.  Punch lines: Depicts the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers.
  22. 22. Current Marketing Strategies  Referral services  Direct mailing  Cold calling  Offering items having your brand identity  Using the media  Getting celebrities to endorse the product or service.  Sponsoring events  Using permission-based Marketing
  23. 23. RURAL BANK MARKETIGN  Follows 80-20 Parato principal  Bankers need to understand the rural psychology  Employing local literate youth for confidence building  Banker must be aware of agriculture aspects, cultural and communal aspects, institutional facilities etc.  Process of change should be known to him  Status of various development plans should be known
  24. 24. SEVEN SERVICE QUALITY GAPS Customer needs & expectations MGM. definition of these needs Translation into design/delivery Execution of design/delivery Advertising and sales promises Customer perceptions of Customer interpretation Product executions of communications Customer experience Relative to expectations
  25. 25. DETAILS OF SERVICE DELEVERY GAPS 1.The knowledge gap 2. The standards gap 3.The delivery gap 5.The perceptions gap 6. The interpretation gap 7. The service gap
  26. 26. Facilitating & enhancing Supplementary services Information Payment Consultation Order Billing Core Taking Exceptions Hospitality Safe Keeping
  27. 27. CHALLENGES FACED BY BANKING INDUSTY  Deregulation: This continuous deregulation has made the Banking market extremely competitive with greater autonomy, operational flexibility and decontrolled interest rate and liberalized norms for foreign exchange.  New rules: Banks are transforming to universal banking, adding new channels with lucrative pricing and freebees to offer.
  28. 28. CONT…  Efficiency: Banks need to access low cost funds and simultaneously improve the efficiency. The banks are facing pricing pressure, squeeze on spread and have to give thrust on retail assets.  Diffused Customer loyalty: Customers have become demanding and the loyalties are diffused.
  29. 29. CHALLENGES FACED BY THE INDUSTRY  KYC  Technical issue  Organizational arrangement  Product innovations  Price bundling approach  Business process reengineering(BPR)  Effective human recourses  Rural orientation
  30. 30. STUCTURE OF THE ORGANISED BANKING SECTOR IN INDIA
  31. 31. THANK YOU…

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