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PRINCIPLES & PRACTICESPRINCIPLES & PRACTICESOF BANKINGOF BANKING

FORJAIIB

Module-DMarketing of Banking Services

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MARKETMARKETNot necessarily a geographical area, aplace where goods can be sold or bought.

Area wisemarket

Local , Regional , National or globalmarket

Productwise

Commodity, share, Bullion, realestate, retail loan markets

Transaction wise

Cash/spot, future market

Volume

wise

Retail Or Whole sale market

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MARKETING

Marketing is the process of determiningconsumer demand for a product or service,

motivating its sale and distributing it intoultimate consumption at a profit

A management function- needanalysis, product, sale & distribution

A Business Philosophy-customer focused-profit oriented.

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Selling & MarketingSelling & Marketingselling is anoperational activity

It is a concept includesneed analysis, product dev,consumptions & satisfaction

It is product focused It is customer focused

It is seller oriented It is buyer/ customeroriented

It encases profitableopportunity

It is buyer need oriented

It aims earn profitby maximizing sales

It aim at earning profit bymax.customer satisfaction

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S.No. Physical Goods Services1 . Tangible Intangible

2. Homogeneous Heterogeneous3. Product and distribution

separated fromconsumption

Production, distributionand consumption resimultaneous process

4. A thing An activity5. Core value produced in

factoryCore value produced inbuyer-seller interaction

6. Customers do notparticipate in theproduction process

Customers participate inproduction

7. Can be kept in stock Cannot be kept in stock

8. Transfer of ownership No transfer of ownership

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Market MixMarket MixMarketing mix is a set of marketing toolsused to pursue marketing objective.These are 4Ps& 4Cs Product:- variety, quality, features, brand etc Price:- list price, discounts, payment period Promotion:- advertising, sales force, PR,DSA Place:- channels, coverage, locations,

inventory, transport Customer need Cost to customer Convenience

communication

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Consumer behaviorConsumer behavior

Physiological needs- food, drink, sleepSafety needs-protection & economic

securitySocial needs-friendship, affection, loveEsteem need- recognition, status &

successSelf-actualization- self fulfillment

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Financial position & Banking NeedsFinancial position & Banking NeedsStage financials Needs

YoungBachelor

High income-low liabilities

Credit card, auto loan,low cost banking.

Half Nest(married & young kids

Low liquidity-high needs

Mortgage loan, ODCredit card, durableloans

Full Nest(married & adult kids

High liquidityHigh savings

Investment, FD, flexideposit

Empty nestSr. citizen

Reducedincome

Social security & reverse mortgage loan

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PRODUCT A product is anything that can be offered

to a market for attention, acquisition, useor consumption that might satisfy a wantor need

PRODUCT PERSONALITY

THE CORE features

THE ASSOCIATED FEATURESTHE BRAND NAME & LOGOTHE PACKAGE AND LABEL

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PRODUCT PLANNING

The process of product planning consistsProduct Line, Product Mix, Branding,

Packaging and New product development.

PRODUCT LIFE CYCLEIntroduction, Growth, Maturity, DeclineThe product Life cycle operates at threelevels product level, product sub category,brand level.

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0

510

15

20

25

30

35

40

45

50

Intro. Growth Maturity Decline

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NEW PRODUCT DEVELOPMENTIdea ScreeningConcept TestingProduct DevelopmentTest MarketingCommercial Launch

DIVERSIFICATIONConcentric DiversificationHorizontal Diversification, forward/backwardConglomerate Diversification- Additional

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BRANDINGLine ExtensionBrand ExtensionMulti brandsNew Brands

PACKAGINGPrimary PackageSecondary PackageShipping Package

LABELLINGIdentify the product or brandDescribing informationPromoting the product through 'attractivegraphics'

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PRICING

Price is the amount charged for productor services or sum value of all the valuesthat consumers exchange for the benefits

or having or using the product or serviceDifferent forms - Goods bought, hirecharges, tution feesDynamic Pricing - Varying pricesFlexibility

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OBJECTIVE OF PRICINGProfitSurvivalMarket ShareCash Flow

Status QuoProduct QualityCommunicating ImageShort term/Long term

Consideration for setting PRICINGCost BasedValue Based

Competition Based

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PRICING METHODSMark up Pricing :Std. mark + Total cost

Absorption cost Pricing : Margin+ Total CostTarget Return Pricing : Return Rate + costMarginal cost Pricing : Full variable cost + varying Fixed cPerceived Value Pricing : Customer satisfactionValue Pricing :to make feel High value at low priceGoing Rate Pricing : Market price

Auction Type Pricing :English Auctions :One seller many buyer

Dutch Auctions :Many seller one buyer or vice versaSealed Bid Auctions: one bid by one seller withoutknowing others price

Group Pricing . : concession for bulk purchase

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Functions of distribution channelsMarket informationPromotion

ContactMatchingNegotiationProduct informationPhysical distributionFinancing

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Characteristics banking productsIntangibilityInseparability

VariabilityPerishability

Client relationshipBranches & Other channelsTele-banking

ATMsComputerizationPlastic Cards

Virtual branches and automated video bankin

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Intermediaries in banking servicesDSA

Automobile DealersMerchant establishmentsPhysical distribution

Transportation

WarehousingInventoryTasks of physical distribution

Forecasting

Order processingInventory management StorageProtective packaging

Transportation

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PromotionRole of promotion

PersuasionInformReminding

Reinforcing

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Promotion mix

AdvertisingPersonal

selling

SalesPromotion

PublicRelations

DirectMarketing

Blended Mix of Promotion Tools

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Promotion mix strategiesPush strategyPull strategy

Factors influencing promotion mixTypes of product/marketBuyers readiness stagePLC stage

Promotion mix integration