Marketing Strategy and Service Marketing

8/8/2019 Marketing Strategy and Service Marketing

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MARKETING STRATEGY

Marketing strategy is a method of focusing an organization's energies and

resources on a course of action which can lead to increased sales and dominance

of a targeted market niche. A marketing strategy combines product development,

promotion, distribution, pricing, relationship management and other elements;

identifies the firm's marketing goals, and explains how they will be achieved,ideally within a stated timeframe. Marketing strategy determines the choice of

target market segments, positioning, marketing mix, and allocation of resources. It is

most effective when it is an integral component of overall firm strategy, defining

how the organization will successfully engage customers, prospects, and

competitors in the market arena. Corporate strategies, corporate missions, and

corporate goals. As the customer constitutes the source of a company's revenue,

marketing strategy is closely linked with sales. A key component of marketing

strategy is often to keep marketing in line with a company's overarching mission

statement[4].

Tactics and actions

A marketing strategy can serve as the foundation of a marketing plan. A marketing

plan contains a set of specific actions required to successfully implement a

marketing strategy. For example: "Use a low cost product to attract consumers.

Once our organization, via our low cost product, has established a relationshipwith consumers, our organization will sell additional, higher-margin products and

services that enhance the consumer's interaction with the low-cost product or

service."

A strategy consists of a well thought out series of tactics to make a marketing plan

more effective. Marketing strategies serve as the fundamental underpinning of

marketing plans designed to fill market needs and reach marketing objectives [5].

Plans and objectives are generally tested for measurable results.

A marketing strategy often integrates an organization's marketing goals, policies,

and action sequences (tactics) into a cohesive whole. Similarly, the various

strands of the strategy , which might include advertising, channel marketing, internet

marketing, promotion and public relations can be orchestrated. Many companies cascade

a strategy throughout an organization, by creating strategy tactics that then



become strategy goals for the next level or group. Each one group is expected to

take that strategy goal and develop a set of tactics to achieve that goal. This is

why it is important to make each strategy goal measurable.

Marketing strategies are dynamic and interactive. They are partially planned andpartially unplanned.

THE 7PS OF MARKETING

The 7ps of marketing are tools or ingredients that the marketing manager mixes

in the right proportion required by the consumers. A good understanding and

manipulation of the marketing mix is the beginning of the success or failure of

your marketing strategy. Now lets take a brief look at the marketing mix:

Product: Your product is crucial. People say that a good product will sell on its

own, and, in my humble opinion, it's very true. If your product is really great and

benefits your clients, they'll spread the good news. They'll tell their friends and

family. They'll even tell total strangers. They'll be very excited to share your brand

and name with others causing you to have a great windfall of cash and plenty of

business.

Price: Price tends to be a little tricky. Many people are often afraid to charge what

they really should and constantly offer discounts. Let me tell you something:

these are both very big no-no's that you should avoid like a plague. Charge what

you're worth and never discount without a strong reason. Therefore, price is the

amount of money that customers have to pay to obtain the product.

Place: You remember the old "location, location, location"? This is exactly what

this p's about. There is basically no point in doing any marketing if people can't

see it, right? So make sure that you're noticed. Make sure that people you're

trying to get to buy from you actually know you exist by selecting the right place.

Place also means all the company activities that make the product available totarget consumers i.e. the physical distribution channels etc. Promotion:-

Promotion always comes last, because you should only start promoting your

business once you have all the other ps in place. What are you going to tell people

to encourage them to buy from you and how you're going to do it? Answer these

two questions and you'll have a great plan for your promotion ready to use.



People: An essential ingredient to any service provision is the use of appropriate

staff and people. Recruiting the right staff and training them appropriately in the

delivery of their service is essential if the organization wants to obtain a form of

competitive advantage. Consumers make judgments and deliver perceptions of

the service based on the employees they interact with. Staff should have the

appropriate interpersonal skills, aptitude and service knowledge to provide the

service that consumers are paying for. Many British organizations aim to apply for

the Investors In People accreditation, which tells consumers that staffs are taken

care of by the company and they are trained to certain standards.

Process: Refers to the systems used to assist the organization in delivering the

service. Imagine you walk into Burger King and you order a Whopper Meal and

you get it delivered within 2 minutes. What was the process that allowed you toobtain an efficient service delivery? Banks that send out Credit Cards

automatically when their customers old one has expired again require an

efficient process to identify expiry dates and renewal. An efficient service that

replaces old credit cards will foster consumer loyalty and confidence in the

company.

Physical Evidence: Where is the service being delivered? Physical Evidence is the

element of the service mix which allows the consumer again to make judgmentson the organization. If you walk into a restaurant your expectations are of a clean,

friendly environment. On an aircraft if you travel first class you expect enough

room to be able to lie down!

Physical evidence is an essential ingredient of the service mix; consumers will

make perceptions based on their sight of the service provision which will have an

impact on the organizations perceptual plan of the service.

MONITORING AND EVALUATION: This help you know how effective ur strategy is

performing in practice, it can also help inform your future mkting strategy. A

simple approach is to ask each new customer how they heard about ur product.

NOTE: Once you have decided on urn muting strategy, draw up a muting plan that

sets out how you intend to execute that strategy and evaluate its success. The

plan should be constantly reviewed and if necessary, updated so you can respond



quickly to changes in customers needs and attitude in urn industry.

UNDERSTANDING UR STRENGHT AND WEAKNESSES

STRENGHT: - Personnel and flexible customers services Special features or benefits

of that urn pet offers Special knowledge or Skill etc.

WEAKNESSES:-Limited financial resources, lack of an established reputation,

inefficient accounting system.etc

OPPORTUNITY: - Increases demand from a particular mkt sector, using the internet to

reach new mkt, new technology that allows you to improve product quality.

THREAT: - The emergence of a new competitor, more, sophisticated, attractive or

cheaper version of ur product or service. New legislation increasing ur cost, adownturn in the economy, reducing overall demand.

However, having done the SWOT analysis, you can then measure the potential

effects each element may have on ur marketing strategy. E.g. If new regulation

will increase the cost of competing in a market where u are already weak, you

might want to look for other opportunities. On the other hand, if you have a good

reputation and your key competitor is struggling, the regulation might present the

opportunity to push aggressively for new customer.

Types of strategies:

Marketing strategies may differ depending on the unique situation of the

individual business. However there are a number of ways of categorizing some

generic strategies. A brief description of the most common categorizing schemes

is presented below: Strategies based on marketing dominance- In this scheme,

firms are classified based on their market share or dominance of an industry.

Typically there are four types of market dominance strategies:

Leader

Challenger

Follower



Nicher.

Real-life marketing

Real-life marketing primarily revolves around the application of a great deal of

common-sense; dealing with a limited number of factors, in an environment of

imperfect information and limited resources complicated by uncertainty and tight

timescales. Use of classical marketing techniques, in these circumstances, is

inevitably partial and uneven.

Thus, for example, many new products will emerge from irrational processes and

the rational development process may be used (if at all) to screen out the worst

non-runners. The design of the advertising, and the packaging, will be the output

of the creative minds employed; which management will then screen, often by

'gut-reaction', to ensure that it is reasonable.

For most of their time, marketing managers use intuition and experience to

analyze and handle the complex, and unique, situations being faced; without easy

reference to theory. This will often be 'flying by the seat of the pants', or 'gut-

reaction'; where the overall strategy, coupled with the knowledge of the

customer which has been absorbed almost by a process of osmosis, will

determine the quality of the marketing employed. This, almost instinctive

management, is what is sometimes called 'coarse marketing'; to distinguish it

from the refined, aesthetically pleasing, form favored by the theorists.

MARKETING STRATEGIC PLANNING

What is Strategic Marketing Planning?

Every Chief Executive Officer and marketing executive periodically faces urgent

strategic marketing challenges that can affect the future of the company for manyyears. Frequently these decisions are made without having an opportunity to

study the situation and make the best possible decision.

Strategic planning is not a panacea for ills. It will not automatically ensure success.

Sometimes one will make mistakes, assume incorrectly and make incorrect



decisions stemming from this. The alternative, not to undertake any strategic

planning, is even more dangerous. If one does not do any planning, one is

planning to fail.

A better approach is to perform an annual comprehensive review of markets andopportunities, then make long-term strategic decisions without the distractions of

day-to-day marketing and sales activities. Daily decisions then fit into the

company's overall strategic marketing goals.

It's important for a strategic marketing planning process to look at the company

from the customer's point of view by asking questions that have a long time

horizon, such as:

1. What needs or problems cause customers to consider buying from our

company?

2. What improvements in the customer's personal or business life can we enable

or improve?

3. Which customer market segments are attracted to our company or products?

4. Which customer motivations or values lead people to decide to purchase our

products?

5. What changes or trends in our customer base are affecting their general

interest or attraction to products like ours?

In view of the above, according to Philip Kotler and Gary Armstrong in Principles

of Marketing Seventh Edition defined Strategic Marketing Planning as the process

of developing and maintaining a strategic fit between the organizations goals and

capabilities and its changing marketing opportunities.

It follows therefore, that strategic planning set the stage for the rest of the

planning in the firm. It relies on defining a clear company mission, setting

supporting company objectives, designing a sound business portfolio, and

coordinating functional strategies. Put in another way, at the corporate level, the

company first defines its overall purpose and mission. This mission then is turned



into detailed supporting objectives that guide the whole company. Next,

headquarters decides what portfolio of business and product is best for the

company and how much support to give each one. In turn, each business and

product unit must develop detailed marketing and other departmental plans that

support the companywide plan. Thus strategic marketing planning occurs at the

business levels. Marketing strategic planning support company strategic planning

with more detailed planning for specific marketing opportunity.

Strategic vs. Tactical Marketing Plans

What makes a strategic marketing plan different from a more tactical marketing

communications plan? The key difference is the focus on meshing overall

customer situations with your overall company direction.

For example, the trend toward increased use of outsourcing to both domestic and

global vendors creates markets for those suppliers. However, those vendors need

to have a strategic marketing vision in order to see these new markets early

enough to take advantage of the opportunity.

For consumer marketers, this means using geographic and demographic

segmentation, as well as psychographic segmentation (i.e., values, attitudes,

lifestyles), and product usage motivations.

For example, the aging population bubble creates a general increase in demand

for a wide range of products. It also creates market niches that are large enough

to make product development and marketing worthwhile.

The same shifts can also reduce demand for other products. These long term

shifts in markets are frequently misinterpreted as short-term competitive

pressures or fluctuations in the economy. Instead of increasing advertising or

sales efforts, it might be better to abandon a declining market.

Without a strategic marketing plan a company could waste resources or miss an

opportunity.

What's the cost of missing an opportunity? Of course, it's impossible to know at

the time the opportunity is missed, but years later it will become clear when a



competitor opens a new factory or enters a new market -- and their revenue

grows faster than their competitors.

In other words, the annual cost of a strategic marketing plan review is miniscule

compared to the revenue, market share, and profitability it can generate.

Developing the Strategic Marketing Plan

The strategic marketing plan process typically has three stages:

1. Segment the market

Geographic

Demographic

Psychographic

Behavior

2. Profile the market segments

Revenue potential

Market share potential

Profitability potential

3. Develop a market segment marketing strategy

Market leader or product line extension

Mass marketing or targeted marketing

Direct or indirect sales

After analyzing market segments, customer interests, and the purchase process,

it's time to create the strategic marketing plan. The strategic marketing plan

document usually includes:

1. Executive Summary: present a brief overview of the proposed plan for quick



management review.

2. Current market Situation Analysis - Where is the company now?

a. Market Characteristics

b. Key Success Factors

c. Competition and Product Comparisons

d. Technology Considerations

e. Legal Environment

f. Social Environment

3. Threats and Opportunities: outline ur threat and opportunity that might

impact the product. Here also u perform the SWOT analysis

4. Marketing Objectives and Issues: - Where does management want the

company to go?

a. Product Profile

b. Target Market /mkt shares

c. Target Volume in Dalasi and/or Units and the issues that will affect these

objectives.

5. Marketing Strategies - What should the company do to achieve its objectives?

Present a broad marketing approach that will be used to achieve the plan

objectives.

a. Product Strategy

b. Pricing Strategy

c. Promotion Strategy

d. Distribution Strategy



e. Marketing Strategy Projection

f. Physical evidence Strategy

g. Process strategy

h. Using people/staff as a strategy

6. Action programs: specify what will be done, who will do it, when it will be

done, how much it will cost.

7. Budget: A projected profit and loss statement that forecasts the expected

financial outcomes from the plan.

8. Control: Indicates how the progress of the plan will be monitored.

Benefiting from a Strategic Marketing Plan

The top-down process of developing a strategic marketing plan helps insure that

all tactical marketing programs support the company's goals and objectives, as

well as convey a consistent message to customers.

This approach improves company efficiency in all areas, which helps improve

revenue and market share growth, and minimizes expenses -- all of which lead to

higher profitability

Marketing Appreciation

Making or Breaking Good Business Glue

Think about what it is that you do for a living. Unless you have been hiding under

a rock for the last few years, you will know that whatever product you sell, or

service you provide, your potential customer can find the same product or serviceonline or elsewhere. Have you "Ever heard of Google? Today we're living in a

Google world. Think about it; whatever product or service you sell or represent can

be found online better and cheaper than you offer it, in twenty seconds and two

mouse clicks. So what is it, I ask, that keeps your customers loyal to you and

your company? Is there really a way, a practice that would help you put the



"high touch" back into this "high tech" world? Yes... It's called Appreciation

Marketing. Building better and stronger relationships with your inner circle and

your client base is more important today than it ever was before. Not only is it

fundamentally wise, but where your present and future success is concerned, I

think it's essential.

So why would anyone ever do business with you? The answer is simple because they like

you. Because they have a relationship with you.

In our fast-paced and automated world many business people and service providers are now

desensitized and have fallen for the e-myth that an e-mail or a text message is a sufficient way to say

thank you. (if any appreciation is shown at all )

If you have a business of any kind, you know how important keeping a customer

is. Basically, if you don't have customers you don't have a business. It is said thatit is much easier to keep a customer than to gain a new one. Why is that? Usually,

when someone has decided to do business with you, you have created some

amount of trust with them. You've developed a rapport with them. That's good!

But so many times, when we "close the sale" we get so excited that we forget

about the customer! We are so caught up in making the sale that we forget that

the sale is only the beginning. The beginning of what? The Beginning of a Long

Relationship! That is where Appreciation Marketing comes in. That is when "make

or break" happens.

Appreciation Marketing is the glue that holds your business together. It is the

personal touch that sets you and your business apart from the competition. It is

what causes your customers to loyally keep coming back to you and on top of

that, send you great referrals! In this fast paced world we live in, when was the

last time you received a real thank you note in the mailbox when you made a

purchase? I'd say that showing true appreciation has become a lost art.

PLANNING APPRECIATION MARKETING SYSTEM

Tips for marketing Appreciation

ySend a thank you note in the mail after a sale or a meeting.

ySend a thank you gift when someone sends you a referral.



ySend "items of value" on a regular, planned basis. These should not relate

to your product or business. It could range from useful, simple tips of about

almost anything, to coupons, or informative articles. It could be a

recommendation to a great business or service.

ySend birthday cards to your customers and contacts. That will really make

their day and set you apart!

Appreciation marketing happened in 2 ways:-

ySpontaneously - by being open, listening, and in tune to people.

yAutomatically - by having a regular system in place that happens whether

you are at work or at the beach.

Now that you know the importance of appreciating your customers

spontaneously and regularly, it's important to have in place actual systems

that will help you do this.

Sending automatic emails is a good way to keep in touch and show appreciation

to your customers. Set up a system that sends out messages automatically. You

can do this through a system like I Contact . You can write a whole years worth of

messages in one day if you want to and set the system up to send them out on

the exact days you choose. But it's so easy to delete a message by a quick click of

the mouse. Emails should only support the main system you use. And that is the

next point...

Find a system that lets you set up a contact manager, remind you when birthdays

and other important dates are coming up, has a huge selection of cards and gifts,

let's you create your thank you cards and other cards of appreciation, let's you

type it and select the customers to send it to. I t is good to have an Appreciation

Marketing system that prints, stuffs, and mails your cards and gifts very

inexpensively.

The key is to just start doing it! The fact of the matter is, we do appreciate our

customers! So why not show it! Besides, our business depends on it, because our



goal is to build long lasting and loyal customers and a continual flow of highly

qualified referrals. Appreciation marketing could be the very idea that either

makes or breaks your business. ³Whether you are an entrepreneur, manager,

teacher, parent, coach, or simply a friend, if you want to be successful with other

people, you must master the art of appreciating others.´

Note:-That in today¶s business world excellent customer services is not enough.

We must go beyond customer services and build powerful, productive and

profitable relationship. Though Traditional marketing is important, Recognition

and Appreciation marketing will beat self promotion every time. Therefore instead

of spending thousands/millions of Dalasi to capture lead, generate referrals,

increase business or buy customer loyalty, why not think twice ....all that you ever

need is a little human touch------CALLED APPR ECIATION MARK ETING.

IMPORTANCE OF APPR ECIATION MARK ETING

yAppreciation marketing wins over self promotion every single time.

yAppreciation. Marketing garner customer loyalty better.

y Appreciation. Marketing keeps the ball of your business rolling

yAppreciation. Marketing teaches humility as pie on top of the menu

yAppreciation. Marketing teaches patience as a hallmark

yAppreciation. Marketing makes you to know that GRATITUDE should be an

ATTITUDE and this is the breakfast ritual of champions.

y Appreciation. Marketing makes you see the good in others and situations

yAppreciation. Marketing leads to quality referrals.

yAppreciation. Marketing leads to multi-level businesses

yAppreciation. Marketing teaches how to listen to customers views.



MANAGING THE MARK ETING MIX

Once the company has decided on its overall competitive marketing strategies, it is ready to begin

planning the details of its marketing mix. The marketing mixes are set of controllable tactical marketingtools that the firm blends to produce the response it wants in the target market. The marketing mixes

consist of everything the firm can do to influence the demand for its products. The many possibilities can

be collected into seven group of variable known as the 7p¶s: At this point, the company wants to design

and put into action the management of marketing mix that will best achieve its objectives in its target

markets. Managing the marketing mix involves four management functions: viz²analysis,

planning, implementation, and control. The company first develops overall strategic plans. The

company-wide strategic plans are then translated into strategic marketing plan and other plans for each

division, and products.

Through implementation, the company turns the strategic and marketing plans into actions that will

achieve the company strategic objectives. Marketing plans are implemented by people in the marketingorganization who work with those both inside and outside the company. Control consists of measuring

and evaluating the result of marketing plans and activities and taking corrective action to make sure

objectives are being reached.

Marketing analysis: - This provides information and evaluations needed for all of the other marketing

activities. Besides, managing the marketing mix/functions begins with a complete analysis of the

company¶s situation. The company must analysis its market and marketing environment to find attractive

opportunities and to avoid environmental threats. It must analyze company strength and weaknesses, as

well as current and possible marketing actions, to determine which opportunities it can best pursue.

Marketing analysis feeds information and other inputs to each of the other marketing functions.

Managing the marketing mix therefore, is the central task of marketing professionals. As said earlier

above, the marketing mix is the set of marketing tools ± often summarized as the µseven Ps¶: the product,

its price, promotion, place, people, physical evidence and process that the firm uses to achieve its

objectives in its target market(McCarthy, 2001). The design of the marketing mix normally forms the core

of all marketing functions and the arms that support them. The central assumption is that if marketing

professionals make and implement the right decisions about the features of the product, its price, and how

it will be promoted and distributed, then the business will be successful. Unfortunately, marketers have

ignored the tautological nature of this view. What is the µright¶ decision when it comes to making

these choices concerning the marketing mix? Most marketing professionals would answer that the right

marketing mix is the one that maximizes customer satisfaction and results in the highest sales or market

share. But a moment¶s reflection reveals the fallacy of this approach. Customer satisfaction and sales can

always be increased by offering more product features, lower prices than competitors, higher promotional

budgets and the immediate availability of the product, of outstanding customer service and support. But

inadequate margins and excessive investment requirements would make this strategy a quick route to

bankruptcy. Some writers have tried to get around this problem by stating that the objective is to devise a

marketing mix that provides superior customer satisfaction at a profit to the company.

Marketing analysis includes a look at:



The Product/services in terms of: Brand, Quality, Design, Features, Variety, Packaging, Service, Support,

Guarantees and also bearing in mind the following questions:

What does the customer want from the product/service? What needs does it satisfy?

What features does it have to meet these needs?

Are there any features you've missed out?

Are you including costly features that the customer won't actually use?

How and where will the customer use it?

What does it look like? How will customers experience it?

What size(s), color(s), and so on, should it be?

What is it to be called?

How is it branded?

How is it differentiated versus your competitors?

What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).

A look at Place in terms of: Distribution channels, Coverage, Assortments, Locations, Inventories, Transport and

bearing in mind then following questions:.

Where do buyers look for your product or service?

If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Ordirect, via a catalogue?

How can you access the right distribution channels?

Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples

to catalogue companies?

What do you competitors do, and how can you learn from that and/or differentiate?

A look at Price in terms of: List price, Discounts, Allowances, Trade margins, Payment terms, Credit and bearing

in mind then following questions:-.

What is the value of the product or service to the buyer?

Are there established price points for products or services in this area?

Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a

small increase be indiscernible, and so gain you extra profit margin?



What discounts should be offered to trade customers, or to other specific segments of your market?

How will your price compare with your competitors?

A look at Promotion in terms of: Sales force, Direct marketing, Sales promotion, Advertising, Public relations,

Exhibitions, Internet and also bearing in mind the following questions:

Where and when can you get across your marketing messages to your target market?

Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using

direct marketing mail shot? Through PR? On the Internet?

When is the best time to promote? Is there seasonality in the market? Are there any wider

environmental issues that suggest or dictate the timing of your market launch, or the timing of

subsequent promotions?

How do your competitors do their promotions? And how does that influence your choice of promotional

activity?

A look at people: An essential ingredient to any service provision is the use of appropriate staff and

people. Recruiting the right staff and training them appropriately in the delivery of their service is

essential if the organization wants to obtain a form of competitive advantage. Consumers make

judgments and deliver perceptions of the service based on the employees they interact with. Staff

should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service

that consumers are paying for. Many British organizations aim to apply for the Investors In People

accreditation, which tells consumers that staffs are taken care of by the company and they are trained

to certain standards.

A look at process: Refers to the systems used to assist the organization in delivering the service. Imagine

you walk into Kairaba Kings restaurant and you order a Whopper Meal and you get it delivered within 2

minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send

out Credit Cards automatically when their customers old one has expired again require an efficient

process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster

consumer loyalty and confidence in the company.

A look at physical Evidence: Where is the service being delivered? Physical Evidence is the element of

the service mix which allows the consumer again to make judgments on the organization. If you walk

into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first

class you expect enough room to be able to lie down. Physical evidence is an essential ingredient of theservice mix; consumers will make perceptions based on their sight of the service provision which will

have an impact on the organizations perceptual plan of the service.

All the market analysis is focused on the TargetMarket and aligning it to the company objectives

with a view of increasing customer services @ profit.



IMPLEMENTING MARKETING

Your strategic marketing plan must do more than just what you want or intend to happen. It must

describe each step required to make sure that it happens.

The plan should therefore include a schedule of key tasks. This sets out what will be done, and by when.Refer to the schedule as often as possible to avoid losing sight of your objectives under the daily

workload.

Resources

It should also assess what resources you need. For example, you might need to think about what kind of

vehicles u need to carry out ur plans, how many are on ground and how this will affect your project. You

might also need to look at how much time it takes to sell to customers and whether you have enough

salespeople.

Cost

The cost of everything in the plan needs to be included in a budget. If your finances are limited, your

plan will need to take that into account. Don't spread your marketing activities too thinly - it is better to

concentrate your resources to make the most of your budget. You may also want to link your marketing

budget to your sales forecast.

Control

As well as setting out the schedule, the plan needs to say how it will be controlled. You need an

individual who takes responsibility for pushing things along. A good schedule and budget should make it

easy to monitor progress. When things fall behind schedule, or costs overrun, you need to be ready todo something about it and to adapt your plan accordingly.

From time to time, you need to stand back and ask whether the plan is working. What can you learn

from your mistakes? How can you use what you know to make a better plan for the future?

It is important for a marketing plan to:

set clear, realistic and measurable targets - for example, increasing sales by 10 per cent

include deadlines for meeting targets

provide a budget for each marketing activity

specify who is responsible for each activity

Make sure you think through each of your objectives logically. For example, you might set a target for

the number of new enquiries. But if you don't provide the resources and training to follow up

these enquiries and turn them into sales, you will have increased costs without any benefits.



Link to your strategy

Assess the business environment to identify the opportunities and threats that you face. Look for where

you can capitalize on your strengths or where you need to overcome a weakness.

All parts of your business must work together. For example, if you have limited cash flow you should

avoid seeking large orders from customers who demand extended credit or that will involve you in

heavy, up-front costs.

Remember to focus on your long-term strategy. Reducing customer service might boost short-term

profits, but next year you might not have any customers left.

Make it happen

A plan will not happen by itself. You need to make someone responsible for monitoring progress and

chasing up overdue activities. Reviewing progress will also help you learn from your mistakes so that you

can improve your plans for the future.

Banks today are operating in a highly competitive and rapidly changing environment. In the

changing economic scenario, a professional approach to business development is essential and the

survival of a banking institution depends on its ability to take up challenges coming up in the

environment. Developing business through marketing of banks services is one of the crucial areas

which need attention of the bankers to ensure profitable survival.

BANK ING MARKETING : CONCEPTS

The role of marketing in an organizations existence and growth need not be overemphasized intodays competitive environment. According to Peter Drucker, marketing is so basic that it cannot

be considered a separate function. It is the whole business seen from the point of view of its final

result, that is, customers point of view. Survival of an organization depends upon its ability to

acquire resources necessary for its sustenance. One of the modes of survival, as observed by Philip

Kotler, is exchange, whereby an organization creates and offers goods and services that are able

to attract and satisfy the purchasers, in exchange of its value. This option can be gainfully exercised

only if the organization develops the capacity to produce the needed goods and services. The

organizations should be geared to identify the customer needs and preferences which are subject to

change over a period of time.

One of the policy issues discussed in marketing is the ultimate objective of the marketing efforts of

an organization. The general belief is that the objective of marketing is to maximize the markets

consumption of your products and services. However, it would be desirable to set the goal at

maximizing consumer satisfaction, rather than consumption. The organization, in the long run, is

likely to benefit from a customer oriented approach to marketing. The approach, in other words,

should ensure strong foundation for the institutions existence, because the concept of marketing



has its origin on the premise that man is a creature of needs and wants. And there is constant

effort on his side to satisfy his needs. Further, his needs and wants keep changing with time,

circumstances and the immediate environment in which he is operating. Marketing management

essentially involves the efforts to achieve the need satisfaction of the target group the institution is

trying to serve.

There are various philosophical aspects which can give conceptual orientation to marketing

personnels approach. The selling concept assumes that the consumers will either not buy or not

buy enough of an organizations products unless the organization makes a substantial effort to

stimulate their interests in its products. This becomes all the more relevant when the

organizations are functioning in a rich environment of competitors. Product Concept in

marketing philosophy assumes that the consumers will favor those products that offer best quality

for the price, while production concept assumes that consumers will favor those products which

are available and affordable. An organizations task, therefore, should be to serve target markets in

a way that produces not only want satisfaction, but long-run individual and social benefit as the key

to attracting and holding customers.

The need for a well defined institutional framework within the organization to manage the

marketing efforts should be reckoned by any business concern. It is, therefore, essential that the

institution constitutes a marketing wing which will take care of the marketing function of the

organization. This compartment has to work smoothly with other segments of the organization.

Acquiring modern marketing orientation requires support from top management, a committed task

force, constant review of strategies and a consultants help if considered necessary. The marketing

wing should be adequately supported by a Marketing Information System, which is a critical

element in effective marketing. The information system is the channel linking external environment

with the executives of the institution.

BANK MARKETING :

Marketing philosophy, in any context, refer to the need satisfaction of the institutions clients. The

basic step involves identifying the needs of the customers and developing products to suit their

needs or modifying the existing products accordingly. It also requires the need for foreseeing wants

of the customers in future and developing suitable products of their requirement. Deryk Weyer of

Barclays Bank attempted a comprehensive definition forBank Marketing. According to him, it

consists of identifying the most profitable markets now and in future; assessing the present and

future needs of customers; setting business development goals and marketing plans to meet them

and managing the various services and promoting them to achieve the plans, all in the context of a

changing market environment. Successful marketing in a bank calls for commitment at all levels to

the task defined in this regard. Achieving higher business standards and operational performance

through marketing of banking services should be one of the directional goals of the organization.

In view of the competitive surroundings in which a bank is compelled to function, there is need for



formulation of a strategic action plan for its marketing efforts. A marketing strategy, in general, is a

systematic, appropriate and feasible set of concepts and actions through which the institution

strives to achieve its goal of customer satisfaction and profitable survival. Strategy should be

designed after taking into account the strengths and weaknesses of the organization. For example, a

bank or branch with clientele from various segments could think of market penetration by offering

the existing range of services to existing customers. On the other hand, a bank which is having

expanding business through new branches or branches which are not facing acute competition

could think of Market Development by offering the existing services to new customers. However,

the real marketing challenges arise from the institutions capability to design new product range for

their customers of various segments. The strategy, therefore, lies in increasing the client base and

consolidating the relationship with existing and new clients through existing or newly developed

products.

The operational aspects of strategies for marketing contain actions such as development of

Relationship Banking, designing of effective delivery system, ensuring customer-oriented services

and modifying the system into a personal selling organization. In western banking, officials assigned

the job of personally contacting the customers and offering the services at doorsteps had been able

to make a significant impact on the development of business for their organizations. The importance

and role of personal selling and customer contacts in the marketing efforts of a banking institution

stem from the success of such efforts in many banking institutions all over the world.

The implementation of the strategies is as crucial as its design in ensuring successful marketing. The

communication of the adopted strategies to different tiers of the institution and ensuring of its

proper understanding by personnel at all levels is essential for successful implementation of the

strategies. The communication becomes difficult in organizations which have substantial branch

network spread over a large geographical area. The field staff at the branch level should be trainedto implement the strategies after modifying them to suit the environment in which they are

operating. The knowledge of the local environment, demographic features and cultural aspects is an

essential requirement for the field staff involved in marketing efforts for the organization.

RURAL PSYCHOLOGY AND BANK MARKETING :

Banks have a great role to play in the development of rural areas and improvement in rural life. In

order to play this role effectively, the banker should have fair knowledge of the socio-psychological

aspects of the rural society he is serving. First of all, the banker should be aware of the Human

Groups and Institutions in the area of operation. This means that one should be aware of the role

of agriculture in the rural economy, cultural aspects of the society, community aspects, family and

farm patterns, institutional facilities, etc. Secondly, the Process of Change, if any, taking place in

the rural scenario, should be known to him. The general changes that take place in the rural

scenario include urbanization, industrialization, migration, social mobility, changes in values, farm

structure, etc. Thirdly, there could be Planned Changes, generally emanating from administration



of voluntary organizations, such as resettlement, land reforms, community development,

agricultural extension work, education etc, of which the field staff should be familiar. Fourthly, a

general idea of the status of various development projects under execution, welfare measures,

schemes under implementation, etc. will help the banker to have a complete picture of the rural

society in which he is operating. The knowledge on all these aspects of the rural society will help the

banker in choosing the right approach to the clients in rural areas since education of the people on

the services offered is an integral part of effective marketing. The psychology of the rural people

should be properly understood. It is only normal that the people in rural areas do not adopt a

practice immediately. In fact, the tendency of an illiterate person is to distrust the same. The

banking habits are no exception to this. But subsequently, on being properly educated, he may

develop interest and would like to know more about. If the information imparted convinces him that

the idea is something useful, he enters the t third stage of thinking about the possibility of accepting

the idea for his benefit. Thus, there are different stages in the adoption process of the rural folks,

which should be clearly understood by the field personnel.

The cultural pattern of the rural folks influences their economic behaviour considerably. Some rural

communities may have a modern pattern of culture. These communities would be ever willing to

try something new if they are convinced that it can improve their present position. Dissemination of

information on banks services become easy and the results are achieved at a faster pace with such

groups. On the other hand, groups characterized by traditional pattern of culture are generally

opposed to change. Their main concern will be to preserve what has been the tradition and resists

intrusion in to their ways of living. Effective marketing becomes difficult while dealing with such

groups. Members of the group with a modern pattern of culture tend to be individualistic, while

system of social control will be more in groups with traditional pattern. In such groups, where

tradition is emphasized, a far reaching change in attitude towards anything, especially banking

habits can be brought about only with the support of their Clan Leaders. The clan leaders are the

people whom the rest of the community will listen to or whose approval, explicit or otherwise, the

people look forward to for accepting anything new. It is quite possible that these leaders are not

formal leaders of the group such as political leaders, but could be an elderly person or a religious

leader of the community trusted by the general public. Success in approaching such rural societies

definitely lies in understanding the rural psychology in this regard and identifying such influential

individuals from the rural masses. Any effort, therefore, to popularize the banking services in rural

areas call for absolute knowledge about the social structures, the culture, the functioning of the

rural groups and the nature and type of their leadership.

Changes are taking place in contemporary rural society, though at a slower pace. The elements of

dynamism of stability are existent in the rural environment, in the case of urban areas, though not

operative in identical degrees or patterns. The changes, however, have been generally confined to

changes in the agricultural pattern, community aspects and some general changes in the economic

scenario. These changes, however, generate scope for institutional services in various segments of

the rural economys operation and the banking institutions should capitalize on the same through

deep penetration into rural households. This can be made possible only if the banks personnel are



aware of the changes taking place in the rural environment and design their approach to the

situation in a skillful manner. Modifying the services to suit the dynamic environment is considered

as the backbone of marketing efforts. However, while designing or modifying, it should be ensured

that the products are not inconsistent with basic attitudes and cultural values of the people.

Rapidity of acceptance of innovations is a function of many factors, including the nature of

innovation and its relationship to existing cultural patterns.

Banking institutions are vehicles of economic development. According to Rostow, economic theories

and development concepts should be linked to sociological and psychological elements, if it is to be

maximally useful. Gunar Myrdal had opined that attitudes and institutions play a significant role

in rapid economic development. Psychology, as a science of human behaviour emphasizes the

influence of human factors which accelerate or impede the rapid acceptance of innovative ideas.

Marketing efforts in the rural areas should be designed with proper emphasis on these influential

factors.

BANK MARKETING : R OLE OF PER SONNEL

The marketing strategy for rural areas, by and large, assigns a responsible role on branch officials in

bringing out socio-economic transformation of the rural society. There is need for a total marketing

approach from the personnel to penetrate all levels in all areas of banking operations. Efforts need

to be made to design and launch suitably tailored services to meet its changing needs of the rural

population. The personnel attempting marketing in rural areas should be able to establish an

organic link with rural masses. They should be committed to the cause of rural upliftment and

should implement in totality the market strategies formed for the purpose. The knowledge of the

command area of the branch and the ability to identify potential customers and their financial needs

are pre-requisites for the success of marketing strategies. This calls for the need of training the staff

with sharp focus on improving the knowledge of the bank staff about the rural atmosphere and the

skills necessary to deal with the rural customers. There is also need for developing a sense of

belonging towards the organization, customers and the society. The field staff, to the extent

possible, should know the language and dialect of the people and should be able to communicate in

a manner which is appealing to the people. The organization on their part, therefore, should take

adequate care in identifying the right people for this specific job. They should also foster innovative

and creative approach in working to bring in new and original ideas and develop talent. There is also

need for rationalization of the work load for the personnel in the rural branches to enable them to

give adequate attention to the villagers and their requirements. Further, the institutions need tomotivate their personnel for popularizing the services in rural areas. Every member of the staff is a

salesman of the banks services and an ambassador of the institution among people. Marketing

efforts made by the personnel and its effect on business development should be appreciated and

rewarded by the bank management.

The bank personnel, as a matter of strategy, should try to find a place in the hearts of the rural folks.



Role of personal influence on acceptance of an organization or services in the rural scenario

should be kept in mind. The personal influence refers to the effect of statements made by one

person about the bank or its services on another persons attitude towards the institution. In a

village, people generally know one another and have time and patience to converse with one

another. Opinion on the institution and its services are discussed among local people. A satisfied

customer always acts as an ambassador of goodwill for the bank and brings clientele through his

own efforts. The personnel, therefore, should strive for customer satisfaction as a marketing

strategy, if not as the objective of the organization.

In conclusion, it may be understood that the success of marketing of banking services in rural areas

depends on how the organization properly blends the marketing concepts with the right approach

required to penetrate into rural households. And the final result of the efforts will depend on the

sincerity and zeal of the field personnel making the efforts and the organizational support available

to them.

NATURE AND FEATURES OF SERVICE INDUSTRY

A service is any activity or benefit that one party can offer to another that is essentially intangible

and does not result in the ownership of anything. Its production may or may not be tied to a

physical product. Activities such as renting a hotel room, depositing money in the bank, travelling on

an airplane, visiting a doctor, getting a hair cut etc are all examples of services. A company must

consider four characteristics of services when designing marketing programs. These

features/characteristics are:

INTANGIBILITY: Service intangibility means that services cannot be seen, tasted, felt, heard orsmelled before they are bought. For example people undergoing cosmetic surgery cannot see the

result before the purchase, and airline passenger have nothing but the airline ticket and a promise

of safe delivery to their destinations.

To reduce uncertainty, buyers look for SIGNAL of service quality. They draw conclusions about

quality from the place, process, physical evidence, people, and price, equipment and

communication materials that they can be seen. There4, the service providers task is to make the

service tangible in one or more ways. Whereas product marketers try to add intangibility to their

tangible offers, service marketers try to add tangibles to their intangibility offers.

Consider a bank that want to convey the idea of that its service is quick and efficient. It must make

this positioning strategy tangible in every aspect of customer contact. The banks physical setting

must suggest quick and efficient service: Its exterior and interior should have clean lines; internal

traffic flow should be planned carefully; waiting time should seem short at teller windows ATMs;

and background music should be light and upbeat. The banks staff should be busy and properly

dressed. The equipment-computers, copy machine, desk- should look modern. The bank ads and



other communications, should suggest efficiency, with clean and simple designs and carefully

chosen words and photos that communicate the banks positioning. The bank should choose a name

and symbol for its service that suggest speed and efficiency. It pricing for various services should be

kept simple and clear.

INSEPARABILITY: Physical goods are produce, then stored and later sold and still later consumed. In

contrast, service are first sold, the produce and at the same time consumed. Service inseparability

means that services cannot be separated from their providers, whether the providers are people or

machines. If a service employee provides the employee service, then the employee is a part of the

service. Because the customer is also present as the service is produced, provider-service interaction

is a feature of services marketing. Both provider and the customer affect the service outcome.

In the case of entertainment and professional services, buyers care a great deal about who provide

the service. It is not the same service at an Alice-Billy concert if Alice gets sick and is replace by

Anne-Maria. A legal defense supplied by Samuel Nobody differs from one supplied by Kingsley

Somebody. When customers have strong preferences, price is used to ration the limited supply of the providers time. Thus Kingsley Somebody charges more than do less well-known lawyers.

VARIABILITY: Service variability means that the quality of services depends upon who provides them

as well as when, where, and how they are provided. For example, some hotels- say Kairaba Hotels

have reputations for providing better services than others. Within Kairaba Hotels, one registration

desk employee may be cheerful and efficient, whereas another standing just a few feet away may

be unpleasant and slower. Even the quality of a single Kairaba Hotels employees service varies

according to his or her energy and frame of mind at the time of each customer encounter.

Service firm there4 should take several steps to manage service variability. They can select and

carefully train their personnel to give good service. They can provide employee incentives that

emphasize quality, such as employee of the month awards or bonuses based on customers

feedback. A firm can check customer satisfaction regularly through suggestion and complaint

systems, customers surveys and comparison shopping. When poor service is found, it can be

corrected.

PERISHABILITY: Services perish ability means that service cannot be stored for later sale or use.

Some doctors charges patients for missed appointments because the service value existed only at

that point and disappear when the patient did not show up. The perishabilty of service is not a

problem when demand is steady. However when demand fluctuates service firm often have difficult

problems. For example, public transportation companies have to own much more equipment thanthey would if demand where even throughout the day.

Service firms can use several strategies for producing a better match between demand and supply.

On the demand side, charging different prices at different times will shift some demand from peak

period to off-peak periods.



On the supply side, firms can hire part-time employees to serve peak demand. Colleges add part

time lecturer when enrolment goes up, and restaurants call in part-time waiters and waitresses to

handle busy shift. Peak time demand can be handled more efficiently by having employees do only

essential tasks during peak periods. Some of this task can be shifted to customers, as when

customers fill out their own medical records or bag their own groceries.

MARKETING STRATEGIES FOR SERVICE FIRM

Until recently, service firms lagged behind manufacturing firms in their use of marketing. Many

service businesses are small (auto repair shop, dry cleaners) and often consider marketing unneeded

or too costly. Other service businesses (colleges, hospital) once had so much demand that they did

not need marketing until recently. Still others (legal, medical and accounting practices) believe that

it was unprofessional to use marketing).

Still, just like manufacturing businesses, good service firm use marketing to position them strongly in

chosen target markets. E.g. the Kairaba Hotels can position itself as offering a memorableexperience that enlivens the senses, instills well-being and fulfils even the unexpressed wishes and

needs of our guests. These and other service firms establish their positions through traditional

marketing mix activities.

However, because services differ from tangible products, they often require additional marketing

approaches. In a product business, products are fairly standardized and can sit on shelves waiting

for customers. But in a service business, the customer and frontlines service employee interact to

create the service. Thus, service providers must work to interact effectively with customers to

create superior value during service encounters. Effective interactions, in turn, depend on the skills

of frontline service employees, and on the service production and support process backing theseemployees.

Thus successful companies focus their attention on both their employees and customers. They

understand the service-profit chain, which links service firm profit with employee and customers

satisfaction. These chain consist of five links:

yHealthy service profits and growth---superior service firm performance, which

Result from................................................................................................................

ySatisfied and loyal customers---satisfied customers who remain loyal, repeat purchase, and

refer other customers, which result

from.........................................................................................................................

yGreater service value ---more effective and efficient customer value creation and services



which result from..............................................................................

ySatisfied and productive service employees ---more satisfied, loyal and hardworking

employees, which result from..........................................................

yInternal service quality---superior employee selection and training, a quality workenvironment, and strong support for those dealing with customers.

There4, reaching service profits and growth goals begins with taking care of those who take care of

customers. The following story illustrate the concept of the service-profit-chain by Mr. Samuel

Nobody, the chairman of Kairaba Hotels and Towels during an interactive interview with some

prospective managers :-Mr. Samuel Nobody tell job candidates that the hotel chain wants to satisfy

three groups: customers, employees and stockholders. Although all of the groups are important, he

ask in which order should the group be satisfied. Looking at the candidate contributions, Mr. Samuel

Nobody, however reasons differently. First, employees must be satisfied. If employee love their jobs

and feels a sense of pride in the hotel they will serve customers well Satisfied customers will return

frequently to the hotel. Moreover, dealing with happy customers will make employee even

more satisfied, resulting in better service and still greater repeat business, all of which will yield a

level of profit that will satisfy Kairaba Hotels stockholders.

INSURANCE MARKETING

p INTRODUCTION:

Wherever there is uncertainty there is risk. We do not have any control over uncertainties whichinvolves financial losses. The risks may be certain events like death, pension, retirement or uncertain

events like theft, fire, accident, etc.

Insurance is a financial service for collecting the savings of the public and providing them with risk

Coverage. The main function of Insurance is to provide protection against the possible chances of

generating losses. It eliminates worries and miseries of losses by destruction of property and death. It

also provides capital to the society as the funds accumulated are invested in productive heads.

Insurance comes under the service sector and while marketing this service, due care is to be taken in

quality product and customer satisfaction. While marketing the services, it is also pertinent that they

think about the innovative promotional measures. It is not sufficient that you perform well but it is alsoimportant that you let others know about the quality of your positive contributions.

The creativity in the promotional measures is the need of the hour. The advertisement, public relations,

word of mouth communication needs due care and personal selling requires intensive care.

p INSURANCE MARKETING:

The term Insurance Marketing refers to the marketing of Insurance services with the aim to create

customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the



formulation of an ideal mix for Insurance business so that the Insurance organization survives and

thrives in the right perspective.

pMARKETING MIX FOR INSURANCE COMPANIES:

The marketing mix is the combination of marketing activities that an organization engages in so as to

best meet the needs of its targeted market. The Insurance business deals in selling services and

therefore due expertise in the formation of marketing mix for the Insurance business is needed. The

marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the product, its price, place, promotion,

people, process & physical attraction. The above mentioned 7 Ps can be used for marketing of

Insurance products, in the following manner:

1. PRODUCT:

A product means what we produce. If we produce goods, it means tangible product and when we

produce or generate services, it means intangible service product. A product is both what a seller has to

sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their

product.

In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are

the two leading companies offering insurance services to the users. Apart from offering life insurance

policies, they also offer underwriting and consulting services.

When a person or an organization buys an Insurance policy from the insurance company, he not only

buys a policy, but along with it the assistance and advice of the agent, the prestige of the insurance

company and the facilities of claims and compensation.

It is natural that the users expect a reasonable return for their investment and the insurance companies

want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the

services or the schemes should be motivational. The Group Insurance scheme is required to be

promoted, the Crop Insurance is required to be expanded and the new schemes and policies for the

villagers or the rural population are to be included

2. PRICING:

In the insurance business the pricing decisions are concerned with:

i) The premium charged against the policies,

ii) Interest charged for default in the payment of premium and credit facility, and

iii) Commission charged for underwriting and consultancy activities.

With a view of influencing the target market or prospects the formulation of pricing strategy becomes

significant. In a developing country like India where the disposable income in the hands of prospects is

low, the pricing decision also governs the transformation of potential policyholders into actual

policyholders.

The strategies may be high or low pricing keeping in view the level or standard of customers or the

policyholders.

The pricing in insurance is in the form of premium rates. The three main factors used for determining

the premium rates under a life insurance plan are mortality, expense and interest. The premium rates



are revised if there are any significant changes in any of these factors.

Mortality (deaths in a particular area):

When deciding upon the pricing strategy the average rate of mortality is one of the main considerations.

In a country like South Africa the threat to life is very important as it is played by host of diseases.

Expenses:

The cost of processing, commission to agents, reinsurance companies as well as registration are all

incorporated into the cost of installments and premium sum and forms the integral part of the pricing

strategy.

Interest:

The rate of interest is one of the major factors which determine peoples willingness to invest in

insurance. People would not be willing to put their funds to invest in insurance business if the interest

rates provided by the banks or other financial instruments are much greater than the perceived returns

from the insurance premiums.

3. PLACE:

This component of the marketing mix is related to two important facets

i) Managing the insurance personnel, and

ii) Locating a branch.

The management of agents and insurance personnel is found significant with the viewpoint of

maintaining the norms for offering the services. This is also to process the services to the end user in

such a way that a gap between the services- promised and services offered is bridged over. In a

majority of the service generating organizations, such a gap is found existent which has been

instrumental in making worse the image problem.

The transformation of potential policyholders to the actual policyholders is a difficult task that depends

upon the professional excellence of the personnel. The agents and the rural career agents acting as a

link, lack professionalism. The front-line staff and the branch managers also are found not assigning due

weight age to the degeneration process. The insurance personnel if not managed properly would make

all efforts insensitive. Even if the policy makers make provision for the quality up gradation, the

promised services hardly reach to the end users.

It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or

users. They are required to be given adequate incentives to show their excellence. While recruiting

agents, the branch managers need to prefer local persons and provide them training and conduct

seminars. In addition to the agents, the front-line staff also needs an intensive training programme to

focus mainly on behavioral management.

Another important dimension to the Place Mix is related to the location of the insurance branches.

While locating branches, the branch manager needs to consider a number of factors, such as smooth

accessibility, availability of infrastructural facilities and the management of branch offices and premises.

In addition it is also significant to provide safety measures and also factors like office furnishing, civic



amenities and facilities, parking facilities and interior office decoration should be given proper attention.

Thus the place management of insurance branch offices needs a new vision, distinct approach and an

innovative style. This is essential to make the work place conducive, attractive and proactive for the

generation of efficiency among employees. The branch managers need professional excellence to make

place decisions productive.

4. PROMOTION:

The insurance services depend on effective promotional measures. In a country like India, the rate of

illiteracy is very high and the rural economy has dominance in the national economy. It is essential to

have both personal and impersonal promotion strategies. In promoting insurance business, the agents

and the rural career agents play an important role. Due attention should be given in selecting the

promotional tools for agents and rural career agents and even for the branch managers and front line

staff. They also have to be given proper training in order to create impulse buying.

Advertising and Publicity, organization of conferences and seminars, incentive to policyholders are

impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall

paintings and publicity drive through the mobile publicity van units would be effective in creating the

impulse buying and the rural prospects would be easily transformed into actual policyholders.

5. PEOPLE:

Understanding the customer better allows designing appropriate products. Being a service industry

which involves a high level of people interaction, it is very important to use this resource efficiently in

order to satisfy customers. Training, development and strong relationships with intermediaries are the

key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the

staff and agent level, is one of the important areas to look into.

6. PROCESS:

The process should be customer friendly in insurance industry. The speed and accuracy of payment is of

great importance. The processing method should be easy and convenient to the customers. Installment

schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data

Warehousing will smooth the process flow.

IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can

either complement or supplement the channels of distribution cost effectively. It can also help to

improve customer service levels. The use of data warehousing management and mining will help to find

out the profitability and potential of various customers product segments.

7. PHYSICAL DISTRIBUTION:

Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers

have a large reach and presence in India. Building a distribution network is very expensive and time

consuming. If the insurers are willing to take advantage of Indias large population and reach a profitable

mass of customers, then new distribution avenues and alliances will be necessary.



Initially insurance was looked upon as a complex product with a high advice and service component.

Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability.

As the awareness increases, the product becomes simpler and they become off-the-shelf commodity

products. Today, various intermediaries, not necessarily insurance companies, are selling insurance. For

example, in UK, retailer like Marks & Spencer sells insurance products.

The financial services industries have successfully used remote distribution channels such as telephone

or internet so as to reach more customers, avoid intermediaries, bring down overheads and increase

profitability. A good example is UK insurer Direct Line. It relied on telephone sales and low pricing.

Today, it is one of the largest motor insurance operators.

Technology will not replace a distribution network though it will offer advantages like better customer

service. Finance companies and banks can emerge as an attractive distribution channel for insurance in

India. In Netherlands, financial services firms provide an entire range of products including bank

accounts, motor, home and life insurance and pensions. In France, half of the life insurance sales are

made through banks.

In India also, banks hope to maximize expensive existing networks by selling a range of products. It is

anticipated that rather than formal ownership arrangements, a loose network of alliance between

insurers and banks will emerge, popularly known as bancassurance.

Another innovative distribution channel that could be used is the non-financial organizations. For an

example, insurance for consumer items like fridge and TV can be offered at the point of sale. This

increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods

will be possible and insurance can be one of the various incentives offered.

BANKING MARKETING

Banks today are operating in a highly competitive and rapidly changing environment. In the changing

economic scenario, a professional approach to business development is essential and the survival of a

banking institution depends on its ability to take up challenges coming up in the environment.

Developing business through marketing of banks services is one of the crucial areas which need

attention of the bankers to ensure profitable survival.

BANK ING MARKETING : CONCEPTS

The role of marketing in an organizations existence and growth need not be overemphasized in todays

competitive environment. According to Peter Drucker, marketing is so basic that it cannot be

considered a separate function. It is the whole business seen from the point of view of its final result,

that is, customers point of view. Survival of an organization depends upon its ability to acquire

resources necessary for its sustenance. One of the modes of survival, as observed by Philip Kotler, is

exchange, whereby an organization creates and offers goods and services that are able to attract and

satisfy the purchasers, in exchange of its value. This option can be gainfully exercised only if the

organization develops the capacity to produce the needed goods and services. The organizations should



be geared to identify the customer needs and preferences which are subject to change over a period of

time.

One of the policy issues discussed in marketing is the ultimate objective of the marketing efforts of an

organization. The general belief is that the objectives of marketing are to maximize the markets

consumption of your products and services. However, it would be desirable to set the goal atmaximizing consumer satisfaction, rather than consumption. The organization, in the long run, is likely

to benefit from a customer oriented approach to marketing. The approach, in other words, should

ensure strong foundation for the institutions existence, because the concepts of marketing have its

origin on the premise that man is a creature of needs and wants. And there is constant effort on his

side to satisfy his needs. Further, his needs and wants keep changing with time, circumstances and the

immediate environment in which he is operating. Marketing management essentially involves the

efforts to achieve the need satisfaction of the target group the institution is trying to serve.

There are various philosophical aspects which can give conceptual orientation to marketing personnels

approach. The selling concept assumes that the consumers will either not buy or not buy enough of

an organizations products unless the organization makes a substantial effort to stimulate their

interests in its products. This becomes all the more relevant when the organizations are functioning in

a rich environment of competitors. Product Concept in marketing philosophy assumes that the

consumers will favor those products that offer best quality for the price, while production concept

assumes that consumers will favor those products which are available and affordable. An organizations

task, therefore, should be to serve target markets in a way that produces not only want satisfaction, but

long-run individual and social benefit as the key to attracting and holding customers.

The need for a well defined institutional framework within the organization to manage the marketing

efforts should be reckoned by any business concern. It is, therefore, essential that the institution

constitutes a marketing wing which will take care of the marketing function of the organization. This

compartment has to work smoothly with other segments of the organization. Acquiring modern

marketing orientation requires support from top management, a committed task force, constant review

of strategies and a consultants help if considered necessary. The marketing wing should be adequately

supported by a Marketing Information System, which is a critical element in effective marketing. The

information system is the channel linking external environment with the executives of the institution.

BANK MARKETING :

Marketing philosophy, in any context, refer to the need satisfaction of the institutions clients. The basicstep involves identifying the needs of the customers and developing products to suit their needs or

modifying the existing products accordingly. It also requires the need for foreseeing wants of the

customers in future and developing suitable products of their requirement. Deryk Weyer of Barclays

Bank attempted a comprehensive definition for Bank Marketing. According to him, it consists of

identifying the most profitable markets now and in future; assessing the present and future needs of

customers; setting business development goals and marketing plans to meet them and managing the



various services and promoting them to achieve the plans, all in the context of a changing market

environment. Successful marketing in a bank calls for commitment at all levels to the task defined in

this regard. Achieving higher business standards and operational performance through marketing of

banking services should be one of the directional goals of the organisation.

In view of the competitive surroundings in which a bank is compelled to function, there is need forformulation of a strategic action plan for its marketing efforts. A marketing strategy, in general, is a

systematic, appropriate and feasible set of concepts and actions through which the institution strives to

achieve its goal of customer satisfaction and profitable survival. Strategy should be designed after taking

into account the strengths and weaknesses of the organization. For example, a bank or branch with

clientele from various segments could think of market penetration by offering the existing range of

services to existing customers. On the other hand, a bank which is having expanding business through

new branches or branches which are not facing acute competition could think of Market Development

by offering the existing services to new customers. However, the real marketing challenges arise from

the institutions capability to design new product range for their customers of various segments. The

strategy, therefore, lies in increasing the client base and consolidating the relationship with existing andnew clients through existing or newly developed products.

The operational aspects of strategies for marketing contain actions such as development of Relationship

Banking, designing of effective delivery system, ensuring customer-oriented services and modifying the

system into a personal selling organization. In western banking, officials assigned the job of personally

contacting the customers and offering the services at doorsteps had been able to make a significant

impact on the development of business for their organizations. The importance and role of personal

selling and customer contacts in the marketing efforts of a banking institution stem from the success of

such efforts in many banking institutions all over the world.

The implementation of the strategies is as crucial as its design in ensuring successful marketing. The

communication of the adopted strategies to different tiers of the institution and ensuring of its proper

understanding by personnel at all levels is essential for successful implementation of the strategies. The

communication becomes difficult in organizations which have substantial branch network spread over a

large geographical area. The field staff at the branch level should be trained to implement the strategies

after modifying them to suit the environment in which they are operating. The knowledge of the local

environment, demographic features and cultural aspects is an essential requirement for the field staff

involved in marketing efforts for the organization.

RURAL PSYCHOLOGY AND BANK MARKETING :

Banks have a great role to play in the development of rural areas and improvement in rural life. In order

to play this role effectively, the banker should have fair knowledge of the socio-psychological aspects of

the rural society he is serving. First of all, the banker should be aware of the Human Groups and

Institutions in the area of operation. This means that one should be aware of the role of agriculture in

the rural economy, cultural aspects of the society, community aspects, family and farm patterns,



institutional facilities, etc. Secondly, the Process of Change, if any, taking place in the rural scenario,

should be known to him. The general changes that take place in the rural scenario include urbanization,

industrialization, migration, social mobility, changes in values, farm structure, etc. Thirdly, there could

be Planned Changes, generally emanating from administration of voluntary organizations, such as

resettlement, land reforms, community development, agricultural extension work, education etc, of

which the field staff should be familiar. Fourthly, a general idea of the status of various development

projects under execution, welfare measures, schemes under implementation, etc. will help the banker

to have a complete picture of the rural society in which he is operating. The knowledge on all these

aspects of the rural society will help the banker in choosing the right approach to the clients in rural

areas since education of the people on the services offered is an integral part of effective marketing.

The psychology of the rural people should be properly understood. It is only normal that the people in

rural areas do not adopt a practice immediately. In fact, the tendency of an illiterate person is to distrust

the same. The banking habits are no exception to this. But subsequently, on being properly educated, he

may develop interest and would like to know more about. If the information imparted convinces him

that the idea is something useful, he enters the t third stage of thinking about the possibility of

accepting the idea for his benefit. Thus, there are different stages in the adoption process of the rural

folks, which should be clearly understood by the field personnel.

The cultural pattern of the rural folks influences their economic behavior considerably. Some rural

communities may have a modern pattern of culture. These communities would be ever willing to try

something new if they are convinced that it can improve their present position. Dissemination of

information on banks services become easy and the results are achieved at a faster pace with such

groups. On the other hand, groups characterized by traditional pattern of culture are generally

opposed to change. Their main concern will be to preserve what has been the tradition and resists

intrusion in to their ways of living. Effective marketing becomes difficult while dealing with such groups.

Members of the group with a modern pattern of culture tend to be individualistic, while system of socialcontrol will be more in groups with traditional pattern. In such groups, where tradition is emphasized, a

far reaching change in attitude towards anything, especially banking habits can be brought about only

with the support of their Clan Leaders. The clan leaders are the people whom the rest of the

community will listen to or whose approval, explicit or otherwise, the people look forward to for

accepting anything new. It is quite possible that these leaders are not formal leaders of the group such

as political leaders, but could be an elderly person or a religious leader of the community trusted by the

general public. Success in approaching such rural societies definitely lies in understanding the rural

psychology in this regard and identifying such influential individuals from the rural masses. Any effort,

therefore, to popularize the banking services in rural areas call for absolute knowledge about the social

structures, the culture, the functioning of the rural groups and the nature and type of their leadership.

Changes are taking place in contemporary rural society, though at a slower pace. The elements of

dynamism of stability are existent in the rural environment, in the case of urban areas, though not

operative in identical degrees or patterns. The changes, however, have been generally confined to

changes in the agricultural pattern, community aspects and some general changes in the economic

scenario. These changes, however, generate scope for institutional services in various segments of the



rural economys operation and the banking institutions should capitalize on the same through deep

penetration into rural households. This can be made possible only if the banks personnel are aware of

the changes taking place in the rural environment and design their approach to the situation in a skillful

manner. Modifying the services to suit the dynamic environment is considered as the backbone of

marketing efforts. However, while designing or modifying, it should be ensured that the products are

not inconsistent with basic attitudes and cultural values of the people. Rapidity of acceptance of

innovations is a function of many factors, including the nature of innovation and its relationship to

existing cultural patterns.

Banking institutions are vehicles of economic development. According to Rostow, economic theories

and development concepts should be linked to sociological and psychological elements, if it is to be

maximally useful. Gunar Myrdal had opined that attitudes and institutions play a significant role in

rapid economic development. Psychology, as a science of human behavior emphasizes the influence of

human factors which accelerate or impede the rapid acceptance of innovative ideas. Marketing efforts

in the rural areas should be designed with proper emphasis on these influential factors.

BANK MARKETING : R OLE OF PER SONNEL

The marketing strategy for rural areas, by and large, assigns a responsible role on branch officials in

bringing out socio-economic transformation of the rural society. There is need for a total marketing

approach from the personnel to penetrate all levels in all areas of banking operations. Efforts need to be

made to design and launch suitably tailored services to meet its changing needs of the rural population.

The personnel attempting marketing in rural areas should be able to establish an organic link with rural

masses. They should be committed to the cause of rural upliftment and should implement in totality the

market strategies formed for the purpose. The knowledge of the command area of the branch and the

ability to identify potential customers and their financial needs are pre-requisites for the success of

marketing strategies. This calls for the need of training the staff with sharp focus on improving the

knowledge of the bank staff about the rural atmosphere and the skills necessary to deal with the rural

customers. There is also need for developing a sense of belonging towards the organization, customers

and the society. The field staff, to the extent possible, should know the language and dialect of the

people and should be able to communicate in a manner which is appealing to the people. The

organization on their part, therefore, should take adequate care in identifying the right people for this

specific job. They should also foster innovative and creative approach in working to bring in new and

original ideas and develop talent. There is also need for rationalization of the work load for the

personnel in the rural branches to enable them to give adequate attention to the villagers and their

requirements. Further, the institutions need to motivate their personnel for popularizing the services in

rural areas. Every member of the staff is a salesman of the banks services and an ambassador of the

institution among people. Marketing efforts made by the personnel and its effect on business

development should be appreciated and rewarded by the bank management.

The bank personnel, as a matter of strategy, should try to find a place in the hearts of the rural folks.

Role of personal influence on acceptance of an organization or services in the rural scenario should be



kept in mind. The personal influence refers to the effect of statements made by one person about the

bank or its services on another persons attitude towards the institution. In a village, people generally

know one another and have time and patience to converse with one another. Opinion on the institution

and its services are discussed among local people. A satisfied customer always acts as an ambassador of

goodwill for the bank and brings clientele through his own efforts. The personnel, therefore, should

strive for customer satisfaction as a marketing strategy, if not as the objective of the organization.

In conclusion, it may be understood that the success of marketing of banking services in rural areas

depends on how the organization properly blends the marketing concepts with the right approach

required to penetrate into rural households. And the final result of the efforts will depend on the

sincerity and zeal of the field personnel making the efforts and the organizational support available to

them.

R eferences

Abell, "Defining the Business: The Starting Point of Strategic Planning"^ "The Marketing Imagination"

^ J. B. Quinn, "Strategies for Change: Logical Incrementalism" (Richard D. Irwin, 1980)

^ a b Baker, Michael T he Strategic Marketing Plan Audit 2008. ISBN 1902433998

^ Quick MBA Marketing plan based on consumer and competitor analyses

^ Marketing plan basics Table of marketing targets, actions, means and results

H. A. Simon, Rational decision making in business organizations, 'American Economic Review'

J. Pfeiffer and G. R. Salancik, 'The External Control of Organizations'

K. Paolo Sumagaysay, "The oversaturated world"

Principles of Marketing by Philip Kotler and Gary Armstrong (seventh Edition).

Principles of Marketing by Philip Kotler (third Edition).

Appreciation Marketing by Gary Armstrong.



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