2009 R Marketing Communication in Banks A Survey research on ATMs as a part of communications tool for banks Faculty Guide:Prof. R. Srinivasan Faculty, ICFAI Business School. Bangalore. Company Guide:Mrs. Kalpana Rao (Senior Strategy Brand Manager) R. K. Swamy(BBDO) Pratik Misra IBS Bangalore 5/24/2009 May 24, 2009 [Marketing Communication in Banks] A REPORT ON Marketing Communication in Banks and ATMs By Pratik Misra 08BS0002311 A report submitted in partial fulfillment of The requirements of MBA program Submitted to Faculty Guide Prof. R Shrinivasan ICFAI Business School Bangalore 2
Company Guide Mrs. Kalpana Rao Senior Brand Strategy Manager R K SwamyBBDO May 24, 2009 [Marketing Communication in Banks] Contents Executive Summery ……………………………………………………………………………………………………………. 7 Objective of the Project ………………………………………………………………………………………………………. 8 Introduction……………………………………………………………………………………………………………………. 0 A) About the company: ………………………………………………………………………………………………….. 10 B) About the project:……………………………………………………………………………………………………… 11 Advertisement: …………………………………………………………………………………………………………. 12 Sales promotion ………………………………………………………………………………………………………… 2 Personal selling …………………………………………………………………………………………………………. 13 Public Relation ………………………………………………………………………………………………………….. 14 Direct marketing ……………………………………………………………………………………………………….. 14 Modern Indian Banking:…………………………………………………………………………………………………….. 5 Phases of banking in India: …………………………………………………………………………………………………. 15 Phase I …………………………………………………………………………………………………………………………… 15 Phase II ………………………………………………………………………………………………………………………. 16 Phase III ……………………………………………………………………………………………………………………… 7 Different Sector in India:-……………………………………………………………. …………………………………….. 17 Public Sector Banks in India:-………………………………………………………………………………………………. 18 Private Sector Banks in India:- …………………………………………………………………………………………….. 19 Co-Operative Banks in India:- ……………………………………………………………………………………………… 0 Regional Rural Banks in India:-…………………………………………………………………………………………….. 20 Foreign Banks in India:-……………………………………………………………………………………………………… 21 Bank Marketing ……………………………………………………………………………………………………………….. 22 Service Marketing…………………………………………………………………………………………………………….. 3 Relevance of marketing to Indian bank …………………………………………………………………………………. 25 Marketing of services needs to be different from that of products ……………………………………………… 29 Generic Difference between Goods and Services …………………………………………………………………. 29 Contextual difference between goods and services marketing………………………………………………… 1 Marketing Communication in Banks:- …………………………………………………………………………………… 33 Internal Communication…………………………………………………………………………………………………. 33 External communication…………………………………………………………………………………………………. 34 Syndicate Bank: ……………………………………………………………………………………………………………….. 36 3 May 24, 2009 Marketing Communication in Banks] Syndicate Institute of Bank Management (SIBM) and its activities ………………………………………………. 37 SIBM an Overview…………………………………………………………………………………………………………. 37 Training Centers & their activities …………………………………………………………………………………….. 37 Training Programs…………………………………………………………………………………………………………. 7 Training Methodology ……………………………………………………………………………………………………. 37 E-Learning Initiatives……………………………………………………………………………………………………… 37 Syndicate Bank BPO Service: ………………………………………………………………………………………………. 38 Syndicate Bank Toll Free Voice Mail service……………………………………………………………………………. 8 Canara Bank ……………………………………………………………………………………………………………………. 39 Marketing Communication in Canara Bank…………………………………………………………………………….. 40 Canara Bank’s Mobile ATM Van:……………………………………………………………………………………. 40 Canara Bank’s New Brand Identity ……………………………………………………………………………………. 0 CBCRD Trust ……………………………………………………………………………………………………………………. 41 (Canara Bank Centenary Rural Development Trust)………………………………………………………………. 41 Self-employment initiative ………………………………………………………………….. …………………………. 41 Promotion of Traditional Arts & Crafts ………………………………………………………………………………. 1 Promotion of women entrepreneurship …………………………………………………………………………. 42 Upliftment of SC and ST ………………………………………………………………………………………………. 42 CSR Activities…………………………………………………………………………………………………………………… 42 An effort for Helping Women Entrepreneurs in Marketing ………………………………………………….. 2 Jalayoga…………………………………………………………………………………………………………………… 43 (A scheme for providing drinking water to villages) …………………………………………………………… 43 Mahila Arogya Shushrusha Yojana (MASHU) ……………………………………………………………………. 43 Society for the Educational and Economic Development (SEED) …………………………………………… 3 Abhayam …………………………………………………………………………………………………………………. 43 Bank of Baroda………………………………………………………………………………………………………………… 44 Mission statement……………………………………………………………………………………………………… 44 The Logo………………………………………………………………………………………………………………….. 4 Generation Next………………………………………………………………………………………………………………. 44 1. Gen-Next Junior (Saving Account) ………………………………………………………………………………. 45 2. Gen-Next Lifestyle ………………………………………………………………………………………………….. 45 3. Gen-Next Power (OD Facility) ………………………………………………………………….. ………………. 45 4 May 24, 2009 [Marketing Communication in Banks] 4. Gen-Next Suvidha …………………………………………………………………………………………………… 45 Retail Loan Factory …………………………………………………………………………………………………………… 46 SME Loan Factory …………………………………………………………………………………………………………….. 6 Few Finding about loan performances: …………………………………………………………………………… 47 CSR Activities…………………………………………………………………………………………………………………… 47 (Helping Rural Economy)……………………………………………………………………………………………… 47 ING Vysya……………………………………………………………………………………………………………………….. 8 Mission ………………………………………………………………………………………………………………………….. 48 Profile ……………………………………………………………………………………………………………………………. 48 The new Identity ……………………………………………………………………………………………………………… 48 The business side……………………………………………………………………………………………………………… 9 ING Vysya Accounts ………………………………………………………………………………………………………….. 49 A) ORANGE SAVING ACCOUNT ………………………………………………………………….. …………………. 49 B) SOLO account………………………………………………………………………………………………………… 50 KIOSK Marketing………………………………………………………………………………………………………………. 0 KIOSK Functions……………………………………………………………………………………………………………. 50 Self Banks ………………………………………………………………………………………………………………… 51 Customer Relationship Management ……………………………………………………………………………………. 51 Bringing Business for ING Vysya…………………………………………………………………………………………… 2 Pre-Approach……………………………………………………………………………………………………………. 52 Approach…………………………………………………………………………………………………………………. 53 Presentation …………………………………………………………………………………………………………….. 53 The AIDA Model: ……………………………………………………………………………………………………….. 3 Method of presentation:- ……………………………………………………………………………………………. 54 Overcoming Objections: ……………………………………………………………………………………………… 54 Closing:……………………………………………………………………………………………………………………. 54 Follow-up and maintenance:………………………………………………………………………………………… 5 Vijaya Bank …………………………………………………………………………………………………………………….. 56 Agriculture Related Activities ………………………………………………………………….. …………………………. 56 Agriclinics and Agribusiness Centers………………………………………………………………………………….. 56 A) Objectives:……………………………………………………………………………………………………………. 6 B) What are Agriclinics………………………………………………………………………………………………… 56 5 May 24, 2009 [Marketing Communication in Banks] C) Agribusiness Centers ………………………………………………………………………………………………. 57 Vijaya Krishi Vikas (VKV) Scheme …………………………………………………………………………………………. 57 Objective…………………………………………………………………………………………………………………….. 7 Salient Features……………………………………………………………………………………………………………. 57 V-Gen U th ……………………………………………………………………………………………………………………… 57 Questionnaire …………………………………………………………………………………………………………………. 60 Take Away from project: ……………………………………………………………………………………………………. 3 Recommendations……………………………………………………………………………………………………………. 73 References ……………………………………………………………………………………………………………………… 74 6 May 24, 2009 [Marketing Communication in Banks] Executive Summery This project deals with a detailed study of various tools used by banks for their marketing communication. Marketing communication includes messages and related media used to communicate with a market.
Those who participate in advertising, branding, direct marketing, graphic design marketing, packaging, promotion, publicity, sponsorship, public relations , sales and sales promotion and event marketing , online marketing, are all included in marketing communication. In bank the communication is basically divided into two parts. Internal Communication External Communication In this project I have tried to analyze the marketing communication of different banks through different communication tools.
The banks I have identified for the purpose of study are as follows:Vijaya Bank Canara Bank Syndicate bank Bank of Baroda ING Vysya The project also deals with finding out the marketing communication effectiveness of banks through their ATMs. This has to done through a Market research with the help of filled questionnaire and SPSS output. My methodology to achieve, what I intended, was meeting marketing managers in banks and communicate with them, interact to derive necessary information and also necessarily visiting the official site of the banks.
It was found that almost all of the banks did more or less the same activities in terms of marketing communication. A few public sector banks like Canara bank, Vijaya Bank, are more active in terms of Agriculture relate rural development program and private sector banks like ICICI, HDFC are engaged in advertising their brand through ads and local collaterals. The later part of this project also deals with a survey of ATMs and services of different banks. A sample size of around 140 samples was collected and was grouped in to 5 age categories! Age 18to 22 Age 22 to 27 Age 27 to 32 Age 32 to 37 Age 37 and above 7 May 24, 2009 Marketing Communication in Banks] It has been found that those who have account in ICICI bank is having a salary account with ICICI and the age group of those sample was found to be between 22 to 27 and 27 to 32 and most of them were found working. Now same sample when was tested for SBI bank it was found that age group of 22 and 27 have their account in SBI because their parents have a account in SBI or they personally feel that SBI is good. In fact these students feel that SBI is good because it provides them zero balance account which is not available in any other private sector bank apart from the salary account.
And also it provides loans at a lower rate as compared to any private sector banks. While on the other hand it was found that Canara bank is a consistent holder of all age group of people. This project was done with a lot of efforts put forward to fill the questionnaire and doing it with a SPSS analysis makes it unique. I had learned SPSS application and data /statistics analysis. It has photographs of all major ATMs and I did a comparative analysis of different banks in the market which were identified. Objective of the Project 1. 2. 3. 4. 5. 6.
To study the various channels of marketing communication for banks To understand the effectiveness of the marketing communication undertaken by a bank To find out the contribution of ATMs in marketing communication To analyze different players in the market To study the MarCom activities of major players in the market To suggest probable recommendations 8 May 24, 2009 [Marketing Communication in Banks] Acknowledgment I express my deep gratitude to ICFAI Bangalore which has given me an opportunity to learn something practical apart from books by including internship training in the MBA course.
With immense gratitude, I acknowledge all those whose guidance and encouragement served as a “beacon light” and crowned my efforts with success. I sincerely thank Mrs. Kalpana Rao Senior Strategy Brand Manager of R K Swamy BBDO for giving me an opportunity to take up this project. I thank her for being a constant source of inspiration, mentor and above all for her encouragement. I would like to express my profound sense of gratitude to Prof. R Shrinivasan – ICFAI Business School, Bangalore, and my project guide for guiding me as well as providing me the support to conduct this project.
With a deep sense of gratitude and indebtedness, I sincerely and whole-heartedly thank the staff team at R K Swamy BBDO for giving me value suggestions and advice throughout the execution of the project. This project would not have been concluded successfully within time without their support and help. I take this opportunity to thank all the library members of ICFAI Business School, Bangalore, friends, and my seniors who provided me with the study material on my project. 9 May 24, 2009 [Marketing Communication in Banks] Introduction A) About the company:
R K Swamy BBDO Year Founded FACTS 1973 Companies India: R K SWAMY BBDO Hansa Research Hansa Vision Customer Equity Solutions i-Vista Solutions USA: Hansa/ GCR Research Hansa Marketing Services Spread 18 offices across India & USA India Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, plus 11 field offices USA Chicago, Il. &Portland. 20 distinct offerings n Advertising /Marketing Communications and Services 900+ 150+ 70+ Cities Services Employees Clients Served Countries where we have undertaken field work 10 May 24, 2009 [Marketing Communication in Banks]
Objective: R K Swamy BBDO has a simple goal of assisting clients by developing solutions to their marketing communication problems and to provide intelligence and support to reach their goals. The Hansa: R K Swamy adopted Hansa bird as its symbol right from its inception in 1973. This unique bird has a special place and significance in Indian mythology, making it most appropriate for advertising agency. The Hansa bird has power to separate milk from water. This characteristic more than anything else is what R K Swamy BBDO aims to live up to at all times. Founder: Mr.
R K Swamy started R K Swamy advertising associates on 3rd April 1973 and within 7 years this company has spread its wings across the top five cities of India. He pioneered the concept of Total Communication System (a four runner to the Integrated Marketing Communication of today) and opened up entire public sector as an advertising category. Network: BBDO ranks top three networks in the world. Its offices span 250 cities across 70 countries. BBDO serves the marketing communication needs of leading companies like PepsiCo, DaimlerChrysler, Mars, Wringleys , visa, ICI, BT, Cingular, Sainsbury’s, Guinness etc.
BBDO is the most creative global agency network having won more awards in the leading shows of the year than any other network. BBDO is wholly owned by Omnicom groups the world’s leading marketing communication group listed on the NYSE. B) About the project: The marketing communication can be defined as “ A strategic business process used to plan, develop, execute and evaluate coordinated and measurable persuasive brand communication program over time with consumers, customers, prospects and other targeted, relevant external and internal audits. As already explained earlier that in banks communication is divided in to two parts internal and external communication. As we proceed we would deals with both internal and external communication for each bank I have identified. Before we proceed we would in general go through, what are the basic channels in marketing communication mix. The Marketing Communications Mix is the specific mix of advertising, personal selling, sales promotion, public relations, and direct marketing, a company uses to pursue its marketing objectives.
We would briefly see all of these one by one. 11 May 24, 2009 [Marketing Communication in Banks] Advertisement: Advertisement is a means to reaches large, geographically dispersed audiences in no time. Though sometimes the overall costs are high, consumers perceive advertised goods as more legitimate. It Dramatizes company/brand; Builds brand image and also stimulate short-term sales. It is the most effective tool for building buyers’ preferences, convictions, and actions. Personal interaction allows for feedback, adjustments, and relationship-orientation.
In today world buyers are more attentive and Sales force represents a long-term commitment. It is the most expensive of all the promotional tools. Sales promotion Sales promotion may be targeted at the trade or ultimate consumer. It takes use of a variety of formats, premiums, coupons, contests, etc. Its main feature is to attract attention of the consumers or trade, offers strong purchase incentives, dramatizes offers, and boosts sagging sales. It stimulates quick response, Short-lived, not effective at building long-term brand preferences. It reaches many prospects issed via other forms of promotion; Dramatizes Company or product; Often the most under used element in the promotional mix; relatively inexpensive (certainly not ‘free’ as many people think–there are costs involved). Promotion is not just advertisement. Promotion is a form of corporate communication that uses various methods to reach a targeted audience with a certain message in order to achieve specific organizational objectives. Nearly all organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of promotion.
Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a oneperson enterprise passing out business cards at a local businessperson’s meeting. An effective promotional strategy requires the marketer understand how promotion fits with other pieces of the marketing puzzle (e. g. , product, distribution, pricing, target markets). Consequently, promotion decisions should be made with an appreciation for how it affects other areas of the company. E. g.
For instance, running a major advertising campaign for a new product without first assuring there will be enough inventory to meet potential demand generated by the advertising would certainly not go over well with the company’s production department (not to mention other key company executives). Why promotion is needed? Build Awareness – New products and new companies are often unknown to a market, which means initial promotional efforts must focus on establishing an identity. In this situation the marketer must focus promotion to: 1) effectively reach customers, and 2) tell the market who they are and what they have to offer.
Create Interest – Moving a customer from awareness of a product to making a purchase can present a significant challenge. Customers must first recognize they have a need before they actively start to consider a purchase. The focus on creating messages that convince customers that a need exists has 12 May 24, 2009 [Marketing Communication in Banks] been the hallmark of marketing for a long time with promotional appeals targeted at basic human characteristics such as emotions, fears, sex, and humor. Provide Information – Some promotion is designed to assist customers in the search stage of the purchasing process.
In some cases, such as when a product is so novel it creates a new category of product and has few competitors, the information is simply intended to explain what the product is and may not mention any competitors. In other situations, where the product competes in an existing market, informational promotion may be used to help with a product positioning strategy. Marketers may use promotional means, including direct comparisons with competitor’s products, in an eff ort to get customers to mentally distinguish the marketer’s product from those of competitors Stimulate Demand – The right promotion can drive customers to make a purchase.
In the case of products that a customer has not previously purchased or has not purchased in a long time, the promotional efforts may be directed at getting the customer to try the product. This is often seen on the Internet where software companies allow for free demonstrations or even free downloadable trials of their products. For products with an established customer-base, promotion can encourage customers to increase their purchasing by providing a reason to purchase products sooner or purchase in greater quantities than they normally do.
For example, a pre-holiday newspaper advertisement may remind customers to stock up for the holiday by purchasing more than they typically purchase during nonholiday periods. Reinforce the Brand – Once a purchase is made, a marketer can use promotion to help build a strong relationship that can lead to the purchaser becoming a loyal customer. For instance, many retail stores now ask for a customer’s email address so that follow-up emails containing additional product information or even an incentive to purchase other products from the retailer can be sent in order to strengthen the customer-marketer relationship.
Personal selling Personal selling is a promotional method in which one party (e. g. , salesperson) uses skills and techniques for building personal relationships with another party (e. g. , those involved in a purchase decision) that results in both parties obtaining value. In most cases the “value” for the salesperson is realized through the financial rewards of the sale while the customer’s “value” is realized from the benefits obtained by consuming the product. However, getting a customer to purchase a product is not always the objective of personal selling.
For instance, selling may be used for the purpose of simply delivering information. Because selling involves personal contact, this promotional method often occurs through face-to-face meetings or via a telephone conversation, though newer technologies allow contact to take place over the Internet including using video conferencing or text messaging (e. g. , online chat). Among marketing jobs, more are employed in sales positions than any other marketing-related occupation. In the U. S. alone, the U. S.
Department of Labor estimates that over 14 million or about 11% of the overall labor force are directly involved in selling and sales-related positions. Worldwide this figure may be closer to 100 million. Yet these figures vastly under-estimate the number of people who are actively engaged in some aspect of selling as part of their normal job responsibilities. While millions of people can easily be seen as holding sales jobs, the promotional techniques used in selling are also part of the day-to-day activities of many who are usually not directly associated with selling.
For 13 May 24, 2009 [Marketing Communication in Banks] instance, top corporate executives whose job title is CEO or COO are continually selling their company to major customers, stock investors, government officials and many other stakeholders. The techniques they employ to gain benefits for their company are the same used by the front-line salesperson to sell to a small customer. Consequently, our discussion of the promotional value of personal selling has implications beyond marketing and sales departments.
Public Relation Public Relation is a management function that involves monitoring and evaluating public attitudes and maintaining mutual relations and understanding between an organization and its public. Public could include shareholders, government, consumers, employees and the media. It is the act of gettin g along with people we constantly come in touch with. PROs ensure internal cohesion in the company by maintaining a clear communications network between the management and employees. Its first objective is to improve channels of communication and to establ ish new ways of setting up a two-way flow of information and understanding.
Public relations as a separate career option has came into existence when lots of private or government companies and institution felt the need to market their product, service and facilities. Public image is important to all organizations and prominent personalities. The role of public relation specialist becomes pertinent in crisis situations when the correct and timely transmission of information can help save the face of the organization. Direct marketing Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing.
The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, and telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving purchases that can be attributed to a specific “call-to-action. ” This aspect of direct marketing involves an emphasis on tractable, measurable positive (but not negative) responses from consumers (known simply as “response” in the industry) regardless of medium.
If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a website, then the effort is considered to be direct response advertising. 14 May 24, 2009 [Marketing Communication in Banks] Modern Indian Banking: Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India’s banking system has several outstanding chievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India’s growth process. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days.
Now it is simple as instant messaging or ‘dial a pizza’. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991 Phases of banking in India: Phase I
The General Bank of India was set up in the year 1786. After that came the Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.
Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. 15 May 24, 2009 [Marketing Communication in Banks] During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 3 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days, public had lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Phase II Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas.
It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks.
This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crores. 16 May 24, 2009 Marketing Communication in Banks] Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. The financial system of India has shown a great deal of resilience.
It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure. Different Sector in India:Public Sector Banks in India Private Sector Banks in India Cooperative Banks in India Regional Rural Banks in India Foreign Banks in India In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India.
Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Some only catering in cities. Some are of Indian origin and some are foreign players. 17 May 24, 2009 [Marketing Communication in Banks] Public Sector Banks in India:Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank State Bank of India 8 May 24, 2009 [Marketing Communication in Banks] Private Sector Banks in India:Bank of Punjab Bank of Rajasthan Catholic Syrian Bank Centurion Bank City Union Bank Dhanalakshmi Bank Development Credit Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank IndusIand Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank South Indian Bank United Western Bank UTI Bank 19 May 24, 2009 [Marketing Communication in Banks] Co-Operative Banks in India:Co operative Banks in India are registered under the Co-operative Societies Act.
The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. Regional Rural Banks in India:Till date in rural banking in India, there are 14,475 rural banks in the country of which 2126 (91%) are located in remote rural areas. SBI has 30 Regional Rural Banks in India known as RRBs Haryana State Cooperative Apex Bank Limited NABARD – National Bank for Agriculture and Rural Development Sindhanur Urban Souharda Co-operative Bank United Bank of India Syndicate Bank 20 May 24, 2009 Marketing Communication in Banks] Foreign Banks in India:ABN-AMRO Bank Abu Dhabi Commercial Bank Bank of Ceylon BNP Paribas Bank Citi Bank China Trust Commercial Bank Deutsche Bank HSBC JP Morgan Chase Bank Standard Chartered Bank Scotia Bank 21 May 24, 2009 [Marketing Communication in Banks] Bank Marketing Most of are familiar with the term “Marketing”. When a housewife goes to purchase something from the market, we say that she has gone for marketing. When a vegetable vendor or a potato merchant goes to market to sell potato or vegetable we say they he is selling.
When we see a “Pepsi” advertisement on TV screen we tell this is marketing strategy of the company. When we find in a shop a heavy discount, we say it is marketing gimmick. Now a days by reading the corporate messages like “we believe in relationship”. By looking at the above mentioned example we can now answer the following questions:1. 2. 3. 4. Is marketing synonymous with sale and purchase of goods and services? Is there any difference between selling and marketing? Does marketing mean advertising? Is it fashionable to talk of relationship before going for marketing?
Before we get in to answering these questions, we will see some definitions of marketing. Marketing is the management process responsible for identifying, anticipating and satisfying customer’s requirements profitably. (British Institute of Marketing) Marketing is process of choosing markets to be in, products to offer, prices to change, distributors to use and message to send. (Philip Kotler) Marketing is an attitude of mind. It is a way of organizing the organization. It is a range of activities which will employ ools and techniques in process of identifying, anticipating and satisfying customer requirements. Going by the above definitions one thing is clear. The entire activity related to marketing originates from Customer. It is those functions or that management disciplines which try to give value to the customers. No organization can exist without existence of customer. Anybody having a customer needs marketing. Hence by simple logic all organizations need marketing. Marketing is no longer confined to exchange of goods or satisfaction of demand only.
It has broadened its scope and it has also become more diffused within the organizations. That means marketing is no longer an isolated concern of few but has become everyone’s business and for good reasons. The very attributes of “market orientation” and “customer mindedness” are going to make the difference between success and failure in the fast changing market environment. Contributing towards creation of superior customer values has become the core competency in a marketer’s agenda. 22 May 24, 2009 [Marketing Communication in Banks]
Borrowing ideas from above mentioned definitions we can define bank marketing as the functions directed at understanding, meeting and satisfying customers financial needs effectively- keeping in mind the organizational objective. If the corporate objective of the bank may be growth in business which may result in more profit, the sole objective of marketing is profit through customer satisfaction. Marketing is much border concept than selling. While selling starts with the bank, for marketing the starting point is market.
Selling focuses on products while focus for marketing is customer’s needs and wants. While selling emphasizes on exchange concept, marketing is concerned with value concept. In selling cost determine the price while in marketing customer determines the price s. Selling may thrive of the casual relationship with customer while marketing believes in long term permanent relationship. Service Marketing In bank they don’t sell saving bank account, current account, fixed deposit, or various loan products like demand loan, personal loan, or term loan.
In fact what they sell is financial services. When a customer comes to bank, he comes with an expectation of satisfying some of his financial needs. Generally financial needs arise because of a customer’s following requirement. 1. 2. 3. 4. 5. 6. 7. Cash Accountability Security of valuable goods Transfer of money from one place to another Deferred payment facility where he wants to take something with a promise to pay in future. Liquidity Return on his funds Financial Advices To satisfy these needs they develop some products in the form of deposits, advance, remittance scheme etc.
But marketing means satisfying those needs rather than selling these products. A thorough understanding about the actual need of the customer can provide better insights to offer the relevant products to meet customer’s expectations. But the message for bank marketing is they are dealing in services and in products. In marketing physical products like a soap, fridge, or a motor cycle (physical goods) different from selling services in a bank or a saloon or a restaurant or an educational institute (services). There is a substantial difference between marketing of physical product and marketing of services.
This will be clear if we analyze the core characteristics of services. Services are intangible one cannot touch it, smell it or see it only he can experience or feel. A good is an essence an object, a thing. A service in essence is a performance. The marketing task for service marketers becomes difficult as he cannot measure the impressions of the customers correctly. In practice the customers tent to be attentive to tangible clues about the service. The evidence that service marketers manage may be through physical environment, communications and prices.
The other characteristics of services products are that production and consumption of services take place simultaneously. If a pair of reebok shoes is manufactured in china and consumed in India or a Nirma 23 May 24, 2009 [Marketing Communication in Banks] soap is manufactured in Ahmadabad and consumed in Mumbai the user of the products are not aware of the products. But to have a feel of the service of a particular branch of bank, to enjoy in-flight service of an airway or to have a hair cut of Amitab Bhachan’s style one has to enter the bank premises, fly in air lines, or sit before mirror in a saloon respectively.
It is because of this characteristics that a marketing man has to enter that user derive satisfaction out of his involvement in the service delivery process. Not only the mood behavior but approach of the service provider but also those attributes of the receiver may influence the service quality. Hence delivery of the service to the satisfaction of the customer becomes subjective and judgmental. Another critical aspect of the service product is its heterogeneity. A particular brand of BPL TV or Mercedes car sold through any dealer may be same throughout the world.
But service product offered at 1000 branches of banks may be of 1000 types. Hardly service product provides any scope for standardization of the products. This lack of homogeneity creates a particular problem for the service marketer. If a customer is not satisfied with a particular dealer of BPL TV he will go to another dealer but if he is not satisfied with the service of the branch of bank he will hardly use the service of the service from another branch of same bank because he will generalize quickly that service of that bank is not good.
Service products are easily perishable in the sense that there is no scope to hold an inventory of the service product like physical products. If on a particular day on a Saving Bank Account counter of a bank only 5 people come avail the facility the opportunity of serving more people on that particular day is lost forever. If an airline flies on a particular rout on a particular day with 20 seats vacant, the opportunity to generate more revenue is lost forever. This necessitates the responsibility of service marketing is manage the supply and demand by regulating flow of customer evenly throughout the delivery period.
Bank’s services products in contrast to physical products have a particular characteristic in terms of lack of distribution channel, relationship between service producer and service receiver, absence of patent rights, non availability of information with third parties and high level of government intervention etc. Whereas goods marketers may be able to move prospective customers from brand awareness to brand preference with packaging, promotion, pricing and distribution, service marketers usually cannot.
How service personals conduct themselves in presence of customers, how they act, what they say, what they don’t say, there overall appearance – influences whether customers buy from firm again. But a superior physical product can be manufactured in a factory, packaged and delivered intact to the customer. Now a day’s marketing is a way of exploring opportunities. When organizations are trying to develop market orientation, basically it refers to creation an environment where all the staff should speak one language in terms of creating value to the customer through their activities.
In any discussion, on marketing concept, it is worthwhile to mention the differences between “products features” and “Products benefits”. The customers are more interested in benefits than features. 24 May 24, 2009 [Marketing Communication in Banks] Following e. g. in terms of credit card may clarify the point in better way. Credit Card:- Features 1. It is a plastic Card. 2. It is a means of payment 3. It can be used to take credit 4. A known interest is charged on credits outstanding. 5. It has a distinguishing color 6. You can get a copy of every bill 7. It is more secure than cash.
Benefits 1. It is easy to carry in purse. 2. You don’t have to carry a large sum of cash. 3. You can purchase goods and services now and pay later. 4. You always know how much credit card will cost. 5. You will be recognized as a person of distinction. 6. You can keep a running total of commitments. 7. Only your sign will commit you to debt. The above e. g. shows that the banker should be able to communicate the benefits of the products to enable the customer to choose a product that satisfies his needs. Any marketing activity begins with information about the customers.
Though not much effort has been made by Indian bank to crate data base of the customers they have been able to percolate down the line the message that is “Successful banking is creating and keeping the customers”. Relevance of marketing to Indian bank The Indian banking is undergoing a metamorphosis since last few years. The discontinuous and turbulent changes have forced bank to come out of their traditional mind set and act proactively not only to face the challenges bravely but also to survive and grow in the fiercely competitive scenario.
Strategic change management on the part of banker necessitated suspending of existing structures and believe and in some cases abandoning the age old practices. To have this paradigm banks need to have a very drastic attitudinal change at all level of organization. To break the paradigm and or rules and system orientation, the banker of today needs to have more and more customer oriented. The traditional manager was sitting in his cabin and waiting for the customer. His job was to accept deposits, lend money and handle instrument for collection or remittance.
Because the business was profitable there was no need to analyze for the competition. But perspective for the present manager has undergone change. He has to go out and get the business. He will be nowhere if he prefers to stick to his seat. Once out he has to study the market. Intermediation banking is declined. Distinction between commercial /developmental/specialized banks is going to vanish. Every organization is trying to function as financial supermarket. Electronic technology has changed the entire service delivery process 25 May 24, 2009 [Marketing Communication in Banks] here by considerably reducing the prospect of cross selling. The quality of the human assets is going to decide the quality of Bank. The cash and the currency are being replaced by the credit cards and checks. The bankers have entered into a phase of buyers market where the customers no longer want the products off the selves. They want Taylor made service. Market segmentation into specialized market is going to be the order of the day. All these changes call for marketing approach on the part of banker. Marketing in the simplest form refers to giving value to the customers. It is the way of organizing the organization.
It is an attitude of mind. It is proactive thinking In terms of understanding the customer, evaluating competition and monitoring the environment. Since nationalization, banks in India dilute their commercial character in name of social banking and as a result profit took a back seat undermining their financial health. Till 1990 bakers were perfectly comfortable with their unparallel growth in terms of bank’s geographical coverage, achievement in priority sector, leading contribution towards capital formation and their role as an allocator of scarce financial resource to various sectors of economy.
But with the advent of liberalization and deregulation in financial sector, mushroom growth of non banking, financial institutions, mutual funds, long term developmental financial institutes taking part in commercial banking operations, entry of new , private and foreign banks and diversified need of ever demanding customers, the banks have started feeling the need of having a strategy to face these challenges. The new environment calls for some new competencies and greater professionalism to sail through this turbulent phases when banks are finding sea-changes in their areas of operations.
Though the banks have started learning the art of managing changes the pace and the intensity of change sweeping across the banking horizon has prevented bankers in claiming to have the desired level of competencies and professionalism. Service with a smile is a synonymous with the quality service. But today’s quality service encompasses several dimensions. If we analyze the paradigm shift if quality concept as given below, we may be able to relate the quality services as an integral part of bank marketing. Excellent service is the foundation for excellent marketing.
When service is excellent service is easier. Quality services help bankers to raise customer’s perceived value in service there by making any price rise more potable to the customer. But aggressively marketing a low quality service in the essence, the core, of the service marketing are the banks prepared themselves to identify themselves as partners in quality culture. Unfortunately rendering quality service has been a matter of great concern for bank management. As the staff members who constitute the segment of internal customers have developed an indifferent attitude towards customer service.
In service industry like banks, the service provider i. e. staff member have to be significant part of service. The quality of the employee influences the quality of the service which ultimately influences the effectiveness of the service marketing. Hence marketing job becomes more critical in successfully implementing the strategies of internal marketing. According to Leonard L. berni and A Parasuram “Internal Marketing attracting, developing, motivating and retaining qualified employees through job products that satisfies their needs.
The ultimate goal of 26 May 24, 2009 [Marketing Communication in Banks] internal marketing is to encourage effective marketing behavior. Only a satisfied or a motivated employee can satisfy a customer. The employee striving to for meeting customer expectation should have clear vision. Most of the employees may be physically present but the organization may not be able to keep them mentally and emotionally. A clear understanding of the vision and mission will add dignity to the work and make the job more meaningful.
Often service providers are ill prepared for delivering quality services encompassing its various dimensions like reliability, tangibility, responsiveness, assurance and empathy. The employers need to have knowledge of banks products, their features and how they benefit the customer and pricing. An added knowledge of banks fundamental strengths and achievements may push the negotiation further. Needless to say they too arrive at a win-win situation; they are also required to reply to customers quarry about the benefits extended by the competitors. Banking can mostly be carried by trong common sense. By using this precise virtue, an employee can understand customer’s personality, value, likes and dislikes. In case of need a banker can master some questioning and negotiation skills. But what today’s customer wants most is personalized presentation of knowledge which will appeal to their needs, desires, behavior, value and interest. A positive and persistent attitude must be marketer’s valuable weapon. When a customer goes to a bank he possesses enormous faith on them and they have to justify themselves as trustworthy in his eyes.
The fundamental skills mentioned above can be possessed provided one approach his/her work with positive attitude. Attitudes are difficult to be changed by training either class room or on job unless the employee decides to change it. Attitudinal change is the prime necessity at this present moment. All banks have started realizing that to bring about the market orientation, internal marketing has to be practiced in a big way. Managers either at middle or at senior level s have to perform the role of coach, counselor and mentor to bring about desired changes.
Service is a performance and it is difficult to separate performance from people. Investing in people quality in a service industry will certainly enhance product quality. Many times one may wonder why banks not avail promotional tools like advertising to sell their products to mass markets. Now withstanding the huge cost of advertising which may affect bottom line of bank, the bankers are not sure of service assurance from the front line staff. The lack of skill accentuated by attitudinal problem limits the guarantee to the service quality.
The poor social, political and PR skills needs up gradation. Frontline staff needs empowerment to use discretion to be concerned about the customer. Frontline staff needs empowerment to use discretion to be concerned about the customer, to take the initiative or they will continue to refer all the matters in hierarchical chain there by allowing opportunities to pass by. Lastly teamwork has to be the order of the day if customers have to experience several moments of truth during their brief interaction with employees at the branch premises. 27 May 24, 2009 [Marketing Communication in Banks]
Transaction Banking Vs Relationship banking It is sufficiently well established that the cost of acquiring a new customer is nearly 5 times than that of retaining one growing concern for customer. Retention has in tent focus attention on newly emerging concept of relationship marketing. When we target at a customer base of 2 A. D. it is natural to have emphasis on relationship marketing rather than carrying transaction on camel relationship basis. This call on concentration on building unique relationship between individuals customers on a one-to-one basis.
Since the service component will become more critical in building long term relationship, the organization should emphasis on internal marketing, empowerment of front line people and the training of the employees to be marketing personal at branches. 28 May 24, 2009 [Marketing Communication in Banks] Marketing of services needs to be different from that of products Services often compete with goods to offer similar core benefits to customer, but this does not mean that marketing management task s are the same. There are generally both contextual and generic differences between goods and services marketing.
Although latter are likely to narrow over time, he former will remain, requiring service marketers to play a number of roles not usually expected of their counterparts in manufacturing industries. Christopher H. Loveslok Services of course often complete in the market place with goods that offer their users the same (or broadly similar) core benefits. For instance buying a service may be an alternative to doing it yourselves. Example range from lawn care and babysitting to industrial equipment maintenance. But just because a goods and services are close competitors does not mean that marketing management task for both are the same.
A packaged food marketer is likely to come to grief using similar strategies to market fast food restaurants , a successful automobile marketer will not necessarily find it easy to replicate that success in the rental car business. A marketing executive for a manufacturer of heavy electrical instrument will need to develop a new managerial style. As well as new strategies –if transferred to same company’s equipment servicing division. Marketing management tasks in the service sector can be differentiated from those in the manufacturing sector along two dimensions. Generic Difference between Goods and Services
Nature of the products “A Good, “Is an object, a device a thing: A service is a deed, a performance, an effort. ” Admittedly, Goods are sometimes an integral part of unparticular service, especially where rentals are concerned. But even in such an explicitly Good-Oriented service as the car-Rentals business, the relevant products attributes extents for beyond those normally associated with owing once car , Including such elements as pickup and drop-off locations (Often indifferent cities), inclusive insurance, maintenance, free connecting airport, shuttle buses long distance reservations, and speedy, courteous customers contact personal.
From the customer’s perspective, three distinctive characteristics of most of most service products are: their ephemeral, experiential nature. Different products methods Producing a service typically involves assembling and delivering the output of a mix of physical facilities and mental or physical labour. Sometimes customer’s role is relatively passive, more often they are actually involved in helping create the service product. These factors make it hard for service organization to control for quality and to offer customer a consistent product.
When you buy a hotel room, you are sure at some lesser percentage it will work to give you a good night’s sleep without any hassle, or people hanging on the walls and all the bad things that can happen in hotel. 29 May 24, 2009 [Marketing Communication in Banks] No inventories for service Because a service is a deed or performance, rather than a tangible item, it cannot be inventoried. Of course the necessary equipment, facilities and labour can be held in readiness to create the service, but these simply represent the productive capacity and not the product itself.
An unused capacity in a service organization is rather like a running tap in a sink with no plug: the flow is wasted unless customers are present to receive it. As a result the service marketers must work to smooth demand levels to match capacity. Lack of physical distribution channels for most services: The marketer’s task in manufacturing firms includes developing distribution strategies physically moving the product from the factory to the customers. Typically this involves the use of one or more intermediaries.
Because the services delivered to the person of the customer are consumed as they are produced, the service factory, retail outlet, and consumption point are often one and the same. Hence distribution strategies in service organizations emphasize the scheduling of service delivery as much as the locations. And unlike manufactures most service organizations have direct control over the service delivery outlet, either through outright ownership or tightly written franchise agreements.
Availability of electronic distribution channels for some services: A rapidly growing approach to service distribution is through electronic distribution channels. Physical goods and people cannot be teleported, as science fiction writer predict that some day they will. But services directed at the customers mind such as education, entertainment and information- can be telecommunicated through such channels such as radio, television and telephone, telescoping or microwave relays.
Moreover the use of remote printers, video recorders and telecopiers, even makes it possible for such services to produce a hard copy at receiving end, the closest we have yet come to
