PRINCIPLES & PRACTICES
OF BANKING
FOR
JAIIB
Module-D
Marketing of Banking Services
MARKET
• Not necessarily a geographical area, a
place where goods can be sold or bought.
•
Area wise Local , Regional , National or global
market market
Product Commodity, share, Bullion, real
wise estate, retail loan markets
Transacti Cash/spot, future market
on wise
Volume Retail Or Whole sale market
wise
MARKETING
Marketing is the process of determining
consumer demand for a product or service,
motivating its sale and distributing it into
ultimate consumption at a profit
A management function- need
analysis, product, sale & distribution
A Business Philosophy-customer
focused-profit oriented.
Selling & Marketing
selling is an It is a concept includes
operational activity need analysis, product dev,
consumptions & satisfaction
It is product focused It is customer focused
It is seller oriented It is buyer/ customer
oriented
It encases profitable It is buyer need oriented
opportunity
It aims earn profit It aim at earning profit by
by maximizing sales [Link] satisfaction
[Link]. Physical Goods Services
1. Tangible Intangible
2. Homogeneous Heterogeneous
3. Product and distribution Production, distribution
separated from and consumption re
consumption simultaneous process
4. A thing An activity
5. Core value produced in Core value produced in
factory buyer-seller interaction
6. Customers do not Customers participate in
participate in the production
production process
7. Can be kept in stock Cannot be kept in stock
8. Transfer of ownership No transfer of ownership
Market Mix
• Marketing mix is a set of marketing tools
used to pursue marketing objective.
These are 4Ps& 4Cs
– Product:- variety, quality, features, brand etc
– Price:- list price, discounts, payment period
– Promotion:- advertising, sales force, PR,DSA
– Place:- channels, coverage, locations,
inventory, transport
– Customer need
– Cost to customer
– Convenience
– communication
Consumer behavior
• Physiological needs- food, drink, sleep
• Safety needs-protection & economic
security
• Social needs-friendship, affection, love
• Esteem need- recognition, status &
success
• Self-actualization- self fulfillment
Financial position & Banking Needs
Stage financials Needs
Young High income- Credit card, auto loan,
Bachelor low liabilities low cost banking.
Half Nest Low liquidity- Mortgage loan, OD
(married & high needs Credit card, durable
young kids loans
Full Nest High liquidity Investment, FD, flexi
(married & High savings deposit
adult kids
Empty nest Reduced Social security &
Sr. citizen income reverse mortgage loan
PRODUCT
A product is anything that can be offered
to a market for attention, acquisition, use
or consumption that might satisfy a want
or need
PRODUCT PERSONALITY
THE CORE features
THE ASSOCIATED FEATURES
THE BRAND NAME & LOGO
THE PACKAGE AND LABEL
PRODUCT PLANNING
The process of product planning consists
Product Line, Product Mix, Branding,
Packaging and New product development.
PRODUCT LIFE CYCLE
Introduction, Growth, Maturity, Decline
The product Life cycle operates at three
levels product level, product sub category,
brand level.
50
45
40
35
30
25
20
15
10
0
Intro. Growth Maturity Decline
NEW PRODUCT DEVELOPMENT
Idea Screening
Concept Testing
Product Development
Test Marketing
Commercial Launch
DIVERSIFICATION
Concentric Diversification
Horizontal Diversification, forward/backward
Conglomerate Diversification-Additional
BRANDING
Line Extension
Brand Extension
Multi brands
New Brands
PACKAGING
Primary Package
Secondary Package
Shipping Package
LABELLING
Identify the product or brand
Describing information
Promoting the product through 'attractive
graphics'
PRICING
Price is the amount charged for product
or services or sum value of all the values
that consumers exchange for the benefits
or having or using the product or service
Different forms - Goods bought, hire
charges, tution fees
Dynamic Pricing - Varying prices
Flexibility
OBJECTIVE OF PRICING
Profit
Survival
Market Share
Cash Flow
Status Quo
Product Quality
Communicating Image
Short term/Long term
Consideration for setting PRICING
Cost Based
Value Based
Competition Based
PRICING METHODS
Mark up Pricing :Std. mark + Total cost
Absorption cost Pricing : Margin+ Total Cost
Target Return Pricing : Return Rate + cost
Marginal cost Pricing : Full variable cost + varying Fixed c
Perceived Value Pricing : Customer satisfaction
Value Pricing :to make feel High value at low price
Going Rate Pricing : Market price
Auction Type Pricing :
English Auctions :One seller many buyer
Dutch Auctions :Many seller one buyer or vice versa
Sealed Bid Auctions: one bid by one seller without
knowing others’ price
Group Pricing. : concession for bulk purchase
Functions of distribution channels
Market information
Promotion
Contact
Matching
Negotiation
Product information
Physical distribution
Financing
Characteristics banking products
Intangibility
Inseparability
Variability
Perishability
Client relationship
Branches & Other channels
Tele-banking
ATMs
Computerization
Plastic Cards
Virtual branches and automated video banking
Intermediaries in banking services
DSA
Automobile Dealers
Merchant establishments
Physical distribution
Transportation
Warehousing
Inventory
Tasks of physical distribution
Forecasting
Order processing
Inventory management
Storage
Protective packaging
Transportation
Promotion
Role of promotion
Persuasion
Inform
Reminding
Reinforcing
Promotion mix
Blended Mix of Promotion Tools
Personal
Advertising selling
Sales Public
Promotion Relations
Direct
Marketing
Promotion mix strategies
• Push strategy
• Pull strategy
Factors influencing promotion mix
• Types of product/market
• Buyer’s readiness stage
• PLC stage
Promotion mix integration
