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Towards marketing excellence in Banking

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- S.R.Rajagopal
“ ‘Marketing’is talk of the town” amongst bankers today. Marketing is, of course, a new focus for them. They should understand thoroughly what is marketing before they set out on road for the purpose. Marketing is all about developing products or services which satisfy wants, communicating to existing and potential customers the benefits of the products or services on offer to them and ensuring that demands are fulfilled to the satisfaction of both the customers, because they get what they want and the business, because it achieves its financial and growth objectives. Marketing is also a tool to accelerate business goals and to promote sales. Without marketing, products or services cannot be moved out from the manufacturing/servicing units. Thus marketing holds supremacy in sales and services of any sector so also of banking industry. To achieve excellence in marketing, bankers must pay special attention to certain important marketing elements.

Market Information:
Gathering information is the first step in marketing excellence. This is one of the important facilitating functions which mainly involve transfer of view, information, opinion etc. of customers to bank management. In the present day technologically sophisticated and result oriented competitive banking world, designing and servicing of products are carried out in anticipation of demand. Any product would become fruitless if designers do not have any knowledge about customers’ need, the ways and
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means and strategies to meet the demands of prospective customers. The demands will also have to be quantified for useful economical servicing precisely through various means of information gathered. These are all provided by market information. Moreover market information helps in identifying sectored and area needs so that strategies could be suitably adapted to successfully marketing the services. It also helps customers to review the products and services and improve their standard through constructive criticism and offering worthwhile suggestions. Electronic media is the most influential and powerful via media which plays vital role in viably marketing the products and services of banking. Gathering the market information is, therefore, one of the essential ingredients in marketing.

Marketing personnel

Banks for the purpose should employ an army of smart and intelligent people. These people should go around the field gathering information on selling of products, competitors products etc. They should informally try to find out the strategies adopted by their competitors whose products and services are successful and most appreciated by customers. Field staff should have the knowledge about the market, ability to forecast potential, catch leads and exploit them for the benefit of the organization. Erratic information gathering would be of no use to the management. Therefore, they should try to evolve a questionnaire containing critical and important information required in the market, according to the products and services designed by banks. This would ensure that no vital information is left out by the marketing staff. Apart
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from the filling up of questionnaire, field marketing personnel should apply their own common sense and intelligence to grasp the chunk of market information. Questionnaire or any such kind for that matter cannot be relied cent per cent. It is only a kind of method to gather information. Reliable information may be sucked by intelligent scrutiny of information gathered and by interacting meaningfully with the customers in the market. On the basis of reliable data collection, it will be easy for bank managements to evolve suitable marketing strategies to take wind in their side. Their sociability and public relation qualities must bear ability to project a proper and good image of the bank. They should also have the ability to maintain good social and business contacts and take effective steps for popularising/publicising the Bank’s schemes. Marketing staff should have the following conceptual skills:
· Ability to appreciate organisation’s goals and policies with wider perspective and initiatives
· Ability to conceive ideas and plans
· Ability to break down data into components, see how various elements fit with each other and the way they relate to various other elements
· Ability to see beyond the written words and visionary understanding of the circumstances
· Ability to collect and weigh all available information and relevant facts and within a reasonable time, determine the course of market action.
· Capacity for responsive listening and encouraging communication and sharing relevant information.
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Market segmentation:
Customers’ behaviour varies from one market segment to another – geographic, demographic and psychographic. Effective market segmentation is based on three groups viz. Measurability, accessibility and substantiality. The object of market segmentation being effective direction of marketing efforts to specific segments, the segments themselves should be accessible through channels of distribution, advertising media, banks’ sales force etc. Market segmentation will become meaningless if the access to the market is cumbersome. Segmentation being costly and involve separate marketing programme and sometime separate products as well, the segments should be substantial or large enough to warrant such efforts. Otherwise various diseconomies in service, marketing etc will arise. Generally market segmentation is resorted to only to serve the customers better and for guiding the development of the appropriate marketing mix. For example the outlets of banks – Housing Finance Branch, Personal Banking Branch, Corporate Financing Branch, etc. It is, therefore, all the more necessary, for the banks to go in for in-depth analysis on market segmentation and devolve strategies to suit their requirements for getting effective response from the market. Marketing strategy is nothing but a set of objectives, policies and rules that guide over the banks marketing effort, its level and mix. It is based on the assumption of probable customers’ response.
Market segmentation professes the following advantages:
· Banks need not waste their marketing efforts over the entire area
· Banks need not treat all customers alike
· Banks are able to pay proper attention to particular areas
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· Banks are able to frame and adopt separate policies to meet the needs of the different customers
· Banks can use the advertising media effectively and develop promotional programmes specifically for each segment
· Banks can make a more efficiently use of the marketing resource
· Marketing mix i.e. product, price, place and promotion can be designed with the target group in mind

If banks undertake direct marketing of their products and services, they are bound to enjoy among other things, the following benefits:
· Marketing process may be fast
· Intensive and specialised selling possible
· Better control over servicing
· Closer contacts with customers
· Maximum efforts possible for the promotion of their products and competing products can be effectively fought
· Facilitates demonstrating a special product, supervising its costs and providing better service
The only disadvantage in doing direct marketing would be the maintenance of separate establishment for marketing which costs dearer to the management. Also lot of manpower is wasted from top to bottom level in doing execution and operation of
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various marketing elements. To overcome this disadvantage, (with the introduction of state of the art modern technology in banks) lot of surplus manpower is readily available at management’s disposal. They can be effectively used in marketing with proper preliminary training.
Indirect marketing is nothing but getting the marketing exercise done by third party. In this process, lot of manpower and establishment cost is saved. At the same time, Banks will not have the option of implementing their own time tested marketing strategies (if at all already exists) but to depend on the efficiency of the party to whom marketing is entrusted. While third party’s marketing may either yield good or bad response, banks have to compromise their anticipation.
The discussed are the basic and generalized marketing elements applicable to any type of banking industry. If one does not evolve effective marketing strategies, sale of their products and services would bite them. With the dawn of liberalization and so called globalization of economy in the country, everybody should understand the primary importance of marketing and its efficient practicing. Otherwise, international banks which started pouring in into our country, would take away major chunk of business by way of their excellent and very advanced marketing strategies.
Products review
A bank faces a number of tasks and decisions to handle its aging products. The first task is to establish a system for identifying weak products.

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· Bank should appoint a product-review committee with representatives from marketing, planning and credit wings
· The review committee would collect data for each product showing trends in market size, market share, prices, costs and profits. This information is analysed in a scientific method/system developed by the committee. Products found to be worthless and duplicate in nature would be dropped
· When a bank decides to drop a particular product, it faces further problem that it has to find and develop a new product. Accordingly, it can identify six categories of new products in terms of their newness to the bank and to the market. :
o New to the banking space that creates an entirely new market
o New product lines that allow a bank to enter an established market for the first time
o Additions to existing products that supplement a bank’s established products-example housing loan – it can be supplemented by way of loan to repair and remodeling etc
o New products that provide improved performance or greater perceived value and replace existing products
o Existing products that are targeted to new markets or market segments
o New products that provide similar performance at lower cost

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Overall, if at all, banks want good thrust on their products and services, they should go in for direct marketing irrespective of its posture of slight disadvantage. Banks should take note of changing needs and wants of customers and must play their games constructively and qualitatively to provide satisfied service in order to be benefited not only them but also customers they serve.

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