MARKETING IN BANKING

NIKITA GUPTA

INTRODUCTION
A BANK IS A FINANCIAL INSTITUTION LICENSED BY A GOVERNMENT. ITS PRIMARY ACTIVITIES INCLUDE BORROWING AND LENDING MONEY.BANKS NO LONGER RESTRICTED THEMSELVES TO TRADITIONAL BANKING ACTIVITIES, BUT EXPLORED NEWER AVENUES TO INCREASE BUSINESS AND CAPTURE NEW MARKET. -IN THE 1990S, GREATER EMPHASIS BEING PLACED ON TECHNOLOGY AND INNOVATION. -NEW CONCEPT LIKE PERSONAL BANKING, RETAIL BANKING, TOTAL BRANCH AUTOMATION, ETC WERE INTRODUCED

PRICE
THE PRICE MIX IN THE BANKING SECTOR IS NOTHING BUT THE INTEREST RATES CHARGED BY THE DIFFERENT BANKS.

LET'S UNDERSTAND THIS WITH AN EXAMPLE. A PARTICULAR BUYER APPROACHES FOR A CAR LOAN SAY FOR A PERIOD OF 3 YEARS. HE IS CHARGED RS. 20,000 AS INTEREST. HOWEVER IF A SALES REPRESENTATIVE OF ANOTHER BANK COMES TO KNOW OF THIS DEAL HE WILL TRY TO ATTRACT THE CUSTOMER BY GIVING HIM A BETTER DEAL THAT IS A LOAN AT A LOWER RATE ON INTEREST. IN THIS WAY DUE TO THE HIGH LEVEL OF COMPETITION THE CUSTOMER BENEFITS.

PRODUCTS
BANKS PRODUCTS: (A) DEPOSITS: SAVINGS, CURRENT, FIXED ETC. (B) ADVANCES:A) TERM LOAN,B) CLEAN LOAN, C) BILLS DISCOUNTING, D) ADVANCES, E) PRE-SHIPMENT FINANCE, F) POST-SHIPMENT FINANCE, G) SECURED AND UNSECURED LINES OF CREDIT. (2) NON-FUND ORIENTED: A) GUARANTEES, AND B) LETTER OF CREDIT. (C) INTERNATIONAL BANKING: A) LETTER OF CREDIT, AND B) FOREIGN CURRENCY. (D) CONSULTANCY: A) INVESTMENT COUNSELLING, B) PROJECT COUNSELLING, C) MERCHANT BANKING, AND D) TAX CONSULTANCY. (E) MISCELLANEOUS: A) TRAVELLER CHEQUES, B) CREDIT CARD, C) REMITTANCES, D) COLLECTIONS, E) SALE OF DRAFTS, F) STANDING INSTRUCTIONS, AND G) TRUSTEESHIP.

PLACE
PLACE MIX IS THE LOCATION ANALYSIS FOR BANKS BRANCHES. THERE ARE NUMBER A FACTORS AFFECTING THE DETERMINATION OF THE LOCATION OF THE BRANCH OF BANK. LIKE POPULATION CHARACTERISTICS, COMMERCIAL, PROXIMITY OF OTHER COMMERCIAL OUTLETS.

PROMOTION
PROMOTION IS NOTHING BUT MAKING THE CUSTOMER MORE AND MORE AWARE OF THE SERVICES AND BENEFITS PROVIDED BY THE BANK.

THE BANKS TODAY CAN USE A LOT OF NEW TECHNOLOGY TO COMMUNICATE TO THEIR CUSTOMERS. TWO OF THE FASTEST GROWING MODERN TOOLS OF COMMUNICATING WITH THE CUSTOMERS ARE:
1. INTERNET BANKING 2. MOBILE BANKING

PEOPLE
ALL PEOPLE DIRECTLY OR INDIRECTLY INVOLVED IN THE CONSUMPTION OF BANKING SERVICES ARE AN IMPORTANT PART OF THE EXTENDED MARKETING MIX. IN A BANK ORGANIZATION, EMPLOYEES ARE ESSENTIALLY THE CONTACT PERSONNEL WITH CUSTOMER. THEREFORE, AN EMPLOYEE PLAYS AN IMPORTANT ROLE IN THE MARKETING OPERATIONS OF A SERVICE ORGANISATION. EMPLOYEE-CUSTOMERS THROUGH NEED MEETING JOB-PRODUCTS. INTERNAL MARKETING PAVES WAY FOR EXTERNAL MARKETING OF SERVICES. IN INTERNAL MARKETING A VARIETY OF ACTIVITIES ARE USED INTERNALLY IN AN ACTIVE, MARKETING LIKE MANNER AND IN A COORDINATED WAY. A SERVICE COMPANY CAN BE ONLY AS GOOD AS ITS PEOPLE. A SERVICE IS A PERFORMANCE AND IT IS USUALLY DIFFICULT TO SEPARATE THE PERFORMANCE FROM THE PEOPLE. IF THE PEOPLE DONT MEET CUSTOMERS' EXPECTATIONS, THEN NEITHER DOES THE SERVICE. THEREFORE, INVESTING IN PEOPLE QUALITY IN SERVICE BUSINESS MEANS INVESTING IN PRODUCT QUALITY.

PROCESS
THE PROCESS MIX CONSTITUTES THE OVERALL PROCEDURE INVOLVED IN USING THE SERVICES OFFERED BY THE BANK.

LET'S TAKE FOR EXAMPLE THE PROCESS FOR APPLICATION FOR A CAR LOAN.
NOW THIS MAINLY INVOLVES 3 THINGS. 1. PRODUCING OF PROPER DOCUMENTS 2. FILLING UP OF APPLICATION FORM 3. PAYING FOR THE INITIAL DOWN PAYMENT

PHYSICAL EVIDENCE
PHYSICAL EVIDENCE IS THE OVERALL LAYOUT OF THE PLACE. HOW THE ENTIRE BANK HAS BEEN DESIGNED. PHYSICAL EVIDENCE REFERS TO ALL THOSE FACTORS THAT HELPS MAKE THE PROCESS MUCH EASIER AND SMOOTHER. FOR EXAMPLE IN CASE OF A BANK THE PHYSICAL EVIDENCE WOULD BE THE PLACEMENT OF THE CUSTOMER SERVICE EXECUTIVE'S DESK, OR THE LOCATION OF THE PLACE FOR DEPOSITING CHEQUES. IT IS VERY NECESSARY THE PLACE IS DESIGNED IN SUCH A MANNER SO AS TO ENSURE MAXIMUM CONVENIENCE TO THE CUSTOMER AND CAUSE NO CONFUSION TO HIM.

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