NORTHERN INDIA ENGINEERING

COLLEGE

[ AFFILIATED TO GURU GOBIND SINGH

INDRAPRASTHA UNIVERSITY, DELHI]

Assignment of
Service Marketing
IN PARTIAL FULLFILLMENT OF
MASTER OF BUSINESS
ADMINISTRATION
( MBA )3rd SEMESTER
2013 -2015
SUBMITTED BY

SUBMITTED TO

PRIYA TALWAR
KAPOOR

Mrs. ASHIMA

1.

Hospitality

Hospitality marketing is unique because it deals with the tangible

product,like a bed in the hotel or food in the restaurant, but it also deals
with the intangible aspects of the hospitality and tourism industry. It is
about the experience in a trip and social status it brings eating in a fineddining restaurant. Hospitality marketing is very critical in the success of
any hospitality and tourism product, organization and tourist destination.
Proper marketing effort promotes a product or service that fills the needs
and wants of the consumers and at the same time, bring profits to the
organization or country that features it.
It is important to understand what service means in the hospitality industry
as it varies from industry to industry. To have a better understanding of
theservice one needs to find out what kind of service a customer would
expect. It could mean a variety of services put together like the way the
phone is answered or the way the Receptionists greets the customer or
the way a complaint is handled and what remedial action is taken etc. etc.
Customer's expectations are always high and before you advertise for a
particular service in the hospitality service it is necessary to find out
whether all the other components will back up the service on offer.
The components will consist of staff and tangible and intangible services.
Eventually whatever the product or the service may be, what matters is
how the product and service is being delivered. Staff play a very important
part of the delivery of this service and their behavior and attitude is
sometimes able to cover up other shortcomings. To provide the quality
service then we need to break the product into small components.
We need to first understand what the product itself is. For example if the
product is the Front Office, then what are the expectations of a guest from
the Front Office. Front Office is the place which is the first focal point of a
customer when a customer walks in. How is that handled. Is it courteously
with a smile or in a haphazard way. This is where the service quality is
going to make the difference as this will be the product that will back the
main product. If it is a telephonic reservation the courtesy and warmth
should be felt as the guest cannot see your smile. If the reservation is
made by a fax or letter the duration for the response will then become the
service that backs the product. Will the response be within 24 hours or will
it take days to reply as there is sufficient time for the arrival. What would
impress a guest. If the first contact is not prepared to serve beyond the

standard accepted you would find the guests assuming that everything
else on offer may be on line with the same quality of service.
Service on offer should be offered with all the trimmings as present day
customers have much to choose from. Service offered should be provided
with the staff being prepared to go that extra mile. Making customers
happy is the motto of the Hospitality service. It is a service that requires to
be done with a smile. People of all walks of life, will at some stage or the
other be able to enjoy being served by someone or the other.
Whether greeting a customer at the Reception or serving a drink at the
bar, the service has to be provided in a way that the customer is felt
special as the slightest dissatisfaction from any quarter may warrant a
complaint and may have consequences for the hotel and the staff
concerned. This may lead to the customer not wanting to visit again.
Service personnel should be those who are willing to serve without
expecting reward. Reward may come in different ways but if the
expectations of the staff is appreciation then they are bound to be
disappointed. It is better to be prepared for this. If the customer is happy,
then the he or she becomes the best advertisement to the organization.
Hospitality service is to serve others to make them feel special.

Marketing
According to the definition provided by the American Marketing
Association (2008), marketing refers to an organizational function and a
set of processes for creating, communicating, and delivering value to
customers and for managing customer relationships in ways that benefit
the organization and its stakeholders. In essence, marketing is a
consumer-oriented philosophy or way of doing business; companies
that are consumer-oriented will put consumers needs and wants on their
top priority.
From this perspective, the ultimate goal of marketing is therefore to create
and retain profitable customers by satisfying their demands. It is worth
noting that the goal of retaining profitable customers is particularly
challenging in Asia including Hong Kong. This is because people in this
region tend to be more group-oriented and the word-of-mouth effects are
especially strong.

Concluding example:
Four Seasons Hotels and Resorts is a hospitality organization that
embraces the marketing concept. The goals of Four Seasons are to
achieve a fair and reasonable profit to ensure the prosperity of the
company and its shareholders, as well as to to offer long-term benefits to

its hotel owners, shareholders, customers and employees. The company

satisfies the needs and wants of its customers by creating
properties of long-lasting value using superior design and supports them
with exceptional personal service experiences. Four Seasons highly
believes that the united efforts of all its employees are the key to satisfying
the customers; therefore it is important for all employees to work
cooperatively together and respecting each others contribution and
presence a result, there is a famous saying within the organization, we
seek to deal with others as we would have them deal with us. In this
example, Four Seasons clearly demonstrates that the organization
expects to generate profits by placing its guests needs and wants on the
top priority, and its success is an outcome of the service-oriented attitude
of all its personnel.

2.

Airlines

Todays competitive environment in the airline industry has never been

tougher or more unforgiving. Approaches that worked in the past simply dont cut
it in todays hyper-competitive marketplace.
According to a study on high performance in the airline industry, there are key
imperatives airlines need to address to navigate through todays increasingly
uncertain times:

In their efforts to manage growth, airlines should dominate home markets

and create an adaptive cultureone that can leverage the opportunities of a
rapidly changing marketplace.

In an industry of paper-thin margins, airlines need to significantly improve

their customer experience, and do so throughout the travel value chain.

And carriers might need to rethink their existing operating models to

manage operational excellence by wringing out value from merger and
acquisition activity, through sales and marketing and by new market entry and
alliances.
The airline industry has evolved rapidly in recent decades. It was a luxurious
form of travel in the early of the last century but has become one of the most
common methods of travel today. By 2003, there were 590 air million travellers in
Europe alone (Eurostat News, 2005). Globally, world passenger traffic (measured
in passenger-kilometres performed by scheduled airlines of ICAO contracting
states) was estimated to have increased by a factor of 3 from 1,367 billion to
3,807 billion between 1985 and 2005 (Hanlon, 1999, p.14). There was a phase
when most airlines were state-owned, followed by a period of oligopoly, before

we entered a stage when competition is as intense as any other commodity

goods (Shaw, 1999). Partly because of these changes, the service quality and
marketing of the airline industry also changed rapidly. In the early days, airlines
placed a heavy emphasis on service quality because it was a luxurious leisure
pursuit. Then, it became a secondary focus when it entered the oligopoly stage.
During this stage, price and price wars were the primary concern of the travellers
and the airline companies. This tide shifted again during the1990s, as some
airlines started to reemphasise and improve their service to attract travellers
(Zeithaml and Bitner, 1996). However, the focus of existing studies is on the
industry rather than the traveller.

MARKETING MIX FOR SERVICES

MARKETING
The marketing mix refers to the blend of ideas, concepts & features which
marketing management put together to best appeal to their target market
segments. Each target segment will have a separate marketing mix, tailored to
meet the specific needs of consumer in the individual segment.
Service marketing managers have found that the traditional four P's of marketing
are inadequate to describe the key aspects of the service marketer's job. The
traditional marketing mix is said to consist of the following elements of the total
offering to consumers: the product (the basic service or good, including
packaging, attendant services etc.); its price; the place where the product is
made available (or distribution channels - not generally a real issue for most
services, except perhaps for repair and maintenance); and promotion (marketing
communication: advertising, public relations and personal selling).

The Product Mix :

The product here refers to Airline service offering. Although service
products are essentially intangible, there are certain pyhsical
characteristics which consumer assess in their evaluation of product
choice. It the service mix, there is passenger services , cargo services, &
the mail services.
Attractiveness of the offering in terms of pyhsical features such as
consumers have high expectation, the food & drinks offered ,
entertainment.

Facilities available, associated level of services such as, quality of seats &
interior decoration. The product is quite complex one since it comprises of
aservice of certain tangibal such as free flight bags or free bottle or duty
free spirit in order to encourage booking.
Thr airline product includes 2 types of services, on the ground services
and in-flight services. The on-the ground, services include car parking
facilities at the airport, duty free shopping, reservation counter, efficient
checking of baggage, transport etc

Reservation :

Reservation of air-line ticket is now easy since it is fully computerized and

now you can reserve your ticket through thr internet. There are 24 hours
reservation, passenger can even specify their seat preference at the time
of reservation.

Check in :
The check-in and flight handlingsystem has also been
computerized. Kingfisher airline has offered tele-check-in facilities
to the passengers can call their special tele-check-in numbers at
the airport upto 45 minutes before the departure and confirm their
ticket. Their boarding card will await them at the airport. In order to
relax after their check-in special lounges are provided.

Baggage facilities :
About 30kgs of check-in baggage is allowed. Passenger, carrying
international tickets are given further allowance of around an added
30kgs priority baggage delivery is offered to the members.

Transport facilities :
Free transport service is provided to passengers in order to help
them reach their destination faster. Apart from these tangibal
elements the seating arrangement in the aircraft should be
spacious and comfortable. The in-flight foods provide physical
evidence to the airline service.

The Promotional Mix:

The aims of promotion fall into three main categories: to inform, to remind, & to
pursuade. It will always be necessary to inform prospective consumers about
new products & services, but other issue may also need this type of
communication to consumers; new uses, price changes, information to build
consumer confidence & to reduce fears, full description of service offering, image
building. Similarly consumers may need to get reminded about all these types of
issues, especially in the off-peak season.
It is vitally important to recognisse that promotion, or marketing communications
generally, may not always be aimed at potential consumer or end user of service.
In many business areas, it is to design promotions aimed at channel customers
to complement end user promotion.for e.g Airlines will need to promote their
services to tour operaters as well as end user.

The Pricing Mix:

Pricing in airlines is a fairly complex issues, since there are price variations
because variations in the level of demand, particularly due to seasonality, when
every Airlines gives price discounts & competition is tough. Airlines will always
faced by high levels of fixed costs, leading to variants of cost-plus pricing or ROI
as key determinants of pricing levels. It is important to includde pricing tactics
which exploit price sensitivities fully. It differentiates service levels & offer higher
price value added services, as in business class air travel.
We have diffenent authorities to manage and control domestic as well as
international air transport busines. The ministry of civil aviation, the indian airline
corporation, the national airport authority, the international airport authority of
india and the air india corporation are the bodies directly or indirectly influencing
the process of pricing decision.
The concept of fair price is very important, pricing can be classified in 3 ways.

Cheap value pricing :

This method of pricing is used to undercut the competition and
trigger immediate purchase. Though the unit profits aer low, the
overall profits are achived.
In order to meet the competition and consolidate their position in
the market. Air india and indian airlines have their price.

Value for money pricing :

In this method average price is charged for the product and it is
emphasized that it represents excellent value for money at this
price. This enables the airline to achieve the good level of profit.

Premium pricing :
In this method the prices are set above the market price either to
reflect the image of quality or the unique status of the product
premium pricing succeeds if the company enjoys a strong
reputation that the brand image alone is sufficient or the product
features are not shared by its competitors.

Place :
The air transport organisation has to make sure that the prospects dont face any
difficulty while buying the tickets and make necessary arrangements for the
confirmation of the booking. It is also confirmed that the users booking their
luggages do not face any inconveniences.
Another dimension of place is related to the location and management of offices
of airways, travel agent, tour operators, transport operators etc.
Easy
accessibility should be the main criteria in selecting the place. The place should
be safe, well connected with all weather proof roads where all the required
infrastructure facilities are available.
The water and sanitation facilities for the users and comfortable seating
arrangements must be made available. Lighting and ventilation facilities should
also be taken care of. The interior decoration furnishing, plantation needs
aesthetic sense so that the user forms a positive opinion regarding the airway
services.

People Mix :
Many services require personal interactions between customers and the firm's
employees and these interactions strongly influence the customer's perception of
service quality. For example, a person's stay at a hotel can be greatly affected by
the friendliness, knowledge ability and helpfulness of the hotel staff - in most
cases the lowest paid people in the organization. One's impression of the hotel
and willingness to return are determined to a large extent by the brief encounters
with the front-desk staffs, bellhops, housekeeping staff, restaurant wait staff and
so on, many of which take place outside the direct control of the hotel
management. In fact, the average hotel patron has very little contact with the
hotel supervisors and managers.
Therefore, management faces a tremendous challenge in selecting and training
all of these people to do their jobs well, and, perhaps even more important, in
motivating them to care about doing their jobs well, and, perhaps even more
important, in motivating them to care about doing their jobs and to make an extra
effort to serve their customers. After all, these employees must believe in what
they are doing and enjoy their work before they can, in turn, provide good service
to customers.
For this reason, human resources management policies and practices are
considered to be of particular strategic importance for in delivering high-quality
services. Establishing a customer-oriented culture throughout the firm and
empowering employees to provide quality service cannot be established merely
by putting up inspiring posters. Management leadership, job redesign and

systems to reward and recognize outstanding achievement are among the issues
that a successful service manager must address. The term "internal marketing"
has been coined to characterize the sets of activities a firm must undertake to
win over the hearts and minds of its employees to achieve service excellence.
The "people" component of the service marketing mix also includes the
management of the firm's customer mix. Because services are often experienced
at the provider's facilities, other customers who are being served there can also
influence ones satisfaction with a service. Ill mannered restaurants customers at
the next table, crying children in a nearby seat on an airplane and commercial
bank customers whose lengthy transactions take up the teller's are all examples
of unpleasant service conditions caused by a firm's other patrons.
On the other hand, the right mix of customers can greatly increase the enjoyment
of experience - for example, at entertainment services, such as nightclubs or
sporting events. Determining the desirable customer mix for a service,
segmenting the market into compatible groups and managing customer arrivals
to avoid conflict and enhance the service experience are essential components
of service management.

The Physical Evidence Mix:

This element of the expanded marketing mix addresses the "tangible"
components of the service experience and firm's image referred earlier. Physical
surroundings and other visible cues can have a profound effect on the
impressions customers form about the quality of the service they receive. The
"services cope" - that is, the ambience, the background music, the comfort of
seating and the physical layout of a service facility - can greatly affect a
customer's satisfaction with a service experience.
The appearance of the staff, including clothes and grooming, may be used as
important clues. Promotional materials and written correspondence provide
tangible reassurance; they can be incorporated into the firm's marketing
communications to help reduce customer anxiety about committing to the
purchase. Service firms should design these items with extreme care, since they
will play a major role in influencing a customer's impression of the firm. In
particular, all physical evidence must be designed to be consistent with the
"personality" that the firm wishes to project in the marketplace.

The Process Mix:

Because customers are often involved in the production of services, the flow and
progress of the production process is more important for services than it is for
goods. A customer who buys a television set is not particularly concerned about
the manufacturing process that made it. But the customer at a fine restaurant is
not merely interested in the end result - the cessation of hunger. The entire
experience of arriving at the restaurant - of being seated, enjoying the ambiance,
ordering, receiving and eating the meal - is important. The pace of the process
and the skill of the provider are both apparent to the customer and fundamental
to his or her satisfaction with the purchase.

The importance of the process is true even for less 'sensual" experiences. A
customer who applies for a loan at a bank evaluates the purchase not only by the
amount of the loan received and the interest rate paid. The speed and sensitivity
of the approval process, the interaction with the bank officers, the accuracy of
bank statements and the ease of getting redress if mistakes are found all affect
the person's attitudes about doing further business with the bank and his or her
willingness to recommend it to others. Therefore, when designing service
production processes, particular attention must be paid to customer perceptions
of that process. For this reason, marketing and operations are closely related in
service management.

Example
Jet airways:

Jet Airways, India's most preferred airline, is now giving the world a better choice
in the skies.
The airline operates over 350 flights daily across 44 destinations within India and
also operates flights to Nepal, Sri Lanka, Singapore, Malaysia, United Kingdom, Thailand, Belgium,
United States of America & Canada on one of the youngest and best maintained fleets. Jet
Airways plans to extend its international operations further in North America,
Europe, Africa & Asia in the coming years with the induction of wide-body aircraft
into its fleet years.
There are many more domestic airlines operating in India Eg:-Air Deccan, Go Air
etc. In 2001, with revenues of $ 542.18 MN, Jet Airways emerged as the most
popular domestic airlines in India. Jet Airways stated its operation in 1993; the
number of its passengers increased from 0.663 million in 2000-01.by 2001, when
other private airlines had stopped their operations, Jet Airways not only continued
to survive, but had become a formidable competitor to indias national domestic
airlines -(AIR INDIA). Jet Airways seemed to be lone challenger to AIR INDIA
with Sahara Airlines in the third position. Jet Airways's market share increased to
42 % in 2001 from 6.6 % in late 1990s. In 2001 , Jet Airways ran 215 flights per
day compared to INDIAN AIRLINES's 208.Unlike the loss making INDIAN
AIRLINES, Jet Airways is making profits. At the end of the first year, Jet Airways
achieved average seat factor close to break-even level of 71 %. Thereafter it

broke even & has been making profits ever since. In 2001, Jet Airways recorded
profits of rupees 125mn compared to AIR INDIA which recorded a loss of Rs
1.77bn. The following pie diagrams will show the growth made by Jet Airways in
the market share, passenger carried and the fleet size.

International Airlines:
In the international sector, Air India is the sole Indian service provider. However,
in the international market, the share Air-India is negligible compared to that of
the likes of British Airways and Emirates Air.

IATA - The International Air Transport Associations

IATA - The International Air Transport Association- was founded in Haryana,
CUBA, IN APRIL 1945. It is the prime vehicle for inter-airline cooperation in
promoting safe, reliable, secure and economical air service - for the benefit of the
world's consumers.
The international scheduled air transport industry is now more than 100 times
larger than it was in 1945. Few industries can match the dynamism of that
growth, which would have been much less spectacular without the standards,
practices and procedures developed within IATA.
At its foundation IATA had 57 members from 31 nations, mostly in Europe and
North America. Today it has over 230 members from more than 130 nations in
every part of the globe.

3.

Tourism Services

Marketing plays a significant role in any industry and particularly in a service industry
such as travel and tourism. Modern organisations cannot operate without the use of
promotion or market research as a key method of communicating with customers.
Many organisations allocate large budgets to marketing in order to maintain a
competitive edge and meet the needs of their customers. Tourism is one of the most
exciting and progressive industries in Australia. Part of the visitor economy, tourism
is also big business and it impacts on almost every other industry. Total tourism
consumption was worth more than $92 billion in 200809 and tourism directly
contributed $32.8 billion to Australias GDP in that period.Tourism is now one of the
largest industries in Australia, accounting for 486,200 jobs. The countrys tourism
industry has a larger output than:
agriculture, forestry and fishing;
communication services;

 and electricity, gas and water supply

Travel agents
The role of travel agents is to give advice and information and sell and administer
bookings for a number of tour operators. They also sell flights,ferry bookings, car
hire, insurance and accommodation as separate products. Thus, they are
distributors of products. Many have a bureaude change. Increasingly, travel agents
also do a little tour operating, for example putting together a holiday for a group.
This is known as tailor making holidays. Some industry professionals believe that
the role of the travel agent is in decline as many people are booking their own
holidays and travel on the Internet or by telephone directly to tour operators.
Components of Tourism
Tourism has many components comprising
1. Travel experience
2. Accommodations
3. Food
4. Beverage services
5. Shops
6. Entertainment
7. Aesthetics and
8. Special events

8 Ps
1. Product
Product in Tourism is basically the experience and hospitality provided by the service
provided.
In general the experience has to be expressed in such a way that the tourists see a
value in them.

2. Process
The process in Tourism include, (a) trip planning and anticipation, (b) travel to the
site/area, (c) recollection, (d) trip planning packages. The trip planning packages
include, maps, attractions en route and on site, information regarding lodging, food,
quality souvenirs and mementoes
3. Place and Time Location and Accessibility
The place and time in tourism is providing directions and maps, providing estimates
of travel time and distances from different market areas, recommending direct and
scenic travel routes, identifying attractions and support facilities along different travel
routes, and informing potential customers of alternative travel methods to the area
such as airlines and railroads.
4. Productivity and Quality
This is similar to other service industries. The quality is assessed by time taken for a
service, the promptness of the service, reliability and so on.
5. Promotion and Education
Like other services, the promotion should address, the accurate and timely
information helping to decide whether to visit target audience, the image to be
created for the organization, objectives, budget, timing of campaign, media to be
selected, and evaluation methods.
6. People
People is the centre for Tourism. It is more a human intensive sector. For hospitality
and guest relations it is very important to focus on people. It also plays a vital role in
quality control, personal selling, and employee morale.
7. Price and other user costs
The price of the tourism services depend on business and target market objectives,
cost of producing, delivering and promoting the product, willingness of the target,
prices charged by competitors offering similar product/service to the same target
markets, availability and prices of substitute products/services, and economic
climate. The possibility of stimulating high profit products/services by offering related
services at or below cost.
8. Physical Evidence
In Tourism the physical evidence is basically depends on travel experience, stay, and
comfort. Here, the core product is bed in case of stay.

Example
Holidaybreak is the UKs leading operator of specialist holiday businesses, all with
high standards of service and product quality and market leading positions in the UK
and other major European markets. In 2004 the Group provided 2.3m holidays in
over 100 countries worldwide.The business generates substantial cash, delivers
double-digit margins and has proven resilient in the face of changing market
conditions. The Group has the financial strength to respond to changing market
trends and exploit opportunities for both organic and acquisition based growth whilst
paying an attractive dividend.
Hotel Breaks
The Hotel Breaks divisions core business specialises in UK and overseas leisure
breaks. It is the principal provider of domestic short breaks to UK travel agents and
has also been rapidly developing direct and internet distribution. The division
continues to introduce new products and distribution channels to build on an
outstanding record of success in recent years.
2004 Turnover: 120.9m
1.7m holidays sold in year to 30/9/04
Strong relationship with 3000+ hotels, 250+ hotel suppliers
Flexible cost base no commitment to hotel room allocations
Fixed selling margin
Strongly cash generative negative working capital
Operates in a growth sector
Acquired Dutch market leader in on-line leisure breaks Bookit (BRC) for 23.1m on
22 December, 2004
Adventure Holidays
Three businesses, Explore (UK), Djoser (Netherlands) and Regal Dive; market
leaders in softadventure and scuba diving holidays. Explore offers a range of
cycling, walking and trekking adventure short breaks and family adventures as well
as the core worldwide, escorted tours programme. Explore adds genuine value to

the customer experience, creating holidays which would be difficult or impossible for
the DIY customer to replicate.
2004 Turnover: 37.4m
41,800 holidays sold in year to 30/9/04
Increasing demand for active, special interest and unusual holidays
Over 400 different tours to 107 countries
Tight control of tour load factors underpins profitability
Flexible cost base Low commitment to flight seats
Acquired Dutch market leader Djoser for 15.7m on 19 January 2005
Camping
The original part of the Holidaybreak group. Provides pre-sited mobile-home and
canvas holidays on high-grade, third-party owned campsites throughout Europe.
Customers are mainly families who book direct, attracted by good quality selfcatering accommodation in desirable locations, with excellent leisure amenities.
Flexibility, informality, independence and added value services all add to the appeal.
2004 Turnover: 123.2m
570,000 holidays sold in year to 30/9/04
Market leading brands Eurocamp and Keycamp
Customers from nine different countries, mainly UK, Holland and Germany
9700 mobile-homes and 4500 tents on 212 campsites in France, Italy and seven
other countries
High levels of customer satisfaction and repeats

4. Health Care and

Wellness:Banking and Insurance
BANKING

Marketing approach in banking sector had taken significance after 1950 in western
countries and then after 1980 in Turkey. New banking perceptiveness oriented
toward market had influenced banks to create new market. Banks had started to
perform marketing and planning techniques in banking in order to be able to offer
their new services efficiently. Marketing scope in banking sector should be
considered under the service marketing framework. Performed marketing strategy is
the case which is determination of the place of financial institutions on customers
mind. Bank marketing does not only include service selling of the bank but also is
the function which gets personality and image for bank on its customers mind. On
the other hand, financial marketing is the function which relates uncongenially,
differences and non similar applications between financial institutions and judgement
standards of their customers.The reasons for marketing scope to have importance in
banking and for banks tointerest in marketing subject can be arranged as:Change in
demographic structure: Differentiation of population in the number andcomposition
affect quality and attribute of customer whom benefits from banking services.Intense
competition in financial service sector: The competition became intense due tothe
growing international banking perceptiveness and recently being non limiting for new
enterprises in the sector. Increase in liberalization of interest rates has intensified the
competition.

Banks wish for increasing profit: Banks have to increase their profits to create new
markets, to protect and develop their market shares and to survive on the basis of
intense competition and demographic chance levels.
The marketing comprehension that are performed by banks sinnce 1950 can be
shown as in following five stages:
1. Promotion oriented marketing comprehension
2. Marketing comprehension based on having close relations for customers
3. Reformist marketing comprehension
4. Marketing comprehension that focused on specializing in certain areas
5. Research, planning and control oriented marketing comprehension

THE MARKETING MIX IN BANKING SECTOR

SERVICE

Recently, banks are in a period that they earn money in servicing beyond selling
money. The prestige is get as they offer their services to the masses.Like other
services, banking services are also intangible. Banking services are about the
money in different types and attributes like lending, depositing and transferring
procedures. These intangible services are shaped in contracts. The structure of
banking services affects the success of institution in long term. Besides the basic
attributes like speed,security and ease in banking services, the rights like
consultancy for services to be compounded are also preferred.
PRICE
The price which is an important component of marketing mix is named differently in
the base of transaction exchange that it takes place. Banks have to estimate the
prices of their services offered. By performing this, they keep their relations with
extant customers and take new ones. The prices in banking have names like
interest, commission and expenses. Price is the sole element of marketing variables
that create earnings, while others cause expenditure. While marketing mix elements
other than price affect sales volume, price affect both profit and sales volume
directly.Banks should be very careful in determining their prices and price policies.
Because mistakes in pricing cause customers shift toward the rivals offering likewise
services.Traditionally, banks use three methods called cost-plus, transaction
volume baseand challenging leader in pricing of their services.
DISTRIBUTION
The complexity of banking services are resulted from different kinds of them. The
most important feature of banking is the persuasion of customers benefiting from
services.Most banks services are complex in attribute and when this feature joins
the intangibility characteristics, offerings take also mental intangibility in adddition to
physical intangibility. On the other hand, value of service and benefits taken from it
mostly depend on knowledge,capability and participation of customers besides
features of offerings. This is resulted from the fact that production and consumption
have non separable characteristics in those services.Most authors argue that those
features of banking services makes personal interactionbetween customer and bank
obligatory and the direct distribution is the sole alternative. Due to this reason, like
preceding applications in recent years, branch offices use traditional method in
distribution of banking services.
PROMOTION
One of the most important element of marketing mix of services is promotion which
is consist of personal selling, advertising, public relations, and selling promotional
tools.
PERSONAL SELLING

Due to the characteristics of banking services, personal selling is the way that most
banks prefer in expanding selling and use of them.Personal selling occurs in two
ways. First occurs in a way that customer and banker perform interaction face to
face at branch office. In this case, whole personnel, bank employees, chief and
office manager, takes part in selling. Second occurs in a way that customer
representatives go to customers place. Customer representatives are specialist in
banks services to be offered and they shape the relationship between bank and
customer.
ADVERTISING
Banks have too many goals which they want to achieve. Those goals are for
accomplishing the objectives as follows in a way that banks develop advertising
campaigns and use media.
1. Conceive customers to examine all kinds of services that banks offer
2. Increase use of services
3. Create well fit image about banks and services
4. Change customers attitudes
5. Introduce services of banks
6. Support personal selling
7. Emphasize well service
Advertising media and channels that banks prefer are newspaper, magazine,
radio,direct posting and outdoor ads and TV commercials. In the selection of media,
target market should be determined and the media that reach this target easily and
cheaply must be preferred.
Banks should care about following criteria for selection of media.
1. Which media the target market prefer
2. Characteristics of service
3. Content of message
4. Cost
5. Situation of rivals

Ads should be mostly educative, image making and provide the information as
follows:
1. Activities of banks, results, programs, new services
2. Situation of market, government decisions, future developments
3. The opportunities offered for industry branches whose development meets
national
benefits.487
PUBLIC RELATIONS
Public relations in banking should provide;
1. Establishing most effective communication system
2. Creating sympathy about relationship between bank and customer
3. Giving broadest information about activities of bank.
It is observed that the banks in Turkey perform their own publications, magazine and
sponsoring activities.

SELLING PROMOTIONAL TOOLS

Another element of the promotion mixes of banks is improvement of selling. Mostly
used selling improvement tools are layout at selling point, rewarding personnel,
seminaries,special gifts, premiums, contests.
DEVELOPMENT IN MARKETING SCOPE AT THE ASPECT OF SERVICE
MARKETING
Marketing scope develops day to day. These developments carry special
significance for service sector in which customer and service producer interact
closely.
INTERNAL MARKETING
Especially in service sector like external relations, internal relations also have
significance. It requires finding and keeping successful personnel.For personnel of
the organization to be considered their own goals and service situation, values of the

organization are sold to them. The communication techniques carried out for
customers are also performed for the personnel in internal marketing and this two
techniques go together. For example, the ads that aim creating firms image should
be prepared with regarding to audience which is composed of firms personnel.
NETWORK MARKETING
This approach takes the organization as a sequence which involves producer and
customer that market services to each other in the organization. In this structure, the
activities of departments that compose organization would be more focused on
market. This will also affect the structure of organization.
RELATIONSHIP MARKETING
It was mentioned that close relationship was established between producer and
customer in service sector. In addition to this, life cycle of a customer relationship
was also mentioned under the product outline.According to the researchers,
maintaining the relationship for extant customer increases the profit of firms. It
should be emphasized that this fact has an importance of service sector.

INSURANCE
Wherever there is uncertainty there is risk. We do not have any control over
uncertainties which involves 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
also important that you let others know about the quality of your positive
contributions.

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 organisation survives and thrives in the right
perspective.

Marketing --Mix For Insurance Companies

The to best meet the needs of its targeted market. The Insurance business deals
in selling services and therefore due weight-age in the formation of marketing mix
for the Insurance business is needed. The marketing mix includes sub-mixes of
the 7 P's of marketing i.e. the product, its price, place, promotion, people,
process & physical attraction.
The above mentioned 7 P's can be used for marketing of Insurance products and
banking services, in the following manner:
1. PRODUCT
A product means what we produce. If we 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.

2. PRICING
With a view of influencing the target market or prospects the formulation of
pricing strategy becomes significant. 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 determines
people's 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 muchgreater 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.
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, organisation 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 to design 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. Human
resources can be developed through education, training and by psychological
tests. Even incentives can inject efficiency and can motivate people for
productive and qualitative work.
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 smoothen 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.
A. Flow of activities: all the major activities of banks follow RBI guidelines. There
has to be adherence to certain rules and principles in the banking operations.
The activities have been segregated into various departments accordingly.
B. Standardization: banks have got standardized procedures got typical
transactions. In fact not only all the branches of a single-bank, but all the banks
have some standardization in them. This is because of the rules they are subject
to. Besides this, each of the banks has its standard forms, documentations etc.
Standardization saves a lot of time behind individual transaction.
C. Customization: There are specialty counters at each branch to deal with
customers of a particular scheme. Besides this the customers can select their
deposit period among the available alternatives.
D. Number of stores: numbers of steps are usually specified and a specific
pattern is followed to minimize time taken.
E. Simplicity: in banks various functions are segregated. Separate counters exist
with clear indication. Thus a customer wanting to deposit money goes to
deposits counter and does not mingle elsewhere. This makes procedures not
only simple but consume less time. Besides instruction boards in national boards
in national and regional language help the customers further.
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. 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, hhalf 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.The physical evidences include signage, reports,
punch lines, other tangibles, employees dress code etc.
A. Tangibles: banks give pens, writing pads to the internal customers. Even the
passbooks, chequebooks, etc reduce the inherent intangibility of services.
B. Punch lines: punch lines or the corporate statement depict the philosophy and
attitude of the bank. Banks have influential punch lines to attract the customers.
Banking marketing consists of identifying the most profitable markets now and in
future, assessing the present and future needs of customers, setting business
development goals, making plans-all in the context of changing environment.

Conclusion
In India, 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 bank assurance. Another innovative distribution channel that could be
used are the non-financial organisations. We cant deny the fact that if foreign
banks are performing fantastically, it is not only due to the sophisticated
information technologies they use but the result of a fair synchronization of new
information technologies and a team of personally committed employees. The
development of human resources makes the way for the formation of human
capital.
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