1. MARKETING CONCEPT Market A situation where buyers and sellers of a commodity interact. Coming together of buyers and sellers of the same or similar commodities TYPES OF MARKET Geographical Area Product Nature of Transaction Volume of Transaction

2. 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 A Business Philosophy

3. EVOLUTION OF MODERN MARKETING Industrial revolution Digital revolution Barter System Customer and market driven Wants of customers CRM Customer Satisfaction Nothing is worthwhile unless it touches the customer

4. SellingMarketing Selling is an operational activity Marketing is a total management Selling is product focused Marketing is customer focused Selling is oriented to the needs of the firms Marketing is oriented to the needs of the buyer Selling encashes profitable opportunity marketing coverts customer needs into such opportunities Selling aims at maximizing sales volume Marketing aims at maximizing customer satisfaction

5. Selling= Factory > Products > Selling and promotion > Profits Marketing= Target market > Needs > integrated marketing > Profit by customer satisfaction

6. MARKETING MANAGEMENT A process of planning and executing the conception, pricing, promotion and distribution of goods and services and ideas to create exchanges with target groups that satisfy customer and organizational objectives. FUNCTIONS OF MARKETING MANAGEMENT Analysis Planning Implementation Control

7. IMPORTANCE OF MARKETING FOR INDIAN BANKS "The relevance of aggressive marketing in banks has come to the fore as never before" - M N Goiporia. What is a Product? Product is defined as “ anything that can be offered to a market for attention, acquisition, use or consumption.

8. CHARACTERISTICS OF SERVICES Intangibility Inseparability Heterogeneity Perishability

9. SERVICE A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. It’s production may or may not be tied to physical product.

10. S.No. Physical Goods Services 1.TangibleIntangible 2.HomogeneousHeterogeneous 3. Product and distribution separated from consumption Production, distribution and consumption re simultaneous process 4. A thing An activity 5. Core value produced in factory Core value produced in buyer-seller interaction 6. Customers do not participate in the production process Customers participate in production 7. Can be kept in stock Cannot be kept in stock 8. Transfer of ownership No transfer of ownership

11. MAREKTING OF FINANCIAL SERVICES Intangibility, inseparability and heterogeneity are manifested at both strategic and tactible levels in services marketing. Marketing strategy provides the organisation with a sustainable competitive advantage in the markets it operates. Organization should understand consumer needs and identifies how those consumers should be grouped into different market segments. Product attributes, pricing decisions, methods of distribution and communication should all seek to reflect the chosen position.

12. Types of Financial Markets in India The credit market The money market Equity and term lending market Debt market Insurance market Foreign exchange,market Stock markets Consumer finance market

13. BANK MARKETING Provides services Aimed to satisfy customer’s needs and wants Needs and wants may be non financial in nature Competitive element, efficiency and effectiveness Organizational objectives are still the driving force Commercial objective to make profit Social Objectives

14. Essentials for a Banks Success Cannot exist without customer Create, win and keep customers Organizational design should be oriented to the customer Deliver total satisfaction to the customer Customer satisfaction is affected by the performance of all the personnel of the bank.

15. MARKETING MIX Key concept in the modern marketing Considered to be core of marketing It is the set of tools that the firm uses to pursue its marketing objectives in the target market Decisions must be made for both the distribution channels and the final consumers

16. Marketing Lessons Product Price Place Promotion Consumer Cost Convenience Communication OLDNew

17. Wining companies are those that can meet customer needs economically and conveniently and with effective communication Services Marketing Mix – 7P’s Product, Price, Place, Promotion, People, Physical evidence, Process

18. Consumer Behavior Planning of a marketing mix commences with formulating an offering to meet the target customer’s needs or wants. Maslow’s Hierarchy of Needs: 1)Physiological needs - food, drink, oxygen, sleep 2)Safety needs – avoidance/ protection from threatening situation and economic security 3)Social needs – friendship, affection and sense of belonging 4)Esteem needs – self-respect, recognition, status and success 5)Self- actualization – self- fulfillment

19. StageFinancial situationBanking needs Young bachelorPer capita income high, as no dependants. Few family burdens Credit cards, auto loan, low cost banking services Half nest (married with young children) Home buying priority, low liquidity Mortgage loan, credit card, overdraft, durable loans Full nest (older couple, grown up children) Income stabilized, good financial position Home improvement, equity investment Empty nest (older couple) Significantly reduced income Social security services, some loans

20. Learning and habit development: The marketers break habit by giving free samples, introductory trial offer and special discount on opening and generate new clientele. Once consumer makes the purchase, the habit reinforcement is done to get them to remain habitual users. Influence on Decision making: Face- to-face group many a time gives an individual the support for decision-making.

21. Customer relationship Management: Objectives: Long term customer retention Relationship with external market who influence or provide referrals Integrating marketing activities, customer service and quality standards

22. Gap Analysis: The CRM tries to close the gap in the customer perception and the firm’s perception by finding and analyzing the “GAP” 1)The first gap is between the service expected by the customer and company perception of consumer expectations. 2)The next is between the customer driven service designs and standards vs. company perception of consumer expectations about the service designs and standards. 3)The third is about delivery of service perceived by the customer and the firm’s perception about customer expectations. 4)The gap between the service delivery to the customer and external communication to the customer by the firm. 5)The ultimate gap between expected service and perceived service.

23. 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 THE ASSOCIATED FEATURES THE BRAND NAME & LOGO THE PACKAGE AND LABEL

24. PRODUCT LEVELS Core benefit, basic product, expected product, Augmented product and Potential product. PRODUCT CATEGORY Durability, tangibility and use Product item, Product Line, Product mix Banking product

25. PRODUCT PLANNING The process of product planning consists of determining the strategies in respect of various elements. 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.

26. NEW PRODUCT DEVELOPMENT Idea screening Concept testing Product development Test marketing Commercial launch PRODUCT STRATEGIES Strategies based on Product Mix Strategies based on Product Life Cycle

27. PRODUCT MODIFICATION Quality Improvement Feature Improvement Style Improvement PRODUCT ELIMINATION GROWTH STRATEGIES Intensive Integrated Diversification

28. Identifying growth opportunities Products Market Market Penetration Product development Market development diversification Existing New ExistingNew

29. DIVERSIFICATION Concentric Diversification – technologically related but the target customers are entirely different Horizontal Diversification – technologically unrelated but the target customers are same Conglomerate Diversification – no relationship with the existing product

30. 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'

31. PRICING Price is the 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, tuition fees Dynamic Pricing - Varying prices Flexibility

32. OBJECTIVE OF PRICING Profit Survival Market Share Cash Flow Status Quo Product Quality Communicating Image Short term/Long term FACTORS INFLUENCING PRICING Internal factors External factors

33. PRICING METHODS Mark up Pricing Variable costs and contribution for fixed costs Absorption cost Pricing margin for profit Target Return Pricing Return on the investment Marginal cost Pricing Direct variable costs are fully realized Only a portion of fixed costs may realized Perceived Value Pricing Buyer’s perception of value Value Pricing Product with high value at a fairly low price Going Rate Pricing Based on competitor’s prices

34. PRICING METHODS (Contd..) Auction Type Pricing English Auctions One seller many buyer Dutch Auctions Sealed Bid Auctions Group Pricing.

35. Pricing Strategies Geographical pricing Price discount and allowances Psychological pricing Promotional pricing Loss-leader pricing Loss is covered by sale of other items Special event pricing Cash rebates Low-interest financing Longer payment terms Warranties and service contracts Psychological discounting

36. Pricing Strategies (Contd.) Discriminating pricing First degree different prices to each customer depending upon their intensity of demand Second degree Lower prices for buyers of a larger volume Third degree Customer groups – student, senior citizen Product form Image pricing Channel Location Time

37. Pricing Strategies (Contd.) Product-mix pricing Product line pricing – developing product line Captive-product pricing – main product at lower price, ancillary product at higher price Two-part pricing – split into fixed and variable component By-product pricing – by-products obtained in production of other products Product-bundling pricing Market skimming pricing Market-penetration pricing

38. Bank Pricing: There are two major costs, which have to be considered while pricing bank products: 1)Interest cost 2)Servicing cost Interest cost constitutes 67 % of the price and service cost is around 33 % in any bank product. Table 36.4 – explains charges bank charge for some of the services Other factors: Risk and return Monetary policy Capital adequacy Cost-benefit analysis

39. Distribution Distribution channel Marketing channels are sets of independent organizations involved in the process of making a product or service available for use of consumption.

40. Functions of distribution channels Market information Promotion Contact Matching Negotiation Product information Physical distribution Financing Risk Taking

41. Channels types Channel 1, Channel 2, Channel 3, Channel 4, Factor influencing channel section Product characteristics Perishable products Consumer durables Industrial products Market characteristics Customer characteristics Company resources Competition Product lines

42. Channels for banking products Branches Other channels Tele-banking ATMs Computerization Plastic Cards Virtual branches and automated video banking Intermediaries in banking services DSA Automobile Dealers Merchant establishments

43. Channel Management: Channel management is also called as IT channel management, distribution channel management, channel sales management and sales channel management. Channel levels: Zero level One level Two level Three level

44. Channel Dynamics: Vertical marketing system ( VMS): It implies that the producer, wholesaler and retailer acting as a unified system. Horizontal marketing system: It is one in which two or more unrelated companies put together resources of programmes to exploit an emerging marketing opportunity. e.g.: in-store banking, education loans, housing loans, etc Multi-channel marketing systems: With the proliferation of customer segments and channel possibilities, more companies have adopted multi-channel marketing. e.g.: a bank may try to sell its products through internet, marketing officials, outsourcing, etc

45. Advantages: The Interwoven channel Management (ICM) connects businesses with their direct and indirect channels through information, business processes and sales applications to streamline the sales process and realize more profitable channels.

46. Promotion Role of promotion Persuasion Inform Reminding Reinforcing

47. Promotion mix Advertising Personal selling Sales Promotion Public Relations Direct Marketing Blended Mix of Promotion Tools

48. Promotion mix strategies Push strategy - Retailer Pull strategy - Customer Factors influencing promotion mix Types of product/market Buyer’s readiness stage PLC stage Promotion mix integration

49. Direct Selling (DS): It is also called as multi-level selling or network marketing. The company sells door to door or at home sales parties. e.g.: Amway, Tupperware, etc Direct Marketing (DM): It is an interactive marketing system that users one or more media to affect a measurable response or transaction at any location. e.g.: telemarketing, television direct-response marketing (home shopping network) and electronic shopping (Amazon.com).

50. Relevance of DS/DM to banks: Banks have transformed from a totally computed environment to core banking system linking all the bank branches as a single branch, data being maintained at a nodal point termed as “ Centralized Data Centre” (CDC). Channels of delivery in a Bank: ATM counters, Net Banking, Phone banking, mobile banking, online trading accounts, etc.

51. Benefits of Direct marketing: 1)It saves time and introduces customer to the various selection of products. 2)It is convenient, easy and hassles free for the customer. 3)Various products are available at customer’s disposition. 4)It reduces the operational cost. 5)It enables deployment of available manpower for other jobs.

52. Marketing Information System (MKIS) Features of MKIS Master Plan Coordination Future Orientation Computerized Environment Analyze Quantitative Information Regular flow of Information

53. Functions of MKIS Collecting and assembling data Processing of data Analysis of data Storage of data Discrimination of information

54. Need of MKIS Complex marketing activity Knowledge /information explosion Communication gap Prompt decision Non-price competition

55. USAGE OF COMPUTERS IN MKIS Hardware usage Software usage Frequency of computer usage Communications of information Sources of information Support for marketing management Support for marketing mix decision

56. Kinds of information needed Information about market forces Information about the bank’s market behavior Internal information Components of MKIS Internal marketing information Marketing intelligence system professional market research agencies like ORG, MARG, IMRB, etc. Marketing research system information pertaining to specific marketing problems. Advantages of MKIS