MARKETING OF BANKING

PRODUCTS
What is
Banking?
• Basic Definition: A system of trading money which:
• provides a safe place to save excess cash, known
as deposits.
• supplies liquidity to the economy by loaning this
money out to help businesses grow and to allow
consumers to purchase consumer products,
homes, cars etc.
 What are banks

• Institutions which deals in money and credit.

• An intermediary, which handles other people’s
money both for their advantage and to its own
profits.
• A financial institution that links the flow of funds
from savers to the users.
• Plays an important role in the economy of any
country as they hold the saving of the public.
 Types of banks in India
• Central Bank: The Reserve Bank of India is the central
Bank that is fully owned by the Government

• Public Sector Banks: State Bank Group, Regional

rural banks

• Private Sector Banks: Foreign Banks, Scheduled and

Non- Scheduled Banks

• Co-operative Sector: State Co-operative Banks, Central

Co-operative Banks, Primary Agriculture Credit Societies

• Development Banks/Financial Institutions: IDBI,

ICICI, NABARD
 Commercial Role of Banking

• Issue of banknotes (promissory notes issued

by a banker and payable to bearer on
demand)
• Processing of payments by way of
telegraphic transfer, EFTPOS, internet
banking or other means
• Issuing bank drafts and bank cheques
• Accepting money on term deposit
• Lending money by way of overdraft,
installment loan or otherwise
 Commercial Role of Banking

• Providing documentary and standby letters of

credit (trade finance), guarantees, performance
bonds, securities underwriting commitments and
other forms of off-balance sheet exposures

• Safekeeping of documents and other items in

safe deposit boxes

• Currency exchange

• Acting as a 'financial supermarket' for the sale,

distribution or brokerage, with or without advice,
of insurance, unit trusts and similar financial
products
 Economic Role of Banking

• Issue of money, in the form of banknotes and

current accounts subject to cheque or payment at
the customer's order.
• Netting and settlement of payments.
• Credit intermediation
• Credit quality improvement
• Maturity transformation
 What is bank marketing?

“Bank marketing is the aggregate of functions,

directed at providing services to satisfy customers
financial (and other related) needs and wants,
more effectively and efficiently than the competitors
keeping in view the organizational objectives of the
bank.”
 Why bank marketing necessary?

• The existence of the bank has little value without the

existence of the customer.
• Aim is not only to create and win more and more
customer but also to retain them through effective
customer service.
• Appropriate promise to a customer through a range of
services (products) and also to ensure effective
delivery through satisfaction is important.
 Concept of bank marketing
• Identifying the most profitable markets now and in
future;
• Assessing the present and future needs of customers;
• Setting business development goals and making
plans to meet them
• Managing the various services and promoting
them to achieve the plans
• Adapting to a changing environment in the market
place.
 Marketing strategies

• Designed after taking into account the strengths

and weaknesses of the organization.
• bank with clientele from various segments could
think of “market penetration” by offering the existing
range of services to existing customers. 
• Bank which are not facing acute competition could
think of “Market Development” by offering the
existing services to new customers.
• design new product range for their customers of
various segments
 Segmentation
• How the seller’s determines which
buyer’s characteristics produce the best
partitioning of the particular market?

•The seller does not want to treat all

customers alike nor does he want to treat
them all differently
 Segmentation

• Banks deal with individuals, group of persons and

corporates
• More or less homogenous groups in terms of their
needs and expectations.
• Market segments, targeting one or more segments,
developing products and marketing programs
tailor-made for these segments.
 Criterion for Market Segmentation in India

• Agricultural Sector
1. Marginal
2. 2 to 5 acres
3. 5 to 10 acres
4. 10 acres and above

• Industrial Sector
1. Tiny
2. Co-operative
3. Small-sized
4. Large- sized
 Criterion for Market Segmentation in India

• Services Sector
• Household Sector
1. Marginal
2. Low Income
3. Middle Income
4. High Income
• Market Targeting in which each segment’s
attractiveness is measured and a target segment is
chosen based on its attractiveness.
• Positioning which is the act of establishing a viable
competitive position of the firm and its offer in the
target segment chosen.
 Types of Marketing

Traditional external
Internal marketing Interactive marketing
marketing
 Traditional external marketing

• consists of usual four ‘Ps’ of Product, Price, Place

and Promotion of marketing mix
• Product: The products offered are the services
which includes various types of bank accounts,
different types of loans, investment services, Credit
cards, Demat accounts, online banking, mobile
banking and many more.
 Pricing

includes interest , fees or commission charged by the bank. Also the interest
paid by the bank.

Typical for banking sector since RBI regulates rates of interest,

Organizations are supposed to sub-serve weaker sections and the rural
regions of the country.
• Buyers look for satisfaction which differs from
person to person.
• Keeping in view the level of satisfaction of a
particular segment, the banks have to frame the
pricing strategies.
• The interest charged and the interest paid should
have a co-relation between them.
General steps for pricing

Make
Develop Estimate the
marketing Calculate
marketing demand
mix cost
strategy curve.
decisions
 Place
• It refers to the establishment and functioning of a
network of branches and other offices through
which banking services are delivered.
• Objective is to get the right product ,at right places
at right time at the least cost.
• Extensive branch network- access to large section
of people
• Proximity may play a determinant role in selecting
the bank.
• Banks are coming up with extension counters,
specialized branches, mobile branches, banks acquisition
and amalgamation so as to have sufficient point of
contacts with the customer.
• With the advent of technology other point of contacts
have come up. Such as:
• ATM
• Telephone banking
• Online banking
• Mobile banking
• Video banking etc.
 Promotion

• Advertising

• Publicity

• Sales Promotion

• Personal Selling

• Push and Pull Strategies

 Internal marketing

• It involves the people(5th P) of the bank i.e. the

employees.
• Employees should also be treated as internal
customers, and sort of marketing mix should be
followed.
• Quality Human resource can be a point of
differentiation
 Interactive marketing

• The quality of service provided during the buyer-

employee interaction.
• Efforts for previous strategies will turn futile if the
interaction does not takes place satisfactorily.
It involves :
• Process (6th P)
• Physical evidence (7th P)
 Process

•Refers to the systems used to assist the organization in

delivering the service.
•Aids to the promotion of customer satisfaction
•It involves:
speeding delivery of services
reducing the paper work
standardization of procedures
customization as per individual demand
simplicity etc.
 Physical evidence

• It includes signage, reports, punch lines, other

tangibles, employee’s dress code etc.
• The company’s financial reports are issued to the
customers to emphasis or credibility.
• Signage: Each and every bank has its logo by
which a person can identify the company. It
creates visualization and corporate identity for the
banks.
• Tangibles: banks give pens, writing pads to the
customers.
• Punch lines: Depicts the philosophy and attitude
of the bank. Banks have influential punch lines to
attract the customers.
 Current Marketing Strategies
• Referral services

• Direct mailing

• Cold calling

• Offering items having your brand identity

• Using the media

• Getting celebrities to endorse the product or service.

• Sponsoring events

• Using permission-based Marketing

 Customer satisfaction

• Recommendation of Talwar’s
committee,1975:
• Establishment of customer service
committee/staff committee in the every ranch.
• Customer meets to be held at the branches
at least once in a half year.
• 15th of every month (next day if 15th is a
holiday) to be observed as customer’s day at
branches and administrative offices. 
• Provision of complaint-cum-suggestion box
in every branch.
• Provision of ‘May I help you’ counter in branches.
• Immediate credit of cheques up to Rs.2,500 which
has since been increased to Rs.15,000.
• Payment of penal interest in case of delay of collection
of cheques.
• In the year 1995 ‘Banking Ombudsman’ was
established by RBI with objective of resolving
customer grievances in a quick and inexpensive
manner.
 Rural bank marketing

• Follows 80-20 Parato principal

• Bankers need to understand the rural psychology
• Employing local literate youth for confidence
building
• Banker must be aware of agriculture aspects,
cultural and communal aspects, institutional
facilities etc.
• Process of change should be known to him
• Status of various development plans should be
known
 “RURAL” Strategy

R:Retail Business for Rural Community As

(Consumer & Producer)

U: Urban facilities, Investment, Infrastructure

R: Animal Husbandry & Allied Activities

A: Agri Production(Field Crops, Plantation)

L: Linkages & Synergy

 New Avenues for Rural Business:
Special Focus

• Horticulture, Plantation, Vegetable growing,

Floriculture, aromatic and medicinal plants, Bio-
diesel plants etc. for high investment Opportunities
• Post Harvest and Food Processing
• Seed Multiplication & Processing
• Dairy Farming, Sericulture, Aqua-Culture & Others.
• Irrigation Projects & Wasteland Developments.
• Rural Tourism & Other emerging areas.
ICICI Bank – A Case study
• Industrial Credit and Investment corporation of
India bank - largest private sector bank in market
capitalization
• Second largest overall in terms of assets.
• largest issuer of credit cards in India
 MARKETING OF SERVICES BY
ICICI BANK:

• Product :
Saving account: offers a power packed Savings
Account with a host of convenient features and
banking channels to transact through.
Senior citizen services: convenience with benefits
Fixed Deposits : Safety, Flexibility, Liquidity and
Returns
• Recurring Deposits: Affordability and higher earnings.
• Roaming Current: access your accounts at over 500
networked branches across the country.
• Loans: Home Loans. Personal Loans. Car Loans, two
Wheeler Loans, Commercial Vehicle Loans. Loans
against Securities, educational loans etc
• Investments: ICICI Bank Tax Saving ,Foreign Exchange
Services, Senior Citizens Savings Scheme, 2004.
• Cards: Credit card, ATM card, travelers card
• Demat services
• Online money transfer
• Mobile banking
 7 Ps of ICICI Bank

• Pricing
1. Pricing Decisions related to interest, fee
or commission.

2. RBI and IBA

3. Raising Number of Customers

4. 2 Fold Strategies
 7 Ps of ICICI Bank

• Place
1. Services are sold through branches

2. Making Promised Services available to the

ultimate users.

3. Branches OF ICICI:
1900 in India and 33 in Mumbai.
 7 Ps of ICICI Bank

• Promotion
1. Advertising - Television, radio, movies, theatres
2. Print Media- Hoardings, newspaper, magazines
3. Publicity- Road shows, campus visits, sandwich
man, Sponsorship
4. Sales Promotion- Gifts, discount and commission,
incentives, etc.
5. Personal Selling- Cross-sale (selling at competitors
place), personalized service
6. Telemarketing- ICICI one source Call center (mind
space)
 7 Ps of ICICI Bank

• Process
1. Standardization- ICICI bank has got standardized
procedures got typical transactions

2. Customization- Specialty counters at each branch

to deal with customers of a particular scheme

3. Simplicity- Separate counters exist with clear

indication

4. Customer Involvement- Money matters and

signature
 7 Ps of ICICI Bank

• Physical Evidence
1. Signage

2. Financial Reports- The Company’s financial reports

are issued to the customers to emphasis or credibility

3. Tangibles- Pens, Writing Pads to the internal

customers. Passbook and Cheque books to the
customers.

4. Punch lines- “Hum Hai Naa”

5. Employee’s Dress Code- ICICI bank follows a dress

code for their internal customers
 7 Ps of ICICI Bank

• People
1. All people directly or indirectly involved in
the consumption of banking services.

2. Workers, Employees, Management and

other Consumers

3. Employees of a Bank represents the

organization to its customers.

4. Internal Marketing
THANK YOU