Marketing Mix of Banking Services

In the marketing mix of banking services, the product element pertains to the variety of financial products and services provided to customers. Banks must thoughtfully formulate and expand their product lineup to cater to the varied requirements and preferences of their target audience. This involves providing a comprehensive array of banking products, including savings accounts, loans, credit cards, investment opportunities, and insurance services. Through ongoing innovation and customization of their product offerings, banks can set themselves apart from competitors and improve customer satisfaction.

Marketing Mix of Banking Services are as follows:

1) Product

A product is fundamentally a combination of tangible and intangible attributes, which are usually exchangeable. It may be an idea, a physical entity, a service, or any combination of these. Customers do not merely regard bank services as products with inherent value but evaluate them based on the specifications they deliver. For example, Customers gauge a bank account primarily in terms of their satisfaction with aspects like safety, convenient bill payments, record-keeping, account status, and fund transfers.

2) Pricing

The pricing strategy in the banking sector primarily revolves around the interest rates offered by different banks. In today’s competitive scenario where the customer is the king, the banks have to charge them interest at the rate in force by the RBI directives. The Reserve Bank and the Indian Banking Association are concerned with this aspect. The bank’s pricing strategy plays a vital role in increasing the count of real customers. In the process of creating a pricing policy for farming, it is possible to employ various pricing methods.

i) Value Pricing: Banks with distinct or exclusive products or schemes are the primary practitioners of this pricing technique. They usually charge a combination of high and low prices depending on customer loyalty as well as the products. This pricing approach usually goes hand in hand with promotional programs.

ii) Cost Plus Pricing: This pricing method involves conducting a thorough analysis of the cost structures of various bank products and services.

ii) Going Rate Pricing: The most common pricing technique is going rate pricing. In going rate pricing the banks base its price largely depending on the competitor’s prices. Banks, on the other hand, must operate by RBI directives while also competing. The banks can set their charges either higher or lower than those of their competitors.

iv) Market-Oriented Approach: This indicates what the market can bear or accept in the case of a corporate client who may not be price sensitive as against an individual client.

v) Competitive-Based Pricing: In this pricing method, the competitor’s price serves as the basis for setting the price.

3) Place

The place element of the marketing mix of banking services refers to the distribution channels through which customers access banking products and services. It is the location analysis for bank branches. There is number a of factors affecting the determination of the location of the branch of a bank. The bank’s location should align with the geographical concentration of its primary customer demographic. Here are some key factors that influence the location analysis of a bank:

i) Communication, electricity and other necessary facilities for the smooth functioning of the bank.

ii) Adequate availability of transportation

iii) Safety

iv) Physical distribution and electronic distribution.

v) Location of branch, head office, ATMs.

v) Neat and clean surroundings

4) Promotion

Companies employ promotion with the expectation of shaping the recipient’s emotions, beliefs, or actions through various communication channels. There are two primary approaches to promoting banking services.

i) Impersonal Promotion: These are advertising, publicity and sales promotion measures. Banks types of advertisement such as newspapers, radio, television, magazines and houndings. Also sales promotion devices such as point of purchase material, brochures and advertisement speciali like ball pens, calendars, diaries, etc.

ii) Personal Promotion: The bank marketers have the best opportunity to tangible the product through personal selling, persuasion is more effective with direct contact. It helps in creating impulse buying Now a tele sale is also popular.

Banks also use sponsorships, and celebrities for opening a savings week. Publicity is a major strength as a promotional tool than advertising, as customer tends to believe a news item rather than an advertisement. Word of mouth marketing promotion stands out as a vital promotional tool, as customers themselves narrate their experiences with bank services, making it a more effective persuader and convincer than advertising and personal selling. Besides, social welfare and corporate social responsibility are important as a part of banking services. Personal promotion helps in creating impulse buying and generates selling with the help of impersonal communication. With the help of different promotional tools, a manager can transform a potential customer into an actual customer.

5) People

It is the responsibility of an organization to accommodate the evolving preferences of its customers, acknowledging that all customers harbour their distinct preferences. They possess certain unique characteristics that significantly impact their lifestyles. This makes it somewhat challenging to understand. It has the context that people go through the problem of market segmentation in the banking service

In banking services, banking organizations must meet the diverse needs of customers residing in various segments. The segmentation of the market makes the task of bank professionals easier. If the market segmentation is done in the right fashion, the task of satisfying the customers is simplified considerably. Modern marketing theories advocate the formulation of marketing policies and strategies for each segment which an organisation plans to solicit.

6) Process

It constitutes the overall procedure involved in using the services offered by the bank. The process involves all the activities of banking services from the product conception stage till its marketing at all branch levels. The process must be very customer-friendly. In other words, a process should be such that the customer is easily able to understand and easy to follow It also includes the accounting procedure. Previously banks were more actively oriented but due to technological advances, they have shifted their approach to customer-oriented service delivery. The improvement in the process comes from re-engineering the process to reduce delays in processing the transaction, e.g., loan applications, cheque clearing, etc.

Today if particular bank formalities are long and the procedure is very complicated the overall process fails and the customer may not be inclined towards using that bank’s services.

7) Physical Evidence

It is the overall layout of the place. How the entire bank has been designed. Physical evidence encompasses all the elements that contribute to making the process more seamless and efficient.

Many private and foreign banks now present a more welcoming and customer-friendly appearance. Flashy chequebooks with the name of the account holder printed, imaginative design of the bank brochure, and statement of accounts with details of transactions are other tangible aspects Logos, symbols, attractive brand names, etc., add to the customer’s perception of service quality. There is an urgent need to implement technologies to raise productivity as well as to enable the banking system to cope with the increasing complexities of international business.

For example, in the case of ICICI, HDFC, and Citibank portray a new welcoming and friendly look to the customers rather than drudgery banking counters. Physical evidence includes elements like the placement of the customer service executive’s desk or the location designated for depositing cheques. The place must be designed in such a manner as to ensure maximum convenience to the customer and cause no confusion to him.

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Service Marketing Strategies for Banking Services

A bank is a financial institution that takes in deposits and directs these funds towards lending activities. Bark marketing refers to all the functions needed to cater to the financial and other closely related needs of the customer, keeping in mind the organisational objective of customer delight.

Banking is an industry founded on trust. Customers deposit their money with a bank only if they trust the bank, and the bank gives loans to its customers only when it charges them. Banks execute business with customers’ funds by taking deposits and advancing loans with interest. For any bank to conduct business initially, it is the ‘trust’ that matters, not the money it owns.

Bank marketing is the aggregate of functions, directed at providing services to satisfy customers’ financial and related needs and desires, surpassing competitors in the process, all while aligning with the bank’s organizational objectives.

Fundamentals of Bank Marketing: Customer-Centric Approach

Bank marketing refers to the collection of functions that represent the entirety of marketing activities within a bank. This collection of functions represents the culmination of all individual activities, working together as an integrated effort to identify, generate interest in, and meet customer needs. This implies that every individual within the bank plays a role in marketing and contributes to overall customer satisfaction. The bank should cultivate a customer-oriented mindset among all its staff members.

The marketing concept is basically about the following few specialities which contribute towards a bank’s success:

1) A bank’s existence depends on its customers.

2) The ultimate aim of a bank is to deliver total satisfaction to the customer.

3) Customer satisfaction is affected by the performance of all the personnel of the bank.

4) The purpose of the bank is to create, win, and keep a customer. The customer is, and should always be, at the core of all the bank’s activities.

5) It is also a way of organising the bank. The starting point for organisational design should be the customer and the bank should ensure that the services are performed and delivered most effectively. Service facilities should also be designed with the customers’ convenience in mind.