Briefly explain the marketing of banking services in India

 

Introduction.

The ongoing process of economic reforms has completely changed theoperational environment for the whole banking industry in the country.Banks are now required to cope with stiff competition in business and alsothe complex regulatory norms regarding capital adequacy and provisioning.Banks are forced to adopt various marketing techniques and approaches.Thus, marketing has become imperative for all banks including those in the public sector.Marketing in banks can be stated as a new phenomenon that is shaping wellover the past one decade. Public sector bank hardly considered marketing asa tool for business. The competition, deregulation that followed the reformshas changed the environment for banks, where marketing has occupied the place in the business of banks. Today, marketing in the banking industry ischaracterized by many innovations in products and services, use of advancedtechnology in product design, up gradation of delivery system, advertisingand sales promotion activities, whether in public sector or private sector.Banks now have a firm that marketing strategies alone can brighten thefuture of banking business. Marketing in banks has become synonymouswith customer and banks are found engaged in several activities of discovering, creating and satisfaction customer needs. Indian banking is at cross roads today. With the deregulation andliberalization process in full swing, the consequent policy changesintroduced in the Indian financial system in general and banking in particular are effecting unprecedented changes in its functioning. With the emergingchanges did spring up new challenges of commercial viability, costeffectiveness, effective marketing strategy, etc.Market oriented policies alsogave birth to new players like foreign and private sector banks andsubsidiaries offering varied high tech and cost effective Service. There wasan absolute shift from sellers into buyers’ market, establishing the‘consumer’ as the key factor in the market. The dictum “as the bank exists because of its customers, has become more pronounced and relevant in the present context”. Thus, marketing constitutes the key strategy for banks toretain good customers and also anticipate their future demands.

 

Bank marketing.

Deryk Weyer of Barclays Bank call it “a process, consisting of identifyingthe most profitable markets now and in future; assessing the present and thefuture needs of the customers; setting business development goals andmaking plans to meet them; and managing various services and promotingthem to achieve the plans – all in the context of a changing environment inthe market”.

Why Bank Marketing?

Awareness among Customers

Modern technology has made customers aware of the developments in theeconomic environment, which includes the financial system. Financial needsof the customers have grown multifold into various forms like quick cashaccessibility, money transfer, asset security, increased return on surplusfunds, financial advice, deferred payments etc. With a wide network of  branches, even in a dissimilar banking scenario, customers expect the banksto offer a more and better service to match their demands and this hascompelled banks to take up marketing in right earnest.

Quality as a Key Factor

With the opening up of the economy, fast change has been experienced inevery activity, and banking has been no exemption. Quality is the watchwordin the competitive world, which is market driven and banks have had to faceup to this emerging scenario. In fact, it may not be out of place to reiteratethat quality will in future be the sole determinant of successful bankingventures and marketing has to focus on this most crucial need of the hour.

Growing Competition

Increased completion is being faced by the Indian banking industry fromwithin the system with other agencies both, local and foreign, offering valueadded services. Competition is no more confined to resource mobilization but also to lending and other areas of banking activity. The foreigncommercial bank with their superior technology, speed in operations andimaginative positioning of their services has also provided the necessaryimpetus to the Indian banks to innovate and complete in the market place.

Technological Advances

 

Technological innovation has resulted in financial product developmentespecially in the international and investment banking areas. The westernexperience has demonstrated that technology has not only made execution of work faster but has also resulted in greater availability

of manpower for customer 

Contact.

Marketing Approach in Banks.

With the need for marketing in banks having evolved out of the changingenvironment and constant interplay of various interdependent factors, theimportance of a systematic approach to marketing cannot be overstressed.The application of a marketing approach in banks will therefore involve:a. Identifying customers’ financial needs and wants; b. Developing appropriate banking services to meet these needs;c. Pricing for the services so developed;d. Setting up suitable outsells / banks branches;e. Advertising to promote the services to the existing as well as prospectivecustomers

Features of Bank Marketing.

Banking product cannot be seen or touched like manufactured products (intangibility)

In marketing banking products, the product and the seller are inseparable; they together define the banking product (inseparability)

Banking products are products and delivered at the same time; theycannot be stored and inspected before delivering’ (perishability)

Standardization of banking product is difficult (variability)