12-09-2013, 12:35 PM
MARKETING STRATEGIES OF THE BANKING INDUSTRY
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INTRODUCTION
Banking Industry is one of the most important service industries
which touches the lives of inillions of people. Its service is unique both
in social and economic points of view of a nation. Earlier the attitude of
banking service was that it was not professional to sell one's services
and was unnecessary in the sense that traditional relationships and
quality of products were sufficient to carry forward the tasks. Before
the mid 1950's the banks had no understanding or regard for marketing.
The bank building was created in the image of a Greek Temple to
impress the public about the importance of a bank. The interior was
austere and the teller rarely smiled. Bankers maintained austere dignity
and they hardly maintained friendliness.
Traditional Banking
This period is also known as Pre-nationalisation period. The
basic symbol of this period was strong accounting orientation of bankers
down the time. In other words, meticulous maintenance of accounts
books and an inward-looking approach in transacting business with the
customer. Investment of banks h n d s is based on liquidity principles. In
loaning, the quality of security is more important and the requirement of
the customer gets least importance. The customer was presented with
readymade banking products with an option to take it or leave it. Due to
the limited banking network then available, the customer had little
alternatrves.
So the banking business kept prospering even with a
limited clientele base and a set of inflexible rules and regulations
meticulously observeti both in letter and spirit8. During the period there
was strong banker customer relationship but the customers were selected
the few in a society. This period is popularly known as period of class
banking.
Bank Marketing Period
It is also known as modern period. The frantic pace of branch
expansion and credit disbursement during the development banking
period has direct impact on the health of public sector banks. The real
outcome was the proliSt*rationof loss-making branches. The problem of
communication and tl.anspot-t network in the countryside, rising
customer dissatisfaction with banking services, and resultant apathy of
bank staff towards developmental work are the basic reasons for this.
The RBI urged coinmercial banks to take stock of the state of affairs, to
consolidate their gains and go slow on branch expansion, thus ushering
inherent in
in the period of consolitiation. The bank visualises the r ~ s k
continuing to do business as before. So there is a growing awareness
that market~ngwas an essential tool in the hands of the banker, an
inescapable necessity without which perhaps survival itself might
become difficult in future.
Institutional Segment
In general, irrespective of the type of banks, the quantum of
interest and security of investment are found to be most important
reasons promoting intitutional savers to invest in banks.
Unlike household savers institutional savers are not quite satisfied
with the speed of var~ous
bank savers.
Majority of complaints of institutional savers pertain to delay in
transactions, error in entries of passbook /statement of account,
misbehaviour of ban].. staff etc.
The First 'P' - Product
First among the PS of bank marketing is product mix. Product
stands for both goods and service combination offered to the public to
satisfy their needs. In tlhe highly regulated banking industry all offered
the same type of products. Actually the bank takes little time and no
additional investment to develop a financial product or service. But the
drawback is that no brand can be marketed with unique selling
proposition for long because it can be copied immediately. Thus it is
better to focus on some selected ideas relating to products, which have
immediate operational utility as well as feasibility on banks.