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Banking and Insurance

This Photo by Unknown Author is licensed under CC BY-NC

The marketing concept asserts that businesses are required to focus on the consumers' needs and
wants so they can offer products or services that will satisfy these needs better than the
competition.....

The selling concept, on the other hand, asserts that consumers need to be influenced in order to
buy the products on offer through promotional campaigns. The focus of this concept is directed
towards turning products into cash for the business.

The selling concept focuses on the needs of the seller while the marketing concept focuses on the
needs of the buyer.
Introduction to Marketing
The word market has been derived from Latin word ‘Marcatus’ which refers to place of trade
or a place where business is carried on. Marketing has two fold meaning i.e., in traditional
sense and in modern sense. Traditionally, “Marketing consists of those efforts which effect
transfer in ownership of goods for their physical distribution”. —Clark and Clark

In modern sense, marketing involves all efforts to create customers for the product and to
maintain them permanently. According to this concept the main aim of marketing is to
provide maximum satisfaction to consumers.

Consumer is the focal point in the modern concept of marketing. “If marketing is at all
important, it is because it is directed towards the satisfaction of consumer and in this context;
the consumer is the attraction for which marketing is carried out. —Geoffery, F. Francis
The old approach of marketing ends when the goods are produced for supplying in the market,
whereas under the new approach marketing starts and ends with customers. Under the old
approach, principle of “Caveat Emptor” i.e., let the buyer beware, operates.

But under the new approach, principle of “Caveat Vendor” i.e., let the seller beware, operates.
The firm’s main objective then becomes to satisfy its customers through the constant study of
their changing needs and wants.

Everybody lives by selling some products, services or ideas. Generally, marketing is considered
as selling and promotion. However, making a sale, i.e., selling is the old sense of marketing. In
its new sense, marketing is satisfying customer needs. Selling is only one aspect of marketing.

Thus marketing is getting the right goods and services to the right people at the right place at
the right time at the right price with the right communication and promotion.
Marketing is all about satisfying the needs and wants of consumers. Consumers have the funds
and are willing to spend to satisfy their needs by buying goods and services. Marketing
strategies are important for a business to satisfy consumer needs. The target market comprises
of groups of people or organizations for whom the business intends to implement its marketing
strategies.

Marketing is the promotion of business products or services to a target audience. It is, in short,
an action taken to bring attention to a business' offerings; they can be physical goods for sale or
services offered.

Common examples of marketing at work include television commercials, billboards on the side

of the road, and magazine advertisements.
Definition of Marketing
Definition of Marketing :-

According to William Stanton,

“ Marketing is a total system of business activities designed to plan, price, promote and distribute
want satisfying products to target markets in order to achieve organisational objectives”

Stanton and Others,

“Marketing is a total system of business activities designed to plan price promotes and distribute
wants-satisfying products to target markets to achieve organisational objectives.”

Kotler and Armstrong

“Marketing is a social and managerial process by which individuals and groups obtain what they
need and want through creating and exchanging products and values with others.”
Scope of Marketing
Product
Marketing Advertising
planning and Pricing
research and publicity
development

Sales Branding and After sales

Packaging
promotion labelling services

Test marketing
Features of Marketing
• Regular and continuous activity

• Satisfaction of Human wants

• Relates to Goods and Services

• Transfer of Ownership

• Creates different utilities

• Importance of 4 P’s

• Evolutionary concept

• Wide in scope
Types of Utilities
Time Utility- Ensuring a product is available when the customer wants it adheres to time
utility. Consumer demand for products varies depending on the weather, holiday season or
everyday wants and needs.

Eg: The demand for warm coats increases during the winter, and the demand for Christmas,
Halloween or Easter decorations increases when these holidays approach, while the demand for
soda and other soft drink products may remain the same throughout the year because
customers can drink these products at any time.

Place Utility- Place utility is the value consumers put on where they purchase products. Stores
make it easier for the consumers to purchase items, as opposed to driving to a factory or
warehouse where the products are manufactured or stored. Consumers find what they need in a
place conveniently located near home or work.
Possession Utility- Possession utility is the value consumers put on purchasing a product and
having the freedom to use the product as it was intended or finding a new use for the product.

For example, many people use flower pots for planting, but these pots have other uses such as
storage for small objects found around the house or as a centrepiece for the dining room table.

Form utility- Form utility is the value a consumer sees in a finished product. Consumers purchase
items such as furniture, electronics or vehicles in whole because the consumer is incapable of
finding and putting all the parts together to create the product. The customer sees value in the
finished product, or the form created by each product part.
Importance/Benefits of Marketing
• Satisfaction of human needs and wants – it means by which the business identifies
human needs that are unfulfilled, convert them into business opportunities and
create satisfaction for consumers and profit for business.

• Profit and market reputation – Marketing is important to marketing firms as they

earn profit by conducting marketing activities. which helps a firm to expand
business activities for goodwill.

• Facilitates specialisation division of labour – Marketing function if successfully

performed leads to division of labour and efficient performance of production
function.
• Widens the market – It widens market through large scale movement of goods to the
country. Even advertising and sales promotion techniques are useful for widening the
market.

• Improves standard of living – Marketing facilitate production as per the needs of

consumers and suppliers such as production to consumers.

• Brings economic growth – It brings industrial economics growth. It also facilities

utilization of available natural resources. It creates new demand for goods and thereby
encourage production activities
• Provides channels of communication to business firms – The marketing firms receive
continuous feedback of information about demand for products and services through
marketing.

• Facilitates price control- It also facilitates price control by the manufacturers and bring
proper balance between demand and supply and this brings price stability.

• Develop social significance at – International marketing facilitates international

movement of capital, machinery and technical know-how. Even domestic marketing gives
various benefits to consumers, businessmen and society at large.
Marketing Mix
Marketing mix is one of the most fundamental concept in marketing management. For
attracting consumers and for sales promotion, every manufacturer has to concentrate on
four basic elements or components. These are : Product, Pricing, Distributive Channel
(Place) and Sales Promotion techniques. A fair combination of these marketing elements is
called as Marketing Mix

By adding People, Process and Physical Evidence ( Packing to the marketing mix you get
what is known as the “7P’s of Marketing Mix.
Features of Marketing Mix
• Combination of variables

• Useful for achieving marketing targets

• Flexible combination of variables

• Marketing manager acts as mix of ingredients

• Customer is the focus points

• Variables are interrelated

• Wide applicability

• Consumer oriented activity

Basic elements/ Ingredients of
Marketing Mix (7P’s)
• Product

• Place (Distribution Channel)

• Promotion

• Price

• People

• Process

• Physical Evidence /Packaging

• Product - The Product should fit the task consumers want it for, it should work and it should be what the
consumers are expecting to get.

• Place – The product should be available from where your target consumer finds it easiest to shop. This
may be High Street, Mail Order or the more current option via e-commerce or an online shop.

• Price – The Product should always be seen as representing good value for money. This does not
necessarily mean it should be the cheapest available; one of the main tenets of the marketing concept is
that customers are usually happy to pay a little more for something that works really well for them.

• Promotion – Advertising, PR, Sales Promotion, Personal Selling and, in more recent times, Social Media
are all key communication tools for an organisation. These tools should be used to put across the
organisation’s message to the correct audiences  in the manner they would most like to hear, whether it
be informative or appealing to their emotions.
In the late 70’s it was widely acknowledged by Marketers that the Marketing Mix should be
updated. This led to the creation of the Extended Marketing Mix in 1981 by Booms & Bitner which
added 3 new elements to the 4 Ps Principle. This now allowed the extended Marketing Mix to
include products that are services and not just physical things.

• People – All companies are reliant on the people who run them from front line Sales staff to the
Managing Director. Having the right people is essential because they are as much a part of your
business offering as the products/services you are offering.

• Processes –The delivery of your service is usually done with the customer present so how the
service is delivered is once again part of what the consumer is paying for.
• Physical Evidence – Almost all services include some physical elements even if the bulk of what
the consumer is paying for is intangible.

For example a hair salon would provide their client with a completed hairdo and an insurance
company would give their customers some form of printed material. Even if the material is not
physically printed (in the case of PDFs) they are still receiving a “physical product” by this definition.
This Photo by Unknown Author is licensed under CC BY-NC-ND
Factors influencing Marketing Mix
• Behaviour of Consumers

• Trade factors

• Market Competition

• Behaviour of the Government

• Political and legal factors

• Economics condition

• Technological factors

• Globalisation factors
Factors influencing Marketing Mix

UNCONTROLLABLE CONTROLLABLE FACTORS

FACTORS

Product policy
Consumer behaviour Branding policy
Competitor’s behaviour Packaging policy
Intermediaries' behaviour Pricing policy
Government’s behaviour Promotion policy
Importance of Marketing Mix
• Better understanding of marketing
• Better use of resources
• Message Delivery
• Value creation
• Solution to problems
• Matches in needs with products
• Prepare marketing strategy
• Right target
• Helps to face competition
• Helps introducing new products
Example – 7P’s of Axis Bank
PRODUCT
The main products of AXIS Bank are Saving Account,
Current Account and Demat Account. The other
products are Home loan, personal loan, Insurance,
Credit cards, etc.
For better marketing of products, the products are
categorized under Axis Bank and Axis Sales.
Products under Axis Bank are
• Saving Account
• Current Account
• Forex Department
• Salary Accounts
Products under Axis Sales are
• Home loan
• Personal loan
• Demat Account
Price
The price of the product depends upon the services provided by the Bank on the respective
product to the customers. Detailed pricing changes from time to time.
PLACE
Place plays an important role in tangibilizing service
offerings. Quality of service is perceived by many
customers in the form of place of delivery- locational
appeal, interiors, ambience, etc. If a bank is located in a
crowded market the place or location will be a positive
tangibles. Providing excellent tangibles in the form of
place or location and interiors is particularly important for
appealing to the customers segment. More recently, some
of the private banks in India like AXIS Bank are providing
very attractive tangibles in the form of their locations,
exteriors and interiors.
Promotion can tangibilize services in different forms:
• Visualization
• Physical representation
• Documentation.

Visualization tangibilizes services through hoardings, TV and print

PROMOTION campaigns or advertisements. Physical representation in services has a
good promotional appeal to customers like use of colors to symbolize wealth
and status. Service providers use documentation in their promotions in
support of their claims for dependability, popularity and responsiveness.
PEOPLE
People are a common factor in every
service. And people tangibilize services.
Good people (means good performance)
make good or successful services. Bad
performers deliver bad services.
PROCESS

• Customer defined business process- Process innovations and continuous improvement

through people involvement.

• Result oriented approach- Each process has been designed by first planning the desired
results.

• Axis Bank is constantly taking initiatives to offer the best in class service that seek to
enhance customer experience.
Axis ASAP is a new age digital
savings account offered by Axis
Bank. You can open an Axis ASAP
account by downloading the Axis
Mobile App or by applying online
 & registering your Aadhaar, PAN &
other basic details. Axis ASAP
comes with a host of features like
higher interest rates, 10% cash
back every month on
BookMyShow, unlimited transfers
using axis mobile & much more.
• Reduce paper usage- Due to
technological innovations such as use
of Finacle software for core banking
solutions.

• It has positioned it self as a bank

PHYSICAL which gives higher standard of

services through product innovation.
EVIDENCE
• Satisfies the diverse need of 
individual and corporate clients.

• It is customer centric, and service

oriented.
Market Segmentation
Concept of Market Segmentation
Market segmentation is the activity of dividing a broad consumer or business market, normally
consisting of existing and potential customers, into sub-groups of consumers (known
as segments) based on some type of shared characteristics.

The concept of market segment is based on the fact that the market of commodities are not
homogeneous but they are heterogeneous. Market represent a group of customer having
common characteristics but two customer are never common in their nature, habits, hobbies,
income and purchasing techniques.

According to Philip Kotler “ Market segmentation means the act of dividing a market into two
distinct groups of buyers who might require products and/or marketing mixes”.
Features of Market Segmentation
• Dividing the total market

• Sales promotion

• Division into submarkets

• Target strategy
Bases of Market Segmentation
Demographic segmentation
In this type, the consumer market is segregated based on demographic elements such as
qualification, salary, gender, marital status, nature of work, age, no of family members,
gender, nationality, race, religion and other factors. It is one of the widely used
segmentation tools across most of the industrial sectors, and any information can be easily
accessed through common data collection techniques. It enables us to separate unspecific
customer base in a feasible and cost-effective way. Also, combining it with other
segmentation tools further narrows down the consumer base to obtain more relevant
markets.

Example : The popular cereal brand, ‘Kellogg’s offers age-specific cereal varieties targeted
for kids and mature groups.
Example of Demographic segmentation
Geographic Segmentation

As the name suggests, this segmentation type is targeted towards a specific set of
consumer market confined to the territorial limitations or geographical areas. Consumer
preferences and demands vary according to their regional habitats, due to several
factors, such as climatic conditions, population, ethnicity, religious beliefs, culture,
language and type of area (urban/rural).

Example : Considering the religious sentiments, Beef is banned in India. Thus,

‘McDonalds India’ does not sell beef-based edibles in the Indian continent. While
‘McDonalds US’ sells beef-based edibles freely across its American restaurant chains.
Example of Geographic Segmentation
Psychographic Segmentation
Psychographic segmentation is quite subjective in its approach and segregates the markets
based on customer attitudes and likings. The factors relevant to this segment are a bit hard
to nail down, considering its qualitative nature. Unlike the demographic and geographic
segments, it is not data-centered and is difficult to interpret the psychological perceptions of
consumers. Psychological segmentation is driven by intangible factors such as customer
traits, attitudes, likings, value systems, beliefs, way of life, motivational drive, viewpoints,
and other such factors.

Example 1: Fitness/Exercise markets target health and fitness conscious consumers while
segregating the consumer base. Example 2: Diet Coke for those who are health conscious
people .Coke also provide a variety of energy drinks who need energy specially in sport.
Example of Psychographic Segmentation
Behavioral Segmentation

The thin line between ‘Psychographic’ and ‘Behavioral’ segmentation is the ‘former’ focus on
‘who’ a customer is and the latter understands ‘how’ a customer behaves or acts. The factors
influencing this segmentation type are buying and spending tendencies of the customers such as
buying frequency, brand loyalty, consumption rate and interactions with the brand.

Behavioural Segmentation is segregated based on consumer knowledge and experience with the
product, as it influences the decision of the consumers to buy a certain product. Thus, allowing to
identify consumers that are aware or unaware of the product, previous consumers, prospective
consumers, present consumers or first-time consumers.

Example : ‘Sensodyne’ toothpaste brand is specifically targeted for consumers with sensitive
teeth. While brands such as ‘Colgate’ and ‘Pepsodent’ are specifically meant for teeth whitening
and prevention of tooth decay.
Example of Behavioral Segmentation
Conclusion
As we discussed four key segments of market, it helps to narrow down the markets effectively
and is an essential tool to understand the demands and requirements of the consumers. It not
only helps in segregating markets but also enables to design effective promotional campaigns
specific to the identified segments.

So before launching a product, it is paramount to identify user segments and promote them
relevantly. Without proper market segmentation, the product cannot reach the right audience
and would be a disaster!
Factors influencing Marketing Segmentation
• Better marketing performance

• Introduction of appropriate distribution strategy

• Better services to consumers

• Facilitate introduction of marketing programs

• Appropriate price fixation

• Designing the products

• Timing of marketing and adverting and sales promotion efforts

• Adjustment with diverse expectation of consumers

Guides to effective segmentation
• Measurable

• Accessibility

• Differentiable

• Homogeneous

• large
Marketing Strategy
Marketing strategy is a long-term, forward-looking approach and an overall game plan of
any organization or any business with the fundamental goal of achieving a sustainable 
competitive advantage by understanding the needs and want of customers.

A Marketing strategy can be defined as the outlines of broad marketing logic by which the
business units hopes to achieve its marketing objectives and the specifics of target markets,
positioning and marketing expenditure levels. It outlines specific strategies for each
marketing mix element and explains how each responds to the threats, opportunities and
critical issues spelled out in the marketing plan.
Case Study - Marketing Mix of Netflix

• Founded by Marc Randolph and Reed Hastings in 1997, Netflix is one of the world’s leading
television streaming networks with a subscriber base of over 57.4 million worldwide as a
result of over 1,00,000 videos on its network.

• Over the years, Netflix has introduced various ways of evolving their marketing mix to boost
 sales and generate profits, to their success. Its competitors include HBO GO, Hotstar, 
Amazon Prime, Hulu etc. who all have still failed to surpass the success of Netflix.

• Also over the years, Netflix profits have skyrocketed as it has established itself as one of the
best forms of television streaming.
The Product in the Marketing Mix of Netflix

Since its inception in the year 1999, Netflix has since then established themselves as a successful
service provider through their creative selling proposition. Netflix customers have the chance to
access thousands of movies and television shows that are daily updated to meet the customers
wants.

Additionally Netflix also offers mail-in DVD giving them the huge advantage to competitors
especially within the period 1999 to 2007 where they were hugely successful starting off with the
creative idea of mailing DVD to the homes of customers.

Available with the option of three different types of subscriptions which are: only online
streaming, DVD’s excluding online streaming and the DVD in addition to online streaming which
was introduced in 2012.
• Each subscription model comes with different features, such as the different HD quality
levels, the number of screen one can watch the content on simultaneously.

• Netflix can be categorized as both a tangible and intangible product; tangible because of

mail-in DVD’s which one can physically touch and see, intangible service as their online
streaming cannot be contacted. This product is accessible on Xbox and PlayStation. Its app
is compatible with both Android and Apple iOS thus making it accessible to everyone on a
smartphone.
Promotions in the Marketing Mix of Netflix 

• Promotion being the most important part when it comes to the marketing mix of a brand. As a part
of the promotion strategy, Netflix has been constantly promoting and advertising their services in
different ways.

• Firstly, the prime source of their promotion is through social media websites including YouTube
through which it attracts teenagers, as well as a range of adults. However, during 2006, while
maintaining advertising on media websites, they also switched towards personal marketing videos
allowing them to be creative in their promotion for the service.

• Since they are already a globally well-known brand, there’s hardly any need of intense advertising,
hence they are now sticking to pop-up ads, banners, hoardings and other static ads on websites.
Over the past few years, in their marketing videos, to further promote the products they have
featured high ranked celebrities to star in the videos to boost sales and profits.
• Overall with their online promotion, to attract the customers, they have constantly
referred to their free trial for a month to lure customers and acquaint them by making
them trying the service for once on trial basis.

• Netflix would over the years have created different advertisements to correspond with
different seasons or events which eventually helped them to increase their sales and
audience during those most popular times of years. As was the case in the year 2013,
Netflix created a winter advertisement for promoting their service and broadcasting how
Netflix had a range of genres for family shows for the holidays.
Price in the Marketing Mix of Netflix

• Netflix follows Value-based pricing strategy. Value-based pricing is different in a way as it provides

three different subscription offers with a different value attached to different prices it is being
offered. This subscription-based model gives the brand an edge over competitors who charge per
show/movie.

• The higher priced subscription is open to more features as compared to the subsequent lower
priced, a strategy which helps the brand to earn more profits as it lures the customers to join higher
paid subscriptions with various appealing features. “Choose the Plan That’s Right for You” is
something which the brand taglines with its pricing options with.

• In India, Netflix offers three different plans — Basic plan priced at 599/month, Standard plan at Rs
649/per month and lastly Premium plan where a subscriber needs to pay as high as Rs 799/month.
• Under the Basic plan i.e. Rs 499 plan, the brand offers only one screen — meaning only one
person can watch movies or shows at a time, flexibility to watch on any device such as
laptop, TV, phone or tablet, and access to all movies or shows.

• The Standard or Rs 649 plan Netflix offers the same services as the Rs 499 plan with two
additional features — two screens and videos in HD.

• The highest priced i.e. Rs 799 Netflix plan comes with four screens, which means four 
people can simultaneously stream on as many locations.  For instance, one of the friends
has a Netflix account for Rs 799 he/she can split the amount, which drops the per head cost
to Rs 200 approximately.
Place Marketing Mix of Netflix 

• Netflix has both tangible and intangible product offerings. Tangible as in DVD service and
intangible as in the subscription-based model. In India, the brand offers the only
subscription-based model.

• Mail-in DVD service that Netflix has which the DVD is mailed directly to customers home,
this is done through a direct distribution channel, thus in this case product goes directly
from the producer i.e. Netflix to the customer.

• Online streaming service works on multichannel distribution which is when a business has
more than two channels to reach out to customers (“Multi-Channel/Hybrid Distribution
Systems.”). Multichannel distribution for Netflix as this service became available on
multiple platforms like Play station in 2008, Xbox in 2009, and Nintendo Wii in 2010, in
which Netflix distributed by those firms.
Channels of Marketing

The word channel has its origin in the French

word used for canal. Thus a channel is medium
through which goods are made to move as
smoothing as possible to the desired places. In
other words, the route through which goods are
made to move from the place of production to the
place of consumption is termed as ‘Channels of
distribution’ or ‘Marketing channel’.
William Stanton defines “ A Channel of
distribution is the route taken by the title to the
product as it moves from the producer to the
ultimate Consumer or Industrial user”.
Some example of Channels of Marketing
• 1. Pay-Per-Click Marketing :There are two dominating forces in the PPC world these
days: Google Ads and Facebook/Instagram Ads. Google search ads will help you connect with
users who are searching for products or services like yours.
Social Media

Social media is a big player in the marketing world right now. Customers are actively seeking out
brands they like or are interested in and increasing numbers of users are taking to social media to
research or make buying decisions.
Email Marketing

• Email marketing is the best method of direct response marketing there is. Users have opted into
hearing from you, so they’re more willing to open those messages to learn about the latest products,
sales and how to benefit from them.
Role of Marketing Channels
• Create utilities

• Improves distribution efficiency

• Salesmanship
• Provide assortment of goods: (Consistency – consistency in product assortment refers to how
the products lines or products relate to one another in retail For example, the trucks and buses may be
consistent with each other as they are both commercial grade automobiles, but the SUV would not fit or
be consistent considering that it is a consumer)

• Financing

• Merchandising ( Promoting the sale of goods)

• Balancing demand and supply

• Information
Merchandising
Direct and Indirect Marketing channels:
Direct channel of marketing or distribution
This is also known as Zero-level marketing channel. In the Direct channel there are no
intermediaries between the producer and the final buyer through his own network of stores
or at a centrally located place or by appointing door-to-door sales force.

Example of this marketing channel : There are many bakeries and handmade chocolatier
brands that directly sell their confections to their customers through their shop, eating joint,
or home delivery through the orders placed on the website or social media handles of the
bakery owners or chocolatiers.
Indirect Marketing Channel
Indirect marketing channel refers to distributing goods with help of intermediary agencies. A
channel of producer, final consumer and at least one level of middlemen represents indirect
marketing.

Marketing Channels for Consumer goods:

1. Manufacturer » Retailer » Consumer Channel

2. Manufacturer » Wholesaler » Consumer Channel

3. Manufacturer » Agent » Wholesaler » Retailer » Consumer Channel

4. Manufacturer » Wholesaler » Retailer » Consumer Channel

Manufacturer to Retailer to Consumer
This type of Marketing Channels is one of the highly adopted and preferred channels in the
industry. The manufacturers who specialize in the manufacturing of the shopping goods such as
shoes, furniture, and fashion apparels amongst others opt for this Marketing Channel.

Example of this marketing channel : The various items of furniture from the manufacturers of 
China that are displayed and sold through the local retailers are marketed and distributed through
the above-mentioned channel. They procure the furniture items directly from the manufacturers in
China and sell it to the local market adding their profit margins attaching the brand name of
imported furniture.
Manufacturer to Wholesaler to Consumer
This category of Marketing Channel is usually adopted by the consumers who are looking out for
bulk purchases of the specific items and procuring the same from the wholesaler works out quite
easy and cost effective for them owing to the economies of scale factor plus no involvement of
other intermediaries. The wholesaler reduces the cost to the consumer such as service cost or sales
force cost making the items available to the consumer at cheaper rates.

Example of this marketing channel : Shopping from the factory outlets of the brand or warehouse
clubs where the consumer must sign for the membership with the wholesaler in order to buy the
products at cheaper rates.
Manufacturer to Agent to Wholesaler to Retailer to Consumer

This type of Marketing Channel involves more than one middlemen or intermediary making the goods
reach to the consumers. The agents or the middlemen helps and assists with the sale of the goods and
charge their commission from the manufacturer. They are quite helpful when the goods need to reach the
consumers in a short span of time.

Here producer sells first to Agent who sells to wholesaler in turn selling to retailer. Agent or Distributor
acts as facilitating party on commission basis and does not assume title to goods. Agents are used by
manufacturers to free themselves from marketing and pass on the burden of distribution to intermediary.

For example, a fishery makes a large catch of seafood; since fish is perishable it must be disposed of
quickly. It is time consuming for the fishery to contact many wholesalers all over the country, so he
contacts an agent.
Factors affecting channels decision
• Nature of the product

• Customer characteristics

• Nature of the market

• Nature of market competition

• Market environment

• Availability of middlemen

• Economics and Technological factors

Marketing of Banking Services
In the earlier days bankers like any other private sector organizations had their own plans of business
development and adopted their own ways and means to achieve their objectives.

The marketing concept was in the form of advertising and promotion. This was the position till the
middle of 20th century.

Gradually there was a change in the attitude of bankers with respect to customers. In the late 1950s,
new concept in the Marketing services with respect to Banking profession. Deryk – Weyer of Barclays
Bank came out with comprehensive definition of Bank Marketing.

According to him, Bank Marketing consists of identifying the most profitable markets now and in
future needs of the customers, setting business development goals, making plans to meet them and
managing the various services and promoting them to achieve the plans all in the context of changing
environment in the market.
• Thus, the idea of customer satisfaction arose in the 1950s flourished in the 1960s and become an
integral part of Banking Services in the 1970s.

• In the course of time, concept Marketing widened further. From the stage of customer satisfactions,
the Marketing become more concerned with well-being of the ‘Society’ as a whole and resulted in
coining the term “SOCIETAL MARKETING”.

• Marketing of banking services is concerned with product, place, distribution, pricing and promotion
decision in the changing, socio-economic and programme at the right place, at the right time , at a
right price with right communication and promotion.
• Banking is one Industry where there is no middlemen serving the customer. The banks deals with
the customer directly. However with liberalization and globalisation of the economy, middlemen
are gradually emerging in the banking industry. Foreign banks and new private banks like City Bank,
Global Trust Bank and ICICI Bank are offering their franchise in marketing their services.

• In banking services, the marketing strategy start with developing customer profile by which the
bank can collect and analyse all relevant information on customers. The preferences of the
customers are identified with help of these profiles and this enables the bank to enhance its
marketing activities. In order to satisfy the customers’ needs new services may be introduced or
the existing services of the bank may be modified. Customer satisfaction plays an important role in
banking services
• Founded in 1806, State Bank of India (SBI) is an Indian multinational,
public sector bank and financial service company headquartered in
Mumbai, Maharashtra. The bank descends from Bank of Calcutta making it
the oldest commercial bank of the subcontinent.
• The merger of Bank of Madras with two presidency banks of British India,
Marketing Strategy the Bank of Bombay and the Bank of Calcutta leading to the formation of the
Imperial Bank of India which eventually became State Bank of India when
of State Bank of India Reserve Bank of India (RBI)holding 60% stake renamed it to State Bank of
India. Later in 2008, the government took over the stakes held by RBI
taking full control over the Public Sector Bank.
Segmentation, Targeting, Positioning in the 
Marketing Strategy of State Bank of India –

• SBI segments the market based on geographic, demographic, behavioural and psychographic

variables like people from Rural, Urban and Metropolitan who are self-employed, students,
corporate or government employed also behavioural and psychographic includes people who
trusted banking system and frequently used bank and its value-added services.

• It targets students, the lower class who are deprived of banking services, the tech-savvy
business class for whom time is more important.

• Positioned as peoples most trusted bank, it has high accessibility with over 25,000 branches, it
finds relevance to young customers with its value-added services like net banking, telebanking
etc.
• Mission –“Committed to providing Simple, Responsive and
Innovative Financial solutions.”

• Vision– “Be the bank of choice A Transforming India”

• Tagline – “With you all the way, Pure Banking Nothing Else,
The Nation’s banks on us.
Customer analysis in the Marketing strategy of SBI

Customers of SBI includes farmers and workers in rural, students, early jobbers, both Public
and private sector working professionals, businessmen, young entrepreneurs. Customers of
SBI can't be put in a specific income group bracket and thus ranges from lower class looking
to open zero balance account for government benefits transfer through Direct Benefit
transfers to high-class individuals seeking loans for their business.
Distribution in the Marketing strategy of SBI –

SBI has a large footprint over 25,000 domestic branches (including extension counters) and
59,000+ ATM’s after its merger with Bhartiya Mahila Bank and its five associate Banks on
1st April 2017. The overseas operations of the bank are spread over its 195 international offices
with branches spread across 36 countries. 
Competitive advantage in the Marketing strategy of SBI

• Ranked 216th on the Fortune Global 500 list of the world’s biggest corporations 2017, SBI

is India’s largest bank with a 23% market share of assets and a quarter of the share of loan

and deposit market of the country.

• SBI over the years has attained the leadership status in digital banking space by offering a

pool of seamless and secured services like, SBI YONO- an omnichannel banking and 

lifestyle platform which has close to 10 million downloads already for which SBI has Tied

up Reliance JIO, State Bank Buddy- a wallet service, State Bank Anywhere- Mobile

banking platform.
• With the set up 60 digital branches referred to as sbiINTOUCH, the bank aims to offer
advanced services like instant loan approvals, access to the latest mutual funds, assistance
in choosing investment portfolios and other financial services.

• Equipped with the latest technology these creates an instant connection with the

customers in real-time with an audio-visual experience and an ability to print, scan, and
share the document using touchscreen controls ensuring the bank doesn’t lose a potential
customer. Thus these digital branches provide SBI an edge over its competitors and aim
to help SBI expand its reach with increasing profitability.
Marketing of Banking Services in the
Globalised scenario – Emerging Challenges
“Change” is a continuous process and banking industry is no exception to this law which is
natural. due to the implementation of the financial sector reforms and policies for the
country change in the banking industry is inevitable.

The main aim of the financial sector report is to promote an efficient, competitive and
diversified financial system in the country. After liberalisation and globalisation process
that was initiated in 1991, the Indian banking industry has undergone tremendous
transformation. These changes have forced the Indian banking industry to adjust the
product mix and to remain competitive in the globalised environment.
The following are some of the vital challenges that threaten the Indian banking industry.

• Competition from foreign banks and now new private sectors banks

• Technological advancement

• Innovation

• Diversified activities

• Customer awareness and satisfaction

• Development of skill of Banks personnel

• Corporate governance

• Profitability nature
Marketing of Insurance Services
The term Insurance Marketing refers to the marketing of Insurance services with aim to create
customer and generate profit through customer satisfaction. It means knowing the market and
developing a need oriented product, formulating the product mix, making suitable pricing
decisions, designing sensitive promotional strategies and effective distribution. It also involves a
scientific approach to management of agents, who distribute insurance product, so that
qualitative improvements are made possible.

The insurance marketing focuses on the formulation of an ideal mix for insurance organisation
survives in the right perspective.
Market Segmentation in Insurance services
In the Insurance services, the task of formulating the overall marketing strategy cannot be
performed satisfactorily till market segmentation. This is because the market is vast, the
potential policyholders are in a large number and their needs and requirements are diverse.
There are a number of similarities in the market segmentation of banking and insurance
services.

Insurance market segmentation is done on the basis of region. The entire nation is divided
into four zones viz. Central, Eastern, Western and Northern Zone. If market segmentation is
done in the right way the marketer finds it convenient to identify the market. The main
purpose of segmentation is to know the policyholder.
It is natural that the needs and requirements of potential policyholders belonging to
different zones or region can’t be uniform.

The region-wise segmentation simplifies the task of having detailed idea of the language,
culture, taste and preferences. This will help in making the market appeal creative, sensitive
and proactive.

It is necessary that the insurer attempts to cover the entire market. It is not sufficient that
only the employed person are covered, out efforts should be to cover the self- employed too
irrespective of their level of income.

In the Indian perspective, we find the rural markets to be more profitable ones for both
banks and Insurance in the 21st century. Hence, due weightage should be given to the rural
segment.
Privatization of Insurance Sector
Insurance Sector hurdles
The Insurance Industry has been growing between 15 to 20 percent, it lags far behind its
global counteracts. This is due to following reasons:

• Insurance companies create products and go out find customers. They do not create
products that the market wants.

• Insurance awareness among the General Public is low.

• Return from Insurance products are low.

• The Term Insurance plans are not promoted.

• Unit linked assurance are not available.

Life Insurance Corporation of India or simply known as LIC is an Indian
company that deals in insurance and investments. This largest company of
insurance is an Indian state-owned company and has its headquarters in
Marketing Mumbai, India. Life Insurance Corporation was established in the year
1956 after the Indian parliament passed an act to nationalize the industry
Strategy of private insurance. Nearly two hundred and forty-five companies of
insurance were merged in order to create this company LIC. Since that
time until the year 2000, the sector of insurance has been under the
of LIC monopoly of LIC. The main objective of nationalization of LIC- Life
Insurance was to remove the risk of loss and to provide the policyholder
the protection in terms of money.
Market Research
• Research is a detailed, systematic and comprehensive study of a problem. In marketing
research the details of the marketing problems are collected and analysed, conclusions are
drawn and suggestions are made in order to solve the problems quickly, correctly and
systematically. Marketing research can solve the problems relating to consumers, product,
market competition and sales promotion.

• Marketing research facilitates accurate marketing decisions for consumer satisfaction and
support on the one hand and sales promotion on the other hand
According to the American Marketing Association
marketing research is “ the systematic gathering, recording
and analysing of data about problems relating to the marketing
of goods and services”.
Objectives of Marketing Research:

(1) To Provide Basis For Proper Planning:

Marketing and sales forecast research provides sound basis for the formulation of all
marketing plans, policies, programmes and procedures.

(2) To Reduce Marketing Costs:

Marketing research provides ways and means to reduce marketing costs like selling,
advertisement and distribution etc.

(3) To Find Out New Markets for the Product:

Marketing research aims at exploring new markets for the product and maintaining the
existing ones.
(4) To Determine Proper Price Policy:

Marketing research is considered helpful in the formulation of proper price policy with
regard to the products.

(5) To Study in Detail Likes and Dislikes of the Consumers:

Marketing research tries to find out what the consumers, (the men and women who
constitute the market) think and want. It keeps us in touch with the consumers, minds and
to study their likes and dislikes.

(6) To Know the Market Competition:

Marketing research also aims at knowing the quantum of competition prevalent in the
market about the product in question. The company may need reliable information about
competitor’s moves and strategies which are of immense significance for further planning.
(7) To Study The External Forces and Their Impact:

Marketing research provides valuable information by studying the impact of external forces
on the organization. External forces may include conditions developing in foreign markets,
govt, policies and regulations, consumer incomes and spending habits, new products
entering in the market and their impact on the company’s products.
Why is Market Research Important?
With economy being competitive with each passing day it is important for businesses to
know and understand preferences of their consumers. Conducting research is one of the
best ways of achieving customer satisfaction, reduce customer churn  and elevate business.
Here are the reasons why market research is important and should not be ignored:

• It provides information and opportunities about the value of existing and new products,
thus, helping businesses plan and strategize accordingly.

• It helps in determining what the customers need and want. Marketing is customer-centric
and knowing the customers and their needs will help businesses design product or
services that best suit them.
• By understanding the needs of customers, businesses can also forecast their production and
sales. One of the most difficult aspects for a production manager is to keep inventory
stacked. What is the requirement and how much should be produced to full fill the needs of
the customer? Market research helps in determining optimum inventory stock.

• To stay ahead of competitors market research is a vital tool to carry out comparative studies.
Businesses can device business strategies that can help them stay ahead of their competitors.
Meaning of Customer Churn

The churn rate, also known as the rate of attrition or customer churn, is the rate at

which customers stop doing business with an entity. It is most expressed as the percentage of
service subscribers who discontinue their subscriptions within a given time period.
Benefits of an Efficient Market Research
• Make well-informed decisions: The growth of an organization is dependent on the
way decisions are made by the management. Using market research techniques, the
management can make business decisions based on obtained results that back their
knowledge and experience. Market research helps to know market trends, hence, to carry
it out frequently to get to know the customers thoroughly.

• Gain accurate information: Market research provides real and accurate information

that will prepare the organization for any mishaps that may happen in the future. By
properly investigating the market, a business will undoubtedly be taking a step forward,
and therefore it will be taking advantage of its existing competitors.
• Determine the market size: A researcher can evaluate the size of the market that must
be covered in case of selling a product or service in order to make profits.

• Choose an appropriate sales system: Select a precise sales system according to what

the market is asking for, and according to this, the product/service can be positioned in
the market.

• Learn about customer preferences: It helps to know how the preferences (and
tastes) of the clients change so that the company can satisfy preferences, purchasing
habits, and income level. Researchers can determine the type of product that must be
manufactured or sold based on the specific needs of consumers.
• Gather details about customer perception about the brand: In addition to
generating information, market research helps a researcher in understanding how the
customers perceive the organization or brand.

• Analyse customer communication methods: Market research serves as a guide for

communication with current and potential clients.

• Productive business investment: It is a great investment for any business, because

thanks to it they get invaluable information, it shows researchers the way to follow to take
the right path and achieve the sales that are required.
Limitation of Marketing research
• Marketing research cannot predict accurately
• Research conclusions are not dependable
• Marketing research cannot study all Marketing problems
• Resistance by marketing executives
• Lengthy and time consuming activities
• Complexity of the subject
• Limited practical utility
• Marketing research offers suggestions and not decision making
Process of Marketing Research
• Identifying and defining the research problem

• Conducting preliminary survey

• Determining research objectives

• Creating research design

• Determining data need

• Selecting data sources

• Designing a simple

• Designing a questionnaire
• Selection of field staff

• Data collection

• Data processing

• Data analysis and interpretation

• Preparation of research report

• Submission of research report

• Follow-up of recommendations
• https://www.professionalacademy.com/blogs-and-advice/marketing-theories---the-marketing-mi
x---from-4-p-s-to-7-p-s
• www.marketing91.com
• https://www.researchgate.net/publication/331223781_Marketing_of_Banking_Services_A_Comp
arative_Study_on_Some_Selected_Private_Sector_Commercial_Banks_in_Khammam_City
• https://www.google.com/search?q=marketing+and+selling+concept&tbm=isch&chips=q:marketin
g+and+selling+concept,online_chips:examples&rlz=1C1CHNY_en-GBIN906IN906&hl=en&sa=X&v
ed=2ahUKEwiPgufRwO3qAhUSNisKHTxBAYIQ4lYoA3oECAEQGA&biw=1349&bih=608#imgrc=KltD
W_YPo5c9mM
• https://www.questionpro.com/blog/what-is-market-research/