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CHAPTER 1
INTRODUCTION
The forces of deregulation, advancing technology and
general trend towards globalisation have vastly increased the
competitive pressures within the financial services market that
has in turn affected both the structure and operation of financial
service providing firms like banks.
Banks are providers of financial services, financial
intermediaries and key participants in a nation's payment system.
As such banks play a major role in the economy and in the
financial well being of a nation. In India since 1992,
deregulation, technology, and aggressive competition fostered
more changes in the banking industry than it has experienced in
its entire history. Precisely because of competition, providing
financial services in an able manner requires an excellent
marketing orientation.
Banks now operate in a situation of keen competition in
their financial service activities, whether it is canvassing of
deposits, extending credit line or in selling ancillary services.
With the liberalization of the banking sector and entry of more
players, banks need to become market oriented with new and
innovative schemes, at competitive prices available at the place
the customer needs them and delivered with efficiency and
quality of service
Role of Marketing
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Objective of Marketing
The main objective of marketing may be mentioned below:
1. Creation
of
demand
and
securing
consumers
satisfaction:
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3. Building goodwill:
The competent and capable marketing management sells
quality product at reasonable price and thus goodwill of the
enterprise is built. Marketing adopts various image building
activities by popularizing products at convenient outlets.
4. Profitable sales volume:
Marketing management refers to all business activities, which
are consumer oriented. It is the sincere effort of marketing
management to maximize the profit of the company. As profit is
directly related to sales, so the marketing management to
maximize the profit of the company. As profit is directly related
to sales, so the marketing management tries to increase its sales
by
market
development,
product
development,
market
CHAPTER 2
EVOLUTION OF MARKETING CONCEPTS
1. The Exchange Concept:
Trade has existed since man was able to produce a surplus.
The first kind of this trade was called barter system. It means
exchanging goods with one another. During the 1800s the world
was facing industrial revolution. People were shifting from
agricultural to industrial products, their income was increasing
and they demanded new products. The products had a
commanding position since whatever produced, was demanded
and consumed by the customer.
CHAPTER 3
FINANCIAL PRODUCT IN INDIA
Financial products refer to those instruments that help you
save, invest, get insurance or get a mortgage. The major types of
financial products are:
2. Bonds:
They are issued by companies to finance their business
operations and by governments to fund expenses like
infrastructure and social programs. Bonds have fixed interest
rates, making the risk associated with them lower than that with
shares. The principal or face value of bonds is recovered at the
time of maturity.
Bonds are fixed income instruments which are issued
for the purpose of raising capital. Bonds issued by the
Government carry the lowest level of risk but could deliver fair
returns.
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3. Treasury Bills:
These are instruments issued by the government for
financing its short term needs. They are issued at a discount to
the face value. The profit earned by the investor is the difference
between the face or maturity value and the price at which the
Treasury bill was issued.
4. Options:
Options are rights to buy and sell shares. An option
holder does not actually purchase shares. Instead, he purchases
the rights on the shares.
5. Mutual Fund:
These are professionally managed financial instruments
that involve the diversification of investment into a number of
financial products, such as shares, bonds and government
securities. This helps to reduce an investors risk exposure, while
increasing the profit potential. This investment avenue is popular
because of its cost-efficiency, risk-diversification, professional
management and sound regulation. You can invest as little as Rs.
1,000 per month in a mutual fund.
A mutual fund allows a group of people to pool their
money together and have it professionally managed, in keeping
with a predetermined investment objective. The portfolio
manager trades the funds underlying securities, realizing a gain
or loss, and collects the dividend or interest income. The
investment proceeds are then passed along to the individual
stocks
6. Certificate of Deposits:
Certificate of deposits (or CDs) are issued by banks,
thrift institutions and credit unions. They usually have a fixed
term and fixed interest rate.
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7. Annuities:
These are contract between investors and insurance
companies. Wherein the latter makes periodic payments in
exchange for financial protection in the event of an unfortunate
incident.
8. Insurance:
A contract in which one party agrees to pay for another
partys financial loss resulting from a specified event (for
example, a collision, theft, or storm damage).
9. Banking:
Banks
are
financial
intermediary
institution
for
CHAPTER 4
FUNCTIONS OF MARKETING
This function involves the transfer of ownership of goods
from producers to the users of goods. It involves:
2. Selling:
It is a process, whereby goods and services flow finally to
the consumers. Selling function involves:
(a) Planning production of need based goods.
(b) Discovery of the market for goods and sales promotion for creating
demand.
(c) Salesmanship, advertising and sales promotion for creating demand.
(d) Determining terms of sales and price, quantity, quality, nature of
packing and delivery etc.
(e) Transfer of title and possession goods. Selling creates demand for
products.
CHAPTER 5
MARKETING APPROACHES ADOPTED BY
BANKS
Marketing strategies play a very important role in
determining the growth of the financial services industry.
Various marketing strategies adopted by the major financial
service providers like banks and are discussed below:
1. Banks:
The marketing and distribution strategies of banks are
different in urban and rural areas due to diverse demographic and
socioeconomic nature of these markets. Private Banks are mostly
concentrated in urban areas due to higher income, better
infrastructure, higher investor base and concentration of
commercial activities in the urban areas of the country. The
distribution channel used by such banks includes bank branches,
ATMs, internet banking, phone banking, direct selling agents,
call centres, etc.
The distribution networks developed by public banks in
urban as well as rural areas are a result of policy measures due to
which the number of public sector bank branches is higher as
compared to private or foreign banks. Private sector banks are
also penetrating into the rural areas by using the non-branch
delivery systems like the Business Facilitator (BF) model or
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CHAPTER 6
MARKETING OF FINANCIAL SERVICES
1. India:
India has a diversified financial sector, which is
undergoing rapid expansion. The sector comprises commercial
banks, insurance companies, non-banking financial companies,
co-operatives, pension funds, mutual funds and other smaller
financial entities. The financial sector in India is predominantly a
banking sector with commercial banks accounting for more than
60 per cent of the total assets held by the financial system.
India's services sector has always served the countrys
economy well, accounting for about 57 per cent of the gross
domestic product (GDP). In this regard, the financial services
sector has been an important contributor.
The Government of India has introduced reforms to
liberalise, regulate and enhance this industry. At present, India is
undoubtedly one of the world's most vibrant capital markets.
Challenges remain, but the future of the sector looks good. The advent
of technology has also aided the growth of the industry. About 75 per
cent of the insurance policies sold by 2020 would, in one way or
another, be influenced by digital channels during the pre-purchase,
purchase or renewal stages, as per a report by Boston Consulting
Group (BCG) and Google India.
3. United Kingdom:
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financial
services
sector
includes
banking,
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4. China:
Due to Chinas historic economic expansion in the last
two decades, capital is no longer scarce companies are looking
for more sophisticated ways to manage their financial dividends
and the consumer demand for financial services is on the rise.
This has resulted in a dramatic increase in market size
for financial services of all kinds. Financial intermediation,
essentially the sum total of deposits and loans, totalled
approximately RMB1.77 trillion, or approximately US$280
billion, in 2009. At the end of 2010, total Chinese banking assets
topped RMB94.3 trillion (US$15 trillion), up 20 percent from the
previous year. In 2010, China produced US$5.6 billion in
investment-banking revenue the largest in Asia. Chinas total
insurance premium volume has grown RMB160.9 billion (US$25
billion) to RMB1.45 trillion (US$225 billion).
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Marketing of Bank
1. India:
The Indian banking system, by habit and tradition,
considered deposit growth as the business objective and other
parameters
such
as
productivity,
profitability,
customer
banks
revenues
from
middle-market
cash
customer.
The bank should have a single contact point to
(iii)
resolve problems.
The customer service associate must either solve
problem on his or her own or refer the customer
to someone else in a clear hierarchy of problem
(iv)
(v)
communicate.
To provide creative tools that makes it easier for
new customer to change banks or add new
services as part of an existing relationship. For
example many banks have developed a software
package that automatically converts a new
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new one.
Banks must recognise, above all, that middlemarket treasury officers have less time and fewer
resources for cash management than their peers in
larger organization. The letter have specialized
finance staffs with different needs and work
styles, whereas the financial controller of a
middle-market company typically has to do
(x)
leading.
Growth only by acquiring new customers is not
always feasible. To grow in the domestic market,
banks will need to strengthen relationship with
their current customers and innovate their
offerings.
(xii) When banks do comes up with new products, the
products often fail because they dont focus
enough on the consumer. For example the illdefined smart-card and electronic cash systems,
which have yet to take off in the U.S. by contrast,
the smart-card system in Hong Kong called
octopus, which enables user to ride public
transportation without having to buy tickets is a
big hit. Banks should become more customers
focused.
(xiii) Internal changes can improve the chance of
success. Citibank linked its customer service
performance to sales success. Its not only a
brilliant way to improve customer service; it can
also give the banks marketers greater insight into
consumer needs than they ever had before.
(xiv) Banks should look for new insight from the
existing customer data. Most financial-service
companies either dont mine their data enough or
dont do it in a way that allows the information to
reach product development. One tool that is often
used in consumer products but frequently
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3. United Kingdom:
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(i)
(ii)
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new electronic delivery channels. For e.g. HSBC was the first to
bring the concept of TV banking in the UK and Lloyds, Barclays
and Nationwide have excellent online banking facilities.
4. China:
Expansion abroad is a priority for Chinas financial
institutions. Given the current worldwide financial crisis, and
relatively large amount of liquidity at their disposal, Chinese
banks are in a good position to make meaningful progress
towards this goal.
However its experience with Non-performing Loans
(NPLs) makes it cautious. For instance, the Bank of China has
not gotten final approval yet for its announced 20% stake in
Rothschild.
Chinese financial institution initially moved overseas to
serve corporate clients expanding their businesses abroad.
Maintaining these clients business is a top priority today as well,
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Marketing of Insurance
1. India:
Insurance is a form of risk management primarily used to
hedge against the risk of a contingent, uncertain loss. It is the
equitable transfer of the risk of a loss from one entity to another, in
exchange for payment.
In India, it has been eleven years, since the insurance market
has been opened up, and the new entrants in to the market have set up
shop in most of the cities. The public sector companies have already
established themselves in the market. But there are multiple
challenges face by theses insurance companies, of which two are
critical:
Designing the products suiting the market
Using the right marketing strategies to reach all customer segments.
While the companies have been quite successful in dealing
with the first of these challenges using the existing product features
and leveraging the technical
still grappling with the right channel mix for reaching potential
customers.
The insurance industry of India consists of 52 insurance
companies of which 24 are in life insurance business and 28 are non33
insurers,
which
include
two
specialised
insurers
Co-registration Methods:
This is perhaps the perhaps the best method for generating
targeted leads. It offers customers an easy and time efficient measure
to choose a policy. In co-registration method, any visitor who
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3. United Kingdom:
The UK insurance sector is an important part of the UK
economy. There are two broad sectors in the UK insurance marketlong term insurance and general insurance. Long term insurance
covers life insurance, pensions, annuities and income protection
insurance. General insurance covers motor insurance, accident and
health insurance, general liability insurance and pecuniary-loss
insurance.
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challenges for the UK insurance industry are as follows:The emergence of a more knowledgeable customer base.
Increase in online purchase and trading
Increased volume of information to manage.
New EU directives and accounting standards.
4. China
In addition to governmental restriction and regulations,
foreign insurance companies have also faced a number of Chinese
market challenges. Reinsurance business is closed to foreign insurers.
Joint venture management appears to be very difficult in China. For
example, recently, three experienced senior managers of Sino-foreign
JVs were removed from their management position in AXA
Minmetals Assurance Co (France), Allianz Dazhong Life Insurance
Co. (Germany), and China Life and Colonial Life Insurance Co.
(Australia). There are a number of reasons for the management
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CHAPTER 7
CONCLUSION
Customers for financial services are changing in terms of
their wants, needs, desires, expectations and problems and financial
service providers have to understand who their customers are, what
they prefer, why they buy, who makes the decision and how the
consumer uses the product and service.
In conformity with these changes, there should be changes in
the Bank's services, training, attitudes and images, marketing
strategies and patterns of organization and control. New technology
driven products blended with the traditional ones and personalized
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CHAPTER 8
BIBLIOGRAPHY
Books:
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Reddy
Internet:
Wikipedia
www.sribd.com
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