Summary of Chapter 1: THE ROLES OF MARKETING IN BANK MANAGEMENT The role of financial services sectors continues to grow in the

economies of most of the western nations; pressures are mounting for a more affective marketing management of the financial services offered by the banks. Bank is the most important financial service sector because of its profits turnovers and employee generations. For this reason the last few years there has been a growing interest in applying marketing techniques and tools in the field of bank. Marketing is becoming increasingly necessary in todays banks competitive environment. Banks think seriously about the marketing because of its intense rivalry. For marketing it is important for a bank to recognize the two fundamentally different functions that bank marketing must perform. It must attract deposit and attract borrowers and user of services. The main functions of commercial banks are the following: 1. Banks keep firms and individuals fund as the name of deposit in a safe place. 2. Lending funds is another major function of a bank. 3. Banks provide a variety and related services. The major characteristics of bank services are its intangibility, inseparability, highly individualized marketing system, lack of special identity, wide range of products and services, geographic dispersion, growth must be balanced with risk. Most commercial banks have two types of objectives flexible goals and fixed services. The bank marketing function is one of the four subsets of management controllable variables. They are bank objectives, environmental variables, controllable variables, bank slogans. Banking throughout the western world has seen a kind of revolution that is often called the retail banking revolution. This revolution had several characteristics such as: A decline of the big business use of banking directly, a significant increase number in the bank branch, intensifying rivalry of other financial institutions, loosening of legal restrictions. It has been suggested that the resistance to the marketing approach has been greater in the UK banking system than in USA. The marketing approach refers basically to four steps: (i) research to determine customers financial requirements, (ii) design new services or innovate old ones according to the findings, (iii) market services to the customer for whom they were researched and designed at a profit, (iv) satisfy customers financial needs. The objective of the marketing process is profitable sales of services that satisfy customers financial requirements and needs. The overall marketing program of the bank may innovate a large number of marketing strategies and mixes. The marketing strategy of a bank includes a very clear definition of target customers, the development of a marketing mix to satisfy the customers at a profit to the bank, planning for each of the sources markets and each of the use markets and organization and administration. All these elements of

the marketing strategy, together with the roles of marketing research and their relationship with the banks marketing management system. The development of an appropriate marketing mix implies the recognition of a target market. It might be suggested that the traditional market for the banks has been corporate institutions and salaried white collar workers. Product, price, place and promotion represent the main four elements of marketing mix. Once the characteristics of the market are known through market segmentation the bank can then ideally develop a marketing strategy. When a bank decided on its marketing expenditure level it has to allocate this in relation to the four elements of the marketing mix.

Summary of Chapter 2 CUSTOMER BEHAVIOR AND MARKET SEGMENTATION Traditionally bankers used a purely financial analyst to analyze their customers or clients, particularly in the provision of loans, extension of overdraft, credit and cheque facilities. Behind the financial analyses there are the behavior characteristics. To understand the financial analysis fully bank need to look into the customers attitudes and behavior characteristics. The behavioral characteristics are vital to understanding the customer. These characteristics are basically influenced by external factors arising from influential persons and reference groups (membership and non-membership group), internal factors arise from internal attitudes of an individual and the consumer process. Factors and influences on bank customers are the cultural factor, social factor, psychological factor, personal factors. The cultural factor influences by culture of a locality and the social class. The social factor is influenced by the reference group, family, and the roles and status. The psychological factor is influenced by the motivation and perception and finally the personal factor is influenced by attitude and belief, lifestyle profession, age, economic standing, and personality. Consumer process is the most critical part of understanding consumer behavior in banking.