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General Bank Management

Marketing Management for Bankers


MODULE D

C AIIB

What is Marketing??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?

All of the above, plus much more!

Marketing = ?
Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of ideas,
goods, services to create exchanges that satisfy
individual and organizational goals
American Marketing Association

Marketing = ?
Marketing management is the art and science of
choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.

Simple Marketing System


Communication

Industry

(a collection
of sellers)

Goods/services

Money

Information

Market

(a collection
of Buyers)

Marketing = ?

Marketing is the sum of all activities that take you to a


sales outlet. After that sales takes over.

Marketing is all about creating a pull, sales is all about


push.

Marketing is all about managing the four Ps

product

price

place

promotion

The 4 Ps & 4Cs


Marketing
Mix

Convenience
Place

Product
Customer
Solution

Price

Promotion

Customer
Cost

Communication
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Difference Between - Sales &


Marketing ?

Sales
trying to get the customer to want what the
company produces

Marketing
trying to get the company produce what
the customer wants

Scope What do we market

Goods
Services
Events
Experiences
Personalities
Place
Organizations
Properties
Information
Ideas and concepts

Core Concepts of
Marketing
Based on :
Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

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Core Concepts of Marketing

Needs, wants
demands

Markets

Products

Marketing &
Marketers

Utility, Value &


Satisfaction

Xchange, Transaction
Relationships

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Core Concepts of Marketing

Need food ( is a must )

Want Pizza, Burger, French fry's ( translation of a need


as per our experience )

Demand Burger ( translation of a want as per our


willingness and ability to buy )

Desire Have a Burger in a five star hotel

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In order to understand Marketing let us begin


with the Marketing Triangle

Customers

Company

Competition

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Who is a Customer ??
CUSTOMER IS . . . . .
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
that satisfies a want or a need

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Customer
CUSTOMER has needs, wants, demands and
desires
Understanding these needs is starting point of the
entire marketing
These needs, wants arise within a framework
or an ecosystem
Understanding both the needs and the ecosystem is
the starting point of a long term relationship

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How Do Consumers Choose Among


Products & Services?
Value - the value or benefits the customers gain from
using the product versus the cost of obtaining the
product.
Satisfaction - Based on a comparison of performance
and expectations.
Performance > Expectations => Satisfaction
Performance < Expectations => Dissatisfaction

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Customers - Problem
Solution
As a priority , we must bring to our customers
WHAT THEY NEED
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems

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Customer looks for Value


Value

= Benefit / Cost

Benefit

= Functional Benefit + Emotional


Benefit

Cost

= Monetary Cost + Time Cost +


Energy Cost + Psychic Cost

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Strategic Marketing
Strategic marketing management is concerned with
how we will create value for the customer
Asks two main questions
What is the organizations main activity at a

particular time? Customer Value


What are its primary goals and how will these be

achieved? how will this value be delivered

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Strategic Planning
Strategic Planning is the managerial process of
creating and maintaining a fit between the
organizations objectives and resources and the
evolving market opportunities.

Also called Strategic Management Process

All organizations have this

Can be Formal or Informal

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The Strategic-Planning, Implementation,


and Control Process

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Business Strategic-Planning
Process
External environment
(Opportunity &
Threat analysis)

Goal Formulation

Business Mission

Internal Environment
(Strength/ Weakness analysis)

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Strategy Formulation
Environmental Analysis
Internal Analysis

Competitor
Customer
Supplier
Regulatory
Social/ Political

Technology Know-How
Manufacturing Know-How
Marketing Know-How
Distribution Know-How
Logistics

Opportunities & Threats

Identify opportunity

Strength & Weaknesses


Identity Core Competencies

Fit internal Competencies with external opportunities

Firm Strategies

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The Marketing Plan


A written document that acts as a guidebook of
marketing activities for the marketing manager

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CONTENTS of MARKETING PLAN


Business Mission Statement
Objectives
Situation Analysis (SWOT)
Marketing Strategy
Target Market Strategy
Marketing Mix

Positioning

Product

Promotion

Price

Place Distribution

People

Process

Implementation, Evaluation and Control

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The Marketing Process


Business
Mission
Stateme
nt
Objectiv
es
Situation
or SWOT
Analysis

Marketing Strategy
Target Market
Strategy

Marketing Mix
Product

Place/Distribution

Promotion

Price

Implementation
Evaluation,
Control

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Marketing Environment

Why a product like radio


declined and now once again
emerging as an entertainment
medium ?

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What Were the Drivers of This Change ?


Technology ?
Government policy ?
Other media substitutes ?

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Why Market Leaders


Suffered ?

HMT vs. Titan

HLL vs. Nirma

Bajaj vs. Honda

Dot.com boom, then bust and now resurgence

Market leadership today cannot be taken for


granted.New and more efficient companies are able
to upstage leaders in a much shorter period.

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Factors
Influencing
Companys
Marketing
Strategy

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External Marketing Environment


External Environment
is not controllable

Social
Social
Change
Change

Ever-Changing
Marketplace

Demographics
Demographics

Product
Product
Distribution
Distribution
Promotion
Promotion
Price
Price

Economic
Economic
Conditions
Conditions

Physical / Natural

Competition
Competition

Environmental
Scanning

Target Market

Technology
Technology

Political
Political&&
Legal
LegalFactors
Factors

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The macro-environment

is the assessment of the external forces that act upon the


firm and its customers, that create threats & opportunities

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Product

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Product is . . . . .

Anything that is offered to the market for


attention, acquisition, use or consumption that
satisfies a want or a need

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Types of Products
PRODUCTS

Consumer
Products

Services

Industrial
Products

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Product Items, Lines, and Mixes

Product
Product Item
Item

A
A specific
specific version
version of
of aa product
product
that
that can
can be
be designated
designated as
as aa
distinct
distinct offering
offering among
among an
an
organizations
organizations products.
products.

Product
Product Line
Line

A
A group
group of
of closely-related
closely-related
product
product items.
items.

Product
Product Mix
Mix

All
All products
products that
that an
an
organization
organization sells.
sells.
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Product Mix
Width how many product lines a company has
Length how many products are there in a product line
Depth how many variants of each product exist within a
product line
Consistency how closely related the product lines are in
end use

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Depth of the product lines

Gillettes Product Lines & Mix


Width of the product mix
Blades and
razors

Toiletries

Fusion 5 blade
Mach 3 Turbo
Mach 3
Sensor
Trac II
Atra
Swivel
Double-Edge
Lady Gillette
Super Speed
Twin Injector
Techmatic

Series
Adorn
Toni
Right Guard
Silkience
Soft and Dri
Foamy
Dry Look
Dry Idea
Brush Plus

Writing
instruments
Paper Mate
Flair
S.T. Dupont

Lighters
Cricket
S.T. Dupont

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What is a Service?
Defining the Essence
An act or performance offered by one party to another
(performances are intangible, but may involve use of
physical products)
An economic activity that does not result in ownership
A process that creates benefits by facilitating a desired
change in customers themselves, or their physical
possessions, or intangible assets

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Some Industries - Service


Sector
Banking, stock broking

Health care

Lodging

Education

Restaurants, bars,
catering

Wholesaling and retailing

Insurance

Repair and maintenance


Professional (e.g., law,
architecture, consulting)

News and entertainment


Transportation (freight and
passenger)

Laundries, dry-cleaning

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Classification of Services
Banking

Pure Intangible
Service

Good Transportation
Major Service with
Minor Product
Business Hotels
Product = Service
Computers
Major Product with
Minor Services
Materials / Components

Pure Tangible Product

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Major Characteristic of Services

Intangibility Services are intangibility cannot be seen,


tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed


simultaneously.

Variability or Heterogeneity Services are highly variable

Perishability Services cannot be stored.

Non Ownership - Services are rendered but there is no


transfer of title

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The Marketing Mix


The conventional view of the marketing mix consisted of
four components (4 Ps): Product, Price, Place/
distribution and Promotion.
Generally acknowledged that this is too narrow today;
now includes , Processes, Productivity [technology ]
People [employees], Physical evidence
Marketers today are focused on virtually all aspects of
the firms operations that have the potential to affect
the relationship with customers.

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The 8Ps of Integrated Service


Management vs. the Traditional
4Ps

Product elements

Place, cyberspace, and time

Process

Productivity and quality

People

Promotion and education

Physical evidence

Price and other user outlays

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The Give and Get of Marketing

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Great Words on Marketing


1.

The purpose of a company is to create a customerThe only


profit center is the customer.

2.

A business has twoand only twobasic functions: marketing


and innovation. Marketing and innovation produce results: all the
rest are costs.

3.

The aim of marketing is to make selling unnecessary.

4.

While great devices are invented in the Laboratory, great


products are invented in the Marketing department.

5.

Marketing is too important to be left to the marketing


department.

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Drivers of Customer Satisfaction


Many aspects of the firms value proposition contribute
to customer satisfaction:
The core product or service offered
Support services and systems
The technical performance of the firm
Interaction with the firm and it employees
The emotional connection with customers

Ability to add value and to differentiate as a firm focuses


more on the top levels

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Marketers and Markets


Marketers are focused on stimulating
exchanges with customers who make up
markets B2C or B2B.
The market is comprised of people who play
a series of roles: decision makers,
consumers, purchasers, and
influencers.
It is absolutely essential that marketers have
a detailed understanding of consumers,
their needs and wants.
Much happens before and after the sale to
affect customer satisfaction

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Stages of Customer Interaction

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What Changed in Marketing


New Economy

Old Economy
Organize by product units
Focus on profitable transactions
Look primarily at financial
scorecard
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
No customer satisfaction
measurement
Over-promise, under-deliver

Organize by customer segments


Focus on customer lifetime value
Look also at marketing scorecard

Focus on stakeholders
Everyone does the marketing
Build brands through performance
Focus on customer retention
Measure customer satisfaction and
retention rate
Under-promise, over-deliver

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Are Banks truly


marketing-savvy and
customer - centric?

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Myth 1 The larger the range of products, the


more customer-centric I am.

Mythbuster The range of products has


emerged from being
competition-centric.

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Myth 2 Better technology (read CRM) leads to


better customer service.

Mythbuster Technology
alone does not deliver,
helps people do.

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Myth 3 Launch a product and the customer will start

using instantly.
- Give a customer a card and he will learn how to play

with it immediately

Mythbuster Customers need


To be educated too

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Myth 4 The only way to get a customer is


from
competition.

Mythbuster Customers
are not only present
where competition is.

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Myth 5 Just advertise and - You will sell.

Mythbuster Advertising will only sell,


Not retain customers.
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Myth 6 No difference between marketing &


selling

Mythbuster Selling focuses on the needs of the


seller; marketing on the needs of the buyer.

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Myth 7 In the absence of relationships trust


builds financial brands

Mythbuster Trust is not a differentiator at all


it is the very minimum that the customer expects!!

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So what will the differentiators be :


Technology ?
Brand ?

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The real differentiator of


customer centricity in a
commoditised world of
financial products -

Customer Service !
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Thank You
sagarnarsian@yahoo.com

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