MARKETING OF BANKING AND INSURANCE PRODUCTS

MARKETING OF BANKING AND INSURANCE

PRODUCTS

• The term was first academically defined in 1937 when the newly born American Marketing Association (AMA) asserted:– “Marketing consists of those activities

involved in the flow of goods and services from the point of production to the point of consumption.[2]"

• Adding to Kotler's and Norris' definitions, the Chartered Institute of Marketing's (CIM) definition claims marketing to be the "...management process of anticipating, identifying and satisfying customer requirements profitably .

Marketing management ?

• Marketing management ?

• 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.

• For a marketing plan to be successful, the mix of the four "Ps" must reflect the desires of the consumers in the target market

Types of markets

• Consumer markets.

• Business markets.

• Global markets.

• Non-profit and governmental markets.

Marketing mix

product promotion placeprice

Evolution of marketing.

The five distinct concepts of marketing

• The exchange concept.

• The production concept.

• The product concept.

• Marketing myopia.

• Sales concept.

• The exchange concept.

product exchange buyer-seller.

• The production concept -mass production and least price.

• The product concept.

improved products , new products Focused on the quality, design and quantity of the product

• Marketing myopia.

excessive preoccupation with the product , production or selling , ignoring the customer.

• Sales concept..

as promotional methods are having more importance ,advertising, personal selling, discounts ,sales promotion , public relations etc lies on this.

Selling and marketing

The marketing concept

• The key to achieve the organizational goals consists of the company being more effective than its competitors in creating , delivering and communicating customer value to its chosen target markets.

The marketing concept

Target market

Customerneeds

Integratedmarketing

Profits throughCustomer

satisfaction

Integrated marketing/Societal Marketing Concept

Integrated marketing/Societal Marketing Conceptwhen all the company’s department work together to serve the customer’s interests the result is integrated marketing.e.g. :sales dept, advertising , customer service , product mgmt, marketing research.

Relationship marketing

• building stronger, long-term relationships with customers

• Traditional organization chart

Topmanagement

Middlemanagement

Front-linepeople

customers

• Modern customer –oriented organization chart

customers

Front –line people

Middle management

Top management

MARKETING VS SELLING

MARKETING MANAGEMENTA process of planning and executing the conception, pricing , promotion and distribution of goods and services and ides to create exchanges with target groups that satisfy customer and organizational objectives.

FUNCTIONS OF MARKETING MANAGEMENT

Analysis Planning Implementation Control

MARKETING SERVICES

So ,What is it?

• AMA “ Activities , benefits or satisfactions which are offered for sale or are provided in connection with the sale of goods”

• Zeithmal and Bitner “ services are deeds , processes and performances”

• Something that can be bought and sold, but which cannot be dropped on your foot.

Special Features

?

IMPORTANCE OF MARKETING FOR INDIAN BANKS

"The relevance of aggressive marketing in banks has come to the fore as never before" - M N Goiporia.

CHARACTERISTICS OF SERVICES Intangibility Inseparability Heterogeneity Perishability

Nature and Scope of services

Evolution

• Self servicing • Outsourcing• Business proposition.• Until 20th century focus was on product

marketing –support services • Public sector undertaking /Monopoly • Until 1970 same principles -manufacturing

marketing of services• 1980s deregulation of services

Services sector in the Indian Economy

• Economic activities – 3 category–Primary, Secondary, Tertiary

• Share in GDP (Hidden & Unorganised)

–1950-51 – 57% Agri, services -29%, Industry– 14%–2000-01 – 25% Agri, services – 49%, Industry– 26%–Annual Growth rate of services highest during 9th five year plan(1997-2002) at 7.8% ,agri-2.1, industry – 4.5%–Social and personal services has the highest growth rate of 9.1% followed by, financial , real estate and business services (source : Economic survey, GOI)

Reasons for growth

• Two major reasons – interim dd from firm , Final dd from consumers• Development of IT• Aging population • Working women• Increase in Life expectancy (male 68, female -66)• Change in socio-cultural values• Advances in product technology• Economic affluence (NCEAR- no of middle income household on

raise 550million in 2009-2010 , 53million – 94-95)• Increased leisure time • Government policies• Internationalization • Growth of DINKS• Attitudinal Change in youth

Scope of Services

• Insurance • Tourism• Health care• Transport • Software

• Postal services• Banking• Education• Telecommunication• Electricity

BANK MARKETING Provides services Aimed to satisfy customer’s needs and

wants Needs and wants may be non financial

in nature Competitive element, efficiency and

effectiveness Organizational objectives are still the

driving forceCommercial objective to make

profitSocial Objectives

Essentials for a Banks SuccessCannot exist without customerCreate, win and keep customersOrganizational design should be

oriented to the customerDeliver total satisfaction to the

customer Customer satisfaction is affected by

the performance of all the personnel of the bank.

Are Banks truly Are Banks truly marketing-savvy and marketing-savvy and customer - centric?customer - centric?

Are Banks truly Are Banks truly marketing-savvy and marketing-savvy and customer - centric?customer - centric?

• Myth 1 – The larger the range of products, the more customer-centric

Mythbuster – The range of products has Mythbuster – The range of products has

emerged from beingemerged from being

competition-centric.competition-centric.

• Myth 2 – Better technology (read CRM) leads to• better customer service.

Mythbuster – TechnologyMythbuster – Technology

alone does not deliver, alone does not deliver,

helps people do.helps people do.

• 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 needMythbuster – Customers need

To be educated too…To be educated too…

Mythbuster – Customers Mythbuster – Customers are not only present are not only present where competition is.where competition is.

• Myth 4 – The only way to get a customer is from

• competition.

• Myth 5 – Just advertise and - You will sell.

Mythbuster – Advertising will only sell, Mythbuster – Advertising will only sell,

Not retain customers. Not retain customers.

Myth 6 – No difference between marketing & selling

Mythbuster – Mythbuster – “Selling focuses on the needs of the “Selling focuses on the needs of the seller; marketing on the needs of the buyer. seller; marketing on the needs of the buyer.

Myth 7 – In the absence of relationships ‘trust’ builds financial brands

Mythbuster – TMythbuster – Trust is not a differentiator at all…rust is not a differentiator at all…it is the very minimum that the customer expects!!it is the very minimum that the customer expects!!

So what will the So what will the differentiators be :differentiators be :

So what will the So what will the differentiators be :differentiators be :

• Technology ?

• Brand ?

Marketing Lessons

Product

Price

Place

Promotion

Consumer

Cost

Convenience

Communication

OLD New

Wining companies are those that can meet customer needs economically and conveniently and with effective communication

Services Marketing Mix – 7P’sProduct, Price, Place, Promotion, People, Physical evidence, Process

PRODUCTA product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need

PRODUCT PERSONALITY

THE CORE

THE ASSOCIATED FEATURES

THE BRAND NAME & LOGO

THE PACKAGE AND LABEL

PRODUCT CATEGORY Durability, tangibility and use Product item, Product Line, Product

mix Banking product

PRODUCT LIFE CYCLEIntroduction, Growth, Maturity, DeclineThe product Life cycle operates at three levels product level, product sub category, brand level.

PromotionRole of promotion

PersuasionInformRemindingReinforcing

Promotion mix

AdvertisingPersonal

selling

Sales Promotion

Public Relations

Direct Marketing

Blended Mix of Promotion Tools

Promotion mix strategies• Push strategy -Retailer

• Pull strategy - Customer

Factors influencing promotion mix• Types of product/market• Buyer’s readiness stage• PLC stage

Promotion mix integration