EXECUTIVE SUMMARY:

With the change in business environment from a sellers market to a buyers market, the concept to a buyers market, the concept of marketing also changed in its demand the focus. Originally marketing concept was developed around a physical product but later on as services sector grew in importance and competition intensified marketing concept was also applied to the services. But services are unique in their characteristics. They differed from physical production the ground that are intangible, inseparable from the provider, inconsistent depending upon the skill and efficiency of the provider and they cannot be stored. Traditionally marketing is the marketing mix of 4 Ps, i.e. Product, price, place and promotion. It is a judicious blend of the tools and techniques of marketing to meet the customers needs in an effective manner.

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To gain practical knowledge relating to important to marketing.

Understand operation of marketing in Banks.

New technology adopted by them.

To study how Marketing Strategies affects the business of Banks.

To study how Banks design their marketing mix.

To study how Banks can face competition through effective marketing.

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Research Methodology The data is collected by following ways:

PRIMARY RESEARCH:
For primary research people interviewed was
Mr. DEEPAK SAHIJWANI (senior branch manager, Bank of Baroda)

SECONDARY RESEARCH:
Various websites, books and magazines.

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CHAPTER: 1 Introduction to marketing Satisfaction and expectation move together. We cant deny that during the yester decades, there have been multi-dimensional changes in the business environment which has shown a major impact on our lifestyles. The private or public sector organizations engaged in the

banking business bear the responsibility of identifying the emerging trends and making possible an optimal use of the available potentials so that in addition to the protection of commercial viability they also succeed in developing and expanding the business and making the organizations nationally and internationally competitive. It is in this context that banks of late are found practicing modern marketing principles. The marketing concepts hold that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired and efficiently than competitions. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. Marketing is not solely concerned with the services. The aforesaid facts marketing a customer satisfaction engineering in which our efforts assign due weight age to customer satisfaction. It is in a true sense a human activity and when we talk about marketing management, it is a management function which organizes and Directs all those activities involving assessing and converting customer purchasing power into effective demand for goods and services. ~5~

Marketing is the process by which companies create customer interest in goods or services. It generates the strategy that underlies sales techniques, business communication, and business development. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. Marketing is used to identify the customer, to keep the customer, and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. The adoption of marketing strategies requires business to shift focus from production to the perceived needs and wants of their customers as the means of staying profitable.

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CHAPTER: 2 Marketing Meaning of marketing Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, marketing management is one of the major components of business management. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. According to American Marketing Association, Marketing Research is the function that links the consumer, customer and public to the marketer through information-information used to identify and define marketing opportunities and problems, generate, refine and evaluate marketing

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Actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing is an important social economic activity. It is an essential activity for the satisfaction of wants and for raising social welfare. Marketing links producers together for mutual benefits. It facilities transfers of ownership of goods and services from producers to consumers. Production will be meaningless if goods produced are not supplied to consumers through proper marketing mechanism. Modern marketing is global in character. Customer is the most important person in the whole marketing process. He is the cause and the purpose of all marketing activities. According to professor Drucker the first function of marketing is to create a customer. Marketing is a need satisfying process. it facilitates physical distribution and creates form utility, place utility, time utility, and possession utility.

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CONCEPT OF MARKETING The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition. Today most firms have adopted the marketing concept, but this has not always been the case. In 1776 in The Wealth of Nations, Adam Smith wrote that the needs of producers should be considered only with regard to meeting the needs of consumers. While this philosophy is consistent with the marketing concept, it would not be adopted widely until nearly 200 years later. The Production Concept: The production concept prevailed from the time of the industrial revolution until the early 1920's. The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of lowcost products would in and of itself creates the demand for the products. The key questions that a firm would ask before producing a product were:

Can we produce the product? Can we produce enough of it? At the time, the production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand.

The Sales Concept:

By the early 1930's however, mass production

had become commonplace, competition had increased, and there was ~9~

little unfulfilled demand. Around this time, firms began to practice the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. Before producing a product, the key questions were:

Can we sell the product? Can we charge enough for it? The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word "marketing" when they really mean sales. The Marketing Concept: After World War II, the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs, and these needs were not immediately obvious. The key questions became:

What do customers want? Can we develop it while they still want it? How can we keep our customers satisfied?

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In response to these discerning customers, firms began to adopt the marketing concept, which involves:

Focusing on customer needs before developing the product Aligning all functions of the company to focus on those needs Realizing a profit by successfully satisfying customer needs over the long-term When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. While this expanded sales department structure can be found in some companies today, many firms have structured themselves into marketing organizations having a companywide customer focus. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing problem" - everybody must be concerned with customer satisfaction. The marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix.

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DIFFERENCE BETWEEN SALES AND MARKETING Sales and marketing are closely interlinked and are aimed at increasing revenue. As sales and marketing are closely intertwined, it becomes hard to realize the difference between the two. In small firms, one cannot come across much difference between sales and marketing. But bigger firms have made clear distinction between marketing and sales and they have specialized people handling them independently. Sales and marketing are two terms that often look like words with the same meaning, but they are not so. They might appear similar on account of the fact that sales and marketing aim at increasing revenue and generating profit. Another difference that is seen between marketing and sales is that the former involves both micro and macro analysis focusing on strategic intentions. On the other hand, sales pertain to the challenges and relations with the customer. Factors: Marketing is characterized by several factors such as promotion of the products with the aid of marketing tools, creation of awareness among the members of the public about the use of the product, conduct of research and the like. A sale is not characterized by research or creation of awareness among the members of the public about the use of the product. Aims: Marketing aims at meeting consumer demands, whereas sales focus on the fact whether consumer demands match the products. One ~ 12 ~

of the most important differences between sales and marketing is that sales involves direct interaction whereas marketing is not about direct interaction, but it is all about indirect methods such as advertising, email marketing and viral marketing. Target: Well, how is that sales and marketing are different? In very simple words, sales can be termed as a process which focuses or targets on individuals or small groups. Marketing on the other hand targets a larger group or the general public. Research and development: Marketing includes research development of products (producing innovative products) and promoting the product (through advertisements) and create awareness about the product among the consumers. As such marketing means generating leads or prospects. Once the product is out in the market, it is the task of the sales person to persuade the customer to buy the product. Well, sales mean converting the leads or prospects into purchases and orders. Goals: While marketing is aimed at longer terms, sales pertain to shorter goals. Process: Marketing involves a longer process of building a name for a brand and pursuing the customer to buy it even if they do not need it. Whereas sales only involve a short term process of finding the target consumer. Focus: In concept also, sales and marketing have much difference. Sales only focuses on converting consumer demand match the products. But marketing focuses on meeting the consumer demands. ~ 13 ~

Dependent:

Marketing can be called as a footboard for sales. It

prepares the ground for a sales person to approach a consumer. Marketing as such is not direct and it uses various methods like advertising, brand marketing, public relations, direct mails and viral marketing for creating an awareness of the product. Sales are really interpersonal interactions. Sales involve one-on-one meetings,

networking and calls. Deal: Marketing is everything you do to get the customers makes initial contact and Sales is everything you do to close the deal. Concentration: Sales and marketing are different in their concepts in the sense that while sales would concentrate on smaller groups such as individuals; marketing would concentrate on larger groups such as groups from general public.

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Opinion in difference between marketing and sales If any company adopts marketing strategy, 80% of the work is done. If the customer values your offering; he will himself make the effort to buy your product or service. You will not need any sales effort. Sales indirectly depend upon marketing we can say that they are interlinked. A sale is smaller concept compare to marketing as it is only related to sales of products and goods to a specific target whereas marketing is wider concept which not only is related to production and sales but also to companys goodwill. Marketing is aims at customer satisfaction first then companys profit. Whereas sales aims at only profit of the company.

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CHAPTER:3 Types of marketing External marketing: The external marketing efforts are the traditional functions of marketing of the customers and make promises to the customer as to what to be delivered. Anything conveyed to the customer in any form before the delivery of service can be viewed as a part of external marketing function. The first step towards external marketing is to make the firm understand what makes a customers want a particular type of service and what are their expectations of a certain type of service, since external marketing builds customers expectations and beliefs about service delivery. The external marketing then gives promises that correspond with the personal needs of the target group. It becomes necessary to understand the needs of the customer for the services provider. This leads to market segmentation on a suitable basis i.e. demographic, psychographic and wage pattern. Once the market segment is identified, the next task is to find ways to compete in that segment. This can be achieved by using the right marketing mix after taking into consideration the external factors. According to Zeithaml and Bitner, the customers expectation of the service can be derived from the following sources: 1. Past experience. 2. Corporate image. 3. Word of mouth communication.

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Care should be taken to maintain credibility while setting the promise because a very high expectation may lead to a highly dissatisfied customer. Internal marketing: The concept of internal marketing presumes the bank employees as its internal customers and jobs offered to them as products. So effort should be made to offer a product mix that satisfies the needs and wants of these internal customers. The same marketing tools which are used to attract and retain customers (external) can gainfully be used to attract, retain and inspire the employees (internal customers.), particularly the best among them. The logic behind such type of thinking can be attributed to following facts. Customers buy products and services of the bank exchanging their financial resources. Similarly employees also buy jobs of the bank exchanging the human resource. As both are drawn from the same society the exchange process is found to be similar in many respects. It may be argued that in Indian context, a customer may have a better and wider option to change banks but employees do not have such opportunity. In future, it is expected that the liberalized scenario may provide, the best of the employees, with such opportunity. But one thing for sure is that it remains the discretion of the employee to give his best or not. In a financial industry like banks the product differential and price competition is almost nil or the distinctiveness is difficult to maintain. The only area where distinctiveness can be maintained is the quality of human resource. How far and to what extent the quality level of their performance would reach is solely the discretion of the employee. As a satisfied employee can deliver total satisfaction to a customer, it

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becomes important for banks to satisfy the needs and wants of its employees on priority basis. These activities can be further reinforced by certain promotional activities directed at them. A highly motivated workforce is a common trait of all successful organizations. Though it is difficult to ascertain what precisely motivates employees, a clue can be taken from Abraham Mallows hierarchy of needs. Presuming that the physiological needs of the bank employees have by and large, been taken care of, greater emphasis should be laid on psychological and self-actualizations needs such as: security, contribution to society, esteem and the need to reach one's full potential, etc. It is necessary to create an organizational climate where superior and extra-ordinary contributions made by employees at various levels are noticed and acknowledged. Advertising is a potent tool in making an employee aware, motivated, educated, and inspired. Though a poster at the branch with the headline such as you never hear our people say 'that's not my job or if you are not satisfied tell us, if satisfied tell others are directed towards external customer. Yet, it is clearly meant for the internal customers too and will have tremendous impact on them. Of course, before putting up a poster like that would need taking staff into confidence. It is needless to say that any advertising campaign which can originate from the staff themselves would have more credibility and acceptability. Or else it may be treated derisively and be counter-productive. Senior executives, in this regard, have a definite role to play.

Interactive marketing (moment of truth): Moment of truth means that this is the time and place the service provider has the opportunity to demonstrate to the customer the quality of its services. ~ 18 ~

Quality of service is dependent on the quality of buyer/ seller interaction. This is the point, which may lead to creation of a customer or not. Though, we may win him at that point of time, but may not retain Him and may not come to us again if that interaction is not satisfying for him to leave a lasting impact on him. We may have a beautiful marketing mix of product, price, place and promotion, which bring the customer to us. We may still have a good internal marketing, which prepares a band of knowledgeable employees ready. But if we fail at this point all our effort so far will be futile. This is the reason, which makes interactive marketing so important. Thus interactive marketing describes employees skill in handling customer Contact and involves the following: 1) Employee 2) Process 3) Customer Interactive Marketing As indicated in above it is the group of able and willing employees; they are to be aided by proper processes (systems and procedures) suitable vehicles to render best customer service, which in turn will result in satisfied and loyal customers. Internal marketing provides the required employees orienting them for the job.

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CHAPTER: 4 SERVICE MARKETING

Introduction Services have increasingly assumed an important role in the economic development of many countries, including India. Almost all development countries and many developing countries are emerging as service economics or service societies. An economy is called a service economy when the contribution of the service sector to the GDP of the nation is more than 50 per cent. USA was the first economy to be declared as a service economy way back in 1948 with about 53 per cent contribution of the service sector to the nation. There is an argument that the statistic of the service sectors contribution in many countries is a gross

underestimation of the truth. A service is an activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything. Its production may or may not tied to a physical product. "Thus services are separately identifiable: essentially intangible activities which provide want satisfaction and that are not necessarily tied to the sale of a product or service. To produce a service may not require the use of tangible goods. However, when such use is required there is no transfer of title [permanent ownership] to those tangible goods."

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According to American Marketing Association Services are the activities, benefits or satisfactions which are offered for sale or are provided in connection with the sale of goods. When a customer buys a service in the service market, he buys the time, knowledge, skill or resources of someone else who is the provider or supplier of the service. The buyer receives only satisfaction or benefits from the activities of the provider who may be an individual, a firm or a company specializing in selling certain benefits or satisfaction.

CONCEPT OF SERVICE MARKETING

The concept of marketing discussed previously was initially developed to market a physical product. Now it becomes essential to find out if the same concept developed for marketing of physical products is applicable to the marketing of services. Before we come to this point, it is natural that we have no two meanings regarding services and their characteristics. The service concept takes the customer benefit concept and translates them in order to determine the aim and intension of the organisation. The service concept is based on the idea that the actual services offered could be divided into a number of levels that may relate to the customers need, his satisfaction and benefits. The various levels of products are: Core service benefit level The expected service level The augmented level Potential level ~ 21 ~

Hence, while planning the market offer the service provider should make analysis of the various levels of product.

IMPORTANCE OF SERVICE MARKETING Relationships are Key: In service marketing, because there is no tangible product, relationships are key. Service marketers must understand the importance of listening to and understanding the needs of customers and prospective customers to build loyalty and trust. Ultimately, effective relationships in service marketing will lead to repeat sales and positive word-of-mouth Multiple Touch points: Service marketing involves many touch points for the

consumer. Interactions with multiple people and experiences those are less tangible than when buying an actual product all impacts the consumer perspective of the purchase process. Each of these touch points work together to establish a perception in the consumer's mind Services Proliferate: Consumers have many service options to choose from, and because the product is intangible, the challenge for the service marketer is to somehow make her services stand out from the crowd. Because service marketing is so prolific, marketers must think of ways to communicate the benefits of the service they offer in language that reflects consumer need and value. ~ 22 ~

 Feedback Improves Service:

Unlike the marketing process for a

tangible product, service marketing actually involves the consumer in the marketing process. He is engaged in the process and contributes to a positive outcome. For this reason, it is important to seek consumer feedback and use that feedback to improve service marketing effectiveness. Technology Impacts: Technology is having a major impact on the service economy. You can use technology to streamline service activities and provide do-it-yourself options for consumers. Internetbased services, for instance, allow consumers to participate actively in the service marketing process, often never involving contact with another human being.

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CHAPTER: 5 Bank marketing

Introduction 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 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 customers. In the late 1950s, new concept in the marketing services with respect to banking profession, arose in the west. Deryk-weyer of barcelays bank came out with a comprehensive definition of bank marketing. According to him bank marketing consists of identifying the most profitable markets now and in future, assessing the present and future needs of the customers, setting business development goals, making plan 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. Marketing of banking services is concerned with product, place, distribution, pricing and promotion decisions in the changing, socioeconomic and business and environment. It means organizing right activities and programmes at the right place, at the right time, at the right price with right communication and promotion. Thus, the idea of customer satisfaction arose in the 1950s flourished in the 1960s and became an integral part of banking services in 1970s. In ~ 24 ~

the course of time, the concept of marketing widened further. From the stage of customers satisfaction, the marketing become more concerned with the well-being of Society as a whole and resulted in coining the term Social Marketing. Hartley would call it as Response Marketing attuning with or responding to the changing needs of customers society and environment. Both demand and supply have to be understood in the context of geographic locations and competitor analysis to undertake focused marketing (advertising) efforts. Focusing on region-specific campaigns rather than national media campaigns would be a better strategy for a diverse country like India. Throughout much of the last decade, banks world-over have reengineered their organizations to improve efficiency and move customers to lower cost, automated channels, such as ATMs and online banking but this need not be the case. As it is proved by the experience, banks are now realizing that one of their best assets for building profitable customer relationships especially in a developing country like India is the branch-branches are in fact a key channel for customer retention and profit growth in rural and semiurban set up. However, to maximize the value of this resource, our banks need to transform their branches from transaction processing centers into customer-centric service centers. This transformation would help them achieve bottom line business benefits by retaining the most profitable customers. Branches could also be used to inform and educate customers about other, more efficient channels, to advise on and sell new financial instruments like consumer loans, insurance products, mutual fund products, etc.

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CONCEPT OF BANK MARKETING

Marketing as it is viewed today is a way of managing a business so that each strategy is evolved with foreknowledge of the impact of such decision on the customer. Banks have broadly three dimensions, i.e., deposits, borrowings and other allied services. Anyone who interacts on any of these fronts is qualified to be a customer of a bank. Thus, a bank renders financial services as an intermediary. Marketing is customer satisfaction it will not be inappropriate here to observe that customer of a bank is king. Therefore bank marketing implies that it is the creation and delivery of financial services suitable to meet the customer's needs at a profit to the bank. The concept of bank marketing

encompasses: Identifying the most profitable

markets now and in future; Assessing the present and future needs of customers; Setting business development goals and making plans to meet them; Managing the various services and promoting them to achieve the plans; Adapting to a changing environment in the market place. From the above discussion of the bank marketing it can be understood that the existence of the bank has little value without the existence of the customer. The key task of the bank is therefore not only to create and win more and more customer but also to retain them through effective ~ 26 ~

customer service. Marketing as related to banking is to define an appropriate promise to a customer through a range of services (products) and also to ensure effective delivery through satisfaction. The actual satisfaction delivered to be a customer depends upon how the customer is interacted with. It goes on to emphasis that every employee from the topmost executive to junior most employee of the bank is marketer.

Application of Marketing Concept in BANKS When we apply marketing to the banking industry, the bank marketing strategy can be said to include the following :1. A very clear definition of target customers. 2. The development of a marketing mix to satisfy customers at a profit for the banks. 3. Planning for each of the source markets and each of the use markets ( A Bank needs to be doubly market oriented it has to attract funds as well as were of funds and services.) 4. Organization and Administration. The Role of marketing in the banking industry continues to change. For many years the primary focus of bank marketing was public relations. Then the focus shifted to advertising and sales promotion. That was followed by focus on the development of a sales culture.

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Need for bank marketing: Marketing concept is essentially about the following few thing which contribute towards banks success: 1) The bank cannot exist without the customers. 2) The purpose of the bank is to create, win, and keep a customer. 3) The customer is and should be the central focus of everything the banks does. 4) It is also a way of organizing the bank. The starting point of organizational design should be the customer and the bank should ensure that the services are performed and delivered in the most effective way. Service facilities also should be designed for customers convenience. 5) Ultimate aim of a bank is to deliver total satisfaction to the customer. 6) Customer satisfaction is affected by the performance of all the personal of the bank.

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CHAPTER: 6 EVOLUTION OF BANK MARKETING During the 70s, many banks did not use the marketing in their activity, their management being market oriented. Once the competition intensified, some of the banks have started to use the marketing, launching some extremely expensive advertising campaigns. The banks were counting on the fact that they could fool the customers by various promotional activities, by which they could hide the negative aspects related to their own banking services. The first failures of the advertising campaigns proved to the banks that on the one hand these campaigns could ruin them, and on the other hand that the main problem did not consist in attracting new customers, but in

keeping them. During this period, the advertisement was the most important marketing activity performed by the banks. During the 80s, the banks developed programs to support the business; they promoted the bank marketing on a large scale, engaging all its constituent aspects: establishing and organizing the offer of

products/services to satisfy the existing needs; promoting and orientating the products/services towards responding to the considered requirements of the business. It is a time when the banks no longer accentuate the trade, the short term sale of banking products, their volume increase; instead they focus on the perennial value of the customer, pursuing the winning of new customers.

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During the 90s, the banks focused their efforts in order to create some superior banking products/services, on the one hand following the assurance of the customer needs satisfaction, and on the other hand establishing lasting relationships with them. During this period, the financial sector and implicitly the banking sector experiences a significant growth in the developed countries. During the 21st century, the banks act in a dynamic environment, where the market and the other factors (components of the political, economical, social, juridical, cultural, demographical and technological environment) frequently raise problems, forcing them to additional efforts or offering them opportunities that need to be fructified as well as possible; they need to integrate their current actions to their long term objectives which were previously determined by the bank marketing policy. Adapting the banking institutions activity to the environment requires a continuous tracking of the structural quantity and quality changes which the environment registers.

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CHAPTER:7 EMERGENCE OF BANK MARKETING IN INDIA During the 1960s in India, banks were even more conservative and inward looking, concerned with their profits as a matter of fact, competition was not in existence. On one side of the fence were state bank of India and its associate banks, enjoying government patronage and on the other side were private commercial banks, local by orientation, primarily serving the interests of the controlling business house. State banks and other banks had limited range of services which included current accounts, term deposits accounts and saving bank accounts in deposit area. In the area of advances limits, were sanctioned on the basis of security by way of lock and key accounts and bills purchased services collection limits; included cheques, their miscellaneous of drafts, standing

issuance executing

instructions and lockers facility at a few centers. It was the phase of select banking. Even the advertisements released till 1966 were very few and far between. Up to the pre nationalization era up to 1969 customers were presented with predetermined option of banking products. However after nationalization of 14 major commercial banks in 1969, banks woke up from their splendid isolation and found themselves placed in a highly competitive and rapidly changing environment, with competition becoming fierce day by day. Banks approach towards customers and market underwent a change and focus was gradually shifted to marketing their products. Banks were product-oriented ~ 31 ~

organizations, placing before the prospective customer, their range of services, expecting him to choose, presuming that the customer had the knowledge, time, interest and skills to select the services that would suits him. At the same time banks also become conscious of their corporate image and its projection and this introduced the public relations philosophy in banks with the purpose of image projection.

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CHAPTER: 8 MARKET SEGMENTATION Introduction Since the very beginning of marketing, the market segmentation has been practiced to get the productive results. The markets rather than homogeneous are really heterogeneous. The modern marketing theory, the behavioral scientists and many others feel that appeal, strategy and tact vary from segment. Segmentation makes possible tailoring of products and marketing programmes uniquely suitable for a product but the sum of the demands of different market segments. For getting a positive response in a market, it is pertinent that marketers are aware of the different components of segmentation. Market segmentation is the process of dividing the total market for a good or service into several smaller, internally homogeneous groups. Members of each group are similar with respect to the factors that influence demand. Therefore, to stay focused rather than scattering their marketing resources, more marketers are using market segmentation. In this approach, which falls midway between mass marketing and individual marketing, each segments buyers are assumed to be quite similar in wants and needs, yet no two buyers are really alike. To use this technique, a company must understand both the levels and the patterns of market segmentation.

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Concept of market segmentation

In view of the aforesaid views of different marketing experts, it is observed that market segmentation is the grouping or division or subdividend of market. With a more pragmatic approach, we can say that it is a game of divide and rule. by segmenting market, we identify them, we divide them. If we divide them, we rule them. If we rule, our game of touching the target and getting a victory in the market is secured. We find segmentation a device to help markets in formulating a sound marketing mix which gets a positive response. Almost all the organization have been found segmenting the market and even the banking organizations also attempt to segment, especially with the motto of identifying the level of expectation of each segment so that the strategic decisions are found marketing efforts proactive. In each segment we find enough potentials and the banking organizations segmenting the market in a right way succeed in tapping the potentials. Not only present marketing in a right way succeed in tapping the potentials. Not only present marketing but even the future marketing is also to get a positive response if the processes adopted for segmentation are scientific. It is against this back ground that we find banking organization segmenting the market. It is right to mention that the banking business environment is, of late, more volatile which has made it essential that the public sector commercial banks also realize gravity of the situation and formulate segment-wise strategy so that whatever the marketing decisions are made by the bank professionals get a positive response.

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Importance of market segmentation The rationale behind marketing segmentation is to allow businesses to focus on their consumers behaviors and purchasing patterns. If done effectively, marketing segmentation allows an

organization to achieve its highest return on investment (ROI) in turn for its marketing and sales expenses. If an organization markets its products or services to a consumer or business, it should focus on the various types of segmentation. Kotler (2010) describes segmentation as the classification of consumers within a market that share related needs and establish related purchasing behavioral habits. There are several importance of marketing segmentation, which are not only beneficial to customers but also to the company to make their image. Matching of customer needs: Customer needs differ. Creating separate offers for each segment makes sense and provides customers with a better solution. Enhanced profits for business: Customers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits. Better opportunities for growth: Market segmentation can build sales. For example, customers can be encouraged to "trade-up" after being introduced to a particular product with an introductory, lower-priced product.

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 Retain more customers: Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life ("life-cycle"), a business can retain customers who might otherwise switch to competing products and brands Target marketing communications: Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that (1) the key customers are missed and (2) the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost Gain share of the market segment: Unless a business has a strong or leading share of a market, it is unlikely to be maximizing its profitability. Minor brands suffer from lack of scale economies in production and marketing, pressures from distributors and limited space on the shelves. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors. In other words, segmentation offers the opportunity for smaller firms to compete with bigger ones.

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CHAPTER: 9 STRATEGIES FOR EFFECTIVE MARKETING Introduction Marketing strategy consists of the analysis, strategy development, and implementation activities in Developing a vision about the market of interest to the organization, selecting market target strategies, setting objectives, and developing, implementing, and managing the marketing program positioning strategies designed to meet the value requirements of the customers in each market target. Strategic marketing is a market-driven process of strategy development, taking into account a constantly changing

business environment and the need to deliver superior customer value. The focus of strategic marketing is on organizational performance rather than a primary concern about increasing sales. Marketing strategy seeks to deliver superior customer value by combining the customer-influencing strategies of the business into a coordinated set of market-driven actions. Strategic marketing links the organization with the environment and views marketing as a responsibility of the entire business rather than a specialized function. Because of marketings boundary orientation between the organization and its customers, channel members, and competition, marketing processes are central to the business strategy planning process. ~ 37 ~

Strategic marketing provides the expertise for environmental monitoring, for deciding what customer groups to serve, for guiding product specifications, and for choosing which competitors to position against. Successfully integrating cross-functional strategies is critical to providing superior customer value. Customer value requirements must be transformed into product design and production guidelines. Success in achieving high-quality goods and services require finding out which attributes of goods and service quality drive customer value. Marketing Strategy Process: The marketing strategy analysis, planning, implementation and

management process is described in Exhibit. The strategic situation analysis considers market and competitor analysis, market

segmentation, and continuous learning about markets.

Designing

marketing strategy examines customer targeting and positioning strategies, marketing relationship strategies and planning for new products. Marketing program development consists of product,

distribution, price, and promotion strategies designed and implemented to meet the value of targeted buyers.

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CHAPTER: 10 MARKETING MIX FOR BANKING COMPANIES PRODUCT MIX:The banks primarily deal in services and therefore, the formulation of product mix is required to be in the face of changing business environment conditions. Of course the public sector commercial banks have launched a number of policies and programs for the development of backward regions and welfare of the weaker sections of the society but at the same time it is also right to mention that their developmentoriented welfare programs are not optimal to the national socioeconomic requirements.

A proportional contraction in the number of customers is found affecting the business of public sector commercial banks. The changing psychology, the

increasing expectation, the rising income, the changing lifestyles, the increasing domination of Foreign Banks and the changing needs and requirements of the customers at large make it essential that they innovate their service mix and make them of worked class. The development of new generic product, especially when the business environment is regulated is found a difficult task. However, it is pertinent that banks formulate a package in tune with the changing business conditions. Against this background, we find it significant that the banking organizations minify, magnify, combine and modify their service mix. ~ 39 ~

In the formulation of service mix, the banks can follow two guidelines, first is related to the processing of product to market needs and the second is concerned with the processing of market needs to product. In the first process, the needs to the target market are anticipated and visualized and therefore, we expect the prices likely to be productive. In the second process, the banks react to the expressed needs and therefore we consider it reactive. It is essential that every product is measured up to the accepted technical standards. This is because no consumer would buy a product, which contains technical faults. Technical perfection in service is meant prompt delivery, quick disposal, and presentation of right data, right filing, proper documentation or so. If computers start disobeying, the command and the customers get wrong facts, the use of technology would be a minus point, and you dont have any excuse for your faults. Marketing aims not only offering but also at creating\innovating the services\schemes found new to the competitors Vis -a Vis to the customers. The enhanced customer patronage would be a reward to the bank. The additional attractions, the product attractiveness would be a plus point of your mix, which would help you in many ways. This makes it essential that the banking organizations are sincere to the innovations process and try to enrich their peripheral services much earlier than the competitors. We also find the product portfolio of the banks. While formulating the services mix, it is also pertinent that the bank professionals make possible affair synchronization of core and peripheral services.To be more specific, the peripheral services need an intensive care since the core services are found by and large the same. Innovating the peripheral services thus appears to be an important functional responsibility of marketing professionals. We cant deny the fact that if the foreign banks have been getting a positive response; the ~ 40 ~

credibility goes to their innovative peripheral services. Thus, the formulation of product mix is found to be a difficult task that requires world-class professionalism. PROMOTION :Promotion mix includes advertising, publicity, and sales promotion, word of mouth promotion, personal selling and telemarketing. Each of these services needs to be applied in different degree. These components can be useful in the banking business in the following ways: ADVERTISING :Advertising is paid form of communication. Banking organizations use this component of the promotion mix with motto of informing, sensing and persuading the customers. While advertising it is essential to be aware of key decision making areas so that instrumentally helps bank set micro and macro levels. FINALIZING THE BUDGET :This is related to the formulation of the budget for advertisement. The bank professionals, senior executives and even the policy planners are found to be involved in the process. The business of

a bank determines the scale of the advertisement budget. In addition, the intensity of competition also plays a decisive role since in the majority of cases; we find a increase in the budget due to a change in the competitors strategy. SELECTING A SUITABLE VECHILE :There are a number of devices to advertise, such as broad cast media, telecast media and print media. In the face of the budgetary provisions, it is necessary to select a suitable vehicle. For promoting the ~ 41 ~

banking business, the print media is found to be economic as well as effective. MAKING POSSIBLE CREATIVE :The advertising professionals bear the responsibility of making the appeals, slogans and messages more creative. Here, creative means making the advertisement programs distinct to the competitive organizations, which are active in influencing the impulse of the customers and successful in informing and sensing the customers. This requires an in-depth knowledge of the receiving capacity of the target market for which the advertisements are designed. TESTING THE EFFETIVENESS :It bears an analogous significance that our advertisements are effective in influencing the impulse of customers by energizing persuasion. For making the process effective, it is essential to test the effectiveness before launching of the commercial advertisements. INSTRUMENTALITY OF BRANCH MANAGER:At micro level, a branch manager bears the responsibility of advertising locally so that the messages reach the target audience. PUBLIC RELATIONS:In the banking services the effectiveness of public Relations is found in high magnitude. It is in this context that difference is found in designing of the mix for promoting the banking services. TELEMARKETING:~ 42 ~

The telemarketing is a process of promoting the business with the help of sophisticated communication network. Telemarketing is found instrumental in advertising the banking services and the banking organizations can use this tool of the promotion mix both for advertising and selling. This minimizes the dependence of banking organizations on sales people and just a counter or center as listed in the call numbers may service multi- dimensional services. Telemarketing is likely to play an incremental role in marketing the banking services. The leading foreign banks and even some of the private sector commercial banks have been found promoting

telemarketing and they have been getting positive results for their efforts. WORD OF MOUTH:Much communication about the banking services actually takes place by word- of- mouth information, which is also known as word- ofmouth promotion. The oral publicity plays an important role in eliminating the negative comments and improving the services. This also helps the banker to know the feedback, which may simplify the task of improving the quality of services. This component of promotion mix is not to influence budget adversely or generate additional financial burden. By improving the quality of services and by offering small gifts to the wordof- mouth promoters, bankers can get more business command in their area. The above facts make it clear that such kind of promotion is influenced by a number of factors. The most dominating factor is the quality of services offered. The bank professionals, the frontline staff and the senior executives should realize that degeneration in quality would make this tool effective.

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 PRICE MIX: In the formulation of marketing mix, the pricing decisions occupy a place of outstanding significance. The pricing decisions include the decisions related to interest and fee or commission charged by banks. Pricing decisions are found instrumental in motivating or influencing the target market. The RBI regulates the rate of interest and the Indian Banks Association controls other charges. In our country, the price mix is more important because the banking organizations are also supposed to sub serve the interests of the weaker sections and the backward regions. Also in making the pricing decisions, the Government of India instrumentalists or commands everything as a shadow policy maker. This also complicates the price mix for banking sector.

Pricing policy of a bank is considered important for raising the number of customers vis--vis the accretion of deposits. Also the quality of service provided has direct relationship with the fees charged. Thus while deciding the price mix customer services rank the top position. Banks also have to take the value satisfaction variable in to consideration. The value and satisfaction cannot be quantified in terms of money since it differs from person to person. The banking organizations are required to frame two- fold strategies. First, the strategy is concerned with interest and fee charged and the second strategy is related to the interest paid. Since both the strategies throw a vice- versa impact, it is important that banks attempt to establish a correlation between two. It is essential that both the buyers as well as the sellers have feeling of winning.

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 PEOPLE :Sophisticated technologies no doubt, inject life and strength to our efficiency but the instrumentality of sophisticated technologies start turning sour id the human resources are not managed in a right fashion. We cant deny the fact that if foreign banks are performing fantastically; it is not only due to the sophisticated information technologies they use but the result of a fair synchronization of new information technologies and a team of personally committed employees. The moment they witness lack of productive human resources even the new generation of information technologies would hardly produce the desired results. In addition to the professional excellence, the employees working in the foreign banks are generally value- based. Thus we accept the fact that generation of efficiency is substantially influenced by the quality of human resources. The quality for banking sector is an aggregation of all the properties, which are found essential for generating the efficiency and projecting a fair image. Even efficiency essentially is supported by ethical dimension, humanity and humanism. The development of human resources makes the ways for the formation of human capital. Human resources can be developed through education, training and by psychological tests. Even incentives can inject efficiency and can motivate people for productive and qualitative work.

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 THE PROCESS

ACTIVITIES:All the major activities of banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations. The activities have been segregated into various departments accordingly. STANDARDZTION:Banks have got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction. CUSTOMIZATION:There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives. NUMBER OF STORES:Numbers of steps are usually specified and a specific pattern is followed to minimize time taken.

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 SIMPLICITY:In banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to deposits counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further. CUSTOMER INVOLVEMENT:ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature require. THE PHYSICAL EVIDENCE:The physical evidences include signage, reports, punch lines, other tangibles, employees dress code etc. The companys financial reports are issued to the customers to emphasis or credibility. Even some of the banks follow a dress code for their internal customers. This helps the customers to feel the ease and comfort. SIGNAGE:Each and every bank has its logo by which a person can identify the company. Thus such sign ages are significant for creating visualization and corporate identity. TANGIBLES:Banks give pens, writing pads to the internal customers. Even the ~ 47 ~

passbooks, Cheque books, etc reduce the inherent intangibility of services. PUNCHLINES:Punch lines or the corporate statement depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers. Banking marketing consists of identifying the most profitable markets now and in future, assessing the present and future needs of customers, setting business development goals, making plans-all in the context of changing environment.

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CHAPTER: 11 FUTURE OF BANK MARKETING IN INDIA Future marketing makes it essential that the banking organizations forecast the scenario to influence their business the strategic decisions cant remain static. The scientific invention and innovation keep on moving which influence the process of change. The increasing influence of sophisticated information technologies on the banking business the world over makes it pertinent that the banking organizations working in a Indian economy assign and overriding priority to multi-dimensional international environment it need to keep their eye open and formulate such a strategy that helps them in establishing leadership in market. It is strategic marketing which in which they simplify their task. It is in this context that we go through future marketing of banking services. The policy planner needs a recipe that helps them in formulating a sound strategy for tomorrow. Strategy guru Michael Porter feels that a clear location core, with a mix of specific activities in other regions would be more productive in the long run. The banking organization need to perceive the importance of strategy formulation and too make possible on attitudinal change to make ways for understanding the expectations.

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CHAPTER: 12 FIELD STUTDY OF BANK BANK OF BARODA QUESTIONNAIRE

Q1. WHICH MODE OF MARKETING DOES YOUR BANK USE FOR MARKETING? ANS. We paste pamphlets in the branch, in premises; electronic mode is used like mobile by informing various products through messages, newspaper.

Q2. ACCORDING TO YOU AT WHAT EXTENT MARKETING SHOULD BE USED? ANS. Marketing should be used to a greater extend but it should not frustrate customers or provide any inconvenience to them.

Q3. IS YOUR HAVING SEPERATE DEPARTMENT FOR MARKETING THE PRODUCT? ANS. Special departments are at higher levels, at branch level only certain persons are appointed.

Q4. WHAT IS THE STRATEGY ADOPTED BY BANK FOR MARKETING? ANS. The only strategy adopted is to first satisfy customer need and then think of banks profit.

Q5. BRIEFLY EXPLAIN MARKETING MIX? ~ 50 ~

ANS. There are not steps to be followed like product, price, place but only the satisfaction of customers which indirectly results to banks profit.

Q6. DOES YOUR BANK PREFER DIRECT MARKETING OR ONLINE MARKETIG WITH CUSTOMERS? ANS. Online marketing doesnt help we require personal touch with our customers so that we can convince them.

Q7. DO YOU THINK YOUR MARKETING DEPARTMENT HAS TO BE IMPROVED OR IT IS GOOD AT IT? ANS. Things are being changing from time to time we cannot remain constant; we have to try always more betterment for customers.

Q8. IS THEIR ANY SPECIAL TRAINING FOR EMPLOYEES FOR MARKETING? ANS. Yes.

Q9.HOW OFFEN IS TRAINING PROVIDED? ANS. To new employees it is provided between 2-3 months, once they are engaged in the work it may be 5-6 months.

Q10. HOW DO YOU MEASURE THEIR PERFORMANCE IN MARKETING? ANS. Target is being given to employees, how they complete, in what period of time according to that basis their performance is measured.

Q11.HOW MARKETING STRATEGIES ARE BENEFICIAL FOR BANK? ANS. It helps to retain customer for long period of time which is beneficial for bank. ~ 51 ~

Q12. PLEASE PROVIDE INFORMATION ON THE SHARE OF YOUR BANK IN LAST 5 YEARS? ANS. In last 5 years our bank has shown the upwards trend in the market. Whether it would be in savings, loans, etc.

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CHAPTER 13 Conclusion

Banking sector has gone undergone changes after the new economies policy based on privatization, globalization and new liberalization adopted by Government of India. Introduction of asset classification and prudential accounting norms, deregulation of interest rate and opening up of the financial sector made Indian Banking sector competitive. Encouragement to foreign banks and private sector banks increased competition for all operators in banking sector. However banks under the new environment, needs to decide effective marketing of their products.

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Bibliography The data is collected by following ways:

PRIMARY RESEARCH:
Interview of BANK OF BARODA, Bank
Personnel.

SECONDARY RESEARCH:
Reference from Books on
Bank Marketing. Shyam Ji Mehrotra. Marketing and Business Strategy. Vijayant Kumar Verma. Universal Banking in India: Some issues and Challenges. Dr. Janak Raj. Services Marketing and Management. Audrey Gilmore. Response Books

Various websites.
www.onlinebob.com www.axisbank.com www.navjeevanbank.com www.hindustanstudies.com www.thetimes100.co.uk www.marketsegmentation.com

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