The customers are more concerned about their monetary and financial issues than earlier. Therefore, the need for developing ND implementing efficient bank marketing is essential. The bank marketing is also called marketing for services or for immaterial goods. Compared to other services, the banking products are distinguished by the fact that they are complex and abstract. Most of the customers do not easily understand what the financial services consist In, what benefit they bring and how they can be distinguished from one another.
So proper marketing strategies should be undertaken by the banks to make aware and Informed the customers about the benefits and products offered by banks. Papal R. K. (2010) defined bank marketing as “the aggregate function directed at providing service to satisfy customers financial needs and wants, more effectively than the competition keeping in view the organizational objective”. Marketing helps in achieving the organizational objectives of the bank. There is no difference between product and service offerings by the banks.
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The bank products are deposit, borrowing or other product like credit card or foreign exchange transaction which are tangible and measurable whereas service can be such products plus the way/ manner in which they are offered that can be expressed but cannot be measured I. E. Intangibles. Better service Is more important than Just a good product in the marketing of banking service, so the focus should be on the want and need of satisfying that product or service-Marketing concept Is essentially about the following few thing which contribute towards banks’ success: 1) The bank cannot exist without the customers. ) 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 for 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 off bank is to deliver total satisfaction to the customer. 6) Customer satisfaction is affected by the performance of all the personal of the bank. . 2 Banking Industry of Bangladesh supervision of Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank Company Act, 1991 (Bangladesh-bank. Erg, 2013). Scheduled Banks are classified into following types: ; State Owned Commercial Banks (Cobs): There are 4 Cobs which are fully or major owned by the Government of Bangladesh. ; Specialized Banks (Sods): 4 specialized banks are now operating which were established for specific objectives like agricultural or industrial development.
These banks are also fully or major owned by the Government of Bangladesh. ; Private Commercial Banks (Pubs): There are 30 private commercial banks which are major owned by the private entities. Pubs can be categorized into two groups: ; Conventional Pubs: 28 conventional Pubs are now operating in the industry. They perform the banking functions in conventional fashion I. E. Interest based operations. ; Islam Shari based Pubs: There are 7 Islam Shari based Pubs in Bangladesh and they execute banking activities according to Islam Shari based principles I. . Profit-Loss Sharing (PLUS) mode. ;Foreign Commercial Banks (Fibs): 9 Fibs are operating in Bangladesh as the branches of the banks which are incorporated in abroad. There are now 4 non-scheduled banks in Bangladesh which are: ; Nanas PDP Nanny Bank, Shortchanging Bank, ; Probates Kowloon Bank, Jubilee Bank 2. 3 Private commercial banks of Bangladesh After liberation, the banks operating in Bangladesh (except those incorporated abroad) were nationalized. These banks were merged and grouped into six commercial banks.
Of the total six commercial banks, Bubal Bank Ltd. And Attar Bank Ltd. Were subsequently transferred to the private sector with effect from January 1983. Seven banks obtained licenses to run their operation as Private Commercial Banks during sass, eighteen banks during sass and three more banks in 2001. These thirty banks are now operating as Private Commercial Banks (Pubs) in Bangladesh. The Oriental Bank Ltd. – An Islamic private bank founded in 1987 was renamed as CB Islamic Bank Ltd. In 2008. Arab Bangladesh Bank Ltd. Mounded in 1982, was renamed as ABA Bank Ltd in 2008 and Social Investment Bank Ltd. Founded in 1982 was renamed as Social Islam Bank Ltd. In 2009. At present, there are 30 private commercial banks operating in Bangladesh and they have largest amount of total assets and deposits. Private commercial banks are dominating in Bangladesh by their scale, performance of operation. As a result, they capture highest amount of market capitalization in stock market and they capture highest percentage of net income among the bank types operating in Bangladesh (Annual Report, Bangladesh Bank, 2012).
A comparative picture on Pubs, Dips, CBS and Fibs are given below: Bank types 2012 None) No of banks No of branches Total assets (Bal TX) Deposits (Bal TX) Net Nit. Income (Bin TX) SCABS 3449 1771. 75 1305. 02 9. 7 4 1417 368. 84 243. 39 3. 8 PUBS 303130 3965. 93 3092. 86 57. 9 FIBS 9 63414. 63 295. 93 10. 4 Table 1: Banking system structure 3. 0 Marketing and Pubs of Bangladesh 3. Marketing Practices of Selected Pubs in Bangladesh The banking industry of Bangladesh is dominated by private commercial banks.
The Pubs are now feeling the greater importance of marketing because of increased competition, technological innovation and government regulations. They are trying to create a vision of marketing with a large number of promising issues like: Customer Relationship Management, Branding, Electronic Banking, Tell-banking, product differentiation attributes, etc. Thus the changing environment is creating a changing demand for marketing strategies and by developing an effective marketing strategy ankhs can retain market shares and profitability as well as competitive advantages.
Finally, it can be concluded that although financial product marketing of Pubs in Bangladesh is in an early stage, it has a good potential for development, as banks are now aware of its importance (Said S. L. , 2008). The marketing strategies of eight private commercial banks operating in Bangladesh are following: 3. 2 Segmentation Strategies Segmentation is one of the important aspects in marketing strategy. Private commercial banks in Bangladesh segment their target market by two ways.
For reporter customer the segmentation is done keeping the focus on financial strength and credit worthiness, market positioning, reputation, industries and listed companies. For personal sector consumer the segmentation bases are occupation, income, market demand, geographic concentration etc. 3. 3 Product Differentiation Innovation of new products is a rare case for the local Pubs in Bangladesh rather they modify their offerings from that of their competitors. They do this by analyzing the reports, brochure or with client interview, Central Banks information & regulations, lending rate, deposit rate etc.
The main criterion for differentiation is made by the pricing policy through lowering the lending rate from their competitors. Other criteria for differentiation are: maturity of products, market demand, and geographic concentration. Following table shows the major common criteria for differentiation of financial products in Private Commercial Banks: Rank Differentiation Criteria 1 Pricing policy/lintiest Rate 2 Maturity of products 4 Geographic concentration Table 2: Product differentiation strategies 3. 4 Promotional Tools and Strategies Banks use advertising media in a greater extent, personal selling in a limited extent.
Public relations for promotional purpose are used in medium extent. Analysis on promotional tools used by banks shows that advertising are widely used method of promotion than personal selling. The following table shows the ranking on three mediums of promotion: Remonstration Tools Used by Banks 1 Advertising 2 Personal Selling 3 Public Relations Table 3: Promotional tools used by banks Advertising Media: All banks use newspapers as the promotional campaign and it is used to communicate about the new offer or any new news about the existing product and service of the banks.
TV commercials are now widely used communicating vehicle by the banks as the survey showed. Out- door advertising media like bill-board, brochures etc are being used by the banks in medium extent. Following table shows the rate of using three advertising media: Percentage Use of Advertising Media 100% Newspaper 88% Outdoor Advertising 50% TV commercials Table 4: Advertising media used by banks Personal Selling: Personal selling in the Pubs is not used in an extensive or structured form.
The role of personal selling is taken by the relationship managers but mainly by the officers in branches. Only 25% of the banks use the personal selling strategy to market their products. Visiting corporate clients negotiating with them for the rate, presentation, attending client for both corporate and personal banking etc are some Job done by personal selling. Public Relation: The trend of using public relations in marketing is growing over time. 3 % of sampled banks use public relations activities to promote the banks image as well as their products. 4. 0 Marketing Strategies of Pubs in Bangladesh 4. 1 Marketing Strategies of Selected Private Commercial Banks in Bangladesh The duty consists of analyzing the marketing practices conducted by four private commercial banks in Bangladesh. Among the four banks, three banks are second generation banks (Eastern bank limited, EXAM bank limited and The Prime bank limited) and one bank Unman bank limited) is third generation bank (Powder B. 2012). Marketing practices of four banks specially their segmentation, targeting, marketing mix and SOOT analysis are analyzed to get a broader picture of their marketing strategies. 4. 2 Marketing Practices of Eastern bank limited With a vision to become the bank of choice and to be the most valuable financial ears ABLE has established itself as a leading private commercial bank in the country with undisputed leadership in corporate banking and SEEM sector. . 2. 1 Marketing mix of ABLE Products ABLE has a wide range of products targeting for SEEM sector, corporate sector and individual consumer sector. Some of the well-known products of ABLE are below: ; Corporate Banking Products & Services Regular Credit Products Trade Service Products Syndicated Financing Services Cash Management Solutions Consumer Loan Products Consumer Deposit Products SEEM Products ABLE card ABLE Matriarchs – NOR Banking ABLE Internet Banking
Price Product name Loan amount Interest rate ABLE Jobsharer Loan 500,000 to ABLE Auto Loan 350,000 to competitive ABLE Travel Loan 50,000 to 500,000 competitive ABLE Horned Loan 500,000 to ABLE Campus Account Initial deposit is TX 1000 8% ABLE personal 200,000 to Attractive ABLE Tussah Loan 50,000 to 150,000 Discount on interest rate Table 5: Product and prices of ABLE Place The customers are served through a network of 59 branches, 116 Tams and 21 Kiosks countrywide. ABLE has its presence in 11 major cities, towns in the country including Dacha, Chitchatting, Sylphs, Chula, Rajahs, Arrange and Cox’s Bazaar.
ABLE has Visa Electron, so one can now draw cash from the Q-cash ATM network, 24 hours a day throughout the year. Promotion ABLE conducts its marketing promotion in various ways- Advertising (Print media, electronic media, outdoor advertising and online presence), sponsorship, billboards Mainly ABLE segments the market by geographic and demographic factors. The reason is that the product line ABLE offers are for different segments of customers and different regions. Bleb’s main target is to extend banking service in important cities throughout Bangladesh and offers online banking facilities therein.
The target audiences of ABLE are mass market, students, executives and corporate clients. 4. 2. 3 SOOT analysts of ABLE Strengths Opener Manual: the HRS Manual is open for all the employee of ABLE which gives them overall understanding of the terms and conditions of the organization. This HRS Manual is uploaded in the internal website of ABLE. Strong Bonding and Belongingness: The employees of ABLE have a strong sense of commitment towards organization and also feel proud and a sense of belongingness toward ABLE. Duty Doctor: Recently ABLE has appointed a duty doctor to ensure the good fitness for all the employees.
Centralized Banking: Centralized banking means the core functions of business coordinated by the head office give an immense effect for reducing the internal conflicts among the branches and Head Office Weaknesses Job Description: Job description in ABLE has not been yet organized. HRS Accounting: HRS Accounting has not yet been established by ABLE which is a strong tool for matching the benefits of each new recruitment, calculating turnover, etc. Compensation and Benefits: Compensation and Benefits is provided by ABLE through two different software named EZRA and Flexible which are rigid to use and have some limitations.
Opportunities MIS: HARD of ABLE has established new MIS and using it in various manpower reporting. HRS: Human Resources Information System is going to broaden very soon by ABLE. Salary Survey: ABLE is going to conduct a salary survey in the year 2009. Learning & Development: ABLE is going to utilize its fullest capacity of learning and development program by establishing a library, arranging extensive training module very soon. Threats Competitive Salary: The salary package of ABLE is not as competitive as the market demands, Frequent Employee Turnover: so the turnover rate of ABLE is increasing day by day. 3 Marketing Practices of EXAM Bank Limited EXAM bank Ltd is very old institution that is contributing toward the development of any economy and is treated as an important service industry in modern world. Now a day the function of bank is not limited to within the same geographical limit of any country. 4. 3. 1 Marketing Mix of EXAM Bank Limited Marketing policies is a series of activities leading to the setting of strategic planning objectives for an enterprise, and the formulation of strategic policies for achieving them. In essence it is a process for determining what a business should become and owe it can optimally achieve that goal.
Marketing mix includes four major strategies. This are- Product Strategy Communications Strategy (Promotion) Place Strategy Product Strategy: The service is an integral part of product in banking and is at times an indivisible part of any banking product. Similarly whether we talk of brand or selling a product, the institution (bank) is always the deciding factor in product design and delivery as the customers do not look at any product in isolation but look at it as the particular banks product. Deposit Product of EXAM Bank: AY-Wadded Saving Account Muhammad Saving Account
Muhammad Short Term Deposit Muhammad Term Deposit ( for one month, three month, six month, one, two or three year) ; Muhammad Monthly Income Scheme Muhammad Monthly Savings Scheme Muhammad Super Savings Scheme Muhammad Multi plus Savings Scheme Muhammad Hajji Scheme Muhammad Education Saving Scheme. Muhammad Was Cash Deposit Muhammad Special Savings (Pension) Muhammad Muar Savings Investment Product of EXAM Bank ; Izard Bill Baa (General) ; Izard Bill Bat (HUB) ; Izard Bill Baa (Staff HUB) sat-Manual (BAM) ; Izard (ELF) ; House Hold Durable Scheme (HAD) Baa-Muzzle (General/OF) Baa-Muzzle (WOO)
Baa-Muzzle (Export) ; Maharajah Import Bills (NIB) ; Maharajah Post Import (PM’) Trust Receipt (TRY) ; Muskrat Pre-Shipment (SEC) ; Muskrat Pre-Shipment (PC) Proposed Products office Bank: EXAM Bank new thinking to launch new products in the market according to the considering the market demand. Some deposits product new in the Research & Development Department (R). These are: EXAM Diamond EXAM Gold EXAM Silver EXAM Money Maker investment and deposit products are waiting for approval of higher authority.
Price Strategy Factors Modifying Price Structures: Bank Image Impact on third parties (e. . Shareholders, consumer’s pressure groups, government) ; Geography (in different countries, for different local money market regulations) ; Discounts (in both volume [Large-buyers] & value [early payment, use of debit cards]) ; Price Discrimination Customer Discrimination (e. G. For students only) Product-form Discrimination (e. G. Bankrolling) Place Discrimination (e. G. Service at ATM or at counters) ; Time Discrimination (e. G.
Peak-hours/off-peak-hours) Investment Pricing Office Bank: Profit on various investment categories will depend on the level of risk and type of security offered. It should be kept in mind that rate of profit is the reflection of risk in the transaction. The higher is the risk, the higher is the rate of profit. Profit rates of different types of investment products of EXAM bank. Investment Sector Profit Rate Agriculture (ABA-Muzzle/Maharajah) 10% Term investment in large and medium industries (Izard Bill Bib) 14%-16% Working Capital (ABA Muzzle/Maharajah) 14%-16% Export of Jute items (P.
C) (ABA-Muzzle-P/C) 7% Others export (P. C) (ABA-Muzzle-P/C) 7% SEC (wastrel Bill wake) SOD Export (Bat-Muzzle Export) Commercial Investment (ABA-Muzzle/lazar Bill Bib) Term investment in small industries (Izard Bill Bib) 14%-16% House building investment (Izard Bill Bib) 14%-16% Special project (ABA Muzzle/lazar Bill Bib) Investment in non-banking institutions others Credit Card 24% (Compensation) Table 6: Investment products and their profit rates of EXAM Bank Deposit Pricing office sank: EXAM Bank generally follows the market rate pricing of deposit pricing.
Now in Bangladesh seven Islam Banks are operating, Islam Bank Bangladesh Ltd. Is the leader of those banks because it is old and big. EXAM Bank is now trying to make more deposit by offering attractive profit rate. Fixed or term deposit EXAM Bank Shallot Pampering Bank City Bank Southeast Bank 1 Month 8. 50% 10. 50% 11. 50% 2 Month -?? 11. 50% -??11% 11. 75% 3 Month 11. 25% 12. 55% 12. 50% 11% 12. 50% 6 Month 11. 30% 12. 60% 12. 50% 12. 50% 12 Month 11. 50% 12. 65% 12. 50% 12. 60% Table 7: Comparison of different banks deposits Communication strategy has become an important ingredient in bank marketing strategy.
Since the early sass when banks paid little attention to communications they have been forced to spend heavily on advertising, publicity and personal selling, the relative mix is depending upon the specific market segment to which they have attempted to appeal. The four major elements in communications strategy are as follows: Advertising Public Relations Promotions Personal Selling Print ads Press kits Giveaways Branch Manager TV & radio ads Speeches Fairs & trade shows Account Officer Cinema ads Seminars Exhibits Relationship Manager Mailings Annual Report Demonstrations Personal NV.
Managers Directories Sponsorship Special discounts Telemarketing In branch leaflets Free banking Seminar selling Display signs Special investments Promotional Magazines Special Investments Audiovisual materials Brochures & bulletins Table 8: Division of different communication strategy Communications Strategy office Bank: EXAM Bank is a third generation bank. It has converted into Islam Banking in July 01, 2008 with the approval of Bangladesh Bank. EXAM Bank mainly emphasis on public relation out of four communications strategy. EXAM Bank does following activities for their market promotion and advertising.
When they open new branch, send letter to the elite persons, offices and industries in that area for opening account in their bank. Every year they arrange get together for their loyal customer in Dacha and Chitchatting. For that reason EXAM Bank build good relationship with their clients. EXAM Bank also solves the clients problems and they show the procedure the overcoming the problem. They arrange the ceremony of award to the honorable person in every year. They send gift item at the beginning of the year to the senior citizen of the society.
These items include pen, dairy, calendar, pen stand, wall clock etc. They also give special gift to the elite person in different occasions. In every month the higher authority of EXAM Bank give information about the market condition and suggestion to the branch manager. The managers of every branch tell present condition of his branch to the head office in every month. Head Office updates deposit and investment guideline to the branch manager. Place Strategy office Bank: One of the simplest methods of segmenting markets is by their geographic location.
People who are living in one region of the country have consuming and purchasing habits that differ from those who live other regions. For example, the usage of woolen sweaters and Jackets is higher in north India, due to the extreme cold during cold during the winter months, compared to consumers in south India. Even in local markets, geographic segmentation is important. A bank branch in the western part of he city may attract account holders from that part of town to the bank. However, the bank branch manager may find it difficult to attract customers from the eastern part of the city due to the location inconvenience.
When marketers analyze geographic data, they study sales by region, by state, city size, specific locations and the kind of that bank perform its activities by branch network. Bank may be deal contacts with a client or corporation in different location out of Bank branch. EXAM Bank has 30 branches in urban and rural area. But most of them are in urban commercial area. 4. 3. 2 SOOT analysts of EXAM sank SOOT analysis is the detailed study of an organization’s exposure and potential in perspective of its strengths, weakness, opportunity and threat.
This facilitates the organization to make their existing line of performance and also foresee the future to improve their performance in comparison to their competitors. As though this tool, an organization can also study its current position, it can also be considered as an important tool for making changes in the strategic management of the organization. Strengths: EXAM Bank limited has already established a favorable reputation in the banking industry of the country. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth in the profits and deposits sector.
EXAM Bank has provided its banking service with a top leadership and management position. The Board of Directors headed by its Chairman Mr.. Md. Unusual Islam is a skilled person in the business world. Laming kabuki, the advisor of the Bank is a reputed senior chartered accountant 30 years vast experience in accounts, audit, finance and banking at home and abroad. Mr.. Kaki Masseur Raman work as the managing director of the bank management team. The top management officials have all worked in reputed banks and their years of banking experience, skill, and expertise will continue to contribute towards further expansion of the bank.
EXAM Bank limited has already achieved a high growth rate accompanied by an impressive profit growth rate in 2008. The number of deposits and the loans and advances are also increasing rapidly. EXAM Bank has an interactive corporate culture. The working environment is very friendly, interactive and informal. And, there are no hidden barriers or boundaries while, communicate between the superior and the employees. This corporate culture provides as a great motivation factor among the employees. EXAM Bank has the reputation of being the provider of good quality services too its potential customers.
Weakness: The main important thing is that the bank has no clear mission statement and strategic plan. The banks not have any long-term strategies of whether it wants to focus on retail banking or become a corporate bank. The path of the future should be determined now with a strong feasible strategic plan. The bank failed to provide a strong quality-recruitment policy in the lower and some mid level position. As a exult the services of the bank seem to be dues in the present days. The poor service quality has become a major problem for the bank.