MODULE – D

MARKETING OF BANKING PRODUCTS & SERVICES

Marketing :

“Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs
of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines
measures and quantifies the size of the identified market and the profit potential. It pinpoints
which segments the company is capable of serving best and it designs and promotes the
appropriate products and services.”
Marketing is the process by which companies create value for customers and build strong
customer
relationships in order to capture value from customers in return.
-Philip Kotler and Gary Armstrong “Marketing is an organisational function and a set of
processes for creating, communicating and delivering value to customers and for managing
customer relationships in a way that benefit theorganisation and its stakeholders”.
-The American Marketing Association : Marketing is "the management process responsible for
identifying, anticipating and satisfying customer requirements profitably." -Chartered Institute of
Marketing
There are a lot many definitions of marketing depending on various perspectives and focus.

Marketing and Selling:

Though the terms „Marketing‟ and „Selling‟ are used synonymously, they are two distinct
spheres of activity integrated sequentially towards a single goal. Marketing is a long chain of
activity, which
comprises production, packing, promotion, pricing, distribution and then the selling. Consumer
needs
become the guiding force behind all these activities.
Marketing concerns itself with profitability, whereas selling is target oriented. Marketing involves
research,
survey, analysis, designing, producing, pricing, and delivery.
Selling on the other hand focuses on meeting the targeted consumers (buyers) and make them
consume
(buy) the goods and services at the planned price. Marketing focuses on the needs of the buyer,
whereas
selling focuses on the needs of the seller.

Marketing Approaches: The traditional orientations which guide the company‟s

marketing activities have been production oriented, product oriented, selling oriented
and marketing oriented.  Production Orientation –Standard products are mass
produced. This is suitable when a high demand for the product exists combined with a
certainty of consumers buying it.  Product Orientation – The focus is on quality of the
product. The better the quality, and more innovative, a better consumer interest in the
same.
Selling Orientation – This is the most traditional attitude of marketing where little attention is
paid to consumer preferences and tastes; Sell what is there by persuading the buyer. 
Marketing Orientation – Where the company uses the elaborate techniques of marketing
through extensive research and development.
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
The Modern Approaches are Relationship marketing, Business marketing, Social marketing
and Branding.
Relationship marketing – Efforts to build customer loyalty by giving best possible service;
Business marketing – Establishes business relationship with other business entities who are the
potential consumers of various products and on a larger scale;
Social marketing – Similar to the above two, but also having a general concern for a welfare
society duly curtailing socially harmful products and activities;
Branding – Brand is to promise exactly what the business can deliver and delivering exactly
what it has promised; From Employee behaviour in front of customers to the words chosen for
the advertisement, every interaction that business undertakes with target audience defines the
Brand.

The marketing concept

Fig – 1 Process flow of marketing orientation

Target Markets Market segmentation: System of guiding marketing strategy, by

distinguishing customer needs or interests. Market Segmentation is the sub-dividing of a market
into subsets of customers with homogenous needs and further dividing into subsets of
homogenous variables. In the banking context, for example, segmentation broadly divided into
the following categories will
be the guiding factor for product design and evolution: Based on Income / wealth: High net
worth individuals, economically affluent, economically middle class (more number of
dependents), Lower income groups, and people below poverty line. Based on age: Senior
citizens, Minors, Age tiers (Like people less than 40 years, more than 40 years etc ;) Based on
profession: Doctors, Lawyers, Teachers, Contractors etc;
Based on institutional sector: Educational institutions, Religious Institutions, Cultural and
charitable institutions etc; Based on industry and commerce: Retailers, Wholesalers, Exporters;
Based on industrial sectors: Public Sector, Private Sector, Co – operative Sector, Joint Sector;
Agricultural Sector Landless labourers, Marginal Farmers, Small Owners, Big Farmers; The
marketer can then select the most lucrative segment, and the selected segment becomes the
target market.

Understanding Consumer Needs

Human needs are limitless. The classic observation of “limited resources set out to satisfy
unlimited wants” is the basic provider of scope for a marketing effort. Every need arises at the
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
end of satisfaction of another need. The needs are prioritised according to their importance in
terms of physical survival, social comforts and psychological gratification.
The above is famously known as Maslow‟s hierarchy of needs. Once the need at one level
is secured, the person will then try to satisfy the next level of the need. This is represented
by the Maslow‟s Pyramid of needs. Physiological needs (Air, Water, and Food) Fig – 2 Maslow‟s
hierarchy of needs

In the banking context, which provides both financial and non-financial services, Banks have to
discover, ascertain, and anticipate the needs of the customer and offer the services which
satisfy their needs totally.
General needs of the customers include:
Financial Security and attractive yield on their money, Quick and personalized
service,Convenience and easy accessibility,Low cost loans,Simple procedures,Status symbol

Creating products to satisfy those needs

„Satisfying customers‟ needs‟ also means providing them the solutions to their needs. As Peter
Drucker has said, “Physical Products are what companies produce in the factories, solutions
are what customers buy”.
Let us take the example of a CASA account. One of the customer‟s needs is to withdraw
money. He would prefer to withdraw cash at any place, any time, variable amounts, quickly and
accurately without the hassle of writing and signing every time and without the botheration of
signature difference. Options are – cheque book, withdrawal form, ATM card, Credit Card. The
customer would prefer an ATM card which is most suitable to his needs. What he is buying is
Peace of mind and convenience.ATM Card is the solution for him. Suppose another customer is
unable to visit the ATM / Brach for cash withdrawal, he can sign a bearer cheque and send his
representative to fetch the money. Cheque book is the solution for him. In these cases, CASA
with cheque book facility and ATM card facility are the products sold from the banks point of
view.

Deliver those products to customers

Timely delivery of the products is what makes all the efforts fruitful. There can be no greater
damage done to the image of the company and future marketing efforts if products are not
delivered as promised. Customer acquisition, customer retention and loyalty can be achieved
only by consistently delivering value to customer more than his expectations.
With regard to banks, in the context of modern day banking, innovative delivery channels have
been evolved to put the customer first.

Profitability through customer satisfaction

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

 The manufacturer might price his goods / services based on considerations of cost, profit
margin, competition etc., but the customer would decide to buy based on the level of satisfaction
he gets. Successful marketing envisages maximum value to customers‟ money.

DIFFERENTIATION
Each product / service has some features. The features are available in the products / services
offered by other market players as well. These are normally generic features. In order to make
the consumer feel that there is a difference between the products / service offered by one
market player and the others, differentiation technique is used.
Kamadhenu Deposit is a generic re-investment product. The imaginative name has been given
to create a feeling that the deposit is different from the re-investment deposits offered by other
banks.
The word „Kamadhenu‟ itself connotes a feeling of additional feature in the minds of consumers,
even though there is none compared to re-investment deposits offered by other banks.

Positioning: Is a function of Differentiation. When the consumer is faced with a choice of

products claiming to be different from each other, „Positioning‟ facilitates the consumer in
making a choice.
The consumer allots space in his mind to each of the product / service or category of product /
service. Whenever the need arises, he reaches the allotted space for the product / service or
category of product / service for fulfilling the needs. The intention of positioning is to occupy
available vacant space or creating of vacant space in the minds of the consumers.
Our Bank‟s Educational loan has got positioned in the minds of customers, as an easily
accessible facility. Many consumers in need of Educational Loan first approach our Bank before
they go to any other bank. The communication here is mostly word of mouth, which reinforces
the position constantly.

Branding: Is a function of positioning. It is to leverage the positioning to create perceived value

addition to the tangible benefits offered by the product / service features to the customer.
If the value addition to the consumer is more than the tangible benefits derived by the consumer,
it results in creation of equity to the brand which is called „Brand equity‟.

Creating Niches: Niche is also closely connected to Positioning and is a macro level strategic
tool.
If a market player finds it risky to hold the entire market or the player‟s competence is restricted
to specific product / service, he can opt for growth in a small part of the market, which is niche.
Sometimes a market player may find a gap in the market which is not filled at all or not given
enough focus. The player focuses on this Niche activity and builds business.

THE MARKETING RESEARCH PROCESS

Since marketing involves various approaches, stages, strategies and activities, a
comprehensive set of information is required for the objective to be successfully achieved.
The market research process is a systematic evolution through the following steps:
6. Implementation 5. Recommendations
4. Data analysis
3. Collection of primary
As Henry Ford has said, “The man who will use his skill and constructive imagination to see how much he
can give for a dollar instead of how little he can give for a dollar, is bound to succeed.
2. Secondary data examination
1. Problem definition
It would not be out of place if John Naisbitt (American Author) is quoted here:

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

“The new source of power is not money in the hands of a few, but information in the hands of
many”
The problem definition is the basic and vital step of any market research. The problem definition
should not be too broad or too narrow. This helps in directed information / data collection and
analysis.
Secondary data are the data already collected by others and available with various sources.
The data is cheaper and more quickly obtainable. Care should be taken to use the data with
relevance to applicability to achieve the research objective, accuracy, authenticity and cost
efficiency; data should not be out – dated.
GOI publication, RBI research data, Central statistical Organisation, National surveys, The
CRISIL research data, World Bank research data, UN research data, Dun and Bradstreet are
some of the sources of secondary data.
The next step is to collect primary data. Since the primary data collection is a costly process it
would be prudent to save the data in proper and easily accessible formats and keep updating on
an ongoing basis. Collection of primary data is a laborious process. Care should be taken not to
render it useless before the collection process is completed. Questionnaires, interview, field
work data collection, feedback formats and mechanical devices are some methods of primary
data collection.
It is equally important to compile the data and arrange them for proper analysis towards
decision making process.
Recommendations are nothing but the solution definition. The research which started with
problem definition has reached the mature stage of getting ready for implementation.

COMPETITION
Any marketing effort to be successful, it is important to be aware of the competition and know
the competitors‟ policies, positioning and potential.
There may be a generic competition where products satisfying the same need compete with
each other; Brand competition where products compete for the same market segment; or the
industry competition which involves all the companies in a given industry.
In the recent trends in banking industry, especially post liberalization, the pressure is on to
produce greater efficiency and higher profitability, leading to a more intense competition in a
saturated market.
Banks were competing with other banks; now banks are competing with mutual funds and non –
banking financial institutions for mobilizing the funds and extending loan products respectively.
There is a tremendous pressure from all the stake holders – share holders want more dividends
and backed by quality assets, depositors want more interest backed by safety and security of
their funds, other service providers and vendors want the best rates in the market, employees
want highest salary, borrowers want the best bargain in terms of rate of interest and repayment
options.

LEVERAGING CORE COMPETENCIES

Core competency is defined by Hamel and Prahlad as “an area of specialized expertise that is
the result of harmonizing complex streams of technology and work activity”
In a competitive market, one has to be aware of one‟s strengths and weaknesses so as to use
the strengths to the leverage on competitors‟ weaknesses; to overcome one‟s weaknesses and
competitors‟ strengths; the existing competency should be continuously and consistently
developed to remain at an advantage. Core competencies are enhanced as they are applied
and sustained efforts are made to improve. There should be a value addition from the
customers‟ perspective.
In a banking organisation, excellence in service in an inimitable style is the best core
competency to work upon. In our bank, product innovations, customer centric approach,

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

excellence in customer service and endearing personalized service have always been our core
competencies. Our bank is the inventor of several products, the most popular being the
Educational Loans.

COMPETING TO WIN : In the relentless race to beat the competition, it is a matter if timing. A
swift move into the target‟s mindspace and physical process of buying is required. The
strategies include „push selling‟ and „pull selling‟. All the stages of marketing contain a strategy
to beat the competition.
The demands of changing customer tastes and preferences, technological advancements,
threat of new entrants, innovative substitutes are to be addressed simultaneously. In banking
scenario, the market has moved from a seller‟s market to buyer‟s market post liberalization.
This necessitates protecting the winner‟s edge by internally positioning ourselves to satisfy and
deliver in a changed scenario.
PRODUCT LIFE CYCLE
Just as a biological life cycle is defined, a concept of life cycle has been given to the products
also. This concept is based on the opinion that a product undergoes a cycle of launch and
decline.
A product is designed and launched after a meticulous research and development
exercise. A lot of

promotional activities will take place at this stage. More focus will be on attracting the
consumers. If they appreciate the product many takers will step up the demand.
The product grows through increasing demand and need based customization. The success of
a service product is more assessable and visible at this stage. The product has to keep growing
because competitors will bring in similar products.
The demand flattens after a stage and the growth becomes stagnant. This will continue for a
period of time. The promotional efforts in terms of cost and effort will be curtailed. Maturing of
the product will also happen when indications of change start appearing.
Once the change starts setting in, that is, when lifestyles and mode of using the product
changes, the existing product will go on a decline path. This will also happen when consumers‟
values, attitudes and preferences change.
In banking context, the MT and TT are products to reckon at this point. The payments in the
business world used to be through highly efficient Telegraphic Transfer system at that time. Bill
payments used to carry the connotation “payment by Wire”. MT was used for domestic fund
transfer.
These products after serving their popularity charts outlived their purpose with the advent of
new technology.
As the technology started growing, they started their decline. Today these products are not
there, but fund transfer mechanism has taken a new shape.
However, the declined and abandoned products hold their place of honour as being the
stepping stones for new innovated products which is an ongoing phenomenon.
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
SERVICES MARKETING : The customers‟ values have changed since; their preferences and
needs have changed with the changes in the social and economic environment. Scientific
progress has also drastically changed the customers‟ needs. Service industries have also
changed, creating a highly dynamic market competition.
Banking being a service industry and „Service‟ having its own peculiarities, the marketing
processes of services take a different orientation.

Sl.No. Physical Goods Services

01 Tangible Intangible
02 Homogeneous Heterogeneous
Production and distribution separated from Production, distribution, and consumption are
03
consumption simultaneous processes
04 A thing An activity or process
Core value produced in buyer-seller
05 Core value produced in factory
interactions
Customers do not participate in the
06 Customers participate in the production
production process
07 Can be kept in stock Cannot be kept in stock
08 Transfer of ownership No transfer of ownership
Phase Dominating Detached Social Timid
Give respect Avoid Keep it short Don’t get Be friendly Let Ask leading
Opening arguments customer talk Give questions Don’t get
personal
appreciation personal

Physical goods Vs Services:

First let us understand the characteristics of service and service marketing.

Characteristics of service:
1. Intangibility
The most basic, and universally cited, difference between goods and services is intangibility
Intangibility presents several marketing challenges
Services cannot be inventoried, and therefore fluctuations in demand are often difficult to
manage
Services cannot be patented legally, and new service concepts can therefore easily be copied
by competitors.
Services cannot be readily displayed or easily communicated to customers, so quality may be
difficult for consumers to assess.
„Tangibilising‟ financial services: Pass Book, Bank Statements, “Gold / Platinum” Credit cards
Enhance image of service / provider, Bestow status!!! Physical reminders of service product, our
brand name – reassure the consumer & help the organization's positioning aka -Simultaneous
production and consumption Goods are produced first, then sold and consumed, whereas
services are sold first, and then produced and consumed simultaneously Service person plays a
role as part of the product itself and as an essential ingredient in the service experience for the
consumer. The quality of service and customer satisfaction will be highly dependent on what
happens in “real time”, including actions of employees and the interactions between the
employees and customers. Banking services vary in their level of simultaneous production and
consumption E.g., Term Deposit – for 1 year vs. 10years
The customer is involved in and observes the production process and thus may affect (positively
or negatively) the outcome of the service transaction In a related vein, “problem customers”
(those who disrupt the service process) can cause problems for themselves or others in the
service settings, resulting in lowered customer satisfaction

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2. Inseparability
Heterogeneity, (Variability) In our banking parlance:
The complexity of the service transaction will determine the extent of variability e.g. Withdrawing
money via ATM / branch counter Greater degree of automation through ATM / Internet banking
etc – to increase standardization Heterogeneity with service is largely the result of human
interaction (between and among employees and customers) and all of the vagaries that
accompany it. Because services are heterogeneous across time, organisations, and people,
ensuring consistent service quality is challenging. The employees delivering the service
frequently are the service in the customer‟s eyes, and people may differ in their performance
from day to day or even hour to hour. Heterogeneity also results because no two customers are
precisely alike; each will have unique demands or experience the service in a unique way.

Perishability :Perishability refers to the fact that services cannot be saved, stored resold or
returned.
E.g., Uncleared cheque by the specified date due to system delay – benefits to consumer lost –
service perishes The fact that services cannot typically be returned or resold also implies a need
for strong recovery strategies when things do go wrong.

BANKING SERVICES MARKETING MIX

The basic elements that require attention while packaging service should be at the most
optimum desired levels in order to successfully implement marketing programmes and to
cultivate customer orientation. This is known as marketing mix.
The key elements are popularly known as the7 P‟s:

Product: In India banking services may be financial and non-financial in nature. Banks offer
varied products like Deposits, Investment, Insurance, Loans and advances, Pensions, Credit
Cards, Fund transfers, Payment systems, Safe deposit lockers, Asset Management and
Taxation, Collection services and other services. Product features are announced in the form of
policy guidelines. These guidelines will be within the statutory, regulatory and managerial
framework. Consumers‟ needs are fitted in acceptable terms and conditions. The delivery takes
place in the form of a contract.
Frontline personnel should implement as and when the guidelines are issued so as to keep the
customer satisfaction at the highest level; Delayed implementation will lead to the product
becoming redundant, frustrating the efforts of beating the competition.

Price: Pricing of banking products relates to cost to the customer, like bank charges and credit
interest rates. In a highly competitive market it evokes low level of customer sensitivity. An
affordable Pricing in retail banking and a competitive bargain in case of corporates are market
driven parameters. As such, customer sensitivity becomes apparent in case of value of the
product. Value of the product can be ensured by implementing those value additions and giving
best service by the front office personnel.

Promotion: To strengthen the awareness of the brand and Bank‟s image, various
advertisement campaigns, business development drives and image building activities are
undertaken by the banks.
With the advent of technology, e-mail has become a very popular for customer service and
marketing communications. The website of a Bank is potentially the most powerful
communication tool and is the basis of relationship between the consumer and the Bank.

Place: Place or location has always been highly critical in retail banking. The place should be
easily accessible to the consumer. Banks boast about their branch network size and reach in
their advertising campaigns. „Taking bank to the doorstep or the mouse click of the consumer‟

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

is the present day philosophy of retail banking. Many consumers still prefer the face – to – face
banking within the branch and a wide network of service outlet satisfies this need.

People: Services are provided through the people to the people. It is needless to emphasize
the importance of having the right personnel at the right place. From the perspective of
customer expectation, the requirements are approachability and professionalism, which
means that the employees deployed for delivering the service must be sufficiently trained.
Must have the necessary knowledge, skill, attitude and motivation. Customers form an opinion
based on the person they interact with. The personnel in the banking industry are recruited
after testing their Quantative, Reasoning aptitude, English language and general knowledge,
followed by interviews to test their communication skills and attitude.

Processes: Processes are the flow of activity through which the service is delivered. In a Bank,
processes mainly depend on the systems and procedures. It also depends on the delivery
channel in the present day context. The procedures must be easily adaptable to the needs of a
heterogeneous clientele that a bank services. The processes must be simple, comprehendible
and transparent.
In the banking sector, the systems and procedures and documentation are more or less
standardized which reduces customers‟ confusion and helps them make comparisons of service
delivery.

Physical Evidence: The Perishability and Intangibility characteristics of service make it difficult
for a
consumer to make a judgment in the decision making process. Banks depend highly on word of
mouth advertising by the captive clientele. There should be some evidence to prove the claim
for being competent and competitive in the market. The physical evidences of good service add
the actual face value to the brand.

PERSONAL SELLING
Understanding consumer behaviour: This is a very complex stage of personal selling. How
the buying process takes place is understood by understanding the psychology of individual
customers and the collective psychology of the targeted market segment is very important to
close the sale at the decision making stage. The buying process:
It is the consumer who recognizes the need first. He prioritizes the need in order of necessities,
comforts and luxuries / in the order of desirability.Once the consumer recognizes the need to
buy / invest in a product, he starts evaluating the options. This is the stage when the consumer
is influenced by various factors like cost, convenience and competitiveness.The process of
collecting information and understanding various products may lead to further questions and
doubts. The consumer begins the process of eliminating these doubts.
Once the doubts are eliminated, the consumer decides to buy the product.
It can be summarized that the buying process goes through the Recognize need, Evaluate
options, Eliminate doubts and Decide to buy (R.E. E.D) stages.

The selling Process: In service marketing, the selling process is closely related to the buying
process because the manufacturing and consumption takes place simultaneously and has to be
done immediately after the decision stage. The sale has to be opened when the prospect is
recognizing the need. It has to be developed when he is looking for options. Solution has to be
proposed. Eliminate the doubts and close.
The 4 P‟s take a new dimension when renamed as „SIVA‟ model i.e.; Solution, Information,
Value and Access

SERVICE PROFIT CHAIN

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Internal service quality  Satisfied and productive service employees  Greater service value
Satisfied and loyal customers  Healthy service profits and growth

HOW TO PLAN THE CALL

Always be prepared. Chalk out the sales call objective.  Know your product inside out  Be
knowledgeable about the industry  Know your competition  Know the basis of the
customer‟s needs. Create customer profile form and develop customer
benefit plan.

Believe in yourself, your company and the product

Use the Bank‟s resources as a brand to establish a long standing relationship.
Plan the meeting by taking appointment whenever possible. Decide beforehand on time and
place.  Stabilize your emotions, reduce anxiety

HOW TO PLAN COMMUNICATION

Lack of planning is serious cause of failure of any activity. The five W‟s and one H – are to be
planned properly before communicating to achieve the required result:
1. Why? (Purpose) To inform, to persuade, to counsel, to educate, or collect information
2. What? (subject matter, content) What needs to be informed? ; What does the recipient want
to know? ;
3. Who? (the target to whom communication has to reach) Who exactly is the recipient of the
communication / whether it is a new potential customer, existing customer, borrower (these
categories can be individual, corporate or other legal entities)
4. Where? (place)
In the public domain, at the branch, at the customers‟ place
5. When? (Time and context)
Whether communication is done when the meeting happens casually during customers‟ visit;
whether meeting is fixed by specific appointment; whether in response to queries;
6. How? (mode, style and channel) Whether communication is done in person, e-mail, physical
mail,
telephone; also whether
the communication is to be kept confidential and secure has to be considered (like sending PIN
mailers)

BARRIERS IN EFFECTIVE COMMUNICATION

Difference in perception: Employees perceive Branch as a dependent entity controlled by
CO / HO; Customers perceive the branch as the „Bank‟. The customers‟ perception
necessitates doing the personal selling at the branch. This mismatch can be overcome
by delivering the customers needs at the branch without referring to other offices as far
as possible.
Jumping to conclusions: to overcome this barrier keen listening skills and analytical skills are
required to understand the communication.
Stereo typing and biased: pre-conceived notions like „public sector employees do not work‟ or
„customers who do not have the documents are cheaters‟ etc; This has to be overcome at
personal level and by empathetic thinking.
1 Lack of Knowledge: If anything spoils the whole issue, this is a major factor. This can be
over come
by constantly updating, doing the homework well and be generally well informed.
2 Lack of interest: The responses from both sides will be lacking any purposeful content if
there is no
interest. For a sale to happen, the onus of creating interest and maintaining that throughout the
conversation is on the person who wants the sale to close.

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

3 Poor language: Lack of proficiency in the language may lead to faulty communication.
To
overcome this one has to know well the targets‟ language and communicate in understandable
way.
7. Strong emotions: If either or both communicator and receiver are emotionally upset,
communication becomes a casualty. The persons may not understand what is communicated
and react in an incoherent manner. This barrier may lead to all or any of the above six barriers.
„Be cool‟ is the mantra to overcome this barrier.

STAGES IN PERSONAL SELLING

Prospecting: prospecting is the search for and qualification of potential customers. A lead is
the name

of a person who may be a possible customer. A prospect is a customer who wants or needs the
product. If an individual wants the product, can afford to buy it, and is the decision maker, this
individual is a qualified prospect.

Pre – approach: Prior to making the call, a certain amount of preparation is required.
Assessment of possible requirements of the prospect, Assessing the possible scale and time
frame for delivery, and the CPC factor i.e.; having a comprehensive Company information,
Product information and Competitor information have to be meticulously prepared before
making the call.

Approach: This is the stage where the meeting with the prospect happens.
Have a pleasant expression and demeanor. Greet
Introduce yourself and give the Business Card if the prospect is not already known.
Make a general benefit statement
Gain attention and arouse interest
Develop the interview by customer profiling :
by asking background questions
by posing intelligent and purposeful questions to understand the purchasing policies / buying
criteria of the customer,Customer‟s expectation from you, Buying motives of the customer,
Understand and recognize the specific needs,Lay the foundation for presentation

Presentation: Presentation skill refers to preparation and effective delivery of information

regarding a product to the customer to ensure its due acceptability. The process involves

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various techniques – including preparation and delivery of effective speech about the product
features and benefit. Presentation need not be one way. It can be an interactive session.
Understand the need of the customer. Use the need satisfaction format. The banker should take
role of a expert consultant on problem recognition and resolution. Talk about the benefits of the
product, benefits of establishing the relationship.
Customer will evaluate based on his following needs: Material Needs
Awareness (full information about the scheme. He would not like to be surprised by the fine print
at a later stage) Operation, Maintenance (He would like to know how to use the product – For
example internet banking and mobile banking),Performance, Price,Quality, Quantity,
Quickness,Reasonability,Safety
Propose the solution with the objective to ensure that it meets the specific requirement of the
customer.

Objection handling: The objections raised by the customers may be due to lack of
understanding / misunderstanding of the product features, skepticism and value objection.
Objection may be of two types:
Psychological : resistance to interference, preference for established brands, reluctance to give
up something, unpleasant association created by sales representatives, pre – determined ideas
Logical: Resistance to price, delivery schedule, processes
If the customer talks about the competitor, never talk ill about the competitor. Competitors are
almost at par with each other; that is why they are called competitors. Talk about the special
benefits of our products. Be eloquent of the talking points of our
products. Dispel the misunderstanding by a sympathetic dialogue and providing proper and
complete information. If there is a value objection, revisit the developing stage and customize
the service for the specific need of the customer. Never let go at this stage. Provide answers to
all the objections. That is where the skill lies.
Use the KEITH MALPERIN „HELP‟ MODEL Hear, Empathize, Look for Options Provide

Understanding the modern customer:

The word „Modern‟ brings to mind a very tech – savvy and young person. It is more than that.
Even a pensioner today has the need for modern banking facilities. The products have evolved
with the changing lifestyles and modern concept of speed in obtaining the services.
There is a huge demand on everybody‟s time and the customer would not have much time to
devote to banking affairs. He expects professionalism so that he can entrust his banking needs
to be taken care of by the bank. This has a benefit in itself because it gives scope for earning
non – interest income.
Customers are more literate and educated than their yesteryear counterparts. They are well
aware of the banking facilities and know what they want. They are satisfied if their needs are
taken care of without requiring indulging in elaborate procedures and paper work.
They (customers) need the services to be available any time, any where without dependency on
others. CBS, ATMs, Credit cards, Internet banking, mobile banking, telebanking services,
electronic payment and fund transfer systems, universal banking are all efforts to satisfy the
needs of the present day customer.
On the other hand, if there is a deficiency in service, there are multifarious risks involved.
Present day customer is well informed. There is a legal risk. He is well aware of the redressal
avenues.
There is a reputational risk. He may give anti – propaganda. There may be the risk of losing the
customer: Nowadays, customers do not have time and inclination to fight and stay on. They just
play the withdrawal strategy and drift.
There may be a monetary loss to the Bank.

Understanding the unexpressed need of the customer:

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

The customer may be aware of the need or he might not have realised the need yet.
It is required to develop insights into the customers‟ business. Look at his business from his
point of view. If this is not done at the branch level, Some other market player will pull away the
customer.

Focus on fee – based income:

Banks earn non – interest income by way of commission and charges on the banking services
offered by them. The traditional banking concept has undergone a sea change inasmuch that
customers have started looking for solutions for all their financial needs.
Banks have started offering varied products like Mutual funds, insurance, tax payments and
collections under the universal banking concept. Tapping the existing resources to earn better
revenue marks the business prudence of the Bank.
These products enhance the market presence of the Bank, give value addition to customers and
meaningful income addition to the bank

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

CRM is neither a product nor a service It is an overall business strategy that enables companies
to effectively manage relationships with their customers. It places customers at the heart of the
organisation‟s processes. It is
comprehensive strategy of acquiring, retaining, and partnering with selective customers to
create superior value to the bank. CRM is and endless co – ordination between sales, Customer
service, Marketing and field level
functions. It integrates people, processes and technology to maximise relationship with all
customers. It helps in holding on to relationship banking. CRM helps the organisation to: 
Provide better customer service.  Cross sell products more effectively  Helps sales staff to
provide service faster  Simplify marketing and sales process  Increase customer revenue
Major components of a complete CRM framework  Customer database  Analyse database
 Select target groups  Develop relationship The CRM package enables the Bank in: 
Marketing activities  Sales activities  Services activities

QUESTION BANK
A. QUESTIONS
2. Fill in the blanks:
(a) Marketing implies 'meeting needs _______
(b) The businesses became customer and market driven due to increased ___
(c) Marketing identifies and ________ the customer requirements.

B. Fill in the blanks -

1. Unless aggressive efforts are made to Banks' deposits and credit schemes, there
could be under-utilisation of the banking infrastructure.
2. The new generation private sector banks have focused on _____and _____
3. Product can be a ________ or _______
4. In service products the ____ and ______ takes place simultaneously.
5. Bank marketing is aimed at providing services to satisfy customer's _________ needs.
C. Match the followings:

(i) Product (a) Convenience 1. Affordability

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
 (ii) Price (b) Communication 2. Awareness
(iii) Place (c) Cost 3. Acceptability
(iv) Promotion (d) (d)Customer value 4. Accessibility

ANSWERS : A. (a) profitably, (b) competition, (c) satisfies B. 1. market, 2. technology, high
networth customers, 3. physical object, service, 4. production,
consumption, 5. financial. C. (i)-(d)-(3), (ii)-(c)-(l

B. QUESTIONS

A 1. Out of the items mentioned below _____ is not a physical product.

(a) Pilgrimage tour to Badrinath. (b) Dosa and chapatti
(c) Clothes (d) Drinking water
2. Match the items from column A to column B
A B
(a) Single sale focus (i) Per capita high income
(b) Half nest (ii) Social security service
(c) Young bachelor (iii) Consumer durables
(d) Empty nest (iv) Customer retention focus

B 1. In a term deposit, product core feature is

2. Match the items from column A to column B
A B
(i) External Commercial Borrowing availed (a) Consumer Product
by your bank's customer (b) Industrial Product
(ii) Writing paper bought by your bank (c) Non-durable Goods
(iii) Petrol bought for your car (d) Material Supplies
(iv) Compact Disks (CDs)

3. A product has a life cycle comprising (number of) stages.

4. Match the items from column A to column B
A (a) Maturity
(i) Low Sales, Marginal Profit (b) Decline
(ii) Fast Growth, Rising Profits (c) growth
(iii) Failing sales, Low margins

C 1. Product modification includes -----------, --------------- and -------------- improvements.

ANSWERS
A.1. (i); 2. (i)-(d), (ii)-©, (iii)-(a), (iv)-(b).
B. 1. Interest income; 2. (i)-(b), (ii)-(d), (iii)-(a), (iv)-(c); 3. Four; (4). (i)-(a), (ii-(c), (iii)-(b).
C. 1. Quality, feature & style; 2. High carrying cost; 3. Three (3); 4. Income; 5. Brand equity;
6. primary

3. QUESTIONS :
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
1. Please choose the correct alternatives for each of the following statements:
(a) Out of the following, __________ is not an objective of pricing.
(i) Profit
(ii) Stabilising demand and sales of the product
(iii) Improvement in product quality
(iv) Expansion of business
(b) Of the following pricing methods, _. is not based on competitors pricing.
(i) English auction (ii) Sealed bid auction
(iii) Going-rate pricing (iv) Group pricing
(c) Of the following pricing strategies, is not ideal for new products.
(i) Market-skimming (ii) Discriminatory pricing
(iii) Market-penetration (iv) Promotional Pricing

2. Please state for each of the following statements whether it is True or False.
(a) Price for any product is a constant.
(b) One of the objectives of pricing is getting cash inflows at the required time.
(c) Perceived value pricing takes the buyers' perception into account.

ANSWERS : 1. (a)-(iv), (b)-(iv), (c)-(ii); 2. (a) False, (b) True, (c) True.

4. QUESTIONS
1. Please choose the correct alternative for the following statements:
(a) Marketing channel refers to ______
(i) a physical channel for movement of goods from the seller to the buyer, (ii) a set of firms who
handle the physical movement of goods from one point to another, (iii) different departments of the
producer firm which are associated in ensuring delivery of
goods to the buyer, (iv) a set of independent organisations involved in the process of making a product
or service
available for use or consumption.
(b) The functions of distribution channel do not include
(i) gathering and providing market information.
(ii) marketing research.
(iii) assisting the consumer in understanding and using the goods, (iv) promoting the sales of goods.
(c) Which of the following characteristics is found only in some services like banking and not
found in case of many services.
(i) inseparability (ii) variability
(iii) client relationship (iv) perishability

ANSWERS : 1. (a)-(iv), (b)-(ii), (c)-(iii);

5. QUESTIONS

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

1. Say whether the following statements is True or False:
(a) Channel management concentrates on more productivity than profitability.
(b) Channel management is free from legal issues.
(c) Hybrid and multi-channels have opened up due to changes in market scenario.
(d) Decisions of channel have a critical role in deciding a company's vision.
(e) Channel management paves a way for effective physical, title, payment, information
andpromotion flow in an organisation.

ANSWERS : 1. (a) False, (b) False, (c) True, (d) True, (e) True.

6. QUESTIONS
1. (a) The tools for communications with the customer are _____
(i) Promotion mix (ii) Product and price (iii) (i) and (ii) (iv) (i) and other three elements of
marketing mix
(b) Promotion seeks to influence the buyer in decision-making through _______
(i) Persuasion
(ii) Compulsion
(iii) Reminding
(iv) (i), (iii), information and reinforcement
(c) Promotion is an exercise of maintaining contact with the consumer at different levels so as to
(i) enhance customer relationship
(ii) lure the customer in to buying the products
(iii) prevent customer from being critical of the firm
(iv) none of the above
2. State whether the following statements are True or False.
(a) Promotion mix of a firm includes public relations.
(b) In integrated marketing communications, the elements of promotion mix are blended.
(c) Buyers' behaviour stage is not relevant for determining the promotion mix.

ANSWERS : 1. (a)-(iv), (b)-(iv), (c)-(i); 2. (a) True, (b) True, (c) False.
6. QUESTIONS

I. Fill in the Blanks:

 and ________ are the channels of non-store retailing.
 There has been a paradigm shift in the functioning of ________ industry over the past decade from
branch centric to customer centric.
 The challenging technological revolution calls for _________ growing demands.
 Banks are able to maintain an effective customer relationship management as a tool for direct
to combat the
and.
5)Direct selling, is also called as _______ - or _____ __.

ANSWERS : I. 1. Direct selling, Direct marketing; 2. Banking; 3. multi-level selling or

network-marketing; 4. re-orientation and retraining; 5. database.

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

7. QUESTIONS

I. Choose the correct alterative for the following statements.

(a) Firms need to collect and analyse the data pertaining to marketing for _
(i) projecting their organisation as knowledge-oriented (ii) enabling the top management to keep
control over the sales force (iii) taking the required steps for effective marketing of their products
(iv) for utilising their information technology capabilities
(b) An effective MIS fulfils these:__________
(i) Analysis of quantitative information (ii) Coordination among functional and specialists
executives (iii) Limited to the current scenario (iv) Both (i) and (ii) above

(c) The components of Marketing Information System do not include _______

(i) Marketing intelligence system (ii) Internal records system
(iii) Information technology system (iv) None of above

(d) The ultimate users of the Marketing Information System are________

(i) the customers of the firm
(ii) the competitors of the firm (iii) the decision-makers in the firm (iv) both (i) and (ii) above

(e) Which of the following situation falls under the purview of Marketing Research System?
(i) Riddhi Vriddhi Bank wants to send Diwali greeting cards to all its fixed deposit account holders
with deposits of Rs. 10,000 or more.
(ii) Money Honey Bank wants to have a profile of Kalahandi District to decide about opening a new
branch there.
(iii) Get Rich Fast Bank wants a comparative business statistics with other ten peer level banks in the
country.
(iv) Baroda branch of Prosperous Customer Bank is twelve-year-old and it recorded a compounded
annual growth rate of 20 per cent in deposits during the first ten years, which has been better than the
industry average. However, during the last two years the branch has witnessed a significant decline in
its deposits. Managing director of the bank desires to know the causes for this reversal in the business
trend and suggestions for ameliorating the situation.

(f) The purpose of computer usage in MKIS is primarily to:

(i) Generate reports (ii) To meet specific user needs
(iii) Retrieval of data (iv) For day to day operations
III. Match the following items between column "A" and column "B"
A B
(a) Marketing Research System
(b) Marketing Intelligence System
(c) Marketing Information System

(d) Customer database

(e) Data analysis

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

(i) Major source - published information
(ii) Database management
(iii) Business information about
customers
(iv) Data collected specifically
(v) Geographic, demographic, psychographic, and
behavioural data on customers and prospects
(vi) Conducting research for new theories in marketing
(vii) Adopting detective or intelligence gathering
technique on competitors
(viii) Operations research tools

ANSWERS

I. (a)-(iii), (b)-(iv), (c)-(iii), (d)-(iii), (e)-(iv), (f)-(i).

III. (a)-(iv), (b)-(ii), (c)-(i), (d)-(v), e-(viii).
1. True.Production elimination is done due to (give any one reason)
2. There are ______types of diversification.
3. Consumers buy brands and brands generate----- for the firm.
5. The positive differential effect that knowing a brand name has on consumer response is called ------
------.
6. Bank passbook or fixed deposit receipt may be treated as -------------packaging.

ANSWERS TO 'QUESTIONS' : A. 1. (i); 2. (i)-(d), (ii)-(c), (iii)-(a), (iv)-(b).

B. 1. interest income; 2. (i)-(b), (ii)-(d), (iii)-(a), (iv)-(c); 3. Four; 4. (i)-(a), (ii)-(c),

(iii)-(b). C. 1. quality, feature & style; 2. high carrying cost; 3. Three (3); 4. income; 5. brand equity;
6. primary.

RECALLED QUESTIONS MARKETING OF BANKING PRODUCTS & SERVICES

1. Market research is useful for ____?

(1) Deciding proper marketing strategies
(2) Deciding the selling price
(3) choosing the right products
(4) choosing the sales person
(5) All of these Ans. (5)
2. A call means:
(1) shout out to somebody
(2) profession or business
(3) visiting friends
(4) visiting prospective customers
after-sales service Ans. (4)
3. Conversion means:
(1) meeting a prospective client
(2) interacting with a prospective client
(3) converting an employer into an employee
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
 (4) converting a seller into a buyer
(5). converting a prospective client into a - Ans. -5
4. Customization means:
(1) acquiring more customers
(2) regulating customers
(3) special products to suit each customer
(4) more products per customer
(5) All of these Ans. (3)
5. Modern style of marketing include
(1) digital marketing
(2) tele-marketing
(3) e-commerce
(4) e-mails solicitation
(5) All of these Ans. (5)
6. E-Marketing is the same as
(1) virtual marketing
(2) digital marketing
(3) real time marketing
(4) all of these
(5) None of these Ans. (4)
7 Value-added services means
(1) costlier products
(2) large number of products
(3) additional services
(4) at par services
(5) None of these Ans. (3)
8.Aggressive Marketing is necessitated due to:
(1) globalization
(2) increased competition
(3) increased production
(4) increased job opportunities
(5) All of these Ans. (2)
9. Efficient Marketing styles require
(1) proper planning
(2) good communication skills
(3) team work
(4) knowledge of products
(5) All of these Ans. (5)
10. The performance of a salesperson depends on
(1) salary paid
(2) sales incentive paid
(3) sizes of the sales team
(4) ability and willingness of the salesperson
(5) team leader aggressiveness Ans. (4)
11. The sole aim of marketing is to
(1) increase sales
(2) increase the number of employees
(3) increase profits
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
 (4) increase production
(5) All of these Ans. (1)
12. Lead generation means
(1) tips for selling tactics
(2) tips for better production
(3) generating leaders
(4) likely sources for prospective clients
(5) All of these Ans. (4)
13. Find the correct statement:
(1) Marketing is redundant in monopolistic companies
(2) The performance of a salesperson depends on the amount of incentives paid
(3) Marketing is influenced by peer performance.
(4) An increase in market shares indicates fall in business volume.
(5) A mission statement is part of the Company's Prospectus. Ans. (5)

14. Which of the following is the first step in the 'transaction processing cycle', which captures
business data through various modes such as optical scanning or at an electronic commerce
website?
(1) Document and report generation
(2) Database maintenance
(3) Transaction processing
4. Data Entry (5) None of these Ans. (1)
15. CRM (Customer Relationship Management) is
(1) A pre-sales activity
(2) A tool for lead generation
(3) An ongoing daily activity
(4) The task of a DSA
(5) All of the above Ans. (5)
16. Bancassurance can be sold to
(1) All banks
(2) All insurance companies
(3) Insurance Agents
(4) All existing and prospective bank customers
(5) All of the above Ans. (4)
17. Cross-selling is not effective for which one of the following products?
(1) Debit Cards
(2) Savings Accounts
(3) Internet Banking
(4) Pension loans
(5) Personal loans Ans. (2)
18. Which of the following is not involved in the Growth Strategies of a company?
(1) Horizontal integration
(2) Vertical Integration
(3) Diversification
(4) Intensification
(5) None of these Ans. (4)
19. A successful "Blue Ocean" requires

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI

 (1) Effective communication
(2) Innovative skills
(3) Motivation
(4) All of the above
(5) None of these Ans. (4)
20. Cross-selling is a basic function of
(1) All employers
(2) All employees
(3) All salespersons
(4) Planning Department
(5) All of the above Ans. (3)
21. Data mining means analyzing the data stored with
(1) The DSA
(2) The front-office staff
(3) The back-office staff
(4) The customers
(5) None of these Ans. (3)
22. SME means
(1) Selling and Marketing Establishment
(2) Selling and Managing Employee
(3) Sales and Marketing Employee
Small and Medium Enterprises (5) None of these Ans. (4)
23. One of the following is not included in the 7 P's of Marketing. Find the same.
(1) Product (2) Price
(3) Production (4) Promotion
(5) None of these Ans. (3)
24. The target group of the SME loans is
(1) All businessmen (2) All professionals
(3) All SSIs (4) All of the above
(5) None of these Ans. (3)
25. Home loans can be best canvassed among
(1) Builders (2) Flat owners
(3) Land developers (4) Agriculturist
(5) Individual wanting to buy a flat or house Ans. (5)
26. Online Marketing is the function of which of the following
(1) Purchase section
(2) Production Department
(3) IT Department
(4) Design Section
(5) A collective function of all staff Ans. (5)
27. Customization is useful for
(1) Designing customer specific product
(2) Call centres
(3) Publicity
(4) Motivating the staff
(5) Cold calls Ans. (1)
28. The key challenge to market-driven strategy is
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
 (1) Selling maximum products
(2) Employing maximum DSAs
(3) Delivering superior value to customers
(4) Being rigid to changes
(5) Adopting shot-term vision Ans. (3)
29. Effective selling skills depends on
(1) Size of the sales team
(2) Age of the sales team
(3) Peer strength
(4) Knowledge level of the sales team
(5) Educational level of the sales team Ans. (3)
30. Generation of sales lead can be improved by (1) being very talkative increasing personel
and professional contact
(2) being passive
(3) engaging recovery agent
product designs Ans. (2)

31.A market plan is

(1) performance appraisal of the marketing staff
(2) company prospectus
(3) documented marketing strategy
(4) business targets
(5) call center Ans. (3)
32. Marketing channels means
(1) delivery objects
(2) sales target
(3) delivery outlets
(4) delivery boys
(5) sales teams Ans. (3)
33.Social marketing is
(1) share market prices
(4) marketing by the entire society marketing for the social cause
(5) society bye-laws Ans. (4)
34. Service marketing is the same as
(1) internet marketing
(2) telemarketing
(3) internal marketing
(4) relationship marketing
(5) transaction marketing Ans. (4)
35. Market-driven strategy includes
(1) identifying problems
(2) planning marketing tactics of peers
(3) positioning the organization and its brands in the market place
(4) internal marketing
(5) selling old products Ans. (3)
36. Innovation in marketing is same as
(1) motivation (2) perspiration
(3) aspiration (4) creativity
Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI
 (5) team work Ans. (4)
37. Personal loans can be canvassed among
(1) salaried person (2) pensioners
(3) foreign nationals (4) NRI Customers
(5) Non-customers - Ans 1

Compiled by Sanjay Kumar Trivedy, RSTC, MUMBAI