In this article we will discuss about Marketing Strategies in Banks:- 1. Concept of Marketing Strategy 2. Nature of Marketing Strategies 3. Formulation 4. Process 5. Types 6. Service Quality in Commercial Banks 7. Essence of Bank Marketing Strategy 8. Service Quality in Commercial Banks 9. Strategic Planning in Banks.

Concept of Marketing Strategy:

Strategy refers the action plan to determine, reveal define and implement the course of action to achieve the objectives and reach the predetermined objectives and goals. Strategy is based on situation analysis and the objective of the company. It is actually the way of implementing the policy.

From the conceptual and functional point of view strategy can be defined as the action plan for the systematic implementation of the corporate policy in order to achieve the predetermined goals and objectives coordinating the efforts in a competitive environment, ensuring optimum allocation of resources and the best use of the manpower.

Strategy is influenced by Environmental factors. Potential resources, Internal consistency and Necessary degree of risk.

A strategic decision generally entails risks of the first magnitude since it defines and limits the range of freedom for more detailed decisions. In the choice of a strategy, these risks are complicated by uncertainty of counter-strategies of competitors and unpredictable shifts in consumer tastes and performances.

A strategist in business should therefore, be capable enough to foresee unexpected uncertainties just like a military strategist. Thus a good strategy should be backed by a product planning of both programme and resources.

The ultimate aim of any strategy is to reach the goal. Hence the strategists should bear in mind that the goals should be reasonably specific and performance in achieving them should be measurable.

Marketing strategy is the complete and unbeatable plan designed specifically for attaining the marketing objectives of a firm. A marketing mission and objectives tell us as to where we want to go and marketing strategy provides us with the grand design for reaching out there. Mc Carthy says, “Strategy is the all important part of marketing. The one time planning decision – the most crucial decision that determines what business the company is in and the general strategy, it will follow may be more important than has ever been realized.”

There are three generic strategies for achieving success in the competitive market place the first of these is to gain control over the supply or distribution, the second competitive cost advantage and the third product differentiation; marketing as a discipline is critical component of all these three strategies.

Marketing performs a boundary role function in the firm’s selection of an appropriate strategy; marketing spares the customer interface and provides the assessment of needs, which must ultimately guide all strategy development. Michael E. Porter says that “Marketing strategy has mainly one aim to cope up with competition; there are five major and vital forces that decide the nature and intensity of competition – the threat of potential entrants, bargaining power of customers, bargaining power of suppliers, threat of substitute products and competition among existing firm.”

The collective strength of these forces determine the ultimate profit potential, of an industry; the strategist’s goal is to find a position in the industry where his company can best define itself against these forces or can influence them in his favour; strategy can be viewed as building defenses against competitive forces. Marketing strategy stands for competitive marketing actions that are bound to evoke a response from competition.

That is why a successful marketer needs to have a comprehensive strategy to tackle competition at any cost. However, one cannot go to the extent of any unless one works according to a plan and that is competitive strategy for thumping success in marketing. It is but, therefore, natural that competitive strategy has to be one that will evoke the much sought after competitive advantage.

Having given the competitive advantage, the said strategy should give a sustainable competitive edge. It warrants the thorough investigation and analysis of competition before one hope to have a competitive advantage. Thus competitive investigation, scanning and analysis consist of two things namely, the long-term profit opportunity and own’s the own competitive position.

Any marketing strategy to be worth calling as successful or effective must enjoy certain extras, which can be called as essentials or requisites of it.

Nature of Marketing Strategies:

The nature of marketing strategies can be explained as follows:

(i) They are Dynamic:

The concept of marketing strategy is relative as it is designed to meet the changing demands of a situation. Each situation and event needs a different strategy that is why strategies are revised and recast very frequently to cope up with the changes in a given situation or event.

(ii) They are Futuristic:

A marketing strategy is forward looking. It orients towards future. A marketing strategy is designed to bring out the organization from a ditch of digression to the path of progress for better change in the coming times.

(iii) They are Complex:

A marketing strategy is a very complex plan impounding in its compound other plans or firms of plans which area must to achieve the organizational goals. It is a compendium or complex of plans within plan out beat. The strength and vitality of others in the line is allied activities.

(iv) They provide Direction:

Marketing strategies provide a set direction in which human and physical resources will be allocated and deployed for achieving organizational goals in the face of change environmental pressure, stress and strains and constraints and restraints.

(v) They are all Covering:

Marketing strategies involve the right combination of factors governing the best results. In fact strategic planning warrants not only the isolation of various elements of a given situation but a judicious and critical evaluation of their relative importance.

(vi) They are a Link Between the Unit and Environment:

The strategic decisions that are basically related with likely trends in the changing marketing changes in Govt.- Policies, technological developments, ecological change over, social and cultural-overtones. Then the over-changing environment which is external to the organization has impact on it because unit is the sub-systems of supra-system namely environment.

(vii) They are Interpretative:

Marketing strategies are the interpretative plans formulated to interpret and give meaning to other plans in the spot-light of a specific situation or situations. They demand an adjustment of plans in anticipator of the reaction of those who will be influenced. Strategies decisions are the result of a complex and intricate process of decision-making.

(viii) They are Top Management Blue – Print:

Marketing strategies their formulation is the basic responsibility of top management it is because, it is management that spell out the missions, objectives and goals and the policies and strategies are the way to reach them. Thus top management is not only to say where to go but how best to go the terminal point.

Formulation of Marketing Strategy:

Marketing strategy is not a nebulous idea. It is well-outlined game plan. And there are definite ways of formulating it.

Basically, formulation of marketing strategy consists of two main steps:

(i) Selecting the Target Market and

(ii) Assembling the Marketing Mix.

The essence of the marketing strategy of any firm can be grasped from the firm’s target market and its marketing mix. The target market shows to whom the firm intends to sell the products; the marketing mix shows how the firm intends to sell. Together, they constitute the marketing strategy platform of the firm.

(i) Selecting the Target Market:

To say that target market selection is a part of marketing strategy, development is an understatement. If does not fully bring out the import of the inseparable linkage between the two. When the selection of the target market is over, an important part of the marketing strategy of the firm is already determined, defined and expressed.

Reliance industries, entered the Indian textile market in 1967, it found that the textile market of India consisted of many distinct segments, spread over the entire rural and urban India. It was Rs. 5,000 crores market segments with cotton textiles taking more than 70 per cent share, and the rest shared by silks and synthetics. Reliance was coming out with a costly product-high quality synthetic fabric, saris, suiting and dress materials. Reliance had to select its target market for this product.

It spotted ‘the well to do and fashion loving upper middle class of urban India’ as its target market. The decision came through a combined process of analytical exercise and executive judgment. Of the many distinct segments, the company deliberately chose the one that was most profitable and was also most suited to its offer.

(ii) Assembling the Marketing Mix:

Researcher said earlier that target market and marketing mix together constitute the marketing strategy platform of the firm. Assembling the marketing mix means assembling the 4 Ps of marketing in the right combination. Involved in this process arc the choice of the appropriate marketing activities and the allocation of the appropriate marketing effort to each one of them.

The firm has to find out how it can generate the best sales and make profit. It plans different marketing mixes with varying levels of expenditure on each element and tries to figure out the effectiveness of each combination in terms of the possible sales and profits. It then chooses the combination that is best according to its judgment.

Thus, deciding the weightage to be assigned to each of the 4 Ps is the crux of marketing mix formulation. In a given situation, one firm may formulate its marketing mix with maximum weightage on the product as such, banking on the technological superiority and functional benefits of its product. It may provide average weightage to price, distribution and promotion. It means the firm puts in extra effort and investment on product.

It may opt for a better design or an improved formula and bring out a product with a significant specialty. And this superior product forms the core of its marketing mix.

Process of Marketing Strategy:

Planning of the marketing activities is an essential exercise for the company to expand its area of operation. The company should look into the internal growth opportunity and plan its strategies accordingly.

The company can fill the gap in three ways:

(i) Identifying the intensive growth opportunities and planning for market penetration, market development and product development strategy.

(ii) Identifying the integrative growth opportunities with a view to build or acquire the related business for strengthening the principal mission. The company may develop plans at this stage for backward and forward integration and horizontal integration.

(iii) Looking for the diversification of growth opportunities, which provide an attractive scope of business. Such areas of business may not necessarily match with the current business. The diversification growth opportunities can be planned by the company in view of the concentric, horizontal and conglomerate changes in the business. The Market Opportunity Probability Matrix shown in figure no. 2.3 which explains illustrates the planning of markets versus products in different environments.

The company, following the concentric strategy seeks new products that have technological and/or marketing synergies with the existing product-lines, even though the products may appeal to the new class of customers. In developing the conglomerate strategies, the company attempts to seek new business, which has no relevance to the existing technology, products or markets.

The business opportunities can be listed and categorized as per the attractiveness, economic gains are high as well as there exists a high probability of success. On the contrary to this alliance, the company may not hurry up in investing time and money to realize such opportunities.

The company needs a strong driver (pool of effective managers) to implement the marketing plan. The marketing manager should be proactive to the market demands, customer needs, and complaints and redressal. Besides, the monitoring and evaluation system need to be developed and ensured by the company towards quality control, human resources deployment, task allocation and developing ad-hoc strategies.

However, the goal of the company should be to achieve the optimal customer satisfaction. The customer and channel feedback need to be taken periodically and analyzed. The points of change in the management strategy should be inducted under intimation to the target customers or channel managers.

Such endorsement on the feedback in changing the strategies would develop confidence in the company and encourage participatory dynamics. The company while implementing the marketing plans should keep in mind the related objectives other than the customer satisfaction, are the long-term customer retention and augmenting the market share of the company’s goods and services.

The company should account for the 4Cs:

(i) Comprising Customer needs.

(ii) Cost of Customers,

(iii) Convenience and

(iv) Communication to the customers while developing the marketing plans.

Marketing plan is an important tool for developing profits oriented approaches and also a referral document for the business organization all through its existence in the market. This document has to be prepared and used scientifically.

It contains many sections as under:

(i) Executive summary

(ii) Business profile

(iii) Existing marketing situation

(iv) Marketing objectives

(v) Opportunities and strategies analysis:

a. Target market, Positioning, Product-ling Price,

b. Distribution, Salesforce, Service Advertising,

c. Sales promotion Research & development,

d. Marketing Research Feedback and control, Re launch

(vi) Action programme

(vii) Problems foreseen

(viii) Alternative marketing plans

(ix) Profit statement

(x) Monitoring and control.

The executive summary should contain the marketing objectives, thrust areas, action programme and future perspectives. It is used as a brief sketch of the organization. The main body of document should begin with the business profile indicating the results of baseline survey, product, demand potential, proposed segmented markets, comparative advantages of the product and future perspectives.

The marketing situation needs to be analyzed with the following theme of the plan document focusing on the competition scenario, product network, supply mechanisms, price structure. Consumer awareness, trade brick-bats, promotional pattern adopted by the competitors. The marketing opportunities and strategies constitute the most dynamic part of the document and need to be dealt in detail in the following order.

The strategies must explain the market-mix pattern, resource allocation, profit planning, product diversification plan etc. However, an observation on the anticipated problems of marketing would be beneficial to add the plan document after the strategies are discussed. The document must also endorse the alternative strategies in view of the problems foreseen. The profit plans need to be described in the plan document, subject to regulations and should never be considered as a liaises faire.

Hence, it is necessary to build up an effective monitoring and control mechanism in the business. This would help the manager in administering the business in revising the contingency plans.

Types of Marketing Strategy:

1. Product Strategy:

Product is the first variable in the marketing as all activities of a company depend on products. According to Alderson, “Product is a bundle of utilities consisting of various product features and accompanying services.” The bundle of utilities is composed of those physical and psychological attributes that buyer receives when he buys the product and which the seller provides by selling a particular combination of product features and associated services.

Professor Kolter defined, “A product is anything that can be offered to a market for attention, acquisition, a bundle of physical, service and symbolic use for, consumption that might satisfy a want or need.” In simple words it could be said that a product, therefore, may be regarded from the marketing view point a bundle of benefits which are being offered to the consumer.

Importance of Product in the Marketing Activities:

The main objective of all marketing activities is to satisfy the customers. It is the philosophy of the modern concept of marketing. If the first commandment in marketing is to know the customer, the second is to know the product/service. It plays a central role in the activities of all organizations, for it is the medium through which they seek to achieve their dual objectives of maximizing both consumer and organizational satisfaction. A product/service is the bundle of benefits or satisfaction offered to a customer. That is why a good salesman does not sell well.

He sells satisfaction or benefits. No marketing programme will be prepared if there is no product because planning for all other marketing tool as price, place and promotion etc., is done on the basis of the nature, quality and the demand of the product. If the product/service goes wrong, everything else founders. The product/service must contain qualities, which can satisfy the customer.

It requires continuous and sincere efforts on the part of the producers or marketers to know their product through marketing research and planning and to improve it, if it is somewhere lacking. In marketing, as elsewhere, “nothing succeeds like success.”

A successful product/service may be able to generate that extra amount of enthusiasm among the sales force that is so important to marketing organization. It may also allow the- marketer more flexibility and independence in pricing distribution and promotion – the other three elements in the marketing mix. India is a vast seller’s market (when demand outruns supply), customers have no option in the choice of the product.

Professor Kotler views Indian Market, “Here the choice is always limited. Here you get a camera, it works, so you are satisfied. But unless you have competition you do not really know how improved a product you can get.”

The selected banks i.e. State Banks of India and Central Bank of India provides the following products (schemes)/ services to their customers.

Products (schemes)/services offered by State Bank of India:

(i) Savings Bank Account Scheme

(ii) Current Account Scheme

(iii) Multi option Deposit Scheme

(iv) Term Deposit Scheme (TDR)

(v) Special Term Deposit Scheme (STDR)

(vi) Recurring Deposit Scheme

(vii) SBI Gold Deposit Scheme

(viii) Liquid Term Deposit Scheme

(ix) Savings Plus Scheme

(x) Personal Loan Scheme

(xi) Car Loan Scheme

(xii) Educational Loan Scheme

(xiii) Housing Loan Scheme

(xiv) Loan too Pensioners Scheme

(xv) Scoom-Scheme for Purchase of Two Wheelers

(xvi) Personal Loan against Equitable mortgage Scheme

(xvii) Kisan Credit Card

(xviii) Kisan Mitra Jama Yojana

Products (schemes)/services offered by Central Bank of India:

(i) Savings Bank Account Scheme

(ii) Current Account Scheme

(iii) Money Multiplier Deposit Scheme

(iv) Khazana Deposit Scheme

(v) Central’s Vriddhi Deposit Scheme

(vi) Monthly Interest Deposit Receipt Scheme

(vii) Quarterly Interest Deposit Receipt Scheme

(viii) Recurring Deposit Scheme

(ix) Central’s Variable Installment Scheme

(x) Cash Certificate Scheme

(xi) Kisan Krishi Dhan Deposit Scheme

(xii) Cent Buy Scheme

(xiii) Cent Computer Scheme

(xiv) Personal Loan Scheme – To employees of Corporate Clients

(xv) Cent Trade Scheme

(xvi) Cent Vidyarthi Scheme

(xvii) Housing Finance Scheme

(xviii) Central Kisan Credit Card (CKCC)

2. Price Strategy:

Price is the second important element (next to product/service) of the marketing mix of a company and is closely related to the other elements. According to Kotler, “Price is the only element in the marketing mix that produces revenue, the other elements produce costs.” The main objective of the firm to earn optimum profit depends very much upon the correct price decision. Now the question is that what is price? Price has been rightly described by Williamson as the very nerve centers of the commercial process and Joel Dean as more an art than a science.

Price may be defined as the value of product attributes expressed in monetary terms which a consumer pays or is expected to pay in exchange and anticipation of the expected or offered utility.

Price, value and utility are related concepts. Price is value expressed in terms of rupees and paisa, or any other monetary medium of exchange. Utility is the attribute of an item that makes it capable of satisfying human wants. Value is the quantitative measure of the worth of a product to attract other products in exchange. Stanton and Futrell say, “Price is the amount of money and or product that arc needed to acquire some combination of another product and its accompanying services.”

Carey defined, pricing as “The art of translating into quantitative terms (dollars and cents) the value of the product to customers at a point of time.” In simple words, price represents the cost that the buyer must accept in order to obtain the product plus other attributes such as delivery, installation, credit, return, privileges, after sales servicing etc.

Importance of Price in the Marketing Activities:

Pricing is the function of determining product/service value in monetary terms by the marketer before it is offered to the target consumes for sale. This involves considerations of the profit margin, the cost, the possibility of sales at different prices and the concept of the right price. It plays a greater role in the marketing strategy of a company to achieve the objectives i.e. higher sales volume, higher market share, higher return on investment.

A research study revealed that a very large number of companies 83 per cent ranked pricing as most important variable, next only to product, which affected the success or failure of the enterprise, but another study shows the opposite, on the basis of the result of a survey of 200 manufacturers of industrial and consumer goods in USA, “It appears that business management did not agree with the economic views of the importance of pricing-one half of the respondents did not select pricing as one of the five most important policy areas in their firm’s marketing success.”

Even then, there is no denying the fact that price is having its own importance in different areas. The price (Interest rate) of various products (schemes)/services have been given in chapter-v under the banner of Analysis of various schemes of selected banks.

3. Promotion Strategy:

Promotion is one of the four elements of marketing mix and acts as a powerful tool of competition providing the cutting edge to this entire marketing programme. That is why promotional strategy is an important element in overall marketing strategy. The marketer uses promotion to stimulate the buyer and obtain a desired response.

It has rightly been said that nothing happens until somebody sells something i.e. the marketing manager has to take steps to inform customer about the availability of products/services, he has to persuade customers about the distinctive characteristics of products, and he has to influence customers to its products. Promotion is concerned with the activities of informing, persuading and influencing people to buy products/services of a company.

According to Jerome Mc Cathy, “Promotion is any method of informing, persuading or remanding consumers-wholesalers, retailers, users or final consumers-about the marketing mix of product, place and price which has been assembled by the marketing manager.”

It is an activity that helps to sell an item. It is the coordination of all sellers’ initiated efforts to set up channels of information and persuasion to facilitate the sale of a product, or service, or acceptance of an idea. Thus, promotion is a marketing activity, which consists of those activities that are designed to bring a company’s good or service to the favorable attention of customers.

Many people consider selling, marketing, promotion and sales promotion as synonymous, whereas selling is only one of the components of marketing. It is concerned only with the transfer of title, or only the activities of sales people and does not include advertising or other methods of stimulating demand.

Promotions includes advertising, personal selling, sales promotion and other selling tools. Promotional activity is basically an exercise in communication. Executives who understand something of the theory of communication should be able to better manage a promotional programme in the firm. Promotion encompasses all the tools in the marketing mix whose major role is persuasive communication.

Hasty and Will classified the objects of promotion under three basic heads as follows:

(i) Demand Objective:

The underlying idea here is to influence, stimulate, maintain and create demand for a product.

(ii) Communication objectives:

Which aim at creating awareness, providing information to the customers and retailers about product features, where from the products can be obtained and what the products are capable of doing or achieving brand preferences.

(iii) Specific Objectives:

Performance objectives which provide specific information about a product and which influence the decision of purchasing by the customer.

Importance of Promotion in Marketing Activities:

Promotion influences to a large extent the consumer’s and creates primary demand in case of existing product. Marketing professionals use the terms for the combination, types and amounts of promotion used by a product’s market. It is a means of moving forward the offering of a company to intermediate and final consumers. Advertisement, sales promotion and personal selling generally constitute the promotional mix with in the marketing mix of a company. Perfect coordination among the three types of promotional activity can alone secure maximum effectiveness of the promotional strategies.

The essential purpose of promotional activity is to change both the shape and location of demand curve of a manufacturers/sellers product.

Promotion activities arc helpful in the following situations:

(i) Competition:

There are many products of almost similar type. That is because of competition among the producers in the same industry. In this situation, promotional programme helps him in providing an extra ingredient in the bundle of utilities which is offered in this product.

(ii) Knowledge about the New Product:

These days, product life cycle is very fast because of modern technology. A large number of products are coming into the market place. It is by promotion that knowledge about them can be communicated to potential customers. A group of notable experts says, “Even the most-useful and want satisfying product will be a marketing failure if no one knows it is available. A basic purpose of promotion is to disseminate information to let potential customers know.

(iii) Long Distance Producers & Customers:

Promotion is one of the important tools through which distance between producers and consumers may be reduced. It is not enough to communistic only with the ultimate consumers or industrial users. It becomes essential that the middlemen, too, be informed about product, wholesalers, in turn, must promote the products to retailers, and retailers must communicate with consumers.

(iv) Appeal to Market Segments:

Marketers who follow market segmentation strategy create specific products and/or follow specific price and distribution programme to suit specific means of telling different segments that they are keen on serving their interests most.

(v) Shortage of Products:

During the period of shortage, advertising can stress product conservation and efficient uses of the product. For example- After the Gulf War, in India 1991 a high percentage got motivated to reduce their petrol consumption because of the advertisement campaign.

(vi) Economic Recession:

During the economic recession, the sales of the products are reduced. There are no major problems in product planning, channels remain essentially the same, and the Price structure is basically unchanged. In this situation promotional activities are helpful to maintain the sale.

In addition, the promotion provides the employment to large number of persons resulting in high standard of living. The table no.2.1 and figure no.2.5 have shown the advertisements and publicity expenditure of the selected banks i.e. State Bank of India and Central Bank of India.

4. Place Strategy:

After production the next problem faced by a producer is that of distributing and selling. Because production is made to satisfy the needs of the consumers so it must reach the consumers for whom it is made. Thus the way through which goods flow from producer to the consumer is called Distribution. It involves planning, implementing and controlling the physical flow of materials and final goods from points of origin to points of use to meet customer needs at a profit.

The number of outlets should be chosen to ensure that the products are stocked enough to meet customer needs. It is better to choose a smaller number of outlets when the stock position is not enough to spread out, and concentrate in a limited area. The most important element of the strategy is to maintain a grip on the market.

This is possible only if the company maintains the consumer franchise through branding, advertising, sales promotion, consumer research etc. A mere distribution network alone cannot achieve this control on the market. Contracts or agreements with the distribution outlets should be well throughout. It may be worthwhile to provide some support to the distributors though advice on merchandising techniques, display, stock rotation, warehouse layout etc.

Top management should take interest in the distribution function by evolving the right policies and influencing the marketing function. The organization structure may also require a review to ensure that all activities of the distribution management come under one manager.

Importance of Distribution in the Marketing in the Marketing Strategy:

Distribution plays an important role in the area of marketing. It is an important marketing activity, which facilitates the movement of products from the initial producer to the ultimate consumers. The issue of distribution is important because whether a company’s distribution is adequate or inadequate will determine how much of the product actually reaches the consumer or the end user, Guirdham says, “The distribution system has to perform to functions, it make sure that demand, thus created is matched by adequate and timely supply.”

The distribution system creates a value added to almost all products, the value added in distribution in the case of several consumer articles is significant as compared to the value added during manufacture.

Distribution system can be classified into two ways:

(a) Channels of distribution and

(b) Physical Distribution.

Channels of distribution refer to various intermediaries who help in move in the product from producer to the consumer.

Physical distributions refer to the physical handling of goods and assure maximum customer service. It aims at offering delivery of right goods at the right time and place to customers.

State Bank of India had 8888 branches in 1996-97, which increased year by year, and reached to 9078 in the year 2000-01, an improvement of 190 or 2.09 per cent number of branches. In the case of Central Bank of India has shown a fluctuating trend. In the year 1996-97 there was 3087 branches which started tumbling down to 3079 and 3084 in the next two years i.e. 1997-98 and 1998-99 respectively but thereafter it further went up to 3097 in the year 2000-01.

5. Promotion Strategy:

In a service industry like banking, promotion assumes all the more important position because what is really should is “abstract” thing. Service with the interest rates, range of products etc. being more or less same, the service given through proper promotional channel make all the difference between two banks.

Promotion can thus mean “communicating with the buyer” (customer), in order to strengthen his attitudes that are favourable to the bank’s offering and to change his attitudes which are unfavourable to the seller. This pre-supposes ensuring that such buyer become satisfied customer of the bank now or later.

(i) Informing/telling/educating potential customer.

(ii) Information existing customer, about new product/service.

(iii) Following up with existing/potential customer for scheme introduced.

(iv) Approaching a new segment of customer, to attract them to promote new scheme.

In the Indian context, in general and in marketing of banking services in particular, deciding the launching of product distribution channel for sales promotion is an important task. In today’s age of cut throat competition, a bank of marketing its services should select its communication tools select its communication tools from advertising, sales promotion, publicity and personal sales.

While advertising has been the tried and tested tool of bank marketing, publicity is an effective tool in banks’ hand. While sales promotion is a direct and effective tool, there cannot be a substitute for personalized service to customer.

Marketing communication is a continuous process and proper communication with internal as well as external customer is crucial to ensure effectiveness of promotional measure in achieving the corporate business goal. The present day banking is totally different than what it was in sixties and seventies. The economy is moving from monopoles or protected state to a free and liberalized market environment where only the effective and efficient will survive.

It is, therefore, absolutely essential to adopt appropriate marketing strategies and use them through an integrated approach. If it is not done, it will be difficult for banks not only to progress but also even to maintain their business position.

Service Quality in Commercial Banks:

One of the major ways in which banks can differentiate a service is to deliver consistently higher quality service than competitors. The key is to meet or exceed the target customer’s service quality expectations. Their expectations are formed by their expectations are formed by their past experiences, word of mouth, and service advertising, The customers choose providers of service on this basis and after receiving the service they, compare the perceived service with the expected service.

If the perceived service falls below the expected service. Customers lose interest in the provider (bank). If the perceived service meets or exceeds their expectations, they are apt to use the provider again. Therefore the service provider needs to identify target customers, wants in the way of service quality.

Clearly, customers will be satisfied if they get what they want, when they want it, where they want it, and how they want it. Still, it is necessary to research the specific customer criteria for any specific service. Thus bank customers may expect on a trip to a bank that they will not wait in line more than five minutes, that the teller will be courteous, knowledgeable, and accurate and that the computer will not break down. Service providers must do their best to identify the expectations of their target customers with respect to each specific service.

This does not mean that the service provider will be able to meet the customer wishes. The service provider faces trade-offs between customer satisfaction and banks profitability. What is important is that the banks clearly defines and communicates the service level that will be provided, so that the employees know what they must deliver and the attracted customers know what they must deliver and the attracted customers know what they will get.

Essence of Bank Marketing Strategy:

Market place is always ruthless confirming the slogan “survival of the fittest”. In the context of consumer unpredictability, it becomes imperative to examine new paradigms in marketing-relationship marketing being one of them. The essence of marketing strategy is to provide the organization with a sustainable competitive advantage in the markets in which it operates.

This requires that the organisation both understands consumer needs and identifies how those consumers can be grouped into different market segments.

Some of the prominent market segments, which can absorb bank credit at relatively highest interest rates, are the professionals, services sector, retail and wholesale trade sector, household sector (individuals). However, borrowers, from these market segments generally do not approach the banks for their credit requirements on their own. Higher their creditworthiness, lesser arc the chances of their “walk in” at a branch for a loan. It is necessary for the banks to canvass more customers from this market segment.

By identifying these segments and selecting target markets, a bank can determine where and against whom it intends to compete. The bank must also establish an appropriate position for its products in the target markets by properly defining the image the bank wishes to create for its products. The products attributes, pricing decision methods of distribution and communication would all seek to reflect the chosen position.

The following diagrammatic representation of marketing mix strategy by Philip Kotler points to the interplay of various factors and players in the market-

Strategic Planning in Banks:

The age of Internet and communication revolution has made available information at the fingertips of the consumers. The consumers now are far better informed. They have numerous choices and are intent on seeking value. The current situation warrants that a customer centric approach be adopted in developing marketing strategy. It does not mean that we can ignore the competitions.

Any strategic planning for marketing the products should take into consideration the present and future competitors as detailed given below:

1. Market share of the bank vis-a-vis its competitors.

2. Positioning of competitors’ products-target group-market segment.

3. Pricing of the products-our vis-a-vis the competitors.

4. Distribution channel.

5. Types of sales promotions and the levels of expenditure.

6. Strengths and weakness of the competitors,

7. Levels of perceived value of the products with the customers.

8. Brand image-ours vis-a-vis competitors.