Conceptual Frame work of Marketing Mix

CHAPTER TWO

Conceptual Frame work of Marketing Mix

Marketing for Banks

Marketing is a total system of business activities designed to Plan, Price, Promotion and distribution satisfying goods and services to present and potential customers. According to the official definition of the American Marketing Association Marketing is the performance of Business activities that direct the flow of goods and services from producer to customer or user.

The concept of Banks Marketing has been defined by various Banks Marketers as that part of management activity that seeks to direct the flow of banking service profitability to selected customers. The adoption of the marketing concept will recognize that Banks Customers are changing in terms of their wants, needs; desires, expectations, and problems Banks must define these in explicit terms and then evaluate their offering in customer’s terms. That is satisfying customers’ needs at a profit to the Banks.

Marketing Mix Adopted by the Banks

Marketing mix is the mixture of controllable marketing variables that the firm uses to pursue the sought level of sales in the target market.

We cam say that the 4P’s are interrelated and must be blended into one integrated whole to satisfy some target markets needs and performances. So, marketing mix is a set of product, price, promotion and place which are interrelated.



The Banking Product
The products of Banks are essentially services. Any satisfaction the customer gets from the performance of the service rather than from the ownership of goods. Banks are in the Business of marketing cash security, cash accessibility, monetary transfers and time to enable customers wants to be satisfied to day without waiting until tomorrow when their own savings are higher. So, Banking product means services, which are able to satisfy the present and potential customers. Banks offer the following services.

a)   Deposits

1.     Current Account

2.     Saving Account

3.     Short term deposit

4.     Fixed deposit receipt

5.     Ajibon pension scheme

6.     Double benefit scheme

7.     Mashik munafa prakalpa

8.     Special savings scheme

b)   Credit facilities

1.     Cash  credit (Hypo)

2.     Project Loan

3.     Working capital loan

4.     Export loan

5.     Commercial loan

6.     Small and Cottage industry loan

7.     Lease finance

8.     Staff loan

9.     Various credit scheme

I.          Consumer credit scheme

II.        Small loan project

III.      Doctors credit scheme

IV.     Rural credit scheme

c)   Foreign service (Export, Import)

d)   Banks Remittance (DD, TT)

Product Strategy

Customer Product	Existing	New
Existing	Market Penetration	Market Development
New	Service/ Product Development	Diversification

There are four alternative planning product strategies.

Market Penetration

Offering more existing service to existing customer or client, that is market penetration Banks are offering more service to existing customers. 

Market development

Offering more existing service to new client that is market development tries to attention new client.

Service/ Product Development

Development New services/ Products to existing customer what is service/ product development. Banks are following this strategy.

Diversification

Develop new service for new customers, that is, diversification. Bank has more diversify products to new customer. 

The Banking Price

Banks interest rate means Banking Price. Price is important since it represents the only element of marketing mix that creates revenue. The Banking system does not in fact price all its services. Since some are offered free to customers. The most important prices in the Banking system relate to interest rates. The government controls basic interest rates.

BANKS provides various interests to deposits and receiving interest from various creditors which are showed in the table:

Types of Product/service	Rate of interest
Current account	0%
Saving account	6.5%
Short term deposit	6.0%
Fixed deposit receipt	7 to 10%
Cash credit loan (Hypo)	14.5%
Project loan	14.5%
Working loan	14.5% - 15%
Various credit scheme	15%
Consumer Credit Scheme	14.5%
Small loan scheme	14.5%
SOD Against Earnest Money	14.5%
SOD Against PAD	14.5%
SOD Against LTR	14.5%
SOD Against SS	14.5-15%
SOD Against work order	14.5%
SOD Against SP	12.5%
Banks Remittance (DD. TT)	0.1%

The Banking Promotion

The term promotion is used to refer to the use of persuasive information which in conjunction with other elements of marketing mix, relates to the target market. The Banks has to decide how information about the organization and its services will be disseminated. Four elements of the marketing communications mix are generally recognized.

Place (The Banking channel of distribution)

Channel of distribution performs all of the activities to move a product and its title from production to consumption. Some private Banks Ltd. in Bangladesh are following channel of distribution, which are shown below:

Some of the private Banks Limited in Bangladesh are using credit cards, Banks branch etc. to provide Banks service to customer. But Bank provides their service through Bank branch.