Download - JAIIB Module -D
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PRINCIPLES & PRACTICESPRINCIPLES & PRACTICESOF BANKINGOF BANKING
FORJAIIB
Module-DMarketing of Banking Services
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MARKETMARKETNot necessarily a geographical area, aplace where goods can be sold or bought.
Area wisemarket
Local , Regional , National or globalmarket
Productwise
Commodity, share, Bullion, realestate, retail loan markets
Transaction wise
Cash/spot, future market
Volume
wise
Retail Or Whole sale market
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MARKETING
Marketing is the process of determiningconsumer demand for a product or service,
motivating its sale and distributing it intoultimate consumption at a profit
A management function- needanalysis, product, sale & distribution
A Business Philosophy-customer focused-profit oriented.
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Selling & MarketingSelling & Marketingselling is anoperational activity
It is a concept includesneed analysis, product dev,consumptions & satisfaction
It is product focused It is customer focused
It is seller oriented It is buyer/ customeroriented
It encases profitableopportunity
It is buyer need oriented
It aims earn profitby maximizing sales
It aim at earning profit bymax.customer satisfaction
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S.No. Physical Goods Services1 . Tangible Intangible
2. Homogeneous Heterogeneous3. Product and distribution
separated fromconsumption
Production, distributionand consumption resimultaneous process
4. A thing An activity5. Core value produced in
factoryCore value produced inbuyer-seller interaction
6. Customers do notparticipate in theproduction process
Customers participate inproduction
7. Can be kept in stock Cannot be kept in stock
8. Transfer of ownership No transfer of ownership
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Market MixMarket MixMarketing mix is a set of marketing toolsused to pursue marketing objective.These are 4Ps& 4Cs Product:- variety, quality, features, brand etc Price:- list price, discounts, payment period Promotion:- advertising, sales force, PR,DSA Place:- channels, coverage, locations,
inventory, transport Customer need Cost to customer Convenience
communication
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Consumer behaviorConsumer behavior
Physiological needs- food, drink, sleepSafety needs-protection & economic
securitySocial needs-friendship, affection, loveEsteem need- recognition, status &
successSelf-actualization- self fulfillment
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Financial position & Banking NeedsFinancial position & Banking NeedsStage financials Needs
YoungBachelor
High income-low liabilities
Credit card, auto loan,low cost banking.
Half Nest(married & young kids
Low liquidity-high needs
Mortgage loan, ODCredit card, durableloans
Full Nest(married & adult kids
High liquidityHigh savings
Investment, FD, flexideposit
Empty nestSr. citizen
Reducedincome
Social security & reverse mortgage loan
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PRODUCT A product is anything that can be offered
to a market for attention, acquisition, useor consumption that might satisfy a wantor need
PRODUCT PERSONALITY
THE CORE features
THE ASSOCIATED FEATURESTHE BRAND NAME & LOGOTHE PACKAGE AND LABEL
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PRODUCT PLANNING
The process of product planning consistsProduct Line, Product Mix, Branding,
Packaging and New product development.
PRODUCT LIFE CYCLEIntroduction, Growth, Maturity, DeclineThe product Life cycle operates at threelevels product level, product sub category,brand level.
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0
510
15
20
25
30
35
40
45
50
Intro. Growth Maturity Decline
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NEW PRODUCT DEVELOPMENTIdea ScreeningConcept TestingProduct DevelopmentTest MarketingCommercial Launch
DIVERSIFICATIONConcentric DiversificationHorizontal Diversification, forward/backwardConglomerate Diversification- Additional
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BRANDINGLine ExtensionBrand ExtensionMulti brandsNew Brands
PACKAGINGPrimary PackageSecondary PackageShipping Package
LABELLINGIdentify the product or brandDescribing informationPromoting the product through 'attractivegraphics'
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PRICING
Price is the amount charged for productor services or sum value of all the valuesthat consumers exchange for the benefits
or having or using the product or serviceDifferent forms - Goods bought, hirecharges, tution feesDynamic Pricing - Varying pricesFlexibility
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OBJECTIVE OF PRICINGProfitSurvivalMarket ShareCash Flow
Status QuoProduct QualityCommunicating ImageShort term/Long term
Consideration for setting PRICINGCost BasedValue Based
Competition Based
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PRICING METHODSMark up Pricing :Std. mark + Total cost
Absorption cost Pricing : Margin+ Total CostTarget Return Pricing : Return Rate + costMarginal cost Pricing : Full variable cost + varying Fixed cPerceived Value Pricing : Customer satisfactionValue Pricing :to make feel High value at low priceGoing Rate Pricing : Market price
Auction Type Pricing :English Auctions :One seller many buyer
Dutch Auctions :Many seller one buyer or vice versaSealed Bid Auctions: one bid by one seller withoutknowing others price
Group Pricing . : concession for bulk purchase
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Functions of distribution channelsMarket informationPromotion
ContactMatchingNegotiationProduct informationPhysical distributionFinancing
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Characteristics banking productsIntangibilityInseparability
VariabilityPerishability
Client relationshipBranches & Other channelsTele-banking
ATMsComputerizationPlastic Cards
Virtual branches and automated video bankin
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Intermediaries in banking servicesDSA
Automobile DealersMerchant establishmentsPhysical distribution
Transportation
WarehousingInventoryTasks of physical distribution
Forecasting
Order processingInventory management StorageProtective packaging
Transportation
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PromotionRole of promotion
PersuasionInformReminding
Reinforcing
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Promotion mix
AdvertisingPersonal
selling
SalesPromotion
PublicRelations
DirectMarketing
Blended Mix of Promotion Tools
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Promotion mix strategiesPush strategyPull strategy
Factors influencing promotion mixTypes of product/marketBuyers readiness stagePLC stage
Promotion mix integration