Briefly discuss the marketing mix in banking sector in Bangladesh

Recently, banks are in a period that they earn money in servicing beyond selling money. The prestige is get as they offer their services to the masses. Like other services, banking services are also intangible. Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. These intangible services are shaped in contracts. The structure of banking services affects the success of institution in long term. Besides the basic attributes like speed, security and ease in banking services, the rights like consultancy for services to be compounded are also preferred.

Price:

The price which is an important component of marketing mix is named differently in the base of transaction exchange that it takes place. Banks have to estimate the prices of their services offered. By performing this, they keep their relations with extant customers and take new ones. The prices in banking have names like interest, commission and expenses. Price is the sole element of marketing variables that create earnings, while others cause expenditure.

While marketing mix elements other than price affect sales volume, price affect both profit and sales volume directly.

Banks should be very careful in determining their prices and price policies. Because mistakes in pricing cause customers’ shift toward the rivals offering likewise services.

Traditionally, banks use three methods called “cost-plus”, “transaction volume base” and “challenging leader” in pricing of their services.

Distribution:

The complexity of banking services is resulted from different kinds of them. The most important feature of banking is the persuasion of customers benefiting from services.

Most banks’ services are complex in attribute and when this feature joins the intangibility characteristics, offerings take also mental intangibility in addition to physical intangibility. On the other hand, value of service and benefits taken from it mostly depend on knowledge, capability and participation of customers besides features of offerings. This is resulted from the fact that production and consumption have non separable characteristics in those services.

Most authors argue that those features of banking services make personal interaction between customer and bank obligatory and the direct distribution is the sole alternative. Due to this reason, like preceding applications in recent years, branch offices use traditional method in distribution of banking services.

Promotion:

One of the most important elements of marketing mix of services is promotion which is consist of personal selling, advertising, public relations, and selling promotional tools.

Personal Selling:

Due to the characteristics of banking services, personal selling is the way that most banks prefer in expanding selling and use of them.

Personal selling occurs in two ways. First occurs in a way that customer and banker perform interaction face to face at branch office. In this case, whole personnel, bank employees, chief and office manager, takes part in selling. Second occurs in a way that customer representatives go to customers’ place. Customer representatives are specialist in banks’ services to be offered and they shape the relationship between bank and customer.

Advertising:

Banks have too many goals which they want to achieve. Those goals are for accomplishing the objectives as follows in a way that banks develop advertising campaigns and use media.

1. Conceive customers to examine all kinds of services that banks offer

2. Increase use of services

3. Create well fit image about banks and services

4. Change customers’ attitudes

5. Introduce services of banks

6. Support personal selling

7. Emphasize well service

Advertising media and channels that banks prefer are newspaper, magazine, radio, direct posting and outdoor ads and TV commercials. In the selection of media, target market should be determined and the media that reach this target easily and cheaply must be preferred.

Banks should care about following criteria for selection of media.

1. Which media the target market prefer

2. Characteristics of service

3. Content of message

4. Cost

5. Situation of rivals

Ads should be mostly educative, image making and provide the information as follows:

1. Activities of banks, results, programs, new services

2. Situation of market, government decisions, future developments

3. The opportunities offered for industry branches whose development meets national benefits.

Public Relations:

Public relations in banking should provide;

1. Establishing most effective communication system

2. Creating sympathy about relationship between bank and customer

3. Giving broadest information about activities of bank.

It is observed that the banks in Turkey perform their own publications, magazine and sponsoring activities.

Selling Promotional Tools:

Another element of the promotion mixes of banks is improvement of selling. Mostly used selling improvement tools are layout at selling point, rewarding personnel, seminaries, special gifts, premiums, contests.