Report on Marketing Practices Essay Example
Report on Marketing Practices Essay Example

Report on Marketing Practices Essay Example

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  • Pages: 11 (2846 words)
  • Published: March 23, 2018
  • Type: Essay
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The importance of efficient bank marketing has increased as customers are now more concerned about their monetary and financial issues. Bank marketing is necessary because banking products are complex and abstract compared to other services, making it difficult for customers to understand their benefits and differences. Implementing proper marketing strategies is crucial to make customers aware and informed about the benefits and products offered by banks. According to Papal R. K. (2010), bank marketing aims to provide services that satisfy customers' financial needs and wants more effectively than competitors while considering the organizational objective. Marketing helps banks achieve their organizational objectives, and there is no difference between the product and service offerings provided by banks. While bank products like deposits, loans, credit cards, or foreign exchange transactions are tangible, services also include intangible aspects such

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as how they are offered which cannot be measured. In banking service marketing, better service is more important than just a good product.The focus should be on satisfying customer wants and needs.The success of a bank revolves around several factors including its reliance on its customers for its existence.: Bank marketing, Papal R.K.The bank's main objectives are to attract and retain customers, prioritize customer satisfaction, and provide effective services. It also aims to design convenient service facilities for customers in order to deliver total satisfaction. The performance of all bank personnel influences the achievement of this goal. In Bangladesh, the banking industry operates under the supervision of Bangladesh Bank, which is authorized by the Bangladesh Bank Order of 1972 and Bank Company Act of 1991 (Bangladesh-bank.org, 2013). Scheduled Banks in Bangladesh can be classified into State Owned Commercial Banks (Cobs)

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that are owned by the government and Specialized Banks (Sods) established for specific purposes such as agricultural or industrial development. These banks can either be fully or significantly owned by the Government. There are also 30 private commercial banks in Bangladesh, with most being privately owned entities. These private commercial banks can be further divided into conventional banks and Islam Shari-based banks, with conventional banks operating based on interest-based operations in a traditional manner.Islam Shari based banks, in contrast to other banks, adhere to Islamic principles such as Profit-Loss Sharing (PLUS) mode. Additionally, there are 9 foreign commercial banks operating in Bangladesh as branches of overseas incorporated banks. Furthermore, there are 4 non-scheduled banks in Bangladesh: Nanas PDP Nanny Bank, Shortchanging Bank, Probates Kowloon Bank, and Jubilee Bank.

Following the liberation of Bangladesh, most of the country's banks (excluding those incorporated abroad) were nationalized. These nationalized banks were later merged and reorganized into six commercial banks. However, Bubal Bank Ltd. and Attar Bank Ltd. were transferred to the private sector in January 1983.

Over time, several more private commercial banks obtained licenses to operate in Bangladesh. As a result, there are currently thirty Private Commercial Banks (Pubs) functioning in the country. The Oriental Bank Ltd., an Islamic private bank founded in 1987, was renamed CB Islamic Bank Ltd. in 2008. Arab Bangladesh Bank Ltd., founded in 1982, was renamed ABA Bank Ltd.in 2008 and Social Investment Bank Ltd., also founded in 1982, was renamed Social Islam Bank Ltd.in 2009.

Bangladesh currently has thirty private commercial banks that possess the largest amount of total assets and deposits.These private commercial banks dominate the market with their scale and operational performance.
According

to the Annual Report by Bangladesh Bank in 2012, private commercial banks have the highest market capitalization and generate the highest percentage of net income among all bank types in Bangladesh. The table below provides a comparative picture of different bank types including SCABS, PUBS, and FIBS.

Bank Types No of Banks No of Branches Total Assets (Bal TX) Deposits (Bal TX) Net Net.Income (Bin TX)
SCABS 3449 1771.75 1305.02 9.7 4
PUBS

303130< / td >

3965.93< / td >

3092.86< / td >

57.9

Banks in Bangladesh have recognized the importance of marketing strategies. They employ segmentation strategies to target different types of customers, such as reporter customers based on financial strength, credit worthiness, market positioning, reputation, industries, and listed companies; and personal sector consumers based on occupation, income, market demand, geographic concentration. Unlike local Pubs that rarely innovate new products and instead modify offerings based on competitors, financial institutions differentiate their products by analyzing reports, brochures, conducting client interviews and considering information from Central Banks. Factors like lending rate, deposit rate, product maturity, market demand and geographic concentration are also taken into account. The main differentiating factor is the pricing policy which involves lowering the lending rate compared to competitors. Private Commercial Banks commonly use criteria such as pricing policy/lending rate, product maturity and geographic concentration for product differentiation. Advertising media is primarily used for promotional strategies followed by personal selling and public relations to a lesser extent.Banks prefer newspapers as an advertising medium to communicate new offers or updates about existing products and services. TV commercials are widely used by banks for communication, according to a survey. Banks also moderately use outdoor advertising such as billboards and brochures. The table below presents the percentage of banks using different advertising media:

Table 4: Advertising media used by banks
Percentage Use of Advertising Media
100% Newspaper
88% Outdoor Advertising
50% TV commercials

Personal selling is not

extensively or structurally employed in pubs. Personal selling is mainly carried out by relationship managers and branch officers. Only 25% of banks utilize personal selling as a marketing strategy, which involves visiting corporate clients, negotiating rates and presentations, and attending to both corporate and personal banking needs.

The usage of public relations in marketing has been increasing over time. Among the sampled banks, 3% engage in public relations activities to promote their image and products.

In the following section, the marketing practices of four private commercial banks in Bangladesh will be analyzed. Three out of the four mentioned banks are second generation banks - Eastern Bank Limited, EXAM Bank Limited, and The Prime Bank Limited. The fourth bank mentioned is Unman Bank Limited, a third generation bank (Powder B., 2012).The marketing practices of all four banks, including their segmentation, targeting, marketing mix, and SWOT analysis, were analyzed to gain a comprehensive understanding of their marketing strategies. Specifically focusing on Eastern bank limited, their goal is to become the preferred bank and the most valuable financial institution. They have established themselves as a leading private commercial bank in the country with undeniable dominance in corporate banking and the SEEM sector. One key aspect of Eastern Bank Limited's marketing strategy is offering a diverse range of products that target the SEEM sector, corporate sector, and individual consumer sector. Some notable examples of ABLE's products include their corporate banking products such as regular credit products, trade service products, syndicated financing services, cash management solutions; consumer loan and deposit products; SEEM products; ABLE card; ABLE Matriarchs - NOR Banking; and ABLE Internet Banking.The prices and details of ABLE products are as

follows:
- ABLE Jobsharer Loan: Price - 500,000; Loan amount - 500,000; Interest rate - competitive
- ABLE Auto Loan: Price - 350,000; Loan amount - competitive; Interest rate - competitive
- ABLE Travel Loan: Price - 50,000 to 500,000; Loan amount - competitive; Interest rate - competitive
- ABLE Horned Loan: Price - 500,000 to ;Loan amount-ABALE Campus Account ;Interest Rate-initial deposit is TX1000 ,8%
- ABLE personal loan :Price is200k while interest on it is attractive. Tussah loan varies from TX50k-TX150K with discount in the interest rate.
Table5 shows the product and prices of ABEL Place.

The customers can access ABLE services through a network of branches (59), Tams (116), and Kiosks (21) located throughout the country. ABLE has a presence in major cities and towns including Dacha, Chitchatting, Sylphs, Chula, Rajahs, Arrange,and Cox's Bazaar. Additionally ,ABLE Bank offers Visa Electron which allows customers to withdraw cash from the Q-cash ATM network 24 hours a day.

In terms of promotion strategies ,ABLE markets its services through various mediums such as advertising(print media,electronic media,outdoor advertising,and online presence), sponsorship ,and billboards. The market segmentation strategy focuses on geographic and demographic factors as different customer segments require different product lines based on their regions.The main objective is to expand banking services in important cities throughout Bangladesh and provide online banking facilities.

The target audiences include mass market clients ,students executives,and corporate clientThe HRS Manual is accessible on the internal website and provides an overall understanding of ABLE's terms and conditions. ABLE employees have a strong commitment to the organization, and a duty doctor ensures their fitness. Centralized banking reduces conflicts between branches and the head office. However, job descriptions and HRS Accounting are not

organized yet, hindering recruitment benefit matching and turnover calculations. Compensation and Benefits are provided through EZRA and Flexible software with limitations. ABLE has implemented new MIS for manpower reporting. They will expand their Human Resources Information System in the future. A salary survey will be conducted in 2009, and learning & development programs will be maximized through a library establishment and extensive training modules. The lack of competitive salaries contributes to an increasing turnover rate at ABLE.
EXAM Bank Ltd is recognized as an important service industry that contributes to economic development beyond national borders in the modern worldThe marketing mix of EXAM Bank Limited involves a series of strategic planning activities to set objectives and formulate policies. It is a process that determines how the bank can optimally achieve its goals. The marketing mix consists of four major strategies: Product Strategy, Communications Strategy (Promotion), Place Strategy.

In terms of Product Strategy, services are an integral part of banking products and are often inseparable from them. The bank plays a crucial role in designing and delivering these products for branding and selling purposes. Customers tend to associate products with a specific bank rather than viewing them in isolation.

EXAM Bank offers various deposit products such as AY-Wadded Saving Account, Muhammad Saving Account, Muhammad Short Term Deposit, Muhammad Term Deposit (with different timeframes), Muhammad Monthly Income Scheme, Muhammad Monthly Savings Scheme, Muhammad Super Savings Scheme, Muhammad Multi plus Savings Scheme, Muhammad Hajji Scheme, and Muhammad Education Saving Scheme. Additionally, the bank provides investment products including Izard Bill Baa (General), Izard Bill Bat (HUB), Izard Bill Baa (Staff HUB), sat-Manual (BAM), Izard (ELF), House Hold Durable Scheme (HAD), Baa-Muzzle (General/OF),

Baa-Muzzle (WOO), Baa-Muzzle (Export), Maharajah Import Bills(NIB) , Maharajah Post Import(PM'), Trust Receipt(TRY) , Muskrat Pre-Shipment(SEC) and Muskrat Pre-Shipment(PC).The EXAM Bank has suggested new products, such as EXAM Diamond, EXAM Gold, EXAM Silver, and EXAM Money Maker. These products are currently awaiting approval from higher authorities in the Research & Development Department.

Various factors can modify price structures. These include the impact of bank image on third parties, geography, discounts, price discrimination, and time discrimination.

The impact of bank image can affect third parties like shareholders, consumer's pressure groups, and the government.

Geography factors take into account different regulations in various countries and local money market regulations.

Discounts may be offered based on volume (for large buyers) or value (such as early payment or use of debit cards).

Price discrimination may occur based on customer type (e.g., exclusively for students) or product form (e.g., bankrolling).

Place discrimination refers to differences in service at ATM or counters.

Time discrimination can happen during peak hours or off-peak hours.

Regarding investment pricing at the office bank, the profit depends on the level of risk and type of security offered for each investment category. The profit rate reflects the risk involved - higher risk leads to higher profit rates.The profit rates for different types of investment products offered by EXAM Bank should be taken into account. The specific profit rates for various investment sectors at EXAM Bank are as follows:

- Agriculture (ABA-Muzzle/Maharajah) - 10%
- Term investment in large and medium industries (Izard Bill Bib) - 14%-16%
- Working Capital (ABA Muzzle/Maharajah) - 14%-16%
- Export of Jute items (P.C) (ABA-Muzzle-P/C) - 7%
- Others export (P.C) (ABA-Muzzle-P/C) - 7%
- SEC (wastrel Bill wake) SOD Export (Bat-Muzzle Export)
- Commercial

Investment (ABA-Muzzle/lazar Bill Bib)
- Term investment in small industries (Izard Bill Bib) - 14%-16%
- House building investment (Izard Bill Bib) - 14%-16%
- Special project (ABA Muzzle/lazar Bill Bib)
Investment in non-banking institutions.

The profit rate for Credit Card is 24% compensation. Table 6 displays the investment products and their corresponding profit rates at EXAM Bank Deposit Pricing office. Generally, EXAM Bank follows market rate pricing for deposit pricing. In Bangladesh, there are currently seven Islamic Banks operating, with Islam Bank Bangladesh Ltd. being the leader due to its age and size. EXAM Bank aims to attract more deposits by offering attractive profit rates.The fixed or term deposit rates at various banks are as follows:

- EXAM Bank:
- 1 Month - 8.50%
- 2 Month - ?11.50%
- 3 Month - 11.25%
- 6 Month - 11.30%
- 12 Month - 11.50%

- Shallot Pampering Bank:
- 1 Month - 10.50%
- 2 Month - ?11%
- 3 Month - 12.55%
-
6
M
o
nth
-
12.
60%

12 Months -

12.

- City Bank:

- Southeast Bank:

Table7 provides a comparison of deposit rates among different banks.Communication strategy is an important component of bank marketing strategy.

Since the early sass when banks paid little attention to communications, they have been required to invest heavily in advertising, publicity, and

personal selling.The specific mix of these strategies depends on the target market segment to which the banks aim to appeal.

The four major elements in the communication strategy are Advertising, Public Relations, Promotions, and Personal Selling.Exam Bank, a third-generation bank that converted into Islamic Banking in 2008, employs various tactics for market promotion and advertising. These tactics include print ads, press kits, giveaways, TV and radio ads, speeches, fairs and trade shows, cinema ads, seminars, exhibits, mailings, annual reports, demonstrations, personal NV (non-verbal communication), manager directories, sponsorships,
special discounts,
telemarketing,
in-branch leaflets,
free banking,
seminar selling,
display signs,
special investments,
promotional magazines,
audiovisual materials,
brochures and bulletins.

As part of their communication strategy Exam Bank focuses primarily on public relations. When opening a new branch they send letters to elite persons as well as offices and industries in the area to encourage them to open accounts at their bank. They also host an annual get together called Dacha and Chitchatting for their loyal customers in order to strengthen relationships with clients.

Exam Bank not only provides solutions to client problems but also guides them through the process of overcoming these issues. Additionally they organize an awards ceremony each year to honor exceptional individuals. At the beginning of each year they send gift items such as pens,dairies calendars pen stands,and wall clocks to senior citizens in the community. Special gifts are also provided on various occasions for distinguished individualsEXAM Bank's higher authority regularly shares market information and advice with branch managers on a monthly basis. In return, branch managers provide updates on their respective branches to the head office. The head office then provides deposit and investment guidelines to the branch managers. Additionally, EXAM Bank employs a place

strategy by segmenting markets based on geographic location.

Consumer preferences vary across regions, such as the preference for woolen sweaters and jackets in north India due to colder winters compared to south India. Geographic segmentation is also applicable within local markets, as a bank branch in the western part of a city may attract account holders from that specific area but struggle to attract customers from the eastern part due to inconvenient location.

When analyzing geographic data, marketers examine sales by region, state, city size, specific locations, and branch network activities. With 30 branches mainly located in urban commercial areas, EXAM Bank conducts business with clients and corporations beyond its branches.

S.W.O.T analysis is conducted by organizations like EXAM Bank to evaluate strengths, weaknesses, opportunities, and threats. This analysis aids organizations in enhancing current performance and anticipating future improvements when compared to competitors.

EXAM Bank Limited holds a strong reputation as Bangladesh's leading private sector commercial bank.The bank's profits and deposits have grown significantly thanks to effective leadership and management. Led by Chairman Mr. Md.Unusual Islam, the Board of Directors is highly skilled in the business world. The Bank's advisor, Laming Kabuki, is a reputable senior chartered accountant with 30 years of experience in accounts, audit, finance, and banking at home and abroad. Managing Director Mr. Kaki Masseur Raman heads the bank's management team comprised of top officials who have all worked in reputable banks and possess years of banking experience, skill, and expertise that will contribute to further expansion.

In 2008, EXAM Bank Limited achieved a high growth rate accompanied by impressive profit growth. The number of deposits and loans and advances are also increasing rapidly. The bank fosters

an interactive corporate culture where the working environment is friendly, interactive, and informal. Communication between superiors and employees has no hidden barriers or boundaries. This corporate culture serves as great motivation for employees.

EXAM Bank also has a reputation for providing good quality services to its potential customers; however, it does have some weaknesses. One important weakness is the lack of a clear mission statement and strategic plan. Additionally, there are no long-term strategies regarding whether the bank wants to focus on retail banking or become a corporate bank.
The bank must prioritize establishing a strong and feasible strategic plan in order to determine its future direction. Currently, the bank is facing a significant problem due to the absence of a solid recruiting policy for lower and mid-level positions, resulting in poor service quality.

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