Transcript Key Events in Bank Marketing

Marketing Concepts
Terminology
Perspective
Examples
Services
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Knowledge
Accurate/efficient
Get know customer friendly
Polite/courteous
Confidentiality
Responsive Service
Professional
Consistent
Difference Between Marketing and
Selling….
• Selling focuses on convincing customers
to purchase what the firm produces…
putting the emphasis on buying rather than
satisfying.
• Marketing focuses on providing a product
or service to meet customers’ needs and
wants…putting the emphasis on satisfying
rather than buying.
Services Customers Want…
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Reliable service
Courteous treatment
Clear understandable communications
Competent staff
Responsive service
Product/Service……
• The object of any marketing effort. A
product can be a good, service, idea,
place or person that satisfies a customer’s
need or want.
Product
Service
• Tangible
• Intangible
• Stored/inventories
• Cannot be stored
• Separate/maker
• Cannot separate
• Consistent quality
provider
• Inconsistent
Market……
• Consists of all potential customers sharing
a particular need or want who might be
willing and able to engage in exchange to
satisfy that need or want.
Marketing…
• The process of planning and executing the
conception, pricing, promotion and
distribution of ideas, goods and services to
create exchanges that satisfy individuals
and organizational goals.
Key Elements of Marketing…
• Planning process
• Involves product, price, place and
promotion.
• Product can be tangible (product)
intangible (service) or idea.
• Seeks to meet, organization and customer
needs.
• Marketing works through the exchange
process.
Four “P’s” of Marketing
• Product or service
• Price
• Place (distribution)
• Promotion
The Four Ps of the Marketing Mix
Marketing Concept…
• Recognition by management that the profit
objectives of the organization can best be
reached by identifying the needs and
wants of the target market and meeting
those needs and wants through an
integrated, efficient organization-wide
effort carried out in a socially responsible
manner.
Four Key Elements of Marketing
Concept….
• Customer orientation
• Profit
• Total company effort
• Social responsibility
Evolution of Marketing Concept…
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Decline in sales or market share
Slow growth
Change in consumer buying habits
Increased competition
Increased marketing expense
Five Stages of Marketing (of
financial institutions)….
• Pre-marketing era…up to early 1950’s
• Advertising/Sales promotions era…1950’s
& 1960’s—increased competition
• Product Orientation era…1960’s & 1970’s
• Image and Positioning era … late 1970’s &
1980’s.
• Customer/Service Quality Orientation
era…..1980’s & 1990’s.
The Evolution of Marketing in the
Banking Industry
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Key events in the U.S.
Market Environment.
Brand names appear:
Ford unveils Model T:
start of hard-sell era in
marketing
First long-distance phone
call: U.S. enters World
War I
Decade
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Key Events in Bank Marketing
1900s
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Business and industry are principal
bank customers; banking operates
in a seller’s market
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Federal Reserve System
established
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Increased banking regulation
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Banking panic and bank “holiday”;
bank failures
1910s
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Radio becomes tool for
mass communication; first
talking movie; stock
market crash
1920s
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Depression: New Deal
initiatives: television
invented
1930s
The Evolution of Marketing in the Banking Industry
(cont’d)
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Key events in the U.S.
Market Environment. (cont’d)
Decade (cont’d) •
Key Events in Bank Marketing
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World War II; pent-up demand
fuels economy; first calculation
by computer; television
1940s (premarketing
stage era)
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Commercial banks hold 80 percent
of industry deposits; thrifts hold 20
percent
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Economic growth; emergence
of marketing research;
suburban sprawl begins;
convenience foods; sales
promotion era—giveaways,
contests, trading stamps;
brand image-building; public
relations becomes popular
1950s
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Banks get into advertising, public
relations, sales promotion; first
bank credit card; thrifts grow
quickly
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Ecology awareness begins;
first satellite TV relay;
consumerism begins with auto
safety push; Vietnam
involvement
1960s (sales
promotion
stage/era)
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Friendly, personal banking
emerges; premium promotions;
product innovation; mass credit
cards, automated teller machines
(ATMs)
(cont’d)
The Evolution of Marketing in the Banking Industry
(cont’d)
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Key events in the U.S.
Market Environment. (cont’d)
Decade (cont’d)
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Gasoline price escalation;
Vietnam pullout
1970s (product
proliferation
stage/era)
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Record inflation; recession
begins; real estate values
decline
1980s
(marketing
planning
stage/era)
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Key Events in Bank Marketing
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IRAs introduced; Keogh plans
instituted; banks begin positioning
and image creation; expansion
through branching
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Marketing planning spreads; NOW
accounts introduced; pricing
becomes more of a concern;
account packages proliferate;
money market accounts
introduced; Reg Q phase-out;
interstate banking; commercial
banks hold 60 % of industry
deposits—thrifts 40%; banking
industry holds 60% of total financial
assets—nonbanks hold 40%; S&L
crisis; more than 1,000 banks
closed or assisted
(cont’d)
Five stages through which the
banking industry has passed
• Early 1950s – pre-marketing era-operated in a sellers
market, little need to market their product. Late 1950searly 1960s -advertising and sales promotion to compete
for consumer savings deposits
• 1960s-friendly bank stage-made offices inviting to retain
customers, late 1960s product proliferation – credit cards
and lines introduced
• 1970s-image and positioning stage-developed
personalities and aimed strategies at specific market
segments not mass media
• 1980s-marketing planning stage – planning discipline
increasingly applied to bank marketing
• 1990s-customer and service quality oriented stage