Bank marketing - The concept

In the past, the prevailing view on marketing banking services was that it was unprofessional and unnecessary, as traditional relationships and product quality were deemed sufficient. The evolution of the marketing concept in banking is traced back to the West, with Deryk Weyer of Barclays Bank providing the most comprehensive definition of bank marketing. Weyer described it as identifying the most profitable markets now and in the future, assessing current and future customer needs, setting business development goals, creating plans to meet these goals, managing various services, and promoting them—all within a changing market environment. Weyer's conceptual framework significantly expanded the scope of marketing in the banking industry. 

Over time, there has been significant development that has further broadened the definition and scope of bank marketing. The new concept of bank marketing places significant emphasis on customer satisfaction. It aims to comprehensively understand customer needs, meet these needs with appropriate services, identify potential customers, and base branch activities on market segmentation. Marketing has become an organizational imperative. Initially, marketing in banks took the form of advertising and promotion, but it was gradually realized that marketing extends beyond these activities. Bank marketing is now recognized as a managerial process that matches services with markets, involving the formulation of overall marketing strategies that align with the tastes, temperaments, needs, and requirements of customers.

Based on the above, it is said that marketing banking services involves product, promotion, pricing, and place. Additionally, many experts also emphasize the importance of People, Process, and Physical appearance. These various marketing elements are influenced by changing business conditions. Marketing experts assert that in service-oriented organizations, People play a crucial role. This highlights the importance of the quality of bankers recruited and developed by banking organizations, underscoring the focus on human resource development in the banking sector. It is undeniable that in almost all organizations, the quality of human resources is pivotal. 

Thus, bank marketing is seen as a strategy to guide banks in providing multi-dimensional benefits to various segments that use their services. Modern marketing principles, when properly implemented, help establish a balance between organizational and social interests. In the era of electronic banking, the perception of bank marketing requires a new vision. The use of advanced technologies by banking organizations has significantly enhanced the quality of services. Customers using foreign banks have different perceptions regarding service quality, and word-of-mouth communication enables the smooth transmission of these perceptions. Customers of manually operated public sector banks become aware of the service quality their counterparts experience. This shapes expectations and necessitates a change in the perception of service quality. Thus, the marketing of banking services plays a crucial role in shaping customer expectations. 

Bank marketing is thus an approach to profitably market services. It serves as a means to maintain commercial viability, an art to project a positive image, a method to energize performance orientation, a tool to activate employee orientation, and a managerial approach to excel in competition. The evolving perception of bank marketing has transformed it into a social process. The significant aspects of the holistic management concept have made bank marketing a tool to balance commercial and social considerations, often seen as opposing forces. A compendium of the two words, Bank and Marketing, draws our attention to the following: 

• Bank marketing is a managerial approach to market the services

• It is a social process to subserve social interests

• It is a fair way of making profits

• It is an art to make possible performance-orientation

• It is a professionally tested skill to excel competition.

The users of banking services

Users and customers hold outstanding significance in bank marketing. The range of services, the planning and development of services, the delivery of services, the pricing strategies or interest rates charged, and the promotional strategies all depend heavily on the nature and type of users utilizing an organization’s services. Against this backdrop, studying different categories of users becomes crucial. Emerging trends in user expectations significantly impact the formulation of the marketing mix. Innovative efforts become essential as user expectations evolve. For instance, while users did not previously expect fast, efficient services, they do today. Consumer financing, once less important, is now a priority for banks. Similarly, industrial users now expect more liberal credit facilities. These changes highlight that the dynamic nature of user expectations directly influences marketing decisions.

We find two types of customers using the services of banks, such as general customers and the industrial customers as shown in figure.

• General Users: Individuals who have an account with the bank and utilize its services under the bank's established terms and conditions are referred to as general users. Typically, these users are small-sized customers. 

• Industrial Users: Industrialists and entrepreneurs who have an account with the bank and use its credit facilities and other services for the establishment and expansion of their businesses are known as industrial users. Typically, these users are large-sized customers. 

• Prospects: It's important to define the term "prospects." General or industrial prospects are individuals or businesses that are not currently using banking services but have the potential to become customers if properly encouraged or motivated. 

The aforementioned points highlight that banking organizations engage with various types of customers. The behavioral profiles of general and industrial customers differ significantly. Both customer types are crucial to marketers, and professional success in banking depends on studying and understanding these customers from the right perspective. Marketing resources play a key role in converting prospects into customers or users. 

Marketing mix for the banking services