From the above it appears that approximately 75% of the market controlled by two major Banking Groups and from the public sector.
Nowadays, the main purpose of Greek commercial banks is to provide services in banking system and their main work is the acceptance of deposits, lending and servicing of international trade.
Regarding to the branch network, the number of bank branches in Greece is the smallest in Europe. It is generally observed that the Greek commercial banks have significantly lower total assets, deposits and loans per branch than commercial banks in other European countries.
3. The Integration of Marketing in banking
Under the general tendency of banks to obtain customer focus, domestic banking groups focus on the further development of marketing departments in order to gain market share in retail banking in an environment of intense competition.
The role of marketing in the overall operation and management structure of a bank has been upgraded and the work is crucial to the development of profitability.
Marketing gives the opportunity to banks:
To develop new services and banking products that are attuned to the real needs of their customers.
To sell to existing banking markets, sometimes extending their cooperation with existing customers or acquiring new customers.
Better working conditions for their employees, because if someone has deep knowledge of techniques for dealing with customers, that allows to deal more easily and effectively with them.
Plans for the comprehensive treatment of the needs of the bank and its customers. Also, services at lower cost per customer, building technology and economies of scale.
Better relationships with customers in order to create bonds of mutual interest. Also marketing allows banks to show profit in their annual results through the satisfaction of the needs of their customers.
4. The necessity of implementing the Marketing banking
The consumption habits of decisions of everyday life are affected by marketing, of course the same applies to bank customers. Banking services do not vary greatly from bank to bank, therefore the necessity of marketing becomes more pronounced. The marketing simplifies customers' lives because it provides many options with high quality and competitive terms.
However, banks have difficulties because of the increased competition with other banks, the constantly changing market context, the volume and complexity of the working object.
5. Definitions of Bank Marketing
A popular definition of bank marketing is given by S. Kuppuswami in the following words, "Creation and delivery of financial services suitable to meet the customer's need at a profit to the bank"[1]. This definition recognizes the imperative need to satisfy customers, the significance of both the creation and delivery aspects of bank services and underlying profit motive.
The most comprehensive definition of bank marketing is given by Deryk Weyer of Barclays Bank. He calls it as, "Consisting of identifying the most profitable markets now and in future, assessing the present and future needs of customers, setting business development goals, making plans to meet them and managing the various services and promoting them to achieve the plans - all in the context of changing environment in the market"[2].
Harley prefers to call bank marketing responsive marketing which suggests an attuning or responding to the changing needs of custorners' society and environment[3]".
Rajeev K Seth defines marketing orientation in such a way that, marketing orientation is basically an attitudinal disposition of a banker which enables him to anticipate customer needs and also inspires him to satisfy that need.[4] Two ingredients of marketing orientation are:
an ability to anticipate customer needs and
Willingness to satisfy them.
If you want to see more widely and get away from definitions banking marketing means when a bank wins through customer satisfaction. That is, to establish links and long-term mutual interest to loyal and satisfied customers.
Nowadays, all the banking executives talk about changing the culture of counter, talk about quality service and adopting a new philosophy.
The philosophy of customer-oriented culture. The decision of the customer to select the best bank is not a function only of distance from home. Sometimes they prefer to go some extra kilometers away from home to ensure that they will gain the best service from the bank.
6. Peculiarities of banking services in connection with the Marketing
The principles of marketing can be applied in the banking sector, taking into account the peculiarities of the supply of banking services and the differences from the disposal of industrial or consumer products.
The banking agencies have, in terms of marketing, the following features that differentiate the products:
It is immaterial as all services, which means that they are not perceived by the senses before the sale and do not require storage and transportation for disposal, such as products. Also, because of this status, the banking services cannot be sampled as the products.
Based on faith. This means that the client cannot know in advance what he buys, because there are not specific and clearly identified quality standards, as it happens in products. So there are no specific quality characteristics of some banking services such as the speed of service in daily transactions, the lack of bureaucracy, the kindness and willingness of employees, the ability someone quickly correct mistakes, the timely response to requests from the client and the speed of decisions. To old customers, faith created by the previous quality of service, which had in the bank with which they cooperate, while new customers are influenced by promotions and other sales promotion and public relations.
A bank officer is part of the service that is offered. Instead, the seller of products may never be part of the product he sells. The quality of the banking sector is inextricably linked to the level of knowledge, skills and attitudes of staff who offer banking services.
The client is part of the production process. This occurs with his presence, with the level of is knowledge, with his perceptual ability, with his requirements and his behavior.
For customers, banking services are, at first glance, identical in all commercial banks. Each bank has to find ways to establish identity and to ensure the desired image to its customers, for each offered service from it. For this purpose, each bank tries to promote the services of having regard to all the tools of marketing that could be used.
They show great geographic dispersion. Each commercial bank considers the necessity to expand. That, depending on the capabilities of the network of branches in order to further facilitates the trade of existing customers and covers a wider market at a national level.
There is a wide range of services that offered. The range of bank services covered by the specific needs of companies of different sectors (Corporate Banking), the needs of large retail customers (Private Banking) and the needs of savers (Retail Banking).
7. The marketing mix in Banking Services
The product marketing mix consists of the 4 P’s which are Product, Pricing, Promotions and Placement. The extended service marketing mix places 3 further P’s which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery.
Product: The product in service marketing mix is intangible in nature. Service products cannot be measured. The aim is to maximize the profit. When we say product, is included all product features, packaging, the size and the guarantees that is provided.
Place: Place in case of services determine where the service product is going to be located. Place, includes network of branch, credit cards, ATM's, the phone banking and Home-Banking.
Pricing: Pricing in case of services is rather more difficult than in case of products. This includes the terms of cooperation and discount policy on interest and fees. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit markup you get your final service pricing.
Promotion: Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. The promotional mix includes (1) personal selling, (2) sales promotion, (3) advertising and (4) public relations.
People: People is one of the elements of service marketing mix. People define a service. Here is included staff and customers (who contribute to the quality of services offered to their knowledge, attitudes and behavior).
Process: Service process is the way in which a service is delivered to the end customer. It is a critical component in the service blueprint, wherein before establishing the service, the bank defines exactly what should be the process of the service product reaching the end customer.
Physical Evidence: The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Physical Evidence, referred to the surroundings and the material elements of the offer services.
The marketing mix in banks is the necessary combination of the tools of marketing to maintain or expand market share in each market target.
According to Hesselink & Wiele customer satisfaction is an important component of a bank because satisfied customers:[5]
buy more and become more loyal
purchase additional products and services
create a positive climate for business by spreading positive comments on services and products of the bank
attaches less importance to competitors' ads
give more ideas, suggestions and solutions
are less expensive
According to the above features of banking services, banks devise marketing strategies, creating a balance between the following basic principles of business policy that must followed by any commercial bank.
These are:
The principle of liquidity: The bank should continue to maintain a high degree of liquidity, to meet its obligations, without the fear of lack of public confidence it.
The principle of security: The assets of the bank must be placed in order to ensure their recovery. Following this principle, banks were trying to get past as the greatest possible collaterals. The current trend is not considered as collaterals the sole criterion for granting loans to a company, but be accommodated, with increasing seriousness, efficiency, sustainability and prospects.
The principle of efficiency: This means the pursuit of maximizing profit from the activity of the bank. This principle contrasts with the previous two, because the high degree of liquidity means unused funds and consequently a drop in profitability, while the principle of security may not allow investments in jobs with high efficiency and high risk.
The principle of risk spreading: In accordance with that case, the bank should allocate its lending to the largest possible number of borrowers, to reduce the risk of possible injury.
8. Structure Information of Marketing System
The well-structured information of Marketing System is a prerequisite for developing a successful strategy and making decisions about the need of implement to the strategic marketing mix.
In order to configure the product mix the information that required are:
the degree of acceptance of new products before launching them
the market trends
the prediction of sales
the degree of materiality of the characteristics of each product
the market incentives for each product
the causes of preference of competing products
the desired change in quality
the necessary modifications to the "packaging" of products with other
the desirable characteristics of new products
For the formulation of promotion the information that required are:
the socioeconomic structure of the population by geographic area and shop
the network preferences and habits of customers
the format of the business, turnover, number of employees and amount of required banking, by region
the prospects of development of each region
the potential inhibitors of alternative networks
the branch network and A.T.M 's competition and the geographical distribution
the cost of full development of alternative networks, the cost savings and overall benefits of adopting them
For the formulation of pricing policy the information that required are:
cost estimates
the pricing competition policy (interest rates, fees)
Opinions of consumer perceived value from the value - quality products and services offered and estimated price elasticity of demand
For the formulation of profile and contact the information that required are:
The effectiveness of advertising messages for each target market, before and after the hype
the audience of radio, TV viewing television programs, newspaper readership and magazines, in relation to their costs
the visibility of ads
how customers respond to promotional techniques sales
the effectiveness of sales of each product every region and every segment
advertising for the competition and shares voice advertising
The public relations of the competition
To determine the characteristics of market segments that the bank serves or intends to serve:
Demographic criteria
Geographic criteria
Psychographic criteria
9. Conclusion
The financial system in Greece and throughout Europe, facing these two decades continuous changes in the promotion and provision of services, because of the new challenges faced by the international economic and political environment.
The liberalization of the banking systems of government interventionism led banks to gradually change attitudes and made them increasingly competitive. Products began to be simplified and cover most of the needs of the population.
Procedures in providing services simplified and banks began to play a key role in the economic life of the country, with the aim to increase the profitability.
The banking Marketing evolves and undergoes changes in practices, structures, processes and systems which are geared to the customer, who is the only guarantee of success.
This is also the only reason for their existence and is the only way that contributes to the survival of banking groups.
For many modern bank customers, the bank branch is no longer just a place of handling some banking transactions, but also an environment of financial solutions to complex dilemmas.
The banking sector is the driving force in international and European economies. The last twenty years, the Greek banking system has made significant progress towards customer-centric approach, using more advanced techniques for marketing.
Greek banks, however, will continue to provide and improve services to the general public mainly by installing 88 new operating systems and the consultants will organize training of personnel to conduct training seminars.
10. Bibliography
BERRY, L. L., FUTRELL, C. M. & BOWERS, M. R., “Bankers Who Sell: Improving Selling Effectiveness In Banking”, Homewood Illinois, Dow Jones – Irwin, (1985), σελ.: 10 - 25.
KINNEAR, T. C. and TAYLOR, J. R., “Marketing Research: An Applied Approach”, 5th edition, Dryden Press, Chicago, Illinois, (1991), σελ.: 5 -12.
SCHIFFMAN, L. G. & KANUK, L. L., “Customer Behavior”, 5th edition, Prentice Hall International, (1994), σελ.:102 -115.
MARTIN, T., “Financial Services Direct Marketing”, Mc Graw – Hill, London, (1995), σελ.: 91 - 101.
Levitt T., Marketing Myopia, Harvard Business Review, July – August (1960), σελ.: 50.
MISHKIN, F., “The Economics of Money, Banking, and Financial Markets”, 3rd edition, Εκδόσεις HarperCollins College Publishers, New York, (1992), σελ.: 45.
Hesselink, M. and van der Wiele (2003) Mystery Shopping: In-depth Measurement of Customer Satisfaction, ERIM Report Series Research in Management, ERS-2003-20-ORG, March.
Kuppuswami, S. The Banker, November 1986, p.20.
Sanjeev Bhatt, Bank Marketing, the Economic Times, September 1, 1980.
Jha, S.M. Service marketing, Himalaya Publishing House, Mumbai, 2000. p.49.
Rajeev K. Seth, Marketing of Banking Services, Macmillan India Ltd. New Delhi, 1997.
[1] Kuppuswami, S. The Banker, November 1986, p.20.
[2] Sanjeev Bhatt, Bank Marketing, the Economic Times, September 1, 1980.
[3] Jha, S.M. Service marketing, Himalaya Publishing House, Mumbai, 2000. p.49.
[4] Rajeev K. Seth, Marketing of Banking Services, Macmillan India Ltd. New Delhi, 1997.
[5] Hesselink, M. and van der Wiele (2003) Mystery Shopping: In-depth Measurement of Customer Satisfaction, ERIM Report Series Research in Management, ERS-2003-20-ORG, March.
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aggelikipat (student)
