MARKETING

DEFINITION 1

- 1948: The Marketing concerns the achievement of companies

activities associated to the dissemination of goods and services from the

producers to the consumers.

Historical approach of the American Marketing Association

- from 1970 to 2004: The marketing is a function of the organization which

consists in planning and setting up global processes about an idea, a

good, or a service, in order to create a mutually satisfactory exchange in

term of value for people, individuals, actors.

DEFINITION 2

« The marketing is a policy instrument used by

organizations to influence in their flavor public

behavior on which they depend».

An other proposal from the authors of the Mercator...

DEFINITION 3

"Marketing is the art and science of choosing target

markets and to attract, retain, and develop a customer

base by creating, delivering and communicating

superior value to its customers"

Last, a proposal from the authors of the Kotler...

ISSUES

The role of marketing is therefore create value

through strategies of influence, not manipulation or

deception ...

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... while creating mutual satisfaction!

CHALLENGES

For marketing people, this is therefore to ensure that

individuals and organizations obtain:

- Meeting of their needs

- Satisfaction of their desires...

"While creating sustainable value and not ideology"

LIMITS

Beyond technics, ethic and legitimacy, what moral?

- Professional conduct

- Social consequences

« A difficult balance about shared interests in short and

long term...»

VARIED OBJECTS

Marketing is about more and more objects

- Goods

- Services

- Organizations

- Personnalities

- Events and experiences

- Properties (real or movable)

- Informations and ideas

- Places and territories

ELEMENTS: GOODS TYPOLOGY

• Fast moving consumer goods:

• Everyday purchase products (daily, recurrent)

• Essentials and necessary products (foods,

hygiene)

• Impulsive purchase (small pleasures)

• Last minute purchase (batteries, press)

• Industrial goods:

• Raw materials

• Manufactured goods

• Capital goods

• Supplies and services (maintenance)

ELEMENTS: PRODUCT LEVELS

• Generic product :

• Level II

• General features

• Detailed value of the product

• E x p e c t e d p r o d u c t

(customer) :

• Level III

• Products and features for

customer satisfaction

• Expected value of the product

• Main benefit (company)

• Level I

• Priority objective: customer advantage

• Principal value of the product

• Potential Product :

• Level IV

• Product and improvements

• Future value of the product

ELEMENTS: PRODUCT LEVELS

• Products and range:

• Leading products.

• Call products.

• Tactical products.

• Substitution products.

• Regulating products.

ELEMENTS: PRODUCT LEVELS

Product/

Market Existing New

Existing Market

penetration

Product

development

New Market

development Diversification

Marketing of services

DEFINITION

« A service is an act or a performance that one party can offer

to another that is essentially intangible (unseable) and does

not result in ownership of anything»

DIFFERENCES BETWEEN GOODS AND SERVICES

• Goods:

• Tangible

• Assessable before owning

• Countable

• Property can be transferred

• Public or private production process

• Available for test before purchase

• Standardized

• Services:

• Intangible

• Not assessable before purchasing

• Non-countable

• Property cannot be transferred

• Customer is a part of the production process

• Hand or taylor made

SPECIFICITIES OF SERVICES 1

Several points of differences...

• Heterogeneity:

• Depend of people => High variability of services

• Need to be adjusted to experience, lifestyle, constraints, etc... of the

customer

• Variability of the quality of the service depending of the people

rendering the service

• High degree of personalization related to the people rendering the

service => important risks in case of changes

• Intangibility:

• Difficulty to felt and to own

• Need a specific strategy of communication to show

the final satisfaction for the customer

• Need consumption to validate the quality

SPECIFICITIES OF SERVICES 1I

Several other points of differences...

• Inseparability:

• The production is often merged with the consumption

(same time)

• The production is directly related to the consumption

(part of the process)

• Most of the time, customers expect high level of quality

of service

• Perishability:

• Specific lifecycle (short life)

• Short validity of certain services (seasons,

availibilities, etc...

• Storage impossible

UNCERTAINTIES

• Ten distinctive problems to solve:

• Third-Party accountability

• Client uncertainty

• Demonstration experience

• Limited differentiability

• Maintaining quality control

• Making the «Do-ers» the sellers

• Allocating time to marketing

• Pressure to react rather than be proactive

• Conflicting views about advertising

• A limited marketing knowledge base

Bank Marketing

DEFINITION

« Bank marketing consists to provide efficient and effective

services to satisfy customers’ financial needs and wants, while

respecting organizational objectives and challenging

competitors».

TARGET CUSTOMER

• Financial needs and wants

• Safety

• Liquidity

• Transferability

• Interest earning on savings and deposits

FACTORS OF CHANGE

New market:

• Deregulation

• Competition

• Financial sophistication

Banks must face new challenges

New customers:

• Use of new technologies

• Volatility

• Customer orientation

New services:

• Inter-relation, interoperability

• Diversification

• Various offers

SCOPE OF SERVICES AND MARKETING MIX Banks must adapt services and mix for improving quality

Financial services:

• Commercial banking

• Investment banking

• Universal banking

Specific marketing mix

• Product

• Price

• Place

• Promotion

• Processes

• People

• Physical evidence

TARGET

• Customer perception:

• Customer or client worlds.

• Positioning (differenciation?).

• Formulation (elements, process, general features).

• Performances.

• Sensory identity.

• Product benefits.

BANK MARKETING SERGMENTATION

Psychografic segmentation:

• Lifestyle

• Opinion

• Attitudes

• Expectations

• Activities

• Loyality

• Benefits expected

Demografic segmentation:

• Homogeneity

• S e l f - r e f e r e n c e b e twe e n

Customers

BANK MARKETING DISTRIBUTION PLACE From face-to-face to new technologies:

« Any product to anyone at anytime anywhere...»

• Points of sale

• Remote banking

• ATMs

• Telephone banking

• Internet banking

• Mobile banking

BANK MARKETING PROMOTION

Advertising: Inform, improve image, and build bank identity

• Traditionnal press (including specialized)

• Flyers, brochures, posters

• Radio, Tv and cinema

• Shorts films

• Mails

• Exhibitions, seminars

• Internet (Bank website and referencing)

• Call centers (hotline and outsourced selling)

• E-mails

• Social networks

BANK MARKETING PROMOTION

Mass market approach:

• Low-profit potential customer

• Low costs financial services

• Price sensitivity

Segmentation or stratification?

High-end approach:

• High-profit potential customer

• Customized financial services

• Relationship strategy

• Skilled staff

PUBLIC RELATIONS

Build a positive publicity for the bank services !

• Personal and adapted selling

• Front-line staff strategy

• Identification of the needs of the customer

• Availability for the customer

• Best and suitable service for the customer

Customer acquisition:

• New accounts

• New income

Customer retention:

• Return on investment

• Avoid costly closing account

QUALITY AND SERVICE

Points of improvement: Quality is a way of differentiation..

• Increase employees skills and knowledge

• Increase relationship bank approach

• Increase the range of financial services

• Minimize assembly-line processes

• Increase personalized services

• Increase use of new technologies

• Minimize administrative tasks

• Increase level of employees responsibilities

• Reduce employees specialization

NECESSITY OF DIFFERENCIATION

• Variables capacities depending of:

• Kind of product

• Features

• Degree of personalization

• Performances

• Robustness and reliability level

• Life period

• Services offered

TWO CHOICES

From one marketing to another !

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Transaction:

• Short terme

• Isolated sales

• Non constant contact

with the customer

• Product caracteristics

• Low level of service and

contact for the customer

Relation:

• Long term

• Customer retention

• Constant contact with

the customer

• Product value for the

customer

• High level of quality and

contact for the customer

Customer Relationship Management

CRM DEFINITION

Transform a simple visit in a long fruitful relationship !

- «Consumer is the sole purpose of any business organization», Adam Smith.

- «To constitute a customer, there must be some recognizable course or habit

of dealing in the nature of regular banking business...», Sir John Paget.

CUSTOMERS

Versus or bounded? Internal or

external customers?

• Customer satisfaction

• Customer loyalty

• Employee satisfaction

• Employee loyalty

First, customers must be very satisfied !

1/ Frontline workers are also one of the keys of success of Crm...

2/ Employees, holders, partners, consultants, advertisers, etc.. are

also customers !

PROFILING CUSTOMERS

• Understanding needs of the

customers

• Modifying existing services

• Developing new services

• Optimizing processes

Meeting and exceeding the needs of customers..

Constantly adapt its strategy to customer needs !

CUSTOMER ATTRITION

• Set up customer attrition analysis

• Make the difference between gross (associated

revenues) and net attrition (correction with new

similar customers)

• Measure dissatisfaction to prevent and build churn

model

• Try to win-back defecting customers

Customers defection (churn or turnover) is costly !

It costs a lot less to retain an existing customer than to acquire a

new one...

CUSTOMER ATTRITION ANALYSIS

• Customer behavior

• Customer perceptions

• Customer demographics

• Macro-environment variables

CRM KEY FACTORS 1 Knowing Customers (current, prospective ans lost)...

Customer informations:

• Identify most important customers

• Use information technologies effectively

• Save maximum datas and harness it

Customer contract points:

• Plan regular contacts

• Identify core products, and anticipate expected

products or services.

Dialogue with Customers:

• Track changes in customer’s needs

• Ev a lua te cus tomer ’s deg ree of

satisfaction

CRM KEY FACTORS 2

Keeping informed Customers...

Customer satisfaction measurement:

• Understand the buyer-seller relationship

• Set up surveys and provide feedback to the marketer

• Involve customers in the creative process of new products

(included advertisements)

Customer communication programs:

• Inform regularly customers

• Educate customers about bank’s products, services and usage

conditions

• Give customers a sense of individuality and importance

Customer special events and programs:

• Invite customers to dedicated events

• Send personalized newsletters, videos, product informations

and supports (gold cards, etc.)

• Stimulate cross selling for elligible customers

SERVICE AND QUALITY

 Some expected benefits of CRM for customers !

 Quick access to the services (opening time, on line services,

telephone services).

• Good communication and appropriate information between

customers and bank

• Skills and competences required for adapted products and

services (flexibility of the staff)

• Reliability of the product and services

• Credibility of the bank, its products and services

• Respect and consideration from the staff at all levels

• Reactivity and responsiveness of the staff

• Security and confidentiality of the datas

• Up-to-date equipments ans ressources

• Customer knowledge

• ...