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Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I NO TC OP Y 105. DO Marketing © Retail Banking Academy, 2014 103 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I NO TC OP Y Course Code 105 Marketing Introduction The American Marketing Association (AMA) approved the following definition of marketing in October 2007: “marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”. Its counterpart in the UK, the Chartered Institute of Marketing (CIM) stated that marketing is the “management process responsible for identifying, anticipating and satisfying customer requirements profitably”. DO While the AMA defines marketing more generally, it is clear that both organisations view marketing as having less of a transactional nature and more of a transfer of value to customers. However, the fact that banking services are intangible and non-storable presents unique challenges for marketing strategy. This module will, by necessity, adapt the definition of marketing proposed by AMA and the CIM to meet these challenges. In particular, the traditional 4P model of marketing mix that is quite common in the marketing of tangible products will have limited value in banking services marketing. For the rest of this module, we consider the marketing of bank services and present a sequence of steps that a retail banking marketing professional would typically follow in order to deliver value to customers profitably. Important Principles in Services Marketing The following principles will provide the foundation for our goal in delivering value to customers while remaining profitable from the bank’s perspective. The remainder of this module is organised as follows: Chapter 1 discusses a common marketing mix model and modifies it for relevance to services marketing. Chapter 2 shows how to connect with consumers and to create a Unique Selling Proposition (USP). Chapter 3 describes the marketing process and Chapter 4 shows how these concepts apply to marketing in retail banking. The module concludes with a summary and review questions. 104 ACADEMY RETAIL BANKING ACADEMY Course Code 105 - Marketing RETAIL BANKING I NO TC OP Y Chapter 1: Marketing Mix Model The marketing mix model has been cited in the academic literature since the 1940s; the idea was refined and formalised by McCarthy (1964)* and is represented by the familiar 4P diagram. As opposed to the general practice, we represent the 4P model in conceptual terms below: DO Price (Cost to Consumer) Products (Benefits to Consumer) 4Ps Place (Connect to Consumer) Promotion (Inform Consumer) 105.1: The 4P diagram The 4P model shows that it is the marketing mix that matters for marketing success and not just any one of the Ps viewed in isolation. Indeed, in microeconomic theory, it is assumed that consumers do not look at price and product functionality (i.e., benefits) in isolation. They are persuaded by value for money. This is defined as what the consumer estimates the value of the product to be less the actual price paid for the product. * McCarthy, E J, Basic Marketing, (IL: Richard D Irwin, 1964). © Retail Banking Academy, 2014 105 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I If this value* is subjectively estimated by the consumer to be positive, then the propensity to buy is increased. However, promotion is also important so that consumers are adequately informed about the product functionality. It is important to emphasise that while the price charged is objective, the product benefits are subjective from the consumer perspective. Consumers may perceive the product benefits differently since they may have limited information and/or processing power. One of the main objectives of promotion is to bridge the information gap between the company and the consumer. Finally, place is a metaphor for channels or points of contact between the company and the consumer. The preference for a particular channel will largely depend on the complexity of the product or the monetary value of the transaction. NO TC OP Y The traditional 4P model has evolved over the years to include other Ps. For example, Judd† added People to create a 5P model while Booms and Bitner‡ added 3Ps (participants, physical evidence and process) to the 4P model to create a 7P model. The addition of People to the traditional 4P model is quite important in retail banking – which is truly a people-business. It is clear that Price, Product, Place and Promotion can be duplicated by a competitor in retail banking. But people make the difference – since their unique skills of professionalism are not easy to duplicate. The 4P model and its variants have come in for some important criticisms in recent years. For example, Popovic§ (2006) asserted that the 4P model is production-oriented and not customerfocused. The implication is that the 4P model is best suited to companies that make tangible products that lead to transactions rather than for services companies such as retail banks that sell intangible products based on customer relationships. Indeed Möller (2006)¶ claimed that the market mix model “does not consider customer behaviour but is internally oriented; it is passive in its content and does not allow interaction and cannot capture relationships.” A recent article by Kennedy (2008)** found that among other criticisms of the marketing mix framework, “the conceptualisation of the mix has implied marketers are the central element. This is not the case. Marketing is meant to be customer-focused management.” DO In other words, the 4P model puts the company’s marketing professionals at the focus. These criticisms of the traditional 4P model provided an opportunity for research into new models that place the focus on the consumer and, at the same time, become more appropriate for services marketing. One such approach was introduced by Lauterborn (1990)†† and is labelled the 4Cs. This marketing mix framework places more emphasis on customer needs‡‡ compared to the 4P model. The 4Cs are defined as follows: Convenience, Customer value, Cost and Communication. This model is shown below: * † ‡ In microeconomics, this value is known as consumer surplus. § D. Popovic, “Modelling the Marketing of High-Tech Start-Ups”. Journal of Targeting, Measurement and Analysis for Marketing, 14(3), 260-276 (2006). ¶ K. Möller, “The Marketing Mix Revisited: Towards the 21st Century Marketing by E. Constantinides”, Journal of Marketing Management, 22(3), 439-450 (2006). ** “Revision: Reviewing the Marketing Mix”, <fakeideas.wordpress.com/2008/03/07/revision-review ing-the-marketing-mix/> (2008). †† ‡‡ R. Lauterborn, ”New marketing litany: 4Ps passé; 4Cs take over”, Advertising Age, Oct 1 (1990). 106 V. C. Judd, “Differentiate With the 5th P: People”, Industrial Marketing Management, 16(4), 241-247 (1987). B. H. Booms and B. J. Bitner, “Marketing strategies and organisation structures for service firms”, in J. Donnelly and W.R. George(Eds.), Marketing of Services, American Marketing Association, 47-51 (1980). A need is defined as the difference between a consumer’s actual (or current state) and his/her desired state. It may be summarised as where the customer actually is, compared to where he/she desires to be. ACADEMY RETAIL BANKING ACADEMY Course Code 105 - Marketing RETAIL BANKING I Convenience (Consumer Points of Contact) 4Cs Cost to Consumers NO TC OP Y Consumer Value (Meeting Needs) Communication (Informing Consumers) 105.2: The 4C diagram There is a similarity between the 4P and 4C paradigms although it is worth emphasising that the 4P model is more product-oriented while the 4C model is customer-centric. The similarity in their respect construct is presented below: 4P model 4C Model Product Customer Needs Price Cost to Customer Promotion Communication Convenience DO Place Admittedly, the 4C model is more applicable for a retail bank that espouses a strategy that is customer-centric. However, we believe that the 4C model lacks an emphasis on People which is very important for services marketing in retail banking. For this reason, we propose a 4C+P model where the People variable will be the key differentiator in services marketing in retail banking and would actually be the dominant driver of the bank’s unique selling proposition (USP), to be discussed below. The recommended marketing mix framework in retail banking is 4C+P However, the marketing of services in retail banking presents its own challenges. We summarise these below: Services Attributes Implications for Consumer Implications for the Bank’s Marketing Professional Intangibility and hence cannot be visualised Consumers make incorrect choices where product may not match his/her needs. Consumers may seek to reduce this risk by making only one purchase with the bank and may be willing to make additional purchases when the bank-client relationship has been positively validated. Emphasise the long-term view the bank takes over the immediate transaction. Reduce information ambiguity by using simple yet accurate language in marketing documents. © Retail Banking Academy, 2014 107 Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I The service delivery process is normally ‘people-driven’ and hence consumers must expect some degree of human error as well as systems failure. Banks should not communicate error-free service delivery at all times. Rather, all their efforts are directed to keep errors to an absolute minimum and to create a positive customer experience. The creation of delivery and service guarantees will help to reduce the variability in service quality. Simultaneity and hence production and consumption are not separated by time When the bank professional advises (i.e., produces the service) and the consumer responds (i.e., consumes the service), simultaneity arises. The risk is that the consumer may not fully understand the advice provided. Bank marketing should highlight the professionalism of its staff and the convenience of its channels and user-friendly systems. Non-storability and hence services cannot be inventoried NO TC OP Y Heterogeneity and hence service quality may not be delivered uniformly and consistently The implication is that consumers may obtain services at convenient times; congestion may exist in bank branches at certain times of the day creating long waiting times for service. Bank marketing should communicate its various alternative channels to facilitate customer convenience. 105.3: Summary of marketing challenges for a Retail Bank Open Question #1 DO Do you agree with the statement that how a bank delivers its services is as important as what it delivers? 108 Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I NO TC OP Y Chapter 2: Connecting with Customers This chapter is concerned with identifying the primary needs of consumers. Psychology and human resource management literature has provided some guidelines about people’s needs during their lifetime. A popular approach is defined by Maslow’s theory of hierarchy of low-level and high-level needs. Maslow’s* hierarchy of needs is a theory that serves as a basis for understanding the motives of consumers. Recall that a need exists when there is a gap between the current state of the consumer and his/her desired state. For example, a financial need exists if the consumer’s current financial state falls short of their long-term financial goals. DO Bank marketing professionals must understand how and why people are motivated to purchase the bank’s product or service for the first time or do so repeatedly. Accordingly, marketing professionals then try to meet the challenge of reducing or eliminating this needs gap. The following pyramid describes Maslow’s hierarchy of needs. * AH Maslow “A theory of human motivation”. Psychological Review, 50(4), 370-96 10, (1943) © Retail Banking Academy, 2014 109 RETAIL BANKING ACADEMY Course Code 105 - Marketing NO TC OP Y RETAIL BANKING I Physiological Needs 105.4: Maslow’s hierarchy of needs Open Question #2 When a consumer has reached the level of ‘self-esteem’, they prefer to do things for themselves. Do you agree that the bank marketing professional must be cognisant of the value of alternative channels (i.e., digital channels) to these consumers? DO One implication of Maslow’s theory is that once the lower level of needs are satisfied, the consumer is then concerned with needs at the next level. In other words, once a need is satisfied, it is no longer a motivator. But recent research shows that needs do not fit nicely into a Maslow pyramid. For example, Kenrick et al (2010)* assert that needs co-exist at all levels. For example, they claim that even when certain needs are met, they may reappear when prompted by certain environmental signals. For example, consumers in relatively safe countries may be prompted to seek physical security and even purchase guns when there are reports of a mass shooting in their neighbourhood. The Kenrick pyramid shows that needs overlap and do not completely replace one at the lower level by another just above it. Open Question #3 “When a new one comes in, it doesn’t just cover up the old one the way a new city is built on ancient ruins. The old and new continue to coexist.” Do you agree? Another important criticism of Maslow’s theory has been levelled by Hofstede (1984).† He * D. T. Kenrick, V. Griskevicius, S. L. Neuberg, and M. Schaller “Renovating the pyramid of needs: Contemporary extensions built upon ancient foundations”. Perspectives on Psychological Science, 5, 292–314, (2010). † G. Hofstede, “The cultural relativity of the quality of life concept”. Academy of Management Review, 9(3), 389-398, (1984). 110 Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I criticised Maslow’s theory as being ethnocentric and more of a statement of the US middle class. He asserts that cross-cultural differences in societies have an important effect on the hierarchy of needs. Hence, Maslow’s pyramid may take a different form in emerging or traditional societies from that found for the US. Open Question #4 What are the implications for the bank marketing professional when the critiques of Maslow’s theory offered by Kenrick et al and Hofstede are taken into account? NO TC OP Y The next principle in services marketing is a formulation of the company’s unique selling proposition (USP). What makes the bank exceptional? Open Question #5 What makes your bank exceptional? Be specific. It’s not as simple as saying that Price, Product, Place and Promotion are hard for competitors to duplicate. The Unique Selling Proposition (USP) An important principle of services marketing is the creation of a USP. This USP is the bank’s marketing ‘drumbeat’. It is incorporated into the bank’s brand and it is what makes the bank exceptional as perceived by the consumer. It is the answer to the question: what is the bank’s key differentiator? DO There are essentially three components of a bank’s USP: there must be a transfer of customer value; it must be unique when compared to other bank’s offers or be a new offer in the market and, finally, it must address a large consumer needs-gap over an economically viable market segment. The last component is critical. Long-term success in a bank’s marketing strategy is based on addressing a large enough customer needs-gap for a large enough market. Examples of USPs in the service industry are: • Domino’s Pizza’s unique selling proposition is not based on best price or highest quality product. Rather it is just fast delivery. Their unique proposition is: Fresh hot pizza delivered in 30 minutes or less, guaranteed. • ING Direct’s unique selling proposition is not the best price or best product. Rather it is no fees – entry or exit. Their slogan – money does not grow on fees – captures its USP. However, it should be recognised that these examples of USPs will not remain unique over the long term as competitors seek to duplicate and guarantee even better propositions. For this reason, many firms seek to add another dimension to their USP – an emotional component. Examples of this added emotional dimension are Rolex watches and Ferrari cars. Neither product is unique in functional terms when compared with competitors. But there is an emotional attachment to owning a Rolex or a Ferrari that is not necessarily present in similar products even at higher prices. © Retail Banking Academy, 2014 111 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I We propose that retail banks cannot create USPs based on the 4P or even the 4C model over the long term. Indeed, it is the main reason why we propose the 4C + P model where P represents people. Retail banks should create a USP based on customer intimacy driven by the unique professional and ethical qualities of its people. A USP that is truly based on the bank’s culture of customer care* will be ‘emotionally-driven’ and persist over the long term. Relationships NO TC OP Y Another principle of services marketing is the recognition that services companies must view the customer as a partner over the long term. While marketing strategies are intended to identify customer needs and to create products and services to meet these needs, the bank seeks to accomplish this objective, profitably. From an end-goal perspective, the bank seeks to address the following issues: 1. Customer retention: a poor retention (i.e., attrition) rate means that the firm must spend relatively more on promotion and sales to replace the customers that are lost to competitors. 2. Customer acquisition: it is generally easier to identify the firm’s best customers and target new customers with similar profiles. 3. Cross-selling: it is generally easier, and therefore more profitable, to make an additional sale to an existing customer than to make a first sale to a new customer. This additional sale may be increased volume of existing or new products – as viewed from a customer perspective. In the 4C model, convenience is viewed as the bank’s suite of channels. While alternative channels such as internet and mobile may be convenient for customers to transact payments or make deposits etc, they give banks more opportunity to interact directly with the customer. The key for this approach is that it should be customer-directed not ‘directed-at-customers’. Therefore, it is a two-way, not one-way process. Dialogue is key and this type of marketing is central to supporting a customer-intimacy business model that is recommended when considering the bank’s USP. DO Segmenting for success Market segmentation has assumed even greater importance today, as channel and product choices expand. This is especially true for retail banks as new technology has created significant inroads in the industry over the last decade. Competition on price alone is a ‘no-win’ strategy (especially for retail banks, unless the organisation is a direct bank). A strategy of mass selling was tried in the past by many retail banks and it failed. Targeting creates focus, and focus equates to effectiveness. Therefore, the key to success with segmentation is identifying new, different and better ways of providing solutions to each customer group. Of course, an organisation needs to get the segmentation right (e.g., choose the right factors and parameters that define the differences) for maximum impact. Enhancing customer value through target segmentation is one of the primary means of delivering superior shareholder returns. Selling all things to all people is the path to ‘averageness’. We end this section with useful advice from a leading marketing expert. It captures, succinctly, the set of principles outlined above: * 112 Retail Banking II includes a module on Customer Care. ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I “If the marketer does a good job of identifying customer needs – developing good products; and pricing, distributing and promoting them effectively – these goods will sell very easily.” * DO NO TC OP Y We now describe the marketing process that culminates in a marketing plan. * Philip Kotler and Gary Armstrong, Principles of Marketing (9th Edition, Prentice Hall, 2001). © Retail Banking Academy, 2014 113 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I NO TC OP Y Chapter 3: The Marketing Process The marketing process describes the entire chain of events from market analysis to evaluating the effectiveness of marketing programmes. In this process lies the ‘stuff’ of marketing – the tangible pieces. There are many different ideas about what constitutes the marketing process – how the process should work and the key components. Some examples list three steps, some four steps and others five. Some variations call it marketing strategy or the market plan or market planning. For our purposes, we will describe a process with five steps. The most complex piece of this process is developing a marketing strategy (step two), which actually contains a series of substeps within it. These five main steps are: DO 1. Analyse the market – look for opportunities 2. Develop a marketing strategy 3. Create a marketing plan 4. Execute the plan 5. Evaluate, redesign and optimise (marketing audit) Step 1: Analyse the market In the first step of the process, the goal is to look for opportunities in the general marketplace. If an organisation has an idea for a new product, it wishes to redesign an existing one and/or wants to expand into new markets (geographies or segments), this is the time when the viability of the new idea is tested. The objective is to study the market, customer competition, users, industry and economy and to establish benchmarks for performance. Success here depends on the accuracy with which things can be measured. Therefore, it is advised to use professionally conducted research. This ensures that you are kept in the know and the data given back is an accurate picture of the market and opportunity. Understanding the market allows you to target promising market segments that suit your strengths. 114 ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I Some key questions that can be asked in this step are: Who are the users of products like yours? Divide them into different categories to help you spot the best opportunities. For example, a retail bank might use three levels of segmentation: retail consumers generally, a segment (e.g., affluent) and the type of buyer (e.g., self-directed). The corresponding products are credit cards (for all customers), Gold credit cards (for the affluent) and a web-based credit card balance management feature (for the self-directed). • What do the users value most in products like yours? How do they choose between different suppliers? • How can you reach the customers? Or, put another way, how do your customers purchase your product? The obvious channels might include direct sales, wholesalers, retail, agents and distributors and the internet. Consider alternative channels and influencers. For example, one accounting software company built its success on using the accountancy profession as a channel to reach smaller businesses. • What size is the market? Is it expanding or declining? What are the key trends? Be realistic. For example, the market for a high street shop is probably restricted to people who already visit the town centre. • What is the competition doing? Profile your competitors and their products. Ask their customers why they prefer the competitor’s products to yours. • What other factors influence your business environment? For retail banks, these include regulation and legal compliance as well as capital constraints (e.g., Basel III). NO TC OP Y • One tool that is commonly used during this step is the SWOT (strengths, weaknesses, opportunities and threats) analysis revealing your organisation’s (or product’s) position in the marketplace. It is a good way of summarising your position in each key market segment vis-à-vis your competitors. DO Here are some tips on using SWOT analysis: “Identify the critical success factors for you and your competitors. Give each factor a weighting (out of 10) according to its importance. Critical success factors might include product performance, range of products, speed of order fulfillment, customer service and low costs. Score your business for each factor and multiply the score by its weighting. Then repeat the process for each competitor. By listing the results in a table you can present a clear picture of your relative strengths and weaknesses. Lastly, identify opportunities and threats by brainstorming ideas using two headings: 1) organisations (and individuals) that directly affect your business; and 2) the broader business environment (e.g., new technology, tax, legislation).”* Doing extensive research at this juncture is vital to getting your marketing right. As we will see, research can be used at several points in the marketing process. Research is like a steering compass for a ship – it tells you where you are and where you are going. However, when conducting market research, to do it right, an organisation needs to follow a defined process. Define the marketing opportunity, establish the research objectives, develop the research plan, implement the plan, analyse the results and identify ‘findings’. There are several approaches to conducting market research. These include: • ‘Desk research’ is a term used for finding information in the public domain – internet, books and journals are constantly updating information, which is usually free. • Syndicated research studies. These are bought from organisations that continuously examine aspects of the industry. • Qualitative and Quantitative Research. This entails engaging a research agency to do some * Source: is4profit <www.is4profit.com>. © Retail Banking Academy, 2014 115 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I detailed study on a selected area of concern or interest (representative sample), such as a service quality survey; or customer usage, habits and attitudes. • Customised surveys. This means designing and conducting your own research (can use industry partners). Step 2: Develop a marketing strategy NO TC OP Y Crafting a marketing strategy is the foundation of the marketing process. As with defining the overall marketing process, there are many definitions of what strategy is and the type/number of sub-steps involved (we will use the term ‘sub-step’ so as not to create confusion with the term ‘steps’ used in the overall marketing process). However, we will keep our definition straightforward and practical. Therefore, there are three key steps in the strategy development process, which are as follows: a) Develop the USP (unique selling proposition) – differentiation and positioning. b) Define the target markets (customer segments). c) Determine the marketing mix, the 4Cs + P. The first sub-step part ‘a’ is developing the USP, which we have already defined. However, we will provide a few more insights. Some tips on USP development: • Identify and plan at least five clear USPs that define exactly what you offer that the broader market doesn’t. • Talk to potential customers about whether they would be persuaded to buy from you rather than a competitor. • There are a wide variety of product or service USPs to choose from or create. • The USP must incorporate a unique customer value. DO Differentiation and positioning are two key concepts that drive the effectiveness of the USP. Differentiation is what distinguishes the product/service from the competition. These can be physical (e.g., quality of branch design) or non-physical (e.g., speed of delivery, loan-processing time) distinctions. Positioning is creating a distinctive place in the market via the main benefit/ value from the product/service. Positioning is also linked to brand recognition (e.g., ‘that bank is safe’). The USP is the real foundation for success – without one that is different, valuable to customers and positioned well, success in marketing will be nothing but an illusion. In the section on marketing research, we mentioned that research could be used at different points in the marketing process. Development of the USP is one of these points. The type of research primarily used at this stage is of a qualitative nature (as opposed to quantitative). Small group research of six to 10 people is a common approach. The feedback is usually related to the subjective views of the people (who may or may not be customers) and/or experiences that they are willing to share with the researcher in the group. Results from these focus groups are often difficult to interpret. Using professionals who are good at finding pearls of wisdom and insights from the proceedings is sensible. When interpreting the results, organisations are likely to be biased by the negative aspects in the information. Therefore, interpretation needs to be objective and constructive. An organisation can also use ‘mystery shopping’. Mystery shopping is a tool used externally by market research companies or watchdog organisations or internally by companies themselves to measure quality of service or compliance to regulation, or to gather specific information about products and services. The mystery consumer’s specific identity is generally not known by the establishment being evaluated. Mystery shoppers perform specific tasks such as purchasing a 116 ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I product, asking questions, registering complaints or behaving in a certain way, and then provide detailed reports or feedback about their experiences. If done effectively, mystery shopping can provide exceptionally useful feedback. Again, as with other research, it can be used along several points in the process, even after launching a product. NO TC OP Y The second sub-step (part b) is targeting (or segmentation), which is defining the customer or customer groups to whom an organisation will market its products. Important here is to establish the potential size of the market and thus the opportunity for the bank. With a clearly defined target, a market audience, it is much easier to determine where and how to market your company. Choose specific demographics to target – figure out not only who needs your product or service, but also who is most likely to buy it. When defining groups, one should consider demographic factors such as the following: age, location, gender, income level, education level, marital or family status, occupation and ethnic background. Also, consider the psychographics of your target customer group. Psychographics are more personal characteristics of an individual and these include such things as: personality, attitudes, values, interests/hobbies, lifestyles and behaviour. Determine how your product or service will fit into your target’s lifestyle. How and when will they use the product? What features are most appealing to them? What media do they turn to for information? Do they read the newspaper, search online or attend particular events?* As described, target markets eventually translate into customer segments. In the beginning of this module, we used the term ‘segmenting for success’. We cannot overstate the importance of getting segmentation right. For retail banks, these segments are usually mass and affluent (maybe private), and on the business side, SME. Some more sophisticated and larger banks have both mass affluent and affluent (two sub-segments within a segment), and micro and SE (small enterprises) within the SME area. Some banks with a ‘matrix’ organisation may even overlay product (e.g., credit cards) and/or geographies (e.g., EMEA) on customer segments (direct and indirect reporting, solid- and dotted-line, etc.). Just remember, the more complex the organisation structure, the more difficult it is to execute. If you are confused by internal structures and it is not easy to get things done, can you imagine how your customer feels? DO The final sub-step in the marketing strategy development process is determining the marketing mix (sub-step three or part c). We have already mentioned the 4C + P marketing mix. The first C refers to benefits or value transferred to the customer when he/she purchases the product or service from the bank. These will be perceived by the customer to be truly benefits if the product/service matches their needs. The next C is cost to the consumer which is synonymous with price in the 4P model and relates to things such as list price, discounts, payment period and price point (inflection points in the price-demand relationship). Pricing can vary by channel, segment and sometimes with each ‘deal’. An abundance of pricing formulas and concepts exist (especially for retail banks that have whole pricing departments). Some key questions on price include: what is the value of the product/service to the buyer? Is the customer price sensitive? What discounts should be offered to different segments? Convenience refers to the set of channels of distribution – how a product is delivered and/ or the place where the ‘experience’ occurs. This also refers to geographic coverage (different geographies may have different channels) and can vary by segment. Some key questions related to place: where do buyers look for the product/service? How can customers access the right channels? Is face-to-face selling effective? The last C is communication. Communication strategy must identify the best medium to inform consumers of the bank’s offers. The main message should be the bank’s unique selling proposition that promotes the three components stated above – customer value, uniqueness, and emotional attachment. * Mandy Porta, Success Designs <successdesigns.net> (2009) © Retail Banking Academy, 2014 117 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I Finally, the last component of the marketing mix is people. This is extremely important for services marketing and decisions must be made as to what core competencies are required and, consequently, if there is a competency gap. If such a gap exists, how will it be filled? Part of the value transferred to consumers (first C) is actually the positive customer experience created by having the right people with the right behaviours in the right job. In summary, at the end of step two, an organisation should have the product (or service) features and benefits, and the price determined. It should also know through which channels it will sell and provide after-sales service, and how it will promote the product. Now it is time to develop the marketing plan. Step 3: Create a marketing plan NO TC OP Y Using the term marketing plan may seem a bit confusing at this point (which is why there are many iterations on how to do marketing effectively), as we have used terms such as process, strategy and plan. However, we should think of it in this way. The marketing process is the overall summary of the activities from analysis to launch to evaluating effectiveness. Within this process, we have to develop the strategy and, based on that strategy, develop an individual plan for each product or service. Therefore, financial forecasting and tracking (e.g., annual budgets for volumes of a product) is a key component of the marketing plan. The plan is usually for an individual product or service but may also be for a group of products – credit cards versus gold credit cards. As stated, the plan is budget driven. It is detailed by number of units, customers, volumes, revenue and/or profit – by segment, geography, etc., and is timeconstrained (the plan is usually annual, but may also be quarterly in dynamic environments or for short-life-cycle products). The plan builds on everything that happened in steps one and two of the marketing process. DO The output (or plan itself ) provides a budget for the year ahead, showing what you aim to achieve in terms of sales, profits, etc. The next part is to prepare forecasts showing what you expect to achieve. These forecasts should be updated monthly, looking 12 months ahead (or to year-end). Coordination with product, segment and finance leaders is critical. As we have shown, the structure of the overall organisation, as well as the structure of the marketing department, will affect the ability to budget and forecast effectively, as well as affecting our next two steps, execution and optimisation. Step 4: Execution Step four, execution, is really implementation of the marketing plan developed in step three. Marketing communications is the key driver of marketing plan execution. While budgets are set in step three, there is most room for variation in what actually needs to be spent in the area of communications strategies. In essence, it is a bit of a test-and-try approach as the product or service is introduced. Campaigns play a big role (especially in the ‘mass’ part of retail banking) in the initial sales push. The area of marketing communications covers a wide range of marketing aspects – advertising, direct sales, promotions, direct marketing, digital/online marketing, etc. The communications approaches must support the marketing plan (as we now can see, the steps in the marketing process are all part of a value chain). For marketing communications effectiveness, the tools/ approaches used must be customised based on factors such as the life cycle of the product, the market share position of the organisation and the specific audience. For example, having a leadership position in a market (brand recognition) will certainly affect the advertising media used, as opposed to being a brand-new player in the market. Another distinguishing factor is between push-and-pull communication approaches. From a definitional standpoint ‘push’ equals presenting the product directly to the customer, such as with a direct sales force (do you want to buy?). ‘Pull’ equals persuading the customer to use the product through things such as advertising (television, web banners, etc.) and sales promotions. 118 ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I This is important because as we have just seen, things like market-share position can affect the techniques used. Therefore, a push versus a pull approach may be better used in certain situations and vice versa. For example, using an aggressive, push strategy to get ex-customers back (who left because of poor service) may not be effective. From a strategic-positioning standpoint, the quality and consistency of the communication elements – same look and feel (branding) – is essential. What goes hand in hand with brand is the communication tone. This tone should be evident in everything; and every employee must conform to the positioning style chosen to represent the business. This is called tone of voice. NO TC OP Y From a physical-branding perspective, everything that the customer sees and receives in written or electronic messages – style, colour, design, or forms, letters, brochures, mailers, statements, chequebooks, passbooks – needs to portray the brand image. The branch outside and inside – exterior signage, interior decor, the segment branding (affluent), the colour combinations – all must be the same across geographies. Brand image is even more important for non-physical products or services, because the representation of the brand and the things around the products/services become associated with that product or service itself. For example, the way a customer views their current account may be subject to the cleanliness of the branch or the look and feel of the website, etc. Related to tone, one of the most challenging and delicate jobs in marketing is managing perceptions. This is tied to brand image. For example: • Upscale market: You may decide to take the superior position (superior knowledge or skills or quality equals a tone that is always superior, suggesting a supreme position – you are like a royal/academic institution). • Middle market: Positioning like a BMW (slick, efficient, cool, smart, modern and stylish, tough, business-like, a lot of ‘attitude’). • Broad-scale market: People’s bank that can afford to be friendly – a mascot, a teddy bear or a piggy bank set the tone: simple, caring, friendly and kind. DO The three messages above have a very different tone and therefore create a very different brand image. The first might be a private bank; the second a new and innovative online bank targeting young professionals; and the third, a local community bank. Finally, we will briefly discuss the role of corporate social responsibility (CSR) in marketing communications, which is also tied to brand image (above). For retail banks – and really for most industries – community and social involvement is a must. Sports sponsorship is one popular way to do this as it tends to be apolitical. However, the corporation needs to be not just seen as serving the community but actually doing so. Retail banks used to be called community banks and branch managers were seen as ambassadors to the local area. Maybe it is time to get back to this. Retail banks certainly need an image boost. This is good for employee morale, is great public relations and supports positioning. Step 5: Structure and controls The last step is measuring implementation effectiveness and redesigning pieces of the marketing plan where necessary. We will discuss this briefly. The key message here is that implementation effectiveness is the key to ongoing effectiveness. As discussed, the right organisation structure – clear roles and responsibilities across functions – will assist this step. Also, real ownership of key parts in the marketing audit process is critical. Continual analysis and testing is needed. The approach should support the saying ‘find problems before they become big issues’. This module has considered the key principles of services marketing and describes the main steps in the marketing process. We now apply these concepts to retail banking. © Retail Banking Academy, 2014 119 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I NO TC OP Y Chapter 4: Marketing in Retail Banking Even though we have brought in examples of retail banking as we went through the marketing process, let us now focus specifically on some of the retail banking industry’s characteristics. Specifically, how these industry characteristics affect the approach to marketing. In general, the core principles of marketing apply across all industries: the USP remains essentially the same in terms of its key attributes, whether banking or pharmaceuticals, although arguably, retail banks have struggled with developing a really powerful unique selling proposition for many products or services. The real difference is in the application of some of the principles, which is influenced by specific industry dynamics. DO Retail banking is clearly a unique industry. All true banks have two rudimentary commonalities – accepting deposits and facilitating commerce, usually by lending funds. This process of financial intermediation has conferred on retail banks, a unique specialisation. Arguably, most retail banks have not capitalised on this advantage and find themselves on the back foot due to customer revolt (e.g., surveys show loss of trust) new market entrants (e.g., retailers) and regulatory pressures (e.g., Basel III and Dodd-Frank in the US). Some key industry issues for retail banking which have affected the way marketing is being thought about and delivered include: • Technological convergence. Information technology, combined with digital explosion and the introduction of mobile devices • Banking technology – hi-tech to hi-touch in the information age, customer first • Customer mobility – borderless banking, anytime and anywhere • The internet – entering the global economy • Balancing customer-centricity and remote channels • New industry competitors Clearly, much of what is changing retail banking has to do with technology. Innovation is not only driving new opportunities for banks but also new competition and complexity. For the purposes of this section, we will stick to discussing the core marketing mix and identifying some 120 ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I of the unique properties/areas of the 4Cs +P in retail-banking marketing. Customer Value For retail banks, as we have already discussed, the products are mostly non-physical products (including packages or bundles) or services. Because of this uniqueness, the element of service becomes even more critical as a value driver for success. Therefore, there is a need to know the customer even better, hence the extreme focus in retail banking on developing customer relationship management (CRM) systems, which we will discuss in the final section. Convenience NO TC OP Y Also, not all people qualify for retail banking products, e.g., loans or credit cards. In most other industries, it is simply a matter of whether a consumer can afford the product or not. In this instance, however, a customer may be able to afford the monthly payments or fees and even have the required amount of security deposit, yet still be rejected for a loan. Therefore, when marketing lending products, an all-out push to sell can be counterproductive, as many customers may not qualify, especially in today’s tight-lending environment, which can have a negative ripple-on effect from a public relations perspective. Most of the unique points of marketing relate to distribution channels because this is where the industry trends related to technology have had the most impact. Real-world channels (branches, ATMs, kiosks, DSAs and landline telephones, call centres) are now all connected with access to the virtual world of the internet. Therefore, multi channel management is becoming increasingly important for retail banks. What this affects is a bank’s ability to understand and coordinate the intersections of products, segments and channels effectively. Also, management of the relationship across channels is critical as it may make or break the relationship. For example, a loan product is sold to a busy customer over the phone and they need to sign some documents in person at the branch. The customer shows up to the branch at the scheduled time without documents. This relationship is probably damaged beyond repair. DO The majority of payments are now made online in established retail banking markets because payment is quickly moving to the virtual world. It is fast and convenient for both the bank and the customers. Cash can still only be obtained from the branch or ATMs but payments can be made via the internet – and, increasingly, on mobile phones. It enhances the convenience factor to the customer, meets their needs and is even happening in emerging economies, although not to the same degree as cash is still popular. From a marketing perspective, the number of touchpoints is growing rapidly. Therefore, retail bank marketing departments need to be coordinated both internally and with other departments now more than ever. Though many people are computer savvy, some are still uncomfortable when using computerbased processes. Suitable alternatives have to be in place to satisfy all customer needs – so we have the branch. There was a time when the customer went to the bank branch frequently – to feel good about their money being safe, meet a banker, etc. But the world is changing fast. Branches and staff are expensive to maintain and they do not operate 24/7. On the other hand, most remote channels are always accessible, 24 hours a day, 7 days a week, and 365 days a year. So what does this mean for branches – the most effective marketing channel for retail banks in the past? The message: do not give up on branches yet. Branches will remain relevant in the future as relationship management is best done in a face-to-face setting. To date, no other channel beats branches as a sales-delivery channel (still 70 to 80 percent of the total). While new formats and styles need to be explored, the role of the branch as an advisory office dealing with complex sales and service transactions will be enhanced. From a marketing perspective, retail banks need to understand this changing role of the branch. Finally, a new and pervasive challenge for banks: Web 2.0. This has created a new wave of action that connects the internet via Facebook, Twitter and a host of new social media. Banks need to © Retail Banking Academy, 2014 121 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I identify which customers are comfortable or familiar with the new virtual media and how to use this positively from both a delivery of marketing messages perspective and as a way to capture customer feedback. Though clearly, the younger generation is considerably more open to this type of contact and much more interactive with these types of media. However, the role of social media in retail banking, and specifically as a marketing channel, is still unclear. Cost to Consumer Communication NO TC OP Y From a pricing perspective, most of the focus is on price and fees. However, retail banks cannot really compete on price – retail banking is a commodity industry and the prices are generally set by the market. A bank could price its deposits 200 basis points higher than the market and would capture share, but also would probably go out of business or be rescued by the government. That being said, retail banks do use techniques such as risk-based pricing and relationship pricing (a new concept that we will discuss in the last section). The message from a marketing point of view is simple: be competitive, offer incentives, and reward customers. The more transactions, balances, ATMs, the more discounts and/or services received. Retail banks need to understand the price sensitivity of customers by product, but from a marketing perspective, focus your energy and money elsewhere. Regarding promotion, there are not many important differences for retail banks. However, there is an important point to note here. As with other industries, there is a potential downside to direct marketing, prevalent in retail banking/CRM. Over-communication, chaos and clutter, fraud, deception, privacy invasions: all can occur, especially with the increase of touch-points as we have seen. This can clearly destroy relationships. As with channels, coordination of marketing campaigns is critical – a 360-degree view of the customer is needed. Given all that we have discussed in this section and the impact of technology in retail banking, should your bank become an internet bank? Or will you simply have a network of branches and ATMs connected electronically? Credit cards and debit cards, accessible through the internet? Updates on mobile phone and other devices? Call centres, sales and/or service? Let’s see in the final section how retail banking should evolve, and the role of marketing in this evolution. DO The role of the People in the 4C+P model in retail banking in particular, is now demonstrated Marketing and Customer-centricity – Comparing CMR with CRM For most retail banking organisations today, the way to sustainable competitive advantage is through adoption of a value discipline (proposition) focused on customer intimacy – not one based on product leadership (such as Apple) or operational excellence (such as UPS or DHL). While retail banks need to have good/competitive products and make the customer experience easy, the ultimate strategic goal should be to meet the long-term needs of customers and not simply sell products and/or services. In looking at the operating model for customer intimacy, the ‘core’ model is always externally focused on customer needs, while around the core processes itself are culture, organisation, management systems and information technology. As we have discussed, the USP, the core of your marketing message, needs to support the value proposition of the organisation. As a result, marketing for retail banks must be customer-centric. Many organisations aspire to be customer-centric, yet few have figured out the recipe for successfully transforming their business. Most retail banks have used CRM as a system (analytical engine – software; and operational piece – software, campaigns and sales tools) as the way to connect with customers (campaigns, next-best-offer, etc). As a result, the system took the place of human interaction. 122 ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I However, retail banks will only achieve improved results in this customer-management world if marketers quickly understand and embrace a new concept called customer-managed relationship (CMR). This is a new way of thinking about marketing initiatives, different from CRM (the ‘managing’ component changes), and it means that the whole organisation must understand that the customer is in control. Also, it leverages off of the wave of technological convergence occurring in retail banking as well as the new delivery channels entering the industry. CMR is three things: An ability to rethink and reshape your organisation and its knowledge for increased customer engagement • Internet-enabled management tools for true customer empowerment • An ability to react to the information being generated and used by customers for an improved management of online reputation NO TC OP Y • If executed correctly, CMR generates some major benefits over CRM: it is easier to implement since the customer is usually the one doing the complex stuff; it creates lock-in since customers have invested their data with the organisation; and it allows your company to move faster than the competition, as a trusted relationship is being built with the customer. In most cases, customers prefer to have a choice over how marketers reach them, what products or services are marketed to them, and who markets to them. CMR is indeed about the collaborative customer experience. It is the convergence and integration of multiple data points which leverage customer interactions and Web 2.0 applications and services. Forwardthinking companies are taking the first steps towards incorporating Web 2.0 applications into their marketing and CRM processes.* DO The challenge for retail banks in this new approach to marketing is how to integrate the new media into the customer experience, especially in a solutions-driven environment, and how to react to the shift in power back to the customer. While this power shift may seem like a subtle point, developing an appropriate response is not easy. It emanates all the way from how the CEO communicates to the market to the tone of an SMS going to a client. Therefore, this shift borders on being a culture-change process for most retail banking organisations. Relationship marketing While CMR is an actual tangible process, relationship marketing, one-to-one marketing, is more of a concept or strategy. It was first defined as a form of marketing developed from direct-response marketing campaigns. These types of campaigns emphasise customer retention and satisfaction, rather than placing a dominant focus on sales transactions or making a sale. In fact, much of relationship marketing does not focus on sales at all, e.g., free product trials to good customers, etc., and may actually result in a net cost to the organisation (investing in the customer). As a practice, relationship marketing differs from other forms of marketing in that it recognises the long-term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. Clearly, the process of CMR falls into the category of relationship marketing. Relationship pricing Relationship-based pricing is a concept that encompasses the whole life cycle of a customer by segment. It is a customer-centric framework that helps retail banks to treat each customer uniquely, based on the overall relationship value. It requires significant investment in technology; but as we said, customer-centric organisations need to have a 360-degree view of the customer relationship. * Source: Christian Smagg, Futurelab, <www.futurelab.net>, (2007). © Retail Banking Academy, 2014 123 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I “Relationship pricing involves pricing based on parameters that define your relationship with your customer – this would mean taking into account your customer’s loyalty period, the total volume of business (or revenue), the volume and type of transactions over a period of time for each of the services you offer, etc.” The question here: is relationship pricing a compelling differentiator that can maximise customerwallet share? Clearly, this approach can help maximise value for both customers and retail banks. However, we said earlier pricing was less important for retail banks as a marketing tool. Therefore, as this is a fairly new concept, we shall have to wait and see how customers react to this approach. The role of customer satisfaction NO TC OP Y Do you assume that your customers are satisfied? If so, how satisfied are they? Now that you have obtained the right customers, is the business building up well or are you having retention problems? These are questions that can be answered through the process of customer evaluation (determining their satisfaction levels). Remember, we have said that the best business development advocate is a satisfied customer. Therefore, knowing the state of the customer mind is essential. One of the techniques becoming more widely used today by retail banks as a measure of satisfaction is net promoter score (NPS). This is basically a measure of how willing customers are to recommend your product/service to friends and family members. When conducting satisfaction surveys, ask customers specific questions about • The bank’s overall competitive rating (how does the overall service compare with others) • Products and services (solutions) • The speed of service/convenience • Suggestions on improvements DO This should be done periodically (at least annually) and results should be compared with previous years to show that there are improvements. Employing a dashboard approach – senior management has service as a key component on the dashboard used to evaluate business performance – allows for commitment and frequent assessment of the organisation’s value to the customer. Also, this is owned by both marketing and sales. The following is an excerpt from a popular website about the relationship. “Related to customer satisfaction’s role in marketing – it plays a huge role in the success (or failure) of any marketing campaign. Creating a successful marketing strategy begins and ends with knowing your target audience. Therefore, make no mistake – an organisation will not find marketing success without a large measure of customer satisfaction. As we have said, wordof-mouth is a powerful marketing mechanism (in essence, NPS) – one satisfied customer tells another and suddenly, a business is growing without spending money on traditional advertising media. “Also, great customer satisfaction can be used in the marketing itself (differentiator). That being said, a well-executed marketing campaign can destroy a business that is not already skilled in the art and science of customer satisfaction. A well-run advertising campaign will bring new customers to your business… and then it’s up to the company/staff to live up to the promises made in that advertising campaign.” * Just as a product should never be launched with flaws in its design, a marketing campaign should not be launched if a retail bank is not organisationally ready to meet all aspects of customer expectations. * 124 Source: Beyond Niche Marketing, <www.beyondnichemarketing.com>. ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I Innovation From an innovation perspective, marketing is being tested in the retail-banking space. One area we mentioned related to new and more effective marketing techniques is anticipating customer needs before they know them. From these possible drivers of decisions and unstated, unmet needs come clues to the most effective innovation and improvement opportunities. The answer is not always a new product. It is not always process improvement. It is not always any one specific thing. But it is always something that helps the customer believe that he or she is more powerful, more appreciated, more informed, and more fulfilled. From that comes not only new growth, but also more loyalty, which means sustainability.* Summary NO TC OP Y Some other areas of innovation: dynamic pricing (e.g., relationship pricing), and new forms of promotions and advertising in the digital media space, although social media is less an issue for retail banking currently as the industry tries to understand better the role of this channel in the future. Also, innovation is happening with new or combined electronic distribution channels, e.g., online branches, and new or combined services/providers, e.g., mobile network operators and retail banks with joint product offerings or co-located in the same physical space. This module has provided an overview of the key marketing principles, the process, how it applies to retail banking, and a recommended approach in the future. Other modules at higher levels (Retail Banking II) will go deeper and more extensively into these issues. As we stated in our section on the approach to customer-centric marketing, the path to success for retail banks is developing a customer-centric business model with marketing as a key contributor. The good news is that many retail banks have started to move away from product-pushing approaches and commission-based selling; however, the industry as a whole still has a long way to go. DO As we wrap up this module, one thing should be clear when looking at the marketing process: all steps are connected. While some will talk about one aspect being more important than the other, all steps must be performed to a world-class level to truly achieve customer-centric marketing effectiveness. Also, creating an effective feedback loop is critical. 105.5: Marketing steps As retail banks go from reactive to proactive, from everything-to-all to a more tailored-solution approach, from CRM to CMR; and as the industry absorbs the technological changes occurring, marketing will play a key role in separating the winners from the rest. However, this journey will be fraught with challenges, and as soon as one retail bank thinks that it has cracked the customer code; new channels, products and competitors will cause disruption in the marketplace. That being said, the key points to keep in mind are: • Develop and execute a detailed marketing plan and strategy. Do all the steps well. • Ensure your USP continually supports a customer-centric business model. * Source: The Ball Group, <www.ballgroup.com>. © Retail Banking Academy, 2014 125 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I • Put the customer first – the customer at the centre… and listen to customers. • Market solutions – do not just sell products and services. • Coordinate the channel experience (from both a marketing and sales perspective) to provide a world-class customer experience. • Understand that marketing is not just about brand only – measure, measure, measure. • Move to CMR (and experience-management). DO NO TC OP Y In the words of one of the most respected business minds today, Peter Drucker, “Marketing is the whole business seen from the customer’s point of view.” 126 ACADEMY Course Code 105 - Marketing RETAIL BANKING ACADEMY RETAIL BANKING I Multiple Choice Questions 1. Consider the following statements regarding the 4P marketing mix framework: a) It is product-focused b) It is customer-focused c) Booms and Bitner added three more Ps – participants, process and physical evidence d) Judd added one more P (people) to the 4P model I: b) and d) only II: a) only III: a), c) and d) only IV: b).c) and d) only NO TC OP Y Which of the following is a correct option? 2. With respect to the 4C model proposed by Lauterborn, convenience in the case of a retail bank is mostly associated with: a) Location of bank branches b) A wide set of channels with easy accessibility c) A product that best matches customer needs d) A price that is competitive 3. Which statement best describes the ‘heterogeneity’ attribute of bank services? DO a) Bank services are not storable, leading to problems in capacity planning b) Bank services are intangible and customers may face a risky choice c) Bank services are not standardised and customers may face some level of disappointment d) Bank services are delivered and consumed by the consumer at the same time 4. Kenrick et al criticised Maslow’s theory of hierarchy of needs on the grounds that: a) Needs should not be categorised as high order (e.g., self-actualisation) and low order (e.g., physiological, safety, belonging and esteem) b) Consumer needs exist at all levels and even when satisfied may reappear later when environmental cues dictate c) Maslow’s theory is too ethnocentric and omits the role of cross-cultural differences d) Customers have more than needs, hence Maslow’s theory is incomplete 5. Based on the 4C+P model, a retail bank may most likely differentiate itself from its competitors over the long term on which of the following factors? a) Consumer Value b) Consumer Cost c) Convenience d) People © Retail Banking Academy, 2014 127 Course Code 105 - Marketing RETAIL BANKING RETAIL BANKING I 6 . In which of the following cases does a bank face less price competition in relation to its offers? a) High customer switching cost b) A positive customer-bank relationship c) High customer service quality Which option comprises correct statements only? NO TC OP Y I: a) only II: a) and b) only III: c) only IV: a), b) and c) 7. Which of the following steps in the development of a marketing strategy is associated with differentiation and positioning? a) Developing the bank’s unique selling proposition (USP) b) Conducting a SWOT analysis c) Determine the target customer segments d) Determine the marketing mix 8. In the expanded 4P model, Booms and Bitner added three additional Ps. Which refers to the surroundings in which the service is delivered? a) Participants b) Process c) Physical Evidence d) People 9. The main purpose of market research is to obtain information so that the bank professional can make decisions with respect to: DO a) Marketing mix b) Market opportunities c) Strength of competition d) Forecasting consumer current and future needs Which option is correct? I: a) only II: b), c) and d) only III: a) and d) only IV: a), b), c) and d) 128 ACADEMY RETAIL BANKING ACADEMY Course Code 105 - Marketing RETAIL BANKING I 10. There are five steps in the marketing process. The most complex step is to: a) Analyse the market (SWOT) b) Develop a marketing strategy c) Create a marketing plan d) Execute the plan Answers: 2 3 4 5 6 7 8 9 10 III b c b d IV a c IV b DO NO TC OP Y 1 © Retail Banking Academy, 2014 129