CONSUMER PSYCHOLOGY AND MARKETING OF BANKING PRODUCTS

Karnataka Bank Staff Training College,

December 10, 2008

B.V.Raghunandan, SVS College, Bantwal

Consumer Psychology Individualistic

Need Based

Reacting to the Environment

Shaping the Needs to the Product offered in case of no choice

Both Rational and Irrational

Dominant Social Psychology

Marketing Concepts: A Business Attitude

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Concept

Marketing Vs Banking

Marketing Banking

Product Research

Target Consumers

Market Study

Flexible Operation

Free Operating Atmosphere

Salesmanship & Promotion

Consumer Sovereignty

Standardised Product

Mass Consumers

No Market Study

Professionalism

Rigid Operation

Regulated Atmosphere

Social Banking

RBI Sovereignty

Consumer Psychology in Traditional Banking

No Choice Standardised

Service Robotic Response Parasite Endless Patience Resigned for

Production Concept

Choice Based on Caste or Regionalism

Convenience (Location)

Single Branch Monopoly

Generally Rational decisions

Change Agents Liberalisation Narasimham Committee BIS at Basel IT and Networking New Generation Banks Capital Market Reforms FII & Foreign Insurance Companies Business Groups setting up Finance Co Bank Subsidiaries Offering financial

services

New Age Banking IT Absorption &

Networking Cross Selling of

Products Agency Sale of Products Bancassurance Listed Entities Capital Adequacy Interest Rate Differential Financial Services Bigger Role of Insurance

Companies

Risk Management Consolidation Advertisement Aggressive Marketing Wasteful Marketing

Practices More Consumer Care Flexible Timing Lesser Procedure ATM as Delivery

Channel & as a Branch Expansion Strategy

Consumer Psychology in New Age Banking

Spill over Effect of Traditional Banking Varied Needs of Customers Strong Segmentation of Markets Urban -Rural Divide Fusion of Marketing & Banking More Emotional Increased Distrust

Preferences of Urban Customers

Category I : Personal even if Inefficient

Category II : Impersonal & Efficient

Category III : Personal & Efficient

Preferences of Rural Customers

Relationship Marketing Early Banking Personal Service Higher Level of Patience Needs Guidance Basic Banking

Banking Products Own Products: Risk Free- Show the

superiority for Retirement Benefits and Free of Entry & Exit Load

Mutual Funds: Growth with Risk- Emphasise that it is not your product, suggest SIP for a Minimum of three years

Insurance Products: Risk Coverage with limited return

Conflicts

Profit Vs Customers Your Products Vs Third Party Products Dividing Marketing & Banking Rational Choice & Emotional Choice Consumer Sovereignty Vs Counselling Customer Service Vs Compliance with

Regulation

Agenda for Action

Investors’ Meet Creation of Database of Consumers Matching the Products to the

Requirement of Customers Creation of a Library at Branch Level Attending the Social Function

particularly in Rural Areas Joining Social Organisations and Social

Causes

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