Copy of TERM PAPER of Strategic Marketing 2nd Part

8/7/2019 Copy of TERM PAPER of Strategic Marketing 2nd Part

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4. Introduction

4.1. ORIGIN OF THE REPORT

This report on the study of The Concept of Marketing Strategy of a Banking Product in Bangladesh as part of Strategic MarketingManagement Course is submitted to, DR. RAZIA BEGUM, PROFESSOR &COURSE TEACHER, Department of Marketing, University of Dhaka. Thereport is submitted individually on December, 08, 2010 under thedirection of the Course Instructor.

4.2. PURPOSE OF THE REPORT

This report has two purposes:

This report is prepared primarily to fulfill the requirement of MBAcourse curriculum.The secondary objective and goals are:

To study situation analysis of the market for promoting aproductTo study about marketing mix strategies of developing aproductTo learn about financial and control process of promoting aproductTo study the market driven strategies to deliver superiorvalue.

4.3. OBJECTIVE

The purpose of the report is to acquire practical knowledge about theimplication of the Marketing Strategy for a Banking Product.

4.4. METHODS OF DATA COLLECTION

In preparing this report I have collected the necessary informationfrom the following source:

a. Primary Sources: Primary data was collected form theSoutheast Bank Limited Personnel. Branch Managers, HOexecutives and respective unit heads are interviewed who are

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jointly implementing this new product to satisfy the premiumcustomers.

b. Secondary Sources: Necessary documents prepared by theAnnual Report and Web Site of Southeast Bank Limited(www.sebankbd.com) and others related web links.

4.5. LIMITATION

During the collection of data some problems have been faced.The answer getting from primary source, they were very reluctant toanswer the question.On the basis of secondary data, the report has been prepared. So,some information gap or reliability and accuracy of data may bequestion mark.Time constraint was an important factor for collection of data.

No statistical analysis is done. The findings are not statisticallyvalidated. It isdone on a subjective analysis approach.

5. Company Profile

Name of the Company: Southeast Bank Limited

Chairman: Alamgir Kabir, FCA

Vice Chairman: Ragib Ali

Managing Director: Mahbubul Alam

Company Secretary: Muhammad Shahjahan

Legal Status: Public Limited Company

Date of Incorporation: March 12, 1995

Registered Office : Eunoos Trade Centre, 52-53, Dilkusha C/A

(Level 2, 3 & 16), Dhaka-1000

Line of Business: Banking

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Authorized Capital: Tk.10,000.00 million

Paid Up Capital: 3,422.64 million

Year of Initial Public Offer: 1999

Stock Exchange Listing: April 10, 2000 (DSE) & April 24, 2000 (CSE)

Phone: 9571115, 7160866, 7173793, 9555466 & 9550081

Fax: 99550086, 9550093 & 9563102

SWIFT: SEBDBDDHXXX

E-mail: [email protected]

Website: www.sebankbd.com

6. E-Banking

Electronic Banking is transforming the financial services industrythrough various impossible innovations. The quantity of cross-bordertrading and other financial activities is increasing geometrically makepossible by technology. It has been made possible by technology,particularly information technology to generate, collect and processinformation about bank operation and bank customers efficiently andeffectively. It provides the ability to create more effective systems of controls in individual institutions and in the market themselves.Compared to the paper based operation, Electronic Banking Systems,in its most proficient form, offer instant verification and transfer andreduces the flow of costly paper in the record keeping process.Application of technology in banking offer opportunity for reduction of both paper and people.

6.1. WHY THIS PRODUCT

Electronic banking (E-Banking) allow banks to expand their markets fortraditional deposit taking and credit extension activities, and to offernew products and services or strengthen their competitive position inoffering existing payment services. In addition, electronic bankingcould reduce operating costs for banks. More broadly, the continueddevelopment of electronic banking and electronic money maycontribute to improving the efficiency of the banking and paymentsystem and to reducing the cost of retail transactions nationally and

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internationally. Although many financial instrument and systems arenow considered as Electronic Banking came into the terminology of the financial world in the late 1980s, with the possibility of emergenceof true electronic money. All sorts of back-office informationmanagement technology and financial services using electronic

devices can be included into the term Electronic Banking. Thedevelopment in information technology has contributed positively toeconomic growth through several channels. ICT has led to productivitygrowth through the impact on activity processes. Banks have beenincreasing their own size and financial strength and expanding thescope of their products lines to meet the growing demand of on- linereal-time financial services.

6.2. Structure of electronic banking

E-banking is a general term referring to various computer-basedtechnologies for delivering banking services. Electronic bankingsystems can be divided into two categories by the functionalcharacteristics, viz. back-office electronic banking, and electronicfinancial instruments or front-office electronic services. Back-officeelectronic banking provides information management services, andquick fund transfer facilities both for traditional banking and financialinstruments and electronic financial instruments. Science inception of primary forms of electronic banking it has been passed through acomprehensive evolution process. Electronic banking services can begrouped into three generations of evolution:

Categorization of electronic banking services

Generation of electronic banking

Back-office Front-office

First generation Ledger, Cash management,Head Office MIS

Cash dispensers

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Second generation Transaction Processing[offline],ACHs, Generation of informationfor record keeping, Fund transfer

Telephone billpayment, POSsystems, Checkverification, ATMs,Authorization

Third generation On-line transaction processing,Centralized processing atcountry level, Internet banking,Inter bank transactionprocessing.

Automatic FundTransfers, On-lineBanking, HomeBanking electronic,Direct Deposit, CheckTruncation, ElectronicFund Transfer, InternetBanking

6.3 Varieties of E-Banking

Bank accounts: Savings, Current, FDR, PDS, Term DepositSchemeAll these accounts are maintained in electronic way for the sake of customer satisfaction in Bangladesh. People can deposit their moneythrough electronic device and also can withdraw their money suchway. These are the common bank accounts which maintained by thebank customer every now and then and bank is also given high priorityor facilities in this regards to their customer.

Debit Point-of-Sale

An advanced payment system which enables consumers to use an ATMCard to pay for goods and services, electronically debiting thecardholders account and crediting the account of the merchant.

Cards: Credit/Debit CardThere are two different types of card. One is debit which designate towithdraw own money from the bank in any time. Another one is a

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credit system which provided by bank to their customer. Customer canenjoy their credit amount while they are in shopping, withdraw cashetc.

Internet BankingCustomers need an Internet access service to handle this type of banking. As an Internet Banking customer, he or she will be given aspecific user ID and a confidential, secret and secured password sothat they can access to their own account. Here customer can able tosee the ledger balances, transfer his money, request somethingtowards bank, etc.

Automated Teller Machine (ATM)Full abbreviation of ATM is Automated Teller Machine which acts likea teller point in a bank who takes and gives money over the counter.ATM is same as teller point but it run automatically through identitylike card and password. It does not need any slip or Cheque but it isvery much based on A/C holders ATM card and its Password. Thosewho are entitled for ATM card, bank has provided them a passwordagainst every single card. This is like a debit card. People can deposittheir money in a bank account and they have entitled withdraw theirmoney through ATM card, which is applicable for 24 hours a day and365 days in a year.

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SWIFTSWIFT is a bank owned non-profit co-operative based in Belgiumservicing the financial community worldwide. It ensures securemessaging having a global reach of 6,495 Banks and FinancialInstitutions in 178 countries, 24 hours a day. SWIFT global networkcarries an average 4 million message daily and estimated averagevalue of payment messages is USD 2 trillion. SWIFT is a highly securedmessaging network enables Banks to send and receive Fund Transfer,L/C related and other free format messages to and from any banksactive in the network. Having SWIFT facility, Bank will be able to serveits customers more profitable by providing L/C, Payment and othermessages efficiently and with utmost security. Especially it will be of great help for our clients dealing with Imports, Exports andRemittances etc.

7. Situation Analysis

7.1 SWOT (Strength, Weakness, Opportunity, Threat)ANALYSIS

To find out the viability of a particular product we must perform aSWOT analysis of the product. For analyzing the performance of E-Banking we can consider the following SWOT analysis:

Strengths:

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1. E-Banking is now in our market. Only a few banks are now offeringthese features.2. Actual fund transfer and fund disbursement is also possible now withadvanced secured software.3. The product will enjoy the benefit of a first mover.

4. The feature is cheap for both the bank and the customers.5. The system will require less manual workers.6. Saves a lot of time.7. Highly convenient as the service can be made available at any time.

Weaknesses:1. Security breakdown.2. Lack of high-tech digital database.3. Lack of marketing.4. Lack of stable internet connections.

Opportunities:1. Non-branch banking is becoming popular in our country. A personcan withdraw or deposit money in any branch of the bank he/she hasaccount with.2. Use of electronic and internet services are becoming familiar to thepeople of our country.3. More secured foreign trade is made possible through this.4. High population coverage is possible.5. Convenience, high transaction speed, efficient, and much moreeffective.

Threats:1. On strategic risk E-banking is relatively new and, as a result, therecan be a lack of understanding among senior management about itspotential and implications.2. Business risks are also significant. Given the newness of e-banking,nobody knows much about whether e-banking customers will havedifferent characteristics from the traditional banking customers.3. Banks face three main types of operations risk:

volume forecasts management information systems and outsourcing.

4. Security issues are a major source of concern for everyone bothinside and outside the banking industry. E-banking increases securityrisks, potentially exposing hitherto isolated systems to open and riskyenvironments.

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8. Marketing Strategy

8.1 OBJECTIVESoutheast Bank will set aggressive but achievable objectives for thefirst five years. Within this period we want to take forty percent of themarket share. The important objectives are to provide:1. High quality financial services with state of the art technology.2. Fast customer service.3. Sustainable growth strategy.4. Commitment to Corporate Social Responsibility.5. Innovative banking at competitive price.

8.2 TARGET MARKETFor successful business operations targeting the appropriate market isvery important for any business organization. The main target marketof E-Banking is the different traditional banking customers around theDhaka, Chittagong and Sylthet City. Then for income basis, thecompany targets upper, upper-middle class, middle class families. Thecoverage of the service will be available mainly in the cities first andthen move on to rural areas.

8.3 POSITIONINGProviding one stop solution to customer problem in the mostprofessional manner in the branches will require creating a position inthe mind of its customer. The marketing strategy focuses on providingthe up-to-date facility to the customer. Positioning can be done byusing following:

1. 24- hours cash deposit & withdrawal facility2. Quick cash withdrawal without having queue3. Account activities enquiry in any moment4. Statement request through ATM/Debit/Credit Card5. Transfer own funds to other account number in same bank6. Present Balance enquiry7. More than16-hours shopping facilities8. Deposit or Mail cash or cheque(s) (Cross cheque) throughmechanical device.9. Changing Personal Identity Number10. Cash deposit which will originally deposit very next day of depositthat means do not need to go to the branch for every occasion.11. Mini statement which contain 8-10 previous transaction records12. Can able to pay utilities bill

8.4 Developing Marketing Strategy:

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Once we understand our business' internal strengths and weaknessesand the external opportunities and threats, we can develop a strategythat plays to our own strengths and matches them to the emergingopportunities. We can also try to minimize your weaknesses.

The next step is to draw up a detailed marketing plan that sets out thespecific actions that will put that strategy into practice. See our guideon how to write a marketing plan.Questions to ask yourself when developing your strategy

What changes are taking place in our business environment? Arethese opportunities or threats?

What are our strengths and weaknesses? What do I want to achieve? Set clear, realistic objectives. What are customers looking for? What are their needs? Which customers are the most profitable? How will I target the right potential customers? Are there groups

that I can target more effectively? What's the best way of communicating with them? Could I improve my customer service? This can be a low-cost

way of gaining a competitive advantage over rivals, keepingcustomers, boosting sales and building a good reputation.

Could changing my products or services increase sales andprofitability? Most products need to be continuously updated tomaintain competitiveness.

Could extending my product list or service provision meetexisting customers' needs more effectively? Remember that

selling more to existing customers is generally more costeffective than continually trying to find new ones. How will I price my product or service? Although prices need to

be competitive, most businesses find that trying to compete onprice alone is a poor strategy. What else are my customersinterested in? Quality? Reliability? Efficiency? Value for money?

What is the best way of distributing and selling my products? How can I best promote my products? Options might include

advertising, direct marketing, exhibiting at trade fairs, PR ormarketing on the web.

How can I tell if my marketing is effective?Check how our customers find out about your business. A small-scaletrial can be a good way of testing a marketing strategy withoutcommitting to excessive costs.

9. MARKETING MIX

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9.1 PRODUCT OFFERING ATM Services Any branch banking Internet Banking Virtual Banking SMS banking Wireless Application Protocols Telephone Banking Electronic Fund Transfer (EFT) SWIFT Channel Other electronic delivery channels

9.2 PRICING

For a bank the price is one of the elements of the marketing mix. Theprices must always be in conformity with the other four Ps and theymust not be considered as purely financial problem, in which they arecalculated by estimating the costs, to which a margin for profit will beadded. There are 6 main strategies to settle the price for a product.These are:

Cost plus profit The settlement of the price depending on the competition The settlement of the price on the market The settlement of the price depending on the value The settlement of the price to penetratethe bank may settle a low price for a product with the purpose towin fast a big quota of the market and thus to realize a fast andSubstantial penetration. Entering more detailed in the mechanismsof the price. Bank should consider total cost of the service they areoffering to the client.

9.3 PLACE

South east bank can give frequent visit to different corporate houses.Out of the box ideas will be taken to attract customer attention.Internet, telephone, handbill, billboard and advertising will be used toreach customer call. Our customer support executives will always bethere to attend any type of customer query. Information desk and helpline will provide customers with be there to provide better support.

9.4 PROMOTION

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The bank planned a three stage promotion strategy: initial stage,competitive stage and mature stage. These strategies can be changedif situation demands. The strategies are as follows:

Initial stage:

Informative ads- Newspaper- Billboards- Internet- Cable operator

Competitive stage:Persuasive ads to motivate about the brand

TV Newspaper Direct selling through sales executive

Mature stage:Reminder ads to keep people brand loyal

- Using Satisfied Customers- TV- Newspaper

10. Market driven strategy

The underlying logic of market-driven strategy is that the market andthe customers that form the market should be the starting point inbusiness strategy formulation. Considerable progress has been madein identifying market-driven businesses, understanding what they do,and measuring the bottom-line consequences of their orientation totheir markets.3 Importantly, market-driven strategy provides acompany-wide perspective, which mandates more effective integrationof all activities that impact on customer value. We examine thecharacteristics of market-driven strategy and discuss several issuesassociated with adopting that strategy.

10.1 Characteristics of Market-Driven StrategiesA key advantage of becoming market oriented is gaining anunderstanding of the market and how it is likely to change in thefuture. This knowledge provides the foundation for designing market-driven strategies. Developing this vision about the market requiresobtaining information about customers, competitors, and markets

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Becoming market orientedAchieving superior performanceLeveraging distinctive capabilitiesCustomer value

The above characteristics needed to be ensured with high importanceto achieve desired objectives.

11. Conclusion

Like in many other emerging market economies, banking sector in theBangladesh economy is to face an increasing competition for theirbusiness in the coming days. Their business will no longer remain easyas they had earlier. Southeast bank believes in its uncompromising

commitment to fulfill its customer needs and satisfaction and tobecome their first choice in banking sector.

Though the main objective of this bank is to give high quality financialservices at minimum rate attack. If proper attention and strategies arefollowed as suggested in this report, Southeast bank Limited maybecome the market leader in this sector. Although in the beginning thebank will face some problem and huge cash flow will be required butthe brand name and image of Southeast bank Limited will help it togain a leading position in the market.

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Documents

Copy of TERM PAPER of Strategic Marketing 2nd Part