BANK MARKETING

STRATEGIES
1. Menjelaskan tentang objektif dan matlamat strategi
pemasaran bank. (To explain about the banks
maketing objective and strategy)
2. Membincangkan perancangan strategi pemasaran di

( To
discuss about the marketing strategic
planning at corporate level in banks)
peringkat perancangan korporat di bank-bank.

INTRODUCTION
STRATEGY- to the banking people , the
term strategy refer to the type of decision
made by top executives and members of
banks board of directors concerning the
relationship between the bank organisation
as a whole and its environment . ( Decision
by top people about r/ship between the bank
and its environment)
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 In other words,
strategy describes those critical boundary
spanning decisions that (define the
framework and direction) for overall bank
marketing organisation and management,
providing answers to questions such as;
1. In what specific business should the bank
be, in terms of mix of services @ products
offered and customers served?
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2. What course of action should the

organization pursue , in terms of emphasis,
timing, priorities?
3.How should the bank resources be acquired
and how should these resources be
deployed (dibahagikan/digunakan) for more
efficient marketing operations?
4.What major market opportunities are most
compatible with banks top management
defination of marketing goals, objectives
and missions etc?
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 The development of a marketing strategy

for a bank must fit in with that banks
overall objectives.
Therefore , marketing strategy should be
an integral part of a corporate or strategic
plan. (The relationship between mktg
strategy and corporate planning)

CORPORATE PLANNING
Corporate planning may be defined as
The planning of the total resources of a
company for the achievement of quantified
objectives within a specific period of time.
Hence, corporate planning has been
developed to meet the management need to
take an objective overall view of the total
bank operations, and also
to ensure that the criteria for success are being
fulfilled.

 Corporate planning involves making careful

considered decisions before taking action.

3 basic components of
Corporate Planning
1.Economic mission
Formulating the kind of business the banking
organization should be in and what its
performance objectives should be.
2. Competitive Strategy
To find the right services market-sales approach
combination for effective accomplishment
(pencapaian) of the economic mission.
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3. Programme of Action
Involves a search for efficient means of
implementing the competitive strategy, that
is, developing effective marketing mixes
to implement the competitive strategy
decided.

 Planning is one of the first and most

important functions of marketing.
Planning is required in marketing to
answer the following questions:
a) What types of customers does the bank
want?
b) In what direction is the bank going?
c) How many new employees will be
required for servicing new branches, new
services, new customers?.
d) What will be the most profitable products,
services, branches,csutomers, activities,
markets, etc?

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Planning will help the bank to create

and anticipate rather than follow the
more common banking practice
In other words, simply reacting to
competitor moves and to customers
expected needs.

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WHY PLANNING?

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1.ESSENTIAL IN THE CURRENT

ECONOMIC CONDITIONS
the banks can realistically consider their use
of resources.
2.EFFICIENT CORPORATE PLAN IS AN
IMPORTANT TOOL FOR DECISION
MAKING THROUGHOUT THE WHOLE
BANKING ORGANIZATION
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TWO ORGANISATIONAL
APPROACHES

1. BOTTOM UP
1. TOP DOWN
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1.BOTTOM UP
Strategy formulation becomes very difficult
2. TOP DOWN
Lack of realism in the plans and a lack of
commitment to the plans by the employees
in that bank.

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STAGES IN STRATEGIC
PLANNING
1Before plans are made, a time
horizon has to be fixed (fixed
time horizon)
a) 5 years for long term
(strategic plan)
b) 1 year for short-term.
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Bottom up
Planning can be done individually by the
different departments and then submitted to
the planning department. So that the
individual plans can be integrated to form a
corporate plan.

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Top Down
More realistic approach!!!
The corporate plans will evolve round the
main areas in which business effort will be
concentrated over the span of the time
horizon, and
this is decided by the board and
communicated to the planning
department.
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A strategic plan of a bank will generally include:

a) A description of the objectives to be achieved
(Each branch have to increase deposit RM 5 M
p/month next year)
b) A description of the resources allocated to
achieve various purposes (how many sales
people are required to achieve the objective)
c) Background information essential to the
planning process ( ie. Information about
customers, the deposit market)
d) Any assumptions that have been made
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e) Plans for marketing in all aspects of , by services

and the launch of new services, promotional
material, press and public relations, pricing if
appropriate , research, advertising, training,
branch development, local strategies, special
audits or projects;
f) Agreed dates for starts and completions , standards
of performance and means of reporting and
reviewing progress ( must have the start date and
completion date)
g) Agreed budgets of expenditure and methods of
control
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When the long range plans are settled , the

more specific short-term plans can be drawn
up.
The setting of short term objectives aims at:
a) Making sure that the policies of the bank
organisation are followed through at lower
levels;
b) Making sure that the managers efforts
are directed at business the banks wants and
not at business that is not included in the
corporate plan;
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c) Obtaining a consistent minimum

perfomance from all branch managers and
measuring this perfomance;
d) Giving the whole bank organization a sense
of purpose.

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THE RELATIONSHIP
BETWEEN STRATEGY AND
MARKETING PLANS
The marketing plan derives from the corporate
plan. (marketing plan is considered a part from corporate
plan)
It should be flexible and regularly reviewed and
should allow for continuous control , good
communication to staff and regular evaluation.
It involves substantial research work and the use
of information from the branch network about
pricing policy, advertising and promotion, public
relation and the use of resources in support.
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 For e.g : Training and development of

services.

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FORMULATING A
MARKETING STRATEGY
PLANNING-calls for the establishment of
objectives and formulation of strategies.
OBJECTIVES-indicate what the bank
hopes to accomplish , strategies follow and
attempt to suggest how the bank will reach
the objectives

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According to Kotler- Marketing strategy is

a set of alternative , policies and rules that
guides over time the firms marketing
effort-its level, mix and allocation partly
independent and partly response to
changing environmental and competitive
conditions.

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3 Majors Stages In formulating

A Marketing Strategy
1. Identification of the target market(s)
and their needs , and the formulation
of marketing objectives.
2. Defining constraints on achieving
objectives.
3. Allocation of marketing resources via
marketing mix.
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1. IDENTIFICATION OF THE TARGET

MARKETING AND FORMULATING
THE MARKETING OBJECTIVES
E.G: Possible target markets:
Private, industrial, comercial,
government/public and international
customers.
OBJECTIVES:
Profit; growth;market
share;spreading
risk;diversification of
services.
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2) DEFINING CONSTRAINTS
a) Economic, political, social.
b) Government; legal and technological
developments.
c) Competitive situation from other banks .

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3) ALLOCATION OF MARKETING
RESOURCES
VIA MARKETING MIX:
a) Services (products /services development
and differentiation).
b) Price (price policies for various services
the bank offers)
c) Promotion (advertising, publicity etc)
d) Place (distribution, coverage, location)
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TYPES OF MARKETING
STRATEGIES FOR BANKS
There are 3 broad categories of bank
marketing strategies:

1) Defensive
2) Offensive
3) Rationalisation
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1.OFFENSIVE STRATEGIES

Offensive strategies attempt to penetrate new areas, expand

geographically, search for market opportunities and adopt
innovations in order to make the bank organisation a leader
in its market. (eg: Maybank )
5 main offensive strategies:
a) Geographical expansion
b) Market penetration (penetrate the market with current
products)
Explainationc) New market
check from
d) Market leader
the text book
e) Market challenger strategies.
assignment..!

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2.DEFENSIVE STRATEGIES
Defensive marketing strategies goal is to protect
existing customers and maintain the present market
share..!.
There are 2 defensive strategies:
a)Market Follower
Adopting a market follower strategy means that a
bank has accepted the status quo. It will not
challenge the market leader (s) but will attempt to
maintain its market share by a strategy aimed at
retaining customers and winning a share of new
ones. (eg: BCB, RHB, Affin)

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This strategy may be carried out by

exploiting a set of target markets to which it
can bring a distinct (jelas, nyata, berlainan)
advantage, perhaps in terms of location or
specialist services offered.
In general, market followers possess strong
management who give priority to
profitability, rather than market share.

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b) Market-Nicher Strategy
A strategy aims to take advantage of the niches
(ceruk/ruang yg kecil) that exist in the market. This is
done through specialisation.
The markets here are relatively small and tend to be
beyond the interests of large banks (bank2 bersaiz besar
kurang memberi tumpuan kpd segmen/kws ini).
To the smaller banks, however, the niche is safe and
profitable..!.
The smaller banks may adopt market-nicher strategies to
avoid clashing with the major banks.
These banks will attempt to find and occupy (take
advantage) this market niches that may be either
overlooked or ignored by the bigger banks.
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3. RATIONALISATION
STRATEGY
a) Cost Reduction Strategy
via:
1) Delete Expensive or High cost-profit ratio services
and branches. (reduce o/time, electricity, photostat,
recycle paper, telephone call/fax, training & etc)
2) Improve performance of service / in branches via
cost-saving techniques.
eg: offer internet banking, introduce self service
machine, services through phone (phone banking) ,
sms, numbering systems, service outlet & etc)
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Bank strategies will depend (influence) on:

1) Banks competitive size and position in the market
segment (bank yg bersaiz besar mempyi lebih byk
strategi compared bank yg bersaiz kecil).
2) Company resources, objectives and policies;
(BSN @ Bank Islam mpyi polisi yg berbeza &
matlamat yg berbeza-more towards social
obligation)
3) Competitors marketing strategies;
Each bank have their own mktg strategies,
normally bank will compare their strategy with
their main competitor strategy, sometimes they
may follow/adjust/modified competitor strategy.
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4) Target markets buying behaviour;

(different market, different strategy applied)retired people more on saving, so we can offer to
FD @ Saving a/c! /children/adult life
insurance, credit card/education
loan).Hawkers/penjaja2kecil -SME loan
5) The stage of the product life cycle
Introduction & growing stage-stress on
promotion/advertisement, maturity bank
customer relation/sales after services, declining
stage R & D, or offer new products @
services.
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6) The stage of the economy

During economy recession/gawat-reduce
loan, focuss more on collection & credit
control. Loan on share financing close for
a while. During economy boom, bank will
focus more on property loan/industrial
loan.

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