MABS OVERVIEW OF MARKETING Marketing & Service Quality Module

Outline The need to do marketing Definition of marketing & selling MABS Outline The need to do marketing Definition of marketing & selling The Role of Marketing Goals of marketing The Account Officer as a Marketing Person The presentation will follow the following sequence. (Read slide)

Why is there a need to do marketing? MABS Why is there a need to do marketing? Before proceeding to discuss the topics as outlined, ask the participants what are the reasons why banks have to do marketing? Write the answers of the participants in the white board.

The Need to Do Marketing MABS The Need to Do Marketing Banks need to FOCUS on improved methods of MARKETING because of the following factors: Increasing competition Slowing growth rates Increasing client desertion Growing recognition that banks need to be more client-led Gone are the days when bank managers and loan officers just stay the whole day inside the bank and wait for customers to come and avail themselves of the bank products and services. The latter was possible back then because there was not much competition. So bank managers and personnel were more concerned on how to do bank transactions properly and efficiently. But today, the situation is different. A host of factors has prodded financial institutions, banks specifically, to shift focus from operations to sales and customer service excellence. These factors are: Increasing competition There are more financial institutions these days in the country. This can be seen in the number of commercial banks, both local and foreign, thrift banks, savings bank,and rural banks. Add to these the other players like credit cooperatives, non-government organizations, lending investors, and informal moneylenders. 2. Slowing growth rates As a result of increased competition, growth of business is affected since the market tends to get divided among many players. For less competitive MFIs, the effect is either minimal or the worst, a contraction in their portfolio growth. Increasing client desertion Clients who leave should be a cause for concern among rural banks or MFIs. Reasons for clients departure must be determined and addressed by the bank. If this is not done, this would affect the bank’s business. Besides, keeping old clients is cheaper than getting new ones. MFIs need to be more client-led At the heart of any business operation is the customer. A business exists because it has customers that patronize its products or services. But a customer will only continue to do so if a business tailor-fits or customizes its products or services based on the needs or requirements of its clientele. If the bank wants to be competitive as well as sustain its profitability, managers, officers and employees need to go out and get the customers. Once they get the customers, the next step is how to keep them. With this challenges, bank officers and staff need to equip themselves with marketing concepts and skills if they want to succeed in their jobs. Specifically, they must equip themselves with professional selling skills as well as take to heart the importance of relationship marketing.

Defining Marketing & Selling MABS Defining Marketing & Selling WHAT IS MARKETING? The task of creating, promoting, and delivering goods and services of value to consumers and businesses Goods, SERVICES, Experiences, Events, Persons, Places, Properties, Organizations, Information, Ideas Before showing the next slide, ask the participants a conversational question without intimidating them: What do you mean by marketing? What do you understand about marketing? What is done when someone does marketing? Acknowledge the answers of the participants. Marketing is basically defined as THE TASK OF CREATING, PROMOTING AND DELIVERING GOODS AND SERVICES OF VALUE TO CONSUMERS AND BUSINESSES. Emphasize the four words highlighted. CREATING This is basically product development. It starts with idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, market testing and commercializing. In other words, this is the first step in creating our product like our microfinance product. We brainstorm and then we ask our potential customers on their preferences and we try to get information on our potential competitors to assist in our marketing strategy. PROMOTING Refers to all activities undertaken by the bank to communicate and promote its product to the target market. Ask the participants: How do we promote our microfinance loan program for example? Solicit a couple of answers from the participants. DELIVERING How well the product and service is delivered to the customer. This is where service quality is very evident. For example, how we accommodate borrowers going to the bank to pay or inquire about their loan; do we make them feel special and welcome or do we make them feel shy? VALUE We consider something of value to a customer if it is important and vital to the consumer and business operations. We will never know if something is valuable to a client if we will not conduct a market study. A market study is also important in creating, promoting and delivering a MF product. This is the reason why we conduct a market research before starting or expanding our microfinance program for us to be able to know what does our potential customers wants vis-à-vis what our potential competitors offer. This way we would know what is valuable to our customers and for us not to be move out of the market. Companies are involved in marketing 10 types of entities: goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Defining Marketing & Selling MABS Defining Marketing & Selling WHAT IS SELLING? Anytime there is an exchange of relationship between a seller or service provider and a buyer for a good or service. Selling, on the other hand, is defined as an exchange of relationship between a marketer and a buyer to pursue a mutual benefit. The selling activity can be pursued anytime that the marketer and the buyer decide to come together and discuss business. This can be likened to a carinderia operator and the bank’s account officer coming together discussing the former’s need for an additional capital. The carinderia operator is the buyer and the account officer is the marketer. The focal point of their coming together is how the carinderia operator can access additional capital from the bank and how the bank through the account officer can provide the much needed fund. If both can agree on the terms of the loan, then both will be satisfying their respective business objectives.

Roles of Bank Departments MABS Roles of Bank Departments Finance To raise funds To invest funds Production/Operations To ensure maximum output at a minimum cost Through the years, the growing importance of marketing has been increasingly recognized so much that it occupies the same status with other functional areas of management such as Finance, Production/Operations and Human Resources. This is rightly so because the bank’s assets have little value without the existence of customers. This is the reason why there is a need to embrace the marketing concept.

Roles of Bank Departments MABS Roles of Bank Departments Human Resources To get the best people to work for the organizations To keep a highly motivated and satisfied staff Marketing To promote banks products and services To continuously satisfy and delight customer

The Role of Marketing Production The Customer as the MABS The Role of Marketing Production The Customer as the Controlling function and Marketing as the Integrative function. Marketing This growing importance of the role of marketing can be seen through this illustration. Marketing is seen as the integrative function and the customer is seen as the controlling function. It is marketing that influences the other departments in the organization and motivates them to cooperate in delivering customer satisfaction. Cite the example of the relationship between and among accounting, cash section and loans unit in the branch when disbursing a loan to a microenterprise client. Customer Human Resources Finance

MABS Goals of Marketing Promote services and products to new and existing clients To position the bank in a positive light vs the competition To retain customers & keep them coming back for more services (cross-selling & up-selling) Having mentioned the importance of marketing, what then are its goals? The following are the goals of marketing: Promote services and products to new and existing clients Armed with the established client eligibility criteria for MF loan product, account officers should get out of the bank and seek micro-enterprise operators who might be interested or in need of the product. Being familiar with the geographical setting or the community where your bank operates, your job in locating the customers would be easier. Positioning the Bank Services and Products Once the account officers have located a prospective client, the next goal is to be able to convince him/her to avail of your MF loan product. The account officer must also be able to demonstrate the advantages that his/her bank offers over other competitors in the market place. In the succeeding presentations under this course module, you will be taught how to win your prospective clients by equipping you with essential selling concepts and skills. Retaining customers as well as cross-selling & up-selling other bank products & services Winning the customers for your bank does not only involve one-time patronage of your loan product. Rather, the bank must aim to continuously satisfy the clients’ needs and requirements, thereby, making them stay for a long period of time with the bank. Only a satisfied and fulfilled client would decide to remain with the bank. Bank staff interacting with customers must be knowledgeable about all the bank’s products and services to better cross-sell as well as up-sell other products and services that the bank offers. Such as promoting a time deposit for someone who has saved quite a bit in their savings account or the sale of microinsurance services to cover additional family members.

The Account Officer Technical & Analytical Skills - Product Knowledge MABS The Account Officer Technical & Analytical Skills - Product Knowledge - Credit and Finance - Loan Administration Marketing Skills Develop superior offering and deliver customer satisfaction - Marketing Executives – Demand Managers - Salesman – Customer Managers As Account Officers of the bank, we should possess both the technical/analytical and marketing skills to effectively do the job. Technical and analytical skills An AO should be well versed about the product he/she is handling –interest rates, loan term, loan purposes (Product Knowledge). We should also be adept of credit and financial skills. Early on, we were taught how to conduct a CI/BI and do Cash flow analysis based on the client’s earning potential. As a technical person, we should also be knowledgeable on loan documentation and administering a loan release and collection. Marketing Skills Aside from being a technical person, Account Officers or any bank staff need to have the marketing skills in delivering our microfinance product or our bank in general. (cite an example) As mentioned earlier, in light of a marketing orientation, we have to develop a superior product and deliver customer satisfaction. And because of this, we as Account Officers and Supervisors, are also considered Marketing Executives or Demand Managers and Sales Man or Customer Managers.

The Account Officer As a Marketing Person Product MABS The Account Officer As a Marketing Person - Skilled in stimulating DEMAND for Bank’s Product - Influence the LEVEL, TIMING and COMPOSITION of Demand - BROADER scope of decisions made As a Marketing Executive, we are also considered as demand managers. Demand managers because we are skilled in stimulating the demand for our products. Demand are the wants for a specific product backed up with the ability to pay. We develop general strategies on how to influence the level, timing and composition of the demand. We are also involved in marketing decisions of broader scope such as the product design, how many AOs to hire (as for the supervisors) and what promotional gimmicks to use.

The Account Officer As a Salesman MABS The Account Officer As a Salesman - The Bank’s personal LINK to the customers - The BANK to many of the clients - Brings back much-needed INFORMATION to the Bank about the customers As a salesman, we posed as the personal link of the bank to our clients. We are even seen as the “Bank” by many of our clients. (cite example) And being a salesman, it is our job to bring back to the bank important information about our customers such as customer preferences and behavior and market trends. These are very vital to further develop our product and meeting their needs.

MABS The Account Officer To be an effective at Sales and Marketing, bank staff must have: SALESMAN SKILLS NEGOTIATION RELATIONSHIP MANAGEMENT The account officer to be effective should be trained in both methods analysis and personal selling. And he should know these three (3) aspects: Salesman skills – train on “How To Sell” Techniques Negotiation – the art of arriving at the transaction terms that satisfy both the bank and the customer. Relationship Management – Efforts should be focused on developing a long term, mutually beneficial relationship with customers (encourage audience participation) The first two aspects is more of transaction oriented. The last aspect is aimed in building lasting relationship with clients.

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