1. Presented by S. Cox

2.  Objectives:  Explain how customer needs and wants are used to identify a target market.  Describe the components of a marketing strategy and how it is developed.

3.  All consumers have needs and wants  Need – something a person must have to survive Such as food, clothing, and shelter  Want – something a person would like to have but does not need to survive Such as cell phones, jewelry, and brand new car  By identifying their target market banks can give their customers what they need

4.  Banks like other businesses…  Set up in locations where they can get customers  Design products and services to help those in the community in which they serve  No matter the product, not everyone will want to buy it  To reach the right consumers, banks must first identify them

5.  Some questions to consider…  What characteristics do these consumers haved in common?  Are they saving money to buy a house?  Did they recently buy a car?  Knowing the characteristics that potential customers have in common help identify a market segment…a group of consumers that share common wants and needs

6.  Four types of market segmentation  Demographic – age, occupation, gender, family size, income, education, and ethnicity  Geographic – region, country, state, block, neighborhood, city  Behavioralistic – benefits sought, usage rate, brand loyalty, purchase frequency  Psychographic – habits, interest, opinions, hobbies, activities, lifestyle

7.  By breaking consumers into segments, banks can focus their marketing efforts on those who are most likely to become customers…this group is called the target market  The market segment that will be the focus of the marketing strategy

8.  Once the target market is identified, the bank can match the needs and wants of these consumers to its products and services  Products and services are designed or modified by analyzing the needs and wants of a certain market segment  Example on next slide….

9. Characteristics of mortgage loans (the product) Needs and wants of first-time home buyers (the target market) Small down paymentSmall amount of money saved for down payment Competitive interest rateLow mortgage payments Few closing feesLow closing costs Roll closing costs into the mortgage loan Low closing costs Flexible credit requirementApproval with short credit history No penalty for prepaymentIncreased income over time

10.  Advertising – calling attention to a product or service, commonly through the use of paid announcements  Marketing – the process of introducing a product or service to the consumers who can purchase it

11. Marketing Advertising Market Research Pricing Sales Strategy Customer Support Distribution Media Planning Public Relations

12.  Plan is developed around the four P’s of marketing  Product – What products or services meet the needs of consumers in the target segment? (examples: certificate of deposit, savings account, mortgage, or mobile banking app)  Place – How will the product be available to customers? (examples: online, at a bank branch, ATM, Smartphone; regionally, nationally, or internationally)  Price – How much will the product cost the consumer? (examples: fees and interest rates are paid as well as charged)  Promotion – How much will the product be announced? (examples: TV ads, billboards, Internet, social media, or a combo)

13.  Promotion – an activity that increases consumer awareness of a product  In the past – heavily relied on advertising which included TV and radio or in newspapers and magazines  Today – promotion is more dynamic Distributing pens with the bank’s logo Sponsoring a city-wide event, a concert Creating a web site Sending email or social media updates to customers Distributing calendars or some other daily-use product Holding seminars to help customers that are considering financial milestones

14.  Some sort of contact is needed to make a sale  Selling occurs in many ways but for banks personal selling is the most common…each time a bank employee comes in contact with a customer or potential customer  Cross selling – personal selling strategy that encourages existing customers to buy new products based on their previous purchases, sometimes called relationship-based selling Result of existing relationship Requires interaction between bank employees

15.  Event based selling – personal selling strategy in which a bank employee contacts a customer because of event that has recently happened with the customer Example: when a customer visits a web site and requests information about home mortgages which may trigger a personal email from the loan officer inquiring if any additional information is needed by the customer

16.  Objectives:  Describe the elements that create a positive image for a bank.  Explain the importance of customer service in keeping customers.

17.  What qualities would you want a stranger to have when you consider giving him or her your life savings to hold for you?  Wouldn’t you require the same qualities from your bank?

18.  Public image – made up of the ideas and opinions that people have about the business  It’s easier to hire and retain employees, acquire new customers, and keep current customers with a positive public image  A bank must be seen as honest, stable, and an important part of the community  Even though all banks seem to be honest and stable, they also need to appear unique in some way  Maybe emphasize their customer service or community involvement

19.  Economic strength of a community often depends on its ability to get credit  Banks can contribute to the local economy by making loans to individuals and businesses These loans help create jobs and bring revenue to its citizens

20.  Banks also engage in the communities that they serve  Sponsor community events…marathons  Financial education to consumers  Executives serve on civic boards and local chamber of commerce  Customer service

21.  If the bank’s reputation is damaged they may need to repair it  Replace some of the managers  Change how they qualified potential borrowers  Institute other policy changes

22.  Customer Service – all interactions between a customer and the bank  Customer – an individual, organization, or business that purchases a product or service

23.  Starts with the first interaction between the customer and bank  Click on a web site  Comment overheard about the bank while at work  Use of an ATM at the mall  The difference between poor customer service and great customer service is the difference between losing and keeping a customer

24.  Every bank employee is a customer service representative…each must avoid unethical and inappropriate behavior  To provide positive customer service, employees should:  Address the customer by name  Know the products and services offered by the bank  Apply their expertise to the customers’ needs to find the right product that is right for him or her  Exceed in the customer’s expectation for service

25.  Building rapport with a customer will increase his or her satisfaction with the bank  Rapport – a bond of mutual trust  Having good rapport is central to a successful and ongoing business relationship  Customers expect good service and if it’s exceptionally good or poor chances are he or she will mention it to others  Word of mouth advertising – type of promotion in which customers tell others about their experience with a specific business

26.  Methods of achieving rapport:  Language Use speech and body language similar to the customer Be aware of your nonverbal communication as well as that from the customer  Cultural Find shared interests and experiences Be aware of cultural differences  Other Create a positive environment Be open to doing something for a customer for no immediate return Identify barriers and work to remove them

27.  Customer service representatives are an important part of customer service but quality products and services enhance the banks image and generate customer loyalty:  Locations  Handicapped accessibility  International service  Secure web sites