NORTHERN INDIA ENGINEERING COLLEGE

[ AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI]

Assignment ofService Marketing

IN PARTIAL FULLFILLMENT OFMASTER OF BUSINESS

ADMINISTRATION( MBA )3rd SEMESTER

2013 -2015

SUBMITTED BY SUBMITTED TO

PRIYA TALWAR Mrs. ASHIMA KAPOOR

1. Hospitality

Hospitality marketing is unique because it deals with the tangible product,like a bed in the hotel or food in the restaurant, but it also deals with the intangible aspects of the hospitality and tourism industry. It is about the experience in a trip and social status it brings eating in a fine-ddining restaurant. Hospitality marketing is very critical in the success of any hospitality and tourism product, organization and tourist destination. Proper marketing effort promotes a product or service that fills the needs and wants of the consumers and at the same time, bring profits to the organization or country that features it. It is important to understand what service means in the hospitality industry as it varies from industry to industry. To have a better understanding of theservice one needs to find out what kind of service a customer would expect. It could mean a variety of services put together like the way the phone is answered or the way the Receptionists greets the customer or the way a complaint is handled and what remedial action is taken etc. etc. Customer's expectations are always high and before you advertise for a particular service in the hospitality service it is necessary to find out whether all the other components will back up the service on offer. 

The components will consist of staff and tangible and intangible services. Eventually whatever the product or the service may be, what matters is how the product and service is being delivered. Staff play a very important part of the delivery of this service and their behavior and attitude is sometimes able to cover up other shortcomings. To provide the quality service then we need to break the product into small components. 

We need to first understand what the product itself is. For example if the product is the Front Office, then what are the expectations of a guest from the Front Office. Front Office is the place which is the first focal point of a customer when a customer walks in. How is that handled. Is it courteously with a smile or in a haphazard way. This is where the service quality is going to make the difference as this will be the product that will back the main product. If it is a telephonic reservation the courtesy and warmth should be felt as the guest cannot see your smile. If the reservation is made by a fax or letter the duration for the response will then become the service that backs the product. Will the response be within 24 hours or will it take days to reply as there is sufficient time for the arrival. What would impress a guest. If the first contact is not prepared to serve beyond the

standard accepted you would find the guests assuming that everything else on offer may be on line with the same quality of service. 

Service on offer should be offered with all the trimmings as present day customers have much to choose from. Service offered should be provided with the staff being prepared to go that extra mile. Making customers happy is the motto of the Hospitality service. It is a service that requires to be done with a smile. People of all walks of life, will at some stage or the other be able to enjoy being served by someone or the other. 

Whether greeting a customer at the Reception or serving a drink at the bar, the service has to be provided in a way that the customer is felt special as the slightest dissatisfaction from any quarter may warrant a complaint and may have consequences for the hotel and the staff concerned. This may lead to the customer not wanting to visit again. Service personnel should be those who are willing to serve without expecting reward. Reward may come in different ways but if the expectations of the staff is appreciation then they are bound to be disappointed. It is better to be prepared for this. If the customer is happy, then the he or she becomes the best advertisement to the organization. 

Hospitality service is to serve others to make them feel special.

MarketingAccording to the definition provided by the American Marketing Association (2008), marketing refers to “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” In essence, marketing is a consumer-oriented philosophy or way of doing business; companies that are consumer-oriented will put consumers’ needs and wants on their

top priority. From this perspective, the ultimate goal of marketing is therefore to create

and retain profitable customers by satisfying their demands. It is worth noting that the goal of retaining profitable customers is particularly

challenging in Asia including Hong Kong. This is because people in this region tend to be more group-oriented and the word-of-mouth effects are

especially strong.

Concluding example:

Four Seasons Hotels and Resorts is a hospitality organization that embraces the marketing concept. The goals of Four Seasons are to achieve a fair and reasonable profit to ensure the prosperity of the company and its shareholders, as well as to to offer long-term benefits to

its hotel owners, shareholders, customers and employees. The company satisfies the needs and wants of its customers by creating properties of long-lasting value using superior design and supports them with exceptional personal service experiences. Four Seasons highly believes that the united efforts of all its employees are the key to satisfying the customers; therefore it is important for all employees to work cooperatively together and respecting each other’s contribution and presence a result, there is a famous saying within the organization, “we seek to deal with others as we would have them deal with us.” In this example, Four Seasons clearly demonstrates that the organization expects to generate profits by placing its guests’ needs and wants on the top priority, and its success is an outcome of the service-oriented attitude of all its personnel.

2. Airlines

Today’s competitive environment in the airline industry has never been tougher or more unforgiving. Approaches that worked in the past simply don’t cut it in today’s hyper-competitive marketplace.

According to a study on high performance in the airline industry, there are key imperatives airlines need to address to navigate through today’s increasingly uncertain times:

In their efforts to manage growth, airlines should dominate home markets and create an adaptive culture—one that can leverage the opportunities of a rapidly changing marketplace.

In an industry of paper-thin margins, airlines need to significantly improve their customer experience, and do so throughout the travel value chain.

And carriers might need to rethink their existing operating models to manage operational excellence by wringing out value from merger and acquisition activity, through sales and marketing and by new market entry and alliances.

The airline industry has evolved rapidly in recent decades. It was a luxurious

form of travel in the early of the last century but has become one of the most

common methods of travel today. By 2003, there were 590 air million travellers in

Europe alone (Eurostat News, 2005). Globally, world passenger traffic

(measured in passenger-kilometres performed by scheduled airlines of ICAO

contracting states) was estimated to have increased by a factor of 3 from 1,367

billion to 3,807 billion between 1985 and 2005 (Hanlon, 1999, p.14). There was a

phase when most airlines were state-owned, followed by a period of oligopoly,

before we entered a stage when competition is as intense as any other

commodity goods (Shaw, 1999). Partly because of these changes, the service

quality and marketing of the airline industry also changed rapidly. In the early

days, airlines placed a heavy emphasis on service quality because it was a

luxurious leisure pursuit. Then, it became a secondary focus when it entered the

oligopoly stage. During this stage, price and price wars were the primary concern

of the travellers and the airline companies. This tide shifted again during

the1990s, as some airlines started to reemphasise and improve their service to

attract travellers (Zeithaml and Bitner, 1996). However, the focus of existing

studies is on the industry rather than the traveller.

MARKETING MIX FOR SERVICES

MARKETING

The marketing mix refers to the blend of ideas, concepts & features which marketing management put together to best appeal to their target market segments. Each target segment will have a separate marketing mix, tailored to meet the specific needs of consumer in the individual segment.

Service marketing managers have found that the traditional four P's of marketing are inadequate to describe the key aspects of the service marketer's job. The traditional marketing mix is said to consist of the following elements of the total offering to consumers: the product (the basic service or good, including packaging, attendant services etc.); its price; the place where the product is made available (or distribution channels - not generally a real issue for most services, except perhaps for repair and maintenance); and promotion (marketing communication: advertising, public relations and personal selling).

The Product Mix :

The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice. It the service mix, there is passenger services , cargo services, & the mail services.

Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.

Facilities available, associated level of services such as, quality of seats & interior decoration. The product is quite complex one since it comprises of aservice of certain tangibal such as free flight bags or free bottle or duty free spirit in order to encourage booking.

Thr airline product includes 2 types of services, on the ground services and in-flight services. The on-the ground, services include car parking facilities at the airport, duty free shopping, reservation counter, efficient checking of baggage, transport etc…

Reservation :

Reservation of air-line ticket is now easy since it is fully computerized and now you can reserve your ticket through thr internet. There are 24 hours reservation, passenger can even specify their seat preference at the time of reservation.

Check in :

The check-in and flight handlingsystem has also been computerized. Kingfisher airline has offered tele-check-in facilities to the passengers can call their special tele-check-in numbers at the airport upto 45 minutes before the departure and confirm their ticket. Their boarding card will await them at the airport. In order to relax after their check-in special lounges are provided.

Baggage facilities :

About 30kgs of check-in baggage is allowed. Passenger, carrying international tickets are given further allowance of around an added 30kgs priority baggage delivery is offered to the members.

Transport facilities :

Free transport service is provided to passengers in order to help them reach their destination faster. Apart from these tangibal elements the seating arrangement in the aircraft should be spacious and comfortable. The in-flight foods provide physical evidence to the airline service.

The Promotional Mix:

The aims of promotion fall into three main categories: to inform, to remind, & to pursuade. It will always be necessary to inform prospective consumers about new products & services, but other issue may also need this type of communication to consumers; new uses, price changes, information to build consumer confidence & to reduce fears, full description of service offering, image building. Similarly consumers may need to get reminded about all these types of issues, especially in the off-peak season.

It is vitally important to recognisse that promotion, or marketing communications generally, may not always be aimed at potential consumer or end user of service. In many business areas, it is to design promotions aimed at channel customers to complement end user promotion.for e.g Airlines will need to promote their services to tour operaters as well as end user.

The Pricing Mix:

Pricing in airlines is a fairly complex issues, since there are price variations because variations in the level of demand, particularly due to seasonality, when every Airlines gives price discounts & competition is tough. Airlines will always faced by high levels of fixed costs, leading to variants of cost-plus pricing or ROI as key determinants of pricing levels. It is important to includde pricing tactics which exploit price sensitivities fully. It differentiates service levels & offer higher price ‘ value added services’, as in business class air travel.We have diffenent authorities to manage and control domestic as well as international air transport busines. The ministry of civil aviation, the indian airline corporation, the national airport authority, the international airport authority of india and the air india corporation are the bodies directly or indirectly influencing the process of pricing decision. The concept of fair price is very important, pricing can be classified in 3 ways.

Cheap value pricing :

This method of pricing is used to undercut the competition and trigger immediate purchase. Though the unit profits aer low, the overall profits are achived.

In order to meet the competition and consolidate their position in the market. Air india and indian airlines have their price.

Value for money pricing :

In this method average price is charged for the product and it is emphasized that it represents excellent value for money at this price. This enables the airline to achieve the good level of profit.

Premium pricing :

In this method the prices are set above the market price either to reflect the image of quality or the unique status of the product premium pricing succeeds if the company enjoys a strong reputation that the brand image alone is sufficient or the product features are not shared by its competitors.

Place :

The air transport organisation has to make sure that the prospects don’t face any difficulty while buying the tickets and make necessary arrangements for the confirmation of the booking. It is also confirmed that the users booking their luggages do not face any inconveniences.

Another dimension of place is related to the location and management of offices of airways, travel agent, tour operators, transport operators etc. Easy accessibility should be the main criteria in selecting the place. The place should be safe, well connected with all weather proof roads where all the required infrastructure facilities are available.

The water and sanitation facilities for the users and comfortable seating arrangements must be made available. Lighting and ventilation facilities should also be taken care of. The interior decoration furnishing, plantation needs aesthetic sense so that the user forms a positive opinion regarding the airway services.

People Mix :Many services require personal interactions between customers and the firm's employees and these interactions strongly influence the customer's perception of service quality. For example, a person's stay at a hotel can be greatly affected by the friendliness, knowledge ability and helpfulness of the hotel staff - in most cases the lowest paid people in the organization. One's impression of the hotel and willingness to return are determined to a large extent by the brief encounters with the front-desk staffs, bellhops, housekeeping staff, restaurant wait staff and so on, many of which take place outside the direct control of the hotel management. In fact, the average hotel patron has very little contact with the hotel supervisors and managers. Therefore, management faces a tremendous challenge in selecting and training all of these people to do their jobs well, and, perhaps even more important, in motivating them to care about doing their jobs well, and, perhaps even more important, in motivating them to care about doing their jobs and to make an extra effort to serve their customers. After all, these employees must believe in what they are doing and enjoy their work before they can, in turn, provide good service to customers. For this reason, human resources management policies and practices are considered to be of particular strategic importance for in delivering high-quality services. Establishing a customer-oriented culture throughout the firm and empowering employees to provide quality service cannot be established merely by putting up inspiring posters. Management leadership, job redesign and systems to reward and recognize outstanding achievement are among the issues that a successful service manager must address. The term "internal marketing"

has been coined to characterize the sets of activities a firm must undertake to win over the hearts and minds of its employees to achieve service excellence. The "people" component of the service marketing mix also includes the management of the firm's customer mix. Because services are often experienced at the provider's facilities, other customers who are being served there can also influence one’s satisfaction with a service. Ill mannered restaurants customers at the next table, crying children in a nearby seat on an airplane and commercial bank customers whose lengthy transactions take up the teller's are all examples of unpleasant service conditions caused by a firm's other patrons. On the other hand, the right mix of customers can greatly increase the enjoyment of experience - for example, at entertainment services, such as nightclubs or sporting events. Determining the desirable customer mix for a service, segmenting the market into compatible groups and managing customer arrivals to avoid conflict and enhance the service experience are essential components of service management.

The Physical Evidence Mix:This element of the expanded marketing mix addresses the "tangible" components of the service experience and firm's image referred earlier. Physical surroundings and other visible cues can have a profound effect on the impressions customers form about the quality of the service they receive. The "services cope" - that is, the ambience, the background music, the comfort of seating and the physical layout of a service facility - can greatly affect a customer's satisfaction with a service experience. The appearance of the staff, including clothes and grooming, may be used as important clues. Promotional materials and written correspondence provide tangible reassurance; they can be incorporated into the firm's marketing communications to help reduce customer anxiety about committing to the purchase. Service firms should design these items with extreme care, since they will play a major role in influencing a customer's impression of the firm. In particular, all physical evidence must be designed to be consistent with the "personality" that the firm wishes to project in the marketplace.

The Process Mix: Because customers are often involved in the production of services, the flow and progress of the production process is more important for services than it is for goods. A customer who buys a television set is not particularly concerned about the manufacturing process that made it. But the customer at a fine restaurant is not merely interested in the end result - the cessation of hunger. The entire experience of arriving at the restaurant - of being seated, enjoying the ambiance, ordering, receiving and eating the meal - is important. The pace of the process and the skill of the provider are both apparent to the customer and fundamental to his or her satisfaction with the purchase.

The importance of the process is true even for less 'sensual" experiences. A customer who applies for a loan at a bank evaluates the purchase not only by the amount of the loan received and the interest rate paid. The speed and sensitivity

of the approval process, the interaction with the bank officers, the accuracy of bank statements and the ease of getting redress if mistakes are found all affect the person's attitudes about doing further business with the bank and his or her willingness to recommend it to others. Therefore, when designing service production processes, particular attention must be paid to customer perceptions of that process. For this reason, marketing and operations are closely related in

service management.

Example

Jet airways:

Jet Airways, India's most preferred airline, is now giving the world a better choice in the skies. 

The airline operates over 350 flights daily across 44 destinations within India and also operates flights to Nepal, Sri Lanka, Singapore, Malaysia, United Kingdom, Thailand, Belgium, United States of America & Canada on one of the youngest and best maintained fleets. Jet Airways plans to extend its international operations further in North America, Europe, Africa & Asia in the coming years with the induction of wide-body aircraft into its fleet years.

There are many more domestic airlines operating in India Eg:-Air Deccan, Go Air etc. In 2001, with revenues of $ 542.18 MN, Jet Airways emerged as the most popular domestic airlines in India. Jet Airways stated its operation in 1993; the number of its passengers increased from 0.663 million in 2000-01.by 2001, when other private airlines had stopped their operations, Jet Airways not only continued to survive, but had become a formidable competitor to indias national domestic airlines -(AIR INDIA). Jet Airways seemed to be lone challenger to AIR INDIA with Sahara Airlines in the third position. Jet Airways's market share increased to 42 % in 2001 from 6.6 % in late 1990s. In 2001 , Jet Airways ran 215 flights per day compared to INDIAN AIRLINES's 208.Unlike the loss making INDIAN AIRLINES, Jet Airways is making profits. At the end of the first year, Jet Airways achieved average seat factor close to break-even level of 71 %. Thereafter it broke even & has been making profits ever since. In 2001, Jet Airways recorded profits of rupees 125mn compared to AIR INDIA which recorded a loss of Rs 1.77bn. The following pie diagrams will show the growth made by Jet Airways in the market share, passenger carried and the fleet size.

International Airlines:In the international sector, Air India is the sole Indian service provider. However, in the international market, the share Air-India is negligible compared to that of

the likes of British Airways and Emirates Air.

IATA - The International Air Transport AssociationsIATA - The International Air Transport Association- was founded in Haryana, CUBA, IN APRIL 1945. It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air service - for the benefit of the world's consumers.

The international scheduled air transport industry is now more than 100 times larger than it was in 1945. Few industries can match the dynamism of that growth, which would have been much less spectacular without the standards, practices and procedures developed within IATA.

At its foundation IATA had 57 members from 31 nations, mostly in Europe and North America. Today it has over 230 members from more than 130 nations in every part of the globe.

3. Tourism ServicesMarketing plays a significant role in any industry and particularly in a service industry such as travel and tourism. Modern organisations cannot operate without the use of promotion or market research as a key method of communicating with customers. Many organisations allocate large budgets to marketing in order to maintain a competitive edge and meet the needs of their customers. Tourism is one of the most exciting and progressive industries in Australia. Part of the visitor economy, tourism is also big business and it impacts on almost every other industry. Total tourism consumption was worth more than $92 billion in 2008–09 and tourism directly contributed $32.8 billion to Australia’s GDP in that period.Tourism is now one of the largest industries in Australia, accounting for 486,200 jobs. The country’s tourism industry has a larger output than:

∙ agriculture, forestry and fishing;

∙ communication services;

∙ and electricity, gas and water supply

Travel agents

The role of travel agents is to give advice and information and sell and administer

bookings for a number of tour operators. They also sell flights,ferry bookings, car

hire, insurance and accommodation as separate products. Thus, they are distributors of products. Many have a bureaude change. Increasingly, travel agents

also do a little tour operating, for example putting together a holiday for a group.

This is known as ‘tailor making holidays’. Some industry professionals believe that

the role of the travel agent is in decline as many people are booking their own holidays and travel on the Internet or by telephone directly to tour operators.

Components of Tourism

Tourism has many components comprising

1. Travel experience

2. Accommodations

3. Food

4. Beverage services

5. Shops

6. Entertainment

7. Aesthetics and

8. Special events

8 P’s

1. Product

Product in Tourism is basically the experience and hospitality provided by the service provided.

In general the experience has to be expressed in such a way that the tourists see a value in them.

2. Process

The process in Tourism include, (a) trip planning and anticipation, (b) travel to the site/area, (c) recollection, (d) trip planning packages. The trip planning packages include, maps, attractions en route and on site, information regarding lodging, food, quality souvenirs and mementoes

3. Place and Time – Location and Accessibility

The place and time in tourism is providing directions and maps, providing estimates of travel time and distances from different market areas, recommending direct and scenic travel routes, identifying attractions and support facilities along different travel routes, and informing potential customers of alternative travel methods to the area such as airlines and railroads.

4. Productivity and Quality

This is similar to other service industries. The quality is assessed by time taken for a service, the promptness of the service, reliability and so on.

5. Promotion and Education

Like other services, the promotion should address, the accurate and timely information helping to decide whether to visit target audience, the image to be created for the organization, objectives, budget, timing of campaign, media to be selected, and evaluation methods.

6. People

People is the centre for Tourism. It is more a human intensive sector. For hospitality and guest relations it is very important to focus on people. It also plays a vital role in quality control, personal selling, and employee morale.

7. Price and other user costs

The price of the tourism services depend on business and target market objectives, cost of producing, delivering and promoting the product, willingness of the target, prices charged by competitors offering similar product/service to the same target markets, availability and prices of substitute products/services, and economic climate. The possibility of stimulating high profit products/services by offering related services at or below cost.

8. Physical Evidence

In Tourism the physical evidence is basically depends on travel experience, stay, and comfort. Here, the core product is bed in case of stay.

Example

Holidaybreak is the UK’s leading operator of specialist holiday businesses, all with high standards of service and product quality and market leading positions in the UK and other major European markets. In 2004 the Group provided 2.3m holidays in over 100 countries worldwide.The business generates substantial cash, delivers double-digit margins and has proven resilient in the face of changing market conditions. The Group has the financial strength to respond to changing market trends and exploit opportunities for both organic and acquisition based growth whilst paying an attractive dividend.

Hotel Breaks

The Hotel Breaks division’s core business specialises in UK and overseas leisure breaks. It is the principal provider of domestic short breaks to UK travel agents and has also been rapidly developing direct and internet distribution. The division continues to introduce new products and distribution channels to build on an outstanding record of success in recent years.

• 2004 Turnover: £120.9m

• 1.7m holidays sold in year to 30/9/04

• Strong relationship with 3000+ hotels, 250+ hotel suppliers

• Flexible cost base – no commitment to hotel room allocations

• Fixed selling margin

• Strongly cash generative – negative working capital

• Operates in a growth sector

• Acquired Dutch market leader in on-line leisure breaks Bookit (BRC) for £23.1m on

22 December, 2004

Adventure Holidays

Three businesses, Explore (UK), Djoser (Netherlands) and Regal Dive; market leaders in ‘soft’adventure and scuba diving holidays. Explore offers a range of cycling, walking and trekking adventure short breaks and family adventures as well as the core worldwide, escorted tours programme. Explore adds genuine value to the customer experience, creating holidays which would be difficult or impossible for the DIY customer to replicate.

• 2004 Turnover: £37.4m

• 41,800 holidays sold in year to 30/9/04

• Increasing demand for active, special interest and unusual holidays

• Over 400 different tours to 107 countries

• Tight control of tour load factors underpins profitability

• Flexible cost base – Low commitment to flight seats

• Acquired Dutch market leader Djoser for £15.7m on 19 January 2005

Camping

The original part of the Holidaybreak group. Provides pre-sited mobile-home and canvas holidays on high-grade, third-party owned campsites throughout Europe. Customers are mainly families who book direct, attracted by good quality self-catering accommodation in desirable locations, with excellent leisure amenities. Flexibility, informality, independence and added value services all add to the appeal.

• 2004 Turnover: £123.2m

• 570,000 holidays sold in year to 30/9/04

• Market leading brands – Eurocamp and Keycamp

• Customers from nine different countries, mainly UK, Holland and Germany

• 9700 mobile-homes and 4500 tents on 212 campsites in France, Italy and seven other countries

• High levels of customer satisfaction and repeats

4. Health Care and Wellness:Banking and Insurance

BANKING

Marketing approach in banking sector had taken significance after 1950 in western countries and then after 1980 in Turkey. New banking perceptiveness oriented toward market had influenced banks to create new market. Banks had started to perform marketing and planning techniques in banking in order to be able to offer

their new services efficiently. Marketing scope in banking sector should be considered under the service marketing framework. Performed marketing strategy is the case which is determination of the place of financial institutions on customers’ mind. Bank marketing does not only include service selling of the bank but also is the function which gets personality and image for bank on its customers’ mind. On the other hand, financial marketing is the function which relates uncongenially, differences and non similar applications between financial institutions and judgement standards of their customers.The reasons for marketing scope to have importance in banking and for banks tointerest in marketing subject can be arranged as:Change in demographic structure: Differentiation of population in the number andcomposition affect quality and attribute of customer whom benefits from banking services.Intense competition in financial service sector: The competition became intense due tothe growing international banking perceptiveness and recently being non limiting for new enterprises in the sector. Increase in liberalization of interest rates has intensified the competition.

Bank’s wish for increasing profit: Banks have to increase their profits to create new markets, to protect and develop their market shares and to survive on the basis of intense competition and demographic chance levels.

The marketing comprehension that are performed by banks sinnce 1950 can be shown as in following five stages:

1. Promotion oriented marketing comprehension

2. Marketing comprehension based on having close relations for customers

3. Reformist marketing comprehension

4. Marketing comprehension that focused on specializing in certain areas

5. Research, planning and control oriented marketing comprehension

THE MARKETING MIX IN BANKING SECTOR

SERVICE

Recently, banks are in a period that they earn money in servicing beyond selling money. The prestige is get as they offer their services to the masses.Like other services, banking services are also intangible. Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. These intangible services are shaped in contracts. The structure of

banking services affects the success of institution in long term. Besides the basic attributes like speed,security and ease in banking services, the rights like consultancy for services to be compounded are also preferred.

PRICE

The price which is an important component of marketing mix is named differently in the base of transaction exchange that it takes place. Banks have to estimate the prices of their services offered. By performing this, they keep their relations with extant customers and take new ones. The prices in banking have names like interest, commission and expenses. Price is the sole element of marketing variables that create earnings, while others cause expenditure. While marketing mix elements other than price affect sales volume, price affect both profit and sales volume directly.Banks should be very careful in determining their prices and price policies. Because mistakes in pricing cause customers’ shift toward the rivals offering likewise services.Traditionally, banks use three methods called “cost-plus”, “transaction volume base”and “challenging leader” in pricing of their services.

DISTRIBUTION

The complexity of banking services are resulted from different kinds of them. The most important feature of banking is the persuasion of customers benefiting from services.Most banks’ services are complex in attribute and when this feature joins the intangibility characteristics, offerings take also mental intangibility in adddition to physical intangibility. On the other hand, value of service and benefits taken from it mostly depend on knowledge,capability and participation of customers besides features of offerings. This is resulted from the fact that production and consumption have non separable characteristics in those services.Most authors argue that those features of banking services makes personal interactionbetween customer and bank obligatory and the direct distribution is the sole alternative. Due to this reason, like preceding applications in recent years, branch offices use traditional method in distribution of banking services.

PROMOTION

One of the most important element of marketing mix of services is promotion which is consist of personal selling, advertising, public relations, and selling promotional tools.

PERSONAL SELLING

Due to the characteristics of banking services, personal selling is the way that most banks prefer in expanding selling and use of them.Personal selling occurs in two ways. First occurs in a way that customer and banker perform interaction face to face at branch office. In this case, whole personnel, bank employees, chief and office manager, takes part in selling. Second occurs in a way that customer

representatives go to customers’ place. Customer representatives are specialist in banks’ services to be offered and they shape the relationship between bank and customer.

ADVERTISING

Banks have too many goals which they want to achieve. Those goals are for accomplishing the objectives as follows in a way that banks develop advertising campaigns and use media.

1. Conceive customers to examine all kinds of services that banks offer

2. Increase use of services

3. Create well fit image about banks and services

4. Change customers’ attitudes

5. Introduce services of banks

6. Support personal selling

7. Emphasize well service

Advertising media and channels that banks prefer are newspaper, magazine, radio,direct posting and outdoor ads and TV commercials. In the selection of media, target market should be determined and the media that reach this target easily and cheaply must be preferred.

Banks should care about following criteria for selection of media.

1. Which media the target market prefer

2. Characteristics of service

3. Content of message

4. Cost

5. Situation of rivals

Ads should be mostly educative, image making and provide the information as follows:

1. Activities of banks, results, programs, new services

2. Situation of market, government decisions, future developments

3. The opportunities offered for industry branches whose development meets national

benefits.487

PUBLIC RELATIONS

Public relations in banking should provide;

1. Establishing most effective communication system

2. Creating sympathy about relationship between bank and customer

3. Giving broadest information about activities of bank.

It is observed that the banks in Turkey perform their own publications, magazine and sponsoring activities.

SELLING PROMOTIONAL TOOLS

Another element of the promotion mixes of banks is improvement of selling. Mostly used selling improvement tools are layout at selling point, rewarding personnel, seminaries,special gifts, premiums, contests.

DEVELOPMENT IN MARKETING SCOPE AT THE ASPECT OF SERVICE

MARKETING

Marketing scope develops day to day. These developments carry special significance for service sector in which customer and service producer interact closely.

INTERNAL MARKETING

Especially in service sector like external relations, internal relations also have significance. It requires finding and keeping successful personnel.For personnel of the organization to be considered their own goals and service situation, values of the organization are sold to them. The communication techniques carried out for customers are also performed for the personnel in internal marketing and this two techniques go together. For example, the ads that aim creating firm’s image should be prepared with regarding to audience which is composed of firm’s personnel.

NETWORK MARKETING

This approach takes the organization as a sequence which involves producer and customer that market services to each other in the organization. In this structure, the activities of departments that compose organization would be more focused on market. This will also affect the structure of organization.

RELATIONSHIP MARKETING

It was mentioned that close relationship was established between producer and customer in service sector. In addition to this, life cycle of a customer relationship was also mentioned under the product outline.According to the researchers, maintaining the relationship for extant customer increases the profit of firms. It should be emphasized that this fact has an importance of service sector.

INSURANCE

Wherever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. The risks may be certain events like death, pension, retirement or uncertain events like theft, fire, accident, etc. Insurance is a financial service for collecting the savings of the public and providing them with risk coverage. The main function of Insurance is to provide protection against the possible chances of generating losses. It eliminates worries and miseries of losses by destruction of property and death. It also provides capital to the society as the funds accumulated are invested in productive heads. Insurance comes under the service sector and while marketing this service, due care is to be taken in quality product and customer satisfaction. While marketing the services, it is also pertinent that they think about the innovative promotional measures. It is not sufficient that you perform well but it is also important that you let others know about the quality of your positive contributions.

Insurance marketingThe term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organisation survives and thrives in the right perspective.

Marketing --Mix For Insurance Companies

The to best meet the needs of its targeted market. The Insurance business deals in selling services and therefore due weight-age in the formation of marketing mix

for the Insurance business is needed. The marketing mix includes sub-mixes of the 7 P's of marketing i.e. the product, its price, place, promotion, people, process & physical attraction.The above mentioned 7 P's can be used for marketing of Insurance products and banking services, in the following manner:

1. PRODUCTA product means what we produce. If we If we produce goods, it means tangible product and when we produce or generate services, it means intangible service product. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product. In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are the two leading companies offering insurance services to the users. Apart from offering life insurance policies, they also offer underwriting and consulting services.

2. PRICINGWith a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. The premium rates are revised if there are any significant changes in any of these factors.•Mortality (deaths in a particular area) When deciding upon the pricing strategy the average rate of mortality is one of the main considerations. In a country like South Africa the threat to life is very important as it is played by host of diseases. • Expenses: The cost of processing, commission to agents, reinsurance companies as well as registration are all incorporated into the cost of installments and premium sum and forms the integral part of the pricing strategy•Interest:The rate of interest is one of the major factors which determines people's willingness to invest in insurance. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are muchgreater than the perceived returns from the insurance premiums.

3.PLACEThis component of the marketing mix is related to two important facets i) Managing the insurance personnel, andii) Locating a branch.The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services- promised and services -- offered is bridged over. In a majority of the service generating organizations, such a gap is

found existent which has been instrumental in making worse the image problem. The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link, lack professionalism.

4. PROMOTION:The insurance services depend on effective promotional measures. In a country like India, the rate of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents play an important role. Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying. Advertising and Publicity, organisation of conferences and seminars, incentive to policyholders are impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders.

5. PEOPLEUnderstanding the customer better allows to design appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. Training, development and strong relationships with intermediaries are the key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the staff and agent level, is one of the important areas to look into. Human resources can be developed through education, training and by psychological tests. Even incentives can inject efficiency and can motivate people for productive and qualitative work.

6. PROCESS:The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments.

A. Flow of activities: all the major activities of banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations. The activities have been segregated into various departments accordingly.B. Standardization: banks have got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction.C. Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives.D. Number of stores: numbers of steps are usually specified and a specific pattern is followed to minimize time taken.E. Simplicity: in banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to ‗deposits‘ counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further.

7. PHYSICAL DISTRIBUTION:Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers have a large reach and presence in India. Building a distribution network is very expensive and time consuming. Technology will not replace a distribution network though it will offer advantages like better customer service. Finance companies and Banks can emerge as an attractive distribution channel for insurance in India. In Netherlands, financial services firms provide an entire range of products including bank accounts, motor, home and life insurance and pensions. In France, hhalf of the life insurance sales are made through banks. In India also, banks hope to maximize expensive existing networks by selling a range of products.The physical evidences include signage, reports, punch lines, other tangibles, employee‘s dress code etc.

A. Tangibles: banks give pens, writing pads to the internal customers. Even the passbooks, chequebooks, etc reduce the inherent intangibility of services.B. Punch lines: punch lines or the corporate statement depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers. Banking marketing consists of identifying the most profitable markets now and in future, assessing the present and future needs of customers, setting business development goals, making plans-all in the context of changing environment.

ConclusionIn India, banks hope to maximize expensive existing networks by selling a range of products. It is anticipated that rather than formal ownership arrangements, a

loose network of alliance between insurers and banks will emerge, popularly known as bank assurance. Another innovative distribution channel that could be used are the non-financial organisations. We can‘t deny the fact that if foreign banks are performing fantastically, it is not only due to the sophisticated information technologies they use but the result of a fair synchronization of new information technologies and a team of personally committed employees. The development of human resources makes the way for the formation of human capital.

*