PUBLIC SERVICES MARKETING A CASE STUDY OF FIRST BANK
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
A bank is a financial institution licensed by a government. Its primary activities include borrowing and lending money. Banks no longer restricted themselves to traditional banking activities, but explored newer avenues to increase business and capture new market. Grönroos., (1990)
- In the 1990s, greater emphasis being placed on technology and innovation.
- New concept like personal banking, retail banking, total branch automation, etc were introduced
Banks’ activities can be divided into retail banking, dealing directly with individuals and small businesses: business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high network individuals and families: and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations.
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 uncongenitalies, 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 to interest in marketing subject can be arranged as:
Change in demographic structure: Differentiation of population in the number and composition affect quality and attribute of customer who benefits from banking services. Intense competition in financial service sector: The competition became intense due to the 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.