Service Marketing at Bank PHP - Essay Example

Service Marketing at Bank PHP Section A Unlike tangible products, services have peculiar features that make them unique and call for a different marketing approach. The following are the important salient features of services: Insperability This implies that service cannot be separated from its origin nor can it be transported as the point of generation and point of consumption of service remain the same and take place simultaneously. For example, the job of a teller in a bank is to serve his customer by helping to deposit/withdraw/ perform any other service, and the service so rendered cannot be separated from the teller. Similarly, a waiter cannot be separated from the services he/she offers. Intangibility This feature of service means that it cannot be touched, lifted and transported. This quality of service makes it more difficult to be evaluated by the customers as the customer understands the results of the service only after consuming it. But a tangible product's quality can be evaluated at the time of purchase and it can be rejected, if the customer feels dissatisfaction about the product. It also creates problems when customers evaluate a product in terms of it price (Reif 1997). However, consumers can use other attributes of the service provider or the place of his business to evaluate the quality of service. Perishability Services are perishable in the sense that they have to be consumed the moment they are delivered by the service provider. If they are not consumed on site or immediately, they will be lost and that cannot be recoverable. They cannot also be stored and as such they cannot add time and place utility to consumers. Heterogeneity (variability) The service offered at different time point need not have same quality. Consistency and uniformity in service cannot be expected even from the same service points. Naturally, service does not match with what was planned and promised. This causes concern for consumers and they often raise grievances in this respect. Utmost care and attention through personnel training and service maintenance alone can mitigate this issue. 2. Marketing mix model (product, place, promotion, price, people, physical evidence, process) The major concern of marketing management is the development of tools for marketing goods and services. The marketing management means and includes all efforts that a marketer/manufacturer takes to make sure that goods and services are smoothly moving from production point to consumption point. In these efforts, marketing team put emphasis on certain elements, which they consider as indispensible for marketing success and they are collectively termed as marketing mix. Traditionally, the marketing mix consists of four components, namely: Product, Price, Place of Distribution and Promotional Activities, commonly referred to as 4 P's of marketing. These components of the marketing mix constitute the core of a company's marketing system. The 4Ps are strongly interconnected. However, with the advancement of modern marketing management theories, some more elements have been added to marketing mix. A brief description of all these elements comes in the coming paragraphs: Product: - is concerned with developing the right products and/or services, which should satisfy some customers' needs. Place: - is concerned with getting the right service to the target market. A service is not of much good to a customer if it is not available when and where it is required. Promotion: - is concerned with the creation of awareness to the target market about the right service. Price: - is very vital since it represents the only element of the marketing mix that creates revenue. Thus, through careful coordination of the 4Ps, management can draw the most benefit from any marketing environment. People: - Everybody involved in the marketing efforts irrespective of designation or status in the organisation. Physical evidence: - all the physical appearances and tangible thing that support the marketing process. Processes: - all the series of activities that lead to reach goods and services from point of production to point of consumption. 3. SERVQUAL model (RATER and emphasis on GAP-5 gaps at various levels). Marketing of services have become more important now-a-days than ever before because of the highly demand for high quality of service from hard-to-please customers and this has resulted in tremendous churn in the customer bases of services such as banks, credit cards and airlines. Many tools and procedures have been introduced over the years to effectively market service and make varied customers happy and satisfied. In the effort to introduce new and improved tools, the sophisticated tool SERVQUAL is a novel idea to ensure that they track the service in a more effective manner and take up necessary steps for enhancing customer satisfaction. Parasuraman, Berry, and Zeithaml remark that the use of the SERVQUAL Model and established the various dimensions of service quality through empirical evidence. In today's highly competitive scenario in the marketing of services, these dimensions can prove to be very important for marketers to gain an edge over competitors. However, they need to be handled in an adroit manner to ensure effectiveness. The impact of proper handling is bound to be felt on service quality. The five dimensions and the manner in which they should be handled have been discussed below (Parasuraman 1991). SERVQUAL is an empirically developed method prescribed for service organizations that strive for quality service to customer and aim at constant improvement in the service delivery. This model involves the understanding of the customers' perceived service needs and the comparison of the same with that of an excellent organization. Afterwards, a gap analysis is made to identify where the firm lags behind and needs improvement. Accordingly, Zeithaml, Berry, and Parasuraman prescribe the gaps in service quality and how marketers could close the gaps to enhance the service quality (Zeithaml 1998). The relevant gaps include: Gap 1 The authors have explained it as "Difference between consumer expectations and management perceptions of consumer expectations" (Zeithaml 1998). Gap 2 The authors have explained it as "Difference between management perceptions of consumer expectations and service quality specifications"(Zeithaml 1998). Gap 3 The authors have explained it as "Difference between service quality specifications and the service actually delivered"(Zeithaml 1998). Gap 4 The authors have explained it as "Difference between service delivery and what is communicated about the service to consumers"(Zeithaml 1998). Section B Discuss how 3 of the above models can be applied to banking (e.g. Bank PHB Nigeria) with at least 2 of the models linked together A Brief Bank Profile Bank PHP, one of the leading financial institutions in Nigeria, which was acclaimed as the fast emerging supermarket in Africa for global financial solutions. The Bank authorities claim that "Bank PHB is strongly positioned as Africa's fast emerging centre of innovative financial solutions to a growing and diverse global customer base. Our strategic intent is to build a diversified franchise, creating superior value for all stakeholders through unrivaled customer service experience, superior shareholder value, a conducive workplace, and commitment to corporate citizenship" (Our Bank-About PHP). Emphasis on Service Marketing The emphasis on marketing by banks can be traced to the argument that marketing lies at the foundation of all successful business transaction. And given that presently in Nigeria, the demand for banking services is growing while the market for these services is also expanding. As such many banks now employ marketing concepts and techniques through their properly organized, and well-structured marketing department to enhance profitability and effectiveness and also to adequately take care of the growing demand. This is because of the need for a concerted marketing strategy aimed at meeting the requirement of customers in the best and most cost-effective manner. Product:- Anything which the organisation offers to potential customers, whether it be tangible or intangible' a. A bank account, mortgage, loan or credit card. Price b. Interest, set-up charges/booking fees, bank letters, etc. Place c. Accessibility - offices worldwide, opening hours, women-only branches, branches in UK supermarkets, cash machines, internet, telephone banking, text-phone, full service for customers with sight, speech, mobility impairments and good access in branches. Promotion d. Staff play a big part in providing product advice, strong ad campaign globally, financial publications, promotional literature. People - everyone a 'part-time marketer' Gummesson (1999) e. Branch staff/telephone operators directly affect the way the service is consumed, whether correct service is provided. Physical evidence - intangibility means service cannot be judged before consumed f. Good choice of brochures in plain English, appearance of staff, appearance of branches (offices for meetings, etc), flowcharts to detail complicated procedures before consume. Processes g. Customer service is provided as a series of processes, financial products are delivered in very specific ways, e.g. house purchase with a number of contact points with bank. Gap 1 The management puts emphasis on certain service aspects based on their perceptions of customer expectations. But in reality, the customer's expectations may be different. For example, a number of ATMs introduced in every nook and corner of the city, but the consumer may be more interested in getting service at important places such as airport, railway station etc. Gap 2 Even if the management has understood the customer expectations correctly, the service quality specifications may not fully match with the same. For example, management may rightly realize that customers coming to take a demand draft may seek for immediate processing, but, when it is completed, it took more time than expected. Gap 3 Quite understandably, this gap results from the difference between planning and execution. Though the service blueprint may have specified a certain level of service quality, the actual delivery of the service may have been found wanting. Gap 4 It is a pitfall of the over-enthusiastic marketers. In their eagerness to entice customers to partake of the service, the management ends up promising the earth. For example, the advertisement might be quite enchanting and highly inspiring to visit the bank, but the reality might be totally different Section C Using an article from an academic journal about 1 of the chosen models, show how its conclusions could be used to improve the marketing performance of the bank The following aspects should be taken care of: Tangibles: - Even in services, the tangibles play a big role. Contrary to popular belief, customers form judgments regarding service quality by taking the tangibles into consideration. The risks associated with the purchase of services are higher, since the customer is not fully aware of the quality that would be finally delivered. Equipment used for producing the Services: -The quality becomes evident from the equipment used to create and deliver the service. Restaurants boast of their modern kitchens, airlines flaunt their newly acquired aircrafts, while B-schools stress their state-of-the-art Wi-Fi enabled campuses with air-conditioned classrooms. Visual Appeal: -Tangibles are also evident from the visual appeal of the location, the people and the ambience. The appeal is evident in the uniforms worn by the employees at leading restaurants, airlines and car rental services. The effort is made to ensure good appeal in every tangible that is encountered by the customer Reliability: -The services of some service providers are required quite often by customers and also the nature of the requirement could be critical. Therefore, reliability becomes a key consideration in judging the service quality. Guarantee of Performance: -The performance of the service must be guaranteed as per the terms and conditions agreed to with the customer. Fail-safe Processes: -The creation of any service requires the use of various processes. Therefore, to stress the reliability factor, service providers often flaunt their fail-safe processes. They may also mention the checks and measures built into the system to prevent any flaws. The Six Sigma compliance is a favorite tool for service managers. Services can also be promoted by stressing the reliability aspect. Responsiveness: -Another important dimension of service quality is responsiveness. This is a measure of how quickly the service provider responds to the customer's requirement. Generally, the actual service quality can be judged only when it is used; so responsiveness can become a critical parameter for judging the quality. The important aspects of this parameter include: Prompt Response: -The customer would very much appreciate a prompt response to any query or service problem. The service quality is judged by the customer based on how quickly the response is given and the issue resolved. Handholding Customers: -Responsiveness becomes evident when the service provider is willing to handhold the customer. The toll-free numbers offered by various service providers is an example of this kind of responsiveness. Assurance: -Assurance also plays an important role in service quality. It is the factor that converts a "chance" customer into a regular patron. A restaurant that takes care of the needs of the customer will certainly be preferred and the service quality would be enhanced owing to the assurance factor. The issues that are noteworthy include: Behavior of Employees: -The manner in which the employees interact with customers and the confidence that customers have in the employees would help uplift service quality. The technical expertise of a service technician, the professional approach of a telephone operator or the courteousness of a salesperson makes a significant difference to the service quality. Empathy: -A very crucial dimension of service quality is the empathy factor. It is the aspect that customers find most heart-warming. The empathy factor should not only be mentioned in product brochures, but be actually evident in the practices of the company. Section D Draw conclusions from your analysis about the particular services marketing issues faced in the banking sector Marketing as a concept and as a discipline is undeniably a central function of management from the highest level down to the lowest. It is only when the concept and skill are present in an organization that it can be said to be marketing oriented. Thus banks no longer stay glued to their chairs waiting for customers, but engage in personal selling and aggressive advertising in order to woo and retain their customers. The deregulation of the banking industry, coupled with the distress syndrome has ushered in a new wave of competition among banks in Nigeria. The intensity of competition in the deposit market had led banks to develop a range of new products in order to improve their individual market share. The present keen competition among financial institutions attests to this and also shows that the banking environment is constantly changing. The current economic recession, banking decree and the expanding markets led to the need for marketing to help the financial institutions remain in a profitable situation. However, marketing of financial services is a complex area, which requires not only full range of marketing skill and experience but also logical and creative application. References Bacc R J (1986) "The Use of Value Added in Measuring Managerial Efficiency" Business Review, Vol. 2 No. 1, spring Iyanda O (1991) "Marketing Concept, Definition and Roles" Paper Presented at Financial Institution Banking Center. Monday January 28 Kelly E J (1972) Marketing Planning and Competitive Strategy. Prentice Hall, Engleawards Cliffs New Jersey Our Bank-About PHP, Bank PHP, Online, Viewed, March 24, 2009, from, Read More