December 14, 2011

Promotional Mix of Bank Services

Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)

Marketing of Financial Services -JAIBB
Promotional mix of Bank service: A study on Dutch Bangla Bank Ltd. - (DBBL)

Promotional mix is the combination of all the promotional tools used for communicating the offered services. Dutch Bangla Bank Ltd. (DBBL) is such a reputed service provider that has become differentiated from
other Banking organizations in Bangladesh which was formed as a joint venture having 70% share of Bangladesh and 30% of Europe. DBBL got its commence paper or the permission of starting business functions in 1995on 4th July. It commercially started its business function with a branch at Dhaka first on 3rd June 1996. With in a short time it grew faster in the market. At present it is a fully online banking organization in our country having 39 branches all over the country. Not only that it has the highest number of ATM booths in our country. It has made the banking services easier to the country people through 130 ATM booths that are the highest number in comparison to all the present government and private banks in our country.

With all its promotional mixes DBL is operating functions effectively maintaining corporate social responsibility refunding the money back from a certain profit portion. For the well combination of the promotional mix and its contribution DBL has occupied a distinctive position in the market. In the CAMEL (Cash, Assets, Management, Equity and Liability) study under the supervision of central bank of Bangladesh DBL occupied the first position in2004. In the year of 2005 it occupied the second position. In Bangladesh DBL has introduced on line banking through Internet, POS and ATM. The success of offering the proposed service has been possible by the contribution of the sound blend or the promotional mix including both the printed and the electronic media.

Reasons for choosing DBBL:
There are a lot of service organizations available in our country. But in our case study we have selected DBL as it has fame in the market.

Our study will cover only the promotional mix side, about this regard the promotional mixes are known a little bit to us. It is known that if the offerings are not matched with the communication then customer will not be satisfied. Ultimately word of mouth will not be generated. Here DBL seemed very much careful. We know that communication gap is very much crucial for any service organization to make it successful which is the deviation between service provided and communication disclosed. DBL is sincere about this regard and that has influenced us to select DBL as an object for our case study.

The theoretical framework refers to arguments quoted by the renowned experts about the mentioned topic. Here the theories developed by the writers are bellows:

According to McCarthy “promotion is communicating information between seller and buyer to change their attitudes and behavior.”

According to Philip kotler “ promotion stands for the various activities the company undertakes to communicate its products merits and to persuade target customers to buy them”

According to William J Stanton “the term promotion is used to refer to the use of persuasive information which is conjunction with other elements of marketing mix.”

According to Philip kotler “promotion or communication mix means combination of all promotional tools and the firm’s promotion or communication mix communicates the firm’s positioning strategies to its relevant markets, including consumers, employees, stockholders, and suppliers”

Communication mix: according to Douglas Hoffman “ the firm’s promotion, or communication mix, communicates the firm’s positioning strategy to its relevant markets including consumers, employees, stockholders and suppliers. The term communications mix describes the array of communications tools available to marketers. Marketers need to combine the elements of the marketing mix (including communication) to produce a marketing program. The elements of marketing mix fall in to four broad categories: personal selling, media advertising, publicity and public relations and sales promotions.”

Personal selling: According to Philip kotler “ personal selling is an oral presentation and conversation with one or more prospective customers.”

According to William J Stanton “personal selling is the direct presentation of product or service to a prospective customer by a representative of the organization selling it.”

Advertising: According to Philip kotler “Advertising is any paid form of non- personal presentation and promotion of ideas, goods, or services by an identified sponsor”

According to William J Stanton “ advertising is impersonal mass communication that the sponsor has paid for and which the sponsor is clearly identified.”

Publicity: According to Philip kotler “ publicity is a non personal stimulation of demand for product, service or business that is transmitted through a man, media at no charge.”

According to William J Stanton publicity is a special form of public relation that involves news, stories about an organization or its services.”

Public relation: According to Philip kotler “ It includes a variety of programs designed to promote or protect a company’s image or its individual products”

According to William J Stanton “public relation encompasses a wide variety of communication effort to contribute to generally favorable attitude and opinion toward an organization and its service.”

Sales promotion: According to Philip kotler “ sales promotion a key ingredient in marketing campaigns, consists of a diverse collection of intensive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or trade”

According to William J Stanton “sales promotion is demand stimulating activity designed to supplement advertising and facilitate personal selling. It is paid for by the sponsor and frequently involves a temporary incentive to encourage a purchase.”

Empirical study:
Empirical study refers to the reality of perception. The reality about its communication mix or promotional mix is up to mark. What it is promising to the customers through the different promotional mixes are being matched with the reality. The services include:

  • Usual Banking services.
  • Online Banking facilities.
  • Services to the distressed community
DBL uses all types of promotional mixes to cover the target market. It is currently using both the printed and electronic media. The elements of promotional mix consist of: -
  • Advertising.
  • Sales promotion.
  • Public relation.
  • Publicity.
Word of mouth:
DBL is communicating the proposed services through the mentioned elements of promotional mixes. Now a short explanation of the service offered can be viewed.

Usual Banking services:
DBL offers the usual Banking services include the fastest and speedy transactional account services consist of current account, savings account, fix deposit scheme and special target account. The well-trained front desk executives with well-decorated inanimate environment are performing the activities very well.

Online Banking facilities:
DBL is providing the shoposticated target customers with online Banking facilities through ATM card, Internet, POS and SWIFT (POS and SWIFT’s meaning was not available in annul report 2005 of DBL)
Earlier it has been noted that country wide it has the highest number of ATM booths including 130 by which the customers are withdrawing money with in 24 hours. It is offering the customers four types of cards and these are Classic card, Silver card, Gold card and Visa electron. For the Classic card there is no charge and for the first time clients, Silver card is offered to the current account holders who can transect anytime and any amount according to the deposit, Gold card is allowed to the account holders who have at least 500000 tk deposit and through the Gold card the customers can shop in credit basis up to 2000000tk, Visa electron is under process that may offer unique service to the client in future. The foreign client can send money from any corner of the world through the Western Money Union, as DBL is one of the representatives that serves the nation the service through the Internet facility.

Services to the distressed community:
Besides the important services performed or the clients DBL is performing some distinct activities for the people who are distressed in some of cases they are deprived of a lot. DBL is doing a lot for those people through performing the corporate social responsibility (CSR) countrywide. DBL previously would allocate 2.5% of its annual profit to perform the CSR activity and now it is allocating 5% of its annual profit for the CSR activities. DBL has formed a foundation for smooth performances named DBL foundation. To build the corporate image it is donating a lot of money to different charitable organization, donating to the flood affected and winter affected people in our country.

Promotional mix used by DBL:
We know that the combination of all the promotional tools is referred to as promotional mix. Here DBL is blending a sound mixer by which it is trying to caver the whole target market. Now we will view separately all the elements of promotional mix.

DBL is using all the printed media and electronic media for communicating the services to the clients. The elements of the mixes are as follows:

Printed media: DBL is using all the printed media including the newspaper, magazines, festoons, billboard, and etc. to communicate their services.

Electronic media: It includes different TVs both the government run and privately own to position the idea “your trusted partner”.

Sales promotions: Sometimes DBL undertakes sales promotion to attract the existing and new clients short time basis but not appointing any personnel specifically as sales personnel. Word of mouth of the existing clients act as sales promotion for that period.

Public relation:
DBL sponsors different seminars, symposiums, math Olympiad to build corporate relation with the mass people.

As DBL is performing a lot of social responsibilities. It was awarded the number one CSR performer in the southern Asia in a conference held in Philippines. Not only that different media both views the countrywide nonprofit able performances printed and electronic which are publishing and telecasting the news countrywide. it also did the beatification of part of Dhaka city, Hotel Sheraton to Ishkha road and that attracted the media as a result DBL is getting publicity than any other service organization in our country that represent obviously the reality.
Word of mouth:We know that satisfied customer is the best source of promotion and DBL has a great impact of word of mouth, which is generated from the existing satisfied customers as they promote the bank services that they avail. Further more those potential customers who don’t have account but wish to open an account in future for availing the smart service of DBL.

In the study we find that the promotional mixes of DBL are contributing a lot to retain the goodwill and day by day the authority is being serious about making a sound mixer of their communication mixes.

The service organizations offer their offerings through the promotional mixes. If the reality is matched with the promotional messages then no problem but the situation will be very crucial if promises are not matched with the real services. The deviation between the theories with the practice is analysis. In the study we find that the inanimate environment of the DBL of - branch is very much modern and the behavior of front line executives are standard. The standard of each advertisement in different media are very fine. Especially the social responsibilities performed by the DBBL attracted to the eye of many. Actually DBL has properly used its promotional mixes. It is trying to provide the standard and promised services to its clients. DBBL thinks that the service provided will make the customers loyal as a result those customers will further recommend the others. For doing that it is emphasizing on the publicity and public relation and publicity that is the result of CSR. The target customer of DBBL is the higher customer group and slightly he upper middle class group as well. DBBL has been successful to communicate with the target customers by the proposed services through the promotional mixes. The proposed on line banking has matched with the reality also. In short it can be asserted that the differences between the services of DBBL communicated through various tools and the real mixers of promotion, the performances of individual promotional tool and the reality of the service offered are positive to DBBL and to the customers.

Conclusion and Recommendations:
The promotional mixes and the effectiveness of them are fully judgmental but the reality of the services can be understood better if we would possess accounts at the bank. In spite of this we can say that this joint venture is performing very well in serving the nation very well. But still there are some recommendations, which are as follows:

Target customers:
Although DBBL has targeted the higher-class income group but most of the people in our country are middle class and lower class income group. DBBL can target that segment to increase its market share although it has become successful to satisfy the higher income people.

Customer training:
We know that DBBL has 130 ATM booths allover the country but the people are less trained about this technology. So it can provide more training to the targeted customers about different card including classic card, silver card, and gold card. Although visa electronic is not available but the band has to teach the people about the upcoming technology. Although it is providing the prospectus and other written learning aid but the language is in English. Those can be translated in to Bengali for the betterment of the customers.

New social task:
In order to draw the attention of the people DBBL can create new ides that means the scope for performing the Corporate Social Responsibility (CSR) such as promoting the bad image of early marriage and creating mass awareness about it. Informing the people about the Sanitation and first aid in critical situations.

In brief we can claim that, to the customers DBBL is a popular bank. For this it has obtained 2nd rank. It blended a good promotional mix. Consumers perceive a little risk. It is offering professional banking. Promotional mixes are effectively communicating. Day by day it will target new customer. Its slogan will be correct “ your trusted partner”. It will be very careful for social responsibility. It will show the customers more honesty. For adding value to customers no conclusion. DBBL will be more careful that’s our recommendation.