ELK ASIA PACIFIC JOURNAL OF MARKETING & RETAIL MANAGEMENT

ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 10 Issue 1 (2019)

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THE 7 Ps OF BANK MARKETING: - MACRO & MICRO

ENVIRONMENTS AND ITS INFLUENCE ON PUBLIC SECTOR &
PRIVATE SECTOR BANKS.

SATYENDRA KUMAR DR. TRUPTI SAMIR ALMOULA

Phd Scholar, Management, Gujarat Technological Director, Narmada College of Management, Shuklatirth
University, Nr.Vishwakarma Government Engineering Road, Zadeshwar, Bharuch-392011, Gujarat, India,
College, Visat - Gandhinagar Highway, Chandkheda, Email:[email protected]
Ahmedabad – 382424 , Gujarat, India,
Email:[email protected]

ABSTRACT
The banking industry is undergoing through a transformational phase caused by intense
competition, technological advancement and deregulation; this scenario is reflected in the
evolution of bank marketing. Tracking back to the history of bank marketing, it is found that
some marketing concepts emerged in the west in 1950s in the form of advertising and
promotion. Bank marketing is not just advertising and promotion campaign but a managerial
process by which services are matched with market.The objective of this paper includes
understanding of the product, price, place, promotion, people, process and physical evidence
as key drivers of bank marketing. Services are intangible, inseparable, heterogeneous and
perishable. These special features make it difficult for a prospective customer to evaluate a
service before purchase, as is possible in the case of a product. Therefore, marketing of
services becomes even more important than marketing products. Marketing of services
essentially require the application of 7ps against the conventional 4Ps of marketing. This is
because the services have certain distinct characteristics, which make them different from
products. An attempt has been made in the following text to explain the significance of each
one of them in the banking context. This study focuses on macro and micro environments that
influence the overall performances of the public sector & private sector banks by indentifying
the variables of the 7 Ps of bank marketing. Public sector banks implement specific marketing
concepts, but as it results from our study, they do this in a random and inefficient manner.
Although public sector banks are aware of the usefulness of marketing tools and programs,
they often overlook marketing as a strategic benefit proposition. Banks have different
customer and market orientation while they operate in the same industry.
KEYWORDS: Bank Marketing, 7Ps of Marketing Mix, Public Sector Marketing, Retail Banking, Services
Marketing

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ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 10 Issue 1 (2019)

INTRODUCTION Therefore, marketing of financial services

Services are intangible, inseparable, has gained prime focus to create trust in
heterogeneous and perishable. These special invisible purchases. Table - 1, explains the
features make it difficult for a prospective Role of Extended Ps in Services Branding
customer to evaluate a service before and Table – 2 details The factors which
purchase, as is possible in the case of a influence the bank marketing. (Ref Table
product. Therefore, marketing service – 1 & 2)
becomes even more important than
There are several strategies bankers may
marketing a product, so that the brand
adopt for their future endeavours which
communicates a promise and evokes trust in
influence 7Ps and their actions, Table – 3
prospective customers. Marketing is often
details The strategies bankers adopt which
treated as the domain of products, because it
influence 7Ps and bank marketing. (Ref
is easier to market a product through a
Table – 3)
name, a logo, a colour scheme or whatever,
all of which can be easily communicated A. PRODUCT
and widely circulated through the product,
its packaging, label etc. Marketing a service A product is a good or service, which offers
especially financial services are to that a basic set of features representing its ability
extent more difficult, but nonetheless merits to satisfy certain basic needs. Since banks
serious attention. deal in services, which are intangible,

The main differences that influence the heterogeneous, perishable and variable in

marketing of financial services are: nature, the need is to tangibles the core
services offered. Branding a service,
• They are heterogeneous and could vary in improving its quality, providing after sales
quality. service are a few examples of how a service
can be made tangible.
• They are inseparable and customer is
actively involved during service creation. For example: Savings account and fixed
account are a generic service product, which
• They are intangible and cannot be stored.
is augmented in the form of two in one
account through the additions of various

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ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 10 Issue 1 (2019)

features such as cheque and debit cards, over Table – 4 explains Micro and Macro
draft facilities, monthly statement etc. The environments which influence Product.
product offerings of banks generally include: (Ref Table – 4)

• Current accounts: cheque books, IMPACT ON BANKS

standing orders, electronic fund transfer,
• Digital is first focused on optimising
mobile banking, and internet banking.
current products and services. Private sector
• Savings: Deposit accounts, money banks having sufficient resources taking the
market deposits. lead by R&D and experimenting with new
products.
• Loans: overdraft, housing loans,
business loans, personal loans, vehicle loans, • PSBs waiting for the success of new
cash credit. product development and playing the role of
adopters.
• Card Services: ATM, CASH, and
Credit Card, Prepaid Card, Forex card. • Demographic changes are providing
enough opportunities for growth of both
• Advisory Services: Wills, Trusts, Private & PSBs and will require innovation
executorships, tax planning, investment to develop new products and services.
advice, wealth management services etc.
• Private & Foreign Banks use
• Financial Services: pensions,
enhanced data capture and provide more
personal equity plans, bank insurance,
targeted customer offerings and improved
mutual funds products etc.
services.

• Others: Travel and Foreign

B. PRICE
exchange services.
Banks have not, until recently, viewed price
There are Micro and Macro environments
as a major element of marketing strategy
which influences the products design,
because of government regulations with
services, benefits, features and their delivery
respect to price. However, pricing is
to the customer of private and public sector
becoming more important as a result of
banks differently and they act accordingly.
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ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 10 Issue 1 (2019)

deregulation, increasing competition and • Public sector banks use competitive

decreasing consumer loyalty to particular pricing while serving customers as they do
banks. Pricing for banks take a number of have two sides’ pressures. First from
forms: competitors and second from government to
offer products for the mass customer.
• Service charges for different types of
transactions e.g. debit, cheque clearance, • Private sector banks price their
standing orders etc. products according to their most profitable
• Interest rate for loans and overdrafts. customers mostly premium clients.

• Fees for services, fixed or on a

• Public sectors banks do the pricing
commission basis.
which caters needs of both classes’ premium
• Interest rates, on
as well as mass customers.
current/deposit/saving etc.

• In setting their fees, charges and C. PLACE

interest rates, the banks are influenced by
The concept of ‘Place’ in the world of
the Government/RBI legislation, competitor
banking is essentially the distribution
activities, cost structures, demand factors
systems through which the financial
etc.
services are delivered to the customers.
Table – 5 explains Micro and Macro
Traditionally, for banks the place for
environments which influence Price. (Ref
transitioning business in a bank branch.
Table – 5)
But, today the developments in Information

IMPACT ON BANKS Technology (IT), changing customer desire

and needs for greater convenience and
• Technology is making it easier for vulnerability of branches to excess costs,
customers to switch banks, making the trend is towards the introduction of
relationships much less sticky, Private Banks Automated Teller Machines (ATMs) (off
normally do high pricing for offering better site and on site), Vessel Traffic
technology and customer centric products. Management System (VTMS) and
Environmental Technology Opportunities
Portal (ETOPS). These activities have

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ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 10 Issue 1 (2019)

transcended the bank branches and have private sector banks to avoid opening
reached the customer’s home or work place branches at unprofitable market i.e. rural
through facilities like home banking, areas.
telebanking and satellite banking etc.
D. PROMOTIONS
Table – 6 explains Micro and Macro
There are several objectives of a bank’s
environments which influence Place. (Ref
promotional activities viz. to build image
Table- 6)
and reputation, to differentiate among
competitors, to generate interest and
knowledge, to attract new customers and to
IMPACT ON BANKS generate customer loyalty. The promotion
mix includes the following:
• Public sector banks open their
branches and ATMs as per the social and • Advertising
economic needs of the country and states • Personal Selling
guided by regulatory i.e. RBI, sometimes in
• Sales Promotion
unprofitable locations.
• Public Relations
• Private sector banks use • Direct Marketing
profitability as a model while opening their Table – 7 explains Micro and Macro
branches and ATMs. Where Public sectors environments which influence
banks have larger responsibility to serve Promotion. (Ref Table – 7)
poorest of the poor under financial
inclusion plan of the government which IMPACT ON BANKS

compel them to open large number of rural

• Branding and marketing is more
branches.
important than ever before. Private sector

• Mobile banking increasingly banks are promoting themselves as most

disrupting the distribution models (e.g. technosavyy banks through larger digital

instant video conferences with product platform.

experts) and the payments industry (e.g.

P2P mobile payments). This is helping
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ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 10 Issue 1 (2019)

• Public sector banks promote Table – 8 explains Micro and Macro

themselves as most reliable and trustworthy environments which influence People.
banks supported by the government. (Ref Table – 8)

• Today, social media coexist IMPACT ON BANKS:

alongside traditional media. Its being the

• Well trained employees are the
primary medium to connect, engage, inform
greatest assets for any service organisation.
and understand customers (from the mass
Private sector banks invest greatly for the
‘social mind’ to the minutiae of each and
overall development of their staff who can
every individual), as well as the place
serve their clients appropriately.
where customers research and compare
banks’ offerings. Most of the private • Public sector banks recruiting a lot
sectors banks and some public sector banks of staff now a days as they have large
too, using social media to reach out their strength going to retire in next couple of
customers. years and will create huge human resource
and knowledge gaps. They are also
E. PEOPLE
investing huge amount in the training and
The ‘people’ component reflects the development of their staff.
important role played by individuals in the
provision of financial services. The term • Most cross-border knowledge

‘People’ here refers to all those persons transfer of capital, best practices and

concerned with supplying the services to innovations are taking place through new

the customers. In the banking context, it market entrants, third-party partnerships

refers to the bank personnel. Since banks and intermediaries, rather than through

essentially deal with intangibles, which at cross-border banking institutions.

times are difficult for the mind to grasp, the

F. PROCESS
customers rely heavily on the bank staff
that provides them service. This act has led The processes/procedures theme focuses on
many banks to build and develop specialist the mechanisms by which the service is
sales team to meet more specific needs of delivered. This includes business policies
the corporate clients. for service provision, procedure, degree of
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mechanization etc. The emphasis on reducing long queues in the branches and
process arises from several sources. First, 24/7 service delivery at their finger tips.
the heterogeneity of services raises the
issues of quality management providing the • Both Private sector banks and

service may be highly visible to the public sector banks are exploring every

consumer and will need to be flexible possible opportunity to use digital media to

enough to accommodate potential demand improve their prices and turnaround time.

variations. Third, the intangibility of

G. PHYSICAL EVIDENCES
services means that the process by which
the service is provided has an important The physical evidence component refers to
influence on the consumer’s assessment of the environment in which the service is
service quality. delivered and also the tangible items, which
are associated with that service, such as
Table – 9 explains Micro and Macro
wallets or documents. It is generally
environments which influence Process.
recognised that physical evidence can be
(Ref Table – 9)
subdivided in two components. Firstly,

IMPACT ON BANKS peripheral evidence which can be possessed

by the consumer but has little independent
• Banks have become more customers value e.g. a cheque book, Secondly, essential
centric by improving their TAT (turnaround evidence that cannot be possessed by
time) immensely. Private sector banks have consumer but has independent value e.g. a
made their banks leaner by reducing bank branch. The provision of physical
number of intermediaries and improving evidence is likely to be most obvious in the
TAT. product and price components of the
marketing mix, although promotion too can
• Public sector banks are improving play an important role in creating a tangible
their processes and TAT to compete with image for the service and the bank.
private sector banks and new entrants.
Table – 10 explains Micro and Macro
• Digital media has played a crucial environments which influence Physical
role for improving process time by Evidence. (Ref Table – 10)

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IMPACT ON BANKS towards delivering the quality service with

the focus on the organization and selling
• The 7 th
P i.e. physical evidence task. Public Sector Banks are more inclined
plays an important role when banks decide towards internal communication than
what kind of customers they intended to delivering the quality service and selling
serve. It varies from location to location. task in comparison to Private Sector Banks.
Banks should continuously audit their
• Private sector banks use Physical
marketing culture to identify gap and focus
evidence to showcase their expertise,
more on the facets where they lack to
customer service and brand image. They
develop a customer centric marketing
maintain their branch structure more or less
culture with employee focus to have an edge
same irrespective of location whether it’s
in terms of marketing effectiveness,
opened in rural area, semi urban area or
competitiveness, and better service quality.
urban area.

Banks should have more emphasis on the

• Public sector banks 7th P differs from
aspects where they have shortcomings,
location to location as they cannot provide
employee relations, skills, training and
the same experience to rural branches where
motivation to develop a marketing culture
profitability is nil but branch has been
which will help in developing market
opened due to regulatory compulsion. So
oriented approach for customer satisfaction.
they use Physical evidence factor
Banks should set marketing culture
discretionary according to customer base.
benchmark to achieve marketing

CONCLUSION effectiveness and routinely examine their

current level of marketing culture. Compare
It is apparent that Public Sector Banks and it with that of competitors and set
Private Sector Banks have different benchmark to identify gaps, and focus on the
marketing culture. They work in different marketing culture elements where they lack
micro and macro environments with a to improve their marketing culture to gain
common cause of serving customers with the competitiveness.
best services. Private Sector Banks employ a
marketing culture which has orientation REFERENCES

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[1] Andreea Mihaela Barbu and Mihai [6] Dash, M., Dash, S. and Sharma, J.P.
Orzan (2012), Macro & Micro Influences on (2012) “A Study on the Relationship
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[2] Butler, P. & Collins , N. (1995) [7] Booms BH, & Bitner MJ (1981),
“Marketing public sector services: Concepts Marketing Strategies and Organizational
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[3] Day, J., Reynolds P. & Lancaster , G. [8] C. Webster, (1995), “Marketing
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[9] N. F. Piercy, and N. Morgan (1994),
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[11] Sarin, Anil (2007), “Contemporary Marketing Academics. Marketing

Issues in Services Marketing.” Prabandhan: Intelligence & Planning, 13(9), 4-15
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[14] Gyaneshwar Singh Kushwaha &
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[13] Rafiq, M., & Ahmed, P. K. (1995). Banking – Views and Vistas: Atlantic
Using the 7Ps as a Generic Marketing Mix: Publishers and Distributors (P) Ltd.,
an Exploratory Survey of UK and European 521,295-309

LIST OF TABLES

Table - 1: Role of Extended Ps in Services Branding

Role of Extended Ps in Services Branding

Traditional Elements Contextual Cues
Product People
• Superior Quality • Highly trained staff
• Trusted brand Image • Better customer care
• Unusual or additional features • Greater efficiency
Extended Guarantees • Personal attention
• Tangibilisation • Specialist skills
Price Process
• Value addition • Advances in technology, e.g.
• Special Discounts ATMs, Call Centres
• Preferential Credit Items • Systems, e.g. , cash-dispenser,
ticket vending machines
• Fast response time
Promotion Physical Evidence
• Innovative advertising campaigns • Comfortable surroundings

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• Loyalty Promotions • Superior décor

• Special Offers • Qualifications
• Direct Mail • Evidence of professional standing,
• PR, Sponsorships e.g., membership of professional
Place bodies
• Extensive availability • Strong, Recognisable Corporate
image, e.g. Staff Uniforms, house
• More outlets than competitors
style.
• Innovative methods, e.g. tele-
• High Quality tangibles
banking
• Supporting literature
• Careful selection of quality
channels
Source: Chowdhary, Nirmit, and Chowdhary, Monika, Text book of Marketing of
Services – The Indian Experience, pg: 125.

Table - 2: Factors which influence the bank marketing

Sr.No. Factor Descriptor

1 Culture • Commitment of senior executives for marketing.
• Cooperation and coordination between the managers
and staff to deliver superior value to the clients.
• Appreciating new and innovative ideas to serve clients
in a better possible manner.
2 Organization • Marketing as a separate vertical headed by a senior
management official.
• Organization having forward and backward integration
within the organization that extends beyond
communications.
• Skilled marketing personnel who work closely with
managers in operations and other departments.
3 Planning • A well defined marketing plan aligned with
organization’s goal, mission and vision.
• A well defined brand guidelines and clearly spelled
execution strategy.
• Reasonable marketing budgets to take care of defined
short term & long term marketing objectives.
4 Management • A well defined proactive process for identifying and
developing new products & services.
• A well defined time bound approach to act upon worthy
ideas.
• A well defined communication strategy to communicate

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to its target audiences.

5 Knowledge • Creating a learning environment among the managers &
and Skills staff for continuously up gradation of marketing skills.
• Encouraging the managers & staff to participate in
external exhibition and seminars to acquire necessary
knowledge and skills to counter cut throat competition
in the industry.
• Flexibility to upgrade itself to respond the dynamic
changes in techniques and technologies in the industry
6 Marketing • Judicial use of marketing research to assess and
Information evaluate elements of the marketing mix.
and • Use of robust Information systems and Insights from
Measurement multiple sources, make it easy to access, analyze, and
approach target audience.
• Identifying and applying a rational approach to measure
marketing performance against stated objectives. The
results will help to identify areas for improvement.
• Rewards & recognition approach to motivate Managers
and staff for achieving marketing objectives and
improving the value delivered to clients.

7 Resources • Sufficient Marketing budgets to implement identified

strategies and tactics for whole year.
• Sufficient human resources to implement marketing
plan to take care of the size and needs of the
organization.
• Fetching new clients through the references from
satisfied clients to use the organization's products and
services.

Table - 3: The strategies bankers adopt which influence 7Ps and bank marketing.

Sr.No. Strategy 7Ps Influenced Action

1 Financial • Place • Expansion
Inclusion • Product • New Customers
• Promotion • New Products/Services
• Promotion

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2 Empowering • People • Employee Retention

Employees • Process • Training
• Goodwill Initiatives/Appraisal
3 Expansion • Place • New Branches
• Physical • Infrastructure
• Evidence • Attractive Schemes
• Promotion • Branchless banking/Remote
• Process
4 Business • Process • Cost Effective
Outsourcing • People • Back Office Job Process
• Price • Marketing
• Promotion • 24/7 Customer Service
• Global Access
5 People • People • Attractive Offers
Oriented • Process • Customized Products
Business
• Product • Public Relations
Management
• Promotion • Grievances Redresaal
Philosophy
• Personal Selling

Table – 4: Micro and Macro environments which influence Product.

Micro Environment Macro Environment

• Innovating and experimenting with • Technological and scientific R&D

new products. and innovation.
• New Product Development • Global changes in banking and
• Customer Expectations. financial services.
• Domestic Regulatory requirements. • International regulatory , Basel III
• Technology (Digital and mobile). • Demographics (Population growth
• Usefulness (Single user or Family) discrepancies, Ageing populations,
Changing family structures, Belief
structures)
• New Model & Competitors

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Table – 5: Micro and Macro environments which influence Price.

Micro Environment Macro Environment

• State intervention • Regulatory environment

• New Market Entrants • Fiscal pressures
• Domestic Competition • Economic strength (Economic
• Social Service Schemes Environment) ,Trade , FDI, Capital
balances, Resource allocation ,
Population
• Investment strategies

Table – 6: Micro and Macro environments which influence Place.

Micro Environment Macro Environment

• Regulatory Environment • Political, Cultural Diversity

(Metro/Urban/Semi Urban/Rural) • Demographics (Population growth
• Financial Inclusion discrepancies, Ageing populations,
• State Governments (RRBs, Changing family structures, Belief
Cooperative Banks) structures)
• Untapped Rural Area • Social & Economic Scenario
• Customers scattered over wide areas • External Competition
• Infrastructure

Table – 7: Micro and Macro environments which influence Promotion.

Micro Environment Macro Environment

• Budget • Electronic & Digital Media

• Distribution Channel • Social Media
• Market Size • Competition from existing and new
• Organisation Mission & Vision entrants
• Brand Image

Table – 8: Micro and Macro environments which influence People.

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Micro Environment Macro Environment

• Better Customer Service • Social and behavioural change

• Organisation Structure (Urbanisation, Global affluence, Talent,
Changing customer behaviours – social
• Human Resources
media, Attitudes to FIs)
• Talent
• Learning & Development
• Trustworthiness
• Specific Customer Outcomes
• Organisation Culture
• Customer Relationship
• Enabling innovation, and the
capabilities required to foster it
• Retaining Existing Customer

Table – 9: Micro and Macro environments which influence Process.

Micro Environment Macro Environment

• Organisation Structure • New & innovative use of analytics

• Proactively managing risk • Disruptive technologies
regulations and capital impacting Financial services
• Regulatory Compliance • Lean Organisation
• Turn Around Time • Simplifying business and operating
• Well Defined Job Allocation models
• Outsourcing

Table – 10: Micro and Macro environments which influence Physical Evidence.

Micro Environment Macro Environment

• Premises • Visibility
• Location • Brand Image
• Budget • Customer Expectations
• Organisation Mission & Vision • External Competition
• Demographics

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