Prior
to the mid-1950s, bankers had little understanding for marketing.
It came into banks in the late 1950s and was introduced to
customers through advertisement. Market development and market
penetration were the focus in 1970s when banks expanded their
area of operation by opening more branches. Banks developed
new products and services in the 1980s to cater to the various
needs of increasing number of customers.
With
the advent of banking sector reforms, the scenario of banking
in the 1990s has totally changed. Banks now operate in a situation
of keen competition in their financial service activities,
whether it is canvassing of deposits, extending credit line
or in selling ancillary services. In such a competitive environment,
the ability of a bank even to sustain its growth rate depends
on how well the needs of customers are identified and effective
marketing strategies are evolved. This involves developing
new and improved products and services, providing better amenities
and facilities, exploring new distribution channels and putting
in place effective marketing strategies so as to continuously
meet the changing customer needs.
A
study by Meidan (1976) revealed that about 90% of the respondents
banked at the branch nearest to their home place and place
of work. Convenience, in terms of location, was also found
to be the single most important factor for selecting a branch.
Rajagopla Nair (1994) in his study on rural bank marketing
found that security and liquidity are the major prerequisites
for deposits by rural customers and that interest rate on
deposits is not at all a criterion for rural bank depositors
to deposit their savings with commercial banks. However, Key
findings of the study by Laroche, Rosenblatt and Manning (1986)
on diverse demographic segments included importance of location
convenience, speed of service, competence and friendliness
of bank personnel.
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