Dynamics of Financial Services Environment

Strategies, statements and planning process

Management Process

• The process of developing a plan, implementing it and evaluating the results. It is a dynamic and ongoing process rather than on one-time event because management is an ever changing environment.

The Management Process

Management Functions

• Planning

• Organizing

• Staffing

• Directing

• Controlling

Marketing Environment

• Macro-environment

• Micro-environment

• Public

Macroenvironment….

• The part of the marketing environment tht is external to the business and least controlled by it.– Economic environment– Demographic environment– Social/cultural environment– Political/legal environment– Technological environment– Natural environment

Microenvironment….

• That part of the marketing environment that is internal to the business and most controlled by it.– Customers– Employees– Producers/suppliers– Intermediaries

Public/Stakeholders

• Group of people who have something in common that may affect the ability of the business to pursue its objectives.

Discussion of Macroenvironmental Factors Affecting Banking

1. Do banks have any control over this force?

2. Describe the changes taking place in this element of the environment.

3. How does it affect our general area?

4. Has this change affected the products or services offered by banks?

5. Has it affected the way banks advertise and promote products?

6. How else has it affected businesses?

Marketing Management Process….

• The process of planning, implementing and evaluating activities aimed at meeting the objective of customer satisfaction at a profitable volume, carried out in an integrated framework and in a socially responsible manner.

Strategic Planning for Banks

Deposit Acquisition• Deposit inflow• Pools of funds

available• Bank investments or

loans

Loan Acquisition• Loan application

inflow• Loan applications

reviewed for credit worthiness

• Loan approved

The Unique Challenge of Bank Marketing

Prerequisites for Successful Strategic Planning…..

• Senior management support/involvement

• Cooperation at ALL bank levels

• Agreement to commit time, talent and resources

• Design responsibility for plan implementation

• Recognition that plan will not be perfect or unchanging

Marketing Strategy….

• The step in the marketing planning process during which the marketing mix strategies are selected in order to attract the target audience.

Steps in the Marketing Planning Process…..

• Situational analysis

• Setting objectives

• Target market selection

• Strategy formation

Model for the strategic Marketing Management Process

The Marketing Plan

Situation AnalysisProblems and opportunities

(SWOT)

ObjectivesStretching, measurable, consistent,

specific, challenging, attainable, timely

Target Market SelectionSegments to target with

marketing strategy

Marketing Strategy

Product Pricing Promotion Place (Distribution) Strategy Strategy Strategy Strategy

objectives objectives objectives objectivesstrategies strategies strategies strategiestactics tactics tactics tactics

Implementation

Evaluation

Feedback and modification

Federal Regulators of the Banking Industry

Regulator• Federal Reserve System (Fed)• Federal Deposit Insurance

Corporation (FDIC)• Office of the Comptroller of the

Currency (OCC) National Credit Union Administration (NCUA)

• Office of Thrift Supervision (OTS)

• Entities Regulated• Bank holding companies;

national banks; state banks that are Fed members

• Federal Reserve member banks; state-chartered commercial banks that are not Fed members; state-chartered savings associations

• National Banks• Federally chartered and

federally insured credit unions• Federally chartered savings

and loan associations

Expansion Matrix

Markets Present Products New Products

Present Penetration Product Expansion

New Market Expansion Diversification

Product/Market Matrix

• Markets Existing Products New Products

• Present Market Product Penetration Expansion

• New Market Diversification Expansion product/market Expansion

Types of Objectives Found in Banks….

• Mission Statement

• Corporate or Financial Objectives

• Marketing Objectives

• Departmental Objectives

• Job Objectives

The Product/Market Expansion Matrix

Markets Present Products New Products

Present Market Penetration

Improve bank’s position with present products in present markets

Product Expansion

Develop new products for present markets

New Market Expansion

Find new markets to use bank’s present products

Diversification or Product/Market Expansion

Develop new products for new markets