SERVICE MARKETING MIX

The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery. The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps which include People, Process and Physical evidence. Let us discuss the same in further detail: Product The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogeneous, perishable and cannot be owned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the restraunt is going to be. Place - Place in case of services determine where is the service product going to be located. For example: The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin.

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Promotion Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. Nowadays a lot of banks and telecom companies promoting themselves rigorously. This is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions. People People is one of the elements of service marketing mix. People define a service. In case of service marketing, people can make or break an organization. For example :If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Process Service process is the way in which a service is delivered to the end customer. the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer. For example: Companies like Mcdonalds and Fedex thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Physical Evidence The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator.

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MARKETING OF BANKING SERVICES.

Bank marketing is the aggregate of functions directed at providing services to satisfy customers financial (and other related) needs and wants, more effectively and efficiently than the competitors keeping in view the organizational objectives of the bank Why bank marketing is necessary?? The existence of the bank has little value without the existence of the customer Its aim is to create and win more and more customer and retain them through effective customer service. Appropriate promise to a customer through a range of services and also ensure effective delivery through satisfaction is important.

Concept of bank marketing: Identifying the most profitable markets now and then. Assessing the present and future needs in customer. Setting business development goals and making plans to meet them. Managing services and promoting them. Adapting to a changing environment in the market. Marketing Mix : It consist of 7 Ps of marketing:

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Pricing:
Buyer looks for satisfaction which differs from person to person. Keeping in view the level of satisfaction of particular segment, the bank have to frame the pricing strategies. Since RBI regulates the rates of interest, organization are suppose to serve weaker sections and rural regions of the country. Includes interest, fee, commission charged by the bank.

Place: Objective is to get right product, at right place, at right time and at least cost. It refers to the establishment and functioning of branches and other through
which banking services are delivered.

It can be accessed by large section of people. Promotion: Advertising Publicity Sales promotion Personal selling Push and pull strategies.

Product: The product mix of a company includes of all different product lines a company offers to customers. The product line of a bank might include more than 100 different services. Deposits Advances International banking Consultancy Miscellaneous

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Process: It refers to the system used to assist the organization in delivering the service. It aids to the customer satisfaction. It involves: Speeding delivery of services Reducing paperwork. Standardization of procedures. Customization as per individual demand. Physical Evidence:
Physical evidence is the overall layout of the place i.e. how the entire bank has been designed. Physical evidence refers to all those factors that help make the process much easier and smoother. For example, in case of a bank, the physical evidence would be the placement of the customer service executives desk, or the location of the place for depositing cheques. It is very necessary that the place be designed in such a manner so as to ensure maximum convenience to the customer and cause no confusion to him.

People: People are the employees that are service providers. In banking sector, the service provider plays an important role in rendering the customers the good and satisfactory service. It is extremely essential that the service provider understands what his customer expects from him. The position in the eyes of customers will be perceived by attitude, appearance, and behavior of the customer contact employee.

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MARKETING MIX IN INSURANCE INDUSTRY.

The term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organization survives and thrives in the right perspective. The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market. The Insurance business deals in selling services andtherefore due weightage in the formation of marketing mix for the Insurance business is needed. The marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the product, its price, place, promotion, people, process & physical attraction.

PRICING:
In the insurance business the pricing decisions are concerned with: The premium charged against the policies, Interest charged for defaulting the payment of premium and credit facility, and Commission charged for underwriting and consultancy activities

The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. The premium rates are revised if there are any significant changes in any of these factors. Mortality(deaths in a particular area):When deciding upon the pricing strategy the average rate of mortality is one of the main considerations. In a country like South Africa the threat to life is very important as it is played by host of diseases. Expenses: The cost of processing, commission to agents, reinsurance companies as well as registration are all incorporated into the cost of installments and premium sum and forms the integral part of the pricing strategy.
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 Interest : The rate of interest is one of the major factors which determines peoples willingness to invest in insurance. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums

PEOPLE:
Understanding the customer better allows to design appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. Training, development and strong relationships with intermediaries are the key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the staff and agent level, is one of the important areas to look into.

PROCESS:
The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels.

PHYSICAL DISTRIBUTION:
Marketing channel policy is another integral part of the life insurance marketing mix. Physical distribution is the delivery of insurance products at the right time and at the right place. In the case of life insurance, it is the combination of decisions regarding channels of distribution, Agents, Development Officers, Brokers, Branch Office, Retail financial service distributors, alliances with banks, corporate agencies, Bank assurance, e-trade, proper infrastructure and training facilities, etc

PROMOTIONS:
The insurance services depend on effective promotional measures. It is essential to have both personal and impersonal promotion strategies. Advertising and Publicity, organization of conferences and seminars, incentive to policyholders are impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders

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Company profile: Axis bank:

Axis Bank, previously called UTI Bank, was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company Ltd. UTI-I holds a special position in the Indian capital markets and has promoted many leading financial institutions in the country. The bank changed its name to Axis Bank in April 2007 to avoid confusion with other unrelated entities with similar name. Shikha Sharma was named as the bank's managing director and CEO on 20 April 2009. As on the year ended March 31, 2009 the Bank had a total income of Rs. 13,745.04 crores and a net profit of Rs 1,812.93 crores. Axis Bank is one of the Big Four Banks of India with State Bank of India, ICICI Bank and HDFC Bank 7 ps framework in axis bank: Products and services offered by AXIS Bank: E-broking Advisory services. Equity solution. Debt solution IPO Mobile recharges D Mat a/c Capital market funding

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PROMOTION:
Axis banking has adopted aggressive promotional strategy which are as follows: Cross selling exercises : Organizing school level painting competitions in order to create awareness about the environmental concerns and the wild life to promote kids advantage account. Wheels of fortune - this promo are targeted at all those customers who avail a personal loan, car or a two wheeler loan. There will be lucky draw at the end of the promo and the winners would get exotic prizes Personalized promos by sending mailers about various products on offer to all those who come in contact during the mass promotion strategies. The focus of the promotions are not just confined to acquisition of new products but also extends to creating product awareness, enhancing usage, and also provide value add to the customers for their faith and loyalty.

PLACE:
Axis bank is widely spread in India and its core banking operations has huge network: 580 branches and extension counters foreign offices in Singapore, Hong Kong, Shanghai and Dubai 2457 ATMs reaches out to 350 cities, towns and villages across the country AXIS bank owns a wholly owned distribution channel with dedicated workforce, thereby lowering the operating costs. It uses its network base to good effect to sell customized products.

PEOPLE:
Axis bank values its human resources highly and is constantly developing its human resources by laying strong emphasis on (rigorous) training development. Axis bank is growing at a good rate as there number of branches is also increasing along with the increase in the employee (14000 employees base) also showing the environment provided by Axis bank.

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PRICE:
The price of the product depends upon the services provided by the Bank on the respective product to the customers.

PHYSICAL EVIDENCE: Bank branch. Cheque book. Bank brochure. Statement of account. Logo. ATM.

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COMPANY PROFILE:

ICICI BANK
ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary market sales to institutional investors. With a change in the corporate structure and the budding competition in the Indian Banking industry, the management of both ICICI and ICICI Bank were of the opinion that a merger between the two entities would prove to be an essential step. It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of Gujarat at Ahmedabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India. Present Scenario ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited. Overseas, its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). As of December 31, 2008, ICICI is India's second-largest bank, boasting an asset value of Rs. 3,744.10 billion and profit after tax Rs. 30.14 billion, for the nine months, that ended on December 31, 2008.

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7 ps framework in ICICI Bank:

PRODUCTS AND SERVICES OFFERED BY ICICI BANK: PERSONAL BANKING (1) Deposits (2) Loans (3) Investments (4) Insurance (5) Demat services (6) Wealth management. NRI BANKING: (1) Money transfer (2) Bank accounts (3) Investment (4) Property solutions (5) Insurance (6) Loans. BUSINESS BANKING: (1) Corporate net banking (2) Cash management (3) Trade services (4) Fx online (5) SME services (6) Online taxes. PROMOTION: (1) Advertisement (t.v, radio, newspaper) (2) Outdoor activities (3) Other initiatives (i) In film promotions ( in baghban) (ii) Co-branding initiatives(alliance with amway india for launching of international card) (iii) Other initiatives ( young star account)

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PROCESS: The activities have been segregated into various departments accordingly. (1) Standardization: ICICI bank has got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. (2) Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives. (3) Number of steps: Numbers of steps are usually specified and a specific pattern is followed to minimize time taken. (4) Simplicity: In ICICI banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to deposits counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further. Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires.

PEOPLE: In a bank organization, employees are essentially the contact personnel with customer. Therefore, an employee plays an important role in the marketing operations of a service organization.

PLACES:
ICICI bank is widely spread in India and its core banking operations has huge network. The number of branches OF ICICI: 1900 in India and 33 in Mumbai.

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PHYSICAL EVIDENCES: Ambience in branch which projects modernization and sophistication. Consistency across the branches in construction ambience, etc. PRICING Penetrative pricing aimed at achieving large market share. Philosophy of profit through volume. Effort to drive out competition. Price leader in retail banking product. Aggressive pricing through low cost of funds acquisition. Pricing in ICICI bank:

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Company profile: ICICI PRUDENTIAL LIFE INSURANCE:

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank one of Indias foremost financial services companies-and Prudential plc a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with 1,960 branches (including 1,096 micro-offices) and an advisor base of over 230,000 (as on December 31, 2009). The company has 6 bancassurance partners having tie-ups with ICICI Bank, Jalgaon Peoples Co-op Bank, Ratanagiri District Central Co-op Bank, Ballia Kshetriya Co-operative Bank, Renuka Nagrik Sahakari Bank, Bhandara Urban Co-operative Bank.

7ps OF MARKETING:
PRICE: Pricing is very important in life insurance as policyholders are attracted towards it more often. ICICI Prudential has some unique policies which is different from other companies. Example: ICICI Prudential- Pure Protect Below is the table that shows premium for various age-term combinations for a Sum Assured of Rs.50 lakhs. Age 10 years 15 years 20 years 25 years 30 year Rs.7608 Rs.8378 Rs.9444 Rs.12558 35 year Rs.9889 Rs.11390 Rs.13,327 Rs.18809 40 year Rs.14394 Rs.17064 Rs.20067 Rs.27075

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PRODUCTS AND SERVICES: Following are products offered by icici prudential life: Protect ion plan Premiu m guaran tee plan
Invest Shield CashBack

Educat ion insura nce plan

SmartKid Regular Premium :

Wealth creatio n plan

Group Plans

Health Insurance Plans:

Retireme nt Plans:

Save Protect

Premier Life Gold

Group Term Insurance Plan

Diabetes Plans

Cashback

Invest Shield Life New

Smart Kid New Unitlinked Regular & Single Premium

LifeStage RP

Group Gratuity Plan

Cancer Plans

Home Assure

Wealth Advantag e

Group Super Annuatio n Plan

Critical Illness Plan

Pure Protect

Lifetime Gold

Annuity Solutions

Hospitalis ation Plan

Life Guard

.PROMOTION:
Over the last few months, ICICI Prudential has been advertising in outdoor, TV and press. The company launched a corporate television campaign Saat Phere which took the emotions and thoughts of initial Sindoor corporate film a few steps further. The company has also undertaken press and internet campaigns to inform customers about benefits of some of its products, particularly retirement solutions, through the Chintamani campaign.

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Other initiatives included tie-up with the Dabbawalla Organisation in Mumbai for a direct marketing exercise, to talk to the customer through a non-cluttered route, and thereby have a higher impact. About 100,000 direct mailers were attached to the dabbas, in areas such as Churchgate, Bandra and Andheri where there are mostly office-goers In addition to advertising, the company has also initiated several activities to raise consumer awareness about life insurance and ICICI Prudential. It includes seminars ICICI Prudential regularly holds consumer awareness meets on the need for retirement planning in different cities

PEOPLE: People are the main assets in any organization . They are very precious in the service sector. Therefore, ICICI Prudential has good number of talented people in their organization . A robust performance management system, compensation system and a segmented training architecture enable it to deliver value to the organization. The company provides an enabling environment to foster growth and learning for their employees. Every member of the ICICI Prudential team is committed to 5 core values:

Integrity Customer First Boundaryless Ownership Passion PROCESS:

The client approaches the insurer (ICICI Prudential) through an agent with a proposal containing his personal details, income details, medical history, products ( the product describes the features provided by the insurer like maturity bonus, claims allowed etc. The proposal will go through various stages of approval and risk evaluation. Upon final approval, a legal agreement, termed as policy, between the insurer and the client is prepared whereby the insurer covers the client for the sum assured. The client is also entitled for some additional benefits, if any, depending on the features of the product taken in the policy. The base agent gets a commission for the policy. The client pays a premium at regular intervals. These subsequent premiums are termed as renewal premiums. The base agent gets a commission on the renewal premium also. During the term of the policy, the client can submit claims. The insurer

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makes payment against the claim after verification. Depending on the type of claim the policy is either terminated or is kept in force. At the end of the term of the policy, the client gets the sum assured as part of the maturity benefit under life insurance policies. In addition to this the client will get the maturity bonus and any other benefits depending on the product feature.
. PHYSICAL EVIDENCE:

Physical evidence includes facility design, equipment signage, employee dress, tangibles, reports and statements. Signage: Signage personifies the insurance company. It gives a identity by which users recognize the company. A signage depicts the company philosophy and policy. Following are some of the examples Tangibles: Insurance companies give their customers and agents various tangible items like pen, letter pad, calendars. Such things try to reduce the intangibility characteristics of this industry. Example: Pen of ICICI Prudential Statements: The statements are punch line which briefly depicts the vision and attitude of a insurance company towards its users/potentials. It also indicates their business motive. Example: ICICI Prudential have a punch line called We cover you at every step of Life and also the advertisement of Jeete Raho was hit among the TV viewers. PLACE: MOSTLY Life Insurance companies have offices at main locations in cities and towns. But most of the customers buy insurance policies with the help of agents. Therefore place is important but other than place what is more important is wide distribution of policies through banks directly. It is known as Bancassurance. ICICI Bank uses bancassurance to distribute policies to its customers. ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with 1,960 branches (including 1,096 micro-offices) and an advisor base of over 230,000 ICICI Prudential has 6 bancassurance partners having tie-ups with ICICI Bank, Jalgaon Peoples Co-op Bank, Ratanagiri District Central Coop Bank, Ballia Kshetriya Co-operative Bank, Renuka Nagrik Sahakari Bank, Bhandara Urban Co-operative Bank.

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Company profile: Kotak Mahindra Old Mutual Life Insurance Ltd:

Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual. The company is one of the fastest growing insurance companies in India and has shown remarkable growth since its inception in 2001. Kotak Life Insurance employs around 5,565 people in its various businesses and has 197 branches across 141 cities.

7 Ps of Marketing of Kotak Life Insurance: PRODUCTS AND SERVICES:

Kotak Loan protection Plan
Kotak Term / Preferred Term Plan Kotak Eternal Life Plans Kotak Endowment Plan Kotak Money Back Plan

Kotak Super Advantage

Kotak Platinum Edge

Kotak Headstart Child Plans

Kotak Child Advantage Plan

Kotak Long Life Wealth Plus

Kotak Long Life Secure Plus Kotak Retirement Income Plan Kotak Second Innings Plan

Kotak Group Shield

Kotak Group Assure Kotak Gratuity Group Plan Kotak Superannuation Group Plan

Kotak Gramin Bima Yojana

PRICE:
Pricing is an important element in the service sector. So Kotak Life Insurance has maintained a good pricing mix for child plan: The price mix decisions basically depend upon the premium that they are going to charge from the end users. As in this case the premium charged will be low in the initial stages and will increase with the increasing age of the child. But in case if the

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child is physically disabled the premium charged will be high. The customers can even avail for loan facility if they opt for higher premium plan.

PLACE:
Kotak Life has adopted the place strategy in such a way that a gap between the services promised and services offered is bridged over. Kotak agents, brokers, branch office, retail finance service distributors alliances with banks etc. play an important role in delivering their services to policy holders at the right time and at right place. This product is promoted in places like school, colleges and other child zone areas. This product is highly flexible as it is present for children in urban well as rural areas and thereby it facilitates mobility.

PROMOTION: (1)
ADVERTISEMENTS: Kotak has recognized the need for this plan and therefore has adopted suitable marketing strategy which involves advertisements in popular kids channel like pogo, hungama, star plus etc.

(2) PUBLICITY:
The PROs of Kotak Mahindra life insurance has publicized this product taking into consideration the eligibility and features and has thereby come with an appealing strategy emphasizing not only on children who are main benefit holders of this product but also the family who will actually pay the premium for this product.

(3) SALES PROMOTION:

The promotion activities are carried out by the agents, development officers and branch officers. Kotak life has promoted this plan by giving calenders dairies bags which they thought should be given as a token of gift along with the plan. All such activities have increased the volume of saled and has also created a medium of awareness for the children.

PHYSICAL EVIDENCE
There are many examples of physical evidence, including some of the following: a) Business cards b) Internet / Websites
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c) Furnishings d) Internal Infrastructure

PEOPLE:
People are the main assets of financial organization because of service factor attached to it. Here in this case of insurance business, talented and experienced personnel are required. They also provide training to brief them up about kotak Mahindra life insurance to its new staff members. hey create an emotional commitment and strong two-way relationship between the employees and the Company. To have clear performance expectations and a clear return from the Company (working environment, development, reward, career opportunities etc), which helps employees to make a connection between their contribution and the progress made by the Company. To inspire and empower people to achieve their best and reward them competitively for their contribution and provide attractive career opportunities .To build a learning culture which fosters personal development and professional mobility and upholds values of professionalism, innovation, pragmatism, team spirit, integrity. To respect and value individuals, their diversity and support them in their need to balance professional and personal lives.

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