Types of Banking

Types of Banking
When we talk about banks, we are talking about several different types of financial
institutions, conducting different kinds of business. Some banks are very large and carry
out many different functions, others are more specialised. Some have operated for
hundreds of years and some have taken on new kinds of business quite recently.
Not all banks carry out the same range of activities. Banking activities can be generally
divided into the following types:

Central Banking
The duty of central banks is to maintain financial stability, otherwise a
country's economy will not operate properly. Central banks act as
regulators of their country's interest rates by controlling the amount of
money in circulation and buying and selling currencies. They amass
reserves and act as lenders of last resort, should another bank get into
trouble. They exist as a separate entity from all the other banks.

Retail Banking
Retail banks are the high street banks we are all familiar with. They
take deposits from individuals, provide saving facilities and pay interest
on these accounts. They also lend money to individuals, in the form of
loans and overdrafts, and charge interest on the money they lend. They
provide a range of other financial services.

Commercial Banking
Commercial banks, or divisions of banks, provide banking services to
businesses, from small companies through to corporate banking
directed at large corporations. They help companies raise finance to
expand their businesses and to maintain their cashflow by lending them
money. They provide a wide range of other financial services.

Investment Banking
Investment banks distribute and underwrite (guarantee the sale of) share
and bond issues; they trade securities on the financial markets and
advise corporations on capital market activities such as mergers and
acquisitions. Investment banks originally developed in the USA and
these banks have now taken over many roles that were previously
carried out by UK merchant banks.
Universal Banks
Although some investment banks exist as separate institutions (in the United States
between 1933 and 1999 investment banking and commercial banking had to be kept
apart by law) in the United Kingdom, most larger commercial/retail banks also have
an investment section in the company. The divisions work separately, as the work and
knowledge required for each division is very different. These very large banks are known
as universal or conglomerate banks.
However, there is now pressure from many governments to keep investment banking
separate from commercial and retail banking. If an investment bank gets it wrong and
buys the wrong commodities, they can lose vast amounts of money and even go bust.
Investment banking, if it goes well, can make huge amounts of money. Unlike retail and
commercial banking, investment banking is a very high risk form of banking.
Another type of banking that was important in the past was merchant banking.
Barings was a merchant bank. Merchant banks performed activities that helped
companies trade internationally. They would issue letters of credit, transfer funds
internationally and co-invest in projects involving trade. In practice, the fine lines that
separate the functions of merchant banks and investment banks have now blurred and
now the terms are sometimes used to mean the same thing.



Promotions refer to the entire set of activities, which communicate the product, brand or service to the user.

Definition: Promotions refer to the entire set of activities, which communicate the product, brand or service
to the user. The idea is to make people aware, attract and induce to buy the product, in preference over
others.

Description: There are several types of promotions. Above the line promotions include advertising, press
releases, consumer promotions (schemes, discounts, contests), while below the line include trade
discounts, freebies, incentive trips, awards and so on. Sales promotion is a part of the overall promotion
effort.

There are also:
1. Personal selling: one of the most effective ways of customer relationship. Such selling works best when
a good working relationship has been built up over a period of time.
This can also be expensive and time consuming, but is best for high value or premium products.

2. Sales promotions: this includes freebies, contests, discounts, free services, passes, tickets and so on, as
distinct from advertising, publicity and public relations.

3. Public relations: PR is the deliberate, planned and sustained effort to establish and maintain mutual
understanding between the company and the public.



Introduction to marketing
Marketing
Several definitions hav been proposed for the term marketing. Each tends to emphasize
different issues. Memorizing a definition is unlikely to be useful; ultimately, it makes more sense to
thinking of ways to benefit from creating customer value in the most effective way, subject to
ethicals and other constaints that one may have. The 2006 and 2007 definitions offered by the
American marketing association are relatively similar, with the 2007 appearing a bit more concise.
Note that the definitions make several points:
A main objective of marketing is to create customer value.
Marketing usually involves an exchange between buyers and sellers or between other
parties.
Marketing has an impact on the firm, its suppliers, its customers, and others affected by the
firms choices.
Marketing frequently involves enduring relationships between buyers, sellers, and other
parties.
Processes involved include creating ,communicating, delivering, and exchanging offerings.
The marketing mix is probably the most famous marketing term. Its elements are the basic,
tactical components of a marketing plan. Also known as the four ps the marketing mix elements
are price, place, product, and promotion.
The concept is simple. Think about another common mix a cake mix. All cakes contain eggs,
milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix
elements contained in it. So or a sweet cake add more sugar

it is the same with the marketing mix. The offer you make to you customer can be altered by
varying the mix elements. So for a high profile brand, increase the focus on promotion and
desensitize the weight given to price. Another way to think about the marketing mix is to use the
image of an artists palette. The marketer mixes the prime colors mix elements in different
quantities to deliver a particular final color. Every hand painted picture is original in some way,
as is every marketing mix. If you like to see the marketing mix applied to a real business the take
a look at our Ryan air marketing mix
some commentators will increase the marketing mix to the Five Ps to include people.
Others will increase the mix to seven Ps to include Physical evidence such as uniforms, facilities,
or livery and process i.e, the whole customer experience e.g. a visit the Disney world. The term
was coined by Neil H. Borden in his article the concept of the marketing mix in 1965.
Price
There are many ways to price a product. Lets have a look at some of them and try to
understand the best policy/strategy in various situations.
Place
Another element of Neil H. Bordens marketing mix is place. Place is also known as channel,
distribution, intermediary. It is the mechanism through which goods and or services are moved
from the manufacturer/ service provider to the user or consumer.
Product
For many a product is simply the tangible, physical entity that they may be buying or selling.
You buy a new car and that the product simple or maybe not. when you buy a car is the product
more complex than you first thought.
The product life cycle is based upon the biological life cycle. For example, a seed is planted
introduction it begins to sprout growth it shoots out leaves and puts down roots as it becomes
an adult maturity after a long period as an adult the plant begins to shrink and die out decline.
Promotion
Another one of the 4Ps is promotion. This includes all of the tools available to the marketer
for marketing communication. As with Neil H. Bordens marketing mix, marketing
communications has its own promotions mix think of it like a cake mix, the basic ingredients are
always the same however if you vary the amounts of one of the ingredients, the final outcome is
different
Physical evidence is the material part of a service. Strictly speaking there are no physical
attributes to a service, so a consumer tends to rely on material cues. There are many examples
of physical evidence, including some of the following
People are the most important element of any service or experience services tend to be
produced and consumed at the same moment, and aspects of the customer of experience are
altered to meet the individual needs of the person consuming it.
Process
Process is another element of the extended marketing mix or 7Ps. There are a number of
perceptions of the concept of process within the business and marketing literature. Some see
processes as a means to achieve and outcome for example to achieve a 30% market share a
company implements a marketing planning process.
MARKETING MIX:
It is a process which includes 4 Ps in order to meet the standards of the people in the
present market to understand the present market scenario through various researchs or
surveys to meet the wants and needs of the customers.
Where here the 7 Ps indicates:
PRICE
PROMOTION
PLACE
PRODUCT
PEOPLE
PROCESS
PHYSICAL EVIDANCE