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Discuss the importance of strategic planning in the development of Bangladesh Banking

Services (June’13).
Importance of strategic planning in the development of Bangladesh Banking Services: Strategic
planning is the most important key for solving strategic tasks; it is the process of developing,
controlling and maintaining a strategic balance between organizational goals and resources in the
market environment. A strategic plan is a set of activities that are geared towards an organizations
growth and success. Strategic management refers to the art of business planning at the highest
possible level implemented by the company's leader or leaders and is focused on building a solid
underlying foundation for a company.

Simply put, a strategic plan is the formalized road map that describes how your company executes
the chosen strategy. A plan spells out where an organization is going over the next year or more and
how it’s going to get there. Typically, the plan is organization-wide or focused on a major function,
such as a division or a department.

A strategic plan is a management tool that serves the purpose of helping an organization do a better
job, because a plan focuses the energy, resources, and time of everyone in the organization in the
same direction.

If you’re thinking, “Hey, I’ve got this great book on business plans, so I’ll just use that to form my
strategic plan,” be aware that strategic plans and business plans aren’t the same concepts.

A strategic plan is a management tool that C-level managers need to master and is for established
businesses and business owners who are serious about growth. It also does the following:

1. Helps build your competitive advantage

2. Communicates your strategy to staff
3. Prioritizes your financial needs
4. Provides focus and direction to move from plan to action

A business plan, on the other hand, is a planning tool for new businesses, projects, or entrepreneurs
who are serious about starting a business. A business plan

1. Helps define the purpose of your business

2. Helps plan human resources and operational needs
3. Is critical if you’re seeking funding
4. Assesses business opportunities
5. Provides structure to ideas

Key components of strategic planning:

Vision: Outlines what the organization wants to be, or how it wants the world in which it operates to
be (an "idealized" view of the world). It is a long-term view and concentrates on the future. It can be
emotive and is a source of inspiration.

For example, a charity working with the poor might have a vision statement which reads "A World
without Poverty."
Mission: Defines the fundamental purpose of an organization or an enterprise, succinctly describing
why it exists and what it does to achieve its vision.

For example, the charity above might have a mission statement as "providing jobs for the homeless
and unemployed".

Values: Beliefs that are shared among the stakeholders of an organization. Values drive an
organization's culture and priorities and provide a framework in which decisions are made. For
example, "Knowledge and skills are the keys to success" or "give man bread and feed him for a day,
but teach him to farm and feed him for life". These example maxims may set the priorities of self-
sufficiency over shelter.

Strategy: Strategy, narrowly defined, means "the art of the general" -a combination of the ends
(goals) for which the firm is striving and the means (policies) by which it is seeking to get there. A
strategy is sometimes called a roadmap - which is the path chosen to plow towards the end vision. The
most important part of implementing the strategy is ensuring the company is going in the right
direction - defined as towards the end vision.

So, we can say that strategic planning in the development of need for any organization not only
Bangladesh Banking Services.
Q. What is Mobile Banking and Internet Banking (June’13)?
Mobile Banking: Mobile banking is a system that allows customers of a financial institution
to conduct a number of financial transactions through a mobile device such as a mobile phone
or personal digital assistant.

Mobile banking differs to mobile payment's which involves the use of a mobile device to pay
for goods or services either at the point of sale or remotely, analogously to the use of a debit
or credit card to effect an EFTPOS payment.
The earliest mobile banking services were offered over SMS, a service known as SMS
banking. With the introduction of smart phones with WAP support enabling the use of the
mobile web in 1999, the first European banks started to offer mobile banking on this platform
to their customers. Mobile banking has until recently (2010) most often been performed via
SMS or the mobile web.
Internet banking: Online banking (or Internet banking or E-banking) allows customers of a
financial institution to conduct financial transactions on a secured website operated by the
institution, which can be a retail bank, virtual bank, credit union or building society.
To access a financial institution's online banking facility, a customer having personal Internet
access must register with the institution for the service, and set up some password (under
various names) for customer verification. The password for online banking is normally not
the same as for [telephone banking]. Financial institutions now routinely allocate customers
numbers (also under various names), whether or not customers intend to access their online
banking facility. Customer’s numbers are normally not the same as account numbers, because
number of accounts can be linked to the one customer number. The customer will link to the
customer number any of those accounts which the customer controls, which may be cheque,
savings, loan, credit card and other accounts. Customer numbers will also not be the same as
any debit or credit card issued by the financial institution to the customer.
To access online banking, the customer would go to the financial institution's website, and
enter the online banking facility using the customer number and password. Some financial
institutions have set up additional security steps for access, but there is no consistency to the
approach adopted.
The common features fall broadly into several categories
A bank customer can perform non-transactional tasks through online banking, including -

 Viewing account balances

 Viewing recent transactions
 Downloading bank statements, for example in PDF format
 Viewing images of paid cheques
 Ordering cheque books
 Download periodic account statements
 Downloading applications for M-banking, E-banking etc.

Bank customers can transact banking tasks through online banking, including -
 Funds transfers between the customer's linked accounts
 Paying third parties, including bill payments (see, e.g., BPAY) and telegraphic/wire
 Investment purchase or sale
 Loan applications and transactions, such as repayments of enrollments
 Register utility billers and make bill payments
Q. What is Millionaire Deposit Scheme (June’13)?
Millionaire Deposit Scheme: Millionaire Deposit Scheme (MDS) Account is a time specified
monthly deposit scheme for clients where the deposited money will become one million on maturity.

Features and Benefits:

1. Tenor: 4, 5, 6, 7, 8, 9 and 10 year’s term;

2. Deposit on monthly installment basis;
3. Attractive rate of interest;
4. Account can be opened at any working day of the month;
5. Monthly installment can be deposited through a standing debit instruction from the designated
CD/SB Account;
6. Monthly installment can be deposited in advance;
7. An account can be transferred from one branch to another branch of the bank;
8. Credit facility for maximum of 2 years can be availed at any time during the period of the scheme;
9. Allowed to open more than one MDS Account for different amount at any branch of the Bank;

But these features and benefits can be varied bank to bank.

Q. What is musharaka product (June’13)?
Musharaka product: Musharaka is a contract of partnership between two or more parties in which
all the partners contribute capital, participate in the management, share the profit in proportion to their
capital or as per pre-agreed ration and bear the loss, if any, in proportion to their capital/equity ratio.

In the Islamic Banking context, the Islamic Bank may be a partner with its client for running a
business where both of them contribute capital, either both of them or the client alone take part in the
management of business as per terms of the contract and share the profit as per agreed ration or bear
the loss, if incurred, as per their capital/equity ratio.
Q. What is Customer Loyalty (June’13)?

Customer Loyalty: Customer loyalty is all about attracting the right customer, getting them to buy,
buy often, buy in higher quantities and bring you even more customers. However, that focus is not
how you build customer loyalty.

You build loyalty by-

1. Keeping touch with customers using email marketing, thank you cards and more.
2. Treating your team well so they treat your customers well.
3. Showing that you care and remembering what they like and don’t like.
4. You build it by rewarding them for choosing you over your competitors.

5. You build it by truly giving a damn about them and figuring out how to make them more success,
happy and joyful.

Figure: Customer Loyalty Cycle

In short, you build customer loyalty by treating people how they want to be treated. Does your
marketing plan include strategies and tactics for customer loyalty & customer retention?
Q. What is window dressing (June’13)?
Window dressing: Window dressing is a term that describes the act of making a company's
performance, particularly its financial statements, look attractive.

A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the
appearance of the portfolio/fund performance before presenting it to clients or shareholders. To
window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near
the end of the quarter. These securities are then reported as part of the fund's holdings.

How It Works/Example: Let's assume Company XYZ wants to look attractive to potential acquirers.
It might do some window dressing by announcing much higher sales projections, obtaining and
holding a lot of cash, or making other announcements that are likely to raise the stock price, even if
only for a short time. The objective is to make a favorable impression on potential acquirers.

Companies are not the only ones to engage in window dressing. Mutual funds do it as well, often by
cutting their losses and buying high-fliers (sometimes that are not even in the fund's investment
sector) near the end of a reporting period.
Q. What is the Marketing Communications Mix (Nov’11)?
The Marketing Communications Mix: The Marketing Communications Mix is the specific mix of
advertising, personal selling, sales promotion, public relations, and direct marketing a company uses
to pursue its advertising and marketing objectives.

Figure: Marketing Communication Mix

Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services
by an identified sponsor.

Personal selling: Personal presentation by the firm’s sales force for the purpose of making sales and
building customer relationships.

Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.

Public relations: Building good relationships with the company’s various publics by obtaining
favorable publicity, building up a good "corporate image", and handling or heading off unfavorable
rumors, stories, and events.

Direct marketing: Direct communications with carefully targeted individual consumers to obtain an
immediate response and cultivate lasting customer relationships.
Q. What do you mean by Consumerism (Nov’11)?
Consumerism: Consumerism is a social and economic order that encourages the purchase of goods
and services in ever-greater amounts. Early criticisms of consumerism are present in the works of
Thorstein Veblen (1899). Veblen's subject of examination, the newly emergent middle class arising at
the turn of the twentieth century, comes to fruition by the end of the twentieth century through the
process of globalization. In this sense, consumerism is usually considered a part of media culture.

The term "consumerism" has also been used to refer to something quite different called the
consumerists movement, consumer protection or consumer activism, which seeks to protect and
inform consumers by requiring such practices as honest packaging and advertising, product
guarantees, and improved safety standards. In this sense it is a movement or a set of policies aimed at
regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in
the interests of the buyer.

For example, an industrial society that is advanced; a large amount of goods is bought and sold.
Sometimes referred to as a policy that promotes greed, consumerism is also coined as a movement
towards consumer protection that promotes improvement in safety standards and truthful packaging
and advertisement. Consumerism seeks to enforce laws against unfair practices implement product
Q. What do you mean by competitive strategies (Nov’11)?

Competitive strategies: Competitive strategies are the method by which you achieve a competitive
advantage in the market. There are typically three types of competitive strategies that can be
implemented. They are cost leadership, differentiation and a focus strategy. A mixture of two or more
of these strategies is also possible depending on your business' objectives and current market position.

Cost leadership: The aim of this strategy is to be a low-cost producer relative to your competitors
and is particularly useful in markets where price is a deciding factor. Cost leadership is often achieved
by carefully selecting suppliers and production techniques to minimize production, distribution and
marketing costs. However you need to be aware of any serious loss in quality that may render low
cost ineffective.

Differentiation: A differentiation strategy seeks to develop a competitive advantage through

supplying and marketing a product that is in some way different to what the competition is doing. If
developed successfully this strategy can potentially reduce price sensitivity and improve brand loyalty
from customers.

Focus strategy: This strategy recognizes that marketing to a homogenous customer group may not be
that effective a strategy for the product the business is selling. Instead the business focuses its
marketing efforts on a different selected market segments. That is, identify the needs, wants and
interests of the particular market segments and customize marketing techniques to reflect those
Q. What do you mean by product line (Nov’11)?

Product line: A group of related products manufactured by a single company. In marketing jargon,
product lining is offering several related products for sale individually. Unlike product bundling,
where several products are combined into one group, which is then offered for sale as a unit, product
lining involves offering the products for sale separately. A line can comprise related products of
various sizes, types, colors, qualities, or prices.

For example, a cosmetic company's makeup product line might include foundation, concealer,
powder, blush, eyeliner, eye shadow, mascara and lipstick products that are all closely related. The
same company might also offer more than one product line.
Q. Define service differentiation with features (Nov’11).

Service differentiation: The concept of being different is very much essential in today’s world of
cut-throat competition. The difference of one product from its competitor is the revenue that it earns.
Products have to be different in order to survive the competition. It is not just the domestic
competition but also the competition from and in abroad, as one country produces and sells in another
country while some other countries produce and sell in our country. The targeted customers have
many options. Choosing among options is always based on differences, implicit and explicit. So, one
must differentiate in order to attract the customer and make him/her buy the product.

Creating differentiation in one’s own product and services is a better way to avoid competition. One
can offer a number of possible options in products to the customers. Every type of customer can
choose a product which he/she likes. In this way, low-end, mid-end or high-end customers, all of them
will have a product choose from. Common differentiations include, speed, performance, quality,
responsiveness, availability, ease or integration.

All the above mentioned points are for a tangible product. But, how can we differentiate services. It is
easy when the differentiation of variables is tangible as in the case of product but, difficult in case of
services. If the product has not many tangible features, then adding value-added services to the
product is one of the methods. This process is called service differentiation.

The main features of service differentiation:

Ease in ordering: Corporations like Dell, Baxter Healthcare and web-based services like peapod and
net grocer have eased the process of placing an order. One does not have to step out of the house to
buy the product.

Delivery: it is related to how well a product or a service is delivered to the customer with speed and
accuracy. The best examples are again Dell, which delivers its products right at the doorstep of the

Installation: it refers to the work undertaken to make the product operational at the prescribed
location. Buyers of heavy equipment expect good installation service. Differentiation by installation is
particularly important for companies that offer complex products such as computers and machinery.

Customer training: It refers to how the seller provides training to the buyer about the product and
how to use it. General Electric supplies and installs expensive X-rays equipment in hospitals but also
gives extensive training to the staff of hospitals about using the machines.

Customer consulting: It refers to the data, information systems and advising services that the seller
offers to buyers. For example, the Rite aid drugstore chain’s communication program, called the
Vitamin Institute provides customers with research so they can make more educated judgments and
feel comfortable asking for help. On the web, Rite Aid has teamed up with drugstore.com to offer
even more comprehensive health related information.

Maintenance and Repair: It refers to the post-sale services which generally include maintenance and
repair services. Automobile manufacturers are often seen providing free services initially for the
Q. What do you mean by strategic business unit (Nov’11)?

Strategic business unit (SBU): In business, a strategic business unit is a profit center which focuses
on product offering and market segment. strategic business units typically have a discrete marketing
plan, analysis of competition, and marketing campaign, even though they may be part of a larger
business entity.

An strategic business units may be a business unit within a larger corporation, or it may be a business
unto itself or a branch. Corporations may be composed of multiple strategic business units, each of
which is responsible for its own profitability. General Electric is an example of a company with this
sort of business organization. Strategic business units are able to affect most factors which influence
their performance. Managed as separate businesses, they are responsible to a parent corporation.

An example of a strategic business unit is General Electric. Product offering typically encompasses a
strategic business unit.
A product is like a human being. It is born, grows up fast, matures and then finally passes
away. The product life cycle discusses the stages which a product has to go through since the
day of its birth to the day it is taken away from the market.
However, the basic difference in case of human beings and products is that a product has to
be killed by someone. Either the company (to bring better products) or by competition (too
much external competition). There are several products in the market which have lived on
since ages (Light Bulbs, Tube lights), whereas there are others which were immediately taken
off the shelf (HD DVD).
Thus the Product life cycle deals with four stages of a products life.

Stage 1 of Product life cycle – Introduction of the product

The stage 1 is where the product is launched. A product launch is always risky. You never
know how the market will receive the product. There have been numerous failures in the past
to make marketers nervous during the launch of the product. The length of the introduction
stage varies according to the product.
If the product is technological and receives acceptance in the market, it may come out of the
introductory phase as soon as it is launched. Whereas if the product is of a different category
altogether and needs market awareness, it may take time to launch.

Characteristics of Introductory stages of Product life cycle

1. Higher investment, lesser profits
2. Minimal Competition
3. Company tries to Induce acceptance and gain initial distribution
4. Company needs Promotions targeted towards customers to increase awareness and demand
for product
5. Company needs Promotions targeted towards channel to increase confidence in the product
Stage 2 of Product Life Cycle – Growth of the product
Once the introductory phases are over, the product starts showing better returns on
investment. Your customers and channels begin responding. There is better demand in the
market and slowly the product starts showing profits.
This is a stage where competition may step in to squash the product before it has completely
launched. Any marketing mistakes done at this stage affect the product considerably as the
product is being exposed to the market and bad news travels fast. Thus special care has to be
taken in this stage to ensure competition or bad decisions do not affect the growth stage of the
Characteristics of Growth stage of Product life cycle
1. Product is successfully launched
2. Demand increases
3. Distribution increases
4. Competition intensifies
5. Company might introduce secondary products or support services.
6. Better revenue generation and ROI
Stage 3 of Product Life Cycle – Maturity stage of the product
One of the problems associated with maturity stages in a technologically advanced
environment is the problem of duplication. Not only is the product available in duplicate
markets, but also there are several competing products which arise with the same features and
capabilities. As a result, the USP’s of the product become less attractive.
Along with competition, Penetration pricing becomes a weapon for competitors. Competitors
sell products with the same features at lesser prices thereby trying to penetrate in the market.
Nonetheless, the sales of a product (especially sales from return customers) are at its peak
point during the maturity stages. The growth of sales may be lesser, but the sales revenue of
the organization is maximize during the maturity stage of product life cycle.
Characteristics of Maturity stages of Product life cycle
1. Competition is high
2. Product is established and promotion expenditures are less
3. Little growth potential for the product
4. Penetration pricing, and lower profit margins
5. The major focus is towards extending the life cycle and maintaining market share
6. Converting customers product to your own is a major challenge in maturity stage

Stage 4 of Product Life Cycle – Stage of decline

1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use
– A typical scenario which a product might face in its last stage. In this stage the expenditures
begin to equal the profits or worse, expenses are more than profits.
Thus it becomes a typical scenario for the product to exit the market. It also becomes
advantageous for the company as the company can use resources it was spending on the
declining product on an altogether different project.
Characteristics of Decline stages of Product life cycle
1. Market is saturated
2. Sales and profits decline
3. Company becomes cost conscious
4. A lot of resources are blocked in rejuvenating the dead product.
5. There are only three options left with the company
o Re positioning or Rebranding of the product to extend product life cycle
o Maintain the product as it is and reduce costs to get maximum profits till the product can
produce profits
o Take the product off the market.

How does business environment affect the marketing strategy?

Every organization has to work within a framework of certain environmental forces and there
is a continuous interaction between the organization and its environment. The interaction
suggests a relationship between the two. This relationship can be analyzed in three ways.
First, the organization can be thought of as an input-output system. It takes various inputs-
human, capitals, technical-from the environment. These inputs are transformed to produce
outputs-goods, services, profits-which are given back to the environment. Thus, the
organization merely performs the function of input-output mediator. In this process, the
environment in its interaction with the internal factors of the organization will determine
what kind of inputs should be taken or outputs given.
Second, the organization can be taken as the central focus for realizing the contributions of
many groups, both within and outside the organization. When these groups contribute to the
well being of the organization, they must have a legitimate share in organizational outputs.
These groups may be employees, consumers, suppliers, shareholders, movement, and the
society in general. Thus, the organizational functioning will be affected by the expectations
of these groups and the organization has to take these factors into account.
Third, the organization can be treated as operating in environment presenting opportunities
and threats to it. Thus, how an organization can make the best use of the oppm.lunities
provided or threats imposed is a matter of prime concern for it. Any single approach by itself
is insufficient to explain the complex relationship between the organization and its environ-
ment-Moreover, these approaches are not inconsistent to each other; they are complementary.
Thus, an organization will be affected by the environment in which it works.

The environment-organization interaction has a number of implications from strategic

management point of view.
1. The environmental forces may affect different parts of the organization in different ways
because different parts interact with their relevant external environment. For example, the
technological environment may affect the organization’s R & D department. Further, these
forces of the environment may have direct effect on some parts but indirect effect on others.
For example, any change in the fiscal policy of government may affect the finance
department directly but it may affect production and marketing indirectly because their
program may be re casted in the light of new situation, though not necessarily.
2. The environmental influence process is quite complex because most things influence all
other things. For example, many of the environmental forces may be interacting among
themselves and making the impact on the organization quite complex. Moreover, the impact
of these forces on the organization may not be quite deterministic because of interaction of
several forces. For example, the organization structure will be determined on the basis of
management philosophy and employee attitudes. But the organization structure becomes the
source for determining the employee attitudes. Thus, there cannot be direct and simple cause-
effect relationship rather much complexity is expected.
3. The organizational response to the environmental forces may not be quite obvious and
identical for different organizations but these are subject to different internal forces. Thus,
there is not only the different perception of the environmental forces but also their impact on
the organisation. Key factors determining responses to environmental impact may be
managerial philosophy, life cycle of the organization, profitability, etc.
4. The impact of environmental forces on the organizations is not unilateral but the
organizations may also affect the environment. However, since the individual organizations
may not be able to put pressure on the environment, they often put the pressure collectively.
Various associations of the organizations are generally formed to protect the interest of their
members. The protection of interest certainly signifies the way to overcome unilateral impact
of the environment on the organizations. The nature of organisation-environment interaction
is such that organizations, like human species or animals, must either adjust to the
environment or perish.

What factors should be considered to determine the advertising media? Discuss.

Discuss elaborately the social and economical importance of advertising.

Do you believe in advertising? Put your arguments.

Advertising is any paid form of non-personal presentation and promotion of goods, services
or ideas by an identified sponsor. Advantages of advertising:
1. The attraction of a large and geographically-dispersed market.
2. A pass along rate for print media that supplements circulation.
3. Low costs per viewer or listener.
4. The large number of media available.
5. Sponsor control over message content, graphics, timing, and the audience targeted.
6. A uniform message delivered to all members of the audience.
7. Editorial content that often surrounds an advertisement.
8. The easing of the way for personal selling and self-service retailing.
Disadvantages of advertising:
1. Advertising messages are inflexible and not responsive to consumer questions.
2. It is difficult to satisfy diverse audience needs.
3. A large portion of viewers or readers may be wasted.
4. Some types of advertising require high total expenditures.
5. Messages are usually brief, with limited information.
6. Feedback is hard to obtain.
7. Low attention is given to advertising by some people, who may even “zap” commercials
on television.
What are the different ways that banks can follow to distribute their products directly?
Direct marketing consists of direct communications with carefully targeted individual
consumers to obtain an immediate response. Interactivity is essential to this process.
Major forms of direct marketing are summarized below:
• Face-to-Face Selling
• Telemarketing
• Direct-Mail Marketing
• Catalog Marketing
• Online Marketing and Electronic Commerce

i. Face-to-Face Selling
The original and oldest form of direct marketing is the sales. Today, many companies’ still
use salespersons or representatives to reach their prospects, develop them into customers,
build lasting relationships, and grow the business.
ii. Telemarketing
In telemarketing telephone is used to sell directly to consumers. Two general types of
telemarketing include: 1). Outbound telephone marketing to sell directly to consumers.2).
Inbound toll-free 800 numbers to receive orders from television and radio ads, direct mail, or
catalogs. 900 numbers are used to sell consumers’ information, entertainment, or the
opportunity to voice an opinion on a pay-per-call basis. Many customers appreciate the offers
they receive by telephone, however, because of the recent explosion in unsolicited telephone
marketing, lawmakers are responding with efforts to control unsolicited telemarketing during
certain hours of the day. Most telemarketers support some form of legislation.
iii. Direct-Mail Marketing
Direct mail marketing involves sending an offer, announcement, reminder, or other item to a
person at a particular address. Direct mail is well suited to direct, one-to-one communication.
Advantages include:
1). High target-market selection
2). Personalized.
3). Flexible.
4). Allows easy measurement of results.
Even though the cost per thousand can be high, the people who reached through direct
marketing are better prospects than those who reached with other media.
New forms of direct mail include:
1). Fax mail.
2). E-mail.
3). Voice mail.
iv. Catalog Marketing
Catalog marketing involves selling through catalogs mailed to a selected list of customers or
made available in stores. A catalog is a printed, bound piece of at least eight pages, selling
multiple products, and offering a direct ordering mechanism. Some stores offer a complete
line of goods through their catalogs. Most direct retailers have put their catalogs on the World
Wide Web. Web catalogs are passive and must be marketed themselves.
v. Online Marketing and Electronic Commerce
Online marketing is conducted through interactive online computer systems, which link
consumers with sellers electronically. There are two types of online channels:
1) Commercial online services offer information and marketing services to subscribers who
pay a monthly fee. The best known is America Online.
2) The commercial online services are now being overtaken by the Internet as the primary
online marketing channel. The Internet is a vast and burgeoning global web of computer
networks. The World Wide Web is a popular meeting place for consumer and business

What are some of the conflicts the bankers face while treating external customers effectively
and efficiently?
For folks like, who deal face-to-face with customers, conflict is a daily reality. In the banking
environment customers' needs and values will often come into conflict with bank.
The ability to resolve conflict successfully is one of the most important social-business skills.
In fact, one of the most important roles one can play in his/her job is that of conflict manager.
Let's take a look at three strategies that will help to manage a variety of conflict situation
while treating external customers effectively and efficiently. We'll call them avoidance,
diffusion, and confrontations.

Discuss the role of commercial banks to make the mobile banking services popular in the
country. What sorts of risks may be involved with these services? Discuss.
Mobile Banking is a process of no branch banking which provides financial services to
unbanked communities in both urban and rural area at affordable cost. The aim of the service
is not to destroy branch banking but to bring those people under the umbrella of banking
service that are away from banking facilities. Government thinks it has a great prospect as it
is a new technology in digital Bangladesh. Through M-banking one can avail various services
i.e.; utility bill payment, Fund Transfer, Shopping, Cash Withdrawn from selected ATM or
Cash point and many more exciting facilities. But in Bangladesh many people think
traditionally, because they cannot think it has any facility to use of mobile banking. Trust
Bank, Dutch Bangla Bank, Brac Bank/Bkash, Mercantile Bank, Bank Asia.

The roles of commercial banks:

Interest in Mobile Banking: Mobile banking is a new technology in Bangladesh, started from
31st March 2011. Dutch Bangla Bank Limited pioneered in mobile banking services in
Bangladesh. Most people informed about it but 52% of them are not eager to use it as they
are happy in using traditional e-banking system.

Save Money: Mobile banking is allowed to access banking facilities at affordable cost. A
positive aspect of
mobile phone is that mobile networks can reach remote areas at lowest cost. Around
26%respondents say its cost is higher, 20% say same and 54% say it is more affordable than
traditional banking.
Easy Transaction: Mobile banking is much easier transaction for rural people comparatively
traditional banking transactions.

Save Time: By the grace of mobile banking one can save their valuable time.

Trust worthy: One can trust mobile banking as traditional banking system. It has secured PIN
(Personal Identification Number) code which is known by the user, and also has a check
digit. But in Bangladesh traditional branch based banking remains the most widely adopted
method of conducting banking transaction.

Convenience: Mobile banking using system is very easy to use. Thus mobile banking system
develops to bring poor people into banking system. Most of the people respondents face or
heard no problem to use mobile banking.

Infrastructure support: Commercial banks provide adequate infrastructure support to

customer for mobile banking services.

Security: Banks provide high voltage security to its customer in the case of mobile banking.

Utility Bill Payment: One can pay utility bills without suffering hazards.

Cash Withdraw: One can withdraw cash from selected ATM or cash points to avoid long

Fund Transfer: One can easily transfer funds without any lengthy procedures.

The risk involved with the mobile banking:

• Poor infrastructure support
• Security violence
• Regulatory constraints
• Naïve User
• Account Hacking
• Number of Banks absent
• Unable to generate high volume

Describe the four steps that lead management and the firm through the strategic planning
Strategic planning Process is defined as the process of developing and maintaining a strategic
fit between the organization’s goals and capabilities and its changing marketing
There are four steps to the strategic planning process:
1. Defining the Company’s Business and Mission
2. Setting Company Objectives and Goals
3. Designing the Business Portfolio
4. Planning and coordinating marketing and other functional strategies.

The importance of strategic planning in the development of banking products

Effective management-development in this area must include four fundamental steps:
• A genuine understanding of the compelling need for strategic planning in the banking
industry and the importance of communicating that need to everyone in the organization to
get “buy-in” to the strategic planning effort. This commitment has been proven essential and
without it the process will fail;
• In-depth knowledge of how the entire strategic planning process should work if it is to be of
any value;
• Insight into the need to obtain commitment to the resulting plan to build a commonality of
purpose among all constituent groups who have the ability to impact the success of the plan.
• An understanding that the strategic plan must be positioned as the cornerstone of the culture
of the organization if it is to be successful.
Functions of marketing research
The following image depicts five basic functions of marketing research:

The five main functions of marketing research (MR) are:

1. Description,
2. Evaluation,
3. Explanation,
4. Prediction, and
5. Aid in decision banking
Now let's discuss these prominent functions of marketing research.
1. Description: Marketing research gives full description about the consumers. It describes
their age, sex, education, income, etc. It also gives a description about the competitors and the
market situation. This description is used to take marketing decisions and solve marketing
2. Evaluation: Marketing research helps to evaluate the company's performance. It helps to
evaluate the company's production and marketing policies. It finds out the customer reaction
to the quality of the product, price, packaging, advertising, sales, promotions' techniques, etc.
If the consumer reactions are bad, then the company must change its policies. It also
compares the company's policies with the competitors' policies.
3. Explanation: Marketing research gives explanations (answers) for all the marketing
problems. For example, it answers in detail, why are the sales falling, why are the retailers
giving negative reaction, etc. It gives all the causes or reasons for the problem. It also tells
how to solve the problem.
4. Prediction: Marketing research also gives predictions. Predictions mean to forecast or
guess about the future. It gives a prediction about the future sales, future market
opportunities, future risks, future marketing environment, future consumer behavior, etc. All
the prediction may not be correct. However, these predictions help the company to make
future plans and policies. It helps to take advantage of future opportunities. It also helps to
avoid future risks.
5. Aid in decision making: Marketing research helps the marketing manager to take
decisions. It provides all the concerned data, which is necessary to take decisions. Decision
making means to select a course of action from two or more alternatives. Decision making
requires up-to-date and correct data. MR helps the marketing manager to take decisions. It
provides all the data, which is necessary to take decisions. It also provides alternative course
of action. It gives the merits and demerits of each course of action. It also helps the marketing
manager to choose the best course of action. It helps the marketing manager in all aspects of
distribution, selection of sales promotion techniques, selection of media for advertising, etc.
So, MR helps to take quick and correct marketing decisions. It also helps to implement the
marketing decisions.
Five major areas in banking where marketing research techniques have been successfully
• Customer analysis -The analysis procedure compels banks to be aware of the full range of
services purchased by each customer and to generate meaningful cost estimates for providing
each service. The applicability of customer profitability analysis has been questioned in
recent years with the move toward unbundling services.
• Competitor analysis - Competitor analysis in marketing and strategic management is an
assessment of the strengths and weaknesses of current and potential competitors. This
analysis provides both an offensive and defensive strategic context to identify opportunities
and threats. Profiling coalesces all of the relevant sources of competitor analysis into one
framework in the support of efficient and effective strategy formulation, implementation,
monitoring and adjustment.
• Risk analysis - Competitor analysis in marketing and strategic management is an assessment
of the strengths and weaknesses of current and potential competitors. This analysis provides
both an offensive and defensive strategic context to identify opportunities and threats.
Profiling coalesces all of the relevant sources of competitor analysis into one framework in
the support of efficient and effective strategy formulation, implementation, monitoring and
• Product research - Product research lets you understand what customers really want,
allowing you to tailor your product offering to meet their needs and giving you a real
competitive edge. New product research helps you refine product designs and plans before
committing yourself to expensive product development costs. Whilst continuing product
testing and research can drive innovation, keeping you one step ahead of the competition.
• Choice modeling - attempts to model the decision process of an individual or segment in a
particular context. Choice modeling may be used to estimate non-market environmental
benefits and costs.

'A bank must be customer centered to succeed' - Discuss.

What techniques are to be followed to develop banker customer relationships? How does
each aid in developing relationships?
What are the differences between desired and adequate bank service? How do they influence
bank customer expectations?
'In banking industry it requires 12 good memories to wipe out 1 bad customer memory' -
defend this statement with logic.
Discuss the major elements of marketing especially for financial institutions.
Do you think that investment in technology and innovation should be made in proper time for
a financial institution?
Differentiate between Retail and Corporate Market.
Explain with example the features relating to bank product that are making the services more
Why location of a bank is very important from different perspective?
Describe the role of promotion and publicity in marketing bank services.


Job description is a list that a person might use for general tasks, or functions, and
responsibilities of a position. It may often include to whom the position reports,
specifications such as the qualifications or skills needed by the person in the job, or a salary
Job descriptions are usually narrative, but some may instead comprise a simple list of
competencies; for instance, strategic human resource planning methodologies may be used to
develop a competency architecture for an organization, from which job descriptions are built
as a shortlist of competencies.
A job description is usually developed by conducting a job analysis, which includes
examining the tasks and sequences of tasks necessary to perform the job. The analysis
considers the areas of knowledge and skills needed for the job. A job usually includes several
roles. The job description might be broadened to form a person specification.
A job description sets out the purpose of a job, where the job fits into the organization
structure, the main accountabilities and responsibilities of the job and the key tasks to be
A job description has four main uses:
1) Organization - it defines where the job is positioned in the organization structure.
2) Recruitment - it provides essential information to potential recruits (and the recruiting
team) so that they can determine the right kind of person to do the job (see person
3) Legal - the job description forms an important part of the legally-binding contract of
4) Appraisal of performance - individual objectives can be set based on the job description
Short Note: Management by Exception
Management by exception is the practice of examining the financial and operational results of
a business, and only bringing issues to the attention of management if results represent
substantial differences from the budgeted or expected amount.
For example, a company controller may be required to notify management of those expenses
that are the greater of $10,000 or 20% higher than expected.
The purpose of the management by exception concept is to only bother management with the
most important variances from the planned direction or results of the business. Managers will
presumably spend more time attending to and correcting these larger variances.
The concept can be fine-tuned, so that smaller variances are brought to the attention of lower-
level managers, while a massive variance is reported straight to senior management.
Advantages of Management by Exception:
# It reduces the amount of financial and operational results that management must review,
which is a more efficient use of their time.
# The report writer linked to the accounting system can be set to automatically print reports at
stated intervals that contain the predetermined exception levels, which is a minimally-
invasive reporting approach.
# This method allows employees to follow their own approaches to achieving the results
mandated in the company's budget. Management will only step in if exception conditions
Disadvantages of Management by Exception:
# This concept is based on the existence of a budget against which actual results are
compared. If the budget was not well formulated, there may be a large number of variances,
many of which are irrelevant, and which will waste the time of anyone investigating them.
# The concept requires the use of financial analysts who prepare variance summaries and
present this information to management. Thus, an extra layer of corporate overhead is
required to make the concept function properly.
# This concept is based on the command-and-control system, where conditions are monitored
and decisions made by a central group of senior managers. You could instead have a
decentralized organizational structure, where local managers could monitor conditions on a
daily basis, and so would not need an exception reporting system.
# The concept assumes that only managers can correct variances. If a business were instead
structured so that front line employees could deal with most variances as soon as they arise,
there would be little need for management by exception.
Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)
Marketing of Financial Services-JAIBB
Market Segmentation

A. Levels of market segmentation.

1. Segment marketing :
2. Niche marketing :
3. Local marketing :
4. Individual marketing :

B. Pattern of market segmentation.

1. Homogeneous preferences :
2. Diffused preference :
3. Clustered preference :

C. Market segmentation procedure.

1. Survey stage :
2. Analysis stage :
3. Profiling stage :

D. Basis for segmenting consumer markets.

1. Geographic segmentation :
2. Demographic segmentation :

(a) Age and life - cycle stage :

(b) Gender :
(c) Income :
(d) Generation :
(e) Social class :

3. Psychological segmentation :
(a) Lifestyle :
(b) Personality :
(c) Values :

4. Behavioural segmentation :
(a) Occasions :
(b) Benefits :
(c) Users status :
(d) Usage rate :
(e) Loyal status :
(i) Hard core loyals :
(ii) Split loyals :
(iii) Shifting loyals :
(iv) Switchers :
(f) Buyer readiness stage :
(g) Attitude :
5. Multi – attribute segmentation ( Geoclustering ) :

6. Targeting multiple segments :

E. Major segmentation variable for business markets.

1. Demographic :
(a) Industry :
(b) Company size :
(c) Location :

2. Operating variables :
(a) Technology :
(b) User or nonuser status :
(c) Customer capabilities :

3. Purchasing approach :
(a) Purchasing - function organization :
(b) Power structure :
(c) Nature of existing relationship :
(d) General purchase policies :
(e) Purchasing criteria :

4. Situational factors :
(a) Urgency :
(b) Specific application :
(c) Size of order :

5. Personal characteristics :
(a) Buyer - seller similarity :
(b) Attitude toward risk :
(c) loyalty :

F. Effective segmentation.
1. Measurable :
2. Substantial :
3. Accessible :
4. Differentiable :
5. Actionable :

G. Selecting the market segments.

1. Single - segment concentration :
2. Selective specialization :
3. Product specialization :
4. Market specialization :
5. Full market coverage :
Marketing Environment
A. Demographic environment.
Marketers are much more interested to monitor the demographic environment, because
population makeup the market.
1. World population growth :
The world population explosion has been a source of major concern, for two reasons. The
first is the fact that certain resources needed to support this much human life ( fuel, foods and
minerals ) are limited and may run out at some point. Unchecked population growth and
consumption would eventually result in insufficient food supply, depletion of key material,
over crowding, pollution and an overall deterioration in the quality of life.
Second cause for concern is that population growth is highest in some countries and
communities that can least afford it. In the developing countries, the death rate has been
falling as a result of modern medicine, but birth rate remained fairly stable. Feeding, clothing
and educating of their children while also providing a rising standard of living is nearly
impossible in these countries.
2. Population age mix :
National populations vary in their age mix. At one extreme is Mexico, a country with a very
young population and rapid population growth. At the other extreme is Japan, a country with
one of the world’s oldest populations. In Mexico milk, diaper, school supplies and toys would
be the important products. But in Japan most of the population consume many more adult
So, the marketers have to create separate products and services for different countries and
have to choose different price, distribution and promotional strategies for them.
3. Ethnic market :
Countries also vary in ethnic and racial makeup. At one extreme is Japan, where almost every
one is Japanese. But on the other extreme is United States, where virtually people came from
all nations. Each group has certain specific wants and buying habits. Several food, clothing
and furniture companies have directed their products and promotions to one or more of these
4. Education groups :
The population in any society falls into five groups, illiterate, high school dropouts, high
school degree, college degree and professional degrees. The marketers have to observe the
size of each groups in a society and according to their size they have to design their
production plan for different products and services.
5. Household patterns :
The traditional household consists of a husband, wife and children. But in some other
societies we observed that their household patterns are nontraditional including single live -
alones, adult live – togethers, single parent families, childless married couple and so on.
Single or separated families needed smaller apartment, inexpensive and smaller appliances,
furniture and small size food packets. So, the marketers have to consider to the household
patterns of the different societies.
6. Geographical shifts in population :
Population movement from one country to another or from rural to urban areas. Location
makes a difference in goods and service preferences. Those who lived in large cities their
most of the purchase are expensive furniture, perfumes, cloths and so on. Suburbanites buy
home workshop equipment, outdoor furniture and outdoor coking equipments etc. So, the
marketers have to consider to the geographic shifts in population.
7. Shift from a mass market to micro - markets :
The effect of all these changes is fragmentation of the mass market into numerous micro -
markets differentiated by age, sex, ethnic background, education, geography, lifestyle and
other characteristics. Each group has strong preferences and marketer has to reached the
customer through increasingly targeted communication and distribution channels. Marketers
are increasingly design their products and services and selected their marketing programs for
specific - micro markets.
B. Economic environment.
Without the purchasing power, consumers are not able to fulfill their needs and wants
properly. The available purchasing power in an economy depends on current income, price,
savings, debt and credit availability. Marketers pay close attention to major trends in income
and consumer spending patterns.
1. Income distribution :
Nations economic condition mostly depend on the level and distribution of income and
industrial structure. There are four types of industrial structures are observed in the national
(a) Subsistence economies :
In a subsistence economy, the vast majority of people engage in simple agriculture, consume
most of their output and barter the rest outputs for simple other goods and services. These
economies offer few opportunities for the marketers.
(b) Raw material exporting economies :
These economies are rich in one or more natural resources but poor in other respects. Much
of their revenue comes from exporting these resources. For example, Zaire and Saudi Arabia
has copper and oil resources and they export them in the international market. These
countries are good markets for extractive equipment, tools and supplies, materials handling
equipments and trucks. Depending on the number of foreign residents and wealth or rich
rulers and landholders, they are also a good market for western - style commodities and
luxury goods.
(c) Industrializing economies :
In an industrializing economy, manufacturing begins initially to account for 10 percent to 20
percent of gross domestic product. Industrializing economies countries are India, Egypt,
Philippines, Malaysia and so on. As manufacturing increases, the country depends more on
imports of raw materials, steels and heavy machinery and less on imports of finished textiles,
paper products and processed foods. Industrialization creates a new rich class and a small but
growing middle class, both demanding new types of goods and services.
(d) Industrial economies :
Industrial economies are major exporters of manufactured goods and investment funds. They
buy manufactured goods and export them to other types of economies in exchange for raw
materials and semifinished goods. The large and variety of manufacturing activities of these
nations and their sizable middle class make them rich markets for all sorts of goods.
2. Saving, debts and credit availability :
Consumers expenditures are affected by consumer saving, debt and credit availability.
Consumers saving habit increase the amount of deposits, which is helpful for banks to reduce
the bank interest rate and increase the loan availability. Access to lower interest rate helps the
companies to expand faster. When credit facilities are available then consumers can purchase
many goods and services, otherwise these are not possible at present. Marketers must pay
careful attention to major changes in income, cost of living, interest rate, savings and
borrowing patterns because they can have a high impact on business, specially for companies
whose products have high income and price sensitive.

C. Natural environment.
1. Shortage of raw materials :
2. Increased energy cost :
3. Increased pollution levels :
4. Changing role of governments :
D. Technological environment.
One of the most dramatic forces makes rapid changes of human life is technology. The
economy’s growth rate is affected by the discoveries of new major innovated technologies.
The marketers are monitoring the new innovation and trend of technology.
1. Accelerating pace of technological change :
Many of today’s common products were not available 40 years ago. People of that time were
did not know personal computers, digital wristwatches, video recorders, mobile phones and
fax machines. The advent of personal computers and fax machines has made it possible for
people to telecommunicate the others that is, work at home instead of traveling to offices that
may be takes 30 minutes or more. Some people hope that this trend of technology will reduce
auto pollution, healthy society, bring the family close together and create more home
centered entertainment and activities. It will also have substantial impact on shopping
behaviour and marketing performance.
2. Unlimited opportunities for innovation :
Scientists are working on a startling range of new technologies that will revolutionize
products and production process. Some of the most exciting work is being done in solid -
state electronics, biotechnology, robotics and material sciences. Researchers are working on
AIDS cures, happiness pills, painkillers and nonfattening foods. They are designing efficient
robots for firefighting, underwater exploration and home nursing. In addition scientists are
also working on fantasy products, such as small flying cars, three - dimensional television
and space colonies. The challenge in each case is not only technical but also commercial – to
develop affordable versions of these products.
3. Varying research and development budgets :
The United States annual research and development expenditures are highest in the world,
nearly 60 percent of these funds are still earmarked for defense. Japan has increased its
research and development expenditures much faster than the United States and is spending
mostly on nondefense related research in physics, biophysics, biochemistries, material
science, geography and computer science. Many companies are content to put their money
into copying competitors’ products and making minor feature and style improvements. So,
new innovation of technology depends upon the nature of research work and on the amount
of budgets allocated for research and development works.
4. Increased regulation of technological change :
As products become more complex, the public needs to be assured of their safety and
security. Consequently, government agencies’ powers to investigate and ban potentially
unsafe products have been expanded. Safety and health regulations have also increased in the
area of food, automobiles, clothing, electrical appliances, medical sciences and construction.
Marketers must be aware of these regulations when proposing, developing and lunching new
products in the markets.

E. Political legal environment.

1. Legislation regulating business :
2. Growth of special - interest groups :

F. Social cultural - environment.

1. High persistence of core cultural values :
2. Existence of subcultures :
3. Shifts of secondary cultural values through time :
The importance of strategic planning in the development of Bangladesh Banking Services