Guest of Honor speech by Dr Raveendranath Nayak, Director School of Management,in the Symposium on “Marketing in Banking Industry: Recent Trends and Advances”
October 17, 2015
Guest of Honor speech given by Dr Raveendranath Nayak, our Director in the Symposium on “Marketing in Banking Industry: Recent Trends and Advances” organized by the Department of Commerce, Manipal Academy of Higher Education, Manipal on the Saturday, 17th October, 2015.
I am an outsider to the Discipline of Banking but an insider to the Marketing Discipline. As a run-of-the-mill scholar in ‘Marketing Strategy to Banking Industry,’ I’ve a conundrum: Is marketing strategy needed for Indian public sector banks? Is it really relevant to them?
My ‘unit of analysis’ is any public sector bank (PSB). The PSBs as a cohort, are a monopoly in the Indian banking industry. We understand that marketing strategy enables an organization to create exceptional value, thereby creating a sustainable competitive advantage. That makes me to ask a question whether any PSB has had unique marketing strategy that differentiated it from other PSBs in the so called competitive landscape or from private sector banks.
All PSBs have limited autonomy – they all receive common policy directives from their regulators whether be it from RBI or from the Department of Financial Services in the Ministry of Finance. Most of them have common trade unions. They share their employee training colleges, almost resulting in the inculcation of similar workplace cultural values. To the market they are seen to be offering same or similar banking service products. Most of their bank branches—metropolitan or rural—cater to the full suite of customer segments. Each of them provides the identical service facilities --- Internet banking, telephone banking, core banking, ATMS, air-conditioned branches---some banks are leaders in implementing them while others are laggards but joining the suite sooner or later. Based on my personal experience as a retail customer in a few PSB branches in Udupi, I have hardly seen any perceptible difference in their customer service. So, where is the differentiation in customer service or in marketing strategy? Where is the scope for such differentiation? Without significant differentiation, they only have parity in competitive advantage. A competitive advantage dissipates when others copy the source of that advantage. To them what is then the relevance of marketing strategy?
As opposite to my above rhetoric, I am sure the August body of scholars and practitioners who have gathered in this Symposium would identify how the recent knowledge and understanding in Marketing Strategy can make a difference to a PSB as it strives to be chosen as the valuable banker by its esteemed customers.