Conventional Banking Marketing Strategy


Marketing Strategy is the most of import country which is to be examined by the policy shaper carefully in Islamic Banks. A good and sound selling scheme is one which covers different facet non merely client ‘s position point but services quality and returns and they must besides vie with conventional Bankss, those are already known due to their good experience and expertness in the banking sector.

Religious component, which was one time thought as the major factor that drives Muslims to utilize Islamic banking installations offered by Islamic Bankss, has now become irrelevant to Muslim clients. Increasing competitory advantage of both Islamic and Conventional Bankss and alter client ‘s perceptual experience ; it is of absolute importance for Islamic Bankss to measure the effectivity of their selling scheme.

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This paper reviews the current selling scheme of Islamic Bankss in Pakistan,

Schemes related to Product, Pricing, Promotion, distribution channel, and modern engineering infra construction. The survey finds that the conventional Bankss have more aggressive selling schemes than Muslim Bankss and Islamic subdivisions of conventional Bankss.


Before introducing of modern Banking system, there was a direct finance system was bing, where financer deals straight to the user of finance ( saver were covering to investor straight ) . Due to rapid growing of trade and fabrication industries, it increased the demand of their fiscal demands. And direct dealing of investor and rescuer unable to carry through their fiscal demands and Bankss came into being to ease fiscal minutess between investor and rescuer. Since Bankss are covering in assorted dealing, Collecting, receiving, loaning, funding, renting, reassigning, paying and many other installations and accomplishing excellence in consumer services.

Habib bank is the first bank came into being by Muslims of subcontinent in 1941 and at the same phase thought of another Muslim bank ( Muslim Commercial bank ) was given by the Founder of Pakistan Quad-e- Azam. State bank of Pakistan came into being in 1950 and it was another stat mi rock achieved by the Muslims in history of banking in Pakistan.

In 1999, there were 19 domestic and 17 foreign Bankss in Pakistan. And from the domestic Bankss four Bankss were owned by the authorities and remainder were private Bankss. By the terminal of 2007, there are 47 Bankss working in Pakistan of which 13 are foreign Bankss and 34 are domestic Bankss. ( Husain 2007 )

At the terminal of Dec 2010, there are 12 foreign Bankss and 34 domestic Bankss are working in Pakistan.

IFSI has made significant inroads in the past decennary and has successfully graduated from a niche market for Muslims to a mainstream market. The growing of IFSI has systematically outpaced that of the conventional banking both domestically and globally. Resultantly, the portion of IFSI has bit by bit increased. Though the Islamic finance industry is aided by a smaller base, sustained growing flight for an drawn-out period evidences the success of IFSI. In Pakistan, Islamic banking establishments ( IBIs ) now boast a portion of 6.7 per centum as of December 2010, get downing from a mere 0.3 per centum in 2003.

Islamic banking web is now distributing quickly, as there were 400 Muslim Bankss and 168 Islamic subdivisions of conventional Bankss in Pakistan at the terminal of Dec 2009 and it increased up to 479 Islamic Bankss and 223 Islamic subdivisions of conventional Bankss at the period ended of December 2010 in Pakistan.

Beginning: State bank of Pakistan, Islamic banking bulletin 2010

The Islamic banking industry maintained its growing flight during the last one-fourth of CY 2010 despite assorted challenges being faced by the economic system. The industry ‘s assets base during the one-fourth increased by 12.5 per centum to Rs 477 billion from Rs 424 billion as at the stopping point of September 2010 ; the YoY growing in the assets was 30 per centum. The sedimentations during the one-fourth increased to Rs 390 billion from Rs 338 billion in September 2010 reflecting a growing of 15.3 % on a QoQ footing whereas on the YoY footing, the sedimentations grew by 38 % from Rs 283 billion as on December 2009.

“The prohibition of involvement in Islam caused many Hagiographas to come frontward with an thought to set up Bankss that do non work on involvement footing. So the basic difference between Islamic Bankss and conventional Bankss is that Muslim Bankss are involvement free Bankss whereas conventional Bankss are involvement based banks” . ( Kahf 2006 ) . “Although involvement and net income are really clear constructs but they are misunderstood by many people. Basic difference between involvement and net income is that involvement is the wages to money and net income is the wages to capital investing. In other words money produces involvement and capital investing produces profits” ( Toutounchian 2004 ) .

Literature Reappraisal:

Due to increased competition from both Islamic and Conventional Bankss and

Changes in client ‘s perceptual experience, it is of supreme importance for Islamic Bankss

to measure the effectivity of their selling scheme. ( Azmi & A ; Haroon 2005 ) .

“The absence of forbidden elements will be a status for concern, but no longer plenty on its ain. Professional plus finance and investings with a societal touch will win. Islamic finance will go a value-driven business.” ( Gassner, 2008 ) .

“Every concern scheme consists of a selling scheme plus a compatible engineering scheme and sourcing strategy” . ( Kotlor, 2001 ) .

Harmonizing to Kotler, civilization is “the set of basic values, perceptual experiences, wants and behaviours learned by a member of society from household and other of import institutions.” ( Kotler et al, 2004 ) .

Sellers should hold a better apprehension of the cultural environment of the state before doing any concern scheme. ( Kotler et al, 2004 ) .

Between the negative and positive option scenario sub-samples, there were no differences in perceptual experiences of value or equity, except in perceptual experiences of timeserving behaviour – the negative option offers yielded significantly higher

perceptual experiences of timeserving behaviour ( Jane W. Licata & A ; C.W. Von Berge, 2007 ) .

The confidence dimension had the largest influence on client satisfaction and overall satisfaction of bank clients in both countries of Cyprus had a positive consequence on their word-of-mouth ( Huseyin Arasli, Salih Turan Katircioglu & A ; Salime Mehtap-Smadi, 2005 ) .

The survey finds that the “tangibles” dimension was of small effect among Tunisian and Canadian bank clients, but there were differences between the two groups for the other dimentions ( Riadh Ladhari, Ines Ladhari & A ; Miguel Morales, 2010 ) .

Study of Macquarie bank finds that Macquarie offers a alone blend of niche selling and international graduated table operations. The dependability of its scheme by others is ill-defined, although some general lessons can be drawn. Some of these are prophylactic given the hazards built-in in the bank ‘s attack ( Cameron Gordon,2005 ) .

Correlates of client trueness to their bank: a instance survey in Nigeria, A hierarchal arrested development analysis carried out revealed that perceptual experience of service quality and satisfaction are important forecasters of client trueness, with client satisfaction lending more ( Benjamin Osayawe Ehigie, 2006 ) .

The consequences of the survey show how corporate societal duty ( CSR ) initiatives Influence service quality perceptual experiences and besides examine CSR ‘s impact on trust and affectional attitudes of clients towards their Bankss. The survey ‘s hypothesized relationships were chiefly supported, i.e. perceived service quality is positively associated with trade name consequence mediated by trust. CSR initiatives play an of import function in sensed service quality, which in bend, influences trust and trade name consequence. Finally, CSR is shown to be straight related to trade name consequence. ( Yaowalak Poolthong, Rujirutana Mandhachitara, 2009 ) .

The research findings reveal that monetary value, repute, service quality, effectual advertisement, nonvoluntary shift, distance, and exchanging costs impact on clients ‘ bank exchanging behaviour. The findings besides reveal that the immature and high-income groups are more likely to exchange Bankss ( Michael D. Clemes, Christopher Gan and Dongmei Zhang, 2010 ) .

The consequences confirm Matzler et Al. ‘s findings and show that monetary value satisfaction can be Conceptualized as a multidimensional concepts and that the five monetary value dimensions have a strong and important impact on overall satisfaction. Furthermore, it is shown that the relationship between satisfaction of single monetary value dimensions and overall monetary value satisfaction can be asymmetric, bespeaking that the three-factor theory of client satisfaction is applicable besides to monetary value satisfaction ( Kurt Matzler, Birgit Renzl & A ; Rita Faullant, 2007 ) .

The consequences show that five cardinal dimensions, viz. : competency, communicating, struggle handling, trust, and relationship quality, discriminate between clients in footings of perceived relationship quality and client satisfaction. Furthermore, overall bank-customer relationship quality discriminates between satisfied clients and those who are non ( Nelson Oly Ndubisi & A ; Chan Kok Wah, 2005 ) .

Sound loaning processs in retail fiscal institutes involve placing high hazard application, modifying loan conditions such as security demands, and supervising refunds station loan blessings ( Deborah Ralston & A ; April wright,2003 ) . The consequences indicate that the bulk of respondents do non utilize any sort of nomadic banking service. Percept of cost, hazard, low perceived comparative advantage and complexness were revealed to be the chief grounds behind the reluctance to utilize the service. The influence of other background factors is less apparent ( Pedro Cruz, Tommi Laukkanen, 2010 ) .

The findings support old suggestion that service trueness can be determined by following four dimensions, although a shadiness of intervention in the unidimensionality of the service trueness instrument in inquiry was observed: purchase purpose ; viva-voce communicating ; monetary value sensitiveness ; and kicking behaviour ( Teemu Santonen, 2007 ) .

Examines the committedness – trust dimention of the relationship selling paradigm in the Hon Kong ‘s corporate banking sector ( Ivana Adamson, kok-Mun Chan & A ; Donna Handford, 2003 )

The survey reveals that market public presentation relates extremely to relationship orientation and service quality as two alternate but complementary schemes, whereas the consequence on economic public presentation is fundamentally indirect through the market public presentation ( Carmen Camarero, 2007 ) .

The survey validates the model and identifies relevant chairing effects ( Sven C. Berger, 2009 ) .

A formidable organic structure of literature has been built up in recent decennaries proposing that market orientation helps houses attain their schemes objective in a dynamic environment ( Syed Aziz Anwar & A ; M. Sadiq Sohail, 2003 ) .

The findings imply that shop layout affects on-line consumer behaviour, corroborating the findings of Vrechopoulos et Al. in a different sector. The survey besides confirms the TAM relationships in all interventions and indicates that layout has an consequence on user credence of web banking in footings of TAM concept

( Adam Vrechopoulos and Evagelos Atherinos, 2009 ) .


Objective of Research

The aim of research is to hold complete and enlightening image of the fortunes in Pakistan that how Islamic sector can increase their market size through conventional selling schemes as they are more experience and have expertness.

Data Collection

This survey is based on quantitative attack and secondary information is used for

replying research inquiry. An Exploratory attack is used in research because research inquiry needs a qualitative attack, there is no specific reply. However primary informations is non used due to clip restrictions and it is hard to acquire relevant information from accurate people, because of most of the Bankss do non unwrap / portion their information due to limitation of their policies. Therefore, in this survey secondary informations chiefly taken from articles, published diaries, cyberspace, official web sites, province bank of Pakistan and some internal studies and findings of different Bankss.

Secondary Datas:

Secondary informations is enlightening to supply better apprehension of the research job. There are many advantages of utilizing secondary informations like good quality and dependability, salvaging clip and money. “Begin with secondary informations, and merely when they are exhausted, continue with primary data.” ( Ghauri & A ; Gronhaug 2005 ) Harmonizing to Ghauri & A ; Gronhaug, there are two types of secondary informations is internal and external and we ‘ll utilize both beginnings for our research work.

Datas Analysis:

In this chapter current selling schemes of Islamic banking and analysis of conventional banking with Islamic banking schemes would be presented.

Marketing scheme refers to the selling ends and action programs that address affairs of merchandise / service, monetary value, distribution, communicating, and the procedure of new merchandise development.

By and large, we can place the peculiar market leader, rival, follower and nicher by placing its vision, mission, aims, and selling Schemes.

”the absence of prohibited will be a status for concern, but no longer plenty on its ain. Professional plus finance and investing with a societal touch will win. Islamic finance will go a value-driven business.” ( Gassner2008 ) . Every concern scheme consists of a selling scheme plus a compatible engineering scheme and sourcing strategy.” ( Kotlor 2001 )

Merchandise Scheme

By and large, the manner merchandises / services are offered by the bank is making image of peculiar bank in the client ‘s head ; It reflects the perceptual experience of clients sing the merchandises / services offered. Muslim Bankss have to understand the nature of client demands they want to have in order to fulfill the client ‘s demands. Among the many benefits client wants to avail when purchase any merchandise or services, includes monetary value, availably, easiness to utilize. It is the benefit that makes a merchandise or services attractive to a client. In this respect, Bankss should take excess attention to benefits creates for user while marketing the merchandise / services. For Muslim Bankss, they must able to pass on these benefits convincingly to public. Since Islamic banking is an alternate to conventional banking, Islamic Bankss need to innovative in term of merchandises and services, merely the manner to prolong competitory advantage against conventional Bankss that offer more installations or at least on par.

Pricing Scheme

Second component is pricing which is really of import selling technique used to better overall bank ‘s fight. Well planed scheme, to do policies and uninterrupted monitoring monetary value and costs to guarantee net incomes. An of import portion of pricing scheme is determined how merchandise or services is priced. “It has been proved in many old research bulk of clients do non utilize faith as the chief factor when set uping a relationship with Islamic Bankss. In the instance of corporate clients for illustration, they believe that it is the cost and benefit component that is the most of import factor when choosing fiscal establishment ( Ahmad & A ; Haroon 2002 ) . Most clients seek highest return and lowest charges imposed when edifice relationship with any bank for sedimentation or loaning.

Distribution Channel

The importance of this selling component is related to the distribution of Services to the ultimate clients. Must be accessible to clients, another of import consideration in a distribution scheme for Bankss is to turn up their subdivisions web, based on the mark market and location where highest gross revenues is expected and convenience to clients easy.

For illustration, a survey conducted on Malayan clients by Haron et Al, ( 1994 ) the writers reported that the top five factors that are considered as of import by

Malayan Muslim when choosing their Bankss are:

  1. Fast and efficient services
  2. Speed of dealing
  3. friendliness of bank forces
  4. Confidentially of Bankss
  5. Knowing about the demands of clients

Non Muslim ranked the undermentioned as of import when choice their Bankss are:

  1. friendliness of bank forces
  2. Fast and efficient services
  3. Repute and image of bank
  4. velocity of dealing
  5. Confidentially of Bankss

Braches Types

Meezan Bank





Muslim Branches of Conventional Banks


Entire Branchs



In the visible radiation of above captioned table above mentioned, Meezan an Islamic bank has entire of 222 subdivisions distributing 60 metropoliss of the state, and MCB a Commercial bank holding 1,048 braches distributing more than 100 metropoliss, including 14 subdivisions of Islamic based. This indicates that Commercial Bankss are strongly following distribution channel scheme to enlarging its market size.

Promotion Strategy

Promotion schemes are covering the information, influence and carry client ‘s determination procedure. Promotional scheme is formulated on the footing of ends and aims of bank, personal merchandising, advertisement, gross revenues publicity, promotion, engineering enrichment and public relation. This scheme is near related to communicating, which means transmittal of message from transmitter to receiver, selling communicating so that relationship between purchasers & A ; Sellerss.

Promotional Channelss

Meezan Bank


Web sites


Tele vision


News Paper

Direct Mail



Public dealingss:

Imperativeness kits


Annual Reports



Community dealingss

Personal Selling

In above tabular array it is seen that MCB a commercial bank is accommodating more promotional schemes than Meezan an Islamic bank. Promotional scheme is most of import to increase in market size and to be market leader. Islamic based Bankss should carry on seminars to do apprehension of Islamic banking system among clients.

Decision Remarks:

This paper highlights current selling schemes of Islamic and conventional banking sectors in Pakistan, it is seen that Muslim Bankss in Pakistan being a Muslim state do non confront any trouble to derive support signifier clients in the visible radiation of this disclosure, Islamic Bankss have to better understand the demands, penchant and behaviour of their mark group clients in order to remain in market and increase their market size every bit good. In the instance of Meezan bank, it ‘s a market leader in Islamic banking industry, this bank should take as function theoretical account for Islamic banking industry, holding big market size, maximal sedimentations and no of merchandises strictly Islamic based in the markets. They are good and taking in market as market leader due to strong in marketing schemes of Product, monetary value, distribution channels and publicity.

Muslim Bankss have to plan public presentation rating system ( there must be a hazard and command self assessment procedure in topographic point ) and understand the client ‘s demand and supply the more or at least same benefits to clients which are being offered by conventional Bankss so that client could be converted to Islamic banking format from conventional banking system.

Muslim banking industry is new in market and there is high competition as many conventional Bankss are working and taking in market, at other manus growing of Islamic Bankss is really good but they have to work on their selling schemes more to take competitory advantage over all rivals in the market.

Merchandise Scheme

Muslim Bankss are offering limited merchandises to their client ‘s even conventional Bankss holding many merchandises in market that are the chief cause to remain in market as leader. Muslim Bankss have to offer more merchandises to vie with their major rivals as conventional Bankss.

Pricing Scheme

Customer has inclination to travel for monetary value, presently, clients have more picks to choose peculiar merchandise or services on the footing of monetary value. Muslim Bankss should offer at low monetary value the same merchandise or services as conventional Bankss do.

Distribution Channel

This constituent of the selling mix is related to the distribution of services to the ultimate clients. Servicess that require the client to travel to the process must be accessible as possible. Rural countries must be covered by Muslim Bankss as conventional are already covering this country.

Promotion Strategy

Promotion is the ratting and carrying client ‘s determination. Presently Muslim Bankss are chiefly concerned on Islamic publicity policies as bulk of population in Pakistan are Muslims. Muslim Bankss should follow publicity policies sharply in add-on to follow the conventional bank ‘s policies so that competitory advantage could retain with Islamic Bankss.

besides all above 4 Ps of marketing schemes Islamic Bankss have to cover technological facet more than rivals or at least at par and awareness plans of Islamic banking must be conducted more often with easy entree to common people and free of cost so that consumers may break aware to Islamic banking and its significance.

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