Question

As the Head of Product Development Department of Ikhwan Bank Limited (IBL), you and your team are given a task to come out with a new product or a package of products that is specifically designed to cater for small-medium enterprises and professionals such as medical practitioners, lawyers, engineers, accountants etc. to meet their financial requirement. As you are fully aware, this customer segment has always been neglected by many financial institutions. Many of these customers already have savings and current accounts with IBL. The bank management is of the view with a suitable attractive and profitable financing products, the bank could create a niche focussing on this segment for its long term business strategy. You will have to customize the product/s to cater for this group. i) Highlight briefly the relevance of niche marketing to an IFI in creating a more fine-tuned product and services for the identified segment. ii) Customize a product or package to cater for this target group by highlighting the product features inclusive of the appropriate Shariah contract applied and its benefits. The product or package should be different from those already in the market. iii) What are the appropriate promotional tools that IBL should adopt in order to ensure that the targeted segment are aware of the availability of the product and at the same time the bank can increase its revenue?

Answer 1

Hi,

Niche marketing strategies is a very useful and important for a company,if a company implement it properly after a R&D.

In the niche marketing strategy a company focus on a specific segment or area of a market.These day maximum companies of every industry are using this concept.

1.Ans.-I n this case the IBL Bank want to offering special and different product and services to professional and SME group.The biggest advantage for this bank is, this area is untouched by other market players.Professional group is a highly income group.They earn a handsome income though fee and commission.They are also highly educated and techno friendly.In other side SME segment is also a highly income generated group and the dependency of this group on financial institutions is more and they are available in the bulk in the market.By this strategy bank can capture a big part of highly income generated segment.

So, if the company offers special product and services to this segment it will be very profitable for the company.

2.Ans.-Company can offer a customize services to this segment .First part of this segment is professional-for this group company can offer them easy loan product with wealth management services, company can also offer account opening facility and other banking facility for there(Professionals) clients,also bank can offer him wealth management or insurance related facilities to there client at discount rate.Example-Like, health insurance and liability insurance services for the clients of a doctor and a doctor respectively.

For SME group bank can offer Easy loan product to the firms and wealth management services to there client at discount.Bank can offer consultancy services to the SME. Bank can provide full banking services to customers of SMEs.

Bank can offer loan,insurance and consultancy services together to the SME.

3.Ans.-Marketing is very important for successful penetration of product and services.A bank create a special department for this segment and hires Relationship Manager for facilitating of this offer.

Bank can use media platform,hording and other promotional strategy.Bank cant directly approach to the customer through mails,messages,fax etc.

These group is very educated and highly risky( in respect of feedback and response for Product and service quality).

So, bank should offer after all R&D and full frame strategy for offering.