Impact of Marketing Orientation on Financial Performance of Banks in India

Abstract

Marketing orientation has become an important ingredient of the strategic management of banks in India due to the changed competitive landscape of the industry. However marketing expenses in banks can be risky as it is difficult to establish a direct relationship between marketing strategy and financial performance. This paper studies the impact of marketing orientation on the financial performance of banks in India. The marketing orientation can be understood by marketing strategy classification to which the banks belong. The study has been conducted on a total of 56 public, private, and foreign banks for the period 2004 to 2012. The paper has identified that certain financial parameters vary significantly among banks classified based on marketing orientation. However, marketing strategy classification has only a subdued impact on the profitability of the banks. The paper concludes with appropriate implications for banks on usage of marketing orientation in strategy.