Kotak Final Project Car Finances

8/20/2019 Kotak Final Project Car Finances

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A

PROJECT REPORT

ON

CAR FINANCEAT

KOTAK MAHINDRA PRIME LTD. (KMPL)

SURAT

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CERTIFICATE

This is to certify that project report on Service Markein! o" Car Finance a KMPLSurat is submitted by Kr#na$ U. De%ai to the GRIMS, Vapi in the partial fulfillment of 3rd semester.

IR!"T#R$R.R.S.S%&% GRIMS G'I!

S&M!!R R#%&I& (&SS.)R#*!SS#R+ GRIMS


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PROJECT COMPLITION CERTIFICATE

TO &HOMSOE'ER IT MA CONCERN

This is to certify that Mr. KRUNAL U. DESAL of GRIMS, V&)I has under-one his

Summer Trainin- at KOTAK MAHINDRA PRIME LTD, S'R&T, and has attended our

or-aniation from May 1, //0 to uly 3, //0 for the same.

%e 2as assi-ned a project 2or on SER'ICE MARKETIN* OF CAR FINANCE+

and has completed the same successfully.

4e 2ish him -ood luc for his future.

*or 5M)6

)lace$ S'R&Tate$

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DECLARATION

I the undersi-ned hereby declare that, the said )roject Report on

“SERVICE MARKETING OF CAR FINANCE”, submitted to

Veer 7armad South Gujarat 'ni8ersity is my sole 2or and I

assure that this 2or has not been submitted to any other

'ni8ersity or Institute for any other purpose.

P$ace, -

--------------------------

KRUNAL U. DESAI

M/A

*RIMS0 'API

Dae, -

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ACKNO&LED*EMENT

*irst of all I 2ould tae this opportunity to than Dr. R.S.SHAH0 respected irector of

*RIMS0 'API, 2ho -a8e me the opportunity to do this Summer Trainin- )roject 4or.

I 2ould also lie to than Mr. Ja1i Pae$ (Relationship Mana-er+ 2ho -a8e the consent

to carry out my Summer Trainin- in Koak Ma2in3ra Pri4e L3 (Car Finance)

SURAT 2hich is one of the reputed companies in car finance industries.

I 2ould lie to e:press my deep sense of re8erence and -ratitude to Mr.'ar#nDa$a$ (mana-er ; credit department+ for -uidin- me throu-hout the assi-nment in the

company < for pro8idin- their tutela-e 2hile -oin- throu-h the project 2or. I am also

8ery much thanful to Mr. 'i1#$ (mana-er = operation department+, Mr. An#1 ra2o3

(sales coordinator.+ for supplyin- the re>uired information to me.

&nd I am personally indebted to my project -uide Mr. Sa4eer ro2a3ia %ir (ass.

professor+, GRIMS, Vapi, for pro8idin- his -uidance 2here8er it 2as necessary

throu-hout my project 2or.

6ast but not the least I 2ould lie to than all my friends and others 2ho helped

me directly or indirectly for the successful completion of my summer project.

o#r% Fai2"#$$50

---------------------------

KRUNAL U. DESAI

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E6ECUTI'E SUMMR

In this project in area of Ser8ice Maretin-, I ha8e made a study on the 2orin- of "ar *inance "ompany for the purpose I ha8e selected on 7@*" (7on @anin- *inance"ompanies+ and the other )ri8ate ban. These t2o companies are 5M)6 (5ota Mahindra )rime 6td+ as an 7@*" and I"I"I as a pri8ate ban. I undertoo a study in both "ar *inance "ompanies to no2 the 8arious strate-ies. &fter the study I prepared a brief repot of the 2orin- of both these finance companies.

&t a lar-er sta-e, I ha8e done a comparati8e study of all four ApB of the maretin- of

these finance companies. In this comparati8e study, I ha8e compared 9 )Cs of bothcompanies lie2ise ho2 product, price, place and promotion strate-ies of both thecompanies are different from each other.

& detailed comparison of the 8arious ser8ices offered, rate of interest, their differentfindin- norms, different types of credit e8aluation and so and so forth to tap the maretand -eneral ambience is done.

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O/JECTI'E OF STUD

1. The first and the foremost objecti8e of this trainin- are to no2 about the practical 2orin- of the corporate 2orld 2hich is completely different to that of theoretical no2led-e that 2e are tau-ht in our classroom throu-h boos.

. It is throu-h trainin- that 2e can ha8e clear ideas combin- theoretical no2led-eof classroom 2ith practical no2led-e in firms or company.

3. 4e can also apply our theoretical no2led-e durin- our trainin- pro-ram and canconclude that to ho2 much e:tent they are practically applicable or not.

9. @y this trainin- 2e can chec and understand co;ordination of all mana-ementfunctions such as difficult in classroom.

?. 4e can also no2 about the role of mana-er in the company 2hich must be performed by him durin- his ser8ice as mana-er.

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LIMITATIONS

It is difficult to -et some informationCs re-ardin- financial, sales and other fi-ure

as firm do not disclose the abo8e data and eep it pri8ate and confidential tothemsel8es.

In this report, information 2ritten by me as per my limited understandin- of the

concern project.

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INDE6

F

Sr. No. Topic Page No.

SECTION 7

#V!RVI!4 #* 5M)6

*I7&7"I&6 S"%!M!S

!T&I6S #* 6#&7 &))6I"&TI#7*#RM

!)&RTM!7TS

SECTION 8

S!RVI"! I7'STR

MM&R5!TI7G MIH #* 5M)6

M&R5!TI7G MIH #* I"I"I

"#M)&R&TIV! ST'

"#7"6'SI#7S &7 *I7I7GS

@I@6I#GR&)%


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SECTION 7

*ENERAL O'ER'IE&

OF

KMPL

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KOTAK MAHINDRA PRIME LIMITED

SOMETHIN* A/OUT THE COMPAN,

5ota Mahindra )rime 6imited (5M)6+ is a subsidiary of 5ota Mahindra @an 6imited formed to finance all passen-er 8ehicles. 5M)6 is IndiaCs one of the lar-estnation 2ide dedicated car finance company. The company is dedicated to financin- andsupportin- automoti8e manufacturers, dealers and retail customers. The "ompany offersfinancin- in the form of loans for the entire ran-e of passen-er cars, multi utility 8ehicles

and pre;o2ned cars. The "ompany also offers In8entory fundin- and infrastructurefundin- to car dealers and has strate-ic arran-ement 2ith 8arious car manufacturers inIndia for bein- their preferred financier.

5M)6 has robust deli8ery platform 2hich is critical for sustained -ro2th. &s on March31, //D, 5M)6 has a retail distribution net2or comprisin- of ? branches (includin-representati8e offices+ co8erin- about 1// locations in 1D states in the country and has a2ide net2or of irect Maretin- &ssociates, broers and a-encies supportin- thedistribution net2or.

The "ompany 2as incorporated on Eth *ebruary 1FFD and commenced its operations on1st 7o8ember 1FFD as a joint 8enture bet2een 5ota Group and *ord "reditInternational (*"I+ 2herein 5ota Mahindra @an 6imited (5ota @an+ (*ormerly5ota Mahindra *inance 6td+ (5ota @an+ held D/ e>uity stae and the balance 9/2as held by *"I. &fter incorporation and subse>uent commencement of the business bythe joint 8enture, the business of financin- passen-er cars and its related acti8ities, pre8iously carried out by 5ota Mahindra *inance 6imited (no2 5ota @an+, 2ere bein- undertaen by 5M)6. The "ompany has immensely benefited from the brand

e>uity of J5ota MahindraJ 2ho 2as maret leaders in the auto finance sector.

.

#n une 1, //?, 5ota Group and *"I announced the reali-nment of their joint 8enture2herein, 5ota Group 2ould ac>uire the 9/ percent stae in 5M)6 held by *"I, -i8in-

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the 5ota Group complete o2nership of 5M)6. The transaction 2as subse>uentlycompleted on #ctober 9, //? on receipt of all re-ulatory appro8als.

S2are2o$3in! Paern an3 Ca1ia$ In"#%ion,

5ota @an holds ?F.E e>uity stae in 5M)6, 3F.? is held by 5ota MahindraIn8estments 6imited (a 1// subsidiary of 5ota @an+ and the balance 1./ is held by 5ota Mahindra &sset Mana-ement "o.6td. (& 1// subsidiary of 5ota @an+.

ICRA Rain!,6on- Term ebentures 6&&

CRISIL Rain!, Short Term )1K

The ratin-s reflect the continued stron- performance in terms of impro8in- maret position, ti-ht control on asset >uality and conser8ati8e balance sheet profile. 5M)6Lsratin- benefits from its parenta-e, stable and stron- mana-ement, resource raisin-capability and stron- system and controls.

CUSTOMER SER'ICE,

5M)6 has established a centralied customer ser8ice acti8ity to ensure hi-h >uality andtimely response to customer needs. The robust system platform ensures the abo8estandards are met. 5M)6Ls launch of itLs 2ebsite is a commitment by the or-aniation to pro8ide all staeholders, includin- customers, accurate and up to date information.

COMPAN9S PROMOTORES,

5ota Mahindra is one of IndiaLs leadin- financial con-lomerates, offerin- completefinancial solutions that encompass e8ery sphere of life. *rom commercial banin-, tostoc broin-, to mutual funds, to life insurance, to in8estment banin-, the -roup catersto the financial needs of indi8iduals and corporate.

&s on 31st March //0, the -roup has a net 2orth of o8er Rs.3,// corer and employs

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around 1/,E// employees in its 8arious businesses and has a distribution net2or of branches, franchisees, representati8e offices and satellite offices across 3// cities andto2ns in India and offices in 7e2 or, 6ondon, ubai, Mauritius and Sin-apore. TheGroup ser8ices around .D million customer accounts.

OR*ANISATIONAL STRUCTURE

Mr. U3a5 Koak C2air4an

Mr. Dee1ak *#1a Direcor

Mr. C Ja5 ra4 Direcor

Mr. S2ek2ar Sa2e Direcor

M% S2ani Eka4:ara4 Direcor

Mr.S2iva;i Da4 Direcor

Mr.S2iva;i Da4 Direcor

MANA*EMENT,

Mr.S#4i /a$i - CEO < Mana!er

Mr.S#32akar S2an:2a! - COO

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ACHIE'EMENT OF KMPL

5ota Mahindra )rime 6td. has been a2arded the Voice of "ustomer a2ard for A@est)assen-er Vehicle *inance "ompany in India //DB by *rost < Sulli8an (*uartered in )alo &lto, 'S 2ith ? offices across the 4orld. * < S tracs the

automoti8e and transportation 8ertical across the -lobe to understand maret andconsumer trends.

The a2ard is based on the *< S study of "ars and Multi 'tility 8ehicle o2ners amon-?1// customers across 1? cities. The customers rated their financiers on F parameters based on their satisfaction le8el. 5M)6 topped in D out of F cate-ories and 2as 7o. int2o other cate-ories. The other financiers included as part of the study 2ere &@7 &mro,%*", I"I"I, G! "ountry2ide, S@I and "itiban.

This is the first e8er a2ard -i8en in &uto *inance domain and 2innin- the same is amomentous occasion for entire 5M) team as "ustomers ha8e adjud-ed us as the A@est

)assen-er Vehicle *inance companyB in the country This a2ard is the reflection of )lannin-, e:ecution and hard 2or put in by the entire 5M) team to ensure customer deli-ht and is an important step in our journey to2ards becomin- the AGlobal Indian*inancial Ser8ices @randB.

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'ARIOUS FINANCIAL SCHEMES PRO'IDED

/ KMPL

MAR*IN MONE SCHEME,

In this scheme, 2e finance your car for up to F/ for certain models. ou 2ill ha8e to-i8e us a do2n payment for the mar-in amount, (in8oice 8alue minus *inance amount+.The financed amount can be repaid as per your con8enience in tenures of 1 months to D/months at your con8enience either throu-h !>uated monthly Installments or a differential plan that 2e can tailor for you to minimie your outflo2.

STEP UP SCHEME,

In this scheme, the !MI increases after e8ery year, si: month or >uarter dependin- uponthe customer needs. This is best suited for people 2ho 2ant to e:perience the lu:ury of

the car and 2ants to pay in line 2ith their -ro2in- income startin- from 6o2 !MI in theearly period of repayment.

LO& EMI /ALLOON SCHEME$

In this scheme 1/;? of the cost of the car is paid as last !MI, thereby reducin- the!MI for the entire tenure.Thescheme is for customers 2ho 2ant to dispose off their 8ehicle at the end of the tenure but are looin- at affordable !MICs durin- the tenure

AD'ANCE EMI SCHEME,

In this scheme, you mae the payments of a fe2 monthly installments upfront. The balance is payable throu-h !>ual Monthly Installments. 4ith the ad8ance installmentsyou can repay your loan much faster.

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= SIMPLE STEPS TO O&IN*

A CAR ACCORDIN* TO KMPL

5M)6 offers,

Finance on 2e >i3e% ran!e o" ne> an3 1re-o>ne3 car%.

Aracive inere% rae%.

F$e?i:$e %c2e4e%.

S1ee35 1roce%%in!.

&ccordin- to 5M)6, there are 0 simple and con8enient steps so that the process of buyin- a car can be as enjoyable as o2in- a car.

STEP, 7 *ETTIN* INFORMATION,

"ustomer can -et information on companyCs finance schemes in 8arious 2ays mentioned belo2$

a. "ompanyCs M& (irect Maretin- &ssociates+. b. &t dealer point; they are associated 2ith most dealers in city and ha8e a

representati8e 2ho 2ill -i8e the information on their finance schemes and other

ser8ices. The representati8es 2ill be present at the 5M)6 counter or can beapproached throu-h the dealer representati8es.

STEP, 8 RECEI'IN* THE KMPL OFFER,

"ompany offer tailor made schemes based on customerCs need.

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Mar-in money scheme.

Step up scheme.

6o2 !MI balloon scheme.

&d8anced !MI scheme.

Special schemes offered by 5M)6.

STEP, @ DOCUMENTATION,

#nce the 8ehicle, product and scheme are realied, it 2ill be time for the company toinitiate the process of main- finance a8ailable to the customer as soon as possible basedon their financial documentation.

STEP, CREDIT E'ALUATIONS,

& 5M)6 officer 2ill e8aluate customerCs credit 2orthiness based on the documentssubmitted by them alon- 2ith the *I report. & field in8esti-ation officer 2ill 8isit for

additional information that 2ill help company for process customerCs loan.

STEP, B PROCESSIN* OF FINANCE,

&fter credit appro8al, they 2ill enter into an a-reement 2ith customer and collect postdated che>ues ()"s+.

STEP, DELI'ER OF CAR,

*or the deli8ery, customer 2ill recei8e a call from companyCs sourcin- a-ent or salescoordinator intimatin- them about the tentati8e date of deli8ery.

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STEP, = RECEI'IN* A*REEMENT AND RE-PAMENT

SCHEDULE,

&t the time of deli8ery, customer must collect the in8oice from the dealer. Subse>uent torecei8in- the R" boo and in8oice copy, company 2ill send the a-reement copy andrepayment schedule to customer by courier.

SOMETHIN* A/OUT KMPL9S CAR LOANAPPLICATION FORM

5M)6 belie8es in safe business. So customer has to fill up different type of importantinformation about their personal as 2ell as other important matters. @asically there are 9types of details customer has to fill up at a time of application.

"ontract details.

Vehicle and finance details.

)ersonal details.

#ther details (only for institution+.

CONTRACT DETAILS

1. T51e o" a11$ican$

a+ Institution or indi8idual.

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b+ If institution, specify the type$ it can be proprietary, partnership, p8t.ltd. )ub.ltd.#ther.

8. T51e o" conrac,

It can be hire purchase, lease, and loan.

@. Re%i3enia$ %a#% o" in3ivi3#a$%, i can :e re%i3en In3ian0 non-re%i3en

In3ian0 an3 "orei!n naiona$.

'EHICLE AND FINANCE DETAILS

7. "ustomer buys either ne> car or #%e3 car or re"inance% the car.8. "ustomer has to 2rite car na4e0 4o3e$0 an3 co$or an3 re!i%raion no. "or

#%e3 car%.

@. Invoice 1rice0 "inance a4o#n an3 4ar!in.

. Ten#re0 EMI amount and %ec#ri5 3e1o%i.

B. 7ame of %#11$5 3ea$er.

. )ayment$ either :ookin! or 3i%:#r%e4ent.

=. 4rite the "inance 1ro3#c co3e.

. Finance 3ea$er na4e.

. Na4e o" %a$e% 4an.

7. S2arin! raio.

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PERSONAL DETAILS

1. a. "#$$ na4e o" a11$ican.

b. motherCs maiden name (indi8idual only+.

c. institution name .

. Re%i3enia$Gin%i#iona$Ga33re%%, area, city, pin code, tel.no. *a:, e;mail.

Re%i3enia$ %a#%, co41an50 4or!a!e0 o>ne30 rene3 an3 o2er%.

3. O""ice a33re%%$

O""ice 51e$ company, mort-a-e, o2ned, rented others.

. &dditional address (if any+$

?. De%i!naion$ NNNN. Occ#1aionGna#re o" :#%ine%%N

D. Dae o" :ir2 !en3er 4aria$ %a#%$ bachelor, joint, nuclear, others.

0. !ducation < no of dependents.

E. Inco4e a? PAN no, 3rivin! $icence no. (*or indi8idualOidentificationOre-istrationno. for the company+, voer9% ID no. for indi8idualOsales ta: no.$

F. /ank na4e0 :ranc2 na4e0 an3 aGc no.

1/. Cre3i car3 3eai$%, cre3i car3 no, 3ae o" e?1ir5, i%%#er, 51e,

11. Prior "inance 3eai$% (an5 $oan), in 2i% c#%o4er 2a% o >rie a4o#n"inance30 4on2 or 5ear o" conrac0 an3 c#rren %a#%.

78. Acivi5G %o#rce o" "#n3%Ginco4e ei2er :orro>e3 or o>ne3.

7@. *ro%% ana$ inco4e or !ro%% ann#a$ %a$e%Grecei1%.

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OTHER DETAILS (ONL FOR INSTITUTION)

If an applicant is an institution, so they ha8e to filled some e:tra information.

7. n#4:er 3irecor%G1arner%Gr#%ee%,

8. #n3er c#rren 4ana!e4en %ince (4on2G5ear),

@. na#re o" :#%ine%%

. conrac na4e

B. De%i!naion.

. 12one no.0

=. an3 co41an59% :anker% na4e,

'ARIOUS DEPARTMENTS OF KMPL

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CREDIT DEPARTMENT

KMPL

CREDIT

DEPARTMENT

SALES

DEPARTMENT

OPERATION

DEPATRMENT


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"redit department is thee major department of 5M)6. "ustomerCs credit e8aluation isdone at credit department. & 5M)6 credit officer e8aluates customerCs credit 2orthiness based on the documents submitted by them alon- 2ith the *I (*ield In8esti-ation+ report.& field in8esti-ation officer 8isits customer for additional information lie annual incomeof customer, nature and type of business, information about income ta: and so and so

forth.

If field in8esti-ation officer -i8es positi8e repot about customer to credit department,then and then credit officer appro8es applicantCs proposal for the car loan. "reditdepartment is 8ery careful about their customers. They ha8e to be 8ery careful 2henapplicant is a pitician, la2yer or a police officer. @ecause these type of customer cancreate problems in future in loan installment. Sometimes they use their po2er in bad 2ayand create problems for the company.

SALES DEPARTMENT

Sales department basically consists of t2o major acti8ities. 4holesale and retail sale.

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4holesale fundin- is an internal part of the o8erall fundin- process. ealers needfinance for their day;to;day acti8ities. They can use this facility to order the 8ehicles andspare parts froe the manufacturers. 5M)6 2ith appropriate system company is 2ell positioned 2ith the maret to pro8ide 2holesale finance to most of the dealers of Surat.

There are so many major dealers of 5M)6 in Surat city lie 7ana8ati motors, !mpire,)resident Motors, @lit, esai motors, 5ataria, @ha8ya %onda, @ha8na ford, and hrumotors etc.

Retail sale in an important part of 5M)6. 5M)6 -i8es loan to customer for car purchase, loan for used car and for lease purpose.

OPERATION DEPARTMENT

&ll paper 2or is done at operation department. Sales coordinator is the major part of operation department. In this section, primary data of customer are prepared as salesducats and then it -oes for final chec in operation department.

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#nce the primary sales ducats -o in operation department, operation officer checsducats and prepares final document for installation. If there is some mistae indocumentation, correction can be made here.

&fter completin- the correction process, a-ain ducat -oes for final and last checin- andthen it is installed in computer systems. #nce final installation is completed, no other corrections can be made a-ain.

4hen an applicant or customer is an institution, documentation process is moreimportant compare to indi8idual applicantCs documentation.

SER'ICE INDUSTR

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DEFINATION OF SER'ICES,

& ser8ice is an acti8ity 2hich has some element of intan-ibility associated 2ith thatin8ol8es some interaction 2ith customers or 2ith property in their possession and dosenot result in the transfer of o2nership. & chan-e in condition may occur and productionof ser8ices may or may not be closely associated 2ith a physical product.

&ccordin- to KOTLER < /LOOM, ser8ice as any acti8ity or benefit that one partlycan offer to another i.e. essentially intan-ible and does not result in the o2nership of anythin-. Its production may or may not be tied to a physical product.

ROLE OF SER'ICES IN ECONOM,

Ser8ices are 2idely used by people today in practically all aspects of life from educationto entertainment, finance to fast food, tra8el to telephone, ad8ertisement to amusement par, maret research to maintained ser8ices, retailin- to recreation and so on. Ser8icesno2 a day are increasin-ly bein- used by the corporate as 2ell as the house hold sector.This emphasis on ser8ices and its increasin- use has not happened o8erni-ht. It started inthe /th century especially after the end of the 2orld 2ar P due to lar-e scale destructiondurin- the 2ar, a lot of economy acti8ities had to be carried out to brin- the torn

economies bac on road. This resulted in a number of ne2 projects that fuelled thedemand for financial ser8ices.

CHARACTERISTICS OF CAR FINANCE

AS A SER'ICE

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"ar finance as a ser8ice is different from a -eneral product a8ailable in the maret. It hasinherited the finance company of ser8ice lie$

7. INTE*I/ILIT,

Ser8ices are to a lar-e e:tent abstract and intan-ible. ou can only feel or e:periencefinancin- as a ser8ice but can not see it or touch it. !.-. 2hen you buy a %onda "itythrou-h finance althou-h %onda "ity is intan-ible, the finance and con8enience you -etout of it is intan-ible.

8. HETRO*ENIT,

The human element is 8ery much in8ol8ed in pro8idin- and renderin- ser8ices and thismaes standardiation a 8ery difficult tas to achie8e. In finance company e.-. thecustomer care lady -i8es your 7on #bjection "ertificate or Interest Statement may not beas sufficient as a sales person 2ho ser8ed you 8ery efficiently and you ha8e spend moretime for the ser8ices. This is despite the fact that in finance company rules and procedureha8e bein- laid do2n to reduce the role of human element and ensure ma:imumefficiently by use of the computer and telephone. In a company the atmosphere is -oodand clean the ser8ice pro8ided are efficient but it is the people interactin- 2ith customer 2ho mae all the difference bet2een a fa8orable and unfa8orable perceptions of the

company.

@. INSEPARA/ILIT,

Ser8ices are typical produced and consumed at the same time 2ith customer penetrationin the process. In most cases a "ar *inancin- ser8ice cannot be separated from a firm pro8idin- it as the customer has to -o to the finance company to a8ail its loan or ser8ice.@ut -radually the le8el of imp arability is reducin- due to increasin- affluence of internetand use of net finance calculator or direct maretin-.

. O&NERSHIP$

4hen you buy a product you become its o2ner be it a car scooter. In case of ser8ices youmay pay for its use but you may ne8er o2n it. *or e.-. in case of financin- the payment in

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form of ser8ice char-es and interest is not purchase but only for these use or access tofacilities lie loan.

RELATON /ET&EEN FINANCE COMPAN

AND CUSTOMER

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In the ser8ice sector both institutional and indi8idual customers may enter in to acontinuin- relationship 2ith ser8ices pro8iders and opt for or recei8in- ser8icescontinually. In financin- the relationship 2ith the customer is on the basis of$

(A). NATURE OF SER'ICE DELI'ER,

In financin- there is most often a continuous deli8ery of ser8ices.

(/). TPE OF RELATIONSHIP /ET&EE SER'ICE

OR*ANISATION AND ITS CUTOMERS,

In financin- the finance companies ha8e a member relationship 2ith the customers.

E6TENT OF CUSTOMASATION ANDJUD*EMENT

& critical issue for the ser8ice mareters is to decide to 2hat e:tent the ser8ice offer should be customied, for financin- a hi-h customiation le8el of ser8ice is re>uired,2hile usually the jud-ment the cost of custom;made ser8ice 8ersus the standard ser8ice.

E'ALUATION OF CAR FINANCE SER'ICE

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Till the mid E/Cs the potential car o2ner had to contend 2ith a lon- 2aitin- period andmoreo8er "ar =*inance 2as unheard of. The F/Cs 2ith the ad8ent of consumerism = brou-ht in a dramatic chan-e 2ith the risin- aspiration of the bur-eonin- middle class, anincrease in disposable income due to the -ro2in- number of double income families, achan-e in attitude to2ards debt, and increasin- competition in the automobile business,

all combin- to mae "ar *inance one of the hottest business of the last fe2 years. )eopletoday, lie to o2n a car >uicly in life and chan-e it often too. It is no lon-er percei8ed asan asset. Good infrastructure also boosts sales.

4ith the liberation of the Indian !conomy se8eral cars majors includin- Mercedes @en,Mitsubishi, %onda, General Motors, %yundai, Toyota, etc. and recently Soda is all set toenter the passen-er maret, soon to be follo2ed by a 2ide ran-e of car loan scheme. Thelast couple of years ha8e 2itnessed intense competition 2ithin the "ar *inance Industry.Today all it taes is a telephone call to ha8e an army of salesman tryin- to sell you their schemes.

"ar finance can be obtained from a number of sources, mainly 7on @anin- *inance"ompanies (7*@"Cs+, Multinational @ans (M7@Cs+, 7ationalied @ans, "ooperati8e@ans, and the "ar Manufacturin- "ompanies themsel8es. There are number of dealers promoted finance companies and 7@*"Cs 2ith "ar Manufacturin- tie ups such as 5ota Mahindra prime 6td., Maruti "ountry2ide, and GM&";T)*" etc.

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A STUDY OF SERVICES

PROVIDED BY

KOTAK MAHINDRA PRIME

LTD.

KOTAK MAHINDRA PRIME LTD.

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5ota mahindra prime ltd. 2as incorporated on *ebruary Eth 1FFD. #perationscommenced on 7o8ember 1st 1FFD. In financial year //0;//E 5M)6 2ill complete itsele8en successful year of operation. It started 2ith branches at D locations in 1FFD and isno2 present at ? locations across the country throu-h its branches and representati8eoffices. 5M)6 is a joint 8enture bet2een ota mahindra prime ltd. &nd *ord "redit

International Inc. 'S& (*"II+. The share holdin- pattern of the company is 5M)6 D/and *"II 9/.

5M)6 is a fla-ship of the 5ota Mahindra -roup, IndiaCs leadin- and most di8ersifiedfinancial ser8ices -roup. Is acti8ities include asset financin-, in8estment banin-, mutualfunds, life insurance, stoc broin- = distribution and search, 8enture capital, banin-sector and retail banin-. *"II is a fully o2ned subsidiary of *ord Motors "redit"ompanyQ the 2orld lar-est dedicated automobile financer. *ord *inancial Ser8ices = theautomoti8e finance 2in- of the *ord -roup mana-es assets 2orth o8er 109 billion(Rs.E, /,/// corers+ 2orld2ide.

The company finances all non;ford passen-er 8ehicles throu-h its direct sales force andchannel partners and *ord "redit 5ota Mahindra finances only ford products. "ompanyhas t2o main re8enue streams, retail finance and dealer credit. The Reser8e @an of Indiaclassifies 5M)6 as a hi-her purchase finance company.

SER'ICE MARKETIN* MI6 OF

KOTAK MAHINDRA PRIME LTD.

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Maretin- mi: concept is a 2ell established tool used as a structure by mareters.Maretin- mi: consists of 8arious elements of maretin- pro-rams 2hich ha8e to beconsidered in order to successfully implement the maretin- strate-y and positionin- in

the 2ide maret. )roduct maretin- that has four basic maretin- mi:es elements 8i.

)rice, )lace and )romotion. !ach element in the ser8ice mi: has an impact on all other elements. &ll these elements are used to support each other, to reinforce the positionin-of the product and to deli8er appropriate ser8ice >uality to achie8e a competiti8ead8anta-e.

& brief e:planation of all the )Cs of ser8ice maretin- mi: follo2s$

1. )R#'"T.. )RI"!.3. )6&"!.9. )R#M#TI#7.

PRODUCT

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& product is an o8erall concept of objects or pro-ress 2hich pro8ides some 8alue tocustomersC 8i. product and ser8ices. It means term product includes a physical productand a ser8ice.

"ustomers are not buyin- -oods or ser8ices but they are really buyin- specific benefitsand 8alues from the total offerin- are NN

1. The core or -eneric productOser8ice.. !:pected productOser8ice.3. &u-mented productOser8ice.9. )otential productOser8ice.

Ser8ice product thus is a comple: set of 8alue satisfaction and buys ser8ices to sol8e problems and mae their life simple and lucid. Ser8ice mareters are in8ol8ed is aconstant research and de8elopment for the inno8atin- the e:istin- productsOser8ices inorder to attain a cuttin- ed-e o8er the competitors.

5ota Mahindra )rime 6td representati8es 2ill contact at the earliest to understand their re>uirements in terms of 8ehicles, tenure of finance, amount financed and preference of finance scheme. They can choose of the 3 products.

7. HIRE PURCHASE$

In this product offer, company 2ill buy the car and customer 2ill use it under hire purchase a-reement 2ith 5M)6. The o2nership 2ill be transferred to customer after

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customer pays the last rental. The benefits for him as a consumer in this product isthat customer can treat the hire char-es (part of the rental+ paid by customer as ane:pense in their boos of account and therefore e8entually reduce the burden of ta:le8ied on customer. epreciation can be claimed for the purpose, as applicable.

8. LOAN,

In this offer, customer can buy the car from the dealer 2ith the loan amountsanctioned by 5M)6. The car 2ill feature as an asset in customerCs boos of account,2hich 2ill help him to claim depreciation for ta:ation purpose. "ustomer can alsotreat the interest component of the rentals as an e:pense.

@. LEASE,

If customers opt for this product, the car 2ill o2n by 5M)6 and 2ill be leased tocustomer on rent. "ustomer can a8ail of ta: benefits, as entire rental 2ill beaccounted in their boos as an e:pense. The lease product is beneficial for profitmain- corporate.

'ARIOUS SCHEMES OF KMPL

7. MONE MAR*IN SCHEME,

In this scheme, 2e finance your car for up to F/ for certain models. ou 2ill ha8e to-i8e us a do2n payment for the mar-in amount, (in8oice 8alue minus *inance amount+.

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The financed amount can be repaid as per your con8enience in tenures of 1 months to D/months at your con8enience either throu-h !>uated monthly Installments or a differential plan that 2e can tailor for you to minimie your outflo2.

8. SET UP SCHEME,

In this scheme, the !MI increases after e8ery year, si: month or >uarter dependin- uponthe customer needs. This is best suited for people 2ho 2ant to e:perience the lu:ury of the car and 2ants to pay in line 2ith their -ro2in- income startin- from 6o2 !MI in theearly period of repayment.

@. LO& EMI /ALLON SCHEME,

In this scheme 1/;? of the cost of the car is paid as last !MI, thereby reducin- the!MI for the entire tenure. The scheme is for customers 2ho 2ant to dispose off their 8ehicle at the end of the tenure but are looin- at affordable !MICs durin- the tenure

LO& EMI SCHEME,

In this scheme, you mae the payments of a fe2 monthly installments upfront. The balance is payable throu-h !>ual Monthly Installments. 4ith the ad8ance installmentsyou can repay your loan much faster.

B. SPECIAL SCHEMES OFFERED / KMPL,

5M)6 offers 1// finance at o interest also on certain car models. These schemes are based on certain terms and conditions and normally facilited by 5M)6 tie;ups 2ithmanufacturers.

SPECIAL PRODUCTS

5M)6 pro8ides basically four types of special products.

7. USED CAR FINANCE,

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5M)6 is also financin- on the used or old car. 4here customer has to choose old car from the maret or from the companyCs authoried used car dealer. That car shouldnot be se8en years old. In this scheme customer ha8e to pay ? mar-in amount of the 8aluated price of the car and rate of interest of this scheme is >uit hi-her then ne2car scheme.

8. REFINANCE$

In this scheme 5M)6 refinance on the car 2here o2nership of the car has notchan-ed. *or this scheme customer should be e:istin- customer of 5M)6 2ithe:cellence repayment record. In this scheme customer -et loan a-ainst his car.

@. PERSONAL LOAN,

This is a facility scheme for e:istin- customer of 5M)6. 4here customer -ets cashloan of D////Rs. To /////Rs. (as per companyCs term+ for this scheme customer must ha8e e:cellence repayment record.

. &HOLESALE FUNDIN*,

4holesale fundin- is an internal part of the o8erall fundin- process. ealers needfinance for their day;to;day acti8ities. They can use this facility to order the 8ehiclesand spare parts from the manufacturers. 5M)6 2ith appropriate system company is

2ell positioned 2ith the maret to pro8ide 2holesale finance to most of the dealers of India.

PRICIN*

)ricin- is a 8ery important element in the maretin- mi: for it is the only, 2hich produces re8enue all other elements bein- cost dri8en. )ricin- decisions aresi-nificant in determinin- the 8alue for the customer and to play a role in the buildin-of an ima-e for the ser8ice. Ser8ice firms need to use pricin- more strate-ically tohelp -ain competiti8e ad8anta-e.

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The -uidelines for pricin- policy and pricin- strate-ies to attract business can befound in the plan. )ricin- is just one plan for maretin- mi:, 2hich is used to supportand blend the other elements. Settin- price is not a re-ular e:ercise and usually donet2ice a year or 2ith any economics chan-e.

)ricin- a finance facilityOser8ices is >uite difficult as customers re-ard financecompany and finance company ser8ices as 8ery much a lie this increase theimportance of competitorCs price consideration 2hile decidin- o2n prices.

PRICIN* POLIC,

&lthou-h pricin- policy taes its direction and its deri8ed from the corporate planthere are other factors 2hich ha8e to be taen into account. The t2o main factors to be considered 2hile pricin- a ser8ice are the le8els of demand and similar competiti8e ser8ice. #ther thin-s considered are maret sectors to be penetrated of the maret attracti8eness. 5M)6 pro8ides hi-her >uality ser8ice so char-es hi-her prices.

PRICIN* POLIC ALTERNATI'ES,

#nce the basic pricin- objecti8es ha8e been considered and a re8ie2 made of demand, cost, competitors, price and costs and other rele8ant factors, the ser8icemareters need to consider the method by 2hich prices 2ill be set.

Such methods 8ary considerably in the ser8ices sector and typically include thefollo2in-$

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COST PLUS PRICIN*,

%ere the liely cost is calculated and a standard mar up is added to arri8e at the prices.

5M)6 rely upon this method 2hereby the cost is found out and a standard marup isadded to deri8e the price. In case of repayment schedule, a-reement copy etc lielycause of manufacturin-, are found out a reasonable rate is added to arri8e at thechar-es.

PLACE

The location and channel used to supply ser8ices to tar-et customers are t2o eydecision areas. 6ocation and channel decisions in8ol8es considerin- ho2 to deli8er ser8ice to the customer and 2here this should tae place. The 2ay in 2hich the major finance companies distribute ser8ices is 2ithout doubt one of the most discussedaspect of maretin-, ne2 technolo-y is brin-in- 2ith it ne2 2ays to distributeser8ices and openin- up ne2 marets.

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urin- the ne:t fe2 years all the finance companies 2ill slim do2n their net2ors particularly to contain costs but also in reco-nition that maret re>uirements are alsochan-in- as a result of the increasin- automation of money transmission ser8ices.

Moreo8er the types of distribution channel is also chan-in- as the major financecompanies buy estates, upon up branches in cities, creates fully automated financin-offices and are currently introducin- corporate offices desi-ned to ser8ice the mediumto lar-e corporate customers.

)lace also has important as the en8ironment in 2hich the ser8ice is deli8ered and ho2it is deli8ered are parts of the percei8ed 8alue and the benefits of the ser8icemareters should see to de8elop appropriate ser8ice deli8ery approaches that yieldcompetiti8e ad8anta-e for their firms.

CONSIDERATION &HEN DISTRI/UTIN*

FINANCIAL SER'IES

Maretin- decisions relatin- to the distribution so ser8ices are ine:tricably lined2ith ho2 the other elements of the maretin- mi: are applyin-. In or-aniation suchas a major retail finance company, distribution of ser8ices can be 2ithin -eo-raphicaloption applied to the financin- industry and it 2ill remain a major distribution system

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in future but the formal structure style and atmosphere 2ill undoubtedly chan-e.Some financin- ser8ices are inseparable from supplier i.e. sanctionin- of the creditre>uired personal contact bet2een the finance company or credit officer and prospecti8e customer.

5M)6 has around 9 branches spread o8er 9 major cities in India. "ompany ha8in-9 branches predicts a -ood distribution net2or. &part from company has introduceddirect maretin- associate or direct sales associates and car dealer itself to deli8er the products. In Surat, 5M)6 is present at hru8 Motors, @ha8ya %onda, and 7ana8atiMotors and other car dealer.

PROMOTION

The promotion element of the ser8ices maretin- mi: forms a 8ital role. )romotion

adds si-nificant and tan-ibility to ser8ices and helps customer mae a better e8aluation of a ser8ices offer.

)romotion in financin- occurs at t2o le8els. The first is throu-h central or head officedepartment or di8isions, 2hich are responsible of the major ad8ertisin- bud-et. Thehead office controls the publicity and the public relation acti8ities. The second le8elfor promotional acti8ity is in hi-h street branches 2here mana-ers are responsible for

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supportin- their maretin- objecti8es 2ith direct mailin-s, branch displays, banners, personal sellin-, and other forms of promotion that mi-ht pro8e cost effecti8e.

PROMOTION MI6

The 2ays a finance company communicates are thou-h one or a combination of thefollo2in- channels$

1. )ress ad8ertisements.. )rofessional journals, trade publications, ma-aines.3. !:hibitions and hoardin-s.9. )ublic relation, publicity, sponsorships.?. 4ord of mouth.D. Relationship maretin-.0. Tele8ision.

7. PRESS AD'ERTISEMENT,

)ress ad8ertisement may either be in local or national ne2spapers. 'sually financecompanies ad8ertise t2ice in a 2ee in local ne2spaper and ad8ertise at a time 2henany ne2 scheme has been introduced in national ne2spaper. The choice of ne2spaper is decided on the basis of customer profile, the reach of the ne2spaper, area 2here thene2spaper is circulated.

8. PROFESSIONAL JOURNALSGMA*AINES,

"ompanies usually ad8ertise in journals published by professional associations, business ma-aines, and trade associations. Top;notch business e:ecuti8es, 2homainly from the customer of the company, read such as ma-aines. 5M)6 is major

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finance companies that usually ad8ertise in trade professional journals lie @usinessToday, @usiness India, &uto monitor and Monitorin- etc.

@. E6HI/ITIONS AND HOARDIN*S,5M)6 usually participate in e:hibition or-anied by trade associates. @illboard, posters and hoardin-s are fi:ed at prime locations of the city. "ompany also put their )#) and other displays at car sho2rooms.

. PU/LIC RELATIONS0 PU/LICI0 SPONSORSHIPS,

)ublic relation means a deliberate planned and sustained effort to establish andmaintain mutual understandin- bet2een the or-aniation and its public. )ublic

relation communication should be authentic to encoura-e trust and impact. )ublicityis securin- of editorial space as di8orced from paid space form in all media, read,8ie2ed or heard by finance companies customers or potential customers for a specific purpose of assistin- in metin- of sales -oals. Sponsorship 8aries considerably amon-finance companies. Some sponsor sports, arts and other sponsor educational pro-rams, >ui etc.

5M)6 bein- the oldest car finance company in India hardly needs any public relationand public support. %o2e8er it comes forth to sponsor 8arious seminar pro-ramsor-anied by association etc. 5M)6 as a part of public relation sends a copy of >uarterly company result statement account details, -reetin-s and broachers of finance schemes to the customers.

B. &ORDOF MOUTH,

#ne of the most distincti8e features of promotion in ser8ice business is the -reater importance of referral and 2ord of mouth communication. The satisfied customer 2illshare his e:perience 2ith different potential customer 2ho mi-ht than try to transact2ith the company. %o2e8er customers are dissatisfied tend to tell more than t2ice asmany people of their poor e:periences than 2ho are satisfied relate -ood e:periences.

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5M)6 has created a positi8e 2ord of mouth as they ha8e -ood customer careapproach. & separate counter of customer ser8ice has been paced in the company and5M)6 has e:cellence po2er to retain their 8alued customers and main- them anad8ocate of the company.

. RELATIONSHIP MARKETIN*,

5M)6 introduced the term relationship maretin- only. It is relati8ely ne2 ande8ol8in- concept.

The emphasis of the company is mo8in- from a transactional focus to a relationshipfocus 2ith an aim of term customer and car dealer relation. #8er and abo8e

customers and car dealers, the or-aniation is busy buildin- endurin- relationship2ith other e:ternal parties includin- suppliers, recruitment a-encies and -o8ernmentetc.

5M)6 relies to a -reat e:tent on relationship maretin-. They send to the customersre-ularly a copy of their account statements, broachers, feed bacs, pri8ile-e lettersand other information boolets of ne2 scheme.

=. TELE'ISION,

5M)6 ad8ertise at a time 2hen any ne2 scheme has been introduced. @ut 5ota Mahindra Group of "ompanies ad8ertises daily in different TV channels. !.-. 5ota Mahindra sponsors A&aj 5i @aatB, A4e the )eopleB etc. on Star )lus. The -roup of companiesC ad8ertisement sho2s its different product. It is also -i8in- commercials2hen a major e8ent is -oin- on lie "ricet matches. #m 5ota Mahindra 2on GoldMedal for best TV ad8ertisement for the year //1;//.

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A

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STUD OF SER'ICES

PRO'IDED /ICICI

ICICI /ANK

INTRODUCTION,

I"I"I @an is IndiaLs second;lar-est ban 2ith total assets of Rs. 3,99D.?E billion ('S0F billion+ at March 31, //0 and profit after ta: of Rs. 31.1/ billion for fiscal //0.I"I"I @an is the most 8aluable ban in India in terms of maret capitaliation and israned third amon-st all the companies listed on the Indian stoc e:chan-es in terms of free float maret capitaliation. The @an has a net2or of about F?/ branches and3,3// &TMs in India and presence in 10 countries. I"I"I @an offers a 2ide ran-e of banin- products and financial ser8ices to corporate and retail customers throu-h a

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8ariety of deli8ery channels and throu-h its specialied subsidiaries and affiliates in theareas of in8estment banin-, life and non;life insurance, 8enture capital and assetmana-ement. The @an currently has subsidiaries in the 'nited 5in-dom, Russia and"anada, branches in Sin-apore, @ahrain, %on- 5on-, Sri 6ana and ubai International*inance "entre and representati8e offices in the 'nited States, 'nited &rab !mirates,

"hina, South &frica, @an-ladesh, Thailand, Malaysia and Indonesia. #ur '5 subsidiaryhas established a branch in @el-ium.

I"I"I @anLs e>uity shares are listed in India on @ombay Stoc !:chan-e and the 7ational Stoc !:chan-e of India 6imited and its &merican epositary Receipts (&Rs+are listed on the 7e2 or Stoc !:chan-e (7S!+.

HISTOR,

I"I"I @an 2as ori-inally promoted in 1FF9 by I"I"I 6imited, an Indian financialinstitution, and 2as its 2holly;o2ned subsidiary. I"I"ILs shareholdin- in I"I"I @an 2asreduced to 9D throu-h a public offerin- of shares in India in fiscal 1FFE, an e>uityofferin- in the form of &Rs listed on the 7S! in fiscal ///, I"I"I @anLs ac>uisitionof @an of Madura 6imited in an all;stoc amal-amation in fiscal //1, and secondarymaret sales by I"I"I to institutional in8estors in fiscal //1 and fiscal //. I"I"I 2asformed in 1F?? at the initiati8e of the 4orld @an, the Go8ernment of India andrepresentati8es of Indian industry.

The principal objecti8e 2as to create a de8elopment financial institution for pro8idin-medium;term and lon-;term project financin- to Indian businesses. In the 1FF/s, I"I"Itransformed its business from a de8elopment financial institution offerin- only projectfinance to a di8ersified financial ser8ices -roup offerin- a 2ide 8ariety of products andser8ices, both directly and throu-h a number of subsidiaries and affiliates lie I"I"I@an. In 1FFF, I"I"I become the first Indian company and the first ban or financialinstitution from non;apan &sia to be listed on the 7S!.

&fter consideration of 8arious corporate structurin- alternati8es in the conte:t of theemer-in- competiti8e scenario in the Indian banin- industry, and the mo8e to2ardsuni8ersal banin-, the mana-ements of I"I"I and I"I"I @an formed the 8ie2 that themer-er of I"I"I 2ith I"I"I @an 2ould be the optimal strate-ic alternati8e for bothentities, and 2ould create the optimal le-al structure for the I"I"I -roupLs uni8ersal banin- strate-y. The mer-er 2ould enhance 8alue for I"I"I shareholders throu-h themer-ed entityLs access to lo2;cost deposits, -reater opportunities for earnin- fee;based

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income and the ability to participate in the payments system and pro8ide transaction; banin- ser8ices. The mer-er 2ould enhance 8alue for I"I"I @an shareholders throu-ha lar-e capital base and scale of operations, seamless access to I"I"ILs stron- corporaterelationships built up o8er fi8e decades, entry into ne2 business se-ments, hi-her maretshare in 8arious business se-ments, particularly fee;based ser8ices, and access to the 8ast

talent pool of I"I"I and its subsidiaries. In #ctober //1, the @oards of irectors of I"I"I and I"I"I @an appro8ed the mer-er of I"I"I and t2o of its 2holly;o2ned retailfinance subsidiaries, I"I"I )ersonal *inancial Ser8ices 6imited and I"I"I "apitalSer8ices 6imited, 2ith I"I"I @an. The mer-er 2as appro8ed by shareholders of I"I"Iand I"I"I @an in anuary //, by the %i-h "ourt of Gujarat at &hmedabad in March//, and by the %i-h "ourt of udicature at Mumbai and the Reser8e @an of India in&pril //. "onse>uent to the mer-er, the I"I"I -roupLs financin- and banin-operations, both 2holesale and retail, ha8e been inte-rated in a sin-le entity.

MARKET SE*MENTATION OF

ICICI

epositors consists of 8ery small sa8ers to 8ery bi- institutional depositors but the ban prefers to build al2ays core deposits, 2hich 2ill not fly a2ay o8erni-ht onaccount of minor 8ariation in rates. *or reasons of profitability and cost I"I"I prefer lo2 costOno cost deposits lie S@, "urrent &ccounts. eposits from personalse-ments are al2ays encoura-ed and hi-h 8olumes, hi-h cost deposits are normallydiscoura-ed. In deposit bud-etin- the I"I"I normally aims to adopt the prudentmethod of Sa8in- &ccount, "urrent &ccount and Term eposits.

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In deployment of funds in ad8ance I"I"I ensures the safety and security and 2ith theaim of attractin- business at )6RK. 7o2 focus is on personal se-ment lie housin-loan etc. 8ery hi-h e:posures are done 8ery selecti8ely. Gro2th centers and potential.

The I"I"I has formulated special schemes to meet loan re>uirements of indi8iduals.

SER'ICE MARKETIN* MI6 OF

ICICI

The maretin- mi: represents the factors, 2hich need to be considered 2hendeterminin- the ser8ices firmCs strate-y. Maretin- mi: consists of e8erythin- thefirm can do to influence the demand for its products. *our )Cs of ser8ice maretin-are as under$

1. )R#'"T.. )RI"!.3. )6&"!.9. )R#M#TI#7.

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PRODUCT

I"I"I pro8ides a 2ide ran-e of ser8ices to its 8arious customers se-ments lie %omeloans, "ar loans, T2o;2heeler loans, )ersonal loans, 6ife Insurance and other banin-ser8ices. @ut I"I"I is 8ery a--ressi8e in "ar *inance.

I"I"I representati8es 2ill contact customers at the earliest to understand their

re>uirements in terms of 8ehicles, tenure of finance, amount financed and preference of finance scheme. They can choose any of the 3 products.

7. HIRE PURCHAES,

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In this product offer, company 2ill buy the car and customer 2ill use it under hire purchase a-reement 2ith I"I"I. The o2nership 2ill be transferred to customer after customer pays the last rental. The benefits for him as a consumer in this product is thatcustomer can treat the hire char-es (part of the rental+ paid by customer as an e:pense intheir boos of account and therefore e8entually reduce the burden of ta: le8ied on

customer. epreciation can be claimed for the purpose, as applicable.

8. LOAN,

In this offer, customer can buy the car from the dealer 2ith the loan amount sanctioned by I"I"I. The car 2ill feature as an asset in customerCs boo account, 2hich 2ill help toclaim depreciation for ta:ation purpose. "ustomer can also treat the interest componentof the rentals as an e:pense.

@ LEASE,

If customers opt for this product, the car 2ill be o2ned by I"I"I and 2ill be leased tocustomer on rent. "ustomer can a8ail of ta: benefits, as entire rental 2ill be accounted intheir boos as an e:pense. The lease product is beneficial for profit main- corporate.

This -i8e schemes can be classified broadly in to t2o types$

7. MONE MAR*IN SCHEME,

In this scheme, company part finance customer car from D? to F/ for certain models."ustomer 2ill ha8e to -i8e them a do2n payment for the mar-in amount. The financedamount can be repaid at customer con8enience either throu-h e>uated installments or adifferential plan that company can tailor for customer minimie their outflo2.

8. SPECIAL SCHEMES OFFERED / ICICI,

I"I"I offers 1// finance;at / interest also on certain car models. These schemes are based on certain terms and conditions and normally facilited by I"I"I tie;ups 2ith

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manufacturers. I"I"I offers / interest in certain products for one;year scheme as itsrate of interest is lo2 and commission is >uite hi-h in the maret.

SPECIAL PRODUCTS

USED CAR FINANCE,

I"I"I is also financin- on the used or old car. 4here cutomer has to choose old car fromthe maret or from the companyCs authoried used car dealer. That car should not bese8en years old. In this scheme customer ha8e to play / mar-in amount of the8aluated price of the car and rate of interest of this scheme is >uite hi-her than ne2 car

schemes.

REFINANCE,

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In this scheme I"I"I refinance on the car 2here o2nership of the car has not chan-ed.*or this scheme customer should be e:istin- of I"I"I as 2ell as any finance company2ith e:cellent repayment record. "ash customer can also a8ail this scheme. In thisscheme customer -et loan a-ainst his car.

&HOLESALE FUNDIN*,

4ith the open economy of India noCs of forei-n car companies are set their manufacturin- basis in India. 4holesale fundin- is to help dealer to mana-e thein8entory.

PRICE

)ricin- is a 8ery important element in the maretin- mi: for it is the only, 2hich productsre8enue all other elements bein- cost dri8en. )ricin- decisions are si-nificant indeterminin- the 8alue for the customer and to play a role in the buildin- of an ima-e for the ser8ice. Ser8ice firms need to use pricin- more strate-ically to help -ain competiti8ead8anta-e.

)ricin- a finance facilityOser8ices is >uite difficult as customers re-ard finance companyand finance company ser8ices as 8ery much a lie this increase the importance of competitorCs price consideration 2hile decidin- o2n prices.

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I"I"I has >uite lo2 rate of interest for car finance as 2ell as other financial ser8ices. &sit is IndiaCs second lar-est ban 2ith total assets o8er Rs. 1 trillion and a net2or of about?9/ branches and offices. I"I"I also offer hi-h commission on the loan amounts to itsdealer, M& and broers.

PLACE

I"I"I has a hu-e net2or of o8er ?9/ branches and offices spread o8er the country.I"I"I bein- a lar-est pri8ate ban, the ban -ro2th centers are identified. @ut I"I"I isdoin- car finance in E cities of India.

I"I"I has appointed 2ell;trained e:ecuti8es for counselin- the prospecti8e customers onfinancial matters. It belie8es that in todayCs competiti8e 2orld to sur8i8e, constant up-radation is must. I"I"I is a8ailable at leadin- car dealersQ company also -i8es franchisesand maes direct maretin- associates. In Surat, I"I"I is present at nana8ati motors,dhru8e motors, bha8ya %onda etc.

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PROMOTION

)romotion adds si-nificant and tan-ibility to ser8ices and help customers maes a better e8aluation of the ser8ice offer. I"I"I has a hu-e net2or all o8er the country. Its branchesO e:tension counters or &TMs spread across the country. These ser8e as the retail

outlets. The main 2ays in 2hich I"I"I communicate 2ith the customers are as under$

1. )ress ad8ertisements.. )rofessional journals, trade publications, ma-aines.3. !:hibitions and hoardin-s

??


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9. )ublic relation, publicity, sponsorship.?. Relationship maretin-.D. Tele8ision.0. &TMs.

7. PRESS AD'ERTISEMENTS,

)ress ad8ertisement may either be in local or national ne2s papers. 'sually I"I"Iad8ertise t2ice in a 2ee 2ith its franchise in local ne2spaper. The choice of ne2spaper is decided on the basis of customer profile, the reach of the ne2spaper, area 2here thene2spaper is circulated.

8. PROFESSIONAL JOURNALSGMA*AINES,

I"I"I usually ad8ertise in journals published by professional associations, businessma-aines, and trade associations. Top;notch business e:ecuti8es, 2ho mainly from thecustomer of the company, read such ma-aines, I"I"I is major finance companies thatusually ad8ertise in trade professional journals lie @usiness Today, India Today, and#8erdri8e etc.

@. E6HI/ITIONS < HOARDIN*S,

I"I"I usually participate in e:hibition or-anied by trade associates. @illboard, postersand hoardin-s are fi:ed at prime locations of the city. "ompany also put their )#) anddisplays at car sho2rooms.

. PU/LC RELATIONS0 PU/LICIT0 SPONSORSHIP,

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)ublic relation means a deliberate planned and sustained effort to establish and maintainmutual understandin- bet2een the or-aniation and its public. )ublic relationcommunication should be authentic to encoura-e trust and impact.

)ublicity is securin- of editorial space as di8orced from paid space form in all media,read, 8ie2ed or heard by finance companies customers or potential customers for aspecific purpose of assistin- in metin- of sales -oals.

Sponsorship 8aries considerably amon- finance companies. Some sponsor sports, artsand others sponsor educational pro-rams, >ui etc.

B. RELATIONSHIP MARKETIN*,

The emphasis of the company is mo8in- from a transactional focus to a relationship focus2ith an aim of lin- term customer and car dealer relation. #8er and abo8e customer andcar dealers, the or-aniations are busy buildin- endurin- relationship 2ith other e:ternal parties includin- suppliers, recruitment a-encies and -o8ernment etc.

. TELE'ISION,

I"I"I fre>uently ad8ertise in numbers of TV channels. Mr. &mitabh @achchan isfeaturin- in I"I"ICs add. @ut there is no specific TV ad8ertisement for "ar *inance.&d8ertisement only sho2s I"I"I -roup and its ser8ices.

=. ATM%,

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I"I"I has 1/// &TMs (&utomatic Teller Machine+ al o8er the country. "ustomer can -etinformation and in>uire for car finance of I"I"I throu-h its &TM.

A

COMPARATI'E

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STUD OF SER'ICES

PRO'IDED /

KMPL


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I"I"I is one of the lar-est pri8ate bans in India. It ahs lot of professionalism in itsser8ices. @ut t has made a 2elfare attitude to2ards consumers. 4e shall no2 compare theser8ices pro8ided by the finance companies and their approaches on the basis of all four )Cs of Maretin-.

*ENERAL COMPARISION

CREDIT E'ALUATION,

5M)6 is 8ery conser8ati8e in credit. "redit officer e8aluate customer 2orthiness basedon his documents. 7ormally 5M)6 re>uire >uite amount of documentation for credit. &s5M)6 is a safe player it has 8ery stron- credit policy. ifferent types of customersre>uire different documentation sho2n belo2$

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ocument professionals

Salariedconcerns

Self employed

proprietary partnership 6tdOp8t.ltdcompanies

%'* trust

Salary slips

*orm 1D

&dd. proof

Si-n proof

)uires >uite lo2 number ofdocumentation than 5M)6$

ocument professionals

Salariedconcerns

Self employed

proprietary partnership 6tdOp8t.ltd

companiesSalary slips

*orm 1D

&dd. proof

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Si-n proof

)uirin- >uite more documentation than I"I"I. I"I"I is not fundin- to %'*and Trust. &s 5M)6 has stron- credit e8aluation delin>uency le8el than I"I"I and other car finance companies. "redit e8aluation is most important part in this industry.

FUNDIN* NORMS

&s 5M)6 belie8in- in safe business, it has >uite stron- fundin- norms on the 8ehicles.ifferent 8ehicles ha8e different mar-in norms as per tenure.

M#!6 1M#7T%S

9M#7T%S

3DM#7T%S

9EM#7T%S

D/M#7T%S

E// STOH 1/ 1/ 1? 1? /

#M7I 1/ 1? 1? / ?

D


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!7 6H,S&7TR#,)&6I#1.,.S4I*T

1/ 1/ 1/ 1? /

!7 VH,S&7TR# GS,

)&6I# 1.D

1/ 1? 1? / ?

I7I"& )TR6,'7# )TR6

1/ 1? 1? ? ;

"IT, &""!7T,!ST!!M, "#RS&

1/ 1? 1? / ?

6!7"!R,@&6!7#, &STR&,

1/ 1? 1? ? ?

&""#R,S#7&T&, "IVI",S5#&,#)TR&

1/ 1? 1? ? ?

S!I7& 1? / ? ; ;

'7# !IS!6 1? / ? ; ;

I7I"& !IS!6 1? 1? / ; ;

M!R"!!"@!7

1? 1? / ? 3/

U'&6IS,I77#V&,S'M#, T&V!R&

1/ 1? 1? / ?

IM)#RT!V!%I"6!S

1? / 3/ ; ;

'S! "&RS 1? / 3/ ; ;

&s I"I"I belie8in- in 8olumes, it has >uite liberal fundin- norms on 8arious 8ehicles.

M#!6 1M#7T%S

9M#7T%S

3DM#7T%S

9EM#7T%S

D/M#7T%S

E// STOH 1/ 1/ 1/ 1/ 1/

#M7I 1/ 1/ 1/ 1/ 1?

!7 6H,S!7TR#,)&6I#1.,.S4I*T

1/ 1/ 1/ 1/ 1?

!7 VH,S&7TR# GS,)&6I# 1.D

1/ 1/ 1/ 1/ 1?

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I7I"& )TR6,'7# )TR6

1/ 1/ 1/ 1/ 1?

"IT, &""!7T,!ST!!M, "#RS&

1/ 1/ 1/ 1/ 1?

6!7"!R,

@&6!7#, &STR&,

1/ 1? 1? ? ?

&""#R,S#7&T&, "IVI",S5#&,#)TR&

1/ 1/ 1/ 1? /

S!I7& 1? / ? 3? ;

'7# !IS!6 1? / / ? ?

I7I"& !IS!6 1? 1? / ? ;

M!R"!!"@!7

1/ 1? 1? / ?

U'&6IS,I77#V&,S'M#, T&V!R&

1/ 1/ 1? / ?

IM)#RT!V!%I"6!S

1? / 3/ ; ;

'S! "&RS 1? / 3/ ; ;

I"I"I can -et 8olumes by the help of its fundin- norms.

CUSTOMER SER'ICE

5M)6 has dedicated car finance company since last 1E years. "ustomer ser8ice is paramount objecti8e of 5M)6. @ranches ha8e customer ser8ice representati8es 2ho pro8ide timely ser8ices to any >uery as re>uired. There is a "entral "ustomer Ser8ice cellat the head office to monitor and mana-e all customer related matters includin- lar-e

comparati8e relationship. In financial year ///;//1 5M)6 2as rated third amon- &uto*inance Ser8ice Sector in )o2er &sia;)acific. 5ota Mahindra )rime 6td. has beena2arded the Voice of "ustomer a2ard for A@est )assen-er Vehicle *inance "ompany inIndia //DB by *rost < Sulli8an (*


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I"I"I handles its customer 8ery sophistically. &ll ne2 customers are sent 8alue pac and2elcome letters alon- 2ith feed bac forms periodically. &s I"I"I has 8arious financeser8ices it cannot -i8e si-nificant focus on customer care. In financial year ///;//1I"I"I 2as rated se8enth (@elo2 Industry &8era-e+ amon- &uto *inancial Ser8ice Sector in )o2er &sia;)acific. I"I"I 2as rated first in same analysis in 1FFF;/// < //9;

//?.

5M)6 has maintained its customer ser8ice profile since last 1E years. #n the other handI"I"I is not able to maintain its number 1 positioned in customer ser8ices.

COMPARISION OF SER'ICESGPRODUCTS

&t 5M)6, the objecti8e is to help finance customer dream car in the simple 2ay. ThatCs2hy 5M)6 offer tailor made schemes 2ith repayment o8er 1 to D/ months. Variousschemes of 5M)6 are as under$

1. Mar-in money scheme.. Security deposit scheme.

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3. &d8ance e>uated monthly installment scheme.9. @alloon payment scheme.?. Special scheme of 5M)6.D. )ersonal loan.0. 'sed car finance.

E. Refinance.F. 4holesale fundin-.

I"I"I also has 8arious finance schemes 2ith repayment o8er 1 to D/ months. They areas under.

1. Mar-in money scheme.. @alloon payment scheme.

3. Special scheme of I"I"I (/finance+.9. 'sed car finance.?. Refinance.D. 4holesale fundin-.

5M)6 is more fle:ible and has tailor made schemes to offer its customers.

PRICE

5M)6 has a -ood nose of mar-in. %ence its rate of interest and schemes are competiti8ein the industry. 5M)6 -i8es reasonable commission to its dealer or M& on their total business. "ompetiti8e rate of interest on 8arious se-ments of 8ehicles for retail financeare as under$

S!GM!7T 1 9 3D 9E D/

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M#7T%S M#7T%S M#7T%S M#7T%S M#7T%S

SM&66 1.0? 1.0? 1.0? 13.?/ 19.//

MI SI! 1.?/ 1.?/ 1.0? 13.? 13.0?

)R!MI'M 1.?/ 1.?/ 1.0? 13.? 13.0?

S')!R)R!MI'M

1.? 1.? 1.? 13.// 13.?/

'S! 10.?/ 1E.?/ 1E.?/ ; ;

R!*I7&7"! 1E.// 1E.?/ 1F.// ; ;

5M)6 finances 2holesale finance to its car dealer 1?.

I"I"I has 2elfare ind of approach to2ards its customers. I"I"I offer commission to itsdealer or M& on their total business. "ompetiti8e rate of interest on 8arious 8ehicles areas under.

S!GM!7T 1M#7T%S

9M#7T%S

3DM#7T%S

9EM#7T%S

D/M#7T%S

SM&66 13.// 13.// 13.0? 13.0? 13.0?

MI SI! 1.0? 13.?/ 13.?/? 13.?/ 13.?/

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)R!MI'M 1.?/ 13.? 13.? 13.? 13.?

S')!R)R!MI'M

1.?/ 13.? 13.? 13.? 13.?

'S! 10.?/ 1E.?/ 1E.?/ ; ;

R!*I7&7"! 1E.// 1E.?/ 1F.// ; ;

I"I"I finances 2holesale finance to its car dealer 19.

&s I"I"I >uite cheaper than 5M)6 and also offer -ood commission, it helps to maecomparati8e 8olume to stand 2ith old player lie 5M)6. In 2holesale finance 5M)6 ismore preferable because of its e:cellence and appropriate system, 2hich helps the car dealer. %ence it is 1 e:pensi8e than I"I"I.

PLACE

5M)6 has around ? branches spread o8er 1D major cities in India. "ompany ha8in- ? branches predicts a -ood distribution net2or. &part from company has introduced directmaretin- associates or direct sales associates and car dealer itself to deli8er the products.In Surat 5M)6 is present at all major car dealer lie 7ana8ati motors, !mpire motors,)resident motors, esai motors., @lit , 5ataria motors, hru motors, @ha8ya %onda,@ha8na ford, and so and so forth.

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I"I"I has appointed 2ell;trained e:ecuti8es for counselin- the prospecti8e customers onfinancial matters. It belie8es that in todayCs competiti8e 2orld to sur8i8e, constant up-radation is must. I"I"I is a8ailable at leadin- car dealersQ company also -i8es franchisesand maes direct maretin- associates. In Surat I"I"I is present at 5ataria motors, hrumotors, @lit, @ha8ya %onda, @ha8na ford and so and so forth.

PROMOTION

5M)6 communicates are throu-h one or a combination of the follo2in- channels$1. )ress ad8ertisement.. )rofessional journals, trade publications, ma-aines.3. !:hibitions and hoardin-s.9. )ublic relation, publicity, sponsorship.?. 4ord of mouth.

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D. Relationship maretin-.0. Tele8ision.

5M)6 is mainly doin- promotion throu-h press ad8ertisement, public relation andrelationship maretin-. 5M)6 is doin- 8ery -ood business 2ith 2ord of mouth. It isdoin- 8ery -ood business from its e:istin- customers by -i8in- them e:cellence ser8ices.&s 5M)6 is 2ell e:perience company of finance industries it does not 2ant to spendmoney for doin- ad8ertisement for its brand. It -i8es ad8ertisement to -enerate the prospecti8e customerCs in>uiry.

I"I"I has a hu-e net2or all o8er the country. Its branchesOe:tension counters or &TMsspread across the country. These ser8e as the retail outlets. The main 2ay in 2hich I"I"Icommunicates 2ith the customers is as under$

1. )rofessional jouranals, trade publications, ma-aines.. !:hibitions and hoardin-s.3. )ublic relation, publicity, sponsorships.9. Relationship Maretin-.?. Tele8ision.D. &TMs.

I"I"I is doin- mainly itCs throu-h press ad8ertisement, puttin- hoardin-s at car dealer or public place. I"I"I is mainly doin- promotion for its brand and to create ne2 customers,as it is ne2 in this maret.

CONCLUSION AND FINDIN*S

It has been -ood e:perience studyin- and analyin- 8arious ser8ices offered andstrate-ies adopted by 5#T&5 M&%I7R& )R#M! 6T and I"I"I.

#n studyin- the both finance companies, usin- their broachers and pamphlets to find outthe -eneral ambience and the attitude of the both companies I ha8e come to the follo2in-conclusions.

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5M)6 bein- e:perienced company in this industry has 8ery professional attitude

to2ards car financin-.

I"I"I create 8ery -ood hold in the car finance maret and on the car dealer in8ery short time.

5M)6 bein- -ood profit oriented company and hence emphasis on consumer

satisfaction and relationship maretin-. I"I"I on the other hand bein- -iant ban is not a profit oriented company in this car finance industry.

/I/LIO*RAPH

4e ha8e relied on 8arious data sources for the preparations of the project report lie$

@rochures and pamphlets of 5M)6 < I"I"I.

Ma-aines lie &uto monitor, @usiness India.

& reference boo named AM&R5!TI7G M&7&G!M!7TB @ SIR )%I6I)

5#T6!R. Various schemes of dealers.

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Kotak Final Project Car Finances

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Transcript of Kotak Final Project Car Finances