Marketing Mix in Banks

8/12/2019 Marketing Mix in Banks

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IN-DEPTH STUDY OF MARKETING MIX OF BANKING INDUSTRY

LIST OF FIGURES

S.NO. FIGURE PAGE NO.

1 PIE CHART FOR BANKS FROM WHICH SERVICE

AVAILED

66

2 PIE CHART FOR KIND OF SERVICE AVAILED 663 BAR GRAPH FOR EXTENT TO WHICH FINANCIAL

REQUIREMENT MET

67

4 PIE CHART FOR WHETHER THE PUBLIC SECTOR

ERVICES HAVE IMPROVED

67

BAR GRAPH FOR WHETHER THE SERVICE CHARGES

ARE APPROPRIATE

6!

6 PIE CHART FOR THE BEST MEDIA FOR PROMOTION 6!

7 PIE CHART FOR WHETHER THE PROMOTIONAL

SCHEMES APPROPRIATE

6"

! GRAPH FOR RECALL OF ADVERTISEMENT 6"

" BAR GRAPH FOR MEANS B# WHICH BANKING DONE 7$

1$ BAR GRAPH FOR WHETHER THE BANKS BRANCHES

ARE WIDE SPREAD

7$

11 BAR GRAPF FOR THE EXTENT TO WHICH

TECHNOLOG# HAS IMPROVED SERVICES

71

12 BAR GRAPH FOR ATTITUDE TOWARDS AMBIENCE 71

13 BAR GRAPH FOR ATTITUDE OF STAFF 72

14 BAR GRAPH FOR WHETHER BANK PROCESSE EAS# 72

1 CENTER OF INTERNATIONAL BUSINESS% ABS


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LIST OF TABLES

S.NO. TABLE PAGE NO.

1 VITAL STATS FOR PRIVATE SECTOR

BANKS

6

2 COMPARISION OF PUBLIC% PRIVATE AND

FOREIGN BANKS

1

3 SHAREHOLDER&S ' HELD IN SBI 43

4 PRICES FOR CITIBANK&S SERVIVES 61



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EXECUTIVE SUMMAR#

The banking industry is an integral part of any society. The key areas that have impactedon the financial services industry include regulation and legislation in various forms. The1986 Financial Services Act as brought about to regulate the industry and offer

consumer some protection. !ith the entry of ne private and foreign banks in thecountry already having numerous big and small public sector players" the competition hasdoubt increased.The competitive environment is continuously changing and is also under increasingpressure due to the effect of the economic recession" customer spending and confidence.The dynamic nature of banking industry makes environmental monitoring and analysisessential.#elighting the customer is the bu$$ord for the service industry today. To fulfill this thebanks should have an e%cellent marketing mi%. The marketing i% for services is differentthen the mi% for product.

The marketing mi% is the organi$ation&s overall offer" or value" to the customer. 'Thebasic marketing mi% is often nicknamed(The )*s( +product" place,distribution" pricing" promotion- these are elements in themarketers armory / aspects that can be manipulated to keep ahead of the competition'#ibb 0 Simkin" 199).The marketing mi% can be e%pressed in a more customer orientated ay as the ')2s'32ustomer 4alue 'product' benefits from the buyers& point of vie2ost to the customer 'price' plus the customer&s costs / e.g. travel2onvenience for the buyer e5uivalent to 'place',channels of distribution2ommunication a to/ay dialogue / not ust 'promotion'.The marketing of services presents particular problems given characteristics such as3

Services cannot be touched or stocked. They are an e%perience.*roduction" consumption and distribution are simultaneous. '*roduction' staff is also thecustomer contact.7uality is variable / and customers tend to use *rice as an indicator of 5uality2ustomers are less easily convinced of reliability than ith a tangible product.To address the special difficulties of services marketing" more '*s' can be added to themarketing mi%3*eopleStaff selection" motivation and particularly customer care training are critical.*hysical videnceThe decor and ambience are very much part of the product offer / as are customer

testimonials and celebrity endorsement.*rocessThe efficiency of the process is hat provides the benefits for the customer. fficiencycan be monitored by measurers of performance" e.g. based on satisfaction 5uestionnairesand 'mystery customer' surveys.For understanding marketing mi% in detail three famous banks ere considered for study3:2:2:S;:



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2itibank.All these three banks are undergoing drastic changes as far as marketing mi% goes. Theinformation about the marketing mi% of these banks as collected from various primaryand secondary sources. customers of these banks.;y means of the responses the gap beteen banks offering under marketing mi% desiredby customers becomes clear. This gap level shos the areas of problems on the basis ofhich proper recommendation could be prepared.



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INTRODUCTION TO PRESENT PROBLEM

:n ?anuary 199 the guidelines for setting up private sector banks ere issued.The banking sector has an uphill task considering the challenges it is facing. The gap beteenthinking and debating the solutions and the implementation of these is idening. This ill erode

the viability and the economic value of the business.There are several challenges confronting the banking sector. These could be broadly classifiedinto the deployment of funds in 5uality assets and management of revenues and costs. Anotherchallenge is that :ndian banks ill have to embrace the sophisticated risk management practices.Thereafter" it ill have to address the risk based pricing and that of capital re5uirements of banks.This past ?une" the bank regulators on ;asel committee on ;anking supervision postponed thedeadline for finali$ing a ne version of the 1988 2apital Accord" to provide the basis ofdetermining the capital ade5uacy.Thus a lot of reforms are re5uired in the banking sector.The foreign and ne private sector banks are very mindful of the inefficiencies in the publicsector banking. They manage their fee/based income far more aggressively:n 1969 :ndira @andhi nationali$ed 1) private sector banks. *rior to that most banks like 2entral

;ank oned by the +Tatas-" nited commercial ;ank +;irlas- and Syndicate ;ank +*ais- ereoned and managed by businessmen. The only e%ception as the State ;ank of :ndia. Bnon asthe :mperial ;ank of :ndia before 19==" this came under the purvie of the C;: it had beennationali$ed in ?uly 19== under the S;: Act of 19==. The businessmen ho oned these bankschannelised most deposits into their on companies" often ignoring the government&s focus areas"agriculture and small scale industries.

That neglect as one of the reasons for the nationalisation of banks. Another as@andhi&s desire to spread the banking habit in rural and semi/ urban areas.T() )*)+,)-) /0 -) +5) 5-89:

The eight ne private banks that have emerged on the :ndian financial topography since 199) areclear outperformers in the otherise troubled sector. :n seven years" these banks have gron toaccount for 6D of the total assets and 1>D of the total profits of banking industry.

:t as the Earsimham committee report dated 1991 that envisaged a larger role for private sectorbanks. The C;: agreed" and in an effort to make the sector more efficient and competitive" itissued" in ?anuary 199" the guidelines governing the entry of ne private banks/ a minimumpaid/up capital of Cs.1>> cr. among others. This as the first time" folloing the nationali$ationof banks in 1969that the C;: as issuing fresh banking licenses to the private sector.The E*;s have gron not ust organically" but also through mergers and ac5uisitions. #F2bank merged ith Times ;ank in an all stock deal valued at Cs. G>> cr. in Eov 1999" :2:2: bankac5uired bank of Hadura in a stock sap deal in #ecG>>> to become the largest among theE*;s.

Vital stats for private sector banks:Ee private sector bank 1998/99 1999/G>>> G>>>/G>>1

Total income )1>.)9 =)>I.)6 I=>).G6= =69.)G 69.)1*rovisions and contingencies G8I.G 6I).) IG9.=6Spread I6.9) 11=1.I1 168=.1E*A +Dof net advances- 6.G ).1 =.1Total advances 1)>I> GG816 1)99Figures in Cs. cr.

Harketing puts the customer at the center of the organi$ation. The organi$ations" hich

CENTER OF INTERNATIONAL BUSINESS% ABS


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do so" reap the profits. :n the grocery sector" Sainsburys" and more recently Tesco" have afirm commitment to marketing" putting them amongst the most profitable retailers in thecountry. :t as said several years ago that Harks 0 Spencer did not even use the ord'marketing'. They believed they placed their customer truly at the center and that theirmerchandising and customer definition strategy led them to be the most profitable retailer

in urope.;ut ho does this stack up today. :t seems that their customers changed. 2ustomerpreferences and desires moved on and the company neglected to see ho their customerbase as becoming more segmented ith differing tastes emerging. The company'sproducts and services become seen as less (vibrant(" too staid" insufficiently dynamic.The ord got out 5uickly to customers that the merchandise range as dull" lifeless" andold. *rofitability levels and customer confidence dropped. The company that neglected itsmarket research needed to regroup urgently and strengthen its marketing skills. oeverthis re5uired profound management reorientation and development of marketingcompetencies. The famous retailer is no struggling to make up lost ground and to regainits ascendancy in a much more volatile market.

The seven factors of marketing mi% of services are though easier to understand butre5uire a great deal of study. Since in banking services the products are not uni5ue andhence easier to imitate. Therefore an efficient" timely and cost efficient strategy to havethe best marketing mi% is essential. Since the nature of the product can be easily alteredin case of service a dynamic approach should be taken toards other attributes ofmarketing mi%. Therefore to combat the challenges of increasing competition in bankingindustry environment" a detailed and thorough knoledge about marketing mi% is a must.The folloing dissertation report as made keeping this in mind. The report is hencetitled as3

;I- D)( S O0 M5+8)-, M? O0 B5-8-, S)+)9@



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OBECTIVE

THE OBECTIVE OF THIS DISSERTATION REPORT IS TO DO:

AN INDEPTH STUD# OF MARKETING MIX OF BANKING SERVICES



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INTRODUCTION TO BANKING INDUSTR#

B5-8-, S)/+ - I-=5

The economic reforms initiated in the aftermath of the 1991 crisis have blon inds ofchange in every segment of the economy. The banking industry" one of the supporting

precursors to any rapidly groing economy" has undergone a period of considerablechange since the 199>s. The three sectors of the banking industry namely public" privateand foreign are the cornerstones of the changing banking industry.The :ndian banking sector has a massive geographical reach and the credit/ deposit +)8D-figures speak volumes of the inherent strength of this industry. ntil recently" the lack ofcompetitiveness vis/a/vis global standards" lo technological level in operations" overstaffing" high E*As and lo levels of motivation had shackled the performance of thebanking industry.The entry of the Ee *rivate Sector banks into the market changed the face of thisindustry. Eurturing collaborative ventures and paying strong emphasis on fore% services"the private banks are globalising :ndian banking business. Armed ith strategic alliances

ith foreign collaborators" these banks have opened doors to ne positive ideas" conceptsand products. These private banks have set a trend for universal banking. For instance@lobal Trust ;ank is the first :ndian ;ank to have e5uity participation from :nternationalFinance 2orporation and Asian #evelopment ;ank. Similar trends are seen in 2enturion;ank&s alliance ith Beppel ;ank" Singapore and #F2 ;ank ith Eat!est Harkets"nited Bingdom. Cecently :2:2: successfully completed its A#C issue on Ee JorkStock %change +EJS-. The intensification of competition in the banking industry as aresult of groing private sector participation coupled ith groing customer needs hasspurred innovation resulting in ne products and services. The private sector banksspearhead this (:nnovation Cevolution(. The ne private sector banks are targetingspecific products and client group. oever ith the advent of foreign players&

participation" the private sector banks& position stands threatened.!ith emphasis on service and technology" it is for the first time that :ndian banks +mainlyprivate- are challenging the foreign banks. These banks are making heavy use oftechnology to give good service at par ith foreign banks but to a much ider clientele.;ranch si$e has been reduced considerably by using technology thus saving manpoer.This has resulted in an overall cost saving. :n addition the Any Time Honey +ATH-facility helps dra large customers to a branch. :2:2: ;ank has already launched#ata;ase Hanagement +referring to using the database of e%isting clients to generatemore revenues-.The ne private banks are on an e%pansion phase and are no moving into semi/urbanareas and satellite tons to fulfill their branch e%pansion norms. :2:2: bank" #F2

bank" @T;" :ndus:nd" ;


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public sector banks. The maor beneficiary of this has been corporate clients ho aremost sought after no.Among the list of top = ealth creator :2:2: stands rdith H4A in Cs. 2r. as 8 andtotal assets in CS. 2r. as 19II hile S;: is rdin top = ealth destroyer ith H4A inCs. 2r. as /GG) and total assets in CS. 2r. as 16>1I.

Among the top => ealth creator :2:2: stands rd

hile S;: stands )8.

" CENTER OF INTERNATIONAL BUSINESS% ABS


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E/-/* B58=+/ 5-= B5-8-, E-+/-*)-

The year under revie as marked by significant changes in the economic environment.There as some deceleration in @#* during G>>>/>1 due to sluggish groth in industry"agriculture and services" though critical sectors like information technology andcommunications remained strong. @roth in the industrial sector as affected by

infrastructure bottlenecks" e%cess capacity in some sectors and an uncertain environmentas investors assess the full impact of :ndia&s commitments to the !T>>/>1" substantially higher than the increase of 1>.9D recorded in 1999/G>>>. Along ith buoyancy in the global economy" various e%port/promotion measurestaken by the @overnment facilitated e%port groth. :n contrast" the groth in importssloed don to >.GD in G>>>/>1" and the slodon ould have been more pronouncedbut for the rise in oil imports reflecting hardening in international crude prices. Asignificant development during the year as the removal of 7uantitative Cestrictions+7Cs- in compliance ith !T< re5uirements. The %im *olicy also announced severalmeasures to boost e%ports and position :ndian producers and e%porters to take advantage

of liberali$ation in orld trade. :nflation +!*: year/on/year- remained lo at ).9D inG>>>/>1 against 6.8D in the previous year.>>/>1 as higher than 1.9D in the previous year. Thegroth in credit at 16.8D in G>>>/>1 as" hoever" loer than 18.GD in 1999/G>>>"reflecting sluggishness in the real sector environment. #uring the same period" totalresource flo to the commercial sector from banks i.e. non/food credit plus investment inbonds" debentures" shares" 2*s" etc." rose by 1=.GD against 1I.8D in the previous year.The strong groth in food credit during the year supported large/scale food procurementoperations of the @overnment.:n keeping ith its obective of providing sufficient credit for groth consistent ithprice stability" C;: announced a number of measures to enhance li5uidity and reduce thecost of funds to banks. These included reduction in ;ank Cate" cut in 2CC" reduction inrepo rate and cut in savings bank deposit rate. The nion ;udget +G>>1/G>>G- alsosignaled a softer interest rate regime by announcing a cut in the interest rates on smallsavings schemes. #uring the year under revie" C;: announced several ne initiatives inbanking sector reforms and development of the money market and government securitiesmarket.


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of the competition. The current slodon in industrial sector" greater access for domesticcorporate to markets including abroad" greater flo of F#: and F:: funds into theeconomy and in general greater volatility in e5uity markets abroad hich impactdomestic markets are all developments hich highlight the need for strong riskmanagement systems" credit appraisal and follo up as ell as prudent provisioning

policies in banks.Keveraging its strengths in terms of brand name" market leadership" ide netork ofbranches" technology and skills" the ;ank ill strive to scale ne heights in the comingyear. This ill be supported by initiatives in insurance" lending to mid/corporates"personal banking and priority sector. !ith technology as a key driver" the ;ank ill beable to e%ploit opportunities in cross/selling products" meet customer re5uirements andenhance profitability and efficiency. The challenge" therefore" is to improve profitability"asset 5uality along ith strong capital backing to support asset e%pansion" and use thehuman and financial capital to add value to shareholders of the ;ank" hile at the sametime continuing to ensure strict adherence to statutory and regulatory directives andnational policies.



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PUBLIC SECTOR BANKS VISAVIS PRIVATE AND FOREIGN BANKS

:ndian ;anking offers a curious combination of e%cellence and mediocrity. :t is one ofthe biggest banking industry in the orld. :t comprises three forerunners / *S;s" *rivateSector ;anks" Foreign ;anks. The *S;s are gigantic" are fleet flouted and the Foreign

;anks are technology savvy. ;anks have traditionally functioned as reliableintermediaries beteen net savers and net borroers. :gnoring fee/based services" :ndian;anks have mainly concentrated on the earnings from the Lspread& beteen the lendingand the borroing interest rates. This becomes 5uite apparent from even a cursory glanceat the published ournals of any bank" here the income head is split up into L:nterest:ncome& and L


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SWOT ANAL#SIS

PUBLIC SECTOR BANKS

S+)-,(9:

*ublic sector has 8)D share in the total assets of the industry.


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PRIVATE SECTOR BANKS

S+)-,(9:

*rivate sector banks have a high credit to deposit ratio and they have kept their

operating e%penses lo.

!ith technology and customer orientation" *rivate Sector banks are at the higherlevel as compared to *S;s and on the level playing field ith Foreign banks.

*rivate sector banks have a high level of capital ade5uacy ratio.

*rivate sector banks are fairly advanced in the use of technology. Services such as

neatly printed statements of accounts" automatic and prompt updation of passbooks"ATHs etc are some of the benefits that customers are enoying at these banks.

W)58-)99)9:

*rivate sector banks unlike *S;s have less number of branches so their reach and

coverage is not very e%tensive.

*rivate sector banks have lo groth in average advances" this aspect is dominated

by the *S;s.

For *rivate sector banks the average E*As stand at 1=.=GD.

*rivate sector banks do not e%amine their business ith along term perspective. Hany

of these banks tend to look at short/term opportunities and gains.

FOREIGN BANKS

S+)-,(9:

Foreign banks have high credit to deposit ratio.

Foreign banks are the leaders in technology and customer services.

Foreign banks have high level of capital ade5uacy ratio. Foreign banks sho that the increase in the borroings hich earlier amounted to

losses is no signaling profits.

The average spread enoyed by the foreign sector is higher than that earned by other

sectors.

For Foreign banks the average E*As stand at less than 1>D hich is loer than the

other to sectors.

W)58-)99)9:

Foreign banks have very less number of branches and hence their reach is very lo as

compared to *S;s.

Foreign banks have concentrated on corporate banking and fee based income. The

business focus for most foreign banks must shift to retail mobili$ation.



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The folloing table shos a general comparison of three main classes of banks.

*articulars *S ;anks *vt. ;anks +


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ENVISIONING THE FUTURE OF BANKING

Against the background of the profound structural changes in banking servicesorldide" every :ndian bank is embarking on a fundamental redefinition of its business

and its relationship ith the customers. 2


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THE NEED FOR BETTER MARKETIN MIX:T() 0//-, P/+)+&9 M/=) 9(/9 () 5*/


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INTRODUCTION TO SERVICES MARKETING

SERVICES MARKETING

Services are itnessing a maor boom in :ndia. Services like banks" car financing"

consumer durable credit" cellular" paging" e%press" hospitality" travel and tourism"airlines" and" educational services on are today reali$ing the importance of marketing.Along ith these big service businesses" many small businesses ranging from beautysaloons" pubs" gyms" play schools and so on are reali$ing the importance of marketing.ven though some of the principles of marketing and advertising services are similar toproduct marketing" there are significant differences. A service is an act of labour or aperformance that does not produce a tangible commodity and does not result in thecustomer's onership of anything. :ts production may or may not be tied to a physicalproduct. Thus" there are pure services that involve no tangible product +as ithpsychotherapy-" tangible goods ith accompanying services +such as a computersoftare package ith free softare support-" and hybrid product/services that consist of

parts of each +for instance" restaurants are usually patroni$ed for both their food and theirservice-.

UNIQUE CHARACTERSTICS OF SERVICES

%actly hat is a service" and hy should services receive special treatment frommarketersM A popular definition describes services as (any act or performance that oneparty can offer to another that is essentially intangible and does not result in theonership of anything. :ts production may or may not be tied to physical product.(Although" the distinction beteen goods and services is somehat artificial" since thesuccess of goods manufacturers is vitally dependent on the service they provide" there arefour commonly cited characteristics of services that make them different to market from

goods3 :ntangibility" :nseparability" 4ariability and perishability.

INTANGIBILIT#

*ure services such as baby/sitting cannot be seen or touched. They are ephemeralperformances that can be e%perienced only as they are delivered. As the above definitionof service suggests" intangibility may represent the most critical difference beteenservices and goods" and its implications for marketing are great.Services are intangible because they can often not be seen" tasted" felt" heard" or smelledbefore they are purchased. A person purchasing plastic surgery cannot see the resultsbefore the purchase" and a layer's client cannot anticipate the outcome of a case beforethe layer's ork is presented in court. To reduce the uncertainty that results from this

intangibility" marketers may strive to make their service tangible by emphasi$ing theplace" people" e5uipment" communications" symbols" or price of the service. For e%ample"consider the insurance slogans (Jou're in good hands ith Allstate( or *rudential's (@et apiece of the Cock.(

:ntangible services are difficult to sell because they cannot be produced and displayedahead of time. They are therefore harder to communicate to prospective customers. Ahobbled eekend athlete cannot see the results of elective knee surgery beforehand. The

1! CENTER OF INTERNATIONAL BUSINESS% ABS


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person may be able to talk to other patients ho have e%perienced the same procedure"but their operation does not necessarily reflect the outcome of this particular surgery.Harketers of services can reduce these risks by stressing tangible cues that ill conveyreassurance and 5uality to the prospective customers. These tangible cues range from thefirm's physical facilities to the appearance and demeanor of its staff to the letterhead on

its stationery to its logo. Kife insurance companies are particularly savvy about thisproblem. Their service is" after all" the most intangible service3 by definition" the buyerill never kno the ultimate result of hat he or she has boughtN To compensate for thisintangibility the maor companies over the orld have developed strong visual symbolsfor their firms.*rudential /The rock of @ibraltarAll state /*rotective handsTravelers /A red umbrellaEationide /A blanket!ausau /A train station

INSEPARABILIT#This characteristic is interpreted differently by different service marketing marketers" butall interpretations point out that special operations problems e%ist for the firm's managers.


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VARIABILIT#

The fact that service 5uality is difficult to control compounds the marketer's task.:ntangibility alone ould not be such a problem in customers could be sure that theservices they ere to receive ould be ust like the successful e%periences theirneighbors ere so pleased ith. ;ut in fact" customers kno that services can vary

greatly. #ifferent front/line personnel have different abilities. ven the same serviceprovider has good days and bad days or may be less focused at different times of day.Services are performances" often involving the cooperation and skill of severalindividuals" and are therefore unlikely to be same every time. This potential variability ofservice 5uality raises the risk faced by the consumer. The variability of services comesfrom their significant human component. Eot only do humans differ from one another"but also their performance at any given time may differ from their performance at anothertime. The mechanics at a particular auto service garage" for e%ample" may differ in termsof their knoledge and e%pertise" and each mechanic ill have (good( days and (bad(days. 4ariability can be reduced by 5uality control measures. These measures can includegood selection and training of personnel and alloing customers to communicate

dissatisfaction +e.g." through customer suggestion and complaint systems- so that poorservice can be detected and correctedThe service provider must find ays to reduce the perceived risk due to variability.


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delivery process.


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EXPANDING THE MARKETING MIX FOR SERVICES

MARKETING

Service marketing managers have found that the traditional four *'s of marketing areinade5uate to describe the key aspects of the service marketer's ob. The traditionalmarketing mi% is said to consist of the folloing elements of the total offering toconsumers3 the product +the basic service or good" including packaging" attendantservices et cetera- its price the place here the product is made available +or distributionchannels / not generally a real issue for most services" e%cept perhaps for repair andmaintenance- and promotion +marketing communication3 advertising" public relationsand personal selling-.Some marketers suggest that the uni5ue re5uirements of selling services re5uire themanager attend to three additional *'s. These are people" physical evidence and process.

PEOPLE

Hany services re5uire personal interactions beteen customers and the firm's employeesand these interactions strongly influence the customer's perception of service 5uality. Fore%ample" a person's stay at a hotel can be greatly affected by the friendliness" knoledgeability and helpfulness of the hotel staff / in most cases the loest paid people in theorgani$ation.


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transactions take up the teller's are all e%amples of unpleasant service conditions causedby a firm's other patrons.


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Such a connection is a reflection of the ideas developed in the service star. Theinteraction is not ust a part of hat the customer buys" but is hat the customer buys.The values brought to this by the organi$ation are integral.So" for e%ample" if an e%ternal analysis ere to suggest a segment of 'professionals' itha need for a ide range of detailed advice available ithin 'n' timescale there is a need to

match this ith internal values of delegation so that front line staff are empoered tomake decisions" ithin the timescale and have a reard system hich encourages therisks attached to such action. Similarly" defusing a crisis for the customer ill ork onlyif" in doing it" you do not create a drama internally because management" in turn" is notgood at defusing crises ith staffN

DELIVER#

:ndeed" in some services / a concert hall" for e%ample" or a restaurant / the concept ofdistribution is difficult to comprehend. Cather" it is very important to take account of thepoint about production,consumption. #elivery is about the totality of the ay in hichthe service is accessed before" during and after a sale. :n other ords" because the

interaction forms an integral part of hat the customer buys" so the place or places andthe feel and values of these must be e5ually integral. !ith Taco ;ell" for e%ample" 'price'and 'speed' are more compelling reason than 'food' for customers choosing that particulareating place" relative to competition.;ut taking in to account culture and delivery is inevitably comple% since" in essence" oneis building a very detailed star. !hen further considered ithin broad headings of theservice mi%" there can be anything up to => criteria hich govern the market relationship"so it is possible to appreciate ust ho difficult this can be.

REQUIREMENTS FOR A SERVICE ORGANIATION

I 9 95=

( sing industrial models to manage service/based corporations makes as little sense asusing farm models to run factories(Service


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THE CUSTOMER TIER

2ustomers are the foundation of every organi$ation. They are the scorekeepers in theservice game. :t has been suggested that figure skating is no the sport that offers themost appropriate metaphor for the nature of competition in today's orld. :t is" instead" anindividual organi$ation trying to delight and impress a panel of udges and the udges are

the customers. A service organi$ation can successfully bash the other organi$ations butstill loose the service game if the organi$ation ring up )s and =s ith the customers.Hanagement practice should be based on a deep knoledge of customer characteristics inthree areas3 e%pectations" needs and competencies. ach service organi$ation must befitted to its market and its customer&s particular definition of service 5uality.


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MARKETING - BANKS:

;anking is a maor industry through out the orld today. 2haracteristics of bankingmarketing:INTANGIBILIT#3 ;anking services are generally intangible" but the service providersgo t the considerable lengths to tangibilise the services for customers" eg. ;ankpass book"

regular bank statements" gold credit cards.

INSEPARABILIT#:the degree of inseparability depends upon the type of services andthe actual supplier. Hany everyday transactions are carried out no via automatedservices +ATH-. ;ecause access to these systems has broadened to allo use of anyparticular kind of machine by customers of other institutions" the customer ill often notbe dealing directly ith their on provider. Hany financial services are sold by brokers"agents of various kinds and this has led to several difficulties and misunderstanding anddissatisfaction in case of rong advice or unsuitable product.

HETEROGENIT#: :n this case the comple%ity of the services transaction process ill

determine the e%tent of variability and this can differ to a large e%tent beteen institutionand even ithin one institution. The greater the degree of automation ithin anytransaction process" the greater the degree of standardi$ation. Thus simple transactionsmay be carried out via ATHs and completely standardi$ed or via a branch counter herethey might be fairly standardi$ed but subect to some variation in 5uality.

PERISHABILIT#3 The degree of perishability depends upon the type of service. :f acheck needs to be cleared by a certain date and the system causes a delay then thebenefits to the consumer are lost so the service could be said to be perishable. ;y andlarge hoever money and financial services are enduring in nature. :f a bank&s reservesare not fully utili$ed profitably through lending or investment they ill still retain theirorth and may be utili$ed again on a later date.

HIGH INVOLVEMENT PURCHASES COMPLEX PRODUCT3 Hany financialservices are high involvement purchases. This ill mean that the customer ill shoparound for the beat advice or best offer and ill generally take a long time to plan thepurchase" for e%ample ith a mortgage or a pension.

HIGH LEVEL OF BRAND LO#ALT#3 2ustomers tend to stay ith financial servicesproviders and use them to satisfy their different needs at different stages of their life.;anks recogni$ed this ell and are keen to provide students overdrafts s in the hope ofretaining a professional salaried account holder for many years. Hany people choose thesame bank as their parents because the parents open an account for them. 2hildren andteenagers are a keen target market for the banks because of the possibility of the futurebusiness.

F-5-5 9)+)9 59/ )-= / ) /- /0)-% ( =)9/-9 *5=) >

*/+) ()- /-) )+9/-.



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THE MARKETING ENVIRONMENT:

nvironmental analysis and monitoring is of critical importance in any industryespecially in the dynamic financial services industry ith its proliferation of products andservices and changing industry structure. %ternal environment analysis usually involvesassessing influences on the organi$ation&s business activity under the folloing main

headings3

P/5),5:

@overnment attitude toards home onershipState provision of pensions@overnment encouragement of savings and investmentCegulatory control and protection

E/-/*

*ersonal and household disposable income#iscretionary income levels

mployment levelsThe rate of inflation:ncome ta% levels and ta%ation structuresSavings and investment levels and trends stock market performance2onsumer spending2onsumer credit

S//


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BANK MARKETING MANAGEMENT:

;AEB marketing is essentially a three stage process starting ith market research toaccurately analy$e the needs. ;AEB services must then be designed to fulfil those needsat appropriate prices and then the availability of these services must be communicated

effectively to potential customers. Harket research is the critical starting point. Thesuccess of subse5uent marketing planning and policy decisions depend upon a clearunderstanding of the market. To achieve strategic groth through ;AEB marketingimplementation" three maor strategic alternatives are available.M5+8) )-)+5/-:the aim is to gain market share at the e%pense of the competition.There are three ays of achieving this.O ncourage e%isting customers to buy more of the company's products and services"O *ersuade non/users to try the products.O Attempt to get competitors customers to sitch to your offerings.M5+8) =))/*)-:This means seeking neer target markets segments in hich tooffer e%isting products and services.

P+/=


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THE BANKING MARKETING MIX:

The marketing mi% refers to the blend of ideas" concepts and features hich marketingmanagement put together to best appeal to their target market segments.

THE PRODUCT MIX:As mentioned previously" there is little or no room for innovation in product design dueto the ease by hich competitors can make similar offerings" for e%ample by alteringcharges or interest rates to meet those of competitors. Additionally" many financialservices are affected by other restrictions" such as government directives relating toincome ta% and investments or constraints on the amounts hich can be invested.#ifferentiation" therefore" can best be achieved through the other elements of themarketing mi%. 2urrent accounts are dominated by banks" although the buildingsocieties& share of this market in hich they could not compete until recently is groing.They hold the maority of mortgage account" hoever" but this stronghold is increasinglyunder pressure from banks.

THE PROMOTIONAL MIX:

The aims of the promotional fall into three main categories3 to inform" to remind" and topersuade. :t ill alays be necessary to inform prospective consumers about neproducts and services" but other issues may also need this type of communication toconsumers ne uses" price changes" information to build consumer confidence and toreduce fears full descriptions of service offerings" image building are e%amples.*romotion designed to persuade consumers ould be in line ith specific obectives" fore%ample to encourage sitching or to build preference.There are a number of promotional tools available for bank marketing !hatever methodsmay be used it is important to focus on3

O 2learly identified segmentsO A uni5ue selling propositionO !ell defined target audienceO 2reative use of media and media scheduling to reach audiencesO Honitoring and evaluation of promotional effectiveness.

PROCESS:

Ceasons for enhancing process in banks are some of the folloing changes3Cising competition among banks and from outside the traditional banking sector isdriving them to improve their customer service level to retain and increase the customerbase and hence the need to provide better service.

@lobali$ation and liberali$ation have added to the competition forcing banks to furtherreduce cost and increase efficiencyHore mergers and consolidation of banks put pressure on them to improve productivityand reduce costs.;anks have to follo a customer centric approach to prevent rapid shifts in customer&schoice.

2" CENTER OF INTERNATIONAL BUSINESS% ABS


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;anks face constant pressure to adapt to changes brought about by dynamic environment.This dynamic environment places e%treme demands on information systems to providebetter customer service" at loest possible costs and in the shortest possible timeQThe change in the banking environment has happened not only due to competition butalso regulation.R according to ;art ellemans" deputy manager 4ysya ;ank. Qence

they are focussing on not ust volumes but also on the bottom lines. !hen you antvolumes ith profits" you have to bring in sales culture.RThat e%plains hy our banks keep in5uiring hether e need a personal or a home loanhen e go to put some money in the fi%ed deposit. The mantras no is sales" and thereis a tremendous pressure on bankers to turn sellers rather then ust being bankers.

PRICING:

The price in financial services terms relates to the cost involved to the customer in say"bank charges or credit card rates. These prices seem to evoke lo levels of customersensitivity as many customers enoy Lfree& banking" by maintaining their current accountsin credit" for e%ample" or paying their credit card balances off each month. Theintroduction of ne charges" hoever" such as the annual credit card fee had a noticeableeffect initially" hoever" and sparked off competitive reaction from lenders prepared tooffer cards ith no annual charge.*rice also relates to the value of the products to the customer and" as such" can be highlysensitive. This can be in terms of interest rates charged on a mortgage" here reductionsin interest for first time buyers or preferential rates for e%isting customers of otherservices +for e%ample current account holders- are standard promotional tools in theindustry" representing a form of discounting. The rates of return offered to investors isanother element of the price and different products ithin the range are fre5uently pricedat differential rates" to attract long/term savers or large sum investors" for e%ample.*ricing can therefore be used to differentiate the offering and is likely to be used bycustomers in selecting service.

PLACE:

*lace or location has alays been regarded as critical in retail financial services herehigh street positions are maintained by most of the large institutions. For transactionservices here regular and fre5uent branch contact is re5uired this can be important. First#irect" hoever" the telephone banking service" has proved that a bank ithout branchesis possible though its customers still need access to convenient ATH outlets. Someconsumers prefer personal" face/to/face contact ithin a branch and may be more likelyto use a local branch or building society. #irect Kine and other telephone insuranceservices are also moving aay from the traditional large netorks of branches andbrokers or agents. 2hanges in distribution systems" technology and consumer demands

are all key influences on the evolution of the Lplace& component of the marketing mi%.#istribution management is concerned ith to things3 availability and accessibility.

*


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develop competitive advantage in the marketplace and to build and maintain relationshipsith customers.2ustomers are no less a part of a firm's human resource than its employees. :f the serviceorgani$ation's customers are sufficiently talented" they can do all sort of things for thatorgani$ation from co/designing the services to co/designing the human resources

management practices. aving the (best customers( can be a source of competitiveadvantage.The customer tier" then" deals ith the three important characteristics3 their e%pectations"their needs and their competencies.


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The make/it/or/break/it role service employees play is that of linking customers to theorgani$ation. The boundary tier / especially but not e%clusively the employees at theboundary tier / is the glue that binds customers to the firm. ;ecause service employeesare both physically and psychologically close to the customers they serve" they play atleast to important roles for the organi$ation3

+1- :mpression Hanagers3 For many customers" the service employee is the organi$ation.This means that boundary employees behavior and the e%periences their behavior createsfor customers are service 5uality in customer's eye.+G- @atekeepers of information3 ;oundary employees" being in constant interaction ithcustomers" are useful source of insights into customer attitudes" information oncompetitor strategies and ideas about ho to enhance service 5uality.!e emphasi$e that attention to the constituents of the boundary tier and their individualabilities" attitudes and motivations is only one of many rules for inning the servicegame. The service organi$ation should try to avoid hat e have called the (humanresources trap(" hich is the mistake many companies make of putting all the burden forservice 5uality on ho people at the moment of the truth treat customers.

ere" e ould also like to stress the importance of the non/personal servicecharacteristics +like the physical facility" billing accuracy and timeliness- and the supportthat must be given to the front/line employees to enable them to contribute mosteffectively to inning the service game. As ith the figure skater ho is provided ithust the right music and ardrobe" performance by service orkers can be only as perfectas the supporting elements permit.



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METHOD:

To understand the customers response to the I different features of marketing mi% a

5uestionnaire as prepared.

ORGANISATION SITE:

For the purpose of finding the customers response toards marketing mi% structure ofdifferent banks 5uestionnaire as made to be filled by customers of these banks in#elhi and E2C.

SAMPLE:

SAMPLING UNIT:

2omprised of all the customers ho ere

/;ased in #elhi and E2C./2ustomers of any of the banks under study.

SELECTION OF SAMPLE3Selection of the sample as done at random.

SAMPLE SIE:

A sample si$e of => customers as taken.

INSTRUMENTS USED:

To understand consumers& behavior toards the banks efforts for their marketing mi%

structure the 5uestionnaire method of data collection as used. The 5uestionnaireintervie ere conducted in person" through e/mail and on telephone.The type of 5uestionnaire used as structured" non/disguised. These types of5uestionnaires are considered to be most effective since they produce more reliableresult. Also the data obtained through these are easier for tabulation and interpretationthen the data collected by other methods. Also" this type of 5uestionnaire is considered tobe more convenient for the intervieee to anser.

PROCEDURE FOLLOWED:

For the preparation of the report" firstly" the details of marketing mi% for :2:2: bank" S;:and 2itibank ere collected. The sources ere both primary and secondary. The

secondary sources ere collected through articles in print" books" brochures" ebsites andournals. The primary source as through personal contact at the three banks. A small5uestionnaire asking about the details of the marketing mi% as put forard to anemployee in each bank ho had sufficient information regarding it.


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ANAL#SIS:

INTRODUCTION TO ICICI G+/


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:2:2: ;ank offers a ide spectrum of domestic and international banking services tofacilitate trade" investment" cross/border business" and treasury and foreign e%changeservices. This is in addition to a hole range of deposit services offered to individualsand corporate bodies.:2:2: ;ank's :nfinity as the first :nternet banking service in the country" and a prelude

to banking in the ne%t millennium. 2urrently the ;ank has around 1=>">>> customers.Eeed for merger of :2:2: Ktd. and :2:2: ;ankThe recent trend in orld banking is toards mergers and ac5uisitions. This is evidentfrom the mergers occurring in ?apan" nited States and other parts of the orld. The needis being felt for stronger and feer players" offering a ide gamut of services +universalbanking-.!ith competition becoming acute and foreign banks entering the :ndian market stepshave to be taken to sustain groth in the :ndian ;anking sector.To meet your business banking needs" :2:2: ;ank" a commercial banking subsidiary of:2:2:" provides an array of commercial banking products. !ith an authori$ed capital ofCs. >> crores +S# I>.I> million-" of hich subscribed and paid up capital is Cs.16=

crores +S# 8.89 million-" :2:2: ;ank's financial strength adds to its capability ofservicing businesses. The ;ank has harnessed state/of/the/art technology to deliver itsservices to the ma%imum satisfaction of customersThe 4alue of :2:2: ;ank share has been ascertained at Cs. 6.1G per share. Taking *riceas Cs. 6.1G per share and the *S of three years from 1998/1999" *rice/arning Catio+*,- has been calculated as follos.

1""!"" 1"""2$$$ 2$$$$1

arnings*er Share

.8) I.II 1.8

*, Catio 9.)

W(59 IN W(59 OUT


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MARKETING MIX FOR ICICI

PRODUCTS:

*ersonal ;anking2ards

ome Koans2ar loansTo heeler loans2ommercial vehicle loans*ersonal Koans2# KoansKoans against shares#emat Services ;onds,Fi%ed #epositsEC: Services.C/+/+5) I-)+-) B5-8-,::nternet Services for 2orporates.

!hether you are looking for investment opportunities" borroing products or even riskmanagement assistance" the :2:2: Treasury has solutionsfor you.


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:/*ayments

2orporate :nternet ;anking

Foreign %change Cemittances,Advisory

F:: Services

W/+8-, C55 F-5--,:2:2: ;ank is the first bank to introduce )-/+ 59)= )-=-, +5). :t offers alltraditional !orking 2apital Financing products ith a host of features" including loestprime lending rate ith the highest service 5uality 2omposite cost. Fund/based orkingcapital products include cash credit" short/term loans payable on demand" billsdiscounting" e%port and import financing" financing of short/term cash flo mismatches"fi%ed and floating rate debentures and subscription to commercial paper

T)+* L/5-9

Term loans for period of three to seven years is sanctioned for financing small andmedium si$ed companies and to support normal capital e%penditure. :ncludes rupee

loans" foreign currency loans" leasing" preferred stock and fi%ed rate debentures.

D)5)+ F-5--,

The bank provides !orking 2apital Financing for dealers of the company. 2ustomi$edstructures are also orked out to suit dealer needs. Koan assistance is sanctioned todealers as orking capital or as bill discounting lines of credit.

V)-=/+ F-5--,

The ;ank e%tends ;ill #iscounting services on bills dran by suppliers on the company.;ills accepted by the company are eligible for discounting under this scheme.#iscounting rate is linked to the tenor based :;C. *riority sector companies are also

eligible for this service.

F-5--, C59(0/ G59

To manage the cash flo of an organi$ation" :2:2: ;ank offers assistance for financingcash/flo gaps by giving you an over/draft limit for short tenor financing" consistent ithconsortium arrangement.

C59( M5-5,)*)- S)+)9

:2:2: ;ank offers custom/made payment solutions alloing them to reduce the timeperiod beteen collections and remittances. 2ash management products include physicalcheck/based clearing" electronic clearing services" central pooling of countryide

collections" dividend and interest remittance services.

IP5>*)-9

:2:2: ;ank has leveraged the :nternet to offer e/commerce capabilities. :2:2: ;ank isthe first bank in :ndia to provide fund transfer facility through the :nternet. :2:2: ;ankhelps in setting up an :nternet based funds transfer system for a supply chain. Funds canbe transferred from a company to its vendors and from the dealers to its supplier throughthe :nternet. :2:2: ;ank makes use of the latest security measures for :nternet ;anking.



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C/+/+5) I-)+-) B5-8-,

:nfinity" the ;ank's :nternet ;anking Service" has opened the doors to a Ee !orld ofconvenience. :f you have a 2orporate :nternet ;anking account" you can get all @rouprelationship information at the click of a mouse.

F/+),- E?(5-,) R)*5-) A=9/+>

:2:2: ;ank's treasury is one of the strongest treasury operations in the country ith aturnover in e%cess of S# => billion. The ;ank's e%perienced and knoledgeable teamof dedicated foreign e%change dealers is e5uipped to help you ith fast and narro5uotes for transactions.

PRICE

They don&t have any service charges hen a customer goes for the first time on normalservices. #ebit card of ATH has a yearly charge of 99 Cs.

SUPPLIERS LINE OF CREDIT Financing non/proect purchase of capital e5uipment

;acked only by bank guarantee

Eon/proect purchases

sually ,= ,I year repayments in semi/annual, 5uarterly installments

*ricing based on cost of funds and tenure

As a *rivate 5uity Asset Hanagement 2ompany" :2:2: 4enture raises capital from avariety of domestic and international investors" constitutes them into distinct pools anddeploys them primarily in unlisted companies that do not have easy access to publicsources of debt or e5uity capital.The choice of an e5uity partner is a critical step for any entrepreneur. The right partnerprovides the e%perience" credibility" responsiveness" fle%ibility and access to resourcesthat complement the skills of operating management. :2:2: 4enture e%cels in all theseaspects. :2:2: 4enture's team of G> professionals has a cumulative operating andinvestment management e%perience of over 1>> man/years and a record of successful andinnovative financing in private e5uity. :2:2: 4enture invests in companies across a broadrange of industries at all stages of development" from start/ups to e%pansion financing inemerging groth companies to management buyouts. Since its founding in 1988" :2:2:4enture has helped fuel the groth of over >> companies in :ndia and 1G in the S. :nany investment situation" :2:2: 4enture prefers to take an active role to create value for

the portfolio company and its shareholders.As a holly oned subsidiary of :2:2:" :2:2: 4enture has access to a broad spectrum offinancial and analytical resources. !ith its keen understanding of the :ndian financialmarkets" access to global capital and a netork through influential global alliances" it actsas a vital source of capital and management e%pertise to entrepreneurs.!orking 2apital products include both fund/based and fee/based products.. Fee based products include documentary credit and bank guarantees.



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PROCESS

The present business model prevalent at :2:2: for the delivery of products and services tothe customers is as follos. :t is based on separate product and channel structures" and

results in diffused customer onership.PRODUCTSSERVICES SUITE CHANNELS C

AUTO LOANS CALL CENTRES US

MORTGAGES DSAS T

LOANS TO BU# DURABLES ATM9 O

BONDS MUTUAL FUNDS INTERNET M

STOCK TRADING BANK BRANCHES E

NET BANKING DISTRIBUTION CENTRES R

CREDIT CARDS S

C/+/+5) I-)+-) B5-8-,

:2:2: ;ank opens the door to complete transparency in your banking activitiesThe poer to kno is the poer to doToday corporate decisions are taken across the orld in split seconds. These decisions arebased on 5uick and easy sharing of vital information hich is made possible onlythrough transparency of operations.:2:2: ;ank brings you the poer of financial transparency through its net bankingservice. ATHs spread across over 1>> centers" it has increasingly given more andmore :ndians the poer to bank the :2:2: ;ank ay.:n 199I" :2:2: ;ank took banking to an entirely ne level.


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:2:2: ;ank lets you optimise on time" money and business opportunities by simplyupgrading to 2orporate :nternet ;anking.:2:2: bank is actively involved in the maintenance of its softare as ell as hardare.:nfact :2:2: group has come up ith its on softare co. called :2:2: :nfosysTechnology. The bank&s softare is updated every months

The technological upgradation happens at corporate as ell as branch offices.:2:2: ;ank&s :T :nfrastructure comprises of the folloingEetorking services and data center related services and it facilities management. Allsuch needs are met by :2:2: :nfotech. They assist them in all designing" customi$ation"implementation and maintenance of their corporate netork. Their netorking e%pertiseincludes3KAE #esign!AE #esignEetork HanagementEetork SecurityCouting

:* AddressingSatellite Eetorking +4SATs-The :2:2: !AE is a closed user group netork and it connects more than 1=> locations.:2:2: ;ank offers various :T enabled processing services for the folloing areas ofork3:nvestor Servicing#epository Services&Hutual Funds:nsuranceCeconciliation +Cupee and Fore%-Accounts Ceceivable Hanagement> branches +increasing to 6> very soon-" )=> ATHs" spreadacross over 1>> centers" it has increasingly given more and more :ndians the poer tobank the :2:2: ;ank ay. :2:2: bank boasts of 6G> >f the 8>> odd ATH outlets in thecountry" and hopes to account for to of the si% that ill be installed every day in thene%t one year plan to garner some e%tra income by leveraging the advertising potential ofthe teller machines.Ha%imum banking takes place through alk ins. Though the bank is trying for shiftingthe clientele to ATH. Till date )=Dof the customer database has been converted to ATH

4$ CENTER OF INTERNATIONAL BUSINESS% ABS


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PROMOTION:

ICICIbank is running an advertising campaign that focuses on the convenience ofbanking ith it. Bamath&s A team has rapped it up by burning money on brandadvertising across sectors in a serious manner that" has been rarely seen in the industry using the services of megastar Amitabh ;achchan to launch credit cards" advertising

almost daily on prime time television for banking portals" etc. insiders estimate that :2:2:should have spent" by a conservative estimate" as much as Cs. G>/> crore for brandbuilding.:2:2: banks media agent is 7uantum.For marketing of ATHs also lot of efforts have been put in. each if :2:2: ATH does G81transactions a day on an average but 7uantum and :2:2: are hoping advertisers ill beattracted by the 5uality of audience they can reach. :t remains to be seen hether thecosts +:2:2: advertising budget is Cs.=>>>/1>>>> lakhs- depending on the no. of ATHschosen and the fre5uency of the message ill pay off advertises in the long run orhether this trend ill go the ay of banner advertising.The bank considers T4 as the best media for promotion.

PH#SICAL EVIDENCE:

:2:2: considers ambience very important since they believe that it leaves a maor impacton client. All banks have attractive dUcor and lovely interiors. Several scrolling machinesare put on hich the ne as ell as e%isting schemes& details are shon. @lossybrochures and leaflets are available at various counters.

PEOPLE:They consider internal marketing as a very important part. They have e%cellent trainingprograms for their employees. They have training programs for freshers as ell as otheremployees. These are held every month and also upgraded on a monthly basis. They also

have physical training programs. They have a site on the :nternet on hich they takeonline feedbacks from the employees and there is complete transparency in this case.The cost of training the employees about better technology range beteen Cs. I>>>/8>>>> per employee. The cost varies as per the34enue3i.e. hether the employee is trained in the ;ank training center or if a hotel isbooked for the same.#uration of training3:2:2: plans to put in a data mining solution that ill effectively collate and make senseof data across million bank accounts" 8) ATHs" 1>">>> cards" 1>> banks branches")>>">>> net banking accounts and =/6 distribution channels.:ts bank has ) million customers and the institution nearly = million bondholder accounts.

Also the banks environment has been constantly emphasi$ed as being omen friendly.



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SWOT OF ICICISTRENGTH

:s the preferred financier for 1> auto manufacturers companies

2onsidered to be a fle%ible company

4ery consumer friendly. as the highest month on month share of the market.

1.6 million customer base.


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INTRODUCTION FOR SBI

State ;ank of :ndia is the largest bank in the country ith over 19> years of bankinge%perience and ith advantaged technology at our fingertips. Today" State ;ank of:ndia ranks among the top G= commercial banks in Asia ith assets e%ceeding SW=9 billion. !e operate orldide through the most e%tensive netork ever oned

by a commercial bank. !ith over 8998 branches in :ndia and =G foreign offices in1 countries" our total deposits e%ceed S W )= billion.

SBI AN OVERVIEW

The State ;ank of :ndia is the largest commercial bank in :ndia in terms of profits" assets"deposits" branches and employees. At the end of the financial year G>>>/>1 +April/Harch-" the ;ank had total assets of Cs."1=6.)) billion +SW6I.I1 billion-" total depositsof Cs.G")G8.G8 billion +SW=G.>9 billion-" and made a net profit of Cs.16.>= billion+SW)) million- during the year. The ;ank has a vast domestic netork of 9">19branches and staff strength of G1)"8)=. :t commanded one/fifth of deposits and loans ofall scheduled commercial banks in the country.The origins of State ;ank of :ndia date back to 18>6" hen the ;ank of 2alcutta +latercalled the ;ank of ;engal- as established. :n 19G1" the ;ank of ;engal and to otherbanks +;ank of Hadras and ;ank of ;ombay- ere amalgamated to form the :mperial;ank of :ndia. :n 19==" the controlling interests of the :mperial ;ank of :ndia ereac5uired by the Ceserve ;ank of :ndia and the State ;ank of :ndia as created by an actof *arliament to succeed the :mperial ;ank of :ndia.

S+


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The origin of the State ;ank of :ndia goes back to the first decade of the nineteenthcentury ith the establishment of the ;ank of 2alcutta in 2alcutta on G ?une 18>6. Threeyears later the bank received its charter and as re/designed as the ;ank of ;engal +G?anuary 18>9-. A uni5ue institution" it as the first oint/stock bank of ;ritish :ndiasponsored by the @overnment of ;engal. The ;ank of ;ombay +1= April 18)>- and the

;ank of Hadras +1 ?uly 18)- folloed the ;ank of ;engal. These three banks remainedat the ape% of modern banking in :ndia till their amalgamation as the :mperial ;ank of:ndia on GI ?anuary 19G1.*rimarily Anglo/:ndian creations" the three presidency banks came into e%istence eitheras a result of the compulsions of imperial finance or by the felt needs of local uropeancommerce and ere not imposed from outside in an arbitrary manner to moderni$e:ndia's economy. Their evolution as" hoever" shaped by ideas culled from similardevelopments in urope and ngland" and as influenced by changes occurring in thestructure of both the local trading environment and those in the relations of the :ndianeconomy to the economy of urope and the global economic frameork.

MARKETING MIX FOR SBI:

PRODUCTS

T() 5+/


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Kong Term Floating Cate #eposit Scheme

*CS


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NRI S)+)9

State ;ank of :ndia" is best placed to serve Eon/ Cesident :ndians like you ith a iderange of deposits and investment banking services and to enable you to earn interest ratesamongst the highest offered anyhere in the orld.:nternational banking services of State ;ank of :ndia are delivered for the benefit of its

:ndian customers" non/resident :ndians" foreign entities and banks through a netork of=G offices,branches in 1 countries" spread over all time $ones. The netork isaugmented by a cluster of > banks" the orld over. ;ank's ?oint 4entures and Subsidiaries abroadfurther underline the ;ank's international presence.The services include corporate lending" loan syndications" merchant banking" handlingKetters of 2redit and @uarantees" short/term financing" collection of clean anddocumentary credits and remittances.

C/+/+5) 5-8-,

S;: is a one stop shop providing financial products , services of a ide range for large"

medium and small customers both domestic and international.

W/+8-, C55 F-5--,

Assistance e%tended both as Fund based and Eon/Fund based facilities to 2orporates"*artnership firms" *roprietary concernsP !orking 2apital finance e%tended to all segments of industries and services sector suchas :T

E?/+ C+)=

To 2orporates , Eon 2orporates

S+5), B


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As of no bank sees ma%imum transaction through alk ins. ;ut the bank is trying toconvert these to ATHs. :t is also emphsi$ing a lot on :nternet banking.The ;ank has its 2orporate 19branches as on Harch 1" G>>1" by far the largest branch netork of any bank in :ndia.The ;ank's domestic branches represent appro%imately 1)D of all bank branches in:ndia. About )=D of the ;ank's branches are located in rural areas" GID in semi/urbanareas and 16D and 1GD are located in urban and metropolitan areas respectively.ATHs / groing speedily to touch the 1>>> mark by Harch G>>G.This idespread branch netork enables the ;ank to raise a substantial and stable depositbase" to provide a ide range of lending products and other financial services and todiversify lending risks geographically as ell as by type of credit risk and customer. The;ank's ability to diversify and enhance the 5uality of service related to its deposit taking

as ell as its lending activities and other financial services is a fundamental strength ofthe ;ank.I-=5- A99/5)9 5-= S


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in an increasingly dynamic and global environment.The ;ank's effort to improve efficiency and customer service through use of technologyis reflected in the rapid pace of its branch computeri$ation. As at the end of August G>>1"the ;ank had G"6I8 fully computeri$ed branches at 6)> centers" covering I8D of the;ank's business. This includes 9=> of the top 1">>> business branches have already been

computeri$ed. All speciali$ed branches" like > and ?anuary G>>1" respectively. ;oth theproects ere conceived" developed and implemented ith in/house e%pertise" and thesuccess as idely acclaimed. KE>1" ith the aim of enabling the customers accessing theiraccounts from many designated centers at any time. As at August G>>1" ATHs erenetorked in eight cities covering G=> branches and 1>6 ATHs. There are >9 ATHsinstalled in 1>> centers all over the country. The ;ank has issued 1.) million ATH cards"accounting for > per cent of the ATHs card issued in the country" as on ?une G>>1.:nternet ;anking started on a pilot basis on the 1st August G>>> at 11 branches" and by?une G>>1" =1 branches in maor centers ere covered. For electronic transmission ofinter/branch data for reconciliation through the :nternet. The *roect C2


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f- 9)*

The ;ank&s Hanagement :nformation System +H:S- aims at providing timely andaccurate information to the management ith the help of advanced informationtechnology. Toards efficient data management"


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the country. !ith the addition of 16 more branches" a total of 11 domestic branchesere covered under the S!:FT netork. 4SAT netork covered 1)I critical branchesrendering cash/management services and S;: #atanet" used for inter/branch,inter/officedata transmission" covered 1">1 branches. lectronic #ata :nterchange proects forhandling customs transactions at airports and seaports have been implemented at 11

centers.

PEOPLE

%perience a hole ne orld of banking at our nely opened *ersonal ;anking;ranches +*;;s-/ often dubbed bouti5ue branches by others. 2ustomer friendlyknoledgeable staff ill cater to your financial re5uirements ith speed and efficiency.The continuing deregulation of :ndia's financial services sector has resulted in increasedcompetition for the ;ank. :n order to ma%imi$e shareholder value in this increasinglycompetitive environment" the ;ank aims to improve profitability hile consolidating itsposition as :ndia's leading bank" and capitali$e on opportunities presented by deregulationand other changes in the financial services sector to further enhance profitability through

the folloing strategies3a. :mprove customer serviceb. #evelop and market ne products and servicesc. :ncrease employee productivity through training and ne technologyd.. :mprove credit assessment" loan monitoring and debt recoverye. Selectively develop its international operations.H employees applied for retirement and G>"I8) ere permitted toretire.


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PROMOTION:

They consider print media as the best media. The advertising agency is Ape%Advertising.Their famous punchline is Qith you all the ayR.

PH#SICAL EVIDENCE:They give a lot of importance to the physical evidence. The ambience is ell taken careof. There has been a considerable improvement in the ambience of several branches.They have been emphasi$ing on glossy brochures" better infrastructure etc. hoever thiscannot be said about all the branches of S;:.



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SWOT FOR SBI

STRENGTHS:

:t has a branch netork of 91>> branches and has an e%cellent delivery channel.

;eing one of the oldest bank people have a lot of trust in the bank.

:ts :ndia Hillenium deposit scheme last year got total EC: #eposits of a huge =.= Wbillion hich makes up a large chunk of the total :ndia&s W)> billion foreigne%change.

WEAKNESS:

S;: ome Finance finds itself in a spot today because of its focus on housing proects

rather then retail housing.

:t is considered as one of the biggest ealth destroyers. S;: tops on si$e based

measures like revenues" *AT" total assets but appears among the bottom ranks forealth creations.

OPPORTUNIT#:

T A;EB :S TCJ:E@ T< *S :TS CTA:K @AH*KAE :E A ;:@ !AJ

AE# AKSavenues in a bid to cut costs.

nder the guidelines of C;: a bank can advance only G=D of its capital to a single

borroer. Eo due to the coming together of standard chartered and AEX @rindlays"they have an increased capital base. The bank can issue Cs. =>> crore to a singlecorporate. That makes it the only foreign bank ith this facility and hence has giventhe customers a choice that no longer have to go to S;: for this kind of a loan.



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INTRODUCTION TO CITIBANK

2itibank" the global bank from the S completed 9> years in 199G.:t has all alongaccepted :ndia&s place in the regional as ell as the global economy. The bank has

encashed its e%pectations and over the past 9> years has lived upto to of itscharacteristics3

Firstly" it is occupying premium position in the banking industry" and is making

2itibankers feel proud in orking for the bank and its customers feel prestigious tobank ith 2itibank.

Secondly" it has got ell integrated into the ethos and economy of the country.

2itibank continues to be a global leader in cash management and in :ndia volumes aregroing almost =>D every year in this area. ;ut the bu$$ord in corporation thesedays is shareholder value and risk management.

A great opportunity seen by 2itibank as3&A bank that ould go to the customers& andnot vice/versa. :t could foresee that since the late LI>s the habits of the :ndian consumer

ere changing&buy no" pay later L as overtaking Lsave no" buy later&. :ndia as alsobecoming one of the biggest markets for to/heelers" refrigerators and T4s ith annualgroth rates of around G=D. The customer and the product ere available" all thatseparated them as an easy loan.T() P5( B+)58)+

The bank had aimed to be a path breaker in its operations" herever it operated" and :ndiais no e%ception. :t pioneered in mid 196>s" among the foreign banks" recruitment of:ndians to managerial positions. :t ent to management institutes to recruit its futuree%ecutives. These e%ecutives" over a period of time have been tapped by the parent bankto manage its global operations. 2itibank has no become the biggest e%porter of highcaliber manpoer" hich as used in other banks. The bank&s softare subsidiary is one

of the biggest e%porter of bank oriented computer softare.

CENTER OF INTERNATIONAL BUSINESS% ABS


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MARKETING MIX FOR CITIBANK

PRODUCTS:

2itibank


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The various benefits can be divided under the folloing three heads3*ersonal banking


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!ireless alerts

other then these it also providesinvestment services

market snapshot

5uotes 0 charts

T//9 (5 () /< - /-+/*lanning for the future takes research. ere" you'll find a ide variety of planning tools"along ith resources to help you learn more about everything from money basics to creditand borroing and much more.O-) 5- )5+- */+) 5/


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M>> ithoutbreaking your entire deposit or paying interest on your on money. The deposits are

broken on a minimum loss basis so as to ma%imi$e returns for you.

I-)9*)- S)+) T() )9 5> / *58) >/ ,+/

2itibank :nvestment Services together ith international partners such as Alliance2apital and *rudential bring you the best of :nvestment ideas. !ith assistance from ane%pert :nvestment 2ounselor. >> hiletravelling abroad.

L/9 C5+= R)5)*)-

:n case you lose your 2itibank ATH,#ebit 2ard" e ill ensure that replacementa 2ard reaches you ithin )8 hours from the time you repost the loss at no charge.

The benefit of ousehold and ;aggage :nsurance has been introduced !.e.f.?uly 1" G>>>.This cover is not provided by 2itibank" EA and is subect to approval by The Ee :ndiaAssurance 2ompany" Ktd. Special e%clusions,limitations are as per policies issued by theinsurance company.

C()8 P+/) F5> C/)+9 / 59( 0/

Jou get a temporary overdraft facility of up to Cs.1>">>> if your Account is lo on cashflo. Jou ust need to call 2itiphone. That's all.

N5/-5 B5-8-, O-) 5-8 5+/99 () /

!ith 2itibank you can deposit your cash and checks at any of our branches in Humbai"#elhi" 2alcutta" 2hennai or ;angalore. All our branches are open until Ipm on allorking days so you can visit us at your convenience.

D5AD+50 F+)) 5-= /-)-)- =+50 =))+>

?ust instruct us on the phone and have a draft delivered at over )> locations ithin G)hours. All from the comfort of your home or office

" CENTER OF INTERNATIONAL BUSINESS% ABS


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C)5+-, A9 ">>> if there is a shortfall inyour Account balance. So" if your cash flo needs temporary bridging ith an overdraft"ust call 2iti*hone and e'll process your re5uest instantly.

F+)) D+509

Jou can get free drafts dran on any of 6> locations" up to Cs. 1> lakh per eek. ?ust call2iti*hone from the comfort of your home or office and e'll have the draft delivered toyou ithin G) hours.

;ook a draft through the :nternet" and e'll have it delivered to third parties absolutelyfreeN

C59(C()8 P8


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C59( D))+>

Jou can order cash beteen Cs.1>>> and Cs. G=">>> per day at your residence or office"at a small charge.

I-)+> C()


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W+) T+5-90)+

!ires received by ) p.m. local time ill be credited to your account no later thanthe ne%t business day

PRICE

The 2itibank *ersonal Koans are clean cash loans. They do not re5uire any security"collaterals or even guarantors.:n many cases" 2itibank on't charge you for using non/2itibank ATHs" as long as youmeet minimum balance re5uirements or stay ithin the transaction limits set for youraccount. For details" consult the C5-8 O--) C)- A,+))*)-. +Follo the linkbelo and check the section on *ackage *ricing or the (2hecking at a @lance( section.-;asic 2hecking and ;asic Savings are e%ceptions. !ith those accounts" 2itibank maycharge you for using a non/2itibank ATH. To find out more" consult the 2lientAgreement and see the Section on (;asic ;anking.(


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DOCUMENTATION CHARGES

These charges also need to be paid up/front to the lender for processing and verifying allthe documents. These charges also add to your cost of borroing and are negotiable.

PREPA#MENT CHARGESThere are certain lenders ho levy a prepayment charge to the borroer in case of earlyrepayment of the loan. These charges range beteen 1 to ) per cent of the balanceoutstanding" hich is repaid. This adds to the cost of the loan.

PENAL INTEREST

:n case you delay your repayments" the lender charges a penal interest of about G per centof the amount due." there are no fees for accessing your accounts ith 2itibank .>>

;ond 2oupon Cedemption +per series- W1>.>>

2heckbook,2heck days of opening- WG=.>>

2heck :ssued in Foreign 2urrency +!orldlink- WG=.>>

2heck Ceturned,*aid Against :nsufficient,navailable Funds +overdraft-G W>.>>

2lerical Cesearch +per hour" one hour minimum- WG=.>>

2oin 2ounting =D

2ollection of 2hecks #ran on Foreign ;ank)

/ if less than .S. W1>>.>>/ if .S. W1>>.>> or more

W1>.>>W>.>>

2ollection of Eotes and Sight #rafts on #omestic ;ank WG=.>>

2onsular,4erification Ketter WG=.>>

2opy of 2ancelled 2hecks= W=.>>

2ounter 2hecks W=.>>

#eposited 2heck Ceturned npaid W1>.>>

#omestic ;ank 2ollections) WG=.>>

Foreign 2urrency %change W1">>> and over/ nder W1">>>

Eo2hargeW=.>>

:nterim Statement W=.>>

Kegal *rocess 2ompliance +levies" attachments" etc.-/ E>" effective ),1,>G.

W1>>.>>

Hiscellaneous 2opies +:CS Forms 1>99" #eposit Ticket" etc.- W=.>>



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Honey >

Honey .>>

.>>

*ostdated 2heck Ce5uest6 WG=.>>

7uicken +*er Statement *eriod- W9.9=

Ceturning G- WG.>>

Safe #eposit ;o% Annual Cental 4aries

Safety 2heck W=.>>

Staff Assisted ;ill *ayments +*er Statement *eriod- W).9=

Statement 2opy W=.>>

Stop *ayment Ce5uest W>.>>

Temporary Safekeeping for First 1= #ays/ ach Additional Honth or portion of Honth

Eo2hargeW1>.>>

Travelers 2hecks 1.=D

!ire Transfer/ :ncoming #omestic and :nternational/


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EC: Services in :ndia1. HumbaiG. #elhi. 2hennai). yderabad

=. 2alcutta6. ;angaloreI. *une8. ;aroda9. Ahmedabad;ranch locations are at1. HumbaiG. #elhi. 2hennai). yderabad=. 2alcutta

6. ;angaloreI. *une8. ;aroda9. Ahmedabad1>. ?aipur11. 4adodara

PROMOTION

;iggest spender on promotion is considered to be 2itibank" hich spends Cs.1= crore onadvertising" of hich about =>D is" spend on boosting its credit cardbusiness. The bank hoever spends Cs. 6> crore on marketing. 2itibank

is glit$y and high profile and it has the idest portfolio/it is into creditcards" personal loans and other such products. :t also introduced localunderstanding of a global level of service that came to :ndia.

2itibank has been coming up ith various schemes from time to time. Hostly it usesprint media to promote its products. :t has several punchlines of hich the most famousareT() B))+ W5> T/ M5-5,) #/ S5+9 H)+).The 2iti Eever Sleeps.Apart from these it also goes in for various schemes in collaboration ith companies like:ndian C5-8 S)5 O59/-9

%clusive round/the year Special


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ATH facility" ith these 2ards you can no enoy additional e%clusive offers that comeyour ay every no and thenN Haking the hole year a special occasionN

:ndian oil 2itibank international card se this fuel efficient 2redit 2ard anyhere in theorld and get free fuel in :ndiaNEo transaction fees at :ndian


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SWOT OF CITIBANK INDIA

STRENGTHS

1. ;eing the first entrant in the auto/finance business the brand recall is high

among consumer.

G. As it has tie/up ith Haruti hich is the largest seller of automobile in:ndia. :t has an edged over its competitors as hen consumer goes todealer.

. *eople associated 2iticorp ith Haruti.

). The 2iticorp has very ide netork hich gives it an e%tra leverage.

=. :t has the first mover advantage.

6. Alongith Times @roup it brought in Times


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ANAL#SIS OF QUESTIONNAIRE

To find hat does the consumer believe about the marketing mi% of the above threebanks3

Q.1. W(( /0 () 0//-, 5-8 =/ >/< 55 9)+) /0 :

ICICI

SBI

CITIBANK

people contacted for filling up of the 5uestionnaire )6Ddealt ith :2:2:">D ith the S;: and onlyG)Dith the 2itibank. There is only a marginal differencebeteen the no. /< ,)-)+5> 55 0+/* 5-89

ATM

C+)= C5+=

L/5-9

O()+9 J95-,9 =)/99


SEVICES AVAILED FROM

ICICI

46%

SBI

30%

CITIBANK

24%

SERVICES AVAILED

ATM

26%

CREDIT

CARD

42%

LOANS

14%

OTHERS

18%


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R)59/-5)

>D of these ere S;: customers- hile G>Dfeel that they are high +out of these 6>Dere dealing ith :2:2:" and G>Deach for S;: and 2itibank-.

Q.6. W(5 9 () )9 9/ (( >/< ,) / 8-/ 5/ >/


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66D of the total respondents feel that the current promotional schemes of their respectivebanks are both appropriate as ell as understandable.

Q.!. C5- >/< +)5 () 59 5=)+9)*)- /0 >//< /-9=)+ 59

)9#)9

N/

(( 9//< ,)-)+5> )+0/+* >/


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Q.1$. A+) () +5-()9 /0 >/


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services and its 5uality has not changed at all +out of these 6ID ere S;:" D of :2:2:and none of the 2itibank customers.

Q.12. H/ =/ >/< 0-= () 5*)-) /0 >/ G//=A)+5,)

P//+

6GD of the total respondents found their banks ambience as very good +61D of :2:2:"6.)D of S;: and G.GD of 2itibank customers. )D felt that the banks ambience askind of D of the respondents had complaints regarding the ambience out of hich6>D ere customers of S;:" >D of :2:2: and only1>D of 2itibank customers.

Q.13. H/ 9 () 5/ F+)-=>

F/+*5B5=

=)D of the respondents had very good e%perience ith the bank&s staff. 6ID of the :2:2:customers found their staff very friendly" hile only 1=D of S;: and 18D of 2itibankcustomer

Marketing Mix in Banks

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