A

PROJECT REPORT

ON

SERVICE MARKETING

At

STATE BANK OF INDIA

BY

S BALRAM

11MBMA34

In partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under esteemed guidance of

Dr.Chetan SrivastavaFaculty member

SCHOOL OF MANAGEMENT STUDIES

UNIVERSITY OF HYDERABAD

Page | 1

INTERNSHIP CERTIFICATE

This is to certify that Mr. S.BALRAM pursuing M.B.A at School of

Management Studies, University of Hyderabad bearing Roll no:

11MBMA34; batch 2011-2013, successfully completed his summer

internship during May-July 2012.

The project was undertaken by him in Marketing titled Service Marketing

Project at SBI Secunderabad A.P.

The project on evaluation fulfils all the stated criteria & the student’s

findings are his original work.

I hereby certify his work excellent to the best of my knowledge. We wish

him all the best for his future endeavours.

MURALI MOHAN

( Asst. Gen. Manager )

Page | 2

Certificate By The Guide

This is to certify that candidate S.BALRAM bearing Roll No: 11MBMA34 is

a student of School Of Management Studies at UNIVERSITY OF

HYDERABAD, prepared this project work entitled “Service marketing

Project” under my supervision.

Dr.Chetan Srivastava

Faculty member

SCHOOL OF MANAGEMENT STUDIES

UNIVERSITY OF HYDERABAD

Page | 3

Declaration

I hereby declare that this summer project report titled, SERVICEs

MARKETING AT STATE BANK OF INDIA SECUNDERABAD. is the

result of my own effort in the training which I did as part of the curriculum. It

has not been duplicated from any other earlier works and all information

provided in this report is genuine. This report is submitted for the partial

fulfilments of MBA program. It has not been submitted to any other

university or for any other degree.

Place: Hyderabad S.BALRAM

Date: 28/08/2012 (11MBMA34)

Page | 4

Acknowledgement

The research on “Service Marketing Project at State Bank of India” has

been given to me as part of my curriculum. I have tried my best to present

this information as clearly as possible using basic terms that I hope will be

comprehended by the widest spectrum of researchers, analyst and student

for further studies.

I would like to take the pleasure of this opportunity to express my heartful

gratitude to my guide Professor Dr.Chetan Srivastava, faculty Guide

(Faculty Member, School Of Management Studies, University Of

Hyderabad) & Organisation Guide MURALI MOHAN Asst. Gen. Manager

who took personal interest and gave valuable suggestions throughout my

work and completion of the project. I thank all my faculty members of MBA

department for their valuable suggestions throughout my course. The

importance of the moral support and good wishes of my parents and

friends is external and I am very much indebted to them. Finally I thank all

my friends who directly or indirectly helped me a lot during my project.

S.BALRAM

(11MBMA34)

Page | 5

CONTENTS

S.NO PATICULARS PAGE NO

1 BANKING IN INDIA 6

1.1 ROLE OF BANKS IN INDIAN ECONOMY 8

1.2 CLASSIFICATION OF BANKS IN INDIA 9

2 BANK SERVICES IN INDIA 10

3 SBI CORPORATE PROFILE 15

4 CUSTOMER EXPECTATION 17

5 CONSUMER BUYING BEHAVIOR 18

6 STRATEGY 19

6.1 Industry Analysis 19

6.2 Competition Analysis 21

7 MARKET OFFERING VIZ MARKETING MIX & BRAND POSITIONING 22

8 BLUE PRINT FOR SBI ATM CUSTOMERS 29

9 BLUEPRINT FOR DEPOSITING MONEY IN SBI ACCOUNT 30

10 DEMAND & CAPACITY MANAGEMENT 31

11 CUSTOMER PERCEPTION & SATISFACTION 32

12 CUSTOMER RELATIONSHIP & LOYALTY FOCUS 33

13 CONCLUSIONS 33

14 RECOMMENDATIONS 33

15 APPEDIX 34

Page | 6

16BIBLOGRAPHY

38

1. BANKING IN INDIA

Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras all three of which were established under charters from the British East India Company. In India, currently there are 25 public sector banks and 30 private sector banks.

We can divide banking history into three parts.

(1) Post Independence(2) Nationalization(3) Liberalization

Post Independence: - India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

The Reserve Bank of India, India's central banking authority, was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

Page | 7

Nationalization: Despite the control of RBI, Indian banks continue to operate by private person except SBI. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. The Government of India issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969.  6 more commercial banks nationalized in 1980

Liberalization: In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. Currently banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks.

OBJECTIVES

Comparative study of services offered by SBI and other banks.

1.1 ROLE OF BANKS IN INDIAN ECONOMY

A proper financial growth is important for economic growth of developed and developing economy. Commercial banking sector should be well regulated & efficient because it is the financial backbone of households. Banks plays various roles:

Capital Formation: Generally rate of saving is low in underdeveloped country because of deep rooted poverty but even if proper mechanism there for savings of domestic household that capital can be available to use for entrepreneurs for productive purpose.

Monetization: The banks, by various rural and urban branches can monetize the underdeveloped sector of the economy.

Page | 8

Innovation: Entrepreneurs do various innovations to generate job and improve the quality of life of the citizens. These innovations which need fund for efficient operation are provided by banks. Banks provided credit for innovative firm.

Finance for Priority Sector: Commercial bank generally hesitate to give credit to these underdeveloped sector because these loan may become NPA. Due to RBI regulation these banks take risk & provide growth opportunity to these sectors by providing and giving credit.

Cheap Money Policy: Bank sucks or pumps money according the requirement of the economy. Like in recessionary pressure cheap money flows but in inflationary interest rises to tackle liquidity in the system.

ROLE OF RBI

Monetary Policy. Regulator & Supervisor of Financial System Manager of Exchange Control Issuer of Currency Development Role

1.2 CLASSIFICATION OF BANKS IN INDIA

Public sector Private sector Cooperative Development

SBI & Associates Axis Rani Laxmibai urban Co-op Bank,

RRD

Bank of Baroda ICICI Mehsana Urban Co-Op Bank Ltd.

IFCI

Dena Bank HDFC Surat Peoples Coop Bank Ltd.

IDBI

Canara Bank ING Vyasa Kalupur Commercial Coop.Bank Ltd.

NABARD

UCO Bank HSBC The Kapol Co-operative Bank Ltd.

Syndicate Bank Standard Chartered Adarsh Co-Operative Bank Ltd.,

Page | 9

Vijaya Bank Kotak Mahindra Sanmitra Sahakari Bank Ltd.,

Examples of banks in India.

2. BANK SERVICES IN INDIAThere have been various services provided by bank in India to customers. They can classified into 5 categories based on the target segment & the money used by the customers. There has been various sub categories in every broad category.

(A) Personal Banking:

There has been various products/service available in personal banking sector. They are discuss these services one by one.

(1) Accounts & deposits

Type of Deposit Feature

Dream Deposit Term deposit plan that enable the customer to realize their dream at every stage of life

Fixed Deposit Give attractive returns to customers

Recurring Deposit The smallest of customer saving into large one.

Saving Account It is providing 4 percent interest acc to RBI guidelines. Customer can avail the experience of banking through ATM, Mobile, Internet

Page | 10

Salary Account Customers can take advantage of efficient payroll system

(2) Loans

Type of Loan

Home loan

Personal loan

Commercial Vehicle loan

Car loan

Loan against security, Gold, Ornaments etc.

Other different types of loans are also provided by loans to meet the various requirements of the customers

(3) Cards

Type of Cards Feature

Debit Card These cards offered by banks which has wide acceptance at various banks ATM, Various shopping malls gives wide variety of convenience to customers. They work on the principle of pay now buy latter.

Credit Card These card works on the principle of buy now pay latter. It has enhanced the buying power of the consumers.

Corporate Cards These card offer great control, enhanced efficiency & cost saving to companies

Page | 11

Different card offers by various banks based on which segment they want to serve.

(4) Investments : Banks offer personalized solution to their customers based on their fund capacity and risk appetite of the particular customers to deliver greater returns.

Banks offer various investment products like bonds, GOI bonds, Mutual funds, IPO, Insurance product etc.

(B) Wealth Management

It is the different function in banks that give the wealth management services to HNI, manage their portfolio. It is the team of experts on investment, banking loans, property services etc. which provide expertise advice to their client and manage their portfolio to maximize the return.

(C) Corporate Banking

This service can be divided into various heads for the corporate client.

.

Page | 12

Service Features

CMS(Cash Management Service) Banks provide full range of receivable & payables services to meet company’s complex cash management service

Global Trade Service This service designed to meet a range of short term to medium term trade financing requirement to seize new business opportunity.

Forex Desk Banks propose immediate offers for cash, tom, spot & forward rates depending on company’s requirement

Derivative Desk Banks offer complete interest rate risk management services through derivative product.

Investment Banking Banks offer M & A advisory, underwrite the IPO of companies through alone or forming syndicate.

Project Finance Banks provide funds for various projects to companies operating in different sectors based on the attractiveness of the projects & sectors.

Structured Finance It enables the corporate clients to access fund through cost efficient structures. Banks provide investment opportunities in various debt securities.

Page | 13

(D) Business Banking

Service Features

Current Account & Service Benefit is provided by speedy payment & collection.

Business Loan For SME sector, timely finance to leverage on business opportunity

Trade service Various services like Letter of credit, Bank guarantee, Export bill negotiation etc. are provided by banks

Advisory Service Banks provides niche & exclusive investment banking service to SME sector. It manages capital raising and special situation solutions.

Page | 14

3. SBI CORPORATE PROFILE

State Bank of India is the country’s largest commercial Bank in terms of profits, assets, deposits, branches and employees. State Bank of India has an extensive administrative structure to oversee the large network of branches in India and abroad. The Corporate Centre is in Mumbai and 14 Local Head Offices and 57 Zonal Offices are located in important cities spread throughout the country. The Corporate Centre has several other establishments in and outside Mumbai, designated to cater to various functions.

The Corporate Accounts Group is a Strategic Business Unit of the Bank set up exclusively to fulfill the specialized banking needs of top corporates in the country.

State Bank of India has 157 foreign offices in 32 countries across the globe.

SBI SHARE HOLDING PATTERN

Source:SBI

Page | 15

(A) Banking subsidiary

(B) Foreign subsidiary

SBI International (Mauritius) Ltd.

(C) Non banking subsidiary

SBI Capital Markets Ltd SBI Funds Management Pvt. Ltd SBI Factors & Commercial Services Pvt. Ltd SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) SBI DFHI Ltd SBI General Insurance Company Limited)

(D) Joint Venture

1.    SBI Life Insurance Company Ltd (SBI LIFE)

2.    SBI General Insurance Company Limited

Page | 16

4. CUSTOMER EXPECTATION

High

Low

(1) Minimum Tolerable Expectation: After contacting several existing customers (Retail) of SBI, we realized that some of them have very less expectations. They have opened the saving account because it is India’s largest public sector bank & their money is safe. Though many of them don’t expect service as good as that provided by other private bank, but came to SBI for many loans like Teaser Loan as its interest rate is least in the industry.

(2) Acceptable Expectation: Many customers expect that bank employees will listen to their problem & serve them in a adequate manner.

(3) Experienced Based Expectation: Many customers believe that most of the time SBI provides good & fast service but when the staff is on less & during rush hours, due to higher load they have to wait longer period than usual.

(4) Normative Expectation: Many customers, especially students who have taken education loan, believe that its interest rate charges are more than what many PSB offer so they expect that SBI will provide the various installments at the right time without much delay in various procedures. Many corporate customers believe that they are providing crores of rupees business to SBI so the bank will provide loan & credit for their future business expansion easily.

Page | 17

(5) Ideal Expectation: Everyone says that you name any product/service in the banking sector and you will find it at SBI. So many customers open their current and saving account at SBI because they are looking for a one stop banking service at SBI. It provides insurance, mutual fund and all other the services based on the customer’s requirement.

Many HNI & corporate customer expect that SBI will provide personalized attention to grow their wealth based on their risk appetite.

Expectations of customer:

Minimum waiting time (approximately 5-7 min) Pleasant ambience.

Automatic update on new products/services/schemes.

Floating rate should be most competitive in the industry.

Highest risk free rate of return.

Simplicity of documentation procedure.

There should not be any hidden fee & charges.

Personalized banking & suggestion based on individual risk appetite.

5. CONSUMER BUYING BEHAVIOR

1) Need recognition: SBI is providing its service to retail customers as well as corporate clients. For a retail client their need is safety of their money. Retail customer are looking for risk free growth of their saving. Corporate client is looking that SBI will manage their cash flow requirement in such a way that SBI will deploy the idle fund in the most efficient manner. Meet their requirement of the short term fund in cost effective manner.

2) Information Search:Information is available in the following waysa. Internet: The official website of SBI and other government sites promoting Indian

banking. Customers can also give their contact number to the agent so that an SBI employee can contact him back.

b. Bank Branches: SBI & its associates gas the largest network through bank branches. So the customer can visit any of the bank branches to gather information.

Page | 18

c. Friends\Colleagues: People who have already availing SBI services.

The customer then gathers information for the following parameters:a) Price (interest rate) b) Convenience (Distance) c) Timeliness of serviceOther factor like reliability, assurance responsiveness etc. can also play important role.

3) Evaluation of alternatives:There are more than 50 banks operating in India currently. So the customers can select a particular bank based on their requirement like HDFC bank has the specialization in providing home loan and ICICI is the largest private sector bank.Customers can do a comparative analysis of various services provided by different banks based on information available on the internet etc.

4) Purchase decision:For purchasing a service, the customer has to open a saving & current account most of the time. It may be possible that for credit card they may not required to open account. All the terms & conditions are signed after mutual agreement & RBI norms.

5) Consumption of service:Customers can avail the service consistently as long as they wish to.

6) Post-purchase evaluation:The customer evaluates the level of his expectation and the level of services actually offered which is reflected in the followinga. Feedback book: The customers are provided with a feedback book which has two

broad sections in it 1) Tell us what you liked about the SBI banking services 2) Tell us our areas of improvements 3) Any complaints in particular

b. Customers can evaluate SBI services on carious service quality dimension like reliability, responsiveness, assurance, empathy, tangibles. If they find these parameters equal to or above their expectations, they will become loyal customers of the bank.

6. STRATEGY

6.1 Industry Analysis

The total assets size of the banking industry rose by more than five times between March 2000 and March 2010 - from US$ 250 billion to more than US$ 1.3 trillion - a Compound Annual Growth Rate (CAGR) of 18 per cent compared to the average GDP growth of 7.2 per cent during the same period. CAR stands around 14 percent which is higher than 8 percent based on BASEL

Page | 19

requirement. According to the central bank's WSS, Indian bank loans increased by 19.9 per cent year-on- year (y-o-y) as of July 1, 2011. Deposits rose by 18.4 per cent from a year earlier.

STRENGTH

Strong regulatory system Economic growth

Relative insulation from external market.

India is becoming the IT hub.

Credit Quality of bank

Extensive reach

OPPORTUNITY

Only 40 % residents have access to banking services.

Growing per capita income.

Liberalization of ECB norms.

WEAKNESS

Quality of service is not upto the mark in rural sector.

Refusal to dilute stake in PSB

Weak sales & marketing team of PSB compare to foreign bank.

THREAT

Increasing NPA. Increasing dependency on global

banking system.

Threat from cyber attack.

Rising inflation

POLITICAL

In the current scenario, the image of the Govt. of India is being affected due to corruption, inability to continue reform, delays in project clearance, etc. All these factors are affecting investment sentiment.

ECONOMICAL

GDP grows by 8.5 % in fiscal year(2010-2011)

Inflation above 9.5 % forced RBI to control demand by increasing interest rate.

SOCIAL TECHNOLOGICAL

Page | 20

Various strata of society have started using M-banking, Internet banking.

.

Banks are investing heavily to computerize their operation.

Banks are using ERP, CRM and SCM to improve efficiency.

Internet banking, M-banking helping in financial inclusion.

Segmentation

Various aspects on the basis of which SBI is doing segmentation are

1) Based on Tenor2) Based on Geography3) Based on SEC4) Based on volume (Retail V/s Corporate V/s Govt.)5) Based on sector(Priority Lending)

Targeting

SBI is targeting the retail segment as well as the corporate and government business. Retail segment has very less value per account compared to the corporate segment. It has different products available to meet different consumer segment needs.

Positioning

SBI has positioned itself as a Banker to Every Indian. One can be assured that any banking service will be available with SBI. Further, being a Public Sector Bank, it also promulgates a strong Trust among its clients. SBI has positioned itself as a mass marketer in the consumer mind. One can name any banking service and it will be available with SBI. All the banking products/ services are available with SBI to satisfy different customer segment need.

6.2 Competition Analysis:

Page | 21

Though all the banks are competitor of SBI, we have considered India’s second largest PSB & largest and second largest private sector bank as its major competitor. We have done a comparison of SBI with other competitor on key success factor.

Key Industry Success Factor

Weighting SBI PNB

(Competitor 1)

ICICI

(Competitor 2)

HDFC

(Competitor 3)

Extensive Distribution

0.3 9 7 7 7

Economies of Scale

0.2 8 7 8 7

Product Range 0.2 8 8 8 7

Customer Focus 0.25 7 6 6 7

Product Innovation

0.05 6 5 9 9

Total 7.95 6.85 7.25 7.1

SBI has a clear advantage over others.

7. MARKET OFFERING VIZ MARKETING MIX & BRAND POSITIONING

1) PRODUCT / SERVICE

SBI has its presence in various domains.

Page | 22

(A) Personal Banking

State Bank of India offers a wide range of services in the Personal Banking Segment. Various services in personal banking domain include:

SBI term deposit SBI recurring deposit SBI home loan SBI education loan SBI car loan SBI personal loan SBI loan for pensioners Loan against mortgage of property Loan against shares & debentures

(B) Agriculture

State Bank of India Caters to the needs of agriculturists and landless agricultural labors through a network of 8750 rural and semi-urban branches.

(C) International Banking

The services include corporate lending, loan syndications, merchant banking, handling Letters of Credit and Guarantees, short-term financing, collection of clean and documentary credits and remittances.

Page | 23

(D) Corporate Banking

SBI is a one shop providing financial products / services of a wide range for large , medium and small customers both domestic and international.

Working capital financing Term loan

Deferred payment guarantee

Corporate loan

Export credit.

(E) SME

The Bank has financed over 8 lakh SSI units in the country. It has 55 specialized SSI branches, 99 branches in industrial estates and more than 400 branches with SIB divison. 

(F) Services

State Bank Vishwa Yatra Foreign Travel Card

State Bank Vishwa Yatra Foreign Travel Card is available in six Foreign Currencies viz. US Dollars (USD), Pound Sterling (GBP), Euro (EUR), Canadian Dollar (CAD) and Australian Dollar (AUD), Japanese Yen (YEN).

Broking Service

SBI Capital Markets Ltd. has expanded its retail broking network to help investors carry out their broking transactions with confidence.

ATM

State Bank offers the convenience of over 21,000 ATMs in India, the largest network in the country. This means that customer can transact free of cost at the ATMs of State Bank Group and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card.

Page | 24

Internet Banking

www.onlinesbi.com

The Internet banking portal SBI, enables its retail banking customers to operate their accounts from anywhere anytime, removing the restrictions imposed by geography and time. It's a platform that enables the customers to carry out their banking activities from their desktop, aided by the power and convenience of the Internet.

Using Internet banking services, customers can do the following normal banking transactions online Funds transfer between own accounts. Group transfer to accounts in State Bank group Inter banks transfer to accounts with other banks. Online standing instructions for periodical transfer for the above Credit PPF accounts across branches. Request for opening new accounts. Request for closure of loan accounts. Request for issue of cheque book. Utility bill payments.

RTGS / NEFT

RTGS stands for “Real Time Gross Settlement”. It is an electronic payment system in which payment instructions between banks are processed and settled individually and continuously, on a real time basis, throughout the day. It is available for transaction value of Rs.2.00 Lacs and above.

 NEFT stands for “National electronic fund transfer”. It is another electronic payment system in which payment instructions between banks are processed and settled on deferred net settlement (DNS) basis at fixed times during the day. There is no minimum or maximum stipulated transaction value for using this facility.

E-RAIL – To Book Railways Ticket Online.

The facility has been launched 1st September 2003 in association with IRCTC. The scheme facilitates Booking of Railways Ticket Online.

Page | 25

E-PAY

Bill Payment (e-Pay) will let customers to pay their telephone, mobile, electricity, insurance and credit card bills electronically over our Online SBI website.

If customer’s biller presents bills online, customer can also give SBI AutoPay instructions and SBI will pay the bills as and when it falls due.

SAFE DEPOSIT LOCKER

For the safety of customers valuables SBI offer its customers safe deposit vault or locker facilities at a large number of branches. There is a nominal annual charge, which depends on the size of the locker and the centre in which the branch is located.

2) PRICE

Home Loan

Loan amount Upto Rs.30 lacs

Above Rs. 30 lacs to Rs. 75 lac

Above Rs.75 lac to Rs.5 Cr.

Above 5 cr.

Interest rate during 1styear     

8.75% 8.75% 10% 10.25%

Interest rate during 2nd  & 3 rd year

9.50%. 9.50% 10% 10.25%

Interest rate from  4th year onwards

9.75% 10.00% 10% 10.25%

Car Loan

Loan amount Below  Rs.5 lacs Rs.5 lacs and above

Interest rate during 1styear     

9.25% p.a. 9.25% p.a.

Interest rate during 2nd  & 3 rd year

10.25% p.a. 10.25% p.a.

Page | 26

Interest rate for 4th & 5th year

11.25% 11.00%

Interest rate for 6th & 7th year

11.25%         11.00%          

All the interest charge & fee are nationalized and same in all the branches. Further detail is available on following website. (www.sbiindia.com)

3) PLACE

It is widely distributed bank in India with 26,500 bank branches including those of associate banks. It is trying to provide banking services to masses. It has already opened some of the branches outside India to provide service to foreign travelers & NRI.

4) PROMOTION

SBI is using different- different medium to promote its services to target market

Personal Communication Sales Promotion

Instructional Material

Advertisement through print & electronic media

Public Relation

Page | 27

(SBI advertisement in newspaper)

5) PHYSICAL EVIDENCE

SBI provides various physical evidences to bring tangibility in its services. It includes:

Website Brochure

Challan after depositing money to account

Cheques

All the tangible infrastructure in bank branch

Page | 28

Various form for documentation

Fixed deposit contract, etc.

6) PROCESS

Processes to avail various services are standardized across the branches. The customer has to follow particular procedure to avail those services. Also, the employees have to follow certain pre-defined procedure to provide those services to the customers.

7) PEOPLE

People are the most important part of the whole service delivery process. In the case of services, people are on both sides i.e. the service providers and the customers. SBI has employee base of around 2 Lac. Any new employee - a clerk or a probationary officer is been given proper training for 3-6 months. New joiners are trained through various procedures to deliver services to customers. It depends on the customer what kind of services he wants to avail from the bank and his cooperation in following the whole process and making it easier for the employee to service him, thereby making him an important part of the whole process.

BRAND POSITIONING

SBI has created brand in the consumers as well as competitors mind in such a way that they take SBI as the market leader. Consumer perception about it is as the safest bank in India. Every banking product and service is available with SBI so they treat it as the one stop shopping. Customers perceive that SBI will be able to provide the services in most economical way due to its economies of scale and it is the largest PSB in India.

8. BLUE PRINT FOR SBI ATM CUSTOMERS

Page | 29

Page | 30

9. BLUEPRINT FOR DEPOSITING MONEY IN SBI ACCOUNT

Page | 31

10. DEMAND & CAPACITY MANAGEMENT

1) As various banking service are seasonal & unpredictable, so matching capacity with demand efficiently becomes a cumbersome task. The important step which SBI does is to separate bank’s factory like transaction (like check encashment, withdrawal etc) which are more standardized than personalized ones (like opening new account, loan application etc). Factory like transactions are more predictable based on the no of account & past trends. Matching infrastructure capacity (people, process, system) for factory transaction is the very first step.

2) Bank changes working hour to meet the varying demand, but when overtime crosses the particular limit bank manager request for more personnel from headquarter.

3) On the job multi skill development program for employee to meet supply in peak hour.

4) Mobile van used by SBI to meet demand from rural area. It reduces the load on the bank branch.

5) Dollar value per employee is the index used to standardize the no of employee per branch.

6) When

Credit growth rate > Deposit rate (Bank Increase interest rate)

Credit growth rate < Deposit rate(Bank reduce interest rate)

7) SBI has the maximum number of ATMs (25,000 as on 31 March, 2011) to reduce load on bank branch.

8) SBI has been continuously recruiting Clerk & Probationary Officer to meet the manpower requirement at various branches.

9) More & more automation is done to reduce the load on manpower & efficient use of infrastructure (Automatic note counting machine).

Page | 32

11. CUSTOMER PERCEPTION & SATISFACTION

SBI is the market leader in banking. It has been performing really well but some gaps were observed by the existing customers through our primary study. We have found that consumer perception & satisfaction vary from those who have only SBI account than those who posses SBI account as well account in other private sector banks like ICICI & Axis.

Those who have only SBI account has level of expected services is low. Those who have avail the services from private sector bank has level of expected services is high. So SBI needs to increase the level of services to meet the customer’s expectations.

Customer perception about SBI is determined by their perception about private sector bank. They perceive that in private banks, infrastructure facility is good and well maintained. There is less congestion in private banks. Average waiting time is higher in SBI than other private banks. Waiting time is very high in SBI during peak hours. Many customers perceive no of employees per 1000 accounts is very less in SBI than other private sector banks.

Page | 33

12. CUSTOMER RELATIONSHIP & LOYALTY FOCUS

Employees at SBI have been given formal training to maintain cordial relationship with customer. Bank employees are trained to remember the names of the customers who previously

visited or visit frequently. Customers of the Bank can meet senior executives of the Bank on

15th of every month (between 3.00 p.m. and 5.00 p.m.) without any prior appointment and discuss issues relating to their accounts/banking transactions. In case 15th of month is a holiday, customer can meet him on the next working day. In case, excessive delays are experienced in resolving their problems, customers can contact the helpline of the Local Head Office, under whose control the branch functions.

LOYALTY REWARDS PROGRAM is a scheme to reward the existing as well as new retail internet banking customers of SBI. It is the stimulus for the customers to transact online, earn reward points and redeem the points for cash. This process is one of the ways to reward their esteemed customers for their continued support and loyalty.

13. CONCLUSIONS

SBI is at the top of consumer’s share of mind & share of heart in Indian banking sector. It has the largest network of bank branches across the India which enables it to deliver its service in various geographic areas. SBI is the market leader and others follow what SBI does. SBI has different targeting strategy for various product/ service based on its target segment. As it has captured more than 20% share of market it can leverage on its economies of scale and economies of scope. Consumer perceive SBI as the one stop shopping where they can meet the all the banking service requirement. Consumers perceive SBI as the safest bank due to its government holding & large customer base.

14. RECOMMENDATIONS

Our group recommends the following few points which would help SBI in improving its consumer satisfaction which in turn would also improve its consumer perception.

SBI bank branches should improve to its physical infrastructures (interiors as well exteriors) to make it comparable to the private bank. Though it is the gradual and slow process, so SBI can start with urban cities first.

Promotion on Electronic media is less when compared to private banks. Bank can increase expenditure on this to improve its brand building further.

Page | 34

15. APPEDIX

QUESTIONNAIRE

SBI Bank Service Quality

1) Name

2) Ageo 18 – 25

o 26 – 35

o 36 – 45

o 46 – 55

o >55

3) Occupation

4) Primary purpose with the Bank

Current Account

Online Banking

Loan Purpose

Savings Account

Locker Service

Others ___________

5) Was the external appearance (location, premises, surroundings etc.) of the bank visually appealing? (Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response):

1 2 3 4 5

Page | 35

6) Rate the internal ambience of the bank. (Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response):

1 2 3 4 5

7) Rate the interaction quality of the employees (Were they responsive, empathetic) Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response:

1 2 3 4 5

8) Rate the appearance and enthusiasm of the employees. Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response:

1 2 3 4 5

9) Rate your knowledge about grievance redressal policies of the bank. Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response:

1 2 3 4 5

10) Rate your service perception about the product (savings account, ATM card, credit card, demat account, loans etc.)that you use (your satisfaction level) Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response:

1 2 3 4 5

11) Rate your service perception (waiting time, time taken at the counter, reply to your complaints, addressing your requests etc.) about the branch? Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response:

1 2 3 4 5

Page | 36

Page | 37

12) Rate your overall satisfaction level with this bank taking into account all factors of service quality as well as product quality. Rate on a scale of one to five; one being most “negative” response and five being the most “positive” response:

1 2 3 4 5

13) Compare services of SBI Bank as compared to other private banks on a scale of 1 – 5. (5 – SBI services are much better; 1 – Private Bank services are much better)

1 2 3 4 5

14) Any other comments about SBI Bank Services

DATA ANALYSIS

Sample Size – 100

Page | 38

1 – Negative; 5 - Positive

1 – Negative; 5 - Positive

Page | 39

BIBLIOGRAPHY:

www.sbi.co.in

www.pnbindia.in

Some of the banking related i have choosen from group’s material(inspire

academy).

Page | 40