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Study On Customer Satisfaction
Study On Customer Satisfaction
com SUBMITTED TO UNIVERSITY OF PUNE IN PARTIAL FULLFILMENT OF 2 YEARS FULL TIME COURSE MASTERS IN BUSINESS ADMINISRATION (MBA)
Acknowledgement
We take this opportunity to express our sincere thanks & deep sense of gratitude to our Director Dr.Sharad Joshi We also express our sincere thanks to my project guide Prof. Prof. Mrs. Smita Sovani it is highly difficult confine in words. Our gratitude to them for their able guidance & spontaneous solutions to any problems that cropped out during our course of work. Finally we express our thanks to all staff members & our friends who have directly or indirectly helped in complication of this project. I heartily thank to Mr. Rajesh Kadam survey. for providing the information regarding the customer satisfaction
1.1 - Methodology 1.2 - Objective of the study 1.3 - Importance of the study 1.4 - Scope of the study 1.5 - Limitation of the study 1.6 - Chapter scheme
3.1 - what is customer satisfaction 3.2 - what the customer expects and satisfaction level 3.3 - Customer Satisfaction Management Process 3.4 - Theory of Investing 3.5 - Indian Stock Market Overview
5.1 Findings
INDEX
Page nos. 1 8 28 44
Chapter III Theoretical background Chapter IV Data Interpretation and Collection Chapter V Findings and Suggestions,
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Introduction to study
The capital market consists of two kinds (a) Primary market, (b) Secondary market. Primary market is popularly known as new issue market. Secondary market is an important component of capital market. The stock exchanges are known as secondary market. To learn more about how customers can earn through the stock market, on has to understand how it works. A person desirous of buying /selling shares in the market has to first place his order with a broker. When the buy order of the shares is communicated to the broker he routes the order through his system to the exchange. The order stays in the queue exchanges system and gets executed when the order logs on the system within buy limit that has been specified. The shares purchased will be sent to purchaser by the broker either in physical or demat format. Customer can buy and sell securities on the stock exchanges, through online automated order processing system provided by the company. Customer can log on at any time, during or after trade hour and place an order. The online investment option of ICICI Direct is safest way to the investor to invest in Mutual Fund, IPO, Bonds and Postal Saving.ICICIdirect.com thrives continuous endeavor to satisfy its customers and provide them with the highest level of convenience. Survey reveals the needs, perception and opinion etc of the existing customers of the ICICI direct.com. This survey also tells about the satisfaction of the customers towards the services provided by the ICICI direct.com. the changing scenario of the todays Hitech business era ICICI direct,com. provides the online share trading and holding of the scrips.
1.1 Methodology
Sampling design: A sampling design is a definite plan for obtaining a sample from a given sample limit. It refers to technique or procedure the researcher would adopt in selecting items for the sample, sample design is determined before data allotted.
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Sample units: Here the ICICI Direct.com existing customers are the sample unit for taking the feedback regarding the level of customer satisfaction.
Primary Data: Primary data is a data collected for the first time and which is new to the study. Primary Data has been collected through the questionnaire from existing customer of ICICI direct.com. Pune branch.
Secondary Data: It already exists data, which has collected through magazines and internal document of the organization, website of icicidirect.com etc which helped to the researcher in study.
Research approaches :There can be four ways of collecting data observation focus, graph and experimental. These study closely related to survey method.
Research instruments:Research instruments used for collecting primary data is questionnaire for this study the research instruments used was questionnaire. Questionnaire: A Questionnaire is a set of question with or without blank space for recording answers. The question can secure the relevant facts or opinion from informal and interested respondent included in the sample survey. Researcher had taken the help of the questionnaire for this survey of the customer satisfaction. 11
1. To know the consumer behavior of the Customers of ICICI direct.com. 2. To know the reason for which the customers are attracted towards ICICI direct.com 3. To know which services provided by ICICI direct.com, are mostly attracted by the customers. 4. To study the efforts taken by management for the purpose maintaining quality and services in the customer satisfaction.
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Chapter 3:- Theoretical background consists of the customer satisfaction, and what customer expect from the organization and customer satisfaction management process etc. Chapter 4:- This chapter consists of Data collection and Interpretation. The data interpretation is done by the help of questionnaire filled from the existing customers. Chapter 5:- This chapter is of the findings and suggestions. The suggestions are on the basis of the survey done by the researcher. Chapter 6:- Annexure Chapter 7:- Bibliography
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2.1 Introduction
ICICI direct is product of ICICI securities Ltd. Trading with ICICI direct.com is a fast, easy transparent and hassle free way to trade in shares ICICI direct offers to the customer a wide choice of product for investing in the stock market It also allows the customer to invest in postal saving, Mutual fund and other financial product ICICI direct offers to the customer a unique 3 in 1 account.
Convenience: The 3 in1 accounts integrate banking broking and demat account. When customer place a buy or sell order with ICICI direct the system checks the fund and shares available in customer bank and demat account respectively and execute the trade on exchange online the bank and demat account is automatically debited or credited. This enables the customer to trade in shares without going through the hassles of tracking settlement cycle writing cheque and transfer instruction. Speed: Customer can get the latest quotes of scrips on ICICI direct.com place an order pronto. Control: With ICICI direct.com customer get an order confirmation instantly. Customer can easily buy or sell the shares in primary and secondary market. Independence: Through ICICI direct.com customer can manage their own demat and bank account directly and indirectly. Trust: ICICI direct.com is part of ICICI group, an organization trusted by millions of Indian.
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History of ICICI
1955: The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI Limited ICICI emerges as the major source of foreign currency loans to Indian industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI also among the first Indian companies to raise funds from International markets.
1958 Mr.G.L.Mehta was appointed the 2nd Chairman of ICICI Ltd. 1960 ICICI building at 163, Back Bay Reclamation was inaugurated. 1961 The first West German loan of DM 5 million from Kredianstalt was obtained by ICICI. 1967 ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed.
1969 First two regional offices in Calcutta and Madras were opened. 1972 Second entity in India to set-up merchant banking services. Mr. H. T. Parekh appointed as the third Chairman of ICICI. 1977
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ICICI sponsors the formation of Housing Development Finance Corporation. Managed its first equity public issue 1978 `Mr. James Raj appointed as the fourth Chairman of ICICI. 1979 Mr.Siddharth Mehta appointed as the fifth Chairman of ICICI. 1982 Becomes the first ever Indian borrower to raise European Currency Units. ICICI commences leasing business. 1984 Mr. S. Nadkarni appointed as the sixth Chairman of ICICI. 1985 Mr.N.Vaghul appointed as the seventh Chairman and Managing Director of ICICI. 1986: ICICI first Indian Institution to receive ADB Loans. First public issue by an Indian entity in the Swiss Capital Markets. ICICI along with UTI sets up Credit Rating Information Services of India Limited, (CRISIL) India's first professional credit rating agency. ICICI promotes Shipping Credit and Investment Company of India Limited. (SCICI) The Corporation made a public issue of Swiss Franc 75 million in Switzerland, the first public issue by any Indian equity in the Swiss Capital Market.
1987 ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth Development Corporation (CDC), the first loan by CDC for financing projects in India.
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1993 ICICI sets-up ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan. ICICI sets up ICICI Asset Management Company.
1996 ICICI becomes the first company in the Indian financial sector to raise GDR. ICICI announces merger with SCICI. Mr.K.V.Kamath appointed the Managing Director and CEO of ICICI Ltd
1997 ICICI was the first intermediary to move away from single prime rate to threetier prime rates structure and introduced yield-curve based pricing. The name "The Industrial Credit and Investment Corporation of India Limited was changed to "ICICI Limited". ICICI announces takeover of ITC Classic Finance.
1998 Introduced the new logo symbolizing a common corporate identity for the ICICI Group. ICICI announces takeover of Anagram Finance.
1999 ICICI launches retail finance - car loans, house loans and loans for consumer durables. ICICI becomes the first Indian Company to list on the NYSE through an issue of American Depositary Shares.
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2000 ICICI Bank becomes the first commercial bank from India to list its stock on NYSE. ICICI Bank announces merger with Bank of Madura.
2001 The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank.
2002 Moodys' assign higher than sovereign rating to ICICI. Merger of ICICI Limited, ICICI Capital Services Ltd and ICICI Personal Financial Services Limited with ICICI Bank.
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Corporate office: ICICI Securities Ltd Stanrose House, Appasaheb Marathe Marg, Prabhadevi Mumbai400025
REGION Ahmedabad
ADDRESS ICICI Bank ltd, shop No 6, sum Complex c6 road near stadium circle, Ahmedabad.38009 ICICI Bank ltd, 73/1 Krishna Ground Floor, infantry road Ban galore ICICI Bank ltd, regional office Landmark bldg Racecourse circle gotri Road, Alkapuri Baroda-390007 ICICI Web Trade Ltd, 99 Janpath Bhubaneshwar Orissa. ICICI Bank Ltd, sco 181/182 1st floor Sector 9-C Chandigrah-160017. ICICI Center, Wellington plaza, shop No 42 Ground Floor, 90 Anna Salai Chennai600002. ICICI Bank Ltd Regional office Rizvi Towers, 18- June Road, saint innex Goa 403001. ICICI Bank Ltd, 2nd Nerrla House No-4, Nagargun Hills, Punjagutta Hyderabad 500082 ICICI Bank Ltd, Regional Office 114- 115 Arunachal Bldg, Barakhamba Road, Connaught Place N Delhi- 110001. ICICI Bank Ltd, GR. Floor Near Mawah Petrol Pump, Law College Square, West High Court Road, Nagpur- 44010. ICICI Bank Ltd, Regional Office ASegrilla Garden, 4th Floor Bund Garden, Pune-411001.
Bhubaneshwar
Chandigrah
Chennai
Goa
Nagpur
Pune
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Organization Chart
PM Product Manager RPM Regional Product Manager SM- Segment Manager AUM- assistant Unit Manager Agents
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Update every Saturday there are 4 pick of the week featured in a month.Pick of week features fundamental stock with a top line growth of 35% the invvestment time frame is 6-9 month and the target price is also mentioned ICICI Direct sector watch:
Provides with an outlook on 16 sectors and the stocks covered carry a particular weight age based on their likely performance in the future.
Every fortnight stock on the move will feature 3 stocks which are likely to show significant up move (5%-7%) in the next 15 days due to change in trade setiment.
This could be due fundamental changes within the company forthcoming announcement or for purely technical reason
Features:
Is a write up on the latest forth-coming IPO issue along with the details of the issue like price band and minimum subscription quantity.
Expert speak:
Ask the fund manager is an interview with the details of the issue like price band and minimum subscription quantity
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Trading page: Includes products like, Equity, Derivatives (Futures and option), Mutual Fund (19AMCs) postal savings (NSE/KVP), IPO, Insurance (General/Life ).Special l product offered by ICICI Direct.com Cash Trading :
Customer can do intra day trading like buying or short selling in 131 stocks. Margin plus:
Under margin plus customer can do intra day trading up to 20 times there available limit 131 stocks. BTST:
(Buy today sells tomorrow) Through this option customer can buy shares today and sell tomorrow if prices are in favor of the customer before the shares comes to there demat account in 345 stocks
Shares as margin: Customer can deposit their shares and pledge them online to create a limit which customer can use as I nitial margin to trade in futures and option there are 479 shares available under shares as margin.
Mutual Fund: Customer can purchase, redeem, switch and invest in systematic investment plan, customer can choose from 19 AMCs and also view their unit holding and NAV online
Postal saving: Customer can invest 8% Govt. of India Bonds (2003) National Saving Certificate (Rate of Interest) tenure 72 month. Kisan Vikas Patra (Rate of Interest 7.40% pa) tenure 103 month.
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IPO: Customer can apply for latest IPO online. Insurance: Customer can buy general insurance from ICICI Lombard and Life Insurance from ICICI Prudential online through ICICI Direct.com.
News Page: Gives the latest and breaking news to the customer from CNBC and Money Control.
Market Page: Provides with top gainers, top losers, volume topers, Nifty and Sensex weight age.
Derivatives Trading: It provides the derivatives snap shot and derivatives strategy for the day, which is updated before market hour it tells to customer what they could possibly buy in the Futures and Option segment today. Chart Page: It locates features on interactive charting with advanced indicators called direct technical chart.
Research page: Has a features like stock screener It helps the customer to identify stocks that meet there specific criteria company snap shot view on over 5000 companies.
Mutual Fund Page: It helps to the customer with basic fund finder, advanced fund finder, compares funds and NAV along with MF review of latest fund being offered. Personal Finance: It provides tools with customer can use for there Investment planning, Retirement planning, tax and financial management.
Customer service page: This page gives service to the customer related to online share trading.
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Advantages of ICICIdirect.com ICICIdirect.com offers to you a unique 3-in-1 account. Banking + Broking + Demat A unique 3-in-1 account enables you to trade in shares, mutual funds, postal savings, bonds without filling lengthily forms & doing paperworks. Therefore, financial transaction done on ICICIdirect.com is paperless, convenient, fast & hassle free.
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500 N 0.5
360 15 0.59
300
0 0
600
250
0.5 0.5
0.5 0.5
5p 50p 15
0.15 0.15
0.1
10p 50p
Y Y-Selective Y-Selective Y Y Y Y Y Y Y Y
Y N N Y Y Y N Y N N N N Y
Y Y Y N Y N N Y Y N N Y Y
Y Y N N Y Y N Y N N N N Y
Y Y Y Y Y Y Y N N N N N Y
Y Y N N Y Y N N N N N N Y
Y Y Y N Y Y Y Y Y Y Y
AMC: - Account maintaining Charges BTST: - Buy today sells tomorrow IPO: - Initial public offers GOI: - Government of India
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CallNTrade: CallNTrade allows you to call on a local number in your city & trade on the telephone through our Customer Service Executives. This facility is currently available in over 11 major states across India. Trading on NSE/BSE: Through ICICIdirect.com, you can trade on NSE as well as BSE. Market Order: You could trade by placing market orders during market hours that allows you to trade at the best obtainable price in the market at the time of execution of the order. Limit Order: Allows you to place a buy/sell order at a price defined by you. The execution can happen at a price more favorable than the price, which is defined by you, limit orders can be placed by you during holidays & non market hours too. 2. TRADE IN DERIVATIVES: FUTURES: Through ICICIdirect.com, you can now trade in index and stock futures on the NSE. In futures trading, you take buy/sell positions in index or stock(s) contracts having a longer contract period of up to 3 months. Trading in FUTURES is simple! If, during the course of the contract life, the price moves in your favor (i.e. rises in case you have a buy position or falls in case you have a sell position), you make a profit. Presently only selected stocks, which meet the criteria on liquidity and volume, have been enabled for futures trading. Calculate Index and Know your Margin are tools to help you in calculating your margin requirements and also the index & stock price movements. The ICICIDIRECT UNIVERSITY on the HOME PAGE is a comprehensive guide on futures and options trading.
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OPTIONS An option is a contract, which gives the buyer the right to buy or sell shares at a specific price, on or before a specific date. For this, the buyer has to pay to the seller some money, which is called premium. There is no obligation on the buyer to complete the transaction if the price is not favorable to him. To take the buy/sell position on index/stock options, you have to place certain % of order value as margin. With options trading, you can leverage on your trading limit by taking buy/sell positions much more than what you could have taken in cash segment. The Buyer of a Call Option has the Right but not the Obligation to Purchase the Underlying Asset at the specified strike price by paying a premium whereas the Seller of the Call has the obligation of selling the Underlying Asset at the specified Strike price. The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying Asset at the specified strike price by paying a premium whereas the Seller of the Put has the obligation of buying the Underlying Asset at the specified Strike price. By paying lesser amount of premium, you can create positions under OPTIONS and take advantage of more trading opportunities. 3. INVESTING IN MUTUAL FUNDS: ICICIdirect.com brings you the same convenience while investing in Mutual funds also - Hassle free and Paperless Investing. With the inclusion of Fidelity MF, you can now invest on-line in 19 mutual Funds through ICICIdirect.com. Prudential ICICI MF, JM MF, Alliance MF, Franklin Templeton MF, Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI MF, Reliance MF, Kotak MF, Tata MF,DSP Merrill Lynch MF, ING Vysya
MF,CHOLA MF, Deutsche MF,HSBC MF and Standard Chartered MF are the Mutual Funds available for investment. You can invest in mutual funds without the hassles of filling application forms or any other paperwork. You need no signatures or proof of identity for investing.
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Once you place a request for investing in a particular fund, there are no manual processes involved. Your bank funds are automatically debited or credited while simultaneously crediting or debiting your unit holdings. You also get control over your investments with online order confirmations and order status tracking. Get to know the performance of your investments through online updation of MF portfolio with current NAV. ICICIdirect.com offers you various options while investing in Mutual Funds: Purchase: You may invest/purchase Prudential ICICI MF, JM MF, Alliance MF, Franklin Templeton MF, Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI MF ,Standard Chartered MF ,Reliance MF, Kotak MF, Tata MF,DSP merrill lynch MF,ING Vysya MF,CHOLA MF, Deutsche MF,HSBC MF and Fidelity MF without the hassles of filling application forms.
Redemption: In addition to giving hassle-free paperless redemption, ICICIdirect.com offers faster liquidity. You can redeem the mutual fund units through ICICIdirect.com. The money will be credited to your bank account automatically 3 days after the order placement date.
Switch: To suit your changing needs you may wish to shift monies between different schemes. You can switch your monies online from one scheme to another in the same fund family without any hassles.
Systematic Investment plans (SIP): SIP allows you to invest a certain sum of money over a period of time periodically. Just fill in the investment amount, the period of investment and the frequency of investing and submit. ICICIdirect.com will do the rest for you automatically investing periodically for you.
Systematic withdrawal plan: This allows you to withdraw a certain sum of money over a period of time periodically.
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4. IPOs AND BONDS ONLINE: You could also invest in Initial Public Offers (IPOs) and Bonds online without going through the hassles of filling ANY application form/ paperwork. Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are about to hit the market and analysis on these. IPO calendar, recent IPO listings, prospectus/offer documents, and IPO analysis are few of the features, which help you, keep on top of the IPO markets. 5. Content Features:
There are a host of features on ICICIdirect.com that shall help you make informed investment decisions. We provide you with the indices of major world markets, nifty futures and ADR prices of Indian scrips. Get daily share prices of all scrips, monthly and yearly high/lows etc through Market Watch. Get breaking news from CNBC and Reuters. Catch a glimpse of News Headlines through our scrolling Direct News Headlines. Get a snapshot of the latest developments in the markets through the day using Market Commentary. You can get weekly snapshots also. Use Pick of the week which focuses on fundamental stocks with sound prospects. Catch interviews, reactions and comments from industry leaders with CEO Call. Track the movement of leading scrips within a sector across 12 sectors using Market@Desktop. Equip yourself with our barometers. Market Barometer gives you in-depth information of the weightages of shares on Nifty and Sensex. Get a glimpse of the performance of various industry sectors through Industry Barometer. Direct Technical Charts offer interactive charting with advanced indicators. Get a birds eye views of over 5000 companies at a single click using Company Snapshot. Glance through analyst recommendations using Multex Global Estimates.
In case, you are not too comfortable with share trading, try our Learning Centre, which is a tutorial on investments and My Research that helps you to research a stock better.
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6. Personal Finance: Use our Personal Finance section and get hold of tools that can help you plan your investments, retirement, tax etc. Analyze your risk profile through the Risk Analyzer and get a suitable investment portfolio plan using Asset Allocator. 7. Customer Service Features:
With 'ICICI direct Customer Tools & Updates' you can trouble shoot all your problems online. Address your trading queries on-line through "Easy Mail". You can view and change your profile or password on-line through General Profile option. Get details of ICICI Centers, our sales and service offices, across India through branch locator. View your Account Statement and Bill Summary of your transactions online using bills & accounts. View your Digital Contract Notes instantly. View various charges through the Fee Schedule option Give your feedback or viewpoint through the Viewpoint online. Enroll yourself for various ICICI direct Workshops through Register for Customer Sessions.
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CASH TRADING
Rs.500
Rs.500
0.70% Transaction value + STT+ service tax. 0.10% Transaction value + STT + Service tax on both sides. 0.70%
Rs.15
Rs.25
Rs.500
1% Transaction value + STT +Service tax 0.05% Transaction value + STT + Service tax No. Brokerage No. Brokerage
Rs.25
Rs.5000 Rs.1000
No. Brokerage
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Thus satisfaction level is function of difference between perceived performance & expectation. A customer could experience one of three broad levels of satisfaction:
If the performance matches to the expectations of the customer, then the customer is satisfied.
If the performance exceeds the expectations of the customer, the customer is highly satisfied, pleased or delighted.
But how do the customer expectations? Expectations are formed on the basis of the buyers past buying experience statements made by the friends & associates, & marketer & competitor information & promises. If marketers raise the expectations too high the buyer is likely to be disappointed.
Some of the todays most successful companies are raising expectation & delivering the performance. The companies are aiming high because customers who are just satisfied will still find it easy to switch supplier when a better offer comes along. The fact is that high satisfaction or delight creates an emotional affinity with the brand, not just a rational preference, and this creates customers high loyalty.
Companies seeking to win in todays markets must track their customers expectations perceived company performance, and customer satisfaction. They need to monitor this for the competitors as well. Companies that achieve high customer satisfaction ratings make sure that their target market knows it. The customer centered firms seeks to create high customer satisfaction it is not out to maximize customer satisfaction. 37
First they can increase the customer satisfaction by lowering the price or increasing its services, but this may result in low profits.
Second, the company might be able to increase its profitability in the other ways, such as by improving its manufacturing or investing more in R&D.
Third; the company has many stakeholders including employees, dealers, suppliers & stockholders. Spending more to increase the customer satisfaction would divert funds from increasing the satisfaction of the other partners. Ultimately, the company must operate on the philosophy that it is trying to delivery a high level of customer satisfaction level subject to delivering at least acceptable levels of the satisfaction to the other stockholders within the constraints of its total resources.
A customer centered organization would make it easy for its a customer to deliver suggestions and complaints. Many restaurants and hotels provide forms for guests to report likes and dislikes. A hospital could place suggestion boxes in the corridors, supply comment cards to the exiting patients, and hire patient advocate to handle patient grievances. Some customer centered companies P&G, General Electric, and Whirlpool establish customer hot lines with a toll free 800 telephone numbers to maximize the ease with which the customers can inquire, make suggestions, or complain. These information flows provide these companies with many good ideas and enable them to act more rapidly to resolve the problems.
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Another useful way to gather a picture of customer satisfaction is to hire the persons to pose as the potential buyers to report their findings on strong and weak points they experienced in buying the companies & competitors product. These ghost 39
shoppers can even pose certain problems to test whether to companies sales personnel handle the situation well. Thus a ghost shopper can complain about a restaurants food to test how the restaurant handles this complaint. Not only should companies hire ghost shoppers, but managers themselves should leave their office to time to time, enter company & competitor sales situation where they are unknown and experienced firsthand the treatment they revive as the customers
Companies should contact customers who have stopped buying have switched to another supplier to learn why this is happened. When IBM loses a customer, they mount a thorough effort to learn where they failed is their price too high, their service deficient, their products unreliable, and so on. Not only is it important to conduct exit interviews but also to monitor the customer loss rate which, if it is increasing, clearly indicates that the company is failing to satisfy its customers.
When customers rate their satisfaction with an element of the companys performance, say delivery, we need to recognize that customers will vary in how they define good delivery; it could mean early delivery, on-time delivery, order completeness, and so on. Yet if the company had to spell out every element in detail, customers would face a huge questionnaire. We must also recognize that two customers can report being highly satisfied for a different reasons. One may be easily satisfied most of the times and the other might be hard to please on this occasion. Companies should also note that managers and salespersons can manipulate their rating on the customers on customer satisfaction. They can be especially nice to customers just before the survey. They can also try to exclude unhappy customers from the included in the survey. One of the danger is that if the customer know that the company will go out of its way to please the customers, some customers may want to express high dissatisfaction(even if satisfied) in order to receive more concessions.
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your investment returns and to see how they are accumulating at a faster rate than your salary.
When to Invest?
The sooner the better. By investing into the market right away you allow your investments more time to grow, whereby the concept of compounding interest swells your income by accumulating your earnings and dividends. Considering the unpredictability of the markets, research and history indicates these three golden rules for all investors 1. Invest early 2. Invest regularly 3. Invest for long term and not short term while its tempting to wait for the best time to invest, especially in a rising market, remember that the risk of waiting may be much greater than the potential rewards of participating. Trust in the power of compounding is growth via reinvestment of returns earned on your savings. Compounding has a snowballing effect because you earn income not only on the original investment but also on the reinvestment of dividend/interest accumulated over the years. The power of compounding is one of the most compelling reasons for investing as soon as possible. The earlier you start investing and continue to do so consistently the more money you will make. The longer you leave your money invested and the higher the interest rates, the faster your money will grow. That's why stocks are the best long-term investment tool. The general upward momentum of the economy mitigates the stock market volatility and the risk of losses. Thats the reasoning behind investing for long term rather than short term.
How much money do I need to invest? There is no statutory amount that an investor needs to invest in order to generate adequate returns from his savings. The amount that you invest will eventually depend on factors such as: Your risk profile Your Time horizon Savings made All the above three factors will be discussed in brief in the latter part of the course.
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The investing options are many, to name a few Stocks Bonds Mutual funds Fixed deposits Others Read about them in detail in module 2 of the course.
Some people remain puzzled by options. The truth is that most people have been using options for some time, because options are built into everything from mortgages to insurance. An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date. Option, as the word suggests, is a choice given to the investor to either honour the contract; or if he chooses not to walk away from the contract. To begin, there are two kinds of options: Call Options and Put Options. A Call Option is an option to buy a stock at a specific price on or before a certain date. In this way, Call options are like security deposits. If, for example, you wanted to rent a certain property, and left a security deposit for it, the money would be used to insure that you could, in fact, rent that property at the price agreed upon when you returned. If you never returned, you would give up your security deposit, but you would have no other liability. Call options usually increase in value as the value of the underlying instrument rises. When you buy a Call option, the price you pay for it, called the option premium, secures your right to buy that certain stock at a specified price called the strike price. If you decide not to use the option to buy the stock, and you are not obligated to, your only cost is the option premium. Put Options are options to sell a stock at a specific price on or before a certain date. In this way, Put options are like insurance policies If you buy a new car, and then buy auto insurance on the car, you pay a premium and are, hence, protected if the asset is damaged in an accident. If this happens, you can use your policy you pay a premium and are, hence, protected if the asset is damaged in an accident. If this happens, you can use your policy
The genesis of the mutual fund industry in India can be traced back to 1964 with the setting up of the Unit Trust of India (UTI) by the Government of India. Since then UTI has grown to be a dominant player in the industry. UTI is governed by a special legislation, the Unit Trust of India Act, 1963. 43
The industry was opened up for wider participation in 1987 when public sector banks and insurance companies were permitted to set up mutual funds. Since then, 6 public sector banks have set up mutual funds. Also the two Insurance companies LIC and GIC have established mutual funds. Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993, which for the first time established a comprehensive regulatory framework for the mutual fund industry. Since then several mutual funds have been set up by the private and joint sectors.
The Indian Mutual fund industry has passed through three phases. The first phase was between 1964 and 1987 when Unit Trust of India was the only player. By the end of 1988, UTI had total asset of Rs 6,700 crores. The second phase was between 1987 and 1993 during which period 8 funds were established (6 by banks and one each by LIC and GIC).This resulted in the total assets under management to grow to Rs 61,028 crores at the end of 1994 and the number of schemes were 167. The third phase began with the entry of private and foreign sectors in the Mutual fund industry in 1993. Several private sectors Mutual Funds were launched in 1993 and 1994. The share of the private players has risen rapidly since then. Currently there are 34 Mutual Fund organizations in India. Kothari Pioneer Mutual fund was the first fund to be established by the private sector in association with a foreign fund. This signaled a growth phase in the industry and at the end of financial year 2000, 32 funds were functioning with Rs.1, 13,005 crores as total assets under management. As on August end 2000, there were 33 funds with 391 schemes and assets under management with Rs.1, 02,849 crores. The Securities and Exchange Board of India (SEBI) came out with comprehensive regulation in 1993 which defined the structure of Mutual Fund and Asset Management Companies for the first time
turnover at the exchanges has increased from 851 crore in 1997-98 to Rs.1284 crore in 1998-99 and further to Rs.2273 crore in 1999-2000 (April- August1999). NSE has around 1500 shares listed with a total market capitalization of around Rs.921500 crore (Rs9215-Bln) The BSE has over 6000stock listed and has market capitalization of around Rs.968000 crore (Rs.9680-Bln) most key stocks are traded on both the exchanges and hence the investor could buy them on either exchanges. Both exchanges have different settlement cycle, which allows investor to shift their position on the bourses. The primary index of BSE is BSE Sensex comprising 30 stocks NSE has the S&P NSE 50index (Nifty), which consists of fifty stocks. The BSE Sensex is the older and more widely followed index. Both these indices are calculated on the basis of market capitalization and contained the heavily traded shares from key sector. The markets are closed on Saturday and Sunday. Both exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE Online Trading) and NEAT (National Exchange Automated Trading) system. It facilitates more efficient processing; Automatic Order matching, faster execution of trades transparency. The scrips traded on the BSE have been classified into A, B1,B2,C,Fand Z groups. The A group shares represent those, which are in the carry forward system (Badla). The F group represents the debt market (Fixed Income Securities) segment. The Z group scripts are the blacklisted companies. The C group covers the odd lot securities in A, B1 and B2 groups and rights renunciation. The key regulator governing stock exchanges, Brokers, Depositories, Depository participants Mutual Funds, FllS and other participants in Indian secondary and primary market is the securities and exchange board of India (SEBI) Ltd.
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The Bombay Stock Exchange Limited (Formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is located at Dalal Street, Mumbai. Established in 1875, it is the oldest stock exchange in Asia. There are around 3,500 Indian companies listed with the stock exchange, and has a significant trading volume. As of July2005, the market capitalization of the BSE was about Rs20 trillion (US $ 466 billion). The BSE Sensex (SENSITIVE INDEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume. Along with the NSE, the companies listed on the BSE have a combined market capitalization of US$ 125.5 billion. History An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan tree still stands in the Horniman Circle Park, Mumbai. The informal group of stockbrokers organized themselves as the The Native Share and 46
Stockbrokers Association which, in 1875, was formally organized as the Bombay Stock Exchange (BSE). In January 1899, the stock exchange moved into the Brokers Hall after it was inaugurated by James M Maclean. After the First World War, the BSE was shifted to an old building near the Town Hall. In 1928, the plot of land on which the BSE building now stands (at the intersection of Dalal Street, Bombay Samachar Marg and Hammam Street in downtown Mumbai) was acquired, and a building was constructed and occupied in 1930. Premchand Roychand was a leading stockbroker of that time, and he assisted in setting out traditions, conventions, and procedures for the trading of stocks at Bombay Stock Exchange and they are still being followed. Several stock broking firms in Mumbai were family run enterprises, and were named after the heads of the family. The following is the list of some of the initial members of the exchange, and who are still running their respective business.
D.S. Prabhudas & Company (now known as DSP, and a joint venture partner with Merrill Lynch)
Jamnadas Morarjee (now known as JM) Champaklal Devidas (now called Cifco Finance) Brijmohan Laxminarayan
In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the Securities Contracts (Regulation) Act. The BSE moved into its current premises - the Phiroze Jeejeebhoy Towers - in 1980. The Bombay Stock Exchange followed the familiar outcry system for stock trading up until 1995, when it was replaced by an electronic (e-Trading) system. In 2005, the status of the exchange changed from an Association of Persons (AoP) to a full fledged corporation under the BSE (Corporatization and Demutualization) Scheme, 2005 (and its name was changed to The Bombay Stock Exchange Limited).
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On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.
The capital market of India consists of two kinds A. Primary Market B. Secondary Market
Primary Market: Primary market is known as new issue market is also called as Public Issue in the primary market new securities are sold or exchanged for cash, credit or other securities. The new securities can be issued by existing companies are newly floated companies. The primary market can be defined as, A market where new securities are brought and sold for first time. It is the market where the capital formation process will take place. The huge amounts of financial resources are mobilized by the corporate sector through public issue. Secondary Market: Secondary market is an important component of capital market. The stock exchanges are known as the secondary market. They play an important role in securities market. In the stock exchanges the Govt securities, Bonds, Investment, Trust debentures and other instruments are traded. It is a medium of transfer of resources for 48
the circulated. In the stock securities issued in the primary market markets are bought and sold. It does not create any financial claim purchases and sales of the existing stocks and bonds occur in this market. Transaction in the secondary market do not provides fund to the corporate sector. But the strong secondary market movements create a high demand for new issue market.
Investment 1. Mutual fund: Mutual fund is one of the innovative banking systems. The mutual fund have been set up mainly by the subsidiaries of the public sector banks for e.g. SBI, Canara bank, Punjab national bank, Bank of India, Andhra bank, LIC, GIC also have set up mutual fund. Till 1986 UTI has monopoly of this business in India. At present the other mutual fund have also come up in the market. Mutual fund is either open ended or close-ended financial intermediaries. They procure money selling the units to the investors. They provide to obtain high return low risks combination fro their indirect holding of equities and other assets. They can be classified as growth oriented or Income oriented or income and growth oriented funds. 2. Insurance: Insurance companies invest the savings of their policyholders. The policyholder will pay the amount to the insurance is just a contract between two parties. The insurance company undertakes in consideration of sum money to make good to the loss suffered by the party against a specified risk. There are two parties in a Insurance contract (a) Insurer (b) Insured / Beneficiary The insurer is known as Insurance Company. The insured means a personal party who are willing to undertake an arrangement with an insurer. The terms of contract will be laid down in a document is known as policy. The property, which is insured, is the subject matter of insurance. The property may be insured against loss arising from uncertain events.
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3. IPO (Initial Public Offer) A company first sale of stock to the public securities offer in an IPO roufside equity capital and public market for their stock. Investor purchasing stock in IPO generally must be prepared to accept very large risk for the possibility of large gains. IPO by investment company (closed and Fund) usually contain under writing fees, which represent a load to buyers.
4. Bonds: Investing in government of India bonds is a risk free investment option available to the customer. Investment in govt. India bonds offline, would involve filling physical application forms and writing cheques Customers can invest in corporate bond, municipal bond and treasury bond. .
5. Postal Saving: National saving certificate and Kisan Vikas Patra have has always been consider as some of the safer investment option NSC offers interest @8% with no upper limit for the maximum subscription per year. Also investment in NSC up to 1 lakh is eligible for tax break nder section 80CCE of Income Tax Act.
6. Derivatives: Derivatives have become very important in the field finance. They are very important financial instrument for risk management as they allow risk and act as form of insurance. The shift of risk means that each party involved in the contract should be able to identify all the risk involved before the contract is agreed. It is also important to remember that derivatives are derived from an underlying asset. This means that risk in trading derivatives may change depending on what happens to the underlying asset.
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underlying asset,
index or reference rate. The underlying asset can be equity, forex commodity or any other asset. For example, if the settlement price of derivatives is based on the stock price of a stock for e.g. infosys, which frequently changes on the daily basis. The means that derivatives risk and position must be monitored constantly.
What is Dematerialization? Dematerialization in short called, as demat is the process by which an investor can get physical certificate converted in to electronic form maintained in an account with the depository participant. The investor can Dematerialize only those share certificates that are already register in their name and belong to the list of securities admitted for dematerialization at the depositories.
Depository: The organization responsible to maintain investors securities in the electronic form is called the depository. In other words, a depository can therefore be conceived of as a Bank for securities. In India there are two such organization viz. NSDL and CDSL. The depository concept is similar to the banking systems with the exception that bank handle funds whereas a depository handles securities of the investors. An investor wishing to utilize the services offered by a depository has to open an account with the depository through Depository participant.
Depository participant: The market intermediary through whom the depository services can be availed by the investors is called a Depository participant (DP). As per SEBI regulation, DP could be organization involved in the business of providing financial services like bank, brokers, custodians and financial institution. This system of using the existing distribution channel (mainly constituting DPs) helps the depository to reach a wide cross section of investors spread across a large geographical area at a minimum Cost. The admission of DPs involves a detailed evaluation by the depository of their capability to meet with the strict service standards and a further evaluation and approval from SEBI. Realizing the 51
potential, all the custodians in India and a number of banks, financial institution and major brokers have already joined as DPs to provide services in number of cities.
Procedure to dematerialize your share certificate: Fill up dematerialization request form, which is available with your DP. Submit your share certificate along with form; (write surrendered for demat on the face of the certificate before submitting it for a demat) Receive credit for the dematerialized shares into your account within 22 days.
Opening of a demat account through ICICI Direct: Opening an e invest account with ICICI Direct, will enable you to automatically open a demat account with ICICI, one of the largest DP in India, thereby avoiding the hassles of finding an efficient DP. Since the shares to be bought or sold through ICICI Direct will be only in the demat form, it will avoid the hassles of instructing the brokers to buy shares only in a demat form. Adding to this, you will not face problems like checking whether your broker has transferred the shares from his clearing account to your demat account.
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Advertisements 6%
Friends 12%
Agents 56%
Relatives 26%
Friends
Relatives
Agents
Advertisements
The above table show 12% respondent come to know about online share trading from Friends, 26% respondent comes to know from there relatives and 56% respondent comes to know from the agents as well as 6% respondents come to know from advertisements about online share trading firm.
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4.2. Percentage showing bifurcation of the respondent on the basis the time from when the customer trading in the ICICIdirect.com.
Particular 1-3months 3-6 months 6-9 months 9-12 months and before
NO of respondent 20 34 22 24
The above table show 12% respondent operate there demat account 1-3 months, 34% respondent operate there demat account from 3-6 months as well as 22% respondent operate demat account from 6-9 months and remaining 24% respondent operate there demat account from 9-12 months.
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4.3. Percentage showing bifurcation of respondent on the basis how does respondent trade in the ICICIdirect.com
NO of respondent 94 6
Per 94% 6%
6%
94%
The above table shows 94% respondent trade in the ICICIdirect.com through onlineshare trading and remaining 6% respondent trade through CallNTrade.
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4.4. Percentage showing bifurcation of respondent regarding which service of the ICICIdirect.com is mostly attracted.
Particular Fund transfer mechanism Brokerage Rates Safety & Security Online trading
NO of respondent 33 7 29 31
Brokerage Rates 7%
The above table show 30% respondent are mostly attracted through Fund Transfer Mechanism , 6% respondent are mostly attracted through Brokerage Rates and 26% respondent are mostly attracted through safety & Security as well as 28% respondent are mostly attracted through online Trading.
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4.5. Percentage showing bifurcation of respondent on the basis of which product does the respondent prefer in investing.
Particular Equity IPOs Mutual Funds Both Equity & Mutual Fund No Of respondents 32 8 30 30 Per 32% 8% 30% 30%
30%
32%
Equity IPOs Mutual Funds
8% 30%
The above table show 32% respondent prefer to invest in equities and 8% respondent prefer to invest in IPOs and 30% respondent prefer to invest in Mutual Funds as well as 30% respondent prefer to invest in both equities and Mutual Funds.
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4.6. Percentage showing bifurcation of respondent on the basis which trading facility the respondent frequently prefer while trading.
Particular Delivery Trading Day trading Margin plus BTST Cash on Spot Both Delivery & Trading NO of respondent 14 18 6 4 2 Day 56 Per 14% 18% 6% 4% 2% 56%
14% 18%
56% 2% 4% 6%
The above table show 14% respondent prefer Cash or Delivery option while trading and 18% respondent prefer to Day Trading and 6% respondent prefer Margin plus, 4% respondent prefer BTST, 2% respondent prefer Cash on Spot as well as respondent prefer Both Delivery and Cash Trading. 56%
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4.7. Percentage showing bifurcation of respondent on the basis whether respondents were interested in commodity market.
Particular Yes No NO of respondent 24 76 Per 24% 76%
24%
YES NO
76%
The above table shows 24% respondent are interested in commodity market and 76% respondent are not interested in commodity market because it is newly launched in the Solapur branch.
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4.8. Percentage showing bifurcation of respondent on the basis need of training in the various products of the ICICI securities Ltd.
Particular Equity Derivatives Mutual Fund Commodity IPOs Both equities and Mutual Fund All NO of respondent 6 2 14 8 6 16 48 Per 6% 2% 14% 8% 6% 16% 48%
All 48%
The above table show 6% respondent need the training in equities, 2% respondent need the training in derivatives, 14% respondent need the training in Mutual Funds, 8% respondent need the training in Commodity, 6% respondent need the training in IPOs, 16% respondent need the training in both equities and mutual Funds and 48% respondent need the training in All products in ICICIdirect.com.
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4.9. Percentage showing bifurcation of respondent on the basis need of Transact in statement, Demat Statement and Contract Notes physically.
Particular Yes No NO of respondent 32 68 Per 32% 68%
Yes 32%
No 68%
Yes
No
The above table show 32% respondent need the transact in statement, Demat statement, contract notes physically and 68% dont need.
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4.10. Percentage showing bifurcation of respondent on the basis of their overall satisfaction level towards the online share trading firm.
NO of respondent 66 14 8 12
8%
12%
Excellent Very Good Good Fair
14% 66%
The above table show 66% respondent are highly satisfied with there online share firm and 14% respondent are getting medium level satisfaction remaining 8% respondents getting average satisfaction and 12% respondent getting less satisfaction from there online share trading firm.
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B. Awareness & Training to the customers 1. The company should increase the awareness regarding the brokerage rates why they are high and how, because the other service providers are offering this on cheaper rates. 2. The company should give training to the customers regarding to how to trade on the icicidirect.com for every product as per it is needed. 3. The company should increase awareness about the various other type of the trading like spot trading, margin trading.
C. Suggestion from Customers 1. The company should offer the Transact in statement, Demat statement and Contract notes physically to the customers. 2. Organization should concentrate on Govt. employee to attract online share trading by the attractive scheme. them towards
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5.3 Conclusion
Though share trading is not a cup of tea of everyone, common man can also earn money through it. Customer wants to invest their money, but they are confused whether to invest or not. They dont have full knowledge about the stock market. Customer can buy and sell securities on the stock exchanges, through online automated order processing system provided by the company. Customer can log on at any time, during or after trade hour and place an order. The online investment option of ICICI Direct is safest way to the investor to invest in Mutual Fund, IPO, Bonds and Postal Saving. Mostly small investors are not satisfied with the brokerage rates of the ICICI direct.com. Many customers are now attracting towards the other investment like commodity market. Organization has to concentrate on separate office and other infrastructural facilities. Organization has to make more advertisement through pamphlet distribution in local newspaper and TV advertisement through the local channel Organization has to organize such session on stock market update, which helps to increase customer awareness about stock market.
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1. a) c) 2. a) c) 3. a) 4. a) b) c) d) 5. a) b) c) d) 6.
How do you come to know about ICICI direct.com? Friends Agents [ ] [ ] d) b) Relatives [ ]
Paper Advertisement [ ]
From how many months you are trading with ICICI Direct.com. 13 69 [ ] [ ] b) d) 36 9 12 [ ] [ ]
Which Service given by the ICICI direct.com is most attracted by you? Fund Transfers Mechanism Brokerage rates Safety and Security On line trading [ ] [ ] [ ] [ ]
Which Product do you prefer to invest in ICICI Direct.com? Equities IPOS Mutual Funds Others (Postal Savings, Insurance, Commodities, etc.) [ ] [ ] [ ] [ ]
Which Trading facility do you prefer frequently while trading on ICICI Direct.com?
a) c) e)
[ ] [ ] [ ]
b) d)
[ ] [ ]
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7. a) 8. a) b) c) d) e) f) 9.
Do you need training? Equity Market Derivative Market Mutual Fund Commodity Market IPO Yes [ ] Yes Yes Yes [ ] [ ] [ ] Yes [ ] [ ] No No [ ] No No No [ ] [ ] [ ] No [ ] [ ]
What is your Opinion about the Services given by ICICI securities Ltd.? Excellent Good [ ] [ ] b) d) Very Good Fair [ ] [ ]
_________________________________________________________ _________________________________________________________
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BIBLIOGRAPHY
1. Philip Kotler-7th edition MARKETING MANAGEMENT 2. Ramesh Babu- INDIAN FINANCIAL SYSTEM 3. ICICI direct.com- website of the company 4. www.google.co.in
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