BANKING SECTOR

SERVICE MARKETING
 Banking Sector in India
• Banking is an essential industry.
• It is vital system for developing economy
for the nation.
• It is where we often wind up when we are
seeking a problem in financial crisis
and money related query.
• Banking is one of the most regulated
businesses in the world.
• Banks can play a dynamic role in delivery
and purchase of consumer durables.
• Banks remain important source for career
opportunities for people.
 BANKING as a SERVICE
SECTOR
• 1991 - a committee was set up which
worked for the liberalization of
banking practices.
• Country flooded with foreign banks
and their ATM stations.
• Phone banking and net banking
introduced.
•
 ADD-ONS AND
FREEBIES:-
• Free collection of specified number of
outstation instruments
• Instant credit of outstanding cheques
up to Rs.15000/-
• Concession in exchange on demand
drafts and pay-orders and commission
on bills of exchange
• Issuance of free personalized cheques
books
• Free issuance of ATM, Debit, Credit and
add-on Cards
• Free investment advisory services
• Grant of redeemable reward points on use
of credit cards
• Free internet banking, phone banking and
any where banking facilities
• Issuance of discount coupons for purchase
of various products like computer
accessories, music CDs, cassettes, books,
toys, garments etc.etc.
• Last but not the least, issuance of free PVR,
Trade Fair tickets etc.
• Concession in rate of interest on Group
advances
• Exemption in upfront fees
•
PEST Analysis
 POLITICAL/ LEGAL
ENVIROMENT
• Government and RBI policies affect
the banking sector.
• Various banks in the cooperative
sector are open and run by the
politicians.
• Various policies are framed by the
RBI looking at the present situation
of the country for better control
over the banks.

ECONOMIC ENVIROMENT
• Every year RBI declares its 6 monthly
policy.
• The Union budget affects the banking
sector to boost the economy by
giving certain concessions or
facilities.
 Eg. Encouraged savings, FDI limits
etc.
 SOCIAL ENVIROMENT
• Banks provide various types of loans to
farmers, working women,
professionals, and traders.
• Also provide education loan to the
students and housing loans,
consumer loans, etc.
• Banks having big clients or big
companies have to provide services
like personalized banking to their
clients.
• Banks have changed the culture of
human life in India and have made life
 TECHNOLOGICAL
ENVIROMENT
• Encouraged the bankers to change the
concept of branch banking to anywhere
banking.
• The use of ATM and Internet banking has
allowed ‘anytime, anywhere banking’
facilities.
• Credit card facility has encouraged an era of
cashless society.
• Started home banking through
telecommunication facilities and computer
technology.
• Banks are also using SMS and Internet as
major tool of promotions and giving great
The 4 I’s of BANK
MARKETING
• Intangibility
 Characteristics of a service
indicating that it has no physical
attributes that a person may feel,
hear, taste before they buy it.
• Inconsistency
 It refers to variability or
heterogeneity.
 Eg. “Punjab National Bank”

• Inseparability
 Inseparability is that
characteristics of a service indicating
that it cannot be separated from
creator-seller of the product.
 3 ways of service production: Co-
production, isolated production, self
service production.
• Inventory
 Inventory relates to the perishable
characteristics of the service
RATER Analysis
RELIABILITY

– It is defined as the ability to perform

the promised service dependably
and accurately.
– The company delivers on its
promises–promises about delivery,
service provision, problem
resolution, and pricing.


– Indian Overseas Bank has

ensured that whoever comes in
for cash withdrawal will receive
his/her cash within five to ten
 ASSURANCE
• Employee’s knowledge and courtesy
and the ability of the firm and its
employees to inspire trust and
confidence.


• Indian Overseas Bank assures

the customers coming up to the
bank that the money they
invest is secure; the interest
rate that is being provided to
them is at par or sometimes
 TANGIBLITY
• Tangibles are defined as the appearances of physical
facilities, equipments, personnel and communication
materials.


• At Indian Overseas Bank, the entire premise is

air-conditioned.
• They have computerized systems in place and
therefore quick, accurate and efficient service
can be provided to the customers.
• The tables and chairs are conveniently located
for the customers.
• The personnel always have a cheerful and
helping veneer and are always ready to help
 EMPATHY
• Empathy is defined as the caring,
individualized attention the firm
provides its customers.


• The empathy shown by the

employees of the Indian Overseas
Bank is good as they are always
polite humble and helpful.
• This bank regularly holds seminars
and training workshops so that
they can understand the
 RESPONSIVENESS
• Responsiveness is the willingness to
help the customer and provide him
with immediate and fast service.


• The Indian Overseas Bank is

prompt at providing its
customers with the information
and services that they seek.
• It is extremely prompt when it
comes to resolving the
complaints of the customers.
 Kotak Mahindra Bank
• Established in 1985 as Kotak Mahindra
Finance Ltd.
• In 2003 got converted into Kotak Mahindra
Bank Ltd.
• Offers Banking solutions that covers almost
every sphere of life
• Awards:
– Best Corporate Governance Practices, 2009
– Ranked 19 by “Hewitt Best Employers in
India 2009”
– Business superbrand, 2008
– Best Workplaces in India, 2008
– Indian Express Technology Senate Uptime
7 PS
 Product
Width

Banking & Investment Loan & Corporate

Savings & Insurance Borrowings &
Banking Life Car Finance Corporate
Institutional
A/cs Insurance Finance
Credit Mutual Home Investment
Cards Funds Loans Banking
Depth Demat Share Loan Institutional
Trading against Equities
Deposits Structured Personal
property Treasury
Products Loans
Wealth Gold Commercial
Managemen Loans
NRI
t Estate
Services Planning
 Price
• RBI administered rates leave less room
for pricing decisions
• Elasticity of Demand & supply &
competitors strategy affect pricing
• The BPLR acts as benchmark for fixing
rates
• Differentiating Factors:
– Time Period
– Service charges
– Allied service benefits
 Price
• BPLR – 15.50%
• Home Loan – 8.49%
• Personal Loan – 15% - 20%
• Car Loan
– New – 12%
– Used – 16%

 Place
• Spread over 8 countries
• 126 cities in India
• 217 Branches all over India
• Over 800 ATMs
•
 Promotion
• Promotion strategy of Kotak Bank
targets to grow by cross selling
products rather than by building
a huge assets base.
• Tag lines:
– Think Investment. Think Kotak
– Lets make money simple
– Jeene ki aazadi
– Faidey ka insurance
 Promotion
• Tie up with makemytrip.com
• Tie up with gadgetsguru.in for
offering the Products/Services for
sale at a discounted rate netc@rds
(“Cardholders) holders
• Exclusive Discounts for Kotak Gold
Netcard users on booking of air
ticket, hotel or holiday  via
yatra.com
• Drawing Competition
 People

• Kotak Mahindra Bank amongst

Hewitt’s ‘Top 25 Best Employers’
• 9800 employee base
• i-mint Kotak B2E program : The
STARS for consistent and timely
recognition of excellence
 Process

• Superior technology which is their

differentiator
• Customer driven operations
• Product innovation to meet customer
requirements
• Global reach
 Physical Evidence
Office Interiors
Logo

ATM

Web page
Brochures Gold Credit Card
 Segmentation
• Demographic Variable:
– Urban areas with tier 2 cities
– Age group – 18-50
– Occupation –
• Business Persons
• Salaried
• HNIs
• Psychographic Variable
– Youthful appeal
– Seedy service



 Targeting
• Targeting at the higher end customer
compared to what most of the other
domestic banks are doing; reason:
device and solutions provider, and not
just a bank
• Tries to leverage from existing client
base
• Holistic targeting done by using the
network across the group, including
the high-end customer base in private
client business in securities firm,
mutual fund customers and car
 Positioning


• In terms of industry positioning, Kotak Bank has

recently embarked on the banking journey
and there is a long way to go
• Kotak Bank views commercial bank as a
broader financial services play, and not just a
standalone business.
• It has a positioning which is consistent with the
advice and solutions theme
• The Bank is basically a central platform for
customer relationships with other businesses
positioned around it for providing value to the
customer
• Kotak Bank claims to be in the business of
creating wealth for our customers
 SWOT Analysis
 Strengths
• Capital markets franchise
• Professional management
• Strong technology
• Well capitalized
• Construction equipment financing business
• Comprehensive cash management system
• Capturing supply chain businesses


 Weakness
• Wholesale Funding Costs
• Latecomers
• ·Less Promotional Activities
 SWOT Analysis


 Opportunities
• Scalability through increased brand awareness, market
penetration
 and service offerings across all categories of
financial services
• Increase in customer’s wallet share
• Leveraging the latest technology for providing quality
and client
 centric services


 Threats
• Oil prices and rising inflation
• Increasing interest rate scenario
 Axis bank

• First of the new private bank to began

operation in India.
• The Bank was promoted jointly by the
Administrator of the specified
undertaking of:
– The Unit Trust Of India (UTI - I)
– Life Insurance Corporation Of India (LIC)
– General Insurance Corporation Of
India(GIC)
– National Insurance Company Ltd
– The New India Assurance Company Ltd
– The Oriental Insurance Company Ltd
– United India Insurance Company Ltd.
 Product
Width

Personal Corporate NRI Priority

Banking
Accounts Accounts Accounts Accounts
Deposits Credit Deposits Deposits
DepthLoans Capital Market Remittances Loans
Cards Treasury Services Cards
Investments Cash Investments
management
Insurance Govt. Business Payments
Payments Remittances
 Price
• BPLR – 14.75%
• Home Loan – 8%
• Personal Loan – 14%-21%
• Car Loan
– New – 9.5%-15%(Fixed)
• Value for money
• Low fee charges



 Place
• Spread over 5 countries
• Present in all states of India
• 827 Branches all over India
• Over 2764 ATMs

 Promotion

• Name changed from UTI Bank to Axis

bank creating a global modern bank

image
• Tie up with dish tv
• Tie up with Jet Airways
• Advertising
• Print media
• Publicity
• Personal selling
• Tele marketing
 Physical Evidence

Web page ATM

Logo

Office Interiors Credit Cards

 People
• 14000 employee base
• Professionally qualified staff
• Service oriented organization
• Relationship Management
• Rigorous Training
 Process
• Flow of activities
• Standardization
• Customization
• No. of steps
• Simplicity

Segmentation
• Demographic
– Location
• metros & divisional cities
– Occupation
• Business person
• Salaried class
• Working women
– Age
• Senior citizen
• Minor
• Psychographic variable
– Life style
 Targeting strategy
• Corporate banking market
• Capital market
• Retail banking market
•
Selective specializtion strategy

 M1 M2 M3

Gold card

Silver card

Secured card
 Positioning
• Axis Bank has positioned itself as
a bank which gives higher
standard of services through
product innovation for the
diverse need of individual &
corporate clients. So they
highlight the following points in
their positioning statement
– Customer centric
– Service oriented
– Product innovation
 SWOT Analysis
Strengths


• Support of various promoters

• High level of services
• Knowledge of Indian market


Weakness


vNot having good image

vMarket Capitalization is very low
vNot been fully able to position itself
correctly
 S W O T A n a lysis


 Opportunities
• Growing Indian Banking sector
• People are becoming more service oriented
• In the global market


 Threats
• Future market trends
• From various competitors:
– Foreign banks
– Govt. banks

 HDFC BANK
• Incorporated in August 1994
• Among the 1st in new generation
commercial bank
• Best Performing Bank Award by CNBC
TV18 Financial Advisor Award, 2009
• Most tech-savvy award at Business
world Best Bank Award, 2009
• Most Trusted Brand, by Economic
Times, 2009
 Product
Width

Personal NRI Banking Wholesale

Banking &
Accounts Accounts & Banking
Corporate
Deposits
Loans Deposits
Remittances SME
Cards Investment & Financial
Investment & Insurance
Loans institutions
Govt. sectors&
Depth Insurance Trust
Forex & Trade NRI preferred
services
Payment banking
Payment
services
Private Banking services
 Price
• BPLR 15.75%
• Home Loan – 8.25% (30% of market
share)
• Car Loan –
– New 13.75%
– Used 15.50% - 18.00%
• Personal Loan 13.00% - 16.50%
 Place
• Global presence in 5 countries
• 635 cities
• 1506 branches
• 3573 ATMs
 Promotion
• RSCG India recently launched 2 TVC
campaigns for HDFC Bank titled
“Moon” & “Lost Boy”
• Launched its Life Insurance campaign,
“Papa kabhi gum nahi honge”
• Tag line :
– “We understand your world” making its
presence felt making its message clear
and ubiquitous with its customers
– “Sar utha ke jiyo”
• Feature in movies
Promotion
 People
• 7500 + employees
• Focus on continuous training by both
internal & external faculties
• Esop scheme covering a large no. of
employees
•
 Process
• Operates in a highly automated
environment in terms of IT &
communication
Centralized
system
Derive
 processing units Economies of
Electronic scale
Reduced
straight through transaction cost
processing
Data Improved cost
warehousing, efficiency, cross
CRM
Innovative sell
Provide new &
Technology superior
Applications products
Physical Evidence
SWOT Analysis
Strengths :


• Right strategy for the right products.

• Superior customer service vs. competitors.
• Great Brand Image.
• Products have required accreditation.
• High degree of customer satisfaction.
• Good place to work
• Lower response time with efficient and effective service.
• Dedicated workforce aiming at making a long-term career
in the field.


Weakness :


• Some gaps in range for certain sectors.

• Customer service staff need training.
• Processes and systems, etc
• Management cover insufficient.
SWOT Analysis
Opportunities :


• Profit margins will be good.

• Could extend to overseas broadly.
• New specialist applications.
• Could seek better customer deals.
• Fast-track career development opportunities on an
industry-wide basis.
• An applied research center to create opportunities for
developing techniques to provide added-value
services.


Threats :


• Legislation could impact.

• Great risk involved
• Very high competition prevailing in the industry.
• Vulnerable to reactive attack by major competitors.
• Lack of infrastructure in rural areas could constrain
Segmentation
• Demographic variables
– Posh and up market urban area
– HNIs both salaries & self employed
– All age groups
• Psychographic Variables
– Personalized services
– Conventional Banking services
 Targeting


• Niche marketing with focus on HNIs

• Privilege and priority banking services and
professional services for corporate clients
• Product specific targeting


 Positioning
• Positioned as a bank for affluent people and
corporate clients
 Comparison
• PLR Rates
– Kotak 15.50%
– Axis 14.75%
– HDFC 15.75%
• ATM coverage
– Kotak 800 +
– Axis 2764 +
– HDFC 3573 +


–
 Comparison
• Differentiator
– Kotak provides all financial services
under one roof
– Axis tries to build a global modern
bank image
– HDFC promotes financial
independence
• Differentiator
– Kotak believes in cross selling
– Axis is trying to increase customer
base
– HDFC is building a brand
 Service Blueprinting Process

Step 2 Step 3 Step 4 Step 5 Step 6

y the process
Identify beMap
to the the
blue
customerprocess
-printed Mapfrom
contact
or .customer the employee
customer
segment
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point of
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viewevidence
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and contact person activities to needed support functions
 Service Blueprint for making a
Bank Draft
EVIDENCE
PHYSICAL

Bank Token Demand Cash & Part of Draft Draft Draft

hall Draft Slip Slip Slip

Deposit
SUPPORT PROCESS(Back Stage) (On Stage) CUSTOMER

Cash Shows the

Arrive Take And slip and
at token Filling of demand Takes one take
bank slip slip Part of Draft
slip
CONTACT PERSON

Greet and Cashier greets Manager greets

give customer and check Gives slip and hand back
token demand draft slip the draft

Issuer Manager checks

Give other Prepares the slip and
Counts part of slip
Cash Draft and sign on draft
to issuer of pass it to
DD manager

Take Cash from

Cashier Pass slip to issuer
Pass draft to
manager
FUTURE…
 FUTURE
• The pervasive influence of information
technology will continue to
revolutionize banking.
• Internationally, the number brick and
mortar structure has been rapidly
yielding ground to click and order
electronic banking with a plethora of
new products.
• Banks will strongly rely on the merits of
relationship banking.
• CRM , therefore, will become the new
mantra in customer service
management, which is both
 Possible drawbacks
• Boom in housing loan market, the
sign of overheating has also started
surfacing with potential problem for
banks that have not exercised
sufficient caution.
• The pressure on margins is mounting
partly because of fierce competition
and partly as a result of falling
interest rates environment.
•
THANK YOU !!!