Professional Documents
Culture Documents
Marketing of Services
Project on:
PRODUCT MIX
The banks primarily deal in services and therefore, the formulation of product mix
is required to be in the face of changing business environment conditions. Of
course the public sector commercial banks have launched a number of policies and
programs for the development of backward regions and welfare of the weaker
sections of the society but at the same time it is also right to mention that their
development-oriented welfare programs are not optimal to the national socio-
economic requirements. A proportional contraction in the number of customers is
found affecting the business of public sector commercial banks. The changing
psychology, the increasing expectation, the rising income, the changing lifestyles,
the increasing domination of foreign bans and the changing needs and
requirements of the customers at large make it essential that they innovate their
service mix and make them of worked class. The development of new generic
product, especially when the business environment is regulated is found a difficult
task. However, it is pertinent that banks formulate a package in tune with the
changing business conditions. Against this background, we find it significant that
the banking organizations minify, magnify, combine and modify their service mix.
In the formulation of service mix, the banks can follow two guidelines, first is
related to the processing of product to market needs and the second is concerned
with the processing of market needs to product. In the first process, the needs to the
target market are anticipated and visualized and therefore, we expect the prices
likely to be productive. In the second process, the banks react to the expressed
needs and therefore we consider it reactive. It is essential that every product is
measured up to the accepted technical standards. This is because no consumer
would buy a product, which contains technical faults. Technical perfection in
service is meant prompt delivery, quick disposal, and presentation of right data,
right filing, proper documentation or so. If computers start disobeying, the
command and the customers get wrong facts, the use of technology would be a
minus point, and you don’t have any excuse for your faults.
Marketing aims not only offering but also at creating\innovating the
services\schemes found new to the competitors vis-a vis- to the customers. The
enhanced customer patronage would be a reward to the bank. The additional
attractions, the product attractiveness would be a plus point of your mix, which
would help you in many ways. This makes it essential that the banking
organizations are sincere to the innovations process and try to enrich their
peripheral services much earlier than the competitors. We also find the product
portfolio of the banks. While formulating the services mix, it is also pertinent that
the bank professionals make possible affair synchronization of core and peripheral
services. To be more specific, the peripheral services need an intensive care since
the core services are found by and large the same. Innovating the peripheral
services thus appears to be an important functional responsibility of marketing
professionals. We can’t deny the fact that if the foreign banks have been getting a
positive response; the credibility goes to their innovative peripheral services.
Thus, the formulation of product mix is found to be a difficult task that requires
world-class professionalism.
PROMOTIONAL MIX:
Advertising
Advertising is paid form of communication. Banking organizations use this
component of the promotion mix with motto of informing, sensing and persuading
the customers. While advertising it is essential to be aware of key decision making
areas so that instrumentally helps banks at micro and macro levels.
Telemarketing:
The telemarketing is a process of promoting the business with the help of
sophisticated communication network. Telemarketing is found instrumental in
advertising the banking services and the banking organizations can use this tool of
the promotion mix both for advertising and selling. This minimizes the dependence
of banking organizations on sales people and just a counter or center as listed in the
call numbers may service multi- dimensional services.
Telemarketing is likely to play an incremental role in marketing the banking
services. The leading foreign banks and even some of the private sector
commercial banks have been found promoting telemarketing and they have been
getting positive results for their efforts.
Word-Of- Mouth:
Much communication about the banking services actually takes place by word- of-
mouth information, which is also known as word- of- mouth promotion. The oral
publicity plays an important role in eliminating the negative comments and
improving the services. This also helps the banker to know the feedback, which
may simplify the task of improving the quality of services. This component of
promotion mix is not to influence budget adversely or generate additional financial
burden. By improving the quality of services and by offering small gifts to the
word- of- mouth promoters, bankers can get more business command in their area.
The above facts make it clear that such kind of promotion is influenced by a
number of factors. The most dominating factor is the quality of services offered.
The bank professionals, the frontline staff and the senior executives should realize
that degeneration in quality would make this tool effective.
PRICE MIX
THE PEOPLE
Sophisticated technologies no doubt, inject life and strength to our efficiency but
the instrumentality of sophisticated technologies start turning sour id the human
resources are not managed in a right fashion. We can’t deny the fact that if foreign
banks are performing fantastically; it is not only due to the sophisticated
information technologies they use but the result of a fair synchronization of new
information technologies and a team of personally committed employees. The
moment they witness lack of productive human resources even the new generation
of information technologies would hardly produce the desired results. In addition
to the professional excellence, the employees working in the foreign banks are
generally value- based. Thus we accept the fact that generation of efficiency is
substantially influenced by the quality of human resources. The quality for banking
sector is an aggregation of all the properties, which are found essential for
generating the efficiency and projecting a fair image. Even efficiency essentially is
supported by ethical dimension, humanity and humanism.
The development of human resources makes the ways for the formation of human
capital. Human resources can be developed through education, training and by
psychological tests. Even incentives can inject efficiency and can motivate people
for productive and qualitative work.
THE PROCESS
Flow of activities: all the major activities of banks follow RBI guidelines. There
has to be adherence to certain rules and principles in the banking operations. The
activities have been segregated into various departments accordingly.
Standardization: banks have got standardized procedures got typical transactions.
In fact not only all the branches of a single-bank, but all the banks have some
standardization in them. This is because of the rules they are subject to. Besides
this, each of the banks has its standard forms, documentations etc. Standardization
saves a lot of time behind individual transaction.
Customization: There are specialty counters at each branch to deal with customers
of a particular scheme. Besides this the customers can select their deposit period
among the available alternatives.
Number of stores: numbers of steps are usually specified and a specific pattern is
followed to minimize time taken.
Simplicity: in banks various functions are segregated. Separate counters exist
with clear indication. Thus a customer wanting to deposit money goes to
‘deposits’ counter and does not mingle elsewhere. This makes procedures not only
simple but consume less time. Besides instruction boards in national boards in
national and regional language help the customers further.
Customer involvement: ATM does not involve any bank employees. Besides,
during usual bank transactions, there is definite customer involvement at some or
the other place because of the money matters and signature requires.
The physical evidences include signage, reports, punch lines, other tangibles,
employee’s dress code etc. The company’s financial reports are issued to the
customers to emphasis or credibility. Even some of the banks follow a dress code
for their internal customers. This helps the customers to feel the ease and comfort
Signage: each and every bank has its logo by which a person can identify the
company. Thus such signages are significant for creating visualization and
corporate identity.
Tangibles: banks give pens, writing pads to the internal customers. Even the
passbooks, chequebooks, etc reduce the inherent intangibility of services.
Punch lines: punch lines or the corporate statement depict the philosophy and
attitude of the bank. Banks have influential punch lines to attract the customers.
Banking marketing consists of identifying the most profitable markets now
and in future, assessing the present and future needs of customers, setting business
development goals, making plans-all in the context of changing environment.
There are four distinctive characteristics of service, which create challenges and
opportunities. They are commonly known as the four I’s namely:
1. Intangibility
2. Inconsistency
3. Inseparability
4. Inventory.
1.) Intangibility
2.) Inconsistency
3.) Inseparability
(i) Co- production: In this case both the service provider and the customer work
together to produce services. When a customer wants to withdraw cash from the
banking premises, then both the customer and the service provider needs to be
present.
(ii) Isolated production: It is that part of service that is done outside to an
organization. Eg. Tele-Banking.
(iii) Self Service production: In this case, the customer uses the equipments of the
service providers and self serves it. Eg. ATM.
4.) Inventory
DEFINITION OF E-BANKING
Electronic banking, also known as electronic funds transfer (EFT), is simply the
use of electronic means to transfer funds directly from one account to another,
rather than by cheque or cash. You can use electronic funds transfer to:
Have your paycheck deposited directly into your bank or credit union checking
account.
Withdraw money from your checking account from an ATM machine with a
personal identification number (PIN), at your convenience, day or night.
Instruct your bank or credit union to automatically pay certain monthly bills
from your account, such as your auto loan or your mortgage payment.
Have the bank or credit union transfer funds each month from your checking
account to your mutual fund account.
Have your government social security benefits check or your tax refund
deposited directly into your checking account.
Buy groceries, gasoline and other purchases at the point-of-sale, using a check
card rather than cash, credit or a personal check.
Use a smart card with a prepaid amount of money embedded in it for use
instead of cash at a pay phone, expressway road toll, or on college campuses at
the library's photocopy machine or bookstores.
Use your computer and personal finance software to coordinate your total
personal financial management process, integrating data and activities related
to your income, spending, saving, investing, recordkeeping, bill-paying and
taxes, along with basic financial analysis and decision making.
VARIOUS FORMS OF E-BANKING:
INTERNET BANKING:
Internet Banking lets you handle many banking transactions via your personal
computer. For instance, you may use your computer to view your account balance,
request transfers between accounts, and pay bills electronically.
If the number is entered incorrectly several times in a row (usually three attempts
per card insertion), some ATMs will attempt retain the card as a security
precaution to prevent an unauthorized user from discovering the PIN by
guesswork. Captured cards are often destroyed if the ATM owner is not the card
issuing bank, as non-customer's identities cannot be reliably confirmed.
The Indian market today has approximately more than 25,000 ATM’s.
TELE BANKING:
Undertaking a host of banking related services including financial transactions
from the convenience of customers chosen place anywhere across the GLOBE and
any time of date and night has now been made possible by introducing on-line
Telebanking services. By dialing the given Telebanking number through a landline
or a mobile from anywhere, the customer can access his account and by following
the user-friendly menu, entire banking can be done through Interactive Voice
Response (IVR) system. With sufficient numbers of hunting lines made available,
customer call will hardly fail. The system is bi-lingual and has following facilities
offered
SMART CARD:
Smart cards can also be used with a smart card reader attachment to a personal
computer to authenticate a user.
Smart cards are much more popular in Europe than in the U.S. In Europe the
health insurance and banking industries use smart cards extensively. Every
German citizen has a smart card for health insurance. Even though smart cards
have been around in their modern form for at least a decade, they are just starting
to take off in the U.S.
DEBIT CARD:
Debit cards are also known as check cards. Debit cards look like credit cards or
ATM (automated teller machine) cards, but operate like cash or a personal check.
Debit cards are different from credit cards. While a credit card is a way to "pay
later," a debit card is a way to "pay now." When you use a debit card, your money
is quickly deducted from your checking or savings account.
Debit cards are accepted at many locations, including grocery stores, retail stores,
gasoline stations, and restaurants. You can use your card anywhere merchants
display your card's brand name or logo. They offer an alternative to carrying a
checkbook or cash.
E-CHEQUE:
Direct Deposit
For Banks:
Price- In the long run a bank can save on money by not paying for tellers or for
managing branches. Plus, it's cheaper to make transactions over the Internet.
Customer Base- The Internet allows banks to reach a whole new market- and a
well off one too, because there are no geographic boundaries with the Internet. The
Internet also provides a level playing field for small banks who want to add to their
customer base.
Efficiency- Banks can become more efficient than they already are by providing
Internet access for their customers. The Internet provides the bank with an almost
paper less system.
Customer Service and Satisfaction- Banking on the Internet not only allow the
customer to have a full range of services available to them but it also allows them
some services not offered at any of the branches. The person does not have to go to
a branch where that service may or may not be offer. A person can print of
information, forms, and applications via the Internet and be able to search for
information efficiently instead of waiting in line and asking a teller. With more
better and faster options a bank will surly be able to create better customer
relations and satisfaction.
Image- A bank seems more state of the art to a customer if they offer Internet
access. A person may not want to use Internet banking but having the service
available gives a person the feeling that their bank is on the cutting image.
For Customers:
Bill Pay: Bill Pay is a service offered through Internet banking that allows the
customer to set up bill payments to just about anyone. Customer can select the
person or company whom he wants to make a payment and Bill Pay will withdraw
the money from his account and send the payee a paper check or an electronic
payment
Other Important Facilities: E- banking gives customer the control over nearly
every aspect of managing his bank accounts. Besides the Customers can, Buy and
Sell Securities, Check Stock Market Information, Check Currency Rates, Check
Balances, See which checks are cleared, Transfer Money, View Transaction
History and avoid going to an actual bank. The best benefit is that Internet banking
is free. At many banks the customer doesn't have to maintain a required minimum
balance. The second big benefit is better interest rates for the customer.
The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to
set up a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name
of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995.
HDFC Bank operates in a highly automated environment in terms of information
technology and communication systems. All the bank's branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities to its
customers. Multi-branch access is also provided to retail customers through the
branch network and Automated Teller Machines (ATMs).
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class
bank. The Bank's business is supported by scalable and robust systems which
ensure that our clients always get the finest services we offer.
The Bank has prioritised its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the Bank has succeeded in leveraging its
market position, expertise and technology to create a competitive advantage and
build market share.
E- BANKING AND OTHER PRODUCTS AT HDFC BANK
Leverage our technology platform and open scalable systems to deliver more
products to more customers and to control operating costs.
Maintain current high standards for asset quality through disciplined credit
risk management.
Continue to develop products and services that reduce bank’s cost of funds.
Private sector banks are today used the latest technology for the different
transaction of day to day banking life. As we know that Information Technology
plays the vital role in the each and every industries and gives the optimum return
from the limited resources. Banks are service industries and today IT gives the
innovative Technology application to Banking industries. HDFC BANK is the
leader in the industries and today IT and HDFC BANK together combined they
reached the sky. New technology changed the mind of the customers and changed
the queue concept from the history banking transaction. Today there are
different channels are available for the banking transactions.
We can see that the how technology gives the best results in the below diagram.
There are drastically changes seen in the use of Internet banking, in a year 2001
(2%) and in the year 2009 ( 45%).
HDFC BANK is the very consistent player in the New private sector banks. New
private sector banks to withstand the competition from public sector banks came up
with innovative products and superior service.
Conclusion
From all of this, we have learnt that information technology has empowered
customers and businesses with information needed to make better investment
decisions. At the same time, technology is allowing banks to offer new products,
operate more efficiently, raise productivity, expand geographically and compete
globally. A more efficient, productive banking industry is providing services of
greater quality and value.
The rise of E-banking is redefining business relationships and the most successful
banks will be those that can truly strengthen their relationship with their customers.
Without any doubt, the international scope of E-banking provides new growth
perspectives and Internet business is a catalyst for new technologies and new
business processes. With rapid advances in telecommunication systems and digital
technology, E-banking has become a strategic weapon for banks to remain
profitable. It has been transformed beyond what anyone could have foreseen 25
years ago.