Banking Services

Marketing
 
 
 
 

Introduction  

Banks are the most significant Bodies in

    

the Indian financial market. Dominated by

public sector Banks, the Industry has
so far acted as an efficient partner in the
growth and the development of the
country.
Size of the banking sector has gone up
    

over six times from Rs.5,984 bn

    in 1995 to over RS.36,105 bn in 2006.  

This transformation has been largely

brought about by:
 liberalization and economic reforms.
  Increased Competition from Domestic
& foreign Banks.
 More Services Offered e.g. Credit
cards, Insurance, Foreign Currency
loans and Investment Banking.
 Increase in FDI from 49% to 74% for
Private banks.
 Increase in Retail Finance – Consumer
Credit
 
 
 
 

Banking Industry :
Overview  

 First bank established in 1786 named

As ‘General Bank Of India’.
 In 1920 ,three Presidency banks
merged to form ‘Imperial Bank of
India’. Post Independence this bank
was named as SBI in year 1955.
 Post liberalization reforms, we have
approximately:
- 222 Commercial Banks
- 28 Public sector banks
- 29 Private Banks
- 31 Foreign banks
With a combined network of more than
60,000 branches and 17,000 ATMs across
the Country.
 
 
 
 

Major Players in Banking

sector  

Indian Banks 
 ICICI BANK
 HDFC
 State Bank of India
 Punjab National Bank
 AXIS bank
 Corporation bank
  IDBI
 Bank Of Baroda
 
 

Foreign Banks
 HSBC
 Standard Chartered Bank
 Barclays Bank
 Deutsche Bank
 CitiBank
 Bank of America
 
 
 
 

4 I’s of BANKING  

 Intangibility
- No physical Attribute to touch, feel
  

or sense any service.

 Inseparability
 - Cannot be separated from Creator-
  

Seller of the Services.

 Inventory/Perishability
  -Cannot be stored, saved and then
used later.

 Inconsistency/Variability
- Different customers may get
  

different levels of services

 
 
 
 

PEST ANALYSIS  

o Political/legal environment Analysis

 

o Economic environment Analysis

 

o Social environment Analysis

 
 o Technological environment Analysis
 
 
 
 

Political/legal environment  

o Government and RBI policies

o Declaration of measures like waiver
of short-term agricultural loans, to
attract the farmer’s votes.
o Exploitation of various banks in
the cooperative sector, open and
run by the politicians.
o Chairmen of the various banks
appointed by the govt.
 

Various policies are framed

by the RBI for better
control over the banks.  

 
 
 
 
Economic environment  

 Existence of banking in one form or

the other from time to time.
 Commencement of the present era in
banking with establishment of bank of
Bengal in 1809 under the government
charter and with government
participation in share capital.
 

 Every year RBI declares its 6 monthly

policy and accordingly the various
measures and rates are implemented
which has an impact on the banking
sector. 3
 

 Union budget affects the banking

sector to boost the economy by
giving certain concessions or facilities.
For e.g. encouragement of the savings
in the Budget, relaxation of the FDI
limits.
 
 
 
 

       Social environment  

 Nationalization of the banks in 1969 –

Only big business houses and the effluent
sections of the society getting benefits of
banking in India 
 To adopt the social development in the
banking sector and speedy economic
progress, consistent with social justice.
 

 Help economically weaker section of

the society and provide need-based
finance to all the sectors of the
economy with flexible and liberal
attitude.
e.g. various types of loans to farmers,
    

working women, professionals, traders,

education loans, 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
much easier for the people.
 
 
 
 

Technological environment  

 Much important and wider role of

technology in bank’s internal control
mechanisms and services offered by
them.
 

 Change of the concept of ‘branch

banking’ to ‘anywhere banking’.
 
  An era of ‘cashless society’ with
‘electronic-purse’.
 

 Use of SMS and Internet as major tool

of promotions and utility to
customers.
 

 Simplified operations and customer

handling.
 

 Home banking and Internet banking.

 

All these technological changes have

forced the bankers to adopt Customer-
Based Approach instead of Product-
Based Approach.
 
 
 
 
 7 P’S OF  
BANKING SECTOR
 
 
 
 

PRODUCT MIX 
 ATM Network
 7-Day Banking
 Telebanking
 iConnect-Internet Banking
 

It includes all different product lines a

company offers to its customers. 

 Savings Account
 
 
 
 

 Rewards
 Dial-A-Draft
 Credit Limit Increase
 24-Hour ATMs
  Concession on Personal Remittances
 Overdraft Facility
 Free ATM Card
 Other Features
 

 Credit Cards
 
 
 
 

PRICE MIX 
It is nothing but the interest rates charged by
the different banks. 
ATM Card Issue 
 

Free – 2 ATM cards issued free if it joint account 

 

Add – on Card 
 

RS. 100 – Beyond 2 cards 

 

Duplicate Card 
 

Rs. 100 
 
 
 
 

Other General Charges 

  
 

Current Account 
 

Savings Account
  
 

Transaction Charges 
 

NIL 
 

NIL 
 

Charges for issue of Cheques book 

 

NIL 
 

NIL 
 

Issue of duplicate statement 

 

Rs. 25 per page 

 
 Rs. 25 per page 
 

Account closure 
 

Rs.100 
 

Rs.100 
 
 
 
 

The Most Favorable Pricing Strategy

 
 
 
 

PLACE MIX 
It is the location analysis for banks branches.
Some of the factors affecting the location
analysis are :- 
 The Trade Area
 Population Characteristics
 Commercial Structure
 Proximity to other convenient Outlets
 Real Estate Rates
 Proximity to Public Transportation
  Location of Competition
 Visibility
 Access
 
 
 
 

PROMOTION MIX 
It is making the customer more and more
aware of the services and benefits provided by
the banks.
Different ways of promotion are :- 
 Public Relations
 Personal Selling
 Sales Promotion
 Word-of-mouth Promotion
 Telemarketing
 Internet
 
 
 
 

PEOPLE  
  An essential ingredient to any service provision
is the use of appropriate staff and people.
Recruiting the right staff and training them
appropriately in the delivery of their service is
essential if the organisation wants to obtain a
form of competitive advantage. Consumers
make judgements and deliver perceptions of
the service based on the employees they
interact with. Staff should have the
appropriate interpersonal skills, aptititude,
and service knowledge to provide the service
that consumers are paying for.
 
 
 
 

PROCESS  

 The process mix constitutes the

overall procedure involved in using
the services offered by the bank. A
process should be such that the
customer is easily able to
understand and easy to follow.
 

 Let’s take for example the process

for application for a car loan.
Now this mainly involves 3 things.
 
 Producing of proper documents
 Filling up of application form
 Paying for the initial down
payment.
 

The smaller and simpler the

procedure, the better
the process, and the customer will be
more satisfied.  
 

 
 
 
 

PROCESS CONT…..  

 It Refers to the systems used to assist

the organisation in delivering the
service.
 
For example:- Banks that send out Credit
Cards automatically when their
customers old one has expired again
require an efficient process to identify
expiry dates and renewal. An efficient
service that replaces old credit cards will
foster consumer loyalty and confidence in
the company. 
 
 
 
 

PHYSICAL EVIDENCE 
 Physical evidence is the overall layout
of the place i.e. how the entire bank
has been designed. Physical evidence
refers to all those factors that help
make the process much easier and
smoother.
 For example, in case of a bank, the
physical evidence would be the
placement of the customer service
executive’s desk, or the location of the
place for depositing cheques.
The more the bank does to make the
service easier
and better the more satisfied will be the
customer. 
 
 
 
 

Service Quality  

Reasons why a customer

should be given QUALITY
SERVICES -
o Industry is competitive
o Difficult to win back a lost
customer
o Most customers don’t complain
but just opt out
 
 
 
 
RATER Analysis - Indian
Overseas Bank  

Zeithaml, Bitner and Parsuraman 

RELIABILITY 
ASSURANCE 
TANGIBILITY 
EMPATHY 
RESPONSIVENESS
 
 
 
 

Reliability  

 Ability to perform the promised service

dependably and accurately.
 “No Excuses” service delivery.
 Indian Overseas Bank
 Faces stiff competition
  Existing customers have faith, loyalty
and trust in this bank.
 Provide them best and reliable services
 For e.g., no person likes to wait to
withdraw his/her money. Indian
Overseas Bank has ensured that
whoever comes in for cash withdrawal
will receive his/her cash within five to
ten minutes.
 
 
 
 

Assurance  

 Employee’s knowledge and courtesy

and the ability of the firm and its
employees to inspire trust and
confidence.
 Indian Overseas Bank
 Every customer treated with utmost
care
 Problem solved with great enthusiasm.
 Customers are assured
o the money they invest is secure
 othe interest rate that is being
provided to them is at par or
higher.
o the money they have invested will

be returned to them as and when

required with proper interest.
 Empower their customer contact
people
 Regularly train them in skills to build
trust and loyalty between employees
and customers.
 Assigned some of their staff members
to build relationships with the
customers by getting to know them
personally.
 
 
 
 

            Tangibility  

 The appearances of physical facilities,

equipments, personnel and
communication materials.
 Indian Overseas Bank
  Entire premise is air-conditioned.
 Computerized systems in place - quick,
accurate and efficient service can be
provided to the customers.
 Tables and chairs are conveniently
located.
 Personnel always have a cheerful and
helping behaviour.
 Entire place done up in bright colours -
customer can immediately feel the
warmth and the radiance of the place.
 
 
 
 

Empathy  

 The caring, individualized attention the

firm provides its customers.
 Indian Overseas Bank
 Employees are always polite humble
and helpful.
 Ready to go out of the way.
 Regularly holds seminars and training
workshops for employees so that they
 can understand the consumer better
and thus serve them better.
 
 
 
 

Responsiveness  

 The willingness to help the customer

and provide him with immediate and
fast service.
 Indian Overseas Bank
 Prompt at providing customers with
information and services they seek.
 Prompt when it comes to resolving
complaints of customers.
 The customers, in their feedback
form, mentioned this as one of the
most important factor that has
prompted them to continue with this
bank.
 
 
 
 
SERVICE RECOVERY  

Service recovery pertains to the actions

taken by an organization in response to a
service failure. When a customer
complains, he expects 3 types of fairness-
 Outcome Fairness : Charging the
customer for a service which was a
result of a mistake on bank’s part.
 

 Procedural Fairness : No efforts

made by any of the employees to help
the customer.
 

 Interaction fairness : Non-

fulfillment of the promises to the
customer, lack of apologizing act.
 
 
 
 

Complaint Handling-HDFC Bank 

  Even the best firms are going to find
themselves facing complaints from
customers.
 How to diffuse them and then turn
them into positive experiences for all
involved.
 Turned to the airline industry for
inspiration.
 Maps the customer flow at its branch.
                'May I help you' desk at the reception.
                Efficiency parameters for each sub-process.

 Monitors how long it takes for

customer transactions as well as
complaints to get processed.
 ‘Moments of truth' surveys modeled
after the airline industry's Satisfaction
surveys.
 Believes that unless they change to
create convenience for their customer
and add to his brand experience, they
will fail to capture the loyalty.
 
 
 
 

COMPLAINT
RESOLUTION
MODEL      (CRM) of HDFC Bank  

 Not as a mere complaint but as an

issue.
 If there is any complaint either by an
employee or a customer in any
branch; it will be looked into and
resolved in 24 hours.