Risk Managemaent

CHAPTER VI
INTERNAL MARmTING IN BANKS
Prepared by BeeHive Digital Concepts Cochin for Mahatma Gandhi University Kottayam
CHAPTER VI
INTERNAL MARKETING IN BANKS
Introduction Organisations in order to succeed not only need to align themselves with customers, but with their human resources also. It is the employee's vision, the values they espouse and share, the aspirations they commit to and the capabilities they possess that are the basis on which an organization can hope to create or transcend a quantum change. Financial institutions should not focus all their attention on customers, forgetting their staff. In service organizations, in particular, the role of employees has a crucial impact on customer satisfaction and retention. Customer-facing staff in financial institutions occupy a boundary-spanning role and are often seen as part and parcel of the product or service being provided. Outstanding service comes from outstanding employees. "In the service business you can't make happy guests with unhappy employees" (Hostage, 1975)' In the emerging scenario, commercial banks face challenges coming out deregulation, competition and new technology. Operating in such a changing
environment requires the right type of personnel and manpower, as only the best would survive. It is increasingly being recognized in service firms that in order to be successful at marketing to the external customer, internal marketing to the staff is essential.
22 1
Internal Marketing in Banks Internal Marketing Internal Marketing helps to ensure that staff understand the product itself and believe in what the organization is trying to do. If an organization's own employees are not markets oriented, if they do not support the overall corporate and marketing strategies, then the chances of successful plan implementation are minimal. Internal Marketing deals with the way in which an organization manages relationship between itself and its employees at all levels. As such it can play an important role in creating and maintaining a market-oriented corporate culture. The process of internal marketing is seen as particularly important in the financial services sector.(Piercy. and Morgan, 199 1) The idea behind internal marketing is to ensure that all members of the staff provide the best possible contribution to the marketing activities of the company and successfully complete all telephone, mail, electronic, and personal interactions with the customer in a manner that adds value to the service encounter.(Payne, 1995)'
Role of Employees
In interaction with customers, a large number of employees who do not belong to marketing departments have profound impacts on the quality perceptions and future purchasing behaviours of consumers and users. Turning these employees into truepart time marketers is a demanding task (Gummerson, 1991)~ Where internal marketing is concerned with the development of a customer orientation, the alignment of internal and external marketing ensures coherent relationship marketing.
222
Internal Marketing in Banks
In a marketing-oriented, customer focused bank, all employees understand that they are central to service delivery. Their presence makes the service more tangible and in many cases personalised. Branch personnel coristitute a vital link in accurately projecting the bank's image and therefore they should be kept informed about what is being proposed and then trained to implement any specific projects. Right employees make all the difference. The company must be willing to invest in their continuous training and development. It needs to cover a large number of areas such as job knowledge and also aspects such as customer sensitivities and problem handling situations. Training and Development In an era of constant change, the only competitive advantage an organisation can have is its ability to learn and act faster than the present and potential competitors. Continuous learning across all levels, in delivering superior value propositions to customer is therefore critical to success. Faced with the hard realities of globalisation, liberalization, deregulation, end user assertiveness and high-paced technology, with hardly any response time, employees need the ability to mange change. In the banking industry, the combination of highly competitive market place and new techniques have forced banks to add more services in an attempt to increase their profitability and market share. Employees are now expected to promote these new products and services to the existing and potential customers. For this
223 Internal Marketing in Banks employees are to be trained so that they come to acquire the qualities of a trained professional: precision, mastery of details, sense of perfection, logical analysis, focus on essentials and result orientation. In State Bank of Travancore training of its employees is a continuous process. It has two training centres with five channels of programmes running almost concurrently. The number of employees who have attended training programmes on marketing are given in Table 6.1. Table: 6.1 Attendance in 'TrainingProgrammes on Marketing Training Programmes Percent
Respondents
Not attended Total
201
100.0
Source: Survey Data
The data shows that only 24.9 percent of the employees interviewed had occasion to attend training programmes on marketing, leaving vast majority of the employees requiring training on the various aspects of marketing.
It is also relevant to examine the institution from where the employees had
got training. The details are given in Table 6.2.
224
Institution where Training attended ~nstitution SBT Training Centre

SBI Staff College
[-xo
Respondents Percent
I
NIBM
Total
50
100.0
Source: Survey Data

Majority of the employees - 92 percent had their training in marketing at State Bank of Travancore Training centers located at Trivandrum or Cochin. Only 8 percent had the privilege of attending marketing related programs at all India level Institutions. Attending training programs at national institutes make lot of difference in terms of quality and the perspective of training programs is much broader and deep. Such training programmes are useful especially for the middle and senior level executives, as the focus is more on building effective marketing strategies.
Marketing Strategy Awareness regarding the need for marketing is of importance if there has to be an effective internal marketing system. Employees should understand that every product and service has to be marketed and this requires a strategic approach. The opinion on marketing strategy by the employees is given in Table 6.3.
225
'Table: 6.3 Opinion on Marketing Strategy
Total Source: Survey Data
100.0
Majority of the employees (75.60%) felt that SBT has a marketing strategy whereas almost one fourth of the employees (24.40%) responded that there is no marketing strategy in the bank.
Developing New YroductslSewices
In the liberalised set up with increasing competition private banks are

bringing out innovative products and are being marketed through educated young employees. Employees of public sector banks have been selling traditional products with minor modifications but even to retain the market share public sector should understand, design and market innovative products through their employees who knows the markets for quiet long. The responses regarding developing of new products are given in Table 6.4.
226
Table: 6.4 Opinion on Developing New ProductslSewices
F------j
Need for new Products
I No. of Respondents I
Percent
Total
100.0
Source: Survey Dartr Most of the ernployees who constituted 79.6 percent of the respondents felt that the market needs new products and are to be developed. Only 20.4 percent of them were of the opinion that the market do not need new products.
Range of New Products/Sewices

Customers want new products and services from financial service providers like banks to suit their changing needs. Their preferences keep changing. An outward looking organisation and its employees also get to know the needs of customers through their interactions. Customers may be making enquiries about the availability of new products and services. They may also through suggestions and complaints, indicate the need for such services. Organisations also conduct regular research to find out the competitors product and the targeted segment.
The
information collected through such sources is made use of in designing new products or modifying the existing products. Table 6.5 shows the details regarding new products as reported by the employees.
227
'Table: 6.5
Need for New ProductslServices
NO.of Responses
Credit Cards Personalised Service Tele Banking

--
03.80
09.49 47
Internet Banking Insurance P d u Mutual Fund
08.92 08.35
05.12
Utility Payments Low Interest Loans Anywhere Banking Total

Source: Survey Data
04.36 00.56 527
100.00
Most of the respondents indicated the need for products like ATM, credit cards, telebanking, internet banking which are mostly technology oriented products. Substantial responses were also in favour of rendering quick and personalised service. Some of the employees also felt that SBT should start selling insurance and mutual fund products so that SBT becomes a financial service provider providing all the financial services under one roof. Higher returns and low interest on loans were
228
also indicated by a few of the employees. Minimum percentage of responses were for undertaking utility payments and providing anywhere banking. Promotional Strategy Some of the strategies that banks use effectively are Advertising, Publicity, improved Customer Service, competitive Pricing, large Branch Network, Focus marketing of selected products, Relationship Banking and providing new products and services to the changing needs of the customers. Advertising: Advertising relates to any paid form of non-personal presentation of ideas, goods or services by an identified sponsor. Advertising is paid for by banks and involves the use of press, Radio, Television. hoarding, signboards, direct mail etc. Publicity: Publicity is normally 'free' in the sense that no media costs are involved. Here the message is conveyed through exhibitions, demonstrations, seminars, unpaid for news reports etc. Customer Service: Good customer service is always a good promotional strategy. Satisfied customers talk well of banks to others and the image of the banks is enhanced and serves in good stead to bring in more customers and increase the market share. Pricing: In a liberalised financial sector, ~ricing is often used as a promotional tool. Higher interest rates on deposits and lower interest rates on loans is made use as a marketing strategy to capture the market.
229
Branch Network: This gives advantages of being nearer to the customer at a place of convenience. However, with the introduction of information technology and networking of branches, customers get facilities like ATM, telebanking and home banking. These have to some extent reduced the need for increased branch network. Focus marketing: Focus marketing is concentrating more on certain products and aggressively marketing them. Some products by their very inherent nature may have more demand than other products. Making these products customer friendly can increase the market share for these products. Relationship Banking: Relationship banking refers to the relationship between the bank and its employees with the customers over a period of time. Strengthening of relationship can build customer loyalty and retain customers. New products and services: New products and services also act as a promotional tool since the launch of these products attracts attention of customers. New products and services stand apart from the existing products and services and should generate interest in the potential customers. The responses of employees regarding the elements of promotional strategy are given in Table 6.6.
230
--Table: 6.6
,roduct/~ervice
Advertising Publicity
Elements of Promotional Strategy No. of Responses

82 34 30
Percent
23.03 09.55 08.43 04.21 08.71
Customer Service Pricing Branch Network Focus Marketing Relationship Banking New ProductslServices Technology Total Source: Survey Data
15
31 60 35 55 14 356
16.85 09.83 15.45 03.94 100.00

.
A good number of SBT employees felt that advertising is the best promotional tool as 23.03 percent of responses were in favour of advertising. The next preference was for focus marketing as 16.85 percent responses indicated. New products and services were also equally important. A graphical representation of the responses of the employees on the elements of promotional strategy is given in Fig. 6.1
23 1
Internal Marketin in Banks
Figure 6.1 Elements of Promotional Strategy: Responses of Employees

25-i
K
a ,
a, Z
Elements
232 -
The successful service company must first sell the job to its employees before it can sell its services to customers (Sasser, Earl W and Stephen Arbeit 1976)'
Awareness on Deposit Schemes
To successfully promote and market the products and services, employees should be aware of the range of products and services available with the bank. SBT has introduced many new deposit schemes during the last 10 years. Advertisements are made in print and electronic media. Publicity materials are also sent to various branches from development departments and marketing departments at head office. Circulars are also issued to make the staff aware of the accounting system as well as strategies for effective marketing of these products. The responses regarding the awareness on deposit schemes are given in Table 6.7.
'Table: 6.7 Awareness on New Deposit Schemes Product/Sewice No. of Responses Percent
Nawa Swarna Varsha
86
51.50
I Super surplus
Star Deposit Scheme Variable Deposit
1 I
51
1 1
30.54
1
(
02.40
I Unit Deposit Scheme

Total
10 167
05.98 100.00
Source: Survev Data The graphical representation on the awareness on new deposit schemes is
given in Figure 6.2.
233
--
Figure 6.2 Awareness on New Deposit Schemes: Responses of Employees
234
-
Nava Swarna Varsha is the product that offers added insurance coverage to the depositor. SBT was one of the pioneers of this product and as such majority of the responses (51.50%) indicated awareness of this particular product. Super Surplus, a recurring deposit scheme with a choice to the customer to select the period of deposit was also known to the staff as 30.54 percent of responses indicated. Star deposit scheme, variable deposit scheme and unit deposit scheme were known to only few of the employees.
Awareness on New Loan Schemes

The last 10 years of liberalisation in the financial sector also saw the emergence of retail banking. Retail banking is growing at a very fast rate with all the banks concentrating on the retail consumer. More products and services have been designed and launched with the retail borrower in mind. Employees also need to know the salient features of these products so as to effectively convince the customer and his mind share. Apart from circulars, SBT has been sending out check lists with makes easy reading and explains the distinguishing features of the product. The responses regarding awareness of new loans are given in Table 6.8.
235
Internal Marketing in Banks Table: 6.8 Awareness on New Loan Schemes
I-+
I
Prasanthi Education Loan 45 56
I Festival Loan I Home Decor

1 Consumer Loan
Total
33
35
5
I 1
I 1 01.121
07.88
07.43
Source: Survey Data
444
100.00 -
Most of the employees had knowledge of a good number of loan products. Housing loan was the predominant one with 20.50 percent of responses. Prasanthi, the scheme for pensioners was indicated by 15.77 percent of the responses. Suvidha was also popular with the employees with 12.61 percent of responses. Except for the newly introduced Home Decor scheme, which was available only to the housing loan beneficiaries, the number of responses were reasonable indicating that the employees do have a fair knowledge of the new loan products.
A graphical
representation of the employees' awareness on new loan schemes is presented in Fig. 6.3.
236
25 --I
Figure 6.3 Awareness on New Loan Schemes: Responses of Employees
New Loan Schemes

237 Internal Marketing in Banks
Awareness on New Ancillary Sewices Introduced
SBT has introduced various ancillary services since 1993 like ATMs, telebanking, online banking, e-mail facility, family welfare scheme for non-resident Indians and star customer card for valuable constituents. Bank has also established correspondent relationship with many banks and exchange companies abroad. Some of the branches have also been rendering value added services like payment of utilities. The responses regarding the awareness on ancillary services are provided in Table 6.9.
Tablc6.9 Awareness on New Ancillary Sewices Introduced
Product/Sewice
pibanking NRI Family Welfare Scheme Payment of Utility Online Banking Star Customer Card
1
-
Respondents
tt
1 ::::: 1
02.94 02.21 01.47
Percent
E mail facility
Correspondent banking Total Source: Survey Data
I I
136
100.00
ATM is fresh in the minds of the employees as SBT is going ahead with installations of ATMS in many important centres and have plans to network with State Bank of India ATMs. SBT was the first bank to establish an ATM in Kerala. The highest response of 40.44 therefore was indicated by the employees regarding ATMS. Telebanking, online banking and NRI family welfare scheme were also known to a good number of employees as responses indicate. A graphical representation on the awareness on new ancillary services is given in Fig. 6.4.
238
Internal - Marketing in Banks
45-
Figure 6 . 4 Awareness on New Ancillary Services Provided: Responses of Employees
239
Internal Marketing in Banks Pricing Strategy Since the onset of liberalisation, banks have freedom to quote interest rates on deposits as well as loans. This is being used by most of the banks including SBT as a strategy for improving its market share. The responses of employees about the existing pricing strategy in SBT are given in Table 6.10.
Table: 6 . 10
Opinion on Existence of Pricing Strategy
Yes No Total
Source: Survey Data
20 1
100.0
Majority of the employees (56.30%) opined that SBT does have a pricing strategy that is meant to attract customers. However, 43.70 percent felt that SBT do not have a pricing strategy. Branch Network Because most bank services are delivered to the customer through personal selling by a bank employee, the location of the bank offices at convenient places easily accessible to the customer is an important consideration for marketers of banking services. The responses regarding effectiveness of network are given in
240
Internal Marketing in Banks Table: 6.11 Effectiveness of network Opinion Excellent Very Good Good Satisfactory Unsatisfactory Total
Source: Survey Data
19.9 11.4
201
100.0
Most of the employees opined that the branch network is effective as 68.70 percent of the employees rated the network to be excellent, very good or good. However, 19.90 percent of the employees rated the branch network only as satisfactory and 11.4 percent of employees rated it as unsatisfactory indicating that the effectiveness of branch network. there is still scope for improv~ng, Advertising Advertising is a promotional strategy employed to create awareness about the products and services. SBT has been releasing very effective advertisements
through print and electronic media on an ongoing basis. The response to advertising
as a promotional strategy is given in Table 6.12.
24 1
-Table 6.12
Promotional Strategies - Advertising
F ; Y t Total Source: Survqy Data 20 1 100.0
1 ;; 1
A good number of bank employees (5 1.70%) stated that advertising of SBT to be good and the remaining 48.30 percentage stated it to be average or poor. There is enough scope for improving the quality and range of advertising. Customer Meets Banks conduct regular customer meets to understand the needs of customers and to know what the customers feel about the bank. It provides an occasion for relationship building. The responses regarding the effectiveness of customer meets are given in Table 6.13. Table 6.13 Promotional Strategies - Customer Meets Respondents
Average
( poor
L o t a l
27 201
13.41 100.0
Source: Survey Data
242
The effectiveness of custonler meets as a promotional tool was appreciated by 27.90 percent of the employees. More than half (58.70%) of the employees rated the effectiveness of customer meets as average and 13.40 percentage of the respondents had poor opinion about the customer meets.
Family Meets
These are similar to customer meets but the customer is invited to the meet along with the other members of the family. This enables building up of an emotional bondage be~ween the entire members of the family and the bank. Opinion
of employees regarding the utility of family meets is given in Table 6.14.

Table 6.14 Promotional Strategies - Family Meets
Good Average
-
Poor Total 20 1
44.3 100.0
Source: Surve,v Data

Only 15.90 percent of the employees indicated that family meets are good as a promotional strategy. Others felt it as either average or poor indicating that family meets do not have the desired level of benefits in improving the market share of business.
243
NRI Meets
Non Resident Indian deposits constitute a substantial portion of the deposits of most of the south Indian based commercial banks. Since liberalisation India's foreign exchange position has been improving and in the recent years appreciation of Rupee vis-a-vis Dollar hits also been commendable. Table 6.15 gives an idea about the Net Inflows under various Non-Resident Deposit Schemes.
Table 6.15 Net Inflows under various Non-Resident Deposit Schemes Items
(I) Dollar Accounts:

FCNR (B)
/ (11) Rupee Accounts: (a + b)
2134
2284
t l L 2 z E L p + ; + + ]
Total (I+II) Source: Data compiled by Department of Economic Analysis and Policy (DEAP), RBI
It therefore becomes important that this segment's needs are identified and met. Various promotional strategies could be employed to get a larger share of this market. One of the promotional strategies would be to organize NRI meets during vacations or festival seasons when many of them come on leave. Such meetings offer opportunities for two-way communication with the customer and his family members with the bank employees in an informal setting. This not only helps in understanding the needs of NRI customers but also in building the relationship
244
stronger. The opinlon of employees on the effectiveness of NRI meets as a promotional tool is given in 'Table 6.16.
Table 6.16 Promotional Strategies - NRI Meets
Poor Total 201

--
100.0
More than half of the employees interviewed - 5 1.2 per cent- felt that NRI meets have only average value when it is used as promotional strategy, though 42.8 percent felt that it is a good protnotional strategy
Customer Contact Campaigns

Customer contact campaigns involve the coordinated use of several promotional techniques by the bank to communicate an important message to the customers. This requires developing the sales promotional materials, training the bank's staff, contacting the customers and communicating with them and finally measuring them. As a promotional strategy banks have been conducting customer contact campaigns in the form of deposit mobilization month, customer contact month,
245
Internal Marketing in Banks special loan melas for specific products like home loans, vehicle loans etc. The responses of employees on customer contact campaigns are given in Table 6.17.
Promotional Strategies - Customer Contact Campaigns
[;;;:TIpi 1
Table 6.17
Average Poor Total
Source. Surve,y Daia
201
100.0
Only 35.8 percent of the staff interviewed felt that the usage of customer contact campaign is a good tool for promotional activities of the bank.
Social Circles
Developing and maintaining a favourable relationship with the community have always been important in banking. Banks have traditionally supported their local communities by helping support local non profit groups, the arts, socially deprived groups and local charities through more powerhl and innovative programs that are responsive to changes in society and its values. Now more than ever, because of the increasing competition, banks need to be more visible in their commitments to their local c:ommunities in order to create a favourable image of the bank, and beneficial community impact. Social circles established in bank branches
Internal Marketing in Banks take up such community related activities. The responses regarding social circles as a promotional strategy is given in Table 6.18.
Table 6.18 Promotional Strategies - Social Circles
E;E--~ ;; p i
--
20 1
Total
Source: Survcy Data
100.0
Many of the staff interviewed felt that social circles do have a promotional role in bank marketing. 53.7 percent rate social circles to be a good promotional strategy.
Problems in Bank Marketing

Employees were also asked about the problems faced in marketing of bank's products and services. The details are tabulated in Table 6.19.
247 Internal Marketing in Banks Table: 6.19 Problems faced by Banks for Marketing Products/Services
Problem 30
I Lack of Knowledge 1 I Lack of effort on the pail. of bank staff /

I Lack of suitable schemes
Low interest rates on deposits Increasing competition High cost on loans
1 10
41
1 1
1
3.81 13.98 5.21
1 1
1
I Lack of Infrastructure facilities

1 Lack of ootential
Shortage of staff for marketing Lack of latest technology Total Source: Survey D a ~ a
1
1
78
1
1
9.91 3.94
1
1
31
787
100.00
Increasing competition was stated to be the problem of utmost importance. To meet this competition the:y do not seem to have adequate effort on the part of the employees. Low interest rates was also a major problem faced by the bankers with the increasing competition, other financial service providers in marketing deposit products. Other problems worth considering for marketers of banking services are shortage of staff for marketing, lack of latest technology and lack of infrastructure facilities. A graphical representation of the problems faced by banks for marketing products is given is Figure 6.5.
248
Figure 6.5 Problems faced by Banks for Marketing Products and Services: Responses of Employees
25 7
249 Internal Marketing in Banks Measurement of Internal Marketing

A total of ten variables were delineated for measuring internal marketing
viz., 1) Product awareness 2) Service Orientation, 3) Communication, 4) Technology, 5) Complaint Resolution, 6) 0rgan:isational Integration, 7) Image, 8)
Future Orientation, 9) Ethics, and 10) Atmosphere and Facilities. Figure 6.6 shows
the relationship between the variables in the Internal Marketing Questionnaire. Figure Fig. 6.6 :InternalMarketing Questionnaire
Resolution
Integration
Orientation
orientation
and Facilities
Environment
I
Internal Marketing Effectiveness
Source: Adaptedfrom M. R. Weisbord, Organisarional Diagnosis: Six places to look for trouble with or without a theory, Group & Organisation Studies, 1976, 1
(4), 430-447.
250
1) Product awareness: The prime pan of the marketing mix in the banking industry
is the personal selling of the product by the employees. Personal selling in essence is face to face presentation of bank's products to prospective users and this requires an in-depth knowledge of the products and its distinguishing features.
2) Service Orientation: In any service success occurs only if there is a match
between the consumer's point of view and the supplier's point of view. It is therefore imperative that employees possess skills of customer service and delight.
3) Communication: Banks need to communicate effectively with their customers to

offer what the customers need. Employees need to be friendly and knowledgeable with a proactive bent of mind understand the needs of customers and respond immediately.
4) Technology: Banks are typically enterprise wide organization that relies on

interdependent networks and this feature makes the relationship between technology and banking fundamentally symbiotic. In the banking sector technology can reduce costs, increase volumes, facilitate customized products,
and help in relationship marketing. 5) Complaint Resolution: Service providers should be able to make appropriate
responses quickly when customers express their dissatisfaction or offer suggestions for improvement.
6 ) Organizational Integration: Employees are proud to work for a bank that offers
good service and backs up its claims by maintaining high standards through an
25 1
Internal Marketing in Banks efficient internal structure and through genuine concern for customers and employees
7) Image: Most of the banks offer similar services at similar charges and therefore a
favourable image can make customer familiar with a particular aspect of the organization. Image building should attempt to distinguish the bank from its competitors along real dimensions in order to be the preferred bank to certain segments of the market. E,mployees should enable a bank to communicate an image that is not only both secure and prudenl: but also progressive and modem.
8) Future Orientation: Bank marketers of future needs to be professionals who are

both driving and anticipating change, understanding the complexities of the new business environment and forces shaping it.
9) Ethics: The service provider can make any number of promises. But when
promises are made and then broken customers are disappointed because their expectations have not been met. Organizations should not communicate unrealistic service promises and should have a clear set of values that they cherish and hold dear.
10) Atmosphere and Facilities: In today's envirorunent, providing a humane context

to the work place, creating and environment for teamwork, managing aspirations and empowering employees at all levels would be the critical differentiator for business.
Internal Marketing Questionnaire
Two statements were culled out for each factor and for each statement respondents were asked to indicate the extent of agreement on a five point scale ranging from 'Strongly Agree' to 'Strongly Disagree'. The respondents were then classified into Satisfied, Neither satisfied nor unsatisfied and Unsatisfied, based on their responses to each statement as is shown in the Table 6.20.
252
--
'Table: 6.20 Measurement of Internal Marketing
unsatisfied Product Awareness Component I Service Orientation Component 1 Comoonent 2 Communication Component 1 Component 2 Technology Component I Comoonent 2 Complaint Resolution Component 1
Satisfied
Image
l k -
Component 2 Future Orientation Component 2 Ethics
Atmosphere and Facilities Component 2
Source: Survey Data Figures in parenthesis shows percentage to total
253
Note: I.
Component I : Information on products and services Compor~ent 2: Understanding the needs of customers Component 1: Honouring of commitment to customers Component 2: Strengthening relationship with customers Component 1: Responding immediately to customers Component 2: Commitment of Top Management
11.
111.
IV.
Component 1: Technology for customer delight Component 2: Adaptation for technological changes
v.
VI.
Colnponent 1: Solving complaints satisfactorily Component 2: Complaints as opportunities Component 1: Knowledge on organization's services Component 2: Proud to be part of organization Component I : Endeavour to improve the image Component 2: Organization as premier bank Component 1: Belief in organization's future Component 2: Commitments to promises made Co~nponent 1: Organizational dynamics for growth Component 2: Cotnpatibility of values Component 1: Challenging work atmosphere Component 2: Adequate facilities at the job
VII. VIII.
IX.
X.
In order to further study these variables, the responses to each statement were scored. The maximum score of five was given to 'Strongly Agree' responses and the minimum score of one to 'Strongly Disagree'. Factor analysis, a statistical approach was then used to analyse interrelationship among these variables in terms of their common underlying factors
Factor Analysis
Factor analysis is a multivariate statistical method which is used for the analysis of matrices of correlation coefficients of a large number of variables. This
254
method is quite general and can be applied to correlation between variables of any type. It concerns with interdependencies and discovery of structure among
interdependencies. The Princ:ipal Axes Method and Varimax Rotation (Fruchter,
1967) have been used for con~paring the factor structures of four groups
Factor analysis has been done to analyse the various components as indicated above. Factor analysis showed that there are patterns of similarity between certain factor indicating strong relationship among four major factors that contribute to the effectiveness of internal marketing. The factors are customer orientation,
organisational commitment, complaint resolution and product awareness.

Conclusion
The four main challenges faced by the banking sector are the emergence of the buyers market, integration of technology, increased competition and high growth in customer expectation. These challenges have necessitated the training and retraining of banking personnel in honing skills in attitudinal traits of agility and creating positive attitude in improving quality of customer service. The new opportunities have created new pressures in the banking sector and banks are now focusing on recruitments of specialised personnel for effective product marketing for sustainable growth. The banking personnel should be harbingers of change in transforming the traditional function of "lending money" to that of "selling money".
255
REFERENCES 1. Hostage, G . M. (1975). Business Review. 99.

'Quality control in Service Business'.
Harvard
2. Piercy, N and Morgan, N.A. (1991). Internal Marketing: the missing half of the
Marketing Programme. Long Range Panning, 24 (2), 83-93.
3. Payne, Adrian (1995).
The Essence of Services marketing.
New Delhi:
Prentice hall of India Pvt.Ltd., pp165-166.
4. Gummerson, E (1991). Marketing orientation revisited: The crucial role of the

part-time marketer. European Journal of Marketing, 25(2), 60-74.
5. Sasser, Earl W., and Stephen, Arbeit P. (1976). 'Selling Jobs in the Services
Sector'. Business Horizon, 64.
6.
Fruchter, B. (1967). Introduction to Factor Analysis. Princeton: D.Van Nostrand Co., pp. 79-99.

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CHAPTER VI

INTERNAL MARmTING IN BANKS

Internal Marketing in Banks

Not attended Total

Source: Survey Data

got training. The details are given in Table 6.2.

Institution where Training attended ~nstitution SBT Training Centre

Source: Survey Data

Internal Marketing in Banks

'Table: 6.3 Opinion on Marketing Strategy

Total Source: Survey Data

Developing New YroductslSewices

In the liberalised set up with increasing competition private banks are

Internal Marketing in Banks

Table: 6.4 Opinion on Developing New ProductslSewices

Range of New Products/Sewices

Internal Marketing in Banks

Credit Cards Personalised Service Tele Banking

Internet Banking Insurance P d u Mutual Fund

Utility Payments Low Interest Loans Anywhere Banking Total

04.36 00.56 527

Internal Marketing in Banks

Internal Marketing in Banks

Internal Marketing in Banks

Elements of Promotional Strategy No. of Responses

16.85 09.83 15.45 03.94 100.00

Internal Marketin in Banks

Figure 6.1 Elements of Promotional Strategy: Responses of Employees

Internal Marketing in Banks

Nawa Swarna Varsha

I Unit Deposit Scheme

Internal Marketing in Banks

Figure 6.2 Awareness on New Deposit Schemes: Responses of Employees

Internal Marketing in Banks

Awareness on New Loan Schemes

Internal Marketing in Banks Table: 6.8 Awareness on New Loan Schemes

Prasanthi Education Loan 45 56

I Festival Loan I Home Decor

Source: Survey Data

Internal Marketing in Banks

Figure 6.3 Awareness on New Loan Schemes: Responses of Employees

New Loan Schemes

237 Internal Marketing in Banks

Awareness on New Ancillary Sewices Introduced

Correspondent banking Total Source: Survey Data

Internal - Marketing in Banks

Figure 6 . 4 Awareness on New Ancillary Services Provided: Responses of Employees

Opinion on Existence of Pricing Strategy

Internal Marketing in Banks

Promotional Strategies - Advertising

F ; Y t Total Source: Survqy Data 20 1 100.0

Source: Survey Data

Internal Marketing in Banks

of employees regarding the utility of family meets is given in Table 6.14.

Source: Surve,v Data

(I) Dollar Accounts:

/ (11) Rupee Accounts: (a + b)

Internal Marketing in Banks

Table 6.16 Promotional Strategies - NRI Meets

Poor Total 201

Customer Contact Campaigns

Promotional Strategies - Customer Contact Campaigns