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Submitted By: Submitted To:
Mohd.Tariq Harish Handa


Banks are the most significant players in the Indian financial market.
They are the biggest purveyors of credit, and they also attract most of the
savings from the population. Dominated by public sector, the banking
industry has so far acted as an efficient partner in the growth and the
development of the country. Driven by the socialist ideologies and the
welfare state concept, public sector banks have long been the supporters
of agriculture and other priority sectors. They act as crucial channels of
the government in its efforts to ensure equitable economic development.

The Indian banking can be broadly categorized into nationalized
(government owned), private banks and specialized banking institutions.
The Reserve Bank of India acts a centralized body monitoring any
discrepancies and shortcoming in the system. Since the nationalization
of banks in 1969, the public sector banks or the nationalized banks have
acquired a place of prominence and has since then seen tremendous
progress. The need to become highly customer focused has forced the
slow-moving public sector banks to adopt a fast track approach. The
unleashing of products and services through the net has galvanized
players at all levels of the banking and financial institutions market grid
to look anew at their existing portfolio offering. Conservative banking
practices allowed Indian banks to be insulated partially from the Asian
currency crisis. Indian banks are now quoting al higher valuation when
compared to banks in other Asian countries (viz. Hong Kong, Singapore,
Philippines etc.) that have major problems linked to huge Non Performing
Assets (NPAs) and payment defaults. Co-operative banks are nimble
footed in approach and armed with efficient branch networks focus
primarily on the ‘high revenue’ niche retail segments.
The Indian banking has finally worked up to the competitive
dynamics of the ‘new’ Indian market and is addressing the relevant
issues to take on the multifarious challenges of globalization. Banks that
employ IT solutions are perceived to be ‘futuristic’ and proactive players
capable of meeting the multifarious requirements of the large customer’s
base. Private Banks have been fast on the uptake and are reorienting
their strategies using the internet as a medium The Internet has
emerged as the new and challenging frontier of marketing with the
conventional physical world tenets being just as applicable like in any
other marketing medium.

The Indian banking has come from a long way from being a sleepy
business institution to a highly proactive and dynamic entity. This
transformation has been largely brought about by the large dose of
liberalization and economic reforms that allowed banks to explore new
business opportunities rather than generating revenues from
conventional streams (i.e. borrowing and lending). The banking in India
is highly fragmented with 30 banking units contributing to almost 50% of
deposits and 60% of advances. Indian nationalized banks (banks owned
by the government) continue to be the major lenders in the economy
due to their sheer size and penetrative networks which assures them
high deposit mobilization. The Indian banking can be broadly
categorized into nationalized, private banks and specialized banking

The Reserve Bank of India acts as a centralized body monitoring
any discrepancies and shortcoming in the system. It is the foremost
monitoring body in the Indian financial sector. The nationalized banks
(i.e. government-owned banks) continue to dominate the Indian banking
arena. Industry estimates indicate that out of 274 commercial banks
operating in India, 223 banks are in the public sector and 51 are in the
private sector. The private sector bank grid also includes 24 foreign
banks that have started their operations here.

The liberalize policy of Government of India permitted entry to
private sector in the banking, the industry has witnessed the entry of nine
new generation private banks. The major differentiating parameter
that distinguishes these banks from all the other banks in the
Indian banking is the level of service that is offered to the
customer. Their focus has always centered around the customer
– understanding his needs, preempting him and consequently
delighting him with various configurations of benefits and a wide
portfolio of products and services. These banks have generally been
established by promoters of repute or by ‘high value’ domestic financial

The popularity of these banks can be gauged by the fact that in a
short span of time, these banks have gained considerable customer
confidence and consequently have shown impressive growth rates.
Today, the private banks corner almost four per cent share of the total
share of deposits. Most of the banks in this category are concentrated in
the high-growth urban areas in metros (that account for approximately
70% of the total banking business). With efficiency being the major
focus, these banks have leveraged on their strengths and competencies
viz. Management, operational efficiency and flexibility, superior product
positioning and higher employee productivity skills.

The private banks with their focused business and service portfolio
have a reputation of being niche players in the industry. A strategy that
has allowed these banks to concentrate on few reliable high net worth
companies and individuals rather than cater to the mass market. These
well-chalked out integrates strategy plans have allowed most of these
banks to deliver superlative levels of personalized services. With the
Reserve Bank of India allowing these banks to operate 70% of their
businesses in urban areas, this statutory requirement has translated into
lower deposit mobilization costs and higher margins relative to public
sector banks.


Technology plays a very important role in bank’s internal control
mechanisms as well as services offered by them. It has in fact given new
dimensions to the banks as well as services that they cater to and the
banks are enthusiastically adopting new technological innovations for
devising new products and services.

The latest developments in terms of technology in computer and
telecommunication have 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. Automatic
voice recorders now answer simple queries, currency accounting
machines makes the job easier and self-service counters are now
encouraged. Credit card facility has encouraged an era of cashless
society. Today MasterCard and Visa card are the two most popular cards
used world over. The banks have now started issuing smartcards or debit
cards to be used for making payments. These are also called as electronic
purse. Some of the banks have also started home banking through
telecommunication facilities and computer technology by using terminals
installed at customers home and they can make the balance inquiry, get
the statement of accounts, give instructions for fund transfers, etc.
Through ECS we can receive the dividends and interest directly to our
account avoiding the delay or chance of loosing the post.

Today banks are also using SMS and Internet as major tool of
promotions and giving great utility to its customers. For example SMS
functions through simple text messages sent from your mobile. The
messages are then recognized by the bank to provide you with the
required information.

All these technological changes have forced the bankers to adopt
customer-based approach instead of product-based approach.


Banking is as old as authentic history and the modern commercial
banking are traceable to ancient times. In India, banking has existed in
one form or the other from time to time. The present era in banking may
be taken to have commenced with establishment of bank of Bengal in
1809 under the government charter and with government participation in
share capital. Allahabad bank was started in the year 1865 and Punjab
national bank in 1895, and thus, others followed

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. Also the Union budget affects the banking sector to boost
the economy by giving certain concessions or facilities. If in the Budget
savings are encouraged, then more deposits will be attracted towards the
banks and in turn they can lend more money to the agricultural sector and
industrial sector, therefore, booming the economy. If the FDI limits are
relaxed, then more FDI are brought in India through banking channels.


Government and RBI policies affect the banking sector. Sometimes
looking into the political advantage of a particular party, the Government
declares some measures to their benefits like waiver of short-term
agricultural loans, to attract the farmer’s votes. By doing so the profits of
the bank get affected. Various banks in the cooperative sector are open
and run by the politicians. They exploit these banks for their benefits.
Sometimes the government appoints various chairmen of the banks.

Various policies are framed by the RBI looking at the present
situation of the country for better control over the banks.


Before nationalization of the banks, their control was in the hands of
the private parties and only big business houses and the effluent sections
of the society were getting benefits of banking in India. In 1969
government nationalized 14 banks. To adopt the social development in
the banking sector it was necessary for speedy economic progress,
consistent with social justice, in democratic political system, which is free
from domination of law, and in which opportunities are open to all.
Accordingly, keeping in mind both the national and social objectives,
bankers were given direction to help economically weaker section of the
society and also provide need-based finance to all the sectors of the
economy with flexible and liberal attitude. Now the banks provide various
types of loans to farmers, working women, professionals, and traders.
They 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 because these customers do not
believe in running about and waiting in queues for getting their work
done. The bankers also have to provide these customers with special
provisions and at times with benefits like food and parties. But the banks
do not mind incurring these costs because of the kind of business these
clients bring for the bank.
Banks have changed the culture of human life in India and have
made life much easier for the people.

It is very important for any bank to identify the 7 P’s of services so
was understands their customers better and provide them with best of
service. The 7 P’s are:



The product mix of a company includes all different product lines a
company offers to its customers. The product line of a bank might easily
include more than 100 different services. In today’s competitive scenario
it has become very necessary for a bank to provide it’s customers with a
wide variety of services and the best technology in order to attract them.
Here is an example of some of the products offered by UTI Bank to its

UTI Bank's Savings Account is just the right product for everyone, salaried,
employees or businessmen, high net worth individuals and NRI's. The
unmatched package of UTI Bank Savings Bank account given below brings
the benefits of better, efficient and hassle free banking.

• ATM Network

A Savings Bank Account with UTI Bank entitles you to a free ATM card,
which enables you to access your account anytime and at any ATM centre
across the country. You can withdraw and deposit money and cheques
with your ATM card. Unlike most other ATMs, a UTI Bank ATM allows you
to withdraw up to Rs. 20,000 a day. In addition, cash can be withdrawn
from any of the ATMs against your MasterCard (domestic/international).

• 7-Day Banking

At select branches spread over the country, you can bank on all the 7
days of the week (except for public holidays), over extended working

• Telebanking

Telebanking service provides you instant access to your account. It offers
you a wide range of services over the phone such as account information,
Balance Enquiry, Transaction Details, Statement of Account, Status of
your Cheque , etc.

• iConnect-Internet Banking
This is the concept of "the Bank on your desk-top". You can look-up the
status of your account, query and undertake a range of financial
transactions, simply by clicking the mouse. Now don't you think you have
a great opportunity to see yourself laughing your way to the bank?


UTI Bank has joined hands with Citibank, to give rise to a new kind of card
power - unique and unmatched benefits and international utility at the
most competitive rates. The UTI Bank Citibank International Silver Card,
the MasterCard and 'Unique' Card offers quite a few benefits.


UTI Bank Citibank Card combines dual conveniences of high purchase
power and flexible payment facility. Purchase of high-value items is now
convenient and when it comes to payback time, your bill can be paid in
installments, depending on your financial liquidity at a given moment. The
Revolving Credit Facility lets you pay as little as 5% of your total
outstanding every month. Giving you the power to buy now and pay later
in parts!


One can use your UTI Bank Citibank Card to pay for your personal
expenses at places where credit cards are not accepted yet. Like paying
for investments, telephone and electricity bills, school fees and much
more. Just call CitiPhone and the draft you need will be delivered to you!

Credit Limit Increase

You can call CitiPhone and ask for a Credit Limit Increase in the event that
you have to make a large purchase on your card urgently. It's especially
handy for paying off vehicle repairs, telephone bills and electricity bills.
And for anniversaries, weddings, birthdays, or business trips or when a
holiday goes beyond budget

24-Hour ATMs

One can withdraw emergency cash up to 60% of your credit limit from 24-
Hour ATMs in Ahmedabad, Bangalore, Calcutta, Chennai, Delhi,
Hyderabad, Mumbai and Pune. While traveling overseas you can draw
cash from MasterCard ATMs spread across the globe. The same is
applicable for any Citibank branch. Also the cash you withdraw is insured
against theft for a period of 12 hours after withdrawal. A never before
facility is brought to you with the UTI Bank Citibank Card at a transaction
fee of 2.5% or Rs.50 whichever is higher. All cash advances also carry a
service charge from the date of the transaction. The cash withdrawal limit
for the first year is Rs. 5,000.

Photo card

One may choose to have your photograph and signature digitally
imprinted on the front of your Card in color. So that you get the extra
recognition and security you expect as a UTI Bank Citibank card member

Concession on Personal Remittances

Do you often need to remit funds to other cities using facilities such as
Drafts/Telegraphic Transfers, etc.? Here's a benefit you would most
appreciate. A 25% rebate on standard commission is offered on personal
remittances at UTI Bank branches.

Overdraft facility

UTI Bank Citibank credit card provides you with an overdraft facility to the
extent of 75% of the value of your holdings of Demat Shares and Units!
Moreover, you get a waiver of 0.5% on interest rate chargeable under the
scheme. All you need to avail yourself of these benefits is a Demat A/c
with UTI Bank.
Free ATM Card

The UTI Bank Citibank Credit Card offers you a free ATM Card, which can
be used at over 250 UTI Bank ATM centers all over India. All you have to
do is open a saving bank/current Account with UTI Bank.

Other features

UTI Bank Citibank Card has the widest possible reach - welcomed by
1,10,000 Merchant Partners across India and Nepal and yet another 160
lakh Merchant Establishments worldwide. The card can be used both for
major occasions, and also for everyday purchases like groceries,
cosmetics, and petrol and auto accessories. It can also be used to buy
high-value items like consumer durables (refrigerators, washing machines,
microwave ovens, etc.). And even paying customs duty and hospital bills
becomes convenient with the Card.
Width of the product mix is the number of product lines a company
is offering. The product width could be a narrow one or a wide one
depending from bank to bank. A wide mix encourages more sales since
the banks are able to diversify and provide more to their customers and
they also appeal to a larger target market.

Depth of the product mix is the number of product items in each
product line. Banks with more schemes and services have more depths
than those offering only a few.

Here is table giving an example of Width and Depth in the Product Mix:
Similarly, different banks plan out their product portfolios and based
on that, the depth and width of their product mix can be determined.

In today’s scenario, where there is cutthroat competition and new
foreign banks entering the Indian markets, it has became more or less like
a law to have very wide product lines with more and more number of
products in each line.

Core Benefit:
It is the main or core reason why the customer will buy the service
of the bank. More like the basic purpose or necessity.

Basic Product:
The core benefit is converted into a basic product. That is the
service can used by the customer in order to fulfill his/her needs.

Expected Product:
It refers to the set of attributes and conditions expected by the
customers when they purchase the service.

Augmented Product:
It is the additional feature that the banks provide which exceeds the
customer’s expectations.

Potential Product:
Innovations and product differential is the bases of a Potential
Product. If the banks alter its services according to the requirements of
the individual customers it reaches this level.

Core Basic Expected Augmented Potential
Product Product Product Product Product
The basic Safety of Timely service Goods waiting Mobile and
necessity to use deposits Long banking rooms internet
banking Loanable funds hours Extensive ATM Banking
services in etc. Low interest network New Schemes
order to handle rates Promotional tailored for
finance more Discounts specific
efficiently customers

Thus it can be seen how a particular product passes through
different levels. In today’s competitive scenario most banks try offering
services at the Augmented and Potential level.

The price mix in the banking sector is nothing but the interest rates
charged by the different banks. In today’s competitive scenario where
customer is the king, the banks have to charge them interest at a rate in
accordance with the RBI directives. Banks also compete in terms of annual
fees for services like credit cards, DMAT etc. Another important aspect of
the bank’s pricing policy today is the interest charged on the Home Loans
and Car Loans. With India’s economy progressing, there are more and
more buyers seeking these loans but at a very competitive interest rate.

Let’s understand this with an example. A particular buyer
approaches a bank for a car loan for a period of 3 years. He is charged Rs.
20,000 as interest. However, if a sale representative of another bank
comes to know of this deal, he will try to attract the customer by giving
him a better deal i.e. a loan at a lower rate on interest. In this way, it is
the customer that ultimately benefits.

Here is an example of some of the prices charged by ICICI bank for
their services

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 NIL NIL
Cheques book
Issue of duplicate statement Rs. 25 per page Rs. 25 per page
Account closure Rs.100 Rs.100

This example evinces some of the charges that the customer has to
pay for the services provided by the bank.

The pricing factor is very important because of the kind of
competition that is prevailing today in the Indian market. However it is
very important to understand that in the banking sector, the main pricing
policy is concerned with the interest rate charged. This interest rate is
however regulated by the RESERVE BANK OF INDIA and THE INDIAN
BANKING ASSOCAITION. Any one particular bank or a group of banks does
not regulate it. The interest rate charged cannot be higher than that

Thus, inspite of the constraints in the pricing policy due to the RBI
directives there are mainly three types of pricing methods adopted by
banks. They are:
Value pricing:

Banks having unique or different products or schemes mainly do
this type of pricing. They usually charge a combination of high and low
prices depending on the customer loyalty as well as the products. This
type of pricing strategy is usually coupled with promotion programmes.

Going Rate pricing:
The most commonly used pricing technique is the going rate pricing.
In going rate pricing, the bank bases its price largely depending on the
competitor’s prices. The banks however have to stay within the RBI
directives and compete. The banks may charge higher or lower than their
competitors. After 1991 when the foreign banks entered the Indian market
this method of pricing has gained increasing importance.

Mark up pricing:
This is a pricing technique wherein the cost of the service is
determined and a small margin is added to it and then the final price is
offered to the customers. This type of pricing is the not very popular since
in the banking sector it is not very easy to arrive at the cost of the service.
Thus most banks use a combination of mark – up pricing and going rate

This model shows a pricing strategy, which should be adopted in
order to ensure maximum satisfaction to both the bank as well as the

The price should be set in such a manner that the customer is
assured that he is not being cheated or overcharged by the bank and at
the same time the bank is able to reap maximum profits. Such a pricing
stand helps the bank get maximum sales as well as profits since the
customer feels that by entering such a transaction he is winning.


Place mix is the location analysis for banks branches. There are
number a factors affecting the determination of the location of the branch
of bank. It is very necessary a bank to situated at a location where most of
its target population is located.

Some of the important factors affecting the location analysis of a
bank are:
1. The trade area
2. Population characteristics
3. Commercial structure
4. Industrial structure
5. Banking structure
6. Proximity to other convenient outlets
7. Real estate rates
8. Proximity to public transportation
9. Drawing time
10. Location of competition
11. Visibility
12. Access
It is not necessary that all the above conditions have to be satisfied while
selecting the location but it should be tried to satisfy as many of them as

1. The Trade Area:
The trade area is a very important factor determining the place
where a bank branch should be set up. For e.g. a particular location
maybe a huge trading place for textiles, diamonds or for that case even
the stock market. Such locations are ideal for setting up of bank branches.

2. Population Characteristics:
The demography of a place is a very important factor. This includes:
 The income level of the population
 The average age
 The average male female population
 The caste, religion, culture and customs
 The average spending and saving habit of the people.
These factors are very important for a bank as the help them decide
the kind of business the branch will get.
3. Commercial Structure:
The commercial structure refers to the level of commerce i.e.
business activities taking place at a particular location. The higher the
level of business activities taking place in a particular location the more
preferable it is for setting up a bank branch.

4. Industrial Structure:
This is nothing but a combination of the trade area analysis and the
commercial structure. However the industrial structure focuses more on
the kind of industries operating in a particular location. For example, an
area like SEEPZ is marked with a lot of electronic manufacturing units.
Thus the industrial stricture determines the kind of financial transactions
that could take place in a particular location.

5. Banking Structure:
The Banking structure refers to the existence of other banks in the
area. Whether there is already an efficient network of other bank
branches operating at that particular area. Thus the overall infrastructure
needed for the working of a bank.

6. Proximity of other convenient outlets:
This refers to the other branches of the same bank as well other
commercial, entertainment and industrial outlets.

7. Real Estate Rates:
This is mainly dealing with the cost factor involved in opening up a
bank branch at a particular location. The real estate rate is a very strong
factor influencing the location decision for a bank branch.
8. Proximity to public transportation:
The location should be proximate to public transportation facilities.
This means it should have bus stops close by as well as it should be
proximate to railway stations so as to make it convenient for the common

9. Drawing Time:
Drawing time refers to the time period during which a customer can
draw money from the banks. It should be convenient to the customer and
somewhat flexible to accommodate the customer’s needs. No bank has
more than a certain amount with them and in case a customer wants to
withdraw an amount more than that available with the bank, the bank
needs to draw that amount from other banks. Hence, a location must be
such that it facilitates minimum drawing time.

10. Location of Competition:
The existence of other banks also means competition. If the level of
competition is very high in a particular location, it is necessary that a bank
does a lot of market research before opening a branch so as to estimate
the kind of business it would get.

10. Visibility:
The location of a branch should be such that it is visible and easily
noticed by the customers as well other people.

10. Access:
The bank branch should be very easily accessible to the customers.
If this is not the case, the customer might switch to some other bank,
which is more convenient to him and very easily accessible. The location
should be such that it is very convenient for the customer to reach.
Promotion Mix

Promotion is nothing but making the customer more and more
aware of the services and benefits provided by the bank. The banks today
can use a lot of new technology to communicate to their customers. Two
of the fastest growing modern tools of communicating with the customers

1. Internet Banking
2. Mobile Banking
This can be better explained with the example of ICICI bank.

SMS services

SMS functions through simple text messages sent from your cellular
phone. These messages are recognized by ICICI bank to provide you with
the required information.

For example, when you enter ‘IBAL’ your cellular phone screen will
display the current balance in your primary account. Thus with the help of
SMS a wide range of query based transactions can be performed without
even making a call.

ICICI was the first organization in India to provide Wireless
Application Protocol (WAP) based services. Mobile commerce using WAP
technology, allows secure online access of the web using mobile devices.
With WAP one can directly access the ICICI WAP server, check one’s
account details and use other value added services.

Thus different methods are used by different banks to promoter its

A bank may have very attractive schemes and services to offer to
their customers but they are of no use if they are not communicated
properly to the customers. Promotion is o inform and remind the
individuals and persuade them to accept, recommend or use of product,
service or idea. However there some very important points that is to be
considered before the promotion strategy is made. These points are:

Finalizing the Budget
Before the bank decides the kind of promotion that should be done,
it very important to finalize the budget for it. The formulation of a sound
budget is essential to remove the financial constraints in the process. The
budget is determined on the basis of volume of business of the bank. In
addition to this the intensity of competition also plays a decisive role.

Selecting a suitable vehicle

Another very important task is to select a suitable vehicle for driving
the message. There are a number of devices to advertise such as
broadcast media, telecast media and the print media. The selecting of the
mode of advertising is strongly influenced by the kind of budget decided.
Usually for promoting banks the most effective and economical form of
advertising has been the print media.

Making possible creativity

Making possible creativity is nothing but the kind of slogans, punch
lines etc. that are supporting the message. They should be very creative
but yet simple to be understood by the common man. It should appeal to
the customers. It should be distinct from that of the competitors and
should be successful in informing and sensing the customers.

Testing the Effectiveness

It should be borne in mind that the advertisement is first tested for
its effectiveness. This should be done with the help of various techniques
like testing effectiveness on a sample group. This helps determine the
success of the advertisement and in case of any problem the
advertisement can be altered and remedied.

Instrumentality of Branch Managers

At a micro level, it is the responsibility of the branch managers to
promote and drive the message to the people in the local area. They
should organize small programs in order to attract people and crate
awareness in the local area about the new schemes of the bank.
Different Ways of Promotion
Public Relations:

In today’s competitive scenario developing strong public relations is
very important for any bank to be successful. Most banks today have a
separate Public Relations department. However primarily it is considered
as a responsibility of the various bank managers to develop a steady and
strong relationship with their present customers as well as potential
customers. This can be done by a constant follow up, small programmes

Personal Selling:

Personal selling is found to be one of the most effective and popular
forms of promoting bank business. The main reason for this is that
banking is a service in which trust plays a very important role. In personal
selling, a bank representative goes to the customers and explains the
scheme to the customers. Also he gives the customers any kind
consultation he might need. He provides the customers all the information
sought by him. The representative tries to persuade the customers to go
for the scheme provided by the bank by telling him all the benefits. Here
are some of the important features of personal selling
 It is a direct relation between the buyers and the seller
 It is oral presentation in conversation
 It is personal and social behavior
 It is found to be more effective in service oriented organizations
 It is based on the professional excellence or expertise of an individual

Sales Promotion:

Sales promotions are basically giving the customers some additional
benefits, maybe at times just some small gifts, in order to promote the
schemes. The more innovative the sales promotions the more positive are
the results. Some of the most popular sales promotions techniques are
gifts, contests, fairs and shows, discounts and commission, entertainment
and traveling plans for bankers, additional allowance, low interest
financing etc. It is very important that the sales promotions benefits are
designed in such a manner that they are better than those of the

Word – of – mouth Promotion:

This form of promotions is not only very effective in banking
services but in any kind of service. However it is more important in
banking for the only reason that this is a service where trust plays a very
important role. If a particular bank’s services are recommended by
friends, relatives, or other well wishers the person is more influenced and
inclined towards that bank. It is very important to note that the internal
employees of the bank play a very important role in word – of – mouth
promotion technique. This is because they can start the process by
recommending the bank to their friends and relatives and after that it is
like a chain, which spreads like a wild fire.


In recent times telemarketing has gained increasing importance as
an effective tool for promotion. The telemarketing is a process of making
use of sophisticated communication network for promoting the banks.
This includes promoting through television, telephone, and radio.
Nowadays, cell phones are used extensively for the same. This is the most
popular form of promotion. Banks today have started using ‘SMS’ and
many other services supported by cell phones to provide benefits to their
customers and thus have tried to increase their sales. In today’s
competitive and modern scenario it very important that banks makes use
of telemarketing techniques very efficiently to have desirable results.


The use of Internet as a promotional tool is increasing. More and
more banks are using Internet to promote their services. The online
banking has made it even easier for the customers to avail the bank’s
services. No longer do people have to go to their bank branches for small
petty matters like checking their balance etc. All this can be done with the
help of a few clicks.

Thus, these were the numerous ways in which a bank can promote
its services and create more awareness amongst the people.

People are the employees that are the service providers. In a
banking sector, the service provider plays a very important and
determinant role in rendering the customers a satisfactory and a good
service. It is extremely essential that the service provider understand
what his customers expect from him. In the banking sector, the customer
needs to be guided in a lot of matters, which is possible only with the help
of the service provider.

The position in the eyes of the customer will be perceived by
appearance, attitude and behavior of the customer contact employees.
Not only does the customer contact employee influence the customer’s
perception but also the customer base of the organization does so.

Process Mix
The process mix constitutes the overall procedure involved in using
the services offered by the bank. It is very necessary that the process is
very customer friendly. In other words a process should be such that the
customer is easily able to understand and easy to follow. Today if
particular banks formalities are long and the procedure very complicated
the overall process fails and the customer may not be inclined towards
using that banks services.

Let’s take for example the process for application for a car loan.
Now this mainly involves 3 things.

1. Producing of proper documents
2. Filling up of application form
3. Paying for the initial down payment.

Here the process may fail in the following cases:

1. If the customer is asked to produce a number of forms out of which
some may not be necessary at all. Thus it is very necessary that the
customer be asked for the minimum but most necessary document
and not the other unnecessary documents.

2. In case of application form, the application form must be in a
language best understood by the customers and it should not be
very lengthy one or demanding a lot of unnecessary information.

3. Finally the payment of initial amount. The customer should be given
options as to how he would like to pay by cheques or by credit card.
Once again the amount should be very competitive not very high
above the regular rates prevailing in the markets.

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

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. It is very necessary that the place be designed in
such a manner so as to ensure maximum convenience to the customer
and cause no confusion to him.

Let us see an example as to how banks try to make little changes so
as to make the service better for their customers.

The Hong Kong Shanghai Banking Corporation (HSBC) has decided
in introducing a common uniform for all the employees in all its branches
all over India. The plan is possibly in line with the aggressive retail
banking adopted by HSBC. A common uniform its nothing like a
revolutionary change but however this little change makes it very easy for
the customer to identify with his service provider and makes the entire
process very easy for him. The more the bank does to make the service
easier and better the more satisfied will be the customer.

Thus, these are the 7 P’s of services. Each of them plays a very
important and a pivotal role in determining the quality of the service
provided to the customer.

A service blueprint is a picture or a map that accurately portrays the
service system so that different people involved in providing it can
understand and deal with it objectively regardless of their roles or their
individual points of view. Blueprints are particularly useful at the
designing and redesigning stages of service development. A service
blueprint visually displays the service by simultaneously depicting the
process of service delivery, the points of customer contact, the roles of
customers and employees, and the visible elements of the service. It
provides a way to break the service down into its logical components and
to depict the steps or tasks in the process, the means by which the tasks
are executed and the evidence of the service as the customer experiences

Standard Beginning

Regardless of our mapping objective (to describe a new process or
an existing process), type of map selected (flow chart, risk management,
cross-functional, time elapsed), and state (as-is, should be, could be)
selected, all process maps will have the same common beginning steps.
1. Begin by defining the objective and the
process boundaries. Our objective in this case
is to document the existing savings-deposit
process for the purpose of training new
cashiers. The process boundaries will begin
with the customer’s bringing a deposit into the
bank (the input) and end with the last step in
the cashier’s handling of the transaction:
issuing a receipt to the customer (the output).

2. List the basic steps that produce the output,
using as brief a description as possible, such as
a verb followed by a noun. These may include:
complete deposit slip, greet customer, count
cash, inspect deposit slip, post deposit, post
passbook, authenticate passbook posting,
store cash, store deposit slip, thank customer.
Arrange these processes in the sequence in
which they occur; this will help you construct
your map logically and easily.

3. Record the map title and reference number at
the top and centre of a landscape-formatted
sheet. In the sample below, use “B1” as the
reference number, where “B” refers to a series
of savings-related process maps and “1” is the
first map in the series.

4. Record your name and the date prepared
below the map title line, at the left hand

Constructing the Map: What Symbols Do I Use?
5. The starting point for this process is the
customer. Use the “Start” symbol and place
this symbol in the upper left hand corner of
your paper.

6. Symbols must be connected by arrows to show flow, which may
represent either the sequence of the processes or the movement
(transportation) of the inputs from process to process. Automatically
enter an arrow after posting a process, inspection, document/input, or
decision symbol to your map. By convention, movement is from left to
right, and from top to bottom; both directions are shown in the sample
below. Alternating the vertical and horizontal flows can help you show
activities that occur almost simultaneously, and can also save space on
your sheet. For example, a down arrow is used to connect the Start
Process (customer) with the first two inputs (passbook and cash). You
could have just as well used a horizontal arrow and placed the two inputs
to the right of the Start Process symbol. The choice is yours. Just
remember, our objective is to present as clear and understandable a map
as possible.

7. The customer’s deposit has three component inputs: the cash, the
deposit slip (the bank’s voucher), and the passbook (the customer’s
receipt). These three inputs have different processes performed on them,
and are stored in different places at the end of the process, so they need
to be identified by distinct symbols. Note that the passbook and deposit
slip use the “Document” symbol, while the “Input” symbol is used to
represent the cash. For the sake of clarity, insert the document name into
the centre of the symbol. From this point forward assume that these
documents flow with the arrows (transportation symbols) until otherwise
indicated. At this point in the process, you have only two inputs: the
passbook and the cash. Place these next to each other, with one arrow to
the right, indicating that they flow together.
8. Your option for this step is to use either the “Process” or “Manual
Operation” symbol. Because the customer must hand-write the document
(rather than it being computer-generated, for example), the better option
is to select the “Manual Operation” symbol.

9. At this point, the cashier processes the deposit. The first step is to
ensure that the customer has submitted a valid deposit slip containing all
required information (which is listed in the process description). Since this
activity serves as a control point as well as a process point—the process
cannot continue if the amount is not recorded, for example—you can
select either a process or an inspection symbol to represent the action.
Because this step is an important control for the further processing of the
deposit, the better option is to select the Inspection symbol.

10. There is not sufficient space left on the sheet to post the next step,
even though there is space below the existing line of symbols. Since
arrows move from left to right and top to bottom, you cannot, by
convention, draw a big arrow from the right side of the paper across to the
left margin in order to continue the flow in the space remaining on the
paper. This means you continue on another sheet of paper. Select the “On
Map” connector symbol from the list. This symbol is used twice: first
where you discontinue, or break, the process, and second, where you
resume it. (If you have two breaks on a map, you will have four On Map
symbols.) To let the reader know which connectors go together (form a
pair), insert a letter or number, assigned sequentially, in each symbol. The
first pair, for example, might be labeled “A,” while the second pair would
be labeled “B.” The reader knows which one of the pair represents the
break in the flow, because there are no more symbols below or to the
right of the connector symbol. The reader knows which one of the pair
represents the resumption of the flow, because symbols will appear below
or to the right of the connector symbol.
11. In this step, the cashier counted the cash and found it to be either
correct or incorrect. This results in two possible courses of action that
must be shown in the process. Use the decision symbol. Insert a word or
two inside the symbol to reflect what condition is being decided; in this
case, you are answering the question: “Amount correct?” The question
has to be phrased so that it can be answered either “Yes” or “No.” Both
courses of action are mapped. The decision symbol, therefore, has two
arrows attached to it, one representing the “Yes” course of action, and the
other, the “No” course of action.
a. NO: This course of action represents a
rework loop. The customer has to either
make the correction to the deposit slip
and initial the change, or make
up/receive the difference in the amount
of cash deposited so that it will equal the
amount shown on the deposit slip. After
the correction process, the arrow points
back to the decision diamond because
the cashier now decides again whether
the actual cash counted agrees with the
amount reflected on the deposit slip. If it
does, then the process resumes the flow
from the “Yes” arrow leaving the
decision diamond.

b. YES: the cashier has answered “Yes” to
the question, “Does the amount of cash
received agree with the amount shown
on the deposit slip?” The process
continues to the next step.

12. Up to this point, the three inputs—the passbook, deposit slip, and
cash—have been flowing together. It is now time to separate their flow
and to show storage of the cash. The deposit slip and the passbook will
continue to flow together; redraw and label the document symbols for
each of these inputs next to each other, followed by one arrow. (To
emphasize that these documents flow together, you can overlap the
documents as shown in the sample.) Redraw and label the cash symbol,
followed by an arrow. Use the Storage symbol, and place it after the arrow
leading from the Cash symbol to show that the cash has been dropped
from the flow. If it adds clarity and not clutter, you can label the storage
symbol (in this case, “Till”). Note that the act of the cashier placing the
money in the till does not need a process box; it is sufficiently clear to
show through the use of the cash symbol, arrows, and storage symbol
that the cash is going into the till. This illustrates how the use of symbols
can eliminate unnecessary and redundant process boxes.

13. The details of the inspection performed by the back office
supervisor can be described in the second tier of the map. Alternatively,
you can shadow the inspection box (refer to the “Tier Your Maps” section)
and create a sub process map that describes what the back office
supervisor actually does.

14. This step demonstrates a teaching point discussed above. Which
point is represented here? Hint: Describe what is happening here.

15. The passbook/receipt, posted with the deposit (the output), is
returned to the customer. This is the end of the process. Use the End
Process symbol, (which is the same as the Start symbol) and label it to
show that the Customer is the endpoint. This now completes the first tier
of your Process Map.

16. In the second tier, record the description for each step. This task
serves a dual purpose, because it forces you to proofread your symbols to
make sure that you have complied with the requirements described in the
“Proofread Map” section above. You will also be able to see for yourself
whether your process map makes sense. Alternatively, you can complete
these descriptions as you draw your symbols; you may find, however, that
keeping up with the text while also posting symbols on your map is

17. Lastly, since you have used a second page, carry forward the
Process Map title and number the map pages in the upper right hand
Cashier Process of Savings Deposit-B1 (Ref-1)

Prepared by: Your Name
18 August 2005


Passbook Slip

(Ref-3) A

Customer enters Customer Customer hands Cashier greets Cashier
banking hall bearing completes deposit slip, passbook, customer, then counts cash
passbook and cash. deposit slip. and cash to cashier. checks deposit slip and ticks to
for name, account amount on
number, agreement deposit slip.
of written and
Cashier Process of Savings Deposit-B1

Amount (Ref-6)


Cash Deposit

il Spindle
(Ref-5) l

No: Customer corrects Yes: Cashier Cashier Cashier posts deposit to Cashier Cashier passes
and initials correction on posts transaction places cash customer’s passbook, thanks passbook to
deposit slip or adjusts to bank’s books in till. calculates and posts new customer, customer; thanks
amount of cash tendered. of account. balance, initials passbook placing the customer;
balance, then passes deposit slip customer leaves
passbook and deposit slip. on spindle for banking hall.
end of day
Process Mapping Symbols
This symbol is used to indicate both the
Start/End beginning and the end of your program.

Operation, Identifies an activity or task in the process that
changes an output. Usually the name of the
activity or task is written inside.

Manual Operation. If it is important to indicate
Manual that an operation is manually performed, you
can use this instead of the square Operations
Process symbol.

Document: indicates a physical paper on which
Document information is recorded.

The document symbol, superimposed on itself,
indicates the presence of multiple copies of a
Multi-part document. At left, for example, a document in
triplicate is shown. When a document is shown
in this manner, usually the destination of each
copy is traced.

Input: The materials, equipment, information,
Input people, money, or environmental conditions
that are required to carry out the process.

Identifies a decision or branching point in the
process. Write the decision inside. Label each
path emerging from the Decision Diamond with
the appropriate options, usually “yes” or “no.”
Decision diamonds must post a question.
Questions should be worded as specifically and
objectively as possible, so that everyone will
interpret them in the same way.
Indicates that the flow has been stopped in
Inspection/ order to evaluate the quality of the output or to
Measurement obtain an approval to proceed.

Indicates when something must wait or is
Delay placed in temporary storage.

Indicates movement of the output between

Indicates that an output is in storage. Storage
differs from delay based on the duration of the
Storag wait and the need for some type of
e authorization to retrieve the item.

An On-Map connector indicates that an output
from this process is continued elsewhere on
A the process map. It is used to reduce awkward
or confusing lines across a map. In order to
help the reader follow the path, the same letter
is used in a corresponding connector posted
where the process resumes.

Off-Page connector: This indicates that the flow
H6 continues on another process map. Record the
page index (H) and the connector number (6)
inside the symbol to show where the reader will
pick up the flow. Conversely, on the
continuation map, record the page index (C) for
the previous map, but use the same connector
number (6) so that the reader can follow the
Ref 1&2 Ref 3&4 Ref 5 Ref 6 Ref 7&8 Total
Actual 2 mins 2 mins 1 min 1.5 mins 2 mins 8.5
Time mins
Target 1 min 1.5 mins 0.5 min 1 min 1 min 5
Time mins

Improvement Opportunity = 8.5 mins – 5 mins
= 3.5 mins

Is the
incident N Y N N Y
Partici- Customer Customer, Customer, Custo- Custo-
pants Cashier Cashier mer, mer,
Cashier Cashier
Visible Furnishings, Appearance, Behaviour, Simplicity of process
Evidence of staff of staff
There are four distinctive characteristics of service, which create
challenges and opportunities. They are commonly known as the four I’s

1. Intangibility
2. Inconsistency
3. Inseparability
4. Inventory.

1.) Intangibility
It is that characteristics of a service indicating that it has no
physical attributes that a person may feel, hear, taste before they buy
For example, a person who is new to a bank and wants to open up
an account in the bank cannot feel or taste it and ascertain whether
the bank is good or bad before opening an account. He has to
experience it, feel how the service is, how humbly do people or the
staff members behave with him, is his money invested or put in a safe
account or not. It is only then he would come to know about the
services. This could be done only from the ‘trust’ that he would have
built up, as these things cannot be inspected before the use.
Therefore, most banks now a days, indulge in “tangibilizing the
intangibles” i.e. they provide tangible clues to the prospective
customers like the different awards that they have received for their
superior services, their annual records, etc. this helps the customers in
selecting the banks more easily.
2.) Inconsistency

It refers to variability or heterogeneity. In case of a bank, a new
customer or a rarely going customer may not get the same type of
service as a regular customer may get. This may be the case because
the staff members know the person well as he comes often but they
don’t know that person who does not come in again and again.

Also another point for inconsistency is that there is variability in
the service delivered by different people, that is services delivered
differs from people to people. Like in case of a bank, different staff
members would provide different services. In the bank, a person may
have lot of work and may not attend to a customer .On the other hand,
some other person with the same work may attend him with great
enthusiasm. In order to tackle this inconsistency aspect, adequate
training and motivation must be provided to the employees. This will
result in higher number of customers for the bank, higher profits and
subsequently lower retention rate.

Eg. “PUNJAB NATIONAL BANK” prides itself for providing “crown of
quality for customer who is the king” and is an ISO 9002 certified bank.
Thus, they will have to ensure that their service quality level is always
consistent and up to the mark to meet the tall expectations of their

3.) Inseparability

Inseparability is that characteristics of a service indicating that it
cannot be separated from creator-seller of the product. Many services
are created, delivered and consumed simultaneously through
interaction between customers and service producers. This is a source
of major limitation for the bank. But technology has in a big way
helped the banks to cope with this problem.

Production of services, when it comes to banks can be performed in
the following 3 ways:

(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

Inventory relates to the perishable characteristics of the service
marketing. If a customer starts his day at eight in the morning and
ends it at four, but if bank is open only from 9:00 a.m. to 1:00 p.m. in
the afternoon, then one might not be able to attend it. The demand for
banking services also fluctuates by day and hour. The day before the
holiday, weekend, most Mondays and Saturdays, pension and salary
days are heavier than normal banking hours. So service faces a lot of
problem from inventory as it cannot be stored, saved and then used
RATER Analysis For Indian Overseas Bank
There are many reasons why a customer should be given QUALITY
SERVICES. The most of them are:

1. Industry being so competitive that a customer should be given
the best services as they have many competitors (the company)
and if even a single customer is lost in today’s JLT world then it
very difficult to win back the customer.
2. Most of the customers do not complain as they just opt out and
do get satisfied with better services elsewhere.

When it comes to services, there are 10 quality dimensions. Each of
the dimensions is of utmost importance since human element is
involved and it relates to services.
But Zeithaml, Bitner and Parsuraman have developed a new and
concise model by clubbing some points. This model consists of the
following dimensions:

 Reliability
 Assurance
 Tangibility
 Empathy
 Responsiveness



It is defined as the ability to perform the promised service
dependably and accurately. In its broadest sense, reliability means
that the company delivers on its promises–promises about delivery,
service provision, problem resolution, and pricing. It is also known as
the “No Excuses” service delivery.

Indian Overseas Bank faces stiff competition from many other
banks within its vicinity and some of these banks are foreign banks.
But the existing customers have faith, loyalty and trust in this bank.
The customers are well aware that the bank will provide them back the
best and reliable services. For e.g., no person likes to wait to withdraw
his/her money. In order to correct this problem, Indian Overseas Bank
has ensured that whoever comes in for cash withdrawal will receive
his/her cash within five to ten minutes.

Assurance is defined as employee’s knowledge and courtesy and
the ability of the firm and its employees to inspire trust and
confidence. It includes the ability, knowledge, genuineness, and
honesty to provide the best services to the customer from the frontline
staff. In this dimension the front line staff is more important rather
than the owner.

At Indian Overseas Bank, every customer who comes is treated with
utmost care and any problem that takes place is solved with great
enthusiasm. It 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 even higher as compared to other banks.
Also, it assures the customers that the money they have invested will
be returned to them as and when required with proper interest. It tries
to empower their customer contact people and regularly train them in
skills to build trust and loyalty between employess and the customers.
They have assigned some of their staff members to build relationships
with the customers by getting to know them personally.


Tangibles are defined as the appearances of physical facilities,
equipments, personnel and communication materials. All of these
provide physical representations or images of the service that
customers, particularly new customers, will use to evaluate quality.

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 out the customers. The entire place is done up in bright
colours and thus the customer can immediately feel the warmth and
the radiance of the place.

Empathy is defined as the caring, individualized attention the firm
provides its customers. The essence of empathy is conveying, through
personalized or customized service, the customers are unique and
unique special.

The empathy shown by the employees of the Indian Overseas Bank
is good as they are always polite humble and helpful. There was a case
where once a customer misplaced Rs. 1,00,000 within the premises of
the bank. He panicked but the bank personnel put him at rest and
assured him that they would locate the same for him. Since he was a
regular customer, they knew him very well and took the situation
under control. They quickly located the cash and thus, the customer
was placated. The bank personnel went out of their way to help this
customer and thus understood his predicament. This bank regularly
holds seminars and training workshops so that they can understand
the consumer better and thus serve him better.

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.
The customers, in their feedback form, mentioned this as one of the
most important factor that has prompted them to continue with this

All the five dimensions basically aim at serving the customers to
the best of their ability, giving them quality services and if things are
followed as they are demanded, (i.e., according to the customers
demand) then there would be no problems in facing any type of
people. The successful service organizations set up speeds for service
An organization is supposed to cater to the changing needs of
customers; it is only natural that all customers have their own likes and
dislikes. They have some uniqueness, which throws a big imprint on
their lifestyles. This makes the task of understanding a bit difficult. It
has the context that we go through the problem of market
segmentation in the banking service.

The study of the needs of customers invites a plethora of
problems since in addition to other aspects; the regional
considerations also influence the hierarchy of needs. To be more
specific in the banking services, the banking organizations are
supposed to satisfy different types of customers living in different
segments. The segmentation of market makes the task of bank
professionals easier. If the market segmentation is done in a right
fashion, the task of satisfying the customers is simplified considerably.
The modern marketing theories advocate the formulation of marketing
policies and strategies for each segment, which an organization plans
to solicit.

The marketing segmentation is based in the principle of divide
and rule. If we divide the market into different segments, the size of
market is made small and the process of study is found convenient. We
find market segmentation division and subdivision of a market based
on considerations. The bank professionals have to segment the market
in such a way that the expectations of all potential customers are
studied in a right perspective and the marketing resources are
developed to fulfill the same. The marketing efforts can be made more
proactive if the process and bases of segmentation are right.

It is essential that the bank professionals assign due weightage
to the difference that we find in the market behavior due to
geographical, age, sex, nationality, educational background, income
classes, occupation, social and other considerations. If they overlook or
underestimate key bases while segmenting, the study results can’t be
proactive to the formulation of creative marketing decisions. This
makes it essential that the bank professionals are well aware of the
criteria for market segmentation. The agriculture sector, industrial
sector, services sector, household sector are found important in the
very context. The gender segment is found important no doubt but we
can’t underestimate institutional and professional segments. Since the
banking organizations serve different sectors and segments, the
segmentation should be done carefully.
 Instrumental in exploring opportunities: We find market
segmentation very much effective in exploring the profitable
opportunities. It is well known to us that while segmenting,
the market is divided into different groups and sub-groups
and this simplifies the process of studying and understanding
the customers in a right perspective. If we know about the
rural segment, the opportunities are explored to the rural
areas. If we know about the women segment, the
opportunities are identified in that area. If we know about the
low- income group, the opportunities are identified in that
group. Thus the segmentation helps the bank professionals in
exploring the profitable opportunities.

 Instrumental in designing a sound marketing strategy: We can’t deny
that market segmentation makes it easier to formulate a
sound strategy. Since the banking professionals are aware of
the changing needs and requirements of a segment, the
marketing resources can be developed in tune with the needs
and requirements of a segment. The formulation of a package
is found significant and the bank professionals can do it
successfully on the basis of market segmentation. The
promotional measures can be satisfied in the face of receiving
capacity of a particular segment. The pricing strategy can be
made operational and the sales promotion measures can be
made productive.
 Helpful to the policy planners: In addition, the policy makers also
find segmentation since they are well aware of the emerging
trends in the business environment. They get detailed
information about the changing needs and requirements of a
segment. The planning is an on going process. The banking
professionals transmit necessary information to the policy
planners, which simplifies the process of making a sound

 Enriching the market resources: In addition to other aspects, we
find segmentation instrumental in enriching the marketing
potentials. If we know about the preference, needs,
requirements, attitudes, lifestyles it is found easier for us to
develop the marketing resources accordingly. This in a natural
way makes it convenient to develop marketing resources. The
process of innovation can be activated. The services, the
promotional measures, the pricing tool and the process of
offering can be made more competitive. The development of
world-class marketing resources thus makes it convenient to
influence the impulse of prospects. The bank professionals
find it easier to get the positive results for their productive
marketing efforts.

Segmentation in a right fashion makes the way for profitable
marketing. This helps policy planners in formulating and innovating the
policies and at the same time also simplifies the task of banking
professionals while formulating and innovating the strategic decision.
The following criterion makes the segmentation right.


An important criterion for market segmentation is the economic
system in which we find agricultural sector, industrial sector, services
sector, household sector, and rural sector requiring the weight age
while segmenting.

A). AGRICULTURAL SECTOR: In the agricultural sector, there are four
categories since the needs of all categories can’t be identical.
The mechanization of agriculture, the improved or scientific
system of cultivation, the help of nature, the magnitude of risk, the
availability of infrastructural facilities influence the level of
expectations vis-à-vis the needs and requirements. The banking
organizations are supposed to know and understand the changing
requirements of different categories of farmers.

B). INDUSTRIAL SECTOR: The banking organizations are supposed to
have an in-depth knowledge of the changing needs and requirements
of the industrial sector. The large –sized, small- sized co-operative and
tiny industries use the services of the banks. The expectation of all the
categories can’t be uniform.

The banking organizations are supposed to have an in-depth
knowledge of the changing needs and requirements of the industrial
segment. The emerging tends in competition, the pressure of inflation,
the use of sophisticated technologies, and the business regulations are
some of the important aspects influencing the hierarchy of needs.

C). SERVICES SECTOR: It is an important sector to the economy where
the banking organizations get profitable business. The two categories
of organizations such as profit-making and non- profit making are
found important in the very context.



The banking organizations need to identify the changing needs
and requirements of the services sector with the frequent use of IT and
with the mounting pressure of inflation and competition, we find a
change in the hierarchy of needs.


This also constitutes an important sector where different income
groups have different needs and requirements. In the below figure we
can see the different segments of household sector.

A). HOUSEHOLD SEGMENT: The high income group, middle income
group, subsistence level group and marginal income group have
different hierarchy of needs which influence the level of their

B). GENDER SEGMENT: In the gender segment we find males and
females having different needs and requirements. The banking
organizations are supposed to identify the level of expectations of both
sexes as shown in the below figure.


Sub- Segment
Gender Segment

Working Ladies

Some of the women are housewives and therefore they have
different needs and requirements whereas some of them are working
ladies having different needs and requirements.


In the profession segment, we find different categories of professions
and therefore we find a change in their needs and requirements. As
shown in the figure below:



Intellects Profession Segment
Public/ Private Formal/Informal
White - Collar
Blue – Collar
The technocrats, bureaucrats, corporate executives, intellects,
white-collar and blue collar employees have different needs and
requirements and therefore the banking organizations should know
their expectations.


In this sector we find different categories of organizations. Some
of the organizations are known as charitable organizations, some of
them are cultural/ social organizations, some of them are industrial and
many of them are profit making and many are philanthropic and many
of them are related to trade and commerce. It is natural that the needs
and requirements vis-à-vis the level of expectations cant be identical in
all cases. To satisfy and to increase the market share it is imperative
that the banking organizations are familiar with changing needs and
requirements. The emerging trends in the social transformation
process determine the hierarchy of needs.

Charitable Trusts

Chamber of
Institutional Segment Commerce
Sub- Segment Trade and
Sports Org
Complaint Handling-HDFC Bank

Whatever a service firm may do for customer, even the best
firms are going to find themselves facing complaints from customers
who feel that they are not being treated fairly. In dealing with these
situations, it is important to know how to diffuse them and then turn
them into positive experiences for all involved.

However, when it came to complaint handling, HDFC Bank turned
to the airline industry for inspiration. Impressed by the way an airline
takes care of its customers from the time they enter the airport till
they collect their luggage after landing, the bank maps the customer
flow at its branch. The first change it brought to its branches was the
'May I help you' desk at the reception to guide the customer to the
right counter. Next, it laid down efficiency parameters for each sub-
process carried out at the branch. "We are constantly fine-tuning our
processes to reduce time taken, especially on routine tasks. We
monitor how long it takes for customer transactions as well as
complaints to get processed".

The bank's 'moments of truth' surveys too are modeled after the
airline industry's satisfaction surveys. These are given to customers
just before they exit a branch after a transaction.

HDFC Bank introduced changes for consumer convenience,
starting with the reception area and with good reason. A traditional
branch has always been an infrequent user's nightmare: cryptic boards
are placed on counters leaving one as confused as ever, bank officials
sit behind wire-meshes making it impossible to seek any guidance, and
the long queues are frustrating, all the more so when you realize you
stood in the wrong long line. But HDFC branch models are trying to
address this confusion, as well as the jail-like counters.

HDFC believes that unless they change to create convenience for
that customer, and add to his brand experience, they will fail to
capture the loyalty they're trying so hard to earn. And unless they
achieve this loyalty and increase their share of the customer's wallet
substantially, the majority of their retail customers will continue to be
unprofitable for them.

HDFC bank takes complaint not as a mere complaint but as an
issue. They have got this unique CRM technique where in 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. Within 24 hrs, if the
branch manager does not handle the complaint it goes to the higher
authority. And then again if the same complaint is not handled in 12
hours by the higher authority it goes to the Managing Director. Once if
it reaches the MD, either the branch manager is sacked or necessary
action is taken against him.

Phase I

The reason why the customer decided to open an account with
ABC Bank was their constant boasting of being the best online trading
bank in India. So one day the customer called their customer center to
open an account. The lady was very polite and after talking with her for
some 5 minutes, she told the customer that one of their
representatives will visit her soon. She gave the lady her office address
and asked her to send the person to her office. The next day the
customer gathered all the necessary documents to open an account. It
took exactly a week for their representative to turn up and on her
inquiring about the delay, he gave her a silly reason, like he was busy
with many more clients and so could not come on the promised date.
She felt that the employees attitude towards the customers depend
upon their mood on that particular day.

Phase II

Within a month the customer got a letter from the bank saying
that her account has been activated. So the next day she went to her
nearest branch to deposit a cheque. As she entered inside, it was over
crowded with people in each and every corner; most of them were the
employees themselves. In most of the branches that she had visited in
last 5 months, she had got the feeling that the branches were over

Phase III

After going through all this she decided to use their Phone
banking facilities, and it’s did not turn out any better than Central
Railway Inquiry. Every hour you find some different people to answer
your query, and most of the time you are put on HOLD.

Phase IV

They used to claim that their trump card was the ATM. To some
extent it was ok but what the customer noticed is that most of the
ATMs are located in a very isolated place and its down during evening

The Finale
Here is something that made the customer to finally say
GOODBYE to ABC. Initially they told her that their share trading service
is free, so she did most of her trading through ABC direct. The service
was not of much help. Just a week from then, she got a mail asking her
to pay for using share-trading service. Again she got in touch with the
concerned person and informed them about the mail and also that she
was no more interested in continuing her account in ABC. Then they
informed her that this mail is not for current year it’s the advance
payment for the coming year. In the end she had to pay them for the
service, which she never utilized. She stopped using ABC Bank and
asked all her colleagues never to have an account with the bank after
her experience.

As can be seen in this case, there is a definite failure in the
service delivery. Now apply the different dimensions of service quality
to this particular case and find out reasons for the failure.


Reliability: The lady assured the customer that the representative would
visit her the next day. Instead he took a week to turn up. Also instead
of apologizing to the customer, he gave the excuse that he was busy
with other clients and so he could not attend to him. In a service
industry the customer is the king and you should make each customer
feel special. As can be seen, the attitude of the employees in the bank
is indifferent. In fact, the customer concludes his review by saying that
the employee’s attitude towards the customer depends on their mood.
This shows tremendous inconsistency in service delivery.

Assurance: Here the staff has failed to live up to its promise. Instead of
coming in a day as promised, the representative came after a week.
He didn’t even apologize for his mistake. As a result the customer was
inconvenienced. The customer was angry that the bank made false
promise just to woo customers. Also she was told that the share
trading service was free. Afterwards she was made to pay for the
service, which she had hardly used.

Tangible: The tangible cues here will be the facilities that they provide,
like the phone banking and the ATM. The customer here describes the
ATM service as okay. She says that it works only sometimes. She
compares their phone banking facility to the central railway enquiry,
where every hour different people come to answer his query and most
of the time he was put on hold.

Empathy: From the case, it seems that they are not understanding
towards the customer grievances. All the branches this customer has
gone to have been very crowded. There was no effort on the part of
the employee’s to help this customer. Also in the case of their phone
banking, they make the customer wait for long periods of time without
answering their query.

Responsiveness: In the case of this customer, the bank and its staff were
not able to respond quickly. When the particular representative was
not able to reach the next day, the bank should have sent another
representative in his place. Also they should not have charged this
customer for using the share trading service, especially since it was a
mistake on their part.
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: In this case the customer decided to use the share
trading service as she was told it was free. She did not find the service
of much help. In the end she had to pay for a service, which she hardly
used. The bank should not have charged the customer for this service
especially since it was a mistake on their part.

Procedural fairness: When the customer entered the bank to deposit a
cheque, she found it overcrowded. There was no effort made by any of
the employees to help this customer. Using the phone banking facility
was also not of much help.

Interaction fairness: After promising the customer that the representative
would come the next day, he came after a week. After committing this
mistake, he made no effort to apologize for it. Instead he gave the
excuse that he was too busy with other clients to attend to him.




Equipment: - Phone banking system of ABC Bank was really bad. Every
hour there was a new person on the phone and most of the time the
customer had to wait as the phone was kept on hold. The customer
had some difficulty using the ATM machines, as they were located on
isolated places, which was very inconvenient for the customer to
access. Secondly, during the evening time they were not working. The
customer had been told about that the share trading facility was free
but later on they charged for the next year’s trading in advance. So,
there was certainly a failure in equipments.

Material: The material aspect of HDFC bank would be its ATM and
Phone Banking services that are described by the customer as a “total
flop” and a waste of time. This shows a complete material failure, as
the services are not up to the extent of the customer’s perception and

Front line staff: The customer has rated employee’s attitude towards
him as ‘depends upon the mood’. In a service industry this is not
acceptable, whatever might be the mood his attitude towards the
customers should be good. The front line staff’s job is to make the
work easier for the customer and not to complicate further which is not
the case in this particular case study.

Supporting Activities: The supporting staff in this case would include the
front desk receptionist who fails to act in haste and inform the same to
the concerned representative. Also, the customer is not informed
about the different service charges, which the back office should have
notified by sending some mails or notifications
Procedure: In the second phase the customer went to the bank to
deposit cheque, she found out that the place was very crowded and
there were no proper signboards for the counters to guide her.

Information: In phase 1, the customer was told that the bank
representative would be coming to his place in a day’s time. But these
representatives came after a week. So there was wrong information
given on the part of the customer. Again in the final phase, the
customer was not given any information about the next year’s share
trading charges and charged her in advance.

Company Profile

ICICI Bank is India's second-largest bank with total assets of over
Rs. 1 trillion and a network of about 540 branches and offices and over
1,000 ATMs. ICICI Bank offers a wide range of banking products and
financial services to corporate and retail customers through a variety
of delivery channels and through its specialized subsidiaries and
affiliates in the areas of investment banking, life and non-life
insurance, venture capital, asset management and information
technology. ICICI Bank's equity shares are listed in India on stock
exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock
Exchange, Mumbai and the National Stock Exchange of India Limited
and its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an
Indian financial institution, and was its wholly owned subsidiary. ICICI's
shareholding in ICICI Bank was reduced to 46% through a public
offering of shares in India in fiscal 1998, an equity offering in the form
of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of
Bank of Madura Limited in an all-stock amalgamation in fiscal 2001,
and secondary market sales by ICICI to institutional investors in fiscal
2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the
World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial
institution for providing medium-term and long-term project financing
to Indian businesses. In the 1990s, ICICI transformed its business from
a development financial institution offering only project finance to a
diversified financial services group offering a wide variety of products
and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. In 1999, ICICI become the first Indian
company and the first bank or financial institution from non-Japan Asia
to be listed on the NYSE.

After consideration of various corporate structuring alternatives
in the context of the emerging competitive scenario in the Indian
banking industry, and the move towards universal banking, the
managements of ICICI and ICICI Bank formed the view that the merger
of ICICI with ICICI Bank would be the optimal strategic alternative for
both entities, and would create the optimal legal structure for the ICICI
group's universal banking strategy. The merger would enhance value
for ICICI shareholders through the merged entity's access to low-cost
deposits, greater opportunities for earning fee-based income and the
ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank
shareholders through a large capital base and scale of operations,
seamless access to ICICI's strong corporate relationships built up over
five decades, entry into new business segments, higher market share
in various business segments, particularly fee-based services, and
access to the vast talent pool of ICICI and its subsidiaries. In October
2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly owned retail finance subsidiaries,
ICICI Personal Financial Services Limited and ICICI Capital Services
Limited, with ICICI Bank. Shareholders of ICICI and ICICI BANK
approved the merger in January 2002, by the High Court of at
Ahmedabad in March 2002, and by the High Court of Judicature at
Bombay and the Reserve Bank of India in April 2002. Consequent to
the merger, the ICICI group's financing and banking operations, both
wholesale and retail, have been integrated in a singularly.


The Customer’s Association with the Bank

The customer became an ICICI bank customer in 1998 when he
became an NRI customer. Things were rather mundane and normal.
Compared to the other big nationalized banks and Citibank, the
customer felt ICICI Bank was the best and got some great feedback
from friends and relatives alike. His initial relationship was excellent.
This continued till 2001. All the facilities were of the highest grade.
Their email follow-ups, request resolution, customer service and
everything they served were of the highest grade. They also baffled
him by calling him overseas with regard to certain transactions and
request. So, he would have given a 5 star rating in 1998. But it did not
continue for long.

What has changed since then?

This bank grew leaps and bounds ever since the IPO in 1998 as
well as the NYSE listing in 2000. The numbers of customers were huge
and the merger with Bank of Madura added to the woes of the service.
As there is a saying “Quality is inversely proportional to Quantity”,
ICICI bank yielded to this very true philosophy. The customer sent a
letter to their NRI center regarding a change of address for his NRI
account. This took considerable amount of time since ICICI misplaced
the letter twice and he head o mail the letter again. This frustrated and
infuriated the customer. Then, they sent a courier to the customer but
at the wrong address. They sent one to the wrong address, and other
one to the right address but with the wrong password for the bank

Snippets from mail correspondence that took place between the
customer and the banking personnel are provided as follows providing
us with an insight:

If doing an address change should take such a long time and if your processes
are so sterner and baseless with a mediocre customer-care follow-up, I definitely need to
reconsider my options. I had opened an account in ICICI though I had quite a few
options for an NRI account, in hope of having an excellent customer service.
I’ll have to rethink if my decision was correct. I have received similar complaints from
my friends as well stating that the ’’Quality of ICICI has gone down with Quantity’’, I
would definitely like to talk to some manager for NRI Services, for the same
matter. Revert to me, if you still have any queries.

The Reply

NRI Cell <> wrote:
Dear Mr. XYZ,
We apologize for the delay in our response.
With reference to your mail we would like to inform
you that we have not received your letter for address change.
Blah Blah Blah………

In this letter instead of requesting the customer for sending the
letter again and apologizing to him, the bank authority says that the
customer hasn’t send any letter at all thus making it a CRITICAL
INCIDENCE for the customer.

Customer’s Final Conclusion of the Bank

All things considered, the ICICI bank is far ahead of many of the
nationalized banks. As an NRI customer and a person used to excellent
banking for quite sometime, I feel that this bank has some mediocre
facilities and service. I will be reevaluating the opinion at a later point. I
am just having an account after many unpleasant services and

Will the customer recommend ICICI Bank to anyone? A big NO at least
for the time being until the bank makes efforts to upgrade their

Case Study Analysis: RATER

R: Reliability
The Case Study shows that the bank was extremely reliable and
trustworthy initially. But after the surge and swelling of customers,
inefficiency has crept in r to the bank. The bank is unreliable only on
the basis of the service that it provides, but when the question of
financial reliability arises the bank seems to be in very sound and

A: Assurance

The customer Mr. XYZ was rest assured about the fact that the
bank was very professional in its approach. But after the bank
conducted the mistakes of sending the password at the wrong address
and then sending the wrong password at the right address made sure
that the bank lost the dignity of being a financial institution that
provides assurance. This had a deep impact on the customer.

T: Tangibility

As we can see when the customer Mr. XYZ wanted to change the
address for his NRI account he had to send 3 mails to the bank out of
which 2 of them were lost by the company, later on the first
confirmation was sent at the wrong address and the second
confirmation was sent at the right address with the wrong password.
The whole process took around 2 months, which is a very long time to
take by any standards.

E: Empathy
The bank was very co-operative and sympathetic towards
customers before the phase of their IPO, the best example of this
would be that the company also called its NRI customers overseas for
certain transactions this showed that the bank was indeed very good
towards its customers, but after the IPO, the bank just lost all loyalty it
earned, it took the bank almost 2 months to change the address and
when the customer Mr. XYZ wrote a mail to the bank for its mediocre
service provided the bank in reply blamed the customer for its mistake.
Thus, ICICI Bank performs miserably on this count too and thus loses
the customer.

R: Responsiveness

The company lost this quality after the IPO. The company took
almost 2 months to change the address and only after sending 3 mails
was the job done, the bank management was also very unresponsive
in apologizing to its customers.