Chapter 1: Introduction

1.1 Introduction:

According to Chao and Pei (2008), nowadays, a lot of organizations for example financial
institutions, insurance businesses, and another service businesses understand the
significance of CRM and its capability to assist their business obtain new clients, also
remain previous clients and increase their lifetime importance. So according to this
viewpoint, good connection with clients will need a powerful management among
information technology IT and selling departments to offer a enduring retention of
profitable consumers. This research work describes the job of CRM in banking sector
with special reference to Bank of Baroda and require for CRM to raise client importance
through utilizing a few systematic techniques in customer relationship management
systems. In the view of Hill, Brierley and MacDougall (2003), the concept of Customer
Relationship Management is that it assists organizations employ skill and human
resources increase insight into the manner of consumers and the importance of those
consumers. If the CRM system of any organization performs according to their
anticipations, that organization is able to: offer superior client facility, make call centers
extra capable, cross sell goods further successfully, support sales members close
transactions quickly, make simpler marketing procedures, find out new consumers, and
raise consumer profits. It does not taken place by easily purchasing application and using
it. For Customer Relationship Management to be really successful, a business should
primary choose what type of client data it is searching for and it should select what it
means to use that data. Such as, several banks hold track of customer’s life stages so as to
marketplace suitable financing goods such as mortgages otherwise IRAs to them at the
correct moment to suit their requirements. CRM is a wide method for generating,
sustaining and developing consumer connections is the trade plan that targets to consider,
hope, control and personalize the demands of a company’s recent and prospective
consumers (Osuagwu and Linus, 2004). The process of making the suitable plan is the
formation of joint value for every player engaged in the trade procedure. It is regarding
making a long term competitive benefit through being the better at consideration,
interacting, and providing and expanding previous consumer connections as well as
generating and retaining new clients. Therefore the idea of customer life time is providing
mode to the structure of consumer life cycle concentrating on the growth of goods and
facilities that predicts the upcoming time requirement of the current consumers and
generating new facilities that expands current customer connections beyond dealings
(Aldlaigan and Buttle, 2005).

1.2 Research Title:

The complete research work is focusing towards the customer relationship management
in banking sector. in this view the research is focus towards the customer relationship
management in Bank of Baroda. The suitable title of the research is “Critical analysis of
CRM model applied to Bank of Baroda, discussing the benefits achieved”.

1.3 Importance of the research:

Financial institution simply a business it allows lends and deposits cash to the needy
individuals, other than banking is the procedure related associated with the actions of
financial institutions. These types of actions also comprises the issuance of credit cards
and cheque, monthly reports to the customer, appropriate declaration of new financing
facilities, supporting the consumers to advantage mobile and online banking et cetera.
Massive expansion of CRM is forecasted in the banking business for the upcoming time
periods (Baumann, Burton and Elliott, 2005). Financial institutions are targeting to raise
consumer prosperity through remaining the every consumer. The job of customer
relationship management in banking business and require for it is to raise consumer
importance through employing a few systematic approaches in customer relationship
management requests. It is a better trade plan strategy to discover the financial
institution’s very efficient clients and make them satisfy for builds the strong future of
their business, and dedicates time and concentration to developing account connections
with those consumers by personalized selling process, pricing, optional decision taking 9
Bejou, Wray and Ingram, 1996). In banking business region, management of relationship
with customers might be described as gathering the good information regarding consumer
and then perform according to this information to satisfy them, make sure that the
consumer for example how to please the client, ready to understand the client, Always
make a better communication with the client, make sure that the client always receives
what he desires from their bank and consider when customers are not pleased and could
leave the service giver and take action according to the situation (Berry, 1983). Customer
relationship management in banking sector completely diverse from other business
regions, as banking sector simply associated to financial facilities, which requires
generating the faith between the persons. Setting up consumer care help throughout on
and off certified hours, creation appropriate data regarding interest payments, maturity
date of depositing the money, providing debit and credit cum ATM card, generating
alertness about online and electronic-banking, applying mobile application et cetera are
needed to hold permanent connection with consumers (Lang and Colgate, 2003). The
current time customer relationship management comprises expanding consumer base.
The financial institution has to reimburse sufficient concentration to raise consumer base
through every time good quality service, it is probable if the recital is at pleasing stage,
the current customers can suggested furthers to hold the banking relationship with the
financial institution he is working. Therefore inquiring orientation from the current
consumers is able to expand their customer base. If the stand rose, the effectiveness is
moreover enlarge. Thus the financial institution has to execute many pioneering
Customer Relationship Management to grasp and keep clients (Liljander and Roos,
2002). This is the huge change from financial institution based processes to consumer
based actions are chosen. The private sector financial institutions used great new plans to
magnetize more consumers and to remain current consumers. Customer relationship
management in banking industry is also in evolutionary level, it is the correct moment for
getting new concept from consumers to improve its facility. The employ of customer
relationship management in banking business has increased significance with the forceful
plans for consumer attainment and preservation being used through the bank in current’s
competitive environment. This has resultant in the alternative of several customer
relationship management approaches through these financial institutions (Roberts, Varki
and Brodie, 2003).
1.4 Research Objective:

This dissertation gives an insight into these main factors explaining how they are
important and also touches upon the security aspects of CRM. In addition, a primary data
collection will be done in the form of a questionnaire from various people to get the
bank’s consumers’ perspective on CRM.

 To review the existing literature on relationship marketing.

 To explore the adoption and use of CRM in BOB
 To explore the activities involved in the implementation of relationship
marketing in BOB and to gain a better understanding of the approaches taken
by bank to build, develop and maintain long term customer relationships.
 To examine the customers perception towards relationship marketing in BOB
 To determine the influence of relationship marketing activities on BOB’s
performance.

1.5 Rational behind the research:

CRM is related with magnetizing, sustaining and developing connection with their
customer in huge service businesses. Customer relationship management goes forward
the business process and allows the seller to project the consumer’s emotions and
purchasing purposes therefore that the consumer is able to be offered with goods and
facilities before the beginnings of demands. Consumer are the strong point of every type
of trade processes, sustaining good connection with them always carry good outcome
(Sharp and Sharp, 1997). Therefore the idea of customer life cycle is providing right
mode to the system of product life cycle concentrating on the growth of goods and
facilities that predict the upcoming requirement of the current consumers and generating
new facilities that expanded good connection with clients beyond business dealings. The
largest administration confronts in the novel time age of internationalization for a trade is
to give and sustain better connections with their clients. In the previous time, makers did
not take their consumers for decided as this moment consumers were not requiring nor
had several option resources of supply otherwise providers. While he was an unreceptive
purchaser, the creator stated conditions and had small client promise. Other than currently
there is a fundamental change (Sheth and Parvatiyar, 2000). The shifting trade
atmosphere is categorized through financial globalization, raising rivalry, high customer
demand, and progressive and challenging client, extra importance on service excellence
and importance of buy (Sharp and Sharp, 1997).

1.6 Structure of the research report:

A structured research report consists of sequential alignment of each step of the research.
It gives the clarity to the reader to understand the overall research work step by step. In
this way this research report had been divided into six chapters. First chapter of the report
includes the detailed introduction about the research including the aims and objectives,
brief background of the research topic, rational and importance of the research work and
suitable title of the research. Second chapter provides the detailed view of different
authors related to the customer relationship management. Third chapter directed the
research methodology used for conducting this research work including the research
approach, sources for data collection and research limitations. Fourth chapter provides
the discussion on data collected as the analysis part of the research with the help of
tables, graphs and charts. Fifth chapter includes the research findings. Sixth and the final
chapter provide the conclusion and recommendation based upon the findings of the
research.

1.7 Summary:

Conventionally, some persons altered their financial institutions if not severe issues
happened. In the previous time there was, to sure scope, a dedicated, frequently came in
to connection among a client and his/her financial institution. The main viewpoint,
tradition and business of banks were based in this supposition and replicated in their
selling plans, which were goods and dealing-based, reactionary, concentrated on separate
rather than nonstop actions. Currently, banks are able to make longer dependence on
these loyal connections otherwise set upped selling methods to magnetize and keep
clients. Because marketplaces stop working into assorted sectors, further exactly aimed
selling methods is needed, which makes a conversation with little sets of consumers and
finding personal requirements? Furthermore, before the Internet rebellion, clients mostly
chosen their financial institutions depended on how suitable the position of financial
institution's divisions was to their homes otherwise work places. The occurrence of new
techniques in the trade process of financial institution, for example ATMs and Internet
banking, currently consumers is able to generously select every financial institution for
their dealings. Therefore, the consumer base of financial institutions has raised, and so
has the options of consumers for choosing the financial institutions. This consition joined
with the forces of competitive and active marketplaces has donated to the developed of
customer relationship management in the banking sector.