CHAPTER 1

INTRODUCTION

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 THE MARKETING OF BANKING SERVICES

To discuss the nature of marketing of bank services, it is necessary to define the term
“marketing”, ‘bank’ and service. John Orjih (1998:74) defined marketing as a process by
which the customer and the customers wants are clearly identified and understood and then
satisfied by the benefits of the goods or services supplied by the organization. Again, the
chartered institute of marketing defined marketing as the management process responsible for
identifying, anticipating and satisfying consumers requirements profitably. Following the
Oxford dictionary, “bank” is an organization that provides various financial services is the
work that somebody does for an organization.

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Therefore, the marketing of bank services is the activity of presenting, advertising and selling
of bank’s products in the best possible way in order to satisfy consumers’ requirement
profitable. Marketing of banks services is one of the services rendered by financial industry
(bank). Other services include: lending to supplement working capital, fund management,
leasing business, hire purchase services, debt factoring, project financing and advisory
services, debt administration, issuing and marketing of primary shares or securities
trusteeship, portfolio management, unit trust underwriting of securities and so on.

PURPOSE OF MARKETING BANK SERVICES

In order to make the bank’s marketing effort more meaningful and more successful more
emphasis should be placed on the development of new products, further industry
representation. There should be an intensify programmes of market segmentation and
strategic distribution of units and lending teams in response to the changing needs of the
markets as this can provide a mutt tier coverage of major companies and selected market
segments of the national market which is the key to growth in the local banking market.

This situation calls for a prudent, strategic positioning and quality control of the banks loans
and financial services portfolio which includes foremost corporate name as well as the
formulation and implementation of a credit policy.

Another important purpose is the need to take stock of performance and compare it with
existing and prospective competitors. The comparison should include overall market share,
and geographical territory. Other variables such as major customers or client base, quality
speed and presentation of product of services, pricing, marketing, sales, and promotion
activities financial results achieve and so on.

SERVICES RENDERED BY BANKS

Banks render a wide variety of services, which help to keep the economy of a nation moving.
These services vary according to the type of bank, and the type of customer in question. All
the same, the service rendered by the various type of banks are closely related. However,
each type of banks specializes in providing particular type of services. For example, merchant
banks and some of the development banks provide more of whole and corporate banking

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services while commercial banks, people’s banks and community banks concentrate on retail
banking services.

Wholesale banking services refer to those services that banks render to other financial
institutions and conglomerates on a large-scale basis. Retail banking services include those
customers directly, especially their personal customers, on small-scale basis, A times,
services provided by different types of banks differ.

For example, both commercial and  merchant banks accept deposit and give loans; but
merchant banks accept large deposits and give huge amount of loans, while commercial
banks accept small amount of loans to their customers individuals and small firms.

There are also some banking services that are not common to all banks. They are usually the
exclusive right of certain particular type of banks. Example community banks in Nigeria are
prohibited from engaging in sophisticated banking services, while most development banks
do not accept deposits at all,

Sophisticated banking services here may include foreign exchange operations, factoring, hire
purchase, leasing etc.

Banking services can easily be classified as follows;

1.       Deposit, collection and safe-keeping services: These include all       the deposit
accepted by the banks

(a)     Current Account

(b)     Savings Account

(c)      Fixed Deposit Account

(d)     Night Safe Facilities

(e)      Safe Custody.

2.       Advances / Credit Extension Services:

(a)     Overdraft facilities

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(b)     Loan – personal and business

(c)      Project financing

(d)     Credit cards / cheque cards

3.       Corporate finance services

(a)     Leasing

(b)     Bills discounting

(c)      Hire Purchase

4.       Money transfer services:

(a)     Direct debiting

(b)     Cheque Collection and clearing

(c)      Standing orders

(d)     Telegraphic/Mail transfer

(e)      On-line Computer services

(f)      Bankers’ draft / cheques

(g)     Deposit Card

5.       International Financial Services

(1)     Export and import financing

(2)     Documentary letters of credit

(3)     Trawellers, Cheques

(4)     Travel facilities

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(5)     International money transfer

(6)     Payment and collection of bill of ex-

(7)     Change and correspondent banking

6.       Other Financial and Business Advisory:

          (1)     Business advisory services

(2)     Investment advisory services

(3)     Tax advisory services

(4)     Insurance service

(5)     Executor ship and trust services

(6)     Bank guarantee

(7)     Performance bond.

The researcher, because of limited time and resources will discuss on some of the above
services rendered by bank. They include:

CURRENT ACCOUNTS

Current account is the normal banking account, running from day to day, a balance being
shown at the end of any day on which there has been a debit or credit entry. No interest is
normally allowed on current account. This account is maintained by a bank on behalf of a
customer, being operated mainly by use of a cheque book. Nevertheless, the holder of a
current account must be carefully checked before he is issued with a cheque book. However,
two references are normally required and the referees must themselves be considered of
satisfactory status. Statements of the account are usually sent to the customer monthly,
quarterly or half – yearly or more often if the customer so wishes.

SAVING ACCOUNT

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This account is designed to meet the need of small scale savers or customers. Today, it is the
most commonly operated account in West African Banks. This account accommodates or
keeps the money not required for immediate use by the owner and it is put into the bank for
the purpose of gaining interest, which is generally calculated on a monthly basis but credited
to the customer’s account monthly, quarterly or half-yearly or when the account is closed. On
the opening of the account a passbook is issued to the customer in which all the inflows and
outflows of funds are recorded. The minimum balance required to open this account depends
on the individual banks. In some banks it is five hundred naira (N500) while in others it may
be between one thousand naira (N1000) or as high as five thousand naira (N500).

FIXED DEPOSIT ACCOUNT

Fixed or time deposits mean money which the owner does not need for a known period say
six months or three months. This account provides that the amount of such deposit payable on
a certain date, or at the expiration of a specified period of time.

In Orjih (1996) “Banks accept fixed deposits for periods ranging between 3 months to 36
months, while opening such an account there is usually a written contract agreement between
the bank and the customer” that neither the whole nor any part of the deposit may be
withdrawn before the maturity date. The bank pays interest on the deposit but the deposit but
the deposit cannot with draw any part or all the deposits till the expiration of the fixed period.
Where a customer withdraws his deposit prior to the date of maturity, he will forfeit interest
payment and overdraft is not allowed.

 NIGHT SAFE FACILITIES

This service is predominantly offered to customers whose working hours terminate at night
usually after the normal banking hours. A security safe where customers can safeguard his or
her money when bank has closed is given. Banks issue wallets, which may not contain money
or cheques. These are opened the next working day by the customer himself and the money is
deposited in his current account. There is usually no change made for this services which is
rarely common among the operating banks in the country save for those within the
commercial centers like Lagos, Aba and Onitsha metropolis,

SAFE CUSTODY

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This is another services rendered by banks. Majority of the banks, especially those situated in
Lagos metropolis maintain a safe custody where the customers can put his documents or
articles of value into his box or compartment, to which he alone has access. In this case, the
bank becomes a bailee and the customer the bailor since no charge is made for service.

Ojo (1992) noted that with the recent upsurge of new banks into the industry, the hitherto free
services have been subsequently commercialized including the safe custody service. He thus
attributed the development to the earnest competition between banks towards profit
maximization that has brought about this development. Example of banks that operate this
services are Union Bank Plc, Afri Bank Nigeria Plc, etc.

 LEASING

Leasing in its simplest form means the usage of an asset or properly, which belongs to
another person. The term could also be described as a contractual agreement or an
arrangement whereby one party, (the lease) in the return for paying an agreed rent uses a
capital asset belonging to another party (the leassor). Capital assets involved are plant,
machinery, and other assorted business equipment.

In fact, leasing has become universally accepted as a means of rising medium term finance
for the purchase, acquisition, or renting of capital assets for a business organization. There
are principally three kinds of leases. They are finance leases; operating leases and sale and
lease bank. Finance lease is usually of medium term duration. Operating leasing is for
manufactures, suppliers or agents of assorted equipment, while sale and lease back is an
agreement of company or firm to sell its capital equipment or machineries to the finance
company or bank.

LOAN SYNDICATION

Loan syndication is a practice whereby two or more lending institutions agree to provide a
borrower credit for financing a large project. The advantage of this practice is that it allows
the lenders to spread the risks while making it less difficult for huge projects to be funded.
There is usually a lead bank which oversees the disbursement and repayment of the loan.

TELEGRAPHIC MAIL TRANSFER

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In other to avoid delay in making a foreign remittance by bank draft, which goes through the
mail, a telegraph or cable transfer may be obtained from a bank. Thus if a friend runs short of
fund by traveling abroad, reinforcement may be sent through a bank within a few hours by
making use of cable or telegraphic transfer. Bank can also remit fund abroad through mail
transfer. Almost all the commercial and merchant banks in the country has a kind of
telegraphic or cable transfers.

CHEQUE CLEARING

The Central Bank of Nigeria is mandated to facilitate the clearing of cheques and credit
instruments for banks involved in business in Nigeria. The Bank, therefore, sets up clearing
house for this purpose and monitors the cheques clearing system to ensure efficient payments
mechanism within the financing system. From the time the first clearing house was
established in Lagos in 1961, the Bankers clearing system has expanded to cover all the
commercial banks in operation (accepts a few distressed banks). Expenses incurred in
providing clearing facilities are borne by the CBN. The clearing arrangement is quite useful
in promoting banking habit, particularly the use of demand deposits as a means of exchange.

BANK DRAFT

This is one of the commonest and most convenient means of transferring funds through the
banking system. It could also be defined as payment instructions which a bankers makes by
drawing a cheque on its own account in the branch or in another branch of the same bank. It
could also means a payment instruction which a banker makes by drawing a cheque on it own
account with a correspondent bank abroad (or on another account in a foreign country).

A banks customers who wishes to purchase a bank draw would normally draw a cheque on
his current account with the bank. At the back of the cheque the customer indicates the name
and address of the payee the amount and destination. In some banks the purchaser or
applicant to fill a form (usually called bank draft application form) into which these
particulars are entered. Banks also charge commission and for postages on bank drafts, but
the amount of charges are also accommodated on the cheque which the applicant for the bank
draft draws on his banker.

STANDING ORDERS

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These are standing payment instruction normally given by customers to their bankers
requesting them to make regular or periodic payments from their accounts in favour of other
customers’ (in the same bank) or at other banks.

The payments are made at regular period or intervals – say monthly, quarterly, half-yearly or
annually. In some banks it is called periodic payments, but the whole process is still the same.
This facility is very useful for customers who wish to make regular payments to their
insurance companies or to hire purchase or financial Obligation (of any)

In order for a customer to avail himself or herself of this facility, he/she must give the
instruction in writing, and it must be signed in accordance with the customers account
mandate. Normally banks give out specially printed standing order or periodic payment forms
which the customers completes, indicating the payee and regularity of payment land period of
time to be covered.

INVESTMENT SERVICES

          Bankers, by nature of their position in the nation’s economy offer various types of
banking services to their customers.

As a result of the strategic position occupied by the society, he is sometimes called upon to
render advisory services to their customers (and sometimes) non-customer alike. But it had
long been established that it was not part advice. However, times are changing, and bankers
now advertise their “specialist advisory services” whereby they manage or offer investment
advice, or “manage or offer investment” for a fee. However, where the banker gives a
specific investment advice, the bank then incurs liability if any negligence is proved; hence
the banker must exercise maximum care when giving any form investment advice to his
customers and non-customers.

Mobile banking

Mobile banking is a service provided by a bank or other financial institution that allows its

customers to conduct financial transactions remotely using a mobile device such as a smart
phone or tablet. Unlike the related internet banking it uses software, usually called an app,
provided by the financial institution for the purpose. Mobile banking is usually available on a
24-hour basis. Some financial institutions have restrictions on which accounts may be

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accessed through mobile banking, as well as a limit on the amount that can be transacted.
Mobile banking is dependent on the availability of an internet or data connection to the
mobile device.

Transactions through mobile banking depend on the features of the mobile banking app
provided and typically includes obtaining account balances and lists of latest
transactions, electronic bill payments, remote check deposits, P2P payments, and funds
transfers between a customer's or another's accounts. Some apps also enable copies of
statements to be downloaded and sometimes printed at the customer's premises.

From the bank's point of view, mobile banking reduces the cost of handling transactions by
reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit
transactions. Mobile banking does not handle transactions involving cash, and a customer
needs to visit an ATM or bank branch for cash withdrawals or deposits. Many apps now have
a remote deposit option; using the device's camera to digitally transmit cheques to their
financial institution.

Mobile banking differs from mobile payments, which involves the use of a mobile device to
pay for goods or services either at the point of sale or remotely, analogously to the use of a
debit or credit card to effect an EFT POS payment.

A mobile banking conceptual

In one academic model, mobile banking is defined as:

Mobile Banking refers to provision and availment of banking- and financial services with the
help of mobile telecommunication devices.The scope of offered services may include
facilities to conduct bank and stock market transactions, to administer accounts and to access
customised information."

According to this model mobile banking can be said to consist of three inter-related concepts:

 Mobile accounting
 Mobile brokerage
 Mobile financial information services

Most services in the categories designated accounting and brokerage are transaction-based.

The non-transaction-based services of an informational nature are however essential for
conducting transactions - for instance, balance inquiries might be needed before committing a

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money remittance. The accounting and brokerage services are therefore offered invariably in
combination with information services. Information services, on the other hand, may be
offered as an independent module.

Mobile banking may also be used to help in business situations as well as financia

Mobile banking services

1. Mini-statements and checking of account history

2. Alerts on account activity or passing of set thresholds
3. Monitoring of term deposits

4. Access to loan statements

5. Access to card statements

6. Mutual funds / equity statements

7. Insurance policy management

Forex card service

Bank prepaid ForexPlus Cards offer a safe, easy, and cashless way to carry foreign
currency on your travel abroad – ensuring that you are not inconvenienced on foreign
shores. They are safer than cash, easier to use than traveller’s cheques, and cheaper to
use than credit or debit cards. These ForexPlus Cards are available for transactions in
all the popular foreign currencies. They are widely accepted and protect you from
fluctuations in foreign exchange.

Scope of Bank Market

Marketing activities of firms begin with determination of the market that they offer their
services or goods. Firms must find out the features of the market that it anging market
condition. While marketing manager is arranging the variables under firm’s control, she/he

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should also adopt the external variables. We could call the factors that affect banks’ market as
technological developments, legal arrangements and competition.

SCOPE OF STUDY

The various services offered by ICICI and OBC it include:

PRODUCT

 Deposits (Saving account and current account)

 Loans
 Card

SERVICES

 ATM
 Mobile Banking
 Internet Banking
 Payment
 Other Services

The deposit mix of an organization especially the Saving accounts are the backbone of every
bank as an ordinary man is most inclined to invest in it due to its convenience and easy
availability. This project deals with the various customer concerns regarding these and tries to
suggest appropriate suggesting based on conclusions. I hope that this report would be able to
suggest some measures and draw attention of bank towards the area of improvement.

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Services provided by the icici bank and obc bank

Services Offered By m.icicibank.com

Manage Accounts

Get all your account related information on the go with m.icicibank.com

It is your one point access to manage your major account related activities.

You can now:

Check account balance

View last 5 transactions

Check Credit card details

Send Cheque book request

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Stop cheque request

Funds Transfer

Transfer funds to own ICICI Bank account, other ICICI Bank account and non-ICICI Bank
account using NEFT service from anywhere using m.icicibank.com. Fund transfer can be
done, 24 x7, even on holiday, using IMPS service of m.icicibank.com.

Transfer funds from anywhere, on the go using m.icicibank.com.

It is a secure and easy way to transfer funds to own ICICI Bank account, other ICICI Bank
account and non-ICICI Bank account using NEFT mode of fund transfer 

Transfer funds now

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Cardless Cash Withdrawal

Cardless Cash Withdrawal service is a simple and safe mode for you to send cash, 24x7, to
any mobile number in India.

 
All you need to do is login to m.icicibank.com with your Internet Banking user ID and
password and initiate a Cardless Cash Withdrawal transaction. The recipient need not have
any bank account or an ATM card, and can withdraw cash from over 10,000 ICICI Bank
ATMs across India, using the details received through SMS. Know More

 Transfer Funds

Recharge Prepaid Mobile/DTH Connection

Say good bye to running out of talk time or missing your favorite shows by
recharging your prepaid mobile and DTH connection on the go and at your own comfort
with m.icicibank.com. 

Recharge Now

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Pay Utility Bills

With the convenience of ICICI Bank Internet Banking on your mobile, you can pay your bills
anytime, from anywhere. Avoid long queues by registering your billers and pay all your
utility bills - electricity, gas, phone/mobile etc , on time with m.icicibank.com.

You can also schedule your payments and experience hassle free bill payments with
m.icicibank.com

 Pay Bills Now

Credit Card Payments

ICICI Bank Credit Card bring to you convenience coupled with absolute safety and
unparalleled discounts. In addition, we have taken a step further to provide you convenience
on the go. You can now pay your credit card bills by logging into m.icicibank.com.

 Pay Bills Now

ICICI Bank Fixed Deposits/Recurring Deposits

Now you can open an ICICI Bank Fixed Deposit or Recurring Deposit using m.icicibank.com

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Save money using just your mobile phone, from the comfort of your home!

Fixed Deposits

Be it saving for 7 days or a decade, you can trust ICICI Bank Fixed Deposits for attractive
interest rates. Additionally, you have the freedom to make premature withdrawals, get a loan
or overdraft of up to 90% of your FD amount; and choose monthly or quarterly payouts. Just
login to m.icicibank.comand open an fixed deposit on the go!

Open FD Now

ICICI Bank Recurring Deposits

Recurring deposits are a way to manage regular payments smoothly. With a deposit of
minimum Rs. 500 per month, you can begin with a tenure of 6 months and thereafter, in
multiples of 3 months. Just login to m.icicibank.com and start your recurring deposit now!

Services provided by obc bank

OBC SERVICES

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The oriental Bank of Commerce is a public sector bank which offers a range of banking
services to its customers in the form of saving accounts, current accounts, fixed deposit
accounts, loans, credit cards, debit cards etc

Credit cards

The bank has two variants of credit cards which are both co-branded cards offered in
association with the State Bank of India. The cards include:

 Oriental Bank of Commerce – SBI Platinum Card – like other credit cards, this
card offers discounts and reward point earnings on shopping, dining and other
expenses of an individual’s lifestyle.
 Oriental Bank of Commerce – SBI Gold Card-  this is also a credit card offered as
a co-branded card offering discounts and benefits on expenses charged on the card.

Debit cards 

The bank has in its kitty, two forms of debit cards. One is issued in partnership with RuPay
while the other one is affiliated with VISA. The cards are:

 RuPay Debit Card

 VISA Debit Card

These cards are offered to the accountholders of the bank so that they can withdraw cash
from any ATM or make cashless transactions across multiple outlets without any hassles.

Loans

The bank offers a huge variety in its loan category by offering both specialized and general
loans. Let us take a look at the various forms of loans the bank has to offer:

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 Housing Loan – this loan is granted to individuals for the purpose of purchasing or
constructing a house for residential purposes. The loan amount can also be used for
renovation or refurbishing of an existing home.
 Education Loan – loans which are specifically granted to students so that they can
enroll themselves for higher studies.
 Vehicle Loan – if an individual wants to purchase a two-wheeler or a four-wheeler,
he can avail of this loan for funding the same
 Personal Loan – this loan is granted to fund the personal expenses of an individual
 Loan against Property – any residential or commercial property can be mortgaged
with the bank to avail of a loan against the value of the property which can then be put
to any personal or business use.
 Oriental UttamVyapari Scheme – this loan is specifically granted to traders to fund
their business expenses
 Financing Autos and Taxis – individuals looking to purchase an auto, taxi or a small
cargo vehicle for business can avail of this loan
 Loan to Doctors – this loan is given to doctors and medical professionals to fund the
expenses of their profession
 Loan to other Professionals – any other professionals beside doctors can avail of a
loan from the bank under this category
 Finance against Government Securities – if an individual holds government
securities, a loan can be availed against such securities in the form of an overdraft or a
demand loan
 Loan against Gold Ornaments – this is a gold loan which provides funds against the
value of pledged gold ornaments and jewelry.
 Earnest Money Scheme – loan provided to individuals who desire to purchase plots
or flats under the schemes offered by State Housing Boards
 Loan against Deposits – loans can be taken against deposits held by applicants
 Oriental Loan to women – loans specially granted to women to meet their personal
or business expenses
 Oriental Reverse Mortgage Scheme – a loan scheme which provides lifelong
annuity for retirement planning

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Savings Account

Oriental Bank of Commerce currently offers only two types of Savings Account which are:

 Unnati Deposit Scheme–a savings account which can be opened with as little as
Rs.500 and is available also for minors
 Basic Savings Bank Deposit Accounts – an account designed for low income people
where they do not have to maintain any minimum balance to keep the account active.

Term Deposit Accounts

Contrary to the range of saving accounts, the bank has multiple types of fixed deposit
accounts with varied features and varied suitability. The deposit accounts are:

 Oriental Double deposit Scheme – a deposit scheme which doubles the investment
made in the account within a specified period
 Flexi Fixed Deposit Scheme – a fixed deposit account which offers the facility of
liquidity to individuals in the form of a saving account
 Tax Saving Term Deposit – a deposit account where the money is held for a
minimum of 5 years to be eligible for tax exemption under Section 80C
 VarishthaSanman – a term deposit account meant for the senior citizens which
offers them an increased rate of interest
 OBC Aadhar – a recurring deposit scheme where the amount can be deposited
monthly and subsequent deposits can also be increased if required.

NRI Banking

Oriental Bank of Commerce provides NRI banking facilities to both NRIs (non-Resident
Indians) and PIOs Persons of Indian Origin) so that they may transact business in India
without any problem. The list of services rendered includes:

 Forex remittance facility

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  Premium deposit accounts for NRIs
 Facility of four types of accounts which are Non-Resident External Account, Non-
Resident Ordinary Account, Foreign Currency Non-Resident Account and Resident
Foreign Currency Account
 Facility of foreign remittances through a tie-up with Western Union Money Transfer
 Speed credit services to enable remittances from abroad

Internet Banking

The bank offers banking ease by allowing transactions to be carried out online by way of
internet banking. Customers can carry out a range of transactions online which include:

 Fund transfer to any third party

 Fund transfer to own linked account
 Payment of loan instalments
 Creation of online deposit accounts
 Facility of online trading in stocks and shares
 Operating and maintaining a Demat Account
 Payment of electricity or other related bills
 Generating a request for a cheque book
 Payment of taxes

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PROBLEMS FACING MARKETING OF BANK SERVICES

          Banks are generally faced with certain problems in marketing their banking services.
Among these problems are:

1. Low Quality Product (Service): The quality of services provided by the financial

institutions (banks) these days are of very low quality. Some patronize these financial
institutions just because there are no readily available alternatives around. Cash
lodgment, withdrawal, fund transfer, cheque casement etc. take much time tan
necessary lack of prompt services is the talk of the day once the quality of services is
below standard or taste of the customer, he tends to with draw from such institution.
2. Inadequate Promotional Activities: Promotional activities like advertisement and
publicity are still lacking. People have not been enlightened enough on packages
available from these financial institutions. Confidence has not been restored in the
case of those that have lost confidence in the financial sector. Most of the time,
information to promote their activities thereof making it difficult for the impact of
their promotional activities to be felt by the population.

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 3. Inadequate Place or Channel of Service: This is one major weakness of the
marketing strategy. The places where these services are obtainable have not been
adequate and they tend to make the banks ineffective and inefficient Branch offices
providing these services are not equitably distributed and as such needy individuals
cannot receive bank service promptly. These are those who are interested in
patronizing these financial institutions but cannot do so owing to lack of accessible
branch net work.
4. Unappealing Prices: Users of the services of the banks usually consider the prices
charged by these institutions for their services not appealing. Also depositors consider
the interest paid on deposits very low and unattractive when compared to the earning
yield in other sectors of the economy. The inadequate pricing tend to discourage
people from patronizing the bank and in turn it leads to reduced sales volume on the
part of the banks.

HOW TO IMPROVE MARKETING OF BANK SERVICE

There are some lay down principles or measures to be taking in order to improve marketing
of bank services. These measures include the following:

1. Customer Orientation: The banks should focus on their customers while designing

their marketing strategies customers needs change and a banks ability to meet those
needs must change.
2. Long Term Profitability: Without customers, bank would have no revenue.
Marketing is directed at protecting and expanding the stream of revenue. It does so by
keeping existing customers, broadening their banking relationships by cross-selling
services and attracting new customers.
3. Organizational Commitment: Marketing is the responsibility of every bank
employee. Whether at work or in their leisure time, every employee who comes into
contact with potential or existing customers is marketing the bank. Good training for
all bank employees on how to interact with the public is the responsibility of a bank
that wants to survive the competition in the financial sector.
4. Branch Network: Extensive branch network of banks constitutes an effective retail
outlet for their services. The branches should be adequately distributed to serve the
populace for whom they are meant.

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 5. Effective Advertisements: An effective advertisement should serve as a supporting
instrument to the branch banking in achieving effective marketing of financial
services. Outright advertisements in professional journals, magazines, radios,
television jingles, coupon adverts and other are recommended.
6. Automation: The operators of these financial institutions should be automated.
Payment system, fund transfer system, documentation services and so on, should be
handled with the use of computers.
7. Correspondent Banking: In situations where it is not possible to establish branches,
correspondent banking relationship should be used by banks to boost effective and
speedy services for their customers.
8. Time Stipulation: Time required for the delivery of each service should be specified
and defined to avoid spending too much time on one particular job. The time required
for each service should be ensured so as to effect implementation.
9. Promotional Activities: These are those activities or steps taken by financial
institutions to boost awareness and sales of their various services. These activities
include: special offers to customers and distributors, conferences, exhibitions,
educational courses and seminars should be included in the marketing communication
efforts.
10. Sales Agents and Representative: Agent and representatives should be used to reach
those in the remote parts of the country.
11. Increased Social Responsibilities: The banks social responsibilities to the citizens or
public should be increased so as to create more awareness.
12. Sales Bonanza: As is practiced in some other industries, and of the year and special
bonanza is recommended so as to encourage existing customers, attract more
customers and create more awareness.
13. Matching Concept: High bank charges and commissions should be matched with
high interest rates. Increase in bank charges and commissions should be compensated
with a proportionate increase in interest rates and improved quality of bank services.

MARKETING MANAGEMENT CONCEPTS

There are five alternative concepts under which business organizations can conduct their
marketing activities.

PRODUCTION CONCEPT
25
This is a management orientation which assumes that consumers will favour those products
or services which are available and affordable, and therefore the major task of management is
to pursue improved production and distribution efficiency. The organizational task is to keep
improving production and distribution efficiency to attract the customers.

 PRODUCT CONCEPT

The product concept is a management orientation which assumes that consumers will favour
those products that offer the most quality for their prices, and therefore the organization
should devote its resources to improving product quality. The task of the organization is to
improve product quality as the key to attracting and holding customers.

SELLING CONCEPT

This is the management orientation that assumes that consumers will either not buy or not
buy enough of the organization’s products unless the organization makes a substantial effort
to stimulate their interest in its products. Here the organization has the task of organizing
strong sales oriented department as the key to attracting and holding customers.

MARKETING CONCEPT

This is a management orientation which holds that the key task of the organization is to
determine the needs and wants of target markets and to adapt the organization to delivering
the desired satisfactions more effectively and efficiently than its competitors. The
organizational task is to reach and choose target markets and develop effective offers and
marketing programmes as the key to attracting and holding customers.

SOCIETAL MARKETING CONCEPT

This is the management orientation which holds that the key task of the organization is to
determine the needs and wants of target markets and to adapt the organization to delivering
the desired satisfactions more effectively and efficiently than its competitors in a way that
preserves or enhance the consumer’s and society’s well being. Task of the organization is to
serve target markets in a way that produces not only want satisfaction but long run individual
and social benefits as the key to attracting and holding customers.

26
 MARKETING MIX

Marketing mix is the set of controllable variables and their levels that the firm uses to
influence target market. A bank has to decide, how to allocate the total marketing mix
element. Bank normally focuses on the marketing mix when developing a marketing plan.
The factors below defined the total relationship between a bank and a particular customer and
include:

PRODUCT

Product is the most important element in the marketing mix. By a product, we mean anything
that can be offered to a market for attention, acquisition, use or consumption. A product has
three dimensions, the core or generic product, tangible or formal product and extended or
augmented product. Banks always provide the best product customers want against their
competitors.

PLACE

This is concerned with the efforts a firm or bank makes or order to get its products to the
target market. It has to do with selection of distribution channel and the intermediaries,
location of distribution outlets, channel management, inventory management, order
processing, transportation, merchandising and sales management. Banks product must be at
the right place, spot, when, and how they are needed for them to successful in today
competitive economy.

PROMOTION

Marketers of financial services promote their service through the use of normal tools of
promotion such as:

Advertising

Personal selling

Sales promotion

Publicity

27
Premiums

Public relations

Direct mail

PRICING

In setting a price, the firm must pay attention to pricing objectives, policies, and procedures.
The firm can draw guidance from the theoretical pricing model of the economists. The model
suggests how the firm can find the short-run profit, maximizing price when estimates of
demand and cost are available. The model, however, leaves out several factors that have to be
considered in actual pricing situations, such as the presence of other objectives, multiple
parties, marketing mix interactions, and uncertainty surrounding like estimates of demand
and cost.

When a firm considers changing its established price, it must carefully consider customers’
and competitors reactions. The firm that faces a competitors’ price change must try to
understand the competitors’ intent and the likely duration of the change.

STRATEGIC MARKETING PROCESS

This is a managerial process of analyzing market opportunities and choosing marketing

positions, programmes, and controls that create and support viable businesses that serve the
company’s purpose and objectives. The specific step is strategic marketing process include
the following:

(a)              Marketing opportunity

(b)             Target market selection

(c)              Competitive positioning

(d)             Marketing systems development

WHAT ARE SURVIVAL STRATEGIES

28
Strategy as defined by Chambers learner’s dictionary is the art of managing an affair,
cleverly: following the Oxford dictionary, ‘strategy is the planning and directing of the whole
operation of a compaign, or war; a plan, a policy.

Whereas survival according to Chambers Dictionary means ‘the state of surviving.’

Therefore, to survive means to remain alive, in spite of a disaster. In the researcher’s opinion,
survival strategies are those plans mapped out by a company or an institution to remain alive.
So marketing of banks services rendered by bank’s management are plans to survive the
current fierce competitive nature of banking business.

TECHNIQUES FOR SURVIVAL

Ogbodo (1993:6) said that the success or failure of any bank depends on a large measure of
the capability, integrity and enthusiasm of its directors and other employees. He however,
stated that with competition getting tougher in a guided deregulated environment, banks have
become market driven organizations. He further opined that banks should evolve strategic
planning process by formulating action plans through marketing of bank financial services
and products delivery. According to him, the techniques adopted for survival are:

SCIENTIFIC MANAGEMENT APPROACH

The quality of the management of an institution or company determines to a great extent the
quality and how much achievement such an institution can make within a given period.

In Ogbodo’s view, the poor financial conditions of some banks are directly related to the
quality of their management. Furthermore, rampant  board room quarrels, insider abuses,
fraud and forgeries, weak internal control systems, litigation and conventions of statutory,
regulations that have overtaken some banks’ management often result to distress in the
banking industry as most of them are unable to cope in the present competitive environment.

Anyanwaokoro (1996:209) cited management competence as one of the factors that must be
adequately maintained to avoid crises in the banking industry. He further explained that based
on the “CAMEL” bank examination rating system, a bank is bound to fail unless serious
corrective measure are taken if it starts having problems with the issues covered under the
aforementioned acronym. According to him CAMEL stands for:

29
C       –        Capital Adequacy

A       –        Asset quality

M      –        Management Competence

E       –        Earning Strength

L       –        Liquidity Sufficiency

Ogbodo (1995:5) identified that banks as tools for survival have introduced discipline,
inculcated good management qualities as well as put – in place improved credit policies and
faithfully implement them.

STRATEGIC PLANNING

In First Bank’s Business and Economic Report, (May, 1998) it was stated that, to survive
today, and possibly remain in business tomorrow, intensive planning must be the focus of any
organization that is aspiring to meet the challenges of the modern time. Strategic planning
was defined in the report as a managerial process of developing and maintaining a balance
between the organization goals and abilities and its changing environment. Strategic planning
is essentially people oriented, hence it involves everybody and in particular those whose
inputs would assist in the achievement of the target set by the bank. It is the strategic
planning done and implemented by the management of a company that assists them to
achieve whatever goals set.

PUBLIC RELATION

Ikechukwu and Ekwo (1996: 34) stated that some public relations experts look at the practice
of public relations as a strategy for overall corporate survival and more narrowly as a
marketing support system or tool.  Public relations is defined as a philosophy and function of
management, which evaluates public attitudes, identifies the policies of an individual or
organization with public interest and executes a programme of actions to earn public
understanding and acceptance (PR, News , 1947). Secondly, public relations is defined as a
promotional activity that aims to communicate a favourable image of the product or its
marketer and to promote goodwill (Shewem, 1987, 491).

30
The First Banks Business and Economic Report (1998) pointed out that the need for good
public relations in the marketing of financial services cannot be over-emphasized. It observed
that good public relations has helped most banks to increase higher profit – spinning business
at reasonable margins. It is however through good public relations that some banks offer
other services and new products to their customers.

INFRASTRUCTURE AND MODERN TECHNOLOGY

Nigerian banks have no alternative but to embrace the new information technology in order to
achieve increased efficiency and competitive advantage (The Nigeria Banker, January June
1998:8).

Ogwuma Stated in the Nigerian Banker (1998:11), that given the role technology has played
in the modernization of the banking sector, especially in terms of development of new
banking products, marketing services and the payments system, as well as strategic
management in the emerging marker economies, there is no doubt that the future of the
Nigerian banking industry will be technology driven.

However, he further said that a critical future role of technology in Nigeria’s banking
development is to reduce further the waiting time in banks. Notwithstanding the huge cost of
providing necessary infrastructural facilities for efficient and effective performance, banks
have gone a step further to introduce sophisticated computer equipment to cope with today’s
competition. Such a move has become imperative because management and analysis of
bank’s risk are based on the proper processing of information. The use of information
technology in the efficient delivery of financial services is now a banking norm, (First Bank’s
Business and Economic Report May, 1998).

It was further revealed that those financial services previously considered the exclusive
preserve of the more development economic can be transacted with ease. The electronic fund
transfers services using the Automated teller machine and the overnight cash withdrawal
services are among the latest innovations.

BANKING REGULATIONS

Policies formulated by the supervisory authorities operating in the Nigerian financial system
often adopted by banks to address a pressing issue. Though those made by the central bank of

31
Nigeria are meant to control banks activities, they often affect the volume of business done
by banks. The instability of these policies makes the policies more harsh on banks as they are
often confused of what to do. It was stated in the IBN report that a successful implementation
of the policies will lead to a more mature competitive environment in which more attention
will be paid to services costs and market orientation.

HUMAN RESOURCES

Ogbodo (1995:6) reported that the growing competition has intensified staff turnover, in
addition to increase in deposits and number of customers. The establishment of new banks or
even branches has encouraged free movement of labour in the banking industry as bankers
move from one bank to another in search of higher pay. He further said that banking is
increasingly moving to an all graduate profession as emphasis is on delegating increased
powers to knowledgeable and skilled manpower on the lower cadres as a way of ensuring
quicker turn-around time in order to cope with the intense competition in the market place.
He however, said that to achieve this aim, banks now employ graduate professionals, and
through their individual staff development programme, train both new and old employees so
as to withstand the rigorous of today’s competitive environment.

32
 INTRODUCTION
The Banking services sector plays an important role in modern economy. The group of
institutions that make up an economy’s Banking system can be seen as ‘the brain of the
economy’, providing the most of the economy’s need for many functions. Marketing of
Banking services by banks is under active and thorough discussion among intellectual’s
world and bank personnel. Survey and research have beenconducted both by academic
researchers and practitioners on the various aspects ofservices marketing in general and
Banking services marketing by banks in particularboth in India as well as abroad.

Banking Services Marketing

As the service sector is making an increasingly significant contribution to the modern
economy, clients are able to exploit the benefits of available choices and easy
availability. Because of this trend and the constant inflow of service firm competitors
service, firms operate in an increasingly complex, competitive business environment
which results in very tough competition as well as the challenges posed by the ever-
changing modern business world are forcing service firms to review and often adapt their
management styles and marketing strategies TeareMoutinho& Morgan (1990).Sankaran
M (1999) studied the measures that would help domestic players inBanking services
sector to improve their competitive efficiency, and thereby to reduce the transaction
costs. The study found that the specific set of sources ofsustainable competitive
advantage relevant for Banking Service Industry areproduct and process innovations,
brand equity, positive influences of'Communication Goods’, corporate culture,
experience effects,scale effects,and information technology.While according to Baker
(2003)the growth in the service sector has become more competitive which transformed
the management and marketing activities within the sector. The focus is increasingly on
appropriate, well-researched and even aggressive marketing to ensure service firms‟
survival in the face of fierce competition. Kotler et al. (2010) indicate that a service is
any activity or benefit that one party can offer to another that is essentially intangible and
does not result in the ownership of anything. While according to Bosch (2006) services
are those separately identifiable but intangible economic activities that provide want-
satisfaction and that are not necessarily tied to the sale of a product or another service.
Boshoff and Du Plessis(2009) have also indicated that services are essentially intangible
but are value offerings providing various things such as convenience, amusement,
entertainment, comfort and health. Therefore, the activities performed by banks for their
33
customers, such as the provision of loans and saving facilities can be classified as
services.Daniel Carol (1970) has suggested ‘Ten commandments for bank marketing has
framed a set of Ten Commandments for bank marketing According to him inclusion of
marketing functions within the marketing participation in key banking decisions, product
orientation, learning curve of chief marketing executives, quality of marketing personnel,
development of a record of accomplishment and use of outside services etc. are the main
commandments for successful bank marketing.

There is a vast difference between marketing of services and marketing of products. This
is because of the unique nature of services .Services are intangible, inseparable as it
cannot be separated from the service provider and consumer, perishable as it cannot be
stored because production and consumption occur at the same time, variable as the same
service to different consumers at different times may vary considerably and un
transferable as the consumer only use the service and cannot own the service Boshoff&
Du Plessis(2009); Bosch(2006); and Bruhn &Georgi(2006).

Characteristics of Bank Services

The four distinguishing characteristics ofservices are intangibility, inseparability,
heterogeneity and perish ability .The study revealed that intensifyingcompetition and
increasing customer expectations have created a climate where'quality' is considered to
be a major strategic variable for improving customersatisfaction and thus the profitability
of Banking service providers Anne M Smith (1990) .However banks offer very
heterogeneous services. This heterogeneity means independence between pricing of one
service and supplied quality of another service within the same bank that is why it is
necessary to consider (Shy, 1996). WhileHui’s (2004) results can be applied for bank
sector that the characteristics of the bank are definitely important, but clients do not buy
a seller, they buy a good or a service.

Bank Marketing
The introduction to the marketing concept to banking sectors can be traced back to American
Banking Association Conference of 1958. Banks marketing can be defined as the part of
management activity, which seems to direct the flow of banking services profitability to the
customers. The marketing concept basically requires that there should be thorough

34
understanding of customer need and to learn about market it operates in. Further the market is
segmented so as to understand the requirement of the customer at a profit to the banks

The banking industry, one of the most important instruments of the national development
occupies a unique place in a nation’s economy. Profit is the main reason for the continued
existence of every commercial organization and profitability depicts the relationship of the
absolute amount of profit with various other factors. Feick and Price, 1987; Slama and
Williams, 1990; Belch et al., 2005). Banks in India can be categorized into non-scheduled
banks and scheduled banks. Scheduled banks constitute of commercial banks and co-
operative banks. During the first phase of Banking reforms, there was a nationalization of 14
major banks in 1969. This crucial step led to a shift from Class banking to Mass banking.
Since then, the growth of the banking industry in India has been a continuous process.
PrakashTiwari&HemrajVerma(2009).

Public sector banks were ruling the roost during thepre-liberalization era. Then mass
banking was theorder of the day. But ever since our countryembraced market economy,
there has been aparadigm shift in the functioning of banks. Profitbanking concept has
pushed the mass bankingconcept to the backyard. The institutions are actinglocally with
a global thinking. Thus marketingconcept permeates the banking arena. In acompetition
driven economy, customer is thesovereign. Only such of those entities that satisfy
customers are surviving and the rest of others die anatural death.The Narsimham
Committee (1991) which covered the whole gamut of the Indian banking sector has also
emphasized the need to improve service to the customers. Simultaneously, besides the
pressure of having to work efficiently, the banks are being subjected to pressures in such
matters as prudential norms and transparency. According to Dixit V.C. (2004) bank
marketing is defined as an aggregate of functions directed at providing services to satisfy
customers’ Banking needs and wants, more effectively than the competition, keeping in
view the organizational objectives of the bank. Bank marketing has become a very
complex yet interesting subject as it requires the knowledge of economics, sociology,
psychology, banking and also core marketing concept. In marketing, it is the customer
who has the upper hand. The mantra of effectively marketing bank products lies in the
systematic and professional approach towards satisfying customers’ needs. Other
important developments with respect to customer care include the Customer Protection
Act, which covers the bank services and the establishment of Banking Ombudsman
35
Scheme he says that Indian banks have to conform to international accounting standards,
if Indian banks are to get their due place and recognition in the global Banking
market’Jankiraman (1994). Sondge and Gadhave (2011);Vyas P (2004) said that there
was effective implementation of e-banking services in case of private banks and foreign
banks, whereas, nationalized banks were found to have lesser degree of
computerization.Das A.(1997) in his paper found that there is decline inoverall efficiency
due to fall in technical efficiency which was not offset byan improvement in a locative
efficiency. However, it is pointed out that thedeterioration in technical efficiency was mainly
on account of fewnationalized banks. While according to Chumba and Osuagwu (1994)
marketing is important for the success of any organization, whether it is service oriented
or product oriented.

Marketing StrategiesMarketing strategy is one the most importantareas that needs to be

carefully examinedby the policy makers of banks.This stems from the need to improve
theperformance and ensure sustainable growthof Islamic banks as competition in the
bankingindustry intensifies.

All the techniques and strategies of marketing are basically designed to attract customers
and to retain them. In banking services, marketing is not a department responsibility but
that of the whole organization. Every person from the chief executive to the person
sitting at the counter has to be marketing oriented and the whole business is seen from
the point of view of its final result i.e. customer satisfaction.

To achieve a set of organizational goals and objectives companies must develop a

thought design, and accordingly execute the various strategies.These strategies can be of
any type as corporate strategy, businessstrategy, or functional strategy. Marketing
strategies constitute one of the functional strategies manage to applied by modern
companies in order to improve performance. Marketing has been defined and
conceptualized in various ways, depending on the author’s background, interest, and
education Osuagwu(1999).Marketing can be seen as a matrix of business activities
organized to plan, produce, price, promote, distribute, and megamarket goods, services,
and ideas for the satisfaction to customers and clients.
Marketing scope in banking sector should be considered under the service
marketingframework. Performed marketing strategy is the case which is determination of
36
the place ofBanking institutions on customers’ mind. Bank marketing does not only
include service selling of the bank GunalOnce(2010).Twomajor factors of marketing are
the recruitment of new customers (acquisition) and the retention and expansion
ofrelationships with existing customers (base management. For marketing plan to be
successful, the mix of the four‘Ps’ must reflect the wants and desires of the consumers in
the target market. Trying to convince a marketsegment to buy something they do not
want is extremely expensive and seldom unsuccessful. Marketers dependon insights from
marketing research, both formal and informal, to determine what consumers want and
what theyare willing to pay for. Marketers hope that this process will give them a
sustainable competitive advantage(Meldan, 1984). The way in which consumers are
targeted by a firm has also changed over the last few years. Traditional marketing
approaches tended to utilize segmentation techniques in order to group a specific type of
client in a certain market Karakostas (2005).

Today’s Banking service institutions have shifted from traditional face-to-face selling to
direct marketing practices, including phone, mail, and computer technology. Consumer’s
preferences toward face-to-face interaction versus direct means are empirically examined
across 15 different Banking products and services. A significant variation was found in
consumer preferences across different Banking products and services, and the profiles of
consumers are developed based on their preferences. Implications are drawn for
developing customer-oriented marketing strategies, acknowledging customers’
differences in their preferences toward human interaction and self-service technology
Jinkook Lee (2002).

The features of bank as bank size and the form of ownership such as public sector bank,
private sector bank, or foreign bank has a great impact on a choice of a bank. Ardic and
Yuzereroglu (2007). While according to Seshaiah&Narender (2007) and Ezirim (2005)
overall quality of banking for customer is most important. They found that people choose
a bank based on some characteristics as safety of deposits, size of bank , accuracy of the
process, general service quality, speed of delivery, proximity from their place, secured
environment, cordial staff, genuine price and service charges, product packaging, general
public impression, peer group impression, friendship with staff, advertisement and
publicity etc.

37
Marketing Strategies of Banks in India
Chidambram R. M and Alamelu (1994) in their study emphasized thathe problem ofdeclining
profit margins in the Indian Public Sector Banks as compared to their private sector
counterparts. It was observed that in spite of similar social obligations almost all the private
sector banks have been registering both high profits and high growth rate with respect to
deposits, advances andreserves as compared to the public sector banks. Regional orientation,
bettercustomer services, proper monitoring of advances and appropriate marketingstrategies
are the secrets behind the success of public of the private sectorbanks.Adedeji and
AbosedeOlufunmilago (1998) conducted the study was concerned with the bank
engages in extensive marketing strategies and the most widely acknowledged marketing
strategy employed by the bank was promotion while price was the least competitive. The
bank has committed a lot of human, material and Banking resources to marketing
strategies. With limited resources available many banks are evolving new strategies for
market share and survival. To this end no bank is expected to remain indifferent to its
environment. Therefore most banks are committed to continuous improvement of its
products and services to ensure that customer loyalty is retained. While many banks are
being liquidated, some others are reaching for greater heights. It is then essential for
Banks to be a market leader at the turn of the century through effective marketing
strategies.

The nature of services initiated additional marketing mix activities for service firms,
namely processes which mean a specific method of operations are necessary for service
delivery, people means service employees must be highly involved in the service
delivery processes and physical evidence which contributes to the consumer’s service
experiences collectively known as the 7Ps of services marketing. The extension of the
traditional 4Ps of marketing to the 7Ps for services marketing is supported by various
authors, such as Kotler(2010);Boshoff and Du Plessis)2004; Brink and Berndt
(2008).Dixit (2004) concludes that for successful marketing and to make it more effective,
identify thecustomer needs by way of designing new products to suit the customers. The staff
should be wellequippedwith adequate knowledge to fulfill the customer’s needs. We should
adopt long-termstrategies to convert the entire organization into a customer-oriented
one.Thus all the clients with similar characteristics were classified as one segment to be
marketed to in the same way and, therefore, with the same combination of the 7Ps in the
case of a service firms. Das, Abhiman; Nag, Ashok; and Ray, Subhash C. (2004)
38
During the1990s India’sBanking sector underwent a process of gradual liberalization aimedat
strengthening and improving the operational efficiency of the Banking system.It is observed,
none the less, that Indian banks are still not much differentiated interms of input or output
oriented technical efficiency and cost efficiency. However,they differ sharply in respect of
revenue and profit efficiencies. The results provideinteresting insight into the empirical
correlates of efficiency scores of IndianBanks.Currently the focus is on one-to-one
marketing with the aim to individualize the marketing effort. According Gummesson
(2008) marketing in services has now extended into relationship marketing. Thus, the
focus is on relationship marketing within the services marketing scope has become a
priority for firms.CRM is a sound business strategy to identify the bank’s most profitable
customersand prospects, and devotes time and attention to expanding account
relationships with those customers through individualized marketing, reprising,
discretionary decisionmaking, and customized service-all delivered through the various
sales channels thatthe bank uses.TokunboSimbowale (2005) examined the usage of
marketingconcepts & techniques and recommended that a well structured marketing
department and best marketing mix and effective marketing Strategy in banks is essential
forprofitability &effectiveness. According to Dhanabhakyam and Kavitha (2012) banks
play an important role in the economic development of every nation. They have control over
a large part of the supply of money in circulation. Through their influence over the volume of
bank money, they can influence in nature and character of production in any country.
Economic development is a dynamic and continuous process. Banks are the main stay of
economic progress of a country, because the economicdevelopment highly depends upon the
extent of mobilization of resources and investment and on the operational efficiency of the
various segments (i.e. Trade, Industrial Development, and Agriculture) of the economy.
Thus, in the modern economy, banks have become a part and parcel of all economic activities
in India. Deirdre O'Loughlin et al (2004) studied the functional and emotional values that
went into branding of retail Banking services. The functional values included
competitiveness, size, advice and expertise, customer service, flexibility, accessibility,
efficiency and innovativeness. The emotional values included security and stability,
familiarity, longevity, friendliness, caring and helpful, courtesy, comfort feeling and
understanding. In today's competitive markets, an aggressive competition between banks is
seen more than in the past. They have realized that relationship with customers and
itsmanagement are significant factors to win this race especially in e-banking in whichface to
39
face interactions does not exist. The applications of customer-centric strategiesand programs
of customer relationship management (CRM) help banks to build longtermrelationships with
customers and result in increasing their income. Therefore, inthe banking sector, CRM is of
strategic significance because of the effects it has oncustomer satisfaction and retention
which is the final goal in any successfulbusinesses Blery&Michalakopoulos (2006). Firms
especially banks have realized the importance of becoming customer oriented and
therefore Customer Relationship Management Practices (CRM) is seen to be very
important to these firms. Customer relationship management (CRM) manages the
relationships between a firm and its customers. Managing customer relationships
requires managing customer knowledgeIzahMohdTahir;ZulianaZulkifli (2011). Females
have emerged as an important target segment for retail bankers because of their
empowerment as well as recently acquired social role. Gender is the critical
segmentation variable due to a number of reasons. There has been a dramatic increase in
women investors in recent years Philips (1992). There is a significant difference among
male and female consumption pattern was identified in Banking goods and services and
variables leading to investment among the female have also been changing considerable
in recent years Kover (1999).Sharma and Mehta (2004) have investigated that only little
attention has been paid to the role of gender bias in measurement of service quality of
banks . Service quality has been found to be important to women than to men when
transacting business with a bank suggested by Staffird (1996). He also suggested that
these differences result from the personality associated with gender. People behave
differently while availing services of banks according to their gender.

Though different concepts, there exists a strong relationship between marketing mix and
marketing strategy. One without the other will not make the business strong. The goal of
well organized business is to take the research from marketing strategy functions to
implement wise decisions utilizing the components of marketing mix of the organization.
Marketing strategies and tactics are concerned with taking decision on a number of
variables to influence mutually satisfying exchange transactions and relationships. This
section examines certain relevant dimensions of marketing strategy of banks and their
effectiveness.According to Chowdhari Prasad and K S SrinivasaRao(2005)marketing
strategies of banking sector revealed that banks can base their marketing strategies on
various parameters which are broadly in terms of 7Ps of marketing viz., Product, Price,
Place, Promotion, People, Physical Evidence and Processes.
40
Product and Service
Before the introduction of modern banking form there was a system of direct finance
where the owner of capital deals directly with the user of capital. So the savers were
dealing with the investors directly. With the passage of time, there was observed a rapid
growth in trade and manufacturing industries and that lead to an increased demand in
their Banking requirements. Direct financing seemed to be unable to fulfill the Banking
requirements of the investors at this stage and banks came into existence to facilitate
Banking transactions between savers and investors. Now banks are dealing in various
transactions like receiving, collecting, transferring, paying, lending, investing and many
more in order to facilitate and achieve excellence in their consumer’s insights Woelfel&
Charles (1993). Hui (2004) in his studies said that company’s performance is indeed
influences consumer preferences. He has observed that higher product variety of a firm
has a decreasing return because products of one firm are considered as substitutes. At the
same time wide product line helps to build a long-term brand reputation. Banks in India
have become compliant to the mechanization followed by computerization and well net-
worked. Technology was introduced in a progressive manner both at back office and front
office level in almost all the branches in rural, semi-urban, urban and metro centers.
Gradually, ATMs, Internet Banking, Credit, Debit & Smart Cards and other facilities were
made effective at all the bank branches. These changes and developments have benefitted to
all the customers. Banks are investing / spending huge funds for technology as well as
training its staff in order to meet the changed work environment and Core Banking became
order of the day.VaralaakshmiAlapati ;Chowdhary Prasad and SrinavasaRao (2013).
According to Hirankitti; Mechinda and Manjing (2009) the product offer in respect of
services can be explained based in two components firstly the core service which represents
the core benefit and the secondary services which represent both the tangible and augmented
product levels. The secondary services can be best understood in terms of the manner of
delivery of the particular service.

The various strategies related to products include Interest based, Fee based and
technology based activities. Interest based activities strategy includes mobilization of
deposits and advancing loans to the customers. According to Christopher;
PayneandBallantyne(1993) Traditionally superior marketing and customer service were
viewed as providing the right product in the right place and at the right time so the focus
41
was mainly on distribution channels and logistics. However nowadays a new vision of
marketing and customer service has emerged which the focus is on the customer or
patron and on their needs and preferences. On the other hand according to Bosch;Tait
and Venter (2006) marketers must now focus on consumer needs and wants and
accordingly they must design their products. This theory constitutes a more complex and
versatile approach of investigating consumer needs then building relationships with
consumers and potential consumers and satisfying their needs. In essence a firm has to
listen to its current and potential consumers and has to develop product best suited to
them. According to Neale G. O'Connor and Cecilia L.K. Cheung (2007) there is a
significant interactive influences of early product adoption and customer accounting practices
on bank performance. Performance would be enhanced if customer accounting practices were
used to a greater extent in those banks that were early in adopting a greater range of products.
The evidence shows that bank performance in an intensely competitive market such as Hong
Kong is driven by the fit between customer accounting practices and early product adoption
strategies.Sasser (1976) in his studies explained that several strategies must be applied for
producing a better match between demand and supply in service business. For increasing
demand the firm can make use of differential pricing schemes, developing non-peak
demand and at the same time developing complementary services.The increased
consumer participation should be encouraged. He also observed that the firm is not able
to store or transport services then only direct distribution is possible, thereby potentially
limiting the number of markets the firm can cover. Apart from the stress laid on ‘right
place’ and ‘right time’ in case of distribution goods, there is additional importance given
to the performance of service in the ‘right way’ as well. In a highly competitive market,
the shortest route to differentiation is through the development of brands and active
promotion to both intermediaries and final consumers Parasuraman(1997). While in the
long run branding, targeting and positioning would all be much more effective if the
supplier had some tangible advantage to offer consumers. This is evident in the banking
industry, where many banks are providing more or less the identical products for nearly
the same price. Unless a bank can extend its product quality beyond the core service with
additional and potential service features and value, it is unlikely to gain a sustainable
competitive advantage Chang; Chan and Leck (1997). Thus, the most likely way to both
retain customers and improve profitability is by adding value via a strategy of
differentiation (Baker, 1993) and the margins can be increased through higher
prices.Today’s customers do not just buy core quality products or services only they also
42
buy a variety of added value or benefits. This forces the service providers such as banks
to adopt a market orientation approach that identifies consumer needs and designs new
products and redesigns current ones (Ennew and Binks(1996); Woodruff(1997).
While Ioanna (2002) proposed that product differentiation is impossible in a competitive
environment like the banking industry. Banks everywhere are delivering the same
products.There is usually only minimal variation in interest rates charged or the range of
products available to customers. Bank prices are fixed and driven by the marketplace.
Thus bank management tends to differentiate their firm from competitors through service
quality. Service quality is an imperative element impacting customers’ satisfaction level
in the banking industry. In banking quality is a multi-variable concept which includes
differing types of convenience, reliability, services portfolio, and critically, the staff
delivering the service. Allcommercial banks in the market try to sell mere
products(Cross-selling), adopt new dynamic marketing strategies,to develop new
innovative products and to place greateremphasis on both the tangible and intangible
aspects oftheir service (Petridon and Glaveli(2003). As a result ofthis heightened
competition, bank service quality hasbecome an increasingly important factor in
determiningmarket shares and profitability in the banking sector(Anderson(1994) and
Spathis(2002).

Banks offer services, and they usually experience difficulties in managing them.Thus,
service quality has emerged as a key strategy adopted to offer quality service
tocustomers. In consequence, in the banking industries, where many similar products
areavailable banking practitioners have to pay close attention to superior service
provision.This is because service quality does not impact only on the customer decision-
makingprocess, but also influences customer satisfaction, purchase retention, loyalty and
businesssurvival as shown in many studies Adebanjo(2001); Berry ( 1994); and
Li(2001).According to Lim & Tang (2000); Newman & Cowling(1996); Youssef(1996)
Increased product availability and mass production techniques have given this chanceto
customers to be able to choose the items they really desire among the variety ofproducts.
Therefore, focusing on customers' expectations is the most important factorfor firms to
survive in today market places. On the other hand, knowing customer'sneeds and problems
helps the companies to acquire and retain them easier and withless cost (Dimitriadis and
Stevens (2008). Banking sector reforms have changed the traditional way of doing banking
business. Mainlytechnology is the outcome of banking reforms. Customer is now the king
43
and customer focus or satisfaction of customer is the main aim of the banks. With the
introduction of new products andservices competition has grown up among the banks. Only
those banks will survive who face thecompetition with the effective ways of marketing.
Better service is more important than just a good product in the marketing of bankingservice,
so the focus should be on the want and need of satisfying that product or service Uppal
(2010).

Price
Today bank pricing strategy needs to align with how different customers value their products
and services. Banks should replace traditional pricing with a holistic data driven approach
that includes customers’ needs, preferences, behaviors, purchasing patterns, and price
sensitivity. Banks that develop a customer-focused bank pricing strategy are better positioned
to use pricing as a competitive advantage across market and customer segments, as well as
the entire portfolio of deposit, lending, and transaction products and services Nate Fisher
(2012). The prices of banking products are paid in the form of fees, interest or commissions.
In general a distinction can be made between unit-based and value-based prices. This applies
both from the standpoint of the customer, who pays a unit price for an additional account
statement sent by post and pays value-based interest rates on loans, and from the standpoint
of a bank that can choose unit and value-based variables for calculating and setting prices,
such as the number of portfolios or the value of portfolio transactions executedBuschgen and
Borner (2003).

A price means the value of a commodity or service expressed in monetary terms. Price in
banks includes the Interest charges on loans and advances, interest paid on deposits,
commission and fees charge as well banks services. It is believed that banks fees and charges
should not be exploitative but should reflect the true value ofthe service. Price as one of the
marketing mix in banks is a major marketing strategy, because it has majorimpact on profit
Zethaml and Bittner(2000).Computing prices requires information about which amounts of a
product can be sold at which price and how much of the sales revenue ultimately remains
after the costs are deducted. In retail banking markets, the behaviour of competitors plays a
particularly important part in banks’ pricing considerations. A survey about the pricing
strategies and tools of European retail banks suggest that almost half of respondents rely on
benchmarks as key decision-making tool, and for more than 90% comparing their own offers
with competitors is at least one of the pricing techniques they use Oliver Wyman (2012). Sura
44
(2006) stated that stable dividend policy is followed by commercial banks in India. The study
indicated that the major determinants of current dividend are lagged dividend and the current
earnings. The study also gave support to argument of information content of dividend in the
context of dividend proceeds. Hence, dividend can be used as a signaling device by the
management of the banks.According to Mark Colgate and Rachel Hedge (2001), ‘losing
customers can have a detrimental impact on a bank’s market share and profit’.The reasons for
switching banks were classified into three main problem areas: service failures, pricing
problems and denied services. Results indicated that problems with pricing had the most
important impact on switching behaviour. In contrast, customers tended to complain more
often about service failures prior to exiting the firm. This finding suggests that customers
may be staying silent about the problems that are most important in their decision to exit the
firm.

Prices also often trigger (emotional) react-ions such as doubt, annoyance or regret – not only
at the moment the purchase itself is made, but also beforehand and or afterwards. Behavioural
pricing analyses also examine how buyers react to different offers and how they handle price
information for decision-making. Homburg and Koschate (2005) . The key factors
influencing customers’ selection of a bank include the range of services, rates, fees and
prices charged Abratt and Russell (1999). It is apparent that superior service, alone, is
not sufficient to satisfy customers. Prices are essential if not more important than service
and relationship quality. Furthermore service excellence, meeting client needs, and
providing innovative products are essential to succeed in the banking industry. Most
private banks claim that creating and maintaining customer relationships are important to
them and they are aware of the positive values that relationships provide Colgate (1996).

Place
Location convenience, speed of service, competence and friendliness of bank personnel
should also be most the points with maximum value in banking services (Laroche and
Manning 1986). Meidan (1976) had also revealed the fact that about 90% of the
respondents banked at the branch nearest to their home place and place of work.
Convenience, in terms of location, was also found to be the single most important factor
for selecting a branch. An increase in the potential sale becomes possible with a good
location, as it could attract more customers Pastor (1994). The location theory which
45
considers an ideal location of a store in order to maximize the profit was introduced in
the early 20th century. The study of this theory became revitalized in the 1940’s as the
assessment of broad characteristics of a store’s commercial zone and the measurement of
market share within a city became the focus of the study. These studies experienced
further rapid developments in the 1950’s. Especially many theories regarding the
characteristics of customers’ selections of retail stores were developed through the
studies of the suburb shopping centers erected in the United States after World War II
due to the decentralization of retail business. Based on these studies, Nelson (1960)
identified the followings as the important factors in deciding the feasibility of a location:
population, income, branch function, competition, land value, and future development
potential, etc. Jin Zhang; Jun Shan; and Susheng Wang (2013) carried out an empirical
study on foreign banks' entry to the newly opened up Chinese banking market and
modeled location strategies of foreign banks in China .To investigate the determinants of
foreign banks location choices in China the authors collected data of foreign banks
entries into China during 1980-2006 and their conclusion was that asymmetric
information, firm size and entry sequence are significant determinants of foreign banks'
location strategies. As in the studies conducted on the banks, Sung-Ryong Lee (1985)
viewed the customer characteristics and the branch characteristics as two significant
location factors. With respect to the branch characteristics, in particular, the number of
branches of other Banking institutions in the region is an important factor. Chan-Seok
Park and Yun-Young Lee (1993) analyzed the locations of bank branches by employing
the GIS analysis based on the database. Hee-Yeon Lee and Eun-Mi Kim (1997) also used
the GIS analysis. In doing so, they had first selected the regional economic foundation,
the regional economic strength, and the demand inductivity as the detailed location
factors of a bank branch, which then formed the basis of the analysis. Through
developing of algorithms based on mathematical modelsCornuejols (1979) attempted to
achieve the methodological expansion of a branch selecting strategy. Moreover Lee
(1985) found that as the number of branches of other Banking institutions increases, the
profitability of a bank branch in that region also increases. Ugg-Yeon Cho (1990) has
attempted to explain whether a branch’s profit and loss vary depending on its location
and the density of branches in that region. In a study by Gi-In Song (2006), he has
concluded that functional characteristics, such as customers’ convenience, and brand
image or psychological trust affect the continuous customer commitment. In the studies
pertaining to the images, the customers were found to form an image of a bank from
46
various information sources, and such formed image had a significant influence on the
profitability of the bank.

Nakanish and Cooper (1974) have concluded that the branch image, level of service,
value of products, and the building should be considered in the evaluation of a bank’s
profitability. Young Jun Kim and Yong Sik Nam (1997) expounded that, when choosing
a bank, personal banking customers tend to place more emphasis on their attitude toward
a bank’s services and images than business banking customers do. In other words,
personal bank customers tend to value the personal images they formed toward a bank
and use these images as the grounds on which to continue their relationship with the
bank.

Marketing Mix of Bank

Promotion
With the growing importance of the Banking sector, pressures are escalating for more
effective marketing management of the Banking services. Despite the recent recessions
the Banking services sector is continuing to grow in terms of turnover and profits and
thus has a supreme impact on the other spheres of the economy. Consequently there is
currently growing interest in applying marketing techniques and tools in Banking
services (Meidan, 1996).Groups of Banking services customers once assumed to be
homogeneous and they are proving to have individualized needs and are resisting
conventional segmentation techniques. Behavioral consistency and orderliness are giving
way to fragmentation and market instability in what is described as the postmodern era.
Banking service retailers structured, formalized and risk averse, may find that their
preference for uniformity inhibits their ability to serve with diverse, evolving markets. A
research agenda is proposed based on a juxtaposition of postmodern considerations and
Banking services retailing incorporating recent contributions to marketing thought.
Banking institutions are realizing that their established promotion practices are
inadequate for new marketconditions as levels of customer defection in the sector grow.
Traditionally, banks have tried to reach out toeveryone in the community, but recent
research proposes that banks should aim to identify and serve micro segments Dawes &
Brown (2000).

47
The marketing promotions are the most important facet of marketing strategy leading to
effectiveness. Advertising an aspect of promotional strategy both an informative and
persuasive role and in this respect can change customers’ perceptions of a
service.Duncan (1985) suggested that the services sector industries have to think besides
advertising, about other promotional tools like public relations and publicity. Prince J
(1981) observed television is probably one of the most popular means of advertising
although it is the most expensive. It is the medium of the masses and combines he
attention-getting attributes of sound, picture, colour and movement. So it offers the
opportunity to show a Banking service and demonstrate it in actual use. It has also
repeatedly proved its capacity to stimulate a quick response.

Government allowed private banks to set shop the leaders being ICICI & HDFC. Initially
these banks catered to the rich and ignored the rest but when they stopped growing they
stated catering to all for improving their growth and balance sheet. They were pioneers in
the field of using promotional strategies & campaigns to attract customer. Harwood
(2002) in his research article discussed how the promotional strategies create a want in
the customers and attracts them to the banking industries .Today’s consumers have more
choices for their Banking needs than ever before. Technology, globalization, increased
competition and increased consumer mobility have dramatically changed the way people
bank. Many Banking institutions are looking at branding techniques to differentiate
themselves. Harwood (2002) also argued that branding as a tool to build image is critical
in the banking industry where all firms offer about the same kinds of products.
According to Kaynak (1986) it is critical that banks have a comprehensive knowledge of
customers’ values, attitudes, needs and perceptions of various services the bank offers
and the image which customers have of the bank itself. Accordingly bankers must be
able to build and manage their bank’s image in order to clearly define the differences
between their bank and its competitors.

Viral Marketing hasemerged as very important feature in modern marketing practice. It

is a term used to describe a whole set of aggressive promotion. It includes paying people
to say positive things about a firm’s products via word of mouth(publicity) emails, blogs,
and mobile phones. It also involves setting up multilevel selling schemes where
individuals get commissions for directing friends to certain outlets, products, and
websites Thuo(2008);Paul Cox (2007) revealed a fact that Banking service providers are
48
not perceived highly trusted, so that they might have difficulty in selling risk-based
products . The effort to promote banking business is quite distinguished affair. At
present, it has become very tricky due to the changing trends of industry, increasing
competition and efficiency of regulatory environment, and the Banking system. The
complexity in the banking services is also an issue of vital importance. This is the time
when banks are offering new and innovative services, frequently in the market. The
content of promotional tools should help the customer in making most valuable decision.

This can be firmly said that well-designed promotional strategies are very important to
promote banking services effectively. In marketing any product or service customer
satisfaction has been given the prime importance. The most frustrating aspect of
marketing of banks is lack of management support, lack of inter-departmental
cooperation, government regulations and advertising & media problems. Banking should
bring out the areas requiring improvement and which further throw light on the measures
to improve the quality of services. Promotional packages are very important for Banking
service industry Ananda&Murugaiah(2003).

People
Customer retention is an important element of banking strategy in today’s increasingly
competitive environment. Bank management must identify and improve upon factors that
can limit customer defection. These include employee performance and professionalism,
willingness to solve problems, friendliness and level of knowledge, communication
skills, and selling skills, among others. Furthermore, customer defection can also be
reduced through adjustments in a bank’s rates, policies and branch locations Leeds
(1992).

Clearly there are compelling arguments for bank management to carefully consider the
factors that might increase customer retention rates. Several studies have emphasized the
significance of customer retention in the banking industry. However there has been little
effort to investigate factors that might lead to customer retention. Most of the published
research has focused on the impact of individual constructs, without attempting to link
them in a model to further explore or explain retention. If retention criteria are not well
managed, customers might still leave their banks no matter how hard bankers try to
retain them.
49
Apart from the benefits that the longevity of customers brings research findings also
suggest that the costs of customer retention activities are less than the costs of acquiring
new customers. As Rust and Zahorik (1993) argue the Banking implications of attracting
new customers may be five times as costly as keeping existing customers. However
maintaining high levels of satisfaction will not by itself ensure customer loyalty.

Banks lose satisfied customers who have moved, retired, or no longer need certain
services. As a consequence, retaining customers becomes a priority. Colgate; Stewart;
and Kinsella(1996).While Veloutsou (2002) demonstrated that relationship marketing is
based upon an ongoing multi-transactional relationship with customers as opposed to a
series of single transactions as in traditional marketing.

The argument for customer retention is relatively straightforward. It is more economical

to keep customers than to acquire new ones. The costs of acquiring customers to replace
those who have been lost are high. This is because the expense of acquiring customers is
incurred only in the beginning stages of the commercial relationship Reichheld and
Kenny(1990). In addition longer-term customers buy more and if satisfied may generate
positive word-of-mouth promotion for the company. Additionally long-term customers
also take less of the company’s time and are less sensitive to price changes Healy(1999).
All These findings highlight the opportunity for management to acquire referral business
as it is often of superior quality and inexpensive to obtain. Thus it is believed that
reducing customer defections by as little as five percent can double the profits
Healy(1999).

The challenge before the banks is not only to obtain updated information for each
customer but also to use the information to determine the best time to offer the most
relevant products Lau K ( 2003).Customer relationship marketing which is becoming a
topic of increasing importance in marketing is concerned with using information
technology in implementing relationship marketing strategies Ryals (2001).

Deirdre O'Loughlin(2004) studied the functional and emotional values that went into
branding of retail Banking services. The functional values included competitiveness,
size, advice and expertise, customer service, flexibility, accessibility, efficiency and
50
innovativeness. The emotional values included security and stability, familiarity,
longevity, friendliness, caring and helpfulness of the employees of the bank.

Rootman (2008) investigated the variables that influence the effectiveness of

CRMstrategies in banks. These variables were attitude, knowledge ability and two-
waycommunication related to bank employees. Attitude refers to the reaction, response,
orbehaviour displayed by bank employees towards their jobs. The employee’s
knowledgeabilitymeans the ability to remember or to implement banking procedures
policies, products andservices and two-way communications means the communication
from bank managementto customers and vice versa. Results from in this study indicated
that attitude andknowledgeability had influenced the effectiveness of CRM strategies in
banks at the 99percent significant level. This result showed that the relationship between
customers andbanks are influenced by bank employee’s attitude such as the way they
communicate withtheir customers especially for the bank employees at the front enquiry
desk and customerservice, courtesy, comfort feeling and understanding.Customer
retention is an important element of banking strategy in today’s increasingly competitive
environment. Bank management must identify and improve upon factors that can limit
customer defection. These include employee performance and professionalism,
willingness to solve problems, friendliness, level of knowledge, communication skills,
and selling skills, among others. Furthermore, customer defection can also be reduced
through adjustments in a bank’s rates, policies and branch locations Leeds(1992).

However, there has been little effort to investigate factors that might lead to customer
retention. Most of the published research has focused on the impact of individual
constructs, without attempting to link them in a model to further explore or explain
retention. If retention criteria are not well managed, customers might still leave their
banks, no matter how hard bankers try to retain them. Firms especially banks have
realized the importance of becoming customer oriented and therefore Customer
Relationship Management Practices (CRM) is seen to be very important to these firms.
Customer relationship management (CRM) manages the relationships between a firm
and its customers. Managing customer relationships requires managing customer
knowledge. IzahMohdTahir;ZulianaZulkifli(2011).

Process
51
Banking services is undergoing a period of unprecedented change - new products, new
entrants, mergers and acquisitions, downsizing and now another new delivery channel
the Internet. The performance attributes of the Internet are related to both the needs of
consumers and the nature of Banking services products. Suggests loans, cross-border
services, payments and knowledge,advice as areas of opportunity in the early
development of this new marketplace. According to David Birch and Michael A. Young
(1997) Banks offer a wide range of Banking services to personal and business customers
some of theseservices which are bank account, guarantorship, and investment adviser are
needed by an appreciable number ofcustomers but many other Banking services such as
import/export services, money transfers, credit cards and soon have to be brought to the
attention of potential users who then must be persuaded to use them.
Abolaji(20090;Patnai, U.C. and Chhatoi B. (2006) assess the marketing efforts of the Staten
Bank of India, whichenjoy the status of premier bank in India. He also concludes that banks
have a wide network ofbranches for delivery of products. It has taken up some measures to
improve the quality of itsemployees and customer service at branches. But, its pricing are
wilting under competition withoutany regard to costs and it is yet to give due emphasis to its
promotional measures.

Black (2002) found that customers use the same products throughdifferent channel
because their consumer confidence, lifestyle factors, motivations and
emotionalresponses. The channel they were particularly concentrating on was internet
banking, while weshould not forget bank visits, telephone banking and the newly
introduced banking by mobile phone.

V.K. Gupta (2012) found that most of the public sector banks scored high on the
continuity forces and relatively low on the change forces. Most of the private-sector
banks studied scored high on continuity and also high on change forces making them
more competitive, except one bank which is low on both the forces because it is a newly
established bank. The study suggests that there is a need for public sector banks to focus
their strategies on factors affecting change forces for the improvement of their overall
performance in the long run. Their paper brings in the need for social responsibility for
private sector banks and a need for a fine balance in forces of continuity and change for a
long-term sustainable business model. Nowadays many banks are burdened with out-of-
date IT systems. As competition heats up to win back customers and increase internal
52
efficiency, systems will need upgrading across the board. Many banks are assessing core
system upgrades to bring more flexibility and configurability to their product
development and pricing capabilities. Technology is further complicated by the rapid
rate of change and the introduction of new channels and technologies, such as mobile
banking and social media. The sheer pace of change suggests that IT architectures will
require significant re-engineering to support a complete re-working of the traditional
banking operating model. However, modernizing IT architectures will require vast levels
of investment. While some banks understand the lead time and are making the
appropriate level of investments, many banks are finding it difficult to support
investments where the benefits may not accrue for many years and are often difficult to
quantify. David Sayer(2012)

The Study proposed by Peppardand Duhan(2000); Johnson Wilcox & Harrell (1997) said
that needs and expectations of the clients of a service firm must be examined so that the
service delivery process can be adapted and improved to meet their requirements. In
other words, service firms need to build relationships with their clients in order to collect
the knowledge regarding their needs and to be able to sufficiently adapt the marketing
strategies to satisfy their needs.

According to Mols (2001) The Internet and the World Wide Web can facilitate these
bank operations.Given the wealth of opportunities that the Internet creates for Banking
institutionshaving a strong on-line presence is becoming a strategic necessity for most of
themand raises the importance of the Internet as a strategic distribution channel
forproviding banking services. There has been a considerablegrowth in the segment of
consumers preferring Internet banking due to the increase incomputer literacy, the
availability of computers and the reduction in the costs of PCsand Internet access. This
fact will change the optimal distribution structure for mostbanks and Banking
institutes.Internetbanking continues to increase because of Internet’s easiness in use its
low cost andthe requirement from some public authorities to only receive online
paymentsProcess is generally defined as the implementation of action and function that
increases value for products with low cost and high advantage to customer and is more
important for service than for goods. According to Hirankitti(2009) the pace of the
process as well as the skill of the service providers are clearly revealed to the customer
and it forms the basis of his or her satisfaction with the purchase.
53
Therefore process management ensures the availability and consistence of quality. In the
face of simultaneous consumption and production of the process management, balancing
services demand with service supply is extremely difficult Magrath(1986). The design
and the implementation of product elements are crucial to the creation and delivering of
product.With the introduction of online banking in 1995 it allows people to get benefits
of online stuff byhaving every kind of information. It provides benefits for customers
and banks as well. Banks havelowered their transactions costs and advertising services
with the help of websites while thecustomers can enjoy online banking by accessing
internet which is very relaxing, time saving andcost reducing Pikkarainen
(2004).According to Giglio (2002) andRobinson (2000) for delivering banking products
the cheapest, fastest and secured delivery channel can be done onlythrough the Online
Banking.

According to Karjaluoto (2002) with the help of online bankingservices the branch
networks of banks have reduced and also the staff for working in banks andcustomers are
satisfied to use the online banking services as it will save a lot of time and effort to goto
branch of bank and perform these transactions. So the main reason behind accepting the
onlinebanking a service is the time, cost saving and freedom from the place. While
according to Polatoglu and Ekin(2001).There are a lot of reasons which hinders the
popularity of online banking services in spite of the factthat bankers and customers can
get benefit from online banking. The majority of private banks arestill lacking behind the
online banking channel.

The internet connection is very important for the customers to start using the online
bankingservices.Before using these online banking services the new users need to learn
how to use theseinternet services.Some non user’s complaint that the face to face
banking situation is quite different fromdoing banking online so there are no social
dimensions while doing online banking and the security issue also hinders some
customers to use the online banking services,Mattila(2003).

Banking services is undergoing a period of unprecedented change - new products, new

entrants, mergers and acquisitions, downsizing and now another new delivery channel:
the Internet. The performance attributes of the Internet are related to both the needs of
54
consumers and the nature of Banking services products. Suggests loans, cross-border
services, payments and ‘knowledge/advice’ as areas of opportunity in the early
development of this new marketplace.Explores scenarios for the future development of
offerings and for electronic commerce as a whole.Draws on some of Hyperion’s recent
experience in helping to launch electronic commerce services on the Internet,
reengineering of Banking institutions and electronic cash, to suggest approaches for
organizations wishing to participate in this new ‘marketspace.’ While businesses can
now begin to develop strategies for exploiting cyberspace, argues that existing
organizational structures may be inappropriate David Birchand Michael A. Young
(1997).

Thornton and White (2001) have compared several distribution channels ATM,
creditcard, cheques, human teller, telephone, and Internet with a view to a set of
variables affecting theirusage. They concluded that customer orientations such as
convenience, service, technology, change,knowledge, computer, and Internet affected the
usage of different channels. The usage of ATM and telephone increased as customers
were more oriented towards change, knowledge,computer, and confidence.Lockett and
Litter (1997) presented a study of the adoption of direct banking services in UK using
amodel of the perceived innovation attributes and the personal characteristics of adopters
and nonadopters.Their results indicated that the most important perceived positive
attribute of direct bakingwas its 24-hour-a-day availability, whereas complexity and risk
of service were the two negativeattributes. Patricio (2003) and Daniel (1999) argues that
increased competitions in Banking institutions have resulted in realizing the need to
improve alternative delivery channels the most recent one being electronic banking. He
defines electronic banking as the provision of services or information for customers and
the ability to buy products, gain access to accounts, and executes transactions via TV,
computer, telephone, ATM etc. He also points out that today consumers have this ability
to change banks only bypressing of a button. They can access to online intelligent agents
which enable themto compare the services and conditions and therefore reduce the
prices. In addition, hestates that numbers of alternative delivery channels are increasing
which causes fall inpercentage of customers visiting bank branches. Besides electronic
banking have manyother advantages for customers such as:
 Convenience: Shopping, paying bills, buying, and transferring money
fromanywhere at any time.
55
  Features: Electronic banking can be carried out at any time of the day or night.
 Attractive Rates and Incentives: Banks offer attractive interest rates that are
openedonline. Many others also offer incentives, giveaways and special offers to
customersfor opening accounts online.
 Consolidated Portfolio Interface: Most banks offer a seamless and
consolidatedinterface to customers.

Customers can use e-banking services 24 hours a day, without any limitation inlocation
and standing in lines. These services include Automated Teller Machines, Personal
Digital Assistants, Mobile Branches, Interactive voice recognition,Internet Banking,
Point of Sale Devices, and Cell Phone Banking.

This study of Salman Shamim&KashifSardar (2010) concluded that the major impact of
the customer choice depends upon the economicsituation and its nature of particular
dealings. Though there is an improvement in the acceptance ofelectronic banking
products and services but this pace is slow because the consumer feels insecureto
perform electronic transaction due to different factors. The factors are slow internet
connections,low bandwidth, poor government policies for telecommunication
infrastructure, inability to useelectronic banking, insecure method of payment, difficult
to learn electronic banking, no propertraining provided by the banks to use electronic
banking, dissatisfaction from services, technology,incapability to access computer, slow
response of transaction speed, high risk is involved and mostof the time the website is
down.

From the customer’s point of view, electronic banking is providing convenient and
valuable sourceto deal with funding because it provides convenience to access account
24*7. For business consumerelectronic banking is providing refined money management
with the help of electronic bankingwhich gives all the information within seconds
Applegate (1996).

Physical Evidences
According to Turley &Milliman (2000) Classification of Atmospheric variables based on
External Variables,General Interior Variables,Layout & Design Variables,Point of

56
Purchase Variables and Human Variables.The presence of these variables motivates the
customer to patronize a particular bank.

Physical evidence is the strategic tool for the bank marketer.Banking products are
intangible. Tangibilising the intangiblecommodity is a major challenge to the bank
marketer. One among theimportant methods is the upkeep of branch premises and
interior decor.This is relevant not only from the point of view of physical evidence
butalso for tangibilisation strategy. Another strategy is imaginativedesigning of bank
stationery used by customers. Product packagingcould be another tangibilisation strategy
and marketers called it as aseparate 'P' of marketing strategy. Packaging in banking
products couldtake many ways for instance an attractively designed product brochureor a
catchy brand name which a customer can easily understand or apictorial design which
can represent a particular product. Kuppuswami S.A.(1986) .According to Baker (2002)
Physical evidence is the element of the service mix which allows the consumers to easily
judge the service levels of an organization while looking the physical appearance. If a
customer walks into the bank, the expectations are of a friendly environment, ease of
transaction with security for his money. Physical evidence is an essential ingredient of
the service mix; consumers will make perceptions based on sight of the service provision
which will have an impact on the organization's perceptual plan of the service.

These days, there is a tendency of consumers to be more demanding and tough in

relation to the service or product that they would like to purchase. Partly because of that,
but also because of the continually increasing competition, companies are trying to
differentiate themselves amongst others by putting forward something innovative and
inventive. In this context and according to some researchers, physical evidence can be
seen as an effective tool for being competitive, under such circumstances Kotler (1973).
The term servicescape was popularized by Bitner (1992) whose contribution and
conclusion made servicescape an ever-increasing subject of interest for many other
researchers and practitioners. He also argued that servicescape is very helpful for
positioning, segmenting and overall differentiating a particular company from its core
competitors. Generally, servicescape can be defined as: ‘the built environment
surrounding the service that plays a critical role in shaping customer expectations,
differentiating service firms, facilitating customer and employee goals, and influencing
the nature of customer experiences’. Marketers within any kind of an industry who seek
57
not only to keep on being competitive, but also raise revenue are in fact able to
incorporate servicescape into their marketing plans. We will now move into specifying
four main roles of servicescape and have a deeper look onto its elements.

Baker (1987) recognizes that people or ‘human component’ to be part of the physical
environment that will affect one's perception of a firm. These three firms must their
employees to look nicely dressed with uniforms, clean, smell nicely, friendly smile, and
welcoming gesture. Kubacki (2007) believes that security is also one of the elements for
high-class people who prefer to have a sense of security when entering premises. These
three firms place male security guards in front of main entrances. The security guards act
as simple welcoming committee who welcome and greet customers. This gives feeling of
security in doing transaction within the guarded area.

According to Lin (2004), auditory cues can be categorized into two parts - music and
non-musical sound. Hui et al. (1997) believes that music is an effective tool to enhance
positive feeling toward the premise and when waiting in any service operation. LV is
playing slow tempo instrumental music that many researchers found to help shaping the
mood and emotion of the patrons (Hui et al. 1997). Also, this type of music is seen by
most people as high-class and prestigious.
According to Dube& Morin (1999), music also can help employees to feel more relax
and enjoy their working. Also, the often music as servicescape is chosen by employees'
or managers' personal preference type of music (Dube& Morin 1999). In most cases,
wrong type of music will deliver wrong kind of atmosphere that will have negative
effects on customers and other employees.

Spatial Layout / FunctionalitySpatial Layout refers to the seamless layout of furnishing

to achieve maximum productivity in the most efficient and effective manners.
Functionality refers to the items to provide better service and higher productivity to
customers (Barker 1968) (Wicker 1984) (Fox & Bender 1986)McCormick (1976)
suggested three principles in spatial layout arrangement: features that frequently used
should be strategically placed to where the equipments can be used optimally;
equipments that have interrelated activities should be clustered together; and
environmental features that might interfere or disturb another activities should be placed
in different place.
58
Marketing Strategies for Banks and Financial Service Providers to Beat Competitors

Ready to get ahead of your competitors? It’s time to get creative and personal with your
marketing. It’s time to give your customers an experience they enjoy and simply have to
share with their friends.

1. The experience: Small businesses often have the upper hand when it comes to experience.
They know their customers, know their preferences, and build relationships with them. But,
any bank or financial institution can do this, and it starts by making a company-wide
initiative to put the customer first, to train employees to look at each account, each face, as a
relationship. This initiative becomes a marketing campaign – a customer experience
strategy – when customers love interacting with your bank or financial institution, albeit
physically and digitally, and tell their friends about it.

2. Be social: Find out which social media platform is popular in your area and join. This is
the place to share pictures of your employees, show off PR opportunities in your area, tips to
make the right financial decisions and get local support.

3. Teach: There are several ways you can help your customers. Send an email when your
partners are offering special incentives or low rates. People want to hear about the news that
matters to them, and you can be at the forefront of this by keeping their financial well-being
at the top of your list of priorities.

4. Get involved: Work with nonprofits that need support. This could be through schools and
universities, animal rescues and shelters, sports teams or support groups. Many non-profits
run fundraisers where they give you the opportunity to pay for marketing exposure by
supporting their cause. This is what is often called “cause marketing.”

5. Approach new markets: One way to stay ahead of the competition is to pursue markets
they aren’t pursuing. Every bank or financial institution has particular groups of customers
they serve extremely well. Know what groups these are for yourself and your competitors,
once you’ve perfected your approach in one area, seek a new cohort to help. These groups

59
don’t need to be huge to make a big impact on your business; you just have to offer the best
solution.

6. Rebrand to be hipper, younger and modern: If your website or app looks like it is fresh
out of the 90’s, it’s time to rebrand. Choose a new message that puts the needs of your
customer at the forefront of your campaign and redesign. By showing your focus on a modern
approach, you’ll give customers another reason to learn more about your company.

7. Compete with competitors online: If your competitors have a strong local presence,
compete with them online. Use digital marketing practices like SEO, PPC, social media and
email marketing to be the prominent option.

8. Offer features no one else has: Technology is always changing. Today you can buy new
equipment that makes it easier for your customers to handle their financial transactions, you
can build online tools that meet their needs and make their lives easier. Adopt the
opportunities that technology presents and create a marketing campaign out of it.

9. Get business partners: There are companies you can work with who offer related
services. Hospitals are closest to newborn babies; perhaps they wouldn’t mind a marketing
advertisement about your family investment opportunities. Realtors regularly work with
banks and home inspectors. Reach out to others in your industry and build a new stream of
leads. Cooperative marketing is a powerful but often under-utilized marketing strategy.

10. Fill in their marketing holes: No one is perfect in every aspect of their
marketing. Identify where your competitors’ holes are and fill them with your company. Over
time you will grow and notice more opportunities to improve.

There are infinite ways to get your bank or financial institution to stand out. Today, many of
the most successful campaigns are based on being different, creative and giving customers
what they want.

60
CHAPTER 2
REVIEW OF
LITERATURE

61
 LITERATURE REVIEW
A literature review is a description of the literature relevant to a particular field or topic.
It gives an overview of what has been said, who the key writers are, what are the
prevailing theories and hypotheses, what questions are being asked, and what methods
and methodologies are appropriate and useful.

A literature review uses as its database reports of primary or original philosophy and
does not report new primary philosophy itself. The types of philosophy may be
empirical, theoretical, critical analytic and methodological in nature. A literature review
also seeks to describe, summarize, evaluate, clarify and integrate the content of primary
reports Cooper H. M. (1988).

TeareMoutinho& Morgan (1990).Sankaran M (1999) studied the measures that would

help domestic players in Banking services sector to improve their competitive efficiency,
and thereby to reduce the transaction costs. The study found that the specific set of
sources of sustainable competitive advantage relevant for Banking Service Industry are
product and process innovations, brand equity, positive influences of 'Communication
Goods’, corporate culture, experience effects, scale effects, and information technology.

According to Baker (2003) the growth in the service sector has become more competitive
which transformed the management and marketing activities within the sector. The focus
is increasingly on appropriate, well-researched and even aggressive marketing to ensure
service firms‟ survival in the face of fierce competition.

62
Kotler et al. (2010) indicate that a service is any activity or benefit that one party can
offer to another that is essentially intangible and does not result in the ownership of
anything.

Boshoff and Du Plessis (2009) have also indicated that services are essentially intangible
but are value offerings providing various things such as convenience, amusement,
entertainment, comfort and health. Therefore, the activities performed by banks for their
customers, such as the provision of loans and saving facilities can be classified as
services.

Daniel Carol (1970) has suggested ‘Ten commandments for bank marketing has framed
a set of Ten Commandments for bank marketing According to him inclusion of
marketing functions within the marketing participation in key banking decisions, product
orientation, learning curve of chief marketing executives, quality of marketing personnel,
development of a record of accomplishment and use of outside services etc. are the main
commandments for successful bank marketing.

The Narsimham Committee (1991) which covered the whole gamut of the Indian
banking sector has also emphasized the need to improve service to the customers.
Simultaneously, besides the pressure of having to work efficiently, the banks are being
subjected to pressures in such matters as prudential norms and transparency.

According to Dixit V.C. (2004) bank marketing is defined as an aggregate of functions

directed at providing services to satisfy customers’ Banking needs and wants, more
effectively than the competition, keeping in view the organizational objectives of the
bank.

While according to Seshaiah&Narender (2007) and Ezirim (2005) overall quality of

banking for customer is most important. They found that people choose a bank based on
some characteristics as safety of deposits, size of bank , accuracy of the process, general
service quality, speed of delivery, proximity from their place, secured environment,
cordial staff, genuine price and service charges, product packaging, general public
impression, peer group impression, friendship with staff, advertisement and publicity etc.

63
Chidambram R. M and Alamelu (1994) in their study emphasized that he problem of
declining profit margins in the Indian Public Sector Banks as compared to their private sector
counterparts. It was observed that in spite of similar social obligations almost all the private
sector banks have been registering both high profits and high growth rate with respect to
deposits, advances and reserves as compared to the public sector banks.

Adedeji and AbosedeOlufunmilago (1998) conducted the study was concerned with the
bank engages in extensive marketing strategies and the most widely acknowledged
marketing strategy employed by the bank was promotion while price was the least
competitive. The bank has committed a lot of human, material and Banking resources to
marketing strategies.
According Gummesson (2008) marketing in services has now extended into relationship
marketing. Thus, the focus is on relationship marketing within the services marketing
scope has become a priority for firms.

TokunboSimbowale (2005) examined the usage of marketing concepts & techniques and
recommended that a well-structured marketing department and best marketing mix and
effective marketing Strategy in banks is essential for profitability & effectiveness.

According to Dhanabhakyam and Kavitha (2012) banks play an important role in the
economic development of every nation. They have control over a large part of the supply of
money in circulation. Through their influence over the volume of bank money, they can
influence in nature and character of production in any country. Economic development is a
dynamic and continuous process.

Sharma and Mehta (2004) have investigated that only little attention has been paid to the
role of gender bias in measurement of service quality of banks. Service quality has been
found to be important to women than to men when transacting business with a bank
suggested by Staffird (1996). He also suggested that these differences result from the
personality associated with gender. People behave differently while availing services of
banks according to their gender.

64
 CHAPTER 3
OBJECTIVES
RESEARCH
MEHODOLOGY/LI
MITATIONS

65
 OBJECTIVES OF STUDY

 To study the marketing strategies of banking services

 Customer satisfaction with the service provided by the bank.
 Compare the strategies of OBC and ICICI

66
 RESEARCH METHEDOLOGY

TYPE OF RESEARCH

Research is one of the most important parts of any study and pertains to the collection of
information and knowledge. Marketing research is defined as the systematic design,
collection, analysis, and reporting of data and findings relevant to a specific marketing
situation facing the company. My project has been developed on has basis of both
exploratory and descriptive research. The research process depends upon developing the
most efficient plan for gathering the needed information. Designing a research plan calls fro
decisions on the data sources, research approaches, research instruments, sampling paln, and
contact methods.

SAMPLE SIZE AND METHOD OF SELECTING SAMPLE

I chose a sample size of 100 respondents consisting of based on judgment sampling All
respondents were the customers of ICICI and OBC. The method was simple random
sampling.

Data Source

For this project both primary and secondary data were valuable sources of information.

Secondary data

Secondary data provides a starting point for any research and offers valuable sources of
already existing information. Secondary data are the easiest to gather and the cost of
collecting this data is also very low. For my project work it was collected through the help of
various directories of various associations, magazines, newspapers, websites etc. The
directories helped me in short lisitng people, for my target people.

Some of the directories made use of are as follows:

 Telephone directory

67
  Income tax office
 City directory
 Chartered accountant directory
 Carpet industries directory
 Indian medical association directory
 Transporter directory
 Lawyers directory
 Builders & constructors directories

Primary data

Primary data are data freshly gathered for a specific purpose. For my project work the
primary data was collected by means of survey though questionnaires.

Contact methods

Once the client had been decided now my task was how to contact them, and for me there
only two ways of contacting them.

1. Personal interview:-this method was the most appropriate way of survey,

because by personal interview I came to know about their feeling for Axis
Bank.
2. Telephone:-This method was also used by me once or twice, keeping in mind
the busy schedule of a few respondents.

68
 LIMITATIONS OF STUDY

 The study was based on a very modest sample size hence cannot be called as a
representation of the views and opinion of the majority.
 In a rapidly changing industry, analysis on one day or in one segment can change very
quickly. The environmental changes are vital to be considered in order to assimilate the
findings.
 The conclusion arrived at are based on a very less experience of researcher in this field.

69
 CHAPTER 4
DATA ANALYSIS
SUMMARY AND
CONCLUSIONS

70
 DATA ANALYSIS & INTERPRETATION

Which attribute of the bank do you value the most?

Quality of service 63

Technology used 37

70

60

50

40

30

20

10

0
Quality of Service Technology Used

71
Most of the respondents 63% says quality of services is best way whereas 37% says
technology used by the banks are important for the banking services

72
Which factor Promotes you to use the new techniques in banking?

Easy of use 69

Cost effectiveness 31

70

60

50

40

30

20

10

0
easy of Use Cost Effectivenes

69% respondents says that easy of use is the main factor Promotes you to use the new
techniques in banking whereas 31% says cost effectiveness is Promotes you to use the new
techniques in banking

73
How familiar are you with computer usage level of your bank?

Beginner 44

Expert 56

60

50

40

30

20

10

0
Beginers Expert

In Familiar are you with computer usage level of your bank, 44% are beginners and 56% are
expert.

74
Which Level of usage of technology?

ATM service 54

E-payment 46

54

52

50

48

46

44

42
ATM Service E-payment

54% respondents says there level use of technology is ATM services whereas 46% says that
e-payment is their level.

75
ATM service satisfaction on Technology usage?

Satisfied 22

Neutral 65

Dissatisfied 13

satisfied
neutral
dissatisfied

The level of respondents view about above said statement is 22% are satisfied, 65% are
neutral and 13% are dissatisfied

76
Internet banking service satisfaction on Technology usage?

Satisfied 32

Neutral 40

Dissatisfied 28

satisfied
neutral
dissatisfied

The level of respondents view about above said statement is 32% are satisfied, 40% are
neutral and 28% are dissatisfied

77
Mobile banking service satisfaction on Technology usage?

Satisfied 38

Neutral 25

Dissatisfied 37

satisfied
neutral
dissatisfied

The level of respondents view about above said statement is 38% are satisfied, 25% are
neutral and 37% are dissatisfied

78
ATM problem of Technology usage?

Often 11

Rarely 43

Never 46

often
rare
never

The level of respondents view about the problems indication is 11% says often faced, 43%
says rarely and 46% saysnever

79
Internet banking problem of Technology usage?

Often 24

Rarely 61

Never 15

often
rare
never

The level of respondents view about the problems indication is 24% says often faced, 61%
says rarely and 15% says never

80
Mobile banking problem of Technology usage?

Often 10

Rarely 74

Never 16

often
rare
never

The level of respondents view about the problems indication is 10% says often faced, 74%
says rarely and 16% says never

81
Bank has up-to-date equipment & Technology?

Satisfied 38

Neutral 25

Dissatisfied 37

satisfied
neutral
dissatisfied

82
Are you preferLocation of the bank?

Satisfied 38

Neutral 40

Dissatisfied 22

satisfied
neutral
dissatisfied

The level of respondents view about above said statement is 38% are satisfied, 40% are
neutral and 22% are dissatisfied

83
Sufficient number of ATM machines?

Satisfied 32

Neutral 40

Dissatisfied 28

satisfied
neutral
dissatisfied

The level of respondents view about above said statement is 32% are satisfied, 40% are
neutral and 28% are dissatisfied

84
Guide signs indicating as to which counters are?

Satisfied 22

Neutral 65

Dissatisfied 13

satisfied
neutral
dissatisfied

The level of respondents view about above said statement is 22% are satisfied, 65% are
neutral and 13% are dissatisfied

85
 Findings

 When compared to the male, female were using a few of banking services. This is just
because female are entering into the corporate environment only in the recent past.
 Most of the respondents are young and unmarried as they have entered into the field
immediately after their formal education.
 Majority of the respondents are having higher education background (Post graduate or
graduate). This infers that there is a strong correlation between the education and banking
operations.
 The average income level of the respondents is below 5 lakhs rupees implying that most
of the respondents belong to either lower middle income group or upper middle income
group.
 The profession of the respondents conveys the need for their banking services and the
study identified that most of the respondents are preferring e-banking which includes
internet banking, ATMs, tele banking etc.
 Age of the respondents conveys the attitudes towards the service quality, from the study it
concluded that most of the respondents are young and they have high expectation from
the banks regarding the services quality offered by them.
 In the present day scenario private banks are facing tough competition from the
nationalized banks and they are forced offer better service to attract the customers. From
the study it was inferred that most the respondents hold accounts with private banks rather
than nationalized banks as they are providing better services.
 The mean and standard deviation of the 30 variables indicates that the responses of the
respondents are closely related to each other. From the correlation matrix, it can be
inferred that the data in the dataset are fairly related to each other and none of
thecorrelation coefficient is particularly large thus there is no need to eliminate any
variable for conducting further analysis.
 When factor analysis is used to analyze the data, 30 variables were reduced to 6 factors.
These six factors were named as Empathy, Responsiveness, Tangibles, Trust, Online
Banking and Enabling. The eigen values and total variance explained were obtained from
this. When the data reduced to six factors they were explained a total variance of 61.9%.

86
 To test the internally consistency of the factors, cronbach’s coefficient alpha reliabilities
were calculated and it is proved that the factors are consistent internally which proves that
the items within the factors are homogenous and consistent internally.

87
 CONCLUSION

 Banking is considered as an essential facility to promote business operations in any

economy. In the present scenario, banks play a vital and active role for the economic
development of any country by mobilizing the funds and allocating to the needy
(entrepreneurs). Banks ensure stable economy, fair distribution of income, risk sharing,
facilitates production and business activities. Within the broad system of banking retail
banking is the key area. Retail banking is a fast emerging sector of the overall banking
industry which has witnessed enormous growth in the recent past. Retail banking is a
multi product and the commercial banks deal with individual customers. Retail lending
across the globe has been a set of innovation in the commercial banking sector.
Developing countries like India and china have emerged as potential markets with
massive investment opportunities. In the emerging countries like India, the growth of
retail banking is attributable to the fast growth of personal wealth, demographic profile,
advancement in information technology, encountering macro- economic environment,
financial market reforms and many micro-level supply side factors etc.
 Over the last three decades, globally retail lending has been a spectacular innovation in
the commercial banking sector. The increase in the growth of business in retail banking
depends upon the economy and purchasing power of the consumers. The growth of retail
lending in emerging economies is also linked to updating in information technology, the
evolving macroeconomic environment, financial market reforms, and several micro-level
demand and supply side factors.
 India is one of the countries experiencing the retail banking. Retail loan is estimated to
have accounted for nearly one-fifth of all bank credit. Based on the economic benefit to
the clients in form of income tax rebate there has been a boom in housing sector. The
trend of market has changed and it has reversed from a sellers’ market to a buyers’
market. Gone are the days where getting a retail loan was very difficult and most of the
banks have credit liquidity problems. All these emphasize the momentum that retail
banking is experiencing in the Indian economy in recent years.
 Retail banking is, however, quite broad in nature - it refers to the dealing of commercial
banks with individual customers for all types of products of liabilities and assets. In case
of liabilities they include Fixed, current / savings accounts on the liabilities side; and
mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side. The

88
 additional products and related ancillary services include credit cards, or depository
services.
 While discussing about industrialization and retail banking it becomes obvious that there
are certain tension between the industrialization and retail banking. In both cases there is
a great difference in market level, structure and products. However, in both the cases the
expectations of the customers regarding service quality remains the same. There is great
difference in value addition in case of big industries and retail banking. Retail banking
customers expect more attention as their products are virtually as compared to the
physical products of the manufacturing industries. The desirability of the retail banking
products is perceived mainly by the quality of service as perceived by the customer and
also in the form of price of the product.
 In the globalized economy, banks are focusing on customer satisfaction and beyond.
Customer satisfaction is the outcome felt by customers who have experienced bank
performance that has fulfilled their expectations. A widely used method of assessing
customer satisfaction is through the assessment of service quality perception of the
customers.

89
 RECOMMENDATION & SUGGESTIONS

 In the globalised era, developing country like India needs to bring changes in their
banking system by allowing the bankers to adopt innovative policies such that they
can easily compete with the multinational bankers.
 Due to an interactive nature of employee-customer relationship, including input from
employees on what constitutes “service excellence” will be beneficial. The bank also
need to reassess “what customers expect from the bank” and provide client specific
services
 It needs to invest on employee training programs that will provide employees with an
understanding of service culture and service excellence-particularly at front line
levels.
 Employee training programs should focus on interpersonal communication and
customer care factors in order to be able to meet the customers’ need for personalized
service. Employees interacting with customers in a customer centric manner will be
able to provide their service with empathy will be able to promptly recover service
failures and also ensures the service delivered is consistent with the service promised.
This will help to build profitable customer relationship which in turn results in high
customer satisfaction and retention, extend the zone of customer tolerance for service
failures, increase recommendations about the bank to others and increase customer
loyalty.
 Banks are now required to consider new ways to drive revenue through their
distribution system.The most common way to classify this is through the drive to
increase the customer share of wallet. The share of wallet is the portion of a
customer’s entire financial relationship that any particular bank has with the customer.
 The more products that a customer has with the bank, the cheaper it is to serve them
per product, and the more difficult it would be for the customer to switch to another
bank. Thus the bankers should try to provide more products to the customers.
 By collaborating with hardware, software, telecommunications and other companies,
banks are introducing new ways for consumers to access their account balances,
transfer funds, pay bills, and buy goods and services without using cash, mailing a
check, or leaving home.

90
91
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 QUESTIONNAIRE
Which attribute of the bank do you value the most?

A-Quality of service

B-Technology used

Which factor Promotes you to use the new techniques in banking?

A-Easy of use

B-Cost effectiveness

How familiar are you with computer usage level of your bank?

A-Beginner

B-Expert

Level of usage of technology?

A- ATM service

B-E-payment

ATM service satisfaction on Technology usage?

A-Satisfied

B-Neutral

C-Dissatisfied

Internet banking service satisfaction on Technology usage?

94
A-Satisfied

B-Neutral

C-Dissatisfied

Mobile banking service satisfaction on Technology usage?

A-Satisfied

B-Neutral

C-Dissatisfied

ATM problem of Technology usage?

A-Often

B-Rarely

C-Never

Internet banking problem of Technology usage?

A-Often

B-Rarely

C-Never

Mobile banking problem of Technology usage?

A-Often

B-Rarely

C-Never

95
Bank has up-to-date equipment & Technology?

A-Satisfied

B-Neutral

C-Dissatisfied

Location of the bank?

A-Satisfied

B-Neutral

C-Dissatisfied

Sufficient number of ATM machines?

A-Satisfied

B-Neutral

C-Dissatisfied

The employees approach?

A-Satisfied

B-Neutral

C-Dissatisfied

Guide signs indicating as to which counters are?

A-Satisfied

B-Neutral

96
C-Dissatisfied

97