Kathmandu University School of Management Kathmandu College of Management

Internship Report Title of the project: A Study on the need of market segmentation and targeting at Nepal Bank Limited

As part of the requirement for BBA/BBIS programme Internship Programme Code: RIS 401

Internship Employer Himalayan Bank Limited

Interns Anup Basnet, KU Redg No: A009187-08 Sambeed Regmi, KU Redg No: A009233-08

June, 2012

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SIGNATURE PAGE I/We certify that I/we have read the document and, in my/our opinion, it is satisfactory in scope and quality as a project in the partial fulfillment for the undergraduate course of ‘Internship’ held at the Kathmandu College of Management during the Fourth Year Second Semester, 2011.

Date: June 2011 _______________________ Project Evaluator Kathmandu University School of Management

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DISCLAIMER The authors are confident that the result presented in this report will be taken as guidance for a more comprehensive study at the future date. The authors of the report are not responsible or liable legally or by any other means against the results of the report. Any consequent decision based on this report shall not make the authors responsible. The views expressed in this report are as per the findings and research undertaken. These do not reflect the single rule of thumb nor are these endorsed by the college.

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It has not been submitted to any other university or any other examinations.DECLARATION We. the undersigned declare that this project entitled is a result of our own study/research carried out in the year 2011. Signature: ______________ Bhawana Khanal Batch 2007-11 Kathmandu College of Management Reg No: A008035-07 _____________ Sumira Shrestha Batch 2007-11 Kathmandu College of Management Reg No: A008077-07 ACKNOWLEDGEMENT 4 .

We are much indebted to our internship co-coordinator Mr. who guided us throughout the project and helped us to complete the project in time. supporting us throughput the internship period and helping us to learn so many things. openness. Dillibazar for their invaluable assistance.This report and project work would have not been successful without help of so many people. We would like to express our sincere gratitude to all of those helping hands. We would also like to thank Mr. We also express our heartfelt gratitude to all the members of NBL. Gyanendra Bikram Karki (deputy manager/work supervisor) of Dillibazar branch for believing in us and giving us responsibilities. Biswo Raj Kandel branch manager and Mr. Foremost we would like to thank KUSOM and KCM for providing this opportunity to do internship. principle of KCM for giving us moral support and boosting up our confidence all the time. Bishnu Raj Adhikari. Also we extend heartfelt thanks to Nepal Bank Limited family for giving us this opportunity to be a part of their family and guiding us throughout the internship. We would also like to thank Mr. EXECUTIVE SUMMARY 5 . cooperation. Lakpa Gelu Sherpa.

A major part of the report consists of the project undertaken during our internship. Nepal Bank Limited was inaugurated by His Majesty King Tribhuwan. The segments were 6 . We prepared a questionnaire. We have presented our goals and objectives for the internship so that we would have a map of how we are going to achieve those objectives during the entire internship period. NBL is one of the pioneers in Nepalese banking history and it has a very wide network of branches across Nepal. Scrutinizing various schemes and interest rates of deposit and loan provided by the bank and informed customers who inquired about the schemes. In the second part of this report. statements and open or close accounts and so on. It was established 1937 which marked the beginning of an era of formal banking in Nepal. Preparing debit vouchers for Tribhuwan University pension and recorded the pension disbursement. The first part is related to the background of the internship which is described in terms of the opportunities and experiences and the reasons for choosing the specified bank which is NBL. income and occupation. age. and their views regarding services provided by banks. our research was directed towards importance of market segmentation and targeting for effective marketing of banking services. direct personal interviews and telephone interviews with the bank’s customers. in our case. Printing. issuing and recording the issue of checkbooks and printed statements for customers. The existing and potential customers are divided into four segments on the basis of gender. The purpose of our research was to help NBL identify profitable market segments and to target them with appropriate marketing strategies. We were engaged in different departments during the internship and performed various jobs such as helping customers in account opening and closing and also filling up the forms for customers who had difficulty in reading and writing. It is certified ‘A’ grade financial institution by NRB. preferences.Nepal Bank Limited is the oldest commercial bank of Nepal. Operated Newton software to solve customers’ inquiries. and we also analyzed secondary data available regarding the bank and we also conducted interviews with bank’s customers to know more about the customer attitude. print checkbooks. a brief introduction of banking industry in Nepal and Nepal Bank Limited is given. This internship report is divided into four parts. Basically. We also conducted unstructured.

So. we conducted a survey focused on segmentation and targeting the market. customers use all the services of banks and providing higher quality service along with value addition will help in promoting the brand name as well as capturing larger market share. developing interactive website. developing internet based services and putting up advertisement and promotion materials on internet according to the preference of the target segment. NBL must design innovative services and customize the services to match the needs of various segments. In order to study the profitable segments and position the services to reach these segments. during our internship. NBL should 7 . customizing the services for various segments helps generate maximum value from the market. The questions were focused on the preference of various services and service attributes. by different segments. Special accounts for senior citizens and children help in differentiating the services. Market should be segmented into appropriate target groups according to demographics or psychographics. The survey consisted of questions regarding the preferences of customers towards services quality. contribution to corporate social responsibility helps to cast positive image on customers and build brand equity.identified by observing the actual customers in the bank. appealing attributes of service schemes. NBL providing flexibility in its service hours and procedures according to the need of people belonging to various occupation groups is important. Developing innovative marketing strategies backed by strong products and services succeed in capturing customer value and large share of market. preference of communication media for receiving information about bank’s new services. attributes like ambience. Similarly. Similarly. Quality in delivery of core services is very important. NBL must put more effort on increasing its ATMs. More and more people are switching to internet based services and online banking. and then bank should target each segment by building appropriate marketing strategies. Similarly. nevertheless. fast service and convenience should not be ignored The major finding of the survey is that appropriate market segmenting and targeting is very important for effective marketing of services and enhancing of brand equity. time preference by customers of different segments and new services preferred by various groups. Corporate social responsibility and higher interest rates have similar appeals amongst the customers. Therefore. The survey established that.

to the right customers. at the right time. Comparison of interest rates and profitability……………………………21 8 . List of products of NBL…………………………………………………. LIST OF TABLES 1.10 2.focus on effective segmentation and targeting by launching the right products.

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37 7. Preferred time of customers on the basis of occupation for doing banking transactions………………………………………………………………………36 6.LIST OF FIGURES 1.38 8. Factors considered by customers while transacting with bank…………………. Preference of communication media by various age groups……………………..39 10 . What customers liked about recently visited bank…………………………….... Preference of new service by different age groups…………………………….32 2. Preference of new services by different occupation segments………………….34 4...35 5. Importance given by customers to corporate social responsibility………………33 3. Preference of communication media on the basis of occupation……………….

Weaknesses. Threats Board of Directors Corporate Social Responsibility Statutory Liquidity Requirement Cash Reserve Ratio Chief Executive Officer Board of Directors Himalayan Bank Limited Nepal Investment Bank Limited Rastriya Banijya Bank 11 . Economic.LIST OF ACRONYMS KCM: BBA: NBL: NRB: KUSOM: ABBS: PEST: SWOT: BOD: CSR: SLR: CRR: CEO: BOD: HBL NIBL: RBB: Kathmandu College of Management Bachelor in Business Administration Nepal Bank Limited Nepal Rastriya Bank Kathmandu University School of Management Any Branch Banking System Political-legal. Socio-cultural. and Technology Strength. Opportunities.

Jobs of intern’s supervisors 1 2 3 6 12 . Background 2. Jobs performed in the internship 4. Objectives of internship 3.ATM: IT: HRM: Automated Teller Machine Information technology Human Resource Management Declaration Recommendation letter from employer Recommendation letter from college supervisor Acknowledgement Executive summary Table of contents List of tables List of figures TABLE OF CONTENTS Contents Part one Page INTRODUCTION 1.

Organizational structure 2. Vision/Mission/Values and objectives b.Part Two INTRODUCTION OF COMPANY 1. Introduction of the project 2. Introduction of Nepal Bank Limited a. Major Products/product lines d. Organizational Strategies c. Methodology/ procedures 28 Section IV: Presentation and Analysis 31 13 . Review of related literature 25 Section III: Methodology 1. Scope and limitations 22 23 23 Section II: Conceptual Framework 1. Analysis of the organization’s general and competitive environment 10 14 15 8 8 9 Part Three PRESENTATION OF THE PROJECT A study on the need of market segmentation and targeting at Nepal Bank Limited Section I: Introduction 1. Objectives 3.

Section V: Conclusions 1. Project specific conclusion and suggestions 42 Part four REFLECTION OF INTERNSHIP References Appendixes 43 45 14 .

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Internship program helps students in developing practical approach and professionalism toward work and improving business relations. into real work environment. We also conducted a study on the need of market segmentation and targeting at Nepal Bank Limited. remittance department. For our internship. During the internship period we were placed in customer service desk. Nepal Bank Limited is one of the pioneers in Nepali Banking Industry. We chose NBL to accomplish our internship so that we could learn the basics of banking and understand the challenges and opportunities faced by a typical Nepali bank. It has the widest networking all over Nepal and provides wide range of services. Dillibazar. The internship program provides students with an excellent opportunity to apply the knowledge gained in the classroom lectures. Background This report is prepared in the partial fulfillment of the undergraduate program of Kathmandu University School of Management. This research was very important to the bank and it was also an interesting subject matter for us because it was related to theories we learnt in classroom lectures. we choose Nepal Bank Limited. We gained knowledge and experience about the functioning and organization of various departments and the role of each department in the overall functioning of the bank. The students of Bachelors of Business Administration (BBA) are required to undergo internship program for a period of eight weeks. income groups to identify the profitable segments in the market and target them appropriately. credit department. It also builds up confidence in the students so as to prepare them for the challenge of the corporate world. during the eighth semester.PART ONE INTRODUCTION 1. . It has been providing banking services to all segments of people and organizations. We surveyed the customers of various age groups. teller and administration.

Working in one of oldest banks of Nepal. Internship Program provided the interns with an excellent opportunity to learn the work in the field of interest. Since we intend to work for contributing to Nepali Banking Industry. The internship program’s main objective is to develop a very good platform to develop our skills. . regarding it as an opportunity to get acquainted with real work environment. operations and management of banking system. Goals for internship • To complete internship program. To make practical use of classroom learning in solving real world problems. confidence and prepare us for the challenge Internship program provided interns with an opportunity to learn practical aspects of Nepali Banking industry. Nepal Bank Limited. • To get acquainted with the corporate culture in banks of Nepal and explore the challenges and opportunities • • • • • • To explore the career opportunities. in Banking. To increase personal relations with people in the industry. Kathmandu University is basically designed for students to gain practical knowledge and real life experience. • To observe and learn the functioning.2. we had to gain acquaintance with the industry. To develop interpersonal and communication skills. Objectives of Internship Internship program for Bachelors of Business Management. it is quite difficult to enter the job market without experiences. helped in gaining knowledge about the basics of contemporary banking. the corporate culture and the nature of work. To enhance decision making skills and ability to work in teams. As fresh graduates. To develop personality and build a professional attitude towards work.

The customer service department basically seeks to help customers with their problems and queries. We also invested some of our time in marketing the products of the bank.3. They explained the tasks performed at the help desk and acquainted us with the relationship between the tasks performed at the help desk and that of other departments. Remittance Department. Credit Department and Administration Department. We were given knowledge of NBL culture. Teller. • Helped customers in account opening and closing and also filling up the forms for customers who had difficulty in reading and writing. Bishow Raj Kandel who explained us our duties and responsibilities in the organization throughout our internship. We had a brief meeting with the branch manager Mr. Jobs performed in the internship During our two months period of internship in Nepal Bank Limited we were placed in all the departments of the branch. We worked in the Customer Service Department. operations/functions. . We started our work from customer services by performing the following jobs: • The supportive members of customer services briefed us about the functioning of the customer services and the whole bank. Customer Service Department The customer service department is the department where the customers make first contact with the bank. On the first day we were given a brief orientation of the organization and we were introduced to the members of the bank.

• Teller Helped in filing the vouchers and other records. like authorized signature.• Prepare interest expense voucher. I performed the following jobs in this department: • Observed the process of deposit and withdrawal process. statements and open or close accounts. • Observed the process of clearing. issued and recorded the issue of checkbooks and printed statements for customers. and voucher for service charge taken. Teller is the place where the cash deposits are received and credited to respective accounts and cash payments are made against checks and respective accounts are debited. endorsements and common seal. • Prepared debit vouchers for Tribhuwan University pension and recorded the pension disbursement. • Operated Newton software to solve customers’ inquiries. Checking the requirements for processing any transaction. • Scrutinized various schemes and interest rates of deposit and loan provided by the bank and informed customers who inquired about the schemes. • Printed. Remittance Department . ABBS transactions and entering the transactions in the software. tax paid voucher. • • Identifying discrepancies (if any) in the checks. print checkbooks.

Entered the OBC vouchers in OBC ledger. stamped the out bills and entered them in excel sheet format prepared by the remittance department. Administration Department .Remittance Department at Nepal Bank Limited is the department which sends and receives money from various parts of the world and from those branches of NBL which does not have ABBS facility. Recording and preparing vouchers for remittance. drafts and out bills. • Helped in loan sanction process. • • • Helped customers in filling up receipts for sending and receiving remittances. • Entered transactions like renewal of loan. • • • Assisted in the clearing process. Support employees in maintaining other records Prepared voucher for commission charged in sending money to branches not having ABBS facility Credit Department Credit department is that section of bank which provides various types of credit to individuals and organizations to generate interest income to the bank. new loan and closing of loan accounts in the Newton software. closing and renewal of the loan accounts • Went through credit manual of NBL to get basic knowledge of various types of credit provided by NBL and the detail guidelines to process credit to customers. In the credit department we performed the following jobs: • Prepared vouchers for interest income received.

is the operation head of the branch office. We performed the following jobs in administration department: • Observed how salary sheets are prepared. preparing salary of employees. . He is also the work supervisor of the interns. Gyanendra Bikram Karki. passed and recorded. correspondence. serving their problems. preparing budget and so on. studied how all other expenses and revenue accounts are recorded. and responding to their queries. Customer Service Department At the customer service desk. the department heads had the following responsibilities: • Catering to the clients’ needs. the deputy manager. Role of Intern’s Supervisors At NBL. inventory management and other administration activities. maintaining books of assets. He is responsible for assigning work and duties to the interns and evaluating performance. rechecked and passed. Similarly.Administration department is responsible for the recording of all the transactions daily. 4. He supervises all the work in the office except credit He verifies the transactions of the bank and approves important decisions as. • Studied the procedure for tax preparation to report to head office and Nepal Rastra Bank • Learnt the formal procedures of correspondence and communication with the head office and other branches. • Learned the basic functions of administration department such as writing off depreciation.

• Payment of salary. • Clearing function Teller At the teller. opening accounts. Administration At the administration department. • Maintaining accounts of assets. the department heads had the following responsibilities: • Receiving deposits and making cash payments to customers. pension and preparing pension lists. • Preparing estimated budget to report to the head office • Preparing quarterly reports and sending it to NRB. the department heads had the following responsibilities: • Transferring money to various other branches of NBL and receiving money from abroad as well as from other branches of NBL. managing inventory. filing and recording and carrying out various other transactions. the department heads had the following responsibilities: • Passing salary accounts and all other expenses and revenue accounts.• Printing statements. • Disbursement of pensions and providing ATM cards. • Financial statements and tax reporting. Remittance Department At the remittance department. Credit Department . issuing checks. • Fund management.

• Evaluation and assessment of collateral. giving loans and doing commercial . • Opening.At the credit department. renewal and closing of loan accounts. • Dealing with clients and maintain valuable customer relationship. the department heads had the following responsibilities: • Loan appraisal. PART TWO INTRODUCTION OF INDUSTRY AND COMPANY Commercial Bank Act 1974 defines a commercial bank: ' A commercial bank means bank which deals in exchanging currency. accepting deposit.

NBL was inaugurated by His Majesty King Tribhuwan. employees are paid . Nepal Bank Limited came into existence under the Nepal Bank Act 1937. It will be a sound institution where depositors continue to have faith in the security of their funds and receive reasonable returns. There is very high competition because most of the banks and financial institutions are concentrated in urban sectors only. There are lots of untapped areas where banks can excel it and at the same time attract more and more people to the banking services. Values and Objectives of Nepal Bank Limited Vision: To remain the leading financial institution of the country Mission: Nepal Bank Limited seeks to provide an environment within which the bank can bring unique financial value and services to all customers.' Prior to the establishment of Nepal Bank Limited. a. other service. With the cooperation of Imperial Bank of India. The bank is also one of the largest in Nepal with 110 branches in the 55 districts of the country. Among various service sector banking is the most growing sector in case of Nepal. Mission. There are 31 commercial banks. Vision. The age of formal commercial bank. 1956 it carried all the functions of a central bank. Nepal Bank Limited was established in 1937.seekers receive prompt and attentive service at reasonable cost. 1. who charged very high interest rates and added other dues. people relied on borrowings from the corrupt moneylenders.transactions. but only a small percent of people are covered by banking services. Introduction of Nepal Bank Limited Nepal Bank Limited is one of the oldest commercial bank in Nepal. borrowers are assured of appropriate credit facilities at reasonable prices. Nepal Bank played a dual role of commercial bank and the central bank until the establishment of Nepal Rastra Bank on 26th April. in Nepal started with the establishment of Nepal Bank Limited.

Major products of NBL NBL is one of banks. by maintaining its competitive position. • Reclaiming leadership within the national financial community. having largest deposit base. The products and services offered by NBL has been continuously .adequate compensation with professional career growth opportunities and stockholders receive satisfactory return for their investment. service and safety for the customers we serve Respect. b. reward and opportunity for the people with whom we work Respect. • Providing competitive and customer oriented banking services to all customers through competent and professional staff. It renders its services to a very large number of customers all over Nepal. Organizational Strategies The organizational strategies for NBL are as follows: • • • • To improve the human resource of the bank to provide greater customer satisfaction To expand the market share and increase the customer base of the bank To bring in new products and programs that meet customer needs To maintain strategy of stabilization c. despite the fierce competition. (Bank overview: Nepal Bank Limited) Values: • • • Respect. cooperation and support for the economic community of Nepal Objectives: Nepal Bank Limited has the following objectives: • Maintaining leading share of banking sector with a significant presence in all major geographical areas in the country. in Nepal.

The Products of NBL are basically the services designed and provided to customers in terms of deposit schemes. it has credit facilities for entrepreneurs. it has providing banking services to a large number of customers.banking facilities to its customers. The products and services of the bank target all the age groups from senior citizens to youngsters. senior citizens and E-banking and ATM facilities to young and busy people. It has ABBS facility within Kathmandu Valley and various parts of Nepal.Silver Loans Export Loans Post-shipment and pre-shipment loans Hypothecation Loan Trust Receipt Loan Overdraft loan Housing Loan. credit facilities and other services of the bank. NBL has competitive interest rates for women. It has recently started mobile banking and E. It provides services that meet the needs of modern bank in order to compete in the market and retain its customers.upgraded and improved according to the needs of the customers and changes in the banking environment. The list of products and services provided by NBL is presented below: Table 1: List of products of NBL Deposits: • NBL General Savings • Women Special Savings • Senior Citizen Special Savings • Employee Saving Account • NBL fixed Deposit Account • Current Deposit and call deposit account • Special Savings Account Loans: • • • • • • • Gold. NBL has designed its schemes and services in such a way that it is assessable and suitable for everyone. Similarly. Personal Loan • Term Loan • Industrial and working capital Loan Other services provided by NBL are listed below: . businesses and consumption purposes. Since NBL is one of oldest commercial bank of Nepal.

. which is required by the customer while being paid. Clearing: NBL provides the facility of clearing check on behalf of its customer it accepts check of other banks. across Nepal having the facility of anywhere branch banking services. SMS banking provides the following services: • • • • • • • • • Secure transaction with PIN code Instant Balance Information Last three transactions with current Balance PIN code changing facility Latest Exchange rate of Foreign currency Account Stop Facility Check Book print request Account statement print request New Product information of bank Remittance: NBL Remit service is based on online data transfer system and it is instant enough.SMS Banking: NBL has recently launched SMS Banking services. Manager’s Check: It is a check drawn by Nepal bank on itself. For the authentication purpose. secret key is generated on the system. ABBS: Customers can withdraw or deposit money from any branch of NBL. efficient and very much secure. Remittance facility is available both for instant cash payment and credit to the beneficiary personal account. without having to bear extra charges. which is used for payments on behalf of Nepal bank.

human resource management system. and training centers. Likewise treasury department does the asset-liability management and other banking jobs. and promotion of employees. remittance. IT. d. Similarly.Banking services so as to enhance its services along with the rapid changes in technology Bank Draft: NBL also has the facility of bank draft for transfer of money. and market analysis. guarantee. transfer and retirement. accounts. HRM. Likewise.remittance services and electronic payment systems. Organization’s strategies. relationship management. development. the uses of bank draft have decreased considerably due to E. and back office. head office account and payment functions. manages employee benefits and relation. E-Banking: Nepal Bank Limited provides the customers with E. Point of sale transactions and issuance of new card doesn’t incur any cost to customers. Organizational structure of the company NBL has centralized organization structure. procedures. However. and credit management. Below the management committee lays the Chief Executive Officer and Management team. credit.ATM Card: NBL provides ATM cards to its customers. and statistics. account department performs the general accounting. and marketing and promotion. review performance. budgeting. Branch have very less say regarding decision making. central finance. inspection and internal audit. interest rates. BMD department supervises the operation of various branches. credit department deals with risk management. Human Resource Management department manages the acquisition. Corporate planning department is responsible for planning. Below in the hierarchy are the various departments such as corporate planning. is free of cost. legal. Central finance department handles the trade finance. NBL has centralized structure with management committee on the top of the hierarchy. Similarly. and all other major decision are made by head-office and all the branches work in accordance to the circulation given by head-office. The ATMs are placed at main points in Kathmandu and other cities and customers can also use the card in India in the ATMs of Punjab Bank Limited. Similarly. policies. treasury. Transactions from ATM of NBL. agency. IT department ensures that the technical support is always standing by in case if .

They are: • • Political-legal environment. Remittance. PEST analysis is one of the methods to analyze the environmental forces. disciplinary committee for Human Resource Department. procurement. and dispatch. 2. Environment plays a major role in defining the success and profitability of and organization. There is one branch manager. Legal department handles issues related to staff. All the departments further assist branches but especially branch management department is responsible for direct supervision of branches. teller. and other employees of various levels. administration. system audit and. Dillibazar organizational structure is based on hierarchy. credit committee for credit department. and credit. so banks need to study and analyze the external environment continuously. NBL. Economic environment. And finally Inspection and internal audit department carries the function of internal audit. developing PR. It considers 4 major environmental forces affecting the industry. Businesses are highly affected and influenced by the environment in which they operate. inspection. Banking industry is also very much affected and influenced by the external environment. There are various committees to further supervise the departments such as asset-liability committee for treasury department. and legal audit and documentation. and administration. one assistant manager. Organization structure of Nepal Bank Limited is presented in Annex-2. MSD department carries the task of asset management. There are various departments such as Customer service.any problem occurs in the bank software. observe day to day operation. checks security and quality. . one deputy manager. Organization’s general and competitive environment Environment Analysis Organizations’ environment is the surrounding and context in which businesses operate. credit. and IT steering committee for IT department.

SLR. NBL is influenced by the political environment to a great extent. so it is highly regulated. economic environment has direct impact on the . Since the central bank is also the banker to the government. Political system shapes the economy of any country. Banking is the backbone of economy.legal environment Instability in the political system in Nepal poses huge challenge to banking industry. it has to comply with the regulations posed by NRB because it has a huge amount of money and assets of public. in which it stands accountable and liable. The legal environment not only consists of the regulator but also the industry. Political system changes often and rules and regulations keep changing accordingly. so. Political systems have direct affect on the growth and development of the society. inflation level. Similarly legal environment also affects the banking industry. The government plays a major role in designing the banking industry. Since bank is the backbone of economy. NBL should work according to the directives and circulations send by Central Bank. In Nepal. banks and financial institutions are regulated by Nepal Rastra Bank. growth in economy and so on. Banks operate in a highly litigious environment. So. The central bank determines the interest rates. commercial banks must be very careful in matters. unemployment level. Political.• • socio-cultural environment and Technological environment. CRR and other requirements that have to be compulsorily fulfilled by the financial institutions. Economic environment includes the general macro-economic factors such as interest rates. NBL lies strictly within the regulation of NRB. influencing the industry and the firm itself. Legal environment is also very much dynamic since it keeps on changing and bank has to maintain compliance with the new rules and regulation no matter what Economic environment Economic environment is one of the important external factors. government and owners. Commercial banks operate within a highly dynamic and competitive environment where the banks have to draw fine line between ethics and profitability.

NBL was faced the challenge of technological innovation and advancement. housewives. as value of money starts decreasing. income levels and occupational status are coming under the banking service. investment activities increase and bank will be able to lend out more money to borrowers and investors and realize higher profits. Similarly. demographics. . Socio-cultural environment Society and culture shapes the attitude and behavior of people. and all other people. banking in the past was considered to be a place for rich people only. The attitude of the members of the society is important for a bank’s success. Nepal Bank has faced the need to continuously upgrade its service quality and value addition for retaining its brand image in the society. bank will generate more revenue. customers nowadays are more educated and better aware about the banking system mainly due to education and having access to information. So. Besides. Nepal bank is very much aware about such changes in the socio-cultural environment and is constantly updating and upgrading its products and services accordingly.behavior of customers of bank. psychographics and behavioral aspects of the people. businesses. positioning the bank in terms of its value proposition is important. Bank operates in a society and society has a major role in determining the profitability and growth of the bank. Similarly. backgrounds. Banking habit of people is changing continuously and in a better way. When. Unemployment level also affects the banking industry. People and businesses will have surplus money and the deposit of bank will increase. economy is in growing trend. Banking is equally important for students. More people will demand money in the form of credit for business and consumption purposes. Bank has become a inevitable element for the development of people and society. Thus. banking is not confined to rich people and business people only. economic activities boom. Moreover. Socio-cultural forces include the lifestyle. Rise in inflation rate will discourage people to keep money in the bank.Change in lifestyle have entailed a major impact on the banking sector. But nowadays. People from all levels of the society.

• • • Threats of new entrants Rivalry among existing firms bargaining power of buyers . systematic and standard.Technological environment Technological environment is the most dynamic and challenging environment for banks. out of necessity as well as due to competition given by other commercial banks. Changes in technology have made the banking operation much easier. But now it has been computerized. Technological environment has affected the banking industry to a great extent. otherwise it would have been impossible to provide the facility of ABBS. Nevertheless technology provides businesses with competitive advantage. According to Michael Porter there are five factors that determine the competitive position of a firm/industry and its ability to generate revenue. Industry Analysis considers identifying and examining important stakeholder groups in a corporation’s task environment. When competitors easily imitate the technology the pioneer will face strong competition to overcome the huge investment in research and development of the technology. Another major example of technological change is the presence of instant ATM cards to customers for withdrawing money. it poses immense threat of competition and imitation by competitors. The major change that has been seen in Nepal Bank Limited is that few years back. The transactions are operated through the server and it has increased the customer satisfaction as well as employee performance. Technology poses threats because every new technology becomes obsolete when new and improved version comes in the market. The bank has become more efficient due to the presence of computerized system and software. NBL has been able to provide the facility of any branch banking system due to the technological change. Porter’s Analysis An industry is comprised of a number of firms producing similar product or providing similar services. innovation and cost leadership. the bank was not computerized.

they offer higher interest rates for deposits and lower interest rates for loans. . New commercial banks bring with them required capital investment. The rivalry among the firms in this industry is high.• • Bargaining power of suppliers Availability of substitute products Threat of New Entrants: Threat of new entrants is one of the forces defined by Porter as “Forces driving industry profit”. as per the regulation of NRB. NBL is constantly facing the threat of new entrants in the industry and it had to increase its interest rate and introduce new schemes to align with market competition. There are 31 commercial banks till date. that is. The number of commercial banks in Nepal is thirty one. not only from other commercial banks. However the number of banks and financial institutions seems to be increasing every year. The banks are competing to increase their profitability. New entrants to an industry are threats to existing firms because they enter the industry with new strategies. according to Porter. Commercial banks face competition. Similarly. The following factors can be observed in Nepali banking industry. they bring new technology and better resources. there is intense competition among the banks. NBL has been trying to keep up with the fierce competition. but also from finance companies. development banks and co-operatives. Banking industry highly regulated in Nepal. • Number of competitors: The number of competitors in Nepalese banking industry is very large for economy like Nepal. Rivalry among Existing Firms: Competition is aggressive in every profitable industry. which leads to intense rivalry among the firms. Banking Industry in Nepal had high intensity of threat of new entrants. In order to capture market share and accumulate large deposits they practice market penetration strategy. Competitive move by one bank leads to similar actions and sometimes counter efforts by other banks. resources and capacity. In addition.

The services provided by banks are highly substituted. buyers are the people who take loans or borrow from bank. Similar is the case while borrowing. In order to survive and compete in hypercompetitive environment. Availability of substitute products Substitute products are those products which are not alike but fulfill the same purpose.• Product or service characteristics: The products and services provided by all the commercial banks are almost the same. Nowadays due to competition bargaining power of buyers is higher than before. documents for import. Moreover most of banks are located in similar locations. Customers nowadays have so many options on where to deposit their money or make investment. lockers. Customers. call deposit accounts. There is huge pressure on the bank to increase interest rate as new banks are proving interest on general savings as high as 11%. Depositors are very well-informed and educated this day. Even finance companies and co-operative are providing services like commercial banks. export and so on. Bargaining power of Suppliers For banks. They demand lower interest rate and flexible paying terms. • Height of Exit Barriers: Banks have a greater height of exit barriers. For example: ATM. Bargaining Power of buyers For banks. Banking sector is highly regulated and banks cannot voluntarily leave the industry because they have publics and governments money at stake. evening counter. To cater to the customer needs NBL has been providing various kinds of loans. Businesses . suppliers are the depositors. so their bargaining power is also high. SWOT ANALYSIS An organization’s performance is highly determined by the environment in which it operates.

thus less risky for depositors. They provide good governance and support to the bank. • NBL has experienced top. The Board of Directors is a five-member committee. Opportunities and Threats. • NBL provides banking services even in remote areas and benefits from such networking.need to scan the external as well as internal environment. • NBL is a semi – government undertaking. Despite having huge capital. NBL has not been able to exploit the opportunities. • Centralized decision making in the organizational structure causes delay in decision making. any organization has to go through in order to analyze the Strengths. • NBL offers a wide range of products and services to compete with other banks and improve its services with technological changes. appointed by NRB. Weaknesses of NBL • NBL is one of the banks with largest deposit base. Weaknesses. Therefore. The SWOT analysis of NBL is presented below: Strengths of NBL • NBL is a pioneer in Nepali Banking Industry and it has been providing banking services in Nepal since its establishment in 1937 A. in comparison to other commercial banks. NBL has public faith and trust.management.D. . • Least effort put into innovating new product and services according to the need of customers. SWOT is an effective way to identify and analyze strategic factors. NBL has a distinct recognition in banking sector. • NBL has been quite slow in adapting to technological changes in the banking industry. SWOT is one of the very important analyses.

• NBL can upgrade its non. in order to enhance its networking efficiency and performance. • Since. it has opportunities for investing in big projects like hydropower.computerized branches to computerized branches. drinking water and national priority sectors. Opportunities for NBL • NBL has the capacity to acquire latest banking technologies to position its premium services and attract target new segments in the market. • Marketing penetration strategies undertaken by new banks and financial institutions has reduced the spread of NBL. • NBL has a huge deposit base compared to other commercial banks. organizational orientation and career. alternative energy sources like solar power. despite of the fierce competition in the banking industry.• Few opportunities provided to employees for development of their professionalism. it can invest in small and medium projects in remote parts of Nepal and serve niche markets like micro credit. NBL has a wide network. . Establishment of several new commercial banks has lead to hyper competition in the industry. • It can improve its information system and upgrade the software to make the operations more efficient. Threats for NBL • • NBL faces the pressure of operating in a highly regulated sector. Thus. reduce down time and enhance networking.

in competitive rates.5% HBL 5% 9.5% NIBL 4. Competitive Analysis The organization’s competitive position in the market is determined by analyzing the rates of deposits and loans as well as other services provided by the competitor banks. deposits and overalls profitability of NBL with other competitive banks. cooperatives and development banks providing more customized services.5% 16-17% 16% 13-14% . social and economic instability in the country is major threat to the economy as well as banking sector.• Customers are aware and well informed about the infrastructures. For comparing the rates of loans. customized servicesto customers. we selected the following banks: • • • • Nepal Bank limited (NBL) Himalayan Bank Limited(HBL) Nepal Investment Bank Limited (NIBL) Rastriya Banijya Bank (RBB) Table 2: Comparison of interest rates and profitability Criteria Normal Savings NBL 3.5% 7.5% RBB 3% 7% Fixed Deposit (1 8% year) Term-loan 13-16. • Political. interest rates and value added services so NBL is obliged to provide high quality. • Financial institutions like finance companies.

Most banks were concentrated within Kathmandu valley and NBL was the bank which initiated branching outside the valley and introduced banking to all segments of people all over Nepal. It is one of the pioneers in Nepalese banking industry. However. HBL and NIBL have similar rates for loans. HBL provides highest rate in fixed deposit accounts in order to attract more amount of fixed deposit. PART THREE PRESENTATION OF MAJOR PROJECT A study on the need of market segmentation and targeting at Nepal Bank Limited Section I.5-14% 4. the spread is almost similar. while NBL and RBB provide flexible interest rates on loans.182 15-17% 508. Introduction of the project Nepal Bank Limited has been providing modern banking services in Nepali banking industry for 74 years.193 17% 1. it accumulated huge deposits and retained its top position for a very long time.Overdraft Net Profit 13-15% 894.949. there were few banks and competition was very low.798.265. due to rapid growth in the number of commercial banks. Though the interest rate on deposit and loans seems to vary according to the banks.000 From the above data we can observe the following tendencies: HBL provides the highest rate of interest rates in normal saving accounts and fixed deposit.756. Few decades back.588 13.735. It makes up for its expensive deposit schemes by charging higher interest on loans. than other banks. Introduction 1. Since its establishment. during the past . RBB has the highest net profit.254.

the most important thing for a bank is to know “who are its customers?” and “what are their needs?” The bank needs to segment the market into various segments and develop new products and services according to the need and interest of the segments. 2. businesses put their best efforts to reach their customers through marketing. advance technology. The basic rule of marketing is to segment the market and identify profitable segments to cater to the needs of various segments. Nevertheless. So.few years. Marketing is very important to survive. for marketing its services effectively. This project is a small effort to study the need of market segmentation and targeting at Nepal Bank Limited. The bank should design its products and services through customer driven marketing strategy. Since the switching cost for customers lowered. . They practiced market penetration pricing strategy by offering higher interest rates on deposits and lower rates on loans in comparison to the prevailing market rates. Banking industry is a service industry and it has huge potential to come up with innovative and creative services to stay ahead of the competition and delight customers with value addition. compete and maintain valuable relationships with customers. NBL lost many of its clients to competitors. outstanding marketing campaigns. New commercial banks entered the market with innovative products and services. NBL faced difficulty in retaining its customers. by innovating new services. customers are bombarded with information. In this age of information. • To determine which customer segments exist in the customer base of NBL. For this. NBL put least emphasis on marketing and promotions while other banks continuously adapted to the latest marketing trends in order to reach to the customers. Moreover. it was unable to attract new customers in comparison to the past. The bank should identify profitable segments and niches which are not served and focus on such segments to generate higher profits. Objectives of the project The objectives of the project are as follows: • To study the need of market segmentation in NBL.

. their characteristics. Analysis of segmentation and targeting is quite important in today’s context to build strategies and develop new product and services according to the needs of various customer segments in the market. their preferences of existing as well as new services. Limitations The major limitations of the project undertaken are as follows: • The findings and conclusions are made on our own analysis of primary and secondary data. their preferred means of communications to receive bank’s information. This project’s study will be helpful for the bank to identity various segments. To find out the suitable means of communication for different target segments To find out which new services should be developed to generate higher profits from potentially profitable target segments. preferred time for visiting the bank and their attitudes towards social welfare activities of the bank. • The research was carried out on small scale and we had limited access to information and resources. • • • To identify how NBL should position its services to reach target segments. 3. therefore the result may not be relevant if generalized on a large scale.• To determine the demographic. • To identify the market segments with unmet needs that products and services of NBL could meet. Scope and limitations of project Scope Scope of the project is to study the need of targeting and segmentation at NBL. socio-economic and behavioral characteristics of existing and potential customers in the banking industry.

• In certain circumstances we had to make simplified assumptions to the complex situation in absence of reliable and relevant information. Review of related literature . SECTION II: CONCEPTUAL FRAMEWORK 1. • The customers were unwilling to invest more time and hesitant to provide more information.• We had limited time to conduct the research in-depth.

While building customer driven marketing strategy. price. designing and creating products and services that best serve the target customers and positioning the products and services. So. selecting the customer groups to be served. Marketing mix is one of the modern concepts in marketing. companies focus on developing customer driven marketing strategies to reach the profitable segments in the market by designing appropriate marketing strategies.This section portrays knowledge. marketers plan the marketing mix. Market is no more a place where the same products and services can satisfy all the customers. preferences. place and time. Designing a Customer-Driven Marketing Strategy. The initial step in designing customer driven marketing strategy is to segment the market. Similarly. people. characteristics and behavior. Market is composed of various customer groups having distinctive needs. process. It consists of decisions like how to divide the market into significant customer groups. Due to such heterogeneity in the markets. companies have accepted the fact that. marketers have to emphasize customer driven marketing strategy. Service marketing mix consists of marketing elements like product elements. it is important for marketers to understand and develop suitable marketing strategies for various customer segments with differing characteristics and needs. These elements are controllable in nature and defined by the marketers. However. promotion and education. and characteristics. productivity and quality. (Philip & Gary. physical environment. Marketing is a process by which companies create value for customers and build strong relationship with the customers to capture value from customers. theories and other reliable sources of references. These consumer groups may require separate products or marketing mixes. related articles. 2008) . understanding and definition about the subject matter derived by reviewing the concepts from text books. Market segmentation is the process of dividing the market into smaller groups with distinct needs. it is impossible to please all the customers with same products and services.

Marketing the products and services to the target segments with appropriate marketing strategies helps in effectively reaching the profitable customers. culture. 2004) Markets can be divided into various segments with various attributes. Demographic segmentation helps in segmenting the market according to various demographic variables like age. It is a smaller market with many firms competing with each other to capture more market and claim more customers. So. Effective segmentation helps in identifying various customers and prospects into segments so that the relevant characteristics within each segment and the dissimilarity between segments can be measured. In order to market banking services effectively. geographic. select one or more segments. preferences and needs of . The purchasing behavior and consumption patterns of each segment differ from the others. After segmenting the market the marketers select target segments to market their products and services effectively. psychographic. The values. Such segmentation is useful for businesses operating in different parts of the country or world. Therefore marketers segment the consumer markets into various different segments. marketers of banking products and services have to understand that they cannot appeal to all the customers in the same way because customers vary in demographic. A market is made up of various different customer groups with different characteristics. developing services and marketing programs customized for each segment. Similarly. A market segment is made up of a group of buyers having common characteristics. The heterogeneity in the customers makes it very difficult for the marketers of banking services to market their service effectively. education level and so on. geographic. geographic segmentation divides the market or consumers into various geographic regions. The most common basis for segmentation could be demographic. income. media and price segmentation. psychographic and lifestyle. it is important to identify market segments.Banking industry is one of the most competitive industries in Nepalese economy. gender. (Christoper & Jochen. and behavioral attributes. needs preferences and status. It is very important because the characteristics and behavior of various demographic groups tend to vary.

bank must evaluate a segments size. It focuses on values and beliefs of the consumers. (market segmantation) Marketing banking services poses a challenge amongst the marketers because unlike consumer products and commodities. So. Not catering to the real needs of various customer groups can result in customer switching to other banks and loss of brand value. So it is difficult for marketers to determine what services to provide and what level of services to provide to various customers. qualitative segmentation becomes very important. Bank can also . Thus the need for segmenting the customer market is important for banks to identify profitable segments in the market and develop appropriate products. Customers of service industry like banks differ in various attributes and are widely scattered. behaviors. services have mostly intangible aspects. In order to create value for targeted customers. media segmentation is based on the difference in media to reach different customers while price segmentation segments the market according to the price attributes of products and services. emotions and interests. The bank can develop new services. Psychographic and lifestyle segmentation is based on consumer attitudes. Market segmentation provides better results than simply offering same service to all the segments. upgrade old ones or bring changes to the existing services so as to provide superior value to the customers and delight them. bank should further differentiate the services and position the services so that it occupies distinctive and advantageous position in target customers’ minds. Similarly. in comparison to competitors’ services. Another important segmentation factor is psychographic and lifestyle segmentation. In order to locate such segments. growth and profitability and design services by targeting those customers.consumers vary according to the geographic area. Moreover segmenting the market helps the bank in finding out the profitable segments and their unmet needs. The service quality is difficult to evaluate and the service cannot usually be experienced beforehand. services and strategies to market the services effectively. Customers feel that they have least options to choose from and their needs being ignored.

we needed information about the potential and existing customers. Similarly. For this research. The most important information was to discover whether market segmentation and targeting is important to market banking services effectively.add value proposition to its products and services and communicate the value proposition in the market. 1. Nature of the data . 2. This research was carried out by following the steps and procedures prescribed in marketing research text book. We also needed the information about the current marketing plan of the bank and efforts made on promotion of products and services. Research design formulation This research was conducted as exploratory research to get insight about the need of market segmentation and targeting in NBL to market its services effectively. we required the list of products and services currently offered by the bank and products and services to be launched in near future. SECTION III: METHODOLOGY Research methodology is the well formulated plan for carrying out the research.  Problem Definition Management decision problem Is it necessary to segment customers in banking services?  Marketing research objective To study the need of market segmentation and targeting for Nepal Bank Limited.

saving. Internet Banking.com. Methods of collecting data  Questionnaire Survey . fixed) Loan/ Advances( consumer. We obtained information regarding • • • • Deposit ( current . corporate) Remittance Other services (Safe deposit vaults. ATM) 3. ABBS.  Primary Data • • • unstructured interviews with customers of bank unstructured interview with top-level employees of NBL Questionnaire survey  Secondary Data • • • • Information from website of the bank Published articles and journals Internet articles related to segmentation and targeting Annual reports of competitive banks Secondary Data Analysis To gain a brief insight about our project we referred to the website of NBL (nbl.np).The data collected from various sources can be categorized into two parts.

the services mostly used by the respondents. We also contacted customers over the telephone to get required information about the aspects of the bank’s services which customer value. Sampling process and sample size . The questionnaire was made up of twelve questions which briefed about the most obvious customer segments of the bank. multiple choice. We also reviewed articles related to segmentation and target in the internet so that we could learn about different types of segments in the banking service industry. we interviewed 8 customers of the bank for any required additions and amendments in the questionnaire. This questionnaire consisted of open ended. The customers were from various age groups. and dichotomous questions. Nepal Investment Bank Limited and Rastriya Banijya Bank to compare the interest rates offered by these banks. and importance of social responsibility of bank. preferences.We designed a questionnaire to collect primary data. The results from the survey helped us to understand the attitude. and attributes that are regarded valuable by different segments of the customers. After the questionnaire was formulated. preferences. We interviewed 20 customers of the bank so that we could come up with appropriate questionnaire. time preferred by the customers to visit the bank.  Information from websites We collected information regarding various services provided by NBL and other competitive banks like Himalayan Bank Limited. and needs of the customers. Questionnaire survey is presented in Annex-2. preferences and behavior of various customer groups.  Interview Direct communication and interaction with the customers of NBL during our internship help us to discover real problems. 4. Rest of the questions was directed towards the needs. The questionnaire had questions regarding factors considered by customers while banking. preference of communication media.

The segments were identified . The questionnaire forms were inspected and edited and the data was processed in Excel for further analysis. Further. there were respondents from various occupations. Market segmentation is important to services organization like banks due to the large number of existing and potential customers. the existing and potential customers are divided into four segments on the basis of gender. we used sampling method. it was analyzed and interpreted using statistical tools like frequency distribution. methods of central tendency and statistical diagrams. This method was appropriate for us not only because it was economical and least time consuming. students. We used simple random sampling and the sample size was 150. Analytical presentation of the project Our project was to determine the need of market segmentation and targeting for Nepal Bank Limited. The sample we selected consisted of random people in the market. income and occupation. Some of them were existing customers of NBL. The sample for our study was quite representative of the population because it consisted of people from all age groups. to market the services more effectively to the target customers.For collection of data for our research. 5. but it also provided us unbiased and accurate data for our research. The respondents also had varied income scale. age. Section IV: Presentation and analysis of the project 1. homemakers and unemployed. Data preparation and analysis The data we collected from the survey was processed through Excel. Similarly. we had pre determined.

during our internship. In order to study the profitable segments and position the services to reach these segments.by observing the actual customers in the bank. their preference of time for visiting the bank. Commercial banks are struggling to retain their market position and attract new customers as they are competing not only with the players of the same industry but also from other financial institutions like . NBL has not reached most profitable segments in the market. Presently in NBL there are few products and services targeted towards some segments in the market. Similarly it tries to reach all the customer groups with the same message through the same media. appeal of corporate social responsibility. preference of communication media to receive information about the banking services and so on. a. The questions provided an insight towards the most profitable segment and segment with greater potential to increase the bank’s customer base and profitability. The survey consisted of questionnaire and unstructured interview with the customers of bank. It has two deposit schemes that are targeted to actual segments in the market. there are other segments in the market for banking services. by different segments. Service attributes valued by customers Fig 1: Factors considered by customers while transacting with bank Banking industry is a very competitive industry in Nepal. The questions were focused on the preference of various services and service attributes. We asked questions regarding the services they currently used most. NBL has deposit schemes like Women Special Savings which provides higher interest than normal savings. Senior Citizen Special Savings is meant for senior citizens who are mostly retired and look for reliable and trustworthy institution for placing their savings and income. However. we conducted a survey focused on segmentation and targeting the market. The bank offers the same products or schemes and services of all the customers. new services they would be interested in. which we have not considered for this study.

development banks, finance companies and co operatives. So, it is very important for bank to differentiate itself from the competitors and add value to its services. In the survey conducted, the respondents were asked what factors they paid more importance to, while transacting with a bank. The survey result showed that 31% of the respondents gave more importance to convenience. Convenience refers to the location of the bank, the flexibility in providing services and time of delivering the services. Similarly, 28% of the respondents think that quality of customer services is an important attribute in banks. 24% of the respondents emphasize trust factor, considering the incidents that has been taking place in a few banks recently. Finally, 17% of the respondents think that they consider networking of a bank, while transacting with it. From the survey, we can see that customers put more emphasis in convenience of a bank, in providing services to the customers. b. Importance of Corporate social responsibility versus interest rates

Fig 2: Importance given by customers to corporate social responsibility In our survey we had given various options for customer to choose their saving account. There were three options which contribute something to the environment, old age homes, underprivileged children and one that provide slightly higher interest than other accounts. Our survey result shows that CSR increases the appeal of deposit schemes; however bank cannot ignore the interest factor, which has a major influence on decision making by customers. Nowadays customers are becoming more responsible and aware about the social issues and they want institutions like banks to contribute something to the society. Therefore what bank can do is coming up with schemes that actually make a positive impact in the society so that customer get positive image about the bank. The survey results showed that customers value corporate social responsibility of banks to a great extent. Results showed that customers would be happy to contribute to the old age homes, underprivileged children and environment. Higher interest rates on savings accounts and other accounts would

definitely increase the appeal of the account and attract new customers. But customers think that contributing a small amount to social welfare would make the account more appealing. Customers would like to contribute to CSR through the bank accounts. Customers find accounts that contribute certain percentage to CSR more appealing than normal schemes.

c. Preferred communication media

Fig 3: Preference of communication media by various age groups It is important for the marketers of banking services to know that services have to be reached respective target groups. In order to market the services and position the services, bank has to promote the services through appropriate medium. In the survey, we asked the respondents which means of communication they preferred for receiving information about bank’s services. The result is depicted into a column chart. The survey result shows that among 20 respondents of age group less than 18, 15 preferred internet and 5 preferred newspaper. 30 respondents of age group 18-24, 20 preferred internet and 10 preferred TV. The age group 25-34 mostly preferred newspaper to receive information about the services. Some respondents of this age group chose brochures, internet and marketing by bank’s personnel. Age group 35-44 prefers to receive information of bank’s services from brochures, marketing personnel, newspaper and TV. None of the respondents of this group showed liking for internet or radio. The survey shows that age group 45-54 mostly prefers TV for receiving bank’s information. Similarly, age group 55 and older prefers TV.

Fig 4: Preference of communication media on the basis of occupation It is important for bank to identify preferred means of communication by the target customers to advertise its product and services. After identifying the target segments bank

should identify proper means of communication to reach those target costumers because not all targeted costumers can be reach through same means of communication. We asked people about their preferred means of communication and our surveys results show that business person prefer internet and newspaper to get information regarding bank services. Similarly, housewife prefers television, service personnel prefer television, student prefer internet, and unemployed person prefer radio to get such information. Now bank has to choose such medium that has highest audience reach and also is being seen by the target customers.

d. Time preferences of various occupation segments

Fig 5: Preferred time of customers on the basis of occupation for doing banking transactions Time preference for doing banking activities may vary according to the occupation in which people are involved. For example students are usually free during day time, whereas service people are busy in their offices. Business people prefer to visit bank during the day time because most of their transactions start from about 11 in the morning. So banking during the daytime will be convenient for them. According to our survey business person prefer daytime, housewife also prefer daytime, service personnel prefer evening time as they can do banking activities during their lunch break, students prefer daytime as most of the students have classes on morning, and unemployed people prefer daytime as they are free mostly during daytime. Unemployed people also prefer transacting during the daytime. However, banks cannot ignore the

in the survey we asked the respondents in which of these new services would they be interested. To identify which services are most attractive to which age groups our survey included question regarding preference of new services by various age groups. For this. e. Customers of many segments prefer evening time for banking. mobile banking is preferred by age group of less than 18.preference of customers towards evening banking. Our survey result shows that credit card service is most preferred by age group of 25-34 and 45-54. Fig 7: Preference of new services by different occupation segments Banks can differentiate their services in many ways. They are least interested in mobile banking services. Preference of new services Fig 6: Preference of new service by different age groups Different age groups have different preference for new service. mobile banking. insurance. Services like credit card. insurance service is mostly preferred by 18-24. The survey showed that business people will be more interested in credit card and wealth management services. banks need to continuously develop new services and create value for customers. Without proper analysis of target market banks new service may not attract enough customers. housewives will be most interested in credit card services. to gain more profitability. Small number of them shows interest in utility . utility payment and wealth management has not been well developed in Nepali banking industry. So. Bank should analyze its target customer and come with new services that are well designed to meet the need of such target customers. Similarly. Similarly. Likewise. Understanding the needs of target segments and differentiating the market offering to create superior value can be profitable to the banks. and 55 and older. 35-44. And finally wealth management is most preferred by age group of 45-54 and 55 and older.

bills payment. high quality services can be delivered by providing superior customer care. they said that they like the fast service of a bank they recently visited. Likewise respondents working in the service industry will be attracted by utility bills payment services because they have no time during the office to go to pay utility bills. Similarly. f. the most. Customers can be delighted by providing proper support. 70 respondents among 150 liked the customer care provided. . Banks are continuously working on their ambience to make it just the right place for customers to bank. So. the fast and efficient service is also equally important to customers. Furthermore. Survey results revealed that people of age group 18 and below and 18-24 used ATM. what they liked most about the any bank they recently visited. building an attractive ambience enhances the brand image of bank. Respondents agree that the right ambience is very important. withdrawal. Since it is clear that different age group use different services of the bank and different age group diverse choice of services. Likewise. care and attention. age group 45-54 carries out deposit transactions mostly. the customers were asked open ended question. Customers view banks as a hub to carry out transactions. Similarly. Attributes of a recently visited bank Fig 8: What customers liked about recently visited bank In the survey. People of age group 25-34 use ATM and deposit transactions the most. students will be more interested in mobile banking. The questionnaire also asked the respondents which transactions they carry out most and which services they used most. Age group 35-44 use deposit. For customers of bank. NBL should focus in targeting particular age group with superior value services. 35 were impressed by the ambience and 25 valued fast service and not having to wait long time. They also show interest in credit cards and unemployed respondents show some interest in insurance services. E-banking and remittance services.

using of various banking services and the necessity to market the services according to the preferences and attitude of customers. 2. occupation and income groups. we carried out a research focusing upon two important attributes of marketing: market segmentation and targeting and its importance in marketing banking services.The survey also had question about the respondents’ interest in special savings account for children and elderly or retired citizens. we considered gender. survey shows that most respondents remember the quality of customer service and the ambience and environment of the bank. Elderly citizens who are retirees receive pensions and they have alternative sources of income. This shows that children can be profitable segments in the market. 97% of the respondents showed positive response on this. The questions in the questionnaire were designed to find the needs and preferences of various segments. which provided detailed information about the characteristics of customer groups. It helped in defining each segment of existing and potential segment precisely and what can be done by the bank to reach each profitable segment. different customer groups have different preference of communication media for receiving information so whenever bank comes up with new products and services or are willing to promote the existing ones. Similarly. The survey for the research consisted of a structured questionnaire. Convenience and high quality service provides value addition to banking services. and target groups preferred media and then communicate the message to the . This segment can bring in huge deposits into the bank if bank can develop schemes to serve their unique needs. Children and elderly citizens are profitable segments of markets in Nepal. Developing and marketing attractive saving schemes for children and elderly citizens can help the bank to increase its brand image and profitability. Our survey result shows that people are interested in doing banking with such banks which are rated high on factors convenience and customer support. While conducting survey to study the need of market segmentation and targeting in NBL. Similarly. Major Findings During our internship. age. it should first identify target group.

NBL has been able to gain competitive advantage due to trust factor so it should focus on this factor for appropriate positioning of the brand. The attitude. Our research reflected that in order to market services effectively. Nowadays people are being more and more conscious regarding the credibility of bank because of many cases of trouble faced by some banks and financial institutions. credit card services. market should be segmented into appropriate target groups on the basis of certain characteristics like age group. preferences. NBL should extend this service to other branches to increase convenience among the customers. banks are trying to provide 24 hours services through self service technologies like ATMs. So. Moreover. while younger respondents think that higher interest rates increase the appeal. needs of each segment differ. After segmenting the market. bank should target each segment by building appropriate marketing strategies. The importance given by customers to corporate social responsibility and higher interest rates are almost same. Nevertheless. NBL should come with such schemes and present itself as a responsible bank. Section V: Conclusions . so that it can be market leader in introducing new services in the industry. It should also add new services and market them to the most profitable segments. Some of the most important services in banking are provided by Kathmandu banking office only. income group and so on.target customers using the right media. insurance. So people with various job hours and various nature of occupation prefer different time to visit the bank. different customer segments have different preferences about the choice of time suitable for them to visit the bank. customers have to visit the bank for most of the transactions. There are many services that are yet to be tapped by banks such as utility bills payment. bank must design its services and customize the services to match the needs of particular segment. People with stable job and income and people of senior age group think that CSR increases the appeal of the products and schemes. So.

It is not possible to appeal all the people in the market with same products and services. We suggest that NBL should conduct a further detail market research and enhance its products and serves according to the need and demand of various customers segments. backed by a strong product and value addition. Market consists of customers who differ in various ways. select the segments to enter. The needs. preferences and choices of products and services for each segment of customers are different. it is important for banks to break up the large and heterogeneous markets into smaller segments. By segmenting and targeting bank can study each target segment individually and customize its products and services. NBL has branches all over Nepal. differentiate the services to create superior value and position the services appropriately among the target customers. Thus market segmentation and targeting is very important to serve various segments in the market with appropriate services in order to generate most of the profits out of those segments.1. . finance companies and co-operatives. and huge customer base but it should make efforts to retain customers as banks are taking away its customers. In today’s context customization of products and services is quite important to face the competition provided by not only commercial banks. So NBL should focus on marketing its products and services by launching the right products. resources. So. Banking services can be customized according to needs of various customer groups. locations and so on. to the right customers. to reach the segments effectively and efficiently. Existing and potential customers differ in attitude. Marketing alone cannot be helpful without customer driven marketing strategy. behavior. but also development banks. Banks can target the smaller segments by developing and introducing unique and appropriate services. lifestyle. It is very important for NBL to segment the market. Project specific conclusion and suggestions NBL has a large and heterogeneous customer base and it has large number of potential customers. wants. at the right time by segmenting the market and target the right segment.

Moreover. teller and administration. remittance department. internship program was very important for enhancing decision making skills. We gained practical approach towards the operation and management of each department in a bank and the contribution of each department towards achievement of organizational objectives. This internship program proved very productive for us. we learnt about the quality in the process of delivery of services . being students of BBA received excellent exposure in the market. we enjoyed the experience while building valuable personal relationships. Moreover. We also conducted a research focusing two important attributes of marketing: market segmentation and targeting and its importance in marketing banking services. We learnt the basics of banking and management of people and resources in an organization. professionalism and understanding of the corporate world. it was our first experience in a real organization. We got an opportunity to apply our business management and banking knowledge into real work environment. Since. We gained knowledge and experience about the functioning and organization of various departments and the role of each department in the overall functioning of the bank. Basically. We. The most important objective of the internship program was to observe and learn the functioning. During the internship period we were placed in customer service desk. Internship program proved very helpful in achieving the above mentioned objectives in an effective way. we learnt the basics of banking since we both interns were considering a career in banking. Our eight week long internship at Nepal Bank Limited was a very good experience.PART IV REFLECTION OF INTERNSHIP Internship program of KUSOM is designed to provide students with an opportunity to work in real organization. operations and management of banking system and get acquainted with the corporate culture in banks of Nepal and explore the challenges and opportunities. communication skills and ability to work in teams. interpersonal skills. It built up our confidence for facing the corporate world. credit department. It helps students to develop practical approach.

communication skills. The research project that we carried out also gave us valuable experience. Moreover. internship program helped us develop personality and confidence. Learning about a large industry such as banking cannot be completed in such a short period of time. By working in various departments of banks such as customer service desk. . we were able to gain the basic knowledge and understanding regarding the operation and management of bank and the overall functioning. We gained basic knowledge and experience to conduct marketing research. However. challenges. and credit. problems. problem solving skills. This helped us learn about research. We came across lots of challenges while conducting the actual survey and analyzing the data. working in a bank helped in developing our interpersonal skills. remittance. We were able to achieve the internship objectives to a great extent. Above all. we learnt in detail about the roles and functions of each department and the inter relationship of one department with another. and decision making skills. The skills and knowledge gained during will be helpful throughout our career. It boosted up our confidence to face the corporate world. It enlarged our knowledge base and complemented theoretical knowledge with practical experience. administration. and opportunities of contemporary banks. teller.in a service organization.

nepalbank. (1999). 2011. from Nepal Bank Limited website: http://www.. Addition Wesley Longman Inc. H. Gary. A. Introduction to marketing research.REFERENCES D. Service Marketing: People. 2011.com. & D. W.np/bankoverview/introduction.d. Inc. Satyabhusan. & Satyabhusan. Strategic Management. New Delhi: Pearson Education. Retrieved May 1..php market segmantation. (n. Christoper. Technology. Inc. 184-185). K. & L. Principles of Marketing (pp.. (2011). J. Malhotra.). New Delhi: Prentice-Hall. A. Malhotra. (2008). K. Philip. W. In N. Designing a Customer-Driven Marketing Strategy. New Delhi: Prentice-Hall. & Gary. Strategy. D. Principles of Marketing. Retrieved May 25. Philip.. Bank overview: Nepal Bank Limited.). (n. L. 6-7). N. from http://www. & Gary.decisionanalyst. Marketing Research: An Applied Orientation (pp. (2004). T. & Jochen. & A. Pearson Education. (2008). In K. K. K.d. Philip.com ..

1 ORGANIZATION STRUCTURE OF NEPAL BANK LIMITED Management Committee Office of the Management Committee Audit Committee .Appendixes Annex .

O. Account & BMD Branch Operation Performance Review Marketing & Promotion Treasury Acquisition.Chief Executive Officer Office of the CEO Special Unit Management Team Corporate Planning Planning Budgeting & Statistics Market Analysis HRM Accounts General Accounting H. Development & Promotion L IT/MIS e g Administration al Security & Quality Newton Staff Operations Credi t Technical Support Legal Audit & Docu ment ation IT Steering Committee Inspe ction & Intern al Audit Internal Audit Systems Audit Inspectio n Dealing Correspondent Banking ALM Employee Benefits & Relations Transfer and Retirement Dept. Action HRIS Training Centre Payment Asset Liabilities Committee Disciplinary Committee B RAN C H E S 109 .

2 Survey for market segmentation and targeting for NBL 1. What is your annual income? Less than 50. What did you like most about any bank you recently visited? ____________________________________________________ 8.000-500.Annex .000 4. Which of services do you use the most? (1 being the most used and 8 the least used) E-banking__ Locker__ Mobile banking__ Web__ Remittance__ ATM__ Loan__ Deposit __ Withdrawal__ 7.000 100.000 and above 51.000-100. Gender Male Female 25-34 35-44 45 – 54 55 and 2. What factors would you consider when making transactions with a bank? Convenience Trust Networking Customer service 6.000 500. What is your occupation? Business Service Student Unemployed housewife 5. What is your age group? Less than 18 18 – 24 older 3. Which is the most suitable time for you to go to bank? Morning Daytime Evening .

Which of these services would you be interested in? Insurance Mobile banking Bills Payment Credit Card Wealth Management Utility 10.5 % more interest than normal savings contributing to education of underprivileged children . which one would appeal you the most? Contributing certain amount to environment contributing to old age homes providing 0. Among the following savings account.9.

11. If your bank is offering higher interest rate in savings account for children or senior citizens would you be interested? Yes No 12. Which means of communication do you prefer for receiving information about banking services? TV Radio Internet Newspaper Brochures Marketing personnel .