A comparative study on role of marketing in banking sector

BHILAI(C. G.

) A RESEARCH PROJECT REPORT ON “ A comparative study on Role of Marketing in Banking Sector (Private And National Bank)” [pic] Chattisgarh Swami Vivekanand Technical University, Bhilai in Partial fulfillment for the award of Degree of Master of Business Administration Submitted By: Alka Shukla Roll No:-MBA/08/3403 MBA: II – SEMESTER Approved By: Guided By: Mr. A. Jagdish Mr. Nikhilesh Kariya Director (RCET) RUGTA COLLEGE OF ENGINEERING AND TECHNOLOGY, 2008-10

Date: -……………………. Guided by Seal / Stamp of the Organisation Mr.

NIKHLESH KARIYA Reader, RCET, Bhilai ACKNOWLEDGEMENT In order to complete any project successfully, functional environment & proper guidance of the expert on the subject is inevitable. I am really indebted to my faculty of MBA department Mr. Nikhilesh Kariya under whose guidance I could conduct the research on “ A Comparative study on the Role of Service Marketing in Banking Sector(Private and National Bank)” and prepare this project report.

Marketing a service-base business is different from marketing a goods-base business. There are several major differences, including: 1. The buyer purchases are intangible 2. The service may be based on the reputation of a single person 3.

It’s more difficult to compare the quality of similar services 4.

The underlying rationale is that a customer might not appreciate the full worth of the service if they do not have a good benchmark for comparisons. However, it is worth remembering that many of the concepts, as well as many of the specific techniques, will work equally well whether they are directed at products or services.

In particular, developing a marketing strategy is much the same for products and services, in that it involves selecting target markets and formulating a marketing mix. Thus, “ instead of talking of ‘ goods’ and of ‘ services’, it is better to talk of ‘ tangibles’ and ‘ intangibles’”[2]. Levitt also went on to suggest that marketing a physical product is often more concerned with intangible aspects (frequently the `product service’ elements of the total package) than with its physical . sales after service is very imporatant in service sector.

In the formulation of service mix, the banks can follow two guidelines, first is related to the processing of product to market needs and the second is concerned with the processing of market needs to product. In the first process, the needs to the target market are anticipated and visualized and therefore, we expect the prices likely to be productive. In the second process, the banks react to the expressed needs and therefore we consider it reactive.

It is essential that every product is measured up to the accepted technical standards. This is because no consumer would buy a product, which contains technical faults. Technical perfection in service is meant prompt delivery, quick disposal, and presentation of right data, right filing, proper documentation or so.

Promotion mix includes advertising, publicity, sales promotion, word-of-mouth promotion , personal selling and telemarketing, Each of these service needs to be applied in different degree.

These components can be useful in banling , business in the following ways:- Advertising:- Advertising is paid form of communication. Banking organizations use this component of the promotion mix with motto of informing, sensing and persuading the customers. While advertising it is essential to be aware of key decision making areas so that instrumentally helps banks at micro and macro levels. Finalizing the budget: This is related to the formulation of the budget for advertisement. The bank professionals, senior executives and even the policy planners are found to be involved in the process.

The popular characters and sensational moments are likely to be impact generating. The theme for appeals and messages also needs due attention. Of course, they have a legitimate right of advertising but it is not meant that like the goods manufacturing organizations, the service generating organizations also start making invasion on culture. It is necessary to regulate a bias to gender, profession, region or so. Public relations:

In the banking services the effectiveness of public Relations is found in high magnitude.

The most dominating factor is the quality of services offered. The bank professionals, the frontline staff and the senior executives should realize that degeneration in quality would make this tool effective. 1. 13. Price Mix:- In the formulation of marketing mix, the pricing decisions occupy a place of outstanding significance.

The pricing decisions include the decisions related to interest and fee or commission charged by banks. Pricing decisions are found sinstrumental in motivating or influencing the target market. The RBI regulates the rate of interest and the Indian Banks’ Association controls other charges. In our country, the price mix is more important because the banking organizations are also supposed to sub serve the interests of the weaker sections and the backward regions. Also in making the pricing decisions, the Government Of India instrumentalists or commands everything as a shadow policy maker. This also complicates the price mix for banking sector.

The moment they witness lack of productive human resources even the new generation of information technologies would hardly produce the desired results. In addition to the professional excellence, the employees working in the foreign banks are generally value- based.

Thus we accept the fact that generation of efficiency is substantially influenced by the quality of human resources. The quality for banking sector is an aggregation of all the properties, which are found essential for generating the efficiency and projecting a fair image. Even efficiency essentially is supported by ethical dimension, humanity and humanism. The development of human resources makes the ways for the formation of human capital. Human resources can be developed through education, training and by psychological tests.

Besides instruction boards in national boards in national and regional language help the customers further. Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires. 1. 16.

The Physical Evidence:- The physical evidences include signage, reports, punch lines, other tangibles, employee’s dress code etc. The company’s financial reports are issued to the customers to emphasis or credibility. Even some of the banks follow a dress code for their internal customers. This helps the customers to feel the ease and comfort. Signage:- each and every bank has its logo by which a person can identify the company.

Bank’s wish for increasing profit: Banks have to increase their profits to create new markets, to protect and develop their market shares and to survive on the basis of intense competition and demographic chance levels. 3.

STRUCTURE 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 f anging market condition. While marketing manager is arranging the variables under firm’s control, she/he should also adopt the external variables. We could call the factors that affect banks’ market as technological developments, legal arrangements and competition. National Bank – PNB Private Bank – IDBI List of Private Banks in India :- ? Bank of Punjab ? Bank of Rajasthan ? Catholic Syrian Bank Centurion Bank ? City Union Bank ? Dhanalakshmi Bank ? Development Credit Bank ? Federal Bank ? HDFC Bank ? ICICI Bank ? IDBI Bank ? IndusInd Bank ? ING Vysya Bank ? Jammu & Kashmir Bank ? Karnataka Bank ? Laxmi Vilas Bank ? South Indian Bank ? United Western Bank ? UTI Bank National Banks :-The National Banks name are following:- ? Allahabad Bank ? Axis Bank ? Bank of Baroda ? Bank of Maharashtra ? Canara Bank ? Central Bank of India ? Dena Bank ? Indian Bank ? Orienta Bank of Commerce ? Punjab National Bank ? SBI ? State Bank of Mysore ? UCO Bank ? Vijaya Bank ? Punjab & Sind Bank State Bank of Bikaner& Jaipur ? State Bank of Hyderabad ? State Bank of Indore ? State Bank of Patiala ? State Bank of Travancore ? Syndicate Bank ? United Bank of India ? Tamilnad Mercantile Bank Ltd ? Lakshmi Vilas Bank ? Dhanalakshmi Bank Ltd DEFINING OF THE PROBLEM:- (2005), critics of Indian Regional Rural banks(RRBs) and their prevalling culture have argued that a product-focused rather than a market-oriented approach to new Service Development (NSD) is responsible for their inadequate performance.

Whatever scope I observed in my project are not exactly having all the features of the scope which I described above but also not lacking all the features. – Research study could give an idea of network expansion for capturing more compromising with quality. In future customer requirements could be added with the product and services for getting an edge over competitors. – Consumer behavior could also be used for the purpose of launching a new product with extra benefits which are required by customers for their account (saving or current ) and/or for their investments. – Factors which are responsible for the performance for bank can also be used for the modification of the strategy and product for being more profitable. – Factors which I observed while doing project study are following- 1.

Competitors 2. Customer Behaviour 3. Advertisement/promotional activities 4. Attitude of manpower and 5. Economic conditions

This literature review will analyze past and current research that has been done which relates to the motivations of attendees of arts and cultural performances. This critical analysis of literature contains facts, statistics, and predictions of different motivations to relate to the findings in the surveys collected from the Young Auditorium. It is important to understand why people attend events and performances in order to market to the appropriate target effectively.

A special event is seen as an opportunity for leisure or an opportunity to be with friends and family. This is what appeals to potential visitors and they must feel that this is what they will receive. [pic]

Leisure goals include need for entertainment, relaxation, and a social time with friends.

These two different perspectives about what one might obtain from attending a performance determine the perceived value of their visit and can explain why frequent, committed visitors enjoy and trust the performance more than an occasional visitor. RESEARCH METHODOLOGY:- The research carried out under the topic, was based on the combination of primary and secondary data. The questionnaire metod was adopted. A sample of 60 branches, which included private sector banks , was for this purpose. The customers and bank officials were surveyed.

On the other hand if the problem identified vaguely, a wrong problem is identified, or research is not clarified, then the research result may be completely useless for the management, and the research effort of the investigation will be a futile exercise. Research Design :- A research design is a master plan or model for the formal investigation. Once the formal investigation is decided, the researcher must formulate the formal plan of investigation.

A research design id the specification of methods & procedure, for acquiring the information needed for solving the problem. The formal investigation plan will concentrate on the selection of sources of information and the selection of methods and procedures for gathering the data. Data gathering forms are prepared.

Primary data are according to object of investigation and used without correction.

The collection of primary data requires large sum, energy and time. Precautions are not necessary in the use of the primary data. Secondary Data: – Secondary data means data that are already available i. e; they refer to the data, which have already been collected and analysed by some one else. When the researcher utilizes secondary data, then he has to look in to various sources from where he can obtain them. In this cause he is certainly not confronted with the problems that are usually associated with the collection of original data.

The primary data were collected directly from the sample business man customer.

Secondary source includes, magazines as well as reports available in the department and Internet. Secondary information mainly provided the background for the survey and help in providing information in the subjects for which sufficient primary information was not available. As a data collection method I have used the Questionnaire Method. Why a Questionnaire Method has been adopted? Questionnaire consists of a balanced no. Of close ended and open ended questionnaire mainly of multiple choices and scaling technique for some question where it’s necessary. Besides there are sufficient no.

It is a plan, which determines the type of respondents and their number from whom researcher has to collect the data. This plan calls for four decision. 1) Sampling Unit.

2) Sampling Size. 3) Sampling Procedure. 4) Medium for collecting sample. 1. Sampling Unit:- In this the researcher designs the target population that will be sampled.

Sample Location : Bhilai & Durg Technique use of analysis of Data- For the analysis of the “ Percentage & random sampling” has been used. on Percentage & random sampling are used to measure different psychological aspects such as attitudes, perceptions and preference of people with the help of certain pre-defined set of stimuli and instructions. We show our graphical presentation in percentage. Medium for collecting sample- Personal interview through structured questionnaire was considered most appropriate means for contacting businessman customer Geographical Area cover- The whole fieldwork has been done in BHILAI-DURG City.

Thus in short the research methodology of the survey is following:- | Research Design | | structured questionnaire with open ended & close Ended question.

Selection of the techniques. 3. Unwillingness of the respondents to answer the questions, as they do not take them seriously. 4. Incomplete knowledge about the subject, the accuracy of data.

5. They don’t have time so they answer in hurry. 6. The situation in which the customer answering, he may not like to answer is the presence of the people. ANALYSIS AND INTERPRETATION OF DATA:- If you have account than which bank you prefer;? a) IDBI Bank 40% b) PNB Bank 60% [pic] ? Do you Know about IDBI Bank ltd.

The advertisement of the bank was very effective from the first day of its airing till the fifth day and there after it starts declining. 5. The initial balance for A/C opening is Rs, 5000/- in IDBI Bank and that’s why people are reluctant in opening the same. 6. The initial balabce for A/C opening is Rs, 500/- in PNB Bank.

Conclusions:- i. Consumers of Bhilai-Durg have good awareness level about IDBI bank as well as about its services and products. ii. The advertising campaign has successfully been able to increase the market iii. share of IDBI in Bhilai-Durg . ANK LTD.

Customer complaint system can more effective and informative. v. veloping strong cultural values vi.

Social Integrity vii. Bonding with customers viii. Responsiveness ix. Fast & Decentralized decision making x. Diversification xi. Awards and Incentives based pay structure xii.

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