Introduction:-: Financial Service Refer To Services Provided by The Finance Industry. The Finance Industry

MARKETING OF FINANCIAL SERVICE:
INTRODUCTION:Financial service refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money.The financial services industry includes firms that deal with the management, investment, transfer, and lending of money. Though every company handles money in the course of doing business, financial institutions actually make money their business; rather than selling a line of physical products, they offer customers their fiscal expertise. The industry itself is very large, encompassing everything from small, local banks to the multinational investment banks.
THE FINANCIAL SERVICE IN INDIA The economic development of any country depends upon the existence of a well organized financial service. It is the financial service which supplies the necessary financial inputs for the production of goods and services which in turn promote the well beings and standard of living of the people of a country. Thus, the financial service is a broader term which brings under its fold the financial markets and the financial institutions which support the system. The major assets traded in the financial system are money and monetary assets. The responsibility of the financial system is to mobiles the savings in the form of money and monetary assets and invest them to productive ventures. An efficient functioning of the financial system facilitates the free flow of funds to more productive activities and thus promotes investment. Thus, the financial system provides the intermediation between savers and investors and promotes faster economic development.
FUNCTIONS OF THE FINANCIAL SERVICES
1. PROVISION OF LIQUIDITY:The major function of the financial system is the provision of money and monetary assets for the production of goods and services. There should not be any shortage of money for productive venture. In financial language, the money and monetary assets are referred to us liquidity. The term liquidity refers to cash or money and other assets which can be converted into cash readily without loss of values and time. Hence, all activities in a financial service are related to liquidity either provision of liquidity or trading in liquidity. In fact, in India the R.B.I has been vested with the monopoly power of issuing coins and currency notes. Commercial bank can also create cash (deposit) in the form of credit creation and other financial institution also deals in monetary assets. Over supply of money is also dangerous to the economy. In India R.B.I is the leader of the financial service and hence it has to control the money supply and creation of credit by bank and regulate all the financial institutions in the country in the best interest of the nation. It has to shoulder the responsibility of developing a sound financial service by strengthening the institutional structure and by promoting savings and investment in the country.
2. MOBILISATION OF SAVING:Another important activity of the financial service is to mobilize saving and channelize them into productive activities. The financial service should offer appropriate incentives to attract savings and make them available for more productive ventures. Thus, the financial service facilitates the transformation of saving into investment and
consumption. The financial intermediaries have to play a dominant role in this activity.
DEVELOPMENT OF FINANCIAL SERVICE IN INDIA Some serious attention was paid to the development of a sound financial service in India only after the launching of the planning era in the country. At the time of independence in 1947, there was no strong financial institutional mechanism in the country. There was absence of issuing institutions and non-participation of intermediary financial institutions. The industrial sector also had no access to the savings of the community. The capital market was very primitive and shy. The private as well as the unorganized sector played a key role in the provision of liquidity. On the whole, chaotic conditions prevailed in the system. With the adoption of the theory of mixed economy, the development of the financial system took a different turn so as to fulfill the socio-economic and political objectives. The government started creating new financial institutions to supply finance both for agricultural and industrial development and it also progressively started nationalizing some important financial institutions so that the flow of finance might be in the right direction
NATIONALISATION OF FINANCIAL INSTITUTIONS

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As started earlier the RBI is the leader of the financial service. But, it was established as a private institution in1935. It was nationalized in 1948. It was followed by the nationalisation of the imperial bank of India in 1956 by renaming it as state bank of India. In the same year, 245 life insurance companies were brought under government control by merging all of them into single corporation called life insurance Corporation of India. Another significant development in our financial service was the nationalization of 14 major commercial banks in 1969. Again, 6 banks were nationalised in 1980. This process was then extended to general insurance companies which were reorganized under the name of general Insurance Corporation of India. Thus, the important financial institutions were brought under public control. WEAKNESSES OF INDIAN FINANCIAL SERVICE After the introduction of planning, rapid industrialization has taken place. It has in turn led to the growth of the corporate sector and the government sector. In order to meet the growing requirements of the government and the industries, many innovative financial instruments have been introduced. Besides, there has been a mushroom growth of financial intermediaries to meet the ever growing financial requirements of different types of customers. Hence, the Indian financial service is more developed and integrated today than what it was 50 years ago. Yet, it suffers from some weaknesses as listed below:
1. LACK OF CO ORDINATION BETWEEN DIFFERENT FINANCIAL INSTITUTIONS:4
There are a large number of financial intermediaries. Most of the vital financial institutions are owned by the government. At the same time, the government is also the controlling authority of these institutions. In these circumstances, the problem of co-ordination arises. As there is multiplicity of institutions in the Indian financial service, there is lack of co-ordination in the working of these institutions.
2. MONOPOLISTIC MARKET STRUCTURES:In India some financial institutions are so large that they have created a monopolistic market structure in the financial services. For instance the entire life insurance business is in the hands of LIC. The UTI has more or less monopolized the mutual fund industry. The weakness of this large structure is that it could lead to inefficiency in their working or mismanagement or lack of effort in mobilizing savings of the public and so on ultimately it would retard the development of the financial service of the country itself.
3. DOMINANCE OF DEVELOPMENT BANKS IN INDUSTRIAL FINANCING:The development banks constitute the backbones of the Indian financial service occupying an important place in the capital market. The industrial financing today in India is largely through the financial institutions created by the government both at the national and regional levels. These development banks act as distributive agencies only, since, they derive most of their funds from their sponsors. As such, they fail to mobilize the savings of the public. This would be
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serious bottleneck which stands in the way of the growth of an efficient financial service in the country. For industries abroad, institutional finance has been a result of institutionalization of personal savings through media like bank, LIC, pension and provident funds, unit trust and so on. But they play a less significant role in Indian financial service, as far as industrial financing is concerned. However, in recent times attempts are being made to raise funds from the public through the issue of bonds, units, debentures and so on. It will go a long way in forging a link between the normal channels of savings and the distributing mechanism.
4. INACTIVE AND ERRATIC CAPITAL MARKET:The important function of any capital market is to promote economic development through mobilization of saving and their distribution to productive ventures. As far as industrial finance in india is concerned, corporate customers are able to raise their financial resources through development banks. So, they need not go to the capital market. Moreover, they dont resort to capital market since it is very erratic and inactive. Investors too prefer investment in physical assets to investment in financial assets. The weakness of the capital market is a serious problem in our financial service.
5. IMPRUDENT FINANCIAL PRACTICE:-
The dominance of development banks developed imprudent financial practice among corporate customers. The development banks provide most of the funds in the form of term loans. So there is a preponderance of debt in the financial structure of corporate enterprises. This predominance of debt capital has made the capital structure of the borrowing concerns uneven and lopsided. To make matter worse, when corporate enterprises face any financial crisis, these financial institutions permit a greater use of debt than is warranted. It is against the traditional concept of a sound capital structure. However, in recent times all efforts have been taken to activate the capital market. Integration is also taking place between different financial institutions. For instance, the unit linked insurance schemes of the UTI are being offered to the public in collaboration with the LIC. Similarly the refinance and rediscounting facilities provided by the IDBI aim at integration. Thus, the Indian financial system has become a developed one.
MARKETING OF INSURANCE SERVICES

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INTRODUCTION:India has about 300 million people who can afford to buy life, health, and pension plan products. Out of this only 20%have insurance-and that too covers only 25% of their needs and financial capacity. The remaining 80% have no insurance cover. The life insurance market in India therefore has tremendous growth potential. An estimated existing insurance market in India, in terms of premium income, reveals that out of an insurable population of 300 million, 50 million have the capacity to pay a premium of rs 10,000 per year, 100 million have the capacity to pay rs 7000 per year and 150 million can pay rs 3500 per year. On this basis the total annual insurance premium would be rs 1750bn. The low level of penetration of life insurance in India compared to other nations can be judged by a comparison of per capital life premium, which is low in India. It has been estimated that life premium per capita us $ in 1994 in Japan is 3.817,in UK it is 1.280,in us it is 964 and in India it is only 4.clearly,there is a scope to raise per capital life premium. Secondly life premium as a percentage of GDP is very low (1.29%) in India as compared to other countries. It is 10.10% in japan, 9.10% in UK and 7.31%in US. India has traditionally been a highly savings oriented country, like Japan. It might be possible to raise life premium as a percentage of GDP from existing level of 1.29%. Thirdly, life premium as a percentage of GDS (gross domestic saving) is also very low in India-only 5.95%.the comparative data reveals that it is 52.22% in UK,51.55% in South Africa,32.46% in Japan,26.2% in France. It
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may be possible to raise the same in India through effective exploitation of potential by creating and marketing innovative insurance products.
REFORMS AND IMPLICATIONS:The liberalization of the Indian insurance sector has been the subject of much heard debate for some years. The sector is now open to private competition. The Insurance Regulatory and Development Authority bill will clear the way for private entry into insurance as the government is keen to invite private sector participation into insurance. To address those concerns, the bill requires direct insurers to have a minimum paid-up capital of Rs 1 billion; to invest policyholders funds only in India; and to restrict international companies to a minority equity holding equity holding of 26% in any new company. Indian promoters will also have to dilute their equity holdings to 26% over 10 years period. Over the past three years, around 30 companies have expressed interest in entering the sector and many foreign and Indian companies have arranged alliances. Whether the insurer is old or new, private or public, expanding the market will present challenges. A number of foreign insurance companies have set up representative offices in India and also have tied up with various asset management companies companies. They have either signed MOUs with Indian companies or are tying to do the same. Most potential entrants are keen to access financial organizations with a strong infrastructure, good customer bases and brand equity. INDIAN COMPANIES WITH FOREIGN PARTNERSHIP
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Indian Partner Alpic Finance Tata CK Birla Group ICICI Sundaram Finance
International Partner Allianz Holding, Germany American Int. Group, US Zurich Insurance, Switzerland Prudential, UK Winterthur Switzerland Insurance,
Hindustan Times Ranbaxy HDFC Bombay Dyeing DCM Shriram Dabur Group Kotak Mahindra Godrej Sanmar Group
Commercial Union, UK Cigna, US Standard Life, UK General Accident, UK Royal Sun Alliance, UK Allstate, US Chubb, US J Rothschild, UK Gio, Australia
Source: U.S. Department of State FY 2001 Country Commercial Guide: India
MARKETING MIX IN THE INSURANCE SERVICES:PRODUCT:-
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Life Insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event insured against. usually the insurance contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death if it occurs earlier. There is a price to be paid for this benefit. Among other things, the contract also provides for the payment of premiums by the assured. Life Insurance is universally acknowledged as a tool to eliminate risk, substitute certainty for uncertainty and ensue timely aid for the family in the unfortunate event of the death of the breadwinner. Life Insurance helps in two ways: dealing with premature death; which leaves dependent families to fend for themselves and old age without visible means of support. PRODUCT BENEFITS: Superior to any other savings plan:Unlike any other savings plan, a life insurance policy affords full protection against risk of death. In the event of death of a policyholder, the insurance company makes available the full sum assured to policyholder near and dear ones. In comparison any other savings plan would amount to only the total savings accumulated till date.
Encourages and forces thrift:-
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A savings deposit can easily be withdrawn. The payment of life insurance however is considered sacrosanct and is viewed with the same seriousness as the payment of interest on a mortgage. Thus it brings about compulsory savings. Ready marketability and suitability for quick borrowing:A life insurance policy can, after a certain time period (generally three years), be surrendered for a cash value. The policy is also acceptable as a security for a commercial loan.eg:-student loan. It is particularly advisable for housing loans when an accepted LIC policy may also cause the lending institutions to give loan at lower interest rates. Accidental death benefits:Many policies can also provide for an extra sum to be paid (typically equal to sum assured) if death occurs as a result of accident. PRICING:On the nationalization of Life Insurance in 1956, the premium ratings of Oriental Government Security Life Assurance Company were adopted bye LIC with a reduction of 5% of the tabular premium or Re 1 per thousand sum assured, whichever was less. This reduction was made in anticipation of economies of scale that would emerge on the merger of different insurers into a single entity. LIC made several downward revisions in its premium rating in order to benefit the sub standard lives and also substantially reduced the number of vocations that were classified as hazardous. The additional premium being charged for granting accident benefit was reduced from Re 2 to Re 1
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per thousand sum assured. The charging of extra premium in respect of policies on female lives was also discontinued. The earliest mortality table of assured lives constructed in India related to period 1905-25.this mortality was based on the experience of Oriental Government Security Life Assurance Company, the new mortality table was published in 1938.this formed the basis of the new premium rates of most insurance companies in India. In 1954, after about a decade and a half, aided by experience, some downward adjustments were made in this table. The revised table was known as the Modified Oriented Mortality table. Today, the non-profit premium rates in use are based on the latest mortality table constructed during the period 1975-79 and the inclusive of profit premium rates are based on the earlier mortality table published in 1970-73. The desirability of revision of premium rating of with profit policies, one needs to consider the practical problems that are likely to crop up. The most obvious one being that any such revision will lend to inequity between different generation of policyholder. This can be set right only by adopting a differential bonus system.i.e. The rates of bonus to be declared in respect of policies taken before revision of premium have to be different from the rates declared in respect of policies taken after revision. The three main factors used for determining the premium rates under a life insurance plan are mortality, expenses and interest. Significant changes in any of these factors normally entail revision of premium rates.
MORTALITY:-
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The average rate of mortality is one of the main considerations when deciding upon the pricing strategy. In a country like South Africa which is unfortunate plagued by a host of diseases especially like AIDS, the threat to life is very important. The price of the installments, its frequency and its premium chares are all decided accordingly. EXPENSES:The cost of processing, the kind of infrastructure costs involved and the payment made to agents, reinsurance companies as well as the registration etc are all incorporated into the costs of the installments and premium sum and forms the integral part of pricing strategy. INTEREST:The interest rate is one of major factor, which determines peoples willingness to invest in insurance issues. If the interest rate provided by the banks of other financial instruments is much greater than the perceived returns of insurance premiums the people would not be willing to put their funds in this sector.
DISTRIBUTION:Distribution is a key determinant of success for all insurance companies and the nationalized insurers currently have a large reach and presence. Building a distribution network is expensive and time consuming. Yet if the insurers are to take advantage of Indias large population and reach a profitable mass of customers, new distribution avenues and alliances will be imperative.
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This is also true for the nationalized corporations, which must find fresh avenues to reach existing and new customers.
Initially, insurance was seen as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and place a high premium on brand name and reliability. As products become simpler and awareness increases, they become off-
the-shelf commodity products. Various intermediaries, not necessarily insurance companies are selling insurance. In UK, for example, retailer Marks & Spencer now sells insurance products. At this point; buyers look for low price. Brand loyalty could shift from the insurer to the seller. The financial services industries, worldwide, has successfully used remote distribution channels such as the telephone or the Internet to reach more customers, cut out intermediaries, bring down overheads and increases profitability. A well known example is the UK insurer, Direct Line. Established in 1985, it relied on telephone sales and low pricing to become
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the UKs largest motor insurance operator within a decade. It then moved into household insurance. Some potential Indian players hope that their anticipated technology advantage will allow them to increase their reach, partly by using remote channels. In India, insurance, especially life insurance, is still a service product. In India technology will not replace a distribution network, though it will offer advantages like better customer service. Banks and finance companies can emerge as an attractive distribution channel for insurance. This trend will lead by two factors, which already apply in other world markets. First banking, insurance, fund management and other financial services will all form a set of services rather than disparate ones. Second, banks and finance companies are being driven to increase their profitability and provide maximum value to their customers. Therefore, they are themselves looking for a range of products to distribute. In India too, banks hope to maximize expensive existing networks by selling a range of products. Rather than ownership a loose network of alliance between insurers and bank will emerge. Another innovative distribution channel that could be used are non-financial organizations. For example, insurance for consumer items such as refrigerators can be offered at the point of sale. This piggybacks on a existing distribution channel and increases the likelihood of insurance sales. Alliance with manufacturers or retailers of consumer goods will be possible. With increasing competition, they are wooing customers with various incentives, of which insurance can be one.
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Another potential channel that reduces the need for an owned distribution network is worksite marketing. Insurers will be able to market pension, health insurance, and even other general covers through employers to their employees. These products may be purchased by the employer or imply marketed at the workplace with the employers cooperation. PROCESS:The process involved in the insurance industry should be customer friendly. The speed and accuracy of payment is of vital importance. The processing methodology should be such that it provides total ease and convenience to the customers. Installments schemes should also be streamlined to cater to growing demands of the customers and keep pace with the competition in the market. The new developments, which will smoothen the process flow, are IT and data warehousing. Firstly IT will help improve customer service levels considerably. Secondly, the use of data warehousing, management and mining will help to gauge the profitability and potential of various customer and product segments. Understanding the customer better will allow insurance companies to design appropriate products, determine pricing correctly and increase profitability. PEOPLE:Being a service industry involving a high level of people interaction, it is important to use this resource efficiently in order to satisfy customers as also to have competitive edge in the market. The two key areas which needs to be kept under consideration are training and development and strong relationships with intermediaries.
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Training the employees to introduce then to new products, use of information technology for efficiency, both at the staff and the agents level or the distribution organizations is one of the key areas to look into. Also building strong relationships with intermediaries, such as agents, will help in meeting customers needs and serve them effectively. Thus by using the marketing mix of insurance properly insurance products can be sold efficiently.
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BANK MARKETING INTRODUCTION:Indian banking sector historically passed through five stages: preindependence, post independence, pre-nationalization, nationalization and post-liberalization stages. In all these stages, other than the last stage, marketing was always considered not to be a bankers cup of tea. But today, it is considered to be an integral management function in banking sector. The competitive climate in the Indian financial market has changed dramatically over the last few years. At the same time changes have been also taking place in the government regulations and technology. The expectations of the customers are also changing. Business houses are entering into financial service activities. The government has permitted public sector banks to start mutual fund trusts and other financial service subsidiaries. Private sector banks and foreign banks have also introduced some new innovative services. Few Indian banks initiated experimenting with new innovative services by offering Automatic Teller Machine (ATM) which provides 24 hours service. The Reserve Bank of India (RBI) has fixed the minimum floor rate for lending with no upper limit for corporate customers. More and more corporate prefer to raise money directly from the market than from banks. Many household customers now prefer to take consumer durable loans or buy on installment credit rather than save for few years for buying the consumer durable. As a result of this growing level of competition and the rapid pace of change, marketing is emerging as an important element in banks activities. Traditionally, Indian banks have not
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really paid adequate attention to marketing and market research. There is a need for Indian banks to keep pace with their competitors by using marketing techniques for business growth. BANK MARKETING:Bank marketing is defined as follows Bank marketing is the aggregate of function, directed at providing services to satisfy customers financial (and other related) needs and wants, more effectively and efficiently than the competitors keeping in view the organization objectives of the bank. Bank marketing is the aggregate of functions is the sum total of all individual activities consisting of an integrated effort to discover, create, arouse and satisfy customer needs. This means, without exception, that each individual working in the bank is a marketing person who contributes to the total satisfaction to consumers and the bank should ultimately develop customer orientation among all the personnel of the bank. Bank marketing deals with providing services to satisfy customers financial needs and wants. Banks have to find out the financial needs of the customers and offer the services which can satisfy those needs. Banks may also require to satisfy the customers financial and other related needs and wants. To satisfy these financial needs, customers want specific services. Different banks offer different benefits by offering various schemes which can take care of the wants of the customers. Marketing helps on achieving the organizational objectives of the bank. Thus marketing is equally applicable to achieve commercial and social objectives of the banks. Indian banks have dual organizational objectivescommercial objective to make profits and social objective which is a
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developmental role, particularly in the rural areas. Services area approach adopted recently by the Indian banks is a marketing approach whereby a specific target market is assigned to each bank branch and after identification of the needs of the customers all the efforts of the bank are required to be concentrated to satisfy the customers to achieve the banks social objectives. Hence, the marketing concept is essentially about the following few things which contribute towards banks success: a) The bank cannot exist without the customers. b) The purpose of the bank is to create, win, and keep a customer. c) It is also a way of organizing the bank. The starting point for organizational design should be the customer and the bank should ensure that the services are performed and delivered in the most effective way. Service facilities also should be designed for customers convenience. d) Ultimate aim of a bank is to deliver total satisfaction to the customer. e) Customer satisfaction is affected by the performance of all the personnel of the bank. All the techniques and strategies of marketing are used so that ultimately they induce the people to do business with a particular bank. To create and keep a customer means doing all those things so that people would like to do business and continue to do it with a particular bank rather than with the competitors. It cannot stay in a business if it does not attract and hold enough customers, no matter how efficiently it operates. Marketing is an organizational philosophy. This philosophy demands the satisfaction of the customers needs as the prerequisite for the existence and
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the survival of the bank. Marketing is so basic that it cannot be considered as a separate function. It is the whole business seen from the point of view of its final result, which is the customers point of view. Marketing for service industry like banks is a philosophy to be understood by the whole organization-from the chief executive to the person working at the counter. The first and most important step in applying the marketing concept is to have a whole hearted commitment to customer orientation by all the employees. Marketing is an attitude of mind. This means that the central focus of all the activities of a bank is customer. Marketing is not a separate function for banks. The marketing function in Indian bank is required to be integrated with operation. A separate marketing department may widen the gap between marketing and operations. A traditional marketing department (and officers with marketing designations) usually cannot be responsible for the total marketing function of a service organization like banks. Introduction of such marketing department may easily influence the bank in an unfavorable direction. Personnel working in other departments like operations and back of the counters stop worrying about their customer-related responsibilities and totally concentrate on just handling operations and other duties mechanically. The reason is because they feel that the bank now has a marketing specialist and hence they need not bother about customer related responsibilities any longer. Some Indian banks have started marketing department which only takes care of deposit services (deposit mobilization) functions only. In most of the cases it is a new name given to the old deposit mobilization
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department. Functions remain the same with somewhat more promotional activities. Banks dont need this type of separate positions, branch manager and counter clerks themselves are the marketing persons. Marketing is much more than just advertising and promotion; it is a basic pat of total business operation. What is required for the bank is the market orientation and customer consciousness among all the personnel of the bank. For developing marketing philosophy and marketing culture, a bank may require a marketing coordinator or integrator at the head office reporting directly to the Chief Executive for effective coordination of different functions, such as marketed research, training, public relations, advertising and business developments, to ensure customer satisfaction. The Executive Director is most suitable person to do so, though ultimately the Chief Executive is responsible for the total marketing function. The marketing function involves the following:a) MARKET RESEARCH:To identify customers financial needs and wants and forecasting and researching future financial markets needs and competitors activities. b) PRODUCT DEVELOPMENT:To appropriate products to meet consumers financial needs. c) PRICING OF THE SERVICE:The promotional activities and distribution system in accordance with the guidelines and rules of the Reserve Bank of India and at the same time.
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d) DEVELOPING MARKET ORIENTATION:The marketing culture-among all the customer-consciousness personnel of the bank should be done thorough efficient training. Thus it is important to recognize the fundamentally different functions that bank marketing has to perform. Since banks have to attract deposits and attract users of funds and other services, marketing problems are more complex in banks than in other commercial concerns. MARKET RESEARCH:Marketing begins with information about the market in which the operates. Bank is market oriented simply means that a banks decisions are made thorough the eyes of the customers of the bank. The bank which really practices marketing or which is market oriented, while thinking of
introducing a new type of cheques system or a new service for example, will not make a decision on the alternatives until it has found out what its customers want. A non-market oriented bank when faced with the same problem would mostly do what is the easiest way out for its operations, systems and costs considerations without any regard for what customers might prefer. The main problem in marketing is discovering what needs the customers have and determining how the bank can meet these needs. There are two main requirements. First, knowing as much as possible about each of the banks markets/customers, and secondly, knowing as much as possible about the plans of the banks competitors in their attempts to exploit these markets.
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Marketing begins with this information and market research is the process by which a bank attempts to obtain such customer and competitor information. Thus marketing research is defined as market research is the study of consumers attitude, habits and behavior towards satisfying their needs and wants on the one side and the study of competitors activities on the other to help the management to take better marketing decision. Market research in banking is an essential tool of marketing for effective planning. Market research can detect the future changes which can be adjusted in planning process. It can be used to gather more knowledge about the market in which the bank is operating. With this information new services can be developed and existing services can be improved. It also serves as a communication channel between the market and the bank. The single most important reason for undertaking market research is to improve the quality of managerial decision making. MARKET RESEARCH IN INDIAN BANKS After enquiring with all the public and 14 private sector banks whether they had undertaken any market research studies. The following board areas of market research were considered for the study: (a) New service development, (b) New service product acceptance, (c) Research and development of existing financial service, (d) Bank images study, (e) Measuring banks advertising effectiveness, (f) Measurement of market potentials,
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Bank
Title of the Market Research Study

1. Allahabad Bank
a. Survey on Customer Service
b. Marketing of deposits and allied services to non-residents 2. Bank Baroda 3. Canara Bank 4. Central Bank India 5. Indian Overseas Bank 6. Oriental Bank of a. Study of customer service in OBC with special reference to metropolitan branches (1989) a. Sample survey on customers responses (1987) b. Sample survey on customer service (1988) c. Study on deposit linked housing loan scheme (1982) a. Potential areas for future business expansion a. Marketing research study for two new deposit schemes (1989) a. Market survey of customer services of b. Marketing deposits (Customers) of customers opinion (1958)
Commerce 7. Punjab National Bank
8. Punjab and a. Study on customer turnover (mail questionnaire based study Sind Bank of customers who have closed their accounts) (1989) b. Changing Profile of Punjab and Sind Banks Customers and their expectorations, a survey based study (1988) 9. State Bank a. A survey on customer service, level of customer satisfaction of Bikaner 10.Syndicate Bank and customer expectations (1998) a. Evaluation Study on the quality of customer service (1989) b. Marketing of bank service with special reference to branches
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in Bombay city of Syndicate Bank-customer service (1979) 11.Union Bank India 12.UCO Bank 13.United Bank India 14.Vijay Bank 15.Karur Vysya Bank (g) Market research of competitive service products, (h) Customers opinion study, (i) Customer profile study and Market share analysis. In response to the inquiry information was received from 17 banks. Out of these banks, 14 are public sector banks and 3 are private sector banks. Two nationalized banks and two private sector banks informed that they have not conducted any markets research studies. a. Customers opinion study (1989) a. Report of the survey on customer opinion (1987) of b. Improvement of customer service in a metropolitan branch (1979) a. Report of the customer service survey (1988) a. Study on the image of the bank (1989) of a. Customer responses (Opinion) survey (1988)
Information regarding Bank wise Market Research Studies Most of these market research studies were conducted for internal use and no formal reports were prepared. It is important to note the subject or issue researched by the bank. The most important subject for market research in terms of the number of studies conducted, is the customer service /
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customer profile opinion studies. Few banks have conducted even more than one customer service / opinion studies. MARKETING MIX FOR BANKING SERVICES The formulation of marketing mix for the banking services is the prime responsibility of the bank professional who based on their expertise and excellence attempt to market the services and schemes profitably. The bank professionals having world class excellence make possible frequency in the innovation processes which simplify their task of selling more but spending less. The four sub mixes of the marketing mix, such as the product mix, the promotion mix, the price mix and the place mix, no doubt, are found significant even to the banking organizations but in addition to the traditional combination of receipts, the marketing experts have also been talking about some more mixes for getting the best result. The People as a sub mix is now found getting a new place in the management of marketing mix. It is right to mention that the quality of people/employees serving an organization assumes a place of outstanding significance. This requires a strong emphasis on the development of personally-committed, value-based, efficient employees who contribute substantially to the process of making the efforts cost effective. In addition, we also find some of the marketing experts talking about a new mix, i.e. physical appearance. In the corporate world, the personal care dimension thus becomes important. The employees are supposed to be well dressed, smart and active. Besides, we also find emphasis on Process which gravitates our attention on the way of offering the services. It is only not sufficient that you promise quality services. It is much more impact
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generating that your promises reach to the ultimate users without any distortion. The banking organizations, of late, face a number of challenges and the organizations assigning an overriding priority to the formulation processes get a success. The formulation of marketing mix is just like the combination of ingredients, spices in the cooking process. THE PRODUCT MIX: The banks primarily deal in services and therefore, the formulation of product mix is required to be in the face of changing business environmental conditions. Of course the public sector commercial banks have launched a number of polices and programmers for the development of backward regions and welfare of the weaker sections of the society but at the same it is also right to mention that their development-oriented welfare programmes are not optimal to the national socio-economic requirements. The changing psychology, the increasing expectations, the rising income, the changing lifestyles, the increasing domination of foreign banks and the changing needs and requirements of customers at large make it essential that they innovate their service mix and make them of world class. Against this background, we find it significant that the banking organizations minify, magnify combine and modify their service mix. It is essential that ever product is measured up to the accepted technical standards. This is due to the fact that no consumer would buy a product which contains technical faults. Technical perfection in service is meant prompt delivery, quick disposal, presentation of right facts and figures, right filing proper documentation or so. PRODUCT PORTFOLIO:
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The bank professional while formulating the product mix need to assign due weightage to the product portfolio. By the concept product portfolio, emphasis is on including the different types of services/ schemes found at the different stages of the product life cycle. The portfolio denotes a combination or an assortment of different types of products generating more or less in proportion to their demand. The quality of product portfolio determines the magnitude of success. It is excellence of bank professionals that help them in having a sound product portfolio.
We find the composition of a family sound, if members of all the age groups are given due place. Like this, the composition or blending of a service mix
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is considered to be sound, if well established and likely to be profitable schemes are included in the mix. It is against this background that a study and analysis of product portfolio is found significant. The bank professionals are supposed to perform the responsibility of composing the same. A sound product portfolio is essential but its process of constitution is difficult. An organization with a sound product portfolio gets a conducive environment and successes in increasing the sensitivity of marketing decisions. The banking organizations need a sound product portfolio and the bank professionals bear the responsibility of getting it done suitably and effectively. If the banks rely solely on their established services and schemes, the multidimensional problems would crop up in the long run because when the well established services/schemes would start saturating or generating losses, the commercial viability of banks would of course, be questioned. DESIGNING AN ATTRACTIVE PACKAGE In the formulation of product mix for the banking organization, the designing of package is found important. Packaging decision means decision related to the formulation of a mix of different schemes and services. Developing an attractive package required professional excellence and therefore, the bank professionals are required to be aware of the different key issues influencing the formulation process. What the package should basically be or do for the particular target. A number of schemes and services are included in the service mix of bank product and all the services or schemes cant be preferred by all. This makes i t essential that a bank manager thinks in favour of developing a package. Importance of packaging
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cant be underestimated as it performs process of attracting and satisfying the customers. It is an important component of the product mix and a bank manager while formulating or designing a package needs to assign due weightage to the formulation process. While developing a package, it is essential that the packages offered are efficacious in establishing an edge over the packages of competitors. Thus needs and preferences of the target market in addition to the packages offered by the competitors need due weightage while designing a package. In the designing process the bank professionals can make a package, an ideal combination of both, the core and peripheral services. The main thing in the process is to make it profitable, convenient and productive to the customers so that they prefer to transact with the bank. For the bank professional, it is an important persuasive effort that helps in increasing the business even without developing or innovating the services or schemes. PRODUCT DEVELOPMENT: The development of a product is an ongoing process. The banking organizations also need to develop new services and schemes. . By minifying, combining, modifying and magnifying, the banking organizations can give to the services or scheme a new look. The regulations of the Reserve Bank of India, no doubt stand as a barrier but professionally sound marketers make it possible even without violating the rules and regulations. The banking organizations in general have been found developing product by including some new properties or features. Generally we find two processes for the development of product. The first process is found
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proactive since the needs of the target market are anticipated and highlighted. The second process is reactive and in this context the banks respond to the expressed needs of the target. PROMOTION MIX promotion mix is a mix in which different components of promotion such as advertising, publicity, sales promotion, word-of-mouth promotion, personal selling and telemarketing are given due weightage. The different components of promotion help bank professionals in promotion the banking business. ADVERTISING: Like other organizations, the banking organizations also use this component of the promotion mix with the motto of informing, sensing and persuading the customers. While advertising, it is essential to know about the key decision making areas so that its instrumentality helps bank organization both at micro and macro levels. FINALSING THE BUDGET: This is related to the formulation of a budget for advertisement. The bank professionals, senior executives and even the police planners are found involved in the process. The formulation of a sound budget is essential to remove the financial constraint in the process. SELECTING A SUITABLE VEHICLE: There are a number of devices to advertise, such as broadcast media, telecast media and the print media. In the face of budgetary provisions, one needs to
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select a suitable vehicle. The latest developments in the print technology have made print media effective. The messages, appeals can be presented in a very effective way. MAKING POSSIBLE CREATIVITY: The advertising professionals bear the responsibility of making the appeals, slogans, messages more creative. The banking organizations should seek the cooperation of leading advertising professionals for that very purpose. INSTRUMENTALITY OF BRANCH MANAGER: At micro level, a branch manager bears the responsibility of advertising locally in his / her command area so that the messages, appeals reach to the target customers of the command area. Of course one finds a budget for advertisement at the apex level but the business of a particular branch is considerably influenced by the local advertisements. If we talk about the cause-related marketing, it is the instrumentality of a branch manager that makes possible the identification of local events, moments and make advertisements condition-oriented. PUBLIC RELATION: Almost all the organization need to develop and strengthen the public relations activities to promote their business. We find this component of the promotion mix effective even in the banking organizations. We cant deny that in the banking services, the effectiveness of public relations is found of high magnitude. It is in this context that we find a bit difference in the designing of the mix of promoting the banking services. Of course in the consumer goods manufacturing industries, we find advertisements
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occupying a place of outstanding significance but when we talk about the service generating organizations in general and the banking organizations in particular, we find public relations and personal selling bearing high degree of importance. It is not meant that the banking organizations are not required to advertise but it is meant that the bank executives unlike the executives of other consumer goods manufacturing organizations focus on public relations and personal.
PERSONAL SELLING: The personal selling is found instrumental in promoting the banking business. It is just a process of communication in which an individual exercise his/her personal potentials, tact, skill and ability to influence the impulse buying of the customers. Since we get in immediate feed back, the personal selling activities energies the process of communication very effectively. The personal selling in an art of persuasion. It is a highly distinctive form of promoting sale. In personal selling, we find inter-personal or two-way communication that makes the ways for a feed back. There is no doubt in it that the goods or services are found half sold when the outstanding properties are well told. This are of telling and selling is known as personal selling in which an individual based on his/her expertise attempts to transform the prospects into customers. Some of the customers are found highly aware of the developments, they are found well informed. On the other hand, other category of customers who are in dark. Here, the branch managers are expected to match the level of
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awareness of customers. As for instance, Mr. A goes up the matrix but Mr. B has not enough time for the branch managers. The branch managers are supposed to prepare a synopsis of their sales talk. Not surprisingly the highly aware customers are found in apposition to make independent decisions and know all about. While selling to the less aware customers, the managers should stress on the main features of the services and the expected benefits of these services.
SALES PROMOTION: It is natural that like other organizations, the banking organizations also think in favour of promotional incentives both to the bankers as well as the customers. The banking organizations make provisions for incentives.
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PORTFOLIO MANAGEMENT SERVICES MARKETING INTRODUCTION:Portfolio services are those services offered to investors with a general responsibility to maximize returns. None-the-less these services have a variety. Portfolio management services (PMS) is a rising star in the financial sector. SCOPE OF PMS:A portfolio management service refers to the services provided to the investors wherein the agency takes the responsibility of using the fund effectively for the maximum results. The agency converts the funds into compatible portfolios on the basis of the objectives and constrains of the investor. It continuously evaluates and makes necessary adjustments for better results. The financial services in India are expanding and experiencing a boom because of attraction of a good return in a shorter period is very tempting for the investors. Although there is no regulation, the Securities Exchange Board of India (SEBI) has expressed that only registered merchant banker should be allowed to render portfolio management services. Nevertheless, several traditional brokers and financial companies are
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venturing into it and catering to chosen high net worth NRIs and Indian clients on an informal basis. Merchant banking subsidiaries of banks and financial companies are also providing these services to corporate class. The investments in these cases are restricted to fixed income securities, unit and money market instruments, especially the call money and the bill markets. Given the boom in the market, the volume has increased manifold inviting severe competition. The complexity is compounded due to the Reserve Bank of India (RBI) and some other restrictions. This will mean that the companies will have to give good service to their clients as the differentiation in the offer will be slowly be erased. Portfolio management begins with the discussion of the investors
objectives, constrains and preferences and their relationship with the available investment opportunities. This will lead to a well defined portfolio policy and strategy statements on the allocation of funds among various types of assets, timing of investments and disinvestments. This is followed by the construction of a compatible portfolio and execution of buy and sells orders. Thereafter, the portfolio is valued and reviewed periodically in the light of the changing market conditions and the investors interest. Finally the performance of the portfolio is measured and revisions are carried out whenever necessary. The objective of the exercise is to build a portfolio that shows continuous appreciation in its value by optimizing the results and minimizing risks. TYPES OF PORTFOLIO MANAGEMENT:The PMS offered by the industry can be classified into three types. These types, however, in accordance with RBI guidelines that place the risk on the
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investors, do not guarantee the safety as well as the return of principle amount. The services differ on the basis of the discretion lying with the firm in managing the portfolio. NON-DISCRETIONARY PMS:This service is targeted towards investors who would like to make their own decision regarding the use of their funds-these are generally large portfolio owners. The role of the firm is in the execution of the order of the investors. The orders are accepted on telephones and a password is given to client for security and easy access. The firm provides monthly reports of the transactions and the balance in the clients settlement account. DELEGATED INVESTMENT MANAGEMENT:This discretionary service is for clients who would leave the management of their portfolios to the firm. This service is more attractive to the provider as this gives the firm a freedom to use its knowledge and judgment. The client is interested in better return performance of the portfolio. The delegation of the rights to buy and sell the securities is performed within a framework designed by the client and the portfolio manager, keeping in mind the interest of the investors and the firm. The portfolio manager handles the administrative work with regard to the portfolio and provides monthly reports on buying and selling transactions, portfolio valuation and the balance in settlement account. This service is preferred by investors who have limited knowledge on the money market or are risk takers. New entrants like Times Guaranty and Kotak Mahindra are offering such services. OPTIONAL:39
In this kind of service the provider offers a non-discretionary PMS in the beginning and as it gains expertise and develops its infrastructure, it can offer any two types of stated above to the clients depending on their choice. Besides basic offer, the firm also provide several other services like tax counseling sessions, borrowing against securities, circulation of odd-lots within the clients portfolios, temporary overdraft facility etc.
PORTFOLIO MANAGEMENT: RETURN ON INVESTMENTS:Although the RBI guidelines do not permit the provision of any guaranteed return or security of the principal, the firms offer a return of 14-35 % to their clients. The return depends on the tenure of association and the market index. FEE CHARGED:A variety of arrangements exist between the portfolio manager and their clients with regard to the fee charged. Some assure a minimum rate of return and no fee is charged unless this return is generated for the clients. LOCK-IN PERIOD:This period varies from three months to two years. Some firms provide the service without restrictions. INVESTMENTS:-
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Portfolio managers favor the investments of the funds in a mix of money and capital market instruments. The choice of instruments depends on the tax liability and the risk profile of clients. INTERFACE WITH CLIENTS:The intensity of interface is determined by the type of PMS acquired by the client. In case non-discretionary PMS, the interaction is limited to the provision of regular information about the status of clients portfolio. The discretionary PMS demands a higher level of interaction. The portfolio manager has to develop a relationship with the client and try to understand the clients needs. A continuous two-way flow of information is necessary. INTERFACE WITH BROKERS AND STOCK EXCHANGE:Portfolio managers take the service of the brokers for better investments of funds. Many firms have in-house brokers others take help of panel of approved brokers. Orders to brokers are sent on a hot-line or on their visit to the firms. The portfolio managers visit the stock market very frequently. RESEARCH, ANALYSIS, AND SOURCES OF
INFORMATION:Since investments are made with the objective of a long term benefit, portfolio managers consider the fundamental analysis of scrips essentialthis helps them pick only strong scrips. For this purpose industry reports are prepared. Subsequently, in a particular industry, company wise reports are prepared and analyzed. The information required in this regard is collected from annual reports of the companies, queries sent to them, plant visits and publications. A number of companies have research departments that
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maintain and update such data. Several software package are also available in the market. The timing of purchase and sale is determined through technical analysis. The transaction is initiated only when the technicians support the fundamental analysis. MAINTENANCE OF ACCOUNTS:Under RBI guidelines on portfolio management, the firms have to maintain separate accounts for each client. This is followed due to the implications of the provisions of the Income Tax Act and the Companies Act. Public sector mutual funds are exempted from income tax and proceedings can be distributed among the investors. The private sectors have to pay a tax of 40% plus surcharge of 15% on the returns. The industry is taking help of computer packages that split the pooled investments and also the return. SERVICE MARKETING IMPLICATIONS:Service marketing is characterized by the management of expectations of the customers. The basic nature of services of intangibility and inseparability from the provider creates many a hurdle for the service marketers. Intangibility makes it difficult for the provider to communicate to customers in very precise terms. It also poses problems for the customers as they find it difficult to differentiate and evaluate the services of the portfolio mangers. In order to create a distinction in the market, portfolio managers have to perform three major tasks: Designing services strategy Tangibilisation of services Developing services systems
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DESIGNING SERVICES STRATEGY:The services strategy of PMS has to aim at satisfying two major expectations- credibility and professional relationship. Credibility is built over a period of time. It is based on the performance of PMS on several factors like the return on investment, satisfaction of the information needs at the time required, competent handling of the portfolio depending on the risk profile of the clients, image of the company as a whole and the allied services provided by the company. The professional relationship requires that the providers of the service should be well trained at not just portfolio management techniques but also at communication and behavioral skills. Clear understanding of the kind of investors and his attitude towards the service is important. Thus PMS should concentrate not only on service provided and clients handling but also towards its employees. The strategy has to be two-pronged. TANGIBILISATION OF PMS:One of the basic nature of PMS is that it is intangible in nature the customer does not see or touch anything to decide before buying the service. This creates a higher perceived risk. In order to create enough transactional trust in the investors, the firm has to tangibilies its services. A PMS can tangiblise its service in the following ways: A well equipped information processing technology which will focus on the information needs of the client. This will help the firm in providing accurate and fast information to clients. The provision of
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the information on the present investment opportunities as well as the techniques used to analyze scrips will help in building confidence in the investors. Both technology and information are tangible. In service where customers are not aware or are uncertain of the process, assurance of a positive outcome builds trust. Another way of tangibilising the PMS is providing membership identity to the clients. As members, they feel privileged and have access to other services like loans, tax advice, etc. The ambience at the premises also plays a very important role. It influences the behavior of the investors to a large extent. Pleasant, professional looking dcor of the premises gives confidence besides making the delivery of the service convenient and user friendly. DEVELOPING SERVICES SYSTEM: The success of a PMS depends on the perception of the investors with regard to a firm having a robust, reliable and user-friendly system. The service consists of two parts- operating system and delivery system. They are called back office and front offices.
Research and analysis
Clients
Portfolio manager
Brokers
Custody function
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A framework of a portfolio management service system The PMS has to be updated in order to give the best outcome to the investors. It utilizes the services of a research and analysis wing which collects, assimilates and processes the data from different sources like stock exchange, competition and government regulations and their impact. The interaction with brokers helps in getting a better deal in the market while investing their clients money. The custody function involves activities that keep the clients informed of the status of their investments. It also keeps track of corporate announcements and calculates industry or companywise exposures. DELIVERY AND RECOVERY SYSTEM OF PMS:The delivery system comprises the constituents that are aimed at satisfying a customer and building long lasting relationships by fine tuning the service to specific needs of the customers. The success of delivery depends on the appropriate use of people, equipment and technology. the expertise and the attitude of the portfolio manager is necessary asset in such situations. The extent of personalization will depend upon the characteristics of the customer and the type of service offered. In case of a non-discretionary service PMS, where the customer is expected to be much more aware, a customized service is required. Whereas in case of discretionary service, the judgment on the part of the providers is crucial. As the interaction in the former case, the customer will evaluate the process more than the outcome of which he is aware to some extent. So the emotional needs of the customer become equally important as the monetary
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needs. In later case the customer is not bothered about the process. In such cases, timely and regular communication with customers is vital. No service is complete without an equally efficient recovery system. As service involve personal interaction, there are chances of lapse even in the most standardized and fool proof system. A company goes on a defense in case of a complaint. A complaint has to be viewed as an indication of improvement. Also it is much costlier to get new customer than retaining or placating a customer. There is also element of negative word of mouth which is disastrous for a service organization. Thus a service firm should build an efficient recovery system also. The portfolio manager should elicit complaints through feedback forms and customers meets and act on them fast. While handling the complaints of customers continuous contact with the customers should be done. The portfolio manager should remember that the delivery of service can be standardized, the recovery from a lapse cannot be. Every customer has to be treated differently. It should also be kept in mind that the mistakes and the expenditure on recoveries are the costs of quality of a service and not the investments made to ensure zero defect. Thus if PMS will follow all the above strategy it will surely help to develop a robust service system and will take a gigantic leap in near future.
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MUTUAL FUNDS MARKETING INTRODUCTION:A mutual fund is a collective investment vehicle formed with the specific objective of raising money from a large number of individuals and investing it according to a pre specified objective. The word mutual in a mutual fund signifies a vehicle wherein the benefits of investment accrued pro rata to all the investors in proportion to there investments. Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Anyone with an invisible surplus of as little as few thousand rupees can invest in mutual funds. These investors buy units of a particular mutual fund scheme that has a defined investment objective and strategy.
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Flow chart describing the working of a mutual fund:
The fund manager invest in different types of securities then invests the money thus collected. These could range from shares to debentures to money market instruments, depending on the schemes stated objectives. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion of the number of units owned by them. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to investing a diversified, professionally managed basket of securities at a relatively low cost. A mutual fund is the ideal investment vehicle for todays complex modern world. It appoints professionally qualified and experienced staff that manages each of these functions on full time basis. The large pool of money collected in the fund allows it to hire such staff at a very low cost to each
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investor. In effect, the mutual fund vehicle exploits economies of scale in all three areas research, investing and transaction processing. Along with the success of mutual funds, inevitably there arose a need to regulate the industry. Thus regulation and regulatory bodies came into being so that small investors were not misled or put to loss by some unscrupulous people representing themselves as mutual funds. History of the Indian Mutual Fund Industry: The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had seen dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets under Management (AUM) was Rs. 67bn. The private sector entry to the fund family rose the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of 1,540 bn. The mutual fund industry is still in growing phase as large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling. DIFFERENT TYPES OF FUNDS: GROWTH FUNDS:
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It Is the type of funds where the collected money is invested in different stocks in order to capital appreciation over a long term. Value of these mutual funds increase with the upward in stock market and decrease with a downfall in the stock market. The collected money is invested in common stocks of the companies that have a solid growth rates, as well as a history of consistent dividend payout. BOND FUNDS / FIXED INCOME FUND: Bond funds typically invest in bonds issued by governments and large companies.Bond fund returns are based on a combination of interest payments and price changes of the bonds in the fund. The market value of bonds is affected by prevailing interest rates. When interest rates fall, existing bonds will generally rise in value; when interest rates rise, bonds will generally fall in value. Overall, bond funds are affected in the same way. Fund managers attempt to control risk by managing the credit quality and the average term of the bonds in the fund. Fixed income funds generally have the potential for higher returns than money market or guaranteed funds, but there tends to be a greater risk of a loss. The risk on a bond fund is that the bond issuer is not able to repay the borrowed amount. Under this category funds are invested in the opportunities that can provide a regular profit on the invested money. BALANCED FUNDS / DIVERSIFIED FUND: Balanced funds invest in a mix of stocks, bonds, and cash investments. The mix will change as market conditions change, but it usually stays within predetermined ranges. (For example, stocks 40-60%, bonds 30-50%, cash 050
30%). The benefit of a balanced fund is that it provides automatic diversification by investing in a variety of asset classes and thereby reduces the risk of one asset class performing poorly. Balanced funds tend to be more risky than bond funds and less risky than equity funds. The main objective is to earn a high rate of return on the invested money.
MONEY MARKET FUND / GUARANTEED FUND: Money market funds invest primarily in short-term (less than one year) government Treasury Bills (also called T-Bills) and corporate notes which pay a fixed rate of interest. The rate of return of money market funds tends to be lower than that of funds that are managed for long-term gains, but they are a very low-risk investment. Money market funds are ideal for parking your cash while you decide where to invest for the long haul, or for money you will need in the near future. EQUITY FUNDS: Equity funds invest primarily in stocks. Because stocks have traditionally risen in value more than other types of investments, they offer the greatest potential for long-term growth.
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Investing in stocks is also riskier than other investments as stock prices can fluctuate more than other types of investments. The market price of a stock will vary with the company's financial performance, general economic conditions in the country in which it operates, as well as investor perceptions. ASSET ALLOCATION FUNDS: Asset allocation funds are similar to balanced funds in that they invest in all of the asset classes. Asset allocation funds differ from balanced funds because the fund manager isn't restricted to the percentage of the money they can put in a specific type of investment (stocks, bonds, and so on). A tactical asset allocation fund is one where the manager frequently makes decisions about the best asset allocation, sometimes every few months. The manager of a strategic asset allocation fund will generally revise the fund's asset allocation once a year. Asset allocation funds provide a "one stops shopping" approach to asset allocation.
INDEX FUND Index funds include stock or bond funds that closely match the performance of a market index, such as the BSE.Over time, index fund performance will slightly lag that of the actual index as result of cash flows and transaction costs. Since index fund investments are not actively researched, the management fees on index funds are generally very low. The risks associated with index fund investing are similar to those of bond and equity funds; however, index
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funds can have significant exposure to individual stocks when the weighting in the index is in excess of that allowed for actively managed funds. This can reduce the diversification in the fund. The risk level in this category is at the minimum level. GEOGRAPHY: SPECIFIC COUNTRIES: Funds can invest primarily in investments in one country. For example, Canadian equity funds invest primarily in Canadian companies. INTERNATIONAL: These funds can generally invest in any country around the world except for Canada. Most international funds invest in the U.S., Europe, Australia and the Far East, sometimes referred to as the EAFE countries. GLOBAL FUNDS: These funds invest in any country around the globe, including Canada. Foreign equity funds provide an opportunity to diversify across many markets and reduce the risks associated with the health of any one economy and its stock market. These funds do have risks associated with political and market conditions in other countries. In addition, foreign funds are exposed to currency risk. If the Value of the Canadian dollar rises, or the currencies of the countries the fund invests in fall, your return will be lower. Different accounting practices and securities regulations around the world may affect the fund managers' ability to value and trade in some securities. Portfolio managers seek to reduce these risks by investing in different countries and industries.
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COMPANY SIZE: Many funds restrict the types of stocks they buy for the fund based on the size of the company. The size of the company is measured by its market capitalization (market cap - measures the company's worth by multiplying its stock price by the number of shares outstanding). Generally speaking, small cap funds are more risky than large cap funds as minor changes in a small cap company's stock price can have a major impact on its market cap.
INDUSTRY: Some funds concentrate all their investments in a specific sector or industry of the economy. For example, biotechnology, communications, natural resources, etc. Industry specific funds provide an opportunity to capitalize on the strength of a particular sector of the economy. Investing a significant portion of your portfolio in one industry can be risky, especially if that industry falls on hard times. However, the upside can be equally as good if the industry performs well. (We have seen this in the technology sector.) However, if you have a diversified portfolio you may be able to reap some incremental returns by investing in an industry-specific fund. MUTUAL FUNDS MARKETING MIX: PRODUCT:Customers invest in mutual funds with capital appreciation, liquidity and safety as their objectives. So, marketers need to design the products keeping these objectives in mind. In addition, the marketer has to take care of the government regulations that govern the industry. As a result, he needs to be
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very judicious in designing the product and planning the investment portfolio of the customer. Only then he can maximize the returns while minimizing the risk. Eg: In the case of Reliance Mutual fund they also have products based on the same segmentation.
PRICE:Before we try to understand the pricing of mutual funds, let us first understand the concept of NAV (Net Asset Value). The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In other words, if the funds is dissolved or liquidated, by selling of all the assets in the fund, this is the amount that the share holders would collectively own. They give rise to the concept of the net asset value per unit, which is the value, expressed by the owner ship of one unit in the fund; it is calculated simply by dividing the net asset value of the fund by the number of units. However, most people refers usually to the NAV per unit as NAV, ignoring the per unit. Calculation of NAV: The most important part of the calculation is the valuation of the assets owned by the funds. Once it is calculated the NAV is simply the net value of assets divide by the number of units outstanding. The detail methodology for the calculation of the net asset value is given below:
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PROMOTION: With more and more private and global players entering the mutual market, the market has become quite competitive in the recent past. Mutual funds, as an investment option, are now competing with commercial banks and other financial institutions for the investors savings. Mutual fund companies need to differentiate themselves from the other investment avenues in the market and position their services exclusively in the customers mind. They need to adopt innovative promotional strategies like strategic tie-ups. Eg:-Reliance uses electronic media, print media and hoardings for promotion. PLACE: The various distribution channels employed by mutual fund companies include their own employees, agents, third party distribution companies, banks and post offices. The third party distribution companies started flourishing with the entry of private players into the industry in 1993. UTI
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and the government players relied completely on their agents for distributing the funds. Eg:-Reliance has more than 500 distributors in the state. In addition to it 50 brokerage houses and 2 AMCs (Asset Management company). PEOPLE: The process of investment decision-making in a mutual fund company determines the importance of the individuals in the company. If the fund manager has a free hand to decide the fate of savings of thousands of unit holders, he needs to be very competent and judicious in his decision-making. In such companies, people become the most important element of the marketing mix. In fact companies publicize the success of their fund manager who has delivered consistent results, to promote their services. Eg:- In Reliance AMC, it has not a big staff. The reason behind that is the expenses made on these people is adjusted from the return which they earn from the investment of their customer. In Reliance AMC there is 1 Relationship manager, 2 Office Coordinator executives (customer), 1 coordinator (Karvy), 1 Sales manager, and 1 assistant sales manager, and 1 coordinator. PROCESS: The process of investment by one mutual fund Company can be quite different from that of another. In some companies, the fund manager given a free hand and he decides where to invest and how much to invest. On the other hand, the investment decision in some companies is strictly governed
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by the company itself. Any fund manager can operate within the defined parameters of the company. Difference in investment processes defines the style of functioning of a fund and determines its success.
PHYSICAL EVIDENCE: Providing physical evidence to the customer is one of the most difficult aspects of the mutual fund business. As there are very few instances of the customer entering the company premises, buildings and infrastructure can rarely be used as physical evidence. Therefore, companies use their channels of distribution like banks and post offices to attach an element of credibility to their services. They also try to use their service personnel to reduce the perceived risk of customers. One of the most important ways is to promote the earlier successes of the company in a big way. This is the efficient marketing mix of mutual funds which if applied properly by any mutual fund company can create success. Savings market is growing and so is the need for financial services of mutual fund. The emergence of small investors in urban and rural India is evidence enough that the types of schemes and the benefits offered has made the task
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of marketing complex. However, an effective marketing research and careful product planning supported by the desired customer service can help in marketing mutual funds successfully.
SCENARIO OF FINANCIAL SERVICE SECTOR IN INDIA:

The financial services sector contributed 15 per cent to India's GDP in FY09, and is the second-largest component after trade, hotels, transport and communication all combined together, as per the Banking & Finance Journal, released by an industry body in August 2010. Share of Financial services, banking, insurance and real estate sectors is expected to enhance by 9.7 per cent for the year 2009-10 to 17.2 per cent of GDP (at factor cost). Data sourced from SEBI shows that the number of registered FIIs stood at 1,738 and number of registered sub-accounts rose to 5,592 as of November 10, 2010.
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Overseas funds infused into Indian capital market in 2010 stood at US$ 39 billion. According to data released by Securities and Exchange Board of India (SEBI), stocks and debt securities over worth US$ 17.28 billion were purchased by the foreign institutional investors (FIIs) from the Indian capital market in January 2011. According to data available with SEBI, FIIs have made investments worth US$ 4.11 billion in equities and invested US$ 667.71 million into the debt market. The average assets under management of the mutual fund industry stood at US$ 147.99 billion for the quarter ended December 2010, according to the data released by Association of Mutual Funds in India (AMFI). As on January 21, 2011, India's foreign exchange reserves totaled US$ 299.39 billion, according to the Reserve Bank of India's (RBI) Weekly Statistical Supplement. According to Venture Intelligence, a research firm, private equity firms invested US$ 7,974 million over 325 deals in India during 2010, as against US$ 4,068 million (over 290 deals) in 2009. The largest investment reported during the year was the US$ 425 million raised by power generation firm Asian Genco from investors including General Atlantic, Goldman Sachs, Morgan Stanley, Everstone and Norwest. According to a global consultancy firm Ernst & Young (E&Y), sectors such as power and transportation, consumer and branded products, infrastructure ancillaries, education and financial services, and healthcare are likely to witness increased PE activity in 2011.
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Financial services India, due to advanced technology have been developed. Due to the advancement of internet and mobile phones, financial services are increasingly communicating with customers through this medium. This way they are able to reach out to more and more people. If the financial sector of the country is good, then the economy will also blossom. Financial services contribute a lot to India's economy in this way. They help in increasing the gross domestic product. They help in giving loans to certain big businesses which help in getting foreign exchequer. Financial service providers aim at making financial sector the biggest contributor for GDP. This they do it by providing services to various sectors. There are many finance services like equity market, banking services, loan services, home loans, business loans, mutual funds, futures options trading, derivatives trading, financial consulting, financial management, private and national banking services etc. Financial sector also provides employment, which helps the development of socio- economic condition of our country. Thus the future of marketing of financial service is very bright in our country as there is growth of financial service in our country.
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WEBILIOGRAPHY & BIBLIOGRAPHY WEBILIOGRAPHY: SCRIBD.COM AMFIINDIA.COM
MEDINDIA.COM MONEYCONTROL.COM
BIBLIOGRAPHY: Services marketing- S.M.JHA. Services marketing-VASANTI VENUGOPAL AND RAGHU V N.
Services marketing-HELEN WOODRUFFE

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Services marketing-RAVI SHANKER.
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Introduction:-: Financial Service Refer To Services Provided by The Finance Industry. The Finance Industry

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Introduction:-: Financial Service Refer To Services Provided by The Finance Industry. The Finance Industry

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MARKETING OF FINANCIAL SERVICE:

FUNCTIONS OF THE FINANCIAL SERVICES

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

NATIONALISATION OF FINANCIAL INSTITUTIONS

MARKETING OF FINANCIAL SERVICE:

1. LACK OF CO ORDINATION BETWEEN DIFFERENT FINANCIAL INSTITUTIONS:4

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

5. IMPRUDENT FINANCIAL PRACTICE:-

MARKETING OF FINANCIAL SERVICE:

MARKETING OF INSURANCE SERVICES

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

Source: U.S. Department of State FY 2001 Country Commercial Guide: India

MARKETING MIX IN THE INSURANCE SERVICES:PRODUCT:-

MARKETING OF FINANCIAL SERVICE:

Encourages and forces thrift:-

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

Title of the Market Research Study

a. Survey on Customer Service

Commerce 7. Punjab National Bank

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

Flow chart describing the working of a mutual fund:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE:

MARKETING OF FINANCIAL SERVICE: