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SERVICES MARKETING PROJECT REPORT
Banking Industry






Group-18:
U.K.CHAITANYA
J. ANISH NIKHIL
V. R. GIRISH KUMAR MUJJE
G. SANTHOSH KUMAR
NAGILLA DIVYA REDDY
N. MOUNIKA



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TABLE OF CONTENTS



EXECUTIVE SUMMARY Pg 3

1.) INDUSTRY ANALYSIS Pg 4

2.) TYPICAL SERVICE OFFERING Pg 6

3.) SERVICE BLUEPRINT Pg 9

4.) PHYSICAL EVIDENCE Pg 10

5.) INDUSTRY SECTION Pg 11

6.) AS YOU WISH SECTION Pg 13

CONCLUSION Pg 14

REFERENCES Pg 14
























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Executive Summary:


The banking industry plays a major role in representing the financial system in India.
It works as an intermediary between individuals, the government, financial institutions and
other stakeholders who directly or indirectly get affected by the industry.

The project report begins with explaining the banking industry current trends, the role
of IT and also the SWOT analysis of the industry. Followed by analyzing the services offered
by banks and involvement of customer with the service provider.

Later designing the blueprint for a typical service offered by the bank. Also analyzing
the role of servicescape and service provider during the delivery of the service to customer.
The report ends with the new promotion strategies which can be employed by the banking
industry.

In the near the future, the Indian banking industry is expected to see consolidation in
the wake of future economic growth, changes in banking regulations and increase in
competition from foreign banks. Technological innovation and especially mobile banking
have paved the way for dramatic growth in the industry in the coming years.




























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Industry: Banking

1. Industry Analysis

What are the current trends in the industry?
The key trends were strong regulatory framework, use of multiple channels and
technology, strong customer oriented banking services and a growing economy
(expected).
FDI will bring better risk management capability, sound technology and higher
growth prospects.
During 2011-12, the Indian banking industry faced major concerns in regards to
deteriorating asset quality, with gross non-performing assets (NPAs) of banks
registering a sharp increase in different sectors such as aviation, infrastructure and
power.
In 2012-13 banks have started focusing on lending to more profitable segments such
as retail and small and medium (SMEs), improving risk management policies and
effective monitoring.




What role does technology play in the industry?
Technology plays an important role in the banking sector as it would not only ensure
smooth passage of interrelated transactions over the electric medium but will also
facilitate complex financial product innovation and product development. The
application of IT and e-banking is becoming the order of the day with the banking
system heading towards virtual banking.
Multi channels in banking services such as internet banking, mobile banking have
increased productivity and helps in acquiring new customers.
Banks also embraced Customer Relationship Management (CRM), with sharp focus
on customer centricity which was facilitated by the availability of superior
technology.
According to PwC report, banks almost spend 15% of the total expenditure on
technology today.

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Who are the major players in the industry?

Sr No Bank Name Net profit (in millions
1 State Bank of India 82,645.2
2 ICICI Bank Limited 51,513.8
3 Punjab National Bank 44,335.0
4 Bank of Baroda 42,416.8
5 Canara Bank 40,258.9
6 HDFC Bank Limited 39,264.0
7 Axis Bank Limited 33,884.9
8 Bank of India 24,887.1
9 Union Bank of India 20,819.5
10 Standard Chartered Bank 20,592.9


Who is the competition? Think broadly.

Major Challenges face by the Indian Banking Industry:
Increased competition from domestic and international markets as the RBI drafted
guidelines for licensing of new banks in the private sector. This is expected to benefit
the consumers in the long-run as with increased competition banks will adopt fresh
strategies to retain and attract customers and protect their market share.
For instance, increasingly banks are tying up with insurance companies to sell
insurance products. In this business model, both bank and insurance companies share
the commission. Competition from even insurance companies.
The financial performance of Financial Institutions (FIs) in terms of both operating
and net profits improved substantially may also pose as a threat to the banks.
The financial performance of Non-Banking Financial Companies - Deposit taking
(NBFCs-D) witnessed improvement may also act as threat to the banks due to fewer
regulations.
With the approval of FDI, foreign banks can set up their branches in India, which
provides a world class banking experience and creates healthy competition.
















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Where would you locate this industry on the Tangibility Spectrum?




2. Typical Service Offering

What are customer expectations of service in the industry service in the industry?

Small Medium Large
Quality of relationship
management
Technology to integrate
customers internal IT system
Funding customer M&A
needs
Credit turnaround time All India presence network Supporting international
expansion of customer
Need for all products to be
served at one place
Quality of Relationship
Management
Technology to integrate
customers internal IT system

The factors which influence the different level of customer expectations: Desired Service,
Adequate Service and Zone of Tolerance.

What bundles of benefits do the customers typically receive?

Online banking allows you to watch your money on a daily basis if you want to. By keeping
close tabs on your funds, you'll always be aware of what's happening in your bank account.

1. Pay bills: To pay your bills online, you just need to add to your account the names of the
companies you wish to pay bills to.
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2. Transfer funds: When you select Transfer Funds, you'll be asked where to transfer the
money to and from, when, and the amount.

3. Locker discount: Depending upon the minimum average quarterly balance and the
account you choose, some banks offer a 15-30 per cent discount on locker fee. Normally,
this is for accounts where the minimum average quarterly balance is Rs 50,000 and above

4. Insurance: Some offer over-the-counter insurance products like accident cover or life
insurance with accident cover. Some banks also insure debit cards in case they are stolen
or misused. In such a case, there is a purchase protection clause too. This ensures that you
are reimbursed up to a certain limit in case your stolen or misplaced debit card is used for
shopping.

5. Discount on gold products: A number of banks offer 2-5 per cent discounts on gold
coins sold by them, especially to privileged customers who maintain large balances in
their accounts

6. International debit cards: International debit cards, which can be used for shopping and
withdrawing cash from ATMs abroad, are offered free of cost.


7. Cash withdrawal: Many banks offer privileged customers any number of cash
withdrawals from other banks' ATMs. In addition, they increase the maximum amount
one can withdraw at a time from ATMs.

8. Sweep facility: In this, funds beyond a limit are transferred to a fixed deposit. When you
need the money, the bank transfers the amount requested to the savings account. The
fixed deposit earns a rate that is applicable for the period it is held. You can also
withdraw the term deposit money from ATMs first transferring it to the savings account.

9. For the family: Some banks extend special facilities to family members who have an
account with them. One such facility is clubbing of all family members' deposits. Some
offer education insurance with accounts for children.

10. Price gain: Banks also offer benefits such as waiver of annual fee for demat accounts and
lower charges for demat and trading accounts


What is the typical service performance of the firms in the industry?

Service performance of a bank is the ability to serve the customers who come to avail
the service from the service provider. Effectiveness in serving the customers denotes the
performance of the firm. If the bank is able to meet the needs of customer with minimum cost
denotes that the performance is high or else low. Also the waiting time is also a measure
which indicates the performance of the bank. Customer waiting for high amount of time
indicates that the performance of the bank in serving the customer is low and vice-versa.


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Do all the Five-Service Quality dimensions apply to the firms in this Industry? Which
might be the most/least important?

Yes, all the Serv-Qual dimensions apply to the firm.
The five SERVQUAL dimensions are:
1. TANGIBLITY-Appearance of physical facilities, equipment, personnel, and
communication materials. (Moderately Important)
2. RELIABILITY-Ability to perform the promised service dependably and
accurately.(Highly Important)
3. RESPONSIVENESS-Willingness to help customers and provide prompt service. (Highly
Important)
4. ASSURANCE-Knowledge and courtesy of employees and their ability to convey trust
and confidence. (Moderately Important)
5. EMPATHY-Caring, individualized attention the firm provides its customers.(Highly
Important)






What is the customer involvement in the service industry?

All the financial services come under Banking Industry. These services are more of
information processing services compared to people processing services.
Here services directed at intangible assets (example: Accounting, Banking).
Customer involvement in the service industry is minimum as these are low contact
services.
Information Technology revolutionized these services due to which the contact with
the service personnel has been reduced. Before people used to go to bank branches
(Physical) for services slowly online banking has been the present trend due to
convenience.
At Bank Office (physical) the involvement of the customer with the service provider
is bit high.
In Online Banking the involvement is very minimum with the service personnel.




Importance of each dimension to
the customers regarding financial
services provided by a Bank.
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3. Service Blue Print

Create an actual blueprint of either-Atypical firm in the industry or a specific firm in
the industry






What are the service encounters/moments of truth in the service?

Service encounters/Moments of truth:
Touch points in banking can include client service advisors, receipts, events,
offerings, financial expert reports, website, intranet, IT-systems, research
reports, sponsoring, Word of mouth, e-banking, regional office or contacts by phone with the
client service advisors, Bank branches, ATM etc.

Moments of Truth analyzed along with the process:

Process Moments of truth
Customer enters the Branch Watchman
Inquiry Welcome desk manager
Interaction with the Banker Personal banker
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Form fill Physical evidence
Welcome drink served Empathy
Waiting lounge Physical evidence

What is the value of blueprinting a service?
Provides a platform for innovation.
Recognizes roles and interdependencies among functions, people, and organizations.
Facilitates both strategic and tactical innovations.
Transfers and stores innovation and service knowledge.
Designs moments of truth from the customers point of view.
Suggests critical points for measurement and feedback in the service process.
Clarifies competitive positioning.
Provides understanding of the ideal customer experience.


4. Physical Evidence

What role does servicescape play in this industry?
Service scape is the total appeal an organization can make to its customers by offering
them better services. Technology has enabled banks to enhance their servicescape to a great
extent.
Servicescape can be an enhancer of a firm's productivity and revenue or it can detract
the revenues of a firm. The enhancement of revenues is attributed to servicescape as it
prompts customers to increase their business dealings with the firm. There are two soft
system methodologies for enhancing Servicescape. The soft system cannot guarantee success
in service offering but the energy and commitment generated for delivering the agreements
would.
In service organizations, the same physical environment that communicates with and
influences customers, may affect employees' satisfaction, performance, productivity, and
motivation Reimer Servicescape is not only a cue for the expected service quality, but also is
found to influence customers' evaluations of other factors determining perceived service
quality. Thus, it has both direct and indirect effect on perceived service quality. Customers
distinguish four dimensions of service quality in the case of retail banking industry in India.
They are: customer-orientation, competence, tangibles and convenience.

What aspects of this servicescape significantly influence the service delivery process?

Broadly classified as ambient Factors, Design Factors, Social Interaction Factors. The
following aspects significantly influence the service delivery process.
1. Ambient Conditions
Particularly important
o When ambient conditions are extreme
o When customer spends large amounts of time in them (i.e. at the office)
o When they dont match ones expectations.
2. Spatial layout and Functionality
Particularly important in:
o Self-service settings
o Situations when tasks are complex
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o Situations when time is short.
3. Signs, Symbols and Artifacts
Particularly important in:
o Forming first impressions
o Communicating new service concepts
o Repositioning a service
o Highly competitive industries (to differentiate from competitors)

How can servicescape be used as a source of competitive advantage?

1. Servicescape help achieve external marketing goals and internal organizational goals.
2. They provide a visual metaphor for an organizations total offering.
3. They can aid or hinder customers or employees from fulfilling their responsibilities.
4. They can help segment, position, and differentiate a company from its competitors.


5. Industry Section

In general what are the strength and the weaknesses of this industry?(provide evidence
to support and defend your views)

Strengths:
1. In the area of strengths, a SWOT analysis should list the areas where the bank is
succeeding and excelling in reaching its goals.
2. These success factors should also be internal components reflective of the banks
physical and human resources.
3. For example, a banks strengths may be high client retention, higher than average
checking account balances, high-yield bond rates, a user-friendly website, product
line diversification, low staff turnover and low overhead.
Weaknesses:
1. The weaknesses in a banks SWOT analysis should list the areas where the bank is
falling short of reaching its goals or is non-competitive.
2. These areas of improvement should also be internal components reflective of the
banks physical and human resources.
3. For example, a banks weaknesses may be low customer satisfaction, poor website
features, low staff morale, high loan rates, low brand recognition or a minimal product
line.

What opportunity do you see in this industry?

Opportunities:
1. The opportunities section in a banks SWOT analysis should list the areas where the
bank has room for growth or could take advantage of opportunities in the
marketplace.
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2. These areas ripe for development should be external components reflective of the
current business environment.
3. For example, a banks opportunities may include a growing economy, new high-yield
investment products, banking deregulation, less competitors in the marketplace or an
increase in the average savings rate.

What do you think the future holds for this industry?

In the near the future, the Indian banking industry is expected to see consolidation in
the wake of future economic growth, changes in banking regulations and increase in
competition from foreign banks. Technological innovation and especially mobile banking
have paved the way for dramatic growth in the industry in the coming years.


What advice would you give to a person/company planning to enter this industry?

The new entrants have to address financial inclusion, comply with priority-sector
lending targets, and position 25% of their branches in rural areas. Such restrictions could
limit profitability for new banks, and restrict applicants to those with deep pockets but also to
those with a strong commitment and successful track record.

Issuing licenses to conglomerates could increase corporate governance risks, despite
RBI's attempt to regulate these issues. The central bank's strong focus on good corporate
governance, and its ability to supervise a consolidated banking entity under the recently
passed banking reforms, could help in enforcing checks and balances to monitor additional
risks.

We believe non-banking finance companies with established franchises (eg asset
finance) may be better placed to switch to bank status. This would add diversity and allow
greater operational and funding flexibility. But there are likely to be significant challenges in
developing their existing lending franchise, in light of their largely unbanked customer base.

Capital levels in the banks are relatively low despite tight regulation. Greater capital
will be required to fund the long-term growth opportunities in India, while the weaker
economy makes it harder for the banking sector to attract new capital in the short term. We
believe long-term staying power (patient capital) and a track record in good governance will
help to reduce the pressure for new entrants.

The new banks are required to list publicly within three years of operation. This
timing may coincide - if new banks commence operations within the next two years - with the
bulk of the additional Basel III core capital requirements, which are largely back-loaded for
the Indian banking system. Over three-quarters of the transitional capital needs arise in 2016-
2018, and many of the banks will need to access the capital markets for equity to comply with
the rules. Capital challenges and stiff competition mean that only the serious new entrants are
likely to survive.



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6. As u wish Section

PROMOTION:

Marketing scope in banking sector should be considered under the service marketing
framework.
Bank marketing does not only include service selling of the bank but also is the function
which gets personality and image for bank on its customers mind.
Promotion:
One of the most important element of marketing mix of services is promotion which
is consist of personal selling, advertising, public relations, and selling promotional tools.
Personal Selling:
Personal selling occurs in two ways. First occurs in a way that customer and banker
perform interaction face to face at branch office. In this case, whole personnel, bank
employees, chief and office manager, takes part in selling. Second occurs in a way that
customer representatives go to customers place. Customer representatives are specialist in
banks services to be offered and they shape the relationship between bank and customer.
Advertising:
1. Conceive customers to examine all kinds of services that banks offer
2. Increase use of services
3. Create well fit image about banks and services
4. Change customers attitudes
5. Introduce services of banks
6. Emphasize well service
Advertising media and channels that banks prefer are newspaper, magazine, radio, direct
posting and outdoor ads and TV commercials.

Banks should care about following criteria for selection of media:
1. Which media the target market prefer
2. Characteristics of service
3. Content of message
4. Cost
5. Situation of rivals

Ads should be mostly educative, image making and provide the information as follows:
1. Activities of banks, results, programs, new services
2. Situation of market, government decisions, future developments
3. The opportunities offered for industry branches whose development meets national
benefits.

Public Relations:
Public relations in banking should provide;
1. Establishing most effective communication system
2. Creating sympathy about relationship between bank and customer
3. Giving broadest information about activities of bank.
Selling Promotional Tools:
Another element of the promotion mixes of banks is improvement of selling. Mostly
used selling improvement tools are layout at selling point, rewarding personnel, seminaries,
special gifts, premiums, contests.
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Conclusion:

Services are to be designed such that along with customer satisfaction, employee
satisfaction and loyalty are to be maintained along with profit and growth of the industry.
Challenges of moving a business towards service leadership not only from organizational
perspective but from an employee perspective are to be examined. Enhancing service quality
and improving service productivity are to be considered as two sides of coin while improving
the value for both customers and the firm.


References:

http://www.dinodiacapital.com/pdf, Indian Banking Industry Rising Above the
Waves, January 2013
http://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/KPM
G_ICC, Indian Banking, The engine for sustaining India's growth ... - KPMG
http://www.ibef.org/industry/banking-india.aspx, India Brand Equity Foundation
www.mckinsey.com/~/media/.../private_banking_survey_2013.ashx,
Private banking survey 2013 - McKinsey & Company
http://www.isesec.com/Admin/Research/1659808644_Indian%20Banking%20Industry.pdf