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BANKING SYSTEM
2
INTRODUCTION
Bank safeguards money and valuable and provide loans, credit,
and payment services such as checking accounts, money orders,
and cashiers checks. Banks also may offer investment and
insurance products, which they were once prohibited from
selling. As a variety of models for co operation and integration
among finance industries have emerged, some of the traditional
distinctions between banks, insurance companies, and securities
firms have diminished. In spite of these changes, banks continue
to maintain and perform their primary role accepting notes and
lending funds from these deposits. There are several types of
banks which differ in the number of services they provide and
the clientele they serve. Although some of the differences
between these types of banks have lessened as they begin to
expand the range of products and services they offer, there are
still key distinguishing traits.
COMMERCIAL BANK:
IT dominates industry, offer full range of services for individuals,
businesses and governments. These banks in a wide range of
sizes, from large global banks to regional and community banks.
GLOBAL BANKS:
They are involved in international lending and foreign currency
trading, in addition to the more typical banking services.
REGIONAL BANKS:
They have numerous branches and automated teller machines
(ATM) locations throughout a multi state that provide banking
services to individuals. Banks have become more oriented
toward MARKETING AND SALES. As a result, employees need
to know about all types of products and services offered by
banks. Community banks are based locally and offer more
personal attention, which many individuals and small businesses
prefer. However, many traditional banks have also expanded to
offer online banking, and some formerly internet only banks are
opting to open branches.
SAVINGS BANKS:
Savings and loan associations, sometimes called thrift
institutions are the second largest group of depository
institutions. They were first established as community. The
structure of banking differs from country to country depending
upon their economic conditions, political structure and financial
system. Banks can be classified on the basis of operations,
business pattern and areas of operations. They are termed as
systems of banking.
CORRESPONDENT BANKING:
It is the system developed to remove the difficulties in unit
banking systems. In this system unit banks are linked with
bigger banks. The bigger banks, with which such deposits are so
made, are called correspondent banks. Therefore correspondent
banks are intermediaries through which all banks are linked with
bigger banks in financial centers. This system is very common in
international banking transactions.
GROUP BANKING:
It is a system in which two or more independently incorporated
banks are brought under the control of holding company. The
holding company may or may not be a banking company. Under
group banking the individuals banks may be unit banks or
operating branches or a combination of the two. This system has
developed in United States in 1990. It became popular and
extensively developed in 1920
COMMERCIAL
BANK
GROUP
BANKING
GLOBAL BANK
DIFFERENT
TYPES OF
BANKS
CORRESPONDENT
BANKING
REGIONAL
BANKS
SAVINGS
BANK
Meaning of Marketing:
DEFINITION OF
(1)According
CHARACTERISTICS OF MARKETING:
(1)
(2)
(3)
(4)
(5)
SERVICES
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Meaning of Service
CHARACTERISTICS OF SERVICES
Services have four important characteristics which make
them so different from physical products.
INTANGIBILITY
INSEPARABILITY
A service cannot be separated from its provider. This is in
direct contrast to a physical product, which exists whether
or not its source is present. As the provider only can
render the service(s), it limits the firm's scale of operation.
To overcome this limitation the service provider can learn
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VARIABILITY
PERISHABILITY
Services cannot be stored. So services not utilized are lost
forever. Perish ability of service is not a problem as long as the
demand for the same is steady. Number of service, providers
(staff) can be planned in advance for expected demand. But it
becomes a problem when it faces fluctuating demand. So, to
overcome this problem, the service concerns should have proper
product planning, pricing, and built-in flexibility in the
organization.
OWNERSHIP
In the case of goods, after the completion of process, the goods
are transferred in the name of the buyer and he becomes the
owner of the goods. But in case of services, we do not find this.
For e.g. a consumer can use hotel room or swimming pool,
however the ownership remains with the providers.
FEATURES
OF
SERVICES
INTANGIB
ILITY
INSEPAR
ABILITY
VARIABILI PERISHA
BILITY
TY
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OWNER
SHIP
CLASSIFICATION OF SERVICES
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SERVICE MARKETING
Introduction
On the basis of survey of literature, an attempt
has been made to trace the evolution of marketing, explain the
marketing concept such as its meaning and definition, point out
peculiarities of service marketing, and its relevance relationship
of marketing to banking business, and growth of bank
marketing. A brief account of bank marketing sense in India has
also been attempted.
CONCEPT OF MARKETING
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Production Concept
Product Concept
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Selling Concept
This concept was based on the idea that the customer will either
not buy or not buy enough of the organizations products unless
the organizations make effort, to stimulate customer's interest in
their products. It was assumed that the products are sold-not
bought. Under this approach, which dominated 1950s, the entire
focus of organizations was shifted to gearing up their sales
department. Their attitude was that the sales department has to
sell whatever the organization produced.
Marketing Concept
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SERVICE MARKETING
Marketing was not that popular in servicesindustries as it was with manufacturing firms. The reasons are
obvious. Many service businesses were small and were not using
management techniques such as marketing which they thought
would be expensive or irrelevant. There were also service
businesses like law and accounting firms which believed that it is
unprofessional to resort to marketing. They relied more on their
knowledge and efficiency than marketing their services. Some
service businesses like, educational institutions and hospitals had
so much demand that they had no need for marketing.
In India services sector has grown significantly. Its growth is
also quite important for India. Diagram has shown, the
employment elasticity [to GDP growth] in the services sector is
higher than as in the case of both agriculture and manufacturing
sector. Secondly, the services sector by providing complementary
services to agriculture and industry, acts as a catalyst in the
growth of the entire economy. Thirdly, with its greater flexibility
in location, low capital intensity and personal nature is ideally
suited for the small sector, which is the most important sector
for overall development of Indian economy. Accordingly, the
services sector has grown faster than the commodity sector.
BANK MARKETING
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INTRODUCTION
In recent years, the banking industry around the world
has been undergoing a rapid transformation. In India also, the
wave of deregulation of early 1990s has created competition and
greater risk for banks and other financial intermediaries. The
cross-border flows and entry of new players and products have
forced banks to adjust the product-mix and undertake rapid
changes in their processes and operations to remain competitive.
Over the years, Indian banks have expanded to
cover a large geographic & functional area to meet the
developmental needs. They have been managing a world of
information about customers - their profiles, location, etc. They
have a close relationship with their customers and a good
knowledge of their needs, requirements and cash positions.
Though this offers them a unique advantage, they
Face a fundamental problem.
During the period of planned economic development,
the bank products were bought in India and not sold. Marketing
is a customer-oriented operation. What is needed is the effort on
their part to improve their service image and exploit their large
customer .
Information base effectively to communicate
product availability. Furthermore, banks need to have very
strong in-house research and market intelligence units in order
to face the future challenges of competition, especially customer
retention. Marketing is a question of demand (customers) and
supply (financial products & services, customer services through
various delivery channels). Both demand and supply have to be
understood in the context of geographic locations and competitor
analysis to undertake focused marketing (advertising) efforts.
Focusing on region-specific campaigns rather than national
media campaigns would be a better strategy for a diverse
country like India.
Throughout much of the last decade, banks
world-over have re-engineered their organizations to improve
efficiency and move customers to lower cost, automated
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channels, such as ATMs and online banking but this need not be
the case.
As it is proved by the experience, banks are now
realizing that one of their best assets for building profitable
customer relationships especially in a developing country like
India is the branch-branches are in fact a key channel for
customer retention and profit growth in rural and semi-urban set
up. However, to maximize the value of this resource, our banks
need to transform their branches from transaction processing
centers
into
customer-centric
service
centers.
This
transformation would help them achieve bottom line business
benefits by retaining the most profitable customers. Branches
could also be used to inform and educate customers about other,
more efficient channels, to advise on and sell new financial
instruments like consumer loans, insurance products, mutual
fund products, etc.
We define bank marketing as Bank marketing is the
aggregate of functions, 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 organizational objectives of the bank.
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MARKETING STRATEGIES
INTRODUCTION
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4 PS OF MARKETING
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PRODUCT
A product is anything that can be offered to a market
for attention, acquisition, use or consumption that might satisfy
a want or need. It includes physical objects, services, persons,
places, organizations and ideas. The function of marketing is to
assess what attributes the consumer seeks from the product and
to combine these to make the most attractive product offering
that, in turn, will optimize the companys profits. Our concern
here is with the services. This is the product which banks deal
in. Thus it becomes essential to keep in mind the peculiarities of
services like its intangibility, inseparability, variability and perish
ability before we frame any product strategy. By buying a service
a customer doesn't possess anything as in case of a physical
product. What he gets is satisfaction of his wants and needs
from the use of the service. Thus a bank product is anything
that has the capacity to provide the satisfaction, use and return
desired by the customer.
As Theodore Levitt has suggested there are four
different levels of satisfaction constituting a total product
concept.
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Levels of Satisfaction
The basic utility that the customer derives from a
product is the first level or core level placed at the centre
surrounded by higher levels of satisfaction. At each level more
and more value addition takes place.
For a banking service such as a deposit account, the core
element might be safety and return on deposits. The higher level
associated with it is expectation. The customer also expects that
the transaction must be completed without undue delay and neat
and accurate statement of account should be given to him and
all that in a warm and friendly atmosphere. E.g. Customers who
purchase a camera are buying more than just a camera they are
purchasing memories. At the augmented Level the banker on his
own provides additional services, such as, a loan facility, locker
facility, credit card and also customer service which differentiate
the product from that of competitors. The highest level, the
potential level, consists of all potential additional features which
the banker is capable of packing into the banking product,
besides, forging personal rapport with the target customer. Thus
the banker transforms into a friend, philosopher and guide at
this stage.
LEVELS OF SATISFACTION
The Product Life Cycle
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DEVELOPMENT STAGE:
INTRODUCTION STAGE
GROWTH STAGE:
MATURITY STAGE:
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DECLINE STAGE
PRODUCT MIX
Product mix is the list of all products offered for sale.
The concept behind the product mix is that a marketer typically
manages to market a number of different products which are in
different stages of their life-cycle. This disparity of performance
calls for different types of decisions in response to differing
market circumstances. A product mix is essential because:
1. There are an ever growing number of new products, each
requiring the development of specific marketing plans to manage
them through their life-cycles.
2. There is an imperative need to prioritize products with
respect, to the resources available with the marketer which will
be allocated toward their management. Some products may offer
better opportunities in attaining marketing Objectives than
others.
3. As many of the bank products are related to each other there
is a likelihood of crippling an existing product with a new
product. The product mix approach provides the marketer with
better advantage thereby reducing the extent of his problem.
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PRICE
The second
marketing
price. Price
P of the
mix is
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PRICING OBJECTIVES:
Common objectives include the following:
Current profit maximization - Seeks to maximize current profit,
taking into account revenue and costs. Current profit
maximization may not be the best objective if it results in lower
long-term profits. Current revenue maximization - Seeks to
maximize current revenue with no regard to profit margins. The
underlying objective often is to maximize long-term profits by
increasing market share and lowering costs. Maximize quantity Seeks to maximize the number of units sold or the number of
customers served in order to decrease long-term costs as
predicted by the experience curve.
PLACE
The third P
in marketing mix is place or physical distribution. It refers to the
establishment and operation of outlets for physical distribution of
the products. In order to deliver the value satisfaction to target
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PROMOTION
Promotion is a process of persuasive communication and
constitutes one of the 4 Ps of marketing mix. It relates to the
task of informing the target market about the nature and type of
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1. Advertising
It is any paid form of non-personal presentation of ideas, goods
and services by an identified sponsor. Advertising is used for
mass communication and includes the use of newspaper,
magazines, radio, television, hoarding, posters, banners,
leaflets/brochures, direct mail etc.
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2. Publicity
Publicity refers to the communication of any non-sponsored
commercially significant information about a company or its
products to the public through non-personal media without any
financial charge to the company. It may be in the form of a news
item or editorial comment. Normally, a customer is faced with a
bewildering array of advertisements and does not either pay
attention to or believe much of what he is told. But publicity, as
it is a third party, which says about the product or organization,
is likely to have greater impact on the target audience.
3. Sales Promotion
Sales promotion has been defined by American Marketing
Association as those activities, other than personal selling,
advertising and publicity that stimulates consumer purchasing
and dealer effectiveness such as displays, shows, exhibitions,
demonstrations and various non-recurrent selling efforts, not in
the ordinary routine. This is a type of activity where short-term
incentives are extended to encourage purchases. This may break
through buyer's inertia towards a particular product or service,
but frequent use of this tool may lose its effectiveness.
4. Personal Selling
Personal selling is the most vital tool in the promotional mix. It is
an oral presentation while in conversation with prospective
customers. It is of particular relevance to a service industry like
banking. As it involves two way communications in social
behavior, both of buyer and seller, influence the process to a
great extent. For the same reason it is also necessary that bank
staff should adopt the characteristic retailers approach and
should have the following knowledge and ability:
Knowledge of all existing services or at least the knowledge of
the person to whom the customer should be referred for further
information Understanding of customers problems;
Ability to solve the customers problems and persuade the
customer to accept the solution.
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TYPES OF MARKETING
INTERNAL MARKETING
The concept of internal marketing as propounded by Prof.
Leonard L. Berry of Texas A&M University of U.S.A. presumes
the bank employees as its internal customers and jobs offered
to them as products. So effort should be made to offer a product
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INTERACTIVE MARKETING
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External marketing
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2. Promotion:
3. Price:
The price must be high enough to cover costs and make a profit
but low enough to attract customers. There are a number of
possible pricing strategies. The most commonly used are:
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4. Place:
5. People:
6. Process
42
7. Physical Evidence:
8. Positioning:
9. Planning:
Marketing
focus the
process of
we intend
plans.
10. Perception:
43
PRODU
PROMOTI
CT
ON
PRICE
PLACE
PEOPL
PROCE
E
POSITIONI
SS
NG
PLANNI
PERCEPT
NG
ION
PHYSIC
AL
evidence
CUSTOMER SERVICE
Customer service has been defined in many ways, but it
will be better Understood if we define it from the customers
angle. Thus, customer service is the perception of a customer
regarding the services he gets from his bank. As the human
perception change from individual to individual and -within an
individual from time to time, what is effective customer service
today may be indifferent tomorrow and even a bad service the
day after. This makes customer service a dynamic concept and a
challenging job for the bankers.
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ICICI BANK
Overview
ICICI Bank is India's second-largest bank with total assets of Rs.
3,997.95 billion (US$ 100 billion) at March 31, 2008 and profit
after tax of Rs. 41.58 billion for the year ended March 31, 2008.
ICICI Bank is second amongst all the companies listed on the
Indian stock exchanges in terms of free float market
capitalization*. The Bank has a network of about 1,308 branches
and 3,950 ATMs in India and presence in 18 countries. ICICI
Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of
delivery channels and through its specialized subsidiaries and
affiliates in the areas of investment banking, life and non-life
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INTRODUCTION
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History
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1. SUSTAINABLE DEVELOPMENT:
The bank operates and supports a diverse
range of social projects in the areas of primary education,
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2. FINANCIAL COUNSELING:
IMPORTANCE
ICICI BANK
of
CUSTOMER
SERVICE
IN
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SAVING ACCOUNTS
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YOUNG STARS
FIXED DEPOSITS
Home loans
The No. 1 Home Loans Provider in the country, ICICI Bank Home
Loans offers some unbeatable benefits to its customers Doorstep Service, Simplified Documentation and Guidance
throughout the Process. It's really easy!
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PERSONAL LOAN
CAR LOAN
The No. 1 financier for car loans in the country. Network of more
than 2500 channel partners in over 1000 locations. Tie-ups with
all leading automobile manufacturers to ensure the best deals.
Flexible schemes & quick processing. Hassle-free application
process on the click of a mouse.
2.
SERVICES
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3.ATM SERVICES
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4. CARDS
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accepted both in India and abroad. ICICI Bank Credit Cards give
you the facility of cash, convenience and a range of benefits,
anywhere in the world. These benefits range from life time free
cards,Insurance benefits, global emergency assistance service,
discounts, utility payments, travel discounts and much more.
5. Mutual Funds
Savings on
transaction
costs
As
purchases
and
sales
are
done in bigger quantities, the funds also get the advantages of
lesser brokerage and other reduced transaction costs.
Tax Advantages
In India these funds become even more attractive because of the
tax
advantages, like indexation benefits, long term capital gains tax,
tax free dividends and much more.
The banks meet customers needs
ICICI BANK believe that everyone has specific needs are
priorities. Your needs could vary from buying a house, getting
your daughter married to providing for your childs education.
You might even want to travel the world. All your needs are very
important for us. We can help to fulfill your needs to reality by
helping you select schemes, which would be consonance with
your needs.
Building an Investment Culture
It would be our constant endeavor to inculcate saving and
organized
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6. Online Services
BILL PAYMENT
No more hassles of personally visiting the Biller to pay the
bills. Pay your bills for Utility Companies (Electricity and
Telephone), ICICI Bank Credit Card, Mobile bills, Insurance
Premiums and lot more. Avail our free bill payment services
through your Internet Banking Account. Why be in line, when
you can be ONLINE?
SHOPPING
Shopping at your fingertips. ICICI Bank facilitates you to buy
variety of products online from more than 75 shopping websites.
Payment can be made conveniently using your ICICI Bank
Account. Visit our partner websites, choose your product and pay
using Internet Banking Facility.
TICKET BOOKING
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With ICICI Bank you need not visit Train/ Air ticket booking
reservation centers any more. You can now buy your tickets
online and pay using our Internet Banking Facility. You can book
your Railway Tickets on IRCTC and air tickets on Air Deccan.
MOBILE TOP-UP
Recharge your Prepaid Mobile anytime, anywhere in just a few
minutes by logging into Internet Banking on ICICIBank.com or
by sending a simple SMS. The fastest & easiest way to recharge
your prepaid mobile is now at your fingertips!
SHARE TRADING
Trade in Securities Market Online through the unique 3-in-1
account that integrates your banking, broking and demat
accounts. You can also invest online in Mutual Funds, Initial
Public Offers of the Companies and Postal Savings Schemes
through www.icicidirect.com.
IMPACT OF SERVICES
ICICI Bank Services leaves positive impact on customers
ICICI Bank Services leaves positive impact on customers.
Recently announced that ICICI Banks online services continue to
receive positive feedback from customers during the holiday
season by helping them to conduct transactions at their own
convenience even when they are on holiday abroad. ICICI bank
services allow customers to automatically pay their bills when it
is due; renew their savings as well as current balance
automatically or manually through their mobile, along with
access to many other services that are available on-line i.e.
www.icicibank.com or 24*7 help lines or off-line i.e. bank
branches.
Customers can easily manage their account through the
online services; check the value and details of their bills make
payments online, recharge their bank account and carry out
many transactions quickly and safely at any time with one single
click or can simply by visiting any nearest ICICI Bank Branchs
Offices.
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SERVICES IMPLEMENTED:
SERVICES IMPLEMENTED
MOBILE PHONE:
ON
DEMAND
VIA
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Visa and MasterCard who are the leaders in issuing cards. This
ensures the best protection without any additional cost credit.
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Fixed
Deposits:
INVESTMENTS
ANYWHERE BANKING
ICICI Bank is the second largest bank in the country. It
services a customer base of more than 5 million customer
accounts through a multi-channel access network. This
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LOAN:
Home Loans.
Personal Loans.
Car Loans.
Two Wheeler Loans.
Commercial Vehicle Loans.
Loans against Securities.
Farm Equipment Loans.
Construction Equipment Loans.
Office Equipment Loans.
Medical Equipment.
Cards:
Credit Card.
Debit cum ATM Card.
Travel Card.
DEMAT SERVICES:
MOBILE BANKING.
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NRI SERVICES:
Benefits:
PRICING
MIX:
The pricing
decisions
or
the decisions related to
interest
and
fee
or
commission
charged
by
banks
are
found
instrumental in
motivating
or
influencing the
target market.
The RBI and the IBA are concerned with regulations.
The rate of interest is regulated by the RBI and other charges
are controlled by IBA.
The pricing policy of a bank is considered important
for raising the number of customers vis--vis the accretion of
deposits. Also the quality of service provided has direct
relationship with the fees charged. Thus while deciding the price
mix customer services rank the top position.
The banking organizations are required to frame twofold strategies. First, the strategy is concerned with interest and
fee charged and the second strategy is related to the interest
paid. Since both the strategies throw a vice- versa impact, it is
important that banks attempt to establish a correlation between
two. It is essential that both the buyers as well as the sellers
have feeling of winning.
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PLACE:
This component of marketing mix is related to the offering of
services. The services are sold through the branches. The 2
important decision making areas are making available the
promised services to the ultimate users and selecting a suitable
place for bank branches. The number of branches OF ICICI:
1900 in India and 33 in Mumbai.
For example:
LOCATION OF BRANCH OF ICICI BANK:
Shivam Shopping Centre, S.V.Road, Opp. New Era Cinema,
Malad (W), Mumbai.
LOCATION OF ATMS:
Malad subway
With branch
Mindspace
Orlem
Raheja township
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PROMOTION MIX:
ADVERTISING: Television, radio, movies, theatres
PRINT MEDIA: hoardings, newspaper, magazines
PUBLICITY: road shows, campus visits, sandwich man,
Sponsorship
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PROCESS:
Flow of activities: all the major activities of ICICI
banks follow RBI guidelines. There has to be adherence to
certain rules and principles in the banking operations. The
activities have been segregated into various departments
accordingly.
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PHYSICAL EVIDENCE:
Physical evidence is the material part of a service.
Strictly speaking there are no physical attributes to a service, so
a consumer tends to rely on material cues. There are many
examples of physical evidence, including some of the following:
Internet/web pages
Paperwork
Brochures
Furnishings
Business cards
The building itself (such as prestigious offices or
scenic headquarters)
The physical evidences also include signage, reports,
punch lines, other tangibles, employees dress code etc.
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PEOPLE:
POSITIONING:
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PERCEPTION:
PLANNING:
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PLANNING
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Air2Web's
Platform
Mobile
Internet
provides
businesses with a
competitive edge
enabling its customers to wirelessly access critical back-end
information residing in existing CRM, ERP, SFA or SCM systems.
Information can be accessed across any network and with any
carrier and via any digital wireless device including Short
Message Service (SMS) and web-enabled phones, personal
digital assistant devices (PDAs), and pagers. Air2Web's ability to
work with multiple data and audio formats streamlines
integration with existing applications.
The ICICI Bank Credit Cards was launched in January 2000
with three variants Solid Gold, Sterling Silver and True Blue. The
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ANNEXURE
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QUESTIONNAIRE
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6. What are
customers?
your
future
strategies
to
attract
your
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CONCLUSION
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BIBLIOGRAPHY
The above whole information has been taken by referring books.
BOOKS REFERRED:-
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WEBLIOGRAPHY
www.icicibank.com
www.allbusiness.com
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