Marketing of Banking Services

MARKETING OF BANKING SERVICES
INTRODUCTION OF BANKING IN INDIA
The word “Bank” is originated from the German word “Bank” which means
heap or mound or joint stock fund. From this, the Italian word “banco” meaning
heap of money was coined. The English meaning of “bank” is prevalent today,
i.e., as an institution accepting money as deposits for lending.
A bank is an institution, which deals in money and credit. Thus, bank is an

intermediary, which handles other people’s money both for their advantage and to
its own profit’s but bank is merely a trader in money but also an important
manufacturer of money.
For a common person it may be just a storehouse where he may store his
money; for a businessman it may be a financial institution and a day-to-day
customer it may be an institution where he can deposit his savings.
Bank plays an important role in the economy of any country as they hold
the saving of the public. Provides a means of payment for the goods and services
and provide necessary finance for the development of business and trade. Bank
may also be defined as a financial institution that links the flow of funds from
savers to the users.
Bank is also defined as “one who in ordinary course of business

honors the cheques drawn upon him by person from and for whom he receives
money on current accounts”
“Banking means accepting for the purpose of lending or investment, of

deposits of money from the public, repayable on demand or otherwise and
withdraw able by cheques, drafts, order or otherwise”.
A banking company may be defined as “any company which transacts the
business of banking”
Customers Relationship Management, on the other hand, is an

individualistic approach which concentrates on certain select customers from the
homogeneous groups, and develops sustainable relationships with them for adding
value to the bank. This may be termed as a "Selective" approach. Thus, bank
marketing concept, whether "collective" approach or "selective" approach, is a
fundamental recognition of the fact that banks need customer oriented approach.
In other words, bank marketing is the design and delivery of customer needed
services worked out by keeping in view the corporate objectives of the bank and
environmental constraints.
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BANKING SYSTEM
INTRODUCTION
Bank safeguards money and valuable and provide loans, credit, and payment
services such as checking accounts, money orders, and cashier’s checks. Banks
also may offer investment and insurance products, which they were once
prohibited from selling. As a variety of models for cooperation 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.
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DIFFERENT TYPES OF BANK

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.
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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 individual’s 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
GLOBAL BANK
BANKING
DIFFERENT
TYPES OF
BANKS
CORRESPO-
REGIONAL
NDENT
BANKS
BANKING
SAVINGS BANK
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Meaning of Marketing:
In the most simple and not-technical language marketing may be defined

as a business function entrusted with the creation and satisfaction of customer to
achieve the aims of business itself.
According to Philip Kotler, “marketing is a human activity directing at
satisfying needs and wants through exchange process.”
Business aims at profit:

1. To realize profit, a sale has to be made.
2. To make the sale, a customer has to be created.
3. To retain the customer, he has to be satisfied.
4. To satisfy the customer, his needs have to be me.
5. To meet his needs, the product should conform to the requirements of the
customer.
The analysis exactly fits in to Drucker’s comment on the purpose

of the business, i.e. to create a customer.
This idea may be stretched a little further to structure the term marketing
as one that is directly concerned with demand: its recognition, anticipation,
creation. Stimulation and finally satisfaction. Thus marketing is, therefore, eyes
and ears of the business. It is responsible for keeping the business in close contact
with its environment and informed of events that can influence its operations.
Because of changing emphasis it is no easy task to define the term marketing.
However, it may be defined “as a social and managerial process by which
individuals and groups obtain what they need and want through creating and
exchanging products and value with others”. It is concerned with identifying
consumer ‘needs’ and determining ways in which the organization is able to meet
those needs in a profitable manner. In general, marketing activities are all those
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associated with identifying the particular wants and needs of a target market of
customers, and then going about satisfying those customers better than the
competitors? This involves doing market research on customers, analyzing their
needs, and then making strategic decisions about product design, pricing,
promotion and distribution.
DEFINITION OF
(1)According to William Stanton, “marketing is a total system of business

activities designed to plan, price, promote and distribute want satisfying
products to target markets in order to achieve organizational objectives.”
(2)According to Philips kotler, “marketing is a human activity directed at

satisfying needs and wants through exchange process.”
CHARACTERISTICS OF MARKETING:
(1) Regular and continuous activity: marketing is a continuous activity

in which goods and services are manufactured and distributed to the
consumers. Assembling, grading, packaging, transportation,
warehousing etc. are the activities which are supplementing
marketing and are useful for the smooth conduct of the marketing
operations.
(2) Satisfaction of human wants: marketing activities are basically for

the satisfaction of consumer needs. Identification of consumer
needs should be the starting point of marketing activities.
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(3) Relates to goods and services: marketing is concerned with the

exchange of goods and services with the medium of money between
the buyer and seller of the goods.
(4) Transfer of ownership: marketing of goods brings transfer of

ownership and services and facilities physical distribution
production acts as a base of marketing.
(5) Importance of 4ps: marketing is the sum total of product, price,

promotion and physical distribution which are often termed as the
4ps of marketing. Large scale marketing is possible through
appropriate combination of four Ps called the marketing mix.
SERVICES
Meaning of Service
A service is an activity or benefit that one party can offer to another which is
essentially intangible and does not result in the ownership of anything. Its
production may or may not tie to a physical product. "Thus services are separately
identifiable: essentially intangible activities which provide want satisfaction and
that are not necessarily tied to the sale of a product or service. To produce a
service may not require the use of tangible goods. However, when such use is
required there is no transfer of title [permanent ownership] to those tangible
goods."
According to “American Marketing Association”, “Services are the activities,

benefits or satisfactions which are offered for sale or are provided in connection
with the sale of goods.”
Services as defined in the clause (v) of section 2 of the ‘MRTP Act’

mean service of any description which is made available to potential users and
includes the provision of facilities in connection with banking, financing,
insurance, transport, processing, supply of electrical or other energy boarding or
lodging or both, entertainment amusement or purveying of news or other
information but does not include the rendering of any service free of charge or
under a contract of personal service.
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When a customer buys a service in the service market, he buys the time,
knowledge, skill or resources of someone else who is the provider or supplier of
the service. The buyer receives only satisfaction or benefits from the activities of
the provider who may be an individual, a firm or a company specializing in
selling certain benefits or satisfaction.
CHARACTERISTICS
OF SERVICES
Services have four important
characteristics which make them so different from physical products.
INTANGIBILITY
The distinguishing feature of a service is its dominant
intangible aspect. Some intangible features as listed by ‘J. Bateson’
are:
A service cannot be touched.

Precise standardization is not possible.
There is no ownership transfer.
A service cannot be patented.
Production and consumption are inseparable.
There is no inventories of the services, and.
The consumer is a part of production-process, so the delivery
system must go to market or the customer must come to delivery
system.
Pre-testing the service is not possible as they cannot be seen, tasted, felt, heard
and smelt before they are bought. When a prospective customer cannot experience
the product in advance they are asked to buy what are essentially promises of
satisfaction. The buyer has to have faith in the service-provider. Client's
confidence in the service can be created by taking the help of celebrities,
developing a brand name, increasing services tangibility, emphasizing services
benefits rather than just describing its features.
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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 to
work with larger groups, to work, faster or the service organization can
train more service providers.
VARIABILITY
In most cases human element is involved in providing service. Thus depending
upon who provides them and when and where they are provided the quality of
service is bound to vary. Standardization becomes a difficult task to achieve. So
to ensure quality, service firms should take care to select proper personnel and
give them adequate training for the work and should have a proper system to
monitor customer satisfaction.
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
OWNER
C
INTANGIBILITY INSEPARABILITY
VARIABILITY
PERISHABILITY
SHIP
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CLASSIFICATION OF SERVICES
There is wide variation in the nature of services rendered which
makes it difficult to classify them in a particular manner. They can be classified
from different angles.
First, they may be people-based or equipment-based.
People-based services are rendered by either professional’s viz. doctors,

Accountants, lawyers, skilled workers viz., plumber, carpenter or unskilled
worker viz. Laborers, coolies etc.
Equipment based services may be classified on the basis of amount of
equipment used or nature of equipment used like automated equipment and
equipments operated by skilled labour or relatively unskilled labour. Sometimes
the equipment may add value to the services or it may exist to reduce the amount
of labor needed.
Second, the delivery of service may require the presence of client or may not.
If delivery of service required the presence of client it demands something extra
from the service provider to be alert and considerate of the client's needs.
Third, the service can be classified on the basis of clients purchase motives. If the
service meets a personal need it may be termed as personal service or if it meets a
business need it may be termed as a business service.
Fourth, on the basis of service providers motives (profit or non-profit) and form
(private or public) services can be categorized into four types by taking two
Characteristics at a time, i.e. private profit seeking, private charitable and
similarly public profit seeking, public charitable.
Finally, a classification can be made on the basis of the nature of services

rendered. These may be financial (Banking, Insurance), medical, educational,
personal transport, communication, storage, entertainment, consultancy etc. This
may lead to creation of specialized service-industries as we have for physical
products.
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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
An analysis of contemporary literature reveals clearly is
conceptual variation in the use of the term marketing. They describe it as a
“function”, an “orientation” or an “attitude” or a management science or
technique. A closure analysis would reveal that marketing in fact conveys all of
these and often more. An attempt is made here to trace the evolution of marketing
and deal with all such concepts through which marketing has been viewed.
EVOLUTION OF MARKETING CONCEPT

If we go back to the times before and after the nomads tried to settle
down on the banks of rivers, we will find that there were no markets. This can be
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said as a ‘self-sufficient stage’. Each family then was a self-sufficient unit as far
as production and consumption were concerned. Barter system came into vogue
giving rise to an ‘exchange oriented’ stage. To facilitate this exchange process
central market were developed. These developments laid the foundation stone of
marketing.
The term marketing has changed and evolved over a period of time,
today marketing is based around providing continual benefits to the customer,
these benefits will be provided and a transactional exchange will take place.
With the change in the business environment there has also been a change in
the areas of trust. Emergence of competition has gradually changed the seller’s
market in to buyers’ market. This period of transition has witnessed changes in
the areas of focus and angle from which marketing is viewed. There are five
competing concepts on which marketing is based. They are:
Production Concept
The production concept holds that consumers favor those products
that are available and highly affordable. Where the demand of a product is more
than its supply or where the product's cost is higher, it is natural that one will
concentrate on finding ways to increase production to make the product available
and affordable to consumers. Thus, the emphasis was on the production and
manufacturing and making the process as efficient as possible, seeking to achieve
the greatest output at the most economic levels of cost.
Product Concept
The product concept holds that consumers favor those products that offer the
quality, performance and features and therefore the organizations should devote
its energy to making continuous product improvements. The product concept
leads to marketing myopia because it presumes that customers will continue to
buy the product as long as the quality of the product is good but it overlooks the
fact that customers are interested in their need satisfaction not in the product. Any
other unproved product of a competitor may satisfy the need of the customer
better.
Selling Concept
This concept was based on the idea that the customer will either not buy or not
buy enough of the organization’s 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
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attitude was that the sales department has to sell whatever the organization
produced.
Marketing Concept
The marketing concept is a more recent philosophy, which brought about a
significant change in the approach of organizations towards their products and
customers, in marketing; the attention is focused on producing such goods which
are wanted by the customers rather than selling whatever goods have been
needlessly produced. Thus the marketing concept holds that the key to achieving
organizational goals consists in determining the needs and wants of target-markets
and delivering the desired satisfaction more effectively and efficiently than
competitors.
Societal Marketing Concept

In the age of environmental deterioration, resource shortages, explosive
population growth, worldwide inflation and neglected social services, it is
expected that firms that senses, serves and satisfies individual wants should gear
themselves to act in the best long run interest of consumers and society. Therefore
there is emergence of societal marketing. Thus, this concept connotes that the
organizations task is to determine the needs, wants and interest of target markets
and to deliver the desired satisfaction more effectively and efficiently than
competitors in a way that preserves or enhances the consumer’s and society's
well-being.
SERVICE MARKETING
The concept of marketing discussed previously was initially developed to
market a physical product. Now it becomes essential to find out if the same
concept developed for marketing of physical products is applicable to the
marketing of services. Before we come to this point, it is natural that we have no
two meanings regarding services and their characteristics.
The Importance of Marketing in the Service-Sector:

Marketing was not that popular in services-industries 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.
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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
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
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(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 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.”
CONCEPT OF BANK MARKETING

Marketing as it is viewed today is a way of managing a business so
that each strategy is evolved with foreknowledge of the impact of such decision
on the customer. Banks have broadly three dimensions, i.e., deposits, borrowings
and other allied services. Anyone who interacts on any of these fronts is qualified
to be a customer of a bank. Thus, a bank renders financial services as an
intermediary. As it renders personalized services and the present emphasis in
Marketing is customer satisfaction it will not be inappropriate here to observe that
“customer of a bank is king”.
Therefore bank marketing implies that “it is the creation and delivery of financial
services suitable to meet the customer's needs at a profit to the bank”.
The concept of bank marketing encompasses:
Identifying the most profitable markets now and in future;

Assessing the present and future needs of customers;
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Setting business development goals and making plans to meet them;

Managing the various services and promoting them to achieve the plans;
Adapting to a changing environment in the market place.
From the above discussion of the bank marketing it can be understood

that the existence of the bank has little value without the existence of the
customer. The key task of the bank is therefore not only to create and win more
and more customer but also to retain them through effective customer service.
Marketing as related to banking is to define an appropriate promise to a customer
through a range of services (products) and also to ensure effective delivery
through satisfaction. The actual satisfaction delivered to be a customer depends
upon how the customer is interacted with. It goes on to emphasis that every
employee from the topmost executive to junior most employee of the bank is
marketer.
MARKETING STRATEGIES
INTRODUCTION
Marketing strategy implies development of an action plan to achieve
the marketing objectives. It involves skill and concerned effort on the part of
management to evolve tools and techniques, which are understood and accepted
throughout the organization in furtherance of the marketing cause.
According to Grantors, marketing strategy in the case of services
may consist in traditional external marketing, internal marketing and interactive
marketing.
Traditional external marketing consists of usual four ‘Ps’ of Product,
Price, Place and Promotion of marketing mix. Internal marketing is that the
service firm must effectively train and motivate its customer-contact-employees
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as well as all the supporting service personnel to work as a team to provide

customer satisfaction. Interactive marketing is that the perceived service quality is
highly dependent on the quality of buyer/seller interaction.
Traditional Marketing- the Marketing Mix

Marketing mix is a combination of tools and techniques with
which a marketer has to meet the consumers in furthering his marketing
objectives. The tools, as propounded by different authorities, are many, but
traditionally they are the famous 4 Ps viz., Product, Price, Place and Promotion.
Therefore, they constitute the tools of traditional marketing.
THE CONCEPT OF MIX:

Before the individual tools and techniques are discussed one
point which needs emphasizing is that none of the tools are very useful in
isolation. It is important, therefore, to think from the very beginning in terms of a
judicious blend of the tools and techniques of marketing mix. “Business executive
is a ‘decider’, an ‘artist’ a ‘mixer of ingredients’, who sometimes follows a recipe
prepared by others, sometimes prepares his own recipe has he goes along,
sometimes adapts a recipe to the ingredients immediately available and sometimes
experiments with or invents no one else has tried".
From the above statement, given by Prof. ‘James Culliton’ in his
study of “manufacturer’s marketing cost”, Prof. ‘Neil H. Borden’ took a clue to
describe the marketing executive as a “mixer of ingredients” one who is
constantly engaged in fashioning creatively a mix of marketing procedures and
policies in his efforts to produce a profitable enterprise. Thus the concept of
marketing mix is evolved.
It is needless to state that all products and services are not for all
segments, all segments may not afford the same price, the same place may not be
suitable for all segments for delivery of the products/service or the same
promotional measure May not arouse same level of confidence in all the
customers. Therefore, the essence of traditional marketing lies in providing each
group of customers a segment with a cost-effective mix of product, price, place
and promotion most suits their needs.
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4 P’S OF MARKETING
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 company’s 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 center 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

A product's life cycle (PLC) can be divided into several stages
characterized by the revenue generated by the product. If a curve is drawn
showing product revenue over time, it may take one of many different shapes, an
example of which is shown below:
PRODUCT LIFE CYCLE CURVE:
DEVELOPMENT STAGE:
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Product development is the incubation stage of the product life cycle. There are
no sales and the firm prepares to introduce the product. As the product progresses
through its life cycle, changes in the marketing mix usually are required in order
to adjust to the evolving challenges and opportunities.
INTRODUCTION STAGE
When the product is introduced, sales will be low until
customers become aware of the product and its benefits. Some firms may
announce their product before it is introduced, but such announcements also alert
competitors and remove the element of surprise. Advertising costs typically are
high during this stage in order to rapidly increase customer awareness of the
product and to target the early adopters. During the introductory stage the firm is
likely to incur additional costs associated with the initial distribution of the
product. These higher costs coupled with a low sales volume usually make the
introduction stage a period of negative profits.
GROWTH STAGE:
The growth stage is a period of rapid revenue growth. Sales
increase as more customers become aware of the product and its benefits and
additional market segments are targeted. The Marketing team may expand the
distribution at this point. When competitors enter the market, often during the
latter part of the growth stage, there may be price competition and/or increased
promotional costs in order to convince consumers that the firm's product is better
than that of the competition.
MATURITY STAGE:
The maturity stage is the most profitable. While sales
continue to increase into this stage, they do so at a slower pace. Because brand
awareness is strong, advertising expenditures will be reduced. Competition may
result in decreased market share and/or prices. The competing products may be
very similar at this point, increasing the difficulty of differentiating the product.
The firm places effort into encouraging competitors' customers to switch,
increasing usage per customer, and converting non-users into customers.
DECLINE STAGE:
Eventually sales begin to decline as the market becomes saturated, the
product becomes technologically obsolete, or customer tastes change. If the
product has developed brand loyalty, the profitability may be maintained longer.
Unit costs may increase with the declining production volumes and eventually no
more profit can be made.
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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.
BOSTON CONSULTANCY GROUP

This product portfolio matrix classifies product lines into four
categories. The BCG model suggests that organizations should have a healthy
balance of products within their range. The Boston Consultancy Group classified
these products as following:
The BCG matrix divides the products and services into 4 groups: Dogs, Cash
Cows, Stars, and Dogs are products and services which are not doing well in a
market and with little potential. They are the products which might attract
customers who will then be attracted to more profitable services. But no bank can
bear the cost of too many dogs.
Cash cows are product and services form the core of the business always in
demand and produce high revenue in a stable market. Cash Cow is products at the
mature stage of the lifecycle, they generate high amounts of cash for the
company, but growth rate is slowing. There are chances that the product may slip
into decline; appropriate marketing mix strategies should be employed to try to
prevent this from happening.
Stars are products making an important contribution to the business in a growing

market. Stars have high market shares that operate in growing markets. The
product at this stage should be generating positive returns for the company.
Question Mark is a product which is presently enjoying low market share but is
considered to have high growth potential. A push at this stage will convert the
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problem child’ into star product. These are products with low market share but
operate in high market growth rates. The company puts a lot of resources in this
product in the hope that it will eventually increase market share and generate cash
returns in the future. ICICI bank has high market growth along with highly
capturing market share and hence he falls under the category STARS.
PRICE
The second P of the marketing mix is price. Price refers to the
amount of money a customer is willing to pay for the product. From the supplier’s
angle, it is the amount of money at which the firm is prepared to offer its goods
and services. Buying and selling, in a competitive market, is a game in which a
transaction takes place. It is necessary that both buyer and seller must have the
feeling of winning from the transaction.
The seller, looks to the cost plus profit and buyer looks to the satisfaction in
return for price to be paid. The satisfaction is a judgment, a notion, a feeling and
as such cannot be quantified in terms of money. It differs from person to person.
Accordingly, the variable that determines the satisfaction would differ from
person to person. Thus the banks while pricing their products must take care of
this factor and rely on product quality and promotion. A hike in price is always
viewed by the public with skepticism and distrust but it could be alleviated by
better communication, between bankers and their customers. One survey pointed
out that when customers were offered an explanation for changes in fees, the
proportion of customers, who viewed the changes as justified, increased by about
50 per cent.
The other side of the pricing is cost. Price should cover the costs and a return for
the organization to thrive. But the relationship between costs and benefits offered
by the banks in India, over the years, has been very hazy. This is because banks
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were operating in an administered structure where the rates of interest on deposits

and advances were prescribed by the RBI. Therefore, theories relating to pricing
which assume the free play of market forces were of little relevance. Due to lack
of professional approach to the pricing of services offered by the banks there were
variations in charges for different services. However, due to the efforts of Indian
Banks Associations, public sector accepted a uniform schedule of charges in
respect of several services in 1985.
Since 1991, after liberalization of financial system and gradual interest rate
deregulation by RBI there has been keen competition among banks resulting in
dwindling spreads, from 7 percent in 1991 to 2 per cent in 1996. Participation in
the rate war (price fixation) without concern for cost will be suicidal. So a cost in
the competitive scenario is of paramount importance.
While there is no single recipe to determine pricing, the following is a general
sequence of steps that might be followed for developing the pricing of a new
product:
1. Develop marketing strategy - perform marketing analysis, segmentation,

targeting, and positioning.
2. Make marketing mix decisions - define the product, distribution, and
promotional tactics.
3. Estimate the demand curve - understand how quantity demanded varies with
price.
4. Calculate cost - include fixed and variable costs associated with the product.
METHODS OF PRICING (PRICING TRIPOD)
1. COST BASED PRICING:

This the simplest form of pricing. In this pricing strategy, you take the "Cost
Price" of the product and you add to it how much profit you would like to make
per unit sold. What you get is the “Selling Price”. To understand this better,
consider you make 100 units of a product and it costs you Rs.10 per piece. Now
you decide that you would like to make a 2% profit.
So you charge Rs.2 extra per product and keep that is your profit. This seems to
make sense. However, this pricing strategy is very crude. This pricing strategy is
independent of the market and your target consumer. Besides this, in the
production of product, these must be some "fixed cost" that is independent of the
quantity produced. This cost may not be directly accounted for in this system.
2. DEMAND BASED PRICING

In this method of pricing the cost is not considered but the service provider
allows the demand to determine the price. Demand based pricing is generally used
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to where the services are price sensitive. The consumer perception of the value of
the service quality varies. Therefore successful demand based pricing is based on
effective segmentation of market to achieve the maximum price from the
segment.
3. COMPETITION BASED PRICING

Homogenous services that are standardized without special service attributes are
the best examples of competition based pricing. In this method of pricing the price
is determined on the basis of competitor’s price. Price under such situations may
be used to gain short-term competitive advantage over rivals.
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.
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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 customers it is not
only sufficient to properly price the product, but it is also necessary to physically
move it to the place of consumption. The very objective of distribution is to get
the right product, at the right places and at the right time at the least cost. Hence,
distribution involves establishment of a strategy covering channels of distribution
and physical distribution of the product from the points of origin to the points of
consumption at a profit.
In case of goods the distribution may be direct, or indirect through agents,

middlemen and/or mercantile middlemen. But in the service sector, the
distribution is ought to be direct because of the character ‘inseparability’. Both
production and consumption of services take place at the same time.
In the banking context distribution refers to the establishment and functioning of a

network of branches and other offices through which banking services are
delivered. Extensive branch network helps a bank to have access to a larger
section of the people. From the customer's angle it is the proximity and
convenience of operation which plays a vital role in the selection of a bank, as
their need for banking service is repetitive in nature.
Suitable location of the bank, proper layout and provision of facilities for the
customer are the key factors to get majority of customers. Selection of suitable
location is not entirely under control of a banker. It has to get the sanction of RBI,
though control measures have been deregulated to a large extent. It has been the
practice of banks, with an intention to become nearer to the customers, to locate
their branches in the congested areas of marketplaces. While doing so one should
not overlook the factors such as availability of parking space and traffic.
Though location of banks is guided by many extraneous factors, banks
have discretion in designing the structure of the building, planning the internal
layout, maintenance and upkeep of their premises. In the olden days, banks were
imposing structures, designed to impress the elite section of the society. In terms
of their physical appearance they were more awe-inspiring than inviting. But shift
to mass banking and the resultant emphasis on social approach have dictated the
appearance of branch offices to be more customer-friendly. Besides the structure
of the building, the neat, clean, tidy premises, proper branch layout, i.e., position
of the counters, space for movement, queuing in front of the counters, waiting
lobbies, etc., attract people to walk in. Upkeep and maintenance of the branch is a
regular process and not one time measure. “Fight dirt and remain clean” should be
cultivated as part of organizational culture.
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The banks in India, besides having full-fledged branches, also operate various
other types of outlets like extension counters, mobile branches and specialized
branches for delivery of banking services. The need for enlarging their activities
and upgrading them for marketing of services should be explored.
It is true that the scope for opening new branches in the urban and metropolitan
areas of the country is extremely limited but by splitting up bigger branches, up
gradation and more effective use of non-branch outlets, acquiring branches
through amalgamation of smaller banks, etc., banks can overcome this limitation.
The place is more than physical place. It is where actual transaction takes place. It
can be beyond the bank premises. And this has been made more significant by
technological advancements which have extended it to the doorsteps of the
customer even into the cozy atmosphere of his living room.
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 firms product and services, their unique benefits, uses
and features as well as price and place at which those would be available. It is
imperative on the part of a marketer to begin by attention than creating interest,
inspiring desire and precipitating the action for purchase of its product or and
above all it should result in a mutually satisfying exchange. Thus the essence of
promotion is the supply of required information which in turn will stimulate the
target customer and create a product preference among them. To put it in other
words, the term promotion embraces influence processes exerted by the sellers of
product on those who seek to be buyers.
In banking context promotion is a challenging job. Banks sell benefits. The

services rendered by the banks can-not be pre-tested or seen by the customers. For
this bankers have to organize effective promotional measures which seek to
inform, educate and actualize the markets. As, we have observed, communication
provides the base for promotion. It is a process of transmitting meaning through
written, oral and non-verbal message. It implies that receiver understands the
message in the same sense what the sender wishes to communicate.
THE PROMOTION MIX

Promotion comprises of four major elements viz., Advertising, Publicity, Sales
promotion, Personal selling. To achieve the objectives of promotion i.e., to
inform, to persuade, to remind and to reinforce, all the four methods are used to
some degree. Selection of the mix is based on their relative strength. Thus
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promotional mix would vary from time to time, bank to bank, and place to place
depending upon the major customer segments and the type of service offered.
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.
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
customer’s problems;
Ability to solve the customer’s problems and persuade the customer to accept the
solution.
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Push & Pull Strategies

Communication by the manufacturer is not only directed towards
consumers to create demand. A push strategy is where the manufacturer
concentrates some of their marketing effort on promoting their product to retailers
to convince them to stock the product. A combination of promotional mix
strategies are used at this stage aimed at the retailer including personal selling,
and direct mail. The product is pushed onto the retailer, hence the name. A pull
strategy is based around the manufacturer promoting their product amongst the
target market to create demand. Consumers pull the product through the
distribution channel forcing the wholesaler and retailer to stock it, hence the name
pull strategy. Organizations tend to use both push and pull strategies to create
demand from retailers and consumers.
PROMOTIONAL MEASURES BY INDIAN BANKS:
The Indian banking sector seems to have displayed a half-hearted

approach towards promotion strategies. There seems a lack of commitment to
advertising, communication and personal selling. As banks grew in their size and
reach and faced competition from within and outside, the importance and
imperative of business promotion was felt.
Till the late sixties only a few banks were taking initiative to insert
short, perfunctory advertisements in magazines and newspapers. A change in the
advertising was marked after the nationalization in 1969. But they were to operate
within a controlled framework in pursuing promotional measures. A joint
publicity committee of public sector banks was constituted towards the end of
1971. Though originally constituted for mobilizations of savings, subsequently it
was reconstituted and broad based. It brought out advertisements on matters of
common interest covering the areas like deposit mobilization, customer education,
advances to priority sectors and performance of public sector banks etc.
In July 1982 promotional expenditure of each public sector bank was Restricted to
0.01 per cent of its gross earnings and items that would be included under the
head “Publicity and Advertisement Expenses” were also listed out. But on March-
April 1984 a ban was imposed on the incurring of publicity expenses. In
Oct.1985, subject to certain conditions, there was relaxation in such expenses. In
1987 the banks were allowed to spend a maximum of 0.05 percent of their
domestic gross earnings; and 0.01 percent of overseas gross earnings and
contribute 20 percent of their publicity budget to JPC. In 1989-90 the contribution
made by the banks was increased to 30 percent of their publicity budget. The
permitted cases in which public sector banks can advertise in the press are:
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(1) Obligatory advertisements: branch opening and shifting, customers meet;

(2) Statutory advertisements: Balance sheet, P&L A/c;
(3) Unique schemes
It appears that public sector banks are in a regulated
environment whereas private and foreign banks in India enjoy relatively more
freedom in spending on advertising and publicity.
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 mix that satisfies the needs and wants of these internal customers. The
same marketing tools which are used to attract and retain customers (external) can
gainfully be used to attract, retain and inspire the employees (internal customers.),
particularly the best among them.
The logic behind such type of thinking can be attributed to following facts.
Customers buy products and services of the bank exchanging their financial
resources. Similarly employees also buy jobs of the bank exchanging the human
resource. As both are drawn from the same society the exchange process is found
to be similar in many respects. It may be argued that in Indian context, a customer
may have a better and wider option to change banks but employees do not have
such opportunity. In future, it is expected that the liberalized scenario may
provide, the best of the employees, with such opportunity. But one thing for sure
is that it remains the discretion of the employee to give his best or not. In a
financial industry like banks the product differential and price competition is
almost nil or the distinctiveness is difficult to maintain. The only area where a
distinctiveness can be maintained is the quality of human resource. Further,
banks provide services and services by their nature are inseparable from the
provider. In this context the bank employees who provide these services assume
paramount importance. How far and to what extent the quality level of their
performance would reach is solely the discretion of the employee. As a satisfied
employee can deliver total satisfaction to a customer, it becomes important for
banks to satisfy the needs and wants of its employees on priority basis.
These activities can be further reinforced by certain
promotional activities directed at them. A highly motivated workforce is a
common trait of all successful organizations. Though it is difficult to ascertain
what precisely motivates employees, a clue can be taken from Abraham Mallow’s
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hierarchy of needs. Presuming that the physiological needs of the bank employees
have by and large, been taken care of, greater emphasis should be laid on
psychological and self-actualizations needs such as: security, contribution to
society, esteem and the need to reach one's full potential, etc. It is necessary to
create an organizational climate where superior and extra-ordinary contributions
made by employees at various levels are noticed and acknowledged.
Advertising is a potent tool in making an employee aware, motivated, educated,
and inspired. Though a poster at the branch with the headline such as “you never
hear our people say 'that's not my job” or “if you are not satisfied tell us, if
satisfied tell others” are directed towards external customer. Yet, it is clearly
meant for the internal customers too and will have tremendous impact on them.
Of course, before putting up a poster like that would need taking staff into
confidence. It is needless to say that any advertising campaign which can
originate from the staff themselves would have more credibility and acceptability.
Or else it may be treated derisively and be counter-productive. Senior executives,
in this regard, have a definite role to play.
INTERACTIVE MARKETING (MOMENT OFTRUTH)

Moment of truth means that this is the time and place the
service provider has the opportunity to demonstrate to the customer the quality of
its services.
Quality of service is dependent on the quality of buyer/ seller
interaction. This is the point, which may lead to creation of a customer or not.
Though, we may Win him at that point of time, because of some other reasons, we
may not retain Him or he may not come to us again if that interaction is not
satisfying for him to leave a lasting impact on him. We may have a beautiful
marketing mix of product, price, place and promotion, which bring the customer
to us. We may still have a good internal marketing, which prepares a band of
knowledgeable employees ready. But if we fail at this point all our effort so far
will be futile. This is the reason, which makes interactive marketing so important.
Thus interactive marketing describes employee’s skill in handling customer
Contact and involves the following:
1. Employee
2. Process
3. Customer
INTERACTIVE MARKETING
Interactive Marketing As indicated in above it is the group of able and Willing
employees, which make the starting point of interactive marketing. They are to be
aided by proper processes (systems and procedures) as suitable vehicles to render
best customer service, which in turn will result in satisfied and loyal customers.
Internal marketing provides the required employees orienting them for the job.
30
External marketing
The external marketing efforts are the traditional functions of
marketing of the customers and make promises to the customer as to what to be
delivered. Anything conveyed to the customer in any form before the delivery of
service can be viewed as a part of external marketing function.
According to Zeithaml and Bitner, the customer’s expectation of the
service can be derived from the following sources:
1. Past experience.
2. Corporate image.
3. Word of mouth communication.
Care should be taken to maintain credibility while setting the
promise because a very high expectation may lead to a highly dissatisfied
customer.
Process: (System and Procedures)

In service marketing, process, which covers systems and procedures are the
vehicles for delivery of customer satisfying needs. Systems and procedures, in
vogue in Indian banks, were not seen as aids to promotion of client satisfaction.
They have not kept pace with the changing environment and changing demands.
They were contending with maintenance of books of accounts and serving to
traditional customers and that too, with strict observance of the rules. Multiplicity
of returns and duplicity of efforts have added to the workload of the staff leaving
them insufficient time for paying attention to customer needs.
It is expected that the objectives of systems and procedures, instead
of being satisfactory maintenance of books of accounts and safe documentation,
should be geared up to ensuring prompt and speeding delivery of services to the
customer. Therefore, it needs to be simplified and should be backed by proper
office layout and smooth flow of work so - that use of intermediary people to
move papers is minimized. The inter-relationship between people and procedure
need not be overlooked. It is they who carry out the procedure.
Any innovation must not be imposed on them; rather a conscious
effort should be made to involve them in the process of change. Their views and
suggestion should be given due importance. For which, formal suggestion
schemes, interaction forums like staff meetings, customer service committees and
quality circles may be given due importance. Management audit can be
undertaken as a tool for ensuring ongoing improvements relating to systems,
procedures and management policies.
The benchmarking in process shown below:
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BANKS IN URBAN AREAS (ICICI BANK)
10 Ps OF BANKING
1. Product:
The business has to produce a product that people want to buy. They have to
decide which ‘market segment’ they are aiming at – age, income, geographical
location etc. They then have to differentiate their product so that it is slightly
different from what is on offer at present so that people can be persuaded to ‘give
them a try’
2. Promotion:
Customers have to be made aware of the product. The two main considerations
are target market and cost. A new business will not be able to afford to advertise
on national television, for instance and would not wish to because its market will
be local to start with. Leaflets, billboards, advertisements in local newspapers,
Yellow Pages and ‘word of mouth’ would be more appropriate.
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:
PENETRATION PRICING – charging a low price, possibly not quite

covering costs, to gain a position in the market. This is quite popular with new
businesses trying to get a ‘toehold’.
CREAMING – the opposite to penetration pricing, this involves charging a

deliberately high price to persuade people that the product is of high quality.
Luxury car makers often use this strategy.
COST PLUS PRICING – this is the most common form of pricing. Costs
are totaled and a margin is added on for profit to make the total price.
4. Place:
"Place" deals with the distribution channels by which your prospects will be able
to buy and receive your products and services. Clearly without defining the niche
prospects, it is impossible to set up the best distribution channels.
5. People:
An essential ingredient to any service provision is the use of appropriate staff and
people. Recruiting the right staff and training them appropriately in the delivery
of their service is essential if the organization wants to obtain a form of
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competitive advantage. Consumers make judgments and deliver perceptions of the

service based on the employees they interact with. Staff should have the
appropriate interpersonal skills, attitude, and service knowledge to provide the
service that consumers are paying for. Many British organizations aim to apply
for the Investors in People accreditation, which tells consumers that the staffs are
taken care by the company and they are trained to certain standards.
6. Process
Refers to the systems used to assist the organization in delivering the service.
Imagine you walk into Burger King and you order a Whopper Meal and you get it
delivered within 2 minutes. What was the process that allowed you to obtain an
efficient service delivery? Banks that send out Credit Cards automatically when
their customer’s old one has expired again require an efficient process to identify
expiry dates and renewal. An efficient service that replaces old credit cards will
foster consumer loyalty and confidence in the company.
7. Physical Evidence:
Where is the service being delivered? Physical Evidence is the element of the
service mix which allows the consumer again to make judgments on the
organization. If you walk into a restaurant your expectations are of a clean,
friendly environment. On an aircraft if you travel first class you expect enough
room to be able to lie down! Physical evidence is an essential ingredient of the
service mix; consumers will make perceptions based on their sight of the service
provision which will have an impact on the organizations perceptual plan of the
service.
8. Positioning:
POSITION (STP) process is 'positioning.' Positioning is undoubtedly one of the
simplest and most useful tools to marketers. After segmenting a market and then
targeting a consumer, you would proceed to position a product within that market.
9. Planning:
Marketing plans are vital to marketing success. They help to focus the mind of
companies and marketing teams on the process of marketing i.e. what is going to
be achieved and how we intend to do it. There are many approaches to marketing
plans.
10. Perception:
As perception differs from person to person, so do the results of the positioning
map e.g. what you perceive as quality, value for money, etc., and is different to
my perception.
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PRODUCT
PROMOTION
PRICE
PLACE
PEOPLE
CUSTOMER SERVICE
Customer service has been defined in many ways, but it will be better
understood if we define it from the customer’s 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.
IMPORTANCE OF CUSTOMER SERVICE IN BANKS

Bank is a commercial outfit marketing financial products. Its
products are services offered by them. Services are performances. Production and
consumption of services occur simultaneously. Therefore, the frontline people and
their interaction with customers, thus everyday postures, gestures, actions,
reactions, emotions, activities and impressions contribute significantly in
projecting a particular image of the bank distinguishing it from the rest of the
field.
Further customer service has a tremendous retention-value. If we can-not
retain a customer, all our efforts in terms of time and money in creating and
winning a customer would be a sheer waste. Besides, it is found that retaining
customer is often cheaper than finding a new customer. In addition to that
satisfied customers recommend the business to others.
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Thus a customer is viewed as a long-term relationship rather than a party to

a stray single transaction. The initial transaction is taken as the starting point and
opportunity to establish a relationship through providing total customer
satisfaction, which in turn will ensure further business, from him. This is what we
term as relationship banking. Qualitative customer service and total satisfaction
forms the edifice of “Relationship Banking”.
CONCEPT OF CUSTOMER SATISFACTION

Satisfaction is a function of expectations about a product and its
perceived performance. When perceived performance of a product/service
matches or exceeds one’s expectations of service quality satisfaction occurs and
vice-versa. The service quality attributes in a banking contest are of two types.
First the product per se attributes like interest charges, accuracy of entries and
reliability etc.
Second, psychological attributes like recognition as important customer, personal

favor by the staff etc. As per product per se attributes, if a bank fails to meet them,
it causes dissatisfaction. But, if bank meets them, they are treated as routine jobs
that any bank, would have performed. Thus absence of such factors causes
dissatisfaction while their presence would only avoid dissatisfaction. They, by
themselves, would not motivate a customer any further than the present level.
Therefore, these attributes are treated as ‘maintainers’. On the other hand, if a
bank fails to meet expectations in the area of personnel related psychological
factors, it may not result in dissatisfaction but their satisfaction will result in high
motivation and elation on the part of the customer. Therefore, these attributes are
treated as ‘motivators’. Thus for a customer to be totally satisfied, first there
should be satisfaction with respect to product per se attributes then, in addition, he
should get favorable treatment by the staff and the service should be delivered
with a human touch.
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CUSTOMER SERVICE IN INDIAN BANKS

Customer service in Indian banks does not have a good track
record. The reasons are many. Before nationalization banks were serving to the
upper and middle strata of the society and Banker. Customer relationship was
based on the principle of uberrim fidae. After nationalization they were directed
to expand and enlarge their field of activities at an unprecedented pace which, in
the absence of or meager direct recruitment resulted in vertical movement of staff
who were inexperienced and deficient in knowledge to handle diverse activities.
In the wake of emerging interbank competition and shift in focus to business
growth the accounting accuracy and the standard of customer service was diluted.
The worst damage was done to customer service by the creation of employees’
unions. Bank management had to compromise; at times, even on principle, in the
hope of maintaining industrial peace. Labor laws governing the industry provided
rather unqualified protection to employees and it became virtually difficult for
management to take action even in cases of extreme indiscipline and dereliction
of duty. Poor customer service was a natural corollary to this atmosphere of
permissiveness prevailing in the banking industry.
Which became a matter of great concern for the Government, RBI and the Banks
alike?
As early as in 1972, the Banking commission, appointed by the Government of

India under the chairmanship of Sri R.G. Saraiya, had made several
recommendations on customer service. In the year 1975, the Government
appointed a working group on customer service in banks under the chairmanship
of Sri R.K. Talwar. This working group made 176 recommendations covering all
the important areas relating to
Customer service besides some general, recommendations. Some important
recommendations of the Talwar Committee that have been implemented are:
1. Establishment of customer service committee/staff committee in the every
ranch.
2. Customer meets to be held at the branches at least once in a half year.
3.15th of every month (next day if 15th is a holiday) to be observed as customer’s
day at branches and administrative offices.
4. Provision of complaint-cum-suggestion box in every branch.
5. Provision of ‘May I help you’ counter in branches.
6. Immediate credit of cheques up to Rs.2, 500 which has since been increased to
Rs.15,000.
7. Payment of penal interest in case of delay of collection of cheques.
During the eighties, greater importance was given to the redressal of
grievances of customers. The government and the RBI, to redress the grievances
took several steps such as setting up of Customer Service Committees, Customer
Service Centers in various cities, Directorate of Public Grievances under the
37
Cabinet Secretariat, etc., as also in the observance of Customers Day. The year
1986 was celebrated by the public sector banks as “customer service year”. The
Year 1988 witnessed further improvement in customer service with the
Implementation of recommendation of the Estimates Committee. In the year 1991
Goiporia Committee was appointed to look in to the customer service.
In the year 1995 as a landmark event in the Indian banking history ‘Banking
Ombudsman’ was established by RBI with objective of resolving customer
grievances relating to provision of banking services in a quick and inexpensive
manner. Another important development was in the area of mechanization and
Computerization.
Despite all these measures devised and adopted by banks, either
expectations of a customer from his bank have gone up or banks have failed to
deliver the services in a customer satisfying manner, the criticism for poor
customer service still remains. Hence, there is an urgent need for the banks to re-
look at all the attempts made so far by them in improving customer service.
38
ICICI BANK
Overview
ICICI Bank is India's second-largest bank with total assets of Rest. 3,997.95
billion (US$ 100 billion) at March 31, 2008 and profit after tax of Rest. 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 insurance, venture
capital and asset management. The Bank currently has subsidiaries in the United
Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain,
Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and
representative offices in United Arab Emirates, China, South Africa, Bangladesh,
Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in
Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE).
INTRODUCTION
ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is
India's largest private sector bank in market capitalization and second largest
overall in terms of assets. ICICI Bank has total assets of about USD 79 Billion
(end-Mar 2007), a network of over 950 branches and offices, about 3500 ATMs,
and 24 million customers (as of end July '07). 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 insurance, venture
capital and asset management. ICICI Bank's equity shares are listed in India on
stock exchanges at Kolkata and Vadodara, the Stock Exchange, Mumbai and the
National Stock Exchange of India Limited and its ADRs are listed on the New
York Stock Exchange (NYSE).
39
History
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in
ICICI Bank was reduced to 46% through a public offering of shares in India in
fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal
2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock
amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative
of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution
for providing medium-term and long-term project financing to Indian businesses.
In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group
offering a wide variety of products and services, both directly and through a
number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the
first Indian company and the first bank or financial institution from non-Japan
Asia to be listed on the NYSE.
About ICICI Bank

ICICI was established by the Government of India in the 1960s as a Financial
Institution (FI, other such institutions were IDBI and SIDBI with the objective to
finance large industrial projects. ICICI was not a bank - it could not take retail
deposits; and nor was it required to comply with Indian banking requirements for
liquid reserves. All this changed in 1990s. ICICI founded a separate legal entity
- ICICI
Bank which undertook normal banking operations - taking deposits,
credit cards, car loans etc. The experiment was so successful that ICICI merged
into ICICI Bank ("reverse merger") in 2002. At the time of the reverse merger,
there were rumors that ICICI had large proportions of Non-Performing Loans
("NPA", as they are known in India) on its books - in particular to the steel
industry. Since 2002, there has been a general revival in Indian industry (and
metal based industry in particular). It is widely believed that the proportion of
NPAs has come down to prudent levels (even if it were high earlier). ICICI Bank
now has the largest market share among all banks in retail or consumer financing.
ICICI Bank is the largest issuer of credit cards in India.
It was the first bank to offer a wide network of ATM's and has a large network of
ATM's. ICICI Bank now has the largest market value of all banks in India, and is
widely seen as a sophisticated bank able to take on many global banks in the
Indian market. The Bank is expanding in overseas markets and has the largest
international balance sheet among Indian banks. The international banking
business was set up in 2002 to implement a focused strategy for the overseas
40
market. The Bank now has wholly-owned subsidiaries, branches and

representatives offices in 18 countries, including an offshore unit in Mumbai. This
includes wholly owned subsidiaries in UK, Canada and Russia, offshore banking
units in Singapore and Bahrain; advisory branch in Dubai, branches in Sri Lanka,
Hong Kong and Belgium; and rep offices in the US, China, United Arab Emirates,
Bangladesh, South Africa, Indonesia, Thailand and Malaysia. The bank is
targeting the NRI (Non Resident Indian) population for expanding its business.
SOCIAL AND DEVELOPMENTAL INITIATIVES

Rural Thrust: ICICI Bank has identified rural as one of
the major areas of growth. It is creating holistic propositions to address this
opportunity. ICICI Bank has formulated a comprehensive strategy for rural,
micro-banking and agro business encompassing a range of products and multiple
delivery channels. The objective is to meet the needs of the rural economy while
building a sustainable business model. The range of products comprises six
primary credit products – micro finance loans, farmer financing, working capital
financing for agro-enterprises, farm equipment financing, commodity based
financing and jewel loans as well as savings investments and insurance products.
1. SUSTAINABLE DEVELOPMENT:
The bank operates and supports a diverse range of social
projects in the areas of primary education, healthcare, micro-finance,
environment, research & bio technology, finance & development. ICICI Bank’s
work in the area of development aims at facilitating wider participation by India’s
poorer communities in social and economic process. Its efforts are broadly
divided into two spheres – partnership based development initiatives and market-
based direct initiatives. For those initiatives that seek to make a broader impact on
society, ICICI Bank’s strategy has been to identify partners and work with them
to build competencies and effectiveness on the field. The Bank has taken a more
market-based direct approach for those initiatives that directly impact the
economic well-being of individuals.
2. FINANCIAL COUNSELING:
ICICI Bank setup the DISHA Trust in April 2007 as part
of ICICI Bank’s Corporate Social Responsibility activity. Its main objectives are
to provide free credit counseling, financial education and debt management
services to consumers and to increase awareness about financial products and
services, thus promoting better understanding and decision making. With centers
around the country, DISHA Financial Counseling provides its services FREE of
cost to all customers, even to those of other banks.
41
IMPORTANCE of CUSTOMER SERVICE IN ICICI

BANK
Bank is a commercial institution of outfit marketing financial products.
Service performances, production and consumption of services occur
simultaneously. Therefore, the frontline people and their interaction with
customers, thus everyday postures, gestures, actions, reactions, emotions,
activities and impressions contribute significantly in projecting a particular image
of the bank distinguishing it from the rest of the field.
Further customer service has a tremendous retention-value. If we
cannot retain a customer, all our efforts in terms of time and money in creating
and winning a customer would be a sheer waste. Besides, it is found that retaining
customer is often cheaper than finding a new customer. In addition to that
satisfied customers recommended the business to others. Thus a customer is
viewed as a long-term relationship rather than a party to a stray single transaction.
The initial transaction is taken as the starting point and opportunity to establish a
relationship through providing total customer satisfaction, which in turn will
ensure further business, from him. This is what we term as relationship banking.
Qualitative customer service and total satisfaction forms the edifice of
“Relationship Banking”.
CONCEPT OF CUSTOMER SATISFACTION

Satisfaction is a function of expectations about a product and its
perceived performance. When perceived performance of a product/service
matches or exceeds one’s expectations of service quality satisfaction occurs
satisfaction occurs and vice versa. The service quality attributes in a banking
context are of two types.
First the product per se attributes like interest charges, accuracy of entries and
reliability etc. Second, psychological attributes like recognition as important
customer, personal favors by the staff etc. As per product per se attributes, if a
bank fails to meet them, it causes dissatisfaction. But, if bank meets them, they
are treated as routine jobs that any bank would have performed. Thus absence of
such factors causes dissatisfaction while their presence would only avoid
dissatisfaction. They, by themselves, would not motivate a customer any further
than the present level. Therefore, these attributes are treated as ‘maintainers’. On
the other hand, if a bank fails to meet expectations in the area of personnel related
psychological factors, it may not result in dissatisfaction but their satisfaction will
result in high motivation and election on the part of the customer. Therefore these
attributes are treated as ‘motivators’.
Thus for a customer to be totally satisfied, first there should be satisfaction with
respect to product per se attributes then , in addition, he should get favorable
treatment by the staff and the service should be delivered with a human touch
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PRODUCTS AND SERVICES OF ICICI BANK
1. PERSONAL BANKING:
 DEPOSITS.
ICICI Bank offers wide variety of Deposit

Products to suit your requirements. Coupled with
convenience of networked branches/ ATMs and
facility of E-channels like Internet and Mobile
Banking, ICICI Bank brings banking at your doorstep.
SAVING ACCOUNTS
ICICI Bank offers you a power packed Savings Account with a host
of convenient features and banking channels to transact through. So now you can
bank at your convenience, without the stress of waiting in queues.
LIFE PLUS SENIOR CITIZEN SERVICE

We understand that as you reach the age to retire, you do have
certain concerns. Whether your hard earned money is safe and secure … whether
your investments give you the kind of returns that you need. That's why we have
an ideal Banking Service for those who are 60 years and above. The Senior
Citizen Services from ICICI Bank has several advantages that are tailored to bring
more convenience and enjoyment in your life.
YOUNG STARS
It's really important to help children learn the value of finances and money
management at an early age. Banking is a serious business, but we make banking
a pleasure and at the same time children learn how to manage their personal
finances.
FIXED DEPOSITS
Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable
features of the Fixed Deposit from ICICI Bank.
 LOAN AND ADVANCES

ICICI Bank offers wide variety of Loans Products to suit your requirements.
Coupled with convenience of networked branches/ ATMs and facility of E-
channels like Internet and Mobile Banking, ICICI Bank brings banking at
your doorstep. Select any of our loan product and provide your details online
and our representative will contact u.
43
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!
PERSONAL LOAN
If you're looking for a personal loan that's easy to get, your search ends here.
ICICI Bank Personal Loans are easy to get and absolutely hassle free. With
minimum documentation you can now secure a loan for an amount up to Rest. 15
lakhs
CAR LOAN
They are 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
ICICI Bank Demat Services boasts of an ever-growing

customer base of over 11.5 lacs account holders. In our continuous endeavor to
offer best of the class services to our customers we offer the following features:
SERVICES FOR DEMAT

1. e-Instructions: You can transfer securities 24 hours a day, 7 days a week
through Internet & Interactive Voice Response (IVR) at a lower cost. Now with
"Speak to transfer", you can also transfer or pledge instructions through our
customer care officer.
2. Consolidation Demat Account: Dematerialize your physical shares in

various holding patterns and consolidate all such scattered holdings into your
primary Demat account at reduced cost.
44
3. Digitally Signed Statement: Receive your account statement and bill by

email.
4. Corporate Benefit Tracking: Track your dividend, interest, bonus through

your account statement.
5. Mobile Request: Access your demat account by sending SMS to enquire

about Holdings, Transactions, Bill & ISIN details.
6. Mobile Alerts: Receive SMS alerts for all debits/credits as well as for any
request which cannot be processed. Dedicated customer care executives specially
trained at our call centre, to handle all your queries. Countrywide network of over
235 branches, you are never far from an ICICI Bank Demat Services outlet. You
will find service charges very competitive - offering the best value for your
money.
3. ATM SERVICES
ICICI Bank's 24 Hour ATM network is one of the largest and most
widespread ATM Network in India. Our ATMs are located in commercial areas,
residential localities, major petrol pumps, airports, near railway stations and other
places which are conveniently accessible to our customers. ICICI Bank ATMs
features user-friendly
Graphic screens with easy to follow instructions. We have introduced ATMs
which interact with customers in their local language for increased convenience.
Following are the features available on our ATMs, which can be accessed from
anywhere at any time.
SERVICE FOR ATMs:
1. Cash Withdrawal: Withdraw up to Rest. 25,000/- per

day from your account (50,000 for HNI's). Fast Cash option provides the facility
of withdrawing prefixed amounts. Ultra-Fast Cash option allows you to withdraw
Rs.3000/- in one shot.
2. Balance Enquiry: Know your ledger balance and available balance
3. Mini Statement: Get a printout of your last 8 transactions and your current
balance.
45
4. Deposit Cash / Cheques: Available at all full function ATMs, Customers can
deposit both cash and cheques. Cash deposited in ATMs will be credited to the
account on the same day (provided cash is deposited before the clearing) and
cheques are sent for clearing on the next working day.
5. Funds Transfer: Transfer funds from one account to another linked account in
the same branch.
6. PIN Change: Change the Personal Identification Number (PIN) of ATM or

Debit card.
7. Payments: The latest feature of our ATMs, this functionality can be used for
payment of bills, making donations to temples / trusts, buying internet packs,
airtime recharges for prepaid mobile phones and much more...
8. Others: Request for a checkbook from our ATMs and our concerned branch
will dispatch it such that it reaches you within 10 working days.
9. Charges: There is no charge levied on ICICI Bank customers for transacting on

ICICI Bank's ATMs. However for customers not maintaining the minimum
quarterly average balance in their savings account, first 6 transactions in the
quarter will be free and Rest. 25 per transaction will be charged thereafter.
4. CARDS
ICICI Bank offers a variety of cards to suit your different transactional needs. Our
range includes Credit Cards, Debit Cards and Prepaid cards. These cards offer you
convenience for your financial transactions like cash withdrawal, shopping and
travel. These cards are widely 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
A Mutual fund is an organization that invests in a diversified portfolio of financial
securities on behalf of a pool of subscribers to its schemes. These securities can
be in the form of equity, debt instruments, money market instruments etc., or a
mix of these securities, depending on the scheme objectives.
46
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 customer’s 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 child’s 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 investing
habits in you. We will help you plan your investments and build a healthy mutual
fund portfolio, which would be an optimal solution for your needs. Cultivating an
investment culture will not only help you but also your family.
The bank will keep customers updated
A newsletter, which will keep you, informed of the latest happenings in the stock
markets, economy and important events, apart from giving you the NAV and
other relevant information about your schemes will be sent you every month.
Latest NAV of the schemes can also be found out from our various branches.
The bank can be customers ‘One Stop Financial Solution’
Apart from subscribing to Mutual fund schemes through us, you can also take
advantage of our banking services and a whole range of financial products. Like -
ATM card, credit card, personal loan products, depository services, loan against
units/shares etc. and see your financial needs
satisfied under one roof.
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
47
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
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 Bank’s
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 Branch’s
Offices.
48
Commenting on this, the manager, said: “Since ICICI Bank launched

Online Services, ICICI Bank have developed them to become one of the most
state-of-the art and convenient services for their customers. Today, more than
350.000 customers use these services and carry out 1.5 million transactions every
year.”
 SERVICES IMPLEMENTED:
It currently provides a number of services. These include bill payment, renewing
and recharging mobile by using the credit card or from bank accounts, shopping
online, purchasing gold, investing in mutual fund or in share market etc.
 SERVICES IMPLEMENTED AUTOMATICALLY:

Some services are implemented automatically without customer involvement such
as paying bills when it is due through two payment alternatives – either total
payments to previously specified accounts, or monthly fixed payment from
registered date chosen by the customer’s credit card. These transactions can be
carried out very accurately online with the additional advantage of 10% extra
credit. Customers can apply for these services on www.icicibank.com.
Customers will receive an SMS to confirm all transactions to maintain

maximum convenience and ensure the highest standards of services. To avoid
interruption of services, customers will receive an SMS to inform them that they
do not have enough balance to cover required transactions so that they can use
another credit card or use other means of payment.
 SERVICES IMPLEMENTED ON DEMAND VIA MOBILE

PHONE:
(Mobile pay) service is implemented only when needed by using the mobile
phone. It allows customers to pay their bills or recharge their account using their
handset .Customers can simply apply for these services on www. Icicibank.com
online and choose any alternative.
ICICI banks services are extremely secure as they are protected by ‘3D secure’
system for online payments which is developed by ‘Visa’ and ‘MasterCard’ who
are the leaders in issuing cards. This ensures the best protection without any
additional cost credit.”
49
10 P’S OF MARKETING FOR ICICI BANK

MARKETING OF SERVICES BY ICICI BANK:
 PRODUCT MIX:
 Deposits:
ICICI Bank offers wide variety of Deposit Products to suit our requirements.
Coupled with convenience of networked branches/ over 1800 ATMs and facility
of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at
your doorstep.
o Savings Account: ICICI Bank offers a power packed Savings Account

with a host of convenient features and banking channels to transact
through.
o Senior Citizen Services: The Senior Citizen Services from ICICI Bank
has several advantages that are tailored to bring more convenience and
enjoyment in your life.
o Young Stars: It's really important to help children learn the value of
finances and money management at an early age. Banking is a serious
business, but we make banking a pleasure and at the same time children
learn how to manage their personal finances.
o Fixed Deposits: Safety, Flexibility, Liquidity and Returns!!!! A

combination of unbeatable features of the Fixed Deposit from ICICI Bank.
o Recurring Deposits: Through ICICI Bank Recurring Deposit you can

invest small amounts of money every month that ends up with a large
saving on maturity. So you enjoy twin advantages- affordability and
higher earnings.
Roaming Current Account: Only Roaming Current Account from ICICI Bank
travels the distance with your business. You can access your accounts at over 500
networked branches across the country.
 INVESTMENTS
Along with Deposit products and Loan offerings, ICICI Bank assists you to
manage your finances by providing various investment options such as:
o ICICI Bank Tax Saving Bonds.
50
o Government of India Bonds.

o Investment in Mutual Funds.
o Initial Public Offers by Corporate.
o Investment in "Pure Gold".
o Foreign Exchange Services.
o Senior Citizens Savings Scheme, 2004.
 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 includes more than 500 branches and
extension counters, over 1800 ATMs, Call Centre and Internet Banking.
Thus, one can access the various services ICICI Bank has to offer at
anytime, anywhere and from anyplace.
 LOAN:
o Home Loans.
o Personal Loans.
o Car Loans.
o Two Wheeler Loans.
o Commercial Vehicle Loans.
o Loans against Securities.
o Farm Equipment Loans.
o Construction Equipment Loans.
o Office Equipment Loans.
o Medical Equipment.
 Cards:
o Credit Card.
o Debit cum ATM Card.
o Travel Card.
DEMAT SERVICES:
ICICI Bank Demat Services boasts of an ever-growing customer base of over 7
lacs account holders. In their continuous endeavor to offer best of the class
services to our customers we offer the following features:
o Digitally signed transaction statement by e-mail.
o Corporate benefit tracking.
o e-Instruction facility - facility to transfer securities 24 hours a day,
7 days a week through Internet Interactive Voice Response (IVR)
at a lower cost.
51
o Dedicated specially trained customer care executives at their call

centre, to handle all queries.
MOBILE BANKING.
With ICICI Bank, banking is no longer what it used to be. ICICI
Bank offers Mobile Banking facility to all its Bank, Credit Card and Demat
customers. ICICI Bank Mobile Banking enables you to bank while being on the
move.
NRI SERVICES:
ONLINE MONEY TRANSFER facility available to NRIs worldwide through
www.money2India.com at the click of a button!
Benefits:
o FREE Money transfers into accounts with over 30 banks in India
o Demand Drafts issued and payable at over 1250 locations in India
o ONLINE Tracking of the status of your funds
o SUPERIOR Exchange rates
o OFFLINE MONEY TRANSFER facility is also available across
geographies through banks.
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-à-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 two- fold 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
52
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.
 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
Mind space
Orlem
Raheja township
Why they select this place as branch?

The selection of a suitable place for the establishment of a branch is Significant
with:
53
The view point of making place accessible.

The safety and security provisions a
Convenient to both the parties, such as the users and the bankers
Infrastructure facility
Near to station and located on s.v. road well crowded area.
Market coverage
 PROMOTION MIX:
 ADVERTISING: Television, radio, movies, theatres

 PRINT MEDIA: hoardings, newspaper, magazines
 PUBLICITY: road shows, campus visits, sandwich man, Sponsorship
 SALES PROMOTION: gifts, discount and commission, incentives,
etc.
 PERSONAL SELLING: Cross-sale (selling at competitors place),
personalized service.
 TELEMARKETING: ICICI one source Call center (mind space)
 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.
54
o STANDARDIZATION: ICICI bank has got standardized procedures

got typical transactions. In fact not only all the branches of a single-bank,
but all the banks have some standardization in them. This is because of
the rules they are subject to. Besides this, each of the banks has its
standard forms, documentations etc. Standardization saves a lot of time
behind individual transaction.
o CUSTOMIZATION: There are specialty counters at each branch to

deal with customers of a particular scheme. Besides this the customers
can select their deposit period among the available alternatives.
o NUMBER OF STEPS: numbers of steps are usually specified and a

specific pattern is followed to minimize time taken.
o SIMPLICITY: In ICICI banks various functions are segregated.

Separate counters exist with clear indication. Thus a customer wanting to
deposit money goes to ‘deposits’ counter and does not mingle elsewhere.
This makes procedures not only simple but consume less time. Besides
instruction boards in national boards in national and regional language
help the customers further.
o CUSTOMER INVOLVEMENT: ATM does not involve any bank

employees. Besides, during usual bank transactions, there is definite
customer involvement at some or the other place because of the money
matters and signature requires.
 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, employee’s dress code etc.
55
o SIGNAGE: Each And Every Bank has its logo by which a person can
identify the company. Thus such signage is significant for creating
visualization and corporate identity.
o FINANCIAL REPORTS: The Company’s financial reports are issued

to the customers to emphasis or credibility.
o TANGIBLES: Bank gives pens, writing pads to the internal customers.

Even the passbooks, cheque books, etc. reduce the inherent intangibility of
services.
o PUNCH LINES: Punch lines or the corporate statement depict the

philosophy and attitude of the bank. Banks have influential punch lines to
attract the customers.
o EMPLOYEE’S DRESS CODE: ICICI bank follows a dress code for

their internal customers. This helps the customers to feel the ease and
comfort.
 PEOPLE:
All people directly or indirectly involved in the consumption of banking services

are an important part of the extended marketing mix.
Knowledge Workers, Employees, Management and other Consumers often
add significant value to the total product or service offering. It is the employees of
a bank which represent the organization to its customers.
In a bank organization, employees are essentially the contact personnel with
customer. Therefore, an employee plays an important role in the marketing
operations of a service organization.
To realize its potential in bank marketing, ICICI become conscious in its
potential in internal marketing - the attraction, development, motivation and
retention of qualified employee-customers through need meeting job-products.
Internal marketing paves way for external marketing of services. In internal
marketing a variety of activities are used internally in an active, marketing like
manner and in a coordinated way.
The starting point in internal marketing is that the employees are the first
internal market for the organization.
56
The basic objective of internal marketing is to develop motivated and

customer conscious employees.
A service company can be only as good as its people. A service is a
performance and it is usually difficult to separate the performance from the
people.
If the people don’t meet customer’s expectations, then neither does the
service meet it. Therefore, investing in people quality in service business means
investing in product quality.
 POSITIONING:
POSITION process is 'positioning.' Positioning is undoubtedly one of the simplest

and most useful tools to marketers. After segmenting a market and then targeting
a consumer, icici bank would proceed to position a product within that market.
The term 'positioning' refers to the consumer's perception of a product or
service in relation to its competitors. You need to ask yourself, what is the
position of the product in the mind of the consumer?
SIX-STEP QUESTION FRAMEWORK FOR SUCCESSFUL

POSITIONING:
1. What position do you currently own?
2. What position do you want to own?
3. Whom you have to defeat to own the position you want.
4. Do you have the resources to do it?
5. Can you persist until you get there?
6. Are you tactics supporting the positioning objective you set?
 PERCEPTION:
As perception differs from person to person, so do the results of the
positioning map e.g. what you perceive as quality, value for money, etc., is
different to my perception. However, there will be similarities. Products or
services are 'mapped' together on a 'positioning map'. This allows them to be
compared and contrasted in relation to each other. This is the main strength of this
tool. Marketers decide upon a competitive position which enables them to
distinguish their own products from the offerings of their competition.
 PLANNING:
Marketing plans are vital to marketing success. They help to focus the mind of
companies and marketing teams on the process of marketing i.e. what is going to
57
be achieved and how we intend to do it. There are many approaches to marketing
plans. ICICI bank has focused upon the key stages of the plan. It is contained
under the popular acronym ASOT.
PLANNING
TRENDS
IN ICICI BANK
India's Largest Private Sector Bank, ICICI Bank, Enables Customers to
Wirelessly Manage their...
ICICI Bank, India's largest private sector bank, has contracted
with Air2Web India to use their Mobile Internet Platform to provide ICICI Bank
customers with wireless access to their banking and credit card accounts. "Our
new wireless applications are going to help customers better manage their
checking and credit card accounts by allowing them to receive and request
pertinent information anytime, anywhere via their digital cell phone," said Ms.
Chanda Kochhar, Executive Director of ICICI Bank. "With this wireless service,
our customers can keep track of their account balances, as well as request details
on how to pay credit card balances, confirm when they have been paid, and
receive banking and credit card statements. We feel this value added service will
improve our customer service offering."
"ICICI Bank has developed a wireless application which enables their
customers to get their banking and credit card account information when and
where they want it and from their most common wireless device, their digital cell
phone," said Sanjoy Malik, President and CEO of Air2Web India. "ICICI Bank
has always been known for its use of cutting edge technology. So, it is no surprise
that they are launching one of the first wireless banking products to not only
58
incorporate automated notifications of balances of both your credit card and bank
accounts, but one that also allows customers to pull timely account information.
This new wireless service gives ICICI Bank customers substantially more control
and flexibility over their accounts, thus enhancing their customers' experience and
another added value which sets ICICI Bank apart from its competitors."
Air2Web's Mobile Internet Platform 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 card is now available in
36 cities across India. The customer base is over 6.5 million.
ABOUT AIR2WEB INDIA
Air2Web India is a wholly owned subsidiary of Air2Web, which like

Air2Web's US operation, provides the same state-of-the-art application hosting
with day to day applications management and round-the-clock support, as well as
software licenses of the Air2Web Mobile Internet Platform. Air2Web India serves
its customers in the Asia Pacific region.
To date, Air2Web has more than 70 production deployments with blue-chip
customers providing wirelessly enabled financial applications, critical field force
applications, customer relationship management, M-commerce and subscription
based content services. Customers include companies such as Delta Employees
Credit Union, ABN AMRO, BellSouth, Digital Insight, eBay, Best Western
International, ADC Telecommunications, Lexmark International, UPS, Holiday
Inn, Intercontinental and Crowne Plaza hotels, the Weather Channel, CBS Sports
Line, and other leading finance, travel & hospitality, media & entertainment,
health care, retail, and transportation companies.
59
QUESTIONNAIRE
1. Can you briefly explain something about Bank Marketing?
 Marketing is an important concept today for managing business so that

each strategy is evolved with foreknowledge of impact of such decisions
on the customers. So even it is being required by bank to market their
products and services.
2. In the field of marketing where does your bank stand?
 Our bank position is in top 10 in marketing of services of bank. ICICI

Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly-owned subsidiary.
3. What types of product and services provided by your bank?
 We have lot of products and services in the form of different types of
Deposits, Loans And Advances, Demat Services, ATM Services,
Various Types Of Cards, Online Services, Mutual Funds and many
more….
4. What actions you have taken for marketing your various products
and services?
 ICICI bank realized that though it held a substantial share in the credit
card business, in the race for increasing numbers, it had not concentrated
on quality of customer service. This case let discusses the use of process
improvement, technology and promotional measures by ICICI to improve
customer service levels in the credit card segment.

5. In banking sector who are your competitors?
 ICICI banks major competition in private sector bank is with HDFC
BANK, with some public sector banks and even from some FOREIGN
BANKS.
6. What are your future strategies to attract your customers?

 Retaining customers is a critical key for banks to make the numbers work
this year and time is running out fast. This is in line with strategies being
followed by successful banks in developed markets. ICICI would be
reaching out to retail customers in many innovative ways and has recently
launched a housing portal indiahomeseek.com and a shopping mall
60
magiccart.com. The launch of the City Portals is such initiative under this
strategic focus.
7. Do you think that in marketing area your bank has to improve?

 Yes with the changing in demand and according to competition we have to
improve day by day.
8. What respond did you got from your newly trends services from
your customers?
 Yes customers were satisfied but they were not having sufficient
information so now we put our new services information on our websites.
9. Is the customer is satisfy with services provided by the bank?

 Yes the customers are almost satisfied we get complaints but we solve it
immediately.
10. What are social and development initiatives taken by icici bank?
 ICICI Bank has identified rural as one of the major areas of growth. It is
creating holistic propositions to address this opportunity. The objective is
to meet the needs of the rural economy while building a sustainable
business model. The range of products comprises six primary credit
products – microfinance loans, farmer financing, working capital
financing for agro-enterprises, farm equipment financing, commodity
based financing and jewel loans as well as savings investments and
insurance.
61
SUMMARY OF MAJOR FINDINGS

With the changes in business environment the concept of marketing also
changed in its area of focus. It shifted from production to product, then to selling
and ultimately to the customer. Originally banks were conservative in their
approach to marketing as they were sure of ‘walk-in’ business. But with the
growing competition they were forced to have a marketing orientation.
Marketing in bank consists of traditional external marketing, internal
marketing and interactive marketing. External marketing is the marketing mix of
4 Ps with which the marketer has to face the customer in fulfilling his marketing
objectives.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly-owned subsidiary. ICICI Bank (formerly
Industrial Credit and Investment Corporation of India) is India's largest private
sector bank in market capitalization and second largest overall in terms of assets
.ICICI bank has achieved spectacular progress in all departments such as capital,
deposits, advances, and in branch network. The bank has a product development
group under Personal and Service Banking Department. The product development
process in the Bank is based on a perfect theoretical framework.
The importance of advertising and publicity has been increasingly felt by the
Bank and as an evidence of which expenditure on it has gone up in absolute
terms.
Thus the above analysis reveals that the bank has tried its best to perfect its
marketing effort. It has adequate and suitable products.
62
CONCLUSION
The banking industry in India is facing the challenges on deposit mobilization

front, because of the severe competition from various financial institutions and
public corporations.
ICICI Bank today services a growing customer base of more than 5 million
customer accounts and 5 million bondholders’ accounts through a multi-channel
access network. This includes over 400 branches and extension counters, 1080
ATMs, call centres and Internet banking. Bank renders personalised services and
the present emphasis in marketing is customer satisfaction. The customer
satisfaction, which must be the ultimate goal of bank marketing, is achieved not
only through creating suitable products according to his need but also through
delivering them in a most satisfying manner.
This project has given me an insight how Bank should marketing their
products in the right way by overcoming all the difficulties like proper place,
advertising, staff etc. In spite of the changing banking environment and newer
challenges emerging, Bank Marketing by ICICI bank will continue to remain a
popular.
63
BIBLIOGRAPHY
The above whole information has been taken by referring books.
BOOKS REFERRED:-
 SERVICE MARKETING- BY P K
GUPTA
 BANK MARKETING- BY UMESH C
PATNAIL
 MARKETING IN BANKING AND
INSURANCE- BY ROMEO S.
MASCARENHAs
WEBLIOGRAPHY
o www.icicibank.com
o www.allbusiness.com
64

Marketing of Banking Services

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MARKETING OF BANKING SERVICES

INTRODUCTION OF BANKING IN INDIA

A bank is an institution, which deals in money and credit. Thus, bank is an

Bank is also defined as “one who in ordinary course of business

“Banking means accepting for the purpose of lending or investment, of

Customers Relationship Management, on the other hand, is an

DIFFERENT TYPES OF BANK

In the most simple and not-technical language marketing may be defined

Business aims at profit:

2. To make the sale, a customer has to be created.

3. To retain the customer, he has to be satisfied.

4. To satisfy the customer, his needs have to be me.

The analysis exactly fits in to Drucker’s comment on the purpose

(1)According to William Stanton, “marketing is a total system of business

(2)According to Philips kotler, “marketing is a human activity directed at

(1) Regular and continuous activity: marketing is a continuous activity

(2) Satisfaction of human wants: marketing activities are basically for

(3) Relates to goods and services: marketing is concerned with the

(4) Transfer of ownership: marketing of goods brings transfer of

(5) Importance of 4ps: marketing is the sum total of product, price,

According to “American Marketing Association”, “Services are the activities,

Services as defined in the clause (v) of section 2 of the ‘MRTP Act’

A service cannot be touched.

First, they may be people-based or equipment-based.

People-based services are rendered by either professional’s viz. doctors,

Finally, a classification can be made on the basis of the nature of services

EVOLUTION OF MARKETING CONCEPT

Societal Marketing Concept

The Importance of Marketing in the Service-Sector:

Information base effectively to communicate product availability.

(advertising) efforts. Focusing on region-specific campaigns rather than national

We define bank marketing as “Bank marketing is the aggregate of

CONCEPT OF BANK MARKETING

The concept of bank marketing encompasses:

Identifying the most profitable markets now and in future;

Setting business development goals and making plans to meet them;

From the above discussion of the bank marketing it can be understood

as well as all the supporting service personnel to work as a team to provide

Traditional Marketing- the Marketing Mix

THE CONCEPT OF MIX:

As ‘Theodore Levitt’ has suggested there are four different levels of

The Product Life Cycle

PRODUCT LIFE CYCLE CURVE:

BOSTON CONSULTANCY GROUP

Stars are products making an important contribution to the business in a growing

were operating in an administered structure where the rates of interest on deposits

1. Develop marketing strategy - perform marketing analysis, segmentation,

METHODS OF PRICING (PRICING TRIPOD)

1. COST BASED PRICING:

2. DEMAND BASED PRICING

3. COMPETITION BASED PRICING

In case of goods the distribution may be direct, or indirect through agents,

In the banking context distribution refers to the establishment and functioning of a

In banking context promotion is a challenging job. Banks sell benefits. The

THE PROMOTION MIX

Knowledge of all existing services or at least the knowledge of the person to

Push & Pull Strategies

PROMOTIONAL MEASURES BY INDIAN BANKS:

The Indian banking sector seems to have displayed a half-hearted

(1) Obligatory advertisements: branch opening and shifting, customers meet;

The concept of internal marketing as propounded by Prof. ‘Leonard L. Berry’ of

INTERACTIVE MARKETING (MOMENT OFTRUTH)

Process: (System and Procedures)