A

Project Report
on
“SERVICE QUALITY
AND

CUSTOMER SATISFACTION”

In

Submitted in partial fulfilment for the degree of

Bachelors of Business Administration (2016- 2019) affiliated to

Jammu University.

Submitted to Submitted by
Mr. AJAY VIRDI Akshita Abrol
Faculty of Management BBA Semester VI
Univ.Roll no.606150003
 DECLARATION

I hereby declare that the summer training project report

“SERVICE QUALITY AND CUSTOMER SATISFACTION” submitted
under the guidance of Mr Ajay Virdi is my original work.

The preparation of project report is based on my personal

findings, interactions with the employees and consultation with
eminent scholars and secondary sources.

This information has been collected from genuine and authentic

sources. The Work has been submitted in partial fulfilment of
BACHELORS IN BUSSINESS ADMINISTRATION (BBA) of
GOVERNMENT DEGREE COLLEGE (BOYS)UDHAMPUR.

AKSHITA ABROL
Government Degree College (Boys), Udhampur

CERTIFICATE
This is to certify that Akshita Abrol D/o Jugal Kishore Abrol,
student of BBA Semester 6th, Roll no 606150003, has completed
her project report on the topic service quality and customer
satisfaction year 2018-2019 in the partial fulfilment of
requirement for awarding the degree and customer satisfaction
under my guidance and supervision during the academic of
Bachelors of Business Administration by the of University of
Jammu.

To the best of my knowledge the work done by the student is

Original and will be of aluable sources for the scholars and
organisation to carry advance research work.

Signature
Mr. Ajay Virdi
 CERTIFICATE

This is to certify that Akshita Abrol D/o Jugal Kishore Abrol

student of BBA Semester VI Roll No 606150003 is a bone fide
student of this institute. She has completed the project report on
the topic “SERVICE QUALITY AND CUSTOMER SATISFACTION”
in UTI under the supervision of Ajay Virdi for the partial fulfilment
of requirement for awarding the degree of Bachelors of Business
Administration (2016-2019) affiliated to Jammu University

HOD

Ajay Virdi

Principal

Dr. Nutan K. Resutra

 ACKNOWLEDGEMENT
The success and final outcome of this project require a lot of
guidance and assistance from many people and i am extremely
fortunate to have got this all along the completion of my project
work . Whatever I have done is only due to such guidance and
assistance and I would not forgetto thank them.

I respect and thank Mr. Ankit Sharma, for giving me an

opportunity to do the project work in UTI and providing us all
support and guidance which made me complete the project on
time. I am extremely grateful to him for providing such a nice
support and guidance though he had busy schedule managing the
company affairs.

I owe my profound gratitude to our project guide Mr.Ajay virdi,

who took keen interest on our project work and guided us all
along , till the competition of our project work and guided us all
along ,till the completion of our project work by roviding all the
necessary information about service quality and customer
satisfaction in this Organisation.

I would like to thank our H.O.D Prof. Ajay Virdi and Principal Dr.
Nutan k. Resutra for always encouraging and supporting us. I am
thankful to and fortunate enough to get constant encouragement
,support and guidance from all the Teaching staff of partment of
B.B.A who helped us in successfully Completing our project work.
 TABLE OF CONTENTS
Contents
Chapter1:Service quality and Customer satisfaction

 Introduction
 Dimensions of service quality
 Importance of customer satisfaction

Chapter2: Industry Review And Company profile

 Industry review
 Company profile

Chapter3: Research design and methodology

 Objectives of study
 Methodology

Chapter4: Data analysis and interpretation

 Data analysis and interpretation

Chapter5: Summary of findings

 Findings
 Suggestions
 Limitations
 Suggestions

Annexure:

 Bibliography
 Questionnaire
 CHAPTER 1

SERVICE QUALITY

AND

CUSTOMER SATISFACTION
 SERVICE QUALITY
Service quality (SQ) is a comparison of expectations (E) with
performance (P) SQ=P-E. A business with high service quality will
meet customer needs while remaining economically competitive.
Improved service quality may increase economic competitiveness.
The aim may be achieved by understanding and improving
operational processes,Identifying problems quickly and
systematically establishing valid and reliable service performance
measures and measuring customer satisfaction and other
performance outcomes
From the viewpoint of business administration ,service quality is
an achievement in customer service . It reflects at each service
encounter. Customer from service expectation from past
experience, word of mouth and advertisement. In general
Customer compare perceived service with expected service in
which if the Former falls short of the latter the customer are
disappointed.

For example, in the case of TAJ Hotels, Resorts and Palaces,

wherein TAJ remaining the old world luxury brand in the 5 star
category, the umbrella branding was Diluting the image of the TAJ
brand because although the different hotels such as vivanta by taj
the 4 star category, Gateway in the 3 star category and Ginger the
2 star economy rand, were positioned and categorised differently,
customer still expect the high quality of Taj from all their
properties.

The measurement of subjective aspects of customer service

depends on the conformity of the expected benefit with the
perceived result. This in turns depend upon the customer’s
expectation in terms of service, they might receive and the service
provider’s ability and talent to present this expected service.
Successful Companies add benefits to their offering that not only
satisfy the customer but Also surprise and delight them.
 DIMENSIONS OF SERVICE QUALITY
A customer’s expectation of a particular service is determined by
factors such as Recommendations, personal needs and past
experiences. The expected service And the perceived service
sometimes may not be equal, thus leaving a gap. The Service
quality model or the ‘GAP model’ developed by a group of
authors- Kevin Kristine and Berry at Texas and North Carolina in
1985, highlights the main requirement for delivering high service
quality. It identifies five ‘ gaps that cause unsuccessful delivery.
Customers generally have a tendency to compare the services they
‘experience’ with the service they ‘expect’. If the experience does
not match the expectation, there arises a gap. Ten determinants
that may influence the appearance of a gap were described by
Parasuraman, zeithmal and Barry. In the SERVQUAL model:
reliability, responsiveness, competence, access, courtesy,
communication, credibility, security, understanding the customer
and tangibles.

Later, the determinants were reduced to five tangibles; reliability;

responsiveness; service assurance and empathy in the so-called
RATER model.

The five SERVQUAL dimension are:

TANGIBLES- Appearance of physical facilities, equipment,

personnel, and communication materials.

RELIABILITY- Ability to perform the promised service

dependably and accurately.

RESPONSIVENESS- Willingness to help customer and provide

them service.

ASSURANCE- Knowledge and courtesy of employees and their

ability to convey trust and confidence.

EMPATHY- Caring, individualized attention to the firm provided

to its customer
Measuring service quality

Measuring service quality may involve both subjective and

objective processes. In both cases, it is often some aspect of
customer satisfaction is an indirect measure of service quality.

Measuring subjective elements of service quality

Subjective processes can be assessed in characteristics (assessed

be the SERVQUAL method); in incidents (assessed in critical
theory) and in problems (assessed by Frequenz Relevanz
analysis). The most important and most used methods with which
to measure subjective elements of service quality is the servqual
method.

Measuring objective elements of service quality

Objective processes may be subdivided into primary processes

and secondary processes. During primary processes, silent
customers create test episodes of service or the service episode of
normal customers are observed. In secondary processes,
quantifiable factors such as number of customer complaints or
number of returned goods are analyzed in order to make
inferences about service quality.

Service quality and customer satisfaction

The relationship between service quality and customer

satisfaction has received considerable attention in academic
literature. The results of most research studies have indicated that
the service quality and customer satisfaction are indeed
independent but are closely related that and a rise in one is likely
in an increase in another construct.
 CUSTOMER SATISFACTION
Customer satisfaction is a term frequently used in marketing.
While it’s often abbreviated as CSAT, it is more correct to
abbreviate as C sat. It is a measure of how products and services
supplied by a company meet or surpass customer expectations.
Customer satisfaction is defined as “the number of customer, or
percentage of total customers, whose reported experience with a
firm, its product, or its services(ratings) exceeds specified
satisfaction goals. In a survey of nearly 200 senior marketing
managers, 71% responded that they found a customer satisfaction
metric very useful in managing and monitoring their business.

It is seen as a key performance indicator within businsess and its

often part of a balanced scoreboard. In a competitive marketplace
where business compete for customers, customer satisfaction is
seen as a key differentiator and increasingly has become a key
element of business strategy.

“Within organization, customer satisfaction ratings can have

powerful effects. They focus employees on the importance of
fulfilling customer’s expectations. Furthermore,when these
ratings dip, they warn of problems that can affect sales and
profitability. These metrics quantify an important dynamic. When
a brand has loyal customers, it gains positive word of mouth
marketing, which is both free and highly effective.

Therefore it is essential for business to effectively manage

customer satisfaction. To be able to do this, firms need reliable
and representative measure of satisfaction.

“In researching satisfaction, firms generally ask customer whether

their product or service has met or exceeded expectations. Thus,
expectation are a key factor behind satisfaction. When customer
have high expectation and the reality falls short, they will be
disappointed and will likely rate their experience as less than
satisfying. For this reason, a luxury resort, for example might
receive a lower satisfaction rating than a budget – even though its
facilities and service would be deemed superior in ‘absolute ‘
terms.
IMPORTANCE OF CUSTOMER SATISFACTION
1 It’s a leading indicator of consumer repurchase intension and
loyalty.

2 It’s a point of differentiation.

3 It reduces customer churn.

4 It increases customer lifetime value.

5 It reduces negative word of mouth.

6 It’s cheaper to retain customers than acquire new ones.

 CHAPTER-3

RESEARCH DESIGN

AND

METHODOLOGY
 OBJECTIVES OF THE STUDY
1.To determine the perceptions of customers regarding the
service quality in mutual funds companies.

2. To find the level of customer satisfaction of various mutual

funds offered by UTI

3. To study the various factors that influences the customer

to choose mutual funds.

RESEARCH METHODOLOGY:-
Research methodology is a way to systematically solve the
research problem. Research methodology constitutes of research
methods, selection criterion of research methods, used in context
of research study and explanation of using of a particular method
or technique so that research results are capable of being
evaluated either by researcher himself or by others. Why the
research study has been undertaken, how the research problem
has been formulated, why data has been collected and what
particular technique of analyzing data has been used and a best of
similar other questions are usually answered when we talk of
research methodology concerning a research or study. The main
aim of research is to find out the truth which is hidden and which
has not been discovered as yet.

My research is primarily both exploratory as well as descriptive

in nature. The sources of information are both primary and
secondary. A well structured questionnaire was prepared, to
collect the consumer’s perception. Survey is done on the basis of a
set of questionnaire having some close ended and open ended
questions.
Data collection through questionnaire resulted in availability of
the desired information but these were useless until they were
analyzed. Various steps required for this purpose were editing ,
coding and tabulating. Tabulating refers to bringing together
similar data and compiling them in accurate and meaningful
manner. The data collection by questionnaire was analyzed and
interpreted with the help of table, bar chart and pie chart.

DATA COLLECTION:-
Primary as well as secondary data was used in the study. Various
sources were used in the collection of data.

PRIMARY DATA SOURCES:

 Interaction with policy holders of jammu area.

 Through questionnaires filled from the various respondents

SECONDARY DATA SOURCES:

 Through internet, various official sites of the companies.

 Through pamphlets and brochures of the companies.
 Journals and Magazines
 SAMPLING METHODOLOGY:-

SAMPLING TECHNIQUE:

A sample design is a definite plan for obtaining a sample

from a given population. It refers to the techniques or the
procedures the researcher would adopt in selecting items
for the sample. Sample design may as well be drawn from
the population to be included in the sample i.e. the size of
the sample. Sample design is determined before data is
collected.

SAMPLING UNIT:
The respondents who were asked to fill out the questionnaire
are the sampling units.

These compromise people of jammu.

SAMPLE SIZE:
The sample size was restricted to 80 only.

SAMPLE AREA:
The area of the research was Jammu region only.
Tools used for analysis
1. To know the response, I have used the questionnaire
method.

In this method questionnaire were distributed to the

respondents and they were asked to answer the questions in the
questionnaire. The questionnaire were structured non disguised
because the question which the questionnaire contained, were
arranged in a specific order besides every question asked were
logical for the study, no question can be termed as irrelevant. The
questionnaire was non disguised because the questionnaire was
constructed so that the objective is clear to the respondent. The
respondents were aware of the objective. They know why they
were asked to fill the questionnaire.

2. Secondly, I used the method of simple percentage analysis.

 CHAPTER – 4

DATA ANALYSIS

AND

INTERPRETATION
Table No:1 PREFRENCE OF RESPONDENTS
IN SELECTING MUTUAL FUNDS:-

Dimension of service NO.OF PERCENTAGE

quality RESPONDENTS
Reliability 32 40
Courtesy 7 8.75
Responsiveness 17 21.25
Security 24 30
Total 80 100

INFERENCE:
From the above table it is inferred that 40% of the policy holders
feel that UTI is the most reliable and 30% feel secured while
selecting UTI. 8.75% of the policy holder invest in UTI because of
its courtesy and 21.25% of the policy holder invest in UTI because
of its responsiveness.

Chart showing preference of respondents in selecting

mutual funds:

120

100

80

60
No. of Respondents
40
Percentage
20

0
Table No 2: NUMBER OF RESPONDENTS WHO HAVE TAKEN
MUTUAL FUNDS AS PER AGE:

Age Group No of Percentage

Respondents
21-30 16 20
31-40 21 26.25
41-50 36 45
51-60 7 8.75
Total 80 100

Inference:
From the above table it is inferred that 45% of the respondents
who have taken UTI belong to group 41-40 and 26.25% of the
respondents fall in the age group 31-40 which shows elder
people give preference to UTI funds. 20% of the respondents are
in the age group of 21-30 and only 8.75% of the respondents are
in the age group of 51-60, it shows that the interest in investing
mutual funds is less for the youngsters.

Chart showing no. of respondents who have taken mutual

funds as per age:

120

100

80

60 no of respondents
percentage
40

20

0
21-30 31-40 41-50 51-60 Total
Table No 3: NUMBER OF RESPONDENTS WHO HAVE TAKEN
MUTUAL FUNDS AS PER GENDER

Gender No. of Percentage

respondents
Male 48 60
Female 32 40
Total 80 100

Inference:

From the above table it is inferred that 60% of the respondents

are Male and 40% of the respondents are Female, which shows
male are interested to invest in life insurance more than female.

Chart showing no. of respondents who have taken mutual

funds as per gender:

120

100

80

60 NO OF RESPONDANTS
PERCENTAGE
40

20

0
MALE FEMALE TOTAL
Table No 4: NUMBER OF RESPONDENTS WHO HAVE TAKEN
MUTUAL FUNDS AS PER EDUCATIONAL QUALIFICATION

Educational No. of respondents Percentage

qualification
School level 8 10
Graduate 40 50
Post graduate 20 25
Professional 12 15
Total 80 100

Inference:

From the above table it is inferred that 50% of the respondents

are graduates which shows that graduates are more interested in
investing in mutual funds. 25% of the people falls in post graduate
group and 15% of the respondents are in professional group
which shows their less interest in mutual funds. 10% of the people
belong to school level, which shows their less interest.

Chart showing no. of respondents who have taken mutual

funds as per educational qualification

120

100

80

No of respondents
60
Percentage
40

20

0
School level Graduate Post Professional total
graduate
Table No 5: NUMBER OF RESPONDENTS WHO HAVE TAKEN
MUTUAL FUNDS AS PER MARITAL STATUS

Marital status No. of Percentage

respondents
Married 57 71.25
Unmarried 23 28.75
Total 80 100

Inference:

From the table it is inferred that 71.25% of the respondents are

married which shows married people give importance to mutual
funds, while the unmarried people are 28.75%.

Chart showing no of respondents who have taken mutual

funds as per marital status:

120

100

80

60 No of respondents
Percentage
40

20

0
Married Unmarried Total
Table No 6: NUMBER OF RESPONDENTS WHO HAVE TAKEN
MUTUAL FUNDS AS PER OCCUPATION

Occupation No. of respondents Percentage

Business 10 12.5
Profession 16 20
Private 12 15
Govt Service 33 41.25
House wife 9 11.25
Total 80 100
Inference:

From the above table it is inferred that 41.25% of the respondents

occupation is govt. service which shows that they are more
interested in taking mutual funds . 15% of the respondents are
private job holders and 20% of the respondents are profession
group which shows their interest for investing is less than govt
service respondents . While 12.5% of the respondents belong to
business group and 11.25% of the respondents belong to house
wife which shows their interest is less.

Chart showing no of respondents who have taken mutual

funds as per occupation

120

100

80

60 No of respondents
Percentage
40

20

0
Business Profession Private Govt House Total
service wfe
Table No 7: NUMBER OF RESPONDENTS WHO HAVE TAKEN
MUTUAL FUNDS AS PER INCOME

Income No of respondents Percentage

10000-20000 4 5
20000-30000 13 16.25
30000-40000 39 48.75
Above 40000 24 30
Total 80 100

Inference:

From the above table it is inferred that 48.75% of the respondents

belong to 30000-40000 income group which shows more interest
in investing mutual funds. 30% of the people fall in above 40000
group and 16.25% of the people falls in 20000-30000 groups
which shows they give moderate preference in mutual funds. 5%
of the respondents are in group of 10000-20000 which shows
they give less preference for mutual funds due to their less
income.

Chart showing no of respondents who have taken mutual

funds as per income:

120

100

80

60
No of respondents
40
Percentage

20

0
Table No8: SAVINGS PER MONTH MADE BY RESPONDENTS

Savings No of respondents Percentage

0-10% 38 47.5%
10-20% 18 22.5%
20-30% 13 16.25%
30-40% 11 13.75%
Total 80 100

Inference:

From the table it is inferred that 47.5% of the respondents have

savings of 0-10% and 22.5% of the respondents have 10-20% per
month which shows their interest for savings is less. 16.25% of
the respondents savings is 20-30% per month and 13.75% of the
people have 30-40% of savings, which shows they give more
importance for savings.

Chart showing savings per month made by respondents.

120

100

80

60 No of respondents
Percentage
40

20

0
0-10% 10-20% 20-30% 30-40% Total
TABLE NO 9: NUMBER OF RESPONDENTS WHO FEEL
MUTUAL FUNDS ARE NECESSARY

Choice No of respondents Percentage

Yes 75 93.75%
No 5 6.25%
Total 80 100

Inference:

From the above table it is inferred that 93.75% of the respondents

feel mutual funds are necessary, while 6.25% of the respondents
feel mutual funds are not important. This shows that more people
are interested to invest in mutual funds.

Chart showing number of respondents who feel mutual

funds are secure:

120

100

80

60 No of respondents
Percentage
40

20

0
Yes No total
TABLE NO 10: INFORMATION SOURCE WHICH CREATE
AWARENESS ABOUT LIFE INSURANCE

Source No of respondents Percentage

Friends 23 28.75
Media 17 21.25
Agents 29 36.25
Others 11 13.75
Total 80 100

Inference:

From the above table it is inferred that 36.25% of the respondents

came to know about mutual funds through agents. 28.75% of the
respondents learned about mutual funds through friends and
21.25% of the people through media. This shows that agents play
a key role in mutual funds.

Chart showing information source which create awareness

about mutual funds:

120

100

80

60 No of respondents
Percentage
40

20

0
Friends Media Agents Others Total
TABLE NO 11: THE INVESTMENT OBJECTIVE S IN MUTUAL
FUNDS

Investment No of respondents Percentage

objectives
Returns 25 31.25
Income growth 15 18.75
Tax planning 40 50
Total 80 100

Inference:

From the table it is inferred that 50% of the people invest in

mutual funds for tax planning which shows that people opt for
mutual funds for tax benefits. 31.25% of the people invest in
mutual funds for returns and 18.75% of the respondents invest
for income growth.

Chart showing the investment objectives if respondents in

mutual funds.

120

100

80

60 no of respondents
percentage
40

20

0
Returns Income growth Tax planning Total
TABLE NO12: REASONS FOR SELECTING PARTICULAR
MUTUAL FUND

Reasons No of respondents Percentage

Its features 21 26.25
Recomended by 29 36.25
agents
High risk coverage 13 16.25
Low premium 17 21.25
Total 80 100

Inference:

From the above table it is inferred that 36.25% of the respondents

have invested in mutual funds because it was recommended by
agents . 26.25% of the people select because of its features, which
shows features of a particular policy influence more. 21.25% of
the people select because of its low premium. 16.25% of the
people have said high risk coverage influenced them more.

Chart showing respondents reason for selecting a policy:

40

35

30

25
No of respondents
20
Percentage
15

10

0
Its features Recomended High risk Low premium
by agents coverage
TABLE NO13: REASONS FOR INVESTING IN MUTUAL
FUNDS.

Reasons No of respondents Percentage

Insurance against 21 26.25
uncertainty
Agents persistence 6 7.5
For returns 13 16.25
For tax benefits 40 50
Total 80 100

Inference:

From the above table it is infeered that 50% of the respondents

invest in mutual funds because of its tax benefits and 26.25% of
the respondents invest in mutual funds because of
uncertainity.16.25% of them invest in mutual funds because of
returns and 7.5% because of agent persistence.

Chart showing the reason for investing in mutual funds:

60

50

40

30 No of respondents
Percentage
20

10

0
Insurance Agents For returns For tax benefits
against persistence
uncertainty
TABLE NO14: HOW PEOPLE FEEL ABOUT THE
COMMUNICATION FLOW FROM THE COMPANY

Choice No of respondents Percentage

Regular 39 48.75
Occasional 28 35
Rare 13 16.25
Total 80 100

Inference:

From the above table it is inferred that 48.75% of the respondents

have said that the communication from the company is regular.
35% of the respondents have said that the communication is
occasional. 16.25% of the respondents have said that the
communication flow from the company is rare.

Chart showing how investors feel about the communication flow

from the company:

120

100

80

60 NO of respondents
Percentage
40

20

0
Regular Ocassional Rare Total
TABLE NO15: THE REVOKING PROCEDURE IF THE SCHEME
LAPSES

Choice No of respondents Percentage

Easy 49 61.25
Average 24 30
Difficult 7 8.75
Total 80 100

Inference:

From the above table it is inferred that 61.25% of the respondents

said that revoking procedure is easy. 30% have said that the
revoking procedure is average which shows company is friendly.
8.75% of the respondents have said procedure is difficult.

Chart showing respondents view about revoking procedure

if scheme lapses
120

100

80

No of respondents
60
Percentage

40

20

0
Easy Average Difficult Total
CHAPTER 5

SUMMARY OF

FINDINGS
FINDINGS:
1. Majority of the respondents are in the age group 30-50 which
shows middle aged people show more interest in mutual funds
investments than youngsters.

2. most of the respondents are male which shows male are more
interested in mutual funds as compared to female respondents.

3. Graduates are more interested in mutual funds.

4. 71.25% of the respondents are married, which shows married

people are more interested in mutual funds.

5. 41.25% of the people are government service, which shows t

that salaried people are more interested in mutual funds.

6. The income level of a person does not affect the savings per
month.

7. 47.5% of the people have said they have savings of 0-10% per
month in income group.

8. Agents play a key role in mutual funds policies.

9. Most of the people have taken policy in UTI mutual funds as it

was recommended by agents.

10. People have said that they are highly satisfied with the mutual
funds regarding the premium amount and satisfied with the
customer service provided by the company.

11. The company’s communication with the customer is good.

SUGGESTIONS:

The following suggestions recommended based on research work

done.

1. School level educated people are investing less in mutual funds ,

hence the company can concentrate more on this group to invest
in funds.

2. Business and profession people are investing less in mutual

funds , hence efforts need to be taken by the company to make
them invest in mutual funds.

3. Bringing out advertisement in newspaper , TV and pamphlets

can help the company to place its products in the mind of the
consumer in a better way.

4. As the people have said that they mainly invest in mutual funds
for planning their annual tax, the company should concentrate
during month of January and march.

5. As the respondents have rated brand name as an important

factor for investing in mutual funds, the company should try to
create a good image .

6. Advertisements should be brought out more during the time of

tax payable pamphlets can be issued near the palces where public
movements are more.
LIMITATIONS OF THE STUDY:

There are certain limitations, which are common to all research

studies in social sciences. The limitations of the study are given
below:

1. The respondents of the study have been selected only from the
area of Udhampur due to time and cost consideration.

2. The study has been undertaken at a particular point of time

when the respondents had set of beliefs, preference and attitudes,
which are not static variables.

3. The number of respondents were restricted due to 80 due to

time factors.

CONCLUSION

From the study it is concluded that most of the employees invest

in the month of January to march and the main reason for their
investments in mutual funds for the purpose of tax palnning .Most
of the policy holders select the particular funds because it was
recommended by agents. Most of the policy holders feel that
mutual funds in necessary and they feel secure . On the whole the
service quality of UTI is good as 40% of the policy holders feel that
UTI is highly reliable and policy holders are satisfied with
services.
BIBLIOGRAPHY

Akbar M.M. & Parvez. N.(2009), Impact of service quality, trust

and customer

Shashi K.Gupta and Praneet Rangi, Research Methodology (2011)

Parmpal Singh and Ramneek Kaur, Marketing of service(2013)

WEBSITES

www.utiindia.com

wikipedia
QUESTIONNAIRE
A study of service quality and customer satisfaction of UTI in
jammu region

Name............................................

Place............................................

Occupation:-...........................

Age: 21-30 31-40

41-50 51-60

Gender: Male Female

Monthly income :

10000-20000 20000-30000

30000-40000 greater than 40000

Q1. When UTI promises to do something by a certain time it

does so?

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q2. When you have problems UTI is sympathetic and

reassuring?

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q3. UTI is dependable.

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q4. UTI provides its service at the time it promises to do so.

a. Strongly agree b. Agree c. Neither agree nor disagree

 d. Disagree e. Strongly disagree

Q5. You feel safe in your transaction with UTI?

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q6. Employees of UTI are polite.

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q7. UTI gives you personal attention.

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q8. Do you feel insuring life is necessary?

a. Strongly agree b. Agree c. Neither agree nor disagree

d. Disagree e. Strongly disagree

Q9. Which information source create awareness about mutal

funds?

a. Friends b.Media c. Agents d. Others

Q10. Which is the important investment objective in mutual

funds?

a.Returns b. Income growth. c. Tax planning

Q11. What is the main reason for selecting particular policy?

a. Its features b. Recommended by agents

c. High risk coverage d. Low premium

Q12. What do you feel about the communication flow from the
company?

a. Regular b. Occasional c. Rare

Q13. How company responds to your problems?

 a. Immediate b.Delayed c. No response

Q14. Which factor is considered important for mutual funds?

a. Settlement b. Customer service c. Brand name

d. Experience in the field.

Q15. What is the revoking procedure if policy lapses?

a. Easy b. Average c. Difficult

 CHAPTER 2

INDUSTRY REVIEW

AND

ORGANISATIONAL PROFILE
INDUSTRY REVIEW:

A mutual fund is a professionally managed investment fund that

pools money from many investors to purchase securities. These
investors may be retail or institutional in nature.

Mutual funds have advantages and disadvantages compared to

direct investing in individual securities. The primary advantages
of mutual funds are that they provide economies of scale, a higher
level of diversification, they provide liquidity, and they are
managed by professional investors. On the negative side, investors
in a mutual fund must pay various fees and expenses

A mutual fund is a trust that pools the savings of a number of

investors who share a common fiancial goal. The money thus
collected is then invested in capital market instruments such as
shares, debentures and other securities. [The combined holdings
of shares, debentures and securities and assets the fund owns are
known as its portfolio Thus, the fund is owned jointly by all of the
unit-holders. The income earned through these investments and
the capital appreciation realised are shared by them in proportion
to the number of units owned by them. The word 'mutual' in a
'mutual fund' signifies that such benefits accrue pro rata to all the
investors in proportion to their investment; they share mutually
the benefits arising there from. Thus a mutual fund is the most
suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost.
PRINCIPLES OF MUTUAL FUNDS:-

Convenience

Principles
Professional
Management of Mutual Diversification
Funds

Liquidity
PRINCIPLES OF MUTUAL FUNDS:-

There are four principles of mutual fund investing which are

(1) Broad diversification

(2) Professional management

(3) Liquidity (4) Convenience.

DIVERSIFACTION:-

Diversification is essential to eliminate risk. It reduces and can

even eliminate the specific risk that comes with the ownership of
just a few individual shares and securities. Mutual funds provide
two types of diversification: diversification within a portfolio and
diversification among portfolios.

PROFESSIONAL MANAGEMENT:-

The second principle of mutual fund investing is professional

management. Managing an investment portfolio means selecting
and supervising the funds in accordance with the fund's
investment objectives and policies. The fund managers have the
obligation to add value over and above the returns generally
received from the markets.

LIQUIDITY:-

The third principle of mutual fund investing is liquidity. The

mutual fund units may be purchased or sold at a moment's notice
at the fund's net asset value without incurring any cost or loss.

CONVENIENCE:-

The fourth basic principle provides for simplicity and convenience

for the mutual fund transactions. A major reason for the
remarkable growth in the mutual fund industry has been the
diverse classes of financial assets to which its principles have been
successfully applied.
TYPES OF MUTUAL FUNDS:-

A mutual fund is a professionally managed investment fund that

pools money from many investors to purchase securities. These
investors may be retail or institutional in nature.

Money
market
funds Fixed
Funds
of funds income
funds

TYPES OF
MUTUAL
Speciality FUNDS Equity
funds funds

Index Balanced
fumds funds
1. MONEY MARKET FUNDS

These funds invest in short-term fixed income securities such as

government bonds, treasury bills, bankers’ acceptances,
commercial paper and certificates of deposit. They are generally a
safer investment, but with a lower potential return then other
types of mutual funds. Canadian money market funds try to keep
their net asset value (NAV) stable at $10 per security.

2. FIXED INCOME FUNDS

These funds buy investments that pay a fixed rate of return like
government bonds, investment-grade corporate bonds and high-
yield corporate bonds. They aim to have money coming into the
fund on a regular basis, mostly through interest that the fund
earns. High-yield corporate bond funds are generally riskier than
funds that hold government and investment-grade bonds.

3. EQUITY FUNDS

These funds invest in stocks. These funds aim to grow faster than
money market or fixed income funds, so there is usually a higher
risk that you could lose money. You can choose from different
types of equity funds including those that specialize in growth
stocks (which don’t usually pay dividends), income funds (which
hold stocks that pay large dividends), value stocks, large-cap
stocks, mid-cap stocks, small-cap stocks, or combinations of these.

4. BALANCED FUNDS

These funds invest in a mix of equities and fixed income securities.

They try to balance the aim of achieving higher returns against the
risk of losing money. Most of these funds follow a formula to split
money among the different types of investments. They tend to
have more risk than fixed income funds, but less risk than pure
equity funds. Aggressive funds hold more equities and fewer
bonds, while conservative funds hold fewer equities relative to
bonds.

5. INDEX FUNDS

These funds aim to track the performance of a specific index such

as the S&P/TSX Composite Index. The value of the mutual fund
will go up or down as the index goes up or down. Index funds
typically have lower costs than actively managed mutual funds
because the portfolio manager doesn’t have to do as much
research or make as many investment decisions.

6. SPECIALITY FUNDS

These funds focus on specialized mandates such as real estate,

commodities or socially responsible investing. For example, a
socially responsible fund may invest in companies that support
environmental stewardship, human rights and diversity, and may
avoid companies involved in alcohol, tobacco, gambling, weapons
and the military.

7. FUNDS OF FUNDS

These funds invest in other funds. Similar to balanced funds, they

try to make asset allocation and diversification easier for the
investor. The MER for fund-of-funds tend to be higher than stand-
alone mutual funds.

FUNCTIONS OF MUTUAL FUNDS:-

The functions of mutual funds are discussed as under:-

Management

Functions
Precision of mutual Diversification

funds

Cost
effectiveness
MANAGEMENT:-

When you invest in a mutual fund, you benefit from professional

money managers and their research team. Spectacular returns
aren't guaranteed just because professionals run the fund, but you
do know your funds lie in the hands of an experienced crew who
understand the financial markets. This means you don't have to
spend a lot of time researching stocks yourself, as you would if
you were investing in individual stocks. Instead, mutual fund
managers track the financial markets and the day-to-day
fluctuation of different industries for you and then act accordingly.

DIVERSIFACTION:-

When you buy into a mutual fund you have the opportunity to buy
multiple stocks, bonds or other assets, depending on the type of
fund it is. This diversified approach minimizes the effect of price
fluctuations in a single asset. The more assets you own, the less
overall effect each individual asset has on your portfolio. Invest in
a single mutual fund and you are already more diversified than if
you purchased a single stock. Buying multiple funds, including
bond, stock and money-market funds, provides a diversification
level nearly impossible to achieve by purchasing stocks and bonds
one at a time.

COST EFFECTIVENESS:-

When you buy a fund, you will have to pay a commission as well
as a yearly management fee. Ranging from 1 percent of your total
investment to several percentage points, this fee compensates the
fund controllers for managing your money. Don't let these fees
deter you from investing. Remember that mutual funds hold
multiple assets. Purchasing all those assets individually to attain a
similar diversification level on your own could result in an even
more expensive commission bill and higher brokerage fees.

PRECISION:-

Mutual funds let you tailor your portfolio to meet investment

objectives by purchasing different fund types. Mutual funds range
from conservative and low-risk to exotic and high-risk.
HISTORY OF MUTUAL FUNDS IN INDIA:-

A strong financial market with broad participation is essential for

a developed economy. With this broad objective India’s first
mutual fund was establishment in 1963, namely, Unit Trust of
India (UTI), at the initiative of the Government of India and
Reserve Bank of India ‘with a view to encouraging saving and
investment and participation in the income, profits and gains
accruing to the Corporation from the acquisition, holding,
management and disposal of securities’.

First phase -1964-1987-

The Mutual Fund industry in India started in 1963 with formation

of UTI in 1963 by an Act of Parliament and functioned under the
Regulatory and administrative control of the Reserve Bank of
India (RBI). In 1978, UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. Unit Scheme
1964 (US ’64) was the first scheme launched by UTI. At the end of
1988, UTI had ₹ 6,700 crores of Assets Under Management (AUM).

Second phase- 1987-1993-

The year 1987 marked the entry of public sector mutual funds set
up by Public Sector banks and Life Insurance Corporation of India
(LIC) and General Insurance Corporation of India (GIC). SBI
Mutual Fund was the first ‘non-UTI’ mutual fund established in
June 1987, followed by Canbank Mutual Fund (Dec. 1987),
Punjab National Bank Mutual Fund (Aug. 1989), Indian Bank
Mutual Fund (Nov 1989), Bank of India (Jun 1990), Bank of
Baroda Mutual Fund (Oct. 1992). LIC established its mutual fund
in June 1989, while GIC had set up its mutual fund in December
1990. At the end of 1993, the MF industry had assets under
management of ₹47,004 crores.

Third phase-1993-2003-

The Indian securities market gained greater importance with the

establishment of SEBI in April 1992 to protect the interests of the
investors in securities market and to promote the development of,
and to regulate, the securities market.

In the year 1993, the first set of SEBI Mutual Fund Regulations
came into being for all mutual funds, except UTI. The erstwhile
Kothari Pioneer (now merged with Franklin Templeton MF) was
the first private sector MF registered in July 1993. With the entry
of private sector funds in 1993, a new era began in the Indian MF
industry, giving the Indian investors a wider choice of MF
products. The initial SEBI MF Regulations were revised and
replaced in 1996 with a comprehensive set of regulations, viz.,
SEBI (Mutual Fund) Regulations, 1996 which is currently
applicable.

The number of MFs increased over the years, with many foreign
sponsors setting up mutual funds in India. Also the MF industry
witnessed several mergers and acquisitions during this phase. As
at the end of January 2003, there were 33 MFs with total AUM of
₹1,21,805 crores, out of which UTI alone had AUM of ₹44,541
crores.

Fourth phase- since February 2003

In February 2003, following the repeal of the Unit Trust of India

Act 1963, UTI was bifurcated into two separate entities, viz., the
Specified Undertaking of the Unit Trust of India (SUUTI) and UTI
Mutual Fund which functions under the SEBI MF Regulations.
With the bifurcation of the erstwhile UTI and several mergers
taking place among different private sector funds, the MF industry
entered its fourth phase of consolidation.

Fifth phase-since today

Taking cognisance of the lack of penetration of MFs, especially in

tier II and tier III cities, and the need for greater alignment of the
interest of various stakeholders, SEBI introduced several
progressive measures in September 2012 to "re-energize" the
Indian Mutual Fund industry and increase MFs’ penetration.

In due course, the measures did succeed in reversing the negative

trend that had set in after the global melt-down and improved
significantly after the new Government was formed at the Center.

Since May 2014, the Industry has witnessed steady inflows and
increase in the AUM as well as the number of investor folios
(accounts).
Why should one invest in a mutual fund?

1. MFs are managed by professional fund managers, responsible

for making wise investments according to market movements and
trend analysis.

2. MFs allow you to invest your savings across a variety of

securities and diversify your assets according to your objectives,
and risk tolerance.

3. MFs provide investors the freedom to earn on their personal

savings. Investments can be as less as Rs. 500.

4. MFs offer relatively high liquidity.

5. Certain mutual fund investments are tax efficient. For example,

domestic equity mutual funds investors do not need to pay capital
gains tax if they remain invested for a period of above 1 year.
COMPANY PROFILE OF UTI MUTUAL FUND:-

UTI AMC is today a household name in India and has a wide

portfolio to suit the varied needs of investors supported by
industry-led best practices, long-term vision, and shareholder
values. With 150 branches, 47,000 highly trained IFAs, 320
Chief Agents and Business Development Associates and over 1
crore investor accounts, UTI AMC is one of the leading financial
institutions with a pan Indian presence. We are committed to
continuing our legacy of delivering best in class services with a
focus on social responsibility and nation-building.

Management team
 Mr. Suraj Kaeley - Group President, Sales, and Marketing
 Mr. I Rahman - Group President & Chief Financial Officer
 Mr. Vetri Subramaniam - Group President& Head-Equity
 Mr. Amandeep Chopra - Group President& Head-Fixed
 Income

Registered office:-UTI Towers, ‘Gn’ Block, Bandra kurla

complex, Bandra (E), Mumbai.

UTI Trustee CO. (P) LTD.

Directors:-

1. Shri Ashok K Kini, Trustee Chairman

2. Prof P G Apte

3. Shri S Ravi

4. Shri CES azarish

5. Shri A Ramesh Kumar

6. Shri Suahil Nathani

 SPONSORS:-

State Bank of India Punjab National Bank

Bank of Baroda Life Insurance Corporation of India

INTRODUCTION:-

IN UTI Mutual Fund was carved out of the erstwhile Unit Trust of
India (UTI) as a SEBI registered mutual fund from 1 February
2003. The Unit Trust of India Act 1963 was repealed, paving way
for the bifurcation of UTI into – Specified Undertaking of Unit
Trust of India (SUUTI); and UTI Mutual Fund (UTIMF).

UTI Mutual Fund is promoted by the four of the largest Public

Sector Financial Institutions as sponsors, viz., State Bank of India
Life Insurance Corporation of India, Bank of Baroda and Punjab
National Bank with each of them holding an 18.24% stake in the
paid up capital of UTI AMC.

T Rowe Price Group Inc (TRP Group) through its wholly owned
subsidiary T Rowe Price Global Investment Services Ltd. (TRP)
has acquired a 26% stake in UTI Asset Management Company
Limited (UTI AMC)

UTI Mutual Fund is the oldest and one of the largest mutual funds
in India with over 10 million investor accounts under its 230
domestic schemes / plans as on September 30, 2017.

UTI Mutual Fund has a nationwide distribution network, which is

spread across the length and breadth of the country. Its
distribution network comprises over 48000 AMFI/NISM certified
Independent Financial Advisors and 150 Financial Centers

UTI Mutual Fund has been the pioneer for launching various
schemes viz. UTI Unit Linked Insurance Plan (ULIP) with life &
accident cover (Launched in 1971), UTI Mastershare (Launched in
1986), India's first Offshore Fund – India fund (Launched in
1986), UTI Wealth Builder Fund, the first of its kind in the Indian
mutual fund industry combining different asset classes i.e. equity
and gold which are lowly correlated.
HISTORY OF UTI IN INDIA:-

Unit Trust of India (UTI) was established in 1963 by an Act of

Parliament. It was set up by the Reserve Bank of India and
functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI
and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first
scheme launched by UTI was Unit Scheme 1964. At the end of
1988 UTI had Rs. 6,700 crores of assets under management.

Vision :
To be the most preferred Mutual Fund

Mission:
 The most trusted brand, admired b y all stakeholders
 The largest and most efficient money manager with global
presence
 The best in class customer service provider
 The most preferred employer
 The most innovative and best wealth creator
 A socially responsible organisation known for best
corporate governance

GLOBAL SCENARIO:

Some basic facts

In Us, every third household is a mutual fund investor.

In US, the MF industry size is abour 67% of the US GDP whereas

the Indian MF industry is just 6% of our GDP.

In US, MF assets are 1.5 times the bank deposit.

In India the bank deposit are about 10.50 times the MF assets.

In India for the past 3 years it has been seen that nearly 2,500
crore is being transferred from bank deposits to Mutual Funds on
a yearly basis.
Objectives of mutual fund:-

The general objective of any Mutual Fund (MF) is maximizing the

returns at a certain level of risk.
There are specific objectives as well and Funds are usually
classified as per their objectives and the investment style. Here
are some of the common forms of mutual fund objectives:

Growth Funds: The most common objective of investment is

growth. The primary objective of any growth fund is capital
appreciation over the medium to long term. Growth mutual funds
are generally invested primarily in small to large cap stocks.

Income Funds: Here the objective is current income in certain

invervals as opposed to capital appreciation.These funds are
suitable for investors, who are looking for cash flow to
supplement their income. To ensure steady income, major portion
of the asset is invested in income instruments viz. fixed interest
debentures, bonds, preference stocks and dividend paying stocks
etc.

Sector/Industry Funds: These funds aims at investing only in

specific sectors or industries, such as real estate or healthcare.
The main objective behind these funds is to maximizing the return
by exploiting the growth of booming sectors.

Value Funds: This funds generally aims at investing in stocks that

are deemed to be undervalued in price because of some inherent
inefficiencies of the Market. It is expected that, once the market
corrects these inefficiencies, the stock price will rise thus
benefitting the investor.
Objectives of UTI

Unit Trust of India (UTI) is a statutory public sector

investment institution which was set up in February 1964
under the Unit Trust of India Act, 1963. UTI began operations
in July 1964. It provides opportunity for small-savers to
invest in areas where their risk is diversified.

The Unit-holders, if necessary, can sell their units to UTI at

the prices determined by UTI. One of the attractions is that
the investment in UTI has an income-tax rebate and the
income from the UTI is exempted; from income-tax subject to
certain limits.
Objectives:
The primary objectives of the UTI are:
(i) To encourage and pool the savings of the middle and low
income groups.

(ii) To enable them to share the benefits and prosperity of the

industrial development in the country.

Organisation and Management:

UTI was established with an initial capital of Rs. 5 crore,
contributed by the RBI, LIC, SBI and its subsidiaries and
scheduled banks and financial institutions. The initial
capital of Rs. 5 crore was divided into 1,000 certificates of
Rs. 50,000 each. To supplement its financial resources, the
trust can borrow from the Reserve Bank of India, the
amount being repayable on demand’ or within a period of
18 months.
UTI is managed by a Board of Trustees, consisting of a
chairman and four members nominated by Reserve Bank of
India, one member nominated by LIC, one member
nominated by the State Bank of India, and two members
elected by the contributing institutions.

Functions of UTI:
The UTI functions are discussed below:
(i) To accept discount, purchase or sell bills of exchange,
promissory note, bill of lading, warehouse receipt, documents of
title to goods etc.,

(ii) To grant loans and advances.

(iii) To provide merchant banking and investment advisory

service.

(iv) To provide leasing and hire purchase business.

(v) To extend portfolio management service to persons residing
outside India.

(vi) To buy or sell or deal in foreign exchange dealings.

(vii) To formulate unit scheme or insurance plan in association

with or as agent of GIC.

(viii) To invest in any security floated by the Central Government,

RBI or foreign bank.

Schemes of UTI:
The familiar schemes of UTI are given below:
(i) Unit scheme—1964.

(ii) Unit Linked Insurance Plan—1971.

(iii) Children Gift Growth Fund Unit Scheme—1986.

(iv) Rajyalakhmi Unit Scheme—1992.

(v) Senior Citizen’s Unit Plan—1993.

(vi) Monthly Income Unit Scheme.

(vii) Master Equity Plan—1995.

(viii) Money Market Mutual Fund—1997.

(ix) UTI Growth Sector Fund—1999.

(x) Growth and Income Unit Schemes.

Advantages of UTI:

The advantages of Unit Trust are:

(i) The investment is safe and the risk is spread over a wide range
of securities.

(ii) The Unit-holders will be getting regular and good income, as

90 percent of its income will be distributed.

(iii) Dividends up to Rs. 1,000 received by the individual are

exempt from income-tax.

(iv) There is a high degree of liquidity of investment as the units

can be sold back to the trust at any time at prices fixed by trust.
Constitution of UTI:

The UTI Mutual Fund (the Mutual Fund) has been constituted as a
Trust on December 09, 2002 in accordance with the provisions of
the Indian Trusts Act, 1882 (2 of 1882) with Bank of Baroda,
Punjab National Bank, State Bank of India and Life Insurance
Corporation of India as the Sponsors and UTI Trustee Company
Private Ltd as the Trustee. The Trust Deed has been registered
under the Indian Registration Act, 1908. The Mutual Fund was
registered with SEBI on January 14, 2003 under Registration Code
MF/048/03/01.

RIGHTS OF UNITHOLDERS OF THE SCHEME

1. Unit holders of the Scheme have a proportionate right in the

beneficial ownership of the assets of the Scheme.

2. When the Mutual Fund declares a dividend under the Scheme,

the dividend warrants/ECS credit advice shall be despatched
within 30 days of the declaration of the dividend. Account
Statement reflecting the new or additional subscription as well as
Redemption / Switch of Units shall be despatched to the Unit
holder within 10 business days of the Specified Redemption Date.
Provided, if a Unit holder so desires, the Mutual Fund shall issue a
Unit certificate (non- transferable) within 30 days of the receipt of
request for the certificate.

3. The Mutual Fund shall dispatch Redemption proceeds within

10 Business Days of receiving the Redemption request.

4. The Trustee is bound to make such disclosures to the Unit

holders as are essential in order to keep the unitholders informed
about any information known to the Trustee which may have a
material adverse bearing on their investments.

5. The appointment of UTI AMC for the Mutual Fund can be

terminated by majority of the Directors of the Trustee Board or by
75% of the Unit holders of the Scheme.

6. 75% of the Unit holders of a Scheme can pass a resolution to

wind- up a Scheme. UTI MF SAI (31.3.18) 58

Growth

UTI Asset Management Company, launched in 1963 (its original

form, Unit Trust of India), is India’s oldest and one of the largest
mutual funds with over 1 crore investor accounts under it. The
AMC also has India’s longest continuously running mutual fund
scheme, UTI Mastershare which was launched in 1986.

UTI Asset Management Company, launched in 1963 (its original

form, Unit Trust of India), is India’s oldest and one of the largest
mutual funds with over 1 crore investor accounts under it. The
AMC also has India’s longest continuously running mutual fund
scheme, UTI Mastershare which was launched in 1986.