A

PROJECT
ON
BANKING
SECTOR
CONTENTS

 AN
INTRODU
CTION TO
BANKING
SECTOR
IN INDIA
 PEST
ANALYSIS
 7P’s OF
BANKING
SECTOR
 BLUEPR
INTING
 4I’s OF
BANKING
 RATER
ANALYSIS
FOR
INDIAN
OVERSEA
S BANK
 MARKET
SEGMENT
ATION
 COMPLA
INT
HANDLIN
G–HDFC
BANK
 CASE
STUDY-I
 RATER
 SERVIC
E
RECOVER
Y
 FISH
BONE
 CASE
STUDY-II
 (ICICI
BANK)
 RATER
 BIBLIO
GRAPHY
 ARTIC
LES
 AN
INTRODUC
TION TO
THE
 BANKING
SECTOR IN
INDIA

Banks are
the most
significant
players in
the Indian
financial
market.
They are
the biggest
purveyors
of credit,
and they
also attract
most of the
savings
from the
population.
Dominated
by public
sector, the
banking
industry has
so far acted
as an
efficient
partner in
the growth
and the
developmen
t of the
country.
Driven by
the socialist
ideologies
and the
welfare
state
concept,
public
sector
banks have
long been
the
supporters
of
agriculture
and other
priority
sectors.
They act as
crucial
channels of
the
government
in its efforts
to ensure
equitable
economic
developmen
t.

The Indian
banking can
be broadly
categorized
into
nationalized
(governmen
t owned),
private
banks and
specialized
banking
institutions.
The
Reserve
Bank of
India acts a
centralized
body
monitoring
any
discrepanci
es and
shortcomin
g in the
system.
Since the
nationalizati
on of banks
in 1969, the
public
sector
banks or
the
nationalized
banks have
acquired a
place of
prominence
and has
since then
seen
tremendous
progress.
The need to
become
highly
customer
focused has
forced the
slow-
moving
public
sector
banks to
adopt a fast
track
approach.
The
unleashing
of products
and
services
through the
net has
galvanized
players at
all levels of
the banking
and
financial
institutions
market grid
to look
anew at
their
existing
portfolio
offering.
Conservativ
e banking
practices
allowed
Indian
banks to be
insulated
partially
from the
Asian
currency
crisis.
Indian
banks are
now
quoting al
higher
valuation
when
compared
to banks in
other Asian
countries
(viz. Hong
Kong,
Singapore,
Philippines
etc.) that
have major
problems
linked to
huge Non
Performing
Assets
(NPAs) and
payment
defaults.
Co-
operative
banks are
nimble
footed in
approach
and armed
with
efficient
branch
networks
focus
primarily on
the ‘high
revenue’
niche retail
segments.
 The Indian
banking has
finally
worked up
to the
competitive
dynamics of
the ‘new’
Indian
market and
is
addressing
the relevant
issues to
take on the
multifarious
challenges
of
globalizatio
n. Banks
that employ
IT solutions
are
perceived
to be
‘futuristic’
and
proactive
players
capable of
meeting the
multifarious
requiremen
ts of the
large
customer’s
base.
Private
Banks have
been fast
on the
uptake and
are
reorienting
their
strategies
using the
internet as
a medium
The Internet
has
emerged as
the new
and
challenging
frontier of
marketing
with the
conventiona
l physical
world
tenets
being just
as
applicable
like in any
other
marketing
medium.
The Indian
banking has
come from
a long way
from being
a sleepy
business
institution
to a highly
proactive
and
dynamic
entity. This
transformat
ion has
been
largely
brought
about by
the large
dose of
liberalizatio
n and
economic
reforms
that
allowed
banks to
explore new
business
opportunitie
s rather
than
generating
revenues
from
convention
al streams
(i.e.
borrowing
and
lending).
The
banking in
India is
highly
fragmented
with 30
banking
units
contributing
to almost
50% of
deposits
and 60% of
advances.
Indian
nationalized
banks
(banks
owned by
the
government
) continue
to be the
major
lenders in
the
economy
due to their
sheer size
and
penetrative
networks
which
assures
them high
deposit
mobilization
. The
Indian
banking can
be broadly
categorized
into
nationalized
, private
banks and
specialized
banking
institutions.

The
Reserve
Bank of
India acts
as a
centralized
body
monitoring
any
discrepanci
es and
shortcomin
g in the
system. It
is the
foremost
monitoring
body in the
Indian
financial
sector. The
nationalized
banks (i.e.
government
-owned
banks)
continue to
dominate
the Indian
banking
arena.
Industry
estimates
indicate
that out of
274
commercial
banks
operating in
India, 223
banks are
in the
public
sector and
51 are in
the private
sector. The
private
sector bank
grid also
includes 24
foreign
banks that
have
started
their
operations
here.

The
liberalize
policy of
Governmen
t of India
permitted
entry to
private
sector in
the
banking,
the industry
has
witnessed
the entry of
nine new
generation
private
banks. The
major
differentia
ting
parameter
that
distinguis
hes these
banks
from all
the other
banks in
the Indian
banking is
the level
of service
that is
offered to
the
customer.
Their
focus has
always
centered
around
the
customer
–
understan
ding his
needs,
preemptin
g him and
consequen
tly
delighting
him with
various
configurat
ions of
benefits
and a
wide
portfolio
of
products
and
services.
These
banks have
generally
been
established
by
promoters
of repute or
by ‘high
value’
domestic
financial
institutions.

The
popularity
of these
banks can
be gauged
by the fact
that in a
short span
of time,
these banks
have
gained
considerabl
e customer
confidence
and
consequentl
y have
shown
impressive
growth
rates.
Today, the
private
banks
corner
almost four
per cent
share of the
total share
of deposits.
Most of the
banks in
this
category
are
concentrate
d in the
high-growth
urban areas
in metros
(that
account for
approximat
ely 70% of
the total
banking
business).
With
efficiency
being the
major
focus, these
banks have
leveraged
on their
strengths
and
competenci
es viz.
Manageme
nt,
operational
efficiency
and
flexibility,
superior
product
positioning
and higher
employee
productivity
skills.

The private
banks with
their
focused
business
and service
portfolio
have a
reputation
of being
niche
players in
the
industry. A
strategy
that has
allowed
these banks
to
concentrate
on few
reliable
high net
worth
companies
and
individuals
rather than
cater to the
mass
market.
These well-
chalked out
integrates
strategy
plans have
allowed
most of
these banks
to deliver
superlative
levels of
personalize
d services.
With the
Reserve
Bank of
India
allowing
these banks
to operate
70% of their
businesses
in urban
areas, this
statutory
requiremen
t has
translated
into lower
deposit
mobilization
costs and
higher
margins
relative to
public
sector
banks.

PEST
ANALYSIS
TECHNOLO
GICAL
ENVIROME
NT
Technolog
y plays a
very
important
role in
bank’s
internal
control
mechanism
s as well as
services
offered by
them. It has
in fact given
new
dimensions
to the banks
as well as
services
that they
cater to and
the banks
are
enthusiastic
ally
adopting
new
technologic
al
innovations
for devising
new
products
and
services.
The latest
developmen
ts in terms
of
technology
in computer
and
telecommu
nication
have
encouraged
the bankers
to change
the concept
of branch
banking to
anywhere
banking.
The use of
ATM and
Internet
banking has
allowed
‘anytime,
anywhere
banking’
facilities.
Automatic
voice
recorders
now answer
simple
queries,
currency
accounting
machines
makes the
job easier
and self-
service
counters
are now
encouraged
. Credit card
facility has
encouraged
an era of
cashless
society.
Today
MasterCard
and Visa
card are the
two most
popular
cards used
world over.
The banks
have now
started
issuing
smartcards
or debit
cards to be
used for
making
payments.
These are
also called
as
electronic
purse.
Some of the
banks have
also started
home
banking
through
telecommu
nication
facilities
and
computer
technology
by using
terminals
installed at
customers
home and
they can
make the
balance
inquiry, get
the
statement
of accounts,
give
instructions
for fund
transfers,
etc.
Through
ECS we can
receive the
dividends
and interest
directly to
our account
avoiding the
delay or
chance of
loosing the
post.
 Today
banks are
also using
SMS and
Internet as
major tool
of
promotions
and giving
great utility
to its
customers.
For example
SMS
functions
through
simple text
messages
sent from
your
mobile. The
messages
are then
recognized
by the bank
to provide
you with the
required
information.
 All these
technologic
al changes
have forced
the bankers
to adopt
customer-
based
approach
instead of
product-
based
approach.
ECONOMIC
AL
ENVIROME
NT
Banking is
as old as
authentic
history and
the modern
commercial
banking are
traceable to
ancient
times. In
India,
banking has
existed in
one form or
the other
from time to
time. The
present era
in banking
may be
taken to
have
commenced
with
establishme
nt of bank
of Bengal in
1809 under
the
government
charter and
with
government
participatio
n in share
capital.
Allahabad
bank was
started in
the year
1865 and
Punjab
national
bank in
1895, and
thus, others
followed
Every year
RBI declares
its 6
monthly
policy and
accordingly
the various
measures
and rates
are
implemente
d which has
an impact
on the
banking
sector. Also
the Union
budget
affects the
banking
sector to
boost the
economy by
giving
certain
concessions
or facilities.
If in the
Budget
savings are
encouraged
, then more
deposits will
be attracted
towards the
banks and
in turn they
can lend
more
money to
the
agricultural
sector and
industrial
sector,
therefore,
booming
the
economy. If
the FDI
limits are
relaxed,
then more
FDI are
brought in
India
through
banking
channels.

POLITICAL/
LEGAL
ENVIROME
NT
Governme
nt and RBI
policies
affect the
banking
sector.
Sometimes
looking into
the political
advantage
of a
particular
party, the
Government
declares
some
measures to
their
benefits like
waiver of
short-term
agricultural
loans, to
attract the
farmer’s
votes. By
doing so the
profits of
the bank
get
affected.
Various
banks in the
cooperative
sector are
open and
run by the
politicians.
They exploit
these banks
for their
benefits.
Sometimes
the
government
appoints
various
chairmen of
the banks.
Various
policies are
framed by
the RBI
looking at
the present
situation of
the country
for better
control over
the banks.
 SOCIAL
ENVIROME
NT
Before
nationalizati
on of the
banks, their
control was
in the hands
of the
private
parties and
only big
business
houses and
the effluent
sections of
the society
were
getting
benefits of
banking in
India. In
1969
government
nationalized
14 banks.
To adopt
the social
developmen
t in the
banking
sector it
was
necessary
for speedy
economic
progress,
consistent
with social
justice, in
democratic
political
system,
which is
free from
domination
of law, and
in which
opportunitie
s are open
to all.
Accordingly,
keeping in
mind both
the national
and social
objectives,
bankers
were given
direction to
help
economicall
y weaker
section of
the society
and also
provide
need-based
finance to
all the
sectors of
the
economy
with flexible
and liberal
attitude.
Now the
banks
provide
various
types of
loans to
farmers,
working
women,
professional
s, and
traders.
They also
provide
education
loan to the
students
and housing
loans,
consumer
loans, etc.
Banks
having big
clients or
big
companies
have to
provide
services like
personalize
d banking
to their
clients
because
these
customers
do not
believe in
running
about and
waiting in
queues for
getting their
work done.
The bankers
also have to
provide
these
customers
with special
provisions
and at
times with
benefits like
food and
parties. But
the banks
do not mind
incurring
these costs
because of
the kind of
business
these
clients bring
for the
bank.
Banks
have
changed
the culture
of human
life in India
and have
made life
much easier
for the
people.
 7 P’S of
BANKING
SECTOR

It is
very
important
for any
bank to
identify the
7 P’s of
services so
was
understands
their
customers
better and
provide
them with
best of
service. The
7 P’s are:
1. PRODUCT
MIX
2. PRICE
MIX
3. PLACE
4. PROMOTI
ON
5. PEOPLE
6. PROCESS
7. PHYSICAL
EVIDENCE

PRODUCT
MIX
 The
product mix
of a
company
includes all
different
product
lines a
company
offers to its
customers.
The product
line of a
bank might
easily
include
more than
100
different
services. In
today’s
competitive
scenario it
has become
very
necessary
for a bank
to provide
it’s
customers
with a wide
variety of
services
and the
best
technology
in order to
attract
them. Here
is an
example of
some of the
products
offered by
UTI Bank to
its
customers.
Offering
UTI Bank's
Savings
Account is
just the
right
product for
everyone,
salaried,
employees
or
businessme
n, high net
worth
individuals
and NRI's.
The
unmatched
package of
UTI Bank
Savings
Bank
account
given below
brings the
benefits of
better,
efficient and
hassle free
banking.
• ATM
Network
A Savings
Bank
Account
with UTI
Bank
entitles you
to a free
ATM card,
which
enables you
to access
your
account
anytime
and at any
ATM centre
across the
country.
You can
withdraw
and deposit
money and
cheques
with your
ATM card.
Unlike most
other ATMs,
a UTI Bank
ATM allows
you to
withdraw up
to Rs.
20,000 a
day. In
addition,
cash can be
withdrawn
from any of
the ATMs
against your
MasterCard
(domestic/in
ternational).

• 7-Day
Banking
At select
branches
spread over
the country,
you can
bank on all
the 7 days
of the week
(except for
public
holidays),
over
extended
working
hours.
•Telebanki
ng
Telebanking
service
provides
you instant
access to
your
account. It
offers you a
wide range
of services
over the
phone such
as account
information,
Balance
Enquiry,
Transaction
Details,
Statement
of Account,
Status of
your
Cheque ,
etc.
•iConnect-
Internet
Banking
This is the
concept of
"the Bank
on your
desk-top".
You can
look-up the
status of
your
account,
query and
undertake a
range of
financial
transactions
, simply by
clicking the
mouse. Now
don't you
think you
have a
great
opportunity
to see
yourself
laughing
your way to
the bank?

Offering
UTI Bank
has joined
hands with
Citibank, to
give rise to
a new kind
of card
power -
unique and
unmatched
benefits and
internationa
l utility at
the most
competitive
rates. The
UTI Bank
Citibank
Internationa
l Silver
Card, the
MasterCard
and
'Unique'
Card offers
quite a few
benefits.
Rewards
UTI Bank
Citibank
Card
combines
dual
convenienc
es of high
purchase
power and
flexible
payment
facility.
Purchase of
high-value
items is
now
convenient
and when it
comes to
payback
time, your
bill can be
paid in
installments
, depending
on your
financial
liquidity at a
given
moment.
The
Revolving
Credit
Facility lets
you pay as
little as 5%
of your total
outstanding
every
month.
Giving you
the power
to buy now
and pay
later in
parts!
Dial-A-
Draft

One can use

your UTI
Bank
Citibank
Card to pay
for your
personal
expenses at
places
where
credit cards
are not
accepted
yet. Like
paying for
investments
, telephone
and
electricity
bills, school
fees and
much more.
Just call
CitiPhone
and the
draft you
need will be
delivered to
you!
Credit
Limit
Increase
You can call
CitiPhone
and ask for
a Credit
Limit
Increase in
the event
that you
have to
make a
large
purchase on
your card
urgently.
It's
especially
handy for
paying off
vehicle
repairs,
telephone
bills and
electricity
bills. And
for
anniversarie
s, weddings,
birthdays,
or business
trips or
when a
holiday
goes
beyond
budget
24-Hour
ATMs
One can
withdraw
emergency
cash up to
60% of your
credit limit
from 24-
Hour ATMs
in
Ahmedabad
, Bangalore,
Calcutta,
Chennai,
Delhi,
Hyderabad,
Mumbai and
Pune. While
traveling
overseas
you can
draw cash
from
MasterCard
ATMs
spread
across the
globe. The
same is
applicable
for any
Citibank
branch. Also
the cash
you
withdraw is
insured
against
theft for a
period of 12
hours after
withdrawal.
A never
before
facility is
brought to
you with the
UTI Bank
Citibank
Card at a
transaction
fee of 2.5%
or Rs.50
whichever is
higher. All
cash
advances
also carry a
service
charge from
the date of
the
transaction.
The cash
withdrawal
limit for the
first year is
Rs. 5,000.
Photo card
One may
choose to
have your
photograph
and
signature
digitally
imprinted
on the front
of your Card
in color. So
that you get
the extra
recognition
and security
you expect
as a UTI
Bank
Citibank
card
member
Concessio
n on
Personal
Remittanc
es
Do you
often need
to remit
funds to
other cities
using
facilities
such as
Drafts/Teleg
raphic
Transfers,
etc.? Here's
a benefit
you would
most
appreciate.
A 25%
rebate on
standard
commission
is offered
on personal
remittances
at UTI Bank
branches.
Overdraft
facility
UTI Bank
Citibank
credit card
provides
you with an
overdraft
facility to
the extent
of 75% of
the value of
your
holdings of
Demat
Shares and
Units!
Moreover,
you get a
waiver of
0.5% on
interest rate
chargeable
under the
scheme. All
you need to
avail
yourself of
these
benefits is a
Demat A/c
with UTI
Bank.
Free ATM
Card
The UTI
Bank
Citibank
Credit Card
offers you a
free ATM
Card, which
can be used
at over 250
UTI Bank
ATM centers
all over
India. All
you have to
do is open a
saving
bank/curren
t Account
with UTI
Bank.
Other
features
UTI Bank
Citibank
Card has
the widest
possible
reach -
welcomed
by 1,10,000
Merchant
Partners
across India
and Nepal
and yet
another 160
lakh
Merchant
Establishme
nts
worldwide.
The card
can be used
both for
major
occasions,
and also for
everyday
purchases
like
groceries,
cosmetics,
and petrol
and auto
accessories.
It can also
be used to
buy high-
value items
like
consumer
durables
(refrigerator
s, washing
machines,
microwave
ovens, etc.).
And even
paying
customs
duty and
hospital
bills
becomes
convenient
with the
Card.
PRODUCT
WIDTH
AND
DEPTH
Width

Width of
the product
mix is the
number of
product
lines a
company is
offering.
The product
width could
be a narrow
one or a
wide one
depending
from bank
to bank. A
wide mix
encourages
more sales
since the
banks are
able to
diversify
and provide
more to
their
customers
and they
also appeal
to a larger
target
market.

Depth
Depth of
the product
mix is the
number of
product
items in
each
product
line. Banks
with more
schemes
and
services
have more
depths than
those
offering
only a few.

Here is
table giving
an example
of Width
and Depth
in the
Product Mix:
 Similarly,
different
banks plan
out their
product
portfolios
and based
on that, the
depth and
width of
their
product mix
can be
determined.
In today’s
scenario,
where there
is cutthroat
competition
and new
foreign
banks
entering the
Indian
markets, it
has became
more or less
like a law to
have very
wide
product
lines with
more and
more
number of
products in
each line.
PRODUCT
LEVELS

Core
Benefit:
It is the
main or
core reason
why the
customer
will buy the
service of
the bank.
More like
the basic
purpose or
necessity.

Basic
Product:
The core
benefit is
converted
into a basic
product.
That is the
service can
used by the
customer in
order to
fulfill his/her
needs.

Expected
Product:
 It refers to
the set of
attributes
and
conditions
expected by
the
customers
when they
purchase
the service.

Augmented
Product:
 It is the
additional
feature that
the banks
provide
which
exceeds the
customer’s
expectation
s.
Potential
Product:

Innovations
and product
differential
is the bases
of a
Potential
Product. If
the banks
alter its
services
according to
the
requirement
s of the
individual
customers it
reaches this
level.

Core Basic
Product Produc
t
 The Safety
basic of
necessi depos
ty to ts
use Loanab
banking le
service funds
 s in etc.
order to
handle
finance
more
efficien
tly
 Thus it can
be seen
how a
particular
product
passes
through
different
levels. In
today’s
competitive
scenario
most banks
try offering
services at
the
Augmented
and
Potential
level.
PRICE MIX

The price
mix in the
banking
sector is
nothing but
the interest
rates
charged by
the different
banks. In
today’s
competitive
scenario
where
customer is
the king,
the banks
have to
charge
them
interest at a
rate in
accordance
with the RBI
directives.
Banks also
compete in
terms of
annual fees
for services
like credit
cards,
DMAT etc.
Another
important
aspect of
the bank’s
pricing
policy today
is the
interest
charged on
the Home
Loans and
Car Loans.
With India’s
economy
progressing,
there are
more and
more
buyers
seeking
these loans
but at a
very
competitive
interest
rate.
Let’s
understand
this with an
example. A
particular
buyer
approaches
a bank for a
car loan for
a period of
3 years. He
is charged
Rs. 20,000
as interest.
However, if
a sale
representati
ve of
another
bank comes
to know of
this deal, he
will try to
attract the
customer by
giving him a
better deal
i.e. a loan at
a lower rate
on interest.
In this way,
it is the
customer
that
ultimately
benefits.

Here is an
example of
some of the
prices
charged by
ICICI bank
for their
services

ATM Free –
Card 2 ATM
Issue cards
issued
free if
it joint
accou
nt
Add – RS.
on 100 –
 Card Beyon
d2
cards
Duplica Rs.
te Card 100
Other
General
Charges

Curre
nt
Acco
nt
Transacti NIL
on
Charges
Charges NIL
for issue
of
Cheques
 book
Issue of Rs. 2
duplicate per
stateme page
nt
Account Rs.1
closure 0
This
example
evinces
some of the
charges
that the
customer
has to pay
for the
services
provided by
the bank.

The
pricing
factor is
very
important
because of
the kind of
competition
that is
prevailing
today in the
Indian
market.
However it
is very
important to
understand
that in the
banking
sector, the
main pricing
policy is
concerned
with the
interest rate
charged.
This interest
rate is
however
regulated
by the
RESERVE
BANK OF
INDIA and
THE INDIAN
BANKING
ASSOCAITIO
N. Any one
particular
bank or a
group of
banks does
not regulate
it. The
interest rate
charged
cannot be
higher than
that decide
by the RBI
and the
INDIAN
BANKING
ASSOCIATIO
N.

Thus,
inspite of
the
constraints
in the
pricing
policy due
to the RBI
directives
there are
mainly
three types
of pricing
methods
adopted by
banks. They
are:
Value
pricing:

Banks
having
unique or
different
products or
schemes
mainly do
this type of
pricing.
They
usually
charge a
combination
of high and
low prices
depending
on the
customer
loyalty as
well as the
products.
This type of
pricing
strategy is
usually
coupled
with
promotion
programme
s.

Going Rate
pricing:
The most
commonly
used pricing
technique is
the going
rate pricing.
In going
rate pricing,
the bank
bases its
price largely
depending
on the
competitor’
s prices.
The banks
however
have to stay
within the
RBI
directives
and
compete.
The banks
may charge
higher or
lower than
their
competitors
. After 1991
when the
foreign
banks
entered the
Indian
market this
method of
pricing has
gained
increasing
importance.
Mark up
pricing:

This is a
pricing
technique
wherein the
cost of the
service is
determined
and a small
margin is
added to it
and then
the final
price is
offered to
the
customers.
This type of
pricing is
the not very
popular
since in the
banking
sector it is
not very
easy to
arrive at the
cost of the
service.
Thus most
banks use a
combination
of mark – up
pricing and
going rate
pricing.

THE MOST

FAVORAB
 LE

PRICING

STRATEGY
This model
shows a
pricing
strategy,
which
should be
adopted in
order to
ensure
maximum
satisfaction
to both the
bank as well
as the
customers.
The price
should be
set in such
a manner
that the
customer is
assured
that he is
not being
cheated or
overcharge
d by the
bank and at
the same
time the
bank is able
to reap
maximum
profits.
Such a
pricing
stand helps
the bank
get
maximum
sales as
well as
profits since
the
customer
feels that
by entering
such a
transaction
he is
winning.
PLACE MIX
 Place mix
is the
location
analysis for
banks
branches.
There are
number a
factors
affecting
the
determinati
on of the
location of
the branch
of bank. It is
very
necessary a
bank to
situated at
a location
where most
of its target
population
is located.
 Some of
the
important
factors
affecting
the location
analysis of a
bank are:
1. The
trade
area
2. Populati
on
characteri
stics
3. Comme
rcial
structure
4. Industri
al
structure
5. Banking
structure
6. Proximit
y to other
convenien
t outlets
7. Real
estate
rates
8. Proximit
y to
public
transport
ation
9. Drawing
time
10. Locatio
n of
competiti
on
 11. Visibilit
y
12. Access
It is not
necessary
that all the
above
conditions
have to be
satisfied
while
selecting
the location
but it
should be
tried to
satisfy as
many of
them as
possible.
1. The
Trade
Area:
 The trade
area is a
very
important
factor
determining
the place
where a
bank branch
should be
set up. For
e.g. a
particular
location
maybe a
huge
trading
place for
textiles,
diamonds or
for that
case even
the stock
market.
Such
locations
are ideal for
setting up
of bank
branches.
2. Populatio
n
Characteri
stics:
 The
demograph
y of a place
is a very
important
factor. This
includes:
 The
income
level of the
population
 The
average
age
 The
average
male
female
population
 The
caste,
religion,
culture
and
customs
 The
average
spending
and saving
habit of
the
people.
 These
factors are
very
important
for a bank
as the help
them decide
the kind of
business
the branch
will get.

3. Commer
cial
Structure:
 The
commercial
structure
refers to the
level of
commerce
i.e. business
activities
taking place
at a
particular
location.
The higher
the level of
business
activities
taking place
in a
particular
location the
more
preferable it
is for
setting up a
bank
branch.

4. Industria
l Structure:
This is
nothing but
a
combination
of the trade
area
analysis and
the
commercial
structure.
However
the
industrial
structure
focuses
more on the
kind of
industries
operating in
a particular
location. For
example, an
area like
SEEPZ is
marked with
a lot of
electronic
manufacturi
ng units.
Thus the
industrial
stricture
determines
the kind of
financial
transactions
that could
take place
in a
particular
location.

5. Banking
Structure:
 The
Banking
structure
refers to the
existence of
other banks
in the area.
Whether
there is
already an
efficient
network of
other bank
branches
operating at
that
particular
area. Thus
the overall
infrastructur
e needed
for the
working of a
bank.
6. Proximit
y of other
convenient
outlets:
This refers
to the other
branches of
the same
bank as well
other
commercial,
entertainme
nt and
industrial
outlets.

7. Real
Estate
Rates:
 This is
mainly
dealing with
the cost
factor
involved in
opening up
a bank
branch at a
particular
location.
The real
estate rate
is a very
strong
factor
influencing
the location
decision for
a bank
branch.

8. Proximit
y to public
transportat
ion:
 The
location
should be
proximate
to public
transportati
on facilities.
This means
it should
have bus
stops close
by as well
as it should
be
proximate
to railway
stations so
as to make
it
convenient
for the
common
man.

9. Drawing
Time:
Drawing
time refers
to the time
period
during
which a
customer
can draw
money from
the banks. It
should be
convenient
to the
customer
and
somewhat
flexible to
accommoda
te the
customer’s
needs. No
bank has
more than a
certain
amount
with them
and in case
a customer
wants to
withdraw an
amount
more than
that
available
with the
bank, the
bank needs
to draw that
amount
from other
banks.
Hence, a
location
must be
such that it
facilitates
minimum
drawing
time.
10.
Location of
Competitio
n:

The
existence of
other banks
also means
competition
. If the level
of
competition
is very high
in a
particular
location, it
is necessary
that a bank
does a lot of
market
research
before
opening a
branch so
as to
estimate
the kind of
business it
would get.
10.
Visibility:

The
location of a
branch
should be
such that it
is visible
and easily
noticed by
the
customers
as well
other
people.
10.
Access:

The bank
branch
should be
very easily
accessible
to the
customers.
If this is not
the case,
the
customer
might
switch to
some other
bank, which
is more
convenient
to him and
very easily
accessible.
The location
should be
such that it
is very
convenient
for the
customer to
reach.
Promotion
Mix
 Promotion
is nothing
but making
the
customer
more and
more aware
of the
services
and benefits
provided by
the bank.
The banks
today can
use a lot of
new
technology
to
communicat
e to their
customers.
Two of the
fastest
growing
modern
tools of
communicat
ing with the
customers
are:

1. Internet
Banking
2. Mobile
Banking

This can be
better
explained
with the
example of
ICICI bank.
SMS
services

SMS
functions
through
simple text
messages
sent from
your cellular
phone.
These
messages
are
recognized
by ICICI
bank to
provide you
with the
required
information.
For
example,
when you
enter ‘IBAL’
your cellular
phone
screen will
display the
current
balance in
your
primary
account.
Thus with
the help of
SMS a wide
range of
query based
transactions
can be
performed
without
even
making a
call.

ICICI was
the first
organization
in India to
provide
Wireless
Application
Protocol
(WAP)
based
services.
Mobile
commerce
using WAP
technology,
allows
secure
online
access of
the web
using
mobile
devices.
With WAP
one can
directly
access the
ICICI WAP
server,
check one’s
account
details and
use other
value added
services.

Thus
different
methods
are used by
different
banks to
promoter its
services.

A bank
may have
very
attractive
schemes
and
services to
offer to
their
customers
but they are
of no use if
they are not
communicat
ed properly
to the
customers.
Promotion is
o inform
and remind
the
individuals
and
persuade
them to
accept,
recommend
or use of
product,
service or
idea.
However
there some
very
important
points that
is to be
considered
before the
promotion
strategy is
made.
These
points are:

Finalizing
the
Budget
Before the
bank
decides the
kind of
promotion
that should
be done, it
very
important to
finalize the
budget for
it. The
formulation
of a sound
budget is
essential to
remove the
financial
constraints
in the
process.
The budget
is
determined
on the basis
of volume
of business
of the bank.
In addition
to this the
intensity of
competition
also plays a
decisive
role.
Selecting
a suitable
vehicle

Another
very
important
task is to
select a
suitable
vehicle for
driving the
message.
There are a
number of
devices to
advertise
such as
broadcast
media,
telecast
media and
the print
media. The
selecting of
the mode of
advertising
is strongly
influenced
by the kind
of budget
decided.
Usually for
promoting
banks the
most
effective
and
economical
form of
advertising
has been
the print
media.
Making
possible
creativity

Making
possible
creativity is
nothing but
the kind of
slogans,
punch lines
etc. that are
supporting
the
message.
They should
be very
creative but
yet simple
to be
understood
by the
common
man. It
should
appeal to
the
customers.
It should be
distinct
from that of
the
competitors
and should
be
successful
in informing
and sensing
the
customers.
Testing
the
Effective
ness

It should
be borne in
mind that
the
advertiseme
nt is first
tested for
its
effectivenes
s. This
should be
done with
the help of
various
techniques
like testing
effectivenes
s on a
sample
group. This
helps
determine
the success
of the
advertiseme
nt and in
case of any
problem the
advertiseme
nt can be
altered and
remedied.
Instrumen
tality of
Branch
Managers
 At a micro
level, it is
the
responsibilit
y of the
branch
managers
to promote
and drive
the
message to
the people
in the local
area. They
should
organize
small
programs in
order to
attract
people and
crate
awareness
in the local
area about
the new
schemes of
the bank.
 Different
Ways of
Promotion

Public
Relations:
In today’s
competitive
scenario
developing
strong
public
relations is
very
important
for any
bank to be
successful.
Most banks
today have
a separate
Public
Relations
department.
However
primarily it
is
considered
as a
responsibilit
y of the
various
bank
managers
to develop a
steady and
strong
relationship
with their
present
customers
as well as
potential
customers.
This can be
done by a
constant
follow up,
small
programme
s etc.
Personal
Selling:

Personal
selling is
found to be
one of the
most
effective
and popular
forms of
promoting
bank
business.
The main
reason for
this is that
banking is a
service in
which trust
plays a very
important
role. In
personal
selling, a
bank
representati
ve goes to
the
customers
and
explains the
scheme to
the
customers.
Also he
gives the
customers
any kind
consultation
he might
need. He
provides the
customers
all the
information
sought by
him. The
representati
ve tries to
persuade
the
customers
to go for the
scheme
provided by
the bank by
telling him
all the
benefits.
Here are
some of the
important
features of
personal
selling
 It is a
direct
relation
between
the buyers
and the
seller
 It is oral
presentatio
n in
conversatio
n
 It is
personal
and social
behavior
 It is found
to be more
effective in
service
oriented
organizatio
ns
 It is based
on the
professiona
l excellence
or expertise
of an
individual

Sales
Promotion
:
 Sales
promotions
are
basically
giving the
customers
some
additional
benefits,
maybe at
times just
some small
gifts, in
order to
promote the
schemes.
The more
innovative
the sales
promotions
the more
positive are
the results.
Some of the
most
popular
sales
promotions
techniques
are gifts,
contests,
fairs and
shows,
discounts
and
commission
,
entertainme
nt and
traveling
plans for
bankers,
additional
allowance,
low interest
financing
etc. It is
very
important
that the
sales
promotions
benefits are
designed in
such a
manner that
they are
better than
those of the
competitors
.

Word – of –
mouth
Promotion
:
 This form
of
promotions
is not only
very
effective in
banking
services but
in any kind
of service.
However it
is more
important in
banking for
the only
reason that
this is a
service
where trust
plays a very
important
role. If a
particular
bank’s
services are
recommend
ed by
friends,
relatives, or
other well
wishers the
person is
more
influenced
and inclined
towards
that bank. It
is very
important to
note that
the internal
employees
of the bank
play a very
important
role in word
– of – mouth
promotion
technique.
This is
because
they can
start the
process by
recommend
ing the
bank to
their friends
and
relatives
and after
that it is like
a chain,
which
spreads like
a wild fire.

Telemarke
ting:
In recent
times
telemarketi
ng has
gained
increasing
importance
as an
effective
tool for
promotion.
The
telemarketi
ng is a
process of
making use
of
sophisticate
d
communicat
ion network
for
promoting
the banks.
This
includes
promoting
through
television,
telephone,
and radio.
Nowadays,
cell phones
are used
extensively
for the
same. This
is the most
popular
form of
promotion.
Banks today
have
started
using ‘SMS’
and many
other
services
supported
by cell
phones to
provide
benefits to
their
customers
and thus
have tried
to increase
their sales.
In today’s
competitive
and modern
scenario it
very
important
that banks
makes use
of
telemarketi
ng
techniques
very
efficiently to
have
desirable
results.

Internet:
 The use of
Internet as
a
promotional
tool is
increasing.
More and
more banks
are using
Internet to
promote
their
services.
The online
banking has
made it
even easier
for the
customers
to avail the
bank’s
services. No
longer do
people have
to go to
their bank
branches
for small
petty
matters like
checking
their
balance etc.
All this can
be done
with the
help of a
few clicks.
Thus,
these were
the
numerous
ways in
which a
bank can
promote its
services
and create
more
awareness
amongst
the people.
 People

People are
the
employees
that are the
service
providers.
In a banking
sector, the
service
provider
plays a very
important
and
determinant
role in
rendering
the
customers a
satisfactory
and a good
service. It is
extremely
essential
that the
service
provider
understand
what his
customers
expect from
him. In the
banking
sector, the
customer
needs to be
guided in a
lot of
matters,
which is
possible
only with
the help of
the service
provider.
 The
position in
the eyes of
the
customer
will be
perceived
by
appearance,
attitude and
behavior of
the
customer
contact
employees.
Not only
does the
customer
contact
employee
influence
the
customer’s
perception
but also the
customer
base of the
organization
does so.
 Process
Mix

The
process mix
constitutes
the overall
procedure
involved in
using the
services
offered by
the bank. It
is very
necessary
that the
process is
very
customer
friendly. In
other words
a process
should be
such that
the
customer is
easily able
to
understand
and easy to
follow.
Today if
particular
banks
formalities
are long
and the
procedure
very
complicated
the overall
process fails
and the
customer
may not be
inclined
towards
using that
banks
services.
 Let’s take
for example
the process
for
application
for a car
loan.
Now this
mainly
involves 3
things.
1. Producin
g of proper
documents
2. Filling up
of
application
form
3. Paying
for the
initial down
payment.

Here the
process
may fail in
the
following
cases:
1. If the
customer
is asked to
produce a
number of
forms out
of which
some may
not be
necessary
at all. Thus
it is very
necessary
that the
customer
be asked
for the
minimum
but most
necessary
document
and not
the other
unnecessar
y
documents
.

2. In case
of
application
form, the
application
form must
be in a
language
best
understood
by the
customers
and it
should not
be very
lengthy
one or
demanding
a lot of
unnecessar
y
informatio
n.

3. Finally
the
payment of
initial
amount.
The
customer
should be
given
options as
to how he
would like
to pay by
cheques or
by credit
card. Once
again the
amount
should be
very
competitiv
e not very
high above
the regular
rates
prevailing
in the
markets.

The smaller
and simpler
the
procedure,
the better
the
process,
and the
customer
will be
more
satisfied.
PHYSICAL
EVIDENCE

Physical
evidence is
the overall
layout of
the place
i.e. how the
entire bank
has been
designed.
Physical
evidence
refers to all
those
factors that
help make
the process
much easier
and
smoother.
For
example, in
case of a
bank, the
physical
evidence
would be
the
placement
of the
customer
service
executive’s
desk, or the
location of
the place
for
depositing
cheques. It
is very
necessary
that the
place be
designed in
such a
manner so
as to ensure
maximum
convenienc
e to the
customer
and cause
no
confusion to
him.

Let us see
an example
as to how
banks try to
make little
changes so
as to make
the service
better for
their
customers.
The Hong
Kong
Shanghai
Banking
Corporation
(HSBC) has
decided in
introducing
a common
uniform for
all the
employees
in all its
branches all
over India.
The plan is
possibly in
line with the
aggressive
retail
banking
adopted by
HSBC. A
common
uniform its
nothing like
a
revolutionar
y change
but
however
this little
change
makes it
very easy
for the
customer to
identify with
his service
provider
and makes
the entire
process
very easy
for him. The
more the
bank does
to make the
service
easier and
better the
more
satisfied will
be the
customer.
 Thus,
these are
the 7 P’s of
services.
Each of
them plays
a very
important
and a
pivotal role
in
determining
the quality
of the
service
provided to
the
customer.
BLUEPRIN
TING

A service
blueprint is
a picture or
a map that
accurately
portrays the
service
system so
that
different
people
involved in
providing it
can
understand
and deal
with it
objectively
regardless
of their
roles or
their
individual
points of
view.
Blueprints
are
particularly
useful at
the
designing
and
redesigning
stages of
service
developmen
t. A service
blueprint
visually
displays the
service by
simultaneou
sly
depicting
the process
of service
delivery,
the points
of customer
contact, the
roles of
customers
and
employees,
and the
visible
elements of
the service.
It provides a
way to
break the
service
down into
its logical
components
and to
depict the
steps or
tasks in the
process, the
means by
which the
tasks are
executed
and the
evidence of
the service
as the
customer
experiences
it.

Standard
Beginning
 Regardless
of our
mapping
objective
(to describe
a new
process or
an existing
process),
type of map
selected
(flow chart,
risk
manageme
nt, cross-
functional,
time
elapsed),
and state
(as-is,
should be,
could be)
selected, all
process
maps will
have the
same
common
beginning
steps.
1.Begin
by
definin
g the
objectiv
e and
the
process
bounda
ries.
Our
objectiv
e in
this
case is
to
docum
ent the
existing
savings
-
deposit
process
for the
purpos
e of
training
new
cashier
s. The
process
bounda
ries will
begin
with
the
custom
er’s
bringin
g a
deposit
into the
bank
(the
input)
and
end
with
the last
step in
the
cashier’
s
handlin
g of the
transac
tion:
issuing
a
receipt
to the
custom
er (the
output)
.
2. List the
basic
steps
that
produc
e the
output,
using
as brief
a
descrip
tion as
possibl
e, such
as a
verb
followe
d by a
noun.
These
may
include:
comple
te
deposit
slip,
greet
custom
er,
count
cash,
inspect
deposit
slip,
post
deposit
, post
passbo
ok,
authent
icate
passbo
ok
posting
, store
cash,
store
deposit
slip,
thank
custom
er.
Arrang
e these
process
es in
the
sequen
ce in
which
they
occur;
this will
help
you
constru
ct your
map
logicall
y and
easily.
3. Record
the
map
title
and
referen
ce
number
at the
top and
centre
of a
landsca
pe-
formatt
ed
sheet.
In the
sample
below,
use
“B1” as
the
referen
ce
number
, where
“B”
refers
to a
series
of
savings
-related
process
maps
and “1”
is the
first
map in
the
series.
4. Record
your
name
and the
date
prepare
d below
the
map
title
line, at
the left
hand
margin.
Constructi
ng the
Map:
What
Symbols
Do I Use?
5. The
starting
point
for this
process
is the
custom
er. Use
the
“Start”
symbol
and
place
this
symbol
in the
upper
left
hand
corner
 of your
paper.
6.Symbols
must be
connected
by arrows to
show flow,
which may
represent
either the
sequence of
the
processes
or the
movement
(transportat
ion) of the
inputs from
process to
process.
Automatical
ly enter an
arrow after
posting a
process,
inspection,
document/i
nput, or
decision
symbol to
your map.
By
convention,
movement
is from left
to right, and
from top to
bottom;
both
directions
are shown
in the
sample
below.
Alternating
the vertical
and
horizontal
flows can
help you
show
activities
that occur
almost
simultaneou
sly, and can
also save
space on
your sheet.
For
example, a
down arrow
is used to
connect the
Start
Process
(customer)
with the
first two
inputs
(passbook
and cash).
You could
have just as
well used a
horizontal
arrow and
placed the
two inputs
to the right
of the Start
Process
symbol. The
choice is
yours. Just
remember,
our
objective is
to present
as clear and
understand
able a map
as possible.
7.The
customer’s
deposit has
three
component
inputs: the
cash, the
deposit slip
(the bank’s
voucher),
and the
passbook
(the
customer’s
receipt).
These three
inputs have
different
processes
performed
on them,
and are
stored in
different
places at
the end of
the process,
so they
need to be
identified by
distinct
symbols.
Note that
the
passbook
and deposit
slip use the
“Document”
symbol,
while the
“Input”
symbol is
used to
represent
the cash.
For the sake
of clarity,
insert the
document
name into
the centre
of the
symbol.
From this
point
forward
assume that
these
documents
flow with
the arrows
(transportat
ion
symbols)
until
otherwise
indicated.
At this point
in the
process,
you have
only two
inputs: the
passbook
and the
cash. Place
these next
to each
other, with
one arrow
to the right,
indicating
that they
flow
together.
8. Your
option for
this step is
to use
either the
“Process” or
“Manual
Operation”
symbol.
Because the
customer
must hand-
write the
document
(rather than
it being
computer-
generated,
for
example),
the better
option is to
select the
“Manual
Operation”
symbol.

9. At this
point, the
cashier
processes
the deposit.
The first
step is to
ensure that
the
customer
has
submitted a
valid
deposit slip
containing
all required
information
(which is
listed in the
process
description)
. Since this
activity
serves as a
control
point as
well as a
process
point—the
process
cannot
continue if
the amount
is not
recorded,
for example
—you can
select either
a process or
an
inspection
symbol to
represent
the action.
Because
this step is
an
important
control for
the further
processing
of the
deposit, the
better
option is to
select the
Inspection
symbol.

10. There is
not
sufficient
space left
on the
sheet to
post the
next step,
even
though
there is
space below
the existing
line of
symbols.
Since
arrows
move from
left to right
and top to
bottom, you
cannot, by
convention,
draw a big
arrow from
the right
side of the
paper
across to
the left
margin in
order to
continue
the flow in
the space
remaining
on the
paper. This
means you
continue on
another
sheet of
paper.
Select the
“On Map”
connector
symbol
from the
list. This
symbol is
used twice:
first where
you
discontinue,
or break,
the process,
and second,
where you
resume it.
(If you have
two breaks
on a map,
you will
have four
On Map
symbols.)
To let the
reader know
which
connectors
go together
(form a
pair), insert
a letter or
number,
assigned
sequentially
, in each
symbol. The
first pair, for
example,
might be
labeled “A,”
while the
second pair
would be
labeled “B.”
The reader
knows
which one
of the pair
represents
the break in
the flow,
because
there are no
more
symbols
below or to
the right of
the
connector
symbol. The
reader
knows
which one
of the pair
represents
the
resumption
of the flow,
because
symbols will
appear
below or to
the right of
the
connector
symbol.

11. In this
step, the
cashier
counted the
cash and
found it to
be either
correct or
incorrect.
This results
in two
possible
courses of
action that
must be
shown in
the process.
Use the
decision
symbol.
Insert a
word or two
inside the
symbol to
reflect what
condition is
being
decided; in
this case,
you are
answering
the
question:
“Amount
correct?”
The
question
has to be
phrased so
that it can
be
answered
either “Yes”
or “No.”
Both
courses of
action are
mapped.
The
decision
symbol,
therefore,
has two
arrows
attached to
it, one
representin
g the “Yes”
course of
action, and
the other,
the “No”
course of
action.
a. NO:
This
course
of
action
repres
ents a
rewor
k loop.
The
custo
mer
has to
either
make
the
correc
tion to
the
deposi
t slip
and
initial
the
chang
e, or
make
up/rec
eive
the
differe
nce in
the
amoun
t of
cash
deposi
ted so
that it
will
equal
the
amoun
t
shown
on the
deposi
t slip.
After
the
correc
tion
proces
s, the
arrow
points
back
to the
decisi
on
diamo
nd
becau
se the
cashie
r now
decide
s
again
wheth
er the
actual
cash
counte
d
agrees
with
the
amoun
t
reflect
ed on
the
deposi
t slip.
If it
does,
then
the
proces
s
resum
es the
flow
from
the
“Yes”
arrow
leavin
g the
decisi
on
diamo
nd.
b.YES:
the
cashie
r has
answe
red
“Yes”
to the
questi
on,
“Does
the
amoun
t of
cash
receiv
ed
agree
with
the
amoun
t
shown
on the
deposi
t slip?”
The
proces
s
contin
ues to
the
next
step.
12. Up to
this point,
the three
inputs—the
passbook,
deposit slip,
and cash—
have been
flowing
together. It
is now time
to separate
their flow
and to show
storage of
the cash.
The deposit
slip and the
passbook
will
continue to
flow
together;
redraw and
label the
document
symbols for
each of
these inputs
next to
each other,
followed by
one arrow.
(To
emphasize
that these
documents
flow
together,
you can
overlap the
documents
as shown in
the
sample.)
Redraw and
label the
cash
symbol,
followed by
an arrow.
Use the
Storage
symbol, and
place it
after the
arrow
leading
from the
Cash
symbol to
show that
the cash
has been
dropped
from the
flow. If it
adds clarity
and not
clutter, you
can label
the storage
symbol (in
this case,
“Till”). Note
that the act
of the
cashier
placing the
money in
the till does
not need a
process
box; it is
sufficiently
clear to
show
through the
use of the
cash
symbol,
arrows, and
storage
symbol that
the cash is
going into
the till. This
illustrates
how the use
of symbols
can
eliminate
unnecessar
y and
redundant
process
boxes.

13. The
details of
the
inspection
performed
by the back
office
supervisor
can be
described in
the second
tier of the
map.
Alternativel
y, you can
shadow the
inspection
box (refer
to the “Tier
Your Maps”
section) and
create a sub
process
map that
describes
what the
back office
supervisor
actually
does.
14. This
step
demonstrat
es a
teaching
point
discussed
above.
Which point
is
represented
here? Hint:
Describe
what is
happening
here.

15. The
passbook/re
ceipt,
posted with
the deposit
(the
output), is
returned to
the
customer.
This is the
end of the
process.
Use the End
Process
symbol,
(which is
the same as
the Start
symbol) and
label it to
show that
the
Customer is
the
endpoint.
This now
completes
the first tier
of your
Process
Map.
16. In the
second tier,
record the
description
for each
step. This
task serves
a dual
purpose,
because it
forces you
to proofread
your
symbols to
make sure
that you
have
complied
with the
requirement
s described
in the
“Proofread
Map”
section
above. You
will also be
able to see
for yourself
whether
your
process
map makes
sense.
Alternativel
y, you can
complete
these
descriptions
as you draw
your
symbols;
you may
find,
however,
that
keeping up
with the
text while
also posting
symbols on
your map is
cumbersom
e.
17. Lastly,
since you
have used a
second
page, carry
forward the
Process Map
title and
number the
map pages
in the upper
right hand
corner.
 Cashier Process
of Savings
Customer

Deposit

Deposit-B1 (Ref-
Passbook Slip

Cash

1)
A
Prepared by: Your
Name
18 August 2005
(Ref-4)
 (Ref-2)

(Ref-3)

(Ref-1)
Cu C Cu C C
st u sto as a
o st m hi s
m o er er hi
er m ha gr e
en er nd ee r
ter c s ts c
s o de cu o
ba m po st u
nki pl sit o n
ng et sli m ts
ha e p, er c
ll s pa , a
be d ss th s
ari e bo en h
ng p ok, ch a
pa o an ec n
ss si d ks d
bo t ca de ti
ok sl sh po c
an ip to sit k
d . ca sli s
ca shi p t
sh. er. fo o
r a
na m
m o
e, u
ac n
co t
un o
t n
nu d
m e
be p
r, o
ag si
re t
e sl
m ip
en .
t
of
wr
itt
en
an
d
nu
m
er
ic
al
a
m
ou
nt
s.
 Cashier
Process of
Savings
Deposit-B1
A
Amount
?

(Ref-6)

Y
es
No
Passbook
Passbook

Deposit
Slip

(Ref-7)
Cash

Deposit
Slip

Customer
 (Ref-8)

(Ref-5)
 T
il Spindle
l

N Y C Ca CC
o: e a sh aa
C s: s ier ss
us C h po h hi
to a i st i e
m s es er
er hi r de r p
co e p po t a
rr r l sit hs
ec p a to as
ts o c cu ne
an s e st ks
d t so sp
ini s c m ca
tia tr a er’ us
ls a ss ss
co n h pa t b
rr s i ss oo
ec a n bo mo
tio c t ok ek
n ti il , r t
on o l. ca , o
de n lc pc
po t ul l u
sit o at a st
sli b es co
p a an i m
or n d ne
ad k’ po g r;
ju s st t t
st b s hh
s o ne ea
a o w dn
m k ba ek
ou s la ps
nt o nc oc
of f e, su
ca a ini it st
sh c tia so
te c ls li m
nd o pa pe
er u ss o r;
ed n bo nc
. t. ok su
ba p st
la i o
nc nm
e, de
th l r
en e le
pa f a
ss ov
es r e
pa es
ss nb
bo da
ok on
an f ki
d dn
de ag
po yh
sit b al
sli a l.
p. l
a
n
c
i
n
g
.
 Process
Mapping
Symbols

This
Start/End

symbol
is used
to
indicate
both
the
beginni
ng and
the end
 of your
progra
m.
Operation,
Process

Identifi
es an
activity
or task
in the
process
that
change
s an
output.
Usually
the
name
of the
activity
or task
 is
written
inside.

Manual
Manual
Operation

Operati
on. If it
is
importa
nt to
indicat
e that
an
operati
on is
manual
ly
perfor
med,
you can
use this
instead
of the
square
Operati
ons
 Process
symbol.

Document

Docum
ent:
indicate
s a
physica
l paper
on
which
informa
tion is
recorde
d.

The
docum
ent
symbol,
superi
mposed
on
itself,
indicate
s the
presenc
e of
multipl
e
copies
of a
docum
ent. At
left, for
exampl
e, a
docum
ent in
triplicat
e is
shown.
When a
docum
ent is
shown
in this
manner
,
usually
the
destina
tion of
each
Multi-part
document
copy is
traced.
Input

Input:
The
materia
ls,
equipm
ent,
informa
tion,
people,
money,
or
environ
mental
conditio
ns that
are
require
d to
carry
out the
process
.
Decision
Identifi
es a
decisio
n or
branchi
ng
point in
the
process
. Write
the
decisio
n
inside.
Label
each
path
emergi
ng from
the
Decisio
n
Diamon
d with
the
appropr
iate
options
,
usually
“yes”
or “no.”
Decisio
n
diamon
ds must
post a
questio
n.
Questio
ns
should
be
worded
as
specific
ally and
objectiv
ely as
possibl
e, so
that
everyo
ne will
interpre
t them
 in the
same
way.

Inspection/
Measurement
Indicat
es that
the
flow
has
been
stoppe
d in
order
to
evaluat
e the
quality
of the
output
or to
obtain
an
approv
al to
 procee
d.

Indicat
Delay

es
when
someth
ing
must
wait or
is
placed
in
 tempor
ary
storage
.

Transportation
Indicat
es
movem
ent of
the
output
betwee
 n
location
s.

Storag
e
Indicat
es that
an
output
is in
storage
.
Storage
differs
from
delay
based
on the
duratio
n of the
wait
and the
need
for
some
type of
authori
zation
to
retrieve
the
item.
A

An On-
Map
connect
or
indicate
s that
an
output
from
this
process
is
continu
ed
elsewh
ere on
the
process
map. It
is used
to
reduce
awkwar
d or
confusi
ng lines
across
a map.
In order
to help
the
reader
follow
the
path,
the
same
letter is
used in
a
corresp
onding
connect
or
posted
where
the
 process
resume
s.

Off-
H6

Page
connect
or: This
indicate
s that
the flow
continu
es on
another
process
map.
Record
the
page
index
(H) and
the
connect
or
number
(6)
inside
the
symbol
to show
where
the
reader
will pick
up the
flow.
Conver
sely, on
the
continu
ation
map,
record
the
page
index
(C) for
the
previou
s map,
but use
the
same
connect
or
number
(6) so
that the
reader
can
follow
the
path.
R R R RRT
e e e eeo
f f f f ft
 1 3 5 67a
&& &l
24 8
A2 2 1 12
c mm m. m8
t i i i 5i .
u n n n mn 5
as s i sm
l n i
T s n
i s
m
e
T11 0 11
a m. . mm5
r i 55i i
g n mmn n m
e i i i
t nn n
T s s
i
m
e

Improveme
nt
Opportunit
y = 8.5
 mins – 5
mins

= 3.5 mins

I
s N Y NNY
t
h
e
i
n
c
i
d
e
n
t
c
r
it
i
c
a
l
PC C C CC
au u u uu
r s s s ss
ti t t t t t
co o o oo
i- mmm- -
p e e e mm
a r r, r, e e
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t aa, ,
s s s CC
h h aa
i i ss
e e hh
r r i i
ee
r r
Visible
Furnishings
,
Appearanc
e,
Behaviour,
Simplicity
of process
Evidence
of staff
of staff
THE 4 I’s
OF BANK
MARKETIN
G
There are
four
distinctive
characterist
ics of
service,
which
create
challenges
and
opportuniti
es. They
are
commonly
known as
the four I’s
namely:

1. Intangibi
lity
2. Inconsist
ency
3. Insepara
bility
4. Inventor
y.

1.) Intangi
bility
It is that
characterist
ics of a
service
indicating
that it has
no physical
attributes
that a
person may
feel, hear,
taste
before they
buy it.
For
example, a
person who
is new to a
bank and
wants to
open up an
account in
the bank
cannot feel
or taste it
and
ascertain
whether
the bank is
good or
bad before
opening an
account. He
has to
experience
it, feel how
the service
is, how
humbly do
people or
the staff
members
behave
with him, is
his money
invested or
put in a
safe
account or
not. It is
only then
he would
come to
know about
the
services.
This could
be done
only from
the ‘trust’
that he
would have
built up, as
these
things
cannot be
inspected
before the
use.
Therefore,
most banks
now a days,
indulge in
“tangibilizin
g the
intangibles
” i.e. they
provide
tangible
clues to the
prospective
customers
like the
different
awards that
they have
received
for their
superior
services,
their
annual
records,
etc. this
helps the
customers
in selecting
the banks
more
easily.
2.) Inconsi
stency

It refers to
variability
or
heterogene
ity. In case
of a bank, a
new
customer
or a rarely
going
customer
may not
get the
same type
of service
as a regular
customer
may get.
This may
be the case
because
the staff
members
know the
person well
as he
comes
often but
they don’t
know that
person who
does not
come in
again and
again.
Also
another
point for
inconsisten
cy is that
there is
variability
in the
service
delivered
by different
people,
that is
services
delivered
differs from
people to
people.
Like in case
of a bank,
different
staff
members
would
provide
different
services. In
the bank, a
person may
have lot of
work and
may not
attend to a
customer .
On the
other hand,
some other
person with
the same
work may
attend him
with great
enthusiasm
. In order to
tackle this
inconsisten
cy aspect,
adequate
training
and
motivation
must be
provided to
the
employees.
This will
result in
higher
number of
customers
for the
bank,
higher
profits and
subsequent
ly lower
retention
rate.

Eg.
“PUNJAB
NATIONAL
BANK”
prides itself
for
providing
“crown of
quality for
customer
who is the
king” and is
an ISO
9002
certified
bank. Thus,
they will
have to
ensure that
their
service
quality
level is
always
consistent
and up to
the mark to
meet the
tall
expectation
s of their
customers.
3.) Inseparabi
lity

Inseparabil
ity is that
characterist
ics of a
service
indicating
that it
cannot be
separated
from
creator-
seller of the
product.
Many
services
are
created,
delivered
and
consumed
simultaneo
usly
through
interaction
between
customers
and service
producers.
This is a
source of
major
limitation
for the
bank. But
technology
has in a big
way helped
the banks
to cope
with this
problem.
Production
of services,
when it
comes to
banks can
be
performed
in the
following 3
ways:
(i) Co-
production:
In this case
both the
service
provider
and the
customer
work
together to
produce
services.
When a
customer
wants to
withdraw
cash from
the banking
premises,
then both
the
customer
and the
service
provider
needs to be
present.
(ii) Isolated
production:
It is that
part of
service that
is done
outside to
an
organizatio
n. Eg. Tele-
Banking.

(iii) Self
Service
production:
In this
case, the
customer
uses the
equipments
of the
service
providers
and self
serves it.
Eg. ATM.

4.) Invento
ry
Inventory
relates to
the
perishable
characterist
ics of the
service
marketing.
If a
customer
starts his
day at
eight in the
morning
and ends it
at four, but
if bank is
open only
from 9:00
a.m. to
1:00 p.m.
in the
afternoon,
then one
might not
be able to
attend it.
The
demand for
banking
services
also
fluctuates
by day and
hour. The
day before
the holiday,
weekend,
most
Mondays
and
Saturdays,
pension
and salary
days are
heavier
than
normal
banking
hours. So
service
faces a lot
of problem
from
inventory
as it cannot
be stored,
saved and
then used
later.
 RATER
Analysis
For Indian
Overseas
Bank
There are
many
reasons
why a
customer
should be
given
QUALITY
SERVICES.
The most of
them are:

1. Industry
being so
competitiv
e that a
customer
should be
given the
best
services
as they
have
many
competitor
s (the
company)
and if
even a
single
customer
is lost in
today’s JLT
world then
it very
difficult to
win back
the
customer.
2. Most of
the
customers
do not
complain
as they
just opt
out and do
get
satisfied
with
better
services
elsewhere.
When it
comes to
services,
there are
10 quality
dimensions
. Each of
the
dimensions
is of utmost
importance
since
human
element is
involved
and it
relates to
services.
But
Zeithaml,
Bitner and
Parsurama
n have
developed
a new and
concise
model by
clubbing
some
points. This
model
consists of
the
following
dimensions
:

 Reliabilit
y
 Assuranc
e
 Tangibilit
y
 Empathy
 Responsi
veness
RELIABILITY
 RESPONSI
VENESS
ASSURANC
E
EMPATHY
TANGIBILIT
Y
RELIABILI
TY

It is
defined as
the ability
to perform
the
promised
service
dependably
and
accurately.
In its
broadest
sense,
reliability
means that
the
company
delivers on
its
promises–
promises
about
delivery,
service
provision,
problem
resolution,
and pricing.
It is also
known as
the “No
Excuses”
service
delivery.

Indian
Overseas
Bank faces
stiff
competition
from many
other banks
within its
vicinity and
some of
these
banks are
foreign
banks. But
the existing
customers
have faith,
loyalty and
trust in this
bank. The
customers
are well
aware that
the bank
will provide
them back
the best
and reliable
services.
For e.g., no
person
likes to
wait to
withdraw
his/her
money. In
order to
correct this
problem,
Indian
Overseas
Bank has
ensured
that
whoever
comes in
for cash
withdrawal
will receive
his/her
cash within
five to ten
minutes.

ASSURAN
CE
Assurance
is defined
as
employee’s
knowledge
and
courtesy
and the
ability of
the firm
and its
employees
to inspire
trust and
confidence.
It includes
the ability,
knowledge,
genuinenes
s, and
honesty to
provide the
best
services to
the
customer
from the
frontline
staff. In this
dimension
the front
line staff is
more
important
rather than
the owner.

At
Indian
Overseas
Bank, every
customer
who comes
is treated
with utmost
care and
any
problem
that takes
place is
solved with
great
enthusiasm
. It assures
the
customers
coming up
to the bank
that the
money they
invest is
secure; the
interest
rate that is
being
provided to
them is at
par or
sometimes
even higher
as
compared
to other
banks.
Also, it
assures the
customers
that the
money they
have
invested
will be
returned to
them as
and when
required
with proper
interest. It
tries to
empower
their
customer
contact
people and
regularly
train them
in skills to
build trust
and loyalty
between
employess
and the
customers.
They have
assigned
some of
their staff
members
to build
relationship
s with the
customers
by getting
to know
them
personally.

TANGIBLI
TY
Tangibles
are defined
as the
appearance
s of
physical
facilities,
equipments
, personnel
and
communica
tion
materials.
All of these
provide
physical
representat
ions or
images of
the service
that
customers,
particularly
new
customers,
will use to
evaluate
quality.
 At Indian
Overseas
Bank, the
entire
premise is
air-
conditioned
. They have
computeriz
ed systems
in place
and
therefore
quick,
accurate
and
efficient
service can
be provided
to the
customers.
The tables
and chairs
are
convenientl
y located
for the
customers.
The
personnel
always
have a
cheerful
and helping
veneer and
are always
ready to
help out
the
customers.
The entire
place is
done up in
bright
colours and
thus the
customer
can
immediatel
y feel the
warmth
and the
radiance of
the place.
EMPATHY

Empathy is
defined as
the caring,
individualiz
ed
attention
the firm
provides its
customers.
The
essence of
empathy is
conveying,
through
personalize
d or
customized
service, the
customers
are unique
and unique
special.
The
empathy
shown by
the
employees
of the
Indian
Overseas
Bank is
good as
they are
always
polite
humble and
helpful.
There was
a case
where once
a customer
misplaced
Rs.
1,00,000
within the
premises of
the bank.
He
panicked
but the
bank
personnel
put him at
rest and
assured
him that
they would
locate the
same for
him. Since
he was a
regular
customer,
they knew
him very
well and
took the
situation
under
control.
They
quickly
located the
cash and
thus, the
customer
was
placated.
The bank
personnel
went out of
their way to
help this
customer
and thus
understood
his
predicamen
t. This bank
regularly
holds
seminars
and
training
workshops
so that
they can
understand
the
consumer
better and
thus serve
him better.

RESPONSI
VENESS
 Responsiv
eness is the
willingness
to help the
customer
and provide
him with
immediate
and fast
service.

The Indian
Overseas
Bank is
prompt at
providing
its
customers
with the
information
and
services
that they
seek. It is
extremely
prompt
when it
comes to
resolving
the
complaints
of the
customers.
The
customers,
in their
feedback
form,
mentioned
this as one
of the most
important
factor that
has
prompted
them to
continue
with this
bank.

All the five

dimensions
basically
aim at
serving the
customers
to the best
of their
ability,
giving them
quality
services
and if
things are
followed as
they are
demanded,
(i.e.,
according
to the
customers
demand)
then there
would be
no
problems in
facing any
type of
people. The
successful
service
organizatio
ns set up
speeds for
service
standards.
 MARKET
SEGMENT
ATION
An
organizatio
n is
supposed
to cater to
the
changing
needs of
customers;
it is only
natural that
all
customers
have their
own likes
and
dislikes.
They have
some
uniqueness
, which
throws a
big imprint
on their
lifestyles.
This makes
the task of
understand
ing a bit
difficult. It
has the
context
that we go
through the
problem of
market
segmentati
on in the
banking
service.

The study
of the
needs of
customers
invites a
plethora of
problems
since in
addition to
other
aspects;
the
regional
considerati
ons also
influence
the
hierarchy
of needs.
To be more
specific in
the banking
services,
the banking
organizatio
ns are
supposed
to satisfy
different
types of
customers
living in
different
segments.
The
segmentati
on of
market
makes the
task of
bank
professiona
ls easier. If
the market
segmentati
on is done
in a right
fashion, the
task of
satisfying
the
customers
is simplified
considerabl
y. The
modern
marketing
theories
advocate
the
formulation
of
marketing
policies and
strategies
for each
segment,
which an
organizatio
n plans to
solicit.
 The
marketing
segmentati
on is based
in the
principle of
divide and
rule. If we
divide the
market into
different
segments,
the size of
market is
made small
and the
process of
study is
found
convenient.
We find
market
segmentati
on division
and
subdivision
of a market
based on
considerati
ons. The
bank
professiona
ls have to
segment
the market
in such a
way that
the
expectation
s of all
potential
customers
are studied
in a right
perspective
and the
marketing
resources
are
developed
to fulfill the
same. The
marketing
efforts can
be made
more
proactive if
the process
and bases
of
segmentati
on are
right.
 It is
essential
that the
bank
professiona
ls assign
due
weightage
to the
difference
that we find
in the
market
behavior
due to
geographic
al, age,
sex,
nationality,
educational
background
, income
classes,
occupation,
social and
other
considerati
ons. If they
overlook or
underestim
ate key
bases while
segmenting
, the study
results
can’t be
proactive
to the
formulation
of creative
marketing
decisions.
This makes
it essential
that the
bank
professiona
ls are well
aware of
the criteria
for market
segmentati
on. The
agriculture
sector,
industrial
sector,
services
sector,
household
sector are
found
important
in the very
context.
The gender
segment is
found
important
no doubt
but we
can’t
underestim
ate
institutional
and
professiona
l segments.
Since the
banking
organizatio
ns serve
different
sectors and
segments,
the
segmentati
on should
be done
carefully.
IMPORTA
NCE OF
SEGMEN
TATION

 Instrume
ntal in
explorin
g
opportu
nities:
We find
market
segmenta
tion very
much
effective
in
exploring
the
profitable
opportunit
ies. It is
well
known to
us that
while
segmenti
ng, the
market is
divided
into
different
groups
and sub-
groups
and this
simplifies
the
process of
studying
and
understan
ding the
customers
in a right
perspectiv
e. If we
know
about the
rural
segment,
the
opportunit
ies are
explored
to the
rural
areas. If
we know
about the
women
segment,
the
opportunit
ies are
identified
in that
area. If
we know
about the
low-
income
group, the
opportunit
ies are
identified
in that
group.
Thus the
segmenta
tion helps
the bank
profession
als in
exploring
the
profitable
opportunit
ies.
 Instrume
ntal in
designin
g a
sound
marketin
g
strategy:
We can’t
deny that
market
segmenta
tion
makes it
easier to
formulate
a sound
strategy.
Since the
banking
profession
als are
aware of
the
changing
needs and
requireme
nts of a
segment,
the
marketing
resources
can be
developed
in tune
with the
needs and
requireme
nts of a
segment.
The
formulatio
n of a
package
is found
significant
and the
bank
profession
als can do
it
successful
ly on the
basis of
market
segmenta
tion. The
promotion
al
measures
can be
satisfied
in the
face of
receiving
capacity
of a
particular
segment.
The
pricing
strategy
can be
made
operation
al and the
sales
promotion
measures
can be
made
productiv
e.
 Helpful
to the
policy
planners
: In
addition,
the policy
makers
also find
segmenta
tion since
they are
well
aware of
the
emerging
trends in
the
business
environm
ent. They
get
detailed
informatio
n about
the
changing
needs and
requireme
nts of a
segment.
The
planning
is an on
going
process.
The
banking
profession
als
transmit
necessary
informatio
n to the
policy
planners,
which
simplifies
the
process of
making a
sound
policy.
 Enrichin
g the
market
resource
s: In
addition
to other
aspects,
we find
segmenta
tion
instrumen
tal in
enriching
the
marketing
potentials
. If we
know
about the
preferenc
e, needs,
requireme
nts,
attitudes,
lifestyles
it is found
easier for
us to
develop
the
marketing
resources
accordingl
y. This in
a natural
way
makes it
convenien
t to
develop
marketing
resources.
The
process of
innovatio
n can be
activated.
The
services,
the
promotion
al
measures,
the
pricing
tool and
the
process of
offering
can be
made
more
competiti
ve. The
developm
ent of
world-
class
marketing
resources
thus
makes it
convenien
t to
influence
the
impulse of
prospects.
The bank
profession
als find it
easier to
get the
positive
results for
their
productiv
e
marketing
efforts.
CRITERIA
FOR
SEGMENT
ATION

Segmentati
on in a
right
fashion
makes the
way for
profitable
marketing.
This helps
policy
planners in
formulating
and
innovating
the policies
and at the
same time
also
simplifies
the task of
banking
professiona
ls while
formulating
and
innovating
the
strategic
decision.
The
following
criterion
makes the
segmentati
on right.
ECONOMI
C SYSTEM

An
important
criterion for
market
segmentati
on is the
economic
system in
which we
find
agricultural
sector,
industrial
sector,
services
sector,
household
sector, and
rural sector
requiring
the weight
age while
segmenting
.

A).
AGRICULT
URAL
SECTOR:
In the
agricultural
sector,
there are
four
categories
since the
needs of all
categories
can’t be
identical.
 The
mechanizat
ion of
agriculture,
the
improved
or scientific
system of
cultivation,
the help of
nature, the
magnitude
of risk, the
availability
of
infrastructu
ral facilities
influence
the level of
expectation
s vis-à-vis
the needs
and
requiremen
ts. The
banking
organizatio
ns are
supposed
to know
and
understand
the
changing
requiremen
ts of
different
categories
of farmers.
B).
INDUSTRI
AL
SECTOR:
The
banking
organizatio
ns are
supposed
to have an
in-depth
knowledge
of the
changing
needs and
requiremen
ts of the
industrial
sector. The
large –
sized,
small- sized
co-
operative
and tiny
industries
use the
services of
the banks.
The
expectation
of all the
categories
can’t be
uniform.
The
banking
organizatio
ns are
supposed
to have an
in-depth
knowledge
of the
changing
needs and
requiremen
ts of the
industrial
segment.
The
emerging
tends in
competition
, the
pressure of
inflation,
the use of
sophisticat
ed
technologie
s, and the
business
regulations
are some of
the
important
aspects
influencing
the
hierarchy
of needs.
C).
SERVICES
SECTOR: It
is an
important
sector to
the
economy
where the
banking
organizatio
ns get
profitable
business.
The two
categories
of
organizatio
ns such as
profit-
making and
non- profit
making are
found
important
in the very
context.
 PROFIT MAKING ORG.
BANK INSURANCE,
TRANSPORT HOTEL,
TOURISM, PERSONAL
CARE, CONSULTANCY
ELECTRICITY
PERSONAL

SERVICE MULTIPLE
SEGMENT SEGMENTS

NON PROFIT MAKING ORG.

EDUCATION, HHHOSPITAL,
RELIGIOUS
POLITICAL AND SOCIAL
WELFARE.
 The
banking
organizatio
ns need to
identify the
changing
needs and
requiremen
ts of the
services
sector with
the
frequent
use of IT
and with
the
mounting
pressure of
inflation
and
competition
, we find a
change in
the
hierarchy
of needs.
HOUSEHO
LD
SEGMEN
T

This also
constitutes
an
important
sector
where
different
income
groups
have
different
needs and
requiremen
ts. In the
below
figure we
can see the
different
segments
of
household
sector.
A).
HOUSEHO
LD
SEGMENT:
The high
income
group,
middle
income
group,
subsistence
level group
and
marginal
income
group have
different
hierarchy
of needs
which
influence
the level of
their
expectation
s.

B).
GENDER
SEGMENT:
In the
gender
segment
we find
males and
females
having
different
needs and
requiremen
ts. The
banking
organizatio
ns are
supposed
to identify
the level of
expectation
s of both
sexes as
shown in
the below
figure.
 House
wives

Gende Sub-
r Worki
Segme
ng nt
Segme
Ladies
nt
Some of
the women
are
housewives
and
therefore
they have
different
needs and
requiremen
ts whereas
some of
them are
working
ladies
having
different
needs and
requiremen
ts.
PROFESSI
ON
SEGMEN
T

In the
profession
segment,
we find
different
categories
of
professions
and
therefore
we find a
change in
their needs
and
requiremen
ts. As
shown in
the figure
below:
Technocra
ts
Bureaucr
ats
Corporat
e
Executive
s
Intellects
 Profes
sion
Segment
Public/
Private
Formal/Info
rmal
 The
technocrats
,
bureaucrat
s,
corporate
executives,
intellects,
white-collar
and blue
collar
employees
have
different
needs and
requiremen
ts and
therefore
the banking
organizatio
ns should
know their
expectation
s.
INSTITUTI
ONAL
SECTOR

In this
sector we
find
different
categories
of
organizatio
ns. Some of
the
organizatio
ns are
known as
charitable
organizatio
ns, some of
them are
cultural/
social
organizatio
ns, some of
them are
industrial
and many
of them are
profit
making and
many are
philanthrop
ic and
many of
them are
related to
trade and
commerce.
It is natural
that the
needs and
requiremen
ts vis-à-vis
the level of
expectation
s cant be
identical in
all cases.
To satisfy
and to
increase
the market
share it is
imperative
that the
banking
organizatio
ns are
familiar
with
changing
needs and
requiremen
ts. The
emerging
trends in
the social
transformat
ion process
determine
the
hierarchy
of needs.
 Charitable
Trusts
Individual
Originations
Chamber of
Commerce
Trade and
Commerce
Health/Educat
 In
stitutional
Segment
Sub-
Segment
Complaint
Handling-
 HDFC
Bank
Whatever
a service
firm may
do for
customer,
even the
best firms
are going
to find
themselves
facing
complaints
from
customers
who feel
that they
are not
being
treated
fairly. In
dealing
with these
situations,
it is
important
to know
how to
diffuse
them and
then turn
them into
positive
experience
s for all
involved.
However,
when it
came to
complaint
handling,
HDFC Bank
turned to
the airline
industry for
inspiration.
Impressed
by the way
an airline
takes care
of its
customers
from the
time they
enter the
airport till
they collect
their
luggage
after
landing, the
bank maps
the
customer
flow at its
branch. The
first change
it brought
to its
branches
was the
'May I help
you' desk
at the
reception
to guide
the
customer
to the right
counter.
Next, it laid
down
efficiency
parameters
for each
sub-
process
carried out
at the
branch.
"We are
constantly
fine-tuning
our
processes
to reduce
time taken,
especially
on routine
tasks. We
monitor
how long it
takes for
customer
transaction
s as well as
complaints
to get
processed".
 The bank's
'moments
of truth'
surveys too
are
modeled
after the
airline
industry's
satisfaction
surveys.
These are
given to
customers
just before
they exit a
branch
after a
transaction.
HDFC
Bank
introduced
changes for
consumer
convenienc
e, starting
with the
reception
area and
with good
reason. A
traditional
branch has
always
been an
infrequent
user's
nightmare:
cryptic
boards are
placed on
counters
leaving one
as
confused
as ever,
bank
officials sit
behind
wire-
meshes
making it
impossible
to seek any
guidance,
and the
long
queues are
frustrating,
all the
more so
when you
realize you
stood in the
wrong long
line. But
HDFC
branch
models are
trying to
address
this
confusion,
as well as
the jail-like
counters.
HDFC
believes
that unless
they
change to
create
convenienc
e for that
customer,
and add to
his brand
experience,
they will
fail to
capture the
loyalty
they're
trying so
hard to
earn. And
unless they
achieve
this loyalty
and
increase
their share
of the
customer's
wallet
substantiall
y, the
majority of
their retail
customers
will
continue to
be
unprofitabl
e for them.
COMPLAI
NT
RESOLUTI
ON
MODEL
(CRM)
HDFC
bank takes
complaint
not as a
mere
complaint
but as an
issue. They
have got
this unique
CRM
technique
where in if
there is any
complaint
either by
an
employee
or a
customer in
any branch;
it will be
looked into
and
resolved in
24 hours.
Within 24
hrs, if the
branch
manager
does not
handle the
complaint it
goes to the
higher
authority.
And then
again if the
same
complaint
is not
handled in
12 hours by
the higher
authority it
goes to the
Managing
Director.
Once if it
reaches the
MD, either
the branch
manager is
sacked or
necessary
action is
taken
against
him.
 CASE
STUDY-I

Phase I
The
reason why
the
customer
decided to
open an
account
with ABC
Bank was
their
constant
boasting of
being the
best online
trading
bank in
India. So
one day the
customer
called their
customer
center to
open an
account.
The lady
was very
polite and
after
talking with
her for
some 5
minutes,
she told the
customer
that one of
their
representat
ives will
visit her
soon. She
gave the
lady her
office
address
and asked
her to send
the person
to her
office. The
next day
the
customer
gathered
all the
necessary
documents
to open an
account. It
took
exactly a
week for
their
representat
ive to turn
up and on
her
inquiring
about the
delay, he
gave her a
silly reason,
like he was
busy with
many more
clients and
so could
not come
on the
promised
date. She
felt that the
employees
attitude
towards the
customers
depend
upon their
mood on
that
particular
day.

Phase II
 Within a
month the
customer
got a letter
from the
bank
saying that
her account
has been
activated.
So the next
day she
went to her
nearest
branch to
deposit a
cheque. As
she
entered
inside, it
was over
crowded
with people
in each and
every
corner;
most of
them were
the
employees
themselves
. In most of
the
branches
that she
had visited
in last 5
months,
she had got
the feeling
that the
branches
were over
employed.
Phase III

After
going
through all
this she
decided to
use their
Phone
banking
facilities,
and it’s did
not turn out
any better
than
Central
Railway
Inquiry.
Every hour
you find
some
different
people to
answer
your query,
and most of
the time
you are put
on HOLD.
Phase IV

They used
to claim
that their
trump card
was the
ATM. To
some
extent it
was ok but
what the
customer
noticed is
that most
of the ATMs
are located
in a very
isolated
place and
its down
during
evening
time.
The Finale

Here is
something
that made
the
customer
to finally
say
GOODBYE
to ABC.
Initially
they told
her that
their share
trading
service is
free, so she
did most of
her trading
through
ABC direct.
The service
was not of
much help.
Just a week
from then,
she got a
mail asking
her to pay
for using
share-
trading
service.
Again she
got in
touch with
the
concerned
person and
informed
them about
the mail
and also
that she
was no
more
interested
in
continuing
her account
in ABC.
Then they
informed
her that
this mail is
not for
current
year it’s
the
advance
payment
for the
coming
year. In the
end she
had to pay
them for
the service,
which she
never
utilized.
She
stopped
using ABC
Bank and
asked all
her
colleagues
never to
have an
account
with the
bank after
her
experience.
 ANALYSI
S OF THE
CASE

As can be
seen in this
case, there
is a definite
failure in
the service
delivery.
Now apply
the
different
dimensions
of service
quality to
this
particular
case and
find out
reasons for
the failure.

RATER
Reliability
: The lady
assured the
customer
that the
representat
ive would
visit her the
next day.
Instead he
took a
week to
turn up.
Also
instead of
apologizing
to the
customer,
he gave the
excuse that
he was
busy with
other
clients and
so he could
not attend
to him. In a
service
industry
the
customer is
the king
and you
should
make each
customer
feel special.
As can be
seen, the
attitude of
the
employees
in the bank
is
indifferent.
In fact, the
customer
concludes
his review
by saying
that the
employee’s
attitude
towards the
customer
depends on
their mood.
This shows
tremendou
s
inconsisten
cy in
service
delivery.
Assurance
: Here the
staff has
failed to
live up to
its promise.
Instead of
coming in a
day as
promised,
the
representat
ive came
after a
week. He
didn’t even
apologize
for his
mistake. As
a result the
customer
was
inconvenie
nced. The
customer
was angry
that the
bank made
false
promise
just to woo
customers.
Also she
was told
that the
share
trading
service was
free.
Afterwards
she was
made to
pay for the
service,
which she
had hardly
used.
Tangible:
The
tangible
cues here
will be the
facilities
that they
provide,
like the
phone
banking
and the
ATM. The
customer
here
describes
the ATM
service as
okay. She
says that it
works only
sometimes.
She
compares
their phone
banking
facility to
the central
railway
enquiry,
where
every hour
different
people
come to
answer his
query and
most of the
time he
was put on
hold.

Empathy:
From the
case, it
seems that
they are
not
understand
ing towards
the
customer
grievances.
All the
branches
this
customer
has gone to
have been
very
crowded.
There was
no effort on
the part of
the
employee’s
to help this
customer.
Also in the
case of
their phone
banking,
they make
the
customer
wait for
long
periods of
time
without
answering
their query.
Responsiv
eness: In
the case of
this
customer,
the bank
and its staff
were not
able to
respond
quickly.
When the
particular
representat
ive was not
able to
reach the
next day,
the bank
should
have sent
another
representat
ive in his
place. Also
they should
not have
charged
this
customer
for using
the share
trading
service,
especially
since it was
a mistake
on their
part.
 Service
Recovery

Service
recovery
pertains to
the actions
taken by an
organizatio
n In
response to
a service
failure.
When a
customer
complains
he expects
3 types of
fairness.
Outcome
fairness:
In this case
the
customer
decided to
use the
share
trading
service as
she was
told it was
free. She
did not find
the service
of much
help. In the
end she
had to pay
for a
service,
which she
hardly
used. The
bank
should not
have
charged
the
customer
for this
service
especially
since it was
a mistake
on their
part.

Procedura
l fairness:
When the
customer
entered the
bank to
deposit a
cheque,
she found it
overcrowde
d. There
was no
effort made
by any of
the
employees
to help this
customer.
Using the
phone
banking
facility was
also not of
much help.

Interactio
n fairness:
After
promising
the
customer
that the
representat
ive would
come the
next day,
he came
after a
week. After
committing
this
mistake, he
made no
effort to
apologize
for it.
Instead he
gave the
excuse that
he was too
busy with
other
clients to
attend to
him.

Fish-Bone
 CUSTOMER
EQUIPMENT
FRONT
PROCEDUR
E
DELAY IN

SERVICE
 OTHERS
MATERIAL
SUPPORTIN
G
INFORMATI
ON
Equipmen
t: - Phone
banking
system of
ABC Bank
was really
bad. Every
hour there
was a new
person on
the phone
and most of
the time
the
customer
had to wait
as the
phone was
kept on
hold. The
customer
had some
difficulty
using the
ATM
machines,
as they
were
located on
isolated
places,
which was
very
inconvenie
nt for the
customer
to access.
Secondly,
during the
evening
time they
were not
working.
The
customer
had been
told about
that the
share
trading
facility was
free but
later on
they
charged for
the next
year’s
trading in
advance.
So, there
was
certainly a
failure in
equipments
.
Material:
The
material
aspect of
HDFC bank
would be
its ATM and
Phone
Banking
services
that are
described
by the
customer
as a “total
flop” and a
waste of
time. This
shows a
complete
material
failure, as
the
services
are not up
to the
extent of
the
customer’s
perception
and
expectation
s.
Front line
staff: The
customer
has rated
employee’s
attitude
towards
him as
‘depends
upon the
mood’. In a
service
industry
this is not
acceptable,
whatever
might be
the mood
his attitude
towards the
customers
should be
good. The
front line
staff’s job
is to make
the work
easier for
the
customer
and not to
complicate
further
which is not
the case in
this
particular
case study.
Supportin
g
Activities:
The
supporting
staff in this
case would
include the
front desk
receptionist
who fails to
act in haste
and inform
the same
to the
concerned
representat
ive. Also,
the
customer is
not
informed
about the
different
service
charges,
which the
back office
should
have
notified by
sending
some mails
or
notification
s

Procedure
: In the
second
phase the
customer
went to the
bank to
deposit
cheque,
she found
out that the
place was
very
crowded
and there
were no
proper
signboards
for the
counters to
guide her.
Informatio
n: In phase
1, the
customer
was told
that the
bank
representat
ive would
be coming
to his place
in a day’s
time. But
these
representat
ives came
after a
week. So
there was
wrong
information
given on
the part of
the
customer.
Again in
the final
phase, the
customer
was not
given any
information
about the
next year’s
share
trading
charges
and
charged
her in
advance.
Company
Profile
 ICICI Bank
is India's
second-
largest
bank with
total assets
of over Rs.
1 trillion
and a
network of
about 540
branches
and offices
and over
1,000
ATMs. 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,
asset
manageme
nt and
information
technology.
ICICI Bank's
equity
shares are
listed in
India on
stock
exchanges
at Chennai,
Delhi,
Kolkata and
Vadodara,
the Stock
Exchange,
Mumbai
and the
National
Stock
Exchange
of India
Limited and
its
American
Depositary
Receipts
(ADRs) are
listed on
the New
York Stock
Exchange
(NYSE).
ICICI Bank
was
originally
promoted
in 1994 by
ICICI
Limited, an
Indian
financial
institution,
and was its
wholly
owned
subsidiary.
ICICI's
shareholdin
g 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
amalgamati
on 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
Governmen
t of India
and
representat
ives of
Indian
industry.
The
principal
objective
was to
create a
developme
nt financial
institution
for
providing
medium-
term and
long-term
project
financing to
Indian
businesses.
In the
1990s, ICICI
transforme
d its
business
from a
developme
nt 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.
After
considerati
on of
various
corporate
structuring
alternatives
in the
context of
the
emerging
competitive
scenario in
the Indian
banking
industry,
and the
move
towards
universal
banking,
the
manageme
nts of ICICI
and ICICI
Bank
formed the
view that
the merger
of ICICI
with ICICI
Bank would
be the
optimal
strategic
alternative
for both
entities,
and would
create the
optimal
legal
structure
for the ICICI
group's
universal
banking
strategy.
The merger
would
enhance
value for
ICICI
shareholder
s through
the merged
entity's
access to
low-cost
deposits,
greater
opportuniti
es for
earning
fee-based
income and
the ability
to
participate
in the
payments
system and
provide
transaction
-banking
services.
The merger
would
enhance
value for
ICICI Bank
shareholder
s through a
large
capital
base and
scale of
operations,
seamless
access to
ICICI's
strong
corporate
relationship
s built up
over five
decades,
entry into
new
business
segments,
higher
market
share in
various
business
segments,
particularly
fee-based
services,
and access
to the vast
talent pool
of ICICI and
its
subsidiaries
. In October
2001, the
Boards of
Directors of
ICICI and
ICICI Bank
approved
the merger
of ICICI and
two of its
wholly
owned
retail
finance
subsidiaries
, ICICI
Personal
Financial
Services
Limited and
ICICI
Capital
Services
Limited,
with ICICI
Bank.
Shareholde
rs of ICICI
and ICICI
BANK
approved
the merger
in January
2002, by
the High
Court of at
Ahmedaba
d in March
2002, and
by the High
Court of
Judicature
at Bombay
and the
Reserve
Bank of
India in
April 2002.
Consequent
to the
merger, the
ICICI
group's
financing
and
banking
operations,
both
wholesale
and retail,
have been
integrated
in a
singularly.
CASE
STUDY-II
The
Customer’
 s
Associatio
n with the
Bank

The
customer
became an
ICICI bank
customer in
1998 when
he became
an NRI
customer.
Things
were rather
mundane
and
normal.
Compared
to the other
big
nationalize
d banks
and
Citibank,
the
customer
felt ICICI
Bank was
the best
and got
some great
feedback
from
friends and
relatives
alike. His
initial
relationship
was
excellent.
This
continued
till 2001. All
the
facilities
were of the
highest
grade.
Their email
follow-ups,
request
resolution,
customer
service and
everything
they served
were of the
highest
grade. They
also baffled
him by
calling him
overseas
with regard
to certain
transaction
s and
request.
So, he
would have
given a 5
star rating
in 1998.
But it did
not
continue
for long.
What has
changed
since
then?

This bank
grew leaps
and bounds
ever since
the IPO in
1998 as
well as the
NYSE listing
in 2000.
The
numbers of
customers
were huge
and the
merger
with Bank
of Madura
added to
the woes of
the service.
As there is
a saying
“Quality is
inversely
proportiona
l to
Quantity”,
ICICI bank
yielded to
this very
true
philosophy.
The
customer
sent a
letter to
their NRI
center
regarding a
change of
address for
his NRI
account.
This took
considerabl
e amount
of time
since ICICI
misplaced
the letter
twice and
he head o
mail the
letter
again. This
frustrated
and
infuriated
the
customer.
Then, they
sent a
courier to
the
customer
but at the
wrong
address.
They sent
one to the
wrong
address,
and other
one to the
right
address but
with the
wrong
password
for the
bank
account.

Snippets
from mail
correspond
ence that
took place
between
the
customer
and the
banking
personnel
are
provided as
follows
providing
us with an
insight:
If doing an
address
change
should take
such a long
time and if
your
processes
are so
sterner and
baseless
with a
mediocre
customer-
care follow-
up, I
definitely
need to
reconsider
my options.
I had
opened an
account in
ICICI
though I
had quite a
few options
for an NRI
account, in
hope of
having an
excellent
customer
service.
I’ll have to
rethink if
my
decision
was
correct. I
have
received
similar
complaints
from my
friends as
well stating
that the
’’Quality of
ICICI has
gone down
with
Quantity’’, I
would
definitely
like to talk
to some
manager
for NRI
Services,
for the
same
matter. Re
vert to me,
if you still
have any
queries.
Mr. XYZ

The Reply
NRI Cell
<nri@icicib
ank.com>
wrote:
Dear Mr.
XYZ,
We
apologize
for the
delay in
our
response.
With
reference
to your
mail we
would like
to inform
you that
we have
not
received
your letter
for address
change.
Blah Blah
Blah………
 In this
letter
instead of
requesting
the
customer
for sending
the letter
again and
apologizing
to him, the
bank
authority
says that
the
customer
hasn’t send
any letter
at all thus
making it a
CRITICAL
INCIDENC
E for the
customer.
Customer’
s Final
Conclusi
on of the
Bank

All things
considered,
the ICICI
bank is far
ahead of
many of
the
nationalize
d banks. As
an NRI
customer
and a
person
used to
excellent
banking for
quite
sometime, I
feel that
this bank
has some
mediocre
facilities
and
service. I
will be
reevaluatin
g the
opinion at a
later point.
I am just
having an
account
after many
unpleasant
services
and
incidents.

Will the
customer
recommen
d ICICI
Bank to
anyone? A
big NO at
least for
the time
being until
the bank
makes
efforts to
upgrade
their
services.
 Case
Study
Analysis:
RATER

R:
Reliability
The Case
Study
shows that
the bank
was
extremely
reliable and
trustworthy
initially. But
after the
surge and
swelling of
customers,
inefficiency
has crept in
r to the
bank. The
bank is
unreliable
only on the
basis of the
service that
it provides,
but when
the
question of
financial
reliability
arises the
bank
seems to
be in very
sound and
secure.
A:
Assurance

The
customer
Mr. XYZ
was rest
assured
about the
fact that
the bank
was very
professiona
l in its
approach.
But after
the bank
conducted
the
mistakes of
sending the
password a
t the wrong
address
and then
sending the
wrong
password
at the right
address
made sure
that the
bank lost
the dignity
of being a
financial
institution
that
provides
assurance.
This had a
deep
impact on
the
customer.

T:
Tangibilit
y
As we can
see when
the
customer
Mr. XYZ
wanted to
change the
address for
his NRI
account he
had to send
3 mails to
the bank
out of
which 2 of
them were
lost by the
company,
later on the
first
confirmatio
n was sent
at the
wrong
address
and the
second
confirmatio
n was sent
at the right
address
with the
wrong
password.
The whole
process
took
around 2
months,
which is a
very long
time to
take by any
standards.
E:
Empathy
The bank
was very
co-
operative
and
sympatheti
c towards
customers
before the
phase of
their IPO,
the best
example of
this would
be that the
company
also called
its NRI
customers
overseas
for certain
transaction
s this
showed
that the
bank was
indeed
very good
towards its
customers,
but after
the IPO, the
bank just
lost all
loyalty it
earned, it
took the
bank
almost 2
months to
change the
address
and when
the
customer
Mr. XYZ
wrote a
mail to the
bank for its
mediocre
service
provided
the bank in
reply
blamed the
customer
for its
mistake.
Thus, ICICI
Bank
performs
miserably
on this
count too
and thus
loses the
customer.

R:
Responsiv
eness

The
company
lost this
quality
after the
IPO. The
company
took almost
2 months
to change
the address
and only
after
sending 3
mails was
the job
done, the
bank
manageme
nt was also
very
unresponsi
ve in
apologizing
to its
customers.
BIBLIOGRA
PHY
 SERVICE
S
MARKETI
NG–
M.K.RAMP
AL &
S.L.GUPT
A
 SERVICE
S
MARKETI
NG–
VALARIE.
A.ZEITHA
ML &
MARY JO
BITNER
 SERVICE
S
MARKETI
NG–
CHRISTOP
HER
LOVELOC
K
 MARKET
ING
MANAGE
MENT–
PHILIP
KOTLER
 BUSINES
S TODAY
(JULY 31’
2005)
 ANALYS
T (MARCH
2003)
 www.icici.
com
 www.hdfc
.com
 www.indi
anoverse
asbank.co
m
 THE
TIMES OF
INDIA
 BUSINES
SWORLD