SERVICE MARKETING

What is service? Service is any act or performance that one party can offer to another that is essentially intangible and does not result in any ownership -PHILIP KOTLER Definition: A service is an intangible product involving a deed, performance, or an effort that cannot be physically possessed. Dominant component is intangible. What is Marketing? Definition It is the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired product/service more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys wellbeing Introduction: A service is the action of doing something for someone or something. It is largely intangible (i.e. not material). A product is tangible (i.e. material) since you can touch it and own it. A service tends to be an experience that is consumed at the point where it is purchased, and cannot be owned since is quickly perishes. A person could go to a caf one day and have excellent service, and then return the next day and have a poor experience. So often marketers talk about the nature of a service as: Inseparable - From the point where it is consumed, and from the provider of the service. For example, you cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product, not a service).

Perishable - in that once it has occurred it cannot be repeated in exactly the same way. For example, once a 100 meters Olympic final has been run, there will be not other for 4 more years, and even then it will be staged in a different place with many different finalists. Variability- since the human involvement of service provision means that no two services will be completely identical. For example, returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction, or speediness of work. Right of ownership - is not taken to the service, since you merely experience it. For example, an engineer may service your air-conditioning, but you do not own the service, the engineer or his equipment. You cannot sell it on once it has been consumed, and do not take ownership of it.

Services Marketing Mix

Traditional Marketing Mix: All elements within the control of the firm that communicate the firms capabilities and image to customers or that influence customer satisfaction with the firms product and services: Product Price Place Promotion

An expanded marketing mix for services People: All human actors who play a part in service delivery and thus influence the buyers perceptions: namely, the firms personnel, the customer, and other customers in the service environment. Physical Evidence: The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service Process: The actual procedures, mechanisms, and flow of activities by which the service is deliveredthe service delivery and operating systems.

7 Ps of Service Marketing

Product Place o Physical good o Channel Type features o Quality Level o Accessories o Packaging o Warranties o Product Line o Branding o Exposure o Intermediaries o Outlet Locations o Transportation o Storage o Managing Channels

Promotion Price o Promotion Blend o Flexibility o Sales Promotion o Publicity o Internet/Web Strategy o Advertising -- Media Types -- Types of Ads o Salespeople -- Selection -- Training -- Incentives o Price Level o Terms o Differentiation o Discounts o Allowances

People o Employees -- Recruiting -- Training -- Motivation -- Rewards -- Teamwork o Customers -- Education -- Training

Physical Evidence o Facility Design o Equipment o Signage o Employee Dress o Other Tangibles -- Reports --Business Cards -- Statements -- Guarantees

Process o Customer Involvement o Number of Steps -- Simple -- Complex o Flow Activities -- Standardized -- Customized of

Service Sector Marketing (BANKING)

Banking Services INTRODUCTION: A bank is an institution that deals with money and credit. Different people understand meaning of a bank in different ways. For a common man bank means a storehouse where money is stored; for a businessman it is a financial institution and for a day to day customer it is institution where he can deposit his savings. In reality banks are service organization selling banking services. Banks play an important role in the economy of any country as they hold the savings of the public. Provide means of payment for goods and services and provide necessary finance for development of business and trade. Thus bank is a link in the flow of funds from savers to the users. Hence they should render efficient customer service in order to retain the present customers and also to attract the potent customers. In the past the banks did not find any attraction in the Indian economy because of the low level of economic activities and little business prospects. Today we find positive changes in the National business development policy. Earlier, the money lenders had a strong hold over the rural population. This resulted in exploitation of small and marginal savers. The private sector banks failed in serving; the society. This resulted in the nationalization of 14 commercial banks in 1969. Nationalization of commercial banks paved ways for the development of Indian economy and channelized financial resources for the upliftment of weaker sections of the society. In 1980, the government was induced to nationalize more commercial banks. There was a basic change in the banking concept with a beginning in the Nationalization of big Commercial banks. The involvement of public sector banks transformed the Indian economy. It was felt that bankers review their services not only as financial intermediary but also a pacesetter. Adequate financial resources are required for completing welfare projects. The entrepreneurs need large-scale credit facilities on liberal terms and conditions, an individual has developed new hopes and aspirations from banks and the rural population and backward regions strongly claim their right for a sound and balanced development. MARKETING OF BANKING SERVICES

Marketing of banking services is concerned with product, place, distribution, and pricing and promotion decisions in the changing, socio-economic and business environment. It means organizing right activities and programmes at the right place, at the right time, at a right price with right communication and promotion. The causes of Bank Marketing can be seen as: a) Rising customer needs and expectations due to improvements in general standard of living. b) Entry of foreign and private sector banks in India. c) Economic liberalization of Indian economy. d) Phenomenal growth of competition due to economic liberalization. e) Rise in the Indian middle class with considerable resources. f) Government intervention in protecting the interests of consumers. The users of banking services or the prospects play a very significant role in the formulation of overall marketing strategies. The bank marketing activities are concerned with the designing of product strategies keeping in view the needs and requirement of prospects. It is also related with the place decisions i.e. location of a bank at suitable points. It has the following unique features: (a) Intangibility (b) Inseparability (c) Variability and (d) Perishability

CHARACTERISTICS OF SERVICES With reference to banking:

1. Intangibility: Financial services are generally intangible, but the service providers go to considerable lengths to tangibilise the service for customers. Regular bank statements, gold credit cards, and insurance policies are all examples of the way in which the financial services are presented to customers. They can enhance the image of the service and the provider can even bestow status or implied benefits upon the user as with a gold card. Physical reminders of the service product, brand name and value serve to reassure the consumer and help the organizations positioning. 2. Inseparability: The degree of inseparability depends upon the type of service and the actual supplier. Many everyday transactions are carried out now via automated servicesthe automated teller machines (ATMs), net banking etc. Additionally, many financial services are sold by brokers and agents of various kinds. Services are frequently handled by agents are credit card and other currency/travelers cheque encashment. 3. Heterogeneity/variability: The complexity of the service transaction process will determine the extent of variability and this can differ to a large extent between institutions and even with one institution. The greater the degree of automation within any transaction process, the greater the degree of standardization. Thus simple transactions may be carried out via ATMs and completely standardized or via branch counter where they might be fairly standardized but subject to some variation in quality. Total standardization is not necessarily desirable from the consumers point of view. A friendly greeting or being addressed by name can enhance service delivery and while an ATM cannot arrange an emergency overdraft facility when funds are low, branch staff can look at the standing of individual customers and make arrangements when appropriate, satisfying the customer and profiting from charges applying to the account.

4. Perishability: The degree of Perishability depends on the type of service. If a cheque needs to be cleared by a certain date and the system causes delay then the benefits to the

consumer are lost so the service could be said to be perishable. By and large, money and financial services are enduring in nature. If a banks reserves are not fully utilized profitably through lending or investment they will still retain their worth and may be utilized again at a later date. A bank branch, which does not have any customers at all on a particular day, may actually gain rather than lose profit as staff may be able to use the peace and quiet to catch up on other work.

BANKING STRUCTURE IN INDIA Reserve Bank is the Central Banking Authority in India. All the activities of banks and non-finance companies are regulated and controlled by RBI through the credit and monetary policy. Commercial and Co-operative banks which are scheduled banks are included in the second schedule to the Banking Regulation Act. They are entitled to some facilities with RBI. USERS OF SERVICES: The prospects or potential buyers of services constitute an important place, particularly in the bank marketing. The line of services or product planning and development, the offering of services, the pricing strategies or the interests or costs charged for the services made available and the promotional measures depend on the changing psychology of the actual and potential users. The emerging trends in the level of satisfaction affect the formulation of marketing mix. As for instance, the customers did not claim high rate of interest and other incentives yesterday as they had limited wants and limited avenues for channelizing their savings. But today, the customers prefer refined services and claim for an increased rate of interest as they have copious avenues for channelizing their savings. Like this, the industrial users also demand credit facilities on more liberal terms since there have been numerous changes in the national and business environment. Today, almost all the financial institutions appear interested in linking relationship with the industrial users. This naturally requires a study of the changing psychology of prospects. Users of Banking Services. 1. General Users

All persons having an account in the bank and utilizing the banking facilities at the terms and conditions fixed by a bank are termed as general users. 2. Industrial Users Industrialists or entrepreneurs having an account in the bank and utilizing the credit facilities for the establishment or expansion of their business are known as industrial users. 3. Potential Users or Prospects General or industrial prospects at present not utilizing the services of a bank but are expected to be motivated or induced are termed to be potential users.

SOCIO-ECONOMIC FACTORS AFFECTING CUSTOMERS BEHAVIOR: The social and economic factors have a far-reaching impact on the behavior of customers. This is due to the fact that human beings are directly influenced by the socio-economic consideration. SOCIAL FACTORS a) Group of family, b) Family life-cycle, c) Family decisions, and d) Role of opinion leaders. ECONOMIC FACTORS a) Disposable income, b) Price Index, c) Stages of economic transformation, MARKETING MIX 1. PRODUCT

BANKS PRODUCTS: (A) DEPOSITS: Savings, Current, Fixed etc. (B) ADVANCES: (1) Fund Oriented: a) Term Loan, b) Clean Loan, c) Bills Discounting, d) Advances, e) Pre-shipment Finance, f) Post-shipment finance, g) Secured and Unsecured lines of credit. (2) Non-fund oriented: a) Guarantees, and b) Letter of Credit. (C) INTERNATIONAL BANKING: a) Letter of Credit, and b) Foreign Currency. (D) CONSULTANCY: a) Investment Counseling, b) Project Counseling, c) Merchant Banking, and d) Tax Consultancy. (E) MISCELLANEOUS: a) Traveller Cheques, b) Credit card, c) Remittances,

d) Collections, e) Sale of Drafts, f) Standing instructions, and g) Trusteeship. In banking the products are services. Services cannot be seen or protected like goods. The potential buyer of the services can form an opinion about the services offered. The changing trends in the non-banking investments compel certain modifications to be made in the existing product line. The product should suit the market needs. Bank services are viewed in terms of the satisfaction they deliver and not just the things that are created with value. For instance, a bank account is seen in terms of customer satisfaction such as safety, convenience of paying dues, keeping records, transferring funds, status, and pride in ones bank. The various deposits, loans and advances, consultancy services, international banking, safe deposits, credit cards, etc. are the products sold by the bank. Bankers need to identify their core and supplementary product services as it has more marketing implication. The banker should offer an optimum mix of the core and augmented products. CORE PRODUCT: It is the fundamental benefit the customer buys from the bank. They define what kind of business the firm does, for example, the business of commercial bank. But customers do not buy the core product, they only buy the benefit. The role of the bank marketer is to convert the core products into a generic product, which satisfies the needs of the customer. AUGMENTED PRODUCT: This is the basic product with some ancillary attached to it. For example, when one opens a Suvidha Account with Citibank, he gets an ATM Card free. The bank marketer must offer a multidimensional product or what is called a product package. The product related strategy includes: Introduction of new schemes- EXAMPLE: DEMAT ACCOUNT. Modification of the product offered by incorporating technological development

EXAMPLE: Telebanking, Online Banking, etc. Change in the product line or package EXAMPLE: from Corporate Banking to Personal Banking; or even deleting an existing service line. 2. PRICE Pricing in Banking relates to the interest rates paid by the banker on deposits, interest charged by the banker on loans and demand drafts, charges for various types of transactions and fees for certain services. In India, banks adopt administered pricing structure to some extent as the deposit and lending rates are prescribed by RBI. The charges for banking services are agreed upon by Indian Banks Association. Pricing policy of a bank is considered important for raising the number of actual customers. But even in this regulated pricing environment, pricing can be used as a tool in their marketing strategy. The specific pricing methods that can be adopted in deregulated environments are: Cost plus pricing which calls for a detailed analysis of cost structure of various bank products and services. Market Oriented Approach which indicates what the market can bear or accept as in the case of a corporate client who may not be price sensitive as against an individual client. Competition related Approach, where the price is decided based on the competitors price. In this case, the value like high return, convenience, and speedy service must be highlighted. The banks are required to frame two-fold strategies. Strategies concerned with interest and commissions to be paid to the customers and interest and commissions to be paid by the customer for different types of services.

3. PROMOTION The objects of a promotion programme are to inform about the new service product, to persuade the customer, to remind the customer, build image of the bank, etc. Banking services can be promoted in two ways:

1. Personal promotion: The bank marketer gets the best opportunity to tangibilise the product through personal selling; persuasion is more effective with direct contact. It helps in creating impulse buying. 2. Impersonal Promotion: i.e. advertising, publicity and sales promotion measures. An advertisement in banking is a promise- a promise of satisfaction to prospects who buy the service offered by the bank. Banks use all types of advertisement such as newspaper, radio, television, magazines and hoardings. Also, sales promotion devices such as Point of Purchase material, brochures and advertisement specialties like ball pens, calendars, diaries, etc. Publicity is a major strength as a promotion tool than advertising as customers tend to believe a news item rather than an advertisement. Word of promotion is yet another important promotion tool as it is a better persuader and convincer than advertising and personal selling, as banking services are narrated by customers themselves. Besides, as Social Welfare and Corporate Social Responsibility are considered to be an important part of banking services, the publicity measures need due care. 4. PLACE The place decision mainly deals with selection of a suitable location for the branch. Sound location decisions help in activating the business. The location should have adequate availability of transportation, communication, electricity and other necessary facilities for the smooth functioning of the bank. Technological developments, increased customer satisfaction, inadequacy of the traditional channel to serve all customer segments have brought bout ATM, telebanking, home banking, Internet banking and now SMS Banking. Another significant development is a strategic alliance set up by the private banks to overcome the handicap of limited branch network. In such alliances the branch network of one branch will be used by the other for selected transactions like bill collection, cheque collection, etc. 5. PEOPLE

Banking products cannot be separated from the person (banker) who markets them. The product and the seller together constitute the banking product. Banks should adopt internal marketing in order to make the whole business customer-oriented. The bank products should be marketed to the employees first before they are marketed to customers. The corporate mission should be communicated repeatedly and effectively to all employees by the top management. The placement policy should emphasize that the recruits should not only be conversant with all aspects of banking business but also have the skill for social interaction and tolerance for interpersonal contact. 6. PROCESS It involves all activities right from the product conception stage, to product designing and development down to its marketing at the branch level. Banks which were more focused or activity-oriented have shifted to customer-oriented service delivery. This is essentially due to the technological advances. Automation of transactions, accounting procedures, data handling, as well as process re-engineering has helped reduce delays in processing transactions- example: Loan applications, clearing cheques, etc. 7. PHYSICAL EVIDENCE Banking products are intangible and physical evidence focuses the bankers attention on this aspect. The environment of banks is changing. It is becoming friendlier with attractive layouts and dcor. Most private and foreign banks like ICICI, Citibank, and HDFC portray a new welcoming and friendly look to the customers rather than drudgery banking counters. Attractive brand names, logos, symbols, etc. add to the customers perception of service quality.

PEST Analysis for Banking Services Political/ Legal

Influences which have an impact on banking services and consumer confidence include the following: State provision of pensions Government encouragement of savings and investment (for e.g. via tax benefits) Regulatory control and protection (to prevent the collapse of financial institutions and protect investors money) Economic Economic factors are key variables which have an impact on the activity in the banking services sector. The level of consumer activity is governed by income levels and personal wealth. As income levels grow, more discretionary income is available to spend on banking services. Consumer confidence in the economy and in job security also has a major impact; if lean times are foreseen ahead, savings will take priority over loans and other forms of expenditure. Consumers may also seek easy access savings and be willing to tie up their money for longer periods with potentially more attractive investments.

The main economic factors that should be monitored with regard to banking services marketing are as follows: Personal and household disposable income Discretionary income levels Employment levels The rate of inflation Income tax levels and taxation structures Savings and investment levels and trends Stock market performance Consumer spending & Consumer credit Socio-cultural Many demographic factors have an important bearing on banking services markets. Changing attitude towards consumer credit and debt Changing employment patterns Numbers of working women

 The ageing population Marriage/divorce/birth rates Consumption trends Technological Technology has a major impact on many industries including financial services and banking in particular. ATM services which not only provide cash but also allow for bill payments, deposits and instant statements are widely used. From the customers viewpoint, technology has played a major role in the development of the process whereby the service is delivered. Automated queuing systems have made visits to the bank easier and more convenient. Telephone Banking and insurance services are now being used in place of the traditional branch-based service process. Technology has also played a major role within organizations, bringing about far greater efficiency through computerized records and transaction systems and also in business development, through the setting up of detailed customer databases for effective segmentation and targeting. The main technological developments fall within these categories: Process developments Information storage and handling Database system

ROLE OF TECHNOLOGY IN BANKING 1. Automated Teller Machines (ATMs): The trend in banking has evolved from a cash economy to cheque economy and there on to the plastic card economy. One of the channels of banking service delivery is the ATM or the Automated Teller Machines, whose traditional and primary use is to dispense cash upon

insertion of a plastic card and its unique PIN or personal identification number. Current and saving account holders of a bank who hold a certain minimum balance in the account are issued an ATM card. The card is a plastic card with a magnetic strip with the account number of the individual. When the card is inserted into ATM, the machines sensing equipment identifies the account holder and asks for his or her identification code number. Usually this is referred to, as the PIN and is issued by the bank's computers. This number is not known to the bank's staff and is secret and unique to that individual. When the person uses the ATM card is asked for the PIN, that the cardholder identifies himself or herself by pressing the relevant number buttons on the machine. The machines then verify the account number on the ATM card along with the secret code number stored in the ATM. When the match is found, the ATM pops up a menu screen which allows the user to transact almost all types of bank transactions. A typical transaction would be that of cash withdrawal. The bank generally restricts the maximum amount and the frequency with which one can withdraw cash. The amount withdrawn is immediately debited to the concerned account through accounting entries pre programmed on the ATM. Similarly, cash or cheques can be deposited through the ATM for credit to an account. When the menu screen appears one should indicate that he or she wants to deposit money. The ATM dispenses an envelope which is to be filled with the cheque or cash. The account number to be credited is registered on the envelope and stored. Later the bank staff collects the envelope to credit the account. Account balance queries, fixed deposit details, debits and credits to the account etc. can all be queried at the ATM.

The advantages of an ATM over personal teller are as follows: (1) ATM's can be accessed round-the-clock. (2) No employee interface is necessary. (3) Cash and cheques can be deposited and statement of accounts requirement, transfer of funds etc. can be effected.

(4) It offers a cost-effective solution alternative to labor costs. (5) Automatic and instantaneous accounting is possible. (6) It eliminates the need for customers to travel to the branch where his or her account is maintained, if the ATMs are conveniently located and networked. (7) To depositors who do not have a credit card, ATM offers cash availability when necessary. (8) Scope for frauds, robberies and misappropriation is reduced considerably if the PIN is maintained. 2. TELEBANKING AND ELECTRONIC BANKING: A customer can access information about his/her account through a telephone call and by giving the coded Personal Identification Number (PIN) to the bank by Telebanking. Some banks like SBI, Andhra Bank, etc. have made this facility available to some branches. Automatic withdrawals and transmission of cash balance data and other information about an account is another facility that is offered by banks in a consolidated form through fax or telex. Some banks have also adopted the use of E-mail service for data and information transmission. Banks have also started with the Electronic display of information through Satellite Communication System and transfer of funds through the same channel for inter branch and inter-bank adjustment and clearance of cheques, drafts, etc. 3. CELL PHONE BANKING AND INERNET BANKING: Through Inter-net banking one can visit the web-site of each bank by entering his password and know the account balance and even pass his own credit and debit entries. This means that we can do our banking through our personal computer sitting at home. Banks may soon allow zero balance savings accounts through Internet facility only. Customers can now make balance enquiries, download statements and open fixed deposits over the net. They will soon be able to carry out all their transactions over the net. So visiting a bank would become needless. Time to come; Mobile phones will drive banking transactions. These mobile phones will be equipped with smart cards that are embedded with banking and other information. This mobile phone banking facility is yet to come but the mechanics of linking the banking with the cell phone is being sorted out.

Teller machines are being installed in the banks for the Electronic banking facility. The use of e-mail for banking will open up new avenues for Internet banking. Banking will be on wheels and mobile by the use of smart banking.

MARKETING OF BANKING SERVICES IN THE GLOBALISED SCENARIO EMERGING CHALLENGES: "Change" is a continuous process and banking industry is no exception to this law which is natural. Due to the implementation of the financial sector reforms and policies for the country change in the banking industry is inevitable. The main aim of the financial sector reforms is to promote an efficient, competitive and diversified financial system in the country. After liberalization and globalization process that was initiated in 1991, the Indian banking industry has undergone tremendous transformation. These changes have forced the Indian banking industry to adjust the product mix and to remain competitive in the globalized environment. In order to accommodate the changes and challenges that are taking place in the present globalization scenario, the Indian banking industry has to re-orient its strategy towards marketing of banking services. New ways and means have to be found to compete in the future and to survive with profit and business growth. The following are some of the vital challenges that threaten the Indian banking industry: (1) Competition from foreign banks and now new private sector banks: The competition in the Indian banking industry have intensified with the entry of more and more foreign banks and now private sector banks, with better technology, market orientation and costeffective measures. Financial institutions have also stated entering into the domain of banks. The share of business of public sector banks has considerably declined. Hence there is a compelling need for the Indian banking Industry to either change or modify its marketing strategy in order to attract the customers and also to withstand the stiff competition from foreign banks and new private sector banks.

(2) Technological advancement: The methodology of banking business has drastically altered due to the advent of technology both in terms of computers and communication. It has opened new vistas in the banking sector and in turn has brought new possibilities for doing the same work differently and in a most cost-effective manner. With the help of technology it is now possible to have 24 hours day banking and all seven days in a week. New business potentials and opportunities which have remained unexplored have not opened up with Tele banking, Internet banking and E-banking. (3) Innovation: Innovation is another important force of change in the Indian banking sector. Now-a-days banks have become innovative and pro-active and offer top-class service to the customers. They play a dynamic role not only as a finance provider but also as a departmental store of finance. Due to this new instruments and new products like factoring, leasing, merchant banking, forfeiting venture capital, corporate advisory services are emerging. These innovative services may increase the revenue with cost effective measures. (4) Diversified Activities: There is a universal trend towards banks' diversification normally through insurance depository participant services, investment banking etc. Furthermore banks have diversified their activities by rendering various services like depositing gold, sale of gold, paying tax liability and telephone bills and collecting interest on securities on behalf of the customers. All these diversified activities have made the banks to develop and offer consultancy counseling and customer designed packages for efficient management of funds. The banks traditional roles as financial intermediaries are gradually assuming lesser importance in their overall business as the banks diversify their activities and redefine their roles. It is important to note that the percentage of non-interest income is increasing and the interest income of the banks is decreasing. This shows that the income through service exceeds the income through lendings. (5) Customer Awareness and Satisfaction: In the Urban and metropolitan sector customers demand more facilities than offered since they are more knowledgeable. They look for

services that are cheaper, faster and better in quality. IDBI is offering 110% loan of the cost of the project in case of construction of the building. Such type of loan is given to meet the documentation expenses. Now-a-days customer can know the status of their accounts, request for a cheque book or a financial statement, transfer funds or "Stop-payment" of cheques from his desktop. (6) Development of skills of Banks Personnel: In order to meet the new challenges, banks have to develop novel ways of meeting the customers' demands. To get sufficient knowledge and exposure to technology, suitable packages relating to hardware and software applications are to be provided. Furthermore a separate marketing wing may be created in every bank to market their banking services. They must be suitably trained to keep pace with ever-changing environment. For meeting the challenges the human resource departments in banks have to prepare a proper manpower plans and strategies. (7) Profitability Nature: Profit is a barometer for a judging the performance of any bank Profits are needed to meet the expectations of the stake holders, benefit of employees and also for building capital. Banks have to pay attention to the following emerging areas order to protect and enhance their profitability. Product development and management skill. Skills for operating in electronic environment. Modern credit management skills. New risk management practices New focus on customer and his needs. New internal audit skills in a changing business environment. (8) Corporate Governance: Corporate Governance plays a highly significant role in corporate governance. It is seen that though the corporate governance revolves around enhancing shareholders value, it has also the responsibility of marketing the banking services by introducing and producing new products and services. Accountability at all levels; transparency and enhancing the image of the organization would be the major ingredients of good corporate governance. After the globalization and

financial sector reforms, corporate governance has been receiving a lot of-attention in banking sector. To conclude we say that the recent trend of globalization and liberalization has posed serious problems to the domestic banks. The public sector banks have been pushed to a tight corner because of the aggressive marketing strategies from their foreign counterparts. Potential customers have started moving towards the private sector banks and foreign banks. The business prospects of our public sector banks have gradually started shrinking as such they are forced to revise their strategy of banking operations so that they can meet the threats posed by the foreign banks. Lastly in order to survive and succeed the domestic banks must identify their marketing areas, develop adequate resources, convert these resources into efficient services and distribute them effectively so that the customers are satisfied.

CONCLUSION
The opening up of the economy in 1991 paved the way for the next revolution in Indian banking: the emergence of private banks. It has change the face of retail banking, bringing in enhanced competitiveness, product mix and customer satisfaction. Allowing banks to engage in non-traditional activities has contributed to improved profitability and cost and earnings efficiency of the whole banking sector, including public-

sector banks. By contrast, investment in government securities has lowered the profitability and cost efficiency of the whole banking sector, including public-sector banks. Lending to priority sectors and the public-sector has not had a negative effect on profitability and cost efficiency, contrary to our expectations. Further, foreign banks (and private domestic banks in some cases) have generally performed better than other banks in terms of profitability and income efficiency. This suggests that ownership matters and foreign entry has a positive impact on banking sector restructuring. The emergence of retail banking has also brought into focus the performance of the private banks and their aggressive banking practices. The new private banks have used technology to grow. The PSUs are now becoming more customer-centric and tech-savvy. The battle for the Indian consumers mind is in full swing.