A

PROJECT REPORT
ON
CAR FINANCE
AT
KOTAK MAHINDRA PRIME LTD. (KMPL)
SURAT

CERTIFICATE
This is to certify that project report on Service Marketing of Car Finance at KMPL
Surat is submitted by Krunal U. Desai to the GRIMS, Vapi in the partial fulfillment of
3rd semester.

DIRECTOR:
DR.R.S.SHAH
GRIMS

GUIDE
SAMEER ROHADIA (ASS.PROFESSOR)
GRIMS

PROJECT COMPLITION CERTIFICATE

TO WHOMSOEVER IT MAY CONCERN
This is to certify that Mr. KRUNAL U. DESAL of GRIMS, VAPI has undergone his
Summer Training at KOTAK MAHINDRA PRIME LTD, SURAT, and has attended our
organization from May 21, 2007 to July 23, 2007 for the same.
He was assigned a project work on SERVICE MARKETING OF CAR FINANCE
and has completed the same successfully.
We wish him good luck for his future.

For KMPL

Place: SURAT
Date:

DECLARATION
I the undersigned hereby declare that, the said Project Report on
SERVICE MARKETING OF CAR FINANCE, submitted to
Veer Narmad South Gujarat University is my sole work and I
assure that this work has not been submitted to any other
University or Institute for any other purpose.

Place: - _ _ _ _ _ _ _ _ _ _
-------------------------KRUNAL U. DESAI
MBA
GRIMS, VAPI

Date: - _ _ _ _ _ _ _ _ _ _

ACKNOWLEDGEMENT
First of all I would take this opportunity to thank Dr. R.S.SHAH, respected Director of
GRIMS, VAPI, who gave me the opportunity to do this Summer Training Project Work.
I would also like to thank Mr. Japit Patel (Relationship Manager) who gave the consent
to carry out my Summer Training in Kotak Mahindra Prime Ltd (Car Finance)
SURAT which is one of the reputed companies in car finance industries.
I would like to express my deep sense of reverence and gratitude to Mr.Varun
Dalal (manager - credit department) for guiding me throughout the assignment in the
company & for providing their tutelage while going through the project work. I am also
very much thankful to Mr. Vipul (manager operation department), Mr. Anup rathod
(sales coordinator.) for supplying the required information to me.
And I am personally indebted to my project guide Mr. Sameer rohadia sir (ass.
professor),

GRIMS, Vapi, for providing his guidance wherever it was necessary

throughout my project work.

Last but not the least I would like to thank all my friends and others who helped
me directly or indirectly for the successful completion of my summer project.

Yours Faithfully,
--------------------------KRUNAL U. DESAI

EXECUTIVE SUMMRY
In this project in area of Service Marketing, I have made a study on the working of Car
Finance Company for the purpose I have selected on NBFC (Non Banking Finance
Companies) and the other Private bank. These two companies are KMPL (Kotak
Mahindra Prime Ltd) as an NBFC and ICICI as a private bank. I undertook a study in
both Car Finance Companies to know the various strategies. After the study I prepared a
brief repot of the working of both these finance companies.
At a larger stage, I have done a comparative study of all four p of the marketing of
these finance companies. In this comparative study, I have compared 4 Ps of both
companies likewise how product, price, place and promotion strategies of both the
companies are different from each other.
A detailed comparison of the various services offered, rate of interest, their different
finding norms, different types of credit evaluation and so and so forth to tap the market
and general ambience is done.

OBJECTIVE OF STUDY
1. The first and the foremost objective of this training are to know about the
practical working of the corporate world which is completely different to that of
theoretical knowledge that we are taught in our classroom through books.
2. It is through training that we can have clear ideas combing theoretical knowledge
of classroom with practical knowledge in firms or company.
3. We can also apply our theoretical knowledge during our training program and can
conclude that to how much extent they are practically applicable or not.
4. By this training we can check and understand co-ordination of all management
functions such as difficult in classroom.
5. We can also know about the role of manager in the company which must be
performed by him during his service as manager.

LIMITATIONS
It is difficult to get some informations regarding financial, sales and other figure
as firm do not disclose the above data and keep it private and confidential to
themselves.
In this report, information written by me as per my limited understanding of the
concern project.

INDEX

Sr. No.

Topic

Page No.

SECTION 1
OVERVIEW OF KMPL
FINANCIAL SCHEMES
DETAILS OF LOAN APPLICATION
FORM
DEPARTMENTS

SECTION 2
SERVICE INDUSTRY
MMARKETING MIX OF KMPL
MARKETING MIX OF ICICI
COMPARATIVE STUDY
CONCLUSIONS AND FINDINGS
BIBLIOGRAPHY

SECTION 1
GENERAL OVERVIEW
OF
KMPL

10

KOTAK MAHINDRA PRIME LIMITED

SOMETHING ABOUT THE COMPANY:

Kotak Mahindra Prime Limited (KMPL) is a subsidiary of Kotak Mahindra Bank
Limited formed to finance all passenger vehicles. KMPL is Indias one of the largest
nation wide dedicated car finance company. The company is dedicated to financing and
supporting automotive manufacturers, dealers and retail customers. The Company offers
financing in the form of loans for the entire range of passenger cars, multi utility vehicles
and pre-owned cars. The Company also offers Inventory funding and infrastructure
funding to car dealers and has strategic arrangement with various car manufacturers in
India for being their preferred financier.

KMPL has robust delivery platform which is critical for sustained growth. As on March
31, 2006, KMPL has a retail distribution network comprising of 52 branches (including
representative offices) covering about 100 locations in 16 states in the country and has a
wide network of Direct Marketing Associates, brokers and agencies supporting the
distribution network.

The Company was incorporated on 28th February 1996 and commenced its operations on
1st November 1996 as a joint venture between Kotak Group and Ford Credit
International (FCI) wherein Kotak Mahindra Bank Limited (Kotak Bank) (Formerly
Kotak Mahindra Finance Ltd) (Kotak Bank) held 60% equity stake and the balance 40%
was held by FCI. After incorporation and subsequent commencement of the business by
the joint venture, the business of financing passenger cars and its related activities,
previously carried out by Kotak Mahindra Finance Limited (now Kotak Bank), were
being undertaken by KMPL. The Company has immensely benefited from the brand
equity of "Kotak Mahindra" who was market leaders in the auto finance sector.
.
On June 1, 2005, Kotak Group and FCI announced the realignment of their joint venture
wherein, Kotak Group would acquire the 40 percent stake in KMPL held by FCI, giving

11

the Kotak Group complete ownership of KMPL. The transaction was subsequently
completed on October 4, 2005 on receipt of all regulatory approvals.

Shareholding Pattern and Capital Infusion:

Kotak Bank holds 59.28% equity stake in KMPL, 39.52% is held by Kotak Mahindra
Investments Limited (a 100% subsidiary of Kotak Bank) and the balance 1.20% is held
by Kotak Mahindra Asset Management Co.Ltd. (A 100% subsidiary of Kotak Bank).

ICRA
Long

Rating:
Term

CRISIL

Debentures

LAA

Rating:

Short Term P1+

The ratings reflect the continued strong performance in terms of improving market
position, tight control on asset quality and conservative balance sheet profile. KMPL's
rating benefits from its parentage, stable and strong management, resource raising
capability and strong system and controls.

CUSTOMER SERVICE:
KMPL has established a centralized customer service activity to ensure high quality and
timely response to customer needs. The robust system platform ensures the above
standards are met. KMPL's launch of it's website is a commitment by the organization to
provide all stakeholders, including customers, accurate and up to date information.

COMPANYS PROMOTORES:
Kotak Mahindra is one of India's leading financial conglomerates, offering complete
financial solutions that encompass every sphere of life. From commercial banking, to
stock broking, to mutual funds, to life insurance, to investment banking, the group caters
to
the
financial
needs
of
individuals
and
corporate.
As on 31st March 2007, the group has a net worth of over Rs.3,200 corer and employs
12

around 10,800 employees in its various businesses and has a distribution network of
branches, franchisees, representative offices and satellite offices across 300 cities and
towns in India and offices in New York, London, Dubai, Mauritius and Singapore. The
Group services around 2.6 million customer accounts.

ORGANISATIONAL STRUCTURE

Mr. Uday Kotak

Chairman

Mr. Deepak Gupta

Director

Mr. C Jay ram

Director

Mr. Shekhar Sathe

Director

Ms Shanti Ekambaram

Director

Mr.Shivaji Dam

Director

Mr.Shivaji Dam

Director

MANAGEMENT:
Mr.Sumit Bali - CEO & Manager
Mr.Sudhakar Shanbhag - COO

13

ACHIEVEMENT OF KMPL

Kotak Mahindra Prime Ltd. has been awarded the Voice of Customer award for Best
Passenger Vehicle Finance Company in India 2006 by Frost & Sullivan (F&S) on 16th
Feb07. Frost & Sullivan is a global growth consulting, research and training firm
headquartered in Palo Alto, US with 25 offices across the World. F & S tracks the
automotive and transportation vertical across the globe to understand market and
consumer trends.
The award is based on the F& S study of Cars and Multi Utility vehicle owners among
5100 customers across 15 cities. The customers rated their financiers on 9 parameters
based on their satisfaction level. KMPL topped in 6 out of 9 categories and was No.2 in
two other categories. The other financiers included as part of the study were ABN Amro,
HDFC, ICICI, GE Countrywide, SBI and Citibank.
This is the first ever award given in Auto Finance domain and winning the same is a
momentous occasion for entire KMP team as Customers have adjudged us as the Best
Passenger Vehicle Finance company in the country!! This award is the reflection of
Planning, execution and hard work put in by the entire KMP team to ensure customer
delight and is an important step in our journey towards becoming the Global Indian
Financial Services Brand.

14

VARIOUS FINANCIAL SCHEMES PROVIDED

BY KMPL

MARGIN MONEY SCHEME:

In this scheme, we finance your car for up to 90% for certain models. You will have to
give us a down payment for the margin amount, (invoice value minus Finance amount).
The financed amount can be repaid as per your convenience in tenures of 12 months to 60
months at your convenience either through Equated monthly Installments or a differential
plan that we can tailor for you to minimize your outflow.

STEP UP SCHEME:
In this scheme, the EMI increases after every year, six month or quarter depending upon
the customer needs. This is best suited for people who want to experience the luxury of
the car and wants to pay in line with their growing income starting from Low EMI in the
early period of repayment.

LOW EMI BALLOON SCHEME:

In this scheme 10%-25% of the cost of the car is paid as last EMI, thereby reducing the
EMI for the entire tenure.Thescheme is for customers who want to dispose off their
vehicle at the end of the tenure but are looking at affordable EMIs during the tenure

ADVANCE EMI SCHEME:

In this scheme, you make the payments of a few monthly installments upfront. The
balance is payable through Equal Monthly Installments. With the advance installments
you can repay your loan much faster.

15

7 SIMPLE STEPS TO OWING

A CAR ACCORDING TO KMPL
KMPL offers,
Finance on the widest range of new and pre-owned cars.
Attractive interest rates.
Flexible schemes.
Speedy processing.

According to KMPL, there are 7 simple and convenient steps so that the process of
buying a car can be as enjoyable as owing a car.

STEP: 1 GETTING INFORMATION:

Customer can get information on companys finance schemes in various ways mentioned
below:
a. Companys DMA (Direct Marketing Associates).
b. At dealer point- they are associated with most dealers in city and have a
representative who will give the information on their finance schemes and other
services. The representatives will be present at the KMPL counter or can be
approached through the dealer representatives.

STEP: 2 RECEIVING THE KMPL OFFER:

Company offer tailor made schemes based on customers need.
16

 Margin money scheme.

Step up scheme.
Low EMI balloon scheme.
Advanced EMI scheme.
Special schemes offered by KMPL.

STEP: 3 DOCUMENTATION:
Once the vehicle, product and scheme are realized, it will be time for the company to
initiate the process of making finance available to the customer as soon as possible based
on their financial documentation.

STEP: 4 CREDIT EVALUATIONS:

A KMPL officer will evaluate customers credit worthiness based on the documents
submitted by them along with the FI report. A field investigation officer will visit for
additional information that will help company for process customers loan.

STEP: 5 PROCESSING OF FINANCE:

After credit approval, they will enter into an agreement with customer and collect post
dated cheques (PDCs).

STEP: 6 DELIVERY OF CAR:

For the delivery, customer will receive a call from companys sourcing agent or sales
coordinator intimating them about the tentative date of delivery.

17

STEP: 7 RECEIVING AGREEMENT AND RE-PAYMENT

SCHEDULE:
At the time of delivery, customer must collect the invoice from the dealer. Subsequent to
receiving the RC book and invoice copy, company will send the agreement copy and
repayment schedule to customer by courier.

SOMETHING ABOUT KMPLS CAR LOAN

APPLICATION FORM

KMPL believes in safe business. So customer has to fill up different type of important
information about their personal as well as other important matters. Basically there are 4
types of details customer has to fill up at a time of application.
Contract details.
Vehicle and finance details.
Personal details.
Other details (only for institution).

CONTRACT DETAILS

1. Type of applicant:
a) Institution or individual.

18

b) If institution, specify the type: it can be proprietary, partnership, pvt.ltd. Pub.ltd.

Other.

2. Type of contract:
It can be hire purchase, lease, and loan.

3. Residential status of individuals: it can be resident Indian, non-resident

Indian, and foreign national.

VEHICLE AND FINANCE DETAILS

1. Customer buys either new car or used car or refinances the car.
2. Customer has to write car name, model, and color and registration no. for
used cars.
3. Invoice price, finance amount and margin.
4. Tenure, EMI amount and security deposit.
5. Name of supply dealer.
6. Payment: either booking or disbursement.
7. Write the finance product code.
8. Finance dealer name.
9. Name of sales man.
10. Sharing ratio.

19

PERSONAL DETAILS

1. a. full name of applicant.

b. mothers maiden name (individual only).
c. institution name .
2.

Residential/institutional/address, area, city, pin code, tel.no. Fax, e-mail.

Residential status: company, mortgage, owned, rented and others.

3.

Office address:
Office type: company, mortgage, owned, rented others.

4. Additional address (if any):

5.

Designation: .

Occupation/nature of business

6. Date of birth gender marital status: bachelor, joint, nuclear, others.

7. Education & no of dependents.
8. Income tax PAN no: driving licence no. (For individual/identification/registration
no. for the company), voters ID no. for individual/sales tax no.:
9. Bank name, branch name, and a/c no.
10. Credit card details: credit card no: date of expiry: issuer: type:
11. Prior finance details (any loan): in this customer has to write amount
financed, month or year of contract, and current status.
12. Activity/ source of funds/income; either borrowed or owned.
13. Gross anal income or gross annual sales/receipts.

20

OTHER DETAILS (ONLY FOR INSTITUTION)

If an applicant is an institution, so they have to filled some extra information.

1. number directors/partners/trustees:
2. under current management since (month/year):
3. nature of business;
4. contract name
5. Designation.
6. phone no.,
7. and companys bankers name:

VARIOUS DEPARTMENTS OF KMPL

21

KMPL

CREDIT
DEPARTMENT

SALES
DEPARTMENT

OPERATION
DEPATRMENT

CREDIT DEPARTMENT

22

Credit department is thee major department of KMPL. Customers credit evaluation is

done at credit department. A KMPL credit officer evaluates customers credit worthiness
based on the documents submitted by them along with the FI (Field Investigation) report.
A field investigation officer visits customer for additional information like annual income
of customer, nature and type of business, information about income tax and so and so
forth.

If field investigation officer gives positive repot about customer to credit department,
then and then credit officer approves applicants proposal for the car loan. Credit
department is very careful about their customers. They have to be very careful when
applicant is a pitician, lawyer or a police officer. Because these type of customer can
create problems in future in loan installment. Sometimes they use their power in bad way
and create problems for the company.

SALES DEPARTMENT

Sales department basically consists of two major activities. Wholesale and retail sale.

23

Wholesale funding is an internal part of the overall funding process. Dealers need
finance for their day-to-day activities. They can use this facility to order the vehicles and
spare parts froe the manufacturers. KMPL with appropriate system company is well
positioned with the market to provide wholesale finance to most of the dealers of Surat.

There are so many major dealers of KMPL in Surat city like Nanavati motors, Empire,
President Motors, Blitz, Desai motors, Kataria, Bhavya Honda, Bhavna ford, and Dhru
motors etc.

Retail sale in an important part of KMPL. KMPL gives loan to customer for car
purchase, loan for used car and for lease purpose.

OPERATION DEPARTMENT

All paper work is done at operation department. Sales coordinator is the major part of
operation department. In this section, primary data of customer are prepared as sales
ducats and then it goes for final check in operation department.
24

Once the primary sales ducats go in operation department, operation officer checks
ducats and prepares final document for installation. If there is some mistake in
documentation, correction can be made here.

After completing the correction process, again ducat goes for final and last checking and
then it is installed in computer systems. Once final installation is completed, no other
corrections can be made again.

When an applicant or customer is an institution, documentation process is more

important compare to individual applicants documentation.

SERVICE INDUSTRY

25

DEFINATION OF SERVICES:
A service is an activity which has some element of intangibility associated with that
involves some interaction with customers or with property in their possession and dose
not result in the transfer of ownership. A change in condition may occur and production
of services may or may not be closely associated with a physical product.
According to KOTLER & BLOOM, service as any activity or benefit that one partly
can offer to another i.e. essentially intangible and does not result in the ownership of
anything. Its production may or may not be tied to a physical product.

ROLE OF SERVICES IN ECONOMY:

Services are widely used by people today in practically all aspects of life from education
to entertainment, finance to fast food, travel to telephone, advertisement to amusement
park, market research to maintained services, retailing to recreation and so on. Services
now a day are increasingly being used by the corporate as well as the house hold sector.
This emphasis on services and its increasing use has not happened overnight. It started in
the 20th century especially after the end of the world war _2 due to large scale destruction
during the war, a lot of economy activities had to be carried out to bring the torn
economies back on road. This resulted in a number of new projects that fuelled the
demand for financial services.

CHARACTERISTICS OF CAR FINANCE

AS A SERVICE
26

Car finance as a service is different from a general product available in the market. It has
inherited the finance company of service like:

1. INTEGIBILITY:
Services are to a large extent abstract and intangible. You can only feel or experience
financing as a service but can not see it or touch it. E.g. when you buy a Honda City
through finance although Honda City is intangible, the finance and convenience you get
out of it is intangible.

2. HETROGENITY:
The human element is very much involved in providing and rendering services and this
makes standardization a very difficult task to achieve. In finance company e.g. the
customer care lady gives your Non Objection Certificate or Interest Statement may not be
as sufficient as a sales person who served you very efficiently and you have spend more
time for the services. This is despite the fact that in finance company rules and procedure
have being laid down to reduce the role of human element and ensure maximum
efficiently by use of the computer and telephone. In a company the atmosphere is good
and clean the service provided are efficient but it is the people interacting with customer
who make all the difference between a favorable and unfavorable perceptions of the
company.

3. INSEPARABILITY:
Services are typical produced and consumed at the same time with customer penetration
in the process. In most cases a Car Financing service cannot be separated from a firm
providing it as the customer has to go to the finance company to avail its loan or service.
But gradually the level of imp arability is reducing due to increasing affluence of internet
and use of net finance calculator or direct marketing.

4. OWNERSHIP:
When you buy a product you become its owner be it a car scooter. In case of services you
may pay for its use but you may never own it. For e.g. in case of financing the payment in

27

form of service charges and interest is not purchase but only for these use or access to
facilities like loan.

RELATON BETWEEN FINANCE COMPANY

AND CUSTOMER
28

In the service sector both institutional and individual customers may enter in to a
continuing relationship with services providers and opt for or receiving services
continually. In financing the relationship with the customer is on the basis of:

(A). NATURE OF SERVICE DELIVERY:

In financing there is most often a continuous delivery of services.

(B). TYPE OF RELATIONSHIP BETWEE

ORGANISATION AND ITS CUTOMERS:

SERVICE

In financing the finance companies have a member relationship with the customers.

EXTENT
OF
JUDGEMENT

CUSTOMASATION

AND

A critical issue for the service marketers is to decide to what extent the service offer
should be customized, for financing a high customization level of service is required,
while usually the judgment the cost of custom-made service versus the standard service.

EVALUATION OF CAR FINANCE SERVICE

29

Till the mid 80s the potential car owner had to contend with a long waiting period and
moreover Car Finance was unheard of. The 90s with the advent of consumerism
brought in a dramatic change with the rising aspiration of the burgeoning middle class, an
increase in disposable income due to the growing number of double income families, a
change in attitude towards debt, and increasing competition in the automobile business,
all combing to make Car Finance one of the hottest business of the last few years. People
today, like to own a car quickly in life and change it often too. It is no longer perceived as
an asset. Good infrastructure also boosts sales.
With the liberation of the Indian Economy several cars majors including Mercedes Benz,
Mitsubishi, Honda, General Motors, Hyundai, Toyota, etc. and recently Skoda is all set to
enter the passenger market, soon to be followed by a wide range of car loan scheme. The
last couple of years have witnessed intense competition within the Car Finance Industry.
Today all it takes is a telephone call to have an army of salesman trying to sell you their
schemes.
Car finance can be obtained from a number of sources, mainly Non Banking Finance
Companies (NFBCs), Multinational Banks (MNBs), Nationalized Banks, Cooperative
Banks, and the Car Manufacturing Companies themselves. There are number of dealers
promoted finance companies and NBFCs with Car Manufacturing tie ups such as Kotak
Mahindra prime Ltd., Maruti Countrywide, and GMAC-TPFC etc.

30

A
STUDY OF SERVICES
PROVIDED BY
KOTAK MAHINDRA PRIME
LTD.

KOTAK MAHINDRA PRIME LTD.

31

Kotak mahindra prime ltd. was incorporated on February 28th 1996. Operations
commenced on November 1st 1996. In financial year 2007-2008 KMPL will complete its
eleven successful year of operation. It started with branches at 26 locations in 1996 and is
now present at 52 locations across the country through its branches and representative
offices. KMPL is a joint venture between kotak mahindra prime ltd. And Ford Credit
International Inc. USA (FCII). The share holding pattern of the company is KMPL 60%
and FCII 40%.
KMPL is a flagship of the Kotak Mahindra group, Indias leading and most diversified
financial services group. Is activities include asset financing, investment banking, mutual
funds, life insurance, stock broking distribution and search, venture capital, banking
sector and retail banking. FCII is a fully owned subsidiary of Ford Motors Credit
Company; the world largest dedicated automobile financer. Ford Financial Services the
automotive finance wing of the Ford group manages assets worth over $ 174 billion
(Rs.8, 20,000 corers) worldwide.

The company finances all non-ford passenger vehicles through its direct sales force and
channel partners and Ford Credit Kotak Mahindra finances only ford products. Company
has two main revenue streams, retail finance and dealer credit. The Reserve Bank of India
classifies KMPL as a higher purchase finance company.

SERVICE MARKETING MIX OF

KOTAK MAHINDRA PRIME LTD.
32

Marketing mix concept is a well established tool used as a structure by marketers.

Marketing mix consists of various elements of marketing programs which have to be
considered in order to successfully implement the marketing strategy and positioning in
the wide market. Product marketing that has four basic marketing mixes elements viz.

Price, Place and Promotion. Each element in the service mix has an impact on all other
elements. All these elements are used to support each other, to reinforce the positioning
of the product and to deliver appropriate service quality to achieve a competitive
advantage.

A brief explanation of all the Ps of service marketing mix follows:

1. PRODUCT.
2. PRICE.
3. PLACE.
4. PROMOTION.

PRODUCT

33

A product is an overall concept of objects or progress which provides some value to

customers viz. product and services. It means term product includes a physical product
and a service.
Customers are not buying goods or services but they are really buying specific benefits
and values from the total offering are

1.
2.
3.
4.

The core or generic product/service.

Expected product/service.
Augmented product/service.
Potential product/service.

Service product thus is a complex set of value satisfaction and buys services to solve
problems and make their life simple and lucid. Service marketers are involved is a
constant research and development for the innovating the existing products/services in
order to attain a cutting edge over the competitors.

Kotak Mahindra Prime Ltd representatives will contact at the earliest to understand their
requirements in terms of vehicles, tenure of finance, amount financed and preference of
finance scheme. They can choose of the 3 products.

1. HIRE PURCHASE:
In this product offer, company will buy the car and customer will use it under hire
purchase agreement with KMPL. The ownership will be transferred to customer after

34

customer pays the last rental. The benefits for him as a consumer in this product is
that customer can treat the hire charges (part of the rental) paid by customer as an
expense in their books of account and therefore eventually reduce the burden of tax
levied on customer. Depreciation can be claimed for the purpose, as applicable.

2. LOAN:
In this offer, customer can buy the car from the dealer with the loan amount
sanctioned by KMPL. The car will feature as an asset in customers books of account,
which will help him to claim depreciation for taxation purpose. Customer can also
treat the interest component of the rentals as an expense.

3. LEASE:
If customers opt for this product, the car will own by KMPL and will be leased to
customer on rent. Customer can avail of tax benefits, as entire rental will be
accounted in their books as an expense. The lease product is beneficial for profit
making corporate.

VARIOUS SCHEMES OF KMPL

1. MONEY MARGIN SCHEME:
In this scheme, we finance your car for up to 90% for certain models. You will have to
give us a down payment for the margin amount, (invoice value minus Finance amount).

35

The financed amount can be repaid as per your convenience in tenures of 12 months to 60
months at your convenience either through Equated monthly Installments or a differential
plan that we can tailor for you to minimize your outflow.

2. SET UP SCHEME:
In this scheme, the EMI increases after every year, six month or quarter depending upon
the customer needs. This is best suited for people who want to experience the luxury of
the car and wants to pay in line with their growing income starting from Low EMI in the
early period of repayment.

3. LOW EMI BALLON SCHEME:

In this scheme 10%-25% of the cost of the car is paid as last EMI, thereby reducing the
EMI for the entire tenure. The scheme is for customers who want to dispose off their
vehicle at the end of the tenure but are looking at affordable EMIs during the tenure

4 LOW EMI SCHEME:

In this scheme, you make the payments of a few monthly installments upfront. The
balance is payable through Equal Monthly Installments. With the advance installments
you can repay your loan much faster.

5. SPECIAL SCHEMES OFFERED BY KMPL:

KMPL offers 100% finance at o% interest also on certain car models. These schemes are
based on certain terms and conditions and normally facilited by KMPL tie-ups with
manufacturers.

SPECIAL PRODUCTS

KMPL provides basically four types of special products.

1. USED CAR FINANCE:

36

KMPL is also financing on the used or old car. Where customer has to choose old car
from the market or from the companys authorized used car dealer. That car should
not be seven years old. In this scheme customer have to pay 25% margin amount of
the valuated price of the car and rate of interest of this scheme is quit higher then new
car scheme.

2. REFINANCE:
In this scheme KMPL refinance on the car where ownership of the car has not
changed. For this scheme customer should be existing customer of KMPL with
excellence repayment record. In this scheme customer get loan against his car.

3. PERSONAL LOAN:
This is a facility scheme for existing customer of KMPL. Where customer gets cash
loan of 60000Rs. To 200000Rs. (as per companys term) for this scheme customer
must have excellence repayment record.

4. WHOLESALE FUNDING:
Wholesale funding is an internal part of the overall funding process. Dealers need
finance for their day-to-day activities. They can use this facility to order the vehicles
and spare parts from the manufacturers. KMPL with appropriate system company is
well positioned with the market to provide wholesale finance to most of the dealers of
India.

PRICING

Pricing is a very important element in the marketing mix for it is the only, which
produces revenue all other elements being cost driven. Pricing decisions are
significant in determining the value for the customer and to play a role in the building
of an image for the service. Service firms need to use pricing more strategically to
help gain competitive advantage.

37

The guidelines for pricing policy and pricing strategies to attract business can be
found in the plan. Pricing is just one plan for marketing mix, which is used to support
and blend the other elements. Setting price is not a regular exercise and usually done
twice a year or with any economics change.
Pricing a finance facility/services is quite difficult as customers regard finance
company and finance company services as very much a like this increase the
importance of competitors price consideration while deciding own prices.

PRICING POLICY:
Although pricing policy takes its direction and its derived from the corporate plan
there are other factors which have to be taken into account. The two main factors to
be considered while pricing a service are the levels of demand and similar
competitive service. Other things considered are market sectors to be penetrated of
the market attractiveness. KMPL provides higher quality service so charges higher
prices.

PRICING POLICY ALTERNATIVES:

Once the basic pricing objectives have been considered and a review made of
demand, cost, competitors, price and costs and other relevant factors, the service
marketers need to consider the method by which prices will be set.
Such methods vary considerably in the services sector and typically include the
following:

38

COST PLUS PRICING:

Here the likely cost is calculated and a standard mark up is added to arrive at the
prices.
KMPL rely upon this method whereby the cost is found out and a standard markup is
added to derive the price. In case of repayment schedule, agreement copy etc likely
cause of manufacturing, are found out a reasonable rate is added to arrive at the
charges.

PLACE
The location and channel used to supply services to target customers are two key
decision areas. Location and channel decisions involves considering how to deliver
service to the customer and where this should take place. The way in which the major
finance companies distribute services is without doubt one of the most discussed
aspect of marketing, new technology is bringing with it new ways to distribute
services and opening up new markets.

39

During the next few years all the finance companies will slim down their networks
particularly to contain costs but also in recognition that market requirements are also
changing as a result of the increasing automation of money transmission services.
Moreover the types of distribution channel is also changing as the major finance
companies buy estates, upon up branches in cities, creates fully automated financing
offices and are currently introducing corporate offices designed to service the medium
to large corporate customers.
Place also has important as the environment in which the service is delivered and how
it is delivered are parts of the perceived value and the benefits of the service
marketers should seek to develop appropriate service delivery approaches that yield
competitive advantage for their firms.

CONSIDERATION WHEN DISTRIBUTING

FINANCIAL SERVIES
Marketing decisions relating to the distribution so services are inextricably linked
with how the other elements of the marketing mix are applying. In organization such
as a major retail finance company, distribution of services can be within geographical
option applied to the financing industry and it will remain a major distribution system

40

in future but the formal structure style and atmosphere will undoubtedly change.
Some financing services are inseparable from supplier i.e. sanctioning of the credit
required personal contact between the finance company or credit officer and
prospective customer.

KMPL has around 42 branches spread over 42 major cities in India. Company having
42 branches predicts a good distribution network. Apart from company has introduced
direct marketing associate or direct sales associates and car dealer itself to deliver the
products. In Surat, KMPL is present at Dhruv Motors, Bhavya Honda, and Nanavati
Motors and other car dealer.

PROMOTION

The promotion element of the services marketing mix forms a vital role. Promotion
adds significant and tangibility to services and helps customer make a better
evaluation of a services offer.
Promotion in financing occurs at two levels. The first is through central or head office
department or divisions, which are responsible of the major advertising budget. The
head office controls the publicity and the public relation activities. The second level
for promotional activity is in high street branches where managers are responsible for
41

supporting their marketing objectives with direct mailings, branch displays, banners,
personal selling, and other forms of promotion that might prove cost effective.

PROMOTION MIX

The ways a finance company communicates are though one or a combination of the
following channels:
1.
2.
3.
4.
5.
6.
7.

Press advertisements.
Professional journals, trade publications, magazines.
Exhibitions and hoardings.
Public relation, publicity, sponsorships.
Word of mouth.
Relationship marketing.
Television.

1. PRESS ADVERTISEMENT:
Press advertisement may either be in local or national newspapers. Usually finance
companies advertise twice in a week in local newspaper and advertise at a time when
any new scheme has been introduced in national newspaper. The choice of newspaper
is decided on the basis of customer profile, the reach of the newspaper, area where the
newspaper is circulated.

2. PROFESSIONAL JOURNALS/MAGAZINES:
Companies usually advertise in journals published by professional associations,
business magazines, and trade associations. Top-notch business executives, who
mainly from the customer of the company, read such as magazines. KMPL is major

42

finance companies that usually advertise in trade professional journals like Business
Today, Business India, Auto monitor and Monitoring etc.

3. EXHIBITIONS AND HOARDINGS:

KMPL usually participate in exhibition organized by trade associates. Billboard,
posters and hoardings are fixed at prime locations of the city. Company also put their
POP and other displays at car showrooms.

4. PUBLIC RELATIONS, PUBLICIY, SPONSORSHIPS:

Public relation means a deliberate planned and sustained effort to establish and
maintain mutual understanding between the organization and its public. Public
relation communication should be authentic to encourage trust and impact. Publicity
is securing of editorial space as divorced from paid space form in all media, read,
viewed or heard by finance companies customers or potential customers for a specific
purpose of assisting in meting of sales goals. Sponsorship varies considerably among
finance companies. Some sponsor sports, arts and other sponsor educational
programs, quiz etc.

KMPL being the oldest car finance company in India hardly needs any public relation
and public support. However it comes forth to sponsor various seminar programs
organized by association etc. KMPL as a part of public relation sends a copy of
quarterly company result statement account details, greetings and broachers of
finance schemes to the customers.

5. WORDOF MOUTH:
One of the most distinctive features of promotion in service business is the greater
importance of referral and word of mouth communication. The satisfied customer will
share his experience with different potential customer who might than try to transact
with the company. However customers are dissatisfied tend to tell more than twice as
many people of their poor experiences than who are satisfied relate good experiences.

43

KMPL has created a positive word of mouth as they have good customer care
approach. A separate counter of customer service has been paced in the company and
KMPL has excellence power to retain their valued customers and making them an
advocate of the company.

6. RELATIONSHIP MARKETING:
KMPL introduced the term relationship marketing only. It is relatively new and
evolving concept.
The emphasis of the company is moving from a transactional focus to a relationship
focus with an aim of term customer and car dealer relation. Over and above
customers and car dealers, the organization is busy building enduring relationship
with other external parties including suppliers, recruitment agencies and government
etc.

KMPL relies to a great extent on relationship marketing. They send to the customers
regularly a copy of their account statements, broachers, feed backs, privilege letters
and other information booklets of new scheme.

7. TELEVISION:
KMPL advertise at a time when any new scheme has been introduced. But Kotak
Mahindra Group of Companies advertises daily in different TV channels. E.g. Kotak
Mahindra sponsors Aaj Ki Baat, We the People etc. on Star Plus. The group of
companies advertisement shows its different product. It is also giving commercials
when a major event is going on like Cricket matches. Om Kotak Mahindra won Gold
Medal for best TV advertisement for the year 2001-2002.

44

A
45

STUDY OF SERVICES
PROVIDED BY
ICICI

ICICI BANK
INTRODUCTION:
ICICI Bank is India's second-largest bank with total assets of Rs. 3,446.58 billion (US$
79 billion) at March 31, 2007 and profit after tax of Rs. 31.10 billion for fiscal 2007.
ICICI Bank is the most valuable bank in India in terms of market capitalization and is
ranked third amongst all the companies listed on the Indian stock exchanges in terms of
free float market capitalization*. The Bank has a network of about 950 branches and
3,300 ATMs in India and presence in 17 countries. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail customers through a

46

variety of delivery channels and through its specialized subsidiaries and affiliates in the
areas of investment banking, life and non-life insurance, venture capital and asset
management. The Bank currently has subsidiaries in the United Kingdom, Russia and
Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International
Finance Centre and representative offices in the United States, United Arab Emirates,
China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary
has established a branch in Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).

HISTORY:

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry.

The principal objective was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI
transformed its business from a development financial institution offering only project
finance to a diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates like ICICI
Bank. In 1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE.

After consideration 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 managements 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 shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
47

income and the ability to participate in the payments system and provide transactionbanking services. The merger would enhance value for ICICI Bank shareholders through
a large capital base and scale of operations, seamless access to ICICI's strong corporate
relationships 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. The merger was approved by shareholders of ICICI
and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March
2002, and by the High Court of Judicature at Mumbai 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 single entity.

MARKET SEGMENTATION OF
ICICI
Depositors consists of very small savers to very big institutional depositors but the
bank prefers to build always core deposits, which will not fly away overnight on
account of minor variation in rates. For reasons of profitability and cost ICICI prefer
low cost/no cost deposits like SB, Current Accounts. Deposits from personal
segments are always encouraged and high volumes, high cost deposits are normally
discouraged. In deposit budgeting the ICICI normally aims to adopt the prudent
method of Saving Account, Current Account and Term Deposits.

48

In deployment of funds in advance ICICI ensures the safety and security and with the
aim of attracting business at PLR+. Now focus is on personal segment like housing
loan etc. very high exposures are done very selectively. Growth centers and potential.
The ICICI has formulated special schemes to meet loan requirements of individuals.

SERVICE MARKETING MIX OF

ICICI
The marketing mix represents the factors, which need to be considered when
determining the services firms strategy. Marketing mix consists of everything the
firm can do to influence the demand for its products. Four Ps of service marketing
are as under:

1.
2.
3.
4.

PRODUCT.
PRICE.
PLACE.
PROMOTION.

49

PRODUCT

ICICI provides a wide range of services to its various customers segments like Home
loans, Car loans, Two-wheeler loans, Personal loans, Life Insurance and other banking
services. But ICICI is very aggressive in Car Finance.
ICICI representatives will contact customers at the earliest to understand their
requirements in terms of vehicles, tenure of finance, amount financed and preference of
finance scheme. They can choose any of the 3 products.

1. HIRE PURCHAES:

50

In this product offer, company will buy the car and customer will use it under hire
purchase agreement with ICICI. The ownership will be transferred to customer after
customer pays the last rental. The benefits for him as a consumer in this product is that
customer can treat the hire charges (part of the rental) paid by customer as an expense in
their books of account and therefore eventually reduce the burden of tax levied on
customer. Depreciation can be claimed for the purpose, as applicable.

2. LOAN:
In this offer, customer can buy the car from the dealer with the loan amount sanctioned
by ICICI. The car will feature as an asset in customers book account, which will help to
claim depreciation for taxation purpose. Customer can also treat the interest component
of the rentals as an expense.

3 LEASE:
If customers opt for this product, the car will be owned by ICICI and will be leased to
customer on rent. Customer can avail of tax benefits, as entire rental will be accounted in
their books as an expense. The lease product is beneficial for profit making corporate.

This give schemes can be classified broadly in to two types:

1. MONEY MARGIN SCHEME:

In this scheme, company part finance customer car from 65% to 90% for certain models.
Customer will have to give them a down payment for the margin amount. The financed
amount can be repaid at customer convenience either through equated installments or a
differential plan that company can tailor for customer minimize their outflow.

2. SPECIAL SCHEMES OFFERED BY ICICI:

ICICI offers 100% finance-at 0% interest also on certain car models. These schemes are
based on certain terms and conditions and normally facilited by ICICI tie-ups with

51

manufacturers. ICICI offers 0% interest in certain products for one-year scheme as its
rate of interest is low and commission is quite high in the market.

SPECIAL PRODUCTS

USED CAR FINANCE:

ICICI is also financing on the used or old car. Where cutomer has to choose old car from
the market or from the companys authorized used car dealer. That car should not be
seven years old. In this scheme customer have to play 20% margin amount of the
valuated price of the car and rate of interest of this scheme is quite higher than new car
schemes.

REFINANCE:

52

In this scheme ICICI refinance on the car where ownership of the car has not changed.
For this scheme customer should be existing of ICICI as well as any finance company
with excellent repayment record. Cash customer can also avail this scheme. In this
scheme customer get loan against his car.

WHOLESALE FUNDING:
With the open economy of India nos of foreign car companies are set their
manufacturing basis in India. Wholesale funding is to help dealer to manage the
inventory.

PRICE

Pricing is a very important element in the marketing mix for it is the only, which products
revenue all other elements being cost driven. Pricing decisions are significant in
determining the value for the customer and to play a role in the building of an image for
the service. Service firms need to use pricing more strategically to help gain competitive
advantage.
Pricing a finance facility/services is quite difficult as customers regard finance company
and finance company services as very much a like this increase the importance of
competitors price consideration while deciding own prices.

53

ICICI has quite low rate of interest for car finance as well as other financial services. As
it is Indias second largest bank with total assets over Rs. 1 trillion and a network of about
540 branches and offices. ICICI also offer high commission on the loan amounts to its
dealer, DMA and brokers.

PLACE
ICICI has a huge network of over 540 branches and offices spread over the country.
ICICI being a largest private bank, the bank growth centers are identified. But ICICI is
doing car finance in 28 cities of India.

ICICI has appointed well-trained executives for counseling the prospective customers on
financial matters. It believes that in todays competitive world to survive, constant up
gradation is must. ICICI is available at leading car dealers; company also gives franchises
and makes direct marketing associates. In Surat, ICICI is present at nanavati motors,
dhruve motors, bhavya Honda etc.

54

PROMOTION

Promotion adds significant and tangibility to services and help customers makes a better
evaluation of the service offer. ICICI has a huge network all over the country. Its
branches/ extension counters or ATMs spread across the country. These serve as the retail
outlets. The main ways in which ICICI communicate with the customers are as under:

1. Press advertisements.
2. Professional journals, trade publications, magazines.
3. Exhibitions and hoardings
55

4.
5.
6.
7.

Public relation, publicity, sponsorship.

Relationship marketing.
Television.
ATMs.

1. PRESS ADVERTISEMENTS:
Press advertisement may either be in local or national news papers. Usually ICICI
advertise twice in a week with its franchise in local newspaper. The choice of newspaper
is decided on the basis of customer profile, the reach of the newspaper, area where the
newspaper is circulated.

2. PROFESSIONAL JOURNALS/MAGAZINES:
ICICI usually advertise in journals published by professional associations, business
magazines, and trade associations. Top-notch business executives, who mainly from the
customer of the company, read such magazines, ICICI is major finance companies that
usually advertise in trade professional journals like Business Today, India Today, and
Overdrive etc.

3. EXHIBITIONS & HOARDINGS:

ICICI usually participate in exhibition organized by trade associates. Billboard, posters
and hoardings are fixed at prime locations of the city. Company also put their POP and
displays at car showrooms.

4. PUBLC RELATIONS, PUBLICITY, SPONSORSHIP:

56

Public relation means a deliberate planned and sustained effort to establish and maintain
mutual understanding between the organization and its public. Public relation
communication should be authentic to encourage trust and impact.
Publicity is securing of editorial space as divorced from paid space form in all media,
read, viewed or heard by finance companies customers or potential customers for a
specific purpose of assisting in meting of sales goals.
Sponsorship varies considerably among finance companies. Some sponsor sports, arts
and others sponsor educational programs, quiz etc.

5. RELATIONSHIP MARKETING:
The emphasis of the company is moving from a transactional focus to a relationship focus
with an aim of ling term customer and car dealer relation. Over and above customer and
car dealers, the organizations are busy building enduring relationship with other external
parties including suppliers, recruitment agencies and government etc.

6. TELEVISION:
ICICI frequently advertise in numbers of TV channels. Mr. Amitabh Bachchan is
featuring in ICICIs add. But there is no specific TV advertisement for Car Finance.
Advertisement only shows ICICI group and its services.

7. ATMs:

57

ICICI has 1000 ATMs (Automatic Teller Machine) al over the country. Customer can get
information and inquire for car finance of ICICI through its ATM.

A
COMPARATIVE
58

STUDY OF SERVICES
PROVIDED BY
KMPL&ICICI

COMPARATIVE STUDY OF
ICICI &KMPL
There is quite diversity of services and working of both KMPL and ICICI even though
they are working in the same financing sector.
KMPL being a one of the old player of this Car Finance industry has lot of experience
and sophistication in its services and manner of executing them. Moreover being a
commercial and profit oriented NBFC. It looks after consumer satisfaction and hence
secures its profits.

59

ICICI is one of the largest private banks in India. It ahs lot of professionalism in its
services. But t has made a welfare attitude towards consumers. We shall now compare the
services provided by the finance companies and their approaches on the basis of all four
Ps of Marketing.

GENERAL COMPARISION

CREDIT EVALUATION:
KMPL is very conservative in credit. Credit officer evaluate customer worthiness based
on his documents. Normally KMPL require quite amount of documentation for credit. As
KMPL is a safe player it has very strong credit policy. Different types of customers
require different documentation shown below:

60

Document
Salaried Self
proprietary partnership Ltd/pvt
HUF trust
professionals concerns employed
.ltd
companies
Salary slips

Form 16

Add. proof

Sign proof

P&l
a/c&
balance
sheet
IT return

Partnership
deed
Letter
of
authority
MOA
&
board
resolution
Trust deed
photographs

ICICI is not so much conservative in credit evaluation. It requires quite low number of
documentation than KMPL:

Document
Salaried Self
proprietary partnership Ltd/pvt
professionals concerns employed
.ltd
companies
Salary slips

Form 16

Add. proof

61

Sign proof
P&l
a/c&
balance
sheet
IT return
Partnership
deed
Letter
of
authority
MOA
&
board
resolution
Photographs

KMPL is requiring quite more documentation than ICICI. ICICI is not funding to HUF
and Trust. As KMPL has strong credit evaluation delinquency level than ICICI and other
car finance companies. Credit evaluation is most important part in this industry.

FUNDING NORMS
As KMPL believing in safe business, it has quite strong funding norms on the vehicles.
Different vehicles have different margin norms as per tenure.

MODEL
800 STD/DX
OMNI

12
MONTHS
10%

24
MONTHS
10%

36
MONTHS
15%

48
MONTHS
15%

60
MONTHS
20%

10%

15%

15%

20%

25%

62

ZEN LX,
SANTRO,PALIO
1.2,.SWIFT
ZEN VX,
SANTRO GS,
PALIO 1.6
INDICA PTRL,
UNO PTRL
CITY, ACCENT,
ESTEEM, CORSA
LENCER,
BALENO, ASTRA,
ACCORD,
SONATA, CIVIC,
SKODA,OPTRA
SEINA

10%

10%

10%

15%

20%

10%

15%

15%

20%

25%

10%

15%

15%

25%

10%

15%

15%

20%

25%

10%

15%

15%

25%

25%

10%

15%

15%

25%

25%

15%

20%

25%

UNO DEISEL

15%

20%

25%

INDICA DEISEL

15%

15%

20%

MERCEDEC
BENZ
QUALIS,INNOVA,
SUMO, TAVERA
IMPORTED
VEHICLES
USED CARS

15%

15%

20%

25%

30%

10%

15%

15%

20%

25%

15%

20%

30%

15%

20%

30%

As ICICI believing in volumes, it has quite liberal funding norms on various vehicles.
MODEL

12
MONTHS
10%

24
MONTHS
10%

36
MONTHS
10%

48
MONTHS
10%

60
MONTHS
10%

OMNI

10%

10%

10%

10%

15%

ZEN LX,
SENTRO,PALIO
1.2,.SWIFT
ZEN VX,
SANTRO GS,
PALIO 1.6

10%

10%

10%

10%

15%

10%

10%

10%

10%

15%

800 STD/DX

63

INDICA PTRL,
UNO PTRL
CITY, ACCENT,
ESTEEM, CORSA
LENCER,
BALENO, ASTRA,
ACCORD,
SONATA, CIVIC,
SKODA,OPTRA
SEINA

10%

10%

10%

10%

15%

10%

10%

10%

10%

15%

10%

15%

15%

25%

25%

10%

10%

10%

15%

20%

15%

20%

25%

35%

UNO DEISEL

15%

20%

20%

25%

25%

INDICA DEISEL

15%

15%

20%

25%

MERCEDEC
BENZ
QUALIS,INNOVA,
SUMO, TAVERA
IMPORTED
VEHICLES
USED CARS

10%

15%

15%

20%

25%

10%

10%

15%

20%

25%

15%

20%

30%

15%

20%

30%

ICICI can get volumes by the help of its funding norms.

CUSTOMER SERVICE
KMPL has dedicated car finance company since last 18 years. Customer service is
paramount objective of KMPL. Branches have customer service representatives who
provide timely services to any query as required. There is a Central Customer Service cell
at the head office to monitor and manage all customer related matters including large
comparative relationship. In financial year 2000-2001 KMPL was rated third among Auto
Finance Service Sector in JD Power Asia-Pacific. Kotak Mahindra Prime Ltd. has been
awarded the Voice of Customer award for Best Passenger Vehicle Finance Company in
India 2006 by Frost & Sullivan (F&S) on 16th Feb07

64

ICICI handles its customer very sophistically. All new customers are sent value pack and
welcome letters along with feed back forms periodically. As ICICI has various finance
services it cannot give significant focus on customer care. In financial year 2000-2001
ICICI was rated seventh (Below Industry Average) among Auto Financial Service Sector
in JD Power Asia-Pacific. ICICI was rated first in same analysis in 1999-2000 & 20042005.

KMPL has maintained its customer service profile since last 18 years. On the other hand
ICICI is not able to maintain its number 1 positioned in customer services.

COMPARISION OF SERVICES/PRODUCTS

At KMPL, the objective is to help finance customer dream car in the simple way. Thats
why KMPL offer tailor made schemes with repayment over 12 to 60 months. Various
schemes of KMPL are as under:
1. Margin money scheme.
2. Security deposit scheme.

65

3.
4.
5.
6.
7.
8.
9.

Advance equated monthly installment scheme.

Balloon payment scheme.
Special scheme of KMPL.
Personal loan.
Used car finance.
Refinance.
Wholesale funding.

ICICI also has various finance schemes with repayment over 12 to 60 months. They are
as under.
1.
2.
3.
4.
5.
6.

Margin money scheme.

Balloon payment scheme.
Special scheme of ICICI (0%finance).
Used car finance.
Refinance.
Wholesale funding.

KMPL is more flexible and has tailor made schemes to offer its customers.

PRICE
KMPL has a good nose of margin. Hence its rate of interest and schemes are competitive
in the industry. KMPL gives reasonable commission to its dealer or DMA on their total
business. Competitive rate of interest on various segments of vehicles for retail finance
are as under:

SEGMENT

12

24

36

48

60

66

MONTHS
12.75%

MONTHS
12.75%

MONTHS
12.75%

MONTHS
13.50%

MONTHS
14.00%

MID SIZE

12.50%

12.50%

12.75%

13.25%

13.75%

PREMIUM

12.50%

12.50%

12.75%

13.25%

13.75%

SUPER
PREMIUM
USED

12.25%

12.25%

12.25%

13.00%

13.50%

17.50%

18.50%

18.50%

REFINANCE

18.00%

18.50%

19.00%

SMALL

KMPL finances wholesale finance to its car dealer @15%.

ICICI has welfare kind of approach towards its customers. ICICI offer commission to its
dealer or DMA on their total business. Competitive rate of interest on various vehicles are
as under.

SEGMENT
SMALL
MID SIZE

12
MONTHS
13.00%

24
MONTHS
13.00%

36
MONTHS
13.75%

48
MONTHS
13.75%

60
MONTHS
13.75%

12.75%

13.50%

13.505

13.50%

13.50%

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PREMIUM

12.50%

13.25%

13.25%

13.25%

13.25%

SUPER
PREMIUM
USED

12.50%

13.25%

13.25%

13.25%

13.25%

17.50%

18.50%

18.50%

REFINANCE

18.00%

18.50%

19.00%

ICICI finances wholesale finance to its car dealer @ 14%.

As ICICI quite cheaper than KMPL and also offer good commission, it helps to make
comparative volume to stand with old player like KMPL. In wholesale finance KMPL is
more preferable because of its excellence and appropriate system, which helps the car
dealer. Hence it is 1% expensive than ICICI.

PLACE
KMPL has around 52 branches spread over 16 major cities in India. Company having 52
branches predicts a good distribution network. Apart from company has introduced direct
marketing associates or direct sales associates and car dealer itself to deliver the products.
In Surat KMPL is present at all major car dealer like Nanavati motors, Empire motors,
President motors, Desai motors., Blitz , Kataria motors, Dhru motors, Bhavya Honda,
Bhavna ford, and so and so forth.

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ICICI has appointed well-trained executives for counseling the prospective customers on
financial matters. It believes that in todays competitive world to survive, constant up
gradation is must. ICICI is available at leading car dealers; company also gives franchises
and makes direct marketing associates. In Surat ICICI is present at Kataria motors, Dhru
motors, Blitz, Bhavya Honda, Bhavna ford and so and so forth.

PROMOTION

KMPL communicates are through one or a combination of the following channels:

1. Press advertisement.
2. Professional journals, trade publications, magazines.
3. Exhibitions and hoardings.
4. Public relation, publicity, sponsorship.
5. Word of mouth.

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6. Relationship marketing.
7. Television.

KMPL is mainly doing promotion through press advertisement, public relation and
relationship marketing. KMPL is doing very good business with word of mouth. It is
doing very good business from its existing customers by giving them excellence services.
As KMPL is well experience company of finance industries it does not want to spend
money for doing advertisement for its brand. It gives advertisement to generate the
prospective customers inquiry.
ICICI has a huge network all over the country. Its branches/extension counters or ATMs
spread across the country. These serve as the retail outlets. The main way in which ICICI
communicates with the customers is as under:
1.
2.
3.
4.
5.
6.

Professional jouranals, trade publications, magazines.

Exhibitions and hoardings.
Public relation, publicity, sponsorships.
Relationship Marketing.
Television.
ATMs.

ICICI is doing mainly its through press advertisement, putting hoardings at car dealer or
public place. ICICI is mainly doing promotion for its brand and to create new customers,
as it is new in this market.

CONCLUSION AND FINDINGS

It has been good experience studying and analyzing various services offered and
strategies adopted by KOTAK MAHINDRA PROME LTD and ICICI.
On studying the both finance companies, using their broachers and pamphlets to find out
the general ambience and the attitude of the both companies I have come to the following
conclusions.

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 KMPL being experienced company in this industry has very professional attitude
towards car financing.
ICICI create very good hold in the car finance market and on the car dealer in
very short time.
KMPL being good profit oriented company and hence emphasis on consumer
satisfaction and relationship marketing. ICICI on the other hand being giant bank
is not a profit oriented company in this car finance industry.

BIBLIOGRAPHY
We have relied on various data sources for the preparations of the project report like:
Brochures and pamphlets of KMPL & ICICI.
Magazines like Auto monitor, Business India.
A reference book named MARKETING MANAGEMENT BY SIR PHILIP
KOTLER.
Various schemes of dealers.

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