Service Marketing in Banks PDF

SERVICE MARKETING IN BANKS
Ch.1. INTRODUCTION TO THE BANKING IN INDIA
Banks are the most significant players in the Indian financial market.
They are the biggest purveyors of credit, and they also attract most of the
savings from the population. Dominated by public sector, the banking industry
has so far acted as an efficient partner in the growth and the development of the
country. Driven by the socialist ideologies and the welfare state concept, public
sector banks have long been the supporters of agriculture and other priority
sectors. They act as crucial channels of the government in its efforts to ensure
equitable economic development.
Bank is defined as “one who in ordinary course of business honors the
cheques drawn upon him by person from and for whom he receives money on
current accounts”
“Banking means accepting for the purpose of lending or investment, of
deposits of money from the public, repayable on demand or otherwise and
withdraw able by cheques, drafts, order or otherwise”.
The Indian banking can be broadly categorized into nationalized
(government owned), private banks and specialized banking institutions. The
Reserve Bank of India acts a centralized body monitoring any discrepancies
and shortcoming in the system. Since the nationalization of banks in 1969, the
public sector banks or the nationalized banks have acquired a place of
prominence and has since then seen tremendous progress. The need to become
highly customer focused has forced the slow-moving public sector banks to
adopt a fast track approach. The unleashing of products and services through
the net has galvanized players at all levels of the banking and financial
institutions market grid to look anew at their existing portfolio offering.
Conservative banking practices allowed Indian banks to be insulated partially
from the Asian currency crisis. Indian banks are now quoting al higher
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valuation when compared to banks in other Asian countries (viz. Hong Kong,
Singapore, Philippines etc.) that have major problems linked to huge Non
Performing Assets (NPAs) and payment defaults. Co-operative banks are
nimble footed in approach and armed with efficient branch networks focus
primarily on the ‘high revenue’ niche retail segments.
The Reserve Bank of India acts as a centralized body monitoring any

discrepancies and shortcoming in the system. It is the foremost monitoring
body in the Indian financial sector. The nationalized banks (i.e. government-
owned banks) continue to dominate the Indian banking arena. Industry
estimates indicate that out of 274 commercial banks operating in India, 223
banks are in the public sector and 51 are in the private sector. The private
sector bank grid also includes 24 foreign banks that have started their
operations here.
The liberalize policy of Government of India permitted entry to private

sector in the banking, the industry has witnessed the entry of nine new
generation private banks. “The major differentiating parameter that
distinguishes these banks from all the other banks in the Indian banking is
the level of service that is offered to the customer. Their focus has always
centered around the customer – understanding his needs, preempting him
and consequently delighting him with various configurations of benefits and
a wide portfolio of products and services.” These banks have generally been
established by promoters of repute or by ‘high value’ domestic financial
institutions.
Ch.2. METHODOLOGY
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• The study of Service Marketing in Banks requires technical & conceptual

understanding of term service marketing for which a good deal of
information need to collected.
• Researcher collects secondary data through various books and also from
websites (Internet).
• Secondary Data are those, which have already been collected by
someone else and which have already been passed through the statistical
process. This data is collected from the following sources.
a) Reports of ICICI BANK
b) Magazines
c) Journals
d) Newspapers
OBJECTIVES:
The objective of this project study is to enable the researcher:

• To understand what is Service Marketing.
• To know about service marketing in ICICI Bank.
• To know the importance of service marketing in banks.
SCOPE:
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• The scope of this project extends only upto ICICI Bank.

• Study is restricted only upto Service Marketing in Banks.
• It will help to understand the concept of service marketing in banks with
an example of ICICI Bank and to know the new trends in ICICI Bank &
Awards and Recognitions given to ICICI Bank.
LIMITATIONS:
• This project study is limited to the extent of guidelines issued by

University of Mumbai.
• Adequate primary data was not available.
Ch.3. PEST ANALYSIS
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TECHNOLOGICAL ENVIRONMENT
Technology plays a very important role in bank’s internal control

mechanisms as well as services offered by them. It has in fact given new
dimensions to the banks as well as services that they cater to and the banks are
enthusiastically adopting new technological innovations for devising new
products and services.
The latest developments in terms of technology in computer and

telecommunication have encouraged the bankers to change the concept of
branch banking to anywhere banking. The use of ATM and Internet banking has
allowed ‘anytime, anywhere banking’ facilities. Automatic voice recorders now
answer simple queries, currency accounting machines makes the job easier and
self-service counters are now encouraged. Credit card facility has encouraged
an era of cashless society. Today MasterCard and Visa card are the two most
popular cards used world over. The banks have now started issuing smartcards
or debit cards to be used for making payments. These are also called as
electronic purse. Some of the banks have also started home banking through
telecommunication facilities and computer technology by using terminals
installed at customers home and they can make the balance inquiry, get the
statement of accounts, give instructions for fund transfers, etc. Through ECS we
can receive the dividends and interest directly to our account avoiding the delay
or chance of loosing the post.
Today banks are also using SMS and Internet as major tool of promotions
and giving great utility to its customers. For example SMS functions through
simple text messages sent from your mobile. The messages are then recognized
by the bank to provide you with the required information.
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All these technological changes have forced the bankers to adopt

customer-based approach instead of product-based approach.
ECONOMICAL ENVIRONMENT
Banking is as old as authentic history and the modern commercial

banking are traceable to ancient times. In India, banking has existed in one form
or the other from time to time. The present era in banking may be taken to have
commenced with establishment of bank of Bengal in 1809 under the
government charter and with government participation in share capital.
Allahabad bank was started in the year 1865 and Punjab national bank in 1895,
and thus, others followed
Every year RBI declares its 6 monthly policy and accordingly the various
measures and rates are implemented which has an impact on the banking sector.
Also the Union budget affects the banking sector to boost the economy by
giving certain concessions or facilities. If in the Budget savings are encouraged,
then more deposits will be attracted towards the banks and in turn they can lend
more money to the agricultural sector and industrial sector, therefore, booming
the economy. If the FDI limits are relaxed, then more FDI are brought in India
through banking channels.
POLITICAL/ LEGAL ENVIRONMENT
Government and RBI policies affect the banking sector. Sometimes

looking into the political advantage of a particular party, the Government
declares some measures to their benefits like waiver of short-term agricultural
loans, to attract the farmer’s votes. By doing so the profits of the bank get
affected. Various banks in the cooperative sector are open and run by the
politicians. They exploit these banks for their benefits. Sometimes the
government appoints various chairmen of the banks.
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Various policies are framed by the RBI looking at the present situation of
the country for better control over the banks.
SOCIAL ENVIRONMENT
Before nationalization of the banks, their control was in the hands of the
private parties and only big business houses and the effluent sections of the
society were getting benefits of banking in India. In 1969 government
nationalized 14 banks. To adopt the social development in the banking sector it
was necessary for speedy economic progress, consistent with social justice, in
democratic political system, which is free from domination of law, and in which
opportunities are open to all. Accordingly, keeping in mind both the national
and social objectives, bankers were given direction to help economically
weaker section of the society and also provide need-based finance to all the
sectors of the economy with flexible and liberal attitude. Now the banks provide
various types of loans to farmers, working women, professionals, and traders.
They also provide education loan to the students and housing loans, consumer
loans, etc.
Banks having big clients or big companies have to provide services like
personalized banking to their clients because these customers do not believe in
running about and waiting in queues for getting their work done. The bankers
also have to provide these customers with special provisions and at times with
benefits like food and parties. But the banks do not mind incurring these costs
because of the kind of business these clients bring for the bank. Banks have
changed the culture of human life in India and have made life much easier for
the people.
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Ch 4. MARKET SEGMENTATION
An organization is supposed to cater to the changing needs of customers;

it is only natural that all customers have their own likes and dislikes. They have
some uniqueness, which throws a big imprint on their lifestyles. This makes the
task of understanding a bit difficult. It has the context that we go through the
problem of market segmentation in the banking service.
The study of the needs of customers invites a plethora of problems since

in addition to other aspects; the regional considerations also influence the
hierarchy of needs. To be more specific in the banking services, the banking
organizations are supposed to satisfy different types of customers living in
different segments. The segmentation of market makes the task of bank
professionals easier. If the market segmentation is done in a right fashion, the
task of satisfying the customers is simplified considerably. The modern
marketing theories advocate the formulation of marketing policies and
strategies for each segment, which an organization plans to solicit.
The marketing segmentation is based in the principle of divide and rule.

If we divide the market into different segments, the size of market is made
small and the process of study is found convenient. We find market
segmentation division and subdivision of a market based on considerations. The
bank professionals have to segment the market in such a way that the
expectations of all potential customers are studied in a right perspective and the
marketing resources are developed to fulfill the same. The marketing efforts can
be made more proactive if the process and bases of segmentation are right.
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It is essential that the bank professionals assign due weightage to the

difference that we find in the market behavior due to geographical, age, sex,
nationality, educational background, income classes, occupation, social and
other considerations. If they overlook or underestimate key bases while
segmenting, the study results can’t be proactive to the formulation of creative
marketing decisions. This makes it essential that the bank professionals are well
aware of the criteria for market segmentation. The agriculture sector, industrial
sector, services sector, household sector are found important in the very
context. The gender segment is found important no doubt but we can’t
underestimate institutional and professional segments. Since the banking
organizations serve different sectors and segments, the segmentation should be
done carefully.
IMPORTANCE OF SEGMENTATION:-
 Instrumental in exploring opportunities: We find market

segmentation very much effective in exploring the profitable
opportunities. It is well known to us that while segmenting, the market
is divided into different groups and sub-groups and this simplifies the
process of studying and understanding the customers in a right
perspective. If we know about the rural segment, the opportunities are
explored to the rural areas. If we know about the women segment, the
opportunities are identified in that area. If we know about the low-
income group, the opportunities are identified in that group. Thus the
segmentation helps the bank professionals in exploring the profitable
opportunities.
 Instrumental in designing a sound marketing strategy: We can’t
deny that market segmentation makes it easier to formulate a sound

strategy. Since the banking professionals are aware of the changing
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needs and requirements of a segment, the marketing resources can be

developed in tune with the needs and requirements of a segment. The
formulation of a package is found significant and the bank
professionals can do it successfully on the basis of market
segmentation. The promotional measures can be satisfied in the face
of receiving capacity of a particular segment. The pricing strategy can
be made operational and the sales promotion measures can be made
productive.
 Helpful to the policy planners: In addition, the policy makers also
find segmentation since they are well aware of the emerging trends in
the business environment. They get detailed information about the
changing needs and requirements of a segment. The planning is an on
going process. The banking professionals transmit necessary
information to the policy planners, which simplifies the process of
making a sound policy.
 Enriching the market resources: In addition to other aspects, we find
segmentation instrumental in enriching the marketing potentials. If we

know about the preference, needs, requirements, attitudes, lifestyles it
is found easier for us to develop the marketing resources accordingly.
This in a natural way makes it convenient to develop marketing
resources. The process of innovation can be activated. The services,
the promotional measures, the pricing tool and the process of offering
can be made more competitive. The development of world-class
marketing resources thus makes it convenient to influence the impulse
of prospects. The bank professionals find it easier to get the positive
results for their productive marketing efforts.
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Ch. 5. MARKETING OF BANKING SERVICES

In the earlier days, bankers like any other private sector
organizations had their own plans of business development and adopted their
own ways and means to achieve their objective. The MARKETING concept
was in the form of advertising & promotion. This was the position till the
middle of 20th century.
Gradually there was a change in the attitude of bankers with respect
to customers. In the late 1950s, new concept in the Marketing Services with
respect to banking profession, arose in the West. Deryk-Weyer of Barcelays
Bank came out with a comprehensive definition of BANK MARKETING.
According to him, Bank Marketing consists of –
1] Identifying the most profitable markets now and in future,
2] Assessing the present and future needs of the customers,
3] Setting business development goals,
4] Making plan to meet them and managing the various services and promoting
them to achieve the plans- all in the context of changing environment in the
market.Thus, the idea of customer satisfaction arose in the 1950s, flourished in
the 1960s and became an integral part of Banking Services in 1970s. In the
course of time, the concept of Marketing widened further. From the stage of
customer satisfaction, the Marketing become more concerned with the well-
being of the “Society” as a whole & resulted in coining the term “SOCIETAL
MARKETING”. Hartley would call it as “Response Marketing” attuning with
or responding to the changing needs of customer’s society and environment.
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Marketing of banking services is concerned with product, place,

distribution, 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 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 prospect. It is also related with the place decisions
i.e. location of a bank at a suitable points. It has following unique features:-
1] Intangibility
2] Inseparability
3] Variability
4] Perishability
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With liberalization and globalization of the economy, middlemen are

gradually emerging in the banking industry. Foreign banks and new private
banks like City Bank, Global Trust Bank and ICICI Bank are offering their
franchise in marketing their services. This has introduced the middlemen in
marketing of banking services.
In banking services, the marketing strategy starts with developing

customer profiles by which the bank can collect and analyse all relevant
information on customers. The preferences and prejudices of the customers are
identified with the help of these profiles and this enables the bank to enhance its
marketing activities. In order to satisfy the customers’ needs new services may
be introduced or the existing services of the bank may be modified. Customer
satisfaction plays an important role in banking services.
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Ch. 6. 7 P’S of BANKING
It is very important for any bank to identify the 7 P’s of services so was
understands their customers better and provide them with best of service. The 7
P’s are:
1. PRODUCT MIX
2. PRICE MIX
3. PLACE
4. PROMOTION
5. PEOPLE
6. PROCESS
7. PHYSICAL EVIDENCE
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PRODUCT MIX:
A Product can be defined as the bundle of utilities consisting of various

product features accompanying services. The product mix of a company
includes all different product lines a company offers to its customers. The
product line of a bank might easily include more than 100 different services.
Bank services are viewed with not just things that are created with value but
they are seen in terms of satisfaction they deliver. In today’s competitive
scenario it has become very necessary for a bank to provide it’s customers with
a wide variety of services and the best technology in order to attract them.
BANKS PRODUCT:
[A] DEPOSITS:-
1] Time Deposits.
[B] ADVANCES:-
They are of two types:
I] Fund Oriented:
a] Term Loan,
b] Clean Loan,
c] Bill Discounting,
d] Advances,
e] Pre-shipment finance,
f] Post-shipment finance, and
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g] Secured and Unsecured lines of credit.

II] Non-Fund Oriented:
a] Guarantees, and
b] Letter Of Credit.
[C] INTERNATIONAL BANKING:-

I] Letter Of Credit, and
II] Foreign Currency
[D] CONSULTANCY:-
I] Investment Counselling,
II] Project Counselling,
III] Merchant Banking, and
IV] Tax Consultancy.
[E] MISCELLANEOUS:-
I] Traveller cheques,
II] Credit Card,
III] Remittances,
IV] Collections,
V] Sale of drafts,
VI] Standing Instructions, and
VII] Trusteeship.
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PRODUCT LEVELS
CORE PRODUCT LEVEL:-

It is the main or core reason why the customer will buy the service of the
bank. More like the basic purpose or necessity. The core product level provides
the platform for the development of other peripheral levels.
EXPECTED PRODUCT LEVEL:-

This level reflects the standard required or expected by the customers to
satisfy their needs and wants. It is the minimum set of expectations a customer
has about a product or service which the marketer must strive to satisfy. If the
service offer fails at this level it will mean immediate dissatisfaction.
AUGMENTED PRODUCT LEVEL:-

It includes the fundamental services and benefits that distinguishes the
company’s offer from the competitor’s offer. This product is basically a formal
product with some ancillary benefits or extra features attached to it. These value
additions are made in order to make the service more attractive to customers.
The service provider should make continuous efforts to search for further
features and benefits in order to add to their offer.
POTENTIAL PRODUCT LEVEL:-
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The potential product focuses on the future. When a product exceeds

the augmented level it comes as a pleasant surprise to their customer and he is
delighted leading to his loyalty towards the product. For an example, the
customer will be delighted to receive a special discount on his next visit, if his
bill exceeds a particular amount.
PRODUCT LEVEL
CORE PRODUCT LEVEL:- 1] Banking space,

2] Lonable funds,
3] Safety of deposits.
EXPECTED PRODUCT 1] Correct transaction recording,
LEVEL:- 2] Timely service,
3] Designated banking hours,
4] Minimum courtesy.
AUGMENTED 1] Cogenial waiting room,
PRODUCT LEVEL:- 2] Friendly employees,
3] ‘May I help you’ attitude,
4] Welcome note,
5] Relationship orientation,
6] Admission of faults in event of a
mistake.
POTENTIAL 1] Occasional greetings at home,

PRODUCT LEVEL 2] The ‘How are you Mr. X’ culture,
3] Surprise Gifts,
4] Readiness to go out of the way to satisfy
the individual customer.
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Thus it can be seen how a particular product passes through different levels. In
today’s competitive scenario most banks try offering services at the Augmented
and Potential level.
PRICE MIX:
The price mix in the banking sector is nothing but the interest rates
charged by the different banks. In today’s competitive scenario where customer
is the king, the banks have to charge them interest at a rate in accordance with
the RBI directives. Banks also compete in terms of annual fees for services like
credit cards, DMAT etc. Another important aspect of the bank’s pricing policy
today is the interest charged on the Home Loans and Car Loans. With India’s
economy progressing, there are more and more buyers seeking these loans but
at a very competitive interest rate.
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The Reserve Bank of India and the Indian Banking Association are
concerned with respect to the pricing in banks. Pricing policy of a bank is
considered important for raising the number of actual customers.
The potential customer or investors generally frame their investment
decisions on the basis of interest to be received on the investments. While
framing a pricing policy different pricing methods can be used. In cost plus
pricing a detailed analysis of cost structure of various banks products and
services is to be done.
In case of competition related approach, the price is decided on the
competitor’s price.
The banks are required to frame two fold strategies. Strategies

concerned with interest and commission to be paid to the customers and interest
or commission to be paid by the customer for different types of services.
Let’s understand this with an example. A particular buyer approaches a

bank for a car loan for a period of 3 years. He is charged Rs. 20,000 as interest.
However, if a sale representative of another bank comes to know of this deal, he
will try to attract the customer by giving him a better deal i.e. a loan at a lower
rate on interest. In this way, it is the customer that ultimately benefits.
The pricing factor is very important because of the kind of competition

that is prevailing today in the Indian market. However it is very important to
understand that in the banking sector, the main pricing policy is concerned with
the interest rate charged. This interest rate is however regulated by the
RESERVE BANK OF INDIA and THE INDIAN BANKING ASSOCAITION.
Any one particular bank or a group of banks does not regulate it. The interest
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rate charged cannot be higher than that decide by the RBI and the INDIAN
BANKING ASSOCIATION.
Thus, inspite of the constraints in the pricing policy due to the RBI
directives there are mainly three types of pricing methods adopted by banks.
They are:
Value pricing:
Banks having unique or different products or schemes mainly do this type
of pricing. They usually charge a combination of high and low prices depending
on the customer loyalty as well as the products. This type of pricing strategy is
usually coupled with promotion programmes.
Going Rate pricing:

The most commonly used pricing technique is the going rate pricing. In
going rate pricing, the bank bases its price largely depending on the
competitor’s prices. The banks however have to stay within the RBI directives
and compete. The banks may charge higher or lower than their competitors.
After 1991 when the foreign banks entered the Indian market this method of
pricing has gained increasing importance.
Mark up pricing:
This is a pricing technique wherein the cost of the service is determined
and a small margin is added to it and then the final price is offered to the
customers. This type of pricing is the not very popular since in the banking
sector it is not very easy to arrive at the cost of the service. Thus most banks use
a combination of mark – up pricing and going rate pricing.
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THE MOST FAVORABLE PRICING STRATEGY
This model shows a pricing strategy, which should be adopted in order to

ensure maximum satisfaction to both the bank as well as the customers.
The price should be set in such a manner that the customer is assured that
he is not being cheated or overcharged by the bank and at the same time the
bank is able to reap maximum profits. Such a pricing stand helps the bank get
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maximum sales as well as profits since the customer feels that by entering such
a transaction he is winning.
PLACE MIX:
Place mix is the location analysis for banks branches. There are number a
factors affecting the determination of the location of the branch of bank. It is
very necessary a bank to situated at a location where most of its target
population is located.
Some of the important factors affecting the location analysis of a bank
are:
1. The trade area

2. Population characteristics
3. Commercial structure
4. Industrial structure
5. Banking structure
6. Proximity to other convenient outlets
7. Real estate rates
8. Proximity to public transportation
9. Drawing time
10.Location of competition
11.Visibility
12.Access
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It is not necessary that all the above conditions have to be satisfied

while selecting the location but it should be tried to satisfy as many of them as
possible.
1. The Trade Area:

The trade area is a very important factor determining the place
where a bank branch should be set up. For e.g. a particular location maybe a
huge trading place for textiles, diamonds or for that case even the stock market.
Such locations are ideal for setting up of bank branches.
2. Population Characteristics:
The demography of a place is a very important factor. This
includes:
 The income level of the population

 The average age
 The average male female population
 The caste, religion, culture and customs
 The average spending and saving habit of the people.
These factors are very important for a bank as the help them decide the
kind of business the branch will get.
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3. Commercial Structure:
The commercial structure refers to the level of commerce i.e.
business activities taking place at a particular location. The higher the level of
business activities taking place in a particular location the more preferable it is
for setting up a bank branch.
4. Industrial Structure:
This is nothing but a combination of the trade area analysis and
the commercial structure. However the industrial structure focuses more on the
kind of industries operating in a particular location. For example, an area like
SEEPZ is marked with a lot of electronic manufacturing units.Thus the
industrial stricture determines the kind of financial transactions that could take
place in a particular location.
5. Banking Structure:
The Banking structure refers to the existence of other banks in
the area. Whether there is already an efficient network of other bank branches
operating at that particular area. Thus the overall infrastructure needed for the
working of a bank.
6. Proximity of other convenient outlets:

This refers to the other branches of the same bank as well other
commercial, entertainment and industrial outlets.
7. Real Estate Rates:
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This is mainly dealing with the cost factor involved in opening

up a bank branch at a particular location. The real estate rate is a very strong
factor influencing the location decision for a bank branch.
8. Proximity to public transportation:

The location should be proximate to public transportation
facilities. This means it should have bus stops close by as well as it should be
proximate to railway stations so as to make it convenient for the common man.
9. Drawing Time:
Drawing time refers to the time period during which a
customer can draw money from the banks. It should be convenient to the
customer and somewhat flexible to accommodate the customer’s needs. No
bank has more than a certain amount with them and in case a customer wants to
withdraw an amount more than that available with the bank, the bank needs to
draw that amount from other banks. Hence, a location must be such that it
facilitates minimum drawing time.
10. Location of Competition:

The existence of other banks also means competition. If the
level of competition is very high in a particular location, it is necessary that a
bank does a lot of market research before opening a branch so as to estimate the
kind of business it would get.
11. Visibility:
The location of a branch should be such that it is visible and
easily noticed by the customers as well other people.
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12. Access:
The bank branch should be very easily accessible to the
customers. If this is not the case, the customer might switch to some other bank,
which is more convenient to him and very easily accessible. The location
should be such that it is very convenient for the customer to reach.
Promotion Mix:
INTRODUCTION:-
Consumer behavior is very complex phenomenon, which is considered

primarily in marketing decisions. It has been rightly said "Understand, you do
not understand, you will not understand, you cannot understand all your
customers but still you have to do your best to understand them."
In consumer behavior this is very difficult to make a uniform theory that

may suggest that a particular individual or group will behave in a particular
manner. Consumer behavior is dynamic and to be studied regularly. Increasing
awareness, living standards and urbanization has led to increase in the changing
preferences and the same has forced the marketers to change their product
features, packaging styles, distribution channels and so on. There is a famous
saying the "Success has a simple formula-Do your best and people must like it".
Similarly, for marketers the advice is- offer the best and customers must like it'.
Identical products always have their life cycle the product life cycle suggests
that there is a level of maturity of the product and after that no more consumers
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can be attracted for that. The case is very same with preferences of consumers
that they always like some innovative and different products to use. The study
of consumer behavior is compulsory to know about likes and dislikes of
consumers from time to time so that the products and services can be offered
accordingly. Customers have their own unique needs, demands and preferences
in a particular segment. Marketers have to study customers in particular
segment. Really interesting it is, the study of consumer behavior can make it
possible that after observing and examining the behavior of consumer a
marketer can present his product in such a way that the product can capture the
market. However it was very difficult to sell that product earlier. Consumer
behavior indeed gives every possible answer to the complex questions
concerned with consumer's buying reasons.
The following diagrammed will tell about the all marketing decisions
taken in services industry or banking services. These all are essential decisions
which are concerned are essential ingredients of services marketing mix. The
analysis has been done in the context of banking services.
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When customer is treated as the king of the market, the study of

consumer behaviour becomes more important for marketing decisions. There is
no doubt that the behaviour is the base of marketing decisions.
Promotion is nothing but making the customer more and more aware of the
services and benefits provided by the bank. The banks today can use a lot of
new technology to communicate to their customers.
A bank may have very attractive schemes and services to offer to their
customers but they are of no use if they are not communicated properly to the
customers. Promotion is o inform and remind the individuals and persuade them
to accept, recommend or use of product, service or idea. However there some
very important points that is to be considered before the promotion strategy is
made. These points are:
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Finalizing the Budget:
Before the bank decides the kind of promotion that should be done, it
very important to finalize the budget for it. The formulation of a sound budget
is essential to remove the financial constraints in the process. The budget is
determined on the basis of volume of business of the bank. In addition to this
the intensity of competition also plays a decisive role.
Selecting a suitable vehicle:
Another very important task is to select a suitable vehicle for driving the
message. There are a number of devices to advertise such as broadcast media,
telecast media and the print media. The selecting of the mode of advertising is
strongly influenced by the kind of budget decided. Usually for promoting banks
the most effective and economical form of advertising has been the print media.
Making possible creativity:
Making possible creativity is nothing but the kind of slogans, punch lines
etc. that are supporting the message. They should be very creative but yet
simple to be understood by the common man. It should appeal to the customers.
It should be distinct from that of the competitors and should be successful in
informing and sensing the customers.
Testing the Effectiveness:
It should be borne in mind that the advertisement is first tested for its
effectiveness. This should be done with the help of various techniques like
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testing effectiveness on a sample group. This helps determine the success of the
advertisement and in case of any problem the advertisement can be altered and
remedied.
Instrumentality of Branch Managers:
At a micro level, it is the responsibility of the branch managers to

promote and drive the message to the people in the local area. They should
organize small programs in order to attract people and crate awareness in the
local area about the new schemes of the bank.
Different Ways of Promotion
Public Relations:
In today’s competitive scenario developing strong public relations is very

important for any bank to be successful. Most banks today have a separate
Public Relations department. However primarily it is considered as a
31
responsibility of the various bank managers to develop a steady and strong

relationship with their present customers as well as potential customers. This
can be done by a constant follow up, small programmes etc.
Personal Selling:
Personal selling is found to be one of the most effective and popular forms
of promoting bank business. The main reason for this is that banking is a
service in which trust plays a very important role. In personal selling, a bank
representative goes to the customers and explains the scheme to the customers.
Also he gives the customers any kind consultation he might need. He provides
the customers all the information sought by him. The representative tries to
persuade the customers to go for the scheme provided by the bank by telling
him all the benefits.
Here are some of the important features of personal selling
 It is a direct relation between the buyers and the seller

 It is oral presentation in conversation
 It is personal and social behavior
 It is found to be more effective in service oriented organizations
 It is based on the professional excellence or expertise of an individual
Sales Promotion:
Sales promotions are basically giving the customers some additional

benefits, maybe at times just some small gifts, in order to promote the schemes.
The more innovative the sales promotions the more positive are the results.
Some of the most popular sales promotions techniques are gifts, contests, fairs
and shows, discounts and commission, entertainment and traveling plans for
32
bankers, additional allowance, low interest financing etc. It is very important

that the sales promotions benefits are designed in such a manner that they are
better than those of the competitors.
Word – of – mouth Promotion:
This form of promotions is not only very effective in banking services

but in any kind of service. However it is more important in banking for the only
reason that this is a service where trust plays a very important role. If a
particular bank’s services are recommended by friends, relatives, or other well
wishers the person is more influenced and inclined towards that bank. It is very
important to note that the internal employees of the bank play a very important
role in word – of – mouth promotion technique. This is because they can start
the process by recommending the bank to their friends and relatives and after
that it is like a chain, which spreads like a wild fire.
Telemarketing:
In recent times telemarketing has gained increasing importance as an

effective tool for promotion. The telemarketing is a process of making use of
sophisticated communication network for promoting the banks. This includes
promoting through television, telephone, and radio. Nowadays, cell phones are
used extensively for the same. This is the most popular form of promotion.
33
Banks today have started using ‘SMS’ and many other services supported by
cell phones to provide benefits to their customers and thus have tried to increase
their sales. In today’s competitive and modern scenario it very important that
banks makes use of telemarketing techniques very efficiently to have desirable
results.
Internet:
In present time the most popular tool for promotion of banking services
has become Internet Marketing of services. E-Advertising is being very much
popular. In city areas of India, people use internet so frequently. Studies tell that
they use internet mostly for checking their mails, finding results and educations
and research purposes. The e-advertising of banking services not only promote
the services by giving offers but it also interacts with the person and a potential
customer can purchase the product with the help of this. However internet
advertising in pop ups irritates the internet users but advertisements done on
home page of any website such as email service provider is useful and
customers get knowledge about the new banking services and promotions.
When they see something in front of their eyes they can remember it much.
The use of Internet as a promotional tool is increasing. More and

more banks are using Internet to promote their services. The online banking has
made it even easier for the customers to avail the bank’s services. No longer do
people have to go to their bank branches for small petty matters like checking
their balance etc. All this can be done with the help of a few clicks.
Mass Media Advertising: Most Preferred mode for marketing of Banking

Services:–
34
Mass media advertising includes TV commercials and advertising in

national level newspapers which have a wide coverage. Advertising in these has
made maximum people aware about the offerings of the banks and established
most of the bank names as big brands. In a recent survey ICICI Bank has been
considered as the most popular banks in private sector. The use of umbrella
branding works well in promotion of banking services. Different types of
advertisement campaigns have been seen in form of TV commercials and as
print ad in newspapers. Print ads mainly focus on corporate image advertising
of banks as well as a new offering of the bank such as increase in interest rate
on deposits or decrease in the interest rates in loans and so on. TV commercials
mainly focused on corporate advertising, where banking service is promoted as
a whole rather than a particular product of banks.
Themes and appeals used in TV commercials of banking:
Advertising appeal is the method used to draw the attention of

consumers and to influence their feelings toward the product, service, or cause.
There are hundreds of different appeals that can be used as the foundation for
advertising messages. These are the central idea of an ad which has been used
to catch the attraction of customer by heart. The theme of a commercial strikes
a person in depth and forces him/her to act in the desired manner. Generally
advertising appeals are broken into two categories: rational appeals and
emotional appeals.
Uses of Appeals in Banking Services Advertising:
35
Name of Broad Personal/Social Marketing Theme/Punch Line

Bank Category Approach
Union Emotional Social/Parental Security and Future Because your dreams
Bank of Appeal Affection benefit are not only yours.
India
Royal Emotional Personal/Style Differentiation In years a player
Bank of Appeal comes who change
Scotland the way the game is
Group played.
HSBC Rational Practical Customization of Not two people are
Service Offering the same
IDBI Rational Practical Comprehensivenes Banking for All
s of Services
offering
State Bank Emotional Personal/Reliability Supporting the With you all the way
of India Security customers
ADVERTISEMENT BY BANKS IN INDIA:-
Banks in India try to get the maximum mileage through the publicity
route. Towards this objective, they organize several events which are
extensively covered by the print and electronic media. Even then, they spend a
huge sum of money on releasing advertisements. The advertisements released
by banks may cover routine matters like the change of address of branches on
relocation, opening of a new branches, change in the rates of interest on
deposits and loans, or even the inauguration of ATM facilities at new centres.
Banks frequently release advertisements to announce the launch of new

products or to extol the virtues of their existing products. The banks also take
out other ads for improving their image. These marketing ads are becoming
more imaginative day by day, trying to lure the upwardly mobile young
achievers to their banks. These ads are not restricted to the print media and
depend on many interesting innovations.
36
The practice of banks employing professional models for advertising

their brands is on the rise, thereby enhancing their appeal. Banks also advertise
their products on electronic screens where the message and images keep
repeating continuously. Banks do not leave moving vehicles too, the rear and
side panels of buses and the covers of scooters carry the bank message to the
distant corners of the city.
Appointment of brand ambassadors has become a standard practice for

most of the banks. Nowadays, hefty fees are being paid by the banks to
prominent people in the show business, who single-mindedly and effectively,
try to create a positive impact in the viewer’s mind. Amitabh Bachchan was one
of the first superstar to endorse a bank (ICICI BANK). Later on Hema Malini &
Rahul Dravid endorsed the banks like BANK OF RAJSTHAN & BANK OF
BARODA respectively.
People:
People are the employees that are the service providers. In a banking
sector, the service provider plays a very important and determinant role in
rendering the customers a satisfactory and a good service. It is extremely
essential that the service provider understand what his customers expect from
37
him. In the banking sector, the customer needs to be guided in a lot of matters,
which is possible only with the help of the service provider.
The position in the eyes of the customer will be perceived by appearance,

attitude and behavior of the customer contact employees. Not only does the
customer contact employee influence the customer’s perception but also the
customer base of the organization does so.
The products and the seller together constitute the banking product. Bank
products can not be separated from people who market them. While designing
the product due care should be given to both the product and the seller. A well
conceived product could fail if it is not implemented properly. The bank
products can be implemented only through people.
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.
Most of the banks are moving towards technology based banking. But
still matters like investment banking deposit, mobilization, credit evaluation,
etc. can be done through personal contacts.
SERVICE MARKETING TRIANGLE:-

SERVICE FIRM (BANK)
INTERNAL MARKETING EXTERNAL MARKETING

(ENABLING THE (MAKING THE
PROMISES) PROMISES)
38
EMPLOYEES CUSTOMERS
INTERACTIVE MARKETING
(KEEPING THE
PROMISES)
(MOMENT OF TRUTH)
EXTERNAL MARKETING:-
The external marketing efforts are the traditional functions of marketing
of the customers and make promises to the customers as to what is to be
delivered. Anything conveyed to the customer in any form before the delivery
of service can be viewed as a part of external marketing function.
The first step towards external marketing is to make the firm
understand what makes a customers’ want a particular type of service and what
are their expectations of a certain type of service, since external marketing
builds customers’ expectations and belief about service delivery. The external
marketing then gives promises that correspond with the personal needs of the
target group.
The company conveys promises through promotion campaign,
corporate image and word of mouth communication. It also conveys through
the past experience which the customer has had with the firm.
Care should be taken to maintain credibility while setting the promise
because a very high expectation may lead to a highly dissatisfied customer.
INTERNAL MARKETING:-
39
The expectations of the customers that are created by the external

environment must be met by the employees of the service firm who interact
with the customers. If the service system as well as the service staff do not
support the frontline employees, it will not be possible to meet the promises
made by the organization. Thus, the employees are the internal customers who
in their job depend on others in the organization for providing goods & services
to external customers. Hence, directly or indirectly every employee in the
organization in one way or the other serves the external customers.
Berry defines internal marketing as “the means of applying the
philosophy & marketing to people who serve external customers so that:
(i) The best possible people can be employed & retained and
(ii) They do the best possible work.”
Internal marketing suggests that the firm should employ market research,
market segmentation and traditional marketing activities like advertising and
publicity in order to attract employees and make them perform.
INTERACTIVE MARKETING:-
Interactive marketing takes place outside the marketing mix. It takes
place at the very moment the buyer and seller interacts. These interactions are
also called SERVICE ENCOUNTERS or MOMENT OF TRUTH. It is the skill
and motivational tools employed by service personnel in handling the customer
contacts. In this process of interaction, the customer judges the quality of
service delivered by the service provider.
There are different types of service encounters such as
1] Remote encounter:-
40
The tangible evidence of the service becomes a primary basis for judging
quality as there is no human contact in service delivery. E.g. ATM vending
machines.
2] Phone encounter:-
Here the service quality can be judged on the basis of how long they had
to wait for the phone to be attended, the tone of voice & efficiency in handling
the issues.
3] Face-to-face encounter:-
When there is direct contact between the employee and customer, this
type of encounter occurs. In this situation determining the quality is highly
complex as it will be influenced by the behaviour of both the customer and
employee.
Thus, in the interactive marketing the service encounter or the moment
of truth is where the value to the customer is created in the service delivery
process. At this stage, all the efforts of internal and external marketing will be
reflected.
Process Mix:
The process mix constitutes the overall procedure involved in using the
services offered by the bank. It is very necessary that the process is very
customer friendly. In other words a process should be such that the customer is
easily able to understand and easy to follow. Today if particular banks
41
formalities are long and the procedure very complicated the overall process fails
and the customer may not be inclined towards using that banks services.
PROCESS OF BANKS:
PROCESS INNOVATION IN THE INDIAN BANKING INDUSTRY
The crisis in the international financial markets had been simmering for
quite some time. However, its effects are now evident with the collapse of some
of the leading financial institutions.
While India has not been as seriously impacted by the global financial
turmoil, the current credit crunch has affected all sectors of the Indian economy.
On the one hand, the Indian banking industry is witnessing rapid change given
42
the evolving regulatory environment, rapid technological advancements,

heightened competition and consolidation. On the other hand, with the global
recession looming, the industry is now exploring process innovation and is
more aggressively adopting technology.
Value Notes along with the Indian Banks' Association (IBA) conducted a
conference on "Process Outsourcing in the Indian Banking Industry" on
January 6th to address the immediate issues concerning the banking industry.
There were several speakers from the banking industry including HDFC Bank,
Punjab National Bank, Bank of India, IDBI, who spoke on the issues and
concerns of the banks. There were also some service providers such as Intel net,
MphasiS BPO, HTMT Global and Shell Tran source who were present at the
conference. These service providers talked about their experience with the
international banks and spoke about issues related to vendor selection and
process transition.
Inaugurating the conference, Dr. K Ramakrishnan, Chief Executive, IBA

talked about the economy and the banking sector in his opening remarks. He
said "The country will see difficult times for at least another one year and in
these trying times the question that most banks are asking themselves is -
How do I still lend and keep the portfolio intact?" He emphasized that this is a
time to look internally and examine and set processes in place.
Outsourcing in the Indian Banking Industry:
Globally, the banking and financial services sector has been at the
forefront of the outsourcing movement. Third party service providers have also
built greater processing and analytical capabilities and are able to handle more
complex functions like financial modeling and equity research. In contrast with
43
global evolution of outsourcing, the Indian banking industry has been slower to
outsource.
The Indian banking Industry is highly fragmented. There are banks

ranging from small co-operative banks (presence limited to a few branches in a
city) to large nationalized commercial banks like SBI with over 10,000
branches (one of the largest banking network in the world). The Indian banking
Industry is dominated by PSBs with 70% market share. Further, there are
different issues that concern the Indian banks when outsourcing.
Harsha Pai, General Manager, Sparsh BPO (part of Intel net) touched
upon the issue of vendor selection and the necessary parameters while selecting
a suitable vendor. Several attendees said that Indian banks were wary of
outsourcing especially given the client confidentiality issues and the associated
risks. According to Pai, "Initially, international banks had also certain
concerns about outsourcing, however, now a majority of the banks outsource
a wide range of services to third-party service providers. Indian banks need to
clearly understand and convey to the service providers what is truly
confidential".
While there were some apprehensions about outsourcing, there were also
banks such as HDFC Bank, Bank of India and Punjab National Bank who
shared their experiences about outsourcing and its rewards. BinduMadhav
Tikekar, Senior Vice President & Regional Head - Wholesale banking
Operations, HDFC
Bank talked about the rewards in the form of cost effectiveness, reduction
in technical staff and low implementation and operational costs. However, he
also cautioned the banks about the risks associated with outsourcing.
44
Gaurav Bhatia, (Vice President) BFS Solutioning Head - BPO, spoke

about process transition - possibility and plausibility. With the help of several
case studies he drove home the point that processes are crucial for outsourcing.
Banks need to standardize and document every process before they can initiate
outsourcing.
PROCESS INNOVATION AND TECHNOLOGY :
In India, outsourcing of processes is largely constrained by the RBI

regulations and resistance from trade unions. According to Arun Jethmalani,
CEO, Value Notes, "Aggressive adoption of IT and centralization of
operations have served as a key enabler to outsourcing of business processes
in the banking industry." Other factors such as growth in the banking industry,
deregulation, increasing competition, consolidation and improving benchmarks
in the industry are driving the outsourcing of business processes. PSBs have
been sluggish in adopting new technology as compared to global banks. Post
liberalization, with RBI tightening its regulations, PSBs have undertaken
massive computerization to achieve 'Total Branch Automation'. With
privatization and increasing competition, all the large banks are now
aggressively implementing 'Core Banking Solutions'.
There is increasing focus on technology as evidenced by more and more

PSU banks going for aggressive computerization and transferring their
processes into some technology platform or other. While a few large PSBs have
been quick to respond to competitive pressures by introducing new services,
investing in technology and acquiring capabilities like marketing and sales,
others lag behind.
Sanjay Sharma, MD & CEO, IDBI Intech Ltd spoke about leveraging
technology for process innovation. He argued that "Banks still need to reach
45
the level where processes are streamlined in a manner so that there is

consistent customer service in every branch on any bank.”
P.A. Kalyanasundar, General Manager, Bank of India said that "Unlike

the new generation private and foreign banks, PSBs come with a legacy. The
biggest challenge that PSBs are faced with is completeness of data. This
poses a hurdle when a bank decides to outsource."
On similar lines, R I S Sidhu, Chief General Manager (IT), Punjab

National Bank said that "While banks need to invest in technology, it is a
challenge for them to implement technology and train their staff. Explaining
the marked difference when talking about technology in a PSB, he said that
until recently there was very little 'technology' for the banker and processes
were largely manual procedures, however today technology implies enterprise
wide data warehousing."
Let’s take for example the process for application for a car loan.
Now this mainly involves 3 things.
1. Producing of proper documents

2. Filling up of application form
3. Paying for the initial down payment.
Here the process may fail in the following cases:
46
1. If the customer is asked to produce a number of forms out of which some

may not be necessary at all. Thus it is very necessary that the customer be
asked for the minimum but most necessary document and not the other
unnecessary documents.
2. In case of application form, the application form must be in a language

best understood by the customers and it should not be very lengthy one or
demanding a lot of unnecessary information.
3. Finally the payment of initial amount. The customer should be given

options as to how he would like to pay by cheques or by credit card.
Once again the amount should be very competitive not very high above
the regular rates prevailing in the markets.
The smaller and simpler the procedure, the better the process, and the
customer will be more satisfied.
PHYSICAL EVIDENCE:
Physical evidence is the overall layout of the place i.e. how the entire
bank has been designed. Physical evidence refers to all those factors that help
make the process much easier and smoother. For example, in case of a bank, the
physical evidence would be the placement of the customer service executive’s
desk, or the location of the place for depositing cheques. It is very necessary
47
that the place be designed in such a manner so as to ensure maximum

convenience to the customer and cause no confusion to him.
The environment is changing. It is becoming more friendly. Most of the
private and foreign banks portray a new welcoming and friendly look to the
customer. Flashy cheque books with the name of the account holder printed,
imaginative design of bank brochure, statements of accounts with details of
transaction are other tangible aspects. Logos, symbols, attractive brand names
etc. add to the customer’s perception of service quality.
The physical evidences include signage, reports, punch lines, other
tangibles, employee’s dress code etc. The company’s financial reports are
issued to the customers to emphasis or credibility. Even some of the banks
follow a dress code for their internal customers. This helps the customers to feel
the ease and comfort.
Signage: each and every bank has its logo by which a person can identify the
company. Thus such signages are significant for creating visualization and
corporate identity.
Tangibles: banks give pens, writing pads to the internal customers. Even the
passbooks, chequebooks, etc reduce the inherent intangibility of services.
Punch lines: punch lines or the corporate statement depict the philosophy and
attitude of the bank. Banks have influential punch lines to attract the customers.
Ch.7. ICICI BANK
Overview:
48
ICICI Bank is India's second-largest bank with total assets of Rs.

3,997.95 billion (US$ 100 billion) at March 31, 2008 and profit after tax of Rs.
41.58 billion for the year ended March 31, 2008. ICICI Bank is second amongst
all the companies listed on the Indian stock exchanges in terms of free float
market capitalization*. The Bank has a network of about 1,308 branches and
3,950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide
range of banking products and financial services to corporate and retail
customers through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has
subsidiaries in the United Kingdom, Russia and Canada, branches in Unites
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai
International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
Our UK subsidiary has established branches in Belgium and Germany.
INTRODUCTION:
ICICI Bank (formerly Industrial Credit and Investment Corporation of
India) is India's largest private sector bank in market capitalization and second
largest overall in terms of assets. ICICI Bank has total assets of about USD 79
Billion (end-Mar 2007), a network of over 950 branches and offices, about
3500 ATMs, and 24 million customers (as of end July '07). ICICI Bank offers a
wide range of banking products and financial services to corporate and retail
49
customers through a variety of delivery channels and through its specialised

subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. ICICI Bank's equity shares
are listed in India on stock exchanges at Kolkata and Vadodara, the Stock
Exchange, Mumbai and the National Stock Exchange of India Limited and its
ADRs are listed on the New York Stock Exchange (NYSE).
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.
50
Ch. 8. 7 P’S OF MARKETING OF ICICI BANK
Marketing of services by ICICI bank:

1. Product Mix:
i. Deposits:
ICICI Bank offers wide variety of Deposit Products to suit our requirements.
Coupled with convenience of networked branches/ over 1800 ATMs and
51
facility of E-channels like Internet and Mobile Banking, ICICI Bank brings
banking at your doorstep.
Savings Account: ICICI Bank offers a power packed Savings Account with a
host of convenient features and banking channels to transact through.
Senior Citizen Services: The Senior Citizen Services from ICICI Bank has
several advantages that are tailored to bring more convenience and enjoyment
in your life.
Young Stars: It's really important to help children learn the value of finances
and money management at an early age. Banking is a serious business, but we
make banking a pleasure and at the same time children learn how to manage
their personal finances.
Fixed Deposits: Safety, Flexibility, Liquidity and Returns!!!! A combination of

unbeatable features of the Fixed Deposit from ICICI Bank.
Recurring Deposits: Through ICICI Bank Recurring Deposit you can invest
small amounts of money every month that ends up with a large saving on
maturity. So you enjoy twin advantages- affordability and higher earnings.
Roaming Current Account: Only Roaming Current Account from ICICI Bank
travels the distance with your business. You can access your accounts at over
500 networked branches across the country.
ii. Investments
Along with Deposit products and Loan offerings, ICICI Bank assists you to
manage your finances by providing various investment options such as:
 ICICI Bank Tax Saving Bonds
52
 Government of India Bonds

 Investment in Mutual Funds
 Initial Public Offers by Corporate
 Investment in "Pure Gold"
 Foreign Exchange Services
 Senior Citizens Savings Scheme, 2004
iii. Anywhere Banking:
ICICI Bank is the second largest bank in the country. It services a

customer base of more than 5 million customer accounts through a multi-
channel access network. This includes more than 500 branches and extension
counters, over 1800 ATMs, Call Centre and Internet Banking. Thus, one can
access the various services ICICI Bank has to offer at anytime, anywhere and
from anyplace
iv. Loan:
 Home Loans
 Personal Loans
 Car Loans
 Two Wheeler Loans
 Commercial Vehicle Loans
 Loans against Securities
 Farm Equipment Loans
 Construction Equipment Loans
 Office Equipment Loans
 Medical Equipment Loans
v. Cards:
53
 Credit Card
 Debit cum ATM Card
 Travel Card
vi. Demat services:
ICICI Bank Demat Services boasts of an ever-growing customer base of

over 7 lacs account holders. In their continuous endeavor to offer best of the
class services to our customers we offer the following features:
• Digitally signed transaction statement by e-mail.

• Corporate benefit tracking.
• e-Instruction facility - facility to transfer securities 24 hours
a day, 7 days a week through Internet Interactive Voice Response (IVR) at a
lower cost.
• Dedicated specially trained customer care executives at their
call centre, to handle all queries.
vii. Mobile Banking.
With ICICI Bank, banking is no longer what it used to be. ICICI Bank
offers Mobile Banking facility to all its Bank, Credit Card and Demat
customers. ICICI Bank Mobile Banking enables you to bank while being on the
move.
viii. NRI Services:
ONLINE MONEY TRANSFER facility available to NRIs worldwide

through www.money2India.com at the click of a button!
Benefits:
• FREE Money transfers into accounts with over 30 banks in India
54
• Demand Drafts issued and payable at over 1250 locations in India

• ONLINE Tracking of the status of your funds
• SUPERIOR Exchange rates
• OFFLINE MONEY TRANSFER
2. Pricing Mix:
The pricing decisions or the decisions related to interest and fee or
commission charged by banks are found instrumental in motivating or
influencing the target market.
The RBI and the IBA are concerned with regulations. The rate of interest is
regulated by the RBI and other charges are controlled by IBA.
The pricing policy of a bank is considered important for raising the number
of customers’ vis-à-vis the accretion of deposits. Also the quality of service
provided has direct relationship with the fees charged. Thus while deciding the
price mix customer services rank the top position.
The banking organizations are required to frame two- fold strategies. First,
the strategy is concerned with interest and fee charged and the second strategy
is related to the interest paid. Since both the strategies throw a vice- versa
impact, it is important that banks attempt to establish a correlation between two.
It is essential that both the buyers as well as the sellers have feeling of winning.
3. Place:
This component of marketing mix is related to the offering of services. The

services are sold through the branches. The 2 important decision making areas
are: making available the promised services to the ultimate users and selecting a
55
suitable place for bank branches. The number of branches OF ICICI: 1900 in
India and 33 in Mumbai.
LOCATION OF BRANCH:
Shivam Shopping Centre, S.V.Road, Opp. New Era Cinema, Malad (W),
Mumbai.
LOCATION OF ATMS:
• Malad subway
• With branch
• Mindspace
• Orlem
• Raheja township
They select this place as branch because

•
The selection
significant with
•
The view poi

•
The safety an
•
Convenient to
•
Infrastructure
•
Near to statio
•
Market cover
56
4. Promotion Mix:
 Advertising: Television, radio, movies, theatres
 Print media: hoardings, newspaper, magazines
 Publicity: road shows, campus visits, sandwich man,

Sponsorship
 Sales promotion: gifts, discount and commission,

incentives,etc.
 Personal selling: Cross-sale (selling at competitors place),personalized

service
 Telemarketing: ICICI one source Call center (mind

space)
5. People:
All people directly or indirectly involved in the consumption of banking
services are an important part of the extended marketing mix.
Knowledge Workers, Employees, Management and other Consumers often

add significant value to the total product or service offering. It is the employees
of a bank which represent the organisation to its customers.
In a bank organization, employees are essentially the contact personnel with

customer. Therefore, an employee plays an important role in the marketing
operations of a service organisation.
57
To realize its potential in bank marketing, ICICI become conscious in its

potential in internal marketing - the attraction, development, motivation and
retention of qualified employee-customers through need meeting job-products.
Internal marketing paves way for external marketing of services. In internal
marketing a variety of activities are used internally in an active, marketing like
manner and in a coordinated way.
The starting point in internal marketing is that the employees are the first
internal market for the organization.
The basic objective of internal marketing is to develop motivated and

customer conscious employees.
A service company can be only as good as its people. A service is a

performance and it is usually difficult to separate the performance from the
people.
If the people don’t meet customers' expectations, then neither does the
service. Therefore, investing in people quality in service business means
investing in product quality.
6. Process:
Flow of activities: All the major activities of ICICI banks follow RBI
guidelines. There has to be adherence to certain rules and principles in the
banking operations. The activities have been segregated into various
departments accordingly.
Standardization: ICICI bank has got standardized procedures got typical

transactions. In fact not only all the branches of a single-bank, but all the banks
58
have some standardization in them. This is because of the rules they are subject
to. Besides this, each of the banks has its standard forms, documentations etc.
Standardization saves a lot of time behind individual transaction.
Customization: There are specialty counters at each branch to deal with

customers of a particular scheme. Besides this the customers can select their
deposit period among the available alternatives.
Number of steps: Numbers of steps are usually specified and a specific pattern
is followed to minimize time taken.
Simplicity: In ICICI banks various functions are segregated. Separate

counters exist with clear indication. Thus a customer wanting to deposit money
goes to ‘deposits’ counter and does not mingle elsewhere. This makes
procedures not only simple but consume less time. Besides instruction boards
in national boards in national and regional language help the customers further.
Customer involvement: ATM does not involve any bank employees. Besides,
during usual bank transactions, there is definite customer involvement at some
or the other place because of the money matters and signature requires.
7. Physical Evidence:
Physical evidence is the material part of a service. Strictly speaking there are
no physical attributes to a service, so a consumer tends to rely on material cues.
There are many examples of physical evidence, including some of the
following:
• Internet/web pages
• Paperwork
59
• Brochures
• Furnishings
• Business cards
• The building itself (such as prestigious offices or scenic
headquarters)
The physical evidences also include signage, reports, punch lines, other
tangibles, employee’s dress code etc.
Signage: each and every bank has its logo by which a person can identify the
company. Thus such signage is significant for creating visualization and
corporate identity.
Financial reports: The Company’s financial reports are issued to the

customers to emphasis or credibility.
Tangibles: bank gives pens, writing pads to the internal customers. Even the
passbooks, chequebooks, etc reduce the inherent intangibility of services.
Punch lines: punch lines or the corporate statement depict the philosophy and
attitude of the bank. Banks have influential punch lines to attract the customers.
Employee’s dress code: ICICI bank follows a dress code for their internal
customers. This helps the customers to feel the ease and comfort.
60
Ch. 9. RECENT TRENDS IN ICICI BANK
ICICI Bank, India's largest private sector bank, has contracted with
Air2Web India to use their Mobile Internet Platform to provide ICICI Bank
customers with wireless access to their banking and credit card accounts.
"Our new wireless applications are going to help customers better

manage their checking and credit card accounts by allowing them to receive
and request pertinent information anytime, anywhere via their digital cell
phone," said Ms. Chanda Kochhar, Executive Director of ICICI Bank.
"With this wireless service, our customers can keep track of their
account balances, as well as request details on how to pay credit card
balances, confirm when they have been paid, and receive banking and credit
card statements. We feel this value added service will improve our customer
service offering."
"ICICI Bank has developed a wireless application which enables their

customers to get their banking and credit card account information when and
where they want it and from their most common wireless device, their digital
cell phone," said Sanjoy Malik, President and CEO of Air2Web India.
"ICICI Bank has always been known for its use of cutting edge
technology. So, it is no surprise that they are launching one of the first
wireless banking products to not only incorporate automated notifications of
balances of both your credit card and bank accounts, but one that also allows
customers to pull timely account information. This new wireless service gives
ICICI Bank customers substantially more control and flexibility over their
61
accounts, thus enhancing their customers' experience and another added

value which sets ICICI Bank apart from its competitors."
Air2Web's Mobile Internet Platform provides businesses with a

competitive edge enabling its customers to wirelessly access critical back-end
information residing in existing CRM, ERP, SFA or SCM systems. Information
can be accessed across any network and with any carrier and via any digital
wireless device including Short Message Service (SMS) and web-enabled
phones, personal digital assistant devices (PDAs), and pagers. Air2Web's ability
to work with multiple data and audio formats streamlines integration with
existing applications.
The ICICI Bank Credit Cards was launched in January 2000 with three
variants Solid Gold, Sterling Silver and True Blue. The card is now available in
36 cities across India. The customer base is over 6.5 million.
62
Ch. 10. AWARDS AND RECOGNITIONS
ICICI BANK:-
2009:
• ICICI Bank Mobile Banking was adjudged "Best Bank Award for Initiatives
in Mobile Payments and Banking" by IDRBT, on May 18, 2009 in
Hyderabad.
• ICICI Bank's b2 branch free banking was adjudged "Best E-Banking Project
Implementation Award 2008" by The Asian Banker, on May 11, 2009 at the
China World Hotel in Beijing.
• ICICI Bank bags the “Best bank in SME financing (Private Sector)” at the
Dun & Bradstreet Banking awards 2009.
• An ICICI Bank NRI service wins the “Excellence in Business Model

Innovation Award” in the eighth Asian Banker Excellence in Retail
Financial Services Awards Programme.
• ICICI Bank's Rural Micro Banking and Agri-Business Group wins WOW
Event & Experiential Marketing Award in two categories - “Rural
Marketing programme of the year” and “Small Budget On Ground
Promotion of the Year”. These awards were given for Cattle Loan
'Kamdhenu Campaign' and 'Talkies on the move campaign' respectively.
• ICICI Bank's Germany Branch has been certified by “Stiftung Warrentest”.

ICICI Bank is ranked 2nd amongst 57 savings products across 19 banks
• ICICI Bank Germany won the yearly banking test of the investor magazine
€uro in the “call money” category.
• The ICICI Bank was awarded the runner's up position in Gartner Business
Intelligence and Excellence Award for Asia Pacific for its Business
Intelligence functions.
• ICICI Bank's Organisational Excellence Group was recently awarded ISO

9001:2008 certification by TUV Nord. The scope of certification comprised
processes around consulting and capability building on methods of quality &
improvements.
63
• ICICI Bank has been awarded the following titles under The Asset Triple A
Country Awards for 2009:
• Best Transaction Bank in India
• Best Trade Finance Bank in India
• Best Cash Management Bank in India
• Best Domestic Custodian in India
• ICICI Bank has bagged the Best Cash Management Bank in India award for
the second year in a row. The other awards have been bagged for the third
year in a row.
• ICICI Bank Canada received the prestigious Canadian Helen Keller Award
at the Canadian Helen Keller Centre's Fifth Annual Luncheon in Toronto.
The award was given to ICICI Bank its long-standing support to this unique
training centre for people who are deaf-blind.
• ICICI Bank wins World Finance 2009 Banking Awards for Best NRI
Services bank.
• ICICI Bank wins Asset Triple A Investment Awards for the Best Derivative
House, India. In addition ICICI Bank were Highly commended, Local
Currency Structured product, India for 1.5 year ADR GDR linked Range
Accrual Note.
64
Ch. 11. CONCLUSION
“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.
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 globalised environment.
The following are some of the vital challenges that threaten the Indian
banking industry:-
 Competition from foreign banks and now new private sectors banks
 Technological advancement
 Innovation
 Diversified Activities
 Customer Awareness and Satisfaction
 Development of skills of Banks Personnel
 Profitability Nature
 Corporate Governance
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.
ICICI Bank today services a growing customer base of more than 5
million customer accounts and 5 million bondholders accounts through a multi-
65
channel access network. This includes over 400 branches and extension
counters, 1080 ATMs, call centers and Internet banking.
Bank renders personalised services and the present emphasis in
marketing is customer satisfaction. The customer satisfaction, which must be
the ultimate goal of bank marketing, is achieved not only through creating
suitable products according to his need but also through delivering them in a
most satisfying manner.
In spite of the changing banking environment and newer challenges
emerging, Service Marketing by ICICI Bank will continue to remain popular.
66
Ch.12. BIBLIOGRAPHY
BOOKS REFERRED
1] Service Marketing By P.K. Gupta
2] Bank Marketing By Umesh C. Patnail
3] Marketing in Banking and Insurance By Romeo S. Mascarenhas
WEBLIOGRAPHY
 www.icicibank.com
 www.scribd.com
 www.marketingteacher.com
 www.google.com
67

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SERVICE MARKETING IN BANKS

Ch.1. INTRODUCTION TO THE BANKING IN INDIA

The Reserve Bank of India acts as a centralized body monitoring any

The liberalize policy of Government of India permitted entry to private

• The study of Service Marketing in Banks requires technical & conceptual

a) Reports of ICICI BANK

The objective of this project study is to enable the researcher:

• The scope of this project extends only upto ICICI Bank.

• This project study is limited to the extent of guidelines issued by

Ch.3. PEST ANALYSIS

Technology plays a very important role in bank’s internal control

The latest developments in terms of technology in computer and

All these technological changes have forced the bankers to adopt

Banking is as old as authentic history and the modern commercial

POLITICAL/ LEGAL ENVIRONMENT

Government and RBI policies affect the banking sector. Sometimes

An organization is supposed to cater to the changing needs of customers;

The study of the needs of customers invites a plethora of problems since

The marketing segmentation is based in the principle of divide and rule.

It is essential that the bank professionals assign due weightage to the

 Instrumental in exploring opportunities: We find market

 Instrumental in designing a sound marketing strategy: We can’t

deny that market segmentation makes it easier to formulate a sound

needs and requirements of a segment, the marketing resources can be

 Helpful to the policy planners: In addition, the policy makers also

 Enriching the market resources: In addition to other aspects, we find

segmentation instrumental in enriching the marketing potentials. If we

Ch. 5. MARKETING OF BANKING SERVICES

Marketing of banking services is concerned with product, place,

With liberalization and globalization of the economy, middlemen are

In banking services, the marketing strategy starts with developing

Ch. 6. 7 P’S of BANKING

A Product can be defined as the bundle of utilities consisting of various

g] Secured and Unsecured lines of credit.

[C] INTERNATIONAL BANKING:-

CORE PRODUCT LEVEL:-

EXPECTED PRODUCT LEVEL:-

AUGMENTED PRODUCT LEVEL:-

POTENTIAL PRODUCT LEVEL:-

The potential product focuses on the future. When a product exceeds

CORE PRODUCT LEVEL:- 1] Banking space,

POTENTIAL 1] Occasional greetings at home,

The banks are required to frame two fold strategies. Strategies

Let’s understand this with an example. A particular buyer approaches a

The pricing factor is very important because of the kind of competition

Going Rate pricing:

THE MOST FAVORABLE PRICING STRATEGY

This model shows a pricing strategy, which should be adopted in order to

1. The trade area

It is not necessary that all the above conditions have to be satisfied

1. The Trade Area:

 The income level of the population

6. Proximity of other convenient outlets:

7. Real Estate Rates:

This is mainly dealing with the cost factor involved in opening

8. Proximity to public transportation:

10. Location of Competition:

Consumer behavior is very complex phenomenon, which is considered

In consumer behavior this is very difficult to make a uniform theory that

When customer is treated as the king of the market, the study of

Finalizing the Budget:

Selecting a suitable vehicle:

Making possible creativity: