7 P s applicable to Banking Industry (Financial Services): 1.

Product : The banks primarily deal in services and therefore giving right product to the customers is important. The products offered are the services which include various types of bank accounts, different types of loans, investment services, Credit cards, Demat accounts, online banking, mobile banking and many more. E.g. Different products offered by State Bank of India (SBI) are: y Advantage (Khata) y Advantage Plus (Khata Plus) y CINB (Saral) y Privilege (Vyapaar) y Freedom (Vistaar) y Electronic Vendor Finance y Electronic Dealer Finance y Direct Debit y E-Collection 2. Price : Includes interest, fees or commission charged by the bank & the interest paid by the bank. Typical for banking sector since RBI regulates rates of interest, Organizations are supposed to sub-serve weaker sections and the rural regions of the country and these rates are keep on changing with the market conditions. E.g. Home Loans Interest Rates For SBI 10.75% p.a. upto Rs. 30Lakhs For Industrial Credit and Investment Corporation of India (ICICI) 10.50% p.a. upto Rs. 30Lakhs 3. Place : It refers to the functioning of a network of branches and other offices through which banking services are delivered. Main objective is to provide the right product, at right places at right time at the least cost by saving customers time. Extensive branch network- access to large section of people. Proximity to the branch plays a important role in selecting the bank. Banks are coming up with mobile branches, banks acquisition and amalgamation so as to have sufficient point of contacts with the customer. Today banking is much simpler than ever before because of technology. Some of the outcomes of the technology are ATM, Mobile banking, online banking E.g. SBI has over 21000 ATM s in India, ICICI bank has a network of 2556 branches and 7440 ATM s in India.

4. Promotion : Promotion mix includes advertising, publicity, sales promotion, word-of-mouth promotion, personal selling and telemarketing. Advertising: Advertising is paid form of communication. Banking organizations use this component of the promotion mix with motto of informing, sensing and persuading the customers. Telemarketing: The telemarketing is a process of promoting the business with the help of sophisticated communication network. Telemarketing is found instrumental in advertising the banking services and the banking organizations can use this tool of the promotion mix both for advertising and selling. This minimizes the dependence of banking organizations on sales people. Word-of-Mouth: Much communication about the banking services actually takes place by wordof- mouth information, which is also known as word- of- mouth promotion. The oral publicity plays an important role in eliminating the negative comments and improving the services. This also helps the banker to know the feedback, which may simplify the task of improving the quality of services. By improving the quality of services and by offering small gifts to the wordof- mouth promoters, bankers can get more business command in their area. 5. People : It involves the people of the bank i.e. the employees. Employees should also be treated as internal customers, and sort of marketing mix should be followed. The development of human resources makes the ways for the formation of human capital. Human resources can be developed through education, training and by psychological tests. Even incentives can inject efficiency and can motivate people for productive and qualitative work. 6. Process : Refers to the systems used to assist the organization in delivering the service. All the major activities of 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: Today banks have got standardized procedures for some typical transactions. One has to follow some common procedures for opening the account or depositing the amount or withdrawing the amount. Today almost all the processes which banks are following are standardized and are simple to carry out, because of which we are getting services at faster rate and these procedures reduces the paperwork.

7. Physical Evidence : It includes 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. Signage: Each and every bank has its logo by which a person can identify the company. It creates the separate identity for the banks. Tangibles: banks give pens, writing pads to the customers. Punch lines: Depicts the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers.

McKinsey 7S Framework for Banking Industry (Financial Services) : The basic premise of the model is that there are seven internal elements of an organization that need to be aligned if it is to be successful. This model helps us to: 1. Improve the performance of a company. 2. Examine the likely effects of future changes within a company. 3. Align departments and processes during a merger or acquisition. 4. Determine how best to implement a proposed strategy. The Seven Elements: 1. Strategy: The plan devised to maintain and build competitive advantage over the competition. Strategy is the plan of action an organization prepares in response to, or anticipation of, changes in its external environment. Strategy is differentiated by tactics or operational actions by its nature of being premeditated, well thought through and often practically rehearsed. It deals with essentially three questions: 1) where the organization is at this moment in time 2) where the organization wants to be in a particular length of time and 3) how to get there. Thus, strategy is designed to transform the firm from the present position to the new position described by objectives, subject to constraints of the capabilities or the potential E.g. ICICI banks strategy for yr.2010 wasCASA: Increasing the proportion of low cost CASA deposits & reducing the proportion of wholesale deposits Capital: Maintaining high capital adequacy. Cost: Keeping stringent control on operating expenses. Credit: Focus on selecting credit opportunities & reducing unsecured retail portfolio. 2. Structure: Business needs to be organised in a specific form of shape that is generally referred to as organizational structure. Organizations are structured in a variety of ways, dependent on their objectives and culture. The structure of the company often dictates the way it operates and performs (Waterman et al., 1980). Traditionally, the businesses have been structured in a hierarchical way with several divisions and departments, each responsible for a specific task such as human resources management, production or marketing. Many layers of management controlled the operations, with each answerable to the upper layer of management. Although this is still the most widely used organizational structure, the recent trend is increasingly towards a flat structure where the work is done in teams of specialists rather than fixed departments. The idea is to make the organization more flexible and devolve the power by empowering the employees and eliminate the middle management layers.

3. Systems: Every organization has some systems or internal processes to support and implement the strategy and run day-to-day affairs. For example, a company may follow a particular process for recruitment. These processes are normally strictly followed and are designed to achieve maximum effectiveness. Traditionally the organizations have been following a bureaucraticstyle process model where most decisions are taken at the higher management level and there are various and sometimes unnecessary requirements for a specific decision (e.g. procurement of daily use goods) to be taken. Increasingly, the organizations are simplifying and modernizing their process by innovation and use of new technology to make the decision-making process quicker. Special emphasis is on the customers with the intention to make the processes that involve customers as user friendly as possible. 4. Shared Values: All members of the organization share some common fundamental ideas or guiding concepts around which the business is built. This may be to make money or to achieve excellence in a particular field. These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. The organizations with weak values and common goals often find their employees following their own personal goals that may be different or even in conflict with those of the organization or their fellow colleagues. 5. Style: All organizations have their own distinct culture and management style. It includes the dominant values, beliefs and norms which develop over time and become relatively enduring features of the organizational life. It also entails the way managers interact with the employees and the way they spend their time. The businesses have traditionally been influenced by the military style of management and culture where strict adherence to the upper management and procedures was expected from the lower-rank employees. However, there have been extensive efforts in the past couple of decades to change to culture to a more open, innovative and friendly environment with fewer hierarchies and smaller chain of command. Culture remains an important consideration in the implementation of any strategy in the organization. 6. Staff: Organizations are made up of humans and it's the people who make the real difference to the success of the organization in the increasingly knowledge-based society. The importance of human resources has thus got the central position in the strategy of the organization, away from the traditional model of capital and land. All leading organizations such as IBM, Microsoft, Cisco, etc put extraordinary emphasis on hiring the best staff, providing them with rigorous training and mentoring support, and pushing their staff to limits in achieving professional excellence, and this forms the basis of these organizations strategy and competitive advantage over their competitors. It is also important for the organization to instill confidence among the employees about their future in the organization and future career growth as an incentive for hard work.

7. Skills: Distinctive capabilities of personnel or of the organization as a whole.