1.

Area of Research work: Management Specialization: Marketing

2.

Topic of the proposed research work:

A study of Consumer Behavior towards Permission based E-Mail Marketing in Selected Indian Banks 3. Objective of Research Work (i) To find out whether there exists awareness of Permission Marketing in selected banks under study and the customer of banks in general. (ii) To examine the extent to which the Permission Marketing Practices (PMP) is being practiced by selected banks under study. (iii) To find out whether there exists a difference in Permission Marketing Practices (PMP) in selected private banks and public banks. (iv) To find out the effectiveness of E-mail Marketing as a promotion tool in banking sector. (v) To identify the factors which affect permission to market banking products / services. 4. Methodology of the Research Work:

Population: Permission Marketing is growing concern for several banking institutions, therefore the study will include all banking institutions which are concerned and are practicing Permission Marketing in our country. The population frame comprises of banks as per the members of Indian Banking Association. The Association has classified the banks into three categories viz. (1) Public sector banks. (2) Private sector banks (3) Foreign banks. 1

Sample: It is neither feasible nor desirable to conduct the study on all the banks practicing Permission Marketing. Therefore, out of 71 listed banks, purposively 5 banks from each sector will be initially chosen at random for the study. There will be 15 units which will constitute the sample for the study. Similarly there are thousands of consumers availing the services who have serious concerns and reservation for Permission Marketing. For the purpose of the study 100 consumers for private / foreign sector banks and 100 consumers for public sector banks will be selected on the basis of systematic sampling to assess their perception of Permission Marketing being practiced by banks, which influences their decisions. However, the exact sample size will be determined statically keeping in mind the nature of scales used in questionnaire & validity of the questionnaire. Extent: The study shall be limited to Delhi territory only as most of the banks have at least one branch / office in Delhi Data Collection: Data for the study will be collected both from the primary and secondary sources. While for the primary data the selected Banks and the consumers will be directly approached, for secondary data all published literature on the subject available and other magazines, journals research reports published, resources available on Internet viz Delnet & EBSCO will be consulted. Questionnaire / Schedule: Keeping in mind the objectives of the study, Questionnaires / Schedules will be developed by the researcher. Two sets of the questionnaires / Schedules will be prepared. While one set is for the Banks, the other set will be for the consumers.

Data Analysis: The data collected through the above tools will be analyzed with the help of appropriate Statistical techniques such as Chi Square test, t test, Z test, ANOVA, Factor Analysis and other tests using SPSS. 5. Literature survey:

The Concept of permission marketing is not a known area from the decades, therefore the literature review is confined to the latest studies and researches carried over the world. The literature is reviewed in many facets which include: 5.1 Introduction to Permission Marketing The world is entering in an era that's going to change the way almost everything that is marketed to almost everybody (Godin, 1999). Advertising will remain a competitive weapon. Companies that advertise better will do better, than companies that advertise worse. But advertising simply doesn't work as well as it used to. Marketing is a contest for people's attention .But no human being can pay attention to 3,000 messages every day .This will give rise to Interruptions in their daily life and they generally try to avoid that. This attitude of consumers is giving way to a new model of permission marketing. The world is entering in an era that's going to change the way almost everything that is marketed to almost everybody (Godin, 1999). According to Seth Godin the traditional "Interruption Marketing" approach just doesn't work anymore. Godin (1999) the philosopher of management has proposed new idea- Permission Marketing. Here, consumers provide marketers with the permission to send them certain types of promotional messages. This is seen as reducing clutter and search costs for the consumer while improving targeting precision for marketers. Consumer interest is seen as the key dependent variable that influences the degree of participation. Consumer interest is positively affected by message relevance and monetary benefit and negatively affected by information entry/modification costs, message processing costs and privacy costs. 3

Although the term permission marketing was coined by Godin (1999), the general idea of customer permission in direct marketing had surfaced earlier in the marketing literature, mainly in the context of privacy issues in direct marketing. For example, Milne and Gordon (1993) discuss the role of customer permission along with volume, targeting and compensation in the context of direct mail. However, their reference is to an individual's providing a direct marketer the permission to share his or her personal information with others. Permission Marketing (also called Invitational Marketing) envisions every customer shaping the targeting behavior of marketers. Consumers empower a marketer to send them promotional messages in certain interest categories. Typically, this is done by asking the consumer to fill out a survey indicating interests when registering for a service. The marketer then matches advertising messages with the interests of consumers. This is a new idea. Even though targeting appropriate customers has been recognized early on as a core marketing principle, most targeting today can best be described as targeting on averages. The advertiser obtains the average profile of the consumer and chooses, say, a TV show that matches the target consumer profile most accurately. This leads to low targeting precision since not all consumers match the profile. Permission marketing is built around rational calculations by both parties. 5.2 Holistic Approach to Permission Marketing. According to Nath & Gupta (2006) permission marketing can be viewed as: As a Strategy Permission marketing is a strategy, primarily utilizing email and mobile technology, to send consumers information that they have agreed to receive. It asks for and receives permission from the consumer to receive marketing messages. In short, customers volunteer to be marketed to. 4

As an Investment

Permission Marketing is an investment as good things are rarely free. Acquiring solid permission from targeted customers is an investment in time and technology which can be referred to as a long term investment in customers toward loyalty and commitment. As a Campaign Permission marketing is a campaign which converts strangers into friends and friends into customers by providing useful information and desired products and services. This campaign makes the potentials as ambassadors of the brand owned by the organization. As a Marketing Tool Permission marketing is a tool for getting better response rates, increased trust, brand affinity and better deliverability .It will focus on attraction and retention of customers by using the mechanism of offer and acceptance or an agreement. As a Technique Permission marketing is a technique that requires the approval of the customer. Permission marketing aims to create an audience with a high interest level by sending certain types of marketing information only to those who have specifically requested it. As a Communication Process Permission Marketing refers to a communications process, between the marketer and the consumer in which consumer gives "permission" to the marketer to participate and satisfaction or dissatisfaction. 5.3 Importance of Permission Marketing The importance of permission marketing is increasing and it has brought significant changes in world economy. Organizations are adopting permission marketing strategies in order to provide the best and relevant information to some specific set of potentials. Its not just about Entertainment, it's about Education. The concept of permission marketing is widely practiced around the world as it has opened new vistas 5 provides feedback to express his/her

to the entrepreneurs. In India this concept is still in its infancy stage and Indian organizations as well as consumers are still not clear and aware of this modern marketing principle as quoted by Seth Godin. There is lot of research and study required to make Indian population converse for this concept of pre permission. With more research and experience the concept will serve as a handy tool to obtain and retain the informed customers in this ever changing dynamic business scenario where information is serving a major role in making a match between customers expectations and organizations service. Permission marketing if practiced, as a strategy, it would pave the way to revolutionize the marketing system ensuring dual benefits to customers and organizations. 5.3.1 Importance for Banks

Permission Marketing refers to be an useful tool for Banks. Banks which uses due strategy of customer centricity would always like to focus on few selected but profitable customer. The use of permission marketing makes them more competitive in terms of truncation in marketing cost at the one side and segmentation of adequate banking customers. Also it will make sure that banks would be able to draw a good positioning in the mind of consumers (either present or potential) if they target it right. Banks will also avoid themselves to be negatively placed if they promote themselves without prior permission. So, on the both views it becomes an important issue to deliberated and researched upon to make aspects clear. 5.3.2 Importance for customers

Permission Marketing is a selfish game, in which consumers also give the permission for some individual benefit. Consumers will be benefited either by up gradation of their knowledge or due to some rewards which may be linked directly or indirectly with the banking services. Customers therefore will give their consent for such promotions.

Also,

sometime

consumer

gives

permission

unknowingly

by

not

concentrating on various terms and conditions and after that behaves in reverse manner. 5.4 Permission Marketing: A customer Driven Approach Recently, Sheth, Sisodia and Sharma (2000) have proposed the concept of customer-centric marketing, which includes what they call co-creation marketing. Co-creation marketing envisions a system where marketers and consumers participate in shaping the marketing mix. In the authors own words, Co-creation marketing enables and empowers customers to aid in product creation (e.g., Gateway computers), pricing (e.g., priceline.com), distribution and fulfillment (e.g., GAP store or GAP online delivered to the house), and communication (e-mail systems) (Sheth, Sisodia & Sharma 2000, p. 62). Hence, permission marketing can be viewed as focusing on the communication aspect of a larger concept called co-creation marketing. Gilmore and Pine II (1997) had also earlier identified collaboration between marketers and consumers as one form of one-on-one marketing. The central tenet of permission marketing is consumer-initiated

communication followed by an active two-way exchange. Even though exchange is considered to be the bedrock of marketing theory, hence, consumers may not perceive themselves as legitimate partners in a relationship. Since consumers are required to provide detailed information continually in a permission-marketing program, they must perceive some value in exchange One-to-one communication plays a central role in customer relationship management (CRM) and positions e-mail as an important strategic tool (Newell, 2000). Marketers increasingly use e-mail to acquire customers, inform them of new products, and enhance customer relationships (Krishnamurthy, 2000). But as e-mail marketing grows, the volume of commercial e-mail sent explodes and inboxes overflow. A Jupiter research study (2001) found that, for 2% of Internet users, e-mail is the primary 7

reason for going online. Furthermore, a Carnegie ell on University survey revealed that e-mail was used on70% of all Internet sessions. This growing number of e-mail users, together with their high usage makes e-mail the dominant Internet application. 5.5 Permission Marketing Practices. Permission Marketing is a practice that involves the meticulous management of trust, as marketers strategically leverage trust into dependence, and dependence into profit. Through this process, decisionmaking powers are gradually shifted towards marketers and casual customers are transformed into total members. When carried out correctly, Permission Marketing is the most effective and sustainable marketing methodology. The permission Marketing practices aim is to initiate, sustain and develop a dialogue with customers, building trust and over time lifting the levels of permission, making it a more valuable asset. According to Macpherson (2001), one of the theories behind permission marketing is that, presumably, a customer who has give permission to receive promotions is a better, more loyal, and more profitable customer overall. It entails a shift in power from the marketer to the consumers. Costumers permission has to be sought; consumers realize the power in the data they can provide. According to Farris (2001), permission marketing practices mainly adopted by organizations includes practicing digital marketing, such as database marketing internet marketing, email marketing and mobile / SMS marketing with the advent of latest technologies, mobile marketing, SMS marketing and e-mail marketing with permission (not always) are becoming the major practical approach for converting a stranger into friend, and a friend into a customer out of the two, permission based e-mail marketing is more practiced due to its wider reach, cost efficiency and retainability

5.6 Permission based e-mail Marketing. Permission marketing (PM) is commonly defined as promotional e-mail to recipients who consented to receive commercial messages from the sender, typically by signing up at the Companys Website (IMT Strategies, 1999). Permission relationships start with the consumers explicit and active consent to receive commercial messages and always give consumers the possibility to stop receiving messages at any time. Permission Marketing appeals to advertisers because it enables global diffusion of communication messages, while enabling customization without sacrificing the economies of scale of a one-source message originator. Like few other media, opt-in e-mail potentially results in synergies even though multiple audiences are targeted and multiple themes are used .Although acclaimed as the embodiment of global oneto-one communication uniquely suited to personalization and keen targeting(IMT Strategies, 1999), PM presents problems and challenges such as segmentation, building quality e-mail lists, spam, and privacy. Many Thai banks are currently implementing Internet banking. Banks that offer service via this channel claim that it reduces costs and makes them more competitive. Thai firms suggest that security of the Internet is a major factor inhibiting wider adoption. Those already using Internet banking seem to have more confidence that the system is reliable, whereas non-users are much more service conscious, and do not trust financial transactions made via Internet channels .(Mark Speece, 2003) .The study found most consumers (88%) feel in control of their inboxes, up from 79% four years ago, and over half of consumers (58%) believe email is a great way for businesses to keep in touch. Merkle's email marketing study discovered that half of respondents made a purchase online as a direct result of a permission-based marketing message, up 5% from last year. Poor email practices cause consumers to be turned off, with around a third claiming to have stopped doing business with at least one company because of poor email marketing. Likewise, good 9

email marketing programs influenced half of respondents to do business. Relevancy is key, and the study found that consumer-centric messages were the ones that consumers considered most relevant, i.e. transaction confirmations (ranked number 1) and account summaries. Relevancy also plays a part in opting-out, with 73% of respondents doing so if the email content is not relevant. Consumers interaction with PM has increased over time, and continues to present opportunities for marketers in defining their brand, driving behavior, and promoting long-term engagement and loyalty with customers. Marketers who continue to invest in quality email programs will recognize higher engagement and response rates, subscriber retention, and maximize value from their email relationship with customers. Increasingly, organizations are turning to personalized e-mail as the preferred, cost effective method for communicating with customers and building lasting relationships. It allows for greater personalization while providing faster feedback than traditional media such as direct mail. However, e-mail marketing is falling victim to its own success, as legitimate marketers are struggling to separate their messages from the deluge of unsolicited communication (spam). In addition to consistently enforcing opt-in and opt-out preferences, organizations must also secure permission to use the rich customer information they need to design personalize-mails. According to Forrester Research, two-thirds of consumers say that most of the-mails they receive dont offer anything that interests them. To make e-mails more relevant and effective, organizations must leverage information about personal preferences.

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Forty-three percent of e-mail users believe signing up for permissionbased e-mail from retailers and banks leads to more unsolicited e-mail, while nearly one-third believe the unsubscribe button in e-mail offers does not work. Despite such attitudes signaling an erosion of confidence, nearly one-half of online users opting in to receive e-mail marketing messages have been influenced to make purchases from them. Increasing e-mail volumes, changes in composition of messages in the inbox, and use of secondary e-mail accounts will continue to challenge marketers to cut through the clutter. (US E-mail Marketing Consumer Survey, 2006) With Permission Based Email Marketing, loyal clients are just an e-mail away. Where traditional marketing campaigns fail, e-mail can shine through. E-mail marketing allows companies to speak one-to-one with their audience in a respectful, intelligent and creative way. It is extremely cost-effective, provides the foundation for future marketing initiatives, and delivers measurable results. Research and practice has proved that the output coming from the permission based email list is comparatively much higher than any other direct marketing tool. It has a magnetic effect on the traffic flow. No sooner does the email fire, that the click report, automatically generates a higher hit ratio. (Ray Lam, 2008) The theory of reciprocity (Dr. Robert. B. Cialdini) had focused that when something generous was done for a person, that person often felt motivated to reciprocate the goodwill. This tendency of human behavior is directly applicable to permission based email marketing campaigns. The study examines the effects of e-mail marketing on brand loyalty and also reveals the kinds of e-mail content valued by consumers. Data were gathered from 890 consumers, who were users of a multinational cosmetics brand and had received regular permission-based e-mail messages from the marketer.

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Results reveal that regular e-mail marketing has positive effects on brand loyalty. Consumers exposed to e-mail marketing recommended the brand to their friends. Loyal customers appreciated regular communication and various other information content from the brand more than mere offers. These results encourage marketers to keep in frequent contact with customers via e-mail with the aim of enhancing brand loyalty. (Merisavo, Marko; Raulas, Mika, 2004) 6. Implications of the study

Permission Marketing is bizarre technique to be adopted to market the product, especially to some selected and few customers, who are ready to be the customers and had provided their permission. The concept of permission marketing is unique and new in Indian concept. Moreover with the advent of latest techniques like mobile and email, Marketing with the permission is becoming most common tool for growth. Although Customers were receiving promotional messages from marketers by the way of mobile phones and e-mail but the truth is that, as various researches revealed that customers were not happy to give permission and also got annoyed because it will not fetch any benefit to them. There exist various laws on privacy, consumer protection, both at national and at international level. The laws are federal as well as provincial in nature. The review focuses that most of the laws were enacted way back and were providing benefits to the individuals in International context but not in Indian context. .However in Indian Context, nothing great had been undertaken by the Government. Indian Government had passed the Information Technology Act 2000, followed by TRAI regulations to curb unsolicited commercial calls. However both of them were not so effective and still lack in their approach of management of privacy. Therefore, the finding of the study will have several outcomes and it will be useful to banking industry, future researchers and society at large. The 12

finding of the study will be useful for banking industry to be aware of their status with respect to permission marketing being practiced by them, so that appropriate action can be taken to target selected but appropriate customers. The findings of the study will be useful to the future researchers to design and improve the methodology i.e., conduct more focused and broad studies in this area. The society in general and consumers in particular will be benefited by the Permission Marketing Practices.

Proposed Plan of Work

1 Chapter I: Introduction to Permission Marketing 2 Chapter II: Review of related literature. 3 Chapter III: Research Methodology 4 Chapter IV: Findings and Analysis of Data. 5 Chapter V: Interpretation of Findings, Conclusions, Limitations and Suggestions Appendices Bibliography

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Bibliography Akhter, S. H., and Durvasula, S., 1991. Consumers' Attitudes Toward Direct Marketing and Purchase Intentions: An Empirical Investigation. Journal of Direct Marketing. 5(3), 48-56. Anderson, A., and Nilsson, J., 2000. Wireless Advertising Effectiveness: Evaluation of an SMS Advertising Trial. Unpublished Masters Dissertation. Stockholm: Stockholm School of Economics. Barnes, S.J. (2003). Developments in the m-commerce value chain: Adding value with location based services. Geography, Special Issue on Mobile Geographies, vol. 88, no. 4, pp. 277-288 Barwise, P. and Strong, C., 2002. Permission- Based Mobile Advertising. Journal of Interactive Marketing. 16(1), 14-24. Bloom, Paul N., George R. Milne and Robert Adler (1994), "Avoiding Misuse of New Information Technologies: Legal and Societal Considerations," Journal of Marketing, 58:1 (January) 98-110. Dr. Robert, influence, science and practices, forseman and company 1985, summary notes. E Marketer (2000), e Mail Marketing Report, e Marketer, New York, N.Y Gilmore, J.H., Pine, B. J. II (1997), "The four faces of mass customization", Harvard Business Review, Vol. 75 No.1, pp.91-101. Godin, Seth (1999): Permission Marketing: Turning Strangers into Friends, and Friends into Customers, Simon & Schuster, New York. Gupta, Nimit (2008): Permission Marketing: Turning Strangers into Friends and Friends into Customers [book review]. MAIMS Journal of Management, 3 (1), pp 55 14

Hoffman, Donna L. & Thomas P. Novak (1996): Marketing in hypermedia computer-mediated environments: Conceptual foundations, Journal of Marketing, 60(3), 50-69 IMT strategies (1999) The Email Marketing Report Stanford CA IMT Strategies. (1999). Permission E-mail: The Future of Direct Marketing. White paper, 19. Jupiter Media Metrics Research (2001), Summarized in .Internet Usage Report Reveals Shifting Demographics Krishnamurthy (2001): E-Commerce Management: Text and Cases,

Southwestern College Publishing, Mason Mitra, Sabyasachi (2005): Information Technology as an Enabler of Growth in Firms: An Empirical Assessment,Journal of Management Information Systems , 22 (2) ,279- 300 Krishnamurthy, S. (2000). Permission Marketing: Turning Strangers into Friends and Friends into Customers [book review]. Journal of Marketing Research, 37(4), 525527. MacPherson, Kim (2001), Permission-based E-mail Marketing that Works: Dearborn Trade Publishing. Merkle, Biz report; e-mail marketing, April, 18 2008 Nath, Vikas and Gupta, Nimit (2006): In the Realm of Permission Marketing, Review of Professional Management, Vol 4, No.2, pp 62-66. Nath, Vikas and Gupta, Nimit (2006): Permission Marketing- To Market with Prior Approval, DIAS TIMES, Vol.6, No.3, pp 23-25. Newell, F. (2000). Loyalty.com: Customer Relationship Management in the New Era of Internet Marketing, McGraw-Hill. Niall, J. (2000), The Email Marketing Dialogue, Forrester, Cambridge, M.A 15

Petty, R. D., 2000. Marketing without Consent: Consumer Choice and Costs, Privacy, and Public Policy. Journal of Public Policy & Marketing. 19(1), 42-52. Phelps, J. E., D'Souza, G., and Nowak, G. J., 2001. Antecedents and Consequences of Consumer Privacy Concerns: An Empirical Investigation.. 15(4), 2-17. Journal of Interactive Marketing Phelps, J, Nowak, G, Ferrell, E. (2000), "Privacy concerns and consumer willingness to provide personal information", Journal of Public Policy & Marketing, Vol. 19 No. 1, pp.27-41. Sheehan, K.B., & Hoy, M.G. (2000), Dimensions of privacy concerns among online consumers. Journal of Public Policy and Marketing, 19 (1), 62-73. Shiman, Daniel R. (1996): When e-mail becomes junk mail: the welfare implications of the advancement of communications technology, Review of Industrial Organization, 11(1), 35-48. Sheth, Sisodia and Sharma (2000): Permission Marketing: Journal of the Academy of Marketing Science, Vol 28, No.1, 55- 58Tito Tezinde, Brett Smith, Jamie Murphy (2002):Getting permission: Exploring factors affecting permission marketing, Journal of Interactive Marketing, 16(4),28 36 Wright, Newell D. and Bolfing, Claire P. (2001), "Marketing via Email: Maximizing its Effectiveness without Resorting to Spam", unpublished working paper, James Madison University. Wu, J., & Wang, S. (2005). What drives mobile commerce? An empirical evaluation of the revised technology acceptance model. Information and Management, 42 (5), 719-729.

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