HDFC Bank Marketing - This project will be beneficial for my buddies who are studing in MBA PDF

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This project will be beneficial for my buddies who are studing in MBA ...

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MARKETING STRATEGY OPTED BY HDFC BANK.

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ACKNOWLEDGEMENT

It is well-established fact that behind every achievement lays an unfathomable sea of gratitude to those who have extended their support and without whom the would never have come into existence. I express my gratitude to IIPM, New Delhi for providing me an opportunity to work on this thesis as a part of the curriculum. Also, I express my gratitude to Prof. Sumanta Sharma and Prof. Vijay Kumar Boddu on the completion of my .

EXECUTIVE SUMMARY The was carried out for understanding the customer preference & attributes towards of HDFC Bank and its market potential. HDFC Bank was established in the year 1994, they are old player in banking sector, The bank has two principle client segments –customer and asset management. The bank follows values such as – Integrity, teamwork, respect, professionalism, & Mission. The segment of bank we are considering here is- Corporate banking. The product out of which have chosen for research is Saving Accounts. This research helps us in finding out the customers view regarding the product and Services offered by the HDFC bank and awareness by promotion and also identifying the market potential of the product offered by the HDFC bank.

CONTENT ACKNOWLEDGMENT......................................................................v

INTRODUCTION ....................................................................................1 COMPANY PROFILE.............................................................................25

LITERATURE REVIEW.........................................................................41 RESEARCH METHODOLOGY.............................................................57 FINDING AND ANALYSIS.....................................................................59 CONCLUSION......................................................................................71 RECOMMENDATION...........................................................................73 BIBLIOGRAPHY...................................................................................75 ANNEXURE – QUESTIONNAIRE........................................................76

INTRODUCTION

Evolution of Indian Banking Industry Organised banking was active in India since the establishment of the General Bank of India in 1786. After independence, the Reserve Bank of India (RBI) was established as the central bank and in 1955, the Imperial Bank of India, the biggest bank at the time, was taken over by the government to form state-owned State Bank of India (SBI). RBI had undertaken an exercise to merge weak banks to strong banks and the total number of banks thus reduced from 566 in 1951 to 85 in 1969.

With the objective of reaching out to masses and meeting the credit needs of all sections of people, the government nationalised 14 large banks in 1969 followed by another 6 banks in 1980. This period saw enormous growth in the number of branches and the banks’ branch network became wide enough to reach the weakest sections of the society in a vast country like India.

The economic reforms unleashed by the government in early nineties included banking sector too, to a significant extent. Entry of new private sector banks was permitted under specific guidelines issued by RBI. A number of liberalisation and deregulation measures aimed at consolidation, efficiency, productivity, asset quality, capital adequacy and profitability have been introduced by the RBI to bring Indian banks in line with International best practices.

The Current Scenario Currently there are 222 banks in India operating through 68,681 branches. In the past few years, the country has seen the advent of a plethora of private and foreign banks in a land which was once dominated by the public sector banks. This has further intensified competition in an industry where products are getting harder to differentiate and customer retention even more difficult.

The present day demands of customers of banks are so ever increasing that bankers are constantly on the look out for better products and maximising service quality in their customer outlets. To put it in other words banks are constantly in search of Product Innovation and Process Innovation to satiate the demands of their clientele and thereby offer superior ‘customer service’.

2. DEFINING CUSTOMER, SERVICE & CUSTOMER SERVICE

Who is a customer? The word customer has been derived from "custom," meaning, "habit”. As per the literal meaning, a customer is someone who is in the habit of buying or receiving goods or services from the same business organisation. But in today’s world it has much more meaning than the old one. A customer is someone who makes use of or receives the products or services from an individual or organization. In a general term a customer is a person who has some regular commercial dealing.

Incase of banks, a customer is a person who has an account with the bank. As per Section 131 of Negotiable Instruments Act, a bank gets protection when it collects instruments (cheque, draft etc) for and on account of his customer. And for a person to deposit cheque or instrument, he has to have an account. Therefore, for a person to be a customer of a bank he has to have an account relationship with the bank . However, in the present changing scenario when the extent scope of banking is enlarging, this definition of having an account appears to be very narrow. Banks provide many services for which account relationship is not at all required, say for example for purchasing a bankers cheque, demand draft or travelers cheque.

In the modern era, banks are making use of print and other technological media for advertisement of their products and services. These are the offers to masses for

making use of their multiple products. Therefore, the definition of a customer has widened, and he can be broadly classified in to three categories.

1. Those who have account relationship with bank. 2. Those who do not have account relationship, but use the services provided by banks. 3. Those who have been motivated to deal with banks by advertisement, personal contacts etc., they are prospective customers.

What is service? Service is an activity or benefit that one party offers to another that is essentially intangible and does not result in the ownership of any thing. It is nothing but selling of satisfaction. It is a feeling, which a person gets while dealing with an organisation. It can be experienced but cannot be seen. Services are people based, therefore they are highly variable and inseparable from the source i.e. employees. It is about people thinking about taking care of people. In economics and marketing, a service is the non-material equivalent of goods. Service is an ongoing process. What is Customer Service? Customer service is the set of behaviours that a business undertakes during its interaction with its customers. It is the degree of assistance and courtesy granted to those who patronize the organization. It is identification of customers’ needs and expectations and what constitutes positive customer satisfaction. It also includes the codes of ethics, etiquette, behaviour and courtesy.The Service Triangle

Organization

“Enabling promises”

“Making

Providers

Customers “Keeping promises”

This service triangle is the part of the service delivery process. It simply shows that every organization ‘makes promises’ to its customers. It will be is possible for the providers of an organization to ‘keep promises’ only when the organization ‘enables it.’ i.e. it is the management’s/company’s initiative to reach for the highest form of service by making it possible for the working team/management to fulfill the promises made.

In the era of technologically backed competition, awareness level of customers is increasing day by day. Customers have wider choice of products and services. Expectations of customers from banks are increasing. The concept of generation to generation banking has also undergone changes. Customers’ loyalty is conditioned by the quality of products and its delivery mechanism i.e. service. All these have necessitated the banks to provide better and excellent customer service.

3. KEY FACTORS & TRENDS FOR CUSTOMER SERVICE IN BANKS

A. Human Resource – Extending the Personal Touch in Customer Service

Quality services can be provided by quality people and quality people can be carved by quality human resource personnel and the quality human resource personnel are made by the pro-active human resource management policies/practices. The quality of service determines the market share. Quality is the watchword in the present day environment. A common man in India having developed awareness about quality and banking system is no exception. The new private and foreign banks are laying total emphasis on the quality, innovation and convenience. As a result of which, they have been able to penetrate into market share of public sector banks. This has also increased the aspirations and expectations of the bank customers who expect similar services from all banks. The emotional loyalty has given place to the convenience and cost of services, which the bank can provide. It is apprehended that if public sector banks fail to meet the quality standard, they are likely to slip further in terms of their market share. The quality and cost of services shall be the guiding factor for future growth.

Banking is a service industry and delivers its service across the counter to the ultimate customer. The activities of banking industry are all about relationship. Hence, human resource assumes a very important role in the banking industry for providing better services to the customer with a smile in order to cultivate and maintain long lasting relationship with their customers. Not-withstanding the level of technology, banking is primarily a labour intensive service sector. Hence it will not be possible for the banks to sustain effectiveness unless human resource management is given prime importance because the technology is only an aid to human-effort and not a substitute thereof.

A customer deals with people who work in the bank premises. He does business only with people. The person dealing with the customer has therefore to create positive impressions that are memorable and those garners respect admiration and help in building confidence. Staff members have to realise that every interaction with customer is an opportunity to make positive impact on him. They have therefore to understand that "What you do not want done to yourself, do not do to others”

Confucius. Once we keep in mind the saying of Confucius it will automatically result in improvement in the services.

Satisfaction and expectations move together. We cant’s deny that during the yester decades, there have been multi-dimensional changes in the business environment which has shown a major impact on our lifestyles. We find a direct impact of disposable income on the discretionary income. Here it is essential to make it clear that disposable income is that portion of the income which is left in our hands after discharging the tax liability and the discretionary income is that portion of the disposable income which is in our hands after incurring the essential expenses, specially for managing food, shelter, clothing, basic educational band medical aids. It is really the discretionary income which affects the banking business since the income is either spent on luxury items for managing the comfortable living conditions or invested with the motto of earning interest and dividend. It is against this background that upward trend in discretionary income creates a sound nexus or a conductive environment for the development of banking business, specially the mobilization of savings and deposits. In the past, the commercial banks did not find any attraction in the Indian economy because of the meager business prospects-and the low level of income vis-à-vis the stagnating economic activities. Of late, we find good auguries and feel that the Indian economy is moving ahead on the right path which would make the business environment more conductive. No doubt in it that the national development policy has made possible such a positive change in the business environment that the intensity of competition is found at its peak. Just after the beginning of the decade 1990s, we have witnessed a basic change in the attitude of the policy makers which has compelled almost all the organizations either producing goods or generating services to innovate their policy decisions. This in a natural way has necessitated a need more professional excellence so that a stage of fierce competition is accepted

as a challenge and necessary steps are taken to excel competition, increase the market share and establish leadership. COMPANY PROFILE History of Standard Chartered Bank The Standard Chartered Group was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa founded in 1863 and the Chartered Bank of India, Australia and China, founded in 1853. Both companies were keen to capitalise on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods from Europe to the East and to Africa. The Chartered Bank 

Founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853.

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Chartered opened its first branches in Mumbai (Bombay), Calcutta and Shanghai in 1858, followed by Hong Kong and Singapore in 1859.

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Traditional business was in cotton from Mumbai (Bombay), indigo and tea from Calcutta, rice in Burma, sugar from Java, tobacco from Sumatra, hemp in Manila and silk from Yokohama.

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Played a major role in the development of trade with the East which followed the opening of the Suez Canal in 1869 and the extension of the telegraph to China in 1871.

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In 1957 Chartered Bank bought the Eastern Bank together with the Ionian Bank's Cyprus Branches. This established a presence in the Gulf.

Organizational Structure of Banks in India:

In India banks are classified in various categories according to differ rent criteria. The following charts indicate the banking structure:

Reserve Bank of India

Commercial Banks

Nationalized

Agricultural Credit

Private

Co-operative Banks

Short-term credit

Urban Credit

EXIM

Development Banks

Long-term credit

Industrial

Agricultural

Broad Classification of Banks in India: 1) The RBI: The RBI is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in the country. It keeps the reserves of all scheduled banks and hence is known as the “Reserve Bank”. 2) Public Sector Banks: 

State Bank of India and its Associates (8)



Nationalized Banks (19)

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Regional Rural Banks Sponsored by Public Sector Banks (196)

(3) Private Sector Banks: 

Old Generation Private Banks (22)

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Foreign New Generation Private Banks (8)

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Banks in India (40) (4) Co-operative Sector Banks: 

State Co-operative Banks

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Central Co-operative Banks

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Primary Agricultural Credit Societies

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Land Development Banks

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State Land Development Banks

In addition to its traditional central functions, the Reserve bank has certain nonmonetary functions of the nature of supervision of banks and promotion of sound banking in India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949 have given the RBI wide powers of supervision and control over commercial and cooperative banks, relating to licensing and establishments, branch expansion, liquidity of their assets, management and methods of working, amalgamation, reconstruction and liquidation. The RBI is authorized to carry out periodical inspections of the banks and to call for returns and necessary information from them. The nationalization of 14 major Indian scheduled banks in July 1969 has imposed new responsibilities on the RBI for directing the growth of banking and credit policies towards more rapid development of the economy and realization of certain desired social objectives. The supervisory functions of the RBI have helped a great deal in improving the standard of banking in India to develop on sound lines and to improve the methods of their operation. Promotional Functions: With economic growth assuming a new urgency since Independence, the range of the Reserve Bank’s functions have steadily widened. The Bank now performs a variety of developmental and promotional functions, which, at one time, were regarded as outside the normal scope of central banking. The Reserve Bank was asked to promote banking habit, extend banking facilities to rural and semi-urban areas, and establish and promote new specialized financing agencies. Accordingly, the Reserve bank has helped in the setting up of the IFCI and the SFC: it set up the Deposit Insurance Corporation of India in 1963 and the Industrial Reconstruction Corporation of India in 1972. These institutions were set up directly or indirectly by the Reserve Bank to promote saving habit and to mobilize savings, and to provide industrial finance as well as agricultural finance. As far back as 1935, the RBI set up the Agricultural Credit Department to provide agricultural credit. But only since 1951

the Bank’s role in this field has become extremely important. The Bank has developed the co-operative credit movement to encourage saving, to eliminate money-lenders from the villages and to route its short term credit to agriculture. The RBI has set up the Agricultural Refinance and Development Corporation to provide long-term finance to farmers. Co-operative Banks: The Co-operative bank has a history of almost 100 years. The Co-operative banks are an important constituent of the Indian Financial System, judging by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices they operate. The co-operative movement originated in the West, but the importance that such banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural financing continues to be important even today, and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of co-operative banks. While the co-operative banks in rural areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and self-employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for selfemployment, industries, small scale units, home finance, consumer finance, personal finance, etc. Some of the co-operative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks. According to NAFCUB the total deposits & lendings of Co-operative Banks is much more than Old Private Sector Banks & also the New Private Sector Banks. This exponential growth of Co-operative Banks is attributed mainly to their much better local reach, personal interaction with customers, their ability to catch the nerve of the local clientele. Though registered under the Co-operative Societies Act of the Respective States (where formed originally) the banking related activities of the cooperative banks are also regulated by the Reserve B...