Marketing of Banking Services (Urban Areas)

MARKETING OF BANKING SERVICES (URBAN AREAS)
INTRODUCTION OF BANKING IN INDIA
The word “Bank” is originated from the German word

“Bank” which means heap or mound or joint stock fund. From
this, the Italian word “banco” meaning heap of money was
coined. The English meaning of “bank” is prevalent today, i.e.,
as an institution accepting money as deposits for lending.
A bank is an institution, which deals in money and

credit. Thus, bank is an intermediary, which handles other
people’s money both for their advantage and to its own profit’s
but bank is merely a trader in money but also an important
manufacturer of money.
For a common person it may be just a storehouse

where he may store his money; for a businessman it may be a
financial institution and a day-to-day customer it may be an
institution where he can deposit his savings.
Bank plays an important role in the economy of any

country as they hold the saving of the public. Provides a means
of payment for the goods and services and provide necessary
finance for the development of business and trade. Bank may
also be defined as a financial institution that links the flow of
funds from savers to the users.
Bank is also 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”.
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A banking company may be defined as “any company

which transacts the business of banking”
Customers Relationship Management, on the other

hand, is an individualistic approach which concentrates on
certain select customers from the homogeneous groups, and
develops sustainable relationships with them for adding value to
the bank. This may be termed as a "Selective" approach. Thus,
bank marketing concept, whether "collective" approach or
"selective" approach, is a fundamental recognition of the fact
that banks need customer oriented approach. In other words,
bank marketing is the design and delivery of customer needed
services worked out by keeping in view the corporate objectives
of the bank and environmental constraints.
BANKING SYSTEM
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INTRODUCTION
Bank safeguards money and valuable and provide loans, credit,
and payment services such as checking accounts, money orders,
and cashiers checks. Banks also may offer investment and
insurance products, which they were once prohibited from
selling. As a variety of models for co operation and integration
among finance industries have emerged, some of the traditional
distinctions between banks, insurance companies, and securities
firms have diminished. In spite of these changes, banks continue
to maintain and perform their primary role accepting notes and
lending funds from these deposits. There are several types of
banks which differ in the number of services they provide and
the clientele they serve. Although some of the differences
between these types of banks have lessened as they begin to
expand the range of products and services they offer, there are
still key distinguishing traits.
DIFFERENT TYPES OF BANK
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COMMERCIAL BANK:
IT dominates industry, offer full range of services for individuals,
businesses and governments. These banks in a wide range of
sizes, from large global banks to regional and community banks.
GLOBAL BANKS:
They are involved in international lending and foreign currency
trading, in addition to the more typical banking services.
REGIONAL BANKS:
They have numerous branches and automated teller machines
(ATM) locations throughout a multi state that provide banking
services to individuals. Banks have become more oriented
toward MARKETING AND SALES. As a result, employees need
to know about all types of products and services offered by
banks. Community banks are based locally and offer more
personal attention, which many individuals and small businesses
prefer. However, many traditional banks have also expanded to
offer online banking, and some formerly internet only banks are
opting to open branches.
SAVINGS BANKS:
Savings and loan associations, sometimes called thrift
institutions are the second largest group of depository
institutions. They were first established as community. The
structure of banking differs from country to country depending
upon their economic conditions, political structure and financial
system. Banks can be classified on the basis of operations,
business pattern and areas of operations. They are termed as
systems of banking.
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CORRESPONDENT BANKING:
It is the system developed to remove the difficulties in unit
banking systems. In this system unit banks are linked with
bigger banks. The bigger banks, with which such deposits are so
made, are called correspondent banks. Therefore correspondent
banks are intermediaries through which all banks are linked with
bigger banks in financial centers. This system is very common in
international banking transactions.
GROUP BANKING:
It is a system in which two or more independently incorporated
banks are brought under the control of holding company. The
holding company may or may not be a banking company. Under
group banking the individual’s banks may be unit banks or
operating branches or a combination of the two. This system has
developed in United States in 1990. It became popular and
extensively developed in 1920
COMMERCIAL
BANK
GROUP
GLOBAL BANK
BANKING
DIFFERENT
TYPES OF
BANKS
CORRESPO-
REGIONAL
NDENT
BANKING
BANKS
SAVINGS
BANK
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Meaning of Marketing:
In the most simple and not-technical language

marketing may be defined as a business function entrusted with
the creation and satisfaction of customer to achieve the aims of
business itself.
According to Philip Kotler, “marketing is a human activity
directing at satisfying needs and wants through exchange
process.”
Business aims at profit:

1. To realize profit, a sale has to be made.
2. To make the sale, a customer has to be created.
3. To retain the customer, he has to be satisfied.
4. To satisfy the customer, his needs have to be me.
5. To meet his needs, the product should conform to the

requirements of the customer.
The analysis exactly fits in to Drucker’s

comment on the purpose of the business, i.e. to create a
customer.
This idea may be stretched a little further to structure
the term marketing as one that is directly concerned with
demand: its recognition, anticipation, creation. Stimulation and
finally satisfaction. Thus marketing is, therefore, eyes and ears
of the business. It is responsible for keeping the business in
close contact with its environment and informed of events that
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can influence its operations. Because of changing emphasis it is

no easy task to define the term marketing. However, it may be
defined “as a social and managerial process by which individuals
and groups obtain what they need and want through creating
and exchanging products and value with others”. It is concerned
with identifying consumer ‘needs’ and determining ways in which
the organization is able to meet those needs in a profitable
manner. In general, marketing activities are all those associated
with identifying the particular wants and needs of a target
market of customers, and then going about satisfying those
customers better than the competitors? This involves doing
market research on customers, analyzing their needs, and then
making strategic decisions about product design, pricing,
promotion and distribution.
DEFINITION OF
(1)According to William Stanton, “marketing is a total system

of business activities designed to plan, price, promote and
distribute want satisfying products to target markets in order
to achieve organizational objectives.”
(2)According to Philips kotlar, “marketing is a human activity

directed at satisfying needs and wants through exchange
process.”
CHARACTERISTICS OF MARKETING:
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(1) Regular and continuous activity: marketing is a

continuous activity in which goods and services are
manufactured and distributed to the consumers.
Assembling, grading, packaging, transportation,
warehousing etc are the activities which are
supplementing marketing and are useful for the
smooth conduct of the marketing operations.
(2) Satisfaction of human wants: marketing activities are

basically for the satisfaction of consumer needs.
Identification of consumer needs should be the
starting point of marketing activities.
(3) Relates to goods and services: marketing is

concerned with the exchange of goods and services
with the medium of money between the buyer and
seller of the goods.
(4) Transfer of ownership: marketing of goods brings

transfer of ownership and services and facilities
physical distribution production acts as a base of
marketing.
(5) Importance of 4ps: marketing is the sum total of

product, price, promotion and physical distribution
which are often termed as the 4ps of marketing.
Large scale marketing is possible through appropriate
combination of four Ps called the marketing mix.
SERVICES
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Meaning of Service
A service is an activity or benefit that one party can
offer to another which is essentially intangible and does not
result in the ownership of anything. Its production may or may
not tied to a physical product. "Thus services are separately
identifiable: essentially intangible activities which provide want
satisfaction and that are not necessarily tied to the sale of a
product or service. To produce a service may not require the use
of tangible goods. However, when such use is required there is
no transfer of title [permanent ownership] to those tangible
goods."
According to “American Marketing Association” “Services are the

activities, benefits or satisfactions which are offered for sale or
are provided in connection with the sale of goods.”
Services as defined in the clause (v) of section 2 of

the ‘MRTP Act’ mean service of any description which is made
available to potential users and includes the provision of facilities
in connection with banking, financing, insurance, transport,
processing, supply of electrical or other energy boarding or
lodging or both, entertainment amusement or purveying of news
or other information but does not include the rendering of any
service free of charge or under a contract of personal service.
When a customer buys a service in the service market,
he buys the time, knowledge, skill or resources of someone else
who is the provider or supplier of the service. The buyer receives
only satisfaction or benefits from the activities of the provider
who may be an individual, a firm or a company specializing in
selling certain benefits or satisfaction.
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CHARACTERISTICS OF SERVICES
Services have four important characteristics which make
them so different from physical products.
• INTANGIBILITY
The distinguishing feature of a service is its
dominant intangible aspect. Some intangible features
as listed by ‘J.Bateson’ are:
• A service cannot be touched.

• Precise standardization is not possible.
• There is no ownership transfer.
• A service cannot be patented.
• Production and consumption are inseparable.
• There is no inventories of the services, and.
• The consumer is a part of production-process, so the
delivery system must go to market or the customer
must come to delivery system.
Pre-testing the service is not possible as they cannot be seen,

tasted, felt, heard and smelt before they are bought. When a
prospective customer cannot experience the product in advance
they are asked to buy what are essentially promises of
satisfaction. The buyer has to have faith in the service-provider.
Client's confidence in the service can be created by taking the
help of celebrities, developing a brand name, increasing services
tangibility, emphasizing services benefits rather than just
describing its features.
• INSEPARABILITY
A service cannot be separated from its provider. This is in
direct contrast to a physical product, which exists whether
or not its source is present. As the provider only can
render the service(s), it limits the firm's scale of operation.
To overcome this limitation the service provider can learn
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to work with larger groups, to work, faster or the service

organization can train more service providers.
• VARIABILITY
In most cases human element is involved in providing service.
Thus depending upon who provides them and when and where
they are provided the quality of service is bound to vary.
Standardization becomes a difficult task to achieve. So to ensure
quality, service firms should take care to select proper personnel
and give them adequate training for the work and should have a
proper system to monitor customer satisfaction.
• PERISHABILITY
Services cannot be stored. So services not utilized are lost
forever. Perish ability of service is not a problem as long as the
demand for the same is steady. Number of service, providers
(staff) can be planned in advance for expected demand. But it
becomes a problem when it faces fluctuating demand. So, to
overcome this problem, the service concerns should have proper
product planning, pricing, and built-in flexibility in the
organization.
• OWNERSHIP
In the case of goods, after the completion of process, the goods
are transferred in the name of the buyer and he becomes the
owner of the goods. But in case of services, we do not find this.
For e.g. a consumer can use hotel room or swimming pool,
however the ownership remains with the providers.
FEATURES
OF
SERVICES
VARIABIL PERISHA OWNER

INTANGIB INSEPAR BILITY
ITY SHIP
ILITY ABILITY
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• CLASSIFICATION OF SERVICES
There is wide variation in the nature of services
rendered which makes it difficult to classify them in a particular
manner. They can be classified from different angles.
First, they may be people-based or equipment-based.
People-based services are rendered by either professional’s viz.

doctors, Accountants, lawyers, skilled workers viz., plumber,
carpenter or unskilled worker viz. Laborers, coolies etc.
Equipment based services may be classified on the
basis of amount of equipment used or nature of equipment used
like automated equipment and equipments operated by skilled
labour or relatively unskilled labour. Sometimes the equipment
may add value to the services or it may exist to reduce the
amount of labor needed.
Second, the delivery of service may require the presence of

client or may not. If delivery of service required the presence of
client it demands something extra from the service provider to
be alert and considerate of the client's needs.
Third, the service can be classified on the basis of clients

purchase motives. If the service meets a personal need it may
be termed as personal service or if it meets a business need it
may be termed as a business service.
Fourth, on the basis of service providers motives (profit or non-

profit) and form (private or public) services can be categorized
into four types by taking two Characteristics at a time, i.e.
private profit seeking, private charitable and similarly public
profit seeking, public charitable.
Finally, a classification can be made on the basis of the nature of

services rendered. These may be financial (Banking, Insurance),
medical, educational, personal transport, communication,
storage, entertainment, consultancy etc. This may lead to
creation of specialized service-industries as we have for physical
products.
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SERVICE MARKETING
Introduction
On the basis of survey of literature, an attempt
has been made to trace the evolution of marketing, explain the
marketing concept such as its meaning and definition, point out
peculiarities of service marketing, and its relevance relationship
of marketing to banking business, and growth of bank
marketing. A brief account of bank marketing sense in India has
also been attempted.
CONCEPT OF MARKETING
An analysis of contemporary literature reveals
clearly is conceptual variation in the use of the term marketing.
They describe it as a “function”, an “orientation” or an “attitude”
or a management science or technique. A closure analysis would
reveal that marketing in fact conveys all of these and often
more. An attempt is made here to trace the evolution of
marketing and deal with all such concepts through which
marketing has been viewed.
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EVOLUTION OF MARKETING CONCEPT
If we go back to the times before and after the

nomads tried to settle down on the banks of rivers, we will find
that there were no markets. This can be said as a ‘self-sufficient
stage’. Each family then was a self-sufficient unit as far as
production and consumption were concerned. Barter system
came into vogue giving rise to an ‘exchange oriented’ stage. To
facilitate this exchange process central market were developed.
These developments laid the foundation stone of marketing.
The term marketing has changed and evolved over a

period of time, today marketing is based around providing
continual benefits to the customer, these benefits will be
provided and a transactional exchange will take place.
With the change in the business environment there has also

been a change in the areas of trust. Emergence of competition
has gradually changed the seller’s market in to buyers market.
This period of transition has witnessed changes in the areas of
focus and angle from which marketing is viewed. There are five
competing concepts on which marketing is based. They are:
• Production Concept
The production concept holds that consumers favor
those products that are available and highly affordable. Where
the demand of a product is more than its supply or where the
product's cost is higher, it is natural that one will concentrate on
finding ways to increase production to make the product
available and affordable to consumers. Thus, the emphasis was
on the production and manufacturing and making the process as
efficient as possible, seeking to achieve the greatest output at
the most economic levels of cost.
• Product Concept
The product concept holds that consumers favour those products
that offer the quality, performance and features and therefore
the organizations should devote its energy to making continuous
product improvements. The product concept Leads to marketing
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myopia because it presumes that customers will continue to buy

the product as long as the quality of the product is good but it
overlooks the fact that customers are interested in their need
satisfaction not in the product. Any other unproved product of a
competitor may satisfy the need of the customer better.
• Selling Concept
This concept was based on the idea that the customer will either
not buy or not buy enough of the organization’s products unless
the organizations make effort, to stimulate customer's interest in
their products. It was assumed that the products are sold-not
bought. Under this approach, which dominated 1950s, the entire
focus of organizations was shifted to gearing up their sales
department. Their attitude was that the sales department has to
sell whatever the organization produced.
• Marketing Concept
The marketing concept is a more recent philosophy, which
brought about a significant change in the approach of
organizations towards their products and customers, in
marketing; the attention is focused on producing such goods
which are wanted by the customers rather than selling whatever
goods have been needlessly produced. Thus the marketing
concept holds that the key to achieving organizational goals
consists in determining the needs and wants of target-markets
and delivering the desired satisfaction more effectively and
efficiently than competitors.
• Societal Marketing Concept

In the age of environmental deterioration, resource shortages,
explosive population growth, worldwide inflation and neglected
social services, it is expected that firms that senses, serves and
satisfies individual wants should gear themselves to act in the
best long run interest of consumers and society. Therefore there
is emergence of societal marketing. Thus, this concept connotes
that the organizations task is to determine the needs, wants and
interest of target markets and to deliver the desired satisfaction
more effectively and efficiently than competitors in a way that
preserves or enhances the consumer’s and society's well-being.
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SERVICE MARKETING
The concept of marketing discussed previously was initially
developed to market a physical product. Now it becomes
essential to find out if the same concept developed for marketing
of physical products is applicable to the marketing of services.
Before we come to this point, it is natural that we have no two
meanings regarding services and their characteristics.
The Importance of Marketing in the Service-Sector:

Marketing was not that popular in services-
industries as it was with manufacturing firms. The reasons are
obvious. Many service businesses were small and were not using
management techniques such as marketing which they thought
would be expensive or irrelevant. There were also service
businesses like law and accounting firms which believed that it is
unprofessional to resort to marketing. They relied more on their
knowledge and efficiency than marketing their services. Some
service businesses like, educational institutions and hospitals had
so much demand that they had no need for marketing.
In India services sector has grown significantly. Its growth is

also quite important for India. Diagram has shown, the
employment elasticity [to GDP growth] in the services sector is
higher than as in the case of both agriculture and manufacturing
sector. Secondly, the services sector by providing
complementary services to agriculture and industry, acts as a
catalyst in the growth of the entire economy. Thirdly, with its
greater flexibility in location, low capital intensity and personal
nature is ideally suited for the small sector, which is the most
important sector for overall development of Indian economy.
Accordingly, the services sector has grown faster than the
commodity sector.
BANK MARKETING
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INTRODUCTION
In recent years, the banking industry around the world

has been undergoing a rapid transformation. In India also, the
wave of deregulation of early 1990s has created competition and
greater risk for banks and other financial intermediaries. The
cross-border flows and entry of new players and products have
forced banks to adjust the product-mix and undertake rapid
changes in their processes and operations to remain competitive.
Over the years, Indian banks have expanded to
cover a large geographic & functional area to meet the
developmental needs. They have been managing a world of
information about customers - their profiles, location, etc. They
have a close relationship with their customers and a good
knowledge of their needs, requirements and cash positions.
Though this offers them a unique advantage, they
Face a fundamental problem.
During the period of planned economic development,
the bank products were bought in India and not sold. Marketing
is a customer-oriented operation. What is needed is the effort on
their part to improve their service image and exploit their large
customer .
Information base effectively to communicate

product availability. Furthermore, banks need to have very
strong in-house research and market intelligence units in order
to face the future challenges of competition, especially customer
retention. Marketing is a question of demand (customers) and
supply (financial products & services, customer services through
various delivery channels). Both demand and supply have to be
understood in the context of geographic locations and competitor
analysis to undertake focused marketing (advertising) efforts.
Focusing on region-specific campaigns rather than national
media campaigns would be a better strategy for a diverse
country like India.
Throughout much of the last decade, banks
world-over have re-engineered their organizations to improve
efficiency and move customers to lower cost, automated
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channels, such as ATMs and online banking but this need not be
the case.
As it is proved by the experience, banks are now
realizing that one of their best assets for building profitable
customer relationships especially in a developing country like
India is the branch-branches are in fact a key channel for
customer retention and profit growth in rural and semi-urban set
up. However, to maximize the value of this resource, our banks
need to transform their branches from transaction processing
centers into customer-centric service centers. This
transformation would help them achieve bottom line business
benefits by retaining the most profitable customers. Branches
could also be used to inform and educate customers about other,
more efficient channels, to advise on and sell new financial
instruments like consumer loans, insurance products, mutual
fund products, etc.
We define bank marketing as “Bank marketing is the

aggregate of functions, directed at providing services to satisfy
customers financial (and other related) needs and wants, more
effectively and efficiently than the competitors keeping in view
the organizational objectives of the bank.”
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• CONCEPT OF BANK MARKETING

Marketing as it is viewed today is a way of managing
a business so that each strategy is evolved with foreknowledge
of the impact of such decision on the customer. Banks have
broadly three dimensions, i.e., deposits, borrowings and other
allied services. Anyone who interacts on any of these fronts is
qualified to be a customer of a bank. Thus, a bank renders
financial services as an intermediary. As it renders personalized
services and the present emphasis in
Marketing is customer satisfaction it will not be inappropriate
here to observe that “customer of a bank is king”.
Therefore bank marketing implies that “it is the creation and

delivery of financial services suitable to meet the customer's
needs at a profit to the bank”.
The concept of bank marketing encompasses:
• Identifying the most profitable markets now and in future;

• Assessing the present and future needs of customers;
• Setting business development goals and making plans to
meet them;
• Managing the various services and promoting them to
achieve the plans;
• Adapting to a changing environment in the market place.
From the above discussion of the bank marketing it

can be understood that the existence of the bank has little value
without the existence of the customer. The key task of the bank
is therefore not only to create and win more and more customer
but also to retain them through effective customer service.
Marketing as related to banking is to define an appropriate
promise to a customer through a range of services (products)
and also to ensure effective delivery through satisfaction. The
actual satisfaction delivered to be a customer depends upon how
the customer is interacted with. It goes on to emphasis that
every employee from the topmost executive to junior most
employee of the bank is marketer.
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• MARKETING STRATEGIES
INTRODUCTION
Marketing strategy implies development of an action
plan to achieve the marketing objectives. It involves skill and
concerned effort on the part of management to evolve tools and
techniques, which are understood and accepted throughout the
organization in furtherance of the marketing cause.
According to Granroos, marketing strategy in
the case of services may consist in traditional external
marketing, internal marketing and interactive marketing.
Traditional external marketing consists of usual
four ‘Ps’ of Product, Price, Place and Promotion of marketing mix.
Internal marketing is that the service firm must effectively train
and motivate its customer-contact-employees as well as all the
supporting service personnel to work as a team to provide
customer satisfaction. Interactive marketing is that the
perceived service quality is highly dependent on the quality of
buyer/seller interaction.
Traditional Marketing- the Marketing Mix

Marketing mix is a combination of tools and
techniques with which a marketer has to meet the consumers in
furthering his marketing objectives. The tools, as propounded by
different authorities, are many, but traditionally they are the
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famous 4 Ps viz., Product, Price, Place and Promotion. Therefore,

they constitute the tools of traditional marketing.
THE CONCEPT OF MIX:

Before the individual tools and techniques are
discussed one point which needs emphasizing is that none of the
tools are very useful in isolation. It is important, therefore, to
think from the very beginning in terms of a judicious blend of the
tools and techniques of marketing mix. “Business executive is a
‘decider’, an ‘artist’ a ‘mixer of ingredients’, who sometimes
follows a recipe prepared by others, sometimes prepares his own
recipe has he goes along, sometimes adapts a recipe to the
ingredients immediately available and sometimes experiments
with or invents no one else has tried".
From the above statement, given by Prof. ‘James
Culliton’ in his study of “manufacturer’s marketing cost”, Prof.
‘Neil H. Borden’ took a clue to describe the marketing executive
as a “mixer of ingredients” one who is constantly engaged in
fashioning creatively a mix of marketing procedures and policies
in his efforts to produce a profitable enterprise. Thus the concept
of marketing mix is evolved.
It is needless to state that all products and
services are not for all segments, all segments may not afford
the same price, the same place may not be suitable for all
segments for delivery of the products/service or the same
promotional measure May not arouse same level of confidence in
all the customers. Therefore, the essence of traditional
marketing lies in providing each group of customers a segment
with a cost-effective mix of product, price, place and promotion
most suits their needs.
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• 4 P’S OF MARKETING
•
PRODUCT
“A product is anything that can be offered to a market
for attention, acquisition, use or consumption that might satisfy
a want or need. It includes physical objects, services, persons,
places, organizations and ideas.” The function of marketing is to
assess what attributes the consumer seeks from the product and
to combine these to make the most attractive product offering
that, in turn, will optimize the company’s profits. Our concern
here is with the ‘services’. This is the product which banks deal
in. Thus it becomes essential to keep in mind the peculiarities of
services like its intangibility, inseparability, variability and perish
ability before we frame any product strategy. By buying a
service a customer doesn't possess anything as in case of a
physical product. What he gets is satisfaction of his wants and
needs from the use of the service. Thus a bank product is
“anything that has the capacity to provide the satisfaction, use
and return desired by the customer.”
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As ‘Theodore Levitt’ has suggested there are four

different levels of satisfaction constituting a total product
concept.
Levels of Satisfaction
The basic utility that the customer derives from a
product is the first level or core level placed at the centre
surrounded by higher levels of satisfaction. At each level more
and more value addition takes place.
For a banking service such as a deposit account, the core

element might be safety and return on deposits. The higher level
associated with it is expectation. The customer also expects that
the transaction must be completed without undue delay and neat
and accurate statement of account should be given to him and
all that in a warm and friendly atmosphere. E.g. Customers who
purchase a camera are buying more than just a camera they are
purchasing memories. At the augmented Level the banker on his
own provides additional services, such as, a loan facility, locker
facility, credit card and also customer service which differentiate
the product from that of competitors. The highest level, the
potential level, consists of all potential additional features which
the banker is capable of packing into the banking product,
besides, forging personal rapport with the target customer. Thus
the banker transforms into a friend, philosopher and guide at
this stage.
LEVELS OF SATISFACTION
The Product Life Cycle

A product's life cycle (PLC) can be divided into
several stages characterized by the revenue generated by the
product. If a curve is drawn showing product revenue over time,
it may take one of many different shapes, an example of which
is shown below:
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PRODUCT LIFE CYCLE CURVE:
DEVELOPMENT STAGE:
Product development is the incubation stage of the product life
cycle. There are no sales and the firm prepares to introduce the
product. As the product progresses through its life cycle,
changes in the marketing mix usually are required in order to
adjust to the evolving challenges and opportunities.
INTRODUCTION STAGE
When the product is introduced,
sales will be low until customers become aware of the product
and its benefits. Some firms may announce their product before
it is introduced, but such announcements also alert competitors
and remove the element of surprise. Advertising costs typically
are high during this stage in order to rapidly increase customer
awareness of the product and to target the early adopters.
During the introductory stage the firm is likely to incur additional
costs associated with the initial distribution of the product. These
higher costs coupled with a low sales volume usually make the
introduction stage a period of negative profits.
GROWTH STAGE:
The growth stage is a period of rapid revenue
growth. Sales increase as more customers become aware of the
product and its benefits and additional market segments are
targeted. The Marketing team may expand the distribution at
this point. When competitors enter the market, often during the
later part of the growth stage, there may be price competition
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and/or increased promotional costs in order to convince

consumers that the firm's product is better than that of the
competition.
MATURITY STAGE:
The maturity stage is the most profitable.
While sales continue to increase into this stage, they do so at a
slower pace. Because brand awareness is strong, advertising
expenditures will be reduced. Competition may result in
decreased market share and/or prices. The competing products
may be very similar at this point, increasing the difficulty of
differentiating the product. The firm places effort into
encouraging competitors' customers to switch, increasing usage
per customer, and converting non-users into customers.
DECLINE STAGE
Eventually sales begin to decline as the market becomes
saturated, the product becomes technologically obsolete, or
customer tastes change. If the product has developed brand
loyalty, the profitability may be maintained longer. Unit costs
may increase with the declining production volumes and
eventually no more profit can be made.
PRODUCT MIX
Product mix is the list of all products offered for sale.
The concept behind the product mix is that a marketer typically
manages to market a number of different products which are in
different stages of their life-cycle. This disparity of performance
calls for different types of decisions in response to differing
market circumstances. A product mix is essential because:
1. There are an ever growing number of new products, each
requiring the development of specific marketing plans to manage
them through their life-cycles.
2. There is an imperative need to prioritize products with
respect, to the resources available with the marketer which will
be allocated toward their management. Some products may
offer better opportunities in attaining marketing Objectives than
others.
3. As many of the bank products are related to each other there
is a likelihood of crippling an existing product with a new
product. The product mix approach provides the marketer with
better advantage thereby reducing the extent of his problem.
25
BOSTON CONSULTANCY GROUP

This product portfolio matrix classifies product lines
into four categories. The BCG model suggests that organizations
should have a healthy balance of products within their range.
The Boston Consultancy Group classified these products as
following:
The BCG matrix divides the products and services into 4 groups:
Dogs, Cash Cows, Stars, and Dogs are products and services
which are not doing well in a market and with little potential.
They are the products which might attract customers who will
then be attracted to more profitable services. But no bank can
bear the cost of too many dogs.
Cash cows are product and services form the core of the
business always in demand and produce high revenue in a stable
market. Cash Cow is products at the mature stage of the
lifecycle, they generate high amounts of cash for the company,
but growth rate is slowing. There are chances that the product
may slip into decline; appropriate marketing mix strategies
should be employed to try to prevent this from happening.
Stars are products making an important contribution to the

business in a growing market. Stars have high market shares
that operate in growing markets. The product at this stage
should be generating positive returns for the company.
Question Mark is a product which is presently enjoying low

market share but is considered to have high growth potential. A
push at this stage will convert the problem child’ into star
product. These are products with low market share but operate
in high market growth rates. The company puts a lot of
resources in this product in the hope that it will eventually
increase market share and generate cash returns in the future.
ICICI bank has high market growth along with highly capturing
market share and hence he falls under the category STARS.
26
PRICE
The second P of the marketing mix is price.
Price refers to the amount of money a customer is willing to pay
for the product. From the supplier’s angle, it is the amount of
money at which the firm is prepared to offer its goods and
services. Buying and selling, in a competitive market, is a game
in which a transaction takes place. It is necessary that both
buyer and seller must have the feeling of winning from the
transaction.
The seller, looks to the cost plus profit and buyer looks to the
satisfaction in return for price to be paid. The satisfaction is a
judgment, a notion, a feeling and as such cannot be quantified in
terms of money. It differs from person to person. Accordingly,
the variable that determines the satisfaction would differ from
person to person. Thus the banks while pricing their products
must take care of this factor and rely on product quality and
promotion. A hike in price is always viewed by the public with
skepticism and distrust but it could be alleviated by better
communication, between bankers and their customers. One
survey pointed out that when customers were offered an
explanation for changes in fees, the proportion of customers,
who viewed the changes as justified, increased by about 50 per
cent.
The other side of the pricing is cost. Price should cover the costs
and a return for the organization to thrive. But the relationship
between costs and benefits offered by the banks in India, over
the years, has been very hazy. This is because banks were
operating in an administered structure where the rates of
interest on deposits and advances were prescribed by the RBI.
Therefore, theories relating to pricing which assume the free
play of market forces were of little relevance. Due to lack of
professional approach to the pricing of services offered by the
banks there were variations in charges for different services.
However, due to the efforts of Indian Banks Associations, public
sector accepted a uniform schedule of charges in respect of
several services in 1985.
Since 1991, after liberalization of financial system and gradual
interest rate deregulation by RBI there has been keen
competition among banks resulting in dwindling spreads, from 7
27
percent in 1991 to 2 per cent in 1996. Participation in the rate

war (price fixation) without concern for cost will be suicidal. So a
cost in the competitive scenario is of paramount importance.
While there is no single recipe to determine pricing, the
following is a general sequence of steps that might be followed
for developing the pricing of a new product:
1. Develop marketing strategy - perform marketing analysis,

segmentation, targeting, and positioning.
2. Make marketing mix decisions - define the product,
distribution, and promotional tactics.
3. Estimate the demand curve - understand how quantity
demanded varies with price.
4. Calculate cost - include fixed and variable costs associated
with the product.
METHODS OF PRICING (PRICING TRIPOD)
1. COST BASED PRICING:

This the simplest form of pricing. In this pricing strategy, you
take the "Cost Price" of the product and you add to it how much
profit you would like to make per unit sold. What you get is the
“Selling Price”. To understand this better, consider you make
100 units of a product and it costs you Rs.10 per piece. Now you
decide that you would like to make a 2% profit.
So you charge Rs.2 extra per product and keep that is your
profit. This seems to make sense. However, this pricing strategy
is very crude. This pricing strategy is independent of the market
and your target consumer. Besides this, in the production of
product, these must be some "fixed cost" that is independent of
the quantity produced. This cost may not be directly accounted
for in this system.
2. DEMAND BASED PRICING

In this method of pricing the cost is not considered but
the service provider allows the demand to determine the price.
Demand based pricing is generally used to where the services
are price sensitive. The consumer perception of the value of the
service quality varies. Therefore successful demand based
28
pricing is based on effective segmentation of market to achieve

the maximum price from the segment.
3. COMPETITION BASED PRICING

Homogenous services that are standardized without special
service attributes are the best examples of competition based
pricing. In this method of pricing the price is determined on the
basis of competitor’s price. Price under such situations may be
used to gain short-term competitive advantage over rivals.
PRICING OBJECTIVES:
Common objectives include the following:
Current profit maximization - Seeks to maximize current profit,
taking into account revenue and costs. Current profit
maximization may not be the best objective if it results in lower
long-term profits. Current revenue maximization - Seeks to
maximize current revenue with no regard to profit margins. The
underlying objective often is to maximize long-term profits by
increasing market share and lowering costs. Maximize quantity -
Seeks to maximize the number of units sold or the number of
customers served in order to decrease long-term costs as
predicted by the experience curve.
• PLACE
29
The third ‘P’ in marketing mix is place or physical

distribution. It refers to the establishment and operation of
outlets for physical distribution of the products. In order to
deliver the value satisfaction to target customers it is not only
sufficient to properly price the product, but it is also necessary to
physically move it to the place of consumption. The very
objective of distribution is to get the right product, at the right
places and at the right time at the least cost. Hence, distribution
involves establishment of a strategy covering channels of
distribution and physical distribution of the product from the
points of origin to the points of consumption at a profit.
In case of goods the distribution may be direct, or indirect

through agents, middlemen and/or mercantile middlemen. But in
the service sector, the distribution is ought to be direct because
of the character ‘inseparability’. Both production and
consumption of services take place at the same time.
In the banking context distribution refers to the establishment

and functioning of a network of branches and other offices
through which banking services are delivered. Extensive branch
network helps a bank to have access to a larger section of the
people. From the customer's angle it is the proximity and
convenience of operation which plays a vital role in the selection
of a bank, as their need for banking service is repetitive in
nature.
Suitable location of the bank, proper layout and provision of
facilities for the customer are the key factors to get majority of
customers. Selection of suitable location is not entirely under
control of a banker. It has to get the sanction of RBI, though
control measures have been deregulated to a large extent. It has
been the practice of banks, with an intention to become nearer
to the customers, to locate their branches in the congested areas
of marketplaces. While doing so one should not overlook the
factors such as availability of parking space and traffic.
Though location of banks is guided by many extraneous
factors, banks have discretion in designing the structure of the
building, planning the internal layout, maintenance and upkeep
of their premises. In the olden days, banks were imposing
structures, designed to impress the elite section of the society.
In terms of their physical appearance they were more awe-
30
inspiring than inviting. But shift to mass banking and the

resultant emphasis on social approach have dictated the
appearance of branch offices to be more customer-friendly.
Besides the structure of the building, the neat, clean, tidy
premises, proper branch layout, i.e., position of the counters,
space for movement, queuing in front of the counters, waiting
lobbies, etc, attract people to walk in. Upkeep and maintenance
of the branch is a regular process and not one time measure.
“Fight dirt and remain clean” should be cultivated as part of
organizational culture.
The banks in India, besides having full-fledged branches, also

operate various other types of outlets like extension counters,
mobile branches and specialized branches for delivery of banking
services. The need for enlarging their activities and upgrading
them for marketing of services should be explored.
It is true that the scope for opening new branches in the urban
and metropolitan areas of the country is extremely limited but
by splitting up bigger branches, up gradation and more effective
use of non-branch outlets, acquiring branches through
amalgamation of smaller banks, etc., banks can overcome this
limitation.
The place is more than physical place. It is where actual
transaction takes place. It can be beyond the bank premises.
And this has been made more significant by technological
advancements which have extended it to the doorsteps of the
customer even into the cozy atmosphere of his living room.
• PROMOTION
31
Promotion is a process of persuasive communication and

constitutes one of the 4 Ps of marketing mix. It relates to the
task of informing the target market about the nature and type of
firms product and services, their unique benefits, uses and
features as well as price and place at which those would be
available. It is imperative on the part of a marketer to begin by
attention then creating interest, inspiring desire and precipitating
the action for purchase of itsproduct or and above all it should
result in a mutually satisfying exchange. Thus the essence of
promotion is the supply of required information which in turn will
stimulate the target customer and create a product preference
among them. To put it in other words, the term promotion
embraces influence processes exerted by the sellers of product
on those who seek to be buyers.
In banking context promotion is a challenging job. Banks sell

benefits. The services rendered by the banks can-not be pre-
tested or seen by the customers. For this bankers have to
organize effective promotional measures which seek to inform,
educate and actualize the markets. As, we have observed,
communication provides the base for promotion. It is a process
of transmitting meaning through written, oral and non-verbal
message. It implies that receiver understands the message in
the same sense what the sender wishes to communicate.
THE PROMOTION MIX

Promotion comprises of four major elements viz., Advertising,
Publicity, Sales promotion, Personal selling. To achieve the
objectives of promotion i.e., to inform, to persuade, to remind
and to reinforce, all the four methods are used to some degree.
Selection of the mix is based on their relative strength. Thus
promotional mix would vary from time to time, bank to bank,
and place to place depending upon the major customer
segments and the type of service offered.
1. Advertising
It is any paid form of non-personal presentation of ideas, goods
and services by an identified sponsor. Advertising is used for
32
mass communication and includes the use of newspaper,

magazines, radio, television, hoarding, posters, banners,
leaflets/brochures, direct mail etc.
2. Publicity
Publicity refers to the communication of any non-sponsored
commercially significant information about a company or its
products to the public through non-personal media without any
financial charge to the company. It may be in the form of a news
item or editorial comment. Normally, a customer is faced with a
bewildering array of advertisements and does not either pay
attention to or believe much of what he is told. But publicity, as
it is a third party, which says about the product or organization,
is likely to have greater impact on the target audience.
3. Sales Promotion
Sales promotion has been defined by American Marketing
Association as “those activities, other than personal selling,
advertising and publicity that stimulates consumer purchasing
and dealer effectiveness such as displays, shows, exhibitions,
demonstrations and various non-recurrent selling efforts, not in
the ordinary routine”. This is a type of activity where short-term
incentives are extended to encourage purchases. This may break
through buyer's inertia towards a particular product or service,
but frequent use of this tool may lose its effectiveness.
4. Personal Selling
Personal selling is the most vital tool in the promotional mix. It is
an oral presentation while in conversation with prospective
customers. It is of particular relevance to a service industry like
banking. As it involves two way communications in social
behavior, both of buyer and seller, influence the process to a
great extent. For the same reason it is also necessary that bank
staff should adopt the characteristic retailers approach and
should have the following knowledge and ability:
33
Knowledge of all existing services or at least the knowledge of

the person to whom the customer should be referred for further
information Understanding of customer’s problems;
Ability to solve the customer’s problems and persuade the
customer to accept the solution.
Push & Pull Strategies
Communication by the manufacturer is not only

directed towards consumers to create demand. A push strategy
is where the manufacturer concentrates some of their marketing
effort on promoting their product to retailers to convince them to
stock the product. A combination of promotional mix strategies
are used at this stage aimed at the retailer including personal
selling, and direct mail. The product is pushed onto the retailer,
hence the name. A pull strategy is based around the
manufacturer promoting their product amongst the target
market to create demand. Consumers pull the product through
the distribution channel forcing the wholesaler and retailer to
stock it, hence the name pull strategy. Organizations tend to use
both push and pull strategies to create demand from retailers
and consumers.
PROMOTIONAL MEASURES BY INDIAN BANKS:
The Indian banking sector seems to have displayed a

half-hearted approach towards promotion strategies. There
seems a lack of commitment to advertising, communication and
personal selling. As banks grew in their size and reach and faced
competition from within and outside, the importance and
imperative of business promotion was felt.
Till the late sixties only a few banks were taking
initiative to insert short, perfunctory advertisements in
magazines and newspapers. A change in the advertising was
marked after the nationalization in 1969. But they were to
operate within a controlled framework in pursuing promotional
measures. A joint publicity committee of public sector banks was
constituted towards the end of 1971. Though originally
constituted for mobilizations of savings, subsequently it was
34
reconstituted and broad based. It brought out advertisements on

matters of common interest covering the areas like deposit
mobilization, customer education, advances to priority sectors
and performance of public sector banks etc.
In July 1982 promotional expenditure of each public sector bank

was Restricted to 0.01 per cent of its gross earnings and items
that would be included under the head “Publicity and
Advertisement Expenses” were also listed out. But on March-
April 1984 a ban was imposed on the incurring of publicity
expenses. In Oct.1985, subject to certain conditions, there was
relaxation in such expenses. In 1987 the banks were allowed to
spend a maximum of 0.05 percent of their domestic gross
earnings; and 0.01 percent of overseas gross earnings and
contribute 20 percent of their publicity budget to JPC. In 1989-
90 the contribution made by the banks was increased to 30
percent of their publicity budget. The permitted cases in which
public sector banks can advertise in the press are:
(1) Obligatory advertisements: branch opening and shifting,

customers meet;
(2) Statutory advertisements: Balance sheet, P&L A/c;
(3) Unique schemes
It appears that public sector banks are in a
regulated environment whereas private and foreign banks in
India enjoy relatively more freedom in spending on advertising
and publicity.
• TYPES OF MARKETING
• INTERNAL MARKETING
35
The concept of internal marketing as propounded by Prof.

‘Leonard L. Berry’ of “Texas A&M University” of U.S.A. presumes
the bank employees as its ‘internal customers’ and jobs offered
to them as products. So effort should be made to offer a product
mix that satisfies the needs and wants of these internal
customers. The same marketing tools which are used to attract
and retain customers (external) can gainfully be used to attract,
retain and inspire the employees (internal customers.),
particularly the best among them.
The logic behind such type of thinking can be attributed to

following facts. Customers buy products and services of the bank
exchanging their financial resources. Similarly employees also
buy jobs of the bank exchanging the human resource. As both
are drawn from the same society the exchange process is found
to be similar in many respects. It may be argued that in Indian
context, a customer may have a better and wider option to
change banks but employees do not have such opportunity. In
future, it is expected that the liberalized scenario may provide,
the best of the employees, with such opportunity. But one thing
for sure is that it remains the discretion of the employee to give
his best or not. In a financial industry like banks the product
differential and price competition is almost nil or the
distinctiveness is difficult to maintain. The only area where a
distinctiveness can be maintained is the quality of human
resource. Further, banks provide services and services by their
nature are inseparable from the provider. In this context the
bank employees who provide these services assume paramount
importance. How far and to what extent the quality level of their
performance would reach is solely the discretion of the
employee. As a satisfied employee can deliver total satisfaction
to a customer, it becomes important for banks to satisfy the
needs and wants of its employees on priority basis.
These activities can be further
reinforced by certain promotional activities directed at them. A
highly motivated workforce is a common trait of all successful
organizations. Though it is difficult to ascertain what precisely
motivates employees, a clue can be taken from Abraham
Mallow’s hierarchy of needs. Presuming that the physiological
needs of the bank employees have by and large, been taken
36
care of, greater emphasis should be laid on psychological and

self-actualizations needs such as: security, contribution to
society, esteem and the need to reach one's full potential, etc. It
is necessary to create an organizational climate where superior
and extra-ordinary contributions made by employees at various
levels are noticed and acknowledged.
Advertising is a potent tool in making an employee aware,
motivated, educated, and inspired. Though a poster at the
branch with the headline such as “you never hear our people say
'that's not my job” or “if you are not satisfied tell us, if satisfied
tell others” are directed towards external customer. Yet, it is
clearly meant for the internal customers too and will have
tremendous impact on them. Of course, before putting up a
poster like that would need taking staff into confidence. It is
needless to say that any advertising campaign which can
originate from the staff themselves would have more credibility
and acceptability. Or else it may be treated derisively and be
counter-productive. Senior executives, in this regard, have a
definite role to play.
• INTERACTIVE MARKETING (MOMENT OFTRUTH)

Moment of truth means that this is the time
and place the service provider has the opportunity to
demonstrate to the customer the quality of its services.
Quality of service is dependent on the
quality of buyer/ seller interaction. This is the point, which may
lead to creation of a customer or not. Though, we may Win him
at that point of time, because of some other reasons, we may
not retain Him or he may not come to us again if that interaction
is not satisfying for him to leave a lasting impact on him. We
may have a beautiful marketing mix of product, price, place and
promotion, which bring the customer to us. We may still have a
good internal marketing, which prepares a band of
knowledgeable employees ready. But if we fail at this point all
our effort so far will be futile. This is the reason, which makes
interactive marketing so important.
Thus interactive marketing describes employee’s skill in handling
customer Contact and involves the following:
1. Employee
2. Process
3. Customer
37
• INTERACTIVE MARKETING
Interactive Marketing As indicated in above it is the group of
able and Willing employees, which make the starting point of
interactive marketing. They are to be aided by proper processes
(systems and procedures) as suitable vehicles to render best
customer service, which in turn will result in satisfied and loyal
customers. Internal marketing provides the required employees
orienting them for the job.
• External marketing
The external marketing efforts are the traditional
functions of marketing of the customers and make promises to
the customer as to what 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.
According to Zeithaml and Bitner, the customer’s
expectation of the service can be derived from the following
sources:
1. Past experience.
2. Corporate image.
3. Word of mouth communication.
Care should be taken to maintain credibility while
setting the promise because a very high expectation may lead to
a highly dissatisfied customer.
Process: (System and Procedures)

In service marketing, process, which covers systems and
procedures are the vehicles for delivery of customer satisfying
needs. Systems and procedures, in vogue in Indian banks, were
not seen as aids to promotion of client satisfaction. They have
not kept pace with the changing environment and changing
demands. They were contending with maintenance of books of
38
accounts and serving to traditional customers and that too, with

strict observance of the rules. Multiplicity of returns and duplicity
of efforts have added to the workload of the staff leaving them
insufficient time for paying attention to customer needs.
It is expected that the objectives of systems and
procedures, instead of being satisfactory maintenance of books
of accounts and safe documentation, should be geared up to
ensuring prompt and speeding delivery of services to the
customer. Therefore, it needs to be simplified and should be
backed by proper office layout and smooth flow of work so - that
use of intermediary people to move papers is minimized. The
inter-relationship between people and procedure need not be
overlooked. It is they who carry out the procedure.
Any innovation must not be imposed on them;
rather a conscious effort should be made to involve them in the
process of change. Their views and suggestion should be given
due importance. For which, formal suggestion schemes,
interaction forums like staff meetings, customer service
committees and quality circles may be given due importance.
Management audit can be undertaken as a tool for ensuring
ongoing improvements relating to systems, procedures and
management policies.
The benchmarking in process shown below:
39
40
• BANKS IN URBAN AREAS (ICICI BANK)
10 Ps OF BANKING
1. Product:
The business has to produce a product that people want to buy.
They have to decide which ‘market segment’ they are aiming at
– age, income, geographical location etc. They then have to
differentiate their product so that it is slightly different from
what is on offer at present so that people can be persuaded to
‘give them a try’
2. Promotion:
Customers have to be made aware of the product. The two main
considerations are target market and cost. A new business will
not be able to afford to advertise on national television, for
instance and would not wish to because its market will be local
to start with. Leaflets, billboards, advertisements in local
newspapers, Yellow Pages and ‘word of mouth’ would be more
appropriate.
3. Price:
The price must be high enough to cover costs and make a profit
but low enough to attract customers. There are a number of
possible pricing strategies. The most commonly used are:
41
PENETRATION PRICING – charging a low price, possibly not

quite covering costs, to gain a position in the market. This is
quite popular with new businesses trying to get a ‘toehold’.
CREAMING – the opposite to penetration pricing, this involves

charging a deliberately high price to persuade people that the
product is of high quality.Luxury car makers often use this
strategy.
COST PLUS PRICING – this is the most common form of
pricing. Costs are totaled and a margin is added on for profit to
make the total price.
4. Place:
"Place" deals with the distribution channels by which your
prospects will be able to buy and receive your products and
services. Clearly without defining the niche prospects, it is
impossible to set up the best distribution channels.
5. People:
An essential ingredient to any service provision is the use of
appropriate staff and people. Recruiting the right staff and
training them appropriately in the delivery of their service is
essential if the organization wants to obtain a form of
competitive advantage. Consumers make judgements and
deliver perceptions of the service based on the employees they
interact with. Staff should have the appropriate interpersonal
skills, aptititude, and service knowledge to provide the service
that consumers are paying for. Many British organizations aim to
apply for the Investors in People accreditation, which tells
consumers that staff are taken care off by the company and they
are trained to certain standards.
6. Process
Refers to the systems used to assist the organization in
delivering the service. Imagine you walk into Burger King and
you order a Whopper Meal and you get it delivered within 2
minutes. What was the process that allowed you to obtain an
42
efficient service delivery? Banks that send out Credit Cards

automatically when their customer’s old one has expired again
require an efficient process to identify expiry dates and renewal.
An efficient service that replaces old credit cards will foster
consumer loyalty and confidence in the company.
7. Physical Evidence:
Where is the service being delivered? Physical Evidence is the
element of the service mix which allows the consumer again to
make judgements on the organization. If you walk into a
restaurant your expectations are of a clean, friendly
environment. On an aircraft if you travel first class you expect
enough room to be able to lay down! Physical evidence is an
essential ingredient of the service mix; consumers will make
perceptions based on their sight of the service provision which
will have an impact on the organizations perceptual plan of the
service.
8. Positioning:
POSITION (STP) process is 'positioning.' Positioning is
undoubtedly one of the simplest and most useful tools to
marketers. After segmenting a market and then targeting a
consumer, you would proceed to position a product within that
market.
9. Planning:
Marketing plans are vital to marketing success. They help to
focus the mind of companies and marketing teams on the
process of marketing i.e. what is going to be achieved and how
we intend to do it. There are many approaches to marketing
plans.
10. Perception:
As perception differs from person to person, so do the results of
the positioning map e.g. what you perceive as quality, value for
money, etc, and is different to my perception.
43
PRODU
CT
PROMOTI
ON
PRICE
PLACE
PEOPL
PROCE
E
SS
POSITIONI
PLANNI
NG
PHYSIC
PERCEPT
NG
ION
AL
evidence
• CUSTOMER SERVICE
Customer service has been defined in many ways, but it
will be better Understood if we define it from the customer’s
angle. Thus, customer service is the perception of a customer
regarding the services he gets from his bank. As the human
44
perception change from individual to individual and -within an

individual from time to time, what is effective customer service
today may be indifferent tomorrow and even a bad service the
day after. This makes customer service a dynamic concept and a
challenging job for the bankers.
IMPORTANCE OF CUSTOMER SERVICE IN BANKS

Bank is a commercial outfit marketing financial
products. Its products are services offered by them. Services are
performances. Production and consumption of services occur
simultaneously. Therefore, the frontline people and their
interaction with customers, thus everyday postures, gestures,
actions, reactions, emotions, activities and impressions
contribute significantly in projecting a particular image of the
bank distinguishing it from the rest of the field.
Further customer service has a tremendous retention-
value. If we can-not retain a customer, all our efforts in terms of
time and money in creating and winning a customer would be a
sheer waste. Besides, it is found that retaining customer is often
cheaper than finding a new customer. In addition to that
satisfied customers recommend the business to others.
Thus a customer is viewed as a long-term relationship

rather than a party to a stray single transaction. The initial
transaction is taken as the starting point and opportunity to
establish a relationship through providing total customer
satisfaction, which in turn will ensure further business, from him.
This is what we term as relationship banking. Qualitative
customer service and total satisfaction forms the edifice of
“Relationship Banking”.
CONCEPT OF CUSTOMER SATISFACTION.

Satisfaction is a function of expectations about a
product and its perceived performance. When perceived
performance of a product/service matches or exceeds one’s
expectations of service quality satisfaction occurs and vice-versa.
45
The service quality attributes in a banking contest are of two

types.
First the product per se attributes like interest charges, accuracy

of entries and reliability etc.
Second, psychological attributes like recognition as important

customer, personal favor by the staff etc. As per product per se
attributes, if a bank fails to meet them, it causes dissatisfaction.
But, if bank meets them, they are treated as routine jobs that
any bank, would have performed. Thus absence of such factors
causes dissatisfaction while their presence would only avoid
dissatisfaction. They, by themselves, would not motivate a
customer any further than the present level. Therefore, these
attributes are treated as ‘maintainers’. On the other hand, if a
bank fails to meet expectations in the area of personnel related
psychological factors, it may not result in dissatisfaction but their
satisfaction will result in high motivation and elation on the part
of the customer. Therefore, these attributes are treated as
‘motivators’. Thus for a customer to be totally satisfied, first
there should be satisfaction with respect to product per se
attributes then, in addition, he should get favorable treatment by
the staff and the service should be delivered with a human
touch.
CUSTOMER SERVICE IN INDIAN BANKS
46
Customer service in Indian banks does not

have a good track record. The reasons are many. Before
nationalization banks were serving to the upper and middle
strata of the society and Banker. Customer relationship was
based on the principle of uberrim fidae. After nationalization they
were directed to expand and enlarge their field of activities at an
unprecedented pace which, in the absence of or meager direct
recruitment resulted in vertical movement of staff who were
inexperienced and deficient in knowledge to handle diverse
activities. In the wake of emerging interbank competition and
shift in focus to business growth the accounting accuracy and
the standard of customer service was diluted. The worst damage
was done to customer service by the creation of employees
unions. Bank management had to compromise; at times, even
on principle, in the hope of maintaining industrial peace. Labour
laws governing the industry provided rather unqualified
protection to employees and it became Virtually difficult for
management to take action even in cases of extreme indiscipline
and dereliction of duty. Poor customer service was a natural
corollary to this atmosphere of permissiveness prevailing in the
banking industry.
Which became a matter of great concern for the Government,
RBI and the Banks alike?
As early as in 1972, the Banking commission, appointed by the

Government of India under the chairmanship of Sri R.G. Saraiya,
had made several recommendations on customer service. In the
year 1975, the Government appointed a working group on
customer service in banks under the chairmanship of Sri R.K.
Talwar. This working group made 176 recommendations
covering all the important areas relating to
Customer service besides some general, recommendations.
Some important recommendations of the Talwar Committee that
have been implemented are:
1. Establishment of customer service committee/staff committee
in the every ranch.
2. Customer meets to be held at the branches at least once in a
half year.
3.15th of every month (next day if 15th is a holiday) to be
observed as customer’s day at branches and administrative
offices.
47
4. Provision of complaint-cum-suggestion box in every branch.

5. Provision of ‘May I help you’ counter in branches.
6. Immediate credit of cheques up to Rs.2,500 which has since
been increased to Rs.15,000.
7. Payment of penal interest in case of delay of collection of
cheques.
During the eighties, greater importance was given to
the redressal of grievances of customers. The government and
the RBI, to redress the grievances took several steps such as
setting up of Customer Service Committees, Customer Service
Centers in various cities, Directorate of Public Grievances under
the Cabinet Secretariat, etc., as also in the observance of
Customers Day. The year 1986 was celebrated by the public
sector banks as “customer service year”. The
Year 1988 witnessed further improvement in customer service
with the Implementation of recommendation of the Estimates
Committee. In the year 1991 Goiporia Committee was appointed
to look in to the customer service.
In the year 1995 as a landmark event in the Indian banking

history ‘Banking Ombudsman’ was established by RBI with
objective of resolving customer grievances relating to provision
of banking services in a quick and inexpensive manner. Another
important development was in the area of mechanization and
Computerization.
Despite all these measures devised and adopted by
banks, either expectations of a customer from his bank have
gone up or banks have failed to deliver the services in a
customer satisfying manner, the criticism for poor customer
service still remains. Hence, there is an urgent need for the
banks to re-look at all the attempts made so far by them in
improving customer service.
ICICI BANK
48
Overview
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.
ICICI Bank's equity shares are listed in India on Bombay Stock

Exchange and the National Stock Exchange of India Limited and
its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).
• INTRODUCTION
49
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 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.
About ICICI Bank
ICICI was established by the Government of India in the 1960s
as a Financial Institution (FI, other such institutions were IDBI
50
and SIDBI with the objective to finance large industrial projects.

ICICI was not a bank - it could not take retail deposits; and nor
was it required to comply with Indian banking requirements for
liquid reserves. All this changed in 1990s. ICICI founded a
separate legal entity
- ICICI
Bank which undertook normal banking operations -
taking deposits, credit cards, car loans etc. The experiment was
so successful that ICICI merged into ICICI Bank ("reverse
merger") in 2002. At the time of the reverse merger, there were
rumours that ICICI had large proportions of Non Performing
Loans ("NPA", as they are known in India) on its books - in
particular to the steel industry. Since 2002, there has been a
general revival in Indian industry (and metal based industry in
particular). It is widely believed that the proportion of NPAs has
come down to prudent levels (even if it were high earlier). ICICI
Bank now has the largest market share among all banks in retail
or consumer financing. ICICI Bank is the largest issuer of credit
cards in India.
It was the first bank to offer a wide network of ATM's and has a
large network of ATM's. ICICI Bank now has the largest market
value of all banks in India, and is widely seen as a sophisticated
bank able to take on many global banks in the Indian market.
The Bank is expanding in overseas markets and has the largest
international balance sheet among Indian banks. The
international banking business was set up in 2002 to implement
a focused strategy for the overseas market. The Bank now has
wholly-owned subsidiaries, branches and representatives offices
in 18 countries, including an offshore unit in Mumbai. This
includes wholly owned subsidiaries in UK, Canada and Russia,
offshore banking units in Singapore and Bahrain; advisory
branch in Dubai, branches in Sri Lanka, Hong Kong and Belgium;
and rep offices in the US, China, United Arab Emirates,
Bangladesh, South Africa, Indonesia, Thailand and Malaysia. The
bank is targeting the NRI (Non Resident Indian) population for
expanding its business.
SOCIAL AND DEVELOPMENTAL INITIATIVES

Rural Thrust: ICICI Bank has
identified rural as one of the major areas of growth. It is creating
51
holistic propositions to address this opportunity. ICICI Bank has

formulated a comprehensive strategy for rural, micro-banking
and agro business encompassing a range of products and
multiple delivery channels. The objective is to meet the needs of
the rural economy while building a sustainable business model.
The range of products comprises six primary credit products –
micro finance loans, farmer financing, working capital financing
for agro-enterprises, farm equipment financing, commodity
based financing and jewel loans as well as savings investments
and insurance products.
1. SUSTAINABLE DEVELOPMENT:
The bank operates and supports a diverse
range of social projects in the areas of primary education,
healthcare, micro-finance, environment, research & bio
technology, finance & development. ICICI Bank’s work in the
area of development aims at facilitating wider participation by
India’s poorer communities in social and economic process. Its
efforts are broadly divided into two spheres – partnership based
development initiatives and market-based direct initiatives. For
those initiatives that seek to make a broader impact on society,
ICICI Bank’s strategy has been to identify partners and work
with them to build competencies and effectiveness on the field.
The Bank has taken a more market-based direct approach for
those initiatives that directly impact the economic well-being of
individuals.
2. FINANCIAL COUNSELING:
ICICI Bank setup the DISHA Trust in April
2007 as part of ICICI Bank’s Corporate Social Responsibility
activity. Its main objectives are to provide free credit counseling,
financial education and debt management services to consumers
and to increase awareness about financial products and services,
thus promoting better understanding and decision making.With
centers around the country, DISHA Financial Counseling provides
its services FREE of cost to all customers, even to those of other
banks.
IMPORTANCE of CUSTOMER SERVICE IN
ICICI BANK
Bank is a commercial institution of outfit marketing
financial products. Service performances, production and
52
consumption of services occurs simultaneously. Therefore, the

frontline people and their interaction with customers, thus
everyday postures, gestures, actions, reactions, emotions,
activities and impressions contribute significantly in projecting a
particular image of the bank distinguishing it from the rest of the
field.
Further customer service has a tremendous
retention-value. If we cannot retain a customer, all our efforts in
terms of time and money in creating and winning a customer
would be a sheer waste. Besides, it is found that retaining
customer is often cheaper than finding a new customer. In
addition to that satisfied customers recommended the business
to others. Thus a customer is viewed as a long-term relationship
rather than a party to a stray single transaction. The initial
transaction is taken as the starting point and opportunity to
establish a relationship through providing total customer
satisfaction, which in turn will ensure further business, from him.
This is what we term as relationship banking. Qualitative
customer service and total satisfaction forms the edifice of
“Relationship Banking”.
CONCEPT OF CUSTOMER SATISFACTION

Satisfaction is a function of expectations about a
product and its perceived performance. When perceived
performance of a product/service matches or exceeds one’s
expectations of service quality satisfaction occurs satisfaction
occurs and vice versa. The service quality attributes in a banking
context are of two types.
First the product per se attributes like interest charges, accuracy
of entries and reliability etc. Second, psychological attributes like
recognition as important customer, personal favors by the staff
etc. As per product per se attributes, if a bank fails to meet
them, it causes dissatisfaction. But, if bank meets them, they
are treated as routine jobs that any bank would have performed.
Thus absence of such factors causes dissatisfaction while their
presence would only avoid dissatisfaction. They, by themselves,
would not motivate a customer any further than the present
level. Therefore, these attributes are treated as ‘maintainers’. On
the other hand, if a bank fails t meet expectations in the area of
53
personnel related psychological factors, it may not result in

dissatisfaction but their satisfaction will result in high motivation
and election on the part of the customer. Therefore these
attributes are treated as ‘motivators’.
Thus for a customer to be totally satisfied, first there should be
satisfaction with respect to product per se attributes then , in
addition, he should get favorable treatment by the staff and the
service should be delivered with a human touch
PRODUCTS AND SERVICES OF ICICI BANK
1. PERSONAL BANKING:
 DEPOSITS.
54
ICICI Bank offers wide variety

of Deposit Products to suit your
requirements. Coupled with convenience of
networked branches/ ATMs and facility of
E-channels like Internet and Mobile
Banking, ICICI Bank brings banking at your
doorstep.
• SAVING ACCOUNTS
ICICI Bank offers you a power packed Savings
Account with a host of convenient features and banking channels
to transact through. So now you can bank at your convenience,
without the stress of waiting in queues.
• LIFE PLUS SENIOR CITIZEN SERVICE

We understand that as you reach the age to
retire, you do have certain concerns. Whether your hard earned
money is safe and secure … whether your investments give you
the kind of returns that you need. That's why we have an ideal
Banking Service for those who are 60 years and above. 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.
 LOAN AND ADVANCES
55
ICICI Bank offers wide variety of Loans Products to suit your

requirements.Coupled with convenience of networked
branches/ ATMs and facility of E-channels like Internet and
Mobile Banking, ICICI Bank brings banking at your doorstep.
Select any of our loan product and provide your details online
and our representative will contact u.
• Home loans
The No. 1 Home Loans Provider in the country, ICICI Bank Home
Loans offers some unbeatable benefits to its customers -
Doorstep Service, Simplified Documentation and Guidance
throughout the Process. It's really easy!
• PERSONAL LOAN
If you're looking for a personal loan that's easy to get, your
search ends here. ICICI Bank Personal Loans are easy to get and
absolutely hassle free. With minimum documentation you can
now secure a loan for an amount up to Rs. 15 lakhs
• CAR LOAN
The No. 1 financier for car loans in the country. Network of more
than 2500 channel partners in over 1000 locations. Tie-ups with
all leading automobile manufacturers to ensure the best deals.
Flexible schemes & quick processing. Hassle-free application
process on the click of a mouse.
2.
SERVICES
56
ICICI Bank Demat Services boasts of an ever-growing customer

base of over 11.5 lacs account holders. In our continuous
endeavor to offer best of the class services to our customers we
offer the following features:
SERVICES FOR DEMAT

1. e-Instructions: You can transfer securities 24 hours a day, 7
days a week through Internet & Interactive Voice Response
(IVR) at a lower cost. Now with "Speak to transfer", you can also
transfer or pledge instructions through our customer care officer.
2. Consolidation Demat Account: Dematerialize your physical

shares in various holding patterns and consolidate all such
scattered holdings into your primary Demat account at reduced
cost.
3. Digitally Signed Statement: Receive your account statement

and bill by email.
4. Corporate Benefit Tracking: Track your dividend, interest,

bonus through your account statement.
5. Mobile Request: Access your demat account by sending SMS

to enquire about Holdings, Transactions, Bill & ISIN details.
6. Mobile Alerts: Receive SMS alerts for all debits/credits as

well as for any request which cannot be processed. Dedicated
customer care executives specially trained at our call centre, to
handle all your queries. Countrywide network of over 235
branches, you are never far from an ICICI Bank Demat Services
outlet. You will find service charges very competitive - offering
the best value for your money.
3.ATM SERVICES
ICICI Bank's 24 Hour ATM network is one of the largest
and most widespread ATM Network in India. Our ATMs are
57
located in commercial areas, residential localities, major petrol

pumps, airports, near railway stations and other places which
are conveniently accessible to our customers. ICICI Bank ATMs
features user-friendly
Graphic screens with easy to follow instructions. We have
introduced ATMs which interact with customers in their local
language for increased convenience. Following are the features
available on our ATMs, which can be accessed from anywhere at
any time.
SERVICE FOR ATMs:
1. Cash Withdrawal: Withdraw up to Rs. 25,000/- per day from

your account (50,000 for HNI's). Fast Cash option provides the
facility of withdrawing prefixed amounts. Ultra Fast Cash option
allows you to withdraw Rs.3000/- in one shot.
2. Balance Enquiry: Know your ledger balance and available

balance
3. Mini Statement: Get a printout of your last 8 transactions and

your current balance.
4. Deposit Cash / Cheques: Available at all full function ATMs,

Customers can deposit both cash and cheques. Cash deposited
in ATMs will be credited to the account on the same day
(provided cash is deposited before the clearing) and cheques are
sent for clearing on the next working day.
5. Funds Transfer: Transfer funds from one account to another

linked account in the same branch.
6. PIN Change: Change the Personal Identification Number (PIN)

of ATM or Debit card.
7. Payments: The latest feature of our ATMs, this functionality
can be used for payment of bills, making donations to temples /
trusts, buying internet packs, airtime recharges for prepaid
mobile phones and much more...
58
8. Others: Request for a checkbook from our ATMs and our

concerned branch will dispatch it such that it reaches you within
10 working days.
9. Charges: There is no charge levied on ICICI Bank customers

for transacting on ICICI Bank's ATMs. However for customers not
maintaining the minimum quarterly average balance in their
savings account, first 6 transactions in the quarter will be free
and Rs. 25 per transaction will be charged thereafter.
4. CARDS
ICICI Bank offers a variety of cards to suit your different
transactional needs. Our range includes Credit Cards, Debit
Cards and Prepaid cards. These cards offer you convenience for
your financial transactions like cash withdrawal,
shopping and travel. These cards are widely
accepted both in India and abroad. ICICI Bank
Credit Cards give you the facility of cash,
convenience and a range of benefits, anywhere in
the world. These benefits range from life time free
cards,Insurance benefits, global emergency assistance service,
discounts, utility payments, travel discounts and much more.
5. Mutual Funds
A Mutual fund is an organization that invests in a diversified
portfolio of financial securities on behalf of a pool of subscribers
to its schemes. These securities can be in the form of equity,
debt instruments, money market instruments etc., or a mix of
these securities, depending on the scheme objectives.
• Savings on
transaction
costs
59
As purchases and sales are done in bigger quantities, the funds

also get the advantages of lesser brokerage and other reduced
transaction costs.
• Tax Advantages
In India these funds become even more attractive because of
the tax
advantages, like indexation benefits, long term capital gains tax,
tax free dividends and much more.
• The banks meet customer’s needs
ICICI BANK believe that everyone has specific needs are
priorities. Your needs could vary from buying a house, getting
your daughter married to providing for your child’s education.
You might even want to travel the world. All your needs are very
important for us. We can help to fulfill your needs to reality by
helping you select schemes, which would be consonance with
your needs.
• Building an ‘Investment Culture
It would be our constant endeavor to inculcate saving and
organized
investing habits in you. We will help you plan your investments
and build a healthy mutual fund portfolio, which would be an
optimal solution for your needs. Cultivating an investment
culture will not only help you but also your family.
• The bank will keep customers updated
A newsletter, which will keep you, informed of the latest
happenings in the stock markets, economy and important
events, apart from giving you the NAV and other relevant
information about your schemes will be sent you every month.
Latest NAV of the schemes can also be found out from our
various branches.
• The bank can be customers ‘One Stop Financial
Solution’
Apart from subscribing to Mutual fund schemes through us, you
can also take advantage of our banking services and a whole
range of financial products. Like - ATM card, credit card,
personal loan products, depository services, loan against
units/shares etc. and see your financial needs satisfied under
one roof.
6. Online Services
60
 BILL PAYMENT
No more hassles of personally visiting the Biller to pay the
bills. Pay your bills for Utility Companies (Electricity and
Telephone), ICICI Bank Credit Card, Mobile bills, Insurance
Premiums and lot more. Avail our free bill payment services
through your Internet Banking Account. Why be in line, when
you can be ONLINE?
 SHOPPING
Shopping at your fingertips. ICICI Bank facilitates you to buy
variety of products online from more than 75 shopping websites.
Payment can be made conveniently using your ICICI Bank
Account. Visit our partner websites, choose your product and pay
using Internet Banking Facility.
 TICKET BOOKING
With ICICI Bank you need not visit Train/ Air ticket booking
reservation centers any more. You can now buy your tickets
online and pay using our Internet Banking Facility. You can book
your Railway Tickets on IRCTC and air tickets on Air Deccan.
 MOBILE TOP-UP
Recharge your Prepaid Mobile anytime, anywhere in just a few
minutes by logging into Internet Banking on ICICIBank.com or
by sending a simple SMS. The fastest & easiest way to recharge
your prepaid mobile is now at your fingertips!
 SHARE TRADING
Trade in Securities Market Online through the unique 3-in-1
account that integrates your banking, broking and demat
accounts. You can also invest online in Mutual Funds, Initial
Public Offers of the Companies and Postal Savings Schemes
through www.icicidirect.com.
• IMPACT OF SERVICES
61
ICICI Bank Services leaves positive impact on customers

ICICI Bank Services leaves positive impact on customers.
Recently announced that ICICI Bank’s online services continue to
receive positive feedback from customers during the holiday
season by helping them to conduct transactions at their own
convenience even when they are on holiday abroad. ICICI bank
services allow customers to automatically pay their bills when it
is due; renew their ‘savings as well as current’ balance
automatically or manually through their mobile, along with
access to many other services that are available on-line i.e.
www.icicibank.com or 24*7 help lines or off-line i.e. bank
branches.
Customers can easily manage their account through the

online services; check the value and details of their bills make
payments online, recharge their bank account and carry out
many transactions quickly and safely at any time with one single
click or can simply by visiting any nearest ICICI Bank Branch’s
Offices.
Commenting on this, the manager, said: “Since ICICI
Bank launched Online Services, ICICI Bank have developed them
to become one of the most state-of-the art and convenient
services for their customers. Today, more than 350.000
customers use these services and carry out 1.5 million
transactions every year.”
• SERVICES IMPLEMENTED:
It currently provides a number of services. These include bill
payment, renewing and recharging mobile by using the credit
card or from bank accounts, shopping online, purchasing gold,
investing in mutual fund or in share market etc.
• SERVICES IMPLEMENTED AUTOMATICALLY:

Some services are implemented automatically without customer
involvement such as paying bills when it is due through two
payment alternatives – either total payments to previously
specified accounts, or monthly fixed payment from registered
date chosen by the customer’s credit card. These transactions
can be carried out very accurately online with the additional
advantage of 10% extra credit. Customers can apply for these
services on www.icicibank.com.
62
Customers will receive an SMS to confirm all transactions to

maintain maximum convenience and ensure the highest
standards of services. To avoid interruption of services,
customers will receive an SMS to inform them that they do not
have enough balance to cover required transactions so that they
can use another credit card or use other means of payment.
• SERVICES IMPLEMENTED ON DEMAND VIA

MOBILE PHONE:
(Mobile pay) service is implemented only when needed by using
the mobile phone. It allows customers to pay their bills or
recharge their account using their handset .Customers can
simply apply for these services on www. Icicibank.com online
and choose any alternative.
ICICI banks services are extremely secure as they are protected

by ‘3D secure’ system for online payments which is developed by
‘Visa’ and ‘MasterCard’ who are the leaders in issuing cards. This
ensures the best protection without any additional cost credit.”
• 10 P’S OF MARKETING FOR ICICI BANK
MARKETING OF SERVICES BY ICICI BANK:
63
• PRODUCT MIX:
• Deposits:
ICICI Bank offers wide variety of Deposit Products to suit our
requirements. Coupled with convenience of networked branches/
over 1800 ATMs and facility of Echannels 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.
64
• 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.

• 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.
• 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.
• 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.
• Cards:
• Credit Card.
65
• Debit cum ATM Card.

• Travel Card.
• 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.
• 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.
• 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
• 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 facility is also available
across geographies through banks.
66
• 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.
67
• 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 suitable
place for bank branches. The number of branches OF ICICI:
1900 in India and 33 in Mumbai.
For example:
LOCATION OF BRANCH OF ICICI BANK:

Shivam Shopping Centre, S.V.Road, Opp. New Era Cinema,
Malad (W), Mumbai.
LOCATION OF ATMS:
• Malad subway
• With branch
• Mindspace
• Orlem
• Raheja township
Why they select this place as branch?

The selection of a suitable place for the establishment of a
branch is Significant with:
• The view point of making place accessible.

• The safety and security provisions a
• Convenient to both the parties, such as the users
and the bankers
• Infrastructure facility
• Near to station and located on s. v. road well
crowded area.
• Market coverage
68
• 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)
• 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 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.
69
• 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.
• 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
 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.
70
• 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.
• 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 organization 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
organization.
To realize its potential in bank marketing, ICICI become
conscious in its potential in internal marketing - the attraction,
71
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.
• POSITIONING:
POSITION process is 'positioning.' Positioning is
undoubtedly one of the simplest and most useful tools to
marketers. After segmenting a market and then targeting a
consumer, icici bank would proceed to position a product within
that market.
The term 'positioning' refers to the consumer's
perception of a product or service in relation to its competitors.
You need to ask yourself, what is the position of the product in
the mind of the consumer?
SIX-STEP QUESTION FRAMEWORK FOR SUCCESSFUL

POSITIONING:
1. What position do you currently own?
2. What position do you want to own?
3. Whom you have to defeat to own the position you want.
4. Do you have the resources to do it?
5. Can you persist until you get there?
6. Are you tactics supporting the positioning objective you set?
72
• PERCEPTION:
As perception differs from person to person, so do the
results of the positioning map e.g. what you perceive as quality,
value for money, etc, is different to my perception. However,
there will be similarities. Products or services are 'mapped'
together on a 'positioning map'. This allows them to be
compared and contrasted in relation to each other. This is the
main strength of this tool. Marketers decide upon a competitive
position which enables them to distinguish their own products
from the offerings of their competition.
• PLANNING:
Marketing plans are vital to marketing success. They help to
focus the mind of companies and marketing teams on the
process of marketing i.e. what is going to be achieved and how
we intend to do it. There are many approaches to marketing
plans. ICICI bank has focused upon the key stages of the plan. It
is contained under the popular acronym ASOT.
PLANNING
73
• TRENDS IN ICICI BANK

India's Largest Private Sector Bank, ICICI Bank, Enables
Customers to Wirelessly Manage their...
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
accounts, thus enhancing their customers' experience and
another added value which sets ICICI Bank apart from its
competitors."
74
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.
ABOUT AIR2WEB INDIA
Air2Web India is a wholly owned subsidiary

of Air2Web, which like Air2Web's US operation, provides the
same state-of-the-art application hosting with day to day
applications management and round-the-clock support, as well
as software licenses of the Air2Web Mobile Internet Platform.
Air2Web India serves its customers in the Asia Pacific region.
To date, Air2Web has more than 70 production deployments with
blue-chip customers providing wirelessly enabled financial
applications, critical field force applications, customer
relationship management, M-commerce and subscription based
content services. Customers include companies such as Delta
Employees Credit Union, ABN AMRO, BellSouth, Digital Insight,
eBay, Best Western International, ADC Telecommunications,
Lexmark International, UPS, Holiday Inn, Intercontinental and
Crowne Plaza hotels, the Weather Channel, CBS Sports Line, and
other leading finance, travel & hospitality, media &
entertainment, health care, retail, and transportation companies.
75
ANNEXURE
76
QUESTIONNAIRE
1. Can you briefly explain something about Bank Marketing?
• Marketing is an important concept today for managing

business so that each strategy is evolved with
foreknowledge of impact of such decisions on the
customers. So even it is being required by bank to market
their products and services.
2. In the field of marketing where does your bank
stand?
• Our bank position is in top 10 in marketing of services of

bank. ICICI Bank was originally promoted in 1994 by ICICI
Limited, an Indian financial institution, and was its wholly-
owned subsidiary.
3. What types of product and services provided by your
bank?
• We have lot of products and services in the form of
different types of Deposits, Loans And Advances,
Demat Services, ATM Services, Various Types Of
Cards, Online Services, Mutual Funds and many
more….
4. What actions you have taken for marketing your

various products and services?
• ICICI bank realized that though it held a substantial share
in the credit card business, in the race for increasing
numbers, it had not concentrated on quality of customer
service. This case let discusses the use of process
improvement, technology and promotional measures by
ICICI to improve customer service levels in the credit card
segment.
•
5. In banking sector who are your competitors?
77
• ICICI banks major competition in private sector bank is

with HDFC BANK, with some public sector banks and even
from some FOREIGN BANKS.
6. What are your future strategies to attract your

customers?
• Retaining customers is a critical key for banks to make the
numbers work this year and time is running out fast. This
is in line with strategies being followed by successful banks
in developed markets. ICICI would be reaching out to
retail customers in many innovative ways and has recently
launched a housing portal indiahomeseek.com and a
shopping mall magiccart.com. The launch of the City
Portals is the such initiative under this strategic focus.
7. Do you think that in marketing area your bank has

to improve?
• Yes with the changing in demand and according to
competition we have to improve day by day.
8. What respond did you got from your newly trends

services from your customers?
• Yes customers were satisfied but they were not having
sufficient information so now we put our new services
information on our websites.
9. Is the customer is satisfy with services provided by

the bank?
• yes the customers are almost satisfied we get complaints
but we solve it immediately.
10. What are social and development initiatives taken

by icici bank?
ICICI Bank has identified rural as one of the major areas of
growth. It is creating holistic propositions to address this
opportunity. The objective is to meet the needs of the rural
economy while building a sustainable business model. The range
of products comprises six primary credit products – microfinance
78
loans, farmer financing, working capital financing for agro-

enterprises, farm equipment financing, commodity based
financing and jewel loans as well as savings investments and
insurance pr
SUMMARY OF MAJOR FINDINGS

With the changes in business environment the concept of
marketing also changed in its area of focus. It shifted from
production to product, then to selling and ultimately to the
customer. Originally banks were conservative in their approach
to marketing as they were sure of ‘walk-in’ business. But with
the growing competition they were forced to have a marketing
orientation.
Marketing in bank consists of traditional external
marketing, internal marketing and interactive marketing.
External marketing is the marketing mix of 4 Ps with which the
marketer has to face the customer in fulfilling his marketing
objectives.
ICICI Bank was originally promoted in 1994 by ICICI
Limited, an Indian financial institution, and was its wholly-owned
subsidiary. 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 achieved spectacular progress in all
departments such as capital, deposits, advances, and in branch
network. The bank has a product development group under
Personal and Service Banking Department. The product
development process in the Bank is based on a perfect
theoretical framework.
The importance of advertising and publicity has been

increasingly felt by the Bank and as an evidence of which
expenditure on it has gone up in absolute terms.
Thus the above analysis reveals that the bank has tried its best
to perfect its marketing effort. It has adequate and suitable
products
79
CONCLUSION
The banking industry in India is facing the challenges on deposit

mobilization front, because of the severe competition from
various financial institutions and public corporations.
ICICI Bank today services a growing customer base of more than

5 million customer accounts and 5 million bondholders accounts
through a multi-channel access network. This includes over 400
branches and extension counters, 1080 ATMs, call centres 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.
This project has given me an insight how Bank should

marketing their products in the right way by overcoming all the
difficulties like proper place, advertising, staff etc. In spite of the
changing banking environment and newer challenges emerging,
Bank Marketing by ICICI bank will continue to remain a popular.
80
BIBLIOGRAPHY
The above whole information has been taken by referring books.
BOOKS REFERRED:-
SERVICE MARKETING- BY P K GUPTA

BANK MARKETING- BY UMESH C PATNAIL
MARKETING IN BANKING AND INSURANCE- BY
ROMEO S. MASCARENHAs
WEBLIOGRAPHY
www.icicibank.com
81
www.allbusiness.com
82

Marketing of Banking Services (Urban Areas)

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MARKETING OF BANKING SERVICES (URBAN AREAS)

INTRODUCTION OF BANKING IN INDIA

The word “Bank” is originated from the German word

A bank is an institution, which deals in money and

For a common person it may be just a storehouse

Bank plays an important role in the economy of any

Bank is also defined as “one who in ordinary

“Banking means accepting for the purpose of lending or

A banking company may be defined as “any company

Customers Relationship Management, on the other

DIFFERENT TYPES OF BANK

In the most simple and not-technical language

Business aims at profit:

2. To make the sale, a customer has to be created.

3. To retain the customer, he has to be satisfied.

4. To satisfy the customer, his needs have to be me.

5. To meet his needs, the product should conform to the

The analysis exactly fits in to Drucker’s

can influence its operations. Because of changing emphasis it is

(1)According to William Stanton, “marketing is a total system

(2)According to Philips kotlar, “marketing is a human activity

(1) Regular and continuous activity: marketing is a

(2) Satisfaction of human wants: marketing activities are

(3) Relates to goods and services: marketing is

(4) Transfer of ownership: marketing of goods brings

(5) Importance of 4ps: marketing is the sum total of

According to “American Marketing Association” “Services are the

Services as defined in the clause (v) of section 2 of

• A service cannot be touched.

Pre-testing the service is not possible as they cannot be seen,

to work with larger groups, to work, faster or the service

VARIABIL PERISHA OWNER

First, they may be people-based or equipment-based.

People-based services are rendered by either professional’s viz.

Second, the delivery of service may require the presence of

Third, the service can be classified on the basis of clients

Fourth, on the basis of service providers motives (profit or non-

Finally, a classification can be made on the basis of the nature of

EVOLUTION OF MARKETING CONCEPT

If we go back to the times before and after the

The term marketing has changed and evolved over a

With the change in the business environment there has also

myopia because it presumes that customers will continue to buy

• Societal Marketing Concept

The Importance of Marketing in the Service-Sector:

In India services sector has grown significantly. Its growth is

In recent years, the banking industry around the world

Information base effectively to communicate

We define bank marketing as “Bank marketing is the

• CONCEPT OF BANK MARKETING

Therefore bank marketing implies that “it is the creation and

The concept of bank marketing encompasses:

• Identifying the most profitable markets now and in future;

From the above discussion of the bank marketing it

Traditional Marketing- the Marketing Mix

famous 4 Ps viz., Product, Price, Place and Promotion. Therefore,

THE CONCEPT OF MIX:

As ‘Theodore Levitt’ has suggested there are four

For a banking service such as a deposit account, the core

The Product Life Cycle

PRODUCT LIFE CYCLE CURVE:

and/or increased promotional costs in order to convince

BOSTON CONSULTANCY GROUP