Characteristics Of Service Industry With Reference To 116s6k

Characteristics of service industry with reference to bank: 1. Intangibility:

Intangibility is an important consideration that complicates the functional responsibility of a manager in a bank specially for influencing the customers and prospect the tangible nature of goods which can be even tested and make a trail. For example: the ICICI bank promotes the sale of credit cards by visualizing the convenience and comforts to the holder of the credit cards. 2. Inseparability: It refers to the service provider and the physical connection to the service being provided and the customer’s involvement. For example: Under ICICI bank, the employee should be available at its desk for providing the service and also, an individual who is willing to open an and enjoy the service. 3. Heterogeneity:

Every individual demand a different type of service and hence in connect with ICICI bank not all ordinary individuals would find its services interesting. 4. Ownership: When a service is performed, no ownership is transferred from the seller to the buyer. For example: when an individual uses the DEMAT services of ICICI bank , no ownership of ICICI is transferred by the service provider to the but only the provider is selling the right to use the service. 5. Simultaneity Services can’t be delivered to the customers or s since services don’t move through channel of distribution. For availing the service it is essential that the s are brought to the provider or vice-versa. For example: If an customer of an ICICI bank want to withdraw cash from his A/C then the has to go the service provider to avail the service. 6. Quality measurement: In service the quality, it is difficult to judge because it is different everywhere. For example: ICICI provides different services as compared to HDFC bank and hence the quality measurement is difficult.

7 P’S OF MARKETING FOR ICICI BANK

1) Product Mix - Deposits - Investments - Anywhere Banking - Loans - Cards - Demat Services - Mobile Banking - NRI Services 2)Pricing Mix 3)Place - Location of Branches - Location of ATM's 4)Promotion Mix 5)Process 6)Physical Evidences 7)People

PRODUCT MIX 1. 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 E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Savings : ICICI Bank offers a power packed Savings 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 advantagesaffordability and higher earnings. Roaming Current : Only Roaming Current from ICICI Bank travels the distance with your business. You can access your s at over 500 networked branches across the country. Bank @ Campus: Thanks to bank@campus, child can now surf the Net and access all the details of his / her at the click of a mouse! No need to visit the bank branch at all. ICICI Bank Salary : is a benefit-rich payroll for Employers and Employees. As an organization, you can opt for our Salary s to enable easy disbursements of salaries and enjoy numerous other benefits too. 2. 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

3. ANYWHERE BANKING

ICICI Bank is the second largest bank in the country. It services a customer base of more than 5 million customer s 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. 4. LOAN a) Home Loans b) Personal Loans c) Car Loans d) Two Wheeler Loans e) Commercial Vehicle Loans f) Loans against Securities g) Farm Equipment Loans h) Construction Equipment Loans i) Office Equipment Loans j) Medical Equipment Loans 5. CARDS a) Credit Card b) Debit cum ATM Card c) Travel Card 6. DEMAT SERVICES ICICI Bank Demat Services boasts of an ever-growing customer base of over 7 lacs 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.

7. 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. 8. 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 s 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 Our local branches and in association with partner banks/ exchange houses.

PRODUCT – PORTFOLIO: Fig - ICICI Bank product portfolio Product Differentiation: Variants in various basic products like savings bank s to suit different customer base and customer needs. Product Augmentation: Redefinition of the banking products with extra benefits and features added to the products. Creating concepts: Products & Concepts………….in the form of Cash back, cross selling, selling gold, cobranding, loans on credit cards, balance transfer , 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-àvis 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. ICICI, 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. ICICI charges the highest price for the customer demanded service like demand draft, Demat services, etc… Another element to consider in the pricing of earning assets is the risk of loss. Most notably, this is relevant in loan pricing. Many banks assign a risk weighting to individual loans over a certain size or based on loan type and assign a credit risk charge based on those ratings. Customer relationships are difficult to assign a value to in the pricing process. Customers will generally press for some price concessions in consideration of other relationships they have with the bank. Asset and liability mix also impacts pricing results. Generally speaking, banks operating with higher loan-to-asset ratios are able to afford to pay more for deposits. Likewise, banks can afford to be more competitive on certain deposit products if they have fewer maturities in a particular timeframe or less total outstanding balances in a product line. demand draft, Demat services rate 1. Saving

a. Domestic – With or without cheque book facility

Normal individual Senior citizen

3.5 % P.A

3.5 % P.A

3.5 %

3.5%

3.5 %

3.5%

a. Non resident – NRO – NRE

TERM DEOPOSIT

LESS THAN 15 LAKHS

MORE THAN 15 LAKH BUT LESS THAN 1 CRORE.

91 Days to 120 days

5.25%

3%

121 days to 180 days

5.25%

3,25%

1 year to 389 days

6.5%

6.5%

5 year to 10 years

8%

8%

A. DOMESTIC

TERM DEPOSIT

LESS THAN 15 LAKHS

MORE THAN 15 LAKH BUT LESS THAN 1 CRORE.

91 Days to 120 days

5.75%

3.75%

121 days to 180 days

5.25%

3.75%

1 year to 389 days

7%

7%

5 year to 10 years

8.5%

8.5%

A. SENIOR CITIZEN

Customers have more distribution channels available to them today than at any other point in history. In the past 10 years, the number of bank locations has increased 20%. Of course, there are the mortgage bankers, the Internet, and a host of other financial service providers like HDFC bank competing for ICICI customers in of providing loan and deposit business. The point is, the competitive marketplace always ensures that if a financial institution is charging too much for loans or paying too little for deposits, its share of the market will likely dwindle as existing and prospective customers find alternative providers. You can do the entire math you want to determine required pricing points, but if you’re pricing is uncompetitive, your market share will shrink. 3. What would the bank have to do to sales and operations to make its rates the most competitive in its market? Pricing is a key issue for the associates who sell bank products to your customers. The fact is, lenders want the lowest rates, and people dealing with depositors want to pay the highest rates. You need the right balance of fee income, strategies to reduce operating costs, and a healthy asset and liability mix to change your required pricing. Pricing: • • • • •

Penetrative pricing aimed at achieving large market share Philosophy of profit through volume Effort to drive out competition Price leader in retail banking product Aggressive pricing facilitated through low cost of fund acquisition

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 s and selecting a suitable place for bank branches. • • •

India’s second largest bank. The number of branches OF ICICI: 1900 in India and in Mumbai and extension counter. Presently running with 1800 MUMBAI ATM’s all over INDIA 4721 ATM’s.

LOCATION OF BRANCH: Near JUHU TARA ROAD, NEXT TO JW MARRIOT HOTEL, VILEPARLE (W.)

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 are convenient to both the parties, such as the s and the bankers. • • •

•

Infrastructure facility Many of the ATM’s are near to station and located on s. v. road, as well as crowded area. In Juhu the branch is been located since it is the prime location for HNI INDIVIDUALS. Market coverage

CHANNEL STRATEGY: Channel strategy of ICICI Bank PROMOTION MIX The basic media of promoting the brand are as follows: •

• • •

•

Advertising: Television, radio, Movie BAGHBAN, theatres Print media: hoardings, newspaper, magazines Publicity: campus visits like in various collages & in institution), sandwich man(big umbrella , Sponsorship Sales promotion: gifts, discount and commission, incentives,etc. like if you open new a/c in ICICI then they provide u a movie cd’s & free discount coupons etc…. & if customer transfer the credit from other bank to ICICI than they can transfer the balance with less interest. Personal selling: selling at competitors place, personalized service, Telemarketing: ICICI ONE SOURCE CALL CENTER (mind space)

Word of mouth: To the existing customers of ICICI Bank the services are provided in a specific manner so that the existing customers themselves would spread out the message and convey their colleagues, family to avail the service this also helps the brand to reach more people. Fig: A couple enters ICICI bank are served coffee as they wait to open an .

PROCESS Flow of activities: Partial activities of ICICI banks follow RBI guidelines rest is decided by the company management. 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. Number of steps: ICICI has its activities broadened in a specific pattern & for a particular cause which help in reducing the time taken by the s. 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 EVIDENCES 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: It help employee of the bank to get from customer so accordingly they can provide the services as per the customers’ needs. • • • • •

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.

Signage: Each and every bank has its logo by which a person can identify the company. Thus such signages are significant for creating visualization and corporate identity. 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 books, chequebooks, etc reduce the inherent intangibility of services. Punch lines: punch lines or the corporate statement depict the philosophy and attitude of the bank. anks have influential punch lines to attract the customers. Punch line of ICICI BANK is “HUM HAIN NA” Employee’s dress code: ICICI bank follows a dress code for their internal customers. This helps the customers to feel the ease and comfort. This draw our attention to the management of body which helps in projecting to the PHYSICAL EVIDENCE:

• Ambience in the branch which projects modernization and sophistication • Consistency across branches in construction ambience etc. THE 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 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, development, motivation and retention of qualified employeecustomers 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. PEOPLE:

• Orientation towards customer service • Division of SME, Personal Banking and other functions at the branch level • Effort towards providing sophisticated and modern image of the bank through its people

Basis for segmentation • Occupation Different products for different occupational segments are identified. And they are categorized into certain levels or criteria’s on the basis of the employment of the individual like, corporate executives, White-Collar employees, Blue- collar employees etc. • Income Minimum balance serves as an income segment barrier. For eg. The high, low & middle level income groups and also the marginal income group are served as a segment for the service. • Geographical Concentrated on Tier 1 & Tier 2 Cities trying to extend reach. The ICICI bank has also segmented its market to the extent of the rural markets since 60% of India is still under rural areas where the mass reach is possible at a certain level of extent. • Age In ICICI the products are been evaluated in such a way that even the students are been catered with A STUDENT SAVING SCHEME, & also the elder ones are been served with the service.