services final report

8/7/2019 Services Final report

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Service Marketing

Assignment on

HDFC Bank

Submitted by:

Group 9

Manasi

Nidhi (2966)

Robert

Sweety (2974)

Tushti (2975)


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Bank Profile

HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation

Limited (HDFC), India's largest housing finance company. It was among the first

companies to receive an 'in principle' approval from the RBI to set up a bank in theprivate sector. The Bank started operations as a scheduled commercial bank in January

1995 under the RBI's liberalization policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged

with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.

Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of

Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to

more than 1,000. The amalgamated bank emerged with a base of about Rs. 1, 22,000

crore and net advances of about Rs.89, 000 crore. The balance sheet size of the

combined entity is more than Rs. 1, 63,000 crore

Industry growth rate:

The growth in the Indian Banking Industry has been more qualitative than quantitative

and it is expected to remain the same in the coming years. Based on the projections

made in the "India Vision 2020" prepared by the Planning Commission and the Draft

10th Plan, the report forecasts that the pace of expansion in the balance-sheets of

banks is likely to decelerate. The total assets of all scheduled commercial banks by

end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise about 65 per

cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank

assets are expected to grow at an annual composite rate of 13.4 per cent.

HDFC Banks Growth rate

The growth rate for the company during the financial year 2010-11 was around 23.2%.


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HDFC Banks Market share

Its total market share is around 5.8%.Under Public banks, SBI has the highest market

share while in terms of Private Banks, ICICI bank has the highest market share.

SWOT ANALYSIS:

Strengths: -

1. HDFC is the strongest and most venerable play on Indian mortgages over the long

term. The management of the bank is termed to be one of the best in the country.

2. HDFC has differentiated itself from its peers with its diversified network and

revamped distribution strategy

3. HDFC has been highly proactive in passing on the cost and benefit to customers

4. Besides the core business, HDFCs insurance, AMC, banking, BPO, and real estate

private equity businesses are also growing at a rapid pace

5. Right strategy for the right products.

6. Superior customer service vs. competitors.

7. Great Brand Image.

8. Knowledge of Indian market

9. High level of services

10. Products have required accreditation.

11. High degree of customer satisfaction.

12. Good place to work

13. Lower response time with efficient and effective service.14. Dedicated workforce aiming at making a long-term career in the field.


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Weakness:

1. Some gaps in range for certain sectors.

2. Customer service staff needs training.

3. Processes and systems, etc.

Opportunities:

1. Profit margins will be good.

2. Growing Indian banking sector

3. Fast growing insurance business in the country

4. People are becoming more service oriented

5. Could extend to overseas broadly.

6. Could seek better customer deals.

7. Fast-track career development opportunities on an industry-wide basis.

8. An applied research center to create opportunities for developing techniques to

provide added-value services.

Threats: -

1. Loss of market share to commercial banks

2. Legislation could impact.

3. Great risk involved

4. Very high competition prevailing in the industry.

5. Vulnerable to reactive attack by major competitors.

6. Lack of infrastructure in rural areas could constrain investment.

7. High volume/low cost market is intensely competitive.


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Process:

HDFC Bank is headquartered in Mumbai. The Bank has an network of 1725 branches

spread in 780 cities across India. All branches are linked on an online real-time basis.

Customers in over 500 locations are also serviced through Telephone Banking. TheBank has a presence in all major industrial and commercial centers across the country.

It has a clearing/settlement bank to various leading stock exchanges; the Bank has

branches in the centers where the NSE/BSE have a strong and active member base.

The Bank also has 5,016 networked ATMs across these cities. Moreover, HDFC Bank's

ATM network can be accessed by all domestic and international Visa/MasterCard, Visa

Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

Besides, HDFC follows a well efficient process in its banking services , it includes,

payment procedures followed at the bank, collection systems, also includes personal

banking for fixed deposits, giving loans to the customers, investments and insurance

services.

Its services also includes, banking facilities for NRIs, to guide them in their investments,

and transfer of money, also accounts and services.

Their process also included providing whole sale banking services, for corporate, smalland medium scale enterprises, other financial institutions, and government sector.


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7Ps of marketing mix usage in HDFC BANK:


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PRODUCT: HDFC Bank has saving accounts, current accounts, salary accounts,

recurring deposits, fixed deposits; demat accounts, safe deposit lockers. HDFC

Bank provides loans like Personal Loans , Home Loans , Educational Loans ,Two

Wheeler Loans , New car Loans, Used Car Loans, Overdraft Against Car, Express

Loans, etc. HDFC Bank provides Credit, Debit and Prepaid Cards to help you meet

your financial objectives. HDFC Bank provides facilities like Mutual

Funds, Insurance, General & Health Insurance, Bonds , Financial Planning,

Knowledge Center, Equities & Derivatives. It also deals with the foreign exchange

and NRI services. HDFC provides the customers with good products which gives

them value for the money.

PRICE: prices would include the interest rates, discounts. Fees and commission.Home loans are available for 9.75% to 10.25 %. Car loans are available for 6%. Fees

and commission include all the processing fees, DD fees, brokerage, fees for RTGS

etc.

PLACE: HDFC Bank has a very good network across the country. So the customers

have the convenience to go to their nearest branch or ATM for transactions.HDFC

Bank has 1,780 branches and over 5,231 ATMs, in 779 cities in India, and all

branches of the bank are linked on an online real-time basis. Customers can open an

account at any branch nearest to his/her residence or office and access it at any

branch in the city or anywhere in the country. This is because of the core banking

solution provided by HDFC bank. HDFC Bank also provides mobile banking and

internet banking facility to the customers for quality and convenience.

PROMOTION: HDFC focuses on providing different offers to their customers and

also to acquire new customers. Example if anyone open a demat account then a

savings account is also provided (3 in 1) accounts. The bank had a promotional

strategy titled as wheels Of Fortune. "This promo was targeted at all those customers

who avail a personal loan, car or two-wheeler loan. There was a lucky draw at the

end of the promo and the winners would get exotic prizes. A school-level painting

competition on wildlife across cities to promote the Kids Advantage account was


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organized. They also had mass promotions where in they decide to send personals

mailers to the people they came in contact during the promotion and explain them

about the products.

PEOPLE: people are the most important part of any bank as they are the once who

come into contact with the customers. Interaction between the employees and the

customers decides the fate of the bank, if the customer is happy with the service

provided by the employee then he would be satisfied and retention of the customers

will be easy. The employees should be trained as to how to deal with the customers

and solve their queries. HDFC has very good HR practices. It has won global HR

excellence award for best recruitment, training and employee branding. They have

induction program called swagat where they are provide training about the productsand the bank practices. HDFC focuses not only on hard skills but also soft skills for

better employee development so that they can serve the customers better. They job

rotation to retain the good employees.

PROCESS: The process of HDFC involves all the account opening process, loan

sanction process, insurance claim process etc. In the bank also there is a certain

process followed to serve the customers. Everything thing is done timely and

accurately. Customers do not have to wait in the queue, they have to take the token

and wait for their turn, there is no chaos in the bank. Everything is done smoothly.

PHYSICAL EVIDENCE: It includes the atmosphere in the bank, the bank logo, the

lighting, and other tangibles. The HDFC bank logo is:


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The atmosphere is good in the branches. The employees are dressed in formals with

their ID cards. The pictures below are the HDFC interiors.

The Service Triangle:

HDFC Bank has positioned itself as a bank which gives higher standards of services

through product innovation for the diverse needs of individual and corporate clients. So

they highlight the following points in their positioning segment:

y Customer Centric

y Service Oriented

y Product Innovation


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Traditional Marketing:

These involves the marketing initiatives to attract the customers towards its product or

service. It involves the promise by the organization to its customers in regards of high

quality. HDFC first believes in creating awareness about its products: Therefore:

y They demonstrate the advantages of net banking and mobile banking, as these

concepts are relatively new to people living in smaller towns and cities.

y The bank has also launched another initiative called Business Ki Baten, which is

targeted at areas where the bulk of the population comprises small businessmen.

y HDFC has a data-led customer analysis system, Unica. It enables them to

measure the efficacy of the campaigns, test every campaign at each and every

step, experiment with creatives and media. There are learnings that can

immediately be incorporated into the next campaigns.y These campaigns provide them with information about customer preferences that

can be used for mass media communication, making it more effective.

Internal Marketing:

When we talk about internal marketing we know that here the employees are treated

as internal customers. HDFC has been awarded the Best Employer.

y Their induction program - Swagat - covers products and business of the bank. It

is focused on developing skills and values.

y Four years ago they started an internal employee referral program called Karo

Sifarish. It has become one of their most preferred channel and contributes

significantly to talent acquisition.

y They organize various programs including outbound experiential learning, Open

Spaces Technology, Personal Effectiveness, Leadership, Excellence, art of

living, Vedanta, etc.

y HDFC Bank uses incentives in structuring compensation packages and have

established a performance-based bonus scheme under which permanent

employees have a variable pay component of their salary.


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y In addition to basic compensation, employees are eligible to participate in their

provident fund and other employee benefit plans.

y They have also set up a superannuation fund to which they contribute defined

amounts. In addition, they contribute specified amounts to a gratuity fund set up

pursuant to Indian statutory requirements.

y They focus on training their employees on a continuous basis. They have a

training center in Mumbai, where they conduct regular training programs for their

employees. Management and executive trainees generally undergo up to eight-

week training modules covering every aspect of banking.

y They offer courses conducted by both internal and external faculty. In addition to

ongoing on-the-job training, they provide employees courses in specific areas or

specialized operations on an as-needed basis.

y HDFC Bank believes in work place transformation. They believe that Small

changes can lead to large improvement. They follow the Japanese technique

for smooth running of work and effective work place organization. The Kaizen

technique consisting of 5S is used by HDFC.

Five S include:

Sort: Eliminating unnecessary things from the work place.

Systematize: Efficient and effective storage method. Good labeling and

identification practices.

Spic-N-Span: Regular cleaning and self inspection. It gives a sense of

ownership.

Standardize: It means simplification, standard rules and policies.

Sustain: Regular training to maintain standards. It brings in self discipline andcommitment toward work place organization.


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Relationship Marketing:

The employees are trained in a way which helps to treat their customers as Kings.

They follow the 9Rs while interacting with customers:

1. Rapport

2. Respect

3. Rescue

4. Responsiveness

5. Re-enforcement

6. Reputation

7. Referrals

8. Reviews

9. Reciprocity

CUSTOMER SERVICE

Customer Service is the service provided in support of a companys core products.

Customer Service most often includes answering questions, taking orders, dealing

with billing issues, handling complaints, and perhaps scheduling maintenance or

repairs. Customer Service can occur on site , or it can occur over the phone or via

the internet. Many companies operate customer service call centers, often staffed

around the clock. Typically there is no charge for customer service. Quality customer

service is essential to building customer relationships. It should not, however, be

confused with the services provided for sale by a company. Services tend to be more

intangible than manufactured products. There is a growing market for services and

increasing dominance of services in economies worldwide.

There are generally two types of customer expectations. The highest can be termed

as desired service: the level of service the customer hopes to receive. The threshold

level of acceptable service which the customers will accept is adequate service.

Yet there is hard evidence that consumers perceive lower quality of service overall

and are less satisfied.

Possible reasons might be:


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With more companies offering tiered service based on the calculated

profitability of different market segments, many customers are in fact getting

less service than they have in past.

Increasing use by companies of self-service and technology-based service is

perceived as less service because no human interaction or human

personalization is provided.

Technology-based services (Automated Voice Systems, Internet-Based

Services, and Technology Kiosks) are hard to implement, and there are many

failures and poorly designed systems in place.

Customer expectations are higher because of the excellent service they

receive from some companies. Thus they expect the same from all and are

frequently disappointed.

Organizations have cut costs to the extent that they are too lean and are too

understaffed to provide quality service.

The intensely competitive job market results in less skilled people working in

frontline service jobs; talented workers soon get promoted or leave for better

opportunities.

Many companies give lip service to customer focus and service quality; but

they fail to provide the training, compensation, and support needed to actually

deliver quality service.

Delivering consistent, high-quality service is not easy, yet many companies

promise it.

The gaps model positions the key concepts, strategies, and decisions in services

marketing in a manner that begins with the customer and builds the organizations

tasks around what is needed to close the gap between customer expectations and

perceptions.

The central focus of the gaps model is the customer gap, the difference between

customer expectations and perceptions. Firms need to close this gap- between what

customers expect and receive in order to satisfy their customers and build long


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term relationships with them. To close this all important customer gap, the model

suggests that four gaps- the provider gaps- need to be closed.

The following four provider gaps, shown below are the underlying causes behind the

customer gap:

Gap 1: Not knowing what customers expect. Gap 2: Not selecting the right service designs and standards. Gap 3: Not delivering to service standards. Gap 4: Not matching performance to promises.

Gap 1: Not knowing what customers expect:

Inadequate marketing research orientation

Lack of upward communication

Insufficient relationship focus

Inadequate service recovery

Type 1 (Not knowing what customers expect) between the bank management

perceptions & customers perceptions; where in it could be a result of ineffective

management of customers expectations or it could be due to lack of

communications as some of the customers also lack the knowledge of

understanding.

Type1 Gap (Not knowing what customers expect) which is existing, where in

inadequate marketing research & orientation is not done matching the customers

expectations.

Gap 2: Not selecting the right service designs and standards.

Poor service design

Absence of customer-driven standard

Inappropriate physical evidence and services cape


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The management and the customers perceptions are matching to some extents

in the case ofcomfort facility provided by the banks. It is observed that public

sector banks tend to ignore these services where as private banks think that

providing such facilities will make a positive impact on customers.

In the case of ATM service there is little gap because of technological

advancements, today most of the ATM centers can be shared by customers of all

banks. But were debit/credit card service is concerned there is huge gap due

to the hidden costs that are imposed on customers by some of the banks.

In disbursing and processing loans banks have to follow very strict steps

hence time taken is more due to which a huge Gap is observed by customers.

Phone/net banking are new facilities hence little gap is observed in perceptions.

Gap 3: Not delivering to service standards.

Deficient in human resource policies

Customers who do not fulfills roles

Problems with service intermediaries

Failure to match supply and demand

The gap between the management and the customers perceptions is mostly

because some customers feel that bank management is not responding fast but

the management says it has to follow the standardized procedures in various

types of queries, hence the slow response. This is basically Type 3 Gap (Not

delivering to the service standards) where in the reason could be failure to match

supply & demand and the problems with service intermediaries.

Due to introduction of new core banking technology transaction time has

reduced significantly, still some of the customers during the survey complained of

long transaction time. This is because of Type 3 Gap (Not delivering to the

service standards) where some customer do not fulfill their roles ie. they are in a

hurry to have their work done with high expectations towards management and

some times this also results due to managements failure to match supply and

demand.


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Gap 4: Not matching performance to promises.

Lack of integrated services marketing communication

Ineffective management of customer expectation

Over promising

Inadequate horizontal communication

Contradicting the managements promise the customers feels that banks are not

keeping the customers well informed about the changing deposit & service

charge rates .Such a gap is result of Type 4 Gap where in inadequate horizontal

communications & ineffective management of customer expectations is

experienced.

In case of entertaining the grievances of the customers and the grievance

redressal systems is concerned there is a huge gap between the customers &

banks perceptions. This could be due to Type 4 Gap where in banks are

deficient in human resources policies, their over promising nature about the

services and ineffective management of customers expectations is experienced.

services final report

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