Chapter -III Relationship Marketing Strategies Adopted by...
Transcript of Chapter -III Relationship Marketing Strategies Adopted by...
Chapter -III
Relationship Marketing
Strategies Adopted by the
Indian Banking Sector
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RELATIONSHIP MARKETING STRATEGIES ADOPTED BY THE
INDIAN BANKING SECTOR
3.1 CRM PRACTICES IN BANKS
3.1.1 ICICI and CRM
With Finacle, the bank currently has the ability to process 0.27 million cheques
per day and manage 7000 concurrent users.
The bank has successfully leveraged the power of Finacle and has deployed the
solution in the areas of core banking, consumer e-banking, corporate e-banking and
CRM. With Finacle, ICICI Bank has also gained the flexibility to easily develop new
products targeted at specific segments such as ICICI Bank Young Stars- a product
targeting children, Women's Account addressing working women and Bank@campus
targeting students.
The CRM initiatives in India’s ICICI Bank hold together its compelling story of
growth. Its growth in customer base, channels, and product and service offerings. The
ICICI bank is one of the private sector bank which is providing the customer value
added services. They are not only able to satisfy the customer but they are successful in
building a never-ending relationship with the customer. They are able to retain them
and carry business with them to benefit both the organization and the customer.
Customer preferences and needs are very well understood by this bank. With the help
of technology they are able to develop brand equity in the market and differentiate
themselves from the competitors. On the 19th of January 2000, a click and mortar made
an announcement that offered a clear but early measure of the impact of the "e" in e-
business. On that day the ICICI Bank released performance figures related to its
previous year’s dotcom initiatives. The company reported a staggering 500% increase
in Internet customers during the period from March 31, 1999 to December 31, 1999 –
from 4000 to 24,000 customers in 9 months. While the absolute number of 24,000 or
the growth of 500% might not mean much, it does speak volumes of the nascent
potential. ICICI Bank and the ICICI Group as a whole has been striding purposefully
down the e-pathway. The group prefers to call it a "clicks and bricks" strategy that
provides multiple access points to its customers. For its traditional customers there are
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the lean and mean brick and mortar branches propped by ATMs, call centers and direct
selling agents. Internet banking and WAP enabled services take care of the Supply and
technology savvy professionals of today. The rise in Internet banking customers is a
result of the Infinity, Internet banking facility launched by the bank. The facility,
initially made available to NRIs and later to resident Indians permits online opening of
accounts, bills payment, account information.
Call centers
ICICI Bank is certainly juggling some interesting numbers. Its Bombay call
centre handles 25 different products, for 10 million customers, with 620 positions. Now
ICICI Bank’s branch network handles less than half of all transactions – a shift which
has taken an axe to the company’s cost-to-serve. ICICI appreciated early on that by
centralizing their service infrastructure, and centralizing their service expertise, they
created a new level of service for customers.
The call centre has played a leading role in transforming the bank’s value
proposition for its customers: The call centre also provides an opportunity to shift the
qualitative nature of the relationship between bank and customer to a new level. Much
of the extra leverage with customers that the call centre brings is tactical. A customer is
a lot more receptive to up selling and cross selling when they’re phoning ICICI. The
humble call centre is ICICI Bank’s means of shifting away from a market share based
product-as-commodity mindset, to those stresses the importance of deepening exiting
customer relationship.
ICICI used to spend a lot of energy trying to make sales. Now their emphasis
has changed – they spend their energy to get to know the customer better. It is when a
customer feels comfortable with the relationship they have with ICICI that they are
likely to deepen their commercial relationship with them. The call centre is there new
tool to getting to know the customer better. The speed of the shift away from the branch
as the primary means of interacting with the bank shows the receptiveness of Indian
consumer behavior to the use of new channels.. The technology usage is far higher in a
call centre compared with any other environment. The call centre is a cheaper channel
than the branch, and often it is more convenient for the customer. This convenience can
be supported by technology to provide a higher level of service than was possible
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previously. All the products and process are unified in the single call centre – allowing
the customer to get a seamless service. So ICICI is therefore able to truly take a
customer centric customer view. ICICI is able to get a customer who has been rejected
from taking a credit card; they immediately offer a debit card.
The bank takes people who are first class graduates with a lot of yearning to
learn. Following a selection process that includes telephone, personality and literacy
tests, there is a post-recruitment process embracing a continuous learning program.
E-marketing
The e-initiatives of the ICICI group have not been limited to customer
servicing. The marketing activities for its various products are also taking the online
route. In April 2000, through tie-ups with Orange and Airtel, ICICI started offering
limited WAP based services for customers on the move. A month later, on its way
towards a full-fledged online mobile commerce service, the company commenced
offering services like balance updation, request for cheque book, details of last 5
transactions, request for statement etc. Corresponding services are also available for the
bank’s credit card customers. On the anvil are personal banking services, payment
services for utilities, travel and ticketing information etc.
Modus Operandi
The group has leveraged on a number of tie-ups to come up with its various
offerings. For its Internet banking offering the ICICI Bank uses Infinity from Infosys,
for its credit card business it uses Vision Plus from PaySys, USA. For WAP services
the tie-up with cellular service providers Orange and Airtel helps reach out to these
users, while the WAP technology is being implemented by the in-house ICICI Infotech
Services. To leverage the Net for its marketing initiatives, ICICI Bank and Satyam
Infoway have jointly set up a ".COM" company to promote banking products on the
Net. The bank has also entered into agreements with leading corporate like BPL,
Rediff.com, Usha Martin and Tata Communications for B-to-C solutions in a bid to
further strengthen its Internet banking product offering and services Payment systems
are perhaps the bane of any financial services company looking to move online.
Security and privacy are issues that every bank looking to move online is grappling
with. The ICICI Group has come up with its own answer to the problem. ICICI joined
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hands with a consortium led by Compaq to take the lead in offering a solution to the
Indian e-commerce community. This consortium offers a B2B and B2C e-commerce
payment gateway within India. The B2C payment gateway will help the Internet
shopper, the web merchant and the banks to engage in e-commerce, while the B2B
payment gateway will facilitate virtual transactions in the corporate world. CRM has
been envisioned by the bank to support its goals in sales, customer service, and
analytics. Already, about 30.40% of the bank’s home loans are cross-sold to existing
customers. Similar ratios have also been reported in the sale of insurance policies.
Ratios of about 50.60% have been seen out of the credit cards and personal loans
business. The bank’s stated intention is to take these ratios to as high as 60.75%. ICICI
Bank states that these high levels of relationship maximization are made possible by
how its CRM system is able to "know and understand the customer better”, which
customer is most suitable for what kind of product and at what point in time.
ICICI Bank’s CRM capability is built on a “Teradata” data warehouse that
integrates data from multiple sources, including the Oracle database and various flat
files. The system provides users with information about each customer’s checking
accounts, fixed deposits, credit cards, and other financial information. The bank has
taken on the end-to-end proposition of SAS for enterprise intelligence, which offers a
credible integrated approach to analytics, including data detection, data cleansing, data
preparation, event detection, reporting and business intelligence, and campaign
analysis. The bank estimates that it is able to track more than 1,200 parameters
concerning demographics, transactions made, channel usage, and product relationships.
Through Behavior Explorer and views, business users develop customer profiles and
run adhoc queries. Analysts then use the information to guide product development and
marketing campaigns that are intended to address each individual’s total requirements,
instead of just pushing a product. The success of cross-selling to existing customers has
also been enabled by the bank’s growing capabilities in lead management. The home
loans business unit, for example, has built a lead management system rolled out to
about 700 users. The system is able to allocate leads, schedule meetings, provide a
record of all interactions with the customer, and give reminders for customer follow-
ups. A lead generation tool has also been developed in-house to capture and route
Product applications made over mobile phones.
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CRM working of ICICI BANK
CRM, according to ICICI consists of following approaches:
[A] Getting personalized information on customers.
[B] What is the value of the relationship?
[C] Customized offerings to the customers
[D] Converting a prospective customer into a true customer.
[A] GETTING PERSONALIZED INFORMATION ON CUSTOMERS
The bank collects all the information about the customers for processing. ICICI
bank has mainly 4 service offerings viz: loan account, saving account, current account
and fixed deposits. Moreover, the bank has many customers in each category. So, they
collect the data on one server and thus the company gets the personalized information
on each customer by asking them to fill the information in customer application form.
[B] WHAT IS THE VALUE OF THE RELATIONSHIP?
After the collection of the personalized information on every customer, the
department checks out the value of the relationship with each and every customer.
Later, they decide how to approach the customer for knowing what his needs and wants
are? After this is done, the company offers him the customized product.
[C] CUSTOMIZED OFFERINGS TO THE CUSTOMER
The step which comes after deciding the value of the customer is that the
company offers the person the customized product. Moreover, they also practice a
concept called cross- selling over here. Cross – selling refers to offering another
product from the service offering of the bank to the customer which he has not gone
for.
[D] CONVERTING A PROSPECTIVE CUSTOMER INTO A TRUE
CUSTOMER.
The last approach of CRM according to ICICI bank is that they try to convert
the prospective customer into a true customer. Right from the moment the inquiry
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comes, they follow- up the customer and then make him to come to the bank
occasionally and then regularly.
The processes for delivering CRM-The tools and the processes are as follow –
• Customer application form
• Centralized software where the whole data is collected.
• Wide range of offering
• Cross – selling and
• Feedback forms
Different Channels for Access Services
Bank Branch ATM Phone Banking
Internet Banking Insta Banking Mobile Banking
Call Centre
3.1.2 HDFC and CRM
HDFC Bank is making all possibilities come true for its customers. The bank
offers targeted messaging and other customized services using NCR’s 'Aptra e-
Marketing' software. The bank runs one-to-one (customized) and one-to-all targeted
messaging via all self-service channels like the ATM, mobile banking and Internet
banking. Most banks do not have clean data of the customer with regards to residential
address and other details. This implementation helps HDFC Bank with a more thorough
analysis of the change in customer demographics and thus, plans their campaigns better
after being equipped with a thorough data repository in the data warehouse.
Along with targeted messaging, the bank is also offering fast ATM services.
HDFC Bank has launched ‘favorite transaction’ that allows the customer to set a
particular amount for withdrawal so that every time he visits the ATM he will not be
accessing the same screens. This has reduced the number of screens the customer must
access while using the ATM machine for withdrawing cash. Till now, the customer had
to access 9 screens, which has now been reduced to five screens, which has in turn
resulted in a reduction of 40 percent in the time taken to complete a transaction. The
customer also has the option to undo the 'favorite transaction' and go on with the
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regular screens. HDFC bank with a daily turnover of 300 transactions per day per
ATM, which adds up to about one million transactions per day. As part of the first
phase, HDFC Bank has made its ATMs across Pune, Nashik and Ahmednagar faster by
allowing customers to save their 'favourite transactions’’ on ATMs. In fact,
approximately 25 percent of Pune-based customers have already used the 'favorite
transaction' feature. HDFC is globally the first bank to use the entire suite of offerings
from Aptra e-Marketing; it has deployed everything except the call centre suite they
have been powered by the data warehousing, data mining, modeling and analytics
abilities and have structured data in the CRM to implement this software. The major
benefits from the implementation is saving about 40 percent of the transaction time at
the ATMs, ability to personalize communication via self-service channels enabling
active engagement with the customer, which further enhances the ability of the CRM
for analytics.
HDFC has revamped its corporate website in line with its communication
philosophy. The new improved, interactive, and user-friendly website is in sync with its
need-based communication strategy of helping individuals through their decision of
selecting the right plans that fit their needs.
• Protection: Need for a sound income protection in case of unfortunate demise of
an individual.
• Investment: Need to ensure long-term real growth of an individual’s money.
• Saving: Need to save for the milestones and protect an individual’s savings too.
• Retirement: Need to save for a comfortable life post retirement
The other salient features of the website are:
• Caters to all types of Internet users - advanced, moderate and new users
• Faster and convenient navigation (e.g. no need to use 'back page button;' access
to relevant and important links available on every web page)
• Key information at your fingertips. e.g. structured flow of key product
information and their features
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• Enhanced interactivity through user interaction and involvement (tools and
calculators)
• Modular structure making the website 'future ready' with flexibility to
accommodate restructuring and additional content in future
• Uses flash and other advanced software to provide a better surfing experience
to the user, but through its intelligence moves to a classic mode if the user does
not have the requisite software to view the same.
• Compatible with all browser s i.e. Internet Explorer 6 and above, Firefox
Mozilla, Safari, Opera and Google Chrome
• And compliant with W3C.
For HDFC, the CRM activities span three segments: Back-office, which enables
all transactions. For instance, a transfer of funds will involve recording the transfer
request, debiting and crediting the account appropriately and the transformation by
telex or demand draft. The back office enables the core activities of banking
transactions. Distribution of the bank's products and services in the market. That is,
enabling customer interaction through the Internet, ATMs, and the mobile phone.
HDFC's corporate customers need not visit the bank for many of their transactions
either. PC-based corporate banking lets authorized personnel in corporates open letters
of credit or pay suppliers and integrate the transaction with the ERP system. The third
sort of automation enables the business intelligence and CRM aspects of a bank's
business. HDFC Bank can analyze channel profitability. Say, determine which type of
customer access which channel the most, and evaluate the cost-benefits of offering a
service to customers. For cash management, they use a package from a Pune company
called CashTech. There Depository systems run on software provided by Mumbai-
based Kalpataru. For loans, that uses Nucleus Software. To provide round-the-clock
service and support to its customers, HDFC Bank has Unix-based systems from Sun
Microsystems as hosts for its banking software. It is in the process of moving the
application to a mainframe-class UNIX machine (the E10000 from Sun) .Many other
systems run on Intel-based Compaq or IBM hardware with Microsoft NT or Windows
2000 as the Operating platform. The systems are run on a centralized basis with the
branches accessing them via telecommunication lines (leased lines from the DoT). All
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departments within the organization were automated simultaneously. they work on a
centralized database, the addition of new branches and new cities made very little
impact on the day-to-day operations of the other existing branches. Every server at
HDFC Bank had its own direct attached storage that led to distributed storage upgrades
and inefficient use of storage. The storage sub-systems were not highly available and
resilient. Thus, to provide scalable, reliable storage systems, and a SAN environment
for all their applications, HDFC Bank opted for a solution from Hitachi Data Systems.
Playing in a dynamic market, where there is a constant need to innovate and stay ahead
of competition, HDFC Bank's objective is to build sound customer franchises across
distinct businesses, so as to become the preferred provider of banking services for
target retail and wholesale customer segments
HDFC Bank operates in an automated environment in terms of information
technology and communication systems. All the bank's branches have online
connectivity, which enables it to offer funds transfer facilities to its customers. Multi-
branch access is also provided to retail customers through the branch network and
ATMs. In terms of software, the corporate banking business is supported by Flexcube,
while the retail banking business by Finware, both from i-flex Solutions. The core
banking software is running on both IBM AIX and SUN solaris. The BI is running on
HP servers. It has various other banking applications on Microsoft and solaris servers.
The bank has prioritized its engagement in technology and the Internet as one of its key
goals and has already made significant progress in web-enabling its core businesses.
They have roughly more than 150 TB of storage on Hitachi technology. They
have their own production servers running on enterprise storage and entire test and
development servers on modular storage. Every server in the organization had its own
direct attached storage. This led to distributed storage upgrades and inefficient use of
storage. The organization has ordered around 75 TB of enterprise class storage and
about 30 TB of modular and SATA Storage for use by applications due to growth in the
business and addition of new applications to support existing and new business areas.
HDFC bank is using all ERP, CRM with BI, OLTP/RDBMS, e-mail from Lotus, core
banking, treasury management etc.; the complete capacity with production and test
development is more than 150 TB.
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HDFC Bank's customer philosophy is based on four core values-operational
excellence, customer focus, product leadership, and people.
3.1.3 THE CRM AT SBI
The need for system automation became critical at SBI. The challenge was to
meet the demanding service and fulfillment levels of the growing. SBI was on the
lookout for a technology solution that was easy to implement, cost-effective and robust
to expand its presence in the insurance sector and achieve a higher degree of service
differentiation. Although the organization had a centralized system, most of the work
was done manually. They had client/server architecture in place. But it was not
integrated with the legacy systems.
Early on, the top management realized that technology was a crucial driver for
product and service delivery. Although using the extensive SBI group platform for
cross-selling products and services was a viable option, reaching and engaging the
customer cost effectively required a technology backbone. Earlier, they had little
enterprise software to support its business and the processes were carried out in an ad
hoc manner.
Benefits
• Reduction in TAT (Turn Around Time).
• SBI can now integrate and manage content, campaigns and merchandising to
patrons via the Web.
• Streamlined product delivery and support processes with a single contact point
on the Web.
• Site offers a one-stop-shop for customer's needs.
There were hiccups as various centres had problems connecting to the CRM
portal, which have been solved. They are using multiple types of connectivity, leased
lines that terminate at the central data centre in Mumbai, broadband connections, dial-
up connections, telephone lines, etc. The type of connectivity depends on the number of
users in that particular branch and the kind of work being done there. They have their
mail server and other functionalities on the portal too.
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The development tool, WebLogic Workshop, is Java-based, allowing people at
SBI to develop and customize applications at a faster pace. Applications running on the
system permit the management of content, merchandise and campaign-related details.
The company has even moved its internal applications to the portal. Thus, even when a
staff member is working internally, he is working with an interface of a browser/portal.
What used to be on a client/server environment is now on the portal..
Functions like cash management, proposal details and issuing policies all
happen on the portal. Having deployed WebLogic, SBI is able to run its cycle-all its
processes right from claims processing to CRM-on the portal. Some features of the
system are load balancing, effective code deployment and clustering support (24x7).
Plans are afoot to use the portal for providing self-service to customers, partners and
employees. One can just come in, log on to the portal, and access any kind of
information.
SBI implemented the system in a different manner. With this initiative, SBI has
derived quite a few benefits. For instance, it has been able to reduce the Turn Around
Time (TAT). “Because of this initiative they could spot a few processes that would
otherwise never be realized. They have outsourced some routine work which was done
centrally and was manual. Now, irrespective of the location of the work, it’s done
through the portal and they are able to manage it better.
Saving time and money
Process improvements are evident. All of this happened with minimal system
changes without adding to the existing infrastructure The solution has also brought
down by 50 percent the time taken for specific processes like cash management. With a
view to understanding the data quality gaps and to develop a road map to closing them,
SBI engaged Spectrum Business Support Ltd's Data fix Solutions team (now Datafix
Technologies Pvt. Ltd.) to undertake a Data Quality Study and Audit (DQ Audit).
Data Quality Consulting and Audit.
Define Data Quality Audit Project Scope identifying DQ dimensions, gaps and
parameters to be studied.
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Data Quality Study including defining Business Rules and Domain Rules for
conducting the DQ Audit.
DQ Audit Process and presentation of results including listing of DQ problems
that would likely hamper SBI's information management and Customer Relationship
Management strategy.
Data De-duplication Pilot
• Pre-cleansing 3.3 million records data sourced from the Core Banking
application.
• De-Duplicating the records to arrive at Unique IDs.
• Identifying key customer relationship metrics based on unique individual and
household Ids.
SBI is equipped to develop a blue-print for their Customer Quality Initiatives to
create long-term competitive advantage. State Bank of India (SBI), India’s largest
financial services conglomerate has contracted to implement Anti Money Laundering
(AML) software AMLOCK from 3i Infotech Ltd .it helps the bank in managing its
government clients better. Cash@WillTM helps SBI improve revenue, maximize
profits, optimize costs, and establish efficient management systems to accelerate
growth.SBI is now using Nucleus Software’s Cash@WillTM for Drafts, Income Tax
Refund Orders (ITRO), Multi City Cheque (MCC) and Collections services. The
implementation was done in a phased manner where Payments and Collections
modules implemented initially were subsequently replaced by the newer version of
Cash@WillTM. Nucleus' Cash@WillTM will power the cash management product of
State Bank of India. It supports the bank in handling of government business like
ITRO, SBI rights issue. Nucleus Cash Management Solution Cash@WillTM built on
new generation technologies of Oracle empowers banks to offer their corporate
customers optimized cash management services, dramatically improving funds
collection and inflow forecasting, payment dispatch and funds utilization.
3.1.4 PUNJAB NATIONAL BANK AND CRM
PNB chose Spectrum Business Support's Insight solutions (now part of Insight
Technologies Pvt. Ltd.) to provide the Data-cleansing and Deduplication solution for
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the first 4.3 million records from branches. The following tasks were done by the
Ixsight team, using Scrubbix for Data-cleansing and Deduplix for Data Deduplication:
• Data Cleansing and Deduplication of Migrated Data.
• Generating exception reports of bad quality data based on various data quality
dimensions like invalidity, inaccuracy, missing values, precision etc.
• Developing onscreen validation routines which could be used by the Branches.
• Measuring success of validation and incorporating corrections back into the
system.
• Data De-duplication by identifying Unique Individuals and Households.
• Generating various Customer segmentation reports which could be used by
PNB's think tank.
The following key customer discoveries were part of the analysis:
- Top 20% of customers.
- Geographical and Demographic segmentation.
- Data Quality Analysis.
- Loyalty scores based on house holding.
November 2008, 4 months ahead of schedule, it implemented industry-leading
Finacle core banking solution from Infosys across its operations running a flexible, and
scalable database platform from Oracle and innovative and cost-effective Sun SPARC
enterprise servers from Sun Microsystems. With its pan India presence, PNB offers a
wide variety of banking services through its branches including 249 extension counters
– the largest amongst Nationalized Banks. With an increasingly dynamic business and
regulatory environment, PNB sought to not only achieve automation, but also centralize
operations, standardize branch processes, achieve high scalability for future business
growth, provide flexibility of creating innovative banking products to its lines of
business, and at the same time, reduce overall costs.
The visionary zeal and the futuristic view of the Bank’s top management in the
year 2000-2001 incubated the idea of introduction of a Centralised Banking solution.
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The bold and innovative thought culminated into the CBS architecture with Finacle
application on Oracle Database and Sun hardware platform with Solaris Operating
System. In 2001-2002, PNB embarked upon a transformation journey unparalleled in
the country in terms of scale and technology. The solution’s scalability has also enabled
the bank’s scalability to be the best in the country with the number of peak transactions
at 3.5 million. Finacle core banking platform also provides the bank with exceptional
agility for product innovation and improved flexibility of operations. With seamless
integration of delivery channels such as ATM and internet banking solutions, PNB is
able to provide 24X7 services to customers at a reduced transaction cost. Sun SPARC
enterprise M series and energy efficient Chip Multi-Threading (CMT) systems running
the Solaris Operating System delivered higher performance and scalability, enabling
PNB’s architecture to scale seamlessly. Periodic consolidation of servers and storage by
Sun Professional Services also delivered important benefits – optimizing compute and
storage utilization, reducing power, cooling and space costs significantly over a period
of time.
Sun technologies also ensured continuous availability of the banking platform
with the Disaster Recovery Site established by the bank and as part of test drills, the
Bank has successfully operated out of its alternative data centre (DRS). PNB’s choice
of the Oracle Database has provided the bank’s CRM infrastructure with robustness,
management features, security and scalability as well as performance requirements to
service 3.5 million transactions and 22500 concurrent users – a significant achievement
in the Indian banking industry.
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3.2 FACTORS OF RELATIONSHIP MARKETING :
The findings of the study obtained from the analyses of responses given by the
respondents. In this section, findings related to various research problems have been
presented. The findings have been organized around following two sections:
1. Descriptive Statistics.
2. Factor Analysis.
A1. Interpretation of factor analysis on to identify the factors of Relationship
Marketing influencing customer relationship in banking Sector.
Formal statistics are available for testing the appropriateness of the factor
model. Barlett’s test of sphericity is used to check the Hypothesis. Another useful
statistics is the KMO measure of sampling adequacy and Chi Square test. This index
compares the magnitudes of the observed correlation coefficients to the magnitudes of
partial correlation coefficient. Small values of KMO statistics indicate that the
correlation between the pairs of variables cannot be explained by other variable and
that factor analysis may not be appropriate. A value greater than 0.50 is must for doing
factor analysis, Very high Chi Square value is desirable to good results.
From table 1, it is evident that the KMO value is 0.687 which is higher than the
critical minimum value i.e. 0.50. Also, Chi Square value is very high i.e. 991.7 which is
quite high to justify the condition to proceed with factor analysis.
From above analysis, it is evident that our data is fit for Factor Analysis.
Table 3.1: KMO and Bartlett’s Test of Sphericity
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .687
Bartlett's Test of Sphericity Approx. Chi-Square 9.917E3
Sig. .000
Next step is to determine the method of factor analysis. There are two methods
of factor analysis. One is Principal Component Analysis (PCA) in which total variance
in the data is considered. The diagonal of the correlation matrix consist of unities, and
full variance is brought into the factor into the matrix. PCA is recommended when
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minimum number of factors are to be determined that will account for maximum
variance in the data.
In Common Factor Analysis, the factors are estimated based on the common
variance. Communalities are inserted in the diagonal of the correlation matrix. This
method is appropriate when primary concern is to identify the underlying dimensions
and common variance is of interest.
We need to determine the minimum factor with that account for maximum
variance in the data, therefore for our set of data Principal Component Analysis is
suitable method.
First six factor account for 72.33% variance. Number of factor decided should
represent minimum 60% variance.
Component matrix or factor matrix as given in table 2 contains the coefficients
used to express the standardized variables in terms of factors. These coefficients, the
factor loading, represent the correlation between factors and variables. A coefficient
with large absolute value indicates that the factor and variable are closely related. The
coefficient of the factor matrix will be used to interpret the variables.
Table 3.2 is initial un-rotated matrix, indicates the relationship between the
factors and individual variables, it sometimes results in factors that cannot be
interpreted easily because the factors are correlated with many variables. In table 3.2,
there are few factors which are correlated with more than one factor. With such
equation, it is not possible to interpret the factors. For simplification of this problem,
factor matrix is rotated and transformed into a simple matrix form which is easy to
interpret.
Table 3.2: Un-rotated Component Matrix.
Variables COMPONENTS
1 2 3 4 5 6
I am really closer to some of the employees than to bank itself.
.443
My bank offers greater deposit rate than normal. .583
Today, it is more difficult and complicated to do banking. .506
I feel my money is safe with the bank. .601
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My bank provides free credit card with savings bank accounts.
.491
I would not like to avail all new services stated by my bank in future.
.389
My bank helps me to sort out any problem in doing with Internet Banking.
.612
I feel that the bank does not cares about me. .403
I am treated with respect by the bank staff. .497
Doing banking with internet banking is more difficult. .516
Phone banking is more convenient. .445 .496
My bank does not provides me overdraft facility with savings/current account
.512
Further discounts on services by my bank help me to deal with the same bank.
.492
My bank keeps on providing information about its new schemes regularly.
.511
My bank does not offers me a free Demat Account. .475
My bank does not offers me a concessional rate of interest on term loan.
.553
My bank does not updates itself with the changing environment.
-0.558
My bank wishes me on various occasions. .497
Manager does not pays attention to my complaints, if any. -0.613
My bank does not offers me flexible timing/convenient banking hours.
.472
Bank manager is always available to help in a crisis. .512
I can rely on my bank for changing future requirements. .482
Bank does not includes me in its priority list of the customers
-0.511
I feel good when bank wishes me on special occasions. .446
I get the feeling that bank really cares about me. .513
My bank provides free demand draft on savings bank Account.
.487
My bank offers zero (0) balance facility to my family members accounts.
.514
Moving my account to another bank is not worth. .482
My bank provides all information regarding terms & conditions about the product before delivering.
.446
96
My bank provides cheque collection facility from home/work place.
.511
My bank provides cash deposit or withdrawal facility from home/work place.
.525
I refer banks’ service to my friends and relatives. .448
My bank does not provide facility of a locker on concessional rate.
.522
I would like to buy more financial products from the same bank in future.
.447
My bank helps me to sort out any problem in doing Phone Banking.
.426
I always share “new services” with my friends and relatives offered by the bank.
.499
My bank does not provide facility of a locker on concessional rate.
.513
I want my bank should offer more innovative products in future.
.474
Bank Provides adequate parking facility. .448
Bank staff is always well dressed. .456
Front desk employees have adequate knowledge about banking services.
.447
Décor/Layout of the bank is up to mark. .512
Bank uses advanced computers /information technology to serve its clients.
.523
Bank/Branch holds monthly meeting with its customers. .485
Location of the branch is approachable. .462
Location of ATM is always at accessible place. .427
Bank provides proper sitting arrangement to its customers. .422
Service counters are well labelled by bank. .458
ATM of the bank provides Bill payment, money transfer facility with ease.
.488
The purpose of rotation is that each variable should give us significant loading
with one factor only (if possible). If several factors have high loading with more than
one factor, interpretation become difficult as we have seen above in table 3.2 of un-
rotated component matrix. Rotation does not affect the commonalities and the
percentage of total variance explained. The variance explained by each the individual
factor is redistributed by rotation. We have used “VARIMAX” procedure which is
97
most common method of rotation used in factor analysis. This is an orthogonal method
of rotation that minimizes the number of variables with high loadings on a factor and
hence increasing the interpretability of a factor.
Table 3.3: Rotated component Matrix
Variables COMPONENTS
1 2 3 4 5 6
I am really closer to some of the employees than to bank itself.
.458
My bank offers greater deposit rate than normal. .778
Today, it is more difficult and complicated to do banking. .477
I feel my money is safe with the bank. .463
My bank provides free credit card with savings bank accounts.
.658
I would not like to avail all new services stated by my bank in future.
.691
My bank helps me to sort out any problem in doing with Internet Banking.
.584
I feel that the bank does not cares about me. .497
I am treated with respect by the bank staff. .512
Doing banking with internet banking is more difficult. -0.526
Phone banking is more convenient. .816
My bank does not provides me overdraft facility with savings/current account
-0.481 -0.512
Further discounts on services by my bank help me to deal with the same bank.
.669
My bank keeps on providing information about its new schemes regularly.
.558
My bank does not offers me a free Demat Account. -0.449
My bank does not offers me a concessional rate of interest on term loan.
-0.609
My bank does not update itself with the changing environment.
.534
My bank wishes me on various occasions. .578
Manager does not pays attention to my complaints, if any. -0.479
My bank does not offers me flexible timing/convenient banking hours.
-0.551
Bank manager is always available to help in a crisis. .548
I can rely on my bank for changing future requirements. .664
98
Bank does not includes me in its priority list of the customers
-0.452
I feel good when bank wishes me on special occasions. .611
I get the feeling that bank really cares about me. .489
My bank provides free demand draft on savings bank Account.
.664
My bank offers zero (0) balance facility to my family members accounts.
.473
Moving my account to another bank is not worth. .695
My bank provides all information regarding terms & conditions about the product before delivering.
.583
My bank provides cheque collection facility from home/work place.
.611
My bank provides cash deposit or withdrawal facility from home/work place.
.623
I refer banks’ service to my friends and relatives.
My bank does not provide facility of a locker on concessional rate.
-0.497
I would like to buy more financial products from the same bank in future.
.577
My bank helps me to sort out any problem in doing Phone Banking.
.498
I always share “new services” with my friends and relatives offered by the bank.
I want my bank should offer more innovative products in future.
.662
Bank Provides adequate parking facility. .712 .587
Bank staff is always well dressed. .564
Front desk employees have adequate knowledge about banking services.
.427
Décor/Layout of the bank is up to mark. .719
Bank uses advanced computers /information technology to serve its clients.
.419
Bank/Branch holds monthly meeting with its customers. .501 .485
Location of the branch is approachable. .689
Location of ATM is always at accessible place. .614
Bank provides proper sitting arrangement to its customers. .592
Service counters are well labeled by bank. .704
ATM of the bank provides Bill payment, money transfer facility with ease.
.598
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
99
Table 3.3 shows the rotated component matrix having crystal clear relationship with
each factor has with different variables. The factors are summarized as below:
Factor 1 – Variables:
1. My bank offers greater deposit rate than normal. (0.778)
2. My bank provides free credit card with savings bank accounts. (0.658)
3. Further discounts on services by my bank help me to deal with the same bank.
(.669)
4. My bank does not offer me a free Demat Account. (-0.449)
5. My bank does not offer me a concessional rate of interest on term loan. (-
0.609)
6. My bank provides free demand draft on savings bank Account. (0.664)
7. My bank does not provide facility of a locker on concessional rate. (-0.497)
Rotated component matrix having crystal clear relationship with each factor has
with different variables. The correlation between factor Financial Benefits and its
variables shows different factor loadings i.e. .778, .658, .669, -0.449, -0.609, .664, -
0.497. Factor loading 0.778, 0.658, 0.669 & 0.664 shows that providing greater deposit
rate, discount on services, providing free credit card and demand draft shows clearly
providing banking services on discounted prices which clearly show providing
financial benefits. Negatively associated variables shows a correlation with a factor.
Factor 2 – Variables:
1. I would not like to avail all new services stated by my bank in future. (0.691)
2. My bank wishes me on various occasions. (0.578)
3. I can rely on my bank for changing future requirements. (0.664)
4. I get the feeling that bank really cares about me. (.489)
5. Moving my account to another bank is not worth. (0.695)
6. I would like to buy more financial products from the same bank in future.
(0.577)
7. Bank/Branch holds monthly meeting with its customers. (0.501)
8. I want my bank should offer more innovative products in future. (0.662)
Name to the factor 1: - Financial Benefits
100
Rotated component matrix having crystal clear relationship with each factor has
with different variables. The correlation between factor Long term Contract and its
variables shows different factor loadings i.e. 0.691, 0.578, 0.664, 0.489, 0.695, 0.577,
0.501, 0.662. Factor loading 0.691, 0.664, 0.695 & 0.662 shows availing new services
in future, changing future requirements, and providing innovative product in future
clearly shows dealing with bank in coming future, which clearly shows long term
contact with bank.
Factor 3 – Variables:
1. I am really closer to some of the employees than to bank itself. (0.458)
2. I feel that the bank does not care about me. (0.497)
3. I am treated with respect by the bank staff. (0.512)
4. My bank does not update itself with the changing environment. (0.534)
5. Manager does not pay attention to my complaints, if any. (-0.479)
6. Bank manager is always available to help in a crisis. (0.548)
7. Bank does not include me in its priority list of the customers. (-0.452)
8. I feel good when bank wishes me on special occasions. (0.611)
9. My bank offers zero (0) balance facility to my family members accounts.
(0.473)
10. My bank provides cheque collection facility from home/work place. (0.611)
11. My bank provides cash deposit or withdrawal facility from home/work place.
(0.623)
12. Bank uses advanced computers /information technology to serve its clients.
(0.419)
Rotated component matrix having crystal clear relationship with each factor has
with different variables. The correlation between factor Proactive marketing and its
variables shows different factor loadings i.e. 0.458, 0.497, 0.512, 0.534, -0.479, 0.548, -
0.452, 0.611, 0.473, 0.611, 0.623, 0.419. factor loading 0.611, 0.611 and 0.623 shows
bank wishes his customers on various occasions, providing cheque collection facility
Name to the factor 2: - Long Term contract
Name to the factor 3: - Proactive Marketing
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from home/work place and cash deposit or withdrawal facility from home/work place
depicts that bank works on new marketing techniques, so banks bank are providing that
techniques which is new in market and these new techniques are not used by service
industry, so it is clear that banks are working on Proactive Marketing techniques.
Negative factor loading -0.479 and -0.452 shows negative correlation between
factor and its variables, it means manager pay attention to customer complaints and
bank is maintaining priority list of the customers. It means banks are working on new
techniques of marketing like proactive marketing.
Factor 4 – Variables:
1. My bank helps me to sort out any problem in doing with Internet Banking.
(0.584)
2. My bank keeps on providing information about its new schemes regularly.
(0.558)
3. My bank provides all information regarding terms & conditions about the
product before delivering. (0.583)
4. My bank helps me to sort out any problem in doing Phone Banking. (0.498)
5. Front desk employees have adequate knowledge about banking services (0.427)
6. Bank/Branch holds monthly meeting with its customers. (0.485)
Rotated component matrix having crystal clear relationship with each factor has
with different variables. The correlation between factor Knowledge Building
Programme and its variables shows different factor loadings i.e. 0.584, 0558, 0.583,
0.498, 0.427, 0.485. Factor loading 0.584, 0558 and 0.583 shows bank helps its
customers in doing banking with internet banking, providing information about new
schemes and inform its customers regarding all term and conditions about the product
shows providing knowledge or increasing knowledge of its customers depicts the factor
as a Knowledge Building programme.
Factor 5 – Variables:
1. Today, it is more difficult and complicated to do banking. (0.477)
Name to the factor 4: -Knowledge Building Programme
102
2. Doing banking with internet banking is more difficult. (-0.526)
3. Phone banking is more convenient. (0.816)
4. My bank does not provide me overdraft facility with savings/current account. (-
0.512)
5. My bank does not offer me flexible timing/convenient banking hours. (-0.551)
6. Bank Provides adequate parking facility. (0.712)
7. Location of the branch is approachable. (0.689)
8. Location of ATM is always at accessible place. (0.614)
9. ATM of the bank provides Bill payment, money transfer facility with ease.
(0.598)
Rotated component matrix having crystal clear relationship with each factor has
with different variables. The correlation between factor Convenience and its variables
shows different factor loadings i.e. 0.477, -0.526, 0.816, -0.512, -0.551, 0.712, 0.689,
0.614, 0.598. Factor Loading 0.816, 0.712, 0.689, 0.614 and 0.598 shows convenience
about phone banking, adequate parking facility, branch location is easily approachable,
ATM is at accessible place and provides bill payment, and money transfer facility with
ease shows all banking operations having importance of convenience while dealing
with bank
Factor 6 – Variables:
1. I feel my money is safe with the bank. (0.463)
2. Bank staff is always well dressed. (0.587)
3. Décor/Layout of the bank is up to mark. (0.719)
4. Bank provides proper sitting arrangement to its customers. (0.592)
5. Service counters are well labelled by bank. (0.704)
Rotated component matrix having crystal clear relationship with each factor has
with different variables. The correlation between factor Visibility and its variables
shows different factor loadings i.e.0.463, 0.587, 0.719, 0.592, and 0.704. Factor
loading0.719, 0.704, 0.592, and 0.587 shows decor/layout of the bank, well labelled
Name to the factor 5: - Convenience
Name to the factor 6: - Visibility
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counter, proper sitting arrangement and well dressed staff all these variables depicts
about the visibility as a factor.
RELIABILITY ANALYSIS:
Scale validation is mandatory while doing factor analysis. It is measured
through Chrombach alpha. The desired value of Alpha should be above 0.60 (Malhotra
6e). From table, it can be seen that the alpha value is .759 which is good enough to
satisfy the condition and justifies the correctness of the scale used.
Table 3.4: Reliability Statistics through Chronbach’s Alpha
Chronbach’s Alpha Chronbach’s Alpha Based on Standardized Items N of Items
.759 .759 16
Component matrix or factor matrix as given in table 4 contains the coefficients
used to express the standardized variables in terms of factors. These coefficients, the
factor loading, represent the correlation between factors and variables. A coefficient
with large absolute value indicates that the factor and variable are closely related. The
coefficient of the factor matrix will be used to interpret the variables.
3.3 Managers Output
By review of literature, we have defined various statements, which by making
or applying factor analysis, we find six factors of relationship marketing, these are:
1. Financial benefits.
2. Long term contact.
3. Pro-active Marketing.
4. Knowledge Building Programme.
5. Convenience.
6. Visibility
Based on the above factors, we have prepared the questionnaire for the
managers on the basis of statements recorded for customer survey. So to identify
104
relationship marketing strategies adopted by Indian banking sector or to find which
sector is aggressive in which area, we compare mean values of both public sector as
well as private sector banks by taking statements on factor wise analysis.
STANDARD DEVIATION: It (represented by the symbol sigma, σ) shows how much
variation or "dispersion" exists from the average (mean, or expected value). A low
standard deviation indicates that the data points tend to be very close to the mean; high
standard deviation indicates that the data points are spread out over a large range of
values.
For considering mean value, lesser the value of mean shows strongly Agree
and higher value represents strongly disagree.
FACTOR 1:- FINANCIAL BENEFITS
Table: 3.5: Factor of relationship marketing- Financial benefits (Managers
view point)
STATEMENTS
N MEAN
Public Sector Banks
S.D
Public Sector Banks
MEAN
Private Sector Banks
S.D
Public Sector Banks
Bank provides higher rate of interest than its competitor.
100 2.21 1.06 3.29 0.90
Bank offers free credit card with savings/current accounts.
100 3.65 1.28 2.92 1.3
Bank provides free Demat account with various other accounts.
100 3.68 1.23 2.57 1.19
Bank provides locker facility on discounted rates to its existing customers.
100 3.99 1.17 2.84 1.21
It is easy to retain customers for longer period of time by providing more discounts on services.
100 2.13 .92 1.87 1.06
Explanation of above table:
1. Bank provides higher rate of interest than its competitor:- It is very clear that
Managers/employees of public sector bank says some positive words in this
regard as compare to private sector banks. Mean (2.21) value of public sector
105
bank is towards (agree) & mean value (3.29) value of private sector bank is
towards (disagree). So public sector banks are having upper hand in this regard.
2. Bank offers free credit card with savings/current accounts: - It is clear from the
analysis that Managers/Employees of public sector bank does not have positive
words in this regard as compared to private sector banks. Mean value (3.65) of
public sector bank is towards (Strongly disagree) and mean value (2.92) of
private sector bank is towards (Sometimes). So both public as well as private
sector banks have denied for providing this facility to customer free of cost. But
private sector bank have slightly upper hand in this regard as compared to
public sector banks.
3. Bank provides free demat account with various other accounts:- It is clear from
the analysis that Managers/Employees of public sector bank does not have
positive words in this regard as compared to private sector banks. Mean value
(3.68) of public sector bank is towards (disagree) and mean value (2.57) of
private sector bank is towards (Sometimes). So both public as well as private
sector banks have denied for providing this facility to customer free of cost. But
private sector bank have slightly upper hand in this regard as compared to
public sector banks. So it is suggested to both public as well as private sector
banks that they should insist customer for free demat account, this helps bank to
implement cross selling initiative and earn brokerage charges.
4. Bank provides locker facility on discounted rates to its existing customers: - It is
clear from the analysis that Managers/Employees of public sector bank do not
have positive words in this regard as compared to private sector banks. Mean
value (3.99) of public sector bank is towards (disagree) and mean value (2.84)
of private sector bank is towards (Sometimes). So both public as well as private
sector banks have denied for providing lockers on discounted rates. As it is
experienced that managers of public sector banks said that there is a non
availability of lockers in their branches for more customers, so there is no
reason of giving discounts on locker services. So it is suggested to public sector
banks that they should increase the number/availability of lockers in their
banks.
5. It is easy to retain customers for longer period of time by providing more
106
discounts on services: - It is clear from the analysis that managers/employees of
both public as well as private sector bank have positive words in this regard.
Mean value (2.13) of public sector bank is towards (agree) and mean value
(1.87) of private sector bank is towards (agree). So employees of both public
sector as well as private sector banks agree that they should give some special
discount on services to their existing customers, to retain them for a longer
period of time.
FACTOR 2:- LONG TERM CONTACT
Table: 3.6: Factor of relationship marketing- Long term contact (Managers view point)
STATEMENTS
N MEAN
Public Sector Banks
S.D
Public Sector Banks
MEAN
Private Sector Banks
S.D
Public Sector Banks
Bank wishes his customer on different
occasions. 100 3.43 0.87 2.24 1.01
Does your bank organise any
seminar/customer meet. 100 1.83 0.99 2.75 1.25
Do you listen to the complaints of your
customers 100 1.62 0.77 1.70 0.84
Do your customer feel that their bank
really cares about them 100 2.23 1.05 1.89 0.87
Relationship managers make an effort to
build long term relation with customer. 100 1.77 0.79 1.54 0.60
Customers rely on their bank for changing
future requirements. 100 2.84 0.86 1.76 0.86
Explanation of above table:
1. Bank wishes his customer on different occasions: - It is very clear that
Managers/employees of public sector bank do not have positive words in this
regard as compared to private sector banks. Mean value (3.43) of public sector
bank is towards (disagree) and mean value (2.24) of private sector bank is
towards (agree). So it is clearly shown from the analysis that private sectors
banks are ahead from public sector banks in this regard. So public sector banks
107
has to work in this matter, because wishing their existing customer can enhance
customers dealing with bank for a longer period of time.
2. Does your bank organise any seminar/customer meet:- Mean value (1.83) of
public sector bank is towards (agree) and mean value (2.75) of private sector
bank is towards (sometimes). So public sector banks have slightly upper hand as
compared to private sector banks. So it is suggested to organise
seminar/customer meet on regular basis, which helps bank to give knowledge to
their customers about new products and to enlarge long term dealing with
customers.
3. Do you listen to the complaints of your customer: - Mean value (1.62) of public
sector bank is towards (agree) and mean value (1.70) is also towards (agree). So
it is clear from the analysis that both public as well as private sector banks are
listing to the complaints of the customers. So this activity has to be properly
executed and resolve the customer concerns, so to maintain longer dealing of
the customers with the bank.
4. Do your customers feel that their bank really cares about them: - It is clear from
the analysis that managers/employee of both public as well as private sector
banks are having almost same view in this regards. Mean value (2.23) of public
sector bank and mean value (1.89) of private sector bank is towards (agree) on 5
point likert scale. So banks should maintain their environment in their banks, by
doing this they can enhance customers dealing with bank for longer period of
time.
5. Relationship managers make an effort to build long-term relation with
customers: - Mean value (1.77) of public sector and mean value (1.54) of
private sector banks of both type of sector of banks is towards (agree). So
employees/managers of both public as well as private sector bank agree on this
point that relationship managers really make efforts to build longer term
relations with customers. And it also clear from the previous findings that
relationship marketing strategies are not properly implemented in both public as
well as private sector banks. So it is advisable for both types of banks that they
should consider or implement this strategy in their bank properly for longer
period of contact with customers.
108
6. Customers rely on their bank for changing future requirements: - It is clear from
the analysis that private sector banks are having upper hand as compared to
public sector banks. Mean value (2.84) of public sector bank is towards
(sometimes) and mean value of private sector bank is towards (agree) on five
point likert scale. So it is clear that managers of public sector bank also think
that that they are behind as compared to private sector banks in terms of
providing new-era banking to their customers properly. So it is advisable for the
public sector banks that they should work in this area by enhancing use of
technology and giving training about new –age banking to their employees.
FACTOR 3:-PROACTIVE MARKETING
Table: 3.7: Factor of relationship marketing- Proactive marketing (Managers view point)
STATEMENTS
N MEAN
Public Sector Banks
S.D
Public Sector Banks
MEAN
Private Sector Banks
S.D
Public Sector Banks
Does your bank offer zero balance facility on
customers’ family accounts. 100 3.16 1.32 2.54 1.32
Is your bank providing cheque collection
facility from customers’ place of
residence/work.
100 4.14 1.14 3.02 1.18
Is your bank providing the facility of cash
deposit or withdrawals from customers’ place
of residence/work.
100 4.31 0.93 3.17 1.05
Are some of the employees maintaining
personal relations with customers to deliver
their product/services.
100 2.41 0.90 2.30 1.10
Is your bank maintaining any priority list of its
customers. 100 3.26 1.18 2.76 0.86
Explanation of above table:
1. Does your bank offers zero balance facility on customers family accounts:- Mean
value (3.16) of public sector bank is towards (sometimes) and mean value (2.54) of
private sector bank is (well between agree and sometimes) on five point likert scale.
So it is clear from the analysis that both public as well as private sector banks are
109
not considering this strategy as a marketing strategy. So it is suggested to both type
of bank that they should introduce this as a new marketing strategy in their banks
properly.
2. Is your bank providing cheque collection facility from customers’ place of
residence/work: - It is clear from the analysis that private sector bank has slightly
upper hand in this regard. Mean value (4.14) of public sector bank is towards
(disagree) and mean value (3.02) of private sector bank is towards (sometimes) on
the five point scale. So it is clear that both types of banks are not considering this as
a marketing strategy, or this type of new initiative in their banks. So banks has to
consider this as marketing strategy, because new banks are using this as very well
and today’s busy world customer does not have a time and by this customer get
attraction and avail this service.
3. Is your bank providing the facility of cash deposit or withdrawal from customers’
place of residence/work: - It is clear from the analysis that private sector bank has
slightly upper hand in this regard. Mean value (4.31) of public sector bank is
towards (disagree) and mean value (3.17) of private sector bank is towards
(sometimes) on the five point scale. So it is clear that both types of banks are not
considering this as a marketing strategy, or this type of new initiative in their banks.
So banks has to consider this as marketing strategy, because new banks are using
this as very well and today’s busy world customer does not have a time and by this
customer get attraction and avail this service.
4. Are some of the employees maintaining personal relations with customers to deliver
their product/services: - Mean value (2.41) of public sector and mean value (2.30)
of private sector banks is towards (agree) on five point likert scale. It is clear from
the analysis that both type of banks are positive in this regard. And it is also clear
that, if employees are maintaining personal relations with customers to deliver their
products, they can indulge them with their bank for longer period of time. So it is
very important for the bank, that they should encourage their employees for this.
5. Is your bank maintaining any priority list of its customers: - Mean value (3.26) of
public sector bank is towards (sometimes) and mean value (2.76) of private sector
bank is also towards (sometimes). It is clear from the analysis that
managers/employees of both banks have mix response in this regard. So it is
110
suggested to both type of banks, that they maintain priority list of its customers on
branch wise and assigned a relationship manager to them, so that proper care of
preferred customers is to be taken properly. This type of new marketing strategies
to be implemented by the both type of banks to cater its customers.
FACTOR 4:-KNOWLEDGE BUILDING PROGRAMME
Table: 3.8: Factor of relationship marketing- Knowledge building
programme (Managers view point)
STATEMENTS
N MEAN
Public Sector Banks
S.D
Public Sector Banks
MEAN
Private Sector Banks
S.D
Public Sector Banks
Front desk employees do not have adequate
knowledge about the banking services. 100 1.96 0.83 2.03 1.11
Does your bank help the customers to work with
technology driven banking. 100 2.06 0.92 1.78 0.91
Does your bank make you and the customer
aware about its new scheme. 100 1.76 0.81 1.69 0.78
Do the bank employees explain term and
conditions to the customers about a product
before delivering.
100 2.81 0.72 3.31 0.89
Explanation of above table:
1. Front desk employees do not have adequate knowledge about the banking services:
Mean value (3.21) of public sector banks and mean value (3.11) of private sector
bank is towards (sometimes). It is clear from the analysis that managers of both
type of banks are not fully convinced with the statement, they are of view that front
desk employees are not having full knowledge about banking services. So banks
should work in this area, banks should arrange time to time training programmes of
their employees.
2. Does your bank help the customer to work with technology driven banking:- Mean
value (2.06) of public sector banks and mean value (1.78) of private sector bank is
towards (agree). So it is clear from the analysis that both private as well as public
sector banks are working in this matter well as per the employees/managers say. So
111
banks have to continue this in their banks. So more and more customers will use
banking products with new technology like phone banking, Mobile Banking,
Internet banking, ATM Services, RTGS, Online shares purchase/sale etc. So that
customers visit in the branch is to decreased, by which bank can reduce its cost per
transaction.
3. Does your bank make you and the customers aware about its new schemes:- Mean
value (1.76) of public sector banks and mean value (1.69) of private sector bank is
towards (agree), so it is clear that both public as well as private sector banks have
positive words in this regard, so banks has to continue this in their banks, by
informing customers about new schemes, banks can retain its existing customers for
longer period of time.
4. Do the bank employees explain term and conditions to the customers about a
product before delivering:- Mean value (2.81) of public sector bank is towards
(sometimes) and mean value (3.31) of private sector bank is towards (between
sometimes and disagree). So it is clear from the analysis that banks are not
explaining term and conditions to the customers about the product before delivering
the product. So it is suggested to both type of banks that they should explain all
things to the customers before delivering the products, so that no confusion would
be created afterwards. So customers will not leave the bank by any
miscommunications.
FACTOR 5:-CONVENIENCE
Table: 3.9: Factor of relationship marketing- Convenience (Managers view point)
STATEMENTS
N MEAN
Public Sector Banks
S.D
Public Sector Banks
MEAN
Private Sector Banks
S.D
Public Sector Banks
Bank provides adequate parking facility to
its customers. 100 2.85 1.12 2.98 0.98
Does your bank offers flexible
timing/convenient banking hours to its
customers.
100 3.19 1.17 2.21 1.25
It is very difficult to do banking through
internet. 100 2.26 1.24 3.68 1.02
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Explanation of above table:
1. Bank provides adequate parking facility to its customers:- Mean value (2.85) of
public sector bank and mean value (2.98) of private sector bank is towards
(sometimes). So it is clear from the analysis that both public sector as well as
private sector bank does not give any positive response in this regard, managers
give mix response, So it is suggested to both type of banks that while opening
any new branch, they should consider about providing proper parking facility,
because it is very much important now a days, by providing this convenience to
customers banks can retain its existing and attract new customers with their
bank.
2. Does your bank offers flexible timing/convenient banking hours to the
customers:- Mean value (3.19) of public sector bank is towards (sometimes) and
mean value (2.21) of private sector bank is towards (agree). So it is clear from
the analysis that private sector bank has upper hand in this regard as compared
to public sector banks. So it is suggested to public sector banks that they should
work in this regard, because it is very important for the banks to cater the needs
of working class customers, they can do their banking after their working hours
or on Sundays. So banks should assign some special branches in particular city
to cater more and more customers.
3. It is very difficult to do banking through internet: - Mean value (2.26) of public
sector bank is towards (agree) and mean value (3.68) of private sector banks is
towards (disagree). So it is clear that managers of public sector banks find it
difficult to do banking through internet as compared to private sector banks. It
is so because most of the employees in public sector banks are more than 40
years of age. So this age group is not using internet more. So it is suggested to
public sector banks that they should train their managers/employees about E-
banking. So if managers are comfortable in doing banking with internet, then
only they should make sure about their customers will feel easy to do banking
with internet.
113
FACTOR 6:- VISIBILITY
Table: 3.10: Factor of relationship marketing- Visibility (Managers view point)
STATEMENTS
N MEAN
Public Sector Banks
S.D
Public Sector Banks
MEAN
Private Sector Banks
S.D
Public Sector Banks
Decor/layout of the bank is up to mark. 100 2.18 0.97 1.43 0.60
Bank provides proper sitting arrangement to its customers.
100 2.68 1.17 2.12 1.25
Service counters are well labelled by bank. 100 2.49 1.24 2.33 1.02
Explanation of above table:
1. Decor/layout of the bank is up to mark: Mean value (2.18) of public sector bank is
towards (agree) and mean value (1.43) of private sector bank is towards (strongly
agree). So it is clear from above analysis that managers of private sector banks feel
more that decor/layout of the bank is up to mark . as managers of public sector
banks also has positive words in this regards, but some managers are having
concern, so public sector banks scores less as compare to private sector banks. So
public sector bank has to work in this regard.
2. Bank provides proper sitting arrangement to its customers: Mean value (2.68) of
public sector bank is towards (less than sometimes) and mean value (2.12) of
private sector bank is towards (agree). So it is clear that private sector banks have
upper hand in this regard. So it is suggested to public sector banks that they should
work in this regard, so that customer feel ease in the branch while doing banking
transactions.
3. Service counters are well labelled by bank: - Mean value (2.49) of public sector
banks and mean value (2.33) of private sector bank is towards (agree). So most of
the managers of both public sector as well as private sector banks have positive
words in this regard. Labeling a counter makes easy for a customer to go to right
counter directly, by which they can save their time while doing transactions in the
bank and it is also an advantage to bank that they deal more and more customers in
same time.