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8/14/2019 A BRAINWAVE INTO FACTORS THAT INFLUENCE MARKETING STRATEGIES ADOPTED BY HDFC BANK.pdf
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International Journal of Management Research & Trends ISSN: 0976-9781
Volume 3, Issue 2, 2012 Rani & Panchantham
Strategies Adopted By HDFC BankUma Rani T.S. Asociate Prof, MBA Department, Indra Ganesan College of Engineering, Trichy
Dr. Rtn. N. Panchanatham, Professor & Head, Department of Business Administration, Annamalai University,
Chidambaram.
ABSTRACT
Change is continuous process in all sectors of the world. Another significant impact of banks
today is the technology issue. In this study the business banking products of HDFC bank, that
best suits the needs of the borrower were analysed. The Customer feels that loans to be obtained
require a process that is extremely complicating and time consuming. This calls for an
ombudsman setup separately for the domain. The observation and findings of the study have
helped to give useful recommendations to bank. The implementation of the suggestion can help
to improve strategies and build competencies over that of their competitors. This study has there
by helped the researcher by giving exposure into new concepts in todays banking scenario as
the interface shifts from service to products.
KEY WORDS:
HDFC Bank, Business Banking products, Marketing Strategies, Customer satisfaction,
Documentation, Interest rates and the factors that influence the Bank Marketing Strategy.
INTRODUCTION
Banks play a positive role in economic development of a country as repositories of communitys
savings and as purveyors of credit. Indian Banking has aided the economic development during
the last fifty years in an effective way. The banking sector has shown a remarkable
responsiveness to the needs of planned economy. It has brought about a considerable progress in
its efforts at deposit mobilization and has taken a number of measures in the recent past for
accelerating the rate of growth of deposits. As recourse to this, the commercial banks opened
branches in urban, semi-urban and rural areas and have introduced a number of attractiveschemes to foster economic development.
The activities of commercial banking have growth in multi-directional ways as well as multi-
dimensional manner. Banks have been playing a catalytic role in area development, backward
area development, extended assistance to rural development all along helping agriculture,
industry, international trade in a significant manner. In a way, commercial banks have emerged
as key financial agencies for rapid economic development.
By pooling the savings together, banks can make available funds to specialized institutions
which finance different sectors of the economy, needing capital for various purposes, risks and
durations. By contributing to industries, government securities, bonds and debentures of term-
lending institutions in the fields of agriculture and now housing, banks are also providing these
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Volume 3, Issue 2, 2012 Rani & Panchantham
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institutions with an access to the common pool of savings mobilized by them, to that extent
relieving them of the responsibility of directly approaching the saver. This intermediation role of
banks is particularly important in the early stages of economic development and financial
specification. A country like India, with different regions at different stages of development,presents an interesting spectrum of the evolving role of banks, in the matter of inter-mediation
and beyond.
Technology in Banking
Innovations in information and communication technology are perceived to be the important
factor for productivity and growth. The relationship between IT and Banking is fundamentally
high. Because of which expected to reduce costs, increase volumes and facilitate customized
products. Public sector must adopt the technology adoption in order to compete with Private and
public sector banks Retention of the customers can be made through adoption of new technology
like ATM, telephone banking, on-line bill payment and Internet banking.
Market Focused or Customer Focused
Any Bank whether a market-focused, or customer-focused, must first determines who are its
potential customers desire, and then builds the business or service. Marketing theory and practice
is justified in the belief that customer use a product or service because they have a need, or
because it provides a perceived benefit. Two major factors of marketing strategy are The
recruitment of new customers (acquisition) and the retention and expansion of relationships with
existing customers (base management).
II THE ORGANIZATION PROFILE
HDFC Bank was incorporated in August 1994 at Mumbai, and, currently has an nationwide
network of 761 Branches and 1977 ATM's. It commenced operations as scheduled Commercial
Bank in 1995.HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team.
Our business philosophy is based on four core values - Customer Focus, Operational
Excellence, Product Leadership and People. We believe that the ultimate identity and success
of our bank will reside in the exceptional quality of our people and their extraordinary efforts.
For this reason, we are committed to hiring, developing, motivating and retaining the best people
in the industry. HDFC Bank began operations in 1995.
Mission is to be "a World Class Indian Bank",benchmarking ourselves against international
standards and best practices in terms of product offerings, technology, service levels, risk
management and audit & compliance. The objective is to build sound customer franchises across
distinct businesses so as to be a preferred provider of banking services for target retail and
wholesale customer segments, and to achieve a healthy growth in profitability, consistent with
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Volume 3, Issue 2, 2012 Rani & Panchantham
AJCUT 3
the Bank's risk appetite. We are committed to do this while ensuring the highest levels of ethical
standards, professional integrity, corporate governance and regulatory compliance.
We provide business loan for short or long term financial needs of business organizations. A lot
of times it is important for businessmen to acquire a certain amount of money for running theirenterprise. It is well known that without the required capital no business can run. For any
business whether in initial stage or in growth phase, capital is required to keep up the
momentum. Increase our market share in Indias expanding banking and financial services
industry by following a disciplined growth strategy focusing on quality and not on quantity and
delivering high quality customer service.
Business Strategy of HDFC Bank Emphasis the Following
Leverage our technology platform and open scaleable systems to deliver more products tomore customers and to control operating costs.
Develop innovative products and services that attract our targeted customers and addressinefficiencies in the Indian financial sector.
Continue to develop products and services that reduce our cost of funds. Focus on high earnings growth with low volatility.
III REVIEW OF LITERATURE
Saritha. P and P. Mohan Reddy, (2009) Marketing strategies vary industry wise. The
marketing strategies of service industry are quite different form production sector. Within the
service industry, financial services industry requires a unique advertising strategy. The present
paper is an attempt through a light on marketing strategies in public and private sector banks.
The prevalence of competition in the banking sector has necessitated banks to differentiate their
products and services by adopting different marketing strategies; therefore a comparative study
of marketing strategies of public sector banks and private sector banks is done in this research
paper. The study made it clear that there is no significant difference in the marketing strategies of
public and private sector bank.
Roig et al., (2006)analyzed the dimensionally of the concept of customers perceived value in
the banking sector of Spain. A total of 200 customers were selected for survey. The result of
confirmatory factor analysis and linear regression analysis indicated that customers perceived
value in banking sector composed of six dimensions; functional value of the establishment.
Functional value of the personnel, functional value of the service, functional value of price
emotional value and social value.
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SCOPE OF THE STUDY
The survey is confined to opinion survey about HDFC Bank Ltd products at Trichy
The study also involves identifying and analyzing the purpose of bank products.
LIMITATIONS OF THE STUDY As the survey has been conducted only on 100 respondents Unwillingness of some respondents to provide information is another limitation. Findings of the study are influenced by personal bias of the respondents. There was a time constraint which disabled a personal interaction with the customers
IV RESEARCH METHODOLOGY
Research Design - Descriptive study
Location - Trichirappalli District (Both Urban and Rural)Sampling technique - Stratified Random Sampling (Data collected from
Customers having Saving Account)
Sample size - 175
Research Approach - Structured questionnaire through Interview Schedule
Sources of Data - Both Primary and Secondary data
Statistical Tools - Inter Correlation, Friedman Rank Test & Regression
V ANALYSIS AND INTERPRETATION
Table 1
Inter Correlation among the various Marketing Strategies and Overall Bank Marketing
Strategy
Functional
Oriented
Strategies
Customer
Relationship
Mangement
Strategies
Infrastru
cture
Strategies
Value
Added
Services
Strategies
Promotion
al
Strategies
Overall
Bank
Marketing
Strategies
Functional
Oriented
Strategies
Pearson
Correlation 1
Sig. (2-
tailed).000
Customer
Relationship
Mangement
Pearson
Correlation .613(**) 1
Sig. (2-
tailed).000
Infrastructur Pearson .269(**) .296(**) 1
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e Strategies Correlation
Sig. (2-
tailed).000 .000
Value Added
Services
Pearson
Correlation .454(**) .337(**) .351(**) 1
Sig. (2-
tailed).000 .000 .000
Promotional
Strategies
Pearson
Correlation.324(**) .270(**) .181(**) .588(**) 1
Sig. (2-
tailed).000 .000 .000 .000
Overall
BankMarketing
Strategies
Pearson
Correlation .677(**) .679(**) .472(**) .656(**) .497(**) 1
Sig. (2-
tailed).000 .000 .000 .000 .000
N 175 175 175 175 175 175
** Correlation is significant at the 0.01 level (2-tailed).
A bivariate correlation was undertaken between the various Marketing Strategies adopted by
Banks. The output confirms that significant positive relationship exists between all the Bank
Marketing Strategies. The relationship between Functional Oriented Strategies towards Customer
Relationship Management (0.613(**)) and Overall Marketing Strategy are highly Positive
Correlated (0.677(**)). The relationship between Functional Oriented Strategy towards Value
added Services Strategy (0.454) and Promotional Strategy (0.323) are Moderately Correlated and
Infrastructure Strategy (0.269) are just correlated with the Functional Oriented Strategy. No
significant negative relationship exists between the various Marketing Strategies and withOverall Marketing Strategy. The CRM Strategy is highly positive correlated with Overall Bank
Marketing Strategy (0.679). CRM is moderately correlated with Value added Services (0.337)
and Infrastructure (0.296) and Promotional Strategy (0.270) are just correlated with the CRM
Strategy. Thus customer Relationship Management Strategy, Functional Strategy and Value
added services Strategy are High Positively correlated towards the Overall Bank Marketing
Strategy.
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AJCUT
Friedman Rank Test
Table 2
Factors influence the Customer Perception towards the Current Marketing
Strategies adopted by banks.Friedman test has been used to find out if there exist a significant difference between the
customer perception towards the factors that influence the Bank Marketing Strategies.
*p
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In the above table, it can be found that there exists a significant difference towards the customer
Perception on the factors that influence the marketing Strategies of Banks. (p-value
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Regression
Regression test was applied to predict the nature and closeness of relationship between BankMarketing Strategy and Respondent Status in the Family, gender, age, educational qualification,
Occupation, Monthly Income. The result found was there is significant association between Bank
Marketing Strategy and Respondent Status in the Family, age, Occupation, Monthly Income. The
other demographic factors like, Gender and educational Level does not influencing Bank
Marketing Strategy. R value indicates the relationship between independent variable and
dependent variable, i.e. the relationship between Respondent Status in the Family, gender, age,
educational qualification, Occupation, Monthly Income and Bank Marketing Strategy in terms
of Percentage. R Square value indicates that the variables explained with the Percentage of
variations towards Overall Bank Marketing Strategy. R Square value for Respondent Status in
the Family is 1.8 %, gender is 0.2%, age is 1.5%, educational qualification is 0.4%, Occupation
is 1%, Monthly Income is 6.2 % of variations towards the Overall Bank Marketing Strategy.
Multiple regression equation Y = X (B value)
Y-----Dependent variable, Here Bank Marketing Strategy is the Dependent Variable
X------Independent variable, Demographic Factors are Independent Variable.
For Respondent Status in the Family, X=-0.158, Gender, X= -.0024, Age, X=0.186
Educational qualification, X=0.09, Occupation, X= -0.141, Monthly Income X= 0.339. If p
value is less than 0.01 or 0.05, then the significant relationship exist between independent
variable and dependent variable. For Respondent Status in the Family, Monthly Income, p value
is less than 0.05 and Age, Occupation, the p value is less than 0.01. So association exist between
Bank Marketing Strategy and Respondent Status in the Family, age, Occupation, Monthly
Income. Regression depends on how and to what extent the demographic variables influencing
the Customer Perception towards the Bank Marketing.
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Demographic factor influencing the Bank Marketing Strategies
Table 4
Demographic
factors
R
value
R
square
value
F
value Constant
Unstanda
rdized
coefficient
(B)
T value
Sig
Marital status 0.204 0.042 21.360 1.727 -0.125** -4.622 0.000
Religion 0.067 0.005 2.244 1.143 0.043 1.498 0.135
Current
Residence 0.115 0.013 6.604 1.997 -0.120* -2.570 0.011
Status of
current
Residence 0.013 0.000 .083 2.230 -0.015 -.0288 0.773
Stay with the
Family 0.047 0.002 1.094 1.102 0.020 1.046 0.296
Possessing a
Own a House 0.020 0.000 .202 1.375 0.012 0.450 0.653
Note: *p
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X------Independent variable, Here Demeographic factors are Independent Variable.
For and Marital Status, X= -0.125 Religion, X= .0043 Current Residence , X=-0.120 Status of
current Residence, X = -0.015, Stay with the Family X=0.020 and Possessing a Own House
X=0.012. If p value is less than 0.01 or 0.05, then the significant relationship exist betweenindependent variable and dependent variable. For Marital Status, p value is less than 0.01 and
Current Residence the p value is less than 0.05. So association exist between Bank Marketing
Strategy and Marital Status and current Residence of the Respondent. Regression depends on
how and to what extent the demographic variables influencing the Customer Perception towards
the Bank Marketing.
Table 5
Current position of the respondent Position influencing the Bank Marketing Strategies
Current
Position of the
respondent
R
value
R
square
value
F
value Constant
Unstandardiz
ed
coefficient(B)
T
value Significance
Paying of
Housing Loan .095 .009 4.431 2.318 -.084*
-
2.105 .036
Critical Stage of
Documentation .057 .003 .273 2.318 -.084 -.522 .603
In which Bank
you have an
account .452 .205 126.37 1.480 .110**
11.24
1 .000
Type of account
with the Bank .127 .016 7.989 1.878 .120** 2.827 .005
Type of dealing
with most
frequented
Bank .233 .054 15.142 2.407 -.083**
-
3.891 .000
Any Other
Bank account .038 .001 .713 2.131 -.058 -.845 .399
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Bank with
Maximum no.
of ATM
Transaction .325 .106 57.943 1.653 .080** 7.612 .000
Frequency of
visit .090 .008 3.968 2.183 -.044*
-
1.992 .047
Note: *p
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how and to what extent the demographic variables influencing the Customer Perception towards
the Bank Marketing.
FINDINGS
Inter correlation coefficient was found among the various dimensions of marketingstrategies like Functional Strategies, Customer Relationship Management Strategies,
Infrastructure Strategies, Value added services Strategies and Promotional Strategies.
Multiple Regression was applied to find out the relationship that exists between theCustomer Perception on Marketing Strategies and the Demographic factors. The result
shows that there exist relationship between the Age of the respondent, Occupation,
Monthly Income, Education Level, Marital Status and Respondents Status in the Family.
Regression test was applied to predict the nature and closeness of relationship betweenBank Marketing Strategy and Respondent Status in the Family, gender, age, educational
qualification, Occupation, Monthly Income. The result found was there is significant
association between Bank Marketing Strategy and Respondent Status in the Family, age,
Occupation, Monthly Income. The other demographic factors like, Gender and
educational Level does not influencing Bank Marketing Strategy.
Regression test was applied to predict the nature and closeness of relationship betweenBank Marketing Strategy and Marital Status, Religion, Current Residence , Status of
current Residence, Stay with the Family and Possessing a own House. The result found
was there is significant association between Bank Marketing Strategy and Marital Status,
current Residence. The other demographic factors like, Religion, Status of current
Residence, Stay with the Family and Possessing a own House does not influence the
Bank Marketing Strategy.
Regression test was applied and the result found was there is significant associationbetween Bank Marketing Strategy and Paying Housing Loan, In which bank the
respondent has an account, Type of account in the Bank, Type of dealing with the Bank,
Bank with Maximum no. of ATM transaction and frequency of visit.. The other factors
like, Critical Stage of Documentation and any other Bank Account does not influence the
Bank Marketing Strategy.
SUGGESTIONS
The customers are very enthusiastic in using more reliable and innovative net bankingservices. So net banking service must be provided with free from cyber crimes.
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The interest rates of frequently changing and the customers get confused with the actualinterest rate at the current date. And the bank must inform each and every customer must
be personally informed about the interest rates.
The customers are not fully satisfied with the speed and quick service of banking. Thismust be formulated and speedy services must be provided to the customers.
Since the different age group of the customers requires different category of productfeatures and services they must be provided accordingly to their expectations.
Periodic meetings must be conducted by HDFC in order to provide necessary informationand details to the customers.
Customer relationship management strategy, functional oriented strategy, value addedservices strategy are the most influencing factors adopted by the banks. Yetinfrastructure and promotional strategies are to be improved in order to delight its
customers.
CONCULSION
As we all know that Indian banks are becoming more and more innovative and gradually
dominating the market. They are capturing market share from their counterpart of the foreign
bank by offering services by an innovative way. Theobservation and findings of the study have
helped to give useful recommendations to bank. The implementation of the suggestion can help
to improve strategies and build competencies over that of their competitors as a straight forward
opinion from a sample of customers have been obtained to make observations.
BIBLIOGRAPHY
Bodla.B. S. (2004)service quality perception in banks . An indian perspective. AnIndian Perspective, Prajnam, Volume XXXIII, Number 4th, PP 321-335.
Jyotsna Sethis & Nishwan Bhatia, (2008) Elements of Banking and Insurance,PHI, New Delhi,
Khan M.Y, (2005), Indian Financial Market: Theory and Practice, Vikas PublishingHouse, New Delhi.
Micheal Porter, (1990) The competitive advantage of nations Harvard Business ReviewMarch-April 1990.P.No 73-93, New Global strategies for competitive advantage,
planning review, May-June 1990.P.N0.4-14
Philip Kotler, Marketing Management, Prentice Hall of India Pvt Ltd, 12 th Edition,2005 John Wiely & sons (Asia) Pvt Ltd, 4thEdition.
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Roig Juan Carlos Fandas, Garcia Javer Sanchez, Tena Miguel Angel Moliner andMonzonis Jaume Llorens (2006), Customer Perceived Value in Banking Services,
International Journal of Bank Marketing, Vol.24.No 5. Pp.266-283
S.M. Jha,(1994) Services Marketing, Himalaya Publishing House, Mumbai, 1994. Saritha. P and P. Mohan Reddy (2009) Marketing Strategies of Financial Services In
Banks- A Comparative Study AJBMR, Volume 4, No.2.
Suresh Chandrasekaran, Anantharaman and Kamalanbhan,(2002) Managementsperception of Total Quality Service in Banking Sector of a Developing Economy, A
critical Analysis, The International Journal of Bank Marketing Volume 20, PP 181-
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WEBSITESwww.wikipedia.com
www.hdfcbank.com
www.google.com
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