PRESENTATION ON

T HARI KUMARROLL NO: 131449

MERCHANT BANKING is defined as…

“an institution which covers a wide range of activities suchas management of customer services, portfoliomanagement, credit syndication, acceptance credit,counselling, insurance etc.”

Need for merchant banking was felt with rapid growth innumber & size of issues made in primary market.

Merchant banking services were started by foreignbanks, during in 1967 & in 1970 .

Merchant banking services were offered along with othertraditional banking services.

SBI was first Indian bank to set up Merchant bankingdivision in 1972.

MERCHANT BANK INVESTMENT BANK

Expand into the field of Securities underwriting.

Participate in Trade Financing activities.

Focus on Small Scale Companies and offer Creative Equity Financing.

Focus on IPO’s (Initial Public Offerings), and Large Public and Private Share Offerings.

Provide service to Small and Medium Institutes.

Provide service to Larger Institutes

Sr No Particulars Summary

1 Corporate Counseling Covers the entire field of merchant banking, Ltd to giving suggestions

2 Project Counseling Preparing project report for govt. approval , financial assistance

3 Loan Syndication Assistance rendered to get term loan for project, help client make appraisal, designing capital structure

4 Issue Management Marketing corporate securities, intermediary in transfer of capital from one who owns to needy

5 Underwriting Guarantee given by the underwriter, make raising of external resource easy

6 Managers to Issue Drafting, completion of formalities, appoint Registrar

7 Portfolio Management Investment in different kind of securities

8 Mergers and takeovers Middlemen in setting negotiation

9 Off Shore Finance Help in areas involving foreign currency

10 Non- Resident Investment

Provide help in better and smooth trade to NRIs

ARTICLE DETAILS

TOPIC :- Marketing effectiveness in merchant banking services - a comparative study of public

and private sector.

AUTHOR :- Alka Sharma

SOURCE :- Journal of Services Research, Volume 2, Number 2 (October ‘02-March, 2003)

© 2002 by Institute for International Management and Technology.

A number of developments took place in the financialmarkets, which increased the importance of financialintermediaries and also opened up the opportunity forgrowth and development of various financial services. As aresult, there has been a qualitative shift in the financialservices being provided.

The main objective of the study was to analyze therelevance of marketing mix in the merchant bankingservices and also make a comparative analysis of itseffectiveness in public as well as in the private sectormerchant banks.

To conduct this comparison between private & public fourorganizations. They choose two firms from the public and privatesector.

SBI Capital Markets Ltd.

Industrial Securities and Finance Company Ltd.

DSP – Merrill Lynch & Kotak Mahindra Capital

The primary data was collected by conducting the interviews ofthe managers.

The secondary data was collected from the annual reports, articlesin magazines and newspapers as they featured contemporarytrends and developments.

For analyzing the marketing mix, five elements were studied to reach at conclusions.

Elements of Marketing Mix Attribute Weight Co - Efficient

Product 0.3Price 0.2Place 0Promotion 0.1People 0.4

Comparison on the Basis of Product

Comparison on the Basis of Price

Elements of Marketing MixAttribute Weight Co -

EfficientElements of Marketing Mix

Attribute Weight Co -Efficient

SBICAP 0.5 SBICAP 0.33

I – Sec 0 I – Sec 0DSP – ML 0.33 DSP – ML 0.33KMCC 0.17 KMCC 0.33

Comparison on the Basis of Place

Comparison on the Basis of Promotion

Name of the Organisation Attribute Weight Co -

EfficientName of the Organisation

Attribute Weight Co –Efficient

SBICAP 0.33 SBICAP 0.33I – Sec 0 I – Sec 0.17DSP – ML 0.33 DSP – ML 0.17KMCC 0.33 KMCC 0.33

Comparison on the Basis of PeopleName of the Organization Attribute Weight Co – Efficient

SBICAP 0.33I – Sec 0

DSP – ML 0.33KMCC 0.33

Comparison of organizations under each element (P’s)

PRODUCT PRICE PLACE PROMOTION PEOPLE TOTAL

ATT. WGT. EFFI 0.3 0.2 0 0.1 0.4 1

SBI CAP 0.5 0.33 0.33 0.33 0.33

WEIGHT 0.15 0.07 0 0.03 0.13 0.38

I-SEC 0 0 0 0.17 0

WEIGHT 0 0 0 0.02 0 0.02

DSP-ML 0.33 0.33 0.33 0.17 0.33

WEIGHT 0.1 0.07 0 0.02 0.13 0.32

KMCC 0.17 0.33 0.33 0.33 0.33

WEIGHT 0.05 0.07 0 0.03 0.13 0.28

INTERPRETATIONFrom the values calculated above, it can be inferred that since thecalculated value ‘F’ for the public sector merchant banks is higher than thetabled value therefore, the hypothesis that there is no significant differencein the marketing efficiency of public and private sector merchant banks isrejected. However, the ‘F’ value for private sector at 0.2 reflects that themarketing efficiency of private sector is higher than the public sector.

It was found in the study that there is the presence ofrelevancy in the concept of Marketing Mix in this financialinstitutions.

With the growth and development of merchant bankingservices in the changed scenario, fierce competition hasemerged in the sector.

The research indicates that the people element is the mostimportant component of marketing mix, followed byproduct, price and promotion respectively.