Service Marketing

Assignment on
HDFC Bank

Submitted by:

Group 9

Manasi

Nidhi (2966)

Robert

Sweety (2974)

Tushti (2975)
Bank Profile

HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation

Limited (HDFC), India's largest housing finance company. It was among the first
companies to receive an 'in principle' approval from the RBI to set up a bank in the
private sector. The Bank started operations as a scheduled commercial bank in January
1995 under the RBI's liberalization policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged
with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.
Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of
Times Bank.

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

more than 1,000. The amalgamated bank emerged with a base of about Rs. 1, 22,000
crore and net advances of about Rs.89, 000 crore. The balance sheet size of the
combined entity is more than Rs. 1, 63,000 crore

Industry growth rate:

The growth in the Indian Banking Industry has been more qualitative than quantitative
and it is expected to remain the same in the coming years. Based on the projections
made in the "India Vision 2020" prepared by the Planning Commission and the Draft
10th Plan, the report forecasts that the pace of expansion in the balance-sheets of
banks is likely to decelerate. The total assets of all scheduled commercial banks by
end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise about 65 per
cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank
assets are expected to grow at an annual composite rate of 13.4 per cent.

HDFC Bank’s Growth rate

The growth rate for the company during the financial year 2010-11 was around 23.2%.
HDFC Bank’s Market share

Its total market share is around 5.8%.Under Public banks, SBI has the highest market
share while in terms of Private Banks, ICICI bank has the highest market share.

SWOT ANALYSIS:

Strengths: -

1. HDFC is the strongest and most venerable play on Indian mortgages over the
long term. The management of the bank is termed to be one of the best in the
country.
2. HDFC has differentiated itself from its peers with its diversified network and
revamped distribution strategy
3. HDFC has been highly proactive in passing on the cost and benefit to customers
4. Besides the core business, HDFC’s insurance, AMC, banking, BPO, and real
estate private equity businesses are also growing at a rapid pace
5. Right strategy for the right products.
6. Superior customer service vs. competitors.
7. Great Brand Image.
8. Knowledge of Indian market
9. High level of services
10. Products have required accreditation.
11. High degree of customer satisfaction.
12. Good place to work
13. Lower response time with efficient and effective service.
14. Dedicated workforce aiming at making a long-term career in the field.
Weakness: –

1. Some gaps in range for certain sectors.

2. Customer service staff needs training.
3. Processes and systems, etc.

Opportunities: –

1. Profit margins will be good.

2. Growing Indian banking sector
3. Fast growing insurance business in the country
4. People are becoming more service oriented
5. Could extend to overseas broadly.
6. Could seek better customer deals.
7. Fast-track career development opportunities on an industry-wide basis.
8. An applied research center to create opportunities for developing techniques to
provide added-value services.

Threats: -

1. Loss of market share to commercial banks

2. Legislation could impact.
3. Great risk involved
4. Very high competition prevailing in the industry.
5. Vulnerable to reactive attack by major competitors.
6. Lack of infrastructure in rural areas could constrain investment.
7. High volume/low cost market is intensely competitive.
Process:

HDFC Bank is headquartered in Mumbai. The Bank has an network of 1725 branches
spread in 780 cities across India. All branches are linked on an online real-time basis.
Customers in over 500 locations are also serviced through Telephone Banking. The
Bank has a presence in all major industrial and commercial centers across the country.
It has a clearing/settlement bank to various leading stock exchanges; the Bank has
branches in the centers where the NSE/BSE have a strong and active member base.

The Bank also has 5,016 networked ATMs across these cities. Moreover, HDFC Bank's
ATM network can be accessed by all domestic and international Visa/MasterCard, Visa
Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

Besides, HDFC follows a well efficient process in its banking services , it includes,
payment procedures followed at the bank, collection systems, also includes personal
banking for fixed deposits, giving loans to the customers, investments and insurance
services.

Its services also includes, banking facilities for NRI’s, to guide them in their investments,
and transfer of money, also accounts and services.

Their process also included providing whole sale banking services, for corporate, small
and medium scale enterprises, other financial institutions, and government sector.
7Ps of marketing mix usage in HDFC BANK:
PRODUCT: HDFC Bank has saving accounts, current accounts, salary accounts,
recurring deposits, fixed deposits; demat accounts, safe deposit lockers. HDFC
Bank provides loans like Personal Loans , Home Loans , Educational Loans ,Two
Wheeler Loans , New car Loans, Used Car Loans, Overdraft Against Car, Express
Loans, etc. HDFC Bank provides Credit, Debit and Prepaid Cards to help you meet
your financial objectives. HDFC Bank provides facilities like Mutual
Funds, Insurance, General & Health Insurance, Bonds , Financial Planning,
Knowledge Center, Equities & Derivatives. It also deals with the foreign exchange
and NRI services. HDFC provides the customers with good products which gives
them value for the money.

PRICE: prices would include the interest rates, discounts. Fees and commission.
Home loans are available for 9.75% to 10.25 %. Car loans are available for 6%. Fees
and commission include all the processing fees, DD fees, brokerage, fees for RTGS
etc.

PLACE: HDFC Bank has a very good network across the country. So the customers
have the convenience to go to their nearest branch or ATM for transactions. HDFC
Bank has 1,780 branches and over 5,231 ATMs, in 779 cities in India, and all
branches of the bank are linked on an online real-time basis. Customers can open an
account at any branch nearest to his/her residence or office and access it at any
branch in the city or anywhere in the country. This is because of the core banking
solution provided by HDFC bank. HDFC Bank also provides mobile banking and
internet banking facility to the customers for quality and convenience.

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

also to acquire new customers. Example if anyone open a demat account then a
savings account is also provided (3 in 1) accounts. The bank had a promotional
strategy titled as wheels Of Fortune. "This promo was targeted at all those customers
who avail a personal loan, car or two-wheeler loan. There was a lucky draw at the
end of the promo and the winners would get exotic prizes. A school-level painting
competition on wildlife across cities to promote the Kids Advantage account was
organized. They also had mass promotions where in they decide to send personals
mailers to the people they came in contact during the promotion and explain them
about the products.

PEOPLE: people are the most important part of any bank as they are the once who
come into contact with the customers. Interaction between the employees and the
customers decides the fate of the bank, if the customer is happy with the service
provided by the employee then he would be satisfied and retention of the customers
will be easy. The employees should be trained as to how to deal with the customers
and solve their queries. HDFC has very good HR practices. It has won global HR
excellence award for best recruitment, training and employee branding. They have
induction program called swagat where they are provide training about the products
and the bank practices. HDFC focuses not only on hard skills but also soft skills for
better employee development so that they can serve the customers better. They job
rotation to retain the good employees.

PROCESS: The process of HDFC involves all the account opening process, loan
sanction process, insurance claim process etc. In the bank also there is a certain
process followed to serve the customers. Everything thing is done timely and
accurately. Customers do not have to wait in the queue, they have to take the token
and wait for their turn, there is no chaos in the bank. Everything is done smoothly.

PHYSICAL EVIDENCE: It includes the atmosphere in the bank, the bank logo, the
lighting, and other tangibles. The HDFC bank logo is:
The atmosphere is good in the branches. The employees are dressed in formals with
their ID cards. The pictures below are the HDFC interiors.

The Service Triangle:

HDFC Bank has positioned itself as a bank which gives higher standards of services
through product innovation for the diverse needs of individual and corporate clients. So
they highlight the following points in their positioning segment:

 Customer Centric
 Service Oriented
 Product Innovation

Organisation
Organisation

Internal Traditional
marketin marketing
g
Satisfaction; Quality;
Brand Loyalty

Employees
Employees Relationship management Customers
Customers
Traditional Marketing:

These involves the marketing initiatives to attract the customers towards its product or
service. It involves the promise by the organization to its customers in regards of high
quality. HDFC first believes in creating awareness about its products: Therefore:

 They demonstrate the advantages of net banking and mobile banking, as these
concepts are relatively new to people living in smaller towns and cities.

 The bank has also launched another initiative called Business Ki Baten, which is
targeted at areas where the bulk of the population comprises small businessmen.

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

measure the efficacy of the campaigns, test every campaign at each and every
step, experiment with creatives and media. There are learnings that can
immediately be incorporated into the next campaigns.

 These campaigns provide them with information about customer preferences that
can be used for mass media communication, making it more effective.

Internal Marketing:

When we talk about internal marketing we know that here the employees are treated
as internal customers. HDFC has been awarded the “Best Employer”.

 Their induction program - Swagat - covers products and business of the bank. It
is focused on developing skills and values.

 Four years ago they started an internal employee referral program called ‘Karo
Sifarish’. It has become one of their most preferred channel and contributes
significantly to talent acquisition.

 They organize various programs including outbound experiential learning, Open

Spaces Technology, Personal Effectiveness, Leadership, Excellence, art of
living, Vedanta, etc.
 HDFC Bank uses incentives in structuring compensation packages and have
established a performance-based bonus scheme under which permanent
employees have a variable pay component of their salary.

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

provident fund and other employee benefit plans.

 They have also set up a superannuation fund to which they contribute defined
amounts. In addition, they contribute specified amounts to a gratuity fund set up
pursuant to Indian statutory requirements.
 They focus on training their employees on a continuous basis. They have a
training center in Mumbai, where they conduct regular training programs for their
employees. Management and executive trainees generally undergo up to eight-
week training modules covering every aspect of banking.

 They offer courses conducted by both internal and external faculty. In addition to
ongoing on-the-job training, they provide employees courses in specific areas or
specialized operations on an as-needed basis.

 HDFC Bank believes in work place transformation. They believe that “Small
changes can lead to large improvement. They follow the Japanese technique
for smooth running of work and effective work place organization. The “Kaizen”
technique consisting of “5S” is used by HDFC.

Five S include:

Sort: Eliminating unnecessary things from the work place.

Systematize: Efficient and effective storage method. Good labeling and

identification practices.

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

ownership.

Standardize: It means simplification, standard rules and policies.

Sustain: Regular training to maintain standards. It brings in self discipline and

commitment toward work place organization.
Relationship Marketing:
The employees are trained in a way which helps to treat their customers as “Kings”.
They follow the 9R’s while interacting with customers:
1. Rapport
2. Respect
3. Rescue
4. Responsiveness
5. Re-enforcement
6. Reputation
7. Referrals
8. Reviews
9. Reciprocity

CUSTOMER SERVICE

Customer Service is the service provided in support of a company’s core products.

Customer Service most often includes answering questions, taking orders, dealing
with billing issues, handling complaints, and perhaps scheduling maintenance or
repairs. Customer Service can occur on site , or it can occur over the phone or via
the internet. Many companies operate customer service call centers, often staffed
around the clock. Typically there is no charge for customer service. Quality customer
service is essential to building customer relationships. It should not, however, be
confused with the services provided for sale by a company. Services tend to be more
intangible than manufactured products. There is a growing market for services and
increasing dominance of services in economies worldwide.

There are generally two types of customer expectations. The highest can be termed
as desired service: the level of service the customer hopes to receive. The threshold
level of acceptable service which the customers will accept is adequate service.

Yet there is hard evidence that consumers perceive lower quality of service overall
and are less satisfied.
Possible reasons might be:

 With more companies offering tiered service based on the calculated

profitability of different market segments, many customers are in fact getting
less service than they have in past.
 Increasing use by companies of self-service and technology-based service is
perceived as less service because no human interaction or human
personalization is provided.
 Technology-based services (Automated Voice Systems, Internet-Based
Services, and Technology Kiosks) are hard to implement, and there are many
failures and poorly designed systems in place.
 Customer expectations are higher because of the excellent service they
receive from some companies. Thus they expect the same from all and are
frequently disappointed.
 Organizations have cut costs to the extent that they are too lean and are too
understaffed to provide quality service.
 The intensely competitive job market results in less skilled people working in
frontline service jobs; talented workers soon get promoted or leave for better
opportunities.
 Many companies give lip service to customer focus and service quality; but
they fail to provide the training, compensation, and support needed to actually
deliver quality service.
 Delivering consistent, high-quality service is not easy, yet many companies
promise it.

The gaps model positions the key concepts, strategies, and decisions in services
marketing in a manner that begins with the customer and builds the organization’s
tasks around what is needed to close the gap between customer expectations and
perceptions.
The central focus of the gaps model is the customer gap, the difference between
customer expectations and perceptions. Firms need to close this gap- between what
customers expect and receive – in order to satisfy their customers and build long
term relationships with them. To close this all important customer gap, the model
suggests that four gaps- the provider gaps- need to be closed.

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

 Gap 1: Not knowing what customers expect.

 Gap 2: Not selecting the right service designs and standards.
 Gap 3: Not delivering to service standards.
 Gap 4: Not matching performance to promises.

Gap 1: Not knowing what customers expect:

 Inadequate marketing research orientation

 Lack of upward communication
 Insufficient relationship focus
 Inadequate service recovery
 Type 1 (Not knowing what customers expect) between the bank management
perceptions & customers perceptions; where in it could be a result of ineffective
management of customers expectations or it could be due to lack of
communications as some of the customers also lack the knowledge of
understanding.
 Type1 Gap (Not knowing what customers expect) which is existing, where in
inadequate marketing research & orientation is not done matching the customers
expectations.

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

 Poor service design

 Absence of customer-driven standard
 Inappropriate physical evidence and services cape

 The management and the customer’s perceptions are matching to some extents
in the case of comfort facility provided by the banks. It is observed that public
sector banks tend to ignore these services where as private banks think that
providing such facilities will make a positive impact on customers.
 In the case of ATM service there is little gap because of technological
advancements, today most of the ATM centers can be shared by customers of all
banks. But were debit /credit card service is concerned there is huge gap due
to the hidden costs that are imposed on customers by some of the banks.
 In disbursing and processing loans banks have to follow very strict steps
hence time taken is more due to which a huge Gap is observed by customers.
 Phone/net banking are new facilities hence little gap is observed in perceptions.

Gap 3: Not delivering to service standards.

 Deficient in human resource policies

 Customers who do not fulfills roles
 Problems with service intermediaries
 Failure to match supply and demand

 The gap between the management and the customer’s perceptions is mostly
because some customers feel that bank management is not responding fast but
the management says it has to follow the standardized procedures in various
types of queries, hence the slow response. This is basically Type 3 Gap (Not
delivering to the service standards) where in the reason could be failure to match
supply & demand and the problems with service intermediaries.
 Due to introduction of new core banking technology transaction time has
reduced significantly, still some of the customers during the survey complained of
long transaction time. This is because of Type 3 Gap (Not delivering to the
service standards) where some customer do not fulfill their roles ie. they are in a
 hurry to have their work done with high expectations towards management and
some times this also results due to managements failure to match supply and
demand.

Gap 4: Not matching performance to promises.

 Lack of integrated services marketing communication

 Ineffective management of customer expectation
 Over promising
 Inadequate horizontal communication

 Contradicting the managements promise the customers feels that banks are not
keeping the customers well informed about the changing deposit & service
charge rates .Such a gap is result of Type 4 Gap where in inadequate horizontal
communications & ineffective management of customer expectations is
experienced.
 In case of entertaining the grievances of the customers and the grievance
redressal systems is concerned there is a huge gap between the customers &
banks perceptions. This could be due to Type 4 Gap where in banks are
deficient in human resources policies, their over promising nature about the
services and ineffective management of customers expectations is experienced.