Abhishek Tiwari Major Research Project Kotak Mahindra Bank
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kINSTITUTE OF MANAGEMENT STUDIES DAVV, INDORE(M.P)
MAJOR RESEARCH PROJECT ON Customer Retention Strategy of Kotak Mahindra Bank, Indore
A Dissertation Submitted in Partial Fulfillment of the Requirement for the award of Degree of MBA
Guided by:Dr. P.N. Mishra
Submitted by:Abhishek Tiwari MBA FULL TIME
I am thankful to Dr. Rajendra Singh, Director Institute Of Management Studies IMS (DAVV) Indorefor providing me the opportunity to carry out the research on Customer Retention Strategy Of Kotak Mahindra Bank, Indore.
I express my deepest and most sincere thanks to my mentor Dr. P.N. Mishra of Institute of Management Studies IMS (DAVV), Indore for providing the guidance and helping me in conducting the research.
The project would not have completed without the hearty support and guidance of Mr. Shafeequddin Khan, Relationship Manager Kotak Mahindra Bank, Indore.
I also take this opportunity to thank all the employees and customers of Kotak Mahindra Bank, Indore, without their Co-operation the project would have not been completed.
Abhishek Tiwari Institute Of Management Studies, Indore
I hereby declare that the research entitled Customer Retention Strategy Of Kotak Mahindra Bank, Indore is the result of my sincere effort. This major research project report is being submitted by me alone, at Institute of Management Studies, Indore, for the partial fulfillment of the course MBA (FULL TIME) and the report has not been submitted to any other educational institution for any other purpose.
This is to certify that Mr. Abhishek Tiwari, student of MBA (Full Time) program of Institute Of Management, Indore has completed his major research project on Customer Retention Strategy Of Kotak Mahindra Bank, Indore. and prepared this report under my guidance.
Dr. P.N. Mishra (Faculty Guide)
CONTENTS EXECUTIVE SUMMARY
DATA ANALYSIS, RESULTS AND FINDINGS
CONCLUSION AND RECOMMENDATIONS
LIMITATIONS AND SAMPLE QUESTIONNAIRE
REFERENCES AND BIBLIOGRAPHY
The project is based on th e Customer Retention Strategy of Banking Organizations with special reference to KOTAK MAHINDRA BANK a n d t h e c u s t o m e r s a s w e l l a s e m p l o ye e s p e r c e p t i o n a b o u t t h e s a m e . First and Foremost, the purpose of KOTAK MAHINDRA BANK is to fulfill the needs for investment under one roof with an equal blend of Standardization along with Customization . This project shows the importance of customer retention as a strategy for the success of a banking organization. It gives the d etail view of the various parameters that a bank should keep under consideration in order to ensure customer retention. The focus is on the fact that ensuring maximum customer s a t i s f a c t i o n a n d e a r n i n g t h e i r l o ya l t y i s t h e k e y t o s u c c e s s i n t h e h i g h l y c o m p e t i t i v e b a n k i n g i n d u s t r y. The project depicted the importance of various parameters and also tried to fill the knowledge gap regarding the fact ors that e n s u r e b e t t e r s e r v i c e q u a l i t y a n d c u s t o m e r l o ya l t y. T h e p r o j e c t a l s o e m p h a s i z e d t h e i m p o r t a n c e o f a n e m p l o ye e customer participatory process with customer satisfaction as a p e r f o r m a n c e e v a l u a t i o n c r i t e r i o n f o r a n e m p l o ye e o f t h e organization. The project clearly depicts that the customer satisfaction level of Kotak Mahindra Bank is quite impressive and hence it has been able to enjoy life time membership of its existing members and hence is having a clear cut competitive advantage of customer l o ya l t y o v e r i t s c o m p e t i t o r s w h i c h i s t h e m a i n d r i v e r f o r i t s h u g e s u c c e s s s t o r y o n l y i n a p e r i o d o f 8 ye a r s o f i t s i n c e p t i o n .6
Further to this, project proceeds with the research designed in the light of the core objectives of the study along with the sub objectives that are given due consideration throughout the research. It also enlists all the data sources as to by which means the study has gained momentum. The data has been collected by virtue of questionnaires a n d w e b s i t e s , r e s p e c t i v e l y. T h e s c o p e o f t h e s t u d y i s s u g g e s t e d i n favor of the companies st riving to emerge as super power drawn out by t h e s u r v e y. H e n c e , t h e c o m p a n y c a n f i n e t u n e i t s p r o s p e c t i v e s t r a t e g y of customer retention and can grab the opportunities of transforming the weakness of other into its own strength.
CHAPTER 1 INTRODUCTION
INTRODUCTION CUSTOMER RETENTION STRATEGY OF KOTAK MAHINDRA BANK, INDOREIn this study, I have conducted a research on the customer satisfaction level of Kotak Mahindra Bank through a descriptive study conducted in the Indore branch of Kotak Mahindra Bank. A structured questionnaire is used to generate the feedback from the customers, employees and other marketing intermediaries. On the analysis of this structured questionnaire, i am able to draw a conclusion regarding the customer retention strategy and its effectiveness in creating and sustaining customer satisfaction by Kotak Mahindra Bank.
MOTIVATION FOR THE TOPIC:In the present scenario, banking sector in India isemerging as the most developing sector of the economy with all the Multinational banks entering the country. Hence, being a prospective manager with my field of interest in the banking industry and the tremendous growth potential in the banking industry of our country, I got motivated to work on a topic that can result into an effective learning of this country. The main motivation for the topic lies in the fact that:-
The banking industry is highly competitive, with banks not only competing among each other but also with non-banking and other financial institutions. Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in todays everincreasing banking competitive environment.
EXPLAINATION OF CONCEPTS ENTAILED: -The main concept entailed in ourstudy is that customer retention is more profitable strategy rather than new customer acquisition. It is more economical to keep existing customers than to acquire new ones. The cost of acquiring customers to replace those who have been lost are high. This is because the expense of acquiring customers is incurred only in the beginning stages of the customer relationship. In addition, longer term customers buy more and, if satisfied, may generate positive word of mouth promotion for the company. Additionally, long term customers also take less of the company time and are less sensitive to price changes. Customer retention refers to keeping a clients business rather than have the client use competitors services or products. Business want to reduce customer defections to their competitors because a reduction in their market share and profits could result. Customer service retention is a popular marketing strategy as it involves focusing on meeting or exceeding clients expectations in order to maintain their loyalty. When people feel loyal to a certain brand or business, they are less likely to be persuaded by a competitors ads and offers. Maintaining customer retention through loyalty programs is a method commonly used by many businesses today. The structured questionnaire is prepared on the basis of the concept given by Parasuraman.
BRIEF HISTORY REGARDING THE TOPIC: - Previous studies have identifiedthe benefits that customer retention delivers to an organization (Colgate et.al, 1996; Reicheld and Sasser, 1990; Storbacka et.al; 1994) For Example: - The longer a customer stays with an organization, the more utility the customer generates (Reichheld and Sasser, 1990). This is an outcome of a number of factors relating to the time the customer spends with the organization. These include the higher initial costs of introducing and attracting a new customer, increases in both the value and number of purchases, the customers better understanding of the organization, and positive word of mouth promotion. Apart from the benefits that the longevity of customers bring, research findings also suggest that the costs of customer retention activities are less than acquiring new customers. For Example, Rust and Zahorik (1993) argue the financial implications of attracting new customers may be five times as costly as keeping existing customers. Customer satisfaction leads to customer retention. As a consequence, retaining customer becomes a priority. In the banking industry, many banks are providing more or less the identical products for nearly the same price. Unless a bank can extend its product quality beyond the core service with a additional and potential service features and value, it is unlikely to gain a sustainable competitive advantage (Chang, Chan, and Leck, 1997)
MY MOTIVATION FOR THE TOPIC: -I have chosen this topic as a dissertation forMajor Research Project because of my i