EFFECTIVENESS OF STRATEGIES IN BANK...

CHAPTER FOUR

EFFECTIVENESS OF STRATEGIES IN BANK MARKETING

Liberalisation of' Indian economy brings a new turn in Indian

banking system as a result of which banks are initiating the required

changes in their strategic decisions. An overview of marketing plan for

the bank~ng services is; essential to simplify the task of formulating a

sensitive marketing strategy inorder to make services internationally

competitive. For that they have to think of formulating their marketing

plans. The first thing they need to establish is what business they are

really in. If the banking organisation identifies their business incorrectly

or defines their market too narrowly, they run the risk of misjudging the

customers. This results in the formulation of appropriate strategies.

Banking organlsations like other organisations do not operate in

isolation. The activlty of competitors is a major factor determining

success or failure. Organisations thrive where the intensity of

competition is low. Conversely, the high intensity of competition forces

an organisation to adopt measures making it difficult to maintain the

143

commercial viability. The marketing plan makes it easier to identify the

intensity of competition and to formulate the marketing strategy

accordingly. The banking organisation at the very outset is supposed to

know its strength. This would help it in formulating a strategy

instrumental in enriching the business potential to offer something new

or to make things happen. In the formulation of productlservice mix

additional attraction mould be required to be included to excel

competition. In the 2 I " century, the intensity of competition is expected

to be at its peak. The technological sophistication is to gain momentum

and the expectations of customers would also be high. The

opportunities would be in the marked and the banking organisations

rdentify~ng the same in the right way and formulating plan accordingly

would thrive. Tile emergence of corporate culture and the increasing

impact of the same on the behavioural profile of customers would

necessitate innovative strategy.

Before formulatilng the strategy, it is essential that the bank must

identify its objectives. Objectives are the basic purposes of its existence

which it strives to achieve. For macro level there is no such difficulty

because they have a team of experts at the apex level for that purpose

144

itself. But the task is found difficult at branch level or micro level, when

they lack expertise anti infrastructure. The marketing objectives and

broad dlrect~on flow 1ko1n the apex level in the form of guidelines and

priority order. At the branch level, it is the responsibility of the branch

managel- to formulate a plan for achieving goals set by the branch itself.

It is agalnst this background that a detailed study about the effectiveness

of marketing strategies adopted by the branch towards exploring

profitable opportunities, helpful to policy makers, attaining target and

better management has been studied. The data contained in Tables 4.1

and 4.2 give the outconle ofthe study about the marketing strategies for

exploring profitable opportunities location wise and region wise.

Table 4.1

Effectiveness of marketing strategies adopted by Bank in exploring

profitable opportunities - Location wise

(Figures in percentage)

--

Semi-urban 2.22 76.67

Rural 5.56 57.78

Satisfactory I Poor 1 Very poor 1 Total 1

Pearson Chi-square: 15.5406, df=6, p=,016462

I 1 Total : 1 2.96 1 6 2 . 9 6 I. _ _ -

30.75

Source: Field survev 3.33 0.00 100.00

Table 4.2

Effectiveness of marketing strategies adopted by Bank for exploring

profitable opportunities - Region wise

The data contained in the Table discloses that there is statistically


significant relation between location and strategies adopted for

exploring profitable opportunities. 62.96 per cent of the bank personnel

~ ~

Satisfactory

44.44

78.80 18.89

Southern 2.22 64.44 28.89

Total 2.96 62.96 30.75

opined that strategies adopted by bank for exploring profitable

Source: Field survey Pearson Chi-square: 22,9491, df=6, p=,000816

Very poor

0.00

0.00

0.00

0.00

Poor

4.44

1.11

4.44

3.33

opportun~ties come urtder the category of 'good' in location wise.

Total

100.00

100.00

100.00

100.00

Among the locations, semi-urban area comes first (76.67%) in this

regard.

In region wise analysis also it was found that there is statistically

significant relation between the region and the strategies adopted by the

bank for exploring prclfitable opportunities. In region wise, the bank

personnel opined that the strategies adopted by the banks for exploring

146

prolilrtble opportunit~cs come undcr thc catcgory of 'good'. And among

the regions, central region comes first in this regard (78.89 per cent). It

is a fhct that in Kerala, central region comes first for business and

industrial activities and for giving special emphasis to drafting and

implementing strategies for maximum benefits to bank. Studies also

reveal the effectiveness of the strategies.

The second aspect taken for study is whether marketing strategy

is helpful to policy makers. The data contained in Tables 4.3 and 4.4

give the outcome of the study

Table 4.3

Effectiveness of marketing strategies adopted by Bank for

policy makers - Location wise


Location Excellent Good

-

Semi-urban -- .-

I Rural 2.22 52.22

. Pearson Chi-square: 12,2203, df=8, p=,141690

I Total 1 1.48 ( 52.22 ( 43.71 ( 1.11 ( - - - 1.48

Satisfactory

45.56

44.45

41.12

100.00 Source: Field survev

Poor

2.22

1.11

0.00

Very poor 0.00

0.00

4.44

Total 100.00

100.00

100.00

Table 4.4

Effectiveness of marketing strategies adopted by Bank

for policy makers - Region wise


Pearson Chi-square 15.5480, df=8, p=,049365

Region Excellent Good 1 Satisfactory

Northern ~- k i - ~ k - + 4 5 . 5 6 3..>3 --

Central 0.00 t 53.33 46.67

Southern 57.78 38.89 - ~. ~~

Total 43.71 -

The data furnished in the Table reveals that there is no statistically

significant relation between the location and the strategies adopted by

banks which are helpful to policy makers. The Table further discloses

that more than 95 pel cent are of the opinion that the effectiveness of

strategies adopted by banks which are helpful to policy makers are

within the category ot' either good or satisfactory. Out of this, more than

52 per cent opined that it is 'good'. Furthermore the effectiveness of

strategies helpful to policy makers are the same in all locations.

In region wise analysis, the information contained in the Table

shows that there is statistically significant relation between the region

and the strategies adopted by banks which are helpful to policy makers.

The data contained in the Table also reveals that the effectiveness of

strategy as far as it helps policy makers came under the category of

source: Field survey

Poor

1.11

0.00

2.22

1.11

Very poor

4.44

0.00

0.00

1.48

Total

100.00

100.00

100.00

100.00

'good', and among the regions Southern region comes first in this

regard.

'l'hc: third aspect taken for study is thc effectiveness of strategy for

attaining target. The data contained in Tables 4.5 and 4.6 give the

outcorne of the study in location wise and region wise.

Table 4.5

Effectiveness of inarketing strategies adopted by Bank for

attaining target - Location wise


/ Location Excellen,: Good I Satisfactory I Poor 1 Very poor 1 Total I

Table 4.6


attaining target - Region wise


Semi-urban -

Rural 5.56 52.22 ~ -

Total 2.59 58.52

Very poor I Total

1.11 1 100.00 1 Central 1 0.00 1 63.33 1 35.56 0.00 1.11 100.00

Southern 0.00 65.56 1 32.22 1 1.11 / 1.11 1 100.00

Source: Field survey Pearson Chi-square. 10,5344, df=8, p=,229545

35.56

35.56

38.89

36.67

I Total 1 2.59 1 58.52 / 36.67 1 1.11 1 1.1 1 1 100.00 1 Source: Field survey

2.22

0.00

1.1 1

1.11

Pearson Chl-square. 20,5512, tlf=8, p=,008455

1.11

0.00

2.22

1.11

100.00

100.00

100.00

100.00

149

The data furnished1 in the Table reveals that there is no statistically

significant relation between location and effectiveness of strategy

adopted for attaining target. The information contained in the Table also

shows that more than 58 per cent of the bank personnel opined that the

effectiveness of the strategy adopted for attaining target comes under the

category of 'good'. The percentage of effectiveness of strategy is

somewhat equal both in Urban and Semi-urban area, that is, 62.22 per

cent in Semi-urban and 61.1 1 per cent in Urban area. But the

percentage of effectiveness comes around to 52 per cent only in rural

area.

In region wise analysis, the Table reveals that statistically

significant relation does exist between the region and the effectiveness

of strategies adopted by banks for attaining target. As far as the

effectiveness of the strategies adopted by bank is concerned, more than

58 per cent of the bank personnel opined that it comes under the

category of 'good'. Aniong the regions, the southern region comes first

and the northern region,, next.

The last aspect taken for the study is the effectiveness of

marketing strategies adopted by banks for better management. The data

contained in Tables 4.'7 and 4.8 disclose the outcome of the study in

location wise and region wise.

Table 4.7


better management - Location wise


Table 4.8

-

Location Excellent 0.00

Semi-urban 2.22

Total


bette:r management - Region wise

Good 57.78

78.89

Source: Field survey Pearson Chi-square 22,0536, df=8, p=,004828

58.89

65.19


Satisfactory 35.56

16.67

33.33

28.52

The data furnished in the Table reveals that statistically

significant relation exists between location and the strategies adopted by

the bank for better management. More than 65 per cent of the bank

personnel opined that marketing strategies adopted by the bank for

better management is 'good'. And among the locations, semi-urban area

Region Excellent Northern

Central --

Southern 2.22

Total 2.59

Poor 4.44

2.22

0.00

2.22

Source: Field survey Pearson Chi-square: 15,1234, df=8, p=,056831

Good 55.56

66.67

73.34

65.19

Very poor 2.22

0.00

2.22

1.48

- Total 100.00

100.00

100.00

100.00

Satisfactory 34.44

32.22

18.89

28.52

Poor 2.22

1.11

3.33

2.22

Very poor 2.22

0.00

2.22

1.48

Total 100.00

100.00

100.00

100.00

151

comes first in this regard. The data contained in the Table discloses that

for better management, the same type of strategies are not sufficient in

location wise.

In region wise analysis, the Table shows that there is no

statistically significant relation between the region and the strategies

adopted by the bank fior better management. More than 65 per cent

opined that the effectiveness of the strategy adopted by banks for better

management comes under the category of 'good'. But the effectiveness

of strategy is variating, in region wise. Among the regions, Southern

region comes first and Northern region is the last.

L Location

Exploring profitable opportunities

Effectiveness to policy makers

Figure 4.1 Effectiveness of marketing strategies - bank personnel

Region

Attaining target

Better management k----

The economic reforms which were implemented in India in the

early 90's have brought new challenges to the industrial, banking and

financial sectors. Rapid and volatile changes in business conditions,

progressive deregulation and liberalization that has resulted in cut throat

competition, growing customer sophistication and expectation have

Good

Good

Good

Good

Good

Good

Good

Good

placed great challenge before Indian banks. As a part of reforms,

liberalization has kepi tighter prudential norms, demands more

transparency in banking; business, offers interest rate deregulation and

provides enough functional autonomy to banks.

The liberalized ec;onomic reforms proves beneficial to banks only

when required adjustment and proactive measures are taken by the

banks in developing their products and services coupled with adoption

of relevant marketing strategy. As human requirements are changing

due to economic changes, requirements of banking products and

services need to undergo changes leading to innovation in the banking

product and services. hdodifying products and services are possible only

by sensing the requirements of customers. This is attained only by

directly interacting with customers and through bank personnel who are

in close touch with customers. For the study, interview schedules were

developed on the basis of pilot study. Interview schedules were

prepared both for bank personnel and bank customers separately.

Further, for studying common aspects the same questions were included

in both the interview schedules, along with other questions which are

either for bank personnel or customers exclusively. In this chapter, the

study is based on the information collected from both the bank

personnel and the bank customers.

153

A new way of business techniques evolved when businessmen

began to recognise that marketing concept includes market orientation,

profitable sales volumes and co-ordination of marketing activities. The

marketing concept is a c:ustomer needs and wants orientation, backed by

integrated marketing efforts aimed at generating customers' satisfaction

which is considered to be the basis for satisfying organisational goals.

Marketing principles, if practised in the right fashion, bear the efficiency

of enriching the business potentials, satisfying the customers and

serving the social interest. The innovation in this perception becomes

essential in order to thlz changing needs and requirements of the users

belonging to different segments. It is against this background that an

attempt was made to identify the expected benefit of bank marketing in

Kerala. Generally accepted benefits in marketing are really applicable

to bank marketing also. The accepted benefits are understanding

customers, satisfying customers, excelling competition, formulating

product mix and social (orientation.

Understanding Customer

The customer is .the king. He is the final arbiter, the only person

who will decide the success or failure of an organisation. The customer

is therefore the important and motivating force of an organisation and

154

any company which forget this lays itself open to future shocks and the

admittance of competitors. As soon as the organisation loses interest in

the customer and his need and expectations, the countdown of failure

starts clicking. Any claim that one completely understands customers

would be off the mark blecause of the complexities of human behaviour.

Instead of completely understanding the customer, a more modest target

would be reducing the area of ignorance about him. All this is true in

the case of banking sector also.

The concept of bank marketing is well supported by sophisticated

information technologies. In an age of information explosion, the

banking sector depends on the marketing information system. With the

help of different sub-systems and to be more specific with the

instrumentality of market research, the banker gets an opportunity to

study and understand the changing levels of the expectations of

customers. By intensifying research, it is easy to identify the magnitude

or emerging new trends. The life styles, likes and dislikes, preferences

attitudes or the behavioural profile cannot remain static. The

multidimensional developments in the business environment influence

the process of change. If the professionals perceive the emerging

changes in a right way, tlhe marketing decision can be made pro-active.

155

The marketing practices simplify the task of formulating creative

policies and strategies which contain more sensitivity. The degree of

success would be in direct proportion to the degree of understanding

customers. It is against this background that the banking organisation of

today needs to practise marketing.

Satisfying the customer

Customer satisfaction has always been a principle element of the

marketing concept. Marketing expert J.B. Mc Kitterick said that under

marketing concept, it i:s not important to be skilful in making the

customer do what suits the interest or convenience of the firm but to be

skilful in inducing the firm to do what suits the interest of the

customers'. In almost all organisations, the first and foremost task is to

satisfy the customers. If the organisation understands customers in a

right perspective, the success rate reaches its peak. If the marketing

process helps in understanding the customers, the task of satisfying them

is made easier. The formulation and innovation processes of the

marketing mixes move in a right and desired order. The customers get

the services in tune with their changing requirements, which help banks

in expanding the market, increasing the marketing share and activating

the process of mobilising the savings and deposits. The process of

excelling competition is geared up and profitability is maximised.

Excelling Competition

The nature of competition is an important factor that determines

the bank's pos~tion i n the competitive market. Modem marketing

principles are conceptualised in the banking organisation with the motto

of excelling competition. Of late, the intensity of competition is found

moving upward. Even the banking organisations have been facing

numerous problems of competition. The leading foreign banks have

made the business environment so competitive that the task of excelling

competition is found difficult to the banks. But if they practise

marketing and keep on moving the process of innovation then the bank

would find it easier to excel competition. Actually this makes it

essential to practise marketing principles. As the banks in Indian are

working in a regulated environment, the need of the hour is to enrich the

peripheral services of the banks so that the mobilisation process gains

momentum. It is important to mention that the leading foreign banks

have been found promoting the use of new technologies to improve the

quality of their services. But the Indian banks found it very difficult to

practicalise the same in the same pace due to protest £rom several

157

comers. The applicatioii of marketing principles would help banks to

cxccl competition and also to optimisc the ultimate goal of thc bank.

Formulating Product NIix

Product is the most important variable in marketing. The first

commandant in marketing is known as the customer. The second is

known as the product. Product is the soul of all marketing efforts of an

enterprise. All the resources of an enterprise remain inactive without

product. Product has been defined by Philip Kotler, "as anything that

can be offered to a market for attention, acquisition, use of consumption,

it includes physical objects, services, personalities, places, organisation

and idea3". According to William. J. Stanton, "a product is a set of

tangible attributes which may include packing, colour price, quality and

brand plus the seller's services and reputationw4. The word product thus

includes ( I ) Goods (2) Seirvices.

The bank's main products are services. Services have been

defined as "any activity or benefit that one party can offer to another

that is essentially intangible and does not result in ownership of

anything. Its production may or may not be tied to a physical product5".

Because of the highly regulated nature of the bank market,

developing a new generic product in India is a laborious task. However,

the bank may minify, magnify, combine and modify existing products to

formulate a package to suit the needs of a specific target, within the

Reserve Bank of India's regulations in force. Modification in the

existing products by adding a few features is one of the more common

strategies followed by th~e banks. In product development two processes

can be followed as given. in the figure 4.2.

Figure 4.2. Product development process

- PROCESS I

Idea Generation

1 Concept Generation

I Product Cost Analysis

I Testing of Service

1 Introduction

-

PROCESS I1

Need Identification

i Size of the Market

i Cost Benefit Analysis

I Introduction

Process I - Product to Market Needs

Process I1 - Market Needs to Product

159

The first process is proactive, in which needs of the target market

are anticipated and visualised. The second process is reactive and in it,

banks responds to the expressed needs of the target.

The concept of product life cycle is another aspect to be

considered in bank marketing. The concept of product life cycle is

similar to human life cycle. According to this concept, a product is

bom, passes through various stages and ultimately dies. They are

introductory stage, the growth stage, the maturity stage and the decline

stage.

The life cycle concept is not applicable to generic banking

services like current account savings accounts and fixed deposits

accounts. However, it may have limited application on new schemes

when introduced. But this concept is of immense value to the bankers as

purveyor of credit

Social Orientation

While formulatllng a product for marketing, important aspects

taken into consideration are to offer world class sewice and profitable

schemes to consumers. Pricing policy must be motivational.

Furthermore, employees are well aware of the behavioural management.

In addition, it is more impact generating that the policy makers have a

positive attitude t0ward.s social costs and assign due weightage to social

interest. To be more specific, in Indian settings, this aspect is assuming

a place of special significance because the public have high expectations

regarding banking organisations in general. In other words, contribution

to the process of soc:ial transformation is an important task while

applying marketing principles in banking. By taking into consideration

these important variables, it was tried to verify the view of bank

personnel to see the benefits of these variables in bank marketing in

Kerala. For this weighted average scores were calculated. Tables 4.9,

4.10 and 4.1 1 disclose the results of the study.

Table 4.9

Category of bank personnel and the order of preference - weighted average score -

C M X

0 i?

- 8 a 'Z

$i fj .g 0

47

123

335

505

Manager 115

Supervisor 275

Clerk 534 748

Total 806 11138

First preference

Satisfying customer

Satisfying customer

Satisfying customer

Satisfying customer

100

257

739

1096

46

114

344

5 04

The data containe'd in the Tables disclose, that all categories of

bank personnel have unanimous opinion about the benefits of bank

marketing. Weighted average score discloses that the first important

gain is satisfying custo~mers, the second import benefit is Excelling

Competition and third important benefit is understanding customers.

Location wise and Region wise weighted average scores were

calculated to identify the order of preference.

Table 4.10

Location of bank personnel and the order of preference - weighted average score

Location of Bank

personnel

Urban

Semi- urban

- ~

2 3 ti g 2 z 3 2 3

265

280

26 1

- 1 806 I

-

2' 8 g "7 * .- r;; 3 y) 0

.-

3'79

378

381

1138 --

C a0 0 c '3 .- .* = *

M X .s 'Z m -

1096

- m 3

505 524

customer

Satisfying customer

o e .g 2 w .:

0

177

168

160

360

3 74

362

First preference

Satisfying customer

Satisfying customer

Satisfying

189

150

185

Table 4.1 1

Region of bank ]personnel and the order of preference - weighted average score

In location wise the first and foremost intention of bank

marketing is satisfying customers indiscriminately, whether the bank is

located in Urban, Semi-urban or rural areas. By going through all these

analyses, it was clear that satisfying customers is of the utmost

importance by application of marketing principles in banks in Kerala.

Region wise weighted average scores also reveal that satisfying

the customer is the important object of bank marketing except in central

region. In central region, maximum importance is given to excelling

competition. Due to the highly industrialridden region in Kerala, all

commercial banks are concentrating on central region to carry out their

First preference

Satisfying customer

Excelling competition

Satisfying customer

Satisfying customer

C M X 00 0 F .-

Region of

a personnel .g 2

350 160 Northern

420 186 Central --

Southern 247 3 26 158 -- -

Total 1096 494

Vl .s 0

162

121

222

505

163

business which resulted in competition between banks. That is why

priority of marketing has shifted to excelling competition.

Similar questions were asked to bank customers also to assess

their opinion about the application of marketing principles in banking

services. Just before aslcing about the benefit of bank marketing as a

first step, another question was asked to assess the view of customers

about the necessity of marketing principles. Tables 4.12, 4.13 and 4.14

give the outcome of the study in location wise region wise and

occupation wise respecti.vely.

Table 4.12

Location of the Banlc branch and view of the Respondents on the

imjportance of bank marketing


Location Highly essential Essential Not needed

Semi-urban 2.00 97.67 0.33 100

1 Rural I 5.00 1 93.67 1 1.33 1 0 0 1 1 a 1 4.22 1 94.78

- Source: Field Survey

1 .OO 100

Table 4.13

Region of Bank branch and views of Respondents on the

importance of bank marketing

Table 4.14


Occupation of Respondents and views on importance of

1.67

0.33 --

Southern 97.00 1 .OO

Total 4.22 94.78 1 .OO

Bank marketing

Total

100

100

100

100

(Figures in percentage

E a t i o n EighG, essential I Essential ( Not needed ( Total

Source: Field Survey

1 Agriculture I 0 1 100 0 / l o o 1 ( Business 1 3.34 1 95.89 1 0.77 1 100 1 ( Govt. Service 1 2.86 1 96.00 1 1.14 1 100

L I I I I Source: Field Survey

Private service 15.01 92.72

Foreign Employee 50.00

Any other 100.00

Total 94.78

The data contained in the Tables reveal that 99 per cent of the

customers are of the view that application of marketing principles is

either essential or highly essential in banks. Out of the entire location of

1.27

0

0

1 .OO

100

100

100

100

165

Kerala only one per cent of the respondents is reluctant to accept the

application of marketing principles in banks.

The region wise analysis also reveals that the application of

marketing principles is quite essential and 99 per cent of all customers

of all regions support the same. In occupation wise analysis also the

response of the customers is totally favourable for applying marketing

principles in banks. A close look at the Table reveals that the entire

respondents in the agri~:ultural sector are for adopting the marketing

techniques. Out of the entire occupation categories only a negligible

percentage i.e. one per cent is against this.

After realising the acceptance of the importance of marketing

principles by bank customers, their views about the benefit secured by

bank marketing in Ke:rala were assessed. For assessing benefit,

weighted average score ,was calculated. The data contained in the Table

4.15, 4.16 and 4. i7 disclose the weighted average scores of the benefits

of bank marketing.

166

Tnblc 4.15

Location of bank customer and benefit of bank marketing and

the order of preference - weighted average score -

0 & LL a

675 706 Satisfying Urban

customer

141 I. 1050 679 677 Satisfying Semi-urban

customer

1428 1015 648 88 1 Satisfying customer

3 146 2002 2264 Satisfying customer

....

Table 4.16

Region of bank cus,tomer and benefit of bank marketing and

the order of preference - weighted average score

r

LL a

14201 520

Central 660

882

Total 2135

C - 0 m '3 .- m X 2 CA .2

Z

846

657

60 1

2104

First preference

Satisfying customer

Satisfying customer

Satisfying customer

Satisfying customer

Table 4.17

Occupation of bank customer and benefit of bank marketing and

the order of preference - weighted average score

Govt. service 1 578 / 820 / 589 1 395

Private I 1036 I 1449 I 1108 1 729 service

1 2

- -_I-- F-1. 7 2 employment

~- - -

w,.. C Ql

.g % 9 '3 m

g 2

Occupatior~ of Bank

C U S I O I ~ C I -

A y t h 9 1 14 ' " 4 - ---1-

5 z 5 E .L o 2 z 5 2

First preference

C 3G 0 C P .- .- = - 0 0

2 8 8 i 3

Satisfying customer

M X

0 k C4 a

Satisfying customer

customer

Satisfying customer

Satisfying customer

Satisfying customer

Satisfying customer

The data contained in the Table reveals that the first and most

important benefit of marketing bank services is satisfying customers. It

is an attitude similar to that of bank personnel. The order of preference

expressed can be ranked thus: Satisfying Customers (1) Excelling

Competition (2), and Understanding Customers (3). All other benefits

168

put forward to the assessment of the customers are getting least

importance. In the calse of excelling competition and understanding

customers, region wise analysis shows that respondents in Southern

region gave second preference to understanding customers.

While interact~ng with respondents from agricultural sector,

customers opined that due to the peculiar features of agricultural sector,

banks are over consciolus about documentation. Furthermore, banks are

suspicious about productivity and repayment. It has been found that this

is mainly due to the limited awareness about agriculture by bank

personnel, which has resulted in lack of implementation of many of the

projects chalked out in this sector.

Generally, banking organisation transacts with different types of

. . custolncss. I he behavioural profile of the two types of customers

cannot be identical. But at the same time, all customers are important

to the marketesb. 'The marketing resources instrumentalise the process

of transforming the prospects into customers and or users of the bank.

For identifying the area or areas required for financial support of the

bank for development, the entire area has been grouped into Agriculture,

Industry and or business and third service group. The data contained in

169

the Tables 4.18 and 4.15) give the outcome of the study in Location wise

and Region wise.

'Table 4.18

Area found potential for the development with support of bank - Location wise


Rus~ness Agri, Bus Total I

25.00

Total L

23.81 33.33 100.00

Pearsor~ Chi-square 6.31214, df=8, p=,6123 15

Table 4.19

Area found potential for the development with support of bank - Region wise

---.- , . -- (Figures in percentage)

ervice 7 Agr & Ser Bus & Ser o -.. Total Agri, Bus &

I Central 1 71.43 1 0 . 0 0 I ) n n - Northern --

28.57

Total 28.57 Source: Field survey

In order to ascertain whether there is any significant relation

between location and area for development with the support of the bank,

Chi-square value and 'I?' value were calculated at 5 per cent level of

170

significance. 'l'he result of the chi-square test show that there is no

statistically significant relation between location and area found

potential for development with the support of the bank. The data

furnished in the Table hrther shows that combination of different

groups is the suggestion by bank personnel better than individual groups

for development with support of the bank in urban area. More than 42

per cent opined that combination of businesslindustry and service

groups is the potential area for bank support. But in the case of semi-

urban area, from the bank employees' point of view, businesslindustry

group and service group are getting equal importance with regard to the

support of the bank for development. In the case of rural area, bank

employees opined that Agriculture, Business/Industry and combination

of Agriculture. Business/Industry and Service are getting equal

importance in the case of financial support for development.

Region wise analysis was also conducted to see the predominant

area which required support from bank for development. The data

contained in the Table 4.19 gives outcomes of the study. It was verified

whether there was any statistically significant relation between region

171

and area Sor developmerlt with support of bank. For this chi-square

value at 5 per cent level and 'p' value were calculated. The chi-square

value reveals that there is no statistically significant relation between

region and area found )potential for development with the support of

bank.

'The data contained in the Table further reveals that 33.33 per cent

of the bank personnel opined that the combined group of Agriculture,

BusinesslIndustry and service occupy prime consideration for

development with the support of the bank in the Northern region. But in

the central region it is the Industry/Business which occupies first and as

far as the southern region is concerned service, Business/Industry and

Service and also the group of Agriculture, BusinessAndustry and Service

occupy equal importance.

Similarly, the bank customers' point of view about the potential

area required financial support from banks is also assessed. The data

contained in Tables 4.20, 4.21 and 4.22 give the occupation wise,

location wise and region wise results of the study.

Table 4.20

Views on the area which requiring financial support from Bank -

occupation wise

Business 1 2.57 1 95.37 1 2.06 1 100 1 9.14 Govt. Service k 75.43 15.43 100

1 Private service 1 3.16 1 72.15 1 24.68 1 100 1 r i g ~ i i l o ~ e e 1 0.00 1 100.00 1 0.00 ii 1

Any other 33.33 66.67 0.00 -- - .

Total 5.1 1 82.33 12.56

Source: Field Survey Pearson Chi-square: 197,304, df=lO, p=0,00000

Table 4.2 1

Views on the potential area which requiring financial support

from bank - Location wise


/ Location / Agriculture 1 Industry1 Business I Service 1 Total 1 1 Urban 1 1.67 ! 87.66 1 10.67 1 100 1

Total A---

82.33 12.56 Source: Field Survey Pearson Chi-square: 5 1,8862, df-4, p=,000000

'Table 4.22

Views on potential area which requiring financial support

fisrm bank - Region wise

- (Fi ures in ercenta e

Region Agriculture Industry1 Business Service F 1 ~ . - 8

Central 0.67 85.00 14.33 100 p+;.--*&i -- -

Source: Field Survey Pearson Chi-square: 56,4309. df=4, p=,000000

In order to verity whether there is any statistically significant

relation between occupiation and area required financial support, chi-

square value was calculated. Similarly in location wise and region wise

chi-square value was calculated. Chi-square value revealed that

statistically significant relation does exist. Of the respondents from

bank customers, more than 82 per cent are of the view that the potential

area which required financial support is Industry/Business. In the

occupation wise analysis data furnished in Table 4.20 reveals that except

from agriculture, majority of customers from all other occupation have

the same opinion aboul the area which required financial support from

the bank. More than 9:s per cent of respondents from business industry,

174

more than 75 per cent customers from the Government and more than 72

per cent tiom private service, cent per cent respondents from foreign

engagement and more than 66 per cent from 'Any other' category say

that Industry/Business is the group which required financial support. In

location wise and region wise analysis also Industry/business group is

identified as the potential area which required financial support from

banks. Further data contained in the Table reveals that even the bank

customers are giving the last preference to agricultural sector with

regard to the financial support from bank.

It was found that more than 92 per cent of the bank personnel

responded that their branches do not conduct any survey with regard to

the market potential. Due to this an attempt was made to probe the

specific reason for not conducting the same. The data furnished in

Tables 4.23 and 4.24 disclose the reason for not conducting surveys

location-wise and region-wise respectively.

Table 4.23

Reason for not conducting survey for assessing market

potential -- Location wise

Table 4.24


Reason for not conducting survey for assessing market potential - Region wise


U1 .- v

0 c

34.94

0.00 2.50 36.25 -

0.00 0.00 30.23

33.73 ---

Norther~~ 40.5 1 0.00 -- -

0.00

I 3.44

Total 1.21

Source: Field survey Pearson Chi-square: 12,2598, dfz.8, p-,140033

Total

E 4 .? O V

E g m 5'5c w .- - m * " E * 2 2.2 ,. 2 $ 0 ' - 2

3.62

0.00

0.00

1.21

Most important reason

Instruction from top is required

lnstruction from top is required



Total

O0

loo

O0

loo

Most important reason





176

Inorder to ascertain whether there is any statistically significant

relation between location or Region for not conducting survey for

assessing market potentiill, chi-square value at 5 per cent level and 'p'

value werc calculated. The results of the chi-square value bring out the

fact that there is no statistically significant relation between location or

region and the reason for not conducting a survey for assessing market

potential.

Location-w~se and Region-wise analysis further reveals that the

dominating reasons for not conducting surveys for assessing market

potential are lack of instruction from top and the surmise that no such

attempt is needed. Of these two important reasons, lack of instruction

from top is the prime reason for not conducting surveys. More than 60

per cent of bank personnel are of this opinion both in location wise and

region wise except in Northern region. It is 58 per cent in Northern

region.

Bank deposlt plays a significant role in running a banking

industry. A bank purchases deposits inorder to produce and sell loans.

Thus deposit mobilisation is the most significant service rendered by

commercial banks. The survival and development of the banks are

177

mainly influencerl by their ab~lity to attract deposits from different

segments of the community rather than by the volume of their capital

resources. Deposi~s arc the life blood of the banking industry. They are

the main stay of bank funds and account for about 98 per cent of bank

liabilities".

Bank purchases deposits to produce and sell loans. In other

words, deposits are the main impacts for all loan outputs. Every bank

tries to 'produce and sell' more to enjoy economies of large scale in

operation. Due to the confinement of credit policies, and tough

competition for deposit among banks and between banks and non

banking companies, deposit mobilisation has assumed a greater

significance.

Evaluation of the strategies in bank marketing of Kerala brings

out the results that the hypotheses formulated for the study is acceptable.

Marketing strategies for the products are evolved and executed in Kerala

for attaining maximum benefits to the banks.

References

1. Merrc Ann I'ezzulld. Marketing Financial Service, Mac Millan India

Ltd. [)elhi 1999. p '7

2. Phil~p Kotlcr. Markcling M;lnagerncn(. I'rinticc 1-Iall. p. 463.

3. William J. Stanton. Marketing 1 lth Edition. p.193.

4. Saxena, K.K Bank Marketing. Skylark Publications, New Delhi, 1988.

p.46.

5. Subba Rao. P. Principles and Practice of Banks Management, Himalya

Publishing House, Bombay. p. 228.

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