Service Marketing in Brokerage Firms

Presented by:

Kundan Kumar Thakur-108Khalid -112

Md. Tahir Hussain-113Id Mohammad-114

Brokerage Firm• Brokerage firms, also known as broker-dealers, are licensed by the Securities and Exchange Commission (SEC) to buy and sell securities for clients and for their own accounts.

• A firm employed by others to plan and organize sales or negotiate contracts for a commission.

•Brokerage firms come in all sizes, from one- or two-person offices to huge firms with offices around the world. They are sometimes differentiated as full-service or discount firms, based on pricing structure and client relationships.

•Brokerage firms derive their profit from commissions on orders given i.e., they usually collect a percentage of the value of each transaction, though some charge flat fees.

Type of Brokerage firmThere are mainly two type of brokerage firm :1. Full - service BrokerA broker that provides a large variety of services to its clients,

including research and advice, retirement planning, tax tips, and much more. Of course, this all comes at a price, as commissions at full-service brokerages are much higher than those at discount brokers. For e.g. IIFL, Indiabulls, Religare etc

2. Discount BrokerA stockbroker who carries out buy and sell orders at a reduced

commission compared to a full-service broker, but provides no investment advice. For e.g. Firm which are doing their transaction online are mostly Discount brokers like geojit BNP paribus.

Some brokerage firms in India There are many brokerage firms in India but here we named some

famous Firms in the basis of service provided by them to the investors (source: The economic times)

• India Infoline Limited.• Religare Securities Limited• Indiabulls Securities Limited• Sharekhan Limited• ICICI Securities Limited• Kotak Securities Limited• Motilal Oswal• Anand Rathi• Bajaj Capital• SMC• Reliance Money• Angel Broking

Services offered by brokerage firms• Stock broking services

• Commodity trading service

• Provide trading tips to customers

• Provides market research and analysis

• Merchant banking services for IPO Issue.

• Wealth management and portfolio services

• Mutual funding and insurance services

Some Brokerage Firms and their services 1. India Infoline Ltd.

The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd and its subsidiaries, is one of the leading players in the Indian financial services space.

IIFL is a dominant player in the retail as well as institutional segments of the market. It recently became the first Indian broker to get a membership of the Colombo Stock Exchange and is also the first Indian broker to have received an in-principle approval for membership of the Singapore Stock Exchange. I has a wide distribution reach which reach over 2500 business locations across over 500 cities in India.

Services provided by IIFL

Media and ResearchServices

Investment Banking

Credit & Finance Insurance

WealthManagement

MarketingServices

Commodities

Equity Trading

India Infolineltd

Mutual Funds

2. Religare Securities Ltd.

Religare Securities Ltd. ("RSL"), a wholly owned subsidiary of Religare Enterprises Limited (REL), a global financial services group is a market leading securities firm in India. The company offers equity broking services to more than half a million clients using both, offline and online platforms and also offers, depository participant services.

RSL is a member of the NSE, BSE, and a depository participant with NSDL and CDSL. RSL employs more than 4300 employees (as on December 31, 2009) and has a wide distribution reach that spans across more than 1800 locations in India.

Service provided by Religare

Arts Initiative

InvestmentBanking

WealthAdvisoryServices

Personal Credit

Insurance

Mutual Fund

Commodity

Equity

REL

3. Sharekhan Limited

Sharekhan Limited is a retail financial services provider with a

focus on equities, derivatives and commodities brokerage execution on the National Stock Exchange of India Ltd. (NSE), Bombay Stock Exchange Ltd. (BSE), National Commodity and Derivatives Exchange India (NCDEX) and Multi Commodity Exchange of India Ltd. (MCX).

Sharekhan provides trade execution services through multiple channels - an Internet platform, telephone and retail outlets and is present in 225 cities through a network of 615 locations.

Service provided by sharekhan

7Ps Of service Marketing

1. Product2. Price3. Place4. Promotion5. Physical evidence6. People7. process

7ps adopted by mentioned brokerage firms

1. Product

Name of firm Basis of differentiation

Product Variation Dedicated Account SMS Alert

service

1. Race2. Rally

1. R-ACE(Basic)2. R-ACE lite (Advanced)3. R-ACE Pro (Professional)

Not avail.

No product variation available

1. ShareKhan Classic account2. ShareKhan Trade tiger a/c

Not avail.

No product variation available

No dedicated A/c is available but trading is done through TTAdv software and offline mode by calling RMs.

1st to introduce.

Portfolio Management Service (PMS)

Name of firm Basis of differentiation

Product variety

1. Monarque- For HNI category to provide high returns2. Panther - For “High Risk High Return” investor3. Tortoise- For “Medium Risk Medium Return” investor4. Elephant- For “Low Risk Low Return ” Investor5. Caterpillar- For investor with high risk appetite.6. Leo - Aimed at retail customers and misx of moderate and

aggressive investment strategies.

1. PMS ProPrime- manage with long term returns using fundamental analysis

2. PMS ProTech- Identify trading opportunities in the market with Long Short strategies using Technical Analysis

No product variety available. Same product is available for all investors.

2. Price

Apart from theses charges each firm charges their PMS service under Price skimming strategies. And for personal financing service they mostly use penetration pricing.

Name of firm Basis of Pricing

Account opening charges(Rs.)

Annual maintenancecharges(Rs.)

Brokerage rate intraday

On Delivery

500 250 0.05% 0.50%

Nil After one year 0.05% 0.25%

555 Nil 0.05% 0.50%

3. Place• For distribution channel-India info line - A network of over 2,500 business locations

spread over more than 500 cities and towns across India.

Religare- wide distribution reach that spans across more than 1800 locations in India.

Sharekhan- its presence through 800 ‘Share Shops’ in 300 cities in India.

• For direct sale- cold calling is done and service is also provided at doorstep

• Websites are also available for those who want to join online.

4. Promotion

For Promotion they mainly rely on :• Tele-marketing .• Advertising in business newspapers/ magazines and

TV channels.• Approaching clients References• Inviting students from different business schools for

summer internship• New trend is seen i.e creating page on social

networking sites.

5. Physical Evidence

• Demat account form• letter of authorization • Current account opened documents• Various other forms.• Bills and its receipt

6. PeoplePeople are important because:– Providing a service, rather than selling a product. – Quality of personal relationships between company

and clients becomes vital. – New staff needs thorough training and constant

monitoring.– Strategies and tactics for recruiting, training and

safeguarding relationships. People InvolvedOther people used are:

Agents, Technicians, other employees.

Higher

managers

Middle managers

Relationship managers

7. Process

1. Contact the firm or go directly2. Ask for service you need3. Take the form4. Fill it and submit with paying charges (by

bank DD or check)5. Start Trading / use service6. Give the feedback or contact if any Query

arise.

Firms status through its Punch lineIndia Infoline “Its all About Money. Honey! ” It shows that India Infoline is fully Focused on making money. As

people are conscious about earning money, It tries to capture the mindset and sentiment of people .

Religare securities Ltd. “Values That Bind” It tries to focus on delivering value to its customer attached with

returns . It emphasis more on value service by delivering product variation for investors of different level which forced them to be bound with the firm.

Sharekhan Ltd. “your guide to the financial Jungle” It denotes the financial market as a jungle where competition is

not for survival of living but survival of investor to remain in market for longer time through proper guidance.