advertising strategies of banking sectors in india

7/30/2019 Advertising Strategies of Banking Sectors in India

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Project on Advertising Strategies of Banking Sectors

in India

CHAPTER I - INTRODUCTION

1.1 Meaning of the terms Bank and Banking:

Bank is an institution which deals in money and credit. It accepts deposits from the

public and grants loans and advances to those who are in need of funds for various

purposes.

Banking is an activity which involves acceptance of deposits for the purpose of

lending or investing. In addition to accepting deposits and lending funds, banking

also involves providing various other services along with its main banking activity.

These are mainly agency services, but include several general services as well.

A banker is one who undertakes banking activities, accepting deposits and lending

money for different purposes. The Banking Regulation Act, 1949 defines banking

as an activity of accepting funds from the public for the purpose of lending or

investment.

The essential features of banking activities are as follows:-

i. accepting deposits from public;

ii. incidental to the activities of accepting deposits for lending

iii. lending or investment of such deposits;

OR

Investing, banks undertake activities like

a) Promoting and mobilizing savings of the public;

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b) Providing funds to trade and industry by way of discounting bills, overdraft,

cash credit facility, and transfer of funds from one place to another;

c) Providing agency services to customers, such as collection of bills, payment

of insurance premium, purchase and sale of securities, etc., and other general

services, such as issue of travelers cheques, credit cards, locker facility, etc;

d) Money deposited with the bank is assured as far as its safety is concerned.

Further the depositor is allowed to withdraw it whenever required. Banks

allow interest on deposits. Such interest helps in the growth of funds

deposited with the bank. Thus the rate of interest provided on deposits acts

as an incentive to the depositors.

1.2 Scope of Banking Activities:

Banking activities are considered to be the life blood of the national economy.

Without banking services, trading and business activities cannot be carried on

smoothly. Banks are the distributors and protectors of liquid capital which is of

vital significance to a developing country. Efficient administration of the banking

system helps in the economic growth of the nation. Banking is useful to trade and

commerce. Banking activities are useful to trade and industry in the following

ways.

a) Money deposited in a bank remains safe. Precious articles too can be kept in

the safe custody of banks in lockers.

b) Banks provide credit facilities to their customers. Customers with bank

accounts also enjoy better credit in the business world.

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c) Banks encourage the habit of saving and thrift among people. They mobilize

savings and invest them in productive activities. Thus, they help in

increasing the rate of savings and investment in the country.

d) Banks provide a convenient and safe means of transferring money from one

place to another and facilitate business dealings transactions.

e) Banks collect and realize bills, cheques, interest and dividend warrants etc.

on behalf of their customers.

f) Foreign trade is facilitated considerably with the help of banks12:: Business

Studies which receive and make payments, provide credit and deal in foreign

exchange. They protect importers from the risk of loss on account of

exchange rate fluctuations. They issue letter of credit and provide

information on the credit worthiness of importers. They also act as referees

of their customers.

g) Banks meet the financial needs of small-scale business units which are

located in economically backward areas.

h) Farmers and artisans in rural areas can also avail of bank credit for financing

their activities.

i) Commercial banks provide many other services to the general public which

includes locker facility, issue of traveler's cheques and gift cheques, payment

of insurance premium, etc.

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Service activities of banks

Service activities of banks may be categorized as follows:

i. Agency services

ii. General services

Agency services

Banks undertake/various agency services for their customers. These are

outlined below.

a) Collection of cheques, drafts, and bills of exchange on behalf of customers.

b) Collection of dividend and interest warrants of customers.

c) Collection of pension of government employees.

d) Purchase and sale of securities on the instructions of customers.

e) Executing standing orders for payment of rent, electricity bill, insurance

premium etc.

f) Acting as correspondent or representative of customers in dealing with other

banks.

g) Acting as trustee or executor when so nominated. Nature and Scope of

Banking:: 13

General Services

A commercial bank also performs the following services of general utility to

the public:

a) Issue of letters of credit, travelers cheques and circular notes.

b) Safe custody of valuables like gold, jewellery and important documents in

safe deposit vaults (lockers) available on hire.

c) Supply of trade information.

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d) Acting as a referee as regards financial status of customers.

e) Acceptance of bills of exchange on behalf of customers.

f) Underwriting loans floated by government and public bodies.

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1.3USES OF BANK:

1. SecurityStoring all your money in cash at home just isn't safe. Your home could be

burglarized, flood, or catch on fire. In the event of a burglary, most of those

places you thought were great for hiding your money will probably be

found. (You aren't the first person who has considered hiding money in the

produce drawer of your fridge.) If you buy your money in the back yard, the

container you put it in could become damaged or start decomposing and

destroy your money. Less dramatically, you could simply forget about all

the places you've stashed money, or someone else who lives in or visits your

household could find it and take it.

Once you have more than a few hundred dollars to your name, it's really best

to have a secure place to put your money. As long as you choose a legitimate

bank that has Federal Deposit Insurance Corporation (FDIC) insurance, any

money you put in the bank (up to FDIC insurance limits) is protected by the

U.S. government. To date, the guarantee provided by the FDIC has proved

to be completely reliable, even during times of financial crisis like the

banking crisis brought on by the 2008 subprime mortgage meltdown or the

savings & loan crisis of the early 1990s. (To learn more about the FDIC's

protection, see are Your Bank Deposits insured? andBank Failure: WillYour Assets Be Protected?)

2. Convenience

when you have money in the bank, you can access it from anywhere. A

checking account also makes it much easier to pay bills - you'll no longer

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have to pay bills in person, and you won't need to purchase a cashier's

checkevery time you need to send money through the mail. You can just

write a check from your checking account and put it in the mail. You can

even transfer money online, often for free.

3. Saving and investing

once you have enough money, you'll want to go beyond a checking account

and start saving and investing your money to optimize your future financial

situation. You simply can't take advantage of the opportunity to earn money

in the stock market or earn interest on deposits if you're not willing to keep

your cash anywhere except your mattress.

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1 . 4 R O L E O F B A N K I N G I N I N D I A N E C O N O M Y :

1 ) C a p i t a l F o r m a t i o n :

The significance of DFIs lies in their making available the means to utilize savings

generated in the economy, thus helping in capital formation. Capital

formation implies the diversion of the product ive capaci ty of the

ec ono my to th e m ak ing of ca pi ta l go od s w hi ch in cre as es

future productive capacity. The process of Capital Formation involves three

distinct but interdependent activities, viz., saving financial intermediation and

investment. However, poor country/economy may be, there will be a need for

institutions which allow such savings, as are currently forthcoming, to

be invested conveniently and safe ly and which ensure that they are

channeled into the most useful purposes. A well-developed financial structure

will therefore aid in the collections and disbursements of investible funds

and thereby contribute to the capital formation of the economy. Indian

capital market although still considered to be underdeveloped has been

recording impressive progress during the post-interdependence period.

2) Support to the Capital Market:

The basic purpose of DFIs particularly in the context of a developing economy, is

toacceleratethe pace of economic development by increasing capital

fo rm at io n, in du ci ng in ve st or s an d entrepreneurs, sealing the leakages of

material and human resources by careful allocation thereof, undertaking

development activities, including promotion of industrial units to fill the gaps in

the industrial structure and by ensuring that no healthy projects suffer for

want of finance and/or technical services. Hence, the DFIs have to

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perform financial and development functions on finance funct ions , there

is a provision of adequate term finance and in development functions

there include providing of foreign currency loans, underwriting of shares

and debentures of industrial concerns, direct subscription to equity and

preference share capi ta l, guaranteeing of deferred payments, conduct ing

techno-economic surveys, market and investment research and rendering

of technical and administrative guidance to the entrepreneurs.

3 ) R u p e e s l o a n :

Rupee loans constitute more than 90 per cent of the total assistance

sanctioned and disbursed. This speaks eloquently on DFIs obsession

with term loans to the neglect of other forms of assistance which are

equally important. Term loans supplemented by other forms of assistance had

naturally put the borrowers, most of whom are small entrepreneurs, on to a heavy

burdens e r v i c i n g . S i n c e t e r m f i n a n c e i s j u s t o n e o f t h e i n p u t s

b u t n o t e v e r y t h i n g f o r t h e entrepreneurs, they had to search for other

sources and their abortive efforts to secure other forms of assistance led to sicknessin industrial units in many cases.

4) Foreign Currency Loans :

Foreign currency loans are meant for setting up of new industrial projects as also

for expansion, diversification, modernization or renovation of existing units in

cases where a portion of the loan was for financing import of equipment from

abroad and/or technical know-how, in special cases.

5) Subscription to Debentures and Guarantees:

Regarding guarantees, it is well-known that when an entrepreneur purchases some

machinery or fixed assets or capital goods on credit, the supplier usually asks him

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to furnish some guarantee to ensure payment of installments by the purchaser at

regular intervals. In such a case, DFIs can act as guarantors for prompt of

installments to the supplier of such machinery or capital under a scheme

called Deferred Payments Guarantee.

6) Assistance to Backward Areas :

Operations of DFIs in India have been primarily guided by priorities as

spelt out in the Five-

Year P lans . This i s ref lec ted in the lending por t fo l io and pat tern

of financial assistance of development financial institutions under different

schemes of financing. Institutional finance to projects in backward areas is

extended on concessional terms such as lower interest rate, longer moratorium

period, extended repayment schedule and relaxed norms in respect of

promoters contribution and debt-equi ty ratio. Such concessions are

extended on a graded scale to units in industrially backward districts,

classified into the three categories of A, B and c depending upon the degree of

their backwardness. Besides, institutions have introduced schemes forextending term loans for project/area

specific infrastructure development . Moreover , in recent years,

development banks in India have launched special programs for intensive

development of industrially least developed areas, commonly referred to

as the No-industry Districts (NIDs) which do not have any large-scale or

medium-scale industrial project. Institutions have initiated industrial potential

surveys in these areas.

7) Promotion of New Entrepreneurs:

Development banks in India have also achieved a remarkable success in creating a

new class of entrepreneurs and spreading the industrial culture to newer

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areas and weaker sections of the society. Special capital and seed Capital

schemes have been introduced to provide equity type of assistance to new and

technically skilled entrepreneurs who lack financial resources of their own even to

provide promoters contribution in view of long-term benefi ts to the

society from the emergence of a new class of entrepreneurs. Development

banks have been act ively involved in the entrepreneurship development

programs and in es tabl ishing a set of

insti tutionswhichidentify and train potential entrepreneurs. Again, t

o make avai labl e a package of se rvic esencompassing preparation of

feasibility of reports, project reports, technical and

managementconsul tanc y et c. at a reason able cost , inst i tut i ons h ave

sp on so re d a cha in of 1 6 Tech ni ca lConsultancy organizations covering

practically the entire country. Promotional and development functions are as

important to institutions as the financing role. The promotional activities

like carrying out industrial potential surveys, identification of potential

entrepreneurs, conducting entrepreneurship development programs and

providing technical consultancy services have contributed in a significantmanner to the process of industrialization and effective utilization of industrial

finance by industry. IDBI has created a special technical assistance fund to support

its various promotional activities. Over the years, the scope of promotional

activities has expanded to include programs for up gradation of skill of

State level development banks and

other industr ial promotion agencies, conduct ing special s tudies on

important issues concerning industr ial development , encouraging

voluntary agencies in implementing their programs for the uplift of rural

areas, village an cottage industries, artisans and other weaker sections of

the society.

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8) Impact on Corporate Culture :

The projec t appra isa l and fo l low-up of ass is ted projec ts by

inst i tu t ions through var ious inst ruments ,

such as projec t moni tor ing and repor t of nominee d i rec tors on the

Boardsof d i rec tors of ass is ted uni t s , have been mutual ly rewardin

g. Thr oug h mon ito rin g o f a ss ist ed projects, the institutions have been

able to better appreciate the problems faced by industrial units. It also has

been possible for the corporate managements to recognize the fact that interests of

t h e a s s i s t ed u n i t s an d t h o se o f i n s t i t u t i o n s d o n o t co n f l i c t b u t

coin cide . Over the year s, insti tutions have succeeded in infusing a

sense of constructive partnership with the corporate sector. Institutions

have been going through a continuous process of learning by doing and

areeffect ing improvements in their systems and procedures on the

basis of their cumulat iveexperience.The promoters of industrial projects

now develop ideas into specific projects more carefully and prepare project

reports more systematically. Inst itut ions insist on more crit ical

evaluation of technical feasibility demand factors, marketing strategies andproject location and on application of modern techniques of discounted cash

flow, internal rate of return, economic rate of returned. in assessing the

prospects of a project. This has produced a favorable impact on the process

of decision-making in the corporate seeking financial assistance from

institutions. In fact, such impact is not continued to projects assisted by them

but also spreads over to projects financed by the corporate sector on its own. The

association of institutions in the management of corporate bodies has considerably

facilitated the process of progressive professionalism of the corporate

management. Institutions have been abl e to con vi nce th e co rpo rat e

m an ag em en ts t o a pp ro pr ia te ly r e- or ie nt t he ir o rg an iz at io na l

s t ructure , personal pol ic ies and p lanning and cont ro l sys tems. In

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many cases , ins t i tu t ions have successfu l ly inducted exper ts on the

Boards o f a ss i st ed companies. As pa r t o f the ir p ro jec t fo l low-up

work and th rough the ir nominee d i r ec to rs , i ns ti tu t ions have a l so

been able to br ing about progress ive adopt ion of modern

management techniques, such as corpora te planning and

per formance budget ing in the ass isted uni ts . The progress ive

profess ional i sm of industr ial management in India ref lec ts one of

the major qual i ta t ive changes brought about by the ins t i tu t ions .

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CHAPTER II- REVIEWS

In 2009, Yes Bank was the 1s t mid-s ized bank (balance sheet less

than 24 ,000 c ro re ) a t t he Bus iness today in KPMG Ind ia ' s Bes t

Bank Awards , 20 09 . I t was r anked the 1s t f a s t es t g rowing bank

by Business Today and Financial Express and bagged the fas tes t

G ro wi ng B an k ( ba la nc e s he et l es s t ha n 3 0, 00 0 c ro re ) a t t he

business wor ld best bank award. I t a l so was rated 1s t on credi t

qua li ty by f inanc ia l express and new economy ra ted Yes bank as

t he m os t i nn ov at iv e b an k i n I nd ia . M or eo ve r, s om e o f t he se

a w a r d s a n d a c c o l a d e s s e e m t o c o m e e v e r y y e a r t o y e s b a n k a

r at if ic at io n o f g oo d w or k t ha t t he y d o b y t he i nd us tr y. T he se

achievements , year on year fee ls ta l ler when one rea l izes tha t th is

bank star ted near ly a decade later than the o ther pr ivate sec tor

banks. In 2000, when yes Bank made i ts intent ions c lear of

en te r ing the Ind ian bank ing sec to r , many f e l t t ha t the bank andpromoters are over-opt imist ic in a h ighly crowded and

c om pe ti ti ve I nd ia n b an ki ng s ec to r. B ei ng a l at er e nt ra nt i n a

sector where large pr ivate and publ ic sec tor banks ru led the roost ,

the banks had to choices e i ther to be a me too bank that emula tes

an d p r o v i d e s s i m i l a r s e r v i ce s t h a t o t h e r o n an ag g r eg a t e d o o r

e l se to t read the d i f f icul t pa th of s t rong d i f ferent ia t ion , where the

services and of fer ing of the bank are unique

The bank chose the la t ter and th is uniqueness was termed by

the bank as the ' knowledge bank ing approach ' . The suppor t fo r

knowledge banking approach was to be leveraged on informat ion

t ech n ol o gy an d h u man r eso ur ces . Th e b ank d eci d ed t o p r ov i de14


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s pe ci al iz ed c ri ti ca l s er vi ce t o h ig h p ot en ti al a nd g ro wi ng

i n du s tr i es t h ro u gh i t s o wn ex pe r t p e rso nn e l. Th is r equ i red t h e

bank to h ire domain exper ts from the industry and leverage their

s e rv i ce s t h ro u gh e f fi c ien t u se o f t e ch n ol o gy was a l so u sed b y

banks to be eff ic ient is ease of t ransact ions , lower costs , he ighten

secur i ty and of fer o ther innovat ive so lu t ion . The bank decided to

ou t source the in fo rmat ion t echno logy func t ions bu t r e t a ined the

d o m a i n ex p e r t s . Th e b an k wen t o n t o ad o p t f a i r an d em p l o y ees

towards new in i t ia t ives and projec ts .

Al though the bank had been not iced in the market , many fe l t

tha t the bank has to go a long way before i t becomes a formidable

player to b igger pr ivate banks such as ICICI and to bigger publ ic

sec t o r s b an k s su ch a s S t a t e Ban k o f I n d i a . I m p r e s s i v e g r o wt h -

when be ing smal l i s much eas ie r than when you a re l a rge . Wi th

the conso l ida t ion in the indus t ry seems to be the 'wr i t ing on the

w al l' . M or eo ve r, t he d ec is io n o f t he g ov er nm en t t o f ur th er

o pe ni ng u p o f t he s ec to r t o f or ei gn m ul ti na ti on al b an ks w il lc r ea t e m o r e p r e s su r e o n t h e I n d i an b an k i n g sec t o r an d a l l t h e

banks therein .

According to Rana Kapoor , Yes Banks founder , MD and CEO. Yes

banks, incorporated in 2003, s tar ted i t s f inancia l operat ions in the

t h i r d q u a r t e r o f 2 0 0 4 i n Mu m b a i a s a p r i v a t e s ec t o r b an k . Th e

bank's promoters Rana Kapoor and Ashok Kapoor own the contro l

s takes of the banks, wi th f inancia l ass i s tance f rom Rabobanks has

a d eep ex p e r i en ce o f m o r e t h an 2 5 y ea r s i n t h e s ec t o r an d h i s

e r st whi l e Asso c ia t io n w i th Rabo b an k I n di a a s i t s CEO h e lp ed

s ec ur in g t he a bo ve s ai d f in an ci al a ss is ta nc e. M or eo ve r, h is

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previous exper ience wi th Bank of Amer ica also made him a

renowned banker in India .

Af ter 1991, the banking sec tor was opened to fore ign banks

tha t came in happ i ly cons ider ing the vas t sca le and scope o f the

In di an b us ine ss an d ma rke t. T hi s l ed to co mp et it i on a nd

s ub se que nt ad di tio n an d r ef in em en t t o ba nki ng s er vi ces .

Telephone banking, ne t banking, automated te l ler machines , quick

and e f f i c i en t bank ing se rv ices , and so on , became the min imum

s er vi ce l ev el s f or t he b an ks , t hi s p ha se e sp ec ia ll y 1 99 3, s aw

numerous Ind ian p r iva te banks , such as ICICI , HDFC, and AXIS

and af ter some t ime, Yes Bank.

1. Ra jn and an P a tn a ik , F i nan ci a l Ex pr e ss , Th e I UP j o u r na l o f

Business Strategy, vol . VIII , No 2, PgNo. 61, June -2011.

2. Rana Kapo o r, Yes Ban ks f ou n de r , MD an d CEO, F i n an c ia l

Express , The IUP journal of Business S t ra tegy, vol . VII I , No

2, PgNo. 63 , June -2011.

Three new banks have posted the i r f i r s t annual resul t in India th is

ye ar . Ru ssi as Sb er B an ks w hi ch a cc oun t f or 2 6% of t ha t

c ou nt ry 's b an ki ng a ss et s n ow h as a b ra nc h i n I nd ia . S o d oe s

S ingapore s un i t ed Over seas Bank . Dur ing the same t ime Swiss

i nv es tm en ts b an k c re di t S ui ss e l au nc he d a b ra nc h i n I nd ia t o

complement i t s ex i s t ing p rac t ice . Th i s i s a pa r t f rom Aus t r a l i a s

ANZ, which i s back in Ind ia a f t e r se l l ing g r ind l ays to s t andard

char tered wi l l repor t i t s f i r s t repor t next year .

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Recover ing f rom the lows o f 2009-10 , fo re ign banks have

posted st rong network of branches fore ign banks in India have the

l o wes t co s t o f d ep o s i t s i n t h e i n d u s t r y ev en l o wer t h an I n d i a s

publ ic and pr ivate sec tors banks. By focusing on onl ine banking,

t h ey a r e ab l e t o m ax i m i ze p r o f i t d e sp i t e a m i n i m u m p r e sen ce .

This a l so ref lec ts in the i r h igh net in teres t margins

Both Ci t i bank and HSBC Ind ia caught in a r e t ai l showdown

have seen the i r prof i t s bounce back f rom thei r low in the previous

year . At Ci t i Ind ia asse t s g rew 16% to Rs1 , 11 ,586crore , whi l e

ne t p ro f i t has jumped 66% to Rs1 , 424 c ro re . HSBC bare ly g rew

i ts asse ts by 0 .79% to Rs91, 148 crore , but ne t prof i t i s up to 88%

at Rs1 , 527crore. At s t andard char t ered asse t s g rew 20% to Rs1 ,

06,683 crore , but ne t prof i t decl ined 3% to Rs2, 059 crore . S tanC

m ak es t he h ig he st p ro fi t a mo ng f or ei gn b an ks i n I nd ia , l ea st

a f f ec ted by the c r i s i s tha t a lmos t everyone e l se wen t th rough in

2009-10.

Investors and bankers a l ike were surpr ised when shr i ram t ranspor t

f i nan ce c orp . c ol lec ted R s1 ,00 0c ro re i n n on -c onv er tib le

d eb en t u r e s i s su e a d ay a f t e r o p en i n g o n 2 8 Ju n e f o l l o wi n g an

oversubscr ip t ion o f more than f ive t imes . The bond sa le was the

companys second one in two years and a s imi lar sa le in Ju ly las t

year too was a success .

The t rucks f inanc ie r p lans to use the money fo r fund ing

buyers of the money for funding buyers of small t runks and o ther

c om me rc ia l v eh ic le s. s hr ir am 's s uc ce ss c ou ld a tt ra ct m or e

companies to tap re ta i l pocket for cash as o ther avenues of ra i s ing

f un ds g et s m or e e xp en si ve a nd l es s a cc es si bl e f or t he m s ay

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bankers are re t icent about naming companies in the p ipel ine , most

of the i ssuers are among the bet ter ra ted companies .

"We expec t a lo t o f i s suer s hav ing in te res t e spec ia l ly f rom non-

banking finance companies and the rea l es tate sector ," sa id Ajay

Sa ra f, e xec ut ive di rec tor s at IC IC I se cur it ies i n Mu mb ai .

"Liquidi ty for some companies in these sec tors in these sec tors i s

t i g h t an d w i t h i n t e r e s t r a t e s c l o se t o a p eak , b o t h t h e i n v es t o r s

and the i ssuers are happy".

In teres t ra tes in India have been r i s ing over the past two

years as the Reserve Banks of India ra ised i t s benchmark ra ted 10

t imes in a row wi th the las t increase being tha t of 50 basis poin ts .

the main ob jec t ives was pa r tly to undo the se r i es o f in t eres t r a t e

cu ts s ta rt ing Oc tob er 2 00 8 to of fs et i mpa ct of th e gl ob al

economic s lowdown in 2008-09 and more impor tant ly to damp the

accelera t ing inf la t ion . Inf la t ion ra te as measured by the wholesa le

pr ice Index was las t reported at 9 .1%.

Some banker s and economis t s expec t in t e res t to r i seanother quar ter to hal f % point before s tabi l iz ing . Shi r ram paid a

coupon o f be tween 11 .1% and 11 .6% for deben tu res matur ing in

5years .

F or a b an k t ha t a cc ou nt s f or n ea rl y a q ua rt er o f t he I nd ia n

banking indust ry , s tate banking indust ry , s tate bank of India i s in

a me ss, w ith r at ing a gen cy M oo dy s d ow n gr adi ng S BI s

s ta nd al on es r at in g f or m c - t o d + , l as t f or tn ig ht . T he a ge nc y

ra t iona le i s in f luenced by SBI ' s de ter r ing asse t qua l i ty in a h igh

in teres t ra te envi ronment , and a sub-normal level of Tier I Capi ta l

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Th e m an ag e r a t S BI b e l i ev e s t h a t t h e m ar k e t s h av e o v e r -

r eac ted Moodys overa l l r a t ing fo r SBI i s Baa2 bu t s t i l l a no tch

above the count ry ' s sovere ign ra t ing . the d+ ra t ing i s exclusive to

two perpetual debt ins t ruments , Rs1, 785crore and Rs1, 000 crore

ra i sed by SBI in two t r anches (2007 fo r 10year s and ano ther in

2010 for f ive years) , which a t tha t t imes qual i f ied as t ie r I capi ta l

.Under Base l I I I norms , these ins trument s now qua l i fy fo r upper

Tier I capi ta l and no longer as Tier I capi ta l . [5]

3 . R ya n M ax im Rod rig ue z, B us ine ss Ind ia , Pg No- 10 7, 7 t h

August , 2011.

4 . Sumit Sharma , Bus iness Ind ia , PgNo-93 , 24 t h July , 2011.

5 . R ya n M ax im R od ri gu ez , B us in es s I nd ia , P gN o- 11 2, 3 0 t h

October 2011.

The las t t ime Indian publ ic sec tor banks went on h i r ing spree was

i n t h e m i d - 1 9 7 0 s so m u ch so t h a t , a t 1 0 0 , 0 0 0 em p l o y ees , s t a t e

bank of India today has the largest number of employees a t anybank in the wor ld. By the mid-1990s, the notable h ir ing tha t took

place was a t pr ivate sectors banks. Today, both ICICI banks and

HDFC Banks have g rown to an employee base o f a round 50 ,000

each

With not too many employees being h i red , promot ions a t PSBs

became hard to come by. But wi th the mid-1970s batch of

e mp lo ye es h av in g r ea ch ed s up er an nu at io n, t he s it ua ti on h as

changed dramat ica l ly . Today even the new and o ld pr ivate sec tor

banks are hir ing to serv ice their rapid ly expanding business .

"Over 100 ,000 exper i enced employees wi l l l eave the pub l i c -

sec tor bank sys tem be tween 2010 and 2015 ," says Al len Pere ir a ,

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between 2.5% and 3%. Ajay Kumar CMD, corporat ion bank,

t e l l s B r u h ad eeswar an R t h a t t h e b an k s w i l l f o cu s o n r u r a l

loans because of the oppor tuni t ies there .

Though we have l a rge shares o f co rpora te loans , we have

been s t rategica l ly adding to reta i l and SME asse ts in the las t s ix

to n ine months and the r e t a i l por t fo l io now accoun t s fo r 18% of

our to ta l loan . Corpora te loans , which now account for 47% of the

loan book, wi l l const i tu te a smal ler share in the fu ture . [8]

Over the past three years HDFC bank, ro le model for the banking

i n du s tr y w i th s t ead y p r of i tab il i ty an d l o w d e li n qu enc i es , h a s

changed the way i t works . The p r iva te sec to r s banks has moved

ou t in to semi u rban and ru ra l a r eas , which now br ing in 40% of

the bus iness .Adi tya Pur i , t he MD and CEO of HDFC bank , t e l l s

Shobahana Subramanian tha t leading even to very small

consumers can be a prof i table in i t ia t ive tha t wi l l fos ter f inancia l

i nc lu si on . M or e i mp or ta nt ly , P ur i i s c on vi nc ed t he m od el i ssca lable and i s looking to lend to 10mil ion smal l bor rowers in the

next four years.

Uday Kotak has been r emarkab ly p resc ien t in p re fe r r ing smal l -

t i cke t s loans and in no t l ead ing to the in f r as truc ture sec to r s . t he

execut ive v ice-chai rman and MD of kotak Mahindra bank has re-

eng ineered the banks mode l over the pas t coup le o f yea r s so tha t

core banking now br ing in the bulk of the prof i t s . Kotak bel ieves

tha t the marke t i s pe rhaps a l ad too op t imis t i c on the r ever se o f

t h e i n t e r e s t r a t e cy c l e an d t e l l s sh o b ah an a S u b r am an i an t h a t i t

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seems unl ikely the cent ra l bank wi l l cu t pol icy ra tes by more than

inf la t ion could remain a t 7% through the year .

9 . Ajay Kumar CMD of corporat ion bank, the f inancia l

Express , PgNo17, March 2011.

10. Adi tya Pur i , the MD and CEO of HDFC bank, the

f inancia l Express , PgNo21, March 2011.

11. Uday Kotak v ice-chairman and MD of kotak v ice-

chai rman, the f inancia l Express , PgNo25, March 2011.

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CHAPTER III METHODOLOGY

B an ki ng I nd us tr y p la ys g re at r ol e f or t he h ea lt hy e co no mi c

gr ow th o f t he c oun tr y . the ec on om ic si gni fi ca nc e of a ny

development program.

3.1Objectives of Study

The main objec t ive of the s tudy i s to unders tand the var ious

adver t i s ing s t ra tegies of the banks

To u n de r st and t h e ad ve r ti s in g d o ne b y t h e b ank s t h ro u gh

dif ferent medium of adver t i s ing .

T o u nd er st an d t he a dv er ti si ng e xp en se s i nc ur re d b y t he

banks in India .

3.2 Hypotheses

Th e t o p i c , I s e l e c t ed t h a t t h e f i n an c i a l i n s t i t u t i o n s i s v e r y

in teres t ing . The f inanc ia l ins t i tu tions p lay a ve ry impor tan t ro le

fo r deve lopment o f the soc iety .For the we l fa re o f the soc ie ty &

he lp the consumers to t ake a r igh t dec i s ion . So tha t r eason , the

t op ic i s to e nha nc e & t o pr ov ide f in anc ial s er vi ces t o the

customers .

3.3 Methodologies

Though th i s s tudy f ac t f ind ing in na tu re a lo t on secondary

da ta ar e r equ ir e fo r i t s s uc ce ss ful co mp le tio n he nc e i t i s

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necessa ry to exp la in in de ta i l s the methods by which these Da ta

are sough.

3.4 Collections of Secondary Data

This research s tudy i s pure ly re l ied on the secondary data . the

secondary da ta r equ i r ed fo r the s tudy cou ld be ob ta ined mos t ly

f rom books, journals , magazines , e ffor t s would be made as much

i n fo rm a ti o n f r om t h e i n te r ac t ab ou t t h e b ank i ng i n du s tr i es i n

India .

3.5 Statistical Tools

Genera l p rob lem cou ld be sub jec ted to sc i en t i f i c t r ea tment

o n l y t ak i n g r eco u r se t o c e r t a i n t i m e h o n o r ed s t a t i s t i c a l t o o l o f

analysis . As far as the present s tudy i s concerned the

Sta t i s t ica l tools are wor th t ry ing .

3.6 Diagrams & Graphs

These a re the major s t a t i s t i ca l too l mean t fo r the e f f ec t ive

i n te r pr e ta t io n o f an y se t o f d a ta . Th ey wo ul d g i ve an y ca su al

re ade r a br ief o f t he r ese arc h pr oj ect t hes is . T he ba nki ng

indus t r i e s in Ind ia cou ld be c l ea r ly in t e rp re ted wi th the he lp o f

t ab le a nd d ia gr am s f ur th er t he b as is t re nd a bo ut t he a ct ua l

c on tr ib ut io n m ad e b y t he b an ks t o g en er at e p er fo rm an ce o f banking in India could be made inte l l igib le wi th the help of

tab les& diagrams. The invest iga tor does not want to consider any

other tools for fur ther in terpre ta t ion .

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3.7 The uses of study

To know about the var ious promot ional tools of pr ivate

banks &publ ic sec tor banks in India.

To m ak e an an a l y s i s o f cu s t o m er p e r cep t i o n f o r

promot ional s t ra tegies of pr ivate & publ ic sec tors banks in India.

To f ind ou t the key p romot iona l too l s fo r banking se rv ice on the

basis of customer ' s responses .

3.8 Advantages & Disadvantages

In order to develop an adver t i sement s t ra tegy, each aspectmust be examined for both advantages and d isadvantages .

Dur ing the p rocess , cos t i s usua lly f ac to red in to we ighing

the pros against the cons of a s t ra tegy.

Al though an advantage might be to br ing in new customers ,

the d i sadvan tage to the s t r a t egy cou ld be i t cou ld cos t too much

to gain the new customers .

I f a marke t ing s t r a t egy concerns i t se l f wi th d i s t r ibu t ion ,

e xa mi ni ng a nd a cc es si ng t he c os t o f d if fe re nt d is tr ib ut io n

methods wi l l r evea l i f t he s t r a t egy shou ld be implemented . For

e xa mp le , o ne w ay t o d is tr ib ut e i nf or ma ti on i s t hr ou gh e ma il

ma rk et i ng . Al tho ug h t he ad va nta ge i s em ai l mar ket ing is

r e la t iv e ly i n ex p en s iv e , t h e d i sad van tag e i s t h at b ecau se o f t h e

h igh vo lume of spam junk mai l, many In te rne t se rvice p rov ider s

have se t up e labora te f i l te rs to keep out unsol ic i ted emai ls .

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3.9 Scopes of Study

T he s tu dy o f t he p ro je ct h el ps t o d ef in e t he v ar io us

problems rela t ing to f inancia l ins t i tu t ions in clear & precise

m an n e r . Th e s t u d y o f t h e p r o j ec t a r e i m p o r t an t t o i m p r o v e t h e

decis ion making ski l l s in a prac t ica l poin t of v iew by analysis of

the f inanc ia l ins t itu t ions & he lps to g ive c l ea r p ic tu re abou t the

Pract ica l knowledge about the working ac t iv i t ies of the f inancia l

ins t i tu t ions .

There i s a b ig gap between the theory knowledge & pract ica l

knowledge. So, the scope or impor tance of s tudy of the projec t i s

to f ind the prac t ica l problem ef fec t ive ly & improving the decis ion

making ski l l s .

3.10 Statement of the P roblem

T he p re se nt r es ea rc h p ro je ct a tt em pt t o h ig hl ig ht t he f ac to rs

responsib le for the s tar per formance banking indust r ies in India .

T i ll d a te n o sy st ema t ic r e sea rch p r oj ect s t ud y o n t h e

per formance of banking become wor thwhi le to promote the

overa l l per formance of banking indust r ies .

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CHAPTER IV

ADVERTISING STRATEGIES OF BANKING

SECTORS IN INDIA

4.1ADVERTISING

Advertising is a form of communication used to

persuade an audience i.e. viewer, readers or listeners to

take some action with respect to products, ideas, or

services. Most commonly, the desired result is to drive

consumer behavior with respect to a commercial

offering, although political and ideological advertising

is also common. Advertising messages are usually paid

for by sponsors and viewed via various traditional media, including mass media

such as newspaper, magazines, television commercial, radio advertisement,

outdoor advertising or direct mail; or new media such as websites and text

messages.

Commercial advertisers often seek to generate increased consumption of their

products or services through "Branding," which involves the repetition of an image

or product name in an effort to associate certain qualities with the brand in the

minds of consumers. Non-commercial advertisers who spend money to advertise

items other than a consumer product or service include political parties, interest

groups, religious organizations and governmental agencies. Nonprofit

organizations may rely on free modes of persuasion, such as a public service

announcement (PSA).Modern advertising developed with the rise of mass

production in the late 19th and early 20th centuries.

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In 2010, spending on advertising was estimated at more than $300 billion in the

United States and $500 billion worldwide. Internationally, the largest "big four"

advertising conglomerates are Interpublic, Omnicom, Public is, and WPP.

Advertising is all over the places, on T.V and Radio, in newspapers and magazine,

on Billboard and even posters across the sides of the buses. It is persistence and

persuasive, but it would be simplistic, to believe that the power of advertising has

over us in just about how we spend our money. If an advertising can really

persuade us to buy a product. Surely it can be just as effective in persuading us to

buy a product; surely it can be just as effective in persuading us to think is a certain

way.Advertising serves two purposes:-

To recruit new customers

To increase use of goods and services among existing customer.

4.2 SERVICE ADVERTISING

Here the focus is not on a factory manufactured item or product but a company

providing a service. This could be a bank, the railways a call centre or travel

agency. The ads usually show the company as a leading service provider in its

particulars field. As such the services are more difficult to evaluate due to

intangible nature the advertising is important.

Similarly, banks are found to advertise their saving schemes and loan facilities that

they offer for buying homes and vehicles. Such all other services, interest rates,

facilities are advertise through banks.

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4.3 Advertising media selection

Advertising media selection is the process of choosing the most cost-effective

media for advertising, to achieve the required coverage and number of exposures in

a target audience.

In addition to the characteristics of the media themselves, a number of other

important factors must be taken into account in selecting the media mix for a

particular advertising campaign. These factors are:

The characteristics of the target audience.

The level of exposure of the target audience to the communication.

The impact which advertising will have on the target audience.

The extent to which the effects of a particular advertising message wear

out over time

The cost of advertising through a particular medium.

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4.4TYPES OF ADVERTISING MEDIA

The type of media is influenced by the characteristics of each medium and their

ability to achieve the specified promotional objectives. Selection of the media

outlet through which an ad will be presented has important implications for the

success of a promotion. Each outlet possesses unique characteristics though not all

outlets are equally effective for all advertisers. Thus, choosing the right media can

be a time consuming process requiring the marketer to balance the pros and cons of

each option.

While just a few years ago marketers needed to be aware of only a few media

outlets, todays marketers is well-versed in a wide range of media options. The

reason for the growing number of media outlets lays with advances in

communication technology, in particular, the Internet. The following are most

common type of media and their characteristics:

1. Television

2. Radio

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3. Print Publications

Newspaper

Magazine/journal

4. Internet

5. Direct Mail

6. Signage

7. Product Placement

8. Mobile Devices

9. Sponsorships

10. Other Media Outlets

1) Television Advertising

If ones choice of bank were based solely on the TV ads that banks have beencoming out with, consumers would definitely have a tough time choosing one over

the other. And isnt that what advertising is all about? Boosting the banks image

and getting the customers interest more than a little piqued?

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While bank commercials and catchphrases have been around for the longest time,

many banks still have yet to learn to say what the customers want to hear.

Nowadays though, most bank ads are so smartly conceptualized, wittily worded,

and perfectly produced so as to clearly communicate with millions of potential

bank clients.

The recent months have seen a surge in commercials that have elicited more than

the usual yawns and the been there, done that responses from bank customers.

Here are some of the latest bank ad campaigns and the banks values they intended

to convey. These ads had people informed, amused, inspired, and most

importantly, got them thinking.

Advantages

Television permits you to reach large numbers of people on a national or

regional level in a short period of time

Independent stations and cable offer new opportunities to pinpoint local

audiences

Television being an image-building and visual medium, it offers the ability

to convey your message with sight, sound and motion

Disadvantages

Message is temporary, and may require multiple exposure for the ad to rise

above the clutter

Ads on network affiliates are concentrated in local news broadcasts and

station breaks

Preferred ad times are often sold out far in advance

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Limited length of exposure, as most ads are only thirty seconds long or less,

which limits the amount of information you can communicate

Relatively expensive in terms of creative, production and airtime costs

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2) Radio Advertising

At the time, it sounded like a great idea. A financial institution (that shall remain

nameless) had a successful print advertising campaign that it wanted to convert to

radio. The ads featured images of diamonds, symbolizing the bank's strength and

stability. The proposed radio script talked about how--deep inside the earth--it took

millions of years of pressure for carbon to be compressed into diamonds. The

highlight of the spot was supposed to be a sound effect of "diamonds being made."

When the radio producer saw the script, he scratched his head. What sound would

the average listener instantly recognize as that of carbon being converted into

diamonds? The script was visual and abstract--written by someone who knew little

about radio's unique requirements. The concept ultimately had to be discarded in

favor of another that was more "radio friendly."

"I had a client who gave me a script that called for sound effects of a man sleeping

on a screened-in porch," says Paul Fey, president and chief creative officer at

World Wide Radio, a large radio commercial production company in Hollywood,

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Calif. "Clearly, the writer was used to working for television. He was forcing a

visual image into an audio medium. It didn't work."

These two stories symbolize a problem that is common in radio advertising for the

financial services industry. Many bank marketers don't understand radio and, all

too often, either create or approve radio commercials that are weak, unworkable or

ineffective. The difficulty is particularly noticeable at community banks where, for

budget reasons, radio is sometimes the only broadcast advertising that the

institutions buy.

Bad radio can hurt. "A truly awful commercial can actually annoy people," notes

Fey, whose company annually produces hundreds of new radio commercials for

clients including such financial service companies as Wells Fargo & Co., Cal Fed

and Bank of America. "An annoying ad leaves a negative impression of your

brand."

ABA Bank Marketing magazine asked several seasoned radio-advertising experts

to assess the special challenges of the medium and to pinpoint the common

mistakes that financial institutions make with it.

Advantages

Radio is a universal medium enjoyed by people at one time or another

during the day, at home, at work, and even in the car.

The vast array of radio program formats offers to efficiently target your

advertising dollars to narrowly defined segments of consumers most likely

to respond to your offer.

Gives your business personality through the creation of campaigns using

sounds and voices

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Free creative help is often available

Rates can generally be negotiated

During the past ten years, radio rates have seen less inflation than those for

other media

Disadvantages

Because radio listeners are spread over many stations, you may have to

advertise simultaneously on several stations to reach your target audience

Listeners cannot go back to your ads to go over important points

Ads are an interruption in the entertainment. Because of this, a radio ad may

require multiple exposure to break through the listener's "tune-out" factor

and ensure message retention

Radio is a background medium. Most listeners are doing something else

while listening, which means that your ad has to work hard to get their

attention

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3) Print Publications Advertising

Print publications such as magazines, newspapers and Special Issue publications

offer advertising opportunities at all geographic levels.

Newspaper

Magazines

(a) Newspaper

Newspapers have also incorporated color advertisements, though their main

advantage rests with their ability to target local markets.

Special Issue publications can offer very selective targeting since banks give

advertisements to show the progress and new schemes provided by banks.

Advantages

Allows you to reach a huge number of people in a given geographic area

You have the flexibility in deciding the ad size and placement within the

newspaper

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Your ad can be as large as necessary to communicate as much of a story as

you care to tell

Exposure to your ad is not limited; readers can go back to your message

again and again if so desired.

Free help in creating and producing ad copy is usually available

Quick turn-around helps your ad reflect the changing market conditions. The

ad you decide to run today can be in your customers' hands in one to two

days.

Disadvantages

Ad space can be expensive

Your ad has to compete against the clutter of other advertisers, including the

giants ads run by supermarkets and department stores as well as the ads of

your competitors

Poor photo reproduction limits creativity

Newspapers are a price-oriented medium; most ads are for sales

Expect your ad to have a short shelf life, as newspapers are usually read

once and then discarded.

You may be paying to send your message to a lot of people who will

probably never be in the market to buy from you.

Newspapers are a highly visible medium, so your competitors can quickly

react to your prices

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With the increasing popularity of the Internet, newspapers face declining

readership and market penetration. A growing number of readers now skip

the print version of the newspaper (and hence the print ads) and instead read

the online version of the publication.

(b) Magazines

Magazines especially those that target specific or specialized interest areas, are

more narrowly targeted compared to broadcast media. Additionally, magazines

offer the option of allowing marketers to present their message using high quality

imagery e.g., for e.g. banks offer various schemes on loans, interest on bank

accounts ,etc.

Advantages

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Allows for better targeting of audience, as you can choose magazine

publications that cater to your specific audience or whose editorial content

specializes in topics of interest to your audience.

High reader involvement means that more attention will be paid to your

advertisement

Better quality paper permits better color reproduction and full-color ads

The smaller page (generally 8 by 11 inches) permits even small ads to

stand out

Disadvantages

Long lead times mean that you have to make plans weeks or months in

advance

The slower lead time heightens the risk of your ad getting overtaken by

events

There is limited flexibility in terms of ad placement and format.

Space and ad layout costs are higher

4) Internet Advertising

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Entering the web advertising can help keep you up on Bank ad Trends by showing

you how other Bank ad advertising compare to the overall Internet standards. You

also can make Bank ad news if you have the Best Bank and Bank ad newsletters

will want to cover you win bringing you additional visibility within your industry.Two key reasons for this shift rest with the Internets ability to:

1) Narrowly target an advertising message

2) Track user response to the advertisers message.

The Internet offers many advertising options with messages delivered through

websites or by email.

Internet advertising is huge

Entering the Web Awards can help keep you up on Bank ad Trends by showing

you how other Bank ad advertising compare to the overall Internet standards. You

also can make Bank ad news if you have the Best Bank and Bank ad newsletters

will want to cover you wins bringing you additional visibility within your industry.In today's modern society, the growing role of electronic banking in our day-to-day

lives has become ever present. Most large banks now offer their customers the

ability to manage and transfer funds, view and print past statements, and arrange

recurring automatic utility payments -- all from home or on the go via any wireless

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Internet connection. Specific and deliberate marketing techniques have helped

online banking been grow in popularity and maintain its longevity.

(a) Email Advertising

Using email to deliver an advertisement affords marketers the advantage of low

distribution cost and potentially high reach. In situations where the marketer

possesses a highly targeted list, response rates to email advertisements may be

quite high. Emails sent from the Bank are marked Confidential. However you

acknowledge that emails are transmitted over the internet which is an unsecure

public domain and because of the risks of unlawful interception, corruption, non-

delivery or mis-delivery the Bank cannot guarantee that loan documentation sent

through the email service will: Remain confidential, Be free from contamination

by viruses, worms or Trojans, Be free from interference, Be delivered in a timely

manner or at all

5) Direct Mail Advertising

This method of advertising uses postal and other delivery services to ship

advertising materials, including postcards, letters, brochures, catalogs and flyers, to

a physical address of targeted customers. Direct mail is most effective when it is

designed in a way that makes it appear to be special to the customer. For instance,

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a marketer using direct mail can personalize mailings by including a message

recipients name on the address label or by inserting their name within the content

of marketers message.

Direct mail can be a very cost-effective method of advertising, especially if

mailings contain printed material. This is due to cost advantages obtained by

printing in high volume since the majority of printing costs are realized when a

printing machine is initially setup to run a print job and not the because of the

quantity of material printed. Consequently, the total cost of printing 50,000

postcards is only slightly higher than printing 20,000 postcards but when the total

cost is divided by the number of cards printed the cost per-card drops dramaticallyas more pieces are printed. Obviously there are other costs involved in direct mail,

primarily postage expense.

Gone are the days when you could walk into any bank in the country and get

down-home service straight out of a Frank Capra movie. Technology, mergers and

the current financial crisis have all but put an end to that. But some recent mail

campaigns from a few financial institutions show that demonstrating good old-

fashioned customer service is key to getting and keeping customers in these still-

troubled times.

Advantages

Your advertising message is targeted to those most likely to buy your

product or service.

Marketing message can be personalized, thus helping increase positive

response

Your message can be as long as is necessary to fully tell your story.

Effectiveness of response to the campaign can be easily measured.

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You have total control over the presentation of your advertising message.

Your ad campaign is hidden from your competitors until it's too late for

them to react

Active involvement - the act of opening the mail and reading it -- can be

elicited from the target market.

Disadvantages

Some people do not like receiving offers in their mail, and throw them

immediately without even opening the mail.

Resources need to be allocated in the maintenance of lists, as the success ofthis kind of promotional campaign depends on the quality of your mailing

list.

Long lead times are required for creative printing and mailing

Producing direct mail materials entail the expense of using various

professionals - copywriter, artists, photographers, printers, etc.

Can be expensive, depending on your target market, quality of your list and

size of the campaign.

6) Signage and Billboard Advertising

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The use of signs to communicate a marketers message places advertising in

geographically identified areas in order to capture customer attention. The most

obvious method of using signs is through billboards, which are generally located in

high traffic areas. Outdoor billboards come in many sizes, though the most well-

known are large structures located near transportation points intending to attract

the interest of people traveling on roads or public transportation. Indoor billboards

are often smaller than outdoor billboards and are designed to attract the attention of

foot traffic (i.e., those moving past the sign). For example, smaller signage in

airports, train terminals and large commercial office space fit this category.

Digital signage gives banks and credit unions a powerful tool for engagingcustomers in the branch. Discover the benefits and best practices for deploying

digital signage in banks.

While billboards are the most obvious example of signage advertising, there are

many other forms of signage advertising include:

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7) Product Placement Advertising

Product placement is an advertising approach that intentionally inserts products

into entertainment programs such as movies, TV programs and video games.

Placement can take several forms including:

Visual imagery in which the product appears within the entertainment

program

Actual product use by an actor in the program

Words spoken by an actor that include the product name

Product placement is gaining acceptance among a growing number of marketers

for two main reasons. First, in most cases the placement is subtle so as not to divert

significant attention from the main content of the program or media outlet. This

approach may lead the audience to believe the product was selected for inclusion

by program producers and not by the marketer. This may heighten the credibility

of the product in the minds of the audience since their perception, whether accurate

or not, is that product was selected by an unbiased third-party.

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Second, entertainment programming, such as television, is converging with other

media, particularly the Internet. In the future a viewer of a television program may

be able to easily request information for products that appear in a program by

simply pointing to the product on the screen. With the information they may get

the option to purchase the product. As this technology emerges it is expected that

product placement opportunities will become a powerful promotional option for

many marketers.

8) Mobile Device Advertising

Mobile banking (also known as M-Banking, mbanking) is a term used for

performing balance checks, account transactions, payments, credit applications and

other banking transactions through a mobile device such as a mobile phone or

Personal Digital Assistant (PDA). The earliest mobile banking services were

offered over SMS, a service known as SMS banking. With the introduction of the

first primitive smart phones with WAP support enabling the use of the mobile web

in 1999, the first European banks started to offer mobile banking on this platform

to their customers.

Mobile Banking refers to provision and an ailment of banking- and financial

services with the help of mobile telecommunication devices. The scope of offered

services may include facilities to conduct bank and stock market transactions, to

administer accounts and to access customized information.

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9) Sponsorship Advertising

A subtle method of advertising is an approach in which marketers pay, or offer

resources and services, for the purpose of being seen as a supporter of an

organizations event, program or product offering. Sponsorships are a

valuable part of Standard Bank Group's social responsibility and marketing

communication strategies. Sponsorships are essential in building the brand

and creating relevance in markets where Standard Bank Group operates, and

they provide a platform for us to engage with our customers. Development is

key to our deciding on what sponsorships we undertake. Currently, we look at

initiatives that support community up liftmen, the arts and sport.

10) ADVERTISING SLOGANS

Advertising slogans also plays an important role in advertising as it appeals to the

people or customers that they value their feelings. Following are some banks

having slogans.

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Bank of Baroda - India's International Bank

Citibank-1 Your Citi never sleeps

2 because the Citi never sleeps3 Citi. Live Richly

4 The whole world in one bank

5 where money lives

HSBC - World's Local Bank

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IDBI - (Hindi-India) Aao Sochein Bada

Morgan Stanley investment bank- One client at a time

SBI - (Hindi-India) Sirf Banking Aur Kuch Nahi (Pure Banking..

Nothing Else)

Union Bank of India - Your Dreams Are Not Yours Alone

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4.4 PAST ADVERTISING & BANKS ADVERTISING

Past Advertising

In the past, studies of bank advertising have a focused primarily on advertising as a

method for achieving a particular marketing strategy. For eg, a traditional

advertising campaign may promote the services , products, cost saving, or

investment returns available at a particular bank. In addition , bank advertising

may emphasize the financial image of the bank.

Bank Advertising

The first requirement of a relationship between a customer and a bank is to

establish the customers awareness of the bank and its services. The customersawareness of the bank can be increased by the banks advertising and by personal

contacts between the customer and personal representing the bank. In smaller

communities, however, customer awareness of a particular bank is generally

assumed. Bank advertising then can be designed to achieve other goals such as

promoting the image of the bank as one that cares about its customers and serves

the community.

1)Reason for bank advertising

A customer is likely to have a good relationship with the bank if the customer

perceive the bank cares about his or her wellbeing. Banks and their personnel can

demonstrate this caring in many ways. Friendly service, recognizing customer by

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name and providing services not contractually may all be effective tools. Another

way is to direct the banks advertising to deliver a message of caring for both

customer and community.

Positive relationships with their customers benefit banks in a number of important

ways. If a customer has a good relationship with a bank, the customer finds

satisfaction in the banks success and is often willing to conduct business with the

bank even when more favorable terms are availaibleelse where. Customers place a

high value on personalized quality service and conclude the maintaining this

relationship with customers is essential to the bankks attempt to attract and keep

high-income customers. They also conclude that product development in pastyears,accelerated by deregulation, appears far less important than enhancement of

personalized services

Small banks have atleast one significant advantage over larger banks. they report

that in many rural areas people have grown up with and developed a relationship

with the local banks. Large banks attempting to enter the market are often viewed

as outsiders and are required to earn the trust of and build a relationship with the

community to be successful. Small banks are generally viewed as friendlier and

approve loans more often than large banks. This image is an advantage for smaller

banks.

Union bank of India

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(UBI) started advertising on television. This was a first in the banks 88 year

history and it did so in style, picking the third edition of popular game show

KaunBanegaCrorepati on star plus channel and also the ICC Cricket World Cup

although that didnt end well for India and Indian advertisers. The bank wanted to

make their brand more relevant to the youth and these two events seemed

appropriate for that. UBI isnt alone of late, several other public sector banks have

embarked on ambitious and expensive advertising campaigns. Their reasons for

doing so include centenary celebrations, the desire to compete with marketing-

savvy private and foreign bank for a slice of the retail market, or a combination of

two.

Mudra group has also suggested the bank to concentrate on youth as such it

comprises of the 55% of the population thus it suggested to reinvent the brand for

younger customers.

Expenditure

Media owners and advertising agencies arent complaining : UBI hired Mudra

group to do its advertising the banks annual ad-spends are likely to go up from

rs.25 crore in 2006-07 to rs.50 crore in 2007-08.

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Bank of India

Bank of India (BOI) has recently

hired O&M, one of Indias best-

known advertising agencies, to create

a campaign that appeared in print

andon radio and television. According

to a senior executive at Bank of

India,who does not wish to be

identified, the bank spent around rs.20

crore on the exercise and the volume

of advertising by public-sector banks

on TV increased 33% in 2006 (over

2005), in print, it increased 62%.

Executives in the banking and

advertising industry believe

advertising Volumes and consequently spend, will rise this year too.

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1) Public Banks Advertising

The State Bank of India

Created public financial awareness through innovative ad campaign created by

Inter pub

The State Bank of India (SBI) India's premier bank, has unveiled an innovative

advertising campaign, which was conceptualized and created by Interpublicity

Advertising Agency (Interpub) to facilitate greater public awareness of financial

products and services.The first-of-its-kind national campaign leverages concept

branding and establishes SBI as thought leader.

Interpub a full service communication agency founded in 1964, created a series of

advertisements (ads) with the intent of addressing a specific target customer profile

and ensuring a better understanding of the various aspects of financial and banking

instruments. The ads don't endorse SBI directly, but inform the common man

especially in small towns and cities about the Do's and Don'ts pertaining to routine

banking facilities such as ATM, Netbanking, Net Shopping, credit cards, debit

cards, mutual funds, etc. The challenge for the advertising agency, Interpub was

well defined: create communication that would not only target specific issues but

also encompass a wide range of audience.

While one ad talks about the fact that "The best place to keep all your savings? In

your pocket?", another one quickly points out that "Credit Card offers both:

advantages and problems! And thankfully, you can select either". While one ad

illumines that "You can't predict the future but atleast you can plan for it", the

other extols, "Leave behind not only your memories. Leave back your wealth as

well."

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Talking about the strategy, Mr.Yogendra Gouti, Managing Director, Interpub, said,

"Research showed that SBI customers had several unanswered questions about

various facets of banking. The overall aim was to cover a wide section of the

population while also delivering the targeted message in a clear and

communicative manner. We are proud tohave created an ad campaign that

communicates with all the professionalism and seriousness that reflects the SBI's

intent and purpose."

The campaign has its origin in the fact that customers from different socio-

economic classes always posed lots of questions to SBI. For e.g., How safe is Net

banking? What is CBS and what are its uses? Is nomination important? Questionsgalore but not many customers had the answers. SBI initiated its efforts of getting a

solution with the aim of providing clarity and to establish its role as India's

thought-leader in banking. What emerged is a series of eye-catching educational

ads revolving around the "Pure Banking, Nothing Else" theme.

Interpub started off with a far-reaching market survey, which was conducted with

respondents skewed towards the small cities and towns. Revealing facts were

thrown up --- Like the existence of "knowledge pockets"; i.e., specialized and in-

depth familiarity about certain topics but total lack of in-depth awareness about

generic topics. This meant that consumers had "zoned in" on topics that they

considered "important" while ignoring topics that they considered "not as

important". This resulted in lop-sided knowledge and a risk to overall financial

awareness. For e.g., a shopkeeper would be familiar with details of small business

loans but would be unaware about the importance of a nomination facility on his

savings account!

Interpub felt that the need was for communication that would address the different

issues while also being relevant to the varying target audiences. The aim being to

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create a well-rounded knowledge base so that people would be better able to

leverage the financial opportunities available while also creating an overall

enhanced fiscal behavior pattern. The campaign would have to translate into a

better understanding of financial tools and also infuse background knowledge of

the operating conditions of various financial bodies.

Topics short-listed by the agency and SBI ranged from credit card payments to

building up ones credit record; Maintaining security while banking via the

computer to enhancing loan eligibility. A wide variety ofads touched upon the

entire gamut of subjects and harnessed the potential of clear, concise

communication in an impactful and relevant manner. Each ad was created with thespecific intent of addressing a specific target profile. A clear course of action was

provided and physical retention devices were inbuilt into each ad.

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2) Private Sector banks advertising

IndusInd Bank launches IndusMobile

Private lender IndusInd Bank appears to have focused on the convenience of its

interface. In a statement, the Mumbai-based provider spoke about the anytime,

anywhere appeal of mobile banking, highlighting that consumers can both access

their account information and complete transactions from their phone at no extracost.

IndusMobile has provided its customers with

the expected balance inquiries, statements

and payments but it has also built in some

handy extras.

With the app, consumers can book airline and movie tickets, and make mobile to

mobile money transfers.

This functionality should be well received by Indias cell phone-enthusiastic

consumers. Users of the app can access NEFT and IMPS, RBIs inter-bank

payment service.

A first achieved by the IndusMobile app is card-less cash withdrawal, which

supports transactions made using just the phone. Via this feature, beneficiaries can

take cash out of IndusInd Bank ATMs without needing to use an ATM or Debit

card.

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IndusInd Bank claims that its the first provider in India to offer such a possibility.

The mobile banking space continues to grow, both in India and overseas. A recent

Antenna Software survey found that over one in three US consumers with a

smartphone uses mobile banking.

This service still has a strong connection with

youth another study, conducted in the UK by YouGov polling, found that over

half of those surveyed in the 18-24 age group wanted to use mobile banking.

Which was very different to the over 55 sector, who only offered a 21% interest.

It will be interesting to watch how financial providers like IndusInd Bank promote

their apps. Should they appeal to already-excited, tech-savvy consumers, or put

effort into educating those more senior?

Mass Media Advertising: Most Preferred mode formarketing of

Banking Services

Mass media advertising includes TV commercials and advertising in national level

newspapers which have a wide coverage. Advertising in these has made maximum

people aware about the offerings of the banks and established most of the bank

names as big brands. In a recent survey ICICI Bank has been considered as the

most popular banks in private sector. The use of umbrella branding works well in

promotion of banking services. Different types of advertisement campaigns have

been seen in form of TV commercials and as print ad in newspapers. Print ads

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mainly focus on corporate image advertising of banks as well as a new offering of

the bank such as increase in interest rate on deposits or decrease in the interest

rates in loans and so on. TV commercials mainlyfocused on corporate advertising,

where banking service is promoted as a whole rather than a particular product of

banks.

Themes and appeals used in TV commercials of banking:

Advertising appeal is the method used to draw the attention of consumers and to

influence their feelings toward the product, service, or cause. There are hundreds

of different appeals that can be used as the foundation for advertising messages.

These are the central idea of an ad which has been used to catch the attraction of

customer by heart. The theme of a commercial strikes a person in depth and forces

him/her to act in the desired manner. Generally advertising appeals are broken into

two categories: rational appeals and emotional appeals.

Uses of Appeals in Banking Services Advertising:

Name ofBank

BroadCategory

Personal/Social MarketingApproach

Theme/Punch Li

Union Bank

of India

Emotional

Appeal

Social/Parental

Affection

Security and Future

benefit

Because your drea

are not only yours

Royal Bank

of Scotland

Group

Emotional

Appeal

Personal/Style Differentiation In years a player

comes who chang

the way the game

played.

HSBC Rational Practical Customization of Service Offering

Not two people arthe same

IDBI Rational Practical Comprehensivenes

s of Services

offering

Banking for All

State Bank

of India

Emotional Personal/Reliability

Security

Supporting the

customers

With you all the w

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Personal Selling is being very much popular and effective for private banks in

India. It is concerned with face to face meeting with the customer and making the

presentation of the service offering to the prospect and making the person customer

of the bank. This process has its own advantages and disadvantages. Banks may

have some complex service offer which may include so many charges and facilities

ofdifferent types. The biggest advantage of personal selling in banking services is

that the salesperson can make the prospect well understood about the product.

Further customers may prefer it because they need not to go anywhere the sales

person comes to them. But there is certain limitation also people usually do not

give their time to meet and talk on issue. It also does not become cost effective if

the sales are not closed in a handsome number. Banks are going to be societal now

and taking care of environment the plantation Bank of Baroda and Punjab National

Bank is the examples of the same. Consumers are always emotional about the

Brands doing social and national services. Banks wants to win the faith of the

customers and also wants to come out from their typical financial image. Societal

marketing really helps to attain this objective.

Sales promotional has become popular due to the popularity of the usage of debit

and credit cards. The offers are also given to the customers for registering and

transacting with internet banking.

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4.5 Banking Sector advertising on TV in the year 2006

Key Findings:

49 per cent rise in ad volumes of banking sector on TV in the year 2006 over

2005.

'Products and Services' garnered 82 per cent share of ad volumes in banking

sector on TV in year 2006.

Q4 saw maximum ad volumes on TV across the years

2005-2006.

Advertising skewed towards Business and Hindi News

channels.

Private Banks had a higher 67 per cent share whereas PSUs contributed 33

per cent share on TV in 2006.

ICICI Bank was the Top advertiser on TV.

Bank of Baroda (endorsed by Rahul Dravid) had the maximum share in

celebrity endorsed advertising.

This week, AdEx India looks at the advertising trends in the Banking Sector in the

year 2006.

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Growth in Banking Sector advertising on TV in 2006 compared to previous

year.

49 per cent rise was registered in ad volumes of Banking sector on TV in the

year 2006 compared to 2005.

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A huge 82 per cent share of ad volumes were contributed by Products and Services

in Banking sector on TV in the year 2006.

Retail Banking and Banking related Services had a share of 6 per cent and 5

per cent respectively followed by 4 per cent share in Corporate advertising.

Top Growing categories of Banking Sector on TV in 2006 compared to the

previous year.

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