Review of literature

Review of literatureREVIEW OF LITERATUREPorters (1980) segmentation analysis has plenty of value to describe competition amongst participants. This approach establishes how and by which means positions of potence be achieved. Studies found on this methodology have been applied to banking to assess the competitive process. Finlay (2000) suggested that merchandise Penetration fits strategically for a firm when current markets are not saturated for the types of plead the firm is making and its present customers nookie be induced to buy more than. And typically, when a company wants to attack the market dish out of the competitors, they pull up stakes undertake market perceptiveness as a way of increasing their own share in the market. Similarly, Oster (1994) con flowed that the coat of the market share held by the firm as soundly as the size of the major firms in the market are consequential considerations. He suggests that firms with relatively small market shares can i ncrease their market share many times over without adversely affecting the overall market share of a large market asterisker.A study by Philp Robert, Haynes Paula, Helms Marilyn (1992) stated that growth through a market penetration strategy, r to each oneing and influencing customers already served, has proved to be a less economic course of action than expected. This strategy failed to achieve the projected growth not because of the basic plan itself, but rather due to its improper implementation. Financial military expediency providers have typically viewed their elemental customer base as males between 30 and 50 years old (Bartos, 1982). These men are seen as the primary wage earners and decision makers for pecuniary planning in their households. Hence, this segment has been considered golden geese of the financial market. While some growth was achieved through the introduction of new financial products and functions, the financial function needs of women and of consumer s over 50 years of age were blurred for the financial service providers (Javalgi et al., 1990). (Schiele, 1974) suggested that a Net approach should be utilise to catch the youth market as they drift downstream from adolescence to adulthood. The research findings indicated that this is a simplification of reality and that a number of interrelated streams exist to begin with young people reach the pond of adulthood, at which they are likely to be locked into a financial service organisation.Hence, in the highly competitive retail financial marketplace, it is more critical than ever to narrowly define the markets financial service provider can serve. Differentiation through claims of excellent customer service fails to provide competitive distinctiveness, particularly to key segments of the subsisting customer base. Many banks, over the years, have relied on intermediaries like DSAs, DSTs to reach out to the customers. Jensen-Macklin (1976) or rhombus (1984) in their studies have tried to justify the existence and effects of intermediaries. For them agents exist to reduce moral hazard and asymmetric information.There are different means seizeed by the organizations to increase the number of services availed by the customers. Cross-selling is the practice of promoting additional products and services to existing customers in addition to the ones a customer soon has (Butera, 2000). The interest in cross-selling is due to its advantages for firms. Specifically, the selling of additional services to existing customers could reduce the need to spend money on customer acquisition (e.g. advertising) and lead to a pricing advantage over competitors (Reichheld and Sasser, 1990). It is reasonable to expect that customers with strong repurchase intentions exit also be likely to cross-buy from the same service provider. This is pursuant(predicate) with the view that it is easier to cross-sell new services to existing customers than to the new ones. Study conducted b y (Day, 2000), suggested that although customers may want to engage in a relationship with a service provider, they may not want to have all their services provided by that single provider For some service categories, customers intrinsically develop a multi-brand fealty (Jacoby and Chestnut, 1978). For example, in the banking industry most households use two or more financial providers. (Reichheld, 1996 Anderson and Mittal, 2000). Howley John, Savage Grahame (1980) in their paper titled, chamfer marketing in the in the flesh(predicate) arena discuss about Cross-selling, whereby having opened a current account, customers are sold loans, travel facilities, insurance and other services for further banking penetration of each customer. At the same time, there is a word of caution as well saying that theres undoubtedly great potential here, but there are dangers of placing too much emphasis on peripheral activities to the overall corporate purpose of being a bank.Raj Arora (2008) foc ussed on yet another important strategy to increase sales to existing customers Price Bundling. The study points out that the intent of mint pricing is to increase sales by offering a discount when a pre-specified bundle of items is purchased at the same time. Usually, the additional items in the bundle are those that are complementary to the main product. The assumption is that the bundle priced items offer more value and are therefore more attractive to the buyer. The seller makes the buyer aware that the buyer is getting a bargain in the bundle because if the items are purchased separately, the aggregate price far exceeds the bundle price (Yadav and Monroe, 2003). While price bundling is frequently apply by marketers, its effectiveness needs more research especially when used with other marketing variables.Murphy Ruth, Bruce Margaret (2003) stated that internet can be used to sell more existing products into existing markets. This can be achieved by using internet for increasi ng awareness of the firm. Bloch et al. (1996) proposed that e-commerce offers cost advantages to firms via less expensive product promotions. They also advocate that e-commerce can enable a company to implement customer focus strategies through better customer relationships. If the internet segment continues to grow and the branch banking segment shrinks, more customers exit be using Internet banks and fewer customers using Branch banks (Heffernan 1996). But evidence also suggests that many companies have engaged in e-commerce activity, whether it is on a railway line to business or business to consumer basis (B2C), without any consideration towards a return on investment (Damanpour and Madison, 2001). One of the reasons for this may be that many businesses fear that without an Internet presence, the firm testament get left behind. Hence a number of companies have turned their focus towards e-commerce, often by emulating the business module of another firm, as me too entities.Sta fford David, King Susan (1982) stated that Marketing strategies which have been important to recent bank development include branch systematisation and refurbishment, and promotional activities, especially advertising. Price competition has not yet achieved major importance between the big four and so price structures do tend to be relatively stable and similar between banks. A similar view shared by Neven (1990) and Vives (1991) is that banks, especially retail banks, do not contest in price but in service feel.RESEARCH GAPGOOD WAY TO MAKE GAPSThus, we observe a number of important gaps in the literature. First, our knowledge is deficient on which foreign market entry modes service firms apply, and similarly, on target market selection. Next, it is also important to investigate if there are systematic differences within service industries in foreign market entry mode selection. Finally, are the internationalisation theories and models developed for manufacturing industries appl icable to firms in service industries? Or, is the internationalization process of services so unique that there is a need to develop separate theory to explain the internationalization of service firms?OBJECTIVES1. To measure the penetration of banking products in different demographic profiles.2. To find the neglected niches in existing markets served by the banks.3. To identify and compare the means that public one-on-one sector banks adopt to attract new customers in existing market.4. To study the consumer preference regarding the means that banks adopt to attract new customers in existing market.5. To investigate and compare the methods used by public private sector banks to increase number of services availed by the customers.6. To study the consumer preference regarding the methods used by banks to increase number of services availed by the customers.7. To determine ways to increase usage rate of services consumed by the customers.RESEARCH METHODOLOGY TentativeThe study wi ll be based on Primary as well as secondary data both with their well known limitations. For collection of data from customers, Stratified Random taste will be used. Convenience Sampling will be used for collection of data from the employees as the data will be collected as per availability and convenience. / Structured Interviews The secondary data has and will be collected from various sources such as International Journal of Bank Marketing, Indian Bankers companionship Journal, magazines, research papers, books, internet websites etc.Scope of the study Two Public Sector Banks Punjab Sind Bank and State Bank of India have been selected for the study. ICICI Bank and HDFC Bank will form part of Private Sector Banks selected for study. Study will be carried out in different areas of Punjab.Universe of the study Bank employees as well as the customers visiting the bank will be the universe of the study.Sample Only the employees of the bank working at Manager designation and above will form the sample of the study. For purpose of collection of data from customers, every third customer walking into the bank will form part of the study.Sample size The respondent data will be collected from 200 customers out of which hundred customers will be taken from public sector banks and rest from private sector banks. Number of employees of banks to be contacted for information will be 40. Out of this, twenty employees will be from Public Sector Banks and rest twenty would be private sector bank employees. Hence, the number of employees from each bank will be ten.Collection of Data For the purpose of collection of data, two set of questionnaires will be prepared. First questionnaire will help in knowing the strategies being adopted by the banks to increase Market Penetration and would be alter by the bankers. Second questionnaire, to be filled by the customers will be used to collect preferences of customers related to various strategies being adopted by banks to increas e Market Penetration.Analysis and Interpretation The analysis will be done on the basis of review of existing literature and information collected through questionnaires filled by the employees and customers of the Public and Private sector banks. Microsoft Excel and other appropriate statistical tools will be used for Data Analysis.TENTATIVE CHAPTER SCHEMEChapter I IntroductionChapter II Review of literatureChapter III Need, Objectives, Research MethodologyChapter IV Overview of Indian Banking System* Public Sector Banks* Private Sector BanksChapter V Growth Strategies* Market Penetration* Product Development* Market Development* DiversificationChapter VI Market Penetration in Public Private Sector BanksChapter VII Data Presentation AnalysisChapter VIII Findings Conclusion RecommendationsAppendixQuestionnaireBibliographyREFERENCEShttp//www.businessdictionary.com/definition/market-penetration.html as on Jan 28, 2010.http//knowledge.wharton.upenn.edu/india/article.cfm?arti cleid=4145, Jan11, 2007 as on Jan 31, 2010Ansoff, I. (1965), Corporate Strategy, McGraw-Hill, New York, NY form of address Bank Marketing Strategies Author(s) Arthur Meidan Journal International Journal of Bank Marketing Year 1983 Volume 1 Issue 2 page 3 17Banks to get sops for rural reach 3 Oct 2009, 0307 hrs IST, Anto Antony, ET Bureau http//www.business-standard.com/india/news/public-sector-banks-gain-market-share/383014/David Stafford and Susan King, Bank Competition and Advertising by David C. Stafford, The Advertising Association, 1982write references of foll. Articles in Emerald A survey of critical factors in e-BankingBank marketing StrategiesP. Robert Philp, Paula J. Haynes andMarilyn M. Helms FINANCIAL SERVICE STRATEGIES NEGLECTED NICHESInternational Journal of Bank Marketing, Vol. 10 No. 2, 1992, pp. 25-28Title Bank Marketing in the Personal Sector Author(s) John C. Howley, Grahame P. SavageJournal Managerial Finance Year 1980 Volume 5 Issue 3 Page 271 276Ruth Murphy a nd Margaret Bruce, Strategy, accountability, e-commerce and the consumer, Managerial Auditing Journal, 18/3 (2003) pg 193-201 www.emeraldinsight.com/1061-0421.htmPrice bundling and framing strategies for complementary productsRaj Arora University of Missouri Kansas City, Kansas City, Kansas, USAJournal of Product Brand counsel 17/7 (2008) 475484Yadav, M.S. and Monroe, K.B. (2003), How buyers perceive savings in a bundle price an examination of a bundles transaction value, Journal of Marketing Research, Vol. 30 No. 3, pp. 350-8Butera, A. (2000), Cross-selling capitalizing on the opportunities, Hoosier Bank, Vol. 87 No. 7, pp. 14-16.Reichheld, F.F. (1996), The Loyalty Effect The Hidden Force behind Growth, Profits and Lasting Value, Harvard Business School Press, Boston, MA.Reichheld, F.F. and Sasser, W.E. (1990), Zero defections quality comes to services, Harvard Business Review, Vol. 68 No. 5, pp. 105-11.Anderson, E.W. and Mittal, V. (2000), Strengthening the satisfaction-profit chain, Journal of Service Research, Vol. 3 No. 2, pp. 107-20.Day, G.S. (2000), Managing market relationships, Journal of Academy of Marketing Science, Vol. 28 No. 1, pp. 24-30.Jacoby, J. and Chestnut, R.W. (1978), Brand Loyalty, John Wiley Sons, New York, NY.Schiele, G.W. (1974), How to Reach the Young Customer, Harvard Business Review, Vol. 52, March-April, pp. 77-86. http//www.answers.com/topic/market-penetration-2 as on Feb 28, 2010