Research Dimensions

Research Dimensions

ISSN: 2321-5488 Volume – 2|Issue – 2|April -2014

42

A Study of Additional 3P’s of Service Marketing with Special Reference to

Rayat Sevak Co-operative Bank Satara, Maharashtra

Dr. Sawant Vitthal Kundalika

Associate Professor and HOD of Accountancy

Savitribai Phule Mahila Mahavidyalaya Satara

(Maharashtra) India

Email ID : [email protected]

Mobile No. : 9423808100

1. Introduction :

Indian banking sector historically passed through five stages : Pre-independence,

Post-independence, pre-nationalization, nationalization and post liberalization stages. In all

these stages, other than last stage, marketing was always considered not to be a banker’s cup

of tea. But today, it is considered to be an integral management function in the banking

sector. In the present context, there is a high level of competition and rapid pace of change,

marketing is emerging as an important element in bank’s activities.

The Indian Banking Industry can be broadly classified into two major categories namely

‘Non-Scheduled Banks’ and ‘Scheduled Banks’. It is noted that scheduled banks involve

commercial banks and co-operative banks. In terms of ownership commercial banks are

further grouped into nationalized banks, the State Bank of India and its group banks, regional

rural banks and private sector banks. Co-operative banks have a three tier credit structure

system consisting of apex body at the State level [State Co-operative Bank], an intermediary

layer of District Central Co-operative Banks, at District level and Primary Co-operative

Banks/Credit societies at the base level. Co-operative banks have been working as a separate

entity in the Indian Financial system.

As India moves increasingly towards a service economy, marketers need to know more about

marketing service products. Services are activities or benefits that one party can offer to

another that are essentially intangible and do not result in the ownership anything. Thus

services are different from goods. Banking is a special type of business and known as service

industry. Bank marketing is the aggregate of functions directed at providing services to

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satisfy customer’s financial needs and works more effectively and efficiently than the

competitors keeping in view the organizational objectives of the bank. Marketing for service

industry like banks is a philosophy to be understood by the whole organization from the chief

executive to the person working at the counter, customers have become more and more aware

of their requirements.

Marketing mix of any service industry consists of 7 P’s namely

The Traditional 4 P’s : Product, Pricing, Place, Promotion.

The Additional 3 P’s : People, Physical Evidence, Process.

Primary co-operative Banks are also known as Urban Co-operative Banks (UCBs) are

working at base level. ‘Regional concentration’ and ‘Heterogeneity’ these are two important

characteristics of UCBs. The Rayat Sevak Co-operative (RSC) bank is a Salary Earners (i.e.

employees) Co-operative bank coming under category of UCBs. In the present research paper

an attempt is made to study the additional 3 P’s (i.e. people, physical evidence and process)

of service marketing with special reference to Rayat Sevak Co-operative Bank, Satara,

Maharashtra.

2. Profile of RSC Bank :

The RSC Bank Ltd. was established on the 16th August 1940. The bank has completed 72

years of its existence as on 16th August 2012.

The name at the time of registration was ‘The Rayat Sevak Co-operative Credit Society Ltd’.

The credit society was converted into a co-operative bank as on 21st October 1969 and from

the same date the present name i.e. ‘The Rayat Sevak Co-operative Bank Ltd. was

adopted. Late Dr. Karmaveer Bhaurao Patil was the key person in the formulation and

establishment process of society in the year 1940. The lion’s share goes to him. He was the

first chairman of the credit society.

The RSC Bank has Maharashtra state jurisdiction. The bank has 20 branches located within

the area of 8 districts of the Maharashtra state. These branches are located at Karmaveer

Samadhi Parisar-Satara, Ahmednagar, Sangli, Aundhgaon-Pune, Pandharpur, Kopargaon,

Vashi-Navi Mumbai, Baramati, Vita, Sadar Bazar Satara, Dahiwadi, Manchar, Shrirampur,

Karad, Kolhapur, Karjat, Adgaon – Nashik, Lonand and Hadapsar – Pune.

The RSC Bank is the member centric bank formed by employees (i.e. Salary Earners) of

Rayat Shikshan Sanstha in orders to fulfill their financial needs. The initial ‘Regular

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Membership’ at the time of its inception was at 198 which has gone up to 13593 as on 31st

March, 2012. Apart from this bank has 340 ‘Nominal Members’ as on 31st March, 2012. The

small sapling planted in the year 1940 has grown into a big tree in 72 years.

Different deposit schemes are framed by the bank viz. Karmaveer Cash Certificate, Rayat

Bachat Deposit, Subhamangal Deposit, Pension Deposit, Laxmi Dhanvardhini Deposit, Rayat

Lakhapati Yojana, Dam didpat fixed deposit scheme, Dam duppat fixed deposit scheme, Dam

adichapat fixed deposit scheme, Rayat Mauli special fixed deposit shceme etc. Whereas loan

schemes of the bank consists of Jaminki Karz No. 1, 2 & 3, Vehicle security loan, Housing

loan No. 1 and House/Plot Mortgage loan, Deposit security loan, Educational Loan, Gold

security loan, Cash Credit loan and Hire-purchase loan.

All deposits with bank upto Rs. 1,00,000 are insured. Every branch of the bank has an

‘Advisory Committee’. The bank has issued ‘Identity Card’ to its members and employees.

The bank provides financial help as well as help in the form of kind to poor students and

court committed children. The bank is offering 0.50 per cent more interest on deposits of

senior citizens (Age attained 60 years), retired members (age attained 58 years), Rayat

Shikshan Sanstha and its branches and other institutions or credit societies depositing 5 lakh

in lump sum for the period more than one year. The bank has framed ‘Educational Prizes

Scheme’ for successful children of members. The bank has maintained two separate accounts

in respect of ‘Members Welfare’ viz. : ‘Members Welfare Deposit Account’ and ‘Members

Welfare Deposit Interest Account’. Every year the bank gives 1 per cent of it’s current years

profit as donation to Rayat Shikshan Sanstha, Satara. The RSC Bank is working for welfare

and well being of its regulars members.

Table 1

Progress at a Glance of RSC Bank, Satara

Sr. Item Years

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No. 2001-02 2005-06 2011-12

1 Regular Members 15239 14439 13593

2 Share Capital (Rs. in lacs) 1021.53 1421.34 3137.18

3 Total Reserve and Other Funds (Rs. in lacs) 974.57 1441.46 2835.54

4 Deposits (Rs. in lacs) 16316.25 28679.42 53286.17

5 Loans and Advances (Rs. in lacs) 14935.01 21082.23 45277.12

6 Net Profit (Rs. in lacs) 218.85 271.89 515.97

7 Working Capital (Rs. in lacs) 20848.27 32485.20 65199.79

8 Branches 20 20 20

9 Audit classification ‘A’ ‘A’ ‘A’

10 Dividend 16% 15% 11%

(Source : i) Diamond Jubilee Smarnika 2001 of the RSC Bank

ii) Annual Reports 2005-06 & 2011-12 of the RSC bank)

3. Statement of Research Problem :

The present study is entitled as “A Study of Additional 3 P’s of Services Marketing with

Special Reference to Rayat Sevak Co-operative Bank, Satara, Maharashtra”.

The problems to be investigated are :

i) Does the RSC bank have well trained staff?

ii) Does the physical and working conditions available in the RSC bank are proper?

iii) Which processes are developed for better service by the RSC Bank

4. Research Objectives : The present study is carried out with the following objectives

i) To reveal training programmes attended by the people (i.e. working staff) of the RSC

bank.

ii) To study physical evidence and working conditions of the RSC bank.

iii) To indicate processes developed by the RSC bank.

iv) To present conclusion and offer suggestions for improving the effectiveness of the

additional 3 P’s of service marketing mix for the RSC bank.

5. Significance of the Study :

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Marketing area is very wide in any sector. Marketing area helps to generate revenue to the

organization. Bank is a social organization whether is may be commercial or co-operative

bank. Most of commercial banks giving due attention on its service marketing mix for getting

adequate income. But co-operative banks have not implementing proper service marketing

mix and professional outlook for generating its income as compared to commercial banks.

Banking is a very sensitive service therefore a study of the additional 3 P’s of service

marketing of a Co-operative bank is essential.

The present study is undertaken to know what is current position of the RSC bank in regard

to the additional 3 P’s of service marketing. RSC bank is the bank of salary earners.

Segmentation in an essential aspects of marketing. This study reveals segmentation focused

by the RSC bank. The study will helpful for co-operative banks in general and the RSC bank

in particular for enhancing it’s the additional 3 P’s of service marketing in order to survival

and growth.

6. Research Methodology :

The study is primarily based on primary data. The data is collected by conducting survey of

the RSC bank. A Structured Questionnaire is prepared and Questions relating the additional 3

P’s of service marketing are asked to management personnel of the RSC bank. The secondary

data is obtained from the Annual Reports and Diamond Jubilee Smarnika of the RSC bank

and also from published books. The data pertains for the six financial years from 2006-07 to

2011-12. The data processed with simple statistical tools such as percentages and averages.

7. Data Analysis, Presentation and Discussion :

This section of research paper discusses data presentation and analysis.

7.1 People of RSC Bank :

Here, the word people is denoted as ‘employees’. In RSC bank employees play an important

role for providing banking services to customers. Employees must be trained, motivated to

deliver customer expectations. Training helps to improve skills among the employees.

Training and development cannot be separated. The RSC bank is encouraging to its

employees to do training from external agencies because the RSC bank has not its own

training centre. Training programmes assist to enhance productivity of employees in

particular and bank’s in general.

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Table 2

Total Number of Employees and Number of Employees of RSC Bank Attended

Training programmes during six years

Sr.

No.

Year Total No. of

Employees

No. of Employees Attended

Training Programmes

% of Trained

Employees to Total

1 2006-07 177 48 27.12

2 2007-08 174 38 21.84

3 2008-09 171 60 35.09

4 2009-10 166 08 4.82

5 2010-11 161 51 31.68

6 2011-12 159 84 52.83

Average 168 48 28.90

(Source : Primary Data Compiled)

Table 2 displays that, there is gradual decrease in employees numbers due to retirements from

service and no recruitment is done in RSC bank during the study period. There are 159

employees in the RSC bank as on 31st March 2012, of which 1 is General Manager, 4 are

Functional Managers, (i.e. for Account, Administration, Audit & Loan), 20 are Branch

Managers. It means total number of employees of the RSC bank are classified as officers 25

and substaff 134. The average number of employees of the RSC bank is 168. The policy of

RSC bank regarding deputing employees for training programmes is not uniform. During first

3 years, the RSC bank has been deputed more than 20 per cent but below than 40 per cent

employees for training programmes. It is surprising fact that the RSC bank has been deputed

less than 5 per cent of its total number of employees to training programmes in the year 2009-

10. But it is noted that, in the year 2011-12, the RSC bank has been given due attention for

deputing its employees (More than 50 per cent of total) for training programmes. Hence the

average percentage of trained employees to total is 28.90. The RSC bank has required to

frame concrete policy about employees training.

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Exhibit 1 : List of Training Centres wherefrom Employees of RSC Bank have taken

training during six years

Sr. No. Name of the Training Centre

1 District Central Co-operative Bank Ltd. Satara

2 Maharashtra State Employees Co-operative Banks’ Association Ltd. Mumbai

3 Satara District Urban Co-operative Banks’ Association Ltd. Satara

4 Dhananjayrao Gadgil Co-operative Institution, Nagpur.

5 Karad Urban Co-operative Bank Ltd. Karad

6 Satara District Co-operative Board Ltd. Satara

7 Reserve Bank of India, Mumbai.

8 Co-operative Training and Research Centre ‘Yashada’ Pune.

9 Maharashtra State Co-operative Bank Ltd. Mumbai

10 Kolhapur District Urban Co-operative Banks – Recovery Officers Association

11 Gulabrao Patil Co-operative Training Instituion, Sangli.

12 Vaikunth Mehta National Institute of Co-operative Management, Pune.

13 Sahakar Vardhini, Pune

14 Maharashtra State Co-operative Union, Pune.

15 Co-operative Training Centre Ahmednagar

It is observed that, all training programmes were organized by these training centres in the

state of Maharashtra.

Exhibit 2 : Themes of Training Programmes

• Professionalism

in co-operative Banks

• Banking Regulation Act

• Provisions in Income tax Act

• Banking Software

• Know Your Customer (KYC) Policy

• General Administration

• Non Performing Assets

• Norms of Audit

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From the above themes it is found that, majority recent aspects of banking are covered during

these programmes.

7.2 Physical Evidence of RSC Bank :

Customers judge the service quality through physical evidence. And marketers tangiblise the

intangibles of services by providing the physical evidence. Services are dominantly intangible

products that cannot be possessed physically. Physical evidence is used for communicating

service quality attributes and building trust.

The RSC bank has owned premises. The Head office address of the RSC bank is 455/2/20F,

Sadar Bazar Peth, Satara 415001. There are 20 branches of RSC bank of which premises of

13 branches are owned by the bank and 7 branches are working in the rental premises. The

ratio of owned premises to rental premises is of 2:1. Exterior Design is found to the premises

owned by RSC bank but it is not found in case of rental premises. Signboard is shown by

every branch of RSC bank. ‘Writing Table with Pen’, ‘Notice Board’, ‘Suggestions Box’,

sufficient equipments furniture and computers, fire preventive devices are in every branch of

the RSC bank. Sufficient open space is avail in RSC bank premises. ‘Slow and soft music’ is

not found in any branch of RSC bank. ‘Brochures’ about deposit and loan schemes are

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availed by the RSC bank. ‘Lighting and Ventilation’ is also adequate in every branch of the

RSC bank. Guard or Watchman is not found in any branch of the RSC bank. ‘Employee

Dress Code’ is in RSC bank. ‘Interior Design’ of bank premises is found to some extent.

Hence, the ‘Exterior Design’, ‘Interior Ambience’ and ‘Décor’ of the RSC bank are matching

to competitive but not exceed the competitive offering.

7.3 Processes Developed by RSC bank :

The adoption of processes which add value to the service offering without incurring major

cost disadvantages are beneficial to the customers and organization. The responsibility of

introducing such processes lies primarily with operational management, but is also falls

within realm of marketing. The role of customer and employees and the visible elements of

the service are simultaneously displayed in the service map.

During the survey of the RSC bank, it is observed that, the activities like time taken for

withdrawals deposits etc. are not displayed in the premises of the RSC bank branches. So, it

is concluded that, there is a lack of responsiveness about processes development in the RSC

bank.

8. Conclusion and Suggestions :

The RSC bank is the unique bank of Educational Institution employees in the state of

Maharashtra. The RSC bank has Maharashtra State jurisdiction. The RSC bank is

encouraging to its employees to do training from external agencies because the RSC bank has

not its own training centre. The policy of RSC bank in regard to deputing employees for

training programmes is not uniform. Exterior design is found to the premises owned by the

RSC bank. ‘Slow and Soft Music’ is not found in any branch of RSC bank. ‘Employee Dress

Code’ is in the RSC bank. ‘Exterior design’ ‘interior ambience’ and ‘décor’ of the RSC bank

are matching to competitive but not exceed the competitive offering. It has been observed

that the RSC bank has drafted various slips, forms, loan deeds, agreements and documents in

state language (i.e. Marathi) and also in English language. During the survey of RSC bank, it

is seen that the activities like time taken for withdrawals, deposits are not displayed in the

premises of the RSC bank branches.

The RSC bank should undertake a planned programme for development of its additional 3 P’s

(i.e. people, physical evidence and process) of service marketing and draw up plans for next

five years. Such plans should include projections of employees development by means of

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training according to changing circumstances and to adopt modern technology like ATMs

and E-marketing. Efforts should be made for house-keeping issue in innovative manners.

There is need to induct technical staff for handle the complex banking operations. The RSC

bank should provide customer driven training to its employees. Efforts should be made to

acquire or construct own premises for branches having no premises by the RSC bank the

amount of ‘Building Fund’ can be applied for that purpose. The RSC bank has required to

install ‘Slow and Soft Music System’ in its branches for improving productivity of

employees. The RSC bank should develop its physical evidence ability by offering attractive

exterior and interior facilities. In the RSC bank it is necessary to display of ‘Time’ required

for different activities like withdrawals, deposits etc. should not only displayed but adhered to

ensure responsiveness. Changes in ‘Rates of Interest’ should be known and made known to

the customers without delay. The importance of process management is that is assures service

availability and consistent quality.

References

Annual Reports of the Rayat Sevak Co-operative Bank Ltd. Satara of 6 financial years (i.e.

from 2006-07 to 2011-12).

Deshmukh P. G. (2002), ‘Working of Co-operative Bank in India – Overview and

Prospective’; Kanishka Publishers; distributors; New Delhi.

Gupta S.L. and Ratna V. V. (2005); ‘Marketing of Services – An Indian perspective – Text

and Cases’; Wisdom Publishers; Delhi.

Maheshwari S. N. and Maheshwari S. K. (2001); ‘Banking Law and Practice’; Kalyani

Publishers; Ludhiana.

Shankar Ravi (2008); ‘Services Marketing The Indian Perspective Text and Readings’; Excel

Books, New Delhi.

Sundaram and Varshney (1992). ‘Banking Theory, Law and Practice; Sultan Chand And

Sons; New Delhi.

The Rayat Sevak Co-operative Bank Ltd. Satara; Diamond Jubilee Smarnika (2001).

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