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Chapter -1

Theoretical Background

1.1. INFORMATION OF THE INDUSTRY

Banking in India has its origin as early as the Vedic period. It is believed that
the transition from money lending to banking must have occurred even before
Manu, the great Hindu Jurist, who has devoted a section of his work to
deposits and advances and laid down rules relating to rates of interest. During
the Mogul period, the indigenous bankers played a very important role in
lending money and financing foreign trade and commerce. During the days of
the East India Company, it was the turn of the agency houses to carry on the
banking business. The General Bank of India was the first Joint Stock Bank to
be established in the year 1786. The others that followed were the Bank of
Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have
continued till 1906 while the other two failed in the meantime. In the first half
of the 19th century the East India Company established three banks; the Bank
of Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Madras in
1843. These three banks also known as Presidency Banks, were independent

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units are functioned well. These three banks were amalgamated in 1920 and
a new bank, the Imperial Bank of India was established on 27 th January 1921.
With the passing of the State Bank of India Act in 1955, the undertaking of the
Imperial Bank of India was taken over by the newly constituted State Bank of
India. The Reserve Bank which is the Central Bank was created in 1935 by
passing Reserve Bank of India Act 1934. In the wake of the Swadeshi
Movement, a number of banks with Indian management were established in
the country namely, Punjab National Bank Ltd, Bank of India Ltd, Canara
Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India
Ltd. On July 19, 1969, 14 major banks of the country were nationalized and in
15th April 1980, six more commercial private sector banks were also taken
over by the government. Today the commercial banking system in India may
be distinguished into,

PUBLIC SECTOR BANKS

a. State Bank of India and its associate banks called the State Bank
group
b. 20 nationalized banks
c. Regional Rural Banks mainly sponsored by Public Sector Banks

PRIVATE SECTOR BANKS

a. Old generation private banks

b. New generation private banks
c. Foreign banks in India
d. Scheduled Co-operative Banks
e. Non-scheduled Banks

CO-OPERATIVE SECTOR

The co-operative banking sector has been developed in the country to the
supplement the village money lender. The co-operative banking sector in
India is divided into 8 components
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1. State Co-operative Banks

2. Central Co-operative Banks
3. Primary Agriculture Credit Societies
4. Land Development Banks
5. Urban Co-operative Banks
6. Primary Agricultural Development Banks
7. Primary Land Development Banks
8. State Land Development Banks

DEVELOPMENT BANKS

1. Industrial Finance Corporation of India (IFCI)

2. Industrial Development Bank of India (IDBI)
3. Industrial Credit and Investment Corporation of India (ICICI)
4. Industrial Investment Bank of India (IIBI)
5. Small Industries Development Bank of India (SIDBI)
6. SCICI Ltd.
7. National Bank for Agriculture and Rural Development (NABARD)
8. Export Import Bank of India
9. National Housing Bank

Banks safeguard money and valuables and provide loans, credit, and
payment services, such as checking accounts, money orders, and
cheque’s. There are several types of banks, also called depository
institutions, which differ in the number of services they provide and the
clientele they serve. Commercial banks, which dominate this industry,
offer a full range of services for individuals, businesses, and
governments. These banks come in a wide range of sizes, from large
global banks to regional and community banks. Global banks are involved
in international lending and foreign currency trading, in addition to the
more typical banking services. Regional banks have numerous branches

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and automated teller machine (ATM) locations throughout a multistate

area that provide banking services to individuals. Locally based
Community banks offer personal attention, which is helpful to individuals
and small businesses. In recent years, online banks—which provide all
services entirely over the Internet—have entered the market.

Savings banks and savings and loan associations, sometimes called

thrift institutions, are the second largest group of depository institutions. They
were first established as community-based institutions to finance mortgages
for people to buy homes and still cater mostly to the savings and lending
needs of individuals.

The banking sector reforms undertaken in India from 1992 onwards

were basically aimed at ensuring the safety and soundness of financial
institutions and at the same time at making the banking system strong,
efficient, functionally diverse and competitive. The reforms included measures
for arresting the decline in productivity, efficiency and profitability of the
banking sector. Furthermore, it was recognized that the Indian banking
system should be in tune with international standards of capital adequacy,
prudential regulations, and accounting and disclosure standards. Financial
soundness and consistent supervisory practices, as evident in our level of
compliance with the Basel Committee’s Core Principles for Effective Banking
Supervision, have made our banking system resilient to global shocks

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1.1.2. PRIVATIZATION OF STATE BANKS

State banks in India have, over the years, played a very significant role
in the development of the economy and in achieving the objectives of the
nationalization undertaken in 1969 and 1980, namely to reach the masses
and cater to the credit needs of all segments, including weaker sections, of
the economy. The period 1969-90 witnessed rapid branch expansion and an
adequate flow of credit to all sectors, including the neglected sectors of the
country. From 1990, however, it was recognized that steps were needed to
improve the financial health of banks to make them viioble, efficient and
competitive to serve the emerging needs and enhance the efficiency of the
real sector. The role of the large state banks has not undergone any structural
changes. They continue to serve the varying needs of the economy, what has
changed significantly, as a result of the reform process is the focus on their
consolidation, efficiency, resilience, productivity, asset quality and profitability
through liberalization, deregulation and adoption of prudential standards in
line with international best practices.
As a part of financial sector reforms and with a view to giving the state
banks operational flexibility and functional autonomy, partial privatisation has
been authorized as a first step, enabling them to dilute the stake of the Indian
government to 51%. The government further proposed, in the Union Budget
for the financial year 2000-01, to reduce its holding in nationalized banks to a
minimum of 33% on a case by case basis. The major problems for gradual
privatization are likely to be resistance from staff to rationalization of the
branch network and emphasis on higher staff productivity. The optimal size of
a bank depends on several factors and differs between countries depending
on the level of economic development, the number and diversity of financial
institutions/instruments, the competitive situation in the market, etc. Looking at
the typical Indian situation, the big banks operating in international markets
have to coexist with banks operating only at the national level, regional rural
banks and co-operative banks, which will induce the necessary competition in
the market. Most of the state banks have a strong national presence and are

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catering to the needs of various segments of the economy. We do not expect

to split the state banks into smaller entities even after the gradual
disinvestments of government equity in them. Rather, there is a posiobility of
consolidation for synergizing business/regional strengths, and efforts in this
area may be board-driven with the functional autonomy that will emerge as a
result of such disinvestments.

1.1.3. DOMESTIC MERGERS

Under the Banking Regulation Act, banking companies cannot merge

without the approval of the Reserve Bank of India. The government and the
Reserve Bank do not play a proactive role in either encouraging or
discouraging mergers. It is our endeavor that the government and the RBI
should only provide the enabling environment through an appropriate fiscal,
regulatory and supervisory framework for the consolidation and convergence
of financial institutions, at the same time ensuring that a few large institutions
do not create an oligopolistic structure in the market. Mergers should be
based on the need to attain a meaningful balance sheet size and market
share in the face of heightened competition and driven by synergies and
locational and business-specific complementarities.

While there is no regulatory, deterrence to bank mergers, their

incidence has not been significant and hence no problems have occurred in
India. Mergers of banks help to reduce the gestation period for
launching/promoting new places of business, strengthen product portfolios,
minimize duplication, gain competitive advantage, etc. They are also
recognized as a good strategy for enhancing efficiency. Ideally, mergers
ought to be aimed at exploiting synergies, reducing overlap in operations,
right-sizing and redeploying surplus staff either by retraining, alternate
employment or voluntary retirement, etc. As banks are leveraged and the
credibility of the top management has tremendous supervisory implications,

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we prefer consensual mergers to hostile takeovers. The takeover codes

should therefore, reflect the supervisory concerns.

1.1.4. FOREIGN BANKS

The presence of foreign banks does not imply negligence of particular

sectors of the economy. In India, foreign banks are required to comply with
priority sector lending norms, where the commitments are lower than those
applicable to domestic banks under a tailor-made structure suitable to them.
The experience is that foreign banks adhere to the Reserve Bank
prescriptions. Due to their limited knowledge of the local industry and branch
network, foreign banks are very conscious about their asset quality and a
major shift in the share of foreign banks may result in neglect of the credit
requirements of small and medium-sized businesses, whose development is
crucial for emerging markets, but which are perceived as carrying relatively
higher risks. Foreign banks constantly evaluate the political, economic and

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financial climate in financial markets and vary their investment/lending

decisions. While the credit risk management processes and practices vary
among banks, all internationally active banks have centralized policies and
transfer risk monitoring, reporting and limiting mechanisms. While the
traditional scope encompassed only sovereign and transfer risk, large flows of
loans to non-G10 countries. Commercial entities have induced banks to
broaden the scope of country and transfer risk management to incorporate the
potential default of foreign private sector counterparties arising from country-
specific economic factors. In response to the Asian crisis and more recent
events, banks in India are required to strengthen their country and transfer
risk monitoring and analysis in an effort to identify incipient problems and to
adjust exposures more promptly and systematically. While entry of foreign
banks is bound to affect the overall competitive situation in the market, much
depends on the policy of the sovereign in regard to their entry/expansion, the
existing share of domestic banks, etc. One of the main thrusts of the banking
sector reforms in India has been to introduce more competition in the banking
industry with regard to mergers, only very few foreign banks operating in India
have gone through the process of global mergers. The impact of mega
mergers taking place at the global level on the competitive position of the
Indian banking system has been minor, in view of foreign banks limited share
in the financial system. At the same time, foreign banks have the potential,
even without mega mergers, to improve their market share, given their use of
sophisticated technology and capability of introducing innovative products.

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1.1.5. IN BRIEF

The financial sector reforms have brought about significant

improvements in the financial strength and the competitiveness of the Indian
banking system. The prudential norms, accounting and disclosure standards,
risk management practices, etc are keeping pace with global standards,
making the banking system resilient to global shocks.

The efforts on the part of the Reserve Bank of India to adopt and refine
regulatory and supervisory standards on a par with international best
practices, competition from new players, gradual disinvestments of
government equity in state banks coupled with functional autonomy, adoption
of modern technology, etc are expected to serve as the major forces for
change. In the emerging scenario, the supervisors and the banks need to put
in place sound risk management practices to ensure systemic stability.

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1.1.6. BANKING SYSTEM IN INDIA

DEVELOPMENT BANKS

Industrial Development
Land Development
Banks Banks

State Level Land

Development Banks
All India State Level

Primary Land
Development Banks

IFCI LTD ICICI SFC’s SIDC’s

Subsidiary Subsidiary INVESTMENT INSTITUTIONS

Companies Companies

LIC GIC UTI

CREDIT GURANTEE
INSTITUTIONS

ECGC MONEY MARKET INSTITUTIONS DICGCI

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1.2 INTRODUCTION OF THE RESEARCH

TOPIC

The Indian Overseas Bank, which has a tradition of over 75 years of

public trust, stepped into the financial terrain of our country in the year 1937
and was founded by Chidambaram Chettyar. Indian Overseas Bank has
second largest network of branches amongst the old public sector banks -
2018 branches and Extension Counters spread across the country. It has 6
branches abroad.
Because of the fare competition the bank has to know about the
customer’s perception and attitudes towards the bank. The research study
restricted to a particular branch of IOB.

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1.2.1. Who is a customer to a bank?

The multi faceted role of a bank today would classify customers into
any of the following 5 categories

1. Custodian of funds
2. Investor who looks for maximum returns
3. Financier and support in his trade and commerce activities
4. Services for facilitations
5. Advisory services

So when a bank plans a

satisfaction plan for his customer,
the focus would be on which
customer, what attributes of
service does he value, factors of
importance to the customer (which
varies in each of the category and
the profile of the customer) and the
relationship with the respective
customer till date (if any). Banking
still and in future, is nothing but
people management, with banking
as an apparent offering. The plan varies from customer to customer, based on
his profile, to the service providers’ (bankers’) profile, objective/ mission of the
corporate body, relationship till date and macro environment conditions like
fiscal rates, economic status, market trends, brand value of the bank, facilities
offered and cost parameters and many other forces (situational/ cultural /
social etc.).

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1.2.2. TITLE & INTRODUCTION

Title: Customer Satisfaction Towards Indian Overseas Bank” A

Study with reference to (Magadi Road Branch

Introduction: Even in the most primitive society attempts to produce

and sell products for which buyers will have no posioble use will meet with
utter failure. This is simply say that marketers have always been to the choice
of consumers. Consumer’s choice has traditionally involved a major decision.

“Whether buy or not to buy a particular good or service”.

“From whom the products buy”.

Right from the olden days there has been exchange of goods and
services between the buyers and sellers the ultimate success of all the
economic activities has primarily depended on the producer, manufacturing
and selling goods and services desired by the target customers. The ultimate
decision of whether or not to purchase a product or service and from whom to
buy has always been vested in the hands of the ultimate customers.

Since the focus of attention is on consumer, the marketer is always

probing and trying to learn:-
Who buys products / service?
How do they buy products / service?
When do they buy products / services?
Where do they buy goods / services?

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How often do they buy? And so on………..

This shows that there is always an attempt on the part of the marketers
to understand and study “Consumer Behaviour”. This can be reflected as
an attempt to understand and predict human actions in the buying role. The
study of consumer behaviour is comparatively a new research field. Basically
human beings have been sociable in nature and their buying decision or
freedom of choice is determined by the affluence of the individual consumer
and society in question, since consumer is one who will decide whether or not
to buy a particular product, marketers have to understand the role of
consumer in the market and workout marketing program’s accordingly.
Consumer Behaviour is defined as all Psychological, social and physical
behaviour of all potential consumers as they become aware of, evaluate,
purchase, consume, and tell others about products, and service.

Since this is comparatively a new field of study, many persons have

expressed their views on consumer behaviour looking at it from various
angels, understanding of the buyers behaviour will provide insight to the
marketing, manager on how to go about planning and implementing their
various marketing Programmer.

India has a rich and varied culture. It will be interested to understand

the nature and characteristics of the Indian consumers, whose buying
decisions will be based on the influence of the values, beliefs, customs and
practices and behaviour of the particular society of which they are a part. The
consumers also vary in the consumption pattern based on Geographical
location, Density, Population, Urban Rural feature of the consumers Age,
Literacy level, Income, Linguistic Diversity, Religion and Dress, Food habits
and Festivals celebrated.

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1.2.3. THEORITICAL ASPECTS OF THE STUDY

For the successful execution of marketing strategies or for translating

the strategies into meaningful purpose, it is crucial to have a detailed
knowledge of the changing behaviour of users of services. It is very essential
that organizations be well aware of their behaviour as this simplifies their task
of creating and stimulating demand.

Users have values, perceptions, preferences and a behaviour pattern

which are the result of various influences. It is important to assess both
behaviour pattern and user’s characteristics, for in the recent years, users
have become more discriminating in their using habits and so their needs for
different service products and brands are constantly changing. This makes it
essential that the marketers analyse there needs and identify have to improve
marketing products and communications to satisfy them.

1.2.4. INTRODUCTION TO THE CONSUMER BEHAVIOUR

Every marketing activity revolves round the customer he is the focal

point. In the early stages of economic evolution, the consumer had to accept
what producer had produced, but today the consumer dictates terms to the
manufacturer the product he wants, the consumer purchase a commodity as
dictated by their mental and economic forces. Mental force creates desires
and wants and the consumers feel that products offered by
manufactures can satisfy their wants. Hence, he has to
choose between the wants and select the product according
to the priority of consumption. The producer has to consider
these two consumer forces before manufacturing the
products. As consumption initiates production, the producer
should identify the motives, which promote consumer to purchase. This helps
him to offer a total product that can satisfy the consumer needs.
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The consumer’s inner motives such as fear, vanity, pride, fashion,

possession, sex or romance, affection, comfort and economic motives such
as purchasing power are the ones, which decide the buying pattern. With the
increase in the productivity, capacity of many a nation which have far
exceeded the minimum level needed to satisfy the basic needs of the
consumers, the consumers are also in an enviable position to house a product
from an alley of branch available in the market. Today’s marketers have also
realized the discerning buying power of the consumers and they are
constantly trying to adopt their product to suite, the ever-changing needs of
the customers.

The field of consumer behaviour studies how individual groups as

organization select buy use and dispose of goods services ideas or
experiences to satisfy their needs and desires. Smart companies research the
buying decision process involved in their product category and go through
various stages of buying decision process.

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1.2.5. BUYING DECISION PROCESS

PROBLEM RECOGNITION

The buying process starts when the buyer recognizes the problem or
need. The buyer senses a difference between his or her actual state and her
desired state. The need can be triggered by internal or external stimuli.
In the former case, one of the person’s normal needs-hunger, thirst, sex-rises
to a threshold level and becomes a drive. In the latter case, a need is aroused
by external stimuli. Marketers need to identify the circumstances that trigger a
particular need.
INFORMATION SEARCH
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An aroused consumer will be inclined to search for more information.

They may be twelve’s of arouser.

Heighten attention : The Milder search state
Active information search : The actual search state

PURCHASE DECISION

In the evaluation stage, the consumer forms preferences among the

brands in the choice set. The consumer may also form an intention to buy the
most preferred brand. However, factors can intervene between the purchase
intention and purchase decision.

Attitude of others
Unanticipated situational factors

POST PURCHASE BEHAVIOUR

After purchasing the product, the consumer will experience some level
of satisfaction and dissatisfaction. The marketer’s job does end when the
product has brought but continues into the post purchase period. Marketer
must monitor post purchase satisfaction, post purchase action and post
purchase product use and disposal.

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1.2.6. DEFINITION OF CONSUMER BEHAVIOUR

C o n s u m e r s ’

involved in obtaining and using economic goods and service including

decision procure that and determined these acts. “it is the behaviour exhibited
by people in planning, purchasing and using goods and service. A series of
decision will have to be taken like, how much to spent, on what, where to buy,
how to buy, whom to buy etc. Consumer behaviour consists of both physical
and mental behaviour. Physical activities includes, visiting a shop, examining
the product, where as mental activities involves behaviour deliberation within,
forming attitudes, processing the communication and learning to prier a brand.
Some times behaviour is the sum total of the behaviour of a number of people
this makes the study of consumer behaviour complex. It is related to other
fields like physiology, sociology etc.

IMPORTANCE

The importance of studying consumer behaviour is rooted in modern

marketing concept. Businesspersons can help consumers to solve their
consumption problems buy understanding them and trying to analyze the
buying procure and factors influencing it. Consumer behaviour is dynamic; a
continuous study is required to make effective marketing decision. The project
depends on
the pre-disposition that a customer has developed towards the product. It is
helpful to understand why such a pre-disposition has been developed.

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NECESSITY

The emerging consumer movement necessitates markets to

understand consumer behaviour – their needs, aspiration, expectations and
problems. It will be easier in exploiting marketing opportunities meeting
challenges of the markets. Modern marketing is consumer oriented, customer
is the king. Thus marketers must try to offer the product wanted by the
customers at the price he is prepared to pay, through distribution channel,
convenient to him with a right type of promotion. To do this a study of
consumer behaviour is necessary. Consumer decides the existence or
otherwise of a business concern. A consumer by nature may be on extrovert
or on introvert. A study of consumer behaviour helps to formulate the
marketing Programme mix and policies.

FACTORS

To understand consumer behaviour on the eventual buying decisions,

major factors have to clearly understood and analysed.
They are: -

 Buyer characteristics.
 Personal characteristics.
 Psychological characteristics.
 Product characteristics.
 Seller characteristics.
 Situational characteristics.

Buyer Characteristics: It deals with individuals, personal, psychological,

cultural and social characteristics.

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Product Characteristics: Deals with finding out probable type of the

customers who will buy the products. The knowledge personal characteristic
of customer points out who are the buyer, were they live and how they think.
However, the manufacturer wants to know also, why consumer buys a
product and their response or behaviours towards a product or brands. These
may be benefited, expected, usage response, loyalty response, brand loyalty
and the patronage.

Seller characteristics: Influences the buying decision factor lies in the

image of the manufacturing facilities offered in the retail outlets etc also affect
the choice of the buyer.

Situational characteristics: The situational characteristics also play an

important role in influencing the choice decision of the buyer. The aspects
such as time, day seasonal, weather etc, affect the choice decision of
particular Strata of buyer. Thus, purchase activity involves the recognition of
the need to buy, collection of information pertaining to the product, pre-
purchase behavior, actual purchase and the core areas. The modern
marketing management is aimed at consumer behaviors and application of
quantitative methods in problem solving. The researchers have found out that
a clear understanding of consumer behaviors has contributed to positive and
effective technique oriented marketing. As the consumer becomes more and
more sophisticated at progressively higher stages of economic development
which is precisely the citation prevailing in India presently, the need for
consumer behavior and to make use of the findings of such studies in making
marketing decisions gain is of prime importance. The need for proper
understanding of consumer behavior is necessary by the growing competition
in the marketing environment. The advancement in the field of technology and
management and emerge of consumable has also contributed to the need for
the study of consumer behavior.

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Personal characteristics: Deals with how factor like age, sex,

occupation, lifecycle, position and economic conditions or financial conditions
affect the consumer purchase behavior.

Psychological characteristics: Includes motivation, believes,

perception, attitudes and learning.

1.2.7. FACTORS WHICH INFLUENCES BUYER BEHAVIOR

The factors that influence the buyer behavior may be broadly classified
as shown below:-

1. Cultural Factors Culture, subculture and social

class
2. Social Factors Reference group, family and roles
and statuses
3. Personal Factors Age and life cycle stage,
occupation, economic
circumstances, life style,
personality and self concept
4. Psychological Factors Motivation, perception, learning,
beliefs and attitudes.

1. Cultural Factors: Culture is defined as the symbol and artifacts

created

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by people and handed down from generation to generation as determinants

and regulators of human behavior in a given society. Human beings are
learned while
the lower creatures are governed by instinct. A growing child by getting into
contact with the family members and others around it, learns the basic set of
values, perceptions, preferences and behavior, products and marketers
should carefully read the shifts that take place in the culture so that the
product can fit in the new culture. For example, people today want more
leisure and so they are trying to save time by using time saving equipment’s
like washing machines, wet grinders, mixies, micro-oven etc. Similarly by
being more conscious of health, people by goods like shoes which are used
for jogging, consuming good diet food, earning light food, doing more physical
exercises by using cycles, doing workouts in gym, etc. In order to look young,
people spend on cosmetics, hair dyes, footwear, fancy items, etc. People
prefer to be more informal and so they choose causal clothing, use simple
things for furnishing homes, etc.

Subculture is a part of total culture that is reasonable Homogeneous

with regard to race, religion, nationality, geographic location or some other
factor. For instance in a society there may be people with distinct preferences
and produce the product which will match with the quality of a particular
group. Similarly social class is another determining factor, this is major
division of society based on people’s status in their communities. For
example, people who are giving the same status in their communities. For
example, people who are having the same status will have homogeneous
values, interests and behavior; they show distinct product and brand
preferences mostly in areas like clothing, home furnishings, leisure activity
and automobiles.

2. Social factors: Social factors include reference groups, family,

roles and statuses. A reference group may be of different types.
Membership group influences the members directly, while the primary

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group is the one with which a person will be of continuous interaction

with family, neighbors, friends, etc. Secondary group is more formal in
which a person will have lesser interaction. This includes the religious
groups, professional associations of trade unions. Aspiration group is
one in which the persons would be interested in belonging to a
particular group, whereas the dissociate group is one whose values or
behavior an individual rejects. The producers should identify the group
to which, each consumer belongs, especially in the target market.
Normally these reference groups are the opinion leaders of the
community. Marketers should identify the personal characteristics of
the opinion leaders, determine the media read by these leaders, and
direct all their messages to the opinion leaders.

Family is an important factor influencing the buyer behavior. We can classify

family into two types:

1. Family of orientation and

2. Family of procreation
The former includes one’s parents and the parental influence
determines one’s orientation towards religion, policies, etc. for the rest
of the life of a person. The latter includes the husband, wife and
children. These members in a family influence the buyer behavior.
Mostly the husband and wife influence the decision, through
sometimes the children also influence. Normally the purchase of costly
products and services will be decided through joint decisions and the
cheap items are bought with little influence.

The person’s participation in many groups will determine the role he

is to play and the status that he enjoys. For example, with the parents,
a person may play the role of a child, while in this family he may be the
head of the family whereas in his office he may be the marketing
manager. In each group, the person will be influenced by his role.

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Similarly, the status of the person in each group will also determine the
buyer behavior. For instance, a marketing manager should always be
well dressed and the person has to buy only good dresses.

3. Personal Factors: These are personal characteristics of the buyer

like his age, and life cycle stage, occupation, economic circumstances, life
style and personality. The age of a person is a basic factor determining the
buyer behavior. Life cycle refers to the different stages through which one
passes in his life and the varied buyer behavior associated with it.

The life cycle stages include bachelor stage, newly married couples
and full nest 1, the family with a child under six, full nest 2, the family with a
child above six, full nest 3, consisting of older married couples with dependent
children. Empty nest 1 in which the older married couples with no children
living with them, empty nest 2 in which the older married couple with no
children and the head with no job, solitary survivor in labour force and solitary
survivor retired. In each one of these stages, the buyer behavior is different. A
person’s occupation also influences his buyer behavior, a man working as a
president of a company will have a different type of preference as compared
to lower level staff and workers. Similarly, the economic circumstance of a
person will also be an important factor. A man with large savings can buy
costly goods. Marketers of goods giving elastic demand pay continuous
attention to trends in personal income, savings and interest rates. Similarly,
the life style of a person is another factor. Life style is the person’s pattern of
living in the world as expressed in his or her activities, interests and opinions.
The technique of measuring life styles is known as psychographics. It involves
measuring the major dimensions like activities, interests, opinions and
demographics. Personality and self-concept also influence buyer behavior.
Personality is a person’s distinguishing psychological characteristic that
leads to relatively consistent and enduring responses to his or her own
environment. Personality can be used as a variable for analyzing consumer
behavior. Each person has his own concept of image and the image, which

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the others would have about him. This is the basis on which the behavior of
the consumer would differ.

4. Psychological Factors:This factor can be discussed in terms of

motivation, perception, learning, beliefs and attitudes. A person will
have several types of needs like physiological needs, safety needs,
social needs, esteem needs and self-actualization needs.The
marketers should identify the needs of the consumers and produce the
product to match these needs of the customers. Perception is the
process by which an individual selects, organizes and interprets
information inputs to create a meaningful picture of the world.
Therefore, once a person is motivated, he would act depending upon
his perception.

The three perceptual factors viz. selective exposure, distortion and

retention will influence the rate at which the communication from the
producers will influence the buyer behavior. The producers, therefore, have to
carefully design their message. Human behavior is also subject to the
influence of learning which means that a person learns out of experiences.
Based on the personal experience, people’s beliefs and attitude about a
product will depend. Once the people develop faith in the product and a re
favorably disposed towards it, the product will be bought. Hence, all these
factors influence buyer behavior.

1.3.1. GROWTH OF SERVICES MARKETING

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As the United States turned to service economy, it became apparent

many service providers that
marketing their intangible “products”
was becoming increasingly difficult.
Services cannot be seen, heard,
examined, or felt in advance of
purchase, nor is employee
dependent quality consistent over
time. In some industries, such as
transportation or broadcasting,
services are “perishable” in the
sense that they are forever to the
marketer if not consumed at the time
scheduled (e.g., the revenues lost from flying a half-empty plane or airing a
television show without the full complement of commercials can never be
recouped). Not only did service providers need to market, but also they
realized that knowledge of consumer needs and interests was essential to the
development of effective marketing strategies.

1.3.2. THE ROLE OF CONSUMER RESEARCH

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Consumer research is the methodology used to study consumer

behavior. As in any science, consumer behavior theories must be stated and
either supported or rejected before conclusions can be generalized as
principles applicable to marketing practice. Consumer behavior research
enables marketers to carve out new market segments based on variables that
emerge as important discriminators among consumers for specific product or
product category.

To operate successfully, marketing firms must have a through

understanding-explicit rather than implicit-of the factors that encourage
consumers to buy. They have to know why they buy, what needs they are
trying to fulfill, and what outside influences affect their product choices in
order to design persuasive marketing strategies.

1.3.3.THE ROLE OF CONSUMER BEHAVIOR IN STRATEGIC

PLANNING

Strategic planning is a management approach that stresses

organizational adoptability-the adjustment of the firms objectives, its use of
resources, and its operations-to the changing environment. The purpose of
strategic planning is to develop a long-range plan to ensure the company
survival, its profitability, its growth, and its perpetuity. By means of strategic
planning, a company can make things happen, rather than watch things
happen or worse, wonder what happened. Companies that adopt a strategic
marketing approach integrate their marketing plans into their firms overall
strategic plans. Consumer behavior principles can be includes in each step of
the strategic market planning process.

1.3.4 THE SERVICES MARKETING MIX

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The challenges facing the financial services industry mean that grater
emphasis than never before must be placed on developing and implementing
successful marketing programs to create and foster a customer orientation.
True differentiation of financial products is virtually impossible to achieve
because they are intrinsically the same, offering similar benefits and services
to consumers. The degree of substitutability between brands is
correspondingly very high at the outset (for example, at the supplier or
product selection stage). Once a financial product has been sold, however,
the customer is frequently tied in over a long period and may even face
penalties if they wish to change supplier ( as in the case of fixed rate
mortgages) or if they wish to discontinue the service (terminating endowment
or insurance agreements before the full term has expired for example).

The key objectives for financial services providers are;

Attracting customers in the first place

Let the retaining customers through high levels of client satisfaction
and by providing a portfolio of financial services to meet changing
needs over time.

Some key issues that must be taken into consideration in designing the
most effective financial services marketing mix are as follows:

Product:As mentioned previously, there is little or no room for

innovation in product designing due to the ease by which competitors can
make similar offerings, for example by altering charges or interest rates to
meet those of competitors. Additionally, many financial services are affected
by other restrictions, such as government directives relating to income tax and
investments or constraints on the amounts, which can be invested.
Differentiation, therefore, can best be achieved through the other elements of
the marketing mix. Current accounts are dominated by banks, although the
building societies’ share of the market in which they could not compete until

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recently is growing. They hold the majority of mortgage accounts, however,

but this strong hold is increasingly under pressure from banks.

Price: The price in financial services terms related to the costs involved
to the customer in, say, bank charges or credit card interest rates. These
prices seem to evoke low levels of customer sensitivity as many customers
enjoy ‘free’ banking, by maintaining their current account in credit, for
example, or paying their credit card balances off each month. The introduction
of new charges, however, such as the annual credit card fee had a noticeable
effect initially, however, and sparked off competitive reaction from lenders
prepared to offer cards with no annual charge.

Price also relates to the value of the product to the customer and, as
such, can be highly sensitive. This can be in terms of interest rates charged
on a mortgage, were reductions in interest for first time buyers or preferential
rates for existing customers of other services (for example current account
holders) are standard promotional tools in the industry, representing a form of
discounting. The rates of return offered to investors is another element of the
price and different products within the range are frequently priced at different
rates, to attract long-term savers or large lump sum investors, for example
pricing can therefore be used to differentiate the offering and is likely to be
used by customers selecting a service.

Promotion:Banks, building societies and other major financial

institutions such as insurance companies undertake major advertising
campaigns continuously. The main purpose of the advertising is to strengthen
awareness of the brand and company image and to inform the market about
the services available. The Midland’s ‘listening bank’ campaign and the TSB’s
“yes’ campaigns are successful examples. The trend has also been towards
developing more below-the-line promotional activities using highly
sophisticated databases to target direct mail campaigns at distinct market
segments and using publicity, sponsorship and other promotional means.

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Successful advertising campaigns have contributed to the growth of first

directs’ market share although advertising has been used creatively to attract
interest but not to sell the service. That has been done through personal
selling over the telephone once the initial enquiry has been made and staff
and customer care have been developed to enable a strong personal selling
strategy to work.

Another area where personal selling is a strong tool is in the area of

insurance products and the emergence of ‘bank assurance’ – the product
offered through links between banks and insures, commonly with banks as
the controlling partner. The insurance organization’s expertise in personal
selling and the strong customer loyalty and extensive customer base of the
banks make for synergy in business development. The importance of
personal selling is now widely recognized and many institutions offer home
visits by financial advisers.

Place:Place or location has always been regarded as critical in retail

financial services where high street positions are maintained by most of the
large institutions. For transaction services where regular and frequent branch
contact is required, this can be important. First, direct however, the telephone
banking service has proved that a bank without branches is possible though is
customers still need access to convenient ATM outlets. Some consumers
prefer personal, face-to-face contact within a branch and may be more likely
to use a local branch or building society. Direct line and other telephone
insurance services are also moving away from the traditional large networks
of branches and brokers or agents. Changes in distribution system,
technology and consumer demands are all key influences on the evolution of
the ‘place’ component of the marketing mix.

People:Customer care is at the forefront of both quality and

differentiation in the financial services industry. Staffs need to be highly

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trained not only in customer care but in how to respond to the rapidly
changing market environment. Personal can be used to develop competitive
advantage in the marketplace and to build and maintain relationship with
customers.

Process:This is the main area where technological advances led to

major change. Improvements in the process stem not only from the
automation of many transactions and data handling with organizations but
also from process re-engineering to reduce delays in processing mortgage
applications, for example, or the installation of automated queuing systems to
cut down on waiting time. North West Securities, a finance company
specializing in consumer lending, offer existing and previous customers same-
day acceptance of loan applications and will also arrange for courier delivery
of a personal cheque for the loan amount to the customer’s home if required.

Physical Evidence:The environment in banks is changing, moving

away from austerity and formality to a more friendly approach reflected in
more attractive branch layouts and décor. Other physical evidence plays an
important part in financial transactions such as the documentation, which
must be presented by salespeople to prove that they are authorized to offer
investment advice. This created confidence and helps to build the relationship
between customers and provider. Physical evidence is also widely used to
realize the service. Attractive brochures and policy documents, presented in
glossy folders, cheque book and credit card holders, ‘gold’ credit cards,
children’s collectible’ money boxes are all examples of physical evidence
being used in this way.

1.3.6. CUSTOMER SATISFACTION HIGHLIGHTS

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Today in the customer driven economy, all firms are engaged in a

quick race to attract customers and build a long term relationship with their
loyal customer. The key to customer loyalty is through “Customer
Satisfaction”.

A satisfied customer will act as a spokesperson of the company’s product,

and bring in more buyers. There is also a high correlation between loyalty and
profitability.

There is the Pareto principle or the 80/20 rule; it says that 80% of one thing
comes from 20% of another. That is to say, a small percentage of loyal
customers will lend a large weight to the company’s sales. So marketers have
to ensure customer value satisfaction.

For this they have to ensure:

Relationships are built to offer lifetime customer value to enable the

consumer to experience “Value satisfaction”.

Communications are used to convey the experience that goes on using

a “Value” added product to consumers.

The efforts of the marketers in trying to understand buying motives, organizing

buyer behaviour and suitable promotional strategy to suit the consumer
behaviour are to ensure “CUSTOMER SATISFACTION”.

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1.4. NEED FOR THE STUDY

Sales maximization is the ultimate goal of any organization. To capture

a larger market share and sales volume, the organization is required to
consider its customers. They should analyze their needs, wants, preferences
and intentions. For achieving the goal, the organization should know about
customer’s satisfactions level.

“Assessment of Customer Satisfaction Towards Indian Overseas

Bank” will help to find the desired data in a sequential manner.

Further study after implementation of recommendations, the researcher

can analyze the customer’s needs, wants, demands, etc. It will help the bank
to make changes in their products and services according to customer
preferences. And it can throw more light on the subject and can help to focus
attention on vital areas.

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Chapter -2

Design of the study

2. Introduction
As per the author Philip Kotler, Marketing Research is the systematic design,
collection, analysis and reporting of data and findings relating to a specific
marketing situation facing the company.

To meet this objective, the company should know its customers, their needs,
tastes, preferences & condition of markets etc. This information is provides by
Market Research. In this study, we confine to reach the service rendered by
the bank to satisfy the customers.

Theoretically, whatever we study in management courses can be easily

accumulated and understood only when it is used practically. When
theoretically knowledge is put into practice, the problems, obstacles or the
impediments will come out and suitable marketing strategies can be
implemented to solve it, then their will be a perfection and experience and
clear knowledge about the subject in the mind of the learners. That is why in
every management or career advancement courses, Practical Training like
simulations, case study, project Reporting, working situation are given.

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2.1. STATEMENT OF THE PROBLEM

Research problem is selected for the purpose of this project is to study the
consumer behaviour in relation to their perceptions, attitudes, preference,
expectations, satisfaction, dissatisfaction with reference to the Indian
Overseas Bank, Yeswathpur Branch. This study endeavors to collect the
information on usage pattern preferences, important of various service
attributes etc, from the respondents. As the bank is unaware of Bank’s
customers perceptions & tastes, bank face the problem of lack of information
on the above matter.

The main problem is, sometimes it happens that when they are so engaged
with acquiring new customer they sometimes forget their existing customer
and their services issues. Actually retaining the existing customer is also
having same importance as acquiring new customer.
So, this project is all about the existing customer and their satisfaction
level as far as Indian Overseas Bank is concerned.

2.2. TITLE OF THE STUDY

Assessment of Customer Satisfaction Towards Indian Overseas

Bank Ltd, Magadi Road Branch, Bangalore.

Based on:

a. Performance
b. Features
c. Expectations
d. Satisfactory Attributes

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2.4 OBJECTIVE OF THE STUDY

To study the demographic characteristics of the respondents

To study the level of customer satisfaction of the Indian Over

seas bank.

To recommend suggestions based upon the findings

2.5 SCOPE OF THE STUDY

The scope of the study is confined to Magadi Road Branch. The

customers of this branch are covered for generating new leads. Information
was collected from employees, business people, students, and retired
persons through questionnaire. Study is helpful to know the customers
opinion on Indian Overseas Bank and their services.

2.6. SOURCES OF DATA

For the purpose of this study, data from two sources have been
gathered namely;
 Primary Data
 Secondary Data

Primary Source: are original source, which are collected directly

from the respondents. This information is collected through questionnaire,
personal interview and through observation.
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Secondary Source: are those that containing data which have

been collected and compiled for another purpose. These sources consist of
readily available information and already complied statistical statement whose
data may be used by the researchers for their study.
The secondary sources include Annual Reports, Journals, Articles as
well as magazines and manuals.

2.7. SAMPLING DESIGN PLAN

Sample unit:
Individual who is the existing customer of Indian Overseas Bank,
Magadi Road Branch, Bangalore.

Sample Technique:
The tool used in this research is structured questionnaire.

Sample size:
Hundred existing customers of Indian Overseas Bank, Magadi Road
Branch considered as sample size.

2.10 TOOLS OF DATA COLLECTION

A carefully planned structured questionnaire was designed to collect data

from the account holders. The following aspects were covered in the
questionnaire: -

I. Information related to customer profile covering all demographic

characteristic.

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a. Details regarding patterns of usage of different account.

b. Information related to type of account.
c. Features of IOB appealing the customers most.
d. Consumer’s expectations.
e. Satisfactory attributes.
f. Suggestions to improve the services of IOB

II. Plan of analysis and expected contribution from the study.

Through scrutiny of the entire questionnaire was done so as to
eliminate questionnaire which either incomplete or contained
contradictory information. Then the questionnaire was numbered in
order.
After that the coding were done either with the first letter of the answer or
with serial number of the questions.

2.11 LIMITATIONS OF STUDY

The limitations of the study are as follows:

The study has to complete within a short span of time that was
available.
The case study pertains to only one branch of the Indian Overseas
Bank due to the limitation of time frame.
Findings are based on the records available at the Indian Overseas
Bank and the information provided by the bank.
It is possible that this study may differ from a similar study carried out
else were.
This study is restricted to customers only.
Sample size is restricted to 100 respondents only.

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2.12 CHAPTER LAYOUT

The chapter layout of this project report is as follows:

First Chapter deals with, Information of the Industry (history,

growth & prospects), Introduction of the Research Topic, Theoretical
Background of Research Topic (Definitions, Importance, Necessity,
etc), and Need for the Study.

The Second Chapter is Research Design. In this, the following

topics were covered. Brief Introduction, Statement of the Problem, Title
of the Study, Objective of the Study, Scope of the Study, Research
Design of the Study, Sources of Data, Methodology of Research
Design, Sampling Design Plan, Tools of Data Collection, Method of
Analysis and Limitations of the Study.

Third Chapter Conclude the Review of Literature. It helps in

identifying gaps in knowledge. It is referred to standard textbooks,
journals, project reports, newspaper, and magazines.

The Fourth Chapter of this report is dealing with the Company

Profile. It includes Features, Vision Statement, Mission Statement,
Performance, Product Profile, Competitors Profile, etc). Fifth Chapter is
Deals with the Profile of Respondents.
The Sixth Chapter is Data Analysis and Interpretation. It
includes Tables, Inferences, Charts, etc.
The Seventh Chapter includes Findings and Conclusion of the
Survey. Finally the Eighth Chapter Conclude the Recommendations
and Suggestions for the Research Topic. The Suggestions for the
future developments has also mentioned in this chapter.

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Chapter -3

COMPANY PROFILE

Indian overseas bank was founded on 10 th febraury 1937 by shri

M.CT.M Chidambaram Chettyar, a pioneer in many fields - the bank was
founded by him with the main objective of specializing in foreign exchange
business in banking to take the bank across the globe

IOB had the unique distinction of commencing business on 10 th February

1937 – The inaugural day itself in 3 branches simultaneously – at Karaikudi,
Chennai and Rangoon in Burma (presently Myanmar) followed by a branch in
Penang, Malaysia.

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3.1. FEATURES OF INDIAN OVERSEAS BANK

The following are some of the features and performance of the Indian
Overseas Bank.

 1937: Shri.M.Ct.M. Chidambaram Chettiar establishes the Indian

Overseas Bank (IOB) to encourage
overseas banking and foreign
exchange operations. IOB started up
simultaneously at three branches, one
each in Karaikudi, Madras (Chennai)
and Rangoon (Yangon). It then
quickly opened a branch
in Penang and another in Singapore.
The bank served the Nattukottai
Chettiars, who were a mercantile
class that at the time had spread
fromChettinad in Tamil Nadu state
to Ceylon (Sri
Lanka), Burma (Myanmar), Malaya, Singapore, Java, Sumatra,
and Saigon. As a result, from the beginning IOB specialized in foreign
exchange and overseas banking (see below).
 1960s: The banking sector in India was consolidating by the merger of
weak private sector banks with the stronger ones; IOB absorbed five
banks, including Kulitali Bank (est. 1933).
 1969: The Government of India nationalized IOB. At one point,
probably before nationalization, IOB had twenty of its eighty branches
located overseas. After nationalization it, like all the nationalized banks,
turned inward, emphasizing the opening of branches in rural India.
 1988-89: IOB acquired Bank of Tamil Nadu in a rescue.

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 2000: IOB engaged in an initial public offering (IPO) that brought the

government's share in the bank's equity down to 75%.
 2009: IOB took over Shree Suvarna Sahakari Bank, which was
founded in 1969 and had its head office in Pune. In 2001 it had acquired
the Mumbai-based Adarsha Janata Sahakari Bank, which gave it a branch
in Mumbai. Shree Suvarna Sahakari Bank has been in administration
since 2006. It has nine branches in Pune, two in Mumbai and one
in Shirpur. The total employee strength is estimated to be little over 100.

 2007: IOB took over Bharat Overseas Bank.

 2009: IOB took over assets and liabilities of Shree Suvarna Sahakari
Bank.
 2010: Malaysia awarded a commercial banking license to a locally
incorporated bank to be jointly owned by Bank of Baroda, Indian Overseas
Bank and Andhra Bank. The new bank, India International Bank
(Malaysia), will reside in Kuala Lumpur, which has a large population of
Indians. Andhra Bank will hold a 25% stake in the joint-venture, Bank of
Baroda will own 40% and IOB the remaining 35%.

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3.2. IMPORTANT MILESTONE

During the year 2009-10,the bank has taken all efforts to implement the
official language Policy of Govt of india. During the year, 248 staff members,
who did not possess working knowledge of hindi, were trained in IOB Praveen
and banking Pragya courses. 2809 staff members, possessing working
knowledge of Hindi were trained in general hindi workshops held during the
year. Rajbhasha Sangoshi was held on September 12, 2009 for heads of
central office departments to strengthen the official language implementation
in central office.
Minutes of meeting of all board level committees were translated in Hindi. As
per the directives of Govt of India, the bank has enabled Hindi Unicode font in
all regional offices and has provided the facility of Hindi font shusha on IOB
ONLINE for downloading purpose in branches. Bank has also provided the
banking terminology on IOB ONLINE for the benefit of staff members. Bank
has given necessary training to 2445 staff members for the use of Hindi in
computers. Bank has published all the four issues of quarterly Hindi magazine
“VANI” in print as well as in digital form. Bank’s website has been made
available in Hindi also.

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3.3. ORGANIZATION CHART

BOARD OF DIRECTORS

CHAIRMAN

EXECUTIVE DIRECTOR

GM (ADMINISTRATION) CHIEF GEN.MANAGER

DY.GM DY.GM DY.GM DY.GM DY.GM

(CR.RECOVERY) (CR.ADMN)
(MKTG) (CFM)
(P&D)

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3.4.PERFORMANCE OF THE BANK

Bank has posted encouraging results during the year 2009-10,

against many odds faced by the banks especially in the context of continued
macro economic stresses.

The bank has performed reasonably well, both in terms of qualitative

improvements in business levels, including improved credit recovery process
and better internal controls and systems and quantitative growth in the
network and customer base. Further, a number of initiatives aimed at
facilitating customer convenience have also been undertaken. To meet the
growing demands from the customers and increasing challenges in the
market, the technological capability was improved substantially by the
implementation of the prestigious Sakthi project; the objective of the bank is to
train women to improve their vocational skills thereby empowering them
socially and financially.

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3.5. THE
HIGHLIGHTS OF THE
BANK’S PERFORMANCE

Table: - 4.1

KYE PARAMATERS RS. IN CRORES

March 2010 Sept 2010

Global Deposits 1,10,795 1,18.142

Domestic Deposits 1,05,434 1,13,704

Global Advances 80,782 88,072

Domestic Advances 73,026 79,255

Priority Sector Advances 27,237 27,850

Agricultural Credit 12,597 13,245

SME 11,660 11,901

Gross NPA 3,611 3,326

Net NPA 1,995 1,765

Gross Profit 1,844.62 1,079.57

Net Profit 706.96 406.59

Business per Employee 7.12 7.81

Branches in India (Nos.) 2002 2013

Branches Abroad (Nos.) 6 6

Capital Adequecy Ratio (%) (Basel 1) 14.25 12.55

Capital Adequecy Ratio (%) (Basel 2) 14.78 13.16

SHARE CAPITAL
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The bank made a successful debut in raising capital from the public
during financial year 2000-01 despite a subdued capital market. The issue
opened on September 25 2000 for raising Rs 111.20 Crores and was
oversubscribed by 1.87 times. The issue closed on September 29 2000- the
earliest closing date and allotment was made in October 2000. The bank had
approached the public for second time in September 2003 to raise share
capital with a premium of Rs14/share aggregating to Rs 240Crores. The issue
was successful with over subscription of 6.14times. consequent to public
issue, the share of the Govt in banks capital came down to 61.25% the shares
of the bank have been listed in the madras stock exchange(regional), stock
exchange at Mumbai and at national stock exchange of India ltd.

CAPITAL ADEQUACY

Capital adequacy ratio of the bank improved from Rs 13.20% as at the

end of the march 2009 to 14.78% as at the end of march 2010 as per the
BASEL IT norms.

BRANCH NETWORK

The bank opened 65 new branches and upgraded 20 extension

counters into full fledged
branches in the year ended
march 2010. Total domestic
branch network reached 2002
as at the end of the year with

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589 rural branches (29.4%) 520 semi urban branches (26%) 492 urban
branches (24.6%) and 401 metropolitan branches (20%)

DIVIDEND

The bank has paid a maiden dividend of

10%p.a for 2000-01, followed by 12% dividend
for 2001-02 & 16% for 2002-03 , 20% during
2003-04, 24% during 2004-05, 26% during
2005-2006, 30% during 200-07, 35% during
2007-2008 & now proposed 45% 2008-09.

DEPOSITS

The banks global deposits stood at

Rs.1,00,116 Crores & global net advances
at Rs.75810 Crores.

ADVANCES

Gross advances stood at Rs.80782 Crores for the year 2009-10 as

against Rs. 75810 Crores for the year 2008-09.

INVESTMENTS

Net investment of the bank increased to Rs 37651 Crores from Rs

32215 Crores in 2008-09.

RISK MANAGEMENT
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The bank has adopted the

new capital adequacy
framework with effect from March 31, 2008. In line with RBI’s instructions to
all commercial banks, the bank is adopting standardized approach (SA) for
computation of credit risk capital, basic indicator approach (BIA) for
calculating the capital for operational risk and standardized duration
approach (SDA) for computing capital requirement for market risks. The bank
is in compliance with the regulatory requirement in this regard.

NEW BUSINESS ACTIVITIES

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IOB- SAMPOORNA PROJECT- the bank launched an innovative rural

development project aiming at total village development called IOB-
SAMPOORNA in Kothambakkam and Paddur villages in Tiruvallur district,
Kameswaram in Nagapattinam district, Dhaliyur village in Coimbatore district
and Innambur in Tanjavur district of Tamil Nadu. It encompasses several
livelihood initiatives in the villages to ensure all inclusive growth of rural
population.

The project comprises both credit and non credit components such as
financial inclusion, IT enabled banking operations with bio metric smart cards
under business correspondent model, tree planting and social forestry,
cleaning water bodies, health care, skilled training for youth in computer and
BPO , rural business process out sourcing, promotion of non conventional
energy and rural tourism.

INTERNAL TRAINING

The internal training system comprises of a staff college, 9 staff training

centers and one rural banking training centre. Internal training was imparted
to 15613 staff comprising of 8548 officers, 5915 clerical and 1150 sub-staff by
conducting 995 programmes. Of the total staff trained 3205 belonged to SC
and 1104 belonged to ST.

3.6. PRODUCT PROFILE

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LOANS AND ADVANCES:

Shubha Gruha (Acquisition/Construction Of a Flat Or House)

Home Improvement Scheme (Repairs/Renovation Of House/Flat)
Home Décor Scheme (To Furnish The House)
Home Loan to NRI (Purchase Or Construction)
Sanjeevini (To Set Up New Hospital/Nursing Home)
IOB - Akshay (Loan Against LIC Policy)
Pushpaka (Vehicle Loan)
Vidya Jyothi Educational Loan Scheme
Easy Trade Finance (Working Capital Finance)
Liquirent (Loan against future rent receivables)
Clean Loan (Personal Loan)
Pensioners Loan Scheme (Pensioners Emergency Needs)
Sahayika (Personal Loan)
Commercial Cash Credit Against Jewellery (Cash For Jewellery)
Home Loans For Relatives Of NRI

DEPOSIT SCHEMES:

Savings Bank Accounts

Current Accounts
Fixed Deposits
Fast Cash Deposits
Recurring Deposits

COMPETITORS OF INDIAN OVERSEAS BANK

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 Canara Bank

 Corporation Bank

 Syndicate Bank

 ICICI Bank

 HDFC Bank

 City Bank

 SBI

 HSBC

 Vijaya Bank

 Karnataka Bank

 Punjab National
Bank

 Standard Chartered Bank

 UCO Bank

 South Indian Bank

 ING Vysya

 Bank of Baroda

 Andhra Bank

 UTI Bank

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 Dena Bank

 Bank of Muscat

 Global Trust Bank

 Co-operative Banks etc.

Chapter -4

Analysis and Interpretation of Data

In this report, a survey is conducted to know the customer satisfaction

towards Indian Overseas Bank. The study is based upon a particular branch
and its customers.

For the purpose of this survey, questionnaire was prepared and their
feedback had to be obtained; hence, customers were contacted at Indian
Overseas Bank itself and also at their work place as well. There were male
respondents more then female respondents. 100% of respondents are
educated, most of them are graduates, and they
were employed. Most of the respondents choose
to transact in Indian Overseas Bank because of its
convenience and they had good relations with

the employees. 60-70%

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of the respondents are transacting in the bank above 2 years. Every

respondent insisted that they need quality of service from the bank and their
suggestions were also considered in this report.

Objective 1: Demographic Characteristics

Table 4.1: No of Respondents According to age.

Age No. Of Respondents Percentage

18-25 years 20 20%

26-35 years 40 40%

36-45 years 28 28%

46 and above 12 12%

Total 100 100%

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The above table inferred that the bank has a maximum customers aging
between 26-35 years and 36-45 years which is very good for the bank, simply
because these are the people who are earning a lot and who will have
frequent transactions in the bank.

It has also got customers ageing between 18-25 years. Hence, it can be
analyzed that the bank has customers proportionately spread out with the
group 18-46 years.

No. Of Respondents According to Age

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No. Of Respondents
18-25 years 26-35 years 36-45 years
46 and above Total

10%

20%

50%

6% 14%

Figure 4.1: The Chart showing that the Bank has 20% of customers
between 18-25 years. 40% are 26-35 years of age and 28% of
ranges between 36-45 and 12% in the age of 46 and above.

Table 4.2: No of Respondents According to Gender.

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Gender No. Of Respondents Percentage

Male 75 75%

Female 25 25%

Total 100 100%

The bank has a maximum of 75% Male customers.

No of Male customer 75%

No of Female customer 25%

It can be inferred that the behaviour in expectation of service also changes

according to nature of sex.
Hence behaviour of the Male customers is considered much in this
survey but due consideration are given to the female customer as well in
respect of their views, suggestions for their satisfaction also.

No. Of Respondent According to Gender

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No. Of Respondents

Male
Female
Total

Figure 4.2: The pie chart showing that the bank has got 75% of Male and
25% of Female respondents.

Table 4.3: No of Respondents According to Occupation.

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Occupation No. Of Respondents Percentage

Student 15 15%

Salaried 35 35%

Retired 05 5%

Self-employed 10 10%

Business 35 35%

Others 0 0%

Total 100 100%

The customers in Indian Overseas Bank according to occupation are more or

less either self employed, business, or salaried. Students and retired persons
are very less.
Hence, what ever the feedback is given by customers in this survey is
authentic because the customers maximum are well educated and well
employed.

No. Of Respondents According to Occupation

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No. Of Respondents

Student
8%
Salaried
18%

Total
50%
Retired
3%

Business Self-employed
18% 5%

Figure 4.3: The Chart showing that the Bank has maximum of salaried,
Business, and Self-employed customers ranging between 35%,
35%, and 15% respectively. Students and Retired people are
10% and 5%.

Table 4.4: No of Respondents According to Monthly Income.

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Monthly Income No. Of Respondents Percentage

Below Rs.5000 12 12%

Rs.5001-10000 29 29%

Rs.10001-15000 26 26%

Rs.15001-20000 18 18%

Rs.20001 & Above 15 15%

Total 100 100%

Indian Overseas Bank has majority of customer’s monthly income ranging

from Rs.5001-10000. And a part of customer’s earnings is more than
Rs.20001. It is clear that the customer of the bank is having good earnings.

Hence, the customers have routine transactions in the Bank, where

they have to interact with the employees more often.

No. Of Respondents According to Monthly

Income

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No. Of Respondents

Below Rs.5000
Rs.5001-10000
Rs.10001-15000
Rs.15001-20000
Rs.20001 & Above
Total

Figure 4.4: The Chart shows that the customers’ monthly income ranges
between Rs.5001-20001 and above i.e., 29%, 26%, 18%, 15%.
There are very few customers whose earnings are below 5000.

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Objective 2 : Level of customer satisfaction

For the analysis and interpretation 100 customers data were collected in the
overall study. The data showing in the following tables is based upon this
information.

Table 4.5: Showing Respondents responding to type of A/c

They have in IOB.

Type of A/C No. Of Respondents Percentage

SB 52 52%

FD 24 24%

CD 14 14%

RD 10 10%

Total 100 100%

From the table it can be inferred that, Indian Overseas Bank has a maximum
number of customers with SB A/C. Compare to SB A/C other accounts are
very less.

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No. Of Respondents According to their Type of

Account

No. Of Respondents

SB
26%

Total
50%

FD
12%

CD
7%
RD
5%

Figure 4.5: The Chart showing that maximum of 52% of the customers in
Indian Overseas Bank have S.B. account and 24% have Fixed
account. The bank is also having the customers as 14% in
Current Deposits and 10% in Recurring Deposits.

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Table 4.6: Showing most appealing features of IOB.

6.2 [1] Prompt Service:-

Particulars No. Of Respondents Percentage

Excellent 15 15.79%

Good 45 47.37%

Average 30 31.58%

Below Average 5 5.26%

Total 95 100%

The performance weightage clearly indicate the image of IOB in its

customers. The data shows that 45 respondents have weighted the prompt
service of IOB in the good category, while 30 respondents have weighted it as
average. A sample of 15% respondents has graded IOB in category of
Excellent.
But five of the respondents are not even given any suggestions.

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Customers Satisfaction in Prompt Service

5
15

Excellent
30
Good
Average
Below average

45

Figure 4.6: The chart shows that 15 customers rated as excellent

and good, average & below average are as 45, 30, and 5.

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4.7. Convenience:

Particulars No. Of Respondents Percentage

Excellent 30 30%

Good 20 20%

Average 50 50%

Below Average 0 0%

Total 100 100%

It can be inferred that, the respondent’s convenience is in a good position.

Fifty percentages of the customers are convenient with the banks services.

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Customers Satisfaction in Convenience

No. Of Respondents

Excellent
15%

Good
10%
Total
50%

Average
25%

Figure 4.7: The chart shows that 30 customers rated as excellent, 20

as good and 50 as below average.

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4.8.Timings:-

Particulars No. Of Respondents Percentage

Excellent 46 46%

Good 32 32%

Average 22 22%

Below Average 0 0%

Total 100 100%

The above data inferred that a majority of the customers are satisfied with the
banking hours. A lesser part is not fully satisfied with the timings. But, overall,
classification highlights that working hours of the bank are not below average.

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Customers Satisfaction in Banking Hours

22

Excellent
46 Good
Average
Below average

32

Figure 4.8: The chart shows that 46 of customers graded as

excellent, 32 respondents as good and 22 as average.

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Table 4.9. Showing Performance of Bank’s Staff.

4.9. Job Knowledge:-

Particulars No. Of Respondents Percentage

Excellent 24 24%
Good 60 60%
Average 16 16%
Below Average 0 0%
Total 100 100%

A customer who comes to the bank is having a good opinion on the job
knowledge of the bank staff. Most of the respondents are satisfied with the job
knowledge of the bank’s staff.

Job Knowledge of Bank’s Staff

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No. Of Respondents

Excellent
Good
Average
Below Average
Total

Figure 4.9.The pie chart shows that 60 respondents opinion is good. 24%
rated as excellent, and 16 respondents rated as good.

4.10.Behaviour of Staff Over the Counter:-

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Particulars No. Of Respondents Percentage

Excellent 38 38%

Good 42 42%

Average 20 20%

Below Average 0 0%

Total 100 100%

From the above data it can be inferred that the behaviour of staff over the
counter is in a good manner. Form this it is clear that the staff’s of the bank
are very co-operative with the customers.

Hence, most of the respondents are satisfied with the behaviour of the
staff.

Behaviour of Staff Over the Counter

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No. Of Respondents
Excellent Good Average Below Average Total

19%

50%

21%

10%

Figure 4.10: The chart shows that 38 customers response is excellent,

42 of them rated as good and 20 as average.

Table 4.11: Showing Respondents Opinion on Service

Charges.

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Particulars No. Of Respondents Percentage

High 13 13%
Average 42 42%
Low 25 25%
Can’t say 20 20%
Total 100 100%

What ever the service charge the bank charging, is not in a high or in a low
rate. So, the bank is implementing a service charge in an average rate.

Respondents opinion on service charges

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No. Of Respondents
High
7%

Average
21%

Total
50%

Low
13%

Can’t say
10%

Figure 4.11. The above figure shows that 13 respondents rated as high & 42
respondents as average. 25 customers says that there is a low
service charge and 20 customers graded as cant’ say.

Table 4.12. Showing Respondents Expectations with IOB.

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Particulars No. Of Respondents Percentage

E-Banking 10 10%
Human Communication 02 2%
Better Services 18 18%
Long Working Hours 12 12%

More Branches 11 11%

Higher Interest 10 10%
Wider ATM’s 37 37%
Others 0 0%
Total 100 100%

The tabulated data reveals that most of the customers are expecting more
ATM counters and more branches. Some customers need higher interest,
better services and long working hours.

Respondents Expectations with IOB

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10%
2%

37%
18%

12%
10%
11%

E-Banking Human Communication Better Services

Long Working Hours More Branches Higher Interest
Wider ATM's Others

Figure 4.12. From the above chart 37% of the customers feels wider ATM’s
is necessary. 18 respondents expecting better services. 11% of
the customer’s expectations are in more branches for their
better convenience. E Banking and Higher Interest is expected
by 10% of respondents in each.

Table 4.13. Showing Respondents Level of Satisfaction with

IOB.

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Particulars No. Of Respondents Percentage

Highly Satisfied 12 13.33%

Satisfied 62 68.89%

Neither Satisfied
Nor Dissatisfied 16 17.78%
Dissatisfied 0 0%

Highly Dissatisfied 0 0%

Total 90 100%

It is clear from the above table that the dissatisfaction is very less among the
customers, and only very few customers rated as neither satisfied nor
dissatisfied. And there are few customers who are highly satisfied with the
service provided by the IOB. Some of the respondents are not mentioned any
of their opinions.

Respondents Level of Satisfaction with IOB

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No. Of Respondents
Highly Satisfied Satisfied Neither Satisfied Nor Dissatisfied
Dissatisfied Highly Dissatisfied Total

7%

34%
50%

9%

Figure 4.13. From the figure it is clear that 13.33% of the customers are
highly satisfied with the bank. 68.89% of the customers
also rated as satisfied. 17.78% response is neither
satisfied nor dissatisfied.

Table 4.14 Showing Satisfactory Attributes According to

Respondents Preference.

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The satisfaction analysis is the major part of this study. The satisfaction
of the customer can be analyzed through various indicators.

4.15. Wide Network ATM’s:-

Particulars No. Of Respondents Percentage

High 0 0%

Average 20 20%

Low 80 80%

Total 100 100%

From the table, it can be inferred that respondents satisfaction in ATM

counters are very less. Here most of the customers are rated as low. So, it
reveals that customers are expecting more ATM counters for their proper
convenience.

Satisfaction Among Wider ATM’s

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20%

80%

High
Average
Low

Figure 4.15. The above figure shows that 80% of respondents rated as low
because there is very less number of ATM Counters.

4.16. Branches:-

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Particulars No. Of Respondents Percentage

High 0 0%

Average 60 60%

Low 40 40%

Total 100 100%

From the tabulated data, it can be inferred that the number of IOB branches is
either average or below average as 60% of the respondents rated it as
average while another 40% where not satisfied with the number of branches.

Satisfaction Among Branches

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Chart Title
High Average Low Total

30%

30%

50% 50%

20%

20%

Figure 4.16. The above figure shows that 60% of respondents rated as
average and 40% as low.

4.17. Services:-

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Particulars No. Of Respondents Percentage

High 12 12%

Average 64 64%

Low 24 24%

Total 100 100%

From the above data it is inferred that most of the respondents are satisfied
with the services provided by the bank. Hence, the bank is having a good
service structure.

Satisfaction in Bank’s Services

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No. Of Respondents
High Average Low Total

6%

32%

50%

12%

Figure 4.17. The pie chart shows that 12% rated as high, 64% as average
and 24% as low.

4.18. Return on Investment:-

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Particulars No. Of Respondents Percentage

High 0 0%

Average 60 65.22%

Low 32 37.78%

Total 92 100%

The above data shows that average customers are satisfied with the return on
investment. Some of the customers are expecting more return, form their
deposits. Hence, the data reveals that, whatever the return on investment
providing the bank, it has to improve.

Customer Satisfaction in Return on Investment

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No. Of Respondents
High Average Low Total

33%

50%

17%

Figure 4.18. The pie chart shows that 68% rated as average and 32% rated
as low return on investment.

4.19. Technological Adoption:-

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Particulars No. Of Respondents Percentage

High 37 37%

Average 55 55%

Low 08 08%

Total 100 100%

From this Data, it is inferred that the technological adoption of the bank is
good. It is clear that the bank is adopting the new technological skills in their
services. Most of the customers are satisfied with the technological adoption
of the bank.
So, the Bank is having a very good technological adoption in their
operations.

Technological Adoption of Bank

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Chart Title
High Average Low Total

19%

19%

50% 50%
28%
28%
4%

4%

Figure 4.19. The figure Shows that 37% of the respondents rated as high,
55% as average and 8% as low technological adoption.

4.20. Wide Product Profile:-

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Particulars No. Of Respondents Percentage

High 16 16%

Average 64 64%

Low 20 20%

Total 100 100%

The customers are satisfied with the product profile of the Bank. Bank is
having a wider product profile. Hence, the percentage of dissatisfaction
with the bank’s products is very low.

Product Profile

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No. Of Respondents
High Average Low Total

8%

32%
50%

10%

Figure 4.20. The pie chart shows that 16% of the respondents graded as
high, 64% of them as average and 20% of the
respondents rated as low product profile.

Table 4.21. Showing Respondents opinion about the statement,

“Indian Overseas Bank Provides Better Service then Other
Bank’s”.
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Particulars No. Of Respondents Percentage

Strongly Agree 0 0%

Agree 27 27%

Neither Agree
Nor Disagree 65 65%
Disagree 8 8%

Strongly Disagree 0 0%

Total 100 100%

From the above figure we can see that there are only few customers’
who agree with the statement. It shows that most of the customers do not
have very good opinion about the bank, but 65% of the customers say that
they neither agree nor disagree with the statement, that means they are
satisfied but any point of time these customers can change if they face any
problem with the bank. Disagree percentage is in a lower level, so we can say
that they are performing well because they have only very less disagree.

“Indian Overseas Bank Provides Better

Services than Other Banks”

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No. Of Respondents
Strongly Agree Agree Neither Agree
Nor Disagree Disagree Strongly Disagree
Total
14%

50%

33%

4%

Figure 4.21. The above chart shows that 22% of the customers agree
with the statement. At the same time 65%, neither
agrees nor disagrees. And 13% disagree with the
statement.

Chapter -5

Summary of findings and suggestions

5.1. Introduction
Research problem is selected for the purpose of this project is to study the
consumer behaviour in relation to their perceptions, attitudes, preference,
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expectations, satisfaction, dissatisfaction with reference to the Indian

Overseas Bank, Yeswathpur Branch. This study endeavors to collect the
information on usage pattern preferences, important of various service
attributes etc, from the respondents. As the bank is unaware of Bank’s
customers perceptions & tastes, bank face the problem of lack of information
on the above matter.

The main problem is, sometimes it happens that when they are so engaged
with acquiring new customer they sometimes forget their existing customer
and their services issues. Actually retaining the existing customer is also
having same importance as acquiring new customer.
So, this project is all about the existing customer and their satisfaction
level as far as Indian Overseas Bank is concerned.

5.2. summary of the FINDINGS

 Most customers in the bank are Male, Female customers are very less.
 Most of the respondents are well educated.
 29% of the customers monthly income is in between Rs.50001 to
Rs.10000/- and 26% of the customer’s monthly income is in between

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Rs.10001 to Rs.15000. 15% of the respondent’s earnings more than

Rs.20001.
 A large number of customers in Indian Overseas Bank are having SB
A/C.
 It is found that 15% of the customers satisfied with the Prompt Service
of the bank. 30% is not fully satisfied.
 From the study is clear that 50% of the respondents are convenient
with banking.
 Around 75% of the respondents are satisfied with the banking hours.
 Job knowledge of the bank’s staff is excellent.
 Behaviour of staff over the counter is good.
 Service charges of the bank are in an average position.
 60% of the customers are satisfied with Indian Overseas Bank.
 80% of the respondents are expecting more ATM counters.
 It is found in this survey that, 60% of respondents expecting more
branches.
 75% of the response is good in the technological adoption of the bank.
 More than 70% of customers are satisfied with the wider product profile
of the bank.
 In this survey 27% of the respondents are agree with the following
statement “Indian Overseas Bank Provides Better Services than Other
Banks”

CONCLUSION

A customer is an important visitor on the premises of any organization.

A regular feed back regarding his/her needs, wants, preferences and
intentions help the organization in functioning more effectively.
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When consumer satisfaction is improved it spreads satisfaction to the

employees, supervisors, manager and the bank. It even helps society
and the nation through better utilization of the resources of the bank.

The suggestions given in the study will help the organization to improve
functioning and achieve success in the future years of investments. By
implementing the suggestions given, the bank not only satisfies the
customers but it can also delight them, which is very important for the
growth of business of the bank.

Many learned authors have played every important role in consumer

behaviour techniques. Every bank or organization has to select the
right techniques suitable for the organization so as to give full
satisfaction to the customers.

I am thankful to the Indian Overseas Bank for giving me the opportunity

to complete this project in their bank, which was a learning experience
for me.

5.4. SUGGESTIONS

 ATM Counters: Indian Overseas Bank should have to provide a large

number of ATM’s. So that the customers’ can fully utilize the service,
especially the customers’ that cannot turn up to the bank in it’s working
hours.
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 Branches: The bank should try to open more branches in and around
Bangalore, so that the customers can make use of that according to
their convenience.

 Customer Research Study: The bank can do a customer research

study, yearly or half yearly to get more information about the customers
likes, dislikes and can change the Bank’s attitudes and policies to
provide satisfaction to the customer.

 Advertisement: Indian Overseas Bank customers are unaware of its

loan schemes, interest rates, credit schemes, simply because the bank
lacks publicity, so it requires more advertisement.
a) Advertisement can made through print media and T.V.
b) A package of bank’s latest interest rates, loan schemes, credit card
schemes and its future offerings can be shown, where the customer
will be aware of Indian Overseas Bank’s offerings and by which the
bank can also attract more customers.

 Training Schemes for Employees: The bank should implement a

well-designed training scheme for employees which focuses on
interpersonal communication team work innovation, leadership,
customer orientation, soft skills, etc, which helps in dealing with
customers that in turn will help both the customers and also the bank to
improve its business.
 Electronic Display Board: An electronic display board can be kept in
the reception, in which continuous display of interest rates, loan
schemes, credit card schemes, financial assistance to women, and
different types of A/C can be shown.

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 Special Offers: They should provide some special offers to their old
customers who have been with them for more than a particular period,
which can help to increase the satisfaction level.

 New Packages: The bank should provide some unique package to

attract the new customer. A package of banks latest interest rates,
Loan Schemes, Credit cards schemes and its future offerings can be
shown, where the customer will be aware of Indian Overseas Bank’s
offerings and by which the bank can also attract more customers.

 Internet Banking: Indian Overseas Bank should provide the Internet

Banking Facility for its customer’s. The uses of Internet Banking Facility
for its customers are as follows:

 Customer can check his or her account balance and information

about uncleared funds, ledger balance, overdraft and sweep-in
amount.
 Customer can also view his/her transactions for a specific period
and request for his/her statement via mail.
 Through a new FD Request, Customers can open a Fixed
Deposit Account.
 Customers can make a FD Inquiry on his/her Fixed Deposit.
 Customers can use this facility to communicate with the bank for
clarifications and feedback.
 Customers can Request for a stop payment of a cheque online
by just entering the cheque number.
 Customers can request a DD or BC without coming to the bank
and have it couriered to them at their mailing address.
 Customer can register for bill pay and enjoy the ease and
convenience of paying his or her electricity, telephone and
mobile phone bills online.

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 Customers can request for a new cheque book through online,

which will be couriered to them at their mailing address.

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