A Project Report

On
“CUSTOMER RELATIONSHIP MANAGEMENT”
Submitted in partial fulfillment of the requirement for the award of the degree of
Master of Business Administration

Submitted by
Nita Banerjee
MBA/1040/08
Under the guidance of
Mr . Ramkrishna Prasad Singh
(Territory manager)
Birla Sun Life Distribution Company Limited
(Wealth Management)
Ranchi-01, Jharkhand.

Department of Management
Birla Institute of Technology
MESRA, RANCHI-835215.

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CERTIFICATE OF APPROVAL
The foregoing project entitled “CUSTOMER RELATIONSHIP MANAGEMENT” is hereby
approved as a credible study of research topic and has been presented in a satisfactory manner to
warrant its acceptance as a prerequisite to the degree for which it has been submitted.
It is understood that by this approval, the undersigned do not necessarily endorse any conclusion
drawn or opinion expressed therein, but approve the project for the purpose for which it is
submitted.

(Internal examiner) (External examiner)

2
 DECLARATION

I hereby declare that the project CUSTOMER RELATIONSHIP MANAGEMENT submitted

by me in partial fulfillment of the requirement for the award of Master of Business
Administration of Birla Institute of Technology is my original work and no part of this report
has been submitted earlier to any university or institution for the award of any other degree,
Diploma. Fellowship or any other similar titles and the work have been published in any journal,
Magazine, Periodicals or Newspaper as an article or research paper.

NITA BANERJEE

BIT MESRA, RANCHI.

3
 Acknowledgement
This project has been a collaborative effort. I take this opportunity to thank all who have helped
me in the preparation and successful completion of this project work.
I express my sincere gratitude to the management of Birla Sun Life Distribution Limited, Ranchi
for their kind consent given to me to complete my training in the organization. The immense
help and support received from BSDL thereafter overwhelmed me during the project.
I express my thanks to Mr. Ramkrishna Prasad Singh (Territory Manager, BSDL, Ranchi),
my corporate guide for his supervision of my work. He gave valuable inputs throughout my
project work.
I thank Miss Abhilasha Kumari (Customer Relationship Manager, BSDL, Ranchi) who
helped me in my area of concern. I would like to thank Mr. Ashit Ranjan (Unit Manager,
BSDL, Ranchi) for his valuable insights, Mr. Ratnaraj Saha( Branch Manager, BSDL,
AMC) who provided me the knowledge on Mutual Funds and Mr. Vidyut Raha(Executive,
Apollo Sindhoori) for educating me on equity market.
I express my sincere thanks to the management of Birla Institute of Technology, Mesra for
their kind cooperation and encouragement.
I would also like to thank my parents for their support and encouragement.

DATE: NITA BANERJEE

BIT, MESRA, RANCHI.

4
 PREFACE
Theoretical knowledge particularly in professional field is of little significance or value without
its practical applications in real life situations. This is where summer training helps in making us
students familiar with the professional setup. My summer training gave me an exposure of the
corporate culture and during this process, I came to know the ups and downs of the job. My job
at BSDL also gave me an opportunity to link my theoretical knowledge with the practical aspects
of the job.
The financial sector has gained a lot of importance in recent times. People are investing more
and more in the various investment tools like Insurance, Mutual funds, Equities, Gold and such
others. The public sector has been a major player in this area ever since the Indian independence
but the scope of the Finance industry has increased after the private companies entered the
market. Liberalization has played a major role in opening up the Indian economy and today
many foreign companies, jointly with Indian companies, deal in financial products.
Many companies offer financial products in India and the Aditya Birla group is one of the key
players in the private sector. It is a well known fact that the name BIRLA speaks for itself and it
needs no special introduction. It ranks fourth in the Insurance industry and fifth in Mutual funds.
Birla Sun life Distribution Limited, a wing of the Aditya Birla group is a premier wealth
management company that emphasizes on investment advisory and financial planning. Ranked
among the top players in this segment, BSDL is driven by knowledge, expertise and experience.
Its product range covers:

 Life Insurance
 Mutual Funds
 Equity Broking
 Gold
 Real Estate

The first part of the project gives us an overview of the various investment tools like insurance,
mutual funds, SIPs, equities, real estate. The second part gives us an idea about my topic that is
―customer relationship management”, its uses and areas of application. The language has been
kept simple so that even a layman could understand. The third part consists of the survey and its
analysis. The data collected has been well organized and presented with the help of graphs and
charts. Hope the research findings and conclusions will be of use.

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 CONTENTS
1. INTRODUCTION 7

2. OBJECTIVES OF THE STUDY 8

3. COMPANY PROFILE 9-20

4. OVERVIEW OF INVESTMENT TOOLS 21-34

5. CUSTOMER RELATIONSHIP MANAGEMENT 35-41

6. SEGMENTING AND TARGETING 42-43

7. MY PROGRESS AT BSDL 44

8. OBSERVATION AND LEARNING 45-52

9. RESEARCH METHODOLOGY 53

10. SURVEY 54-58

11. FINDINGS 59

12. RECOMMENDATIONS 60

13. CONCLUSION 61

13. BIBLIOGRAPHY 62

14. APPENDICES 63-65

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 Introduction
Need for Study
The Project ―CUSTOMER RELATIONSHIP MANAGEMENT‖ deals with how financial
organizations build relationships with new customers and enhance their services in order to
retain the existing clients. Dealing with customers is one of the most delicate and complex tasks
that an organization has to face. The main purpose behind opting for this topic was to get an idea
as to how the financial sector adopts and implements CRM because when it comes to
investments people would like to deal with the best vendors.
When we look around us we see that the hand of business touches us in every walk of life. We're
faced with products and services at every single turn. However not many of those products and
service providers know the person who uses them. Major corporations fail to realize that it is the
customer who is their biggest ally. Sometimes their employees prefer to treat them with
indifference, at times with arrogance and sometimes even with anger. The customer is in reality
the king, the one who makes the difference between a company‘s success and failure and yet the
companies are all prone to making the same mistake at some point of time.

This grave mistake, so often overlooked yet so profound in its impact, making the difference
between the success and failure of million dollar enterprises is a company‘s "attitude" towards its
customers. This approach is by far the most vital in any organization.
Most organizations have an extremely faulty customer centered system. Several millions are lost
yearly as corporations scramble to make profits, beat competitors, and stay ahead in the rat race
but they are not open to customer suggestions and more often than not they do not provide the
customer with a proper avenue to vent his ideas. This often leads to unhappy customers and
eventually their loss. This is where proper Customer Relationship Management becomes
important as it helps business use technology and human resources to gain insight into the
behavior of customers and the value of those customers.
As customers gain more and more knowledge about a particular product, their perception
towards it changes. Customer perception becomes an important component of relations with
customers. An organization should be prepared to deal with the changes in customer perception.
This project has helped me enhance my knowledge about the importance of Customer relations,
particularly in the financial sector.

After working at BSDL for over a month and interacting with the existing customers I found out
that they are quite satisfied with the services that they get there. I came to know about the
various CRM activities carried out there and how the employees place service over everything
else.

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 Objectives
1. Proper understanding of the various investment tools that form the financial sector.

2. Know the importance of Customer Relationship Management in the financial sector.

3. Conduct market survey on a sample selected from the entire population and derive
opinions based on the research.

4. According to the market survey, get to know about the investment scenario among
individuals in Ranchi.

5. Prepare a report based on the survey.

6. Find out the most popular investment tool among people.

7. Study of the CRM practiced at Birla Sun Life Distribution Limited.

8. Customer perception about the various investment tools available.

9. Know ways to improve customer service.

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 COMPANY PROFILE

LATE ADITYA BIRLA KUMAR MANGALAM BIRLA

Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where
success does not come in the way of the need to keep learning afresh, to keep
experimenting.

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 Company Profile

Aditya Birla Group

The Aditya Birla Group is India's first truly multinational corporation. Global
in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value
creation for its multiple stakeholders.

The Aditya Birla Group‘s products and services offer distinctive customer solutions worldwide.
The Group has operations in 20 countries - India, Thailand, Laos, Indonesia, Philippines,
Egypt, China, Canada, Australia, USA, UK, Germany, Hungary, Brazil, Italy, France,
Luxembourg, Switzerland, Malaysia and Korea.

A US $28 billion corporation with a market capitalization of US $31.5 billion and in the League
of Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000
employees, belonging to 25 different nationalities. Over 50 per cent of its revenues flow from its
operations across the world.

Its 66 state-of-the-art manufacturing units and sectoral services span India, Thailand,
Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China.

The Aditya Birla Group is a dominant player in all of the sectors in which it operates. These
sectors include viscose staple fibre, non-ferrous metals, cement, and viscose filament yarn,
branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators and financial
services. The Group has also made successful forays into the IT and BPO sectors.

In India, the Group has been adjudged “The Best Employer in India and among the top 20 in
Asia” by the Hewitt-Economic Times and Wall Street Journal Study 2007.

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 IMPORTANT FACTS AT A GLANCE

Globally the Aditya Birla Group is:

(1). A metals powerhouse, among the world's most cost-efficient aluminium and
copper producers. Hindalco-Novelis is the largest aluminium rolling company.
It is one of the three biggest producers of primary aluminium in Asia.

(2). No.1 in viscose staple fibre.

(3). The fourth largest producer of insulators.

(4). The fourth largest producer of carbon black.

(5). The 11th largest cement producer globally, the seventh largest in Asia and the
second largest in India.

(6). Among the world's top 15 BPO companies and among India's top four.

(7). Among the best energy efficient fertilizer plants.

In India:

(1). A premier branded garments player.

(2). The second largest player in viscose filament yarn.

(3). The second largest in the chlor-alkali sector.

(4). Among the top five mobile telephony companies.

(5). A leading player in life insurance and asset management.

(6). Among the top three supermarket chains in the retail business.

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 LIGHTING OUR PATH

Vision
________________________

To be a premium global conglomerate with a clear focus on each business.

Mission
_______________________

To deliver superior value to our customers, shareholders, employees and society at large.

VALUES
______________________

(1). Integrity

(2) .Commitment

(3). Passion

(4). Seamlessness

(5). Speed

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 Various Companies of Aditya Birla Group

SECTORS COUNTRY

1. ALUMINIUM:

Hindalco industries limited India

Indal( subsidiary of Hindalco)

2. COPPER:

Birla Copper (Hindalco industries limited) India

Hindalco Industries Ltd. (Aditya Birla Minerals Limited) Australia

3. CEMENT:

Grasim Industries Ltd.

UltraTech Cement Ltd. India

4. CARBON BLACK:

Aditya Birla Nuvo Ltd (Hi-Tech Carbon) India

Thai Carbon Black Co. Ltd. Thailand
Alexandria Carbon Co. S.A.E Egypt
Liaoning Birla Carbon Co. Ltd. China

5. TEXTILES:

Grasim Industries Limited India

AV Cell Inc. Canada
AV Nackawic Inc. Canada

6. FERTILIZERS:

Indo Gulf India

Birla Copper (Hindalco Industries Ltd.)

7.CHEMICALS:

Grasim Industries Limited

Aditya Birla Nuvo Limited India
Tanfac Industries Ltd.
Aditya Birla Chemicals (India) Limited
Aditya Birla Chemicals(Thailand)Limited Thailand
Thai Peroxide Co. Ltd. Thailand
PT. Indo Raya Kimia Indonesia
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 SECTORS COUNTRY
8. MINING:

Essel Mining and Industries Limited India

9. FATTY ALCOHOL/FATTY ACID:

Pan Century Surfactants Inc. Philippines

10. INSULATORS:

Aditya Birla Insulators India

11. SOFTWARE:

PSI Data Systems Limited

(subsidiary of Aditya Birla Nuvo Ltd.) India

12. BPO:

Aditya Birla Minacs Worldwide Limited India

(subsidiary of Aditya Birla Nuvo Ltd.)

13. FINANCE AND INSURANCE:

Birla Global Finance Company Limited

Birla Sun Life Insurance Company Limited
Birla Sun Life Asset Management Limited India
Birla Sun Life Distribution Company Limited
Birla Insurance Advisory Services Limited

14. TELECOM:

Idea Cellular India

15. RETAIL:

Aditya Birla Retail Limited India

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 Sun Life Financial Inc.
Sun Life Financial Inc. is a leading financial services organization headquartered in Toronto,
Canada, operating in key markets around the world.

The Sun Life Financial group of companies and their joint ventures offer individuals and
corporate customers a diverse range of financial products and services that fall into two principal
business areas: wealth management and protection. Throughout its international operations, Sun
Life Financial has an employee base of approximately 13,800 people plus an extensive global
distribution network of career sales forces, independent agents, investment dealers and financial
planners.

Tracing its roots back to 1865, Sun Life Financial Inc. and its partners today have operations in
key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong,
the Philippines, Indonesia, India and China. As on 30th June 2007, Sun Life Financial Inc.
manages assets worth CDN $435 billion.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE)
stock exchanges under ticker symbol "SLF".

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 Aditya Birla Nuvo
Aditya Birla Nuvo Ltd is a diversified conglomerate and the platform that has launched many
new businesses for India‘s premier business house, the Aditya Birla Group. Aditya Birla Nuvo
has a balanced portfolio of traditional and new age businesses under its fold, ranging from
textiles to life insurance.

The razor sharp focus on each business has made it a leading player in most segments, including
viscose filament yarn, carbon black, branded garments, agri business, textiles and insulators.
Over the past few years, Aditya Birla Nuvo, through its subsidiaries and joint ventures, has made
successful forays into life insurance, telecom, business process outsourcing (BPO), IT services,
asset management and financial services.

Powered by an intellectual capital of over 37,000 employees and an optimum mix of revenue
and profit streams, the company is in a strong position to invest in high growth businesses to
maximize long-term shareholder gains.

As a leading player, Aditya Birla Nuvo ranks as:

 India's second largest producer of viscose filament yarn (VFY).

 The country's largest premium branded apparel company.
 The second largest producer of carbon black in India.
 Largest manufacturer of linen fabric in India.
 Among the most energy efficient fertilizer plants.
 India‘s largest and the world‘s fourth largest producer of insulators.

Among Aditya Birla Nuvo‟s joint ventures and subsidiary companies are:

 Idea Cellular Limited, the fifth largest mobile telephony service provider in India.
 Birla Sun Life Insurance, one of the leading life insurance companies in India.
 Birla Sun Life Asset Management, one of the leading asset management companies in
India.
 Aditya Birla Minacs Worldwide Limited, among the top five BPO players in the country
by revenue size.

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 Birla Sun Life Distribution Company Ltd ('BSDL')

Birla Sun Life Distribution Company Ltd ('BSDL') is a wholly owned subsidiary of Aditya
Birla Nuvo Ltd. (Nuvo). Earlier it was established as a joint venture between Aditya Birla Nuvo
and Sun Life (India) Distribution Investments. In March 2009, Nuvo purchased the remaining
50.001 per cent stake from its joint venture partner. The company was launched in the year 1999
with the vision to be 'the first preference of our customers as a leading integrated provider of
financial services through superior value creation and technology. BSDL offers wealth
management, financial planning and investment solutions, mainly through a range of products
like mutual funds, insurance, PE funds, alternate investments, select fixed deposits and
IPOs and structured products. The company provides life insurance products of Birla Sun Life
Insurance, sourced through its wholly owned subsidiary BSDL Insurance Advisory Services Ltd
(BSDLIAS), licensed to act as a Corporate Agent of Birla Sun Life Insurance Company Limited.
The Corporate & Institutional section caters to banks, financial institutions and other companies;
Wealth Management service focuses on HNIs; while the Retail section offers solutions through
Channel Partners and branches. A combination of personal attention, ethical practices, strong
research, state-of-the-art technology, streamlined processes and innovative marketing has made
BSDL one of the premier distribution companies in India, well poised to serve the growing
economy and increasing investor population. BSDL has also been honoured with awards and
certifications by leading industry watchers.

Noteworthy achievements:

 Among the top distributors in the country with AUM (Assets under Management) of Rs
12,242 cr (as of 31 March 2008) from 2.5 lakh investors.

 Network of 40 branches in 29 cities across India and growing, besides over 7,800
business associates.

 Employee strength of over 450, five times of last year; slated to cross 1,000 soon.

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 Some of the popular products of Birla Sun Life:
Mutual Fund

1. Equity Funds-

(1). Diversified Funds:

(4). Cash Funds:
a) Birla Sun Life Frontline Equity
Fund. a) Birla Sun Life Cash Plus Fund.
b) Birla Sun Life Tax Plan.. b) Birla Sun Life Cash Manager.
c) Birla Sun Life Index Fund
3. Hybrid Funds-

(2). Theme Based Funds: (1). Balanced Funds:

a) Birla Sun Life Infrastructure a) Birla Sun Life ‗95 Fund.

Fund. b) Birla Sun Life Freedom Fund.
b) Birla Sun Life Gen Next Fund.
c) Birla Sun Life Opportunity Fund. (2). Monthly Income Plan:

a) Birla Sun Life MIP.

(3). Sectoral Fund: b) Birla Sun Life MIP-2.

a) Birla Sun Life Buy India Fund. (3). Fund of Funds:

b) Birla Sun Life New Millennium
Fund. a) Birla Sun Life Asset Allocation
Fund.
2. Debt Schemes-
(1). Long Term: (4). Capital Protected Funds:

a) Birla Sun Life Income Fund. a) Birla Sun Life Capital Protection
b) Birla Sun Life Dynamic Bond Oriented Fund.
Fund.
4. Offshore Schemes:
(2). Gilt Funds:
a) India Advantage Fund.
a) Birla Sun Life Gilt Plus Fund. b) Excel India Fund.
b) Birla Sun Life Government
Securities Fund.

(3). Short Term Funds:

a) Birla Sun Life Savings Fund.
b) Birla Sun Life Short Term Fund.

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 Life Insurance Schemes

1. Protection- 5. Children Plan-

a) Birla Sun Life Insurance Term a) Birla Sun Life Insurance Children
Plan. Dream Plan.
b) Birla Sun Life Insurance
Premium Back Term Plan.
6. Rural Schemes-

2. Saving-
a) Birla Sun Life Insurance Bima
a) Birla Sun Life Insurance Dream Suraksha Super.
Plan.
b) Birla Sun Life Insurance Saral b) Birla Sun Life Insurance Bima
Jeevan Plan. Dhan Sanchay.
c) Birla Sun Life Insurance
Platinum Plus.
7. Rider Schemes-

3. Health Solutions-
b) Birla Sun Life Insurance
a) BSLI Health Plan. Accidental Death Rider.
b) BSLI Universal Health Plan. c) Birla Sun Life Insurance Term
Rider.
d) Birla Sun Life Insurance Critical
4. Retirement Schemes- Illness Rider.
e) Birla Sun Life Insurance Waiver
a) Birla Sun Life Insurance Secure of Premium
58 Plan.

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 Apollo Sindhoori Capital Investments Limited (ASCIL)
Apollo Sindhoori Capital Investments Limited (ASCIL) is a leading player in broking space
with nearly 14 years of experience. Incorporated in 1995, the company became a part of Aditya
Birla Group in March 2009, when the Group acquired 76 per cent of the company through
Aditya Birla Nuvo.The Aditya Birla Group is a household name in India, a US $28 billion
conglomerate that is in the league of the Fortune 500 companies. The Aditya Birla Group has a
strong presence across various financial services verticals as a part of the Aditya Birla Financial
Services Group (ABFSG) that include life insurance, fund management, distribution and
wealth management, security based lending, insurance broking and private equity.

The six companies representing ABFSG are:

a. Birla Sun Life Insurance Company

b. Birla Sun Life Asset Management Company
c. Birla Sun Life Distribution Company
d. Aditya Birla Capital Advisors
e. Birla Global Finance Company and,
f. Birla Insurance Advisory and Broking Services.

The consolidated revenues from these companies crossed the US $1 billion mark, in 2007-2008.
Headquartered in Chennai, ASCIL is listed on the National Stock Exchange of India Limited
(NSE) and the Bombay Stock Exchange Limited (BSE). It is also registered as depository
participant with both National Securities Depository Ltd. (NSDL) and Central Depository
Services (India) Limited (CDSL).

ASCIL offers following services:

1. Trading facility in equity segment on and derivative segment on NSE and BSE
through a single screen
2. Trading facility in commodity segment, including bullion, oils, gaur seed etc. through
its subsidiary, Apollo Sindhoori Commodities Trading Limited
3. Depository Participant (DP) services of NSDL and CDSL at major locations
4. Online bidding for initial public offering (IPO)
5. Distribution of mutual funds

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INVESTMENT
TOOLS

21
 MUTUAL FUND

Concept and Introduction of Mutual Fund:

In a mutual fund, many investors contribute to form a common pool of money. This pool of
money is invested in accordance with a stated objective. The ownership of the fund is thus joint
or ‗mutual‘; the fund belongs to all investors. A single investor‘s ownership of the fund is in the
same proportion as the amount of the contribution made by him bears to the total amount of the
fund.
A mutual fund uses the money collected from investors to buy those assets which are specifically
permitted by its stated investment objective. Thus a growth fund would buy mainly equity assets-
ordinary shares, preference shares, warrants etc. An income fund would mainly buy debt
instruments such as debentures and bonds. The units held by an investor evidence the ownership
of the fund‘s assets. The value of the total assets of the fund when divided by the total number of
units issued by the mutual fund gives the value of one unit. This is called the Net Asset Value
(NAV) of one unit.

Characteristics of Mutual Fund:

 The Mutual Fund belongs to those investors who have invested their money for future
earnings.
 It is managed by professionals who charge the fees for their services, from the fund.
 Investors purchase Mutual Fund shares from the fund itself (or through a broker for the
fund) instead of from other investors on a secondary market.
 The price that investors pay for Mutual Fund shares is the fund's per share NET ASSET
VALUE (NAV) which is updated every day plus any shareholder‘s fees that the fund
imposes at the time of purchase (such as sales loads).
 Mutual Fund shares are "REDEEMABLE," which means investors can sell their shares
back to the fund (or to a broker acting for the fund).
 Mutual Funds generally create and sell new shares to accommodate new investors. In
other words, they sell their shares on a continuous basis, although some funds stop selling
when, for example, they become too large.
 The investment portfolios of mutual funds typically are managed by separate entities
known as "ASSET MANAGEMENT COMPANY".

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 TYPES OF FUNDS

Schemes According to Maturity Period:

A mutual fund scheme can be classified into open-ended scheme or close-ended scheme
depending on its maturity period.

(A). Open-Ended Fund/ Scheme:

An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently
buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis.
The key feature of open-end schemes is liquidity. These funds are not generally listed on any
exchange.

(B). Close-Ended Fund/ Scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open
for subscription only during a specified period at the time of launch of the scheme. Investors can
invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the
units of the scheme on the stock exchanges where the units are listed. In order to provide an exit
route to the investors, some close-ended funds give an option of selling back the units to the
mutual fund through periodic repurchase at NAV related prices. These mutual funds schemes
disclose NAV generally on weekly basis.

Schemes According to Investment Objective:

A scheme can also be classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. Such schemes may be open-ended or close-ended schemes
as described earlier. In general, mutual funds fall into three general categories:
 Equity Funds invest in shares or equity of companies.
 Fixed-Income funds invest in government or corporate securities that offer fixed
rates of return.
 Balanced Funds invest in a combination of both stocks and bonds.

(A). Growth / Equity Oriented Scheme:

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such
schemes normally invest a major part of their corpus in equities. Such funds have comparatively
high risks. These schemes provide different options to the investors like dividend option, capital
appreciation, etc. and the investors may choose an option depending on their preferences.
Growth schemes are good for investors having a long-term outlook seeking appreciation over a
period of time.

23
(B). Income / Debt Oriented Scheme:
The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky compared to equity schemes.
These funds are not affected because of fluctuations in equity markets. However, opportunities
of capital appreciation are also limited in such funds.

(C). Balanced Fund:

The aim of balanced funds is to provide both growth and regular income as such schemes invest
both in equities and fixed income securities in the proportion indicated in their offer documents.
These are appropriate for investors looking for moderate growth. They generally invest 40-60%
in equity and debt instruments. The NAVs of such funds are likely to be less volatile compared
to pure equity funds.

(D). Money Market or Liquid Fund:

These funds are also income funds and their aim is to provide easy liquidity, preservation of
capital and moderate income. These schemes invest exclusively in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and inter-bank call money,
government securities, etc. Returns on these schemes fluctuate much less compared to other
funds.

(E). Gilt Fund:

These funds invest exclusively in government securities. Government securities have no default
risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic
factors as is the case with income or debt oriented schemes.

(F). Index Funds:

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P
NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weight age
comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or
fall in the index, though not exactly by the same percentage due to some factors.

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 SYSTEMATIC INVESTMENT PLAN (SIP)
 What is Systematic Investment Plan? :

 A specific amount should be invested for a continuous period at regular intervals

under this plan
 SIP is similar to a regular saving scheme like a recurring deposit. It is a method of
investing a fixed sum regularly in a mutual fund.
 SIP allows the investor to buy units on a given date every month. The investor
decides the amount and also the mutual fund scheme.
 While the investor's investment remains the same, more number of units can be
bought in a declining market and less number of units in a rising market.
 The investor automatically participates in the market swings once the option for
SIP is made.

 Benefits of Systematic Investment Plan:

a) Power of compounding: The power of compounding underlines the essence of making

money work if only invested at an early age. The longer one delays in investing, the
greater the financial burden to meet desired goals. Saving a small sum of money regularly
at an early age makes money work with greater power of compounding with significant
impact on wealth accumulation.

b) Rupee cost averaging: Timing the market consistency is a difficult task. Rupee cost
averaging is an automatic market timing mechanism that eliminates the need to time one's
investments. Here one need not worry about where share prices or interest are headed as
investment of a regular sum is done at regular intervals; with fewer units being bought in
a declining market and more units in a rising market.

c) Convenience: SIP can be operated by simply providing post dated cheques with the
completed enrolment form or give ECS instructions. The cheques can be banked on the
specified dates and the units credited into the investor's account. The SIP facility is
available in the Principal Income Fund, Monthly Income Plan, Child Benefit Fund,
Balanced Fund, Index Fund, Growth Fund, Equity fund and Tax Savings Fund.

d) SIP features: Disciplined investing is vital to earning good returns over a longer time
frame. Investors are saved the bother of identifying the ideal entry and exit points from
volatile markets. SIP options such as equity, debt and balanced schemes offer a range of
investment plans. While there is no entry load on SIP, investors face an exit load if the
units are redeemed within a stipulated time frame. The success of the SIP hinges on the
performance of the selected scheme. The plan aims at a better future for its investors as
an SIP investor gets good rate of returns compared to a one time investor.

25
 INSURANCE
We can say that insurance is protecting the economic value of any living or non-living asset.
Insurance can be broadly classified as:

1. Life Insurance
2. Non-Life insurance or general insurance.

What Is Life Insurance?

Life insurance offers a way to replace the loss of income that occurs when someone dies (usually
the person who produces the majority of income in a family situation). It is a contract between
the insured person and the company or "carrier" that is providing the insurance. If the insured
person dies while the contract is in force, the insurance company pays a specified sum of money
free of income tax — "cash benefits" — to the person or persons he name as beneficiaries

Types of Life Insurance Policies:

(1). Endowment Policy: An endowment policy covers risk for a specified period. Endowment
life insurance pays the face value of the policy to the beneficiary on death of the insured person.
If nothing unfortunate happens, at the end of the specified period the sum assured is paid back to
the policy holder along with the accumulated bonus.
(2). Money Back Policy: Money back also covers risk for a specified period. This type of
policy provides periodic payments to the policy holder during the currency of the policy and the
balance of the survival amount with accumulated bonus at the expiry of the term of the policy. In
case of unfortunate death of the policy holder during the term of the policy, the face value of the
policy is paid to the beneficiaries without making any kind of deductions.
(3). Whole Life Policies: A whole life policy runs as long as the policy holder is alive usually
requiring the payment of premiums throughout the life. The insured amount and the bonus is
payable only to the beneficiary upon the death of the policy holder
(4). Term Life Policies: These policies are for a specified term but usually without any
survival benefits. Therefore, the premium on this type of policies is lower than Endowment or
Money back policies. The insured amount is payable to the beneficiary in case of death of the
insured person during the term of the policy.
(5). Joint Life Policies: These policies are similar to endowment policies and offer maturity
benefits to the policy holders apart from covering the risks. The Joint Life policies cover two
lives simultaneously and offer unique advantage to a married couple or to partners in a business
firm.
(6). Group Insurance Policies: The Group Insurance policies offer life cover to a group of
persons. These policies are no survival benefit policies and are usually issued at very low
premiums.
(7). Annuities: An annuity is an investment that is made either in a single lump sum payment or
through installments paid over a certain number of years, in return for a specific sum received
every year, every half-year or every month, either for life or for a fixed number of years.
26
 GENERAL INSURANCE
What is General Insurance?
Insurance other than ‗Life Insurance‘ falls under the category of General Insurance. General
Insurance comprises of insurance of property against fire, burglary etc, personal insurance such
as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are
also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.
Non-life insurance companies have products that cover property against Fire and allied perils,
flood storm and inundation, earthquake and so on. There are products that cover property against
burglary, theft etc. The non-life companies also offer policies covering machinery against
breakdown, there are policies that cover the hull of ships and so on. Further, insurance of motor
vehicles against damages and theft forms a major chunk of non-life insurance business.
In respect of insurance of property, it is important that the cover is taken for the actual value of
the property to avoid being imposed a penalty should there be a claim. Where a property is
undervalued for the purposes of insurance, the insured will have to bear a rateable proportion of
the loss.
Personal insurance covers include policies for Accident, Health etc. Products offering Personal
Accident cover are benefit policies. Health insurance covers offered by non-life insurers are
mainly hospitalization covers either on reimbursement or cashless basis. The cashless service is
offered through Third Party Administrators who have arrangements with various service
providers, i.e., hospitals. The Third Party Administrators also provide service for reimbursement
claims. Sometimes the insurers themselves process reimbursement claims.
Accident and health insurance policies are available for individuals as well as groups. A group
could be a group of employees of an organization or holders of credit cards or deposit holders in
a bank etc. Normally when a group is covered, insurers offer group discounts.
Liability insurance covers such as Motor Third Party Liability Insurance, Workmen‘s
Compensation Policy etc offer cover against legal liabilities that may arise under the respective
statutes— Motor Vehicles Act, The Workmen‘s Compensation Act etc. Some of the covers such
as the foregoing (Motor Third Party and Workmen‘s Compensation policy) are compulsory by
statute. Liability Insurance not compulsory by statute is also gaining popularity these days. Many
industries insure against Public liability. There are liability covers available for Products as well.
Suitable general Insurance covers are necessary for every family. It is important to protect one‘s
property, which one might have acquired from one‘s hard earned income. Losses created by
catastrophes such as the tsunami, earthquakes, cyclones etc have left many homeless and
penniless. Such losses can be devastating but insurance could help mitigate them.
Industries also need to protect themselves by obtaining insurance covers to protect their building,
machinery, stocks etc. They need to cover their liabilities as well. Financiers insist on insurance.
So, most industries or businesses that are financed by banks and other institutions do obtain
covers. Also organizations or industries that are self-financed should ensure that they are
protected by insurance. Most general insurance covers are annual contracts. However, there are
few products that are long-term.

27
 DEBT
Debt is that which is owed; usually referencing assets owed, but the term can also cover moral
obligations and other interactions not requiring money. In the case of assets, debt is a means of
using future purchasing power in the present before a summation has been earned. Some
companies and corporations use debt as a part of their overall corporate finance strategy. A debt
is created when a creditor agrees to lend a sum of assets to a debtor. In modern society, debt is
usually granted with expected repayment; in many cases, plus interest.

-Payment:
Before a debt can be made, both the debtor and the creditor must agree on the manner in which
the debt will be repaid, known as the standard of deferred payment. This payment is usually
denominated as a sum of money in units of currency, but can sometimes be denominated in
terms of goods. Payment can be made in increments over a period of time, or all at once at the
end of the loan agreement.

Types of debt:
A company uses various kinds of debt to finance its operations. The various types of debt can
generally be categorized into:
1). Secured and unsecured debt: A debt obligation is considered secured if creditors have
recourse to the assets of the company on a proprietary basis or otherwise ahead of general claims
against the company. Unsecured debt comprises financial obligations, where creditors do not
have recourse to the assets of the borrower to satisfy their claims.

2). Private and public debt: Private debt comprises bank-loan type obligations, whether senior
or mezzanine. Public debt is a general definition covering all financial instruments that are freely
tradable on a public exchange or over the counter, with few if any restrictions.

3). Syndicated and bilateral debt: Loan syndication is a risk management tool that allows the
lead banks underwriting the debt to reduce their risk and free up lending capacity.
A basic loan is the simplest form of debt. It consists of an agreement to lend a principal sum for a
fixed period of time, to be repaid by a certain date. In commercial loans interest, calculated as a
percentage of the principal sum per year, will also have to be paid by that date.
A syndicated loan is a loan that is granted to companies that wish to borrow more money than
any single lender is prepared to risk in a single loan, usually many millions of dollars. In such a
case, a syndicate of banks can each agree to put forward a portion of the principal sum.

28
 BONDS
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and,
depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the
principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money
with interest at fixed intervals.
Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor),
and the coupon is the interest. Bonds provide the borrower with external funds to finance long-
term investments, or, in the case of government bonds, to finance current expenditure.
Certificates of deposit or commercial paper are considered to be money market instruments and
not bonds. Bonds must be repaid at fixed intervals over a period of time
Bonds and stocks are both securities, but the major difference between the two is that
stockholders have an equity stake in the company (i.e., they are owners), whereas bondholders
have a creditor stake in the company (i.e., they are lenders). Another difference is that bonds
usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may
be outstanding indefinitely. An exception is a consol bond, which is perpetuity (i.e., bond with
no maturity).

Features of bonds
The most important features of a bond are:
Nominal, principal or face amount: The amount on which the issuer pays interest, and which
has to be repaid at the end.
Issue price: The price at which investors buy the bonds when they are first issued, which will
typically be approximately equal to the nominal amount. The net proceeds that the issuer
receives are thus the issue price, less issuance fees.
Maturity date: The date on which the issuer has to repay the nominal amount. As long as all
payments have been made, the issuer has no more obligations to the bond holders after the
maturity date. The length of time until the maturity date is often referred to as the term or tenor
or maturity of a bond.
Coupon: The interest rate that the issuer pays to the bond holders. Usually this rate is fixed
throughout the life of the bond. It can also vary with a money market index. The name coupon
originates from the fact that in the past, physical bonds were issued which had coupons attached
to them. On coupon dates the bond holder would give the coupon to a bank in exchange for the
interest payment.
The quality of the issue: It influences the probability that the bondholders will receive the
amounts promised, at the due dates. This will depend on a whole range of factors.
Indentures and Covenants: An indenture is a formal debt agreement that establishes the terms
of a bond issue, while covenants are the clauses of such an agreement. Covenants specify the
rights of bondholders and the duties of issuers, such as actions that the issuer is obligated to
perform or is prohibited from performing.

29
High yield bonds: These bonds are rated below investment grade by the credit rating agencies.
As these bonds are more risky than investment grade bonds, investors expect to earn a higher
yield. These bonds are also called junk bonds.
Coupon dates: The dates on which the issuer pays the coupon to the bond holders. In the U.S.
and also in the U.K. and Europe, most bonds are semi-annual, which means that they pay a
coupon every six months.
Optionality: Occasionally a bond may contain an embedded option; that is, it grants option-like
features to the holder or the issuer.
Callability: Some bonds give the issuer the right to repay the bond before the maturity date on
the call dates; see call option. These bonds are referred to as callable bonds. Most callable bonds
allow the issuer to repay the bond at par. With some bonds, the issuer has to pay a premium, the
so called call premium. This is mainly the case for high-yield bonds. These have very strict
covenants, restricting the issuer in its operations. To be free from these covenants, the issuer can
repay the bonds early, but only at a high cost.
Putability: Some bonds give the holder the right to force the issuer to repay the bond before the
maturity date on the put dates. This is called putability.

30
 REAL ESTATE

Introduction:
The term „real estate‟ is defined as land, including the air above it, the ground below it, and
any buildings or structures on it. It is also referred to as realty. It covers residential housing,
commercial offices, trading spaces such as theatres, hotels and restaurants, retail outlets,
industrial buildings such as factories and government buildings.
Real estate involves the purchase, sale, and development of land, residential and non-residential
buildings. The main players in the real estate market are the landlords, developers, builders, real
estate agents, tenants, buyers etc. The activities of the real estate sector encompass the housing
and construction sectors also.
The real estate sector in India has assumed growing importance with the liberalization of the
economy. The consequent increase in business opportunities and migration of the labour force
has, in turn, increased the demand for commercial and housing space, especially rental housing.
Developments in the real estate sector are being influenced by the developments in the retail,
hospitality and entertainment (e.g., hotels, resorts, cinema theatres) industries, economic services
(e.g., hospitals, schools) and information technology (IT)-enabled services (like call centers).

Merits:

 After stocks, there is probably no asset class like property that can preserve the value of
your portfolio from the eroding effect of inflation. It is widely held that gold is also a
good foil to counter inflation. But over the years, gold has performed poorly on the return
parameter.
 Another important touch a real estate fund adds to your portfolio is that of stability.
Although property prices can also be volatile, the volatility is a far cry from what
investors are used to seeing in stocks for instance. When turbulence in global oil prices or
economic upheavals rocks your portfolio, you can expect real estate/real estate funds to
be the rock in your portfolio.

Limitations:

 Real estate funds have the same risks that are associated with equity/debt mutual funds.
For instance i.e. you could make the wrong choice while selecting a real estate fund in
which case you could be saddled with a non-performer. Although this is not a limitation
with real estate funds per se, it serves to highlight that there can be poorly managed real
estate funds just like there can be poorly managed equity/debt funds.
 If with equities three years is the minimum investment time frame, then with real estate
investments you need to be even more patient. Buying property, developing it and then
renting it out or selling it, is a high gestation activity. It could take some time before your
real estate mutual fund actually starts making money.

31
 EQUITY BROKING

A stock market is a public market for the trading of company stock and derivatives at an agreed
price; these are securities listed on a stock exchange as well as those only traded privately. The
size of the world stock market was estimated at about $36.6 trillion US at the beginning of
October 2008. The total world derivatives market has been estimated at about $791 trillion face
or nominal value, 11 times the size of the entire world economy. The value of the derivatives
market, because it is stated in terms of notional values, cannot be directly compared to a stock or
a fixed income security, which traditionally refers to an actual value. The stocks are listed and
traded on stock exchanges which are entities of a corporation or mutual organization specialized
in the business of bringing buyers and sellers of the organizations to a listing of stocks and
securities together. The stock market in the India includes the trading of all securities listed on
the NSE and BSE.

Types of stock:
Stock typically takes the form of shares of either common stock or preferred stock. As a unit of
ownership, common stock typically carries voting rights that can be exercised in corporate
decisions. Preferred stock differs from common stock in that it typically does not carry voting
rights but is legally entitled to receive a certain level of dividend payments before any dividends
can be issued to other shareholders.

1. Preferred Stock:

Preferred stock, also called preference shares, is typically a 'higher ranking' stock than voting
shares, and its terms are negotiated between the corporation and the investor. Preferred stock
usually carries no voting rights, but may carry priority over common stock in the payment of
dividends and upon liquidation. Preferred stock may carry a dividend that is paid out prior to any
dividends being paid to common stock holders. Preferred stock may have a convertibility feature
into common stock. Preferred stockholders will be paid out in assets before common
stockholders and after debt holders in bankruptcy.

2. Common Stock:

Common stock is a form of corporate equity ownership, a type of security. It is called "common"
to distinguish it from preferred stock. In the event of bankruptcy, common stock investors
receive their funds after preferred stock holders, bondholders, creditors, etc. On the other hand,
common shares on average perform better than preferred shares or bonds over time.
Common stock is usually voting shares, though not always. Holders of common stock are able to
influence the corporation through votes on establishing corporate objectives and policy, stock
splits, and electing the company's board of directors. Some holders of common stock also receive
pre-emptive rights, which enable them to retain their proportional ownership in a company
should it issue another stock offering. Additional benefits from common stock include earning
dividends and capital appreciation.

32
3. Registered Share:

A Registered share is a stock that is registered on the name of the exact owner. If the owner of
such a share sells his share, the new owner must register with name and address. Registered
shares offer issuers the advantage, enabling them to always know exactly who their shareholders
are. Unexpected surprises with active investors could be prohibited with that stock-vehicle.

4. Voting Share:
A voting share (also called Common stock or Ordinary share) is a share of stock giving the
stockholder the right to vote on matters of corporate policy and the composition of the members
of the board of directors.

Stock Exchange:
A stock exchange, (formerly a securities exchange) is a corporation or mutual organization
which provides "trading" facilities for stock brokers and traders, to trade stocks and other
securities. Stock exchanges also provide facilities for the issue and redemption of securities as
well as other financial instruments and capital events including the payment of income and
dividends. The securities traded on a stock exchange include: shares issued by companies, unit
trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a
certain stock exchange, it has to be listed there. The initial offering of stocks and bonds to
investors is by definition done in the primary market and subsequent trading is done in the
secondary market. A stock exchange is often the most important component of a stock market.
There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be
subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter.
This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are
part of a global market for securities.

The role of stock exchanges:

1. Raising capital for businesses:
The Stock Exchange provides companies with the facility to raise capital for expansion through
selling shares to the investing public.

2. Mobilizing savings for investment:

When people draw their savings and invest in shares, it leads to a more rational allocation of
resources because funds, which could have been consumed, or kept in idle deposits with banks,
are mobilized and redirected to promote business activity with benefits for several economic
33
sectors such as agriculture, commerce and industry, resulting in stronger economic growth and
higher productivity levels and firms.

3. Facilitating company growth:

Companies view acquisitions as an opportunity to expand product lines, increase distribution
channels, hedge against volatility, increase its market share, or acquire other necessary business
assets. A takeover bid or a merger agreement through the stock market is one of the simplest and
most common ways for a company to grow by acquisition or fusion.

4. Corporate governance:
By having a wide and varied scope of owners, companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders and
the more stringent rules for public corporations imposed by public stock exchanges and the
government. Consequently, it is alleged that public companies tend to have better management
records than privately-held companies.

5. Creating investment opportunities for small investors:

As opposed to other businesses that require huge capital outlay, investing in shares is open to
both the large and small stock investors because a person buys the number of shares they can
afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares
of the same companies as large investors.

6. Government capital-raising for development projects:

Governments at various levels may decide to borrow money in order to finance infrastructure
projects such as sewage and water treatment works or housing estates by selling another category
of securities known as bonds. These bonds can be raised through the Stock Exchange whereby
members of the public buy them, thus loaning money to the government.

7. Barometer of the economy:

At the stock exchange, share prices rise and fall depending, largely, on market forces. Share
prices tend to rise or remain stable when companies and the economy in general show signs of
stability and growth. An economic recession, depression, or financial crisis could eventually lead
to a stock market crash. Therefore the movement of share prices and in general of the stock
indexes can be an indicator of the general trend in the economy.

The financial market has a wide scope and it covers many other investment tools like bank
deposits, debentures, gold and such others. The market is so huge that it is almost impossible to
present all of them in a compressed form but I have tried to deal with the important ones in the
project.

34
 Customer
Relationship
Management

35
 CUSTOMER RELATIONSHIP MANAGEMENT
 INTRODUCTION:-

 In order to maintain a successful business, the business must understand and maintain a
positive relationship with its customers. Customer Relationship Management (CRM) is
the process of bringing the customer and the company closer together. There are many
different areas in which Customer Relationship Management can be implemented. The
goal of CRM is to help a company maintain current customers, as well as gain new
customers.
 Relationship marketing is concerned with how organizations manage and improve their
relationship with customers for long term profitability, not only of the organizations but
the customers as well. Customer profitability is the cornerstone of Customer Relationship
Management.
 CRM is a strategic tool for marketers to acquire customers, retain them, and maintain
long-term profitable relationships with them. It uses information technology to achieve
these objectives. Competitive pressures have led marketers to realize the necessity of
customer retention to survive in a deregulated economy. CRM has enabled the shift in
approach from being product-centric to being customer-centric. In addition to
maximizing customer value, CRM helps marketers to cross-sell products, achieve long-
term profitability, and build the brand.

 DEFINITION:-

Customer Relationship Management (CRM) refers to the methodologies and tools that
help businesses manage customer relationships in an organized way.
Customer relationship management basically includes:

- CRM processes that help identify and target their best customers, generate quality
sales leads, and plan and implement marketing campaigns with clear goals and
objectives;

- CRM processes that help form individualized relationships with customers (to improve
customer satisfaction) and provide the highest level of customer service to the most
profitable customers;

- CRM processes that provide employees with the information they need to know their
customers' wants and needs, and build relationships between the company and its
customers.

Customer relationship management tools include software and browser-based

applications that collect and organize information about customers. For instance, as part
of their CRM strategy, a business might use a database of customer information to help
36
 construct a customer satisfaction survey, or decide which new product their customers
might be interested in.

 CONTENT:-

It is a process or methodology used to learn more about customers‘ needs and behavior in
order to develop stronger relationships with them. There are many technological
components to CRM but thinking about CRM in primary technological terms is a
mistake. The more useful to think about CRM is as a process that will help bring together
lots of pieces of information about customers, sales, marketing effectiveness,
responsiveness and market trends.

 BENEFITS:

A properly designed and deployed CRM system will help the business leverage
technology and people resources to better manage sales, marketing and service processes.
In doing so, the company will gain a consistent picture of its customers and their needs.
This translates to value, and allows the company to strengthen the relationship it has with
each customer to retain them as an asset to its business. Some of the more tangible
benefits of a good CRM solution are:

 Improved customer service

 Increased pipeline of new leads
 Increase customer loyalty and satisfaction
 Streamline marketing and sales processes
 Decrease lengthy sales cycles

 REQUISITES OF A SUCCESSFUL CRM IMPLEMENTATION:-

 First and foremost, the executive level has to commit to the project. The management has
to make certain that they understand the importance of their role in upholding that
commitment and communicate it downwards through the organization.
 The project has to be fun and rewarding. The key employees who will be using the
system should be given incentives and their involvement in the early planning and
implementation stages is important. Their feedbacks should also be taken seriously as it
will give them ownership in the project.
 The entire project should be broken down into smaller manageable pieces with small
milestones and all the departments should be involved.
 CRM systems collect huge amounts of data very rapidly so a robust database platform is
a must. Make sure the solution can grow and perform accordingly.
 The CRM system is designed around the customer and prospect so it should be kept in
mind that it is used to its potential in serving them well.

37
 CRM IN THE FINANCIAL SECTOR :-
Like every other industry the financial services sector is also witnessing a plethora of
changes. Facing umpteen challenges, the industry despite its phenomenal growth, has
witnessed slump in some areas, the main reason for this being changes, vast competition,
increased costs, decreased efficiency, inadequate client relationships and poor sales
processes. Something vital is needed to cut through the waves and make the sector boom.
Organizations need to basically better their relations with their customers in an effort to
sustain them.

Financial firms find it almost impossible to have a complete and holistic view of their
customers and that puts them at a disadvantage when knowing their customers is a
criteria. More often than not selling financial services and products is infinitely more
difficult than the work other industries face.

CRM for financial services enables the financial firm to know the customer better. In
addition it helps uncover potential customers and improves overall customer service. It
helps build an advantage over competitors as firms are enabled to increase their
intelligence about the customer. CRM manages to provide this information to almost
every employee. CRM for financial services endeavors to improve and encourage
relationship building with existing and potential customers, the various departments
within the organization, management etc.

The dilemma that most financial institutions face is that they do not store their valuable
customer data in a comprehensible or easily assessable manner. In financial firms this
intelligence is generally scattered throughout the firm and is almost unusable. CRM
encourages financial services firms in changing their scattered data into something that
can be used by every employee in an easy manner. This benefits the analysts, asset
managers, financial professionals.

 OBJECTIVES OF CRM IN THE FINANCIAL SECTOR

 Identification of potential customers

 Provision of data regarding history and preferences of investors
 Increase of customer knowledge of employees
 Provision of an excellent view of customer relationships
 Encouraging customer relationships
 Increasing and improving financial productivity
 Storage and provision of financial data of customers

38
  Easy access to collated financial data
 Managing financial deals
 Evaluation of a potential investment
 Aiding client acquisition
 Investment selling
 Tracking and monitoring financial deals
 Aiding the sales team in the provision of customers needs
 Enabling the building of trust for brokers, agents and financial planners.

 LIMITATIONS OF CRM FOR THE FINANCIAL SECTOR :-

 The complexity and magnanimity of this particular industry makes it harder to adopt a
holistic and integrated customer approach.
 Financial firms tend to focus more on the product than on the customer. In this respect
they are almost oblivious to them.
 Since most financial organizations are considerably big in size, the cost involved is
considerably higher.
 There are various challenges facing the industry and these all need to be overcome in
order to actually succeed at the implementation of CRM.

 THE BOTTOM LINE :-

We have seen above both the benefits and pitfalls of CRM so now the question arises as
to whether CRM for financial services actually benefiting the financial services sector?
The answer is yes. Obtaining, maintaining and basically utilizing a customer database in
an effort to maximize or improve customer relationships will go a long way in
increasing overall productivity. A failure to focus on these relationships can prove
detrimental while knowing and indulging your customer preferences can go a long way
in securing and raising profitability. A well maintained CRM will help in customer
retention which is as important a job as customer acquisition. Customer loyalty increases
the profitability of any organization so customer relationship management becomes all
the more important.

39
 KEYS TO SUCCESSFUL CRM IN THE FINANCIAL SECTOR

Insurance and mutual funds are complex products where personalized service—achieved through
an intimate knowledge of customers and their histories with a company—is critical to making
sales. As investment options broaden and products grow more complex, customers seek superior,
personalized service more than ever. The situation has become graver as bad economy has hurt
investment income. People have become more and more skeptical about the market conditions
and many have lost faith in the market. Moreover there is an extremely narrow window of time
wherein an insurance call center representative or an advisor holds a customer‘s attention.

To maintain competitive edge and viability, the financial companies are focusing intently on
delivering superior customer service. A comprehensive customer relationship management
(CRM) strategy addresses three imperatives:

Gain a Unified Enterprise View of Customers:

When we focus on the companies providing financial services, we see that there is a wealth of
valuable information about individual customers: we know who they are and what insurance and
mutual fund products and services they buy. We know their history of claims and the status of
their accounts. We may even know about their opinions and preferences, or whether promotions
have attracted their response.

For the financial companies, "know thy customer" can be a challenging imperative. Customer
data may be divided among product lines, or among legacy claims, policy and billing systems. If
the company has expanded its customer base through mergers or acquisitions, its information
may be even more fragmented. Here a holistic, personalized service can be the differentiating
factors that retain good customers.

Retain Customers with Great Service:

Customer analysis and behavior prediction are two important foundations to be used as a basis
for a deeper, more advanced level of customer understanding. By making customer analysis and
behavior prediction data immediately accessible at the desktop, sales efforts are optimized and
customer loyalty is strengthened, as individual customers feel that their needs are understood and
met in a way that is fast and convenient.

Customer analysis and behavior prediction can also be used to identify life events and/or
extended relationships, which can be highly useful in improving profitability from individual
customers. The more products one can sell to a given customer, the less apt he/she is to migrate
to another provider. However the insurer has to back the sales with good service like sending the
statements on time, suggesting proper funds that would yield high returns for the customer. This
would make the client feel more important and they would tend to stick with the company rather
than going to some other company. Thus it would help in increasing customer loyalty which
would further the organization‘s profits. Retention of customers is also important as customer
40
acquisition costs are much higher than customer retention so before spending valuable time and
money on new customers and clients one does not currently have a relationship with one should
consider the following statistics

 Repeat customers spend 33% more than new customers.

 Referrals among repeat customers are 107% greater than non-customers.
 It costs six times more to sell something to a prospect than to sell that same thing to a
customer.

Control Costs While Expanding

Business expansion presents many positive opportunities to the ever growing financial
companies, including increased assets and broader geographic reach to new customers. The
question thus arises as to how the companies can grow without sacrificing their profitability?
The company at hand must offer the same level of superior service that its customers have come
to expect—while minimizing operational costs as the company begins to serve an augmented and
growing customer base.

For this the company has to enable the agents, representatives and brokers to identify and spend
the right amount on each opportunity. A high-value, low-risk customer, who carries policies over
a long period and makes relatively low claims, is an ideal subject for marketing and sales efforts
targeted at extending his or her portfolio.

The company can also use the most cost-effective channels without sacrificing a high level of
customer service. Call center, agents, email, phone and self-service portals—these are some of
the channels that can be used. Here again using customer analysis and behavior prediction, call
center representatives, agents and brokers can target marketing and sales efforts through different
channels depending on the target audience in question. New and advanced email response, Web
chat and self-service portal tools are drawing more and more customers to the Web each day,
enabling a consistently high level of customer service while "pulling" customers to a
communications medium which is much more cost-efficient than the phone..

Today financial companies certainly face a daunting challenge in maintaining and increasing
their competitive edge. But by focusing on three key imperatives insurance companies can turn
challenges into strategic competitive advantage and enhance their long-term viability and
profitability.

41
 SEGMENTING AND TARGETING

Segmentation and targeting aids Customer Relationship Management in the financial sector.
Financial product marketers need to manage their product portfolio in response to the changing
environment and consumer needs, in addition to managing customer relationships effectively for
achieving long-term profitability. For a financial product, the product strategy is greatly
influenced by customers, competitors, technology, and government & legislation. Depending on
these factors, the product mix strategy could be product mix expansion, product mix contraction,
and product modification.

Branding in financial services is done more at the corporate level than at the product level.
Branding should start with a clear strategy for targeting and positioning. The brand image should
be consistent with the marketing strategy. Advertising can be successful in building the brand
only if the financial product caters to the requirements of the consumer and the entire service
experience is consistent with the brand image that is communicated.

CUSTOMER RELATIONSHIP MANAGEMENT is a tool for marketers to acquire

customers, retain them, and maintain long-term profitable relationships with them. It uses
information technology to achieve these objectives. Competitive pressures have led marketers to
realize the necessity of customer retention to survive in a deregulated economy. CRM has
enabled the shift in approach from being product-centric to being customer-centric. In addition to
maximizing customer value, CRM helps marketers to cross-sell products, achieve long-term
profitability, and build the brand. CRM becomes all the more important in the financial sector as
the customers trust their hard earned money with the companies. In order to serve their
customers well, the marketer needs to identify the target customers, differentiate them into
groups, interact with each customer group, and provide customized products and solutions in a
cost-effective manner.

All customers are not equal, recognizing, rewarding best customers disproportionately and
understanding each customer becomes particularly important. The same customers‘ reaction to a
cellular company operator may be quite different as compared to an insurance company operator.
Besides for the same product or the service not all customers can be treated alike and CRM
needs to differentiate between a high value customer and a low value customer. For this proper
segmentation becomes important and this can be done on the basis of:

1. Tastes, preferences and personalities

2. Lifestyle and age
3. Cultural background and education
4. Psychological characteristics

The life insurance business differs from the non-life insurance business on several aspects that
range from product nature, risk covers provided, and the agent‘s role. Life insurance products
cater to the needs of the individual and groups of individuals. Generally, insurance products are
categorized broadly under term life, whole life, endowment, money back, annuities and pensions,
and unit linked schemes. All these different schemes were brought into the market after proper

42
segmentation of the market on the basis of different age groups, income groups and risk factors.
The various schemes are targeted at these different segments. For example a company cannot
suggest a child plan to a person who is not even married. For him/her a term plan or whole life
insurance can be suggested. The cultural background of a person helps in deciding as to whether
he/she is interested in traditional plans or unit linked plans. The income of a person becomes the
deciding factor for suggesting high premium or low premium plans. Segmentation helps CRM to
deal with different customers in different ways.

If we come to mutual funds, we can see that they have come of age to cater to the needs of
investors. Mutual funds can be classified into open-ended funds, close-ended funds, and interval
funds, based on the fund structure. Based on the investment objectives, they are divided into
growth funds, income funds, balanced funds, and money-market funds. Based on the specific
purpose of use, mutual funds are classified into tax savings schemes, index funds, and theme-
based funds (including industry-specific or sectoral funds). Many fund marketers have come out
with innovative and customer friendly products that aim at satisfying the investors‘ financial
goals. Systematic Investment Plan (SIP) is an innovation in payment option for mutual fund
investors. It is designed for those who are interested in gradually accumulating wealth in a
disciplined manner over a long term. Mutual funds are priced based on their net asset value,
which the fund houses declare on a daily basis. Investors can sell their units back to the fund at
the prevailing NAV.

Here again different clients need to be suggested different types of funds. A person who is ready
to take risks can be given a total growth fund, a person who wants consistent returns can be
suggested a debt fund and one who can take moderate risks can be given a balanced fund.
Similarly the General Manager of a company and a common client need to be treated differently.

A proper CRM would mainly target those customers who have the potential to become long term
clients. The organizations that serve the needs of all the stages of customer life cycle experience
huge profits. An insurance company can sell a life policy to a person, once he/she gets married
and has kids a child plan can be sold to him/her and that can be followed by an annuity or
retirement scheme.

Positioning in financial products marketing differs from that of other products and services in
that organizational positioning is given more importance than product level positioning.
Customer service is an important factor that differentiates the product offerings in the service
industry. Service quality can be improved along the dimensions of tangibles, reliability,
responsiveness, assurance, and empathy. Financial product marketers need to imbibe in them the
philosophy of providing quality customer service in order to increase their profitability. Good
customer service and proper handling of customer complaints pave the way for building lasting
relationships.

It can be seen that segmentation, targeting and positioning helps in customer relationship
management. Once all the segments are catered it becomes the job of CRM to grade customers
from very satisfied to very disappointed .This should help the organization in improving its
customer satisfaction levels. As the satisfaction level for each customer improves so shall the
customer retention with the organization.

43
 MY PROGRESS AT BSDL
The 45 days of my training period was a whole new learning experience for me. When I had
joined BSDL, I did not have much idea about the financial sector but today I can say that I have
a fair knowledge about it.

On the very first day, after a lot of discussion, my corporate guide assigned me the topic
“Customer Relationship Management” as this topic is applicable for all industries. To
understand the needs of a customer, their behaviour and provide them good service is a tough
job. Building and maintaining good relations with the customers is an even tougher job so CRM
was an apt topic for me.

The first 15 days were spent in knowing about the various tools of investment like insurance,
mutual funds, SIPs, equities, gold and commodity trading. I was also sent for market surveys so
that I could get an idea about what people think of the various investment options. It was very
interesting to know their preference and areas of interest.

Marketing Activities

The next 15 days, I was told to go out into the market, create awareness among the people about
the company‘s products and generate some business for the company. However, there was never
any pressure from the management. They just wanted me to have a first-hand experience of the
marketing activities. For this, I first segmented the market into three groups- businessmen,
government service holders and private service holders. This helped me in targeting the right
products to the right people.

Apart from this, I also made phone calls from the office itself to the customers. This gave me an
idea about how CRM works in an organization. I asked them whether they were receiving their
statements on time, suggested new funds to them and told them about other offers of the
company. This helped me in enhancing the relations between the company and its customers.

Survey

The last 15 days were utilized in preparing a questionnaire for the survey and conducting it in the
town of Ranchi. The earlier segmentation helped me here too. I met business class people like
that of BIG SHOP, ANAND VATIKA, PRILKNIT and so on. I visited government offices
like JHARKHAND CHAMBER OF COMMERCE ASSOCIATION, JHARKHAND
STATE TOURISM DEPARTMENT, FOOD CORPORATION OF INDIA and SAIL. The
people whom I had visited earlier also proved to be of great help and extended their full
cooperation. The survey helped me in gauging the behaviour and preferences of the people. I
analyzed the data that I had collected through the survey and prepare a report on it.

Finally I submitted the report on the said topic to my corporate guide. The completion of the
project has certainly enhanced my knowledge and I believe that the practical knowledge that I
have gained here will help me in the future.

44
Observation
And
Learning

45
 CUSTOMER RELATIONSHIP MANAGEMENT AT BIRLA SUN LIFE
DISTRIBUTION LIMITED

One of the ongoing challenges successful businesses face is in optimizing customer satisfaction
and developing Customer Relationship Management. So many companies "jump on the
bandwagon" of improving customer service in order to impact customer retention levels. In order
to maintain a successful business, the business must understand and maintain a positive
relationship with its customers. There is a plethora of organizations that provide financial
services. The various companies have to fight it out to stay ahead in the rat race. Today all the
big corporate houses have a financial service wing attached to them. We have Reliance group,
Tata group, Sahara group, Birla group, to name a few, who are the key players in the private
sector.

Customer acquisition and customer retention are two important functions of CRM. There are
many reasons a customer or client may leave an organization, but the ones we hear most often
are:

 They felt that the pricing was too high or unfair.

 They had an unresolved complaint.
 They took a competitors offer.
 They left because they felt that the company didn't care.

In order to avoid such problems BSDL has adopted a number of ways in which it can provide
quality service to their customers. It is a well known fact that in order to serve a large customer
base a good IT solution is required which can maintain the customer database. The customers
can be provided proper service only when their information is available at a click of the
mouse.Thus, in order to successfully collect data, manage call centers, analyze data, and make
changes, businesses need CRM software. There are many CRM vendors in the world.

The various CRM solutions used by BSDL are:

1. CALL CONTROL in order to maintain the database.

2. LMS for managing the leads.
3. ICRA for insurance.
4. FUND MANAGER for SIPs and mutual funds.

ICRA and FUND MANAGER together form the CRM software called CITRIX.

46
CRM ACTIVITIES AT BIRLA SUN LIFE
The CRM software only helps in maintaining a customer database but the actual onus of
maintaining good relations with the customers lies on the shoulders of the employees. The
attitude of the company towards its customers decides whether they would continue to avail the
services of a company or take the competitor‘s offer. Thus companies adopt a lot of activities in
order to provide good service to their customers so as to increase customer loyalty.

Birla Sun Life has a huge customer base and the company believes in providing quality service
to its customers. It has the responsibility of establishing and building client relations, an in-depth
understanding of consumer behaviour, assess and respond to client needs and maintain and
improve client relationship. For this the company practices a number of activities towards
attaining this objective. These include:

1. TELE CALLING-

This is the most popular way of interacting with the customers. The employees speak directly to
the customers, solve their problems and take their requests. The company also intimates the
customers with the new policies and funds and suggests them the funds that would yield the
highest returns for them. A good thing about BSDL is that it not only suggests the funds of its
own company but also of other leading companies. It is because of this reason that people tend to
avail its services. Tele calling also helps the company in knowing its customers better.

Tele calling has its own advantages and disadvantages. The advantage lies in the fact that it
helps the customers in getting first hand information about the products. The disadvantage is
that sometimes the client may be busy in some other work and thus may not entertain the caller.
Worst still they may get irritated. The employees then have to arrange for some other time to
speak to them.

2. DIRECT VISIT-

An important job of CRM is to support the sales team with all the information about the
preferences of the customers. When the sales team visits the clients they know about their
previous investments so that they do not recommend them the same things as it wastes a lot of
time. Moreover their background knowledge helps the sales force to suggest the right policies
and schemes.

The advantage of direct visiting is that the company can have face to face interaction with the
customers. This helps the company in judging the behaviour of the clients better. Direct visit is a
better option when it comes to customer acquisition. Sometimes it becomes very difficult to get
free time from the customers. This is the disadvantage of direct visits.

47
3. DIRECT CALLS FROM THE HEAD OFFICE-

BSDL sends all the information of its customers to the head office and the clients get calls from
the head office too. This shows that the customers of the company are all connected as the
information of all customers from all over India are well maintained not only by the regional
offices but also the head office.

When a customer gets a call from the head office, he/she can feel his/her value for the company.
The client can feel his/her importance and it also shows that the organization cares for its
customers. This has helped the company in building long term relationships with its customers as
it has increased the trust of the clients in the company. Thus we see that this activity has been
quite advantageous for the company.

4. FUND UPDATION-

The company frequently updates the funds of its customers by calling them up. The clients are
informed about the NAV of their funds and also about the new funds in the market. The clients
are suggested the funds that would yield them the highest returns and which would be profitable
keeping in view the market conditions.

The advantage of fund updation is that it helps the clients in knowing the performance of the
funds. People invest in mutual funds so that the fund managers take care of their funds but when
the company calls them to inform about the funds, it makes the company more transparent. Thus
the satisfaction levels of the customers increases.

5. NFOs-

Customer relations are improved as the company gives added services to them. BSDL offers the
NFOs of all the companies and calls the clients in order to inform them about it. During my
training period at BSDL, Reliance had launched its Infrastructure fund and I too called the
customers to inform them about the fund.

When the customers get the funds of all the companies at the same place they would like to come
there instead of going to other companies. This has acted as a plus point for BSDL as it has
increased the customer base of the company. This is the main advantage of providing NFOs.

48
6. CORPORATE PRESENTATIONS-

In order to increase its customer base and create awareness about mutual funds and equities
among people the organization makes corporate presentations. Recently the company made
presentations at SAIL and it has helped in customer acquisition. This helped in building
customer relations.

Corporate presentations help in acquiring new customers. Not many people are aware about
mutual funds and it is still in its nascent stages. Since people do not know about these they are
skeptical about investing it them. When a company makes such presentations, the potential
customers may become actual customers. Sometimes the people working in the organization are
not very interested in attending such presentations. Creating interest becomes a difficult task for
the company.

7. SENDING GREETINGS ON SPECIAL OCCASIONS-

The company sends greeting cards to its customers on special occasions like their birthdays and
anniversaries. Not all companies are indulged in such activities as it involves some costs but it
gives high returns in the long run.

The basic advantage of this activity is that it makes the clients feel that they are important for
the company. The financial relation gets converted into an emotional relation and the customers
feel that the company cares for them. The same thing can also act as a disadvantage sometimes
if the customers feel that the company is just trying to oil them so that they can sell new policies
to them.

8. CLIENT MEETINGS AT THE OFFICE-

The company also arranges for client meetings at the office so that they can intimate them with
the new products. The employees make presentations on such occasions so that any doubts
arising in the minds of the clients can be resolved.

The clients get an opportunity to meet each other and discuss the various products among
themselves. The views of the clients can be taken into account and the shortcomings of the plans
pointed out by them can be worked upon. It makes the customers feel as a part of the
organization. This is one of the greatest advantages. However, it is not always possible to get all
the customers under one roof at the same time and conducting such sessions every time may not
be cost effective.

9. GROUP ACTIVITY-

The company also organizes group activities within the Aditya Birla group. The Aditya Birla
group has many subsidiaries like IDEA CELLULAR, ULTRATECH CEMENTS and such

49
others but not all of them are a part of Birla Sun Life. In order to make them a part of the
organization such events are conducted.

Such activities are advantageous as they help in building relations within the group and these
can help in bringing them within the folds of this financial wing. This can help in building up the
customer base of the company.

10. WELCOME CALLS-

Once the customers avail the services of the company, the company makes welcome calls to
them and this is done for each and every customer whether they take the company‘s products or
the funds of some other company. These calls are also made to request them to come and meet
them in the office whenever they have any questions regarding the various policies and schemes,
be it insurance, mutual funds, equities, gold broking and such others.

Such welcome calls help in making a great impact on the customers and it poses a good image of
the company. Such initiatives by the company also help in portraying customer value to the
customers. As is said that ―The first impression is the last impression‖, such calls help in
creating that impression.

11. FREE OF COST PORTFOLIO DESIGNING-

In BSDL, there is the option of getting one‘s portfolio designed and that too free of cost.
Portfolio designing mainly means how much an investor should invest in the various investment
tools. The company follows certain formulas for this purpose. A well designed portfolio helps
the customers in earning good returns.

The main advantage of this service is that it is free of cost so many people are attracted towards
it. Such a service is not given by all companies so it acts as an added advantage for the
organization. An obstacle in the path of this service is that many people would not want others to
decide where they should put their money maybe because of lack of trust. Thus, winning the trust
of people is an important task here.

12. MAILS AND MESSAGES-

The company sends mails to its customers in order to remind them if their premium is due or
inform them about the performance of their funds. The information about the new funds is also
given through mails. Gold broking is a fairly new concept and the customers can be made aware
of it through mails. Similarly messages are also sent to the customers for the same purposes as
mails.

50
Mails are generally more suitable for the busy people for example the top level officers in a
company. Calling them in their busy schedule would be a bad idea and it can tarnish the image of
the company. Messages are even better as everyone carries a mobile nowadays and they can
check their messages any time they want. However checking mails is time taking and everyone
may not have an email id.

13. CALL BACK SERVICE-

The company has a service where a person can post his/her name, phone number, call time,
preferred date of call and preferred time of call on the company‘s website. The company then
makes the call to that customer and solves his/her queries.

This service helps both in customer acquisition and customer retention as they feel that the
company wants to help them. Investments are one of the most important decisions of any person
so people like to have its overall idea. The main advantage of this system is that the customers
would not have to come all the way to the office in order to know about the products and since
they themselves want to know about the offers, there is no question of getting irritated when the
company calls back.

14. DIVERSIFIED INVESTMENT OPTION-

BSDL deals in all the investment tools and so there is the option of diversified investment. A
customer having a life insurance policy can be suggested certain funds and vice-versa. Now the
company has its own broking house (APPOLLO SINDHOORI) so it can also suggest equity
broking.

This helps in customer relationship management as the customer gets many options at the same
place. The company can gauge the behaviour of the client and suggest him/her products from its
kitty. This mainly helps in customer retention.

The above activities are religiously practiced at Birla Sun Life Distribution Limited. Such
activities have helped the company to improve its customer base and enhance its relationships
with the customers.

51
The TELEPHONE is one of the most important tools that help in building relationships with the
customers. A positive relationship with the customer helps in bringing the company and
customers closer to each other. Customer perception is an important component of our
relationship with our customers. Given that 90% plus of our orders at some point involve the
phone, how we handle the telephone is essential to creating a perception for our customer that
aligns with a company‘s mission of service. At BSDL I learnt great ways of handling the phone.
Here are a few of them.

1. The greeting is ―Good Morning/Good Afternoon, this is Joshua with (the company name).
How may I help you?

2. Always ask and receive a response from people before you put them on hold, ―Would you
please hold ?‖ then be sure they are not on hold very long otherwise offer to call them back.

3. Remember to smile on the phone. Slow down and speak plainly and clearly. Smiling stretches
your vocal cords, and gives a more upbeat presentation to the customer. Slowing down ensures
that the customers‘ perception is of an organized systematic company that can handle their
project.

4. If you transfer a call and know who is calling, tell the name of the caller to your co-worker so
they can greet the person by their name.

5. When you make a call to the customer make sure that you ask him whether he/she is busy or
not. If not request him/her to spare two minutes and if yes then ask for some other time.

6. Remember to always ―thank‖ the customer. Thank them for calling. Thank them for their
business. Thank them for cooperation and understanding. Thank them for listening to you.

7. If we have to contact a customer with bad news of any kind realize that your tone of voice and
approach to it set the tone. We do not want to be nonchalant as if it is not big deal. Nor do we
want to act like a terrible calamity occurred. Here are keys to contacting customers with bad
news:

• Prepare rehearse and organize what you are going to communicate to them and how you are
going to communicate it to them.

• Be absolutely certain that you have options to give the customer in these situations. This allows
them to be more in control rather than a victim. What are options? What are solutions? Do not
call them with the problem unless you are also providing solutions to them.

• Learn what you could have done to prevent this problem from occurring and do so next time.
Again, the customer is calling us to take on their problems and to solve their problems. They
really do not want (nor do they care) to know about our problems.

52
 METHODOLOGY
DATA COLLECTION:

Two types of data collection methods were used in the project.

PRIMARY DATA

SECONDARY DATA

For my project, I collected primary data by observing the company staff directly dealing with
the customers, approaching customers directly in the field and speaking to them over the
telephone. I also prepared a questionnaire in order to gauge customer perception about the
financial sector and it was also feasible from the point of view of my subject and survey purpose.

Secondary data collection method was used by referring to various websites, magazines and
newspapers for collecting information regarding the project.

I used both descriptive and exploratory methods in conducting the survey.

Descriptive research design was adopted where I prepared a questionnaire and distributed it
among the people of Ranchi to gauge the investment scenario of individuals in Ranchi.

I also used Exploratory research design where I personally met people in order to understand
why they prefer LIC over other companies and what are their views on mutual funds and
equities.

SAMPLE SIZE – 100

SAMPLING METHOD – Random Sampling Method

DATA PRESENTATION – The collected data is presented using bar diagrams and pie
charts.

53
 SURVEY
FINDINGS
AND
RECOMMENDATIONS

54
1) What is your income level?

100

80

60
39
40 28 25
20 8

0
Below 1.50 - 2.50 - Above
1.50 2.50 5.00 5.00

2) What is your annual investment level as the percentage of your total income?

70
58
60
50
40 32
30
20
10
10
0
0
below 20% 20% - 30% 30% - 50% above 50%

3) Which type of investment do you prefer the most?

50
45 43
40 38
35
30
25
20
14
15
10 5
5
0
Regular High return Tax shield Retirement
income scheme

55
4) What type of return do you expect?

100
80 60
60
40 19 21
20 0
0

5) What is your investment horizon?

100
90
80
70
60
50 45
40
30 22 19
20 10
10 4
0
Upto 1 1-5 yrs. 5-10 yrs. 10-15 yrs Above 15
yr. yrs

6) What is your source of information while investing?

Print media

17.50%
Electronic
37.50% media
22.50% Internet

22.50% Social circle

56
7) Are you satisfied with your current portfolio?

60

50 49

40
35
30

20

10 10
6
0 0
Highly Satisfied Satisfied Neither satisfied Dissatisfied Highly Dissatisfied
nor dissatisfied

8) Has the recent global recession affected your investment decision?

100

90

80

70

60
52
48
50

40

30

20

10

0
Yes No

57
9.On an average, the percentage of different investment tools in the portfolio
of individuals survey

1.40% Mutual Fund

4.80%
Real Estate
14.60%
4.40% Post Office Schemes
32.40%
1.40% Debt
Equities
22%
16.40% Gold
Bank Deposit
Insurance
2.60%
PPF

10.The degree of importance of different factors considered by investors

Total marks allocated

120
100
80
60
40
20 Total marks allocated
0

58
 FINDINGS
On interacting with the people of Ranchi

it was found that most of them prefer LIC when it comes to insurance policies. The reason given
by them is that it is the oldest organization so it has created a niche for itself in the minds of the
common people. Moreover it is a government organization so the security factor is strong as the
government is accountable for their money. There are still others who just follow suit of their
forefathers.

I also found that not many people have idea about mutual funds, SIPs, gold broking and
commodity trading.

People having knowledge about equities tend to invest more on it. On asking them about the risk
involved they said that there can be no gain without risk.

From the survey

When it comes to investments it is seen that people give more importance to the return factor
over other things like risk, company history, future perspective and service.

Most people prefer schemes that would give high returns followed closely by regular income
schemes.

The recent market slowdown has affected the investment decisions of people specially those who
played in the equity market.

Despite the economic turmoil it was found that people are still interested in investing which
shows the growth potential of the financial sector.

It was found that people get information about the various schemes from their social circle
whereas the print media does not fare very well in this aspect.

The investment tool where Ranchi has invested the most is insurance mainly because everybody
wants a secure future for their family.

59
 RECOMMENDATIONS

The company has launched a Gold Dhamaka scheme where people can purchase 100gm or more
gold from the company. However the demerit of the scheme is that people have to pay Rs.15000
initially which is huge. The company should thus reduce the initial investment.

The organization should focus more on educating people on investment tools like mutual funds,
SIPs as they know only about its downside but not about its benefits.

People do not have a lot of faith on private companies when it comes to insurance so they should
create awareness among people and instill faith in them for the company‘s insurance policies.
For this presentations can be made in other organizations, clubs etc. where any doubt in the
minds of people can be solved then and there.

Regular customers or clients who make huge investments can be offered some kind of incentive
like gifts.

Create a customer focus group maybe of about 15 to 20 people who can give feedbacks to the
company on the various products. They can also place their views regarding customer service
and give suggestions if any kind of improvement is required.

Make it easier for the customers to contact you by giving them alternative numbers and IDs. This
way they will stay connected. Provide a toll free number to people so that they do not feel a
pinch in their pockets when they call the company.

Organize special events for the customers like maybe a seminar or discussion and provide them
good refreshments.

The company should invest more on advertising in the print media like newspapers and
magazines. They can also distribute pamphlets of the best schemes so that people come to know
about it on a first hand basis and not only from friends because friends will only tell about the
schemes that they have.

Finally, the company should provide added incentives to the employees for customer service
because if the employees are happy, the customers will never have any complaint.

60
 CONCLUSION
The success of any marketing activity cannot be measured by the short run cost benefit.
Marketing activities should be aimed at yielding long run profits for the company. For this the
organisations take various measures so that both existing as well as potential customers have the
right information about the company‘s products. Birla Sun Life Distribution Limited pays a lot
of attention to its customers but there are areas where improvement would be welcome.

Sometimes companies spend exorbitant amounts for their marketing activities but the returns are
not satisfactory. This is because the dissemination of information is not properly done for which
proper segmentation of the market becomes necessary. The company should first educate the
people about its products, understand their needs and then suggest them various options.

For any marketing activity to be successful, a lot of onus lies on customer service. Dealing with
customers is one of the most delicate and complex tasks that an organisation has to face.
Most organizations have an extremely faulty customer centered system. Several millions are lost
yearly as corporations scramble to make profits, beat competitors, and stay ahead in the rat race
but they are not open to customer suggestions and more often than not they do not provide the
customer with a proper avenue to vent his ideas. This often leads to unhappy customers and
eventually their loss.

Birla Sun Life Distribution Limited has adopted several measures in order to keep their
customers happy and satisfied but in the face of such tough competition by other investment
companies, it would be beneficial if the company offers something extra.

The Government of India has removed entry loads from mutual funds, the brokerage charges are
being reduced which is directly affecting the business of the company. Thus, it has to come up
with ideas so that both the customers as well as the employees are happy.

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 Bibliography
BOOKS:

Book on Mutual Fund AMFI

Book on Indian Capital Market National Stock Exchange

MAGAZINES:

Outlook Money May, June July edition

Investime BSDL Publication

WEBSITE

www.birlasunlife.com

www.adityabirla.com

www.icmrindia.org

www.crm2day.com

www.indiabullion.com

www.investinginbonds.com

www.tradechakra.com

www.investopedia.com

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Appendices

63
 QUESTIONNAIRE
INVESTMENT SCENARIO IN RANCHI TOWN (OF INDIVIDUALS)

Name: _____________________________________________ Age: __________________

Occupation: _________________________________ Organization: _________________________

Phone No. ______________________________ Email-Id: __________________________________

1. What is your education level?

(A). Under Graduate [ ] (B). Graduate [ ]

(C). Post Graduate [ ] (D).Any other professional degree [ ]

2. What is your income level? (in lakhs)

(A). Below 1.50 [ ] (B). 1.50 – 2.50 [ ]

(C). 2.50 – 5.00 [ ] (D). Above 5.00 [ ]

3. What is your annual investment level as the percentage of your total income?

(A). Below 20% [ ] (B). 20 -30% [ ]

(C). 30 -50% [ ] (D). Above 50% [ ]

4. Are you a regular investor?

Yes [ ] No [ ]

5. What is your source of information while investing?

(A). Print media [ ] (B). Electronic media [ ] (C). Internet [ ]

(D). Social circle [ ] (E). Any other ______________________________

6. Your investment portfolio contains (in %)

(A). Real estate [ ] (B). Post office schemes [ ] (C). Mutual funds [ ]

(D). Debt [ ] (E). Equities [ ] (F). Gold [ ]

(G). Bank deposits [ ] (H). Insurance [ ] (I) PPF [ ]

7. Prioritize the factors you consider while investing (maximum of 5 to the most important and
minimum of 1 to the least important)
(A). Risk factor [ ] (B). Return factor [ ] (C). Company‘s history [ ]

(D). Future perspective[ ] (E). Service [ ]

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8. Which type of investment do you prefer the most?

(A). Regular income [ ] (B). High return [ ]

(C). Tax shield [ ] (D). Retirement scheme [ ]

9. What type of return do you expect?

(A). Monthly [ ] (B). Quarterly [ ]

(C). Semi annual [ ] (D). Annual [ ]

10. What is your investment horizon?

(A). up to 1 year [ ] (B). 1 to 5 years [ ] (C). 5 to 10 years [ ]

(D) 10 to 15 years [ ] (E). Above 15 years [ ]

11. What are your near future liabilities?

(A). Child marriage [ ] (B). Child education [ ]

(C). Repayment of loans [ ] (D). Any other_____________________________

12. Are you satisfied with your current portfolio?

(A). Highly satisfied [ ] (B). Satisfied [ ]

(C). Neither satisfied nor dissatisfied [ ] (D). Dissatisfied [ ]

(E). Highly dissatisfied [ ]

13. While considering an investment which factor/s acts as an obstacle?

(A). Lack of knowledge [ ] (B). Lack of money [ ]

(C). Lack of time [ ] (D). All of the above [ ]

14. Has the recent global recession affected your investment decision?

(A). Yes [ ], (how) ______________________________________________________________

(B). No [ ]

15. Are you considering any new investment in near future?

(A). Yes [ ]

(B). No [ ], (why)_____________________________________________________

Signature

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