INTRODUCTION TO THE

RESEARCH PROJECT

Scope of Study:
The project aims to study the:

• Awareness among the general public about SMS marketing of banking products.
• Effectiveness or rate of response of the public towards SMS marketing.

Sample Size:
In this survey , 52 respondents , all having bank accounts in different banks, as well as 6
Banks , 1 from the Public Sector, 2 from the Foreign Sector and 3 from the Private Sector
have also provided their valuable response.

Sources of Data:
In this study, the mode of collecting data was through:

• Questionnaire given to banks

• Questionnaire given to account holders in various banks and,
• Mobile Marketing Association.

Organization of Field work:

The study involved a field work of 10 days, i.e. from 30th of June,2010 till 9th July,2010. The
Banks were contacted directly to provide information for the questionnaire and the account
holders were contacted through a social networking site.

Limitations of the Study:

• The study was limited to only 6 banks, i.e. 1 from the Public sector, 2 from the
Foreign sector and 3 from the Private sector.
• Equitable distribution of banks from private, public and foreign sectors was not
possible due to non-cooperation from the public sector banks.
• The study was limited to the information collected through questionnaires from 52
respondents.
• Due to time constraints, a large sample size was not able to be collected.

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 BANKING: AN INTRODUCTION
TYPES OF BANKS
Banks' activities can be divided into

1. Retail banking, (dealing directly with individuals and small businesses)

2. Business banking,(providing services to mid-market business)
3. Corporate banking, (directed at large business entities)
4. Private banking, (providing wealth management services to high net worth
individuals and families)
5. Investment banking, (relating to activities on the financial markets. Most banks are
profit-making, private enterprises. However, some are owned by government, or are
non-profit organizations.)

Types of retail banks

• Commercial bank: the term used for a normal bank to distinguish it from an
investment bank. (Banks that only engage in banking activities such as- deposits and
loans from corporations or large businesses),(investment banks were limited to capital
market activities)..

Community banks: locally operated financial institutions that empower employees to

make local decisions to serve their customers and the partners.

Community development banks: regulated banks that provide financial services and credit
to under-served markets or populations.

Postal savings banks: savings banks associated with national postal systems.

Private banks: banks that manage the assets of high net worth individuals.

Offshore banks: banks located in jurisdictions with low taxation and regulation. Many
offshore banks are essentially private banks.

Savings bank: Objective-to provide easily accessible savings products to all strata of the
population. small and medium-sized enterprises. They differ from commercial banks
by their broadly decentralized distribution network, providing local and regional
outreach—and by their socially responsible approach to business and society.

Building societies and Landesbanks: institutions that conduct retail banking.

Ethical banks: banks that prioritize the transparency of all operations and make only what
they consider to be socially responsible investments.

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 Types of investment banks

• Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for
their own accounts, make markets, and advise corporations on capital market
activities such as mergers and acquisitions.
• Merchant banks were traditionally banks, which engaged in trade finance. The
modern definition, however, refers to banks that provide capital to firms in the form
of shares rather than loans.

Both combined

• Universal banks, more commonly known as financial services companies, engage in

several of these activities. These big banks are very diversified groups that, among
other services, also distribute insurance— hence the term bancassurance, a
portmanteau word combining "banque or bank" and "assurance", signifying that both
banking and insurance are provided by the same corporate entity.

Other Types of Banks

• Central banks are normally government-owned and charged with quasi-regulatory

responsibilities, such as supervising commercial banks, or controlling the cash interest
rate. They generally provide liquidity to the banking system and act as the lender of
last resort in event of a crisis.
• Islamic banks adhere to the concepts of Islamic law. This form of banking
revolves around several well-established principles based on Islamic
canons. All banking activities must avoid interest, a concept that is
forbidden in Islam. Instead, the bank earns profit (markup) and fees on the
financing facilities that it extends to customer.

COMMERCIAL BANKS

A commercial bank is a type of financial intermediary and a type of bank.

An institution which accepts deposits, makes business loans, and offers related services.
Commercial banks also allow for a variety of deposit accounts, such as checking, savings,
and time deposit. These institutions are run to make a profit and owned by a group of
individuals.

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Commercial banking is also known as business banking.

CLASSIFICATION OF COMMERCIAL BANKS:

1) Public Sector Banks: A commercial bank wherein majority of shares are held by the
government of India or RBI is a public sector bank. In public sector banks 51% of shares are
held by the government and 49% by others.

* Allahabad Bank
* Andhra Bank
* Bank of Baroda
* Bank of India
* Bank of Maharastra
* Canara Bank
* Central Bank of India
* Corporation Bank
* Dena Bank
* IDBI Bank
* Indian Bank
* Indian Overseas Bank
* Oriental Bank of Commerce
* Punjab & Sind Bank
* Punjab National Bank
* Syndicate Bank
* UCO Bank
* Union Bank of India
* United Bank of India
* Vijaya Bank

2) Private Sector Banks:

Banks in which government only controls activities through RBI without holding stake in
equity share capital of banks are Private Sector Banks. These are banks in which shares are
held by private individuals.

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 * Axis Bank Ltd.
* Bank of Rajasthan Ltd.
* Bharat Overseas Bank Ltd.
* Catholic Syrian Bank Ltd.
* City Union Bank Ltd.
* Dhanalakshmi Bank Ltd.
* Development Credit Bank Ltd.
* Federal Bank Ltd.
* HDFC Bank Ltd.
* ICICI Bank Ltd.
* IndusInd Bank Ltd.
* ING Vysya Bank Ltd.
* Jammu & Kashmir Bank Ltd.
* Karnataka Bank Ltd.
* Karur Vysya Bank Ltd.
* Kotak Mahindra Bank Ltd.
* Laxmi Vilas Bank Ltd.
* Nainital Bank Ltd.
* Ratnakar Bank Ltd.
* South Indian Bank Ltd.
* SBI Commercial and International Bank Ltd.
* Tamilnad Mercantile Bank Ltd.
* Yes Bank Ltd

3) Foreign Banks:

These are banks, registered with their head quarters in a foreign country but operate in our
country through their branches. They are also controlled by RBI.

*ABN AMRO Bank N.V.

*Abu Dhabi Commercial Bank Ltd.

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*American Express Bank Ltd.
*Bank of America, NA
*Bank of Bahrain & Kuwait BSC
*Mashreq Bank PSC
*Bank of Nova Scotia
*Bank of Tokyo Mitsubishi UFJ Ltd.
*Citibank N.A
*Deutsche Bank
*Hongkong & Shanghai Banking Corporation Ltd.
*Societe Generale
*Sonali Bank
*BNP Paribas
*Barclays Bank p.l.c.
*DBS Bank Ltd
*Bank Internasional Indonesia
*Arab Bangladesh Bank Ltd.
*Standard Chartered Bank
*State Bank of Mauritius Ltd.
*Bank of Ceylon
*Cho Hung Bank
*Chinatrust Commercial Bank Ltd.
*Krung Thai Bank plc.
*Antwerp Diamond Bank N.V.
*J P Morgan Chase Bank
*Mizuho Corporate Bank Ltd.
*Oman International Bank SAOG

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BANKING PRODUCTS

Banks in India have traditionally offered mass banking products:

. Deposit products

• Savings Account
• Current Account
• Term deposit Account

Lending products

• Cash Credit
• Term Loans.

(Due to Reserve Bank of India guidelines, Banks have had little to do besides accepting
deposits at rates fixed by Reserve Bank of India and lend amount arrived by the formula
stipulated by Reserve Bank of India at rates prescribed by the latter. PLR (Prime lending
rate) was the benchmark for interest on the lending products. But PLR itself was, more often
than not, dictated by RBI.)
Remittance products

• Drafts,
• Telegraphic Transfers
• Bankers Cheque
• Internal Transfer of funds.

In view of several developments in the 1990s, the entire banking products structure has
undergone a major change.
As part of the economic reforms, banking industry has been deregulated and made
competitive. New players have added to the competition.
IT revolution has made it possible to provide ease and flexibility in operations to customers.
Rapid strides in information technology have, in fact, redefined the role and structure of
banking in India.
Further, due to exposure to global trends after Information explosion led by Internet,
customers - both Individuals and Corporate’s - are now demanding better services with more
products from their banks. Financial market has turned into a buyer's market. Banks are also
changing with time and are trying to become one-stop financial supermarkets. Market focus
is shifting from mass banking products to class banking with introduction of value added and
customised products.

Foreign & Private sector banks and a few Public sector banks have already introduced

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customized banking products like:

1. Investment Advisory Services

2. SGL II accounts
3. Photo-credit cards
4. Cash Management services
5. Investment products
6. Tax Advisory services
7. Mutual fund schemes
8. Insurance
9. Debit cards
10. Flexi deposits
11. ATM cards
12. Personal loans (including consumer loans, housing loans and vehicle loans)

Eventually, the Banks plan to market bonds and debentures, when allowed. Banks also offer
advisory services termed as 'private banking' - to "high relationship - value" clients.
The bank of the future has to be essentially a marketing organisation that also sells banking
products.
New distribution channels are being used;

• Banks are outsourcing services like disbursement and servicing of consumer loans,
Credit card business.
• Direct Selling Agents (DSAs) of various Banks go out and sell their products. They
make house calls to get the application form filled in properly and also take your
passport-sized photo.
• Home banking has already become common, where you can order a draft or cash over
phone/internet and have it delivered home.
• Net banking service-ICICI bank was the first among the new private banks to launch
its net banking service, called Infinity. It allows the user to access account
information over a secure line, request cheque books and stop payment, and even
transfer funds between ICICI Bank accounts.
• Corporates are also deriving benefit from the increased variety of products and
competition among the banks. Certificates of deposit, Commercial papers, Non-
convertible Debentures (NCDs) that can be traded in the secondary market are gaining
popularity.
The market has also seen major developments in treasury advisory services. With the
introduction of Rupee floating rates for deposits as well as advances, products like interest
rate swaps and forward rate agreements for foreign exchange, risk management products like
forward contract, option contract, currency swap are offered by almost every authorized
dealer bank in the market. The list is growing.

BANK MARKETING
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Bank marketing is defined as the aggregate of functions , directed at providing services to
satisfy customers financial and other related needs and wants , more effectively and
efficiently that the competitors keeping in view the organizational objectives of the bank.

After the bank has set up their marketing goal and marketing budget for their
products, the most important action for marketing their products is to choose the best
marketing medium.
There are hundreds of ways for advertisement but only a few will be suitable for each
product to reach the potential customers.
(Remember the marketing medium is the only way to deliver a company’s marketing
message and if you fail to choose the appropriate medium for your product to promote that
might bring you only loss of money nothing else. So, it is very important to select the right
medium so that you get the highest return on your marketing budget. To ensure this choose
the most suitable marketing medium, which has the most potential to deliver the marketing
message to your prospective customers.)

The following are the marketing tools to consider as effective marketing

mediums:

Online-Offline Ads

• Newspaper Ads
• Articles
• Newsletter
• Classified Ads
• Social Networking
• Yellow pages

Online Ads

• Website
• Email marketing
• Google and other adwords bid
• Search engine paid inclusion.

Electronic media Ads

• Television Advertisement
• Sweepstakes
• Tele-classes

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 • Telemarketing
• Mobile-SMS
• Fax broadcasts
• Information commercial
• FM Radio Ads

Off-line advertisements

• Banners
• Trade shows
• Posters in appropriate public places
• Contents
• Seminars
• Public speaking
• Postcards
• Door Hangers
• Media Releases
• Door-to-door
• Magazine Ads
• Special events
• Sales letters
• Brochures
• Gift Certificates
• Sign picketing
• Business cards
• Catalogs
• Air Blimps
• Window display
• Charity events
• Billboards
• Flyers

Remember it’s the marketing approach what makes a product successful in the market-
your customer need to feel that you have some genuine intention to serve them and to
do so choosing the right marketing medium is the first hurdle to cross in business world.

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 MOBILE MARKETING

Mobile marketing is defined as

1. “The use of the mobile medium as a means of marketing communication.” or
2. “Distribution of any kind of promotional or advertising messages to customer through
wireless networks.” or
3. “Using interactive wireless media to provide customers with time and location
sensitive, personalized information that promotes goods, services and ideas, thereby
generating value for all stakeholders".
In November 2009, the Mobile Marketing Association updated its definition of Mobile
Marketing:
4. “Mobile Marketing is a set of practices that enables organizations to communicate and
engage with their audience in an interactive and relevant manner through any mobile
device or network.”
“Mobile marketing is also commonly known as wireless marketing.”

FACTORS TO BE CONSIDERED WHEN USING

MOBILE MARKETING:

1. Addressable audience: How many handsets currently in the target market can support the
technology (e.g., MMS) that will be used for the campaign?
2. Case studies: Have other banks used mobile marketing to reach the target audience? If so,
what worked – and didn’t? Are there any best practices for this type of campaign?
3. Variables: What are the technical and creative limitations? Will the campaign have to be
customized to meet any unique carrier, handset and network requirements? If so, how does
that customization affect the campaign’s cost and timetable?
4. Business case: What is the campaign’s projected cost? Is the campaign likely to provide a
solid return on investment (RoI)?
5. Partners and enablers: Which agencies and/or mobile service providers will you need to
work with in order to execute the campaign?
6. Timing: How much time will it take to create and execute the campaign? Does that
timeline fit the brand’s objectives?

REASONS FOR EFFECETIVENESS

1. One reason why mobile marketing is so effective is because it provides brands with a way
to reach their target demographics throughout the day instead of just when they’re at a
computer, watching TV or reading a magazine.

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2. Mobile marketing can leverage other media, such as by including a short code on a
billboard so passers-by can get information on the spot.

Recent research shows that TV is the leading media for educating and encouraging
consumers to use their mobile devices to participate in a mobile marketing campaign.

TYPES OF MOBILE MARKETING:

1. SMS
Short Message Service (SMS) is the most widely used messaging vehicle for mobile
marketing. Also known as “texting,” SMS supports text messages of about 160 characters,
depending on the handset and network. (It’s also possible to create longer SMS messages by
stringing together multiple 160-character messages.) SMS messages can be sent a variety of
ways, including from one handset to another, from a PC to a handset and from a handset to a
PC.

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 SMS is a worldwide phenomenon that began in Europe. Worldwide, there are more
than twice as many SMS users as there are e-mail users. These statistics are noteworthy
because they show that most mobile users are familiar with SMS, so mobile marketing
campaigns don’t have to educate them about text messaging.

SMS supports common short codes (CSCs), which are phone numbers – usually four
to six digits – to which cell phone owners can send text messages. In return, they receive
alerts, information and electronic coupons, and get the opportunity to participate in contests
and other interactive marketing initiatives. By making it fast and convenient for mobile users
to select and receive information, CSCs greatly increase consumer response to advertising
and marketing promotions.

2. MMS
Multimedia Messaging Service (MMS) is similar to SMS, except that it primarily
supports graphics, photos, audio and video. As a result, MMS provides mobile marketers
with additional tools, such as the ability to offer wallpaper that promotes a brand or product.
For example, a music fan can send an SMS message to a short code in order receive an MMS
with a video clip of her favorite artist.

MMS leverages the growing installed base of camera phones. Cameras now are
common even on low-cost, entry-level handsets, making MMS a viable way to reach nearly
all demographics. Mobile marketers can use MMS and camera phones for “viral” campaigns
and other tactics that rely on user-generated content.

3. Interactive Voice Response (IVR)

IVR is a computerized voice system that allows consumers to interact with a voice menu.
Users can respond to voice prompts by speaking or by using their phone keypad.

IVR provides mobile marketers with another response channel or as an enhancement to SMS.

IVR services are rapidly being adopted in a wide range of mobile marketing campaigns
and/or services.

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Some commonly used IVR services are:

• Recorded Services: Companies running recorded services, such as horoscopes, or

stock information services for example, can upload their recorded content real time
into the IVR system and bill it via premium SMS.

• Live Contests/Votes: Companies running live competitions can accept answers via
voice call and generate revenue from callers in the process. The contest results can be
combined with votes collected by standard rate or premium SMS.

4. Bluetooth

Bluetooth is a short-range (about 33 feet) wireless technology that allows users to download
applications, content and other data to their mobile phone.

Mobile marketers can use Bluetooth to deliver, for example, ringtones, wallpapers and
games, such as when a consumer walks past a billboard or kiosk.
The rise of Bluetooth started around 2003 and a few companies in Europe have started
establishing successful businesses. This technology has the advantages that it is permission-
based, has higher transfer speeds and is also a radio-based technology and can therefore not
be billed (i.e. is free of charge).

That’s something to consider if a campaign is targeting price-sensitive demographics. Eg’s---

1) Recently Tata Motors conducted one of the biggest Bluetooth marketing campaigns in
India for its brand the Sumo Grande.

2) Walt Disney promoting their movie 'High School Musical’

5. Mobile Search
One can upload downloadable content on the mobile web for the target customers to access.
How will people find your downloadable content? Just as people use search to explore the
Internet, mobile search is playing an increasingly important role in helping users navigate the
increasingly complex world of the mobile Web. As a result, mobile search is emerging as a
very important user-acquisition vehicle.

Just like on the Internet, you will have two ways to participate in the search experience:
algorithmic search and paid (sponsored) search. Algorithmic search involves no payment;
these are the search results that the search technology determines to be most relevant. Paid or
sponsored search are ad placements where advertisers pay to be placed on certain pages or
with certain keywords.

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The search ecosystem is still developing. Most carriers are partnering with mobile search
focused companies (e.g., Medio Systems, JumpTap, InfoSpace) to provide the search
application to the carrier’s subscribers. Additionally, the large Internet search companies
(e.g., Google, Yahoo, MSN) are deploying their own mobile search solution.

6. WAP and the Mobile Web

The key to leveraging mobile Internet access is providing users with just the right amount of
information within a navigation system that is fast and convenient to use.

Unlike on their PCs, mobile Internet users are less interested in browsing and more focused
on accomplishing a specific task. Being aware of this purpose-driven usage is one of the first
steps to learning what kinds of content will work for your brand.

Wireless Application Protocol (WAP) is a technology platform used to create Web sites that
are easily accessed from handsets, even those with small screens and limited processing
power. WAP has steadily improved with each new version. Today, WAP 2.0 is standard on
most handsets, even entry-level models. WAP allows users to access a wide range of content
and services, including streaming audio and video.

WAP also supports banner advertising, giving marketers and brands another tool for reaching
mobile users. Mobile ad serving companies help brands reach consumers on high traffic sites
such as USA Today and The Weather Channel, as well as more niche sites, such as Zoo
vision. More than 60 percent of U.S. wireless customers have a handset that includes a WAP
2.0-compatible browser. This installed base includes nearly everyone who purchased a
handset in the past two years. Those people also tend to be the ones who access the mobile
Web most frequently. There also are roughly 50 million older handsets with WAP 1.X
browsers, so the mobile Web is now available on roughly 140 million devices.

The primary means of delivering mobile content – such as ringtones, wallpaper, games and
applications – is by a process known as “WAP push,” where a mobile Web page is forwarded
to a handset in the form of a text message. The amount of content provided on these
download pages tends to be minimal, such as only the link to download the item. However, in
some cases it can involve pushing an entire micro site to a consumer’s handset.

THE TARGET AUDIENCE

Millennial (people age 25 and younger) make up a large portion of consumers using mobile
data. It’s reasonable to assume that younger people will be more likely to respond to a call to
action that involves using the Internet browser on their phone.

However, there are a large and growing number of older mobile Internet users with high-end
smart phones. They regularly check their office e-mail on their BlackBerry, Palm or other
Smart phone, and those e-mails often drive them onto the mobile Web, such as via a link
embedded in e-mail.

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This usage highlights why it’s a mistake to assume that mobile

Web usage is limited to the youth demographic.

The figure below illustrates this age breakdown.

African Americans, Hispanics and Asians index higher on mobile data usage.

With nearly 9.6% of all consumers using the mobile Internet, the United States has now
joined a growing number of countries Worldwide that have a substantial population of mobile
Internet users, including Japan (40%) China (20%, urban), Australia, (9%), UK (9%), and
South Korea (9%) and India (4%). In many cases, consumers may prefer to access the
Internet from their mobile device when and where they have the urge, rather then waiting
until they’re near a computer.

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 SMS MARKETING
Marketing Communications through SMS (Short Message Service):-

"Marketing is the process of planning and executing the conception, pricing, promotion,
and

distribution of ideas, goods, services, organizations, and events to create and maintain
relationships that will satisfy individual and organizational objectives."

-Contemporary Marketing Wired (1998) by Boone and Kurtz.

1. What is SMS?

• SMS refers to “Short Message Service” and involves the delivery of text messages to
mobile handsets.
• SMS is a general name for the technology that enables users to send and receive text
messages via mobile phones.

• Currently, SMS has an extremely high consumer usage, but a low business adoption.
In other words, while billions of SMS messages are delivered between individual
consumers each month, the use of SMS as a part of business and marketing strategies
is (relatively) low.
• But this relatively low business usage is changing rapidly, with more and more
organizations realizing the benefits of SMS, and using it as a new media within their
traditional marketing communications strategies.
• The reason for this increase in business usage is clear – SMS is an
extremely cost-effective, high-response-rate vehicle, which can help to acquire and

retain consumers, sell and promote products, drive loyalty, and reinforce branding
efforts.

Standard communications mediums available to marketers and advertisers are usually rated
on
three factors: Reach, Cost and Effectiveness / Retention

Medium Reach Cost Retention

Television One of the Highest Very High Good

Radio Medium Medium Poor

Internet [Banners] High Medium Dropping

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Email High Extremely Low Extremely Low

Print Media Low High High

Billboard / POS / Medium Medium Medium

POP

Moving Media Medium High Medium

Telephone Medium High Medium

Fax Low Medium Low

Standard Mailers High High Medium

Personal Interaction Low High High

As a new medium available, SMS has the following characteristics:

SMS High Reach Low Cost High Retention

SMS-MARKETING-
Is therefore a situation, where marketers to innovatively
market their products use SMS as a marketing medium which has not only proved as the
easiest and quickest, but also as the most cost-effective form of marketing.

2. Where does SMS fit in?

• WAP, 3G, GPRS and other wireless protocols have been touted as the next big thing
for quite some time, and none have truly materialized.
• SMS on the other hand, has grown of itself into a worldwide phenomenon.
• As marketing professionals, CRM specialists and business people there is
a great opportunity to harness this medium and be able to serve our customers better
as a result .

• Improved client services, communications and value delivery will in turn result in
greater returns and business success.

3. MARKETING MESSAGES. (Making Marketing Work)

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3 key goals that all marketing should strive to achieve, in order for it to be considered
successful:

• It should generate more new clients in new markets,

• More business should be generated from existing clients, or
• Gross profit margins must be improved

For this reason it is vital for the goal of the ‘campaign’ to be clearly understood before the
message or medium are established.

Before designing an advertising or marketing campaign using SMS we need to consider:

1. Who is the message addressed to?

[New clients and markets, or existing customers?]

2. What response is required?

[Is there an action that we want customers to perform?]

3. What is the message?

[What is the gist of the message that you want to carry across?

3.1. Content is Critical:

• Regardless of your chosen media, the content that you deliver is vital to your success.
If your message is not clear, your goal will not be achieved.
• Bigger is also not necessarily better. Yes, the larger the medium the more likely your
audience may be to see it. But your aim is not merely for a message to be seen. The
message must also be understood, remembered and acted upon.
• SMS places an interesting challenge on us in this respect. With a limitation of only
160 characters, we should make sure the message which we write is clear and to the
point.

3.2. Client Databases

• In order to create an SMS marketing campaign, a database must be created that

consist of the phone numbers of the clients that are targeted.The companies, which
can constitute their lists, can add new numbers to these lists by using different
channels.
• The channels can be:
Inside the company - the companies own database.

Outside-databases that can be provided from consulting firms, SMS operators,

yellow pages etc.

• This process is sensitive because of the requirements and outlines defined by the law.

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TYPES OF SMS MARKETING

Types of SMS Marketing can be defined in three different contexts in general;

1. Purchase Context
[Defines SMS as a product based on the way it is purchased]

2. Technical Context
[Defines the types of SMS Marketing from the mobile operator point of view.]

3. User Context.
[Defines it from the benefit the SMS provides to the target customer.]

The common point of these types is that the payment type of these SMS can be defined based
on the request of the buyer (the sender). The company that wants to send SMS can chooses
either to pay the price of the SMS itself or to charge the price to the target customer.

1. Purchase Context
In SMS marketing campaigns, there are two different SMS methods as a product:

• A company can either choose to make a deal with the carrier for a promised amount
of SMS for a given time (mostly 1 year). This is called bulk SMS.
• The company can choose to buy SMS packages that are being sold by the carrier in
specified amounts like 1.000 or 500.000 or it can be included on the standard price
numbers of dispatch etc. This is called piece SMS.

Marketing strategy is obtained by making corporate SMS purchasing agreements either with
Mobile operators or different SMS reseller companies. The more amounts of SMS purchased,
the less money is paid for an SMS.

2. Technical Context
There are three types of SMS from the technical perspective.

• One way SMS's

(One way SMS is an SMS that sent by the sender to the target customers. With this type
of SMS an answer from the target customer is not expected and most of the time not
allowed. So there is no customer interaction.)
• Single shot SMS's
(One way Fast SMS (Single Shot) is an SMS, which is sent by the sender to the target
customer, and an answer from the target customer is not allowed. The most important
feature of this type is that the SMS is valid for a defined time (mostly a short period like 3
minutes). Because of this feature, the SMS must be sent immediately after it is triggered.
This type is mainly used to send passwords that are valid for the defined time (Like a

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 password that will be used by the target customer to log in into his/her different accounts
over the internet).)

• Two way SMS's

(Two Way SMS is an SMS sent by the sender to the target customer and an answer from the
target customer is expected if he/she wants to join or use the services/benefits that are
offered. Since there will be a client interaction, the SMS number that is used to sent this type
of SMS must be configured to receive SMS that will be sent by the customers.)

3. User Context

• Premium SMS : gives clients the option to earn money on certain text messages and
content for which consumers will pay to send or receive. Clients can hold voting
contests, like those on many realities TV shows, daily horoscopes, a VIP program, or
other instances where new information is time-sensitive, making that information
valuable to the consumer.
• Mobile Coupons (to convert special offers into purchases) will benefit businesses and
customers alike-promoting spending while saving money for consumers. In addition,
the convenience and "green" factor (no excess paper or ink needed to produce them)
of digital coupons, such as mobile coupons, make them especially appealing to
consumers today.
• Text-To-Screen(lets your audience interact with your brand) is a premium service
that allows marketers to create polls and quizzes especially for a particular event.
[ A marketer can use giant video screens that are traditionally at these (shows, parties, major
sporting events) places to advertise a poll or quiz, compel the crowd to participate and then
post the results on that same screen in real time.]

CORPORATE SMS WORKING

Process: Client applications have a speciality of working as internet-based environment and
desktop execution with local database. The applications, which are served as free for
customer usage, can be accumulated in three main titles:

1. Desktop SMS application

2. Web SMS application (web base) and

3. Office SMS application, (which can be provide sending SMS from directly Microsoft
Excel.)
After controlling SMS sending offer from these applications out of institutional servers >
SMSs are transferred on Internet at the same time to the related mobile operator > Then,
these SMSs are transmitted to the mobile phones.

21
The corporate SMS system can be classified in 3 categories;

• First one is the public enterprise, in which SMS application is an indispensable

requirement for each company. For instance; small announcements can be transferred
to the people by associations, labour unions, foundations, etc. By the way; it provides
an opportunity to get lower costs and make the works rapidly.
• The second one is the private sector institutions especially finance (banking),
automotive, market, retailers, etc. They announce their campaigns to the related
clients at the same time and this provides a returnable and customer fidelity.
• The last category is about the education sector, in which corporate SMS was began
to see as an essential requirement and called service by the guardians. A private class
was began preference by giving the services of lack of continuity, examination results
and other reports.

ADVANTAGES OF SMS MARKETING

• Speed:
Text messages are received virtually immediately, making it the ideal solution for
distributing information, whether that information is coupons for products, time-
sensitive information, or anything else than can benefit a business through timely
delivery.
SMS advertising is time-based - This means you can deliver you ads at the exact time
your advertisement will have maximum impact. For example you can send an ad for a
TV program 5minutes before it starts.

• Readability:
As 94% of all text messages are read, your marketing message will be seen by
virtually all of the subscribers in your SMS program. Moreover, mobiles are on 12-
24 hours every day, encouraging audiences to take action as soon as they see an ad,
rather than waiting until later, such as when they’re at a PC.

• Qualified Recipients:
Since your subscribers have opted-in to receiving your offers and promotional
messages, you know they have an active interest in your business, and your
products.

• Flexibility:
With text messages sent and received within minutes of starting your campaign, you
can use mobile marketing for ad-hoc purposes, such as driving traffic to your store on
slow nights (“Make a purchase within x hours, and receive a xx % discount!”), or
clearing out overstock items before end of month. This is the new “Blue Light
Special”!

• Range of Use:
Mobile marketing can be used for a wide range of purposes: announcing new
product, one-day specials, new store openings, special events…etc. Subscribers can
be treated as an exclusive group for offers and information that only they have access
to, increasing loyalty, purchases, and speed of communications.

22
 • Cost Effective:

SMS advertising is cost effective as you can do it at a fraction of cost of traditional

advertising techniques.

OTHER BENEFITS
• Extending marketing communications beyond traditional media
• Complementing traditional media in order to increase awareness
• Allowing companies to target specific audiences
• Providing immediate, granular information about response to a marketing
campaign
• Allowing marketers to reach audiences wherever they are, even when they’re
mobile
• Providing opportunities to generate revenue every time users interact with
messaging
• Ideal for all age groups.
• It is two way communicaton, which means you can receive an instant
response from the receiver by providing a short code in the SMS.
• SMS-based polls can be done
• SMS alerts can be sent for alerting patients for taking medications, alerting
people about special situations, payment due alerts, invitation for
events, reminders for meetings, events. Usage is unlimited!

23
DETERMINANTS OF EFFECTIVE
SMS MARKETING
Mobile advertising has become one of the most popular applications in mobile commerce,
particularly in the form of text advertising through SMS (Short Messaging Service).
Nowadays most companies acknowledge the importance of SMS marketing in reaching and
interacting with their customers. However, there is much discussion regarding the
effectiveness when it comes to SMS marketing. Are customers willing to accept, reading and
using SMS messages, how effective is SMS marketing compared to traditional marketing
communications is what we are going to see. There are different aspects
that can have the potential to influence the effectiveness of SMS marketing. The most
important aspects are : location , time , interactivity , incentive, appeal , source , product
involvement and attitude towards mobile advertising. In brief the different aspects are
described.

For the first aspects, location and time, we notice that mobile phone users carry their phone
all the time, wherever they go. This provides the marketers with the opportunity to locate a
particular consumer and to target people in a certain location. By adapting a service that takes
into consideration the position of the user, more meaningful and relevant advertisements or
promotions can be sent to the potential customers.. In other words, prospects can be reached
when and where it is most suitable for the effectiveness of the marketing campaign . The
mobile phone exceeds the time-space paradigm of traditional marketing. So there is no longer
a temporal and spatial separation between buyers and sellers. Therefore location-based
advertising is regarded as a very promising opportunity for marketers.

SMS marketing may or may not contain an interactive element. Interactive elements can
convince the potential customer to search for more information concerning the advertised
product or service and can convince the potential customer to give feedback to the advertiser.
Interactive media exhibit a two-way communication enabling the recipient to affect the
communication process actively. The mobile phone is a new, digital and interactive device,
which allows the recipient of a message to reply to it immediately. This leads to the creation
of a continuous dialogue and the establishment of a relationship between the marketer and the
consumer, allowing the marketer to better understand the target audience , to use the
consumers’ feedback to customize messages and offerings and to improve future products
and services. For the traditional marketing communication the interactive element is not
always present. SMS advertisements lead to more positive attitudes toward the advertisement
and the brand and to more positive purchase intentions compared to advertisements to
newspapers, when the perceived effort to buy the advertised product is low.

SMS advertisements also have a range of possibilities to provide incentives to the mobile
phone users. The effectiveness of incentives shows that individuals are greatly interested in
acquiring financial benefits from direct marketing programs.

24
Another aspect which can influence the effectiveness of SMS marketing is the advertising
appeal. Regarding this issue the quality of information sent on the mobile phone is crucial,
because due to the absence of sound, image and motion SMS ads may not be effective in
inducing a significant emotional appeal. Product involvement
can also influence the effectiveness of marketing communication. Whether consumers react
to advertising communication in an active or passive way and whether they process this
communication in a limited or extended way, depends on their level of involvement. It is
argued that the consumer's level of involvement depends on the degree of personal relevance
of the product for that consumer. However MMS, the latest technological application, uses
WAP (Wireless Application Protocol), which can lead to messages that are one hundred
times greater than a traditional SMS. For traditional marketing communications, especially
for print advertisements, there is no limitation on the amount of characters used.

SMS advertising provides many opportunities and challenges for the advertising industry.
Because the mobile phone is a very personal device, using it for marketing purposes, would
signify that marketers would be able to address the consumers individually and enter into a
direct dialogue with customers.

With relevance to SMS marketing of banking products , the concept of SMS marketing and
its determinants remain the same. The following features of SMS turn a well-planned mobile
marketing campaign into a powerful tool:

• SMS messages can be sent and read at any time.

• SMS messages can be sent to an offline mobile phone.
• SMS messaging is not intrusive.
• 100% of GSM mobile phones support SMS messages.
• SMS messages are capable of carrying binary data besides text (e.g. ringtones and
logos).
• Two-way SMS allows customers to reply to messages.
• SMS supports reverse billing & premium campaigns.

25
EFFECTIVENESS OF SMS-
MARKETING OF BANKING
PRODUCTS: Client Survey
Hi,

We have to complete a project as part of my coursework this year. For this, I

need to get a bunch of questionnaires filled out. So I would highly appreciate it
if you could fill in the questionnaire below

This survey is only for persons who currently have a bank account of their own.

Thank you!
* Required

Name of respondent *

Name of respondent's bank *

a) Sector the bank belongs to *

• Private

• Public

• Foreign

b) Age *

• 18-25

• 26-35

• 36-45

• 46-60

• 60 and above

26
c) Gender *

• male

• female

d) Occupation *

• student

• self-employed

• salary-employed

• government employed

• service

• Other:

1) Which among the following banking products do you use the most? *

• Home/personal Loans

• Mutual Funds

• Tax Planning

• Insurance

• Equity Share/Debentures

• Credit/Debit card

• Safe Deposit Lockers

2) Which of the following banking products are you NOT aware of? *

• Home/personal Loans

• Mutual Funds

• Tax Planning

• Insurance

• Equity Share/Debentures

• Credit/Debit card

• Safe Deposit Lockers

27
3) Which banking product would you want to know more about? *

• Safe Deposit Lockers

• Home/personal Loans

• Mutual Funds

• Tax Planning

• Insurance

• Equity Share/Debentures

• Credit/Debit card

• Other:

4) Which channel of marketing would you prefer to provide you with the above information? *

• Television

• Radio

• Newspaper and Signboards

• Bluetooth Marketing

• SMS Marketing

• Web/E-Marketing

• Other:

5) Do you know what SMS-Marketing is? *

• yes

• no

• very vaguely but would want to know more about it

• very vaguely and dont want to know more

6) Are you aware that SMS-Marketing of banking products and mobile banking are two different
concepts?

* Mobile banking refers to carrying out all banking transactions through your cell phone and the former
refers to advertising via text messages.

• yes

28
 • no

7) Does your bank use SMS-marketing?

* Sms-marketing is informing you or advertising their products via sms

• yes

• no

8) If yes, are these SMSes one-way or two-way?

*Two-way is when you are given the option to respond or further contact the bank through the SMS toll
free no whereas one-way is when you just receive the information.

• One-way

• Two-way

• I've never tried responding back so I don't know

9) If these are two-way do you reply often or do you just ignore them?

• Reply

• Ignore

10) Would you prefer a One-way SMS or Two-way? *

• One-way

• Two-way

• Either way I don't care.

11) Would you find it useful if your bank sent you information about the NEW PRODUCTS available via
SMS? *

• yes

• no

12) Would you like to receive information regarding your BILLS AND BALANCES via SMS? *

29
 • yes

• no

13) On a scale of 1-10 how effective do you think SMS marketing is or how much of an affect does it have
on your choices? *

1 2 3 4 5 6 7 8 9 10

Least Most
Effective Effective

14) Please comment on the reasons of the above rating. * Reasons and

suggestions

15) Do you want an option to block these advertisements? *

• yes

• no

Submit

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30
 EFFECTIVENESS OF SMS-
MARKETING OF BANKING
PRODUCTS: Client Survey

ANALYSIS OF THE RESPONDENTS

a. Age-wise analysis

All are respondents were between 18-25 years of age.

b. Occupation-wise analysis

Occupation No of 100%
respondents
Student 35 66%
Self 3 6%
employed
Salary 14 27%
employed
Government 0 0%
employed
Service 0 0%
Other 1 1%

31
 Interpretation: Our research includes the opinions of students, professionals, salary
employed and self employed individuals. But most of our research is based on the opinion of
students.

c. Gender-wise analysis

Gender of No of 100%
respondent respondents
Male 35 67%

Female 17 33%

Interpretation: We have taken the opinion of 35 male and 17 females in our survey.

d. Sector-wise analysis

Sector No of 100%
Banks
Private 23 44%

Public 20 39%

Foreign 9 17%

Interpretation: Among our 52 respondents, 23 had bank accounts with Private

Banks, 20 had an account with Public banks and 9 had Foreign bank accounts.

ANALYSIS OF OUR SURVEY

1) Which among the following banking products do you use the most?

Banking Products No of 127%

respondents
Home/personal
3 6%
Loans

32
 Mutual Funds 7 13%

Tax Planning 2 4%

Insurance 4 8%
Equity
4 8%
Share/Debentures
Credit/Debit card 46 88%

Safe Deposit Lockers 5 10%

*People may select more than one checkbox, hence the percentage adds up to more
than a 100%

Interpretation: Among 52 respondents a whopping 88% (I.e.46) of them use

credit/debit cards. Mutual funds and Safety deposit lockers followed. Tax planning was the
least used (only 2 of 52 respondents used it).

2) Which of the following banking products are you NOT aware about?

Banking Products No of 119%

respondents
Home/personal
1 2%
Loans
Mutual Funds 5 10%

Tax Planning 31 60%

Insurance 6 12%
Equity
12 23%
Share/Debentures
Credit/Debit card 2 4%

33
 Safe Deposit Lockers 4 8%
*People may select more than one checkbox, so percentages may add up to more than 100%

Interpretation: People had the least knowledge about tax planning, equity
shares/debentures and insurance as banking products. 60% of our 52 respondents did not
know about tax planning, clearly showing it needs to be marketed more.

3) Which banking product would you want to know more about?

Banking Products No of 135%

respondents
Safe Deposit Lockers 4 8%
Home/personal Loans 4 8%
Mutual Funds 16 31%
Tax Planning 19 37%
Insurance 5 10%
Equity Share/Debentures 15 29%
Credit/Debit card 4 8%
Other 2 4%

*People may select more than one checkbox, so percentages may add up to more than
100%.

34
 Interpretation: Tax planning, mutual funds and equity shares/debentures seem to
interest the public more than the above. Tax planning was chosen by 19 of 52 respondents
and mutual funds by 16 of the 52.

4) Which channel of marketing would you prefer, to provide you with the above
information?

Channel of No of respondents 174%

Marketing
Television 20 38%
Radio 4 8%
Newspaper and 16 31%
Signboards
Bluetooth 2 4%
Marketing
SMS Marketing 14 27%
Web/E-Marketing 27 52%
Other 2 4%

*People may select more than one checkbox, so percentages may add up to more than
100%.

35
 Interpretation: 52% of the 52 respondents have chosen web/e-marketing as their
preferred channel to receive the information about the banking products. 20 of the 52 have
chosen television and a significant 27% of our respondents approve of SMS- Marketing.

5) Do you know what sms-marketing is?

General Awareness No of 100%

respondents
yes 29 56%
no 4 8%
very vaguely but would want to know more about it 14 27%
very vaguely and don’t want to know more 5 9%

36
 Interpretation: 92% of the 52respondents atleast had a vague idea as to what sms
marketing is. Moreover among the 92%, 27% of the 52 showed interest in learning more
about it.

6) Were you aware that SMS-Marketing of banking products and Mobile Banking
are two different concepts?

General No of 100%
Awareness respondents

Yes 43 83
no 9 17

37
 Interpretation: General awareness among the public is good with reference to
SMS-Marketing. A mere 17% of the 52(i.e. 9of the 52) respondents had confused SMS-
Marketing for Mobile Banking.

7) Does your bank use SMS-marketing?

Use of No of 100%
SMS respondents
Marketing

Yes 24 46
No 28 54

Interpretation: Majority of the banks (54%) do NOT use SMS-Marketing. However,

a significant 46% of the 52banks are using it to promote their products.

Use of SMS marketing by Public, Private and Foreign Banks

Sector the bank Does the Bank use SMS

belongs to Marketing
Total Yes No
Public 20 6 14
Private 23 12 11
Foreign 9 6 3

38
 25

20

15

Public
10
Private

5 Foreign

0
Total Yes No

Does the Bank use

SMS Marketing

Interpretation: It can be observed that among the 20 Public banks only 6 use SMS-
Marketing whereas among just 9 Foreign banks there are only 3 which do not use this means
of marketing. There seems to be a significant number of private banks which use the medium
as well as a good amount of banks that don’t. The trend of SMS-Marketing is already felt in
the Foreign bank sector and seems to be catching on to the Private bank sector as well.

8) If yes, are these SMSes one-way or two-way?

One-way Unsure Two-way

No of
respondents 10 12 2

10
One-way
Unsure
Two-way
12

Interpretation: Among the 24 respondents who had bank accounts with banks that
used SMS-Marketing, 10 banks used a one-way SMS technique of marketing, 2 used the two-
way SMS technique and the majority 12 had never tried responding back to be sure of the
technique employed.

9) If these are two-way do you reply often or do you just ignore them?

Ignore Reply

39
 No. of
respondents 13 1

Reply, 1

Ignore
Reply
Ignore, 13

Interpretations: among the 2 respondents who received two-way SMSes 1 replied.

The other 1 and the 12 people who were unsure of receiving a two-way SMS just ignored the
message sent.

10) Would you prefer a One-way SMS or Two-way?

Preference No. of 100%

respondents
One-way 13 25%
Two-way 24 46%
Either way I don’t care 15 29%

Interpretation: Among the 52 respondents, 13 preferred a non-interactive one-way SMS and

24(46% of the respondents) preferred a more interactive, Two-way SMS. The remaining 15
are ignored here as they are the ones who most probably don’t find SMS-Marketing effective
enough and generally ignore all such SMSes.

11) Would you find it useful if your bank sent you information about the NEW
PRODUCTS available via SMS?

Useful No. of 100%

Respondents
yes 43 83%

40
no 9 17%

Interpretation: A majority of 83% of our respondents found it very useful to receive

information regarding new products launched. Only 9 of the 52 did not find it useful.

12) Would you like to receive information regarding your BILLS AND BALANCES
via SMS?

Receive via SMS No. of 100%

respondents
yes 50 96%
no 2 4%

Interpretation: A whooping majority of 96% of our respondents i.e. 50 out of the 52 would
like to receive SMSes regarding their bills and balances.

A Comparative Study: New Products and Bills & Balances

Subject of
SMS yes no
new products 43 9
bills and
balances 50 2

41
 More Demanded Information: New
Products/Bills and Balances

60

No. of respondents
50
40
yes
30
no
20
10
0
new products bills and balances
New Products/Bills and Balances

Interpretation: 50 respondents wanted to receive information regarding their bills and

balances whereas only 43 respondents wanted to receive information regarding new products.
This, the banks could perhaps market their new products along with the message containing
information of the customers bills and balances. This would ensure they read it and thus it
would be more effective.

13) On a scale of 1-10 (1 being the least effective and 10 being the most effective.)
how effective do you think SMS marketing is or how much of an affect does it
have on your choices?

Scale No. of Respondents 100%

1 1 2%
2 0 0%
3 6 12%
4 5 10%
5 8 15%
6 8 15%
7 8 15%
8 11 21%
9 5 10%
10 0 0%

42
 Least Most
Effective Effective

Interpretation: 21% of the 52 respondents, on a scale of 1-10, thought it was a 8 in

effectiveness, which is very good. It shows that a significant no. of people do base their
decisions on these advertisements. We had most of the responses between 5 and 7 on the
same scale, also a very positive sign. Only 24% of our respondents gave it a point below
5 i.e. did not find it effective.

14) Please comment on the reasons of the above rating.

Useful because:

• Informs us about various things without effort. Creating awareness about new and
revised products and services.
• SMS can be accessed on-the-go, whereas other mediums can’t be accessed 24x7.
• Instantaneously grabs one’s attention.
• Immediate responses and feedback is facilitated.

Suggestions:

• SMSes should be sent for those particular products or segments as required and
requested by the customers. The information should be necessary and the products
should be of good quality. Other wise they just cause annoying spam and lose their
effectiveness.
• They should not be too frequent. Maybe 1 message every 2days or so as otherwise it
loses its effectiveness.
• Should provide a means of knowing in detail about a particular product advertised.
• They should be a facility of getting a notification each time your debit/credit card is
swiped. This helps keeping a check on balances and preventing thefts.
• The customer should have an option as to subscribing for it and should be able to
choose the type of messages he/she wishes to receive.

Most customers like this way of marketing and also find it useful but think it still needs
a lot of improvisation and further development. Many generally tend to consider these
SMSes as spam and delete them before reading as they find it annoying. Thus, banks
should be more selective about what they advertise and how much they advertise.

Everything done in excess loses its effectiveness.

43
15) Do you want an option to block these advertisements?

Block SMS- No. of 100%

Advertisements Respondent
s
yes 31 60%
no 21 40%

Interpretation: 31 of the 52 respondents i.e. 60% of them thought it was effective,

however, still wanted an option to block these advertisements. 21 of them said the option
was not required.

44
 EFFECTIVENESS OF SMS-
MARKETING OF BANKING
PRODUCTS: Bank Survey
* Required

Name of the Bank *

The sector the bank belongs to:

• Private Sector

• Public Sector

• Foreign

1) Which of the following banking products, is most marketed? *

• Safe Deposit Lockers

• Credit/Debit card

• Insurance

• Tax Planning

• Mutual Funds

• Home/personal Loans

• Equity Share/Debentures

• Other:

2) Which banking product is most marketed through sms?*

• Equity Share/Debentures

• Home/personal Loans

• Mutual Funds

• Tax Planning

• Insurance

• Credit/Debit card

45
 • Safe Deposit Lockers

• Other:

3) Which banking product is most sold/demanded? *

• Safe Deposit Lockers

• Equity Share/Debentures

• Home/personal Loans

• Mutual Funds

• Tax Planning

• Insurance

• Credit/Debit card

• Other:

4) Which is the most preferred/ most used medium of marketing? *

• Television

• Radio

• Newspaper and Signboards

• Bluetooth Marketing

• SMS Marketing

• Web/E-Marketing

• Other:

5) Which marketing medium has the highest response rate? *

• Television

• Radio

• Newspaper and Signboards

• Bluetooth Marketing

• SMS

• Web/E-Marketing

• Other:

46
6) Does your bank use sms-marketing? *

• yes

• no

7) If yes, are these SMS's one-way or two-way?

• One-way

• Two-way

8) If these are two-way do customers reply often or are these SMSs ignored??

• Ignore

• Reply

• Reply Rarely

9) If used, on a scale of 1-10 how effective is sms marketing w.r.t. banking products?

1 2 3 4 5 6 7 8 9 10

Least Very
effective effective

10) If not used, would you want to start using SMS-marketing to market your products?

• yes

• no

11) Why are you not/ why would you not want to use it?

47
 13) What are the reasons for choosing this marketing medium?

Submit

48
 EFFECTIVENESS OF SMS-
MARKETING OF BANKING
PRODUCTS: Bank Survey

ANALYSIS OF THE BANKS SURVEYED

Sector the bank belongs to Name of the Bank No. of Banks 100%
Private Sector HDFC Bank, Karnataka 3 50%
Bank Ltd., South Indian
Bank

Public Sector Canara Bank 1 17%

Foreign HSBC, Standard 2 33%
Chartered Bank

The sector the bank belongs to:

No. of Banks

ANALYSIS OF OUR SURVEY

1) Which of the following banking products, is most marketed?

Banking Product No. of *283%

Banks
Safe Deposit Lockers 3 50%

49
Credit/Debit card 3 50%
Insurance 3 50%
Tax Planning 2 33%
Mutual Funds 3 50%
Home/personal Loans 2 33%
Equity Share/Debentures 0 0%
Other 1 17%
*People may select more than one checkbox, so percentages may add up to more than 100%.

No. of banks

Interpretation: All the above banking products are marketed almost equally other than
equity shares/debentures, they are not marketed at all. Mutual Funds, Safe Deposit Lockers,
Credit/Debit card and Insurance were marketed a lot by most banks.

2) Which banking product is most marketed through sms?

Banking Product No. of Banks *217%

Equity Share/Debentures 1 17%
Home/personal Loans 3 50%
Mutual Funds 1 17%
Tax Planning 2 33%
Insurance 3 50%
Credit/Debit card 2 33%
Safe Deposit Lockers 0 0%
Other 1 17%
*People may select more than one checkbox, so percentages may add up to more than 100%.

50
 No of banks

Interpretation: The loans and insurance seem to be a banker’s favourite when it comes to
SMS-Marketing. It is closely followed by tax planning and credit/debit cards. Safe deposit
lockers are not marketed via SMS by any of our sample 6 banks.

3) Which banking product is most sold/ demanded?

Banking Product No. of Banks *218%

Safe Deposit Lockers 1 17%
Equity Share/Debentures 0 0%
Home/personal Loans 3 50%
Mutual Funds 1 17%
Tax Planning 1 17%
Insurance 1 17%
Credit/Debit card 5 83%
Other 1 17%
*People may select more than one checkbox, so percentages may add up to more than 100%.

51
 No of banks

Interpretation: Credit/debit cards followed by home/personal loans are said to be the most
sold/ demanded banking product. 5of the 6 banks sold credit/debit cards the most. Mutual
funds, tax planning, insurance, safe deposit lockers and fixed deposits were all chosen by
only 1 bank each as the most sold, clearly showing that the banks do not agree on their
demand or that the demand of each banks customers vary. Equity shares/debenture were not
demanded much by the customers of any of our sample 6 banks.

4) Which is the most preferred/ most used medium of marketing?

Marketing Medium No. of *266%

Banks
Television 3 50%
Radio 2 33%
Newspaper and Signboards 5 83%
Bluetooth Marketing 0 0%
SMS Marketing 3 50%
Web/E-Marketing 2 33%
Other 1 17%
*People may select more than one checkbox, so percentages may add up to more than 100%.

52
 No of banks

Interpretation: 5 of the 6 banks preferred newspapers and signboards as a medium of

marketing. SMS-Marketing and television followed suit. Bluetooth marketing was not
preferred by any of the sample 6 banks. Standard Chartered Bank was the most innovative,
and preferred the marketing received via sponsoring events.

5) Which marketing medium has the highest response rate?

Marketing Medium No. of Banks *183%

Television 3 50%
Radio 0 0%
Newspaper and Signboards 5 83%
Bluetooth Marketing 0 0%
SMS 2 33%
Web/E-Marketing 1 17%
Other 0 0%
*People may select more than one checkbox, so percentages may add up to more than 100%.

No of banks

53
Interpretation: according to our sample 6 banks, newspaper and signboards had the highest
response rate. Television was also considered effective by 50% of them. SMS marketing was
considered effective by 33% of our banks. Radio, was the most ineffective medium of
marketing according to them.

6) Does your bank use SMS-Marketing?

Usage of SMS-Marketing No. of banks Banking 100%
Sector
yes 3 Private 83%
2 Public

no 1 17%

Usage of SMS-Marketing in Public,

Private and Foreign Banks

5
4

No of 3 foreign
banks 2 public
1 private

0
yes no
Usage

Interpretation: Among the 6 sample banks, 5 used SMSes as a marketing medium. Among
these 5, 3 were Private Sector Banks and 2 were Foreign Sector Banks. The one that did not
use this marketing medium belonged to the Public Sector.

7) If yes, are these SMS's one-way or two-way?

Type of SMS-Marketing Employed No. of *83%

banks
One-way 3 50%
Two-way 2 33%

*Only the banks who use SMS-Marketing have answered, so percentages may add up to less than
100%.

54
 Type of SMS

No. of 3
Banks Two-way
2
One way
1

0
yes no
Usage of SMS-Marketing

Interpretation: Among the 5 banks that used SMS-Marketing, 3 sent one-way SMSes and 2
of them sent the more interactive, two-way SMSes.

8) If these are two-way do customers reply often or are these SMSes ignored??

Response No. of banks *34%

Ignore 0 0%
Reply 1 17%
Reply Rarely 1 17%
*Only the banks who use Two-way SMS-Marketing have answered, so percentages may add up
to less than 100%.

No of banks

Interpretation: The 2 banks that used two-way SMSes felt that clients do reply at least at
times if not always. But both felt the SMSes weren’t ignored all together.

9) If used, on a scale of 1-10 (1 being the least effective and 10 the most) how effective is
SMS-Marketing w.r.t. banking products?

Scale No. of 100%

banks
1 0 0%
2 0 0%

55
 3 3 50%
4 0 0%
5 1 17%
6 1 17%
7 0 0%
8 1 17%
9 0 0%
10 0 0%

No. of banks

Least Most
Effective Effective

Interpretation: Half of the banks did not find SMS-Marketing very effective. 2 banks
thought it had potential and only 1 bank found it truly effective.

10) If not used, would you want to start using SMS-marketing to market your products?

The 1 bank that does not use SMS-marketing at present said it would like to start
using it soon.

11) Why are you not/ why would you not want to use it?

It is a relatively new method and still not fault-free.

12) What are the reasons for choosing this marketing medium?

• Immediate response
• Economical method as it is cost-effective.
• Wide reach as most people own mobile phones.
• Creates awareness on-the-go, without any effort.

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 CONCLUSION

The project is a research project compiled through questionnaires given out to banks of three
respective sectors, namely private, public and foreign as well as the general public having
bank accounts in different banks.

We questioned 52 clients of various banks regarding the effectiveness of SMS- Marketing.

The 52 respondents are all between the age group of 18 to 25 years. It is also seen that
majority of these respondents have accounts in private banks. When we conducted our bank
survey, we found it easier to approach private banks as they were more cooperative than the
public and foreign banks. Moreover, they were more in number as compared to foreign
banks.

It is seen that 88% of the respondents use credit/debit cards the most among all banking
products. Bankers also feel that safe deposits, credit/debit cards, insurance and mutual funds
are the most marketed banking product.

The banking products which most of them are unaware of are tax planning and then shares
and debentures. The above two also happen to be the top two banking products which
respondents want to no more about.

Web marketing and television marketing of banking products is most popular among these
respondents. But it is seen that banks find advertising through newspaper and sign boards
more effective.

Majority of banking customers are aware of SMS marketing but most of these people though
prefer to get messages regarding new banking products, they often ignore these messages.
Through SMS marketing, insurance is marketed the most.

On a scale of 1 to 10 the general public respondents rate SMS marketing as 8, which is fairly
good. On the other hand on a scale of 1 to 10 the banks rate SMS marketing as 3, which
means it, seems to be the least effective way of marketing according to banks.

According to banks, many people have handy mobile phones and the message will be viewed
immediately. They feel it has a wide reach and is an economical method of marketing which
is cost effective and has a speedy response .According to the account holders or banking
customers, SMS marketing is very effective as it informs them about various things without
them having much to do. However, they feel it needs to be further developed and banks
should reduce the spam and send useful information.

So both ways it seems to be advantageous but since it’s a new aspect it’ll take time to have its
effect on the market.

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