Analysis of Grameen Bank : A Project of Micro-credit System for Poor

Analysis of Grameen Bank : A Project of Micro-credit System for Poor
            Poverty is one of the biggest menace faced by the human beings. Bangladesh is one of the poorest countries of the world. It is faced with multi dimensional challenges of over population, insufficient food, unemployment and traditional based economy coupled with corrupt governance. In the early 1970s, Dr. Muhammad Yunus (Professor of Economics at the University of Chittagong) envisioned an unorthodox way of alleviating poverty by circumventing the major impediment to lending to the poorest in society. He tested this instinct in an experiment in 1976, when he lent about $27 to 42 women in an ordinary Bangladeshi village. Just 30 years later, Grameen Bank has more than 6.61 million borrowers (97 percent of whom are women), 2.226 branches, services in over 50,000 villages and assets of more than $6 billion. Amazingly, the bank has a 98.8 % recovery rate.
            The story behind the first concerted effort to make financing accessible to the world’s

poorest is the stuff of folklore. Befitting the goal of poverty alleviation, the setting for this early experiment was a time of great tragedy in Bangladesh, one of the poorest countries in the world. A small country in the Indian subcontinent with a population of 130 million, a gross national product (GNP) per capita of about $300 and a literacy rate of only 38 percent for those over 15 years of age,  Bangladesh experienced drought and famine in 1974 that killed 1.5 million people. Having completed studies as a Fulbright scholar in the United States, Professor  Mohammad Yunus felt increasingly frustrated at his inability to ease the sufferings of the poor of his country.
            Dr. Yunus attributes the origin of his vision to a chance encounter in Jobra village with Sufia Begum, a 21-year-old woman who, desperate to support herself, had borrowed about 25 cents from moneylenders charging exorbitant interest rates approaching 10 percent per day. Ms. Begum used the money to make bamboo stools that, as a condition of the loan, she sold back to the moneylenders at a price well below market value for a profit of about of 2 cents. Ms. Begum’s desperate position could best be described as bonded labor. Yunus found 42 people in Jobra in the same poverty trap, and in 1976 he experimented by lending them small amounts of money at reasonable rates. Yunus lent a total of $27, about 62 cents per borrower. To his pleasant surprise, all the borrowers repaid the loans, in the process convincing him that this success could be replicated across Bangladesh.
            From these humble efforts emerged a new industry: micro-credit, the extension of small loans and other financial and business services to entrepreneurs too poor to qualify for traditional bank loans. Micro-credit has since proven to be an effective tool for alleviating poverty and, in addition to creating wealth, generating positive externalities, such as better education and improved health.
            Dr. Yunus carried his success story to traditional banks and proposed that they could also make uncollateralized loans to society’s poorest. In response, the banks asserted that borrowers would never sufficiently organize themselves to repay, that proceeds from such loans were too small to cover administrative costs and that female borrowers would simply hand over the funds to their husbands. Early critics argued that even if lenders avoided these pitfalls, the last thing the poor needed was the added burden of indebtedness.
            Dr. Yunus answered these challenges by founding an institution of his own, Grameen Bank, the name of which derives from gram, the Bengali word for “village.” He did so in the belief that capital is a friend of the poor and that its accumulation by the poor represents their best means of escaping the abject poverty that the welfare state and wasteful, corrupt and incompetent international aid organizations have failed to combat.
            Yunus’s vision was of a bank that would address all aspects of rural life and support commercial activities ranging from manufacturing to retail, including even door-to-door sales. The bank would require no collateral and would prove once and for all as “the bank-ability of the un-bankable.” In 1983, Grameen was incorporated as a bank after the government had passed legislation allowing Grameen Bank to accept deposits.
            Grameen Bank targets the poorest of the poor, with a particular emphasis on women. Women represent a suitable clientele because, given that they have less access to alternatives, such as traditional credit lines and salaries, they are more likely to be credit constrained and they have an inequitable share of power in household decision making. Lending to women also generates considerable secondary effects, including empowerment of a marginalized segment of society. At present out of the total number of borrowers (6.61 million), 97 per cent of them are women.
            Each of Grameen’s 2226 branches (as of August 2006) is run by a branch manager and several center managers, who together cover an area of 15 to 22 villages. Together they learn their local area of operations intimately in order to identify and develop strong relationships with prospective clients. This effort to get close to the community is reflected in the program’s operating costs.
            Grameen Bank is a not-for-profit organization owned by its borrowers. Loan amounts,
which start at $35 and average $200, depend on the needs of the borrower and her level of credit (determined by previous borrowing and repayment record). Interest rates are kept relatively low and as close as possible to prevailing commercial rates. While these low rates squeeze the bank’s profit margins, they support its primary focus on alleviating poverty rather than generating high returns. Other for profit microfinance institutions (MFI) of the Grameen Bank that have raised rates considerably in order to increase margins, provide capital for growth and attract for-profit investors continue to enjoy strong demand for their services. This suggests that rates high enough to cover the risks inherent in uncollateralized loans are not unreasonable or unbearable.
            Grameen Bank maintains its own regulation system outside the purview of the Central
Bank of Bangladesh and relies heavily on social pressure among the group members to keep default rates low. The members of each lending group experience great peer pressure to meet the terms of their loans, as they know everyone in the group well enough to understand the importance they place on receiving their disbursement. Defaulting will cost a member her reputation in the village because her failure deprives others of needed loans. The combination of support and peer pressure from the group provides borrowers with sufficient motivation to meet the terms of their loans.
            Dr. Yunus has devised a typically unorthodox solution to the issue of poorest of the poor. It is true that many of his borrowers are now effectively middle-class, if one considers that many of them now have children at or graduating from a university. He decided to prove that Grameen is indeed a banker to the poor by requiring that the bank make every effort to lend to those whom he considers the poorest: beggars. He has instructed over 18,000 employees to try and “have at least one customer who is a beggar”. As of August 2006, Grameen Bank has 81,000 beggar clients, all on interest free loans. At the end of the year, the bank expects to learn how many of these beggar clients have changed their status completely and become socially acceptable entrepreneurs. Through the loan-issuing process, Grameen Bank also gathers information about circumstances and reasons for borrowers’ conditions.
            Beginning with a simple experiment in 1976, Grameen Bank has become one of the largest enterprises in Bangladesh and has lifted millions of people out of poverty, mostly women and their families. To gauge the efficacy of the system, 6 million women have already attained loans through Grameen Bank which translates into 30 million family members. If even 5 percent of these are able to lift themselves out of poverty every year, then in Bangladesh alone one million people are lifting themselves out of poverty every year as a result of micro-credit system. This is a remarkable social achievement by any standard.
            Through Dr. Yunus’s efforts and those of the bank he founded, poor people around the world, especially women, have been able to buy cows, a few chickens or the cell phone they desperately needed to get ahead. Dr. Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world. On October 13, 2006, the Norwegian Nobel Committee awarded the Nobel Peace Prize for 2006, divided into two equal parts, to Dr. Muhammad Yunus and Grameen Bank for their tremendous efforts to alleviate poverty from one of the poorest countries of the world.


A Proposed Leave Management System for Dutch-Bangla Bank Limited

Moreover, DBBL has introduced ATM cards and Internet banking to ensure the customer’s freedom to choose his/her own banking hours. 1. 1. 1 Vision Dutch-Bangla bank dreams of better Bangladesh, where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. DBBL’s essence and ethos rest on a cosmos of creativity and the marvel – magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development [4]. x .
1. 2 Mission Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social responsibility. Profits alone do not hold a central focus in the bank’s operation, because man does not live by bread and butter alone[4]. 1. 1. 3 Core Objectives Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue form its pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its vaunted marques “Your Trusted Partner” [4].
. 1. 4 Products and Services DBBL is offering Products and Services in three main forms: • Deposit • Term Deposit • Loan and Advances 1. 1. 4. 1 Deposit Under Deposit the following products are available: • Savings Deposit Account • Current Deposit Account • Short Term Deposit Account • Resident Foreign Currency Deposit • Foreign Currency Depositxi • Convertible Taka Account • Non-Convertible Taka Account • Exporter’s FC Deposit (FBPAR) • Current Deposit Account-Bank • Short Term Deposit Account-Bank 1. 1.

4. 2 Term Deposit Under Term Deposit the following products are offered: Monthly Term Deposit • Term Deposit 3 Months • Term Deposit 6 Months• Term Deposit 12 Months • Term Deposit 24 Months • Term Deposit 24 Months 1 Year Payout • Term Deposit 36 Months • Term Deposit 36 Months 6 Months Payout • Term Deposit 36 Months 1 Year Payout • Term Deposit above 36 Months • Monthly Term Deposit Banks • Term Deposit 3 Months Banks • Term Deposit 6 Months Banks • Term Deposit 12 Months Banks • 1 Month TD NFCD • Months TD NFCD • 6 Months TD NFCDxii 1. 1. 4. 3 Loan and Advances The followings are known as Loan and Advances products: • Loan against Trust Receipt • Transport Loan Consumer Credit Scheme • Real Estate Loan (Res. ; Comm. ) • Loan against Accepted Bill • Industrial Term Loan • Agricultural Term Loan • Lease Finance • Other Term Loan • FMO Local Currency Loan for SME • FMO Foreign Currency Loan • Cash Credit (Hypothecation) • Small Shop Financing Scheme • Overdraft 1.
1. 5 Social Responsibilities of DBBL Dutch-Bangla Bank Limited (DBBL) is the first Bangladeshi-European joint venture bank in Bangladesh addresses social concerns that threaten the structure of society and redress social conditions that adversely affect the wellbeing of people and society.DBBL practice thus encompass the professional activities of helping individuals, families, groups, organizations, and communities to enhance or restore their capacity for optimal social functioning and of creating societal conditions favorable to this goal. xiii 1. 2 Objective of the Project The advancement in technology in the last few decades has improved our lives in every aspect. Manually driven systems are being substituted by the computerized systems.The existing Leave Management System of DBBL is totally manual to keep track of all the leave associated records such as leave status, employee’s availability and creating yearly reports etc.
DBBL uses a very lengthy process to grant or refuse leave including finding out the eligibility of the employees for the type of leave applied for. Moreover, the information can be distorted as it has to go through a long chain of officials. The objective of this project is to formulate a sensible analysis of the current system to find out its problems and thus design a new computerized system which will be more optimized and synchronized.The management will be availed with such a system which may make their task simpler incase of leave related activities and the employees will not need to wait for a long time to know the decision of the management. 1. 3Why Leave Management System? When I was accepted as an intern by DBBL, I was placed in Mohakhali Branch under the direct supervision of the Branch Manager. The Branch Manager allowed me to observe the functionalities of all the departments and also let me browse the software named “Flex-cube”, which they are using for all the transactions.
I found that, all the schemes are automated except the Leave Management System and this manual system is creating a lot of problem for the management. I have discussed with the Branch Manager and let him know my interest to automate this system. He accepted my proposal and told me about their expectations from this system. xiv 1. 4 Methodology In the beginning, key data has been extracted from a detailed description of the current Leave Management System as a whole, and then potential problems in the current system have been identified.Next, proposed system has been elaborated and after that the goal of the project has been established to provide better data reliability, more automation and less effort. Efficient real time data storage, data manipulation capabilities and up-to-date report generation are the most important concerns of the proposed system.
Then, key aspects of the proposed system are explained in details with prototype-planning phase, analysis phase and design phase. 1. 5 Organization of the Report In chapter II, the Existing System has been described. I have given the complete elaboration of the Proposed System in chapter III.Conclusion is written in chapter IV and then references and appendices are attached. xv 2. 1 Requirements Determination Requirements determination is one of the most complicated and prolonged part of developing a new system.
It is the combination of gathering and analyzing information about the existing system. The primary objectives of the requirements determination are to understand the existing policies, identify the problems of the current system and collecting required data to develop a model of the new system. The deliverables for requirements determination that I have used are nterview transcripts, business mission and strategy statements, job descriptions of the employees, existing written documents and the results of Joint Application Design (JAD) sessions. With the intention of collecting the required data for my project I have interviewed Mr. Mashiur Rahman, the Manager of Mohakhali Branch of DBBL. He gave me an overall idea about the leave associated activities that he has to go through when an employee seeks leave. Then he referred me to Mr.
Almas Uddin, the executive officer of the Human Resource Department (HRD) of DBBL.He explained some part of the leave policy of DBBL and provided me with some documents on service rules of DBBL. With the due permission of the Branch Manager I have organized two JAD sessions. In these sessions all the employees of Mohakhali branch participated and gave their priceless feedback. The outcomes were summarized and delivered to all the participants of these sessions. The outcomes of these sessions enabled me to find out the problems that both the management and the employees are facing from the existing system and their expectations from the new system. xvi 2.
2 An Overview of the Leave Policy 2. . 1 Categories of Leave Subject to fulfilling the terms and conditions as stipulated rules, the following eight types of leave may be admissible to an employee of DBBL. These are: 1. Earned Leave with full pay 2. Extraordinary Leave without pay 3. Medical Leave 4.
Special Disability Leave 5. Quarantine Leave 6. Maternity Leave 7. Study Leave 8. Casual Leave 2. 2. 2 Description of Different Types of Leave Earned Leave with full pay: This type of leave is allowed for the employees who have completed 1 (One) year of continuous service in the bank.
An employee is allowed to take earned leave once in a calendar year.This period has to be less than 30 (Thirty) days. Extraordinary Leave without pay: This type of leave may be granted for a maximum period of 2 (Two) months to an employee in special circumstances, when no other type of leave is available. This type of leave is allowed once for an employee in his/her entire service life. At least 3 (Three) years of continuous service is must for this type of leave. Medical Leave: Leave on medical ground may be granted for the period not exceeding 2 (Two) months. At least 1 (One) year of continuous service is needed for an employee to be eligible for this type of leave.
vii Special Disability Leave: Special disability leave may be granted by the Human Resource Department to an employee who is disabled by injury inflicted or caused in course of, or in consequence of, the due performance of his/her official duty, or in consequence of his/her official position. This type of leave shall not be granted unless the disability manifested itself within three months of the occurrence to which it is attributed, and the person disabled acted with due promptitude in bringing it to the notice of the competent authority.An employee should comprise at least 3 (Three) years of continuous service to get this type of leave and the leave period should not exceed 6 (Six) months. Quarantine Leave: Quarantine leave is the leave of absence from duty by an employee as the presence of an infectious disease is found in his/her body. Cholera, Pox, Jaundice, Plague, Diphtheria, Typhoid, Measles, Mumps, Cerebra–spinal and Meningitis are considered as infectious diseases. An employee is allowed to take quarantine leave from his/her joining day at DBBL. The period of quarantine leave should not exceed 1 (One) month.
Maternity Leave: Maternity leave may be granted by the competent authority to an employee for a maximum period of 3 (Three) months at a time. This type of leave shall not be admissible to an employee for more than two occasions during her entire period of service life. To be eligible for this type of leave one must complete 2 (Two) years of continuous service in the bank. Study Leave: Study leave for a period not exceeding 2 (Two) years may be granted by the HRD to an employee to enable him/her to study or undergo special courses of training considered useful for his/her services under the bank.An employee should encompass at least 3 (Three) years of continuous service to acquire the study leave. xviii Casual Leave: This kind of leave refers to a leave of absence for a very short period of days granted to an employee who may be unable to attend duty due to sudden illness or urgent private/family affairs. The total number of days for which casual leave shall be admissible in a calendar year to an employee shall not exceed 15 (Fifteen) days.
Moreover, not more than 6 (Six) days casual leave can be taken at a time. This kind of leave is allowed for an employee from his/her very first day at DBBL. 2. 2. Leave is not the Right Leave cannot be claimed as a matter of right. The competent authority shall have the right to refuse, or grant leave for a shorter period than applied for. No employee shall remain absent from duties, nor leave place of positioning on any ground whatsoever without obtaining prior approval of leave from the authority.
2. 2. 4 Recall from Leave An employee on leave may be recalled to duty before expiry of the leave and if recalled, s/he shall be treated on duty from the date on which s/he starts for the station. xix 2. 3 Description of the Existing System The existing Leave Management System of DBBL is manual.It is a lengthy process and this process is not optimized. The Human Resource Department and/or the Branch Manager are the competent authorities for the approval or refusal of leave depending on the type of leave.
The Leave Management System is initiated with the submission of an application by an employee for leave. This application must be submitted to the Controlling Officer at least one month ahead (with the exception of casual leave and the quarantine leave) from the date of commencement of the leave applied for. For the branches of the bank, the Second Manager of the branch acts as the controlling officer.The controlling officer is responsible for checking out the eligibilities of the employee for the type of leave s/he has applied for. If the applicant is eligible then the controlling officer submits the application to the Branch Manager. The work of the Branch Manager is the most complicated as s/he is responsible for the synchronization of the leave. Moreover, he is also accountable for the smooth functionality of the branch.
In case of Earned Leave with full pay, Medical Leave, Quarantine Leave and Casual Leave the Branch Manager has the sole authority to grant or refuse the leave.If the Branch Manager allows an employee for leave, s/he should inform the HRD by submitting a report, which will contain the details about the approved leave. For these types of leave the HRD do not allow any alternative employee. For the other four types of leave the Branch Manager sends the application to the Human Resource Department for approval. Then the HRD takes their decision and let the Branch Manager know the result by an official letter. Then the Branch Manager informs the applicant. So, an employee can not but wait for a long time to know the decision of the competent authority.
Sometime the HRD sends a backup officer to the branch if they approve the leave of an employee for a long period of time. xx Furthermore, the Branch Manager is supposed to send an annual report informing the leave status of a calendar year to the HRD. Each branch maintains a register for the leave associated affairs. The Controlling Officer use to maintain this log. The Branch Manager uses this register to prepare the annual report. As the annual leave report is nothing but the summary of the leave register for a particular year, it is not that much helpful for taking any managerial decision.There is no opportunity to analyze the report and find out the scopes for improvements as the HRD is not getting any instant data from the report.
They are getting present year’s leave status in the following year. As a result the top management is not being able to utilize the report in a proper manner. So, the existing Leave Management System is a time consuming one. It needs to be more optimized and more synchronized which will lead the management to have a more proficient system to support the total employee management scheme. xxi 2. 4 Flowchart of the Existing SystemThe Flowchart of the existing Leave Management System, which has been described above is given below: Fig 2. 1: The flowchart of the existing Leave Management System.
xxii 2. 5 Drawbacks of the Existing System The current Leave Management System that DBBL is using has some drawbacks. The main drawbacks are: 1) Sometimes it happens that the branch runs short of employees as for the Casual leave and Quarantine leave the leave of absence is allowed and more than one employee remains absent on a same day. 2) Employees need to submit leave application one month ahead from the date of commencement of the leave applied for.Consequently, the employees cannot get the leave if it is immediately needed. 3) The leave register only contains the record of the granted leave. There is no pending leave list.
So, if an employee failed to get the permission for leave, s/he has to apply again for the next time. 4) There is no priority assigned for the types of leave. As a result, it may happen that a less deserved person is getting the authorization in place of the person who actually needs the leave. 5) Data flow from the branch to the HRD requires many days and gets delayed. ) The HRD is getting present year’s leave report in the following year. As a result they are not getting any current data from the report. 7) The proper synchronization is absent in this system.
8) The Branch Manager may not be totally transparent in case of the approval of leave. S/he may misuse the power as it is hard for the HRD to trace what is going on in the branch. xxiii 9) The total process is very lengthy and it can make an employee extremely dissatisfied if s/he waits for a month for leave and finally ends with not getting it.In conclusion it can be said that, from the existing system it is hard to get accurate, reliable and up-to-date information which ensures better management and thereby more efficiency in the administrative work. So, the existing system needs to be altered with a new synchronized and optimized system. xxiv 3. 1 Introduction of New Concepts and Constraints I have introduced several concepts and constrains in the proposed Leave Management System which are not present in the current system.
These ideas are used to make the proposed system more synchronized. 3. 1. 1 New ConceptsLeave Priority: Each type of leave is assigned with a priority. These priorities have been given on basis of the significance of the type of leave. Employee Priority: The employee priority is given on basis of the designation of the employee. If more than one employee is found with same designation, the service length of the employees is considered while assigning the priority.
Employee Expertise: Employee expertise is given depending on the performance record of an employee in a particular department. The Human Resource Department is responsible for assigning the expertise level for each employee.Minimum Expertise Required for a Department: Each and every department requires a minimum amount of cumulative employee expertise to operate smoothly. This requirement is calculated depending on the work volume of a particular department. xxv 3. 1. 2 New Constraints • If more than one employee applies for different types of leave, the employee who has applied for the type of leave with higher priority will be considered first.
• If more than one employee applies for same type of leave, the employee with higher priority will be considered first. The available cumulative employee expertise of a particular department should never be less than the minimum cumulative employee expertise required for the department to operate smoothly. xxvi 3. 2 Overview of the Proposed System Considering the existing problems of the Leave Management System, I have come up with a web based solution, which may simplify the work of the Branch Manager along with the Human Resource Department. The proposed system will help the competent authorities to formulate a decision regarding a leave request.The proposed system will be initiated if an employee fills up the leave request form and submits it. The system will verify the eligibilities of the employee for the type of leave s/he has applied for.
If the applicant is eligible then the information will be added to the pending leave list. The system will sort the pending leave list on basis of the priority of the type of leave. If more than one employee requests for the same type of leave, the system will use the employee priority to sort the pending leave list.It is the duty of both the Branch Manager and the HRD to check the pending leave list frequently. In case of Earned Leave with full pay, Medical Leave, Quarantine Leave and Casual Leave the Branch Manager will make the decision. The system will not allow the Branch Manager to grant any leave request if the available expertise of a department becomes less than the minimum expertise required for the smooth operation of that department. If the manager still needs to grant the leave request, s/he should recall an employee who is already on leave so that the available expertise remains adequate.
For the other four types of leave the Human Resource Department will make the decision. If the HRD grants any leave request they will have to send a backup officer to the branch with similar expertise. Furthermore, the proposed system will avail both the Branch Manager and the HRD with instant report generation. So the HRD will be able to see the leave status of a branch whenever they want and thus the proposed system will be helpful to take managerial decisions. xxvii 3. 3 Structuring the Proposed System: Process ModelingProcess modeling involves geographically representing the functions, or processes, which capture, manipulate, store and distribute data between a system and its environment and between components within a system [1]. 3.
3. 1 What is Context Diagram? An overview of an organizational system that shows the system boundaries, external entities that interact with the system and the major information flows between the entities and the system [1]. 3. 3. 2 Context Diagram of the Proposed System The context diagram is given in Appendix C. 3. 3.
What is Data Flow Diagram? A picture of the movement of data between external entities, the processes and data stores within a system [1]. 3. 3. 4 Data Flow Diagram of the Proposed System Data flow diagram is provided in Appendix D. 3. 3. 5 Use Case Diagram of the Proposed System Use case diagram is provided in Appendix E.
xxviii 3. 4 Design Phase 3. 4. 1 Designing Database The Branch Manager provided me with an idea about their expectation from the future system. Their main focus was on: • Pending leave list • Leave application form • Up to date leave statusSo, I have decided to design the database containing the tables which will be able to store the inputs for the desired outputs. In addition, the back-end database is created using MySQL. There is no query in the database.
Queries are maintained from the front-end. 3. 4. 1. 1 Finalizing the Tables for the Prototype No matter what information is to be retrieved from the fields of the tables, to me Employee Information and Leave Information are the key tables that should exist in the database. While working with the database I had to change the prototype repeatedly for the desired output.At last I finalized the design after getting the approval of both the company advisor and the academic advisor.
3. 4. 1. 2 Description of Tables The description of all the tables is provided in appendix A. xxix 3. 4. 2 Designing the User Interface While designing the user interface, I have tried to make the interfaces as userfriendly as possible so that from the interface the users easily understand what they are doing and what they should do.
Moreover, I have attached quick tips in all the buttons so that they can understand what will happen if they Click it.Again, I have used red stars beside the mandatory fields and at the beginning of the pages where red stars are used; it has been mentioned that the red started fields cannot be blank. 3. 4. 3 Forms and Validations I have used PHP and HTML to create the forms that has been used in the prototype. I kept the back ground very simple so that users can find the information easily. For validating the forms, I have provided massages to the users so that they can check and correct their inputted values without difficulty.
3. 4. 4 An Example of Form’s Validation An example of the validation of a form is provided in appendix B. . 4. 5 Report Generation In this system I have not used any report generating tool. All the reports (e.
g. Pending Leave List, Current Leave Status) have been generated using the SQL queries. These reports are shown on a page by using tables so that the users can view the requested reports. xxx 3. 4. 6 Logout Proper logging out is an important issue as it has a relation with the company’s privacy and security. A user must logout after s/he has completed his/her task.
I have used session for login and logout. Every time a user logins in, a variable will be crated in the session with the same value of the User Id.When the user will log out then the session variable will be destroyed. As a result, no one will be able to use the “Back” option from the tool bar to go back to any pages of the previous user. 3. 4. 7 Accessibility and Authentication Every organization has employees with different position and rank.
Moreover, different users has different task that they perform and they deals with divergent information. So, it is necessary to ensure that an employee will have accessibility only to those sections of the prototype which really required by them. For an example, an employee will not have the permission o access all the sections that the Branch Manager of the bank can access. So, accessibility of different users means privacy and security of important information of an organization. To maintain the accessibility I have used different forms for different types of user. When a user logs in, the system will check his/her user type and will present different pages accordingly. So, the Branch Manager will never be able to access the information which are not permitted for him/her but permitted for the System Administrator as they have different user type.
xxxi Fig 3. 1: Main page for Branch Manager Fig 3. : Main page for System Administrator In this system, all the users have some specific authentication rights and these authentication rights have been categorized on basis of the user type. These are:xxxii Branch Manager: • View the leave documentation. • View the pending leave list. • View the current leave status. • View the employee expertise list.
• View the minimum expertise required for a particular department. • View the available departmental expertise. • Grant the employee’s leave (for some particular types of leave). • Recall the employees from leave. • View the yearly report. • Change his/her password.System Administrator: • Create new user.
• Delete any user. • Add the employee information. • Update the employee information. • Delete the employee information. • Change his/her password. Employees: • View the leave documentation. • Apply for leave.
• View the result of his/her leave request. • Change his/her password. xxxiii Human Resource Department Officer: • View the leave documentation. • View the pending leave list. • View the current leave status. • Assign the employee expertise. • View the employee expertise.
• Update the employee expertise. • Assign the minimum expertise required for a particular department. View the minimum expertise required for a particular department. • Update the minimum expertise required for a particular department. • View the available departmental expertise. • View the employee information. • Grant the employee’s leave (for some particular types of leave).
• Recall the employees from leave. • View the yearly report. • Change his/her password. 3. 5 Implementation Phase 3. 5. 1 Coding and Testing I have used PHP and HTML for the front end and MySQL for the back end while implementing the system.
I have completed almost all the pages except few. I have not completed the rest because of time constrain.As I am yet to implement the total system, the system has not gone through the testing phase. xxxiv 3. 6 Benefits of the Proposed System The proposed system will solve most of the problems that the existing system encompasses. This web based system will make the total leave management process faster and it will also save a lot of time and energy. The main benefits are: 1.
The employees will not need to wait for a long time to know the decision of the authority as unlike the existing system where they need to submit the leave application one month ahead from the date of commencement of the eave applied for. 2. It will ensure that the most deserving person will get the leave as priority is assigned for each types of leave and for each employee. 3. Unlike the existing system where the leave register only contains the record of the granted leave, the pending leave list of the proposed system will contain the record of all the leave requests which are pending as a result an employee will not need to apply twice for the same leave. 4. Less chance of the manipulation of information as both the Branch Manager and HRD will get information directly from the system.
5.The management will get up-to-date report which will help them in decision making. xxxv 4. 1 Conclusion The proposed Leave Management System will make the whole leave management process efficient. Users will be able to access the software from anywhere. The employees may be applying for leave from their home as well. This supporting software will help the management in decision making in case of leave related affairs.
Moreover, it will ensure less paper works and as a result the whole process will be swift and reliable. xxxvi REFERENCES Book [1] Jeffery A. Hoffer, Joey F. Geroge and Joseph S.Valacich, “Modern System Analysis And Design”, Ed. 3 rd India: Pearson Education . (Singapore) Pte.
Ltd, 2002. [2] C. J. Date, “An Introduction to Database System”, Ed. 7 th. India: Pearson Education Singapore). Pte.
Ltd, 2002. [3] Craig Larman, “Applying UML And Patterns”, Ed. 2 nd India: Pearson . Education (Singapore) Pte. Ltd, 2002. Website [4] http://www. dbbl.
com. bd/xxxvii A. Description of the Tables Table Name: Employee_Information Description: Stores Information about the Employees. Primary key: Employee_Id Field Name Description Employee_Id Id of the employee. It groups all the employees together.First_Name First part of name of the employee. Middle_Name Middle part of name of the employee.
Last_Name Last part of name of the employee. Designation Designation of the employee in the bank. E_Priority Assigned priority of the employee for leave by the bank. Joining_Date Joining date of the employee in the bank. Phone Employee’s residence telephone number. Mobile Mobile phone number of the employee. E_mail E-mail address of employee to contact through E-mails.
Table Name: Create_User Description: Stores Information of the users that are using the system. Primary key: User_Id Field Name DescriptionUser_Id Id of the user. It groups all the users together. Employee_Id Id of the employee which already exists in the Employee_Information table. User_Type Type of the user (e. g. Employee, System Administrator).
Password Password of the user to login in the system. xxxviii Table Name: Employee_Expertise Description: Stores Expertise of the Employees in each department. Foreign key: Employee_Id Field Name Description Employee_Id Id of the employee which already exists in the Employee_Information table. Cash Expertise of an employee in Cash department. General_Banking Expertise of an employee in General Banking department.Finance_Credit Expertise of an employee in Finance ; Credit department. Foreign_Trade Expertise of an employee in Foreign Trade department.
Table Name: Available_Employee_Expertise Description: Stores Available Expertise of the Employees in each department. Modification of this table depends on the availability of employees. Foreign key: Employee_Id Field Name Description Employee_Id Id of the employee which already exists in the Employee_Information table. Cash Available expertise of an employee in Cash department. General_Banking Available expertise of an employee in General Banking.Finance_Credit Available expertise of an employee in Finance ; Credit. Foreign_Trade Available expertise of an employee in Foreign Trade.
xxxix Table Name: Leave_Information Description: Stores Information about all types of Leave. Primary key: Leave_Id Field Name Description Leave_Id Id of the leave type. It groups all types of leave together. Leave_Name Name of the leave. Min_Days Minimum days at service required by an employee to be eligible for a particular type of leave. Max_Time The maximum number of days that an employee can take leave at a time for a particular type of leave.Priority Priority of the type of leave assigned by the bank.
Table Name: Leave_Request Description: Stores Information about the requested leave. Composite key: Employee_Id, Start_Date Field Name Description Employee_Id Id of the employee which already exists in the Employee_Information table. Leave_Id Id of the leave type which already exists in the Leave_Information table. Start_Date Requested starting date of the leave. End_Date Requested ending date of the leave. Request_Date On which date the leave request was submitted. Status Status of the leave request (e.
g. pending, granted).Narration Added comments regarding the leave request. xl Table Name: Min_Dept_Exp Description: Stores Minimum Expertise required by each department. Primary key: Department_Id Field Name Description Department_Id Id of the department. It groups all the departments together. Department_Name Name of the department.
M_D_Exp Minimum cumulative employee expertise in a department required for smooth operation of that particular department. Table Name: Available_Expertise Description: Stores Available Expertise in each department. Modification of this table depends on the availability of employees.Foreign key: Department_Id Field Name Description Department_Id Id of the department which already exists in the Min_Dept_Exp table. Expertise Available cumulative employee expertise in a department. Table Name: Granted_Leave Description: Stores Information about the granted leave. Composite key: Employee_Id, Start_Date Field Name Description Employee_Id Id of the employee which already exists in the Employee_Information table.
Leave_Id Id of the leave type which already exists in the Leave_Information table. Start_Date Granted starting date of the leave. End_Date Granted ending date of the leave. li Table Name: Recalled_Leave Description: Stores Information about the recalled leave. Composite key: Employee_Id, Recall_Date Field Name Description Employee_Id Id of the employee which already exists in the Employee_Information table. Leave_Id Id of the leave type which already exists in the Leave_Information table. Recall_Date Recall activation date.
xlii B. An example of form’s validation For an example, here I am considering the login page. The users will put their specific User Id and Password to login. Every employee will be given a User Id and password by the System Administrator.The user will be able to change the password by clicking “Change Password”. Fig: Login page I have considered two scenarios for the validations in the login page. These are: 1.
The user may miss spell his/her User Id or Password. 2. The user may keep the Password filed blank. If a user miss spells his/her User Id or Password then an error massage will be shown. Like in the database, there is an employee whose User Id is “u01101042” and Password is “bonny”. The user may try to login with a misspelled User Id “u01101024” or with a misspelled Password “boney”. liii Fig: User misspelled User Id In this situation in the next page s/he will get a massage, “Invalid User Id or Password”.
Fig: Error massage for invalid User Id or Password xliv If the user keeps the Password blank, then in the next page s/he will get a massage, “Password can not be blank”. Fig: User keeps the Password blank Fig: Error massage for blank Passwordxlv C. Context diagram of the system Fig: Context diagramxlvi D. Data flow diagram of the system Fig: Level 0 DFDxlvii E. Use case diagram of the system Fig: Use case diagramxlviii


Federal Reserve Bank of Philadelphia

The article “Examining Corporate Governance Policies,” by Bitner and Dasher (2007) is a magazine article of a reputable magazine called “Commercial Lending Review. ” The purpose of article is to explain the business relations of earning management to the corporate governance and the necessity of corporate governance in order to maintain business’s relationship with the management and the public. This article is very useful source for the report because it explains what the corporate governance is and relates it back to the report questions “relations with business ethics.

” The article is related to the assessment task on corporate governance and its effects to business ethics. Bitner and Dasher (2007, pp 4-5) explains about general understandings of what a “Corporate Governance” is and emphasizes on the importance of corporate governance through explaining the four key steps for a business to conduct good corporate governance practices; organization and operations, financial reporting and risk assessments, internal control and oversight authority.

This information provided by Bitner and Dasher (2007) is very useful whilst writing report because it explains how to overcome corporate failures by providing information to perform “good corporate governance practices” which relates back to our assessment questions “corporate governance and its relations to ethics” The authors of this article “Bitner and Dasher” are both professors of a university and an accountant of a real-estate business.
Not only this source is backed up by references from different texts, it is coming from a professor who mastered in accountings which makes the source reliable. Throughout the article, Bitner and Dasher use references from another source to backup their ideas, for example “according to Anthony M. Santomero, president of the Federal Reserve Bank of Philadelphia. ” These references add to accuracy of this article making it objective to the readers.
Also the source was published on 2007 which is 5-6 years old so the ideas are still relevant to our present understanding. Because of these reliabilities and validities, I do find this article very helpful in assisting in our assessment task. Nevertheless, the article only talks about the Corporate Governance through usage of examples of corporate failures; it does not cover everything on our assessment task question because the question states usage of “focused principles in the ASX corporate Governance Council’s Corporate Governance Principles and Recommendations.
” To answer the assessment questions, we do require several other sources to get understandings of ASX corporate governance principles and recommendations. Overall, because this article touches deeply on our topic of assessment task “Corporate Governance,” I find the source to be appropriate for use in an academic business context and hence be helpful in our assessment tasks based on Corporate Governance. Bitner and Dasher 2007, “Examining Corporate Governance Policies,” Commercial Lending Review, May-June pp. 3-9.


Centurion Bank of Punjab

The objective of this project is to study the CRM of Centurion Bank of Punjab. In the present scenario the monopoly of public sector banks is over and the private players are competing tough to make a position in the market.
In the present scenario all the major Players of International market are making their presence in India. To name a few Barclays, Standard Chartered, ABN AMRO, HSBC. So the main objective is to study the CRM strategy of Centurion of Punjab which in recent past as made its presence by merging two banks Bank of Punjab and Lord Krishna bank is making a presence in the Indian Market.How this bank is competing with both the public sectors bank and Private International players and to know the strategies adopted by this developing private bank. The research methodology will be exploratory in nature and will involve getting a feel of the situation and lays emphasis on the discovery of ideas and possible insights as per the objective of the thesis. http://www. projectguru.
in TABLE OF CONTENTS Abstract Certificate from Guide Thesis Approval Letter Thesis Synopsis Acknowledgement Chapter-1: Introduction About HDFC Bank About Centurion Bank of Punjab The Merger Objective of the Study Research Methodology Data CollectionChapter-2: Literature Review Definition Of CRM Strategy Technology Considerations Why CRM The CRM Value Chain CRM Business Cycle Changing Approach of CRM What is the Customer Life Cycle? Finding the Customer Building Value for the Customer E-Loyalty Advantages of CRM Customer Lifecycle Care Building Blocks Endpoint Key Metrics for Measuring Success Chapter-3: Secondary Research Findings Developments in Banking in Net Age Analysis of Various Banks Strategies for Retail Banking Growth Retail Banking Through Segmentation http://www. projectguru. inSWOT Analysis of Retail Banking Challenges in Banking Sector Chapter-4: Primary Research Findings Chapter-5: Conclusion References http://www. projectguru. in CHAPTER-1 INTRODUCTION ABOUT HDFC BANK Promoted in 1995 by Housing Development Finance Corporation (HDFC), India’s leading housing finance company, HDFC Bank is one of India’s premier banks providing a wide range of financial products and services to its over 11 million customers across over three hundred cities using multiple distribution channels including a pan-India network of branches, ATMs, phone banking, net banking and mobile banking.Within a relatively short p of time, the bank has emerged as a leading player in retail banking, wholesale banking, and treasury operations, its three principal business segments. The bank’s competitive strength clearly lies in the use of technology and the ability to deliver world-class service with rapid response time.

Over the last 13 years, the bank has successfully gained market share in its target customer franchises while maintaining healthy profitability and asset quality.As on December 31, 2007, the Bank had a network of 754 branches and 1,906 ATMs in 327 cities. For the quarter ended December 31, 2007, the bank reported a net profit of Rs. 4. 3 billion, up 45. 2%, over the corresponding quarter of previous year. Total deposits were Rs.
993. 9 billion, up 48. 9% over the corresponding quarter of previous year. Total balance sheet size too grew by 46. 7% to Rs. 1,314. 4 billion.
http://www. projectguru. in ABOUT CENTURION BANK OF PUNJAB Centurion Bank of Punjab is one of the leading new generation private sector banks in India.The bank serves individual consumers, small and medium businesses and large corporations with a full range of financial products and services for investing, lending and advice on financial planning. The bank offers its customers an array of wealth management products such as mutual funds, life and general insurance and has established a leadership ‘position’. The bank is also a strong player in foreign exchange services, personal loans, mortgages and agricultural loans. Additionally the bank offers a full suite of NRI banking products to overseas Indians.
On August 29, 2007, Lord Krishna Bank (LKB) merged with Centurion Bank of Punjab, post obtaining all requisite statutory and regulatory approvals. This merger has further strengthened the geographical reach of the Bank in major towns and cities across the country, especially in the State of Kerala, in addition to its existing dominance in the northern part of the country. Centurion Bank of Punjab now operates on a strong nationwide franchise of 394 branches and 452 ATMs in 180 locations across the country, supported by employee base of over 7,500 employees.In addition to being listed on the major Indian stock exchanges, the Bank’s shares are also listed on the Luxembourg Stock Exchange. THE MERGER The combined entity have a nationwide network of 1,148 branches (the largest amongst private sector Banks) a strong deposit base of around Rs. 1,200 billion and net advances of around Rs. 850 billion.
The balance sheet size of the combined entity is over Rs. 1,500 billion. HDFC Bank was looking for an appropriate merger opportunity that would add scale, geography and experienced staff to its franchise.This opportunity arose and they thought it is an attractive route to supplement HDFC Bank’s organic growth. They believe that Centurion Bank of Punjab would be the right fit in terms of culture, strategic intent and approach to business. These are exciting times for the http://www. projectguru.
in Indian banking industry. The merger has positioned the combined entity to significantly exploit opportunities in a market globally recognized as one of the fastest growing. Over the last few years, Centurion Bank of Punjab has set benchmarks for growth.The bank today has a large nationwide network, an extremely valuable franchise, 7,500 talented employees, and strong leadership positions in the market place. The merger with HDFC Bank will create a world class bank in quality and scale and will set the stage to compete with banks both locally as well on a global level. Fitch expects HBL to maintain its post-merger financials and competitiveness amongst the best banks in India. The merger benefits HBL through the addition of CBP’s branch network, which would add momentum to its increasing market share (currently seventhlargest bank in India in terms of assets).
While CBP’s assets are about a fifth that of HBL’s, the merger would increase the latter’s branch network by 50%. The merger is subject to shareholder and regulatory approvals. CBL’s ratings are expected to be upgraded to that of HBL and then withdrawn as part of the amalgamation. CBP’s profitability is weaker than that of HBL and would slightly dilute the merged entity’s figures. HBL should however be able to gradually leverage on the increased branch network with its superior franchise and stronger product delivery capabilities to improve its existing liability profile and business volumes of CBP and thereby its profitability.Similarly, HBL should also be able to absorb CBP’s unprovided NPLs (INR2. 5bn, equivalent to 17% of HBL’s annualised net income in 9MFY08).
Post-merger, HBL would however continue to have a relatively higher proportion of unsecured consumer loans, while its two wheeler loan portfolio would slightly increase. The asset quality in these segments came under some pressure for the banking system in 2007 when increasing interest rates undermined the borrower’s repayment capacity. HBL’s risk management has so far enabled it to maintain credit losses in line with expectations at the point of origination.HBL is the second-largest private bank in India with a nationwide presence. Strong operations in both retail and corporate banking businesses together with multiple delivery channels across India have supported HBL’s loan growth and its superior http://www. projectguru. in earnings profile.
The gross NPL ratio has remained better than that of most Indian banks and reflects the bank’s strong risk management system. Regular equity infusions have helped maintain the Tier 1 ratio above 8% (end-December 2007: 10. 5%) through periods of rapid growth.CBP incorporates three private banks that merged in 2006 and 2007 – the erstwhile Centurion Bank which turned around following the induction of new shareholders and management in 2003, the erstwhile Bank of Punjab that added a strong retail liability franchise in Punjab and the erstwhile Lord Krishna Bank that helped add the branch network in Kerala. CBP’s loan portfolio consists mainly of two-wheeler, commercial vehicles, residential mortgage, unsecured personal and SME loans. Among Centurion Bank of Punjab’s greatest strengths is the fact that it is a professionally managed bank with a globally experienced and capable management team.OBJECTIVE OF THE STUDY To identify the Customer Relationship Management (CRM) of Centurion Bank of Punjab To study the advantages of Customer Relationship Management in Banking Services RESEARCH METHODOLOGY The project being undertaken was exploratory research.
Where in all these approaches of exploratory researches were used to collect the information on CRM at Centurion Bank of Punjab. http://www. projectguru. in DATA COLLECTION: The base on which a study rests is the information that is embedded in it. The data for this study was obtained as a blend of both Secondary and Primary sources.Secondary Data Already published data formed the starting point for the study. This included:Website of various CRM Solution Providers India Official Reports on Centurion Bank of Punjab Books on CRM and related topics.
Primary Data Data was collected specifically for the research needs at hand. The sources included: ? Interviews of Officials of Centurion Bank of Punjab at New Delhi: ? Questionnaires: A structured questionnaire was prepared. This was than presented and got filled from the concerned people at Centurion Bank of Punjab. The information gathered has been tabulated and presented in the final report. http://www. rojectguru. in


Tesco Bank Marketing

The research draws attention to the fact that the current product life cycle of Tesco Bank is in the Maturity stage. And now Tesco Bank is a question mark according to Boston’s Matrix. The target market of Tesco Bank includes Tesco Clubcard holders, families with children, pet and car. By Geographic segmentation, Brislington in the North East, Coventry in the Midlands and Blackpool in the North West are its target market. By Demographic segmentation, the age should be targeted from 18 to 50 and over 50s. By Behavioural segmentation, its loyal customers are targeted.
Further investigations reveal that the Tesco Clubcard Credit Card’s position in the market is not enough good and the repositioning makes this product become more competitive in the market. The main price strategy is competition-based pricing. A new Good-value pricing strategy is made for the repositioning product. Moreover, an A3 size poster for Tesco Clubcard Credit Card is designed for advertisement. It is recommended: ? The future market strategy of Tesco Bank should focus on strengthening its customer base and service improvement. Innovation of products is important. * Tesco supermarkets are good platforms for Tesco Bank to advertise itself. TASK 1 AREA OF STUDY Tesco Bank is a subsidiary company of Tesco (the UK’s largest supermarket) in the UK. This bank was ever named Tesco Personal Finance. Initially, Tesco Personal Finance (TPF) was a joint venture business between Tesco and the Royal Bank of Scotland (RBS) (Datamonitor, 2011). Then, Tesco took full control of Tesco Personal Finance, by an agreement with RBS to buy its 50% shareholding in TPF in 2008 (Sky News, 2008).

TPF was renamed Tesco Bank in 2009 and it was a signal that Tesco would like to join into the high street banking sector (The Telegraph, 2009). Tesco Bank has continuously made good progress in 2011. For example, savings, the number of credit cards and insurance sales have strongly increased (Tesco plc website, 2012). As a new entrant with great brand awareness that was untainted by the banking crisis, Tesco Bank has great potential to boost sales in the UK because the current customer dissatisfaction with banks is serious in the UK (MarketWatch, 2009).
However, it is necessary to focus on this area for improvement because the infrastructure of Tesco bank is not enough and it should have a better market strategy to attract more customers as a new entrant. TASK 2 PLC STAGE Kotler and Armstrong (2012) define product life cycle (PLC) as a development trajectory of a product based on its sales and profits over its lifetime. The five distinct stages (product development stage, introduction stage, growth stage, maturity stage and decline stage) of PLC describe how products and markets work.
The Figure 2 shows the sales and profits of Tesco Bank from 2002 to 2010 (See Appendix 1). It is hard to analyze the trend of sales from 2009 to 2011. The sales fluctuated during this period. The profit increased rapidly from 2002 to 2005, then declined gradually due to the possible reasons of the bad global economy situation and the financial crisis. After Tesco Bank was entirely owned by Tesco, the profit boosted remarkably again such as the growth rate was 65. 625% in 2009 and the average growth rate of profit from 2008 to 2011 was 29. 72%. However, the growth rate declined year by year.
Based on the evidence above, it can be inferred that Tesco Bank is now at the maturity stage. According to the trend of profit, the product achieved acceptance by customers for a period of time, then the big change in 2008 led to rejuvenation of its business. At the same time, the sales growth was slowdown but it seems to increase in the future. These points match to the characteristics of maturity stage (Kotler and Armstrong, 2012). Boston’s Matrix is a chart to evaluate a company’s market strategy and situation according to its relative market share and market growth rate (Kotler and Armstrong, 2012).
It can be described as Figure 3. The market growth rate of Tesco Bank was high in recent years but the relative market share is still low based on the data above. Pettinger (2011) states that Tesco Bank is a smaller bank in the UK which ranks 10th of 10 Largest UK Retail Banks. Question marks means a company has relative low market share and high market growth rate (Kotler and Armstrong, 2012). Thus, now Tesco Bank should be a question mark. It is time to think about the future direction of Tesco Bank.
Datamonitor (2010) reveals that the current consumer dissatisfaction with banks is a good chance for Tesco Bank to gain market share by the similar way Tesco is successful in the grocery sector. Tesco Bank announced it has targeted to win 10% market share of the UK’s financial services market in the future (Halime, 2010). It seems that Tesco Bank is expected to be a star in future years. TASK 3 TARGET MARKET Target market is defined as a set of customers who have common needs or characteristics that companies would like to give service to (Kotler and Armstrong, 2012).
Now All Tesco Bank’ products have a common characteristic that every product purchased can get points and discount with a Tesco Clubcard. This is not only a fantastic way to attract customers, but also all Tesco customers who have a Clubcard have been targeted. Tesco states that the most loyal shoppers (15 million Tesco Club card holders) are initially targeted by Tesco Bank (Aldrick, 2009). Credit cards and loans are only available to UK residents and over 18s. All Tesco Bank’s products such as home insurance, pet insurance, travel money and credit card are relative to the needs of families and daily life. Geographic segmentation
This segmentation divides market into several geographical areas. Tesco planned to open Tesco Bank branches in 30 of its stores in the UK in 2009 and branches would open in Brislington in the North East, Coventry in the Midlands and Blackpool in the North West (Clews, 2009) Demographic segmentation This segmentation divides market into segments such as age, family, income, occupation, religion and nationality. According to bank’s insurance classification (car, home, pet, travel, life, over 50s, health, dental, breakdown), credit cards and loans condition, the age should be targeted from 18 to 50 and over 50s.
Tesco Bank also has child trust fund, Tesco Baby & Toddler club and Tesco Child Health Plan, so the target of family life cycle should be families with children, pets and cars. Behavioural segmentation This segmentation divides market into segments such as knowledge, attitudes, uses, or responses. As Tesco Bank’s products can all be linked to its Tesco Clubcard, loyalty status should be strong in this case. Consumers are loyal to Tesco brand for its great brand awareness. On the other hand, the Clubcard enhances the loyalty of consumers with its benefits. TASK 4 PRODUCT REPOSITIONING
Product positioning means products are considered by consumers when purchase, consumers will identify the products compared with competing products (Kotler and Armstrong, 2012). This assignment will choose Tesco Bank’s Clubcard credit card as main product compare with its competitors by perceptual map, then reposition this credit card to a more competitive position. The Figure 4 shows a positioning map for four types of credit cards from Tesco Bank, Sainsbury’s Bank, Halifax and HSBC on two dimensions: months of balance transfers for 0% and months of purchase for 0% (See Appendix 2) (Tescocompare, 2012).
Thus, customers’ view of Tesco Clubcard Credit Card is very different from others. Its 15 months of purchase for 0% is significantly more than others, but the months of balance transfers are the least of all cards. The main advantage of Tesco Clubcard Credit Card is that customers have a very long length of time for 0% interest rate credit so that the fewer months of balance transfers for 0% is acceptable. By contrast, the credit cards of Sainsbury’s, Halifax and HSBC focus on the months of balance transfers for 0%, but there is a transaction fee when customers transfer the debts.
However, Tesco Clubcard Credit Card has the lowest fee (2. 9% fee) compared with others (Sainsbury’s 3% fee, Halifax 3% fee, and HSBC 3. 3% fee) (See Appendix 2). In order to reposition Tesco Clubcard Credit Card to a more competitive position, it is better to extend the months of balance transfers for 0% as the figure 5 shows. Now Tesco Clubcard Credit Card is more attractive to customers. Beside its advantage of purchase, its balance transfers aspect is no longer weak compared with others. Tesco Bank may generate fewer profits from this product due to its long period of time for zero interest rate and less transaction fee.
However, this change will attract more customers to enhance its customer base in the short-term. The strong customer base will increase total consumption and is good for entire business performance in the long-term. TASK 5 PRICING STRATEGIES Pricing strategy is that a company sets a right price strategy in order to generate profits and be successful in the market. The main pricing strategies are customer value-based pricing, cost-based pricing and competition-based pricing (Kotler and Armstrong, 2012).
Competition-based pricing means the price is set based on competitors’ pricing strategies, cost, and marketing offering (Kotler and Armstrong, 2012). The main pricing strategy of Tesco Bank is competition-based pricing. Because most of the retail banks offer the similar products such as loans, credit cards, savings and insurance, Tesco Bank set a more competitive price to attract customers according to its Tescocompare. com system (a system compare Tesco Bank’s products with other banks’ products). For example, the interest rate of loans and credit cards is second lowest of all the similar products (See Appendix 2 and 3).
The reason may be that Tesco Bank is a new entrant and faces numerous experienced competitors setting slightly high prices relative to the value they deliver, charging a relative low price would be better for Tesco Bank to attract customers and gain more market share. In addition, Tesco Bank also uses discount pricing and promotional pricing. For example, new customers could save up to 20% with a Clubcard when they buy car insurance online. New customers with a Clubcard who quote and buy a Tesco Bank Pet Insurance policy directly from Tesco Bank between 12 April and 22 May 2012 can get a free ? 0 Tesco Gift Card (Tesco Bank website, 2012). New pricing strategies for repositioned product As the Tesco Clubcard Credit Card has repositioned, it has more competitive advantages. Then this assignment will develop a good-value pricing strategy for Tesco Clubcard Credit Card. Good-value pricing strategy means a company provides a combo of good quality and service at a reasonable price (Kotler and Armstrong, 2012). Cooperation with other retailers or restaurants in the UK to offer some benefits is a good idea to use this strategy.
For example, Tesco Bank can cooperate with Zara that every purchase in Zara by only using Tesco Clubcard Credit Card can get 5% discount. Thus, more people would like to use this credit card so that it would strengthen Tesco Bank’s customer base. On the other hand, Zara’s sales might increase because of the discount. In addition, customers get benefits. TASK 6 POSTER DESIGN FOR ADVERTISING CAMPAIGN It is a poster for advertising Tesco Clubcard Credit Card of Tesco Bank (See the A3 poster). In the white area, the credit card image and a red circle with words are striking.
Customers can know what the product is at the first sight. “1 card, 3 great benefits” tell customers this credit card is outstanding because this card has 3 great benefit for customers if they use this card. These show the main part of poster that creates a general impression to customers and attracts them. The first three lines of words in the blue area are the details of the three great benefits. “0% on all purchases for 15 months” and “0% on balance transfers for 15 months” reflect its competition-based pricing strategy because this set of interest has an advantage compared with other products when customers make a decision. Balance transfers for 15 months” shows the repositioning feature discussed above. It makes this card be more attractive to customers. “Every little helps” is the slogan of Tesco enhancing the Tesco Brand. “Over 18s, UK residents” shows the segments which this product is available for, reflecting its target market as well. The collecting points also reflect the Tesco Clubcard customers are included in its target segment. “Ask at the customer service desk for more details” is guidance for further steps if customers want to know more. CONCLUSION AND RECOMMENDATION Tesco Bank has already done well as a new entrant into bank industry.
However, it still has some space for improvement according to the analysis above. It has the potential to boost sales in the future due to its particular advantages such as little influence by financial crisis and strong brand awareness. The low price advantage is also easy for Tesco Bank to attract customers. If Tesco Bank continues to adjust its market strategy in the future, it could reach the top of UK banks. The future market strategy of Tesco Bank should focus on strengthening its customer base and service improvement. Service quality is an important factor to determine customer satisfaction (Maddern, H et al, 2007).
Innovation of products is important. If the product has an available special characteristic, bank would have more power to generate profits and set slight high price. Tesco supermarkets are good platforms for Tesco Bank to advertise itself, and take full advantage of them. Appendix Appendix 1: Source: Tesco Annual Report from 2002 to 2011 Appendix 2: Source: http://tesco. lovemoney. com/creditcards Appendix 3: Source: http://www. tescocompare. com/loans. shtml Bibliography Aldrick, P (2009). Tesco moves closer to full banking. The Telegraph. [Online] Available from: http://www. telegraph. co. k/finance/newsbysector/banksandfinance/6617485/Tesco-moves-closer-to-full-banking-with-IT-system. html. (Accessed 13 April 2012) Bell, S (2010). UK’s Tesco Offers 0% Interest Rate For 13 Months On Clubcard Credit Card. CardLine; Vol. 10 Issue 31, p10-10, 1p. Clews, M (2009). Tesco to open bank branches in 30 stores. Marketing Week (01419285); 3/26/2009, Vol. 32 Issue 13, p44-44, 1p. Datamonitor (2010). Tesco Bank set to play with the big boys and be a top 10 bank. [Online] Available from: http://about. datamonitor. com/media/archives/3705. (accessed 13 April 2012) Datamonitor (2011). Tesco PLC company profile. Online] Available from: http://www. datamonitor. com/. (Accessed 13 April 2012) Halime, F (2010). Tesco Bank eyes 10% of UK market share. Retail Bank International. [Online] Available from: http://www. vrl-financial-news. com/retail-banking/retail-banker-intl/issues/rbi-2010/rbi-629/tesco-bank-eyes-10-of-uk-mark. aspx. (Accessed 13 April 2012) Kotler, P;amp; Armstrong, G (2012). Principles of Marketing (14th ed. ). Pearson Education. p 66-67, 224-230, 231-232, 297-303, 315-324. Maddern, H et al (2007). Customer satisfaction and service quality in UK financial services. International Journal of Operations ;amp; Production Management. Vol. 7 Issue 9, p998-1019, 22p. MarketWatch (2009). Industry Comment: Tesco: becoming the Tesco of financial services. Vol. 8 Issue 4, p5-5, 2/3p. MarketWatch (2009). Tesco: renaming of banking division heralds a renewed attack on Britain’s players. Vol. 8 Issue 11, p11-12, 2p. Pettinger, T (2011). Top 10 British Banks. Economicshelp. [Online] Available from: http://www. economicshelp. org. (Accessed 14 April 2012) Sky News (2008). Tesco Pays ? 950m To Become Bank. [Online] Available from: http://news. sky. com/home/business/article/15058484. (Accessed 14 April 2012) The Telegraph (2009). Tesco Bank to offer current accounts and mortgages. Online] Available from: http://www. telegraph. co. uk/finance/personalfinance/consumertips/banking/6266043/Tesco-Bank-to-offer-current-accounts-and-mortgages. html. (Accessed 14 April 2012) Tesco plc website (2012). Annual reports. Investors. [Online] Available from: http://www. tescoplc. com/index. asp? pageid=166. (Accessed 13 April 2012) Tescocompare (2012). Credit Cards. Money. [Online] Available from: http://tesco. lovemoney. com/creditcards. (Accessed 15 April 2012) Tesco Bank website (2012). Insurance. [Online] Available from: http://www. tescobank. com/personal/finance/home. html. (Accessed 15 April 2012)