This document analyzes the marketing effectiveness of merchant banking services between public and private sectors in India. It compares two public sector banks, SBI Capital Markets and Industrial Securities and Finance Company, to two private sector banks, DSP Merrill Lynch and Kotak Mahindra Capital, based on their marketing mix strategies. The analysis shows that while the public sector banks have slightly higher overall marketing effectiveness, the private sector banks have a higher marketing efficiency, with people and product being the most important elements of their marketing mix. The study concludes there is relevance to applying marketing mix concepts in merchant banking and competition in the sector has increased with its growth.

1. PRESENTATION
ON
T HARI KUMAR
ROLL NO: 131449

2.  MERCHANT BANKING is defined as…
“an institution which covers a wide range of activities such
as management of customer services, portfolio
management, credit syndication, acceptance credit,
counselling, insurance etc.”

3.  Need for merchant banking was felt with rapid growth in
number & size of issues made in primary market.
 Merchant banking services were started by foreign
banks, during in 1967 & in 1970 .
 Merchant banking services were offered along with other
traditional banking services.
 SBI was first Indian bank to set up Merchant banking
division in 1972.

4. MERCHANT BANK INVESTMENT BANK
Expand into the field of
Securities underwriting.
Participate in Trade Financing
activities.
Focus on Small Scale
Companies and offer Creative
Equity Financing.
Focus on IPO’s (Initial Public
Offerings), and Large Public
and Private Share Offerings.
Provide service to Small and
Medium Institutes.
Provide service to Larger
Institutes

5. Sr No Particulars Summary
1 Corporate Counseling Covers the entire field of merchant
banking, Ltd to giving suggestions
2 Project Counseling Preparing project report for govt.
approval , financial assistance
3 Loan Syndication Assistance rendered to get term loan for
project, help client make appraisal,
designing capital structure
4 Issue Management Marketing corporate securities,
intermediary in transfer of capital from
one who owns to needy

6. 5 Underwriting Guarantee given by the underwriter, make raising
of external resource easy
6 Managers to Issue Drafting, completion of formalities, appoint
Registrar
7 Portfolio Management Investment in different kind of securities
8 Mergers and takeovers Middlemen in setting negotiation
9 Off Shore Finance Help in areas involving foreign currency
10 Non- Resident
Investment
Provide help in better and smooth trade to NRIs

7. ARTICLE DETAILS
TOPIC :- Marketing effectiveness in merchant
banking services - a comparative study of public
and private sector.
AUTHOR :- Alka Sharma
SOURCE :- Journal of Services Research, Volume 2,
Number 2 (October ‘02-March, 2003)
© 2002 by Institute for International Management and Technology.

8. A number of developments took place in the financial
markets, which increased the importance of financial
intermediaries and also opened up the opportunity for
growth and development of various financial services. As a
result, there has been a qualitative shift in the financial
services being provided.

9. The main objective of the study was to analyze the
relevance of marketing mix in the merchant banking
services and also make a comparative analysis of its
effectiveness in public as well as in the private sector
merchant banks.

10.  To conduct this comparison between private & public four
organizations. They choose two firms from the public and private
sector.
SBI Capital Markets Ltd.
Industrial Securities and Finance Company Ltd.
DSP – Merrill Lynch & Kotak Mahindra Capital
 The primary data was collected by conducting the interviews of
the managers.
 The secondary data was collected from the annual reports, articles
in magazines and newspapers as they featured contemporary
trends and developments.

11. For analyzing the marketing mix, five elements were studied to
reach at conclusions.
Elements of Marketing Mix Attribute Weight Co - Efficient
Product 0.3
Price 0.2
Place 0
Promotion 0.1
People 0.4

12. Comparison of organizations under each element (P’s)
Comparison on the Basis of
Product
Comparison on the Basis
of Price
Elements of Marketing Mix
Attribute Weight Co -
Efficient
Elements of Marketing
Mix
Attribute Weight Co -
Efficient
SBICAP 0.5 SBICAP 0.33
I – Sec 0 I – Sec 0
DSP – ML 0.33 DSP – ML 0.33
KMCC 0.17 KMCC 0.33
Comparison on the Basis of
Comparison on the Basis
Place
of Promotion
Name of the Organisation
Attribute Weight Co -
Efficient
Name of the
Organisation
Attribute Weight Co –
Efficient
SBICAP 0.33 SBICAP 0.33
I – Sec 0 I – Sec 0.17
DSP – ML 0.33 DSP – ML 0.17
KMCC 0.33 KMCC 0.33
Comparison on the Basis of People
Name of the Organization Attribute Weight Co – Efficient
SBICAP 0.33
I – Sec 0
DSP – ML 0.33
KMCC 0.33

13. PRODUCT PRICE PLACE PROMOTION PEOPLE TOTAL
ATT. WGT.
EFFI 0.3 0.2 0 0.1 0.4 1
SBI CAP 0.5 0.33 0.33 0.33 0.33
WEIGHT 0.15 0.07 0 0.03 0.13 0.38
I-SEC 0 0 0 0.17 0
WEIGHT 0 0 0 0.02 0 0.02
DSP-ML 0.33 0.33 0.33 0.17 0.33
WEIGHT 0.1 0.07 0 0.02 0.13 0.32
KMCC 0.17 0.33 0.33 0.33 0.33
WEIGHT 0.05 0.07 0 0.03 0.13 0.28

14. INTERPRETATION
From the values calculated above, it can be inferred that since the
calculated value ‘F’ for the public sector merchant banks is higher than the
tabled value therefore, the hypothesis that there is no significant difference
in the marketing efficiency of public and private sector merchant banks is
rejected. However, the ‘F’ value for private sector at 0.2 reflects that the
marketing efficiency of private sector is higher than the public sector.

15.  It was found in the study that there is the presence of
relevancy in the concept of Marketing Mix in this financial
institutions.
 With the growth and development of merchant banking
services in the changed scenario, fierce competition has
emerged in the sector.
 The research indicates that the people element is the most
important component of marketing mix, followed by
product, price and promotion respectively.