Submitted in partial fulfillment of the requirement of Bachelors of Business Administration (BBA) Guru Jambheshwar University of Science & Technology, Hisar
Training Supervisor: Submitted By: Mr. Amit Sharma Monika Singh Territory Manager Enroll No. 10511242064
SESSION 2010 2013
GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR Pincode - 125001 2
EXECUTIVE SUMMARY
Share trading in India is undergoing a transition and consolidation phase witnessed never before. The competition is likely to become so severe after the entry of many players, retaining a customer is most difficult practice for any service provider. Though India has a very big untapped market but the players will not flourish unless they change the way the customers are being served. Given the awareness level of todays customer, every player has to treat with care and make the customer feel that he is the king. Number of Online share trader in India has crossed the line. More and more customers are coming under this umbrella and many of the existing one are changing pavilion. So customer satisfaction & their retention is now more important as it was never before. Players keep coming with new schemes in order to attract new customers and retain the existing one. This is being supplemented with increased advertising and brand building efforts. Success of any organization depends upon its being proactive. An often Quoted marketing adage is to manage a business well is to manage its future and to manage its future is to manage information. I am very lucky as I got an opportunity to work with Sharekhan, which is showing phenomenal growth and success in the Securities. In order to complete this project I made an effort to do a depth study and analysis of various known and unknown reasons for customer satisfaction towards online trading. I made a set questions and asked the same from those who do online trading At last in this project I compiled results under the findings heading also gave some recommendations to the company on the basis of results.
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ACKNOWLEDGEMENT
I take this opportunity to thank Sharekhan Limited for giving me a chance to work for this project and I would like to express my sincere thanks to Mr. Amit Sharma (Territory Manager) and his team who helped, inspired and mentored me and without their help this project report would not have taken its current shape. Under their brilliant untiring guidance I could complete the project being undertaken on the Customer satisfaction towards online trading successfully in time. Their meticulous attention and invaluable suggestions have helped me in simplifying the problem involved in the work. I would also like to thank the overwhelming support of my family and friends who supported me at every step with their blessings and guidance
Monika Singh 10511242064
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TABLE OF CONTENTS
CHAPTERS PAGE NO.
Chapter 1 - Introduction 1.1. Overview of Industry as a whole 6 - 16 1.2. Profile of the Organization 17 - 29 Origin Recent Achievements Mission & Vision Products Organization Structure 1.3 Introduction to the Topic 30 - 37
Chapter 2 - Objective & Methodology 2.1. Objectives of the Study 38 2.2. Research Methodology 38 - 41 Research Design Sources of data Sampling Technique Sample size Methods of data collection Tools and techniques of analysis 2.3. Limitations of the Study 41
Do you know that the world's foremost marketplace New York Stock Exchange (NYSE), started its trading under a tree (now known as 68 Wall Street) over 200 years ago? Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to as far as 125 years when it started as a voluntary non-profit making association. You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are important. Stocks of public limited companies are bought and sold at a stock exchange. But what really are stock exchanges? Known also as News on the stock market appears in different media every day. he stock market or bourse, a stock exchange is an organized marketplace for securities (like stocks, bonds, options) featured by the centralization of supply and demand for the transaction of orders by member brokers, for institutional and individual investors. The exchange makes buying and selling easy. For example, you don't have to actually go to a stock exchange, say, BSE - you can contact a broker, who does business with the BSE, and he or she will buy or sell your stock on your behalf. All stock exchanges perform similar functions with respect to the listing, trading, and clearing of securities, differing only in their administrative machinery for handling these functions. Most stock exchanges are auction markets, in which prices are determined by competitive bidding. Trading may occur on a continuous auction basis, may involve brokers buying from and selling to dealers in certain types of stock, or it may be conducted through specialists dealing in a particular stock. But where did it all start? The need for stock exchanges developed out of early trading activities in agricultural and other commodities. During the middle Ages, traders found it easier to use credit that required supporting documentation of drafts, notes and bills of exchange. The history of the earliest stock exchange, the French stock exchange, may be traced back to 12th century when transactions occurred in commercial bills of exchange. 7
The first stock exchange in India, Bombay Stock Exchange was established in 1875 as 'The Native Share and Stockbrokers Association' and has evolved over the years into its present status as the premier stock exchange in the country. It may be noted that BSE is the oldest stock exchange in Asia, even older than the Tokyo Stock Exchange, which was founded in 1878. The country's second stock exchange was established in Ahmadabad in 1894, followed by the Calcutta Stock Exchange (CSE). CSE can also trace its origin back to 19th century. From a get together under a 'Neem Tree' way back in the 1830s, the CSE was formally established in May 1908. India's other major stock exchange National Stock Exchange (NSE), promoted by leading financial institutions, and was established in April 1993. Over the years, several stock exchanges have been established in the major cities of India. There are now 23 recognized stock exchanges Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmadabad, Bangalore, Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur, Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara, Indore and Meerut. Today, most of the global stock exchanges have become highly efficient, computerized organizations. Computerized networks also made it possible to connect to each other and have fostered the growth of an open, global securities market. Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them, brokers have taken their trading rooms to the Internet. Known as online brokers, they allow you to buy and sell shares via Internet. In general, the financial market divided into two parts, Money market and capital market. Securities market is an important, organized capital market where transaction of capital is facilitated by means of direct financing using securities as a commodity.
Securities market can be divided into a primary market and secondary market.
A) PRIMARY MARKET The primary market is an intermittent and discrete market where the initially listed shares are traded first time, changing hands from the listed company to the investors. It refers to the process through which the companies, the issuers of stocks, acquire capital by 8
offering their stocks to investors who supply the capital. In other words primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is called an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus.
B) SECONDARY MARKET The secondary market is an on-going market, which is equipped and organized with a place, facilities and other resources required for trading securities after their initial offering. It refers to a specific place where securities transaction among many and unspecified persons is carried out through intermediation of the securities firms, i.e., a licensed broker, and the exchanges, a specialized trading organization, in accordance with the rules and regulations established by the exchanges.
A bit about history of stock exchange they say it was under a tree that it all started in 1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National Stock Exchange (NSE) started operations in 1994.NSE was floated by major banks and financial institutions. It came as a result of Harshad Mehta scam of 1992. Contrary to popular belief the scam was more of a banking scam than a stock market scam. The old methods of trading in BSE were people assembling on what is called a ring in the BSE building. They had a unique sign language to communicate apart from all the shouting. Investors weren't allowed access and the system was opaque and misused by brokers. The shares were in physical form and prone to duplication and fraud. NSE was the first to introduce electronic screen based trading. BSE was forced to follow suit. The present day trading platform is transparent and gives investors prices on a real time basis. With the introduction of depository and mandatory dematerialization of shares chances of fraud reduced further. The trading screen gives you top 5 buy and sell quotes 9
on every scrip. A typical trading day starts at 9.15 ending at 3.30. Monday to Friday. BSE has 30 stocks which make up the Sensex .NSE has 50 stocks in its index called Nifty. FII s Banks, financial institutions mutual funds are biggest players in the market. Then there are the retail investors and speculators. The last ones are the ones who follow the market morning to evening; Market can be very addictive like blogging though stakes are higher in the former.
Shares in the Share Market are either traded through:
a) Stock Exchange these are organized market places where stocks, bonds are other equivalents are traded between the buyers and sellers where exchange acts as counter-party to both the participants in case of any default.
b) Over-the -Counter (OTC) these are not centralized exchanges and the trade takes place through a network of dealers.
Constituents of Share Market are:- a) Buyer: An investor who buys a script in the belief that the market will rise. If his hinge becomes right then he makes profit otherwise he suffers loss.
b) Seller: Seller of a stock sells in the hope that the stock price will go down.
c) Stock Broker: Brokers are persons or firms who execute buy/sell order on behalf of the investors and charge a commission for rendering the service.
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Share Broking Company offers two types of share trading facilities.
a) Offline Share Trading In this form of trading the customer has to place order to the dealer of the stock broking firm either in person or over phone.
b) Online Share Trading The client could place his order on his own from any place he wants, provided he has a computer with an Internet connection.
There are mainly two types of trading:-
1. Intraday: They buy and sell stocks during the same day.
Intraday Traders are of two types: a. Scalp Traders: Investors who perform many trades per day for scalping out small profits out of the bid-ask spread from each trade is known as scalp traders. b. Momentum Traders: Investors who pounce on those stocks which move significantly in one direction and book desired profit are called momentum traders. They do this within a day.
2. Delivery trading: - The investor buys the share for holding purposes.
Delivery Traders are: a. Technical Traders: They believe that buying/selling signals are present within the graphs and charts of the stock. b. Fundamental Traders: They perform trade on the basis of study of fact-sheets of the company like historical profit graph, balance sheet, anticipated earning reports, stock- splits, mergers and acquisitions, etc
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STOCK MARKETS IN INDIA: Stock exchanges are the perfect type of market for securities whether of government and semi-government bodies or other public bodies as also for shares and debentures issued by the joint-stock companies. In the stock market, purchases and sales of shares are affected in conditions of free competition. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand.
DEFINITION OF A STOCK EXCHANGE: Stock exchange means anybody or individuals whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. The securities include: Shares of public company. Government securities. Bonds
HISTORY OF STOCK EXCHANGES: The only stock exchanges operating in the 19 th century were those of Mumbai setup in 1875 and Ahmadabad set up in 1894. These were organized as voluntary non- profit-marking associations of brokers to regulate and protect their interests. Before the control on securities under the constitution in 1950, it was a state subject and the Bombay securities contracts (control) act of 1925 used to regulate trading insecurities. 12
Under this act, the Mumbai stock exchange was recognized in 1927 and Ahmadabad in 1937. During the war boom, a number of stock exchanges were organized. Soon after it became a central subject, central legislation was proposed and a committee headed by A.D. Gorwala went into the bill for securities regulation. On the basis of the committees recommendations and public discussion, the securities contract (regulation) act became law in 1956.
Functions of Stock Exchanges: Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed companies, they help trading and raise funds from the market. Over the hundred and twenty years during which the stock exchanges have existed in this country and through their medium, the central and state government have raised crores of rupees by floating public loans. Municipal corporations, trust and local bodies have obtained from the public their financial requirements, and industry, trade and commerce-the backbone of the countrys economy-have secured capital of crores or rupees through the issue of stocks, shares and debentures for financing their day-to-day activities, organizing new ventures and completing projects of expansion, diversification and modernization. By obtaining the listing and trading facilities, public investment is increased and companies were able to raise more funds. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes.
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VARIOUS STOCK EXCHANGES IN INDIA
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OUT OF THESE MAJOR STOCK EXCHANGES ARE:
NSE (National Stock Exchange)
In the fast growing Indian financial market, there are 23 stock exchanges trading securities. The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members. The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India. However, in the totally de-metalized Exchange, the ownership as well as the management does not have a right to trade on the Exchange. Only qualified traders can be involved in the securities trading. The NSE is one of the few exchanges in the world trading all types of securities on a single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a significant growth throughout a few years of their launch. While the WDM segment has accumulated the annual growth of over 36% since its opening in 1994, the CM segment has increased by even 61% during the same period. The National Stock Exchange of India has stringent requirements and criteria for the companies listed on the Exchange. Minimum capital requirements, project appraisal, and company's track record are just a few of the criteria. In addition, listed companies pay variable listing fees based on their corporate capital size. The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic trading platform that is operated through a VSAT network. Unlike most world exchanges, the NSE uses the satellite communication system that connects traders from 345 Indian cities.
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BSE (Bombay Stock Exchange)
The Stock Exchange, Mumbai, popularly known as BSE was established in 1875 as The Native Share and Stock Brokers Association. It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into Stock demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country to have obtained permanent recognition in 1956 from the government of India under the Securities Contracts (Regulation) act 1956. The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmes and making available to them necessary informative inputs.
REGULATORY FRAME WORK OF STOCK EXCHANGE
A comprehensive legal framework was provided by the Securities contract Regulation Act, 1956 and Securities Exchange Board of India 1952. Three tier regulatory structure comprising: Ministry of finance The Securities And Exchange Board of India Governing body
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SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
The securities and exchange board of India was constituted in 1988 under a resolution of government of India. It was later made statutory body by the SEBI act 1992. According to this act, the SEBI shall constitute of a chairman and four other members appointed by the central government. With the coming into effect to the securities and Exchange board of India act, 1992 some of the powers and functions exercised by the central government, in respect of the regulation of stock exchange were transferred to the SEBI.
OBJECTIVES AND FUNCTIONS OF SEBI
To protect the interest of investors in securities. Regulating the business in stock exchanges and any other securities market. Registering and regulating the working of intermediaries associated with securities market as well as working of mutual funds. Promoting and regulating self-regulatory organizations. Prohibiting insider trading in securities. Regulating substantial acquisition of shares and take over of companies. Performing such functions and exercising such powers under the provisions of capital issues (control) act, 1947 and the securities to it by the central government.
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1.2 PROFILE OF THE ORGANISATION ORIGIN OF THE COMPANY
Sharekhan Ltd. is one of the leading retail stock broking house of SSKI Group which is running successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc.
The firms online trading and investment site - www.sharekhan.com was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over one lakh customers.
The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks.
On April 17, 2002 Sharekhan launched Trade Tiger, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. Sharekhans ground network includes over 816 centers in 366 cities in India, of which are fully-owned branches. Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun 18
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, VeriSign Financial Technologies India Ltd, Spider Software Pvt Ltd. To build its trading engine and content.
With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKIs institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organizations revenue, with a daily turnover of over US$ 2 million. The Corporate Finance section has a list of very prestigious clients and has many firsts to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shoppers Stop.
About SSKI group SSKI group also comprises institutional broking and corporate Finance. While the institutional broking division caters to the largest domestic and foreign institutional investors, telecom and media. SSKI holds a sizeable portion of the market in each of these segments. As the forerunner of investment research in the Indian market, they provide the best research coverage amongst broking houses in India. Their research team is rated as one of the best in the country. Voted four times as the Top Domestic Brokerage House by Asia-money Survey. SSKI is consistently ranked amongst the top domestic brokerage houses in India.
Broking If anyone prefers the assurance and reliability of trading through a broker, one can use their network of 250 branches and 157 business partner outlets in over 123 cities to trade 19
in equities as well as derivatives. They will help with the investment process, will give advice based on extensive research and provide with relevant and updated information to help a person to make informed investment decisions.
Their trading services are designed to offer an easy, hassle free trading experience, whether a person trade daily or occasionally. One will be entitled to a host of value- added services, intended to assist them in their investment process depending of their investing style and frequency.
Freedom @ www.sharekhan.com however, if one prefer the convenience of trading from wherever a person is, one can get a Classic trading account and enjoy the freedom that comes with it. One can place orders even after the trading hours, and the orders are queued up to be executed as soon as the market opens. Sharekhan.com the winner of several prestigious awards has been the most preferred destination for online trading ever since its launch.
RECENT ACHIEVEMENTS OF SHAREKHAN Rated among the top 20 wired companies along with Reliance, HUJl, Infosys, etc byBusiness Today, January 2011 edition. Awarded Top Domestic Brokerage House four times by Euro money and Asia money. Pioneers of online trading in India amongst the top 3 online trading websites from India. Most preferred financial destination amongst online broking customers. Winners of Best Financial Website award. Voted by CNBC Awaaz as the Most Preferred Stock broker in India in 2005.
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MISSION & VISION Mission: To educate and empower the individual investor to make better investment decisions through quality advice and superior service.
Vision: To be the best retail brokering Brand in the retail business of stock market.
REASON TO CHOOSE SHAREKHAN LIMITED
Experience: SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money brokers poll held recently, SSKI won the Indians Best Broking House for 2004 award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutional-level research and broking services to individual investors.
Technology: with its online trading account one can buy and sell shares in an instant from any PC with an internet connection. One can get access to its powerful online trading tools that will help him to take complete control over his investment in shares.
Accessibility: Share khan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for investors. These services are accessible through its centers across the country over the internet (through the website www.sharekhan.com) as well as over the Voice Tool.
Knowledge: in a business where the right information at the right time can translate into direct profits, one can get access to a wide range of information of Sharekhan limiteds content-rich portal. One can also get a useful set of knowledge-based tools that will empower him to take informed decisions.
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Convenience: one can call its Dial-N-Trade number to get investment advice and execute his transactions. Sharekhan ltd. has a dedicated call-centre to provide this service via a Toll Free Number 1800-22-7500 & 1800-22-7050 from anywhere in India.
Customer Service: Sharekhan limiteds customer service team will assist one for any help that one may require relating to transactions, billing, Demat and other queries. Its customer service can be contacted via a toll free number, e-mail or live chat on www.sharekhan.com.
Investment advice: Sharekhan has dedicated research teams of more than 30 people for fundamental and technical researches. Its analysts constantly track the pulse of the market and provide timely investment advice to its clients in the form of daily research emails, online chat, printed reports and SMS on their mobile phone.
Services offered by Sharekhan A Sharekhan outlet offers the following services: Online BSE and NSE executions (through BOLT & NEAT terminals). Free access to investment advice from Sharekhans Research team. Sharekhan Value Line (a monthly publication with reviews of recommendations, stocks to watch out for etc). Daily research reports and market review (High Noon & Eagle Eye). Pre-market Report (Morning Cups). Daily trading calls based on Technical Analysis. Cool trading products (Daring Derivatives and Market Strategy). Personalized Advice. Live Market Information. Depository Services. Derivatives Trading (Futures and Options). IPOs & Mutual Funds Distribution. Internet-based Online Trading: Speed Trade. 22
Allow investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, Demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. a. Online trading account for investing in Equities and Derivatives b. Free trading through Phone (Dial-n-Trade) Two dedicated numbers for placing your orders with your cell phone or landline. Automatic funds transfer with phone banking (for Citibank and HDFC bank customers) Simple and Secure Interactive Voice Response based system for authentication Get the trusted, professional advice of our telebrokers After hours order placement facility between 8.00 am and 9.30 am c. Integration of: Online trading + Bank + Demat account d. Instant cash transfer facility against purchase & sale of shares e. IPO investments f. Instant order and trade confirmations by e-mail g. Single screen interface for cash and derivatives
TRADE TIGER
SHAREKHAN is extremely proud of its tailor made software namely TRADE TIGER This is a net based executable application for active traders who trade frequently during the day's trading session. Following are few popular features of Trade Tiger account. 24
A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX, Mutual Funds, IPOs Multiple Market Watch available on a Single Screen Multiple Charts with Tick by Tick Intraday and End of Day Charting powered with various Studies Graph Studies include Average, Band-Bollinger, Know Sure Thing, MACD etc Apply studies such as Vertical, Horizontal, Trend, Retracement & Free lines User can save his own defined screen as well as graph template that is, saving the layout for future use. User-defined alert settings on an input Stock Price trigger Tools available to gauge market such as Tick Query, Ticker, Market Summary, Action Watch, Option Premium Calculator, Span Calculator Shortcut key for FAST access to order placements & reports Online fund transfer activated with 12 Banks
SHAREKHAN COMMODITIES ACCOUNT
Although commodity derivatives command a humble share of 6% in the derivatives segment across the world, yet these record high volumes in the markets the world over compared to equity derivatives. In an era where risks to investments are on the rise, India needs to switch to commodity derivatives and also to weather derivatives (when these are launched), if it needs to top the list of developed nations. This commodity account is treated by Sharekhans owned software TRADE TIGER. Numerous options like stop loss trigger price/limit price makes it a hassle free avenue where Sharekhan allows investors to deal in MCX [Multi Commodity Exchange] & NCDEX [National Commodities and Derivative Exchange] 25
SHAREKHAN CURRENCY ACCOUNT
Currency trading is unexplored by investors and is a slow but it falls into a highly profitable region. High fluctuations in the value of currency have proved that currency trading might evolve into the best pick for the investors in future. The requirements are as follows Margin- 4% Validity- 3months Areas of investment (US Dollars, Euro, Japanese Yen, Pound Sterling)
Marketing strategies
Tele Calling The company uses the tele calling/ phone calling to reach the customer, which are interested. This is the most important technique to save time and giving demo of the companys product through making call in order to know the customer interest towards the product. This is the strategy with which one can motivate customer to go for the product and etc.
LMS: It is Lead Management System which means leads are generated by the customer who wants to purchase the product of the company. Company provides facility to the customer on online to fill the registration form through the companys executives can provide more information to the customer.
Yellow Pages: Yellow pages are used to gather data for making calls so that customer who did not fine time and are unaware of the product can know about the product.
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Canopys: This is the most important technique used by Sharekhan securities to market its product in different area of the city, company put their canopies and customer who are willing to know about the product come forward and provide best of their knowledge. Besides these companies executives ask customer to fill the questionnaire that tells the company about the levels of brand awareness.
Direct Marketing: Sharekhan executives reaches to the doors of the customer by fixing appointments with the interested customer, they describe the details of the pr oduct . Executive give demonstration of the products so that customer can understand better.
Advertising: Advertising is the most important tool of increasing awareness of the product and this is the most widely used technique by the company to tell about the new features and new lunch by giving briefing of the product. Sharekhan use banners, distribution of pamphlets and advertisement in newspapers and magazines.
References: Sharekhan strategy is to satisfy the customer in terms of their need by providing them timely services and knowledge about the trade in equities, mutual funds by giving tips for investment advises through e-mails or toll free calls for this purpose customers are provided relationship manager who give investment advice & also make transaction on their behalf on demand. The company satisfying customer executives ask their references that not only increase the awareness but also increase the goodwill of the company.
Competitiveness: The company is innovative and uses the latest technology to improve the product to fulfill the demands of the customers. Sharekhan makes it easy to make online transaction of shares. The company is competitive in terms of the product price and facilities it offers to the customer. 27
CHARGE STRUCTURE. Fee structure for general individuals.
Charge
Classic account Trade Tiger account
Account opening
Rs. 0 + 5000 initial margin
Rs. 0 + 5000 initial margin
Brokerage Intraday 0.05%**
Delivery 0.25%** Intra-day 0.05%**
Delivery 0.25%**
** Taxes as per govt.
The company have tie up with Twelve Banks for online fund transferring i.e. HDFC, ICICI, IDBI, CITI, Union Bank of India, Oriental Bank of Commerce, INDUSIND, Yes Bank, Bank of India, Centurion Bank of Punjab, SBI and Axis bank for online money transfer.
Following documents required to open an a/c with Sharekhan ltd: 1) Photo ID Proof Residence Proof (Permanent)
Pan Card (Mandatory) Passport Driving License Voters ID MAPIN UIN Card
Passport (valid) Voters ID Driving License (valid) Bank Statement (latest) Telephone bill (latest) Electricity bill (latest) Ration card Flat maintenance bill (latest) Insurance policy (latest) only LIC Leave-license/ purchase agreement
2) Colour photographs (Passport size & front face)
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TYPES OF SHARE TRADING
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ORGANIZATION STRUCTURE
Branch Head Regional Sales Manager Equity Advisors Back Office Dept. Territory sales manager Assistant Manager Direct Sales Executive Trainees Relationship Managers Customer care
Accounting Department 30
1.3 INTRODUCTION TO THE CUSTOMER SATISFACTION TOWARDS ONLINE TRADING
CUSTOMERS are never simple. Customers may say one thing but do another. They may respond to influences that change their minds at the last minute.
CUSTOMER SATISFACTION
Satisfaction level is the level of persons felt state resulting from comparing products perceived performance (or outcome) in relation to the persons expectation.
Thus satisfaction level is function of difference between perceived performance & expectation. A customer could experience one of three broad levels of satisfaction: If the performance falls short of expectations, the customer is dissatisfied. If the performance matches to the expectations of the customer, then the customer is satisfied. If the performance exceeds the expectations of the customer, the customer is highly satisfied, pleased or delighted.
But how does the customer expects? Expectations are formed on the basis of the buyers past buying experience statements made by the friends & associates, & marketer & competitor information & promises. If marketers raise the expectations too high the buyer is likely to be disappointed.
Some of the todays most successful companies are raising expectation & delivering the performance. The companies are aiming high because customers who are just satisfied will still find it easy to switch supplier when a better offer comes along. The fact is that high satisfaction or delight creates an emotional affinity with the brand, not just a rational preference, and this creates customers high loyalty.
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Companies seeking to win in todays markets must track their customers expectation perceived company performance, and customers satisfaction. They need to monitor this for the competitors as well. Companies that achieve high customer satisfaction ratings make sure that their target market knows it. The customers centered firms seek to create high customer satisfaction it is not out to maximize customer satisfaction.
First they can increase the customer satisfaction by lowering the price or increasing its services, but this may result in low profits. Second, the company might be able to increase its profitability in the other ways, such as by improving its manufacturing or investing more in R&D. Third, the company has many stakeholders including employees, dealers, suppliers & stockholders. Spending more to increase the customer satisfaction would divert funds from increasing the satisfaction of the other partners. Ultimately, the company must operate on the philosophy that it is trying to deliver a high level of customer satisfaction level subject to delivering at least acceptable levels of the satisfaction to the other stockholders within the constraints of its total resources.
Some cautions in measuring customer satisfaction, when customers rate their satisfaction with an element of the companys performance, say delivery, we need to recognize that customers will vary in how they define good delivery: it could mean early delivery, on time delivery, order completeness, and so on. Yet if the company had to spell out every element in detail, customers would face a huge questionnaire. We must also recognize that two customers can report being highly satisfied for a different reasons. One may be easily satisfied most of the times and the other might be hard to please on this occasion. Companies should also note that managers and salespersons can manipulate their rating on the customers on customer satisfaction.
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IMPORTANCE OF CUSTOMER SATISFACTION The level of satisfaction a customer has with a company has profound effects. Studies have found that the level of customers satisfaction has a positive effect on profitability: A totally satisfied customer contributes 2.6 times as much revenue to a company as a somewhat satisfied customer. A totally satisfied customer contributes 17 times as much revenue as a somewhat dissatisfied customer. A totally dissatisfied customer decreases revenue at a rate equal to 18 times what a totally satisfied customer contributes to a company.
Research has shown that when a person is satisfied with a company or service they are likely to share their experience with other people to the order of perhaps five or six people. However, dissatisfied customers are likely to tell another ten people of their unfortunate experience. Thus, though customer satisfaction does not guarantee the repurchase from a company but it does play a very important role in achieving customer loyalty. Conducting Expected performance Perceived performance CUSTOMER SERVICE E > P
Dissatisfied (will start purchasing competitors products.) E = P
Satisfied (Will may or may not continue to purchase products.) E < P
Delighted (Customer will be very much loyal.) 33
customer satisfaction research will provide your company with the necessary insight it needs to make informed decisions in order to retain and increase your customer base and improve customer relationships 80:20 RULE OF MARKETING By this rule, customers should be totally satisfied because most of the profit comes from the satisfied customers as they are the only one who becomes loyal to the company in future period. This rule says that 80% of the profit which is a very higher share comes from 20% of the loyal customers. Hence it is important to make customers loyal as they are the only one who will do positive word of mouth publicity for the company in front of other customers and indirectly benefits the company only.
METHODS OF TRACKING AND MEASURING CUSTOMER
Complaint and suggestions system A Customer centered organization would make it easy for its a customer to deliver suggestions and complaints. Many restaurants and hotels provide forms for guest to report likes and dislikes. A hospital could place suggestion boxes in corridors, supply comments cards to the exiting patients, and hire patients advocate to handle patient grievances. Some customer centered companies- P&G, General Electric, and Whirlpool -Establish customer hot lines with a toll free 800 telephone numbers to maximize case with which the customers can inquire, make suggestion, or complain. These information flows provide these companies with many good ideas and enable them to act more rapidly to resolve the problems.
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Customer satisfaction surveys A company must not conclude that it can get a full picture of customer satisfaction & dissatisfaction by simply a complain & suggestion system. A study shows that customers are dissatisfied with one out of the four and less than 5% of the dissatisfied customers will complain. Customers may feel that their complaints are minor, or that they will be made to be stupid, or that no remedy will be offered. Most customers will buy less or switch the suppliers rather than complain. The result is that company has needlessly lost the customer. Therefore, companies cannot use the complaint levels as a measure of customer satisfaction. Responsive companies obtain a direct measure of customer satisfaction by conducting periodic surveys. They send questionnaires or make telephone calls to random sample of their recent customer to find out how they feel about various aspects of the companys performance. Customers satisfaction can be measured in number of ways. It can be measured directly by asking indicate how satisfied you are with the service X on the following scale highly satisfied (directly reported Satisfaction). Respondents can be asked as well to rate how much they are expected of as certain attribute and also how much they are experienced (derived satisfaction). Still another method is to ask respondents to list any problem they have had with the offer and to list any improvements they could suggest (problem analysis). Finally, companies could respondents to rate various element of the offer in the terms of the importance of the each element and how well the organization performed each element (importance/performance ratings). This last method helps the company to know if it is underperforming on important elements and over performing on relative unimportant elements. While, collecting customer satisfaction data, it would also be useful to ask additional questions to measure the customers repurchase intention. This will normally be high if the customer satisfaction is high.
Lost customer analysis Companies should contact customers who have stopped buying have switched to another supplier to learn why this is happened. When IBM loses a customer, they mount a through effort to learn where they failed- is their price too high, their service deficient, their product unreliable, and so on. Not only is it important to conduct exit interviews 35
but also to monitor the customer loss rate which, if it is increasing, clearly indicates that the company is failing to satisfy its customers.
ONLINE SHARE MARKET TRADING IN INDIA
The financial market in India is growing rapidly and is expected to emerge as one of the leaders in the international arena very soon .This boom in financial market is stimulating the growth of the Indian share market encouraging the investors to invest in the share market.
The history of the share market of India dates back to 1875. The name of the first share trading association in India was Native Share and Stock Brokers Association which later came to be known as Bombay Stock Exchange (BSE). This association began with 318 members. Today India can boast of 24 share markets in the various parts of the country, and a member of financial intermediaries that include Banks, on Banking Financial Corporation, Insurance companies, Mutual Funds, etc. Online Trading is a service offered on the Internet for purchase and sale of shares. In the real world, you place orders on your stockbroker either verbally (personally or telephonically). These orders are routed to the Stock Exchange without manual intervention and executed thereon in a matter of a few seconds.
There are 2 types of online trading service: discount brokers and full service online broker. Discount online brokers allow you to trade via Internet at reduced rates. Some provide quality research, other dont. Full service online broker allow their clients to place online orders with the option of talking/ chatting to brokers if advice is needed. Brokerage rates here are higher. 5Paisa.com, ICICIDirect.com, IndiaBulls.com, sharekhan.com, HDFCsec.com, are some of the online broking sites in India. 36
Many companies are now offering Online trading accounts to their customers so they are in constant requirement of people who are familiar with this type of technique. Hence the scope of employment in this area is great and future prospects are bright.
ONLINE TRADING PROCESS The various transactions involved in online trading can be shown from the point of view of the: Client Broker Stock exchange
The client places in order via the net by login on to his brokers site.
The broker accepts and executes the order, and places it with the exchange.
The exchange accepts the order after checking the share limit for the day.
The broker makes the payment either directly via the clients bank account or pays through his own account and recovers it letter from the client.
The exchange receives money and completes the settlements.
The client is intimated the settlement either through the Demat account or via E mail.
BENEFITS OF ONLINE TRADING Ensures the best price for investors Offers liquidity to the investors Offers greater transparency Provides a level playing field Reduces the settlement risk 37
FACTORS TO KEEP IN MIND WHILE SELECTING ONLINE TRADING COMPANY
Brokerage cost: It is important to weigh up the subscription and trading costs charged by an online broker against benefits offered by the site. All online brokers display their charges on their sites. Some make sure you find the charges easily, while with other you will have to search a bit.
Safety: We should make sure site has 128-bit encryption to ensure safety of transaction online. ICICI Direct.com, 5paisa.com are few sites with 128-bit encryption. One gets a secured login id and password. It is always advisable to frequently change trading password. Ideally online trading site should be fully integrated. Ideally broking account, Demat account and bank account should be linked electronically.
Rate refresh: Rate refresh has to be real-time with no time lag. The speed and reliability comes with huge investment in technology. It is always advisable to check rates of online broking sites with BSE/ NSE terminal rates.
Speed of execution: System has to be fast and reliable that does just one job-executes your trades. The last thing you need is a site that is heavily congested with the users who are downloading heavy jpeg graphs or pulling the latest story why market is moving. The site should be one click wonder where squaring off all your positions or cancelling all your pending orders takes one click and a confirmation of action.
Trading limit: For trading, all sites provide 4 times buy and sell limit against margin money put in by customer. For delivery of shares, buying limit is equal to margin money put in by customer. Couple of sites also provides margin funding for buying of shares.
Free trial period: Site should allow users free trial period to familiarize yourself with system before you decide to become trading member of the site. 38
CHAPTER 2 OBJECTIVE & METHODOLOGY
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2.1 OBJECTIVE OF THE STUDY
The objective of my summer training is to gain knowledge about how an organization works and in particular setup of a stock broking house. To understand the customer satisfaction towards online trading. To measure the effectiveness of broking sites. To understand the depth up to which the online share traders are clear and aware of online share trading. To determine the growth and development of online trading in India. To determine what type of products the customers deal while doing the online trading.
2.2 RESEARCH METHODOLOGY RESEARCH DESIGN The study of research method provides us with the knowledge and skill we need to solve the problem and meet the challenges of the fact-based decision.
Descriptive research is a fact-finding investigation with educate interpretation. It is the simplest type of research. It is more specific than explanatory study, as it has focused on particular aspect of the problem studied it is designed to get her descriptive information and provide information for formulating more sophisticated studies.
SOURCES OF DATA PRIMARY DATA: - Primary data are those which are gathered specially for the project at hand, directly e.g. through questionnaires & interviews. A questionnaire consists of list of questions to be asked from the respondents and the space provided to record the answer / responses. It is the original data collected by the scholar personally but it is un useful for large area coverage, under this method problem of authentification lies. Primary data sources 40
include company salesman, middleman, consumers, buyers & other businessman & even competitors. This method also requires a lot of time and money.
SECONDARY DATA:- These are generally published sources, which have been collected originally for some other purpose. It is collected by some of the organization involved in research process. Source are internal company records, government publication, reports & publication, reports & journals, trade, professional and business associations publications & reports. It requires less time and money. It is more useful because it is collected by the experts. It is the best method of collecting data when large area coverage is required. Example: - Information collected through magazines, newspapers and websites. The relevant data was collected from both primary sources and secondary sources. Primary data is collected through the questionnaire. Secondary data is collected through the websites, magazines, etc
SAMPLING TECHNIQUE Convenience sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher. In this project I have used Convenience sampling
SAMPLE SIZE Sample size for questionnaire was 100 online trading users.
METHOD OF THE DATA COLLECTION The data is collected through Questionnaire and Observation.
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AREA OF SURVEY : Delhi and NCR.
TIME FRAME : 8 weeks
TOOLS AND TECHNIQUES OF ANALYSIS I have analyzed the data through Pie-chart and then interpreted the same.
2.3 LIMITATIONS OF THE STUDY:-
The study is confined to Delhi and NCR area only. The data on websites might be possible, not get updated. The responses of the consumers may not be genuine. Some respondents either do not have time or willing to respond.
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CHAPTER 3 DATA ANALYSIS & INTERPRETATION
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Q.1) With which company do you have your Demat account?
Options Response % Sharekhan 44 ICICI Direct 15 Kotak Mahindra 9 India Bulls 14 Any other 18
INTERPRETATION
From the above pie chart it has been seen that out of total respondents, 44% of the respondents chose Sharekhan in order to open their Demat account to do online share trading, 15% of them chose ICICI Direct, 14% chose India Bulls, 9% chose Kotak Mahindra and 18% of the respondents chose other firms as their broker to do online share trading. 44% 15% 9% 14% 18% DEMAT ACCOUNT Sharekhan ICICI Direct Kotak Mahindra India bulls Any Other 44
Q.2) Were you doing share trading offline before choosing online?
Options Response % Yes 60 No 40
INTERPRETATION
The above graph indicates that 60% of the respondents were doing share trading offline before choosing the online trading whereas, 40% of the respondents never traded offline before choosing online share trading.
60% 40% % OF SHARE TRADING USERS IN OFFLINE MODE Yes No 45
Q.3) What influenced you to begin online share trading?
Options Response % Referred by friends 45 Online advertising 15 Advice by financial consultants 30 Any other 10
INTERPRETATION
The above pie chart indicates that out of total respondents, 45% of the respondents were influenced by friends into online share trading, 15% of the respondents were influenced by online advertisements whereas, 30% of them were influenced by the advice of the financial consultants and 10% of them were influenced by other sources.
45% 15% 30% 10% INFLUENCING FACTOR Referred by friends Online advertising Advice by financial consultants Any other 46
Q.4) Is online trading simple?
Options Response % Yes 75 No 25
INTERPRETATION
From the above pie chart it has been seen that 75% of the respondents find online trading very simple whereas, 25% of the respondents still find online trading complicated.
The above pie chart indicates that out of the total respondents, 58% of the respondents were doing online share trading on a daily basis, 25% of the respondents were doing online trading on a weekly basis, 10% of the respondents were trading on monthly basis whereas, only 7% of the respondents were doing online trading on irregular basis.
58% 25% 10% 7% FREQUENCY OF ONLINE TRADING Daily basis Weekly bais Monthly basis Irregular 48
Q.6) Where do you invest mainly?
Options Response % Share market 50 Mutual fund 15 Insurance 8 Government securities & bonds 9 Fixed deposits 10 Any other 8
INTERPRETATION
The above pie chart shows that although the mutual funds market is on the rise with 15% yet, the most favored investment continues to be in the share market i.e. 50%, whereas, 10% in fixed deposits, 9% in government bonds, 8% in insurance and 8% invest in other sources. So, with a more transparent statement system, investment in the stock market can definitely increase. 50% 15% 8% 9% 10% 8% INVESTMENT PREFERANCE Share market Mutual fund Insurance Govt. Securities & bonds Fixed deposits Any other 49
Q.7) Which type of customer group you belong type?
Options Response % Short term trader 55 Long term investor 45
INTERPRETATION
From the above chart it can been seen that out of the total respondents 55% of the respondents are short term trader whereas, 45% of the respondents believe in investing for long term purpose.
55% 45% CUSTOMER GROUP Short term trader Long term investor 50
Q.8) From how long you are using online trading?
Options Response % Less than 3 years 35 3-5 years 20 More than 5 years 45
INTERPRETATION
From the above chart it has been found that 45% of the respondents are doing online trading for more than 5 years whereas, 20% of them are doing trading in between 3-5 years and 35% of the respondents are the new users who are trading for less than 3 years.
35% 20% 45% TIME DURATION Less than 3 years 3-5 years More than 5 years 51
Q.9) From where do you access the internet?
INTERPRETATION
The above pie chart indicates that out of total respondents 55% of the respondents were accessing internet for share trading from their stock broker office, 25% of the respondents were accessing internet for share trading at home and 20% of the respondents were accessing internet for share trading at browsing centres.
25% 55% 20% ACCESSMENT OF INTERNET Home stock broker office Browsing centre Options Response % Home 25 Stock broker office 55 Browsing centre 20 52
Q.10) Is the brokerage charged by your trading site reasonable?
Options Response % Yes 44 No 56
INTERPRETATION
The above pie chart shows that 56% of the respondents are not satisfied with the brokerage charged by their trading site as they think that it is much higher whereas, 44% of the respondents feel that the brokerage charged by their trading site is reasonable. This indicates the average response of the people about the brokerage charges of their trading site.
44% 56% REASONABILITY IN BROKERAGE Yes No 53
Q.11) Do you know about Sharekhan?
INTERPRETATION
From the above pie chart it can be seen that only 70% of the respondents are aware about Sharekhan whereas, 30% of the respondents are still not aware about the Sharekhan. This shows that the company should increase its market shares over its competitors in order to increase its brand image.
70% 30% AWARENESS ABOUT SHAREKHAN Yes No Options Response % Yes 70 No 30 54
If yes, have you ever taken services from Sharekhan?
Options Response % Yes 45 = 64 No 25 = 36
INTERPRETATION
From the above pie chart it can be seen that from the respondents who are aware about Sharekhan, only 64% of the respondents have taken the services from Sharekhan whereas, 36% of the respondents are there who are aware of the company but had not taken any kind of services.
64% 36% SERVICE Yes No 55
Q.12) Are you satisfied with your share trading company?
Options Response % Yes 67 No 33
INTERPRETATION
From the above pie chart it can be seen that 67% of the respondents are satisfied with their share trading company whereas, 33% of the respondents are dissatisfied with their share trading company.
67% 33% SATISFACTION LEVEL IN SERVICES Yes No 56
Q.13) Do you feel that trading volume increases because of online trading?
Options Response % Yes 58 No 42
INTERPRETATION
The above pie chart indicates that out of total respondents, 58% of the respondents feels that trading volume has increased because of online trading whereas, 42% of the respondents do not feel that trading volume has increased due to online trading.
58% 42% VOLUME FACTOR Yes No 57
CHAPTER - 4 FINDINGS
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FINDINGS Friends have been the major influencing factor towards usage of online trading. Most of the respondents access the internet at the stock brokers office. From the research I found out that most of investors are investing in Share Market as compared to mutual funds or any other options. Most of the respondents have their Demat account with Sharekhan then in ICICI Direct and other trading companies. From the research it has been noticed that many of the respondents do trading on a daily basis. Most of the respondents are not satisfied with the brokerage charged by their trading site as they think that it is much higher. More than half of the respondents are aware about Sharekhan but few of them only had taken services from Sharekhan. It is also seen that people think that online trading is convenient and easy to operate. Most of the respondents are doing online trading for more than 5 years. Most of the respondents were into offline trading before choosing online trading.
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CHAPTER - 5 RECOMMENDATIONS
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RECOMMENDATIONS I recommend the companies to take steps to educate Investors about their rights and duties. I suggest them to increase the investors confidence. Necessary steps should be taken by the companies to deal with the situations arising due to break down in online trading. Awareness campaigns like giving idea about futures and options, derivatives, dividend policies will create interest in online trading. And this helps organization for market positioning as well as mind positioning. Seminars can be conducted at corporate level so as to increase potential customer base. Corporate people do not go for share trading due to lack of time. This kind of seminar will motivate them and make them aware about e-trading. Development in online services for the customers like; brokerages, application, research report, SMS facilities. In order to increase online trading, customers should be provided with more and more services so that preference can be given to online trading over offline trading. Customer interest should be increased in mutual funds, fixed deposits and other options also so that they can invest in it. Sharekhan should also provide lucrative offer to attract customers from competitors company.
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ANNEXURE
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QUESTIONNAIRE
Dear Sir / Madam, we are conducting a survey on CUSTOMER SATISFACTION TOWARDS ONLINE TRADING. We shall be very thankful to you to give your few minutes to us for answering our few questions below.
Q.1) With which company do you have your Demat account? a) Sharekhan b) ICICI Direct c) Kotak Mahindra d) India Bulls e) Any other..
Q.2) Were you doing share trading offline before choosing online? a) Yes b) No
Q.3) What influenced you to begin online share trading? a) Referred by friends b) Online advertising c) Advice by financial consultants d) Any other
Q.4) Is online trading simple? a) Yes b) No
Q.5) How often do you do online share trading? a) Daily basis b) Weekly basis c) Monthly basis d) Irregular
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Q.6) Where do you invest mainly? a) Share market b) Mutual fund c) Insurance d) Government securities & bonds e) Fixed deposits f) Any other..
Q.7) Which type of customer group you belong type? a) Short term trader b) Long term investor
Q.8) From how long you are using online trading? a) Less than 3 years b) 3-5 years c) More than 5 years
Q.9) From where do you access the internet? a) Home b) Stock broker office c) Browsing centre
Q.10) Is the brokerage charged by your trading site reasonable? a) Yes b) No
Q.11) Do you know about Sharekhan? a) Yes b) No
If yes, have you ever taken services from sharekhan? a) Yes b) No
Q.12) Are you satisfied with your share trading company? a) Yes b) No
Q.13) Do you feel that trading volume increases because of online trading? a) Yes b) No
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BIBLIOGRAPHY
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BOOKS: Kotler Philips, Marketing Management: 11 th Edition, 2004, Prentice Hall of India Ltd., New Delhi. Kothari C.R Research Methodology: Methods and Techniques. 2 nd Edition, 1990, New Age International Publishers. Majumdar Ramanuj Consumer Behaviour: Insights from Indian Market, 2010, PHI learning Publishers.