Mutual Fund Marketing In India

Mutual fund marketing in India

IBMR, Bangalore.

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Mutual fund marketing in India

INSTITUTE OF BUSINESS MANAGEMENT & RESEARCH IBMR House, # 44, 6th Cross, Wilson Garden, Hosur Main Road, Bangalore. 560 027. INDIA

“Mutual Fund Marketing in India” By “Mohneesh Kumar Bajpai” Reg No. 520841765

A Project report submitted in partial fulfillment of the requirements of Internship Training of Master of Business Administration II Semester of Sikkim Manipal University

EXECUTIVE SUMMARY

IBMR, Bangalore.

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Mutual fund marketing in India

University Centre Certificate

This is to certify that the Project entitled “Mutual Fund Marketing in India” Submitted in partial fulfillment of the requirements for the Internship Training of Semester II of MASTERS OF BUSINESS ADMINISTRATION of Sikkim Manipal University of Health, Medical & Technological sciences Mohneesh Kumar Bajpai Has worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prizes and that the work has not been published in any journal or Magazine. Reg. No: 520841765

Attested Director / Principal Of the Institute

IBMR, Bangalore.

Certified Faculty Guide’s Name & Qualification

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Mutual fund marketing in India

Examiner’s Certification Investment may be defined as an activity that commits funds in any

The project report of

financial/physical form in the present with an expectation of receiving

Mohneesh Kumar Bajpai additional return in the future. The expectation brings with it a probability that the quantum of return may vary TITLE from a minimum to a maximum. The possibility of variationMutual in the actual is known investment risk. Thus fundreturn marketing inasIndia every investment involves a return and risk. The investor can choose the

approved andtoisinvest acceptable in quality andthe form investment Is funds he wants his money, providing investor an opportunity to have a direct stake in the performance of the financial markets. He can also benefit from attractive tax advantages. A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, short-term money market instruments, and/or other securities. The fund manager, also known as portfolio manager, trades the fund's underlying securities, realizing capital gains or losses and passing any proceeds to the individual investors.

Internal Examiner

External Examiner

Today, the worldwide value of all mutual funds totals more than $26 trillion in assets. The principal paid are invested in fund/funds of the investor’s choice (depending on the allocation rate) & units are allocated depending on the price of units for the fund/funds.

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Mutual fund marketing in India

STATEMENT OF PROBLEM: The premiums that are collected are invested in different funds like equity

The project report / Thesis of

fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must be allocated such that their performance is stable and improves so that the

Mohneesh Kumar Bajpai investor gets high returns. Due to the increasing competition it becomes necessary that the companies fund TITLE is the best performing fund with highest return. Among the different mutual funds this study is to find out the best fund

“Mutual Marketing in India” which will yield high returns toFund the investor and minimize there risk.

OBJECTIVES OF THE STUDY: •

To study the different investment guidelines prescribed by IRDA.

•

Mutual Fund Marketing in India

•

To analyze the competition among different sectors for investment.

•

Based on the findings suitable suggestions are given.

Is approved and is acceptable in quality and form

PLACE OF THE STUDY:

Miss: Navneet

(MARKETING & RELATIONSHIP MANAGER) The study was conducted at Reliance Money 3rd block Jayangar Bangalore. Also some of the software companies were covered including Accenture, Oracle, HP, etc. Even bank ATM’s of Axis Bank in Wilson garden and ICICI Bank in Jayangar were covered.

IBMR, Bangalore.

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Mutual fund marketing in India

Student Declaration

I hereby declare that the project report titled “Mutual fund Marketing in India”

Submitted in partial fulfillment of the requirements for the Internship Training of II Semester of Masters of Business Administration of Sikkim –Manipal University, India, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes

(Signature of the Student) Place: Bangalore

Date: -07-09-08

IBMR, Bangalore.

Mohneesh Kumar Bajpai

Reg. No: 520841765

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Mutual fund marketing in India

EXECUTIVE SUMMARY Investment may be defined as an activity that commits funds in any financial/physical form in the present with an expectation of receiving additional return in the future. The expectation brings with it a probability that the quantum of return may vary from a minimum to a maximum. The possibility of variation in the actual return is known as investment risk. Thus every investment involves a return and risk. The investor can choose the investment funds he wants to invest his money, providing the investor an opportunity to have a direct stake in the performance of the financial markets. He can also benefit from attractive tax advantages. A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, short-term money market instruments, and/or other securities. The fund manager, also known as portfolio manager, trades the fund's underlying securities, realizing capital gains or losses and passing any proceeds to the individual investors. Today, the worldwide value of all mutual funds totals more than $26 trillion in assets. The principal paid are invested in fund/funds of the investor’s choice (depending on the allocation rate) & units are allocated depending on the price of units for the fund/funds.

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Mutual fund marketing in India

STATEMENT OF PROBLEM: The premiums that are collected are invested in different funds like equity fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must be allocated such that their performance is stable and improves so that the investor gets high returns. Due to the increasing competition it becomes necessary that the companies fund is the best performing fund with highest return. Among the different mutual funds this study is to find out the best fund which will yield high returns to the investor and minimize there risk.

OBJECTIVES OF THE STUDY: •

To study the different investment guidelines prescribed by IRDA.

•

Mutual Fund Marketing in India

•

To analyze the competition among different sectors for investment.

•

Based on the findings suitable suggestions are given.

PLACE OF THE STUDY: The study was conducted at Reliance Money 3rd block Jayangar Bangalore. Also some of the software companies were covered including Accenture, Oracle, HP, etc. Even bank ATM’s of Axis Bank in Wilson garden and ICICI Bank in Jayangar were covered.

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Mutual fund marketing in India

DEFINITIONS:-

EQUTY DIVERSIFIED:• Equity Fund – This fund provides the scope of high appreciation over a long term. The fund will primarily invest in equities & is expected to match returns given by NSE NIFTY. This fund will invest at least 90% in equities and maximum 10% in cash.

• Equity Gain Fund - The investment objective of this Fund is to provide capital appreciation through investment in select equity stocks that have the potential for high capital appreciation. This fund will invest at least 85% in equities and maximum 15% in debt & cash instruments.

• Equity MidCap Fund - The Investment objective of this Fund is to achieve capital appreciation by investing in a diversified basket of mid caps stocks and large cap stocks. The fund shall primarily invest in mid cap stocks (at least 50% of the investment shall be in mid cap stocks).Investment portfolio shall also include large cap stocks and cash with cash not exceeding 20% of the portfolio value.

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Mutual fund marketing in India

BALANCE:Balanced Fund – The balanced fund is primarily for those who prefer a mix of steady returns & growth. The balanced fund will invest 30% to 50% in the equity fund and 50%to 70% in the debt fund.

• Cash Fund – The cash fund will invest conservatively in money market & short-term investments to ensure that return on investments shall never be negative. 100% of this fund will be invested in money market instruments. The price of the units in this fund is guaranteed never to go down. (i.e:- gold, govt. Securities, etc)

• Debt Fund - This fund provides the scope for steady returns at low risk through investment in high quality fixed income securities. This fund will be invested fully in debt instruments

EQUITY LINKED SAVING SCHEME: •

ELSS funds have a lock-in period of three years. This could be restricting, but look at the other side of the picture -- the lock-in period prevents unnecessary withdrawals and helps your money grow over a period of time.

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Mutual fund marketing in India If you are wondering why a three-year lock-in period is necessary, it is because you need to take a long-term view when you invest in equity. The real potential of equities starts to show only after a few years. This allows you to ignore the short-term slumps and stay invested for the long haul. The tax benefit: •

Investments in ELSSs fall under Section 80C.

•

The limit under this section is Rs 1, 00,000.

•

This is irrespective of how much you earn and under which tax bracket you fall.

•

Also, there are no sub-limits under this overall Rs 1, 00,000 amounts.

•

The dividends you earn in an ELSS are tax free.

METHODOLOGY / RESEARCH DESIGN Type of Study: The study at “Reliance Money” is a combination of analytical and practical study. It is based on data collected from records of the company and is administered

to

various

departmental

heads

connected

with

Fund

Management.

Types of Data: IBMR, Bangalore.

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Mutual fund marketing in India 1. Primary Data: This data was collected from discussions and interactions with respective departmental heads and clients. 2. Secondary Data: This data was collected through various newsletters, publications through researchers in the field of fund management, journals magazine reports and consolidated records from “Reliance Money “

Sampling plan: The sampling universe consisted of various funds and their returns.

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Mutual fund marketing in India

CONTENTS Chapter 1 – Introduction

12-42

1.2 Mutual Fund Marketing in India

12-

14 1.2History of the organization

15-18

1.3 Mutual Fund / organizational structure

18-19

1.4 Product of company

20-23

24

1.4.1. Equity Shares 1.4.2 Bonds

24-25

1.4.3 Mutual Funds 1.4.4 Real Estate 1.4.5. Financial Derivatives The advantages of investing in a Mutual Fund are:

25 25-26 26-27 27

Different type of mutual fund

28-39

Disadvantage of investing through funds

40- 41

Chapter 2- RESEARCH METHODOLOGY

44

2.1 Type of study

44

2.2 Types of Data

44

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Mutual fund marketing in India 2.3 Sampling Plan:

45

2.4 SWOT of the organization:-

45-46

Chapter- 3 - Aim and Objective 3.1- On Job Training:

47-59 47-51

3.2 - Job profile at reliance Money

52-54

3.3- Problems faced while selling products

55-56

3.4 - My Responsibility in organization 3.5- Limitation

57-58 59

Chapter-4- ANALYSIS AND INTERPRETATION OF DATA 60-73 4.1- Segmentation Targeting, positioning

60-63

4.2- Comparison of ULIPS vs. MFS (India)

63-65

4.3- Advantage ulips

66

4.4- Advantage of mfs

66

4.4- Data analysis and interpretation

66-73

4.5 – findings

74

Chapter -5- Conclusion and Recommendation

75-79

QUESTIONNAIRE

80-85

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Mutual fund marketing in India

Chapter 1 INTRODUCTION Mutual Fund Marketing in India An investor earns or expects to earn additional monetary value from the mode of investment that could be in the form of financial assets. FUND Instead of directly buying equity shares or fixed income instruments an investor can participate in various schemes floated by mutual fund. A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation

realized is shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow

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Mutual fund marketing in India chart

below

describes

broadly

the

working

of

a

mutual

fund:

REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA The regulation of mutual funds in India is governed by the SEBI vide the SEBI (Mutual Fund) Regulation, Act 1996 (here in after referred to as SEBI Regulations). These regulations make it mandatory for mutual funds to have a three-tier structure of sponsor – Trustee – Asset Management Company (AMC). The sponsor is the promoter of the IBMR, Bangalore.

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Mutual fund marketing in India mutual fund and appoints the trustees. The Trustees are responsible to the investors in the mutual fund and appoint the AMC for managing the investment portfolio.SEBI regulations also provide for who can be a sponsor, trustee and AMC, specifying the format of agreement between

these entities. These agreements provide for the rights, duties and obligations of these three entities. The UTI is also structured as a trust. The important difference through is that UTI does not have sponsors or a separate AMC. Financial intuitions and banks that contributed to the initial capital of the UTI have their representatives on UTI’s Board of Trustees, which oversees the operation of UTI Mutual Fund. The Association of Mutual Funds in India (AMFI) is a self-regulatory body formed by the various MF Companies to address the practices and policies of various aspects like new scheme launches, payments to intermediaries’ comparisons and other ethical systems. Likewise, different companies have their own Compliance and Audit offices, which are mandated to control and report adherence to and deviations if any on the regulations and policies issued by SEBI. ADVANTAGES OF MUTUAL FUNDS

Professional Management Diversification IBMR, Bangalore.

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Mutual fund marketing in India Convenient Administration Return Potential

Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits well regulated

History of the organization: Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 88,388 Crs (AAUM for 30th Apr 09 ) and an investor base of over 71.53 Lacks.

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has presence in 118 cities across the country. Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors. "Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of

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Mutual fund marketing in India

Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders."

Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.

Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors.

"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital

being

held

by

minority

shareholders."

Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.

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Mutual fund marketing in India

Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.

Statutory Details:

Sponsor:

Reliance

Trustee:

Reliance

Capital Capital

Trustee

Limited. Co.

Limited.

Investment Manager: Reliance Capital Asset Management Limited. The Sponsor, the Trustee and the Investment Manager are incorporated under the

Companies

Act

1956.

General Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond

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Mutual fund marketing in India their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the corpus. The Mutual Fund is not guaranteeing or assuring any dividend/ bonus. The Mutual Fund is also not assuring that it will make periodical dividend/bonus distributions, though it has every intention of doing so. All dividend/bonus distributions are subject to the availability of the distributable surplus in the Scheme. For details of scheme features and scheme specific risk factors, please refer to the provisions of the offer document.

•

Reliance Mutual Fund has won the "Most Trusted Mutual Fund Brand" for the second year, in succession by Economic Times - AC Nielsen ORG-MARG survey.

•

CNBC TV18 - CRISIL Mutual Fund of the Year Award for 2007 Reliance Growth Fund - Most Consistent CPR Performer - Equity Fund

Category

Reliance Growth Fund was the only scheme that won the CNBC TV18 –

• CRISIL Mutual Fund of the Year Award in the Most Consistent CPR Performer - Equity Fund category. In total 8 schemes were eligible for IBMR, Bangalore.

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Mutual fund marketing in India the award universe. Schemes present in all 20 quarterly CRISIL CPRs for the 5 years ending with 2007 were considered for the award. The award is based on consistency of the scheme’s performance in the twenty quarterly CRISIL CPR rankings released during the calendar years 2003 to 2007. • Reliance Growth Fund-Growth Plan was declared the best fund over 5 years in the Equity India category, out of 81 eligible schemes. • Reliance Natural Resources fund is the only one Natural Resources sector fund in India . •

Reliance Mutual has completely withdrawn the restriction/upper limit imposed on subscription in Reliance Equity and Reliance Growth schemes with effect from August 18. Fresh and additional subscriptions including systematic investment plans will henceforth be accepted without any limit, subject to the minimum subscription amount for each scheme.

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Mutual fund marketing in India

1.3 Mutual Fund / organizational structure:

Establishes the mutual fund as a trust and registers with SEBI

Sponsor Company

Mutual fund (For e.g. Reliance AMC)

Asset Management Company.

Custodian

Registrar

IBMR, Bangalore. Distributors

Managed by the board of trustees.

Hold unit holders funds in mutual fund. Enters into an agreement with SEBI.

Floats mutual funds as per the regulations of SEBI regulations.

Provides custodial services.

Provides registrar and transfer services.

Provides the network for 23 distribution of schemes to the investors.

Mutual fund marketing in India

1.4.

Product of company:

1.4.1. Equity Shares: Equity shares represent ownership capital. As an equity shareholder, you have an ownership stake in the company. This essentially means that you have a residual interest in income and wealth. Perhaps, the most romantic among various investment avenues, equity shares are classified into the following broad categories by stock market analysts: • Blue chip shares • Growth shares • Income shares • Cyclical shares • Speculative shares 1.4.2 Bonds: Bonds or debentures represent long-term debt instruments. The issuer of a bond promises to pay a stipulated

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Mutual fund marketing in India steam of cash flow. Bonds may be classified into the following categories: • Government securities • Government of India relief bonds

• Government agency securities • PSU bonds • Debentures of private sector companies • Preference shares 1.4.3 Mutual Funds - Instead of directly buying equity shares and/or fixed income instruments, you can participate in various schemes floated by mutual funds which, in turn, invest in equity shares and fixed income securities. There are three broad types of mutual fund schemes: • Equity schemes • Debt schemes • Balanced schemes 1.4.4 Life Insurance - In a broad sense, life insurance may be viewed as an investment. Insurance premiums represent the

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Mutual fund marketing in India sacrifice and the assured sum the benefit. The important types of insurance policies in India are: • Endowment assurance policy • Money back policy

• Whole life policy • Term assurance policy 1.4.5 Real Estate - For the bulk of the investors the most important asset in their portfolio is a residential house. In addition to a residential house, the more affluent investors are likely to be interested in the following types of real estate: • Agricultural land • Semi-urban land • Time share in a holiday resort Financial Derivatives - A financial derivative is an instrument whose value is derived from the value of an underlying asset. It may be viewed as a side bet on the asset. The most important financial derivatives from the point of view of investors are: • Options • Futures IBMR, Bangalore.

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Mutual fund marketing in India Since every individual would like to earn return on their investment but where to invest has always been a problem. There has always been a confusion as to which instrument to

invest, which instrument will give me higher returns, etc. Even now nuclear families are in and so are longer life spans. Even inflation is increasing and so do the standard of life, medical costs, and other things. In such a scenario, one need to think as to how he will take care of all his future needs and build up a corpus that will not only take care of routine expenses but also provide for extra costs, especially of health care. One need to have a corpus of funds, post-retirement, which will give him close to 100% of the salary to preserve the lifestyle he has grown to enjoy.

: The advantages of investing in a Mutual Fund are: •

Professional Management

•

Diversification

•

Convenient Administration

•

Return Potential

•

Low Costs

•

Liquidity

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Mutual fund marketing in India •

Transparency

•

Flexibility

•

Choice of schemes

•

Tax benefits

•

Well regulated

There are different types of mutual funds are available in the investment market. An investor who wants to invest his money in mutual funds must have the knowledge about different kinds of mutual funds.

GOALS OF THE FUND: Many funds are designed to invest in companies that meet specific investor goals, like growth, value, dividend or income to name a few.

Only companies that meet certain criteria will be included in the fund. For example, a growth fund looks for companies with significant, untapped growth potential, whereas a value fund will look for companies that are undervalued by the market as a way to increase investor returns. Both of these types of funds are designed for long-term capital appreciation. If you need the funds to generate income either because you have retired, are saving to buy a house or are unable to work, you need to look at funds that will not only grow over time, but will also provide you with an income. For

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Mutual fund marketing in India example, dividend funds are designed to pay you dividends on a quarterly or annual basis.

DIFFERENT TYPES OF FUNDS: •

GROWTH FUNDS:

Is the type of funds where the collected money is invested in different stocks in order to capital appreciation over a long term? Value of these mutual funds increase with the upward in stock market and decrease with a downfall in the stock market. The collected money is invested in common stocks of the companies that have a solid growth rates, as well as a history of consistent dividend payout.

•

BOND FUNDS / FIXED INCOME FUND:

Bond funds typically invest in bonds issued by governments and large companies. Bond fund returns are based on a combination of interest payments and price changes of the bonds in the fund. The market value of bonds is affected by prevailing interest rates. When interest rates fall, existing bonds will generally rise in value; when interest rates rise, bonds will generally fall in value. Overall, bond funds are affected in the same way.

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Mutual fund marketing in India Fund managers attempt to control risk by managing the credit quality and the average term of the bonds in the fund. Fixed income funds generally have the potential for higher returns than money market or guaranteed funds, but there tends to be a greater risk of a loss. The risk on a bond fund is that the bond issuer is not able to repay the borrowed amount. Under this category funds are invested in the opportunities that can provide a regular profit on the invested money.

•

BALANCED FUNDS / DIVERSIFIED FUND:

Balanced funds invest in a mix of stocks, bonds, and cash investments. The mix will change as market conditions change, but it usually stays within pre-

determined ranges. (For example, stocks 40-60%, bonds 30-50%, cash 030%). The benefit of a balanced fund is that it provides automatic diversification by investing in a variety of asset classes and thereby reduces the risk of one asset class performing poorly. Balanced funds tend to be more risky than bond funds and less risky than equity funds. The main objective is to earn a high rate of return on the invested money.

•

MONEY MARKET FUND / GUARANTEED FUND:

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Mutual fund marketing in India Money market funds invest primarily in short-term (less than one year) government Treasury Bills (also called T-Bills) and corporate notes which pay a fixed rate of interest. The rate of return of money market funds tends to be lower than that of funds that are managed for long-term gains, but they are a very low-risk investment. Money market funds are ideal for parking your cash while you decide where to invest for the long haul, or for money you will need in the near future.

•

ASSET ALLOCATION FUNDS:

Asset allocation funds are similar to balanced funds in that they invest in all of the asset classes.

Asset allocation funds differ from balanced funds because the fund manager isn't restricted to the percentage of the money they can put in a specific type of investment (stocks, bonds, and so on). A tactical asset allocation fund is one where the manager frequently makes decisions about the best asset allocation, sometimes every few months. The manager of a strategic asset allocation fund will generally revise the fund's asset allocation once a year. Asset allocation funds provide a "one stops shopping" approach to asset allocation.

•

INDEX FUND:

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Mutual fund marketing in India Index funds include stock or bond funds that closely match the performance of a market index, such as the BSE. Over time, index fund performance will slightly lag that of the actual index as result of cash flows and transaction costs. Since index fund investments are not actively researched, the management fees on index funds are generally very low. The risks associated with index fund investing are similar to those of bond and equity funds; however, index funds can have significant exposure to individual stocks when the weighting in the index is in excess of that allowed for actively managed funds. This can reduce the diversification in the fund. The risk level in this category is at the minimum level.

•

EQUITY FUNDS:

Equity funds invest primarily in stocks. Because stocks have traditionally risen in value more than other types of investments, they offer the greatest potential for long-term growth. Investing in stocks is also riskier than other investments as stock prices can fluctuate more than other types of investments. The market price of a stock will vary with the company's financial performance, general economic conditions in the country in which it operates, as well as investor perceptions.

ALSO, PERHAPS MOST COMMONLY FUNDS ARE DIVIDED BY THEIR GEOGRAPHIC MARKETS, COMPANY SIZE AND INDUSTRY.

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Mutual fund marketing in India GEOGRAPHY: Specific countries: Funds can invest primarily in investments in one country. For example, Canadian equity funds invest primarily in Canadian companies.

International: These funds can generally invest in any country around the world except for Canada. Most international funds invest in the U.S., Europe, Australia and the Far East, sometimes referred to as the EAFE countries.

Global funds: These funds invest in any country around the globe, including Canada. Foreign equity funds provide an opportunity to diversify across many markets and reduce the risks associated with the health of any one economy and its stock market. These funds do have risks associated with political and market conditions in other countries. In addition, foreign funds are exposed to currency risk. If the Value of the Canadian dollar rises, or the currencies of the countries the fund invests in fall, your return calculated in Canadian dollars will be lower. Different accounting practices and securities regulations around the world may affect the fund managers' ability to value and trade in some securities. Portfolio managers seek to reduce these risks by investing in different countries and industries.

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Mutual fund marketing in India COMPANY SIZE: Many funds restrict the types of stocks they buy for the fund based on the size of the company. The size of the company is measured by its market capitalization (market cap - measures the company's worth by multiplying its stock price by the number of shares outstanding). Generally speaking, small cap funds are more risky than large cap funds as minor changes in a small cap company's stock price can have a major impact

on its market cap. However, if you can take the ups and downs, there can be greater rewards for investors in small cap funds.

INDUSTRY: Some funds concentrate all their investments in a specific sector or industry of the

economy.

For

example,

biotechnology,

communications,

natural

resources, etc. Industry specific funds provide an opportunity to capitalize on the strength of a particular sector of the economy. Investing a significant portion of your portfolio in one industry can be risky, especially if that industry falls on hard times. However, the upside can be equally as good if the industry performs well. (We have seen this in the technology sector.) However, if you have a diversified portfolio you may be able to reap some incremental returns by investing in an industry-specific fund.

INVESTMENT ATTRIBUTES IBMR, Bangalore.

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Mutual fund marketing in India For evaluating an investment avenue, the following attributes are relevant. •

Rate of return

•

Risk

•

Marketability/Liquidity

•

Safety

•

Tax Shelter

RATE OF RETURN: Investments are made with the primary objective of deriving a return. The expectation of a return may be from income (yield) as well as through capital appreciation. The dividend or interest from the investment is the yield. Different types of investments promise different rates of return. The expectation of return from an investment depends upon the nature of investment, maturity period, market demand, and so on.

RISK: Risk is inherent in any investment. Risk may relate to loss of capital, delay in repayment of capital, nonpayment of interest, or variability of returns. While some investments such as government securities and bank deposits are almost without risk, others are more risky. The risk of an investment is determined by the investment’s maturity period, repayment capacity, nature of return commitment, and so on.

SAFETY:

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Mutual fund marketing in India The safety of investment is identified with the certainty of return of capital without loss of money or time. Safety is another feature that an investor desires from investments. Every investor expects to get back the initial capital on maturity without loss and without delay. Investment safety is gauged

through the reputation established by the borrower of funds. A highly reputed and successful corporate entity assures the investors of their initial capital.

MARKETABILITY/LIQUIDITY: An investment that is easily saleable or marketable without loss of money and without loss of time is said to possess the characteristic of liquidity. Some investments such as deposits in unknown corporate entities, bank deposits, post office deposits, national savings certificates, and so on are not marketable. Investment instruments such as preference shares and debentures listed on a stock exchange are marketable. The extent of trading however depends on the demand and supply of such instruments in the market for the investors. Equity shares of companies listed on recognized stock exchanges are easily marketable. A well-developed secondary market for securities increases the liquidity of the instruments traded therein.

TAX SHELTER: Some investments provide tax benefits; others do not. They are of three kinds.

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Mutual fund marketing in India Initial tax benefit referring to tax relief enjoyed at the time of making the investment. For Eg:, when you make a deposit in a Public Provident Fund account, we get a tax rebate under section 88 of the Income Tax Act.. Continuing tax benefit represents the tax shield associated with the periodic returns from the investment. For Eg:, dividend income and income from

certain other sources is tax-exempt, up to a certain limit, in the hands of the recipient. Terminal tax benefit Refers to relief from taxation when an investment is realized or liquidated. For E.g.: a withdrawal from a Public Provident Fund account is not subject to tax.

CONVENIENCE: The degree of convenience associated with investments varies widely. At one end of the spectrum is the deposit in a savings bank account that can be made readily and that does not require any maintenance effort. At the other end of the spectrum is the purchase of a property that may involve a lot of procedural and legal hassles at the time of acquisition alIot a great deal of maintenance effort subsequently. An investor tends to prefer maximization of expected return, minimization of risk, safety of funds and liquidity of investments

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Mutual fund marketing in India FOR THE PURPOSE OF FUND MANAGEMENT TYPICALLY THERE IS: 1. A fund manager or investment manager who manages the investment decisions.

2. A trustee or board who safeguards the assets and ensures compliance with the laws and rules. 3. The shareholders or unitholders who own (or have rights to) the assets. A "Marketing" or "Distribution" company to promote and sell the fund.

NET ASSET VALUE: The Net Asset Value or NAV is the value of a scheme's assets less the value of its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.The method for calculating this varies between scheme types and jurisdiction and can be subject to complex regulation.

OPEN-ENDED FUND: An open-ended fund is equitably divided into shares (or units) which vary in price in direct proportion to the variation in value of the funds net asset value. Each time money is invested new shares or units are created to match the prevailing share price; each time shares are redeemed the assets sold match

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Mutual fund marketing in India the prevailing share price. In this way there is no supply or demand created for shares and they remain a direct reflection of the underlying assets.

CLOSED-ENDED FUND: A closed-ended fund issues a limited number of shares (or units) in an initial public offering (or IPO). The shares are then traded on an exchange or directly through the fund manager to create a secondary market subject to market forces. If demand for the shares are high they may trade at a premium to net asset value. If demand is low they may trade at a discount to net asset value. Further share (or unit) offerings may be made by the scheme if demand is high although this may affect the share price.The added element of market forces tends to amplify the performance of the fund increasing investment risk through increased volatility.

ADVANTAGES OF INVESTING THROUGH FUNDS: • DIVERSITY AND RISK One of the main advantages of investment through different fund is the reduction in investment risk (capital risk) by diversification. An investment in a single equity may do well, but it may collapse for investment or other reasons. If your money is invested in such a failed holding you could lose your capital. By investing in a range of equities (or other securities) the capital risk is reduced.

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Mutual fund marketing in India The more diversified your capital, the lower the capital risk this investment principle is often referred to as spreading risk. Collective investments by their nature tend to invest in a range of individual securities. However, if the

securities are all in a similar type of asset class or market sector then there is a systematic risk that all the shares could be affected by adverse market changes. To avoid these systematic risk investment managers may diversify into different non-correlated asset classes. If any one of the three is failing, because each is Non-correlated (i.e. behaves independently) then by logical extension at least one of the other two is doing well.

•

REDUCED DEALING COSTS:

If one investor were to buy a large number of direct investments, the amount they would be able to invest in each holding is likely to be small. Dealing costs are normally based on the number and size of each transaction; therefore the overall dealing costs would take a large chunk out of the capital (affecting future profits). Pooling your money with that of other investors means you have the advantages of buying in bulk making dealing costs an insignificant part of the investment.

DISADVANTAGES OF INVESTING THROUGH FUNDS: • COSTS The fund manager managing the investment decisions on behalf of the investors requires remuneration. This is often taken directly from the fund assets as a fixed percentage each year or sometimes a variable (performance

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Mutual fund marketing in India

based) fee. If the investor managed their own investments, this cost would be avoided. Often the cost of advice given by a stock broker or financial adviser is built into the scheme. Often referred to as commission or load (in the U.S.) this charge may be applied at the start of the plan or as an ongoing percentage of the fund value each year. While this cost will diminish your returns it could be argued that it reflects a separate payment for an advice service rather than a detrimental feature of collective investment schemes. Indeed it is often possible to purchase units or shares direct from the providers without bearing this cost.

• LACK OF CHOICE Although the investor can choose the type of fund to invest in, they have no control over the choice of individual holdings that make up the fund.

• LOSS OF OWNER'S RIGHTS If the investor holds shares directly, they may be entitled to shareholders' perks (for example, discounts on the company's products) and the right to attend the company's annual general meeting and vote on important matters. Investors in a collective investment scheme often have none of the rights connected with individual investments within the fund.

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Mutual fund marketing in India

• INVESTMENT AIMS AND BENCHMARKING Each fund has a defined investment goal to describe the remit of the investment manager and to help investors decide if the fund is right for them. The investment aims will typically fall into the broad categories of Income (value) investment or Growth investment. Income or value based investment tends to select stocks with strong income streams, often more established businesses. Growth investment selects stocks that tend to reinvest their income to generate growth. Each strategy has its critics and proponents; some prefer a blend approach using aspects of each.

TYPES OF RISK Depending on the nature of the investment, the type of 'investment' risk will vary. A common concern with any investment is that you may lose the money you invest - your capital. This risk is therefore often referred to as capital risk. If the assets you invest in are held in another currency there is a risk that currency movements alone may affect the value. This is referred to as currency risk.Many forms of investment may not be readily salable on the open market (e.g. commercial property) or the market has a small capacity and can therefore may take time to sell. Assets that are easily sold are termed liquid therefore this type of risk is termed liquidity.

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Mutual fund marketing in India

Why Mutual fund? Investment

Rate

option SAVING A/C

interest (%) 3.75

FIXED

8-9.5

DEPOSIT

of Inflation (%) 6 6

G D P (%)

DIFFERENCE

8.5

-2.25(NEGATIVE

8.5

RETURN) THE ACCOMMODATE BY

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Mutual fund marketing in India GOVT. BOND 7-8 REAL

6

30+

6

8.5

VALUE FACTOR -0.5 (NEGATIVE

8.5

RETURN) HIGH AMOUNT

ESTATE

OF

MONEY

REQURIED FOR PURCHASE KISSAN

7-8

6

OF

REAL ESTATE -1(NEGATIVE

8.5

VIKAS

RETURN)

PATRA POST

6.5-8.5

6

8..5

20-30

6

8.5

AVERAGE

OFFICE DEPOSIT MUTUAL

CHAPTER 2 RESEARCH DESIGN

METHODOLOGY / RESEARCH DESIGN Type of Study: The study at “Reliance Money” is a combination of analytical and practical study. It is based on data collected from records of the company and is administered

to

various

departmental

heads

connected

with

Fund

Management.

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Mutual fund marketing in India Types of Data: 1. Primary Data: This data was collected from discussions and interactions with respective departmental heads and clients. 2. Secondary Data: This data was collected through various newsletters, publications through researchers in the field of fund management, journals magazine reports and consolidated records from Deutsche asset management.

Sampling Plan: The sampling universe consisted of various mutual funds and their returns .

SWOT of the organization:SWOT analysis of organizations to provide recommendations on their performance and growth potential. It is a powerful tool for analyzing both complex qualitative and quantitative facets of an investment decision. The results of this analysis have been fed into marketing and organizational strategic plans and have been highly successful in strategy formulation. Through our SWOT analysis, our clients have been able to take advantage of niche markets and focus on product innovation which allows them to capture greater margins. Our SWOT analysis identifies strengths and weaknesses and relates them with forward looking opportunities and threats. This helps to identify company and industry specific critical drivers and catalysts.

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Mutual fund marketing in India SWOT Analysis identifies your company’s: Strengths - to build on Weaknesses - to cover Opportunities - to capture Threats - to defend against

SWOT Analysis Strengths: * Rich experience of the management.

Good brand equity Giving the very good return from inception * Stabilized and loyal clients. * Well combination of new energetic and experienced employees. * Wide variety of investment product to match with every level of customer * Giving the mutual fund exposure

Weakness: * Insufficient office equipments. * Not all employees have his/her cabin. * Work place (back office) is quite congested. * Not very popular in rural area

Opportunities:

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Mutual fund marketing in India * Stability through increased brand awareness, market penetration and Service offerings * Across all categories of financial services. * Increase in customer’s wallet share. * Leveraging the latest technology for providing quality and client centric Services.

Threats; * Increasing interest rate scenario. * Execution risk. * Competition from local and multinational players. * Rising inflation could reduce savings and investments

CHAPTER 3 Aim And Objective: On Job Training: 1. Empanelment: For empanelment we have to call up the IFA in the Bangalore from the data base given by the company, have to fix the appointment then have to go for empanelling them.

2. Interaction & Calling:

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Mutual fund marketing in India Had meetings with clients to check for their requirements which is based on satisfying their queries about the companies profile, schemes and it’s performance in the industry. The main work of the relationship manager is to build a strong relation between the company and the IFA, keep motivating them for giving the business to the company, assisting them to remain

updated about the market activities, as they don’t have any sources of getting the updates of the market.

3. Promotion of companies fund schemes: For this purpose we had to go out in the other branches of other banks like K.R.Puram branch of ING VISYA bank. There we have to generate the leads for selling the funds for selling team by going directly to them, explain about the schemes, benefits that they would get after investing in the schemes etc. we were mainly there for the promotion of tax saver scheme. This was the first time I was doing this thing, but I had a really good experience of talking with the existing customers of the bank. After doing the activity we learned how we can convince the people for investing in the mutual fund industry.

Other

reason for organizing such an activity was the closing financial year in which the people would require to pay the tax, and the investment in the tax saver scheme can assist them in saving their tax.

PERFORMANCE APPARAISAL: It is the activity used to determine the extent to which an employee performs work effectively. Other terms of performance evaluation include performance

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Mutual fund marketing in India review, performance rating, performance appraisal, and employee appraisal and employee evaluation.

PURPOSE OF PERFORMANCE APPRAISAL: The purpose of performance appraisal is:

1. DEVELOPMENT: It is used to find out which employee need training, helps in subordinate-supervisor counseling relation and encourages subordinate behavior to help employee.

2. MOTIVATION: It encourages initiative, develops a sense of responsibility and stimulates efforts to perform better.

3. COMMUNICATION: It serves as a basis for ongoing discussion between superior and subordinate about job related matters and thus they get to know each other better.

4. LEGAL COMPLIANCE: It serves as a legally defensible reason for promotion, transfer, reward and discharges.

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Mutual fund marketing in India

WHO EVALUTE THE EMPLOYEE? Employees can be evaluated by: 1. Committee of Several supervisors. 2. By employee peers. 3. By employees subordinate. 4. By someone outside the work environment. 5. Self evaluation. 6. By using number of approaches. The performance appraisal used by the Reliance Money” is usually done by a subordinate that is employee subordinate. The employee is rated different areas. The areas are: 1. Client interaction 2. Candidate interaction 3. Documentation 4. Job posting 5. Average CV received 6. Head hunting 7. Speed of Response 8. Client response 9. Performance against targets 10. Attitude

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Mutual fund marketing in India

11. Leadership 12. Attendance/Punctuality 13. Integrity 14. Loyalty 15. Additional areas of responsibility you would like to handle: 16. Overall rating The employee is rated of the areas and finally a cumulative sum is taken out. The employee would scored high is awarded best employee of the month (per semester) and the employee scoring low is given training for the improvement of the work.

COMPENSATION AND BENEFITS COMPENSATION: It is the human resource management function that deals with every type of reward individuals receive in exchange for performing organizational tasks. Compensation consists of pay an employee receives in form of wages, salaries, bonuses or commission.

Objective of compensation: The objective of the compensation function is to crate a system of rewards that is equitable to the employee and employer alike. The desired

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Mutual fund marketing in India outcome is an employee who is attracted to the work and motivated to do a good job for the employer. Compensation should be 1. Adequate 2. Equitable 3. Balanced 4. Cost-effective 5. Secure 6. Incentive – providing 7. Acceptable to the employee

3.1- Job profile at reliance Money: The time duration of the project is 3 months starting from 25 t h May. We were given targets to be achieved during training months. The targets of each month were: • 3Demat Accounts • 1SIP or Mutual Fund worth Rs10,000 • General Insurance Premium worth Rs50,000 • Life Insurance Premium worth Rs1,00,000

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Mutual fund marketing in India I was supposed to use the database provided by the company to make cold calls or by directly meeting people to get new leads The questionnaire used is attached in appendix A.1 While making cold calls, we need to have: • Good Communication Skills (Voice quality is clear and articulate) • Persistent and able to bounce back from rejection • Good organizational skills. • Ability to project a telephone personality (Enthusiasm, friendliness) • Flexibility: can adapt to different types of clients and new situations.

Fig6.1 The Constructive Factors of Tele calling IBMR, Bangalore.

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Mutual fund marketing in India

Using a good database is very essential. “Eighty percent of our business comes from 20 percent of our customers" is a frequent statement at any sales convention. There's hardly a sales executive who is not aware of the 80/20 rule”.

While talking to customers, I analyze their needs. Whether they want to go for investment purpose or insurance or both. Suggest them the plan that best suits them. If they agree to it then either we send across the agents to close the deal or close it themselves.

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Mutual fund marketing in India

Fig6.2 The Customers Sales Cycle

Problems faced while selling products: • Customer dissatisfied with the services.

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Mutual fund marketing in India • People fear that Reliance Money

Being a Private

company and a new entrant may be able to sustain or not. • Insurance means LIC for people. • Past experience, word of mouth. • Misguidance by agents. • People do not want insurance products. • Lack of knowledge and awareness about general and life insurance. • People risk appetite is very low, so they are afraid of mutual fund as well. • People relate the problems of mobile phones of Reliance Communication with Reliance Money.

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Mutual fund marketing in India

Customer Acquisition Process

• Educate the prospects on the products and services. • Customize

the

approach

to

each

of

the

different

customers involved in the sales process. • Establish a knowledge base for sales people, resellers and partners. • Ramp up the new salespeople more quickly and keep them on road. • Track the prospects as they move through the sales process. • Harvest other types of information from your market to help the company close business more quickly. The data of

the

prospects

can

be

used

for

research

and

development purpose. • Enabling the consistent flow of information to the customer and encouraging feedback from them. • Helping the customers do the Financial Planning for future.

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Mutual fund marketing in India

MY RESPONSIBILITY IN ORGANISATION:

I worked with Reliance money with a profile of Project trainee. This profile offers me to understand the need of the customer and provide them the best deal possible with maximization of the profit, both for the company as well as for the customer. The most important aspect for the role of financial advisor is trust. So for fulfillment of the targets one needs to: • Capitalize on old and loyal clientage which can be building slowly by advising people in the best possible way. • Generating new leads through various activities. Generation of leads: Since I was new in this field so I had to start from the scratch and generate new leads to sustain in the market. Cold calling is one of the trusted ways of getting to the customers

without

meeting

them. Although

the

rate

of

conversion remained very less. For cold calling the quality and

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Mutual fund marketing in India accent remains a very important criterion. This activity gave me mixed results. I often got success and generated many leads through it but it also landed me in awkward position where the customer were in different mood and made us hear words for which a marketer should be always prepared to hear. Corporate calls always remained more difficult to crack with respect to retail sector. The corporate were the most difficult and most tempting to get the business from. It took me one day to crack Hi-tech Gears. At Reliance money after getting the product knowledge in the first week at the branch I was also allotted distributor to work with. In the initial phase I was accompanied by more experienced staff. After I became known to the market and procedure I started attending calls alone only. After the third week my performance also improved and I was able to get close to the targets, though it looked difficult to achieve in the beginning. To get awareness of the every

product I attended diversified calls. This helped me to implement cross selling to get better results. IBMR, Bangalore.

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Mutual fund marketing in India Since the reliance money core product is Demat account more stress was given over this. Demat account was also the most tempting of all the products as it was difficult to convince the customer for the reliance Demat as it was new and with many limitations. It was always difficult to convince on 1 paisa, as it wasn’t mentioned anywhere in ink. LIMITATIONS: 1. Cold Calling • Voice and accent plays a major role. •

The right time to call a customer cannot be decided, as the customer may in a different mood at the time of calling.

• Time consuming • Less success rate 2. Corporate • Time consuming • Contacts with higher authorities play a major role

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Mutual fund marketing in India

CHAPTER 4 ANALYSIS AND INTERPRETATION OF DATA

SEGMENTATION, TARGETING, POSITIONING: Company discovers different needs and groups in the market place, targets those needs and group that it can satisfy in a superior way, and than positions its offering in a way so that target market recognizes the company’s distinctive offering and image. Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of target market. The end result of positioning is the successful creation of customer - focused value proposition, a cogent reason why the target market will buy the product.

REASON BEHIND S.T.P: A total Market can be defined as people or organization with needs, want, demand however within the total market there is always some diversity among buyers, not all consumers who drink hot drink wants tea. Similarly not all consumers who wear pants wants to wear jeans. So within the same general market there are group of customer with different needs and buying

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Mutual fund marketing in India preference. Hence a market should never commit the mistake to taking up the whole market uniformly at a time. The best way is to segment or break the

market into groups of buyers with similar needs and preference and than select the more attractive groups/segments as part of their marketing strategy.

POSITIONING: Here in the case of “Reliance Money” they did the very good segmentation, targeting, positioning in the market. They have positioned itself very well in the consumers mind by the way of attractive advertisement and excellent past record. Now Deutsche asset management a brand in the market and it’s on the consumers mind as a CASH COW

TARGETING: Here in the case of “Reliance Money”, its targeting strategy is simply superb. “Reliance Money” has basically targeting the all type of customer in every level. They have the vide variety of product range that suit for every customer.

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Mutual fund marketing in India

TABLE OF S.T.P. SEGMENT

TARGET

POSITIONING

BACHELOR

YOUTH

CREDIT

YOUTH

WHEELER- LOAN CREDIT CARD,

NEWLY MARRIED

CARD,

TWO

MUTUAL FUND, ULIPFULLNEST ONE

YOUTH

PLAN ULIP-

PLAN,

LOAN, FULLNEST TWO

MIDDLE AGE

INSURANCE,

CAR LOAN EDUCATION SAFE HEALTH

HOME-

LOAN,

INVESTMENT, INSURANCE,

EMPTYNESS ONE

MIDDLE AGE

RETIREMENT PLAN EASY GROWTH FUND

EMPTYNESS TWO

OLD AGE

FIXED DEPOSIT

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Mutual fund marketing in India Comparision of ULIPS vs MFS (India) : Below is a brief comparision of ULIP (Unit Linked Insurance Product) vs MF (Mutual Funds) specific to the Indian market.

Primary Objective: MFs: Investments ULIPs: Protection + Investments

Investment Duration: MFs: Works out for Medium term, Long Term Investors. Risky for Short Term investors. ULIPs: Works out for Long Term Investors only.

Flexibility: MFs: Very flexible. Plenty of scope to correct your mistakes if you made any wrong investment decisions. You can easily shuffle your portfolio in MFs. ULIPs: Flexibility is limited to moving across the different funds offered with your policy. Correcting mistakes can turn out to be expensive. Moving funds from one ULIP to an other ULIP of a different fund house can be expensive.

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Mutual fund marketing in India

Liquidity: MFs: Very liquid. You can sell your MF units any time(except ELSS). Some MF's like those from Reliance have introduced redemptions at ATMs. ULIPs: Limited liquidity. Need to stay invested for the minimum number of years specified before you can redeem.

Investment Objective: MFs: MF's can be used as your vechile for investments to achive different objectives. (Eg: Buying a car three years from now. Downpayment for a home five years from now. Childrens education 10 years from now. Childrens marriage 15 years from now. Retirement planning 25 years from now. Medical expenses after retirement 25 years from now) ULIPs: ULIPs can be used for achieving only long term objectives (Childrens education, Childrens marriage, Retirement planning)

Tax Implications: MFs: All investments in MF's don't qualify for section 80C. Only investments in ELSS qualify for 80C. ULIPs: Provide Tax Benefits under section 80C. MFs: Returns on equity MF's are exempt from long term capital gains tax.

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Mutual fund marketing in India (Unless tax laws change in the future). ULIPs: We are moving from EEE to EET. No clarity if ULIPs will be taxed under EET. MFs: Tax liabilities when moving across from debt to equity funds.(Returns from debt MF's are taxed.) ULIPs: Very flexible in moving between equity and debt funds(not tax implications until maturity of the policy).

Strings Attached (fine print): MFs: None so ever. At most you pay a small exit load if any. ULIPs: Some strings attached for your policy to be in effect. Minimum number of premiums needs to be paid. Minimum fund balance needs to be always maintained. (I personally don’t like policies which say pay three years premium and get insurance cover for the next 25 years since there are a lot of ifs and butts involved. A lot of assumptions made and nothing is in your hand, it could turn out your fund balance might be exhausted after just 12 years of insurance cover).

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Mutual fund marketing in India ADVANTAGES ULIPS: •

Can easily rebalance your risk between equity and debt without any tax implications.

•

Best suited for medium risk taking individuals who wish to invest in equity and debt funds(atleast 40% or higher exposure to debt). No additional tax burden for those investing mainly in debt unlike in MFs.

ADVANTAGES OF MFS: •

Better returns than ULIPs.

•

Lower charges than ULIPs.

•

Very flexible and enables you to switch your investments from non performing MF's to better performing MFs

•

Very Liquid can be redeemed at anytime.

•

Best suited for medium to high risk taking individuals who wish to invest a significant portion in equity funds(atleast 65% exposure in equities).

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Mutual fund marketing in India DATA ANALYSIS AND INTERPROTATION

1. Preference of Investment

Fig7.1

Result

of

Preference

of

Investment

Interpretation: This shows that although the mutual funds market is on the rise yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased.

2. Awareness on Online Share Trading IBMR, Bangalore.

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Mutual fund marketing in India

Fig7.2 Result of Awareness of Online Share Trading

Interpretation: With the increase in cyber education, the awareness towards online share trading has increased by leaps and bounds. This awareness is expected to increase further with the increase in Internet education.

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Mutual fund marketing in India

3. Awareness of Reliance Money as a Brand

Fig7.3 Result of Awareness of Reliance money as a Brand

Interpretation: This pie-chart shows that reliance money has a reasonable amount of Brand awareness in terms of a premier Retail stock broking company. This brand image should be further leveraged by the company to increase its market share over its competitors.

4. Awareness of Reliance Money Facilities

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Mutual fund marketing in India

I

Fig7.4 Result of Awareness of Reliance money

nterpreta

Facilities

tion: Although there is sufficiently high brand equity among the target audience yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that, the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness.

5. Satisfaction Level among Customers with current broker

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Mutual fund marketing in India

Fig7.5 Result of satisfaction level among customers with current broker

I nterpretati This

on:

pie-

chart corroborate the fact that Strategic marketing, today, has gone beyond only meeting Sales targets and generating profit volumes. It shows that all the competitors are striving hard not only to woo the customers but also to make them Brand loyal by generating customer satisfaction.

6. Frequency of Trading

Fig7.6 Result of Frequency of Trading

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Mutual fund marketing in India Interpretation: In spite of the huge returns that the share market promises, we see that there is still a dearth of active traders and investors. This is because of the non – transparent structure of the Indian share market and the skepticism of the target audience that is generated by the volatility of the stock market. It requires efficient bureaucratic intervention on the part of the Government.

7. Percentage of earnings invested in Share Trading

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Mutual fund marketing in India Fig7.7 Result of percentage of earning invested in share trading

Interpretation: This shows that people invest only upto 10% of their earnings in the stock market, again reiterating the volatile and non-transparent structure of the Indian stock market. Hence, effective and efficient steps should be undertaken to woo the customers to invest more in the lucrative stock market

FINDINGS: • To find the market potential and market penetration of Reliance Money product offerings in Bangalore • To collect the real time information about preference level of customers using Demat account and their inclination towards various other brokerage firms e.g. Indiabulls, Sharekhan, Indiainfoline, Religare, Alankit, and Unicon. • To expand the market penetration of Reliance money. • To provide pricing strategy of competitors to fight cut throat competition. • To increase the product awareness of Reliance money as single window shop for investment solutions.

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Mutual fund marketing in India

CHAPTER 5 CONCLUSION AND RECOMMENDATION

RECOMMENDATIONS Based on the findings of our project we would like to suggest the following:-

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Mutual fund marketing in India • After sales services and follow up calls are important for getting new references so trained telesales should be appointed for this purpose whose sole work should be to make feedback calls. • Reliance is having too many financial products right from Demat account to General Insurance and not all the salespeople are familiar with each and every product so the work force should be segregated each group dealing in a specific product and the sales target should be given likewise. • While interacting with the investors I found that most of the customers are unaware about the Mutual fund. Some of the people look upon mutual funds and equity trading as gambling. Thus a

• mutual fund awareness program can help to increase the penetration of mutual funds in the market. • Reliance should declare in black ink that they will charge just 1 paisa per transaction. People tend to think that there must be some hidden charges. • Rs750 account opening charges are too high when targeting a corporate so the company should be flexible on this amount.

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Mutual fund marketing in India • Reliance should provide periodic training for updating the product knowledge of various financial advisors. • Company should have a scheme of rewards and recognition to employees and the field persons to boost their motivation.

KEY ISSUES AND CONCLUSIONS Based on the above SWOT analysis and study of the available data I have come to the following conclusions: HUGE POTENTIAL: • All though relatively new entrants in the market, Reliance is slowly

• but surely gaining a strong hold because it is finally able to grasp • the investment climate in Delhi. Secondly the branch managers at all the branches are very knowledgeable with a lot of experience in the financial markets so under their leadership can definitely expand its base • The entire workforce consists of mostly youngsters, which means they can be encouraged and motivated to do good work because they have a long way to go and most of them are eager to climb the ladder. IBMR, Bangalore.

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Mutual fund marketing in India • Right now Reliance is at its nascent stage and will surely grab the major market under its belt very soon like in other fields.

Huge investments taking place: • The Stock Market has been very buoyant until now especially in the past 3 years. This particular trend is very favorable because a soaring SENSEX means higher returns, which encourages the investors to invest their money in the market. Although in the past •

• 3 months the market has shown very unpredictable trend and has already lost over 1000 points. • So in order to make the best the only thing required is to recruit more field staff who should be trained in a proper way to get better results. • In case of insurance, it requires push selling because people always associate it with emergencies and unpleasant situations like death and they don’t want to think about such situation let alone prepare for them, which means it requires a lot of conviction on part of the executives. IBMR, Bangalore.

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Mutual fund marketing in India

Large untapped market: • People have just opened up to the idea of ULIPs because till now they knew only two kinds of insurance plans, endowment and term plans so the concept of high returns with protection is very new to them and slowly and slowly these are becoming popular so there is a huge market waiting to be tapped.

• In the past few years there has been a tremendous inflow of funds in the Indian market which has lead to the sky rocketing SENSEX. In fact there has been a tremendous response from the investors not only in shares but mutual funds as well. The Rs5700Cr infused in the market through the Reliance Equity mutual Funds is an example of the growing trust of investors who earlier shied from such investments due to stock market fiascos like the Harshad Mehta scam or the US64 disaster in which investors lost huge amounts of money as well as their trust in financial instruments.

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Mutual fund marketing in India With the FDI limits being relaxed, a lot of avenues will open up in the insurance sector and insurance companies are expected to come up with new plans with a great deal of customization and flexibility

QUESTIONNAIRE

QUESTIONNAIRE Q1. In which of these Financial Instruments do you invest into? Shares Mutual Funds Bonds Derivatives Q2. Are you aware of online Share trading? Yes No Q3. Heard about Reliance money? Yes No Q4. Do you know about the facilities provided by Reliance money?

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Mutual fund marketing in India Yes No Q5. With which company do you have your DEMAT account? Reliance money ICICI Direct Kotak Mahindra India Bulls Others (please specify) Q6. What differentiates your Share trading company from others? (in regards of brokerage, satisfaction, services, products )

Q7. Are you currently satisfied with your Share trading company? Yes No Q8. How often do you trade? Daily Weekly Monthly Yearly Q9. What percentage of your earnings do you invest in share trading? Up to 10% Up to 25% Up to 50% Above 50% Q13. How do you rate these share trading companies? a. Reliance money 1. 2. 3. b. ICICI Direct c. India Bulls 4. 5.

d. Kotak Mahindra Others (Please Q14. What more facilities do you think you require with youre. DEMAT specify) account?

Personal Information

Name: Age: Sex: Phone No: Occupation:

IBMR, Bangalore.

Male

Female

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Mutual fund marketing in India

BIBLOGRAPHY • Agarwal, J.D. "Security Analysis & Portfolio Management: A Review, Finance India, Vol. II No. 1, March 1989. • Bhatt, V. V. "An Appraisal Of Some Recent Estimates Of Savings and Investments", ICRNI, Vol. 5, 1963. • Douglas A. Hayes and W. Scott Bauman "Investments: Analysis and Management" III Ed., 1976, MacMillan • Malhotra, Naresh "Marketing Research and Applied Orientation" IV Ed., 2005, Pearson

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Mutual fund marketing in India

REFERENCES

•www.mutualfundsindia.com •www.easymf.com •www.amfiindia.com •www.google.com •www.moneycontrol.com •www.reliance capital.ac.in •www.reliancemoney.com

[email protected]

IBMR, Bangalore.

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Mutual fund marketing in India

”MUTUAL FUND INVESTMENT IS SUBJECT TO MARKET RISKS. PLEASE READ THE OFFER DOCUMENT CAREFULLY BEFORE INVESTING”

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Mutual fund marketing in India

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