SALES STRUCTURE Assignment Sales Force Management
Prepared by: M.Tanzeel-e-Rahman M.Tanzeel-e-Rahman Khan Submitted to: Mr. Husnain Naqvi
SEPTEMBER 9, 2015 SUPERIOR UNIVERSITY Lahore, Pakistan
Topic: Analysis and comparison of sales force structure of foreign and local banks.
1 BANKING IN PAKISTAN Banking in Pakistan first formally started in Pakistan during the
period of British colonialism in the South Asia. After independence from British Raj in 1947, and the emergence of Pakistan as a country in the globe, the scope of banking in Pakistan has been increasing and expanding continuously. Pakistan's oldest bank is the State Bank of Pakistan, which is also the central bank of the nation. Before independence on August 14, 1947, the Reserve Bank of India was the central bank of what is now Pakistan. After independence, Muhammad Ali Jinnah took actions to establish a central bank in Pakistan which resulted in the new founding of the State bank of Pakistan, with its headquarters to be based in Karachi. Only 7% of the population uses the banks, has tremendous potential, but this needs to be pushed a little further.
2 LIST OF BANKS IN PAKISTAN
2.1 GOVERNMENT-OWNED SCHEDULED BANKS
National Bank of Pakistan Bank of Khyber Bank of Punjab First Women Bank Sindh Bank
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2.2 SPECIALIZED BANKS
Industrial Development Bank Zarai Taraqiati Bank Limited
2.3 COMMERCIAL BANKS
Allied Bank Limited Bank AL Habib Bank Alfalah Askari Bank Faysal Bank HBL Habib Metropolitan Bank JS Bank KASB Bank MCB Bank Limited NIB Bank Samba Bank Limited Soneri Bank Summit Bank United Bank Limited
2.4 DEVELOPMENT FINANCE INSTITUTIONS
Asian Housing Finance Limited
2.5 FOREIGN BANKS
Deutsche Bank AG Industrial and Commercial Bank of China Limited Citi Bank Standard Chartered Pakistan
2.6 ISLAMIC BANKS
Meezan Bank Limited Al Baraka Bank Bank Islami Pakistan Limited Burj Bank Dubai Islamic Bank
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2.7 MICROFINANCE BANKS
Khushhali Bank Limited NRSP Microfinance Bank Tameer Microfinance Bank Limited Waseela Microfinance Bank Limited
Banking Industry is one of the most important service industries which touches the lives of in millions of people. Its service is unique both in social and economic points of view of a nation. Earlier the attitude of banking service was that it was not professional to sell one's services and was unnecessary in the sense that traditional relationships and quality of products were sufficient to carry forward the tasks. Before the mid 1950's the banks had no understanding or regard for marketing. The bank building was created in the image of a Greek Temple to impress the public about the importance of a bank. The interior was austere and the teller rarely smiled. Bankers maintained austere dignity and they hardly maintained friendliness.
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3 COMMON SALES HIERARCHY OF BANKS IN PAKISTAN
Managing Director (Karachi)
National Sales Head/ Director (KHI) Director Sales Force manager (KHI)
Regional Head (North)
Regional Head (South)
Zonal Head
Zonal Head
(Provincial and other Zones)
(Provincial and other Zones)
City Sales Manager
City Sales Manager
Area Sales Manager
Sales Manager
Sales Executive
Area Sales Manager
Sales Manager
Sales Executive
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4 OPERATING STRATEGY OF LOCAL AND INTERNATIONAL BANKS COMPARISON The national sales and business is usually located in banks head offices and they operate and regulate the nationwide sales of the banks and they keep monitoring on all the nationwide strategies of sales force in all cities. They are the ultimate strategists for banking sales in Pakistan. Both the international and local banks have almost the similar sales hierarchy and distribution of authority. They have complete communication with all the personals and offices through emails, letters, and conferences on weekly, monthly, quarterly and annual bases. After them they main executioner of sale strategies are zonal heads. They are responsible for all daily execution and direction of plans for the achievement of organizational objectives. They are responsible for all the reporting to the head office (KHI). It is there responsibility to monitor all the decorum’s and appraisals. They create daily, weekly, monthly and yearly targets for the sales team and they are the main guiding authority for the sales force team. It is quiet similar structure in both international and local banks. In local banks the sales executives do not operate in strictly formal team they often work individually for their daily sales activities while on other hand international banks follow more professional strategic team format, which involves sales executives working in teams. In local banks the sales executives do not enjoy office setup facilities, they often do not have their own offices. But they are more active in their own favorite areas which are mostly those area to which they belong themselves. The sales executives in local banks have more vigilance levels then the international banks. In international formats the sales teams are bound to different be Sales executives in local banks work on leads and references to approach customers. While on other hand the sales executives in international banks operate on tagged profiles of customers as sales targets. For example they are given with a directory of tagged profiles, let’s say profiles of 100 targeted profiles and they are responsible to work on these 100 customers and sell them services. The approach strategies differ from international banks to local banks. International
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banks have more formal structure for approaching customers but local sales executives try their best to make the sale happen even if he has approach in more informal manner on basis of references and other positive leads. For high profile customer local banks sales department can also form teams to approach the customers accompanying the area manager, branch manager and even the directors as well to convince the customers. These sales executives are often called as business development officers and managers.
5 R OLES AND DUTIES OF SALES EXECUTIVES OF LOCAL AND INTL. BANKS The banks create teams of young and talented ma rketing individuals who have flair for sales and marketing, they are entrenched in local communities and they enjoy interacting with people. They are permanently appointed on these positions and as regular work employees of the bank. Their main Responsibilities are:
Represent the bank in the market in professional manner.
Achieve new account opening targets.
Achieve deposit mobilization targets.
Attrition management for accounts and deposits.
Looking over the liabilities
Managing assets for clients
Loans & financing.
Other team targets
They are operate in areas and are not necessarily attached to single branch. They have universal I’Ds so that they can access their professional accounts from any branch in a single area. The sales personals also given with extraneous tasks like cross selling, and special deposits. Upon which they receive their appraisals and promotions. The differences in local banks and international banks is that the sales personals do not enjoy any authorities for their daily tasks they cannot offer any thing extra. Sometimes the area mangers can allow them some flexibility 6
on his own behalf but to only senior and more experienced sales executives. While international banks sales executives enjoy certain level of flexibility to close the deals with more customized offerings for the customers.
6 STRENGTHS & WEAKNESSES IN SALES OPERATIONS OF BOTH LOCAL AND INTERNATIONAL BANKS Using a panel data of over 1,600 banks in 100 emerging economies, we identify the strengths and weaknesses of the dominant organizational designs in emerging markets. Private domestic banks have an advantage in lending to “soft information” firms which allows them to lend more, and at higher rates without substantially higher default rates. On the other hand, foreign banks have the advantage of access to “external liquidity” from their parent banks which lowers their deposit cost. The external support however comes at the cost of foreign banks being limited (presumably by the parent banks) to only lend to “hard information” firms. Whereas foreign and private domestic banks have their own comparative advantages and disadvantages, we find that government banks perform uniformly poorly, and only survive due to strong government support. The trainings and career development policies are up to the mark in both local and international banks and none of these fall short in this sections. They are provided with adequate trainings and career development opportunities. They are regularly updated about all the changes and system updates and are trained accordingly. They also have timely meetings with the area manager about the next developments and strategies.
7 OTHER DIFFERENCES IN THE SALES STRUCTURES OF LOCAL AND INTERNATIONAL BANKS . There are many significant contrast factors like the local banks have nice appraisal and incentives but due to large nature of international operations in Intl. Banks they tend to offer better incentives for the performance of the employees. Their organizational structure in international perspective is quiet different, they have more complex hierarchical structure, because they are connected with management which can be located in other countries and they have their main head quarter in other countries and all the reports are also being monitored by these head offices. The main long term strategies are directed by these international offices. On other hand the local banks are older and 7
they already have a reputation in their countries and they have more established customer base then the international banks. The local banks due the nature of their operations and networks of contacts in the local market they enjoy more ability to easily lend loans and do more business in the market while on other hand the international banks can not follow these aggressive strategies. But international banks have advantage over the local banks when it comes to credit ratings due to support from the vast business they own worldwide, similarly they have more negotiation power due to their vast influence. In case of local banks they have limited resources to back their established credit rating.
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