“One Art” by Elizabeth Bishop Essay

In her poem, â€Å"One Art,† Elizabeth Bishop constructs a poem that reveals a struggle with mastering the issue of loss. Through the use of a villanelle, Bishop utilizes the significance of structure and word choice to further the meaning of her work. Bishop crescendos each stanza to create a firm foundation for the dramatic conclusion, and incorporates expressive words throughout the poem to illuminate the last stanza’s attitude shift from that of carelessness to seriousness. The villanelle form is a type of love poem and Elizabeth Bishop’s use of this is appropriate for her poem about lost love. The first five tercets (three lined stanzas) begin by speaking of small objects (keys) then grow to large items (continents). The final stanza is a quatrain (four lined stanza) that contains the occasion and attitude shift of the poem. The poem’s first line â€Å"the art of losing isn’t hard to master† resurfaces throughout the text to reiterate the speaker’s opinion on the mastery of loss. And the repetition of the third line’s final word â€Å"disaster† is a key to the meaning of the poem. Bishop’s word choice furthers the significance of loss and love throughout the poem. Since the first and third lines repeat within the text the middle lines of each stanza remain different from each other. The endings of each middle line have the same rhyme pattern and collectively they spell out an ultimate loss-† intent†/ â€Å"spent†/ â€Å"meant†/ and â€Å"went.† The speaker, in the beginning, is impersonal and does not mention any valuable item which was lost. In the second stanza the speaker explains how to master the art of loss, and urges the readers to practice, making it a habit: â€Å"Lose something every day (line 4).† The â€Å"lost door keys, the hour badly spent (line 5)† become materialistic entities and lost time. The third stanza contains a dynamic list of uncontrollable loss. By choosing the phrase â€Å"losing farther, losing faster (line 7),† Bishop illustrates movement in time, ultimately symbolizing loss. The simple shift from the third stanza to the fourth allow for a more personal touch to the poem with the addition of the word â€Å"I.† Bishop chooses the â€Å"mother’s watch† to symbolize time and the link between generations. The lost watch makes tangible the feeling of inevitable loss. The speaker also sequences her losses- â€Å"my last†/ â€Å"next-to-last.† Stanza  five is the final tercet that includes materialistic items lost by the speaker. The loss of spacious and lavishing objects such as â€Å"cities†/ â€Å"realms,† â€Å"rivers,† and â€Å"continents† can not compare to the feelings the speaker acquires from the loss of love in stanza six. The final stanza, the quatrain, contains an attitude shift from that of invincibility to somberness. By implementing â€Å"you,† Bishop transformed the poem into a personal piece by breaking away from the pattern of inanimate objects and incorporating an actual being. Although the tone is of a more personal nature the details are still muffled. The parenthesis around â€Å"(the joking voice, a gesture/ I love)† creates a caesura for the reader, allowing a pause before confronting the uncertainty of the last lines. The first line refrain varies its form in line eighteen with the addition of the word â€Å"too† which seems to second-guess the original assertion that loss â€Å"isn’t hard to master.† And in the closing line the repetition of â€Å"likes† postpones the final word that the speaker is so hesitant to admit-â€Å"disaster.† The parenthetical statement â€Å"(Write it)† is a self-prompt that conveys the energy needed to actually allow the word â€Å"disaster† to be recognized. By putting it in writing the speaker is accepting the fact that they have not yet mastered the art of loss. Bishop’s use of the villanelle form and strong word choice collectively work together to illustrate the speaker’s private sorrows over a lost love without including a self-pitied tone. The poem reveals a struggle for mastery that will never be attained. One does attempt to master loss but the recognition of powerlessness may be a more efficient method to tame loss.

Images in Lord of the Flies by William Golding

An image is a representation of something that is portrayed to make the reader visualize a different impression in its place. Images can be seen, heard, smelled, tasted, or felt. There are many images used in Lord of the Flies by William Golding. Simply put, fire is a major image that has multiple meanings in the novel. The object that gives the title to the novel is also one of the most important image. The pigs head/Lord of the Flies is full of relevance towards the book . Finally, the image of the conch is quite important. These images have crucial meanings that are necessary to the plot of the novel. Fire is something that is normally used for cooking and as a light, however in the novel its main purpose is as a signal fire to attract the attention of any passing ships so the boys can be rescued. The Fire is the boys connection with civilization, as long as it is burning there is a hope that they would be rescued. The fire, or lack of fire, is first major tension between Ralph and Jack. The fire is let out when all the hunters go off with Jack to spear a pig. Meanwhile, Ralph watches a ship go by the island without stopping because there is no smoke visible. You let the fire out† (73) was all that Ralph had to say to Jack to tell him that he blew a chance to get rescued and that only way they will ever get saved is if there is a fire burning on the island. Ironically, it is a fire that solves both problems started by Jack letting the signal fire die. â€Å"Smoke was seeping through the branches in white and yellow wisps†. (216) The smoke was from the fire started by Jack to flush Ralph out of the thicket he was hiding in so he could kill Ralph and put his head on the stick sharpened at both ends. Ralph managed to evade Jack's trap and run into the forest while the fire continued to grow in size. The hunters entered the forest and forced Ralph back to the beach where he runs into the only adult in the novel. â€Å" We saw your smoke†(223) said the navy officer who is saying that the fire is the reason that they found the boys. When asked who is the boss, Ralph confidently says â€Å" I am† (224) officially ending the feud between him and Jack. Without fire the boys would not have been rescued and Ralph would have never gotten any of his previous power back. The pigs head was left as an offering to the beast by Jack and the savages. It is described as â€Å" †¦. grinning amusedly†¦ † (151) with â€Å" †¦ white teeth and dim eyes†¦ † (152). The pigs head is most likely the most important image in the novel. When Simon has his one way conversation with the Lord of the Flies, it took the place of the pigs head and it implemented two important things. â€Å" I'm part of you †¦ why things are what they are†¦ † (158). When the Lord of the Flies says this, he is telling Simon that the beast is inside of everyone and it is the evil in their hearts that is making them savages. The pigs head also tells Simon as â€Å" a schoolmaster† (158) that he is going to have some â€Å"fun† with Simon. This simply foreshadows Simon death in the next chapter. The Lord of the Flies represents the beast and all the evil in the boys stranded on the island. Found on the beach near the start of the novel, the conch shell is an image that represents many concepts. The conch represents structure and democracy. â€Å"We can use this to call the others. Have a meeting. They'll come when they hear it. (12) When the conch is blown it allows the boys to come together in a civilized manner to decide what they should do. â€Å" Then I'll give him the conch †¦ he can hold it when he's speaking† (31). This idea by Ralph created a way to govern meetings in a democratic way where everyone could speak their mind. Throughout the novel the conch slowly begins to lose its power over the group of boys as they become more like savages. Once Jack starts breaking the rules, chaos starts to occur as the boys disregard the conch. This shows that without the boys giving the conch power, structure and discipline will soon be no more. Eventually, when the boys split into different tribes, the conch has no importance because most of the boys have now become savages. â€Å"†¦ the conch exploded into a thousand white fragments and ceased to exist† (200). When Roger pushed the rock down the hill to murder Piggy, the conch was in his hands. When it blew apart it signified the end of democratic power ever coming back to the island and represented when government does not always work. Without the conch, structure might not have been established and instead of being civil the boys might have turned into savages very early in their stay on the island. In the Lord of the Flies by William Golding, the images are necessary to the plot of the novel. Without fire, the pigs head, and the conch; the boys might have not got rescued. Jack and Ralph may have not had the same bad blood between them. They may have not been as evil or savage-like, and possibly they may have turned into savages very soon after their plane crashed. Think of all the different endings possible if some of these key images were changed.

English Writing Essay Example | Topics and Well Written Essays - 500 words

English Writing - Essay Example The only choices are to ride on it, to suppress it or subvert it. In my case, I have usually been fortunate enough to be able to ride on it. Since my early childhood at study or play I have always been the popular choice whenever the question of leadership came up. I could always be counted upon to start off with things that hadn't been done before and soon have a bunch of other people happily doing the same. A few disagreed, of course, but I was frequently able to win them over, sooner rather than later. I have always been seen as fair, capable and full of common sense. Being a leader has thus become a second nature to me, and my passion. Nothing pleases me more than being able to chart a course for a worthy cause. When I joined school a year back, I was immediately intrigued with the prospect of establishing an International Business Club, the environment seemed ripe for one. I threw up the idea at different forums, and got a positive response. With that vote of confidence I threw all my energies into putting together a club that would harness the potential of students while providing a positive platform for interaction. In the beginning I had few takers for the idea, some thought it was too ambitious, others found it impossible. But I held on, tackling tonnes of club paperwork while still coming to grips with studies.

Reaction paper on the documentary called The corporation Essay

Reaction paper on the documentary called The corporation - Essay Example These are just a few of the mind games businesses use as bait to catch the big fish in a sea of high-potential buying power of consumers today. With this said, understanding what goes into the process of the â€Å"prey-predator† in the business kingdom & how the predator uses temptation to blur the lines between â€Å"needs† and â€Å"wants† is crucial for everyone as consumers to know when to take a bite and when to commit to a non-indulgent fast. The Corporation documentary written by Joel Bakan and directed by Mark Achbar and Jennifer Abbott shows they are up to one thing in producing this material – to breach into the politics of the pursuit of power and profit of businesses today. First of the points this documentary has tackled that is worthy of notice would be the difference in the business environment before and today. In the past, all that a business would pursue would be to breakeven from the cost of operating the business and earning beyond that was considered a bonus. However, contemporary businesses today, I believe spend half the time minding their own business and the other half monitoring their competitors’ moves and constantly on the lookout for events that they could use to benefit them. Just like dirty politics as we call it, there are a lot of hidden secrets to the success and downfall of business tycoons. Some of the well-kept secrets that have been revealed by this documentary would be the reality of the bargaining activities of corporations to fight for their rights that human beings alike enjoy, the business hoax against the United States President Franklin Roosevelt, the suppression of a news-worthy story of a television station so they could protect certain parties affiliated to them, and the most trivial among all would be the alleged involvement of IBM in the historical Nazi holocaust that destroyed so many lives (Bakan, J.). Indeed, what can be a matter of just being provided quality products and s ervices for consumers like us could come from controversial undertakings waiting to be avenged. The second point that awakened my cognizance was when the writer of the documentary tagged corporations today as either being a person or a psychopath (Bakan, J.). It was for me automatic to comprehend how corporations are so much like people. They have rights to intellectual property, tangible properties, properties that are backed up by contracts and trusts which a company could always fight for to propel a peaceful and at the same time speedy development of their business. Aside from that, just like people, corporations have certain needs that would smoothly fit Maslow’s hierarchy – Physiological needs that pertains to legal documents, capital, manpower, & goods needed before they could start operating the business; Safety from market-reach-devouring competitors; The need for belongingness in a certain business category, being fully equipped for competition; Achieving utm ost self-esteem by being top of mind of not only one’s chosen target market but including those that are not; And lastly, the highest would be self-actualization where competitors’ moves does not directly affect one’s business performance anymore. However, what is naked to consumers’ eyes would be when corporations start being a psychopath. This could be

Buyer behaviour mkt 2240 Essay Example | Topics and Well Written Essays - 3000 words

Buyer behaviour mkt 2240 - Essay Example "If a marketer can identify consumer buyer behaviour, he or she will be in a better position to target products and services at them. Buyer behaviour is focused upon the needs of individuals, groups and organisations." (Consumer Buyer Behaviour. 2007). Buyer behaviour is a result of the needs of the consumers. The behaviour of a buyer is his urge to satisfy his needs. The needs of a human being are classified into five by Abraham Maslow. The classification of needs by Maslow is Physiological, Security, Social, Esteem and Self Actualisation needs. According to him physiological need that is the need to satisfy his basic requirements such as food, water, cloth and shelter is the first need of a person. After that the need for safety arises and then the social, esteem and self actualisation needs arises. He says that person will show the urge for a particular need only when his lower level need is satisfied. There are also various other theories that speaks about buyer behaviour. There are many factors that constitute the behaviour of the buyers. Those factors are personality, culture, social groups, perception, attitude, social classes, reference groups etc. The needs of a person and the factors that affect the buyer behaviour are very closely related. If the marketers are really aware of what the needs of the consumers are they can launch their product in the market without any risk of slow movement of goods in the market. A careful and detailed market research will help the companies to understand the behaviour of the buyers properly. The basic motive behind all the buyer behaviour is to lead a better lifestyle. This research work looks into buyer behaviour on a different perspective. Here the interest of the persons for different modes of transport is studied in order to examine the different buyer behaviours. For this purpose of a sample of families from various background is taken to understand the factors that constitute various behaviours. The behaviour of the family is analysed on the basis of ego, attitude, reference groups, personality, attitudes, social classes and personality. Mode of transport is a good means to study how the behaviour of various persons changes at different situations. The choice of the mode of transport generally changes on the basis of the financial background and social status of the persons. Influence of the group that one belongs will also have very good influence on the choice of the mode of transport. Age is also a factor that leads to difference in the choice of mode of transport by different persons. Above all the ego of a person also influences his choi ce of the mode of transport. The different theories that are related to buyer behaviour are seen in brief in this report. Then the different factors that lead to the behaviour of the buyers are seen. After carefully analysing those factors and theories it is integrated into the case of the chosen families to study how the buyer behaviour and the choice of mode of transport are interrelated. Brief accounts of the demographic element of the families are also given later on in the report. Literature framework The main theory that explains the human needs and buyer behaviour theory is Abraham Maslow's 'Need Hierarchy Theory'. Abraham Maslow classified human needs into 5 levels. Beginning from the lower level it is classified as

Compare and contrast the transport planning models for passenger and Research Paper

Compare and contrast the transport planning models for passenger and freight transport - Research Paper Example Through such  information estimates are made about the effect of new  developments on  the amount of required  parking space and local  traffic volumes (Litman, 2012). Economic models focus on identifying  and comparing  the benefits  of certain  transportation improvements, like  the advantage  of expanding  a roadway or  improvement in public transit service.  They endeavor to  compare multifarious  classifications  of benefits and costs. They concentrate on  a comparatively  limited set of advantages.  For instance  they  often overlook  vehicle ownership cost savings and parking considerations that arise  due to  switching of travelers  from automobile travel to other  modes (TRB-Transportation Research Board). These models aim at anticipating the impact of  transportation improvements on land use patterns like the kind of  location and  development that  will evolve as a consequence of  improvement of  highway or transit service.  These are deemed to be  the best tools for analyzing  transportation programs and  policies (Litman, 2012).   The purpose of these  models is to  predict the effect of certain  vehicle  transport policies and projects on  fuel consumption  and pollution emissions. However  it is observed  that  traditional models mostly underscore  emission reductions and expansion of roadways while they  undermine  TDM strategies (Slack, 2013). Transport planning models for freight transport  focus more  on quantitative factors like  operating costs,  travel speed  and crash rates etc while planning models for passenger transport give more consideration to  qualitative factors like  travel convenience,  security and comfort of passengers (Slack,

Summaries Assignment Example | Topics and Well Written Essays - 250 words - 3

Summaries - Assignment Example s, the Canada natives argue that people settled in northern America due to a land bridge created by water being blocked by glaciers, which led to the increase in the level of ocean later forcing them to migrate to higher grounds. The land bridge thus formed the first settlement area for these people. Archaeology suggests that the people of Canada practiced the marine culture. These people moved to the north during spring and summer to obtain certain resources and then they would return South during winter (Nelson, 2006). These people came to settle in the North, along the coast due to the warm climate, and they started families, thus increasing their numbers. The Shield Culture is believed to have originated from the Plano culture. This culture brought together many bands of communities together (Nelson, 2006). This led to intermarriages between these different bands. It is clear from the discussion above that the origin of groups of people was dependent on their social activities. These include the Shield Culture, and their economic activities such as hunting and nomadism. In addition, they were determined by natural calamities like the floods. Different groups practiced various activities as

Business Continuity Plan Assignment Example | Topics and Well Written Essays - 1000 words

Business Continuity Plan - Assignment Example The plan formulated and implemented is specifically designed for the White House security staff. The staff is meant to ensure security of the White House is not breached. Plan Scenario Numerous possible scenarios may interfere with the security and normal functioning of the White House. Some of them may include: 1.Natural Calamities Examples include: Floods and Storms 2.Inadequate employees The inadequacy may be due to sickness and injuries, staff strikes or go slows, resignations and retrenchments. 3.Security Breaches Possible incidences include: intruder invasion, cyber-attacks and loss of data and hostile invasion among others. 4.Deficient Infrastructure Possible incidences include power outages, network outages and telecommunication equipment breakdown. Plan assumption The following assumptions will be made subsequent to the implementation of this policy: 1.Sufficient security personnel will be available at any given time at the expected assigned posts 2.An appropriate evacuation procedure will be in place in the event of possible security breach and onset of natural calamities. 3.Backup power generators and network boosters will be available at any particular moment. In the departments not affected, power and network should be maintained. 4.A data breach response team equipped with up to date strategies should be available when needed. Plan Section Recovery Strategy Summary The strategies to be undertaken are expected to neutralize the consequences of the scenarios.

Script for radio news report Essay Example | Topics and Well Written Essays - 250 words

Script for radio news report - Essay Example It is an all rounded topic that is touching on the current situation in Singapore’s social and political life. THOUSANDS OF SINGAPOREANS THRONGED THE STREETS TODAY IN CELEBRATION OF SINGAPORE’S FORTY-NINTH BIRTHDAY. THE EXCITEMENT IS ALMOST TANGIBLE AMONGST THE PEOPLE WITH A NUMBER OF PERFORMANCES SET FOR THESE CELEBRATIONS. DOZENS OF SINGAPORE CITIZENS HAVE TAKEN TIME AWAY FROM THEIR DAILY ROUTINE TO CELEBRATE THE COUNTRY’S INDEPENDENCE DAY. THEY HAVE CONVERGED IN THE STREETS AS A SHOW OF THEIR PRIDE IN THE STEPS TAKEN BY THE COUNTRY SINCE IT GAINED INDEPENDENCE. ALTHOUGH THEY ARE CONSIDERED TO BE THE LEAST POSITIVE PEOPLE, A MAJORITY OF THE SINGAPOREANS WE INTEEVIEWED ARE VERY PROUD OF THE STEPS THAT THIS COUNTRY HAS TAKEN SO FAR. SOME FEEL THAT THE GOVERNMENT HAS TAKEN ENOUGH STEPS IN ENSURING THAT THE PEOPLE RECEIVE THE BEST SERVICES FROM MOST PUBLIC OFFICES. WHILE A FEW SINGAPOREANS FEEL THAT THE GOVERNMENT IS YET TO ATTAIN ITS FULL POTENTIAL, MOST ARE HAPPY WITH THE STEPS TAKEN SO FAR. AT THE MOMENT, ALL THAT SINGAPOREANS ARE LOOKING FORWARD TO IS AN ULTIMATE BIRTHDAY FOR THE

Applying Balanced Scorecard Assignment Example | Topics and Well Written Essays - 250 words - 1

Applying Balanced Scorecard - Assignment Example First, a balanced score card can be used in the financial category to help evaluate information on key financial performance measurements. Such measurements include: risk assessment analysis and cost and benefit analysis. Secondly, a balanced scorecard can help the organization assess their performance when it comes to the business process. A business scorecard gauges how a company is running when compared to the organization’s mission. As far as the learning and growth perspective of an organization is concerned, a company can evaluate its performance using two measures. First, the availability of trainers and mentors in an organization and secondly, the availability of help if needed by the employees. In the customer category, metrics on evaluating a customer’s satisfaction are crucial in monitoring the organization’s performance. In this category, questionnaires can be used to evaluate customer’s satisfaction. Customer complaints should also be checked, as this will definitely have an impact on future business

Environmental Issue Essay Example for Free

Environmental Issue Essay The current concern of our environmentalist nowadays is how to bring back the bountiful natural resources of our venue of living before. This is just a dream but this can be true because nowadays everything is possible. It is, indeed, a great challenge of this environmentalist to provide solutions of the problems manifested in our environment. Before presenting my arguments, I would like first to secure the parameters of this debate. I limit this debate to one of the hottest issues in the environment which is Air Pollution. Air Pollution is the human introduction into the atmosphere of chemicals, particulates or biological materials that cause harm or discomfort to humans or other living organism. Looking at the status quo, it is obscene that there are a lot of sources that made our air contaminated. First point, I content that the severity of catastrophe happened in our environment deeply rooted from anthropogenic sources (human activity) such as â€Å"Stationary Sources† as smoke stacks of power plants, manufacturing facilities and municipal waste incinerators. â€Å"Mobile Sources† as motor vehicles, aircraft etc., marine Vessels such as container ship or cruise ships and related port air pollution, burning wood, fireplace, stoves, furnaces, fumes from hair spray, varnish, paint, aerosol spray and other solvent, oil refining and industrial activity in general. These things respond the question of why our air is being contaminated. Second point, I would like also to argue that the government plays a vital role in protecting our environment. The government has the prowess to make some possible and practical solutions of environmental problems. They have enough budgets to initiate some activity and project that would cater the protection and preservation of our natural resources. To sum up my arguments, first the main problem is the human activity that deteriorates our environment and second is the irresponsible action of the government. We can make a difference as by letting ourselves as an example because change starts in ourselves. http://en. wikipedia. org/wiki/Air_pollution#Sources This page was last modified on 22 March 2008, at 18:53. All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details. ) Wikipedia ® is a registered trademark of the Wikimedia Foundation, Inc. , a U. S. registered 501(c)(3) tax-deductible nonprofit charity.

Customer Relationship Management of Lloyds Banking

Customer Relationship Management of Lloyds Banking 1.0 INTRODUCTION This chapter provides the brief introduction of research. Furthermore, it also discusses the aims, objectives of the research questions and scope of the study. 1.1 TOPIC OF THE RESEARCH Customer Relationship Management of Lloyds Banking Group PLC; A Critical Evaluation 1.2 INTRODUCTION TO RESEARCH Peter Drucker said, â€Å"The purpose of a business is to create customers†. Customer Relationship Management can be the single strongest weapon we have as manage to ensure that customers become and remain loyal. Customer Relationship Management, or CRM, is an essential part of modern business management. CRM concerns the relation between the organisation and its customers. Customers are the lifeblood of any company be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers. CRM is the same in principle for both examples. Globalization and technology improvements have pushed companies into hard competition. In this new era organisations are targeting on managing customer relationships, mainly customer satisfaction, in order to maximize revenues (Constantinos 2003). Today, marketing is not just developing, delivering and selling; it is shifting towards developing and maintaining equally long term relationships with customers (Buttle, 1996). This new business values is called relationship marketing (RM), which has involved significant interest both from marketing academics and practitioners (Gronroos, 1994). The Greek philosopher, Epictetus said that â€Å"what concern me is not the way things are, but rather the way people think things are† (Szwarch, 2005, p.3). The concepts of consumer satisfaction were depending on the thinking of consumer. Research suggests that customer satisfaction, basic concept of relationship marketing, is important in achieving and retaining competitive advantage. Research studies have discovered that retaining current customers is much less expensive than attracting new customers (Desatnick, 1988; Stone et al., 1996; Bitran and Mondschein, 1997; Chattopadhyay, 2001; Massey et al., 2001). The best way to retain customers is to keep them satisfied, a number of studies have shown that customer satisfaction can guide to brand loyalty, repurchases intention and repeat sales (Day, 1984; Swan and Oliver, 1989; Oliver, 1999). Customer retention, in turn, seems to be related to profitability (Oliver, 1999). Relationship marketing is becoming significant in financial services (Zineldin, 1995). If a bank develops and sustains a solid relationship with its customers, its competitors cannot easily replace them and so this relationship provides for a continued competitive advantage (Gilbert, 2003). Moriarty et al. (1983) has suggested relationship concept in the banking sector which states that banks can increase their profits by maximising the profitability of the total customer relationship over time, instead of looking for to get more profit from any single transaction. Perrien et al. (1992) observed severe competitive pressures that forces financial institution to restructure their marketing strategies by developing into long-term relationship with customers. And banking industry purely related to financial services, which needs to create the trust among the people. This research is exploratory in nature and design. The data which is collected is going to be mostly primary data collected from the relevant persons within the bank. The data has gathered from the face to face interviews with the help of structured and semi-structured questionnaire with those persons. The above describe interviews has last 40 (fourty) to 45 (fourty five) minutes (approx). On the other hand the researcher has decided to collect primary data from random interviews of Lloyds Banking Groups customers. Sample size is around 200 customers and of structured questionnaire. But of course this research paper has relied on reviewing the various secondary data available from various researches such as books, magazines, website, previous research and publication etc. The collected data has been analysed by graphs, table and pi chart drawn from Microsoft excel. 1.3 AIM OF THE RESEARCH The aim of the research is to study why CRM is important in bank, how the CRM works in banks and also the effectiveness of Lloyds Banking Group in obtaining long term customer relationship, customer loyalty, and customer satisfaction by the use of CRM. And also suggest feasible recommendations to Lloyds Banking Group to increase the customer satisfaction and market share by the effective use of CRM. 1.4 OBJECTIVES OF THE RESEARCH The followings are the objectives of this research; To study how critically practised in Lloyds Banking Group Analysis the data mining process of Lloyds Banking Group To find out how the bank segments their customers To analysis how the bank retaining their customers To find out how does the bank measure customer Life Time Value To verify the relationship between the customers and the Lloyds Banking Group 1.5 SCOPE OF THE STUDY The scope of the study and research work has limited to Lloyds Banking Group only. This chosen level of aspects has stayed at large in the study so that it can be studied well and analyzed thoroughly to get a deeper understanding. Trying to cover too much ground may lead to a very superficial and confused analysis and may involve long time duration to complete the project work or report. Therefore a specified and narrow down approach with Lloyds Banking Group and an evaluation of its success has comprised with the researc 2.0 LITERATURE REVIEW This chapter contains a review of literature relevant to the research. This literature review deals with, about CRM, the history and goals of an integrated banking CRM, the technological factor of CRM, the process cycle in banks, data warehouse technology, data mining process, how to analysis the data, customer segmentation process, communication strategies of bank to the customers etc. 2.1 CUSTOMER RELATIONSIP MANAGEMENT Existing research states that ‘relationships are the base to the successful development and edition of new business viewpoint, though business have taken care of relationships with their customers for many centuries (Gronroos, 1994). Sheth and Parvathiyar, (1995) said that relationships demand much more than mere transactions. Rather, they symbolize strategic and tactical issues based on a new philosophical move that geared in the direction of long-term organisation survival. According to Storbacka, (1994) relationship marketing got popular in 1990s but it has a long history under different names. In its starting, one-to-one marketing appeared in the mid 1990s, which transformed into Customer Relationship Management. Parvatiyar and Sheth gave a static definition of CRM. â€Å"Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer† (Parvatiyar and Sheth 2000, p.6) â€Å"What criteria determine who â€Å"How can we acquire this customer will be our most profitable in the most efficient and effective customers?† way?† â€Å"How can we increase the â€Å"How can we keep this customer loyalty and the profitability for as long as possible?† Of this customer?† 2.2 THE HISTORY AND GOALS OF AN INTEGRATED BANKING CRM According to Puccinelli (1999) the financial services industry as entering a new era where personal attention is decreasing because the institutions are using technology to replace human contact in many application areas. Sherif, 2002 advocated that, now global changes brought new trends, directions and new ways of doing business, which also brought new challenges and opportunities to financial institutions. In order to complete with newly increasing competitive pressures, financial institutions must recognize the need of balancing their performance by achieving their strategic goals and meeting continues volatile customer needs requirements. Different ways must be analyzed to meet customer needs. Foss said that banks are highly focusing on CRM for the last five years that is expected to continue. According to Peter (1998) and Chablo (1999) the main goals of an effective integrated CRM solution in the banking sector are to enable financial institutes to; a) Widen customer relationship through acquiring new customers, identifying and targeting new segments and expanding in new markets. b) Lengthen the existing relationship developing longer term relationships, increasing perceived value of products and introducing new products and c) Deepen the relationship with customers initiating the cross selling and up selling opportunities, understanding the propensity of different customer segments to purchase and increase sales. The implementation if CRM system in a bank helps the business organisation to obtain a complete picture of their existing customers, design both customer-oriented and market-driven financial products and services, as well as implement extensive and reliable financial marketing research and efficient campaigns, to achieve and enhance customer loyalty and profitability. The above goals can be achieved through the seamless integration of information technology solutions and business objectives at every process of the bank business that affects the customer. 2.3 THE PHASES OF CRM The main phases of CRM are as follows; 1. Customer selection or Segmentation According to Dave Chaffey (2009), customer selection defining the types of customers that a company will market to. It means identifying different groups of customers for which to develop offerings and to target during acquisition, retention and extension. Different ways of segmenting customers by value and by their detailed lifecycle with the customer are reviewed. Many companies are now only proactively marketing to favoured customers. Seth Godin (1999), says â€Å"Focus on share of customer, not market share fire 70 per cent customers and watch your profits go up!† According to Efraim Turban (2008), the most sophisticated segmentation and targeting schemes for extension of customers are often used by banks, which have full customer information and acquire history data as they search for to boost Customer Lifetime Value (CLV) through encouraging increased use of products overtime. The segmentation approach used by banks is based on five main basics which in result are covered on top of each other. The amount of options used, and therefore the complexity of approach, will depend on resources obtainable, opportunities, capabilities and technology afforded by catalog. i. Identify customer lifecycle groups When guests use online services then they basically pass those seven or more stages. The organisations have clear these segments and establish the CRM infrastructure to categories customers in this manner; then they deliver focused messages, whichever by modified web messaging or by e-mails that are triggered routinely because of various rules. First-time guests recognized by a cookie placed on their PC. When guests registered, they are tracked through the residual stages. The customers who have purchased one or more products are one particular important group. The key challenge is for a company to encourage a customer to shift from the first product to the second and then go on. Explicit offers can be try to push customer for further products. In the same way, when customers turn into an inactive then the customer required follow-up. ii. Identify customer profit characteristics This is a conventional segmentation which is based on the nature of customer. For Business 2 Business Companies it includes sex, age and geography. It includes volume of the organisation and the type of sector or application, the organisation operates in. iii. Identify behaviour in response and purchase As shown in 2.2 through analysis of data base when customer progress through the lifecycle, company is capable to build up a detail reaction and buy history which judges the details of frequency, recency, group of product buy and monetary value. This approach is known as ‘RFM (Recency, Frequency, Monetary value) analysis. iv. Identify multi-channel behaviour In spite of of the eagerness of the company for online channels, various customers are chosen for using online channels and others customers are chosen conventional channels. This is, to an extent, be indicated by RFM and response examination since customers with a preference for an online channel is more reactive and make more use online. Customer who likes online channels is focused mostly by online communications such as e-mail, but when customer like conventional channels is focused by conventional communications such as direct mail or phone. This is known as ‘right-channelling. v. Tone and style preference In a same way to channel liking, customers are respond in their own way to various types of message. Some customers like rational application, in that time a detailed e-mail may work best. On the other hand some customers are preferred an emotional appeal. Companies are test for this in customers or conclude it using profit description and response performance and then expand various inventive treatments consequently. 2. Customer acquisition Processes used to add new customer. According to Turban (2008), customer acquisition refers to marketing activities intended to form relationship with new customers while reducing acquisition cost and targeting high-value customers. Service value and selecting the right path for various customers are essential at this stage and during the lifecycle. The conventional manner to customer acquisition include a marketing manager developing a blend of mass marketing (billboards, magazine advertisements etc.) and direct marketing (mail, telephone, etc.) campaigns based on their knowledge of the particular customer base that was being focussed. Marketing campaign trying to pressure new customers to buy a particular type of diapers, the mass marketing ads might be determined in parenting magazines. The advertisements could also be positioned in more conventional publications whose readership demographics were alike to those of new parents. Customer acquisition is comparatively similar to mass marketing. A marketing manager selects the demographics that they are involved in and after that works with a data vendor to obtain lists of buyers who meet those features. The data vendors have large database holding millions of eventual customers that can be segment based on explicit demographic criteria. The idea of â€Å"similar demographics† has conventionally been an art rather than a science. Usually there are not hard-and-fast systems about whether two groups of buyers share the similar features. Most of the segmentation that took place in conventional direct marketing involves hunches on the division of the marketing professional. 3. Customer retention Dafe Chaffey 2009 said that customer retention refers to the marketing actions taken by a company to keep its current customers. Identifying applicable offerings based on their personal needs and complete position in the customer lifecycle (e.g. purchase value or number) is key. Customer retention strategy aims to keep a high percentage of valuable customers and a customer development strategy aims to boost the value of those retained customer to the organisation. Customer retention is based on customer loyalty. And customer loyalty is the point to which a customer will continue with a specific brand or vendor. Customer acquisition to retain and extend create long-term customer relationship. We need to calculate customer satisfaction, as satisfaction drives loyalty and loyalty drives profitability. This relationship is exposed below; The marketers aim is to push customers up the curve towards the affection zone. But the majority are not in that zone. Marketers must understand to achieve retention,why customers defers or are indifferent. 4. Customer extension This technique is encouraging customers to increase their involvement with a company. According to Turban 2008, customer extension is increasing the range of products that a customer buys from an organisation. Sometime it is referred ‘customer development. Increasing the lifetime value (CLV) of a customer is the main objective of customer extension by encouraging cross-sell. For example a customer of Egg credit card may be offered the loan or a deposit account. There are many of customer extension technique for CRM as follows; Re-sell: same type of products to existing customers-particular vital in some Business 2 Business background as re-buys or modified re-buys. Cross-sell: sell extra products which may be closely related to the original buy. Up-sell: this is mean, selling more expensive products. Reactivation: Customers who have purchased for some time or have lapsed can be encouraged to buy again. Referrals: generating sells from recommendation from existing customers. 2.4 CUSTOMER LIFETIME VALUE MODELLING Customer Lifetime Value (CLV) is also an important theory and practise of CRM. But the calculation of CLV is not straightforward. There are so many company, they do not calculate it. According to Dave Chaffey (2009) â€Å"Lifetime value is the total net benefits that a customer or group of customers will provide a company over their total relationship with the company†. CLV is based on estimating the income and costs related with each customer over a phase of time and then calculating the net present value in present monetary terms using a discount rate value applied over the stage. Efraim Turban (2006) said there is various scale of complexity in calculating LTC. Those are exposed in 2.6. Option 1 is a realistic way or estimated proxy for future LTV, but the true LTV is the future value of the customer at individual level. CLV modelling at a segment level 4 is crucial within marketing since it answers the question; How much can I afford to invest in acquiring a new customer? Lifetime value analysis helps marketers to: Create the true value of a companys customer base Recognize and compare crucial target segment Calculate the effectiveness of another customer retention strategy Plan and calculate investment in customer acquisition programmes Make decisions about product and offers 2.7 gives an example of how LTV can be used to develop a CRM strategy for different customer groups. There are 4 (four) main types of customers are indicated by their present and future value as bronze, silver, gold and platinum. Separate customers groupings (circles) are recognized according to their current value (as indicated by current profitability) and future value as indicated by CLV calculation. Every group will have a customer segmentation based on their demographics. Therefore this is used for customer selection. Within the four main value groupings, there are various strategies are developed for various customer groups. Few bronze customers such as group A and B practically do not have development potential and are usually unprofitable, therefore the objective is to reduce costs in communications and if they do not stay as customers this is acceptable. Some bronze customers like group C may have potential for growth; therefore for group C the strategy is to extend their purchases. Silver customers are focused with customer extension offer and gold customers are extended. Platinum customers are the best customers; therefore the communication is very important with these customers. 2.5 THE TECHNOLOGICAL FACTORS OF CRM According to Davenport and Short, (1990); Porter, (1987) ‘information technology is an enabler to thoroughly redesign business process to achieve improvements in organisational performance. ‘Information Technology help helps a business process by facilitating changes to job practices and establishing new techniques to link a customer with organisations, suppliers and stakeholders (Hammer and Champy, 1993). Eckerson and Watson (2000) advocated that ‘CRM take full advantage of technology to collect and analyze data on customer patters, expand predictive models, interpret customer behaviour, proper respond with communications, and deliver product and service to individual customers. By using technology a company can create a 360 degree view of customers to find out from past interactions to optimize future ones. Peppard (2000) said that ‘the leading factors in CRM development is improvement in network infrastructure, client/server computing, and business intelligence applications. CRM collect, store, maintain and distribute customer knowledge all over the organisation. The effectual management of information has a vital role to play in CRM. In the case of calculating customer lifetime value, consolidated view, product tailoring and service innovation, the information is essential. Along with data warehouses, enterprise resource planning (ERP) system and the internet are the central infrastructures to CRM applications. Fickel (1999) said ‘CRM applications link front office (e.g. marketing, sales and customer service) and back office (e.g. financial, logistics, operations and human resources) functions with the companys customer touch point. A companys touch point is â€Å"all of the communication, human and physical interactions your customers experience during their relationship lifecycle with your organisation. Whether an ad, Web site, sales person, store or office, touch points are important because customers from perceptions of your organisation and brand based on their cumulative experiences† (Source; http://www.imediaconnection.com/content/4508.imc at 16/10/2009 on 15:25) According to Eckerson and Watson (2000), ‘CRM integrated touch points is something like a common view of the customer. A separate information systems controlled these touch points. 2.8 demonstrates the relationship between customer touch point with back and front office operations Peppers and Rogres, (1999) said ‘In many companies, CRM is just a technology solution that extends divide databases and sales force automation tools to link sales and marketing functions in order to develop targeting efforts. On the other hand some organisations consider CRM as a tool that is exclusively designed for one-to-one relationship. According to Goldenberg (2000) ‘CRM is not just a technology applications for sales, marketing and service, but when CRM fully and successfully implemented, customer-driven, a cross-functional, technology-integrated business process management strategy that improves relationships and encompasses the whole organisation. 2.6 DATA WAREHOUSE TECHNOLOGY According to Watson (2000) ‘data warehouse is a tools of information technology management that helps business decision makers to instant access of information of customer data throughout the organisation by combining all database and operational systems like sales and transaction, human resource, inventory, purchasing, financial and marketing system. Data warehouse pull out, clean, convert and manage large volumes of data from various systems and creating a historical record of all customer. Data warehousing technology is the most crucial part of CRM because it makes CRM possible. Shepard et al. (1998) said ‘a better understanding of customer behaviour is possible because data warehousing technology consolidates correlates and convert customer data into customer intelligence. Understanding of customers and their purchase patterns can improve information related to customer service interactions, billing and account status, back orders, product returns, product shipment, and internal operating cost. The capacity of a data warehouse to store hundreds and thousands of gigabytes of data make an analysis feasible as well as immediate. Organisational benefits with a data warehouse are as follows; exact and faster access of information bad and duplicate data eliminate by quality data and filtering customer profiling and retention modelling it calculate total present value and estimate future value of every customer it gives detail report 2.7 DATA MINING TECHNOLOGY Peppers and Rogres, (1999) said that ‘the first analytical step of data mining is to describe the data. Data mining summarize its statistical attributes like standard deviations and means, visually review it by use of charts and graphs and distributes the value of the field in our data. But alone data description can not provide an action plan. We have to build a predictive model based on patterns determined from known results and after that we have to test the model on result outside the original sample. An ideal model should never be confused with reality, but it is useful guide to understanding our businesses. According to Eckerson and Watson (2000) ‘we can use data mining for both classification and regression problems. In first problem we can predict what type something will fall into. In second problems we are predicting a number like probability that a person will respond to an offer. In CRM process, data mining is often used to allocate a score to a particular customer. Data mining is also often using to recognize a set of characteristics, which is called profile. Data mining segments customers in to groups with similar behaviour like purchasing a particular product. 2.8 THE CRM PROCESS CYCLE IN BANKS Pound (2000) said that exploration and alteration process should be done by the banks on basis of customer information captured; this shows the full value of CRM initiatives. Banks set up a closed CRM cycle with the help of an integrated CRM solution, which composed of a set of continuous iterative process. It manages the whole customer related process for bank, analysing customer profile, customer data and life time value, which is helping to making marketing decision and optimizing the execution of marketing campaigns, customer service strategies and sales strategies across various channels during the bank. According to Professor Constantin Zopounidis (2002) CRM process cycle is based on a generic business view. It presents a continuous improvement of value between customers and banks across touch points. The main stages are as follows; Customer data collection Customer data analysis Marketing strategy and action programs Back-office Data External Data Touch-Point Data Pound 2000 said that ‘recent banking data sources are extremely heterogeneous. Geographic information is dispersed due to continual acquisitions, mergers and reorganizations. For example a bank might use web site, ATMs, e-mail, sales, call centres and marketing automation applications that must be integrated in a unified environment of CRM banking. An effective multi-channels customer interface will not be possible without a centrally integrated warehouse driving the entire CRM process cycle. This should be update real time. The historical data should be recorded by it, which is used to create propensity models and customer life time value models to recognize past behaviour and action in order to take future marketing strategy. 2.9 CUSTOMER DATA COLLECTION Kristin Anderson Carol Kerr (2002), said that in banking transaction system data such as (e.g. Checking, Credit, Savings) are frequently organised around accounts, channels, products and other alike transactional concepts. This limits the bank ability on identifying the total relationship and unique customers. An Integrated CRM is a major goal it consolidates these â€Å"information islands† and separate solution, which forms an open cross-bank system from all executives, business area department officers and branch employees, shares the identical customer information. Integrated banking CRM structure can be obtained from this necessary basis of data supply. Operation (contact) sources: Chou, Chou 2000, said the customer communication touch-point (ATM, Branch, Call-Centre, Internet-Banking, Mobile banking, personal contact, etc.) Internal sources: Professor Constantion Zopounidis (2000) said internal sources that are the available information island, data bases and product oriented systems from other banks such as (Cards, Deposits, Investments, and loans etc.), Marketing campaign response, meta-data analysis and reliable data mining results. External Sources: Professor Constanin Zopounidis 2002, said marketing researches that of external sources, infomediaries etc. Providing geo-demographic, psycho-graphic data and lifestyle, these can help to improve customer images 2.11 CUSTOMER DATA ANALYSIS Heygate (1998), said Simple and sophisticated data analysis techniques are required for deriving the valuable customer insight from the data collected in a central customer warehouse. More advance data analytics includes OLAP (Online Analytical Processing) mining techniques and tools, these extracts applicable patterns or trends in the data. According to Lawer (2000), key incorporated customer management insights provided by customer data analysis are customer segmentation/differentiation, concentration and distribution of customers value; share of purchases/profits, analysis of strategies that widen/lengthen/deepen customer relationship. Hawkes 2000, advocated customer data analysis enables the recognition of customers profit and customers preferences for definite bank product and services, indicates the most suitable channels to reach the customers, and assesses the profitability and life time value of every personality. Additionally, Delto 1998 said that the future manners of the consumers can be predicted by analysing their past behaviour. Customer statistics, profit and segmentation are the main amount produced of the analysis stage feeding the marketing strategy planning and completing process. Having easily accessible information to marketing makes the difference between a winning campaign and a failure. 2.12 MARKETING STRATEGY AND PROGRAMES Kristin Anderson and Carol Kerr 2002 advocated captured results and data of customer analysis support marketers to route marketing messages, processes and strategies. True values of data of Lloyd TSB are discovered by tools and process for marketing decision making, marketing decision making and CRM initiatives and campaign are deployed from converted information to customer knowledge. Goal of marketing automation within CRM are which personalise and optimizes each customer contact from planning, execution, monitoring marketing strategies and action programmes. Bryan Foss 2003 said it is critical for bank CRM not only to extract their data source to uncover patterns and insight but also to operationalise the system through the bank performance to turn the customer knowledge into importance creating achievement. Merlin Stone 2003 advocated the grades from advertising and CRM activities and strategies continue the process knowledge acquisition enhancing the on-going assessment of marketing data intelligence, closing the feed-back loop. Hence, the final element of CRM process cycle is the valuation of the results of campaign driven by marketing data intelligence. It is crucial to measure performance and feed result back into the centre customer data warehouse, in order to convey Customer Relationship Management of Lloyds Banking Customer Relationship Management of Lloyds Banking 1.0 INTRODUCTION This chapter provides the brief introduction of research. Furthermore, it also discusses the aims, objectives of the research questions and scope of the study. 1.1 TOPIC OF THE RESEARCH Customer Relationship Management of Lloyds Banking Group PLC; A Critical Evaluation 1.2 INTRODUCTION TO RESEARCH Peter Drucker said, â€Å"The purpose of a business is to create customers†. Customer Relationship Management can be the single strongest weapon we have as manage to ensure that customers become and remain loyal. Customer Relationship Management, or CRM, is an essential part of modern business management. CRM concerns the relation between the organisation and its customers. Customers are the lifeblood of any company be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers. CRM is the same in principle for both examples. Globalization and technology improvements have pushed companies into hard competition. In this new era organisations are targeting on managing customer relationships, mainly customer satisfaction, in order to maximize revenues (Constantinos 2003). Today, marketing is not just developing, delivering and selling; it is shifting towards developing and maintaining equally long term relationships with customers (Buttle, 1996). This new business values is called relationship marketing (RM), which has involved significant interest both from marketing academics and practitioners (Gronroos, 1994). The Greek philosopher, Epictetus said that â€Å"what concern me is not the way things are, but rather the way people think things are† (Szwarch, 2005, p.3). The concepts of consumer satisfaction were depending on the thinking of consumer. Research suggests that customer satisfaction, basic concept of relationship marketing, is important in achieving and retaining competitive advantage. Research studies have discovered that retaining current customers is much less expensive than attracting new customers (Desatnick, 1988; Stone et al., 1996; Bitran and Mondschein, 1997; Chattopadhyay, 2001; Massey et al., 2001). The best way to retain customers is to keep them satisfied, a number of studies have shown that customer satisfaction can guide to brand loyalty, repurchases intention and repeat sales (Day, 1984; Swan and Oliver, 1989; Oliver, 1999). Customer retention, in turn, seems to be related to profitability (Oliver, 1999). Relationship marketing is becoming significant in financial services (Zineldin, 1995). If a bank develops and sustains a solid relationship with its customers, its competitors cannot easily replace them and so this relationship provides for a continued competitive advantage (Gilbert, 2003). Moriarty et al. (1983) has suggested relationship concept in the banking sector which states that banks can increase their profits by maximising the profitability of the total customer relationship over time, instead of looking for to get more profit from any single transaction. Perrien et al. (1992) observed severe competitive pressures that forces financial institution to restructure their marketing strategies by developing into long-term relationship with customers. And banking industry purely related to financial services, which needs to create the trust among the people. This research is exploratory in nature and design. The data which is collected is going to be mostly primary data collected from the relevant persons within the bank. The data has gathered from the face to face interviews with the help of structured and semi-structured questionnaire with those persons. The above describe interviews has last 40 (fourty) to 45 (fourty five) minutes (approx). On the other hand the researcher has decided to collect primary data from random interviews of Lloyds Banking Groups customers. Sample size is around 200 customers and of structured questionnaire. But of course this research paper has relied on reviewing the various secondary data available from various researches such as books, magazines, website, previous research and publication etc. The collected data has been analysed by graphs, table and pi chart drawn from Microsoft excel. 1.3 AIM OF THE RESEARCH The aim of the research is to study why CRM is important in bank, how the CRM works in banks and also the effectiveness of Lloyds Banking Group in obtaining long term customer relationship, customer loyalty, and customer satisfaction by the use of CRM. And also suggest feasible recommendations to Lloyds Banking Group to increase the customer satisfaction and market share by the effective use of CRM. 1.4 OBJECTIVES OF THE RESEARCH The followings are the objectives of this research; To study how critically practised in Lloyds Banking Group Analysis the data mining process of Lloyds Banking Group To find out how the bank segments their customers To analysis how the bank retaining their customers To find out how does the bank measure customer Life Time Value To verify the relationship between the customers and the Lloyds Banking Group 1.5 SCOPE OF THE STUDY The scope of the study and research work has limited to Lloyds Banking Group only. This chosen level of aspects has stayed at large in the study so that it can be studied well and analyzed thoroughly to get a deeper understanding. Trying to cover too much ground may lead to a very superficial and confused analysis and may involve long time duration to complete the project work or report. Therefore a specified and narrow down approach with Lloyds Banking Group and an evaluation of its success has comprised with the researc 2.0 LITERATURE REVIEW This chapter contains a review of literature relevant to the research. This literature review deals with, about CRM, the history and goals of an integrated banking CRM, the technological factor of CRM, the process cycle in banks, data warehouse technology, data mining process, how to analysis the data, customer segmentation process, communication strategies of bank to the customers etc. 2.1 CUSTOMER RELATIONSIP MANAGEMENT Existing research states that ‘relationships are the base to the successful development and edition of new business viewpoint, though business have taken care of relationships with their customers for many centuries (Gronroos, 1994). Sheth and Parvathiyar, (1995) said that relationships demand much more than mere transactions. Rather, they symbolize strategic and tactical issues based on a new philosophical move that geared in the direction of long-term organisation survival. According to Storbacka, (1994) relationship marketing got popular in 1990s but it has a long history under different names. In its starting, one-to-one marketing appeared in the mid 1990s, which transformed into Customer Relationship Management. Parvatiyar and Sheth gave a static definition of CRM. â€Å"Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer† (Parvatiyar and Sheth 2000, p.6) â€Å"What criteria determine who â€Å"How can we acquire this customer will be our most profitable in the most efficient and effective customers?† way?† â€Å"How can we increase the â€Å"How can we keep this customer loyalty and the profitability for as long as possible?† Of this customer?† 2.2 THE HISTORY AND GOALS OF AN INTEGRATED BANKING CRM According to Puccinelli (1999) the financial services industry as entering a new era where personal attention is decreasing because the institutions are using technology to replace human contact in many application areas. Sherif, 2002 advocated that, now global changes brought new trends, directions and new ways of doing business, which also brought new challenges and opportunities to financial institutions. In order to complete with newly increasing competitive pressures, financial institutions must recognize the need of balancing their performance by achieving their strategic goals and meeting continues volatile customer needs requirements. Different ways must be analyzed to meet customer needs. Foss said that banks are highly focusing on CRM for the last five years that is expected to continue. According to Peter (1998) and Chablo (1999) the main goals of an effective integrated CRM solution in the banking sector are to enable financial institutes to; a) Widen customer relationship through acquiring new customers, identifying and targeting new segments and expanding in new markets. b) Lengthen the existing relationship developing longer term relationships, increasing perceived value of products and introducing new products and c) Deepen the relationship with customers initiating the cross selling and up selling opportunities, understanding the propensity of different customer segments to purchase and increase sales. The implementation if CRM system in a bank helps the business organisation to obtain a complete picture of their existing customers, design both customer-oriented and market-driven financial products and services, as well as implement extensive and reliable financial marketing research and efficient campaigns, to achieve and enhance customer loyalty and profitability. The above goals can be achieved through the seamless integration of information technology solutions and business objectives at every process of the bank business that affects the customer. 2.3 THE PHASES OF CRM The main phases of CRM are as follows; 1. Customer selection or Segmentation According to Dave Chaffey (2009), customer selection defining the types of customers that a company will market to. It means identifying different groups of customers for which to develop offerings and to target during acquisition, retention and extension. Different ways of segmenting customers by value and by their detailed lifecycle with the customer are reviewed. Many companies are now only proactively marketing to favoured customers. Seth Godin (1999), says â€Å"Focus on share of customer, not market share fire 70 per cent customers and watch your profits go up!† According to Efraim Turban (2008), the most sophisticated segmentation and targeting schemes for extension of customers are often used by banks, which have full customer information and acquire history data as they search for to boost Customer Lifetime Value (CLV) through encouraging increased use of products overtime. The segmentation approach used by banks is based on five main basics which in result are covered on top of each other. The amount of options used, and therefore the complexity of approach, will depend on resources obtainable, opportunities, capabilities and technology afforded by catalog. i. Identify customer lifecycle groups When guests use online services then they basically pass those seven or more stages. The organisations have clear these segments and establish the CRM infrastructure to categories customers in this manner; then they deliver focused messages, whichever by modified web messaging or by e-mails that are triggered routinely because of various rules. First-time guests recognized by a cookie placed on their PC. When guests registered, they are tracked through the residual stages. The customers who have purchased one or more products are one particular important group. The key challenge is for a company to encourage a customer to shift from the first product to the second and then go on. Explicit offers can be try to push customer for further products. In the same way, when customers turn into an inactive then the customer required follow-up. ii. Identify customer profit characteristics This is a conventional segmentation which is based on the nature of customer. For Business 2 Business Companies it includes sex, age and geography. It includes volume of the organisation and the type of sector or application, the organisation operates in. iii. Identify behaviour in response and purchase As shown in 2.2 through analysis of data base when customer progress through the lifecycle, company is capable to build up a detail reaction and buy history which judges the details of frequency, recency, group of product buy and monetary value. This approach is known as ‘RFM (Recency, Frequency, Monetary value) analysis. iv. Identify multi-channel behaviour In spite of of the eagerness of the company for online channels, various customers are chosen for using online channels and others customers are chosen conventional channels. This is, to an extent, be indicated by RFM and response examination since customers with a preference for an online channel is more reactive and make more use online. Customer who likes online channels is focused mostly by online communications such as e-mail, but when customer like conventional channels is focused by conventional communications such as direct mail or phone. This is known as ‘right-channelling. v. Tone and style preference In a same way to channel liking, customers are respond in their own way to various types of message. Some customers like rational application, in that time a detailed e-mail may work best. On the other hand some customers are preferred an emotional appeal. Companies are test for this in customers or conclude it using profit description and response performance and then expand various inventive treatments consequently. 2. Customer acquisition Processes used to add new customer. According to Turban (2008), customer acquisition refers to marketing activities intended to form relationship with new customers while reducing acquisition cost and targeting high-value customers. Service value and selecting the right path for various customers are essential at this stage and during the lifecycle. The conventional manner to customer acquisition include a marketing manager developing a blend of mass marketing (billboards, magazine advertisements etc.) and direct marketing (mail, telephone, etc.) campaigns based on their knowledge of the particular customer base that was being focussed. Marketing campaign trying to pressure new customers to buy a particular type of diapers, the mass marketing ads might be determined in parenting magazines. The advertisements could also be positioned in more conventional publications whose readership demographics were alike to those of new parents. Customer acquisition is comparatively similar to mass marketing. A marketing manager selects the demographics that they are involved in and after that works with a data vendor to obtain lists of buyers who meet those features. The data vendors have large database holding millions of eventual customers that can be segment based on explicit demographic criteria. The idea of â€Å"similar demographics† has conventionally been an art rather than a science. Usually there are not hard-and-fast systems about whether two groups of buyers share the similar features. Most of the segmentation that took place in conventional direct marketing involves hunches on the division of the marketing professional. 3. Customer retention Dafe Chaffey 2009 said that customer retention refers to the marketing actions taken by a company to keep its current customers. Identifying applicable offerings based on their personal needs and complete position in the customer lifecycle (e.g. purchase value or number) is key. Customer retention strategy aims to keep a high percentage of valuable customers and a customer development strategy aims to boost the value of those retained customer to the organisation. Customer retention is based on customer loyalty. And customer loyalty is the point to which a customer will continue with a specific brand or vendor. Customer acquisition to retain and extend create long-term customer relationship. We need to calculate customer satisfaction, as satisfaction drives loyalty and loyalty drives profitability. This relationship is exposed below; The marketers aim is to push customers up the curve towards the affection zone. But the majority are not in that zone. Marketers must understand to achieve retention,why customers defers or are indifferent. 4. Customer extension This technique is encouraging customers to increase their involvement with a company. According to Turban 2008, customer extension is increasing the range of products that a customer buys from an organisation. Sometime it is referred ‘customer development. Increasing the lifetime value (CLV) of a customer is the main objective of customer extension by encouraging cross-sell. For example a customer of Egg credit card may be offered the loan or a deposit account. There are many of customer extension technique for CRM as follows; Re-sell: same type of products to existing customers-particular vital in some Business 2 Business background as re-buys or modified re-buys. Cross-sell: sell extra products which may be closely related to the original buy. Up-sell: this is mean, selling more expensive products. Reactivation: Customers who have purchased for some time or have lapsed can be encouraged to buy again. Referrals: generating sells from recommendation from existing customers. 2.4 CUSTOMER LIFETIME VALUE MODELLING Customer Lifetime Value (CLV) is also an important theory and practise of CRM. But the calculation of CLV is not straightforward. There are so many company, they do not calculate it. According to Dave Chaffey (2009) â€Å"Lifetime value is the total net benefits that a customer or group of customers will provide a company over their total relationship with the company†. CLV is based on estimating the income and costs related with each customer over a phase of time and then calculating the net present value in present monetary terms using a discount rate value applied over the stage. Efraim Turban (2006) said there is various scale of complexity in calculating LTC. Those are exposed in 2.6. Option 1 is a realistic way or estimated proxy for future LTV, but the true LTV is the future value of the customer at individual level. CLV modelling at a segment level 4 is crucial within marketing since it answers the question; How much can I afford to invest in acquiring a new customer? Lifetime value analysis helps marketers to: Create the true value of a companys customer base Recognize and compare crucial target segment Calculate the effectiveness of another customer retention strategy Plan and calculate investment in customer acquisition programmes Make decisions about product and offers 2.7 gives an example of how LTV can be used to develop a CRM strategy for different customer groups. There are 4 (four) main types of customers are indicated by their present and future value as bronze, silver, gold and platinum. Separate customers groupings (circles) are recognized according to their current value (as indicated by current profitability) and future value as indicated by CLV calculation. Every group will have a customer segmentation based on their demographics. Therefore this is used for customer selection. Within the four main value groupings, there are various strategies are developed for various customer groups. Few bronze customers such as group A and B practically do not have development potential and are usually unprofitable, therefore the objective is to reduce costs in communications and if they do not stay as customers this is acceptable. Some bronze customers like group C may have potential for growth; therefore for group C the strategy is to extend their purchases. Silver customers are focused with customer extension offer and gold customers are extended. Platinum customers are the best customers; therefore the communication is very important with these customers. 2.5 THE TECHNOLOGICAL FACTORS OF CRM According to Davenport and Short, (1990); Porter, (1987) ‘information technology is an enabler to thoroughly redesign business process to achieve improvements in organisational performance. ‘Information Technology help helps a business process by facilitating changes to job practices and establishing new techniques to link a customer with organisations, suppliers and stakeholders (Hammer and Champy, 1993). Eckerson and Watson (2000) advocated that ‘CRM take full advantage of technology to collect and analyze data on customer patters, expand predictive models, interpret customer behaviour, proper respond with communications, and deliver product and service to individual customers. By using technology a company can create a 360 degree view of customers to find out from past interactions to optimize future ones. Peppard (2000) said that ‘the leading factors in CRM development is improvement in network infrastructure, client/server computing, and business intelligence applications. CRM collect, store, maintain and distribute customer knowledge all over the organisation. The effectual management of information has a vital role to play in CRM. In the case of calculating customer lifetime value, consolidated view, product tailoring and service innovation, the information is essential. Along with data warehouses, enterprise resource planning (ERP) system and the internet are the central infrastructures to CRM applications. Fickel (1999) said ‘CRM applications link front office (e.g. marketing, sales and customer service) and back office (e.g. financial, logistics, operations and human resources) functions with the companys customer touch point. A companys touch point is â€Å"all of the communication, human and physical interactions your customers experience during their relationship lifecycle with your organisation. Whether an ad, Web site, sales person, store or office, touch points are important because customers from perceptions of your organisation and brand based on their cumulative experiences† (Source; http://www.imediaconnection.com/content/4508.imc at 16/10/2009 on 15:25) According to Eckerson and Watson (2000), ‘CRM integrated touch points is something like a common view of the customer. A separate information systems controlled these touch points. 2.8 demonstrates the relationship between customer touch point with back and front office operations Peppers and Rogres, (1999) said ‘In many companies, CRM is just a technology solution that extends divide databases and sales force automation tools to link sales and marketing functions in order to develop targeting efforts. On the other hand some organisations consider CRM as a tool that is exclusively designed for one-to-one relationship. According to Goldenberg (2000) ‘CRM is not just a technology applications for sales, marketing and service, but when CRM fully and successfully implemented, customer-driven, a cross-functional, technology-integrated business process management strategy that improves relationships and encompasses the whole organisation. 2.6 DATA WAREHOUSE TECHNOLOGY According to Watson (2000) ‘data warehouse is a tools of information technology management that helps business decision makers to instant access of information of customer data throughout the organisation by combining all database and operational systems like sales and transaction, human resource, inventory, purchasing, financial and marketing system. Data warehouse pull out, clean, convert and manage large volumes of data from various systems and creating a historical record of all customer. Data warehousing technology is the most crucial part of CRM because it makes CRM possible. Shepard et al. (1998) said ‘a better understanding of customer behaviour is possible because data warehousing technology consolidates correlates and convert customer data into customer intelligence. Understanding of customers and their purchase patterns can improve information related to customer service interactions, billing and account status, back orders, product returns, product shipment, and internal operating cost. The capacity of a data warehouse to store hundreds and thousands of gigabytes of data make an analysis feasible as well as immediate. Organisational benefits with a data warehouse are as follows; exact and faster access of information bad and duplicate data eliminate by quality data and filtering customer profiling and retention modelling it calculate total present value and estimate future value of every customer it gives detail report 2.7 DATA MINING TECHNOLOGY Peppers and Rogres, (1999) said that ‘the first analytical step of data mining is to describe the data. Data mining summarize its statistical attributes like standard deviations and means, visually review it by use of charts and graphs and distributes the value of the field in our data. But alone data description can not provide an action plan. We have to build a predictive model based on patterns determined from known results and after that we have to test the model on result outside the original sample. An ideal model should never be confused with reality, but it is useful guide to understanding our businesses. According to Eckerson and Watson (2000) ‘we can use data mining for both classification and regression problems. In first problem we can predict what type something will fall into. In second problems we are predicting a number like probability that a person will respond to an offer. In CRM process, data mining is often used to allocate a score to a particular customer. Data mining is also often using to recognize a set of characteristics, which is called profile. Data mining segments customers in to groups with similar behaviour like purchasing a particular product. 2.8 THE CRM PROCESS CYCLE IN BANKS Pound (2000) said that exploration and alteration process should be done by the banks on basis of customer information captured; this shows the full value of CRM initiatives. Banks set up a closed CRM cycle with the help of an integrated CRM solution, which composed of a set of continuous iterative process. It manages the whole customer related process for bank, analysing customer profile, customer data and life time value, which is helping to making marketing decision and optimizing the execution of marketing campaigns, customer service strategies and sales strategies across various channels during the bank. According to Professor Constantin Zopounidis (2002) CRM process cycle is based on a generic business view. It presents a continuous improvement of value between customers and banks across touch points. The main stages are as follows; Customer data collection Customer data analysis Marketing strategy and action programs Back-office Data External Data Touch-Point Data Pound 2000 said that ‘recent banking data sources are extremely heterogeneous. Geographic information is dispersed due to continual acquisitions, mergers and reorganizations. For example a bank might use web site, ATMs, e-mail, sales, call centres and marketing automation applications that must be integrated in a unified environment of CRM banking. An effective multi-channels customer interface will not be possible without a centrally integrated warehouse driving the entire CRM process cycle. This should be update real time. The historical data should be recorded by it, which is used to create propensity models and customer life time value models to recognize past behaviour and action in order to take future marketing strategy. 2.9 CUSTOMER DATA COLLECTION Kristin Anderson Carol Kerr (2002), said that in banking transaction system data such as (e.g. Checking, Credit, Savings) are frequently organised around accounts, channels, products and other alike transactional concepts. This limits the bank ability on identifying the total relationship and unique customers. An Integrated CRM is a major goal it consolidates these â€Å"information islands† and separate solution, which forms an open cross-bank system from all executives, business area department officers and branch employees, shares the identical customer information. Integrated banking CRM structure can be obtained from this necessary basis of data supply. Operation (contact) sources: Chou, Chou 2000, said the customer communication touch-point (ATM, Branch, Call-Centre, Internet-Banking, Mobile banking, personal contact, etc.) Internal sources: Professor Constantion Zopounidis (2000) said internal sources that are the available information island, data bases and product oriented systems from other banks such as (Cards, Deposits, Investments, and loans etc.), Marketing campaign response, meta-data analysis and reliable data mining results. External Sources: Professor Constanin Zopounidis 2002, said marketing researches that of external sources, infomediaries etc. Providing geo-demographic, psycho-graphic data and lifestyle, these can help to improve customer images 2.11 CUSTOMER DATA ANALYSIS Heygate (1998), said Simple and sophisticated data analysis techniques are required for deriving the valuable customer insight from the data collected in a central customer warehouse. More advance data analytics includes OLAP (Online Analytical Processing) mining techniques and tools, these extracts applicable patterns or trends in the data. According to Lawer (2000), key incorporated customer management insights provided by customer data analysis are customer segmentation/differentiation, concentration and distribution of customers value; share of purchases/profits, analysis of strategies that widen/lengthen/deepen customer relationship. Hawkes 2000, advocated customer data analysis enables the recognition of customers profit and customers preferences for definite bank product and services, indicates the most suitable channels to reach the customers, and assesses the profitability and life time value of every personality. Additionally, Delto 1998 said that the future manners of the consumers can be predicted by analysing their past behaviour. Customer statistics, profit and segmentation are the main amount produced of the analysis stage feeding the marketing strategy planning and completing process. Having easily accessible information to marketing makes the difference between a winning campaign and a failure. 2.12 MARKETING STRATEGY AND PROGRAMES Kristin Anderson and Carol Kerr 2002 advocated captured results and data of customer analysis support marketers to route marketing messages, processes and strategies. True values of data of Lloyd TSB are discovered by tools and process for marketing decision making, marketing decision making and CRM initiatives and campaign are deployed from converted information to customer knowledge. Goal of marketing automation within CRM are which personalise and optimizes each customer contact from planning, execution, monitoring marketing strategies and action programmes. Bryan Foss 2003 said it is critical for bank CRM not only to extract their data source to uncover patterns and insight but also to operationalise the system through the bank performance to turn the customer knowledge into importance creating achievement. Merlin Stone 2003 advocated the grades from advertising and CRM activities and strategies continue the process knowledge acquisition enhancing the on-going assessment of marketing data intelligence, closing the feed-back loop. Hence, the final element of CRM process cycle is the valuation of the results of campaign driven by marketing data intelligence. It is crucial to measure performance and feed result back into the centre customer data warehouse, in order to convey

An Analysis Of Microfinance And Poverty Economics Essay

An Analysis Of Microfinance And Poverty Economics Essay This is not charity. This is business: business with a social objective, which is to help people get out of poverty Dr Muhammad Yunus (www.environmentalquoteshomepage.com) Jonathan Morduch, Chairman of UN Expert Group on Poverty Statistics quoted that Microfinance stands as one of the most promising and cost-effective tools in the fight against global poverty. Economic growth of the economically, socially and geographically disadvantaged segments of the population of any country requires access to financial services. The disparity between the rich and the poor continues to grow wider and therefore microfinance institutions were introduced to help the less unfortunate people who did not have enough money for survival. It is usually in the narrow sense called micro because the microfinance companies deal with small amounts of loans for e.g. small savings and small loans. These loans are given to unsalaried borrowers, taking very little or no collateral at all. In a broader sense, microfinance refers to a movement where there is an easy access to financial services for the low income clients to build assets, stabilize consumption and protection against fu ture risks. Microfinance clients are usually people who fall under the poverty line and do not have any access to any financial institution for them to borrow from. The poor people usually save in the informal ways for e.g. They invest their assets in gold, domestic animals, land etc however informal saving has serious limitations. The poor are more likely to lose out on money through mismanagement or fraud. Banks do not entertain the poor people because they do not have collateral or enough money to open a savings account therefore it is not feasible for a poor person to access the banks. There are several microfinance institutions in the world mainly in the developing countries. The leading countries are Bangladesh, India, Colombia, Mexico, and Morocco. Micro financing has it roots from the 1870s in Ireland nevertheless today the history of microfinancing hails from the Grameen Bank in Bangladesh. Professor Mohammed Yunus along with his graduate students of Chittagong University designed an experimental credit programme to serve the poor facing banking problems. Through the help of rural banks they were able to disburse and recover loans. Although this project was a huge success the banks refused to take over it considering it to be too risky and expensive. Ultimately through support of benefactors, the Grameen Bank (Grameen meaning rural or village) was founded in 1983 and now provides loans to more than 4 million borrowers. They underlying objectives of the Grameen Bank was to eliminate the exploitation by landlords, perk up the standard of living particularly for women and to reverse the old age vicious cycle of low income meant low savings resulting in low investment. They wanted to inject credit into the cycle thereby increasing the investment size. Microfinance was not considered to hand out rather they introduced improved repayment rates. They focused on the ceiling in the interest rate and credit subsidies that retarded the expansion of the financial services. The poor people were shown that the repayment rates were better than the formal financial services were offering to them. The two features which helped Microfinance institutions to attain sustainability and reach large numbers of clients were the high repayment and the cost-recovery interest rates. Additionally to a bank account, there are other financial services like insurance, credit savings and other payment facilities. Financial inclusion represents the easy access of financial services to the poor and low-income groups. One of the crucial functions of the financial system is to allocate the resources effectively for increase in production, increasing opportunities and reducing poverty. (microfinance). Over 40 % of the Indian population has income earning but no savings since they are excluded from the financial system. It has been almost 25 years since the birth of microfinance since its introduction by the Grameen bank. The UN Year of Microcredit in 2005 showed a turning point for Microfinance as the private sector began to take a more stern attention to what has been well thought-out as the field of NGOs. Even with all this enthusiasm about poverty alleviation and contribution of financial services the Consultative Group to Assist the Poorest (CGAP) estimates that about only 5% reaches the poor clients (repository). India is a home growing and innovative sector to microfinance. India is likely to make microfinance its abode as it has a huge population of the worlds poor. One of the largest microfinance institutions is Self Employed Womens Association (SEWA) in India. It is the largest organization based in Asia to members who are poor, self-employed women workers earning less than US$1 per day. SEWA corresponds to a union of three movements the labor movement, cooperative movement and the womens movement SEWA builds the capacity of poor illiterate women to manage their own micro-enterprises. The staff is recruited and promoted from its own member groups, thus it has been able to develop managers who although illiterate, become professionals through practical experience. SEWAs combined approach to poverty alleviation comprises: (a) organizing for collective strength; (b) capital formation through access to financial services; (c) capacity building and (d) social security; to enhance womens productivity and to ensure that sudden crises are not a drain on their fragile economies. In 1972, SEWA was registered as a trade union that began in Gujarat in India. Though it started in the urban region of Ahmadabad yet their main focus group was the organization of poor yet self- employed women workers especially in the rural part of the region. SEWA has also spread its branches out in the national and international level. These women are the ones who earn their daily income through various small scale businesses or by working in agricultural lands and making handmade materials including hawkers, home-based workers and manual laborers. They do not acquire any regular salary like the people employed in the urban organized sector. They are the unprotected labour force of our country. Comprising of 93% of the labour force, women constitute about 94% from the unorganized sector. (www.sewa.org). This microfinance institution is registered under the Trade Unions Act of 1926 and is open for membership to all women all over India. In order to start organizing the finances, th e organization has introduced a membership fee of Rs 5 annually. An election is held for the representation of the organization. The union consists of a two tier level representation elected by the members. One representative member governs 100 members under ones group.  The union is governed by a two-tier level of elected representation. With globalization, liberalization and other economic changes, there are both new opportunities as well as threats to some traditional areas of employment. SEWAs first main goal is full employment ensuring work security, income security, and food security. The second is social security and self-reliance. At SEWA the main objective is meant to attain full employment and self reliance through the policy of hard work and growth. By full employment means employment whereby workers obtain security in matters of basic amenities such as work and social needs including food, health, shelter etc. There is a need for great effort against many obstacles, limitations and restrictions faced by them or enforced on them by society and the economy, These development activities done by microfinance institutions reinforce womens bargaining power and offer them new options. SEWA is not only an organization but also a movement that took place to bring up the downtrodden and the poor. In India, this larg ely self-employed segment forms roughly 90% of the whole economy. A collection of women consequently founded the SEWA bank as a co-operative to empower deprived self-employed women by making available for them financial services and access to credit to lessen their reliance on manipulative money-lenders (www.gdrc.com). About one billion people globally live in households below the poverty line earning about less than a dollar a day. Policy makers and NGOs who want to change the poor peoples lives face an uphill battle every day. There have been reports where major organizations like World Development Bank and other associations have extended a helping hand by granting the developing countries with financial aid however due to the bureaucratic behavior and corruption this aid has not reached the low level of the income strata. The grants given by the governments make matters worse by increasing the dependency of the poor and acts as a disincentive to the poor as they choose not to move ahead and develop. The microfinance institutions around the world continue to help the downtrodden by increasing their capacity to invest and improve their living standards. As James Wolfensohn, the president of the World Bank has been quick to point out that helping 100 million households means that as many as 500-60 0 million poor people could benefit. (Jstor) .Poverty alleviation is one of the most sought out strategies that every country encloses in its priority list however since decades this has failed due to loans not being repaid, cost of subsidies increasing tremendously and credit reaching the politically powerful rather than the underserved. The purpose of Microfinance institutions in India is to extend financial help to its client and to maintain financial sustainability. The microfinance chooses the groups for their financial transactions. These groups may be Self-Help groups. The group takes responsibility for the financial borrowings taken by the members. Even though a few institutions may require capital, the loan repayment method has become quite popular amongst microfinance organizations. Although these high repayment rates may seldom translate into profits. The institutions try and involve the governments as well and keep an eye on the incentives that chase off efficiency in peoples performance. Microfinance depends on pouring of finances from donors however the donors are against the continuous dependence on subsidies. The donors believe that subsidies should only be provided at the start of a project to cover up starting costs. (Murdoch) Self employed women workers and are quite active in the economic sense and therefore add to the expansion of the economy. They are primarily engaged in production, trade and the service sector as a whole. However, in spite of their uphill struggle and their input to the countrys overall gross domestic product, they have are not provided with any financial services, which could help them upgrade in their own labor and output. (www.sewa.org) These self-employed women cope with two major financial problems: shortage of working capital, and Non-ownership of assets. The banking sector was not responsive to the needs of these self- employed women and the money lenders were very exploitive in nature. Thus, sequentially to tackle this problem and liberate themselves from the cruel phase of eternal debt, the SEWA members came together with their own solution, in a meeting in December 1973: a bank of their own, where they could be privileged enough to be accepted and not to be made feel inferi or by the exploitative money lenders and indeed 4,000 women contributed share capital of Rs.10/- each towards the creation of the  Mahila SEWA Co-operative Bank (www.sewabank.org). In the year 1974 in May, the SEWA Bank was registered as a co-operative bank under the dual control of The Reserve Bank of India and The State Government. Since then it has been providing banking services to poor, illiterate self-employed women and has become a viable financial venture. (www.sewabank.org) SEWA started its own bank to provide women with access to microloans. Swashrayi Mahila Sewa Sahakari Bank is SEWA members largest cooperative, unheard of in India. The bank is in possession of the self-employed women as share holders; policies are devised by their own particular Board of elected women workers. The Bank is managed professionally by qualified managers liable to the Board. In 1974, SEWA Bank was established with 4000 members each contributing shares capital of Rs .10 each. Currently there are 93,000 active depositors. SEWA Bank in the year 1999, celebrated 25 years of granting financial services to the poor, self-employed women. Constantly in debt, our members initially brought up the matter of their need for credit so as to free themselves from the control of money-lenders and traders, to augment their businesses, build up assets in their own name, for childrens education, for the several crises including illness that they might occur and for many other purposes. (www. sewa.org). SEWA has been successfully lending money to women for various needs such as running a household or for their childrens education or weddings etc. Since women are achieving the two goals of the SEWA association they are ought to receive the support services such as health care, child care, insurance claim, legal help, communication services and capacity building. These services could be used for self-employment. Also women are ready to pay for these services which made the services financially viable. They dont have to depend on grants and subsidies for the use of these services. Some supportive services such as child and health care including savings and credit have formed their own co-operatives and have also gained operational self- sufficiency. Access to finance is a major problem for economically deprived women and in particular for poor self-employed women in countries that are developing such as hawkers, street vendors, home-makers, manual laborers and service contributors. As they do not save, disasters and compulsions time and again compel women to scrounge heavily. However, they do not posses the necessary experience and confidence to acquire credit from a financial institution in the recognized sector and the formal sector does not lend to the self employed women easily, therefore, one depends heavily on informal money-lenders, who charge exorbitant interest rates: This is usually the start of a negative skew of increasing indebtedness. SEWA Bank as a cooperative bank with the precise aim to provide credit to self-employed women with the vision to empower them and reduce their dependency on loan sharks. Initially, the SEWA Bank focused on drawing deposits from self-employed women and supplied it as an intermediary to facilitate depositors to procure loans from nationalized banks which are obliged to lend to the poor. In 1976, the SEWA Bank began to offer loans to its depositors from its own funds and steadily withdrew from the credit agreement with th e nationalized banks. The bank employs a woman who saves as a organizer between other women to encourage them to save in the bank as well. The organizer usually visits the women easy accessibility to the depositing of the savings by them. If a loan is required by a woman requires a loan, a member has to accompany her in order for that loan to be sanctioned. The bank scrutinizes the application process, carefully reviewing the applicants ability to generate income, standard of living, soundness of working conditions and capability to repay. Majority of the loans are unsecured; the process of approval takes about one week. If collateral is offered then the approval day is shortened and the loan could be granted the same day. Once the loan has been approved, the borrower is obligated to buy 5 % of the loan amount in bank shares and to open a savings account if she does not have one yet. Women are encouraged to register their savings account and their assets (such as working tools, house or land) in their own name (www. Gdrc.org). SEWA bank has also introduced various other schemes such as Crisis Mitigation Scheme, House Financing Scheme, Women Farmers Credit Scheme, and Sunrise Scheme for developing women businesses. Self-employed women need loans for an ample range of reasons; to obtain assets, raw materials, finished goods for resale, and trade-in old debts, improve their homes, buy transportation means or install amenities in their house, for instance electric and water connections. The bank gives long- term loans, i.e. 3-5 years, of no more than Rs. 50,000 which is an unsecured loan at the rate of 14.5%- 17% and the method used for this lending is the Diminishing Balance Method (This method is also applies a fixed percentage but it applies to the diminishing value of the asset and not to the initial value of the asset) (www .howto.co.uk). Each loan is sanctioned with a pre check of the house visit by a SEWA bank field worker. SEWA Bank has been supplying a wide variety of loan products to meet the product ive credit requirement of its clients. SEWA Bank necessitate a woman save regularly for at least one year, before she is eligible to apply for a loan. If there is an absence of traditional collateral, like jewellery or domestic animals a regular savings habit is considered a necessary form of security, in SEWA Banks experience of banking with the poor for over 25 years. SEWA Bank lays great emphasis on savings. All the self-employed women required a safe place to save their earnings and building up a credit loan from member savings was a very cost-effective method. SEWA bank introduced Indias first Micro-Pension Scheme. In April of 2006, SEWA members were approved to bond with a SEBI approved pension plan that presents no assured returns but permits up to 40 % collection to be invested in the Indian stock market. A number of countries were providing general insurance in India. Life insurance was nationalized and the Life Insurance Corporation of India (LIC) became the only authorize d insurance life insurer. In 1992 SEWA started an integrated insurance programme for its members. It was started with the objective of providing a support to poor women in times of calamities. It is a collaborative effort of SEWA, SEWA Bank and the nationalized insurance companies. Currently, SEWA has its own insurance unit called VimoSEWA which insures women for life, health, assets, widowhood and accidents in Gujarat. Starting with 7,000 members, it has now reached more than 70,000 women in 11 districts of Gujarat state. The total number of insureds, women and men, is 90,000 (www.sewabank.org) Why do MFIs target women? Microfinance is a womens movement but there is a logic that MFIs tend to target women for the practical reason that they are willing to attend group meetings and to comply with savings and loan terms. They may also believe that women are more conscientious in using finance for the benefit of the family. Men, by comparison, prefer larger, individual transactions. Lending to women guarantees the microfinance that the money is well spent on education, health, housing, and nutrition, making sure that they maximum money is directed toward the benefit of the family and the community. Financial independence and security gains a woman respect in the society and she is looked up to by other people. Decisions to make own choices could help the family from the clutches of poverty and social exclusion. The SEWA Bank has broken the vicious circle of indebtedness and dependence on middlemen and traders, and this has increased the bargaining power of the women. Many of them have upgraded their skil ls, developed more business and increased their income. (www. The World Bank Global Learning Conference in Shanghai in 2004 confirmed the impact of microfinance: Studies have showed that microcredit programs positively affect a womans decision-making role, her marital stability, and her control over resources and mobility. The analysis establishes that a womans contributing to her households income is a significant factor towards her empowerment (tars) The world has failed to understand is that the poor are not victims of a system that failed or passive receivers of domestic and foreign aid. The poor have had the willpower and organization to take action to the problems that affect their lives. As long as affluent nations give out free donations and help to poor countries, the people themselves will never be empowered to break free from oppressive conditions of poverty. The poor, if given the opportunity for economic advancement, can and will prove to the world that they are capable and responsible citizens. There are five major criticisms of microfinance: it is does not reach the chronically poor of the population, it is not financially sustainable for institutions, it is potentially harmful to women (domestic abuse may result from husbands jealous of their wives new financial power), it can create a large debt for the poor, and it is not universal in application. Though these criticisms are valid, there is ample evidence to show that the benefits of microfinance outweigh the costs. There are various examples to show that microfinance can lead to an income increase, better opportunities for growth of the family as a whole, better education and employment. Microfinance also leads to empowerment of women especially in developing countries and alleviation of poverty. Microfinance could be the answer to secure success for the Millennium goals.