INTERIM REPORT ON

MARKETING & PROMOTING PORTFOLIO MANAGEMENT SERVICES AT SHAREKHAN LTD. (HYDERABAD)

BY: HARPRIYA 12BSPHH010371 IBS, Hyderabad

INTERIM REPORT ON

MARKETING & PROMOTING PORTFOLIO MANAGEMENT SERVICES AT SHAREKHAN LTD. (HYDERABAD) BY: HARPRIYA 12BSPHH010371 A report submitted in the partial fulfillment of the requirements of the MBA Program of IBS, Hyderabad

As a part of Summer Internship Program at Sharekhan ltd. (Hyderabad)

Distribution list: Prof. A. Srikanth Faculty Guide IBS, Hyderabad Mr. Shashi Kumar Company Guide Sharekhan, Hyderabad

Date of submission: 3rd May, 2013.

Contents
ABSTRACT ............................................................................................................................................... 5 INTRODUCTION ....................................................................................................................................... 6 Purpose of the Project ......................................................................................................................... 6 Limitations........................................................................................................................................... 6 Scope of Study ..................................................................................................................................... 7 Methods of Collecting Data and their Sources ..................................................................................... 7 Literature Review ................................................................................................................................ 8 Secondary Sources............................................................................................................................... 9 Primary Sources ................................................................................................................................... 9 Sharekhans PMS and its features: ......................................................................................................... 10 ProPrime Portfolio: ............................................................................................................................ 10 Product Approach .......................................................................................................................... 10 Product Offering ............................................................................................................................ 11 Product Characteristics .................................................................................................................. 11 How to invest? ............................................................................................................................... 11 ProTech Portfolio............................................................................................................................... 11 Product Approach .......................................................................................................................... 11 Product Offerings........................................................................................................................... 12 Product Characteristics .................................................................................................................. 12 How to invest? ............................................................................................................................... 13 Advantages of Sharekhans PMS ............................................................................................................ 13 Post sales services ............................................................................................................................. 13 Marketing Strategies that can be adopted by Sharekhan ltd. ................................................................. 14 Tele Calling: ....................................................................................................................................... 14 LMS: .................................................................................................................................................. 14 Yellow Pages:..................................................................................................................................... 14 Canopies:........................................................................................................................................... 14 Direct Marketing ............................................................................................................................... 14 Advertising: ....................................................................................................................................... 15 3

Internet ............................................................................................................................................. 15 SWOT Analysis....................................................................................................................................... 16 STRENGTHS ....................................................................................................................................... 16 Services ......................................................................................................................................... 16 Distribution Network ..................................................................................................................... 16 Marketing ...................................................................................................................................... 16 Products ........................................................................................................................................ 17 WEAKNESS ........................................................................................................................................ 17 Customer Satisfaction .................................................................................................................... 17 Branding ........................................................................................................................................ 17 Competition from other players ..................................................................................................... 17 OPPORTUNITIES ................................................................................................................................ 17 Ever-increasing market .................................................................................................................. 18 Improving Technology ................................................................................................................... 18 Unfulfilled needs of the customers ................................................................................................ 18 Education Level.............................................................................................................................. 18 THREATS ............................................................................................................................................ 19 New Competitors ........................................................................................................................... 19 ACTION PLAN FOR COMPLETION: .......................................................................................................... 20 REFERENCES: ......................................................................................................................................... 21

ABSTRACT
The report titled Marketing and Promoting Portfolio Management Services at Sharekhan ltd. is aimed at studying the features of Portfolio Management Services provided by Sharekhan ltd. The project also includes an online survey to know the exact size of the market along with drafting the market size of PMS services of Sharekhan ltd. The project also deals with the study of marketing strategies that can be implemented by Sharekhan ltd. so that its Portfolio Management Services can reach out to the target audience. The project then moves to second phase where a questionnaire is prepared to know the exact needs of existing and potential customers. The questions are aimed at knowing the perception of an individual towards Portfolio Management Services, expectation of the existing and potential customers, other players in the market, respective market share of all the firms and right medium to communicate the product. Then the data is analyzed and suggestions for changes are made. The next part aims at designing the marketing strategies and brand elements for Sharekhan ltds Portfolio Management Services. The methodology adopted so far is to devise a marketing strategy and do SWOT analysis for Sharekhan ltd. s PMS.

INTRODUCTION
This project describes a proposed process for marketing and promoting Sharekhan ltds Portfolio Management Service which is a specialized service that offers a range of specialized investment strategies to capitalize on the opportunities in the market. This particular report describes the procedure for the completion of first phase of the project, which includes study of PMS provided by Sharekhan ltd. and its features along with the marketing strategies adopted by Sharekhan ltd. This process can be carried out without the need of any custom-built software because it is mostly manual. Although the proposed process requires considerable amount of manual effort, due diligence has been done to make it vigorous. This phase will also include preparation of questionnaire to know the perception of people towards PMS, their expectations, risk appetite, preference while choosing a share-brokerage firm.

Purpose of the Project

In todays complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investment without capital erosion. Portfolio Management Services recognize this and manage the investments professionally to achieve specific investment objectives, and not to forget, relieving the investors from day to day hassles which investment require. Sharekhan ltd, one of the leading retail brokerage firms in the country, has come up with a solution for investors who do not have much knowledge or time to invest their money wisely. This solution is Portfolio Management Service The purpose of the project is marketing and promotion of Sharekhan ltds Portfolio Management Services. This includes a basic study of features of Sharekhan ltd.s PMS, andmarketing strategies to promote the PMS provided by sharekhan.

Limitations
There are few limitations regarding the scope of the study;

1. Time Frame a. Since the time stipulated for the SIP is only twelve weeks hence, it is difficult to analyze the needs of the target segment to develop the service further and market the same using both traditional and new media. 2. Information Crunch: a. Since there is no readymade documentation available at Sharekhan ltd, I have to go through the web to get necessary data but again confidential data related to the company is not available. b. Other organizations are not prepared to share information related to their marketing strategies. This is useful for developing effective strategies for Sharekhan ltds PMS.

Scope of Study
The scope of current phase of the project is limited to improvising the brand elements and marketing strategies.

Methods of Collecting Data and their Sources

Data has been collected from both primary and secondary sources. Information required for the first phase of the project which includes comparative analysis of various share-brokerage firms providing PMS which has been gathered from the respective company website and other online sources. The information related to current marketing strategies implemented by Sharekhan ltd. to market PMS were gathered through one on one discussion with Mr. Shashi Kumar P, Advisory Manager, Sharekhan ltd. The primary information which includes perception of people towards PMS, data like current firm they are dealing with, and the right medium for communication will be gathered through questionnaire.

The information gathered through the discussion with Mr. Shashi Kumar P, Advisory Manager, Sharekhan ltd.(Hyderabad) can also be considered as primary data as the purpose of the discussion is directly related to the project.

Literature Review
1. http://www.indiainfoline.com/Markets/News/PMS-business-grows-118-percent-to-Rs.5.14-trillion-in-April-2012/5424698587 Summary: The website gives the exact size of the investors investing in Portfolio Management Services in India. The size of the market for PMS mentioned in the above site is 70642. This means that a total of 70642 investors in India have a PMS account, out of which 64,688 have opted for discretionary PMS and 5954 have opted for non-discretionary PMS. Gap: Even though the site provides the size of the existing investors, it fails to provide an approximate figure of the potential investors which can use PMS. 2. http://www.sharekhan.com/Brochures/74/PMSProductHome.htm Summary: The website provides various features of PMS and its benefits to the investors along with the fee structure and minimum investment requirement. Gap: Nothing is mentioned about the size of the market, clients.

Secondary Sources
The best practices have been studied via online survey of the referenced websites and an ideal format has been produced on the project proposed.

Primary Sources
The primary sources include information from questionnaire, interaction with existing and potential customers and the staff of Sharekhan ltd.

Sharekhans PMS and its features:

Sharekhan provides the facility of PMS to its customers which helps the investors to sit back, relax and see their money grow without worrying about the ups and downs at the stock market. Sharekhan has a team of expert portfolio managers who help the customers to choose a PMS plan suiting the investors risk taking appetite and expectation from the market. There are two types of PMS in Sharekhan ltd.

ProPrime Portfolio:
ProPrime uses in-depth independent fundamental research through primary analysis in high quality companies. The ProPrime line is designed for varying risk-return profiles and investments.
Product Approach

a. Investment will be keeping n mind three tenets: b. Consistent, steady and sustainable returns c. Margin of safety d. Low volatility
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Product Offering

ProPrime is ideal for investors looking for steady and superior returns eith low risk appetite. PMS ProPrime uses the expertise of 35 financial analysts to get the best possible returns. The portfolio consists of relatively large capitalization stocks, based on sectors and themes which have medium to long term growth potential.
Product Characteristics

a. Bottom up stock selection b. In-depth, independent fundamental research c. High quality companies with relatively large capitalization d. Disciplined valuation approach e. Medium to long term vision, resulting in low portolio turnover

How to invest?

a. Minimum investment: 25 Lacs b. Lock-in period: 6 months c. Reporting: Online access to portfolio holding and quarterly reporting of portfolio holding/transactions. d. Charges: 2.5% pa, AMC fee is charged every quarter, 0.5% brokerage, 20% profit sharing

ProTech Portfolio
ProTech uses the knowledge of technical analysis and the power of derivatives market to identify the trading opportunities in the market. The ProTech line of products are designed around various risk/rewards profiles for different kinds of investment needs.
Product Approach

Absolute returns are targeted by focusing on finding trading opportunities and not out-performance of an index.
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Product Offerings

Nifty Thirty Nifty futures will be bought and sold on the basis of an automated trading system generated calls to go long/short. The exposure will never exceed the value of portfolio i.e. no leveraging; but allows us to be short /hedged in Nifty in falling market therefore allowing the client to earn irrespective of the market direction. Beta Portfolio Posit ional tra ding opport unit ies are identified in the future segm e n t b a s e d o n technical analysis .Inflection points in the momentum cycles are identified to go long/short on stock/index futures with 1 -2 months time horizon .The idea is to generate the b e s t p o s s i b l e r e t u r n in t he medium term irres pect ive of t he direct ion of the market without really leveraging beyond the portfolio value. Risk protection is done based on stop losses on daily closing prices. Star Nifty: Swing trading technique and D ow theory is used t o i d e n t i f y s h o r t t e r m r e v e r s a l levels for Nifty futures and ride with trend both on the long and short side .This return can be earned in bull and bear market .Stop and reverse means to reverse ones positio n from long to short or vice a versa at the reversal levels simultaneously .The exposure never exceeds value of portfolio i.e. there is no leveraging. Trailing Stops. Momentum trading techniques are used to spot short term momentum of 5-10 days in stocks and stocks /index futures .Trailing stop loss method of risk management or profit protection is used to lower the portfolio volatility and maximize return .Trading opportunities are exposed both on the long side and the short side as the market demands to get the best of both upward and downward trends.
Product Characteristics

a. Using swing based index:trading systems stop and reverse trend foll owing and momentum trading technique. b. Nifty based products for low impact cost and low product volatility c. Both long and short strategies to earn returns even in falling market. d. Trading in future market to allow for active risk protection using trailing stop losses.
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How to invest?

a. Minimum: Rs.10 Lacs b. Lock in: 6 months c. Reporting: Fortnightly reporting of portfolio Net Worth, monthlyreporting of portfolio Holding d. Transaction Charges: 0% AMC (Annual Maintenance Charges , 0.05% brokerage for derivatives, 20% profit sharing on booked profit quarterly basis

Advantages of Sharekhans PMS

Highly expert fund managers Disciplined approach Time saving Complete transparency Structurally better

Post sales services

Detailed Portfolio reports are available at timely basis like: a. Investment summary b. Portfolio holding c. Transaction statement d. Bank book e. Realized/Unrealized gain/loss details f. Fee statement g. Corporate benefits h. Fund managers report Dedicated client services team

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Marketing Strategies that can be adopted by Sharekhan ltd.

Tele Calling:
The company can use the mode of telecalling/phone calling to reach the customers who are interested. This is the most important technique to save time and give demo of the companys product through making calls in order to know the customer interest towards the product. This is the strategy with which one can motivate customer to go for the product.

LMS:
It is leads management system which means leads are generated by knowing the customers who want to purchase the product of the company. Company can provide the facility to the customer online to fill the registration form through which the companys executives can provide more information to the customer.

Yellow Pages:
Yellow pages are used to gather data for making calls so that customer who do not have time and are unaware of the product can know about the product. Customers should be given freedom to ask questions related to the products, this technique is used to increase the awareness about the company.

Canopies:
This is the most important technique which can be used by Sharekhan to market its products in different areas of the city, company can put their canopies outside offices and big corporate houses, so that people who are interested to invest can know about the services in detail. It also increases the awareness about the company and its product/services among people.

Direct Marketing
Sharekhans executives can reach door to door of the customers by fixing appointments with the interested customers, they can describe the details of the product.

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Advertising:
Advertising is the most important tool for increasing awareness of the product and this is the most widely used technique by the companies to tell about the new features and new launch. Sharekhan can use print media as well as electronic media to reach out to the potential customers.

Internet
Sharekhans website is not as informative as its counterparts, sharekhan should make its website more interactive and there should be detailed information about the services and its features.

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SWOT Analysis
SWOT analysis focuses on the internal and external environments, examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment.

STRENGTHS
Services

One of the major strength of Sharekhan ltd is its after sale services. Sharekhan has a team of dedicated executives who guide and advise their clients at the best of their knowledge. PMS account holders can make their dealings over the phone or even on the internet, Sharekhan sends the investors the progress of their accounts on monthly basis, so the investors can sit back, relax and watch their money grow.
Distribution Network

Sharekhan with almost 250 branches spread across 123 cities beefed up by comprehensive online research, advice and transaction services. In near future expect to

make 200000+ retail customers being serviced through centralized call centre/web solution, 60 branches/semi branches servicing affluent/aggressive traders through highly skilled financial advisors, 250 independent investment managers/franchisees servicing 50000 highly valued clients, strong advisory role through Fundamental & technical research and

new initiatives are being made in Portfolio Management Services & Commoditiestrading.
Marketing

Sharekhan is a product of SSKI, a veteran equities solutions company with over decades of experience in the Indian stock markets. Sharekhan does not claim expertise in too many things. Share khans expertise lies in stocks and that's what it talk s about with authority. So when they says that investing in stocks should not be confused with trading in stocks or a portfolio-based strategy is better than betting on a single horse, it is something that is spoken with years of focused learning and experience in the stock markets.

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Products

Companys PMS product line is quite flexible in the sense that there is a product for every kind of investor suiting their risk appetite. Also all the products cover all the loopholes of all the products offered by the other competitors like low cost, user-friendly online trading services etc.

WEAKNESS
Customer Satisfaction

As far as customer satisfaction goes Sharekhan has to tighten their socks. Many broking house catering to heavy investors or small segment of the market can afford to and does provide relationship managers for their customers, who can understand the trading

needsof individual customers, and advise accordingly. However, a broking house likeSharekhan, which caters to the mass segment, is in no position to provide relationship managers for individual customers.
Branding

Though

the

company

has

efficient

products

but

large

part

of

investment

interested population does not know the company. The most basic expectation for a trader or investor when one begins trading is that one must get timely delivery of shares and proceeds from sale of shares. Also ones cash balances with the broker must be safe and secure. Though this confidence in the broker comes with time and experience, good and transparent practices also play a major role in imbibing confidence in traders.
Competition from other players

Most of the other players like Kotak Securities due to being an old player have the faith of the customers as they are in the market for over a decade. Sharekhan charges much more profit sharing margin as compared to its competitors which is a main reason for investors opting for other PMS providers as Indian investors are quite sensitive to price.

OPPORTUNITIES
The external environment analysis may reveal certain new opportunities for profit and growth.

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Ever-increasing market

The minimum investment requirement of opening a PMS account is Rs. 25 Lacs, and in a country with population over 1.2 billion, there are many investors who are capable enough to use the facility of PMS, Sharekhan just needs to identify and target those customers. Sharekhan has been a mega player and is known for being a mover of stocks. It is also known for putting big deals through and enjoys good networking with the FIIs. It has been dynamic enough to move with the times and capture the opportunities that the market throws up from time to time.
Improving Technology

In country like India technology is always improving which gives the company a chance to keep on improving their product with time whereas for the small players like local brokers it will be difficult to keep the same pace as the changing technology. Also with SEBI lying down some strict guidelines small brokers are finding it harder to retain the customers with no research department and small capital. The traditional business model is highly dependent on a large network of sub-brokers, and many established players may not have systems (technology, customer service, etc.) capable of directly servicing so many retail customers.
Unfulfilled needs of the customers

With so many competitors offering their products in the market but no one is able to completely satisfy the customers. Some have the problem of lack of information or some are scared of volatility of the stock markets. Sharekhan has the opportunity to tap this unsatisfied set of customers and to make hold in the market. The Internet serves to break all barriers to information, as it offers an extremely hassle-free investing platform. And, Sharekhan hopes to fully utilize and capitalize on this platform. This original idea by Sharekhan itself was born out of the consumer's need for a more transparent, easy to understand and convenient option of investing in stocks.
Education Level

The education level in the country is improving year after year as far as technology goes. With that the understanding of the stock market is also increasing and a lot of retail investors are steeping in the markets which is being shown by increasing volumes, transactions and indices.
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THREATS
New Competitors

A lot of new competitors are trying to enter the market in this bullish run to taste the flavor of this cherry. This is creating a lot of competition for large players like Sharekhan and it is creating little confusion in the minds of the customers about the services provided by the broker. Also many banking firms are entering into the market with huge investment. Competitors like icici, kotak, hdfc, 5-paisa etc. are posing a lot of threats to the company.

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ACTION PLAN FOR COMPLETION:

This was the plan that has been mentioned previously in the Project proposal and I have been able to adhere to it successfully till now.

The questionnaire has been prepared and pilot study of the same is being conducted, the process of report generation has already been started and the report will be finished till 20 th May, 2013.

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REFERENCES:
1. http://www.sharekhan.com/Brochures/74/PMSProductHome.htmwww.tcsion.com 2. http://www.indiainfoline.com/Markets/News/PMS-business-grows-118-percent-to-Rs.5.14-trillion-in-April-2012/5424698587 3. http://qna.rediff.com/questions-and-answers/sharekhan-s-pms-proprime-and-pro-techreview-i/17852272/answers 4. http://www.indiansharemarket.org/indias-top-10-stock-broking-house/ 5. http://www.business-standard.com 6. http://www.bloomberg.com 7. http://iifl.com 8. http://www.allvoices.com/contributed-news/6150929kotaksecuritiespmsfeatureswww.skytec.com 9. The financial express news review. 10. The Hindu news review article

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