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Service Failure at Axis Bank: A Celebrity Lesson

CASE STUDY, MARKETING MANAGEMENT
ET Cases, 10 Pages
AUTHOR(S) : Kshitiz Sharma, PhD, Associate Professor, ABBS School of Management, Acharya Bangalore B School and Gopal V. V., PhD, Associate Dean, Narsee Monjee Institute of Management Studies, Bangalore

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Service Failure at Axis Bank: A Celebrity Lesson

Dipika Pallikal (Dipika) was the top-seeded Indian squash player and the first Indian woman among the top ten of the WSA rankings. Arjuna Awardee (2012) Dipika was the youngest ever Padma Shri awardee (2014) too. Born on September 21st 1991 in Chennai (Tamilnadu state, India), Dipika was playing squash from the age of ten. She grew up in a sports environment at home as her mother Susan was the captain of the Indian women’s cricket team and her father Sanjiv Pallikal played college-level cricket.

She played her first international squash tournament in London, 2003. In 2012, she became the first Indian to reach the finals of the Tournament of Champions squash meet in New York.

Dipika turned into a professional player in 2006 by joining WSA at the age of 15. She featured as a qualifier in the first round of the Hurghada International and Los Angeles Open before winning the British Junior U17 Open in 2008. Her first WSA World Tour title came in 2010 at the Indian Challenger No5 in India where she beats the then top two players Sharon Wee (Malaysia) and Emma Beddoes (England).

In 2011, she won the Equinox Orange County Open and the Dread Sports Series in United States. In the same year, Dipika reached the quarter-finals in the World Open in Rotterdam. Dipika continued her winning streak at various prestigious championships viz., the Crocodile Challenge Cup, Hong Kong (Winner-2011); Tournaments of Champions, United States (2012-Runner Up); Australian Open, (2012- Semi-finalist); Meadow Pharmacy Open, Canada (2013); Macau Squash Open, China (2013); Winipeg Winter Club Open, Canada (2015)........

The First Ordeal

In 2011, Dipika visited Rotterdam, Holland and participated in the Cathay Pacific Sun Hung Kai Squash Open championship. She initially stayed at the Brainpark Hotel, Rotterdam. Before her first round play she had to relocate to another hotel. She used her Axis Bank debit card to settle the hotel bills of about 490 Euros. The card was declined and the transaction did not go through. Dipika was surprised since she had sufficient balance in her account. The situation embarrassed her......

The Nightmare Continues

A month later in 2011, Dipika deposited a cheque of INR100,000 (1355 Euro) to be credited to her Axis bank account. The cheque was an award by Union Sports Ministry, Government of India, for her contribution to the field of sports. Axis bank did not credit the money and instead returned the cheque stating ‘not drawn to us’. After some persuasive correspondence from Dipika, Axis bank eventually credited the amount to her account. Axis bank defended its failure in honouring a government cheque to a ‘technical error’...........

Bank’s Defence

Refusing to accept any blame, Axis Bank adopted a fault finding approach. In its affidavit filed in the court, the Bank stated: “The very fact that the complainant is not able to take the slightest disturbance would prove that she lacks the requisite mental toughness of a world champion.” It attributed the debit card transaction failure to an ‘act of God’. Axis Bank went on to say, “She is only making excuses for her non-performance and it is unfortunate and unethical to allege criminal acts on the bank for a technical failure that took place in a foreign soil on which bank has no control.”......

Service Industry in India

The services sector contributes 66.1% to India’s Gross Value Added growth (GVA in 2015-16) and has emerged as the largest and fastest growing sector of the Indian economy. Besides being the dominant sector, it has also contributed substantially to foreign investment flows, exports, and employment. India’s services sector encompasses a variety of businesses. Some services like IT and telecommunications are very sophisticated, involving high technology and expertise, while some are simple like those of barbers and plumbers..........

Emergence of Axis Bank

Axis Bank (formerly UTI Bank) was among the first new generation private sector banks operationalized in 1994. The Bank was jointly promoted in 1993 by government entities Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.........

Debit Card Operation

There are three types of Debit cards each supported with a distinct transaction technology. They are online debit cards, offline debit cards and prepaid debit cards. Most debit cards are online cards in which funds are immediately deducted from the consumer’s deposit account. Offline cards come with a delayed settlement similar to credit cards. The third variety is prepaid cards (smart card) where prefixed denominations apply and one cannot use the card beyond the prefixed limit (it’s as good as a gift card). Consumer’s bank account is not debited in the case of purchase. The card value diminishes by the amount of the transaction.........

The Brand Suffers a Setback

Over the recent past, Axis Bank was investing in brand building efforts by advertising through the print and electronic media. According to Harish Bijoor, Brand Expert and CEO, opined “Issues such as this (Dipika Pallikal issue) ruin reputation. Axis Bank is in the news for the wrong reasons due to this issue. The issue seems to be one of non-performance as far as the bank is concerned” According to him, the problem is more a lack of service mechanism in place than a failed transaction.......

The Impact of Absence of Recovery Strategy

On March 24th 2014, Dipika won her long-drawn legal wrangle against Axis Bank in the consumer court of District Consumer Redressal Forum, Chennai. Holding Axis Bank responsible for deficient service, the consumer court ordered the bank to pay a compensation of INR500,000 to Dipika as well as INR5,000 towards costs.........

Discussion Questions

Based upon the above information discuss the following questions:

I. What are service expectations of customers like Dipika from bank?
II. What are the challenges of service delivery?
III.......

Exhibits

Exhibit I: Debit Card Transaction

Annexure

Annexure I: Card Transaction Cycle

Annexure II: Master Card

Teaching Note Preview

Service Failure at Axis Bank: A Celebrity Lesson

Synopsis

In 2011, Dipika , top-seeded squash player from India went to participate in an international event in Holland. The Axis bank debit card that she was carrying declined in spite of having sufficient funds and player had to face trouble which impacted her performance in the event also. Later in another event, the same bank returned a cheque issued by Union Sports Ministry, Government of India stating the cheque ‘not drawn on us’. When contacted Axis bank, the bank accused player for lack of mental toughness and was reluctant to take any recovery of the said failure. The case discusses about the service expectations of the customer from a premium brand like Axis and how technology cannot be seen separately from the service offered to satiate the customer. It also highlights how customer tolerance level changes with different dimensions of the service. The case concludes with the court’s order to compensate the customer for bank’s inability to offer necessary support and services to the customer.

Case Positioning and Setting

This case is suitable for MBA program in the Marketing of Services module of a core marketing course. In a Marketing of Services course, this case can be used in the first half of the course dealing with Customers’ Expectations, Customers’ Complaints, Service Recovery, and Customers’ Role in Service Delivery.

Expected Learning Objectives

• Understand the customer expectations and perception for services related to debit and credit card
• Highlight the service failure instances and recovery mechanism in place
• Analyze the impact of brand dilution with service failure and lack of service recovery strategy

Assignment Questions

I. What are service expectations of customers like Dipika from bank?
II. What are the challenges of service delivery?
III....................

Exhibits

Exhibit (TN)-I: Classroom Discussion Board

Exhibit (TN)-II: Zone of Tolerance

Exhibit (TN)-III: Zone of Tolerance across Service Dimensions

Exhibit (TN)-IV: Banking Service Dimensions

Exhibit (TN)-V: A Service Branding Model

Exhibit (TN)-VI: Service Recovery Strategy suggested for Axis Bank

Exhibit (TN)-VII: Customer Response Following Service Failure

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Abstract

Quality of service rendered is the edifice on which service firms such as banks build their reputation. Due to occasional demand surge and heightened levels of interactions with the bank staff, service failures are likely to occur. The net result could be customer attrition and at times even loss of reputation.

Ace Indian squash player Dipika Pallikal faced acute embarrassment when her payment through Axis Bank debit card was rejected at Brainpark hotel, Rotterdam, Holland in 2011. In just a month after the Brainpark incident, her banker dishonoured a government cheque deposited by her. This came as a double whammy to Dipika.

All she could do was to knock on the courts’ door for justice. What went wrong and where? Could the bank not deal with the issue more professionally? To what extent is the bank responsible for the failure of a third-party system?

Pedagogical Objectives

  • Understand the customer expectations and perception for services related to debit and credit card
  • Highlight the service failure instances and recovery mechanism in place
  • Analyze the impact of brand dilution with service failure and lack of service recovery strategy

Case Positioning and Setting

This case is suitable for MBA program in the Marketing of Services module of a core marketing course. In a Marketing of Services course, this case can be used in the first half of the course dealing with Customers’ Expectations, Customers’ Complaints, Service Recovery, and Customers’ Role in Service Delivery.



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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