marketing strategy - axis bank
DESCRIPTION
Axis Bank marketing strategy presentation submitted as part of group assignment on Marketing Strategy by our SMP09 group. Presentation submitted to Prof. Ramanuj Majumdar, IIMC Kolkata.TRANSCRIPT
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Marketing Strategy - Axis Bank
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Historical background
• The first major event of Indian banking was the creation if Imperial Bank of India by merging Bank of Bengal, Bank of Bombay and Bank of Madras in 1920
• Between 1906 to 1913 Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank and Bank of Mysore were setup
• Other two banks setup under colonial rule are Allahabad Bank and Punjab National Bank
• The Current Banking regulator came in to existence on April 1, 1935 • In 1949 Government of India promulgated Banking regulation Act 1949 through
which RBI was vested with extensive powers for the supervision of banking in India as the Central Banking Authority
• In 1955 the Imperial Bank was nationalized and State Bank of India along with its subsidiaries were nationalized
• In the year 1969 all other private banks were also nationalized and the private banking in India was almost reduced to zero
• It was post liberalization in 1991 when the banking sector was opened-up again for private players
• Today we have 23 Private bank and 29 foreign private Banks having their operations in India
• Axis Bank (Formerly known as UTI) begun operations in 1994 • It got itself renamed as Axis Bank from UTI Bank in the year 2007
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Marketing trends in banking sector
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Traditional Banking Period up to 1969
Development Banking period 1969 to mid 1980’s
Bank Marketing period After mind 1980’s
Accounting Orientation
Selling Orientation
Towards Marketing Orientation
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Period Banker’s Major Orientation
Banks approaches towards customers and market underwent changes and focus was gradually shifted to marketing their products.
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Marketing trends in banking sector .contd.
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The fantastic increase in needs and expectation of banking customers, important factors for this change are
• The spread of Television, including access to international channels,
• Rise of Indian middle-class with considerable financial resources and higher propensity towards consumption,
• Entry of foreign and private sector banks in India,
• Break-up of the joint family system in urban India,
• Govt. intervention for protecting the interest of consumers.
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Origin
• The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI) and – Life Insurance Corporation of India (LIC). – General Insurance Corporation Ltd (GIC). – National Insurance Company Ltd. – The New India Assurance Company. – The Oriental Insurance Corporation. – United Insurance Company Ltd.
• It got itself renamed as Axis Bank from UTI Bank in the year 2007.
• Oglivy and Mather was the company engaged for this rebranding exercise.
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Growth
• Third largest Private Sector Bank in India • 1947 Branches and 11,245 ATM’s spread across the country • Has operations in Singapore, Dubai, Hong Kong, and Abu Dhabi • Balance sheet size of over 3.4 lac crores in Mar 2013 • Vision
– To be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology.
• Core Values – Customer Centricity, Ethics, Transparency, Teamwork, Ownership
• Business – Retails Banking: Personalized Banking services for individuals – Business Banking: Covering SME segment – Corporate Banking: For large corporate – Treasury operations – Agri Loans: Rural presence – Mutual fund and asset management – Financial consultancy
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Annual Results - 2013
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Snapshot (As on March 31, 2013)
Total Assets ₹3,40,561 crores
Net Advances ₹1,96,966 crores
Total Deposits ₹2,52,614 crores
Net Profit (Q4FY13) ₹1,555 crores
Net Profit (FY13) ₹5,179 crores
Shareholders’ Funds ₹33,108 crores
ROA (for FY13) 1.70%
ROE (for FY13) 20.51%
Net NPA Ratio 0.32%
Capital Adequacy Ratio 17.00%
Tier 1 CAR 12.23%
Saving Bank Accounts
(No.)
127 lac
Branches2 1,947
Foreign Offices 7
ATMs 11,245
Performance Highlights Q4 FY 2013 FY 2013
Net Profit 22% YOY 22% YOY
Net Interest Income 24% YOY 21% YOY
Fee Income 22% YOY 17% YOY
Operating Revenue 25% YOY 21% YOY
Operating Profit 37% YOY 25% YOY
Net Interest Margin 3.70% 3.53%
CASA1 23% YOY
CASA (Daily Average) 14% YOY
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Performance Overview
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• Operating Revenue grew 25% YOY, stood at Rs. 4,672 crores
• Operating Profit rose to Rs. 2,800 crores, registered growth of 37% YOY
• Return on Assets stood at 1.94% and Return on Equity at 21.38%
• Well positioned for future growth with Tier I CAR of 12.23% and Total CAR of 17.00%.
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Business Overview
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• Multiple channels drive business growth
• Extensive use of technology to provide services
• Expanding footprint across centres
• Largest ATM network in the private sector
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SWOT analysis
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STRENGTHS • One of top three positions in terms of fastest
growth in private sector banks. • Has a network across India through Branches and
ATMs with its presence in 971 cities and towns. • Brand Name • Knowledge of Indian Market
WEAKNESSES • Majorly concentrated in corporate, wholesale
banking, treasury services, retail banking • Foreign branches constitute only 8% of total
assets • Customer service has to improve a lot in order to
be in race with other major players
THREATS • Growing competition from global players • Consolidation of public sector banks • Permission for new private sector players,
increase in competition: Customer retention will be a key
• ICICI and HDFC are imposing strong threats in terms of their expansion in customer base by their aggressive marketing strategies
OPPORTUNITIES • Acquisitions to fill gap • Multiple businesses synergies • Global foot print • Technology as a lever for differentiation and cost
reduction • Geographical expansion to rural market – 80% of
them have no access to formal lending • Concept of ETM (Everywhere teller machine) had
a good response in attracting new customers in personal banking segment
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Marketing strategies: 7Ps analysis • Product
– Accounts: Easy Access Accounts, Prime Savings Account, Salary Account, Women’s Saving Account, Senior Privilege Account, Defense Salary Account, Trust & NGO Savings Account, Azzadi –No frills RFC (D) Account, Pension savings Account
– Deposits: Recurring deposits, Fixed Deposits, Encash 24,Tax Saver Fixed Deposits, Loans, Home loan
– Loans: Personal loan, Loan Against Property, Loan Against Security, Car Loans, Study Loans, Two Wheeler Loan, Consumer Loan
– Investments: Online Trading, Mutual Funds, Fixed Income, Depository Services
– Insurance: Health Insurance, Family Health, Health Guard
• Price – Axis bank has developed innovative strategies against its competitors
with respect to pricing by use of technology. – The creation of centralized processing system linking all its branches has
been a major strategic move in this regard.
• Promotion – Cross Selling exercises – Organizing school level painting competitions in order to create
awareness about the environmental concerns and the wild life to promote kids advantage account.
– Wheels of fortune - This promo are targeted at all those customers who avail a personal loan, car or a two wheeler loan. There will be lucky draw at the end of the promo and the winners would get exotic prizes.
– Personalized promos by sending mailers about various products on offer to all those who come in contact during the mass promotion strategies.
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Marketing strategies: 7Ps analysis ..contd.
• Place – Axis bank is widely spread in India – 947 branches and 11,245 ATMs – extension counters foreign offices
• Process – Developed a robust internal as well as external business process and sales practices – focused on the process development and bringing transparency to all the
transactions
• Positioning – Centralized phone banking centre – Centralized collection and payment hub
• People – constant endeavor to continuously develop its human resources by laying strong
emphasis on training development – possesses a highly motivated team of professionals and has the lowest employee
turnover rate in the industry
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Other strategies
• Segmentation Strategy – Demographic Variables - Demographic segmentation variables are amongst the most
popular bases for segmenting customer groups which include Location, Occupation, Age etc.,
– Psychographic Variables - Lifestyle, The people who believes in modern banking i.e. internet banking (I-contact, mobile recharge, e-payment, travel currency card etc.)
– Social class - Many Marketers believe that a consumers "perceived" social class influences their preferences for products & services
• Targeting strategy – Corporate banking market: this market target the industries – Capital market: this segmented is targeted on the long term needs of the individual
as well as of industries – Retail banking market: this segment is for the retail investor and provide them short
term financial credit for their personal, household needs
• Selective specialization strategy – axis bank have different set of credit cards, each targeted at different set of people
• Positioning Strategy – Customer centric – Service oriented – Product innovation
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Other strategies • Cross selling- Cost reduction strategy
– It launched Airtel money Super Account powered by Axis Bank’, a no-frills savings bank account of Axis Bank on Airtel’s mobile platform, in partnership with Infosys.
– Money transfer with cash-out now available across leading remittance corridors; customers can save money and earn interest too
– Resulted in • Almost all SME customers have Current Accounts with the Bank • Nearly 1/3rd of SME customers avail FOREX products • Integration with Wealth Management resulted in high fee based income
• Relationship marketing strategy – 78% of SME Customers have rated overall quality of RM highly – Key strengths of RM model as per the IMRB survey are Availability,
Knowledge level, Timely product and service delivery, Promptness in responding to queries
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• Internet Banking Strategy – offered a unique platform for all its customers
both the individual as well as corporate customers to complete transactions online
– presence on all the 4 major social media platforms – Facebook, Twitter, YouTube and Linkedin
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Thanks
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• References • http://www.axisbank.com • http://www.rbi.org.in • http://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdf • http://www.jmijitm.com/papers/130082034035_42.pdf