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Banking

in India Market Environment Axis Bank Market Survey Customer Competition Segmentation, Targeting and Positioning 4Ps Brand Axis

OBJECTIVE

Originated in the last decades of 18th century (General Bank of India 1786 and Bank of Hindustan - 1790).

Banking in India - History

Presidency Banks (Bengal, Bombay and Madras) under charter of British East India Company. Banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. The period between 1906 and 1911 - Swadesi movement. The presidency banks merged in 1921 to form Imperial Bank of India. After Indias independence it came to be known as the the State Bank of India (SBI). Hence SBI becomes the oldest bank in the country.

P-E-S-T Analysis : Socio-Political factors


The economic effects of partition on Punjab and West Bengal.

The Government of India envisaged a mixed economy.


Greater involvement of the state in banking and finance. Nationalisation of The Reserve Bank of India, India's central banking authority in 1949. By the 1960s, the growth of Indian banking industry and emergence of banking as a large employer prompted the government for nationalizing banks.

Market Environment

The Government of India issued an ordinance and nationalized the 14 largest commercial banks in 1969. A second dose of nationalization of 6 more commercial banks followed in 1980.

P-E-S-T Analysis : Economic factors.

Until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. In the early 1990s, the then Narasimha Rao government liberalized the crippled Indian economy and introduce banking reforms, licensing a small number of private banks to come into market which included Oriental Bank of Commerce, UTI Bank(now Axis), ICICI Bank and HDFC Bank. With the opening of economy the foreign banks also jumped into the market. This move, along with the rapid growth in the economy of India (7 %), revitalized the banking sector in India, which since then has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.

Market Environment

P-E-S-T Analysis : Technology factors.

Come 21st century in which internet and mobile technology revolution changed the way business was done. ATM and Internet Banking became the norm. The rise of plastic money in credit cards and debit cards. The new tech-savvy methods of working of traditional banks. Hence all the politico-economic changes, coupled with technological innovations in IT and mobile communications, set the pace for the banking industry to grow at accelerated rates and private banks made the most of it.

Market Environment

The UTI Bank was one of the first private sector banks which were set up after the reforms in the banking sector in India. UTI Bank was formed in 1994. The Bank was promoted jointly by Unit Trust of India (UTI), LIC and General Insurance of India (GIC).

Axis Bank (Erstwhile UTI)

On July 30, 2007, UTI, the third largest private sector bank in India officially changed its name to Axis Bank. The decision for rebranding. The opportunity from rebranding.

CHALLENGES FACED :

Rebranding Case for Mergers and Acquisitions only. Impression of fundamental changes in the company as part of name change. Well established brand of UTI(Top 50). Quasi Government Connotation of UTI. Protecting customers from fraud;

Axis Bank - Rebranding

MARKETING CAMPAIGN

The bank hired Ogilvy & Mather (O&M) to design and implement the rebranding campaign. In addition to changing its name, the bank also changed its logo. The banks concern. The marketing budget was raised to thrice that of 2006.

MARKETING CAMPAIGN

Axis Bank - Rebranding

The integrated marketing campaign titled 'UTI Bank is now Axis Bank; Everything is the same except the name'.

Twins both Equal.

Mass media campaign. Leveraging on its 2,500-odd ATM locations. Communication through account statements.

Axis

Bank Company Facts


COMPANY FACTS

Chairman / Chair Person : Adarsh Kishore Managing Director & CEO: Shikha Sharma Website : BSE Code : NSE Code : http://www.axisbank.com 532215 AXISBANK

Consumer

Survey
CONSUMER SURVEY

Online survey Customer feedback Bank visit

Presentation

of survey results

SURVEY RESULTS

SURVEY RESULTS

REASONS FOR CLOSING AN ACCOUNT

CUSTOMER SATISFACTION LEVELS FOR THE SERVICES PROVIDED

CUSTOMER SATISFACTION LEVELS FOR THE SERVICES PROVIDED

Source : National Journal of Technology and Management

TANGIBLES
5.8 5.7 5.6 5.5 5.4 5.3 5.2 5.1 5 4.9 4.8
Expectation Perceived 6 5 4 3 2 1 0 Axis Bank 5.5 5.1 HDFC 5.7 5.4 ICICI 5.7 5.4 Expectation Perceived

RELIABILITY

COMPARISON BETWEEN AXIS HDFC AND ICICI BANKS

Axis Bank 4.9 4

HDFC 5.6 5

ICICI 5.7 5.4

ASSURANCE
6 5 4 3 2

RESPONSIVENESS
6 5 4 3 2 1 0 Expectation Perceived

1
0 Expectation Perceived Axis Bank 4.9 4.3 HDFC 5.5 5 ICICI 5.4 5

Axis Bank 4.8 3.6

HDFC 5.4 4.7

ICICI 5.5 4.8

ROLE OF CRM IN BANKING SECTOR

CUSTOMER RELATIONSHIP MANAGEMENT

AXIS BANK: THE RIGHT PHONE BANKING CRM SOFTWARE


SEPARATION OF RELATIONSHIP MANAGEMENT AND TRANSACTION PROCESSING

Most of the existing customers of account holder were satisfied with the facilities provided by the bank. Lack of qualified marketing executive sales persons.

CONCLUSION FROM THE SURVEYS

Provide a wide range of product service and investment plans. Customer service should be improved. The expectation and perceived performance of Axis Bank is low compared to HDFC and ICICI Bank. Two key aspects for improvement 1.Employees commitment towards the customer 2.Giving personal attention to customers.

Customer

convenience
Cost

CONSUMER BEHAVIOUR

effective customer delivery


use of technology

Advanced

Competition Who are Axis Banks major competitors


COMPETITION

Potential Entrants Threat Low

PORTERS 5 FORCES

Suppliers Medium

Industry Competition HIGH

Buyers Medium

Substitutes High

(Data as of 22nd August 2011)

Last Price

Market Cap. (Rs. cr.) 105,735.33 98,046.21 43,308.85 31,736.91

Net Interest Income 19,928.21 25,974.05 15,154.81 4,303.56

Net Profit

Total Assets

HDFC Bank ICICI Bank Axis Bank Kotak Mahindra

453.05 851.00 1,051.10 430.15

3,926.39 5,151.38 3,388.49 818.18

277,352.61 406,233.67 242,713.37 50,850.66

COMPETITION : MARKET PERSPECTIVE

IndusInd Bank
YES BANK Federal Bank ING Vysya Bank Karur Vysya JK Bank

236.95
266.20 353.95 305.40 362.15 789.80

11,041.14
9,267.55 6,054.23 4,568.26 3,881.54 3,828.78

3,589.36
4,041.74 4,052.03 2,694.06 2,217.69 3,713.13

577.32
727.13 587.08 318.65 415.59 615.20

45,635.85
59,007.00 51,456.37 39,013.98 28,224.84 50,508.15

Axis bank with respect to other Private banks


Private Sector Banks Group Aggregat 2005-06 2006-07 2007-08 2008-09 2009-10 es 2009-10 10387 352 501 626 786 1019 6553 9980 14739 20624 21640 182284 1020.00 1024.00 1117.00 8.69 7.59 8.39 1060.00 10.02 1111.00 12.00

Axis Bank
All Banks' Aggregat es 2009-10 71998 944620

STATISTICAL COMPARISION

Items
No. of offices No. of employees Business per employee (in Rs. lakh) Profit per employee (in Rs. lakh)

798.37
7.19

873.32
6.05

Capital and Reserves & surplus Deposits Investments Advances


Interest income Other income Interest expended Operating expenses

2886 40114 21527 22314


2889 730 1811 814

3402 58786 26897 36876


4462 1010 2993 1215

8771 87626 33705 59661


7005 1795 4420 2155

10215 117374 46330 81557


10835 2897 7149 2858

16045 141300 55975 104343


11638 3946 6634 3710

119984 430046 822801 4752456 354117 1719185 632494 3497054 82874 20180 51206 22676 415751 78519 272084 99769

High level of services Knowledge of Indian market

Market capitalization is low Not having Image - UTI Mutual fund scam

SWOT : ANALYSIS OF AXIS BANK

Strength

Weakness

Threats
Very high competition with Private sector or Public sector bank. Other better Saving, investment option available

Opportunity

Large retail and corporate market Wide scope in rural India

Sustaining Competition Blue ocean strategy Red Ocean Strategy Priority Banking

SUSTAINING COMPETITION

Personalised Services Priority Platinum Debit Card Preferential Pricing Services on Priority Flexible Eligibility Criteria

Fee Profile

Retail business
SEGMENTATION

SEGMENTATION : GEOGRAPHY

Integrated

channel strategy
No.

of branches and extension counters

Go Description
For those who are just starting out Low service charge. Low minimum balance Students and young adults Low balances

Reach
For those who are working out their dreams Unlimited transactions. Fixed fee. Deposit box Young family in asset acquisition stage High spending, low balance, no investment Salary Account Women Savings Account

Savour
For those who have achieved their goals and have room to grow Interest on accounts. Free notary services. Investment consultancy Well established. Mid-life. Building investments Have savings and investment

Cruise
Well settled and willing to enjoy the higher flavours of life No charge on any service. Unlimited transaction. Personal banking. Club benefits 50+

SEGMENTATION : LIFE STAGE

Principle benefit

Demographic correlation Behavioral correlation Axis Banks Offering

Moving into retirement or semi retirement Senior Citizen's Account

Azaadi - No Frills Account

Priority Account Resident

Full

Market Coverage
MARKET TARGETING

Differentiated Marketing

Continue to build and strengthen Retail Banking franchise

Leverage leadership position in Infrastructure linked Financial services

MARKET POSITIONING

Build a full-service offering to SME customers

Capture end-to-end opportunities in Payments across customer segments

PRODUCT:

Accounts
MARKETING MIX 4Ps : PRODUCT

Deposits

Cards
Mobile Banking

Twins both equal

4Ps : PROMOTION

Solution

for every banking need

4Ps PROMOTION

largest ATM outsourcing deal-6270

Strategic location of ATMs


1411 branches across 932 cities and towns Overseas Offices

4Ps : PLACE

Suntecs

relationship based pricing solution home loans


4Ps : PRICE

8%-power-plus Platinum Lowered

priveledge-2.5% on fuel base rate to 10%

In developing markets like India products are competing in the expected or augmented product criteria . Axis retail banking accounts were updated with net banking, phone banking to deliver expected product. Specializing it further based on demography to deliver augmented product. Differentiation:

PRODUCT LEVELS AND DIFFERENTIATION

Customization Regular, Priority banking, Wealth, Privee Performance Quality Mutual funds, Fixed deposits.

Brand equity: an increase of 50% in the brand value to US$ 652m in 2011. top 200 of global emerging market banks 2010 Global finance Forbe Asias fab 50 companies

BRAND VALUE

Branding Strategy: Brand resonance pyramid.

Extension:

Line Extension Axis banks introduces multiple products under personal banking and credit card category to target different user groups. Category extension Axis Bank to a total solutions provider. Acquired Enam for Rs 2000 crores in November 2010 to become third biggest underwriter. Insurance products under Max New York life insurance in March 2010. Shriram Axis Bank Credit Card targeting transport operators in India. LIC ties up with Axis Bank to offer LIC Axis bank credit card for easy payment of premiums.

BRAND EXTENSION AND CO BRANDING

CO Branding:

Twin objectives Tap semi urban and rural potential Bring technology driven banking services to the hinterland RBS branches opened in Punjab, Tamil Nadu, Rajasthan and Gujarat and 100 more such branches across India soon. extend foot print in Tier III, IV and V centres. More than 35 Lakhs No Frills accounts opened under the Financial Inclusion Initiatives An online POS model involving POS terminals as the transacting device and bank issued debit cards as the transacting instrument. Targets for 2013: 105 Crs of deposit base and 26 Crs Loan book

RURAL BANKING STRATEGY

Financial Inclusion

Agri Business

Finance for farm equipment and Cash credit facility for commision agents
Loans to farmers for meeting cultivation and contract farming.

Axis

bank has a very firm position in the Private banks segment It is growing at a very fast pace since its conversion (price more than doubled on stock exchange to current average of ~Rs.1100 as compared to 2007 average)

CONCLUSION

THANK YOU

Team
-

7 Members:
B013 B046 B020 B021 B006 B040

Vinodini C. Raghavendran R. Kunal Gupta Ankur Gupta Kushal Bagadiya Nikhil Nagar

Axis

Bank annual report


REFERENCES

http://www.axisbank.com http://www.rbi.org.in

http://www.moneycontrol.com/company-

facts/axisbank

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