2010

A COMPARSION AND ANALYSIS OF OF MARKETING STRATEGIES OF PUBLIC AND PRIVATE SECTOR BANKING COMPANIES

SOURAV RAINA
L.I.M 11/21/2010

TERM PAPER OF STRATEGIC MANAGEMENT

TOPIC: A COMPARSION AND ANALYSIS OF OF

MARKETING STRATEGIES OF PUBLIC AND PRIVATE SECTOR BANKING COMPANIES

BANKS:

SBI (PUBLIC BANK) and HDFC (PRIVATE BANK)

SUBMITTED TO: Ms. JASPREET KAUR L.I.M.

SUBMITTED BY:SOURAV RAINA Roll No: - RT1903 A65 Regd. 10907505

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ACNOWLEDGEMENT
Words often fail to express ones inner feelings of gratitude and indebtedness to ones benefactors, but then it is only the readily available medium through which the undersigned can express his sincere thanks to all those who are associated with the work in one way or the other. Nothing concrete can be achieved without an optimal combination of inspiration and perspiration. No work can be accomplished without taking the guidance of the experts. It is only the critiques from ingenious intellectuals that helped transform a product into a quality product. Project work is never the work of an individual. It is more of a combination of use, suggestions and contributions and work involving many individuals. This project also bears the impact of many people. First and foremost I would like to gratefully acknowledge and express my sincere gratitude towards Ms JASPREET KAUR, my subject teacher who always helped and provided guidance during the course of my project. I would like to extend my earnest thanks for her assistance in the course of making term papers. The learning during the project was immense & invaluable. I shall be failing in my duties if I do not express my gratitude to other faculty members and dear friends for their useful help at various stages of this term paper.

SOURAV RAINA

CONTENTS Sr. No.

1. 2. 3. 4. 5. 6. 7.

Topics
INTRODUCTION Marketing strategy Types of strategies Marketing Mix Marketing strategy in banking Marketing mix in banking sector Need, Scope and Objective of Study Research Methodology Introduction to the Banks Overview of SBI bank Marketing strategy used by SBI Overview of HDFC

8. 9.

Marketing strategy used by HDFC Conclusion Bibliography

INTRODUCTION TO THE TOPIC

PUBLIC AND PRIVATE SECTOR BANKS:-

All the banks in India were earlier private banks. They were founded in the pre-independence era to cater to the banking needs of the people. But after nationalization of banks in 1969 public sector banks came to occupy dominant role in the banking structure. Private sector banking in India received a fillip in 1994 when Reserve Bank of India encouraged setting up of private banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sectors. Private Banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive. A countrywide survey reveals that while the private banks have got a tight grip on the purse strings of the salaried class and professionals in the country, a large majority of customers in Corporate India still prefer the time-tested public sector banks for services ranging from securing credit cards to making bond investment and fixed deposits. According to survey, 60% businessmen in India prefer PSU banks when it comes to sourcing credit cards and another 80% of them knock on the doors of state-owned banks for securing personal and educational loans. The reason: These businessmen find the PSU banks more reliable while the private sector banks seem messy with their difficult-to-comprehend offers. It also points out that the business community feels that the private banks charge high rates of interest and are very "clever" with customers. The preference for public sector banks for insurance is mainly due to general perception that they are more reliable, secure and trustworthy. But for credits and debit cards, they feel private banks provide prompt and efficient service as compared to the outdated services of PSU banks that lead to wastage of time and procedural delays.

MARKETING STRATEGY:It is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A
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marketing strategy should be cantered around the key concept that customer satisfaction is the main goal. Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement TYPES OF STRATEGIES Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below: Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: Leader Challenger Follower Niches
Porter generic strategies - strategy on the dimensions of strategic scope and

strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firms sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative
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scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow. Product differentiation (broad) Cost leadership (broad) Market segmentation (narrow)

Innovation strategies - This deals with the firm's rate of the new product

development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types: Pioneers Close followers Late followers
Growth strategies - In this scheme we ask the question, How should the firm

grow?. There are a number of different ways of answering that question, but the most common gives four answers: Horizontal integration Vertical integration Diversification Intensification

MARKETING MIX
Meaning and Definition Marketing Mix means to collect and mix the resources of marketing in the manner that objects of the enterprise may be achieved and maximum satisfaction may be provided to the consumers. The term marketing mix is used to describe a combination of four elements the product, price, physical distribution and promotion. These are popularly known as Four Ps. A brief description of the four elements of marketing mix (Four Ps) is.

Product : The product itself is the first element. Products most satisfy consumer
needs. the management must, first decide the products to be produced, by knowing the needs of the consumers.

Price : The second element to affect the volume of sales is the price. The market
or announced amount of money asked from a buyer is known as basic value placed on a product.

Promotion : The product may be known to the consumers. Firms must undertake
promotion work-advertising, publicity, personal selling etc. which are the major activities.

 Place : Physical distribution is the delivery of products at the rights time and at
the right place. The distribution mix is the combination of decisions relating to marketing channels, storage facility, inventory control, location transportation warehousing etc.

Marketing Mix

Product
Product variety Quality Design Features Brand Name Packaging Sizes Services

Price
List price Discounts Allowances

Promotion
Sales promotion Advertising Sales force

Place Channels
Coverage Assortments Locations Inventory Transport

Payment period Public relations Credit cards Direct marketing

MARKETING IN BANKING:Marketing approach in banking sector had taken significance after 1950 in western countries and then after 1980 in Turkey. New banking perceptiveness oriented toward market had influenced banks to create new market. Banks had started to perform marketing and planning techniques in banking in order to be able to offer their new services efficiently. Marketing
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scope in banking sector should be considered under the service marketing framework. Performed marketing strategy is the case which is determination of the place of financial institutions on customers mind. Bank marketing does not only include service selling of the bank but also is the function which gets personality and image for bank on its customers mind. On the other hand, financial marketing is the function which relates uncongenitalies, differences and non similar applications between financial institutions and judgement standards of their customers.

The reasons for marketing scope to have importance in banking and for banks to interest in marketing subject can be arranged as: Change in demographic structure: Differentiation of population in the number and composition affect quality and attribute of customer whom benefits from banking services. Intense competition in financial service sector: The competition became intense due to the growing international banking perceptiveness and recently being non limiting for new enterprises in the sector. Increase in liberalization of interest rates has intensified the competition. Banks wish for increasing profit: Banks have to increase their profits to create new markets, to protect and develop their market shares and to survive on the basis of intense competition and demographic chance levels. The marketing comprehension that is performed by banks since 1950 can be shown as in following five stages: 1. Promotion oriented marketing comprehension 2. Marketing comprehension based on having close relations for customers 3. Reformist marketing comprehension 4. Marketing comprehension that focused on specializing in certain areas 5. Research, planning and control oriented marketing comprehension

THE MARKETING MIX IN BANKING SECTOR SERVICE

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Recently, banks are in a period that they earn money in servicing beyond selling money. The prestige is get as they offer their services to the masses. Like other services, banking services are also intangible. Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. These intangible services are shaped in contracts. The structure of banking services affects the success of institution in long term. Besides the basic attributes like speed, security and ease in banking services, the rights like consultancy for services to be compounded are also preferred.

PRICE The price which is an important component of marketing mix is named differently in the base of transaction exchange that it takes place. Banks have to estimate the prices of their services offered. By performing this, they keep their relations with extant customers and take new ones. The prices in banking have names like interest, commission and expenses. Price is the sole element of marketing variables that create earnings, while others cause expenditure. While marketing mix elements other than price affect sales volume, price affect both profit and sales volume directly. Banks should be very careful in determining their prices and price policies. Because mistakes in pricing cause customers shift toward the rivals offering likewise services. DISTRIBUTION The complexities of banking services are resulted from different kinds of them. The most important feature of banking is the persuasion of customers benefiting from services. Most banks services are complex in attribute and when this feature joins the intangibility characteristics, offerings take also mental intangibility in addition to physical intangibility. On the other hand, value of service and benefits taken from it mostly depend on knowledge, capability and participation of customers besides features of offerings. This is resulted from the fact that production and consumption have non separable characteristics in those services. Most authors argue that those features of banking services makes personal interaction between customer and bank obligatory and the direct distribution is the sole alternative. Due to this reason, like preceding applications in recent years, branch offices use traditional method in distribution of banking services. PROMOTION
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One of the most important element of marketing mix of services is promotion which is consist of personal selling, advertising, public relations, and selling promotional tools. PERSONAL SELLING Due to the characteristics of banking services, personal selling is the way that most banks prefer in expanding selling and use of them. Personal selling occurs in two ways. First occurs in a way that customer and banker perform interaction face to face at branch office. In this case, whole personnel, bank employees, chief and office manager, takes part in selling. Second occurs in a way that customer representatives go to customers place. Customer representatives are specialist in banks services to be offered and they shape the relationship between bank and customer. ADVERTISING Banks have too many goals which they want to achieve. Those goals are for accomplishing the objectives as follows in a way that banks develop advertising campaigns and use media. 1. Conceive customers to examine all kinds of services that banks offer 2. Increase use of services 3. Create well fit image about banks and services 4. Change customers attitudes 5. Introduce services of banks 6. Support personal selling 7. Emphasize well service Advertising media and channels that banks prefer are newspaper, magazine, radio, direct posting and outdoor ads and TV commercials. In the selection of media, target market should be determined and the media that reach this target easily and cheaply must be preferred. Banks should care about following criteria for selection of media.: 1. Which media the target market prefer 2. Characteristics of service
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3. Content of message 4. Cost 5. Situation of rivals PUBLIC RELATIONS Public relations in banking should provide; 1. Establishing most effective communication system 2. Creating sympathy about relationship between bank and customer 3. Giving broadest information about activities of bank. It is observed that the banks in Turkey perform their own publications, magazine and sponsoring activities. SELLING PROMOTIONAL TOOLS Another element of the promotion mixes of banks is improvement of selling. Mostly used selling improvement tools are layout at selling point, rewarding personnel, seminaries, special gifts, premiums, contests.

DEVELOPMENT IN MARKETING SCOPE AT THE ASPECT OF SERVICE MARKETING Marketing scope develops day to day. These developments carry special significance for service sector in which customer and service producer interact closely. INTERNAL MARKETING Especially in service sector like external relations, internal relations also have significance. It requires finding and keeping successful personnel. For personnel of the organization to be considered their own goals and service situation, values of the organization are sold to them. The communication techniques carried out for customers are also performed for the personnel in internal marketing and this two techniques go together. For example, the ads

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that aim creating firms image should be prepared with regarding to audience which is composed of firms personnel. NETWORK MARKETING This approach takes the organization as a sequence which involves producer and customer that market services to each other in the organization. In this structure, the activities of departments that compose organization would be more focused on market. This will also affect the structure of organization.

RELATIONSHIP MARKETING It was mentioned that close relationship was established between producer and customer in service sector. In addition to this, life cycle of a customer relationship was also mentioned under the product outline. According to the researchers, maintaining the relationship for extant customer increases the profit of firms. It should be emphasized that this fact has an importance for service sector.

NEED FOR STUDY

The research project evaluation of the banking sector in India has primal importance due to intense competition, and changing banking reforms. This research project is very important because in today scenario there is strong competition in public and private sector banks. Its very important for us to know which sector is performing well and what are the marketing strategies adopted by banks (public sector or private sector).

SCOPE OF STUDY
The scope of the study is to know the marketing strategies adopted by SBI &HDFC bank. Its not easy for covering all the boundaries for collecting the data. So, this research study is covering some important aspect. In this research study analysis the marketing strategies of SBI and HDFC bank.

OBJECTIVE OF STUDY
1. To study the marketing strategies adopted by SBI & HDFC BANK.
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2. To study the impact of marketing strategies adopted by SBI & HDFC on customer satisfaction.

RESEARCH METHODOLOGY
Research means a search for knowledge or gains some new knowledge and methodology can properly refer to the theoretical analysis of the methods appropriate to a field of study or to the body of methods and principles particular to a branch of knowledge. A Research methodology has a specified framework for collecting the data in an effective manner. Research methodology means a defining a problem, defining the research objectives, developing the research plan, collecting the information, analyzing the information and presentation of finding. The research process that was followed by me consisting following steps: Research Define: The definition of problem includes the study of Marketing Strategies of HDFC and SBI Source of Data: For conducting this project, I have used Secondary data. Secondary Data: The secondary data can be defined as data collected by someone else for purposes other than solving problem being investigation and previously meant for another purpose. . We will use magazines, journals, paper and internet for the collection of data. It helps us to better determine our problem and formulate an appropriate research design. It is the data which is collected by others. It is re-used by the researcher. The sources of secondary data are Websites, Newspapers, Magazine, Books and Journals. various

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INTRODUCTION TO THE BANK

OVERVIEW OF SBI BANK State Bank of India (SBI) is the largest nationalized commercial bank in India in terms of assets, number of branches, deposits, profits and workforce. With the liberalization of the Indian banking industry in the mid-1990s, SBI faced stiff competition from the private sector and foreign banks which resulted in significant loss of its market share. The case describes the efforts of SBI to regain its lost market share by undergoing a major restructuring exercise which involved redesigning its branch network, providing alternate banking channels, emphasis on lean structure and technology up gradation. The case also discusses how SBI is building its image as a customer friendly bank by launching innovative products & services and promoting its brand. MARKETING STRATEGY USED BY SBI

Generic strategies adopted by State Bank of India:

Institution for advanced learning: to provide state of the art training in financial products to middle level and senior level executives.

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Internal consultant/change agent: to act as a catalyst for change in attitudes and orientation of banking staff and to provide expertise and consultative support

Feedback supplier: to capture and structure feedback from trainees and from the market

Think tank: to provide expert and inform suggestions, model business strategies, analysis of market developments from a banker perspective.

Research and development role: to carry out research on contemporary subjects that are relevant to the banks short term and medium term and operational needs and policy formulation

Overlapping staff training canters: to validate and closely monitor the staff training canters in seven circles attached to the academy.

The Restructuring
To overcome the intense competition from private and foreign banks, SBI planned a major organizational restructuring exercise. The key aspects involved

redesigning of branches, providing alternate channels; focus on a lean structure and Technological up gradation. A business process reengineering (BPR) team was constituted in June 2003 with McKinsey & Company as consultants. The BPR's basic goal was to create an operating architecture that would facilitate service delivery of international standards.

New Products and Service Apart from restructuring, SBI launched several innovative, value-added products and services to project a customer friendly image. It launched a special service for corporate customers called 'telebanking and remote login' to support transactional requests.
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This facility would be available at 593 branches, and remote login at 269 branches. The banks trade finance solutions, called EXIMBILLS, were intended to handle trade finance transactions efficiently and enhance the range of services provided to corporate and network branches. In March 2004, SBI announced that it would introduce anywhere banking facility for its customers over 9000 branches across India in the next two years. All the branches in Mumbai would provide this facility by December 2004. SBI also launched different customized loan programs to cater to various sections of society depending on income levels and repayment capabilities. Interest rates and repayment periods were tailor-made to suit the customer groups.

Alliances and Tie-Ups

To boost its business, SBI entered into several alliances and tie-ups with automobile, insurance, mutual fund, project finance and medical equipment companies.

Auto.Finance
Unlike other competitors that relied on reduced interest rates to get business, SBI extended the tenure of car loans from five to seven years, thereby lowering the monthly debt repayment burden of the loan seeker. SBI entered into a tie-up with Maruti, the largest automobile manufacturer in India, to provide loans for purchase of Maruti cars at the rate of 10.05 per cent and 11.25 per cent for three years and above three years respectively. After the scheme was introduced, SBI emerged as the largest financier for Maruti cars in India and the number of Maruti vehicles financed grew by 17 per cent in the fiscal 2003-04 over fiscal 2002-03

The Marketing Initiatives

SBI carried out various marketing initiatives to enhance its reach. They included

Segregating and targeting existing high value customers,

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Cross sales of other products, Setting up call centres and outbound sales force to secure new customers. Plans were also made to utilize database marketing to pursue large and medium sized corporate, government and trade finance customers. Database marketing was expected to draw increased revenue from cross selling, lower costs and increased customer loyalty.

SBI also introduced various other ways of reaching out to customers like

extension of hours of work(SBI increased daily working hours by two hours and Sunday banking was introduced) and

Aggressive marketing through print and television media.

Looking Ahead-Result:
Among the factors that will help in realizing this full potential were access to institutional credit to more farmers and appropriate quantity and quality of agriculture credit. Since the Seventies, the decadal average growth rate of the volume of short-term institutional credit to agriculture has stagnated at around 15 per cent, while the growth rate of the volume of longterm credit has in fact declined from 20.2 per cent in the 1970s to11.9 per cent in 1990s. The government has anxiously examined the question of agriculture credit and related issues in consultation with the Reserve Bank of India (RBI), National Bank for Agriculture and Rural Development (Nabard) and commercial banks. Among commercial banks, SBI with its vast network is well placed to fulfill the large commitments of the new government to the farm sector. In the current financial year the government targeted for a 30 per cent increase in the aggregate agricultural credit over the previous year. On interest rate, the rates would remain stable in the short-term. There could be a revision in interest rates in the medium to long-term period. Further, any likely revision would depend on external factors than domestic factors. Elaborating on the importance of the right tie-ups and partnerships for the bank, there are a few non-core business areas where SBI is and wherever we have partners, the global majors
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are our partners. For instance, in insurance, Cardiff, and for cards, GE is our partners. We are becoming a very major player in the Indian economy. For example SBI Cards we are the third largest card company and second fastest growing card company after ICICI. This is the most profitable card company in the country and SBI is doing very well. On technological up gradation, all the 13,650 branches of the bank were fully computerized, also they increased fully integrated ATM network from 4,000 to 6000 today across the country. SBI in its own quiet manner is trying to provide world-class services.

SBI`s Strategies in the current scenario

SBI have set up capacity in places where they are not very strong. Its time for them to follow overall SBI philosophy of planning new branches, given the huge untapped potential. Besides, this is also the best time to benefit from their past expansion, since there is a lot of trust in SBI. Brand SBI is very strong, while people may be generally cautious about some other brands. They can not only tap the potential better but can also provide a safe and transparent insurance alternative to the public. The bank is entering into many new businesses with strategic tie ups Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc each one of these initiatives having a huge potential for growth. SOME OF THE STRATEGIES TO COPE WITH THE CURRENT SCENARIO ARE LISTED BELOW:

It is the part of SBI`s philosophy to open new branches .The Bank is forging ahead with cutting edge technology and innovative new banking models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years. SBI is planning to hire 11,000 employees in the current fiscal.

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The Bank is also in the process of providing complete payment solution to its clientele with its over 8500 ATMs, and other electronic channels such as Internet banking, debit cards, mobile banking, etc.
Countrys largest lender, State Bank of India (SBI) has prepared a blueprint to go

retail in its international operations. Such strategy would help the bank to promote its lead in syndication of loans in the overseas market, at a cheaper cost. The banks overseas operations have been instructed to thrust more on promoting retail banking locally, SBI is assessing that by opening more branches across foreign locations and promoting retail services by mobilising deposits at interest rates as low as 3-3.5%, the bank will be able to increase its operating margins by 250-300 basis points in overseas markets where syndication opportunities arise often.SBI is expected to open \seven new branches over next eight months in the United Kingdom where it operates six branches currently. In response to signals from the central bank, SBI have progressively reduced their PLR from 13.75% to 12.25% during the past few months in stages, and further softening in interest rates cannot be ruled out. SBI is introducing loan products at sub-PLR rates - in home loans at 8%, auto loans at 10%, special products for SMEs and... agriculture sector at 8%, but it may not be possible for them to reduce the interest rate beyond a certain point. SBI is working on infrastructure sector projects, which has seen a growth of 26% in the current year. For the year 2008 the Rs 10,000 crores was sanctioned for the infrastructure projects while in the current year from April 08 to February 09 the amount sanctioned for the infrastructure project is Rs 13,000 crores,out of which project worth Rs 8000 crore is in pipeline. Despite of various viability issues the growth in this sector for SBI is been intact. With market-linked products finding fewer takers, insurance companies are launching more guaranteed products to lure investors. The latest to join the bandwagon is SBI Life insurance with SBI Smart ULIP, a product that guarantees returns based on the highest NAV recorded by the fund in the first seven years.

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PORTERS FIVE FORCES THEORY

1.

Threat of competitors:

Top Performing Public Sector Banks a. b. c. Andhra Bank Allahabad Bank Punjab National Bank

Top Performing Private Sector Banks a. b. c. d.

2.

HDFC Bank ICICI Bank AXIS Bank Kotak Mahindra Bank

Threat of new entrants: there have been many new entrants in banking sector like Threat of substitutes: investors as a substitute can always invest into the capital

yes bank
3.

markets instead of depositing in their capital in the bank.

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4.

Buying power of suppliers: changing policies and guidelines of RBI, interest rates, Buying power of customers: changing scenarios, increasing and decreasing

CRR and SLR maintained by the banks as per RBI norms.

5.

disposable incomes, other attractive options available to customers.

BCG COW
There is a lot of banking industry disposable increasing volatility in other importance of banking industry rate of 13% with standing to 62.1

THEORY: CASH
growth potential for the because income working savings of of increasing customers, more this

class, and in

markets also increasing SBI has shown a growth a 21 % increase in PAT cr in the FY 2008-09.

Hence it can be concluded that SBI stands at cash cow in BCG matrix.

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OVERVIEW OF HDFC
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling
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units.

HDFC has developed significant expertise in retail mortgage loans to different a strong market reputation, large

market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, bank in the Indian environment. HDFC Bank began operations in 1995 with a simple mission: to be a World Class Indian Bank. We realized that only a single minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a

Promotions strategy of HDFC Bank

FROM doing cross-selling exercises to organizing school-level painting competitions, promotional activities are going to be the main focus of HDFC Bank's marketing strategy this year. HDFC Bank are looking at positioning HDFC as a one-stop financial supermarket and the objective of the promos is not just acquisition of new customers, but also looking at creating product awareness, enhancing usage and also providing value-adds to the customers to reward them for their faith and loyalty. The first promo this year is titled Wheels Of Fortune, which will be on during the month of January. "This promo is targeted at all those customers who avail a personal loan, car or twowheeler loan. There will be a lucky draw at the end of the promo and the winners would get exotic prizes." Also on the cards is a school-level painting competition on wildlife across cities to promote the Kids Advantage account. The next step to these mass promos, would be more personalized promos. "It plan to send personalized mailers about various products to all those HDFC come in contact with during these mass promotions." The bank has also tied up with Business Today, to sponsor 10,000 copies of the magazine in each metro. The cover of the sponsored copies would be the December issue of Business Today, which rated HDFC Bank as the best bank in the country. On the opposite side, would be an advertorial which would talk about HDFC as a `one-stop financial supermarket'.

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Gold Credit card: For providing the better services to the customers and promoting their
business, HDFC has launched the Gold Credit Cards. It's overloaded with travel benefits discounts, cash back offers, air miles redemption. Gold Credit Card Features & Benefits Attractive Reward Points Earn 1 reward point per Rs 150 spent on the Gold Credit Card. Rewards points redemption

After earning all those reward points on your HDFC Bank Gold Credit Card, redeem them for exciting gifts and services! You could even convert them to airline miles with India's leading airlines through the My Rewards programme. Worldwide acceptance Accepted at over 23 million Merchant Establishments around the world, including 110,000 Merchant Establishments in India.

Revolving credit facility Pay a minimum amount, which is 5% (subject to a minimum amount of Rs.200) of your total bill amount or any higher amount whichever is convenient and carry forward the balance to a better financial month. For this facility you pay a nominal charge of just 3.25% per month (39.0% annually). Free Add-on card

You can share these wonderful features with your loved ones too - we offer the facility of an add-on card for your spouse, children or parents. Allow us to offer add-on cards to you FREE OF COST with our compliments. Interest free credit facility Avail of up to 50 days of interest free period from the date of purchase (subject to the submission of the charge by the Merchant).
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Zero liability on lost card If you happen to lose your Card, report it immediately to our 24-hour call centre. After reporting the loss, you carry zero liability on any fraudulent transactions on your card

Platinum Cards Get Additional Benefits

HDFC Bank Platinum Card Customers Get Additional Benefits compared to Gold / silver or other entry level cards. For instance, consider this, HDFC Cards has a Co-Branded Online Shop with Surat Diamonds. By virtue of being HDFC Bank Customer, you are already getting big discount. Now add any item to your cart and enter 558818 [6 Starting Digits of Platinum Card], you get additional discount. This is just one such instance. You also get Petrol Surcharge Waiver, IRCTC Charges Waived, etc.

Clear Trip Discount to Debit Card Holders

Use your HDFC Bank Debit Card to book any flight, hotel or train & get 10%* cash back Domestic Air Offer - Book any Domestic Flight and get 10% cash back on Base Fare or Rs.250 cash back per booking (whichever is less). Trains - Book any Train and get 10% cash back or Rs.50 cash back per booking (whichever is less) International Air Offer - Book any International Flight and get 10% cash back on Base Fare or Rs.600 cash back per booking (whichever is less). Hotels Offer - Book any Hotel (Domestic/International) and get 10% cash back on Base Price or Rs.500 cash back per booking (whichever is less). To avail the cash back kindly enter coupon code HDFCTRIP during step 3 of the booking process before payment.

PORTERS FIVE FORCES THEORY

6.

Threat of competitors:

Top Performing Public Sector Banks d. e. Andhra Bank Allahabad Bank

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f.

Punjab National Bank

Top Performing Private Sector Banks e. f. g.

7.

ICICI Bank AXIS Bank Kotak Mahindra Bank

Threat of new entrants: there have been many new entrants in banking sector like Threat of substitutes: investors as a substitute can always invest into the capital Buying power of suppliers: changing policies and guidelines of RBI, interest rates, Buying power of customers: changing scenarios, increasing and decreasing

yes bank
8.

markets instead of depositing in their capital in the bank.

9.

CRR and SLR maintained by the banks as per RBI norms.

10.

disposable incomes, other attractive options available to customers.

BCG THEORY: CASH COW

Growth and margins Having the funds to grow is only half the problem. However, will the company actually grow? The sluggish rate of growth in the economy suggests that growth could indeed pose a problem. In fact, in the first quarter of the financial year-ended 2009, HDFC Bank was able
to record only a 43 per cent growth in profits. This, however, may not be good enough to

justify the valuation commanded by the stock. And if, due to the slowdown, the bank is forced to invest in government securities rather than in loans, which generate higher returns, the margins will be affected. On the other hand, competition from other banks may increase. Hence it can be concluded that HDFC BANK stands at cash cow in BCG matrix.

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CONCLUSION

Liberalization has really changed the banking industry. It is no longer enough for banks to just manage money efficiently; they also have to manage customers, who now have a wide choice of alternatives. The future promises to be even more exciting, interesting and challenging, thanks to technology. No longer will banks, or any large organization, treat customers as a group and segment them into just some demographic and psychographic profiles. The Internet has enabled us to talk to each customer as an individual, with different needs and requirements. Products will need to be developed to meet those needs, and services will become the crucial differentiators. For

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years, customers were part of the banks Fixed Assets; now they have moved into the Current Assets category, and it will be a task keeping them there.

Title Authors Publish er Title Author Publish er Title Author Editor Publish er Title Authors Publish er Title Author Publish er Title Author Publish

Marketing Effectiveness In Banking Gurjeet R.D. & Kaur Sharma, R.D.Sharma Anmol Publications Pvt. Ltd, 2003 Marketing Of Banking Services Rajeev K Seth Macmillan Publishers India Ltd, 2000 Bank marketing for the 90's: new ideas from 55 of the best marketers in banking Don Wright Don Wright John Wiley and Sons, 1991 Bank marketing: a guide to strategic planning A Reston Book R. Eric Reidenbach, Robert E. Pitts Prentice-Hall, 1986 Marketing In Banks - Concepts And Approaches Gopala Krishna Murthy G ICFAI University Press, 2007 Bank Management V.S.P. Rao Discovery Publishing House, 1999 30

er

References Journals:
Balasubramanian, (2008) Financial Performance of Private Sector Banks in India Vol.27. No5,pp.146-162 John C. Howley, Grahame P. Savage, (2009 )Bank Marketing in the Personal Sector Vol. 5, No. 3, pp. 271 276 Sherman & Delener (2008) PSU banks lose business to their private sector peers Vol.14, No.2, pp.468-481 Vyas & Dhande, (2007) Study on the Impact of New Private Sector Banks on State Bank of IndiaVol.15, No.2, pp.247-254 V.Matsuo, (2007) Compare the Performance of the Three Major Public and Private Sector banks Vol.39, No.5, pp.363-379

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http://www.hdfcbank.com/ http://sbi.co.in/ http://www.thehindubusinessline.com/2004/01/14/stories/2004011401560600.htm

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%20strategy2/BSTR132.htm

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%20communications/CLMC040.htm

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%20Global%20Consultant%20To%20Formulate%20Strategy/57636/

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