HDFC- The Extraordinary ordinary Company.

case -19

HDFC- Overview
Established in 1977 by Mr. Hasmukhbhai Parekh

Promoted with an initial share capital of Rs 100 million.

HDFC is Indias premier housing finance entity in

existence for over 34 years. Primary objectives of HDFC To cater social need- promoting home ownership by providing long term finance. To enhance residential housing stock in the country.

Though housing remains the core business, HDFC has continued to make investments in its subsidiary and associate companies. Competitors
ICICI Housing Finance State Bank of India Home Finance Housing Urban Development Corporation(HUDCO) LIC Housing Finance Limited

SWOT Analysis
Strengths : o Vast distribution network. o Great brand image. o High degree of customer satisfaction. o Widest range of home loans and deposits products. o Efficient and effective service. o Beside the core business , HDFC has continued to make investment in its subsidiary and associate companies.

Weaknesses : o Customer service staff need training. o Interest rate war persistent o Strict policy of funding. o Unable to cover rural areas. o Unable to attract large number of middle income house holds.

Opportunities : o Untapped rural markets. o Strong economic growth . o Lower SLR and CRR with enhance liquidity, so more loans can be offered. o Tax rebate on house loan. o Rising disposable income.

Threats : o Loss of market share to commercial banks and HFCs. o Residential real estate prices in a few pockets of the country had risen to unrealistic levels. o High switching cost of customers. o Increase in funding cost.

Marketing Strategy- STP

Segmentation : Demographics variables: Metros Other cities Rural NRIs Occupation : Salaried person Self employed Psychographic segmentation Lifestyle -People who believes in modern banking with higher set of service i. e. internet banking (incontact, mobile refill, travel currency card etc.)

Target market: o Middle income group o Rural areas o NRIs o Corporate o Assets and security market o General and life insurance

Positioning : o Corporation that puts the customer first. o AAA rating by CRISIL and ICRA. o High standard services o Tagline with you right through make its presence felt.. -Customer centric -Service oriented -Product innovation

Home loan advantages: o Counselling and advisory services o Instant home loan approval o Loan approval even before the property is selected o Flexible repayment option o Online application facility

Marketing Tactics- 4Ps

Product :
Home improvement loans Home extension loans Short term bridging loan

Loan for professionals (non residential premises)

Land purchase loan Top- Up Loans

Price :
o Depends on rate charged by RBI and interest charge by

competitor. o HDFC also provides its customer the choice of fixed rate home loans, fixed first home loan and adjustable rate home loans
Fixed rate Adjustable rate home loan

linked with HDFCs Prime Lending Rate Fixed first home loans

 No Charges for

o Replacement of cheques
o Income Tax Certificates o Accelerated Repayment Option

Place : o 304 outlets o Has an international office in Dubai , London and Singapore. o Spread over 2400 towns and cities.

Promotion : Tagline with you right through make its presence felt.. HDFC also advertise them self through : * T.V. * News papers. * Hoardings on the road side and in public places. Property fairs Cross-selling

Repayment option :
o Step up Repayment facility o Flexible loan installment plan

o Tranche based EMI

o Accelerated repayment scheme

Home Improvement Loans Home Extension Loans Home Loans Short Term Bridging Loans Land Purchase Loans Loan to Professional NRPs Top Up Loans HDFC Home Loans for NRIs Home Loans Home Extension Loans Rural Housing Finance Home Improvement Loans Land Purchase Loans

Loan Against Property

Deposits

Problem company facing: o Inefficient Customer Service Staff o Interest rate war persistent o Less customers in rural area. o Customer inslovency o Employees switching

Recommendation : o Training of Customer Service Staff. o Need for an independent floating rate benchmark o Trained and dedicated personnel o Loan should be given after acquiring information about the customer