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Marketing Strategy - Axis Bank

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.

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Marketing Strategy - Axis Bank

  1. 1. Marketing Strategy - Axis Bank
  2. 2. 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 SMP09 : Marketing Strategy - Axis Bank 2
  3. 3. Marketing trends in banking sector SMP09 : Marketing Strategy - Axis Bank 3 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 Bank Nationalization andBranch Expansion Consolidation of Bank Operation SocialBanking Targets Disintegration Rising CustomerNeeds Period Banker’s Major Orientation Banks approaches towards customers and market underwent changes and focus was gradually shifted to marketing their products.
  4. 4. Marketing trends in banking sector .contd. SMP09 : Marketing Strategy - Axis Bank 4 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.
  5. 5. 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. SMP09 : Marketing Strategy - Axis Bank 5
  6. 6. 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 SMP09 : Marketing Strategy - Axis Bank 6
  7. 7. Annual Results - 2013 SMP09 : Marketing Strategy - Axis Bank 7 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
  8. 8. Performance Overview SMP09 : Marketing Strategy - Axis Bank 8 • 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%.
  9. 9. Business Overview SMP09 : Marketing Strategy - Axis Bank 9 • Multiple channels drive business growth • Extensive use of technology to provide services • Expanding footprint across centres • Largest ATM network in the private sector
  10. 10. SWOT analysis SMP09 : Marketing Strategy - Axis Bank 10 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
  11. 11. 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. SMP09 : Marketing Strategy - Axis Bank 11
  12. 12. 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 SMP09 : Marketing Strategy - Axis Bank 12
  13. 13. 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 SMP09 : Marketing Strategy - Axis Bank 13
  14. 14. 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 SMP09 : Marketing Strategy - Axis Bank 14 • 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
  15. 15. Thanks SMP09 : Marketing Strategy - Axis Bank 15 • References • • • •