cross selling and upselling strategies of axis bank .docx

7/23/2019 CROSS SELLING AND UPSELLING STRATEGIES OF AXIS BANK .docx

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CROSS SELLING AND UPSELLING STRATEGIES OF AXIS BANK


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ABSTRACT

Every financial institution needs to generate a steady stream of new customers, yet one of the

easiest and most steady sources of new businesses and related revenue is to reach out tocurrent customers for additional business. With the cost of acquiring new retail, small business

or commercial customers being five to ten times the cost of retaining an existing one, and with

the average spend of a repeat customer being 50- 00 percent more than a new one, ban!

mar!eters need to remember that the most efficient investment of mar!eting funds is to mar!et

to customers that already ban! with you "#$ %an!, $ndia&s third largest private sector ban! has

gone for an image ma!eover, changed its name to 'xis %an! (td. #his is the first time that a

ban! has gone in for a brand-change voluntarily. #he ban! loo!s different by changing the

name ) appearance, since it is %an!, sta!eholders would be very cautious when it comes to

investments. *o by !eeping this in mind the company devised a promotion strategy where it

clearly says +Everythingis the same, except the name. #he %an! had used the "#$ brand

with great pride for the last years, and has in recent years strongly contributed to the

resurgence of the "#$ brand. #he change in the name of "#$ %an! to 'xis %an! will affect the

interest of customers in the ban!. #he %an! has therefore decided to create a distinct brand

identity for itself. ebranding provides an opportunity to communicate elements of

personality, values and vision, which are specific to the %an!. #his rebranding becomes more

important as the %an! ta!es its initial steps in establishing a global footprint.

'xis as a name connotes solidity and stature and conveys a sense of authority and credibility.

'xis as a brand has the ability to transcend geographical boundaries. %ut totally changing the

brand visuals can give rise to consumer concerns about changes of ownership, or possible

changes in brand values, or even un/ustified extravagance. $f there is a strong brand

personality to which consumers are attracted, then substantial changes may destroy emotional

attachments to the brand. eople do not expect or li!e wild swings in the personality behavior

of other people, and they are /ust as concerned when the brands to which they have grown

used exhibit similar changes.

$n this pro/ect $ will analy1e the impact of change in name of ban! on its customers. $n

multimedia campaign ban! have clearly announced +only a name change, everything else

about the brand remains the same. $t assured customers that the change will in no way affect

the services offered by the ban!. %ut change in corporate brand can create an adverse effect on


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its customers and their mar!et share. 2hanges can create misconception if they are not

properly communicated to the customers. 3ften customers build an 4emotional attachment4 to

the company and a new loo! could alienate them.


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INTRODUCTION

1.1 Ba!gr"#n$

Cr"%%&Se''ing2ross-selling generally occurs when the sales representative has more than one type of product

to offer consumers that might be beneficial to them. *ome fields in which cross-selling is most

evident include those of the ban!ing and financial services industries. %an!ing customers may

go into the ban! and sign up for a chec!ing account and later be sold various investment

vehicles such as bonds or 2s as part of a retirement plan. $nvestment firms do much of the

same, starting off clients within a specific investment product that they need and then later

identifying additional needs that their company can meet on behalf of the client.

U(&Se''ing

"p-selling differs somewhat from cross-selling in that the salesperson is not so much

concerned with selling an additional product to generate additional commissions, but rather

with selling a higher-end version of the product the customer originally came to buy. #he

automobile salesman often engages in up-selling by showing the customer multiple versions of

the same product. Each version may differ in quality, starting with a base model and

progressing through more luxurious models with additional features.

A((r"ahe%

3ne of the main differences between up-selling and cross-selling is in the approach that the

salesperson ta!es when engaging in either method. When cross-selling, the salesperson

identifies a definite need that the customer has and fulfills that need by recommending an

additional product. "p-selling is somewhat less need-based in its orientation and typically

involves the salesperson building value in the product being offered. $n other words, a car

customer may not need the top-of-the-line *"6 with leather seating and a full entertainment

center, but the up-selling salesperson can help that customer see the value in having it by

painting a picture of how much more comfortable the family vacation will be with these

additional features.


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Si)i'aritie%

$n many ways, cross-selling and up-selling are similar in that they each offer customers

additional value than what they would have otherwise received had they only bought whatthey were initially loo!ing for. *ome salespeople ma!e the mista!e of cataloging features of

these additional products, rather than building value, or showing customers how they will

benefit from these additional or higher-quality products. ' successful cross-selling and up-

selling salesperson will be able to paint a picture of the value that the customer will receive so

that the customer will be able to visuali1e the benefits of ma!ing the purchase. "p-selling

benefits the customer by providing higher quality, while cross-selling adds benefit by

providing additional quality.

"#$ %an! began its operations in 778 when the 9overnment of $ndia allowed new private

ban!s to be established. #he %an! was promoted /ointly by the 'dministrator of the specified

underta!ing of the "nit #rust of $ndia :"#$ - $;, (ife $nsurance 2orporation of $ndia :($2; and

9eneral $nsurance 2orporation (td. and its associates vi1. umbai. resently, the %an! has a very wide

networ! of more than 8?0 branch offices and Extension 2ounters. "#$ %an! has a networ! of

over @8 '#>s, which is one of the largest '#> networ!s in the country.

$ndia&s third largest private sector ban!, "#$ %an!, has gone for an image ma!eover, changing

its name to 'xis %an! (td. #he rebranding, which came into effect Auly 0, includes change in

its logo and its color. #he egistrar of 2ompanies :o2; has issued a fresh certificate of

incorporation to "#$ %an! in the name of &'xis %an! (td.& #he ban! had appointed an

internal committee and also sought help from its official advertising agency, 3)>, for the

name change. "#$ %an! has contributed to the resurgence of the "#$ brand in last five six

years. #he ban! had a role to play in this. #he ban! has retained the burgundy color, but has

changed the logo. #he logo uses the alphabet &'& from the word 'xis. #he logo depicts a strong

growth path for the ban! supported by a strong base, indicating that the ban! is moving on

from a position of strength. Earlier, the ban!&s logo used the letters ", # and $. #heir central


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message is that nothing has changed except the name. #he continuity is maintained through

the color. #he committee had short listed 50-odd names. Binally, %an! chooses the name 'xis

from a group of ethnic, traditional and fun!y names.'xis is simple and it conveys a sense of solidity and a sense of maturity. #his name also has a

universal appeal. #hey had to change their name to have own brand and identity. #he ban!

have to give up the "#$ name after using it for years as they were not prepared to accept

terms and conditions from "#$ '>2 to use the name. "#$ %an! decided to choose the new

name considering the ban!&s pan-$ndian as well as international presence. #he ban! would go

in for international expansion sometime down the line. 4>oving on to 'xis would only

reinforce the fact that they are a board-driven private ban!, as against the previous image

which had a quasi-governmental touch, and in that sense, the brand-change will be actually

beneficial,4

#he ban! is li!ely to spend around s. 50 crore :C?.5 million; in the re-branding exercise in

the year ?00@. #he change in name was considered for avoiding confusion as several unrelated

entities were using the "#$ brand. #he board of directors of "#$ %an! had, on 'pril 0 ?00=,

approved the proposal to change its name to 'xis %an!. "#$ 'sset >anagement 2ompany

owns the "#$ brand.

3n 'ugust ?00=, the ban! launched a nationwide advertisement campaign with the catch

line - 4#wins both equal.4 #he rebranding exercise involves changing signageDs across 00

offices and ?,85= '#>s in 8 cities, towns and villages. #he ban! has already changed the

signageDs across eight ma/or cities, including elhi, %ombay, Fol!ata and Gyderabad, among

others, while in other ?50 cities, change of the signageDs will be done by the end of year.

#he ban! has already redesigned 7 elements, including cheque boo!s, welcome !its, pay-

orders, among others, suggesting the name change. $t is also using the internet, automated

teller machines, mobile channels and call centers to inform its customers about the change in

name.

#he ban! has a million customer base and is among the country&s top automated ban!s.

#he ban! - the fifth largest ban! in terms of mar!et capitali1ation - is planning inorganic

growth for its ventures dealing with new areas. $t is also overhauling its corporate ban!ing

with the involvement of >cFinsey. #his is the first time that a ban! has gone in for a brand-


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change voluntarily, even as there are instances of ban!s changing their names due to a merger

or an acquisition activity H for instance, the 2enturion %an! of un/ab.

1.* O+,etive%

T" Fin$-

#he bac!ground of change of corporate identity of 'xis %an!.

#he awareness level of the new identity among customers.

#he level of brand comprehension among customers.

#he overall change of image of ban! among customers.

#he ob/ective of the research is to identify the reasons for the change in corporate identity of'xis %an!. 's change in corporate identity is a strategic decision it affects the interest of

sta!eholders of the company which includes customers, investors, shareholders, employees

etc. %ut this research is limited to customers only because the researcher was not able to meet I

interview the senior management and shareholders for their views. #he ob/ective also includes

identifying the awareness level of the new identity of the ban! among customers. #he level of

brand comprehension among customers which means recall of brand by the customer. 'nd

finally the overall change of image of ban! among its customers.

1. D#rati"n "/ the %t#$y

*chedule of the research includes a period of fourteen wee!s within which topic selection,

preparation of questionnaire, survey conduction, analyses of data collected, preparing a report

based on the answer given by the respondents.

1.0 P#r("%e

$n this pro/ect $ have analy1ed the impact of change in name of "#$ %an! to 'xis %an! on its

customers. $n the multimedia campaign ban! have clearly announced that +only a name

change, everything else about the brand remains the same. $t assured customers that the

change will in no way affect the services offered by the ban!. %ut change in corporate brand

can create an adverse effect on its customers and their mar!et share. 2hanges can create

misconception if they are not properly communicated to the customers. 3ften customers build


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an 4emotional attachment4 to the company and a new loo! could alienate them. *o in this

pro/ect a detailed survey on the consumer perception about the change in name of %an! and its

impact on customers has carried out. 'lthough itDs not easy to understand the consumerperception but with the help of comparison between the services provided by the "#$ %an!

and 'xis %an!, an attempt has been made to collect the appropriate responses.

1. Li)itati"n%

#he proposed research would truly suffer from the following limitationsJ

. $dentity change is a strategic decision. Gowever, the researcher is not able to meet I

interview the senior management for their views.

?. #he researcher has to rely on published sources to !now the bac!ground of the identity

change, which may not reflect completely the strategic thin!ing of the top management

of the ban!.

. 'xis %an! is a national level ban!. $deally, the sample should be ta!en from across the

country for better analysis. Gowever, time and resource constraints limit the scope of

the data collection to 9ha1iabad city only.

8. (imited access to previous related researches.


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RESEARC2 3ET2ODOLOG4

PROBLE3 DIFINATION-Balling the product demand and increasing the service by 'xis ban! have increased the 9ap

amongst the profitability for the organi1ation. 'lso 'xis ban! is facing very tough competition

from the other peers and almost similar product line would ma!e more difficult to sustain in

longer run.

OB5ECTI6E OF T2E STUD4

#o study how company can differentiate its current service process vis a vis to opt more

proactive measurement to sell its product.

#o study how 'xis ban! can leverage upon the "p-sell and 2ross sell strategy.

#o study the current sales process and changes because of the "p-sell and cross sell.

#o study how effectiveness of the new strategy in service deliverable.

LITERATURE RELATED TO T2E RESEARC2

'n #(%e'' is simply convincing the buyer that he or she should purchase a more

expensive :and higher quality or more versatile; product than the one under

consideration.

' r"%%&%e''is an effort to encourage the committed buyer to add auxiliary items to the

purchase, such as accessories or related items.

Experienced online cross-sellers !now that selecting the items that are to appear alongside

each product is a huge, time-consuming /ob. Kou want to get it right, and after itDs done, you

should plan to !eep trac! of how well the cross-sellers are doing.

#he selection and placement of cross-sell items should be part of your web design, so youDll

need some guidelines for your designers. #hese rules should also serve the fol!s whoDll be

selecting the items for the product page. Kou can set whatever rules you want, but here are

some samples of rules in use by other vendors that you can use as promptsJ

isplay a maximum of three cross-sell items.

'll items should be in stoc!.


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#he items should not be sale items.

Each cross-sell item should be less expensive than the main item.

#he items should be familiar and not require descriptions and explanations.

#he items should have no options :si1e or color choice, for example;.

#he images of the cross-sell items should be of a specific si1e :larger than thumbnail,

but smaller than the main item, and tiled along the right margin.

#he database of items you provide or sell may be organi1ed with an +affinity lin! that

identifies them as possible cross-sell items for another product. $f you have thousands of

items, creating these figures is bound to ta!e a long time, although you could well decide to

cross-sell on /ust your best-sellers or ma/or items. $f youDve decided to display three cross-sell

items per page, you should identify five or six compatible items in your database to ensure that

youDre not offering items that are temporarily out of stoc!.

GereDs a good hint for identifying cross-sell items. 3ne large retailer identified a team of

particularly perceptive floor salespersons and invited them to select the cross-sell items for

their web site. #his wor!ed well, as these fol!s !new exactly what customers tended to buy

along with ma/or purchases when they were in the store.

SCOPE OF T2E T2ESIS 7ORK

#he study remains focus towards the selling strategy which is up and cross for the 'xis ban! and

to understand 6ariations on the up sell and cross-sell particularly for the ban!ing environment.

RESEARC2 3ET2ODOLOG4

Se"n$ary $ata

- %oo!, $nternet, Aournal would be require to collect the secondary data for the above topic

Pri)ary $ata-

Bor this study $ will try and gather the data through structured questionnaire.

#ool usedJ Excel.

*ampling method J robabilistic sampling L andom sampling

*ample *i1e J 00


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#arget 'udienceJ *ales staff, customer , roduct >anager from the 'xis %an!

5USTIFICATION FOR C2OOSING A PARTICULAR RESEARC2 PROPOSAL$t is always better for the %an! to be more proactive than reactive in approach as the product is

not perishable and ban! can ta!e some ris! over using the different sales technique to gain

more confidence amongst the customer.


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LITRATURE RE6IE7

2ross-selling is a strategy of providing existing customers the opportunity to purchaseadditional items offered by the seller. 3ften, cross-selling involves offering the customer items

that compliment the original purchase in some manner. #he idea behind cross-selling is to

capture a larger share of the consumer mar!et by meeting more of the needs and wants of each

individual customer.

#he idea of cross-selling translates well into /ust about any business situation. $n the fast food

industry, customers are often invited to try new products or established complimentary items.

Bor example, when an individual orders a hamburger at a local fast food restaurant, the server

will often as! the customer if her or she would li!e a side item to go with the hamburger. $f the

restaurant is offering a new dessert, the server may also suggest to the customer that the new

item may be a desirable compliment to the hamburger. %y employing this simple approach, the

server may entice the customer into ma!ing another purchase above and beyond the one

originally intended. 2ross selling is employed in retail as well as the services sector.

Cr"%%&%e''ing in Ban!%

2ross-selling stands for being able to offer to the existing ban! customers, some additional

ban!ing products, with a view to expand ban!ing business, reduce the per customer cost of

operations and provide more satisfaction and value to the customer. Bor instance, when a ban!

is in a position to sell to a deposit customer :say saving ban! or term deposit;, a loan product

such as housing loan, credit card, personal loan or vice-versa, this would result into additional

business and lead to low per customer cost and higher per customer earning.

$n the present day context, the cross selling has come into focus, as some of the new private

ban!s :$2$2$ %an!; have been able to offer to their customer a variety of products and thus

generate more business through cross selling. %ut for most of the public sector ban!s, in

particular, the concept in its new form, is still at its evolutionary stage.

Every ban! has its own logic of how many relationships it would li!e to have with its

customers. $t can be J?, J, etc. #he more relationships the ban! has with a customer is

tantamount to one having a better wallet share of the customer. >ore spends on all the

products of the ban! leads to better top- and bottom-line performance.


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S"(e "/ r"%% %e''ing

#he crossing selling may ta!e place on the liability side :i.e. different !inds of deposit

accounts; or on the asset side :i.e. loans for different requirements; or between the two. $tcould be either at the initiative of the customers or a ban! can implement it as a well prepared

strategy.

Strategie% /"r r"%% %e''ing

#he existing client base of the ban!s could be used by them for the purpose of cross selling

after carefully charting the profile of the customers. Bor this purpose, the ban!s can underta!e

studies for various products and various geographical areas to understand the potential

available for cross selling. #he ban!s may underta!e some of the following stepsJ

M 2ollection of data and preparation of data base of the customers, because the entire exercise

of cross selling is based on such data base of the customers.

M $dentification of customers and products that could be offered and then charting the strategy

to offer the products.

M $mparting proper training to the staff to create team spirit and sharing with them the strategy

for underta!ing cross selling.

M *electing target customers and narrowing down the product range, or even development of

new products if necessary, to meet the specific needs of the group.

M Effective delivery.

Pr"e%% "/ Cr"%% %e''ing

. 9et close to the customer

Geavy brand expenditure

2ustomer advice

2> and capture of customer information

$ntensive staff training

?. ominate the customerDs product options

#a!eover of other product manufacturers

%undling :so customers have to buy roduct ' with roduct %;

.2ontinual NpushD selling


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2ross-sales targets given to front-line staff

Geavy direct mar!eting

Bene/it% /r") r"%% %e''ing

#he ma/or benefit is in terms of cost reduction as for a ban!, the cost of contracting a

new customer is much higher than to serve an existing customer :may be up to -8

times;.

#hrough cross selling the benefits of economies are available to the ban!, which

reduce the cost further and increase the profits.

'nother additional advantage is that the cross selling helps in building brand value if

the loyalty of the customer could be ensured for the brand, as in that case theli!elihood of shifting the business dealings to another organisationIban! by the

customer, is much less.

*trengthen 2lient (oyalty and $mprove the %ottom-(ine. #here are many different

ways to build client loyalty, however crossIselling by far has proven to be the most

effective approach. 2ross selling can clearly solidify a client relationship with an

advisor and their firm thereby reducing attrition and increasing the lifetime

profitability of each client.

*.1 Cr"%% %e''ing

Cr"%% Se''ingis concerned with the visual aspects of a company&s presence. When companies

underta!e corporate identity exercises, they are usually moderni1ing their visual image in

terms of logo, design, and collaterals. *uch efforts do not normally entail a change in brand

values so that the heart of the brand remains the same - what it stands for, or its personality.

"nfortunately, many companies do not reali1e this fallacy, as they are sometimes led to

believe by agencies and consultancy companies that the visual changes will change the brand

image. %ut changes to logos, signage, and even outlet design do not always change consumer

perceptions of quality, service, and the intangible associations that come to the fore when the

brand name is seen or heard.

#he best that such changes can do is to reassure consumers that the company is concerned

about how it loo!s. %rands do have to maintain a modern loo!, and the visual identity needs to

change over time. %ut the !ey to successfully effecting a new loo! is evolution, not revolution.


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#otally changing the brand visuals can give rise to consumer concerns about changes of

ownership, or possible changes in brand values, or even un/ustified extravagance. $f there is a

strong brand personality to which consumers are attracted, then substantial changes maydestroy emotional attachments to the brand. eople do not expect or li!e wild swings in the

personality behavior of other people, and they are /ust as concerned when the brands to which

they have grown used exhibit similar 4schi1ophrenic4 changes.

3n the other hand, if the intention is to substantially improve the standing of the brand, then

corporate identity changes can be accompanied by widespread changes to organi1ational

culture, quality, and service standards. $f done well, and if consumers experience a great new

or improved experience, then the changes will, over the longer term, have a corresponding

positive effect on brand image. $f you are spending a vast amount of money on corporate

identity, it is as well to remember this.

$n mar!eting, a corporate identity is the 4persona4 of a corporationwhich is designed to accord

with and facilitate the attainment of business ob/ectives. $t is usually visibly manifested by

way ofbrandingand the use of trademar!s. 2orporate identity comes into being when there is

a common ownership of an organi1ational philosophythat is manifest in a distinct corporate

culture H the corporate personality. 't its most profound, the public feel that they have

ownership of the philosophy. $n general, this amounts to a logo:logotype andIor logogram;

and supporting devices commonly assembled within a set of guidelines. #hese guidelines

govern how the identity is applied and confirm approved color palettes, typefaces, page

layouts and other such methods of maintaining visual continuity and brand recognition across

all physical manifestations of the brand. >any companies, such as >conald&sand Electronic

'rts, have their own identity that runs through all of their products and merchandise. #he

trademar! 4>4 logo and the yellow and red appear consistently throughout the >conald&s

pac!aging and advertisements. >any companies pay large amounts of money for an identity

that is extremely distinguishable, so it can appeal more to its targeted audience.

2orporate identity is often viewed as being composed of three partsJ

2orporate design :logos, uniforms, etc.;

2orporate communication :commercials, public relations, information, etc.;

2orporate behavior :internal values, norms, etc.;
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Trademarkshttp://en.wikipedia.org/wiki/Organisational_philosophyhttp://en.wikipedia.org/wiki/Logotypehttp://en.wikipedia.org/wiki/McDonald'shttp://en.wikipedia.org/wiki/Electronic_Artshttp://en.wikipedia.org/wiki/Electronic_Artshttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Trademarkshttp://en.wikipedia.org/wiki/Organisational_philosophyhttp://en.wikipedia.org/wiki/Logotypehttp://en.wikipedia.org/wiki/McDonald'shttp://en.wikipedia.org/wiki/Electronic_Artshttp://en.wikipedia.org/wiki/Electronic_Artshttp://en.wikipedia.org/wiki/Marketing


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2orporate identity has become a universal technique for promoting companies and improving

corporate culture. >ost notably is the company'3*,founded by >otoo


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the values and ambitions of an organi1ation, its business, and its characteristics. Bour functions

of corporate visual identity can be distinguished. #hree of these are aimed at external

sta!eholders. Birst, a corporate visual identity provides an organisation with visibility and

Nrecogni1abilityD. Bor virtually all profit and non-profit organi1ations it is of vital

importance that people !now that the organi1ation exists and remember its name and

core business at the right time.

*econd, a corporate visual identity symboli1es an organi1ation for external

sta!eholders, and, hence, contributes to its image and reputation.

#hird, a corporate visual identity expresses the structure of an organi1ation to its

external sta!eholders, visuali1ing its coherence as well as the relationships between

divisions or units.

' fourth, internal function of corporate visual identity relates to employeesD

identification with the organi1ation as a whole andIor the specific departments they

wor! for.

2orporate visual identity management involves the planned maintenance, assessment and

development of a corporate visual identity as well as associated tools and support, anticipating

developments both inside and outside the organi1ation, and engaging employees in applying it,

with the ob/ective of contributing to employeesD identification with and appreciation of the

organi1ation as well as recognition and appreciation among external sta!eholders. *pecial

attention is paid to corporate identity in times of organi1ational change. 3nce a new corporate

identity is implemented, attention to corporate identity related issues generally tends to

decrease. Gowever, corporate identity needs to be managed on a structural basis, to be

internali1ed by the employees and to harmoni1e with future organi1ational developments.

Efforts to manage the corporate visual identity will result in more consistency and the

corporate visual identity management mix should include structural, cultural and strategic

aspects. 9uidelines, procedures and tools can be summari1ed as the structural aspects of

managing the corporate visual identity. Gowever, as important as the structural aspects may

be, they must be complemented by two other types of aspects. 'mong the cultural aspects of

corporate visual identity management, sociali1ation L i.e., formal and informal learning


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processes L turned out to influence the consistency of a corporate visual identity. >anagers are

important as a role model and they can clearly set an example. #his implies that they need to

be aware of the impact of their behavior, which has an effect on how employees behave. $fmanagers pay attention to the way they convey the identity of their organi1ation, including the

use of a corporate visual identity, this will have a positive effect on the attention employees

give to the corporate visual identity. Burther, it seems to be important that the organi1ation

communicates the strategic aspects of the corporate visual identity. Employees need to have

!nowledge of the corporate visual identity of their organi1ation, not only the general reasons

for using the corporate visual identity, such as its role in enhancing the visibility and

recogni1ability of the organi1ation, but also aspects of the story behind the corporate visual

identity. #he story should explain why the design fits the organi1ation and what the design L in

all of its elements L is intended to express.

UPSELLING

#he growing significance of managing corporate identity is underscored by a 7@7 survey in

%ritain by >ar!et 3pinion esearch $nternational, which found that == percent of the leading

industrialists questioned believed that the importance their firms attached to developing and

promoting their corporate identity would increase in the near future. esearch a year later by

2%$ and Bitch 2onsultants corroborated this finding and the experience of the 770s strongly

suggests that this expectation has materiali1ed. #he overriding reason for the burgeoning

concern for corporate identity is abundantly clear. We live in a time of immense environmental

complexity and change, and consequently corporations have been forced to significantly alter

their strategies to better compete and survive. >ergers, acquisitions, and divestitures represent

a ma/or dimension of corporate change over the past several decades. 2onsider the extreme

example of the 9reyhound 2orporation. Bor most of this century, 9reyhound was the largest

busing company in


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the electronics industry. ersonal computers can become outmoded in the period of less than a

year. $n the audio segment of the mar!et, tapes replaced records and, in turn, were replaced by

compact discs, which may in the future be superseded by digital audiotapes. 2ompanies withstrong corporate images, such as *ony 2orporation and 2asio, obviously have an advantage in

such dynamic mar!ets because their name adds value to their products by reducing uncertainty

in the eyes of distributors, retailers, and consumers. eregulation has been a critical factor in

many industries. Bor instance, as a result of the court-ordered brea!up, '#)# has had to

develop a new strategy and a more aggressive mar!eting-oriented culture to ad/ust to its new

realities. 2oncurrently, the telecommunications giant adopted a new logo and initiated a

communication program to help convey its new identity. 9lobali1ation has been still another

catalyst in the rise of corporate identity programs. #o illustrate, 'merican Express 2o.

originally was a freight company in the


20/70

The"ry "/ C"r("rate I$entity

#heory always underlies good practice. #heory identifies and defines the !ey variables in theprocess under consideration and explains the interrelationship among them. $n the process for

managing corporate identity, the fundamental variables are corporate identity, corporate

communication, corporate image, and corporate reputation. 2orporate identity is the reality of

the corporation. $t is the unique, individual personality of the company that differentiates it

from other companies. #o use the mar!eting metaphor, it is the corporate brand. 2orporate

communication is the aggregate of sources, messages, and media by which the corporation

conveys its uniqueness or brand to its various audiences. 2orporate image and corporate

reputation are in the eye of the beholder. $mage is the mental picture that people have of an

organi1ation, whereas reputation constitutes a value /udgment about the company&s attributes.

#he ob/ective in managing corporate identity is to communicate the company&s identity to

those audiences or constituencies that are important to the firm in a manner that is both

positive and accurate. #his process involves fashioning a positive identity and communicating

this identity to significant audiences in such a way that they have a favorable view of the

company. #he feedbac! loops in the model indicate that an unsatisfactory image or reputation

can be improved by modifying corporate communication or reshaping the corporate identity or

both. #he principal issues relating to the five components of the modelHidentity, image,

reputation, communication, and feedbac!Hwill now be examined in greater detail.

2orporate identity is the reality and uniqueness of the organi1ation. $t may be bro!en down

into its component partsJ corporate strategy, corporate culture, organi1ational design, and

operations. *trategy is the overall plan that circumscribes the company&s productImar!et scope

and the policies and programs by which it chooses to compete in its chosen mar!ets. Bor

example, *outhwest 'irlines is a regional carrier competing in the airline industry through

strategies that result in low costs and low fares. 2orporate culture is the shared values, beliefs,

and assumptions that the organi1ation&s members hold in common as they relate to each other,

their /obs, and the organi1ation. $t defines what the firm personnel believes is important and

unimportant, and explains to a large degree why the organi1ation behaves the way it does.

*outhwest 'irlines has a strong corporate culture that highly pri1es company loyalty, internal

cooperation, and service to the customer. *outhwest&s culture supports the company&s strategy


21/70

and is a prominent component of its identity. 3rgani1ational design refers to the basic choices

top managers have in developing the pattern of organi1ational relationships. $t encompasses

issues such as whether basic departmentation should be by function or product division, theoverall configuration :tall vs. flat;, the degree of decentrali1ation, the number of staff

personnel, the design of /obs, and the internal systems and procedures. 'll of these factors can

affect, to some degree, corporate identity. Brom the perspective of the firm&s external

constituents, however, the corporateIproduct relationship normally is the most critical element

of organi1ational design. #he corporateIproduct relationship refers to the deliberate approach a

firm follows in structuring the relationship of its products to one another and to the corporate

entity. 2orporateIproduct relationships may be categori1ed as single entity, brand dominance,

equal dominance, mixed dominance, or corporate dominance. *ingle entity companies offer

one product line or set of servicesO consequently, the image of the company and that of the

product tend to be one and the same. *outhwest 'irlines is an obvious example of a single

entity companyO it is 00 percent involved in the airline business. $dentity problems typically

arise for single entity firms such as *outhwest 'irlines if they expand into areas and activities

not immediately related to their current strategy. #he corporate planners must carefully

consider the corporate identity they desire to have and the concomitant image they wish to

pro/ect. "nder the brand-dominant approach, the decision has been made not to relate the

product brand and corporate names. #his approach is followed by many consumer products

companies. Bor instance, >arlboro and >erit cigarettes, ost cereals, Aell-3, Fraft cheeses,

and 3scar >ayer meats are all well-!nown products but few consumers reali1e that they are

all mar!eted by the hilip >orris 2ompanies, $nc. 9eneral >otors 2orp., historically, has

exemplified the equal-dominance approach. #he principal 9eneral >otors& automobile

divisionsH2hevrolet, ontiac, 3ldsmobile, %uic!, and 2adillacHmaintained separate

identities, but each was also closely associated with the corporation.


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C"r("rate I)age an$ Re(#tati"n

2orporate image and reputation are discrete but related concepts. 's noted earlier, corporateimage is the model that people have of a company. 2orporate reputation, on the other hand,

represents a value /udgment that people ma!e about the firm as a whole or one or more of its

attributes. 2orporate images typically can be fashioned fairly quic!ly through specific actions

and well-conceived communication programs, whereas reputations evolve over time as a result

of consistent performance :and they can be reinforced through corporate communication;.

2learly, a corporation must be concerned about its image and reputation amongst its important

constituent groups. $n academic parlance, these significant constituent groups are called

sta!eholders. #hey are groups that have a sta!e in the company. *ta!eholders are affected by

the actions of the company and, perhaps more importantly, their actions can affect the

company. 2onsequently, its image and reputation in the eyes of its sta!eholders is critical to

the company. #he principal sta!eholders with whom most large firms must be concerned areJ

2ustomers

istributors and retailers

Binancial institutions and analysts

*hareholders

9overnment regulatory agencies

*ocial action organi1ations

#he general public

Employees

#he company&s image and reputation vis-a-vis its various sta!eholders will influence their

willingness to provide or withhold support. #hus, if its customers develop a negative

perception of the company or its products, its sales and profits assuredly will decline. 2onsider

the recent travails of the otor 2ompany. $n the 7@0s it en/oyed the image of a

customer-oriented, trendsetting automobile manufacturer with an excellent reputation for

automotive engineering. %y the mid-770s, however, as a result of a series of poor decisions,

its image as a cutting-edge producer, along with sales and profits, had declined precipitously.


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$t is now perceived by customers as well as other sta!eholders as a conservative ma!er of

stodgy, boxy cars with its engineering reputation compromised. #he impact of corporate

identity in the financial community can be seen through the history of the %ritish pac!aging,printing, and coating company that recently changed its name from %owater to exham in

response to confusion in the financial community as well as among its customers as to its

identity. $n


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role in representing the company to its external sta!eholders. 3bviously, each of the various

sta!eholder groups is li!ely to have a somewhat different perception of the corporation

because each is concerned primarily with a different facet of its operation. #hus, customersare principally interested in the price, quality, and reliability of the company's products and

services. Binancial institutions are concerned with financial structure and performance.

Employees are mainly concerned with wages, wor!ing conditions, and personnel policies.

(ogically, then, a company should tailor its communication to each sta!eholder group

individually to engage the special concerns of that group. ' consistent image among the

various sta!eholder groups, however, is also essential. 'lthough it is prudent to stress different

facets of the firm&s identity to its various publics, the firm should avoid pro/ecting an

inconsistent image for two !ey reasons. Birst, some of the concerns of the sta!eholders

overlap. Bor example, the financial community and the shareholders would have many of the

same financial and strategic concerns about the company. $n fact, many shareholders rely

heavily on the advice of experts from financial institutions. %oth employees and the general

public have an interest in the overall prestige of the firm and the reputation of its products. '

social action group&s criticisms whether economically effective or not, is bound to influence

some customers and affect the company&s public reputation. 3f course, a regulatory agency

such as the 3ccupational *afety and Gealth 'dministration would focus narrowly on the firm&s

safety record and policies but the company&s employees and their labor unions also have a

sta!e in these matters. #he second and related reason for avoiding an inconsistent image is that

the sundry sta!eholders are not separate, discrete entities. >embership overlaps. 2onsider the

example of a typical public utility where almost all of its employees are also customers and a

significant number may also be shareholders. Burthermore, it is not unli!ely that some of its

employees will be active in environmental or consumer rights groups that challenge the

company on specific issues. $t is also li!ely that some of the company&s ban!ers and regulators

will be among its customers.

C"r("rate C"))#niati"n


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2orporate communication is the lin! between corporate identity and corporate image and

reputation. $t should be defined in the broadest possible sense because companies

communicate their identities in many different ways. #his includes almost everything they dofrom the way telephones are answered to the involvement of their employees in community

affairs. #he different categories are


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#his category includes mission statements, credos, codes of ethics, annual reports, advertising

copy, and company slogans. 2ompany slogans can be a particularly potent means of

communicating to sta!eholders. $2$2$ %an!Ds 4Gum Gai


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group interviews as their chief research tools. #his type of comprehensive outside review

would normally include an analysis of the corporate identity, an appraisal of the firm&s image

and reputation in the eyes of its sta!eholders, and an evaluation of the efficacy of its corporatecommunications. #he consultant&s recommendations might run from ma!ing slight alterations

in the corporate communication program to a reshaping of the firm&s identity.

Bor example, Aaguar, in the days prior to privati1ation, learned from research that it had a

terrible reputation for quality and reliability among customers. #o correct this problem, Aaguar

initiated a rigorous quality program which has helped the firm regain its earlier reputation for

quality vehicles.

#he modern concept of corporate identity has a broad sweep and a strategic focus. $t views a

company&s image and reputation among its several sta!eholders as critical resources over

which the firm has control. #he framewor! presented here outlines a conceptual model

through which management can comprehend, monitor, and influence the development of these

intangible assets. #he concept is relatively simple but its effective implementation can be

profoundly challenging. #he firms that master this challenge will, in all li!elihood, be the ones

that will survive and prosper today&s turbulent business environment.

Brand identityis the total proposition that a company ma!es to consumers - the promise it

ma!es. $t may consist of features and attributes, benefits, performance, quality, service

support, and the values that the brand possesses. #he brand can be viewed as a product, a

personality, a set of values, and a position it occupies in people&s minds. %rand identity is

everything the company wants the brand to be seen as. #he brand identity is the audio-visual

trade dress of the brand that expresses, and brings to artistic life, the brand definition,

especially theJ

Central organizing thought o the !rand- what the brand is all about from an insiderDs

perspective, expressed in one short sentence.

Slogan" the publicly expressed statement of the brand that translates the central

organi1ing thought for the benefit of its target customers.

#ersonality o the !rand" the human character of the brand, maybe supported by a

celebrity character within the company.


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$alues o the !rand"what the brand stands for and believes in.

%astes&appearance o the !rand"what it li!es, what it wears, how it spea!s.

Brand heritage- the stories told about the brand - the insiderDs view.

Emotional !eneits o the !rand"what the brand delivers emotionally - avoidance of

pain, reduction in pain, promotion of pleasure.

'ard !eneits o the !rand" what the brand delivers rationally- "tility 6alues.

#he brand identity, used in all aspects of communication :including literature,

brochures, pac!aging, the product itself, the $nternet, stationery, and so on;, must

reflect all these things in itsJ

9raphical design ) #ype face

"se of color ) *ounds

#he more differentiated the identity, the easier it is to protect from infringement. 2ompetitors

will often pic! up on elements of the trade dress of the brand leader.

#hey must be confronted, otherwise the trademar! is lost as a valuable piece of intellectual

property and, more importantly, the clarity of the companyDs identity becomes drowned in

confounding +noise from other brands.

Brand image, on the other hand, is the totality of consumer perceptions about the brand, orhow they see it, which may not coincide with the brand identity. 2ompanies have to wor! hard

on the consumer experience to ma!e sure that what customers see and thin! is what they want

them to. #he !ey in brand image research is to identify or develop the most powerful images

and reinforce them through subsequent brand communications. #he term 4brand image4

gained popularity as evidence began to grow that the feelings and images associated with a

brand were powerful purchase influencers, though brand recognition, recall and brand identity.

$t is based on the proposition that consumers buy not only a product :commodity;, but also the

image associations of the product, such as power, wealth, sophistication, and most importantly

identification and association with other users of the brand. $n a consumer led world, people

tend to define themselves and their Aungian 4persona4 by their possessions. 9ood brand

images are instantly evo!ed, are positive, and are almost always unique among competitive

brands. %rand image can be reinforced by brand communications such as pac!aging,

advertising, promotion, customer service, word-of-mouth and other aspects of the brand


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experience. %rand images are usually evo!ed by as!ing consumers the first wordsIimages that

come to their mind when a certain brand is mentioned :sometimes called 4top of mind4;.

When responses are highly variable, non-forthcoming, or refer to non-image attributessuch ascost, it is an indicator of a wea! brand image.

*.* C"r("rate Re+ran$ing

$t is the wave of &corporate rebranding& identity, that touch the $ndian corporate to go for global

identity ma!eover. $ndia witnessed in ma/or rebranding of corporate identity such as

antaloons, Gutch, %a/a/ auto, abur, %an! of %aroda, "#$ %an! and $%$ %an! among

others.

(hat is corporate re!randing)

ebranding is defined as the process by which a product or service developed with one brand

or company or product line affiliation is mar!ed or distributed with a different identity.

ebranding are now creating and reshaping the future of corporate identity. 3n the

3ther hand corporate identity in turn is considered to be the starting point for creating a

relationship with customers. ehrinfar has optly said that &creating a brand identity,

including logo and brand name, entails a process where one pro/ects the inherent qualification

of the brand&.Gence the process range from change of the brand logo to the positioning based

on brand name to portray the inherent qualities. (ogos reflects the qualities, aspirations of the

brand, the culture and the personality of the organi1ation. %rand identity is what to stay in the

mind of the consumers. Gence corporate internal and external lin! with consumer through

brand identity mechanism go a long way by ensuring consistency of the brand promise. Gence

brand identity is not /ust logo designO it is paradigm shift of the corporate to portray the culture

of the brand. ' corporate identity is complete set of association along with brand identify the

brand based on familiarity and recall.
http://www.asiamarketresearch.com/glossary/attributes.htmhttp://www.asiamarketresearch.com/glossary/attributes.htm


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Re+ran$ing Strategie%

#here are some cases in which corporate rebranding is the primary initiative needed to

successfully reposition a company or brand. ebranding strategies and rebranding initiativesare appropriate and needed when the company or brand already has strong, relevant

underlying differentiation, is currently doing everything right, and the sole purpose of

rebranding is to reflect what the company is already doing in a much more compelling,

persuasive manner. $n short, corporate rebranding is about strategically polishing the company

with sharper, more differentiating positioning. >ost companies in need of rebranding suffer

from generali1ed positioning. "sually a company doesn&t want to narrow its message too much

for fear of missing opportunities. #herefore, the company doesnDt strongly position itself as an

expert in its sweet spot. 's a result, people searching for what the company does best donDt

recogni1e the company as an expert, and the company needs to fight harder to win the

business it is really good at, business it should win easily every time.

3n the other hand, conventional wisdom is that more generali1ed positioning gives a company

more opportunities. #he reality is this generali1ed corporate positioning positions a company

as, you guessed it, a generalist. #o win business, generalists have to not only won over other

generalists but they have to also beat out specialists.

7"r$% "/ Ca#ti"n

"nfortunately, many mar!eters and ad agencies view corporate rebranding as a change in

corporate identity. #his alone rarely yields significant results. *ure, occasionally a corporate

logo may need an update, but that typically isnDt going to solve much unless other change

occurs.

%eware of internal and external voices that promote the need for a new corporate identity as a

panacea for the companyDs problems. 'lso, be sure to assess whether itDs rebranding or

repositioning that you need. While corporate rebranding can ma!e a significant difference in

attracting and securing new business, its benefits will be short lived if you don&t deliver on

your brand promises or if more significant change was really needed.


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Re&+ran$ing O+,etive%

#he most common ob/ective of rebranding is to develop a new image of the company in the

mar!et.

#he issue areas can be built into an integrating conceptual model of the re-branding process as

an aspect of, or activity within, corporate renewal. $t suggests that re-branding though indeed

infrequent, might be seen as part of a cyclical model of organi1ational management and

renewal.

Table 2.1 Four Stages in Corporate

Table 2.2 Main Areas in Corporate


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Main Areas in Corporate


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#his model suggests a process based approach to corporate re-branding organi1ations which

starts from consulting and discussing the issues with the sta!eholders. #hen the strategies for

the

e-development of brand should be developed so that it should be properly communicated to

the sta!eholders. #he management of the firm and its brand should be properly handled )

implemented so that it reflects the goals and ob/ectives clearly. #hen monitoring the

sta!eholderDs perception about the change is necessary in order to evaluate the success of the

pro/ect. #hese issue areas can be built into an integrating conceptual model of the re-branding

process as an aspect of, or activity within, corporate renewal. $t suggests that re-branding

though indeed infrequent, might be seen as part of a cyclical model of organi1ational

management and renewal activities and schemes.

*. Rea%"n% /"r C"r("rate Re+ran$ing

Figure 2.1 Conceptual Model of


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#here are several reasons why a corporate ta!es the brand ma!eover strategyJ

. 6i%i+i'ity an$ Re"gni%a+i'ityJ $t provides an organi1ation with visibility and

recognisability so that people should recogni1e name and the core business philosophythrough its brand identity.

?. Diver%i/iati"n int" ne9 area-iversification into new area of operation may require new

corporate brand image ma!eover so that general public can easily differentiate it.

. 3erger A:#i%iti"n- ' successful rebranding strategy portrayed the post merger brand

activity in the similar line of business. Bor example >aruti *u1u!i 2ompany.

8. De)erger-emerger embar!s upon the firm to opt for new brand identity to position

differently from its existing association. Bor example eliance 2ommunication (imited.

5. Tran%/"r)ati"n- *ometime to face the new mar!et challenges ma!eover of brand is

considered to expand its operation either in the new segment or regenerating new values in the

mar!et. Bor example various companies li!e Gutch, antaloons, $ndian airlines etc.

. Other%-

#a!ing the brand into a new area li!e retail or internet mar!eting

lanning an $3

e/uvenating the existing brand

(aunching into a new mar!et

eveloping a new variant of the existing product.

#here is a list of examples given belowJ


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Panta'""n

%

$t changed its logo from

4!nowledge group4 to 4Buture

group4 featuring the upcoming

retail revolution.

Da+#r

#he re/uvenation from its

traditional logo, the new banyan

tree identity combine with form

and color featuring freshness and

stability. $t expresses a brand that

is positive, proactive and

progressive.

Ba,a,

#he new loo! of %a/a/ brand

identity and logo depicting a

flying 4%4 in pitch blue is a great

ma!eover to show style withtechnology.

Ban! "/

Bar"$a

$t replace its blue and yellow

identity with a vibrant orange call

4%aroda *un4 with cric!eter ahul

ravid as brand endorser to

pro/ect itself as a modern and tech

savvy ban!.

In$ian

Air'ine%

#he wheel of the sun temple at

!onara! inspires the new graphic

depiction of a partly visible blue

wheel. $t stands for timeless

motion, trust and courage to face

competition.

Table 2.3 List of exaples of Corporate


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#he today&s brand mar!eters are facing cutthroat competition in the domestic mar!et. ising

competition in the domestic form, force the company to go for a corporate brand ma!eover.%ut a mere change in logo will not serve the purposeO it requires a overall corporate identity

ma!eover to represent a fundamental shift in the way the companies will operate.

#he main reason that corporations change their name is because of mergers and acquisitions

with other businesses. $n such cases, a complete new name may be chosen to signal

capabilities. $n other cases, a new corporate name arising from a merger or acquisition may be

based on some combinations of the two existing corporate names. Binally, in some cases, the

name with more potential inherent brand equity is chosen and the other name is regulated to a

sub-brand role or eliminated altogether. eciding the appropriate strategy is depends on the

existing and potential brand equity associated with each brand in the context of the newly

merged business. 'nother reason that corporate names may need to be changed is because of

divestitures, leveraged buyouts, or sale of assets.

#he corporate name may also need to be changed because of public misperceptions about the

nature of the companyDs business. Binally, significant shifts in corporate strategy may

necessitate name changes. $n changing the corporate name, the assumption is that the existing

brand associations do not have the desired strength, favorability, and uniqueness and that a

new name can be chosen perhaps in combination with a corporate image campaign that better

conveys the desired brand image.


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>anagement visibility

$nternal feedbac!

ebrand +intent and direction

E;terna' "))#niati"n%

"nified and aligned brand change programme for all employees

External rebrand engagement and feedbac!

'nother important tool for 2orporate ebranding is Corporate Brand *atrix

#he 2orporate %rand >atrix is a tool for planning, sourcing, budgeting and staffing

institutional rebranding programs and a tool which helps the client, consultants and designers

and unable them to spea! the same language.

The 3atri; i% +a%e$ "n three (r"("%iti"n%-

. $t can identify effectively allpurposes for underta!ing a rebranding initiative, &the

drivers,& and the strategic branding options :in the form of communication goals;

commonly associated with each driver. $t is one axis of the >atrix.

?. $t can also identify all the tools and tactical choices that can be used to effectrebranding. $t is the second axis.

. #his gives us a structure for learning from history -- a potential data base ofP

rebranding case histories. What were managements& driving purposes and what tools

were used to achieve each purposeQ

$n 2orporate %rand >etrics, there are two axisJ

#he +riving urpose axis

#he 4#ools and tactics4 axis

The erger ) 'cquisition >erger of equals, best of both


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#ransformed survivor brand


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'dvertising brea!through incorporate the successful element

(egal requirements retain or transfer brand equities

The


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2orporate level facts $ndustry definitions

9eographic scopes

3wnership

>anagement

*ub corporate facts 2ompetencies

efining units

*ubsidiaries

%rands ) roducts

(ow visibility Employee mention, functional focus

>edium visibility ublic launch ads, internal publishment

Gigh visibility 'nchors installation campaign, staged events

#he 2orporate %rand >atrixis a comprehensive tool for planning an institutional rebranding.

CO3PAN4 PROFILE

AXIS BANK ? AN O6ER6IE7

.1 2i%t"ry "/ Ban!ing In$#%try

%an!ing in $ndia originated in the first decade of @th century with #he 9eneral %an! of $ndia

coming into existence in =@. #his was followed by %an! of Gindustan. %oth these ban!s are

now defunct. #he oldest ban! in existence in $ndia is the *tate %an! of $ndia being established

as 4#he %an! of %engal4 in 2alcutta in Aune @0. ' couple of decades later, foreign ban!s

li!e 2redit (yonnais started their 2alcutta operations in the @50s. 't that point of time,

2alcutta was the most active trading port, mainly due to the trade of the %ritish Empire, and

due to which ban!ing activity too! roots there and prospered. #he first fully $ndian owned

Table 2., Situation Factors

". C#ange vents

Table 2.1- Cange +#ents
http://www.corporatebrandmatrix.com/http://www.corporatebrandmatrix.com/


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ban! was the 'llahabad %an!, which was established in @5. %y the 700s, the mar!et

expanded with the establishment of ban!s such as un/ab umbai - both of which were founded under private ownership.#he eserve %an! of $ndia formally too! on the responsibility of regulating the $ndian

ban!ing sector from 75. 'fter $ndia&s independence in 78=, the eserve %an! was

nationali1ed and given broader powers.

Ear'y 2i%t"ry

't the end of late-@th century, there were hardly any ban!s in $ndia in the modern sense of

the term. 't the time of the 'merican 2ivil War, a void was created as the supply of cotton to

(ancashire stopped from the 'mericas. *ome ban!s were opened at that time which

functioned as entities to finance industry, including speculative trades in cotton. With large

exposure to speculative ventures, most of the ban!s opened in $ndia during that period could

not survive and failed. #he depositors lost money and lost interest in !eeping deposits with

ban!s. *ubsequently, ban!ing in $ndia remained the exclusive domain of Europeans for next

several decades until the beginning of the ?0th century. #he %an! of %engal, which later

became the *tate %an! of $ndia. 't the beginning of the ?0th century, $ndian economy was

passing through a relative period of stability. 'round five decades have elapsed since the

$ndia&s Birst war of $ndependence, and the social, industrial and other infrastructure have

developed. 't that time there were very small ban!s operated by $ndians, and most of them

were owned and operated by particular communities. #he ban!ing in $ndia was controlled and

dominated by the presidency ban!s, namely, the %an! of %ombay, the %an! of %engal, and the

%an! of >adras - which later on merged to form the $mperial %an! of $ndia, and $mperial

%an! of $ndia, upon $ndia&s independence, was renamed the *tate %an! of $ndia.#here were

also some exchange ban!s, as also a number of $ndian /oint stoc!ban!s. 'll these ban!s

operated in different segments of the economy. #he presidency ban!s were li!e the central

ban!s and discharged most of the functions of central ban!s. #hey were established under

charters from the %ritish East $ndia 2ompany. #he exchange ban!s, mostly owned by the

Europeans, concentrated on financing of foreign trade. $ndian /oint stoc! ban!s were generally

under capitali1ed and lac!ed the experience and maturity to compete with the presidency

ban!s, and the exchange ban!s. #here was potential for many new ban!s as the economy was
http://en.wikipedia.org/wiki/Indian_independence_movementhttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/British_East_India_Companyhttp://en.wikipedia.org/wiki/Indian_independence_movementhttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/British_East_India_Company


42/70

growing. (ord 2ur1on had observed then in the context of $ndian ban!ingJ "In respect of

banking it seems we are behind the times. We are like some old fashioned sailing ship, divided

by solid wooden bulkheads into separate and cumbersome compartments." "nder thesecircumstances, many $ndians came forward to set up ban!s, and many ban!s were set up at

that time, a number of which have survived to the present such as %an! of $ndia and

2orporation %an!,$ndian %an!,%an! of %aroda, and 2anara %an!.

P"%t&in$e(en$ene

#hepartition of $ndia in 78= had adversely impacted the economies of un/ab and West

%engal, and ban!ing activities had remained paraly1ed for months. $ndia&s independence

mar!ed the end of a regime of the (aisse1-fairefor the $ndian ban!ing. #he 9overnment of

$ndiainitiated measures to play an active role in the economic life of the nation, and the

$ndustrial olicy esolution adopted by the government in 78@ envisaged a mixed economy.

#his resulted into greater involvement of the state in different segments of the economy

including ban!ing and finance. #he ma/or steps to regulate ban!ing includedJ $n 78@, the

eserve %an! of $ndia,$ndia&s central ban!ing authority, was nationali1ed, and it became an

institution owned by the 9overnment of $ndia. $n 787, the %an!ing egulation 'ct was

enacted which empowered the eserve %an! of $ndia :%$; 4to regulate, control, and inspect

the ban!s in $ndia.4 #he %an!ing egulation 'ct also provided that no new ban! or branch of

an existing ban! may be opened without a licensed from the %$, and no two ban!s could

have common directors. Gowever, despite these provisions, control and regulations, ban!s in

$ndia except the *tate %an! of $ndia, continued to be owned and operated by private persons.

#his changed with the nationali1ation of ma/or ban!s in $ndia on 7th Auly, 77.

Nati"na'i8ati"n

%y the 70s, the $ndian ban!ing industry has become an important tool to facilitate the

development of the $ndian economy. 't the same time, it has emerged as a large employer, and

a debate has ensued about the possibility to nationali1e the ban!ing industry. $ndira 9andhi,

the-then rime >inisterof $ndia expressed the intention of the 93$in the annual conference

of the 'll $ndia 2ongress >eeting in a paper entitled 4*tray thoughts on %an!


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swift and sudden, and the 93$ issued an ordinance and nationali1edthe 8 largest commercial

ban!s with effect from the midnight of Auly 7,77. Aayapra!ash


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and foreign ban!s. $n terms of quality of assets and capital adequacy, $ndian ban!s are

considered to have clean, strong and transparent balance sheets relative to other ban!s in

comparable economies in its region. #he eserve %an! of $ndia is an autonomous body, withminimal pressure from the government. #he stated policy of the %an! on the $ndian upee is

to manage volatility but without any fixed exchange rate-and this has mostly been true. With

the growth in the $ndian economy expected to be strong for quite some time-especially in its

services sector-the demand for ban!ing services, especially retail ban!ing, mortgages and

investment services are expected to be strong. 3ne may also expect >)'s, ta!eovers, and

asset sales. $n >arch ?00, the eserve %an! of $ndia allowed Warburg incus to increase its

sta!e in Fota! >ahindra %an! :a private sector ban!; to 0R. #his is the first time an investor

has been allowed to hold more than 5R in a private sector ban! since the %$ announced

norms in ?005 that any sta!e exceeding 5R in the private sector ban!s would need to be vetted

by them. 2urrently, $ndia has @@ scheduled commercial ban!s :*2%s; - ?@ public sector ban!s

:that is with the 9overnment of $ndiaholding a sta!e;, ?7 private ban!s :these do not have

government sta!eO they may be publicly listed and traded on stoc! exchanges; and foreign

ban!s. #hey have a combined networ! of over 5,000 branches and =,000'#>s.

.* 2i%t"ry "/ A;i% In$#%try

'xis %an!, previously called "#$ %an!, was the first of the new private ban!s to have begun

operations in 778, after the 9overnment of $ndiaallowed new private ban!s to be established.

#he %an! was promoted /ointly by the 'dministrator of the *pecified "nderta!ing of the "nit

#rust of $ndia :"#$-$;, (ife $nsurance 2orporation of $ndia :($2;, 9eneral $nsurance

2orporation (td., arch , ?00 the %an! had a net worth of s. ?@=?.7

crores with the public holding :other than promoters; at 5.5R.


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sides; growing strongly year after yearH the share of retail business, particularly retail assets,

has actually come down quite sharply in the case of 'xis %an!. #he numbers here are quite

interesting. Bor $2$2$ %an!, retail loans now :as of Aune ?00=; account for as much as =0 percent of the ban!Ds total loan boo! of s ?,00,000 crore. Bor GB2 %an!, retail assets are

around 5= per cent :s ?@,000 crore; of the total loans as of >arch ?00=. $n the case of 'xis

%an!, retail loans have declined from 0 per cent of the total loan boo! of s ?5,@00 crore in

Aune ?00 to around ? per cent of loan boo! of s.8,?@0 crore :as of Aune ?00=;. Even over

a longer period, while the overall asset growth for 'xis %an! has been quite high and has

matched that of the other ban!s, retail exposures grew at a slower pace. $f the sharp decline in

the retail asset boo! in the past year in the case of 'xis %an! is part of a deliberate business

strategy, this could have significant implications :not necessarily negative; for the overall

future profitability of the business. espite the relatively slower growth of the retail boo! over

a period of time and the outright decline seen in the past year, the ban!Ds fundamentals are

quite resilient. With the high level of mid-corporate and wholesale corporate lending the ban!

has been doing, one would have expected the net interest margins to have been under greater

pressure. #he ban!, though, appears to have insulated such pressures. $nterest margins, while

they have declined from the .5 per cent seen in ?00-08, are still hovering close to the per

cent mar!. :#he comparable margins for $2$2$ %an! and GB2 %an! are around ?.0 per cent

and 8 per cent respectively. #he margins for $2$2$ %an! are lower despite its much larger

share of the higher margin retail business, since funding costs also are higher;. *uch strong

emphasis and focus on lending also does not appear to have had any deleterious impact on the

overall asset quality. #he ban!Ds non-performing loans are even now, after five years of

extremely rapid asset build-up, below per cent of its total loans.

Brom a medium-term perspective, it appears that 'xis %an! could be charting out a niche for

itself in the private ban! space. $t appears to be following a business strategy quite different

from the high-volume and commodity-style approach of $2$2$ %an! and GB2 %an!. #hat

strategy also has its pluses in terms of the relatively higher margins in some segments of the

retail business and the in-built credit ris! diversification :and mitigation; achieved through a

widely dispersed retail credit portfolio. %ut, as indicated above, 'xis %an! has been to able to

maintain the quality of its loan portfolio despite the concentrated nature of wholesale

corporate lending.


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#he %an! today is capitali1ed to the extent of s. 5=.8@ crore with the public holding :other

than promoters; at 5=.0R. #he %an!&s egistered 3ffice is at 'hmadabad and its 2entral

3ffice is located at >umbai. resently, the %an! has a very wide networ! of more than 0@branch offices and Extension 2ounters. #he %an! has a networ! of over ?575 '#>s providing

?8 hrs a day ban!ing convenience to its customers. #his is one of the largest '#> networ!s in

the country. #he %an! has strengths in both retail and corporate ban!ing and is committed to

adopting the best industry practices internationally in order to achieve excellence.

'xis %an! continued its robust growth in the ecember ?00= quarter and has once again

beaten analystsD expectations on all parameters. Gowever, the difference this quarter is that the

growth in profitability has been driven more by a significant /ump in the net interest income

:core business; rather than non-interest income unli!e in last several quarters. E :small and medium

enterprises; and agriculture loans have grown faster than retail-advances.

Change% +r"#ght in the Ban! are-

Beore Ater

Table 3.1 Canges in /T'


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Na)e "#$ %an! 'T$* %an!

L"g"

Tag'ine *olutions for a life time


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raised capital worth s 8,500 crore, which helped 'xis %an! to start off on a strong footing.

#hey feel that this capital would last at least for three years in the case of pure organic growth.

The UTI +ran$ ha$ a :#a%i&g"vern)ent %"vereign ring t" it e%(eia''y 9hen it g"e%

"#t%i$e )etr"%. It 9a% an a$vantage then 9hy +an! have ta!en thi% $ei%i"n "n "%t "/

'"%ing it@

%an!Ds customer base is very different from the customer base of a mutual fund. *o they have

never really able to ride on the brand. #he pace at which customer base have grown indicates

the level of customer service ban! provide. 'lso, the "#$ brand was seen as a public sector

brand. #hey were board-managed private sector entity. %y changing the name, %an! have

reinforce this image.

7here A;i% Ban! ("%iti"ne$ /r") the +#%ine%% ("int "/ vie9@

'xis %an! has ta!en first step towards seeing themselves as becoming an >s. 'lso they are

planning to open ?5 branches by Auly ?00@, half of which would be in large cities. #hey are

also setting up a large agriculture financing business, for which they need to be close to

farmersO hence the ban! is going to open branches in villages. %esides, the ban! has set up

priority ban!ing branches for customers with deposits of over s 5 la!h. $t is one of the fastest

growing customer bases of our ban!, growing at 8R each year. #hey have three such

speciali1ed branches now, and planning to have one each in all the ma/or metros.

7"#'$ it have +een very te)(ting /"r the +an! t" %tay "n the e;i%ting +ran$ +y (aying a

higher r"ya'ty given the "%t an$ ti)e inv"'ve$ in thi% e;eri%e@

$n recent years, the %an! has contributed more than their fair share on restoration of the "#$

brand. %ut when it was clear to them that there was no other option, they decided to bite the

bullet. %an! decided to assume their very own identity. #he "#$ identity came to the ban!


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from the undivided "nit #rust of $ndia :"#$;. #he split of "#$ was the starting point for what

was eventually a search for a new identity.

7hen A;i% Ban! '""!% at (rivate %et"r (eer% there are )i%%ing 'in!% %ine )"%t "/ the)have a )#t#a' /#n$ an$ in%#rane +#%ine%%@

'xis %an! has tried to focus on 2ommercial ban!ing since their inception. 's the first step

towards diversion, ban! has set up an '>2 to manage a private equity venture.

#hey would be in a position to launch the first tranche of the fund by end of *eptember ?00@.

#he '>2 will provide equity support for infrastructure pro/ects. #here are not many private

equity funds here, focusing on infrastructure pro/ects.

. Start 7ith the L"9e%t 2anging Fr#itJ #he easiest sales that can be made to current

customers are engagement services that help a customer use an account they already

own. #hese &stic!y services& include a debit card, online ban!ing, direct deposit, bill

pay, automatic savings transfer, personal line of credit and security solutions such as

privacy protection. #hese services help to ensure the customer will use the products

they own more frequently, will significantly improve retention and will help to

improve the overall customer experience.

?. Stay C"nnete$J 'bout a year ago $ was tal!ing to a friend who said, 4$ was very

impressed with how much love my ban! gave me when $ opened some new accounts,

but ama1ed that $ never really heard from them again except to tell me about new

fees4. While some ban!s have very successful onboarding programs to help stay

connected with new customers, a surprising number of ban!s still rely on the customer

to onboard themselves. 'nd unless the customer expands their relationship, their ban!

may never include them in a model-driven cross-sell program.

. C"ntin#a''y Eva'#ate U(%e'' O(("rt#nitie%J ather than using product-driven

programs that are done seasonally, consider funding more customer-focused programs

that evaluate each customer&s propensity to open one or more of the products and

services you offer. With some of my clients, we evaluate each customer&s transactional,

product ownership and even behavioral characteristics to determine what would be the

most li!ely next purchase and whether the propensity to purchase is high enough to

ma!e an offer. $n some of most successful programs, this evaluation of opportunities is

done monthly, with smaller mailing universes, but much higher response rates.


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8. E)("9er 4"#r C#%t")er C"ntat Tea)%J Bor most customer facing employees of

your ban!, their primary responsibility revolves around efficient processing of

transactions andIor customer service. #o leverage the thousands of customerengagements these employees have each year, you need to provide easy ways for them

to extend their conversations to include relationship expansion opportunities. >any

ban!s provide prompts on their employee&s computer screen around recent sales

communications received by the customer, most li!ely products that may interest the

customer and even special offers that can be made as part of their transaction or service

conversation. #he best programs don&t stop there, but include tools for the customer to

ta!e advantage of the offer. #his may be an immediately generated custom printed

sales document, a follow-up email or sales call or a referral form.

5. A%! /"r Re/erra'%J 3ne of the easiest ways to generate new business and increase

loyalty of current retail or business customers is to as! :and possibly incent; for

referrals. $f a customer is happy with the way they are treated at your organi1ation,

they usually want others to !now. #his is especially true with satisfied small

businesses, private ban!ing customers and with retail customers that are part of a ban!-

at-wor! program. 'nd it doesn&t hurt if you provide an incentive to your current

customer. 't a time when new customer acquisition offers often exceed C00 and when

the overall cost of acquisition is more than C?50, offering a &bounty& of C50 would be

less expensive and would most li!ely generate a more loyal customer.

. Leverage A'' Channe'%J

messaging, outbound calling efforts, etc.

=. 3ea%#re an$ Re9ar$ 7hat 4"# 7ant D"neJ %y providing ongoing measurement of

the cross-selling ob/ectives you want to achieve and paying for this achievement of

these ob/ectives, you have a much better chance of reaching your goals. #his

continuous reinforcement of your cross-sell mission allows your team to be focused on


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what&s important. Kou can also turbocharge your results by communicating how you

are assisting in their efforts. rovide 3pportunity eports of the customers where they

may have the greatest opportunity for success. 's part of these reports, it is also helpfulto provide bac!ground as to why the customer is being selected for a specific offer.

Binally, remember that current customers li!e to be rewarded for their loyalty. 3ne of the best

ways to do this is to remember to include an offer with any cross-sell or upsell message.

Without an offer, you may be perceived as simply &pushing product& without leveraging the

relationship value already in place. ' strong offer will not only generate a better response to

your communication, but also remind the customer of the value of doing business with your

organi1ation.

2"9 t" /in$ the h"'y grai' "/ e//etive r"%%&%e''ing an$ #(%e''ing.

Birst, you need to admit or accept that the information silos created by the many

product and service offerings that can exist in a typical ban! are hampering effective

cross-selling and upselling and that this isnDt a $K fix. >ost of these silos, if

connected at all, are point to point connections that limit data sharing. *o, the first

opportunity to discover a potential cross-sell product is lost because youDre not able to

match a customer need to a product or service across the ban! because youDre relying

on a manual process with hard coded rules that are spread out across the silos.

*econd, you need to get some decision management -- in the form of business rule

management -- in order to easily ma!e, test, automate, and ultimately govern those !ey

operational decisions that help line-of-business employees and systems recommend the

best offer :quic!ly and safely;.

Let% 8"") in- 2"9 $ei%i"n a#t")ati"n an %#(("rt e//etive r"%%&%e''ing an$ #(&

%e''ing.3perational decision ma!ing is a multistage process L one that can be completely or partially

automated. $n the case of cross-selling or up-selling in ban!ing it generally wor!s li!e this

:refer to the graphic below;J


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Stag

cross selling and upselling strategies of axis bank .docx

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