Marketing Strategy - Axis Bank

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

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Marketing trends in banking sector

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Traditional Banking Period up to 1969

Development Banking period 1969 to mid 1980s

Bank Marketing period After mind 1980s

Accounting Orientation

Selling Orientation

Towards Marketing Orientation

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Period Bankers Major Orientation

Banks approaches towards customers and market underwent changes and focus was gradually shifted to marketing their products.

Marketing trends in banking sector .contd.

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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.

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.

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Growth

Third largest Private Sector Bank in India 1947 Branches and 11,245 ATMs 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

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Annual Results - 2013

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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

Performance Overview

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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%.

Business Overview

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Multiple channels drive business growth

Extensive use of technology to provide services

Expanding footprint across centres

Largest ATM network in the private sector

SWOT analysis

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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

Marketing strategies: 7Ps analysis Product

Accounts: Easy Access Accounts, Prime Savings Account, Salary Account, Womens 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.

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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

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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

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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 Airtels 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

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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

Thanks

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References http://www.axisbank.com http://www.rbi.org.in http://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdf http://www.jmijitm.com/papers/130082034035_42.pdf

http://www.axisbank.com/http://www.rbi.org.in/http://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://business5.net/m/marketing-approach-to-promoting-banking-services-w321.pdfhttp://www.jmijitm.com/papers/130082034035_42.pdf