7Ps of Marketing Mix of ICICI Bank

 

7Ps of Marketing Mix of ICICI Bank  By:  Yogin Vora on June 16, 2010 By: ICICI Bank is India’s second-largest bank with total assets of Rs. 3,663.74 billion (US$ 76 billion) at September 30, 2009 and profit after tax Rs. 19.18 billion (US$ 398.8 million) for the half year ended September 30, 2009. The Bank has a network of 1,588 branches and about 4,883 ATMs in India and  presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank’s equity shares are listed in India on Bombay Stock Exchange and the National Stock  Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). History:

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI’s shareholding in ICICI Bank was reduced to 46% through a  public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the   NYS NYSE E in fisc fiscal al 20 2000 00,, IC ICIC ICII Bank Bank’s ’s acqu acquis isit itio ionn of Bank Bank of Madu Madura ra Limi Limite tedd in an all-s all-sto tock  ck  amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only  project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank  would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group’s universal banking strategy. The merger would enhance value for  ICICI shareholders through the merged entity’s access to low-cost deposits, greater opportunities for  earni earning ng fee fee-ba -based sed income income and and the abi abilit lityy to partic participa ipate te in the paymen payments ts sys system tem and pro provid videe transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI’s strong corporate relationships  built up over five decades, entry into new business segments, segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger  of ICICI and two of its wholly-owned finance ICICI Services Limited ICICI Capital Services retail Limited, withsubsidiaries, ICICI Bank. ThePersonal merger Financial was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in

 

April 2002. Consequent to the merger, the ICICI group’s financing and banking operations, both wholesale and retail, have been integrated in a single entity. 7Ps 7P s of Mark Ma rket etin ingg of ICIC IC ICII Ban B ankk: PRODUCT MIX: 1. DEPOSITS:

ICICI ICI CI Ban Bankk off offers ers wide wide variet varietyy of Depos Deposit it Pro Produc ducts ts to sui suitt our requir requireme ements nts.. Cou Couple pledd wit withh convenience of networked branches/ over 1800 ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Savings Account:

ICICI Bank offers a power packed Savings Account with a host of convenient features and banking channels to transact through. Senior Citizen Services: The

Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring more convenience and enjoyment in your life. It It’s ’s real really ly im impo porta rtant nt to help help ch chil ildr dren en lear learnn the the valu valuee of finan finance cess an andd mo mone neyy management at an early age. Banking is a serious business, but we make banking a pleasure and at the same time children learn how to manage their personal finances.

Young Youn g Stars: Stars:

Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the Fixed Deposit from ICICI Bank. Fixed Deposits:

Recurring Deposits:

Through ICICI Bank Recurring Deposit you can invest small amounts of  money every month that ends up with a large saving on maturity. So you enjoy twin advantagesaffordability and higher earnings. Only Roaming Current Account from ICICI Bank travels the distance with your business. You can access your accounts at over 500 networked branches across the country. Roaming Current Account:

Thanks to bank@campus, child can now surf the Net and access all the details of  his / her account at the click of a mouse! No need to visit the bank branch at all. Bank @ Campus:

ICICI Bank Salary Account: is a benefit-rich payroll

account for Employers and Employees. As an organization, you can opt for our Salary Accounts to enable easy disbursements of salaries and enjoy numerous other benefits too. 2. INVESTMENTS

Along with Deposit products and Loan offerings, ICICI Bank assists you to manage your finances by  providing various investment options such as: • • • • • •

ICICI Bank Tax Saving Bonds Government of India Bonds Investment in Mutual Funds Initial PublicinOffers Corporate Investment “Pure by Gold” Foreign Exchange Services

 

•

Senior Citizens Savings Scheme, 2004

3. ANYWHERE BANKING

ICICI Bank is the second largest bank in the country. It services a customer base of more than 5 million customer accounts through a multi-channel access network. This includes more than 500  branches and extension counters, over 1800 ATMs, Call Centre and Internet Banking. Thus, one can access the various services ICICI Bank has to offer at anytime, anywhere and from anyplace. 4. LOAN

a)Â Â Home Loans  b)Â Â Personal Loans c)Â Â Car Loans d)Â Â Two Wheeler Wheeler Loans Loans e)Â Â Commercial V Vehicle ehicle L Loans oans f)Â Â Loans against Securities g)Â Â Farm Equipment Equipment Lo Loans ans h)Â Â Construction Equipment L Loans oans i)Â Â Office Eq Equipment uipment Loans Loans  j)Â Â Medical E Equipment quipment Loans 5. CARDS

a)Â Â Credit Card  b)Â Â Debit cum ATM Card c)Â Â Travel Card 6. DEMAT SERVICES

ICICI Bank Demat Services boasts of an ever-growing customer base of over 7 lacs account holders. In their continuous endeavor to offer best of the class services to our customers we offer the following features: • • •

•

Digitally signed transaction statement by e-mail. Corporate benefit tracking. e-Instruction facility –Voice facility to transfer securities 24cost. hours a day, 7 days a week through Internet Interactive Response (IVR) at a lower Dedicated specially trained customer care executives at their call centre, to handle all queries.

 

7. MOBILE BANKING

With ICICI Bank, banking is no longer what it used to be. ICICI Bank offers Mobile Banking facility to all its Bank, Credit Card and Demat customers. ICICI Bank Mobile Banking enables you to bank  while being on the move. 8. NRI SERVICES

fa faccility ity www.money2India.com www.money2Ind ia.com at the click of a button!

ONLI NLINE

MONEY NEY

TRAN RANSFER  SFER 

available

to

NRIs

worldwide

through

Benefits: • • • • • •

FREE Money transfers into accounts with over 30 banks in India Demand Drafts issued and payable at over 1250 locations in India ONLINE Tracking of the status of your funds SUPERIOR Exchange rates OFFLINE MONEY TRANSFER facility is also available across geographies through Local branches and in association with partner banks/ exchange houses.

PRICING MIX:

The decisions or the decisions related to the interest fee or commission charged by banks are foundpricing instrumental in motivating or influencing targetand market. The RBI and the IBA are concerned with regulations. The rate of interest is regulated by the RBI and other charges are controlled by IBA. The pricing policy of a bank is considered important for raising the number of customers’ vis-à vis the accretion of deposits. Also the quality of service provided has direct relationship with the fees charged. Thus while deciding the price mix customer services rank the top position. The banking organizations are required to frame two- fold strategies. First, the strategy is concerned with interest and fee charged and the second strategy is related to the interest paid. Since both the strategies throw a vice- versa impact, it is important that banks attempt to establish a correlation  between two. It is essential that both the buyers as well as the sellers have feeling of winning. Pricing Bank Products Starts With Three Basic Questions. 1. What rate does the bank need to meet its financial objectives?

The answer is, “it depends.” Some considerations for loan and deposit pricing are: • • • • •

Related income taxes Earning assets to total assets Equity-to-asset ratio Pricing for the activities and risks associated with the product Asset and liability mix

 

Another element to consider in the pricing of earning assets is the risk of loss. Most notably, this is relevant in loan pricing. Many banks assign assign a risk weighting to individu individual al loans over a certain size or based on loan type and assign a credit risk charge based on those ratings. Customer relatio Customer relationship nshipss are difficul difficultt to assign a valu valuee to in the prici pricing ng process process. . Customers Customers will generally press for some price concessions in consideration of other relationships they have with the  bank. Asset and liability mix also impacts pricing results. Generally speaking, banks operating with higher  loan-to-asset ratios are able to afford to pay more for deposits. deposits. Likewise, banks can aafford fford to be more competitive on certain deposit products if they have fewer maturities in a particular timeframe or less total outstanding balances in a product line. 2. What is the market rate for the core product?

Customers have more distribution channels available to them today than at any other point in history. In the past 10 years, the number of bank locations has increased increased 20%. Of course, there are the mortgage bankers, the Internet, and a host of other financial service providers competing for your  customer’ss loan and deposit business.  customer’ The point is, the competitive marketplace always ensures that if a financial institution is charging too much for loans or paying too little for deposits, its share of the market will likely dwindle as existing and and pro prospe specti ctive ve cus custom tomers erspoints, find alt altern ve pricing pro provid viders ers. You You can do allmarket the mat math h you to determine required pricing buternati ifative your is . uncompetitive, your share willwant shrink. 3. What would the bank have to do to sales and operations to make its rates the most competitive in its market?

Pricing is a key issue for the associa Pricing associates tes who sell bank products products to your cust customers omers. . The fact is, lenders want the lowest rates, and people dealing with depositors want to pay the highest rates. You need the right balance of fee income, strategies to reduce operating costs, and a healthy asset and liability mix to change your required pricing.  PLACE

This component of marketing mix is related to the offering off ering of services. The services are sold through the branches. The 2 important decision making areas are: making available the promised services to the ultimate users and selecting a suitable place for bank branches. The number of branches OF ICICI: 1900 in India and 33 in Mumbai. LOCATION OF BRANCH:

Shivam Shopping Centre, S.V.Road, Opp. New Era Cinema, Malad (W), Mumbai. MUMBAI , 400064. LOCATION OF ATMS:

 

• • • • •

Malad subway With branch Mindspace Orlem Raheja township

Why they select this place as branch? •

• • • • •

The selection of a suitable place for the establishment of a branch is significant with the view  point of making place accessible. The safety and security provisions Convenient to both the parties, such as the users and the bankers Infrastructure facility  Near to station and located on s. v. road well crowded area. Market coverage

PROMOTION MIX • • • •

Advertising: Television, radio, movies, theatres Print media: hoardings, newspaper, magazines Publicity: road shows, campus visits, sandwich man, Sponsorship Sales promotion: gifts, discount and commission, incentives,etc.

• •

Personal selling:ICICI Cross-sale (selling at center competitors service. Telemarketing: one source Call (mindplace),personalized space)

PEOPLE:

All people directly or indirectly involved in the consumption of banking services are an important   part of the extende extendedd marketing marketing mix. Knowledge Knowledge Workers Workers,, Empl Employee oyees, s, Mana Manageme gement nt and other  Consumers often add significant value to the total product or service offering. It is the employees of  a bank which represent the organisation to its customers. In a bank organization, employees are essentially the contact personnel with customer. Therefore, an employee plays an important role in the marketing operations of a service organisation. To realize its potential in bank marketing, ICICI become conscious in its potential in internal marketing – the attraction, development, motivation and retention of qualified employee-customers through need meeting job-products. Internal marketing paves way for external marketing of services. In internal marketing a variety of activities are used internally in an active, marketing like manner  and in a coordinated way. The starting point in internal marketing is that the employees are the first internal market for the organization. The ba The basi sicc ob obje ject ctiv ivee of inte intern rnal al ma mark rket etin ingg is to deve develo lopp mo moti tiva vate tedd an andd cu cust stom omer er co cons nsci ciou ouss employees. A service company can be only as good as its people. A service is a performance and it is usually difficult to separate the performance from the people. If the people don’t meet customers’ expectations, then neither does the service. Therefore, investing in people quality in service business means investing in product quality.

 

PROCESS:

Flow of activities: activities: All the major major activities of ICICI banks follow RBI guid guidelines. elines. There has to   be adherence to certain certain rules and principles in the banking operations. operations. The activities have bee beenn segregated into various departments accordingly. ICICI bank has got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is  because  bec ause of the rules they are subject to. Besid Besides es this, each of the banks has its standard standard forms, documentationss etc. Standardizatio documentation Standardizationn saves a lot of time behind individual transaction. Standardization:

There are specia There specialty lty counters counters at each branch to deal with cust customers omers of a parti particula cular  r  schem sc heme. e. Be Besid sides es this this the cus custom tomers ers can se selec lectt the their ir depos deposit it per period iod am among ong the ava availa ilable ble alternatives.

Customization:

Numbers of steps are usually specified and a specific pattern is followed to minimize time taken.

Number of steps:

In ICICI bank bankss vario various us functions functions are segregated segregated. . Separate Separate counte counters rs exis existt with clear  indication. Thus a customer wanting to deposit money money goes to ‘deposits’ counter counter and does not mingle elsewhere. elsewhere. This makes procedures procedures not only simp simple le but cons consume ume less time. Besi Besides des instruction boards in national boards in national and regional language help the customers further. Simplicity:

ATM does not involve any bank employees. Besides, during usual bank  transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires. Customer involvement: involvement:

PHYSICAL EVIDENCE:

Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following: • • • • • •

Internet/web pages Paperwork  Brochures Furnishings Business cards The building itself (such as prestigious offices or scenic headquarters) headquarters)

The physical evidences also include signage, reports, punch lines, other tangibles, employee’s dress code etc. Each and every bank has has its logo by which a person can identify the co company. mpany. Thus such signages are significant for creating visualization and corporate identity. Signage:

Financial reports:

The Company’s financial reports are issued to the customers to emphasis or 

credibility. Tangibles:ks,Ba Bank nkreduce gi give vessthepens peinherent ns,, wr writ itin ingg pads pads toofthe th e inte intern rnal al cu cust stom omer ers. s. Ev Even en the the pass passbo book oks, s, chequeboo chequebooks, etc intangibility services.

 

Punch lines: Punch lines or the corporate statement depict the

philosophy and attitude of the bank.Â

Banks have influential punch lines to attract the customers. ICICI bank follows follows a dress code code for their internal cust customers omers. . This helps the customers to feel the ease and comfort.

Employee’s dress code: