Description
SERVICE MARKETING ANALYSIS OF SBI BANK
SERVICES MARKETING ANALYSIS OF
STATE BANK OF INDIA
STATE BANK OF INDIA- AN INTRODUCTION
State Bank of India (SBI) is a multinational banking and financial services company
based in India. • It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2012, - It has 15,003 branches across India, - and including 157 foreign offices. • It the largest banking and financial services company in India by assets. SBI has about 25,000 ATMs, SBI has 21,500 branches, including branches that belong to its associate banks. SBI includes 99,345 offices in India. SBI General's current geographical coverage extends to 38 cities pan India and plans are on to extend this reach to another 20-25 cities before the end of the current financial year.
7 Ps of Services Marketing Mix
i.
ii. iii. iv. v. vi. vii.
Product Price Place Promotion Physical Evidence Process People
PRODUCT
i.
Future Product – Contest Winners, Free Deposits, Offers for Discounts
ii. Augmented Product – Portfolio Management, Mutual Fund, Insurance iii. Formal Product – Safety Lockers, D.D iv. Core Product – Loans, Deposits
PRODUCT
• Core product: The basic services in banking form a basic product Eg: Accepting deposits, granting loans • Formal product: It is the set of attributes and conditions expected by the customers when they purchase the product Eg: Insurance facilities, locker facilities, ATM?s • Augmented product: It is the additional feature that banks provide which exceeds the customer?s expectations. Eg: Discounts, Good waiting rooms • Potential product: It includes Innovations and product differentiation. Banks alters its services according to the requirement of the individual customers Eg: Mobile and internet banking, new schemes tailored for specific customers Product at SBI
PRODUCTS OFFERED BY SBI
• Personal Banking NRI Banking • Current Accounts Corporate Banking • Term Deposits Small Scale • Industries • Reinvestment Plan Small Business Finance • Public Provident Fund Agriculture Finance • Scheme Housing Government Business • Loans Car Loans • Education Loans • Consumer Durables Loans • Personal Loans • Loans against Shares & Debentures • Gold Loans
PRICE AT SBI
• Interest rates charged
• Transaction charged • Value pricing • Going rate pricing • Mark up pricing • Charges for cheque books • Commission charges
PLACE AT SBI
Important factors affecting the determination of the location of bank are: • The trade area
• Population characteristics • Commercial structure • Industrial structure • Visibility • Access
PROMOTION AT SBI
• Public relations
• Personal selling • Word of mouth promotion • Internet • Tele marketing
PHYSICAL EVIDENCE AT SBI
Physical evidence refers to the overall layout of the place i.e. how the entire bank is designed. Physical evidence refers to all those factors that makes process much easier and smoother. Eg: In SBI the physical evidence would be the placement of customer service executive?s desk or the location of the place for deposting cheques. Also, the white and blue color scheme, plantation within the office premises, presence of adequate seats in the waiting area are indicators of physical evidence.
PROCESS AT SBI
• Process constitutes the overall procedure involved in using the services offered by the bank. • The process should be customer friendly and there should be a designated process flow for each activity to avoid any confusion as to which counter the customer needs to visit for a job that requires guidance from multiple executives. • If the overall process is too complicated than the customer may not be inclined to use such services
PEOPLE AT SBI
• SBI has provided employment to 222,933 people all over the world. SBI has recruited thousands of young graduates and post graduates and is yet to recruit many more. Thus, SBI has a proportionate blend of both the old and the new schools of thought. SBI provides its employees with training facilities as and when required in order to keep them abreast with the new technologies and products that get introduced in the banking sector. • SBI has turned into the third-largest employer in India among listed companies after Coal India Limited(383,347) and Tata Consultancy Services(226,751).
SERVICE PROCESS BLUEPRINT
What is a “ Service Process Blueprint ” ? It defines the architecture of services describing the method and sequence of how service operation system work and how they link together to create a good service experience among customers.
? Badly designed process often leads to poor quality, slow and
frustrating service delivery and annoys the customers. Thus, badly designed process can ultimately lead to service failure.
Customers
Line of Interaction
Front Line Employees
Line of Visibility Line of Internal Interaction
Support Staff
Line of Implementation
Management
Customer’s Path
SERVICE PROCESS BLUEPRINT
The service blueprint includes:
• Customer Actions: The steps that customers take as part of the service delivery process. • Front stage (Visible Contact Employee) Actions: This element is separated from the customer actions by a „line of interaction?. These actions are face-to-face actions between employees and customers. • Backstage (Invisible Contact Employee) Actions: The „line of visibility? separates the onstage from the Backstage actions. Everything that appears above the line of visibility can be seen by the customers, while everything under the line of visibility is invisible for the customers. A very good example of an action in this element, is a telephone call; this is an action between an employee and a customer, but they don?t see each other.
Physical Evidence
Brochure
Website, phone calls, e-mails APPLY FOR LOAN
Customer Actions
Line of Interaction Onstage Contact Employee Actions Line of Visibility Backstage Contact Employee Actions
OPEN A NEW ACCOUN T
DEPOSIT / WITHDRAW MONEY
RECEPTIONISTS
EMPLOYEES , MANAGERS CARRYING OUT TRANSACTIONS
Line of Internal Interaction
Support Processes
CUSTOMER RECORDS
BILLING SYSTEM
MAINTAINING SECURITY SYSTEM
SERVICE PROCESS CLASSIFICATION
• Though services typically do not involve transfer of ownership, major differences still exist among services depending on what is being processed. In services, people, physical objects and data can be processed and the nature of processing can be tangible or intangible. This gives rise to the classification of services into four broad categories :
? People
Processing ?Possession Processing ?Mental Stimulus ?Information Processing
SERVICE PROCESS CLASSIFICATION
INFORMATION PROCESSING
• SBI like most other banks and financial institutions is highly dependent on the effective
collection and processing of information. The various financial and non financial services offered by SBI like fund transfers, bill payments, third party payments, opening bank accounts, closure of accounts, loan part payment, issue of demand draft, ATM services, mobile services, viewing account information, request for cheque book, creating standing instructions involve a considerable amount of information processing tasks.
• Information processing and packaging is effectively practiced by machines as well as by
professionals.
• Though information is the most intangible form of service output, but it may be
transformed into more enduring, tangible forms as letters, reports, plans, CD-ROMS or DVDs for convenience.
UNIQUE SERVICE CHARACTERISTICS
The services have unique characteristics which make them different from that of goods. The most common characteristics of services are:
? Intangibility
?
Intangible elements usually dominate value creation. Since, services are not tangibles, they do not have features that appeal to the customer’s senses, their evaluation, unlike goods, is not possible before actual purchase and consumption. The marketer of service cannot rely on product-based clues that the buyer generally employs in alternative evaluation prior to purchase, making it harder to evaluate service and distinguish it from competition. So, as a result of this, the services are not known to the customer before they take them. The service provider has to follow certain things to improve the confidence of the client: The provider can try to increase the tangibility of services through emphasis on physical clues as well by employing concrete mataphors and vivid images in advertising, branding etc. Also, the provider can emphasize on the benefits of the service rather than just describing the features. Eg SBI promotes the sale of credit cards by visualizing the convenience and comforts to the holder of the credit cards.
?
?
UNIQUE SERVICE CHARACTERISTICS
?
?
Inseparatibility
Services are typically produced and consumed simultaneously. In case of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later. But, in case of services, it cannot be separated from the service provider. Thus, the service provider would become a part of a service. The services cannot be produced for consumption at a later stage / time. This produces a new dimension to service marketing. The physical presence of customer is essential in services. For example: to use the financial and non financial services offered by SBI, a customer must be physically present at the counter and the employee must also be present at his desk to assist the customer with his queries. Inseparability of production and consumption increases the importance of the quality in services. Therefore, service marketers at SBI not only need to develop task-related, technical competence of service personnel , but also , require a great input of skilled personnel to improve their marketing and inter personal skills.
?
?
UNIQUE SERVICE CHARACTERISTICS
? Perishability
? Services are deeds, performance or act whose consumption take place simultaneously;
they tend to perish with the absence of consumption. Hence, services cannot be stored. The services go waste if they are not consumed simultaneously i.e. value of service exists at the point when it is required.
? The perishable character of services adds to the service marketer’s problems. The
inability of service sector to regulate supply with the changes in demand; poses many quality management problems. Hence, service quality level deteriorates during peak hours in restaurants, banks, transportation etc. This is a challenge for a service marketer. Therefore, a marketer should effectively utilize the capacity without deteriorating the quality to meet the demand.
? SBI has ensured smooth demand through promotions, dynamic pricing of its services,
and reservations by working with operations to adjust capacity. Thus, SBI has ensured that its customers are neither turned away nor they have to wait.
UNIQUE SERVICE CHARACTERISTICS
? Heterogeneity
? Services are highly variable, as they depend on the service provider, and where and
when they are provided. Service marketers face a problem in standardizing their service, as it varies with experienced hand, customer, time and firm. Service buyers are aware of this variability. So, the service firm has made an effort to deliver high and consistent quality in their service; and this is attained by selecting good and qualified personnel for rendering the service.
? Since operational inputs and outputs tend to vary more widely, it is harder for SBI to
maintain consistency, reliability, and service quality or to lower costs through higher productivity making it difficult to shield customers from results of service failures.
? SBI has set quality standards based on extensive research on customer expectations;
redesigned product elements for simplicity and failure-proofing, instituted good service recovery procedures with the help a expert technical team and automated customerprovider interactions.
UNIQUE SERVICE CHARACTERISTICS
? Time Factor
? The time factor often assumes great importance in services as customers see time as a
scarce resource to be spent wisely; dislike wasting time waiting, and want service at the times that are convenient to them.
? SBI has found ways to compete with other banks through faster delivery of services,
minimized burden of waiting by offering extended service hours and hiring more number of service personnel to ensure smooth delivery of service even at peak hours and during festive season when employees tend to take leaves in huge number.
? SBI has also started off a training program with its long term customers as poor task
execution by customers may hurt productivity, spoil service experience. SBI has initiated customer interaction with its facilities and systems to develop utilities in tandem with customer preference.
POSITIONING STRATEGY OF SBI
Market segmentation forms the basis for focused strategies.
MARKET SEGMENTATION 1. Identification of customers’ needs and market segments. 2. Develop profiles of resulting market segments.
IDENTIFICATION OF TARGET MARKETS 3. Evaluation of attractiveness of each segment. 4. Selection of target segments.
POSITIONING 5. Identification of differential advantages in each segment. 6. Development and selection of positioning concepts.
SEGMENTATION AT SBI
• Geographic:
Rural, Urban, Metropolitan.
• Demographic: Occupation: Salaried, Self- employed, Students, Corporate, Government. • Behavioural: Usage: Frequency, Value added services, allied services. Psychographic: Trusted bank image, new generation banking.
TARGETING AT SBI
• “A target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its goods towards.” • The companies while selecting segments for their services they select it on the basis of target customers.
POSITIONING AT SBI
• It is the peoples most trusted bank. • High accessibility with 10,000 branches and extension of hours of work. • Relevance to young customers with value added services like Net Banking, Telebanking etc. • SBI comes among top 50 banks in the world. • It is the most trusted Bank amongst the people.
• State Bank of India (SBI) is the largest nationalized commercial bank in India in terms of assets, number of branches, deposits, profits and workforce.
STRATEGY ADOPTED BY SBI
?
Strategic planning is a process which needs more resources including human efforts, and necessary changes in the organisation. The strategist has to scan the organisation’s environment before selecting a strategy. The strategic planning has mainly four steps : (i) Environmental Analysis (ii) Development of Vision and Mission Statement (iii) Setting up of goals and objectives (iv) Identifying strategy and tactics.
?
State Bank of India has to frame a strategy which will focus on customer service quality, maintaining profitability, using system technologies, credit portfolio management and productivity improvements. When the bank provides a high quality customer service, it gives a competitive advantage over other banks and it will help to attract the existing and new customers.
STRATEGY ADOPTED BY SBI
Environmental Analysis:
The first step of strategic planning is Environmental analysis. While identifying the external environment of State Bank of India, we have to consider five forces such as: (i)The threat of new competitor’s entry (II)The intensity of competitive rivalry (III)The bargaining power of customers
(IV)The bargaining power of suppliers (V)The threat of substitute products
The threat of entry of new competitors:
Global economy and financial situations are under crisis but the banking industry is booming. This situation attracted many multinational companies in to Indian banking industry. Even many domestic non banking financial companies (NBFC) are also eagerly waiting to receive banking license from RBI. This situation is critical for existing banks including SBI and the competition will become high. SBI’s 200 plus years experience in the industry and reputation will help the bank to overcome these threats of new entrants.
STRATEGY ADOPTED BY SBI
? The intensity of competitive rivalry:
The main competitors of State Bank of India in India are ICICI Bank, HDFC Bank, Axis Bank, Bank of India and Union Bank of India. ICICI bank is the second largest private sector bank in India and has well reputation over the industry. Increase in the number of banks will increase the rivalry since all these banks compete for the same customers and resources. State Bank of India has to face a competitive rivalry from all these banks and thus to plan its activities accordingly.
?
The bargaining power of customers: Customers are very much attracted by the bank and the bank’s core value is customer services and their satisfaction. But the same customer will come with arguments and comparison of other banks’ financial products in order to bargain. The bank has to satisfy such customers with its financial products and services since they are able to get same services from the competitors and switching costs from one bank to another is very low.
STRATEGY ADOPTED BY SBI
? The bargaining power of suppliers:
State Bank of India has suppliers who supply stationeries, computers and peripherals to the bank. The switching cost of one supplier to another is time consuming and costly process. The bank has to get support from cash filling agencies to fill its ATMs through out the country. Since these things are very important to the bank, suppliers are getting a bargaining power.
? The threat of substitute products:
Indian banking industry is in high growth and profitable position and thus many foreign banks entered into the market. All of these banks have similar financial products and services and this will lead to get a choice to the customers. Whenever a customer feels that the service offered by SBI is not satisfying their needs, they can easily go for substitute with a low switching cost.
STRATEGY ADOPTED BY SBI
? The bargaining power of suppliers:
State Bank of India has suppliers who supply stationeries, computers and peripherals to the bank. The switching cost of one supplier to another is time consuming and costly process. The bank has to get support from cash filling agencies to fill its ATMs through out the country. Since these things are very important to the bank, suppliers are getting a bargaining power.
? The threat of substitute products:
Indian banking industry is in high growth and profitable position and thus many foreign banks entered into the market. All of these banks have similar financial products and services and this will lead to get a choice to the customers. Whenever a customer feels that the service offered by SBI is not satisfying their needs, they can easily go for substitute with a low switching cost.
STRATEGY ADOPTED BY SBI
STRATEGY ADOPTED BY SBI
? Internal environment of State Bank of India can be identified by SWOT analysis. It is the
powerful tool used to analyse strength, weaknesses, opportunities, and threats of the bank.
Strengths:
? Brand Name:
SBI has a powerful brand name over the country and overseas. SBI became the synonymous for banking in the rural areas.SBI is a public sector bank and government of India has 61.58% of share. This is a competitive advantage over other banks in India.
? Market share:
SBI is the market leader in Indian banking industry.
? Product Mix:
SBI has a portfolio of products and services. It succeeded in the cross selling of its products and services. All the branches of SBI has core banking and it enables the customer to bank anywhere same as local bank.
STRATEGY ADOPTED BY SBI
? Weaknesses:
80% of SBI’s employees are above 40 years of age. SBI is fully computerised, but the lack of computer efficiency made the banking very slow. Non performing assets in credit cards are high. Resistance from employees and trade unions against merger of associate banks is visible.
? Opportunities:
Merger of associate banks with SBI will increase the size of SBI and its market share. Scope of investments in the emerging countries and in Europe can also be explored.
STRATEGY ADOPTED BY SBI
? Threats:
Increase in non performing assets and bad debts. Cyber security and customer data protection. New entrance of emerging private sector banks.
STRATEGY ADOPTED BY SBI
STRATEGY ADOPTED BY SBI
? Institution for advanced learning :
To provide state of the art training in financial products to middle level and senior level executives.
? Internal consultant/change agent :
To act as catalyst for change in attitudes and orientation of banking staff and to provide expertise and consultative support.
? Feedback supplier :
To capture and structure feedback from trainees and from the market.
? Think Tank :
To provide expert and informed suggestions, model business strategies, analysis of market developments from a banker perspective.
STRATEGY ADOPTED BY SBI
? Research and development role :
To carry out research on contemporary subjects which are relevant to the banks short term and medium term and operational needs and policy formulation.
? Overlapping staff training centers :
To liaise, validate and closely monitor the staff training centers in seven circles attached to the academy
STRATEGY ADOPTED BY SBI
MARKETING STRATEGIES
SBI took several initiatives to capture the market pie in 2008. SBI has adopted various marketing strategies for
educating customers about its products and services, particularly the asset products. The various marketing
strategies of SBI are discussed below:
?
Participation in various consumer exhibition and meetings
SBI multi?product sales team regularly participates in the exhibitions / melas organized by various sponsors (e.g., SSI?Small Scale Industries). SBI finances loans to the entrepreneurs through this channel. SBI also sets us booking counters are various trade?fairs and industrial fairs where it offers loans at concessional rates to borrowers for booking at those counters. Apart from financing loans to the borrowers, SBI uses these meets as an opportunity to educate people about its various personal segment (p?segment) products and services.
STRATEGY ADOPTED BY SBI
? Tie?ups with builders / car and other vehicle dealer
SBI has entered into financing agreement with various builders, cars and other vehicle dealers to finance the customers at the existing market rates. Usually, we find dealer advertising purchase of their vehicles at cheap rates. This is possible through a loan agreement with the banks.
? Festive loan products
SBI takes advantage of festive seasons, such as Holi, Diwali, Christmas, New?Year for propagating their loan products. During these periods it ties up with various dealers to organize finance for customers who wish to
purchase cars or other vehicles during the festive period. During festive periods it offers XPress credit and
festival loan also to the customers.
STRATEGY ADOPTED BY SBI
? Advertising in TV and Newspapers
In late 2008, SBI launched its hugely successful ‘Banker to Every Indian’ campaign. The idea was simple but extremely forceful. In print advertisements, it depicted a series of situations where people crossed economic barriers to come together—a customer buying fish from a fisherwoman, a trekker asking a local villager for directions, a postman delivering letters to a well-off home.
A small label adjacent to both individuals would say: ‘An SBI customer’. The message seemed to solve SBI’s complex positioning problem. It was now a bank that served both clienteles, without seeking to mix them in one melting pot. SBI understood the needs of both and served them equally well—a strong message of inclusion without sacrificing identity.
STRATEGY ADOPTED BY SBI
? Rural Marketing
?
C AMPAIGN OBJECTIVE: To position SBI as a one stop solution for all financial needs of the rural consumers. To change the user perception that SBI is selective in giving loans and their process and systems are cumbersome. COMMUNICATION BARRIERS: SBI is a popular brand in small towns but common man’s perception is that SBI is selective in giving loans and their process and systems are cumbersome. Direct communication with farmers, small business men and other small town population. SOLUTION: Creating awareness about the bank and its services and having a consistent connect with the audience to change the myth attached with SBI. This could be effectively done only by communicating with the audience in their language on a convenient medium: Audio Advertising through the MSRTC Public Address System, Audio- visual displays at highway Food Malls. With the initial campaign done for 20 days, SBI received enquiries worth 500 crores, successful positioning as a one stop solution for all financial requirements when it comes to small town people. Also it helped in connecting with the NPA’s (Non Performing Assets) to communicate various schemes available for farmers.
?
?
? EVALUATION OF COMPETITION
? By virtue of its extensive coverage spanning more than 15,000 branches
across India and 157 foreign offices, SBI has penetrated areas still out of reach for most other banks.
? SBI has automated its branches with the help of Tata Consultancy Services
as its technology partner and ensured the role reversal from a traditional to a modern technologically advanced bank in the minds of today?s jetsetters.
? The rural marketing strategies, mobile banking facilities etc offered by SBI
has been hugely accepted in the market resulting in keeping its flag flying high despite cut throat competition.
? EVALUATION OF COMPETITION
?
The keyhole insignia of SBI is the most known brand logo amongst Indians. The following data sheet will act as factual reference to the stated points:
THANK YOU
doc_979846254.ppt
SERVICE MARKETING ANALYSIS OF SBI BANK
SERVICES MARKETING ANALYSIS OF
STATE BANK OF INDIA
STATE BANK OF INDIA- AN INTRODUCTION
State Bank of India (SBI) is a multinational banking and financial services company
based in India. • It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2012, - It has 15,003 branches across India, - and including 157 foreign offices. • It the largest banking and financial services company in India by assets. SBI has about 25,000 ATMs, SBI has 21,500 branches, including branches that belong to its associate banks. SBI includes 99,345 offices in India. SBI General's current geographical coverage extends to 38 cities pan India and plans are on to extend this reach to another 20-25 cities before the end of the current financial year.
7 Ps of Services Marketing Mix
i.
ii. iii. iv. v. vi. vii.
Product Price Place Promotion Physical Evidence Process People
PRODUCT
i.
Future Product – Contest Winners, Free Deposits, Offers for Discounts
ii. Augmented Product – Portfolio Management, Mutual Fund, Insurance iii. Formal Product – Safety Lockers, D.D iv. Core Product – Loans, Deposits
PRODUCT
• Core product: The basic services in banking form a basic product Eg: Accepting deposits, granting loans • Formal product: It is the set of attributes and conditions expected by the customers when they purchase the product Eg: Insurance facilities, locker facilities, ATM?s • Augmented product: It is the additional feature that banks provide which exceeds the customer?s expectations. Eg: Discounts, Good waiting rooms • Potential product: It includes Innovations and product differentiation. Banks alters its services according to the requirement of the individual customers Eg: Mobile and internet banking, new schemes tailored for specific customers Product at SBI
PRODUCTS OFFERED BY SBI
• Personal Banking NRI Banking • Current Accounts Corporate Banking • Term Deposits Small Scale • Industries • Reinvestment Plan Small Business Finance • Public Provident Fund Agriculture Finance • Scheme Housing Government Business • Loans Car Loans • Education Loans • Consumer Durables Loans • Personal Loans • Loans against Shares & Debentures • Gold Loans
PRICE AT SBI
• Interest rates charged
• Transaction charged • Value pricing • Going rate pricing • Mark up pricing • Charges for cheque books • Commission charges
PLACE AT SBI
Important factors affecting the determination of the location of bank are: • The trade area
• Population characteristics • Commercial structure • Industrial structure • Visibility • Access
PROMOTION AT SBI
• Public relations
• Personal selling • Word of mouth promotion • Internet • Tele marketing
PHYSICAL EVIDENCE AT SBI
Physical evidence refers to the overall layout of the place i.e. how the entire bank is designed. Physical evidence refers to all those factors that makes process much easier and smoother. Eg: In SBI the physical evidence would be the placement of customer service executive?s desk or the location of the place for deposting cheques. Also, the white and blue color scheme, plantation within the office premises, presence of adequate seats in the waiting area are indicators of physical evidence.
PROCESS AT SBI
• Process constitutes the overall procedure involved in using the services offered by the bank. • The process should be customer friendly and there should be a designated process flow for each activity to avoid any confusion as to which counter the customer needs to visit for a job that requires guidance from multiple executives. • If the overall process is too complicated than the customer may not be inclined to use such services
PEOPLE AT SBI
• SBI has provided employment to 222,933 people all over the world. SBI has recruited thousands of young graduates and post graduates and is yet to recruit many more. Thus, SBI has a proportionate blend of both the old and the new schools of thought. SBI provides its employees with training facilities as and when required in order to keep them abreast with the new technologies and products that get introduced in the banking sector. • SBI has turned into the third-largest employer in India among listed companies after Coal India Limited(383,347) and Tata Consultancy Services(226,751).
SERVICE PROCESS BLUEPRINT
What is a “ Service Process Blueprint ” ? It defines the architecture of services describing the method and sequence of how service operation system work and how they link together to create a good service experience among customers.
? Badly designed process often leads to poor quality, slow and
frustrating service delivery and annoys the customers. Thus, badly designed process can ultimately lead to service failure.
Customers
Line of Interaction
Front Line Employees
Line of Visibility Line of Internal Interaction
Support Staff
Line of Implementation
Management
Customer’s Path
SERVICE PROCESS BLUEPRINT
The service blueprint includes:
• Customer Actions: The steps that customers take as part of the service delivery process. • Front stage (Visible Contact Employee) Actions: This element is separated from the customer actions by a „line of interaction?. These actions are face-to-face actions between employees and customers. • Backstage (Invisible Contact Employee) Actions: The „line of visibility? separates the onstage from the Backstage actions. Everything that appears above the line of visibility can be seen by the customers, while everything under the line of visibility is invisible for the customers. A very good example of an action in this element, is a telephone call; this is an action between an employee and a customer, but they don?t see each other.
Physical Evidence
Brochure
Website, phone calls, e-mails APPLY FOR LOAN
Customer Actions
Line of Interaction Onstage Contact Employee Actions Line of Visibility Backstage Contact Employee Actions
OPEN A NEW ACCOUN T
DEPOSIT / WITHDRAW MONEY
RECEPTIONISTS
EMPLOYEES , MANAGERS CARRYING OUT TRANSACTIONS
Line of Internal Interaction
Support Processes
CUSTOMER RECORDS
BILLING SYSTEM
MAINTAINING SECURITY SYSTEM
SERVICE PROCESS CLASSIFICATION
• Though services typically do not involve transfer of ownership, major differences still exist among services depending on what is being processed. In services, people, physical objects and data can be processed and the nature of processing can be tangible or intangible. This gives rise to the classification of services into four broad categories :
? People
Processing ?Possession Processing ?Mental Stimulus ?Information Processing
SERVICE PROCESS CLASSIFICATION
INFORMATION PROCESSING
• SBI like most other banks and financial institutions is highly dependent on the effective
collection and processing of information. The various financial and non financial services offered by SBI like fund transfers, bill payments, third party payments, opening bank accounts, closure of accounts, loan part payment, issue of demand draft, ATM services, mobile services, viewing account information, request for cheque book, creating standing instructions involve a considerable amount of information processing tasks.
• Information processing and packaging is effectively practiced by machines as well as by
professionals.
• Though information is the most intangible form of service output, but it may be
transformed into more enduring, tangible forms as letters, reports, plans, CD-ROMS or DVDs for convenience.
UNIQUE SERVICE CHARACTERISTICS
The services have unique characteristics which make them different from that of goods. The most common characteristics of services are:
? Intangibility
?
Intangible elements usually dominate value creation. Since, services are not tangibles, they do not have features that appeal to the customer’s senses, their evaluation, unlike goods, is not possible before actual purchase and consumption. The marketer of service cannot rely on product-based clues that the buyer generally employs in alternative evaluation prior to purchase, making it harder to evaluate service and distinguish it from competition. So, as a result of this, the services are not known to the customer before they take them. The service provider has to follow certain things to improve the confidence of the client: The provider can try to increase the tangibility of services through emphasis on physical clues as well by employing concrete mataphors and vivid images in advertising, branding etc. Also, the provider can emphasize on the benefits of the service rather than just describing the features. Eg SBI promotes the sale of credit cards by visualizing the convenience and comforts to the holder of the credit cards.
?
?
UNIQUE SERVICE CHARACTERISTICS
?
?
Inseparatibility
Services are typically produced and consumed simultaneously. In case of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later. But, in case of services, it cannot be separated from the service provider. Thus, the service provider would become a part of a service. The services cannot be produced for consumption at a later stage / time. This produces a new dimension to service marketing. The physical presence of customer is essential in services. For example: to use the financial and non financial services offered by SBI, a customer must be physically present at the counter and the employee must also be present at his desk to assist the customer with his queries. Inseparability of production and consumption increases the importance of the quality in services. Therefore, service marketers at SBI not only need to develop task-related, technical competence of service personnel , but also , require a great input of skilled personnel to improve their marketing and inter personal skills.
?
?
UNIQUE SERVICE CHARACTERISTICS
? Perishability
? Services are deeds, performance or act whose consumption take place simultaneously;
they tend to perish with the absence of consumption. Hence, services cannot be stored. The services go waste if they are not consumed simultaneously i.e. value of service exists at the point when it is required.
? The perishable character of services adds to the service marketer’s problems. The
inability of service sector to regulate supply with the changes in demand; poses many quality management problems. Hence, service quality level deteriorates during peak hours in restaurants, banks, transportation etc. This is a challenge for a service marketer. Therefore, a marketer should effectively utilize the capacity without deteriorating the quality to meet the demand.
? SBI has ensured smooth demand through promotions, dynamic pricing of its services,
and reservations by working with operations to adjust capacity. Thus, SBI has ensured that its customers are neither turned away nor they have to wait.
UNIQUE SERVICE CHARACTERISTICS
? Heterogeneity
? Services are highly variable, as they depend on the service provider, and where and
when they are provided. Service marketers face a problem in standardizing their service, as it varies with experienced hand, customer, time and firm. Service buyers are aware of this variability. So, the service firm has made an effort to deliver high and consistent quality in their service; and this is attained by selecting good and qualified personnel for rendering the service.
? Since operational inputs and outputs tend to vary more widely, it is harder for SBI to
maintain consistency, reliability, and service quality or to lower costs through higher productivity making it difficult to shield customers from results of service failures.
? SBI has set quality standards based on extensive research on customer expectations;
redesigned product elements for simplicity and failure-proofing, instituted good service recovery procedures with the help a expert technical team and automated customerprovider interactions.
UNIQUE SERVICE CHARACTERISTICS
? Time Factor
? The time factor often assumes great importance in services as customers see time as a
scarce resource to be spent wisely; dislike wasting time waiting, and want service at the times that are convenient to them.
? SBI has found ways to compete with other banks through faster delivery of services,
minimized burden of waiting by offering extended service hours and hiring more number of service personnel to ensure smooth delivery of service even at peak hours and during festive season when employees tend to take leaves in huge number.
? SBI has also started off a training program with its long term customers as poor task
execution by customers may hurt productivity, spoil service experience. SBI has initiated customer interaction with its facilities and systems to develop utilities in tandem with customer preference.
POSITIONING STRATEGY OF SBI
Market segmentation forms the basis for focused strategies.
MARKET SEGMENTATION 1. Identification of customers’ needs and market segments. 2. Develop profiles of resulting market segments.
IDENTIFICATION OF TARGET MARKETS 3. Evaluation of attractiveness of each segment. 4. Selection of target segments.
POSITIONING 5. Identification of differential advantages in each segment. 6. Development and selection of positioning concepts.
SEGMENTATION AT SBI
• Geographic:
Rural, Urban, Metropolitan.
• Demographic: Occupation: Salaried, Self- employed, Students, Corporate, Government. • Behavioural: Usage: Frequency, Value added services, allied services. Psychographic: Trusted bank image, new generation banking.
TARGETING AT SBI
• “A target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its goods towards.” • The companies while selecting segments for their services they select it on the basis of target customers.
POSITIONING AT SBI
• It is the peoples most trusted bank. • High accessibility with 10,000 branches and extension of hours of work. • Relevance to young customers with value added services like Net Banking, Telebanking etc. • SBI comes among top 50 banks in the world. • It is the most trusted Bank amongst the people.
• State Bank of India (SBI) is the largest nationalized commercial bank in India in terms of assets, number of branches, deposits, profits and workforce.
STRATEGY ADOPTED BY SBI
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Strategic planning is a process which needs more resources including human efforts, and necessary changes in the organisation. The strategist has to scan the organisation’s environment before selecting a strategy. The strategic planning has mainly four steps : (i) Environmental Analysis (ii) Development of Vision and Mission Statement (iii) Setting up of goals and objectives (iv) Identifying strategy and tactics.
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State Bank of India has to frame a strategy which will focus on customer service quality, maintaining profitability, using system technologies, credit portfolio management and productivity improvements. When the bank provides a high quality customer service, it gives a competitive advantage over other banks and it will help to attract the existing and new customers.
STRATEGY ADOPTED BY SBI
Environmental Analysis:
The first step of strategic planning is Environmental analysis. While identifying the external environment of State Bank of India, we have to consider five forces such as: (i)The threat of new competitor’s entry (II)The intensity of competitive rivalry (III)The bargaining power of customers
(IV)The bargaining power of suppliers (V)The threat of substitute products
The threat of entry of new competitors:
Global economy and financial situations are under crisis but the banking industry is booming. This situation attracted many multinational companies in to Indian banking industry. Even many domestic non banking financial companies (NBFC) are also eagerly waiting to receive banking license from RBI. This situation is critical for existing banks including SBI and the competition will become high. SBI’s 200 plus years experience in the industry and reputation will help the bank to overcome these threats of new entrants.
STRATEGY ADOPTED BY SBI
? The intensity of competitive rivalry:
The main competitors of State Bank of India in India are ICICI Bank, HDFC Bank, Axis Bank, Bank of India and Union Bank of India. ICICI bank is the second largest private sector bank in India and has well reputation over the industry. Increase in the number of banks will increase the rivalry since all these banks compete for the same customers and resources. State Bank of India has to face a competitive rivalry from all these banks and thus to plan its activities accordingly.
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The bargaining power of customers: Customers are very much attracted by the bank and the bank’s core value is customer services and their satisfaction. But the same customer will come with arguments and comparison of other banks’ financial products in order to bargain. The bank has to satisfy such customers with its financial products and services since they are able to get same services from the competitors and switching costs from one bank to another is very low.
STRATEGY ADOPTED BY SBI
? The bargaining power of suppliers:
State Bank of India has suppliers who supply stationeries, computers and peripherals to the bank. The switching cost of one supplier to another is time consuming and costly process. The bank has to get support from cash filling agencies to fill its ATMs through out the country. Since these things are very important to the bank, suppliers are getting a bargaining power.
? The threat of substitute products:
Indian banking industry is in high growth and profitable position and thus many foreign banks entered into the market. All of these banks have similar financial products and services and this will lead to get a choice to the customers. Whenever a customer feels that the service offered by SBI is not satisfying their needs, they can easily go for substitute with a low switching cost.
STRATEGY ADOPTED BY SBI
? The bargaining power of suppliers:
State Bank of India has suppliers who supply stationeries, computers and peripherals to the bank. The switching cost of one supplier to another is time consuming and costly process. The bank has to get support from cash filling agencies to fill its ATMs through out the country. Since these things are very important to the bank, suppliers are getting a bargaining power.
? The threat of substitute products:
Indian banking industry is in high growth and profitable position and thus many foreign banks entered into the market. All of these banks have similar financial products and services and this will lead to get a choice to the customers. Whenever a customer feels that the service offered by SBI is not satisfying their needs, they can easily go for substitute with a low switching cost.
STRATEGY ADOPTED BY SBI
STRATEGY ADOPTED BY SBI
? Internal environment of State Bank of India can be identified by SWOT analysis. It is the
powerful tool used to analyse strength, weaknesses, opportunities, and threats of the bank.
Strengths:
? Brand Name:
SBI has a powerful brand name over the country and overseas. SBI became the synonymous for banking in the rural areas.SBI is a public sector bank and government of India has 61.58% of share. This is a competitive advantage over other banks in India.
? Market share:
SBI is the market leader in Indian banking industry.
? Product Mix:
SBI has a portfolio of products and services. It succeeded in the cross selling of its products and services. All the branches of SBI has core banking and it enables the customer to bank anywhere same as local bank.
STRATEGY ADOPTED BY SBI
? Weaknesses:
80% of SBI’s employees are above 40 years of age. SBI is fully computerised, but the lack of computer efficiency made the banking very slow. Non performing assets in credit cards are high. Resistance from employees and trade unions against merger of associate banks is visible.
? Opportunities:
Merger of associate banks with SBI will increase the size of SBI and its market share. Scope of investments in the emerging countries and in Europe can also be explored.
STRATEGY ADOPTED BY SBI
? Threats:
Increase in non performing assets and bad debts. Cyber security and customer data protection. New entrance of emerging private sector banks.
STRATEGY ADOPTED BY SBI
STRATEGY ADOPTED BY SBI
? Institution for advanced learning :
To provide state of the art training in financial products to middle level and senior level executives.
? Internal consultant/change agent :
To act as catalyst for change in attitudes and orientation of banking staff and to provide expertise and consultative support.
? Feedback supplier :
To capture and structure feedback from trainees and from the market.
? Think Tank :
To provide expert and informed suggestions, model business strategies, analysis of market developments from a banker perspective.
STRATEGY ADOPTED BY SBI
? Research and development role :
To carry out research on contemporary subjects which are relevant to the banks short term and medium term and operational needs and policy formulation.
? Overlapping staff training centers :
To liaise, validate and closely monitor the staff training centers in seven circles attached to the academy
STRATEGY ADOPTED BY SBI
MARKETING STRATEGIES
SBI took several initiatives to capture the market pie in 2008. SBI has adopted various marketing strategies for
educating customers about its products and services, particularly the asset products. The various marketing
strategies of SBI are discussed below:
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Participation in various consumer exhibition and meetings
SBI multi?product sales team regularly participates in the exhibitions / melas organized by various sponsors (e.g., SSI?Small Scale Industries). SBI finances loans to the entrepreneurs through this channel. SBI also sets us booking counters are various trade?fairs and industrial fairs where it offers loans at concessional rates to borrowers for booking at those counters. Apart from financing loans to the borrowers, SBI uses these meets as an opportunity to educate people about its various personal segment (p?segment) products and services.
STRATEGY ADOPTED BY SBI
? Tie?ups with builders / car and other vehicle dealer
SBI has entered into financing agreement with various builders, cars and other vehicle dealers to finance the customers at the existing market rates. Usually, we find dealer advertising purchase of their vehicles at cheap rates. This is possible through a loan agreement with the banks.
? Festive loan products
SBI takes advantage of festive seasons, such as Holi, Diwali, Christmas, New?Year for propagating their loan products. During these periods it ties up with various dealers to organize finance for customers who wish to
purchase cars or other vehicles during the festive period. During festive periods it offers XPress credit and
festival loan also to the customers.
STRATEGY ADOPTED BY SBI
? Advertising in TV and Newspapers
In late 2008, SBI launched its hugely successful ‘Banker to Every Indian’ campaign. The idea was simple but extremely forceful. In print advertisements, it depicted a series of situations where people crossed economic barriers to come together—a customer buying fish from a fisherwoman, a trekker asking a local villager for directions, a postman delivering letters to a well-off home.
A small label adjacent to both individuals would say: ‘An SBI customer’. The message seemed to solve SBI’s complex positioning problem. It was now a bank that served both clienteles, without seeking to mix them in one melting pot. SBI understood the needs of both and served them equally well—a strong message of inclusion without sacrificing identity.
STRATEGY ADOPTED BY SBI
? Rural Marketing
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C AMPAIGN OBJECTIVE: To position SBI as a one stop solution for all financial needs of the rural consumers. To change the user perception that SBI is selective in giving loans and their process and systems are cumbersome. COMMUNICATION BARRIERS: SBI is a popular brand in small towns but common man’s perception is that SBI is selective in giving loans and their process and systems are cumbersome. Direct communication with farmers, small business men and other small town population. SOLUTION: Creating awareness about the bank and its services and having a consistent connect with the audience to change the myth attached with SBI. This could be effectively done only by communicating with the audience in their language on a convenient medium: Audio Advertising through the MSRTC Public Address System, Audio- visual displays at highway Food Malls. With the initial campaign done for 20 days, SBI received enquiries worth 500 crores, successful positioning as a one stop solution for all financial requirements when it comes to small town people. Also it helped in connecting with the NPA’s (Non Performing Assets) to communicate various schemes available for farmers.
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? EVALUATION OF COMPETITION
? By virtue of its extensive coverage spanning more than 15,000 branches
across India and 157 foreign offices, SBI has penetrated areas still out of reach for most other banks.
? SBI has automated its branches with the help of Tata Consultancy Services
as its technology partner and ensured the role reversal from a traditional to a modern technologically advanced bank in the minds of today?s jetsetters.
? The rural marketing strategies, mobile banking facilities etc offered by SBI
has been hugely accepted in the market resulting in keeping its flag flying high despite cut throat competition.
? EVALUATION OF COMPETITION
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The keyhole insignia of SBI is the most known brand logo amongst Indians. The following data sheet will act as factual reference to the stated points:
THANK YOU
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