Principles of Marketing
Abhijith Krishnan R – 10MSE1001.
Introduction to Company:
Tata Grou...
Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in collabo...
Leading competitors
Analysis of target segments
Social factors include the cultural aspects and include h...
Since Tata Motors operates in multiple countries across Europe, Africa, Asia, the Middle East, and Aus...
Occupations. The majority of the respondents were
Pvt. Sector employee and students.
Monthly Income No. of Re...
Positioning Strategy
There are fundamentals in managing a brand. Having a strong belief in a set of values, which goes bey...
unfortunate event became widely publicized in front of an eager world audience still awe struck at Tata’s initial daring p...
Market Share
SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial ban...
Leading competitors
Analysis ofthe Target Segments
Global Markets
In keeping with its integrated approach to all treasury ...
Rural Business Group
Rural Business Group comprises rural and semi urban branches, accounting for about 70% of the branch ...
Customer centricity is core to the scale of operations. Many pro-customer initiatives support this belief. In fact, SBI Ca...
Ads at various display boards
SBI also advertises at various billboards about its products and services
SBI is ...
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  1. 1. Principles of Marketing Assignment-1 Abhijith Krishnan R – 10MSE1001. CATEGORY: PRODUCT Introduction to Company: Tata Group was founded in 1868 by Jamsetji Tata as a trading company. It has operations in more than 80 countries across six continents. Tata Group has over 100 operating companies each of them operates independently. Out of them 32 are publicly listed. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan Industries, Tata Communications and Taj Hotels. The combined market capitalization of all the 32 listed Tata companies was $89.88 billion as of March 2012. Tata receives more than 58% of its revenue from outside India. Tata Group remains a family-owned business, as the descendants of the founder (from the Tata family) own a majority stake in the company. The current chairman of the Tata group is Cyrus PallonjiMistry, who took over from Ratan Tata in 2012. Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata group. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The Tata Group and its companies & enterprises is perceived to be India's best-known global brand within and outside the country as per an ASSOCHAM survey. The 2009, annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world. The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality research, educational and cultural institutes in India. The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities. Brand: Tata Motors Tata Motors Limited (formerly TELCO) is Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses and military vehicles. It is the world's eighteenth-largest motor vehicle manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume. Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow,Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United Kingdom. It has research and development centres in Pune, Jamshedpur, Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom. It has a bus manufacturing joint venture with Marcopolo S.A., Tata Marcopolo, and a construction equipment manufacturing joint venture with Hitachi, Telcon Construction Solutions.
  2. 2. Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra and in 1998 launched the first fully indigenous Indian passenger car, the Indica. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and the British premium car maker Jaguar Land Rover in 2008. Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, the National Stock Exchange of India and the New York Stock Exchange. Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations. Market Share: Tata Motors, the country largest auto maker by revenues, is re-aligning its sourcing strategy as part of a major organization revamp, said people familiar with the development. The company, it is learnt, is moving towards 'One Part One Vendor' strategy that will help it cut cost and bring in synergies through economies of scale by sourcing from one vendor instead of 5-8. Speaking at the sidelines of 53rd annual session of Auto Component Manufacturer Association of India, or ACMA, Karl Slym, MD, Tata Motors said, "There's an opportunity to improve for Indian suppliers; some of them are world class, while some are long way away from there." Speaking to about 300 vendors at Macau, Slym had dwelt on Tata Motors' new mission statement ACES - Accountability, Customer and Product Focus, Excellence and Speed — which is being fine-tuned now. "Tata Motors is changing. The message that was spelt out was that quality is of prime importance and there will be no compromise. From price over quality, the approach is changing to quality over price," said one of the vendors requesting anonymity.Slym also stressed that as a strategy, he will have one supplier for one product, instead of eight in some cases. Tata Motors has the largest vendor base — over 1,200 to 1,400 across the country — by any automotive company in India and is trying to reduce the number by more than half over the next three to four years. ET had reported in January that the company has come out with a common vision statement for its two verticals --commercial vehicles and passenger cars instead of its earlier norm of a separate vision statement for both. The new vision and the mission statement is called 'One Team One Vision'. "The message was that the organization is getting revamped; both on the input, which is the supplier, and the output, which is the dealer. The aim is to move towards leaner and quicker organization which can deliver quality with ACES at the center of it," said another vendor. At present, Tata Motors operates on three different platforms for sourcing of passenger cars, Nano and commercial vehicles, each having independent sourcing group. As part of the new sourcing strategy, the company is likely to consolidate all platforms into a single sourcing group. This group will have 8 or 9 sub verticals such as electricals, body frame, engine and transmission, suspension and brakes, interiors, among others. Slym discussed modular product platform strategy, need for early vendor engagement, close coordination with suppliers and technology innovation at the recent Vendor meet. With the company losing market share, experts believe revamp is the way out for Tata Motors. The company's market share has slid to 8.91% in the April to July period, one of the lowest in a decade. It has lined up a Vista facelift and the Manza CS in the next one year, before the new generation products hit the market post 2015-16.
  3. 3. Leading competitors Analysis of target segments SOCIAL ANALYSIS: Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labour). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers). Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a company will affect how well a company performs. This includes every stakeholder from the CEO and President, down to the line-workers who screw the door panel into place, from the investor to the customer, the culture and attitude of all these people will ultimately determine the future of a company and whether they will be profitable or not. TECHNICAL ANALYSIS: Tata Motors and its parent company, the Tata Group, are ahead of the game in the technology field. The Tata Group as a whole has over 20 publicly listed enterprises and operates in more than 80 countries world-wide. This equates to Tata Motors having lots of experience and resources to draw from for research and development purposes. Ratan Tata says that “The foundation of the company‟s growth is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D”. Employing 1,400 scientists and engineers, Tata Motors‟ Research and Development team is ahead of the pack in India‟s market and right with the rest of the field internationally. Among Tata‟s firsts are “the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car,” as well as the increasingly famous Tata Nano, which is projected to be the world‟s cheapest production car. In the automotive industry, it is becoming increasingly crucial for manufacturers to stay on top of the technology curve with new problems always rising such as escalating gas prices and pollution problems. Tata 11 | P a g e recognizes this and dedicates lots of resources and time into research and development to be even with or preferably ahead of other competitors, global trends, and changing economies. In all, an automobile manufacturer must change, adapt, and evolve to stay competitive in the automotive game, and this is exactly what Tata is doing with their rapid growth, and extensive research and development. ECONOMIC ANALYSIS: Operating in numerous countries across the world, Tata Motors functions with a global economic perspective while focusing on each individual market. Because Tata is in a rapid growth period, expanding or forming a joint venture in over five countries world-wide since 2004, a global approach enables Tata Motors to adapt and learn from the many different regions within the whole automotive industry. They have experience and resources from five continents across the globe, thus when any variable changes in the market they can gather information and resources from all over the world to address any issues. For instance, if the price of the Aluminium required to make engine blocks goes up in Kenya, Tata has the option to get the aluminium from other suppliers in Europe or Asia who they would normally get from for production in Ukraine or Russia. Tata Motors also has to pay close attention to shifts in currency rates throughout the world. Currency fluctuations can equate to higher or lower demands for Tata vehicles which in turn affect profitability. It can also mean a rise in costs or a drop in returns. But they also have to pay attention to not just the domestic currency, the rupee, but also to the dollar, euro and pound, to just name a few. Attention to currency is important because it influences where capital investment will develop and prosper. Name Last Price Market Cap. (Rs. cr.) Sales Turnover Net Profit Total Assets Tata Motors 317.80 102,289.18 44,765.72 301.81 33,403.53 Eicher Motors 3,192.15 8,621.67 1,049.26 144.76 649.06 Tata Motors (D) 153.85 4,936.71 - - - Ashok Leyland 13.00 3,458.88 12,481.20 433.71 7,959.92 SML Isuzu 257.30 372.36 1,002.10 36.43 426.18
  4. 4. POLITICAL ANALYSIS: Since Tata Motors operates in multiple countries across Europe, Africa, Asia, the Middle East, and Australia, it needs to pay close attention to the political climate but also laws and regulations in all the countries it operates in while also paying attention to regional governing bodies. Laws governing commerce, trade, growth, and investment are dependent on the local government as well as how successful local markets and economies will be due to regional, national and local influence. On March 26, 2008, Tata Motors reached an agreement with Ford to purchase Jaguar and Land Rover. 16 | P a g e In order to be capable of this acquisition, Tata Motors must have a full comprehension of the governing bodies and laws regulating commerce in the home country, the United Kingdom, but also in countries Jaguar and Land Rover operate in. In accordance, Tata‟s headquarters in Mumbai, India, strictly controls and regulates operations in all dealerships and subsidiaries, in addition to knowing and abiding by all labour laws in the multiple countries where they have manufacturing plants it has to watch political change. This will be especially vital in the future as Tata Motors continues to expand and grow into new markets. “While currently about 18% of its revenues are from international business, the company's objective is to expand its international business, both through organic and inorganic growth routes” ( The foundation of the company‟s growth internationally is a deep understand of economic stimulation, customer needs, and individual government regulations and laws. Although it is the headquarters ultimate responsibility to make sure each individual office and branch is operating and abiding by the local laws, it will become increasingly more important for that duty to be taken care of at the regional or even local level. DEMOGRAPHIC ANALYSIS: Demography is the study of the characteristics of human populations, such as size, growth, density,and distribution. Demographic analysis provides insights into the links between these characteristicsand the cultural, economic, geographic, and other social attributes present in a given area. Factors: Demographic factors affect lifestyle, consumer trends, the type of risk aversive behaviour, spending power and value per customer. The state of demographic trends allows building projections for the use of particular type of products. Demographic factors are- ➢Age: anybody of age between 18 to 50 years. ➢Income: anybody with an income of over 4 lakh p.a. ➢Occupation: millennial employed as professional, managers and those who want to buy their first car. ➢Social Class: Middle Class, Upper Middle, Lower Upper and Upper Upper GENDER Gender Type Frequency Male 64 Female 36 Total 100 The above mentioned chart clearly shows that out of 100 respondents 64 were males and 36 were Females. AGE DISTRIBUTION Age No. of Respondents 18-30 yrs. 64 30-50 yrs. 32 Above 50 yrs. 4 Total 100 The above mentioned chart clearly shows that majority of the respondents lies between the age Group of 18-50 yrs. PROFESSION Profession No. of Respondents Govt. Employee 10 Pvt. Sector Employee 44 Student 31 Businessman 12 Professional 3 Any other 0 Total 100 The above mentioned chart shows that data was collected from respondents having varied types of
  5. 5. Occupations. The majority of the respondents were Pvt. Sector employee and students. INCOME GROUP Monthly Income No. of Respondents Rs.5000-Rs.10000 10 Rs.10000-Rs.15000 16 Rs.15000-Rs. 20000 14 Above Rs. 20000 29 Not Earning 31 Total 100 OTHER FACTORS: Acceptance level, preferences over other model, colour preferences, most inspired feature etc. Value Proposition Tata Motors is currently India's largest automobile company with revenues of $7.2 billion in 2006-07. It is by far the leader in commercial vehicles and the second largest player in the passenger vehicles market with winning products in the compact, midsize car and utility vehicle segments. Employing around 23000 people and headquartered in Mumbai, Tata Motors became the first company from India's engineering sector to be listed in the NYSE in September 20041 . While currently about 18% of its revenues come from international business, the company's objective is to expand its international business, both through organic and inorganic growth routes.A brief examination of the truck industry in India using Porter's analysis helps us understand the threats that Tata Motors faces. How to replicate this strategy for other markets? Sustainable competitive advantage lies not in one, but a combination of multiple resources, each of which individually need not necessarily be the best, but in overall weighted average terms, presents the best solution. For Tata Motors, the combination of resources providing it competitive superiority on a weighted average basis includes (see Exhibit 3): 1. Product Reliability 2. Service Network 3. Channel Reach Three-way Resource Based View In terms of product reliability, Tata Motors offers products of reasonably high standards. However, foreign players like Volvo and even local competitors like Ashok Leyland arguably offer products that are far more refined. But this is more than compensated by a dependable service network and extensive channel reach. Tata's service and distributor network is by far the most extensive of any player in the trucks industry. Hence in overall weighted average terms, Tata Motors still has a winning proposition. In the next section, we provide recommendations that can take this winning proposition even further. Recommendation Matrix Based on a close scrutiny of the resource based view of Tata Motors and the challenges it faces, we propose a recommendation matrix arranged along three broad dimensions - Tangible, Intangible and Capabilities (see Exhibit 4).
  6. 6. Positioning Strategy There are fundamentals in managing a brand. Having a strong belief in a set of values, which goes beyond pure economic desires and targets... It has to be lived by people who deliver that promise, almost intuitively. Companies that put short-term economic interest behind (and, instead) deliver on the brand promise and value have done better. Tata has a set of values that, if push comes to shove, are more important than short-term economic gain. Customers see and intuitively capture that and are attracted by that. Customers are not attracted by pure financial or economic desire. Ultimately you have to be commercially astute and ambitious, but if that is your primary driver, customers are not attracted to that proposition. This specific element of putting long-term brand values before short-term interest is important. The more you do that, the stronger a brand develops. The Tata brand promise of trust and dependability and looking after people is very strong. The second element is seeking to give new solutions to customers. There is a `curious spirit’ of driving into new areas such as the Ace. The value proposition of the other two brands — Jaguar and Land Rover — is very different, but the same basic principles hold true. Land Rover is a better understood, somewhat a stronger brand, delivering a unique set of values. It gives people the feeling that when you drive this car nothing can happen. Some refer to it as a fortress on wheels...a car that gives a feeling of safety and security. These brand values perfectly fit with the Tata.Tata motors has two major market segment that it aims to penetrate with its line of vehicle that it produces. One target is the low income families and individuals looking to purchase a first car. This target group mostly concentrates itself in the developing nations such as China and India, Tata’s own home country. Tata’s offering of models such as the Nano and the Indica caters for this segment. This target segment also has been the most widely publicized target of Tata Motors. The other segment Tata targets is on the complete opposite side of the economic spectrum. This target segment also has been the most widely publicized target of Tata’s. Tata’s second target segment is the wealthy individuals and families looking to purchase luxurious cars. Tata targets this group with their offering of Land Rover and Jaguar lines of automobiles. Both of these highly recognized and respected brand name vehicles were recently acquired by Tata from Ford Motors in 2008. In order to cater itself to two such divergent groups, Tata motors offers different value proposition to each. The value proposition it offers to the first group, the low income individuals and families, is to offer a line of vehicles that are affordable while still being safe. This value proposition was clearly evident and communicated when the Nano was announced for release in 2009. However, since then the Nano has become somewhat of publicity nightmare for Tata as it failed to deliver these proposed value propositions and satisfy its consumers. This
  7. 7. unfortunate event became widely publicized in front of an eager world audience still awe struck at Tata’s initial daring proposition. In reality, Nano’s market price started at $2900, a whopping 45% increase from the initial suggested price of $2000 (Bajaj, 2010). Nano also revealed itself to possess a serious design flaw in its electrical system and numerous Nanos were shown going ablaze on the news around the world. Tata Motors’ failure to meet its own initial proposition has been blamed on numerous factors from rising metal costs to insufficient management planning (Eyring, 2011). Consumers have reacted very negatively to such a public failure and Tata Motors’ seeming disability to live up to its initial promise and value proposition to them. Sales were affected badly as Tata announced that it had sold only 509units of Nano in November 2010. (Bajaj, 2010)Faced with such a threatening decline in sales number Nano has added another dimension to affordability, one of its proposed value propositions. Using its vast network and influence in India, Tata has started to sell Nano outside of its dealerships. These new locations include places such as grocery retail locations and brings these cars closer to the people it targets. Tata has also said that it is actively seeking reasonable financing plans to help its customers make the car more affordable (Mint., 2011). As rollout of their new model Indica progresses in China, many are waiting to see if the lessons learned in India will allow Tata Motors to fully deliver its value propositions to this customer segment (Accord Fintech, 201). The other market segment Tata Motors targets is the wealthy individuals and families looking to buy a luxury car. These offerings are represented by their Land Rover and Jaguar lines (Tata Group). The value proposition offered to this segment is to provide automobiles that consumers can trust and depend upon while giving them a sense of high-class self-satisfaction. As a brand name previously belonging to Ford motors and less recognized as a “Tata brand” than its Nano and Indica lines, these two brands have largely escaped the recent escapades brought on by Tata’s previously discussed public failures. Tata has expressed a hope to finance their long term projects with the steady incomes coming from these two lines (Tata Group, 2010). Conclusion Tata Motors has never had it so good. Today the company is the undisputed market leader in the commercial vehicles industry in India and is gradually emerging as one of the key players internationally too. It has been forging ahead on a number of fronts in an attempt to further entrench its position as a market leader. In the SCV segment, the company has witnessed unprecedented success with the launch of the pioneering Tata ACE. In the M and HCV segment, the company has been taking determined steps to further consolidate its position. The company enjoys a number of key strengths that enable it to present a unique value proposition to its customers. However this success is far from being a given. The company must focus on combining its unique strengths, as it endeavors to replicate its recent successes in new segments and across new geographies. Apart from product reliability, the most important determinant of future success would the company's ability to bolster its support framework. If the company gets it right, the spoils could indeed be breathtaking. Not only will that catapult the company to the forefront of creating a unique customer experience, but also help spawn altogether new revenue streams. The future presents challenges and opportunities for the company in equal measure both domestically and internationally. While pitfalls are many, Tata Motors looks well positioned indeed to capitalize on these opportunities and take on the world. CATEGORY: SERVICE Introduction to the Company 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 had assets of US$501 billion and 15,003 branches, including 157 foreign offices, making it the largest banking and financial services company in India by assets. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turn became the State Bank of India. Government of Indianationalized the Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI was ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non- resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout the country.SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks. The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009 rankings and was the only bank featured in the "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.
  8. 8. Market Share SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks. State Bank of India (SBI) is a Public Sector Banking Organization (PSU), in which the Government of India is the biggest shareholder. It is the largest bank in India and is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008 Forbes Global 2000. Measured by the number of branch offices, SBI is the second largest bank in the world. SBI traces its ancestry back to the Bank of Calcutta, which was established in 1806; this makes SBI the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. In 2008 SBI was ranked 380 from a rank of 495 in 2007. As per fortune 500‐2008 following are the data for SBI in $ million. • Revenues: 22,402.2 • Profits: 2,225.0 • Assets: 255,854.9 • Stockholders' Equity: 15,263 The SBI group companies include SBI Capital Markets Ltd, SBI Mutual Fund (A Trust), SBI Factors and Commercial Services Ltd, SBI DFHI Ltd, SBI Cards and Payment Services Pvt Ltd, SBI Life Insurance Co. Ltd ‐ Banc assurance (Life Insurance), SBI Funds Management Pvt Ltd, SBI Canada. SBI was rechristened as State Bank of Indian in 1955 from Imperial bank of India. The decade of 2000s was a turning point in the Indian banking industry. It brought out a major transformation in the working style of Indian banks. With several competitors gaining ground in Indian Territory, SBI was facing constant threat of takeover. The exhibit below maps the banking industry using porter’s five forces model. The model shows that there is huge competition in the banking industry and that the customer is the king. Banks that providegood customer service and are responsive to the market in the long run would win.
  9. 9. Leading competitors Analysis ofthe Target Segments Global Markets In keeping with its integrated approach to all treasury activities in various markets in different time zones i.e., Forex, Interest Rates, Bullion, Equity and Alternative Assets, the Bank re-designated its Treasury Operations into “Global Markets.” Wholesale Banking Group The Bank's Wholesale Banking Group consists of three Strategic Business Units: Corporate Accounts Group, Project Finance & Leasing, and Stressed Assets Management Group. The Bank has recently launched the "Wholesale Banking Initiative" to harness the SBI Group synergy for the benefit of the corporate customers by providing them with a "One Stop Shop" facility for all their banking needs. Mid-Corporate Group The Mid-Corporate Group (MCG) has been immensely successful in attracting the business of Mid-Corporate units through relationship management and quicker credit processing. It is estimated that 38% of the Mid-Corporate universe in the country is covered by the bank. The total credit portfolio (fund based) of the Group stands at Rs. 1,090.02 billion. This is more than the aggregate business handled by many of the top banks in the country. = National Banking Group The Bank's National Banking Group (NBG) consists of three Business Groups: Personal Banking, Small & Medium Enterprise (SME), and Government Banking.
  10. 10. Rural Business Group Rural Business Group comprises rural and semi urban branches, accounting for about 70% of the branch network of the Bank. International Banking Group The Bank has a network of 84 overseas offices spread over 32 countries covering all time zones. Net Profit from the Bank’s overseas operations (including subsidiaries and joint ventures with more than 50% shareholding) registered a growth of 84% during the fiscal year mainly driven by significant growth of 48% in Net Customer Credit. Value Proposition SBI is the largest bank in India with a 61.6% government stake. It has a loan book of ~US$170B with exposure to corporate, SME, retail, international and agricultural sectors, and forms >20% of total system credit. It has the highest number of branches and a strong rural presence leading to a high CASA of ~47%. Price target and valuation analysis: Our Mar-14 price target for SBI of Rs. 2,600 is based on a Gordon growth model with a normalized ROE of ~15% and a 2nd stage growth of ~14% and Rs. 108/share for the insurance business. Our PT implies 1.2x FY14E book (excluding insurance) and 7x FY14E EPS. SBI has to formulate its strategy at different levels such as corporate level, business level, and functional level. Now the bank is going with a general strategy of expanding its business and network further. Now SBI is focusing on merger of its associate banks with it and gain an unbeaten position in the industry. SBI has advanced learning institutions which aims to give financial product knowledge to middle and senior level executives. The bank applies an old but very effective tool of feedback collection from the customers and employees regarding their products and services. SBI’s corporate strategy is to enter into new business and focusing in areas; such as Pension Fund Management, Private Equity, Custodial Services, General Insurance, Payment Solutions (Mobile Banking Services, Real Time Gross Settlement (RTGS)& National Electronic Fund Transfer (NEFT),Debit Cards), Financial Planning & Advisory Services, Depository Participant Services, and online trading. SBI’s another strategy is focusing on agricultural areas and for this bank reduced the interest rate of agricultural loans and increased the amount of loans. The backbone of Indian economy is agriculture and focusing on the area gives the bank a competitive advantage over other public and private sector banks. The banks strategy includes expansion of its International Operations into Singapore and China. During this global financial recession, its foreign offices maintained comfortable liquidity position which indicates its opportunities in this area. The bank’s increasing NRI business shows that its strategies are up to the mark. The banks strategy for domestic operation is to concentrate on Merchant banking, Export credit, and global link services such as inward and outward remittances. Shareholders are the real owners of the bank and their interest on the bank is for the growth and profitability. The participation of its stakeholders is very important to every organization in order to continue in the winning path. At State Bank of India, the management looks keen to get the full support and help from the part of stakeholders to ensure that bank is going through right way. It is the chance for the management to give information to the shareholders about their plans and the new financial products and services which are going to implement. A healthy relationship with the stakeholders will help the bank to perform well and such a bank will be acceptable to everyone. Stakeholders of SBI can be a feedback agent about its products and services. The financial decisions are taken at various level by different officials depending upon their position should consider the opinions of stakeholderstoo. Doing so, the stakeholders are also become the part of its strategic decisions and aware about the process. This will help to get commitments from the stakeholders for the planning and implementation of the strategy. A timetable is very important for the implementation of an organizations strategy. The implementation of strategy is a long process and requires changes in the organization. A Business Process Re- engineering (BPR) has to apply in the organization. The total structure and process of the organization was structured for the suitability of its earlier strategy. Since the organization is going to implement its new strategy, the organization has to take necessary changes in its structure and processes. The timetable starts from making the necessary changes in the organizational structure, and employees training in order to make them capable for the changes.SBI’s one of the strategy is merger of its associate banks with the bank. So far State Bank of Saurashtra& State Bank of Indore merged into State Bank of India. Strategic implementation is a long process and it requires several changes in the organization. Moreover the environment of the organization undergoes continuous changes. In each and every step of strategic implementation, we have to evaluate the result of that step in the organization. Doing so will help to make necessary changes in the strategic process and organization. This evaluation can be done by comparing the result of each step with organization’s earlier status. No strategy can guarantee 100 % success and there is a chance for deviation in the result. We can not compare one strategy to another since no strategy is perfect and it is different from one company to another. But it is very important to monitor the effectiveness of newly implemented strategy. For example while going with the merger of Associate Bank with SBI, there is a chance for duplication. There is a chance for having more branches in the same town with less than 1 km distance which will not provide any advantages to the bank. Monitoring the effectiveness of the strategy will help the bank to take necessary actions.
  11. 11. Customer centricity is core to the scale of operations. Many pro-customer initiatives support this belief. In fact, SBI Cards is among the players with the lowest customer complaints received from the Banking Ombudsman, bearing testimony to the continuous efforts to 'Make Life Simple' for the customers. 1. Offers 14 payment options - The only Company in India to offer 14 different modes of payment options to customers. This includes SBI Account holders who can direct their remittances through; National Electronic Fund Transfer (NEFT) and Over The Counter (OTC) (at SBI Branches) 2. One of the first few companies to have migrated to the Europay, MasterCard and Visa (EMV) platform. SBI Cards uses this cutting- edge technology for its wide spectrum of Credit Cards. 3. Insta-Card for making immediate spends 4. Comprehensive real-time SMS alerts system with more than 60 types of useful and critical alerts for cardholders 5. that allows cardholders to discover the power of convenience & manage their SBI Card account 24*7 6. A cutting-edge IVR (Interactive Voice Response) system, which is truly customer-friendly and has a host of services for the customers 7. The SMS channel for grievance redressal wherein cardholders can simply SMS the word "Problem" to < 9212500888> and get their concerns addressed. 8. SBI Cards is also highly active on Twitter & Facebook, the Social Media Channel thus enabling a 360 degree approach to reach out to customers & in turn giving them various ways to contact them. Positioning Strategy The logo of the State Bank of India is a blue circle with a small cut in the bottom that depicts perfection and the small man the common man - being the center of the bank's business. Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY INDIAN", "THE NATION BANKS ON US" 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 / melasorganized 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. 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. Advertising in TV and Newspapers The advertising strategy is centralized at Mumbai office for advertisements in TV and Economic Times / The Times of India. The famous ChimanLal Charlie Ad placed in TV has also won awards. SBI campaigns also attempts to explain why it is better than other banks (See Figure 9). For advertisement into other National Dailies and local dailies their advertisement strategy is decentralized at the local head‐office level. SBI has launched an education initiative to educate its customers about ATMs, its account opening services, its wide network, home loan and various other loan products and so on. The advertisements are regularly published in local and national dailies. The bank has taken the positioning of Pure Banking emphasizing that SBI does what it does best: Purebanking. The bank has now taken the tagline" Pure Banking ,Nothing else", which takes a dig at new generation banks whichspend lot of time doing non‐banking financial services. A new TVcommercial is also running showing a young guy gettingimpressed by the services offered by SBI, which is his parents’bank. The recent print and TV commercial are aimed at sheddingthe "old public sector bank" image of SBI and make it morerelevant and attractive to the young customers. The bank is nowrunning a mix of rational, humorous and emotionaladvertisement to promote the bank. Oral Marketing SBI has appointed various customer relationship officers and assistants at the 10 branches of SBI, Bilaspur. These officers take care to provide the relevant information to the customers who visit their offices. They help the customers with various products and services of SBI. Professional OfferingsSBI has also several offerings directed towards professionals who wish to set up their own businesses. For example, Doctor Plus/ Dental Doctor Plus is a finance scheme directed towards the Doctors/ Dentists who wish to set up their own clinics/ dispensaries and for purchasing medical equipments. Similarly, they have SBI Shoppe scheme which is directed towards other professionals like beauticians and other service‐oriented people encouraging them to set up their own establishments for rendering services. SBI has a well‐trained multi‐product sales team (MPST) which educates its customers about these products and services.
  12. 12. Ads at various display boards SBI also advertises at various billboards about its products and services Conclusion SBI is in 1st position having large number of customers &providing good services to them. The bank has a wide customer base, so the bank shouldconcentrate on this to retain these customers.In present scenario SBI is the largest advance product issuer in India. Within a very shortperiod of time the achievement made by SBI is excellent, what a normal bank cannot expect,but it is being done by SBI. It happens due to employee dedication towards the organization,fastest growing Indian economy, & brand image.Tobethelargestadvanceproductissuer, SBIshouldfocuson- •Launch Innovative product •Customized advance products •Better customer services •Fastest customers’ problem solving techniques •Customer retention Apart from all the above, SBI believe in providing good customer services to their customers which is a key factor for success in future. References interest
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