Marketing Strategy muthoot finance.docx

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Executive Summary
This project was really a challenge for me but I learned a lot while
preparing this project. This report provides me a chance to study and
analyses the practical aspects of the topic “Marketing Strategy of Muthoot
Finance”. It enhanced my knowledge in the field of marketing. This project
also gave me the chance to improve logical thinking and interacting
patterns.
This project high lightens the importance of marketing strategies. This
project also highlights the product promotion during the visit to Muthoot
Finance , The project deals with the various aspects of marketing strategy.
New marketing strategy mean that creating new market area, developing
the new relation, doing new promotion and advertising is done in relation to
the 4 P’s of marketing that is Product, Price, Place and Promotion. There
exist some opportunity in the marketing activity done by the company in the
past. The new marketing strategy of the company will develop the mutual
relation with future customers.
The Extract of the work is presented in this report under various
headings as, Introduction, Company’s Profile, Project Introduction,
Methodology, Data analysis, Suggestions and Conclusions.
While working on the project, I came to know about the latest
marketing strategies and trends prevailing in the market. The way of
promoting the products, providing a better convenience of customer, and
developing the new strategic technique to opt services.

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Introduction of the Topic
Marketing strategy is the comprehensive plan formulated particularly for
achieving the marketing objectives of the organization. It provides a
blueprint for attaining these marketing objectives. It is the building block of
a marketing plan. It is designed after detailed marketing research. A
marketing strategy helps an organization to concentrate it’s scarce resources
on the best possible opportunities so as to increase the sales.
A marketing strategy is designed by:
1. Choosing the target market: By target market we mean to whom the
organization wants to sell its products. Not all the market segments
are fruitful to an organization. There are certain market segments
which guarantee quick profits, there are certain segments which may
be having great potential but there may be high barriers to entry. A
careful choice has to be made by the organization. An indepth
marketing research has to be done of the traits of the buyers and the
particular needs of the buyers in the target market.
2. Gathering the marketing mix: By marketing mix we mean how the
organization proposes to sell its products. The organization has to
gather the four P’s of marketing in appropriate combination.
Gathering the marketing mix is a crucial part of marketing task.
Various decisions have to be made such as -

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 What is the most appropriate mix of the four P’s in a given
situation
 What distribution channels are available and which one should
be used
 What developmental strategy should be used in the target
market
 How should the price structure be designed
Importance of Marketing Strategy
 Marketing strategy provides an organization an edge over it’s
competitors.
 Strategy helps in developing goods and services with best profit
making potential.
 Marketing strategy helps in discovering the areas affected by
organizational growth and thereby helps in creating an organizational
plan to cater to the customer needs.
 It helps in fixing the right price for organization’s goods and services
based on information collected by market research.
 Strategy ensures effective departmental co-ordination.
 It helps an organization to make optimum utilization of its resources
so as to provide a sales message to it’s target market.
 A marketing strategy helps to fix the advertising budget in advance,
and it also develops a method which determines the scope of the plan,
i.e., it determines the revenue generated by the advertising plan.

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In short, a marketing strategy clearly explains how an organization reaches
it’s predetermined objectives.
MARKETING STRATEGY
Marketing strategy is the fundamental goal of increasing sales and achieving
a sustainable competitive advantage. Marketing strategy includes all basic,
short-term, and long-term activities in the field of marketing that deal with
the analysis of the strategic initial situation of a company and the
formulation, evaluation and selection of market-oriented strategies and
therefore contribute to the goals of the company and its marketing
objectives.
Developing a marketing strategy
Marketing strategies serve as the fundamental underpinning of marketing
plans designed to fill market needs and reach marketing objectives. Plans
and objectives are generally tested for measurable results with a goal of
finding the most meaningful and actionable data that will help optimize
success rates and help establish and maintain competitive advantages.
Commonly, marketing strategies are developed as multi-year plans, with a
tactical plan detailing specific actions to be accomplished in the current
year. Time horizons covered by the marketing plan vary by company, by
industry, and by nation, however, time horizons are becoming shorter as the
speed of change in the environment increases. Marketing strategies are
dynamic and interactive. They are partially planned and partially
unplanned. See strategy dynamics. Marketing strategy needs to take a long-
term view, and tools such as customer lifetime value models can be very

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powerful in helping to simulate the effects of strategy on acquisition,
revenue per customer and churn rate.
Marketing strategy involves careful and precise scanning of the internal and
external environments. Internal environmental factors include the marketing
mix and marketing mix modeling, plus performance analysis and strategic
constraints. External environmental factors include customer analysis,
competitor analysis, target market analysis, as well as evaluation of any
elements of the technological, economic, cultural or political/legal
environment likely to impact success. A key component of marketing
strategy is often to keep marketing in line with a company's overarching
mission statement.
Once a thorough environmental scan is complete, a strategic plan can be
constructed to identify business alternatives, establish challenging goals,
determine the optimal marketing mix to attain these goals, and detail
implementation. A final step in developing a marketing strategy is to create a
plan to monitor progress and a set of contingencies if problems arise in the
implementation of the plan.
Marketing Mix Modeling is often used to help determine the optimal
marketing budget and how to allocate across the marketing mix to achieve
these strategic goals. Moreover, such models can help allocate spend across
a portfolio of brands and manage brands to create value.
DIVERSITY OF STRATEGIES
Marketing strategies may differ depending on the unique situation of the
individual business. However, there are a number of ways of categorizing

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some generic strategies. A brief description of the most common categorizing
schemes is presented below:
Strategies based on market dominance - In this scheme, firms are classified
based on their market share or dominance of an industry. Typically there
are four types of market dominance strategies:
1. Leader
2. Challenger
3. Follower
4. Nicher
According to Shaw, Eric (2012)."Marketing Strategy: From the Origin of the
Concept to the Development of a Conceptual Framework". Journal of
Historical Research in Marketing., there is a framework for marketing
strategies.
Market introduction strategies
"At introduction, the marketing strategist has two principle strategies to
choose from: penetration or niche" .
Market growth strategies
"In the early growth stage, the marketing manager may choose from two
additional strategic alternatives: segment expansion (Smith, Ansoff) or brand
expansion (Borden, Ansoff, Kerin and Peterson, 1978)" .

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Market maturity strategies
"In maturity, sales growth stage, the marketing manager may choose from
two additional strategic alternatives: segment expansion (Smith, Ansoff) or
brand expansion (Borden, Ansoff, Kerin and Peterson, 1978)" .
Market maturity strategies
Market decline strategies
At some point the decline in sales approaches and then begins to exceed
costs. And not just accounting costs, there are hidden costs as well; as
Kotler (1965, p. 109) observed: 'No financial accounting can adequately
convey all the hidden costs.' At some point, with declining sales and rising
costs, a harvesting strategy becomes unprofitable and a divesting strategy
necessary" .
Early marketing strategy concepts
Borden's "marketing mix"
"In his classic Harvard Business Review (HBR) article of the marketing mix,
Borden (1964) credits James Culliton in 1948 with describing the marketing
executive as a 'decider' and a 'mixer of ingredients.' This led Borden, in the
early 1950s, to the insight that what this mixer of ingredients was deciding
upon was a 'marketing mix'" .
Smith's "differentiation and segmentation strategies"
"In product differentiation, according to Smith (1956, p. 5), a firm tries
'bending the will of demand to the will of supply.' That is, distinguishing or
differentiating some aspect(s) of its marketing mix from those of competitors,

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in a mass market or large segment, where customer preferences are
relatively homogeneous (or heterogeneity is ignored, Hunt, 2011, p. 80), in
an attempt to shift its aggregate demand curve to the left (greater quantity
sold for a given price) and make it more inelastic (less amenable to
substitutes). With segmentation, a firm recognizes that it faces multiple
demand curves, because customer preferences are heterogeneous, and
focuses on serving one or more specific target segments within the overall
market". Dean's "skimming and penetration strategies" "With skimming, a
firm introduces a product with a high price and after milking the least price
sensitive segment, gradually reduces price, in a stepwise fashion, tapping
effective demand at each price level. With penetration pricing a firm
continues its initial low price from introduction to rapidly capture sales and
market share, but with lower profit margins than skimming"

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Company Profile
MUTHOOT FINANCE LIMITED
Muthoot Finance a subsidiary of Muthoot Group was established in 1939,
and is primarily involved in the financial sector of the country. We are the
largest gold financing company in India in terms of loan portfolio. We
provide personal and business loans secured by gold jewellery, or Gold
Loans, primarily to individuals who possess gold jewellery but could not
access formal credit within a reasonable time, or to whom credit may not be
available at all, to meet unanticipated or other short-term liquidity
requirements. Our Gold Loan portfolio as of March 31, 2010 comprised
approximately 2.8 million loan accounts in India that we serviced through
1,605 branches across 20 states and two union territories in India.
According to the IMaCS Industry Report 2009, as of March 31, 2010 our
branch network was the largest among gold loan NBFCs in India. We have
since increased our branch network to 1,921 branches as of August 31,
2010, and used our branch network to serve an average of 53,989
customers per day in the month of August 2010. As of August 31, 2010, we
employed 12,220 persons in our operations. Muthoot also provides various
financial services such as Insurance distribution, Wealth Management,
Foreign Exchange, Money Transfer and Vehicle & Asset Finance. Muthoot
Finance was selected as one of the Top 10 Finance companies to work for in
India by Naukri.com. Muthoot Finance privately placed 4% of its paid up
capital to Private Equity players - BaringsIndia and Matrix Partners India for

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Rs.1.57 billion, hence valuing the earlier privately held company at over $1
billion.
We are a “Systemically Important Non-deposit taking NBFC” headquartered
in the southern Indian state of Kerala. Our operating history has evolved
over a period of 70 years since M George Muthoot (the father of our
Promoters) founded a gold loan business in 1939 under the heritage of a
trading business established by his father, Ninan Mathai Muthoot, in 1887.
Since our formation, we have broadened the scale and geographic scope of
our retail lending operations so that, as of March 31, 2010, we were India's
largest provider of Gold Loans. In the years ended March 31, 2008, 2009
and 2010, revenues from our Gold Loan business constituted 95.97%,
96.71% and 98.08%, respectively, of our total income. In addition to our
Gold Loans business, we provide money transfer services through our
branches as sub-agents of various registered money transfer agencies, and
recently have commenced providing collection agency services. We also
operate three windmills in the state of Tamil Nadu.

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We issue secured non-convertible debentures called “Muthoot Gold Bonds”
on a private placement basis. Proceeds from our issuance of Muthoot Gold
Bonds form a significant source of funds for our Gold Loan business. We
also rely on bank loans and subordinated debt instruments as our sources
of funds. As of March 31, 2010, we had Rs.27,192.5 million in outstanding
Muthoot Gold Bonds and Rs.25,612.7 million in other borrowings. We also
raise capital by selling a portion of our loan receivables under bilateral
assignment agreements with various banks that purchase our portfolio
primarily for meeting their priority sector lending commitments.
Our customers are typically small businessmen, vendors, traders, farmers
and salaried individuals, who for reasons of convenience, accessibility or
necessity, avail of our credit facilities by pledging their gold jewellery with us
rather than by taking loans from banks and other financial institutions. We
provide retail loan products, primarily comprising Gold Loans. We also
disburse other loans, including those secured by Muthoot Gold Bonds. Our
Gold Loans have a maximum 12 month term. Our average disbursed Gold
Loan amount outstanding was Rs.26,183.0 per loan account as of March
31, 2010. In the year ended March 31, 2010, our retail loan portfolio earned,
on average, 1.67% per month, or 19.94% per annum.
As of March 31, 2008, 2009 and 2010, our portfolio of outstanding gross
Gold Loans under management wasRs.21,790.1 million, Rs.33,000.7 million
and Rs.73,417.3 million, respectively, and approximately 30.1 tons,38.9
tons and 65.5 tons, respectively, of gold jewellery was held by us as security
for our Gold Loans . Gross non-performing assets ("NPAs") were at 0.42%,
0.48% and 0.46% of our gross retail loan portfolio under management as of
March 31, 2008, 2009 and 2010, respectively.
In the years ended March 31, 2008, 2009 and 2010, our total income was
Rs.3,686.4 million Rs.6,204.0 million and Rs.10,893.7 million, respectively,
demonstrating an annual growth rate of 57.56%, 68.29% and 75.59%,

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respectively. Our profit after tax in the years ended March 31, 2008, 2009
and 2010 was Rs.636.0 million, Rs.977.2 million and Rs.2,275.7 million,
respectively, demonstrating an annual growth rate of 44.61%, 53.65% and
132.88%, respectively. Our net worth as of March 31, 2008, 2009 and 2010
was Rs.2,131.1 million, Rs.3,614.5 million and Rs.5,841.9 million,
respectively.
We believe that the following competitive strengths position us well for
continued growth: Market leading position in the Gold Loan business with a
strong presence in under- served rural and semi urban markets
Gold loans are the core products in our asset portfolio. We believe that our
experience, through our Promoters, has enabled us to have a leading
position in the Gold Loan business in India. Highlights of our market
leading position include the following:
• We are the largest gold financing company in India in terms of
loan portfolio. Our loan portfolio as of March 31, 2010 comprised
approximately 2.8 million loan accounts in India with Gold
Loans outstanding of Rs.73,417.3 million.
• We have the largest branch network among gold loan NBFCs. As
of March 31, 2010, we operated 1,605 branches across 20 states
and two union territories in India, and in the month of August
2010, we served an average of 53,989 customers daily. Our
branch network has expanded significantly in recent years from
373 branches as of March 31, 2005 to 1,921 branches as of
August 31, 2010, comprising 335 branches in northern India,
1,322 branches in southern India, 197 branches in western
India and 67 branches in eastern India.
• We believe that due to our early entry we have built a
recognizable brand in the rural and semi-urban markets of
India, particularly in the southern Indian states of Tamil Nadu,

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Kerala, Andhra Pradesh and Karnataka. As of March 31, 2010,
the southern Indian states of Tamil Nadu, Kerala, Andhra
Pradesh and Karnataka constituted 75.38% of our total Gold
Loan portfolio.
• We have a strong presence in under-served rural and semi-
urban markets. A large portion of the rural population has
limited access to credit either because of their inability to meet
the eligibility requirements of banks and financial institutions
because credit is not available in a timely manner, or at all. We
have positioned ourselves to provide loans targeted at this
market.
• We offer products with varying loan amounts, advance rates (per
gram of gold) and interest rates. The principal loan amounts we
disburse usually range from Rs.2,000.0 to Rs.100,000.0 while
interest rates on our Gold Loans range between 12.00% to
30.00% per annum.

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Objectives of the Study
 To indentify factors of marketing strategies of Muthoot
Finance .
 To Study and analyze the Promotional Strategies.
 To know whether the customers are satisfied with the offers
given by the Mall.
 To find out satisfaction of the customers.
 To study and analyze the customer's perception

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Research Methodology
Meaning:
Under Research Methodology various steps that are generally adopted by a researcher
in studying his research problem along with logic Behind them is discussed. The researcher
methodology has many dimensions and research methods to constitute a part of the research
methodology. It is necessary for the researcher to design the methodology for his problem as
it may differ from problem to problem. In the process of conduction the study, the researcher
has followed the following methodology
Field Study:
ResearchDesign
The research designs under taken for the study is in descriptive one. The methodology
involved in this design is mostly qualitative in a nature.
Working Hypothesis
The research instrument used for the survey is a structured undisguised questionnaire.
The questionnaire has been framed in structured with a total number of 10 questions. It has
both open ended and closed ended questions. The information collected through personal
interview is also being used.
Graphical Presentation used:
Bar Charts
Pie charts
Sample Method
A sample is used in research because it is not feasible to study the whole population
from which it is drawn. The process of sample makes it possible to accept a generalization to

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the intended population based on careful observation of variable within a relatively small
proportion of population. In the present study random sampling method was initiated.
Sample Size : Sample for the study was 100.
Data Collection
Primary Data:
Primary data was collected within the employees of organization through survey and
self administered questionnaire.
Secondary Data:
Secondary data was collected from various published books, companies’ web sites
and company old records.
Sample Size
For a research study to be perfect the sample size selected should be optimal i.e. it
should neither be excessively large nor too small. Here the sample size was bounded to 100.
Method of Data Analysis
Analysis of data is a process of inspecting, cleaning, transforming, and modeling data
with the goal of highlighting useful information, suggesting conclusions, and
supporting decision making. Data analysis has multiple facets and approaches,
encompassing diverse techniques under a variety of names, in different business,
science, and social science domains the method used in this project was simple
percentage method.

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Data Analysis and Interpretation
Q1.How do you came to know about Muthoot Finance
S.No. Options Respondents Percentage
1 News Paper 55 55%
2 Social Media 32 32%
3 Family/ Friends 10 10%
4 Others 3 3%
5 Total 100 100%
Data depicted in above graphical presentation revealed that more than half
(55%) of the respondents came to know through news paper, 32%
respondents came to know about it through social media, 10% came to
know through their family members or friends where as very little percent
(3%) respondents cane to know through some other sources.
55.00%
32.00%
10.00%
3.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
News Paper Social Media Family/ Friends Others
Source

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Q2. Do you remember any road side hoardings of Muthoot Finance
1 Yes 41 41%
2 No 59 59%
3 Total 100 100%
Above graphical presentation showed 59% of the respondents do not
remember any road-side hoarding of Muthoot Finance where as 41% agreed
that they remember that they have seen road-side hoarding.
41.00%
59.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
yes No
Response

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Q3.Do you find any promotional material like pamphlets/handbill during
your first visit to Muthoot Finance
1 yes 81 81%
2 No 19 19%
3 Total 100 100%
From the above table and graph is clear that 81% respondents have seen
promotional material during their first visit to Muthoot Finance where as
19% have not noticed any such material.
81.00%
19.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
yes No
PromotionalMaterial

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Q4.Do you find that promises made in advertisement were kept .
1 yes 78 78%
2 No 22 22%
3 Total 100 100%
Above graphical presentation revealed that promises made by the company
were fulfilled to 78% respondents, where as 22% denied that Muthoot
Finance had kept and fulfilled promise made to them .
78.00%
22.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
yes No
Loyality

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Q5.Does the company offered you discounts in interest or free services.
1 yes 61 61%
2 No 39 39%
3 Total 100 100%
Data revealed that more than half respondents (60%) agreed that they were
offered some kind of benefits at the time of first visit where as 39% declined
the same.
61.00%
39.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
yes No
Discounts

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Q6.Does the organization offer some kind of gifts, free service or cash back
on introducing new customers?
1 yes 85 85%
2 No 15 15%
3 Total 100 100%
Above graphical presentation shows that mall administration offers benefits
to their customer on introducing new customers where as 15% demined
with the statement
85.00%
15.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
yes No
Rewards

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Q7.Do you agree that marketing strategies followed by the organization are
effective.
1 Yes 55 55%
2 No 45 45%
3 Total 100 100%
Data depicted in above table revealed that 55% respondents believes that
the marketing strategies followed by the company are effective where as 45%
were not agreed with the statement.
55.00%
45.00%
Marketing Strategies

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Q8.Are you influenced by the advertisement
1 Yes 62 62%
2 No 38 38%
3 Total 100 100%
From the analysis of the above table it was revealed that 62% were
influenced with the Malls advertisement where as 38% do not.
62.00%
38.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Yes No
Influenced

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Q9.Does Muthoot Finance regularly active in social media
1 Yes 77 77%
2 No 23 23%
3 Total 100 100%
Above graphical presentation showed that the Muthoot Finance is regularly
active on social media 77% supported the statement where as 23% do not
agreed with the statement.
77.00%
23.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Yes No
Social Media Followers

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Q10.Will you suggest your family member or friends to visit Muthoot
Finance
1 Yes 78 78%
2 No 22 22%
3 Total 100 100%
Above data revealed that 78% respondents agreed that they will suggest
their family and friends to visit Muthoot Finance where as 22% respondent
agreed that they will not suggest to anyone.
78.00%
22.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Yes No
Recommend to family & Friends

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Findings
After the analysis of the data I came up with the following findings
Data revealed that more than half (55%) of the respondents came to know
about Muthoot Finance through news paper, 32% respondents came to
know about it through social media, 10% came to know through their family
members or friends where as very little percent (3%) respondents cane to
know through some other sources.
It was also found that 59% of the respondents do not remember any road-
side hoarding of Muthoot Finance where as 41% agreed that they remember
that they have seen road-side hoarding.
81% respondents have seen promotional material during their first visit to
Muthoot Finance where as 19% have not noticed any such material.
Data revealed that promises made by the company were fulfilled to 78%
respondents, where as 22% denied that Muthoot Finance had kept and
fulfilled promise made to them .

Marketing Strategy muthoot finance.docx

Marketing Strategy muthoot finance.docx

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