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Nisarg Patel (PGP/17/101) Sreekanth PS (PGP/17/115) Shreya Pandey (PGP/17/113) Kevin G Mathew (PGP/17/87) Partha P Chowdhury (PGP/17/99)

We take this opportunity to express our sincere gratitude to Mr. Anandakuttan B. Unnithan for providing us with an opportunity to work on concepts taught by him and undertake a project of such importance. Working under him has not only enriched us with more knowledge on marketing but has also imparted a maturity of thought and vision.

I. II. III. Introduction to the Money Remittance Market Demographic Study and Consumer Analysis Market study a. Company Analysis b. Competitive analysis c. Channel Analysis d. SWOT Analysis IV. Developing a Marketing Strategy a. Goals for 2014-16 b. Segmentation, Targeting and Positioning c. The 7Ps- The Marketing Mix for 2014-16 d. Customer Value Proposition V. VI. Conclusion References

A remittance is the act of transferring money by either a migrant working abroad temporarily or settled abroad permanently to his or her native country. With the total remittances amounting to $69 billion in 2012 and accounting for a substantial 3% of GDP in 2011, India remains the worlds largest inward remittance market. Around 40% of the international remittances flow to the three states of Kerala, Punjab and Goa, making them some of the most heavily international remittancedependent regions in the world. In fact, as per data from the Ministry of Finance, the combined spending of the state and central governments on education in India was less than the remittances received in 2004-05. Also, in the same year, the total government expenditure on health care was half of the remittance flow. Money can be transferred through several means today. In addition to conventional means such as visiting a bank branch and filling out the Remittance Instruction Form, there are Money Transfer Operators (MTOs) such as Western Union that have a network of agents across the globe. The remitter simply has to visit an MTO outlet and pay cash in the given foreign currency and the money is sent to any part of the globe where the given MTO agent is present. The receiver can then visit the MTO agent at his location and collect the money in local currency at the prevailing market exchange rate. This method is an example of a non-bank remittance channel. Electronic money transfer (through SWIFT for instance) has also grown into a huge business. Muthoot Finance was founded in 1939 by M. George Muthoot. In terms of loans portfolio, Muthoot Finance is the largest gold financing company in India. They provide Gold Loans, i.e. personal and business loans secured by gold jewelry. They primarily serve individuals who possess gold but could not get 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. Over 126 years old, the company serves more than 80,000 on a daily basis. Muthoot Money Transfer (MMT) came into existence as a service of Muthoot Finance in 2002. It made the real-time transfer of money a reality. It services more than 2 million transfers annually. MMT carries out its services in collaboration with associates such as Western Union, Money Gram, Xpress Money etc. The money transfer service promises quick and hassle-free service, accessibility to over 4100 above branches across India and no requirement of bank account for receiving upto Rs. 50,000.


The total market of international remittance coming to India is 70 Billion USD. This constitutes about 3% of Indias GDP. The main source of international remittance as far as India is concerned is the US and the Middle East. The graph below shows the country wide split up of remittance coming into India:

A study conducted by Tumbe Chinmay of Indian Institute of Management Bangalore on Remittances in India: Facts and Issues help us identify the distribution of the money remitted by the NRIs. As per the study 50% were classified as remittances towards family maintenance, 43% as local withdrawals/ redemptions from Non Resident Indian (NRI) deposits and another 6% were classified as personal gifts/ donations to charitable / religious institutions in India. This helps us in identifying a window of opportunity in terms of loans. Muthoot being a complete financial solution provider can utilize this extra money. This would be further discussed in the strategies part. As far as distribution of this USD 70 Billion among India states are concerned, Kerala leads the list followed by Maharashtra and Tamil Nadu. If money remittance is measured as a percentage of the GDP of Kerala, it tops this list with 32% contribution followed by Goa(21%) and Punjab(13%). Muthoot holds a strong market share in the money remittance business in India with a 50% market share. Their greatest competitors inside Kerala include Muthoot FinCorp, Kosamattom Finance and Manappuram Finance. As per the Muthoot financial report for the year 2011/12 we see that they have made a total of 19 Lakh transfers during the year. The total amount disbursed during this same period is INR 3,844 Crores. The projected target of Muthoot by the year 2016 is double this amount i.e. INR 7000 Crores.


The Muthoot Group is an Indian Family-owned conglomerate spanning over 16 diverse fields. It has a market capitalization of Rs. 6825 Cr (as of 31st March 2013). With gold jewelry worth 134 tonnes kept as security, Muthoot Finance has a net worth of Rs. 3736 Cr. The amount of inward remittances for personal purposes disbursed through MMT branches during 2012-13 was Rs. 3843 Cr. During the same period, Muthoot recorded a growth of 18% in revenues, rising from 4,549 Cr to 5,387 Cr. Net Profit grew at 13% with the branch network (4,082 branches) also witnessing an 11% growth, enabling an even wider reach across 21 states and 4 Union Territories. These achievements are significant considering the challenging operating environment that prevailed in recent times that brought about more stringent regulatory changes and saw sentiment-driven market speculations. Muthoot also enjoys a strong presence in under-served rural and semi-urban Indian markets with over 70% of the branches located in these regions. Muthoot has strategically opened its branches to enhance accessibility being sensitive to customer needs. Typically, a gold loan borrower would want maximum convenience when he/she thinks of taking a loan against this security. The person would certainly not desire to commute long distances with the gold or the cash in his/her possession. Muthoots currently follows both Above The Line (ATL) and Below The Line (BTL) strategies for advertising their products to the various target costumer groups. The most famous example of Below The Line strategy utilized by Muthoot is the one month long road show organized in the state of Punjab. Punjab being a market containing high NRI population is a promising opportunity for Muthoot Group. During our survey, we also found that Muthoot uses a similar strategy in promoting their products in Malabar through BTL campaigns in Mosques on Friday and through special offers during Onam, Ramzan etc.

The remittance market in India is serviced by commercial banks, non-bank MTOs, foreign exchange bureaus, cooperative banks, and India Post, as well as a wide variety of commercial entities acting as correspondent agents (subagents). Let us now compare the services provided by banking and MTOs in general. Banks offer remittance services which transfer money directly into bank accounts while Money Transfer Operators (MTOs) provide cash to the receivers. MTOs are used for less frequent and low value transactions while banks are used for larger transactions. Mostly white-collar workers use the services offered by bank while MTOs service is mostly used by blue-collar workers. The largest money remittance to India is through banks which comprises of 60-80% of total money remittance inflow. This also includes internet-based remittances. Banks have a transaction cycle of five days because they mostly use electronic cash transfers or transfers to bank account which is not very time efficient.

Here are a few interesting facts regarding the various competitors: 80% markets of market dominated by Western Uninon MoneyGram and UAE exchange are active players in MTO segment Agent is prohibited from becoming MTO for another agent Higher prices for remittance services because of the exclusivity Currently, the competitors provide mainly the following services: Wire Transfer: Wire transfer is from origin country to receivers country. This typically takes 24-96 hours, but it can also take place in real time. Banks provide mostly wire transfer services. Walk-in Services: This service provides direct cash to the receiver. They dont charge money to the receiver. This service is offered by Money Transfer Companies like Moneygram, Western Union etc. Online (Web) Money Transfer: This service can be utilized via debit/credit card or directly via direct account debit (Internet check). Banks and MTOs provide online money transfer service.

The competitors of MMT in Kerala mainly consist of Manappuram, Muthoot Fincorp and
Kosamattom Finance whereas those outside Kerala include banks, SKS Microfinance, Mahindra&Mahindra, Aditya Birla Money, Paypal, India post, Google Wallet etc. India Post also offers money remittance inflow to India through collaboration with WU and MoneyGram. This service is also safe, fast & reliable. It is an easy and quick way of transferring personal remittance to beneficiaries in India. Money can be received through various identified post offices from over 195 countries. The maximum amount that can be received at a time is USD 2500. The facility for receipt of Western Union Money Transfer is available in 7212 Post Offices and in case of MoneyGram the facility is available in 500 post offices.

Consumer- Consumer initiates a money remittance. Institution/Market Players- Enable the interaction between Operator systems and Banks. Operator- Operators utilise their networks to enable the consumer to initiate a remittance through the carrying of relevant data and providing the enabling technology on one or both ends. Transfer Channels: Channels offer way to transfer money back to India by depositing money in an NRI bank account .Financial Services Institutions enable remittances to be settled. In addition they provide compliance to financial regulations as required. Money Transfer Service Schemes Money Transfer Service Schemes calculates charges, complying with relevant regulatory requirements and provides various offers based on territory. Distribution providers Enable cash-in and cash- out to consumers. Cash remains the payment method of choice in receive markets.

Flow Chart:
Network at Remittance end

Institutions/Market Players MTOs

Transfer Channels Money Transfer Service schemes Overseas MTOs

Indian Agents/ Distribution Providers Authorized dealers Fully fledged money changer LATA approved travel agents Post offices


1. Increasing willingness from people to use reliable and efficient money remittance channels rather than the illegal and unreliable Hawala system. 2. Diverse business and revenue sources from varied geographies prevent Muthoot Finance from shocks in this part of the business. 3. Remittance carried out within seconds 4. Competition with Online Payment Systems avoided as many locations in Retail space 5. Ever Expanding Global markets with more and more people remitting money to India. 6. Established firms have an advantage over new entrants due to the high fixed costs.

1. Losses that can accrue from currency hedging. 2. Low working capital. 3. Turn-around-time (TAT) of transactions

4. Customer concentration in a particular nation/segment. 5. Varied transaction costs charged by different banks.

1. Collaboration with Domestic/International banks for profit sharing agreements. 2. Increasing Governments role in facilitating remittances from abroad by allowing migrant labours to open foreign currency account which are exempted from currency regulations. 3. Scope of inward remittances: Migrant labours from UP,Bihar,West Bengal, Odisha working all over the country. 4. Devaluing Rupee provides more incentives to workers abroad to remit more. 5. Tracking the customer behaviour and pushing other Muthoot Finance products to the identified people. 6. Tying up with local players like Alukkas who have set shops in the Middle east.

1. 2. 3. 4. 5. Strict Emigration norms being adopted by some countries like USA. Increasing number of layoffs of foreign employees due to the downturn in economy. Risk of playing into the hands of anti social elements: Security- a major concern. Crisis in the credit Market and vulnerability in the finance market Competition from players like Paypal and other electronic payment systems like Google Wallet. 6. Fluctuations in currency value 7. Increased Marketing expenses required for remaining competitive


A. GOALS FOR 2014-16
To increase the market share in existing strong markets like Kerala To expand market to a PAN-India level (expanding to other states like Andhra Pradesh, Maharashtra, Punjab) To double the total amount disbursed to INR 7000 Crores from INR 3500 Cr Intend to create new markets to unlock the unbanked growth potential and reach out to areas which have very limited access to organised financial channels


Segmentation can be done on the basis of the Income class (Low, lower-middle, middle, uppermiddle and Upper class), Geography (Different states in India) and skilled based (Technically skilled population or unskilled population).

The basic and most important target population of Muthoot would be low to mid income group from different parts of India who have bread-winners working as semi-low skilled migrants overseas. As far as Kerala market is concerned, the migrants include labourers, drivers working in the MiddleEast. As we move on to markets like Punjab we have the cab driver population in Canada and United States coming into play. The target population would be the dependants like parents and spouses of the migrants. The other category of people we could consider targeting would be the dependants of white collar job holders from different parts of India working overseas. Although they might be technically skilled it is not necessary that their relatives in India are technically skilled. Moreover the greatest strength of Money remittance lies in the fact that it is faster and transaction can be completed in less than 10 minutes. So this would be a method utilized in the case of emergency situations.

For white collar and blue collar Muthoot Money Transfer is the brand of Money remittance service that provides fast remittance of money transfer because of the wide network of over 4000+ branches. The strategy would be to attract the white collar group also into the customer base of Muthoot. This has been a market which has been relatively unexplored. Recent trend shows that the influx of high skilled population to the middle-east has considerably increased. This would provide a great opportunity for Muthoot as it already an established player as far as money transfer from Middle East is concerned. They can leverage upon the word of mouth strategy here. This will also add as a building block to their future expansion to United States and Europe market.

C. The 7 Ps- MARKETING MIX FOR 2014-16

1. Extending the valued services of MMT across more states such as Andhra Pradesh, Maharastra, Tamil Nadu.

2. We will integrate other Muthoot Finance products with the remittance money. MMT customers who are carrying out transactions over Rs 50,000 per year will be eligible for a 0.25% discount on interest rates on Muthoot Gold Loans.

The foothold over the Cash Cow Kerala market will be maintained and avenues for marketing in states like Andhra Pradesh, Tamil Nadu, Maharashtra will be targeted aggressively

1. Promotion policies like points based award system linked with the travel services branch Travelsmart will be introduced wherein customers will be awarded points for every amount of money remitted. Customers will be given incentives in the form of return airfares to Dubai/Sharjah/Abu Dhabi/Muscat on the basis of a minimum number of points earned. 2. Partnership with more reputed brands like Delhi Daredevils. To enter the North Indian market advertising in leading shows like Bigg Boss, Diya aur Baati Hum, Tarak Mehta ka Oolta Chasma in leading Hindi channels will be done. 3. A CSR initiative will be undertaken at a large scale in line with ITC. One rupee for every Rs 10,000 will go for the noble cause of upliftment of the Dalit groups in Tamilnadu. 4. We will also promote the brand using more of Below The Line strategies like more personalized campaigns during Ramzan, Id, Onam etc. 5. We will provide extended working hours and have agents who will deliver the cash at door steps of the customer thereby creating more convenience for the customer.

As mentioned earlier by collaboration with local players like Alukkas, we will try to improve our operating margins and provide our customers with competitive prices. Our aim would be to be the market leader in the market in terms of price and efficient services.

Physical Evidence:
We will customize our branches to be more interactive and user friendly. We will have hoardings and bill boards of our latest campaigns at strategic locations. We will include the existing celebrity brand ambassadors in our campaigns.

We will try to rope in as many local players as possible in our remittance network. We will have a pool of agents who will play a pivotal role in the last mile delivery of the cash for a marginal fee to people who request for the service. During our survey it was found that most of the Muthoot branches have internet connectivity issues. We will make sure that the bottlenecks related to connectivity are removed and the employees and customers do not face any inconvenience during their transaction.

Customer service will be our prime objective in this period. Through our last mile delivery system we intend to develop a long term relationship with our customers and make them part of the family. We also intend to launch special privileges for our star employees in the form of foreign vacations, bonuses etc.


To provide quick, simple and easy money transfer solutions
It is an easy way of transferring money for expatriates to their family back home, especially from those who are in Gulf countries. Muthoot with its wide network spread across Indias rural and semiurban areas makes money transfer an accessible service to everyone.Real-time transfer allows quicker delivery of the amount, which takes no more than 10 minutes. Muthoot believes in fulfilling aspirations through fruitful partnerships with customers. With a network of over 4300 branches all over India, Muthoot Finance Ltd. is capable of providing excellent money transfer services with the facility of an Internet connection. Irrespective of the service being used by the sender, the recipient can get the money from any of our branches. Muthoot has the largest branch network in India among NBFCs with 4,082 branches across 20 states, the national capital territory of Delhi and four Union Territories. The employees at all the branches are fluent in the local language and customs. The borrower will thus enjoy the benefits of familiarity.Muthoot enjoys a strong presence in under-served rural and semi-urban Indian markets (over 70% of the branches are located in these regions).Customer proximity creates an environment of trust, goodwill and reassurance. And one happy customer leads to another. Benefits of Using Services:Quick and hassle-free money transfers. No service charges to receive. RBI approved. No requirement of bank account for receiving up to Rs. 50,000. Service accessibility from over 4100 above branches across India.Can receive cash from any of the 4100 above branches that Muthoot operates. Since the money transfer process is real-time it does not take more than 10 minutes to complete. The money can be received within minutes of the sender remitting the amount to the services provider abroad All that is required to avail this service is a photo ID and the code of the transaction along with the name of the service no, all charges are paid by the sender only. Cash payout for Indian citizens will be restricted to Rs. 50,000 per transaction. Any amount greater than that will have to be paid by a/c payee cheques. Foreign tourists will receive their entire amount in cash. The maximum limit which is allowed by the RBI for one single transaction for an inward remittance is USD 2,500 or its equivalent. One can receive up to 30 money transfer remittances in one calendar year.

The project gave us a unique opportunity to explore the money remittance industry in India from the perspective of Muthoot Finance. We could infer from the study that money remittance market provides a great opportunity considering the exponential growth it had shown during the economic slowdown. The growth opportunity projected by Muthoot (INR 3500 Crores to INR 7000 Crores) also reveals the same. As per our analysis we believe that the difference between different money remittance service providers lie in providing unique customer value propositions. This would include providing tangible benefits in the form of low transaction costs as well as intangible benefits like good customer service. Moreover the focus should continue to be on integrating the core strength of Muthoot keeping in mind the boundary expansions which are essential for the growth of the organizations. The growth involves improving the reach within India as well as expanding unexplored markets. We have suggested some new promotional strategies and products which if implemented can augur well for MMTs future growth plans.

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