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Submitted in partial fulfillment of the requirements for the award of the degree
Bachelor of Business Administration (Banking and Insurance)



SESSION: 2015-2018



This is to certify that TUSHAR DIWAKAR of BBA (BANKING & INSURANCE) 3rd
SEMESTER has accomplished the project title “MARKETING STRATEGY OF AXIS
BANK” under my guidance and supervision.

The project report submitted has been found satisfactory for the partial fulfilment of the degree




I take this opportunity to express my profound gratitude and deep regards to my guide
MS. ARTI MALIK Associate Professor (Department of Business administration) for her
exemplary guidance, monitoring and constant encouragement throughout the course of my
thesis. The blessings, help and my guidance given by her time to time shall carry me a long way
in the journey of life on which I am about to embark.

I also take this opportunity to express a deep sense of gratitude for her cordial support, valuable
information and guidance, which helped me in completing this task through various stages.

I am obliged for the valuable information provided by her in her respective field. I am grateful
for her cooperation during the period of my MINOR PROJECT REPORT.

Lastly, I thank almighty, my parents, teachers and friends for their constant encouragement
without which this project would not be possible.













The first bank in India, though conservative, was established in 1786. From 1786
till today, the j o u r n e y o f I n d i a n B a n k i n g S y s t e m c a n b e s e g r e g a t e d i n t o
t h r e e d i s t i n c t p h a s e s . T h e y a r e a s mentioned below:
 PHASE I - Early phase from 1786 to 1969 of Indian Banks
 PHASE II - Nationalization of Indian Banks and up to 1991
 PHASE III - Indian Financial & Banking Sector Reforms after 1991.

The General Bank of India was set up in the year 1786. Nex t came Bank
o f H i n d u s t a n a n d Bengal Bank. The East India Company established Bank of
Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent
units and called it Presidency Banks. These three banks were amalgamated in 1920 and
Imperial Bank of India was established which started as private shareholders banks, mostly
Europeans shareholders. During the first phase the growth was very slow and banks also
experienced periodic failures between 1913 and 1948.
There were a p p r o x i m a t e l y 1 1 0 0 b a n k s , m o s t l y s m a l l . To streamline the
f u n c t i o n i n g a n d a c t i v i t i e s o f commercial banks, the Government of India came
up with The Banking Companies Act, 1949which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No.23 of 1965).
Reserve Bank of India was vested with extensive powers for the supervision of
banking in India as the C entral Banking Authority. D uring those da y’s
p u b l i c h a s l e s s e r confidence in the banks. As an aftermath deposit mobilization was slow.
Abreast of it the savings bank facility provided by the Postal department was comparatively
safer. Moreover, funds were largely given to the traders.

Government took major steps in this Indian Banking Sector Reform after independence. In 1955,
it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially
in rural and semi-urban areas. Second phase of nationalization Indian Banking Sector Reform
was carried out in 1980 with seven more banks. This step brought 80% of the banking segment
in India under Government ownership. The following are the steps taken by the Government of
India to Regulate Banking Institutions in the Country:
1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore. After the nationalization of
banks, the branches of the public sector bank India rose to approximately 800% in deposits and
advances took a huge jump by 11,000%. Banking in the sunshine of Government ownership gave
the public implicit faith and immense confidence about the sustainability of these institutions.


This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his
name which worked for the liberalization of banking practices. The country is flooded with
foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to
customers. Phone banking and net banking is introduced. The entire system became more
convenient and swift. The financial system of India has shown a great deal of resilience. It is
sheltered from any crisis triggered by any external macroeconomics shock as other East Asian
Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are
high, the capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.


Reserve bank of India (central

bank & supreme monetary
authority of the country)

Scheduled banks

Co-operatives bank
Commercial Banks

Public sector Private Foreign Regional Rural

(27) sector (25) banks in Banks (357) Urban
India (39) Cooperative
Banks (53)

State Cooperative
Banks (31)
Old Private Banks banks (19)

New Private
State Bank of India Banks (8)
& its Associates (8)


 To find out whether marketing strategies used by banks really helps in increasing sales by
 To find out customer awareness regarding banking products.
 To find out advertisement effectiveness.
 To find out branding effectiveness.

The project consists of the data which is collected from various sources. Normally there are two
sources of collecting data i.e.
 Primary source
 Secondary source

To work on this project the secondary data was taken from the different published articles,
books, journals, and the relevant websites. The library of the college was of great help. In order
to have a proper understanding of the service quality of the bank a depth study was done from
the various sources such as books a lot of data is also collected from the official website of the
bank and the articles from various search engines like Google, yahoo search, and


1. Figures keep on changing from time to time.

2. Data may be outdated.
3. Since the data is entirely secondary, its authenticity and accuracy regarding
facts and figures shall remain doubtful.
4. The analysis and interpretation is based on secondary data contained in
published annual reports of axis bank for the study period.
5. The time span over which the study is conducted is rather limited.


Axis Bank

Type Public

Traded as BSE: 532215


Industry Banking, Financial services

Founded 1993 (as UTI Bank)

Headquarters Mumbai, Maharashtra, India

Key people Shikha Sharma (MD & CEO) Sanjiv Misra (Chairman)

Products Credit cards, consumer banking, corporate banking, finance and insurance, investment
banking, mortgage loans, private banking, private equity, wealth management

Revenue ₹414.0925 billion(US$6.2 billion) (2016)[2]

Net income ₹83.5759 billion(US$1.2 billion) (2016)[2]

Total assets ₹5.25468 trillion(US$78 billion) (2016)[3]

Total equity ₹4.7657 billion (US$71 million)s

Number of 56,084 (March 2016)[4]




Axis Bank India, the first bank to begin operations as new private banks in 1994 after the
Government of India allowed new private banks to be established. Axis Bank was jointly
promoted by the Administrator of the specified undertaking of the
 Unit Trust of India (UTI-I)
 Life Insurance Corporation of India (LIC)
 General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., The New India Assurance
Company, The Oriental Insurance Corporation and United Insurance Company Ltd. Axis Bank
in India today is capitalized with Rs. 43,283.77 Crores. It has more than 1281 branch offices and
Extension Counters in the country with over 6270 Axis Bank ATM proving to be one of the
largest ATM networks in the country. This is the first bank in India to offer the AT-PAR Cheque
facility, without any charges, to all its Savings Bank customers in all the places across the
country where it has presence. With the AT PAR cheque facility, customers can make cheque
payments to any beneficiary at any of its existence place. The ceiling per instrument is Rs.
50,000/-.The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling
variants of the International Travel Currency Card. The Travel Currency Card is a signature
based pre-paid travel card which enables traveller’s global access to their money in local
currency of the visiting country in a safe and convenient way. The Bank has strengths in both
retail and corporate banking and is committed to adopting the best industry practices
internationally in order to achieve excellence.
It is has a diversified presence across business and product lines with corporate Advances
constituting ~57% of its total loan book, retail ~20%, SME ~14% and agriculture ~9%, as on
December 31, 2010.
The bank was formerly known as UTI Bank; it changed its name to Axis Bank in July 2007.
The bank has overseas offices at Singapore, Dubai and Hong Kong and a representative office in


UTI was established in 1964 by an Act of Parliament; neither did the Government of India own it
nor contributes any capital. The RBI was asked to contribute one-half of its initial capital of Rs 5
crore, and given the mandate of running the UTI in the interest of the unit-holders. The State
Bank of India and the Life Insurance Corporation contributed 15 per cent of the capital each, and
the rest was contributed by scheduled commercial banks which were not nationalized then. This
kind of structure for a unit trust is not found anywhere else in the world. Again, unlike other unit
trusts and mutual funds, the UTI was not created to earn profits. In the course of nearly four
decades of its existence, it (the UTI) has succeeded phenomenally in achieving its objective and
has the largest share anywhere in the world of the domestic mutual fund industry.'' The
emergence of a "foreign expert" during the setting up of the UTI makes an interesting story. The
announcement by the then Finance Minister that the Government of India was contemplating the
establishment of a unit trust caught the eye of Mr. George Woods, the then President of the
World Bank. Mr. Woods took a great deal of interest in the Indian financial system, as he was
one of the principal architects of the ICICI, in which his bank, First Boston Corporation Bank,
had a sizeable shareholding. Mr. Woods offered, through Mr. B.K. Nehru, who was India's
Executive Director on the World Bank, the services of an expert. The Centre jumped at the offer,
and asked the RBI to hold up the finalization of the unit trust proposals till the expert visited
India. The only point Mr. Sullivan made was that the provision to limit the ownership of units to
individuals might result in unnecessarily restricting the market for units. While making this
point, he had in mind the practice in the US, where small pension funds are an important class of
customers for the unit trusts. The Centre accepted the foreign expert's suggestion, and the
necessary amendments were made in the draft Bill. Thus, began corporate investment in the UTI,
which received a boost from the tax concession given by the government in the 1990-91 Budget.
According to this concession, the dividends received by a company from investments in other
companies, including the UTI, were completely exempt from corporate income tax, and provided
the dividends declared by the investing company were higher than the dividends received. The
result was a phenomenal increase in corporate investment which accounted for 57 per cent of the
total capital under US-64 scheme. Because of high liquidity the corporate sector used the UTI to
park its liquid funds. This added to the volatility of the UTI funds.

The corporate lobby which perhaps subtly opposed the establishment of the UTI in the public
sector made use of it for its own benefits later. The Government-RBI power game started with
the finalization of the UTI charter itself. The RBI draft of the UTI charter stipulated that the
Chairman will be nominated by it, and one more nominee would be on the Board of Trustees.
While finalizing the draft Bill, the Centre changed this stipulation. The Chairman was to be
nominated by the Government, albeit in consultation with RBI. Although the appointment was to
be made in consultation with the Reserve Bank, the Government could appoint a person of its
choice as Chairman even if the Bank did not approve of him.

Board of Directors
The members of the Board are

Dr. Sanjiv Misra Chairman

Smt. Shikha Sharma Managing Director & CEO

Shri V Srinivasan Deputy Managing Director

Shri V. R. Kaundinya Director

Shri Prasad Menon Director

Prof. Samir K Barua Director

Shri Som Mittal Director

Shri Rohit Bhagat Director

Smt. Usha Sangwan Director

Shri S Vishvanathan Director

Shri Rakesh Makhija Director

Smt. Ketaki Bhagwati Director

Shri B. Babu Rao Director

Shareholding Pattern
POSITION AS ON 28.10.2016


1 SUUTI 274840905 11.50









1 INDIAN FIS / BANKS / NBFC 2251411 0.09

2 INDIAN MFS 155777343 6.52


4 INDIAN RESIDENTS 187693632 7.85

5 INSURANCE GROUP 73160274 3.06



1 FIIS/FPI/QFI 1148187273 48.03

2 FDI (GDR) 98250830 4.11

3 FOREIGN BODIES - DR 2132802 0.09



6 NRIS 6051582 0.25


TOTAL A + B + C 2390546238 100.00

 Customer Service and Product Innovation tuned to diverse needs of individual and
corporate clientele.
 Continuous technology up gradation while maintaining human values.
 Progressive globalization and achieving international standards.
 Efficiency and effectiveness built on ethical practices.

 Customer Satisfaction through
 Providing quality service effectively and efficiently
 "Smile, it enhances your face value" is a service quality stressed on
 Periodic Customer Service Audits
 Maximization of Stakeholder value
 Success through Teamwork, Integrity and People


Axis Bank wants to achieve following marketing objectives by the end of the year 2011.
 To get the market capitalization 500 Crore
 To get the 200 Crore retail investment
 To get 125 Crore Corporate investments
 To get the 175 Crore Capital investments

Once the marketing strategy is developed, there is a "Seven P Formula" that should be used to
continually evaluate and re-evaluate your business activities. These seven are:
 Product,
 Price
 Promotion
 Place
 Process
 Positioning
People, as products, markets, customers and needs change rapidly, company must continually
revisit these seven Ps to make sure you're on track and achieving the maximum results possible
for you in today's marketplace.

To begin with, develop the habit of looking at your product as though you were an outside
marketing consultant brought in to help your company decide whether or not it's in the right
business at this time. Ask critical questions such as, "Is the current product or service, or mix of
products and services, appropriate and suitable for the market and the customers of today?"
Develop a habit of assessing your business honestly and asking,
 Are these the right products or services for our customers today?
 Compared to your competitors, is your product or service superior in some
significant way to anything else available? If so, what is it? If not, could you
develop an area of superiority? Should you be offering this product or service at
all in the current market place?
 Product variety, quality and its features.
 Is there a market for the service on offer?
 Is the market growing or shrinking?
 Is the service new or established?
 The competition prevailing in the market for the service on offer?
 The USP of the product.
Products and Services on offered by AXIS Bank

 Accounts:  Forex
 Savings Account  Forex Card
 Salary Account  International Fund Transfer
 Current Account  Online Fund Transfer
 Safe Deposit Locker  Foreign Currency Cash
 Safe Custody  Foreign Currency Demand
 National Pension System Drafts
 Pension Disbursement  Foreign Currency Travellers
Account Cheques
 Sukanya Samriddhi Yojana
 Loans
 Deposits  Home Loan
 Fixed Deposits  Personal Loan
 Recurring Deposits  Car Loan
 Tax Saver Fixed Deposit  Loan Against Property
 Fixed Deposit Plus  Gold Loan
 Encash 24 Flexi Deposit  Loan Against Securities
 Loan Against Fixed Deposits
 Cards  Loan Against Shares

 Credit Cards  Commercial Vehicle And

 Debit Cards Construction Equipment

 Pre-Paid Cards
 Commercial Credit Cards
 Commercial Debit Cards

 Investments  Insurance
 Gold Mohurs  Life Insurance
 Silver Mohurs  General Insurance
 AxisDirect  Health Insurance
 Mutual Funds  Pradhan Mantri Suraksha
 Demat Account Bima Yojana
 8% Savings Bonds  Pradhan Mantri Jeevan Jyoti
 IPOSmart Bima Yojana
 Public Provident Fund  Bima Uphaar Yojna
 Atal Pension Yojana



The second P in the formula is price. Develop the habit of continually examining and re-
examining the prices of the products and services you sell to make sure they're still appropriate
to the realities of the current market. Sometimes you need to lower your prices. At other times, it
may be appropriate to raise your prices. Many companies have found that the profitability of
certain products or services doesn't justify the amount of effort and resources that go into
producing them. By raising their prices, they may lose a percentage of their customers, but the
remaining percentage generates a profit on every sale. Could this be appropriate for you?
Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your
price over a series of months or years, you can sell far more than you are today, and the interest
you can charge will more than make up for the delay in cash receipts. Sometimes you can
combine products and services together with special offers and special promotions. Sometimes
you can include free additional items that cost you very little to produce but make your prices
appear far more attractive to your customers. In business, as in nature, whenever you experience
resistance or frustration in any part of your sales or marketing activities, be open to revisiting
that area. Be open to the possibility that your current pricing structure is not ideal for the current
market. Be open to the need to revise your prices, if necessary, to remain competitive, to survive
and thrive in a fast-changing market place.
AXIS bank has developed innovative strategies against its competitors with respect to pricing by
use of technology. The use of technology is the strategic differentiator for AXIS bank that helps
in cost minimization and creating efficiency for the customer. The creation of centralized
processing system linking all its branches has been a major strategic move in this regard.

The pricing mechanism and features of various HDFC products are as follows: Home Loans:

Floating rates:
 For loan of up to five years for amounts between Rs. one lakh and Rs. 50 lakh is at9.25 per
cent (9 per cent).
 The rate for loans of 5 years and above up to 10 years is now at 9.75 per cent (9.50 per cent).
 The interest rate for above ten years now stands at 10.25 per cent (10 per cent)

Description of Charges Regular Savings Account
Minimum Average Quarterly Rs 5000 (urban),
Balance Rs 2500(Semi Urban),
Rs 1000 (Rural branch),
Rs 500 (student account)
Charges on non-maintenance thereof Rs 750 per quarter(urban & semi urban)
Rs 500 (Rural branch),
Rs 250 (student account)
Cheque Book, Pass Book Issuance Free

Account Statements Free

Phone banking and Net banking Free


The third habit in marketing and sales is to think in terms of promotion all the time. Promotion
includes all the ways you tell your customers about your products or services and how you then
market and sell to them. Small changes in the way you promote and sell your products can lead
to dramatic changes in your results. Even small changes in your advertising can lead
immediately to higher sales.
AXIS bank has devised an aggressive promotional strategy through its diversified distribution
mix which includes tied agencies and alternate channels like banks, brokers, telemarketing,
direct sales force, internet advertising.
Some of the promotional activities undertaken are:
 Cross Selling exercises
 Organizing school level painting competitions in order to create awareness about the
environmental concerns and the wild life to promote kids advantage account.
 Wheels of fortune - This promo are targeted at all those customers who avail a personal
loan, car or a two wheeler loan. There will be lucky draw at the end of the promo and the
winners would get exotic prizes.
 Personalized promos by sending mailers about various products on offer to all those who
come in contact during the mass promotion strategies.
The promotional strategies are carried out with an objective of positioning AXIS bank as a one
stop financial super market. The focus of the promotions are not just confined to acquisition of
new products but also extends to creating product awareness, enhancing usage, and also provide
value add to the customers for their faith and loyalty. These promotions are scientifically
designed based on data analysis and data mining in order to have maximum impact on the target


The fourth P in the marketing mix is the place where your product or service is actually sold.
You can sell your product in many different places. Some companies use direct selling, sending
their salespeople out to personally meet and talk with the prospect. Some sell by telemarketing.
Some sell through catalogues or mail order. Many companies use a combination of one or more
of these methods. It refers to those activities of the company that makes the product available to
target consumers. It includes geographic spread, distribution channels, dealer ships that facilitate
network establishment. Axis bank is widely spread in India and its core banking operations has
huge network–

 1281 branches and extension counters foreign offices – in Singapore, Hong Kong,
Shanghai and Dubai
 6270 ATMs reaches out to 34 states and union territories across the country
AXIS bank owns a wholly owned distribution channel with dedicated workforce, thereby
lowering the operating costs. It uses its network base to good effect to sell customized


The fifth element in the marketing mix is the process. Develop the habit of standing back and
looking at every visual element in the process or service through the eyes of a critical prospect.
Remember, people from their first impression about you within the first 30 seconds of seeing you
or some element of your company. Small improvements in the process or external appearance of
your product or service can often lead to completely different reactions from your customers.
With regard to the process of your company, your product or service, you should think in terms
of everything that the customer sees from the first moment of contact with your company all the
way through the purchasing process.
Process refers to the way your product or service appears from the outside. Packaging refers to
your people and how they dress and groom. It refers to your offices, your waiting rooms, your
brochures, your correspondence and every single visual element about your company.
Everything counts. Everything helps or hurts. Everything affects your customer's confidence
about dealing with you.

The next P is positioning, the habit of thinking continually about how you are positioned in the
hearts and minds of your customers.
 How do people think and talk about you when you're not present?
 How do people think and talk about your company?
 What positioning do you have in your market, in terms of the specific words people use
when they describe you and your offerings to others?
AXIS Bank has positioned its branches in all the strategic position so that it is easily accessible
to maximum customer. It has also come up with some phone banking centre and centralized
collection and payment hub.

The Bank’s Centralized Phone Banking Centre provides customers across the country Access to
the Bank over the phone, handling multiple queries in about 7000 calls per day.


The Bank’s Centralized Collection and Payment Hub (CCPH) manages the entire collection and
payment activity under the Bank’s Cash Management Services (CMS) across the country,
handling on an average about Rs.5000 crores per month on the collection front and aboutRs.1500
crores per month on the payment front.


The final P of the marketing mix is people. Develop the habit of thinking in terms of the people
inside and outside of your business who are responsible for every element of your sales and
marketing strategy and activities. It's amazing how many entrepreneurs and businesspeople will
work extremely hard to think through every element of the marketing strategy and the marketing
mix, and then pay little attention to the fact that every single decision and policy has to be carried
out by a specific person, in a specific way. Your ability to select, recruit, hire and retain the
proper people, with the skills and abilities to do the job you need to have done, is more important
than everything else put together. An essential ingredient to any service provision is the use of
appropriate staff and people. Recruiting the right staff and training them appropriately in the
delivery of service is essential if the organization has to obtain competitive advantage. AXIS
bank values its human resources very highly and is on a constant endeavour to continuously
develop its human resources by laying strong emphasis on training development. It possesses a
highly motivated team of professionals and has the lowest employee turnover rate in the

In early 1950's most of the markets were choking with surplus products on offer, defying the
theory "the best quality will always sell". The emergence of Branding as a value in offering has
kept many organizations leaders, and in survival. Branding is termed as a part of offering,
created in the mind of customer and consumer of superior values that he or she perceives and
ready to pay for. The brand can be associated with superior product, superior services, and
superior sales after services, or easy access. In today's era with increasing competition, is that not
important enough to revisit Brand as a marketing offering (Product or Service).

UTI has officially announced the change of its name to ‘Axis Bank’. The awareness campaign
titled ‘UTI Bank is now Axis Bank; everything is the same except the name’, has been created by
O&M and is the brainchild of Sumanto Chattopadhyay.
The decision to re-brand the bank emanated from the need to move out of a scenario of brand
confusion that is created by several shareholder-unrelated entities using the UTI brand. On the
creative point of view, the change of name from UTI Bank to Axis Bank is precisely just a name
change. Everything else about the brand remains the same. Axis is a strong name with an
international aura to it. It is very much in keeping with UTI’s success story in the private banking

The logo design of Axis Bank is based on the letter ‘A’. It is a contemporary, universal and solid
design that retains the burgundy color of the original UTI logo as a link to its heritage

On the marketing initiatives, a multimedia campaign was unfolded on August 1 that will go on
for the next few weeks. It seeks to reassure customers that the change of name will in no way
affect the services offered by the bank. On the thought process the creative platform adopted for
the name change is based primarily on twins -- siblings whose names are different, but are
identical in every other way. This campaign will run on

 Television
 Radio and other 360-degree media.
 Some interesting innovations are planned in the print medium. On radio, the name change
is being expressed in a slightly different manner, in keeping with the nature of the

Growth Prospects of Axis

Over the last five years, the CAGR for loan growth for the banking industry has been 25-26 per
cent; for Axis Bank it has been above 40 per cent.
Nonetheless, the bank is still expected to grow its loan portfolio at 1.5-1.7x the industry average.
In FY09 its advances grew at the rate of 37.5 per cent.
In FY10 they are expected to grow at the rate of 27-28 per cent and in FY11 at 25 per cent.
For the banking industry as a whole, the loan book is expected to grow at 18 per cent in FY10 and
16 per cent in FY11.

2.5 Awards and recognitions (2016)

 Axis Bank wins 'Best Loyalty Program of the year' for the second year in a row,
9th Loyalty Awards 2016
 Axis Bank has won the 'Best Performing Private Bank' award at the Financial
Advisor Awards 2015-16
 Axis Bank wins 'Best Reward Program of the year' for the second year in a row,
9th Loyalty Awards 2016
 Axis Bank wins the 'Affinity/Bank Partner of the year' - at the Asia Trusted Life
Agents & Advisers Awards 2016, by Asia Insurance Review.
 Best Domestic Bank in India- Asiamoney Best Domestic Bank awards

Vision 2015
To be the preferred financial solutions provider excelling in customer delivery through insight,
empowered employees and smart use of technology

Review of Literature and Conceptual


Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable competitive

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. 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 involves careful scanning of the internal and external environments which are
summarized in a SWOT analysis. Internal environmental factors include the marketing mix, 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.





3.21 Market dominance strategies

These calculations of market dominance yield quantitative metrics, but most business strategists
categorize market dominance strategies in qualitative terms. Typically there are four types of
market dominance strategies that a marketer will consider: There are market leader, market
challenger, market follower, and market nicher.

Market leader

The market leader is dominant in its industry. It has substantial market share and often extensive
distribution arrangements with retailers. It typically is the industry leader in developing
innovative new business models and new products (although not always). It tends to be on the
cutting edge of new technologies and new production processes. It sometimes has some market

power in determining either price or output. Of the four dominance strategies, it has the most
flexibility in crafting strategy. There are few options not open to it. However it is in a very
visible position and can be the target of competitive threats and government anti-combines

Research in experience curve effects and the PIMs study during the 1970s concluded that market
leadership was the most profitable strategy in most industries. It was claimed that if you cannot
get enough market share to be a major player, you should get out of that business and concentrate
your resources where you can take advantage of experience curve effects and economies of
scale, and thereby gain dominant market share. Today we recognize that other less dominant
strategies can also be effective.

The main options available to market leaders are:

 Expand the total market by finding

o new users of the product
o new uses of the product
o more usage on each use occasion
 Protect your existing market share by:
o developing new product ideas
o improve customer service
o improve distribution effectiveness
o reduce costs
 Expand your market share:
o by targeting one or more competitor
o without being noticed by government regulators

Market challenger

A market challenger is a firm in a strong, but not dominant position that is following an
aggressive strategy of trying to gain market share. It typically targets the industry leader (for
example, Pepsi targets Coke), but it could also target smaller, more vulnerable competitors. The
fundamental principles involved are:

 Assess the strength of the target competitor. Consider the amount of support that the
target might muster from allies.
 Choose only one target at a time.
 Find a weakness in the targets position. Attack at this point. Consider how long it will
take for the target to realign their resources so as to reinforce this weak spot.
 Launch the attack on as narrow a front as possible. Whereas a defender must defend all
their borders, an attacker has the advantage of being able to concentrate their forces at
one place.
 Launch the attack quickly, then consolidate.

Some of the options open to a market challenger are:

 price discounts or price cutting

 line extensions
 introduce new products
 reduce product quality
 increase product quality
 improve service
 change distribution
 cost reductions
 intensify promotional activity

Market follower

A market follower is a firm in a strong, but not dominant position that is content to stay at that
position. The rationale is that by developing strategies that are parallel to those of the market
leader, they will gain much of the market from the leader while being exposed to very little risk.
This play it safe strategy is how Burger King retains its position behind McDonalds. The
advantages of this strategy are:

 no expensive R&D failures

 no risk of bad business model
 best practices are already established

 able to capitalize on the promotional activities of the market leader
 no risk of government anti-combines actions
 minimal risk of competitive attacks
 don’t waste money in a head-on battle with the market leader

Market nicher

In this niche strategy the firm concentrates on a select few target markets. It is also called a focus
strategy. It is hoped that by focusing ones marketing efforts on one or two narrow market
segments and tailoring your marketing mix to these specialized markets, you can better meet the
needs of that target market. The niche should be large enough to be profitable, but small enough
to be ignored by the major industry players. Profit margins are emphasized rather than revenue or
market share. The firm typically looks to gain a competitive advantage through effectiveness
rather than efficiency. It is most suitable for relatively small firms and has much in common with
guerrilla marketing warfare strategies. The most successful nichers tend to have the following

 They tend to be in high value added industries and are able to obtain high margins.
 They tend to be highly focussed on a specific market segment.
 They tend to market high end products or services, and are able to use a premium pricing
 They tend to keep their operating expenses down by spending less on R&D, advertising,
and personal selling.

3.22 Porter's Generic Strategies

Designed by Michael Porter in 1979, Porter’s Generic Strategies is a frameworks used to outline
the three major strategic options open to organizations that wish to achieve a sustainable
competitive advantage. Each of the three options needs to be considered within the context of
two aspects of the competitive environment. Firstly, the sources of competitive advantage which
establish whether the products are differentiated in any way, or if they are the lowest cost
producer in the industry. Secondly, the competitive scope of the market determines if the
company targets a wide market or if it focuses on a very narrow niche market.

The three generic strategies which this creates are cost leadership, differentiation and focus
represented diagrammatically as shown in Figure above.

Cost leader
The cost leader in any market gains competitive advantage from being able to produce products
at the lowest cost. To achieve success by using this strategy, the company has to be the cost
leader, rather than one of the firms trying to achieve the position. Some ways to obtain these low
costs include unique access to sources of low cost materials, outsourcing, efficient manufacturing
and avoiding supplementary costs. Usually low cost companies adopt this principle for all their
activities and departments. A low cost producer usually finds and exploits all sources of cost
advantage, including selling a standard, no frills product.

Differentiation strategy
A differentiation strategy focuses on designing a product or service with unique qualities that
customers perceive as being better than the products of the competition. This allows companies
to desensitize prices and to focus on those features which generate value. This leads to higher
prices as creating a competitive advantage requires additional costs which the company will hope
to recover through higher prices. Additionally, producers need to segment markets in order to
target goods and services for each specific segment, thus generating a higher price than the
average. The downside to this strategy is that these unique features will eventually be copied by
the competition or customers could change their tastes and options, so there is a constant
pressure to innovate and continuously improve.

Focus strategy
The focus strategy applies to a narrow segment that is concentrated neither on cost advantage
nor on differentiation. Usually companies using this strategy have a reduced size, focus all their
resources and efforts on a narrow and well defined segment of market, and have the advantage of
a high degree of customer loyalty. They can therefore pass higher costs on to their customers
because close substitute products or services are less likely to exist. Disadvantages are that these
small specialized niches may disappear over the longer term and it is also possible that some
broad market cost-leader companies start imitating or adapting their products in order to compete

Porter also mentions that in order to achieve success on a long term, a company must select only
one of these generic strategies. Otherwise, there is the danger of trying all and achieving none,
thus creating a confusing image and remaining ”stuck in the middle”, without being able to
create a true competitive advantage.

3.23 Innovation Strategies

Innovation strategies deals with the firm's rate of the new product development and business
model innovation. It asks whether the company is on the cutting edge of technology and business
innovation. There are three types:

Market Pioneers are known to often open a new market to consumers based off a major
innovation. They emphasis these product developments, and in a significant amount of cases,
studies have shown that early entrants – or pioneers – into a market have serious market-share
advantages above all those who enter later. Pioneers have the first-mover advantage, and in order
to have this advantage, business’ must ensure they have at least one or more of three primary
sources: Technological Leadership, Preemption of Assets or Buyer Switching Costs.
Technological Leadership means gaining an advantage through either Research and
Development or the “learning curve”. This lets a business use the research and development
stage as a key point of selling due to primary research of a new or developed product.
Preemption of Assets can help gain an advantage through acquiring scarce assets within a certain
market, allowing the first-mover to be able to have control of existing assets rather than those
that are created through new technology. Thus allowing pre-existing information to be used and
a lower risk when first entering a new market. By being a first entrant, it is easy to avoid higher
switching costs compared to later entrants. For example, those who enter later would have to
invest more expenditure in order to encourage customers away from early entrants). However,
while Market Pioneers may have the “highest probability of engaging in product development”
and lower switching costs, to have the first-mover advantage, it can be more expensive due to
product innovation being more costly than product imitation. It has been found that while
Pioneers in both consumer goods and industrial markets have gained “significant sales
advantages”, they incur larger disadvantages cost-wise.

Close Followers

Being a Market Pioneer can more often than not, attract entrepreneurs and/or investors
depending on the benefits of the market. If there is an upside potential and the ability to have a
stable market share, many businesses would start to follow in the footsteps of these pioneers.
These are more commonly known as Close Followers. These entrants into the market can also be
seen as challengers to the Market Pioneers and the Late Followers. This is because early
followers are more than likely to invest a significant amount in Product Research and
Development than later entrants. By doing this, it allows businesses to find weaknesses in the
products produced before, thus leading to improvements and expansion on the aforementioned
product. Therefore, it could also lead to customer preference, which is essential in market
success. Due to the nature of early followers and the research time being later than Market
Pioneers, different development strategies are used as opposed to those who entered the market
in the beginning, and the same is applied to those who are Late Followers in the market. By
having a different strategy, it allows the followers to create their own unique selling point and
perhaps target a different audience in comparison to that of the Market Pioneers. Early following
Into a market can often be encouraged by an established business’ product that is “threatened or
has industry-specific supporting assets”.

Late Followers

Those who follow after the Close Followers are known as the Late Entrants. While being a Late
Entrant can seem very daunting, there are some perks to being a latecomer. For example, Late
Entrants have the ability to learn from those who are already in the market or have previously
entered. Late Followers have the advantage of learning from their early competitors and
improving the benefits or reducing the total costs. This allows them to create a strategy that
could essentially mean gaining market share and most importantly, staying in the market. In
addition to this, markets evolve, leading to consumers wanting improvements and advancements
on products. Late Followers have the advantage of catching the shifts in customer needs and

wants towards the products. When bearing in mind customer preference, customer value has a
significant influence. Customer value means taking into account the investment of customers as
well as the brand or product. It is created through the “perceptions of benefits” and the “total cost
of ownership”. On the other hand, if the needs and wants of consumers have only slightly
altered, Late Followers could have a cost advantage over early entrants due to the use of product
imitation. However, if a business if switching markets, this could take the cost advantage away
due to the expense of changing markets for the business. Late Entry into a market does not
necessarily mean there is a disadvantage when it comes to market share, it depends on how the
marketing mix is adopted and the performance of the business. If the marketing mix is not used
correctly – despite the entrant time – the business will gain little to no advantages, potentially
missing out on a significant opportunity.

3.24 Growth Strategies

Growth of a business is critical for business success, so using strategies such as horizontal
integration, vertical integration, diversification and intensification will all benefit a business’s
growth, be it long term or short term.

Horizontal Integration

Horizontal integration is the degree at which employees are specialized and integrated in. There
are low horizontal levels which show that employees are specialized in their work and high
horizontal levels which show that employees are integrated in their work. A businesses
horizontal boundaries can determine the quantities and changes of products that are produced by
two or more businesses that have been merged producing the same product as one business.
Some benefits of the horizontal integration strategy is that it is good for fast changing work
environments as well as providing a broad knowledge base for the business and employees. High
levels of horizontal integration leads to high levels of communication within the business.
Another benefit of using this strategy is that it leads to a larger market for merged businesses,
and it is easier to build good reputations for a business when using this strategy. A disadvantage
of using the horizontal integration strategy is that this limits and restricts the field of interest that

the business is expanding the new products into. Horizontal integration can affect a business's
reputation, especially after a merge has happened between two or more businesses. There are
three main benefits to a business's reputation after a merge. A larger business helps the
reputation and increases the severity of the punishment. As well as the merge of information
after a merge has happened, this increases the knowledge of the business and marketing area they
are focused on. The last benefit is more opportunities for deviation to occur in merged businesses
rather than independent businesses.

Vertical Integration

Vertical integration is when business is expanded through the vertical production line on one
business. An example of a vertically integrated business could be Apple. Apple owns all their
own software, hardware, designs and operating systems instead of relying on other businesses to
supply these. By having a highly vertically integrated business this creates different economies
therefore creating a positive performance for the business. Vertical integration is seen as a
business controlling the inputs of supplies and outputs of products as well as the distribution of
the final product. Some benefits of using a Vertical integration strategy is that costs may be
reduced because of the reducing transaction costs which include finding, selling, monitoring,
contracting and negotiating with other firms. Also by decreasing outside businesses input it will
increase the efficient use of inputs into the business. Another benefit of vertical integration is that
it improves the exchange if information through the different stages of the production line. Some
competitive advantages could include; avoiding foreclosures, improving the business marketing
intelligence, and opens up opportunities to create different products for the market. Some
disadvantages of using a Vertical Integration Strategy include the internal costs for the business
and the need for overhead costs. Also if the business is not well organized and fully equipped
and prepared the business will struggle using this strategy. There are also competitive
disadvantages as well, which include; creates barriers for the business, and loses access to
information from suppliers and distributors.


Diversification is an area included in the Ansoff Matrix strategy, where the most risk for a
business is situated. This is due to the use of a new product being introduced to a new market, so
there are no already existing target markets or competition. There are two types of
diversification, vertical and horizontal. Horizontal diversification is when a new product is
introduced but doesn’t contribute to the already existing product line. Meaning horizontal
diversification focuses more on product that the business has knowledge about, whereas vertical
diversification focuses more on the introduction of new product onto new markets, where the
business could have less knowledge of the new market. A benefit of horizontal diversification is
that it is an open platform for a business to expand and build away from the already existing
market. A disadvantage of using a Diversification strategy is that the benefits could take a while
to start showing, which could lead the business to believing that the strategy doesn’t work.
Another disadvantage or risk is, it has been shown that using the horizontal diversification
method has become harmful for stock value, but using the vertical diversification had the best

Intensification Strategies

Intensification growth strategies involve achieving greater sales through increased market share.
Intensification strategies can be separated into three separate types. Market penetration strategy
is a type of intensification strategy that involves increasing market share in existing markets.
Market development strategy involves entering new markets using existing products. And
Product development strategy involves introducing new products to existing markets with the
possible long term benefit of being able to provide the new products into new markets.

3.25 Marketing warfare strategies

Marketing warfare strategies are a type of strategies, used in business and marketing, that try to
draw parallels between business and warfare, and then apply the principles of military strategy to
business situations, with competing firms considered as analogous to sides in a military conflict,
and market share considered as analogous to the territory which is being fought over. It is argued
that, in mature, low-growth markets, and when real GDP growth is negative or low, business
operates as a zero-sum game. One person’s gain is possible only at another person’s expense.
Success depends on battling competitors for market share.

The use of marketing warfare strategies

Strategy is the organized deployment of resources to achieve specific objectives, something that
business and warfare have in common. In the 1980s business strategists realized that there was a
vast knowledge base stretching back thousands of years that they had barely examined. They
turned to military strategy for guidance. Military strategy books like “The Art of War” by Sun
Tzu, “On War” by von Clausewitz, and “The Red Book” by Mao Tse Tung became instant
business classics. From Sun Tzu they learned the tactical side of military strategy and specific
tactical proscriptions. From Von Clausewitz they learned the dynamic and unpredictable nature
of military strategy. From Mao Tse Tung they learned the principles of guerrilla warfare. The
main marketing warfare books were:

 “Business War Games” by Barrie James, 1984

 “Marketing Warfare” by Al Ries and Jack Trout, 1986
 “Leadership Secrets of Attila the Hun” by A Weiss, 1987

By the turn of the century marketing warfare strategies had gone out of favor. It was felt that
they were limiting. There were many situations in which non-confrontational approaches were
more appropriate. The “Strategy of the Dolphin” was developed in the mid-1990s to give
guidance as to when to use aggressive strategies and when to use passive strategies. Today most
business strategists stress that considerable synergies and competitive advantage can be gained

from collaboration, partnering, and co-operation. They stress not how to divide up the market,
but how to grow the market. Such are the vicissitudes of business theories.

Types of Marketing Warfare Strategies

 Offensive marketing warfare strategies - are used to secure competitive advantages;

market leaders, runners-up or struggling competitors are usually attacked.
 Defensive marketing warfare strategies - are used to defend competitive advantages;
lessen risk of being attacked, decrease effects of attacks, strengthen position.
 Flanking marketing warfare strategies - Operate in areas of little importance to the
 Guerrilla marketing warfare strategies - Attack, retreat, hide, then do it again, and
again, until the competitor moves on to other markets.
 Position defence: This is a strategy, which utilizes its current position. And can be a
weak disadvantage against the attacking opposition. In a business context this is a
strategy usually applied when a company has a dominant stake in the market place this is
usually a monopolized and controlled industry. Marketing with this type of strategy can
be identified through barriers of entry. This is where a company has fortified its position
by having key strongholds in the Marketing segment or brand identity or product
familiarity. They may apply these areas through increasing the equity of the brand or
repeat purchases otherwise known as customer loyalty strategies (Shayne, Milligan.
2012). E.g. Starbucks as a café giant promoted the free Wi-Fi connection to protect their
market share against the competition that had first applied the concept (Jamie, Burns.
 Mobile defence: By moving resources and creating new strategies and tactics the
intended goal is to create a moving target that is difficult to attack by the opposition. This
also equips the defence to repel any attacks the opposition has in stored. The
interpretation in business explained by Shayne Milligan is when businesses introduce
new products, replacement products, modifying existing products and repositioning
products as well as changing the marketing segments, target markets or changing

promotional focus. This type of defensive strategy is most likely incorporated by
entrepreneurial companies with strong marketing research and marketing skills along
with the ability to continuously develop their product line (Shayne Milligan. 2012).
 Flanking position: By re-deploying your resources to discourage any type of flanking
attack. This in business terms is developing new products in a marketing segment that
you occupy. By expanding resources the business is able to strengthen their hold on the
segment under threat (Shayne Milligan. 2012). E.g. Absolute vodka had found a
marketing segment that was leased served. In doing so they were able to capture this
market by increasing prices by promoting premium vodka this tackled their competition
Smirnoff in a space they did not allocate resources towards. This is known as Flanking
marketing compared to the strategy of flanking position this was a successful attack
towards the opposition (Jamie Burns. 2013).
 Counter offence: This initially involves counter attacking the opposition that has
attacked you. In business context this is where a counter attack is made on the
opposition’s weakest point (Shayne Milligan. 2012). Pre-emptive attack on any business
must have some type of counter re-action this could be a move by the competition into its
sales territory, price cutting, promotional blitz or product improvements. When faced
with these competitive signs the options can be frontal deployment of resources by
strategically developing new products or improving on products. The other option is
finding the opposition’s weakest point, which in military terms would be attacking the
competitions main territory. E.g. Central DuPage a suburban hospital located in Chicago
had been under invasion by competitors. Primary and urgent care centers had moved into
the local suburban area and with the population rising it became an opportunity not just
for the Central hospital DuPage but also for their competitors. In order for the local
hospital to protect its share in the market it had to develop new physician offices located
in underserved areas. This was a counter offence by re-positioning themselves they were
able to take in patients through their newly allocated offices where the physicians could
refer their patients to the Central DuPage hospital (Naresh, K Malhotra. 1988).
 Frontal attack: This strategy is specifically designed to engage the opposition with a
head on frontal assault. This also means using a substantial amount of resources and
financial commitment when taking on a competitor with this strategy. From marketing to

the production process all elements are activated when initiating such an abrasive move.
Advertising campaigns and new products are usually intensified to take on the
competition where they are strongest this is to weaken their market share and margins by
cutting off their leading products and influencing their targeted audience to re-evaluate
their loyalty to the brand or product. It is rare to encounter such strategies, as the process
is quite expensive and time consuming this is also a high risk venture if the competition
has a strong counter offensive attack which, can leave the attacking opponent open to
counter strikes. With resources already stretched this strategy is not for the faint hearted.
Shayne Milligan explains that this type of strategy is only used when the market space is
homogenous, brand equity is low, customer loyalty is low, products are poorly
differentiated, the competitor has relatively low resources or the attacker has stronger
resources (Shayne Milligan. 2013). E.g. In 2011 the US shopping giant Target had
entered the Canadian market with financial investments exceeding 4.4 billion dollars.
Part of this initial investment was allocated towards purchasing 220 previously acquired
stores of Zellers a local Canadian merchandising mogul. With almost 10 million being
spent on the refurbishing of each store as well as the hiring of 150-200 employees per
store. The financial forecast for the Target Corporation was estimated to be around 6
billion per year by the year of 2017. This was not to be the case as Targets initiating year
in the Canadian retail market failed to achieve any realistic financial goals. Even though
the success of Targets US stores were still in affect the underestimated planning into the
Canadian market was due to Unforeseen economic variables as well as Canadian loyalty
to stores also owned by US parent companies Wal-Mart and Costco’s etc. Such
competition had put the Target Corporation in a position at risk of making more loses
than profits, which would also affect their US based stores. Taking on Wal-Mart and
other foreign and domestic competition has been unsuccessful but Target continues to
move towards dominating some part of the Canadian retail market (2015).
 Envelopment strategy or encirclement strategy: This strategy is more broadly used as
it focuses on subtle offensive attacks. In such cases the introduction of products that are
similar to the competitor’s products are developed to liberate the market share of the
opposition’s product line. When done properly this type of strategy can avoid a full-scale
frontal assault. The objective is to find niches in the marketing space rather than the

creating of products that directly compete against the competition. It is more of an
indirect assault on the opposition’s market share. Shayne Milligan suggests this strategy
be used when the market is loosely segmented, some segments are free of larger
competitors, the attacker has strong product development resources, the attacker has
enough resources to operate in multiple segments simultaneously and the attacker has a
decentralized organizational structure (Shayne Milligan. 2013). E.g. Republic Health
Corporation, which is a chain of health care centers located in Dallas, developed an
advertising campaign called “Step Lively”. This was specifically incorporated to focus on
pricing, product form, sales promotion and advertising. The strategy was to create
incentives through discounted foot examinations and free home meals after
hospitalization as well as purchasing gift cards for a new shoe’s. They focused on one
area at a time against competitors while funneling specific treatments for patients into
one hospital in each area at a time (Naresh K, Malhotra. 1988).
 Leapfrog strategy: Bypassing is a strategy that is the less indirect compared to the
alternative options. In business terms this can be achieved through technological
advancements or creating new segments that have not been developed as of yet (Naresh
K, Malhotra. 1988).
 Guerilla: A guerrilla strategy usually consists of small incremental attacks by using
unconventional methods against a larger opposition. In a business context this can be a
strategy most commonly used by smaller firms on the bigger competition. These are
tactically made forms of communications between the consumers influence of the bigger
competitors specifically targeting a market segment that is heavily influenced by the
competing opposition. They maybe short burst attacks through price cuts, supply
deterrence, executive raids or a promotional blitz, even legal actions against the
competition or negative publicity. But this type of strategy must have some type of
disengage tactic, as a full on confrontational assault could be disastrous for a small firm
(Naresh K, Malhotra. 1988). E.g. In 2005 a telecommunications company based in
Romania had launched its self in to and already emerging market of mobile phones they
did this by acquiring an already unsuccessful firm but re-branding the company and using
the already established networks. Two rivalry competitors at that time had complete
control of the telecommunications sector in Romania. In order for the smaller firm to

compete they had to resort to two marketing warfare tactics. Flanking attacks as well as
guerrilla strategies. They were able to penetrate two segments, post pay and pre pay
segments by not taking the competition head on through more heavily operated segments
of the industry at that time they were able to find an area that was lease productive for the
larger telecommunication providers. The small firm was able to increase 95% of their
coverage to 82% of their networks distribution area making mobile phone more
affordable and assessable to their customer base initially targeting a young audience. This
was unexpected by the two larger telecommunications providers even though they still
controlled a larger portion of the telecom industry the small firm was able to become a
medium sized competitor within a short period of time (B, G, Cernat. G, L, Constantin.
A, Chiciudean. 2008).

Companies typically use many strategies concurrently, some defensive, some offensive, and
always some deterrents. According to the business literature of the period, offensive strategies
were more important than defensive one. Defensive strategies were used when needed, but an
offensive strategy was requisite. Only by offensive strategies, were market gains made.
Defensive strategies could at best keep you from falling too far behind.

The marketing warfare literature also examined leadership and motivation, intelligence
gathering, types of marketing weapons, logistics, and communications.


4.1 Analysis of Axis Bank Ltd
Overview of Financial Performance
Operating performance

Particulars 2015-16 2014-15 % change

16,832.97 14,224.14 18.34
Net Interest Income

Non-Interest income 9,371.46 8,365.04 12.03

Operative revenue 26,204.43 22,589.18 16.00

Operating expenses 10,100.82 9,203.74 9.75
Operating profit 16,103.61 13,385.44 20.31

Provisions and contingencies 3,709.86 2,328.61 59.32

Profit before tax 12,393.75 11,056.83 12.09

Provision For tax 4,170.09 3,699.01 12.74

Net profit 8,223.66 7,357.82 11.77

Net Profit for the year ended 31 march, 2016 was Rs. 8,223.66 crores, increased by 11.77% over
the net profit of Rs. 7,357.82 crores last year. Operating profit reported a healthy growth of
20.31% at Rs. 16,103.61 crores over the previous year mainly due to higher operating revenue
growth of 16.00% compared to operating expenses growth of 9.75%.
Operating revenue over the same period increased by 16.00% to Rs. 26,204.43 crores driven by
healthy growth in the Bank’s core income Rs. 14,224.14 crores in fiscal 2015 to Rs. 16,832.97
crores in fiscal 2016. Growth in Non-Interest income consisting fee, trading and other income
was moderate at 12.03% from Rs. 8365.04 crores in fiscal 2015 to Rs. 9,371.46 crores in fiscal
2016. Fee income increased by 0.67% from Rs. 6,778.98 Crores in fiscal 2015 to Rs. 7,501.97
crores in fiscal 2016.
Growth in operating expenses as well controlled and rose 9.75% from Rs. 9203.74 crores in
fiscal 2015 to Rs. 10,100.82 crores in fiscal 2016. The key drivers of operating expense growth
were increased in employee expense, administrative and occupancy cost and other expenses.
Health operating revenues and moderate cost growth enabled the bank’s operating profit grow by
20.31% to Rs. 16,103.61 crores from Rs. 13,385.44 crores reported last year. Provisions and
contingencies jumped 59.32% from Rs. 2328.61 crores in fiscal 2015 to Rs. 3,709.86 crores in

fiscal 2016. Consequently profit taxes grew by 12.09% to Rs. 12,393.75 crores and net profit

Particulars 2015-16 2014-15 % change

Interest on loan 30,040.56 25,867.82 16.13

Interest on investment 9,377.59 8,447.75 11.01
Other interest income 1,569.89 1,163.03 34.98
Interest income 40,988.04 35,478.60 15.53
Interest on deposits 18,540.21 17,136.81 8.19
Other interest expense 5,614.86 4,117.65 36.36
Interest expense 24,155.07 21,254.46 13.65
Net interest income 16,832.97 14,224.14 18.34
Average interest earning assets1 431,873 363,186 18.91
Average CASA 122,989 107,328 14.59
Net interest margin 3.90% 3.92% -
increased by 11.77% to Rs. 8223.66 crores from Rs. 7357.82 crores last year.
Net-interest income

Particulars 2015-16 2014-15 % change

Yield on assets 9.37% 9.63% -

Yield on advances 10.10% 10.60% -

Yield on investments 8.22% 8.13% -
Cost of funds 5.94% 6.21% -
Cost of deposits 6.01% 6.31% -

NII constituted 64% of the operating revenue, and increased by 18.34% from Rs. 14,224.14
Crore In fiscal 2015 to Rs. 16832.97 Crore In fiscal 2016. The increase is primarily due to an
increase in average interest earning assets on a daily average basis by 18.91%, as NIM during the
fiscal year 2016 was broadly stable at 3.90%. The NIM was largely stable, mainly due to that the
banks moderation in yield on earning assets of 26 basis points (bps) was matched by similar
decline of 27 bps in cost of funds.
During this period, the yield on earning assets decrease from 9.63% last year to 9.37%.the yield
on advances declined by 50bps from 10.60% in fiscal 2015 to 10.10% in fiscal 2016 as the bank
reduce its bank rate by 65 bps over the last fiscal year. Cost of funds also moderated by 27bps
from 6.21% in fiscal 2015 to 5.94% in fiscal 2016.the decline was primarily driven by
moderation in the cost of term deposits and further aided by the banks continued focus on
CASA. During the year, the cost of deposits decrease to 6.01%from 6.31% last year, primarily
due to a decrease in cost of the deposits by 46 bps to 8.21% from 8.67% last year. During the

year, CASA deposits on, on a daily average basis, reported a healthy increase of 14.59% to Rs.
122,989 Crore from Rs 107,328 Crore Last year

Non-interest income

Particulars 2015-16 2014-15 % change

Fee income 7,501.97 6,778.98 10.67

Trading profit 1,246.91 1,134.94 9.87

Miscellaneous income 622.58 451.12 38.01
Non-interest income 9,371.46 8,365.04 12.03

Non-interest income comprising fees, trading profit and miscellaneous income increased by
12.03% to Rs. 9371.46 Crores In fiscal 2016 from Rs. 8365.04 Crores last year and constituted
36% of the operating revenue of the bank.
The bank earns fee income from a diverse set of product and businesses. The processing fees on
retail assets, commission on card spends, service charges on liability accounts, fee income from
the distribution of third party personal investment product are typically generated from retail
banking businesses. While on the wholesale banking side fees are generated from client based
merchant foreign exchange trade, transaction banking, syndication and placement fees,
processing fees from loans and commissions on non-funded products

Fee income increased by 10.67% to Rs. 7,501.97 Crores from Rs. 6,778.98 Crores Last year and
continuous to remain a significant part of the bank’s non-interest income it constituted 80% of
non-interest income and contributed 29% of opening revenue. Fee profile remains very well

diversified with 40% from retail banking, 26% from corporate banking and balance contributed
by treasury transaction banking and SME segments. A key factor for the slower growth in fee
income has been the slowdown in corporate banking fees due to lack of fresh new investments
and projects being undertaken in the broader economy.
During the year, proprietary trading profits increased by 9.87% to Rs. 1,246.91 Crores last year.
This also includes gains of Rs. 118.58 Crores Compare to Rs. 84.49 Crores In the last year,
resulting from a partial stake sale in max life insurance company.
The banks miscellaneous income was higher at Rs. 622.58 Crores compare to Rs. 451.12 Crores,
mainly due to higher dividends of Rs. 139.75 Crores received from subsidiaries compare to Rs
33.81 Crores in the last year and Rs. 244.88 Crores of higher exchange gains realized from
repatriation of profits from the bank’s foreign branches, compared to Rs. 186.16 Crores in the
last year.

Operating revenue
The operating revenue of the bank increased by 16.00% to Rs. 26,204.43 Crores from Rs.
22,589.18 Crores last year. The core income streams (NII and fees) now constitute 93% of the
operating revenue reflecting the stability of the banks earning.

Operating expenses

Particulars 2015-16 2014-15 % change

Staff cost 3,376.01 3,114.97 8.38

Depreciation 443.91 405.67 9.43
Other operating expenses 6,280.90 5,683.10 10.52
Operating expenses 10,100.82 9,203.74 9.75
Cost : Income Ratio 38.55% 40.74% -

The Bank continued to focus on reducing transaction costs besides ensuring improvement in
operations and productivity. The operating expenses increased by 9.75% to Rs. 10,100.82 crores
from Rs. 9,203.74 crores last year. The increase in operating expenses was largely due to the
growth of the Bank’s network and other infrastructure required for supporting the existing and
new businesses the cost to income ratio of the bank was 38.55% compared to 40.74% last year.
Staff cost increased by 8.38%, from Rs. 3,114.97 crores in fiscal 2015 to Rs. 3,376.01 crores in
fiscal 2016. The increase was due to a combination of increase in average salary levels and
headcounts over the period. Depreciation increased by 9.43%, from Rs. 405.67 Crores in fiscal
2015 to Rs.443.91 crores in fiscal 2016 primarily
Other operating expenses increased by 10.52%, from Rs. 5,683.10 crores in fiscal 2015 to
Rs. 6,280.90 crores in fiscal 2016. The increase is primarily due to an increase in network
expansion and expenses related to increase in general business volumes. The Bank added 315
new branches during fiscal 2016 compared to 187 branches in the previous year.

Operating profit
During the year, the operating profit of the Bank saw a healthy increase of 20.31% to
Rs. 16,103.61 crores from Rs. 13,385.44 crores last year, mainly due to higher operating revenue
growth of 16.00% compared to operating expenses growth of 9.75%.


• One of top three positions in terms of fastest • Majorly concentrated in corporate,
growth in private sector banks wholesale banking, treasury services, retail
• Has a network across India through Branches
and ATMs with its presence in 971 cities and • Foreign branches constitute only 8% of
towns. total assets
• Brand Name • Customer service has to improve a lot in
order to be in race with other major players
• Knowledge of Indian Market.

• Acquisitions to fill gap
• Growing competition from global players
• Multiple businesses synergies
• Consolidation of public sector banks
• Global foot print
• Permission for new private sector players,
increase in competition: Customer retention will • Technology as a lever for differentiation
be a key and cost reduction
• ICICI and HDFC are imposing strong threats in • Geographical expansion to rural market –
terms of their expansion in customer base by 80% of them have no access to formal
their aggressive marketing strategies lending
• Concept of ETM (Everywhere teller
machine) had a good response in attracting
new customers in personal banking segment


So, is it an investment-worthy Bank?

The economy is expected to grow roughly by 5-7% in the next 5 years. The banking sector is
poised to grow in line with the growth of the economy. Considering the bank’s large size and its
strengths, we can expect this economic growth to have a positive impact on Axis Bank’s growth.

Yes, Axis Bank is an investment worthy bank, but only at the right price. Currently, it is
trading at a price of Rs. 1304.65. But, does this price offer an attractive discount to its right
value (MRP) or is it over-priced? It is always best to invest at an attractive discount to its
MRP, to get maximum returns at minimum risk. Become a member of to know its sensible buy- price and hence take the right action for
this company.

5.1 Conclusion & Recommendation

Axis Bank is one of the few clean (in terms of asset book), rapidly growing, profitable, &
competitive private-sector banks in India; thus it will be a major beneficiary of the favourable
banking environment. The Indian banking sector is in a sweet spot: consumer and corporate
lending is strong, asset quality is improving and fee-income opportunities are growing. We
expect this favourable environment to continue in the medium term but recognize that a key
challenge for banks will be funding growth. Looking at its profile, I believe Axis Bank stands to
gain disproportionately from existing opportunities in the sector. The bank has strong technology
& products, an expanding distribution franchise, adequate scale, a strong service culture, and
management enterprise -features that should help it stay ahead of the dominant government
banks to win market share.

Private players such as Axis Bank that offer a multitude of delivery channels and have an
integrated technology platform could potentially achieve comparable distribution reach in the top
200 cities to government banks with substantially fewer branches. With a presence in the top 150
cities, I think Axis Bank is very well positioned to rapidly reap the benefits of the expanded
reach by scaling up its retail foray.

Moreover, earnings CAGR is likely to be stronger than the larger private peers as it begins to
benefit from the distribution expansion.


 Times of India
 Financial Express