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International marketing strategy in

the retail banking industry: The case

of ICICI Bank in Canada
Received (in revised form): 15th August, 2008

Leighann C. Neilson*
is Assistant Professor of Marketing in the Sprott School of Business at Carleton University (Canada). Her research interests are related to
social and cultural influences on marketing, interpretative and qualitative research methods, marketing history, and marketing in cultural

Megha Chadha
is a Master of Business Administration graduate from the Sprott School of Business at Carleton University (Canada).

Abstract This study presents an overview of the marketing strategy that a retail bank may
pursue when it targets home country nationals in a foreign market. An analysis of the
marketing strategy of ICICI Bank in Canada reveals that a transnational strategy coupled with
an ethnocentric staffing policy allows the parent firm to retain control, while the choice of a
subsidiary as an entry mode allows for local responsiveness. Further analysis illustrates that
the blend of various variables in the services marketing mix (ie price, place, promotion,
participants, physical evidence, and process) can help in attaining customer satisfaction.
Journal of Financial Services Marketing (2008) 13, 204–220. doi:10.1057/fsm.2008.21

Keywords International bank marketing, customer satisfaction in banking, retail banking

INTRODUCTION retail banks, therefore, may choose to expand

into new international markets.5
In the context of retail banking, customer
A retail bank considering international
satisfaction has been found to be the ultimate
expansion faces several obstacles including a
measure of service performance.1 Once
lack of cultural awareness and understanding
customer satisfaction has been created, loyalty
of the market, and language differences that
is often formed, which in turn enhances firm
may hinder effective communication.6 One
profitability.2 Over the past few decades, retail
strategy retail banks could adopt to overcome
banks have faced an increasingly dynamic
these obstacles is to target home country
environment that has heightened standards
customers in the foreign market. Although
for attaining customer satisfaction, making it
revenue can be enhanced by targeting similar
difficult to sustain growth in the existing
markets, careful analysis suggests that
marketplace. In response, banks could choose
similarity alone is not sufficient to ensure
to diversify into new product lines or expand
success. Customer needs are a function of
into new markets.3 Since customers, however,
their socio-economic status, culture, and the
believe that product offerings across banks are
environment of the country in which they
similar,4 the option of product diversification
are residing.7 Since these elements are
would likely be an inefficient strategy. Many
continuously changing, it will be necessary to
adapt certain elements of the retail banking
marketing mix in order to create a more
*Correspondence: Sprott School of Business, Carleton University, localised approach. By employing a case
1125 Colonel By Drive, Ottawa, Ont., Canada K1S 5B6. study of ICICI Bank Canada, this research

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International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

illustrates how an international bank that expansion as an opportunity to increase sales

targets home country nationals in a foreign of existing products.
market can successfully adapt its marketing When expanding into new geographic
mix. In doing so, this research seeks to markets, a retail bank needs to ensure that it
answer the following questions: When a retail is knowledgeable of the target market so as
bank targets home country nationals in a to cater to customers’ needs appropriately.
foreign market, which of the marketing mix Gaining knowledge of an international
variables are customised? Of the variables that market, however, requires a greater
have been customised, why have the investment. This is because the firm lacks
adaptations been made? competence with the foreign market due to
The paper is organised as follows: first, an the unfamiliar culture,6 buyer loyalties to
overview of the retail banking environment other service providers may already exist,12
in North America and new opportunities language differences may hinder effective
arising in Canada are discussed. Then, a communication despite translation
literature review develops a conceptual techniques,13 and extensive resources such as
framework of marketing in the retail bank management capacity and capital will be
industry. Next, the research methodology is required to be firmly established.12 To
described and results of the data analysis are mitigate the risks, firms may choose to target
presented. Finally, implications for managers markets similar to their home country’s
and future research are identified. market.
Research suggests that market similarity,
THE CHANGING NATURE OF THE defined as the degree of resemblance
RETAIL BANKING INDUSTRY between a foreign market and a firm’s home
market,14 could be a vital criterion for
Over the past two decades, retail banking market selection. Banks may choose to target
institutions in North America have been similar markets because the similarity creates
facing an increasingly competitive and an opportunity to standardise some elements
dynamic business environment. First, there of the marketing strategy15 and share
has been a reduction in government knowledge between subsidiary and parent.7
regulation creating a hybrid industry Demand for a product will tend to be
structure.8,9 Second, new technologies, in greatest in countries with markets similar to
particular the internet, have facilitated the that for which the product was originally
entry of foreign banks into new markets developed16 and greater brand awareness may
irrespective of physical presence.10 And finally, exist.17 Although revenue can be enhanced
consumers are now more informed, face by targeting similar markets, a careful
lower switching costs, and are showcasing an evaluation suggests that this alone can be
ever increasing set of diverse needs.11 The misleading;7 only considering potential
combination of these various forces has cash flows may mislead firms into
escalated the competitive forces faced by standardising their marketing strategy.
retail banks. In order to sustain sales growth, Excessive centralisation of marketing decision
banks could diversify into new products or making at the parent and failure to adapt
expand into new international markets.3 marketing strategy to subsidiary market
Customers have been found, however, to conditions has been found to contribute to
perceive little difference between banks in poor performance of subsidiaries.15 This
terms of product offerings,4 making product apparent conflict exists because customers’
diversification less attractive. Banks therefore needs are a function of their socio-economic
may pursue the second alternative, and in status, culture, and the environment of their
fact, it is common to see international country of residence,7 which are always

© 2008 Palgrave Macmillan 1363-0539 Vol. 13, 3 204–220 Journal of Financial Services Marketing 205
Neilson and Chadha

developing, that is, changing from what they Researchers have found three primary
were in their country of origin. Therefore, it stages through which a typical immigrant
will be necessary to adapt certain elements of proceeds in order to adapt to his/her new
the marketing mix in order to create a more country. The first two years of the stay is
localised approach. phase one, and the immigrant’s major
The international strategy of retail banks preoccupation is finding a job, maintaining
targeting home country customers in a contact with family members back home, and
foreign market will entail a focused sending money to relatives back home.
approach. The service encounter is more During this phase, immigrants’ banking needs
personal than the purchase of a good and at are typically focused on financial remittance.
least some portion of the service must be Phase two begins in the following three or
produced locally.18 As such, exporting is not four years. If things are going well, the
an entry mode option that retail banks could immigrant will apply for consumer loans to
pursue. Banks also face strict regulations; purchase a residence, and will get used to
many countries limit the entry of foreign having an account and a credit card. In Phase
banks to subsidiaries, while others may prefer Three and onwards, the immigrant requires
branches. Research suggests that if a bank the full range of financial products and
wishes to operate in retail banking and target services that a retail bank normally offers.21
a focused clientele, a strategy of organic Domestic banks usually do not recognise
growth (ie subsidiary) is most profitable the international credit history of new
and an appropriate vehicle.19 This way, the immigrants. This lack of a credit history
bank can differentiate itself from existing prevents immigrants from accessing personal
competition. This mode also allows for credit, which in turn inhibits their ability to
greater response to changing market integrate into Canadian society. Without a
conditions, which is necessary now with credit history, immigrants are unable to
the increasingly dynamic environment obtain a credit card, a mortgage, and educate
faced by retail banks. themselves in order to obtain the appropriate
certification for suitable employment. This
situation creates a vicious circle, wherein the
The Canadian opportunity
immigrant needs employment to develop a
The Canadian marketplace is changing. credit history, credit history to obtain a loan,
Census data reveal that the visible minority a loan to enrol in studies, and studies to gain
population is growing faster than the total employment. Without a credit history,
population; between 1996 and 2001, the total immigrants are also unable to obtain a loan
population increased by 4 per cent while the to establish a business.22 Further, it is likely
visible minority population rose 25 per cent. that domestic banks may lack an
It is estimated that by the year 2017, visible understanding of immigrants’ cultural values,
minorities will account for between 19 and may not be present in immigrant
23 per cent of the country’s population.20 communities, and may not have personnel
The visible minority population consists capable of conversing in the language with
mainly of three segments: immigrants which the new immigrant is most
successfully settled in Canada, immigrants comfortable.22
that have arrived recently and immigrants These special needs require new marketing
that are still in their homeland and are in the strategies on the part of retail banks. For
process of relocating to Canada. The latter example, the traditional approach to lending
two segments have been found to have money involves analysing the applicant’s
special banking needs largely unfulfilled by financial history. Although domestic banks are
traditional bank offerings.21,22 attempting to capture this lucrative market

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International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

segment, senior levels of the hierarchy are Product

primarily Canadian, which limits
When services offered match the needs of
understanding of the appropriate ways to
the target customer, satisfaction results.26
tailor marketing strategies. In contrast, foreign
When applied to retail banks, however,
banks that belong to the home country of
customers have been found to perceive little
the immigrants may have stronger ties with
difference between banks in terms of product
the ethnic group, and are discovering this
offerings. A Canadian study found that the
area of opportunity. HSBC Canada, for
personal relationships Canadians experience
instance, has benefited by targeting the
with their retail bank outweigh the services
Chinese community.23
offered, and those banks able to manage the
One immigrant population that is
customer experience stand a better chance to
increasing in number in Canada is the South
develop relationships,27 denoting the lesser
Asian. Here, the descriptor ‘South Asian’
importance of product differentiation.
identifies individuals from a diverse set of
Furthermore, banks that enter into a new
ethnic backgrounds, including Bangladeshi,
national market typically offer essentially the
Bengali, East Indian, Goan, Gujarati, Hindu,
same banking services provided by domestic
Ismaili, Kashmiri, Nepali, Pakistani, Punjabi,
Sikh, Sinhalese, Sri Lankan, and Tamil
ancestries.24In the 2001 Canadian Census,
South Asians numbered 917,100; representing Price
3.1 per cent of Canada’s population and 23
per cent of the visible minority population.25 Customers are unwilling to pay a price that
The same census estimated that the Chinese is perceived as unfair because of the impact
represent the largest visible minority group. on their financial situation.29,30 Previous
The South Asian population, however, is research has found that banks located in a
forecasted to reach 1.8 million by the year geographic region within which customers
2017 (a 96 per cent increase from 2001), are able to switch banks maintain similar fee
and have a higher fertility rate than the structures.31 Furthermore, even though banks
Chinese.25 Analysts forecast that the share of maintain divergent pricing policies across
South Asians in the Canadian population will countries, the overall structure manages to
soon be on par with the Chinese, creating a converge within a country, including Canada
market opportunity for retail banks. where the banks have focused less on pricing
as a strategy leading to competitive
advantage.32 Because of the similarity of
RETAIL BANKING MARKETING competitor offerings, customers are not likely
FRAMEWORK to switch banks regardless of any
This section develops a conceptual dissatisfaction with the pricing policies of
framework of the marketing approach that their current bank.31
retail banks may pursue by drawing together
the main themes from the retail banking
literature that focuses on the marketing mix
and international strategies. Operating within There are several channels through which a
the services sector, the efficiency with which bank may offer its services, including branch
retail banks conduct their marketing activities networks, automated teller machines (ATMs),
through the ‘7 Ps’ of the services marketing telephone banking, and internet banking.33
mix aids in creating customer satisfaction. Research within financial services supports
Results of the literature review are presented the view that convenience is a criterion
in terms of the services marketing mix. customers utilise to select a bank so that they

© 2008 Palgrave Macmillan 1363-0539 Vol. 13, 3 204–220 Journal of Financial Services Marketing 207
Neilson and Chadha

may easily conduct their banking personnel to be competent, communicate

activities.34,35 Banks must consider such efficiently, and handle conflicts satisfactorily;45
factors as target market lifestyle, experience, the need for personnel to have the authority
and buying habits when deciding through to make decisions, so as to allow for
which channels services will be offered, customisation to the particular needs of the
because customers only adopt those client;46,47 perceived employee effort to
innovations that offer benefits.36 reduce waiting times, and appropriate
employee interactions with customers (such
Promotion as attempting to apologise when customers
must wait to be served)48 and finally,
Promotion is an essential component of a similarity of personnel with customers in
retail bank’s marketing mix because although terms of appearance, lifestyle, social class, and
people may purchase manufactured products education level. When personnel are similar
from an unknown vendor, they will always to customers, interpersonal barriers are
look for a trustworthy bank.37 Marketing reduced and trust is established.46
communications, therefore, should maintain a To ensure that these elements are
positive image of the bank and emphasise its showcased by personnel, banks need to
financial strength.37 Value-added promotions employ internal marketing to instil a culture
are increasingly a useful means of obtaining that emphasises how every service encounter
customer satisfaction. This is a legal form of with a client effects satisfaction. Employee
selling in Canada, and consists of offering the training should focus on educating service
customer a gift for purchasing a product or personnel about the company’s services,
service.38 Direct marketing is an effective way products, policies and practices, and providing
to create a regular dialogue with customers them with the necessary tools to solve
and update them on the latest offerings of customers’ problems and respond to requests
the bank. Research suggests that effective use efficiently.49
of direct marketing to an existing customer
base will likely increase customer retention
Physical evidence
by at least 25 per cent.39,40
Research has found that the physical
evidence at a bank branch has an influence
on customer satisfaction,50 likely because it is
Customers consider it important to have a one of the few tangible elements available to
relationship with their local bank;41 a evaluate a bank’s offerings.51 Figure 1 outlines
Canadian study found that it makes a the various components of a retail bank
difference in customer satisfaction.42 Strong branch physical environment. Modern branch
relationships between customers and bank styles are most effective at producing
personnel benefit the bank because they are customer satisfaction since they tend to have
difficult for competitors to replicate.43 Several more open layouts, a greater emphasis on
personnel-related characteristics are key in self-service terminals and technology
helping to achieve customer satisfaction. infrastructure, glass frontages, greater space for
These include ensuring the appropriate customers, and limited use of bandit screens.
appearance of staff by making certain that Larger windows are also present, and act to
fitting attire is worn;44 the need for promote the image and offerings of the
personnel to be sincere, demonstrate bank.51 Some features inherent in modern
enthusiasm in solving customer’s problems,44 branch styles, however, are associated with
and appear to be committed to giving their customer dissatisfaction, such as the increased
utmost performance;43 a requirement for presence of ATMs, and a clear view into the

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International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

Physical 1. Visual (e.g. lighting, colors, view into branch)

Factors 2. Aural (e.g. music, background noise)
3. Olfactory (e.g. air conditioning)
4. Tactile (e.g. materials, texture, comfort)

1. Aesthetics (e.g. pictures, plants)

Emotional 2. Safety (e.g. bandit screens, cctv)
Stressors 3. Modernity (e.g. age of layout)
4. Space (e.g. branch volume, branch area)
5. Privacy (e.g. desk spacing)

Use 1. Information factors (e.g. displays, signs, zones)

Facilitators 2. Staff factors (e.g. uniforms, name badges)
3. External factors (e.g. frontage, entrance)
4. Internal factors (e.g. queue lines)

Facilities 1. Personal (e.g. staff, service desks)
2. Impersonal (e.g. ATMs, pens & writing surfaces)

Figure 1 Key components of the branch environment adapted from: Greenland and McGoldrick51

branch. It is thus crucial that a bank evaluate to take corrective action.53 In unexpected
the preferences of its target market when circumstances, the bank should accept
designing branches. responsibility and where possible offer
compensation to the customer.53
Process in the services marketing mix refers
to the systems used to deliver services. The context of the case study was ICICI
Customers may not instantly switch banks Bank Canada (hereafter referred to as ‘the
after experiencing a problem during service Bank’). The Bank is a wholly owned
production, but may respond in the form of subsidiary of ICICI Bank Limited. ICICI
making a formal complaint. Customer Bank Ltd., headquartered in Mumbai, India,
satisfaction in such cases depends upon the offers a wide range of banking products and
efficient and effective response of bank financial services to corporate and retail
personnel.52 Strategies for establishing and customers, and, through various subsidiaries
maintaining a robust service delivery process and affiliates, is also active in the area of
are predicated on effective communication to investment banking, insurance, and wealth
develop shared understanding. This is management. The company is India’s second
achieved by implementing an open dialogue largest bank, the country’s most valuable bank
with customers, resolving complaints received, in terms of market capitalisation, and is
and keeping customers informed of changes ranked third among all the companies listed
to product and service offerings.53 Banks on the Indian stock exchanges in terms of
need to signal commitment to the customer Free Float Market Capitalisation.54 (Free
by showing responsiveness to their changing Float Market Capitalisation is defined as that
needs and by investing in the relationship.53 proportion of total shares issued by the
For conflicts that arise on a day-to-day basis, company that are readily available for trading
it is important that personnel are empowered in the market. It excludes promoters’ and

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Neilson and Chadha

government holdings, strategic holding, and The second author completed a 2.5-month
other shares under any type of lock-in clause internship (45 h/week) at the Bank’s
that would not come into the market for Canadian head office, working on projects in
trading in the normal course.55) The brand the areas of marketing management and
equity ICICI Bank has developed in South customer complaint processing, interacting
Asia positions it as a bank that has the primarily with the senior manager and
potential to successfully target home country assistant managers of the Department of
immigrants in a foreign market. Marketing & Public Affairs, assistant managers
ICICI Bank Canada is licensed as a foreign of the Customer Service department, and
bank subsidiary (Schedule II Bank) under the managers of Product Development. In-depth
Bank Act (Canada). Since its entry into the discussions allowed the researcher to develop
Canadian market in December 2003, the a coherent understanding of the marketing
Bank has been successful in constantly strategy of ICICI Bank in Canada. The data
increasing returns. As of November 2007, the that will be utilised to interpret the
Bank had seven branches and $2bn in assets, marketing strategy, however, are those which
over 125,000 customers across Canada, an are available for access to the general public.
ATM network, and a robust direct banking The Bank’s branches located in one of
platform, all of which it achieved within two Canada’s largest cities were also visited so as
years.56 ICICI Bank targets South Asians to develop a deeper understanding of the
with the goal of positioning itself as not only physical décor at the branches. All relevant
an Indian financial institution, but as a information observed and obtained was
premier South Asian bank.57 The Bank’s documented in a research journal. ICICI
marketing strategies will help exemplify the Bank Canada’s television advertisements were
key success factors. viewed and analysed over an extended time
period, totalling over 40 viewings. Additional
materials, such as white papers published by
Data collection
private firms, government policy documents,
To explore those marketing mix variables and information contained on retail banking
that are of most significance for a retail bank industry websites helped to round out the
targeting home country nationals in a foreign contextual information necessary for
market, a case study approach was adopted. A analysing this case.
case study approach was appropriate because
the research focused on determining how and
Data analysis
why the marketing mix variables were
adapted — questions that had to be traced A grounded theory approach to data analysis
over time, rather than through incidence.58 was employed.59 The grounded theory
Although direct observation provided useful approach is appropriate for open-ended
and relevant information, the case study research in order to generate theory out of
approach also allowed for the use of a variety the data collection,60 and was therefore a
of other evidence including content analysis relevant basis for attaining the research
of the Bank’s marketing communications, objectives. During analysis, data were broken
which helped to round out the kinds of data down through coding whereby those
collected. marketing variables identified as important
To facilitate an intensive, detailed analysis, during the review of the bank marketing
multiple data collection methods were literature guided the labelling process.60,61
employed. In the first method, data were The literature review also served as the basis
collected through personal observation of the for exploring relationships between categories
marketing strategy of ICICI Bank Canada. in order to determine the relative importance

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International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

of each of the marketing variables and its savings of Canadians (up to $100,000) in case
sub-elements. Following the constant their financial institution fails or goes
comparison method, new data being bankrupt.63 Being insured with CDIC
collected were evaluated for its potential to enhances the perceived trustworthiness of the
illuminate the concepts being coded. Data Bank, thereby enhancing its ability to attract
collection and coding ended when a degree market share. By entering the Canadian
of certainty had been reached with respect to market as a subsidiary, the Bank also has
the research objective and theoretical greater control over strategic decision
saturation had been achieved. This approach making, which allows for swift response to
allowed the researchers to determine those changes in the external market.64 A strategy
marketing variables that are of most of organic growth allows for autonomy
significance when targeting the same in decisions pertaining to the marketing
customer base as the home country in the mix, which in turn allows the Bank to
context of retail banking. differentiate its offerings from the
competition. By attracting customers at the
DISCUSSION early stages of entry into Canada, or as they
are preparing to enter, the Bank hopes to
Results from the analysis of ICICI’s retail establish long-term relationships with clients,
banking marketing strategy are presented in recognising their banking needs will change
this section. The discussion is organised into as they integrate into the new society. The
three parts. The first part will discuss the organic entry mode allows the Bank to
international strategy of the Bank, and then exploit the long-term potential of its
part two will discuss the strategies that have investment in Canada.
been pursued for the various marketing mix
elements. This will be followed by a brief International strategy
examination of performance management The international strategy of ICICI Bank in
variables to determine whether the strategies Canada resembles a transnational strategy. The
have been successful in achieving customer Writing Lab, located in India, is mandated to
satisfaction. make a content quality check on all written
customer communication such as service-
Strategy of ICICI Bank in Canada related responses to customers, marketing
communications, web content, internal
Mode of entry promotional e-mails, and welcome letters to
The Canadian government has established customers sent when an account has been
that foreign banks wishing to operate in the opened with the Bank. ICICI Bank has
retail banking sector need to enter either as a implemented a policy for corporate
subsidiary or as a branch.62 ICICI Bank branding entitled ‘ICICI Bank Corporate
elected to enter as a subsidiary, a decision Brand Guidelines’, which outlines the
influenced by several factors. Under Canadian ways in which the ICICI Bank corporate
regulations subsidiaries are able to offer the brand name and image may be utilised
full range of retail banking services, allowing throughout the international operations.
the Bank to act as a one-stop solution for The policy helps ensure a consistent brand
the banking needs of new South Asian image on all marketing communications.
immigrants. Foreign bank subsidiaries are also The subsidiary monitors the local market
eligible for insurance provided by the Canada environment to decipher emerging
Deposit Insurance Corporation.62 Canada customer needs and possible opportunities
Deposit Insurance Corporation (CDIC) is a for growth. It then determines the
federal Crown corporation that insures the appropriate marketing strategies it would

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Neilson and Chadha

like to pursue (eg a campaign that promotes because expatriates are unfamiliar with the
money transfer to India versus a campaign to Canadian environment.69 To mitigate the
promote the mortgage business). The risks, the Bank holds training sessions
subsidiary also has autonomy in prioritising throughout the year for new expatriate
campaigns. arrivals. These sessions are hosted by
The transnational strategy allows ICICI Canadian consultants and provide an
Bank to exploit core competencies overview of the local business environment,
throughout the subsidiary and parent firm. along with the areas where business practices
A centralised policy for corporate branding, differ between India and Canada.
written communications, and creative
development allows the Bank to maintain
cohesion with respect to maintaining a Marketing framework of
consistent brand image. This allows the Bank ICICI Bank Canada
to exploit the relationships it has developed
with South Asians back home. The autonomy Product
given to the subsidiary in terms of ICICI Bank Canada has positioned itself as a
determining appropriate marketing strategies full-service bank by offering the full range of
allows the Bank to respond to the needs of retail banking products. The Bank has
the local market. attempted to build relationships with new
South Asian immigrants by offering
Organisational factors innovative products, such as the ‘Hello
The human resource policy of the Bank is Canada’ account that allows immigrants
categorised as ethnocentric, whereby home coming to Canada to open a Canadian bank
country personnel are selected for account from a foreign country and transfer
management jobs.65 Benefits of this approach funds into the account prior to arrival.70
include enhanced marketing communications A second product, the ‘Hello Canada
— managers are largely familiar with the Newcomers Account’, permits customers to
culture and customs of customers and can obtain credit cards, and car and house loans
implement effective marketing strategies, and prior to arrival.71 ICICI Bank Canada targets
enhanced control — employing home this market niche by recognising the credit
country nationals allows headquarters to history of the South Asian immigrants from
replicate its policies and practices.66 their home country.70 These specialised
Maintenance of control is necessary because products allow customers to access money
the subsidiary is currently in its early stages upon arrival, easing their transition to
of growth and depends on headquarters for Canadian society.
direction with respect to corporate strategy. Although these products may seem novel,
According to Hofstede’s cultural further analysis reveals similar product
dimensions,67,68 Canada is ranked as a society offerings are available through other
with a more individualistic attitude, with the Canadian banks. For instance, the Royal
populace being more self-reliant and private. Bank of Canada has implemented a ‘Secured
In contrast, India has a high power distance Visa Option’ that allows immigrants to build
and is more collectivist. Owing to such a credit history more easily. The company has
differences, it is likely that employing also launched an internet-based account
Canadian managers could result in cross- opening procedure that allows immigrants to
cultural conflict. deposit funds prior to arrival.72 Thus, product
The disadvantages to this strategy are that differentiation is not the primary basis
flexibility to new management approaches is through which ICICI Bank competes in the
reduced, and training expenses increase Canadian market.

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International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

Price Canadian financial institutions. For each

In order to attract new immigrants, the Bank product, the price of the Bank is more
promotes its money transfer business by attractive than the average.
allowing customers holding a chequing The Bank’s competitive pricing is made
account to transfer money to South Asia possible by the cost savings it realises by
without any charge. In comparison, ICICI retaining some of its workforce in India,
competitor Bank of Montreal charges where wages are lower. While international
between $15 and $125 Cdn for wire banks such as HSBC and Citibank save
payments.73 This is a viable strategy because approximately 30 per cent by outsourcing
in the first few years after arrival customers low-end functions of data entry, call centre
are more focused on transferring money back jobs, and payment processing to India, ICICI
home. Bank claims to save as much as 70 per cent
In order to maintain relationships with with both low- and high-end jobs such as
new South Asian immigrants during phase product innovation and technology
two of the immigration lifecycle, the Bank development based in India.74
maintains competitive prices for various Additional benefits to ICICI’s pricing
investment and mortgage products by strategy can be observed. By offering free
offering a higher interest rate than other money transfers, the firm creates customer
Canadian banks.71,74 Specifically, mortgages satisfaction during the initial phase of
are priced lower, whereas investment products immigrants’ adjustment to Canada. Thereafter,
such as term deposits and GICs are priced competitive mortgages and investment
higher. Table 1 illustrates the interest rate product pricings help maintain satisfaction
offerings of ICICI Bank Canada, as of 17th during phase two. After this, immigrants enter
October, 2007, vis-à-vis the average for major into phase three, by which time they have
integrated and settled into Canada. At this
Table 1 Interest rate offerings (in %), on 17th October, stage, the Bank has also been able to develop
200775 customer loyalty, and therefore, customer
Mortgage Term GIC switching is less likely to occur allowing the
5 year deposit 5 year Bank to focus on other variables to maintain
1 year
satisfaction. Consider the pricing strategy the
Bank of Montreal 7.440 4.000 3.600 Bank pursues for traditional banking
Bank of Nova 7.440 2.350 3.600
Scotia products. From phase three of the immigrant
Comtech Credit 5.790 2.300 5.010 lifecycle onwards, a savings account or
Equitable Trust 7.190 4.550 5.050
chequing account would be the primary
Grand River Credit 6.700 4.500 4.650 focus.76 At least one competitor, President’s
Union Choice Financial, provides a higher interest
HSBC Bank 7.440 2.450 3.600
Canada rate on savings accounts and charges no daily
ICICI Bank 5.750 4.300 5.000 banking or account maintenance fees on
ING Direct 5.790 3.900 4.650 chequing accounts.77
Laurentian Bank 7.100 2.750 4.500 Pricing is one variable through which
Libro Financial 7.100 2.750 4.500 ICICI Bank Canada maintains customer
Group satisfaction. By focusing on immigrants’
Manulife Bank 5.850 4.600 4.800
National Bank 7.190 2.450 3.700
changing needs, the Bank is able to develop
ResMor Trust 5.790 4.300 4.400 customer loyalty with the aim of building
Royal Bank of 7.400 2.350 3.600 relationships for the long term. The Bank, in
TD Canada Trust 7.440 2.450 3.600 a sense, defers profit taking until immigrants
Average of all 6.761 3.33 4.284 enter phase three when it is able to charge
more and not lose customers.

© 2008 Palgrave Macmillan 1363-0539 Vol. 13, 3 204–220 Journal of Financial Services Marketing 213
Neilson and Chadha

Place Promotion
The Bank offers its products through A strong corporate identity is seen as an
various channels. It has strategically effective means for differentiation in retail
established seven branches in Canadian banking.81 The Bank creates and maintains a
cities that have a prominent South Asian strong image through marketing
community.24,74 Moreover, the South Asian communications and event sponsorship. To
population in these areas is expected to create a trustworthy image, ICICI Bank
increase,57 which makes the branch strategy Canada showcases Shahrukh Khan, a well-
viable and sustainable. The Bank has known Indian actor, in its marketing
ATM machines located at each of its communications. Khan is currently ranked as
branches which can operate in English, one of the most famous and influential
Hindi, Tamil, Punjabi, Chinese, and celebrities in South Asia. Since the target
French.78 Operating machines in diverse markets of the Bank are those people
South Asian languages enhances customer preparing to immigrate, and those that have
satisfaction. Customers are also allowed to recently immigrated, the audience is largely
utilise ABM machines with the Interac familiar with, and likes, the actor. This makes
or Cirrus logo located worldwide. This is ads featuring Khan both persuasive and
an excellent strategy for satisfaction since effective.82 Research on the use of celebrity
it is likely that customers travelling to their endorsers finds that the symbolic properties
home country will need access to their of the celebrity are transferred onto the
accounts. The Bank offers credit card product, and thereafter onto the customer.82
products, and clients are allowed to transfer Shahrukh Khan is believed to embody the
funds to South Asia via their credit card, Indian winning spirit in terms of energy and
enhancing customer convenience. As a sales innovation.83 This image may fit with the
tactic, kiosks are placed at various South aspirations of the audience as they migrate
Asian grocery stores in the Greater Toronto to a new nation.
District. These kiosks are staffed by South In addition, the Bank is able to utilise
Asian sales personnel whose primary role is Shahrukh Khan in the explicit mode of
to attract customers to open accounts with ‘I endorse this product’. For instance, as a
ICICI. commercial on money transfers to India
Although the multichannel strategy concludes, the actor states, ‘Take my word
enhances market coverage, customer for it’. Utilising a trustworthy source
convenience, and allows for cross-selling enhances the trustworthiness of the product,
opportunities, similar channels are also being implying that it is safe, secure, and stable.84
pursued by other banks to target the South The Bank emphasises television and radio in
Asian immigrant market. For instance, the its promotion strategy. These media are
Canadian Imperial Bank of Commerce effective for image advertising because they
(CIBC) has located several branches in South enhance awareness and improve customers’
Asian neighbourhoods and also offers ABM attitudes toward the advertiser.37
services in ethnic languages.79 Bank of In print advertisements, the headline and
Montreal is also increasing branch penetration illustration are emphasised, highlighting
in the ethnic communities to deepen Shahrukh Khan and providing a broader
relationships with the local population.80 appeal.37 The ads are large sized, which has
Thus, channel of distribution alone is not a the effect of making the audience feel that
key source of competitive advantage and is the Bank is stronger and large and hence
largely utilised as the foundation to enhance trustworthy.37 The Bank’s membership in
market penetration and customer CDIC is also stated, adding to the credibility
convenience. of the Bank.

214 Journal of Financial Services Marketing Vol. 13, 3 204–220 © 2008 Palgrave Macmillan 1363-0539
International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

ICICI Bank also sponsors various high- Physical evidence

brow South Asian cultural events. Immigrants Several components of the Bank’s branch
who are in phase two and onwards would be environment enhance its competitiveness.
attracted to these shows, because they have Branches have a fairly modern layout with
the financial capability and leisure time to open-space designs and limited use of bandit
attend. Linking the event experience to screens. Spacing between the desks is
the brand results not only in favourable sufficient to ensure privacy. These elements
publicity and increased brand awareness but help to enhance perceived trustworthiness,
also enhanced brand image,85,86 as an prevent robbery/fraud, and serve to reduce
impression of sophistication and seriousness emotional stressors. Brochures and posters
is formed.87 featured in branches focus primarily on
money transfers and investment products. This
Participants is in contrast to other Canadian banks, where
There are three primary ways through which posters designed to support cross-selling
the Bank ensures that personnel are activities focus primarily on traditional retail
competent, communicate effectively and banking products.
reliably, and handle conflicts satisfactorily.
First, upon selection, personnel are exposed
to various materials outlining the bank’s Process
history, industry overview, market reach, and Although ICICI strives to perform its
strategy. Second, training and guidance are activities accurately, customers may sometimes
given on a regular basis to existing experience a problem during the service
employees, so as to instil a culture focused on process. Upon receipt, complaints are
customer satisfaction. And finally, an internal reviewed by the Customer Service Group
marketing programme has been implemented located in India, who strive to address the
which consists of distributing internal issue within two to three business working
newsletters to update staff on the latest days. In case the issue needs a localised
company developments, future objectives, and response, it is transmitted to the Customer
success factors for customer satisfaction. Service Team located in Canada. Customers
Similarity of personnel with clients also may be compensated for an error whose fault
effects customer satisfaction. The Bank lies with the Bank. And in cases where the
recruits South Asian personnel and ensures customer has significant business with the
that as a whole the staff speaks various South Bank, a gift may be offered and senior
Asian languages such as Arabic, Gujarati, managers may also get personally involved.
Hindi, Punjabi, Tamil, and Urdu.70 This raises These gestures show that the Bank is
comfort levels,70 and helps in changing trustworthy and has accepted responsibility
attitudes and opinions of the clients.46 Other for its faults,53 and allow stable relationships
Canadian banks, however, also recruit ethnic to be built.88
personnel in order to attract ethnic markets. To summarise, ICICI Bank is able to
For example, Toronto Dominion Bank leverage its cultural insights and knowledge
ensures that the branches located in so as to successfully attract the South Asian
communities with high ethnic populations immigrant market in Canada. To create the
are staffed with personnel able to speak foundation for sustainable growth, the Bank
minority languages,72 and CIBC pursues a established itself as a subsidiary, operating as a
similar strategy.78 These examples illustrate full-service bank and maintaining autonomy
that the element of personnel on its own is in key areas of strategic decision making.
not likely to allow ICICI to achieve An ethnocentric staffing policy maintains
differentiation. control with the parent firm, necessary as

© 2008 Palgrave Macmillan 1363-0539 Vol. 13, 3 204–220 Journal of Financial Services Marketing 215
Neilson and Chadha

the subsidiary is still in its early stages of ICICI Bank Canada’s profitability
growth. analysis
In terms of the services marketing mix, To determine the effectiveness of the
the product variable has been found to not marketing strategy of ICICI Bank Canada, it
be a source of differentiation. On the other is necessary to measure whether customer
hand, place and personnel are variables satisfaction has been produced. Research
through which the bank is able to enhance suggests that the value of deposits is an
market penetration and customer important way to determine whether a retail
convenience. In order to attract and retain bank has been successful in maintaining
customers, the primary differentiators are relationships with its customers.89 Since
pricing, promotions, processes, and physical ICICI Bank entered the Canadian market,
décor. Specifically, a competitive pricing the value of customer deposits, measured in
strategy allows the Bank to attract its target Indian rupees, has risen from 1,599,785
market at its early stages of entry into rupees in 2004 to 24,044,875 rupees in 2005
Canada, creating the opportunity to form and 60,890,218 rupees in 2006. Interest
long-term relationships. By emphasising the income (ie revenue from loans) measured
trustworthiness of the Bank in promotions, over the same time period has grown from
and establishing stringent processes for 48,392 to 552,685 rupees in 2005 and
addressing customer complaints, the Bank is 2,559,708 rupees in 2006.90 The rise in
able to maintain clients. In terms of physical interest income has reduced the Bank’s net
décor, use facilitators and the presence of loss, with the likelihood of positive returns in
ICICI Bank brand name and image, allow a few years. From our analysis, it is evident
for customer attraction and cross selling, that the marketing strategies that ICICI Bank
while modern branch styles help in Canada has implemented are leading to
enhancing trustworthiness and prevent customer satisfaction and enhanced
robbery/fraud. The strategic blend of these profitability. It is likely that as immigrants
elements allows the Bank to achieve move through later phases of their integration
customer satisfaction, which in turn generates into Canadian society, they will continue to
loyalty and bank profitability. The following conduct their banking activities with ICICI
model summarises the findings from this Bank Canada, and augmented with positive
section (Figure 2). word of mouth, and innovative marketing

• Subsidiary • Price
entry mode • Place
• Transnational • Promotion
strategy • Participants
• Ethnocentric • Physical
staffing Evidence
policy • Process

International Marketing Customer Enhanced

Strategy Mix Satisfaction Profitability

Figure 2 The marketing model of ICICI Bank Canada

216 Journal of Financial Services Marketing Vol. 13, 3 204–220 © 2008 Palgrave Macmillan 1363-0539
International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada

strategies, the Bank will likely continue to be found in Atallah and Rebelo’s 2006 report
attract and retain its target market. based on research conducted within new
immigrant communities. They recommend
that financial institutions educate staff,
especially customer contact and marketing
employees, to understand immigrant markets;
provide cultural sensitivity training to all staff;
ICICI Bank was able to expand into Canada expand alternative credit measurements; and
by targeting home country customers and develop partnerships with community-based
leveraging its home country success. Other organisations in order to offer financial
retail banks considering a similar expansion literacy workshops to new immigrants.22
strategy need to ensure that they have Future research should consider retail
established a successful network and presence banks that have been longer established in
in the country of origin of the target market new international markets, serving target
and that the targeted segment has future segments at more advanced stages of settling
growth potential in the new country. In into their new country. A multiple case study
addition, this research highlights the need to design would allow for development of the
showcase commitment to the target market conceptual framework in greater detail.
through various factors largely controllable Finally, a quantitative research design would
by managers. Managers should select staff allow for the estimation of the importance of
who are able to effectively communicate the various marketing mix variables in terms
with customers in order to meet the needs of the extent to which each determines
of the target market. To allow for relationship customer satisfaction.
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