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State Bank of India: Transforming a State owned Giant

Presented by: Group 3

Introduction

 SBI, is India’s largest commercial bank and 43rd largest bank in the world
 It has a market capitalization of $ 37 billion  The State Bank Group ( five associates banks and 22 subsidiaries) had more than 267,000 employees in 2011

 Its has 18000 branches and 25,000 ATMs across India
 In 2011, SBI delivered the profits of $ 2.6 billion

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Driving forces for Transformation  Lack of understanding of customer need and requirement  Low competency of employees  Rapid change in Technology  Hierarchical structure  Changing banking environment  Loosing market share Page  3 .

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Redefining Goals Setting Objectives Strategy & Tactics Implementation Page  5 .

Goals BUSINESS INITIATIVES ORGANISATIONAL INITIATIVES Regain Market Share Building Competency of Employees Increase rural presence Ease of Communication. Global Expansion Technological up gradation Page  6 Become a customer centric bank .

Objectives Targeting & Segmentation Improved customer service Redesign business performance systems Strengthen Capital Management Page  7 .

Strategy & Tactics New Products Shared Values Style Structure Skill System Page  8 Staff .

Implementation Marketing Strategy & Style: • In house brand awareness • Advertisement and marketing campaigns Market Space • • • • Corporate Rural Online Small and Medium Enterprise • Targeting • Market Segmentation Customer profile Page  9 .

) Product Profile • • • • Private Equity Wealth Management Insurance Payments • Inter connection of banks via CBS • Implementation of SAP/ERP Distribution • State level Subsidiaries Consolidated Channel Page  10 .Implementation (Contd.

Customer retention ratio also increased.Impact of changed Business Model  Change in Brand image – In 2008 it became the most valuable bank in the country in terms of market capitalization. 2009 & 2010 for customer satisfaction  Increase in Customer base – Company was able to create brand awareness among youths and rural population.  Increase in Total Asset Base – Bank witnessed phenomenal growth from 2007 onwards. Page  11 .000 villages by 2011. SBI won several awards in 2008. its assets grew with an average rate of 25%  Increased Rural Presence – SBI’s rural marketing helped the bank increasing its rural presence to 125.

Marketing Strategies of SBI vs HDFC Segregating and targeting existing high value customers  Cross sales of other products  Setting up call centers and outbound sales force to secure new customers.  Plan to send personalized mailers about various products to all those HDFC come in contact with during these mass promotions  They also introduced Gold credit cards and Platinum Credit cards for customers to avail additional advantage. Database marketing was expected to draw increased revenue from cross selling. through print and .  Aggressive Marketing television media Page  12  Promos not just for acquisition of new customers. enhancing usage and also providing value-adds to the customers to reward them for their faith and loyalty. lower costs and increased customer loyalty. but also looking at creating product awareness.

of Rs 1054 cr in Q4 . of Rs 2963 cr in Q4 Page  13 PAT up by less growth rate of 14% in 2011.SBI v/s HDFC According to BCG Theory PAT up by huge growth rate of 59% in 2011.

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Lack of Customer Experience Segmentation Product offering Overlooking new platforms like Social Media Non Integrated Systems Page  15 .

Consumer Behavior matrix HIGH LOW CONSUMER CONFIDENCE Repeat Passive RationalActive No Purchase RelationalDependent Page  16 LOW INVOLVEMENT HIGH .

Product Development in Bank Marketing Core •Handle Finances effectively Basic •Safe Deposits & Loans Expected •Timely Services •Low interest Rates •Adequate Working hours Augmented •Spacious and amicable Ambience •Customer friendly employees •Mobile banking facilities Potential Page  17 •Occasional Greetings at home •Surprise Gifts •Tax planning .

Various Innovative Products Launched By SBI CORE PRODUCTS KISAN CREDIT CARD (KCC) • adequate credit to farmers to meet their production credit needs SBI MAXGAIN (HOME LOAN AS AN OVERDRAFT) • Overdraft facility with the added flexibility to operate Home Loan Account like your SB or Current Account. Page  18 . SBI HOME PLUS • For granting personal loans to customers against the security of their house property.

1-Tonne air-conditioners for climate control with the highest efficiency rating of 5 stars.  Number of innovative sustainable solutions: installation of LCD monitors. Page  19 . LEDs instead of tube lights / Compact Fluorescent Lamps  low-cost biometric rural ATMs.INTANIGBLE PRODUCTS  Number of initiatives to promote Green Banking and Green IT. solar powered ATMs etc.

AUGMENTED PRODUCTS SBI NRI facilitation center to offer matrimonial assistance  Inaugurated country's first ever NRI facilitation center  Internal database of prospective grooms and brides for matrimonial services Page  20 .

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