1.1 INTRODUCTION TO THE TOPIC

PRIVATE SECTOR BANKS:

All the banks in India were earlier private banks. They were founded in the pre-

independence era to cater to the banking needs of the people. But after

nationalization of banks in 1969 public sector banks came to occupy dominant role

in the banking structure. Private sector banking in India received a fillip in 1994

when Reserve Bank of India encouraged setting up of private banks as part of its

policy of liberalization of the Indian Banking Industry. Housing Development

Finance Corporation Limited (HDFC) was amongst the first to receive an 'in

principle' approval from the Reserve Bank of India (RBI) to set up a bank in the

private sectors.

Private Banks have played a major role in the development of Indian banking

industry. They have made banking more efficient and customer friendly. In the

process they have jolted public sector banks out of complacency and forced them

to become more competitive.

A countrywide survey reveals that while the private banks have got a tight grip on

the purse strings of the salaried class and professionals in the country, a large

majority of customers in Corporate India still prefer the time-tested public sector

banks for services ranging from securing credit cards to making bond investment

and fixed deposits.

Private Sector Banks in India: Axis Bank, Bank of Rajasthan, Bharat Overseas

Bank, Catholic Syrian Bank, Centurion Bank of Punjab, City Union Bank,

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Development Credit Bank, Dhanalakshmi Bank, Federal Bank, Ganesh Bank of

Kurundwad, HDFC Bank, ICICI Bank, IndusInd Bank, ING Vysya Bank,

Jammu & Kashmir Bank, Karnataka Bank Limited, Karur Vysya Bank, Kotak

Mahindra Bank.

1.2 HISTORY

HISTORY OF PRIVATE SECTOR BANKS:

Private banking in India was practiced since the begining of banking system in

India. The first private bank in India to be set up in Private Sector Banks in India

was IndusInd Bank. It is one of the fastest growing Bank Private Sector Banks in

India. IDBI ranks the tenth largest development bank in the world as Private Banks

in India and has promoted a world class institution in India.

The first Private Bank in India to receive an in principle approval from the Reserve

Bank of India was Housing Development Finance Corporation Limited, to set up a

bank in the private sector banks in India as part of the RBI's liberalization of the

Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank

Limited with registered office in Mumbai and commenced operations as Scheduled

Commercial Bank in January 1995.

ING Vysya, yet another Private Bank of India was incorporated in the year 1930.

Bangalore has a pride of place for having the first branch inception in the year

1934. With successive years of patronage and constantly setting new standards in

banking, ING Vysya Bank has many credits to its account.

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2.1 MARKETING STRATEGY

HISTORY OF MARKETING STRATEGY

The history of marketing strategy is described from its roots in early marketing and later corporate management to its present state. The historical perspective demonstrates how various strategic approaches, such as Borden’s “marketing mix”, Dean’s “Pioneer Pricing Strategies” Smith’s “Differentiation and Segmentation Strategies”, Forrester’s “Product Life Cycle”, Andrew’s SWOT Analysis, Ansoff’s “Growth Strategies”, Porter’s “Generic Strategies” and BCG’S “Growth-Share Matrix”, can be integrated into a comprehensive conceptual framework for marketing strategy.

DEFINITION AND MEANING:

It 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 advantage. A marketing strategy should be cantered around the key concept that customer satisfaction is the main goal.

Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources.

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KEY PART OF THE GENERAL CORPORATE STRATEGY

A marketing strategy is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement

2.2 TYPES OF MARKETING STRATEGIES

Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below:

Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies:

Leader Challenger Follower Niches Porter generic strategies - strategy on the dimensions of strategic scope and

strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow.

Product differentiation (broad) Cost leadership (broad) Market segmentation (narrow)

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Innovation strategies - This 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:

Pioneers Close followers Late followers Growth strategies - In this scheme we ask the question, “How should the

firm grow?” .There are a number of different ways of answering that question, but the most common gives four answers:

Horizontal integration Vertical integration Diversification Intensification

2.3 BENEFITS OF MARKETING STRATEGY

Brand and marketing strategists provide a variety of benefits. First, they provide a single source of responsibility for managing brand and marketing activities. Having a "Brand Champion" can be a very effective way of managing the marketing activities for a brand to ensure maximum benefit. In many cases, having marketing responsibilities dispersed among multiple individuals for a single brand results in a lack of focus and inconsistent messages to the consumer, assuming that marketing occurs at all. Furthermore, it is difficult for an individual with many responsibilities to acquire the depth of knowledge of the market necessary to make good marketing decisions.

Brand and marketing strategists fundamentally seek to segment the market for a product, identify those segments that are most attractive and should be targeted, and identify the most effective ways to appeal to the attractive target segments. Their objective is to identify what prices, distribution channels, and advertising will most effectively reach the targeted consumer and induce them to purchase the product. Determining how much promotional spending should be directed towards

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the channel versus the end consumer is very important in many industries. The improved efficiency of marketing spending is a significant advantage derived from the use of brand and marketing strategists.

Brand and marketing strategists also concern themselves with all aspects of the brand, including its name, packaging, labeling, and product quality and cost. Because of their closeness to the consumer, brand and marketing strategists can be important resources to guide research and development activities to improve a brand as well. Brand and marketing strategists also are in excellent position to monitor competitive activities and determine what responses are necessary.

Whether to introduce brand extensions or not, whether or not the expense of maintaining multiple brands is worthwhile, and how a brand should be positioned are also decisions customarily made by brand and marketing strategists. Frequently, it is beneficial to maintain multiple brands to appeal to different target market segments even within a single product category. Fundamentally, brand and marketing strategists seek to maximize the efficiency of a firm's sales and marketing efforts to attract as much profitable business as possible at the lowest possible expense. Identifying the appropriate mix of promotional activities, product offerings, and research and development activities yields considerable financial benefit to the firm.

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3. MARKETING MIX

Meaning and Definition:

Marketing Mix means to collect and mix the resources of marketing in the manner that objects of the enterprise may be achieved and maximum satisfaction may be provided to the consumers. The term marketing mix is used to describe a combination of four elements – the product, price, physical distribution and promotion. These are popularly known as “Four P’s”. A brief description of the four elements of marketing mix (Four P’s) is.

Product: The product itself is the first element. Products most satisfy consumer needs. The management must, first decide the products to be produced, by knowing the needs of the consumers.

Price: The second element to affect the volume of sales is the price. The market or announced amount of money asked from a buyer is known as basic value placed on a product.

Promotion: The product may be known to the consumers. Firms must undertake promotion work-advertising, publicity, personal selling etc. which are the major activities.

Place: Physical distribution is the delivery of products at the rights time and at the right place. The distribution mix is the combination of decisions relating to marketing channels, storage facility, inventory control, location transportation warehousing etc.

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Marketing Mix

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Product Product variety

Quality

Design

Features

Brand Name

Packaging Size

PriceList price

Discounts

Allowances

Payment period

Credit cards

PromotionSales promotion

Advertising

Sales force

Public relations

PlaceChannelsCoverage

Assortments

Locations

Inventory

Transport

4. MARKETING IN BANKING

Marketing approach in banking sector had taken significance after 1950 in western

countries and then after 1980 in Turkey. New banking perceptiveness oriented

toward market had influenced banks to create new market. Banks had started to

perform marketing and planning techniques in banking in order to be able to offer

their new services efficiently. Marketing scope in banking sector should be

considered under the service marketing framework. Performed marketing strategy

is the case which is determination of the place of financial institutions on

customers’ mind. Bank marketing does not only include service selling of the bank

but also is the function which gets personality and image for bank on its

customers’ mind. On the other hand, financial marketing is the function which

relates uncongenitalies, differences and non similar applications between financial

institutions and judgement standards of their customers.

The reasons for marketing scope to have importance in banking and for banks to

interest in marketing subject can be arranged as:

Change in demographic structure: Differentiation of population in the number

and composition affect quality and attribute of customer whom benefits from

banking services. Intense competition in financial service sector: The competition

became intense due to the growing international banking perceptiveness and

recently being non limiting for new enterprises in the sector. Increase in

liberalization of interest rates has intensified the competition. Bank’s wish for

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increasing profit: Banks have to increase their profits to create new markets, to

protect and develop their market shares and to survive on the basis of intense

competition and demographic chance levels. The marketing comprehension that is

performed by banks since 1950 can be shown as in following five stages:

1. Promotion oriented marketing comprehension

2. Marketing comprehension based on having close relations for customers

3. Reformist marketing comprehension

4. Marketing comprehension that focused on specializing in certain areas

5. Research, planning and control oriented marketing comprehension

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5. THE MARKETING MIX IN BANKING SECTOR

SERVICE:

Recently, banks are in a period that they earn money in servicing beyond selling

money. The prestige is get as they offer their services to the masses. Like other

services, banking services are also intangible. Banking services are about the

money in different types and attributes like lending, depositing and transferring

procedures. These intangible services are shaped in contracts. The structure of

banking services affects the success of institution in long term. Besides the basic

attributes like speed, security and ease in banking services, the rights like

consultancy for services to be compounded are also preferred.

PRICE

The price which is an important component of marketing mix is named differently

in the base of transaction exchange that it takes place. Banks have to estimate the

prices of their services offered. By performing this, they keep their relations with

extant customers and take new ones. The prices in banking have names like

interest, commission and expenses. Price is the sole element of marketing variables

that create earnings, while others cause expenditure. While marketing mix

elements other than price affect sales volume, price affect both profit and sales

volume directly. Banks should be very careful in determining their prices and price

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policies. Because mistakes in pricing cause customers’ shift toward the rivals

offering likewise services.

DISTRIBUTION

The complexities of banking services are resulted from different kinds of them.

The most important feature of banking is the persuasion of customers benefiting

from services. Most banks’ services are complex in attribute and when this feature

joins the intangibility characteristics, offerings take also mental intangibility in

addition to physical intangibility. On the other hand, value of service and benefits

taken from it mostly depend on knowledge, capability and participation of

customers besides features of offerings. This is resulted from the fact that

production and consumption have non separable characteristics in those services.

Most authors argue that those features of banking services make personal

interaction between customer and bank obligatory and the direct distribution is the

sole alternative. Due to this reason, like preceding applications in recent years,

branch offices use traditional method in distribution of banking services.

PROMOTION

One of the most important element of marketing mix of services is promotion

which is consist of personal selling, advertising, public relations, and selling

promotional tools.

PERSONAL SELLING

Due to the characteristics of banking services, personal selling is the way that most

banks prefer in expanding selling and use of them. Personal selling occurs in two

ways. First occurs in a way that customer and banker perform interaction face to

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face at branch office. In this case, whole personnel, bank employees, chief and

office manager, takes part in selling. Second occurs in a way that customer

representatives go to customers’ place. Customer representatives are specialist in

banks’ services to be offered and they shape the relationship between bank and

customer.

ADVERTISING

Banks have too many goals which they want to achieve. Those goals are for

accomplishing the objectives as follows in a way that banks develop advertising

campaigns and use media.

1. Conceive customers to examine all kinds of services that banks offer

2. Increase use of services

3. Create well fit image about banks and services

4. Change customers’ attitudes

5. Introduce services of banks

6. Support personal selling

7. Emphasize well service

Advertising media and channels that banks prefer are newspaper, magazine, radio,

direct posting and outdoor ads and TV commercials. In the selection of media,

target market should be determined and the media that reach this target easily and

cheaply must be preferred.

Banks should care about following criteria for selection of media.:

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1. Which media the target market prefer

2. Characteristics of service

3. Content of message

4. Cost

PUBLIC RELATIONS

Public relations in banking should provide;

1. Establishing most effective communication system

2. Creating sympathy about relationship between bank and customer

3. Giving broadest information about activities of bank.

It is observed that the banks in Turkey perform their own publications, magazine

and sponsoring activities.

SELLING PROMOTIONAL TOOLS

Another element of the promotion mixes of banks is improvement of selling.

Mostly used selling improvement tools are layout at selling point, rewarding

personnel, seminaries, special gifts, premiums, contests.

DEVELOPMENT IN MARKETING SCOPE AT THE ASPECT OF

SERVICE MARKETING

Marketing scope develops day to day. These developments carry special

significance for service sector in which customer and service producer interact

closely.

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INTERNAL MARKETING

Especially in service sector like external relations, internal relations also have

significance. It requires finding and keeping successful personnel. For personnel of

the organization to be considered their own goals and service situation, values of

the organization are sold to them. The communication techniques carried out for

customers are also performed for the personnel in internal marketing and this two

techniques go together. For example, the ads that aim creating firm’s image should

be prepared with regarding to audience which is composed of firm’s personnel.

NETWORK MARKETING

This approach takes the organization as a sequence which involves producer and

customer that market services to each other in the organization. In this structure,

the activities of departments that compose organization would be more focused on

market. This will also affect the structure of organization.

RELATIONSHIP MARKETING

It was mentioned that close relationship was established between producer and

customer in service sector. In addition to this, life cycle of a customer relationship

was also mentioned under the product outline. According to the researchers,

maintaining the relationship for extant customer increases the profit of firms. It

should be emphasized that this fact has an importance for service sector.

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6. IMPORTANCE OF MARKETING STRATEGY IN

CURRENT SCENARIO:

Since the inception of globalization in India, banking sector has undergone various

changes. Introduction of asset classification and prudential accounting norms,

deregulation of interest rate and opening up of the financial sector made Indian

banking sector competitive. Encouragement to foreign banks and private sector

banks increased competition for all operators in banking sector. The protective

regime by the authority is over. Indian banks are exposed to global competition.

Even competition within the country has increased manifold. The almost monopoly

position enjoyed by the public sector banks of India is no more in existence. Under

this development Indian banks needs to reinvent the marketing strategy for growth.

India is a country where there is three tire level of geographical area development.

There are full fledged urban areas covering the metropolitan cities and other big

cities. On the other hand there are underdeveloped rural areas too. In between these

two extreme there is semi urban areas also covering small towns. Prior to

nationalization of banks in India, banking was concentrating in the urban areas

only. However, after nationalization of 14 large commercial banks in India rural

banking was started. To day the scene of Indian banking is different than what it

was on the eve of nationalization. Today nearly half of the total branches of the

banks are found in the rural areas. However, the spread of the bank in Indian rural

and semi urban areas are highly different from state to state and region to region.

Many states have fewer networks of bank branches in the rural areas. Under such

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scenario different marketing approach for different areas is required. If the bank

follows the same marketing strategy for all areas the success would be difficult.

Marketing approach for urban areas The urban areas of India are developed taking

into account all parameters of development. The level of income of the people, the

literacy rate and level of education as well as awareness of the people about rights

of the customer are higher than that of the rural and even semi urban areas. Thus

here for effective bank marketing different approach is necessary than that of rural

areas. Here the marketing strategy should be based on customer service and the use

of modern technology in banking. Under competitive environment for the success

of the business, better customer service is of paramount importance. Attracting

new customers and retaining existing customers is possible only with customer

service. Use of modern technology in urban areas will also go long way for

marketing of banking services. Technology based service like credit card, debit

card, ATM, anywhere banking, internet banking, and mobile banking are necessary

for urban areas. This is because it enables customers to perform banking

transactions at their convenience. Business hours of a bank are also an important

factor for urban banking. Banking services for long hours, say 12 hours and seven

days a week is preferred by urban customers. It is suitable to urban life style.

In India many private sector banks, especially co-operative banks and now even

some of the public sector banks have also started this practice and they find it

successful. To attract business and wholesale customers, banks need to adopt

technology based product and service which is suitable to such class of customer.

For instance RTGS, collection of out station cheques, issuing the cheques at par at

any branch in the country, cash management facility, DD boutiques etc. are

necessary.

Another strategy for effective marketing is bank need to change the focus from the

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traditional banking to universal banking. In urban areas the extent and variety of

economic activities demands that one institution should meet all financial need of a

customer. Under such an expectation of people universal banking would prove

successful approach for bank marketing. The term ‘universal banking’ in general

refers to the combination of commercial banking and investment banking, i.e.,

issuing, underwriting, investing and trading in securities. In a very broad sense,

however, the term universal banks refers to those banks that offer a wide range of

financial services, beyond commercial banking and investment banking, such as,

insurance. The idea is to conduct banking and allied activities under one roof. Such

allied activities may include credit cards, asset management, housing finance and

insurance, all of which are run concurrently with core banking operations. A

universal bank is a supermarket for financial products. Under one roof, corporate

can get loans and avail of other handy services, while individuals can bank and

borrow. For increasing customer base and retention of the existing cliental

universal banking approach is effective strategy. Universal banking offers number

of benefits to customers as well as the banks. For instance, economies of scale

arise in multi-product firms because costs of offering various activities by different

units are greater than the costs when they are offered together. The wide range of

financial products and services offered holds a greater appeal for the customer than

specialized banks due to the comprehensive service provided by a universal bank.

This is one of the major factors which is useful for any bank to face competition

successfully and increase their market share. Modern banking is heavily depending

upon retail banking. To attract retail customer this approach is ideal. Empirical

study clearly shows that all most all banks are taking retail customers seriously and

focusing their marketing strategy towards them. Universal banking with focus on

retail customers made the ICICI banks to acquire first position in Indian banking

sector. Other banks of India are also adopting ICICI model for growth.

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Universal banking approach is beneficial to bank also. For banks economies of

scale relate to cost-savings through sharing of overheads and improving

technology by jointly providing generically similar groups of services. Since

universal banking basically provides financial services, the inputs like manpower,

infrastructure is more or less same. Necessary changes in the inputs can be made

easily. For instance training can be given to staff for providing different financial

services to customers. Moreover the most important benefit for the bank is that it is

useful to increase the fee based income of the bank. Financial sector passing from

lower interest rate regime at present and added to this the process of

disintermediation is affecting the main and the traditional source of income for the

banks i.e. interest income. All banks are striving hard to increase their fee based

income to improve their bottom line. Universal banking can help the banks here

positively.

Marketing approach for rural areas prior to nationalization of banks in 1969, the

rural areas were virtually without banking facility. At that time unorganized sector

was dominating in the rural finance. After nationalization of banks in 1969

branches of the banks were started gradually in the rural areas also. To day more

than 50 percent branches of the banks are found in the rural areas. However, the

distribution of banks in the rural areas is highly uneven. In different state the extent

of rural banking is different. Though some of the states have good performance in

the rural banking but in spite of that unorganized sector is still dominating in the

rural banking. It means here the nature of competition is different. Here banks have

to face competition with the unorganized sector. Moreover the rural banking is

highly regularized activity by the Government in India. Lending as well as interest

rate is regularized. Thus under such environment different marketing approach is

required. For effective rural marketing product development, promotion and

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communication is important. All these parameters banks have to balance with

socio-economic factors prevailing in the rural areas. Here bank need to innovate

product that could attract the depositors. Various loan schemes that are suitable for

them for getting funds at right time and also they find convenient to repay. For

instance traditional saving bank account may be given a fixed deposit concept that

once a particular limit of balance is reached the funds from saving account is

automatically converted into fixed deposit attracting higher interest rate. Same way

giving more liquidity status to fixed deposit account. In some of the states of India

there is considerable amount of NRI deposits. Banks need to develop some scheme

which would attract them to bank with. For loans and advances products which are

suitable to farmers, small traders, small scale agro based rural industries are

already in existence. Banks need to see that how value addition can be made to

these existing schemes. Banks also needs to tie up with Non Government

Organizations and various Self Help Groups for different types of loans, micro

financing etc. This will help the bank for building good image and reputation in the

rural areas over and above the business. Another potential area which can be

explored by the banks in the rural area is retail banking. With the steady increase in

the income of the rural people there is ample scope for retail loan products like

housing loans and loans for consumer durables. 5 Marketing through customer

services in rural areas is different from that of urban areas. Here personalized

banking is the success mantra for banks. Because of high level of illiteracy people

prefer to undertake banking transaction themselves. They hesitate to depend upon

technology based service. For effective marketing in rural areas bank should have

staff with right soft skill like concern for customers’ problem, positive attitude,

good communication and negotiation skill. At every level of dealing with the

customer bank need to educate them for banking activities and processes. To

attract the customers from the unorganized sector most important factor is to

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provide the borrower the required finance of right amount and at right time.

8. SCOPE OF STUDY OF HDFC BANK

The scope of the study is to know the marketing strategies adopted by SBI

&HDFC bank. It’s not easy for covering all the boundaries for collecting the data.

So, this research study is covering some important aspect. In this research study

analysis the marketing strategies of HDFC bank.

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9. INTRODUCTION TO THE BANK

9.3 OVERVIEW OF HDFC

The Housing Development Finance Corporation Limited (HDFC) was

amongst the first to receive an 'in principle' approval from the Reserve Bank

of India (RBI) to set up a bank in the private sector, as part of the RBI's

liberalization of the Indian Banking Industry in 1994.

The bank was incorporated in August 1994 in the name of 'HDFC Bank

Limited', with its registered office in Mumbai, India. HDFC Bank commenced

operations as a Scheduled Commercial Bank in January 1995.

HDFC is India's premier housing finance company and enjoys an

impeccable track record in India as well as in international markets. Since its

inception in 1977, the Corporation has maintained a consistent and healthy

growth in its operations to remain the market leader in mortgages. Its outstanding

loan portfolio covers well over a million dwelling units. HDFC has developed

significant expertise in retail mortgage loans to different market segments and also

has a large corporate client base for its housing related credit facilities. With

its experience in the financial markets, a strong market reputation, large

shareholder base and unique consumer franchise, HDFC was ideally positioned to

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promote a bank in the Indian environment.

HDFC Bank began operations in 1995 with a simple mission: to be a

“World Class Indian Bank.” We realized that only a single minded focus on

product quality and service excellence would help us get there. Today, we are

proud to say that we are well on our way towards that goal.

HISTORY OF HDFC

HDFC Bank was incorporated in 1994 by Housing Development Finance

Corporation Limited (HDFC), India's largest housing finance company. It was

among the first companies to receive an 'in principle' approval from the Reserve

Bank of India (RBI) to set up a bank in the private sector. The Bank started

operations as a scheduled commercial bank in January 1995 under the RBI's

liberalization policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was

merged with HDFC Bank Ltd., in 2000. This was the first merger of two private

banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for

every 5.75 shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches

to more than 1,000. The amalgamated bank emerged with a base of about Rs.

1,22,000 crore and net advances of about Rs.89,000 crore. The balance sheet size

of the combined entity is more than Rs. 1,63,000 crore.

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BUSINESS OBJECTIVES:

The p r imary ob jec t ive o f HDFC i s to enhance re s iden t i a l

hous ing s tock in the Country through the provision of housing finance in a

systematic and professional Manner, and to promote home ownership. Another

objective is to increase the flow of resources to the housing sector by

integrating the housing finance sector with the overall domestic financial

markets.

Business focus

HDFC Bank deals with three key business segments. - Wholesale Banking

Services, Retail Banking Services, Treasury. It has entered the banking consortia

of over 50 corporate for providing working capital finance, trade

services, corporate finance, and merchant banking. It is also providing

sophisticated product structures in areas of foreign exchange and derivatives,

money markets and debt trading and equity research.

Wholesale banking services

Blue-chip manufacturing companies in the Indian corp to small & mid-sized

corporate and agro-based businesses. For these customers, the Bank provides a

wide range of commercial and transactional banking services, including working

capital finance, trade services, transactional services, cash management, etc. The

bank is also a leading provider of for it’s to corporate customers, mutual funds,

stock exchange members and banks.

Retail banking services

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HDFC Bank was the first bank in India to launch an International Debit Card in

association with VISA (VISA Electron) and issues the MasterCard Maestro debit

card as well. The Bank launched its credit card business in late 2001. By March

2009, the bank had a total card base (debit and credit cards) of over 13 million. The

Bank is also one of the leading players in the “merchant acquiring” business with

over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at

merchant establishments. The Bank is positioned in various net based B2C

opportunities including a wide range of internet banking services for Fixed

Deposits, Loans, Bill Payments, etc.

9.4 Promotions strategy of HDFC Bank

FROM doing cross-selling exercises to organizing school-level painting

competitions, promotional activities are going to be the main focus of HDFC

Bank's marketing strategy this year. HDFC Bank are looking at positioning HDFC

as a one-stop financial supermarket and the objective of the promos is not just

acquisition of new customers, but also looking at creating product awareness,

enhancing usage and also providing value-adds to the customers to reward them

for their faith and loyalty.

The first promo this year is titled Wheels Of Fortune, which will be on during the

month of January. "This promo is targeted at all those customers who avail a

personal loan, car or two-wheeler loan. There will be a lucky draw at the end of the

promo and the winners would get exotic prizes." Also on the cards is a school-level

painting competition on wildlife across cities to promote the Kids Advantage

account.

The next step to these mass promos, would be more personalized promos. "It plan

to send personalized mailers about various products to all those HDFC come in

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contact with during these mass promotions." The bank has also tied up with

Business Today, to sponsor 10,000 copies of the magazine in each metro. The

cover of the sponsored copies would be the December issue of Business Today,

which rated HDFC Bank as the best bank in the country. On the opposite side,

would be an advertorial which would talk about HDFC as a `one-stop financial

supermarket'.

Gold Credit card: For providing the better services to the customers and

promoting their business, HDFC has launched the Gold Credit Cards. It's

overloaded with travel benefits - discounts, cash back offers, air miles redemption.

Platinum Cards Get Additional Benefits:

HDFC Bank Platinum Card Customers Get Additional Benefits compared to Gold /

silver or other entry level cards. For instance, consider this, HDFC Cards has a Co-

Branded Online Shop with Surat Diamonds. By virtue of being HDFC Bank

Customer, you are already getting big discount. Now add any item to your cart and

enter 558818 [6 Starting Digits of Platinum Card], you get additional discount.

This is just one such instance. You also get Petrol Surcharge Waiver, IRCTC

Charges Waived, etc.

Clear Trip Discount to Debit Card Holders

Use your HDFC Bank Debit Card to book any flight, hotel or train & get 10%*

cash back

Domestic Air Offer - Book any Domestic Flight and get 10% cash back on Base

Fare or Rs.250 cash back per booking (whichever is less).

Trains - Book any Train and get 10% cash back or Rs.50 cash back per booking

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(whichever is less) International Air Offer - Book any International Flight and get

10% cash back on Base Fare or Rs.600 cash back per booking (whichever is less).

Hotels Offer - Book any Hotel (Domestic/International) and get 10% cash back on

Base Price or Rs.500 cash back per booking (whichever is less). To avail the cash

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PORTER’S FIVE FORCES THEORY

1. Threat of competitors:

Top Performing Public Sector Banks

a. Andhra Bank

b. Allahabad Bank

c. Punjab National Bank

Top Performing Private Sector Banks

a. ICICI Bank

b. AXIS Bank

c. Kotak Mahindra Bank

2. Threat of new entrants: there have been many new entrants in banking sector

like yes bank

3. Threat of substitutes: investors as a substitute can always invest into the capital

markets instead of depositing in their capital in the bank.

4. Buying power of suppliers: changing policies and guidelines of RBI, interest

rates, CRR and SLR maintained by the banks as per RBI norms.

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5. Buying power of customers: changing scenarios, increasing and decreasing

disposable incomes, other attractive options available to customers.

BCG THEORY: CASH COW

Growth and margins

Having the funds to grow is only half the problem. However, will the company

actually grow? The sluggish rate of growth in the economy suggests that growth

could indeed pose a problem. In fact, in the first quarter of the financial year-ended

2009, HDFC Bank was able to record only a 43 per cent growth in profits. This,

however, may not be good enough to justify the valuation commanded by the

stock. And if, due to the slowdown, the bank is forced to invest in government

securities rather than in loans, which generate higher returns, the margins will be

affected. On the other hand, competition from other banks may increase. Hence it

can be concluded that HDFC BANK stands at cash cow in BCG matrix.

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11. CONCLUSION

Liberalization has really changed the banking industry. It is no longer enough for

banks to just manage money efficiently; they also have to manage customers, who

now have a wide choice of alternatives. The future promises to be even more

exciting, interesting and challenging, thanks to technology.

No longer will banks, or any large organization, treat customers as a group and

segment them into just some demographic and psychographic profiles. The Internet

has enabled us to talk to each customer as an individual, with different needs and

requirements. Products will need to be developed to meet those needs, and services

will become the crucial differentiators. For years, customers were part of the

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banks’ Fixed Assets; now they have moved into the Current Assets category, and it

will be a task keeping them there.

12. BIBLIOGRAPHY

Websites:

http://www.hdfcbank.com/

http://sbi.co.in/

http://www.thehindubusinessline.com

http://www.etstrategicmarketing.com

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