This document analyzes the marketing mix strategies of State Bank of India (SBI). It discusses the 7 Ps of the service marketing mix used by SBI, including product, price, place, promotion, people, physical evidence, and processes. Specifically, it analyzes SBI's expenditures on promotion through advertising and publicity from 2009-2013. The document finds that SBI bases its marketing strategies on the 7 Ps and uses various promotional activities. It also presents trends showing SBI's increasing expenditures on advertising and publicity over time as it works to increase market share against growing competition.
This document analyzes the marketing mix strategies of State Bank of India (SBI). It discusses the 7 Ps of the service marketing mix used by SBI, including product, price, place, promotion, people, physical evidence, and processes. Specifically, it analyzes SBI's expenditures on promotion through advertising and publicity from 2009-2013. The document finds that SBI bases its marketing strategies on the 7 Ps and uses various promotional activities. It also presents trends showing SBI's increasing expenditures on advertising and publicity over time as it works to increase market share against growing competition.
This document analyzes the marketing mix strategies of State Bank of India (SBI). It discusses the 7 Ps of the service marketing mix used by SBI, including product, price, place, promotion, people, physical evidence, and processes. Specifically, it analyzes SBI's expenditures on promotion through advertising and publicity from 2009-2013. The document finds that SBI bases its marketing strategies on the 7 Ps and uses various promotional activities. It also presents trends showing SBI's increasing expenditures on advertising and publicity over time as it works to increase market share against growing competition.
This document analyzes the marketing mix strategies of State Bank of India (SBI). It discusses the 7 Ps of the service marketing mix used by SBI, including product, price, place, promotion, people, physical evidence, and processes. Specifically, it analyzes SBI's expenditures on promotion through advertising and publicity from 2009-2013. The document finds that SBI bases its marketing strategies on the 7 Ps and uses various promotional activities. It also presents trends showing SBI's increasing expenditures on advertising and publicity over time as it works to increase market share against growing competition.
AN ANALYTICAL STUDY OF MARKETING MIX STRATEGIES OF SBI Dr. Deepti Gupta Principal,Shree Satya College Of Higher Education,,Affiliated To Mjpru, Bareilly (U.P),India Amar Singh Research Scholar, Svu, Gajrula (U.P.),India Mohd Rizwan Assistant Professor, Shree Satya Institute Of Management,Affiliated To Uptu, Lucknow (U.P),India
ABSTRACT State Bank of India (SBI) is the largest nationalized commercial bank in India in terms of assets, number of branches, deposits, profits and employees. With the liberalization of the Indian banking industry in the mid-1990s, SBI faced stiff competition from the private sector and foreign banks which resulted in major loss of its market share. Therefore it becomes significant for SBI to come with unbeatable marketing strategies. This paper shows all 7 Ps of service marketing mix used by SBI. Marketing strategies of SBI revealed that banks can base their marketing strategies on various parameters which are broadly in terms of 7Ps of marketing viz., Product, Place, Price, Promotion, People, Physical Evidence and Processes. This Paper also analysis the trend of SBI expenditure on Promotion.. Researchers used graphical presentation to represent the trend of Advertising and Publicity Expenses incurred from the period starting from 2009. Keywords:- SBI, Marketing strategies, 7 Ps of Marketing Mix, Promotion, Advertising and publicity,
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INTRODUCTION Marketing strategy is defined by David Aaker as a practice that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. [1] Marketing strategy comprises all basic and long-term activities in the field of marketing that deal with the examination of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore add to the goals of the company and its marketing objectives. [2] An effectual marketing strategy combines the 4 Ps of the marketing mix. It is designed to congregate the companys marketing objectives by providing its customers with value. The 4 Ps of the marketing mix are related, and combine to create the products position within its target markets.
The service marketing mix is known as an extended marketing mix and is an vital part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery. OBJECTIVES OF THE STUDY To analysis the 7 Ps of Marketing Mix used by SBI. To study Advertising & Publicity Expenses of SBI. To analysis the trend of Advertising & Publicity Expenses of SBI. RESEARCH METHODOLOGY For this study we have collected secondary data through Internet, periodicals, news papers, magazines and books. Internet and annual financial report of SBI are the main sources of data collection. We have collected the data regarding the Marketing Mix of SBI and Annual Advertising and Publicity expenses incurred from secondary data. We used graphical representation to show the trend of expenses incurred. STATE BANK OF INDIA State Bank of India (SBI) is a multinational banking and financial services company based in India. It is a government-owned firm with its headquarters in Mumbai, Maharashtra. As of December 2013, it had assets of US$388 billion and 17,000 branches, including 190 overseas offices, making it the largest banking and financial services company in India by assets. [3][4]
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State Bank of India is one of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and Bank of Baroda. The bank traces its origin to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India. Government of India owned the Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks. [5] With numerous competitors gaining ground in Indian Territory, SBI was facing steady threat of takeover. The exhibit below maps the banking industry using porters five forces model. The model shows that there is huge rivalry in the banking industry and that the customer is the king. Banks that provide high-quality customer service and are responsive to the market in the long run would win.
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Figure 1 - Porters Five Forces Model for Banking Industry
7 PS OF MARKETING MIX USE BY SBI 1.Product:- The product in service marketing mix is intangible in nature. Like material products such as detergent or soap, service products cannot be calculated. Banking Industry can be an brilliant example. At the same time service products are heterogeneous, perishable and cannot be owned. The service product thus has to be designed with care. The given figure shows Product Mix of SBI.
Figure 2 Product Mix 2.Price:- Pricing in case of services is quite more difficult than in case of products. The price of the product depends upon the services provided by the Bank on the individual product to the customers. The pricing strategies of SBI are discussed below. The pricing decisions and the decisions related to interest and fee or commission charged by banks are found instrumental in motivating or influencing the target market The IBA and the RBI are concerned with regulations. The rate of interest is regulated by the RBI and other charges are controlled by IBA. The banking industry is required to frame two- fold strategies. First, the strategy is concerned with interest and fee charged and the second strategy is related to the interest paid. Another component to consider in the pricing of earning assets is the risk of loss. Most notably, this is relevant in loan pricing. Many banks allocate a risk weighting to
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individual loans over a definite size or based on loan type and assign a credit risk charge based on those ratings. Asset and liability mix also impacts pricing results. Generally speaking, banks operating with higher loan-to-asset ratios are able to afford to pay more for deposits. Likewise, banks can afford to be further competitive with sure deposit products if they have fewer maturities in a particular timeframe or less total outstanding balances in a product line. Customer relationships are not easy to assign a value to in the pricing process. Customers will generally press for some price concessions in consideration of other relationships they have with the bank. 3.Place:- The place part of the marketing mix is where the customer receives the product or service. Place in case of services determine where is the service product going to be located. SBI has 17,000 branches in India, as on December 2013, of which 9,851 (66%) were in Rural and Semi-urban areas [6] and had 190 overseas offices extend over 34 countries. The selection of a appropriate place for the establishment of a branch is important with the viewpoint of making places accessible. Researchers find the following reasons why SBI select a specific place as a branch? The safety and security provisions Infrastructure facility Market coverage Convenient to both the parties, such as the users and the bankers 4. Promotion:- Strategies to craft the consumer aware of the existence of a product or service. Promotions have become a serious factor in the service marketing. Visualization tangibilizes services through hoardings, print and TV campaigns or advertisements. Physical representation in services has a good promotional application to customers like use of colors to symbolize status and wealth. Service providers use documentation in their promotions in support of their claims for dependability, responsiveness and popularity. SBI incurred huge Advertising & Publicity Expenses every year which is discuss in the next section of this paper in detail. The given figure shows Promotion Mix of SBI.
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Figure 2 Promotion Mix 4. People:- The word People is used in services marketing into two perspectives. One for employees, i.e., internal marketing while another for customers, i.e., external marketing. In this way the term people indicate both employees and customers in services marketing. All people directly or indirectly involved in the consumption of banking services are an important part of the extended marketing mix. Knowledge Workers, Employees, Management and other Consumers often add significant value to the total product or service offering. It is the employees of a bank which represent the organization to its customers. SBI become conscious in its potential in internal marketing the attraction, development, motivation and retention of qualified employee-customers through need meeting job-products. Internal marketing paves method for external marketing of services. In internal marketing a variety of activities are used internally in an active, marketing like manner and in a coordinated way. 6. Process:- Service process is the way in which a service is delivered to the end customer. A process is a particular operation or method of a series of actions, typically involving multiple steps that often need to take place in defined sequence. Process is something related to: How do people consume services? What processes do they have to go through to obtain the services? Process includes the way things are actually done and the steps taken to achieve bottom line results has been given considerable attention over the years in the areas of manufacturing, engineering, computer programming and banking sector. The process of SBI possess following component.
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Flow of activities: All the major activities of SBI banks follow RBI guidelines. There has to be adhered to sure rules and principles in the banking operations. The activities have been segregated into a range of departments accordingly. Standardization: SBI bank has got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard documentations, forms etc. Standardization saves a lot of time behind individual transaction. Customization: There are specialty counters at every branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives. Number of steps: Numbers of steps are usually specified and a exact pattern is followed to minimize the time taken. Simplicity: In SBI banks a variety of functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to deposits counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards on national boards in national and regional language help the customers further. Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires. 7. Physical evidence:- Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. The physical evidences include signage, reports, punch lines, other tangibles, employee dress code etc. Signage: Each and every bank has its logo by which a person can identify the company. Thus such signages are significant for creating visualization and corporate identity. Financial reports: The Companys financial reports are issued to the customers with emphasis or credibility. Tangibles: Bank gives pens, writing pads to the internal customers. Even the passbooks, checkbooks, etc. reduce the inherent intangibility of services.
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Punch lines: Punch lines or the corporate statement depicts the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers. Employees dress code: SBI bank follows a dress code for their internal customers. This helps the customers to feel the ease and comfort. PROMOTIONAL EXPENSES OF SBI One of the most important Marketing Mix used by SBI is Promotion on which it spent lots of money every year; therefore it is significant to discuss Promotion at a length. In this section of the paper researchers study the Promotional (Advertising and Publicity) Expenses incurred by SBI in last five years (2009 to 2013). The following table and figures show annual Advertising & Publicity expenses of SBI and also shows the percentage change in expenses. Percentage change in annual promotional expenses shows the trend of promotional expenses. Percentage change in annual promotional expenses is calculated as -
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Interpretation: In 2009 SBI incurred Rs.251,22,95,000 as Advertising and Publicity Expenses. Significant increase in Expenses incurred can be noticed in 2011 and 2013. It is also worth standing to notice that in 2010 and 2012 SBI incurred Rs. 224,04,52,000 and Rs. 206,63,27,000 respectively which were comparatively lower than 2009 and 2011. In 2013 SBI incurred most heavy expense in last five year i.e. Rs. 384,35,26,000. REFERENCES 1. Baker, Michael The Strategic Marketing Plan Audit 2008. ISBN 1-902433-99-8. p.3
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2. Homburg, Christian; Sabine Kuester, Harley Krohmer (2009): Marketing Management - A Contemporary Perspective (1st ed.), London. 3. As India's Banks Wait In Fear Of The Rupee Hitting 70 To The Dollar, Here's A List Of The Best 10 Indian Banks By Revenue. Ibtimes.com (2013-09-04). Retrieved on 2013- 12-06. 4. History of the Evolution of SBI volumes 1, 2 and 3 and Banking Beyond Boundaries (Penguin, 2011) 5. "SBI accounts for one-fifth of country's loans". Livemint.com. 25 January 2009. Retrieved 20 August 2010. 6. "Annual Report 2012-13" of SBI. 23 May 2013. Retrieved 10 October 2013. 7. "Annual Report 2011-12" of SBI. 8. "Annual Report 2010-11" of SBI. 9. "Annual Report 2010-09" of SBI. 10. Philip Kotker and Kevin Keller Marketing Management 12e Prentice-Hall of India Private Limited, New Delhi.2007. 11. N.S.Toor, Information Hand Book of Promotions 12th Edition, Skylark Publications, Indian Journal of finance 12. Journal of financial services marketing, .International journal of banking. 13. Rajasekhara Mouly Potluri. (2008). Assessment OF Effectiveness of Marketing communications mix elements in Ethiopian Service Sector. 14. Arun Mittal and Priya Mittal (2009) Consumer Behavior Aspects and Promotion of Banking Services. 15. Gupta, S L and Arun Mittal (2008), Comparative Study of Promotional Strategies of Public and Private Sectors Banks in India, Asia Pacific Business Review, Vol IV, No. 3, pp-87-93. 16. Esha Sharma (2010) Service Buying Behavior in Banking Industry: A Comparative Analysis of Private and Public sector Banksijrm vol no. 1(2010) issue no. 7 (Nov).