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In my term paper I had to discuss 7ps of ICICI bank. 7ps means what the marketing mix they used for promoting their products. It is usually a strategies used by icici bank for promoting their products, or we can say that for promoting their sales. As we know ICICI (Industrial Credit and Investment Corporation of India) is largest private sector bank by market capitalization and second largest overall in term off assets.
The growth of the ICICI over the years has proved repeatedly the ability of the institution in adopting new technologies and products. It is through its ability to nourish new products and services that the institution has become a household name in a very short span of time. ICICI Bank decided to target India’s burgeoning middle class and corporate’s by offering a high level of customer service and efficiency that rivaled the foreign banks, on a much larger scale, at a lower cost.
ICICI offer very services which is very good in comparison to other banks. Credit cards services of ICICI bank are also very good as comparison of other banks. In my term paper I also compare ICICI with HDFC and AXIS bank.
INTRODUCTION TO ICICI BANK:
ICICI Bank (Industrial Credit and Investment Corporation of India) is India’s largest private sector bank by market capitalisation and second largest overall in terms of assets. Total assets of Rs. 3,562.28 billion (US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the nine months ended December 31, 2009. The Bank also has a network of 1,700+ branches (as on 31 March, 2010) and about 4,721 ATMs in India and presence in 18 countries, as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank has got its equity shares listed on the stock exchanges at Kolkata and Vadodara, Mumbai and the National Stock Exchange of India Limited, and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in 18 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK, offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.
ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank’s current and savings account (CASA) ratio increased to 30% in 2008 from 25% in 2007.
Sensing an untapped opportunity, ICICI Bank decided to target India’s burgeoning middle class and corporate’s by offering a high level of customer service and efficiency that rivalled the foreign banks, on a much larger scale, at a lower cost. ICICI has around 27 subsidiaries. Of course, the most prominent and most successful among them is the ICICI bank.ICICI Bank is one of the Big Four Banks of India with State Bank of India, Axis Bank and HDFC Bank.
7 P’S OF ICICI BANK
ICICI Bank offers wide variety of Deposit Products to suit our requirements. Coupled with convenience of networked branches/ over 1800 ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep.
Savings Account: ICICI Bank offers a power packed Savings Account with a host of convenient features and banking channels to transact through.
Senior Citizen Services: The Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring more convenience and enjoyment in your life.
Young Stars: It’s really important to help children learn the value of finances and money management at an early age. Banking is a serious business, but we make banking a pleasure and at the same time children learn how to manage their personal finances.
Fixed Deposits: Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the Fixed Deposit from ICICI Bank.
Recurring Deposits: Through ICICI Bank Recurring Deposit you can invest small amounts of money every month that ends up with a large saving on maturity. So you enjoy twin advantages- affordability and higher earnings.
Roaming Current Account: Only Roaming Current Account from ICICI Bank travels the distance with your business. You can access your accounts at over 500 networked branches across the country.
Bank @ Campus: Thanks to [email protected], child can now surf the Net and access all the details of his / her account at the click of a mouse! No need to visit the bank branch at all.
ICICI Bank Salary Account: is a benefit-rich payroll account for Employers and Employees. As an organization, you can opt for our Salary Accounts to enable easy disbursements of salaries and enjoy numerous other benefits too.
Along with Deposit products and Loan offerings, ICICI Bank assists you to manage your finances by providing various investment options such as:
ICICI Bank Tax Saving Bonds
Government of India Bonds
Investment in Mutual Funds
Initial Public Offers by Corporate
Investment in “Pure Gold”
Foreign Exchange Services
Senior Citizens Savings Scheme, 2004
3. ANYWHERE BANKING
ICICI Bank is the second largest bank in the country. It services a customer base of more than 5 million customer accounts through a multi-channel access network. This includes more than 500 branches and extension counters, over 1800 ATMs, Call Centre and Internet Banking.
Thus, one can access the various services ICICI Bank has to offer at anytime, anywhere and from anyplace.
a) Home Loans
b) Personal Loans
c) Car Loans
d) Two Wheeler Loans
e) Commercial Vehicle Loans
f) Loans against Securities
g) Farm Equipment Loans
h) Construction Equipment Loans
i) Office Equipment Loans
j) Medical Equipment Loans
a) Credit Card
b) Debit cum ATM Card
c) Travel Card
d) VBV (VERIFY BY VISA): Verified by Visa (VBV) is a new service from VISA that lets us shop securely online with our existing Visa Credit card. Usable only on Verified by Visa sites, this service through a simple checkout process, confirms our identity when we make purchases.
e) Master Card Securecode: MasterCard® SecureCodeâ„¢ is an easy to use, secured online payment service from ICICI Bank that lets you shop securely online with your existing ICICI Bank MasterCard® Credit Card. This service through a simple checkout process, confirms your identity when you make purchases on the Internet.
f) American express card: With ICICI Bank American Express Credit Card just shop online as you normally would and then enter your correct card information and billing address. We would validate the billing address that we provide with our records and authenticate our transaction. It’s that simple and helps in safeguarding our online transaction.If we are unsure what is our billing address on record with us, simply call our 24-hour Customer Care numbers given on the back of the card for a quick check.
6. DEMAT SERVICES
ICICI Bank Demat Services boasts of an ever-growing customer base of over 7 lacs account holders. In their continuous endeavor to offer best of the class services to our customers we offer the following features:
Digitally signed transaction statement by e-mail.
Corporate benefit tracking.
e-Instruction facility – facility to transfer securities 24 hours a day, 7 days a week through Internet Interactive Voice Response (IVR) at a lower cost.
Dedicated specially trained customer care executives at their call centre, to handle all queries.
7. MOBILE BANKING
With ICICI Bank, banking is no longer what it used to be. ICICI Bank offers Mobile Banking facility to all its Bank, Credit Card and Demat customers. ICICI Bank Mobile Banking enables you to bank while being on the move.
8. NRI SERVICES
ONLINE MONEY TRANSFER facility available to NRIs worldwide through www.money2India.com at the click of a button!
FREE Money transfers into accounts with over 30 banks in India
Demand Drafts issued and payable at over 1250 locations in India
ONLINE Tracking of the status of your funds
SUPERIOR Exchange rates
OFFLINE MONEY TRANSFER facility is also available across geographies through
our local branches and in association with partner banks/ exchange houses.
The pricing decisions or the decisions related to interest and fee or commission charged by ICICI are found instrumental in motivating or influencing the target market.
The RBI and the IBA are concerned with regulations. The rate of interest is regulated by the RBI and other charges are controlled by IBA.
The pricing policy of a bank is considered important for raising the number of customers’ vis-à-vis the accretion of deposits. Also the quality of service provided has direct relationship with the fees charged. Thus while deciding the price mix customer services rank the top position.
The ICICI bank has 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. Since both the strategies throw a vice- versa impact, it is important that ICICI bank attempt to establish a correlation between two. It is essential that both the buyers as well as the sellers have feeling of winning.
Pricing ICICI Bank Products Starts With Three Basic Questions.
1. What rate does the bank need to meet its financial objectives?
The answer is, “it depends.”
Some considerations for loan and deposit pricing are:
ROA or ROE objectives
Related income taxes
Earning assets to total assets
Cost to service earning assets being funded or deposits funding an earning asset
Pricing for the activities and risks associated with the product
Rate tiers based on product balances
Asset and liability mix
Another element to consider in the pricing of earning assets is the risk of loss. Most notably, this is relevant in loan pricing. Many banks assign a risk weighting to individual loans over a certain size or based on loan type and assign a credit risk charge based on those ratings.
Customer relationships are difficult 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.
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 more competitive on certain deposit products if they have fewer maturities in a particular timeframe or less total outstanding balances in a product line.
2. What is the market rate for the core product?
Customers have more distribution channels available to them today than at any other point in history. In the past 10 years, the number of bank locations has increased 20%. Of course, there are the mortgage bankers, the Internet, and a host of other financial service providers competing for your customer’s loan and deposit business.
The point is, the competitive marketplace always ensures that if a financial institution is charging too much for loans or paying too little for deposits, its share of the market will likely dwindle as existing and prospective customers find alternative providers. You can do all the math you want to determine required pricing points, but if your pricing is uncompetitive, your market share will shrink.
3. What would the bank have to do to sales and operations to make its rates the most competitive in its market?
Pricing is a key issue for the associates who sell bank products to your customers. The fact is, lenders want the lowest rates, and people dealing with depositors want to pay the highest rates. You need the right balance of fee income, strategies to reduce operating costs, and a healthy asset and liability mix to change your required pricing.
This component of marketing mix is related to the offering of services. The services are sold through the branches.
The 2 important decision making areas are: making available the promised services to the ultimate users and selecting a suitable place for bank branches.
The number of branches OF ICICI: 1900 in India and 33 in Mumbai.
What attract peoples for choosing ICICI?
The selection of a suitable place for the establishment of a branch is significant with
the view point of making place accessible.
The safety and security provisions a
Convenient to both the parties, such as the users and the bankers
Near to station and located on s. v. road well crowded area.
Advertising: Television, radio, movies, theatres
Print media: hoardings, newspaper, magazines
Publicity: road shows, campus visits, sandwich man, Sponsorship
Sales promotion: gifts, discount and commission, incentives, etc.
Personal selling: Cross-sale (selling at competitors place),personalized service
Telemarketing: ICICI one source Call center (mind space)
Flow of activities: all the major activities of ICICI banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations. The activities have been segregated into various departments accordingly.
Standardization: ICICI 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 forms, documentations etc. Standardization saves a lot of time behind individual transaction.
Customization: There are specialty counters at each 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 specific pattern is followed to minimize time taken.
Simplicity: in ICICI banks various 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 in 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.
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. There are many examples of physical evidence, including some of the following:
The building itself (such as prestigious offices or scenic headquarters)
The physical evidences also include signage, reports, punch lines, other tangibles, employee’s 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 Company’s financial reports are issued to the customers to emphasis or credibility.
Tangibles: bank gives pens, writing pads to the internal customers. Even the passbooks, chequebooks, etc reduce the inherent intangibility of services.
Punch lines: punch lines or the corporate statement depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers.
Employee’s dress code: ICICI bank follows a dress code for their internal customers. This helps the customers to feel the ease and comfort.
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 organisation to its customers.
In a bank organization, employees are essentially the contact personnel with customer. Therefore, an employee plays an important role in the marketing operations of a service organisation.
To realize its potential in bank marketing, ICICI 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 way 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.
The starting point in internal marketing is that the employees are the first internal market for the organization.
The basic objective of internal marketing is to develop motivated and customer conscious employees.
A service company can be only as good as its people. A service is a performance and it is usually difficult to separate the performance from the people.
If the people don’t meet customers’ expectations, then neither does the service. Therefore, investing in people quality in service business means investing in product quality.
COMPARISON OF ICICI WITH OTHER BANKS:
ICICI bank market capitalization is more then other banks. It has market capitalization is 105,709.63 cr, while HDFC is 91,326.65 cr and AXIS bank is 91,326.65 cr.
ICICI has net interest income is 25,706.93 cr, which is higher then other banks. While net interest income of HDFC is 16,172.91 cr and AXIS bank is 11,638.02 cr.
Net profit of ICICI bank is 4,024.98 cr, which is again higher then other banks. While net profit of HDFC is 2,948.69 cr and AXIS bank net profit is 2,514.53 cr.
Total assets of ICICI bank are 379,300.96 cr, which is higher then other banks. While total assets of HDFC bank is 183,270.78 cr and total assets of AXIS bank is 147,722.06 cr.
ICICI bank’s headquarters in Mumbai is vary huge, then other bank headquarters.
In the past two years, the bank has spent Rs 185 crore on advertising and publicity (In comparison, HDFC has spent Rs 100 crore).
HDFC Bank’s retail deposits are about Rs 23,000 crore (Rs 230 billion). Even in home loans, ICICI Bank commands 30 per cent of the market, having eaten into housing finance pioneer, HDFC’s share.
ICICI Bank has issued 3 million credit cards — that is more than twice the number of HDFC Bank’s credit card users. However, industry observers point out that ICICI Bank’s effective users for credit cards may not be high.
As a result of its perceptive branch strategy, ICICI Bank has acquired more than five million internet, mobile and telephone banking customers, i.e. much greater then HDFC and AXIS bank.
ICICI strategy for promotion of financial inclusion:
ICICI Bank has taken up specific initiatives to ramp up financial literacy as well as
intermediation to the underserved and under banked segments in both rural and
ICICI Bank’s financial intermediation models, both through the microfinance institutions and business correspondents have been designed to build a repository of information with regard to financial behaviour of the customers.
ICICI Bank’s Financial Intermediation Models:
With focus on low-income segments, ICICI Bank has come up with innovative
ICICI Bank works closely with MFIs and NGOs to adapt its products to suit consumer
Two innovative models have helped achieve scale in serving the low-income
a) Partnership Model being implemented with NGOs and MFIs: Under this model
ICICI Bank forges an alliance with existing MFIs wherein the MFI undertakes the
promotional role of identifying, training and promoting the micro-finance
clients and the ICICI Bank finances the clients directly on the recommendation
of the MFI, so the customer and portfolio resides in the Bank’s book.
b) Securitisation of Portfolios of MFIs: Under this model ICICI Bank buys out
portfolios from MFIs. The MFI continues to service the clients and acts as the
collection agent. Here again, the MFI shares the credit risk with the Bank. A
variant of the securitisation model is ‘on-tap securitisation’, wherein the MFI
receives an advance purchase consideration to create a portfolio of loans that
could then be periodically sold to ICICI Bank.
The Bank has been actively looking at technology solutions to scale up the micro
finance portfolio. Further, the Bank has been considering adopting a ‘Core Banking
System’ (CBS) for managing the loan portfolio generated under the partnership
model. In this regard, the Bank has found an able partner in FINO to provide
technology solutions to the micro finance sector. The technology solution
comprises of core banking and smart card systems. In light of the technology
solutions available through FINO, the Bank has designed a new process for
delivering loans under the partnership model.
Some of the key aspects where a strong technology platform will add value to the
micro finance operations include reduction in transaction cost; better data
management and reporting capacities and capability to interface with multiple
peripherals, etc. This will also enable enhanced disclosure and transparency in the
operations of MFIs, setting a platform for robust securitisation / buyout
opportunities to meet the priority sector lending objectives of the regulator.
In line with the RBI guidelines ICICI Bank employs Business Correspondent (BC)
model to extend financial services, especially the much-needed savings services to
In the pilot stage, the transactions by BC are being done with the help of an ‘e-Passbook’ and an Authentication Device (AD). The e-Passbook can display and store
the customer KYC information, customer account details and the transactions in
each account. It also has a unique feature of biometric authentication by the way
of fingerprints, thereby mitigating the risk related to PIN (Personal Identification
Number) in the rural scenario.
ADs provide Customer interface with user-friendly menu options, enabling
transactions. An authorized operator is enrolled by capturing the fingerprints of all
the 10 fingers to mitigate fraud risk, can operate each AD. The transaction is
recorded on the AD, which at specific intervals would be uploaded and updated in
the Bank’s system through a normal telephone line, which is a widely available
infrastructure even in remote rural areas. Further connectivity through GSM and
CDA would also be made possible to ensure that the transaction details are
updated in the Bank’s system at higher frequency.
ICICI Bank offers a complete suite of products and services to meet the individual
financial requirements of customer segments. Savings, investments and insurance
products are made available to its rural and agri customer base. The Bank also
offers microfinance services to low-income households and crop loans, farm
equipment loans, commodity based loans to farmers.
ICICI Bank employs delivery channels backed by technological innovations to
achieve scale and outreach in a sustainable manner. The Bank’s channel
architecture includes branch and non-branch channels. Branches act as a business
hub providing banking services on the one hand, while facilitating the fulfilment of
products that have been sourced by the business facilitators and business
Non-branch channels are of two types, business facilitators and business
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