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Evolution & marketing of Banking in India
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Marketing Case Study - SBI's SMS Unhappy
A C A S E S T U D Y O N M A R K E T I N G C A M PA I G N B Y S TAT E B A N K O F I N D I A
19 March 2014
SMS Unhappy
Prepared by-
Chanpreet SinghSachin Sharma
Surabhi KalaSwapnil Soni
DoMS, IISc
Course-Marketing Management
Instructor-Prof. R. Srinivasan
2Marketing Case Study - SBI's SMS Unhappy
Index
State Bank of India
Evolution
Present
Operations
Indian Banking sector-post
liberalization
Mobile Phone Proliferation in
India
State Bank of India- campaign
SMS Unhappy
Inception
Launch
Operation
Result
19 March 2014
Response to Questions of Case
Study
o Critical assessment of the SMS
Unhappy program at SBI (SWOT
Analysis)
o SMS Unhappy contribution to
improving retail operation at SBI
(AHP)
o National Level Implementation-
Concerns & Resolutions
(Marketing Environment)
o SMS Unhappy contribution
towards making SBI more
competitive (BCG Matrix)
References
3
State Bank of India- Evolution
Bank of Calcutta
1806
Bank of Bombay
1840
Bank of Madras
1843
Imperial Bank of India
1921
Purpose of Bank
Keeping Cash Account
Loan for Trade
Issuance of Cash Notes
Role of Imperial Bank
Commercial Bank
Bankers’ Bank
GOVT’s BankQuasi-central role
1935
Reserve Bank of India was formed
Imperial Bank of India turned agent of RBI & Commercial Bank
Bank: An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.
4Marketing Case Study - SBI's SMS Unhappy
19 March 2014
State Bank of India- Evolution
Capital Base 11.85 Cr Advances 72 Cr
Deposits 275 Cr Branches 172 no.s
1947 Imperial Bank of India at the time of Independence
1951
1st Five Year Plan by Prime minister Pt J. L. Nehru
Rural development – highest priority
Failure of Imperial Bank of India in this agenda
1955Creation of state partnered bank by taking over Imperial Bank of India
State Bank of India Act 1955
5Marketing Case Study - SBI's SMS Unhappy
19 March 2014
State Bank of India- Present
Industry Banking, financial services
Headquarters
Mumbai, India
Area served Worldwide
Chairman Arundhati Bhattacharya
Revenue INR 2,00,560 Crores
Profit INR 17,916 Crores
Total assets INR 15,66,261 Crores
Employees 295,696Domestic presence International presence
14,816 branchescontributed to 88.37% of total profits
180 overseas offices spread over 34 countries
Rank Bank Country M cap, US$b, 30/04/2013
1 Industrial & Commercial bank of China (ICBC) China 233.63 HSBC Holdings UK 202.4
55 State Bank of India India 28.58
http://www.relbanks.com/worlds-top-banks/market-cap
6Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Associate banks
State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore
Non-banking subsidiaries
SBI Capital Markets Ltd SBI Funds Management Pvt Ltd SBI Factors & Commercial Services Pvt Ltd SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) SBI DFHI Ltd SBI Life Insurance Company Limited SBI General Insurance
State Bank of India- Operations
7Marketing Case Study - SBI's SMS Unhappy
Indian Banking sector-post liberalization
19 March 2014
1947 – 1980
Remarkable growth in Indian banking sector
1991
•Import restricted•Export slumped•Gulf war- Oil price soar•Trade deficit•High inflation•Balance of payment crisis
Solution?
Request for bailout from IMF
Pledged 67T Gold with Bank of
England
Economic Reform- Liberalization
Economic Crisis
1991
Rao-Manmohan Plan
8Marketing Case Study - SBI's SMS Unhappy
Post Liberalization FDI in Power, Hospitality, Software & Retail Changed nature of competition in Banking sector Entry of Private sector commercial Banks
19 March 2014
Indian Banking sector-post liberalization
Private Banks Established
Revenue Business Type
1994 US$ 6.5 bn Banking, Financial Services
Public
2008 US$0.7 mn Banking, Financial Services
Private
1993 US$ 80 mn Mutual fund Public
1954 US$ 13.52 bn
Banking, Financial services
Private
Competition
Capture Market share
Customer Satisfaction
Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Digression….!
10Marketing Case Study - SBI's SMS Unhappy
Mobile Phone Proliferation in India
Post Liberalization 1990s -Telecom sector open to FDI 2000-10 decade extreme growth in this sector Growth rate- 18 million/month
19 March 2014
Deregulation
Market Competition
Population growth
Opportunity for Economies of
Scale
Result:Cheapest Tariff (in the
world)
11Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Mobile Phone Proliferation in India
Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Mobile & SBI….!
13Marketing Case Study - SBI's SMS Unhappy
Friday, March 12, 2010Raja Releases Citizen Moments Book
19 March 2014
State Bank of India- campaign
Campaign Year & Media coverage
Purpose
Parivartan2007(http://www.thehindubusinessline.in/2007/08/03/stories/2007080352210600.htm )
•Retain potential human resource•Centralized computerized system•Large & midsize corporation- Treasury, trade finance
Citizen SBI
2009(http://www.business-standard.com/article/finance/sbi-launches-fresh-hr-initiative-109090200055_1.html)
•Attitudinal change and transformation of its employees through a series of human resources activities•Behavioural transformation by seeking more active role from the employees
Udaan
2010(http://epaper.timesofindia.com/Repository/getFiles.asp?Style=OliveXLib:LowLevelEntityToPrint_ASCENT&Type=text/html&Locale=english-skin-custom&Path=CAP/2010/12/03&ID=Pc02215)
•Apprising the employees about the outstanding achievements of the bank over the last four years •Grooming them for their total transformation towards achieving the bank's aspirations to be amongst top 25 banks globally
Results
SBI superseded ICICI in terms of Market capitalization in 2008
SBI entered into Fortune Global 500 Listing
14Marketing Case Study - SBI's SMS Unhappy
Solution?What’s problem
SMS “Unhappy”- Inception
19 March 2014
Competition in Market
Control the Input
Respond to the Output
Fiscal & Monetary policies control
Customer Satisfaction
Issues with conventional SBI system for attainment of “Customer Satisfaction”
Complaint Initiation
Lack of system awareness among customers
Lengthy procedure- high time & energy cost
Complaint Resolution
Public sector- Red tape & bureaucracy
Lack of accountability & transparency
Solution for attainment of “Customer Satisfaction”
Complaint Initiation
Create awareness
Easy to use- less time & energy cost
Complaint Resolution
Automation- speed & accuracy
Accountability & transparency
15Marketing Case Study - SBI's SMS Unhappy
Solution to attainment of highest customer satisfaction 1st time realization by GM Lucknow, UP branch 1st time utilization of Automation in customer complaint resolution Exploitation of proliferated technology to reach & connect customers
Up gradation of semi-automated system with web-based technology in Bhubaneshwar, Odisha
Finally launch of Fully Automated Customer complaint resolution system in Hyderabad on 11th Dec 2009
19 March 2014
SMS “Unhappy ”- Inception
SMS <Unhappy>& be Happy
16Marketing Case Study - SBI's SMS Unhappy
SMS Unhappy- Launch
19 March 2014
Mr Siva Kumar at the lauching of SMS “Unhappy”Media Source: http://www.financialexpress.com/news/SBI-launches-SMS-Unhappy-Service/758039
17Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SMS Unhappy- Launch
Launch region Andhra Pradesh
Regional circles 14 no.s
Branches 1100 no.s
Customer coverage 14 million
18Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SMS Unhappy- Operations
19Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SMS Unhappy- Result
SBH
Survey conducted by MARS on Customer satisfaction
Source: Hindustan Times 29th Mar 2010
Status Complaints per year
Prior to program
1600
After program
22,209
Addressed 21,805 (98%)
Complaints resolved
Timeframe
64 % Within 48 Hrs
11 % Within 3 days
9 % Within 5 days
16 % Within 10 days
Marketing Case Study - SBI's SMS Unhappy
CRITICALLY ASSESS THE SMS UNHAPPY PROGRAM AT SBI ? WHAT ARE ITS STRENGTHS AND WEAKNESSES ?
19 March 2014
Question-1
21Marketing Case Study - SBI's SMS Unhappy
Critical assessment of the SMS Unhappy program at SBI
19 March 2014
Strength Weakness
SBI’ s brand image & credibility Lack of accountability
Huge market share including rural area Inadequacy of efficient mechanism
Experienced & dynamic OrganogramRed tape & bureaucracy
Opportunity Threat
Good market response assessed by Pilot program in AP Reputation at stake
Expansion of Telecommunication market
Frivolous complaints & Unpredicted scalability of complaints & operational challenges
Precise market segment- young professionals & students Competitors’ strategy
SWOT Analysis
22Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Critical assessment of the SMS Unhappy program at SBI (cont.)
Perspective Cost Benefit
SBI
• IT Infrastructure• Trained personnel• Advertisement
• Customer satisfaction• Market share• Green Banking (sustainability)• Real time feedback on operation• Accountability & appraisal system
Customer Cost of 1st SMS• Solution resolution within 48 Hrs• Less time & energy cost• Personal touch
Cost & Benefit
According to Mr Siva Kumar
25% of customers’ angst came down by sending SMS
50% taken care by SBI by call back
Hence 75% angst disappeared within few minutes with little effort
Marketing Case Study - SBI's SMS Unhappy
CAN SMS UNHAPPY CONTRIBUTE TO IMPROVING RETAIL OPERATION AT SBI ? HOW WOULD YOU USE THE PROGRAM FOR THIS PURPOSE ?
19 March 2014
Question-2
24Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SMS Unhappy contribution to improving retail operation at SBI
Retail Banking
Deposits-Savings Account , Current Account, Fixed Deposit, PF Account, Recurring Deposit , Term Deposit SBI Freedom, Money Market , Deposit Certificate, Retirement Savings Plan
Loans-Personal, Home, Auto, Medical, Mortgage Loan
Value Added Services-Remittances, Internet Banking, Debit Card, Lockers
SBI - A brand, a legacy, a name to Bank upon
SBI-Largest and oldest retail banking player in India
Potential Customer Segment
Age group: 28 Yrs (average)Young Professionals & Students
Easiest & cheapest way to connect them
25Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Source: http://www.statcrunch.com/grabimageforreport.php?
Source: Experian Marketing Services
Usage of Mobile Phone Functions
Usage of Text message by demography
Inferences:•Considerably good %age (20%) of SMS function is used in Mobile
•SMS is good source of marketing & feedback
Inferences:•Age group 13-17 contributes major (49%) in overall SMS users
•Age group 18-34 is 30% contributor that can become potential customer to target for marketing & feedback actions
SMS Unhappy contribution to improving retail operation at SBI
26Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SMS Unhappy contribution to improving retail operation at SBI
Justification of utility of Mobile Phone SMS option to connect target customer segment
Evaluation of Alternatives Step1
SMS Email LetterTime 30 sec 5 min 1 HrCost Rs 1.0 0 0Reliability 2/10 8/10 10/10
Multi-criteria decision making:
•AHP (Analytic Hierarchy Process)•Heuristic approach supported by survey data and Satty approach
Factor Comparison Step2Factor Comparison Weightage
Time Cost Reliability Eigen VectorTime 1.0 7.0 1.0 45% 3.0Cost 0.1 1.0 0.1 6% 3.0Reliability 1.0 9.0 1.0 49% 3.0
2.1 17.0 2.1 1.0 3.0λmax
Size of Matrix n 3
Consistency Index CI 0.0035
Random Consistency Index RI 0.52
Consistency Ratio CR 0.01Since CR<0.1 So No Problem
27Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SMS Unhappy contribution to improving retail operation at SBI
Level (of Factors) Comparison
Step3
Level (of each Factor) Comparison
Time Weightage
SMS Email Letter Eigen Vector Actual Weightage
SMS 1.0 7.0 9.0 77% 35%
Email 0.1 1.0 5.0 17% 8%
Letter 0.1 0.2 1.0 5% 2%
1.3 8.2 15.0 100% 45%
Cost Weightage
SMS Email Letter Eigen Vector Actual Weightage
SMS 1.0 0.3 1.0 22% 1%
Email 3.0 1.0 1.0 46% 3%
Letter 1.0 1.0 1.0 32% 2%
5.0 2.3 3.0 100% 6%
Reliability Weightage
SMS Email Letter Eigen Vector Actual Weightage
SMS 1.0 0.3 0.1 9% 4%
Email 3.0 1.0 0.3 24% 12%
Letter 7.0 3.0 1.0 67% 33%
11.0 4.3 1.5 100% 49%
RESULT
SMS Email LetterTime 35% 8% 2%Cost 1% 3% 2%Reliability 4% 12% 33%
40% 22% 37%Recommendation 1st 3rd 2nd
Mobile SMS seems to be relatively best option to target customer base for Retail Banking
Marketing Case Study - SBI's SMS Unhappy
WHAT MAY BE THE KEY CONCERNS WITH REGARD TO THE NATIONAL ROLL OUT OF THE PROGRAM ? HOW SHOULD THE MANAGEMENT AT SBI ADDRESS THESE CONCERNS ?
19 March 2014
Question-3
29Marketing Case Study - SBI's SMS Unhappy
National Level Implementation- Concerns & Resolutions
19 March 2014
Marketing Environment
GDP & Per capita income- public
savings
Private Banks- customer service
Fiscal & Monetary Policy- interest
rate
Banking infrastructure-
Building & location
Telecommunication- Internet, Mobile &
SMS services
Access & connection- Promotional medium
to be regional
Profession & Age- Target customers
Customers’ faith & asset security-
“Banker to Every Indian”
Source: Prof R Srinivasan, IISc
30Marketing Case Study - SBI's SMS Unhappy
Key Concern Resolution
Pre-implementation
Return on InvestmentAccountability & Measurement of cost, complaint resolution and customer retention
Skilled Human resource availability Training programs
Demographic challenge- Language & culture Multilingual campaign region wise
Post-implementation
Exponential growth in complaints Prediction & estimation of customer volume region wise and monitoring
Surge in frivolous complaints Real time evaluation & closure
Competitors’ strategy Continuous feedback & up-gradation
Complaint management & accountability Regional limited complaint receipt
19 March 2014
National Level Implementation- Concerns & Resolutions
Source: http://www.business-standard.com/article/press-releases/sbi-launches-sms-unhappy-scheme-111032100061_1.html
Marketing Case Study - SBI's SMS Unhappy
HOW WOULD YOU ASSESS WHETHER SMS UNHAPPY CONTRIBUTES TOWARDS MAKING SBI MORE COMPETITIVE AGAINST ITS PRIVATE SECTOR RIVALS ?
19 March 2014
Question-4
32Marketing Case Study - SBI's SMS Unhappy
SMS Unhappy contribution towards making SBI more competitive
19 March 2014
Source: Prof R Srinivasan, IISc
1 SMS
30 Seconds
Comfortable
Convenience
Reduced
Hidden Value delivered to SBI customer : “TRUST”
33Marketing Case Study - SBI's SMS Unhappy
19 March 2014
SBI’s Market diversity Portfolio in India
SMS Unhappy contribution towards making SBI more competitive
Source: Wikinvest
Market Share of Banks in India (as on 2008)
10%
20%
1X10X 0.1X
Boston Consulting Group Growth–share Matrix
2007
2013
34Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Month-1Matrices Unit Region-1 Region-2
Customer Base weightage % X % Y%
Customers' Complaint received by Happy Room No.s A A
Customers' Complaint resolved No.s B B
Number of Transaction made by concerned customers after complaint resolution No.s C C
Failure Rate Index F1= (A-B)/A F2= (A-B)/ASuccess Rate Index S1= C/B S2= C/B
Consolidated MeasureFailure Rate X*F1 + Y*F2Success Rate X*S1 + Y*S2
SMS Unhappy contribution towards making SBI more competitive
Measurement of Effectiveness of SMS Unhappy (Proposed)
Periodical assessment on Success & Failure Rate would provide the real time feedback to measure Return on Investment of SMS Unhappy
35Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Websites www.google.co.in www.wikipedia.com www.isb.edu www.sbi.co.in www.financialexpress.com www.rbi.org.in www.trai.co.in
Books Strategic Management By Prof. R. Srinivasan Marketing Management By Philip Kotler
Tools used Microsoft Encarta (Encyclopedia for offline references) Microsoft Excel (for data analysis & graphs)
References
36Marketing Case Study - SBI's SMS Unhappy
SBI SMS Unhappy Survey Time
19 March 2014
Marketing Case Study - SBI's SMS Unhappy
19 March 2014
Thank you!
Take Away….
• SBI IISc Branch is soon going to put poster to campaign “SMS Unhappy”• Our “Mobile Number Update” related concern resolved• Surveyed SBI customers got informed used “SMS Unhappy”
For you: