Customer Relationship Strategies Adopted By Sbi Marketing Essay

Introduction

In financial services, people are primarily bothered about security of their funds and default risks. After the year 1969, the deposits of banks increased more than 80 times as a result of the nationalization of banks. The complexity in the banking services is also an issue of vital importance. This is the time when banks are offering new and innovative services, frequently in the market. The content of promotional tools should help the customer in making most valuable decision. This can be firmly said that well-designed promotional strategies are very important to promote banking services effectively. In marketing any product or service, customer satisfaction has been given the prime importance. The most frustrating aspect of bank marketing are lack of management support, lack of inter-departmental cooperation, crisis management, government intrusion and advertising & media problems. Manpower in service organisations must work with the focus of satisfying the customer. Banking should bring out the areas requiring improvement and which further throw light on the measures to improve the quality of services. Promotional packages are very important for financial service industry. Thus the orientation of banks should be with a much wider focus in relation to consumer and market needs, and the consequent marketing strategies. The challenges put forth by the changing environment have to be effectively tackled to identify the consumer needs and providing valuable services through product innovation. In banking the temporal and spatial dimensions are perceived as more important than traditional dimensions based on outcome and process elements. The usage of marketing concepts & techniques and recommended that a well-structured marketing department in banks is essential for profitability & effectiveness. Promotional strategies should be designed as per the nature of the services to be promoted. The advertisers should seek a narrative approach to communicate the service experience rather than a logical, argumentative approach. Narrative approach involves storytelling methodology using sequence of events. Location convenience, speed of service, competence and friendliness of bank personnel are also the most important points with maximum value in banking services. About 90% of the respondents banked at the branch nearest to their home place and place of work. Convenience, in terms of location, was also found to be the single most important factor for selecting a branch. It has been generalized in the studies that services marketing advertisement is more challenging than the advertising of tangible products. Winning new customers costs 10 times more than simply holding onto existing ones. The case should be taken in the marketing of financial services very seriously. While formulating marketing strategy, a bank should focus attention on:-

consumer sovereignty

attitude

responsiveness and personal skills of bank staff

revitalizing the marketing department

top management support to the marketing department

participation of marketing personnel in key bank decisions.

SBI carried out various marketing initiatives to enhance its reach. They included:-

Segregating and targeting existing high value customers,

Cross sales of other products,

Setting up call centers and outbound sales force to secure new customers

Plans were also made to utilize database marketing to pursue large and medium sized

corporate, government and trade finance customers.

Database marketing was expected to draw increased revenue from cross selling, lower costs and increased customer loyalty.

SBI also introduced various other ways of reaching out to customers like:-

Extension of hours of work(SBI increased daily working hours by two hours and Sunday banking was introduced) and

Aggressive marketing through print and television media.

SBI`s Strategies in the current scenario

SBI have set up capacity in places where they are not very strong. It is time for them to follow overall SBI philosophy of planning new branches, given the huge untapped potential. Besides, this is also the best time to benefit from their past expansion, since there is a lot of trust in SBI.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!
Find out more about our Essay Writing Service

Brand SBI is very strong, while people may be generally cautious about some other brands. They can not only tap the potential better but can also provide a safe and transparent insurance alternative to the public. The bank is entering into many new businesses with strategic tie ups – Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc – each one of these initiatives having a huge potential for growth.

Some of the strategies to cope with the current scenario are listed below:

It is the part of SBI`s philosophy to open new branches .The Bank is forging ahead with cutting edge technology and innovative new banking models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years. SBI is planning to hire 11,000 employees in the current fiscal. It is also focusing at the top end of the market, on whole sale banking capabilities to provide India’s growing mid / large Corporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today, the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list. The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked, today it offers the largest banking network to the Indian customer. The Bank is also in the process of providing complete payment solution to its clientele with its over 8500 ATMs, and other electronic channels such as Internet banking, debit cards, mobile banking, etc.

Country’s largest lender, State Bank of India (SBI) has prepared a blueprint to go retail in its international operations. Such strategy would help the bank to promote its lead in syndication of loans in the overseas market, at a cheaper cost.The bank’s overseas operations have been instructed to thrust more on promoting retail banking locally, SBI is assessing that by opening more branches across foreign locations and promoting retail services by mobilising deposits at interest rates as low as 3-3.5%, the bank will be able to increase its operating margins by 250-300 basis points in overseas markets where syndication opportunities arise often.SBI is expected to open seven new branches over next eight months in the United Kingdom where it operates six branches currently. Also, SBI’s Washington office is expected to get upgraded as a full-fledged branch by December 2009 and plans are afoot to open more branches across North America under the control of California State chartered subsidiary of State Bank of India (California).

In response to signals from the central bank, SBI have progressively reduced their PLR from 13.75% to 12.25% during the past few months in stages, and further softening in interest rates cannot be ruled out. SBI is introducing loan products at sub-PLR rates – in home loans at 8%, auto loans at 10%, special products for SMEs and… agriculture sector at 8%, but it may not be possible for them to reduce the interest rate beyond a certain point.

SBI is working on infrastructure sector projects, which has seen a growth of 26% in the current year. For the year 2008 the Rs 10,000 crores was sanctioned for the infrastructure projects while in the current year from April 08 to February 09 the amount sanctioned for the infrastructure project is Rs 13,000 crores,out of which project worth Rs 8000 crore is in pipeline. Despite of various viability issues the growth in this sector for SBI is been intact.

With market-linked products finding fewer takers, insurance companies are launching more “guaranteed” products to lure investors. The latest to join the bandwagon is SBI Life insurance with SBI Smart ULIP, a product that guarantees returns based on the highest NAV recorded by the fund in the first seven years.