Term Paper

Of

Sales and Promotion Management

Topic: Analyzing the product mix strategies of IDBI BANK

Submitted To: Submitted By:

Mr. Abhishek Dutta Sumeet Nagpal

RT 1903 B27

10906815

Lovely Institute of Management

 ACKNOWLEDGEMENT

Firstly I would like to thanks the institution and my department for the handing
over to me this project .I would also like to give my heartfelt gratitude to my Sales
And Promotion Prof. “Mr. Abhishek Dutta” who guided me through the entire
project and without whose help I would have not been able to complete this project
. Lastly I would like to thank my friends, my team members who also helped me in
the completion of this project.

Sumeet Nagpal

INTRODUCTION
WHAT IS PRODUCT MIX

The product mix of a company, which is generally defined as the total composite of products
offered by a particular organization, consists of both product lines and individual products. A
product line is a group of products within the product mix that are closely related, either because
they function in a similar manner, are sold to the same customer groups, are marketed through
the same types of outlets, or fall within given price ranges. A product is a distinct unit within the
product line that is distinguishable by size, price, appearance, or some other attribute. For
example, all the courses a university offers constitute its product mix; courses in the marketing
department constitute a product line; and the basic marketing course is a product item. Product
decisions at these three levels are generally of two types: those that involve width (variety) and
depth (assortment) of the product line and those that involve changes in the product mix occur
over time.

PRODUCT-MIX MANAGEMENT AND RESPONSIBILITIES

It is extremely important for any organization to have a well-managed product mix. Most
organizations break down managing the product mix, product line, and actual product into three
different levels.

Product-mix decisions are concerned with the combination of product lines offered by the
company. Management of the companies' product mix is the responsibility of top management.
Some basic product-mix decisions include: (1) reviewing the mix of existing product lines; (2)
adding new lines to and deleting existing lines from the product mix; (3) determining the relative
emphasis on new versus existing product lines in the mix; (4) determining the appropriate
emphasis on internal development versus external acquisition in the product mix; (5) gauging the
effects of adding or deleting a product line in relationship to other lines in the product mix; and
(6) forecasting the effects of future external change on the company's product mix.

Product-line decisions are concerned with the combination of individual products offered within
a given line. The product-line manager supervises several product managers who are responsible
for individual products in the line. Decisions about a product line are usually incorporated into a
marketing plan at the divisional level. Such a plan specifies changes in the product lines and
allocations to products in each line. Generally, product-line managers have the following
responsibilities:
(1) considering expansion of a given product line;
(2) considering candidates for deletion from the product line
(3) evaluating the effects of product additions and deletions on the profitability of other items in
the line; and
(4) allocating resources to individual products in the line on the basis of marketing strategies
recommended by product managers.

Decisions at the first level of product management involve the marketing mix for an individual
brand/product. These decisions are the responsibility of a brand manager (sometimes called a
product manager). Decisions regarding the marketing mix for a brand are represented in the
product's marketing plan. The plan for a new brand would specify price level, advertising
expenditures for the coming year, coupons, trade discounts, distribution facilities, and a five-year
statement of projected sales and earnings. The plan for an existing product would focus on any
changes in the marketing strategy. Some of these changes might include the product's target
market, advertising and promotional expenditures, product characteristics, price level, and
recommended distribution strategy.

PRODUCT-MIX ANALYSIS

Since top management is ultimately responsible for the product mix and the resulting profits or
losses, they often analyze the company product mix. The first assessment involves the area of
opportunity in a particular industry or market. Opportunity is generally defined in terms of
current industry growth or potential attractiveness as an investment. The second criterion is the
company's ability to exploit opportunity, which is based on its current or potential position in the
industry. The company's position can be measured in terms of market share if it is currently in
the market, or in terms of its resources if it is considering entering the market. These two factors
—opportunity and the company's ability to exploit it—provide four different options for a
company to follow.

1. High opportunity and ability to exploit it result in the firm's introducing new products or
expanding markets for existing products to ensure future growth.
2. Low opportunity but a strong current market position will generally result in the
company's attempting to maintain its position to ensure current profitability.
3. High opportunity but a lack of ability to exploit it results in either (a) attempting to
acquire the necessary resources or (b) deciding not to further pursue opportunity in these
markets.
4. Low opportunity and a weak market position will result in either (a) avoiding these
markets or (b) divesting existing products in them.

These options provide a basis for the firm to evaluate new and existing products in an attempt to
achieve balance between current and future growth. This analysis may cause the product mix to
change, depending on what management decides.

The most widely used approach to product portfolio analysis is the model developed by the
Boston Consulting Group (BCG). The BCG analysis emphasizes two main criteria in evaluating
the firm's product mix: the market growth rate and the product's relative market share. BCG uses
these two criteria because they are closely related to profitability, which is why top management
often uses the BCG analysis. Proper analysis and conclusions may lead to significant changes to
the company's product mix, product line, and product offerings.

The market growth rate represents the products' category position in the product life cycle.
Products in the introductory and growth phases require more investment because of research and
development and initial marketing costs for advertising, selling, and distribution. This category is
also regarded as a high-growth area (e.g., the Internet). Relative market share represents the
company's competitive strength (or estimated strength for a new entry). Market share is
compared to that of the leading competitor. Once the analysis has been done using the market
growth rate and relative market share, products are placed into one of four categories.
  Stars: Products with high growth and market share are know as stars. Because these
products have high potential for profitability, they should be given top priority in
financing, advertising, product positioning, and distribution. As a result, they need
significant amounts of cash to finance rapid growth and frequently show an initial
negative cash flow.
 Cash cows: Products with a high relative market share but in a low growth position are
cash cows. These are profitable products that generate more cash than is required to
produce and market them. Excess cash should be used to finance high-opportunity areas
(stars or problem children). Strategies for cash cows should be designed to sustain current
market share rather than to expand it. An expansion strategy would require additional
investment, thus decreasing the existing positive cash flow.
 Problem children: These products have low relative market share but are in a high-
growth situation. They are called "problem children" because their eventual direction is
not yet clear. The firm should invest heavily in those that sales forecasts indicate might
have a reasonable chance to become stars. Otherwise divestment is the best course, since
problem children may become dogs and thereby candidates for deletion.
 Dogs: Products in the category are clearly candidates for deletion. Such products have
low market shares and unlike problem children, have no real prospect for growth.
Eliminating a dog is not always necessary, since there are strategies for dogs that could
make them profitable in the short term. These strategies involve "harvesting" these
products by eliminating marketing support and selling the product only to intensely loyal
consumers who will buy in the absence of advertising. However, over the long term
companies will seek to eliminate dogs.

As can be seen from the description of the four BCG alternatives, products are evaluated as
producers or users of cash. Products with a positive cash flow will finance high-opportunity
products that need cash. The emphasis on cash flow stems from management's belief that it is
better to finance new entries and to support existing products with internally produced funds than
to increase debt or equity in the company.
Based on this belief, companies will normally take money from cash cows and divert it to stars
and to some problem children. The hope is that the stars will turn into cash cows and the problem
children will turn into stars. The dogs will continue to receive lower funding and eventually be
dropped.

Overview of Banking and Financial Institutions

The banking system in India is significantly different from that of other Asian nations
because of the country’s unique geographic, social, and economic characteristics. India has a
large population and land size, a diverse culture, and extreme disparities in income, which are
marked among its regions. There are high levels of illiteracy among a large percentage of its
population but, at the same time, the country has a large reservoir of managerial and
technologically advanced talents. Between about 30 and 35 percent of the population resides in
metro and urban cities and the rest is spread in several semi-urban and rural centers. About92
percent of the country’s banking segment is under State control while the balance comprises
private sector and foreign banks. Without a sound and effective banking system in India it cannot
have a healthy economy. The banking system of India should not only be hassle free but it
should be able to meet new challenges posed by the technology and any other external and
internal factors. For the past three decades India's banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer confined to
only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to
the remote corners of the country.

Financial Structure
The Indian financial system comprises the following institutions:
1. Commercial banks
a. Public sector
b. Private sector
c. Foreign banks
d. Cooperative institutions
(i) Urban cooperative banks
(ii) State cooperative banks
(iii) Central cooperative banks
2. Financial institutions
a. All-India financial institutions (AIFIs)
b. State financial corporation’s (SFCs)
c. State industrial development corporations (SIDCs)
3. Non banking financial companies (NBFCs)
4. Capital market intermediaries

IDBI PROFILE
 The birth of IDBI bank took place after RBI issued guidelines for entry of new private
sector banks in January 1993. Subsequently, IDBI as promoters sought permission to establish a
commercial bank and retained KPMG a management consultant of international repute to
prepare the groundwork for establishing a commercial bank. The Reserve Bank of India
conveyed it's in principle approval to establish IDBI bank on February 11th, 1994.Thereafter the
bank was incorporated at Gwalior under Companies Act on 15th of September with its registered
office at Indore.
IDBI Bank Ltd. is a Universal Bank with its operations driven by a cutting edge core
Banking IT platform. IDBI Bank Ltd. is today one of India's largest commercial Banks. For over
40 years, IDBI Bank has essayed a key nation-building role, first as the apex Development
Financial Institution (DFI) (July 1, 1964 to September 30, 2004) in the realm of industry and
thereafter as a full-service commercial Bank (October 1, 2004 onwards). The Industrial
Development Bank of India Limited, popularly known as IDBI Bank is one of the leading public
sector banks in India. Categorized as "other public sector bank" by Reserve Bank of India (RBI),
IDBI Bank is also the 4th largest Indian bank. Founded in 1964 to provide credit and other
facilities to its customers, IDBI Bank currently has 457 centers, 688branches and 1020 ATMs
across the nation. It is world's 10th largest development bank in terms of reach. IDBI Bank also
built several institutions including the National Stock Exchange of India (NSE), the Stock
Holding Corporation of India (SHCIL) and the National Securities Depository Services Ltd.
(NSDL) etc. The Bank offers personalized banking and financial solutions to its clients in the
retail and corporate banking arena through its large network of Branches and ATMs, spread
across length and breadth of India. IDBI have also set up an overseas branch at Dubai and have
plans to open representative offices in various other parts of the Globe, for encasing emerging
global opportunities. IDBI Bank today rides on the back of a robust business strategy, a highly
competent and dedicated workforce and a state-of-the-art information technology platform, to
structure and deliver personalized and innovative Banking services and customized financial
solutions to its clients across delivery channels. As on March 31, 2010, the Bank had a network
of 720 Branches and 1210 ATMs and plans to roll out another 300 branches during FY 2010-11.

VISION OF IDBI
The vision for the Bank is for it to be the trusted partner in progress, by leveraging quality
human capital and setting global standards of excellence, to build the most valued financial
conglomerate. Our experience of financial markets helps us to effectively cope with challenges
and capitalize on the emerging opportunities by participating effectively in our country’s growth
process.

MANAGEMENT AND ORGANIZATION

IDBI Bank is a Board-managed organization. The responsibility for the day-to-day management
of operations of the Bank is vested with the Chairman & Managing Director and two Deputy
Managing Directors, who draw upon the support and expertise of a cross-disciplinary Top
Management Team. IDBI Bank Ltd employee base includes professionals from the fields of
accountancy, management, engineering, law,
Computer technology, banking and economics.

 R M Malla- Chairman and Managing director

 Yogesh Agarwal- Director
 G C Chaturvedi- Director
 Analjit Singh- Director
 K Narasimha Murthy- Director
 Subhash Tuli- Director
 R M Malla
 B P Singh- Deputy Managing Director
 R P Singh- Director
 Lila Firoz Poonawalla- Director
 H L Zutshi- Director
 Sailendra Narain- Director

IDBI Bank offers a wide array of products and services to its customers. For different customer
groups and needs, there are different types of products and services including Personal
Banking, Corporate Banking, SM Finance and Agriculture Business etc.
Product Mix Strategies adopted by IDBI BANK

PERSONAL BANKING
Following products and services are offered under Personal Banking:

 DEPOSITS

 Savings Account

 Current Account

 Fixed Deposits

 Suvidha Tax Saving Fixed Deposit

 Pension Accounts

 Sabka Account

 Super Shakti Account for Women

 Jubilee Plus Account

LOANS
  Home Loans

 Loans Against Property

 Education Loans

 Personal Loan

 Loan Against Securities

 Reverse Mortgage Loan

 Auto Loan

 PAYMENTS

 Tax Payments

 Stamp Duty payments

 Easy Fill

 Bill Payment

 Card to Card Money Transfer

 Online Payments
  Pay Mate

 INVESTMENTS ADVISORY

 Smart Financial Planning

 Mutual Fund

 Insurance

 Fixed Income Securities

SOME OTHER USEFUL SERVICES OFFERED BY IDBI BANK TO ITS

CUSTOMERS:

 Putting the banners of the IPO on our portal and all across our branches.
 Sending the emails to all our investors about the impending IPOs and the product note.
 Sending SMS to all of them.
 Making available the IPO application forms, in all our branches.
 All their branches are in marketing & distribution of IPO application forms, where they
accept and bid the application forms to the exchange.

CREDENTIALS OF IDBI BANK

IDBI are a leading full service securities house, offering a complete suite of financial
products and services to individual, institutional and corporate clients:
 Wholly owned subsidiary of IDBI Bank Ltd.
  A well-capitalized financial position - net worth of over Rs.350 crores as on 31st
March 2008.
 A private equity fund of Rs.100 crores for investment in Mid Cap and SME Growth
Companies.
 A leading player in Private Placement of Tier II bonds and debentures for institutions,
banks and corporate.
 They manage Provident and Pension Funds of more than Rs.8,250 crores

Fund Management
IDBI Capital Market Services Ltd. (ICMS) is a leading Fund Manager in the country or
Provident, Pension and Retirement Benefit Funds. The Company is a SEBI registered Portfolio
Manager and manage its Client’s assets under both discretionary and non-discretionary
mandates. These services are provided to various public and private sector undertakings and their
provident, pension, retirement benefit and surplus funds. The Company’s client base includes
leading pension and provident funds in the country.
IDBI capital has been advising institutions, banks and corporate for their investment in
Debt, Mutual Funds and Equities over several years. Its services include managing Client
Assets--Pension & Provident Funds, Surplus fund Management, Equity Portfolio Management
and Mutual Fund Advisory. The funds have continuously yielded superior returns, which are
significantly higher than the benchmark.

Keeping in view the importance of standardized processes and service levels, the Company has
gone in for ISO Certification for Fund Management, and is the only company to have done so in
this sector. Being a public sector, the Company is also audited by Comptroller and Auditor
General (CAG) office and follows transparent practices.

REGULATORY APPROVAL
IDBI Capital is a registered Portfolio Manager with Securities and Exchange Board of
India (SEBI) since 1998 and is authorized to undertake Funds Management activities (Debt
&Equity) for clients. These activities would be governed by Securities and Exchange Board of
India (Portfolio Managers) Rules and Regulations, 1993. SEBI Registration No. of IDBI Capital is
INP000000209, valid till the year 2010.

The Key strengths of IDBI capital Market Services in the areas of Debt Fund
Management are :
1. Fund Management experience of 10 years
2.Expertise in managing large corpus
3.Expertise in both Debt & Equity Market
4.IDBI Capital is the only Portfolio Manager in the Country to achieve ISO 9001: 2000
Standard for Quality Management Systems in Fund Management operations, with certification
from TUV NORD an accredited German standards firm.
5.Substantial Returns Over Benchmark.
6.IDBI Capital is a SEBI registered Portfolio Manager.
7.Minimum Idle Days.
8.Our fund management skill covers Portfolio Analysis that includes ALM, Asset
Allocation, Risk Analysis, Maturity Analysis and Yield Analysis
9.Transparency of Operations
10. Strict adherence to Compliance Procedures
11. Highly Rated Debt Research
12. Presence in All Segment/ Asset of the Financial Services: IDBI Capital deals in Equity and
Equity related products and is one of the highly rated Mutual Fund Distributor (won two
consecutive CNBC TV18 Institutional Financial Advisor Award) . In Investment Banking and
Debt Capital Market- Rated in Top 15 by Prime Database.
13. Group Strength in Debt Market: IDBI Capital is one of the leading players in debt market
with presence in primary dealership since July 2007. The current operations of primary
dealership is conducted by a group company, IDBI Gilts
Product Mix Strategies of IDBI BANK

 Experienced Fund Management Team: The Fund Management team comprises of

Experienced professionals (experience ranges between 2 years to 15 years) in Portfolio
Management with requisite exposure in the fixed income and equity segment and qualifications.
 Experienced Back-Office: The Clearing and Settlement Operations are manned by
Experienced personnel with requisite exposure to capital market and particularly debt market.
The process is standardized as per the regulatory and other specific norms and mainly technology
driven in most areas.
 Accounting: Real time accounting of Remittances, Investments, Interest and
Redemption proceeds ensures accurate reconciliation.
 Professional Custodian: Member of NSDL for demat services and offers Constituent
SGL Account facility for Government securities through IDBI Gilts Ltd.
 Functional Separation of Front and Back Office: Separate personnel handle the
front and back office functions to ensure transparency and complete regulatory
Compliance
 Internal Control s: Adequate Risk Management systems in place to ensure complete
Regulatory compliance
 Audit Systems: Audit of all transactions and reports by an independent firm of
Chartered accountants. The accounts and transactions are also subject to CAG audit
and other regulators
 Belongs to IDBI Group: IDBI is a leading bank, classified under Other Public
Sector Bank. Established in 1964 by Government of India under an Act of Parliament, IDBI has
essayed a significant role in the country’s industrial and economic progress for over 40 years.
Product Decisions
When placing a product within a market many factors and decisions have to be taken into
consideration. These include:

 Product design: Will the design for the services given by BANK is according to the
norms set for the design?
 Product quality: Quality has to consistent with other elements of the marketing mix. A
premium based pricing strategy has to reflect the quality a product offers.
 Product features: What features will be added that may increase the benefit offered to
the target clients? Will the BANK use a discriminatory pricing policy for offering these
additional benefits?
 Branding: One of the most important decisions a marketing manager can make is about
branding. The value of brands in today’s environment is phenomenal. Brands have the
power of instant sales, they convey a message of confidence, quality and reliability to
their target market.

CONCLUSION

Managing the product mix for a BANK is very demanding and requires constant
attention. Top management must provide accurate and timely analysis (BCG) of their
Bank’s product mix so the appropriate adjustments can be made to the product line and
individual products. As the IDBI BANK plans various product mix strategies to make
their customers satisfied.
 REFERANCES

http://www.learnmarketing.net/product.html

www.springerlink.com/index/t504028512267405.

www.smallbusiness-marketing-plans.com/product-market-mix-strategy.html 

www.enotes.com › Encyclopedia of Business and Finance

www.marketsandmarkets.com/.../Community-%20Banking-186.html - United States

www.mapsofindia.com/indian-banks/idbi-bank/