STATE BANK OF INDIA

State Bank of India (SBI) is a Public Sector Banking Organization (PSU), in which the Government of India is the biggest shareholder. It is the largest bank in India and is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008 Forbes Global 2000. Measured by the number of branch offices, SBI is the second largest bank in the world. SBI traces its ancestry back to the Bank of Calcutta, which was established in 1806; this makes SBI the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. In 2008 SBI was ranked 380 from a rank of 495 in 2007. As per fortune 500-2008 following are the data for SBI in $ million. Revenues: 22,402.2 Profits: 2,225.0 Assets: 255,854.9 Stockholders' Equity: 15,263 The SBI group companies include SBI Capital Markets Ltd, SBI Mutual Fund (A Trust), SBI Factors and Commercial Services Ltd, SBI DFHI Ltd, SBI Cards and Payment Services Pvt Ltd, SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance), SBI Funds Management Pvt Ltd, SBI Canada.

SBI was rechristened as State Bank of Indian in 1955 from Imperial bank of India. The decade of 2000s was a turning point in the Indian banking industry. It brought out a major transformation in the working style of Indian banks. With several competitors gaining ground in Indian Territory, SBI was facing constant threat of takeover. The exhibit below maps the banking industry using porter s five forces model. The model shows that there is huge competition in the banking industry and that the customer is the king. Banks that provide good customer service and are responsive to the market in the long run would win.

MARKETING STRATEGIES SBI took several initiatives to capture the market pie in 2008. SBI has adopted various marketing strategies for educating customers about its products and services, particularly the asset products. The various marketing strategies of SBI are discussed below:

Participation in various consumer exhibition and meetings SBI multi-product sales team regularly participates in the exhibitions / melas organized by various sponsors (e.g., SSI-Small Scale Industries). SBI finances loans to the entrepreneurs through this channel. SBI also sets us booking counters are various trade-fairs and industrial fairs where it offers loans at concessional rates to borrowers for booking at those counters. Apart from financing loans to the borrowers, SBI uses these meets as an opportunity to educate people about its various personal segment (p-segment) products and services. Tie-ups with builders / car and other vehicl e dealer SBI has entered into financing agreement with various builders, cars and other vehicle dealers to finance the customers at the existing market rates. Usually, we find dealer advertising purchase of their vehicles at cheap rates. This is possible through a loan agreement with the banks. Festive loan products SBI takes advantage of festive seasons, such as Holi, Diwali, Christmas, New-Year for propagating their loan products. During these periods it ties up with various dealers to organize finance for customers who wish to purchase cars or other vehicles during the festive period. During festive periods it offers XPress credit and festival loan also to the customers.

Advertising in TV and Newspapers The advertising strategy is centralized at Mumbai office for advertisements in TV and Economic Times / The Times of India. The famous Chiman Lal Charlie Ad placed in TV has also won awards. SBI campaigns also attempts to explain why it is better than other banks . For advertisement into other National dailies and local dailies their advertisement strategy is decentralized at the local head-office level. SBI has launched an education initiative to educate its customers about ATMs, its account opening services, its wide network, home loan and various other l oan products and so on. The advertisements are regularly published in local and national dailies. Oral Marketing SBI has appointed various customer relationship officers and assistants at the 10 branches of SBI, Bilaspur. These officers take care to provide the relevant information to the customers who visit their offices. They help the customers with various products and services of SBI. Professional Offerings SBI has also several offerings directed towards professionals who wish to set up their own businesses. For example, Doctor Plus/ Dental Doctor Plus is a finance scheme directed towards the Doctors/ Dentists who wish to set up their own clinics/dispensaries and for purchasing medical equipments. Similarly, they have SBI Shoppe scheme which is directed towards other professionals like beauticians and other service-oriented people encouraging them to set up their own establishments for rendering services. SBI has a well-trained multi-product sales team (MPST) which educates its customers about th ese products and services. Ads at various display boards SBI also advertises at various billboards about its products and services TARGETTING RURAL MARKET In 2008 SBI planned to capture the rural market of India. Establishing a bank in a rural area is a costly affair. However, the technological advancements made the possibility of banking over mobile from anywhere in India. SBI launched mobile banking in March 2009 with a vision to capture rural market without needing to establish any physical premises there. Along with SBI, ICICI and few other banks also launched Mobile banking. Mobile banking refers to conducting banking activities using a mobile device, whereby customers can access their accounts to check account balances, transfer funds, pay bills, and perform various other transactions. Mobile banking reduces delays in banking transactions and affords time to employees for other banking services. The introduction of mobile banking follows the relatively successful introduction of Internet banking in India, whereby customers can access their bank accounts, through the bank s web site. Since, the number of Internet users is small in comparison to mobile phone users in India, the mobile phone network is the most likely platform for value-added services such as online banking and mobile commerce (Manson, 2002). Several issues, both technological and cultural mar the adoption of mobile banking. Vital Analytics (2009) reveals fast growth of Mobile Banking in Urban India. Around 40 million users in India are using mobile banking in Urban India. The most widely used services in mobile banking are

checking account balance (91%), Viewing last three transactions (65%), Cheque status (48%), payment reminders (48%) and requesting a cheque book (44%). However, although promising, the adoption of Mobile Banking has so far been dismal. Security concern is the biggest barrier to adoption of mobile banking. SBI undertook several security measures to allay user s security concerns. Indian Government has also passed legislation covering mobile banking practices in India. Still the adoption of mobile banking is far from expected. Particularly in the target market (rural areas), there is hardly any adoption. Lack of awareness of these security enhancing approaches could be one o f the other major reasons for poor adoption. The tradition and culture of India plays a vital role in how Indian users view and adopt mobile banking for their transactions. It would be interesting to know if there are factors that mar adoption beyond the l ack of awareness or faith in security practices of Indian banks.

VALU CHAIN ANALYSIS E