Waiting for the dawn...

Moreover, the bank has not just increased its ad volume, but it has also worked on a new branding strategy altogether. Right after the hurdle, it came across last year, the bank was quick enough to tweak its communication strategies. It moved away from its arrogant communiqué of ‘lead life on your terms’ to the ‘power of belief’. The new campaign not only echoed a soft voice of communication, but also presented the bank, which till then believed in aggressive growth alone, in a different manner altogether.

However, the biggest turning point for the bank could be its change in focus on the operations front. The bank, which once discouraged its customers from going to its branches and promoted the use of ATMs, is now persuading customers to visit its branches. Perhaps, it expects that a direct contact between the bank and the customers will not only help create a better relationship between the two, but also strengthen customers’ faith on the bank. Keeping that in mind, the bank has also reduced its huge army of direct selling agents by almost 70% with a target of zero reliance on any outsourcing for business acquisition and collections by next year. This certainly will help the bank gain some ground in the eyes of the customers, who have been irritated for the irrational behaviour of those external recovery agents.

But then, changing the way they operate alone won’t help it much. The internal workforce too has to deliver the best to the customers. Krishnan agrees, “No doubt, under Chanda Kochhar the bank is trying to regain lost grounds through advertisements and removal of external recovery system. But until and unless the bank improves its services it won’t be able to gain back the trust of its stakeholders.”

In the mean time, the bank is also working on its asset quality and capital adequacy, which actually brought them the crisis last year. As a result the asset quality of the bank has shown some signs of stabilisation. In absolute terms, the Gross NPAs of the bank have declined marginally, both on a y-o-y basis by 3% and on a sequential basis by 2%, to Rs.9,201 crore. In terms of capital adequacy too the bank is now at a stronger position. Explains Vaibhav Agrawal, VP – Research, Banking, Angel Broking, “Driven by a large net worth capital adequacy of ICICI Bank remained strong at 17.7% (Q2 FY09-10), comprising a substantial Tier-1 component of 13.3%. This puts the bank well for the imminent improvement in credit growth as the GDP outlook continues to improve.”

Moreover, as a part of its strategic change in focus and restructuring, the bank has now largely exited all its businesses outside its core competency including the small-ticket personal loans, which kept on bringing troubles every now and then for the bank. It has also reduced its non-India related exposures in international business. Though the books of the bank still do not reflect the results of such initiatives, analysts like Vaibhav believe that the bank is now well poised to grab the opportunities that would come in its way on account of the recovery. Investors too recognise the fact. As a result the share price of ICICI Bank has rallied from merely Rs.350 at the beginning of the present fiscal to over Rs.900 today.

However, the critical challenge for the bank will continue to win customers’ faith. K. J. Singh, CEO, Evolve Brands avers, “Riding on its campaigns since the beginning of the year, ICICI Bank’s image has certainly come a long way compared to the situation at the end of last year. However, service deliverance and right marketing strategies would help the bank in the long run.” Though the bank’s brand value has recovered by a fair margin as on date, critics say that it still has a long way to go. Apart from ad campaigns, the bank also needs more transparency in its operations, which perhaps has been a key reason for complaints against it in the past. By now, they’ve surely understood how even the smallest of ‘glitches’ can turn out to be an ultra-expensive ‘marketing’ proposition if customers lose faith in them?

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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NO CHILD’S PLAY

The success of child insurance plans actually rest on the need to secure one’s child’s future and fulfill their dreams. And this is exactly what Bharti AXA is targeting at as Mathur further adds, “Child Insurance policies are designed to keep money aside for higher education and further requirements of the child until he/she is completely self-sufficient. Hence, through our products, we aim to ensure that the dreams and future of children are safeguarded, even in the case of an unfortunate eventuality befalling the parents.”

However, all these plans can be fruitful for the insurers only when they manage to change the orthodox attitude of the general Indian parents. As a matter of fact in India, parents are not too keen on insurance products for their child’s education. Thus, the insurers (through advertisements/ agents/ advisors) have moved to the basics and talked to them about the financial implications they are likely to face if they don’t save enough for the D-day. The simple point raised by these campaigns (Max, Bajaj, Aviva, HDFC SL, et al) in a way has awaken and reminded them of their responsibility – to ensure their child’s future. And thus it has given a boost to the insurers. Anisha Motwani, Executive VP–Marketing and CMO–New Markets SBU, Max New York Life Insurance discloses, “The Karo Zyaada Ka Iraada campaign has successfully impacted our brand metrics in terms of brand awareness & consideration scores. With the launch of the campaign in Aug’08, Max New York Life witnessed an increase in brand awareness scores from 64% (Aug’08) to 73% (Nov’08).”

A similar line of thought comes from Aviva with their “Education is Insurance” campaign, wherein cricket icon Sachin Tendulkar (brand ambassador of Aviva) says, “Mein bhi ek pita hoon, aur mein yeh samajhta hoon.” The statement by the legend vividly captures the essence of the very idea that when it comes to children even the greatest cricketer is just another concerned parent. And no doubt, the Aviva, which holds 2.5% market share in the life insurance industry, has seen some real benefits accruing from the campaign over last one year. Share of revenue from child plans has grown smartly from a paltry 3% to a respectable 15% during the period.

Talking about Bajaj Allianz’s new campaign on child plans, Head of Marketing of the company Akshay Mehrotra avers, “It targets parents with a simple and honest question, put forth to them by their children, ‘have you planned for my future?’. This direct communication aims in awakening parents to their responsibility to financially plan for their child’s future.” As per the company the campaign emanates from the thought of having a clutter breaking message on the child plans in the crowded life insurance industry. The campaigns directly point out the importance of planning for the future of one’s child. Interestingly, despite the fact that there is already a rush of child plan campaigns, this particular one from Bajaj Allianz have not gone unnoticed. As per the official sources, Bajaj Allianz has received SMS and calls from as many as 7,500 parents who wanted to plan for their child’s future within the first four days of the launch of the new campaign (the campaign was launched on October 25, 2009).

It is true that child plans are not new to the Indian insurance market and also that the plans put forward by the insurers are not very different from each other both in terms of features and deliverables. But then, the way the insurers are marketing the ‘old wine in new bottles’ and creating awareness among the Indian parents is certainly praiseworthy. However, what is more crucial for the insurers is that they have to add depth to their products by these campaigns. Because, if they fail, their brilliant effort in creating the buzz may finally end up landing them no where. After all, even good ads kill brands too. Hope they know this.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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