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Brand Repositioning “If a brand does not reposition at theright time, it may not get a secondchance”.
CHAPTER 1 :INTRODUCTION
MEANING
In marketing, positioning has come to mean the process by which marketers try to
create an image or identity in the minds of their target market for its product,
brand, or organization.
Re-positioning involves changing the identity of a product, relative to the identity
of competing products, in the collective minds of the target market.
De-positioning involves attempting to change the identity of competing products,
relative to the identity of your own product, in the collective minds of the target
market.
Brand repositioning means rebirth of any brand for a particular product...relenshing
of the old technology or concept by innovative solution.Repositioning can be
required as the market changes and new opportunities occur. Through
repositioning the company can reach customers they never intended to reach in the
first place. If a brand has been established at the market for some time and wish to
change their image they can consider repositioning, although one of the hardest
actions in marketing is to reposition a familiar brand.
The repositioning strategy is rolled out in three stages: introductory, elaboration
and fortification stages. This involves the introduction of a new or a repositioned
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brand, seeking to underline the brand’s value over others, and to broaden the brand
proposition. It is truly tough to change the customer’s perceived attitude towards a
brand, and therefore the risk is great that the attempt to repositioning might be
unsuccessful.
After rolling out the strategy, it is time to modify the proposition through update
of the personality and through repositioning. There are benefits and risks with both
of this segments and it is of great significance that they are truly evaluated when
deciding the next step in the process.
THEORY & CONCEPT
Timely repositioning
Contemporary perception could involve Either the image or superior functional
utility. Iodex was almost the unassailable leader for
several years in the pain balm market but was forced to
reposition itself by Moov, which made rapid strides.
Dove is repositioning itself as a superior soap with moisturisers (as against its
previous `trial for results' positioning). Vim Challenge was a response to several
regional brands emerging in the dishwash market. Esteem's "Shall we go for a
drive, please?" campaign (where the son hopes his dad's pleasure at the ride in the
car will overshadow his poor marks) was triggered by the various offerings which
entered the mid-segment passenger car market.
If repositioning is not attempted by a brand in a timely manner, the brand may not
get a second chance. The powerful positioning of economy by the no-frills Maruti
800 during the mid-Eighties could have been
pre-empted by Ambassador, not necessarily by
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the same economy proposition: Ambassador even today is widely acknowledged as
a comfortable car for Indian roads and is also known for its space. Some of the
recent offerings in the passenger car market today use this as a strong proposition.
The brand could have used this effectively to create a favourable perception of
itself. Maruti 800 became almost a legend as much known for derailing Fiat and
Ambassador as it is for its fuel economy.
Even in fast moving consumer goods involving mundane household products,
timely repositioning matters. The Ujala brand of blue used to whiten clothes made
history with its liquid variant. The pioneering (and the brand which held the
dominance for years) Robin Blue had a powder variant before
Ujala was introduced. Powerfully repositioning Robin Blue
(even before introducing the liquid variant as a follower) might
have reduced the impact of the new entrant because of the
favour and trust Robin Blue enjoyed with consumers.
Burnol, the antiseptic cream for burns (it did attempt some sporadic repositioning
exercises) no longer seems to occupy the same space in the consumer's mind.
Women continue to cook as before and probably mostly in a
hurry to catch up with the pressures of life. Burnol being a
handy brand to overcome the inevitable small burns could have
been a probable proposition to reposition it.
With several categories jostling for consumer mindspace, there is a relevant
proposition required for a brand in the `small burns category' to get into the
considerations set of consumers. The timing of repositioning (in such cases) should
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be worked out to ensure that the category does not fade from the consumer's mind
because of a number of other categories emerging to create generic competition in
terms of the share of consumer's wallet.
For example, a brand traditionally used for burns may be forgotten because of
several categories of products and offerings like a cream for heels, herbal antiseptic
ones for multiple injuries and corn caps. Forhans toothpaste, Zambac and Saibal
multipurpose antiseptic ointments, Eno's for acidity relief, Waterbury's Compound
for `after-cough' recovery and Crook's Lactocalamine lotion are some of the brands
of yesteryear which could have maintained their dominance of the consumer's
memory with appropriate repositioning strategies.
Contemporary image
This matters in some categories which are conspicuous in terms of consumers'
usage and observation. With changing lifestyles and nuclear families in urban
markets (especially in the upmarket segments), the role of the male in the family is
undergoing a change. The `relationship' repositioning of Raymond is a good
example of a brand coming to grips with the changing psychographics of the target
segment. Fair and Lovely's repositioning as a brand for the aspiring girl making a
mark in a male-dominated world (woven around the cricket commentator
commercial) too is one such example. Pepsodent's commercial in which the mother
scolds her child for snacking and establishes the brand as a protector of teeth is
associated with traditional habits which have been highlighted to create a realistic
association between the brand and the target segment. Product/brand attribute
relevance to the habit of the user (children) and the buyer of the category
(concerned mother) has been used to reposition the brand. Lifebuoy's repositioning
on health based on hygiene is an attempt to take into consideration the priorities
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consumers place on heath in a deteriorating environment — one of the issues
raised frequently by mass media and consumer groups.
Changing the target segment
It is difficult for an established brand to change its target segment overnight
because of the prolonged associations and perceptions related to imagery and price.
However, there have been rare instances of a brand repositioning itself for a new
target segment. Cadbury, in an effort to make chocolates appeal to adults, created
the repositioning around `spontaneous joy' (the girl's dance in the cricket field) and
since then the mould version of its offering continues to be positioned for adults.
With the company offering different offerings for different segments, the strategy
for the mould version synergises with the overall strategy of the brand.
Timex,
which was targeting the lower-end watch market when it entered India, has
introduced expensive watches with high technology at the higher end of the
market. Technology, with its rub-off on the product's attributes, could be a
powerful factor in moving a brand from lower to higher segments. Changing the
target segment for an established brand is a delicate marketing exercise and several
aspects of marketing mix elements are involved. These are important from the
viewpoint of consumer perception.
Bata,
during the Nineties started dealing with designer brands: it had developed the
Power brand for youth and a number of offerings for middle-class consumers. In
the recent times, it has segmented its retail outlets into discount outlets and higher-
end ones. In such a situation, it may be difficult for the brand to reposition itself
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with a clear association. Communicating the newness can be seen in the `new,
`improved' versions of old established brands. The point that is important in such a
positioning is that consumers should be able to relate to the improved claims made
by the brand. If Rin is repositioned to provide extra whiteness, the attribute should
be recognised by consumers.
Decisions concerning repositioning
A brand need not always rely on repositioning: the decisions are related to the
strength of the company, competitive context and consumer perception. A brand
could create several sub-brands over a period of time in tune with the changes in
the environment. Hero Honda, after the success of its CD 100 almost two decades
ago, continues to hold sway over the market by creating several sub-brands each
distinctive from the other. It created SS, Passion and Splendor with differing
appeals. Sometimes, a premium offering needs to be repositioned when consumers
become more receptive to the brand over a period of time. Colgate Total, one such
offering, was initially positioned on multiple benefits but later, the same benefits
were positioned with the `12-hour protection' proposition.
Brand positioning and repositioning deals with the mind of consumer.
Brand repositioning is more complex as it has to take into account the perception
already created in the consumers' minds.
DEVELOPING BRAND DIFFERENTIATIONS
USP or the unique selling proposition of a brand continues to be a critical issue in
this era of digital marketing. Trout, one of the proponents of the positioning
concept, is of the opinion that any advertising for a brand should sell with a USP
rather than provide entertainment for viewers. USP positions a brand in the mind
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of the consumer and creates a strong differentiator for it from among competing
brands in the respective category. Fevistick (adhesive in the form of a stick) had
convience as its USP even though it is several times more expensive than the
regular gum. Maruti (the initial no-frills version) changed the Indian consumers’
perception of passenger cars. While a USP in today’s context can be a benefit from
brand attribute (ingredients of Colgate total resulting in multiple benefits
associated with oral care), there can be other ways also in which USP can be
formulated , by taking into consideration the various research inputs from the
appropriate target audience. Sidney Levy, a well known researcher in the area of
qualitative marketing presearch, proposed models on these qualitative aspects that
can be applied to the present day clutter of communication to ensure that the
message is conveyed to the intended segment. This can be very valuable to a
company interacting with an advertising agency to make sure that creativity is
meaningful and practical.
FACTORS THAT LEADS A BRAND TO REPOSITION
1) Operating environment - there could be changes in the environment brought
about by change in laws of the land etc. like ITC's shift towards FMCG and
apparels since tobacco industry is being hanuted world over due to its negative
factors.
2) Competition - Either you keep making the loudest noise or improve your
service deliverables a notch higher to that of your competition. In both cases it
calls for substantial resource allocation. So the simplest thing instead would be to
reposition yourself. There doesnt seem to be much of a dent in Airtells marketshare
despite the tough competition from Vodafone and our own BSNL.
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3) Brand positioning - Holds good for a lot of old world brands that have been
built on a sound proposition that was relevant in those days but look weak in
modern times. Like videocons change in positioning from a desi brand to that of an
international one.
TOP REASONS TO REPOSITION A BRAND
Brand repositioning is necessary when one or more of the following conditions
exist:
Your brand has a bad, confusing or nonexistent image.
The primary benefit your brand "owns" has evolved from a differentiating
benefit to a cost-of-entry benefit.
Your organization is significantly altering its strategic direction.
Your organization is entering new businesses and the current positioning is
no longer appropriate.
A new competitor with a superior value proposition enters your industry.
Competition has usurped your brand's position or rendered it ineffectual.
Your organization has acquired a very powerful proprietary advantage that
must be worked into the brand positioning.
Corporate culture renewal dictates at least a revision of the brand
personality
You are broadening your brand to appeal to additional consumers or consumer
need segments for whom the current brand positioning won't work. (This should
be a "red flag." This action could dilute the brand's meaning, make the brand less
appealing to current customers or even alienate current customers.)
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CHAPTER 2 :STAGES & STRATEGIES
STAGES IN BRAND STRATEGY DEVELOPMENT
The implication with the term” repositioning” is that a company modifies
something that is already present in the market and in the consumer’s mind. The
definition of repositioning changes different individuals and professions. To view
the different definitions and perceive a greater understanding about this concept,
three examples of repositioning given by individuals in different professions is
stated below:
“Repositioning is a change, principally about trigging the vision, mission and value
in
a new direction that is more suited for the brand in the future”
“Principally, reposition concerns changing the consumer’s perception of the
brand”
“Repositioning is built upon the change of unique and differentiated associations
with the brand in some kind of direction, it is about having a balance between the
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Establishing the brand proposition
Selecting appropriate marketing mix
Rolling out the strategy Introductory stage Elaboration Stage Fortification Stage
Modifying the proposition
Repositioning Updating the
personality.
category party and differentiation when using reposition strategies”(Leading brand
strategist)
From these definitions, it is obvious that reposition is about moving
something to a newer and hopefully to a more attractive and relevant position. The
purpose of the movement differs with regards to what the company wants to
achieve. A company might want to reach out to a larger target group, or be
involved in several different positions at the market. There is also a visible relation
between price and quantity aspects. When a company perceives the market as a
demand curve, the purpose is to down stretch or up stretch in this curve. When
moving down it is often spoken of as an expansion down wards, and when moving
up and there is a need for reaching the premium segment and expand up wards.
THE PRINCIPLE OF REPOSITIONING
When striving towards a new position in the market, it is important to understand
that consumer’s minds are limited. People’s minds select what to remember and it
is therefore significant to convince the consumers with great arguments. The
market demand changes rapidly and therefore repositioning can be necessary to
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New Position
Previous position
Experienced Quality
Price
meet these demands, newer and stronger arguments have to be established to
convince them to stay as loyal customers.
As stated in the literature, repositioning is a very complicated matter and
therefore there are no detailed theories or models. The aim with repositioning
differ from person to person, and the only connection between all the different
theories is that repositioning is moving something from somewhere towards a
greater position at the market.
BRAND REPOSITIONING STRATEGIES
Corstjens and Doyle (1989) identified three types of repositioning strategies:
(1) Zero repositioning, which is not a repositioning at all since the firm maintains
its initial strategy in the face of a changing environment;
(2) Gradual repositioning, where the firm performs incremental, continuous
adjustments to its positioning strategy to reflect the evolution of its environment;
(3) Radical repositioning that corresponds to a discontinuous shift towards a new
target market and/or a new competitive advantage.
After examining the repositioning of several brands from the Indian market,
the following 8 types of repositioning have been identified. These are:
1. Increasing relevance to the consumer
2. Increasing occasions for use
3.Making the brand serious
4. Falling sales
5. Bringing in new customers
6.Making the brand contemporary
7. Differentiate from other brands
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8.Changed market conditions.
It is not always that these eight categories are mutually exclusive. Often one reason
leads to the other and a brand is repositioned sometimes for a multiplicity of
reasons.
SEGMENTATION – REPOSITIONING LINKAGES
Segmentation is the process of dividing a cluttered market (in terms of a mix of
consumers) into homogeneous markets in such a way that a company can target
specific consumer segments with its positioning strategies. Segmentation variables
are used to divide the market. In a dynamic competitive context, marketers should
consider the constant changes in their target segments and reposition the brand
accordingly. The following aspects provide linkages between segmentation-related
changes and brand repositioning direction:
How should brands be repositioned when segment of consumers buying
brands offering value shift to unbranded offerings? This happens in
unorganized markets in categories like edible oil, pens and moulded
luggage. An un-organised market is one which has a number of unbranded
offerings promoted only through low prices in local markets. They are
generally not branded and fall short of quality expectations. These offerings
are sold within a vicinity of about 20 to 30Km from the place of
manufacture and some of them may also be illegal offerings (duplicates).
How should a brand that wants to appeal to a different segment be
repositioned?
How should a brand that wants to supplement its existing brand personality
position itself for an additional segment to be repositioned?
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How should a brand, successful with a functional proposition, be
repositioned to another segment which may require a symbolic orientation
apart from the functional qualities?
How should a premium brand that wants to enlarge its niche segment after it
has created brand awareness, be repositioned?
How should a brand be repositioned when it wants to reach out to
consumers at the upper end of the market? (It has to be ensured that the
brand does not get into an “image trap” as it is moving from down market to
an up-market position).
How should a brand be repositioned when it wants to shed its image (due to
competitive reasons) after maintaining a proposition for a period of time in
the market?
The seven linkage points out to the fact that brand repositioning in a
competitive environment involves a combination of issues concerning brand
associations, sub-brands, product-line offerings and marketing mix
elements.
SUSTAINABLE CORE PROPOSITION (SCP) STRATEGIES &
BRAND RELATED DIMENSIONS IN REPOSITIONING
There are seven kinds of repositioning strategies taking into consideration the
segmentation repositioning linkages and the basic idea of SCP & brand related
dimensions.
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Value-Oriented Repositioning
Segment-Oriented Repositioning
Celebrity-Oriented Brand Enhancement Repositioning
Symbolism-Oriented Repositioning
Upmarket Technology-Oriented Repositioning
Niche-Oriented Repositioning
Change of Image-Oriented Repositioning
The Above seven kinds of repositioning strategies are explained as follows:
Value-Oriented Repositioning
This strategy is useful in two situations:
1. When a brand offering values is competing against the unorganized
sector (explained in the example given below)
2. When a brand has strongly established a value proposition.
The examples are old ones but ones that offer insights for a conceptual
direction. The three examples reflect the importance of repositioning a
brand associated with value in the perception of consumers.
Reynolds is a brand of ball-pen which was launched in India during the
eighties. It was nearly double the price of the other competitive offerings
in the market. These offerings which were in the un-organised
sector(without registered brand names and marketed in a small territory)
were of poor quality. Reynolds used the skimming price(higher price
point) strategy and became a successful brand. Besides, Reynolds also
has a sturdy product casing( apart from a good, uniform flow of ink
which ensured easy writing).
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Though consumers paid more for Reynolds, they perceived it as a reliable
brand. Reynolds created this positioning and association through a good
product and higher price. Its advertisements created awareness but the
associations came from a “price quality” perception in that ball-pen
market. Repositioning Reynolds should involve a better quality product
and higher price (even if variants are launched), especially when a
number of brands have entered the market with similar offerings.
Akai was practically institutionalized the second-hand TV market in
India. At a time when consumers perceived “price number of features”
combination as an indication of value. Akai created value perception by
announcing exchange schemes. There were schemes by which consumers
could exchange their existing television for a new one and pay around 50
percent of the price for a new television. In a market where brands were
attempting to positioning themselves as “no frill-low price” or “feature
ridden” or through comparative advertisements that emphasized a few
extra features, Akai entered the mind of prospects through sales
promotion schemes. Akai could position itself as a brand which offers
value through good sales promotion schemes. Repositioning for Akai will
work through sales promotion schemes that are enhanced through proper
value addition. The creativity in repositioning exercise for Akai will lie in
the ability of the brand/organization to launch innovative and competitive
sales promotion schemes. If a brand relies on certain unique
characteristics of the market(large number of second-hand buyers in this
context), it may be effective to use a similar approach while repositioning
it. Of course there are other options like creating a high quality product
and symbolic aspects. But the unique association of a brand is carried
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over with an innovative approach that is associated with the original
positioning strategy.
The edible oil market in India is largely dominated by manufactueres of
loose oil who sell unbranded, unpacked edible oil. The branded ones
cater to the upper end of the market. Vendee, a brand of edible oil created
a differentiation by reaching out to consumers through vending
machines-in an unpacked form. There was standardization of quality with
regards to this brand. Consumers (in the loose-market segment) who
were used to inconsistent quality of edible oil may have thought of
upgrading to vendee. The positioning routevendee was through the
innovative distribution channel. It was distributed through vending
machines. Repositioning the brand will involve a better quality oil
variants through vending machines. This will give the brand credibility
vendee’s original association has been with vending machines.
Segment-Oriented Repositioning
This strategy is useful when a brand wants to change the segment to which it
is currently catering.
Sunny was a two-wheeler scooterette (a hybrid between a moped and
(scooter) which was initially positioned for teenagers. The brand was
endorsed by a well-known sports celebrity. The initial positioning wa
through a novel product (scooterette) and the glamour of the celebrity
both of which may have appealed to the target segment. The company
probably realized that the product(50cc) was not much of a success in the
market. This was reflected when the brand was repositioned as Sunny Zip
and it was upgraded to 75cc. the target segment for the repositioned
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product was women, comprising the housewives and college-going girls.
The repositioning involved up-gradation of the product change of
segment and a sub-brand(Sunny Zip). The advertisements did not
incorporate a celebrity. They showed typical users of the product. Brand
imagery was used to strengthen the brand association. This is an
example of brand repositioning for a new target segment after the product
is modified.
Another interesting example is the Fair & Lovely fairness cream. After
decades of positiong on the fairness platform for young people, the brand
started targeting middle-aged married women. The TV commercial
amplifies the usage of the brand by a married women (user imagery) and
not so much the brand benefit(which has been hammered in for years).
This approach also shows how a benefit can be extended to different
segments at different times, especially when the original target segment
may be exposed to new brands. This approach may require development
of a strong brand before such a repositioning is done. Fairness as a
benefit was being extended to married women at a time when personal
grooming has become important for consumers I in the Indian context.
The brand did not continue the repositioning presumably because of
strategic reasons which gave away to several other variants subsequent to
the repositioning exercise discussed.
In consumables, Cadbury chocolate ( moulded variant in the rectangular
slab) was positioned for children in the eighties. In the nineties, the same
variant was directed towards adults using a change in the brand imagery.
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The objective of the brand was to expand the market and bring in adults
into its segment Cadbury introduced a variant of the moulded version
under the sub-brand Cadbury’s Gold. This sub-brand was positioned on a
permissive and mischievous personality platform with appropriate visuals
(in the TV commercial) the TV commercial showed a lady clad in
permissive apparel in a gymnasium embracing men. This association
contradicted the “fun-loving adult” association of the earlier moulded
variant that was not considered as permissive in the Indian context
(during the time the brand was launched, and the context has changed
since then). Cadbury’s Gold did not sustain itself in the retail shelves.
‘Was it because of the contradictory brand associations?’ is the
conceptual angle that needs to be addressed while discussing
repositioning strategies. This example reflects the impact of positioning a
new variant, using overall brand associations, associated also with the
earlier variants.
Celebrity-Oriented Brand Enhancement Repositioning
This strategy is useful when brand uses imagery (can even be a celebrity) to
strengthen its association and makes an attempt to enter a new segment
based on the strength of the same imagery.
BPL, a brand in consumer electronics, originally operated in business-to-
business marketing (X-rays and telecom) before moving into televisions,
its first product category in consumer electronics. The brand initially
positioned itself as one associated with high technology. This is a typical
example of a brand attempting to use technology as an intangible.
Consumers may have exhibited a strong preference towards the brand
because of tis technology association without even knowing its
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intricacies. During the mid-nineties the brand repositioned itself using a
celebrity association. The celebrity had a charismatic appeal(for masses
as well as elite) and would have been a good fit for the brand which is
targeting the rural Indian population. The company is also marketing
refrigerators, microwaves, radios, CDs and kitchen appliances. The
repositioning using a celebrity did not elaborate on product attributes or
benefits. It used ethnocentrism, a personality-related concept which
reflects a strong tendency on the part of an individual to buy products
which are made in his own country. The celebrity in the TV commercial
spoke about the conviction which consumers should have about Indian-
made products. This was an effective strategy considering there are a
number of multinational companies in the consumer electronic categories
in india. The repositioning exercise added a favourable ‘Indian’
association to the associations of the brand that had a favourable image.
The repositiong may have also helped the brand to make an impact on
rural consumers, for whom the celebrity held a tremendous charisma.
Symbolism-Oriented Repositioning
This strategy is useful when a brand wit h a strongly entrenched “functional”
image wants to expand its market using a symbolic positioning without
losing its earlier association.
Bajaj, a brand in two-wheelers, was in the Indian context for over several
decades. The brand personality of Bajaj was ‘rugged, trustworthy,
economy-oriented and a family friend’. With lifestyle changes in the
nineties, Bajaj attempted to reposition itself as a contemporary hip two-
wheeler. Bajaj came out with specific sub-brands (affixed to the
reassuring name of Bajaj-Bravo and Classic. Both these sub-brands were
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positioned on the lifestyle platform. Classic was positioned as a vehicle
which provided a comfortable and enjoyable experience to an executive
who leads a high-pressured life. Bravo was positioned as a scooter which
would appeal to men who like to havea ‘macho’ image. The repositioning
exercise here was attempted partly with new sub-brands. The
repositioning exercise of Bajaj with the sub-brands reflects the
alternatives available for an entrenched brand to reposition itself (there
may be several other factors that go into the actual success of an
offering).
Raymond is a well-known upmarket brand in textiles. The brand initially
positioned itself as a “guide to a well-dressed male”. The brand is priced
higher than a number of other fabric brands and it has a network of
exclusive outlets throughout the country. The brand repositioned itself a
decade ago as the fabric for “the complete man”. The repositioning
attempted to emphasize that the offering was meant for an up-market
consumer who also has his share of family experiences in life.
Repositioning of the brand involved lifestyle aspects after the functional
proposition of the brand was well-accepted by consumers. The lifestyle
repositioning of the brand has created a strong differentiation for the
brand.
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Upmarket Technology-Oriented Repositioning
This kind of strategy is useful when a down market brand attempts an
upward stretch apart from continuing to serve its current consumer
segments.
Pond’s os a household name in India. The brand repositioned itself as a
contemporary skin-care brand using the technology and research
association.The brand used the concept of “Pond’s Institue” that was
associated with state of the art products. Pond’s currently has skin-care
products in the upper end of that market. The repositioning of the brand
created a perception which helped it to “move” to the higher end of the
market without a new brand or sub-brand from the perception of
consumers. It is also worthwhile to note that the brand could stretch itself
upwards without getting into the “image trap”.
Niche-Oriented Repositioning
This strategy is useful when a niche brand (premium one) is interested in
expanding its consumer base after it has created brand awareness.
Dove is premium soap in the upper end of the soap market and the brand
has a small market share in the overall soap market. Initially, the brand
attempted to reposition the entire soap market by introducing the brand as
a moisturizer bar. Dove’s TV commercial compared other offerings of
soaps and conveyed that the brand is superior to soaps(establishing the
point of difference after conveying the point of parity to enable the
consumers to know that the brand competes with soaps). The positioning
focused on the advantages of using a moisturizer bar. Dove’s positioning
in a niche market involved the repositioning of the soap category. The
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brand continued to reposition the soap category with a new TV
commercial on the same theme.
Change of Image-Oriented Repositioning
It is worthwhile to investigate the impact of marketing mix elements on
positioning strategies. An interesting aspect is that the environment can also
influence the positioning of a brand along with its marketing mix strategies.
Maruti 800 (“the no-frill” version) was a car launched in the economy
segment in India during the mid eighties. The brand was sold at a
premium for three years. Maruti was not a brand which a middle class
household in india could afford. The periodic price hikes in over a decade
and the proliferation of two-wheeler brands (had made Maruti a status
symbol, if not a premium one). When competition entered the market
with several offerings the perception of “value” underwent a change in
the minds of consumers. After 15 year of success with the “small” car
image, Maruti has repositioned itself as a car for the Indian middle class.
Repositioning has initiated a change in the brand image without affecting
the core economy proposition of the brand.
Ray Ban, the global brand of sunglasses, entered india during the early
nineties through a positioning which emphasized the brand name. Later,
the brand was repositioned using product benefits as the theme of the
repositioning exercise. Some variants in the product line were also
positioned on the lifestyle theme with a specific sub-brand (Killer Loop).
Repositioning of the brand also consisted of introducing low-priced
variants to create a perception that the brand was not as up-market as
consumers perceived it to be. In all these repositioning examples, the
brands made use of “image change”. The sustainable core proposition
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(SCP) is extremely useful in terms of creating brand associations suited
for the long term usage. But there can be a number of situations in which
the positioning association of a brand needs to be changed, and the
consistency involved in SCP cannot be followed when the brand is not
accepted by target segment. A framework which emphasizes the usage of
SCP and non-SCP strategies based on two specific dimensions can help
marketers to decide on the applicability of the SCP in a given marketing
environment. The framework also helps to analyze the changes required
to fine tune positioning strategies so that the brand is accepted by the
target segment after the initial positioning strategy has failed to evoke the
required response.
FOUR PHASED BRAND REPOSITIONING APPROACH TO ACHIEVE
THE INTENDED BENEFITS
A four-phased brand repositioning approach can be followed to achieve the
intended benefits:
Phase I. Determining the Current Status of the Brand
Phase II. What Does the Brand Stand for Today?
Phase III. Developing the Brand Positioning Platforms
Phase IV. Refining the Brand Positioning and Management Presentation
23
The benefits that can be derived from brand repositioning exercises can be
summarized as:
Value over others
Updated personality
Relevant position
The risks associated with such strategies are:
Loss of focus
Neglecting original customers
Losing credibility for the brand
Confusing the brand
Therefore, brand repositioning is more difficult than initially positioning a
brand because one must first help the customer “unlearn” the current brand
positioning (easier said than done). Three actions can aid in this process: (1)
carefully crafted communication, (2) new products, packaging, etc. that emphasize
the new positioning and (3) associations with other brands (co-branding, co-
marketing, ingredient branding, strategic alliances, etc.) that reinforce the new
brand positioning.
This exercise is so critical to an organization’s success that the organization’s
leadership team and its marketing/brand management leaders should develop it,
preferably with the help and facilitation of an outside brand-positioning expert.
24
CHAPTER 3 : SUCCESS IN BRAND REPOSITIONING
S U C C E S S F U L B R A N D R E P O S I T I O N I N G
ASPIRATIONAL VS. ACHIEVABLE STRATEGIES
Many marketers are rethinking their brand’s positioning because competitive
pressures, new channels, and changing customer needs have eroded their brands’
positions of strength. How- ever, increased marketing expenditures to reposition
brands often fail to produce any improvements in either overall image or market
share. Our experience has shown that companies should focus on achievable rather
than aspirational positioning, and that three steps can help ensure success:
1 . Ensure relevance to a customer’s frame of
reference.
Be fully aware of the brand’s “frame of reference” so
that a repositioning strategy will resonate with
customers.
Look at a combination of customers’ attitudes and
the situations in which the brand is used to obtain the
most powerful customer insights.
25
2. Secure the customer’s “permission” for the
positioning.
Recognize that permission amounts to a reasonable and logical extension of the brand
in the customer’s eyes.
Leverage a brand’s unique emotional benets to carry
customers from their current brand perception to the
intended one.
3. Deliver on the brand’s new promise.
Identify the pathway of performance “signals” that
will convince customers of the new brand positioning.
Develop product/ service programs to ensure
consistent performance on these signals.
Track and assess performance against customer signals
prior to launching the new positioning.
Adopt an “interim positioning” to establish brand
credibility and performance.
An array of factors is requiring marketers today to rethink their brand positioning.
Changing customer needs are often eroding the brand’s established position. At the
same time, increasing competitive pressures created by new entrants and product
innovations, and the proliferation of new channels and promotional campaigns, are
driving marketers back to the drawing board. Many CEO s and CMO s, however,
nd themselves displeased with the results of their repositioning efforts. Increased
marketing expenditures devoted to repositioning brands in the minds of consumers
often fail to produce any improvements in either overall image or market share.
Be Relevant to the Customer’s Frame of Reference
26
When repositioning a brand, it’s essential for marketers to capture not just the
emotional and physical needs of the customer, but the dynamics of the situation in
which those needs occur. We refer to this as the customer’s “frame of reference.”
For example,
while Rasna and Tang are thirst- quenching drinks, consumers tend to think of them
in the broader context of sports, exercise, and physical activity. Importantly, the
frame of reference sets the parameters for customers’ consideration set – the
brands they will choose from. Indeed, most customers have a very specic denition
of what the brand is and what it can be relative to their frame of reference.
Repositioning a brand too far from this frame of reference creates customer
confusion that makes a positioning unsuccess- ful.
Being fully aware of the frame of reference for a brand can help ensure that its
repositioning strategy will resonate with custom- ers. But the frame of reference is
usually a combination of both customers’ attitudes and the situations in which the
brand is used. As a result, we typically nd the most powerful customer
insights and segmentation come from looking at a combination
of these factors.
In some categories, customers’ broader attitudes are the dominant factor.
How customers think about pet-related brands, for example, can be seen in
the context of how they treat their own pets – whether they view them as
family members, best friends/ companions, or in a less personal way. If
customers view pets as family members, the optimal message for the brand
will appeal to such human qualities as nurturing and pampering. This
27
“familymember” orientation or frame of reference may helpsupport a brand
extension to a full range of pet services,such as grooming and accessories.
Other customer needs are not as consistent, but better understood within the
context of specicsituations or sub- categories. In the eld of airline travel, for
example, the customer’s frame of reference may be a function of the
type of trip they are taking. The customer who is used to traveling within the
U.S. in cramped coach-class conditions, for example, will have a much
different set of needs and expectations than the traveler who is used to ying
to international destinations with all the comforts of rst-class service.
As a result, in most instances the frame of reference is built upon a
combination of both of the above attitudinal and situational forces. For
example, while consumers may generally have a health-conscious attitude
about the foods they eat, on certain “special” occasions they may allow
themselves to become more indulgent, creating what we call a “need state.”
Securing the Customer’s “Permission”
Establishing the frame of reference does not automatically translate into successful
brand repositioning. To reach that end point, marketers must rest ensure they have
the customer’s “permission” to claim the new ground to which the brand aspires.
Because that permission amounts to a reasonable and logical extension of the
brand in the eyes of the customer, it requires building a “bridge” that can carry
customers from where they perceive your brand to be today to where you want to
take it in the future. Thus, for the Celestial Seasonings brand, the bridge leverages
customers’ perceptions of the brand as “organic, natural, and healthy” to allow the
brand to extend from its core product offering of teas into herb-based and
“alternative” vitamin and mineral supplements. Similarly, Marriott uses customers’
28
perceptions of the brand as a leader in hotels and “living-care” to extend the brand
into assisted living for senior citizens.
Emotional brand benets can provide the most powerful source of brand permission.
If a brand is currently meeting the customer’s emotional needs, then extension of
that brand into an allied product/ service arena becomes much more plausible and
acceptable – the extension is likely to be granted customer permission. For example,
the strong emotional benets associ- ated with the Hallmark brand in greeting cards
allowed for the extension of the brand into wrapping papers, ornaments, and other
products with emotional ties to celebration and com- memoration. A strong brand
identity can also help marketers secure the desired permission from consumers.
Because Victoria’s Secret owns or is associated with the notion of intimate
moments,
for example, it would be easier for that brand to get permission to introduce a new
line of lingerie or perfume with a sensual connotation than it would be to launch a
line of jeans or handbags.
In repositioning, marketers must embrace the idea that they are brand “stewards,”
while customers dene their relationship with the brand and determine the basis for
the relationship. A
steward must spend more time deeply understanding what customers really think
about the brand and where potential “bridges” to growth and new positionings
exist.
29
CHAPTER 4 : INTRODUCTION TO AXIS BANK
ORGANISATION INTRODUCTION
Axis Bank, previously called UTI Bank, was the first of the new private banks to
have begun operations in 1994, after the Government of India allowed new private
banks to be established. The Bank was promoted jointly by the Administrator of
the Specified Undertaking of the Unit Trust of India (UTI-I), Life Insurance
Corporation of India (LIC), General Insurance Corporation Ltd., National
Insurance Company Ltd., The New India Assurance Company, The Oriental
Insurance Corporation and United Insurance Company Ltd. UTI-I holds a special
position in the Indian capital markets and has promoted many leading financial
institutions in the country. The bank changed its name to Axis Bank in April 2007
to avoid confusion with other unrelated entities with similar name.[2] Shikha
Sharma was named as the bank's managing director and CEO on 20 April 2009.[3]
As on the year ended March 31, 2009 the Bank had a total income of Rs. 13,745.04
crores and a net profit of Rs 1,812.93 crores
Branch Network
30
At the end of March 2009,the Bank has a very wide network of more than 726
branch offices and Extension Counters. The Bank has loans now (as of June 2007)
account for as much as 70 per cent of the bank’s total loan book of Rs 2,00,000
crore. For HDFC Bank, retail assets are around 57 per cent (Rs 28,000 crore) of the
total loans as of March 2007.
In the case of Axis Bank, retail loans have declined from 30 per cent of the total
loan book of Rs 25,800 crore in June 2006 to around 23 per cent of loan book of
Rs.41,280 crore (as of June 2007). Even over a longer period, while the overall
asset growth for Axis Bank has been quite high and has matched that of the other
banks, retail exposures grew at a slower pace.
If the sharp decline in the retail asset book in the past year in the case of Axis Bank
is part of a deliberate business strategy, this could have significant implications
(not necessarily negative) for the overall future profitability of the business.Despite
the slower growth of the retail book over a period of time and the outright decline
seen in the past year, the bank’s fundamentals are quite resilient. With the high
level of mid-corporate and wholesale corporate lending the bank has been doing,
onewouldhaveexpectedthenetinterestmargins to have been under greater pressure.
The bank, though, appears to have insulated such pressures. Interest margins, while
they have declined from the 3.15 per cent seen in 2003-04, are still hovering close
to the 3 percent mark. (The comparable margins for ICICI Bank and HDFC Bank
are around 2.60 per cent and 4 per cent respectively. The margins for ICICI Bank
are lower despite its much larger share of the higher margin retail business, since
funding costs also are higher).
HISTORY
31
1993
The Bank was incorporated on 3rd December and Certificate of Business on
14th December. The Bank transacts banking business of all description. UTI
Bank Ltd. was promoted by Unit Trust of India, LifeInsurance Corporation of
India, General Insurance Corporation of India and its four subsidiaries.
The bank was the first private sector bank to get a license under the new
guidelines issued by the RBI.
1997
The Bank obtained license to act as Depository Participant with NSDL and
applied for registration
with SEBI to act as `Trustee to Debenture Holders'.
Rupees 100 crores was contributed by UTI, the rest from LIC Rs 7.5 crores, GIC
and its four
subsidiaries Rs 1.5 crores each.
1998
The Bank has 28 branches in urban and semi urban areas as on 31st July. All the
branches are fully computerised and networked through VSAT. ATM services
are available in 27 branches.
The Bank came out with a public issue of 1,50,00,000 No. of equity shares of Rs
10 each at a premium
of Rs 11 per share aggregating to Rs 31.50 crores and Offer for sale of
2,00,00,000 No. of equity
shares for cash at a price of Rs 21 per share. Out of the public issue2,20,000
shares were reserved
32
for allotment on preferencial basis to employee of UTI Bank. Balance of
3,47,80,000 shares were
offered to thepublic.
The company offers ATM cards, using which account-holders canwithdraw
money from any
of the bank's ATMs across the country which are inter-connected by VSAT.
UTI Bank has launched a new retail product with operational flexibility for its
customers.
UTI Bank will sign a co-brand agreement with the market, leader, Citibank NA
for entering into
the highly promising credit card business.
UTI Bank promoted by India's pioneer mutual fund Unit Trust of India along
with LIC, GIC and its four subsidiaries.
1999
UTI Bank and Citibank have launched an international co-branded credit card.
UTI Bank and Citibank have come together to launch an international co-
branded credit card
under the MasterCard umbrella.
UTI Bank Ltd has inaugurated an off site ATM at Ashok Nagar here, taking the
total number of its
off site ATMs to 13.m
2000
The Bank has announced the launch of Tele-Depository Services for its
depository clients.
33
UTI Bank has launch of `iConnect', its Internet banking Product.
UTI Bank has signed a memorandum of understanding with equitymaster.com
for e-broking
activities of the site.
Infinity.com financial Securities Ltd., an e-broking outfit is typing up with UTI
Bank for a banking interface.
Geojit Securities Ltd, the first company to start online trading services, has
signed a MoU with
UTI Bank to enable investors to buy\sell demat stocks through the company's
website.
Indiabulls has signed a memorandum of understanding with UTI Bank.
UTI Bank has entered into an agreement with Stock Holding Corporation of
India for providing loans against shares to SCHCIL's customers and funding
investors in public and rights issues.
ICRA has upgraded the rating og UTI Bank's Rs 500-crore certificate of deposit
programme to A1+.
UTI Bank has tied up with L&T Trade.com for providing customized online
trading solution for
brokers.
2001
UTI Bank launched a private placement of non-convertible debentures to raise
up to Rs 75 crore.
UTI Bank has opened two offsite ATMs and one extension counter with an
ATM in Mangalore,
taking its total number of ATMs across the country to 355.
UTI Bank has recorded a 62 per cent rise in net profit for the quarter ended
September 30, 2001,
34
at Rs 30.95 crore. For the second quarter ended September 30, 2000, the net
profit was Rs 19.08
crore. The total income of the bank during the quarter was up 53 per cent at Rs
366.25 crore.
2002
UTI Bank Ltd has informed BSE that Shri B R Barwale has resigned as a
Director of the Bank w.e.f.
January 02, 2002. A C Shah, former chairman of Bank of Baroda, also retired
from the bank’s board in
the third quarter of last year. His place continues to be vacant. M Damodaran
took over as the
director of the board after taking in the reins of UTI. B S Pandit has also joined
the bank’s board subsequent to the retirement of K G Vassal.
UTI Bank Ltd has informed that Shri Paul Fletcher has been appointed as an
Additional Director
Nominee of CDC Financial Service(Mauritius)Ltd of the Bank.And Shri
Donald Peck has been
appointed as an Additional Director (nominee of South Asia Regional Fund) of
the Bank.
UTI Bank Ltd has informed that on laying down the office of Chairmanof LIC
on being appointed as Chairman of SEBI, Shri G N Bajpai, Nominee Director of
LIC has resigned as a Director of the Bank.
2002
B Paranjpe & Abid Hussain cease to be the Directors of UTI Bank.
35
UTI Bank Ltd has informed that in the meeting of the Board of Directors
following decisions were
taken: Mr Yash Mahajan, Vice Chairman and Managing Director of Punjab
Tractors Ltd was appointed
as an Additional Director with immediate effect. Mr N C Singhal former Vice
Chairman and
Managing. Director of SCICI was appointed as an Additional Director with
immediate effect.
ABN Amro, UTI Bank in pact to share ATMs.
UTI Bank Ltd has informed BSE that a meeting of the Board of Directors of the
Bank is scheduled to be held on October 24, 2002 to consider and take on record
the unaudited half yearly/quarterly financial results of the Bank for the half
year/Quarter ended September 30, 2002.
UTI Bank Ltd has informed that Shri J M Trivedi has been appointed as an
alternate director to Shri Donald Peck with effect from November 2, 2002.
2003
UTI Bank Ltd has informed BSE that at the meeting of the Board of Directors of
the company held on January 16, 2003, Shri R N Bharadwaj, Managing Director
of LIC has been appointed as an Additional Director of the Bank with immediate
effect.
UTI Bank, the private sector bank has opeaned a branch at Nellore.The bank's
Chairman and
Managing Director, Dr P.J. Nayak, inaugurating the bank branch at GT Road on
May 26. Speaking
36
on the occasion, Dr Nayak said, This marks another step towards the extensive
customer banking
focus that we are providing across the country and reinforces our commitment
to bring superior
banking services, marked by convenience and closeness to customers.
UTI Bank Ltd. has informed the Exchange that at its meeting held on June 25,
2003 the BOD
have decided the following: 1) To appoint Mr. A T Pannir Selvam, former
CMD of Union Bank of India and Prof. Jayanth Varma of the Indian Institute of
Management, Ahmedabad as additional directors of the Bank with immediate
effect. Further, Mr. Pannir Selvam will be the nominee director of the
Administrator of the specified undertaking of the Unit Trust of India (UTI-I) and
Mr. Jayanth Varma will be an Independent Director. 2) To issue Non-
Convertible Unsecured Redeemable Debentures upto Rs.100 crs, in one or more
tranches as the Bank's Tier - II capital.
UTI has been authorised to launch 16 ATMs on the Western Railway Stations of
Mumbai Division.
UTI filed suit against financial institutions IFCI Ltd in the debt recovery tribunal
at Mumbai to recover Rs.85cr in dues.
UTI bank made an entry to the Food Credit Programme, it has made an
entry into the 59 cluster which includes private sector, public sector, old private
sector and co-operative banks.
37
Shri Ajeet Prasad, Nminee of UTI has resigned as the director of the
bank.
Banks Chairman and MD Dr.P.J.Nayak inaugurated a new branch at
Nellore.
UTI bank allots shares under Employee Stock Option Scheme to its
employees.
Unveils pre-paid travel card 'Visa Electron Travel Currency Card'
Allotment of 58923 equity shares of Rs 10 each under ESOP.
UTI Bank ties up with UK govt fund for contract farming
Shri B S Pandit, nominee of the Administrator of the Specified
Undertaking of the Unit Trust of India (UTI-I) has resigned as a
director from the Bank wef November 12, 2003.
UTI Bank unveils new ATM in Sikkim
2004
Comes out with Rs. 500 mn Unsecured Redeemable Non-Convertible
Debenture Issue, issue fully subscribed
UTI Bank Ltd has informed that Shri Ajeet Prasad, Nominee of the
Administrator of the Specified Undertaking of the Unit Trust of India (UTI - I)
38
has been appointed as an Additional Director of the Bank w.e.f. January 20,
2004.
UTI Bank opens new branch in Udupi
UTI Bank, Geojit in pact for trading platform in Qatar
UTI Bank ties up with Shriram Group Cos
Unveils premium payment facility through ATMs applicable to LIC & UTI
Bank customers
Metaljunction (MJ)- the online trading and procurement joint venture of Tata
Steel and Steel Authority of India (SAIL)- has roped in UTI Bank to start off
own equipment for Tata Steel.
DIEBOLD Systems Private Ltd, a wholly owned subsidiary of Diebold
Incorporated, has secured a major contract for the supply of ATMs and services
to UTI Bank
HSBC completes acquisition of 14.6% stake in UTI Bank for .6 m
UTI Bank installs ATM in Thiruvananthapuram
Launches `Remittance Card' in association with Remit2India, a Website offering
money-transfer services
39
2005
UTI Bank enters into a bancassurance partnership with Bajaj Allianz General for
selling general insurance products through its branch network.
UTI Bank launches its first Satellite Retail Assets Centre (SRAC) in Karnataka
at Mangalore.
2006
UTI Bank unveils priority banking lounge
UTI Bank launches operations of UBL Sales, its Sales Subsidiary -Inaugurates
its first office in Bengaluru
UTI Bank announces the launch of its Credit Card Business
UTI Bank becomes the first Indian Bank to successfully issue Foreign Currency
Hybrid Capital in the International Market
UTI Bank Business Gold Debit Card MasterCard Launched – Designed for
business related spending by SMEs and self employed professionals
2007
AXIS Bank Ltd has informed that consequent upon handing over charge as
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI),
40
Shri. S B Mathur, the Nominee Director of SUUTI has resigned as a Director of
the Bank w.e.f. December 06, 2007.
AXIS Bank Ltd has informed that Fitch Ratings on December 14, 2007,has
upgraded the Bank's National Long-term rating to 'AAA(ind)' from 'AA+(ind)'.
AXIS Bank Ltd hasappointed Shri K N Prithviraj as an Additional Director on
the Board at Directors of the Bank.
Company name has been changed from UTI Bank Ltd toAxis Bank Ltd.
2008
Axis Bank launches Platinum Credit Card, India's first EMV chip based card
Axis Bank set up its branch at Ilanji at Meenakshi Nagar on the Coutralam-
Madurai road on April 16.
2009
Axis Bank today said its board has recommended the appointment of Shikha
Sharma, currently chief of ICICI group's life insurance business, as its next
managing director and CEO.
Axis Bank has set up a new branch at Perumbavoor. The bank has a network of
832 branches along with 8 extension counters and 3622 ATMs across the
country.
41
Axis Bank, on Wednesday entered into a strategic alliance with Motilal Oswal,
the financial services firm, in order to facilitate the online trading for the bank's
customers.
AXIS Bank Ltd has informed that the Board of Directors of the Bank at its
meeting held on June 01, 2009, inducted Smt. Shikha Sharma as an Additional
Director of the Bank.
Axis bank has received final clearance from the Securities and Exchange Board
of India (SEBI) to begin its mutual fund operation and will launch debt and
equity schemes soon whereas IDBI Bank is awaiting the regulator's permit for an
entry.
Axis Bank opened the new branch at Irinjalakuda while it has a network of 892
branches, 8 extension counters and 3,806 ATMs across the country.
2010
Axis Bank Limited has informed that at the meeting of the Board of Directors
held on January 15, 2010, the following decisions were taken:
(1)To appoint Dr. Adarsh Kishore, former Finance Secretary, Government of
India and former Executive Director, International Monetary Fund
representing Bangladesh, Bhutan, India and Sri Lanka,as the Non-Executive
Chairman of the Bank, subject to RBI approval;
(2)To appoint Shri S.B. Mathur, former Chairman, LIC and the National Stock
Exchange
of India, as an Additional Independent Director, with immediate effect.
42
AXIS Bank Ltd has appointed Shri M. S. Sundara Rajan, former CMD, Indian
Bank as an Additional Independent Director with immediate effect.
SER V ICES
Retail banking
Deposit schemes
Loans and advances
- Personal Loans
- Housing Loans
- Cards
- Consumer durables
- Auto Loans
Personal banking
Accounts
- Terms deposits
- Fixed deposits
- Recurring deposits
Cards
43
- Different variants like: Gold plus cards, silver and silver plus cards
Corporate banking
Accounts
- Normal current a/c
- Trust/NGO savings a/c
Services
- Private equity, mergers and acquisitions
- Advisory services
- Capital market funding
- E- broking
INFORMATION SYSTEM
Axis Bank has implemented a new derivatives system -- Summit FT by global
financial applications provider -- Misys. The system will provide the bank
with the ability to structure derivative products in real time, reduce time to
market, and give a single view of the entire transaction to the customer.
According to Prabhakar Saxena, general manager (India) of Misys, "A lot of
banks are providing derivative products on a back to back basis. But these are
plain vanilla products, which are uniform in nature.Summit FT will help Axis
to structure its derivative products differently and offer its customers products
that are different from the run-of-the-mill derivatives. Thus, it can charge a
premium for its dynamic services." The bank hopes to leverage the ability to
rationalize its currently dispersed functions to provide a single view of every
transaction to customers. Derivative transactions can expose the bank to three
broad categories of risks: counterparty credit risk, market risk, and operational
44
risk. With derivatives and structured products operations currently served by a
range of third party vendor solutions, spreadsheets, and customer built
platforms, the bank is predicting that rationalizing systems across front,
middle, and back office operations will provide significant competitive
advantage. "Apart from helping the bank to create new derivative products
without having to resort to developers each time, it also helps from a
regulatory compliance standpoint," said Saxena. The RBI favors transparent
online systems that can track every transaction and report it exactly as it is.
Currently spreadsheets are being used to record information, which leaves
room for misreporting,errors etc. The Summit FT product was evaluated
against Products by competitors Murex and Calypso before it was finally
adopted by Axis Bank.
SWOT ANALYSIS
Strength
Support of various promoters.
High level of services.
Knowledge of Indian market.
Weakness
Market capitalization is very low.
Not having good image.
Not been able to position itself correctly.
Opportunities
Growing Indian bank sectors.
People are becoming more service oriented.
45
Opportunities to be explored in global market.
Threats
Threat from various competitors.
- Foreign banks
- Govt. banks, e.g. SBI, PNB etc
- Private sector competitors like HDFC, ICICI
Future market trends.
Advent of MNC banks.
STRATEGIES FOLLOWED
Segmentation Strategy
The market segmentation strategy can give a firm a commercial competitive
advantage. Axis bank considers the customer as the base for segmentation.
This strategy crosses over traditional boundaries set within the company. It
takes into account important issues such as market demographic and
Psychographic Variables of niche markets currently being served or
targeted.
DemographicVariables
Demographic segmentation variables are amongst the most popular bases for
segmenting customer groups.
o Location
- Metros
o Occupation
- Business persons
46
- Salaried class(both govt and private)
- Working woman
o Age
- Senior citizens
- Minors
Psychographic Variables
o Lifestyle
- The people who believes in modern banking i.e. internet banking
(icontact, mobile recharge, e-payment, travel currency card etc.)
o Social class
- Many Marketers believe that a consumers "perceived" social class
influences their preferences for products & services.
Targeting strategy
The targeting strategy involves segmenting the market, choosing which
segments of the market are appropriate, and determining the products that
will be offered in each segment.
Target market
A 'target market or target Audience is the market segment which a particular
product is marketed to. Market Targeting is the process in which intended
actual markets are defined, analyzed and evaluated just before the final
decision to enter is made.
o Corporate banking market: this market target the industries
o Capital market: this segmented is targeted on the long term needs of the
individual as well as of industries
o Retail banking market: this segment is for the retail investor and provide
them short term financial credit for their personal, household needs
47
Selective specialization strategy
o This is a multiple-segment strategy, also known as a differentiated
strategy
o Different marketing mixes are offered to different segments. The product
itself may or may not be different - in many cases only the promotional
message or distribution channels vary.
o I.e. the bank selects a number of segments, each objectively attractive and
appropriate. There may be little or low synergy among the segment but
each segment proves to be worth full of it.
o For example, axis bank have different set of credit cards, each targeted at
different set of people i.e. segment and each one has its own importance in
bank.
Positioning Strategy
Positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand, or
organization.
Axis bank has positioned itself as a bank which gives higher standard of
services through product innovation for diverse need of individual and
corporate clients.
Axis banks are positioned as the technically advanced
They highlight following points in their positioning statement:
o Customer centric.
o Serviceoriented.
o Product innovation.
48
These are the main strategies followed by axis bank so as to achieve
competitive advantage over others.
CHAPTER 5 : REPOSITIONING OF BRAND UTI TO
AXIS BANK
The New Logo
TO
49
The logo depicts a strong growth path for the bank
supported by a strong base, indicating that the bank is
moving on from a position of strength
REPOSITIONING OF AXIS BANK
UTI bank is a well-known brand name that quickly comes to our mind. But on July
30, 2007 the bank has changed its name to AXIS BANK. Many of us might be
wondering why its name has been changed and some of us may not like to change
a well-established name. The initial reaction is as usual many of us didn�t link it.
Similar thing happened when BOMBAY became MUMBAI. But after a few
months we got accustomed to MUMBAI only. So what happens to UTI now, we
take a look at it. UTI was a government institution, its subsidiary UTI Bank has
been categorized as a private sector bank, according to RBI guidelines. UTI brand
was given in 1994 by its promoters and UTI Bank could use the brand only till
January 2008 as per Government directives. After the split of UTI, entities like
UTI Securities, UTI MF and UTI Bank were all allowed to retain the UTI brand
50
name for a while. Now that it is time for UTI Bank to shed the brand name, it has
opted to go for the more modernsounding Axis Bank. The recommendation for
name change to Axis Bank has aris......
Change is good’, especially when it comes with an image makeover to a better and
upmarket product positioning. In the Indian context at present, a bank, mobile
phone operator and an airline are hoping that their re-branding exercise will help
them achieve that. .
For UTI Bank, the re-branding story was slightly different. Making a clean break
from its UTI heritage, Axis was the name chosen to represent its new global
identity. Bringing in a set of twins to build an emotional connect with the new
brand, for UTI Bank it was an attempt to build its image of being a professionally-
run private bank with everything else remaining the same.
Sumanto Chattopadhyay, Executive Creative Director, Ogilvy & Mather, South
Asia, says, “The change of name from UTI Bank to Axis Bank is precisely that:
Only a name change. Everything else about the brand remains the same. Axis is a
strong name with an international aura to it. It is very much in keeping with UTI’s
success story in the private banking arena.”
Rolling out a multimedia campaign to announce the change of name from UTI
Bank to Axis Bank, it simultaneously reassured customers that the change of name
will in no way affect the services offered by the bank. The creative platform
adopted for the name change campaign was based primarily on twins: siblings
whose names are different, but are identical in every other way. Television was
given a priority as it gives the maximum reach amongst the mass media channels.
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Besides the mass media channels, the 2,500-odd ATM locations were also used to
convey the name change message.
Hemant Kaul, President - Retail, Axis Bank, explains that the name Axis is sharp,
short, simple and acceptable in any geography or language. “This is in line with
our global expansion aspiration. Axis Bank now has a pan-Asia presence — in
Hong Kong, Singapore, Shanghai and Dubai. UTI has a connotation of being a
PSU. The name ‘Axis’ reflects a more private sector identity, it reflects what the
bank is more closely than UTI Bank did. Axis reflects new thinking.” Also, as
Kaul elaborates, banking is a high-involvement product and involves product
safety and security. Therefore people had to be assured that nothing would change
with the re-branding from UTI Bank to Axis Bank.
THERE ARE 3 MAIN REASONS
1. They had to give up the UTI name after using it for 13 years as we were not
prepared to accept terms and conditions (including royalty) from UTI AMC
The decision to rebrand itself was taken by the bank as it was allowed to use
the 'UTI' brand name for free till January 31, 2008, beyond which it had to
pay royalty for using the name.
2. The recommendation for name change to Axis Bank has arisen from the
existence of several shareholder-unrelated entities using the UTI brand, and
the consequent brand confusion that this generates
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3. The name UTI bank was changed to AXIS bank as UTI gave a look of
government sector bank. They had to change our name to have our own
brand and identity. "The name was taken into effect consequent to the
approval of shareholders, Reserve Bank of India and the central government
(Registrar of Companies).
• The UTI brand is owned by UTI Asset Management Company
• The bank would change logo and colour of logo the bank is likely to spend
around Rs 50 crore in the re-branding exercise.
• The bank acquired the services of Ogilvy & Mather (O&M) to design and
implement the rebranding campaign.The new name was chosen considering
the bank’s pan- Indian as well as international presence.
•• The first time that a bank has dropped an established brand for an unknown
name.
•• The name Axis is chosen as it is simple and it conveys a sense of solidity and
a sense of maturity. It also has a universal appeal.
MARKETING OBJECTIVES
Banks wants to achieve following marketing objectives by the end of year 2011:
To get the market capitalization 500 crores
To get the 200 crore retail investment
To get 125 crore corporate investments
To get the 175 core capital investments.
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At present Axis bank is ranked at the 6th position (overall )by its market share and
capitalization and 3rd in the private banks category. It wants to get the 3 rd position
in overall Indian banking market.
RECENT DEVELOPMENTS
Shikha Sharma was named as the bank's managing director and CEO on 20
April 2009.
As on the year ended March 31, 2009 the Bank had a net profit of Rs
1,815.36crores
The bank now has 835 branches including extension networks across 30
States and 4 Union Territories.
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The bank also has overseas offices in Singapore, China, Hong Kong and
Dubai.
Crosses the 3,723 ATM mark in 2009
Launches Platinum Credit Card, India's first EMV chip based card .
Axis Bank is now trading at Rs 911.85 (17th Sep).
AXIS BANK FIVE FORCE MODEL(PORTER’S)
NEW ENTRY
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NEW ENTRY
Yes bank, Deutsche BankIndian Overseas BankVijaya bank
BUYING POWER OF CUSTOMER
THREAT OF SUPPLIERS RBI)
THREAT OF SUBSTITUTES (SHAREHOLDER OF CAPITAL MARKET)
AXISBANK
CORE COMPETENCESTRATEGY
For the private sector banks:
• Differentiation on the basis of area coverage.
• Restricted Reach.
• Level of service is the same.
• Axis got advantage because of Product Innovation.
For the government sector banks :
• High level of service quality and through product Innovation.
• AXIS not any where near, but has created a different set of segment.
• `People who believe in the higher set of services
For the International Banks :
• Differentiated itself on the base of the reach and coverage to the people.
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• Service level is somewhat same.
• In the future these banks may create a problem.
Chapter 6 :CONCLUSION
A SUCCESSFUL MAKEOVER AS AXIS BANK
In 2007 the bank decided to have an identity of its own distinct from its parent
UTI-I. Thus was born a brand Axis - a word which connotes solidity and gives a
feel of transcending geographical boundaries. The Bank successfully rebranded
itself as Axis Bank in July 07 which has helped it in shedding the faint perception
of being a Government owned entity. This brand makeover was very well
executed, thus ensuring No slippages in the banks growth trajectory which was
evident from the 67% growth in its customer accounts to 9.9 mn during FY08 as
against 5.93 mn during FY07.
The Bank today is capitalized to the extent of Rs. 403.63 crores with the public
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holding (other than promoters and GDRs) at 53.72%.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. The Bank has a very wide network of more than 896 branches and
Extension Counters (as on 31st December 2009). The Bank has a network of over
4055 ATMs (as on 31st December 2009) providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM networks in the
country.
The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence.
Axis Bank currently has global footprints in four countries by way of 3 branches in
Singapore, Hong Kong, Dubai and 2 representative offices in Shanghai and Dubai.
It has also sought permission from the Sri Lankan Government to open a branch in
Sri Lanka in the current fiscal. In these locations it offers corporate credit and trade
finance solutions, debt syndication and wealth management services to NRI
population settled in these cities.
Promoters
Axis Bank Ltd. has been promoted by the largest and the best Financial Institution
of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI
contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries
contributing Rs. 1.5 crore each.
SUUTI - Shareholding 24.09%
Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act,
1963, with a view to encourage savings and investment. In December 2002, the
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UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the
bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February
2003. In accordance with the Act, the Undertaking specified as UTI I has been
transferred and vested in the Administrator of the Specified Undertaking of the
Unit Trust of India (SUUTI), who manages assured return schemes along with
6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59
crores.
The Government of India has currently appointed Shri K. N. Prithviraj as the
Administrator of the Specified undertaking of UTI, to look after and administer the
schemes under UTI - I, where Government has continuing obligations and
commitments to the investors, which it will uphold.
ANNEXURE
QUESTIONNAIRE
Why the bank decided to change its brand name?
AXIS Bank wants to become an MNC bank, so the name change will
enhance image?
Was it have been very tempting for you to stay on the existing brand by
paying a higher royalty, given the cost and time involved in this exercise?
The UTI brand had a quasi-government sovereign ring to it, especially when
you go outside metros. That would have been an advantage, would you lose
it now?
Where do you position Axis Bank from the business point of view?
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In private sector peers, there are missing links, since most of them have a
mutual fund and insurance business?
The bank has often raised capital from the international market, rather than
making an offering to the Indian public. Why is it so?
Which are the other areas that the bank will branch out to, as you have raised
much capital?
Will the bank be looking at acquiring another bank, since you have adequate
capital?
The central bank has told your bank to put a succession plan in place?
FINDINGS
Axis Bank had done change of brand name partly because there are shareholder-
unrelated entities that carry the UTI brand, which was becoming increasingly
untenable... If there are no shareholder relations between the two organisations, so
they cant actually share a common name.
When UTI was split into two vehicles, the brand was given to UTI Mutual Fund
and others were permitted to use the brand only till January 2008. When it became
clear to them that it was no longer tenable, they decided to have a brand of their
own. The name Axis was chosen as it means a line of reference, around which
everything is measured.
Axis bank felt that with time, people will think of them as Axis Bank. The test is
whether in the next six months people would forget their old name. Otherwise,
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nothing really changes in the bank. They raised capital worth Rs 4,500 crore ,
which would help Axis Bank start off on a strong footing. They felt that this capital
would last at least for three years in the case of pure organic growth. One of the
few banks to have gone in for a brand makeover, UTI Bank has now assumed a
new name, Axis Bank. PJ Nayak, the chairman and CEO of Axis Bank, seems to
be quite clear about the way forward, the change in identity, the positioning of the
bank, the pros and cons of pursuing organic growth, etc.
In recent years, they have contributed more than their fair share on restoration of
the UTI brand. But when it was clear to them that there was no other option, they
decided to bite the bullet. They decided to assume their very own identity. The UTI
identity came to them from the undivided Unit Trust of India (UTI). The split of
UTI was the starting point for what was eventually a search for a new identity.
Axis banks customer base is very different from the customer base of a mutual
fund. So they were never really able to ride on the brand. The pace at which their
customer base has grown indicates the level of customer service they provide.
Also, the UTI brand was seen as a public sector brand. They are a board-managed
private sector entity. By changing the name, they could reinforce this image. They
have taken the first step towards seeing ourselves as becoming an MNC bank from
India. they have presence in four overseas locations - Singapore, Hong Kong,
China and Dubai. This is part of a journey to become a pan-Asian bank and then,
eventually, a bank that is more multinational. They are foraying into smaller towns
and entering district headquarters in a big way. In the next thirty months, they want
to be present in 450 district headquarters. they have received licences to open 150
branches and 500 ATMs. They plan to open 125 branches by July 2008, half of
which would be in large cities. Axis bank are also setting up a large agri financing
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business for which they need to be close to farmers, hence they are opening
branches in villages.
Besides, the bank has set up priority banking branches for customers with deposits
of over Rs 5 lakh. It is one of the most fastest growing customer base of our bank,
growing at 4% each year. They have three such specialised branches now, and plan
to have one each in all the major metros. Commercial banking is something Axis
Bank have tried to focus on since their inception. As the first step towards
diversion, they have set up an AMC to manage a private equity venture. Axis Bank
would be in a position to launch the first tranche of the fund by end of September.
The AMC will provide equity support for infrastructure projects. There are not
many private equity funds here, focusing on infrastructure projects.This is partly
because wholesale offering always fetches a better price, and they also decided to
cast the net wider than the Indian shores. The funds were raised through a
combination of GDRs and QIPs. they also saw to it that they go for uniform
pricing of shares, which has in turn protected the minority shareholders. Axis Bank
is growing at 45-50% every year. If they grow purely organically, this capital will
last for 3-4 years. But they are looking at other areas within the financial services
domain. Going forward, Axis Bank could also look at evolving into a group.Within
the banking space there are not many opportunities available. Many of the old
private sector banks have a size of -three months of our growth. Also, there are
issues relating to the integration of technology platforms and human resources.
They have a clear business model, under which they see no value in a merger or an
acquisition purely to acquire branches; they get licences easily from the central
bank. May be, they could look at such options in the wider financial services space,
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beyond the mainstream banking sector.The succession plan to place with central
bank is to be decide by the board of directors.
REFERENCES
Websites :
www.wikipedia.com
www.thehindubusinessline.com
www.marketingritson.com
www.marketingprofs.com
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www.economictimes.com
Books :
Consumer Behaviors & branding –S. Ramesh Kumar.
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