Monday, June 15, 2009

ICICI Bank: Innovation with Aggression makes a Market Leader

Mayank Arora | IIM Shillong

During the current time of recession, if B-School students are asked about their dream job, many will answer ICICI Bank. Since its inception in 1994, ICICI has grown to become India's largest private sector bank by market capitalization and second largest overall in terms of assets. The Bank boasts of some 24 million customers and presence in 18 countries with 1,449 branches and about 4,721 ATMs in India alone. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. Also it has the largest international balance sheet among Indian banks. It is rightly described by the competitors and industry experts in one word- “Aggressive”.

ICICI has always been a pioneer in the Indian banking industry specifically retail banking. It had introduced concept of branding in the banking industry. For this, it had extensively used the internet.

ICICI had focussed on various areas of marketing for building its brand. For this, it targeted and acquired customers in different market segments. Though the concept of Customer Relationship Management (CRM) is quite new, ICICI is following relationship management and database marketing since its inception. As stated above, ICICI has always believed in product innovation. It has also designed its channel strategy which aims at getting the common man’s “Share of wallet”.


Basis of Segmentation

  • Occupation - Different products for different occupational segment identified.
  • Income - Minimum balance serves as an income segment barrier.
  • Geographical - Concentrated on Tier 1 & Tier 2 Cities trying to extend reach.
  • Age – Different products like student account.


ICICI has a separate marketing strategy for different segments. It tailors its marketing campaigns to meet the needs of target prospects. It has long used technology to track and create differentiated product offering for different customer segments.


ICICI’s core proposition is reflected in the line ‘Hum hain na’, which spells trust, credibility and reinforces its position as a total financial solution provider (brought about through its cross selling effort). ICICI has followed modernization by making technology as the backbone of all its operations. ICICI is one bank which uses and applies international practices to the local context. For identifying the need of the customers, it has a ‘Product development department’, which continuously studies the market and analyses the competitive landscape.

Despite heavy competition in BFSI industry ICICI has managed to have product differentiation. For e.g. they have variants in various basic products like savings bank account to suit different customer base and different customer needs. Also, ICICI is an avid practitioner of product augmentation i.e. redefinition of the banking products with extra benefits and features added to the products. Pricing is one area every bank has to be careful about. Some of the ICICI’s pricing strategies are:-

  • Penetrative pricing aimed at achieving large market share
  • Philosophy of profit through volume
  • Effort to drive out competition
  • Price leader in retail banking product
  • Aggressive pricing facilitated through low cost of fund acquisition

ICICI’s distribution strategy is one of the best in industry. It has achieved this by cross selling of products as a major area of focus. ICICI has always made an effort to reach the customer rather than waiting for them. For this, it created the concept of DSAs (Direct Selling Agents) and DSTs (Direct Selling Teams). Also, ICICI has used internet, mobile, ATM’s and other technological device to reach and serve the customers.
ICICI’s promotion strategy is divided into two areas – Corporate Branding and Product Branding. The promotion is mainly through print media. Also there are various point of purchase tools for different products to reach relevant customer segment.

  • Some of the promotion tools used are promotional material at channel partner outlets, billboards, signboards, kiosks at residential and commercial complexes and organising events at corporate campuses.
  • With Baghban ICICI entered into In-Film promotions.
  • Co-branding initiatives include alliance with Amway India for launch of international credit card.
  • Indian Railways Catering And Tourism Development Corporation, in conjunction with ICICI Bank, announced the launch of mobile payments and ticketing system, offering IRCTC customers to book railway tickets via SMS and make payments through their ICICI Bank accounts.
  • Other initiatives include Cross brand associations i.e. acquiring databases of high net worth clientele of lifestyle products: Tie-up with ‘Woven Hues’.
  • Young Stars account-Promotion through tie-up with Cartoon Network, and in-series promotion through Tom & Jerry.

ICICI faced tremendous criticism during the worldwide banking failure, owing to some toxic assets and also for the loan recovery methods. But it will always be recalled as the most innovative brand, pioneering the modern day Indian banking.

1 comment:

Suyash Kant said...

appreciable point of view on icici's strategies.but i dont know if you are right about pricing strategies.obviously it would depend on ur approach.

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