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The Retail Dilemma

By Marketing Research Team, 3EA
The Retail Dilemma

The decision maker in the case is Mrs. Reema Deshmukh, a senior branch manager of the public sector bank, National Bank, who is confronted with the question of how to bring about a marketing culture in the organization in order to respond to the competitive pressures in the retail banking sector.

The bank has recently entered the sector with ambitious plans and a clearly articulated vision of becoming the most preferred service provider in the retail banking segment.

There is a major shift in the psychographic profile of the consumers as also their spending patterns and lifestyles, which presents wonderful opportunities for business growth.

However, there are major challenges in the market place which need to be addressed satisfactorily. For instance, consumers have grown to be more value conscious and choosy.

The switching costs in the banking industry is low.

Public sector banks are now focusing on technology expansion, while in the pre liberalised era, they were focusing on geographical expansion of their branches.

The shift from manual operation to branch computerization and networking of branches has been challenging enough to implement. While most of the banks were still struggling with this, the ATMs and internet banking, not to forget phone/mobile banking were all being introduced in rapid succession. This has been welcomed by the increasingly techno savvy and convenience conscious consumer.

Technology has thus facilitated the development of alternative delivery channels with the result that the branch has to deal with multiple dynamic channels from a single static channel earlier.

These challenges can only be met through focused marketing efforts and consumer retention strategies.

Another issue is that the playing field in not level between the public sector banks and the other private and foreign banks as far as the retail sector is concerned. Nor does National Bank have the organizational flexibility required to be nimble footed in the market like their private counterparts.

Also, the public sector bank has other developmental objectives which cannot be compromised.

Both these factors create organisational constraints in developing marketing policy, procedures and programs.

Given these realities, the branch manager is faced with the dilemma of how to create a marketing culture in a short span of time given the organizational constraints, such that the retail lending business can be grown in the face of stiff competition and demanding consumers?

ISSUES TO BE RESOLVED

The specific questions thrown up are:

  1. Is it good enough to go in for traditional bases of segmentation in the growing retail lending market?
  2. How can we differentiate ourselves from the competition in terms of services?
  3. How can one get additional insights into the thinking of the consumer so that we can position and market our products better?
  4. Is the product basket adequate to edge out competition in meeting the consumer needs?
  5. What can be done to get new business and retain customers against competition, given the poor discretionary powers given to branch managers?
  6. How to increase the cross sells through various channels more intelligently?
  7. How to bring about a marketing culture in the bank given the organizational constraints in a public sector bank viz layers of hierarchy, laid back work culture, bureaucratic mind-setetc.?

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Case Study by: Marketing Research Team, 3EA