Page 133 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes
Example: A fashion counsellor can look to target more and more men as men are
increasingly becoming fashion conscious.

7.3.3 Selecting Customer Segments

This is the last step in the segmentation process and involves developing the profiles of the
customer segments identified in the first step and analyzed for profit and growth potential in
the second step. It includes developing products or services and their marketing mix that match
the user profiles.

Example: The insurance services firm targeting the old people should design retirement
benefits plans or after retirements plans to cater to their needs.



Case Study State Bank of India: Segmenting the Market for
Competitive Advantage

1972, State Bank top brass were in deep trouble - of a different kind. There were no external
threats like takeovers (remember, it was the socialistic 70s and the only threat actually
comes from the government in the form of nationalisation, and it was already the owner),
nor from any major regulations or from any competitive product or system innovations.
The top brass realized that the country’s premier bank was suffering from itself! It was not
effective and beginning to go out of control. They went to the country’s premier business
school, Indian Institute of Management, Ahmedabad (IIM-A) to pin-point the disease as
well as get workable solutions. Those were the days when it wasn’t fashionable for corporate
India to go to the Big Three accounting and consulting firms!

SBI got value for its money. IIM-A diagnosed the problem as one of uncontrolled growth,
without any focus, being driven by government agenda, and especially had no idea about
its myriad customers and markets.
The bank had come to occupy a significant position in the country’s fortunes, affecting and
touching the lives of millions of people. Started as a clutch of Presidency Banks, they were
merged to form the Imperial Bank of India and then adorned the garb of its present avatar
in 1955 as the government’s bank. It (and its seven subsidiaries – later renamed as Associates)
was the sole Public Sector Undertaking (PSU) bank, till in 1969 nineteen banks were
nationalized. It suddenly lost its USP (ironic that at one time being associated with the
government was a USP!) - there were now twenty government owned banks, with the
same trusts and guarantees that goes with government ownership, as also bad service.
They all grew frenetically and they all offered the same offers at the same rates.
But SBI suffered more because of its size. The consultancy report indicated that the bank
had grown so fast and was now so unwieldy that it resembled an octopus that had no idea
what its tentacles were doing. But the solutions offered by the two consultants were
different, reflecting the difference in geopolitical realism. Ironically, three decades later,
the two giants in their own fields were again facing problems - of another kind. IIM-A’s
solutions were: focus on customer, more decentralisation and a matrix structure. It
recommended that the entire activities of the bank should be geared towards the customer
and its structure and functions should be based on the customer profile. Previously SBI
Contd...

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