Page 134 - DMGT510_SERVICES_MARKETING

Unit 7: Service Segmentation and Targeting

had regional offices all over the country, which were monitored by the head office at Notes
Mumbai, then Bombay. Now it was told to segment the market and restructure accordingly.
Restructuring

SBI did a massive restructuring exercise which ran the length and breadth of the bank. Its
restructuring was in synchronisation with the segmentation principle with multiple bases,
which would give it more focus, accountability and help recharge the financial behemoth.
 Geographic: It divided itself into ‘Circles’ each monitored by a Local Head Office
(LHO). The ‘Circles’ were segmented into politically contiguous areas based on
states. Thus Bhopal Circle had its LHO based at Bhopal and covered the whole of
erstwhile Madhya Pradesh and now includes both MP and the newly hived off
Chhattisgarh; Bhubaneshwar Circle consisted of SBI branches in the state of Orissa
while Hyderabad Circle had the state of Andhra Pradesh as its domain etc. Smaller
states were clubbed with larger states to be monitored from the same LHO. Thus
Goa came under Mumbai LHO while Kolkata LHO monitored Sikkim and Andaman
and Nicobar Islands and Delhi LHO controlled Delhi (which itself had over 240
branches!), Haryana, the whole of Rajasthan and parts of western Uttar Pradesh
(UP), etc.
 Further geographic segmentation: Each ‘Circle’ was further subdivided into four
‘Modules’ and each ‘Module’ controlled four ‘Regions’. Thus Bhopal Circle was
divided into four ‘Modules’ which were named after the town in which the Module
offices were situated: Bhopal, Jabalpur, Raipur and Gwalior Modules. Each of the
Modules had four ‘Regions’ - numbered I to IV. Thus Jabalpur Module in Madhya
Pradesh would have Region I consisting of branches in Jabalpur District and town;
Region II would consist of Mandla, Seoni, Balaghat and Narsinghpur Districts; Region
III would be the northern districts of Rewa while Region IV would be the eastern
coal belts of Shadol, Sarguja, etc.
Exhibit 7.1: The Organisational Structure of SBI

 Administration, Empowerment and Internal Customers: Every LHO was headed by a
Chief General Manager (CGM) who controlled a bank territory equivalent to any of
the nationalized banks. Thus while Canara Bank had about 600 branches all over India
Bhopal Circle itself had about 550 branches! The CGM of a LHO was thus empowered
like any other public sector bank Chairman and CEO. The CGM was assisted at the
LHO level by two General Managers - GM Operations and GM Planning. The CGM
Contd...

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