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HDFC- The Extraordinaryordinary Company.

case -19

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HDFC- Overview

Established in 1977 by Mr. Hasmukhbhai Parekh

Promoted with an initial share capital of Rs 100 million.

HDFC is Indias premier housing finance entity in

existence for over 34 years. Primary objectives of HDFC

To cater social need- promoting home ownership byproviding long term finance.

To enhance residential housing stock in the country.

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Though housing remains the core business, HDFChas continued to make investments in its subsidiaryand associate companies.

Competitors

ICICI Housing Finance

State Bank of India Home Finance

Housing Urban Development Corporation(HUDCO)

LIC Housing Finance Limited

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SWOT Analysis

Strengths :

oVast distribution network.

o Great brand image.

o High degree of customer satisfaction.oWidest range of home loans and deposits products.

o Efficient and effective service.

o Beside the core business , HDFC has continued tomake investment in its subsidiary and associatecompanies.

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Weaknesses :

o Customer service staff need training.

o Interest rate war persistent

o Strict policy of funding.o Unable to cover rural areas.

o Unable to attract large number of middle income

house holds.

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Opportunities :

o Untapped rural markets.

o Strong economic growth .

o Lower SLR and CRR with enhance liquidity, so moreloans can be offered.

o Tax rebate on house loan.

o

Rising disposable income.

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Threats :

o Loss of market share to commercial banks andHFCs.

o Residential real estate prices in a few pockets of thecountry had risen to unrealistic levels.

o High switching cost of customers.

o Increase in funding cost.

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MarketingStrategy- STP

Segmentation :Demographics variables: Metros Other cities Rural NRIsOccupation : Salaried person Self employedPsychographic segmentation Lifestyle -People who believes in modern banking with higher set of service i.

e. internet banking (incontact, mobile refill, travel currency cardetc.)

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Target market:

o Middle income group

o Rural areas

o NRIso Corporate

oAssets and security market

o General and life insurance

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Positioning :

o Corporation that puts the customer first.

o AAA rating by CRISIL and ICRA.

o High standard serviceso Tagline with you right through make its presence

felt..

-Customer centric -Service oriented

-Product innovation

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Home loan advantages:

o Counselling and advisory services

o Instant home loan approval

o Loan approval even before the property is selectedo Flexible repayment option

o Online application facility

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Marketing Tactics- 4Ps

Product :

Home improvement loans

Home extension loans

Short term bridging loan

Loan for professionals (non residential premises)

Land purchase loan

Top- Up Loans

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Price :o Depends on rate charged by RBI and interest charge by

competitor.

o HDFC also provides its customer the choice of fixed rate

home loans, fixed first home loan and adjustable rate homeloans

Fixed rate

Adjustable rate home loanlinked with HDFCs Prime Lending Rate

Fixed first home loans

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No Charges for

o Replacement of cheques

o Income Tax Certificates

o Accelerated Repayment Option

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Place :

o 304 outlets

o Has an international office in Dubai , London and

Singapore.o Spread over 2400 towns and cities.

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Promotion :

Tagline with you right through make its presencefelt..

HDFC also advertise them self through :* T.V.

* News papers.

* Hoardings on the road side and in public places.

Property fairs

Cross-selling

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Repayment option :

o Step up Repayment facility

o Flexible loan installment plano Tranche based EMI

oAccelerated repayment scheme

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HDFC

Home Loans

HomeImprovement

Loans

HomeExtension

Loans

Short Term

Bridging Loans

Land PurchaseLoans

Loan toProfessional

NRPs

Top Up Loans

Home Loansfor NRIs

Home Loans

HomeExtension

Loans

HomeImprovement

Loans

Land PurchaseLoans

Rural HousingFinance

Loan AgainstProperty

Deposits

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Problem company facing:

o Inefficient Customer Service Staff

o Interest rate war persistent

o Less customers in rural area.o Customer inslovency

o Employees switching

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Recommendation :

o Training of Customer Service Staff.

o Need for an independent floating rate benchmark

o Trained and dedicated personnelo Loan should be given after acquiring information

about the customer

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