In our previous article, we learned in detail about the marketing strategy of a really fascinating brand, Pemex. In this article, we will elaborate on the marketing strategy of Sundaram Finance – a leading NBFC in India.
The objective of this case study is to get an in-depth analysis of the marketing strategy of Sundaram Finance. How it converted a small finance company into a leading NBFC.
Marketing is a way that companies showcase their products, values, and the company as a whole to the world. If you are interested in new-age digital marketing then you will find this free digital marketing masterclass by Karan Shah, CEO, and founder of IIDE.
So without any further adieu let’s dive right into the blog, Let’s start with knowing about the company and quick stats about it.
About Sundaram Finance – Company Overview
With the vision of hire-purchase finance in India, Sri T. S. Santhanam established Sundaram Finance in 1954, in Madras. It has emerged as one of the most trusted financial service groups in India. Currently, they have 680 branches nationwide, with 2 lacs depositors and 3 lakh car and commercial vehicle finance customers.
Over the years Sundaram Finance has diversified its reach in Mutual Funds, Housing Finance, General Insurance, IT, Business Process Outsourcing, and Retail Distribution of financial services and products. The company also has 6 subsidiaries namely:
- Sundaram Finance Holdings
- Sundaram Home Finance
- Sundaram Asset Management Company
- Sundaram Fund Services
- Sundaram Trustee Company
- LGF Services
The company works in such a way that it can protect and enhance its shareholders’ value with growth quality and profitability.
The company initially was listed on the Madras Stock Exchange and then subsequently on the National Stock Exchange in 1998. The current market price is 2235 rupees.
The company also has a “AAA” rating from CRISIL and ICRA in terms of fixed deposits.
What’s new with Sundaram Finance?
Here’s everything that’s been happening recently with Sundaram Finance:
- Sundaram Finance is taking steps to liquidate investments in the Alternate Investment Funds (AIF) schemes launched by Sundaram Alternate Assets Ltd. (SAAL) and Lok Capital Growth Fund.
- Sundaram Finance Holdings Ltd sold a 1.5% stake held in TVS group’s Sundaram Clayton Ltd (SCL) for a gain of Rs 125 crore in the December-ended quarter, of 2021.
- Sundaram Finance logged its highest-ever annual disbursement besides achieving over ₹1,000 crore in net profit from ordinary business in FY23.
- The Chennai-based non-banking finance company (NBFC) recorded a 58 percent year-on-year growth in disbursements to ₹20,966 crore in the previous fiscal.
- The total assets under management recorded a year-on-year growth of 17 percent to ₹34,552 crore as of March 2023.
- The lender’s net profit grew by 20 percent to ₹1,088 crore during the previous financial year.
Buyer Persona of Sundaram Finance
- Seeks quick, convenient financial solutions
- Values the ability to consult with top-notch financial advisors
- Prefers tech-driven solutions
- Appreciates the ability to rapidly contact financial advisors online
Interest & Hobbies
- Tech-savvy individuals
- Financial enthusiasts
- Urban residence dwellers
- Lifestyle and wellness enthusiasts
- Difficulty in accessing quality financial services.
- Challenges in scheduling appointments with financial advisors
- Concerns about the quality and consistency of financial services
- Prefers a quieter ambiance for consultations
Social Media Presence
Marketing Strategy of Sundaram Finance
You all would be wondering what marketing finance companies need. But that’s not the case, Let’s have a look at the marketing strategy of Sundaram Finance
1. Segmentation, targeting, and positioning
The company does not have any specific segmentation, targeting, or positioning.
The company can use segmentation to divide their customers demographically, which will help them pitch products related to specific age group needs to specific people
After getting the market segmented they can find the markets where the need is for what product. This will increase the customer base. And also give them the boundary of their markets.
Doing segmentation and targeting will help the company get an idea about the needs of its target market. Through this, they can create new products according to their needs.
2. Marketing Campaign
The company does have a few marketing campaigns but the most effective ones were as follows:
Under this campaign, the company plans on promoting financial literacy in the country. They pick up questions like credit information reports, MSME myth busters, etc which are very relevant to the general public understanding of the workings of NBFCs.
Oosingo is a music video by Anirudh Ravi Chander (Music director and singer) and Arivu (lyricist and singer). The video is issued in the public interest by Sundaram Finance. The video is all about raising awareness about vaccination. It was a necessary and thoughtful marketing campaign. Also, their video reached 1 million + views in 24 hours.
Sundaram Finance x MSME development Institute
Sundaram Finance with MSME Development Institute held a webinar, MSME – Need to Know information series, on October 22, 2021, the spread awareness about the schemes introduced in the sector. This was an informative session for the MSME owners.
3. Social media strategy
The marketing strategy of Sundaram Finance includes a strong presence on all major social media platforms such as Instagram, Facebook, and LinkedIn. They operate under the name “Sundaram Finance”. The company’s follower count on these platforms is as follows:
Facebook – (locked profile)
Instagram – 2243 followers
Linkedin – 16k Followers
Twitter – 731 Followers
The company has the most followers on LinkedIn. The content they post is mostly informational and wishes about the festivals which makes their customers feel like a family.
4. SEO Strategy
The marketing strategy of Sundaram Finance incorporates a robust SEO approach, a crucial tool for enhancing online visibility. With a well-crafted SEO strategy that includes 13859 organic keywords, Sundaram Finance has successfully managed to draw over 61,435 organic monthly traffic.
This demonstrates the effectiveness of the marketing strategy of Sundaram Finance in attracting and engaging online users.
5. Influencer marketing
Sundaram Finance does not indulge in influencer marketing for their promotion.
6. E-commerce strategy
A key component of the marketing strategy of Sundaram Finance is its meticulously designed and comprehensive website, created with the convenience of its customers in mind. The website provides detailed information about every service they offer.
To further enhance customer experience, the marketing strategy of Sundaram Finance includes a ‘book a call’ feature associated with each service. This eliminates the need for customers to search for a contact number or visit a physical location to understand the process, thereby simplifying the customer journey.
7. Mobile apps
The marketing strategy of Sundaram Finance incorporates a user-friendly mobile application that is compatible with both Android and Apple devices. This app is designed to assist users with all potential interactions they might have with the NBFC.
A notable feature of the app, in line with the marketing strategy of Sundaram Finance, is a branch locator that guides users to their nearest branch. The app is structured with clearly defined sections for effortless navigation.
However, customer feedback indicates room for improvement. The app requires updates to keep pace with evolving phone technologies and to address specific issues, such as the inability to navigate back while downloading statements.
These insights are valuable for refining the marketing strategy of Sundaram Finance and enhancing the user experience.
8. Content marketing
While the marketing strategy of Sundaram Finance does not heavily emphasize product promotion, they have made efforts in this area. A key aspect of the marketing strategy of Sundaram Finance is the use of language to foster a stronger connection with customers.
They communicate in both English and Tamil to cater to a diverse customer base. The company also acknowledges various festivities with dedicated posts, reflecting their respect for cultural diversity.
Additionally, the marketing strategy of Sundaram Finance includes a press release section on their website, providing updates about the webinars they conduct. This strategy underscores Sundaram Finance’s commitment to engaging with its customers and keeping them informed.
Top Competitors of Sundaram Finance
Just like the fast food industry, the finance sector is also highly competitive. Here are a few top competitors of Sundaram Finance in India as well as internationally:
1. Top Competitors in India
- Aditya Birla Capital Ltd
- Baid Finserv Ltd
- Bajaj Finserv Ltd
- Capri Global Capital Ltd
- Centrum Capital Ltd
- Cholamandalam Investment & Finance Company Ltd
- Edelweiss Financial Services Ltd
- Fedbank Financial Services Ltd
- Five-Star Business Finance Ltd
- Geojit Financial Services Ltd
2. Top Competitors Internationally
- Fidelity Investments
- Bajaj Finserv
- Aditya Birla Capital
- Bank of America
These companies, like Sundaram Finance, are making significant strides in the finance sector.
Failed Campaigns of Sundaram Finance
While Sundaram Finance has had many successful campaigns, there have been a few instances where their initiatives didn’t resonate as expected with the audience:
- Failed Merger with IDFC and Shriram Group In the late 2010s, Sundaram Finance was involved in talks to create a financial conglomerate with IDFC and the Shriram Group. The boards of IDFC and the Shriram Group called off the proposed deal after more than three months of discussions. The main factor leading to the inconclusive series of discussions was cited as concerns over valuations. However, some analysts believe that the talks fell through possibly because it involved the presence of too many bigwigs.
- Closed-End Funds Sundaram AMC’s CEO, Harsha Viji, stated in an interview that closed-end funds can deliver where open-ended funds have failed. However, this statement was met with skepticism from some quarters, leading to a mixed response from the audience.
These instances serve as reminders that even the most promising companies can face challenges. However, they also provide valuable lessons for Sundaram Finance to learn from and improve upon in their future endeavors.
The marketing strategy of Sundaram Finance is currently in a transitional phase, which has resulted in some inefficiencies in their marketing efforts. The company primarily relies on traditional marketing methods that were effective in the past.
However, in the realm of digital marketing, only their SEO optimization appears to be well-executed, while other digital marketing tools seem to be underutilized.
One of the significant challenges faced by Sundaram Finance, as part of their marketing strategy, is the insufficient integration of digital marketing into their overall process. In the current market, where tech-savvy NBFCs are prevalent, the absence of a comprehensive digital marketing strategy could be detrimental to the company’s growth.
Given the rising prominence of digital marketing, incorporating it into the marketing strategy of Sundaram Finance will be a crucial step towards business expansion.
If you want to get more such in-depth marketing analysis of companies, and more about the marketing world do check out the IIDE knowledge portal.Thank you for taking out time to read the case study and also drop down all your thoughts about it in the comments section below.