Benchmarking L&TMF visibility vis-à-vis other MF industry playersBy- Prem Agarwal (Summer Trainee)

L&T Investment Management Ltd.

Presentation Content

Project Guidelines

AMCs selected for benchmarking

Visibility – Report Card

Onsite Visibility

Online visibility

Distributor magazine

Investor Connect

Give away

Office adoption concept

Relationship managers

Highlights

SWOT analysis

Developing and positioning our brand image

Acknowledgement and bibliography

Project was initiated on 28th May 2012 and was completed on 27rd June 2012

The survey was carried out in Mumbai from 2nd June 2012 – 23rd June 2012

The candidates were randomly selected from extensive list of empanelled distributors with L&TMF

Individual Financial Advisors, National Distributors & Banks were the survey candidates

Candidates details-

The surveys were carried out basis a one pager questionnaire consisting of four parameters

The parameters of the survey were, “Onsite visibility, Online visibility, Distributors Magazine and Investor Connect”

Project guidelines

Candidates Count (34) % of total

IFA 13 38

ND Branches 17 50

Bank 4 12

Total 34 100

Separate weights were assigned to each parameter –

Parameter Weights (%)

Onsite 40

Online 15

Distributor Magazine 30

Investor connect 15

Overall 100

Two parameters were to be scored on a scale of 1 to 10, (1 – poorest ;10 – best)

The other two parameters were to be scored basis their presence of AMCs in distributor magazine(17 nos.) and website(20 nos.)

Weighted Average Method has been followed for computation of data

More than 80% of the candidates surveyed have an industry experience of 5+ years as an attempt to capture valuable data

Project guidelines – cont...

The respective weights have been allotted keeping

expense and relative returns in mind

AMCs selected for benchmarking

Sr. No AMCs chosen for benchmarking

1 Birla Sun Life AMC Ltd.

2 DSP Blackrock Investment Managers Pvt. Ltd.

3 HDFC AMC Ltd.

4 HSBC Asset Management (India) Pvt. Ltd.

5 ICICI Prudential AMC Ltd.

6 IDBI AMC Ltd.

7 IDFC AMC Ltd.

8 Kotak Mahindra AMC Ltd.

9 LIC NOMURA Mutual Fund AMC Ltd.

10 Reliance Capital AMC Ltd.

11 Religare AMC Ltd.

12 SBI Funds Management Private Limited

13 Sundaram AMC Ltd.

14 Taurus AMC Ltd.

15 UTI AMC Ltd.

VISIBILITY - Report card

Visibility - Report Card (40% + 15% + 30% + 15%)

Score on 100

Reliance

KotakHDFC

L&T

ICICIBirla

DSP Blackro

ck SBIUTI

IDFC

SundaramHSBC

IDBI

Tauras

Religare LIC

0

10

20

30

40

50

60

49 47 4741 38

33 3126 25 23 21 21

15 14 11 11

Total of all 4 Parameters

Survey Output of L&TMF empanelled distributors only

VISIBILITY PARAMETERS - individual performance

Onsite visibility IFA office, Fort

HDFC

Reliance

ICICIBirla

DSP Blackro

ckID

FC SBIKotak

L&T

Sundaram UTIID

BIHSBC

Religare

Tauras LIC0

10

20

30

40

50

60

70

80

68 67 6761 58

49 49 47 4743 43

3429

25 2419

Based to 100

Onsite visibility cont…

Leaflet and Product notes

are used while selling

funds and the

only source of handout

for investors

On Field observations – “three way visibility”

Brand Only

Notepad

Chit padMouse

pad Marker Pen

Paper Holders

Product

Fund Track Record

PosterApplication Form

General

SIP Calculator

Planners

Onsite visibility – cont…

Commonly visible - Chit pad

Occasionally visible – Paper holder, Banner and Poster

Completely Missing - Innovative tool like SIP calculator etc

A durable and useful desktop item for distributors desk – should be worked upon

“Track record” of a past performing fund –on small banners ,the best attention seeker

Designing a planner (e.g. SIP calculator) - attractive and simple and easy

Performance Award certificates - as an acknowledgement of efforts and initiatives

Visibility of L&TMF

Action points

Online visibility

HDFC

Reliance

ICICIL&

TUTI

DSP Blackro

ckKotak SBI

Birla LIC

TaurasHSBC

IDBI

IDFC

Religare

Sundaram0

10

20

30

40

5045

2015 15 15

10 10 105 5 5

0 0 0 0 0

Based to 100

Survey Output from distributors websites (20 nos.)

Online visibility – cont…

Visibility

a • Brand logo - flash

b• Activated links on

distributors website

c• Upgrading

Technology – e.g. mobile application

d• Co-promotion –

“Fund and social awareness”

Observations

NDs and some IFAs prefer using self made “Tools and Planners” (e.g. Blue Chip and NJ India Inv.)

Website usage – priority wise• Evaluation of fund performance• Downloading forms• Seeking information on products & registrars

for servicing

Fund selling works mostly on the word of mouth - audio video presentation is not a preferred option

A live chat messenger (responding to investor) service preferred

Less number of flash of L&TMF logo on the websites of empanelled distributors (from websites chosen in survey)

Mobile subscription online - NAV update facility

Live chat facility provided by UTI MF

(Online mobile application provided by HDFCMF on their website)

HDFC Reliance ICICI, L&T, UTI0

5

10

15

20

25

30

35

40

45

50

45

2015

Online visibility – cont…

1st

2nd3rd

Observations from the top three rankers on this parameter -

Score difference of 30, between HDFC & L&TMF

This potential gap to compete with the best

Adopt immediate measures to fill the potential gap, by extensive advertising

Develop advertisements which are motivating with deep and impactful message

Utility featured software every time a distributor sells our fund

Constant follow-up on updating links on IFA websites

Installation of live chat messenger facility

Establishing tie-ups for constant logo flash on websites (distributor and social)

Action Points

Distributor magazines

KotakL&

THSBC

Reliance

HDFCBirla ICICI

UTI

DSP Blackro

ck LIC

SundaramTauras

IDBI

IDFC

Religare SBI

0102030405060708090

76

53

29 29

1812 12 12

6 6 6 60 0 0 0

Based to 100

Survey Output from distributors magazines (17 nos.)

Distributor magazines – cont…

Kotak L&T Reliance, HSBC0

10

20

30

40

50

60

70

80

76

53

29

1st

1st

2nd Score difference of 23, between Kotak and L&T

This potential gap to compete with the best

Observations

There are many IFAs who are short of funds and thus do not publish magazine or bulletin.

Advertisement in circulars or magazines have heavy involvement of management decisions.

Banks have stopped publishing magazines or bulletin

There is a high amount of legal and compliance mandate being followed before promoting brands of other products in case of banks

Distributor magazines – cont…

Action Points

An expert comment or article from the fund manager or the CEO of L&TMF in every issue of distributor magazine would prove “an extra mile effort”

Co branding for IFAs in magazines would help in increased visibility and promotion. For e.g. AMFI magazines

Innovations like advertisements on cover page, false cover, belly bands are untapped options and can pull huge investor attention

Advertisements in most trusted and circulated magazines of the finance industry

Establishing tie ups with IFAs (not publishing bulletin or magazine) for partial sponsorship, in magazine publication

Co-branding with banks can be established, to circulate magazines or journals

Investor Connect

This parameter evaluates the reach that an AMC establishes with investors, during NFO, product launch

Reliance

HDFCICICI

DSP Blackro

ckBirla SBI

IDFC

L&T

Kotak

SundaramTauras

UTIID

BI

Religare

HSBC LIC0

1020304050607080

71

50

3933 30 30

25 24 2315

11 10 10 8 5 3

Based to 100

Investor Connect – cont…

Case Study: A

Reliance Capital strategized sending scheme application forms to its existing investors before product launch, the individual’s KYC details were pre-printed on it. During discussion in survey interviews, the distributors agreed to the fact that this was an excellent way establish a sense of connection and belongingness in the Investor – AMC relation. An untried method has to be structured

and implemented to make every investor feel that L&T MF values their choice for investing

A strong investor feed back team to serve investor queries, with easy accessibility

Establishing educational programs for creating awareness of the benefits of investment in mutual fund

Observations from case study:

Innovation with low cost Gives every investor a feeling of being

recognized Easy way to pull in investors for the new

fund

Action Points

Give away

Response of distributors – categorizing them in Class 1 & 2

Utilizing the funds for investor education

Increased % of brokerage

Better returns on investments

Class 1-These distributors were reluctant to talk about give away and cornered the concept on following grounds that these can be rather used for -

Class 2-These distributors appreciated the concept of give away and asserted to the fact that it helps to sell funds

Increasing the quantum of gifts

Gifts with better conceptualization of investor education

The office adoption

Action Points

Designing Innovative give away

More inclination to give away of educational output

Increasing the quantity of give away basis distributor demand

The office adoption concept

Under the office adoption concept, the office of the distributor can be used by an AMC as a source

Of creating visibility in the market to promote funds. This workshop can extend over a decided time

duration e.g. 2 or 3 months.

An new concept

Can fetch Maximum visibility at low cost

An exercisable option when L&T MF is going through the phase of change

Give away – cont…

The office adoption concept , continued

• Innovation • Strong brand visibility• Low promotion cost involved, with comparison to the visibility results• Establishing investor connection

• Testing new techniques for possible opportunities of business expansion• Attract investors in the critical market conditions• Publicity for his office location at “zero cost”• Opportunity to be a part of an innovation

“How” to go for it?

1.Using L&TMF elements in the distributors office, to promote funds over

a decided time period

2. Initiate discussion with the visitors and provide sufficient information regarding

L&TMF as a brand and its presence in MF industry

3. Viably, every investor showing substantial interest in enquiring about

L&TMF fund may be handed a small L&T kit with product leaflets and a utility gift

“Why” should we go for it?

Why would a distributor do it?

Action Points

Relationship managers

“Frequently change” of RMs makes the relationship building process difficult

RMs should focus mainly on the distributors with low AUM and new entrants who are low on knowledge

about market forces

Sometimes RMs lack complete product knowledge and conceptual clarity

Most of the distributors reported RMs to be regular on visits (15 or 30 days)

Response of distributors

Frequent training on MF product and updates for RMs

Maintaining the continuity of RMs visits without change

Constant and periodical follow-up with distributors

Involvement of RMs in seminars and workshops in discussion with the

distributors

VisibilityParameter

Score & Name of 1st

ranker

Rank & Score of L&T

Inferences

Onsite 68 – HDFC 6th - 47 L&TMF has to design various visibility elements and take extensive efforts to make sure that they appear in distributor office.

In case the elements are removed, then reasonable reaction from the distributors should be obtained and acted upon.

Online 45 – HDFC 3rd – 15 Online marketing in consumer goods has successfully penetrated despite many short comings. Mutual Funds can comparatively be sold much more easily.

Equal up-gradation and emphasis on creating “Brand Value - Online” would lead to fruitful results in the long run

Magazine 76 – Kotak 2nd - 53 Visibility rank-wise is not too far to compete this parameter’s best performer and can easily improve by increasing quantum of advertisements in distributor and financial magazines.

A blend of innovation is a must

Investor connect

71 - Reliance 7th - 24 Urgent need of the hour and an overall priority in terms of gaining investor confidenceCan be worked out by reaching the public through every possible way like emails, mailers, newsletters, give away and finally living as a distinct brand in the heart of all.

Highlights

Threats- Industry competitors

- Tight budget for advertisements

- Lack of investor connection

Strengths- L&T as a brand

- Takeover a world class brand “Fidelity MF”

- Recent recognition of L&TMF by distributor

fraternity

Weakness- Low awareness of L&T

MF as a brand- Low visibility in MF

industry- Lack of investor

connection- Scheme Performance

Opportunities- Achieving the potential

gap in online visibility and distributor

magazine - Capitalizing on the

expectations of existing and potential investors- Change in Government

regulations

SWOT analysis

Developing and positioning our brand image

Distinguishing factors Grounds

Expert Mother Brand L&T (mother brand) to L&TMF – it has more than 70 years of rich goodwill.L&TMF should be promising enough to live a similar legacy.

Built on strong foundations Investor should look up to L&TMF differently from other AMCs and believe ,“my money is in safe hands”.

People and team L&TMF is a trustworthy and hardworking group of individuals working for several lives

Stability L&TMF should not be seen as a fly by . It has to instill the sense of, a horse ready for the long run.

Market Fluctuation Market situation, cycles a round in every 3-4 years time. L&TMF should be considered as an AMC which would not change despite odd market conditions.

For investorsL&TMF has to see beyond “investment and money” and aim at impacting lives through performance of funds in the long run.

Branding Avoiding a “Push” strategy and work for “Pull” strategy

Product PositioningEvery other AMC is selling equity, debt and hybrid type of funds. L&TMF should aim at positioning distinctly from others.

Innovation If necessity is the mother of invention, current market conditions is the mother of innovation.

Sanjay BhattacharjiHead Marketing & Products(Project Guide)

Acknowledgements

This project was initiated and completed under complete guidance of –

Sweta SamaniDeputy Manager -Marketing

1. Survey data - Questionnaire2. Distributor - Meetings3. Newspaper - The Economic Times 4. Website - www.amfiindia.com

www.mutualfundsindia.comwww.surveymonkey.com

Bibliography