"We plan to position Muthoot as a multi-diversified business conglomerate"
Avinav Chaubey, AGM - Marketing, Muthoot Group speaks about the group's transition into a national player and moving beyond being known as just a gold loan company
Established in 1887, Muthoot Group is a Kerala-based 127-year-old business. Traditionally known for its loans against gold business, Muthoot is gradually changing its positioning to being a multi-diversified business conglomerate with a pan-India presence. The company today is present across 1,072 cities, 364 districts and 1,240 talukas with a total branch strength of 4,400-plus.
In conversation with exchange4media, Avinav Chaubey, AGM - Marketing, Muthoot Group speaks about the group’s marketing strategies, positioning, expansion plans and more. Chaubey had joined Muthoot Group in 2005 and has played a key role in Muthoot’s transition into a national player.
We have seen a change in Muthoot Finance’s marketing strategy since 2006. Please give us an outlook of the changes that have drove Muthoot to become a national player.
The business of loans against gold jewellery has been one of the traditional businesses and carried a dark shade due to the presence of pawnbrokers and moneylenders, who have been exploiting the customers for years together.
Muthoot Finance, the flagship company of the 127-year-old Muthoot Group, has been empowering people for over 75 years with an asset (gold jewellery), which sometime back was considered to be an idle asset. Although, Muthoot Finance had a dominant presence in South India, it was only in 1979 when the company ventured into the Northern region by opening its first branch in Faridabad and thereby, entering into the national market. But the real game changer was in the year 2006, when the company was trying to build in-roads and spread its footprints beyond South India. To begin with, we introduced a ‘Gold Loan Education Series’, wherein the customers were explained on the benefits of the collateral and how it could empower and sustain an individual and his family. But, it was only through our first national campaign – ‘Loan in just 5 minutes’ – that we caught major attention nationally. Both these campaigns were a huge success and paved way for removing the social taboo that is associated with this kind of business. The campaigns had created so much buzz in the market that people started recognising the brand immediately.
The turning point for the brand stature came in 2010 when it associated with the Delhi Daredevils. The four-year association leveraged Muthoot Group’s brand leadership in the BFSI sector multi-fold and gave a nouveau platform in terms of national and international brand recognition. Other big ticket events like associating with the Cochin International Half Marathon also helped us to get recognised in the market place.
Since then, we have started pushing ourselves aggressively with new marketing campaigns and association with big ticket events to get a name nationally and internationally.
How different is your branding for the national market from a regional market?
Since the demographics, target audience, messaging, accessibility, culture, cost of medium, etc., of national and regional markets or urban and rural markets differ from each other, our marketing strategy and advertising campaigns too are planned accordingly. For instance, for a regional market, we focus more on BTL-driven activities as this enables us to personally connect with our customers. On the other hand, we use both the ATL and BTL communication channels to engage with customers in the national market.
What about your media mix?
Our communication tools primarily include print media. Although, one of the oldest forms of communication, print media has the advantage of making a longer impact on the minds of the reader, with more in-depth reporting and analysis. TV is another primary medium as it has a vast mass appeal and hence, is the most preferred medium for any marketer while launching a national and regional brand/ product campaign. We have also been consistently using OOH strongly across the markets for brand visibility, brand salience, product promotions and driving footfalls in the branches.
Radio is another viable mass reach vehicle that we look at as it continues to yield new customers and gives an incredible ROI to us. Radio, for us, has not only been a cost-effective medium, but it has served as one of the key mediums to meet brand challenges.
We are also open to absorbing the latest technologies, which can provide instant connect with the wider audience. We launched a strategic approach to our corporate social responsibility (CSR) by introducing ‘Muthoot Haathi Mera Saathi’ programme through social media platforms during the season VI Delhi Daredevils matches.
We are planning multiple communications for this year, which will have a different positioning strategy.
Please share your expansion plans for the Muthoot Group.
All these years we were working towards establishing Muthoot Finance as the leader in the category of the gold loan industry and we have been successful in establishing ourselves. As we stand tall in this run with a decent book size, the need is to market other financial services too.
Muthoot Finance has generally been known as a single-product company (loans against gold jewellery), but few know that there is now an increased awareness amongst the masses that Muthoot Finance is a “financial supermarket”. We provide a bouquet of financial services, including insurance, foreign exchange, money transfer, demat, debentures (NCD), PAN card, travel services, Muthoot ATMs, etc. – all under one roof.
Moving forward, we plan to showcase and position Muthoot Group as a multi-diversified business conglomerate rather than just a gold loan company. We are also expanding in the education field by opening colleges and schools.
There are plans afoot to establish the Money Transfer business globally. Our Vehicle & Asset Finance division recently tied up with Maruti Suzuki for vehicle loan finance at Kerala, while our Healthcare division has tied up with Bourn Hall Clinic International, a centre for treating infertility.
What is the presence that the group has in India?
We are present in 1,072 cities, 364 districts and 1,240 talukas. In Kerala, for instance, we have more than 800 branches, while at Delhi we have over 258 branches. Our total branch strength is 4,400-plus, out of which two-third is in South India and one-third is in the rest of India.
What are some of the challenges faced by Muthoot Group in the market?
The primary challenge while establishing ourselves in the national market was to get the brand name pronounced correctly by the people. The next challenge involved showcasing the brand’s effort towards empowering the unbanked and underserved as well as bridging the gap between the banks and the unbanked. The next challenge is to get our other services also recognised and let people know and use our other 17 services. We want to tell the customers that we are not just a gold loan company, but have more to offer.
What is the marketing and advertising spends earmarked for this year vis-a-vis last year?
There is a 12 per cent growth as compared to last year.
Which is the medium that you are looking at? What is the percentage split for advertising for each medium?
The local markets are very important, while ensuring top-of-mind recall is very important at the national level. Hence, the concentration will be on various BTL promotional activities, which will amount up to 26 per cent. Mass media, including print and television, spending will be around 56 per cent and the rest would be for branding activities, sponsoring big ticket events and digital.
How important is the digital medium for Muthoot Group?
We are looking at digital in a big way and our target is to utilise the medium as a separate platform for revenue generation, apart from the revenue generated through our branches. Digital has a huge potential and we want to encash all opportunities in the best way and at the right time.
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