Unfixed Deposits, introduced by Citibank in the latter half of the last decade became an instant hit with the bank's customers. Unfixed Deposit is basically a fixed deposit with the provison that the customer has the liberty of withdrawing the amount deposited in part or in full, in times of exigency. In a banker's parlance, the formal product was made up of two componentsfixed deposit and overdraft. This feature is perhaps as old as commercial banking itself. But the fact remains that this unfixed deposit has caught the imagination of the customer only now.
Let us imagine a customer who has come to deposit Rs. 50,000 in the bank. But the customer tells the manager that he might need the amount either in parts or as a lump sum at once or in more times, as the situation demands. But when and how much he would be withdrawing he has no prior idea. Would the manager help him without disturbing his high income fixed deposit? The smart manager replies in the affirmative. But then, he goes into an elaborate discourse on how it could be done. He starts explaining that he can open a current account separately, pledge the customer's fixed deposit as security in it, then his overdraft limit (up to 75% of his deposit) would be given to him at the interest rate of 2% per annum above the contracted fixed deposit rate, which would be compounded quarterly on reducing balance.
Now, let us imagine another situation. the customer comes and asks the same question to the manager, the manager replies crisply, precisely, adequately and shortly that it is absolutely possible and that they have just the product custom made for his needs. This product called Unfixed Deposit would solve all his problems.
Hamel and Prahlad, in their best selling book "Competing for the Future", explained how many organizations failed to come up with path-breaking products inspite of having the best of resources, simply because they could not escape the myopia of presently served markets. It is common to find that most marketing managers, because of continuing market share and the initial market share that they have enjoyed in a monopolistic market, ignore basics like possibilities of the decline in product life cycle and new emerging psychographic segmentation that is radically changing the need preferences of the consumers. Perhaps, in the first example, that is what the manager had not given proper attention to. |
