MKTG2003 - Marketing for Financial Services - Blog Post 12

For my final blog post I will be discussing, what in my opinion, is one of the most important, useful and interesting of all the marketing models I have learned during the course. I am referring to the Ansoff’s matrix.  The Ansoff Matrix provides a way of analysing how to grow via existing products and new products, and in existing markets and new markets.

The matrix consists of four growth strategies listed below which I will use to apply to the Australian Securities Exchange namely:

1)      Market Penetration: This is a growth strategy of increasing sales and revenue by selling existing products to existing customers. Therefore the ASX can achieve this by either reducing the transaction costs incurred while purchasing shares. This should give existing customers more incentive to purchase additional shares due to the fall in transaction costs. They could also increase the cost to earn more revenue from individual transactions.

2)      Market Development: This is a growth strategy to increase sales by selling existing products to new markets. The ASX can implement this strategy by selling their Australian shares, bonds and other financial instruments to customers in foreign countries.

3)      Product Development: This is a growth strategy to increase sales by selling new products in existing markets. The ASX can implement this strategy by selling new products like exotic financial instruments and weather derivatives to Australian customers who already own other already existing financial instruments.

4)      Diversification: The final growth strategy is a method of increasing sales by selling new products in new markets. ASX could implement this through a combination of the above listed methods. For example they could sell new products like the exotic financial instruments and weather derivatives to customers outside Australia.

Thus the ASX can use one of or a combination of the above growth strategies to increase their sales/market share.

MKTG2003 - Marketing for Financial Services - Blog Post 11

Another model I found interesting in this course is the Expectation versus Performance Model. This model matches the expectations of a financial service by customers and then compares it with the actual perceived performance of the service. If the performance of the service exceeds the expectations of the customers they will be 'delighted' which will eventually lead to brand preference and loyalty if the ‘delight’ can be maintained. If expectation equals performance customers will be 'merely satisfied'' and if expectation exceeds performance customers will be dissatisfied. I am now going to apply the model to Colonial First State Australian Share Fund.

From the research done during the presentation I found the expected rate of return on the Australian Share Fund. Due to the global financial crisis CFS should try to match their performance with the expected return even if it achieves only “mere satisfaction”, as if another global crises hits and unexpected market fluctuations arise, then investors could be dissatisfied with a less than expected rate of return. CFS could also lower the expected rate of return on the Australian Share Fund, so that customers do not remain disappointed. However, they should not lower the expected rate to much, as CFS will not want clients to switch to banks that offer a higher rate of return. An example of how to ‘manage expectations’ would be to suggest a rate of 3.85% for a 7 year investment and a 4.49% rate for a 10 year one. (A whole percentage below what they are confident to achieve). This will ‘delight customers’ when the higher rate is achieved and also is not low enough to make customers want to switch.

Finally it must be mentioned that the rate of return is not the only factor customers 'expect' from the financial service and use for judging the performance. In addition to the rate of return other customer contact points like post purchase service, the actual financial centre and friendliness of the staff is taken into account. Therefore CFS must make sure that they deliver as much if not more than they can promise to provide.

MKTG2003 - Marketing for Financial Services - Blog Post 10

This Blog post deals with the experience I had in completing my Assignment, both the presentation and the report. Firstly, it must be mentioned we initially had some difficulty in finding relevant material for Morgan Stanley, the company we had initially chosen. Then one of my team mates Nicholas Babic suggested we do Colonial First State instead as his father knew about the company to a certain extend. This gave us an advantage of getting more information. The change of organization was met with little resistance from the group and all of us committed ourselves to finding information about certain aspects of Colonial First State like the strengths, weaknesses, opportunities, threats and the 5Cs. In the end even with some minor problems we managed to come up with a final draft for both the presentation and report with which I was satisfied. Ashwin and I decided to present on behalf of our group and we practiced quite a bit before the due date. This helped us be confident during our presentation and I felt we gave it our best effort. After the presentation we immediately met up and divided the work for report. All of us spend equal time and effort fleshing out the details of the report and we finally came up with solid report. In the end I must say I had a great experience working on this assignment. I enjoyed working in a team which is how projects are worked on in the real world. I also loved applying the theories and models like the P-E model, the buyer behaviour analysis and other marketing concepts I learned during this course on a real world company like Colonial First State.

MKTG2003 - Marketing for Financial Services - Blog Post 9

The concept/model I found most interesting in Unit 8 (Integrated Marketing Communication in Financial Services) is the Marketing Communications Model. The model consists of 6 stages namely 'Identify target audience',' Determine the response sought', 'Choose the message', 'Choose the media', 'Select the Message Source' and 'Collect Feedback' and 'Evaluate promotional campaign'. To see how this particular model works I have decided to apply it to the financial product 'Platinum Citi Bank Emirates loyalty reward program'. The following are how the above mentioned stages apply to it:

1) Identify target audience - As this seems to be a programme for frequent fliers and are for relatively high income earners, (due to the name being 'Platinum') their primary target audience would be business people who travel abroad from Australia relatively frequently.
2) Determine the response sought - The response for this product would most likely be awareness first and then liking/preference.
3) Choose the message - Since the target audience is mainly business people they are more inclined to respond to a rational approach. Hence in my opinion a more visual, graphical illustration of the rewards programme as compared to similar programmes offered by competitors would be a very appealing message to these sort of customers.
4) Choose the media - Also as their prime target customers are frequent fliers it makes sense for the marketing promotion of this product to be on brochures which are available to read on the plane during long flights. In addition to this catchy advertisments can be released on financial television channels and on websites to increase the awareness/liking of the product.
5) Select the message source - Successful business celebrities like Richard Branson or Warren Buffet can be used in the advertisments as these are people their customers generally look up to and want to emulate.
6) Collect Feedback - Feedback about the promotional campaigns can be collected through surveys which could be posted on the financial websites and on the plane. Information collected through these surveys can be used to evaluate the current promotional procedures and help improve them for future campaigns.

MKTG2003 - Marketing for Financial Services - Blog Post 8

The concept/model that interested me the most in Unit 7 (Pricing in Financial Services) was the Price-Quality Matrix. The model consists of 9 strategies with Quality on one side ranging from High Quality to Low and Price on the other side ranging from High Price to Low price. The viable strategies for financial companies in the long run are as follows: Premium strategy (High Price and High quality) - these are firms that sell high quality services and for that reason charge high prices. For example Macqurie Bank gives high quality financial services like loans, investment strategy options etc but also charge give this service only to top credit rating firms thus preventing individual customers from using this service. This maintains a sense of exclusivity. Next comes the 'High and Superb Value' strategies (High quality for medium/low price) - these are firms that also sell high quality services however they are less exclusive and allow for more reasonably exchanges at a decent interest rate. For example Commonwealth, ANZ, Westpac and NAB offer high quality services for interest rates and loan amounts which an individual customer can have access to.  The other viable strategies include Medium Value (Medium quality and medium price), Good Value (Medium quality and low price) and Economy (Low Quality, low price) strategies. There are 3 other strategies that exist namely Overcharging strategy (High Price and Medium Quality), Rip-off (High Price and Low Quality) and False economy (Medium Price and low quality) strategies however these will not last in the long run as customers will become aware of the mispricing of the services.

MKTG 2003 - Marketing For Financial Services - Blog Post 7

This blog post is about our progress on the Marketing Group Assignment. Our group has chosen to do a marketing analysis of the company and environment of Morgan Stanley with particular consideration given to the Wealth/Investment Management Department. We have decided to use the 5Cs to do the above as well as use a Strengths Weaknesses Opportunities Threats analysis to get a better idea about the organization. So far the assignment is on schedule as work has been assigned to different members of our group with each member dealing with a particular marketing aspect of Morgan Stanley. In addition to the above mentioned concepts we plan on using the Buyer Decision Process model as well as the Brand Dynamics model on the financial services offered by them. Finally we also plan on using the Segmentation, Targeting and Positioning model to see how Morgan Stanley targets and should target their clients/potential clients in future. Our team is planning to meet next friday to discuss our contributions as well as further aspects we need to consider. However so far I am pleased with the interest and dedication showed by the other members in my group and hope they will continue to show the same  level of enthusiasm throughout the assignment.

MKTG 2003 - Marketing for Financial Services - Blog Post 6

From the Unit of Branding I found the concept of building Brand Dynamics interesting and decided to use it on the Commonwealth Bank of Australia to see how it works.
The first stage is the 'Presence stage' which asks whether I, the customer of financial services namely banking know about Commonwealth. Due to consistently good service and word of mouth I am very aware that the Commonwealth Bank is one of the 4 major retail banks in Australia and provides banking services like deposits, debit cards etc.
The second stage is the 'Relevance stage' which asks whether the service offers me something in particular. As an international student who needs regular access to my money to make purchases and the ability to make them without actual cash the Commonwealth Bank satisfies my need by allowing me to open an account there and have access to the money in the account by assigning me a debit card.
The third stage is the 'Performance stage' which asks whether the service can deliver. The Commonwealth Bank has made it very convinient for me to access my funds and also gives me good interest rates on my deposit as compared to its competitors. Hence I can say that it does perform and does it on a consistent basis.
The fourth stage is the 'Advantage stage' which asks whether it offers something more than its competitors. I feel that by having a branch on campus it allows students easier access to withdrawal of cash and the ability to go to the branch directly to ask questions etc. Hence I feel that the Commonwealth Bank definitely has an advantage over its competitors.
The fifth and final stage according to the model is the 'Bonding' stage. This asks the question whether Commonwealth Bank is the best in providing this financial service namely the banking one. I feel that I am still currently in this stage and am unable to comment on whether this is indeed the best of the services as I have not experienced the other services offered by its competitors.

MKTG 2003 - Marketing for Financial Services - Blog Post 5

From the Unit, "Developing Financial Products and Designing service experiences" I found the 'Core, Actual, Augmented' Concentric circles Services model very interesting. I have decided to apply this model to the debit MasterCard that I use.
The inner most circle is the 'Core service'. This is the main purpose of the debit card itself, i.e. the main benefit of having this financial service, which is 'Cashless Finance'. This means that I do not need to carry a large amount of cash whenever I go out to make purchases. This is a major convinience for me. Other financial products like a credit card also have this same core benefit however this allows me to use my own money.
The middle concentric circle is the 'Actual services'. This is what this particular company offers that makes it different from it's competitors. This includes Brand name, which MasterCard has because of consistently good service and word of mouth. Also the debit card can be used to withdraw money from ATMs. This although not the core benefit is very useful for users of the debit card. Other features include it having a great design and the wide recognition of the card in various shops and restaurants.
The outermost circle is the 'Augmented services'. These are the additional services offered which are not particularly important but may still influence customers to choose a particular service over it's competitor. The debit MasterCard sends me monthly statements which shows the amount of usage of the card over the month. In addition it has very good after-sale service as one can call the company for help to answer doubts etc.

MKTG 2003 - Marketing for Financial Services - Blog Post 4

                                           Market Segmentation and Targetting

I found the following advertisment about the Commonwealth Bank of Australia to be interesting and relevant to the concepts of market segmentation and targetting:

http://www.youtube.com/watch?v=-fZjGOQDbsE&feature=related

The advertisment shows a pregnant women on a public transportation bus trying to find a seat. She is waiting for a man who is seated to give up his place as common courtsey but since he does not she beats him with a rubber toy to force him to give up his seat. The question is then asked "Where are all the people who used to give up their seat?" basically referring to the kind and courteous people. The answer to the question is that they all work at the Commonwealth Bank. Firstly everyone uses bank services, the rich and the middle class and thus the market for people who use financial services is enormous. Since banks cannot focus on the entire market at once they break the market into distinct segments and select one or more segments to target with a distinct marketing mix. This process is called Segmentation. In this advertisment the Commonwealth Bank is clearly targeting the average income earners as the ad takes place on a public transport bus which is typically used by average income earners rather than the high income ones. Thus average income earners especially, pregnant women, the elderly and other types of people who expect common courtsey from others can relate to the advertisment. This will cause them to believe that Commonwealth understands their needs of patience and courtsey and will expect the staff to behave like how they are depicted in the advertisment. Appealing to the need of this distinct segment of the market is called targetting. Hence in this way through the use of segmenting and targeting the Commwealth Bank is focused on what customers they want and who the ad will most appeal to.

MKTG 2003 - Marketing for Financial Services - Blog Post 3

         Buyer Decision Process - Opening a savings/transaction Account at Commonwealth

The topic I found most interesting in Unit 3 of this course was the 'Buyer Decision Process'. This process consists of 5 stages (listed below). This process is very important to understand how a marketer needs to market their product or service to the customers based on their needs. I have used the example of me opening a savings/transaction account at the Commonwealth Bank of Australia when I first came to Australia to study at the ANU. The following are the 5 stages in the buyer decision process and how it applies to the example:

1) Need Recognition: I am an international student and one of my major needs when I come to a new country is my ability to access funds when I require and to earn a good interest rate amongst others. The Commonwealth Bank of Australia understands this need and for this reason has set up a branch at the ANU itself with a very easy set up account creation systems which yields a relatively high interest rate.

2) Information Searches: The second step in the process is the abiltiy to find information on how to create an account, what interest rate is given, what the other alternatives are etc. Commonwealth addresses this step by having information brochures available in every branch and support staff in case one needs more information or just someone to talk to. In addition to this there is very detailed information about their services available on their website in case people do not want to visit the branch itself or prefer doing it online.

3) Evaluation of Alternatives: As an international student I had several alternative banks I could to start an account in namely NAB, Westpac and ANZ. However I chose the Commonwealth Bank over the others because number one there is a branch on campus and two because there are lot of ATM branches all over Canberra. This satisfies by primary need of having easy access to the funds wherever I am in Canberra. Also in case there is a need to visit the branch itself I can easily go to the bank. Hence Commonwealth Bank was the most convinient option for me. Commonwealth understood this need of international students and catered to the need.

4) Purchase Decision: All the above mentioned factors influenced me to open an account in the Commonwealth Bank. The knowledgibility of the Commonwealth staff and the pleasant atmosphere further assured me that the decision of opening an account at Commonwealth was the right one.

5) Post-Purchase Behaviour: A lot of banks take good care of potential customers and raise their expectations of the service before they open the account only to not live up to the expectations leading to dissatisfaction. However Commonwealth Bank was not one of them as even after the account was opened the staff was very friendly and answered any doubts or questions clearly. They always kept me upto date with their latest offers etc without being too aggressive or annoying. Hence it can be clearly seen that the Commonwealth Bank understood the 'Buyer Decision process' very well and followed each of the stages to the best of their ability.

MKTG 2003 - Marketing for Financial Services - Blog Post 2

                                                       SWOT Analysis

The most interesting concept I found in Unit 2 of this course is one of the most fundamental concepts in marketing/management, it is the SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths are positive internal characteristics of a company whereas Weaknesses are negative internal ones. Opportunities are positive and external whereas Threats are negative and external. Each entity be it an individual or a firm has all 4 of these characteristics. The goal of every entity is to maximise and use their strengths to the best of their ability and reduce the impact of their weaknesses while exploiting opportunities and avoiding/tackling threats. The beauty of the concept lies in its simplicity and its easy applicability to everyday life. For example my strength lies in test taking whereas my weakness lies more in writing assignments. Using SWOT I try to ace all my tests (my strength) and practice improving my assignment writing skills (my weakness). The assessment of the course is decided by the lecturer and hence is out of my control. Therefore the structure of the assessment is external. An example of an opportunity to me would be if the assessment became more 'test based' and thus more suited to my strengths and an example of a threat would be if it became more 'assignment based'. Almost all businesses around the world use the SWOT analysis to analyse their business and improve their ability to compete in the marketplace and thus this is a very important concept in marketing.

MKTG 2003 - Marketing for Financial Services - Blog Post 1

                                                 Impact vs Urgency

There were several interesting topics/concepts discussed and demonstrated through examples in the first lecture/chapter of this marketing course, however, the concept that interested me the most was the 'Impact vs Urgency' matrix discussed by the lecturer. The concept consists of a simple 3 row, 3 column matrix with 'Impact of issues affecting a business" put on the column side of the matrix and "Urgency of issue" on the row side. Each column and row was given a strength level of High, Medium and Low. Research was conducted across several different businesses on what type of issues were faced by businesses and which issues were tackled first by management. The management of the businesses first gave a value of how 'impactful' the issues were (if the issue was not addressed the business would suffer greatly in the 'high level' and not as much in the 'low level'),and then on how 'urgent' they were. They were then asked which issues they addressed first and which were postponed. It was discovered that managers of high performing businesses tackled the more 'impactful' issues before the more 'urgent ones' whereas managers of lower performing businesses did the opposite. This is an interesting discovery as normal human behaviour is to address the more urgent issues first, even if they are not as important and postpone dealing with issues which can be addressed later. This concept has opened my eyes and made me look at my personal goals differently and changed the order and importance I give issues in my own life.