Advertising Plan of Standard Chartered Bank

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 Advertising Plan of Standard Chartered Bank
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Executive Summary

• Premises-summary of information presented in marketing plan

Pakistan’s banking sector has remained remarkably strong and resilient, despite
facing pressures emanating from weakening macroeconomic environment since late
2007, according to the assessment of the State Bank of Pakistan’s Financial Stability
Review 2007‐08.

Accordingly the banking sector is primarily dominated by major players such as

Habib Bank limited, Bank Al-falah, CitiBank, Allied Bank, MCB, Askari Bank followed
by Standard Chartered bank and RBS (formerly ABN Amro) and Bank Al-Habib.
Smaller players like Samba who recently acquired Cres Bank and acquisition of
union bank by Standard Charter Bank also added to the escalating competition
among banks to gain maximum market share as possible.

This severe competition in current market and world economy has led the financial
institutions to use aggressive mediums of communication so that to gain strategic
market position in the target market. In regard I have presented a comprehensive
Advertising Plan for Standard Chartered Bank’s Credit cards so that they would be
able to improvise on their already existing advertising strategy. The report in this
regards consist of analysis of current situation, strategy and tools as well.

• Summary of Advertising Objectives

The advertising Objectives for Standard Chartered Bank’s Credit cards would be to:

○ Inform
○ Persuade
○ Remind

This would help to generate awareness, sales and gain market share for the bank.

• Summary of Advertising Strategy

The advertising strategy would consist of following methods:

○ Sponsorships
○ Co-Branding
○ Digital Billboards
○ SMS to existing customers
○ Print Media
○ TV commercials
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Situation Analysis:

Industry overview:

A banker or bank is a financial institution whose primary activity is to act as a

payment agent for customers and to borrow and lend money. It is an institution for
receiving, keeping, and lending money1

The changing economic environment has a significant impact on banks and thrifts
as they struggle to effectively manage their interest rate spread in the face of low
rates on loans, rate competition for deposits and the general market changes,
industry trends and economic fluctuations. It has been a challenge for banks to
effectively set their growth strategies with the recent economic market. This in turn
means that banks have to effectively and aggressively advertise their services in
order to position themselves strongly.

Description of Company:

Standard Chartered PLC is listed on both the London Stock Exchange and the Hong
Kong Stock Exchange and is consistently ranked in the top 25 among FTSE-100
companies by market capitalization. Standard Chartered has a history of over 150
years in banking and operates in many of the world's fastest-growing markets with
an extensive global network of over 1,400 branches (including subsidiaries,
associates and joint ventures) in over 50 countries in the Asia Pacific Region, South
Asia, the Middle East, Africa, the United Kingdom and the Americas.

As one of the world's most international banks, Standard Chartered employs 60,000
people, representing over 90 nationalities, worldwide. This diversity lies at the heart
of the Bank's values and supports the Bank's growth as the world increasingly
becomes one market. With strong organic growth supported by strategic alliances
and acquisitions and driven by its strengths in the balance and diversity of its
business, products, geography and people, Standard Chartered is well positioned in
the emerging trade corridors of Asia, Africa and the Middle East. Standard Chartered
derives over 90 per cent of profits from Asia, Africa and the Middle East. Serving
both Consumer and Wholesale Banking customers worldwide, the Bank combines
deep local knowledge with global capability to offer a wide range of innovative
products and services as well as award-winning solutions.

Pakistan:

Standard Chartered Bank2 (Pakistan) Limited - A locally embedded international

bank. Standard Chartered is the largest international Bank in Pakistan. The Bank has

1
http://en.wikipedia.org/wiki/Banking_industry
2
http://www.standardchartered.com/pk/personal/about-us/en/about-us.html
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been operating in Pakistan for over 140 years when it first established its operations
in 1863 in Karachi. After the acquisition of Union Bank in September 2006, the new
entity Standard Chartered Bank (Pakistan) Limited was incorporated in Pakistan on
30 December 2006 as a subsidiary of Standard Chartered PLC.

The bank has a network of over 176 branches in Pakistan. Standard Chartered
employs a workforce of over 9,000 employees in its Pakistan operations.

Product life cycle

Standard Chartered Bank in this regard the service lifecycle of standard chartered
bank lies in high growth stage. This is due to its penetration into Pakistan market
during the era of high financial growth and economic uplifting policies of the
government of that time. This provided Standard chartered bank to build upon a
platform of solid and stable measures on which it is now growing. High growth with
regards to market share and presence in terms of no. of branches in all major urban
centers also led to a prominent position in the market thereby leading to an overall
growth in terms of service offerings.

Competitive or marketing position

Pakistan’s banking sector has remained remarkably strong and resilient, despite
facing pressures emanating from weakening macroeconomic environment since late
2007, according to the assessment of the State Bank of Pakistan’s Financial Stability
Review 2007‐08.

Accordingly the banking sector is primarily dominated by major players such as

Habib Bank limited, Bank Al-falah, CitiBank, Allied Bank, MCB, Askari Bank followed
by Standard Chartered bank and RBS (formerly ABN Amro) and Bank Al-Habib.
Smaller players like Samba who recently acquired Cres Bank and acquisition of
 Advertising Plan of Standard Chartered Bank
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union bank by Standard Charter Bank also added to the escalating competition
among banks to gain maximum market share as possible.

Other segments of industry pre dominantly include investment banking and

investment firms who tend to formulate indirect competition with consumer banks.

Over all industrial market share in terms of number of branches is as under:

Sales history and share or market

The global economic environment has significantly deteriorated and in this fiscal
year Pakistan has faced both external and internal shocks. As a result of
macroeconomic imbalances caused by these shocks, the economy has already
begun to adjust through a slowdown in growth and rising inflation. However,
Revenue for Standard Chartered Bank grew by 8% to PKR 5.79 billion for the quarter
ended March 2008 against PKR 5.35 billion in previous corresponding quarter. This
tends to indicate a still lucrative and competitive market for financial services in
Pakistan.

Methods of distribution
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The bank has ambitious growth plans3. It plans to continue expanding the branch
network to deliver upon its vision of being a “locally embedded international bank”.
In order to achieve these plans, it has embarked upon a unique “journey of
transformation” through:

(i) Growth in its distribution footprint,

(ii) Innovative products and services,
(iii) Talented and diverse teams, and
(iv) Sustainable business strategy based upon community investment.

SCBP expanded its distribution footprint by 26 branches in 2007, adding another

35 branches during the first half of the current year. The bank now operates with
176 branches in 41 cities. Pakistan’s consumer banking operations ranks sixth in
the Group, while in terms of branch network, it is at third position.

Pricing strategies involved

Various bank charges and interest rates apply on services such as:

• Personal Banking
• Islamic Banking
• Wholesale Banking
• SME Banking

Communications history

Overall communication medium in Pakistan particularly by SCB had been as under:

• Billboards
• Office Themes
• Brochures
• Sponsoring Events
• TV commercials

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http://www.pacra.com/pdf/SCBP_R07.pdf
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Target Market Description

1. Market segments

Overall market industry for banks in general and SCB in particular can be divided
into following categories:

• Personal Banking
○ Accounts and Deposits
○ Debit & Credit cards
○ Loans & Mortgages
○ Insurance
○ Investment
• Islamic Banking
Standard Chartered, with an aim to meet the unique needs of its customer,
has setup an Islamic Banking Division. The bank is offering tailor-made
Shariah compliant products to its customers.
• Wholesale Banking
○ Transaction Banking
○ Financial Markets
○ Corporate Finance
○ Principal Finance
• SME Banking
2. Primary market
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3. Secondary market
4. Market characteristics
a. Geographic
b. Demographic
c. Psychographic
d. Behavioral
5. Marketing Objectives
a. Need Satisfying objectives
b. Long and short term sales target objectives
6. Marketing mix4
a. Product

Consumer banking

Standard Chartered provide mortgages, Credit Cards, personal loans, auto loans,
deposit accounts, and wealth management products.

Corporate and institutional banking

Corporate & Institutional Banking provides trade finance, cash management and
lending services.

Global markets

Global Markets provides foreign exchange, interest rate management and debt
capital markets services that are very dynamic in Pakistan as there are a lot of
changes in the economic climate.

Service Provided5:

• Foreign Exchange
• Spot and Forward
• Asset & Liability management
• Short Term loans/deposits
• Interest rate / Liquidity management
• Economic Research & Analysis
• Customer Risk Management
• Non Deliverable Forwards
• FX Options
• Interest Rate Derivatives

4
http://en.wikipedia.org/wiki/Standard_Chartered_Bank_(Pakistan)
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http://en.wikipedia.org/wiki/Standard_Chartered_Bank_(Pakistan)
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• Interest Rate Swaps
• Cross Currency Swaps
• FRAs
• Interest Rate Options
• Financial Engineering

b. Price

Standard Chartered Bank Pakistan Limited is an active price maker in the

market and handles flows of multinationals and foreign investors in the stock
market. Variable service charges on apply on each category of service
offerings, these range from bank charge rates to transaction costs etc.

c. Distribution

Standard Chartered Bank is one of the world's leading banks in foreign

exchange and money market operations with specialist strengths in exotic
currency products.[citation needed] Clients have access to a 24-hour dealing
service through 20 dealing rooms in the principal financial centers. The bank
has also established a strong reputation for dynamic involvement in new
financial products such as options and derivatives and is particularly strong in
the emerging market currencies of Asia, Africa and Latin America where it is
recognized as being a first choice provider in many markets.

With presence in more than 50 countries and 150 years of experience, the
bank has a large local customer base in each of these markets attracting
large volume transactions.

Standard Chartered Bank (Pakistan) Limited is Pakistan's oldest and largest

foreign bank with over 150 branches in the country. The history of Standard
Chartered in Pakistan dates back to 1863, when the Chartered Bank of India,
Australia and China first established its operations in Karachi.

In 2006 Standard Chartered Bank acquired Pakistan's Union Bank. On 30

December 2006, Standard Chartered merged Union Bank with its own
subsidiary, Standard Chartered Bank (Pakistan), to create Pakistan's sixth
largest bank.

d. Communication

In Pakistan the communication mix for SCB had been more of below the line
advertisement rather than an open traditional promotional and
communication mix. They usually prefer to paint-out the entire bank branch
using it as an attractive outdoor advertising medium. Other than that
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brochures within the bank are placed for walk in clients to announce their
new service offerings.

7. Intended role of Advertising in the communication mix

Banks operate in a significantly more competitive environment than they did a
decade ago in Pakistan. The number of commercial banks became larger through
acquisitions, and entered new markets as geographic market entry restrictions
were gradually removed, first at the city, and then at the provincial level. This
not only allowed banks to capitalize on economies of scale but also to spread
their operations over the geographic space to diversify the local economy risk
during 1980s and 1990s. Competition from credit unions6, which are exempt
from income taxes, and non-bank financial services, such as money market
mutual funds and finance companies, which are exempt from banking
regulations, also stiffened during this period. Banks tried to counter non-bank
competition by offering a wider range of products and services, ranging from
insurance to investment banking, betting on the economies of scope. The
dramatic changes in the banking sector suggest that the role of advertising in
commercial bank production and performance may have increased in the new
competitive environment.
This means that major role of Advertising so far by Standard Chartered Bank in
Pakistan had been to retain its existing market share as well as to gain
competitive edge through its non advertising measures such as acquisition of
Union Bank so that to not only increase its distribution network of branches all
over Pakistan but to Advertise its presence through its signature painted building
branches all across Pakistan as well.

8. Advertising Objectives
Advertising in no matter what format, has primarily three major objectives:
1. Inform
2. Persuade
3. Remind

The advertising objectives thus for Standard Chartered Bank are and must be
aligned such that people or target audience is informed of the service offerings
that the bank is making. The awareness in this regard would help this deicide,
compare and evaluate the service offerings of SCB with other competitive banks
and thus rational decision on their part could be made. Once the awareness of
service offerings is made, and then comes the persuasion part. Here SCB would
work through it advertisements in such a way that the target audience would be
persuaded to buy the service offerings from SCB rather than its competitors. And
finally reminding the customers in regular cycle of service offerings from SCB

6
http://www.cerge.cuni.cz/pdf/events/papers/031201_t.pdf
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would help to not only retain the existing customer base but would also help to
start the cycle of informing to newer customers too.

9. Advertising Strategy
Developing an Advertising Strategy7 to achieve the objectives of a campaign
requires that consideration be given to both the ‘Message’ which will be
communicated and the ‘Media’ through which it will be sent.
As per BCG:

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http://www.examstutor.com/business/resources/studyroom/marketing/advertising/3-
advertisingstrategy.php
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Kim lord grid purchase decision positioning:

• Advertising Message
An advertising campaign, no matter how much money is spent, no matter what
media is used, will only be successful if the Message appeals to the target
audience. Given the level of advertising which bombards the average consumer,
a successful advertising message must stand out amongst the advertising
clutter. Thus marketing professionals are required to be creative, imaginative
and innovative in developing the advertising message, both in terms of What is
said, and How it is said.
In this regards, SCB has had various messages that it had used for its
promotional campaigns.

What is said...

This is often referred to as the ‘Big Idea’, and will normally address the key benefits
sought by the target audience, motivating the audience to pay attention. Given the
constant search for new ways to appeal to target audiences, it is difficult to
categorize the content of advertising messages which a business may send. Below
are a couple of examples of actual message strategy.
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How Things are said:

How things are said, is often just as important as what is said. Creating attention
grabbing and memorable advertising is increasingly vital, given the amount of
advertising clutter in the marketplace. As with message content, advertising is
constantly generating new styles of advertising, and since there had been greater
competition in the financial and banking services market of Pakistan, so banks and
insurance companies needed to use newer and more attractive methods to
advertise their product service offering. SCB in this regard had used some of these
message styles:

• Personality symbol
This is a person or celebrity to represent the actual product service
offering.
• Lifestyle
Here they had linked the product service offering to a particular life style
pattern for example SCB used its car financing ads to promote car for its
prospective customers.
10.Advertising budget

After identifying the advertising objectives, the advertising budget8 must be set.
Although current advertising budget for SCB is hard to determine but to know
exactly how much a business should spend on advertising to achieve the desired
level of sales, is more an art than a science. Commonly, the decision is based on
past experience of expenditure on advertising, and the sales subsequently
achieved. There are however a number of factors that can be considered in setting
the advertising budget.

Factors influencing the setting of Advertising Budgets:

• Product life cycle stage:

New products in the 'Launch' stage of their Product Life Cycle, will normally
require greater expenditure on advertising to create product awareness, and
encourage consumers to trial the product. Whilst products that have reached
'Maturity' in their product life cycle, will often require smaller advertising
budgets to achieve the level of sales required. Since newer and competitive
product service offerings are being made by SCB so it tends to create a stage
of growth for SCB where it need to spend more on its advertising so that to
create a strong positioning in the market that relates to its marketing
objectives.

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http://www.examstutor.com/business/resources/studyroom/marketing/advertising/3-
advertisingbudget.php
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• Competition:

The number of competitors in the market, and their expenditure on

advertising competing products, will influence a business to spend to a
similar or higher degree. Here in Pakistan, due to higher degree of
competition in this arena makes such service providers to advertise
aggressively using all mediums of communication.

• Product Differentiation:

A product very similar to other products on the market may require greater
expenditure on advertising to differentiate it from its competitors. And since,
banking and financial services are more or less similar so stronger yet
convincing messages are needed to be conveyed in this market.

Allocation strategy:

Before setting an allocation of budget for SCB’s advertising strategy. We need to

find out which approach to set the advertising budget best fits the current scenario
and why?

There are number of approaches for setting an advertising budget such as:

• Fixed percentage of sales

In markets with a stable, predictable sales pattern, some companies set their
advertising spend consistently at a fixed percentage of sales. This policy has
the advantage of avoiding an “advertising war” which could be bad news for
profits. However, there are some disadvantages with this approach. This
approach assumes that sales are directly related to advertising. Clearly this
will not entirely be the case, since other elements of the promotional mix will
also affect sales. If the rule is applied when sales are declining, the result will
be a reduction in advertising just when greater sales promotion is required.

• Same level as competitors

This approach has widespread use when products are well-established with
predictable sales patterns. It is based on the assumption that there is an
“industry average” spend that works well for all major players in a market. A
major problem with this approach is that it encourages businesses to ignore
the effectiveness of their advertising spend – it makes them “lazy”. It could
also prevent a business with competitive advantages from increasing market
share by spending more than average.

• Task
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The task approach involves setting marketing objectives based on the “tasks”
that the advertising has to complete. These tasks could be financial in nature
(e.g. achieve a certain increase in sales, profits) or related to the marketing
activity that is generated by the campaigns. For example:

○ Numbers of enquiries received quoting the source code on the

advertisement
○ Increase in customer recognition / awareness of the product or
brand (which can be measured)
○ Number of viewers, listeners or readers reached by the campaign
• Residual

The residual approach, which is perhaps the worst of all, is to base the
advertising budget on what the business can afford – after all other
expenditure. There is no attempt to associate marketing objectives with
levels of advertising. In a good year large amounts of money could be
wasted; in a bad year, the low advertising budget could guarantee a further
low year for sales.

Now keeping in mind the pros and cons of all the mediums of setting a budget for
advertising. I believe that “Task Based” approach for setting the budget for
Standard Chartered Bank is more feasible since this way it could achieve specific
goals of reaching its target audience till the targets for its existing or specific
product service offering is achieved. This will also relate to the marketing objectives
set for SCB i.e. Inform, Persuade and Remind.

Communications Media:

Now before setting out the budget expense for SCB, we need to understand the
demographics of overall advertisement industry in Pakistan. Firstly the existing
break up of advertisement spends for banks in overall advertisements are as under:

News Papers:

Magazines:

Now keeping in mind the existing advertising strategy of Standard Chartered Bank
that primarily consists of:

• Outdoor advertisements i.e covering up of entire building/branch in its

message and colors
• Brochures
• Billboards
• TVC and Printed Ads
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I have proposed a strategy that tends to add value on its existing advertisement
campaign. These include:

• Sponsorships
• SMS advertisements to its existing cliental
• Outdoor advertising to be included on Radio Cabs, Bus Stands, Airports and
Digital Display circuits.
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Currently Standard Charter Bank is a major sponsor of greatest race of Earth. In

2004, Standard Chartered created The Greatest Race on Earth (GROE), a
challenging virtual relay race across our four established marathons in Nairobi,
Singapore, Mumbai and Hong Kong. These locations represent some of the most
challenging urban running environments in the world. Whether it's the intense heat
of Mumbai and Singapore, the steep inclines of Hong Kong, or the high altitude of
Nairobi, participants in GROE face an extremely difficult task. These marathons
characterize the values and attitude that Standard Chartered believes in, and lives
by every day - a "can-do" attitude, a priority on strength of trust, willpower,
stamina, and the determination to "go the distance".

SCB can conduct a similar sponsored race here in Pakistan. Currently the Punjab
government in particular conducts Lahore Marathon each year in which participants
from all over the world come and perform. Sponsoring this event as major
stakeholder will be easy because the management won’t have to actually conduct
the event rather sponsor one that takes place under Punjab government supervision
as Jashn-e-Baharan celebration in Lahore.
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Such sponsorship took place back in 2005 when standard chartered bank sponsored
the Lahore marathon race. But after that it did not undertook such an initiative. So I
believe sponsoring such event where the entire purpose directly relates to what the
bank actually visions in makes a perfect medium for
advertising itself in Pakistan.

Similarly the bank can also sponsor events such as

twenty20 cricket cups which were primarily
sponsored by former ABN AMRO.

Using SMS as a medium for advertising its

services and new offerings is also an effective tool to
its existing customer base. This will help them to be
informed of its services and use them for word of
mouth strategy as well.

Then advertising on digital billboards is also suggestive since the outlay is

interactive and catchier. Such billboards are already in place in Lahore, Islamabad
and Karachi.

Finally advertising in major newspapers like:

And other such magazines that have a target market correlating to that of SCB’s
service offerings will create a healthy position as per mind share is concerned.
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Similarly advertising in peak hours such as between 8pm to 10 pm in channels such
as GEO, ARY and HUM as well as CNBC, TENSPORTS and DAWN NEWS is
suggested.

Advertising Message

• Copy elements
○ Advertising appeals

The advertising appeals for such ads would be mostly emotional, slice
of life and would consist of

○ Copy platform
The copy platform would consist of defining the goal of SCB’s message.
○ Key consumer benefits
Here all the features of credit card usage of SCB would be highlighted
in the ad
○ Benefit supports or reinforcements
The co-branding would help to reinforce the strategy upon the
customer
○ Product personality or image
It would be aligned with the sales pitch of the ad itself and would tend
to impose the overall credible image of SCB.
• Art elements
○ Visual appeals
 In ads, commercials, packaging, point of purchase and sales
material and all such things would contain the colors of SCB as
well as the tagline of the product itself to promote and position it
aggressively.
○ Art platform
 Layout, design, illustration style would be picture window with
theme of the video ad relating to it so as to synchronize the
overall campaign.
○ Production elements
 Color, size, style would be that of traditional standard charter
bank’s original theme.
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11.Testing and Evaluation

This is justified from the viewership ratings of various channels as per the data till
July 2008.

The strategy would thus then be tested and evaluated through brand recall surveys,
GRPs and how the product itself has penetrated the market with sales volume so
that the efficiency of ad reach could be analyzed.
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Probable Advertising Expense Breakage:

Budget:

Column
Budget Column1 2
TVC
150,000 per 1800000
GEO minute 0
150,000 per 1800000
ARY minute 0

36,000,
total 000
44,000,
Sponsorships 000
SMS 100,000
Digital 100,000 per
Billboards hour 300,000
Outdoor
advertising 500,000
Brochures 250,000
Newspapers
Nawa-i-waqt 170,000
The Nation 110,000
The NEWS 120,000
total 400,000
815500
Grand Total 00

Ads on TV will be played as 1minute each for 4 times a day for 30 days.

Conclusion:

Hence using such strategies where the message strategy and theme of
advertisements would be as such so that to promote the overall sales of credit cards
for Standard Chartered Bank is feasible. Although the costing of such promotions is
comparatively huge, but keeping in mind the financial backing of the bank itself, it
would help not only to increase the sales of the credit card but would also help to
position the bank name overall.