The Mauritius Commercial Bank

Introduction

The assignment will be based on the banking industry, more precisely, on the Mauritius
Commercial Bank which is a bank having a 167 years track record. It was founded in 1838 but it
became a limited liability company only in 1955. It is the oldest and largest banking institution of
Mauritius. It now plays a key role in the country's economy by extending its unflinching support to
trade, agriculture, the textile industry, tourism and other sectors as well as individual customers, not
only at its head office but also through its strategically located network of 42 branches and counters
in Mauritius and in Rodrigues.

MCB becomes the first bank to install ATM`s in Mauritius and was also the first bank to
issue credit cards. Offering a variety of services, the MCB is currently one of the most reputed for its
success, profitable financial position and competitive advantage. It has been expanding and
innovating continuously since its foundation and has faced much competition in the industry from its
major competitors such as the SBM, HSBC and the Barclays Bank plc. The MCB apart from being a
stable bank is also part of a major group the MCB group which provides diversifies services like
trade (GHF) or tourism (Blue Penny Museum).

A systematic analysis has been conducted to identify the segmentation strategies, the
targeting, and the positioning of the bank.

Segmentation

Segmentation is essentially the identification of buyers within a market that share similar
needs and demonstrate similar buying behavior and according to Kotler (1997) “Market
segmentation is the sub dividing of market into homogenous sub-set of customers where any subset
may conceivably be selected as market target to be reached with a distinct Marketing Mix”. It is
important to segment a market in order to allocate for the market budget, to adjust the product to the
market need, to overcome competition more easily (since the competitors are identified per segment
and customers needs too), to develop targeted marketing programmes and to obtain a more precise
definition of the market. A market can be segmented in the 4 following categories. Let us analyse
market segmentation for the Mauritius Commercial Bank Ltd.

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• Geographic Segmentation
This implies subdividing the market into segments based on location, regions, cities, inhabited
areas and places where people work. However, this does not apply for the MCB because it is
found all around the country without any specific geographic concentration and even on the global
aspect it has a branch in the Seychelles, Mozambique, Madagascar, Mayotte, Réunion Island,
South Africa, Maldives and even Paris (France). One can deduce that the MCB has not been
operating through a geographic segmentation.

• Demographic Segmentation
It is the most common basis for segmenting a market. It is frequently used because it is often
strongly related to demand and hence relatively easy to measure. The characteristics for
demographic segmentation are age, gender, family, income and education mostly. The MCB has
been using the bases age for it targets adults as they are the one who save in the bank even if it is a
Rupys account, the family one because the children packages are basically meant for families who
start saving up for the children and take on educational loans for them. The next is the income
factor which is taken into consideration for the bank aims at middle income and high income
earners mostly instead of low income earners. There are many other factors which have been
considered while segmenting the market.

• Psycho graphical Segmentation.

This type of segmentation divides the buyers into different groups based on social class, lifestyle
or personality characteristics. This type of segmentation is not used by the MCB and not likely by
any other bank. This is so because, the MCB has got a personalised service which caters for each
client differently according to their personality. This bank provides a personal banker service for
each client. If it had to segment the customers according to social class, lifestyle or personality,
this would reduce the possible customers of the bank for each and every person is different and
financially acts differently.

However, this type of segmentation can be used for businesses. Businesses usually tend to face
similar business crisis and risks and the bank is fully armed to respond to those risks and crisis.

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Hence, businesses might be segmented into SMEs, Big companies, New companies etc according
to their market share, stock exchange value and response.

• Behavioural Segmentation
It is an attempt to segment the market on a basis of product-related behaviour. It divides
consumers into groups based on their knowledge, attitude, uses or responses to a product. The
Mauritius Commercial Bank does not use the behavioural segmentation. If it had to segment on
the basis of consumer feedback, then all its customers would be included in. Since, it is a long-
established bank; it enjoys brand loyalty from its customers.

Targeting

Targeting is the selection of potential customers to whom a business wishes to sell products
or services. The targeting strategy involves segmenting the market, choosing which segments of the
market are appropriate, and determining the products that will be offered in each segment. A
business offering multiple products can determine if the various segments should receive one generic
product (such as in mass marketing), or if each segment should receive a customized product (multi-
segment), based upon the market's diversity, maturity, the level of competition and the volume of
sales expected. For the Mauritius Commercial Bank Ltd, it targets different segments in the market
like according to age group, professional status and individual or corporate.

The MCB has developed various packages for various ages. For example in the creation of an
account for benefiting from the banking facilities, there are different types of accounts and they are
namely current account and saving account. These types of account can be opened anytime and the
age of the person is not taken into consideration. Now we have various types of packages that the
MCB offers and they are targeted at different age group. Firstly we have the MCB Rupys which is
for children between the ages of 0 to 11 years old (for minor). You can save for the future of your
child and in return you will win exciting gifts. The minimum deposit to open an account is Rs 500
and the minimum balance generating interest is Rs 500. After the MCB Rupys package we have the
18.25 package. This package is aimed at people between the age of 18 and 25. It is a banking
service that matches lifestyle. This unique bouquet will make banking so easy while allowing

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customers to make the most of what life throws at them. They can manage their money smartly with
their MCB Savings account: juggle with their expenses cleverly and earn interests when they save.
They can withdraw cash at ATMs and shop around the clock in Mauritius and around the world with
their MCB Maestro debit card. Also they can reload their mobile credits instantly anywhere,
anytime with MCB ReFill. Finally they can access and manage their accounts 24/7 through MCB
Internet Banking.

Besides there is the loan facilities with is aimed at individual and at student. There are the car
financing, educational loan and housing loan. For the car finance it is targeted towards people who
want to buy a car. This scheme is designed to satisfy your needs taking in consideration your
financial capabilities. The repayment term is up to 7 years and it has a competitive and flexible
interest rates. Also if you do not want to purchase the car you may lease the car by using the leasing
facility. This can be beneficial to individuals and also to owners of businesses. Furthermore, there is
the educational loan which is known as MCB Campus which is aimed at students who are pursuing
their post secondary studies. It finances loan from Rs 100,000 to Rs 3,000,000, depending on the
type and value of securities provided & the borrowers’ revenue. The repayment terms are up to 7
years and it has a competitive interest rates. Now for people who want to build a house MCB is
offering a service to them. The housing loan is targeted to people who have the aim of building a
house. The financing is up to 100% of project cost and the repayment terms are of up to 25 years. It
has a competitive interest rate and it is offered also to non-MCB customers. This shows that the
MCB does not target its customers only.

Finally, businesses also are targeted by the MCB in the Business Banking. Whether you are
starting your business or expanding your business, the MCB provides you with financial needs. The
MCB Group has been supporting entrepreneurs for 170 years. We are proud to be associated with
numerous success stories. Inspired by this rich history and driven by a clear-cut vision to boost
SMEs, we provide the most appropriate solutions to help you meet your challenges. It offers trade
finance, import loans and export advances and credit protection. This shows that the MCB provides
a wide range of services to the public and not only to its customers also.

Positioning

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Having segmented the market, determined the size and potential of market segments, and
selected specific target markets, the third part of the STP process is to position a brand within the
target markets. Positioning is important for it is the means by which goods and services can be
differentiated from one another and so give consumers a reason to buy the service in our case.
Positioning encompasses two fundamental elements. The first concerns the physical attributes, the
functionality and the capabilities a brand offers. For example, MCB’s personalised services. The
second element concerns the way in which a brand is communicated and how consumers perceive
the brand relative to other competing brands in the market place. This element of communication is
vitally important as it is ‘not what you do to a product, it is what you do to the mind of a prospect’
(Ries and Trout, 1972) that determines how a business is really positioned in a market. Kotler
(1997) brings these two elements together when he says that ‘Positioning is the act of designing the
company’s offering and image so that the occupy a meaningful and distinct competitive position in
the target customers’ minds’’

Positioning for MCB is about the services’ attributes and design, how the product is being
communicated, and the way these elements are fused together in the minds of customers. It is about
how customers judge a product’s value relative to competitors and its ability to deliver against
promises made. MCB enjoys a competitive advantage since it has a favorable product position and a
market position. The bank provides diversifies services which are adapted to the personality of the
customers. Since it adopts a differentiated marketing strategy, each segment of a targeted population
has its own type of service. The bank is the number one bank in Mauritius, forms part of the 1000
best banks on a global vision and ranks 25th among the sub Saharan African countries. As mentioned
above it has a rich history and a goodwill which have been built all along the years. MCB is a leader,
it controls more market share than the other banks and has approximately 760 000 individual and
institutional customers. Their vision and mission statements are adapted to keep this leading
position.

In order to achieve such a position, MCB has made use of the positioning strategies. The first
one is the product attribute by using the concept of first class banking, internet banking, private
banker assistance, flexible credit card service and all apart from its regular banking system. The

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second one is the price and quality of the bank. The rates (prices) of the MCB are about 4% p.a for
the savings account and fixed deposit accounts and 5% debit rate for current account on
unauthorised overdrawn which the quality of service is a 5-star one with personalised assistance
through all the procedures, operations and opportunities of the bank. The next one is the product
class and one can observe that the first class banking service, which allows for accounts in local and
foreign currencies, avoidance of double taxation with 31 countries and the famous American Express
premium cards. The fourth one is the application concept whereby uses of the service are stressed
upon. The fifth one is the product user which deals with personalised services which are the base of
the MCB client approach also that the image of MCB’s services relies upon the employees which
until now have brought out positive response from the customers.

The last one is positioning against competitors. MCB is doing fine in this sector especially
with its go green projects - green directory, initiative 175 “green together” and the most astonishing
green efficient building in construction at Trianon (the oval glass building) in an era where
Mauritians are going green to help the environment. To add to it, MCB has fortified relations with
the Small Medium Enterprises helping to fund those who want to start in that field with a lower
return rate. To add to it, this bank is the first partner of China Union Pay in Mauritius and had been
promoting sports for the young all around the country.

Conclusion

Considering the above stated, one can note that MCB, perhaps without using these different
approaches will never be the ONE everyone knows today. Facilities such as Maestro Debit Card,
MCB Refill, Internet Banking, and different types of Loans with low interest rate have strengthened
the image of MCB. All these have been made to suit the customer and adhere to the needs of the
client in a more personalised way with help of the segmentation, the targeting and the positioning. In
addition to this, customer care and its rich history has turned brand loyalty into the MCB culture. As
a final conclusion, the STP process is a very important one for any organisation in the whole world.
Applying it to a specific company, like the MCB, shows the impact of such an analysis and the
whole marketing operation is found.

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