Professional Documents
Culture Documents
MARKETING PLAN
Marketing
Plan
Human
Resources
Plan
Financial
Plan
Risk
Management
Plan
1. Mission Statement
It states the overall purpose of bank or any
organization.
2. Key Objectives
Objectives are cited for variables such as:
(a) financial return expected,
(b) degree of efficiency required,
(c) size of loans or credit on offer, and
(d) service quality
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3. Market Assumptions
These contain explicit statements about future
trends in strategic market segments, which may
affect the banks freedom to act.
4. Competitive Strength Evaluation
An evaluation exercise of the strengths &
weaknesses based on factors such as: ( relative
costs, service quality, and market share).
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5. Assessment of Opportunities
The plan should assess the threats and
opportunities for each market segment.
This is important in order to achieve the
mission & objectives
6. Market Portfolio Strategy
The plan must identify the desired
investment strategies for each of the
markets in, which bank units participate
and the objectives to be attained for each.
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7. Strategic Changes
Objectives & goals for action plans stating
changes in capabilities or resources under
the control of unit management and
selected as most likely for achieving the
desired market results.
8. Action Plans for Implementation
Specific programs including measurable
goals, events and timing, which result in
the changes specified in action plan
objectives.
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Mission
Statement
Key
Objectives
Environment
& Market Assumptions
Competitive
Strengths Evaluation
Assessment of
Opportunities
Market Portfolio
Strategy
Strategic Changes
Action Plans
For Implementation
Evaluation Process
Action Plans
For Implementation
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Wholesale Banking
Competition Intensified- banks continued to strive
for competitive advantage and in doing so cancel out
one anothers efforts,
MNCs became stronger in their demands by
negotiating their own interest rates and cost of services
from banks,
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L
o
w
Low
PROBLEM CHILD
Strategy Build
Strategy Build or
Harvest or
Divest
CASH COW
DOG
Strategy Hold
Strategy Harvest
or
Divest
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Star
Where the bank would
make investments in
order to build up or
expand its Business
Units (BU),
Cash Cow
Where the bank would
invest just enough
money to hold the BU
share at the current level,
Problem Child
Where the bank allows
market share to decline
in order to maximize
short-term profitability &
cash flow, regardless of
the long-term effect,
* Dog
Where the bank sells or
phases out the BU &
reinvest resources.
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MARKET
CURRENT MARKET
P
R
O
D
U
C
T
NEW MARKET
C
U
R
R
E
N
T
Market
Penetration
Market
Development
N
E
W
Product
Development
Diversification
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Acquisitions
New Industry
Structure
Joint Ventures
New Geographic
Areas
New Delivery
Systems
New Products &
Services
How?
Minority Stakes
Alliances
Existing Products
to new customers
Marketing
Partnership
Existing Products
to existing customers
Organic Invt
New Competitive
Arenas
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Operational Skills
They are the core competences that a business has
which can provide the foundation for a growth strategy.
(e.g. the business may have strong competencies in customer
service; distribution, technology).
Privileged Assets
Those assets are held by the business that are
hard to replicate by competitors.
(e.g. in a direct marketing-based business these assets
might include a particularly large customer database, or a
well-established brand).
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Growth Skills
These are the skills that businesses need if they are
to successfully manage a growth strategy.
These include the skills of new product
development, or negotiating and integrating
acquisitions.
Special Relationships
Such relationships are those that can open up new
options.
(e.g. the business may have specially string relationships with
trade bodies in the industry that can make the process of growing
in export markets easier than for the competition ) .
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Desired Revenue
Strategic
Planning Gap
Projected
Revenue
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LEGAL
* Banking Regulations & Laws,
Taxation Laws,
Foreign Exchange Controls,
POLITICAL
Attitude of the Government towards the local
banks, Attitude of the Government towards
foreign banks & non-bank financial institutions.
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ECONOMIC CONDITIONS
Industry Structure,
Gross Domestic Product (GDP),
National Rate of Inflation & Money Supply,
Foreign Exchange Rates,
Interest Rates, and
Unemployment Levels.
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TECHNOLOGY
Development in Integrated Technology,
Changes in Technological Industry,
Levels of Investment Required, and
Customers attitudes towards new technology.
COMPETITION
Existing players in the Market,
New Entrants penetrating the Market,
Pricing of Financial Services/Products,
Marketing Style, and
Consolidation within the Banks.
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COMPETITOR ANALYSIS
Market share,
Financial position,
Reputation among suppliers and creditors,
Composition of the clientele,
Menu of product/service range,
Strategies for segmentation, key accounts,
Pricing,
Image & service quality standards & performance,
Efficiency of service delivery,
Promotion aspects (e.g. spending, timing & reach),
Technology used for service delivery,
Planning, information & control systems,
Ability to attract qualified personnel,
Training, morale, union relations,
Commitment to research & development, and
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Plan to diversify within, and/or, outside the industry.
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Employees
Does the bank have adequate qualified employees to handle
the marketing campaign?
Are the employees fully aware of the marketing plan and
their respective responsibilities?
In the event of a shortage of employees will they be
recruited from the banks competitors or given internal
training?
Will the employees be given a marketing target to achieve
within a specific period of time?
Who will be responsible for the overall co-ordination?
Will they be remunerated based on performance?
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Premises
Where will the marketing campaign be executed - Head
Office, or Branch Level?
Are the current premise visible or adequate to promote the
marketing campaign?
Will there be any additional cost to be incurred to make the
premises more user friendly and appealing?
How are the premises styled open plan or closed counters?
Are the premises comparable with the banks competitors?
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Systems
Are the present systems adequate or robust enough to
handle the marketing campaign?
Are the systems user friendly?
Are the employees fully trained to manage the systems in
place?
Can the systems be replicated by the banks competitors?
Who will be responsible to manage the systems?
Can the systems be tempered with?
Is there a contingency plan in place in the event of a system
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break down?
Financial Resources
Is there a specific budget allocation for the marketing
campaign?
Who will be responsible to manage the budget?
Has adequate provisions made to include cost overrun of
the campaign?
Does the budget time frame match the marketing campaign
period?
Is the marketing campaign costs built into the service costs?
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Market Characteristics
Assess the market size,
Test for historic growth rate,
Make a projection of the growth rate,
Count the number of accounts in total,
Evaluate the trend in market concentration,
Consider the buying decision process,
Evaluate the service delivery process, and
Assess the characteristics of customers.
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Service Characteristics
Relative capital intensity,
Work out the degree of service differentiation,
What is the Value Added?
Consider the level and type of risk faced by the bank,
Test the relative profitability of the service,
What are the potential for cross-selling
opportunities?,
The impact of shared-cost structures,
Rate of service change and innovation,
Service integration with other bank services, and
Attitude of customers to new services/products.
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Environmental Characteristics
Political stance and their impact on the industry,
Impact of new technology and trends,
Impact of social attitudes, and
Economic dynamics and its impact on the
industry.
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Demand
Embryonic
Growth
Shakeout
Time
Maturity
Decline
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Bargaining
Power
of Lenders
Competitive
Rivalry
Bargaining
Power
of Customers
Threats of
Substitute
Services
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Source: Adapted from M E Porter, Competitive Strategy (1980)
C
O
M
P
E
T
I
T
I
V
E
S
C
O
P
E
1.COST
LEADERSHIP
Differentiation
2.
DIFFERENTIATION
Broad
Target
3 (a) COST
FOCUS
Narrow
Target
3 (b)
DIFFERENTIATIO
N FOCUS
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Cost Leadership
This can be achieved through market leadership, or from
economies of scale (e.g. with high sales and aggressive costs
control).
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Differentiation
This is where a bank seeks to be unique in the financial
services sector by producing a product/service, delivery
system or image that is distinctive from its competitors.
Differentiation is only successful if the customers perceive
the difference.
Banks would tend to use marketing slogan such as:
Islamic banking for everyone Bank Muamalat
As you need change we progress with you - SBB
Progressive, professional & friendly - BIMB
Excellence is our commitments - PBB
Cost Focus
While the cost leadership and differentiation strategies aim
at a broad target, the focus strategies aim at a narrow target.
The bank would normally select a target market (s) & tailors
its strategy to the specific need of the target market (s).
(e.g. select a quoted MNCs as its target market, and aim to serve them
to the virtual exclusion of other target markets).
Differentiation Focus
This approach can be described as finding a niche in the
market place and developing services that matches the
niche market.
If the target market is too small, the bank may be left with60 a
service menu that is not profitable.
Product
Price
People
Place
Promotion
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Product/Service
This concerned with the features of the bank products, and
any option available to the customer.
(e.g. bank lending would include the term of loans fixed or variable
rate and option to switch from variable to fixed rate or vice versa ).
Place
Where the product or service is being made available to the
customer, or how can the customer obtain the service.
(e.g. branch network, ATMs, Internet banking).
Price
This refers to the interest rates offered to depositors and
borrowers, bank charges, commissions for services.
Promotion
It is concerned with advertising, direct sales, tele-marketing,
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internet, personal visits to the customer.
People
In view of the heavy competition, banks expect their staff to
take a pro-active selling or customer service role.
In fact, bankers are more sales persons these days than two
decade ago.
It requires training or re-training and in many cases a
profound cultural change in the bank as a whole, as people
adjust to new selling roles.
In the marketing of financial services, it is imperative that
the staff (people) takes the centre stage in order to achieve
success.
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Relationship Dev
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Competitor Analysis
Existing lead bankers,
Other bankers.
Advisors
o Accountants,
o Lawyers,
o Consultants
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Internal factors
marketing objectives,
marketing mix strategy,
costs involved, and
organization for pricing.
External factors
nature of the market & demand,
competition, and
LePEST
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Skimming Pricing
This involves setting a high initial price for the product/
service so as to just skim the cream of demand for the
product/service. It is especially suitable for new products
because:
(a) new products are less affected by price until the
competition arrives,
(b) a high initial price many help the product gain an
image of prestige and quality,
(c) a high initial price often produces more revenue in the
early days, thus bringing in funds to finance expansion
into larger markets,
(d) there are sufficient buyers to pay the high price,
(i.e. demand is inelastic), and
(e) a skimming price can be means for testing demand.
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Penetration Pricing
This the opposite of skimming pricing; it sets a low price in
order to capture a large share of the market quickly.
This is a valid policy if one of more of the following
conditions apply:
(1)The intention is to capture a large share in a mass market,
(2) Strong competition will emerge soon after introduction,
(3) When the market appears price sensitive, and
(4) Substantial economies in production, and/or, distribution
costs can be achieved with a large sales volume.
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Break-even Pricing
Such a pricing strategy speaks for itself break-even where
the product/service sold does not realized a profit or loss.
Both the fixed and variable costs are taken into account
when such a price is determined by the management.
One would ask, this is not in line with sound commercial
practice?
This strategy can be used by management to adjust the price
to fit in with expected demand and customer sensitivity
until a price is arrived that fits the target sales and equally
produces the desired profit result.
Unless, this practice is closely monitored by the marketers
and report to the management the bank can loose a lot of75
money within a short period of time.
Relationship Pricing
This is particularly important when a bank is trying to deal
with the corporate clientele and high net worth individuals.
In order to cross-sell other services, other prices may be
adjusted downwards in order to keep the business, while
increasing the profits overall from these customers.
It is an important development that the management of a
bank must be able to track down the trend in the revenue
generation process.
Otherwise, the bank will be placed at a serious disadvantage
which can cost the shareholders very dearly.
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Loss-leader Pricing
The term loss-leader means that you need to sell one
particular product at loss, which is necessarily linked to
other more profitable products/services.
This is not a bad strategy, subject that the marketing team
together with the management team are in control of the
entire campaign.
In the case, a bank would know that it is operating a service
at a loss, but on the other side, it provide the bank with the
opportunity to cross-sell other services.
The loss-leader service would be usually a service that is
not mutually exclusive (i.e. standing on its own).
This strategy resembles buy one item- get one free
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Competitive Pricing
It is absolutely crucial that when a bank is considering its
marketing plan, which is embodied in the strategic plan,
the various pricing strategies are considered.
Customers normally would base their buying decisions after
considering all the built-in features including the price.
The typical psychological behaviour I will buy it if the
price is right. Financial services marketing is not different
from the other commodities.
If the market is fiercely competitive, then the bank may have
to price its products/services at the price that the market
is expected to bear.
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Differential Pricing
What does differential means? It means to be different!
Different from whom? Externally, different from your
competitors, and internally, different from service-service.
Internally, certain methods of conducting business
transactions are cheaper for the bank & customers.
It encourages customers to move away from voluminous
payment of say salaries by cheques, but by means of
electronic transfer.
It is less expensive for the bank to handle thousands of
salaried payments electronically, than by cheques due
to the time involved.
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