Topic 11

Bank Marketing Plan

Introduction

 Planning ensures that an organization’s marketing activities are

consistent with its objectives, capabilities, and the needs of the
marketplace.
 Effective planning must establish targets, identify how and when
those targets are to be achieved, and establish who will take
responsibility for the relevant marketing tasks.
Strategic
marketing  A strategic approach to
marketing in the financial
services sector is understanding
consumers, deciding how best to
respond to their needs and
identify how to outperform key
competitors
Strategic
marketing A good marketing strategy will:

• Identify specific objectives that the

organization wishes to achieve
• Commit resources to help achieve
these objectives
• A thorough evaluation of the
marketing environment
• Aim to match environmental
opportunities and organizational
capabilities
• Focus on the delivery of superior
value.
Developing a strategic marketing plan

Strategic planning is defined as:

“The managerial process of developing and maintaining a viable
fit between the organization’s objectives and resources and its
changing market opportunities. The aim of strategic planning is
to shape and reshape the company’s business and products so
that they combine to produce satisfactory profits and growth.” --
Philip Kotler (1994)
STRATEGIC
MARKETING
PLAN
Mission and objectives

Mission Statement
 Defines the area of business in which it operates and
defines it in way that will give focus and direction.
 To outline the goals of the organization and identify the
ways in which the organization will achieve those
goals.
Situation analysis

 Marketing plan requires a thorough analysis of both

the external and the internal environments.
 This analysis will help the organization to meet
customers’ needs more effectively than the
competitors, and to make the most of its available
resources.
 Analysis such as PESTEL(E, new) analysis, a five-
force analysis, and SWOT analysis provides essential
input to a good marketing plan.
PESTEL Analysis
• A PESTEL analysis or more recently named PESTELE is a framework or tool used by
marketers to analyse and monitor the macro-environmental (external marketing
environment) factors that have an impact on an organisation. The result of this is
used to identify threats and weaknesses which are used in a SWOT analysis.
PESTEL stands for:
•P – Political

•E – Economic

•S – Social

•T – Technological

•E – Environmental

•L – Legal

•E - Ethical (NEW)
Political Factors
-All about how and to what degree a
government intervenes in the economy:
government policy, political stability or
instability in overseas markets, foreign trade
policy, tax policy, labour law, environmental
law, trade restrictions and so on.
-Political factors often have an impact on
organisations and how they do business.
-Organisations need to be able to respond to
the current and anticipated future legislation,
and adjust their marketing policy accordingly.
Economic Factors

-Have a significant impact on how organisation does business

and also how profitable they are. Factors include – economic
growth, interest rates, exchange rates, inflation, disposable
income of consumers and businesses and so on.
-These factors can be further broken down into macro-
economical and micro-economical factors.
-Macro-economical factors deal with the management of
demand in any given economy. Governments use interest rate
control, taxation policy and government expenditure as their
main mechanisms they use for this.
-Micro-economic factors are all about the way people spend
their incomes. This has a large impact on B2C organisations in
particular.
Social Factors

-Also known as socio-cultural factors, are the areas

that involve the shared belief and attitudes of the
population.
-These factors include – population growth, age
distribution, health consciousness, career attitudes
and so on.
-These factors are of particular interest as they have
a direct effect on how marketers understand
customers and what drives them.
Technological Factors

-We all know how fast the technological

landscape changes and how this impacts the
way we market our products.
-Technological factors affect marketing and the
management thereof in three distinct ways:
New ways of producing goods and services
New ways of distributing goods and services
New ways of communicating with target markets
Environmental Factors
They have become important due to the
increasing scarcity of raw materials, pollution
targets, doing business as an ethical and
sustainable company, carbon footprint
targets set by governments (good example
where one factor could be classed as political
& environmental at the same time). These are
just some of the issues marketers are facing
within this factor. More and more consumers
are demanding that the products they buy are
Legal Factors
-Legal factors include - health and safety, equal
opportunities, advertising standards, consumer
rights and laws, product labelling and product
safety.
-It is clear that companies need to know what is
and what is not legal in order to trade
successfully.
-If an organisation trades globally this becomes
a very tricky area to get right as each country
has its own set of rules and regulations.
Ethical Factors
-The most recent addition to PESTEL is the
extra E - making it PESTELE or STEEPLE. This
stands for ethical, and includes ethical
principles and moral or ethical problems that
can arise in a business.
-It considers things such as fair trade, slavery
acts and child labour, as well as corporate
social responsibility (CSR), where a business
contributes to local or societal goals such as
volunteering or taking part in philanthropic,
activist, or charitable activities.
Big brands often take part in CSR - examples
include:
-Innocent's 'big knit' campaign creating hats for
their drinks to raise money for Age UK

-McDonalds' youth programme to provide pre-

employment training and development

-Barclay's Digital Eagles programme which provides

training on coding and information on digital skills
for staying safe online & improving confidence
Situation analysis

The SWOT analysis

 Ensures that opportunities are not overlooked and
choices are made that play to the company’s
strengths.
 The quality of the SWOT analysis is a function of the
quality of the Situation Review.
SITUATION ANALYSIS
Strength: The organization’s assets, capabilities
and competencies that represent a relative
competitive strength
The search for competitive advantage calls for
the matching of external opportunities with a
company’s relative strengths.

Weaknesses: areas of relative competitive

weakness. Such features render the company
particularly vulnerable to external threats.
Marketing objectives

 Is intermediate outcomes which will lead to the organization

achieving its corporate objectives: should be clear, measurable,
realistic and time-limited.
 It is essential to ensure that they are derived from and will
contribute to corporate objectives.
 E.g.: if corporate objectives emphasize expansion, then
marketing objectives may be specified in terms of growing
market share or sales volume or sales value.
Marketing objectives

Example 1: To achieve a 12.5 per cent increase in volume sales

of new personal pensions during the budget year.
 A sound objective, as it specifies a measurable outcome (i.e.
12.5 per cent growth in sales), qualifies that it concerns
personal pension sales volumes and specifies a timescale for
achievement.
Marketing objectives

Example 2: To increase pension sales by year end.

Example 3: To promote personal pensions through the branch
network.
Example 4: To re-price the personal pension product to
improve competitive rating.

Is the objective valid? Why?

Marketing objectives

To qualify as a valid marketing objective, the following

minimum conditions must be satisfied:
i. The desired outcome must be specified
ii. The outcome must be sufficiently well-qualified to
eliminate ambiguity and facilitate precise
measurement
iii. A specific quantum of outcome must be proposed
iv. The timescale for achievement of outcome must be
specified
Marketing strategy

The main component of a marketing strategy is often described as

the STP (Segmentation, Targeting and Positioning) process:
1. Segmentation involves identifying the different groups
(segments) of consumers that exist in the market, and
understanding their wants and needs
2. Targeting involves evaluating the attractiveness of different
segments, choosing which ones to target with the
organization’s products and services
Marketing strategy

The main component of a marketing strategy is often

described as the STP (Segmentation, Targeting and
Positioning) process:
3. Positioning involves identifying the organization’s
competitive advantage, the way in which it can create
value for customers, and how this offer should be
presented to customers.
Implementation

 Concerned with how the marketing plan is put into

practice.
 Timescales should be identified, and some
consideration may also be given to contingency
planning.
 Budgets need to be produced on an accurate and
defensible basis. For example, it may be easy to
identify the total cost of a direct-mail campaign, but if
cost per individual contacted and cost per sale are
ignored, resources may be badly allocated.
Implementation

 The plan should make it clear where responsibility and

accountability lie for the different activities within the plan:
ownership for a particular task should always be sought,
appraisal system and performance review.
 Internal marketing deals with the way in which an organization
manages the relationship between itself and its employees at all
levels. To ensure that staff understand the product itself and
believe in what the organization is trying to do.
Tools for strategy development

 Growth strategies ◦ Selecting the product portfolio

 Market penetration  Matrix-based approaches
 Market development  The product lifecycle
 Product development
 Diversification
Tools for strategy development: ANSOFF
MODEL
Tools for strategy development

Market penetration
 Trying to sell more of the existing products/services in
the existing market (existing customers)
 An organization may try to persuade existing users to
use more, or non-users to use, or to attract consumers
from competitors.
 More appropriate when the market still has room to
expand.
Tools for strategy development

Market Development
 Trying to identify new markets for its existing products.
 This strategy is associated with expansion into new
markets geographically.
 E.g.: American International Group (AIG) became
the first foreign insurer to obtain a license to
operate in China.
Tools for strategy development

Market Development
 Deregulation
 E.g.:The Glass-Steagall Act prevented an expansion into
other domestic markets, so Morgan Stanley grew primarily by
overseas expansion
 E.g.: Following its conversion from building society to bank,
the UK-based Alliance pursued a market development
strategy by expanding its banking services into corporate
markets.
Tools for strategy development

Product Development
 Developing related products and modifying existing products to appeal
to current markets.
 E.g.: Initially, American Express focused on money orders, travellers’
cheques, and foreign exchange. In 1958, American Express issued its
first charge card. Subsequently, the company also launched credit cards,
targeting both new customers and existing charge-card customers.
Tools for strategy development

Diversification
 More risky strategy, as it is moving into new products and new
markets.
 The development of bancassurance represents a form of
diversification as established banks move into the provision of
insurance-related products.
 Traditional banks to offer Islamic banking products.
 How to move into new markets with new products or services,
increase your sales with your existing customer base as well as
acquisition.
 Matrix-based approaches
Tools for  Require a classification of
products/business units
strategy according to the
development attractiveness of a
particular market and the
strengths of the company
in that market.
 The appropriate strategy is
determined by the position
of a product in the matrix.
Tools for strategy development
BCG Matrix-based approaches
 Tools for strategy development
BCG Matrix-based approaches
The question mark
 Has a small market share in a high-growth industry.
 If future market growth is anticipated and the products are
viable, should consider increasing marketing expenditure on
this product. Otherwise, consider to withdraw the product.
 Tools for strategy development
BCG Matrix-based approaches

The star
 Has a high market share in a high-growth industry.
 Has the potential to generate significant earnings currently
and in the future.
 Still require substantial marketing expenditures to maintain
this position
 Tools for strategy development
BCG Matrix-based approaches

The cash cow

 Has a high market share but in a slower-growing market.
 Product development costs for the cash cow are typically
low and the marketing campaign is well established -
contribute to overall profitability.
Tools for strategy development
BCG Matrix-based approaches
The dog
 Represents a product with a low market share in a low-growth market.
 The product well established, but it is losing consumer support and may
have cost disadvantages.
 Strategy: to consider withdrawing this product unless cash flow
position is strong or cut back expenditure and maximize net
contribution.
Tools for strategy development
GE Matrix-based approaches
Tools for strategy development

GE Matrix-based approaches
Offensive strategies
 Invest to grow: involves marketing expenditure to grow market share
or even to grow the overall market: penetration strategy
 Improve position: involves investing resources to enhance the value
offered to consumers relative to the value offered by competitors:
product development strategy
 New market entry: is effectively equivalent to market development
and diversification strategies.
Tools for strategy development

GE Matrix-based approaches
Defensive strategies
 Project position: has a currently strong position in an attractive
market, aim to discourage new entrants and limit the expansion
potential of other competitors.
 Optimize position: growth is slowing down, focus on maximizing the
return on marketing investment: focus on profitable customers,
persuade less profitable customer and controlling marketing
expenditure
Tools for strategy development

GE Matrix-based approaches
Defensive strategies
 Monetize: more aggressive version of optimize, and focuses on
maximizing cash flow without preparing to exit from the market.
 Harvest/divest: involves maximizing cash flow from a product
prior to exiting the market. If no opportunity to maximize cash
flow, then would prefer an early market exit.
Tools for
strategy
development

The product
lifecycle
Tools for strategy development

The product lifecycle

1. Introduction
 A period of slow growth and possibly negative profit
 Cash flows are typically negative and the priority is to raise
awareness and appreciation of the product, emphasis on
promotion.
 Tools for strategy development
The product lifecycle

2. Growth
 Sales volumes increase, the product begins to make profit
 Improvements in features, targeting more segments, or increased
price competitiveness.
 The new service will begin to attract competition
 Tools for strategy development
The product lifecycle

3. Maturity
 Sales growth is relatively slow, the marketing campaign and
product are well established.
 Competition is most intense at this stage, may need to consider
modification to the service and the addition of new features
 Tools for strategy development
The product lifecycle

4. Decline
 Sales begin to drop away noticeably, leaving management with
the option of withdrawing the product entirely – or at least
withdrawing marketing support.
 In the financial services sector product withdrawal may be difficult,
as some products (such as life insurance) cannot simply be
withdrawn because some customers will still be paying premiums.
 Competitive advantage

Michael Porter suggests that to compete effectively, an

organization must focus either on low costs or on differentiation

Three broad strategic options by Porter:

• Cost leadership
• Differentiation leadership
• Focus/nicheing
Competitive advantage

Cost leadership
 Trying to be the lowest-cost producer, usually by concentrating
on providing relatively standardized products.
 Typically requires up-to-date and highly efficient service delivery
systems.
Competitive advantage

2. Differentiation leadership
 Trying to offer something that is seen as unique and
distinct.
 Protect the firm from its competitors, the threat of entry
and substitute products.
Competitive advantage

3. Focus/nicheing
 This strategy uses either costs or differentiation, but
concentrates on specific segments of the market –
market niches.
 The aim is to identify parts of the market with
distinctive needs which are not adequately supplied by
larger organizations.
 Producing highly customized products for very specific
consumer groups.