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You are the business manager of a UK retail bank. You just convinced your CEO to launch an "online direct saving interest bearing product" in UK market. Your CEO likes your idea and asked you to compose a detailed marketing plan for this product.
A successful example of an European retail bank is Lloyds TSB. It's traditionally considered one of the big four clearing banks. Today it has more than 8.5 million personal customers and 950,000 small business accounts.
Online banking is the easy and convenient way of managing your finances or to keep the record of financial matters. For example you can pay your mobile bill in the middle of the night or to keep update of your record even on the mobile phone. Some of the benefits using online banking are access to their bank accounts 24 hours a day, 7 days a week and can keep a close eye on their account balances, print account statements, pay bills, transfer funds, track purchases and schedule their frequent payments.
To achieve the goals of the marketing plan, the bank must take into account all aspects of the marketing mix. By redesigning the product and shifting to the speedy and secure online direct saving accounts, the bank will have the potential to increase its sales to the target audience. Competitive pricing and interest rate is a key issue. Proper placement contribute towards consumer awareness. Promotion in business media channels is the best way to increase the product awareness.
TASK1 EXECUTIVE SUMMARY
To implement the above scenario I have chosen LTSB. It is the acronym of Lloyds Trustee Savings Bank. The Lloyds TSB brand was created in 1995 by the merger of Lloyds Bank and the TSB Bank. It offers the following services
- Personal banking
- Business banking
- Private banking
- Corporate markets
- International banking
- Insurance (online this operates under the name Screen trade)
The goal of this business plan is to provide the most innovative online direct saving interest bearing product to its customers in the UK. Following market plan aims to introduce online direct interest saving product in the banking industry.
This report is based on the research on online direct interest saving product. It covers three functional units of the business which are Finance, Marketing, and Operations. We discuss the current situations of these functional units and their implication to the future. The reports conclude with suggestion to capitalise on market and achieve its long- term goals.
Consider that over the past five years college tuition rates have jumped an average of 6.0% annually, according to the College Board. That's about twice the general inflation rate. Should rates keep gaining at that pace - which some experts predict - in 18 years, four years of private college education will come with a stunning 90,000 price tag. Meanwhile, the current interest rate (which is fixed for 20 years) on 4.5%. (Rates are tied to the 10-year Treasury and are adjusted for new issues every six months.) Even if interest rates were to rise substantially on issued over the next few years, the chances of catching up to tuition would be slim.
20% of the UK market consists of people depending on their pensions and savings they had made during their professional life (Gupta, 2001). Bearing this research in mind this particular product target people who are computer literate and depending on saving.
TASK 2 PRODUCT & TECHNOLOGY ANALYSIS
IT is the greatest innovation of the 20th century no business at this age of time cannot survive if it not effectively implements e-Commerce as a medium to go directly to customers.
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas goods and services to create, exchange and satisfy individual and organizational objectives .(AMA, 1985)
The high interest deposit market is undergoing rapid change, driven by competition and technology. Online savings products have allowed a range of new players to enter the market, and have forced interest rates upward. The currently turbulent financial markets have sparked renewed interest in deposits, and so the high interest deposit market is set to continue being very competitive. Online banking made managing banking business even easier for consumers, as well as enabling new competitors to enter the market. Foreign banks, previously hampered by their lack of branch coverage, could now compete with the major Australian financial institutions. At the same time that lenders have refocused their efforts to attract deposit customers and become more risk-averse, consumers have become more cautious as a response to the uncertain financial outlook. A shaky stock market has helped shift consumer focus toward deposits. It is thus clear that both supply and demand for deposit products is rising.
TASK 3: SWOT ANALYSIS
An organization's survival is dependent on its alertness to its environs and the developing trends and changing economies and its adaptability to change with the same. Opportunities for organizational success may be enhanced by developing strategic marketing changes.
The SWOT Analysis would analyze and evaluate environmental factors that may optimize or diminish the desired outcome of this project.
- Pay electronically, fast & efficient
- Send one-time or recurring payments
- Online salaries or online transactions
- Less time consuming
- Social Engineering for the online card details
- Phishing about the card details.
- Password Recovery when the banks are closed
- To avoid the social engineering of the online cards I would recommend never give the full card or online details to anyone. If something's strange call the customer service. Automated password recovery with advanced options like self D. O. B, card details, Mothers maiden name and security question with specific algorithm where a=d, b=e, c=f.
- High success rate as everything dealt online
- Good interest rate and good discounts when pay through the online direct debit secured services
- Data Protection and Backup
- Online & Telephone Banking Information Leakage
- Misuse of personal card information either for shopping or paying bills and few more.
- To control the above threats I recommend not allowing the flash drives or anything related to USB in the bank to avoid companies Data leak. Always maintain good backup because we couldn't predict when things could go wrong. To avoid Online, Telephone Banking, information leakage and misuse of personal card information one must always change the security questions once in a fortnight and so on.
TASK 4 MARKETING RESEARCH
Required Information: Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.
This product is to be developed to show the practical implementation of the online direct saving interest bearing product. To implement this scenario I would select the Lloyds TSB as the Retail bank because it is one of the most popular banks in United Kingdom which provides most of its services economical that suits rich class, upper middle class and lower middle class citizens.
As my product is completely related with the accountancy I would select the Quantitative research method. It is very well defined as "a formal, objective, systematic process in which numerical data are utilized to obtain information about the world".
There are different types of data collection techniques in Quantitative research method. They are as follows:
- Structured Interviews
- Overt / covert observations and
- Desk based research.
As per my research the project is well suited with statistical analysis. In my product it's not essential to frame questionnaires and arrange structured or unstructured interviews. So, the appropriate method for my product is desk based research.
I've also done the brief research, read significant books, journals, previous products on the same topic and watched videos from the official websites to develop this product.
As per my knowledge the strengths of desk based research are:
- Easy to extract the knowledge from the websites
- Quantitative desk based research is economical when compared to other methodologies I
- t is time effective and few more.
Some of the weaknesses of desk based research are:
- The documents or consequences might be aged
- The consequences might be erroneous
- The sum of information accessible may not be enough.
In conclusion of this task I would say, by researching on methodology, data collection methods I have gained expert knowledge to analyze, design and develop the product.
Students in the age between, 18-35 would be our target audience. There are numerous ways that males in the age range of 18-34 gain information about a product. Some of these include recommendations from friends, demonstrations (such as at college and supermarkets), sporting events, magazines, flyers, television programs, and most importantly, email and web usage.
In this age group, the Internet is seen as a necessity and part of everyday life. They use the Internet in both work and personal atmospheres. Online banking, shopping, and product researching are all common practices in this age group. By improving its company website and utilizing online resources, Lloyds TSB will be able to more effectively market its products to 18-34 year old.
The Lloyds TSB Bank (the "Bank") introduced its online direct saving interest bearing product in the year of 2009, and since then, the online direct saving market has grown severely competitive. Direct competitors such as ING Direct, HSBC, Barclays and others currently have similar products on the market. With its 47 percent market share in the online services, Lloyds is leading the way but it is difficult to predict what the future holds.[i]
Lloyd's present market strategy focuses on an undifferentiated market. In order to boost sales and increase profits, the bank should direct its attention toward a concentrated market. Lloyds should build a marketing plan that reaches out to this market segment. This report will describe a marketing plan designed to reach such a group and will include how to reposition the product as well as provide measures for how successful the plan is after its implementation.
Products Marketing Strategy
The company's unique selling proposition for online direct saving interest bearing product is its security, authorisation and excellent customer service.
Its target is to provide highly secured transactions and password recovery using mother's maiden name and advanced computer algorithms.
Its most important benefit is one must not have to be a customer of Lloyds TSB to open an online account, all you need to do is register to apply for an internet banking account.
As per my opinion the following marketing methods or advertising strategies would play a vital role for the success of the product.
Direct mail advertising
Banner ads and few more.
To effectively manage the performance, measurement strategy is significant which encompasses three simple steps to performance improvement: the why, what, and how.
Why we need it? To identify the goals.
What is it needed for? To define the portfolio of metrics and to achieve them.
How is it implemented? To outline an implementation plan to make it part of our ongoing business process.
Experts believe that there is not room for the current multitude of banks in U.K, and that these will eventually be whittled down to three or four major banks, with the others absorbed or restructured to focus more on other sectors. This also represents an opportunity for Lloyds to increase their market share. Along with this, some restructuring of the industry's regulatory system will be required.
In the longer term, trend growth may itself slow gradually as the big banking sector mature. The banking sector within Europe is immature relative to that of the US. The sector accounts for only around 5% of all intra - European capacity, though the share is much higher in the UK domestic market. Further strong growth is expected over the next 2-3 years as new operations start up, and new destinations are added to the existing services networks. However as the UK market becomes saturated, these are likely to focus their development at continental market. The experience of the US market suggests that deregulation will be followed by industry consolidation. So far there has been limited progress in this direction but many are viewing the current crisis as the catalyst necessary to completely restructure the European banking industry
TASK 5 IMPLEMENTATION
Implementation of online direct saving interest bearing product is carried out after an analysis of needs, where the following are covered:
- Define or open the online banking system.
- Enter the online ID and password
- If the ID or password is incorrect thrice then the ID is blocked
- To reopen the ID visit the local bank or go through the secured process
- Automated Telephone system
- Manual Customer service
For both the above procedures the steps would be as follows:
- Full Name of the customer
- Banking details
- Date of Birth
- Security Questions (Computer Algorithms)
- Mothers Maiden Name
Note: If any of the above step is incorrect the customer has to visit the bank else the online product would be blocked.
If the ID is correct happily proceed the transactions or check the statements and so on...
Human resource is concerned with the "people" dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true regardless of the type of organization - government, business, education, health, recreation, or social action. Getting and keeping good people is critical to the success of every organization, whether profitable, or non-profitable, public or private. Those organizations that are able to acquire, develop, stimulate, and keep outstanding workers will be both effective (able to achieve their goals) and efficient (expending the least amount of resources necessary).
TASK 6 Controls and Measurement
To assess the success of the marketing plan, it must be evaluated on both a long and short term scale. Within the first two months of the project launch the Company can begin to measure its success by gathering information on product awareness.
TASK 7 Financial Summary
From the financial aspect of the plan marketing cost can be divided into three phases:
- If the product will not come to expectation so we have some reserve to overcome that gap.
In the current scenario Lloyds has more than 7.6 million personal customers and 940,000 small business accounts, so we would be looking for 3 million people as our target. Even if we attract half of our target that would cover our initial cost. Moreover, it would probably be enough to stay in the market and generate profit.
If 3 million people open the account with the deposit of 100 pounds that would be 1 billion pounds, bearing this fact in mind that competition is very less and options are very minimum this is a possible target.