You are a business head of UK retail bank. You just convinced your CEO to launch an “online direct saving interest bearing product”. Your CEO has loved your idea and asked you to write a detailed marketing plan for this product.
FERGUSON’S NET BANKING:
Net banking is an Internet banking portal offering a simple, suitable and secure method of accessing bank accounts on the Internet. It’s never been so easy to access and manage your finances in a secure, real-time, online environment; Anywhere, Anytime. Using net banking, the customers have 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 at the touch of a button and much more
EXECUTIVE SUMMARY
The online direct saving interest bearing product’s goal is to provide the most innovative services to its customers. The following is a marketing plan with the aim to increase its market share in the online direct saving interest bearing category.
So we have made plane that our bank will charge less rate of interest which will helpful for our account holders. Our product will compete the market because market is volatile. As a marketing research I have measured my product on the marketing mix. I have followed the rule of 4Ps.
MARKETING MIX:
Product: Our product is online direct interest saving product which may gives relaxation to our customers from highly rate of interest rate from other online products. This is especially for our business account holders who have highly charged from other financial institutes and banks. Our product is online services for our account holders who have business account they can take benefits with less rate of interest, and it would be depend of norm of transactions.
Place: it is important to place our product in market where we can compete the market easily. Our product is online direct saving interest bearing so our market place is online.
Price: we are giving online account services so it is interest bearing account service. Our product price is an interest rate which is flexible.
Promotion: we will promote our product by marketing and advertising.
Situational Analysis
One of the financial institute’s leading products is an online direct saving interest bearing product, a product in the Nondurable online services. This is a highly competitive industry with the threat of many substitutes. The main competitors to the banks are HSBC, Barclays, Lloyd TSB and others.
Customer Segmentation
This marketing plan will focus on the needs and wants of business account, saving and current account holder from ages over 18 to 65. Currently, Ferguson targets its online interest bearing product to an undifferentiated market. By shifting the focus to business, saving and current account, Ferguson can increase its market share. Both of accounts are looking for speed and convenience service when purchasing online products also. The functional and psychological benefits as well as the level of involvement when doing transaction and purchasing must be considered when developing a successful marketing plan.
Marketing Strategy
To achieve the goals of the marketing plan, Ferguson must take into account all aspects of the marketing mix. By redesigning the packaging to show that it is safe for the use of many online direct saving -oriented products such as electronics, Ferguson will have the potential to increase its sales to the target audience. Competitive service is a key issue in maintaining current position in the online direct saving market. Placement is also a main factor that contributes to online transaction awareness. By placing the online direct saving into transaction of accounts, Ferguson will be able to easily reach these new account holders.
Conclusion
By focusing on a concentrated market segment rather than a large undifferentiated market, Ferguson will have the potential to increase its sales and market share. Successful implementation will be demonstrated by raising online service awareness and will be measured by surveys in both the long and short runs. It is important to keep in mind that the largest account holders group of Ferguson is currently financial institute, and therefore, they must not be alienated in the process of carrying out the market plan. After an aggressive two to three week advertising approach, the Company hopes to have a large following of business, saving and current accounts that will remain loyal to its online services.
MARKETING STRATEGY FOR FERGUSON
The Ferguson Company (the “Company”) first 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, Ferguson is leading the way but it is difficult to predict what the future holds.[i]
Ferguson’s present market strategy focuses on an undifferentiated market. In order to boost sales and increase profits, the Company should direct its attention toward a concentrated market. Ferguson 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.
Repositioning
As said before, Ferguson currently has an undifferentiated market for its online direct saving interest bearing product. Online products are necessary for everyone, but by raising awareness in a particular group, the Company has an opportunity to increase sales. Online direct saving accounts within this category have various levels of education, income, and interests. However, they have common ground when it comes to the need for convenience and speed.
Product
Ferguson has a high brand equity that can be seen either as an advantage or disadvantage. It is advantageous in that online account holders have learned to trust the name, and they have also connected its image with services. One downside is that Ferguson is well known for online direct saving and is often overlooked when it offers new products. The Company should stress these benefits within the new marketing plan. Offering is also a very important part of the product aspect within the marketing mix. Aesthetically, it deals with the initial way the product is perceived by the online account holders. Especially relevant to this concept is stressing the uncommon uses of this product, such as with electronic items
Price
Ferguson maintains competitive rates for its online accounts. Online per business transaction for 0.90%. The Company should continue to open the accounts with affordable rates and should take precautions to remain competitive with rival brands. It is important to keep in mind, though, that clients also “prefer to buy products they think are a good value for the money, typically buying more higher-priced items than customer do.”[ii] Even though Ferguson may have a higher priced item, brand equity works as an advantage in this situation.
Place
Because the goal of the marketing plan is to gain online transaction awareness, product placement is one of the most important aspects of the marketing mix. Keeping this in mind, it is important to realize that changing the developed process is irrelevant and unnecessary to the success of this plan. Instead, there is a high importance placed on getting the product known within the market so that the Company can better reach the target customer.
Promotion
In the year 2009, Ferguson spent �456 million on advertising expenses. This figure showed a �108 million increase from the year 2008 and �65 million increase from 2007.[iii] With the commitment of increased advertising, there is a great opportunity to market to the target audience. Online advertisements at sports websites, sports magazines, and television sporting events are especially excellent mediums that can increase the product’s awareness in the age 20 to 70 male and female audiences. As part of the proposed marketing plan, Ferguson should implement an aggressive two to three week advertising approach that places the product in the minds of customers everywhere.
ADVERTISMENT PLAN
Sports Illustrated Magazine
Sports Illustrated Magazine is published weekly and is rated as the top selling sports magazine by Amazon.com the magazine reached 24 percent of men in the age range of 20 to 65. The effectiveness of magazine ads combined with the weekly release and coverage of our target market by Sports Illustrated is a great combination for advertising. Placing ads in two to three issues would directly coincide with the aggressive two to three week advertising campaign.
Television Sporting Events
When analyzing prices and ratings for some of the top sporting events, two events stood out above the field: the World Series and the Daytona 500. Although the Super Bowl is a great opportunity to catch a large audience, several factors do not make it an appealing way to reach the target audience. The growth percentage, 43.8 for last year, when compared to the price, �2.3 million for a 30 second spot, did not play in with Ferguson ideals of cost efficiency. By placing advertisements during these centred programs, there is great growth potential for product awareness.
Other Mediums
As part of the aggressive approach, it is important that the product be seen in other aspects of customer’s lives as well. The Company should put ads in places and in print that will be viewed in everyday life. Some of these locations include billboards, subway stations, airport terminals, sides of busses, e-mail based websites such as Hotmail and Yahoo Mail, print newspapers, and as mentioned before, point of purchase displays in stores. This will keep the product in the minds of all customers, not just the concentrated segment.
Measuring Plan Success
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 . This information can be gathered by means of online statistics using click-through ratios and surveys both online and standard mail. Measuring long term effects can be gauged by looking at company financials and sales.
Short Term
Surveys can also be instrumental in success measurement. To do these surveys we can use the following methods:
* Standard Mail:
This method is the slowest form of surveying; however, it can be the most thorough.[iv] Questionnaires can be sent out to randomly select online product that fall into the targeted market.
* Internet:
This is the fastest survey approach that can be done in several ways. E-mail surveys can be sent out to random individuals asking about product awareness and sales. Also, if an internet user clicked a banner that directed him or her to Ferguson’s website, it is possible for Ferguson to have simple single-click surveys asking simple questions about product purchasing.
A major advantage to using the internet as a medium of advertising is that its effects can easily be tracked and reviewed. Webmasters can determine both the number of impressions (the number of users who view the page with the advertisement) and click-through (the number of users who click the advertisement hyperlink). By dividing the number of click-through by the number of impressions, the Company can get the click-through ratio. This ratio can be compared to industry average of 0.4 percent to determine the banner’s success.[v]
Another form of survey can be sent out by third party collaborators. Ferguson can have survey attachments be sent out with annual domestic surveys such as the National Survey.
Long Term
To look at the plan’s success in the long run, it may be easier to look at the company’s financials. One of Ferguson’s priorities should be not alienating customers while at the same time advertising to a new male centred market. Therefore, by looking at the quarterly and annual figures of the Ferguson online direct saving account, the Company will be able to determine if there has been an increase or decrease in sales.
An example of long term measurement could be setting percentage goals for total sales. Ferguson may set a goal of a 15 percent increase during the quarter in which the plan was implemented. Ferguson must keep in mind that in order for an increase or decrease to be measured effectively, measurements must be taken beforehand as well.
Precautions while using point of sales:
Banks are watch the online transactions at point of sale (POS), to sort out if there are any uncertain transactions, for the safety of customers and risk dislike. In such circumstances you may be contacted by your bank for confirmation and evidence of transactions. You are required to confirm your genuine transactions but don’t disclose your PIN, Password etc. Such caution at both ends will bring synergy in the security of ebanking.
Advertisement Chart
SWOT ANALYSIS:
STRENGHT
WEAKNESS
OPPORTUNITY
THREAT
Internal Analysis
Strengths
- Ferguson is Illustration, discrimination on price is economically successful.
- Its being seen as an pioneering and flexible organisation.
- It has a strong e-business.
- Its work 24/7 online and phone services for customers.
Weaknesses
- Ferguson has no client preservation policy because of any physical contact and has little or no scope outside of Europe.
- Ferguson own success makes it difficult to recruit and train staff quickly enough
- Other weakness is to lose the data by internally resources.
- By cracking the PIN code and account details by Phishing site or a software.
External Analysis
Opportunities
- The current recession is constructive as people and businesses are more future-conscious.
- More full-service bank may withdraw from the regional market to focus on more profitable long-haul project.
- The student market, an important market for Ferguson grows more rapidly than the UK other market[1]
- Ferguson gives more security to its customer for affectless by Phishing or another cracking software.
- It gives opportunity to open an online account for all age group who are over 18.
Threats
- Competition is likely to make stronger, given the saturated market and the shortage of other options.
- Increased competition is likely to lead to greater difficulties in demanding incentives from communities.
- Perception of bank among general public and integrity is a big question mark after the credit crunch.
Control 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.
NATIONAL AVERAGE RATES
|
Description |
This Week |
Last Week |
|
Money Market |
0.40% |
0.41% |
|
Interest Checking |
0.13% |
0.14% |
|
Savings |
0.22% |
0.22% |
From the financial aspect of the plan marketing cost can be divided into three phases:
- Implementation
- Control
- If the product will not come to expectation so we have some reserve to overcome that gap.
In the current scenario Ferguson has more than 5.6 million personal customers and 650,000 small business accounts, so we would be looking for 1.5 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 1.5 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.
Cost Control of the product
|
In million pounds |
|
|
Development |
Max 10 |
|
Implementation |
Max 20 |
|
Advertisement |
Approx 10 |
|
Internet |
Approx 60 |
|
Direct marketing |
Max 40 |
|
sales |
Max 90 |
|
Control |
Approx 20 |
|
Deflation |
Min 5 |
|
Inflation |
Approx 90 |
|
Total cost |
285 |
|
Expected generation Profit before interest, tax and expense |
1.5 m * 100 = 1000 630 |
Projection for next 5 years
Taking this assumption that 9 to 15% increase every year which looks very much achievable looking at the level of competition and the segment of the society we are targeting. However, the level of customer service is needed to carry out this plan successfully.
Conclusion
Ferguson online direct saving product is currently in an extremely competitive market. By developing a marketing plan for a concentrated segment of the market instead of a broad undifferentiated market, Ferguson may be able to increase sales and profits.
Ferguson should reposition its online product to better meet the needs of this new concentrated market. The Company especially wants customer to view the online product as convenient and safe to use. Some suggestions for change include services, greater securities, and the implementation of an aggressive two to three week advertising approach. Once the product has been repositioned, the Company should measure its goals by evaluating them using short and long term assessments. Ferguson should continue to keep its existing market in mind and be careful.
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