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The following marketing plan forms the basis for the introduction of an innovative new strategy to extend Barclays market segment.
The analysis allows us to outline the best strategies to follow for the achievement of the bank‟s strategic goals. Attracting student and retaining will be marketed as a unique functional account while striving to reinforce the bank‟s status as the leader in innovation and successful bank product launches.
The marketing strategies initial targeted all overall student account increase of 25%. As a result, Barclays bank will increase its market share of the market, moving from third to second among the top four market leaders. The process of meeting customer needs is going on with continuous plan to re-evaluating its student proposition to ensure it relevance to the target market
This marketing plan aims to define the means of notching up Barclays current student market share by 1.5% (960,000 student‟s accounts) from Barclays current market share of 8.9%. The new Barclay‟s prepaid card that would be introduced will increase the profitability of student accounts by encouraging customers to save, hence making more funds available for further lending by the bank. The new current account package also aims at rebuilding consumer confidence towards Barclays by portraying the bank as a responsible and socially conscious financial institution. The new student account package also aims and building up Barclay‟s corporate image and branding theme of being global bank with local knowledge by introducing new products that are in line with the current economic downturn.
(See appendix 2) 3. Marketing Strategy Barclays should implement the market penetration and product development strategy by capturing current account market share from other financial institutions that have been weaken from the economic crisis. Besides that, the launch of the new prepaid card would be a
step towards product development that would be useful to counter non-traditional financial institutions that are poise to enter the current account market. The market development strategy can also be carried out at a later date by bringing the new and tested prepaid card product into other geographical markets like China and India. This would be in line with Barclays slogan of “ Now there's a thought” The advantage is good for Barclay‟s global network in more than 50 countries.  In relation to the Porter Generic model, Barclay‟s should aim at using a broad based differentiation strategy to capture market share from ailing financial institutions. (See appendix 1) COMPANY DESCRIPTION Barclays Bank is one of the leading operations in the UK financial sector with exposure to Europe, North America, the Middle East, Latin America, Australia, Asia and Africa. During the ongoing economic crisis Barclays Bank is one of the few UK operations to turn down state funding from the UK government which has ultimately given directors more control over the future direction of the company.
The history of Barclays Bank can be traced back to 1690 when John Feame and Thomas Gould began trading in Lombard Street London under the name of Goldsmith bankers. When James Barclay joined the operation in 1736 the name Barclays became associated with the company although it was not until 1896 that the company became known as Barclays bank. Like so many of the UK clearing banks trading today, Barclays Bank acquired many smaller operations over the years and extended its business tentacles into all areas of the UK and worldwide financial system.
The company has become embroiled in a number of controversial subjects such as aggressive investment trading, tax avoidance schemes and close relationships with large investors in the Middle East. However, despite worries regarding the UK financial sector Barclays Bank was one of the few self funding operations which was not forced to go cap in hand to the UK government. Many believe that Barclays Bank will emerge from the ongoing economic crisis as one of the stronger European and worldwide banking organizations trading today
SITUATION ANALYSIS INDUSTRY ANALYSIS Barclays Plc is a well known British financial services company, having its presence worldwide. Based in London, the Group is the tenth largest financial services and baking group in the world since 2010. The Group operates in over 50 countries and has assets of nearly Euro 2 trillion as of 2010. Barclays offers retail and commercial banking services, along with credit cards, investment banking, wealth managements as well as investment management services. With the acquisition of the Lehmann Brothers in 2008, and the purchase of Standard Life Bank Plc in October 2009, Barclays Plc has firmly established itself in this difficult economic time as a major banking player to reckon with. The company's latest financials were as follows: Revenues of 29,954 million in FY2009 Operating income of 4,337 million in FY2009 Net profit of 9,393 million in FY2009
The report Analysis of Barclays Bank Plc from our research is a highly comprehensive research analysis on the Barclays Bank Plc and its competitors: Bank of Ireland Deutsche Bank AG HSBC Holdings Plc Allied Irish Banks
Current Trends: DBRS Inc. (Dominion Bond Rating Service) has today confirmed the ratings of Barclays Bank PLC (Barclays or the Bank), including its AA (high) Long-Term Debt rating and its R-1 (high) Short-Term Debt & Deposit rating. At the same time, DBRS has revised the trend on the Bank‟s Long-Term debt ratings to Stable from Negative. The trend on the Short-Term rating remains Stable. This rating action does not impact the ratings of the debt guaranteed by HM Treasury, which remains at AAA with a Stable trend. See list below for all rating actions and impacted debt.
The confirmation considers Barclays‟ resilient performance throughout the crisis, its sizable global investment banking franchise, which has become a more significant contributor to overall results following the 2008 acquisition of various businesses of Lehman Brothers, and the Bank‟s strong market positions in other key businesses. Today‟s action also considers Barclays‟ improved capitalisation, its sound liquidity profile, and its ability to generate capital organically thanks to its considerable earnings capacity. Indeed, these are all key factors underpinning the rating. In revising the trend to Stable, DBRS recognises Barclays‟ stable, and in some cases, improving trends across its key businesses despite the difficult operating environment of the past two years. The uncertainty surrounding the Bank‟s ability to generate acceptable levels of earnings in the face of a slowing global economy was a key factor considered in the now former Negative trend. Profitability & future growth potential: For 2010, Barclays reported profit before tax of a very solid GBP 6.1 billion on income of GBP 31.4 billion. Compared to 2009 and excluding the gain on the sale of Barclays Global Investors (BGI), profit before tax increased 32% while income was 8% higher as compared to 2009. Earnings benefited from much lower impairment charges. By segment, Bar Cap was the largest contributor, generating profit before tax (excluding own-credit) of GBP 4.4 billion in 2010, a 2% increase year-on-year.
SWOT ANALYSIS (Strengths and weaknesses, opportunities and threats)
Strengths Barclays has a widespread global presence, allowing it to spread risk and enjoy economies of scale. The Barclays brand is well-established historically and continually promoted, for example through sponsorship of Premier League football. Barclays is particularly associated with innovation. It brought out the first credit card in 1966, and has continued to develop cards, most recently the One Pulse card combing Oyster, cashless and credit functions for London-based customers. The opening of several new flagship branches along with a refurbishment programme can be seen as an attempt to refocus on customer demands for a strong presence on the high street (see threats). Weaknesses Services provided in Zimbabwe to individuals connected with Zanu PF have generated controversy and raised questions about Barclays‟ ethical position: investors are increasingly concerned about ethics. Large bonuses for Directors have attracted unwanted attention from commentators, and it has been speculated that the bank‟s reluctance to take financing from the UK government is because that would end its autonomy with regard to bonuses. Plans to expand in Asia were limited when Barclays were outbid for ABN Amro in 2006, and alternative expansion plans have had to be adopted. The bank does not plan to pay dividends on its shares until the second half of 2009, making them less attractive to investors. Opportunities Barclays was keen to acquire some of Lehman‟s assets prior to its collapse: after the collapse, they have been able to negotiate a better deal with liquidators which also allowed them to be very selective in which parts of the business they acquired
The bank‟s strategy is to offer a full portfolio of services worldwide, providing a wide range of cross selling opportunities. Asia is still considered an opportunity for Barclays‟ expansion, and operations are being set up in a number of locations. Welfare provision has decreased in many countries because of the cost to governments, and Barclays sees self-provision as an increasing trend that it can utilize.
The court recently found that Barclays banking charges, which had been challenged legally, were enforceable, thus repayment is not necessary and charges can continue to be enforced.
Threats If the economic downturn is prolonged, acquisition of Lehman‟s assets could prove to be a mistake. Barclays has been accused of moving loss-making investments associated with the sub-prime market from its accounts to those of other investors, and there is a risk it may be sued. While offering a wide range of services provides opportunities, there is also the threat that customers may prefer to go to suppliers who present a more specialized approach. Barclays acquired a reputation for closing branches because of a high incidence of this in 2000, and competitors have been able to position themselves as more consumer-friendly through a strategy of keeping branches open. The Asia expansion is seen as risky given that Barclays are in a less strong position than banking industry leaders regarding capitalization, and this may detract investors. Competitors Barclays Bank is the fourth largest bank in UK. Its main competitors are Bank of Ireland Deutsche Bank AG HSBC Holdings Plc
To be competitive, it needs to explore change initiatives internally, devise a corporate culture to enable its staff to be competent and co-operative so that they can offer the best banking services to all its customers. Externally, it needs to be competitive by offering the best products with the lowest interest rates available for its customers. Barclay‟s communications are designed to help customers „Take One Small Step‟ to managing their money better every day. Segment trends: The current trends include targeting a particular group out of the personal customer market segments i.e student. Segment growth potential: Statistical reports anticipate a segment growth of 23.7% over the next 5 years (2016)
4. Target Market quick and efficient services to customers by using the latest Internet banking and technologies available for the banking service.
Target Market Segment identification: Banking without stress is to be introduced within the Student and Families environment.
4.1. Market Segmentation and Targeting A market segment should consist of a group of customers who share a similar set of needs and wants (Kotler. Etal, 2009) . A market segment must be accessible, measurable, large enough and profitable in order to be worth targeted by an institution. The new student card should be offered as a „naked solution‟ that all segment members value (Anderson & Narus, 1995). Ways of segmenting the market should include geographical and demographic segmentation.
The new Barclay‟s student card should be launched in the United Kingdom first before being extended into other geographical regions. A time lag of half a year would be enough to test the effectiveness of the product as a method to obtain a higher market share for current accounts. Demographic segmentation on the other hand should be focussed on age and income. Special attention should be focussed on young individuals opening their first current accounts. 4.2. Market Positioning Positioning is the act of designing the company‟s offering and image to occupy a distinctive place in the minds of the target market (Ries & Trout, 2000). Data taken from SWOT and PESTEL analysis of Barclays enables marketers to define the points-of-difference and pointsof-parity associations. Points-of-difference are attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competitive brand. In the case of Barclays, the bank is known to be a truly global bank with an international branch network. Points-of-parity are associations that are not necessarily unique to the brand but may in fact be shared with other brands (Brunner & Wänke, 2006). There are two types of points-ofparity, namely, category and competitive points-of-parity. Category points-of-parity includes Barclays being a reputable financial institution and also a bank entrusted with fiduciary responsibility. In terms of competitive points-of-parity, Barclays must be seen to „break even‟ with other financial institutions in terms of service quality. (See appendix 2) 5. Marketing Mix Marketing for financial services pose distinctive challenges to marketers because services are intangible, inseparable and cannot be inventoried. An expanded marketing mix is required to fully answer the differences between product marketing and marketing for financial services. The expanded marketing mix aims to capture the distinctive nature of financial services (Booms & Bitner, 1981). (See appendix 2) 5.1. Product The product is the heart of the firm‟s marketing strategy. Poorly designed service products that do not create value for customers are destined to fail regardless of how well the other 6 Ps are executed. The goal of the product element is to create a service concept that would offer more value to a market segment than competitors. Working to transform this concept into reality involves designing a cluster of different but mutually reinforcing elements. The product must be a means to solve a problem or satisfy a want in the market. To date, overspending is a major issue in the Western world. This is the reason why the new Barclays student card is included in the new current account package as a means to ensure that customers do not overspend by ensuring prudential budgeting of financial resources.
Unique Features: Prepaid Card Barclays will launch two prepaid cards, namely, the Barclays‟ Financial Manager and the Barclays‟ Budget Manager prepaid card. Both prepaid cards come preloaded with £10 after the customer pays the initial card issue fee. The Financial Manager is a way to manage a monthly budget by transferring your spending money from your bank account onto the card. It has an annual load limit of £15,000. The Budget Manager on the other hand has a smaller annual load limit of £2,000. The new Barclays prepaid cards would be fee-free while offering the same flexibility as a credit or debit card. The prepaid card however, would need to be loaded up with cash first before allowing its users to purchase products and services. The prepaid cards can also be used to withdraw money from cash machines. Real Time Balance Alerts Real time balance alerts will be sent to the customer‟s mobile device every time a Barclay‟s prepaid card user purchases something. This balance update will notify the prepaid card user on the amount of money spent and the amount of money left for free. Barclay may need to team up with companies like Vodafone to provide this service. Online Banking Another unique element of the Barclay prepaid cards are their flexibility in managing the customer‟s financial resources. Bank customers can access the Barclay website and set standing orders on how much money to load onto the budget manager every month as long as the funds are available in their account. Optional Savings Account Bank customers that pay more than £500 into their student account every month would qualify for the Barclay‟s Student Account Advance. Regular payments can be made through the internet or by direct standing order from the customer‟s current account to save a specific amount every month. This feature is ideal for customers with a fixed monthly income. 5.2. Price The pricing component plays twin roles for Barclays in the sense that it must be able to first attract customers to purchase the service and also generate revenue for Barclays. According to Adrian Palmer (2008), there are five main factors that influence pricing decisions, namely, profit maximisation, market-share maximisation, survival, social considerations and personal objectives.
It is unlikely that any increases in interest rates would be able to attract customers to open up new accounts with Barclays. The base lending rate that is now at 0.5% provides little room to manoeuvre for banks and other financial institutions. Adding to that is the credit crunch and declining asset prices that makes borrowing at a higher rate unattractive at the moment. The initial prepaid card issue fee should be around £10. This is in line with what competitors are charging at the moment. The catch with the prepaid card scheme is that it encourages bank customers to save. Any money that is saved is held within the customer‟s account and remains available for banks to provide further lending. This may prove to be highly beneficial to Barclays during times when raising new capital is extremely difficult. (See table 3) 5.3. Place The place element involves delivering the product element to customers through appropriate methods and delivery channels. Delivery may involve both physical and electronic channels. Failure to make a service product readily available to customers would guarantee its failure regardless of how good the service product is. The new current account package would be made readily available throughout Barclays 4,750 branch network and also through the internet. (See figure 1 & 2) 5.4. Promotion The promotion element relies on effective communications to bring awareness in the market of the service products offered by Barclays. The three objectives of the promotion element are to gain the attention of customers, provide additional information and persuade customers to purchase the product. Advertising is mass, paid communication that is used to transmit information, develop attitudes and induce some form of response on the part of the audience (Adrian Palmer, 2008). The choice of media that would be utilised includes newspapers, magazines, outdoor advertising through the Barclays football premiership league sponsorship and the internet. A sales promotion will also be carried during the first three weeks after the launch date to help stimulate customer purchase and the effectiveness of intermediaries (Adrian Palmer, 2008). Other promotional materials include press releases, posters and brochures. (See appendix 3) 5.5. People Despite technological advances, many financial services still require direct interaction between customers and bank employees. The nature of these interactions strongly influences how customers perceive service quality (Hartline & Ferrell, 1996). This is particularly true for financial services as employees are often the first line of contact with the customer.
Due to the importance of this element in the marketing mix, special attention needs to be given to the training of employees concerning the new current account package. The prepaid card concept also requires some serious attention as its aim is to show Barclays change of stance concerning the psychology of spending. Training should only be given to bank staffs that are directly involved in the new current account package. However, back office staff must also be formally notified concerning this new current account package to ensure that the entire organisation have a coherent understanding on the bank‟s products and services. Besides that, training of IT personnel must also be stressed as new information systems may have to be put in place before the launch of the new product. (See appendix 4) 5.6. Physical Evidence It is generally recognized that physical evidence can be subsidized into two components (Shostack, 1982): peripheral evidence which can be possessed by the consumer but has little independent value and essential evidence, which cannot be possessed by the consumer but has independent value. The peripheral evidence is the prepaid card itself while the essential evidence includes bank branches, cash machines, posters and brochures. (See appendix 3) 5.7. Process The process element focuses on the mechanisms by which the service is delivered, including business policies for service provision, procedures, degree of mechanization etc. It is imperative that the policies and procedures are written and tested before the launch of the new current account package. Bank personnel are to conduct a test to determine how efficient and effective front line staffs are at explaining the new current account package and setting up new current accounts. A step by step guide on how to set up a new current account and prepaid card system is to be issued to all front line staff to ensure that no confusion is to occur during the critical launch date. Besides that, front line staff should also be constantly monitored to ensure that the delivery of services occur smoothly. Customer feedback and complaints should be welcomed as they would provide the input needed to continuously improve service delivery and customer satisfaction. (See appendix 5) 6. Research Market research will be carried out before, during and after the launch of the new Barclays student account package. There are three methods for a financial services organisation to carry out its research, namely, using in-house resources, using the services of a specialist agency or a combination of the two methods. During the period nearing the launch of the new
current account package, both pre and post implementation research should be carried out by specialist agency commissioned by Barclays.
6.1. Pre-implementation stage During this stage, research should be focused on whether the market‟s current external environment matches the company‟s initial results during the first external environment analysis. Political, legal and economic elements of the external environment are likely to be very volatile in the coming days that may cause Barclays to either delay or bring forward the launch of the new account package. Furthermore, research should also be done on the company‟s corporate image and the receptiveness of market for a new product and concept during a time when the banking industry is facing heavy criticism from the public. 6.2. Implementation stage A tracking study should be carried out by the research agency during the implementation stage. The tracking study will be done through monitoring consumer‟s awareness and acceptance of the new current account package. This process should be an ongoing one during the product‟s life cycle. Tracking studies should be conducted with small groups of a target market segment. It would also be advisable to rotate the members of a group with another group to ensure that a variety of responses is noted. 6.3. Post-implementation stage Post-implementation research should be aimed at obtaining tangible results on whether Barclays has indeed managed to obtain the desirable level of market share and profitability. Another goal of the new current account package is to change the attitudes and perception of the public towards Barclays. Marketing research at this stage should also determine on whether Barclays is now perceived to be a more responsible financial institution that not only aim for profits but provide value to customers. Besides obtaining tangible results on whether marketing objectives are met, it is also important to gain feedback on customer satisfaction levels and any complains on the product offered by Barclays. This is to ensure that further improvements can be made in the future and any mistakes made would not be repeated. (See appendix 8) 7. Budget The budget to implement this marketing plan is estimated to be around £15 million. A contingency of 5% is included in the numerical calculations to ensure that some measure of volatility is covered should the promotion of the new account package proves to be more expensive than anticipated (See appendix 6)
8. Contingency Plan A contingency plan is included in the appendix to note down various responses to some of the challenges posed in these difficult times. Among the various scenarios that might occur in the future includes the failure of the prepaid card to be a practical method to manage personal finances, a severe contraction in economic activity and the failure to gain market share in the current account market. (See appendix 9) 9. Market Penetration The market penetration strategy is implemented when an organization seeks to increase market share of its current products/services. This strategy is the least risky as the organization is already equipped with the experiences, capabilities and resources to market and support its products/services. If the market is a high growth market, simply maintaining market share would suffice. However, as the market reaches the saturation stage, a new strategy must be implemented. Barclays is able to use this strategy to gain market share from competitors that have lost confidence in banks that have failed in the recent subprime mortgage crisis. 10. Product Development The product development strategy requires the organisation to develop new products for existing market segments. This strategy is suitable for organisations that have a good understanding of their customer‟s needs and wants. Existing products/services can be used as a platform for cross selling new products tailored to a specific customer base. As with market development, product development carries more risk than market penetration. Barclays could use this strategy by developing a new prepaid card product that O2 has launched recently together with its current account. The new prepaid card would signal a change in the psychology of spending among customers and would likely portray Barclays as a more responsible financial institution that does not just encourage people to spend. Porter’s Generic Target Scope Broad (Industry Wide) Narrow (Market Segment) Advantages Low Cost Cost Leadership Strategy Focus Strategy (Low Cost)
Product Uniqueness Differentiation Strategy Focus Differentiation Strategy
Differentiation The differentiation strategy requires the organisation to develop products/services that are able to deliver unique attributes valued highly by customers. Value added uniqueness of the product/service would enable the organisation to charge a premium against competitors. By using this strategy, the organisation would be able to charge a higher price with the knowledge that substitutes to its products are not easily available.
According to quickmba.com, firms that have successfully implemented the differentiation strategy usually have the following strengths:
Access to leading scientific research. Highly skilled and creative product development team. Strong sales team with the ability to successfully communicate the perceived strengths of the product. Corporate reputation for quality and innovation.
The risk to this strategy is that other companies may be able to imitate the unique characteristics of the products/services offered by the organisation and sell them at a lower cost. Additionally, other organisations that serve a smaller market niche may be able to tailor make products/services that better cater for their respective market segments. Barclays is able to utilise this strategy though developing and providing the new prepaid card along with its current accounts. As the prepaid card concept was recently launched by O2, many banks have yet to adopt it. This means that by providing prepaid cards along with its current account, Barclays is able to gain a short term differentiation advantage. Appendix 2 Table 1: Student Current Account Market Share in the United Kingdom Financial Institution Market Share (%) No. of Current Accounts (m) Details 19 12.1 4 Established Banks Llyods TSB RBSG 17 10.8 Barclays 15 9.6 HSBC 14 8.9 HBOS 14 8.9 Challenges Abbey 6 3.8 Nationwide 5 3.2 Others 10 6.4 100 64 Total Source: Current Accounts, Finance Intelligence, June 2008, Mintel Table 2: Market Segmentation Major segmentation variables for consumer markets First by countriesSecond by different geographical regions of Geographical Region the United Kingdom Under 5000; 5000-20,000; 20,000-50,000; 50,000-100,000; City or metro size 100,000-250,000; 250,000-500,000; 500,000-1,000,000; 1,000,000-4,000,000; 4,000,000 or over Urban, suburban, rural Density Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 64+ Demographic age Young, single; young married, no children; young, married, Family life cycle youngest child under 6; young, married, youngest child 6 or
Gender Income Occupation
Education Generation Social class
over; older, married, with children; older, married, no children under 18; older, single; other Male, Female Premier, Plus and Basic Accounts Professional and technical; managers, officials and proprietors; clerical sales; craftspeople; forepersons; operatives; farmers; retired; students; homemakers; unemployed Grade school or less; some high school; high school graduate; some college; college graduate Baby boomers, Generation X, Generation Y Lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, upper uppers
Appendix 3: Brief for Advertising Agency Enclosed here are the main guidelines for the advertisement brief: The Product: The new current account package would include the Barclays‟ Financial Manager and the Barclays‟ Budget Manager prepaid card. Both cards would include the following benefits:
Preloaded with £10 after the customer pays the initial card issue fee The Financial Manager is a way to manage a monthly budget by transferring your spending money from your bank account onto the card. It has an annual load limit of £15,000. The Budget Manager on the other hand has a smaller annual load limit of £2,000 Fee-free while offering the same flexibility as a credit or debit card Real Time Balance Alerts Online Banking Optional Savings Account
Target Market: The Financial Manager prepaid card would be targeted and customers with a higher net worth while the Budget Manager would be targeted at individuals with lower net worth. Ideally, the Budget Manager would also target individuals that have trouble getting qualified for credit cards due to the lack of permanent income (students, etc.). Both prepaid cards should be seen as an essential tool to help manage finances during the current economic recession happening in the UK. Advertising Objectives: 1. To raise consumer confidence towards Barclays as a responsible and secure financial institution. 2. To change the perspective of the public towards Barclays that has been previously tarnished by the turmoil happening in the financial world. 3. To increase the awareness of the public towards a new method to manage their finances and keep themselves away from debt.
4. To create the image of Barclays as a local bank with global knowledge by introducing a solution to the domestic problems in UK. Form of Communication: Above the line promotion:
Press advertisements – half a page advertisement in the national newspapers with inserted brochures Advertisement in certain magazines (Newsweek, the Economists)
Below the line promotion
Brochures and posters for UK branch network Advertisement on the Barclays website Billboard advertisements on some of the main roads Press releases
Advertising Requirements: All promotional material should use the colour and font that matches with Barclays. Advertisements should portray the new current account to be beneficial to customers as a tool to manage their finances in difficult times. Promotional material should be reviewed at least 3 months before their actual presentation to the public. A copy of the Gantt chart (that relates only to the promotional materials) should be given to the advertising company.
The marketing objectives of the new current account package
The marketing objectives include the targeted gain in market share after the launch of the new current account package together with the expected increase in profitability from maintaining current accounts. The new current account package also aims at rebuilding consumer confidence towards Barclays by portraying the bank as a responsible and socially conscious financial institution. The new current account package also aims and building up Barclay‟s corporate image and branding theme of being global bank with local knowledge by introducing new products that are in line with the current economic downturn.
The new product features (the Barclays prepaid card)
While the basic current account is in many ways similar to what other financial institutions have to offer, the new prepaid card that would be included together with new current accounts should be seen as a practical tool to manage personal finances. Being able to created standing orders through the internet would also ensure some innovativeness as compared to other competing prepaid cards.
The details on roughly when the launch of the new current account package would be
The full Gantt chart should not be open to public viewing even for internal staffs and stakeholders. Marketing plans should be revealed as least as possible in order to gain a „shock effect‟ on competitors. Furthermore, revealing marketing strategies to competitors would likely mean that they would devise ways to counter a marketing plan. However, internal staffs should be notified beforehand on the product and launch date so as to foster a more transparent and unified organisation.
The hopes and expectations of the senior management towards this new current account package
It is important that the senior management in Barclays show their support and communicate their expectations towards the new current account package. Senior management are more likely to have the credibility necessary to enhance the level of acceptance among internal staffs. Approval from the senior management is essential for a marketing plan to succeed. Appendix 5: Step by Step Procedures Enclosed here is a brief step by step guide that should be issued to front line staff in charge of helping customers open new current accounts in Barclays. Steps Details Choose your prepaid card Finance Manager Budget Manager Load up your card with cash Load your card by transferring cash from the customer‟s current account either through a bank branch, ATM or the Barclays website Utilise your prepaid card The Barclays prepaid cards are secure chip and pin cards that will be accepted like a normal Visa card almost anywhere in the world Get real time balance alerts Free balance updates would be sent to the customer‟s mobile device whenever he/she utilises the prepaid card
Step 1 Step 2
Appendix 6: Budget Explanation Table 4: Budget Item
Amount (£) Contingency (5%) 500 250
Product Costs 10,000 Product development (Staff wages) Negotiation with telecommunications 5,000 company
Training Costs Personal account managers Branch staff IT support staff Other staff
300,000 200,000 100,000 100,000
15000 10000 5000 5000
315,000 210,000 105,000 105,000
Promotional Costs Advertising agency Newspaper advertisements Outdoor advertising Brochures/Posters Bank’s cost Sales Promotion Webpage advertisement Research costs Research agency’s fee Internal research costs Total
500,000 8,000,000 3,000,000 300,000
25000 400000 150000 15000
525,000 8,400,000 3,150,000 315,000
1,000,000 50000 5,000 250
50,000 2500 5,000 250 13,575,000 678,750
52,500 5,250 14,253,750
Notes: 1. The budget does not include certain hidden costs that might be incurred when striking a deal with the telecommunications company. 2. Product development costs do not include the costs of the plastic cards to be issued by Barclays. 3. The new current account package would not require Barclays to increase its workforce as existing staffs are able to cope with the anticipated rise in new current accounts with the help of advance information systems. 4. Outdoor advertising includes big posters on billboards that may be extremely costly for Barclays Objective Details Time Period 5 weeks would be needed to finalise the Week 37 – Finalising prepaid features of the new current account package week 41 (5 card features (most notably the prepaid card). weeks ending Brainstorming sessions would be conducted to September ensure that the features included are practical 2009) and simple to use. Product development
This process involves designing the current Week 37 – account package. week 50 (14 Ways to carry out the 7Ps as effectively as weeks ending possible would be finalised during this time October 2009) interval. The new current account package would be ready to go into the next phase as soon as
inputs from the new prepaid card are obtained. Customising information systems
This stage involves IT programmers Week 51 – 42 customising information systems to suit with (10 weeks the new current account package. ending Most notably is the ability to set standing October 2009) orders to debit the new prepaid cards at the start of the month (as long as there are enough funds in the customer‟s current account). Negotiations should be carried out with Week 49 – prospective telecommunications company in week 1 (6 order to secure the „free balance update to weeks ending mobile device‟ feature. January 2010) Training and development of staff that are Week 51 – immediately concerned with the new current week 15 (17 account package. weeks ending April 2010) Support staffs are help desks staff or any front- Week 2 – line personnel that are not directly dealing with week 20 (19 the new current account package. weeks ending May 2012 The brief for internal circulation would be Week 51 (1 circulated during this time interval to ensure week ending that all members of Barclays are aware of the December new developments in the organisation. 2011) The advertising agency would be Week 50 – commissioned during this stage and week 12 (15 promotional material will be designed by an weeks ending external advertising agency. March 2012) Research concerning consumer awareness and Week 1 – acceptance, initial market perception and week 4 (4 economic research would be done by external weeks ending research company commissioned by Barclays. January 2012) Design of promotional materials should be Week 4 – ready for production. week 15 (12 Production of promotional materials by weeks ending external company. April 2012) A press conference to announce the rolling out Week 1 of the new Barclays account package. (ending January 2012) The start of promotions through the internet. Week 2 – week 17 (18 weeks ending
Negotiations: telecommunications company
Front-line training development Support training development
Notification of other personnel
Commissioning advertising agency
Launch date Sales promotion
April 2012) Week 2 – week 30 (29 weeks ending July 2012) Posters and brochures should be up on bank Week 5 – branches in the UK. week 32 (28 weeks ending August 2012) Launch of the new account package. Week 18 The start of newspaper advertising. 8 weeks of sales promotion in Barclays. Week 18 – Special counters should be set up on the first week 25 (8 month of the sales promotion. weeks ending June 2012) Research conducted on market shares, Week 18 – consumer confidence and customer week 34 (17 feedback/complaints. weeks ending August 2012)
Appendix 8: Brief for Research Agency Enclosed here is a research brief that should be sent to an external research agency to ensure that the research carried out would yield results that are relevant to Barclays. Research Preimplementation research Research Objectives Details Consumer awareness and Level of enquiries concerning the acceptance new account package. Initial market perception
A level of primary data is required to determine the initial perception of the new prepaid card as a means to manage personal finances. Economic conditions are currently highly unstable and on-going economic research is needed to forecast where the economy in the UK is during the launch of the new account package. A tracking study should be done in order to obtain primary data on consumer experiences concerning the new current account package. The collective of individuals chosen for the tracking study must be able to represent the targeted market
Research during Tracking study implementation of marketing plan
segments. Postimplementation Market share
The increase of market share in current accounts for Barclays relative to other major financial institutions. Also important is to note the profitability of current accounts using the new prepaid card. Research needs to be conducted to gauge the level of consumer confidence after the launch of the new current account package. This is essential as it is one of the objectives of the marketing plan to increase consumer confidence in Barclays. It is equally important to obtain customer feedback concerning the practicality of the new prepaid cards that were recently issued.
Appendix 9: Contingency Plans Scenario Possible Responses The launch of the new student account package may have to Further deterioration be postponed should the UK economy deteriorate at an of the UK economy unexpected rate. Economic research in the pre-implementation stage should be able to point out red flags on market conditions. Launching aggressive promotional campaigns during times of widespread uncertainty would be unwise as the public would be sceptical on the credibility of new products. Failure of product as a tool of personal finance
This scenario is highly unlikely as the new current account package should be thoroughly examined during product development stage. Adding to that is the fact that other companies like O2 have already launched their own prepaid card concept into market. Should the product fail to generate new current accounts, additional features might have to be included to increase the value of the package in the eyes of the customers. The reason for the failure of Barclays to gain market share in the current account market can be linked to economic or internal reasons.
Failure of Barclays to increase its market share in the current
Internal reasons include the failure of staff to market the new current account package. Front-line staff may have to be retrained and new promotional materials implemented in order to increase sales. Failure of gaining market share may also stem from aggressive campaigning by competitors like O2. Should this be the case, Barclays may have to pump in more resources to promote the new current account concept more effectively. Should the new account package achieve overwhelming success when times are bad in the UK, Barclays may want to consider opting for the market development strategy. Currently, China and India holds the largest markets together with high national savings rate. Extending this new concept to overseas market may prove highly profitable.
Overwhelming success of the prepaid card concept
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Appendix 1: Marketing Strategy Ansoff Matrix
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