2-The Major Problems

Choosing the appropriate target segment

Effect: It could lead to misinterpretation by
the customers. The product that is targeted
will be targeted to the wrong segment /
customers.
Cause: broad target segments. This is
because of unselected customer type.
Selecting different types of ads for nationwide launch
Effect: This will lead to more customers. Cause: receiving fewer sales, not reaching
the goal of the company.
Drafting and advertising plan that will deliver the best message to the Capital One target
segment
Effect: This will help the customers to make
better choices in regards to starting services
with Capital One.
Cause: unreached target sales, and not
having a broad customer base in Canada.
Competitive responses by retail banks
Effect: It may attract new customers, will
lead to more consumer base.
Cause: Canada is a new place for Capital
One to adapt to.
A focused operation that had not partnered with a rewards program
Effect: Would benefit Capital One by
bringing in more customers.


Cause: Just working as Capital One and
providing only one major service of credit
cards.

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Working without physical branches
Effect: More face to face interaction with
customers and it also provides customers
with convenience to visit branches.
Cause: less touch with customers.
Substitutes for credit cards
Effect: This will attract customers who are
not interested in credit cards but are looking
for other services instead.
Cause: Providing only one major service
Balance the needs of driving new customer sign ups with a longer term goals of influencing,
increasing satisfaction rate and reducing attrition.
Effect: This will earn the loyalty of customers and will lead to customers who will actually care
and contribute towards the company.
Cause:

3. Situation Analysis: SWOT Analysis
Internal Factors:
Strength
Capital one has a remarkable growth since entering the Canadian market
They have a Modified credit options
Mainly, they are Focussed on financial services
They are Expertise in credit cards
Weaknesses
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High outstanding balance with subprime customers. therefore, they were considered a
high risk for default
lack of physical branches, so its hard to build relationship with customers
They dont have rewards program
They are Lack of clear customer focus. As a result, its tough for them to Develop a
long-term relationships with individual customers.
External Factors:
Opportunities
Current awareness from us market spill over
There is a positive growth in credit industry in Canada
Increased in number of credit card users

Threats
Difficult to enter material segment of Canadian market
Any improvement is easily copied by competitors
Higher Competitors

Capital one is facing different types of issues. Capital one should add reward programs;
therefore, customers will be encouraged to use the credit cards because of the reward. Second of
all, they should also consider opening a physical branch because it will create an opportunity to
build relationship with new and existing customers. Other factors in the marketing environment
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may create some affects, such as; economic issues. For example, having economic issues will
decrease loaners ability to pay their debt. Banking industry has many competitions in Canada.
Along with this, Capital one should consider to improve its social and technologies uses that are
used by majority of the bank. Such as, phone apps, online banking, chip method.


4-I dentification and Evaluation of Alternative Solutions
Alternative 1: Opening more branches
Pros: Convenience for the customers,
Builds relationships with customers to fulfill
their needs,
Face to face contact
Cons: more production and labour costs
(more expense for the employer)
Dont have big consumer base, could lead to
bankruptcy
Lot of Competition, 6 major domestic banks
Alternative 2: Rewards program
Pros: attract more customers
Joint ventures (e.g.: Scotia Bank and scenes
card)
Customer loyalty
Incentive for customers to spend more for
the reward purposes.
Cons: Competition with other banks
Pressure on consumers to spend more
Alternative 3: Advertisements
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Pros: reach all the target customers, will
allow the company to show all its products
Cons: Can be too long for customers to get
the idea of the advertisement, costly



5-Recommendations: Starting a rewards program
This will attract more customers, the company should do more joint ventures (e.g.: Scotia Bank
and scenes card). Customer loyalty would lead to incentives for customers to spend more for the
reward purposes. This would solve the problem as it provides more revenue and insuring loyal
customers for the company. It enforces customers to buy more and create more revenue for the
company because it forces them to buy to receive more rewards. For instance: free aeroplane
ticket if a customer has 20,000 air miles reward points. Competitive advantage over the rewards
program will pressure the other loyalty brands to raise the rewards this will increase the
overheads for the brand. This would require the company to take a percentage from their revenue
and use it towards the rewards program. Resources that would be required are: a company that
compliments the bank, which is popular amongst the customers. If the bank follows the
recommendations provided it will be efficient and successful because of the loyalty customers
earned by this rewards program.




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6-I mplementations
The process that would be needed in order to start a reward program is



Activity Duration Start End
Plan how to partner with other
companies to do jointventures

1 Month March 3, 2013 April 3, 2013
research about most reward
program to best suited for target
market

1 Month April 4, 2013 May 4, 2013
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Contact all possible rewards
program partners

1 Month May 5, 2013 June 5, 2013
Evaluate and negotiate incentive
with the best reward partners

2-3 months June 6, 2013 September 6,
2013
Start creating a designing card ,
features and a company website

1-2 months September 7,
2013
November 7,
2013
Record promotions for TV,
internet and newspaper to
introduce your reward program

3 months November 8,
2013
February 8, 2014
sell co-branded rewards cards

2-3 months February 9,
2014
April 9, 2014
Finalize and send ad to specific
channels

1 month April 10, 2014 May 10, 2014
Launch advertisements and new
applications.

2-3 months May 11, 2014 July 11, 2014

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