Table of Contents
1.0 Introduction......................................................................................................................... 2 2.0 The importance of Marketing Strategy in Business........................................................... 3 3.0 Islamic Debit Card .............................................................................................................. 4 4.0 Targeted groups and Characteristics ................................................................................. 5 5.0 The Rationale behind the Chosen Targeted Group ........................................................... 7 6.0 Other Data needed for the Campaign ................................................................................ 9 7.0 Conclusion ......................................................................................................................... 11 Bibliography ............................................................................................................................ 12
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0900157 1.0 Introduction Introducing a new commercial product into the prevailing market space, amidst tight competitions, demands a thorough study of other existing similar products and targeted group. Gaining the lion share makes good bucks to the industry. Therefore, market intelligence is very paramount for a successful product delivery to the intended group and it precedes the product introduction. This paper is about the introduction of a new debit card into the market space. Foss & Stone (2002) argued that according to the changing nature of the business model and products, a more suitable data capturing is necessarily required. The authors, further, implied that introducing a new product will ultimately require an efficient data capturing of the existing or new customer who is the ultimate end user of the product. The first step before a campaign can be put together; the objectives have to be established first. Promotions may be designed to sell the product, but it is just as likely to be designed to produce enquiries, requests for information, and something that will receive a personal sales follow-up (Forsyth, 2000). Therefore, one method of doing this is by stepping through the stages of data mining process (Groth, 2000). According to Groth (2000), data mining is the process of finding trends and patterns in data. The objective of this process is to sort through large quantities of data and discover new information. Furthermore, Groth (2000) added that the benefit of data mining is to turn new found knowledge into actionable results, such as increasing a customer¶s likelihood to buy, or decreasing the number of fraudulent claims. In business, data mining helps to answer questions in order to understand patterns better which can affect the company¶s competitive ability and thus, best suited analysis of customer information as data becomes increasingly complex (Groth, 2000). Collectively, the data mining process and the capturing of customer¶s internal and external information should be strategic plan for the introduction of the Islamic Debit card. Hence, the successful likelihood of the Islamic debit card being marketable will be achieved. In addition, we shall consider the three categories of customer turnoffs in this campaign strategy. As stated by Timm (2005), the three fundamental customer turnoffs are value turnoffs, system turnoffs and
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0900157 people turnoffs. By addressing the previous issues mentioned above, the campaign is more workable and people oriented. The strategy of the targeted group is very relevant in the marketing process and in an introduction of a product because the organization can efficiently use it resources in the most value creation way to achieve its objectives and value creation to its investors (Peppers & Rogers, 2004). 2.0 The importance of Marketing Strategy in Business Dibb & Simkin (2001) defined in their opinion that marketing planning is a systematic process involving assessing marketing opportunities and resources, determining marketing objectives and developing a plan for implementation and control. The customer¶s orientation demands that a business or a corporation should serve a clear customer¶s need (Dickson, 1994). In addition, the marketing concept, is the corporation¶s mission is to generate profit for the firm, its employees and its stockholders by producing goods or services that satisfy customer needs which is the natural outgrowth of a customer orientation (Dickson, 1994). Furthermore, the marketing concept is said to put companies and managers on notice that neither production, nor sales, nor customers exist in the vacuum. As production, sales, and customers exist in a competitive marketplace, it is this competitiveness that really drives the marketing concept (Dickson, 1994). In fact, particularly after the World War II, the different functions of marketing, such as product differentiation, marketing plans, budgeting, coordinating, coordinating marketing activities and developing marketing executives became so popular that every manufacturer began to think of production schedules, price schedules, designing and inventories (Sarkar, 2000). As proved by Kotler (1984), the underlying concept of marketing is that human needs, human wants, human demands, product, exchange, transactions, markets are all put together. Similarly, he argued that every company operates in a complex and changing marketing environment. Therefore, if the company is to survive, it must produce and offer something of value to some group in its environment (Kotler, 1984).
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0900157 Furthermore, all companies must look ahead and develop long-term strategies to meet the changing conditions in their industries and ensure long-term survival. Therefore, the hard task of selecting an overall company strategy for long-run survival and growth is called strategic planning (Kotler et al., 2005). Cook (2000) defined strategy as a long-range plan such as customer focused processes, human resources, innovations and so on to meet customers demand. In addition, in order to succeed organizations must do a better job than competitors of satisfying target consumers. Thus marketing strategy must be geared to the needs of consumers but also to the strategies of competitors (Kotler et al., 2005). 3.0 Islamic Debit Card In this case study, the latest Islamic debit MasterCard was due to be launched in one month¶s time by MasterCard Worldwide and EonCap Islamic Bank whom is a member of Malaysia's Eon Bank Group. MasterCard Worldwide and EonCap Islamic Bank (a member of Malaysia's Eon Bank Group) have jointly launched what they are billing as the world's first Islamic debit MasterCard²the EonCap Islamic Debit Master (Rahman, 2008). The EonCap Islamic Debit MasterCard is basically a debit card with ATM functions as well. It also works on PayPass systems, which enables a person to swipe it on a terminal without the card leaving the cardholder's hand. It is referred to as blending traditional purchasing power with modern technology and is Shari'ah compliant (Rahman, 2008). In addition, it is designed to appeal to both Muslim and non-Muslim individuals who prefer better financial control as the card ensures that purchases are automatically deducted from the cardholder's account and approved only if enough funds exist within the account (Rahman, 2008). It helps track spending, comes with worldwide acceptance at more than 26 million locations and can be used at an ATM for e-banking (Rahman, 2008). Furthermore, the EonCap Islamic Debit MasterCard card is designed for individuals who prefer to spend what they have in their accounts, yet seek the same functionality and assurances of a credit card (Rahman, 2008). Linked to an Islamic savings or current account, the EONCAP
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0900157 Islamic Debit MasterCard card allows cardholders to conduct transactions using their own funds rather than making purchase on credit (Rahman, 2008). After each card transaction, the fund amount will be automatically deducted from the cardholder's account and reflected in their bank statement with generally no interest charged unless an overdraft line of credit is activated (Rahman, 2008). This thereby gives cardholders the added benefit of always knowing how much money they have in their account without the risk of interest (Rahman, 2008). 4.0 Targeted groups and Characteristics Kotler et al., (2005) pointed out that the market consists of a sea of various individuals with plethora of needs. Since this is the phenomena and reality, an organization would have to device a suitable way or strategy in order to achieve its goals through the most favorable segments of the different people. Hence, based on a number of factors, groups can be categorized on geographic, demographic, psychological and behavioral factors (Kotler et al.,2005). Again, by categorizing them in groups, one would be specific to their needs in the most efficient manner, target group often have similar characteristics such as the way they respond to a given marketing strategy. Kotler et al. (2005) stressed that there is no single way to segment a market and that a marketer has to try different segmentation variables, alone or in combination in order to find the best way to view the market structure. Major segmentation variables for consumer markets can best be broken down to Geographic, Demographic, Psychographic as well as Behavioral variables (Kotler et al., 2005). Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, states, countries, cities, or neighborhoods. This means that a company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants (Kotler et al., 2005). As for demographic segmentation, it requires the market to be divided into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. This is the most favorable bases for segmenting as consumer needs, wants and usage rates often vary closely with demographic variables.
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0900157 On the other hand, psychographic segmentation divides buyers into different groups based on lifestyle characteristics. People in the same demographic group can have very different psychographic makeups comprising their activities, interests, and opinions (Kotler et al., 2005). Lastly, behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses or responses to a product. Many marketers believe that behavior variables are the best starting point for building market segments (Kotler et al., 2005). Taken together and understanding these variables will enable efficient of resource organization and strategic implementation of companies goals. Furthermore, the company will achieve much needed values for its stakeholders and would harness its energy in a more direct and specific implementation. Malaysia will be the case study group. With the peculiar nature of Malaysian make up, it will be reasonable to take into cognizance the need of the people either along the religious line or ethical underpinning. Based on the demographic of Malaysian population, the Islamic debit card will appeal to all. Special care is taken on ethics and religious inclination. Another reason is the purchasing power of professional is valuable asset because of their purchasing power and their movement from continents to continents. Their purchasing power is high and their recurrent or repeated sales are high in value. Below is the Islamic debit card features and targeted group: Features: MasterCard capabilities, Paypass Contactless Payment, Shariah-Compliant, OneSmart
Mastercard Paypass, Financial Control Features, Worldwide acceptance, Global convenience of Fast and Secure Payment, and Just one tap and go Targeted Group: Consumers with Ethical Business Solutions, Muslims and non-Muslim and Mobile Professionals (Businessman) and Retired Consumers
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0900157 5.0 The Rationale behind the Chosen Targeted Group
The chosen targeted group mentioned in the previous section, was based on demographic and behavioral segmentation. It is said to be from demographic and behavioral segment as religion and occupation fall under the demographic segmentation. Furthermore, as for the third target group, which is consumer with ethical business solutions, they fall under Psychological segment. In this segmentation, the customer is recognized under his or her attitude toward the product as well as his or her readiness stage to obtain the product (Kotle et al., 2005). For the most part, ethical consumerism is a growing phenomenon that underpins ethical trade activities. There are many motivations for ethical business practice, for instance, the values of the people involved, the belief that ethical business practices, particularly environmental responsibility, will produce more effective and efficient results, but the apparent demand from µethical consumers¶ is key (Tallontire, Rentsendorj, & Blowfield, 2001). That said, many businesses adopt ethical practices because of what they believe as what their consumer wants. Indeed there is growing evidence that consumers are becoming more discerning as a result of changing tastes and expectations. In addition, there appears to be a positive trend towards attempts to purchase goods with positive ethical attributes (Tallontire, Rentsendorj, & Blowfield, 2001). The Islamic debit card aims primarily towards Muslims and Non-Muslims as the product does not consider religion as a buffer towards users to have a good product. It would be even better if non-Muslims are also targeted since this would account to actually the whole population of Malaysian. In addition, throughout the world, Muslims are becoming increasingly active as investors and manufacturers or bankers and traders or competitors and suppliers. Additionally, they are simply becoming real partners in global economic system (ATKearney, 2007). Muslim comprises one of the fastest growing consumer markets in the world and, hence, represents a major growth opportunity for businesses in the world (ATKearney, 2007). In addition, we know that in particular that the shariah principles affect companies or organizations in the food and beverage, banking, fashion, cosmetics, apparel and even body care (ATKearney, 2007). Therefore, introducing the Islamic Debit Card would definitely be a success as it fits the Muslim Market Criterion.
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0900157 Finally, as for the last target market, which is the mobile professionals and retired consumers,. These are individuals either employees or employers. Certainly, they have there is a purchasing power in them. In addition, it is understood that this Islamic debit card would act like some sort of a credit card, mobile and easily to travel with. It fits the requirement of a businessman or Mobile Professionals as they are always on the go. Research shows that people who were born between 1946 and 1964 will be 50 or older this year (BusinessWeek, 2005). That would be the age at which marketers traditionally lose interest in consumers, believing that their choices on products have long since hardened and that their biggest earning and spending years are behind them (BusinessWeek, 2005). Elsewhere, though, attitudes are changing fast. United States at a glance, with average life expectancy at an all-time high of 77.4 years, more and more Americans over 50 consider middle age a new start on life. Fewer than 20% say they see themselves stopping work altogether as they age, according to a recent Merrill Lynch & Co. survey of boomers (BusinessWeek, 2005). Of those who plan to keep working at least part-time, 67% said they'll do so to stay mentally active, and 57% said to stay physically active. People now in their 50s may well work longer than any previous generation, with more than 60% of men age 60 to 64 expected to be in the workforce in 2012, up from about 54% in 1992, according to the Bureau of Labor Statistics (BusinessWeek, 2005). Therefore, professionals are a unique group that can generate substantial income to the bank. The boomers' collective wallet will only get fatter as they continue working. As a group, people age 50 to 60 are flush, with more than $1 trillion of spending power a year, about double the spending power of today's 60-to-70-year-olds (BusinessWeek, 2005). They're likely to be vigorous consumers as they empty the nest, take on new jobs, relocate, support children they had in their 40s, go back to school, start a second or third career, remarry, inherit money from their savings-minded parents, pursue new hobbies, and tackle the health issues of aging (BusinessWeek, 2005). Based on this, marketers are slowly waking up and realized that if they were to expand their business, they will have to market to the aging boomer (BusinessWeek, 2005). After this argument, there seems to be the need for obtaining other data to mount efficient campaign.
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0900157 6.0 Other Data needed for the Campaign In general, the proposed campaign for the Islamic debit card will need to obtain information from the customers. Notably, there were five fields which already made available for the customers by the new company-wide CRM platform are Name of the Customer, Customer Number, Mailing Address, Contact Number, and Date of Birth. Much more is needed to be more accurate in mounting the campaign. However, in ensuring the campaign to be successful, these abovementioned five data fields are not sufficient. Therefore, the ten other customers¶ data that is critically needed and its reasons, which will support the proposed campaigns, are as mentioned below. They are as follows: (a) Identification Card Number Since identification cards are integrated with e-cash, ATM, Touch and Go, and a Digital certificate, it enabled banks to check the background of their potential customers (Wikipedia, 2009). In addition, banks can also check whether the potential customers had been blacklisted in any other banks because of their bad payment record.
(b) Income per month It is important to have an idea of the share of a customer's food dollar so that organizations can track it over time and evaluate its competitive position (Figueroa, 1993). In addition, regional forecasts of how household income will change to adjust organizations advertising strategy or otherwise assist organizations in arriving at decisions concerning firm expansion (Figueroa, 1993). In essence, perhaps by combining average household income with the number of households that represent the customer base will equally yield an approximate dollar figure representing potential demand for the organization¶s products and services (Figueroa, 1993).
(c) Years of working This is crucial for organizations to brainstorm whether the potential customers might have some reserves as backup of their financial transactions in case of any unwanted event were to occur. With their reserve, the customer can make frequent purchases. This purchases increase the value of the company.
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(d) Job sector/ Industry This is for organizations to learn about which industry yields the most usage of the debit card and might enabled organizations to come up with more profitable ideas in future.
(e) Citizenship, Status of Marriage and Religion
This information is crucial in order to learn about which demographic segment that holds the biggest percentage of users. Citizenship is also crucial as it is important to know that only Malaysians are applying. Religion information might be useful as organization could learn about whether the Islamic debit card is acceptable by other religion apart from Muslims.
(f) Experience in taking a debit card before
This would be the case where the organization might want to know whether the customer is well verse with the product or is still new with it. Usual users normally know how to make full use of the product benefits and for those who don¶t might need a further explanation from the organization.
(g) The needed credit Some potential customers has uncontrollable spending habits, therefore, they might want to set the needed credit for their Islamic debit card. However, the bank itself might set the needed credit level for every user depending on their income rate.
(h) Interest This would be the case where the organizations or banks can learn about their customers spending habits. For instance, some potential customers might spend thousands in car collectibles.
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0900157 7.0 Conclusion All along this paper discusses the prospect of introducing a debit card into the market, whilst compliant. In a CRM implementation, determining customer lifetime value is essential to the company. With companies discovering automated customer service and with customer acquisition and retention a contemporary mantra, having a means to benchmark the value of a customer or customers is a tremendous tool in determining what level of priority to give a customer (Greenberg, 2002). At the heart of CRM system are databases and tools for monitoring and evaluating the status of working relationship with individual customer accounts (Anderson & Narus, 2004). In order to improve decision-making capabilities, business market managers in every organization must also incorporate financial data on each account (Anderson & Narus, 2004). With a broader view of relationship performance, managers will be in a better position to reassign accounts and direct limited resources to efforts with the greatest payout (Anderson & Narus, 2004). Perhaps, more importantly, CRM help managers to better allocate scarce marketing resources, synchronize operations, and update the value of relationship-specific market offerings (Anderson & Narus, 2004). Therefore, suppliers such as bank who provides the services or products must keep relationship vibrant by using business networks (Anderson & Narus, 2004). The survival of the fittest takes place within the context of a changing environment that is constantly altering the rules of the game ever so subtly (Naumann, 1995). The fittest organizations are those that develop the ability to change and evolve at least as fast as the environment changes. Those that lack the ability to keep pace with the changing environment drift toward extinction, their existence marked only by their archaeological record (Naumann, 1995). In addition, as stated by Naumann (1995), the key survival characteristics will more likely to be flexibility, creativity, innovativeness, and continuous learning. This sets a premium on the organizational process for implementing gradual adaptation and improvement rather than on crash programs (Naumann, 1995).
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