Case #1 - Telenor

1. Should Telenor offer financial services in retail banking in Serbia? If it does, what strategic type
of financial services (i.e., m-payment services vs. being a mobile or full retail bank)? What are the
risks and the opportunities?

- Wide coverage shops that customers
can easily reach
- Great strength in mobile applications,
- International experience in service
giving through shops/brunches,
- Established customer base
STRENGTHS OPPORTUNITIES
WEAKNESSES THREATS
- Fairly low (30%) mobile device usage,
even lower mobile banking usage (6%)
and internet banking usage (9%)
- Convincing the customers about data
security. 34% are willing to use if
security is satisfying
- Giving service with lower fees to 31% of
price conscious customers.
- Changing the minds of 80% of
customers, that they really need online
banking.
- Solving regulatory and heavy
bureaucracy issues by creativity.
- Customers were dissatisfied with banks
because of queue time that sum up to
hours and heavy paperwork
- Banks did not have suitable service
procedures, working time, lack of
enough service points and heavy
administrative requirements.
- Due to civil war, loan performances were
problematic
- Corporate governance practice in state
banks is not working
- Many banks were already established in
the country
- Using its own bran can result in a
negative image if this operation fails.
- Highly regulated system -> may not be
suitable for innovation or government
may put additional regulations
- Not being able to overcome bureaucracy
and failed to obtain a license.

Telenor should offer financial services in Serbia because of below swot analysis. The weaknesses and
threads can be covered with strengths of Telenor and opportunities outweighs the risks.

Market has common struggles (opportunities for Telenor):

1. Customers were dissatisfied with banks, because of que times that sum op to hours and
heavy paperwork.
2. Banks did not have suitable service procedures: working time, lack of enough service points,
and heavy administrative requirements.
3. Due to civil war, loan performance was problematic.
4. Corporate governance practice in state banks is not working.

But on the other hand, these struggles mean that there are opportunities in the market.

1. After 2011 recession, in 2012 banks started to make profits. (X9 vs last year)
2. 30 different banks, but none of them is dominant (Top 5 banks, 48% market share) – Exhibit
2
3. Consumers are trusting the feature and trying to make improvements in their life with bank
financing
 Case #1 - Telenor

As a telecom company Telenor has some strengths that it can capitalize,

1. Wide coverage shops, that customers can easily reach

2. Great strength in mobile applications
3. International experience in service giving through shops/brunches

While capitalizing that strengths Telenor should be willing to solve the below problems:

1. Fairly low (30%) mobile device use, even lower mobile banking usage (6%) and internet
banking usage (9%)
2. Convincing the customers about data security. 34% are willing to use if security is satisfying.
3. Giving service with lower fees to 31% of price conscious customers.
4. Changing the minds of 80% of customers, that they really need online banking.
5. Educating the customer and increasing awareness, since 62% knows very little about online
banking.
6. Solving regulatory and heavy bureaucracy issues by creativity.

We are advising Telenor, to leverage retail shops or to buy another bank to shorten the
administrative procedures while establishing a new bank and focus on online-mobile banking
strengths together to give service in retail banking. (Exhibit 3). Full service should be given but in an
effective way. Market is open, newly developing, having good profits and Telenor is in good position
to attack.

2. Which of the six segments should Telenor target? Are there potential sub-segments within the
attitudinal segments?

Segments 1, 3 and 6 are the primary segments to be addressed.

Segment 1 is the first segment to be addressed. They are cosmopolite, like to use new and
innovative things. They are employed and use smartphone. Even though they are satisfied with their
actual banking experience, they enjoy change, adventure and risk and follow financial news. Since
the mobile banking will be something new and useful for them to keep up even the financial news
and try new banking experiences, they would be the one to use it first and help to spread the brand
by word of mouth. However, we can see from Exhibit 5 that they have thrift in terms of being
economical or careful with money and they then avoiding excess expenses.

Segment 3, mostly women, urban and employed. They like to take risks and they are comfortable
borrowing money for consumer purchases and with the internet and mobile apps. They are open to
change their bank even though they are satisfied with their banks. Since a portion of them will be
curious and want to use the mobile banking and they tend to take financial risks, they will bring
some flow at the first times of the mobile bank.

Segment 6 is young, and they have a high usage of smartphones, they tend to spend money to non-
essential goods and their wants is having the newest items and the latest technologic devices.
Though they like jumping into risky investments and do not hesitate to borrow loans if needed.
Segment 6 would be the loyal customers of the bank.

We can clarify this by looking at the exhibits showing perceptual maps based on correspondence
analysis:

- Exhibit 5 / Personal Values table shows us the intersection of those three above stated
segments especially in (i) seeking adventure and risk and (ii) having fun and enjoyable time.
 Case #1 - Telenor

With mobile banking they would not lose time in physical branches but rather experience
recent technology.
- Exhibit 5 / Technology and mobile telephony attitudes: we can see again the intersection of
these three segments, and we can interpret that Segments 1 and 6 are more involved in
technological development and try to catch up the news, although Segment 3 is not that
involved in technological improvements they like spending time with their cell phone.
- Exhibit 5 / Attitudes about financial services and banks: Segment 1’s choices clearly states
that they are heavily interested in using mobile banking or carry out their day-to-day
banking transactions. Segment 1 and 3 on the other hand, have similar tendance to borrow
money and take risk if in return they could earn more, moreover they tend to defer their
payment by credit cards and checks.
- In Exhibit 6 we can first see an overall needs and gaps map which is followed by the maps of
the segments. Overall, the most unsatisfied process during banking experiences is the
complexity of administrative procedures. People do not like to spend time on bureaucratic
processes. Although Segment 1 is mostly satisfied with the transactions, they are not
interested in being visual appearances, accessibility whenever you need it is in limits of low
satisfaction. The same can be observed in Segment 3 as well. Segment 6’s map is showing us
that they should be the main target because they are not satisfied with neither the speed of
transactions nor the accessibility and the distance of the branches and ATMs from
home/workplace; the mobile banking is just they are seeking for.

Based on Segment 6 results, we would also suggest more young customers, at the beginning of their
career, who were grown up with the technologic improvements and the technology is an essential
part of their life. We think that since they are young, they would not be satisfied with time taking
procedures and spending time on queues in banks but rather prefer complete their payments or
daily transactions and would actively use mobile banking. Also, as time passes, if Telenor also
develop itself and provide innovative solutions to its customers, they would be the loyal customers
of the bank with Segment 6.

3. What could the brand positioning look like? What brand pillars should Telenor focus on?

Telenor is trying to move into a saturated market with 30 banks for 7.2 million of which 73% are
banked. So, brand positioning should perfectly address the current pain points of the current
banking customers, should leverage the name and strengths of Telenor as a mobile operator, and
should target first movers in the beginning so that the endorsement from customers is kept high in
the beginning.

When we look at Exhibit 6 and Exhibit 7, especially for segments 1, 3 and 6; we see that our target
customers are generally.

 Open to change and try new things, adventurous.

 Have the best of everything before everybody else!
 Have enough money to save or willing to use loans to get a better life standard!
 Typically use mobile internet (50% to 80% in different segments)

They expect from banking to be:

 Simple
 Accessible (anytime, anywhere)
 Fast
 Case #1 - Telenor

And for Online banking, they add:

 Reputation (no surprises about quality of service, the economic

 Security and data privacy
 Economically viable (low fee)

When they are at a physical branch, they want more than anything:

 Less waiting time.

When we consider all the factors, out brand pillars should revolve around four pillars:

1. Lifestyle: The NEW way of banking, adventurous, something new that only Telenor mobile
banking users are privileged to experience, always within their reach, helps them fulfill their
life goals.
2. Full package, but simpler, lighter, more affordable: Far from all the bureaucracy of heavy
paperwork or having to wait in line for hours. Full range of services that any bank has to
offer, but in a more seamless, easy, convenient, paperless way. Thanks to the economies of
scale, if Telenor uses the Telenor Communication Network’s current outlets, since the
mobile bank will not have dedicated bank branches and share some functionalities with
Telenor Communications network such as headquarter facilities, legal counsel, network
infrastructure, etc., we expect the fees to be more competitive, too.
3. Fast: No time for waiting in line for hours, more time for fulfilling life goals. Intuitive,
accessible anytime and anywhere.
4. Tangible, well-known: Making use of present Telenor Mobile outlets, and turning all Telenor
shops into a bank branch, customers do not just carry with them a mobile app, they carry
the brand value of Telenor, but physical brand exposure, the technical expertise in mobile
technologies with them. Customers that are already a Telenor Mobile Network customer are
the first focus because they already supplied many necessary documents proving their
identity, contact information and payment history. A win-win for both customers and
Telenor mobile banking

4. Should Telenor leverage its brand or come up with a new brand to avoid the risk of brand
dilution?

It is advisable for Telenor use its own brand. But as discussed in question 1 this is also a risk. Due to
chance of an unsuccessful entry into banking sector, Telenor can harm its brand reputation. Second,
Telenor is a brand of telecommunications which means technology, speed and flexibility. Those
brand dimensions are speaking to the customers current needs when banking sector is concerned.
Third, using the same brand, Telenor will be able to use the already established retail shops as a
further point to reach banking customers.