Marketing for Financial Services

Recap

 What is marketing
 Value management cycle
 Core marketing concepts
The Strategic Planning Process

 Most large companies consist of below mentioned organizational levels:

1. Corporate planning.
2. Business planning.
3. Product planning.
 Corporate Planning
 All corporate headquarters undertake four planning activities:
1. Defining the corporate mission.
 Defining the Corporate Mission
 Key questions to ask:
1. What is our business?
2. Who is the customer?
3. What is of value to the customer?
4. What will our business be?
5. What should our business be?
 Some of the Characteristics of good mission statements :
1. Focused on a limited number of goals. (we want to produce highest quality products, offer the
most services, achieve the widest distribution and set lowest prices. Is it a good mission statement?)
2. Stresses the company’s major policies and values.
3. Defines the major competitive spheres within which the company will operate by defining the:
 Industry
 Products and applications.
 Competence.
 Market-segment.
 Vertical.
 Geographical.

4. They take long-term view

Infosys Technologies Limited

“To achieve our objectives in an environment

of fairness, honesty, and courtesy towards
our clients, employees, vendors, and society
at large.”
Biocon

“To be an integrated biotechnology enterprise

of global distinction.”
Corporate Planning

2. Establishing strategic business units (SBUs).

“a relatively autonomous division of a large company that operates as an independent
enterprise with responsibility for a particular range of products or activities”
 It has its own set of competitors
 It has a manager responsible for strategic planning and profit performance.

 E.g: Nestle, Bharti, Tata

 Corporate Planning
3. Assign resources to each SBU

 Once SBUs are defined, management decides on resource allocation. (Money).

 Popular models: BCG matrix
 BCG
 Stars:
 The business units or products that have the best market share
and generate the most cash are considered stars.
 Because of their high growth rate, stars also consume large
amounts of cash. This generally results in the same amount of
money coming in that is going out
 Stars can eventually become cash cows if they sustain their
success until a time when the market growth rate declines. 
 Cash cows: 
 Cash cows represents business units having a large market
share in a mature, slow growing industry.
 Cash cows require little investment and generate cash that can
be utilized for investment in other business units.
 These SBU’s are the corporation’s key source of cash, and are
specifically the core business
 Dogs-
 Dogs represent businesses having weak market shares in low-
growth markets.
 They neither generate cash nor require huge amount of cash.
 Unless a dog has some other strategic aim, it should be liquidated
if there is fewer prospects for it to gain market share.
 Number of dogs should be avoided and minimized in an
organization.
 Question Marks-
 Question marks represent business units having low relative
market share and located in a high growth industry.
 They require huge amount of cash to maintain or gain market
share.
 They require attention to determine if the venture can be viable.
 Question marks are generally new goods and services which have
a good commercial prospective.
 There is no specific strategy which can be adopted. If the firm
thinks it has dominant market share, then it can adopt expansion
strategy, else retrenchment strategy can be adopted
Design a BCG Matrix for Group/Company of your
choice
 Corporate Planning
4. Assessing growth opportunities
 Strategic Planning gap

• Intensive: Identify opportunities of growth within current business. (Ola Auto, sharing)
• Integrative: Identify opportunities to build or acquire business related to current business.(Axis
acquired free charge)
• Diversification: Identify opportunities to add attractive unrelated businesses (Paytm)
Intensive Growth
 One framework to detect intensive growth opportunities is “product-market expansion grid”.
 Ansoff Matrix.

1. Market penetration (gain more market share).

2. Market development (new markets for current products).
3. Product development (new products for current markets).
4. Diversification (new products for new markets).

  Existing Products New Products

 Market
New Markets Diversification
development
 Market  Product
Existing Markets
penetration development
Integrative Growth

 Forward integration
Apple setting its own stores
 Backward integration
Lays procuring own fields for potatoes, Starbucks buying coffee farms
 Horizontal integration
Flipkart with Snapdeal, Vodafone with Idea
Diversification Growth

 Within a same product line

 Outside product line
The Business Unit Planning Process
Defining Business Mission

 Every business unit needs to define its specific mission within the broader company
mission.
 "To improve the quality of life of the communities we serve through long-term stakeholder
value creation based on Leadership with Trust.”
 “Executing projects safely with predictable benchmark quality, cost and time”.
Analyzing Marketing Environment

Strengths Weaknesses

Opportunities Threats

• The evaluation of a company’s strengths, weaknesses,

opportunities, and threats is called SWOT analysis.
• It involves monitoring the external and internal marketing
environment.
SWOT

 Analysing External Environment involves exploring Opportunity and Threat

 Opportunity:
 Area of buyers need and interest that a company has a high probability of satisfying with
profits.
 Three main sources of market opportunities:
1. Offer something that is in short supply
2. Supply a existing product in a new or superior way. E.g. How to use manual, Colour dots
vegetarian vs. Non Vegetarian)
3. Totally new product or service
 Some Successful Opportunity Pointers..

 Companies in the past have developed opportunities from/by:

 Converging industry trends and introduced hybrid products or services.
E.g. (Apple watch, Mobile Phones).
 Customization
E.g. (Puma creative factory).
 Buyer process more convenient.
E.g.: COD
 Lowering Price
E.g.(developing generic medicines).
 Offering information and advice.
E.g.(LinkedIn, Consulting Jobs).
Market Opportunity Analysis (MOA)
 To evaluate opportunities, MOA is one of the acknowledged tool.
 2*2 matrix.

Success Probability

High Low

High

Opportunity
Attractiveness

Low
Market Opportunity Analysis (MOA)

 Example: Company in business of designing incandescent lightening systems for

studios
1. Company develops software programme to teach lightning fundamentals to TV studio
personnel.
2. Company develops device to measure energy efficiency of any lightning system
3. Company develops device to measure illumination level
4. Company develops more powerful lightning system
Threat Matrix

Probability of Occurrence

High Low

High

Threat
Seriousness

Low
Threat Matrix

1. Legislation to reduce number of TV studio licenses

2. Major Prolonged economic depression
3. Higher costs
4. Competitor develops superior lightning system
SWOT
 Analysing internal Environment involves exploring Strengths and Weaknesses

Major Strength Minor Strength Neutral Minor Weakness Major Weakness

Marketing          
Reputation          
Market Share          
Customer satisfaction          
Customer retention          
Product Quality          
Service Quality          
Pricing effectiveness          
Geographical Coverage          
           
Finance          
Cash Flow          
Financial Stablity          
Do a SWOT for product/service of your choice
Goal Formulation
 Once the company has performed a SWOT analysis, it can proceed to develop specific
goals for the planning period.
 This stage of the process is called goal formulation.
 “Goals” describe objectives that are specific with respect to magnitude and time.
 The firm sets objectives, and then manages by objectives (MBO). For MBOs to work they
must meet four criteria:
1. They must be arranged hierarchically, from the most to least important.
2. Objectives should be stated quantitatively whenever possible.
3. Goals should be realistic.
4. Objectives must be consistent.
Strategy Formulation

 Porter’s Generic Strategic

 Michael Porter has proposed three generic strategies that provide a good starting point for
strategic thinking:
1. Overall cost leadership. ( fixed vs. variable cost, E.g: Aravind Eye)
2. Differentiation (Must possesses one of the differentiations)
3. Focus (Start with the narrow market and then pursues 1 or 2)
Strategy Formulation

 Strategic Alliances
 Companies discover for strategic partners to be effective.
 Even conglomerates like TATA, Reliance explore strategic alliances for expansion.
 Doing business in other countries often require licenses. ( TATA Docomo, Star Alliance), Hence…
 Many strategic alliances take the form of marketing alliances. These fall into four major categories:
Product or service alliances
(ICICI and Vodafone- m-pesa, TATA Coffee and Starbucks, credit cards).
Promotional alliances
(McDonalds and Disney, P&G and Bombay Dyeing).
Logistics alliances
(GATI).
Implementation

 A great marketing strategy can be sabotaged by poor implementation.

 Marketing must estimate its costs.
 According to McKinsey & Company, strategy is only one of seven elements in successful
business implementation.
 The first three—strategy, structure, and systems are considered the “hardware” of success.
 The next four—style, skills, staff, and shared values are the “software”
Feedback

 Alter with changing marketing environment.

 HMT:
PRODUCT PLANNING

 Each product level (product line, brand) must develop a marketing plan for achieving its
goals.
 A marketing plan is a written document that summarizes what the marketer has learned
about the marketplace and indicates how the firm plans to reach its marketing objectives.
 Contents of the marketing plan:
1. Executive summary and table of contents.
2. Situation analysis.
3. Marketing strategy.
4. Financial projections.
5. Implementation controls.
Thank You