HSBC should put into practice the marketplace penetration and product development strategy by acquiring current account market show from other financial institutions that have been weaken from the economical turmoil. Besides that, the kick off of the new prepaid credit card will be a step towards product development that would be beneficial to counter non-traditional financial institutions that are poise to go into the current accounts market.
The market development strategy can be carried out at a later date by taking the new and analyzed prepaid card product into other physical market segments like China and India. This would be in line with HSBC's slogan of being the 'World's Local Bank or investment company' and would also take good thing about HSBC's global network in more than 79 countries.  With regards to the Porter Generic model, HSBC should purpose at using a broad founded differentiation strategy to capture market show from ailing finance institutions.
4. Target Market
4. 1. Market Segmentation and Targeting
A market portion should contains a group of customers who promote a similar set of needs and would like (Kotler. Etal, 2009). Market segment must be accessible, measurable, large enough and profitable in order to be well worth targeted by an institution. The new prepaid card should be offered as a 'naked solution' that segment associates value (Anderson & Narus, 1995). Means of segmenting the marketplace should include geographical and demographic segmentation.
The new HSBC prepaid card should be launched in the United Kingdom first before being prolonged into other physical regions. A time lag of half of a year would be enough to test the effectiveness of the merchandise as a strategy to get yourself a higher market show for current accounts. Demographic segmentation on the other hands should be focussed on age group and income. Special attention should be focussed on young individuals opening their first current accounts and high online price customers.
4. 2. Market Positioning
Positioning is the take action of designing the business's offering and image to take up a distinctive devote the thoughts of the prospective market (Ries & Trout, 2000). Data taken from SWOT and PESTEL examination of HSBC permits marketers to specify the points-of-difference and points-of-parity organizations. Points-of-difference are characteristics or benefits consumers firmly associate with a brand, positively evaluate and believe they could not find to the same degree with a competitive brand. In the case of HSBC, the bank may be considered a truly global bank with an international branch network.
Points-of-parity are organizations that are not always unique to the brand but may in simple fact be distributed to other brands (Brunner & Wnke, 2006). You will discover two types of points-of-parity, particularly, category and competitive points-of-parity. Category points-of-parity includes HSBC being truly a reputable lender in addition to a lender entrusted with fiduciary responsibility. In terms of competitive points-of-parity, HSBC must be observed to 'break even' with other finance institutions in terms of service quality.
(See appendix 2)
5. Marketing Mix
Marketing for financial services cause distinctive issues to marketers because services are intangible, inseparable and can't be inventoried. An expanded marketing mix must totally answer the dissimilarities between product marketing and marketing for financial services. The extended marketing mix seeks to fully capture the distinctive characteristics of financial services (Booms & Bitner, 1981).
(See appendix 2)
5. 1. Product
The product is the heart and soul of the firm's marketing strategy. Poorly designed service products that not create value for customers are destined to fail regardless of how well the other 6 Ps are performed. The goal of the product factor is to create a service concept that would offer more value to market segment than rivals. Working to enhance this concept into reality includes building a cluster of different but mutually reinforcing elements.
The product must be considered a means to solve a difficulty or satisfy a want on the market. Thus far, overspending is a significant issue under western culture. This is the reason why the new HSBC prepaid card is roofed in the new current profile package as a way to ensure that customers do not overspend by ensuring prudential budgeting of money.
HSBC will release two prepaid credit cards, namely, the HSBC's Financial Manager and the HSBC's Budget Manager prepaid card. Both prepaid cards come preloaded with Ј10 after the customer pays the initial card issue fee. The Financial Supervisor is ways to manage a regular budget by moving your spending money from your bank account onto the card. It comes with an annual fill limit of Ј15, 000. The Budget Manager on the other hand has an inferior annual load limit of Ј2, 000.
The new HSBC pre-paid credit cards would be fee-free and will be offering the same flexibility as a credit or debit cards. The prepaid card however, would have to be filled 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 HSBC prepaid card user purchases something. This balance revise will inform the prepaid credit card user on the money spent and the amount of money left free of charge. HSBC may need to synergy with companies like Vodafone to provide this service.
Another unique component of the HSBC prepaid cards are their overall flexibility in taking care of the customer's money. Bank or investment company customers can gain access to the HSBC website and establish standing orders how much money to download onto the budget manager every month as long as the funds are available in their current accounts.
Optional Personal savings Account
Bank customers that pay more than Ј500 to their current account on a monthly basis would qualify for the HSBC's Current Bill Advance. Regular repayments can be produced through the internet or by direct standing order from the customer's current bank account to save a particular amount every month. This feature is well suited for customers with a fixed every month income.
5. 2. Price
The pricing component plays twin roles for HSBC in the sense which it must be able to first catch the attention of customers to buy the service and also generate earnings for HSBC. Matching to Adrian Palmer (2008), there are five main factors that effect pricing decisions, particularly, income maximisation, market-share maximisation, success, social factors and personal goals.
While pricing strategy is highly vibrant for other products and services, costing for current bank account services have become rather static lately. Most bankers do not require any fees to create a current profile. Banking companies instead rely on the money that floats in the interval when they are transferred to when they are spent to be able to benefit from current accounts.
It is improbable that any increases in interest levels can get customers to start new current accounts with HSBC. The bottom lending rate that is now at 0. 5% provides little room to manoeuvre for banking companies and other financial institutions. In addition is the credit crunch and declining asset prices that makes borrowing at a higher rate unattractive at this time. The initial prepaid card issue cost should be around Ј10. That is in line with what opponents are charging at this time.
The capture with the prepaid card scheme is the fact it encourages lender customers to save lots of. Hardly any money that is kept is kept within the customer's current account and remains available for lenders to provide further lending. This may prove to be highly good for HSBC during occasions when raising new capital is extremely difficult.
(See table 3)
5. 3. Place
The place component involves delivering the merchandise aspect to customers through appropriate methods and delivery stations. Delivery may involve both physical and electronic channels. Failure to produce a service product readily available to customers would assure its failure it doesn't matter how good the service product is. The new current account package would be produced easily available throughout HSBC's 1, 492 branch network and also through the internet.
(See body 1 & 2)
5. 4. Promotion
The promotion component relies on effective marketing communications to bring awareness on the market of the service products provided by HSBC. The three goals of the advertising element are to gain the attention of customers, provide more information and persuade customers to get the product. Advertising is mass, paid communication that is used to transfer information, develop attitudes and induce some form of response on the part of the audience (Adrian Palmer, 2008).
The selection of media that would be utilised includes papers, journals, outdoor advertising and the internet. A sales advertising will also be carried through the first three weeks following the launch time to help induce customer purchase and the potency of intermediaries (Adrian Palmer, 2008). Other promotional materials include press releases, posters and brochures.
(See appendix 3)
5. 5. People
Despite technological advancements, many financial services still require immediate interaction between customers and lender employees. The nature of these relationships strongly affects how customers perceive service quality (Hartline & Ferrell, 1996). That is specifically true for financial services as employees are often the first type of contact with the customer.
Due to the value of this factor in the marketing blend, special attention needs to be given to working out of employees regarding the new current consideration package. The prepaid card notion also requires some serious attention as its aim is to show HSBC's change of position concerning the mindset of spending.
Training should only be given to bank or investment company staffs that are straight mixed up in new current bank account package. However, back office staff must also be formally notified relating to this new current consideration offer to ensure that the whole company have a coherent understanding on the bank's products and services. Besides that, training of computer personnel must also be pressured as new information systems may have to be put set up before the release of the new product.
(See appendix 4)
5. 6. Physical Evidence
It is normally accepted that physical evidence can be subsidized into two components (Shostack, 1982): peripheral data which may be possessed by the consumer but has little independent value and essential information, which can't be possessed by the buyer but has self-employed value. The peripheral evidence is the prepaid credit card itself as the essential research includes standard bank branches, cash machines, posters and brochures.
(See appendix 3)
5. 7. Process
The process component targets the mechanisms where the service is shipped, including business insurance policies for service provision, types of procedures, degree of mechanization etc. It really is critical that the policies and techniques are written and examined before the start of the new current account package.
Bank staff are to execute a test to determine how reliable and effective forward line staffs are at describing the new current bank account package and establishing new current accounts. A step-by-step guide how to create a fresh current account and prepaid credit card system is to be issued to all or any front line personnel to ensure that no misunderstanding is that occurs during the critical launch date.
Besides that, forward line staff should also be constantly supervised to ensure that the delivery of services take place smoothly. Comments from customers and claims should be welcomed as they would provide the input needed to consistently improve service delivery and customer satisfaction.
(See appendix 5)
Market research will be carried out before, after and during the start of the new HSBC current account package. A couple of three methods for a financial services organisation to carry out its research, particularly, using in-house resources, using the services of an expert company or a mixture of both methods. During the period nearing the launch of the new current account bundle, both pre and post implementation research should be completed by specialist firm commissioned by HSBC.
6. 1. Pre-implementation stage
During this level, research should be centered on whether the market's current exterior environment matches the company's initial results during the first external environment analysis. Political, legal and monetary elements of the exterior environment are likely to be very volatile in the approaching days that may cause HSBC to either hold off or bring onward the launch of the new current account package.
Furthermore, research should also be achieved on the company's commercial image and the receptiveness of market for a new product and theory throughout a time when the banking industry is facing heavy criticism from the public.
6. 2. Execution stage
A tracking study should be completed by the study agency during the implementation stage. The tracking analysis will be done through monitoring consumer's recognition and acceptance of the new current bank account package. This process should be an ongoing one through the product's life routine. Checking studies should be conducted with small sets of a marketplace segment. It could also be recommended to rotate the users of an organization with another group to ensure that a variety of replies is noted.
6. 3. Post-implementation stage
Post-implementation research should be aimed at obtaining visible results on whether HSBC has indeed were able to obtain the appealing degree of market share and profitability. Another goal of the new current bill package is to change the attitudes and belief of the general public towards HSBC. Marketing research at this time also needs to determine on whether HSBC is now perceived to be always a more responsible lender that not only aim for gains but provide value to customers.
Besides obtaining visible results on whether marketing aims are met, additionally it is important to get feedback on customer satisfaction levels and any complains on the product made available from HSBC. This is to ensure that further advancements can be made in the future and any blunders made wouldn't normally be repeated.
(See appendix 8)
The budget to put into practice this marketing plan is projected to be around Ј15 million. A contingency of 5% is included in the numerical calculations to ensure that some way of measuring volatility is protected should the promotion of the new current account package demonstrates to be more expensive than anticipated
(See appendix 6)
The execution of the entire marketing plan would take around 9 weeks to complete. The introduction night out of the new current accounts package is the summer of 2010 when economical conditions are expected to be more accommodating consequently of fiscal stimulus by the united kingdom authorities. A Gantt chart is included in the appendix to breakdown the timeframes of individual tasks.
(See appendix 7)
9. Contingency Plan
A contingency plan is included in the appendix to notice down various replies for some of the issues posed in these difficult times. Among the various scenarios that may occur in the future includes the failing of the prepaid card to be always a practical solution to manage personal money, a severe contraction in monetary activity and the failure to gain market share in the current bank account market.
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