The paper "Citizen Bank’ s Marketing Strategy " is a good example of a marketing case study. Australia’ s banking sector is pretty clouded (Thakor & Boot, 2008). With the high concentration of banks, one would imagine that consumer needs are addressed fully especially considering that the high concentration of banks and other financial institutions would lead to competitive banking practices that would benefit the consumers. Unfortunately, this is not always the case. If the analysis by Choice (2011) is anything to go by, it is evident that the banking sector needs some changes and innovations that will benefit the consumer.
This paper is founded on the belief that Australians are receiving a raw deal from the banking sector since, despite the high number of banks, it appears that consumers are yet to enjoy the benefits of “ effective competition and information asymmetry” as observed by Choice (2011, p. 3). Hence, this report proposes the creation of a bank that will have the Australian banking services consumers at the core of its operations. The bank will be named “ Citizen Bank” as a reflection of its commitment to provide citizens with competitive and well-balanced banking and financial services. INDUSTRY OVERVIEW Australia was among the three countries that marked an increase in new bank entrants in the market in the 1990s when all other countries were witnessing mergers, failures and bankruptcies that led to a decline in the number of banks in the affected markets.
The other two countries were Belgium and Japan (Thakor & Boot, 2008). This trend continues to date, as the banking sector continues attracting newer market entrants. Notably, however, there is an inclination that perpetuates the dominance of large banks in the country, and this certainly affects the performance of the new market entrants.
In 1999 for example, 74 percent of all banking deposits were made in the five largest banks (Thakor & Boot, 2008); a decade later, the deposit-taking dominance of large banks has not changed much as “ the four major banks accounted for 78.7 per cent of all deposits. ..” (Australian Trade Commission, 2011, p. 16). Overall, the retail banking sector offers services to businesses and households and is hence at the core of Australia’ s financial system and economy.
Like everywhere else, the retail banking sector provides essential services such as deposit-taking, modes of payments (i. e. cash and cheques), and advances credit to the consumers. Remotely, the retail banking sector connects borrowers to savers and helps businesses and individuals to cope with financial risks. According to Lee and Heshmati (2008, p. 176), the banks operating in Australia can be categorised into four groups namely “ major banks, state-owned banks, other regional banks, and foreign banks” . The major banks are four in number and have an extensive branch network throughout Australia.
Additionally, the deregulation that occurred in the banking sector in the 1990s made it possible for the major banks to expand into the world market, engage in product innovations and diversify into the non-traditional banking sectors. State-owned banks no longer exist as they were either taken up by other banks, merged with other banks or were privatised. Regional Banks, on the other hand, used to be building societies, which were forced to convert to banks by the financial deregulation. Consequently, they are able to provide a wide range of financial products and services over a wider geographical area.
Foreign banks enter the Australian banking sector either as branches or subsidiaries of their parent companies. Most such banks are in the wholesale banking sector, with a few others like Citibank, Chase Manhattan Bank, and Hong Kong Bank of Australia delving into the retail banking sector.