How the National Australia Bank Delivers Its Services to the Market - Case Study Example

Student’s Name: Marketing Instructor’s Name: Course Code & Name: Date of Submission: Introduction The success of a business is determined by its ability to provide products that meet customers’ demands. In addition, the company must market its products in order to attract and retain its customers. For marketing programs to be effective, the company must identify its target customers and also position itself in a manner that best communicates what it offers (O’Quinn, Allen & Semenik 2011, p. 212). Moreover, the company must identify the means through which the product can effectively reach its target customers. Understanding the target customers purchasing behavior is also important as it enables the company to base its production and marketing decisions on the customer’s preferences and needs. Through marketing segmentation, a company can identify the segment that it can successfully serve hence ensure customer satisfaction. This paper is going to analyze how the National Australia Bank delivers its services to the market. National Australia Bank The National Australia Bank offers financial services to over 12 million customers globally. The bank is based in Australia with branches in New Zealand, United Kingdom, United States and Asia (National Australia Bank 2012). The bank strategy is to build itself around by placing its customers at the centre in order to assist them realize their potential. According to Lamb, Hair and McDaniel (2008, p. 411) creating value to customers involves designing customer service management systems. The customer service management system present the company with an opportunity to respond to customer questions, concerns and complains. The National Australia Bank has a user friendly website that provides its customers with information about the bank as well as providing them with a channel through which they can communicate with the bank. In order to increase its customer’s value, the bank has developed internet and mobile banking services so as to provide its customers with easier, convenient and flexible banking services. Wright and Watkins (2011, 101) note that creating and delivering customer value involves producing a range of products so as to meet the needs of a variety of customers. The National Australia Bank offers its customers with a wide variety of accounts with an aim of meeting their diverse needs. Through this the bank is able to create and deliver value to its customers. Moreover, the bank creates and delivers value to its customers by providing them with insurance services hence this means that they do not need to go to insurance companies to be insured. Furthermore, The National Australia Bank creates and delivers value to its credit card holders by providing them with an opportunity to earn points which are aimed at rewarding them. Moreover, the bank provides its credit card holders with information relating to balance transfers, interest rates and reward programs. In addition, the bank creates and delivers value by offering its customers with information about its credit cards. This assists the customers in choosing the most convenient credit card. To create and deliver value to its customers, the bank offers its customers with financial advice so as to enable them make the right investment decisions (National Australia Bank 2012). Through this, the customers are able to manage their wealth and also identify the channel to follow in order to resolve investment complains. National Australia Bank Target Segments Marketing segmentation involves grouping customers in a market into similar and small homogeneous customer groups (Dibb & Simkin 2012, p. 32). For segmentation to be effective, customers in a given segment must share similar buying characteristics and products needs. National Australia Bank financial services department targets to reach customers willing to lend money and those customers willing save their money. According to Lamb, Hair and McDaniel (2008, p. 234) geographic segmentation refers to the process of segmenting the target markets by regions in a country depending on the market density, market size and climate. National Bank of Australia targets lenders and savers by geographically segmenting its customers as either belonging to the major cities, small towns or international customers. The bank targets more lenders and savers from the major cities of the country and it does this by establishing a majority of its branches in these cities. This is with an aim of capturing the large number of people in the major towns willing to either lend or save money. The customers in this segment require quick and efficient services. In addition, customers in this segment want secure banking services. Therefore, customers in this segment seek to obtain value from their savings and value from the services provided by the bank. This is because of the many investment opportunities available in the urban areas. This segment is viable because it generates the largest amount of revenues for the bank. The bank also targets lenders and savers in the small towns. To do this, the bank has a variety of well-known branches in the small towns around the country. Customers in this segment want secure locations where they can save their money. Moreover, they need cheap sources of finances. The customers in this segment seek value in the form of financial advice as well as affordable lending rates. This is because of the low level of investment information that customers in this segment posses and the low level of income in small towns. This segment is appropriate for the bank as it provides it with a large number of customers. The bank also targets international lenders and savers by establishing its branches in foreign countries like the New Zealand and United Kingdom branches. The international lenders need reputable banking institutions where they can save or lend money. Moreover, they need a banking institution which can offer them with adequate finances as well as security for their savings. International customers seek value from the services provided by the bank. This is because they are surrounded by many banking institutions in their environment. According to Pride and Ferrell (2010, p.113) companies can also use psychographic variables in order to segment their markets. These variables include motives, lifestyle, and personality characteristics. The National Australia Bank uses personality characteristics and lifestyle to segment and target its market. This segment is characterized by people who are connected to the internet, spend large amount of money on fashion items, posses’ mobile phone, subscribe to cable Television and go to restaurants. The customers in this segment require simple online banking survives. Moreover, the customers who belong in this segment need quality and efficiently operating online banking services. The customers in this segment seek for banking services that will match their lifestyle and personality. Through this, the customers are assured that their value is met. This is because of the fact that the customers who belong in this segment want to be provided with technologically operated banking services. This segment is viable to the Bank due to its simple and low operating requirements. Moreover, the segment is appropriate to the bank as it enables it to test its technological effectiveness. National Australia Bank services’ Source: Terrisonera (2012) Nwankwo and Gbadamosi (2011, p. 256) note that a product refers to the tangible good or intangible benefit that a company offers its customers in order to satisfy their needs. The national Australia Bank offers its target segments with a range of financial services. The wide range of accounts that the bank offers provides customers with a diverse means through which they can save their money hence this delivers customer’s value. Moreover, the bank creates value to its target segments by providing them with credit cards in order to simplify their financial transactions. The loans that the bank offers accompanied by financial advice assist its customers to meet their financial needs as well as their investment needs in an informed way and this creates value to its target customers. The National Australia Bank provides customers with online security in order to ensure that they bank with confidence. The bank 24 hours service centre offers the target customers with information about the bank as well as resolving their banking problems hence delivering value to them. Price refers to the amount of money that the customers are required to pay in order for them to obtain the product or service (Pickton & Masterson 2010, p. 428). The National Australia Bank offers its business account holders with a flat monthly fee that is debited in the last day of the month hence this ensures that its target customers enjoy uninterrupted services and this creates value to them. The Bank charges its customers with a flat and a low credit card fee on monthly basis. This creates certainty on its customers hence enables the bank to create value to its target clients. The National Australia Bank offers its customers with affordable lending rates and it does not charge its customers prepayment fees on their loans. This enables it to create and deliver value to its customers. According to Nwankwo and Gbadamosi (2011, p. 256) place refers to the methods of distribution used to deliver the company’s products to its target customers. The National Australia bank operates 1800 branches all over the country and this is aimed at providing its services closer to its customers. In addition, the bank has over 4500 ATMs worldwide in order to simplify its customers banking needs. The large number of ATMs and branches owned by the bank provides its customers with an easy and flexible means of solving their financial needs hence this creates value to the customers. Promotion involves all the forms of communication used by a firm so as to communicate with its target customers. The National Australia bank utilizes a variety of promotion techniques in order to communicate with its customers. They include competitions, challenges, credit card rewards and commentator promotions (National Australia Bank 2012). The prizes and rewards create value to its customers. The bank employees are friendly, welcoming and highly motivated. This enables the bank to offer world class services and thus create and deliver value to its customers. On the other hand, processes refer to the procedures involved in delivering value to the customers (Pickton & Masterson 2010, p. 428). The bank offers its customers with efficient processes and this ensures that the customers are not delayed or inconvenienced. Nwankwo and Gbadamosi (2011, p. 256) note that physical evidence refers to the general appearance of the environment through which the service is offered. The National Austria bank, banking halls are cool, spacious, and clean and are fitted with comfortable seats for the customers. This makes the target segment customers to feel valued when banking with the bank. National Australia Bank Competitor Services The National Australia Bank receives high competition from the Commonwealth Bank. The Commonwealth bank assists its customers in planning for their holidays as well as assisting them to buy homes (Commonwealth Bank 2012). In addition, the bank assists its customers in budgeting and planning as well as educating them on the strategies to utilize in order to minimize their bank fees. Furthermore, the Common wealth bank provides information to its customers on the means of managing their debts and how to invest their money. The assistance and the information that the bank offers its customers enables it to create and deliver value to its customers. According to Khalifa (2004, p.650) customer value is created when a company offers its products or services at a low cost and at the same time the company is able to meet the demands of the customer. Furthermore, the product quality must much its cost. The commonwealth bank offers its business transaction account holders with chcque facilities and with an overdrawing limit of $500. This account delivers value to the bank customers by providing them with a flexible business transaction account that offers a variety of transactions at a flat fee. monitoring program (Commonwealth Bank 2012). This in turn creates and delivers customers value by ensuring that they have a peace of mind regarding their credit cards. The Common wealth bank rewards its customers by offering them discounts rather than requiring them to accumulate points in order to be rewarded. The rewards enable the bank to create and deliver value to its customers. Commonwealth portfolio of loans ensures that individuals and firms have access to funds in order to facilitate their personal and business expansion as well as their investments. The bank uses its loans to create and deliver value to its customers by offering them with flexible interest rates and coverage for unanticipated operating cost (Commonwealth Bank 2012). The bank also protects its customers against risk by insuring them as well as managing their interest and currency risks. By protecting its customers against unexpected losses, the bank is able to create and deliver value to its customers. The bank Merchant services enable its customers to obtain fast, secure and reliable payment options (Commonwealth bank 2012). The merchant services provide customers with a simple, flexible and convenience payment method. Moreover, Commonwealth bank provides its customers with an opportunity to make the payments by fax, phone, online and email. These payment systems enable the customers to enjoy convenient, flexible and simple payment options hence through this the bank is able to deliver customer value. Other banks include: Westpac Bank Value Offered Offer Economic news to its customers Business solutions services Online investing Australian and New Zealand Banking Group Offer customers with solutions to start and glow businesses Customized banking services for industries. Agribusiness services Marketing Mix Strategies for National Australia Bank Source: Bowie and Buttle (2004, p.331) According to Lamb, Hair and McDaniel (2008, p. 46) marketing mix strategies refers to the distinctive integration of promotion, place, product and pricing strategies. A marketing mix strategy must be designed to satisfy the needs of the target market. The National Australia bank should provide its loan services with free and continuous advice as well as technical support. Reynolds and Lancaster (2012, P. 32) argue that organizations should undertake the responsibility of ensuring that their products or services are successful after being purchased by the customers. Many banks provide their customers with advice and information on how they can efficiently utilize the amount borrowed before they actually receive the loan. However, after receiving the loan, the banks are not concerned on how their customers utilize the borrowed funds and this makes the customers to end up misusing the funds due to lack of continuous technical support and advice. Therefore, providing free and continuous advice as well as technical support after issuing loans will enable the National Australia bank gain competitive advantage. This is because customers will be assured of continuous free support and advice hence this will motivate them to obtain their loans from the bank. The free continuous support and advice service will create an added value to the target segments as it will provide an opportunity for the customers to obtain free professional advice concerning how well to utilize their loans. National Australia bank should also substantially decrease its loan interest rates and increase the amount of interest on savings by a small percentage. The price at which the customers are charged determines the level of demand for a company’s product (Reynolds and Lancaster 2012, P. 33). This means that by reducing the service cost the bank will be able to attract more borrows who will be aiming to reduce their borrowing costs. Moreover, increasing the interest on savings will attract more customers from its target market as they seek to maximize their returns. This strategy will attract more customers to the bank and this will present it with a good opportunity for building its competitive advantage. The strategy will create added value to the customers as the will be able to reduce their borrowings costs and increase the earnings on their savings. National bank of Australia should further increase its reach to its target customers. To do this it can establish networks with retail traders and small organizations as well as companies. Wright and Watkins (2012, p.30) notes that these networks can act as the bank’s agent and offer simple and informal banking services as well as advertise and link target customers with the bank. Moreover, these networks will enable the bank to save on its expenses as it would not be required to build extra branches. These networks will provide target segments with fast and convenient financial services and this will attract more customers hence enable the company to gain competitive advantage. The agents will provide target segments with well-situated locations where they can obtain financial services and this will add value to the target segments. The bank should also promote its services in the social networks. Lusted (2007, p. 11) notes that the social media presents companies with a cheap method of advertising their services. Moreover, the fact that more people are joining social networking sites requires companies to utilize them in order to advertise their products. The National Australian bank can strengthen its competitive advantage by using the social networks to attract and capture more customers from the target markets. The bank can utilize the social networks like facebook and twitter to communicate to the customers in the target market and this can influence them to join the bank. By attracting more customers the bank will be able to gain competitive advantage over its competitors. Social networks will provide the target segment customers with a means of communicating with the company hence this will add their value. Recommendations According to Kapoor (2011, p. 311) banks offer similar products and services and this creates a challenge in enhancing their competitiveness. National Australian Bank should come up with differentiated and innovative products in order to enable it create and gain competitive advantage. To do this, the bank can launch products to match different sectors of the economy and different economic conditions of its target customers. National Australian Bank should also adopt new marketing strategies in order to enable it to remain competitive. This is due to the fact that the Australian banking industry has experienced increased competition as banks strive to attract more customers. The bank can utilize marketing strategies like direct marketing whereby it can send emails and short messages to its target customers. Moreover it can utilize customer lifecycle based marketing strategies which will involve using customer data to conduct marketing campaigns. The bank can also sponsor Australian celebrities in order to enable them to act as the bank’s brand ambassadors. National Australian Bank should also undertake after sales marketing so as to improve customer retention. It can do this by sending small gifts to its customers. Additionally, the bank can undertake after sales marketing by reminding its previous customer’s about its service offers and new products. Furthermore, the bank can embark on after sales marketing by personalizing the messages that it sends to its customers. National Australian Bank should also intensify existing customer relationships so as to build strong relationships with them. To do this, the bank should collect data about its customers in order to determine their needs. Furthermore, keeping updated records about its customers can also help it to intensify its relationships with its customers. In addition, the bank should follow its customers in order to assemble information about them and at the same time to demonstrate interest in them and this can assist in serving them in a better way. Conclusion The National Australia bank wide range of products and services has enabled it to create and deliver value to its target customers in urban, rural and international markets. However, the increased competition from major banks in Australia necessitates it to come up with new marketing mix strategies in order to create competitive advantage and increase its customer’s value. The bank can do this by reducing its lending rates, increasing its reach to target customers and undertaking social media promotion. References ANZ 2012, Australia and New Zealand Banking Group, Viewed 11 September 2012, Commonwealth Bank, The Common Wealth Bank, Viewed 11 September 2012, Bowie, D & Buttle, F2004, Hospitality Marketing, Elsevier Butterworth-Heinemann, Burlington. Dibb, S & Simkin, L 2012. Marketing Briefs, Elsevier Butterworth-Heinemann, Burlington. Kapoor, R 2011, Service Marketing, Tata McGraw Hill, New-Delhi. Lamb, C, Hair, J & McDaniel, C 2008, Marketing, South- Western Cengage Learning, Mason. Lusted, M 2007, Social Networking, ABDO Publishing Company, Minnesota. Masterson, R & Pickton D 2010, Marketing, SAGE Publications, London. National Australia Bank 2012, Banking in Nab, Viewed 11 September 2012, Nwankwo, S & Gbadamosi, T 2011, Entrepreneurship Marketing, Routledge, New York. O’Guinn, T, Allen, c & Semenik, R 2011, Advertising and Integrated Brand promotion, South- Western Cengage Learning, Mason. Pride, W & Ferrell, O 2010, Functions of Marketing, South-Western Cengage Learning, Mason. Reynolds, P & Lancaster, G 2012, Marketing Made Simple, Elsevier Science, Woburn. Terrisonera 2012, Customer Relations Management, Viewed 11 September 2012, < http://www.google.co.ke/imgres?imgurl=http://reports.teliasonera.com/2007/crreport2007/img/content/CR_management_framework_diagram.gif&imgrefurl=http://reports.teliasonera.com/2007/crreport2007/cr-management-framework/index.html&usg=__SDIRYTHuegfvi-kdCH_Kf_o> Westpac 2012, Personal Solutions, Viewed 11 September 2012< http://www.westpac.com.au/>. Wright, M & Watkins, T 2012, Marketing Financial Services, Butterworth-Heinemann, Melbourne. Wright, M & Watkins, T 2011, Marketing Financial Services, Butterworth-Heinemann, Melbourne. Read More