Standard Chartered marketing communication strategy and competitive position - Lab Report Example

?PART I: STANDARD CHARTERED MARKETING COMMUNICATION STRATEGY Standard chartered discovered marketing as the group expanded its operations from local perspective to a global perspective across diverse-cultural set of markets, Asia, Africa and Middle East for onstance. The bank admits the fact that it serves multiple geographies, different people with diverse values and significant cultures. This has enabled standard chartered to develop a strategy that focus on understanding of its markets’ core values to offer distinguished products and services to consumers with respect to their local requirements. The bank claims that it has developed a ‘consistent marketing strategy’ through constancy of efforts, stanch commitment to miscellaneous values and cultures and focused on relationships with local customers across the target markets. Standard chartered asserts that the bank has an unambiguous straight forward strategy that revolves around the market and consumers it serves. It has classified its marketing strategy on two major areas: standard chartered for consumers and standard chartered as the corporate brand. Amongst consumers there are two set of markets: the individual consumers, who consume bank services for themselves; and second set is of business/commercial consumers, who utilize bank services for commercial purposes. Standard chartered has developed wholesale banking for commercial consumers’ category and consumer banking for individual consumers’ category. Marketing is an ever changing and sprouting discipline of businesses; companies always have a room for development and advancement (Vanhuele and Wright, 2008). The bank has to broaden the base of its marketing communication strategy to effectively converse the different marketing messages, to different set of consumers it serves, in the most appropriate manner which could influence the target audience and trigger the desired response out of each target group. There are three marketing strategies that fit Standard Chartered intent to serve the market: push, pull and profile strategies. The bank has to adopt these strategies as each meets a separate objective using a separate approach, thus, supporting the overall mission. Push strategy requires the bank to direct marketing activities to propel the products to consumers. It is more a selling concept, supports the sale organization of the bank and helps them design sales programs over push strategy (Kotler, 2009). It requires the bank to encourage and motivate the consumer, direct selling and negotiating with the prospects, emphasize point of sale promotions and advertisements, and performing other promotional activities to forcefully throw the banks’ offers and services to the consumer. It is appropriate for standard chartered as the retail banking structure in its target market: Asia, Africa and Middle East enable the bank to push its offers to consumers. Products/Services Push Consumers Pull strategy involves the bank to design marketing activities in a manner that would fetch the consumers to the products and services themselves by enhancing their visibility (Kotler, 2009). It is more a branding concept for it supports the organization to design more customer-driven marketing programs that would develop strong bank-consumer rapport which is the ultimate objective of Standard chartered bank. It requires the bank to establish consumer associations with the bank through mass communication programs, mass-advertising campaigns, sales incentives and buzz marketing campaigns to create word of mouth influence. Pull strategy supports standard chartered ideology of understanding local consumers and markets, and their respective cultures, consequently, its attractive for effective communication strategy. Products/Services Pull Consumers Finally, the third marketing strategy which encompasses a broader marketing perspective is profile strategy. This strategy reveals the corporate reputation of an organization. It has deep orientation in corporate branding which identifies what an organization is about, who it serves, what it offers, how it operates and how it is significant to consumers than others in the industry. The profile strategy is vital for standard chartered as it sustains the bank’s overall corporate intent to become world’s best international bank. For the standard chartered to become ‘the best international bank’, it has to identify its competitive arena, its edge over competitors, the benefits people could avail only with Standard chartered, its business efficiencies and commercial conduct etc. So, the bank clearly needs to adopt profile strategy for efficient corporate image communication. Above and beyond the adoption of push, pull and profile strategies, standard chartered has to integrate the implementation of these strategies by ensuring that all the components of each strategy supports one consistent objective and reinforces one consistent message of; becoming the best international bank. Part II: STANDARD CHARTERED COMPETITIVE POSITION Standard chartered bank offers both commercial and investment banking services to its target market (Standard Chartered a). Standard Chartered functions in over 70 countries across 7 continents holding about 1,700 offices; it has a huge list of competitors in each region it operates (Standard Chartered b). However, following international banks compete with it in the Asian, African and Middle Eastern emerging markets. HSBC is one of the largest providers of commercial banking and investment banking in the world. It operates in 86 countries. Citigroup is another international commercial banking giant, is the fourth largest bank in the United States in terms of deposits. Note that Standard Chartered has confronted with direct-indirect competition from local participants in both banking sector as well as from other financial intermediary organizations. The competitive position of Standard Chartered identifies the strengths that could be leveraged to avail many opportunities for the bank at one hand, but on the other hand, it also spots many weaknesses along with the threats that the business environment uncertainty may pose to the bank in future. Strengths: The bank enjoys competitive edge from various strengths sources. It has strong employee base with commitment to cultural values and high performance. The bank’s people strategy emphasizes over employee engagement, developing and maintaining leadership capabilities and rewarding employees. The bank’s reward policy does not focus on the end outcome, but on the means to an outcome, i.e., not only for what is delivered, but also for how it is delivered. The company’s another edge over competitors is its profound understanding of local markets. Moreover, “here for good” campaign has improved the bank’s focus on culture and values, enhancing the distinct competitive advantage (Standard Chartered e). It enables the emerging market to associate them with the bank’s ideology (Standard Chartered c). Unlike HSBC and Citibank, another competitive edge stems from standard chartered’s customer-driven orientation; which enables the bank to offer diverse products responding to the unique requirements of the market, entrenched in significant cultural values. e.g. Saadiq banking services to Muslim world. Opportunities: The growth projections of Chinese and Indian economies along with other developing markets provide SC a wide range of possibilities for expanding financial services to facilitate trade within and outside these markets. Focusing on core values, the bank has designed a trust campaign to leverage the brand’s image across its products and against the competition. Weaknesses: The bank has limited the focus to emerging markets. Unlike HSBC and Citibank, Standard Chartered is operating under capacity and not leveraging the capabilities in western markets. The cost of retaining and advancing employee talent is increasing in developing markets. Business process and technology’s contribution to operations is not aligned with bank’s priorities of employee development and commitment to cultural values. Threats: The limited focus over western market could expose the bank to unanticipated threats from outside the region and make it vulnerable to miss the opportunities lying beyond the region. Severe competition is posed by local as well as international banks and other financial organizations. The technology infrastructure is weak in developing markets than it is in the West. The company must evaluate its key strategies on the grounds of ever changing economies and must revise its approach; such that the bank could transform weaknesses into strengths and thereby reducing the possibility of getting affected by market threats. Moreover, the strategy must be build to utilize the bank’s strength at full capacity to seize market opportunities out of the competition. Standard Chartered is using many promotional campaigns to distinguish itself from competitors. It has transcended its promotional activities to sponsorship of marathons, trust advertising campaign, here for good campaign, philanthropic campaigns etc. However, the bank’s communication strategy is relatively passive as the local competitors in India (Axis, ICICI, Kotak Mahindra, etc.) and Pakistan (MCB, UBL, Habib Bank, Faysal bank etc) are more vigorous players. These local contenders are marketing their products, services, brand and corporate image more aggressively than do Standard Chartered in these markets. In India the local public and private banking sector along with other financial services providers are proactive players of the financial market. They are targeting the consumer overtime through pushing offers motivating and stimulating purchase response from consumers, repetitive communication campaigns to facilitate brand recall, preference and purchase, reinforce brand image to consumers and corporate image to competitors etc. Standard Chartered, on the other hand, lacks aggression in its marketing campaigns. The bank has sound brand image and deep knowledge of its markets and its business operations are appropriate and focus over developing human resource value for it has wide combination of product and services. The main flaw with the company’s competitive strategy is that its efforts are not coordinated well to assist its mission of becoming world’s best bank. It recognizes itself as a responsible employer and a trustworthy organization (Standard Chartered f), but this is a secondary concern for a consumer. Standard Chartered essentially misses to clearly integrate the actual product and services offered to the target market. Moreover, the reinforcement of the brand image and the product-services’ offers is not consistent for attracting masses to the bank. There is an excessive emphasize over knowledge of target market, this should be incorporated with the rest of bank’s processes and an equitable focus must be given to all the key business areas to get real and complete competitive edge from all respects. PART III: DIFFERENT APPROACHES TO STANDARD CHARTERED STRATEGY Standard Chartered’s marketing intent is to be the world’s best international bank. This objective comes from the group’s promising interest in seizing growth opportunities beyond geographies, desire to attain economies of scale, diversifying risk across diverse markets, global mobility of customers (Standard Chartered g). All these forces stipulate Standard Chartered bank to adopt a global marketing strategy. There are three alternate strategies that could assist Standard Chartered in its global business operations. Standardization Strategy: This strategy is aligned with the bank’s consistency approach. The strategy requires the bank to maintain focus on diverse cultures and values but at the same time it demands the company to identify similarities between cultures and also underscore the key differences that exist amongst the emerging markets. The similarities are identified to transfer and leverage the existing marketing programs across markets to save cost; while the differences are emphasized within local markets to design differentiated value marketing mix to win local markets. The company must also excel its trust marketing campaign around green marketing; by claiming that the company is promoting the cause of a safe and healthy planet. The blue S and green C of standard chartered represents clear blue skies and clear green earth respectively. This communication can be transferred across borders to develop awareness amongst target market and to identify Standard Chartered as socially responsible organization. The strategy has inherited advantages and tradeoffs for the bank. a) The overall cost is reduced relatively through similarity focused transferable existing marketing programs, i. e. semi standardization. b) However, the scope of differentiation is affected. c) Speed of entry and penetration into markets is high. As existing products are offered right away based on similarities. d) Control over the industry is moderate. Competitive Strategy: This strategy supports the bank’s intention to be the ‘BEST’ bank of the world. Since it is a comparative evaluation of Standard Chartered on consumer considerations as well as on organizational considerations in competitive arena, therefore, the strategy focuses on the two dimensions. The bank is operating in developing markets where the product category or even the industry is not fully developed; this gives the bank an advantage of designing innovative offers, in compliance with cultural values, to attract market. The company is also required to educate the consumer market for easing acceptability and adoption of new offers. Since the business infrastructure in developing markets is not well developed, therefore introducing better processes and technology provides edge to the bank against the competition in local markets. The competitive strategy also bears following merits and demerits for Standard Chartered: a) High cost of investment in technology and consumer awareness & education program. b) Chances of getting the lead against competitors are also high. c) Brand image can be built on strong foundations through consumer education. d) Speed of entry and penetration into market is very low. e) Control over industry is high. f) Resistance to change and technology exist in the emerging markets. Customization Strategy: This strategy follows think global act local syndrome; that views all market segments as different and special that should be treated individually; it requires the bank to bring about widespread changes in marketing programs. The strategy focuses over product, pricing and communication programs. The product must be designed over individual needs, specific value requirements and propositions of each market segment. The product must offer specific emotional and rational benefit to the consumer. It must also strengthen the brand image in that target market. E.g. standard chartered launch of saadiq banking is a customized product offer to Asian-Muslim countries. Pricing is another mandatory consideration of marketing mix. The strategy requires the bank to alter its pricing according to an individual market price perceptions. The bank can use value pricing which focuses and utilize the key sources that transfer value to the targeted consumer; and determine how much the consumer is willing to pay for these value sources. For instance, the key value banking considerations for a market like India are: safety, ease of transaction, reliability and credibility, price consciousness, religious concerns for interest rates, courtesy in customer dealing etc. The customization strategy also requires the bank to alter its communication program and relate the promotional message with the specific social values and rational/emotional benefits. The bank must not underrate the DO NOTS of a culture and accordingly must show compliance to the ethical standards maintained by a society. The competitive strategy also holds some advantages and disadvantages for Standard Chartered. a) It increases cost to a great extent due to mass customization of marketing programs. b) The nature of local business differs from that of global business, this may hamper coordination amongst geographically disperse business units. c) Bank’s speed to market penetration is low. d) Supports Standard Chartered diverse target market ideology. e) Brand success is very high and products’ acceptability is also high. Above and beyond all these strategies, Standard Chartered must do analysis of the actual market situation and on the basis of market evidences and research knowledge select either or a combination of these strategies to achieve its aim of becoming world’s best international bank. References Aggarwal, P 2004, ‘The Effects of Brand Relationship Norms on Consumer Attitudes and Behavior’, vol. 21, no. 1, pp. 87-101. 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Available at http://www.standardchartered.com/en/about-us/our-history.html [Accessed 23 March, 2012] Standard Chartered b, Standard Chartered locations worldwide. Available at http://www.standardchartered.com/en/about-us/standard-chartered-worldwide/index.html [Accessed 25 March, 2012] Standard Chartered c, Here for people. Available at http://www.standardchartered.com/en/about-us/our-brand-and-values/here-for-good/here-for-people.html [Accessed 23 March, 2012] Standard Chartered d, Here for the long run. Available at http://www.standardchartered.com/en/about-us/our-brand-and-values/here-for-good/here-for-the-long-run.html[Accessed 21 March, 2012] Standard Chartered e, Diversity and inclusion for our customers. Available at http://www.standardchartered.com/en/about-us/diversity-and-inclusion/diversity-for-our-customers.html [Accessed 23 March, 2012] Standard Chartered f, Diversity and inclusion in the workplace. Available at http://www.standardchartered.com/en/about-us/diversity-and-inclusion/inclusion-in-the-workplace.html [Accessed 22 March, 2012] Standard Chartered g, Our Strategy. Available at http://www.standardchartered.com/en/about-us/who-we-are/our-strategy.html[Accessed 22 March, 2012] Vanhuele, E.R. and Wright, M., 2008. Consumer Behaviour: Application in Marketing. The Cromwell Press Ltd. Trowbridge: Wiltshire. Read More