Executive Summary

ABC Bank is a retail bank in UK which has almost 500 branches in the UK. The bank will offer its clients online interest bearing product in the market. In recent years people trend of saving money has increased. Since the government in 1990's announce ISA accounts people showed their great interest on it. Currently many banks are offering ISA Saving accounts.

There are more than 90% banks offers online interest bearing products - for long term and short term. Long-term products consist of bonds however, short term products includes saving accounts. The terms are vary according to different banks' market strategies, some offers monthly basis and others offer yearly basis. The minimum amount is £1 to £30,000 the interest will be Tax-free. This new online bearing product will help us to generate revenue for our bank.

With a 3.20% interest rate we will offer discount vouchers, facilities of online billing (as this is very unique saving account in the UK's market that offers such type of facilities). This will be the unique eSaving account in the UK's market; the purpose of such facilities to our clients is the part of our marketing strategy. The future expansion include transfer of funds by mobile phone communications. This unique product also offer customers to deposit their salaries in it and can withdraw at any time so you can say one can enjoy the facilities of current account with this eSaver account. The interest amount will be given on the last balance amount deposited in the last business day of the week

Although there is a so competition in the market yet I believe this new eSaver account will catch more customers.

Situational Analysis

PEST Analysis:

- Market size is very big, annual growth rate is high.

- In the past few years trend of saving has grow up, the life style of people shows savings are important for their future.

- The UK government is very helpful and encouraging to promote saving trends.

- The political climate is very stable and democratic which will encourage us to launch this product, as the there are no threats from government policies. There is no uncertainty in people; except the current recession. However, the UK market is stabilising day-by-day.

- Real GDP growth 3.026% which signs positive towards new business.

- Rate of technological innovation is high which encourages us to adopt new technologies in the future expansion.

Uniqueness

Our online direct saving product is unique because we have a competitive advantages at other banks / organizations marketplace because of our eSaver interest bearing account with have current account facilities.

UK MARKET ANALYSIS:

In UK banking industry both monthly and yearly basis ISA accounts are offered by bank. In the current economic environment people trend is in monthly interest rather than yearly. In the Table 1 there are the ten banks/account providers in market who offer ISA saver accounts monthly basis.

Table 1

Provider/Account

Account Type

Interest AER

Notice Provide

Rate Type

Transfer in

Min. Invest. (GBP)

Transactions by

Internet

Phone

Branch

FIRST DIRECT

Easy Access

3.00%

Instant

Fixed

Yes

1

Yes

Yes

No

cash e-ISA

STANDARD LIFE BANK

Easy Access

2.65%

Instant

Variable

Yes

1

Yes

Yes

No

Direct Access ISA

BARCLAYS

Easy Access

2.58%

Instant

Variable

No

1

Yes

Yes

Yes

Golden ISA

ING DIRECT

Easy Access

2.50%

Instant

Variable

No

1

Yes

Yes

No

Cash ISA

INTELLIGENT FINANCE

Easy Access

2.50%

Instant

Variable

Yes

1

Yes

Yes

No

Cash ISA

DUNFERMLINE BS

Notice ISAs

2.27%

90 Days

Variable

Yes

1

No

No

yes

90 Day Notice Cash ISA

NATWEST BANK

Easy Access

2.00%

Instant

Variable

Yes

1

Yes

No

No

e-ISA

HSBC

Easy Access

1.75%

Instant

Variable

Yes

1

Yes

Yes

Yes

Cash e-ISA

HSBC

Easy Access

1.20%

Instant

Variable

Yes

1

Yes

Yes

Yes

Variable Rate Cash ISA

NATWEST BANK

Easy Access

0.50%

Instant

Variable

Yes

1

Yes

Yes

Yes

Cash ISA

NatWest Bank is offering two ISA products with different AER 2.00% and 0.50% respectively. The lowest (0.50%) AER is for those people who have already account with NatWest Bank. In case of HSBC, it also offers two ISA products 1.75% and 1.20% AER. 1.20% AER is only available to existing HSBC internet banking customers.

Product & Technology Analysis

Out of the above 10 only 10% do not offer internet banking and inside branch operations, and 20% phone services. This seems there is a great potential of direct product in the UK market. There is none of them who offers eSaver with current account facilities, which makes us unique.

SWOT Analysis

Threats Vs Strengths

Threats:

  1. The main threat for this product is Securities issues. Financial Services Authority (FSA) warned that "insider fraud" is one of the most serious fraud threats faced by banks.
  2. Mostly banks are offering same product, so we have a big competition.
  3. New entrants can compete.

Strengths:

  1. We have already installed technology from “Actimize” to help detect and prevent potential fraud committed by people. Secondly, we will use .NET or php server as these both considered high secured, as well as graphical and user friendly.
  2. We offer good interest rates as our competitors.
  3. We have a strong image which attracts key consumer groups. Secondly we have unique type of product in its kind.

Weaknesses Vs Opportunities

Weaknesses:

  1. We have no technical staff to run / manage new online direct product. For that purpose either we need to recruit new staff externally or training the existing ones.
  2. We have limited financial resources.

Opportunities:

  1. UK banking market is growing so we have opportunities to expand in without opening new branches.
  2. Using this online product we can catch new market out side the UK.
  3. Symbian, Android and Microsoft platforms enable us to expand our business fro ordinary pc to mobile phones.

Marketing Research

In business, demand is always changing and therefore it is essential to know how things are changing. Although this is a long-term investment but its result will be fruitful for us. In the current economic situation in UK where people are loosing jobs and an uncertainty of income, so people trends show towards saving, if they save their money for short-term to long-term and get an handsome amount in terms of interest on it is everyone's wish, but it is tired to wait in a long queue to open a saving account in Bank. In a study about 48,755,000 (75.3%) people in UK using Internet at their homes, offices or internet cafes [1], and about 90% banks offers online account open facilities. If we launch monthly interest bearing eSaver account we can catch a big market.

Market research requires a special form of skill and therefore market research companies are often employed because they have the necessary experience and also because market research takes up a lot of time. But in our case we have already a R&D department established in our Bank. Although we have some knowledge about our competitors - there products and services, but this information can not be sufficient without a proper market research conducted by the Research Department.

Research methodologies:

There are two methodologies will be used to collect the data.

1) Desk Research (Secondary Data)

2) Field Research (Primary Data)

1. DESK RESEARCH:

Using this methodology we will collect the secondary data like; Surveys published from government agencies, information published on Internet etc. And I think this the best methodology for this new business.

2. FIELD RESEARCH:

Using this methodology we can collect the Primary data using questionnaires, online surveys, telephone surveys and mail surveys.

Using these both methodologies we can get required information.

Marketing Strategy

No. of Advertising strategies:

The two types of advertising strategies will be used to promote the product.

1) Online, 2) Offline

Online strategies will involve advertise on Internet - Google, Yahoo, Government Webster, Webmail servers.

The offline strategies will involve in Publishing community magazines, Newspapers, Leaflets, Local council's papers.

Measurement of strategies:

Our marketing strategy will focus our target clients considering or SWOT analysis.

PRODUCT:

The product is eSave ISA (Online direct interest bearing product)

PLACE:

To operate this new product we are using our Webster, as well as we also exist in 500 branches in the UK. We will also offer telephone services in terms of people who have enquires or difficulties in the operations.

PRICE:

From the market analysis we found there is a 0.5% to 3.00% AER on at least investment of £1 per month. In our case we will offer 3.20% AER on monthly basis (which actually on the last amount in the end of week) to cope the competition in the market.

PROMOTION:

We have developed a comprehensive advertising and promotion strategy, which will be implemented by the best possible way. We expect to have a presence in several national magazines as well as online webmail and search engines.

Competitions:

There are two competitors in this market:

1) Banks 2) Non-Banking organizations

Both of these competitors offer from 0.5% to 3% interest rates, we will be able to attract the interest sensitive market without much work. Our second main advantage is the accessibility of our services and the type of saving account. The time and profit conscious customer will appreciate our swift application process i.e. user friendly and the interest rate we offer. Additionally there are several phone based computer help services that offer help via the phone.

Implementation

Realistic implementation schedule:

The following milestones identify the key marketing programs. It is important to accomplish each one on the time and on the budget.

MILESTONES

Marketing Plan Completion

Website Completion

Marketing and Promotions

Feedback / any loopholes rectification

Implementation

Jan

Feb

Mar

April

May

June

July

Aug

Sep

Oct

Human resources:

As this product is online base so we can predict sever side down fault, web securities issues and the most user friendly hence following three roles will be sufficient to run the product smoothly and then look after them.

Sr.#

Job Role

No. Of personnel

1

CISCO qualified engineer

06

2

Web developers

04

3

Internet Security engineers

04

Critical paths:

The most critical path of the implementation of this strategy is time management and to reduce the expenses and further cost.

What if's scenario

The job of the project manager is to allocate time and resources to make sure that the project is completed on time without wasting resources. If the task can not be completed in given time frame he must appoint more personnel, appointing more personnel is expensive but it will be too much expensive to start and finish the task without achieving its objectives.

Financial Summary

Breakdown of marketing cost (Excluding software development)

#

DESCRIPTION

COST (M)

1

Online marketing

20.00

2

Offline marketing

30.00

3

Equipment Purchase

100.00

4

Encryption

10.00

5

Webhosting

5.00

6

Appointing personnel (yearly)

100.00

7

T3 line

20.00

TOTAL APPROX. COST

285.00

No. of clients:

We have currently 25,000 clients with this additional new product launch we are expecting almost double of clients.

Approximate Revenue estimate of next three years

Year 1 (in Billions)

Year 2 (in Billions)

Year 3 (in Billions)

Sales

25.0

45.0

70.0

Expenses

3.00

2.50

2.50

Net Profit (before Tax)

22.00

42.50

67.50

The following targets can be achieved by well designed market strategy and customer satisfaction which will be done by our CRM department. The expenses will be decreased due to already installed equipment, but we also assumed upgrade of technology.

Controls & Measurement

It is very important to monitor not just the sales of the product but also how the product is performing in the market, the clients' attitude and behaviour. What the customers like in it? What other facilitates we can offer? What slightly changes cam improve it?

So there will be a quantitative research on product, its marketing strategies and of course technical research on its security issues monitored and controlled. Quantative analysis are undertaken to determine the success and the failure of the launch. These analysis will be considered carefully.

The advertisement and promotions will be monitored in customer's surveys - usually by email, telephone calls either they are satisfied with us or not. This practice will encourage our new customers to use our services. Another method to attract the new customers is to offer discount vouchers to this online interest bearing product.

To competitors' reactions on this product will be monitored continuously basis to see what tactics they are using either to prevent or to attract the success.

Source: Essay UK - http://ntechno.pro/free-essays/finance/abc-bank.php


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