MARKETING MANAGEMENT-2013 2013 TERM REPORT- MARKETING MANAGEMENT STANDARD CHARTERED BANK-CUSTOMER VALUE
SUBMITTED TO: MR.EJAZ WASAY SUBMITTED BY: FARAH POONAWALA STUDENT ID: 13792 MBA EXE-SPRING 2013
TERM REPORT- MARKETING MANAGEMENT
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LETTER OF AUTHORIZATION
28 th April, 2013
Dear Readers As student of MBA Executive, my course instructor of Marketing Management Mr. Ejaz Wasay authorized me to present a research report on, STANDARD CHARTERED BANK PAKISTAN LIMITED- CREATING CUSTOMER VALUE. Iam required to conduct the research on the selected topic, in accordance with the acquired learning throughout the semester. The report is required to be submitted on 28 th April, 2013.
Sincerely, Farah Poonawala
TERM REPORT- MARKETING MANAGEMENT
3 LETTER OF TRANSMITTAL 28 th April , 2013 Mr. Ejaz Wasay Marketing Management facilitator Institute of Business Management Karachi
Subject: TERM REPORT ON STANDARD CHARTERED BANK PAKISTAN LIMITED-CREATING CUSTOMER VALUE Dear Mr.Ejaz Wasay Here is the final term report on the topic, CREATING CUSTOMER VALUE-STANDARD CHARTERED BANK PAKISTAN LIMITED which you had authorized me to conduct at the ending of this semester. The report is now ready for your perusal. This report is a brief portrayal of how a company or an organization works hard to create brand and not just launching but making a place in your consumers minds and how they create value for their customers in the competitive market. We have surveyed consumers choice as well as what makes your brand different from the other brands that exist in the market and why would a customer would want to bank with SCBPL rather than any other conventional or Islamic bank that are present in the market.. Our main focus was to get a birds eye view of the current market standing and the current image that STANDARD CHARTERED BANK enjoys at the moment! I fortunately managed to get my hands on one of the companys Personnel who helped me throughout in the making of this report. The making of this report has been a wonderful learning experience for me and I thank you for giving me this opportunity to avail it. I have worked diligently with my toiling endeavors to provide you a real and complete picture of how an organization builds up a value for its customers. I have tried to utilize all your teachings to the maximum keeping in mind your guidelines and support that you gave me throughout the semester.
Sincerely, Farah Poonawala
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LETTER OF ACKNOWLEDGEMENT
28 th April , 2013 Mr. Ejaz Wasay Marketing Management facilitator Institute of Business Management Karachi
Dear Reader: It has been a great honor for me to prepare a report on STANDARD CHARTERED BANK-CREATING CUSTOMER VALUE which was assigned to me by my course facilitator of Marketing Management - Mr. Ejaz Wasay, without his guidance and support the compilation of the report would not have been possible.
Thanking you,
Sincerely, Farah Poonawala
TERM REPORT- MARKETING MANAGEMENT
5 EXECUTIVE SUMMARY The entire purpose of this report was to study how Standard Chartered bank creates value for its customers through offering proper products and services, how it has a competitive edge over other foreign banks and why would their customers just come to them rather than going to any other foreign bank or local bank. The answer to this question is that customers prefer banking with standard chartered bank because they have their preferences and have their own perceptions about certain products and Brand. Since Standard Chartered bank is the only foreign bank that has been serving its customers diligently and throughout their services they have been standing out with high quality service standards and providing value to its customers and increasing their portfolio by adding in new relationships that will stay with them for lifetime. They focus on making long term relations with their customers rather than short term. In an increasingly commoditized market, the way they serve their customers and their focus on continually improving the customer experience are key differentiators for their brand. Their service guarantees are time-bound assurances to serve our customers needs within a set timeframe. They have backed these commitments by either making donations to charity or crediting a customers account if they do not meet the specified timeframes. They represent a tangible way to demonstrate their commitment to the Charter as they deliver fast, friendly and accurate service whilst solving their customers financial needs and building relationships. The first service guarantee they launched was their eight-minute service pledge. An industry first in many countries, this pledge is now across nine markets including those in Greater China. It reinforces their commitment to instill a strong service culture and demonstrates that they value their customers time. In 2012, we will be extending our eight-minute service pledge in further eight markets.
TERM REPORT- MARKETING MANAGEMENT
6 Table of Contents 1.Background of Standard Chartered Bank ................................................................................................. 7 1.1 Over view of the company ...................................................................................................................... 7 1.2 Standard Chartered in Pakistan7 1.3 Vision mission values .............................................................................................................................. 8 1.5 Who we are.8 1.5.1 Our business9 1.5.2 Our Strategy.9 1.5.3 Our growth.10 1.5.4 Our brand values..10 1.5.5 Diversity & inclusion11-12-13 2. Process for value creation & delivery14 3. How does the organizational structure support the process..15 4. Exploring creating and delivering value at SCB..16 4.1 EXPLORING17 4.2 CREATING18 4.3 DELIVERING19-20-21 4.4 The customer value hierarchy21-22 5. Competitive Scenario of SCB22-23-24 6. Challenges faced by SCB.24-25 6.1 Rules that must be followed..26 7. Support received from employees26-27 8. Conclusion.28 References29-30 TERM REPORT- MARKETING MANAGEMENT
7 1. BACKGROUND OF STANDARD CHARTERED BANK PAKISTAN LIMITED 1.1 OVERVIEW OF STANDARD CHARTERED BANK Standard Chartered leading the way in Asia, Africa and the Middle East Standard Chartered PLC, listed on both London and Hong Kong stock exchanges, ranks among the top 20 companies in the FTSE-100 by market capitalization. The London-headquartered Group has operated for over 150 years in some of the world's most dynamic markets, leading the way in Asia, Africa and the Middle East. We have produced seven years of record income and profit, primarily as a result of organic growth. Standard Chartered aspires to be the best international bank for its customers across its markets. The Group earns around 90 per cent of its income and profits in Asia, Africa and the Middle East, from its Wholesale and Consumer Banking businesses. The Group has 1700 branches and outlets located in 70 countries. The extraordinary growth of its markets and businesses creates exciting and challenging international career opportunities. Leading by example to be the right partner for its stakeholders, the Group is committed to building a sustainable business over the long term and is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity. It employs around 75,000 people, nearly half of whom are women. The Group's employees are of 125 nationalities, of which about 70 are represented in the senior management
1.2 STANDARD CHARTERED BANK PAKISTAN Standard Chartered is the largest and fastest growing International Bank in Pakistan. The Bank has been operating in Pakistan since 1863 when it first established its operations in Karachi. Standard Chartered now employees over 4,000 people and has a branch network of 132 branches across 29 cities in the country. Standard Chartereds core businesses in Pakistan are in Consumer Banking and Wholesale Banking. Standard Chartered Pakistan is the first international bank to get an Islamic Banking license and to open the first Islamic Banking branch in Pakistan and has been given credit ratings of AAA/ A1+, the highest long-term rating assigned by PACRA to any private sector commercial bank. The Banks efforts have been recognized by independent and credible authorities; we won "Best Foreign Commercial Bank in Pakistan" award by Finance Asia; "Best International Trade Bank in Pakistan 2009" by Trade Finance Magazine, a publication of Euro money; "Best Foreign Exchange Provider" Award from the Global Finance Magazine for 2010; Triple A awards for the 'Best Debt House in Pakistan' award by The Asset; "Pakistan Deal of the Year 2009" award by the Islamic Finance News; 'Awards for Excellence', London 2009, by the Global Custodian; Consumers Choice Award for being the "Best Credit Card Provider in Pakistan" by the Consumer Association of Pakistan. The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 TERM REPORT- MARKETING MANAGEMENT
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1.3 VISION MISSION STATEMENT
To be the Best Bank in Pakistan, leading the way with superior performance, sustained service excellence and engaged people
1.4 STANDARD CHARTERED BANK (PAKISTAN) LIMITED BOARD OF DIRECTORS (AS AT MARCH 08, 2012)
MR. CHRISTOS PAPADOPOULOS CHAIRMAN & NON EXECUTIVE DIRECTOR MR. MOHSIN ALI NATHANI CEO / EXECUTIVE DIRECTOR MR. RAHEEL AHMED NON EXECUTIVE DIRECTOR MR. RAY DUGGINS NON EXECUTIVE DIRECTOR MR. NAJAM I. CHAUDHRI INDEPENDENT NON EXECUTIVE DIRECTOR & CHAIRMAN AUDIT COMMITTEE MR. SHAHID ZAKI INDEPENDENT NON EXECUTIVE DIRECTOR MR. PARVEZ GHIAS INDEPENDENT NON EXECUTIVE DIRECTOR
Standard Chartered bank provides a wide range of products and services for personal and business customers across 68 markets. Since SCB has been operating in Pakistan for more than 140 years they have really established themselves in the minds of the customers who have strong Brand loyalty with Standard Chartered.
1.5.2 OUR STRATEGY:
We aspire to be the world's best international bank, leading the way in Asia, Africa and the Middle East. We focus on building profound and old relationships with our clients and customers and constantly look to improve the quality of our products and services. Our success In the last nine years we have reported record income and profits. Twenty-four of our markets now deliver over US$100 million of income, fourteen over US$100 million in profit. Listed on the London, Hong Kong and Mumbai stock exchanges, we rank among the top 20 companies in the FTSE-100 by market capitalization. Our focus on basic banking Our success is a result of being passionate with the basics of banking - balancing the pursuit of growth with a disciplined management of costs and risks and keeping a firm grip on liquidity and capital. Through our international network and expertise, we facilitate trade across markets, enable multinational clients to conduct complex business transactions and service the needs of an increasingly international consumer base
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10 1.5.3 OUR GROWTH: Pakistan
Our footprint: 143 branches 200 ATMS 4,500 employees We opened our office in Pakistan in 1863 and employ 4,500 staff. Were the oldest and largest international bank in Pakistan and the first to get an Islamic Banking license and open an Islamic Banking branch. We were awarded the Best Bank in Pakistan by The Asset Triple A Awards in 2011 and by Euro money Awards for Excellence in 2010. 1.5.4 BRAND & VALUES: By doing things the right way we can support our customers and clients while having a positive impact on the wider economy
Our distinctive culture and values act as our moral compass and are the reason why clients and customers choose to bank with us, and our employees want to join and stay with us. Our five core values are about openness, collaboration and putting the needs of the customer first. At all times, we aspire to be courageous, responsive, international, creative and trustworthy.
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11 OUR BRAND PROMISE
Strategic Intent
The worlds best international bank leading the way in Asia, Africa and the Middle East
Brand Promise
Here For Good Values Courageous Responsive International Creative Trustworthy
Competitive Positioning Delivery Collaborating to combine global capability and deep local knowledge to provide innovative solutions Customers & Clients Building long term relationships with our customers and clients delighting them with our service and solutions Discipline Balancing the pursuit or growth with firm control of costs and risks Commitment to stakeholders Our People A great place to work, enabling individuals to grow and teams to succeed Communities Trusted and caring, dedicated to being a force for good Investors A distinctive investment, delivering consistently superior quality. Regulators Demonstrating exemplary governance and ethics
Here for good captures the essence of who we are. It's about sticking by our clients and customers and always trying to do the right thing.
1.5.5 DIVERSITY & INCLUSION
Our strength is the diversity of our people, who mirror our customers and communities, enabling us to better understand their needs
We employ over 89,000 people, who speak 170 languages and represent 127 nationalities. Women make up almost half of our workforce, representing 21% of our senior management and 34% of our people managers. TERM REPORT- MARKETING MANAGEMENT
12 A. INCLUSIVE AT WORKPLACE Our inclusive environment helps us attract, retain and develop the best talent. We make each employee feel valued and respected for who they are and what they bring to the Bank. We also aim to improve the work-life balance of our people. How were inclusive We employ people based on merit, regardless of age, physical ability or disability, gender or nationality. We don't adopt quotas or positive discrimination. These are some of the ways were working towards an inclusive workplace: We have employee networks to provide social support, contacts, information and guidance All our mandatory training programmes are translated into our core languages, including Thai, Chinese, Bahasa Indonesian and Korean All new and renovated buildings are accessible to those with disabilities We use targeted recruitment programmes to support women who are returning to the workforce after a career break We run Women in Leadership programmes for talented women at middle management level We have flexible working arrangements including working from home, flexible hours and part-time working in process or in place in several markets We have a support guide for employing visually impaired employees We encourage our employees to leave the office earlier and spend time with family, friends or colleagues on a Friday. This has been adopted in over 30 markets.
B. DIVERSITY FOR OUR CUSTOMERS We're continually developing products and services that respond to our customers needs. In some cases, this involves adapting products and services and tailoring them to be appropriate and accessible. Here are some of our tailored products: partially secured loans with lower interest rates to women entrepreneurs in Bangladesh and Malaysia Islamic banking products in accordance with Shariah principles non-resident banking, providing discounted remittance charges between markets and other benefits Providing more than USD500 million to microfinance institutions. 80% of microfinance users are women TERM REPORT- MARKETING MANAGEMENT
13 my dream account, which helps families save and manage their childrens future financial needs all-women branches in India and Sri Lanka, providing customers with a safe and comfortable environment in which to discuss their financial matters our Diva account, which caters specifically for womens needs, with customized debit cards, discounts, benefits, and membership of the Diva club our Kenyan 'X Account' for men, which specifically caters to men with active lifestyles Networking opportunities such as roundtable breakfasts for female customers.
C.DIVERSITY FOR THE COMMUNITY (CSR) We support financial education and empowerment in the community as well as community engagement, through a range of initiatives, including our: Clinton Global Initiative commitment to provide financial literacy training to at least 5,000 women across Asia - announced in 2008 commitment to raise USD100 million by 2020 to help eliminate avoidable blindness and visual impairment through our Seeing is Believing Programme HIV and AIDS education programme, Living with HIV, which has educated more than one million people to help them make safer choices and stop the spread of HIV community investment initiative, Goal, which uses sport and life skills education to transform the lives of disadvantaged young women in India, Bangladesh, Nigeria, Jordan and Indonesia Employee volunteering scheme. Our staff are encouraged to spend two days volunteering for community-based non-profit organizations Process for evaluating and selecting suppliers also takes their diversity and inclusion into consideration. We actively participate in external networks to learn and share best practice through groups such as the Global Banking Alliance for Women, Community Business Diversity and Inclusion Asia Network.
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14 2. PROCESS FOR VALUE EXPLORATION CREATION & DELIVERY AT STANDARD CHARTERED BANK
For a business to be successful the only value your company will ever create is the value that comes from customers the ones you have now and the ones you will have in the future. Business succeeds by getting, keeping and growing customers. Customers are the only reason you build factories, hire employees, schedule meetings or engage in any business activity. Without customers you dont have a business. Standard Chartereds culture and values have proved a source of competitive advantage for them and are a key ingredient in the emotional connection between the organization and their employees - and, in turn, between their employees and their customers. They encourage customers and employees to join them and to stay with them.
how can Standard Chartered Bank identify new value opportunities for its customers?
Value Exploration
how can Standard Chartered Bank officially create more promising new value offerings? Value Creation how can Standard Chartered Bank use its capabilities and infrastructure to deliver the new value offerings more efficiently? Value Delivery TERM REPORT- MARKETING MANAGEMENT
15 3. HOW DOES THE ORGANIZATIONAL STRUCTURE AND CULTURE SUPPORT THE PROCESS At Standard Chartered Bank employees are trained to live the values that the organization holds since its inception. HERE FOR GOOD We bring our brand promise to life every day by living the values in how we work with our customers, colleagues, regulators, communities and suppliers. Our brand promise is at the heart of who we are as a bank and sets us apart from the competitors
Our team is here to give you Friendly fast and accurate service Solutions to your Financial Needs
Our goal is to be the bank You Recommend to Friends and Colleagues
PARTICIPATION MODEL CUSTOMER FOCUS BACK TO BASICS OUR CULTURE Responsive Trustworthy Creative International Courageous
OUR BRAND Here for good Marathons Volunteering
Solutions to your Financial Needs
Recognition of your overall Banking Relationship
Relationship
Friendly fast and accurate service Our 2013 Aspiration: $10bn Income, $3bn Operating Profit TERM REPORT- MARKETING MANAGEMENT
16 4. EXPLORING, CREATING & DELIVERING VALUE AT SCBPL 4.1 EXPLORING NEW VALUE OPPORTUNITIES AT STANDARD CHARTERED BANK How can Standard Chartered Bank explore new opportunities of growth in this competitive scenario? They constantly need to grow and develop themselves through exploring new opportunities and ideas through market research, coming up with new and innovative product offerings and services that the customers would want with their overall banking experience with Standard chartered bank Standard Chartered recently relaunched their Mobile Banking services in collaboration with IPHONE and IPAD Standard Chartered Bank is an international bank with 1800 branches on six continents, dozens of recent industry awards, and steadily increasing profits through organic growth and acquisitions. IPhone and iPad provide a perfect platform to expand the banks mobile services, both internally and to its increasingly tech-savvy customers. In the wake of the 2009 global financial crisis, Standard Chartered Bank immediately set to work reinforcing customer relationships. As a leader in the industry, they needed to regain customer confidence, and rebuilding that confidence is not about just pushing products and services its about using the best technology to foster deep, longstanding relationships with their customers. Its about helping them manage their money better. IPad and iPhone enable the bank to forge new customer connections and strengthen existing bonds. With iPhone and iPad, they are really looking at the next generation of banking, managing their customers money is a responsibility that they take very seriously, and their mobile services reflect that. TERM REPORT- MARKETING MANAGEMENT
17 4.2 CREATING VALUE AT STANDARD CHARTERED BANK After exploring new values for your customers and having done a complete analysis of the market that how the launch of Mobile banking would benefit the customers. Does it actually meet the customers thinking of what they perceive or expect out of that product. Is this what the customers of Standard Chartered Bank want or thinks about. To do these marketers must think from their customers point of view of how they perceive Mobile banking or any other service that is being provided to them. The Customer Perceived value of a product is the difference between the prospective customer's evaluation of all the benefits & all the cost of an offering & the perceived alternatives. Formally it may be conceptualized as the relationship between the consumer's perceived benefits in relation to the perceived costs of receiving these benefits. It is often expressed as the equation: Value = Benefits / Cost The customers get benefits and assume costs. Value is thus subjective (i.e., a function of consumers' estimation) and relational (i.e., both benefits and cost must be positive values). The components of customer value are deceptively simple. Product quality, service Quality, price, and image shape a customers perception of value. A firms strategy and Performance in these areas are integrated by customers into a perception of the value Proposition. This is particularly important for first time customers. In this highly competitive business environment, the customer will compare the perceived value of competitive offerings. The ultimate winner in the battle for the customers pocket book is the firm that delivers the best value from the customers perspective. These Components of customer value can be shaped into a simple model
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18 COMPONENTS OF VALUE
According to the above diagram it is very important for the marketers or in this case the people at Standard Chartered though have been working really hard to retain their customers not just for temporary basis but for lifetime relationship and to do that they need to put themselves in their customers shoes and think like them. Customer is the most important part of any organization and customer satisfaction is the only thing to get more customers, to make more profit. Bank is a service organization, here it is mandatory to satisfy its customers. SCB is a multinational bank with a very good reputation. Its always tried to provide better service to its customer. But it is not possible to any one or any organization to satisfy the entire customer. If SCB provides best service to its customer, there will be some people who will be not satisfied at all. Not only that, customer satisfaction level might be changed day by day. I observed that one customers choice his/her opinion, feelings about SCB products, behaviors are different from other customers, and satisfaction level is also varying from others. To run business successfully, every organization must measure its customers satisfaction level.
CUSTOMERS PERCEPTION ABOUT STANDARD CHARTERED BANK PRICE IMAGE SERVICES PRODUCT TERM REPORT- MARKETING MANAGEMENT
19 4.3 DELIVERING VALUE TO ITS CUSTOMERS UNDERPROMISE & OVER DELIVER! The above statement UNDERPROMISE &OVER DELIVER is not just a statement its an entire banking experience that Standard chartered delivers to their customers in terms of services, products and the brand itself. Consumers have varying degrees of loyalty to specific brands. The Product that Standard Chartered is offering to its customers needs to be tailored according to what the customers are actually expecting out of Standard Chartered Bank. The below mentioned diagram shows a small survey that I conducted by visiting one of Standard Chartereds known branch. I met a few customers who have been banking with Standard Chartered for years and would not stop banking with SCB for any other bank because they now maintain a relationship with their Relationship Managers and are very satisfied with the services that are provided to them and how their opinions are valued and taken into consideration by the employees. CUSTOMER CHARTER PROOF POINTS
They are courteous and friendly however I contact them The language they use is simple and easy to understand Opening my account is simple and hassle free On-line banking, phone banking and ATMs make my banking easier
I never have to wait too long to be served Staff always helps me on the spot Everything is processed very quickly
WE WILL PROVIDE SUPERIOR SERVICE FRIENDLY SERVICE FAST SERVICE TERM REPORT- MARKETING MANAGEMENT
20 Any problems are resolved quickly and satisfactorily Information is always accurate and I can complete My transactions correctly the first time
My needs are understood Advice provided is suitable, comprehensive and unbiased and helps me make my financial decisions I am confident that the products and services do what they say they will
I know my overall banking relationship is valued because of the additional benefits I receive such as better pricing and rewards and a Relationship Manager My overall banking relationship is recognized with my spouse and family receiving similar benefits and services I am recognized when I am overseas and it is easy to do my banking globally.
CUSTOMER SERVICE
For understanding the quality of customer services of Standard Chartered Bank I have collected opinions from the customers. Standard Chartered follows modernized services for attracting more customers. They have launched 24 hours telephone banking by which customers can easily be updated with their transactions and queries can easily be answered. They launched internet banking i.e. iBanking and SMS Banking in Pakistan by which one customer can access his/her account by sitting inside the house through internet/ mobile which is totally cost free. These are the three special features of SCB for capturing more customers. Commercial banks, in general, render certain services to their customers. It is expected that better service will bring more business for the concern. It is intended to estimate the level of satisfaction and to compare customer satisfaction level with bank executives perception about the level of satisfaction of customers. Usually customer want to get maximum service from a bank and the
WE WILL SOLVE YOUR FINANCIAL NEEDS ACCURATE SERVICE WE WILL RECOGNIZE YOUR OVERALL BANKING RELATIONSHIP TERM REPORT- MARKETING MANAGEMENT
21 bank officers also want to provide maximum customer satisfaction. In this connection I collected customers opinions through customers query. Customer relationships and company profitability are linked closely to product and service quality result in greater customer satisfaction. Standard Chartered plays a very important role in the banking sector in our country. It is very popular to all. I met different types of customers and talked with them about products and services SCB provides to them. I asked to the customers how many times they visit the bank and which type of transactions they do. Most of the customers informed me that they visit the bank several times in a month and get the different types of services. Without any official advertisement the branch set up Intelligence Queue Management System. A major part of the customers liked it because depending on the waiting time which was mentioned, they could do other work at nearby places like having food or talking on cell phone or they could take other services from Customer Service Officers or from the Service Ambassador or can meet with the Branch Manager. If waiting time is mentioned 10 minutes (approx.) then they can come back to the branch after 7/8 minutes for taking service outside. Before the implementation at Zamzama Branch, customers used to stand in the long queue but after that they can get service in a short time. Most of the customers choose the bank for banking for various reasons. They informed me various reasons behind choosing the bank better services, desired products, good will and international reputation. I asked few customers why they are banking with this branch not with the other branches. They replied me that the branch was situated near to their business offices or residents. Few customers told for familiar staffs and their swiftness and dealings capability. Standard Chartered fully understands the importance of time, convenience and efficiency to the success of customers business. They make easy the complex financial world for customers and help to maximize every opportunity. 4.4 THE CUSTOMER VALUE HIERARCHY CORE BENEFIT: For Standard chartered customers core benefit would be the services or benefit the customer is really buying. For instance a lot of customers use Debit card facility because they donot have to carry money in their pockets. Thats the benefit that they get from the product BASIC PRODUCT: Secondly turning the core product into the basic product, through inserting your debit card in the atm machine you can avail other facilities provided to you by the bank e.g. mini statement, balance inquiry, funds transfer bill payment etc. EXPECTED PRODCUT: when you hear the word debit card the first thing that the customer expects is that they will be able to withdraw cash anytime they want to from anywhere without visiting the branch. That is the Expected product. TERM REPORT- MARKETING MANAGEMENT
22 AUGMENTED PRODUCT: Exceeding customer expectations is like a cherry on the icing because giving the customer what they expect is an easy task by surprising them with something that they arent aware of is an achievement. Example recently the State Bank announced that now you can withdraw up to 50,000.This is something the customers were not expecting. POTENTIAL PRODUCT: This consists of all the benefits and services that Standarad Chartered Banks Debit card is providing to its customers. The potential product is the final product with all the services and benefits attached with it and the overall standing of one particular product definitely does affect the banks overall standing.
5. COMPETITIVE SCENARIO OF STANDARD CHARTERED BANK PAKISTAN
THREAT OF NEW ENTRANTS: The threat of new entrants is high as there are more banks which are coming up to satisfy customers. The number of banks is increasing at a faster pace for the last 6 to 7 years. Moreover some foreign banks like HSBC, Citi bank, UBL, Bank ALfalah and many Islamic banks are coming up and are expanding their network at a very fast pace and to survive in this scenario Standard Chartered has to maintain its level of innovation and keep growing at every stage.
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23 BARGAINING POWER OF SUPPLIERS & CUSTOMERS: The bargaining power for individual customers and corporate customer is very different. The main reason behind it is that the deposit of an individual customer is very insignificant compared to the total amount of deposits. Some corporate entities do have large deposits in Standard Chartered Bank and exercise strong bargaining power to receive special rates from the bank. SCB is currently market leader in providing wide range of banking services as of result of that they have strong strategic advantage. Depositors are supposed to be the suppliers of the banks. There are thousands of depositors from all walks of life. There are businessmen, service holders, farmers, students and people from virtually any other professions who are depositors of the banks. Big amount depositors have strong powers in determining interest rate of their deposits. Creditors are considered to be the buyers of the banks. There are thousands of creditors from all walks of life, mainly businessmen and the major buyers of banks credit amounts. Banks distinguish their prime customers from others by setting a prime interest rate for them. So currently the bargaining power of buyers (customers) is low and the bargaining power of the suppliers (banks) is moderately high.
THREAT OF SUBSTITUTE SERVICES: Various financial institutions are coming up to provide financial services which might act as a replacement for the banking services. But these institutions will take time to establish so threat is absent in the short or medium term. There are substitute financial institutions that do many of the activities and transactions of a bank in the leasing field but these financial and leasing institutions are too small in size. These institutions can shrink the profit margin of commercial banks.
RIVALRY AMONG EXISTING BANKS: The competition level among the foreign banks is very intense but what is more amazing and gradually more remarkable is the growing aggressiveness and competitiveness of the lead banks to battle with the foreign banks. Local banks such as MCB, UBL, Soneri Bank are coming up with new banking products and services to compete and even make better products and services from foreign banks. Therefore there is intense competition in the banking industry. By analyzing the above points we can say that the threat of new entrants is considerable and there is intense competition and rivalry. It would be very difficult to survive in a market where almost every bank foreign and local is waiting to grab market share away with the slightest of chances. Therefore SCB must strive to be more innovative and competitive in order to protect its customer base and expand it. In banking rivalry among the competing banks is moderate to high due to the following reasons
Major rivals are equal or close to in size and capability ( revenue and volume) Exit barriers are high TERM REPORT- MARKETING MANAGEMENT
24 New private banks are snatching share from SCB and each others customers by providing extra benefit. Slow market growth Depositors cost of switching bank is low 6. CHALLENGES FACED BY STANDARD CHARTERED IN DELIVERING VALUE Standard chartered bank Pakistan limited has been operating in Pakistan for a very long time and like other multinational banks it did face certain challenges in delivering value to its customers not just because of the competitiveness but also because of the socio economic and political conditions that have been a huge part of Pakistan since its inception, banking sector does badly get affected because of the political situation in the country. At Standard Chartered, they are determined to lead by example within the markets in which they operate. As well as contributing to economic growth through their core business activities, they want to help protect the environment and to have a broader positive impact on the societies in which we live and work. And as they engage as a partner with governments and communities in addressing these wider challenges, they are learning more about how the issues interact with each other and our their business objectives. By being a high-performing bank, helping people and companies borrow, save and make transactions, they naturally play a role in creating wealth and stimulating growth. From the perspective of shareholder value creation, the more successful a country becomes, the more successful we can be. But long-term growth depends on how well we all manage risk, including the social and environmental issues that can impede or undermine sustainable growth. So why is sustainability important to them? With our business spread across Asia, Africa and the Middle East, the Bank is hosted by communities that are the most vulnerable to climate change and widening social and economic disparities. We have a key role to play in stimulating economic and social development through the services we provide and by being a force for good. The success of our business depends on this. Standard Chartered has long valued relationships with customers, governments, social organizations and regulators that they have built over 150 years of business experience in these markets. This puts them in a strong position to collaborate effectively with various stakeholders to respond to the challenges faced. The issues present both risks and opportunities for them But banking industry being so huge in Pakistan and with so many banks coming up with new promotions and offerings it is very challenging for Standard Chartered Bank to stand up to its current position and constantly keep working on making and providing the best of value to its customers. TERM REPORT- MARKETING MANAGEMENT
25 CHALLENGES FACED IN PROVIDING VALUE Uncertainties in the major financial markets caused by huge corporate losses are affecting business sentiments and eroding growth and margins for international banks To develop and implement systems and practices to achieve customer satisfaction they need to have the best customer relationship management system To strengthen the bank's operations processes and systems to continuously improve its risk management. Retaining old customers and making new ones is a challenge Compromising on Banks profit to provide best offerings to its customers Increasing customer base in competitive scenario is the biggest challenge SCB is currently facing Exploiting new business opportunities because every bank is out there to grab the very first opportunity that comes in their way Attracting and retaining key talent because the market is so competitive and is ready to offer anything to talent that has the Knowledge, skills and abilities to retain the customers and provide out class services and value to them OVERCOMING THESE CHALLENGES How can Standard chartered bank overcome these challenges is very important. How can they make the best of a not-so-great situation? First, address the low interest rate environment by looking carefully at fee opportunities. It certainly seems that consumers are tired of bank fees, but it is totally unrealistic to expect banks to provide deposit products at a loss. Bankers need to do a better job explaining the economics of checking accounts how high interest rates allowed banks to provide free checking, but todays low interest rates necessitate higher fees. Low interest rates and weak loan growth mean that deposits are not very valuable. Banks should make sure that they are offering very low interest rates on time deposits. Just when you think you are as low as you can possibly go, you will see a competitor go lower. Follow him down. If you lose a few depositors, know that you didnt have a good use for the funds anyway. Within the bank, every institution needs a well-run compliance function. This is difficult for smaller institutions, but its just as vital as opening the doors in the morning. Knowing what is expected of you by your customers is very important because it is they who can take you to the top and vice versa. 6.1 RULES OR PRINCIPLES THAT MUST BE FOLLOWED If Standard Chartered bank wants to become the bank that its customers suggest to their friends, family and colleagues they need to maintain strong hold on their customer satisfaction and how they can keep on improving and creating new values for its customers. Timely surveys should be conducted so that their service performance can be measured properly and accurately and and on timely basis so that the employees as well as the bank is aware of where they stand in their customers mind. TERM REPORT- MARKETING MANAGEMENT
26 Identifying customers financial needs and advancing the best solution plan. Making the customer comfortable and giving them more than just a banking experience Attend- To out serve with passion using the correct opening statements, remaining visually attentive and interested, using the customers name at least twice, using courteous and positive words and phrases, sounding passionate and willing to serve and controlling the conversation effectively Listen and identify customer needs-Listening actively and attentively, using a positive statement of intent, asking effective questions to gain a full understanding of the customer situation. Offer Solutions-Explaining the customer how you can help them, recommending the benefit for their solutions, managing expectations and gaining the customers agreement. Handle Recovery-Use a cushion statement to address customers emotional needs, clarifying all facts leading to the service breakdown, explaining what I can do to recover and reassuring the customer. Appreciate- Reassuring the customer, restoring his confidence, thanking and personalizing the close, using the correct closing statement. Keeping in view the above mentioned ALOHA CONVERSATION FLOW each and every employee should work for only one reason and that is satisfying the customer and providing him with the best value any bank could ever provide to their customers. Following their core values and objectives Standard chartered needs to live up to the expectations that their customers have from them in order to be the best bank in the country as well as worldwide 7. SUPPORT RECEIVED FROM STANDARD CHARTERED BANK PAKISTAN LIMITED When we hear the name of brand that has been in the field for quite a long time and is the oldest player in the field Standard chartered bank was the first bank that came in my mind when I heard the letters CUSTOMER VALUE. Standard chartered bank truly lives to its values morals and standards that they have been maintaining for the past years. I got an opportunity of visiting one of the best branches of Standard Chartered situated at the main street of Zamzama one of the best areas in Karachi in assistance with my sister who is currently part of Standard Chartered bank and is working as a Relationship Manger for the past 2 years. this was actually an opportunity of a lifetime because with my sisters help as well as the other employees who welcomed me in their branch and allowed me to stay there and observe how they deal with their customers and how their customers are treated as family members, how there issues and grievances are taken care of. I spoke to a lot of customers personally asking them whether they were satisfied with SCB and majority of them were very confident in answering YES WE ARE BECAUSE STANDARD HAS BEEN TAKING CARE OF US AND NOT JUST US BUT OUR FOUR FATHERS ASWELL. TERM REPORT- MARKETING MANAGEMENT
27 The overall culture of SCB is very liberal and everybody has a say in the decision making process. Open door policy and socializing is something that is strongly encouraged, employees are self motivated and enjoy doing their work and looking after their customers. They take ownership of each and every customer and the customers treat their relationship managers as their friends and caretakers of their assets. As an employee they know what is expected of them, they know how they are performing, they know that their performance does make a difference on the banks performance, they know their strengths and weaknesses, they are aware that they will be rewarded for whatever they achieve. Keeping in mind all these KPIS they out perform in whatever they do. As a manger the manager engages and energizes people to reach clear goals, provide coaching to maximize individual and team performance, boosting his team results, creating greater capability in the team, attracting and retaining key talents, reinforcing performance through reward differentiation is what the manager at Standard chartered bank does. As a bank they exceed their annual targets, exploit new business opportunities, out serve their customers, and enhance knowledge, skills and creativity to exceed banks ambition.
TERM REPORT- MARKETING MANAGEMENT
28 8. CONCLUSION Standard Chartered Bank is unique in terms of constitution, its mandate, its objectives and modes of operation. Through this the Bank has in the mean time found its own special position in the sector at the higher rack of the self. Bank is expected to continue to maintain strong competitive edge in banking sector in Pakistan in the years ahead. Through Banks specialization and integrated approach, The Bank aims to build a strong position in the industrial development of Pakistan. The Bank also plans to maintain its focus on managing capital and costs to maximize shareholders value. In this environment, The Bank expects to make further gains in revenue, income and return on capital. Recent Banks performance in different arena of banking strongly suggests that Standard Chartered Bank is one of the soundest banks operating in the country. Continual improvement in different segment with a proactive attitude can make a difference in the banking business. The Standard Chartered Bank is redefining the traditional banking concepts and transforming it into relationship banking. The Standard Chartered Bank considers the borrower as clients. The mutual relationship is the essence of long-term success in the banking industry. The ever-increasing competitive nature of banking business determines the direction of the bank. Sustainability in better performance is the prime focus in Standard Chartered Bank.
Young Savers Account Senior Save Account Savings Account-i (Islamic Savings Account) Basic Savings Account e$aver Account Current Accounts
Conventional Current Account M2 Account Current Account-i (Islamic Current Account) Basic Current Account MoneyHome Card Fixed Deposits
Cards Standard Chartered Priority Banking Visa Infinite Card Standard Chartered Preferred World MasterCard Credit Card Standard Chartered Platinum Visa & MasterCard Standard Chartered Business Visa Platinum & Gold Standard Chartered Gold Visa & MasterCard Standard Chartered Classic Visa & MasterCard Standard Chartered Supplementary Visa & MasterCard
General Insurance Permanent Disability Plan Critical Illness Protection Plan Premier Personal Accident Plan Senior Citizen Personal Accident Plan Home Contents Insurance TravelRight Plus Life Insurance Whole Life Endowment Term Supplementary Benefits or Riders Investment-linked Policy MultiAssure
TERM REPORT- MARKETING MANAGEMENT
33 Target Market Description 1. Mar ket s egment s Overall market industry for banks in general and SCB in particular can be Divided into following categories:
Personal Banking Accounts and Deposits Debit & Credit cards Loans & Mortgages Insurance Investment
Islamic Banking: Standard Chartered, with an aim to meet the unique needs of its customers has setup an Islamic Banking system. The bank is offering Shariah compliant products to its customers.
2. Primary Market 3 . S e c o n d a r y ma r k e t 4. Mar ket c har ac t er i s t i c s Geographic D e m o g r a p h i c P s y c h o g r a p h i c Behavioral
5.Marketing Objectives Need Satisfying objectives Long and short term sales target objectives
6.Marketing mix
a. Product Consumer banking
Standard Chartered provide mortgages, Credit Cards, personal loans, auto loans, deposit accounts, and wealth management products.
Corporate and institutional banking Corporate & Institutional Banki ng provides trade finance, cash management And lending services.
TERM REPORT- MARKETING MANAGEMENT
34 Global markets Global Markets provides foreign exchange, interest rate management and debt c api t al mar ket s s er vi c es t hat ar e ver y dynami c i n Paki s t an as t her e ar e a l ot of changes in the economic climate.
Services Provided
Foreign Exchange Spot and Forward Asset & Liability management Short Term loans/deposits Interest rate / Liquidity management Economic Research & Analysis Customer Risk Management Non Deliverable Forwards FX Options Interest Rate Derivatives
b.Price Standard Chartered Bank Pakistan Limited is an active price maker in the market and handles Flows of multinationals and foreign investors in the stockmar ket . Var i abl e s er vi c e c har ges on appl y on eac h c at egor y of s er vi c e offerings, these range from bank charge rates to Transaction costs etc.
c.Distribution Standard Chartered Bank is one of the world's leading banks in foreign exchange And money market operations with special ist strengths in exotic currency products. Clients have access to a 24-hour dealing service through 20 dealing rooms in the principal financial Centers. The bank has also established a strong reputation for dynamic involvement in New financial products such as options and derivatives and is particularly strong in the emerging market currencies of Asia, Africa and Latin America where it is recognized as being a first choice Provider in many markets. With presence i n more than 50 countries and 150 years of experience, The bank has a Large local customer base in each of these markets attracting large volume transactions. Standard Chartered Bank (Pakistan) Limited is Pakistan's oldest and l argest foreign Bank with over 150 branches in the country. The history of Standard Chartered in Pakistan dates back to 1863, when the Chartered Bank of India, Australia and China first established its operations in Karachi.In 2006 Standard Chartered Bank acquired Pakistan's Union Bank. TERM REPORT- MARKETING MANAGEMENT
35 On 30December 2006, Standard Chartered merged Union Bank with Its own subsidiary, Standard Chartered Bank (Pakistan), to create Pakistan's sixth largest bank.
d. Communication In Pakistan the communication mix for SCB had been more of below the lineadvertisement Rather than an open traditional promotional and communication mix. They usually prefer to paint-out the entire bank branch using it as an attractive outdoor Advertising medium.
7.Intended role of Advertising in the communication mix Banks operate in a significantly more competitive environment than they did a decade ago in Pakistan. The number of commercial banks became larger through acquisitions, and entered new markets as geographic market entry restrictions were gradual ly removed, first at the city, and then at the Provincial level. Thi s not only allowed banks to capitali ze on economies of scale but also to Spread their operations over the geographic space to diversify the local economy risk during 1980s and 1990s. Competition from credit unions whi c h ar e ex empt f r om i nc ome t ax es , and non- bank f i nanc i al s er vi c es , s uc h as money mar ket m u t u a l f u n d s a n d f i n a n c e c o m p a n i e s w h i c h a r e e x e m p t f r o m b a n k i n g regulations, also stiffened during this Period. Banks tried to counter non-bank competition by offeri ng a wider range of products and Services, ranging fromi ns ur anc e t o i nves t ment bank i ng, bet t i ng on t he ec onomi es of s c ope. The dramatic changes i n the banking sector suggest that the role of advertising in commercial Bank production and performance may have increased i n the new competitive environment. This means that major role of Advertising so far by Standard Chartered Bank inP a k i s t a n h a d b e e n t o r e t a i n i t s e x i s t i n g ma r k e t s h a r e a s we l l a s t o g a i n competitive edge through its non advertising measures such as acquisition of Uni on Bank so that to not only increase its distribution network of branches all over Pakistan but to Advertise its presence through its signature painted building branches all across Pakistan as well.
8. Advert i si ng Obj ect i ves Advertising in no matter what format, has primarily three major objectives: 1 . I n f o r m 2 . P e r s u a d e 3 . R e m i n d
The advertising objectives thus for Standard Chartered Bank are and must be aligned such that people or target audience is informed of the service offerings that the bank is making. The awareness in thi s regard would help this deicide,compare and evaluate the service offerings of SCB with other competitive banks and thus rational decision on their part could be made. Once the awareness of service offerings is made, and then comes the persuasion part. Here SCB would work through it advertisements in such a way that the target audience would be persuaded to buy the service offerings from SCB rather than its competitors. And finall y remi ndi ng the customers in regular cycle of servi ce offerings from SCB would help to not only retain the existing customer base but would also help to start the cycle of informing to newer customers too. TERM REPORT- MARKETING MANAGEMENT
36 9. Advert i si ng Strat egy Developing an Advertisi ng Strategy 7 t o achi eve t he obj ect i ves of a campai gn r e q u i r e s t h a t c o n s i d e r a t i o n b e g i v e n t o b o t h t h e Me s s a g e wh i c h wi l l b e communicated and the Media through which it will be sent. As per BCG: 7 http://www.examstutor.com/business/resources/studyroom/marketing/advertising/3-advertisingstrategy.php