charles schwab & co ppt
TRANSCRIPT
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8/3/2019 Charles Schwab & Co PPT
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Adeyemi Makanjuola Conrad Parnell Maria Mangones
Charles Schwab & Co., Inc.Talk to ChuckAdvertising Campaign
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OUTLINE
A. Case Objectives
B. Introduction
C. Industry Background: Charles Schwab & Company
D. The Talk to Chuck Advertising Campaign
Marketing at Swab - Client Segmentation
Measuring Loyalty - A Declining Brand
Talk to Chuck - Designing the TTC Test - Reviewing the Results
E. SWOT Analysis
F. Financial Information
G. Conclusion & Recommendations
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CASE OBJECTIVES:
To effectively evaluate theadvertising campaign of Talk toChuck for Charles SchwabCorporation
To discuss case objectives andmessage strategy by providingmarketing recommendations
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THE CHARLES SCHWAB CORPORATION
Established in 1971 by Charles R. Chuck Schwab as a traditional, brick and mortar
brokerage firm and investment newsletter publisher.
May 1, 1975, the company became the first discount selfservice brokerage firm toallow investors to manage their assets and make transactions without the help oftraditional brokerages.
In 1983, Bank of America acquired Schwab for $ 57 million , but merely four yearslater, Schwab Corporation managed a buy back for 280 million and thereafter wentpublic.
By 2004, Schwab offered a range of services in three sectors: Schwab Investor,Schwab Institutional, and US Trust. Schwab decided to return as CEO to replace
David Pottruck.
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MARKETING AT SCHWAB
Mid 2004, Chuck began reengineering the company by implementing341 million in annualized cost reductions against an expense base ofapproximately 3.3 billion. As a result, Schwab trimmed down 508million, representing a 15 % cut.
Becky Saeger, previously head of marketing at Visa , joined thecorporation. She oversaw Schwabs marketing organization , whichevolved by 2006.
The company priced its brokerage services too high which restrictedcustomer access to research and information according to customertransaction volume.
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CLIENT SEGMENTATION
4 Approaches to its U. S. retailcustomers
1. Investment Attitudes
2.
Life Stage3. Invest Style
4. Hidden Assets
Results: Any Schwab client could
placed into one of the segments in eachof the four classifications.
Schwabs client base wasunderweighted in the high touch
segment and overweighed in the selfassured segment.
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MEASURING LOYALTY
Net New Assets = new assets deposited assets withdrawn
Market share was declining
Most frequently reason for moving assets out of Schwab:
Need money for major purchases 21%
Wanted to invest less in stocks 12%
Change in personal situation 11%
Wanted lower commissions and fees 9%
Wanted more investment advise 8%
Price reduction, by 2005 assets withdrawn were migrating in
similar percentage when compared to other competitors
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A Declining Brand
Brand Asset Valuator (BAV) study
Schwabs perceived differentiation declined 2002 2004
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Study of Brokerage Customers by Hill Holiday
MOMENTUM
Company on the way up 11%
Company holding steady 73%
Company on the way down 16%
More innovative than ever 10%
Innovation holding steady 67%
Less innovative than it use to be 23%
INNOVATION
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TALK TO CHUCK
http://www.youtube.com/watch?v=YBUn5YfZ0Akhttp://www.youtube.com/watch?v=YBUn5YfZ0Ak -
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TALK TO CHUCK Advertising Account, competition between 4 agencies
Euro RSCG: Volvo and Nestle are part of their clients Fifth-largest global advertising agency
Euro RSCGs Objective: To exploit the satisfaction gap & broaden the brand beyond the
discount brokerage arena. To target mass-affluent: 35-54 years old investors with $50,000
to $2 million investable assets To build a long term relationship with customers
Pitch Meeting: Talkto Chuck Tag Line Mr. Chuck work Ethics and Attitude. Euro RSCG proposed to communicate chucks core values Campaign : Original Roots ( chucks Era of running company)
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Campaign Ads
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TTC TEST
Designing the TTC Test
Test Marketing
Goal: to measure campaign success by tracking net new assets and the number of new
households investing with Schwab.
Reform: the need to reach their growth objective by prioritizing on customers.
2005 brand budget spent on Tests
26 markets were selected with at least 1% of the us population. Criteria for Cities: BDI/CDI
perspective and Strong field sales presence
3 Test Markets: Chicago, Denver and Houston (accounted for 6% ofSchwabs invested asset)
Considered a high concentration of $250,000 portfolio markets with efficient &affordablemedia
Chucks Work Ethics: Visited Test Site to speak to Schwab field representative to make sure
they were comfortable with the campaign.
I talked to chuck today and I can talk to him tomorrow
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Test Review
Consumer Attitudes
Consumer rates
Additional Tracking Consumer who recalled vs. Nonrecallers (+6 points)
Unique alternative (+5points)
Gaining ground (+7points)
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Ranking of Financial Services Companies Based onResponse to National Consumer Tracking Survey
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THE CHARLES SCHWAB CORP
SALES EBIT DEPRECIATION
TOTAL NET
INCOME EPS
12/10 4,176.0 779.0 146.0 454.0 0.38
12/09 4,116.0 1,276.0 159.0 787.0 0.68
12/08 5,117.0 2,028.0 152.0 1,230.0 1.06
12/07 4,865.0 1,853.0 156.0 1,120.0 0.92
12/06 4,164.0 1,476.0 157.0 891.0 0.69
12/05 3,474.0 1,027.0 179.0 634.0 0.48
12/04 3,277.0 547.0 197.0 350.0 0.26
12/03 3,750.0 717.0 277.0 476.0 0.35
12/02 3,815.0 249.0 309.0 149.0 0.11
12/01 4,158.0 177.0 394.0 106.0 0.08
Financial data in U.S. Dollars
Values in Millions (Except for per share items)
Income Statement - 10 Year Summary (in Millions)
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SWOT ANALYSIS
Strengths:
Diversified product range
Brand image, Mr. Chuck
Customer focus
Weakness
Poor leadership (David Pottruck)
Poor strategic planning Declined perceived customer value
Opportunities:
Ageing population may increase
Diversification of portfolios
Curtailing Attrition
Threats:
Economy
Matching capabilities fromcompetitors
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Focus on customers and create more value
Maintain brand image and core values of the company
Invest in advertising and increase marketing budget
Promote growth by targeting current clients
Conclusion and Recommendations