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[Marketing of Financial Services] September 11, 2009

Ee Suen Zheng

Marketing of Financial Services

A New Marketing Plan for HSBC’s Current

Account – Part 2

Executive Summary

This report provides the details of the new HSBC current account package.

A marketing plan devised from the 7Ps is outlined below to provide a practical and feasible way to implement the new current account package.

Numerical targets and qualitative targets are stated clearly as objectives.

Further details on the research required during the pre and post-implementation stage is discussed in detail.

The budget and the timing of the launch of the new current account package is elaborated using a simple budget statement and Gantt chart.

Tasks

‘Conduct an in depth analysis of possible causes of the product line, reputation and differentiation problems. Evaluate the various strategies available to you to differentiate your organisation from its competitors. Consider the issues surrounding the implementation of your chosen strategy.’

Working Paper

Sheffield Business

School

At Sheffield Hallam

University

Ee Suen Zheng

Bachelor of Arts with First Class

Honours in Banking and Finance

+503-9283 8950

+6016-696 6566

[email protected]

jamesesz.wordpress.com

Word Count: 2740 words

(excluding references and

appendix)


Ee Suen Zheng

Table of Contents

Details Page Number

1. Executive Summary 3

2. Objectives 3

3. Marketing Strategy 4

4. Target Market 4-5

4.1 Market Segmentation and Targeting

4.2 Market Positioning

5. Marketing Mix 5-10

5.1 Product

5.2 Price

5.3 Place

5.4 Promotion

5.5 People

5.6 Physical Evidence

5.7 Process

6. Research 10-11

6.1 Pre-implementation

6.2 Implementation Stage

6.4 Post-implementation

7. Budget 11

8. Timescales 12

9. Contingency 12

Bibliography 13-14

Appendix 1 15-16

Appendix 2 17-19

Appendix 3 20-21

Appendix 4 21-22

Appendix 5 22

Appendix 6 23-24

Appendix 7 25-27

Appendix 8 28-29

Appendix 9 29-30


Ee Suen Zheng

1. Executive Summary

This report provides the details of the new HSBC current account package.

A marketing plan devised from the 7Ps is outlined below to provide a practical and

feasible way to implement the new current account package.

Numerical targets and qualitative targets are stated clearly as objectives.

Further details on the research required during the pre and post-implementation stage

is discussed in detail.

The budget and the timing of the launch of the new current account package is

elaborated using a simple budget statement and Gantt chart.

2. Objectives

This marketing plan aims to define the means of notching up HSBC’s current account

market share by 1.5% (960,000 current accounts) from HSBC’s current market share

of 8.9%.

The new HSBC prepaid card that would be introduced will increase the profitability

of current accounts by encouraging customers to save, hence making more funds

available for further lending by the bank.

The new current account package also aims at rebuilding consumer confidence

towards HSBC by portraying the bank as a responsible and socially conscious

financial institution.

The new current account package also aims and building up HSBC’s corporate image

and branding theme of being global bank with local knowledge by introducing new

products that are in line with the current economic downturn.

(See appendix 2)


Ee Suen Zheng

3. Marketing Strategy

HSBC should implement the market penetration and product development strategy by

capturing current account market share from other financial institutions that have been

weaken from the economic crisis. Besides that, the launch of the new prepaid card would be a

step towards product development that would be useful to counter non-traditional financial

institutions that are poise to enter the current account market.

The market development strategy can also be carried out at a later date by bringing

the new and tested prepaid card product into other geographical markets like China and India.

This would be in line with HSBC’s slogan of being the ‘World’s Local Bank’ and would also

take advantage of HSBC’s global network in more than 79 countries.1 In relation to the Porter

Generic model, HSBC should aim at using a broad based differentiation strategy to capture

market share from ailing financial institutions.

(See appendix 1)

4. Target Market

4.1. Market Segmentation and Targeting

A market segment should consists of a group of customers who share a similar set of

needs and wants (Kotler. Etal, 2009).2 A market segment must be accessible, measurable,

large enough and profitable in order to be worth targeted by an institution. The new prepaid

card should be offered as a ‘naked solution’ that all segment members value (Anderson &

Narus, 1995).3 Ways of segmenting the market should include geographical and demographic

segmentation.

The new HSBC prepaid card should be launched in the United Kingdom first before being

extended into other geographical regions. A time lag of half a year would be enough to test

the effectiveness of the product as a method to obtain a higher market share for current

accounts. Demographic segmentation on the other hand should be focussed on age and

income. Special attention should be focussed on young individuals opening their first current

accounts and high net worth customers.

1 Dr. Orr, 2004, New Ledger, Forbes, 1 March, pp72-73.

2 Kotler, Keller, Brady, Goodman & Hansen, 2009, Marketing Management, Pearson Education Limited 2009,

England, pp334. 3 J.C. Anderson & J.A. Narus, 1995, Capturing the Value of Supplementary Service, Harvard Business Review,

January-February, pp75-83.


Ee Suen Zheng

4.2. Market Positioning

Positioning is the act of designing the company’s offering and image to occupy a

distinctive place in the minds of the target market (Ries & Trout, 2000).4 Data taken from

SWOT and PESTEL analysis of HSBC enables marketers to define the points-of-difference

and points-of-parity associations. Points-of-difference are attributes or benefits consumers

strongly associate with a brand, positively evaluate and believe they could not find to the

same extent with a competitive brand. In the case of HSBC, the bank is known to be a truly

global bank with an international branch network.

Points-of-parity are associations that are not necessarily unique to the brand but may

in fact be shared with other brands (Brunner & Wänke, 2006).5 There are two types of points-

of-parity, namely, category and competitive points-of-parity. Category points-of-parity

includes HSBC being a reputable financial institution and also a bank entrusted with

fiduciary responsibility. In terms of competitive points-of-parity, HSBC must be seen to

‘break even’ with other financial institutions in terms of service quality.

(See appendix 2)

5. Marketing Mix

Marketing for financial services pose distinctive challenges to marketers because

services are intangible, inseparable and cannot be inventoried. An expanded marketing mix is

required to fully answer the differences between product marketing and marketing for

financial services. The expanded marketing mix aims to capture the distinctive nature of

financial services (Booms & Bitner, 1981).6

(See appendix 2)

5.1. Product

4 A. Ries and J. Trout, 2000, Positioning: The Battle for Your Mind, 20

th Anniversary Edition, New York:

McGraw-Hill. 5T.A. Brunner & M. Wänke, 2006, The reduced and enhanced impact of shared features on individual brand

evaluations, Journal of Consumer Psychology, 16 April, pp101-111. 6 Bernard H. Booms and Mary J. Bitner, 1981, Marketing Strategies and Organization Structures for Service

Firms, in J.H. Donnelly and W.R. George, Marketing of Services, Chicago: American Marketing Association,

pp47-51.


Ee Suen Zheng

The product is the heart of the firm’s marketing strategy. Poorly designed service

products that do not create value for customers are destined to fail regardless of how well the

other 6 Ps are executed. The goal of the product element is to create a service concept that

would offer more value to a market segment than competitors. Working to transform this

concept into reality involves designing a cluster of different but mutually reinforcing

elements.

The product must be a means to solve a problem or satisfy a want in the market. To

date, overspending is a major issue in the Western world. This is the reason why the new

HSBC prepaid card is included in the new current account package as a means to ensure that

customers do not overspend by ensuring prudential budgeting of financial resources.

Unique Features:

Prepaid Card

HSBC will launch two prepaid cards, namely, the HSBC’s Financial Manager and the

HSBC’s Budget Manager prepaid card. Both prepaid cards come preloaded with £10 after the

customer pays the initial card issue fee. The Financial Manager is a way to manage a monthly

budget by transferring your spending money from your bank account onto the card. It has an

annual load limit of £15,000. The Budget Manager on the other hand has a smaller annual

load limit of £2,000.

The new HSBC prepaid cards would be fee-free while offering the same flexibility as

a credit or debit card. The prepaid card however, would need to be loaded up with cash first

before allowing its users to purchase products and services. The prepaid cards can also be

used to withdraw money from cash machines.

Real Time Balance Alerts

Real time balance alerts will be sent to the customer’s mobile device every time a

HSBC prepaid card user purchases something. This balance update will notify the prepaid

card user on the amount of money spent and the amount of money left for free. HSBC may

need to team up with companies like Vodafone to provide this service.

Online Banking


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Another unique element of the HSBC prepaid cards are their flexibility in managing

the customer’s financial resources. Bank customers can access the HSBC website and set

standing orders on how much money to load onto the budget manager every month as long as

the funds are available in their current account.

Optional Savings Account

Bank customers that pay more than £500 into their current account every month

would qualify for the HSBC’s Current Account Advance. Regular payments can be made

through the internet or by direct standing order from the customer’s current account to save a

specific amount every month. This feature is ideal for customers with a fixed monthly

income.

5.2. Price

The pricing component plays twin roles for HSBC in the sense that it must be able to

first attract customers to purchase the service and also generate revenue for HSBC.

According to Adrian Palmer (2008), there are five main factors that influence pricing

decisions, namely, profit maximisation, market-share maximisation, survival, social

considerations and personal objectives.7

While pricing strategy is highly dynamic for other products and services, pricing for

current account services have become rather static in recent years. Most banks do not require

any fees to set up a current account. Banks instead rely on the money that floats in the

interval when they are deposited to when they are spent in order to profit from current

accounts.

It is unlikely that any increases in interest rates would be able to attract customers to

open up new current accounts with HSBC. The base lending rate that is now at 0.5% provides

little room to manoeuvre for banks and other financial institutions. Adding to that is the credit

crunch and declining asset prices that makes borrowing at a higher rate unattractive at the

moment. The initial prepaid card issue fee should be around £10. This is in line with what

competitors are charging at the moment.

7 Adrian Palmer, 2008, Principles of Services Marketing, 5

th Edition, McGraw-Hill Education (UK) Limited,

United Kingdom, pp420-421.


Ee Suen Zheng

The catch with the prepaid card scheme is that it encourages bank customers to save.

Any money that is saved is held within the customer’s current account and remains available

for banks to provide further lending. This may prove to be highly beneficial to HSBC during

times when raising new capital is extremely difficult.

(See table 3)

5.3. Place

The place element involves delivering the product element to customers through

appropriate methods and delivery channels. Delivery may involve both physical and

electronic channels. Failure to make a service product readily available to customers would

guarantee its failure regardless of how good the service product is. The new current account

package would be made readily available throughout HSBC’s 1,492 branch network and also

through the internet.

(See figure 1 & 2)

5.4. Promotion

The promotion element relies on effective communications to bring awareness in the

market of the service products offered by HSBC. The three objectives of the promotion

element are to gain the attention of customers, provide additional information and persuade

customers to purchase the product. Advertising is mass, paid communication that is used to

transmit information, develop attitudes and induce some form of response on the part of the

audience (Adrian Palmer, 2008).

The choice of media that would be utilised includes newspapers, magazines, outdoor

advertising and the internet. A sales promotion will also be carried during the first three

weeks after the launch date to help stimulate customer purchase and the effectiveness of

intermediaries (Adrian Palmer, 2008). Other promotional materials include press releases,

posters and brochures.

(See appendix 3)


Ee Suen Zheng

5.5. People

Despite technological advances, many financial services still require direct interaction

between customers and bank employees. The nature of these interactions strongly influences

how customers perceive service quality (Hartline & Ferrell, 1996).8 This is particularly true

for financial services as employees are often the first line of contact with the customer.

Due to the importance of this element in the marketing mix, special attention needs to

be given to the training of employees concerning the new current account package. The

prepaid card concept also requires some serious attention as its aim is to show HSBC’s

change of stance concerning the psychology of spending.

Training should only be given to bank staffs that are directly involved in the new

current account package. However, back office staff must also be formally notified

concerning this new current account package to ensure that the entire organisation have a

coherent understanding on the bank’s products and services. Besides that, training of IT

personnel must also be stressed as new information systems may have to be put in place

before the launch of the new product.

(See appendix 4)

5.6. Physical Evidence

It is generally recognized that physical evidence can be subsidized into two

components (Shostack, 1982): peripheral evidence which can be possessed by the consumer

but has little independent value and essential evidence, which cannot be possessed by the

consumer but has independent value.9 The peripheral evidence is the prepaid card itself while

the essential evidence includes bank branches, cash machines, posters and brochures.

(See appendix 3)

5.7. Process

8 Michael D. Hartline & O. C. Ferrell, 1996, The Management of Customer Contact Service Employees, Journal

of Marketing, 60, no.4, October 1996, pp.52-70. 9 Shostack, G.L., 1982, How to design a service, European Journal of Marketing, 16(1), pp49-63.


Ee Suen Zheng

The process element focuses on the mechanisms by which the service is delivered,

including business policies for service provision, procedures, degree of mechanization etc. It

is imperative that the policies and procedures are written and tested before the launch of the

new current account package.

Bank personnel are to conduct a test to determine how efficient and effective front

line staffs are at explaining the new current account package and setting up new current

accounts. A step by step guide on how to set up a new current account and prepaid card

system is to be issued to all front line staff to ensure that no confusion is to occur during the

critical launch date.

Besides that, front line staff should also be constantly monitored to ensure that the

delivery of services occur smoothly. Customer feedback and complaints should be welcomed

as they would provide the input needed to continuously improve service delivery and

customer satisfaction.

(See appendix 5)

6. Research

Market research will be carried out before, during and after the launch of the new

HSBC current account package. There are three methods for a financial services organisation

to carry out its research, namely, using in-house resources, using the services of a specialist

agency or a combination of the two methods. During the period nearing the launch of the new

current account package, both pre and post implementation research should be carried out by

specialist agency commissioned by HSBC.

6.1. Pre-implementation stage

During this stage, research should be focused on whether the market’s current

external environment matches the company’s initial results during the first external

environment analysis. Political, legal and economic elements of the external environment are

likely to be very volatile in the coming days that may cause HSBC to either delay or bring

forward the launch of the new current account package.


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Furthermore, research should also be done on the company’s corporate image and the

receptiveness of market for a new product and concept during a time when the banking

industry is facing heavy criticism from the public.

6.2. Implementation stage

A tracking study should be carried out by the research agency during the

implementation stage. The tracking study will be done through monitoring consumer’s

awareness and acceptance of the new current account package. This process should be an

ongoing one during the product’s life cycle. Tracking studies should be conducted with small

groups of a target market segment. It would also be advisable to rotate the members of a

group with another group to ensure that a variety of responses is noted.

6.3. Post-implementation stage

Post-implementation research should be aimed at obtaining tangible results on

whether HSBC has indeed managed to obtain the desirable level of market share and

profitability. Another goal of the new current account package is to change the attitudes and

perception of the public towards HSBC. Marketing research at this stage should also

determine on whether HSBC is now perceived to be a more responsible financial institution

that not only aim for profits but provide value to customers.

Besides obtaining tangible results on whether marketing objectives are met, it is also

important to gain feedback on customer satisfaction levels and any complains on the product

offered by HSBC. This is to ensure that further improvements can be made in the future and

any mistakes made would not be repeated.

(See appendix 8)

7. Budget

The budget to implement this marketing plan is estimated to be around £15 million. A

contingency of 5% is included in the numerical calculations to ensure that some measure of

volatility is covered should the promotion of the new current account package proves to be

more expensive than anticipated

(See appendix 6)


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8. Timescales

The implementation of the entire marketing plan would take around 9 months to

complete. The launch date of the new current account package is the summer of 2010 when

economic conditions are predicted to be more accommodating as a result of fiscal stimulus by

the UK government. A Gantt chart is included in the appendix to break down the timeframes

of individual tasks.

(See appendix 7)

9. Contingency Plan

A contingency plan is included in the appendix to note down various responses to

some of the challenges posed in these difficult times. Among the various scenarios that might

occur in the future includes the failure of the prepaid card to be a practical method to manage

personal finances, a severe contraction in economic activity and the failure to gain market

share in the current account market.

(See appendix 9)


Ee Suen Zheng

Bibliography

A. Ries and J. Trout, 2000, Positioning: The Battle for Your Mind, 20th Anniversary

Edition, New York: McGraw-Hill.

Adrian Palmer, 2008, Principles of Services Marketing, 5th

Edition, McGraw-Hill

Education (UK) Limited, United Kingdom, pp420-421.

Andrea Felsted and Patrick Jenkins, Cash and carry, Financial Times, 20th July 2009, The

Financial Times Limited, No: 37057, London, United Kingdom, p 10.

Andrea Felsted, Tesco Seeks to boost bank arm, Financial Times, 20th July 2009, The

Financial Times Limited, No: 37057, London, United Kingdom, p 19.

Bernard H. Booms and Mary J. Bitner, 1981, Marketing Strategies and Organization

Structures for Service Firms, in J.H. Donnelly and W.R. George, Marketing of Services,

Chicago: American Marketing Association, pp47-51.

Daft Richard L. (2008), New Era of Management, 2nd

edition, US: Thomson South-

Western. p.311.

David Fred. R., 2007. Strategic Management: Concepts and Cases. International Edition,

11th ed. United States of America: Pearson Prentice Hall. p. 76-107.

Dr. Orr, 2004, New Ledger, Forbes, 1 March, pp72-73.

Hitt M.A., Ireland R.D. & Hokisson R.E., 2005. Strategic Management: Competitiveness

and Globalisation (Concepts and Cases). 6th

ed. United States: Thomson South-Western.

p. 44, 45, 46.

J.C. Anderson & J.A. Narus, 1995, Capturing the Value of Supplementary Service,

Harvard Business Review, January-February, pp75-83.

Julie MacIntosh, Back to the old school, Financial Times, 15th July 2009, The Financial

Times Limited, No: 37053, London, United Kingdom, p 11.

Kerin, Hartley, Berkowitz, Rudelius, 2006. Marketing. 8th ed. United States of America:

Mc Graw Hill.

Kotler, Keller, Brady, Goodman & Hansen, 2009, Marketing Management, Pearson

Education Limited 2009, England, pp334.


Ee Suen Zheng

Michael D. Hartline & O. C. Ferrell, 1996, The Management of Customer Contact Service

Employees, Journal of Marketing, 60, no.4, October 1996, pp.52-70.

Michael E. Porter, 2008. The Competitive Forces that Shape Strategy. Harvard Business

Review, 86(1). p. 79-93.

Patrick Hosking, Banks with worst records on complaints to be exposed, The Times, 14th

July 2009, Times Newspaper Limited, London, No 69684, p 46.

Peter Drucker (2002), Managing in the Next Society, St. Martin’s Press, United States of

America (p.131-147).

Porter, M, 1980 Competitive Advantage, Free Press, Boston : Mass.

Shostack, G.L., 1982, How to design a service, European Journal of Marketing, 16(1),

pp49-63.

T.A. Brunner & M. Wänke, 2006, The reduced and enhanced impact of shared features

on individual brand evaluations, Journal of Consumer Psychology, 16 April, pp101-111.

Tina Harrison, 2000, Financial Service Marketing. Prentice Hall.

William Hall, More in the trolley, Tesco taking it seriously, Financial World, July/August

2009, ifs School of Finance, p 33-36.

Personal current accounts in the UK, An OFT market study, 2008, Office of Fair Trading.

Available at: http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf

(Accessed: 1st September 2009)

http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf


Ee Suen Zheng

Appendix 1: Marketing Strategy

Ansoff Matrix

1. Market Penetration

The market penetration strategy is implemented when an organization seeks to increase

market share of its current products/services. This strategy is the least risky as the organization is

already equipped with the experiences, capabilities and resources to market and support its

products/services. If the market is a high growth market, simply maintaining market share would

suffice. However, as the market reaches the saturation stage, a new strategy must be implemented.

HSBC is able to use this strategy to gain market share from competitors that have lost

confidence in banks that have failed in the recent sub-prime mortgage crisis.

2. Product Development

The product development strategy requires the organisation to develop new products for

existing market segments. This strategy is suitable for organisations that have a good understanding of

their customer’s needs and wants. Existing products/services can be used as a platform for cross

selling new products tailored to a specific customer base. As with market development, product

development carries more risk than market penetration. HSBC could use this strategy by developing

a new prepaid card product that O2 has launched recently together with its current account.

The new prepaid card would signal a change in the psychology of spending among customers

and would likely portray HSBC as a more responsible financial institution that does not just

encourage people to spend.

Market PenetrationProduct

Development

Market Development

Diversification

Ansoff

New Products

Existing Products

New

Markets

Existing

Markets


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Porter’s Generic

Target Scope Advantages

Low Cost Product Uniqueness

Broad (Industry Wide) Cost Leadership Strategy Differentiation Strategy

Narrow (Market Segment) Focus Strategy (Low Cost) Focus Differentiation

Strategy

1. Differentiation

The differentiation strategy requires the organisation to develop products/services that are

able to deliver unique attributes valued highly by customers. Value added uniqueness of the

product/service would enable the organisation to charge a premium against competitors. By using this

strategy, the organisation would be able to charge a higher price with the knowledge that substitutes to

its products are not easily available.

According to quickmba.com, firms that have successfully implemented the differentiation

strategy usually have the following strengths:

Access to leading scientific research.

Highly skilled and creative product development team.

Strong sales team with the ability to successfully communicate the perceived strengths of the

product.

Corporate reputation for quality and innovation.

The risk to this strategy is that other companies may be able to imitate the unique

characteristics of the products/services offered by the organisation and sell them at a lower cost.

Additionally, other organisations that serve a smaller market niche may be able to tailor make

products/services that better cater for their respective market segments.

HSBC is able to utilise this strategy though developing and providing the new prepaid

card along with its current accounts. As the prepaid card concept was recently launched by O2,

many banks have yet to adopt it. This means that by providing prepaid cards along with its

current account, HSBC is able to gain a short term differentiation advantage.


Ee Suen Zheng

Appendix 2

Table 1: Current Account Market Share in the United Kingdom

Details Financial Institution Market Share (%) No. of Current Accounts (m)

4 Established Banks Llyods TSB 19 12.1

RBSG 17 10.8

Barclays 15 9.6

HSBC 14 8.9

Challenges HBOS 14 8.9

Abbey 6 3.8

Nationwide 5 3.2

Others 10 6.4

Total 100 64

Source: Current Accounts, Finance Intelligence, June 2008, Mintel10

Table 2: Market Segmentation

Major segmentation variables for consumer markets

Geographical Region First by countries

Second by different geographical regions of the United Kingdom

City or metro size Under 5000; 5000-20,000; 20,000-50,000; 50,000-100,000;

100,000-250,000; 250,000-500,000; 500,000-1,000,000; 1,000,000-

4,000,000; 4,000,000 or over

Density Urban, suburban, rural

Demographic age Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 64+

Family life cycle Young, single; young married, no children; young, married,

youngest child under 6; young, married, youngest child 6 or over;

older, married, with children; older, married, no children under 18;

older, single; other

Gender Male, Female

Income Premier, Plus and Basic Accounts

Occupation Professional and technical; managers, officials and proprietors;

clerical sales; craftspeople; forepersons; operatives; farmers; retired;

students; homemakers; unemployed

10 Personal current accounts in the UK, An OFT market study, 2008, Office of Fair Trading. Available at: http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf (Accessed: 1st September 2009)

http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf


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Education Grade school or less; some high school; high school graduate; some

college; college graduate

Generation Baby boomers, Generation X, Generation Y

Social class Lower lowers, upper lowers, working class, middle class, upper

middles, lower uppers, upper uppers

Table 3: The cost of using prepaid cards

Card Initial

card issue

fee

Monthly

fee

Charge for

ATM

withdrawals

Charge

for

purchases

Cost to

reload the

card

HSBC PREPAID

Visa Card

£9.99 Nil (But

annual fee

of £5.00

Nil Nil Free

Virgin prepaid

MasterCard

£9.95 Nil 2.95% 2.95% Free at post

office or via

bank transfer

Cash plus Gold

MasterCard

£4.95 £4.95 99p Nil Free

Tuxedo

MasterCard

£9.95 £4.99 50p Nil 99p at post

office or free

via bank

transfer

The BREAD card

Maestro

£10.00 Nil £1.50 2.00% Free at post

office

Optimum

MasterCard

£9.95 £4.95 £1.50 Nil Free at post

office or via

bank transfer

Splash Plastic

Maestro

£5.00 Nil (But

£4.95

annual fee)

£1.50 (plus

2% for

withdrawals

over £50

2.5% 30p per £100

loaded at

post office


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Source: Financial World, July/August 2009

Llyods TSB, 19%

Royal Bank of Scotland, 17%

Barclays, 15%HSBC, 14%

HBOS, 14%

Abbey, 6%

Nationwide, 5% Others, 10%

Figure 1: Market Share, Current Accounts in UK

Llyods TSB, 1844

Royal Bank of Scotland, 2387

Barclays, 2014

HSBC, 1492

HBOS, 1002

Abbey, 712Nationwide, 748

Figure 2: Number of Branches


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Appendix 3: Brief for Advertising Agency

Enclosed here are the main guidelines for the advertisement brief:

The Product:

The new current account package would include the HSBC’s Financial Manager and the

HSBC’s Budget Manager prepaid card. Both cards would include the following benefits:

Preloaded with £10 after the customer pays the initial card issue fee

The Financial Manager is a way to manage a monthly budget by transferring your spending

money from your bank account onto the card. It has an annual load limit of £15,000. The

Budget Manager on the other hand has a smaller annual load limit of £2,000

Fee-free while offering the same flexibility as a credit or debit card

Real Time Balance Alerts

Online Banking

Optional Savings Account

Target Market:

The Financial Manager prepaid card would be targeted and customers with a higher

net worth while the Budget Manager would be targeted at individuals with lower net

worth. Ideally, the Budget Manager would also target individuals that have trouble

getting qualified for credit cards due to the lack of permanent income (students, etc.).

Both prepaid cards should be seen as an essential tool to help manage finances during

the current economic recession happening in the UK.

Advertising Objectives:

1. To raise consumer confidence towards HSBC as a responsible and secure financial

institution.

2. To change the perspective of the public towards HSBC that has been previously tarnished by

the turmoil happening in the financial world.

3. To increase the awareness of the public towards a new method to manage their finances and

keep themselves away from debt.

4. To create the image of HSBC as a local bank with global knowledge by introducing a solution

to the domestic problems in UK.

Form of Communication:

1. Above the line promotion:


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Press advertisements – half a page advertisement in the national newspapers

with inserted brochures

Advertisement in certain magazines (Newsweek, the Economists)

2. Below the line promotion

Brochures and posters for UK branch network

Advertisement on the HSBC website

Billboard advertisements on some of the main roads

Press releases

Advertising Requirements:

All promotional material should use the colour and font that matches with HSBC.

Advertisements should portray the new current account to be beneficial to customers as a tool

to manage their finances in difficult times. Promotional material should be reviewed at least 3

months before their actual presentation to the public. A copy of the Gantt chart (that relates

only to the promotional materials) should be given to the advertising company.

Appendix 4: Brief for Internal Circulation among Staffs

A note concerning the new current account package offered by HSBC should be circulated

internally in order to inform all employees of HSBC of the organisation’s plan in the coming future.

This note is important to help foster a company culture that encourages employee participation and

the alignment of interests among all internal stakeholders in HSBC. The note should include:

The marketing objectives of the new current account package

The marketing objectives include the targeted gain in market share after the launch of the new

current account package together with the expected increase in profitability from maintaining current

accounts. The new current account package also aims at rebuilding consumer confidence towards

HSBC by portraying the bank as a responsible and socially conscious financial institution.

The new current account package also aims and building up HSBC’s corporate image and

branding theme of being global bank with local knowledge by introducing new products that are in

line with the current economic downturn.

The new product features (the HSBC prepaid card)

While the basic current account is in many ways similar to what other financial institutions

have to offer, the new prepaid card that would be included together with new current accounts should


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be seen as a practical tool to manage personal finances. Being able to created standing orders through

the internet would also ensure some innovativeness as compared to other competing prepaid cards.

The details on roughly when the launch of the new current account package would be

The full Gantt chart should not be open to public viewing even for internal staffs and

stakeholders. Marketing plans should be revealed as least as possible in order to gain a ‘shock effect’

on competitors. Furthermore, revealing marketing strategies to competitors would likely mean that

they would devise ways to counter a marketing plan. However, internal staffs should be notified

beforehand on the product and launch date so as to foster a more transparent and unified organisation.

The hopes and expectations of the senior management towards this new current account

package

It is important that the senior management in HSBC show their support and communicate their

expectations towards the new current account package. Senior management are more likely to have

the credibility necessary to enhance the level of acceptance among internal staffs. Approval from the

senior management is essential for a marketing plan to succeed.

Appendix 5: Step by Step Procedures

Enclosed here is a brief step by step guide that should be issued to front line staff in charge of helping

customers open new current accounts in HSBC.

Steps Details

Step 1 Choose your prepaid card Finance Manager

Budget Manager

Step 2 Load up your card with cash Load your card by transferring cash from the customer’s

current account either through a bank branch, ATM or

the HSBC website

Step 3 Utilise your prepaid card The HSBC prepaid cards are secure chip and pin cards

that will be accepted like a normal Visa card almost

anywhere in the world

Step 4 Get real time balance alerts Free balance updates would be sent to the customer’s

mobile device whenever he/she utilises the prepaid card


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Appendix 6: Budget Explanation

Table 4: Budget

Item Amount (£) Contingency (5%) Total (£)

Product Costs

Product development (Staff wages) 10,000 500 10,500

Negotiation with telecommunications company 5,000 250 5,250

Training Costs

Personal account managers 300,000 15000 315,000

Branch staff 200,000 10000 210,000

IT support staff 100,000 5000 105,000

Other staff 100,000 5000 105,000

Promotional Costs

Advertising agency 500,000 25000 525,000

Newspaper advertisements 8,000,000 400000 8,400,000

Outdoor advertising 3,000,000 150000 3,150,000

Brochures/Posters 300,000 15000 315,000

Bank’s cost

Sales Promotion 1,000,000 50000 1,050,000

Webpage advertisement 5,000 250 5,250

Research costs

Research agency’s fee 50,000 2500 52,500

Internal research costs 5,000 250 5,250

Total 13,575,000 678,750 14,253,750

Notes:

1. The budget does not include certain hidden costs that might be incurred when striking

a deal with the telecommunications company.


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2. Product development costs do not include the costs of the plastic cards to be issued by

HSBC.

3. The new current account package would not require HSBC to increase its workforce

as existing staffs are able to cope with the anticipated rise in new current accounts

with the help of advance information systems.

4. Outdoor advertising includes big posters on billboards that may be extremely costly

for HSBC


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Appendix 7: Timescale Explanation


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Objective Details Time Period

Finalising prepaid

card features

5 weeks would be needed to finalise the features of

the new current account package (most notably the

prepaid card).

Brainstorming sessions would be conducted to

ensure that the features included are practical and

simple to use.

Week 37 –

week 41 (5

weeks ending

September

2009)

Product development This process involves designing the current account

package.

Ways to carry out the 7Ps as effectively as possible

would be finalised during this time interval.

The new current account package would be ready

to go into the next phase as soon as inputs from the

new prepaid card are obtained.

Week 37 –

week 50 (14

weeks ending

October 2009)

Customising

information systems

This stage involves IT programmers customising

information systems to suit with the new current

account package.

Most notably is the ability to set standing orders to

debit the new prepaid cards at the start of the month

(as long as there are enough funds in the

customer’s current account).

Week 51 – 42

(10 weeks

ending

October 2009)

Negotiations:

telecommunications

company

Negotiations should be carried out with prospective

telecommunications company in order to secure the

‘free balance update to mobile device’ feature.

Week 49 –

week 1 (6

weeks ending

January 2010)

Front-line staff

training and

development

Training and development of staff that are

immediately concerned with the new current

account package.

Week 51 –

week 15 (17

weeks ending

April 2010)

Support staff

training and

development

Support staffs are help desks staff or any front-line

personnel that are not directly dealing with the new

current account package.

Week 2 –

week 20 (19

weeks ending

May 2010

Notification of other

personnel

The brief for internal circulation would be

circulated during this time interval to ensure that all

Week 51 (1

week ending


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members of HSBC are aware of the new

developments in the organisation.

December

2009)

Commissioning

advertising agency

The advertising agency would be commissioned

during this stage and promotional material will be

designed by an external advertising agency.

Week 50 –

week 12 (15

weeks ending

March 2010)

Pre-implementation

research

Research concerning consumer awareness and

acceptance, initial market perception and economic

research would be done by external research

company commissioned by HSBC.

Week 1 –

week 4 (4

weeks ending

January 2010)

Promotional

materials

Design of promotional materials should be ready

for production.

Production of promotional materials by external

company.

Week 4 –

week 15 (12

weeks ending

April 2010)

Press conference A press conference to announce the rolling out of

the new HSBC current account package.

Week 1

(ending

January 2010)

Web-page

advertisement

The start of promotions through the internet. Week 2 –

week 17 (18

weeks ending

April 2010)

Newspaper

advertisement

The start of newspaper advertising. Week 2 –

week 30 (29

weeks ending

July 2010)

Posters and

brochures

Posters and brochures should be up on bank

branches in the UK.

Week 5 –

week 32 (28

weeks ending

August 2010)

Launch date Launch of the new current account package. Week 18

Sales promotion 8 weeks of sales promotion in HSBC.

Special counters should be set up on the first month

of the sales promotion.

Week 18 –

week 25 (8

weeks ending

June 2010)

Post-implementation Research conducted on market shares, consumer Week 18 –


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research confidence and customer feedback/complaints. week 34 (17

weeks ending

August 2010)

Appendix 8: Brief for Research Agency

Enclosed here is a research brief that should be sent to an external research agency to ensure that the

research carried out would yield results that are relevant to HSBC.

Research Research Objectives Details

Pre-

implementation

research

Consumer awareness and

acceptance

Level of enquiries concerning the new


Initial market perception A level of primary data is required to

determine the initial perception of the new

prepaid card as a means to manage personal

finances.

On-going economic

research

Economic conditions are currently highly

unstable and on-going economic research is

needed to forecast where the economy in the

UK is during the launch of the new current

account package.

Research during

implementation of

marketing plan

Tracking study A tracking study should be done in order to

obtain primary data on consumer

experiences concerning the new current

account package.

The collective of individuals chosen for the

tracking study must be able to represent the

targeted market segments.

Post-

implementation

Market share The increase of market share in current

accounts for HSBC relative to other major

financial institutions.

Also important is to note the profitability of

current accounts using the new prepaid card.

Consumer confidence Research needs to be conducted to gauge

the level of consumer confidence after the

launch of the new current account package.


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This is essential as it is one of the objectives

of the marketing plan to increase consumer

confidence in HSBC.

Customer

feedback/complaints

It is equally important to obtain customer

feedback concerning the practicality of the

new prepaid cards that were recently issued.

Appendix 9: Contingency Plans

Scenario Possible Responses

Further deterioration

of the UK economy

The launch of the new current account package may have to be

postponed should the UK economy deteriorate at an unexpected

rate.

Economic research in the pre-implementation stage should be able

to point out red flags on market conditions.

Launching aggressive promotional campaigns during times of

widespread uncertainty would be unwise as the public would be

sceptical on the credibility of new products.

Failure of product as a

tool of personal

finance

This scenario is highly unlikely as the new current account

package should be thoroughly examined during product

development stage.

Adding to that is the fact that other companies like O2 have

already launched their own prepaid card concept into market.

Should the product fail to generate new current accounts,

additional features might have to be included to increase the value

of the package in the eyes of the customers.

Failure of HSBC to

increase its market

share in the current

account market

The reason for the failure of HSBC to gain market share in the

current account market can be linked to economic or internal

reasons.

Internal reasons include the failure of staff to market the new


Front-line staff may have to be retrained and new promotional

materials implemented in order to increase sales.

Failure of gaining market share may also stem from aggressive

campaigning by competitors like O2.


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Should this be the case, HSBC may have to pump in more

resources to promote the new current account concept more

effectively.

Overwhelming success

of the prepaid card

concept

Should the new current account package achieve overwhelming

success when times are bad in the UK, HSBC may want to

consider opting for the market development strategy.

Currently, China and India holds the largest markets together with

high national savings rate.

Extending this new concept to overseas market may prove highly

profitable.

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