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In order to get a competitive advantage in the global market, this article seeks to design new products and services for a commercial bank. The bank is in charge of handling withdrawals, receiving deposits, and making commercial loans to both people and small and medium-sized businesses (SMEs). The company operates on a typical paper and branch format. To the worldwide market, the bank should provide mobile money banking and internet banking. Users can utilize mobile money banking services to open an account with a mobile firm and connect to its bank account. These services will enable users to access their account details, send and withdraw anywhere anyplace, print back statements, and make inquiries about their account transactions right on their personal computers (Okiro & Ndungu, 2013).
Conducting a SWOT analysis helped to determine that there is both a need as well as an existing global market for these products and/or services. Analysis of the firm’s strengths and weaknesses as well as potential opportunities and threats in the global banking market generated greater insights into what customer needs and potential markets the business can exploit (Helms & Nixon, 2010). Second, conducting a systematic and objective market research helped understand customer needs and preferences, track market trends and purchasing patterns, identify existing and potential customers, and determine the competitiveness of the bank (Brooksbank, 2013). Lastly, a competitor analysis using Porter’s Five Forces helped understand the competitiveness of business environment the bank operates in (E. Dobbs, 2014). Analyzing the number and strength of the bank’s competitors, how many customers, how much it would cost the clients to switch to competitor products and services, and the threat of substitutes and new entry, helped identify potential needs and new markets.
The major competitive advantage of mobile and Internet banking is making banking tasks and services more efficient, cheaper, and convenient (Okiro & Ndungu, 2013). These virtual services will help the bank to easily deliver services. For example, customers can send money instantaneously much easier by transferring money from their account to another via the Internet. The transactions can be done for a small fee using a secure, Web-based service through a computer with Internet access.
Rapid technological changes and fierce competition are the major risks in the global banking sector. Rapid technological innovations are increasingly transforming banks from the old-fashioned paper-and branch-based business model to a digital model model (Okiro & Ndungu, 2013). However, the changes call for continuous innovation and improvement, which results to shorter product cycle as products become obsolete after a very short time. Similarly, aggressive competition among global banks requires continuous innovate and product improvement. Therefore, if the bank fails to constantly improve these products and services, it is likely to lose its clients to rivals. To minimize these risks, the firm should track customer needs to help continuously refine and improve their products and services.
The HubSpot CRM Software is suitable system tracking the bank’s product and service inquiries and sales. The system is cloud-based and the firm not only track and nurture leads, but analyze business metrics as well. Information derived from the system will be utilized in refining and continuously improving product development. By tracking and understanding clients’ needs and considering them when developing new products and services will help the bank penetrate and grow in the global market.
The more direct digital and mobile distribution channels are the most appropriate pipelines that the business should utilize to deliver the products and services to its clients. Murowaniecki (2016) asserts that market trends and technological changes largely influence the evolution of distribution channels. Legal and regulatory factors are key considerations for entering the global market. Expanding overseas calls for flexibility in working with local and international laws and regulations. Also, culture is a key consideration because the business will success if its products and services add value or meet the needs of the local market. Moreover, the need to create regional trade alliances especially with international mobile companies influence the decision to expand into the global market. Lastly, the need to increase market competition is a major reason to penetrate the global market.
The global supply chain, particularly in the banking sector, is significantly impacted by changing markets and technologies (Murowaniecki, 2016). To cope with these changes, the bank must commit itself to improve the mobile and Internet banking services. Refining these services will generate greater customer experience with the bank.
The firm will adopt a cost plus pricing strategy to set the prices of the product and services. This cost-based method includes direct material, labor, and overhead costs, which is added to a markup percentage. This strategy will help create a profit margin. the virtual operation of these products and services eliminates expenses associated with managing physical facilities like ATMs and bank branches (Murowaniecki, 2016). This factor will allow charge cheaper prices. Cost effectiveness, efficiency and convenience in Internet banking will positively influence target customers to accept the lower prices.
Television and online magazines are effective mass media channels to promote the products and services. They guarantee wider coverage ensuring that ads and promotional campaigns reach a large population (Ogden & Ogden, 2014). The products target both genders, middle to higher income earners, all races, single and married, and working adults. This diversity makes television and online magazines suitable. In addition to these, Facebook and Instagram are the most appropriate social media channels to market the Internet and mobile banking services. These channels are more appropriate because they are extremely interactive and provides a great platform for the company to interact with its customers (Ogden & Ogden, 2014). The high interaction and technological inherent in these channels make them a better choice for the Baby Boomers and Millennials, who constitute the majority of the target segment.
Coupons, rebates, and contents will be used to increase sales on a short-term (Ogden & Ogden, 2014). For instance, the company offer redeemable coupons for their customers to earn discount on certain banking products or services they buy. The business will offer these incentives through direct mail, apps, or even its social sites. Cash refunds or rebates are another incentive that will help the business increase sales (Ogden & Ogden, 2014). The firm will return or reduce, the initial purchase price charged on specific banking products and services they offer primarily to attract and persuade their clients to buy them. Another sales strategy that will be used is contests in which customers will be required to answer questions or solve simple problems related to their banking solutions in which higher scorers are rewarded with banking hampers, gifts, and other prices.
Brooksbank, R. W. (2013). Successful marketing practice: a literature review and checklist for marketing practitioners. International Journal of Wine Marketing.
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.
Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis-where are we now? A review of academic research from the last decade. Journal of strategy and management, 3(3), 215-251.
Murowaniecki, L. (2016). Banking Services and Distribution Channels – Evolution and Prospects. Journal of Applied Computer Science Methods, 7(2), 10-15. Accessed from https://www.degruyter.com/view/j/jacsm.ahead-of-print/jacsm-2015-0012/jacsm-2015-0012.xml
Ogden, J. R., & Ogden, D. T. (2014). Utilizing a strategic marketing approach to managing marketing communications. San Diego, CA: Bridgepoint Education, Inc.
Okiro, K., & Ndungu, J. (2013). The impact of mobile and internet banking on performance of financial institutions in Kenya. European Scientific Journal, 9(13).
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