+1-817-968-5551
+61-488-839-671
+44-7480-542904About Expert
Key Topics
- Requirement
- Solution
- Executive summary
- STP Strategy of BOC:
- Micro factors
- Macro factors
- Analysis of Consumer Perception
- Product in the marketing mix of Bank of China
- Place in the Marketing Mix of Bank of China
- Price in the Marketing Mix of Bank of China
- Promotion in the Marketing mix of Bank of China
- Conclusion
- References
Requirement
Marketing Management of Bank Of China
Solution
Executive summary
Bank of China Limited is considered as one of the major state-owned commercial bank of china which was established in 1912. It replaced Imperial Bank of China with the help of Republican Government. It is the ancient bank in china which is still in existence. Till 1942, Bank of China issued banknotes on behalf of the government along with another bank such as Central Bank of China, Farmers bank of china and Bank of communications. In this report, we will study the marketing plan of the Bank of China and also its success factors. This will help in analyzing the perception of consumers towards the financial services of BSC. Bank of China has many subsidiaries like BOC Hong Kong (Bell, 2013), BOCG Insurance and other financial institutions, and BOC International. All these subsidiaries of the BOC provide a broad range of superior financial services to corporate customers and individual as well as different global financial institutions.
Allassignmenthelp.com offers the most effective management assignment help and support from experienced and professional assignment experts. Students can contact us at any time to get cheap assignment help and get rid of all their academic worries and tensions.
From the past few decades, Bank of China has played a significant role in the financial history of China. It was established by the approval of DR. Sun Yat-Sen. In its 36 Years, the bank served as the international exchange bank, central bank and specialized foreign trade bank exclusively. During 1948, it was recognized as the state-designated foreign exchange bank. Bank of China builds its strategic positioning in the market by building a new strategic plan which was permitted by its Board of Directors in March 2010 (Chang, 2012). The main aim of Bank of China behind building strategic positioning is to be a big multinational banking group based on combined and varied cross-border business platform, with a central business of commercial banking. Effective strategic positioning enables the bank to be a growing internal bank delivering excellence and better quality services to its customers.
STP Strategy of BOC:
Segmentation
Market segmentation is the process of viewing a heterogeneous market and also known as a process of dividing a market into similar product needs and smaller groups, for the motive of choosing appropriate target markets. Bank of China has segmented its market on the basis of individual and institutional clients. Segmentation on the basis of Institutional clients enables a closer match of corporate resources as per the segment requirements. By segmenting it also helps in enhancing the customer satisfaction level because it identifies the requirements of customers in an appropriate way. Apart from this it has also adopted the gender-based segmentation which helped BOC in adjusting its communications policy to the degree to which the customers can understand the composite nature of financial services. Recently, men are the target segment of the Bank of China as women are viewed to be less confident towards the financial services offered by the Bank of China. Segmentation strategy followed by the BOC enabled it to enhance customer retention because the customers feel like they are the part of the organization (Hassan, 2012). Large customer satisfaction is provided by BOC through which it can easily foresee changes in buying behavior of the target market.
Targeting
Targeting process is known as a proactive selection of a suitable market segment. The target market of Bank of China is Small and medium corporate clients or private individuals. BOC follow different targeting strategies to target its potential customers. Overall marketing effort of BOC is concentrated on the multi-market segment. Multi-market segment means Bank of China is dealing with different products and services like credit services, deposit services, loan services and various others. This strategy is chosen because it provides increased level of satisfaction to its customers by satisfying their different needs. Multi-segment market concentration strategy also helps the Bank of China to spread its risk level. Bank of China can build a solid position in multi-segment by utilizing good information about the customers. Dibb (1991) states that there are two criteria that must be met when evaluating target segments. First and foremost, BOC should ensure that targeted market segment should be large enough and would be valuable for BOC. The Second criterion is that BOC should determine its target market on the basis of its competitive advantage. BOC should plan its activities carefully which enables it to gain a competitive advantage in the market.
Positioning
Positioning of services require Bank of China to place its products in the way that it is acceptable to the selected target market segments and able to cope with their close competitors. Placement of product in the market is affected by different factors. The positioning of the product is a management strategy that utilizes the information to build a strong impression of the product or service in accordance with the requirements of the intended market. Bank of china has positioned its services very well in the market by offering varied financial services including RMB clearing in Hong Kong. This will create a good image of BOC in the market through which it can beat its competitors and enhance its customers. Due to more competition from the other existing financial institutions, Bank of China tries to produce effective financial services. This makes it different from other financial institution. The following strategies are utilized by Bank of China to position itself in the mind of consumers:
Current accounts of BOC provide extra interest to customers
BOC offers more privileges to customers with the least subscription fee.
Factors
There are various factors that exist in the environment which influences the functioning of the Bank of China in a significant manner. These factors can be on micro and macro level of the environment.
Micro factors
Micro factors include those elements which are controllable by Bank of China’s management effectively. Micro level factors which influence the functioning of Bank of China are bank's internal factors, including the terms of asset size, capital liquidity, the size of the asset, capital adequacy, operations management capabilities, risk control and asset quality. The important issues to manage the profitability and competitiveness of Bank of China are to minimize non-performing asset ratio and improve risk management capabilities (Ika, 2012). Competitors are also considered the most influencing factors for Bank of China. Bank of China faces tough competition from Industrial and Commercial bank of China and China construction bank cooperation. It is necessary for BOC to note down every single activity of their competitors which will help BOC in formulating its strategy as per their actions. Since 1981, two times non-performing asset disrobing has inserted new challenges to Bank of China. A business model which emphasizes not only on the quality of asset but also on the quantity is regularly being replaced by the modern philosophy of management.
Macro factors
Macro factors are those which influencing the profitability of Bank of China to a larger extent. Macro-level factors for Bank of China mainly include monetary policy, inflation, economic growth, financial development and economic cycle. From an international viewpoint, the dynamic international situation brings uncertain macro environment for banking services. Therefore, it is necessary for Bank of China to analyze external factors affecting their profitability. There are following macro factors which influence the operation of the BOC in a significant manner:
-
1. Economic Growth: First, rising economic enhance social and consumer investment, thereby enhancing the demand for bank credit, and earned more income through interest which ultimately enhances the profits of Bank of China. Second, development of economic leads progresses in trading activity, which enhances the transitional income of banks and also leads to profit-enhancing (Soteriou,2013).
-
2. Monetary Policy: Quantitative monetary policies affect the profitability of Bank of China by controlling the supply of money. First of all, monetary policy enhances the supply of money, which directly enhance the level of available funds of banks, thereby ultimately enhance the interest revenue of bank. Another thing, the rises in demand for bonds enhance its level of price. We already know that there is an inverse relationship between the interest's rates and prices of the bond. Lower the interest rates led higher prices of bonds, which enhance investment and stimulates consumption. Increase the scale of bank credit, therefore enhancing the income of BOC.
-
3. Inflation: It influences the earning capacity of Bank of China in the following ways:
It minimizes the real income of consumers.
Building consumers more agreeable to invest in different financial products of BOC that have a higher rate of return. -
4. Financial market development: There are both substitution effect complementary effect between indirect financing and direct financing, and therefore the relationship between the financial markets and banking sector are uncertain. The growth of financial markets minimize the consumer demands for banks, building an economical connection between them. In the meantime, there is a definite complementary connection between financial markets and banking sector because of their common promotion roles in the expansion process. This will influence the functioning of Bank of China in a significant manner.
Political factors
1. Formal and informal rules of government
2. Unsettled political force
3. Legal issues for e-commerce banking
4. Lack of regulations supporting privacy, consumer rights
Economic factors
1. Skilled and abundant labor
2. Sigh rate of savings
3. Potential urban growth
4. High rate of inflation
5. More export business
6. High prices of property
Social factors
1. Family size
2. Education
3. Religion
4. Consumer lifestyle
Technological factors
1. Development of new products
2. Dynamic purchasing mechanism
3. Innovative production technology
4. New working methods
Through all this, it can be said that macroeconomic do have an extensive influence to the earning capacity of Bank of China. All the above mentioned macro factors have a positive correlation with the effectiveness of bank.
Analysis of Consumer Perception
Today, consumers have become more sensitive towards the products and services offered by the different banks. Customers expect higher quality services from the Banks which, if completed, could deliver result in an expressively enhanced manner. Customers can be satisfied by providing efficient and valuable services. Consumers demand more security of their income from the banks which will enables them in enhancing the trust of customers towards banking services. Consumers feel more benefited by the E-channels policy of Bank of China. This facilitates the customers of BOC in a significant manner. As per the continuous growth in information technology, the world has become a large place, and it has brought a various unpredictable revolution in the banking system. Customers in Rural Branches of the Bank of China says that Bank of China is delivering excellent services to them and also focuses more on building long lasting relationship with their existing customers. In addition to it, customers in semi-urban areas concluded that services provided by Bank of China are good but not of high quality. People of rural areas are different from urban areas in thinking. To understand the consumer perception towards the banking services we analyze their responses as per five different kinds of dimensions (Matthews, 2013). These five dimensions namely, responsiveness, empathy, reliability, tangibility, and assurance.
-
Reliability: On this parameter, it is found that the consumer attitude towards reliability of banking services delivered by Bank of China has been highly appreciated by the customers. The least efficient parameter of BOC is promptness and quickness in handling the services. BOC services can be reliable only when it focuses more on their customers and provides quick response in case of any problem. This will improve the reliability level of Bank of China.
-
Empathy: Most of the customers expressed that the bank employee's nature of willing to help customers is really very excellent. It is the main important reason behind the success of Bank of China. It is important for BOC to maintain this performance. Bank of China should solve customer problems related to bank operations on prompt basis without wasting any time on it. Bank of China can be empathetic by keeping the working hours most suitable to customers.
-
Responsiveness: Customers expressed that the customer support services provided by Bank of China show the highest responsiveness. Customers said that Bank of China is provides effective services but it does not give quick response towards any situation. This makes the functioning of BOC ineffective (Huang, 2016). Bank of China should reducing the waiting time and also provide high support services to their customers to enhance their responsiveness.
-
Assurance: Customer said that assurance parameter of BOC is very efficient. This is because BOC has efficient staff which manages the overall functioning of the organization in an effective manner. Overall, Bank of China is considered more creditworthy for the consumers.
-
Tangibility: As per the feedback of consumers, employee’s professional way of dressing and central location of BOC is considered to be the high scorer in terms of tangibility parameters. Customers said that the visual appearance of BOC is excellent. Due to this, it is the most demanding bank for customers.
Marketing mix
Creating a marketing mix for an organization is considered as the iportant function of management. The marketing mix is about putting the right product, at the right place, at the right time and at the right price.
Product in the marketing mix of Bank of China
Bank of China is dealing with different products and services. It has a separate platform for providing its efficient financial services to its customers. Product portfolio of BOC includes below mentioned aspects:
Personal banking, which is a combination of different services like personal savings in the current account, optional deposit account, or installment fixed deposit. Personal loans for business, education, housing and personal wealth management along with provident fund comes under this banking. It also contains domestic remittance, personal exchange through overseas-inward and also includes other services like bill payment, bill transfers, and telephone banking.
Corporate banking contains corporate financing through supplier's credit, export buyers and syndicated loans. Corporate banking also enforces corporate savings, trade services, and corporate financial services.
Insurance contains various facilities like general insurance, life insurance, health insurance and aviation insurance.
Bank Cards contain Debit cards, Credit cards and utilization of ATM site (Bahadir, 2013). E-banking is also in high demand nowadays.
Investment banking contains merger and acquisition, securities sale, IPO financing, direct investment, financial consulting and investment research.
Aircraft Leasing contains products and services for investors of aircraft like structured finance, direct-operating lease and aircraft remarking.
Management of Asset contains management of investor’s products and funds management.
Financial services contain referring services for institutions and individuals.
Place in the Marketing Mix of Bank of China
Bank of China is considered extremely active in the international market, and it has subsidiaries in every continent. It established its first overseas branch during 1929 in London. Bank of China has operations in approximately 26 countries including Brazil, Canada, France, USA, Australia and Germany. Efficient, professional capabilities of BOC enables it to deliver effective customer services by implementing efficient and reliable strategies. Bank of China continuously enhances retail operations infrastructure to certify qualitative services. Its management channels also deliver financial services to different customers with a broad network of the online platform, flexible service channels, branches, and automatic banking facilities. Bank of China also provides one-stop answers through customer-solution managers. It is also offers its products and services to personal and corporate clients through its treasury-marketing team and efficient distribution network (Lin, 2013). Currently, it is also finalizing a deal with AFG to deliver home loans by utilizing third-party channels. This will enhance the customer base of BOC.
Price in the Marketing Mix of Bank of China
Corporate banking is considered as an important source of generating revenue. It established this unit during 2008 for enhancing product innovation and promoting business interaction. Its management team synchronized itself in the market of finance to build its pricing policies. All products and services offered by BOC scrutinized effectively and then different policies are created that maintains a proper balance between payments and affordability. It applies least rates on its banking services and cards. This was done by the organization to maintain its loyalty with its customers. Bank of China has efficient and skilled financial management team that formulates effective pricing policies and reports based on outcomes of market surveys so as to deliver high customer satisfaction.
Promotion in the Marketing mix of Bank of China
Promotion activities are considered as the key part of any business organization and Bank of China utilizes it to promote its products and services in the market. Bank of China was offered 7% cash rebate on shopping with a Bank of China Shop-Card, 24% off on fees for travel insurance, 4% cash-back while using a credit card, bank's credit card holders can participate in various activities of the bank than holders of a debit card, and lesser processing fees during transferring funds (Su,2013). Behind conducting such activities, the main aim of BOC is to enhance its visibility and brand awareness.
Conclusion
After studying all this, we can conclude that Bank of China should focus more on delivering the efficient financial services to their customers. There are several factors in the environment which influence the functioning of BOC. But in spite of these factors BOC should put efforts in delivering higher services to their customers (Pomeranz, 2016). It can be said that micro and macro factors of organization substantially influence the profitability of Bank of China. The efficient marketing plan of product and services enables Bank of China to formulate financial excellence policies which attract a large number of customers towards its services. Deriving satisfaction to the customers should be the main aim of BOC, instead of generating profit. If the organization is delivering efficient customer services it ultimately can generate high revenues. A strong workforce of BOC differentiate its services from its competitors. Thus, we can say that Bank of China should strengthen its marketing policies and should focus more on delivering more customer support services to its customers.
Place Order For A Top Grade Assignment Now
We have some amazing discount offers running for the students
Place Your OrderReferences
-
Bell, S., 2013. The Rise of the People's Bank of China. Harvard University Press.
-
Chang, T.P., Hu, J.L., Chou, R.Y. and Sun, L., 2012. The sources of bank productivity growth in China during 2002–2009: A disaggregation view.Journal of Banking & Finance, 36(7), pp.1997-2006.
-
Pomeranz, K., 2016. China's Growth: The Making of an Economic Superpower by Linda Yueh; The Rise of the People's Bank of China by Stephen Bell and Hui Feng..... London Review of Books, 38(4), pp.33-34.
-
Hassan, S.S. and Craft, S., 2012. Examining world market segmentation and brand positioning strategies. Journal of Consumer marketing, 29(5), pp.344-356.
-
Dibb, S. and Simkin, L., 1991. Targeting, segments and positioning.International Journal of Retail & Distribution Management, 19(3).
-
Ika, L.A., Diallo, A. and Thuillier, D., 2012. Critical success factors for World Bank projects: An empirical investigation. International Journal of Project Management, 30(1), pp.105-116.
-
Soteriou, A.C. and Stavrinides, Y., 2013. An internal customer service quality data envelopment analysis model for bank branches. International Journal of Bank Marketing.
-
Matthews, K., 2013. Risk management and managerial efficiency in Chinese banks: a network DEA framework. Omega, 41(2), pp.207-215.
-
Bahadir, S.C., Bharadwaj, S.G. and Srivastava, R.K., 2015. Marketing mix and brand sales in global markets: Examining the contingent role of country-market characteristics. Journal of International Business Studies, 46(5), pp.596-619.
-
Lin, T.T., Lee, C.C. and Lin, H.C., 2013. Analysis of customer profit contribution for banks with the concept of marketing mix strategy between 4Cs and 5Ps. Service Business, 7(1), pp.37-59.
-
Su, L., Li, T., Hu, Y. and Chen, J., 2013. Factor analysis on marketing mix of online pharmacies–Based on the online pharmacies in China. Journal of Medical Marketing: Device, Diagnostic and Pharmaceutical Marketing, 13(2), pp.93-101.
-
Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.
Give your grades a boost
Just share your requirements and get customized solutions on time.
-
1,168,768 Orders
-
4.9/5 Overall Rating
-
5,052 Experts
