3.0 Market Conduct of Bank Industry
The banking industry in Malaysia started getting significant back in the 1900s when rapid economic development occurred. The growth in economic was the result of sky-rocketed profit from the rubber plantations and the tin industry, which later causing the opening of foreign bank branches and the setting up of Malaysia’s first domestic bank – Kwong Yik (Selangor) Banking Corporation in 1913, which is also now known as MayBank.
The banking industry has continued its steady growth and expansion until eventually there was a need for a governing body to oversee the activities and operations of the numerous banks in the country. This led to the establishment of ...view middle of the document...
Special attention should be focused on young individuals opening their first current accounts and high net worth customers.
3.2 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). Data taken from SWOT and PESTEL analysis enables marketers to define the point-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.
Points-of-parity are associations that are not necessarily unique to the brand but may in fact be shared with other brands (Brunner & Wanke, 2006). There are two types of points-of-parity, namely, category and competitive points-of-parity. Category points-of-parity includes a particular financial institution being a reputable financial institution and also a bank entrusted with fiduciary responsibility. In terms of competitive points-of-parity, a particular bank must be seen to break-even with other financial institutions in terms of service quality.
3.2.1 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).
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 5 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.
Prepaid card as one of the product being marketed now acts as a mean to ensure that customers do not overspend by ensuring prudential budgeting on financial resources. It is also away to solve overspending issue in our country.
Furthermore, most banks in Malaysia have introduced the real time balance alert. Real time balance alert will be sent to the customer’s mobile device every time a prepaid card user purchases something. This balance update will notify online banking system the prepaid card user on the amount of money spent and the amount of money left for free. Banks need to collaborate with companies like Digi, Maxis and Celcom to provide this service.
Another unique element of in the banking industry is the e-banking. This system gives flexibility in managing the customer’s financial resources. Bank customers can access their official website of their bank to and set standing orders on how much money to load onto budget manager every month as long as the finds are available in their current account.
As service is also considered a product in...