Marketing of Harpenden Building Society - Essay Example

?The Case of Harpenden Building Society Banking and financial services The world is largely influenced by the powerful impact of marketing activity. Wherever one may go, everyone seems to be bombarded with different information and this means marketing has become a significant part of every organisation. According to Lamb et al (2009), Baker et al (1998), Sandhusen (2000), and Czinkota and Ronkainen (2007) marketing certainly cannot be removed from an organisation especially if it is after of stimulating needs for its product or service offerings. Putting this on the perspective of banking and financial services, marketing is essential especially in the most challenging time for economic activities such as those pertaining to financial aspects of consumers and their housing-related concerns (Srinivasan, 2005). This eventually resulted to creating a need for a good financial market for banking and finance in which the bottom line would be to stimulate needs for certain product or service offerings. This area has become so competitive in which the resulting activity leads to the creation of competitive rivalry. In short, it is important to consider that the presence of new market entrants, power of supplier and buyer and advancement in technology has significantly created an essential force leading to competitive rivalry (Ireland et al., 2007; Hitt et al., 2009). Porter therefore is right on specifying some factors that may essentially lead to the creation of competitive rivalry. Thus, he emphasised that there is a need to go for competitive strategies. This is what the financial market has essentially applied to the extent that there is a point to include economic policy measures just to minimise the presence of competition in the market (Lindbeck, 1973; Lancaster and Reynolds, 2005). The building societies and banks The Building Societies Association (2011) presents some major differences between building societies and banks which include building societies as mutual institutions, are not companies run by their shareholders, and the issue on the limit of proportion of funds. These differences bring forward to some major advantages and even shown in some studies revealing that building societies have outperformed banks implying that mutual organisations may outweigh those stock organisations (Valnek, 1999). There are underlying reasons for this and one of the most significant is the inclusion of rights and privileges for members to receive the right information they deserve to have. The next most important thing about building societies is that they are not considered companies which are highly controlled by shareholders who are influential to maximise profits for increase amount of dividends. The point of this is that there will be low operating cost and other significant privileges that will ensure advantage on opportunity cost. In fact, it was found that building societies remain to have constant rates in deposit and mortgage (Heffeman, 2005). This emphasises that building societies are indeed not under pressure of its stakeholders which means further that the needs of consumers are greatly catered to the fullest. The limit of proportion of funds on the other hand would mean further that compared to banks, building societies are highly secured for investment and this is an opportunity for consumers or investors to go. Harpenden Building Society Harpenden’s company website revealed some of important information about its operation which leads to having a better view at its current trends in the market (Harpenden Building Society, 2010). Harpenden is known for its place in the UK building societies. It significantly belongs to the rank of 52 renowned UK building societies because of its 20,000 members having more than 25,000 accounts. Aside from this, Harpenden has no debt because it eliminates its chance for borrowings on the money market. Another good thing about the financial performance of Harpenden is the upward spiralling growth of its deposits and mortgages. Harpenden is also recognised by renowned institutions because of its great contribution to the society. This is because it tries to incorporate in its strategies marketing activities that especially include corporate responsibility. Harpenden therefore is good at stimulating needs for its product or service offerings. This according to Eldridge (1970) and Dahlen et al (2009) is the basic trend in any marketing activity. Harpenden Building Society and its successful expansion Any company that realises their growth potential in the market usually results to expansion program. This is like in the case of Harpenden. Harpenden is one of the building societies in the UK that relies heavily on the success and strategies creating a competitive advantage over the financial institutions such as banks (Drake and Simper, 2002). To be specific, Harpenden was able to balance the different components in its operation. In detail, Harpenden tries to integrate in its strategies the following essential components in its line of business: employee and customer care, financial consideration, internal business process and learning and growth (Harpenden Building Society, 2011). In line with this, there is no wonder why Harpenden was able to come up with a significant value proposition in the market place. With this, it was able to successfully create its unique identity leading it to further to help its customers identify it in the competition. SWOT analysis Harpenden’s strengths include better operation, which primarily includes its ability to successfully differentiate itself in the market place. This brings Harpenden’s a strong market power with substantial considerations on the level of satisfaction its potential customers. Considering that building societies are not pressured by shareholders to maximize their profit, the level in which customers have substantial part in Harden’s decision making process is a sort of weakness in its system. In this set up, customers may be able to influence the decision making process purely on their advantage. On going trend of financial concerns in the UK is a good opportunity for Harpenden. In general, people substantially look for better alternative how their financial concerns may be addressed. Building societies especially Harpenden because of its strong market power cannot be left behind from the possible alternatives of customers. The unstable flow of worldwide economic condition remains a threat to building societies in the UK. This is a sort of external factor that influences everything in the operation primarily on its marketing activity. This means that Harpenden must be able to come up with innovative approach in its marketing activity just to keep its market informed. Conclusion The success of Harpenden is about hitting the right timing and having the right tool in the process. This means that its competitive advantage certainly starts from its ability to consider the minor details of its operation. Marketing activity is crucial to the success of Harpenden. Thus, the right value proposition must be integrated in this marketing activity that will continue help Harpenden be a cut above its competitors. References Czinkota, M. R., and Ronkainen, I. A. (2007) International marketing. USA; Cengage Learning. Baker, M., Graham, P., Harker, D., and Harker, M. (1998) Marketing: managerial foundations. Hongkong: Palgrave Macmillan Australia. Building Societies Association (2011) ‘What’s the difference between a building society and a bank’. [Online] Available at: http://www.bsa.org.uk/difference_bank_bs.htm (Accessed: 26 February 2011). Dahlen, M., Lange, F., and Smith, T. (2009) Marketing Communications: A Brand Narrative Approach. Spain: John Wiley and Sons. Drake, L., and Simper, R. (2002) ‘Economies of scale in UK building societies: A re-appraisal using an entry/exit model.’ Journal of Banking & Finance, Vol. 26(12): 2365-2382. Eldridge, C. E. (1970) Marketing for profit. Michigan: Macmillan. Harpenden Building Society (2011) ‘Company Profile’. [Online] Available at: http://www.harpendenbs.co.uk/ (Accessed 26 February 2011). Heffeman, S. (2005) ‘The effect of UK building society conversion on pricing behaviour.’ Journal of Banking & Finance, Vol. 29(3): 779-797. Hitt, M. A., Ireland, R. D., and Hoskisson, R. E. (2009) Strategic management: competitiveness and globalization: concepts & cases. USA: Cengage Learning. Ireland, R. D., Hoskisson, R. E., and Hitt, M. A. (2007) Competing for advantage. USA: Cengage Learning. Lamb, C. W., Hair, J. F., McDaniel, C., and McDaniel, C. D. (2002) Marketing. California: South-Western. Lancaster, G., and Reynolds, P. (2005) Management of marketing. Great Britain: Butterworth-Heinemann. Lindbeck, A. (1973) Swedish economic policy. California: University of California. Sandhusen, R. L. (2000) Marketing. USA: Barron’s Educational Series. Srinivasan, R., Rangaswamy, A., and Lilien, G. L. (2005) ‘Turning adversity into advantage: Does proactive marketing during a recession pay off?’ International Journal of Research in Marketing, Vol. 22(2): 109-125. Valnek, T. (1999) ‘The comparative performance of mutual building societies and stock retail banks.’ Journal of Banking & Finance, Vol. 23(6): 925-938. Read More