HSBC Product and Brand Management - Report Example

ANALYSIS ABOUT THE BRAND HSBC HSBC is considered as the “world’s largest banking” and as the organization which provides all financial services (Our Purpose, 2013). Their main aim is to grow by enabling the business to flourish by connecting the consumer’s opportunities and helping the individual to recognize their ambitions and completing all their hopes and dreams. HSBC is a British multi-national banking and financial services company, whose headquarter is in London, United Kingdom. According to Forbes magazine, in 2012 it attained the sixth position among the largest public companies and the third position among the largest public held banks and the sixth-largest public company. HSBC is a universal bank and is organized within the four business groups: Retail Banking and Wealth management, Global Private Banking, Global Banking and Markets and Commercial Banking. It has 89 million consumers and about 7,200 offices spread across 85 countries that include the regions of Asia, North America, Africa and South America. PRODUCT PORTFOLIO OF HSBC HSBC provides “widest gamut of trade products and services” starting from the conventional methods (Trade Services, 2013). This will facilitate exports and imports to new and well thought-out solutions: *Personal Financial services: Including consumer finance, HSBC has over 100 million consumers worldwide. It offers personal finance services like mortgages, pensions, investment services, insurance, savings and current accounts, credit cards and loans. And it has also become one of the world’s top ten issuers of credit cards. *Consumer Finance: In order to meet the financial needs of everyday people the company’s Finance Corporation and consumer finance business ensures the point of credit sales and it lends money to consumers. * Commercial Banking: HSBC offers financial services to middle, medium and small-sized market enterprises. The group which is more than 3 million customers consists of clubs and associations, sole proprietors, publicly quoted companies, partnerships and incorporated businesses. *Corporate Investment Banking and Markets: It provides tailored financial services to corporate and financial clients. Global Markets, Corporate and Institutional Banking, Global Transaction Banking and Global Investment Banking are too included in their business line. Their expertise on global access helps millions of consumers from small business towards multi-nationals to “unlock their potential” (Structure and Network, 2013). *HSBC Private Banking: The private banking of HSBC offers complicated solutions to the difficult problems of finance, by viewing the customers affairs fully and providing personal advice and “tailored solution” (Private Banking, 2013). THE BRAND’S CURRENT CORE VALUES HSBC considered that their values represent the character and reflect the “Best Aspects” of their heritage (Private Banking, 2013). Their values are: PERCEPTIVE: HSBC meets the needs of their “diverse customers” around the world by using their ability to combine their global reach across the markets and segments with their local knowledge and expertise (HSBC ‘Different Points of Value’, 2009). PROGRESSIVE: Their commitment is mainly on “continuous improvement in quality” effectiveness and efficiency through team work (HSBC ‘Different Points of Value’, 2009). RESPONSIVE: They are quickly responsive and try to act quickly by ensuring to meet and exceed their customers increasingly changing expectations. Managing of all levels can be done by providing guidance with wisdom and delegating with confidence and operating with a bureaucracy. RESPECTFUL: HSBC includes corporate responsibility in all their activities and they are committed to the local communities’ welfare and development. Their operation activities are carefully based on a group; by making credit discipline and strict expense, and also keeping strong liquidity and capital ratios to guarantee no reduction in their external ratings. HSBC tries to make sure that their long term relationships with the clients are fair. FAIR: HSBC will reveal a high level of reliability and place the group’s interests in front of the individual’s. They fairly and objectively treat their customers, employees and suppliers. STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREAT ANALYSIS OF HSBC: STRENGTHS: After the “financial meltdown” HSBC has become the world’s largest and most profitable banking corporation with the greatest international existence over 128 million customers across the globe (Strengths, Weakness, Opportunities, and Threat Analysis of HSBC, 2013). It possesses the potential to raise future capital. HSBC takes different approaches while dealing with the allocation of resources to customers spread across various geographical locations. Its brand and symbol is recognized everywhere through its marketing activities in various airport terminals. WEAKNESSES: In North American region, HSBC has not been able to yield enough profit which is due solely the bad debts in the built up of the housing that has shown the way to credit decline and a weak housing market. OPPORTUNITIES: HSBC is extending their business towards the Middle East countries and thereby enjoying the benefits of these efforts. HSBC can compensate their losses in the UK and US by investing in upcoming economies like Middle East, China and Brazil. HSBC has become the leader in financial services across the world from by adopting conservative approach among its business models due to its dedication to long term development than short term gains. THREATS: In Western countries of Europe, America and UK consumers rely less on consumer credit and try to save their money instead of spending, which is due to the fall in housing market. The drop in consumer’s ability of spending has affected the recovery from recession in Western economies. This impact also reflects on the bank’s trade relationship in most of the countries. CURRENT POSITION OF HSBC BRAND HSBC brand spent so many years to position their brand as the “The world’s local bank” (New Campaign for the World’s Local Bank, 2002). They achieved their positioning strategy through a campaign which characterized sequence of same single-word observations and same visuals, which are indented to indicate that they are completely invest in understanding the diverse perceptions and the subtleties of diverse cultural aspects. In addition to this, they understood the subtleties. It seems that they had completely invested in money laundering for terror cells and drug kingpins, at the same time ignoring U.S. sanctions which were created against “rogue countries” (HSBC: The Wide Local Bank for Money Laundering and Rogue Nations. Some Brand Positioning, Huh? 2012). The US unit of HSBC managed to position their brand in such a way that they accept Mexican drug cartels’ billions of dollars, by helping Saudi banks with Al-Qaeda (which is a terror financing group) and by conducting 25,000 Iranian dealings which are a total over $19 billion within one week. HSBC’s strategy is aligned to two “long-term trends” (Our Strategy, 2013). Financial flows: The financial flows between the countries and regions are highly concentrated. They expect 35 markets to represent 90 % of world’s growth and a similar degree of concentration in “cross-border capital flows” (Our Strategy, 2013) in the coming decade. Economic development: they expect economies that are currently deemed and emerging to have increased fivefold by 2050. And also they expect 19 of the 30 largest economies will be markets that are currently described as emerging markets. HSBC is one of the few truly international banks, and their advantages lye in their network of markets which are relevant for the international financial flows. Also, their access and exposure to high –growth markets and businesses and their strong balance sheet generate a resilient stream of earnings. Business network: HSBC is able to capture the growing international financial flows. The franchise of HSBC puts them to a privileged position to serve the corporate clients as they grow from small enterprises into large international corporate and personal clients as they become more and more affluent. Through local retail funding and their international production capabilities, they can offer distinctive solutions to these clients in a profitable manner. Wealth management: Through their wealth management and private banking businesses they leverage their position in faster growing markets to capture social mobility and wealth creation. Their main focus is on retail businesses in markets where they can achieve profitable scale. Capital deployment: In order to achieve their targeted return on equity of between 12 % and 15% over the business cycle, they are improving the way they deploy capital. International connectivity, economic development, profitability, cost efficiency and liquidity are the five strategic evaluation criteria which they have introduced for assessing each of their businesses. Based on this only they determine whether to invest in, turn around, continue with or exit businesses. Cost efficiency: They believed that by 2013, they can achieve sustainable savings of between USD2.5 billion and USD3.5 billion through their four programmes. Their four programmes consist of: Implement consistent business models Re-engineer operational processes Streamline IT Re-engineer global functions. Growth: They try to improve their collaboration between their international network of businesses, particularly between commercial Banking and Global Banking and Markets. If they are successful in implementing this strategy they will be regarded as “The world’s leading international bank” (Our Strategy, 2013) STRATEGY: THE POTENTIAL FUTURE POSITIONING OPTIONS FOR THE HSBC BRAND Current account: HSBC has enormous presence across the world and it is one of the Banking giants in UK. HSBC offers various types of current accounts, from “fee-charging packaged accounts” (Our Strategy, 2013) which comes up with extra benefits to directly ahead no added extras bank accounts which does not require monthly charges. Overdraft facility is also provided by HSBC for the customers. The current account facility of HSBC provides 24 hours ATM convenience. Through HSBC’s ATM cards, the customer can access their account and perform different types of banking transactions for 24 hours a day and 365 days a year. Savings Account: Through HSBC’s Savings account, the customer can transfer their increased savings from their own savings account to a fixed deposit, by way of standing instructions to lead them to get higher interest and also it helps to transfer funds in fast suitable and in an easy manner through the “card-to-card transfer facility” (Savings Account, 2013) by way of visa money transfer. CREDIT CARDS: Credit Card is a card which assures the seller that the person who ais using the credit card and also the issuer ensures that the seller gets the payment for them “merchandise delivered” (What is a Credit Card? 2003). HSBC is considered as a Master card/visa issuer who targeted its different consumer based with various types of credit cards and tried to highlight the better usage features along with a reward program. Through the retail branch network and direct mail the credit card is marketed to its consumers. HSBC also considered its credit card accounts as the tool for acquisition of the customers. And they also used print and television advertising during the year. In order to segment the markets, they used the information about the life stage and income for the consumers. CREDIT CARD FACILITY AS MOST POTENTIAL OPTION FOR THE FUTURE: Credit card is a “standard- size plastic token” (Credit Card, 2013). And it has a magnetic strip which holds the readable code for machines. Credit card is considered as the suitable substitute for cheque, or cash and the vital part of internet commerce and electronic commerce. Credit card is also considered as famous from the past some of the years in the markets of India as a majority of all the “nationalized banks” (Sreeni, 2009). The HSBC’s premier Master Card is established in about 24 million parts in the world. The privileges of card holders are:- Own Rewards: HSBC’s credit card provides excellent rewards programs which give 2 rewards points on each Rs. 100, spent on their particular card. The customers can earn rewards each time they spend with their card and the variety of opportunities are shopping, travel, packages, entertainment, air miles and dining in order to indulge in. Fly around the world at no cost: The customer can earn reward points through HSBC premier master card to redeem for miles on airlines like Singapore Airlines, King Fisher, Indian Airlines and Jet Airways. The customer can put in air travel without cost across the world and go for different places by simply spending Rs 100 up to 4 miles. Home and Away: HSBC’s MasterCard is customers input to “unlocking richer experiences” (HSBC Premier Master card Credit Card Services Guide, n.d) across the world with their home and away programme and it helps them to feel like home when they are far away from home. At global territories and thousands of outlets for over more than 40 countries, they provide easy access to dining and shopping privileges for the customers. For Family Members: They provide supplementary cards which ensure the same recognition and emergency assistance in order to protect the family of the customer. For supplementary and primary cards there is no annual fee the consumer has to pay. Safety Net in worldwide: 365 days of a year and 24 hours of a day the customer service representative is there to provide emergency service with premier emergency hotline, and the number which connects the customer to the service representative is (1)3142756781.The customer service assists in cases when their card is stolen or lost by replacing the card as soon as possible. Value added features of Credit cards: Insurance cover for individual travel: If the life of the customer is lost in an air accident the card holders are covered for up to 1 crore. For loss of checked in belongings, Loss of travel documents such as passport, late flights and domestic and international HSBC also provides insurance covers. Travel Guard: Travel guard is Tata AIG’s “Global Travel protection” (HSBC Premier Master card Credit Card Services Guide, n.d) policy. The resident from the age of 6 months to 70 years can purchase travel guard. It is mainly purchased for travel abroad on leisure or business. Travel cash back: The customer can get cash back on hotels, airline tickets and holding packages through -Make my trip.com using HSBC master card, the booking on travel can be made and their benefits are; From international Airfare 5% cash back From Domestic hotels and holidays 7% cash back. From international hotels and holidays 10% cash back. Surcharge on fuel is 0%: The HSBC’s Master card offers customer convenience of petrol surcharge waives and unique benefit. The surcharge levied on petrol purchases by using credit card is waived by HSBC. And it is for the customers who are spending from 2400 to 24000 on dealings on petrol at any pump. Loan on Phone: HSBC premier master card offers the customers a good way to pay on jewellery, computer, dream holidays and new TV through the loan on phone facility. Internet Banking: Through HSBC master card the customer can continuously follow customer’s credit card dealings, trade in reward points, download statements and through online messaging that can communicate privately and directly. Phone Banking: The customers can enquire about their balance and pay bills of credit card without directly going to the bank. This requires customers PIN number and PBN number. Liability is zero for lost card: After registering and reporting the loss of the master card the card holder does not have any liability on credit card. They will be liable for the charges incurred on HSBC Master Card before 24 hours from the time of registry and reporting of the loss. POSITIONING STRATEGY: The bank tries to provide a variety of products and extra benefits which is more than of its competitors in order to increase the spending on card and satisfaction of the customers. The service excellence and brand image and service have placed its credit card at an elevation. HSBC’s marketing mix strategy strengthens its credit card’s market position. HSBC provides six various kinds of cards in order to convince the needs of each customer in their market segment. The demand of the credit card is increasing day by day because the people choose plastic money rather than hard cash. One of the main reasons for choosing credit card by the people is that they need them. The people need credit cards to rent a car, to deserve a moving van, and to “reserve numerous items” (What is the Importance of Credit Card? 2011) or to make a hold on something. The customers can conveniently buy many things online. And also the customers are ready to pay the finest pay for using credit card. This entities huge presence creates advantages over the rivals and leads to provision of comforts to the consumers. There are wide varieties of products that are in front of the customers as they are involved in a complex purchasing behavior. The bank creates a positive image towards HSBC’s credit card by the way of executing a well-organized and successful marketing mix. The product of HSBC creates tendency to buy HSBC’s product by making convenience, satisfying wants and needs and aspect of communication. Email and Telemarketing is the wisest strategy adopted by HSBC in order to approach the present consumers of the bank. The customers have the tendency to incline towards HSBC’s credit card which is due to the influencer or the reference group that is currently using the same as that of HSBC’s big brand name. The strategy that works well with customers is the word of mouth. If a member of a family is using HSBC’s credit card, obviously, the other members and the friends will also prefer HSBC’s credit card instead of choosing other products of its competitors. SUGGESTIONS: By providing services and products which are newly introduced, cheaper and better, HSBC creates competitive advantage against its rivals. In order to place their product against their rivals, they incorporated a product-class and “consumer–benefit approach” (Marketing Analysis and Planning of HSBC in India, 2003). The major rivals of HSBC are: Credit card of SBI, Credit card of Citibank, Credit card of Axis bank, Credit card of Standard Credit card and Credit Card of ICICI. Different types of products: HSBC’s credit card features like rewards program and surcharge waiver on product. They will have to introduce more special features in order to capture the market fully and try to become more superior in credit card facility than its rivals. Different services: In order to safeguard the customer from misuse of their card, the bank has to take more security measures like providing user guide to ensure their security in credit cards. And the bank should ensure the post sale service of the card holder and try to trouble shoot their problem as soon as possible to create good image of the brand. Different Image: The hexagon symbol of HSBC gets high recognition in the minds of the people apart from its rivals, and bank should focus on maintaining that image forever in order to position their brand. For that, they should develop more attractive advertisement activities in order to compete with other brands. IMPLEMENTATION ACTIVITIES: The activities regarding marketing are mainly done to deliver value for the customer, communicate and to make awareness. Product: The product will fail if they are not creating any value for the customer, irrespective of the implemented marketing strategy. The bank will provide a wide range of products for each customer according to their wants and needs. The credit period is free for 52 days and the settlement of buying’s the credit cards is main benefit. And the credit card will come up with an advance cash facility in which the customer can withdraw their cash in the particular credit limit of the cash. The current credit card types present in the market are following: Platinum Credit card of HSBC, Classic credit card in West side company brand of HSBC, Gold credit card of HSBC, Classic Credit card of HSBC, Premier Credit card of HSBC, and Gold credit card in Westside company brand of HSBC. And in order to change the purchasing of installments the HSBC comes up with the loan on phone facility. The bank will widen their facility by picking up the cheque payment service in more areas. Price: Comparing to other brands, HSBC’s credit card is high priced and consumers are willing to pay for HSBC’s product. The charges on the card are levied by bank annually. And the bank provides the offers like no fee for joining and annual fee for selected consumers. The banks is going to offer discount of 50% on the basis of credibility and for the prevailing consumer. Place: The marketing advantage of the bank is in its international presence. It enabled them to easily access the services of the bank while traveling for international level. The prevailing consumers can easily go towards any branches for their application of credit. Across the nation the bank created different channels of distribution. The co- brand association of bank with Westside store enriched its local presence through the focus on its target prospect. By visiting any store of Westside the customer can apply to get Westside credit card of HSBC. And the bank dispatched the card by sending to the mailing address which is provided by the applicant in their application form. Promotion: Through advertising with trade magazines, co-branding, brochures, tele-marketing, email and hoardings the HSBC advertises their credit card. They also try to focus the strategy of word of mouth in order to create a positive image for the product. And the bank provides the cash back offer for the card holders in order to retain them. And the bank can also provide a type of card which can be used through a password manually which offers online purchases securely. It will create security and bank will try to enlarge their base of consumer by persuading the customer who is not choosing the credit card because of the risk involved in it. The customer will engage in complex purchasing behavior because the product is bought for one time and its association is long-term. It is known from the studies that similar purchasing behavior is displayed by similar social class. The strategy of the bank to provide various products influences the purchaser’s behavior to choose the particular product type. The competitors are also offering the similar products to the basic core products. The HSBC’s credit cards’ unique product type and additional features attracted the customers who are looking for brand, class and snootiness. Credit cards of CPP protect the customer from the real financial risk. The magnetic effect is created by the EMI facility for the purchase by the customer. The famous fact is that credit card’s demand is increasing in spite of annual fee levied rising in interest rate. “In the last decade in India, the usage of plastic money encouraged the young middle class to defy the Hindi adage “Don’t stretch your feet beyond your sheet” which is another way of saying, “Live within your means. (Marketing Analysis and Planning of HSBC in India, 2003). HSBC’s pricing strategy is successful in such a way that they are effective in attracting the targeted customer who is connected with their reputation, product and prestige. And customers are not looking for brand image, product attributes and extra benefits along with the product. Sometimes, bank may fail to attract the customers who are looking for cost benefit, and its interest is only in the credit purchase and cashless purchase. The bank will provide a card type which does not have annual fee or joining fee along with the benefit from core product for complete market coverage. Many people are correlating the brand name with the quality and price of the products. “The costlier the better” (Marketing Analysis and Planning of HSBC in India, 2003). This kind of customers usually takes positive approach during their purchase decision. The HSBC ensures the similar substantiates is true along with this significant presence in worldwide as the tagline of HSBC IS “The World’s Local Bank” (New Campaign for the World’s Local Bank, 2002). The variable place in the Marketing mix is created by the bank as this provides benefits to customers. And this offers easy access to the customers while comparing with their competitors. And the customers prefer the product which provides them comfort and good services than their competitors. Subsequently post sale services, and constant association should be provided to understand the benefit of the entity. Through direct marketing HSBC involved in personalized promotion which creates trust and loyalty towards HSBC brand and improve the customer’s communication very effectively, in order to enlarge its market horizon by associating with the brands which is more popular among the target customers. Philip Kotler stated that: “There will be no market for product that everybody likes a little, only for products that somebody likes a lot” (Marketing Analysis and Planning of HSBC in India, 2003). The Association of HSBC with the well-liked brand creates is an encouraging picture for the particular product and the customers’ inclination towards the brand creates a encouraging picture for HSBC. Reference List Credit Card. 2013. Business Dictionary. com. Available at [Accessed on 14 March 2013]. HSBC ‘Different Points of Value’. 2009. The Financial Brand.com. Available at [Accessed on 14 March 2013]. HSBC: The Wide Local Bank for Money Laundering and Rogue Nations. Some Brand Positioning, Huh? 2012. Forbes. Available at [Accessed on 14 March 2013]. HSBC Premier Master Card Credit Card Services Guide. n.d. HSBC The World’s Local Bank. Available at [Accessed on 14 March 2013]. Marketing Analysis and Planning of HSBC in India. 2003. US Essays.com. Available at [Accessed on 14 March 2013]. 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