Brand Positioning of Co-operative Bank - Essay Example

? Brand Positioning of Co-operative Bank Introduction Brand positioning is the most important step in any business which helps it in achieving success. It mainly deals with planning of successful new products. Brand positioning ensures that the brand activity has one common aim which is guided and delivered by the benefits of the brand. It is the procedure by which the marketers create an identity or image about the product, brand and the organization in the mind of the target market. Successful brand positioning is dependent upon the identification and communication of the uniqueness and differentiation of the brand. Brand positioning of an organization involves the following steps: 1. Identification of the direct competition of the business (including players offering products or services amongst bigger portfolio of solutions) 2. Understanding of the brand positioning of the competitors in the market. 3. Documentation of the own positioning of the company. 4. Comparison of company’s positioning with its competitors in order to identify the possible areas of differentiation. 5. Development of distinctive differentiated and value based brand positioning concept. 6. Creation of a positioning statement with customer value propositions and messages used for the purpose of communication development throughout the target audience. In order to develop a distinctive place in the operational market, an organization should choose a target market followed by the creation of a differential advantage in their mind. Thus, brand positioning is the medium by means of which the company can convey to its customers that what it desires to achieve for them. It can be said to be an activity of creation of the brand offer in such way that it will occupy a separate value and place in the mind of the target customers. It includes identification and determination of the similarity as well as difference for ascertainment of the correct brand identity and creation of proper brand image. An effective brand positioning helps in directing the marketing strategy by explanation of brand details, distinctiveness of the brand, its similarity and dissimilarity with competitive brands and specific reason for using the brand. It is the base of development or increase of required knowledge or perception of its customers. It is the only feature which distinguishes the products or services of a company from its competitors. Financial condition of Cooperative banks in Europe The financial crisis situation of the countries and financial institutions are not over. The financial condition is far away from its stability and the confidence of the public in the financial institutions is very weak (Groeneveld, 2011). The Cooperative Banking Group has weathered/battered present and previous periods of the financial distress situation relatively well (Acadia, et al., 2010; EACB, 2010; Wyman, 2008). The cooperative banking group has recovered from the financial crisis situation of the period of 2007-2008 in a better pace as compared other shareholders value or the listed banks. The financial crisis leaded to the critical assessment of the business principles, models and rules in the banks. The top priority is given to safeguard of the stability in the global financial system. A major effort was given on the restoration of confidence of the customers on the financial sector. The Basel Committee on Banking Supervision has announced high capital and liquidity requirements for the financial systems and banks as the preventive measures for reducing the financial crises to some extent (Basel Committee on Banking Supervision, 2010). This regulatory reform will result in the shift of the funding structure from the short term and volatile sources to long term and stable sources like capital and other deposits (Kodres and Narain, 2010). This financial crises situation has resulted in the increased awareness of the investors related to the capital endowments of the banks. Thus, it is likely that the market participants will request for additional buffers above minimum regulatory requirements. Limitation in the funding source along with increasing demand will result in increasing funding cost as well as increasing competition in medium or long term (EBF, 2012). It will result in high credit rate interest and low potential rate of potential economic growth. Main effects Characteristics or features of new financial system Different Rules Implementation of corporate governance resulting in increased attention to the risk management. Compensation schemes are introduced for increasing the incentives. Increased regulation and supervision for the financial institutions and banks at an international level. Higher solvency as well as liquidity requirements for the banks. Lasting policy and political influence resulting in solving various issues related to the rundown of government intervention, banking taxes, exit strategies, proposals of financial transaction taxes, resolution funds and turnaround of the monetary actions. Different business principles Customer centricity has increased. Morality as well as integrity has increased. The business now set goals based on long term perspectives rather than focussing on short term profits. The businesses provide equal attention to all the involved stakeholders rather than focusing on only the shareholders. The business principles reflect transparency in the internal and external functioning of the organizations. Different business models The business models show transparent and much simpler activities. The organizations focus on reorientation in the home markets because of the national support. The present business models have less scope for the large scale international aspirations. One of the reasons behind this is greater support from the national governments. The change in the business principles of banking and financial system of Europe will be contributing mostly in the restoration of the financial stability and maintenance of cautious behaviour of the banking and financial system. These changes hope to result in the regain of trust and confidence of the customers and the financial markets towards the banking and financial system. It is also expected that the banks will cooperate with each other to function properly and stabilize the economic environment in a global respect. The government has rightfully demanded a behavioural change from the banks and other financial institutions where they would make greater focus on the morality and integration, transparency in the operational activities, customers and long term perspectives. The Cooperative Bank Plc The Cooperative Bank Plc is a renowned commercial bank which is headquartered at Balloon Street, Manchester, United Kingdom. It was formed in the year 1872. The bank has marketed itself as an ethical bank which avoids making investments in companies that are involved in elements of fossil fuel extraction, arms trade, animal testing, genetic engineering etc as mentioned in the ethical policy. The ethical policy of this bank was introduced in the year 1992. In 2002, the bank and Cooperative Insurance Society was brought under direct control of an incorporated holding society named as Cooperative Financial Services. Current position of Cooperative Bank Plc Although the cooperative bank has also suffered from the global financial crisis but the financial performance of the bank shows that its business is growing steadily. The customers who are making investments in the bank are satisfied by its products and services which are in line with the cooperative principles, values, social responsibility and fairness. A remarkable difference between the Cooperative bank and its competitors is that the bank does not rely on the financial markets for lending to the customers (The co-operative bank, n. d. a). The lending offered by the bank is funded by means of customer deposits. The financial position of the bank is strong which can be known from its credit ratings. The bank is having the highest liquidity ratio in its market which means that it is relatively easy to convert the assets of the Cooperative bank into cash. The bank is also well capitalised as it is having remarkable amount of reserves. The bank always maintains a sensible approach towards the lending. The underwriting as well as the arrear management processes is subjected to improvements and reviews on a regular basis. The loans of the bank are high quality loans. Recent issues Cooperative bank continues to provide lending to its existing customers but it has halted providing lending to the new corporate customers. The lending to other individual retail customers remains unaffected. According to the bank, a review on its capital, lending position and commercial strategy have resulted in taking the decision that providing lending to the new corporate customers should be halted. Competitors of Cooperative Bank Plc Some of the competitors of Cooperative bank are HSBC, Standard Chartered, Barclays, Lloyd Banking Group, Royal Bank of Scotland, Harrods bank and Tesco bank. Banking Model of Cooperative Bank Plc The banking model of Cooperative bank is built from the brand positioning strategy of ‘make good money.’ The new brand positioning statement of the bank is ‘make good money’. The financial institution which serves a large part of United Kingdom chose this catchphrase for conveying the message that the individuals can make the money do many good things in the community along with making good amount of money for their own by taking good monetary decisions. The psychology of ‘make good money’ is that the customers will be able to make a positive difference in their income but without the involvement of high cost. It is cheap as well as easy to ‘make good money’ by making investment in Cooperative bank. Present marketing communication strategy in Cooperative Bank Marketing communication theory has been integrated by the research scholars for defining all the essential components of the communication matrix. Advertising, Direct Promotion, Public Relations and Sales Promotions are four vital cornerstones of the integrated marketing communication (Kitchen, 2004). Marketers mostly use the advertising strategy for creating awareness among all the customers through television, various print advertisements etc. Sales promotion, on the other hand, is used for generating awareness among the customers about the products by providing in-store displays, free sample distribution, free gifts etc. to them. Organizations use public relationship strategy activities for creating awareness among the public by organizing various activities like public events, newspaper editorials, trade shows etc. Many organizations use most of the components of the integrated marketing mix in order to communicate with the customers and make them aware of the brand and the organizations. In order to understand the marketing communication strategy of Cooperative Bank, it is very important to understand the main difference between the marketing of financial services and the marketing of other products. The products or services provided by the banks and the financial institutions have a limited range up to the Savings Bank Account, Current Account, Term Deposit accounts in the deposit area (Shodhganga, 2010). Today, the banks offer various other products like profit security based regular income, loans for education, marriage, retirement benefits etc. to facilitate its customers. In present scenario, when the managers of most of the companies remain busy achieving managerial skills, the bankers have to make immense efforts for strengthening the financial condition of the banks and other financial institutions (on which the economic condition of entire nation depends). The banks are product oriented organizations that place their available range of products and services before their prospective targeted customers expecting them to choose assuming that these customers have knowledge, interest, skills and time to choose the products/services which are best suitable for them. The banks and financial institutions are also conscious about their corporate image as well as their projection. The steps taken by the banks or financial institutions in the direction of the adoption of marketing strategies are: Having total view of the needs and demands of the customers. Meeting these identified needs and demands in best possible way. Identifying the potential customers Conducting various activities in the branches which create a long term relationship with the customers. The Cooperative bank focuses on the strategy of Direct Promotional activities where it promotes its products and services to the customers and attracts and retains them by means of its quality service, long term assistance and additional facilities. The cooperative bank has its staff or employees equipped with vast marketing and communication skills to seek the attention of the customers towards its products and services. It is the communication and marketing skills of these employees which play major role in retaining the existing customers and bringing in new customers. Products offered by Cooperative bank The cooperative bank offers a wide range of financial products starting from savings account, current account, and term depository account to loans and other additional facilities to almost 6 million customers in United Kingdom. Brand positioning strategy implemented by Cooperative bank The Cooperative bank keeps the interest of the customers in the first place. It has an element of social mission which focuses on the local community of the entire United Kingdom. The bank publicly states that it does not focus on maximising its profit, rather it focuses on the maximization of the customers value. The perception and appreciation of the customers, which is well known, has developed as a result of this behaviour and responsibility of the bank towards its external stakeholders. This has also helped in creating a strong brand image of the bank to its customers. Customer Perception Map Attribute Ethical assurance to the internal as well as the external stakeholders. This creates a level of trust and confidence of customers on the bank. Functional level benefits Provides assurance to the customers and increases their reliability by providing quality services and keeping their interests in the first place. Psychological Level The customers feel happy that their interest is kept in first position by the bank. It provides them a great satisfaction that the bank does not focus on maximization of profits but on the maximization of the customer’s value. Recommended Strategy The Cooperative bank should aim at building intimate relationship with its customers by making their banking experience enjoyable and simple. The brand focus of the bank should be centred on the ideas of simplicity and flexibility. It should practise various problem solving methods in order to find out unique ways of helping the customers to reach their goals. The website of Cooperative Bank should clearly convey the positioning of the bank for generating awareness about its brand among the customers. The bank should communicate details about the newly focussed brand positioning strategy to its employees or staffs in a staff meeting. A presentation should be delivered in order to introduce the focused brand positioning strategy to the employees in such a way that it demonstrates the brand’s authenticity. This will help to improve the staff interaction with the customers and a refined business process will be created to make the brand positioning strategy successful. Target Segment The cooperative bank should identify its target market before implementing the brand positioning strategy otherwise it will result in a waste of resources trying to attract the non potential customers. The marketers should target their market based on the income level, demographics, education level etc for increasing the effectiveness of communication strategy (Berkowitz, 2011). Segment Age Group Annual Income Level Psychology Education 1 18-23 >$ 30000 Driven by the social trends. Have no idea about ethical trading. High school & College (level of education) 2 24-35 $30000-$75000 Understand the benefits of ethical trading, they demand quality products and are willing to pay extra money for these products. College level or masters level (level of education) 3 36-65 >$ 75000 Purchase products for portraying self image among the peer groups. Educational level does not influence the purchasing behaviour of this group. Segment 1 and 2, being the largest segment in its size; make up more than 40 percent of the population of the financial institutions. The average age customers with the highest income provide highest satisfaction to the financial institutions by making huge investments. These customers have high knowledge about the banking world. Thus the Cooperative bank should focus on all these customer segments while implementing its brand positioning strategy. The bank has high opportunity of achieving success in its brand positioning strategy. Implementation The Cooperative bank should differentiate itself from its competitors by means of the quality of its ethically driven, customer centric and member led banking model (The co-operative bank, n. d. b). It should develop deep relationship with the existing customers because the loyal customers will influence others and will contribute to a stable revenue base. It should develop effective strategies for building and managing strong group of loyal or committed consumers. All the above mentioned strategies along with well planned and highly dedicated effort will help in strengthening of the Brand of the Cooperative Bank. Reference List Acadia, R., Llewellyn, D., Schmidt, R. H., Arbak, E., Peter, W. and Groen, D., 2010. Investigating diversity in the banking sector in Europe: Key developments, performance and role of Cooperative Banks. Brussels: Centre for European Policy Studies. Basel Committee on Banking Supervision, 2010. Basel III: A global regulatory framework for more resilient banks and banking systems. [pdf] Available at: < http://www.bis.org/publ/bcbs189.pdf > [Accessed 28 June 2013]. Berkowitz, E. N., 2011. Essentials of health care marketing. 3rd ed. Burlington, Massachusetts: Jones & Bartlett Learning. EACB, 2010. European Cooperative Banks in the financial and economic turmoil: First assessments. Brussels: European Association of Cooperative Banks, Research Paper. EBF, 2012. Eu banking sector. [pdf] Available at: [Accessed 28 June 2013]. Groeneveld, J.M., 2011. Morality and integrity in cooperative banking. [pdf] Available at: < http://www.unico.nl/user_files/20110607%20HG%20Morality%20and%20integrity%20in%20cooperative%20banking.pdf> [Accessed 28 June 2013]. Kitchen, P., 2004. Integrated marketing communication: A primer. London: Routledge. Kodres, L. and Narain, A., 2010. Redesigning the contours of the future financial system. [pdf] Available at: < http://www.imf.org/external/pubs/ft/spn/2010/spn1010.pdf> [Accessed 28 June 2013]. Shodhganga, 2010. Marketing strategies of the banking industry. [pdf] Available at: [Accessed 28 June 2013]. The co-operative bank, n. d. (a). The financial climate - your questions answered. [online] Available at: < http://www.co-operativebank.co.uk/business/customerservices/announcements/archiveannouncements/financial-climate-questions-answered> [Accessed 28 June 2013]. The co-operative bank, n. d. (b). Lloyds banking group announcement. [online] Available at : < http://www.co-operativebank.co.uk/business/customerservices/announcements/recentannouncements/lloyds-banking-group-announcement > [Accessed 28 June 2013]. Wyman, O., 2008. Cooperative bank: Customer champion. [pdf] Available at: < http://www.globalcube.net/clients/eacb/content/medias/publications/external_studies/CBank_Costumer_Champion.pdf> [Accessed 28 June 2013]. Read More