Strategic Marketing at Wachovia Corporation and Organization Control - Assignment Example

Damelin Port Elizabeth Marketing 3A SECTION A (answers) A) The application of the "Next Logical Product" approach has been well constituted by Wachovia Corporationa through serving the micro segments of its household market. The company has segmented its operations based on consumer needs as is evident by its check cards that are based on convenience and demographics (Wachovia visa check card and Campus card) and also by providing customer satisfaction by offering rewards on points earned in the Wachovia Possibilities Reward 1 programme. An effective approach of "Next Logical Product" is also reflected in Wachovia's mortgage/lending and insurance products. Based on buyer behaviour and product ownership, lending includes loans based on home equity, mortgage equity loans, educational loans, secured loans for necessities of life and loans for vehicles. Insurance product offering are based on life, home and vehicles needs of a demographic, the home loan includes specially tailored products for certain category segments based on ownership patterns ranging from home owners to tenants and other liability protection as needed in that industry. Wachovia's auto loans segment has introduced ConceirgeClaim 2 service that guarantees auto repairs with 24 x 7 customer support. Health insurance include the standard long term health insurance for all micro segments, and introduces a more specialized Wachovia Health Advantage and Health Saving account 3 that work as retirement saving account and are tax advantaged for those looking for deeper involvement in their health insurance plan. Wachovia sets high standards for customer satisfaction as it designs fiscal category products designed on segments based upon demographic, psychological and behavioural profiles and its multiple needs. Wachovia's investment brokerage accounts provide for self-directed accounts and for those who need a constant financial advisor through their investments. The retirement planning products based on 20 - 70+ year demographics have specific programmes relevant to a certain age groups with updating schemes as certain class of consumers evolves through the age groups. Wachovia's planning guides 4 help establish future product offerings to current and potential customers by providing educational resources prompting smart fiscal decision making. The customers make informed purchases based on Wachovia's planning guide and this fosters trust and higher customer satisfaction since Wachovia's products are designed based on those needs. A cyclical loop of recurring business with target markets is established. Wachovia provides wealth management services and acting as an executor for the clients that have achieved a certain financial success and need more customized plans and deeper involvement from Wachovia. Services include financial and estate planning, investment and asset management as well as insurance and trust and philanthropic services. These functions are specialized and customized, hence, those that avail of these services get one of its kind deal based on their needs. The effective utilization of the "Next Logical Product" approach for achieving customer satisfaction and establishing relationship by Wachovia is reflected in its financial products. B) Wachovia segments its household market based on demographics, psychographics and behavioural classification. For personal finance, Wachovia offers a band of products based on psychographic needs ranging from those in campus to retirees in banking, insurance, investments, lending and retirement needs. In insurance Wachovia provides for life with standard across demographics and specialized tax saving health plans, home and auto needs segregate products based on ownership patterns (owners, tenants etc), financial rate preferences (fixed rate, 100% financing) and special needs based on the lifestyle of a target market. In banking, besides providing a free checking account, Wachovia also provides a free student checking account, Access Fifty Checking and Crown Classic Banking for those aged over 50, and also accounts based on different interest yields 5. Wachovia offers credit cards based on security (identity and overdraft protection), personal attention and customized rates and waived fees 6. Gift and pre-paid cards offerings include Wachovia pre-paid card for teenagers where parents fixate the amount, a gift card where the recipient chooses the gift programme from the amount received and secured way of sending money to Spain, Latin America, Mexico and the Caribbean (Visa Buxx Card, Wachovia Gift Card and Wachovia Dinero Directo Card 7 respectively). Wachovia also provides investment opportunities in stocks, bonds, mutual funds, options, annuities and Unit investment trust. A self-directed brokerage account is available and so are the services of a Wachovia securities financial advisor. Secured personal loans for everyone from Wachovia can pay for a wedding, take control of credit card debt, go on vacation or meet the necessities of life 8. For home loans there are products for first time home-buyers, for those refinancing mortgage and popular loans for those who need adjustable rate mortgage, 100% financing and fixed rates. Retirement planning from Wachovia for the 20 - 70 + yr old with specific financial advice for a particular demographic and on emergency funds, for those changing their jobs who are in their 30's and 40's to those ready to leave behind a legacy or ready for withdrawal in their 70's. Wealth management services are available in the domains of portfolio management, asset management accounts, debt management and custom banking solutions for high net worth individuals. Estate planning feature helps in the wealth transfer plan by creating and updating will based on changing life style patterns, leaving it to heirs and choosing an executor or a personal representative who is knowledgeable and brings in security and peace of mind 9. For Trust and Philanthropic services, Wachovia is the national leader in managing private foundation assets. These services include Personal trust services based on specific goals, charitable services that help achieve philanthropic objectives and benefits to the community and acting as advocates to bring the philanthropic objectives to life 10. C) Wachovia can utilize its relationship as a basis for stronger relationship as economic content rises by evolving the nature of the relationship to meet the changing needs and the interest of its customers. The relationship is to be established on a strong foundation where besides being a regular financial services company, Wachovia acts as a mentor and brings financial literacy and education to its customers. Planning guides on taxes, financial and college planning, retirement funds, teaching investment basics and money management help establish trust and facilitate more business in domains once the customers get educated about them. From hereon the relationship can become more ancillary whereby Wachovia acts on behalf of the customers and provide them with information and products that can be customized according to their needs and requirements. Products like gift cards and secured loans are outcomes of such an ancillary relationship where customers select financial products/programmes on their needs and the rest is taken care of by Wachovia, such a relationship apart from trust also brings in convenience and evolves the dynamic of the relationship such that Wachovia becomes the one stop shop for all financial needs brining peace of mind and security to its customers. Wachovia can further strengthen its relationship as customers become financial savvy and Wachovia evolves from mentorship to an advisory role. More complex products can be added to the portfolio and specialized services based on high volume and deep investments are introduced, given the high financial literacy of the customers, hereon, Wachovia provides expertise for those who ask and assists in decision making on all fiscal facets. The relationship becomes a bond as economic content rises and the company becomes an executor or the personal representative of the customers, here the relationship changes from the company being a service provider to the customer to becoming the executor of all of customers financial will. The cycle then repeats itself where the four phases of mentoring, ancillary service, advisor and executor act in a loop. The cycle continues with new customers entering the fold and with existing customers the complexity of the cycle increases thought the process of the loop remains the same. Wachovia can use its relationships with its customers based on economic content in the following way. New relationships can be strengthen by following the mentor to executor paradigm and old relationships can be strengthen by increasing the complexity and volume of the economic content by introducing new cycles that reflect the increased status of old customers to participate in Wachovia products and processes. D) Successfully managing relationships is a two way process. The role of reward for loyalty, supporting systems and communications cannot be overemphasized. Communication is primarily based on systems, for it is the system support that decides the type and effectiveness of communication. Support system therefore plays an important role since it establishes the channels and medium through which two participants can enter into a relationship and communicate with one another to establish the dynamics of a relationship. Support systems should have clarity and consistency to prevent communicated messages from wavering in its intent in terms of its content and to keep misrepresentation in communication at the minimum. Communication also facilitates fast and prompt decision making and rectification of errors as assumptions are challenged and deviation from the relationship core are noticed immediately, communication in a relationship clearly states the needs of each participant explicitly and thus they are met. Since humans are emotional being the perception of reward and punishment affects their behaviour, being rewarded for loyalty helps people remain in a relationship. Since humans are goal and pleasure seeking, those activities that get rewarded i.e. bring pleasure to the participant remain and the others get abandoned. A clearly defined reward system based on what is expected from the participant is a powerful tool in maintaining any relationship, higher the loyalty, higher the expected reward, this methodology sets off any monotony and keeps up adding more anticipation for pleasure to be received from higher rewards and thus the relationship dynamic remains stable. The frequency and the type of communication plays an important role too, higher the frequency of communication between the participants, stronger the bond and the more clearly the self-interests of both the participants are communicated effectively and defined the more effective managing the relationship becomes. The support system must adapt to the kind of communication taking place. Support systems should be both standard and adaptable. Standard support systems are the basic foundational principles that make communication possible through the sensory process. Adaptable support systems are customized, given a particular relationship and change or evolve with the passage of time as the communication in a relationship becomes more refined, effective and efficient. Precise and regular communication supported by ever adaptable and effective support systems with rewards based on loyalty, where the perceived pleasure is precisely known based loyalty that is rewarded periodically makes the relationship manageable. E) Nothing derails an organization from a definitive aim to a quagmire of purposeless activity more than uncontrollable complex relationships, organizations can end complex relationships by following the principles listed below. 1. What's in it for me Self interest governs why organizations and consumers deal with one another. If this self-interest is clearly defined, the relationship never becomes complex because the core reason for the transaction remains defined and all other activities center around this self interest, which becomes the guiding principle that an organization always keeps in view while entering into and managing relationships with any another. 2. Define needs If an organization can clearly define the receivable benefits it wishes from a particular relationship and to what extent it intends to exchange its resources to obtain that benefit, relationship complexity is eroded since the employment of resources and the time lag between action and receiving benefits is minimized as the organization clearly defines what it is willing to exchange in terms of what is have to get what it wants. This clarity in approach removes complexity from a relationship. 3. Simplify the system The more the number of steps that need to be followed to achieve an objective; the more complex a relationship becomes. Organizations should simplify the system first by promoting those systems that help achieves its goals and to keep other support functions in the background, taking care that the steps designed in the process for achieving objective does not hamper or delay in achieving the goal. 4. Checks and balances Periodical feedback and evaluation ensure that the organizational relationships are headed in the right direction and senseless activities that do not strengthen a relationship are discarded. Checks and balances also ensure that the organization is healthy and operates from strength in a relationship. Periodical review takes care of issues as they occur and this in itself simplifies the entire process and avoids it getting complex. 5. Star over pyramid Choosing a star shaped organizational structure with a centralized command system is more effective than the pyramid shaped hierarchical systems, as there is more empowerment to deal with relationship challenges and immediately if they occur. Pyramid system of hierarchy is time consuming and makes the relationships complex with each additional layer. Star system of centralized command is accessible to anyone and quick in execution, simplifying how relationships function. SECTION B (Answers) 1) 'Richer sounds' soft approach to organization control has many advantages, primarily it re-directs business focus from product centric to people centric since "great vision without great people is irrelevant" 11. Employee motivation is high due to direct participation in the operational process which leads to low attrition rates and higher productivity. Timely inputs from members on the field facilitates faster adaptability to changing trends and business cycles, enabling an organization to book profit by executing plans based on stated rather than assumed needs of the target market. Hiring and promoting from within ensures an effective reward system that prompts employees for greater outputs and assured performance based incentives. "When you have disciplined people, you don't need hierarchy" 12, the soft approach brings in efficiency by doing away with bureaucracy that debilitates an organization from optimum functionality. The disadvantages of the 'soft' approach are many. An organization can lose focus of the bottom line i.e. making profits in its bid to maintaining employee bonhomie. Facts, analyses from assembled data and number crunching are replaced by employee EQ and bravado which is generally biased rather than objective. Moreover employees tend to form cliques affecting the operational process whereby decisions made are based on factors like likeability and shared beliefs amongst people rather than on domain and functional expertise. The company culture may also be comprised and severely affected especially if its core domain is not people but process centric, this may deviate an organization from its mission or the foundation on which it was established. Soft approach is never predictable nor it can be forecasted accurately, it a thoughtful assumption but an assumption nevertheless that is always a risky option for an organization. 2) Some of the 'hard' monitoring and control mechanisms that can remedy and balance the soft approach are. Establish behavioural standards and protocols: Bring in clarity on the role of employees and their objectives that need to be fulfilled for any retail activity to be considered productive and beneficial when dealing with customers. Establish protocols on acceptable and unacceptable behaviours with the employees possessing the freedom to do their own thing within the defined protocols and directed towards a defined objective. Feedback and evaluation process: Create effective feedback and evaluation processes that can be cross checked with as needed, so that amends can be made timely and performance can be measured against a standard with feedbacks on how to achieve those standards. A corrective system will ensure that assumptions are made to the minimum and 'if in doubt check it out' organizational philosophy backed by remedial alternatives providing mechanism shall keep wasted time, energy and resources in check. Training and development: Employees are to be trained and developed for their tasks before they start functioning, this ensures that they will follow the task as taught to them since this shall be the most optimum way of working, development programmes shall help them to perform on the job periodically if they do not meet organizational standards and objectives. "The ability to get and keep enough of the right people" 13 ensures organizational success and this can be achieved by a training and development programme that facilitates learning in the employees for their tasks. Systems: A retail system linked to all systems of an organization must be maintained. Awareness of the bigger picture while performing daily tasks must be re-enforced and maintained so that the retail activities do not hamper the methodology and mechanism of other branches of the organization. A strong system can support ever changing scenario of the retail segment. Chain of command: Responsibility and accountability needs to be established. All employees must know what they are responsible and accountable for including those they interact with. Nothing must be left vague where assumptions are made on what needs to be done and by whom. This must be achieved by building a culture and not by orders and memos. 3) The following control mechanism of retail relationship management can be utilized to Richer consulting operations. Training and development: Since employees of Richer consulting operations of the company have been working in store management since living school it becomes easier for them to work within the company culture and adapt to assume the mantle of new responsibilities and tasks that they will have to perform in a consultancy by undergoing proper training and development. The evolution of these employees to their new roles can be executed seamlessly. Feedback and evaluation process: The instant feedback and evaluation process can be utilized for frequent checks on where the operations are headed. Generally in the consultation industry, periodical checks are done at the end of the cycle; this is to be changed by bringing in regular checks on operations and providing instant feedback and corrective measures upon asking at any given time. Empowerment culture: A culture of responsibility and accountability can be established where each one knows their role in completing a task rather than waiting for the system to assign and order tasks. A sense of empowerment to be established where being proactive is rewarded and those who assume leadership roles are commended as they happen in the retail sector. System Design: Richer consulting must follow the effective system from retail relationship management where everyone is aware of how their individual actions affect the entire system of operations especially when they form alliances with other organizations and enter into a contract with them. Behavioural standards and protocols: The best tools to be adopted from retail relationship management is the control over behaviour when doing business and knowledge of the protocols and standards that need to be followed irrespective of the current approach taken. Creativity within the rules leads to a strong organization. 4) Balanced Scorecard: South African Airways Mission: "An African Airline with global reach 14." Vision: "To deliver sustainable profits and to grow out market share through world class services to our customers internally and externally 15." Theme: Operating Efficiency Objectives Measures Targets Initiatives Financial Long term sustainability Future profitability through targeting cost cutting Pre-tax profitability equal to 7.5% of sales in 12 - 18 months Growing business opportunities for SSA Cargo and SAA Technical Customer Partnership with other airlines to bring customer benefits Make it easier for passengers to connect with other destinations 842 destinations, 40 cities in 30 countries, carrying more than 7 million passengers Star Alliance Gold Members Most flexible round the world fares Internal Complying to stringent international safety and security standards Safety and quality of operation management and control systems Delivery of two long haul A340 -600s and three A319-100 twin jet short-haul aircraft Attained IOSA accreditation Learning Consolidation of data by enterprise data warehousing Cost saving by reducing licensing and support cost Increasing revenue by 4% through cost saving Choosing Teradata, a division of NCR Corporation as its platform Works Cited 1. Wachovia Corporation (2008). Wachovia Debit Cards. Available from: http://www.wachovia.com/personal/page/0,,11_482,00.html [Accessed 2 May 2008] 2. Wachovia Corporation (2008). Wachovia Auto Insurance. Available from: http://www.wachovia.com/personal/page/0,,326_500,00.html [Accessed 2 May 2008] 3. Wachovia Corporation (2008). Health and Health Related Insurance. Available from: http://www.wachovia.com/personal/page/0,,326_502,00.html [Accessed 2 May 2008] 4. Wachovia Corporation (2008). Wachovia Planning Guides. Available from: http://www.wachovia.com/personal/page/0,,505,00.html [Accessed 2 May 2008] 5. Wachovia Corporation (2008). Wachovia Checking Accounts. Available from: http://www.wachovia.com/personal/page/0,,11_480,00.html [Accessed 2 May 2008] 6. Wachovia Corporation (2008). Wachovia Credit Cards. Available from: http://www.wachovia.com/personal/page/0,,11_10104,00.html [Accessed 2 May 2008] 7. Wachovia Corporation (2008). Wachovia Gift and Prepaid Cards. Available from: http://www.wachovia.com/personal/page/0,,11_11995,00.html [Accessed 2 May 2008] 8. Wachovia Corporation (2008). Wachovia Secured Personal Loans. Available from: http://www.wachovia.com/personal/page/0,,325_495,00.html [Accessed 2 May 2008] 9. Wachovia Corporation (2008). Wachovia Wealth Management. Available from: http://www.wachovia.com/wealth/page/0,,31_36,00.html [Accessed 2 May 2008] 10. Wachovia Corporation (2008). Wachovia Wealth Management. Available from: http://www.wachovia.com/wealth/page/0,,31_37,00.html [Accessed 2 May 2008] 11. Collins, Jim (2001) First WhoThen What. Good To Great. P.42. New York: Harper Collins Publishers Inc. 12. Collins, Jim (2001) Good Is The Enemy Of Great. Good To Great. P.13. New York: Harper Collins Publishers Inc. 13. Collins, Jim (2001) First WhoThen What. Good To Great. P.54. New York: Harper Collins Publishers Inc. 14. South African Airways (2007). SAA. Available from: http://ww3.flysaa.com/Utility_Navigation/About/index.html [Accessed 2 May 2008] 15. South African Airways (2007). SAA. Available from: http://ww3.flysaa.com/Utility_Navigation/About/index.html [Accessed 2 May 2008] Read More