Marketing Spotlight on HSBC - Case Study Example

Marketing Spotlight – HSBC Case Study Introduction: In this short essay, the author presents a marketing spotlight on HSBC in the form of answers to the questions asked in the exercise. Post answering the questions, the author presents some discussion points pertaining to HSBC global branding & marketing strategy. What have been key success factors for HSBC? The primary success factor of HSBC has been their emphasis on localization of the HSBC brand in the region of operation thus making customers more comfortable to deal with them. Their strategy of localization has helped them to build local competitive advantages in the regions of their operations such that they could compete effectively with the local players of the region. A deeper insight into this strategy reveals that the efforts are directed towards becoming the consumer’s expert on cultural knowledge of the nation thus getting deep visibility into financial opportunities in the country hidden in the personality & motivation of the end consumers that is normally invisible to other outsiders (Montgomery. 2008). The localization model of HSBC is supported strongly by their global technology system called Hexagon Infrastructure having foundations laid way back in 1983 and subsequently key enhancements implemented in 1987, 1989, and 1994 (Peffers and Tuunainen. 1999). HSBC owns one of the most sophisticated & efficient banking transactions & customer service management systems of the world. As defined by Hamid and Amin et al. (2007), Internet Banking is a powerful mean of enhancing competitive advantages that should be informative, communicative & transactional as per the local customer needs. As reported by these researchers, HSBC is one of the few foreign banks that are able to compete effectively with the local banks at Malaysia & Thailand pertaining to Internet Banking. Also, this is the only bank in the world that offers secure ID tokens to the customers for Internet Banking (Goodwin. 2006). Another key success factor of HSBC is their focus on some specific customer needs through niche marketing like the example of pet insurance offering in the spotlight document. Lemon and Seiders (2007) presented another niche focus of HSBC servicing fund transfers for immigrants back into their respective countries through HSBC website. This service is specifically very popular in markets like Mexico and Philippines that are not core targets of many multinational banks. As a result of such offerings, HSBC customers perceive the bank to be socially responsible and innovative which adds to the brand equity of the organization. Sirkeci (2008) presented another niche positioning by HSBC whereby they target the needs of ethnic population of developed countries and offer customized products for them. To serve this segment, they have hired frontline staff from the target communities to ensure better customer friendliness. In nutshell the primary competitive advantages of localization competencies and ability to target niche segments has ensured the current global positioning of HSBC as such. Where is HSBC vulnerable and what should they watch for? McDonald and Chernatony (2001) reported that while the competency of localization is evident very strongly in the parent brand, the same is not reflected adequately in promotion of individual products like Meridian, Vector, Orchard, etc. Moreover, the benefits of individual products of HSBC are not communicated adequately through product branding exercise. This leads to tight correlation of individual product lines with the parent brand thus risking the HSBC brand equity in a location due to failure of a product line. This is a serious vulnerability that HSBC should watch for. Another vulnerability HSBC might face is pertaining to their sheer size and the challenges in integration of global functionalities & performance management. The global engagement of top executive team and their impact on organizational environment & performance may be key vulnerable areas of HSBC (Ready and Conger. 2007). Author’s recommendations to Senior Marketing Executives of HSBC The author recommends that HSBC should focus on developing individual brand equities of the product lines in the form of brand extensions or else developing altogether new brands. This phenomenon will result in additional brand equities of HSBC and will de-link the product branding with corporate branding thus reducing the risk of brand dilution due to product non-performance. Moreover, HSBC should focus on internal organizational environment, performance & integrity by improving Management visibility, commitment and involvement. Discussion Points HSBC is perceived to be demonstrating social responsibilities by offering tailored products for niche markets primarily targeting unprivileged classes (like ethnic marketing, positioning products for unprivileged countries, etc.) as reported by the literatures by Lemon and Seiders (2007) and Sirkeci (2008). It would be interesting to debate how this strategy of HSBC is an integrated part of their localization competency. HSBC’s global technology infrastructure is based on their age old system called Hexagon. In this context they are facing a threat of brand dilution if the market experts start pointing fingers towards the legacy of their core banking system. May be the phenomenon is just waiting for a large Internet based attack to happen. What threats HSBC faces in maintaining such an old horse for their core banking operations against competition like Citi Bank? Are they risking their branding by virtue of their Hexagon system being perceived as “age old” and vulnerable to emerging threats that may exploit its vulnerabilities? What efforts HSBC should make in communicating to their customers that their Hexagon system is as secured and efficient as any other banking system of the world? The author presents another discussion point pertaining to the way HSBC is operating globally. The bank is registered in different names in various countries and had carried out a global re-branding exercise early in this millennium of their acquired subsidiaries. Is it that the branding of “World’s Local Bank” has helped HSBC in mitigating the risk of their brand dilution due to multiple legal names of operation across the world? (Lomax and Mador.2002) Conclusion: The author of this short paper has presented the key success factors and vulnerabilities of HSBC and has presented some key discussion points about the business model & branding of HSBC to be debated in the class. Reference List: Goodwin, Bill. (2006). HSBC Business Users to get two factor security. Retrieved on 20 March 2009. Available at Home > IT Management > Risk Management. ComputerWeekly.com. Hamid, Mohamad Rizal Abdul Hamid and Amin, Hanudin et al. (2007). A Comparative Study of Internet Banking in Malaysia and Thailand. Journal of Internet Business. Issue 4. pp2-18. Lemon, Katherine Prof. and Seiders, Kathleen Prof.. (2007). Re-defining Customer – Transcending the core customer model. Carroll School of Management. Boston College. pp29-30. Lomax, Wendy and Mador, Martha. (2002). Corporate Re-branding – Learning from Experience. Kingston Business School. Occasional Paper Series No. 48. Copyrighted by Kingston University. pp4. McDonald, Malcolm H.B. and Chernatony, Leslie De et al. (2001). Corporate Marketing and Service Brands – Moving beyond the fast moving consumer goods model. European Journal of Marketing. Vol. 35. Iss3/4. pp335. Montgomery, Jolene. (2008). The Role that personality & motivation play in consumer behaviour – A Case Study on HSBC. Business Intelligence Journal. Case Study 3. pp128-133. Peffers, Ken and Tuunainen, Virpi Kristiina. (1999). Expectations and Impacts of a Global Information System: The case of a global bank from Hong Kong. IEEE Transactions on Engineering Management. 1999. pp17-37. Ready, Douglas A. and Conger, Jay A. (2007). Make your company a talent factory. Harvard Business Review. 2007. pp3-4. Sirkeci, Ibrahim. (2008). Ethnic Marketing Potential in England and Wales: New Evidence from the 2001 UK Census. Asian Journal of Marketing. Vol.2. Iss.1. pp2. End of Document Read More