VANGUARD VO - Essay Example

Marketing at the Vanguard Group Marketing at the Vanguard Group What does the Vanguard BRAND stand for? According to the case, the Vanguard brand stands for the following: Customer owned- In this case, it is referred to as “mutual fund” which implies that it is client owned. Quelch and Knoop (2004) note the shareholders who invest their funds in the company own also Vangurd Group. This is also evident from the CEO and chairman of the company’s comments that the success of the company has mainly been attributed to having the organization’s clients/owners as the single focal point.

Low cost-In this case, the company ensures that customers are not overcharged in terms of interest rates charged on mutual funds. For instance, Quelch and Knoop (2004) note that Vanguard Group sells its mutual funds to customers based on low interest rates. This is the factor that gives it competitive advantage over other firms in the industry. Long Terms investment-The main reason many people surveyed preferred Vanguard Group was the fact that it offers long-term investment to its clients. The brand also implies that it is redemption-averse, and very much profitable to redeem.

All this are in line with the company’s missions, vision, guiding principles, and the beliefs of its founders. 2. Analytically describe the characteristics and behaviors of Vanguards traditional target market. Quelch and Knoop (2004, p 4), note that the traditional target market of Vanguard were those customers who are “substantial and cost-conscious investors with long term horizon”. These were mainly customers who sought value in anything they bought from Vanguard Group. Vanguard Group also targeted institutional service customers for both defined-benefits management and contribution. 3. Analytically describe the characteristics and behaviors for those whom Vanguard has not targeted.

According to Quelch and Knoop (2004), Vanguard Group Company did not target active customers. This was mainly because short-term investors would mess up the market at the expense of the company’s long-term investors. This is evident from Bagle’s comments when he issued a warning to institutional investors who redeemed £25 million from the company’s funds purchased nine months before. Similarly, these kinds of customers were the ones who were turned away by Vanguard Group as noted by Quelch and Knoop (2004). 4. Provide an executive-level assessment on the distinctions between these two segments.

The two markets are mainly distinct from each other with regard to their motive, consciousness and time duration. For instance, those customers who were targeted by Vanguard are those who proved to be ready to invest substantial amounts, are cost-conscious and are long-term investors. The fact that they are large in number and conscious in terms of cost implies that they are capable of bringing a lot of profits to the company in the long run. These kinds of customers also make the management more conscious in the manner in which they operate.

This is so because they are very much aware that the customers they are dealing with look for value in anything that they buy from the company. This is in contrast to the customers who were turned away by Vanguard Group. This is due to the fact that, despite being active, it would be difficult for the company to establish if they could remain loyal to the company. Furthermore, they had the potential of messing up the market at the expense of long-term investors (Quelch and Knoop, 2004). References Quelch, J & Knoop, C. (2004). Marketing at the Vanguard Group.

Boston: Harvard Business School, 20 July, 9-504-001.