Marketing Environment of Union National Bank - Case Study Example

Report on Union National Bank Introduction Union national Bank is one of the leading local banks in the UAE or United Arab Emirates. It has its headquarters at Abu Dhabi and was established back in 1982 primarily as a public joint stock company. The bank offers a wide variety of customized products and tailor made services which are aimed at meeting the heightened needs of its customers which range from basic personal requirements to highly complex needs of the corporate society. Union national bank is the only bank in the region that is jointly owned by Dubai and Abu Dhabi governments. The bank’s electronic channels of delivery are well supported by extensive and well-coordinated banking centers that are equally spread across the entire emirates to convenience banking services to the esteemed customers. It has around 56 branches which are spread across the Unites Arab Emirates. Union National Bank has expanded outside the United Arab Emirates. It has branches in Egypt and a takes a good share of Egyptian Banking sector. UNB is also present in China, Qatar and Kuwait and plans are underway to establish branches in other countries in Middle East that will boost the shareholders value. Marketing Environment Marketing environment is broadly defined as anything that surrounds a given company’s marketing function and has the power to impinge on it. The marketing environment is comprised of both micro and macro factors. The macro environment basically describes the elements that are beyond whose effect on the organization are not imminent while the micro environment describes the elements that impinge an organization directly (Kaplan, 2006). The micro environment includes individuals and other organizations that pose a threat and affects the activity of the bank either directly or even indirectly. Some of the key micro environment factors that affects the Union National Bank includes:- Customers – due to advancement in technology and the changing customer needs the banking industry is experiencing a transition caused by the rapid changes in the political, economic and social environment are evident in the current world and there had been known to influence the transformation of competition in the market arena. Union National Bank should be continuously monitoring these changes and be concerned about the changing customer requirements to be able to comfortably satisfy their heightened needs. Intermediaries:- intermediaries usually provides a very valuable link between a company and both its customers and authorized agents. Stake holders: - Union National Bank has subsidiaries to help it reach its customers better. One of the subsidiaries is Union Brokerage Company, which is among the oldest brokerage firms in Unites Arab Emirates. AI Wifaq Finance Company is another Union National Bank Subsidiary which offers financial services and products which are compliant to Sharia’a to corporate clients and individual small business entities. Other stakeholders include government regulatory agencies, employees, pressure groups and local community (unb. 2011). These stakeholders can affect the market environment in one way or another. Suppliers:- these includes people who provide an organization with services and goods for which it transforms into value added goods for customers. Suppliers are usually crucial to the marketing success of any organization including the banking sector. Change in population and increasing rate of oil prices in UAE are among the macro environment factors that will eventually affect operation of Union National Bank and the relationship with its suppliers, intermediaries and customers. Strategic Direction Union National Bank’s vision is to be a key player in the banking sector in the United Arab Emirates (unb, 2011). However, the market demand and technological advances which has resulted in advanced means of communication that has turned the world into a global village requires companies to expand into new product markets and geographical locations (Kaplan, 2006). The ability to focus resources around one or a few points of strategic difference in order to truly leverage them laterally is what creates meaningful competitive advantages. Segmentation Product market segmentation is one of the best marketing strategy which usually involves dividing a wide target market into segments or subsets of customers with common demands and requirements or preferences. In today’s market, identifying and targeting a unique market always pauses a great challenge to many organizations. UNB has segmented services that are unique and reasonably stable. The market segmentation usually lead to more accurate and highly effective communication of benefits in relation to customer preferences and needs and also helps in identifying growth opportunities for the bank (unb, 2011). Union National bank has indeed segmented its market in terms of demography, social class, geographical location and cultural and religious values in order to reach out to a large customer base. Through the demographic segmentation, the bank offers different products to fixed income earners and variable income earners. The UNB’s branches are also located in various parts of UAE with some being located near rural areas. This constitutes to geographical segmentation. Current product description Union National Bank continued to raise the benchmark during 2012 financial year when it proudly received two coveted product awards. These awards were: The Best Savings Account Award for its “Smart Account” and Best New Small and Medium Enterprise Product Award for the “Union National Bank Medic Loan” which was presented at the 2012 Banker Middle East Product Awards. Smart account is a unique new package which comes with an insurance cover aimed at helping the customers to secure an income in cases of permanent disability, death or involuntary loss of employment. UNB partners with Oman insurance company in providing the insurance cover for smart account. Current Target Market Though there has been a significant increase in private banking, capital market and wealth management, Union National Bank is currently targeting mostly the retail and corporate banking sector. The bank has continuously focused on growth and development of the core business which is proved by the robust increase in income and profits. The bank has also experienced a growth in customer deposits and a rise in corporate clients. The Bank is also paying attention on a number of new opportunities which includes private banking, Islamic finance and overseas expansion especially in China Egypt and Qatar. These are seen as great opportunities for diversifying income streams, customer satisfaction and are only expected to add to the bottom-line over the medium term. Description of the Marketing Opportunity Marketing opportunities depends on a number of issues which are determined by the marketing mix. These issues include: the products or services the company is dealing with; how much it is charging for it; how it is delivered to the consumers or market and how it is going to inform the customers about the services and products. The bond market is fairing on well and Union bank intent to tap into the bond market if it considers the condition of the market to be favorable. The 7Ps marketing strategy presents one of the great opportunities that will enable Union National Bank to take proper charge of its marketing efforts and above all beat the competition with ease (Andreini, 2006). The 7Ps stands for; Product, price, promotion, place, packaging, positioning, and finally People. Since the market, customers and products usually experience rapid changes in this era, every organization must review these seven Ps continuously to ensure there are still in the right path and their customers are satisfied while at the same time they maintain high returns on investment. Proposed Product and/or Service Due to the great capabilities of the online marketing, internet engages the online customers in long term interactive relationships, product policies stands to leap great benefits which will eventually lead to development of better products. Union bank has continuously ensures that its services and products are what customers currently need. For instance, the private banking offers a great investment opportunity, UNB Internet Card allow customers to shop online with confidence while the UNB platinum cards has the lowest interest rate and highest credit access. These are some of the products that are in high demand in the current market. The new products or services introduced to the market should be tailored to meet the consumer needs and preferences and also give the organization a competitive advantage over its rivals. Proposed Pricing Technological changes are inevitable and this has left many people aligned more to the online business. The internet and ecommerce in general offers a very great advantage to the online shoppers or customers in that it allows them to compare prices in an active or real-time and thus gain more flexibility and freedom of choice since no one pleads with them to select on product over another (Goi, 2009). To respond to this, the Union National Bank is investing more on online banking to enable its customers to access their savings around the clock from wherever they are. This is made possible by the uninet online banking service. UNB has also developed a habit of continually examining and reviewing the prices of the services and products together with the interest rates to make sure they are still appropriate to the realities of the current market. Sometimes it is necessary to lower your prices in order to avoid losing loyal customers while at time, the prices needs to be raised to prevent the company from incurring loss. Furthermore, there are times when the bank needs to change the terms and conditions and sometimes spread the prices or offer discounts so as to attract more customer s but in so doing , it must ensure it remains competitive to be able to thrive and survive in the fast changing market. Proposed Distribution Process UNB understands the customers’ personal and professional needs as a well qualified team of staff l and has a range of products including different types of accounts, credit cards, deposits and investment and savings products tailored to meet the individual customer specific needs. Most of the services offered by the Union National Bank can be accessed through the online banking services. The credit and chip cards can be used around the clock. The process of issuing goods and services and the behavior of those who deliver it to the customers is crucial to clients’ satisfaction. This is because clients are not only interested in the end result but also in the process involved in delivery of goods and services. Issues like waiting time and delivery time are crucial to maintaining a customer base with loyal customers. Proposed Promotion Mix Union National Bank’s Promotion is not designed simply to satisfy only the regular customers or the prospective services or product buyers but rather it is designed for everyone. Both above the line and below the line strategies are employed. Some elements of the promotion mix though are designed to target customers who have no idea about Union National Bank and its products or service while others are aimed at the veteran customers and their purpose is to inform them about the new products or services (Andreini, 2006). Union National bank uses online ads and social media marketing strategies to reach the rich online market, and TV ads, newspapers and magazines to channel its mass adverts. The online advertising differentiates itself from the other advertising media through the use of interactive and multimedia features. Thus, UNB utilizes a variety of channels to get across their message to the general public, ranging from conventional advertising in newspapers to sponsoring programs for worthy causes. All UNB’s communications channels consistently maintain the corporate ethic in order to strengthen the brand. Proposed Physical Environment Element Physical environment is basically concerned about the location from which the product or service is being delivered from. The Union Bank products and services are available in all its branches that are distributed all over the United Arabs Emirate. The bank also extends its services to market abroad such as Egypt, China, Kuwait and Qatar. In order to fit the online digital context Place or physical environment is redefined as anything that is necessary and that is usually done to ensure the transaction process is performed smoothly (Goi, 2009). This definition adds the element of a smooth process of purchasing of goods and services as a major feature of place within the online marketing mix. Proposed Process Element Process is one of the key elements in services marketing mix. Process is concerned about the system that is used to deliver the services or the products efficiently. UNB ensure smooth process by sending out credit cards automatically when its customers’ old ones expire (Goi, 2009). This helps in fostering customer’s loyalty and satisfaction. Basically, process means everybody knows what to do, when to do it and most importantly how to do it. Proposed People Element People are the most important entity in service provision. The right people while recruited as staff help the organization gain a competitive advantage while the quality of service provide is driven by customer judgment. People include the service personnel and the clients. The service personnel represent the company’s image and can increase customer’s loyalty and satisfaction. Customers’ perception of the quality of products and services can also be influenced by other customers. The process of issuing goods and services and the behavior of those who deliver it to the customers is crucial to clients’ satisfaction. This is because clients are not only interested in the end result but also in the process involved in delivery of goods and services. Issues like waiting time and delivery time are crucial to maintaining a customer base with loyal customers. References Andreini D. (2006). The Evolution of the Theory and Practice of Marketing in Light of Information Technology. Contemporary Research in E-Marketing, Vol. 2, pp. 168-215. Domm, D. (2001). Strategic vision: Sustaining employee commitment. Business Strategy Review, 12(4), 39–48. Eisner, M. (1998). Work in progress. New York: Random House. Goi C. L. (2009). A review of Marketing Mix: 4Ps or More? International Journal of Marketing Studies,1 (1): 2-14. Kaplan, R., & Norton, D. (2006). Alignment: Using the Balanced Scorecard to create corporate synergies. Boston: Harvard School Press. UNB about us (2011). http://www.unb.co.ae/english/index.aspx : Accessed 08/1/2013 Read More