THE CHARTERED INSTITUTE OF BANKERS (GH) CUSTOMER SERVICE, MARKETING AND THE COMPETITIVE ENVIRONMENT EXAMINER’S REPORT FOR OCTOBER 2019 EXAMINATION
Number of candidates 28 Number of passes 24 % of Pass 86 %
Four out of the 28 candidates who took the examination failed the exam but one got 81 percent and another got 82 percent..
The most popular question was the sub questions on research, 25 candidates answered the question and three failed to get a pass mark. Overall candidates did very well with 17 out of the 28 candidates getting over 60 percent.
Candidates who did not do well either did not answer the question asked or misread the questions.
ANSWERS
1. All marketing plans should include a situation analysis report. What is a situation analysis report and briefly discuss what does it entail? 20 marks 18 candidates answered this question but four failed to get a pass mark, one got zero because he/she did not know what a situation analysis report is. The report has four parts that need to be dealt with to arrive at good objectives for the organization.
Answer
Situation analysis or Marketing audit is the process of evaluating a company’s position in relation to its internal and external environment to identify its strengths, weaknesses and future courses of action. . This may include a brief history of the company and its current status, done through an analysis of external limitations and internal resources. The situation analysis requires a thorough study of the broad trends within the economy and society, as well as a detailed analysis of markets, consumers and competitors. Market segmentation is considered and also an understanding of the organization’s internal environment and its particular strengths and weaknesses.
SWOT analysis provides a method for organizing information to identify strategic direction. The basic principle is that any statement about an organization or its environment can be classified as a strength, weakness, opportunity or threat. An opportunity is simply any feature of the external environment which creates conditions which are advantageous to the firm in relation to a particular objective or set of objectives. By contrast, a threat is any environmental development which will present problems and may hinder the achievement of organizational objectives
Strength is a particular skill or distinct competence which the organization possesses and which will aid it in achieving its objectives. A weakness is simply any aspect of the company which may hinder the achievement of specific objectives.
The situation analysis consists of four steps or an appraisal of four major factors.; i Self Analysis: This is a self assessment of current marketing strategies and tactics, their effectiveness, the bank’s market share position and financial situation, then analysis of all existing resources e.g. premises, logistics in- formation systems and human resources. ii. Analysis of Macro Environmental Factors Pertinent to the Situation:
The analysis of the macro environment is described as PEST analysis (Political, Economic, Social and Technological) and considers economic trends, legislative developments, patterns of social and demographic change and technological developments. a) Customer profiles, needs, buying behavior, etc. b) Markets:
(i) size of the current market, market shares and market trends, growth, geographical distribution and profitability.
(ii) profiles of target market segments. c) Competition: major competitors’ strengths and weaknesses, sizes, and trends in market share, analysis of competitors’ marketing mix. d) Political/Legal Factors:, change in Governments etc. e) Technological Factors: Consumer awareness of technological changes. iii. Analysis of Micro Environmental Factors Pertinent to the Situation: a) Customer profiles, needs, buying behavior; etc. b) Markets:
i. size, growth, geographical distribution and profitability.
ii. Profiles of target market segments. iv. Analysis of Strength and weaknesses, and, Problems (threats) and Opportunities:
Key problems to overcome and key opportunities upon which to capitalize
The internal and external analysis is what is termed SWOT analysis (strengths, weaknesses, opportunities and threat) which is a valuable tool in decision making.
2. The market segmentation process involves five major activities; discuss? 20 marks 24 candidates answered this question but seven failed to get a pass mark and four got zero because they did not answer the question asked so gave the wrong answers. Some knew the five major activities but could not explain them.
Answer
The market segmentation process involves five major activities;
1. Define and analyze the market 2. Identify and describe potential segments 3. Select the segments to be served 4. Determine the product positioning strategy 5. Design and implement the marketing program.
1. Define and analyze the market 4 marks
The market must be defined narrowly enough according to characteristics that can include or exclude customers from a group and at the same time defined broadly enough to include new opportunities. The challenge here is to define the market in a way that a focused marketing strategy can be created for the selected segments. The market size and growth rate, competitive environment and other issues must be ascertained relative to the organization’s objectives once the overall market boundaries have been set.
2. Identify and describe potential segments 4 marks
The next step is to decide on what variables ( cultural, geographic, personality etc.) would be most useful for selecting members of potential market segment. These variables should be selected based on preliminary market research results. The consumers or customers should then be grouped into homogeneous groups and the attractiveness of each segment is evaluated and ranked according to their desirability. This process may require several market research approaches.
3. Select the segments to be served 4 marks
After each segment is evaluated against predetermined criteria that reflect the organization’s ability to serve the market profitably while providing customer satisfaction a final target market is selected. Here the segmentation strategy is defined.
4. Determining the product positioning strategy 4 marks
The organization after considering its competitors’ positioning strategies, the market situation and its own organizational goals must then determine what features of its products or services will best fit its chosen targets. At this point possible positioning concepts for each target market are determined according to the features most desired by customers.
5. Design and implement the marketing program 4marks At this stage the marketing mix strategy is designed and developed to communicate the positioning concept to the target market. Finally the marketing program should be implemented for each target market; the program needs to be controlled and evaluated for its effectiveness in achieving the planned goals.
3. Why is it important to meet or exceed the service quality expectations of targeted customers? 20 marks
Out of the 17 candidates who answered this question only one failed to get a pass mark and most of the candidates answered the question very well. Those who did not do well failed to talk about the intangibility and inseparability characteristics of the service and the fact that the staff needed to be knowledgeable to cross sell and also treat customers with respect and dress appropriately.
Answer
Tom Peters states that “it is only the customer who can assess the quality of service”.
If the quality of service as perceived by the customers is not met, then the bank will have difficulty in meeting its sales targets. It is important to meet or exceed the service quality expectations of targeted customers. Their expectations are formed by their past experiences, word of mouth and bank advertising.
Customers choose service providers on this basis. If the service falls below their expectations, then they lose interest in the provider. On the other hand, if the perceived service meets or exceeds their expectation, they are apt to remain at the bank and even draw potential customers to the bank. High quality of service improves the bank’s image and aids to achieve its sales targets. It is only the customer who can assess the quality of service and so the bank needs to know customer expectations in order to design effective strategies
Customers are satisfied when they get it where they want it and how they want it. When a customer comes to the bank, he may expect that he will not have to wait in the queue for more than five minutes; that the cashier will be courteous, knowledgeable, accurate and fast; and that the computer will not break down to affect the service.
It is therefore important that the bank clearly defines and communicates the services level so that the employees know what and how they must deliver, and the attracted customers also know what they will receive.
The banks need to identify the gap between the perceived quality of service, and the expected quality of service and take the relevant action to close the gap.
Because of the intangibility characteristic of bank products, the staff must be knowledgeable enough to understand customer needs and service benefits and also provide individual attention as much as possible.
When the staff is well trained and knowledgeable they will be able to cross- sell. It has been proven that the more services a customer uses at a bank, the more loyal he is to that bank.
The inseparability characteristic of bank services makes it important for employees to be friendly, respectful, considerate, trustworthy, helpful and have the customer’s best interest at heart. If service personnel are cold and rude they can undermine all the marketing work done to attract customers. If they are friendly and warm they can increase customer satisfaction and loyalty and thereby improve profitability. The employees should respond quickly and creatively to customers’ requests and problems. They must always appear busy (alert) and move about briskly. When they appear sluggish they give the bank a bad image. They must not be seen engaged in long conversation with each other especially when there are long queues in the banking hall. Customers get irritated and feel that the staff does not care.
Both subordinate and senior staff should endeavor not to keep customers waiting for long. Personal appearance counts, staff must be in appropriate clothing and must be immaculately dressed at all times.
Every employee needs to be customer-oriented and seek Customer Satisfaction. It is the only way to retain and attract customers and increase business and profitability. 4. In today’s financial markets, marketing is about having customers and not merely acquiring them; what is the advantage of retaining current customers? 20 Marks
26 candidates answered and passed this question. It was one of the best answered questions .
Answer
The advantages of retaining current customers go beyond just having one more customer.
a. The longer the customer’s tenure, the more profitable the customer. b. Current customers are the best potential new customers; that is cross- selling a new service and up- selling ( increasing the investment in the customer’s current service) are the most cost effective ways of generating new business. c. Existing customers tell their friends. Customer’s willingness to recommend is also a marker for client longevity. d. The loyalty cycle is important, in that the more business the customers do with you the more they are likely to remain customers, the more profitable they are likely to be.
5. Write short notes on the following: This was the most popular question but two people failed to get a past mark. Most candidates could not explain how the focus group worked and some said it is a group of both customers and non customers; which is not true.
a. Focus group discussion as a method of qualitative marketing research? 5 Marks
a. Focus Group and Panel Discussion
Catterall in Crimp and Wright (1995) states that “Group discussions are the most popular method of qualitative marketing research.” The number and makeup of the group depends on the makeup of the target market (age, sex .social group) can be identified by secondary research using market segmentation techniques such as MOSAIC. Any regional variation will also be taken into account when structuring the groups. The groups can be similar { homogeneous) or dissimilar { heterogeneous)) types This will depend on the specific research objectives.
Most group discussions are recorded and later transcribed. The interviewer leads the discussion using a topic guide to ensure all the areas are covered but does not put any specific questions to the group. The questions asked are open and designed to stimulate conversation.
The group members express their feelings freely. The transcribed statements are then sorted to provide a summary of the views obtained.
An example of the type of response that may be elicited by a group discussion about a credit card holding could be “ I have a credit card, I do not use it, but I like the card because it makes me feel secure.
b. Define Marketing research? 5 Marks
2 Marketing Research:
It is the objective gathering, recording and analyzing of all facts about problems relating to the transfer and sales of goods and services from producers to consumers (British Institute of Management). Put another way, marketing research is the acquisition and use of information that can be beneficial to the marketing management process. It tends to stress the collection of past data to solve problems and is conducted on a project to project basis. Marketing research includes the following specific types of research:
Market research, product research, price research, sales promotion research, and distribution research. The most important of these are product and market research
c. Differentiate between primary and secondary data? 10 Marks
Secondary Research
Secondary research studies use information that has already been gathered for another purpose but that can help define the problem, identify the trend or answer a current problem.
Many times you can either fully answer your questions or narrow the scope of your problem by reviewing the existing research.
For secondary data to be useful it must be sufficiently current and valid or relevant.
Marketing research sources include the following:
Company/bank’s Internal Records; annual reports, surveys of customers, new, current, closed accounts, company history and community organizations.
Community Sources; chamber of commerce, regional trade associations, other financial institutions and news paper offices.
Academic Sources; specialized research groups, colleges and universities, individual professors and consultants.
Published Sources; local libraries, government publications, trade publication, statistical issues and telephone books.
Primary Research
This is original information gathered specifically for the project at hand. When researchers stand at a bank and observe whether people are using the ATM or the cashiers, they are collecting primary data. One of the biggest mistakes many people make in marketing research is rushing out to get primary data before exhausting the information already available in secondary sources.
6. Corporate customers have a complete understanding of their financial requirements, however, five factors affect their buying behavior; discuss? 20 marks
Five failed this question and even though some were able to list the five factors that affect their buying behavior they could not explain the factors adequately.
Answer
Corporate organizations buying behavior is influenced by five factors; namely: a) Environmental factors, (interest rates, trends in the economy, inflation, competition. b) Interpersonal or group factors: e.g. internal meetings to discuss bank alternatives and off-the-job interaction with bank officers. c) Individual factors (e.g. an individual’s desire to enhance his status through the buying decision, kick backs and his desire to do business with a prestigious bank) d) Organizational (formal) factors:- e.g. company policy regarding manage- ment of debt, size, procedures relating to buying decisions, the makeup of the decision-making unit. e) The level of risk in the purchase; i.e. usually a new purchase is riskier and will involve more people in the purchase decision. The size of the purchase is important.
7. The development of an effective communication program involves the integration of several components of the promotion mix; discuss? 20 marks Most candidates just listed the elements of the promotion mix and did not indicate that the elements can be blended in different ways to achieve the organization’s purpose.
Answer The term integrated marketing Communications ( IMC) is used to cover all types of marketing activities designed to stimulate demand. These demand creating activities are in turn referred to as the communication mix. The success of this mix is its ability to deliver a core message to the target market. The term mix implies that the different elements can be blended in different ways to achieve the organization’s purpose.
The IMC must move potential customers towards the state of conviction and actual use; it should also create a unified image and support relationship building with customers.
The organization should set communication goals: for example, build brand identity and encourage stronger preference, ( this would strengthen relationships competitively.)
For the communication process to be effective it must integrate several components of the promotion mix; classified typically as:
Advertising; which is any form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor, e.g. radio television, cinema, and newspapers and magazines. It is also the public communication of messages to select audiences to inform and influence them. The advertiser pays mostly a public medium ( News paper, magazine) to put forward its message. Advertising gives potential customers the comfort that they are making the right decision; it is easier to buy from a well known company than to take a chance on an unknown entity.
Sales promotion; Activities which provide predominately short term stimulation to purchase or sell through the use of incentives, e.g. coupons, rebates, gifts and contests.
Sales promotion activities are intended to have an immediate impact on consumer buying behavior. For example, some local banks giving out small appliances to new customers and those who introduce them. Fee free checking for all current accounts opened at a certain point in time.
Personal selling or Sales force Activity; is the process of encouraging and persuading prospects to purchase a good or service, or to respond to any idea presented orally, e.g. telemarketing, sales presentations and meetings. This is intended to add value to customers and build relationships. Publicity or public relations; this is non-personal stimulation of demand through the presentation of commercially significant news about the organization or its service in the media, which is not paid for., e.g. reports, media publications and speeches. This would promote a favorable inclination towards the organization and its products or services while encouraging some action, such as recommending your service.