Discuss about the Marketing of Public Bank Berhad.
Marketing is one of the significant parts of the business process that builds relationship between the organisation, product and the customers. The process of marketing needs the understanding of the value of the needs of each stakeholder involved. Marketing as considered by many is the heart of the success of a business. Business in every industry has to work on their marketing strategy for attracting greater number of customers. The overall business operation is dependable and determined by the marketing strategy integrated in a business organisation. The purpose of integrating marketing in a business is to spread the word out. In other words, the importance of marketing lies in communicating the products and services offered by a business organisation to the customers. Lack of effective marketing strategy may become the determinant in sales crash even with great product line. Promotion of the products and service offered by an organisation is often confused with marketing. However, advertising, public relation, promotion and sales in only a part of the overall marketing process. The overall process of marketing in a business involves market analysis, selecting target customers and promoting and value proposition of the products. This can also include the evaluation that is again a type of market and business analysis that identifies the efficiency of the marketing strategy implemented in the business. This report identifies the marketing of the Public Bank Berhad situated in Malaysia. Moreover, this report specifically focuses on the segment of corporate banking of the selected organisation.
Business banking, popularly known as Corporate banking as defined by Grubel (2014) is the unit under a banking service that deals with the corporate customers. The service provided in corporate banking is limited to the business organisation. Banking organisations under corporate banking serves a diversified range of clients that ranges from small to medium local business to large business organisations with billions of sales. The products and services offered under corporate banking also differ from personal banking. Profit generated through corporate banking is considered as the of primary importance and the figures reflected in the corporate banking is much greater than that of personal banking, which makes it important for the banking organisations to focus on the marketing of its corporate unit.
The organisation selected for the report is Public bank Berhad, headquartered in Kuala Lumpur of Malaysia. The organisation offers financial services to both within the boundaries of Malaysia and Asia Pacific as well. Public Bank Berhad was established by Teh Hing Piow in the year 1966 and got listed in Malaysian Stock Exchange in 1967. This is the largest operating organisation in the banking sector of Malaysia and one of the largest banks in the Southeast Asia. The organisation is currently offering a diversified products and services to its target population that includes personal banking, commercial or corporate banking, Islamic banking, investment banking, share banking, trustee services, nominee services, sales and management of unit trust funds and general insurance products. The major competitors of the organisation within the boundaries of Malaysia are Maybank, CIMB, RHB Bank and HSBC bank Malaysia.
The corporate banking unit of Public Bank Berhad offers its customers a wide range benefits in their products and services that is different from personal banking scheme. Some of the attractive banking facilities provided to its customers is the online security to their customers. Mission set by the organisation is to hold the top position of being efficient, profitable and respected premier financial organisation of Malaysia. The process of achieving the position as considered by the organisation is by providing high quality products and services to their customers through innovation.
This section of the report is considered as one of the significant step in the marketing plan as it helps the organisation identifying and targeting the potential customers of their products and services (Hollensen, 2015). The positioning part helps in identifying the process of promoting the product to gain maximum customer attraction.
Figure 1: STP
Public Bank Berhad in their corporate banking focuses on the domestic market, which is why this part will be focusing on the market segmentation within the boundaries of Malaysia. Some of the potential segments that can be identified for the organisation are geographic region, population segment and size of the business (Gbadamosi, 2013).
The existing small to medium enterprises and the large organisations that are the potential customers for the chosen bank are mainly urban oriented that limits the operations of the bank within the urban boundaries.
The corporate unit of Public Bank Berhad focuses on the business organisation and extend their products and services to the same that limits the customer segmentation to both the existing and star-up business organisation.
Lastly, the wide range of the products and services offered by the company enables them to attract the complete range of potential customer towards their business. They offer different products and services to various customers depending on the business size and their need.
The segmentation of the market enables the organisation in targeting the potential customers in within the market. The corporate banking unit of the company targets the customer segment according to the size of the organisation and the financial assistance they need to grow in the industry (Septiani, Dewi & Siregar, 2013). Depending on the market segmentation, the potential customers can be divided into a number of target groups.
New Entrepreneurs – These are the future generation of the business organisation with the need of financial assistance to grow in the market. This segment of the target market has the potential to introduce new and innovative products in the market and compete with the large-scale established companies.
Small to Medium size Enterprise – This is considered as an active part of the economy that are dynamic in nature, as well as effective in the industrial production. The small to medium size of the companies enables them to be more flexible with the market demand and modify their product line accordingly to compete with the large-scale organisation.
Large Organisations – These established enterprises assure the profit in the market. This section can be considered as the stable source of revenue generation of Public bank Berhad.
The identification of the potential target market leaves the company with positioning their product accordingly to attract the right group for the right product. Competitor evaluation helped them in differentiating their products and in bringing uniqueness in their products (Schlegelmilch, 2016). SWTIF Plan, SMILAX Plan, Fund for Small, Medium Size Industries 2, and New Entrepreneurs Fund are some of the product the organisation offers to their corporate clients depending on the need (pbebank.com, 2018). Every product offered in the target market is designed to address each of the target segment identified in the market.
Product orientation is the line of products offered by the company to their prospective customers. Public Bank Barhad has a wide range of products that they offered to their customers. The range of products addresses and covers the complete target population regardless of the size of the organisation. This enables their customers to choose between the products that are best suited for their business (Calmès & Théoret, 2015). The business organisations ranging from a new entrepreneur to full grown business can receive financial in their operational process. The popular products offered by Public Bank are SWTIF Plan, SMILAX Plan, Fund for Small and Medium Size Industries 2 and New Entrepreneurs Fund. Mentioned products offered by the organisation have different specifications and address the need of different organisations (pbebank.com, 2018). The SWIFT Plan for example provides the maximum benefits to their customers, which is made accessible for the existing medium sized business organisations. These packages further provide different level of services benefits to the purchaser.
Public bank further assists their customers retaining their beneficial employees by offering a range of health benefits (pbebank.com, 2018). Some of the other services offered to the customers are card facilities, secured internet transaction etc. that helps the company in retaining their loyal customers in corporate banking.
The value proposition and differentiation of the company can be determined by the use of the generic strategy proposed by Michel Porter in 1980s (Tanwar, 2013). This is useful for the business organisation to determine the process of establishing the company in the market. The generic strategy offers three option that an organisation can adopt for attaining sustainability, which are cost leadership, differentiation and focus.
Figure 2: Porter’s Generic Strategy
Cost Leadership – The cost leadership helps identifying the value proposed by the organisation to their customers. The theory proposes low cost product to be the leader in the market. This increases the profit margin of a company. Public Bank Berhad enables the customers with the facility of highly secured internet banking facility (Kinyuira, 2014). Internet enabled facility offers the corporate customers the opportunity conduct all the operation over internet ranging from loan application to daily transaction, which considerably reduces the cost incurred by the bank. The card facility provided also supplements in the same by minimising the need for visiting the bank.
Differentiation – Differentiation on the other hand is the process of providing unique products to the customers. However, the banking sector has little opportunity to offer unique products and services to their customers. However, moderate innovative thinking can differentiate the services for generating value (Brenes, Montoya & Ciravegna, 2014). Public Bank Berhad offers range of products to their all-level corporate clients satisfying their needs, which is uncommon in the banking. Moreover, the bank also provides facility to their clients for retaining their employees by providing low rate of health insurance. The company further offers their clients a cash management service for helping them achieving faster growth in the industry.
Focus – Focus on the other hand helps the company in determining the process of attaining growth by focusing on either cost or differentiation. The bank attains to focus on the both for placing themselves differently in the market while maintaining the cost of operation.
Increased globalisation is causing the business for expanding in the international markets. However, the business organisations often encounter monitory issues international expansion as it requires the business organisation to invest a lump sum in the international market for creating the necessary infrastructure required. A new entrepreneur on the other hand with brilliant business plans often faces challenges in accumulating money in setting up their business in the selected market (Karim & Chowdhury, 2014). Hence, viewing the issue from the clients’ perspective, monitory issue can be considered as the primary need of different business organisation regardless of the stage it belongs to. Hence, the primary need that is possible to identify in the corporate banking is the loan.
Moreover, technological advancement and adaptation in the daily life enables the individuals to access various needs using the technology. This situation creates the need of technological advancement in the banking sector that will enable the clients to operate their account or even apply for business loan using the technology in hand (Peppers & Rogers, 2016). Public Bank Berhad enables their customers to enjoy the technological benefits in their banking service incorporating online banking, online loan application, use of credit card for maintaining their accounts.
Customers’ purchasing behaviour depends on various factors related to the product and the purposes fulfilled by the particular product or service. Engel-Kollat-Blackwell model narrates five different stages in the identification process that includes problem identification, information search, evaluation of alternatives, purchase decision and post purchase behaviour (Orji, 2013). The technologically advanced business organisations in Malaysia seeks for the best banking service available to them with the maximum benefits. The considerations accounted by the business organisation for availing corporate banking services are the loan and interest benefits and diversified services provided by the business organisation. Hence, satisfying these benefits better than the competitors can provide opportunity for penetrating the market and increase customer loyalty.
Competition in business organisations over industries is a common factor. The external competition is considered as the primary threat for any company. The competitive nature of the market can be understood using the porter’s five-force model (E. Dobbs, 2014).
Porter’s five forces model helps in identifying five threats an organisation can face in the market.
Figure 3: Porter’s Five Forces
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Power of the Customers |
Bargaining power of the customers is high due to the number of available options they have in the market (Indiatsy et al, 2014). However, the products and services in offered by the organisation is comparatively profitable in the market and address the complete segment of the target population that reduces the power of the customers. |
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Power of the Supplier |
The bargaining power of the suppliers in the banking sector is comparatively low. The primary supplier in the industry is the depositors that have minimal power. They are communicated the rate of interest at the time of deposit. The employees are other suppliers that help in providing services to the customers. The existing competitors in the industry increases their bargaining power, however, the facilities provided to them by the organisation reduces the threat (Njagi & Kombo, 2014). |
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Competitive Rivalry |
Competition in the banking industry of Malaysia is considerably high. Organisations like Maybank, CIMB, RHB Bank and HSBC bank Malaysia are the direct competitors that pose significant threat to the organisation in the corporate banking section (Kungu, Desta & Ngui, 2014). |
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Threat of Substitute |
There are no as such substitute for the products and services offered by the banking industry. However, advanced technological modification forces Public bank to modify their services according to the trend in the market. |
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Threat of New Entrants |
Threat of new entrants in the Malaysian banking sector can be considered as moderate to high due to the globalisation. The already existing banking organisations restrict the new organisations to start their venture in the industry. However, the globalisation has led the international organisations to expand their reach to the new markets (Wasiuzzaman & Nair Gunasegavan, 2013). Moreover, the Malaysian policy on international business makes it easy for the institutions to penetrate in the market. |
Conclusion
It can be concluded from the above discussion that Public Bank Berhad has gained success in marketing their products and services in the Malaysian market. The results from the STP analysis reflects that the company has successfully addressed the target customer segment by incorporating all the segment under consideration. Moreover, they are successful in proposing value to their customers through differentiation, which means that the company is providing greater range of products and services to their customers
References
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Njagi, L., & Kombo, H. (2014). Effect of Strategy Implementation on Performance of Commercial Banks in Kenya. European Journal of Business and Management, 6(13), 62-67.
Orji, O. G. (2013). Major Classic Consumer Buying Behaviour Models: Implications for Marketing Decision-Making. Journal of Economics and Sustainable Development, 4(4), 164-173.
pbebank.com. (2018). Product Packages. Retrieved 16 January 2018, from https://www.pbebank.com/Business-Banking/Banking/Financing/Product-Packages/Product-Packages.aspx
pbebank.com. (2018). PB SME Platinum. Retrieved 16 January 2018, from https://www.pbebank.com/Business-Banking/Insure/Employee-Benefits/PB-SME-Care.aspx
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