This is a market research report based on a case study on Bank of America which is the largest bank in terms of assets and has the second largest market in the United States. It was named Bank of America when two banks Nations and the San Francisco-based Bank of America merged in 1998. The bank has been growing and developing by acquiring other financial organizations such as Countrywide Financial in 2008 which enabled it to gain a huge market in the mortgage business in the U.S. In 2009 it acquired Merrill Lynch & Co. This made it be the largest financial services company in U.S. Its financial service market includes; individual consumers, small and midsize businesses and large corporations.
This report will focus on how market research can benefit Bank of America in developing effective marketing strategies. In the report, the concept of management decision problem will be defined and an appropriate market problem will be identified as well as an appropriate research design of the study problem with an aim of helping the management of Bank of America expand its market. It will also include a table showing the market shares of major banks in U.S in 2016.
Development and growth are the major goals of every company. To achieve this goal the company must have a broad market for its products and services. The company requires comprehensive information about its target market which may include, consumer needs, market trends, competitors and any other useful information that would help a company compete in the market. The company can only acquire this information by carrying out a comprehensive market research. According to DE Vault, (2017) market research is a process which involves the definition of a problem that needs a solution and then finding the answers to the problems. According to Pena, (2013), there are two methods of carrying out a market research that is, qualitative method and quantitative methods. Qualitative research methods obtain information that can not be numerically quantified such as opinions, feelings, attitudes, perceptions among others. This type of information can be gathered through interviews, observation, focus group discussions among other tools. This information is important as it helps the company discover tastes and preferences of the consumers. On the other hand, quantitative methods obtain numerical data about the market. In these methods, information can be collected through census, polls, and surveys or from secondary sources of data. Using these methods the company can trace the trends in the market and also it can analyze the success of its brands.
According to Bert, (2007), the marketing strategy of any organization enables the organization to overcome the challenges and hence it can achieve its goals. Through the market research company is able to identify its position in the market as well as its strengths. The company can use take advantage of its strengths to design a competitive marketing strategy to help them grow. An effective market research must study the following areas;
By studying the market the company is able to identify accessible market which will be cost effective for instance if their products are expensive then the organization must come up with strategies on how they can reach the high-income earners.
Market research also provides useful information about the consumer categories and preferences. Data on age, education status, economic status and family status would be useful in identifying which products will be consumed by a given category of customers.
According to Inc Staff (2010), a comprehensive market research must have a detailed analysis of the competitors that is, their strengths, weaknesses, and strategies. This information can be gathered through customers surveys which enable the company identifies its reputation and the advantages the competitors have over the company. The company can identify gaps in the products and services of its competitors and use consumer preferences to fill these gaps. This makes its brand unique thus giving it a competitive advantage over its competitors.
According to Akrai, (2009) in modern day management processes, decision making is a crucial element that cannot be overlooked. He defines a decision as a choice among several alternatives which will best achieve the desired results. Therefore, decision making in management can be defined as a process by which managers choose the best alternative among several others. According to The Happy Manager. (2017) Decision-making problem results from decisions made without considering a problem that needs to be solved first before making the decision. A decision problem arises when there is no clarity on whether there is a problem that needs a solution or a decision to make. Often individuals and organizations make wrong decisions. According to Nutt, (2011) there are three factors that lead to wrong decisions, that is, stakeholders failure to participate fully in the decision-making process, lack of sufficient time in searching for possible solutions and ignoring decision making processes because of the belief that they are time-consuming and may require a lot of resources.
This report identified survey design to be a problem that may result in the decision problem. According to Bianca, (2017) while conducting market research to identify consumer needs they use surveys to gather both qualitative and quantitative information. In some cases, the design of the survey used may be erroneous which may result in faulty findings. If the company uses these findings to make their decisions then most likely the decisions will be wrong. Errors may be as a result of incorrect sampling procedures which may make the researchers get information from the wrong audience.
Pilot survey design will be appropriate as it helps in ensuring that the other surveys methods used in collecting data are efficient. It also ensures that the available resources are used appropriately to achieve the desired results. According to Sincero, (2012) pilot survey uses a smaller sample of the target respondents to test the questionnaire. Use of pilot survey has many advantages to the researcher, one of the advantage is that through the pilot survey the researcher is able to identify some elements in the questionnaire that would have provoked the respondents and therefore he rectifies it before the actual study. According to Seema (2008), a pilot survey can be used to measure the appropriateness of the questionnaire to get the desired results and whether the respondents are able to follow its instructions. Application of survey will save the Bank a lot of finances and help in eliminating errors that may be found in the questionnaire early enough. Thus resulting in reliable information that can be used to make sound decisions on the appropriate marketing strategy.
Descriptive data will be collected by use of questionnaires. This research method is considered appropriate where the study population is large and spread in the large geographical area. In such a case it is not possible to get responses from every member of the population which calls for sampling in order to come up with assumptions about the whole population. In-depth case studies are less biased and therefore they are the most suitable in this particular study because accurate data is necessary for orders aid effective decision making (Walliman, N.S &Walliman N, 2011
Both quantitative methods will be used for data analysis. Statistical package for social sciences (SPSS) was used to ensure inconsistencies in descriptive statistics will also be used in producing frequency distribution and percentages, tables, graphs and charts which will be used to summarize data frequencies and percentages. Data from interviews will be categorized into information for objectivity.
According to (Comoreanu, 2017) market share of the banking industry is very crucial to all consumers of financial services. Competition in the banking industry ends up benefitting the consumers since every financial; institution tries to provide better services than its competitors at a lower cost. The biggest bank such as Bank of America has the ability of offer the best deals and services to their customers. The table below shows the market share of the top fifteen banks in U.S.
Table 1 Top 15 U.S Based banks based on Total Domestic Deposits
|
Rank (2016) |
Bank |
2016 Total Deposits in billions (% Market Share) |
|
1. |
Bank of America |
$1,204.49 |
|
2. |
JPMorgan Chase Bank |
$1,155.19 |
|
3. |
Wells Fargo Bank |
$1,145.34 |
|
4. |
Citibank |
$493.07 |
|
5. |
U.S. Bank |
$298.34 |
|
6. |
PNC Bank |
$248.50 |
|
7. |
TD Bank |
$214.49 |
|
8. |
Capital One |
$207.79 |
|
9. |
Branch Banking and Trust Company |
$167.00 |
|
10. |
SunTrust Bank |
$155.35 |
|
11. |
The Bank of New York Mellon |
$138.08 |
|
12. |
Charles Schwab Bank |
$137.35 |
|
13. |
HSBC Bank USA |
$136.08 |
|
14. |
Morgan Stanley Bank |
$117.07 |
|
15. |
State Street Bank |
$93.41 |
|
Total Domestic Deposits |
$11,230.21 |
(Source: FDIC June 2010-2016)
From the above information, it can be observed that the Bank of America had the largest Domestic deposits market share in 2016. However, there is stiff competition from other banks particularly JPMorgan Chase Bank and Wells Fargo Bank. Therefore the bank needs to strategize on how it can maintain and expand its market.
Conclusion
Accurate information is accurate for any organization since it guides managerial decisions of the organization. Such information can be obtained through frequent and accurate market research.it through market research that an organization can understand it market needs and the weaknesses of its brands. Research data can help the organization to gain control in the market since it is able to identify its strengths and capitalize on them.
References
Akrani, G 2010, Decision-making process in management problem-solving. Kalyan City Life Blog.
Bert, M 2017, Market Research Report for Formulating Marketing Strategies. Chron Business Articles. Available from: https://smallbusiness.chron.com/market-research-report-formulating-marketing-strategies-67685.html
Bianca, A 2017, An example of Marketing Research Problems. Chron Business Articles. Available from: https://smallbusiness.chron.com/examples-marketing-research-problems-23051.htm
Chand, S 2016, Decision making in management: Definition and features-Explained. Your Articles Library. Available from: https://www.yourarticlelibrary.com/decision-making/decision-making-in-management-definition-and-features-explained/25657/
Comoreanu, A 2017, Bank market share by deposits and assets. WalletHub Statistics. Available from:https://wallethub.com/edu/bank-market-share-by-deposits/25587/
DeVault, G 2017, Market Research 101: Problems Alternatives and Questions. Getty Articles. Available from. https://www.thebalance.com/market-research-101-problems-alternatives-and-questions-2296950
Inc Staff, 2010, How to conduct competitive research. Inc.com. available from: https://www.inc.com/guides/2010/05/conducting-competitive-research.html
Marilia, H 2012, 10 benefits of market research. Available from: https://happy-creative.co.uk/10-benefits-of-market-research/
Nutt, PC 2011, Making decisions- making research matter: Some issues and remedies. Management Research Review, 34(1), pp. 5-16.
Pena, W 2013, The importance of market research in developing a successful marketing strategy for your brand. Inbound Articles. https://www.inboundnow.com/the-importance-of-market-research-in-developing-a-successful-marketing-strategy-for-your-brand/
Seema, 2008, Research Design. Available from: https://www.slideshare.net/gaurav22/research-design
Sincero, SM 2012, Pilot Survey. Explorable .com. Available from: https://explorable.com/pilot-survey
Schmidt, S 2016, 5 benefits of market research. Market Research.com. available from: https://blog.marketresearch.com/5-benefits-of-market-research-reports
The Happy Manager, 2017, Decision-Making Problem: Is it a decision or a problem?. Available from: https://the-happy-manager.com/articles/decision-making-problem
Walliman, NS & Walliman, N 2011, “Research methods: the basics” Taylor and Francis
Wood Products, 2012, What does define a decision problem? Aricles Extension. org. Available from: https://articles.extension.org/pages/66483/what-does-define-a-decision-problem
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