Management is an important aspect, which helps in proper regulation of the business activities. This is applicable especially in case of marketing. This is in terms of regulating the marketing of the services in a proper manner, so that they reach to the customers properly (Goworek, McGoldrick & McGoldrick, 2015). This assignment attempts to shed light on the marketing management of ANZ Bank, Australia.
Australia and New Zealand Banking Group Limited (ANZ) is the third largest bank in Australia followed by Commonwealth Bank and Westpac Banking Corporation. This is in accordance with the market capitalization. The industry for the bank is banking and financial services. As per the annual reports of 2018, banking industry operated according to six themes ranging from customer centricity to cyber risk (ANZ, 2018). Strategic approach helped in maintaining the balance between the supply and the demand.
a. Growth
The financial sector of Australia contributes greatly to the national economy. In terms of GDP, it is approximately $140 billion as of the last year. Hard efforts of 450,000 employees are the major drive behind such economic growth. Strong regulatory system results in the projection of sophisticated services. Largest pool of investment assets is a support towards achieving competitive advantage over the contemporary banks. Typical evidence of this lies in 2.5% growth in the CPI inflation rate in December 2003. Support from RBA proved fruitful for ANZ Bank in terms of adopting incremental approach towards monetary policy in one financial year (Treasury.gov.au, 2018). As a result of this, the cash rate increased up to 5.5%in the first half of 2003. RBA Board meetings are one of the aspects, which increased the level of cash rate by 25 bps. Growth of cash rates from 4.75% to 5% assisted ANZ Bank to contribute greatly towards stabilizing Australian economy. Technological upgradation improved the focus in the financial services. Feedback from the customers resulted in evaluation of the services and launch e-banks, which provided greater accountability. Maintaining ethical approach assisted in attracting foreign clients, enhancing cultural diversity. This resulted in the achievement of sustainable growth (Chernev, 2018).
As a matter of specification, the banking industry in Australia can be categorised by low levels of sector competitiveness, supernormal profitability and stringent or lax prudential and consumer protection regulations. However, competing objectives assisted the banking industry in making up for the drawbacks. These objectives included shareholder returns, regulatory investment, system efficiency and customer satisfaction. Strategic approach towards leveraging RealAs property assisted ANZ bank to create 1 million home loan accounts. Accumulating greater share in the New Zealand market share strengthened the market share of the ANZ Bank in Australia in terms of home loans (Treasury.gov.au, 2018).
Figure 1: Total assets of ANZ Bank, Australia
(Source: ANZ, 2018)
Introducing Home Buyer Coaches in Australia increased the profit margin of the small business by 9%. Side by side, the commercial deposits in New Zealand encountered an increase of 6%. From the year 2011 to 2017, the total assets of the Bank were recorded as 897.33 billion AU$. Typical evidence of this lies in the economic profit, which was in downmarket scenario in the financial years of 2015-16. The year 2017 reflected positive results in the profit margin. In the same year, the cash profit was the highest, 6938m$ (ANZ, 2018).
Figure 2: Cash profit of ANZ Bank in 2017
(Source: ANZ, 2018)
Mention can also be made of the statutory profit, which witnessed an upsurge in the financial year of 2017.
Figure 3: Statutory and cash profit of ANZ Bank
(Source: ANZ, 2018)
|
Factors |
|
|
Political |
Geo-political environment Political instability |
|
Economic |
Economic growth |
|
Social |
Changing needs of the clients and the customers |
|
Technological |
E-banking |
|
Legal |
Corporation Act 2001 Australian Financial Service License |
|
Environment |
Reduction in carbon footprint |
Table 1: PESTLE Analysis of ANZ Bank
(Source: ANZ, 2018)
Political instabilities have adversely affected the business activities of ANZ Bank. Typical example of this is the hostile relationship with Iraq, US and the allies. Along with thin, increased terrorism in North Korea Fiji, Solomon Islands and Tonga have greatly affected the growth rates. This affection has compelled the bank staffs to encounter noticeable reduction in the investment rates. Moreover, the instabilities have reduced the trust among the customers regarding the financial services (Philip, 2017).
Regional economic growth is the major drive behind enhancement of the sales revenue and profit margin for ANZ Bank. Shareholder returns, regulatory investment, system efficiency and customer satisfaction have enhanced the sales revenue and the profit margin for the Bank. Leveraging real estate properties strengthened the customer base. Developing stage of the New Zealand economy might cause troubles for the Bank in terms of expanding their business (Treasury.gov.au, 2018).
Skilled and efficient staffs are the asset towards catering to the needs, demands and requirements of the customers. Taking feedbacks from the customers helps in improving the financial services. Typical example of this is the home loans, which have added stability in the market share of the bank. The home loans have assisted the Bank in luring the New Zealand customers (Weinstein & Pohlman, S2015).
Introducing mobile apps have revolutionised the financial services of ANZ Bank. Consideration of technological diffusion has enabled the bank staffs to maintain the balance between the supply and demand. High involvement of the customers on the e-banking services has compelled the staffs to adopt latest and modern software. Financial flexibility is the major drive behind this. Installation of privacy cookies and policies has assured the customers about the safety, security and privacy of their personal information (Hutchinson, Donnell, Gilmore & Reid, 2015).
Jurisdiction regulates the services of the bank in their areas of operations. Compliance with the regulatory standards and protocols is mandatory in terms of executing the financial services in the international markets. Mention can be made of Banking Act 1959, which proved beneficial in terms of carrying out the financial services according to the legislative requirements. Adhering to the terms and conditions of Australian Financial Service License seemed fruitful for the Bank, in terms of averting the instances of illegal instances and scandals (Möller & Parvinen, 2015).
Environment factors of the bank can be related with the risks, which financial industry bears. In order to regulate the risk levels, the bank developed Social and Environment Policy within the credit approval process. The screening tools are assistance in terms of identifying the potential risks in case of the low and high risk borrowers. Implementation of Equator Principles has enabled the staffs to carry out lending and investment in the developing countries (Lovelock & Patterson, 2015).
According to the reports of Senate Economics Reference Committee, Australian market is dominated by four major Australian banks- Commonwealth Bank of Australia, Australia and New Zealand Banking Group, Westpac Banking Corp and National Australia Bank. This accounts for 3/4th market share. National Australian Bank recently acquired a high competitive advantage over the contemporaries; however, the critics are doubtful of its durability. The major drive behind this is occasional lucrative advertisements, which is against the ethics of competition. According to the statements of the Competitive Regulatory bodies, lending caps have reduced the intensity in the competition, restricting the entry of the new entrants (Treasury.gov.au, 2018). Policy interventions have maximized the profit margin for the banks in terms of competition.
In terms of Stand Alone Credit Profile, the banking operations of ANZ are stable, assisting in contributing 65% towards the Australian market. Australian market is characterized by high external debt, persistent current account deficits among others. In such a scenario, services at low price and prospective value proposition by the private banks adds vulnerability in the market position of Australia and New Zealand Banking Group. However, e-banking facilities with security software and cookies puts ANZ bank at an advantageous position (Treasury.gov.au, 2018). Inculcates trust within the customers and clients regarding the services of the bank. Moreover, compliance to the standards of Australian Financial Service License and Corporation Act 2001 seems fruitful for ANZ bank. This compliance bars the entry of private banks in an ambience, where ANZ bank has already established their position firmly.
Dominance of the suppliers decreases the profit margin of ANZ bank within the market. The ruling suppliers in the banking sector of Australia adopt efficient means of negotiation for extracting higher prices. High bargaining power of the suppliers is inversely proportional to the profitability. Effective and flexible supply chain assists ANZ bank in exerting authority over the suppliers. Usage of third party manufacturers assists brands like Walmart and Nike to achieve competitive advantage (Treasury.gov.au, 2018). This adds vulnerability in the market position of ANZ bank. However, third party manufacturers have less dominant power. Therefore, consideration of technological rate of diffusion would help the bank in maintaining the balance between demand and supply of financial services.
Variations in the demands of the customers pressurizes the banking personnel of ANZ Bank in terms of delivering quality financial services. Effective e-banking services adversely affects the ability of the customers in terms of bargaining. Along with this, more is the power of the buyers towards seeking discounts and offers. Strong and flexible supply chain network is assistance in terms of streamlining the sales and production process. Bringing innovation within the provision of financial services is one of the means, which enables the Bank to influence the buying behaviour of the clients and the customers (Mortimer, Neale, Hasan, & Dunphy, 2015). Typical example of this is updating the passbook securely or secure payment methods.
Usage of devices like Dropbox, Google drive are substitutes for the storage facilities, which helps the brands in providing effective value proposition for the clients and the customers. This approach places the brand at a uniquely different position from the contemporary brands. Conducting market research seems beneficial for ANZ bank in terms of gaining an insight into the software, which supports the customers in making the payment within short time. Focusing on the security of the personal information of customers stabilizes the market position of bank (Lees, Winchester & De Silva, 2016). This step would reduce the customer turnover, enabling the bank to enjoy competitive advantage.
According to News.com.au, (2018), the “four pillars” policy is effective in terms of preventing the mergers and acquisitions in case of the four banks dominating within the Australian market. Along with this, it is also effective in terms of exempting the foreign banks from dominating the four major banks. The policy seemed beneficial towards preserving the competitive ambience of Australian market. Barring the entry of the new entrants obstructs the competitive rivalry from intensifying.
Internet is one of the drivers, which has revolutionized the services of the companies and organization. Within this, mention can be made of search engine optimization, which takes the customers directly to the services and their benefits. Here, the marketing segment is website designing, which helps the customers to get the accurate information about the financial services. The main functions here is developing keywords and meta-tags, which takes the customers directly to the financial services (Arenas, Peral & Ramón, 2015). In this marketing, transactions take place between the bank and the website developers.
Within this, one of the relevant marketing segment for the Bank is mobile marketing. Alliance between the bank and the mobile brands have eased the process of financial activities for the users. The major drive behind this are the apps, which assists the users in executing the financial services within a short time. Logging into the account makes the users aware of the various points from where they can make the payments or check the available balance. The critics are of the view that mobile marketing is a part of internet marketing (Dootson, Beatson & Drennan, 2016). However, there are certain issues, which separates internet marketing from mobile marketing. Not all phones provide standard operating system, which aggravates the difficulty in executing the financial services.
Figure: Mobile marketing of ANZ bank
(Source: ANZ Personal Banking 2018)
Mobile marketing has limited time, within which the important information needs to be disseminated to the customers. On the other hand, internet and the TV commercials have enough time for luring the customers through the customers. The promotional SMS, which are sent by the banks may get lost in the process of communication with the users. It is also observed that the users might not be interested to read the message. For this, the bank personnel need to make the websites user friendly. This is in terms of the increasing mobile usage for doing online (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014).
Social media marketing is one of the other segments for the ANZ bank. This is in terms of strengthening the customer base. Adopting social media marketing enables the bank personnel to increase the trafficking the audience towards the brand image. Uploading the information of the newly launched e-banking platform on the website and the social networking sites helps the personnel to reach the specific demands of the customers. Levying the services on the social networking sites is assistance in terms of identifying the target audience (Roy, Devlin & Sekhon, 2015).
Figure: Social media marketing of ANZ Bank
(source: ANZ Personal Banking 2018)
Therefore, the primary target market of ANZ Bank are the tech savvy people, belonging to the age group of 20-35. This is because they are proficient with the apps services on the mobile banking. The secondary target market for ANZ Bank are the customer belonging to the age group of 50-65. Although they are more experienced than the customers of age group 20-35, they lack spontaneity in conducting mobile banking.
Primary target market for ANZ Bank are the customers belonging to the age group of 20-35. This is the segment, upon which the brands have faith in terms of enhancing the sales revenue and profit margin. Here, the transactions take place between the brand and the selected group of customers. The primary target market for the Bank are tech savvy and have high bargaining power. Uploading the latest trends in retail banking proves beneficial for the Bank in term of influencing their purchasing decisions. However, this target market is prospective in terms of boosting the sales production of the Bank, as they prefer online shopping (Mehra & Coleman, 2016). Typical example of this can be privacy cookies and policies, which have increased demands among the primary target market. Fraudulent cases in transactions creates heavy impact on the primary target market. This compels the bank to introduce safe and secure payment options, which restricts the intervention of third parties in the transaction processes
The age group of 50-65 are senior than the 20-35 age group in terms of experience. They have tried the services of the other brands, therefore, therefore, it is difficult for the bank personnel to influence their purchase decisions. One of the weakness is that some of the users lack technical skills, which results in the high involvement of the 20-25 age group towards the services (Hossain, Dwivedi & Naseem, 2015). Therefore, training is one of the effective means for the Bank in terms of controlling the decisions of the target audience
Figure: Position mapping of Australia and New Zealand Banking Group
(Source: Treasury.gov.au, 2018)
The above figure depicts the position of different brands within the competitive ambience of Australia. The focus of this segment is on the position of ANZ Bank. The parameters of assessment are personalization and automation. Technological advancement assisted the bank personnel in providing personalized banking solutions for the users. Typical example of this are retail banking/net banking, Immediate Funds Transfer, Updating passbook among others. Installing privacy cookies and policies is the keystone for the banks in terms of achieving the trust, reliance and dependence of the customers. Innovation in the mobile app operations strengthens the customer base for the bank and provides the bank with the opportunity to enjoy competitive advantage over the contemporary banks- Westpac, National Australian Bank among others (Treasury.gov.au, 2018).
Conclusion
Marketing segmentation helps ANZ bank in identifying the primary target market. Usage of search engine optimization assists in conducting direct marketing. Adopting social media seems fruitful for the bank in terms of strengthening the customer base. Technological diffusion helps in maintaining the balance between the supply and demand. Along with this, it also stabilizes the value chain.
References
ANZ Personal Banking | Accounts, credit cards, loans, insurance | ANZ. (2018). Retrieved 18th September 2018 from https://www.anz.com.au/personal/
Arenas Gaitán, J., Peral Peral, B., & Ramón Jerónimo, M. 2015. Elderly and internet banking: An application of UTAUT2. Journal of Internet Banking and Commerce, 20(1), 1-23.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. 2014. International business. Pearson Australia.
Chernev, A. 2018. Strategic marketing management. Cerebellum Press.
Dootson, P., Beatson, A., & Drennan, J. 2016. Financial institutions using social media–do consumers perceive value?. International Journal of Bank Marketing, 34(1), 9-36.
Goworek, H., McGoldrick, P. J., & McGoldrick, P. J. 2015. Retail marketing management: Principles and practice. Harlow, UK: Pearson.
Hossain, M. A., Dwivedi, Y. K., & Naseem, S. B. 2015. Developing and validating a hierarchical model of service quality of retail banks. Total Quality Management & Business Excellence, 26(5-6), 534-549.
Hutchinson, K., Donnell, L. V., Gilmore, A., & Reid, A. 2015. Loyalty card adoption in SME retailers: the impact upon marketing management. European Journal of Marketing, 49(3/4), 467-490.
Lees, G., Winchester, M., & De Silva, S. 2016. Demographic product segmentation in financial services products in Australia and New Zealand. Journal of Financial Services Marketing, 21(3), 240-250.
Lovelock, C., & Patterson, P. 2015. Services marketing. Pearson Australia.
Maheshwari, V., Gunesh, P., Lodorfos, G., & Konstantopoulou, A. 2017. Exploring HR practitioners’ perspective on employer branding and its role in organisational attractiveness and talent management. International Journal of Organizational Analysis, 25(5), 742-761.
Mehra, S., & Coleman, J. T. 2016. Implementing capabilities-based quality management and marketing strategies to improve business performance. International Journal of Quality & Reliability Management, 33(8), 1124-1137.
Möller, K., & Parvinen, P. 2015. An impact-oriented implementation approach in business marketing research: Introduction to the Special Issue on “Implementing Strategies and Theories of B2B Marketing and Sales Management”. Industrial Marketing Management, 45, 3-11.
Mortimer, G., Neale, L., Hasan, S. F. E., & Dunphy, B. 2015. Investigating the factors influencing the adoption of m-banking: a cross cultural study. International Journal of Bank Marketing, 33(4), 545-570.
News.com.au 2018, Memo to the big four banks, Retrieved 18th September 2018 from https://www.news.com.au/finance/business/banking/memo-to-the-big-four-banks-your-number-is-up/news-story/d7ec68937546541a6b0d370b5d7e9bb5
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