Marketing Plan For HSBC Credit Cards In Australia

Executive Summary

Describe about the Marketing Plan for HSBC Credit Cards in Australia?

There was a time when marketing was considered as a secondary function in an organization. With globalization, organizations have expanded in far of places and with this organizations have realized the importance of marketing. Today, marketing is considered as a critical organization function. The nature of marketing has also changed in recent times. There was a time when focus was more on the transactional marketing. With advancements in tools and technologies the focus of marketers has shifted to relationship marketing. The need of marketing is felt by organizations in different industry verticals. With globalization and internationalization and spread of technology there has been an exponential growth and expansion in financial industry. In recent times, credit card has emerged as a crucial financial product. The competition has been all time high in credit card industry.  Therefore it is important that credit card firms should also realize the importance of marketing.

The report has been developed as the marketing plan for HSBC Credit Cards in Australia. The report identifies the marketing mix of credit cards and based on the analysis it can be said that the ‘Product’ element is the key. The report identifies that one of the most important role of marketers is to bridge the gap between customers’ expectations and management perception of customers’ expectations. Segmentation, Targeting and Positioning is the basis of any marketing plan. The report highlights the important segments for Australian market that should be targeted by the company. As a part of this marketing plan certain marketing objectives are also set and the budget for the marketing plan is also developed. This marketing plan would be useful for HSBC to take their decision about Australian market and this would also help the company to develop their marketing strategy in Australia.

HSBC Credit cards are the part of HSBC Finance Corporation. HSBC Credit cards operate in global market and it has its presence in different parts of the world. It has good presence in markets of Australia, USA and also in emerging economies like India. In this era of globalization, competition is very high in financial industry also. Credit cards are important financial products that have made life easy for number of customers. Companies may not be willing to offer credit card to all the people due to risks involved. Therefore marketing of credit card is a difficult task in itself (Towill, 2009). The marketing plan of any credit card company has to focus on effective segmentation and targeting. It is also important that the marketing plan of companies like HSBC Credit Card should have effective communication channel. The cost of shifting from one vendor to another should not be high and the marketing strategies of Credit Card should detail down the unique things of the card. It can be said that it is difficult to attain a level of differentiation because all the credit cards companies offers good benefit to customers. Therefore marketing plan has to be lucrative that can attract customers.

Vision, Mission and Objective

Product attributes are definitely important features of HSBC Credit card. However, the role of marketing cannot be denied. Even it can be said that the marketing plan of HSBC Credit card should also involve a level of personal selling. A lot could also depend on the way customers are getting enrolled in the program. The objective of this paper is to develop the marketing plan for HSBC credit card, Australia. The marketing plan would focus on all the attributes of marketing, market development and customer relationship marketing. The objective of this marketing plan would be to ensure that HSBC Credit cards could be positioned successful in Australian market.

For any organization, it is important to have a mission, vision and objective in place. It is important that the marketing plan of HSBC Credit cards should be in line with the vision and mission of the company. The vision, mission and objective for HSBC Credit cards can be discussed as:

To help customers to buy their dreams

It is a small but meaningful vision statement. The vision is to help customers so that customers can get more purchasing power.

To emerge as the best credit card company in Australia with respect to volume of customers          

The mission statement of HSBC Credit cards is to ensure that it can emerge as a market leader in Australian market.

The specific objectives of HSBC Credit cards can be listed as:

• To have maximum penetration in the Australian market with respect to competitors.
• To capture at least 40% of Australian credit card customer base in next 3 years.
• To focus on default rate. The policies and strategies should ensure that default rate is minimal.
• The customer satisfaction should be high. The support service should be available 24X7 and customers should be able to interact with customer care executives and get their queries solved.

Macroeconomic factors are those factors that relate specifically to the broader or wider economy at a regional level or a national level. Such factors affect a much larger population as opposed to a small number.  For any credit card company, it is important to have an understanding of the macro economic factors (Lee, 2009). The macro economic factors would include the market conditions of Australia, industry analysis of Australia etc. The macro environment analysis and the market dynamics of Australia can be discussed as:

Economic growth is a very important macroeconomic factor that can be used as an indicator by HSBC Credit card to analyse the way economy is moving in Australia. It can be said that Australia in undergoing a decent economic growth and this economic growth should facilitate the penetration of credit card companies. Economic activity is not constant and can change rapidly, thereby affecting the business. Therefore, HSBC has to continuously watch the economic activities in Australia. The economic activities in Australia suffered a setback in 2008 due to global recession. However, Australia is still less risky market as compared to American market. It is expected that credit card business should be a good business in Australia and HSBC should be able to realize good benefits it can get hold of economic factors.

The disposable income of customers is directly linked to inflation rate in the country. Customers may not be willing to spend much using credit cards if the rate of inflation is high. The current inflation rate in Australia is under control. The inflation stands around 2%. People would not feel much challenges if the rate of inflation remains controlled. The inflation rate of Australia was not good in the period of 2008 to 2010 (Martin, 2010). However, the conditions have improved now and with the current inflation rate of 2%, HSBC should not have much of the problem to expand their credit card operations in Australia.

Macro Environment

The inflation trend of last 10 years in Australia can be shown as:

Interest rates also determine the disposable income of customers. Customers may not be able to invest much when the interest rates are high (Sarkis, 2005). The government of Australia has focused to balance on the saving and lending rates so that customers can spend and to saving also. The interest rates factors in Australia are also a good factor for HSBC to expand its credit card business in Australia.

The credit card companies have good chance of survival when the employment rate is high. It is one of the reasons that credit card companies have good amount of business operations in developed countries as compared to their operations in developing countries. As per the figure of 2014, the unemployment rate in Australia is only 6.1%. It is a good unemployment rate and it means that there are huge prospects for HSBC Credit card in Australian market.

Segmentation and Targeting is the most important thing in any marketing plan. It is important that the product should be targeted to segmented market effectively. Typically, the targeted market could be selected based on age, gender, income or any other parameter. In this case of credit card, the target market should be selected primarily on the basis of income (Scherhorn, 2010). The disposable income of the customers should be the prime criteria for credit card.

The target market for HSBC Credit card would be people in the age group of 20 to 60 years, who are earning. It would include both single and married people. One of the prime objectives to select the target market would be to target the earning people so that the risk of bad debt could be minimized. It would include the business people and the service people. It is important that HSBC should do the background check of all the customers before providing any credit card. The target market of HSBC credit card should also involve the spouses of earning people. To avoid the risks, HSBC should not provide credit cards to the people who are not earning as one of the important considerations for credit card companies is bad debt.

The target market selection would not be an easy strategy for HSBC credit cards division and the company should perform effective internal and external analysis before deciding upon the target market. One of the important things for HSBC would be to identify the needs of customers.

The target market for HSBC Credit card group in Australia would be a group that uses credit cards for shopping and other purposes. The target market penetration for HSBC would also depend on the market development. It can be said that Australian market is a matured market with respect to credit cards and people in Australia prefers plastic money to perform shopping (Aksoy, 2008). It is also important to mention that the product (credit card) is already an established product in Australian market. The competition is already high in this industry. It is important that HSBC would have to focus on its target market in an intelligent way. To approach the target market, HSBC should perform external market analysis. Porter 5 forces analysis and PESTEL analysis would be a god tool for HSBC. In fact the features of the product (Credit Card) would also depend on the way target market can be identified. The segmentation, targeting and positioning for HSBC Credit card business in Australia should be based on industry analysis and the analysis of competitors. It would be good if HSBC can study the marketing strategy of top three firms in Australian market. Also, HSBC can also analyze the segments of top 3 competitors. It would help HSBC to realize the segments that are being widely targeted by credit card companies.

The marketing segment table for HSBC Credit card would help to realize the characteristics of different segments of HSBC credit cards in Australia. It can be shown as:

	Segment 1	Segment 2	Segment 3	Segment 4
Geographies	Urban population=> 100%, Rural population=> 0%	Urban population=> 100%, Rural population=> 0%	Urban population=> 100%, Rural population=> 0%	Urban population=> 100%, Rural population=> 0%
Demographics	Age group of 20 to 55 years	Female married women with age group of 20 to 55 years	Business man/ women who have taken self-retirement or are retired with age group of 40 to 70 years	Senior citizens with age group of 55 to 75 years
Socioeconomics	Earning member of the family with annual income of individual more than AUD 20,000	Earning/ Non-earning member of the family with the annual income of family more than AUD 25,000	Non-earning member with the savings of more than AUD 200000.	Earning/ Non-earning Australian citizens on Pension plan or some tangible assets
Psychographics	High earning individuals	High earning family	High earning individuals	Senior citizens
Behavior	Easiness	Necessity	Luxury	Ease of use
Benefits	Convenience	Convenience, Flexibility	Convenience, Flexibility	Convenience

As discussed above, the competition is really high in financial and credit card industry. There are lots of players that operate in Australian market. One of the objectives for HSBC would be to come up with features so that the products of HSBC could be rated better than the products of competitors (Majumdar, 2010). The competitor information would help HSBC to develop its expansion strategy in Australian market. The competitive audit chart for HSBC Credit card can be discussed as:

	Core Products	Facilitating Products	Strengths	Weakness	Value
Existing competitors
ANZ	Low interest rate credit card	Lowest annual fee ($58) among all the cards	Interest rate of only 13.49% p.a.	Cash advance rate is very high	Value for customers who do not want to pay much interest and are money cautious
Westpac	Low interest rate credit card	Low annual fee ($59) and	Establish brand in Australian market	Cash advance rate is very high	It is get this card. The value for customers is ease of use
New competitors
Amex	Credit card with high limit	Large acceptancy among merchandise	Establish brand in Global  market	This card is expensive to use, annual fee is also high	Brand value of the product is the value delivered to customers
Citi	Credit card with good rewards points	Cash back offers are very good and attractive	Large network of Citi Bank	Limited cash withdrawal limit every month	Value for money is the positioning from Citi, that is the customer value

SWOT analysis is a simple yet powerful tool for HSBC to develop strategies in Australian market. SWOT analysis would help HSBC to have an understanding of internal capabilities and have understanding of external factors.

Strengths ·         Established brand in international market ·         Large company that can scale up quickly ·         Got the ways to make initial investment	Weaknesses ·         Large company so it has inflexibility ·         Lot of rules driven and hierarchy driven
Threats ·         Uncertain market dynamics in credit card and financial industry	Opportunities ·         Large Australian market ·         Increasing demand of credit cards

It is very important for organizations to have marketing objective in place. Developing the marketing plan without marketing objectives is like driving the car without control in place. The three most important marketing objectives for HSBC Credit Card in Australia can be discussed as:

• M1: To get the 10% market share by the end of year 1 and to increase this market share to 25% by the end of year 3.
• M2: To focus on penetration in initial 1 year. It would mean to develop attractive plans for customers. The growth rate should be 20% in initial 5 quarters
• M3: The focus would not be in profit level in the first year. After first year, company should have a profit growth of minimum 12%

Typically any marketing strategy would be based on 4Ps of marketing. These 4Ps would include Product, Price, Place and Promotion. It is a combination of these elements that would decide the overall marketing strategy. The marketing element mix for HSBC Credit cards in Australia can be discussed as:

It can be said that product is the most important element of the marketing mix. The Australian customers would eventually buy the credit cards if they get the value for money. It is important that the company should develop the product based on the product of competitor (Evans, 2012). This strategy is known as outside-in approach of strategic management. This approach is recommended, because market is already matured.

The price of the product could be the game changer in credit card industry. The competition is high in the market and therefore HSBC have to act as price taker rather than price maker. It is recommended that pricing of HSBC credit cards should be based on the pricing of competitors (Cooper, 2007).

It is very important that users should be able to get hold of the credit cards. The end customers may not be willing to spend a lot of time in search of credit cards (Croxson, 2006). HSBC must have the option wherein the representatives of the company would visit customers to deliver the credit card.

The importance of promotional element of marketing mix cannot be denied in this globalized world where competition is high. It is important that HSBC should involve itself in high level of promotion on social networking websites.

	April (M1)	May (M2)	June (M3)	July (M4)	August (M5)
Product
Focus on product features (core product) vis-a-vis features of competitors product	The focus would be to increase penetration across Australia	The focus would be to increase penetration across Australia	The focus would be to increase penetration across Australia	The focus would be to increase penetration across Australia	The focus would be to increase penetration across Australia
Focus on additional features and augmented product	The focus would be to provide additional and better features that product of competitors	The focus would be to provide additional and better features that product of competitors	The focus would be to provide additional and better features that product of competitors	The focus would be to provide additional and better features that product of competitors	The focus would be to provide additional and better features that product of competitors
Price
Keep pricing low	Keep the prices 10% low than the prices of competitors	Keep the prices 10% low than the prices of competitors	Keep the prices 10% low than the prices of competitors	Keep the prices 5% low than the prices of competitors	Keep the prices 5% low than the prices of competitors
Provide initial discounts	Provide joining benefits and annual discounts	Provide joining benefits and annual discounts	Provide joining benefits and annual discounts	Provide joining benefits	Provide joining benefits
Place
Sell online	Customers should be provided discounts for online purchasing	Customers should be provided discounts for online purchasing	Customers should be provided discounts for online purchasing	Customers should be provided discounts for online purchasing	Customers should be provided discounts for online purchasing
Door to Door delivery	No additional charge for free home delivery	No additional charge for free home delivery	No additional charge for free home delivery	No additional charge for free home delivery	No additional charge for free home delivery
Promotion
Promotion on social media	Focus on FB page and Twitter	Focus on FB page and Twitter	Focus on FB page and Twitter	Focus on FB page and Twitter	Focus on FB page and Twitter
Promotion through personal selling	Hire effective salesmen that can attract customers	Hire effective salesmen that can attract customers	Personal selling through discounts	Personal selling through discounts	Personal selling through discounts

The marketing strategies of HSBC are in line with the marketing objective of firms. It is very important for management of HSBC to keep a track on marketing objectives by evaluating them. The marketing mix evaluation chart can be discussed as:

	How	1st Quarter	2nd Quarter	3rd Quarter	Who
Product
Focus on core product features vis-a-vis features of competitors product	Comparing the number of features of HSBC Credit card with the features of competitors	Would be evaluated in first quarter itself			Senior management and external consultants
Focus on additional features and augmented product	Some of the features should be unique to HSBC company		Would be evaluated in second  quarter
Price
Keep pricing low	Compare the prices of all the credit card companies	Would be evaluated in first quarter itself			Management of the company
Provide initial discounts	Track the discount level for each of the customer		Would be evaluated in second quarter itself
Place
Sell online	Ratio of online selling to total sales made	Continuous measurement	Continuous measurement	Continuous measurement	Sales department
Door to Door delivery	Ratio of direct selling to total sales made	Continuous measurement	Continuous measurement	Continuous measurement
Promotion
Promotion on social media	Track the customers converted through social media	Continuous measurement	Continuous measurement	Continuous measurement	Sales department
Promotion through personal selling	Track the customers converted through personal selling	Continuous measurement	Continuous measurement	Continuous measurement

The marketing budget should be high in the first year because a lot of investment would have to be made from the side of HSBC.

Monday Start Date	HSBC Sales Support	HSBC Public Relations	Interactive / Market Development	HSBC Advertising	HSBC Research	Totals by Month, Quarter & Year-to-Date
Week of	Proj	Actual	Proj	Actual	Proj	Actual	Proj	Actual	Proj	Actual	Proj
Apr	7	2,000		1,500		1,500		2,000		3,000		10,000
Apr	14	2,000		1,500		1,500		2,000		2,000		9,000
Apr	21	2,500		2,000		1,500		3,000		2,000		11,000
Apr	28	2,500		2,000		1,500		3,000		2,000		11,000
Apr Total	$9,000	$0	$3,000	$0	$6,000	$10	$10,000	$0	$9,000	$0	37,000
May	5	2,500		2,500		1,500		3,000		2,000		11,500
May	12	2,500		2,500		1,500		3,000		2,000		11,500
May	19	3,000		2,500		1,500		3,000		2,000		12,000
May	26	3,000		2,500		1,500		3,000		2,000		12,000
May Total	$11,000	$0	$10,000	$0	$6,000	$0	$12,000	$0	$8,000	$0	$47,000
Jun	2	3,000		2,000		1,500		3,000		1,500		$11,000
Jun	9	3,000		2,000		1,500		3,000		1,500		$11,000
Jun	16	3,000		2,000		1,500		3,000		1,500		$11,000
Jun	23	3,000		2,000		1,500		3,000		1,500		$11,000
Jun	30	3,000		2,000		1,500		3,000		1,500		$11,000
Jun Total	$15,000	$0	$10,000	$0	$7,500	$0	$15,000	$0	$7,500	$0	$55,000
Total Q1	$35,000	$0	$23,000	$0	$19,500	$10	$37,000	$0	$24,500	$0	$139,000
Jul	7	3,000		2,000		1,500		2,500		2,500		$11,500
Jul	14	3,000		2,000		1,500		2,500		2,500		$11,500
Jul	21	3,000		2,000		1,500		2,500		2,500		$11,500
Jul	28	3,000		2,000		1,500		2,500		2,500		$11,500
July Total	$12,000	$0	$8,000	$0	$6,000	$0	$10,000	$0	$10,000	$0	$46,000
Aug	4	2,000		2,000		1,500		1,500		1,500		$8,500
Aug	11	2,000		2,000		1,500		1,500		1,500		$8,500
Aug	18	2,000		2,000		1,500		1,500		1,500		$8,500
Aug	25	2,000		2,000		1,500		1,500		1,500		$8,500
Aug Total	$8,000	$0	$8,000	$0	$6,000	$0	$6,000	$0	$6,000	$0	$34,000
Sep	1	2,000		2,000		1,500		1,500		1,500		$8,500
Sep	8	2,000		2,000		1,500		1,500		1,500		$8,500
Sep	15	2,000		2,000		1,500		1,500		1,500		$8,500
Sep	22	2,000		2,000		1,500		1,500		1,500		$8,500
Sep	29	2,000		2,000		1,500		1,500		1,500		$8,500
Total	$55,000	$0	$39,000	$0	$31,500	$10	$53,000	$0	$40,500		$623,500

An important part of any marketing plan is the control and monitoring plan. It is important that management should be able to exercise effective control mechanisms in order to ensure that marketing strategies remains on track. The control and monitoring of the marketing objectives should be the collective responsibility of all the stakeholders. The control and monitoring should start from the top management and would go to lower level employees. An effective control and monitoring plan would ensure that all the processes are standardize in the organization.

Conclusion

The above marketing plan discusses the marketing objective of HSBC Credit Cards in Australia. Based on the analysis, it can be said that Australian market is a developed market and the market has lot of potential for credit card companies to establish and grow. The credit card market in Australia is already a competitive market but the market is far from saturated. Therefore, there exists opportunity for new companies to come and establish their base in the market. HSBC is an international brand and it has been able to establish good brand reputation. It is expected that HSBC would be able to develop upon its product (credit card). The marketing strategy or marketing objectives of HSBC would be in line with the market dynamics and industry analysis.

In first couple of years, the objective of HSBC would be to improve its penetration into Australian market. The initial time would be period where the firm should focus to increase the user base. Once the user base is established, HSBC should focus on extracting profit. Financial sector and credit card industry is a risky industry and therefore HSBC should adopt a balance approach of expansion. The marketing plan would eventually help HSBC to make its product known in the market. The marketing plan would require initial investment but marketing strategy and integrated marketing plan would be a good way for HSBC to reach out to its customers. It is recommended that HSBC should for long term benefits that could be realized with credit card business in Australian market.

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