1.1 The Co-Operative Bank – An Introduction
The Co-Operative Bank is New Zealand based and as of 2011, a fully registered bank (New Zealand Herald, 2011). It had a market share of 0.6 to 0.7% when it launched as a Bank and has 128,000 members as of 2014 (KPMG, 2013) The bank’s mission statement or principle activity is to “provide financial and investment services to its shareholders”, its shareholders being its customers who are all “owners” of the bank (StopPress, 2014). The owners receive yearly dividends from the bank depending on an algorithm that calculates the value of their association with the bank (The Co-Operative Bank, 2013). 1.2 PESTE Analysis
– “fair play on fees” class action will have effect on how banks are perceived and could have effect on how banks can charge fees to its customers. Some banks are being sued but CO-Operative is not subject to the class action. 1.2.1 Economic
-Changes in the credit rating of the bank could have an effect on how customers perceive the quality of the bank. Currently the co-operative bank has a rating of BBB- (The Co-Operative Bank, 2013). As this is one of the lowest in New Zealand this will have an effect on how the bank is perceived. 1.2.2 Socio-Cultural
– Also as there is more importance placed on achieving a tertiary education in New Zealand, the banking sector has a larger market segment of tertiary students. – Due to the effects of the 2008 recession and the 99% movement people are increasingly sceptical of banks. Banks must adjust to this factor in order to detract and negative effects. 1.2.3 Technological
– All major banks in New Zealand have internet banking and mobile apps where customers are able to do their banking. As technology is always changing it is important that banks are continuing to update and make changes to their digital platforms to continue to be competitive in the market.
-Environmental factors do not have a massive impact over the Co-Operative bank however climate change have some effect on the success of New Zealand businesses abilities to save and service loans. Particularly as New Zealand is an agricultural based society and climate change disrupts farming processes.
2 Competitor Analysis
In the tertiary banking sector there are 5 main players that the Bank must compete with. Each has their own drawcard however the reality is the base package each bank offers is very similar and in terms of costs, the banks offer students free or relatively free banking – See Appendix 1. On top of this each bank differentiates itself by offering extra services that are enticing to the student lifestyle. 2.1 ASB
ASB, as well as a relatively free base package, offers students free fries at McDonalds every time they use their card. This “gimmick” is attractive to students as it means banking with ASB guarantees them food should they run out of money. They also offer students a large overdraft and a txt when funds are running low. 2.2 ANZ
ANZ’s tertiary package is perhaps the least “gimmicky” of the big banks. They offer accessible branches and ATM’s on campus as they are aware a student is often time poor. 2.3 BNZ BNZ’s YouMoney is known to be extremely innovative and in tune with a tertiary audience’s preference for good, simple web design. Their point of difference is an industry leading web application that makes handling finances, something that student have great difficulty doing, every simple. 2.4 Westpac
WestPac’s Student Pac, historically, has used gimmicks such as a free $25 upon sign up and a free pizza to engage the tertiary audience to bank with them. In the long term they also offer a “save and win” scheme that entices students to bank with them to win money on the money they choose to save. 2.5 Kiwibank
Kiwibank has perhaps the most comprehensive banking package. Their extra services include software to help manage your money, no commission currency conversion, free use of ANZ ATMs on campus and free txt banking. This shows they are very much in tune with the requirements of being a student in New Zealand which supports Kiwibank’s main draw card of the bank being a New Zealand owned bank. 2.6 Co-Operative Bank
The Co-Operative Banks student package is by contrast the least comprehensive. They offer a top interest rate of 5% however their main drawcard, even for students, is still the fact that they are not just New Zealand owned like Kiwibank but owned by the New Zealanders that bank with them.
3 Growth and Maturity of the Industry
New Zealand banks have enjoyed strong growth in lending since the 2008 global downturn. Profits however, are down due to “increasing regulatory pressures and strong competition in the lending market” (KPMG, 2013). 4 Operational Revenue and Profitability
At the end of 2013 financial year, the bank recorded profits before rebate at $8m (The Co-Operative Bank, 2013). $1m of this was distributed to customers. As at 31st December 2013 operating revenue reached $4.3m (The Co-Operative Bank, 2013). 5 Strategic Goals
The Co-Operative Bank has an overall strategic focus on “achieving long-term profitable growth, based on co-operative principles (The Co-Operative Bank, 2013). 6 Target Marketing
The Co-Operative Bank targets those in the tertiary segment who are motivated by “good values”. These students, generally 18-25, will be those who are wary of the other big banks and the values they stand for. They will consist of students who are above the other banks “gimmicks” and would rather see their money buying some “goodness” rather than get free fries, for example, from a controversial multinational. They will have a solid “student” lifestyle with a low income, low outgoings and will generally not have any dependants. 7 Market Positioning
The Co-Operative Bank occupies a distinctive position in the market. While its competitors try to outdo each other with clever marketing and competitive rates they are, compared to other industries, barely distinguishable from each other. As shown in Figure 1, the Co-operative Bank occupies a position that is relatively separated from its competitors in terms of perceived cost and on a values based analysis.
Figure 1 – Positioning of New Zealand Banks
This position clearly demonstrates to their target audience that they are set apart from their competitors as an alternative to banking in system where banks are driven by profits for their (often overseas) investors rather than by the values of and profits for their New Zealand owners/customers. Section 2
8 Communication Strategy
Since the bank’s rebrand in 2012 the bank has focused its communications on improving low awareness. It is spearheaded by the message “driven by your prosperity, not our profit”; this focus will help the bank achieve its goal to double its customers within 5 years (StopPress, 2014). The key message the bank wants to convey to its target audience is that it is a values-driven bank that plays fair in a banking landscape that is thought of as the opposite.
They use a brand image strategy to convey that although they are able to take calculated risks for the benefit of their customer-owners, they want their audience to know they want their activities to be transparent and “above the line”. The main symbol used by the bank is the infinity sign that consists of the 2 O’s in Co-Operative Bank, known as the “prosperity loop”- See figure 2. The loop is conveniently extracted from the banks name and symbolises its goal of creating prosperity, not profit, between the bank and its customer-owners with the benefits flowing between the two entities. This symbol associates potential customers with the brand and its objectives of “being about mutual benefit and true sustainability. (The Co-Operative Bank, 2014, p. 2)
Figure 2- The Prosperity Loop
The loop is replicated though all forms of media advertising further insisting to its customers an ongoing sense of mutuality and support. In print media, the loop headline type treatment overlays both the heads of customers or their children and links them to the bank’s message, connecting a potential customer’s emotion to the advertisement. The loop could so be seen to symbolise a thought bubble, further personifying the banks message.
– See figure 3
Figure 3- Print Advertisement
This advertisement takes queues from thought leadership marketing as it shows a young, seemingly wealthy man thinking positively about the banks differentiation strategy. As this man represents a lifestyle students aspire to participate in and the target market can now link him to the Co-Operative bank. In theory, students will be more likely to think positively about, and possibly join the bank. This links back to the banks goal of doubling its customer base in five years and helps the bank on their way to achieve it. Another brand association used is the companies colour palette. The palette is distinctively fresh and focuses on a bright green colour – see figure 4. This associates the brand with being fresh and distinctive as well as with growth. Green is prolific throughout the brands communications and is often shown in a natural context.
This is important to the brands image as it reflects on New Zealanders emotions as a “clean, green” nation and may help the target market to associate with the bank as an extension of their patriotism. Also the mix of the colour green as a symbol of natural growth and money is a reflection of the bank’s views on sustainable banking. Further, it associates this idea to the Co-Operative Bank’s brand and reinforces to tertiary students that their principles will bring “growth” to their “money” in a sustainable way. This is particularly relevant to the target market who currently have low incomes but potential to growth their worth in the next few years. For them it means the bank is on their side and wants to work with them to grow their money in a sustainable way.
Figure 4- Colour Palette
9 Media Strategy and Appropriation
The company, carrying out its awareness strategy for growth, used a broad mix of media mediums including a focus on print but also consisting of a television spot, radio advertising, and limited social media (Facebook, Linked in and YouTube) to target a wide range of possible customers (StopPress, 2014). The campaign is centred on presenting the banks differentiation from other banks as a New Zealand owned bank and the fact it is 100% owned by its customers. Although there was no media directly targeting tertiary students, the Co-Operative Bank’s mix of mediums will have some effect on this target market. Using a universal strategy, as in this case, the bank reaches a large amount of potential customers. It also provides the bank with economies of scale.
As a small bank, although not ideal, this strategy is relatively appropriate as, there is limited budget for large scale advertising. The bank has opted to pull resources together rather than loose budget to smaller and perhaps less successful strategies. This is at the cost of targeting specific demographics, such as the tertiary target market, with media strategies tailored to their particular motivations but allows the bank to target all New Zealanders who feel strongly about banking with a New Zealand bank that shares profits with its customers. The content of the advertising draws on emotional strategy and uses a lot of patriotic imagery such as beach scenes, trout fishing, and office and cafe culture.
These are scenes of New Zealand culture that rouse patriotism in most New Zealanders and this helps the bank not only reach people who will be interested in how the bank functions due to their patriotism but inform others of the benefits of joining the bank. This is appropriate for the bank as it is harnessing current events (such as the class action against fees and the 2008 global downturn that have caused a cultural shift in New Zealand society in that people are more sceptical of banks) and building on the emotions they feel . It is therefore prudent for the bank to target the majority of society as the majority of society will be motivated by this emotion to join the bank. Section 3 – Recommendations and Evaluation
1.Increase top-of-mind awareness level of the Co-Operative bank within the tertiary market by 50% within the next 12 months 2.Increase knowledge within the tertiary market about the benefit of “owning” the bank they are banking with by 50% within the next 12 months 3.10% of tertiary market seek information about or interact with the Bank within the next 12 months.
The weakness of the Banks current IMC plan lies in the fact that it has not tailored the plan to target specific groups such as the tertiary market. This suggests that the relationship between The Co-Operative Bank and its tertiary customers is not as connected as it could be. To improve this, the bank does not necessarily have to change its message because as outlined prior, the patriotic and anti-status quo message used by its current offering will appeal to this market and also make the most of the banks industry-relative limited budget. The bank instead should work on making these messages more accessible to the tertiary market in order to improve the communication lines of the banks already strong message.
Include tertiary market specific imagery in print advertising There is a lack of tertiary specific imagery used by creative in the print media. There are a variety of children and young professionals and although some students may see these people as aspirational, they may also feel excluded and therefore disconnected from the banks message as the images are unrelateable to them at their current age.
Create an active twitter account that backs up the banks brand image but also feels like it is maintained by a tertiary student. It will post breaking banking news and intelligently debate key players in the banking industry. Create a presence on campus by locating brochures at campus student finance offices Make brochures available that provides step by step financial planning for students that is branded with Co-Operative bank. The brochures will also provide information about the Co-operative’s services. The content will be so effective that campus financial planners will recommend them to students. This will increase student’s knowledge about the bank.Change billboards near tertiary institutions to have very tertiary student age appropriate creative. Add a scene to the television spot that is directly relatable to by a majority of tertiary students. The advert currently has scenes that will appeal to only a select part of the target market i.e office employees and trout fishers. Adding a tertiary related scene with strong tertiary markers will strengthen the banks relationship with students as they will feel included in their advertising.
Promote banks message at campus fairs.
Sponsor tertiary events
12 Promotional Mix Recommendations
12.1 Public Relations
The bank will start a campaign called “Community Loop” drawing from the banks logo and its community based values. Tertiary students will be selected to spend a day in the life of community organisations with a particular emphasis on organisations that support the interests of tertiary aged students such as canteen and be followed by a documentary team.. The outcome will be a documentary series posted on Community Loop’s YouTube. These videos will expect to be picked up by local media and be interesting enough for students to want to share on YouTube.
12.2 Personal Selling
At campus events, the bank would loan its employees to event to handle the financial aspect of the event and at the same time inform students of the banks offerings- supporting and promoting the banks message that it works within the community in a positive way. For example, at the “Uni Games”, Co-operative Bank employees in “community loop” uniform will handle ticket processing at the gate and have the “community loop” marquee providing shelter for students. Employees will hold conversations with students about the banks offerings and message. Such a presence evokes brand awareness within in the student community and at the same time, shows off the banks tertiary product.
12.3 Sales Promotion
The bank stands out among other banks as it does not offer students “gimmicky” promotions with its package – See appendix 1. There is an opportunity here for the bank to offer a promotion to students that does not seem as lightweight and also gain attention of the students who are likely to switch to the bank because of its message. The promotion will support the banks community centred message and feature a system wherein if you sign up you get a free stationary pack (bio-degradable and from sustainable sources) and a child from a low decile school in the local area also gets a pack. The stationary will feature the banks “Community Loop” logo.
13.1 Objective-and-Task Method
The bank would use an objective and task method to specify the role advertising will play for the Co-operative brand and, the budget has been set accordingly. This method has been chosen as it allows the bank to focus on the objectives based on the needs of the bank and therefore reinforce the bank’s strategy rather than the needs of other factors such as what competitors are doing or how much they can afford. ItemDescriptionEstimated CostTotal
Industry specific imageryPhoto Shoot2,000 (aphotoeditor, 2009) 2,000
Poster design500 (Web Designer Forum, 2009)
Brochures at Campus Financial officeBrochure design500 (Web Designer Forum, 2009) 3,000
Content250 (Done internally)3,250
Distribution250 (PBT Frieght, 2013)
Tertiary Scene on Television SpotVideo Shoot3,500 (aphotoeditor, 2009) 7,000
Editing500 (Web Designer Forum, 2009)
Community Loop DocumentaryProduction Team 10,500 (aphotoeditor, 2009) 18,000
Community Loop tertiary eventMarquee1,000 (Ali Baba, 2014) 19,000
Sign writing 250 (Australian Signs, 2014)
Community Loop Uniforms500 (Ali Baba, 2014)
Community Loop StationaryStationary7,000 (PBT Frieght, 2013) 26,750
Delivery1,000 (Printing.com, 2013)
To understand whether the IMC objectives have been fulfilled and analyse results the Bank can use the following methods; Burke Day after recall testing
This is a measure of recognition and recall and will measure objective 1. It measures how well a magazine advertisement has performed in getting people to identify if they recall having seen the advertisement previously and therefore are aware of the bank. The participant will be given the banks name and then a day later asked what they thought of their offerings. The bank will choose tertiary students for the trial and have them perform the task before and after the new IMC plan in order to understand the difference made. Buzzone Tests
This is a measure of recognition and recall and will help the bank measure objective 2.This will be carried out with tertiary students and measure their recognition of the television advertisement both before the new IMC plan and post. This test is chosen as the Bank will gain information on how relevant the advertisement is for them and measure how Econometrics
Econometrics will be used to show the correlation between members of the target market interacting with the bank and their interaction with the banks promotional material. Models are constructed from past data collected from a survey of tertiary students and future models can be predicted. This will be used to gain measurable information about objective 3.
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http://www.australiasigns.com.au/onlinepricing/pricing.htm KPMG. (2013). Financial Institutions Performance Survey. Auckland: Massey University. PBT Frieght. (2013). PBT Fright Costings. Retrieved 5 19, 2014, from PBT Frieght: http://www.pbt.co.nz/default.aspx Printing.com. (2013). Printing.com Prices. Retrieved 5 19, 2014, from Printing.com: http://www.printing.com/nz/prices StopPress. (2014). StopPress. Retrieved 05 13, 2014, from http://www.stoppress.co.nz/blog/2013/07/co-operative-bank: http://www.stoppress.co.nz/blog/2013/07/co-operative-bank The Co-Operative Bank. (2014). News Letter. Wellington: The Co-Operative Bank. The Co-Operative Bank. (2013). The Co-Operative Bank Disclosure Statement. Wellington: The Co-Operative Bank. Web Designer Forum. (2009). webdesignerforum. Retrieved 5 20, 2014, from webdesignerforum: http://www.webdesignerforum.co.uk/topic/36794-how-much-to-charge-for-poster-design/