Hsbc Case Essay
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HSBC is known as the “World’s local bank”. Originally called the HongKong and Shanghai Banking Corporation Limited, HSBC was established in 1865 to finance the growing trade between China and the United Kingdom. HSBC is now the second largest bank in the world, serving 100 million customers through 9,500 branches in 79 countries. The company is organized by business line (personal financial services; customer finance; commercial banking; corporate investment banking and markets; private banking), as well as by goegraphic segment (Asia-Pacific, U. K. /Eurozone, North America/NAFTA, South America, Middle East).
Despite operating in 79 different countries, the bank works hard to maintain a local feel and local knowledge in each area. HSBC’s fundamental operating strategy is to remain close to its customers. As HSBC chairman Sir John Bond said in November 2003, “Our position as the world’s local bank enables us to approach each country uniquely, blending local knowledge with a worldwide operating platform”. For example, consider HSBC’s local marketing efforts in New York City.
To prove to jaded New Yorkers that the London-based financial behemoth was “the world’s local bank. HSBC held a “New York City’s Most knowledgeable Cabbie” contest. The winning cabbie gets paid to drive full-time for HSBC for the year, and HSBC customers win, too. Any customer showing an HSBC bankcard, checkbook, or bank statement can get a free ride in the HSBC-branded Bankcab. The campaign demonstrates HSBC’s local knowledge. “In order to make New Yorkers believe you’re local, you have to act local,” said Renegade Marketing Group’s CEO Drew Neisser. Across the world in Hong Kong, HSBC undertook a different campaign.
In the region hit hard by the Severe Acute Respiratory Syndrome (SARS) outbreak, HSBC launched a program to revitalize the local economy. HSBC “plowed back interest payments” to customers who worked in industries most affected by SARS (cinemas, hotels, restaurants, and travel agencies). The program eased its customers financial burden. The bank also promoted Hong Kong’s commercial sector by offering discounts and rebates for customers who use an HSBC credit card when shopping and dining out, to help businesses affected by the downturn. More than 1,500 local merchants participated in the promotion.
In addition to local marketing, HSBC does niche marketing. For example, it found a little-known product area that was growing at 125 percent a year : pet insurance. In December 2003 it announced that it will distribute nationwide per insurance through its HSBC Insurance agency, making the insurance available to its depositors. HSBC also segments demographically. In the United states, the Bank will target the immigrant population, particularly Hispanics, now that it has acquired Bital in Mexico, where many migrants to the United States deposit money.
Overall, the bank has been consciously pulling together its worldwide business under a single global brand with the “World’s local bank” slogan. The aim is to link its international size with close relationships in each of the countries in which it operates. The company spends $600 million annually on global marketing and will likely consolidate and use fewer ad agencies. HSBC will decide who gets the account by giving each agency a “brand-strategy exercise. ” Agencies will be vying for the account by improving on HSBC’s number 37 global brand ranking