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Abbey Lesson Plan from The Times 100 website: www.tt100.biz Abbey Marketing Strategy http://www.thetimes100.co.uk/case_study.php?cID=47&csID=95 Overview This lesson is based around the case study on Abbey. The case study looks at the change in approach at Abbey following market research. Learning objectives to distinguish between product led and customer led organisations to examine the transformation of Abbey from a product led to a customer led business. Introduction (1 minute) Introduce the lesson: Abbey National recently changed its image. This lesson will consider why this change occurred and how it was communicated. Market led v product led (14 minutes) Student task: Ask students to read Section 1, paragraph 1-2 and write answers to the following questions: Distinguish between customer led and product led organisations (e.g. in a customer led firms make decision based on market requirements; product led firms focus on their own needs) In what way is the financial services market product led? Why does a marketing strategy need to be focused on meeting the needs of customers, and hence be driven by market research? What are the dangers of being product led rather than customer led? Split students into teams; some to look at change of Abbey and some to look at the Big Bang (below). Results to be fed back and notes given to everyone. Change at Abbey (15 minutes) Highlight the changing nature of markets and the need for firms to change to meet new customer needs. Can students think of any examples of firms or products that have changed recently? Why do they think these changes occurred? (e.g. may be new brands, changed name, etc). Given changes in the market Abbey has adopted a new marketing strategy. Discuss what a marketing strategy should be based on (e.g. assets, target group, competitors, objectives, etc). Student task: Read section 1, paragraph 3 and answer the questions. Why did Abbey undertake market research in 2003? (e.g. it was making substantial losses and need to relaunch itself and freshen up its image; wanted to become the UK’s leading personal financial services provider). What was the result of the market research? (renamed to Abbey, signalled a change in approach). Ask students to comment on the change in name and the look of Abbey, what do they think this conveys? OR Big Bang (15 minutes) Change can occur for many reasons e.g. new competitors or new products. In the financial services market a major change occurred in 1986 due to development in government legislation. This was called the Big Bang. Visit www.tt100.biz for Downloads - Theory - Quizzes - Company Info - Current and Previous Case Studies Abbey Lesson Plan from The Times 100 website: www.tt100.biz Student task: Read section 2 and write answers to the following questions. What was the Big Bang in the financial services sector? (opened up competition in the market). What was the result of the Building Societies Act? (enabled building societies to become banks). What was the consequence of building societies becoming public limited companies? (could raise additional finance). SWOT analysis (15 minutes) A firm’s marketing strategy should result from a SWOT analysis. Explain what a SWOT analysis is. Student task: Does a SWOT analysis enable an organisation to develop an appropriate marketing strategy? To what extent is Abbey’s marketing strategy influenced by the competitive environment in which it operates? Communication ( 15 minutes) As a result of its research Abbey introduced a number of changes including clearer communications, reducing financial jargon and offering fewer accounts. Student task: students to read section 5 and 6. How has Abbey restructured its communications to the benefit of customers? Link q6 Why is the reduction or elimination of financial jargon seen as being an important part of the marketing strategy? Link q9 Homework 1. 2. 3. Complete the worksheet on this case study. Discuss the possible value of better communications between Abbey and its customers. (e.g. more satisfied customers, less wastage, better understanding of customer and employee needs; however still have to act on their findings). To what extent is a change in the name of a business (such as Abbey National to Abbey ) desirable? (e.g. could examine this from different stakeholder groups, depends on purpose and cost, depends on effectiveness of new name and impact on e.g. sales). Visit www.tt100.biz for Downloads - Theory - Quizzes - Company Info - Current and Previous Case Studies Abbey Lesson Plan from The Times 100 website: www.tt100.biz Abbey Marketing strategy Questions and Answers Why does a marketing strategy need to be focused on meeting the needs of customers, and hence be driven by market research? Marketing involves identifying, anticipating and meeting the needs and requirements of customers. The best way of doing this is to find out what the customer wants through a process of market research. Market research provides the opportunity to find out about the perceptions and requirements of consumers. What are the dangers of being product led rather than customer led? Customers buy the products and services a business offers, they therefore generate business revenue. A business failing to listen to customers, will lose out to rivals that are more in tune with customer requirements and who therefore gain market share. How does a SWOT analysis enable an organisation to develop an appropriate marketing strategy? The SWOT analysis enabled Abbey to identify its strengths so that it could build on its expertise in financial services/personal banking. At the same time it was able to develop the opportunity of making banking services easier to understand for customers. It is rising to the challenge of aggressive competition from rivals by creating clear communications messages that are targeted at its new range of products and services that are customer focused. To what extent is Abbey’s marketing strategy influenced by the competitive environment in which it operates? Abbey operates in a competitive market made up of many rival firms offering financial services. Abbey has therefore needed to develop a strategy that differentiates it from rivals. As the sixth largest bank provider it makes sense to focus on differentiation. A weakness in most competitors is that they continue to be product led, being customer led is thus a highly effective strategy. How has Abbey restructured its communications to the benefit of customers? Abbey has created customer focused communications as a key element of its marketing strategy. Literature is presented in a simple, clear and easy to understand way, and the range of products offered have been simplified to aid this communication strategy. Why is the reduction or elimination of financial jargon seen as being an important part of the marketing strategy? Communication within the financial services sector is riddled with confusion so that customers are not clear about the messages that are being presented to them. Abbey has therefore sought to cut out the jargon, and has focused on 3 simple types of savings product and 3 simple types of mortgage products that customers are able to understand and make an appropriate choice from the available menu. Visit www.tt100.biz for Downloads - Theory - Quizzes - Company Info - Current and Previous Case Studies