product innovation & management

Presented by: Kevin ChettyCommercial Director

PRODUCT INNOVATION & MANAGEMENT PRODUCT INNOVATION & MANAGEMENT FOR FINANCIAL INSTITUTIONSFOR FINANCIAL INSTITUTIONS

GAME 1

THE LONGEST JOURNEY IS TAKING THE FIRST STEP

23-04-10

I WANT

SBAF Private Card delivers the benefits & enhancements desired by the Private Bank Client

INTRODUCTION

Topic Presenter Delegates Workshop Ground Rules Workshop Expectations & Objectives

6

AGENDA

Day 1 Session 1: Stimulating the Innovative Creative Juices

Session 2: Competitor Analysis in a Competitive Environment

Session 3: Financial Analysis, Pricing Strategy & Risk Analysis

Session 4: Customer Segmentation

Session 5: Market Research

9

Developing a compelling product proposition forms the heart of any business strategy

“Strategy is based on a differentiated customer value proposition, and satisfying your customers is the source of

sustainable VALUE creation” Robert Norton & David Kaplan

WHAT IS INNOVATION?

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• The process by which an idea or invention is translated into a good or service for which people pay or something that results from this process

• To be called an Innovation an idea must be replicable at an economical cost and must satisfy a specific need

• 2 types of innovation:

• Evolutionary Innovations: Brought about by gradual changes in technology or processes and have 2 types:

• Continuous Evolutionary Innovations – result in alternations in a product or process characteristic instead of NEW product, e.g. Laptop computers, fluoride toothpaste• Dynamic Continuous Evolutionary Innovation – requires some user-learning, but does not disrupt his/her routine

• Revolutionary Innovations: Require a good deal of user-learning, often disrupt routine, create new behaviours, e.g. Photocopier, personal computers, internet. Greater RISK taking, NEW Product, hence NEW markets

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4 LEVELS OF INNOVATION

FATHER OF INNOVATION....?

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• “We used to dream about the stuff, know we get to build it, its pretty neat….”

• “We are gambling on our vision, and we would rather do that than make ‘me to’ products……”

• “Its more fun to be a ‘pirate’ than to join the navy……”

• “And 1 more thing........”

• “I think if you do something and its turning out pretty good, then you should go do something else wonderful, not dwell on it to long, just figure out what’s next..”

GAME 2

WHAT IS PRODUCT MANAGEMENT?

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It is a Systemic, holistic business management of products & Services

MARKETING

SALES

IT/OPERATIONS

MARKETING

FINANCE

23-04-10

TRADITIONAL PRODUCT LIFE CYCLE

SESSION 1: Stimulating the Innovative Creative Juices

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YOUR CREATIVE FORCE: AN UNTAPPED POTENTIAL

• I define Creative Force as the power to create that flows through all of us!!!!!

• Some people, creativity is a rare skill, but in my experience we all can and have a creative

being waiting to explode in each one of us….TAP INTO THIS AS A TEAM/GROUP

• Creativity is NOT about games or play, it must be approached with respect – because it is a powerful thing – perhaps the most powerful thing

• When you use your natural creative power to innovate in your own life or to bring innovations to the lives of others, you’re quite capable of changing our world

1. Background

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LEADING WITH CREATIVE VISION• Defining an innovative goal to motivate your team

• Exploring your leadership orientation and style

• Building leadership experience

• Setting the right tone for creativity

• Creating an ‘Innovative Hub’ group

• Setting ambitious goals

• Leadership through Ethics & Innovation

• Recognizing NEW ideas

• Getting ongoing feedback from customers

• Acknowledge mistakes/catastrophes

1. Background

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THE CREATIVE THINKING PROCESS

1. Background

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THE CREATIVE THINKING PROCESS

1. Background

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CREATIVE MARKETING PENTAGON

1. Background

HAPPY SURPRISES

EXPECTED CORE

PRICINGPEOPLE

PR

OM

OT

ION

PRODUCT

PL

AC

EM

EN

T

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NARROWING YOUR FOCUS TO FIND SOURCES OF CREATIVE ADVANTAGE

1. Background

PRODUCT • Innovate to offer a better product, design, technology, packaging or other related innovations• If you cannot afford to invest the next hot product, be on the look out for it, and become a reseller

PRICING • Find ways to drive costs down and offer lower prices, or explore creative ideas to take some of the sting out of buying, such as by offering loyalty programs, layaway, innovative warranties etc

PLACEMENT • Distribute your products in helpful new ways (via the Internet, Mobile Sales, Cell Phones, Social Media, etc• Distribution is the key easiest way to score a home run

PROMOTION • Find clever, attention grabbing ways to communicate with buyers and build brand equity

PEOPLE • Engage free help through social media by getting people to talk about your brand, product, service, etc

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BEING AN INNOVATIVE STRATEGIST

• Expanding into new geographic regions

• Pursuing new types of customers

• Improving or adding to your product line

• Introducing a new technology or invention

• Partnering with one or more other organizations to something you cannot do yourself

• Dramatically reducing your costs or turnaround time by innovating how you source or produce your products or services

• Distributing in new ways to save money, time, increase market coverage or provide greater ease and availability of purchase

• Updating or replacing your brand name with something more dynamic

• Influencing strategy from bottom-up

1. Background

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STRATEGIC INNOVATION CYCLE THAT DRIVES ORGANISATIONAL SUCCESS

1. Background

Efficient Production

Strategic Phase

Creative Searching

Winning InnovationIdentified

Innovation Boost Profits

Firm shifts phase as it scales up to profit

from invention

Firm maximises production

Profits Peak as Market Saturates

Firm needs to shift to back innovation will it phase shift in time???

Growing

Profit Momentum

Slowing

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TRACKING THE LIFE CYCLE OF A PRODUCT CATEGORY

1. Background

Creative Searching

Innovative Product is Introduced

Sales Gain Momentum

Market Begins Saturate

Sales & Competition gets Cutthroat Either Improvement

revives Sales

Until Market Saturates Again

Introduction Growth Maturity Decline - Revival Death

Or Some New Invention replaces product

????

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AN INNOVATORS PORTFOLIO OF PRODUCTS

1. Background

Profitability

High

Low

High Low

Maximise Update

Develop Eliminate

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MIND MAPPING (CRAFTING THE IDEA)

1. Background

IDEA

SESSION 2: Competitor Analysis in a CompetitiveEnvironment

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NEW PRODUCT DEVELOPMENT IN A COMPETITIVE ENVORONMENT• Managing NPD in a dynamic environment is a complex task

• Using a competitor to make more informed decisions around NPD/Innovation

• NEW product launch and later more ADVANCED

• In a highly competitive market banks can adopt different technologies/products & use TIMING to mitigate the risk of price competition

• Banks can invest in advanced technologies/products to influence a rivals choice – 1st to market

• Must explore product flexibility, if NEW product fails, then resort to OLDER one

• Introducing a NEW product in a any competitive industry is difficult

• In competitive industries (financial services), product introduction timing is a function of external factors like market conditions and industry clock-speed

• Timing is KEY or banks lose market share

• SHOP the competition, COMPETITOR MATRIX

1. Background

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NEW PRODUCT DEVELOPMENT IN A COMPETITIVE ENVORONMENT• It is important to understand the competitive market insights through ongoing research

• Without market intelligence, it is challenging for banks to react appropriately and competitively

• Leadership must understand that:

• Market segments in which they operate• Every customer type (buyer, user, influencer, or decision maker)• Changing preferences of various customer types• Industry environment in which banks operate• Each and every competitor in the industry and how each product is positioned

against each competitors product

• Undertake some sort of PESTEL analysis, as this will provide impetus for strategic decision and spend on growth/products

• Undertake a SWOT analysis of your products vs. the competitors

1. Background

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PRODUCT SELECTION & MARKET COMPETITION

1. Background

TIMING

QU

ALIT

Y

BANK 1

TIMING

QU

ALIT

Y

BANK 2

PRICING / PRODUCT DEVELOPMENT

PRICING / PRODUCT DEVELOPMENT

COMPETITIVE MARKET

DE

VE

LO

PM

EN

T D

EC

ISIO

NM

AR

KE

T D

EC

ISIO

N

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THE COMPETITION

1. Background

COMPETITIOR ANALYSIS

COMPETITIOR POSITIONING

COMPETITIVE PRODUCT

EVALUATION

COMPETITIVE STRATEGY

CRITICAL THINKING

STRATEGIC MINDSET

CRITICAL THINKING

STRATEGIC MINDSET

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COMPETITOR ANALYSIS TEMPLATE

1. Background

FACTOR MY BUSINESS STRENGTH WEAKNESS COMPETITOR A COMPETITOR B COMPETITOR C IMPORTANCE TO CUSTOMER

Products

Price

Quality

Selection

Service

Reliability

Stability

Expertise

Company Reputation

Location

Appearance

Sales Method

Credit Policies

Advertising

Image

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COMPETITIVE PRODUCT EVALUATION

1. Background

• Competitive evaluations will help determine:

• Products & costs in the market

• Quality of products available

• How to measure those products

MOST COMPARABLE………BEST OF BRANDS………AVAILABILITY OF PRODUCTS……..PRODUCT SERVICES AVAILABLE……..COSTS OF

PRODUCT/S

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COMPETITIVE POSITIONING

1. Background

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COMPETITOR STRATEGY

1. Background

COST LEADER • Firms goal is lowest price• Source of cost advantage must be fully exploited• Above average performer on products

DIFFERENTIATED LEADER

• In differentiated strategy firms seek to be unique• It selects 1 or more attributes that buyers want and uniquely positions itself to meet this• Uniqueness attracts premium price

FOCUS LEADER • Focus on narrow & competitive industry• Firm selects a segment or group of segments in industry and tailor makes solution

VIDEO: FUTURE OF BANKING

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RETAIL BANKING A REALITY

The traditional retail bank is at an inflection point. The needs and expectations of customers are changing as quickly as the competition. Customers are demanding seamless, multi-channels, with better products and services. Simultaneously, other financial institutions and non-traditional players are looking for opportunities to invade this space or to redefine it through disruptive innovation.

The result is forcing banks to examine a more balanced, integrated approach to product management and innovation,

to ensure sustained growth

1. Background

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AN EVOLUTION or REVOLUTION TO FIND YOUR SPACE

1. Background

Global banking more competitive

The IT revolution

Information explosion

Rationalisation of branches in 1990’s

Banks are trying to become one-stop financial supermarkets

THE CHANGING FACE OF BANKING

In view of several developments in the 1990’s, the banking industry is changing …

How did banks respond?o Distribute more PRODUCTS & SERVICES through other ways

and channels …o … proliferation of non-traditional banking channels

1. Background

Key macro econ trends

Macro economic environment outlook is moderate

Customers

Use a wide range of financial products

Proliferation of distribution alternatives

Regulation

Tier 2/3 legislation

National Credit Act

Competition Commission

Lower commission earnings

Market landscape

Competitors becoming increasingly aggressive

Alliances and joint ventures

Banking environment

A COMPETITIVE LANDSCAPE e.g SOUTH AFRICA

1. Background

VIDEO: BANKING 2.0

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RAISING THE GAME IN RETAIL BANKING

Booz Allen’s research shows there are clear opportunities to enhance revenue in retail banking. Going forward retail banks need to be INNOVATIVE, thro:

o Provide dedicated channels (website, call centre, mobile sales forces and specialist areas in branches) for affluent customers.

o Reduce waiting times in branches through the use of welcome desks (concierge concept) and the option of making appointments in advance.

o Efficient call centre menus and staffing that enable customers to quickly reach people who can resolve their queries.

o Enable customers to tailor websites, supported by strong security measures (e.g. random number generators).

o Offer mobile sales advisers who can complete transactions at the meeting, for selected customer groups

o Products that are understandable and easier to transact

Source: Reference Booz/Allen/Hamilton - Striving for Growth, Best Practices in Retail Banking Sales and Service Channels

1. Background

THE 6 DYNAMICS CUSTOMER FOCUSIn the EVOLUTION of retail banking channels, the 6 dynamics are critical to developing effective CUSTOMER FOCUSED strategies:

• Branch generated revenue growth is becoming more challenging

• Transaction processing and customer services are becoming increasingly independent of the branch channel

• Customer demographics are shifting

• New technologies are gaining widespread adoption, allowing customer relationship management to become channel independent

• Changes in the regulatory environment are altering the playing fields

• Banks must prepared for overlapping competition (Non-Banking Entities)

•Innovative Products & Services from competitors

1. Background

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WHAT DO CUSTOMERS WANT? NOT WHAT BANKS……

1. Background

SESSION 3: Financial, Pricing & Risk Analysis for New Products

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FINANCIAL ANALYSIS

1. Background

Product performance and financial analysis, thereof is critical to make an informed decision/s

Historical data is key together with REAL market facts

Analysis of future scenarios is also KEY – FINANCIAL FORECASTS – short & long-term About estimating sales volumes About estimating direct and indirect costs Ultimately the profitability Ultimately the market share position of the product line/s

Must have product level overview of financial performance

Product Mangers must have complete accountability for the P/L of product/s

Product Managers must understand the financial implications to make informed decisions

Identify the most profitable and unprofitable customers

Understand the ‘Drivers’ of revenue performance

Use financial analysis to understand competitors

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FINANCIAL ANALYSIS: PRODUCT SALES ANALYSIS

1. Background

Defined as, “ gathering, classifying, comparing and study of company sales data”

Sales analysis is a powerful tool

Major components of Sales Analysis:

How are sales defined

In what units can sales be analysed

In what category can sales data be placed

What are the appropriate standards in which sales can be compared?

Some of the Pitfalls:

IT systems are NOT designed by Product Managers

Financial Managers have different mindsets

Lack of understanding of all cost related to a product/s

Lack of understanding of proper financial forecasting

Predictive analysis

Lack of proper internal marketing by PM

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FINANCIAL ANALYSIS: AN EXAMPLE

1. Background

Financial Model

Assumptions

Income of the Product

Direct Costs

Indirect Costs

5 Year Forecasts

NAV

ROI

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PRICING STRATEGY

1. Background

MUST FIND WAYS TO DRIVE DOWN COSTS AND OFFER LOWER PRICES OR EXPLORE CREATIVE WAYS TO ATTRACT, RETAIN AND GROW YOUR CUSTOMER BASE, E.G. OFFERING LOYALTY

PROGRAMS, VALUE ADDED SERVICES, INNOVATIVE WARRANTIES

PRICE FOR PROFIT

Cost Based:• Fixed Costs• Cost plus mark-up• Still widely used• Makes it easier to predict profit margins

PRICE FOR RELATIONSHIP

Customer Focused:• Penetrating pricing, e.g. “Special Introductory Offer”• Used to encourage customers to switch to your product• Associated with marketing strategy to increase market share/sales volumes• Price skimming, charge high prices before competitor enters, e.g. LCD TV’s in early 2000’s

PRICE FOR DEFENDING YOUR POSITION

Competitive Pricing:• Set price similar to competitors• Differentiated strategy• How thro VAS

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RISK MANGEMENT

1. Background

Innovation entails RISK at any point or juncture, so invest in R&D as part of business objective

If you are NOT innovate it is construed as putting your organization or business at risk

As a leader or manager you must be alert to the following: Technological changes can blindside you so keep abreast of these changes in technology

Financial investments can turn into RISKY investments if a project/product proves to be too costly

Protect your idea or IP

Manage your business product line tightly

An attitude of being the BEST can be a RISK, as you become complacent and

may drop the BALL on innovation or product lines

SESSION 4: Segmentation

VIDEO: MARKET SEGMENTATION

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OVERVIEW CHICKEN or THE EGG… Chicken or the Egg scenario, which comes first Strategy or Segmentation?

Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, and so on. Using segmentation allows banks to target groups effectively, and allocate marketing resources to best effect

Traditional segmentation focuses on identifying customer groups based on demographics and attributes such as attitude and psychological profiles

Value-based segmentation, on the other hand, looks at groups of customers in terms of the revenue they generate and the costs of establishing and maintaining relationships with them

Customer segmentation procedures include: deciding what data will be collected and how it will be gathered; collecting data and integrating data from various sources; developing methods of data analysis for segmentation; establishing effective communication among relevant business units (such as marketing and customer service) about

the segmentation; and implementing applications to effectively deal with the data and respond to the information it provides

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SEGMENTATION GROUPS

DowngradingPreferredGrowthPattern(Upgrading)

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SEGMENTATION GROUPS - CORPORATE

PreferredGrowthPattern(Upgrading)

Downgrading

57

SEGMENTATION METHODS

Geographic variables

Demographic variables

Psychographic variables

Behavioral variables

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SEGMENTATION CRITERIA - INDIVIDUALS

Geographic Variables

Will ABC use them?

DemographicVariables

Will ABC use them?

Psychographic Variables

Will ABC use them?

Behavioral Variables

Will a bank use them?

Region Yes Age/DOB Yes Personality ?? Product use Yes

Country Yes Gender Yes Lifestyle ?? Benefit sought Yes

Density/Suburb Yes Income Yes Value ?? Loyalty Yes

City/Town Yes Education Yes Social class ?? Credit use Yes

Postal code Yes Family size Yes Interests Yes

Occupation/Profession

Yes Account bal. Yes

Nationality Yes Memberships Yes

Religion Yes Risk profile Yes

Language Yes

Marital Status Yes

Race Yes

Residential status Yes

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SEGMENTATION CRITERIA - CORPORATES

Criteria Will ABC use the criteria?

Number of employees Yes

Industry Yes

Location Yes

Loan size (Use of credit facilities) Yes

Balance sheet size Yes

Company type (CC,Pvt) Yes

Profitability ??

Turn over ??

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SEGMENTATION CODES/IDENTIFIERS

Segment Primary segment Code Sub segment codes

HNI/Affluent 100 101+

Rising Affluent 200 201+

Middle Class 300 301+

Large Corporates 400 401+

Small to Medium Enterprises 500 501+

Small Enterprises/SelfEmployed Professionals

600 601+

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STEP 1

Define the full potential of the market

STEP 2

Assess the value of each customer

STEP 4

Assess which group of customers to target based on potential size, potential revenue (Life Time Value) and share of voice

STEP 3

Stratify or group customers based on their potential mix of usage

STEP 5

Assess per group of customers the unique attitude or behavioral variables of customers

STEP 6

Create segments of customers with the same needs values and wants

Assess the relative importance of each customer in terms of either the number of customers or usage•through sales visits / Market Data•What is the market we serve & who are all the customers who may benefit from our product?Are we missing anycustomers (I.e. those traditionally served by our competitors)?

•From where are the new customers coming? (I.e. what is the referral pattern / who refers? Based on what? •Identify in each stratus the new Life Time Value of the customer •Which competitors are targeting these same customers?

•Define the characteristics of each segment (e.g. average size/potential, key purchasing factors, ways to influence decision making)•what is the size of each segment?•Is it homogenous?•How do salespeople interact with customers in the market and what are the key market drivers?

•Ego driven, $ driven, convenience driven, service driven, scientific driven, etc...

Select the segmentation which most effectively groups customers with the same needs Your segmentation should offer each :

•Measurability - the size & purchasing power of the segments must be measurable

•Accessibility - it must be possible to reach & serve the segment

•Substantiality - the segments must be large & profitable

What questions do I need to answer and what do I need

to do?

How many customers are there in the defined market (validate source)

CUSTOMER SEGMENTATION PROCESS

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CUSTOMER SEGMENTATION PROCESS

What questions do I need to answer and what do I need

to do?

STEP 11

Develop for each customer in targeted segments a plan with an objective , tactics and action plans.

STEP 7

Validate the selected segmentation approach

STEP 8

Target the most attractive segments based on potential size and potential revenue

STEP 9

Which product / brand is being used by each customer in target segments (validate sources)

STEP 10

Decide on productpositioning for each of the targeted segments

•How easy will it be to convert customer in each segment segment to our products?•How responsive is the segment to marketing actions?•What would be the cost of serving the segment?•How are the competitors targeting these customers?•Evaluate attractiveness of each segment

· Check whether needs are being addressed

How to overcome the hurdles for using our products ?

• Assess cost for each action plan and decide whether it is feasible, to target the segment

•Review regularly whether the needs and wants are satisfied profitably

•Review regularly the size of the segments, the needs and wants of each customer.

Consider supporting evidence for your segmentation

Does the market really work the way you have segmented?

•Are the most successful competitors taking a different segmentation approach?

•What market data do you need to confirm current segmentation?

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MANDATORY FIELDS - INDIVs

Personal details Title Surname Middle names First name Gender Date of birth Residential status Home address Home telephone number Period at this address Postal address Country of residence Nationality Business Telephone Cellphone number

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MANDATORY FIELDS - INDIVs

Personal details cont,

E mail address ID number Passport number Expiry date Driver’s licence number Marital status Number of dependents Spouse’s name Spouse’s employer and address Preferred method of communication

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MANDATORY FIELDS - INDIV

Employment details Current employer and address Type of employment Occupation/Profession Occupation Title Length at current employer Monthly income Method of payment Banking details

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MANDATORY FIELDS

Previous employment details Name of previous employer Address of previous employer Occupation title

Next of kin Address of next of kin Relationship Declaration Signature and date

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OPTIONAL FIELDS - INDIVs

Level of education Family size Religion Home language Race Social memberships Interests/hobbies How did you come to know of ABC? Consent for ABC and associate companies to market other products

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MANDATORY FIELDS - CORPORATE

Company Name Company address Postal address Telephone numbers Nature of business Contact person Contact details (e mail,telephone,cell phone) Designation of contact person Company registration number VAT registration number Directors

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SEGMENTATION MONITORING TOLLS

Assessment

Observation

Statistics

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SEGMENTATION MATRIX

Retail BankingBusiness line Corporate Banking

SegmentPersonal Banking

Profes-sionals

SMEBanking

Privatebanking

Companies Non Gov.OrgGovernment

OrgFinancial

institutions

Sub Segment

Blue(Mass)

Gold(Affluent)

Maincustomer

Silver(Top Mass)

FamilyCluster

DoctorDentistPharmacistVets

LawyerNotaryOther

GeologistsArchitectsEngineers

Sports-PersonsJournalists

Micro enterprises

AccountantsAuditorsBus.& Fin.Consultants

Small enterprises

Medium corporate

Large corporate

Medium size enterprises

Multinationals

Local BanksForeign Banks

LeasingInsuranceMicroFinance

Pension FundsAsset Mgrs

ChurchesEmbassiesTrusts

Donor OrgPvt SchoolsPvt Hospitals

Pvt UniversitiesMBA Schools

ProvincesRegionsTowns

Cities

Gvt HospitalsGvt Schools

BuildingSocietiesInvestment BanksOther FIs.

Charitable OrgCivic BodiesOther NGOs

Gvt UniversitiesOther Gvt Orgs

Business line Retail BankingBusiness line Corporate BankingRetail BankingBusiness line

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CATEGORIES

Group Definition

Child 0-12 years

Youth 13-18 years

Student 19-28 years

Employees Any applicant who has an employment contract.

Housewives Non working spouse

Unemployed Unemployed (not self employed)

Self employed Any applicant who generates their own income for survival

XYZ employees Anyone employed by ABC

Associated Company employees Employees of ABC sister companies

Pensioners Former ABC employees who have retired

Gvt employees Any persons employed by Government (Civil servants)

Executives COOs, CEOs, CFOs, MDs, Executive Directors, GMs, FDs,

MBA/MBL/DBL Any MBA/MBL/DBL graduate

Professionals See list of professionals

Politicians Any persons holding a position of authority within a Political Party (Full time)

Pensioners Any person who has retired from formal employment and receives a pension.

Civil Leaders Civil Society Leaders, e.g. Mayors, Councillors, Judges, Magistrates,

Other

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INDUSTRIES & SEGMENTS

Real state Developers Estate Agents Prop.Mgrs Construction Prop.Inv.Cos

NGOs Donors Churches Embassies Civic Groups

Education Universities Colleges Schools Kindergartens MBA Schools Libraries

Fin.Services Local Banks Foreign Banks BuildingSocieties

Insurance Leasing Asset Managers

Traders Food Clothing Building Materials

Drugs Supermarkets Households

Agriculture Crop Farming Livestockfarming

ForestryAnd Logging

Horticulture Grains andOils seeds

Fertilizercompanies

Mining Precious stones

Quarry Mining Natural gas

Media Publishing Houses

Media houses Advertising Broadcasters

Transport Car Dealerships

Fleet owners Car plants StorageAnd Transport

Car hire ContainerLeasing

Tourism Hotels Lodges Airlines Travel agents Restaurants Safari Camps

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SEGMENTATION CRITERIA – SME & CORP

Segment Sub segment

Loan sizeNo of

employees TurnoverSector if

applicablefrom up to from up to from up to

SME

Micro enterprises $0 $10 000 0 10 $0 $40 000

Small enterprises $10 001 $100 000 11 25 $40 001 $400 000

Medium sizeenterprises $100 001 $250 000 26 100 $400 001 $1 000 000

Corporate

Medium corporations $250 001 $500 000 101 250 $1 000 001 $2 000 000

Large corporations $500 001 $1 000 000 251 500 $2 000 001 $4 000 000

Multinationals $1 000 001 501 $4 000 001

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SEGMENTATION CRITERIA – PERSONAL & PVT

Segment Sub segment

Income Liabilities Assets

Group if applicablefrom up to from up to from up to

Personal banking

Blue $0 $1 500 $0 $10 000 $0 $20 000

Silver $1 501 $5 000 $10 001 $20 000 $20 001 $50 000

Gold $5 001 $20 000 $20 001 $100 000 $50 001 $200 000

Private banking

Platinum $20 001 $40 000 $100 001 $500 000 $200 001 $1 000 000

Super Rich $40 001 $500 001 $1 000 001

GRCB Lead Generator Conference, London, 18 &

19 May 200875

Prof’s63 400

Yout

h

Entry-level banking

SeniorsCore Middle Market

Students

Retail Affluent

New to bank customers

Fina

ncia

l sop

hist

icat

ion/

LSM

New to bank customers

Unbanked

Staff

R36 000 pa

R120 000 pa

R300 000 pa

Micro Lending

CMM3.6m

ELB3.79m

Students105 000

Youth490 000

RA290 969

Absa retail acc customer base2

Note: 1 Source: Primary Bank Relationships – Amps ‘07 2 Source: Absa Internal reflecting all relationships: Dec 2007

R650 000 pa

Staff49 629

Seniors1.32 m

Private BankR15m NIA

Wealth

Black diamonds

CUSTOMER SEGMENTATION MODEL

Entry Level Banking up to Retail Affluent Segment

SESSION 5: Market Research Techniques

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MARKET RESEARCH TECHNIQUES

SURVEYS

• 1 to interviews• Telephone• Mail• Online

•Structured questionnaires• Structured• Objective• Larger the sample the better the results

FOCUS GROUPS • Group setting• Structured• Focused discussions• Observations

PERSONAL INTERVIEWS • 1 to 1• Personal biasness• Less objective

FIELD TRIALS • New product• “Real’ results• Help to modify product• Interact with segement/s

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WHY DO MARKET RESEARCH ????

FIND THE GAP

TEST YOUR ASSUMPTIONS

UNDERSTAND OTHER SUB-SEGMENTS

ITS ABOUT DIFFERENTIATION

TO CONTINUALLY

IMPROVE

GAME 3

SESSION 6: Some Examples on Innovation and Product Development

81

MOBILE SALES CAPABILITIES & DEPLOYMENT

Segmented Distribution Channel focus providing multiple options of delivery

Entry LevelBankingExternal Sales Points(ESP’s)Focus: Branch Hot Spots

Entry LevelBankingMobile Sales Units(MSU’s)Focus: Townships

Workplace Banking KiosksFocus: WorksitesCore Middle Market

Banks on Wheels (BOW’s)Focus: ELB and CMM at Events, Worksites, Branch Support

Comprises:•Gazebo•Digital pens (2)•POS device•Tables (2)•Chairs (7)•Marketing materials•Promotional materials•Card and Pin Mailers•3 DSA’s per team•Team Based Targets and Incentives

Comprises: •Mercedes Sprinter•Gazebo•Generator•Combination TV and Video (CET)•Remote opening kits (2)•Digital pens (2)•POS device•Tables (2) and Chairs (7)•Marketing materials•Promotional materials•Training ATM•6 DSA’s per team

Comprises:•Large Kiosk•Generator•Remote opening kits (2)•Digital pens (2)•POS device•3G printer/Fax/Scanner•Marketing materials•Promotional materials

Comprises:•VW Crafter•Generator•Combination TV and Video (CET)•PA System•FBSS Workstations (2)•Fully functional ATM•Marketing materials•Promotional materials•4 FTE’s per BOW•Chairs and Umbrella’s

Functionality:•Account opening•Basic Enquiries•Mini Statements (future)•Prepaid purchases (future)

Functionality:•Account opening•Basic Enquiries•Mini Statements (future)•Prepaid purchases (future)

Functionality:•Account opening•Basic Enquiries•Mini Statements•Prepaid purchases

Functionality:•Account opening•Basic Enquiries•Mini Statements•Prepaid purchases

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ABSA MOBILE CHANNELS

83

COMPETITORS MOBILE CAPABILITIES

84

MOBILE BANK ON WHEELS (BOW)

TECHNOLOGY & ENABLEMENT

Optimal technological enablement solution per segment

Technology Solution Targeted Areas Medium Term View

Laptop Kits

• Core Middle Market• Retail Affluent• Islamic Banking• Mobile Sales Units• Bank on Wheels

• LAUNCHED

• Introduce alternative devices

Digital Pens

• LAUNCHED • Implement nationally

Other Devices

Card and Pin Mailer

• All NBS sales environments

• Full implementation

Status

• Entry Level Banking• ESPs• WPB Kiosks

• Implement nationally

• LAUNCHED

• Entry Level Banking • IT LITE SOLN LAUNCHED

Fulfilment Portal

• All NBS sales environments

• INTEGRATION • Implement ED

ENABLEMENT FULFILMENT PLATFORM

Technological Integration ensure a seamless end to end Sales fulfilment process

InfoPath Client

InfoPath Client 2003

Web Browser

InfoPath Designer 2003

Consultant

Scan

Print

Backend

Systems

Fax

Mobile Sales Portal

NonBranchSales

Support

AbsaContactCentre/

AGO

Telemarketing

Appointment Booking

Calendar Service

Calendar synchronization

Forms Repository

Retrieval of application and

support documents

3rd Party Vendors

E-mail

CompCorpSybase

Fax2E-mail

Employee Portal

SalesConsultantDatabase

ManagementInformation

Form Repository

Note: Integrated Service – accessed by AGO, NBS Support hubs, other SBU’s and ES & WPB Sales Consultants

87

LARGE KIOSKS

88

SMALL KIOSKS

89

BANK IN A BOX

90

BANK IN A BOX

PRODUCT PROPOSITION: A MODEL

PRODUCT PROPOSITION: Model Defined

CORE DETAIL DEFINITION

POSITIONINGDefine the nuances of the target segment (Private, Gold, Silver)

PRICINGPrice for profit, per segment, risk, and standardisation

CUSTOMER NEEDS Positioning to the needs of Private, Gold, Silver

PRODUCT DIFFERENTIATORS Key USP for each segment

DIRECT BENEFITSKey benefits distinctive to the segment (cascade effect)

DISTRIBUTION Channels and acquisition strategy

VALUE ADDSOver and above the key benefits, e.g. through a country partner

SECONDARY PRODUCTSProducts offered to spouses and immediate family members

Private Bank Card Holder

Prepared for Client NameYour name here

Date

23-04-10

PRIVATE BANK CARD: THE POSITIONING

High Net worth Individual, earning...

Employed or Self Employed

Well Informed & Networked

Travels Locally & Internationally

Ambitious and Focused

Family

Travels extensively

Has Hobbies, e.g. Golf

Technology Savvy

WHO IS THE PRIVATE CLIENT

?

23-04-10

PRIVATE BANK: CUSTOMER NEEDS

POSITIONINGOffering the high-net worth individual a dedicated service and some exclusive benefits

CONVENIENCE

The transactions must be smooth and fast, and when I encounter a problem I want to reach someone to assist me 24 hours

EMPOWERMENTTo be able to buy what I want, where I want, as I travel the country and the world

INTERNATIONAL TRAVEL

Access to local and international lounges and boardrooms

DEDICATED SERVICE

Dedicated Private Bank Relationship Manager to assist me with my needs and problems

PROTECTIONTo know that if something happens during my travels I’ll be protected

Catered to the needs of Private Bank Clients in Africa & Globally

I NEED

PRIVATE BANK: PRODUCT DIFFERENTIATORS

EXCLUSIVE BENEFITS

Full spectrum of the retail discounts and value adds offered through Value Choice and Other

CONVENIENCE

• 55 days interest free purchases• Access to credit 24/7/365• International acceptance at ATM’s, POS and internet•24/7 customer service• Concierge services

EMPOWERMENT• Free POS purchases & secondary cards• Minimum spend limit *******• International acceptance


• Priority Pass: Standard Plus benefit embedded. Option to upgrade to Prestige at $150 per annum• Regus Lounge: Access to business facilities globally. Embedded value, $********

DEDICATED SERVICE

Private banking suite with dedicated Relationship Manager

PROTECTIONFree lost card protection and travel insurance. Optional upgrade to comprehensive travel insurance. Free insurance for Laptops, I-Pads

I WANT

XYZ Private Card delivers the benefits & enhancements desired by the Private Bank Client

PRIVATE BANK: BENEFITS

I WANT


CORE CARD BENEFITS DETAILLocal lounge access C

Priority Pass global lounge access O

Visa Hotel Club

Visa Luxury Hotel Collection C

Viisa GO Explore C

yQ C

Exclusive books discounts in SA ONLY NC

Regus Business lounge NC

Visa Golf Access C

Insurance for Laptops, I-Pads NC

Travel Insurance* C

Upgrade to Comprehensive Travel Insurance O

Visa International Concierge Services O

Free Lost card protection C

Free secondary card/s C

Embedded insurance for Indiv and family NC

Pre-approved UPL’s

Avis C

Chic Retail Shopping C

Macy’s Retail C

Core Product Features

• Free Laptop & I-pad insurance• Priority Pass• Regus business lounge• Visa Hotel Club• Visa Luxury Hotels• Visa GO Explore• YQ• Visa Golf Access• Travel Insurance• Avis• Chic Retail Shopping• Macy’s retail discounts

• POS• Dedicated Private Bank suites• Local country branches• Call centre• ATM’s, Internet

• Free SMS notification• 55 day interest FREE• Access to credit 24/7/365• International acceptance at ATM’s, POS, Internet• Free POS purchases• FREE secondary cards• Free lost card protection and travel

Benefits to the Private Bank Customer

• A single internationally accepted plastic (top of wallet)

• Provides additional value, utility and flexibility to retailer customers

• Convenience and confidence in universal acceptance of credit card payment and financing mechanism

• Additional value through partners

• Global access to business offices, lounges• Safe and convenient to do business• Professionally positioned and well equipped• Latest infrastructure• Take your business office internationally

The Private Bank Credit Card

XYZ Private Card delivers the benefits &

enhancements desired by the Private Bank

Client

Product Delivery model

Value-added Services

Regus Business Lounge

PRIVATE BANK PRODUCT PROPOSITION

• Private Bank Salaried or Self-Employed Customers

• Earning between………

Segment

CARD MATRIX: BENEFITS

I WANT

SB CORE CARD BENEFITS PRIVATE GOLD SILVER

Local lounge access C C

Priority Pass global lounge access O O

Visa Hotel Club C

Visa Luxury Hotel Collection C C

Viisa GO Explore C C C

yQ C C

Exclusive books discounts in SA ONLY NC NC

Regus Business lounge NC O

Visa Golf Access C O

Insurance for Laptops, I-Pads NC C

Travel Insurance* C C

Upgrade to Comprehensive Travel Insurance O O

Visa International Concierge Services O

Free Lost card protection C C C

Free secondary card/s C C C

Embedded insurance for Indiv and family NC NC C

Pre-approved UPL’s NC

Avis C C C

Chic Retail Shopping C

Macy’s Retail C C C

23-04-10

VISA CARD MATRIX: BENEFITS

I WANT

E-Exclusive, S-Selected, L-Limited

PREMIUM PRODUCTS

CORE CARD ENHANCEMENTS & INSURANCES CLASSIC/SILVER GOLD PLATINUM INFINITE

Global Cardholder Assistance Service (GCAS) C C C C

Medical and Legal Referral C C C

Purchase Protection C C

Extended Warranty C C

Crisis Response C

Multi-trip Comprehensive Travel Insurance C

Loss of Baggage C

Personal Accident C

Trip Cancellation C

Evacuation and Repatriation C

Travel / Baggage Delay C

*Coverage varies by product. C = Core Card Offering

VISA CARD MATRIX: BENEFITS

I WANT

PREMIUM PRODUCTS

CORE CARD BENEFITS* CLASSIC/SILVER GOLD PLATINUM INFINITE

Global Merchant Offer Program C C C C

Visa HotelClub C C C C

Visa Golf Access C C

Visa Airport yQ (meet and assist service) O O

Visa Luxury Hotel Collection C C

Visa Private Villas C C

Visa Escapes C C

Visa Airport Lounge Access O O

Visa Concierge C

Visa Golf Access (free golf benefit) C

Visa Ticket Exchange C

*Coverage varies by product.

C = Core Card Benefit

O = Optional Value Added Benefit with Issuer and/or Cardholder Fee

Visa Infinite Card

Prepared for Client NameYour name here

Date

INFINITIE CARD: The Positioning

High-net worth individuals

$1 million under asset management

Well Informed, older, self made

Travels Locally & Internationally

Ambitious and very successful

Family or Single

Has Hobbies, e.g. Golf

Technology Savvy

Not easily swayed by luxury brands

WHO IS THE INFINITIE CLIENT ?

Key points

The Customer Need

23-04-10

INFINITE CARD: Customer Needs

POSITIONINGService the ‘HNI” segment with bespoke service and exclusive benefits

CONVENIENCE

The transactions must be smooth and fast, and when I have a problem I want to reach someone who will be on my side

EMPOWERMENT To be able to buy what I want, where I want around the globe


Access to local and international lounges and boardrooms

PRESTIGE & EXCLUSIVITY

Recognition of my value as a customer with personal service. Invite me to exclusive events. Help me enjoy my life with luxury

PROTECTIONTo know that if something happens during my travels I’ll be protected

Catered to the needs of the Infinite Card in Africa &

Globally

I NEED

INFINITE CARD: Product Differentiators

REWARDS SBAF may choose to offer rewards to the infinite cardholder

CONVENIENCE• International lounge access• Dispute resolution• Lower referral and higher authorisation• 24/7 customer service

EMPOWERMENT• Minimum spend limit $20, 000• No preset spending limiit• International acceptance• Year-end summary


• Embedded lounge access• Regus Lounge: Access to business facilities globally. Embedded value, $********

SERVICE At a dedicated country branch and via the call centre 24/7

PROTECTION

Travel accident insurance US$1,000,000Comprehensive travel insurance benefitsEmergency evacuation and repatriationTravel and emergency assistance servicesPurchase securityEmergency card replacement/cash disbursements

I WANT

Infinite Card delivers the benefits & enhancements desired by the High-net worth Segment Client

Key points

Core Benefits

23-04-10

INFINITE CARD: Benefits

I WANT


INFINITIE CARD BENEFITS DETAIL

Global Merchant offer program

Visa Hotelclub

Visa Golf Acces

Visa Airport yQ (meet and assist service)

Visa Luxury Hotel Collection

Visa Private Villas

Visa Escapes

Visa Airport Lounge Access

Visa Concierge

Visa Golf Access (free golf benefit)

Visa Diamond Air

Visa Ticket Exchange

INFINITE CARD: INSURANCE BENEFITS

I WANT


INFINITI CARD BENEFITS DETAIL

Global Cardholder Assistance Service

Medical and Legal Referral

Purchase Protection

Extended Luxury

Crisis Response

Multi-Trip Comprehensive Insurance

• Loss of Baggage

• Personal Accident

• Trip Cancellation

• Evacuation & Repatriation

• Travel/Baggage Delay

INFINITE CARD: INSURANCE BENEFITS

I WANT



• Global merchant program• Visa Hotelclub• Visa golf access• Visa yQ• Visa luxury hotel collection• Visa private villas• Visa escapes• Visa airport lounge access• Visa Concierge• Free golf benefits• Visa Diamond air• Visa ticket exchange

• Dedicated wealth managers

• Visa accredited and related programs• Hilton Hotels gold membership• Harrods black reward card (10% discount, coffee,

free alterations)• yQ Meet & Greet• Diamond Air International• Exclusive South African Benefits

Benefits to the Infinite Segment Customer

• Exclusive and bespoke benefits/service

• Prestige and exclusivity• Convenience • Unlimited access• Excellent travel insurance/s

• Unlimited Global access to business offices, lounges• Safe and convenient to do business• Professionally positioned and well equipped• Latest infrastructure• Take your business office internationally

Infinite Card delivers the benefits & enhancements

desired by the Client

Delivery Model

Services

Regus

INFINITE CARD PRODUCT PROPOSITION

• High netwoth individuals with asset under management of $1 million

Segment

The Infinite Credit Card

CREDIT CARD: DELIVERY & CHANNELS

I WANT

CHANNELS PRIVATE GOLD SILVER INFINITE

Country Branch Network

Private Bank Branches

Branch Relationship Managers

Private Relationship Managers

High Network Portfolio/Managers

Visa Platform

Kiosks

ATM’s

Call Centre

Client Appreciation Events

POS

In-Country Partners

Direct Sales Agents

Internet Services

Cell-phone Banking

Interactive TV

Work Place Banking

Global Partners


• SBAF supported through AMEX Globally• Branches• Corporate Relationship Managers

Benefits to the Corporate Customer

• Exclusive and bespoke benefits/service

• Recognition & Rewards• Convenience • Unlimited access• Excellent travel insurance/s

•

The Corporate Card delivers the

benefits & enhancements desired

by the Client

Delivery Model

Services

Other

CORPORATE CARD PRODUCT PROPOSITION

• Corporate clients with more than 50 employees

Segment

The Corporate Card• Comprehensive Global Insurance• One Account• One Settlement• Currency of choice to purchase and

settle• Complimentary Rewards Progam• Retail Discounts• Technology Discounts• Access to Proffered Hotels• Access to International Airlines

23-04-10

FULL SPECTRUM OF CARDS IN COUNTRY

I WANT

SBAF - CARD COUNTRY PRIVATE GOLD SILVER INFINITE AMEX

KENYA

NIGERIA

UGANDA

NAMIBIA

MOZ

BOTS

SWAZ

LESOTHO

ANGOLA

Day 2 Session 1: New Product Development Process

Session 2: Case Study: Creating the Best Product /Service for Business

Session 3: Packaging the New Product

Session 4: Case Study of Product Launch

Session 5: Product Lifecycle and Prolonging the Products Lifecycle

Session 6: Innovation & ‘Ethic’

VIDEO: BMW ADVERT

SESSION 1: New Product Development Process

117

NEW PRODUCT DEVELOPMENT PROCESS

• Firstly, introducing NEW products is critical to the success of any organization and including Banks

• Product Managers should follow a set process when implementing NEW products

• The 7 step process will comprise the KEY elements of new product development

• These steps are crucial to help make informed decisions

• The process also shows the importance of market research plays in developing and shaping NEW product development

1. Background

118

PRODUCT DEVELOPMENT PROCESS STEPS 1-3

STEP 1: THE IDEA GENERATION

• Requiring the gathering of ideas to be evaluated as potential product options• Must be an ongoing process with contributions from internal & external sources• Many market research are used to gather ideas, e.g. focus groups, channel members, Banks sales

staff, customer comments, etc• Gaining insight on competitor products through secondary data sources• One important research technique used to generate ideas is brain storming where creative thinkers

from inside and outside share ideas• Remember it is important to table many ideas as this will SPARK THE IDEA• Also use Mind-Mapping to set out product development

STEP 2: SCREENING

• Ideas generated are evaluated against feasibility• Screening can be done in hierarchal rounds involving the CEO, CFO, COO etc, on the feasibility of

NEW product• Detailed screening will be followed through advanced research techniques• Once an idea/s are tabled, do a ROUGH ESTIMATE on SALES, COSTS, PROFIT, MARKET SHARE,

CUSTOMER NUMBERS• Once an idea is accepted move onto step 3

1. Background

119



• Focus groups are convened where the product idea is presented to a group in the form of a CONCEPT BOARD PRESENTATION (i.e. story board)

• EG, customers are shown the concept board depicting drawings of the product idea or can present a mock-up version that is NOT functional

• Here you must get feedback from the customer segment on the likes and dislikes of the product in terms of the PRICE, PACKAGING, FEATURES, EASE OF USE, etc

• IOW, you want feedback if the customer will buy the product and frequency thereof

1. Background

120



• At this stage the product idea has been narrowed down to 1-2-3 etc• More important is market research as efforts are made to analyze viability of product idea• Key objective, to obtain useful forecasts of market size, costs, sales volumes, financial projections,

etc• Key objective to ascertain if overall product fits into the companies overall mission/vision (balanced

scorecard)• Emphasis on external research, surveys, secondary research, competitor analysis• Emphasis on internal research, historical data, customer data, segment data STEP 5: PRODUCTION & MARKETING MIX DEVELOPMENT

• Initial prototype of the product emerges• Start developing the marketing mix strategy, 4P’s• Get feedback/insight from customers as they will have a ‘live’ product• Customer feedback will help refine product and marketing mix before launch• Refine the marketing mix• Yippeeeee…FINALLY…..WE LAUNCH…..4/3/2/1…

1. Background

121


STEP 6: MARKET TESTING

• Can go straight to commercialization or• Restrict the launch to a smaller geographical area & target segment• Many ways:

• Simulation• Build a live test site

STEP 7: COMMERCIALISATION

• Launch to a wider audience• Roll-out strategy• Phased approach so as to ensure production is controlled and relevant changes to the marketing mix

1. Background

SESSION 2: Case Study: Creating The Best Product/Service for Business

123

SOME CASE STUDIES

CASE STUDIES:

1. Case Study 1

2. Case Study 2

3. Case Study 3

1. Background

SESSION 3: Packaging the NEW Product

125

PACKAGING THE NEW PRODUCT: THE LAUNCH• So we have done our homework through the Product Development Process• NOTE: Many NEW products are launched daily, so competition out there is stiff!!!!• So think carefully of your LAUNCH STRATEGY:

Study the Competitors• Look at the competitors, SWOT analysis

• Review their marketing strategy

• List the banks that offer the product or service

• Put yourself in the customer shoes…ask questions, WHY choose your product?????

• What will attract the customer to take up the product or service????

• Evaluate HOW your product will stand out from the competition, WHAT WILL YOUR PRODUCT UNIQUE

1. Background

126

PACKAGING THE NEW PRODUCT: THE LAUNCH

• One of biggest pitfalls is we do NOT target the ‘RIGHT’ customer, hence we spend a lot of money on futile marketing and sales activities

Target the Ideal Customer• Focus on segment that will buy or take up the

product or service

• This will minimize the financial burdens on alreadyextended budgets

• These can be customers that already buy a similarproduct & the additional features will benefit them

• Its easier to a fill a need than create one

1. Background

127


• Your Unique Selling Proposition must be KEY in the very competitive market

Create a Unique Value Proposition• You must STAND OUT from your competitors

• Be clear on the message you project on the FEATURES & BENEFITS

• Value Added Services are synonymous with a clear defined USP

• Reality your product or service must be UNIQUE enough and meets the NEEDS of the prospective targetmarket

• STAND OUT IN WHATEVER YOU DO AND PROJECT TO THE CUSTOMER

1. Background

128


• Critical in choosing RIGHT CHANNEL to sell or market product/service

Create a Unique Value Proposition• Multi-channel approach is GOOD as many customers

will use variety of channels to access product or service

• Decide on which channel best suits the strategy, eg.ATM’s, CC, Emails, SMS, Mobile, etc

• Suppose you are marketing a product to the lower endof the segment, you can use the ff channels:• DSA’s• Mobile• SMS notification• 3rd Party Agents• Bill boards• Radio/TV media

1. Background

129


• One of the most critical phases

Roll-out• PR & Group Communication is critical

• Its about the message and readiness

• Ensure the product or service ready

• Create launch events, Internally to Staff & Externally to customers

• Ensure proper distribution

• Ensure proper staff training and product info is readily available to ALL

• CONSUMER EDUCATION IS KEY

1. Background

130


• The or if NOT most important consideration in any product

Product Lifecycle• Keep the product FRESH

• Keep the product ALIVE

• Keep the product abreast of changes in the competitivelandscape

• Create NEW re-launches

• Create more VAS

• Bring on PARTNERS for increased services or reach

• ULTIMATELY CREATE THE CUSTOMER STICKINESS

1. Background

VIDEO: CITI BANK PRODUCTS

SESSION 4: Case Study of Product Launch

CRITICAL SUCCESS FACTORS

All out - full blown open market launch

Pre –launch trails – within a smaller base

Open segments

Choose a segment

Who takes ownership of SALES?

Product ownership vs. Sales ownership

Marketing spend (BTL, ATL)

Phased approach – in all countries

Change management

Product/Price/Proposition

Road-show

Business Readiness133

PROJECT PRODUCT OWNER

GO 2 MARKET

SALES CHANNELS

3 PHASES TO THE LAUNCH

134

MOBILE

PROJECT PRODUCT OWNER SALES/CHANNELS

• Roll-out

• Milestones

• Critical Path

GO 2 MARKET

• Change Management

• Marketing

• Soft –launch

• Product

• System Readiness

• Customer Education

• Pre-Launch Trials

• Limited/Whole Segment

• Branch Network

• WPB

• Alternative Delivery

• Call Centre

• SMS

• ATM’s

HQ & IN-COUNTRY SUPPORT STRUCTURES

GO TO MARKET STRATEGYMilestonesMilestones Who is ResponsibleWho is Responsible WhatWhat WhenWhen

Change Management HQ Team

Country SBAF Leadership

HR

Country Retail Leadership

Project Team/s

• Presenting the Strategy• Overview of Benefits• Staff training on the product,

systems, operations and processes

• Internal Communication Strategy

Generally 3 MONTHs prior to a launch

Marketing Country Marketing, HQ Marketing, Design International, Agencies, other

• Submit the marketing plan• Prep Marketing Collaterals• Order Marketing systems• Internal & external comms• THEME??????

Generally 3 MONTHs prior to a launch

Soft Launch Country Teams, HQ, Project Teams • UAT• Internal capabilities• TEST with a WPB site• TEST within a defined

market?

1 MONTH soft launch before FULL blown launch

GO 2 OPEN Market HQ:

Marketing: country & HQ

Operations

Retail Heads

WPB Teams

Partnership HQ (Agent Force)

• ATL• BTL • Localised EXPERIENTIAL

Activities• CONSUMER EDUCATION• Localised sites

For 3 MONTHS & beyond

MilestonesMilestones Who is ResponsibleWho is Responsible WhatWhat WhenWhen

Product HQ Team

Country Team

• Services to be offered• Other services WHEN

Part of Business Case

IT/Systems readiness Project Team • Need to confirm any delays within the 3 MONTH CHANGE management window period

Ongoing/Immediate

Feedback loop Project teams

In-country

• Challenges• Opportunities• Business Intelligence• Other

Ongoing

GO TO MARKET STRATEGY

137

M1 M3M2 M4 M6M5 M7

Change Management

Marketing

Soft Launch

Product

Market Delivery

Go 2 OPEN Market

Finalise ALL features

UAT

Systems Readiness

Fit out

ATL/BTL

Building Preparation

ARE WE READY

KEY MILESTONES

Branch Network Q – Management Q –TV Daily Sales Huddles Pop-up Banners at Tellers

WPB Customer Education Material

Alternative Delivery: Use existing Direct Sales Agents for distribution/education Existing 3rd Party Agents

SMS to existing customer base

ATM’s Pop –up screens across the segments

138

SALES & MARKETING CHANNELS

MOBILE BANKING: THE LAUNCH PLAN

Activities• Q- Management• WPB• Call Centres• SMS capabilities• BTL Competitions• Every Fri/Sat, month end is a BLUE MOBILE DAY• Area propensity of existing Base

Introduce the WOW Factor Customer Service and Enhancing the Value: 24 – 7 – 365

24 Hours – receive a welcome sms, 7 Days- rate the customer & product service, 3 Months – X-cell other products

24 hour

s

7 days

3 month

s

MOBILE MARKETING: THE EXPERIENTIAL PLAN

23-04-10

MOBILE BANKING. MOVES WITH YOU24-7-365

Phase 1: SMS ALERTS

Phase 2: BALANCE ENQ

Phase 3: PAYMENTS

MOBILE MARKETING: ROLL-OUT

23-04-10

HEAD OFFICE

BRANCH STAFF

CUSTOMERS

1 DAY ACTIVATION

1 DAY ACTIVATION

4 DAY ACTIVATION per BRANCH

MOBILE BANKING: CASE STUDY

23-04-10

111,395

124,431

1,10556,00344,6821,03337,42448,15980317,96831,590Total

77,47596,12580438,05233,90374926,05938,09254013,36524,130ELB

6,4974,332702,8172,393632,461902611,2191,037IB

10,9717,9421015,5652,4091013,8972,734891,5092,799AB

16,45216,0321309,5695,9771205,0086,4311131,8753,624WPB

TargetActualActiveSalesStaff


TargetActualActive SalesStaff

TargetActual

YTD - Q1MarchFebJan

111,395

124,431

1,10556,00344,6821,03337,42448,15980317,96831,590Total

77,47596,12580438,05233,90374926,05938,09254013,36524,130ELB

6,4974,332702,8172,393632,461902611,2191,037IB

10,9717,9421015,5652,4091013,8972,734891,5092,799AB

16,45216,0321309,5695,9771205,0086,4311131,8753,624WPB




TargetActual

YTD - Q1MarchFebJan

Keys:

• WPB – Workplace Banking

• AB – Acquisition Bankers

• IB – Islamic Bankers

• ELB – Entry Level Banking

111,395

124,431

1,10556,00344,6821,03337,42448,15980317,96831,590Total

77,47596,12580438,05233,90374926,05938,09254013,36524,130ELB

6,4974,332702,8172,393632,461902611,2191,037IB

10,9717,9421015,5652,4091013,8972,734891,5092,799AB

16,45216,0321309,5695,9771205,0086,4311131,8753,624WPB




TargetActual

YTD - Q1MarchFebJan

111,395

124,431

1,10556,00344,6821,03337,42448,15980317,96831,590Total

77,47596,12580438,05233,90374926,05938,09254013,36524,130ELB

6,4974,332702,8172,393632,461902611,2191,037IB

10,9717,9421015,5652,4091013,8972,734891,5092,799AB

16,45216,0321309,5695,9771205,0086,4311131,8753,624WPB




TargetActual

YTD - Q1MarchFebJan

Keys:

• WPB – Workplace Banking

• AB – Acquisition Bankers

• IB – Islamic Bankers

• ELB – Entry Level Banking

0 20 000 40 000 60 000 80 000 100 000 120 000 140 000

WPB

AB

IB

ELB

TOTAL

Target Actual

VIDEO: NEW PRODUCT WEEK X 2

VIDEO: NEW PRODUCT WEEK X 2

144

THE USP or DIFFERENTIATOR

• The USP is created in 2 phases:• You decide what your USP is…• Craft this USP in a clear concise message

• Understand what a customer wants, through “opportunitytriggers”

• Mix short and long-term marketing research

• Is about adapting to a changing market conditions, to stay unique you have to be in touch

• Look at best practice in the industry and across similar industries

• Improve the customers life, its NOT ONLY about price or package, what about VAS????

• Know what your strengths and weakness are…KAIZEN….its about continuous improvement

1. Background

145

CUSTOMER STICKINESS

• It is simply about• Retention• Loyalty

• Creating breath and depth in product and service offerings

• Its about creating convenience and simple ways of deliveringthe product or service

• Its about the initial customer experience

• Customers if loyal will NOT switch

• So stay AWAKE, FRESH, ALIVE & above all stay RELEVANT in a changing banking landscape

1. Background

146

CUSTOMER LOYALTY

1. Background

SESSION 5: The Product Lifecycle

148

TRACKING THE LIFE CYCLE OF A PRODUCT CATEGORY

1. Background

Creative Searching

Innovative Product is Introduced

Sales Gain Momentum

Market Begins Saturate

Sales & Competition gets Cutthroat Either Improvement

revives Sales

Until Market Saturates Again

Introduction Growth Maturity Decline - Revival Death

Or Some New Invention replaces product

????

149

THE PRODUCT LIFECYCLE MANAGEMENT & MONITORING

• Understanding the product lifecycle will help banks understand when it is needed to INTRODUCE a new product and when it is needed to WITHDRAW the product

• The product lifecycle consists of 5 major phases of product management:

• PHASE 1: Product Development

• PHASE 2: Introduction

• PHASE 3: Growth

• PHASE 4: Maturity

• PHASE 5: Decline

1. Background

150

PHASE 1: PRODUCT DEVELOPMENT

• Research & Development

• Creating the or an IDEA

• Spending time, money and resources to develop idea

• Crafting a prototype

• Testing the prototype

• Market research, focus groups, fine tuning the idea

• Getting ready to introduce to the market

• Creating the marketing MIX

1. Background

151

PHASE 2: INTRODUCTION

• Understand the target segment through internal & external market research

• Devise launch strategies

• Create the RIGHT marketing mix and PR messages

• Price adjustments and verifications

• Banks will spend a lot of money on the initial launches

• Choosing the RIGHT channel for distribution is key

• Continually getting feedback from the market segment is key

• Make some improvement where necessary

• Understand what competitors reactions to your product will Be - CRITICAL

1. Background

152

PHASE 3: GROWTH

• Product growth

• Increase in market share

• Increase in product mix and profitability

• Increase in access to NEW customers

• Increase the customer stickiness

• Improve on product efficiencies:• Pricing• Packaging• Marketing Promotions• Channel efficiencies

• KAIZEN: continually improve on quality of SERVICE, CUSTOMER EXPERIENCE & PRODUCT itself….

1. Background

153

PHASE 4: MATURITY

• Market saturation

• Its about reinventing the product

• Competitors have improved on your product, there are alternatives

• How do you extend the products lifecycle:

• Improve on services offered eg.. VAS

• Improve on the packaging

• Improve on the Pricing or Cost of services

• Bring on additional partners to increase depth & breath of product

• Its about getting the existing product into a “NEW” product lifecycle

1. Background

154

PHASE 5: DECLINE - DEATH

• Decisions to withdraw a product:• Decline in sales and market share• Cost of improvement does NOT justify further profits• Segments tastes, aspirations, needs have evolved• Found a replacement product that will propel the bank to further heights

• Removal of a product will have impact on existing customer loyalty• So ensure that there back-up to service the existing customers

• Some companies can GO from GROWTH phase to DECLINE phase….if they have taken their eye of the ball, e.g. Toyota has seen world-wide sales plummet in last 2 years since its recall even in markets in which it has shown good growth USA

1. Background

155

PRO-LONGING THE LIFESPAN OF A PRODUCT

• Marketing tactics

• Rebranding

• New packaging

• Look n’ Feel

• Reposition in NEW segment

• Re-Pricing

• Co-Branding

• Using modern technology

• Channel optimisation

1. Background

VIDEO: BRAND POSITIONING

VIDEO: INNOVATIVE MARKETING IDEAS

VIDEO: VARIOUS ADVERTS




SESSION 6: Ethics & Innovation

159

ETHICS

• Take a look at the current Europe crisis….COULD IT HAVE BEEN AVOIDED THROUGH ETHICAL BUSINESS AND PRODUCT PRACTICE?????

• Marketing dishonestly…telling the consumers what is really NOT the case

• Internal company dishonesty…..pushing through a product to senior management knowing that it will NOT be successful or the financials are flawed

• Environmental impact and awareness

• Job creation vs. Job loses

• Company espionage

• E.G. recently watched a program on the debt crisis in Ireland:• Group discussion on the fine line between the Triple Bottom line & Good Product

Practice/Ethics

1. Background

VIDEO: FUNNY ADVERTS

product innovation & management

Economy & Finance

new product

product management

new technology

better product

product line

hot product

creative vision

new ideas