Marketing at the aanguard Group – A Case Study

Our Journey

• Introduction• Where we are• The Way Ahead• Situation Analysis• Strategy and Risks• Action Plan• Contingency Plan

• Market Leader• Low Cost• High Quality• Reliability• Decreasing Market Share

Vanguard in a Nutshell

90%

60%40%

Rest of US MF Industry Vanguard Retail InvestorsVanguard Institutional Investors

US Mutual Fund Assets -year 2002

Our Market Share

Our Footprints

Turbulence Today!!

• Deregulation: Competitors entering into Markets• Fluctuating Capital Markets affecting MF returns• Higher redemption rates in institutional investor segment• US Market saturation

The Way Ahead• Maintain our market share• Restrain Cash outflows• Attract new businesses

• Large untapped market of customers• Growth potential in International markets

Situation Analysis

• Best products at lowest cost• Strong Brand Image• Customer Loyalty• Competitive Fund Performance• High Operational Efficiency

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• Poor Marketing Strategy

Situation Analysis

• Deregulation• Impact of fluctuating Capital Market• Saturated US Mutual Funds Market

What we can do?What we can do?Leverage Strength: • Low cost high performance model

Exploit Opportunities: • Special Marketing campaigns for targeted customers• Alliance with Brokerage firms

Strategy to stay afloat

Address Weakness: • Revamp the marketing

strategy

Mitigate Threats: • Retain existing clients by becoming a one-stop shop for Mutual Funds.

Risks in proposed strategyRisks in proposed strategy

• Abrupt increase in marketing spending may hurt existing cost-effective business model.

• Some customers may dislike the promotions as they do not match with company’s traditional brand image.

Action PlanAction Plan• Focus on the core competency – Mutual Funds• Introduce attractive schemes for “emerging mass affluent level” segment ($50K –

$1M assets)• Tie-up with brokerage firms to attract new businesses• Aggressive Marketing

– Use service calls for advertising new products– Highlight recent performance of mutual funds on company web-site.– Effective use of technology for marketing

Contingency PlanContingency Plan

• Diversification of portfolio• Enter into new International markets

Thank You!!Thank You!!