Introduction Living in the Hong Kong, our lives and bank can’t be separated. When we were a child, we visited The Hong Kong and Shanghai Banking Corporation’s (HSBC) headquarter in Central. There were two big statuaries standing at the two sides of the door. We won’t forget this powerful and successful symbol, and the scene of that moment. Moreover, our red package money has been saved in bank account by our parents in the past 19 years. We often check the saving passbook and hope to have a large amount of deposit in the future. When we were 18, we have to own a credit card.
When we are working in the future, we will open a retired sinking fund and a loan for home purchase. HSBC concern our financial issues in different generation cohorts, backgrounds and careers with diverse strategies which success in Hong Kong bank market. Background HSBC, established in 1865, provides many comprehensive ranges of financial services, such as Personal Financial Services, Commercial Banking, Corporate, Investment Banking, Market and Private Banking. 1 As HSBC has developed a large market share, it creates many types of credit card.
The product what we have selected is “Green Credit Card”. This product can contribute to protect the environment, and it is unsurpassed privileges from HSBC Visa Platinum card. In 2008, HSBC was the only one to produce the first green card in Hong Kong. Never before did other Hong Kong banks produce. Competitive Analysis Environmental forces We can analyze the banking market from the environmental forces. We defined it as competitive forces and oligopoly competition2. It is because there are few companies control the Hong Kong market.
They are the three most important bank in Hong Kong: HSBC, Bank of China and Standard Chartered Bank (Hong Kong) Limited (Standard Chartered Bank). Competitors of HSBC One of the competitor is Standard Chartered Bank, founded in 20045, which is a licensed bank incorporated in Hong Kong, a part of Standard Chartered Bank6. The other competitor is Chiyu Banking Corporation Limited (Chiyu Bank), founded in 1947, which has 24 branches7 in Hong Kong and focuses on serving the community of residents of Fujian descent in Hong Kong8.
Those are public companies in Hong Kong that provide financial services to Hong Kong people. Compare the strengths and weaknesses of these three banks The strengths of the HSBC are having the No. 1 of BrandFinance Global Banking10 and high international status because it has many subsidiaries over the world, like in Australia, Bahamas, Indonesia, Mauritius, Singapore3 etc. Moreover, it has many ATM and over 160 branch covered on Hong Kong Island, Kowloon, New Territories and Outlying Island3. In addition, premiums were given to customer of using credit card, like welcoming gifts.
Also, its business is high stability. Therefore, it can attract more customers to save more deposits. Nevertheless, the weakness of the HSBC is Lack of internal talent because they do not train some successors to take over the managers of leaving job or getting retirement 9. One of the strengths of the Standard Chartered Bank is having rank 24 of BrandFinance Global Banking10 that have shown the top 30 banks in the world. Furthermore, it has over 150 branches and also many ATM in Hong Kong. The other one is having a huge number of employees.
The Standard Chartered Bank has 80000 employees that can increase the company’s profit. Moreover, the six days office hour also is the strengths of the Standard Chartered Bank because it has a competitive advantage of the other bank. Its opening hours only have in five and a half hours. It is more convenience to customers. However, the weakness of the Standard Chartered Bank is the entry of the transaction that can’t show on the bank book after office hours, it makes more trouble to customers in the weekend.
The first strength of Chiyu Bank is easy to manage the account of the customer because its scale is smaller than the others. The other strength is Chiyu Bank being the largest RMB service network in Hong Kong. Instead, Chiyu Bank has many weaknesses, such as BrandFinance Global Banking rank is 4657. It showing that the bank has lower value than other bank. Moreover, it is only a local bank so it just has less employees and less branch. Last but not least, the small scale of Chiyu Bank brings less confident to customers.
The positioning of HSBC is looking for high income target market and providing quite more premiums to the credit card user3. Secondly, the positioning of Standard Chartered Bank is looking for the medium income target market and providing some premiums to the credit card user. Thirdly, the positioning of Chiyu Bank is major looking for the low income target market and also providing just fewer premiums to the credit card user. We find that the positioning of HSBC is not the most effective methods for market. Thus, we propose a new positioning for HSBC.
We suggest it move near to the medium income target market and provide more premiums than before, because it can broaden the target market, attract more customers and also increase the profits. Customer Analysis Segmentation is a form of critical evaluation rather than a prescribed process or system11. It is the link between the various buyers’ needs and the firm’s marketing program and thus increases its sales and profits. A great segmentation can lead to improve marketing effectiveness and make company to be success12.
For HSBC, it is obvious that “Multiple products and multiple market segments”, demographic and psychographic characteristics are used. Targeting Strategy HSBC use “Multiple products and multiple market segments” which is provide different kinds of credit card, each targeted at a different type of user. For example, the target market of the premier MasterCard credit card is exclusively for HSBC Premier Account holders, the Visa Platinum Card and Green credit card is for the customers who have a high income13. It is certain that the total cost of manufacture different kinds of credit card is greater than producing only a single card.
Indeed, HSBC can satisfy and serve more and more customers. Therefore, HSBC have an optimistic sales revenues and profits. Demographic Age (18-59 years old) The main target of the credit card is the people who are in this age group. People who are in or under 18 may not be the target because generally they cannot achieve the requirement for applying a green card and visa gold card, etc13. For people who are older than 60, credit card will not be a means for paying money, so they will not be a target. In this age group, people who can manage their finances and mature to use the credit card.
As a result, the age group of the customer segment is aged 18 to 59. Income The minimum requirement for applying green card and Visa Platinum Card is to earn more than $250,000 per year. In addition, HSBC hope people have a stable income14. In a word, the applicants must have a high and stable income. Moreover, the minimum requirement for applying Classic Card is to earn more than $60000 per year13. Besides, it needs $1,000,000 bank saving for applying premier MasterCard credit card13. In fact, there are some differences between primary card and additional card.
People who are over 16 years old can apply the additional card. The annual fee of visa Platinum primary card is $1500 while addition card is $75015. It is a triple fee of visa gold card. However, the annual fee of premier MasterCard credit card is waived because of the holder of HSBC Premier Account. HSBC divide different type of credit card to cater more customers. Psychographic Personality The green card contributes 0. 1% of each payment for environmental protection. Thus, most of the people are seem as obligating16. Green card segments the customers who are willing to improve environmental issues.
Not only do they enjoy the trade, but they also can help the people in need. Honestly, some of them have a characteristic of “Realism”. They wish they can get advantages, and they know that the reward gift is more abundant, compared with other countries, such as “RewardCash program Term”, when customer complete a trade using credit card, they can earn “RewardCash” so that they can redeem the gifts17. Lifestyle HSBC provide a green credit card. It is segment to the customer who has green mind and the sense of environmental protection. The green card symbolizes green life.
This lifestyle is influenced by the social culture. Having a green mind, those people must be obligating. Moreover, customers are used to spending “Tomorrow money”. Credit card can advance some money for purchasing. HSBC credit card not only provides “Tomorrow money” but also enhance them to collect some point to receive gifts. Product Analysis a Green Credit Card features For the product analysis, whenever customers use the green card, they will contribute to protect the environment; also, HSBC green card has the following features.
Firstly, HSBC will donate a sum equivalent to 1% of customers spending to the “HSBC Green Roof for school” programme. Also, if customers apply the AccidentSurance successfully and submit the premium by their green credit card, HSBC Insurance (Asia) Limited will donate an extra HK$10 to support the “HSBC Green Roof for Schools” programme4. This is other credit card have not do it. Secondly, HSBC Green Card provides an Internet Banking or email address to customers, which try to reduce paper consumption.
Customers are safe to use the online account, because users are set with a security device by HSBC Internet Banking4. Green cards are made by using the PET G materials and general credit card used in PVC plastic, it is different from the latter contained no chlorine and other toxic chemicals18. In addition, green cardholders can enjoy the benefits of green consumption. HSBC selected to provide some environmentally friendly products for the cardholder redemption though the “Reward Shopping Network”3 and which have more than 20 rooms would provide discount18.
Also, the cardholder can enjoy more than 3600 shops and restaurants discount offers throughout the year18. For example: 10% off of “Organic Cooking Class” at superlife culture club in City’super. The product cycle & Innovation The green credit card in Hong Kong is still in an introduction stage, as there are no competitors (for green card) and the industry sales are growing slowly. It is a continuous innovation because it is the same behavior to use credit card and just provide more services only2.
There is only one green credit card in Hong Kong, so this is a unique product3. Promotion For the promotion, green credit card aims to build awareness, inform and educate about protect the environment. HSBC invited well-known artists, such as Leonardo DiCaprio as officiating guests on Green card launch ceremony in March 200819. Also, a place-based media advertisement of green card ,which erected on top of a six meters high Green Card “g” logo, and with the real grass over 1. 5 meters high sculpture, is the first outdoor gardening in Hang
Lung Centre, Causeway Bay18. Place Basically, cardholder can use green credit card at every shop that provide a credit card service, such as shopping centre, restaurant, and online store. As green credit card is one of the credit cards, it is not need to alter the traditional consumer distribution channels. Since HSBC is the only one company provides green card, if people want to apply this card, they only can apply in HSBC3. Price According to HSBC Green card survey, people who focus on environment protection generally has a higher education and income18.
So, Green card will be positioned as HSBC Platinum card, the card’s minimum annual salary of the main requirement is 25 million, also, Green card of the Lord is indeed higher than the average spending credit card account of ordinary18. Recommendation Our New Product For our new product, since the current market of credit card is Generation X and Generation Y, so we want to reposition and extend the target market that also includes the Baby boomers (the aged of 60 or above). The current market of elderly is so small because they think that using the credit card is not safe and inconvenience.
Thus, we can solve these problems to gain a big potential market. Dactyloscopy function Firstly, for the new credit card feature, we use the dactyloscopy be a card reader instead of using the password, it can let the customers more confidence of the privacy by using the credit card. Moreover, it is easy to use without memorized the password that specially a benefit for the elderly customers. Transactional details displays at the back Secondly, at the back of the card, it need to put a filter card above to check out transaction detail, signal bar in pH value (near the card limit, the color be red, otherwise, be green).
After each transaction, the credit cards will be updated. These features have many advantages, for examples, it is convenience for the customers to check their transactional information directly at the back of the card without disclose to everyone. Also, it shows the balance on the card which can help to save paper and become environmentally friendly, that is a kind of form utilities. In time utility of the credit card, the customers can check the transaction information on the card without checking online or visiting the ATM. It is easy not only for the Generation X and Y, but also the baby boomers.
Call Reminder service Thirdly, we will provide a remind call service, just like we mention before, the elderly memorize ability is not well, so we will provide a call to remind them to settle the payment before the due date. Double point and gift Fourthly, in order to attract the elderly customer using this credit card, we will give them double points with their transaction, and the accumulated point can use to exchange a gift such as a free trip, healthy food or some kid toys. DIY Finally, besides the function, customer can also make their own design on the card such as use their family photo.
Thus, they have a unique card for their own. Appendix 1 New Product – My favorite card [pic] List of Journal Articles a. Apple’s iPhone launch: a case study in effective marketing Appendix 2 References 1. HSBC(2010). Home Page. Retrieved November 1, 2010, from http://www. hsbc. com. hk/1/2/about/chinese/home? WT. ac=AMH_PFS_PWS_H_ABOUT_C 2. Kerin, R. A, Hartley, S. W, Rudelius, W, and Lau G. T, (2009), Marketing in Asia, McGraw Hill 3. HSBC. (2010). Homepage. Retrieved October 18, 2010, from http://www. hsbc. com. hk/1/2/home 4. The Hongkong and Shanghai Banking Corporation. (2010).
Retrieved October 20, 2010,from Wikipedia http://en. wikipedia. org/wiki/The_Hongkong_and_Shanghai_Banking_Corporation 5. Standard Chartered. ( 2010). Homepage. Retrieved October 20, 2010, from http://www. standardchartered. com. hk/en/ 6. Standard Chartered Bank. (2010). Retrieved October 20, 2010,from Wikipedia http://en. wikipedia. org/wiki/Standard_Chartered_Bank_(Hong_Kong) 7. Chiyu Bank. (2010). Homepage. Retrieved October 28, 2010, from http://www. chiyubank. com/chiyu/en_index. htm 8. Chiyu Banking Corporation. (2010). Retrieved October 20, 2010,from Wikipedia http://en.
wikipedia. org/wiki/Chiyu_Banking_Corporation 9. Tracy ,Sun. (2010,October 13). ?????? Singta. Retrieved from http://hk. news. yahoo. com/article/101012/3/koo6. html 10. Ranking the Brands. (2010). Homepage. Retrieved October 30, 2010, from http://www. rankingthebrands. com/The-Brand-Rankings. aspx? rankingID=84&nav=category Appendix 3 11. Marketing Teacher. (2010). Retrieved October 25, 2010, from http://www. marketingteacher. com/lesson-store/lesson-segmentation. html 12. Porter generic strategies. (n. d. ). Retrieved October 28, 2010, from Wikipedia: http://en. wikipedia.
org/wiki/Porter_generic_strategies#Variants_on_the_Differentiation_Strategy 13. HSBC (2010). Credit Cards. Retrieved October 25, 2010, from http://www. hsbc. com. hk/1/2/hk/cards 14. HSBC (2010). Credit Card Application. Retrieved October 25, 2010, from https://www. hsbc. com. hk/1/2/hk/cards/application? WABFormEntryCommand=cmd_init 15. HSBC (2010). Application Form. Retrieved October 25, 2010, from https://www. hsbc. com. hk/1/PA_1_3_S5/content/hongkongpws/cards/pdf/csadd. pdf 16. HSBC (2010). Green Credit Card. Retrieved October 27, 2010, from https://www. hsbc. com.
hk/1/PA_1_3_S5/content/hongkongpws/chinese/cards/pdf/green_welcome_pack. pdf 17. Credit Card. (n. d. ). Retrieved October 20, 2010, from Wikipedia: http://zh. wikipedia. org/zh-hk/%E4%BF%A1%E7%94%A8%E5%8D%A1 18. NA. .(2008, September 25). ?? :????????? , Mingpao. Retrieved from http://www. mpfinance. com/htm/Finance/20080925/News/fz_fza2. htm 19. HSBC. (2008, March). HSBC HK Green Credit Card. Retrieved October 30, 2010, from http://www. youtube. com/watch? v=xZGd45enUZg ———————– Inbuild Dactyloscopy Information Table Signal bar DIY My favorite My favorite