Critically analyse the marketing strategy and marketing mix of a recent successful marketing innovation in the financial services industry. assignment

As a result of these observations, the Bank of America released a banking package that included a visa debit card that when used would round up the transactions to the nearest dollar amount and then transfer the difference between the actual purchase and the increase to a linked savings account. A number of additional incentives were added to this package to attract customers such as a promotion that the bank would match the savings transfers up to $250 per year.

Marketing Strategy: The main objective and subsequent marketing strategy of the bank was to encourage as many people as possible to open new accounts. By doing this, the bank aims to dominate the American retail banking sector and strive to become a market leader amongst its competitors by obtaining the largest market share through better value for money banking products, better customer services, tailored banking solutions that suit customer needs and high promotion spending.

In keeping with the bank’s strategic goal of market dominance, it was important that this concept appeal to as many of the American population as possible. While the banks competitors were offering higher interest rates on savings accounts, it was the discipline of saving that the average consumer required. The “ Keep the Change” program was an ideal way (albeit rather gimmicky) to turn spending into forced savings. Differentiation and Positioning One of the difficulties of differentiation in the financial services sector is that many new concepts and products can be easily imitated thus quickly eroding any competitive advantage.

Due to the innovative and creative design of the “ Keep the Change” concept, it has been difficult for competitors to imitate the program thus allowing Bank of America to have full market share of the branding opportunities that have evolved from this unique selling point. This differentiation strategy appealed to the American consumer’s needs on a number of levels: 1. They did not need to alter their spending habits. 2. Financial transactions were rounded thus allowing for simpler calculations. 3.

The “ Keep the Change” program was heavily promoted via every available communication mix possible in a fully integrated marketing promotional campaign. In keeping with the unique theme, the product was launched via a marketing event or a type of press conference in the Grand Central Terminal in New York. A large red sofa containing coins stuffed into the cushions was placed in the centre of the station and the public were invited to look for the change. This launch strategy appealed to consumers because it appealed to their sense of touch as well as that of visual and audio.

They were invited to get involved in the promotion and to have a sense of the benefits that the new program offered. This marketing tool was also replicated in malls around the United States in cities such as Boston, Dallas, Los Angeles and Miami. Customers could then sign up then and there and were later encouraged to visit the branch to further discuss their savings needs. Accompanying the launch of the program was a press release which highlighted the media coverage and market statistics surrounding the negative savings rates amongst American consumers.

Busier branches would focus on speed of service with minimal waiting periods. Processes Due to various technological advances, bank delivery processes include the availability of online banking and mobile banking facilities to allow customers to conveniently complete their banking needs from home or on the go. Bank of America have made great innovative strides to allow customers to use their online facilities to handle many of their day to day banking and payment requirements.

Conclusion The success of Bank of America’s “ Keep the Change” program was revolutionary. The product combined with the overall marketing strategy was carefully researched and implemented in a way that appealed to the American banking consumer. This is evidenced by the statistics surrounding the concept. It had attracted 2. 5 million customers in less than one year to open more than 700, 000 new checking accounts and one million new savings accounts.