Economic Factors Influencing RBTTs Marketing Strategies Order Instructions: You will be required to undertake an individual written paper related to a particular organization of your choice.
This organization can be one you work for or one you are
familiar with. The overall aim is to evaluate ways in which changes within the global
economy might impact marketing strategies and activities.
You will be assessed on your ability to:
A. Within a potential future economic scenario, critically evaluate the company’s
strategies for sustainable competitive advantage, segmentation (including
targeting and positioning) and branding
B. Using the same future economic scenario, critically evaluate the potential impact
of the company’s strategies on customer behaviour
C. Identify and critically assess opportunities for growth within the organisation’s
MACRO environments
D. Make clear links to the marketing theory that underpins your work
E. Write a logical, well-presented and accurately referenced piece of work
The length of the report will be 2,500 words +/- 10%. The word count limit is there to test
your skills of conciseness and focus – keep your work relevant to the subject matter.
Key sections with suggestions as to word count:
Contents Approximate
Word Count
1. Brief summary statement of economic
factors your chosen company will operate in ( 200 words)
2. Potential impact on marketing strategies
under the following headings: ( 1400 words )
• Competitive advantage
• Segmentation, targeting and positioning
• Branding
3 Potential impact on customer behaviour and
how it might change ( 400 words )
4 Identify 2 specific growth opportunities in the
company’s macro environments and set out
what the company should do to take
advantage of these ( 500 words )
5 Bibliography (not included in the wordcount)
You will be awarded marks for each of the above sections from with weightings
applied to each.
Submission instructions:
You must submit ONE SINGLE FILE written in Arial 12 with one and a half (1 ½ ) spacing
and the text should be justified.
Note: This is a marketing project and not an economics project. Your marketing lectures will
cover the theoretical content and higher marks will be awarded for.
NB. Please write on businesses in the Caribbean e.g. telecommunication companies ( Cable and Wireless or Digicel or Flow) Banks e.g RBTT, CIBC FirstCaribbean, Bank of Nova Scotia, or Supermarkets ( Super J) ( All business listed are found in the Caribbean)
Economic Factors Influencing RBTTs Marketing Strategies Sample Answer
Table of Contents
- Introduction……………………………………………………………………………….3
- A Brief Statement of Economic Factors the will Influence RBTT’s Operations…………..4
- Analysis of the Potential Impact of Global Economy Changes on RBTT’s Marketing Strategies…………………………………………………………………………………..4
- Competitive advantage…………………………………………………………….5
- Segmentation, targeting and positioning…………………………………………..6
- Positioning…………………………………………………………………………7
- Analysis of the Potential Impact of Global Economy Changes on Consumer Behaviour and Possible Change Trends………………………………………………………………8
- Growth Opportunities in RBTT’s Macro Environment and the Potential Competitive Advantage…………………………………………………………………………………9
- Conclusion……………………………………………………………………………….11
- References……………………………………………………………………………….12
Introduction
As global economy conditions continue to change rapidly and the international market becomes highly competitive, organisations ought to embrace appropriate marketing strategies in order to gain competitive advantage over their competitors. According to Laermer and Simmons (2007) definition of marketing strategy encompasses both long-term and short-term activities dealing with the analysis of an organisation’s initial strategic position, evaluation and selection of marketing approaches that are market-oriented subsequently enabling the organisation goals as well as its marketing objectives to be achieved (Homburg, Kuester and Krohmer, 2009). This paper evaluates ways in which global economy changes might impact upon marketing strategies and activities of RBTT within the Caribbean region. The paper is organised into four main sections covering the keys features that characterize the marketing strategies and activities undertaken by RBTT in order to achieve a sustainable competitive edge in the market. First, a brief summary of economic factors RBTT will operate in are stated. Second, potential impact of changes with global economy on RBTT’s marketing strategies in terms of competitive advantage, market segmentation (i.e. targeting and positioning) as well as branding are is discussed. Third, potential impact of changes with global economy on RBTT’s customer behaviour and its possible change is also discussed. Fourth, two specific growth opportunities in the RBTT’s macro environment are identified and a discussion of how they can be exploited to the bank’s advantage discussed. Finally, the paper concludes by highlighting the importance of aligning RBTT’s marketing strategies and activities for its advantage.
A Brief Statement of Economic Factors that will Influence RBTT’s Operations
RBTT is among the largest banks in the Caribbean and through its extensive banking network it offers diverse financial services by providing commercial and personal banking, investment and corporate banking, wealth management, asset and trust management as well as insurance services (RBTT, 2015). The bank also serves a wide range of clientele including individuals, small and medium enterprises, governments as well as multinational and regional corporations (RBTT, 2015). However, the bank operates in a region and economy sector characterised by numerous economic factors that are likely to vary with changing global economy. This is attributed to the fact that, economic factors constitute some of the basic elements that influence businesses’ financial matters such as interest rates, taxation, labour, government policy and management (Aaker, 2008; Shaw, 2012).
As a result, changes in economic factors are often accompanied by variations in interest rates (i.e. the money charged on loans). Subsequently, there is a direct effect of changes in interest rates on the total or overall prices to be paid on products by borrowers. This means that interest rates determine when, and whether, they will influence consumer purchases of homes, furniture, land, cars, as well as other items likely to be bought on credit. There are usual increases of interest rates during inflation periods, and inflation is a common phenomenon in the Caribbean region and is expected to influence RBTT’s marketing strategies in the market (Baker, 2008).
Analysis of Potential Impact of Global Economy Changes on RBTT’s Marketing Strategies
According to Aaker (2008) the thought of loosing competitive advantage over competitors is the cause of greatest fear the management of any business organisation can fathom. Hence, as changes within the global economy continue to unfold, businesses devise innovative marketing strategies and effectively implement them through feasible marketing plans that are excellently prepared (Baker, 2008). As a result, RBTT’s marketing strategies as well as activities to implement them will be potentially impacted by changes within the global economy (Homburg et al., 2009). Thus, the need for RBTT to make the necessary amendments on its marketing strategies and activities for continued competitive advantage over its competitors in the Caribbean’s banking sector will be inevitable.
In particular, potential impact of global economy changes on the marketing strategies adopted by RBTT will be manifested in three critical aspects such as competitive advantage, market segmentation (through targeting and positioning) as well as branding. Analysis of such potential impact is discussed as follows:
- Competitive advantage
RBTT can leverage of the existing environmental factors to achieve competitive advantage. For instance, it can monitor its customer behaviour to develop appropriate marketing strategies for enhanced direct marketing. RBTT can seize available opportunities in the market to achieve a competitive advantage against its competitors in the banking sector within Caribbean region. For example, the bank can leverage on banking technologies to implement advanced information systems for increased operational efficiency and reduction of costs. In addition, RBTT can use technology to increase its utilisation of the Internet in developing new marketing strategies and innovative marketing plans including online advertising which is relatively cheap and efficient (Homburg et al., 2009). Hence, RBTT can innovatively use these banking technologies for its advantage to expand its customer base which is critical for the bank’s growth. Similarly, RBTT can innovatively develop new products and services to be in the forefront to satisfy emerging customer needs and this is an important strategy for the bank to achieve continued customer loyalty. As a result, RBTT can combine these growth opportunities to improve or diversify products and services for its advantage (Baker, 2008).
- Segmentation, targeting and positioning
Market segmentation is undoubtedly one of the most powerful marketing strategies adopted by RBTT to ensure that it effectively services its customers in various segments of the market. In particular, RBTT offers a wide range of product assortment through its services and products ranging from credit facilities and current as well as saving accounts to automated and transfer services (RBTT, 2015). Three main services offered by the bank include: accounts (i.e. current accounts, savings accounts, saving plans, standard savings accounts, insured savings plans, and term deposits as well as youth savings account); general loans (i.e. study loans, travel/vacation loans, personal loans, asset purchase loans, mortgages as well as commercial loans); trade services (i.e. letters of credit, payment guarantees, performance guarantees, documentary collection, bid bonds as well as standby letters of credit); transfer services (i.e. international and local transfers, automatic transfers, money gram, pre-authorized automatic payments, as well as standing orders); card services issuance (master cards, Visa cards, debit cards as well as ATM cards such as Cirrus/Maestro); automated and electronic banking services including the RBTT Netbank; insurance (i.e. medical insurance, life insurance, pension insurance as well as car insurance); and finally personal banking and investment services (i.e. trading and investment advise). In addition, RBTT’s market segmentation is focused on three market segment such as mass clients, personal banking and corporate banking. Through these diverse products and services targeting different market segments to ensure that RBTT serves its varied clientele (RBTT, 2015).
Positioning is another important aspect of market segmentation and RBTT has embarked on an ambitious regional expansion strategy which ensures its products and services are closer to customers. To further its market positioning RBTT has adopted multi-channel approach in meeting it clients such promotion and advertisements which has enabled the bank to reach a wider population hence earning them the name Curacao (RBTT, 2015). For further strategic positioning in the market RBTT use ATM machines across the Caribbean region to enable people to conveniently deposit and withdraw cash at any time thus taking banking services closer to people (RBTT, 2015).
- Branding
RBTT began its aggressive branding strategy instigated by the changing global economy and embarked on its expansion program by opening subsidiaries across the Caribbean region now carrying the brand RBTT (RBTT, 2015). Changes within the global economy have significantly influenced RBTT’s branding since it entered the Caribbean banking market. For instance, the marketing influences that have been critical for the bank have prioritised on promoting RBTT’s brand image in the market. In its branding strategy, the bank embraced the language of the market by changing its language from English to Dutch and Papiamento and also it continues with communication strategies that ensure that RBTT is in touch with its customers as a critical in promoting the bank’s branding strategy (RBTT, 2015). Furthermore, RBTT enhances its image in an ambitious branding strategy by implementing a new brand as well as logo (image) through donations (e.g. educational projects) and sponsoring (e.g. Curacao Little League) as strategies to ensure the bank’s brand is wide spread. RBTT’s sales approach by organising regular campaigns also significantly contributes to the bank’s branding. In addition, product innovations which results to development of new products and services play a crucial role in enhancing RBTT’s branding when customers associated them to the bank.
Analysis of Potential Impact of Global Economy Changes on Customer Behaviour and Possible Change Trends
A clear and succinct understanding of customer behaviour is the most valuable information any business should always have in order to be successful (Homburg et al., 2009). This is attributable to the fact that, across economy sectors customer behaviours tend to change especially on basis of prevailing changes within the global economy, which necessitates the need to track such changes through customer surveys to determine the underlying causes and undertake appropriate corrective measures (Baker, 2008). For instance, changes within global economy are likely to have potential impact on the behaviour of bank clients in terms of deposits, borrowing and seeking of other financial services and the trend of the impact may either change for better or worse depending on prevailing changes within the global economy. As a result, banks in general need to regularly conduct analysis the behaviour of their clients because this could be strategically helpful for the bank’s management in predicting or forecasting on whether the customer is active or non-active (Aaker, 2008). If customer behaviour analysis indicates that a considerable number of the bank clients are non-active or dormant, this acts as an awakening call for the bank to take up pro-active action targeted to such customers in order to keep them as stable and active customers of the bank in future by undertaking the necessary interventions to ensure they do not switch to competitor bank (The Marketing Donut, 2015).
Considering a foreseen inflation in the global economy, customer behaviour of RBTT’s clients will be potentially impacted. This is due to the fact that, the increase in interest rates which accompany inflation caused by changes in global economy reduces deposits and borrowing by customers as well as declining demand for other financial services attributed to tough economic conditions during periods of inflation (Shaw, 2012). As a result, in order for RBTT to mitigate the potential negative impact caused by the accompanying customer behaviour, there is need to always respond swiftly by developing appropriate incentives such as increasing loan repayment period, providing free consultancy services on viable investments, and devising targeted marketing directed to specific customer groups (The Marketing Donut, 2015).
This potential impact of global economy changes on customer behaviour might change depending on the direction the changes within global economy (Shaw, 2012). For instance, if the inflation period prolongs, the impact on customer behaviour trend might persist or continue to change for the worse; whereas if the inflation period ends, the impact on customer behaviour will definitely change for better. Thus, the management of RBTT within the Caribbean region should always ensure that the bank conducts regular analysis of customer behaviour with regards to changes within the global economy to monitor changes in customer behaviour so that when a negative trend is observed, appropriate marketing strategies are rolled out to mitigate the negative impact (The Marketing Donut, 2015).
Growth Opportunities in RBTT’s Macro Environment and the Potential Competitive Advantage
The ability of any business organisation to seize growth opportunities presented by the prevailing market or economic conditions is critical to achieving sustainable competitive advantage over its competitors in the market (Shaw, 2012). As a result, the seized growth opportunities catapults the business to higher heights compared to its competitors subsequently increasing its profits which eventually enable the business to strengthen its financial muscles. Over the years, RBTT’s operations in the Caribbean region have undergone tremendous growth and development financially, technically as well as in terms of human capital as a result of the bank’s ability and strategies in seeking out and indeed in creating or seizing growth opportunities presented by its macro environment in the interest of its staff, customers and shareholders (RBTT, 2015). However, there are numerous growth opportunities identified in RBTT’s macro environment but only two specific growth opportunities among those identified are to be discussed in this paper together with how the bank can take advantage of them in order to achieve sustainable competitive advantage against its competitors in the market. In particular, the two specific growth opportunities identified are: technological advancements in banking and development innovative/new products and services to meet growing customer needs.
Over the last few years, the banking sector has experienced tremendous technological advancements that have revolutionized the traditional way of doing things (Shaw, 2012). Hence, technological advancements in the banking sector within the Caribbean region and the world over present an immense growth opportunity for RBTT in its macro environment. Technology has over the years undisputedly being the engine of banking sector growth and development. Also, much of the research carried out on the influence of technology on growth of banks show that rate at which change occur in technology as well as market competition intensity are without any doubt the fundamental environmental factors that affect an organisation’s marketing strategies, functioning and performance. Hence, RBTT can leverage on the existing banking technologies to improve its operational efficiency, reduce labour costs, develop and launch new marketing strategies including online presence (Shaw, 2012). These outcomes of embracing banking technologies provide a growth opportunity for the bank because they can be utilised to increase the bank’s profitability and increase its customer base. The other growth opportunity for RBTT in its macro environment is the development of innovative products and services to meet customer needs including products such as tailor-made VISA cards as well as convenient payment services.
RBTT can seize these growth opportunities and take advantage of them to achieve a competitive edge against its competitors in the banking sector within Caribbean region. For example, the bank can leverage on banking technologies to implement advanced information systems for increased operational efficiency and reduction of costs. In addition, RBTT can use technology to increase its utilisation of the Internet in developing new marketing strategies and innovative marketing plans including online advertising which is relatively cheap and efficient (Homburg et al., 2009). Hence, RBTT can innovatively use these banking technologies for its advantage to expand its customer base which is critical for the bank’s growth. Similarly, RBTT can innovatively develop new products and services to be in the forefront to satisfy emerging customer needs and this is an important strategy for the bank to achieve continued customer loyalty. As a result, RBTT can combine these growth opportunities to improve or diversify products and services for its advantage (Baker, 2008).
Economic Factors Influencing RBTTs Marketing Strategies Conclusion
In conclusion, the aligning RBTT’s marketing strategies and activities is important in ensuring that it achieves competitive advantage. For instance, the bank can leverage on the changing global economy in its market segmentation and branding to attain competitive advantage over its competitors. Furthermore, RBTT can monitor customer behaviour with regards to changing global economy and develop appropriate marketing strategies, while at the same time seizing growth opportunities in its macro environment for its advantage.
Economic Factors Influencing RBTTs Marketing Strategies Bibliography
Aaker, D. (2008), Strategic Market Management. New York, NY: McGraw-Hill.
Baker, M. (2008), The Strategic Marketing Plan Audit. New York, NY: Prentice Hall.
Homburg, C., Kuester, S. and Krohmer, H. (2009), Marketing Management: a Contemporary Perspective, 1st Edition. London: CRC Press.
Laermer, R. and Simmons, M. (2007), Punk Marketing. New York, NY: Harper Collins.
RBTT (2015), Corporate Profile. Retrieved from http://www.rbcroyalbank.com/caribbean/rbc-in-the-caribbean/corporate-profile.html (Accessed on 22nd November 2015).
The Marketing Donut (2015), Marketing Strategy. Retrieved from http://www.marketingdonut.co.uk/marketing/marketing-strategy (Accessed on 22nd November 2015).
Shaw, E. (2012), “Marketing strategy: From the origin of the concept to the development of a conceptual framework.” Journal of Historical Research in Marketing, Vol. 4, No. 1, pp. 30–55.
