Full Marketing

PUBLIC BANK

1.0 BACKGROUND OF PUBLIC BANK MALAYSIA

A PREMIER BANKING GROUP IN MALAYSIA

The Public Bank Group is the third largest banking group in Malaysia by asset size with total

assets of RM305.73 billion as at the end of 2013. Public Bank is listed on the Main Board of

the Bursa Malaysia Securities with a market capitalisation of RM68.67 billion as at the end of

2013, and is ranked second among all the public listed companies on Bursa Malaysia

Securities in terms of market capitalisation.

The Public Bank Group primarily focuses on retail consumer banking business with leading

market shares in financing for residential properties, commercial properties and passenger

vehicles as well as in sales and management of unit trust funds in Malaysia. The Group has

been achieving consistent growth in its financial performance, giving it a track record of

unbroken profitability over 47 years since it commenced operations in 1966. Today, the

Group delivers the best in return on equity, cost efficiency and asset quality when compared

to its peer banking groups in Malaysia. As at the end of 2013, the Group achieved net return

on equity of 22.4%, cost to income ratio of 30.7% and gross impaired loans ratio of 0.7%.

47 YEARS OF GROWTH

Public Bank was conceptualised and established as "a bank for the public" by Tan Sri Dato'

Sri Dr. Teh Hong Piow, its Founder and Chairman. On 6 August 1966, Public Bank first

opened its doors for business in Kuala Lumpur with 32 pioneer staff. Within five weeks of its

first opening in Kuala Lumpur, the Bank opened a branch in Melaka, followed by another

branch in Ipoh the following year. Thereafter, the Bank continued to expand its network to

cover Penang, Johor Bahru and progressively covering the Peninsular and by the mid-1980s,

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to East Malaysia. On 6 April 1967, Public Bank was listed on Bursa Malaysia Securities (then

known as the Kuala Lumpur Stock Exchange).

In the early 1990s, Public Bank began its expansion overseas and ventured into banking

operations in Hong Kong, Cambodia, Vietnam, Laos and Sri Lanka.

To-date, the Public Bank Group has grown into a premier banking group with over 17,900

employees within the Group. In Malaysia, the Bank has 258 well distributed branches. The

Group's overseas operations comprise 124 branches, with 83 branches in Hong Kong, 3

branches in China, 25 branches in Cambodia, 7 branches in Vietnam, 4 branches in Laos, 2

branches in Sri Lanka and 2 representative offices in Shanghai & Shenyang.

The Public Bank Group has expanded its service offerings over the years and become a

leading financial services provider. The Group currently offers a comprehensive range of

financial products and services comprising, amongst others, personal banking, commercial

banking, Islamic banking, investment banking, share broking, trustee services, nominee

services, sales and management of unit trust funds, bancassurance and general insurance

products. The Group is serving a large customer base of individuals and business enterprises

totalling over eight million customers in Malaysia and in countries in which the Group

operates.

Public Islamic Bank, a wholly-owned subsidiary of Public Bank, commenced its full-fledged

Islamic banking business in 2008. Its focus is on Islamic consumer financing and retail

commercial financing to business enterprises.

Throughout its 47-year journey of growth, the Public Bank Group's sustained profitability

track record showed its strong commitment and capability to deliver excellence in providing

banking services to its customers, evidenced by the strongly visible PB Brand. Today, the PB

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Brand is synonymous with superior customer service, prudent management, strong corporate

governance, strong asset quality and sustainable profitability.

FOCUSED AND CONSISTENT GROWTH STRATEGY

The Public Bank Group's growth strategy remains consistent, which is to pursue organic

growth in the retail banking business, focusing on retail consumers and small and medium

enterprises ("SMEs"), and striving to further increase its leadership in the retail banking

market. The Group's retail banking business continues to target retail consumer and

commercial loans and financing, deposits and fee-based businesses.

To drive business growth and increase its market share in retail banking, the Public Bank

Group leverages on its well-established customer service infrastructure, processes and

practices to deliver prompt and consistent service to meet the needs of its customers.

In the retail lending business, the Public Bank Group continues to focus on growing

residential mortgages, passenger vehicle financing and lending to SMEs. Given the

increasingly competitive market where loan products are highly commoditised, the Group

actively competes in the market for business growth and increased market share by

differentiating itself through its highly efficient customer service delivery standards. As at the

end of 2013, the Public Bank Group achieved total loans and financing growth of 11.8%

which is higher than the domestic banking industry's growth rate of 10.6%. Public Bank

continued to lead in residential mortgages, passenger vehicle financing and commercial

property financing in Malaysia, with market shares of 19.6%, 26.5% and 33.8% respectively.

The Public Bank Group has a strong franchise in the deposit-taking business. Customer

deposits have been expanding steadily, both in terms of deposit customer base and the amount

of deposits placed with the Group. As at the end of 2013, total deposits from customers of

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Public Bank in Malaysia recorded a growth rate of 11.6%, which is above the domestic

banking industry's growth rate of 8.5%. This demonstrates the high level of customer

confidence in Public Bank in safeguarding their funds.

Growing fee-based revenue remains a key strategic focus of the Public Bank Group, with

emphasis on its unit trust business, bancassurance and various fee-generating products and

services. The Public Bank Group's wholly-owned subsidiary, Public Mutual, accounts for a

significant proportion of the non interest income of the Group. Public Mutual remains as a

dominant player in the private sector fund management industry in Malaysia with total assets

under management of RM62.50 billion, commanding a leading market share of 41.2% as at

the end of 2013 due to its superior fund performance, strong distribution capabilities and

strong branding.

STRONG FINANCIAL RATINGS

The Public Bank Group continues to be accorded strong credit and financial ratings. Standard

& Poor's reaffirmed Public Bank's A-long-term rating and A-2 short-term counterparty credit

rating with stable outlook. Moody's Investor Service also reaffirmed Public Bank's foreign

currency long-term deposit rating of A3 and short-term deposit rating of P-2, and revised its

foreign currency deposit rating outlook from stable to positive following the revision of

Malaysia sovereign rating outlook to positive from stable. Rating Agency Malaysia

reaffirmed the Bank's long-term rating of AAA, the highest rating accorded by Rating Agency

Malaysia, and its short-term rating of P1.

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AWARDS AND ACCOLADES

The Public Bank Group continues to earn accolades and appreciation for its sustainable

financial performance and superior management. In 2013, the Group was honoured with best

bank awards and excellence in corporate governance by national and international

publications, including the Minority Shareholder Watchdog Group. These were in recognition

of the Group's consistent record of financial performance and distinction in the key areas

expected of a banking institution by its shareholders.

Founder and Chairman of Public Bank, Tan Sri Dato' Sri Dr. Teh Hong Piow, continues to be

honoured with awards of excellence for his sterling leadership and extraordinary

achievements, as well as his invaluable contributions to the Public Bank Group, and to the

banking industry in Malaysia and in the region.

CORPORATE SOCIAL RESPONSIBILITY

The Public Bank Group remains committed to support the community as a responsible

corporate citizen. The Group's corporate social responsibility ("CSR") initiatives are focused

on nation building, enhancement of the marketplace, promotion of the workplace and

environment conservation. The Group supports the community through programmes such as

education, graduate employment, professional development and healthcare as well as support

of the underprivileged.

As a long-term business strategy, the Public Bank Group will consistently invest in staff

development to enhance core competencies of the staff, in order to boost their contribution,

productivity and efficiency. The Group also believes that implementation of CSR will

enhance the reputation and standing of the Bank, leading to greater competitiveness and

higher sustainability of returns to its stakehold

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OUR COMMITMENT

In an increasingly competitive financial landscape, the Public Bank Group will never rest on

its laurels. In spite of its success, the Group will strive harder to deliver value to its

stakeholders and sustain its legacy of strong growth and leadership. To its customers, the

Group commits to deliver excellent customer service and to be more innovative in providing

superior financial products and services to meet increasingly sophisticated customer demand.

To its shareholders and investors, the Group will continue to enhance shareholder value via

excellent financial performance and strong corporate governance. To its staff, the Group will

continue to invest in human capital development to enhance core competencies and

productivity.

COMPLIANCE

The Public Bank Group is required to comply with the regulatory Anti-Money Laundering

and Counter Financing of Terrorism (AML/CFT) requirement and the guidelines of the Bank

Negara Malaysia (Central Bank of Malaysia) to combat against the uses of the banking

system for money laundering and financing of terrorist activities.

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2.0 OBJECTIVE

This marketing strategies is for expanding selling and demanding of Public Bank

products and services to a rural people and city folks based on the experience of Public

Bank to increase profit. In particular, our focus more on the following actions:

i. To recreate client responsive product modification

ii. To achieve new or unconventional marketing and product education activities

iii. To create a virtual organization a technology and other existing distribution channels

iv. To build a phased rollout business before commencing operations

v. To achieve a customer value of cross-selling

vi. To achieve personal touch by Technology

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3.0 TYPE OF PRODUCT BY PUBLIC BANK

3.1 CREDIT CARD

Most if not alls today offer credit card facilities to its customer. Public Bank Berhad, one

of the most reputable banks in Malaysia offer both Visa and Mastercard Credit Cards

which are provided under several categories.

Credit card services are among the most popular products offered by Public Bank Berhad

for its customers where they are given a certain credit limit for spending on purchase of

products and services.

As it regulation from the goverment of Malaysia, customers who want to apply for a credit

card must fulfill all the following criteria :

They must be above 21 years of age with a constant source of income

Income per year must be at least RM24,000.

To apply for a credit card, you will need to provide the followings documents to prove

that you have met the criteria. This include :

The latest 3 months payslip from your current employer

Offer letter of the position you are holding

3.1.1 Types Of Card

Public Bank offers a wide range of credit cards which are either Visa or Mastercard.

These cards are then further expanded to provide additional services and privileges for

certain segments of customers which are commonly known as co-branded cards which are

colloboration between the bank and other companies. This means that you will enjoy extra

privileges when you are using the card for the specific co-brand.

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i. Classic and Gold Cards

The Classic and Gold visa and Mastercards are the most common types of credit cards.

Between the classic and gold cards, the main difference is the minimum income you

should have which will the govern the credit limit which will be offered to you.

ii. Visa and Mastercard Platinum

The platinum cards are targeted for those in the higher income bracket where you will

enjoy platinum privileges. However, this is mainly meant for those in the managerial

levels in which they will need more credit facilities.

iii. PB Visa Electron

The Pb Visa Electron card is actually a debit card offered by the bank with credit card

facilities.

iv. PB-Esso Mobil Visa Gold Credit Card

This card comes with privileges like a 5% returns on fuel and other non-fuel purchases at

Mobil, esso and Petron stations around the country.

v. Mutual Gold-PB Visa Platinum

This card is offered only to Mutual Gold and Mutual Gold Elite Members of the Public

Mutual Fund.

vi. PB Visa Infinite Credit Card

The Pb Visa Infinite Credit Card is a special card which is extended by invitation to

privileged customers who will enjoy more benefits and higher credit limit.

vii. PB Visa Commercial Card

The Visa Commercial Card is meant for coporate users which are often extended for its

employers for small operational purchases.

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viii. PB-AIA Visa Gold Credit Card

This card is meant for AIA insurance policy holders who will enjoy 2% cash rebates for

making their payment through the credit card and other purchases.

ix. PB Executive Mastercard

This card is among the standard cards offered by Public Bank. You will only need a

minimum of RM24,000 yearly income. This card is available in different colours to better

reflect the personality of the card holder.

3.2 DEBIT CARD

i. PB Day2Day Visa Debit Card

It is an ATM Debit Card with Visa Worldwide Acceptance for all purchase , enjoy

convenience of Online Transaction/Payment , 0.8% Cash Rebate and Unlimited Cash

Mega Bonus.

There are benefits of PB Day2Day Visa Debit Card :

Card for petrol , grocery and other retail purchases

0.8% cash rebate on any amount spent on petrol and grocery.

Unlimitd cash rebate of 0.3% on any other retail purchase. No maximum cash

rebate.

PB Day2Day is accepted in as many as 29 million Visa merchant locations

worldwide. You can also make online purchase from the convenience of your

home or wherever you are.

Use PB Day2Day Card to pay bills, transfer money or make online purchase via

the internet.

Convenience and no risk of carrying cash

It is good as cash. A fast and easy way to pay and it reduce the risk of carring cash.

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You can withdraw cash at all the domestic and overseas ATM wherever you see

PLUS or Visa logo. It’s absolutely convenient

3.3 UNIT TRUST / PRIVATE RETIREMENT SCHEME

i. Unit Trust – PB Series of Funds

Public Bank distributes a wide range of Unit Trust funds for example PB Series of Funds

that promotes various catagories of funds, namely equity fund, mixed assets fund, balance

fund, bond/fixed income fund and money market fund in order to cater for your various

investment strategies and risk tolorence levels.

ii. Private Retirement Scheme

Private Retirement Scheme (PRS) is a voluntary long-term contribution scheme designed

to help individuals accumulate savings for retirement. Public Bank also distributes a wide

range of PRS funds that you may choose to contribute based on your contribution time

horizon, risk appetite and age.

Both the unit Trust and PRS funds are managed by Public Mutual Berhad, currently the

largest private unit trust company in Malaysia with more than 30 years experience in fund

management.

Service available via Pbe are as follows :

Additional Investment for Public and PB Series of Funds

Additional Investment for PRS

Public Mutual Online Registration

The following services are currently not available via Pbe :

Application of new units

Redemption of existing units

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Switching of existing funds

Transfers of existing units

Exercising of cooling-off right

However, the above service can be done via Public Mutual Online or approach our Bank’s

Financial Executive at your nearest Public Bank branch.

3.4 INSURANCE

i. PB Health Care

PB Helath Care is a life product that has a unoque feature that covers 5 most common

types of diseases in Malaysia ( cancer, stroke, heart attack, diabetes related diseases and

hypertension related diseases). It also provides daily hospital allowance to compensate

you when you are unable to work. There will also be a death benefit payable to the

nominee to lessen financial burden in case the unfortunate happens to you.

This product is created exclusively for Public Bank account holders where payment can be

accepted via credit card/Day2Day Card/Public Bank Savings account.

There are benefit of PB Health Care :

Death Benefit : death benefit is payable in the event the insured erson suffers loss

of life.

Lifestyles Disease Benefit : these is payable in the event the insured person

suffers from any one of the 5 most common types of diseases in Malaysia (cancer,

stroke, heart attack, diabetes related diseases and hypertension related diseases).

Please refer to the policy contract for the details on the payout of the benefit.

Daily Hospital Income Benefit : these is payable in the event the insured person

is confined in the hospital due to illness or accident for a maximum of 120 days

per policy year. The total benefit payable shall not exceed 1,000 days per policy.

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Affordable Premium : these is for as little as RM1.33 per day, depending on your

entry age and the plan chosen.

Easy and Simple Enrolment Process : these is for where no medical examination

is required.

Convenient Premium Payment : it is via credit card/Day2day Card/Public Bank

Savings Account.

ii. PB Care PA

Protect your family from the unexpected and AIA wil take care of your needs for 24 hours

and 365 Days when you need it most. PB Care PA is a general insurance product which

provides compensation for you and your family in the event of injury, disability or death

caused solely by violent, accidental, external and visible means. Where an insured

person’s spouse and children are included for coverage, AIA will pay half of the sum

assured and amount of benefit payable to the Assured. This product is created exclusively

for Public Bank account holders where paymet can be accepted via auto debit from your

Public Bank account.

There are benefit of PB Care PA :

Accidental Death Benefit : Is payable if the insured person suffers loss of life due

to an injury caused by an accident within 365 days from the accident date.

Accidental Living Benefit : Is payable if any accidental event shall result in any

dismemberment condition (according to provisions stated in the schedule o

indemnities) within 365 days from the accident date.

Snatch Protection Benefit : Is payable if the insured person suffers loss of life

due to being a victim of a snatch beneft.

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Medical Reimbursement Benefits : Allows the insured person to claim for a

reimbursement of the medical bills, in th event of accidential injury.

Acidential Hospital Income Benefit : Is payable up to 365 days per accident.

Treatment Benefit : Which covers the in-patient treatment, in the event of

accidental injury.

Easy and Simple Enrolment Process : Where no medical examination is

required.

Convenient Premium Payment : Via auto debit from your preferred account.

3.5 PUBLIC BANK HOME LOAN

The Public Bank housing loan products offered by Public Bank include the 5 Home

Plan, which gives you the option to choose from a fixed, flexi and graduate loan

repayment and the more plan, which is optimised for property refinancing.

The Home Plan give borrowers the flexibility of choosing fixed or floating rate

pricing. There is also a graduate home loan option, which allows interest only payments

for the initial loan period in order to maximise affordability. An Islamic loan plan is

available under Public Bank housing loan which enable you to enjoy fixed profit rates that

are not subject to fluctuation in BLR. Public Bank Home Loans have a lock in period of 3

years, during which borrowers will need to pay a 2% early settlement fee if they decide to

refinance or sell their property. The early settlement penalty will be based on the

outstanding loan.

There are several benefits that you will gain when you sign up to this exclusive Public

Bank housing loan product. Fisrtly, you can save even more as interest rates are calculated

on daily basis. Via Public Bank housing loan, you are entitled to credit cards with

Exclusive Annual Fee waiver for the entire loan tenure for eligible customers. You can

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also option for redraw facility when you sign up to this particular Public Bank housing

loan.

Each of Public Bank’s Home loan plans offer a zero entry cost option. The margin of

financing for Public Bank Home Loans can go up to 100% inclusive of legal fee, stamp

duty and MRTA (Mortgage Term Reducing Assurance) financing. Home loans are

available for a tenure of up to 35 years, or until the borrower reaches 70 years of ages.

Purchase of MRTA and Personal Accident Insurance is compulsory.

Public Bank has an exclusive tool namely Public Bank home loan calculator for you

estimate your monthly repayment. So how to use this Public Bank home loan calculator ?

Just log on to brand new Public Bank official website and search for the costs of the

house, your monthly income and your desired loan tenure into the exclusive Public Bank

home loan calculator, then you will find out how much you could borrow and how much

you need to pay every month. That’s how the Public Bank home loan calculator works.

3.6 PUBLIC BANK SHARELINK

Introducing PB Sharelink, a product specifically designed to assists you with your

shares trading and margin financing needs on the Malaysia Securities Exchange Bhd

(MSEB). It offers you maximum purchasing power through leveraging against existing

funds or collateral to enable you to purchase and invest in shares to capitalise on any

emerging opportunities in the stock market.

Whether you are a first-time investor or are looking alternative investment options to

maximise your returns, we will help you find a plan suited to your needs :

Share Margin Financing : Lets you finance the shares purchased using the

margin balance available in your account.

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Margin Plus Trading : Provides you a combination of margin financing and

leveraged trading based on the value of the collateral you have in your account.

Cash Trading : Purchase shares using your own funds.

Collaterised Trading : For a higher trading limit with no margin financing.

Whichever plan you option for, PB Sharelink will take care of your banking and share

trading/investment needs as well as nominees services, all under one roof.

There are PB Sharelink benefits :

Competitive interest and brokeage rates

No commitment and rollover fees

Margin line of up RM5 million

Higher margin and trading multiples of up to 3.5 times the security value

Earn interest on your credit balance ( applicable to individual only)

Faster processing of your transactions through online routing

View real-tme shares prices and buy/sell shares via Pbe

We also have a team of dedicated share investment executives to assists you with your

trading activities and banking requirements. And its really simple and hassle-free to apply for

share investment service with us.

You can also apply for Share Margin Financing with Public Bank and option to

conduct your share transaction with any of our panel stockbrokers.

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4.0 MARKETING SEGMENTATION

A marketing term referring to the aggregating of prospective buyers into groups

(segments) that have common needs and will respond similarly to a marketing action. Market

segmentation enables companies to target different categories of consumers who perceive the

full value of certain prodcuts and services differently from one another. Generally three

chriteria can be used to identify different market segments which is homogeneity (common

needs with segments), distinction (unique from other groups) and reaction (similar response to

market). Its objective is to design a marketing mix that precisely matches the expectations of

customers in the targeted segments. The four basic market segmentation-strategies are based

on behavioral, demographic, psychographic and geographical differences.

Public Bank realize that there are two big market segmentation which is for rural

people and city folks. Rural marketing is a function which manages all those activates involve

in assessing, stimulating and converting the purchasing power into an effective demand for

specific products and services, moving them to the people in rural area to create satisfaction

and a standard of living to them and thereby achieves the goals of the organization. The rural

market environment is very different from the familiar surroundings of the urban market.

Rural consumers have customs and behaviour that the marketer may find difficult to contend

with. Meanwhile, city folks market environment is bigger that rural area. This is because their

demographic like education, income level, occupation and others is different with those lives

at rural area. Public Bank decides to make a different strategy to sell their product based on

these two market segmentation.

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5.0 RURAL PEOPLE

5.1 Objective

This marketing strategies is for expanding microfinance bank operations to a rural setting

based on the experience of Public Bank. In particular, our focus more on the following

actions:

i. Client responsive product modification

ii. New or unconventional marketing and product education activities

iii. Use of technology and other existing distribution channels to create a virtual

organization

iv. A phased rollout involving taking careful, sequential steps to build business

before commencing operations

The objective of this marketing strategies is to act as a resource for microfinance practitioners

that assists in the formulation and efficient execution of new outreach strategies to rural

clients.

This strategies covers each of the above action, and closes with an analysis of environmental

factors and strategic tradeoffs for other organizations to consider in developing their own rural

expansion plans.

5.1.1 Client-Responsive Product Modification

Public Bank found that the products it developed for the urban and pre-urban markets in

Malaysia did not translate easily into the rural context. They reduced the minimum loan size

of their group business loans and in order to retain the profitability of these loans they form

groups of 15 until up to 20 people. Public Bank takes advantage of the very strong social

cohesion found in rural areas by organizing rural groups into clusters where 5 until 8 groups

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meet on a monthly basis in a central location to avoid loan officers traveling to visit each

group. In some cases, the terms of agreement for the mutual guarantee have been adjusted so

that enforcement is at this cluster level rather than at the group level. For loans, the bank is

treating security requirements more flexibly due to the difficulty of legally registering

property in rural areas as well as the generally lower value of assets owned by small-scale

entrepreneurs. For example, Public Bank is considering alternatives to land titles for land

ownership verification, such as a letter from the local district office. Because most rural

households in Malaysia are only operating one business, at most, and this is controlled by the

male head of the household, Public Bank is starting its business primarily with this audience

in the rural areas. It is Public Bank intention to see how they can encourage women, as new

entrepreneurs in the rural area, to build businesses that serve as supplementary household

income and as a vehicle to transformation.

5.1.2 New Or Unconventional Marketing And Product Education Activities

In particular, Public Bank has found that catering to local opinion leaders, developing a road

show to build brand awareness, and utilizing radio as a key medium of communication are

important components of their strategy that have evolved through their experiences. Public

Bank focus is to develop a brand that the poor associate with an organization catering to their

needs rather than that of a standard bank which is considered exclusive and often prohibitive.

Instead of a focus on a physical presence in the area, OIBM’s goal is to have a virtual

presence for their clients. This is reinforced through the rural-poor friendly distribution

channels that bring the bank to them and their communities through mobile banking, POS

devices and others approach, rather than the typical branch model found at other banks.

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5.1.3 Use Of Technology And Other Existing Distribution Channels To Create A Virtual

Organization

As Public Bank expanded its presence outside of the urban areas, it used its three major

branches as hubs in which outlying areas could be covered through a mixture of mobile units,

kiosks and satellite centers. The goal was to reach rural places where people work and live in

order to reach a greater number of the population. Asit opens more outlets and becomes

virtually present in Malaysia, Public Bank has developed a strategy for initiating coverage in

new areas. Importantly, innovation requires incurring upfront costs related to adjustments that

must be made as the appropriate technologies and channels are developed in each area.

5.1.4 A Phased Rollout Involving Taking Careful, Sequential Steps To Build Business

Before Commencing Operations

The order of rollout optimizes growth opportunities and efficiently uses capital. By taking

careful steps to develop the market before starting operations, Public Bank created brand

awareness and targeted critical business partners and that became first adopters of its

technology, who were crucial in stimulating interest.

5.2 Environmental Factors

These action from Public Bank are given in the context of the environment within the

Malaysia market. Importantly, some of these local conditions dictate rollout strategies that

might not apply in other situations. Practitioners in other areas should consider conditions

such as:

Prevalence of microfinance and other financial services in the area – OIBM faces relatively

low levels of competition from other forms of formal financial institutions in these rural areas

and thus does not face many of the competitive threats that might occur in other locations.

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This factor can impact timing of the phased rollout as well as the amount of resources

required to subsidize early operations.

5.2.1 Infrastructure Conditions

Malaysia has main highways which allow for safe and efficient travel from more urban hubs.

Environments where consistent travel conditions do not exist could impact strategies reliant

on outreach through mobile delivery channels. In addition, technology can be a barrier that

complicates POS or ATM utilization, especially lack of an online access.

5.2.2 Security

Security of staff and assets is a key consideration and while security mechanisms are in place

as agreed with Central Bank in Malaysia, there will be areas where no level of security will

make this kind of operation safe.

5.2.3 Inability To Influence Opinion Leaders

While the types of opinion leaders vary between environments, so too does the ability to

influence them. If it is impossible to obtain positive approval, institutions will have a much

harder time attracting clients with this model.

5.2.4 Ability To Build Coalitions To Create Sustainable Institutions

Public Bank has been able to enter rural areas, in part, by creating partnerships with existing

institutions, such as international companies, aid agencies or other NGOs. These

organizations supplied a sufficient customer base or payment system fee service that provided

the initial financial foundation to enable operations. The support of these organizations

provided Public Bank the opportunity to serve the poor on a sustainable level without having

to shoulder the initial overhead expenses. Because the initial start-up costs were subsidized,

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Public Bank was able to provide services that clients could afford and was sustainable on a

marginal basis.

5.2.5 Client Mobility

Even though Public Bank is taking measures to bring the bank to rural areas, clients still are

required to travel to meet the bank for meetings and to utilize its services. More migratory

populations or restrictive travel areas would diminish the ability of institutions to reach rural

clients.

5.3 Strategic Tradeoff

5.3.1 Longer Lead Time With Advanced Planning vs More Immediate Product Delivery

A sequential process of building awareness and a gradual increase of capacity helps to more

evenly match captive demand with capital availability. An alternative option of initially

building a branch and having excess capacity that can more fully meet client needs would

require much greater initial capital. Competitive dynamics and capital availability would play

into this decision.

5.3.2 Urban Primacy vs Rural Focus

Public Bank has chosen to build out operations in urban areas first before moving into the

more challenging rural locations. Some microfinance institutions might prefer to focus on

rural areas first in order to meet the needs of that segment of the population. The strategy

highlighted above is reliant on support from these urban hubs and might not be as relevant for

a decentralized strategy. Telecommunications issues were a significant challenge in Malaysia

and were an important factor in deciding to start in the urban areas first. Ultimately the

demand from the rural areas and Opportunity’s poverty focus led to the outreach strategy. It is

commonly held that rural savers finance urban borrowers, in that the large deposit accounts in

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rural areas provide the necessary capital from an institutional view for increased lending in

established urban markets.

5.3.3 Creating New Delivery Channels vs Associating With Existing Institutions

An alternative strategy is to partner with organizations with access to rural populations and

use these organizations as the distribution channels for microfinance products. This requires

less management overhead, lower capital requirements, and potentially quicker timelines.

Risks that are faced with partnerships include the inability to control the relationship and the

limitation of services available to clients. Fraud, poor customer service and even client

poaching are all important brand risks to consider when forming partnerships. Public Bank

has attempted to mitigate these risks in its partnerships by looking for partners with similar

objectives, explaining partnerships to managers of both organizations and covering potential

problem points with covenants. Slow response time, particularly with non-profit partners, is a

constant challenge. For example, Opportunity Bank selects agri-businesses to partner with in

giving agricultural loans to smallholder farmers. The agri-businesses provide agronomy

advice as well as contracts to purchase the crops at set prices while Opportunity Bank

provides the loans and savings services along with basic financial education. These agri-

businesses must have excellent reputations with the smallholder farmers and operate in a

professional and profit-oriented manner.

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5.4 Challenges

1. As service is extended to additional rural areas, managing a larger and more

complicated organization from an administrative and resource standpoint is a

challenge that will continue to grow.

2. Achieving profitability in all areas of the country with this outreach strategy.

3. Choosing the appropriate technology to allow for scalability. Public Bank outgrew the

infrastructure capacity of the local smart card provider. The lack of an alternative

choice in providers resulted in growth and utilization constraints.

4. Switching costs associated with the introduction of new technology. As new and better

technologies are introduced into the market, there are tradeoffs to consider given costs

associated with adopting new standards and products as well as the timing of adoption.

Because Public Bank is attempting to push into new areas as a pioneer, it must

consider the pace of innovation and the costs associated with adoption.

5. Remaining focused on holistic transformation given the increased use of technology in

distribution which could potentially reduce the amount and impact of human interface.

6. Developing communication solutions that enable real time transactions.

7. Overcoming the scarcity of skilled labor with the appropriate skills and knowledge

often requiring relocation of qualified candidates from urban to rural areas

8. Educating government officials/regulators regarding unique outlets (mobile vans,

kiosks and satellite centers) that vary from typical branch regulations.

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6.0 CITY FOLKS

6.1 Objective

This marketing strategies is for expanding demanding products and services to city folks

based on the experience of Public Bank. In particular, our focus more on the following

actions:

i. The customer value of cross-selling

ii. The personal touch by Technology

iii. Customer-centric, not product-centric

6.2 Strategy Of The Objective

6.2.1 The Customer Value Of Cross-Selling

The core of our vision-based strategy is “cross-selling” . The process of offering

customers the products and services they need, when they need them, to help them succeed

financially. The more we give our customers what they need, the more we know about them.

The more we know about their financial needs, the easier it is for us to work together for them

to bring us more of their business. The more business they do with us, the better value they

receive and the more loyal they become. The longer they stay with us, the more opportunities

we have to satisfy even more of their financial needs. That’s the mutual benefit of cross-sell.

As a diversified financial services company, we have a clear cross-sell advantage over

companies that offer just a few financial products or that do so through only one channel. But

for a large company to work seamlessly across business lines to understand and fulfill all of

its customers financial needs isn’t easy. It takes years of hard work and dedication. When

accomplished, as in our case, it results in a true competitive advantage.

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By serving our customers well, we want to be the premier provider of financial

services and be known as the best in every product in every market in which we do business.

In retail banking, business banking, credit and investments. We want to be the first provider

our customers think of when they need their financial product.

More sales do not always lead to better service, but better service almost leads to more

sales. Put simply, our product is service. Our value added is our financial advice. The quality

of our service keeps customers coming back for more and is our single biggest driver of

revenue growth. We want our customers to find a friendly face in our bank, hear a warm voice

on the phone and find it easy to do business with us online or on the go. We want them to feel

like they are having conversation with someone interested in understanding them and helping

them succeed financially. When they do come to us with a problem, we want to fix it as

quickly as we can.

Here are 6 time-tested, common sense techniques that may Public Bank used of it:

1) Ask Questions : Consultative selling has been discussed the focus if the

banking industry for decades. In a nutshell, the process begins by clearly analyzing

a customer’s situation before presenting services or products. From the outset, a

failure to cross-sell a brand new customer is a failure to develop a consultative

relationship and a failure to ask the right questions. Without these questions, the

opportunity to open the right services initially or later in the relationship is made

more difficult. In addition, as opposed to going through a long set of questions that

make the banker and the customer feel uncomfortable, the dialogue should be free

flowing and natural. Another option is to engage the customer with tools that can

be used to complete the profile easily such as a tablet device.

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2) Start With The Lowest Hanging Fruit: The easiest sales that can be made

to current customers are engagement services that help a customer use an account

they already own. These ‘sticky services’ include a debit card, online banking,

direct deposit, bill pay, automatic savings transfer, personal line of credit and

security solutions such as privacy protection. These services help to ensure the

customer will use the products they own more frequently, will significantly

improve retention and will help to improve the overall customer experience.

3) Stay Connected : At Public Bank, we endavor to make your banking

experience safe and secure by providing important account related information like

transaction alerts, updates and exciting offers available to you. All the customers

need to do is to ‘Stay Connected’ by updating your latest contact details with us.

Updating latest contact details with us just got easier. Just follow a few simple

steps like fill up the form of ‘Stay Connected’. A single ‘Stay Connected’ form

will help you to update your contact address, mobile number, E-mail ID,

Permanent Account Number (PAN) and link all your banking relationships. This is

because model driven marketing programs usually focus on customers with

broader relationships.

4) Continually Evaluate Upsell Opportunities : Rather than using product-

driven programs that are done seasonally, consider funding more customer-focused

programs that evaluate each customer’s propensity to open one or more of the

products and services offer. Public Bank will evaluate each customer’s

transactional, product ownership and even behavioral characteristics to determine

what would be the most likely next purchase and whatever the propensity to

purchase is high enough to make an offer. The goal is to offer the right product, at

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the right time, to the right customer through the right channel. This takes customer

data analytics.

5) Leverage All Channels : Public Bank never assume that customers

understand all that bank organization offers or absorb communication the same

through all channels. Public Bank must continuosly get to know who the

customers are, understand their needs, are looking out for them and that willing to

reward them for their loyalty. Use as many direct channels as possible to reach out

to current customer base, including email, direct mail, statements inserts, banner

advertisement on bank website, ATM messaging, outbound calling efforts and

others. Digital retargeting of customers who visit the website or are part of direct

mail or email programs also is highly effective and very efficient way to cross-sell

performance.

6) Ask For Referrlas : One of the easiest ways to generate new business

and increase loyalty of current retail or business customers is to ask for referrals. If

a customer is happy with the way they are treated at the bank organization, they

usually want others to know. This is especially true with satisfied small businesses,

private banking customers and with retail customers that are part of bank-at-work

program. And it does not hurt if the bank provide an incentive to the current

customer.

Finally, remember that current customers like to be rewarded for their loyalty.

One of the best way to do this is to remember to include an offer with any cross-sell or

upsell message. Without an offer, the bank may be perceived as simply ‘pushing

product’ without leveraging the relationship value already in place. A strong offer will

not only generate a better response to the communication, but also remind the

customer of the value of doing business with the bank organization.

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6.2.2 The Personal Touch By Technology

We use technology to personalize service, not to depersonalize it. Technology allows

us to connect with our customers in new way every day. It enables our customers to control

when, where and how they want to do business with us, and it gives our customer-contact

team members the ability to quickly access the information they need to earn 100 percent of

every customer’s business. Using technology, we know how many products, which specific

products and who customer has with us. We can also predict the next product they will most

likely need based on account balances, life events, transaction history and how they access the

Public Bank webpage. Technology is also essential for cross-selling, targetted marketing and

protecting confidential information about our customers. We use it every day for analyzing

customer profitability as well as creating and pricing new products and services based on the

depth of existing customer relationships. When we focus our technology resources on services

to customers, we can achieve a true competitive advantage for Public Bank, but technology

alone does not guarantee such an advantage. What’s important is the creativity and speed with

which we put that technology to use to benefit our customers.

1. Digital Communities : Here’s one way Public Bank might connect with

people who need housing loans through digital communities. A prospective house

buyer has joined several online communities that are awaiting the release of a new

development. Many are planning to buy the house when it becomes available.

By joining the conversation, Public Bank might be offers housing loans could

establish itself as a resource for rates and other information. Prior to the house’s

release, Public Bank could develop an enticing offer and market it to these house

buyers. The loan could be executed on a borrower’s mobile phone using a Public

Bank apllications designed specifically for that purpose.

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The threat disintermediation is real and competitors offering various types of

financial services arise every day. Many banks still have the “hometown”

advantage in that their customers know them. They have spent decades, sometimes

centuries, building their names and reputations. That’s a great foundation but the

future is digital and that’s where banks need to be online, on the go and on top of

customer expectations.

6.2.3 Customer-centric, Not Product-centric

Public Bank do not view any product in isolation, but as part of a full and long-lasting

relationship with a customer and with that customer’s total financial needs. We start with

what the customer needs, not with what we want to sell them. Public Bank also want to offer

our products to customers in ways that are most convenient to them. That means all of our

distribution channels such as stores, phone banks, ATMs, the internet and mobile banking

channels are work together, integrated with our products, to benefit customers.

We know customers have a variety of financial needs. So, we do not want to offer our

customers especially new customers that just one product at a time. Public Bank will offer

them packages of products that save them time and money.

When it comes to serving our customers well, we are all salespeople and we are proud

of it. Superb salespeople know the importance of service. Our products are service and advice.

There is no sale without superb service from our entire team and from our customer-contact

people to our operations centers and everyone in between.

1. In-Memory Computing Provides Personal Touch : In-memory

computing is backbone of customer centricity. It provides real-times,

comprehensive and integrated data and predictive analytics. In-memory computing

gives banks new way to tailor products and services and market them directly to

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targeted audiences both online and in the physical world. Banks can be flexible

and fast with product and service offerings, better meeting the needs of each

customer and cementing customer relationships.

2. Get On Board With Mobile Explosion: Mobile is the present and the

future. Improving the mobile banking experience and expanding its capabilities are

essential to retain and attract customers. At this point, most banks do not need

convincing. They know a great mobile experience is fast becoming table stakes for

retail and commercial customers.

3. Go Where The Customers Are : As discussed earlier, online

communities, from groups of friend to those with similar interest, to business

networks, are ubiquitous and becoming increasingly influential. Banks must find

these entry points and inject themselves into ongoing discussions in a content-

based, not sales way. They also need to provide clear value and convenience.

4. PB Credit Card : Ask the customer what they want the advantage from the

credit card and approach them to apply the credit card from Public Bank. If the

customer had one, we can suggest the customer to kill the old credit card then

transfer the unpaid balance and it will change at the lower interest. Public Bank

will offer 24 hours services. In case, if the customers has lost the credit card then

the bank will stop the transaction immediately after get the report and the bank will

replace the credit card within 24 hours.

5. PB Islamic Investment : Nowadays, customers are very concerned about

halal and haram in businesses. They have a lot of information about what happen

actually in the investment world. So that, Public Bank proposes to establish a stock

investment according to Islamic Shariah for Muslim customers. Public Bank will

suggest a few features and benefit for this Islamic Investment. For example, low

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minimum investment amount, enjoy potentially higher return than traditional fixed

deposits, flexible in personalising to the Investment Tenure and specific shariah

compliance and cater to the future needs where the customers needs may be for

their investment or their childrens education purposes.

6. PB Students Care : Public Bank Students Care got you covered. Our

new, flexible policy insures the stuff that matters so you can relax and enjoy

university. Your laptops and gadgets will be cover by us. Public Bank will cover

accidental damage, theft (if your gadget is stolen, we will replace it in 24 hours),

liquid damage (we will replace your gadget , new for old, within 24 hours if it is

unrepairable), cracked screens (we repair cracked screens, unlike some other

providers) and worldwide cover (if you take your gadget abroad with you, it is

covered for up to 30 days). It is depends on the terms and conditions as well.

We understand that healthcare legislation has brought significant changes to

healthcare plan designs and delivery, particularly for institutions of higher

learning. As the bank that provide of health insurance solutions for students, we

help our broker partners and clients manage their student health and wellness

programs with compliant insurance solutions, customized to meet their needs,

responsive claims service and 24 hours access to administrative and student

assistance services. We also provide health, safety and wellness services to help

keep students healthy and help our clients manage their heatlh care costs. The

insured benefits are domestic and international plans, benefit maximum up to RM

100,000 , students accident using public transport, flexible plan terms and

coverages, option for medical evacuation and repatriation coverage, preferred

provider organization and pharmacy benefit manager capabilities and plans

available with no out of area limitations.

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6.3 Challenges

6.3.1 Geographic

The bank may decide to focus on a few, paying attention to the distinguishing characteristics

associated with each location. The needs of urban customers would differ significant from

that rural customers. Public Bank will concentrate on the Housing Loan because it well

demand in urban area compared to rural area. The amount expenses of the urban area are

totally different with the rural area. So that, Public Bank also will introduce and upgrade our

Credit Card features and benefit for customer’s benefit.

6.3.2 Demographic

Demographics are the quantifiable statistics of a given population. Demographics are also

used to identify the study of quantifiable subsets within a given population which characterize

that population at a specific point in time. Demography is used widely in public opinion

polling and marketing. Commonly examined demographics include age, gender, family size,

income, occupation, religion, race, nationality and education. Demographics trends describe

the historical changes in demographics in a population over time. Both distributions and

trends of values within a demographic variable of interest. Demographics can be viewed as

the essential information about the population of region and the culture of the people there.

For city folks, the sales person have to get a full knowledge of the products and services

because most of them have high education where they can seek knowledge at their fingertips

so far. Each of them must have smartphone, so they can get any information as easy as that.

Sales is an important function and a sales person plays a key role in bringing revenues to the

organizations.

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6.3.3 Psychographic

While banks usually take the time to understand demographic information,

psychographic is rare. Here Public Bank strive to understand insight into customer personality

traits, values, attitudes, interests and lifestyles. They are a good basis for identifying

differences in response and are a far better predictor of need. Since all the products a bank

offer should be positioned as the solution to a particular customer’s pain point, banks can use

psychographics as the window to identify the most likely customer to experience the pain

their problem solves.

Market research is a powerful way to identify customer segments using

psychographics criteria. A bank can conduct simple surveys on its own through its branches,

on its website or its social media pages. However, there are many 3rd party research reports

freely available online from the ABA, consulting firms like Accenture and by large banks that

can shed light on how consumers feel. These market research reports include customer

attitudes on mobile banking, branch banking, bank fees, credit card usage, online banking,

mobile payments and loan products.

For Public Bank, some of the more important psychographic factor for customers are:

Evangelists, loyalists, occasional bank users or reluctant customers?

Are they impulse buyers, crowd followers or the analytical type?

Are they first moves on new bank products or late adopters?

Comfort for conducting banking online or mobile device

Ability to get to a bank on a night or a weekend given current banking hours

Preference for speaking to someone face to face rather than by phone when conducting

certain transactions

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Willingness to drive to a bank’s ATM versus using the cash bank services at a grocery

store

Importances is the term used to identify the importance a customer attaches to specific

product benefit and characteristics. When customers can be grouped together based on the

similarity of their importances, Public Bank can create “benefit” segmentation. This strategy

has been particularly effective for credit card products and suitable for city folks since their

expenses and income are high. “Cash back” cards appeal to customers who prefer a benefit

that is transparent and simple. This type of incentive works best for consumers who pay off

their balances every month. Other customers prefer rewards programs tied to miles and/or

points. There is often an annual fee for these cards, and they appeal to customers who may

value status and perks as much as the actual value of the benefit from the rewards programs.

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7.0 CONCLUSION

Any effort in doing customer segmentation is a good investment for our bank, Public Bank.

Hopefully this primer will get Public Bank started in thinking further about the composition

of your current and desired customer base. The more time Public Bank take to understand and

segment our bank’s customer, the more successful it will be utilizing sales, marketing and

product design investment efficiently. Understanding our segments will allow Public Bank to

take next step towards doing Customer Lifetime Value analyses (CLTV) so that Public Bank

can determine how many marketing value that should spend per customer.

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8.0 REFERENCES

Banktech. (2014). How Banks Can Stay On Top Of Customer Expectations. Retrieved

November 16, 2014, from http://www.banktech.com/infrastructure/how-banks-can-

stay-on-top-of-customer-expectations/a/d-id/1296854?

Edward. S.J. (2000). Malawi Banking Sector. Life Issue, Malawi. Retrieved November 15

2014.

Icicibank. (2014). Stay Connected. Retrieved November 15, 2014 from

http://www.icicibank.com/stayconnected.page

Ismail Yaakob. (2003). Malaysia Banking Industry. Banking Weekly. Ilham Publisher.

Retrieved November 13, 2014.

Public Bank. (2014). Public Bank Credit Cards. Retrieved November 16, 2014, from

credit card.com.my/publicbank

Public Bank. (2014). Types Of Products. Retrieved November 15, 2014, from

http://www.pbebank.com/typesofproducts/publicbank

Public Bank Homepage. (2013). Company Profile. Retrieved November 10, 2014, from

www.securities.com/Public/companyprofile/MY/Public_Bank_Berhad.html

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