TKF_MPP_March_2012_13502161

Marketing Planning Process CIM Membership No13502161

Sampath Bank Current Accounts Page 1

Marketing Planning Process March 2012

Membership Number: 13502161



Chosen Scenario: Medium term marketing plan for Sampath Bank Current accounts to changes in the external environment

Task One Page

Rationale for the scenario 3 Marketing Audit 4-9 Task Two 2.0 Medium term marketing plan current accounts of Sampath bank 11 2.1 Sampath Bank Mission 11 2.1.1 Market overview 11 2.2 Key Issues and Critical Success Factors 12 2.3 Key opportunities 13 2.4 Assumptions 13 2.5 Objective 14 2.6 Strategy 15 2.6.1 Segmentation 16 2.6.2 Targeting 16 2.6.3 Positioning 17 2.7 The Marketing Mix 17 2.7.1 Product 17 2.7.2 Price 18 2.7.3 Place 19 2.7.4 Promotions 19 2.7.5 People 19 2.7.6 Process 20 2.7.7 Physical Evidence 20 2.8 Implementation 20 2.9 Action Plan 22 2.10 Budget For Sampath Current accounts 23 2.11 Monitoring and Control 24 Task Three 3.1 Benefits of marketing plan for Sampath Bank in responding to changers in the external environment 26 3.2. Role of marketing Audit and problems of information gathering 29 3.3 Justification of strategy through Segmentation, Targeting and Positioning 32 3.4 Issues may encountered when implementing a marketing plan and proposal for resolving them 35



Medium term marketing plan for Sampath Bank Current accounts to changes in the external environment

Rationale for the scenario

Sampath Bank PLC, a leader in innovative and technological advanced banking, reiterates several new features introduced to enhance customer experience. Adding convenience and accessibility to banking, Sampath Bank has extended the cheque clearing deadlines giving their customers additional advantage to deposit cheques at any of the Bank’s 196 branches island wide and introduced “Sampath Easy Cheque Deposit” (ECD) system.

According to the external factors we could identify those current accounts get affected by the changers in the external environment. It may occur threats and opportunities. Planning in the context of opportunities due to below external environment changers

• Political stability, • After defeating the war opened up North and East provinces • GDP growth • Expansion of Business

New business and companies need open their current accounts to value exchange so banks starting to come up with new promotions and facilities to catch up new customers and retain existing customers. With increase the of market size and growth in economy Sampath bank need to fight and win the market because opportunities arrived in the industry.

With these changers in external environment Sampath bank has to change the approach and set new strategies to win the market share. Therefore this assignment will be focusing on developing a medium term period marketing plan for Sampath bank Current accounts to win the market with the new opportunities occurred by changers in external environment.



1.0 Marketing Audit Internal Environment Analysis 1.1 SWOT Analysis

Strengths • well-built reputation of the Sampath bank • Sampath Bank network expanded to 158

branches • Access from anywhere, 24 hours a day, 7

days a week • Keep track of all cheque transactions with

SMS Alertz on to customer mobile. • Cheques can be submitted electronically at

selected ATM machines 24/7 • Sampath Bank operates with a

196 branch network and 245 Automated Teller Machines.

• Well trained and Experienced capable staff • High brand positioning • Award winning Accounts & IT systems

"South Asian Federation of Accountants" - SAFA Award 2010, National Best Quality Software Awards 2010

• Using high quality technology, R & D

Weaknesses • Conflicts between inter departments • Lack of training for all staff • Insufficient internal marketing activities • Managing conflicts • Less focus in Risk Management

Opportunities • Opening North & East provinces markets

and business expansion • Present economy growth and new

investment coming in. 6.9% GDP growth in 2010 country comparison to the world: 25

• Increase usage of cheques in Sri Lanka 5% 2008 to 2009

• Political stability due to end of war and no more elections for next four years.

• Increase usage of modern technology to provide new systems of security, database

• Improvements in ICT to cooperate with customers to enhance the delivery channels (social media networking, internet)

Threats • Impact of global economy meltdown • New entrants coming in to banking Industry • Strict CBSL regulations on defaulters when

debt collecting • Reduction of interest rates by the

government • Virtual banks • Customers switching and banking with

many banks • Increase of deception activities



1.2 McKensey’s 7S Framework Style

Top management focus on long term growth. Sampath bank constantly strive to bring technologically superior banking closer to Sri Lanka lives

Structure Well trained and specialized staff to handle customers. Ensuring speedy communication, planed coordination among all participants with Sampath bank

Systems

Sampath Bank’s Network Service Centre. Flexibility, Inform collecting and updating, Creating database and knowledge management

Staff

A total of 2,688 employees are part of Team Sampath Bank, Mangers are of required experience and professional qualifications. Quality staff with correct attitude towards Bank objective.

Strategy

Strong marketing on current accounts and keeping the cheque return rate low, gain the confidence of depositors. Investment on R&D

Skills

Employees receiving regular performance and career development reviews. Identifying skills gaps

Shared values

To be the Growing Force in Sri Lankan. Make managers accountable and responsible for their work. Create a performance driven work culture



External Environment Analysis 1.3 Pestel Analysis Factors Impact Importance

+ or - High Medium Low Political Factors Political stability after the war period + Increase the branches of Government banks - Government support for businesses ex: Tax reduction, Increase infrastructure

+

Economical Factors Steady exchange rates + Interest rates reduction by Central Bank of Sri Lanka(CBSL)

-

Growth In Economy GDP: $49.55 billion. Annual growth rate: 8%

+

Increase Inflation rate (consumer prices): 5.9% (2010 est.) 3.4% (2009 est.)

-

New market open up in North and East provinces after the war

+

Socio-cultural Factors Growing old population enhance usage of internet and social media + People looking for Branded Products and social recognition

-

Lack knowledge to use current accounts - Increase the overall cheque returned rate in Sri Lanka

-

Technological Factors Usage of advance technology, Internet access and SMS alerts facility to current accounts holders

+

Reduce the time consumption and high security level

+

Eco- logical Factors Gaining reputation through CSR projects + Environmental pollution (Increasing usage of papers for cheque)

_

Legal Sri Lanka banking act, No. 30 OF 1988 + Central Bank of Sri Lanka(CBSL) controls the banking industry

-

Government regulation to decrease interest rates for serving accounts & credit cards

-

Marketing Planning Process

Sampath Bank Current Accounts

1.4 Porter’s five forces

1.5 Competitor analysis

Bargaining power of Suppliers (Low)

The power of supplier is low due to the number of suppliers in the market, Bargaining Power of

material suppliers are low with price competition and packages

Bargaining power of Customers (High)

The bargaining power of customers are high for Current account users due to variety choices and

banks make to product attractive by offering attractive packages and benefits with less

opening balance and charges.

The reactions of competitor banks are high due to the expansion in the market and growing economy. Major players in the banking

industry are trying to become the best in the market while competitors follow them to increase reaction.

DFCC4%

Standard Charted Bank6%

Commercial Bank12%

Pan Asia Bank4%

Indian Overseas Bank

4%

Seylan Bank8%

Market share of current accounts in Sri lanka


Bargaining power of Suppliers (Low)

The power of supplier is low due to the number of suppliers in the market, Bargaining Power of

material suppliers are low with price competition and packages

Threat if new entrants (High)

The threat of new entrants are high because due to the growth in open economy, new Local and

International banks are coming into play (eg;ICICI, Indian Overseas)

Bargaining power of Customers (High)

The bargaining power of customers are high for Current account users due to variety choices and

banks make to product attractive by offering attractive packages and benefits with less

opening balance and charges.

Threat of substitutes (Low)

Credit cards and debit cards as indirect substitutes are there, but the level of threat is medium to low because a credit & debit cards only satisfy the need of some extent to credit facility and safety of the money with people,

Rivalry of competitors (High)

The reactions of competitor banks are high due to the expansion in the market and growing economy. Major players in the banking

industry are trying to become the best in the market while competitors follow them to increase reaction.

Peoples Bank

HNB11%NTB

10%

Other7%


CIM Membership No13502161

Page 7

Threat if new entrants (High)

The threat of new entrants are high because due to the growth in open economy, new Local and

International banks are coming into play (eg;ICICI, Indian Overseas)

Threat of substitutes (Low)

Credit cards and debit cards as indirect substitutes are there, but the level of threat is medium to low because a credit & debit cards only satisfy the need of some extent to credit facility and safety of the money with people,

The reactions of competitor banks are high due to the expansion in

Sampath Bank11%

Peoples Bank10%

BOC13%




Sampath bank current accounts having a major role in current accounts market, peoples bank and Bank of Ceylon which are government owned banks, well established and people trusted banks in Sri Lanka due to that both banks having 10% & 13% market share. HNB, NTB, Commercial and Seylan banks which are belongs to private sector has fast growth in the industry. Reason why they growing fast are use new technology, marketing oriented operation and having modern day banking systems. Sampath Bank having 12% markets share which is good place in the market. 1.6 SWOT of two competitors – BOC & HNB BOC HNB Strengths Government owned Innovative bank Long established Well established bank name in SL Use latest technology Weakness Poor service No range of current accounts Lack of technology Slow expansion Government intervention Opportunities Move in to E Banking Move in to new markets North &

East Move in to new markets North & East

Threats Dependent on existing customer

base Increase competition

More pvt banks coming in



1.7 Sustainable Competitive AdvantageMicheal Porter’s Generic strategy explains in creating sustainable competitive advantage there are 3 strategies Cost Leadership, Differentiation or Focus. Sampath competitors.

In order to achieve competitive advantage Sampath Bank follows operations. Why differentiation? • Sampath Bank has made its mark as a complete service provider for its customers. As technology

advances, Sampath Bank providing many facilities such as online banking,Sampath SMS Alerts. • The Sampath bank provides the service of ATM / Debit Card & Creadit

convenient and safe payment tool. It totally eliminates the need to carry cash and make payments through it.

• Three variety of current accounts to different customers 1.8 Sampath Banks list of current accountsSampath Current Accounts Sampath Supreme Accounts Sampath payment guaranteed Cheques Sampath Bank the pioneer of innovative banking in the island. high technology and facilities for customers likemethod to fastest cheque clearing. Other than current accounts with other products like personal serving accounts, credit cards, personal loans, leasing they made differ from competitors

Cost leadership

Differentiation

Stuck in the


Sustainable Competitive Advantage Micheal Porter’s Generic strategy explains in creating sustainable competitive advantage there are 3 strategies Cost Leadership, Differentiation or Focus. Sampath bank shows clear difference from

In order to achieve competitive advantage Sampath Bank follows differentiation

Sampath Bank has made its mark as a complete service provider for its customers. As technology advances, Sampath Bank providing many facilities such as online banking,Sampath SMS Alerts. The Sampath bank provides the service of ATM / Debit Card & Creadit cards ,which is convenient and safe payment tool. It totally eliminates the need to carry cash and make payments

Three variety of current accounts to different customers

Sampath Banks list of current accounts

Sampath payment guaranteed Cheques

Sampath Bank the pioneer of innovative banking in the island. For current accounts Sampath bank use high technology and facilities for customers like online access, sms alerts, ECD (easy chequ

thod to fastest cheque clearing. Other than current accounts with other products like personal serving accounts, credit cards, personal loans, leasing they made differ from competitors

Cost leadership

Stuck in the Middle

Focus


Page 9

Micheal Porter’s Generic strategy explains in creating sustainable competitive advantage there are 3 shows clear difference from their

differentiation strategy through their

Sampath Bank has made its mark as a complete service provider for its customers. As technology advances, Sampath Bank providing many facilities such as online banking,Sampath SMS Alerts.

cards ,which is convenient and safe payment tool. It totally eliminates the need to carry cash and make payments

For current accounts Sampath bank use online access, sms alerts, ECD (easy cheque deposit)

thod to fastest cheque clearing. Other than current accounts with other products like personal serving accounts, credit cards, personal loans, leasing they made differ from competitors



Marketing Plan Word count : 2633 2012-2014 To: Senior Management From: Marketing Manger Date: 01/04/2012

TASK TWO


TASK TWO


Page 10



2.0 Medium term marketing plan current accounts of Sampath bank Sampath Bank marketing plan prepared for the two years and which examine opportunities for the range of current accounts due to the changers in external environment. With the expansion to the North and East, there is a growing demand to acquire fluency in all three languages and we have embarked on a mission to strengthen the customer service levels by building a team which will soon be competent in trilingual communication. 2.1 Sampath Bank Mission

Ø Create a learning culture that promotes individual and organizational development as well as promoting innovation and value for customers.

Ø Treat all internal and external customers the way we would like to be treated. Ø Encourage and promote teamwork in all aspects of behavior. Ø Open to feedback and demonstrate an eagerness for personal development. Ø Monitor and demonstrate an impressive commitment to results. Ø Uncompromising ethical and professional standards of behavior.

Sampath Bank Vision "The Growing Force in Sri Lankan Financial Services" 2.1.1 Market overview The banking industry which holds approximately 60% of the total financial assets is the main intermediary in the financial services sector in Sri Lanka. Development in information and communication technologies (ICT) and globalization of the industry have drastically changed the market structure of banking industry in Sri Lanka. The reforms aimed to enhance both the productivity and efficiency and the degree of competition of banking market as a way of improving overall operational performance of the financial services sector in Sri Lanka. Government encouraged new entrants to the financial services market. Those changes were affected to expand the scope of the banking industry as well as to increase the number of firms in the banking industry. Structural changes in the industry aimed to enhance competition anticipating productivity and efficiency improvements in banks. Ultimately, policy makers aimed to improve the performance of overall banking industry.



2.2 Key Issues and Critical Success Factors Considering both external and internal factors we can identify these factors as high importance key issues and critical success factors. Key Issues

• Different Banks come out with range of current accounts offering special benefits (latest Technology, Insurance scheme)

• Lack knowledge among the people towards cheques • Poor public confidence on cheques as a means of payment • Customer switching due to availability competitor options • As a country cheque returned rate is high (Out of the total number of cheques of 190,582

presented daily for clearing at LankaClear, the clearing house, about 10,704 or 5.6 percent are returned unpaid.)

Critical Success Factors • Sampath current account cheques have become the most preferred mode of payment as

irrespective of the branch on which it is drawn; proceeds of a cheque can be obtained without any hassle.

• Sampath current account, while giving customers the facility to issue and deposit cheques and gives a number of other benefits as well. It gives customers to complete freedom and all the convenience of modern day banking era.

• Customers need not step in to the branch at which customers have opened customer’s current account to operate it. Since all Sampath bank branches are electronically linked all customers cheque transactions can be performed at any of Sampath bank branches.

• Coustomers can also view and initiate any number of transactions of any nature by using Sampath bank Internet banking facility too.

• Projected growth of the Sri Lankan economy will increase the business and usage of cheques. • Advertising on sampath bank cheques which is lowest cheque return rate in Sri Lanka. • High brand equity.



2.3 Key opportunities High Probability of Occurrence Low Low High Impact to sampath bank Source: TKF Class notes 2.4 Assumptions

• expansion to the North and East there is a growing demand • Banking industrial sectors expected grow rate 8% • Sampath bank current customer base will be increase • Strengthen to maintain marketing activities to attract new customers and to provide more

benefits to maintain customer demand.

Low impact/High probability • Political stability due to end

of war and no more elections for next four years.

High impact/High probability • Opening North & East

markets and business expansion

• Present economy growth and new investment coming in. 6.9% GDP growth in 2010 country comparison to the world: 25

• Increase usage of cheques in Sri Lanka 5% 2008 to 2009

Low impact/Low probability

• Increase usage of modern technology to provide new systems of security, database

High impact/Low probability



2.5 Objective Sampath bank to become driving force for new ‘‘To achieve revenue of LKR 5 billion by the year 2014current accounts and expansion to North and East provinces Gap analysis Revenue Corporate Objective(5b) 0 Y1 Y2 Y3 Gap analysis for Sampath bank Falling back on the gap analysis done in the auditing process there is order to fill in this gap the following

Strategic Gap 2 Billion


riving force for new Sri Lanka and objective to be achieved in

‘‘To achieve revenue of LKR 5 billion by the year 2014 through relaunching the 3 different current accounts and expansion to North and East provinces’’

Revenue Corporate Objective(5b) New strategic Gap (2b)

Revised Forecast (3b) Operational Gap (1.5b) Initial Forecast (1.5b)

0 Y1 Y2 Y3 Y4 Y5 Time (Years) Gap analysis for Sampath bank

Falling back on the gap analysis done in the auditing process there is new strategic gap of 2 Billionorder to fill in this gap the following strategies are set.

Market development strategy (1Billion)

Market Penetration strategy (0.75 Billion)

Product development strategy (0.25 Billion)


Page 14

objective to be achieved in 2014 is

relaunching the 3 different

tional Gap (1.5b)

new strategic gap of 2 Billion. In



Product development strategy (0.25 Billion)



2.6 Strategy Existing Products New Products Existing Markets New Markets Ansoff’s matrix for Sampath bank current accounts Targets Increase brand awareness through various advertising and promotional campaigns Continue to build the Brand equity Increase the market share by 5% Increase customer retention Increase focus on CRM methods and better customer service.


• Extra value added services (Electronic card facility link with current account)

• Improve online facility to current accounts holders

New Product development strategy (0.25 Billion)

• Unique priority service for accounts holders (focusing on product extension which is low cost and low risk without moving to new product development)


• Exploiting the north & East Provinces( after war period freedom for the business)

• Mass advertising (reminding Specialty with new medias)

• Add new features for Sampath current accounts (ex; supplementary accounts)

Diversification strategy



2.6.1 Segmentation Geography Urban Suburban Rural North & East

Customer type Personal SME Company

Social economic status

A B C1 & C2 D & E

Usage rate High Medium Low

Average accounts balance (Rs)

50,000-100,000 100,000-200,000 200,000-400,000 400,000 <

Benefit sought High quality service

Social recognition/prestige

OD facilities Credit

Customer loyalty

Brand Loyalty Product loyalty Bench sitters

2.6.2 Targeting In segmentation and targeting Sampath bank focuses on Urban, Suburban and specially North & East areas. Small to Medium Enterprises and companies focus on business sector and Social economic A and B classes targeted for the personal current accounts medium to high usage rate expected. Average accounts balance LKR 100,000 and above and customers who seeks high quality service and brand loyalty are targeted North & East highly focus geography due to fastest develop economic areas. Les focus on rural areas because less number of cheques transaction. Personal current accounts usually not much valuable compare with SME and company accounts so main priority has given to social economic class A & B groups. Sampath Bank is primarily targeting on these segments to increase profits and number of current accounts in the Medium term.



2.6.3 Positioning Sampath bank constantly strives to bring technologically superior banking closer to Sri Lnakan lives. Thereby adding tangible value and exceeding expectations every time. High *Sampath Bank *HNB,NTB *Commercial Bank Service Quality *Seylan Bank *BOC *Peoples Bank Low use latest technology High Positioning Of Sampath Bank Sampath Bank enjoys a market position of being a technologically savvy Bank with a strong Sri Lankan identity offering a wide spectrum of financial solutions to the Bank's valued clientele. Although a relatively new bank, with an operating history of less than 25 years, Sampath has emerged as the country’s fourth-largest private-licensed commercial bank 2.7 The Marketing Mix In order to be successful when expanding sampath bank current account operation in to new and existing market, where our main competitors such as HNB, NTB, BOC are playing in a leading position, In this Medium term plan Sampath bank gets into very innovative and effective marketing tools. 2.7.1 Product Due to high competition in the banking industry Sampath bank will be looking at the most attractive current accounts range which could retain existing customers and to gain new customers. Sampath bank combined the current accounts with additional features (explained under promotion) which will win the market.

Ex; Do start paying interest on current accounts. The bank collects money on behalf of its customers and credits the same to their accounts.



2.7.2 Price The quality of service provided has direct relationship with the fees charged. Personal Current Account Current Accounts chargers Sampath Bank

Description LKR Current account monthly service charge Personal accounts less than Rs.10,000/- 250/- Other accounts less than Rs.15,000/- 500/- Charges for account statement DAILY - 2,000/-

WEEKLY -1,000/- FAXES - 750/- E-MAIL- NO CHARGE

Cheque issuing cost

Payment Guaranteed cheque book FREE

Supreme cheque book (per leaf) 10/- Cheque book (per leaf) 15/- Loose cheque leaf 100/-

Stop payment order Account with funds 300/- Account without funds 1,500/- Entire cheque book 2,000/-

Return cheques due to insufficient funds, etc… Due to inadequate funds (RD) 1,200/- Effects not realized (ENR) 500/- All others 100/- ISSUE OF PAY ODERS Pay Order (Account Holder) 300/- Pay Order (Non Account Holder) 500/- Source; www.sampath.lk Sampath Supreme Current Account T Minimum monthly balance – Business Rs.50,000 Personal Rs.25,000

http://www.sampath.lk/



T Service fee of Rs.150 per month 2.7.3 Place Branch network should be extended especially North and East as well as suburbs. This will easier to make transaction with sampath Cheques Extended number of ATM machines Sampath bank 196 branches ATM banking Over 225 ATMs Doorstep banking Call center Mobile baking Internet Banking 2.7.4 Promotions All current Account holders Eligibility for the Sampath raffle draws Eligibility for: SMS Banking Internet Banking VISA Debit Card Eligibility for a free life insurance cover through "SL insurance corporation" Introduce earn and spend points facility according to the number of transaction Advertising News paper ads and articles, Magazines, Hoardings TV advertisements PR activities SME sector development loans and issue current accounts for further improve their business 2.7.5 People Excellent customer care carries a significant role in retain and acquiring new customers, so people who involve in the operation bank must be given the especial concern. The customer service staff and call center should be capable to speak Tamil to cater the needs of the target North and East customers. All staff must be well educated to respond to customer requirement. Selection and training Recruit the correct employees with suitable competencies in communication and capability. A strong Training is to be provided with required communication skills and knowledge. Sampath bank needs to be use three languages according to the country used. Internal marketing Staff development program. Awarded best employee in the year Arrange branch meetings



Presentation Staff training will be encouraging to best way they can approach customers and also to be polite and friendly so that the customer would feel friendly banking experience. 2.7.6 Process • Customer clear dealing process- Process innovations and continuous improvement through staff

contribution.

• Positive outcome oriented approach- every process is designed by first planning the most wanted results.

• Sampath Bank is continually taking initiatives to offer the best in class service that try to find to improve customer experience.

2.7.7 Physical Evidence

• There are many examples of physical evidence, including some of the following: • Internet/web pages • Similar theme on advertisements (News Paper, TV) • Standardized interior • Business cards • The building itself • The physical evidences also include signage, reports, punch lines, other tangibles, employee

dress code etc. • Each and every bank has its logo by which a person can identify the bank. Thus such signages

are significant for creating visualization and corporate identity. 2.8 Implementation Implementation with McKinsey 7s While using a model like the McKinsey 7 S framework can seem manageable, it is a very positive reminder to make sure that company not overlooking an important issue and it’s helpful to focus discussions on implementation issues and to bring assumptions and unstated expectations to the marketing plan.



Strategy

The plan devised to maintain and build competitive advantage over the competition. Practical Strategies maximum coverage of industry opportunities. . Generate or improve sustainability. Differentiation with achieving Sampath bank objectives.

Structure Clear idea on the way organization is structured and who reports to whom. Internal marketing, tri language communication plans to be undertaken to develop interaction, improve staff attitudes and the employees to understand and build a good relationship and ensure all staff moving towards the Sampath bank objectives.

Systems

The daily activities and procedures that staff members engage in to get the job done. Implementing internal marketing activities Staff rewarding systems such as increments, incentives and Bonus Maintained high level standards of customer service. Idea of team work building and staff training will take place.

Style

The style of leadership adopted. Correct decision making understanding the situations within the branches. Quick decision making on opening new accounts and customer problem solving.

Staff

The employees and their general capabilities. For the different staff different training will be given. Increase the language skills to better communicate with north and east people.



Skills

Target on presentation skills to make customer understand why Sampath bank is best Negotiation and keep relationships with all customers. Keep track on staffs towards Sampath banks objectives Three languages skills for better customer service.

Shared values

These are the core values of the company that are evidenced in the corporate culture and the general work ethic. Sampath bank all internals to achieving organizations vision and mission. Best technology usage for the fast banking operation and take place of competitive advantage.

Source; www.sampath.lk, TKF class notes 2.9 Action Plan Moderate spending Low spending

Activities 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Market Research Staff Training Open new branches Technological Development

Advertisements TV Ads Newspaper Ads Internet Ads Hoardings North & East special adverts

PR Activities T20 world cup Calton Volleyball cup

CSR projects Source; TKF class notes




2.10 Budget For Sampath Current accounts Expenditure 2012 (LKR) 2013(LKR) 2014(LKR) Market Research

4,560,000.00 3,560,000.00 2,560,000.00

Staff Training 550,000.00

566,500.00

533,500.00

Technological Development 15,500,000.00

13,500,000.00 11,500,000.00

TV Ads 20,000,000.00

20,600,000.00 19,400,000.00

Newspaper Ads 1,000,000.00

1,030,000.00

970,000.00

Internet Ads 500,000.00

515,000.00

485,000.00

Hoardings 1,000,000.00

1,030,000.00

970,000.00

North & East special adverts 4,000,000.00

4,120,000.00 3,880,000.00

T20 world cup sponsorship 2,000,000.00

Calton Volleyball cup sponsorship

1,500,000.00

1,545,000.00 1,455,000.00

CSR projects 2,000,000.00

2,060,000.00 1,940,000.00

Internal Marketing 1,700,000.00

1,751,000.00 1,649,000.00

Training 2,500,000.00

2,575,000.00 2,425,000.00

ICT 3,500,000.00

3,605,000.00 3,395,000.00

Administration 600,000.00

618,000.00

582,000.00

Wastage 50,000.00

51,500.00

48,500.00

Transportation 225,000.00

231,750.00

218,250.00

Total 61,185,000.00

57,358,750.00 52,011,250.00

Source; TKF class notes



2.11 Monitoring and Control Balance score card is a most influence management instrument, which helps the organization to monitor performance. Balance scorecard helps the organization to transform vision and strategies into objectives and measurement indicators. Perspective

Objective

Measurement

Target Initiatives 2012 2013 2014

Financial

§ Revenue growth

§ Achieve target market

§ ROI § Increase

number of current accounts

§ Market share %

3b 10 12

4b 15 13

5b 20 14

• Quarterly business review meetings

Customer

§ Acquisition § Retention § satisfaction

§ % of Acquisition rate

§ % of Retention rate

3 85

4 88

4.5 90

• Building brand reputation

• Use customer opinion and CRM methods

Internal process

§ Increase customer recommendation

§ Reduce customer complaint

§ % of Customer complaints

10 8 6 • Assurance on quality of Process

• System controls

Learning and growth

§ Staff motivation

§ Staff satisfaction

§ Increase capabilities

§ % of revenue Achievements

§ % of staff satisfaction

§ Staff training hours in a year

10 80 30

15 85 40

15 90 50

• Training and developments

• Internal marketing

Source: TKF class notes



TASK THREE EVALUATOPN REPORT Word count ; 2248

TASK THREE



3.1 Benefits of marketing plan for Sampath Bank in responding to changers in the external environment What is marketing planning? “A marketing plan is a series of activities that are formulated to attain a specific objective or goal in a set time period” (Holden, 2000). Why marketing planning is necessaryBusinesses operate in aggressive and more and more competitivebusiness to achieve organizational objectives isfactors are interrelated. Organization needs to work out how will reach and win new customers and make sure that they will be happy and remain satisfied of the services organization providing them The Marketing Planning Process

Where are we now

•Competitor analysis

Where we want to be •Vision

How do we get there

•Marketing Strategies

Which is the best

•Marketing mix

Are we getting there

•Monitoring


Benefits of marketing plan for Sampath Bank in responding to changers in the external

“A marketing plan is a series of activities that are formulated to attain a specific objective or goal in a

is necessary? aggressive and more and more competitive environment. The

organizational objectives is impacted by some of environmental factors, many of Organization needs to work out how will reach and win new customers and

make sure that they will be happy and remain satisfied of the services organization providing them

The Marketing Planning Process

Source; TKF Class notes

•Customer analysis

•Financiial analysis

•Markeitng audit •SWOT

•Mission •Objective

•Action Plan

•implementation

•control


Page 26

Benefits of marketing plan for Sampath Bank in responding to changers in the external

“A marketing plan is a series of activities that are formulated to attain a specific objective or goal in a

environment. The capability of a of environmental factors, many of

Organization needs to work out how will reach and win new customers and make sure that they will be happy and remain satisfied of the services organization providing them

•SWOT



External Environment External environmental factors are uncontrollable variables away from the control of the organization. So the marketing plan is to take action according to changers in external environment. External environment of Sampath Bank Changers of external environment

Ø Political factors - changes in government and government policy can influence business Ø Economical factors - Growth in economy, Opportunity for competitors Ø Social factors - Changers in peoples life styles, consume behaviors, structure of the population. Ø Technological factors - Innovations at a low cost, Speed of banking Ø Ecological factors - Green banking Ideas Ø Legal factors - changes in laws

Benefits of a Marketing Plan for responding to changes in external environment

Ø Maximize usage of opportunities and reach to target market

Marketing plan will help Sampath Bank to focus on target market and to find if there are any gaps

in the market that will provide new opportunities for the current accounts.

external environmental analysis identifies opportunities and threats as a result the organization

develops proactive strategies to exploit the available opportunities and deal with potential threats

Ø Political factors Ø Economical factors Ø Social factors Ø Technological factors Ø Ecological factors Ø Legal factors

Ø Competitor Banks Ø Customers Ø Govt Ø Suppliers Ø Media Ø Other financial

institutions Ø Intermediaries

Ø Sampath Bank



Ø Performance measurement

Changing in external environment could be effect to the Sampath bank marketing strategies.

Marketing plan will supports for the understanding the operational progress. Also this will

highlight the successes and failures of strategies. Measurement of performance could be evaluate to

make sure the success of the marketing plan

Ø Working force direction

Strategies to be use in terms of increasing market share, Internal understanding about the Sampath

bank current accounts marketing objectives and to confidence how to achieve banks objectives.

Ø Meaningful resource and budget allocation more effectively and efficiently

Resource allocation is easy with marketing plan due to activities already planned to achieve

Sampath bank objectives and gaining new customers.



3.2. Role of marketing Audit and problems of information gathering A marketing audit is defined as "a systematic, comprehensive and periodic review of the entire marketing activities of an organization" (College of Business). Major characteristics of marketing audit

Ø Comprehensive: - audit should cover the entire marketing environment of the company. Ø Independent:- should be an intelligent and independent activity and organizations believe best

audits arrive from outside audit consultants Ø Systematic:- should have sequence of problems diagnostic steps and to improve the

organization’s overall marketing effort Ø Periodic:- marketing audit should conduct on a regular basis not to wait until problems arrive.

Basic three steps in Marketing audit process include

I. Identify the organizational objectives and scales - Discussion with the management and

officials. II. Collect the relevant data – Internal, external III. Prepare report – objectives, findings, recommendations

objectives and scales

Collect the relevant

data

Prepare report



Process of marketing Audit

Marketing audit tools and techniques SWOT analysis SWOT analysis used on beginning of the marketing audit. an organization. Strength and weakness which are internal factors that improve value or destroy value compare with competitor organizations. Opportunities and threats which are external factors organization cannot control that enhance the value or destroy value. Pestel analysis All environmental factors taken in to consideration under Pestel analysis. opportunities and threats in macro environment, pestel analysis identifies the factors which areaffect to the Sampath bank operation in terms of political, economical, Social, technological, environmental and legal,

Appointment of an auditor

Decide the Time period

Decide on reasech methods and questionners are raised

Selecting the respondents for the audit

Collecton of information

Perpare reports

Focusing on key areas and problems

Delegating responsibilities/ Implementation



Marketing audit tools and techniques

SWOT analysis used on beginning of the marketing audit. This evaluates the marketing performance of Strength and weakness which are internal factors that improve value or destroy value

compare with competitor organizations. Opportunities and threats which are external factors enhance the value or destroy value.

All environmental factors taken in to consideration under Pestel analysis. This is important to identify opportunities and threats in macro environment, pestel analysis identifies the factors which areaffect to the Sampath bank operation in terms of political, economical, Social, technological,

Appointment of an auditor

Decide on reasech methods and questionners are raised

Selecting the respondents for the audit

Focusing on key areas and problems

Delegating responsibilities/ Implementation


Page 30


the marketing performance of Strength and weakness which are internal factors that improve value or destroy value

compare with competitor organizations. Opportunities and threats which are external factors

This is important to identify opportunities and threats in macro environment, pestel analysis identifies the factors which are directly affect to the Sampath bank operation in terms of political, economical, Social, technological,



Porter’s five forces Five forces analysis is effective tool to identify the market competition and industry attractiveness. This investigate through five basic areas bargaining power of customers, bargaining power of suppliers, threats of new entrants, Threat of substitutes and Rivalry of competitors

McKinsey 7S

McKinsey 7S Model has seven factors which are classify into "hard" and "soft" fundamentals. Soft elements are more intangible and are influenced by the corporate culture.

Ø The hard elements are strategy, structure and systems. Ø The soft elements are: shared values, skills, style and staff.

The rationale of an audit Determine - what is currently being done Evaluate - what is being done Recommend - what should be done in the future Benefits of Marketing Audit

Ø Clear picture on current operation Ø Further awareness through the business Ø help to building of internal relationships Ø improve marketing efficiency and effectiveness Ø Gives an opportunity for input from other areas of the business Ø provide an important approaching into the improvement of marketing planning

Problems of Information gathering Competitor information gathering difficulties Evaluate the market position and the planning process organization needs to collect the competitor information. Specially competitors internal information which is most worth details is hard to collect trustworthiness of information due to the changing environment Reliability of the data could be depending on external environmental changers. Examples such as Government import export policy changers and new legalization coming on. Limitation resources to conduct an audit For the audit organization has to spend money, time, manpower and other recourses other than their business operations. So allocation resources for the conducting audit depend on management decisions.



Overload information Collecting over information takes time to analysis and confusion to take decisions. Errors in collecting methodology Information collecting people might collect the data which are not relevant and wrong. When data entering and analyzing can be changed mistakenly. This may occur bad effect to the planning process. 3.3 Justification of strategy through Segmentation, Targeting and Positioning Segmentation The process of splitting customers, or potential customers, in a market into different groups, or segments, within which customers share a similar level of interest in the same or comparable set of needs satisfied by a distinct marketing proposition http://www.marketsegmentation.co.uk/segmentation_tmsc.htm Sampath Bank could breakdown the Sri Lankan total market demand of current accounts into segments and select who are the best valuable to do the business according to the sampath bank objectives. Sampath bank Current accounts segmentation done in a following basis

• Geography, • Customer type, • Social economic status, • Usage rate, • Average accounts balance, • Benefit sought, • Customer loyalty

Targeting “Choosing the real goals, correct marketing segments to cater depending on a company’s capabilities.” TKF class notes Basically there are three targeting options Sampath bank can adopt.

1. Undifferentiated - One product aimed at the mass market in the hope that a sufficient amount of buyers would be attracted.

2. Differentiated - this is where the organizations needs to target quite a few segments and develops separate products. Separate marketing programs to attract the different segments.

3. Concentrated - Organization concentrates its marketing attempt on one segment so company

http://www.marketsegmentation.co.uk/segmentation_tmsc.htm



will develop a product that caters for the needs of that customer group. Sampath bank targeting strategy is Differentiated strategy. Number of current accounts targeting on different segments of customers. Geography Urban Suburban Rural North & East

Customer type Personal SME Company

Social economic status

A B C1 & C2 D & E

Usage rate High Medium Low

Average accounts balance (Rs)

50,000-100,000 100,000-200,000 200,000-400,000 400,000 <

Benefit sought High quality service

Social recognition/prestige

OD facilities Credit

Customer loyalty

Brand Loyalty Product loyalty Bench sitters

Segmentation and targeting Sampath bank will target a variety of different segments with a range of differentiate current accounts. Benefits of segmenting and targeting

• Easier to communicate with targeted customers • Straightforward to decide where and how Sampath bank can most effectively market

Current Accounts. • Enables to get to potential customers more efficiently • marketing budget is going to be most effective if know the target market

In segmentation and targeting Sampath bank focuses on Urban, Suburban and specially North & East areas. Small to Medium Enterprises and companies focus on business sector and Social economic A and B classes targeted for the personal current accounts medium to high usage rate expected. Average accounts balance LKR 100,000 and above and customers who seeks high quality service and brand loyalty are targeted North & East highly focus geography due to fastest develop economic areas. Les focus on rural areas because less number of cheques transaction. Personal current accounts usually not much valuable compare with SME and company accounts so main priority has given to social economic class A & B groups. Sampath Bank is primarily targeting on these segments to increase profits and number of current accounts in the Medium term.



Positioning Kotler defines Positioning as an “act of designing the company’s offering and image to occupy a distinctive place in the minds of target market.” Positioning refers the consumer's perception of Sampath bank current accounts in comparative to its competitors. In deciding what is the position of the sampath current accounts in the mind of the consumer. Sampath bank needs to position as ‘Technologically superior banking closer to Sri Lnakan lives’ High *Sampath Bank *HNB,NTB *Commercial Bank Service Quality *Seylan Bank *BOC *Peoples Bank Low use latest technology High Positioning Of Sampath Bank With using superior technology Sampath bank is in top position. In customers mind about current accounts position some messages needs to be convey.

• Modern day banking • Faster service • Superior technology • Hassle free transactions • Sri Lanka bank • Expanding network

Specially moving into new geographical areas such as north and east Sampath bank planned to set up new branches, new advertising campaigns and customer awareness increasing programs to acquire new customers and create the sampath bank position in minds of customers.



3.4 Issues may encountered when implementing a marketing plan and proposal for resolving them Implementation is the carrying out, execution, or practice of a plan, a method, or any design for doing something. Implementation of the strategic plan is the most important aspect of planning. Identifying the barriers to implementation and overcoming them is a key success factor for any organization. Issues may encountered when implementing a marketing plan

Ø Sampath Bank marketing plan is to reveal considerate of target customers. Process of implementation of marketing plan sampath bank might face challengers from internal and external environments.

Ø Implementing developed marketing plan sampath bank has to achieve their medium term

objectives. While implementing marketing plan Sampath bank may encountered possible issueswhich are tend to barriers achieving objectives.

proposal for resolving issues of implementation

Ø In the planning process developing a strategic plan is straightforward. When the implementation of marketing plan could identifies issues and difficulties.

Ø Focus on below table is to identify issues and proposals solutions for overcome issues and

make sure that key objectives are accomplished



Issues may encountered and proposal for resolving Possible Issues Impact Proposal solutions Skills Lack of skills directly impact on

customer care and services. Make sure the every branch could manage the tri languages skills to communicate with all customers. Usage of new technology.

Training - A widespread training Should be given to the new employees. All staff keeps friendly with languages, new technology.

Lack of teamwork Managers has to work together and negotiate with other members of Sampath bank to achieve key strategies that require teamwork across Sampath bank inter departments.

Teamwork – The management and marketing team has to identify the potential conflicts in achieving the Sampath bank objectives and resolve them. This needs exchange and negotiation and can require tricky conversations about resource allocation and prospect concerning the work of each staff.

Organization Culture The communications between departments are less and most departments like finance, credit, sales have conflicts with marketing functions due to lack of knowledge in marketing and understanding of the Sampath bank objectives of Marketing Plan.

Conduct team building activities

Disapproval to change Changing the employees’ behaviors according to the marketing plan may disappoint the employees. Ultimately internal conflict, reduce of the customer service standards may occurred.

Internal marketing – keep clear communication with all staff. Communicate sampath bank new strategies, objectives and how it’s going to implement. Implement staff motivation things such as incentives, increments and trainings.

Lack of Competitive Intelligence

Marketing audit has to gather sufficient information about competition. Marketing plan should describe how the Sampath bank Current accounts will differentiate from competitor bank current



accounts. Conflicting priorities Failure to priorities sequence

objectives. There are number of strategies to implement to accomplish the bank objectives. How to achieve them may expose conflicting priorities and agendas among management.

Focus – number of priorities means less accomplishment and not everything can be or is a priority. According to strategies impact on bank the resources required

Audit findings could be change when it comes to implementation

Environmental factors could be change by time. When it comes to implement if the factors are change strategy drives a wrong way.

Time management - Minimize the time gap between audit and implementation. Or otherwise make amendments to audit if it’s late to implement.




Abbreviations Central Bank of Sri Lanka(CBSL) Easy Cheque Deposit(ECD) Bibliography http://www.sampath.lk

http://www.cbsl.gov.lk

http://www.mindtools.com

http://print.dailymirror.lk

http://www.marketsegmentation.co.uk

http://www.marketingteacher.com

http://michele-dane.suite101.com

http://searchcrm.techtarget.com

Appendix

Sampath Bank Corporate Profile

Company Name : Sampath Bank PLC.

Legal Form : Public Limited Liability Company, incorporated in Sri Lanka on 10th March 1986 under Companies Act No. 17 of 1982 and listed on the Colombo Stock Exchange. Certificate to Commence business received on 2 April 1986.A licensed Commercial Bank under the Banking Act No.30 of 1988. The bank has been re-registered as Sampath Bank PLC on 28th April 2008, under the Companies Act No. 07 of 2007.


http://www.marketsegmentation.co.uk/

http://www.marketingteacher.com/

http://michele-dane.suite101.com/

http://searchcrm.techtarget.com/



Company Registration No. : PQ 144

Ratings: Fitch Rating : Fitch Rating Lanka Limited has affirmed National Long Term Rating of AA-(lka) positive to Sampath Bank. Ram Rating : AA (stable) Stock Exchange Listing Profile : Incorporated as a Public Limited Company with a broad share holding and listed under the Bank Finance & Insurance sector on the Colombo Stock Exchange with 156,854,190 ordinary shares in issue, 15,000,000 Unsecured Subordinated Debentures of Rs.100/- each - 2007/2012 (Listed).

The total number and value of cheques processed and cleared by the LCPL in 2003, amounted to 36 million and LKR 2,677 billion (approximately USD 28 billion) respectively. Reasons for cheque returns First quarter

Source; TKF class notes The above chart shows that around 45 % of cheques were returned as "Refer to Drawer" due to insufficient funds in the accounts and is the main reason for the cheque returns.

12%

15%

4%

7%45%

17%

Reasons for cheque returns All other reasons

Account closed

payment postpond pend drawer's comfirmation

effects not realized

refer to drawer

Payment stop by drawer



CHEQUE RETURN STATISTICS

Year Month No. of working days

Total Inward Clearing Items

Total Cheque Returns

%

2011 August 22 260,024 8,162 3.14

2011 July 20 242,986 7,485 3.08

2011 June 21 244,874 7,047 2.88

2011 May 19 240,468 8,205 3.41

2011 April 17 209,961 6,968 3.32

2011 March 22 270,687 8,981 3.32

http://www.sampath.lk/currentacc.php Sampath Banks list of current accounts

ü There are three types of current accounts

Sampath current Account

Sampath current account is an express current account with an ultra speed cheque clearing system, that would support customers to keep up with today’s pace of life. The Sampath current account offers following unmatched benefits that will put you ahead of the rest

• Link the Sampath current account to customer savings accounts and obtain instant OD through the FLEXI facility

• Immediate encashment of cheques from any branch, even if the customer is not a Sampath current account holder

• Credit within one day from any bank for Sampath current account cheques • No outstation cheque commissions • Deposit Sampath current account crossed cheques from one branch and realize it from

any branch • Sampath current account cheque book is an issuing instantly without any additional

charges • Keep track of all cheque transactions with SMS Alertz on to customer mobile • No extra charges on SET – ATM, transactions • Utility Bill payments via SET – ATM, Sampathnet, Mobile Phone & Call Centre

facilities

http://www.sampath.lk/currentacc.php



Sampath Supreme Accounts

“Sampath Supreme” is an elite current account brand dedicated to our most respected customers who have been maintaining account with us for more than three (03) years with an unblemished record

Eligibility:

No cheque returns during the past 03 years, for want of funds..

Business A/C'c

Personal A/C's

Maintaining a monthly average credit balance (Last 12 months)

Rs. 50,000/- & above

Rs. 25,000/- & above

Number of transactions during the (Last 12 months) Minimum 80 Minimum 50

The following special benefits will be available for the “Sampath Supreme”customers

• Reduction on charges per cheque leaf. • No charges on cheque redeposit's • No charges on outward cheque returns • Printing the year customer opened the account “Customer since……..”.

Sampath Payment Guaranteed Cheques for the first time in sri Lanka Sampath Bank, the pioneer of innovative banking in the island, is set to reward customer integrity with a remarkable new venture by launching Payment Guaranteed Cheque book for the first time in the banking history of Sri Lanka. This exclusive offer is for an elite clientele, selected for their unwavering integrity in their partnership with Sampath Bank *The Bank is liable to pay only the amount printed on the cheque. Source; www.sampath.lk,




Personal Statement “I confirm that in forwarding this assessment for marking, I understand and have applied the CIM policies relating to word count, plagiarism and collusion for all tasks. This assignment/ project are the result of my own independent work/investigation except where otherwise stated. Other sources are acknowledged in the body of the text and/ or a bibliography is appended. The work that I have submitted has not previously been accepted in substance for any other award. I further confirm that I have not shared my work with other candidates.” CIM Number : 13502161 Signature : __________________ Date : 29/02/2012

TKF_MPP_March_2012_13502161

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