Post on 29-May-2018
transcript
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First Direct Case Study
Presented by
Pulkit Goenka
Prashant Joshi
Danish Khan
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Outline
Key points of the Case Study
Questions for Discussion
Relevant Theory First Direct
Our Views
Questions?
http://www.youtube.com/watch?v=HFma_Viuif8&feature=player_embedded
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Case study: First Directs Innovative
Banking Channels
Traditional Banking Structure and Channels
Branches being the only point of contact
Establishment of First Direct in 1989
No Branches!!
Personal response to calls 24x7x365
Products offered are the same as competitors
Target Customers Financially aware and independent
income earners
Birth of a new breed of marketing channel Telephone,
Online and Mobile Banking
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Questions for Discussion
1. Why is innovation in the marketing channels generally
difficult to achieve?
2. Why was First Direct different from its rivals? What gave it
differentiation when it first launched?
3. Why might some potential customers of First Direct havereservations about the innovative nature of the service?
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Producer
Retailers
Wholesalers
Consumers
Conventional Marketing Channel
CreatingUtility
Facilitating
Exchange
Efficiencies
Alleviating
Discrepancies
Providing
Customer
Service
Standardising
Transactions
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Factors Influencing Distribution Channels
Organisational Objectives and Resources
Market Characteristics
Product Attributes
Buying Behaviour
Environmental Forces
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1. Why is innovation in marketing channels generally difficult to achieve?
Producers
Perspective
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CompetitorsPerspective
1. Why is innovation in marketing channels generally difficult to achieve?
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Producer
Consumers
Providing
Customer
Service
First Directs Marketing Channel:
Direct Marketing
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History First Direct was formed on 1st October, 1989 by Midland Bank
Became a part of HSBC after it acquired Midland Bank
Within five years of existence bank was serving to more than 500,000 customers
The bank launched Internet Banking in 1998 and went on to launched Mobile
Banking a year later
Current Situation First Direct has 1.16mn customers, 0.9mn of them use Internet Banking and 0.4mn
customers use SMS Message Banking
44% of First Directs sales is via e-channels First Direct handles around 157,760 calls every week including 29,000 calls a day
outside working hours
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2. Why was First Direct different from its rivals? What
gave it differentiation when it first launched?
Market research by Mike Harvis identified the Opportunity!!!
FD as UKs first branchless bank in 1989
First 24x7x365 Retail Telephone Banking Service
A bank FOR the Customers instead of FOR the bank!
Strict Core Values: Responsiveness, Openness, Right First
Time, Respect, Contribution and Kaizen
Economies of Scale due to HSBC merger
Use of Customer Information Systems
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2. Why was First Direct different from its rivals? What
gave it differentiation when it first launched?...Contd
Employees from Social Professions: Fast, Efficient and
Empathetic
Low Cost: Wages & Rents in Leeds
Hot Desking
641,000 customers in 1996: Employees 2400.... A Branch
would have reqd 4000!!!
Niche Marketing Target Customers: Affluent and Regular
Depositors Technological Advancements: Internet Banking, IPhone
Banking, Weekly statements by Text.
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3. Why might some potential customers of First Direct
have reservations about the innovative nature of
service? Traditional Banks offer real-world people-to-people
interaction. Customers still prefer personalized service that
they receive at branches
Patrons of Traditional Banks mostly prefer using checks andcash as the primary modes of transactions
Customers get an increasing feeling of security of their
financial assets inside the brick-and-mortar branches of banks
Despite robust security practices and secure transaction
technologies the threat of identity theft and hacking of bank
accounts is constant and real