Marketing Management(Project Report)

Allied Bank of Pakistan

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY,

Islamabad Campus

Project Report

Marketing Management

Submitted to: Ms. Sarwat Kazmi

Submitted by:

ABDUL SABOOR KHAN (GROUP LEADER) AMINA TARIQ SEMRA SALEEM HINA ILYAS AYESHA NADEEM MUZNA KHAN AFFAN AHMED

Submission Date:

May 14, 2009

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY,Islamabad Campus

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ACKNOWLEDGEMENT

All Praises to ALLAH Almighty, WHO guided us through out this project and helped us in making it possible successfully

We are very much thankful to our Respected TeacherMs. Sarwat Kazmi

Who gave us direction and directed us in the completion of the project

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ABSTRACT

This report is about marketing plan of Allied Bank of Pakistan, which is among the top ranked banks of the country. It details the marketing strategies and marketing plans through which the Bank successfully gained the top position. The report also contains the company overview, SWOT Analysis, and the Product Plan of the organization.

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Table of Contents

INTRODUCTION………………………………………………………..1COMPANY NAME………………………………………………………1COMPANY LOGO………………………………………………………1VISION STATEMENT…………………………………………………..1MISSION…………………………………………………………………1VALUES………………………………………………………………….2COMPANY HISTORY…………………………………………………..2REASONS FOR SELECTING ABL……………………………………..2SWOT ANALYSIS……………………………………………………….3HIERARCHY LEVEL……………………………………………………4BOARD OF DIRECTORS………………………………………………..4MARKET PLAN………………………………………………………….5PROBLEM………………………………………………………………..5SITUATIONAL ANALYSIS……………………………………………..5MARKET SEGMENTATION……………………………………………5GEOGRAPHIC SEGMENTATION……………………………………...6DEMOGRAPHIC SEGMENTATION……………………………………7BEHAVIORAL SEGMENTATION……………………………………...7TARGET MARKET………………………………………………………7COMPETITORS’ ANALYSIS…………………………………………...8CORE COMPETENCIES………………………………………………...8QUALITY LEVEL OF ABL……………………………………………..9PRODUCT PLAN………………………………………………………..10PRODUCT……………………………………………………………….11PRICE……………………………………………………………………12PLACE…………………………………………………………………...14PROMOTION……………………………………………………………14SALES……………………………………………………………………15

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Introduction:

Allied Bank Limited was the first bank to be established in Pakistan. It started out in Lahore by the name Australasia Bank before independence in 1942; was renamed Allied Bank of Pakistan Limited in 1974 and then Allied Bank Limited in 2005.

In August 2004, because of capital reconstruction, the Bank’s ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.  Today, with its existence of over 60 years, the Bank has built itself a foundation with a strong equity, assets and deposit base. It offers universal banking services, while placing major emphasis on retail banking. The Bank also has the largest network of over 700 online branches in Pakistan and offers various technology-based products and services to its diverse clientele.

Company Name:

ALLIED BANK OF PAKISTAN LIMITED

Company Logo:

Vision Statement: “To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all the customers.”

Mission:

o To provide value-added services to our customers.

o To provide high-tech innovative solutions to meet customer requirements.

o To create sustainable value through growth, efficiency and diversity for all stakeholders.

o To provide a challenging work environment, and reward dedicated team members.

o To play a proactive role in contributing towards the society.

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Values:

o Integrity

o Excellence in Service

o High performance

o Innovation and Growth

Company History:

Established in December 1942 as the Australasia Bank at Lahore with a paid-up share capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux, and his business associates, including Abdul Rahman Malik who was amongst the original Board of Directors, the bank had attracted deposits, equivalent to PKR 0.431 million in its first eighteen months of business. Total assets then amounted to PKR 0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism, adaptation to changing environmental challenges resulting into all round growth and stability, envied and aspired by many.

Reason for selecting Allied Bank: We choose Allied bank because it is one of the leading bank in Pakistan with international standards and which keeps on innovating and secondly because we had a reference in this organization which would keep us in extracting the required information in this project more easily and without much hassle.

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SWOT Analysis:

STRENGTHS:o Strongest Online System

o Largest ATM Network (Powered by ORACLE ERP)

o Shifted from nationalize to contemporary area of banking

o Strong corporate culture

WEAKNESSES:o Branches are not renovated in some areas o No use of electronic media for promotion of serviceso No proper HR Managemento No proper segmentation

OPPORTUNITIES:o Make Personal loanso Car leasingo Reduced transaction chargeso Use of media for promotion

THREATS:o Strong competition among 5 GIANTSo Financial recessiono Attitude of customerso Falling KIBER rates

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President / CEO

Chairman

Board of director

Group chiefs

North Zone Central Zone 1

Central Zone 2

South Zone

Regional heads

Branch mangers

HIERARCHY LEVEL

Board of Directors:

o Pervaiz Iqbal Butt (Director)o Farrakh Qayum (Director)o Abdul Aziz Khan (Director)o Sheikh Jalees Ahmed (Director)o Muhammad Aftab Manzoor (Director/President & CEO)

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o Mohammad Naeem Mukhtar (Chairman)o Mohammad Waseem Mukhtar (Director)o Sheikh Mukhtar Ahmed (Director)o Tasneem M Noorani (Director)o Nazrat Bashir (Director)o Mubashir A. Akhter

MARKET PLAN

Problem:

Allied bank is more focused towards its corporate clients. Allied Bank is now planning to focus more towards consumer portfolio. Besides its corporate clients, it’s now planning to serve and penetrate more into consumer markets.

Situational Analysis:

Allied Bank Limited is engaged in commercial banking and related services. The Bank has a network of more than 700 branches. The Banks lending products include seasonal finance, agricultural finance, trade finance, running finance and demand finance. The Company offers leasing for machinery, commercial vehicles, vehicles and equipments. The Bank provides lease facilities for balancing, modernization, replacement and expansion schemes to corporate and commercial clients in all industrial enterprises. The bank has played a key role in the company’s economic growth by providing a vast amount of funds to large industrial and corporate sectors of the economy. The bank has the largest ATM Network in the country and it is among the 5 GIANTS (Top ranked banks) of the country.

MARKET SEGMENTATION:

Allied Bank is providing its banking facilities in every area of the country. It has no specific segment. The Bank is catering the needs of large industries and multinational companies as well as individuals, corporate, business men etc.

o Geographic Segmentation:

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Allied Bank has 735 online branches all over Pakistan. The Bank has divided its branches into four regions:

o North Zoneo Central Zone 1

o Central Zone 2

o South Zone.

Every branch is linked online with the other branch across the country.

o Demographic Segmentation:

1. Age:

Allied Bank targets all those customers above 18 years of age.

2. Gender:

Allied Bank provides its services to all of its customers regardless of their gender.

3. Social Class:

Allied Bank mainly targets corporate level. But it provides its banking services to people of every class.

o Behavioral Segmentation

Knowing the behavior of its customers and giving them the best is vital for every organization. So as Allied Bank deals with all kind of people either literate or illiterate. So in this regard Allied Bank has given name to some of its schemes and accounts in urdu. E.g.Behtar Munafa Account, Allied Bachat Scheme which by name gives the concept to an illiterate customer that what kind of benefit lies in this particular product or service.

TARGET MARKET:Allied Bank is catering the needs of large industries and multinational companies as well as individuals, corporate, business men etc. Its main target is corporate clientele.

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COMPETITORS’ ANALYSIS AND COMPARISON:

Quality level, Service description & features, core competencies of competitors

Allied Bank is among the 5 GIANTS (Top ranked banks) of the country. It has direct competition with the following banks:

o National Banko Habib Bank

o Muslim Commercial Bank

o United Bank

All these banks have almost equal revenue as of Allied Bank and they have almost same number of branches operating in every area of the country. Moreover Allied Bank mainly focuses on corporate clientele, while all these 4 banks are more focused towards consumer portfolio and consumer market. Allied Bank does not use electronic media or other important modes for the promotion of its services, whereas other banks use different means for efficient marketing of their services.

Core Competencies:

All the above mentioned banks have almost equal revenue as of Allied Bank and they have almost same number of branches operating in every area of the country. Moreover Allied Bank mainly focuses on:

1. Corporate clientele, which helps in generating large amounts of revenue as corporate clients have mush more to invest. While all these 4 banks are more focused towards consumer portfolio and consumer market.

2. Allied Bank does not use electronic media or other important modes for the promotion of its services, whereas other banks use different means for efficient marketing of their services.

3. Allied bank has the largest online banking system.

Comparison:

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Allied bank is the only bank in Pakistan which does not charge a person some extra money if he\she withdraws money from another bank’s ATM. while all its competitors charge some amount upon withdrawal from other ATMs rather than their own ATMs.

Allied Bank emphasizes on quality and hence there is an online ATM repair system which keeps track on all the ATMs of Allied back resent all over Pakistan. As soon as a

problem is detected in any of the machines, a team is sent on the spot to identify and fix the problem to ensure quality service to the privileged customers.

Quality Level of ABL

ABL’s Investment Banking team won its first major award in November 2006, for “The Corporate Finance House of the Year, 2005-2006” by the CFA Association of Pakistan, the local body of the CFA Institute, USA.

For its consistently superior performance, ABL’s Investment Banking team was once again awarded “The Corporate Finance House of the Year, 2006-2007” award by the CFA Association of Pakistan, the local body of the CFA Institute, USA. This award was given to ABL based on its highest value and number of Investment Banking and Advisory Transactions concluded during the period July 2006 – December 2007.

ABL’s Investment Banking Unit has also received international recognition by “The Banker” magazine UK, which has honored ABL with the “The Banker Deal of the Year 2008 – Pakistan” award for its successful Rs.13 Billion balance sheet restructuring of Maple Leaf Cement Factory Limited (the largest financing arranged for a cement factory in Pakistan).

Moreover Allied Bank is the most preferred bank because of:

o Timely Completion of Mandateso Highly talented and experienced analysts

o An employee focused work culture

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o Flexible delivery models to satisfy client specific requirements

o A cost effective, one window solution for customers

o Its ability to rapidly adapt to changing industrial and client specific processes

o The dedicated ‘Transaction Manager Model’ ensuring high quality service at all times.

PRODUCT

PLAN

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Product

Product Description & Features:

Allied Bank’s products are divided into three sub categories:

Corporate:

The Corporate Investment Banking Group (CIBG) holds the bank’s loan portfolio and enjoys a leading position in corporate lending in the country. It offers a wide range of financial services to medium and large sized public and private sector entities. These services include providing and arranging tenured financing, corporate advisory, underwriting, cash management, trade products, corporate finance products and customer services on all bank related matters.

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Consumer:

In line with the bank’s aim to provide a host of products and services to its customers, substantial ground work has been done to establish a strong consumer banking business. Furthermore, to achieve this objective, professional from across the industry have been recruited into areas of product development, sales, credit policy, research, consumer analytics, call centers and service quality departments.

The consumer portfolio, comprising the debit card, credit cards, auto loans, personal loans and mortgages will be established phase by phase. However, we are confident that our strengths, together with our largest network of online branches, a superior technology platform, a big customer base and the Consumer Personal Banking Group (CPBG), will take the bank’s profitability to new heights.

Visa Credit Cards Visa Debit Card

Commercial:

The Commercial & Retail Banking Group (CRBG) offers a variety of asset and liability-based retail products to its customers. The Group’s main focus has been on introducing

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various financing and investment products for its valuable clientele, and contributing to the steady growth of the financial industry.

CRBG consists of 4 geographic groups and is further divided across 27 regions in Pakistan. Each region is responsible for providing a quality service to its own customer-base. CRBG is consistent in lifting the Bank’s brand image by emphasizing on good customer services and developing commercial assets and a cost effective deposit base

Comparison:

Allied Bank offers the lowest deposit rate on its savings account as compared to its competitor HBL (Habib Bank Limited).

One can get a return of 8% by depositing an initial minimum amount of Rs, 20,000 while in HBL, the minimum initial amount is Rs. 25,000.

Allied bank offers a wide variety of deposit and saving schemes such as:

Behtar Munafa Account

Behtar Munafa Term deposit

Allied Munafa Account

Allied Bachat Scheme

Allied e-Savers Account

Allied Business Account

While other competitors do not offers such wide variety of schemes.

PRICE

Setting the Prices:

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Allied Bank sets the prices for its products in the following manner:

1. Selecting the Pricing Objective:

The pricing objective should be set according to what customers can easily pay. As Allied Bank is now focusing towards consumer markets, it chose penetrating pricing as its pricing strategy. It sets a low price for its products and services and a high interest rate as compare to its customers to get the maximum market share.

2. Determining Demand:

The nature of demand for banking services is elastic. There are a huge number of commercial banks operating in Pakistan and this demand for commercial banking is increasing as the number of customers is growing day by day. So for meeting the demands of its customers and to have a large market share, Allied Bank keeps the prices low for its customers.

3. Estimating Costs:

Allied Bank adopts Target Costing for their offers and terms to its target customers. They analyzed the environment for commercial banking to establish its desired functions and the price at which the products will sell given its appeal and competitor’s prices. The main objective of Allied bank for estimating costs is to bring the final cost projections for its products and services into the target cost range.

4. Analyzing Competitors’ Costs, Prices and Offers:

Before setting prices for any of its product or service, Allied Bank analyze the costs, prices and offers of the 4 Giants i.e. its competitors. Allied Bank customers’ enjoy the highest interest rates on their transactions as compared to any other bank. Also Allied Bank is the only bank in Pakistan which does not charge a person some extra money if he\she withdraws money from another bank’s ATM. while all its competitors charge some amount upon withdrawal from other ATMs rather than their own ATMs.

5. Selecting a Pricing method:

Allied bank adopts Target Return Pricing method for determining the price that would yield its target rate of return on investment (ROI). Allied Bank enjoys long term relations with its customers by providing them banking facilities at the highest interest rate than any other commercial bank in Pakistan.

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Suppose the bank has invested 2million rupees in providing the ATM facility and wants to set a price to earn a70 percent ROI, which is 14,00,000 rupees. The target-return price is given by the following formula:

Target-return price = unit cost + desired return × invested capital Unit Sales

= 250 + 0.70 x 20000000

70000000

= 250 + 0.2 = 250.2

The bank will realize this 70 percent ROI provided its costs and estimated sales turn out to be accurate. But what if sales do not reach 70000000 customers? The bank can prepare a break – even chart to learn what would happen at other sales levels.

Fixed costs are 50000000 rupees regardless of sales volume. Total costs equal the sum of fixed costs and variable costs.

The total revenue and total cost curves cross at 62000000 customers. This is the break-even volume. It can be verified by the following formula:

Break-even volume = fixed cost

(price – variable cost) = 50000000 (250.2 – 242.13) = 6200000 Break-even Chart

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6. Selecting the Final Price:

Selecting the final price for any of any of its product or service requires Allied Bank to keep in view the following things: policies set by State Bank of Pakistan, KIBER rates etc. It gives 15% interest for every transaction amounting 1 million rupees.

PLACE

Allied Bank has 735 online branches all over Pakistan. Its headquarter is located in Karachi. The bank is providing its services in the remote areas as well.

Selecting a location for a new branch requires the following things:

Analysis of competitors in that location.

Number of potential customers.

Safety and security measures for staff, employees and customers in the area.

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There should be enough space for expansion if it’s required in future.

PROMOTION

Allied Bank do not use any tool for the promotion of its products or services, but it plans to use the following promotional tools in the near future:

Advertising (through print and electronic media) Public relations

SALES

Sales Methodology:

Allied bank uses business-to-business (B2B) and business-to-customers (B2C) methods for the sales of its products and services. It provide its services to corporate clientele and also to the consumer markets.

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