Marketing Audit for ANZ Bank: Home Loans in Melbourne

This report conducts a marketing audit for ANZ Bank, focusing on home loans in Melbourne. It analyses the major and secondary market for the products and evaluates the level of involvement and decision-making of ANZ Bank. It also analyses the competitors of ANZ Bank and provides a perceptual map in relation to the company’s competitors.

Running head: ANZ BANK 0
Marketing and Management
ANZ Bank

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Table of Contents
Introduction................................................................................................................................2
Company................................................................................................................................2
Product/Service......................................................................................................................2
Consumer...............................................................................................................................3
Industry analysis and market trends...........................................................................................3
Growth....................................................................................................................................3
Profitability............................................................................................................................4
Macro Environment (PESTLE)..............................................................................................4
Competitors Analysis.................................................................................................................7
ANZ Bank..............................................................................................................................7
Commonwealth Bank.............................................................................................................8
Segmentation Analysis...............................................................................................................8
Major Market Segments.........................................................................................................8
Primary and Secondary Target Market..................................................................................8
Involvement of ANZ Bank in Primary Segment........................................................................9
Perceptual Map.........................................................................................................................10
Positioning Statement...........................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13
List of Figures
Figure 1: ANZ Bank's Logo.......................................................................................................2
Figure 2: Growth in Home Loans..............................................................................................4
Figure 3: Growth in Australian Service Industry.......................................................................6
Figure 4: Positioning Map of ANZ Bank.................................................................................10

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Introduction
Marketing management is referred to a process in which management formulate plans
and strategies in order to perform various functions regarding products, services, sales,
promotion and advertisement to ensure that they reach their targeted market (Pride, Ferrell,
Lukas, Schembri & Niininen, 2018). This report will focus on conducting a marketing audit
for ANZ Bank. This report will pick a single location, i.e., 230 Swanston St, Melbourne VIC,
Australia and discuss the product of ANZ Bank, i.e., home loans. The report will analyse the
major and secondary market for the products and evaluate the level of involvement and
decision-making of ANZ Bank. Further, this report will analyse the competitors of ANZ
Bank and provide a perceptual map in relation to the company’s competitors.
Company
Australia and New Zealand Banking Group Limited is the third largest bank in
Australia in terms of market capitalisation. It was founded in 1835, and its headquarters is
situated in 833, Collins Street, Melbourne, Australia (ANZ, 2018a). The corporation has
hired more than 50,000 employees worldwide. The competitors of ANZ Bank include
Commonwealth Bank, National Australia Bank (NAB) and Westpac Bank. It is a publicly
listed corporation, and its shares are listed in both Australia and New Zealand’s stock
exchange.
Figure 1: ANZ Bank's Logo
(Source: ANZ, 2018a)
Product/Service
The company operates in banking and financial services industry, and it offers its
services in more than 34 markets (ANZ, 2018a). The products and services offered by the
firm include business accounts, credit cards, loans and finance, online banking, insurance and

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others. The corporation offers home loans on interest between 3.99 percent p.a. and 5.87
percent p.a. (ANZ, 2018b). ANZ Bank offers a wide variety and package deals of home loans
to its customers. However, its interest rates are moderate to high, and some products have
high fees.
Consumer
Customers are the primary focus of the company, and it focuses on creating a strong
and lasting relationship with them by improving its services and overall customer experience.
The corporation offers its services to customers in more than 34 markets across the world,
and it builds trust by delivering its services in a responsible manner and accordance with the
highest standards of integrity (ANZ, 2018a). In Melbourne, the primary customers for home
loans include low to medium earning people who want to buy a house in or near Melbourne.
Industry analysis and market trends
ANZ Bank operates in banking and financial services industry, and it focuses on
expanding its business in new markets across the world. The company is known for offering
quality services and positive experience to its customers.
Growth
Australia’s sophisticated economy plays a crucial part in the fast-growing
development of banking and financial service sector. The industry is proliferating because of
a stable economy in Australia which assists in increasing new business opportunities for
banking corporations. According to the study of Deloitte, the Reserve Bank reported a growth
of 5.3 percent in October 2016 for the banking industry. The overall mortgage balance in the
industry also grew by 6.4 percent in 12 months from September and the personal credit
balance reduced by 1.1 percent in 12 months from October 2016 (Lumsden, 2017). The
Reserve Bank has not changed the interest rate for home loans keeping it as low as 1.5
percent which is positive for banks since more people purchase home loans at a low rate.
However, many experts have suggested that the rates might increase in 2018 which can
negatively affect the home loans market (Robertson, 2017). The market for home loans has
shown a continuous growth in previous years which showed that it is profitable for the
banking firms.

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Figure 2: Growth in Home Loans
(Source: Mckenna, 2015)
Profitability
The banking and financial sector are the largest contributor to Australia’s national
economy with more than AU$140 billion contributed in 2015. According to the study of
KPMG (2017), major banks in Australia reported a profit after tax of AU$31.5 billion in
2017 full year which has shown a growth of 6.4 percent. A large number of Australia’s
domestic funding, i.e.70.4 percent, is met by loans which provide that it is a potential market
for banks (ATKearney, 2015). In terms of market capitalisation, ANZ Bank is the third
largest banking firm in Australia, and it is the largest bank in New Zealand. The company has
shown a profitable growth by reporting net revenue of AU$64 billion which has increased
from AU$5.7 in 2016 (Letts, 2017). The company has a large number of members in 230
Swanston St, Melbourne VIC and there is a high potential for growth in this area.
Macro Environment (PESTLE)
A PESTLE analysis is referred to a tool used by marketers for analysing and
monitoring the macro-environmental factors that influence an organisation. The macro

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environment (external environment) factors include political, economic, social, technological,
legal and environmental factors (Warner, 2010).
Political factors
Banks are becoming more global, and different geopolitical factors have an immense
impact on their operations and profitability. The political stability in Australia has a positive
impact on growth and profitability of ANZ Bank. The government supports banking
corporations since they are one of the major contributors to nation’s economy. The on-going
war between Iran and the United States and its allies affect the business of ANZ Bank in
Asian markets (Callick, 2010). In Australia, laws made by the government and Reserve Bank
affects the business of ANZ Bank. For example, Treasurer Scott Morrison locks have
provided a law in which big five banks in Australia will be changed by AU$6.2 billion for
bank levy rate (Massola & Yeates, 2017).
Economic factors
Australia is one of the largest mixed economies, and it has a GDP of $1.261 trillion.
In the fourth quarter of 2017, 2 percent growth in country GDP has been recorded (Country
Economy, 2017). The Australian economy is mainly dominated by the service sector which
contributes to more than 61.1 percent to its GDP (Figure 3) (Department of Industry,
Innovation and Science, 2016). The Reserve Bank has set a low rate of home loans, i.e. 1.5
percent, for banking corporations which is positive for their growth (Robertson, 2017).
However, in the future, the rates might increase which will affect ANZ Bank. In nearby areas
of Swanston St, Melbourne VIC, ageing population is a major issue for ANZ Bank.

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Figure 3: Growth in Australian Service Industry
(Source: Department of Industry, Innovation and Science, 2016)
Social factors
In Australia, 78 percent of the population belongs to the mid-aged group, and both
men and women are service-oriented (Australian Bureau of Statistics, 2016). ANZ Bank has
adopted a customer-centric approach which assists them in developing their content strategy
and expanding their business in new markets. The headquarters of ANZ Bank is situated in
Melbourne, and in order to maintain a positive brand image, the company invests in local
social welfare activities.
Technological factors
Technology plays a crucial role in improving operation efficiency and customer
satisfaction of banks. ANZ Bank ensures that it uses the latest technologies while operating
its business and it improves customer experience by using technologies (Chuang & Hu,
2015). According to Ron Spector, managing director of ANZ Bank, the company is investing
in development of potential technology that creates new business opportunities (McLean,
2017). The corporation is using technology to become more “agile” organisation in order to
improve people management. The firm will offer technologies such as Apply Pay support and
open credit card for improving its customers’ experience (McLean, 2017).

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Legal factors
All financial institutions have to comply with different legal requirements while
operating their business in Australia. Moreover, ANZ Bank offers its services worldwide;
therefore, it has to comply with regulations in different countries. In Australia, the company
complies with Banking Act 1959, and it has to get an Australian Financial Services Licence
as per Corporation Act 2001. In Melbourne, the company has to comply with Environment
Local Law 2009 and other local laws while operating its business (City of Melbourne,
2018a).
Environmental factors
While operating their business in Australia, companies have to comply with different
environmental policies. ANZ Bank manages its environmental impacts by responsible
business lending and managing its footprints. The company has invested more than AU$500
million in wind power projects that have the capacity to generate 2,000 gig watt energy per
hour (ANZ, 2018c). The corporation also issues an environmental performance report to
show its contribution toward sustainable environmental development.
Competitors Analysis
ANZ Bank is the third largest bank in Australia in terms of market capitalisation, and
it is the largest bank in New Zealand. The nature of competition in banking sectors is high,
and ANZ Bank faces fierce competition from its competitors such as Commonwealth Bank,
Westpac and National Australia Bank. Commonwealth Bank, Westpac, ANZ Bank and
National Australia Bank are the market leaders in the banking sector of Australia and market
followers include Suncorp Bank, TM Bank and Macquarie Bank. The main competitors of
ANZ Bank are Commonwealth Bank.
ANZ Bank
Strengths
 Comparatively smaller market share ($83.599 billion) (Finder, 2018).
 High interest rate on savings accounts (2.55 percent) than compared to
Commonwealth (2.51 percent) (Finder, 2018).
 Effective implementation of technology for improving the customer experience

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Weaknesses
 Global presence is smaller than compared to Commonwealth
 Strong competition from Commonwealth, Westpac and National Australia Bank
Commonwealth Bank
Strengths
 Largest market share in Australia ($139.216 billion) (Finder, 2018).
 24/7 phone customer service availability
 Strong growth and capital generation
 More than 1000 branches located in Australia (Common Bank, 2016)
Weaknesses
 Involvement in controversies that resulted in legal action against the firm
 High staff turnover
 Increasing competition from other international banking firms
Segmentation Analysis
Major Market Segments
The groups which hire services from ANZ Bank include institutions, small, medium
and large enterprise, and all sorts of individual clients. These clients use ANZ Bank’s
services for opening saving or current account, getting home loans and performing business
activities.
Primary and Secondary Target Market
The segmentation of customers that generates most revenues for a firm is considered
as its primary target market. For ANZ Bank, the primary target market includes institutional
and individual clients that open saving and current bank account for personal and business
purposes. In the nearby areas of 230 Swanston St, Melbourne VIC, the population is high,
and there are also a large number of businesses (City of Melbourne, 2018b). The businesses
or institutes open current bank accounts with ANZ Bank, and they mostly use their online
banking services for performing their daily operations. The companies take loans from ANZ
Bank because it offers low interest rates. For individual clients, ANZ Bank offers its home
loans services through online and offline options, and it has established a large number of

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ATMs near 230 Swanston St, Melbourne VIC area. Individual customers mostly use mobile
application of ANZ Bank for daily business purposes.
The secondary target market of ANZ Bank is also crucial for the company’s success
since it increases its profitability and market share. The large organisations that take loan for
expansion and public offerings are the secondary targeted customers of the firm (Stockport et
al., 2012). In nearby areas of 230 Swanston St, Melbourne VIC a large number of companies
operate their business, and they hire ANZ Bank for their banking needs. These organisations
are the secondary target market for ANZ Bank because most of them did not change their
current bank to hire ANZ Bank’s services.
Involvement of ANZ Bank in Primary Segment
The ANZ Bank’s involvement in the decision-making of primary market is crucial for
the firm’s development, and it assists in sustaining its growth.
Product Development
ANZ Bank closely monitors the demands and requirements of its primary target
customers in order to introduce new policies for improving their customer experience. The
population in nearby areas of 230 Swanston St, Melbourne VIC is high, and the company
develops strategies to fulfil their needs. Its target demographic includes low to mid-income
individuals who get a loan from the company to purchase a new house. Most of the
individuals in these areas prefer to set nearby because of easy access to different
supermarkets, schools and other businesses. ANZ Bank’s involvement in product
development is high because it introduces attractive schemes and low-interest rate to attract
more customers.
Pricing Strategy
ANZ Bank analyses the credit rating of its clients before providing them home loans.
The interest rates for different home loans vary as per credit rating and period of the loan.
Currently, total ANZ mortgage lending between $250,000 and $699,999 has a variable rate
discount of 0.60 percent p.a. and a fixed rate discount of 0.15 percent p.a. (ANZ, 2018d). In
order to attract more people, ANZ Bank offers lower interest rates than its competitors such
as Westpac and Commonwealth bank in areas of Melbourne. Therefore, the management of
ANZ Bank is closely involved in its pricing strategy.

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E-Commerce
ANZ Bank offers net banking facilities to its customers since most of the individuals
and businesses use them. The firm also allows its customers to use their mobile application to
perform their daily banking activities, and they can also apply for home loans directly from
the application. The company is also introducing facilities of open credit card and Apple Pay
for its customers that will make their e-commerce experience more effective and reliable
(ANZ, 2018e).
New Branches and ATMs
The firm offers its services globally, and in order to meet its customers’ requirements,
it establishes new branches and ATMs in heavily populated areas. Currently, ANZ Bank has
established ten branches and four ATMs in nearby areas of 230 Swanston St, Melbourne VIC
(ANZ, 2018f). The company is required to establish new ATMs in the area for fulfilling
customers’ banking requirements.
Perceptual Map
Figure 4: Positioning Map of ANZ Bank

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As per this perceptual map, the ‘big four’ banks in Australia are known for offering
high-quality services to their customers. These banks are dominating Australia’s banking
sector. Commonwealth Bank is the largest in terms of market capitalisation and quality of
services due to which it has gained number one position in Australian banking sector. ANZ
Bank is known for offering relatively lower interest rates in its products, and it established a
positive customer experience than compared to Westpac and NAB. The Bank of Queensland
offers high quality to customers such as NAB; however, both of these banks charge high-
interest rates. Westpac Bank offers similar interest rates as ANZ Bank; however, its customer
service experience is relatively lower (Finder, 2017). Therefore, ANZ Bank offers good
combination of low-interest rate and high-quality experience to customers that attract low and
mid-income individuals to the firm.
Positioning Statement
ANZ Bank has increased its customer base by charging relatively lower interest rates
on its home loans than compared to other banks. The company should target low to mid-
income individuals in nearby areas of 230 Swanston St, Melbourne VIC who prefer low-
interest rates on home loans. Effective marketing scheme in areas of Melbourne can assist
ANZ Bank in expanding its market share and effectively face the competition from
Commonwealth Bank.

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Conclusion
In conclusion, ANZ Bank is one of the ‘big four’ banks in Australia and in terms of
market capitalisation, it is the third largest bank in Australia. The company has generated a
competitive advantage due to relatively lower interest rates and high-quality customer service
experience. However, the firm is facing fierce competition from Commonwealth Bank which
is the largest banking enterprise in Australia. The primary target market for ANZ Bank is
institutions and low to mid-income individuals who prefer low-interest rates and high
customer experience. The corporation is heavily involved in decision-making regarding
primary segment by creating strategies for product development, pricing, e-commerce and
overall expansion. ANZ Bank has an opportunity to expand its customer base in the area of
230 Swanston St, Melbourne VIC since it is heavily populated by low to mid-income
individuals who take home loans for purchasing new houses. This strategy can assist ANZ
Bank in expanding its business and sustaining its future development.

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http://shareholder.anz.com/our-company/profile/facts
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