Analysis of Customer Behavior in the Australian Banking Industry

This report analyzes customer behavior in the Australian banking industry, focusing on the social and environmental influences on consumer choices. It discusses the 7 P's of marketing in the banking industry and the importance of segmentation and targeting. The report provides insights into consumer behavior and buying decisions.

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Customer behaviour
12/23/2018

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Contents
Introduction...........................................................................................................................................3
Q1. Identifying social and environmental influences in financial market..............................................3
Q2 Influence of Social and Environmental factors on purchase of financial services............................4
7 P’s of Australian Banking Industry.....................................................................................................6
Segmentation.....................................................................................................................................8
Targeting...........................................................................................................................................8
Positioning.........................................................................................................................................9
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

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Introduction
The report brings about the discussion on the analysis of customer behaviour and the
related aspects. Consumer behaviour is an important study which includes the assessment of
certain external influences affecting the purchase decision of the individuals. Thus, the report
will assess all the social and environmental influences in context to the case study given in
Assessment one. The analysis of these influences will be studied in the case of Australian
banking industry, and the marketing strategies of the firms. In the later part, of the report
there will be description of the 7 or 4 P’s of marketing with context to the banking industry.
Q1. Identifying social and environmental influences in financial market
The case study of NAB (National Australian Bank) has represented different types of
consumer behaviour towards purchasing financial instruments from the banks or financial
institutions. Consumer behaviour is defined as the study of how individuals’ customer,
groups, or organisation and all the activities associated with the purchase, use, and disposal of
the goods and services. Thus, it is important for the marketers to understand consumer
behaviour to devise their strategies to attain higher profits in the industry. NAB is considered
as one of the four largest financial institutions in Australia in the aspects of market
capitalisation. Therefore, the case has represented different types of behaviour which has
been determined through the role of certain factors or influences (Joshi & Rahman, 2015).
Deregulation and the emergence of new forms of technology have created high
competitive market conditions, which has led to a critical impact on the buying behaviour of
consumers towards financial services. Thus, financial or banking institutions must also
identify and understanding the changing patterns of consumer behaviour and become able to
influence them. This has been linked to the assessment one, which showcases the behavioural
patterns of repeat-passive, rational active, no-purchase, and relational-dependent highlights
different ways the consumers behave to determine their decision regarding purchase of
financial instruments from NAB (Hsu, Huang & Galliers, 2014).
Social factors or influences play a vital role in determining the consumer behaviours
of individuals, such as reference groups, culture, social class, role in the society and others.
Similarly, environmental influences also affect the buying decision of consumers towards
financial instruments.

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The social factors in context to the case of National Australian Bank in Assessment
one, includes unawareness of the financial products, social belief related to the insurance
schemes or financial products, and the tax-saving ability of the consumers. In addition, to
these there are some other factors as the social need of the consumers to get access to
education, is one such aspect which helps them to acquire information about the financial
products; thereby making a purchase decision (Basu et al., 2015).
One example of the social factor or influence in the consumer decision towards
financial services or instruments can be reference groups. As it has been commonly found
that individuals make their decisions based in the part what their primary influence groups
has done, towards obtaining financial instruments. This has been one common aspect of
consumer influences in the banking industry across different countries (Mortimer et al., 2015).
The environmental influences includes introduction of new mobile apps, few visits to
the bank/financial institutions, air pollution in the environment of banks and several other
factors influence the purchase decision of consumers and their brand-switching process.
Nowadays, it has been found that certain mobile applications has been introduced which has
reduced the dependency on the paper-work. Thus, these above mentioned factors relate to the
consumer’s purchase decision, and their brand-switching process from one financial
institution to other in the banking industry (Daly & Gebremedhin, 2015).
Q2 Influence of Social and Environmental factors on purchase of financial
services
Following the above discussion, there will be a description how these social and
environmental factors play a role in influencing the purchase decision towards financial
instruments. The social factor, culture, or cultural norms impact the financial decisions of the
consumers, for an example some religions has forbidden or limited the amount of interest to
be charged on loans. Thus, the consumers or investors under this belief may find it
objectionable to invest in organisations which make money through charging interest
(Souiden & Rani, 2015).
Market experience in the financial market, as another social factor affects the decision
to purchase financial instruments. It has been a fact that the groups or individuals with more
money to spend, and appropriate knowledge of the financial instruments will have more
access to capital than other social groups. Thus, it indicates about a favourable decision of the

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consumers towards making purchase decision in the financial instruments from the banks
(Saeidi et al., 2015).
Empirical studies in the marketing strategies or consumer behaviour decisions
towards financial instruments has stated that factors such as confidence, loyalty and trust play
a key role to the customer’s choice towards financial services. The factor of social class has
been the major factor in brand switching and making investments in the financial products. It
has been a fact that the financial needs of the people from middle class are confined or
limited to savings account, mutual and pension funds, while individuals or consumers from
high class would prefer financial institutions. They view financial institutions with a global
perspective and financial instrument for active fund management. Moreover, the social
factors also include an individual’s past or previous experience or satisfaction from the
provided services from any particular banking institutions. For an example, if any consumer
gets satisfactory services from NAB then, he may switch to other brands or financial
institutions (Dootson, Beatson & Drennan, 2016).
In context to the case study given about NAB, it has been found that there have been
some consumers with the repeat-passive behaviour, and this occurs due to less involvement in
the financial products. The consumers who are passive, are generally those who although
makes repeated transactions with a particular banking institutions rather looking out for other
alternatives available in the financial market. Thus, it is one of the most important aspects in
the banking industry, affecting the purchase decision of the consumers (Goodhart &
Schoenmaker, 2016).
To discuss about the consumer’s choices and buying behaviour in context to the
Australian banking industry it can be stated that Australia has sophisticated, competitive and
profitable financial sector which effectively operates the financial or banking institutions in
the industry. Consumers in the Australian financial are said to lack the required level of
literacy and education on the finance to be able to make logical and prudent decision in the
market. Due to this factor, the Australian banking industry has been one of the highly
regulated banking industries in the world (Worthington, 2016).
The consumers, who are literate and possess required knowledge, are able to make
diversified investments across different banks in the country. As per the research conducted
in the banking industry, i.e. Australian banking industry, consumers are satisfied with the

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services provided by the banks, thus they show a positive behaviour towards the institution
(Coburn & Penuel, 2016).
The understanding of these social and environmental influences for the marketers or
banking institutions is equally important along with the consumers, to devise their marketing
strategies. To describe the strategies of marketers from different perspective, 7 P’s of
marketing would be discussed in the banking industry.
7 P’s of Australian Banking Industry
7 P’s of marketing mix play an important role in the marketing of banking services,
and similar to the marketing of other products, it has several elements. These elements
include product, price, place, promotion, people, processes, and physical evidence. For the
product in terms of financial market, it states that the product must satisfy the needs and
wants of consumers (Howell, 2015).
Discussing about the prices it means that the prices of the products are fixed in terms
of the interest rates, service charges, and other fees which is used to cover transaction costs,
overheads and the risk premium. In context to the NAB, it has been found that the bank is
known to provide one of the most premium banking service, and the number of customers
hold by the bank is very large. This represents the fact that the marketers at bank offer
services at a very strategic and economical price. This ensures about their understanding
about the social and environmental influences which affects their customers (Apergis &
Cooray, 2015).
Promotion in context to the financial institutions and banks refers to all the vehicles
which are used to inform, educate, and image building. National Australian Bank (NAB)
practices promotion on the basis of clients/consumers, through focusing on the varying needs
of the customers in different regions. As there has been a shift from the conventional
advertising methods, therefore, NAB has also used ‘Break up’ campaign to promote their
financial services, which turned out be a huge success on social media (Daly & Gebremedhin,
2015).
Place or ‘branch’ on other hand, is an important element in the banking services, as
the features such as location of the banks, and convenience is the major factor which will
determine the choice of bank by the consumers. NAB, offers their services and products
(financial instruments) and practices their operations efficiently in Australia and New

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Zealand, and for the people living in these countries the location of the bank is approachable.
Thus, these aspects state that NAB considers the risk of factors which may influence buyer
decision before strategizing their goals (Honka, Hortaçsu & Vitorino, 2017).
‘People’ are a major element of the marketing mix in context to NAB, as they devise
strategies and plans to reach out to the customers. A motivated and dedicated team or staff
working with a positive attitude in the favour of business development and a high quality
services will make the best most preferred by the customers in Australia.
Highlighting the aspect or element of processes in the marketing of banking services
or products, it can be stated that process here refers to systems and procedures, which are
used as vehicles for delivering maximum customer satisfaction. Hence, banks keep refining
and redesigning their systems, and procedures to manage and enhance the level of customer
satisfaction. The process in NAB usually starts when a customer reaches out to any branch or
outlet of the NAB, to access to the required information whatever they need. Then, the further
processes are carried out by the branch employee, as he is responsible to look for the required
information, and accordingly provide services to the customer.
The element of Physical evidence, deals with understanding and evaluating the
service before making a purchase and also to assess the customer’s comfort zone received
with the service, and even after the consumption. Under the element of physical evidence, it
has been understood that factors such as lighting, colour, environment, temperature are some
aspects which helps in developing a favourable perceptions amongst consumers.
Physical evidence in NAB is available in terms of the awards and accolades which are
some of the achievements. In addition, there are number of reports which also mentions about
the bank and they are also shared amongst the customers to acquire the information (Oliver,
2014). Thus, the bank must consider the social influence which may affect the buying
behaviour of consumers, as physical evidence play a vital role in directing consumers towards
obtaining financial services from NAB.

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Segmentation
Market segmentation refers to the process of viewing heterogeneous market that
consists some smaller homogenous parts, which are called as segments. Thus, to describe the
term more precisely, it can be stated that segmentation results into each consumer being
treated in a different manner.
Segmentation in the financial services or banking industry involves certain aspects
which deal with the different regions of the market, and it is considered as an important
aspect. Segmentation acts as the basis of other marketing strategies such as targeting,
positioning of the product and services. However, due to the high costs in the banking
services, individual marketing is rarely present in the consumer market. Segmentation or the
consumers which are amongst 9 segment markets, i.e. non-customers, middle-value
customers, high value customers and others. Segmentation in the Australian market must be
done keeping in mind all the aspects of social or environmental influences’ and their role in
determining purchase from the bank (Lovelock & Patterson, 2015).
Thus, to discuss about the STP policies or marketing strategy mentions that the
National Australian Bank segments the enterprises and the individuals who seek financial
advice or help from the institutions. It indicates about the categorisation of segments into two,
i.e. consumers and businesses, and provides services. Therefore, the Australian bank caters to
the different needs of the customers according to their requirements.
It has been found that some financial institutions which fail in effective segmentation
are observed with some of the major impacts on their services. Customers or consumers with
different needs or requirements are served differently, with the same financial service, and
communication policies. Due to this aspect, it results into some negative aspects such as
reduced consumer satisfaction, and it becomes hard to retain consumers for a long period of
time.
Targeting
Under the case of Australian banking industry, which includes the aspect of National
Australian bank it can be stated that the bank targets the large enterprises, and rich individual
investors for marketing their financial instruments or services in the country (Lees, Winchester
& De Silva, 2016).

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Discussing about the present marketing strategy of the banking firm, i.e. National
Australian bank from the given case study in assessment one, the current audience are the
present customers. These existing customers are targeted by the national Australian bank,
from different banking institutions. In addition, it has been also analysed from the case that
bank targets some college or university students who seek for the financial services or
advices. Thus, the bank further provides them required information and advice regarding
investing in financial instruments.
Positioning
The concept or marketing strategy of positioning, in context to the marketing of goods
and services, in general refers to gaining an understanding about the position of the market
/firm in the minds of consumers.
In the case of National Australian bank, it has been found that the positioning here is
referred to the organisation, which would be able to manage at every stage in the life.
Although, NAB has been working efficiently over years, but the company or firm must
ensure developing a good corporate image in the minds of consumers and the way consumers
perceive the products and services offered. The positioning strategy of the banking industry
in Australia has been effective which led to a positive change on the consumer’s buying
decision towards purchasing the financial instruments. Therefore, the above description has
stated about the bank’s positioning strategy which highlights the profitability and stability in
the Australian banking industry (Petersen, Kushwaha & Kumar, 2015).
Conclusion
To conclude the above discussion, it has been analysed that social and environmental
factors influence the buyer’s behaviour to a major extent. The report has described the role of
these influences on the consumer’s purchase decision for financial instruments in the
Australian banking industry. Thus, it has been clearly understood that the banks or marketers
must understand and provide their services considering the nature of consumer behaviour in
different sections of society. As the Australian banking industry has been highly distinctive
thus, marketers must focus on devising appropriate strategy to market their financial
instruments and generating high trust and customer loyalty towards their institutions. Hence,
the report has stated different influences which determine the buying behaviour of consumers
in the financial market.

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