Bank of China: A Comprehensive Marketing Plan Analysis Report

This report provides a detailed analysis of the Bank of China's marketing plan. It begins with an executive summary and then delves into the bank's STP (Segmentation, Targeting, and Positioning) strategy, exploring how the bank segments its market, targets specific customer groups, and positions its services. The report further examines both micro and macro factors influencing the bank's operations, including internal elements like asset management and external factors such as economic growth and monetary policy. An analysis of consumer perception is also included, assessing customer attitudes towards the bank's services across dimensions such as reliability, empathy, and responsiveness. Finally, the report reviews the marketing mix, including product, place, price, and promotion strategies, before concluding with a summary of key findings and references.

bank of china

Table of Contents
Bank of China..................................................................................................................................1
Executive summary.........................................................................................................................1
STP Strategy of BOC:.....................................................................................................................2
Segmentation................................................................................................................................2
Targeting......................................................................................................................................2
Positioning...................................................................................................................................3
Factors..............................................................................................................................................4
Micro factors................................................................................................................................4
Macro factors...............................................................................................................................5
Analysis of Consumer Perception...................................................................................................6
Marketing mix.................................................................................................................................8
Product in the marketing mix of Bank of China..........................................................................8
Place in the Marketing Mix of Bank of China.............................................................................9
Price in the Marketing Mix of Bank of China...........................................................................10
Promotion in the Marketing mix of Bank of China...................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................11
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Executive summary
Bank of China Limited is considered as one of the major state-owned commercial bank of
china which was established in 1912. It replaced Imperial Bank of China with the help of
Republican Government. It is the ancient bank in china which is still in existence. Till 1942,
Bank of China issued banknotes on behalf of the government along with another bank such as
Central Bank of China, Farmers bank of china and Bank of communications. In this report,
we will study about the marketing plan of Bank of China and also its success factors. This
will help in analyzing the perception of consumers towards the financial services of BSC.
Bank of China has many subsidiaries like BOC Hong Kong (Bell, 2013), BOCG Insurance
and other financial institutions, and BOC International. All these subsidiaries of the BOC
provide a broad range of superior financial services to corporate customers and individual as
well as different global financial institutions.
From the past few decades, Bank of China has played a significant role in the financial
history of China. It was established by the approval of DR. Sun Yat-Sen. In its 36 Years, the
bank served as the international exchange bank, central bank and specialized foreign trade
bank exclusively. During 1948, it was recognized as the state-designated foreign exchange
bank. Bank of China builds its strategic positioning in the market by building a new strategic
plan which was permitted by its Board of Directors in March 2010 (Chang, 2012). The main
aim of Bank of China behind building strategic positioning is to be a big multinational
banking group based on combined and varied cross-border business platform, with a central
business of commercial banking. Effective strategic positioning enables the bank to be a
growing internal bank delivering excellence and better quality services to its customers.
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STP Strategy of BOC:
Segmentation
Market segmentation is the process of viewing a heterogeneous market and also known as a
process of dividing a market into similar product needs and smaller groups, for the motive of
choosing appropriate target markets. Bank of China has segmented its market on the basis of
individual and institutional clients. Segmentation on the basis of Institutional clients enables a
closer match of corporate resources as per the segment requirements. By segmenting it also
helps in enhancing the customer satisfaction level because it identifies the requirements of
customers in an appropriate way. Apart from this it has also adopted the gender-based
segmentation which helped BOC in adjusting its communications policy to the degree to
which the customers can understand the composite nature of financial services. Recently,
men are the target segment of the Bank of China as women are viewed to be less confident
towards the financial services offered by the Bank of China. Segmentation strategy followed
by the BOC enabled it to enhance customer retention because the customers feel like they are
the part of the organization (Hassan, 2012). Large customer satisfaction is provided by BOC
through which it can easily foresee changes in buying behavior of the target market.
Targeting
Targeting process is known as a proactive selection of a suitable market segment. The target
market of Bank of China is Small and medium corporate clients or private individuals. BOC
follow different targeting strategies to target its potential customers. Overall marketing effort
of BOC is concentrated on the multi-market segment. Multi-market segment means Bank of
China is dealing with different products and services like credit services, deposit services,
loan services and various others. This strategy is chosen because it provides increased level
of satisfaction to its customers by satisfying their different needs. Multi-segment market
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concentration strategy also helps the Bank of China to spread its risk level. Bank of China
can build a solid position in multi-segment by utilizing good information about the
customers. Dibb (1991) states that there are two criteria that must be met when evaluating
target segments. First and foremost, BOC should ensure that targeted market segment should
be large enough and would be valuable for BOC. The Second criterion is that BOC should
determine its target market on the basis of its competitive advantage. BOC should plan its
activities carefully which enables it to gain a competitive advantage in the market.
Positioning
Positioning of services require Bank of China to place its products in the way that it is
acceptable to the selected target market segments and able to cope with their close
competitors. Placement of product in the market is affected by different factors. The
positioning of the product is a management strategy that utilizes the information to build a
strong impression of the product or service in accordance with the requirements of the
intended market. Bank of china has positioned its services very well in the market by offering
varied financial services including RMB clearing in Hong Kong. This will create a good
image of BOC in the market through which it can beat its competitors and enhance its
customers. Due to more competition from the other existing financial institutions, Bank of
China tries to produce effective financial services. This makes it different from other
financial institution. The following strategies are utilized by Bank of China to position itself
in the mind of consumers:
 Current accounts of BOC provide extra interest to customers
 BOC offers more privileges to customers with the least subscription fee.
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Factors
There are various factors that exist in the environment which influences the functioning of the
Bank of China in a significant manner. These factors can be on micro and macro level of the
environment.
Micro factors
Micro factors include those elements which are controllable by Bank of China’s management
effectively. Micro level factors which influence the functioning of Bank of China are bank's
internal factors, including the terms of asset size, capital liquidity, the size of the asset,
capital adequacy, operations management capabilities, risk control and asset quality. The
important issues to manage the profitability and competitiveness of Bank of China are to
minimize non-performing asset ratio and improve risk management capabilities (Ika, 2012).
Competitors are also considered the most influencing factors for Bank of China. Bank of
China faces tough competition from Industrial and Commercial bank of China and China
construction bank cooperation. It is necessary for BOC to note down every single activity of
their competitors which will help BOC in formulating its strategy as per their actions. Since
1981, two times non-performing asset disrobing has inserted new challenges to Bank of
China. A business model which emphasizes not only on the quality of asset but also on the
quantity is regularly being replaced by the modern philosophy of management.
Macro factors
Macro factors are those which influencing the profitability of Bank of China to a larger
extent. Macro-level factors for Bank of China mainly include monetary policy, inflation,
economic growth, financial development and economic cycle. From an international
viewpoint, the dynamic international situation brings uncertain macro environment for
banking services. Therefore, it is necessary for Bank of China to analyze external factors
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affecting their profitability. There are following macro factors which influence the operation
of the BOC in a significant manner:
1. Economic Growth
First, rising economic enhance social and consumer investment, thereby enhancing
the demand for bank credit, and earned more income through interest which
ultimately enhances the profits of Bank of China. Second, development of economic
leads progresses in trading activity, which enhances the transitional income of banks
and also leads to profit-enhancing (Soteriou,2013).
2. Monetary Policy
Quantitative monetary policies affect the profitability of Bank of China by controlling
the supply of money. First of all, monetary policy enhances the supply of money,
which directly enhance the level of available funds of banks, thereby ultimately
enhance the interest revenue of bank. Another thing, the rises in demand for bonds
enhance its level of price. We already know that there is an inverse relationship
between the interest's rates and prices of the bond. Lower the interest rates led higher
prices of bonds, which enhance investment and stimulates consumption. Increase the
scale of bank credit, therefore enhancing the income of BOC.
3. Inflation
It influences the earning capacity of Bank of China in the following ways:
 It minimizes the real income of consumers.
 Building consumers more agreeable to invest in different financial products of
BOC that have a higher rate of return.
4. Financial market development
There are both substitution effect complementary effect between indirect financing
and direct financing, and therefore the relationship between the financial markets and
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banking sector are uncertain. The growth of financial markets minimize the consumer
demands for banks, building an economical connection between them. In the
meantime, there is a definite complementary connection between financial markets
and banking sector because of their common promotion roles in the expansion
process. This will influence the functioning of Bank of China in a significant manner.
Political factors Economic factors
1. Formal and informal rules of
government
2. Unsettled political force
3. Legal issues for e-commerce
banking
4. Lack of regulations supporting
privacy, consumer rights
1. Skilled and abundant labor
2. Sigh rate of savings
3. Potential urban growth
4. High rate of inflation
5. More export business
6. High prices of property
Social factors Technological factors
1. Family size
2. Education
3. Religion
4. Consumer lifestyle
1. Development of new products
2. Dynamic purchasing mechanism
3. Innovative production technology
4. New working methods
Through all this, it can be said that macroeconomic do have an extensive influence to the
earning capacity of Bank of China. All the above mentioned macro factors have a positive
correlation with the effectiveness of bank.
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Analysis of Consumer Perception
Today, consumers have become more sensitive towards the products and services offered by
the different banks. Customers expect higher quality services from the Banks which, if
completed, could deliver result in an expressively enhanced manner. Customers can be
satisfied by providing efficient and valuable services. Consumers demand more security of
their income from the banks which will enables them in enhancing the trust of customers
towards banking services. Consumers feel more benefited by the E-channels policy of Bank
of China. This facilitates the customers of BOC in a significant manner. As per the
continuous growth in information technology, the world has become a large place, and it has
brought a various unpredictable revolution in the banking system. Customers in Rural
Branches of the Bank of China says that Bank of China is delivering excellent services to
them and also focuses more on building long lasting relationship with their existing
customers. In addition to it, customers in semi-urban areas concluded that services provided
by Bank of China are good but not of high quality. People of rural areas are different from
urban areas in thinking. To understand the consumer perception towards the banking services
we analyze their responses as per five different kinds of dimensions (Matthews, 2013). These
five dimensions namely, responsiveness, empathy, reliability, tangibility, and assurance.
 Reliability: On this parameter, it is found that the consumer attitude towards
reliability of banking services delivered by Bank of China has been highly
appreciated by the customers. The least efficient parameter of BOC is promptness
and quickness in handling the services. BOC services can be reliable only when it
focuses more on their customers and provides quick response in case of any problem.
This will improve the reliability level of Bank of China.
 Empathy: Most of the customers expressed that the bank employee's nature of willing
to help customers is really very excellent. It is the main important reason behind the
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success of Bank of China. It is important for BOC to maintain this performance.
Bank of China should solve customer problems related to bank operations on prompt
basis without wasting any time on it. Bank of China can be empathetic by keeping the
working hours most suitable to customers.
 Responsiveness: Customers expressed that the customer support services provided by
Bank of China show the highest responsiveness. Customers said that Bank of China
is provides effective services but it does not give quick response towards any
situation. This makes the functioning of BOC ineffective (Huang, 2016). Bank of
China should reducing the waiting time and also provide high support services to
their customers to enhance their responsiveness.
 Assurance: Customer said that assurance parameter of BOC is very efficient. This is
because BOC has efficient staff which manages the overall functioning of the
organization in an effective manner. Overall, Bank of China is considered more
creditworthy for the consumers.
 Tangibility: As per the feedback of consumers, employee’s professional way of
dressing and central location of BOC is considered to be the high scorer in terms of
tangibility parameters. Customers said that the visual appearance of BOC is excellent.
Due to this, it is the most demanding bank for customers.
Marketing mix
Creating a marketing mix for an organization is considered as the iportant function of
management. The marketing mix is about putting the right product, at the right place, at the
right time and at the right price.
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Product in the marketing mix of Bank of China
Bank of China is dealing with different products and services. It has a separate platform for
providing its efficient financial services to its customers. Product portfolio of BOC includes
below mentioned aspects:
 Personal banking, which is a combination of different services like personal savings
in the current account, optional deposit account, or installment fixed deposit. Personal
loans for business, education, housing and personal wealth management along with
provident fund comes under this banking. It also contains domestic remittance,
personal exchange through overseas-inward and also includes other services like bill
payment, bill transfers, and telephone banking.
 Corporate banking contains corporate financing through supplier's credit, export
buyers and syndicated loans. Corporate banking also enforces corporate savings, trade
services, and corporate financial services.
 Insurance contains various facilities like general insurance, life insurance, health
insurance and aviation insurance.
 Bank Cards contain Debit cards, Credit cards and utilization of ATM site (Bahadir,
2013). E-banking is also in high demand nowadays.
 Investment banking contains merger and acquisition, securities sale, IPO financing,
direct investment, financial consulting and investment research.
 Aircraft Leasing contains products and services for investors of aircraft like structured
finance, direct-operating lease and aircraft remarking.
 Management of Asset contains management of investor’s products and funds
management.
 Financial services contain referring services for institutions and individuals.
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Place in the Marketing Mix of Bank of China
Bank of China is considered extremely active in the international market, and it has
subsidiaries in every continent. It established its first overseas branch during 1929 in London.
Bank of China has operations in approximately 26 countries including Brazil, Canada,
France, USA, Australia and Germany. Efficient, professional capabilities of BOC enables it
to deliver effective customer services by implementing efficient and reliable strategies. Bank
of China continuously enhances retail operations infrastructure to certify qualitative services.
Its management channels also deliver financial services to different customers with a broad
network of the online platform, flexible service channels, branches, and automatic banking
facilities. Bank of China also provides one-stop answers through customer-solution
managers. It is also offers its products and services to personal and corporate clients through
its treasury-marketing team and efficient distribution network (Lin, 2013). Currently, it is
also finalizing a deal with AFG to deliver home loans by utilizing third-party channels. This
will enhance the customer base of BOC.
Price in the Marketing Mix of Bank of China
Corporate banking is considered as an important source of generating revenue. It established
this unit during 2008 for enhancing product innovation and promoting business interaction.
Its management team synchronized itself in the market of finance to build its pricing policies.
All products and services offered by BOC scrutinized effectively and then different policies
are created that maintains a proper balance between payments and affordability. It applies
least rates on its banking services and cards. This was done by the organization to maintain
its loyalty with its customers. Bank of China has efficient and skilled financial management
team that formulates effective pricing policies and reports based on outcomes of market
surveys so as to deliver high customer satisfaction.
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