Marketing Management: Customer Perceived Value of Hong Leong Bank

This report delves into the concept of customer perceived value within the banking sector, emphasizing its significance in today's competitive market. It begins with a comprehensive introduction, defining key terms and outlining the importance of meeting and exceeding customer expectations, particularly in light of external factors like technological advancements and competitor actions. The report then examines the customer perceived value in the banking sector, using the Sanchez model to analyze the value proposition of Hong Leong Bank Berhad and its competitor, Public Bank Berhad. The analysis includes a detailed breakdown of perceived benefits (economic, emotional, social, and relationship) and sacrifices (price, time, effort, risk, and inconvenience). The report contrasts the value propositions of Hong Leong Bank and Public Bank, highlighting the key differences in their approaches to customer experience, competitive positioning, and benefits offered. Finally, it concludes with a discussion of the lessons learned from the module and a plan to implement the value chain to improve customer satisfaction and loyalty.

MARKETING
MANAGEMENT

Table of Contents
MARKETING MANAGEMENT....................................................................................................1
1.0Introduction.................................................................................................................................3
Definitions...................................................................................................................................3
2.0Customer Perceive Value of Banking Sector..............................................................................3
Perceived Benefits.......................................................................................................................4
Economic Benefits...................................................................................................4
Emotional Benefits............................................................................................................5
Social Benefits...................................................................................................................5
Relationship Benefit..........................................................................................................5
Sacrifices.....................................................................................................................................6
Price, Time and Effort Sacrifices ......................................................................................6
Risk and Inconvenience.....................................................................................................6
2. Contrast the value proposition of Hong Leong Bank..............................................................6
3. Benchmark the two value propositions comparing and contrasting.......................................8
4. what had been learnt from the module....................................................................................8
5. Plan to implement the value chain..........................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

Introduction
To meet the potential customer needs and keep the early adopters loyal by just meeting their
needs are insufficient nowadays. Because of the external factors that may disrupt the habits of
customers such as technology and competition, the customers are expecting more than their
expectations. Therefore, the use of the concept of perceived value has gradually become a
priority for business sustainability as well as the key of success in the high market competition
(Septa et al., 2016).
The purpose of this paper is to identify the customer perceived value in the banking sector using
Sanchez model to measure the value proposition of Hong Leong Bank Berhad and the leading
competitor, Public Bank Berhad according to the list of top banks in Malaysia relbanks (n.d.)
based on total assets. Through to end of this research, the new value of proposition will be
proposed to meet the value criteria of the customers and provided with the implementation plan.
Definitions
Author Model Definition
Woodruff (1997) Value Hierachy Model
He defined perceived value as “customer‟s perceived preference for an
evaluation of those product attributes, attribute performances, and
consequences arising from use that facilitate (or block) achieving the
customer‟s goals and purpose in use situations.
Holbrook and Hirschman (1982) Utilitarian and Hedonic Model
They had a notion that value should not only viewed from utilitarian
perspective in which the product is valued based on its performance or
functions, but also include the experiential perspective in
which the product is valued based on the experience or the feeling arouse
from consumption, including the symbolic
and hedonic aspect
Sheth et al (1991) Consumption Value Theory
They suggested five dimensions of value namely functional value which is
related to the utilitarian or functional purpose of the product, social value
which is related to the image obtained from the society, emotional value
which is related to the feeling arouse from using the product, epistemic value
which is related to the curiosity or desire for knowledge or novelty seeking,
and conditional value which is derived due to specific situation or
circumstances that faced by the consumers.
Holbrook (1996) Holbrook Typology of Consumer Value
His perceived value can be defined as “an interactive relativistic preference
experience.” By interactive He meant that value entails the relationship
between the customer and the product, it is comparative, subjective, and
specific to the context. He claimed that the customer perceived the value not
in the purchase stage however during the consumption stage.
(Source: Septa et al., 2016)
Customer Perceive Value of Banking Sector
In the recent years, the banking sector was changing remarkably due to several of external
factors. Karin (2011) has identified 5 notable factors below:
1) Competitors in the same industry such as foreign and local banks.
2) Competitors in different industry such as leasing and money lender companies.

3) Change of IT technologies
4) Change of customer service channel
5) Marketing strategy development
Despite most of the banks have taken initiative in generating perceived value for the customers,
the customer’s dissatisfaction level was not improved (Johnston, 1997). (Juan et al., 2006)
highlighted that majority of the banks are defining the “customer value” as the value that the
customer generates for them, instead of the value that the Banks can offer their customers. Due
to this misperception, this paper will use Sanchez model to examine and analyze the customer
perceived value for banking sector. Since in the previous study such as Juan et al. (2006) was
using the Sanchez model to analyze the customer perceived value in banking sector, hence this is
the suitable model. According to Sanchez et al. (2006), there are two main components in
Sanchez model which are benefits and sacrifices. Table 1 below is showing the two main
components in banking sector:
Perceived Benefits Perceived Sacrifices
Economic Benefits
1)Lower financial cost
2)Higher return of investment
Price Sacrifice
1)Cost of travelling to branches
2)Cost of purchasing the smartphone
3)Cost of internet subscription
Emotional Benefits
1)Personalized and customised products
Time Sacrifice
1)Queue time
2)Processing time
Social Benefits
1)Service quality
2)Convenience
Effort Sacrifice
1)Adoption of new technology
Relationship Benefits
1)Service prior availing it
2)Post service
Risk
1)Wrongly made transactions due to no training is provided.
2)Transaction is unsuccessful due to poor connection.
Inconvenience
1)Website is not user-friendly
2)Limited of ATM
Table 1
Perceived Benefits
Economic Benefits
In the previous study, Reichheld (1993) highlighted that customers are exploring the lower
financial cost with more services by comparing the different banks in the market. Therefore,
customers are usually looking for more variety of customized products and personalized services

at lower price (Anna, 2011). Customer satisfaction is achievable when customers are rewarded
through their cash flow is accelerated, increased in residual value of cash and decreased in
volatility of cash flow (Wang et. al., 2009). To increase the number of satisfied customers and
establish customer perceived value, the loyalty customers is important to act as a marketing
agent by spreading positive word-of-mouth (Reichheld and Sasser, 1990).
Emotional Benefits
There are several service channels provided by Bank such as ATM, telephone and internet in
order to satisfy customers with diverse intimacy preference. Majority of the customers are
expecting Bank is responsible to improve the quality of their lifestyle (Anna, 2011). Thus,
personalized service is highly demanded by the customers (Zineldin, 1995).
Social Benefits
Many studies have been conducted in the past to analyze the importance of service quality as
well as to enhance the customer loyalty (i.e. Ladhari et. al., 2011 and Robinson, 1999). Lee and
Sedigheh (2015) do believe that the increased of perceived value is followed by a higher service
quality. Perceived service quality, perceived value and customer satisfaction are the important
concepts in the retail banking industry despite these concepts are interlinked, intangible, complex
and relatively vague (Aleksandra and Boris, 2010).
Perceived convenience is one of the major factors that may influence the customer’s satisfaction
(Levesque & McDougall, 1996). Convenience has been defined by Lee and Sedigheh (2015)
that it is an ability to approach bank services through its location, operating hours, ATM
location, and the presence of a complete range of available services. Subsequently, Almossawi
(2001) affirmed that customers are highly concerned on bank’s location, the presence of 24-hour
ATM and parking availability in the bank premises.
Relationship Benefit
Empathetic service to customer is providing customer service with reliability and security which
will result to a higher perceived value (Lee and Sedigheh, 2015). For example, service before
availing it and post service. Service before availing it is demonstrating a concern about the
customer’s need on financial products or services. Furthermore, the post service is a service after

sales to the customers about their concerns. Stone (2009) has emphasized that customers prefer
their queries are attended promptly and services are delivered timely.
Sacrifices
Price, Time and Effort Sacrifices
There are two broad types of customer perceived sacrifice: monetary costs and non-monetary
costs (De Ruyter et al., 1997). In the previous study, Sirohi et al. (1998) defined value-for-money
assessment as “what you get for what you pay”. Therefore, the perceived benefits are depending
on price paid. To maximize the perceived benefits, customers are willing to sacrifice additional
money to travel within a reasonable distance for better banking services, buying smartphone and
subscribe mobile internet to use banking services whenever wanted. Moreover, queue time and
processing time are common issue facing by customers in banking sector because majority of the
customer values their time is more important than dollar cost (Carothers and Adam, 1991). The
change of IT technology is providing the convenience to the customers to perform banking
transaction via internet, hence the effort in adoption of new technology is a sacrifice.
Risk and Inconvenience
Titrade et al., (2008) have identified the transaction risk of internet banking and generally, this
risk arises from fraudulent activity and processing errors which customers may potentially facing
these issues. Subsequently, customers may face some challenges despite various service channels
are provided and the common channels are internet banking and Automated Teller Machine
(ATM). For security reason and capacity issue, the service availability of these channels may be
limited.
2. Contrast the value proposition of Hong Leong Bank.
Customer value proposition is an sum of the total of the benefits which an company
promises the customers that will receive in the return of the customers with the payment. A
customer value chain is an proposition is an business or the marketing statement that it is
describes the why of the customers that should use the services. It is important as it gives the
reasons to the customers to why they have to use the products and that can make the Hong Leong
Bank to make differentiate from there competitors. They requires some of the things in the
company as(Chan, Heand Wang., 2012). Hong Leong Bank is providing their customer the

quality, they provides the best quality services to there customers at the reasonable and
affordable prices. Which can make them think about t use the services of the company as it
attract more them there competitors as they provides the best services to their customers in the
affordable prices and easily.
The entrepreneurship is to make the management vision to be achieved the entrepreneur
tries to do the best and required things in the organisation has to do the better things in the
organisation which will make them get achievement in their business. Hong Leong Bank
provides various incentive plans for the customer beneficial point of view so that more customers
get attracted towards their company and get familiarise with the Hong leong Bank. They use to
make and create new innovations where ever they are required and when ever they have to do it.
They want to make their bank the number one bank in their country and outside of that so they
can get more attraction of the peoples of the place as they are required to help them in achieving
the growth and popularity among the all of them(Chaston., 2014). Human resource plays an
important role in any of the organisation as it helps the organisation to achieve the growth and
success because they have to make the possible effects to make attract the people towards there
organisation so they can make then use their services and they can get most of the attraction of
the people. And this bank has the best skill and knowledge human resource working with their
organisation, they select the people according to the knowledge and the proper skill as it will
make people to attract more and so that they can provide the best services to customers according
to the customer’s needs and wants(Goworekand McGoldrick., 2015). The best thing is that they
all have the unity among them as they use to do all things in an proper manner and with all of
them together and they use to help one another in all the situations and makes them different too.
There is a friendly and healthy working environment in the Hong Leong Bank this helps in
working more effectively and freely for the employees. They always try to make improvements
in their operational activities which they do and they use to make it better day by day to make the
customers happy with their performance and it can make trust on the bank and they will like to
get connected with them only. And they even take care of the social responsibilities and they
respects that and try their maximum to make the society get benefit and can be happy with their
services. As it can help them to achieve a great trust from peoples living in the society and that
will help them to solve many of the problems(Huttand Speh., 2012). And they use to create the

wealth for the society for their betterment as the society can make use of it and can get many of
the good things in their society.
Basic Hong Leong bank Private bank Berhad
Customer experience They provide the best quality
services to there customer’s so
that they customers can get
benefits and they can get them
attract. And the customers are
also liking there services and
there experience with this bank
is good.
They provides the services to
the customers which they
want. The customers needs the
some of the personal attention
from them. They do not make
any care about it. They mainly
focus on there work.
Competitive positioning In the recent time it is having
the little high position then the
private bank berhad
This is an competitor of the
Hong Leong bank at this
recent time it is little low then
the Hong bank.
Benefits They provide the best services
to the customers, it provides
the many kinds of the services
which is Islamic religion is
also involved in it.
They provides the service less
according to the Hong Leong
Bank.
Price and competitive They are providing the
services which is affordable to
the customers.
They provide the services to
the customers in an little high
as the customer’s do not afford
it so they prefer the other bank.
3. Benchmark the two value propositions comparing and contrasting.
Most of the companies regularly engage in the benchmarking of their performance in the
main function like the manufacturing, supply chain and quality. The value and pricing
competitive intelligence in this the aim is not mainly to grasp the things which an consumer are
willing to pay to an service which an company is providing(Perreault., Cannonand McCarthy.,
2013). Functional values it makes the consumption of decision-making process of the especially

in some of the items. The social value of the products and the services which are been obtained
from the associations in positive or negative way. Emotional value- there are many different
kinds of the products and the services which are related with the emotions. And many of them
had been made the widespread of the feelings in the advertisement and all the organisation use
this. Epistemic value is an wish to know something different.
In value and pricing management practices benchmarking an getting an better or an
optimal price for particular services at most of the time can be achieved with the sufficient of the
market research and the analysis. This can help the company to get achieve the possible and the
aim which they have to do. Hong Leong Bank provides to their customers an best possible
services so that they can get the best services from them then the other banks and they can get
attracted by them in an proper and good way(Shaniand Chalasani., 2013).
Hong Leong Bank provides various alternative services and beneficial schemes to the
customers for gaining more attention of customers towards their bank. They also provide them
the services in an proper manner which will make them use the services to their bank in an easy
way so they would not face any such problems and as well as they could get attract more. They
try to give their customers the best quality of the services. And they follow the rules and
regulations of the and take cares of the societies responsibilities and make them fulfil it in an
proper way so that they can make the many things better in the society and can get the things
better for them and the society. This can help them to get the peoples trust on there company and
they will make efforts to use the services of the company. Hong Long Bank basically aims for
providing their best services to their customers and providing the customer satisfaction fully. The
comparison of Hong Long Bank and public bank because it is a strong group with the assets of
more than RM 140 billion as well as having a more comprehensive portfolio of the products and
services which is to be serve to the community. They have to expand the distribution network for
the convenience of the consumers with more than approx. 300 branches. Along with this they
focuses on the individual person or the consumers and on the basis of that they can make the
merger as well as integration which helps them in doing the acquisition of assets and liabilities.
4. what had been learnt from the module.
The people who are smart and wise they use to learn from the experience of the others. In
creating of the bridge in the gap between the My din value and the CPV towards the bank. As the
bank is providing the services to the customer in an best possible way and they are giving the

services in the affordable prices as the customers can try to use it if they can pay that much of the
amount(Wilsonand Gilligan., 2012). In an new perceived value it is been analysed that if the
people will get the services in an premium price then they will make effort to buy it as they can
get attracted by the amount so they will be in an high quantity. Hong Leong Bank provides their
services at an affordable prices that attain more people to buy frequently and leads to beneficial
for the bank to attract more people and increase in bank services providing.
Implementation of the plan is important as it will after the plan is been made in the
organisation so that they can get the benefits according to the which the plan is been made. For
implementing the plans in the organisation they have to follow the 4 Ps in the organisation. Four
Ps are:
 Products- There are the products which they have to give to there customer’s so that they
can get the benefits of the products and the services of the organisation.
 Price- in this they have to plan the price according to the products and from the other
resources.
 Place- they have to plan the place where they can sell there products. The place should be
perfect so that they can sell more products.
 Promotion- in this the company use to choose the channel from which they have to
promote there product and services to there customer’s.
5. Plan to implement the value chain.
Implementing the plan is based on the two way, internally and externally and both has to
be followed and they have to make the required changes in the both of the following things has it
can make the proper plans in the organisation and that can make the people do the things ion the
better way in the bank(Marketing mix modelling.2016). They have to implement the new plans
which will help in getting new things and new ideas to fulfil the customer needs and wants. Hong
Leong Bank leads to innovations in their working plans and leads to updates in the working by
adopting new technologies for the bank. This influence to efficiency in the bank working.
CONCLUSION
From the above report it is been analysed that the marketing management is necessary in
the organisation as it helps the bank in getting the important strategies to plan and to implement
that in the organisation.

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