Marketing Strategies: An Analysis of HSBC Australia's STP Approach

This report analyzes the marketing strategies of HSBC Australia, focusing on segmentation, targeting, and positioning (STP). The report begins with an executive summary and provides an overview of HSBC, detailing its global presence and services. Part A examines HSBC's market segmentation, including geographic, demographic, psychographic, and behavioral approaches, outlining the advantages and disadvantages of each. Part B analyzes HSBC's target market, identifying primary and secondary customer segments. The report utilizes a consumer profile template for this analysis. Part C focuses on HSBC's current positioning and offers recommendations for developing new positioning statements. The report aims to provide insights into HSBC's market approach and is a valuable resource for understanding STP principles in the banking sector. It also includes references and figures to support the analysis.

Running Head: Marketing 1

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Executive summary
In the highly competitive environment, it is important for the business organizations to
identify the potential customer base for the growth and success in then business operations. By
adopting proper segmentation, targeting and positioning statement, any organization can
establish itself in the competitive environment. With the effective STP process, organization can
use limited resources to get best advantages in the business. This report will focus on the role and
important of segmentation, target market and positioning in the business of an organization. For
the discussion, the famous Australian bank HSBC will be taken. This report will focus on the
segmentation parts of the market done by HSBC bank. Advantages and disadvantages in
segmentation will also be described in the report. After that, primary and secondary target market
will also be identified with the help of consumer profile template. Positioning statement is the
crucial part of the business in market. Positioning of HSBC will be identified and some
recommendations will be provided for developing new positioning statement for the operating
market. This report will be very helpful for HSBC Australia to identify its potential target
customers.

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Contents
Executive summary.........................................................................................................................2
List of Figures..................................................................................................................................3
Overview..........................................................................................................................................4
Company overview......................................................................................................................4
Part A: Analysis of Segmentation....................................................................................................5
Geographic segmentation.............................................................................................................6
Demographic segmentation..........................................................................................................7
Psychographic segmentation........................................................................................................8
Behavioral segmentation..............................................................................................................8
Part B: Analysis of Target market...................................................................................................9
Primary target market...................................................................................................................9
Secondary target market.............................................................................................................10
Part C: Analysis of Positioning......................................................................................................11
Recommendations......................................................................................................................11
References......................................................................................................................................13
List of Figures
Table 1: Consumer Profile Template...............................................................................................9
Figure 1: Market Segmentation.......................................................................................................5

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Overview
Today, segmentation, targeting and positioning is important strategic approach in the
modern marketing. These approaches are one of the most commonly applied marketing models
in the business practices by the organizations. The STP models are very helpful while any
organization is trying to achieve strong position in the operating market. In the organizations, the
managers should understand the role and importance of the segmentation and target market in the
business operations along with the specific criteria of the successful segmentation. Organizations
divide the markets into identifiable groups so that the custom marketing mix can be created for
the specific group (Armstrong & Cunningham, 2012). For the discussion, the organization HSBC
Australia has taken. This report analyzes the application of segmentation theories and the
identification of relevant target market for HSBC. Along with this, report also identifies the
positioning statements of the organization in the operating market.
Company overview
HSBC is popular as the largest banking and financial service institutions in Australia.
This is considered as the local bank of world. The organization was established in the year 1865
as the Hong Kong and Shanghai Corporation Limited. Bank is operating with four global
businesses i.e. commercial banking, retail banking and wealth management, global private
banking and global banking & market. In current time, bank is providing services to 45 million
customers by its banking products and services. HSBC has its wide network of the banking
services covering 71 countries including Europe, Africa, America, Asia, and North America and
Latin America. Being international bank, HSBC always values the cultural factors and diversity
of the country in which it is operating.
In the country Australia, HSBC had started its operations in 1986 as a finance company.
Now, it is popular brand name in the Australian banking industry. The bank has established itself
as leading bank having wide range of banking product and services related to commercial, retail
and institutional sectors. Currently, HSBC has 25 branches in Australia and it is seeking to
increase the number of branches in all over the country. For this manner, there is the need to
attract more and more customers for its financial products and services. Bank has wide range of
financial services for the customers and those are as follows:

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Consumer finance-
This service includes sales credits provided by bank for lending the money to the
customers and providing effective banking services to fulfill the financial needs and
requirements of the customers.
Personal finance services-
There are more than 100 million customers availing personal finance services. HSBC is
providing wide range of personal finance services to the customers i.e. loans, mortgages, savings
accounts, insurance, pension, credit cards, investments services.
Commercial banking-
In this service, bank is providing the services to the small and medium enterprises. There
are around 2 million customers of clubs, companies, sole proprietors, partnership and association
(HSBC Bank, 2017).
Part A: Analysis of Segmentation
Segmentation is basically the process of dividing or breaking down the markets into
various groups. These various groups are similar with each other in terms of behavior and
characteristics. In the process of segmentation, the whole market is divided into various
segments based on the locations, customers and their taste and preferences. It is an effective
marketing strategy. Marketing managers basically use marketing segmentations to understand
and identify the potential target market so that they attain their marketing objectives effectively.
So, the marketing segmentations is about dividing and defining the larger market into smaller
groups. Segmentation is very effective marketing tool for the companies that are trying to
establish a strong presence in the operating market (Bickhoff, Hollensen & Opresnik, 2014).
Market segmentation allows the company to be more selective in terms of the customers
for whom they are doing the marketing of products and services. By the marketing
segmentations, companies are able to focus on the marketing energy to achieve high level of
competitive advantage in the operating market. Marketing segmentation is the most important
part for the marketing strategy development. This basically includes customer needs,

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expectation, perception and their buying behavior to satisfy the customers in the similar manner.
One segment can be different from another in terms consumer profile and their buying behavior.
In case of HSBC, the bank has also divided the consumer market based on their financial needs.
The marketing segmentation done by HSBC based on some characteristics of the customers.
HSBC has done its market segmentations based on demographics, geographic, socioeconomic,
psychographic, behavior and benefits of the customers.
Figure 1: Market Segmentation
(Source: Peck, 2013)
Geographic segmentation
The geographic segmentation divides the consumer market based on various geographical
factors such as country, state, city, continent and region etc. After establishing the branches with
in the cities of Australia, HSBC bank is now focusing on the rural and urban areas of the country.
Reason is that people in the urban and rural areas have to face many difficulties when they have
financial needs. By opening more branches in the rural areas, it will be able to improve its
customer base (Ghosal, 2013).

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Advantage-
This is a valuable approach for a large company like HSBC bank that is operating in
many countries. So the geographic segmentation allows the bank to understand the cultural
differences among the countries. Along with this, it is helpful for HSBC to understand the
difference in the socio-economic status in different areas.
Disadvantage-
Despite of having advantages, geographic segmentation has some disadvantages. This
type of segmentation is quite limited because it assumes that all the customers have same needs
and requirements in a geographical area. But, in terms of the financial needs, this assumption is
not applicable. So, there is the need to use this type of segmentation in the combination of other
segmentation.
Demographic segmentation
In the demographic segmentation, HSBC has divided the market based on the age group,
status, work and old age people. In the age group, bank is focusing mainly on the young and
adults people having the age of 20 to 55 years. The reason is that these people have various
financial needs in their daily lives. Further, bank has focused on female married women with the
age group of 20 to 55 years. By targeting them, bank is trying to encourage them for savings.
Further, business men and women are targeted who are going to be retired or who have taken
self-retirement or are retired with age group of 40 to 70 years. Next, bank has targeted senior
citizen with the age group of 55 to 75 years (Yaw, 2011).
Advantage-
This type of segmentation is very easy to apply and use as the statistical data of the
government is always available in most of the countries. In this segmentation, appropriate and
suitable data related to the customers can be achieved quickly and easily. The demographic
segmentation done by HSBC is easy for each person to understand i.e. management, sales and
customer service staff.
Disadvantage-

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Like geographic location, this approach also has some limitations as it is based on the
assumption that the customers in the same demographic status would have similar needs. But, the
fact is that customers having 30 years do not have same needs and financial needs. So, this is can
be biggest limitation for HSBC with this segmentation approach as it has very little
understanding of customers (Peñaloza, Toulouse & Visconti, 2013).
Psychographic segmentation
In the psychographic segmentation, bank tries to target the customers based on the social
class, living style and the personal traits of the customers. By focusing on these characteristics if
the consumers, bank is able to identify the needs and requirements of the customers in the
operating market. In the psychographic based segmentation, HSBC tries to target high earning
individuals, high earning family and senior citizen (Mahfud, 2016).
Advantage-
This type of segmentation provides a better insight about the customers by understanding
their needs and motives. The psychographic segmentation is focused on the personal
characteristics of the customers such as income, likes, preferences which provide better
understanding of the requirements and financial needs of the customers.
Disadvantage-
This segmentation needs a detailed data and interpretation about the customers. So, this
approach is difficult for the small organizations. This is the drawback of the psychographic
segmentation as it is not easy to access data of many customers in the real life.
Behavioral segmentation
In the behavioral segmentation, organization divides the customers in to various
groups based on their behavior, attitude, knowledge and their response towards products or
services such as loyalty status, user status and occasions etc. Combination of diverse variables is
important to select the target market for the specific product or services. HSBC targets the
customers based on the necessity, easiness, luxury and ease of use (Hakimi, 2014).
Advantage-

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Like above discussed segmentations, behavioral segmentation is also beneficial for the
organizations. This segmentation is often used in the matured markets where the organization
understands to target the customers based on their behavior and attitude towards the specific
products. This approach is helpful in converting the non-users to medium user for a specific
product.
Disadvantage-
One of the disadvantage of this approach is that it does not focus on the fact that why the
customers are buying the product. Along with this, it does not focus on the needs and lifestyle of
the customers. Further, it depends upon the detailed marketing intelligence, market models and
experimentations.
Part B: Analysis of Target market
By the segmentation process, organizations are able to specify and identify the market
opportunities for the successful business operations. After completing the market segmentations,
next important step for the company is target market. Targeting the customers is crucial to find
out the market in which the organization can compete with the competitors. Before targeting the
customers, it is essential to have proper marketing strategy by the organization. Targeting is all
about the evaluation of the segmented market and customers (Cognizant, 2013).
In case of HSBC, bank targets the customers for the personal banking, investments, assets
and personal finance services. HSBC basically improves its customer base by focusing on the
existing customers instead of targeting new customers. Bank is focused on increasing portfolio of
the products and retaining the growth. Along with this, HSBC mainly targets female customers
as they love shopping. By focusing on the shopping lovers, bank is able to cover entire age group
in the market. Further, in the target customers of HSBC, there is middle to high range of income
groups. For the credit cards, bank targets the customers based on demographic segmentation i.e.
shopaholic customers (Peck et al, 2013).
Primary target market
Primary targets of HSBC are those people who need financial support in their daily lives.
In this market, bank focuses on people with family including young single, young married,

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person having children or no child and female customers. Aim of the bank by targeting these
people is to encourage them for savings.
Secondary target market
Further, in the secondary target market bank is focusing on the people with occupation. In
this market, bank targets professionals, managers, clericals, sales, farmers, retired people,
students an unemployed people. By targeting these people, bank has aim to provide fulfill their
financial needs and requirements. The target market of HSBC Australia can be described by the
‘consumer profile’ template.
Table 1: Consumer Profile Template
Consumer Profile target by HSBC
Geographical Region First is by countries and second is Geographical region in
Australia
Metro Size 5,000 to 4,000,000 or over
Density Rural, Urban and suburban
Demographic age From 6 to 64+
Family life cycle young single, young married, person having children or
no child and female customers
Gender Male and female
Income Basic, Plus and Premier accounts
Education Grade school, high school graduates, college graduates
Occupation Professionals, managers, clericals, sales, farmers, retired
people, students an unemployed people
Social class Upper Lowers, Lower Lowers, middle class, working
class, lower uppers

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Part C: Analysis of Positioning
Positioning is the act of designing the offerings and services of organization to get
effective place in the minds of the target customers. In case of HSBC, the bank is popular as the
truly global bank having international branch network. The HSBC brand and its corporate
identity reveal what the bank wants to provide to its customers. Positioning can be described as
the structure of the company’s offerings and services to maintain strong image among the target
market (Velea & Ciobota, 2015). The aim of the organization by the positioning is to establish
the brand in the maid of the consumers to maximize potential benefit in the business. Good brand
positioning is helpful in guiding marketing strategy by clarifying the brand core. Along with this,
it is helpful in improving customers’ base for the business operations. It is important for
everyone in the organization to understand the concept of brand positioning to make essential
decisions (Boone & Kurtz, 2013).
Bank HSBC has positioned itself as the world’s local bank. For the customers, it is the
bank that targets the customers by understanding their cultural differences. Along with this,
HSBC had introduced an advertisement campaign including multiple perspectives in one subject.
Further, HSBC focuses on the advertising that reflects brand value of the bank the current
advertising of the bank includes various cultures and norms of the people in all over the world.
By the advertisement campaigns, HSBC is trying to challenge people to identify their values and
motivations in their daily lives (Pavlou & Stewart, 2015).
Recommendations
HSBC has strong position among the customers by understanding different perspective
and local cultures of the customers. There are some factors by which HSBC will be able to
maintain new brand position in the Australian market:
Brand attribute-
For HSBC Australia, the services provided by the bank should be based on brand
attributes that will make the bank different from its competitors. HSBC is the part of service
industry and in such case; the superior services and various number of services provided by the
bank in Australia should be considered as the attributes for HSBC (Fifield, 2012).
Customer expectations-

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In case of brand positioning, consumers always expect to receive the services from the
brand what are essential for them. At this level, HSBC Australia should meet the expectations of
the customers to get success in Australian market. As compared to other local and foreign banks,
HSBC should provide full customer satisfaction (Taleghani et al, 2011).
Price-
To achieve strong brand positioning, the organization should focus on the pricing strategy
for the services to achieve high level of customer base. Pricing strategy is crucial to differentiate
the services from the competitors. Banks are the financial institutions having various services for
the customers. In case of HSBC, prices of the services should be based on the amount of the
interest charged by bank on loans to the customers. The percentage of the loan interest should
not be on so high level in HSBC as compared to other local banks (Lovelock, 2011).
HSBC have various financial services i.e. treasury and financial market, trade finance,
investment advisory, electronic & mobile banking, and securities custody. HSBC has high level
of experience in the banking and financial sector as it is operating in various countries.
Currently, bank is providing services not only to the commercial customers but also providing
the services to the retail and personal banking services. By adopting provided recommendations,
HSBC will be able to prove itself as the financial institution having wide range of banking
products for the customers (Terpstra, Foley & Sarathy, 2011).

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References
Armstrong, G., & Cunningham, M. H. (2012). Principles of marketing. Australia: Pearson
publication
Bickhoff, N., Hollensen, S., & Opresnik, M., (2014). The Quintessence of Marketing: Strategic
and Operative Marketing Planning—Segmenting, Targeting, Positioning. pp. 47-11
Boone, L., & Kurtz, D. (2013). Contemporary marketing. USA: Cengage Learning
Cognizant, (2013). Divide and Prosper: Targeting Key Customer Segments to Drive Bank
Profits. Retrieved on 27th August 2017 from
https://www.cognizant.com/InsightsWhitepapers/Divide-and-Prosper-Targeting-Key-
Customer-Segments-to-Drive-Bank-Profits.pdf
Fifield, P., (2012). Marketing strategy. (2nd). Berlin: Reed educational & publishing Pvt Ltd
Ghosal, S. N. (2013). SAARJ Journal on Banking & Insurance Research : A pragmatic strategy
for banks to counter recession is to garner funds and encourage entrepreneurship focus
on reticular activity trend and not be cauldron for politicians and bureaucrats. 2(5). 24-
37.
Hakimi, H. (2014). Retail Banking Customer’s Market Segmentation Based on Psychological
Factors: Case Study in Islamic Republic of Iran: Bank Mellat. Proceedings of 9th
International Business and Social Science Research Conference
HSBC Bank. (2017). Get your banking needs fulfilled by choosing from HSBC's world class line
of products. Retrieved on 27th August 2017 from
https://www.us.hsbc.com/1/2/home/personal-banking/products
Lovelock, C., (2011). Services Marketing. (7th). India: Pearson Education
Mahfud, A. (2016). BANKING MARKET SEGMENTATION. 14(10). 6603-6614
Pavlou, P. A., & Stewart, D. W., (2015). Interactive Advertising: A New Conceptual Framework
Towards Integrating Elements of the Marketing Mix. pp. 218-222
Peck, H., Christopher, M., Clark, M., & Payne, A., (2013). Relationship Marketing. Burlington:
Linacre house, Jordon hill
Peñaloza, L., Toulouse, N., & Visconti, L. M., (2013). Marketing management: A cultural
perspective. USA: Routledge

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Taleghani, M., Biabani, S., Gilaninia, S., Rahbarinia, S. A., & Mousavian, S. J. (2011). Arabian
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Satisfaction and Relationship Marketing Benefits. 1(3). 78-86
Terpstra, V., Foley, J., & Sarathy, R. (2011). International marketing. Naper Publishing
Velea, A. & Ciobota, G., (2015). The strategic positioning of the financial banking companies –
key factor for achieving competitive advantages: Knowledge Horizons – Economics. 7(1).
pp. 103–106
Yaw, B. (2011). The effects of market segmentation on customer service in the banking industry
in ghana, the case study of barclays bank ghana limited, kumasi prempeh ii street
branch. Retrieved on 27th August 2017 from
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