Charles Schwab Case Assignment PDF

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Charles Schwab Case Study...

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MAR 455: Charles Schwab Case 1. What are the strengths and weaknesses of the campaign? Strengths:  Went back to Chuck’s original roots and reflected how he marketed the company earlier in his career.  Personality behind the company with TTC  Targeted “mass affluent” – 35 to 54 year old’s with $50,000 to $2 mil in investable assets. o Confident, financially concerned investors. o 8% of the US population and 20% of US investors  When testing strengths were: o Advertising in a unique way  ex: Coffee sleeves, ads in elevators, etc.  Consumers rated Schwab more favorably in the test markets as the campaign progressed. o In exhibit 9a & 9b shows the increase in brand awareness, momentum, valuable etc.  5% of reduction in attrition in the six months between April & September 2005.  Call center customer contacts and field sales activities both increased.  Main goal of increasing new accounts and net new assets were met: o Net new assets: Increased by 6 bill in Sept. 2005 (10%) o Net new assets for the 3rd Q: 80% higher than those for the third quart of 2004  Yearly goals exceeded: 6% increase in revenues, 153% increase in net income Weaknesses:  Expensive to even test: o Budget weight of advertising tested was equivalent to a $100 mill national campaign  Field sales representatives were less than enthusiastic about the new campaign. 2. Evaluate the test market results. Would you invest more money in the campaign? If not, what more would you need to know to persuade you to do so? After evaluating the test market results, I would strongly support a budget increase for the marketing team due to the success of the TTC campaign, in both a revenue standpoint, along with the improvement of brand perception. After launching the TTC campaign, Charles Schwab’s consumer reach increased, along with net new assets increasing $6 billion in just a month. In Quarter 3 alone, net new assets were 80% higher than those for the third quarter in 2004. The company also experienced a 6% increase in revenue and 153% increase in net income by the end of 2004. With the industry competition rising and momentum being a key indicator of growth within the industry, allocating $200 million to strengthening the already successful marketing approach would be a smart decision. The increase in budget would be offset by the projected revenue and asset increase, along with new customer acquisition which was a major goal for the company. The advertising campaign would be sensitive to yearly trends, by concentrating ads to air during Jan-April or Sept.-November due to the high amount of investment activity and new account openings. Looking back, the previous investment of increasing the original budget from $160 to $195 million paid off, and with the success of the TTC campaign a new allocation of $200 million would be beneficial. The new capital could be used to improve the strategy, fix deficiencies, and gain additional feedback to generate higher returns for the company in the future....