Provident Finance Review PDF

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Summary

Marketing project which consists of company review of Vanquis Bank....

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The British College KATHMANDU

Coursework Submission Coversheet (individual coursework only) Faculty of Arts, Environment and Technology

LBU Student Id: 77208908

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Award name: Module code:

CM0419

Module name:

Contemporary Marketing

Module run:

Jan 2019

Coursework title:

Mid Assessment

Due Date:

12th April, 2019

Module leader: (In LBU)___________ Module tutor: (In TBC) Dipankar Sherpa TURNITIN Checked: YES

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Submission date& time:Date:

12th April, 2019 Time:5:00 pm

Total Word Count:

1720

Total Number of Pages (including this front sheet):

20

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Date: 12th April, 2019

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Executive Summary

“This report compromises the present situation of Vanquis bank which is the leading provider of credit cards to the people in the non-standard credit market, promotes financial inclusions by bringing credit cards to people helping people to establish or rebuild their credit profiles and enjoy the increasing utility of credit-based credit.” “Vanquis Bank is the only bank which provides credit card facilities even to the bad credit history customers and has recorded 1,733k customers; 3.1% increase year-on-year, 86% of Vanquis bank customers are satisfied with the service they have been provided with which catches attention to study their strategies and to evaluate their yearly activities.” Another interesting fact is that 1m customers had registered for the mobile app since it launched in June 2017. “Vanquish Bank’s ‘low and grow’ approach to extending credit and high levels of customer contact underpin a sustainable , responsible lending model which produces consistently high levels of customer satisfaction approaching 90%.” “The report is generated using various marketing tools and techniques which provide a detail analysis of the company from the perspective of marketing.”The investigation has been done on the current products and detailed customer segmentation. The marketing mix which analyses 7 components has been used to understand the position of market and the company’s marketing strategies relating to acquire it. The SWOT and TOWS analysis indicates the internal and external factors affecting the productivity of the company. After the detail analysis, future recommendation has also been given in reference to the TOWS related strategies. “Moreover, the report highlights the analysis and critiques of the entire operating of the company and provides recommendations, suggestions for future growth, development and success of the company.”

Table of contents Contents Introduction:............................................................................................................................................4 1.1 Rationale............................................................................................................................................5 2.0

Critique/ Evaluation of current products and services:....................................................................5

2.1.

Products...........................................................................................................................................5

2.2. Current segment of customers:........................................................................................................5 2.2.1 Demographic Segmentation:......................................................................................................5 2.2.2. Behavioral Segmentation:..........................................................................................................5 2.3. BCG Matrix........................................................................................................................................6 3. Evaluate the key concepts of marketing mix............................................................................................7 4. Analysis with relative theories.................................................................................................................9 4.1 Marketing Concept............................................................................................................................9 4.2 Maslow Theory..................................................................................................................................9 4.3 Positioning Map...............................................................................................................................10 4.4 Materiality Matrix............................................................................................................................11 5. Recommendation..................................................................................................................................11 6. Critique of tools and techniques............................................................................................................12 6.1 Porter’s five force model..................................................................................................................12 6.2 SWOT analysis..................................................................................................................................12 6.3 TOWS analysis..................................................................................................................................13 6.4 PESTLE analysis................................................................................................................................13 7. Conclusion.............................................................................................................................................15 8. References.............................................................................................................................................16 8. Appendices............................................................................................................................................17 SWOT Analysis.......................................................................................................................................17 TOWS Analysis.......................................................................................................................................18 PESTLE Analysis:.....................................................................................................................................19 Porter’s Five Forces................................................................................................................................20

Introduction: “Provident Financial PLC is a financial services provider group which has a history dating back to

1880, founded by Joshua Kelley Waddilove. The company operates through two divisions namely, Consumer Credit and Vanquis Bank and operates its business across the UK, Republic of Ireland and Central Europe through its subsidiaries and headquartered in Bradford, the UK. The following shows us a picture of the brand which is in under Provident Financial PLC.

1.1 Rationale The report mainly focuses on Vanquis bank, which is one of the greatest brands of Provident Financial Group (PFG). “Vanquis Bank which started in 2003 is the leading provider of credit cards to people in the nonstandard credit market, provides credit cards to people who are typically declined by mainstream credit card providers.” “Vanquis Bank’s ‘low and grow’ approach to extending credit and high level of customer contact support a sustainable which produces consistently high levels of customer satisfaction approach by 90% and due to this results it is worthy of a study.”

2.0 2.1.

Critique/ Evaluation of current products and services: Products

“Vanquis Bank offer two main credit building cards, the Vanquis Card, which has a

representative APR varying from 39.9% to 59.9% depending on the credit circumstances of the applicant, and the Aquis card, which has a representative APR of 29.8%, both are licensed under VISA.”

2.2. Current segment of customers: 2.2.1 Demographic Segmentation: “Vanquis Bank has 1.8m customers which come from all across the UK and Ireland, typically having low to average incomes, generated from a range of types of employment and state support facilities, products are suitable as per different income levels of the people and their credit history.” It offers a wide range of products that are not well served by the mainstream credit providers by other banks (Vanquis). Below is the diagram which shows the fluctuation of credit issues due to various reasons.

2.2.2. Behavioral Segmentation: “The customers’ circumstances and needs tend to be more varied and change more over time as a result of: (1) Unpredictable life evens; (2) the unexpected expenses of everyday life; (3) being new to credit; and (4) their own product and service preferences.” “The customers tend to have different needs and expectations and different levels of access to products through their more varied credit journeys.”

2.3. BCG Matrix BCG Matrix is used to analyze the product portfolio, profitable and unprofitable product of Vanquish Bank. The figure which is presented shows the BCG Matrix of Vanquis Bank.

 Stars Credit Cards and Retail credit accounts are the star of Vanquis Bank. For the fourth year running (2018) Vanquis bank has won the Money facts Consumer Award for Credit Builder Card Provider of the Year. Along with this, it was also winner of the Savings Champion Awards- Best Long Term Fixed Rate Bond Provider in the year 2018 (www.vanquis.co.uk/about/our-awards).  Question Mark There are fears that the borrowers have slipped back into the bad habits from the days of easy credit. Vanquish Bank provides a broad range of credit cards to help customers choose a card that is right for their need by offering higher interest rates than its competitors.  Cash Cow Products which Vanquis bank offers has high market share by providing credit card services with competitively higher interest rates to the people who have been declined by other credit card service providers.  Dog Vanquis Bank provides wide range of products and provides them mainly over the internet and through direct mail. For those who do not use the internet or for whom the

company does not have an address the bank lacks the advantage to cover the overall market areas.

3. Evaluate the key concepts of marketing mix



Vanquis Card



Regular engagement



Aquis Card



Targeting middle and lower economy class people



Higher interest rates than competitors.



Low pricing



Price Skimming



Head office in London



Online marketing



Mainly through Online



Customers all over from the UK and Ireland. Personalized services according to



Digital marketing



Vanquis bank mobile app.



Door to Door sales



Client database of other



partnered brands. In-house training and nurturing



Money barn. Motivate teams

talents.



Reinforcing behavior, cultures, and





the credibility. 

Company’s other brands such as

values

Customer priority oriented and timely services

Through linking up with Parent



Invest in leadership, core capabilities, and talents





Customer’s risk profile and

 

Build a sustainable future “The credit line is evaluated at the

affordability

point of application during the

Historic payment patterns

agreement.” 

“The payment patterns are used to access the applicant’s potential default risk.”



Proper banking infrastructures



Expansion in order to cover wide market range.



Ensuring well-managed bank’s branches.

4. Analysis with relative theories 4.1 Marketing Concept “Vanquis Bank has over 14 years of experience in lending responsibly to its chosen target market. Its success is based on a clearly defined strategy and a tailored approach to serve customers in the non- standard credit market.” “Extending the product range to displace the existing lender is a logical extension of Vanquis Bank’s credit card offering and represents an attractive opportunity from which to build from an unsecured loans business.”

4.2 Maslow Theory

Vanquis Bank targets its customers by their needs according to the Maslow Hierarchy need of change of the buying behavior. Relating to the theory, Vanquis Bank has been targeting its customers who are in high Physiological needs, Safety needs which are basic needs and are very important for day to day expenses. The majority of customers have a bad credit history and have been declined the credit card facility by other banks. Due to this, Vanquis Bank targets and fulfils the Psychological and as well as Self- fulfillments needs.

4.3 Positioning Map

With respect to the positioning mapping, it is obvious that Aqua Classic and Ocean Finance credit card has situated its item as a high preference for quality and price, Barclays Forward credit card in higher quality with a lower price and finally Marble Credit Card at low quality with a low price.

4.4 Materiality Matrix

Vanquis Bank moreover locks in with their partners to guarantee that it oversees and report on the customer relation issues that matter most to them. The Materiality Matrix was referred to the data of 2017. The bank embraces materiality that is fabric to Provident Financial. The above chart helps to make out a difference to illuminate the reasons and customer relation technique.

5. Recommendation To maximize the advantages of SWOT elements, Vanquis Bank should intensify showcasing procedures to pull in unused customers by providing competitive interest rates and moreover utilize social media and regularly update its mobile banking app. Similarly, to oversee dangers they should capitalize their dissemination channel to anticipate credibility and lending systems. Moreover, to overcome shortcomings, Vanquis Bank can capitalize openings or overcome risk arising in future.

Vanquis Bank can plan business expansion and open up its branches where there has not been able to reach as it has high recognition being awarded with Credit Provider of the year 2018 and has aggressive growth rate for past few years. It can also improve through providing credit to certain economy class people which has majority market with its awarded titles. It can also plan strategies such as product mapping to reduce mismatch between assets and liabilities.

6. Critique of tools and techniques 6.1 Porter’s five force model In spite of the fact that Porter’s competitive advantage was invited by administration researchers and it is still thought in commerce that there are moreover those who forced certain evaluates on his work in financial company. In his article Barney states that fetched and separation cannot be taken as pioneers towards competitiveness allowed (Barney, 1991). In her book McGrath states that the term of inventive economy where “companies are getting way better encounters, and at wresting unused efficiencies from existing assets” (McGrath, 2013). “According to her, sustainable competitiveness is not just effective, it is rather counterproductive”. “Furthermore thinking about competition within a finance industry such as Vanquis Bank as the significant threat, is very dangerous perception according to McGrath since there is no pure inside industry competition any more, now business models compete with each other, industries and product lines as well (Denning, 2010).” “Klein argues that the way Porter explained road towards competitive advantage was quite prescriptive. He furthermore questions the applicability of the latter, since a research in a financial sector found that model was difficult to follow (Klein, 2001).” “Klein discredits Porter on the basis of duplication as well, claiming that on more than 500 pages he repeats the term competitive advantage without properly explaining what it really is, besides that a firm must have it.””

6.2 SWOT analysis The main benefit of conducting a SWOT investigation is that it has small or no taken toll which means anybody who gets it can perform a SWOT examination. There is much utilization of SWOT investigation after less time to address a complex circumstance. This implies merely can take steps towards moving forward without the cost of an outside expert or consultant. When conducting a SWOT analysis, things should be kept in mind that it is only one stage of the business planning process. “For complex issues in financial companies such as Vanquis Bank, proper conduct of in-depth research and analysis to make decision is required.”

“SWOT Analysis only covers issues related to strength, weakness, opportunity or threat. Due to this reason, it is difficult to address uncertain or two-sided factors, such as factors that could either be strengths or a weakness or both, with a SWOT analysis."

6.3 TOWS analysis “The TOWS analysis is a variant of the SWOT analysis, an analytical tool used for examining

the external and internal situation of an organization, product or service or an individual.”“TOWS analysis involves identifying and defining the SWOT, as well as formulating specifics strategies around these four general elements.” “In any case, this explanatory device requires looking at to begin with outside circumstances, particularly the dangers and openings, some time recently analyzing inside circumstances by distinguishing shortcomings and qualities.”TOWS are fair in reverse approach to SWOT. “It is worth emphasizing that a TOWS examination puts emphasis on the outside environment whereas a SWOT centers on the inside environment.” “For a few strategists and organizers, analyzing dangers and openings to begin with can be more profitable particularly on the off chance that qualities and shortcomings are as of now predefined during past analysis.”

6.4 PESTLE analysis “A PESTLE analysis is broadly utilized and carried out by corporate firms and business to think about and understand the environment and market in which they operate.” “A PESTLE analysis offers firm a chance to evaluate their performance and improve it by analyzing external factors that influence them in the long run.” “Though a ...