Overview of HSBC Holding PLC: Segmentation, Positioning, Targeting, and Micro and Macro Market Forces

Segmentation of HSBC credit card

Write essay on HSBC holding plc.
 

HSBC holding plc is a multinational company which was established in Britain and is headquartered in London. Today, it holds the forth position in the world’s largest banks in terms of the assets. The total assets was supposed to be US $2.67 trillion. It was first established in London by the Hong Kong and Shanghai Corporation Limited as a new holding company. The HSBC group was first found in India in October 1853. It started with an initial capital of 5 million INR. The HSBC group is expanded though more than 8 thousand offices in more than 87 countries and are serving more than 100 million customers worldwide (Naresh, 2013). These offices are spread in Europe, Asia-Pacific region, Middle East, Africa and America. They accumulated a total assets of 2.4 billion till June 30 2010. It is considered as one of the biggest financial banking corporation around the globe. They also marketed themselves as the world’s local bank across all nations. The HSBC business has based out their operation on 5 main pillars known as their 5 core principles of business: efficient and effective operations, strong liquidity and strong capacity, tightened expense discipline and easy lending policies (Sarwade, 2012).

Segmentation of HSBC credit card:

HSBC follows the strategy of isolating the different segments in the market and then take the approach of segmented marketing. They have their own way of segmenting the market and that is based on creditability (Hyyppa, 2013). They push different types of credit card to different segments in the market on the basis of clustered preference of these segments.

They also follow segmentation on the basis of geographical locations like based on states, cities, different regions etc. Their main agenda is always target both the urban and sub-urban market requirements. As the families in the modern culture are setup in such a way that both the parents in a family are working and the disposable income of families have gone up (Sheth, 2012). So keeping this in mind, HSBC has divided the market on the basis of the disposable income of the individuals, their social needs and their occupation.

Further, people who fall in the same segment based in above classification may also vary on the basis of the psychological profiles depending on different personality and lifestyle. For this scenario, HSBC has collaborated with Westside and launched cobranded card that is considered as a prestigious card to hold (Chłopek, 2013).

Targeting of HSBC credit card

HSBC also segment t market based on some other attributes/demographics of customers like customers’ attitude, usage, knowledge and feedback of the product.

HSBC targets its customers from Personal Banking, investments, assets based on the credibility of the customers. HSBC mostly targets on the existing customers to offer them better discounts and prospects to spend more on their credit card instead of always searching for new customers. They always work on bringing new rebates, discounts to their existing customers so that they can amplify their revenues from the existing customer base (Mohanasundaram, 2012). HSBC also offers new cards to the customers but from the viewpoint that the expense of non-performing assets will be minimum. Their main focus to clear out the credit card portfolio and maintain the growth rate on a continuous basis (Wang, 2012).

Another major area where the company focuses is to upgrade the existing credit cards based on different income slabs of the customers. There are no prior eligibility of the customers of HSBC to get HSBC Premier credit card. The customers can have their card upgraded to premier card based on their card performance. HSBC covers the customers from all age groups by targeting the Westside store customers. As and when the urbanization is increasing, customer density is also increasing and hence HSBC is able to cater to the customers with maximum utilization of resources with minimum no of outlets (Jackson, 2016). HSBC are focusing on those customers here who are having a moderate salary as the products here are moderately priced. HSBC are focusing on the customers who are shopaholic in nature as they are most potential customers for HSBC to buy their credit cards. They are doing this by collaborating with Westside. 

HSBC plan to position their products to the customers as the one with better offers. They offer products as cheaper and new products as compared to its competitors. They differentiate their products from others by providing different lucrative offers (YANG, 2013). They follow customer- benefit approach as a targeting strategy. They differentiate themselves from others by providing features like fuel discounts, annual free gifts, airlines miles rewards, etc. They also offer superior and privileged savings for better shopping experience to its loyal customers. The credit offered by the HSBC is also globally accepted in more than 18 million outlets in the world. It has an access to more than 700 thousand ATM all round the clock. It also provides secured online payment option which is password protected and that too free of charge. Above all, they also provide no cost liability of the card when it is lost (Dibb, 2014).

Positioning of HSBC credit card

Micro environment factors:

There are a lot of microeconomic factors which affect the HSBC Company which includes stakeholders, suppliers, customers, etc.

Stakeholders: These are the people who have the highest priority in making any decision of the company so that their interest are covered in the decision making. There are many stakeholders of the company which includes government, local public, media people, internal people like employees, citizens, etc. These are the people who are directly involved in the decision making of the company and are the ones who are to be taken care of by the company (Manappa, 2012).

Suppliers: Suppliers is one of the most important section of the self to cash cycle. They are the one from where the whole delivery cycle starts. It is very important for any company to maintain a strong bind with their suppliers as they are the ones who enable a company to be successful by providing all the supplies to the company. This is one segment which ones on relationships. HSBC does the same thing which is expected i.e. they maintain a very strong relationship with their suppliers (Sherman, 2015).

Customers: We know that the customers are the centers for any business to run. HSBC takes utmost care of its customers and divide the customer market into 5 main markets: business clients, customers, government, reseller market and international clients. HSBC works hard to maintain their international relationship strong with their client for profits in the long run (Shafaat, 2012).

Competitors: These are the ones who are responsible for making the business environment dynamic and inspire companies to come up something unique which is not available with others and which provides a differential factor to them.

Market intermediaries: There are many third parties with whom HSBC partner for their promotion, distribution and selling processes. They also form a very important partner in the success of HSBC and have to be dealt with care (Järvinen, 2012). 

External Climate: In the year 1998, a major branding of the company was done when a global brand was introduced for HSBC along with its symbol in the hexagonal share. This symbol is known all over the world denoting HSBC. The company is not planning to make its brand universally synonymous spreading its core values of trust, integrity and excellent customer services (Deodhar, 2016).

Economic factors: there are many economic factors which affect the products and services offered to the customers based on their preferences and expectation. This is achieved by partnering with a lot of companies which help them to attain what is required by the customers (Matatko, 2015).

Micro environment factors

Political and legal factors: As we know that HSBC is operating in many countries which have different political and legal scenarios and it is important for the company to deal with each of them separately. The team of HSBC ensures the products and services offered by the company are accepted globally irrespective of region, culture, and they also make sure that they have skills and expertise to deliver globally. They have to deal with the global political and legal scenarios in an effective way (Babu, 2014).

Cultural factors:

HSBC makes sure that they provide solution to the people in all aspects ranging from global cash flow coordination to improved security, minimized costs, better operating expenses, better returns. This culture which is followed by HSBC makes the customers of HSBC happy and satisfied customers (Gurnani, 2014).

Resources: The resources used by HSBC are the face of the company. The brand name of the company holds a lot of value in the eyes of the customers. The flag which was developed to denote the company logo was derived from the HSBC’s traditional flag.

Technology: The technology used by the company have been based on achieving High productivity, forming a unique organization. They build their core values based on integrity, trust and excellent customer services (Lee, 2014).

Customers’ perception and customer satisfaction can be measured by how much the products and services offered by the company meets the customer expectations. It is considered to be one of the most important KPIs of the company and is considered to be one of the most important part of the company’s nosiness strategy (Kumar, 2013).

HSBC has been successful in retaining their existing customers and have always succeeded in increasing their customer base every year. This is a clear indication that the perception of the company among its customers is good. Although customer satisfaction is one topic which is ambiguous and it is difficult to understand the customers totally. The perception of the company can be measured by physical and psychological variables which measures the satisfaction level of the customers. It is of course a psychological state to be satisfied and it is attained when the customer gets everything which is expected by them and if they get something extra, then that becomes the ‘wow’ factor for them (McCord, 2014).

Various factors which will help to understand the customer perception and behaviors about the company are:

• Tangible factors: this will include physical facilities that are provided to the customers. All this include the tangible benefits which are offered to the customers which can be measured, valued, etc.
• Reliability: This is a trust which is being developed by the company by providing services to them on time so that the customers become dependable on the company and its offerings (Elaydi, 2013).
• Responsiveness: This is something where the company has to reply immediately to the expectation of the customers.
• Assurance: This is one factor which includes credibility, courtesy, security, accuracy in the work done by the company (Júnior, 2013).
• Empathy: These include communication, credibility, and security to the customers to have the right perspective to the customers.

Macroeconomic environment factors of HSBC

All these observations say that the customers of the company have a positive perception about the company and they believe in the core values of the company. They have trust on the company and they are delighted with the services provide by the company. One live example of these factors is even though the price of the credit cards of the company is too high as compared to other companies but still the customers are ready to be associated with HSBC as they have a good brand name (MAMUN, 2014). 

Product: The bank offers credit card to its customers with various offers and benefits. The main advantage of the credit card offered by the company is 52 days credit card period for the payment of the credit card dues. They also provide their customers the facility of cash advance within some credit limit.

There are different credit card that are being offered by the company to the customers which include: HSBC classic credit card, HSBC platinum credit card, HSBC gold credit card, HSBC Westside cobranded classic credit card, HSBC Westside cobranded Gold credit card (Escrig, 2014). The HSBC credit card also provides the customers the facility to transfer the balance which help them to transfer other dues for payment at lower interest rates. They also provide the facility to provide Loan on phones. They also have collaborated with CPP Assistance Service Pvt. Ltd. To allow services to the customers in case the card is lost, stolen, or any other frauds, etc.

Price: The price of the HSBC credit card is high as compared to the other credit cards available in the market. Still, the customers choose to take the credit cards of the HSBC Company as they have a good brand name and have built trust among their customers. HSBC also charges some annual fees for the credit cards they offer and they also charge some joining fee for some of their credit cards.

Place: The Company has a presence in many countries. They provide a lot of services to its customers which help them to avail those services while they travel abroad as well. They have a marketing advantage over others as they have enormous international presence. The customers of the company are given the facility to approach any of the branches of the company in any location to avail different services offered to its customers. They have developed a very strong distribution channel for their products and services so that they can reach out to their customers easily. Furthermore, their collaboration with the Westside has helped the company to grow enormously and to reach out to more people using the customer base of the Westside.

Promotion: HSBC believes in forming a strong promotion of the company so that company can develop a good brand image and can use direct marketing strategies. There are many promotion strategies that can be used for reaching out to the customers like emails, brochures, advertising, cobranding, hoardings, etc. The sole aim of the company is to create a positive image among the customers. The Westside association helped the company in a lot of ways to reach out to the perspective customers. They also provide a lot of offers, coupons, deals and discounts to the customers so that they get attracted in buying and using more of the HSBC credit cards. They also introduce various cash back schemes while booking air tickets, buying expensive electronic items, booking holiday packages, etc. For example it has partnered with MakeMyTrip and are providing 5% to 10% discounts to the customers while using HSBC credit card to book flights in MakeMyTrip.

The main aim of the company is to provide different products to the customers so that the horizons of the company can rise and the communication system of the company become robust. They also offer their customers cards which asks for pin code while swiping them at different merchant stores which ensure total security to the customers in cases of lost and theft. These products are for those customers who focus more on the security of the credit cards. 

There are several recommendation which can be given to HSBC to improve their current operations and to excel more. Some of them are like the company has to follow a wait and react approach where they need to observes other businesses as how they are implementing their strategies and what offers they are providing to the customers and according the strategies of the companies should be finalized. They have to analyze their different teams and their operations like the combined risk which the company is taking while implementing any strategy, valuation of the solutions recommended, economics of the operational processes and the Human Resource Teams. For the banking companies it is always recommended to have a backup plan ready for the crisis situation or the scenarios where there is recession and the customers become more skeptical about investment or buying credit cards. They always have to reevaluate the assets they have and to execute portfolio reevaluation so that the risk is always divided among all. In the last decade the company has backed a lot of awards based on the company’s effective and efficient business strategies. But at the same time the competition is increasing so the competitive advantage of any company does not last for long. So HSBC has to always involve new technologies to offer best solutions to its customers. They have to always provide diverse values clubbed into their strategies and create unique position in the market who have no fear from its competitors. They have to capture more market share and lead their way to unbeatable company. 

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