Marketing Strategies of Hsbc

HSBC is known as the largest banking and financial service organization in the world. HSBC is known as world’s local bank. It was founded in 1865 as the Hong Kong and Shanghai Corporation Limited. It consist of four global business i.e. retail banking and wealth management, commercial banking, global banking & market, and global private banking. The organization serves more than 45 million customers by these businesses. Network of the organization covers 71 countries including Asia, Europe, Africa, and North America & Latin America. As the international bank, it values the diversity of the market in which it operates (HSBC Group, 2016).

In Australia, HSBC started operating in 1986 as a finance company. Now it is a brand name in Australian banking industry. In Australia, HSBC bank has established itself as the leading bank with wide range of banking services and products related to retail, commercial and institutional sectors (Bickhoff, Hollensen  & Opresnik, 2014). HSBC has 25 branches with other channels in Australia and now it is planning to expand its branches to 100 from 25. For this, a perfect and planned marketing strategy will be required with a focus on banking products which can be offered to Australian market (Armstrong & Cunningham, 2012).

HSBC provide a wide range of financial services to its customers:

• Personal Financial services: There are around 100 million customers of personal financial services. The bank provides wide range of personal financial service including savings accounts, loans, mortgages, credit cards, pension, insurance and investment services.
• Consumer Finance: In consumer finance, bank provides sales credit to customers lends money and provides those services which fulfill the financial needs of customers.
• Commercial Banking: The bank also provides services to small and medium enterprises. Bank has 2 million customers of sole proprietors, clubs, companies, associations, and partnership.

Along with this, HSBC has also some financial services such as trade finance, treasury and financial market, electronic banking, investment advisory, securities custody, and mobile banking etc (HSBC Bank, 2016).

As an organization, HSBC has a wide area of experience in banking sector from different countries. It is one of the largest global level banks and has its presence in almost every important and economically established country (Ghosal, 2013). HSBC has spread its services in commercial banking segment including personal banking service from financial firm. Today it is providing services not only commercial customers but also focusing on retail and personal banking customers. It has proved itself as organization of wide range products in Australia and others parts of world also. In Australia, it is known as foreign-owned bank (Chikandiwa, Contogiannis & Jembere, 2013).

Segmentation, Targeting and Positioning of HSBC:

Market segment refers to the group of consumers who have different set of requirements and needs. Market segments include accessibility, measurability, large size and profitability to create a specific segment (Wedel & Kamakura, 2000). HSBC is famous commercial bank in Australia. It needs to understand that there are various segments which be created so, HSBC needs to identify competency and according to that it should create segments. In retail banking sector, there are very scope. There is a large population of Australia which comes under the age of 18 to 35. HSBC is demographic segmentation by covering the age group of 18-35 for retail banking sectors. This group is basically the group of those people who are in college, profession or business and love spending money. It means there is a wide scope for HSBC to expand personal banking (Fifield, 2012).

Target market refers to attracting the customers from different market. Target market is most important of marketing in which the research on consumer’s hobbies, tastes, interests and needs is done. Basically target market is the market where any company wants to sell its product and services including set of customers who are targeted. Target market is very essential part for a company’s marketing strategy.  HSBC mainly targets large enterprise and rich individual investors who are seeking financial help and advice (Lovelock, 2011). 

Positioning is also a crucial part for determining the success or failure of the company. HSBC has establishes itself as a successful brand among the customers. Compared to domestic banks, HSBC should position itself as a global bank in Australia. For this, HSBC should position itself as a highly successful bank. It should innovative banking products to attract its target customers and position itself as a local as well as global bank in Australia (Terpstra, Foley & Sarathy, 2011).

Macro & Micro Environment of HSBC:

Macro Environment:

Macro environment refers to those external factors that cannot be controlled by the organization. These factors affect organization’s performance and strategies and influence its decision making. These factors consist of global, economic, demographics, legal/political, socio cultural, technologies changes and natural forces. It also consists of some major internal and controllable factors such as industry environment and competitor’s environments that affects organization’s decision making (Turnbull & Valla, 2013). There are two type of macro environment. Those are:

1. External environment,
2. Internal environment 

External Environment:

A company’s external environment consist of all those factors and influences from outside of the company. Relevant means those important factors which have impact on company’s directions, objectives, business model, & strategy (Penaloza, Toulouse, & Visconti, 2013 External Environments consists sex segments and they are:

1. Global Segment:

• Political events,
• Global markets, &
• Overseas financial markets

1. Demographic:

• Age of population,
• Ethnic mix, &
• Geographic dispersion

1. Economic:

• Rate of inflation,
• Rate of interest, &
• Currency exchange rates

1. Political forces:

• Taxation law,
• Deregulations,
• Trade practices,
• Employment, &
• Government policy

1. Technological:

• Diversity in work force,
• High disposable incomes, &
• “Time poor” professionals  

       Figure 1: Macro environment

 (Source: Peck, 2013)

Political Aspects:

HSBC has different policies and regulations for protection formulated by different governments in different countries where it is operating. The company follows the policies given by each government to make sure that company is able to operate business effectively and successfully. Along with this, company also formulates its own protection strategies against any governmental limitations and restrictions (Peck et al, 2013).

Economic Aspects:

HSBC is the world’s largest and competitive industry in banking and finance sector so it has a stable and successful economic stability. Although there are many dangers in the different parts of world, the HSBC seeks itself that it would be able to struggle to have a better economic condition (Chakravarthy & Coughlan, 2011).

Social Aspect:

HSBC is being affected by the situation of the society where it is operating. HSBC always tries harder to give equal chances to take advantage of resources to the society. Company tries to maintain good relations and reputation among the society where it is operating (Boone & Kurtz, 2013).

Technological Aspects:

HSBC has adopted different technologies such as IT/IS systems and internet so that it may be able to reach its customers all over the world and to know the latest trends in the business along with this. Apart from this, it also uses such facilities which help it to improve productions and operations (Gilligan & Hird, 2012).

Internal Environment:

Internal environment refers to factors inside the company and this can be controlled by the organization itself. There are two parts of internal environment i.e. Industry environment, competitor environment.

1. Industry environment: It refers to a group of products and services producing by organizations where close substitutes are available. HSBC is famous for its service quality and unique products among the customers. It has one of unique feature in its service that customer can get information of real-time account by using it anytime and anywhere. It also has some unique banking services such as HSBC net, business banking etc.
2. Competitor environment: It refers to the collected information about the competitor’s strength, intelligence, capabilities and weakness etc by the organizations. HSBC has already created a brand image among the customer’s mind and this make it different from other competitors (Brumfitt, 2001). It is popular bank in all over the world. So, customers have a trust on its name and brand. When HSBC delivers same service as its competitors but in a better quality, it creates a quality advantage. Although, HSBC has specific number of branches compare to its competitors, it always provides quality service to the customers.

Micro Environment of HSBC:

The world is getting so much competitive and diversified. Micro environment is an important factor that plays a crucial role on the ability of business in making profit and fulfilling the customer’s need. These factors are:

• Competitors: Competitors are the people who make the business environment active and identify new ideas of doing business. They always create a good competitive environment and maintain a cooperative situation of business. HSBC always faces challenges with its competitors. It faces threats from small banks also like NatWest, Halifax etc in current accounts services (Uweguro, 2014).
• Public: It refers to the community of people the company seeks on the success in the market. HSBC rely its success on the public. They may be connected directly or indirectly with the company. Public includes employees, media, customers, partners, and investors. HSBC is trying to offer what is appropriate for them (HSBC team katch, 2014).
• Customers: HSBC offers a wide range of services to its existing customers. It never offers any new deal to confuse them. It also offers huge range of bank accounts so that they can enjoy all the services and products. It has higher customer satisfaction rate compared to its customers.

Consumer’s Perception and Behavior:

Consumer perception plays an important role in the success or failure of any particular brand, product or company.  It enables organization to understand that the market strategy which is adopted by the organization is beneficial for the consumers (Martínez, 2012). In case of HSBC, it has setup its business as a foreign bank in Australia. In a survey, it is observed that more of the people will prefer domestic banks for banking compared to foreign banks. Reason is brand perception about the bank. In case of HSBC, it is perceived that HSBC is good for commercial and financial banking aspect. This perception can be in the mind of Australian consumers because HSBC started its business as a financial organization in Australia (Taleghani et al, 2011).

About customer behavior, customers give preference to those banks which are easily accessible. In case of HSBC, domestic banks of Australia are easily accessible compared to HSBC because the branches of HSBC are in commercial locations. This is the main reason that personal banking of HSBC is not so much successful among the customers of Australia (Karimi, 2013).

Marketing Mix of HSBC:

Marketing mix refers to the marketing tools which are used for marketing purpose by the organizations. Marketing is consisting of 7Ps: Price, Place, Promotion, Product, Process, People, and Physical environment (Baker, 2003).

• Price: Price is an important factor which decides the future of any particular product or service. In the case of HSBC, it is targeting customer for personal banking so it should focus on competitive rate with attractive interest rates so that it can attract more and more customers. Targeting the customers, move in pricing will enable the company to gain more customers.
• Place: The place refers to selecting the appropriate channel and methods to deliver the product and service. In HSBC, it is targeting the general public. For targeting these customers, it has strong channel such as internet, smart phones, laptop etc. For target customers, it should include every possible technology to provide the services which it offers in its physical branches. It should reduce its operational cost ((Pavlou & Stewart, 2011).
• Promotion: It is important for HSBC that it should include new innovation for the promotion. HSBC can use social media such as facebook, twitter etc to connect the customers. It should send promotional e-mails, tweets and should focus on engaging customers with the brand.
• People: HSBC should focus on delivering best customer services to its customers. If customer service is not good, consumer will choose another brand. HSBC should hire local candidates for personal banking operations.
• Process: It is a known fact that if there is any complex process in operations, consumer get confused. In this regard, HSBC should make easy process for its customers. Easy process will be convenient for the consumers.
• Product: HSBC should focus on existing products such as credit cards, investment plans, personal banking etc. It should make innovation in these products with different schemes rather than issuing lots of new products.
• Physical environment: HSBC should focus on establishing its branches near residential areas. In present time, HSBC is concentrating in the business region of Australia. To target for personal banking customers it should focus on expanding branches in different areas.

Recommendation:

HSBC is already a brand name in all over the country. Here are some recommendations for HSBC which should be focused:

• Based on the above market strategy, it is analyzed that HSBC has achieved major success in Australian banking sector but still it is far away from the personal banking sector so, there will be a lots of work is needed to expand in that market.
• HSBC should focus on high level customer satisfaction service. It can also provide some special service and facilities with basic services to retain customers.
• HSBC is famous for innovating and introducing new technologies for banking product and services. It should also focus on providing quality based service to its customers.
• To gain more competitive advantage, it should focus on the prices of its products such as lowering the interest rates on services, improving features etc.

Ultimately, HSBC Bank needs to seamlessly integrate its products, customer services and overall business and pricing strategy in such a way that it should be highly convenient and beneficial for the end customer. 

Conclusion:

Hence, from the above discussions it can be said that HSBC is a brand name in the banking and financial service industry. There is no doubt that HSBC has a simple and slow expansion strategy in Australia. There is the main reason of the strategy to provide quality service to its consumers.  Despite of all the facts, it has been analyzed that HSBC is developing gradually and eventually. The overall strategy to target new customers is improving and also growing day by day. So, it can be understand that the presence of HSBC in Australia will be for long term and it will serve the Australian people more effectively.

References: 

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