1.

Executive Summary

 This report provides the details of the new HSBC current account package.
 A marketing plan devised from the 7Ps is outlined below to provide a practical and
feasible way to implement the new current account package.
 Numerical targets and qualitative targets are stated clearly as objectives.
 Further details on the research required during the pre and post-implementation stage is
discussed in detail.
 The budget and the timing of the launch of the new current account package is elaborated
using a simple budget statement and Gantt chart.

2. Objectives

 This marketing plan aims to define the means of notching up HSBC’s current account
market share by 1.5% (960,000 current accounts) from HSBC’s current market share of
8.9%.
 The new HSBC prepaid card that would be introduced will increase the profitability of
current accounts by encouraging customers to save, hence making more funds available
for further lending by the bank.
 The new current account package also aims at rebuilding consumer confidence towards
HSBC by portraying the bank as a responsible and socially conscious financial
institution.
 The new current account package also aims and building up HSBC’s corporate image and
branding theme of being global bank with local knowledge by introducing new products
that are in line with the current economic downturn.

(See appendix 2)

3. Marketing Strategy

HSBC should implement the market penetration and product development strategy by capturing
current account market share from other financial institutions that have been weaken from the
economic crisis. Besides that, the launch of the new prepaid card would be a step towards
product development that would be useful to counter non-traditional financial institutions that are
poise to enter the current account market.

The market development strategy can also be carried out at a later date by bringing the new and
tested prepaid card product into other geographical markets like China and India. This would be
in line with HSBC’s slogan of being the ‘World’s Local Bank’ and would also take advantage of
HSBC’s global network in more than 79 countries.[1] In relation to the Porter Generic model,
HSBC should aim at using a broad based differentiation strategy to capture market share from
ailing financial institutions.

(See appendix 1)

4. Target Market
4.1. Market Segmentation and Targeting

A market segment should consists of a group of customers who share a similar set of needs and
wants (Kotler. Etal, 2009).[2] A market segment must be accessible, measurable, large enough
and profitable in order to be worth targeted by an institution. The new prepaid card should be
offered as a ‘naked solution’ that all segment members value (Anderson & Narus, 1995).[3]
Ways of segmenting the market should include geographical and demographic segmentation.

The new HSBC prepaid card should be launched in the United Kingdom first before being
extended into other geographical regions. A time lag of half a year would be enough to test the
effectiveness of the product as a method to obtain a higher market share for current accounts.
Demographic segmentation on the other hand should be focussed on age and income. Special
attention should be focussed on young individuals opening their first current accounts and high
net worth customers.

4.2. Market Positioning

Positioning is the act of designing the company’s offering and image to occupy a distinctive
place in the minds of the target market (Ries & Trout, 2000).[4] Data taken from SWOT and
PESTEL analysis of HSBC enables marketers to define the points-of-difference and points-of-
parity associations. Points-of-difference are attributes or benefits consumers strongly associate
with a brand, positively evaluate and believe they could not find to the same extent with a
competitive brand. In the case of HSBC, the bank is known to be a truly global bank with an
international branch network.

Points-of-parity are associations that are not necessarily unique to the brand but may in fact be
shared with other brands (Brunner & Wänke, 2006).[5] There are two types of points-of-parity,
namely, category and competitive points-of-parity. Category points-of-parity includes HSBC
being a reputable financial institution and also a bank entrusted with fiduciary responsibility. In
terms of competitive points-of-parity, HSBC must be seen to ‘break even’ with other financial
institutions in terms of service quality.

(See appendix 2)

5. Marketing Mix

Marketing for financial services pose distinctive challenges to marketers because services are
intangible, inseparable and cannot be inventoried. An expanded marketing mix is required to
fully answer the differences between product marketing and marketing for financial services.
The expanded marketing mix aims to capture the distinctive nature of financial services (Booms
& Bitner, 1981).[6]

(See appendix 2)

5.1. Product
The product is the heart of the firm’s marketing strategy. Poorly designed service products that
do not create value for customers are destined to fail regardless of how well the other 6 Ps are
executed. The goal of the product element is to create a service concept that would offer more
value to a market segment than competitors. Working to transform this concept into reality
involves designing a cluster of different but mutually reinforcing elements.

The product must be a means to solve a problem or satisfy a want in the market. To date,
overspending is a major issue in the Western world. This is the reason why the new HSBC
prepaid card is included in the new current account package as a means to ensure that customers
do not overspend by ensuring prudential budgeting of financial resources.

Unique Features:

Prepaid Card

HSBC will launch two prepaid cards, namely, the HSBC’s Financial Manager and the HSBC’s
Budget Manager prepaid card. Both prepaid cards come preloaded with £10 after the customer
pays the initial card issue fee. The Financial Manager is a way to manage a monthly budget by
transferring your spending money from your bank account onto the card. It has an annual load
limit of £15,000. The Budget Manager on the other hand has a smaller annual load limit of
£2,000.

The new HSBC prepaid cards would be fee-free while offering the same flexibility as a credit or
debit card. The prepaid card however, would need to be loaded up with cash first before allowing
its users to purchase products and services. The prepaid cards can also be used to withdraw
money from cash machines.

Real Time Balance Alerts

Real time balance alerts will be sent to the customer’s mobile device every time a HSBC prepaid
card user purchases something. This balance update will notify the prepaid card user on the
amount of money spent and the amount of money left for free. HSBC may need to team up with
companies like Vodafone to provide this service.

Online Banking

Another unique element of the HSBC prepaid cards are their flexibility in managing the
customer’s financial resources. Bank customers can access the HSBC website and set standing
orders on how much money to load onto the budget manager every month as long as the funds
are available in their current account.

Optional Savings Account

Bank customers that pay more than £500 into their current account every month would qualify
for the HSBC’s Current Account Advance. Regular payments can be made through the internet
or by direct standing order from the customer’s current account to save a specific amount every
month. This feature is ideal for customers with a fixed monthly income.

5.2. Price

The pricing component plays twin roles for HSBC in the sense that it must be able to first attract
customers to purchase the service and also generate revenue for HSBC. According to Adrian
Palmer (2008), there are five main factors that influence pricing decisions, namely, profit
maximisation, market-share maximisation, survival, social considerations and personal
objectives.[7]

While pricing strategy is highly dynamic for other products and services, pricing for current
account services have become rather static in recent years. Most banks do not require any fees to
set up a current account. Banks instead rely on the money that floats in the interval when they are
deposited to when they are spent in order to profit from current accounts.

It is unlikely that any increases in interest rates would be able to attract customers to open up
new current accounts with HSBC. The base lending rate that is now at 0.5% provides little room
to manoeuvre for banks and other financial institutions. Adding to that is the credit crunch and
declining asset prices that makes borrowing at a higher rate unattractive at the moment. The
initial prepaid card issue fee should be around £10. This is in line with what competitors are
charging at the moment.

The catch with the prepaid card scheme is that it encourages bank customers to save. Any money
that is saved is held within the customer’s current account and remains available for banks to
provide further lending. This may prove to be highly beneficial to HSBC during times when
raising new capital is extremely difficult.

(See table 3)

5.3. Place

The place element involves delivering the product element to customers through appropriate
methods and delivery channels. Delivery may involve both physical and electronic channels.
Failure to make a service product readily available to customers would guarantee its failure
regardless of how good the service product is. The new current account package would be made
readily available throughout HSBC’s 1,492 branch network and also through the internet.

(See figure 1 & 2)

5.4. Promotion

The promotion element relies on effective communications to bring awareness in the market of
the service products offered by HSBC. The three objectives of the promotion element are to gain
the attention of customers, provide additional information and persuade customers to purchase
the product. Advertising is mass, paid communication that is used to transmit information,
develop attitudes and induce some form of response on the part of the audience (Adrian Palmer,
2008).

The choice of media that would be utilised includes newspapers, magazines, outdoor advertising
and the internet. A sales promotion will also be carried during the first three weeks after the
launch date to help stimulate customer purchase and the effectiveness of intermediaries (Adrian
Palmer, 2008). Other promotional materials include press releases, posters and brochures.

(See appendix 3)

5.5. People

Despite technological advances, many financial services still require direct interaction between
customers and bank employees. The nature of these interactions strongly influences how
customers perceive service quality (Hartline & Ferrell, 1996).[8] This is particularly true for
financial services as employees are often the first line of contact with the customer.

Due to the importance of this element in the marketing mix, special attention needs to be given to
the training of employees concerning the new current account package. The prepaid card concept
also requires some serious attention as its aim is to show HSBC’s change of stance concerning
the psychology of spending.

Training should only be given to bank staffs that are directly involved in the new current account
package. However, back office staff must also be formally notified concerning this new current
account package to ensure that the entire organisation have a coherent understanding on the
bank’s products and services. Besides that, training of IT personnel must also be stressed as new
information systems may have to be put in place before the launch of the new product.

(See appendix 4)

5.6. Physical Evidence

It is generally recognized that physical evidence can be subsidized into two components
(Shostack, 1982): peripheral evidence which can be possessed by the consumer but has little
independent value and essential evidence, which cannot be possessed by the consumer but has
independent value.[9] The peripheral evidence is the prepaid card itself while the essential
evidence includes bank branches, cash machines, posters and brochures.

(See appendix 3)

5.7. Process

The process element focuses on the mechanisms by which the service is delivered, including
business policies for service provision, procedures, degree of mechanization etc. It is imperative
that the policies and procedures are written and tested before the launch of the new current
account package.
Bank personnel are to conduct a test to determine how efficient and effective front line staffs are
at explaining the new current account package and setting up new current accounts. A step by
step guide on how to set up a new current account and prepaid card system is to be issued to all
front line staff to ensure that no confusion is to occur during the critical launch date.

Besides that, front line staff should also be constantly monitored to ensure that the delivery of
services occur smoothly. Customer feedback and complaints should be welcomed as they would
provide the input needed to continuously improve service delivery and customer satisfaction.

(See appendix 5)

6. Research

Market research will be carried out before, during and after the launch of the new HSBC current
account package. There are three methods for a financial services organisation to carry out its
research, namely, using in-house resources, using the services of a specialist agency or a
combination of the two methods. During the period nearing the launch of the new current
account package, both pre and post implementation research should be carried out by specialist
agency commissioned by HSBC.

6.1. Pre-implementation stage

During this stage, research should be focused on whether the market’s current external
environment matches the company’s initial results during the first external environment analysis.
Political, legal and economic elements of the external environment are likely to be very volatile
in the coming days that may cause HSBC to either delay or bring forward the launch of the new
current account package.

Furthermore, research should also be done on the company’s corporate image and the
receptiveness of market for a new product and concept during a time when the banking industry
is facing heavy criticism from the public.

6.2. Implementation stage

A tracking study should be carried out by the research agency during the implementation stage.
The tracking study will be done through monitoring consumer’s awareness and acceptance of the
new current account package. This process should be an ongoing one during the product’s life
cycle. Tracking studies should be conducted with small groups of a target market segment. It
would also be advisable to rotate the members of a group with another group to ensure that a
variety of responses is noted.

6.3. Post-implementation stage

Post-implementation research should be aimed at obtaining tangible results on whether HSBC

has indeed managed to obtain the desirable level of market share and profitability. Another goal
of the new current account package is to change the attitudes and perception of the public
towards HSBC. Marketing research at this stage should also determine on whether HSBC is now
perceived to be a more responsible financial institution that not only aim for profits but provide
value to customers.

Besides obtaining tangible results on whether marketing objectives are met, it is also important
to gain feedback on customer satisfaction levels and any complains on the product offered by
HSBC. This is to ensure that further improvements can be made in the future and any mistakes
made would not be repeated.

(See appendix 8)

7. Budget

The budget to implement this marketing plan is estimated to be around £15 million. A
contingency of 5% is included in the numerical calculations to ensure that some measure of
volatility is covered should the promotion of the new current account package proves to be more
expensive than anticipated

(See appendix 6)

8. Timescales

The implementation of the entire marketing plan would take around 9 months to complete. The
launch date of the new current account package is the summer of 2010 when economic
conditions are predicted to be more accommodating as a result of fiscal stimulus by the UK
government. A Gantt chart is included in the appendix to break down the timeframes of
individual tasks.

(See appendix 7)

9. Contingency Plan

A contingency plan is included in the appendix to note down various responses to some of the
challenges posed in these difficult times. Among the various scenarios that might occur in the
future includes the failure of the prepaid card to be a practical method to manage personal
finances, a severe contraction in economic activity and the failure to gain market share in the
current account market.

(See appendix 9)

Bibliography

 A. Ries and J. Trout, 2000, Positioning: The Battle for Your Mind, 20th Anniversary
Edition, New York: McGraw-Hill.
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Education (UK) Limited, United Kingdom, pp420-421.
  Andrea Felsted and Patrick Jenkins, Cash and carry, Financial Times, 20th July 2009, The
Financial Times Limited, No: 37057, London, United Kingdom, p 10.
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Financial Times Limited, No: 37057, London, United Kingdom, p 19.
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and Globalisation (Concepts and Cases). 6th ed. United States:     Thomson South-
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Harvard Business Review, January-February, pp75-83.
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 Michael D. Hartline & O. C. Ferrell, 1996, The Management of Customer Contact
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America (p.131-147).
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 Shostack, G.L., 1982, How to design a service, European Journal of Marketing, 16(1),
pp49-63.
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on individual brand evaluations, Journal of Consumer Psychology, 16 April, pp101-111.
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Available at: http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf
(Accessed: 1st September 2009)

Appendix 1: Marketing Strategy

Ansoff Matrix

[1] Dr. Orr, 2004, New Ledger, Forbes, 1 March, pp72-73.

[2] Kotler, Keller, Brady, Goodman & Hansen, 2009, Marketing Management, Pearson
Education Limited 2009, England, pp334.

[3] J.C. Anderson & J.A. Narus, 1995, Capturing the Value of Supplementary Service, Harvard
Business Review, January-February, pp75-83.

[4] A. Ries and J. Trout, 2000, Positioning: The Battle for Your Mind, 20 th Anniversary Edition,
New York: McGraw-Hill.

[5]T.A. Brunner & M. Wänke, 2006, The reduced and enhanced impact of shared features on
individual brand evaluations, Journal of Consumer Psychology, 16 April, pp101-111.

[6] Bernard H. Booms and Mary J. Bitner, 1981, Marketing Strategies and Organization
Structures for Service Firms, in J.H. Donnelly and W.R. George, Marketing of Services,
Chicago: American Marketing Association, pp47-51.

[7] Adrian Palmer, 2008, Principles of Services Marketing, 5th Edition, McGraw-Hill Education
(UK) Limited, United Kingdom, pp420-421.

[8] Michael D. Hartline & O. C. Ferrell, 1996, The Management of Customer Contact Service
Employees, Journal of Marketing, 60, no.4, October 1996, pp.52-70.

[9] Shostack, G.L., 1982, How to design a service, European Journal of Marketing, 16(1), pp49-
63.

1. Market Penetration

The market penetration strategy is implemented when an organization seeks to increase market
share of its current products/services. This strategy is the least risky as the organization is already
equipped with the experiences, capabilities and resources to market and support its
products/services. If the market is a high growth market, simply maintaining market share would
suffice. However, as the market reaches the saturation stage, a new strategy must be
implemented. HSBC is able to use this strategy to gain market share from competitors that
have lost confidence in banks that have failed in the recent sub-prime mortgage crisis.

2. Product Development

The product development strategy requires the organisation to develop new products for existing
market segments. This strategy is suitable for organisations that have a good understanding of
their customer’s needs and wants. Existing products/services can be used as a platform for cross
selling new products tailored to a specific customer base. As with market development, product
development carries more risk than market penetration. HSBC could use this strategy by
developing a new prepaid card product that O2 has launched recently together with its
current account. The new prepaid card would signal a change in the psychology of
spending among customers and would likely portray HSBC as a more responsible financial
institution that does not just encourage people to spend.

Porter’s Generic

Target Scope Advantages

Low Cost Product Uniqueness
Broad (Industry Wide) Cost Leadership Strategy Differentiation Strategy
Narrow (Market Segment) Focus Strategy (Low Cost) Focus Differentiation
Strategy

Differentiation

The differentiation strategy requires the organisation to develop products/services that are able to
deliver unique attributes valued highly by customers. Value added uniqueness of the
product/service would enable the organisation to charge a premium against competitors. By
using this strategy, the organisation would be able to charge a higher price with the knowledge
that substitutes to its products are not easily available.

According to quickmba.com, firms that have successfully implemented the differentiation

strategy usually have the following strengths:

 Access to leading scientific research.

 Highly skilled and creative product development team.
 Strong sales team with the ability to successfully communicate the perceived strengths of
the product.
 Corporate reputation for quality and innovation.

The risk to this strategy is that other companies may be able to imitate the unique characteristics
of the products/services offered by the organisation and sell them at a lower cost. Additionally,
other organisations that serve a smaller market niche may be able to tailor make
products/services that better cater for their respective market segments.

HSBC is able to utilise this strategy though developing and providing the new prepaid card
along with its current accounts. As the prepaid card concept was recently launched by O2,
many banks have yet to adopt it. This means that by providing prepaid cards along with its
current account, HSBC is able to gain a short term differentiation advantage.

Appendix 2

Table 1: Current Account Market Share in the United Kingdom

Details Financial Institution Market Share (%) No. of Current Accounts (m)
4 Established Banks Llyods TSB 19 12.1
RBSG 17 10.8
Barclays 15 9.6
HSBC 14 8.9
Challenges HBOS 14 8.9
Abbey 6 3.8
Nationwide 5 3.2
Others 10 6.4
Total 100 64

Source: Current Accounts, Finance Intelligence, June 2008, Mintel[1]

Table 2: Market Segmentation

Major segmentation variables for consumer markets

Geographical Region First by countriesSecond by different geographical regions of the
United Kingdom
City or metro size Under 5000; 5000-20,000; 20,000-50,000; 50,000-100,000;
100,000-250,000; 250,000-500,000; 500,000-1,000,000;
1,000,000-4,000,000; 4,000,000 or over
Density Urban, suburban, rural
Demographic age Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 64+
Family life cycle Young, single; young married, no children; young, married,
youngest child under 6; young, married, youngest child 6 or
over; older, married, with children; older, married, no children
under 18; older, single; other
Gender Male, Female
Income Premier, Plus and Basic Accounts
Occupation Professional and technical; managers, officials and proprietors;
clerical sales; craftspeople; forepersons; operatives; farmers;
retired; students; homemakers; unemployed
Education Grade school or less; some high school; high school graduate;
some college; college graduate
Generation Baby boomers, Generation X, Generation Y
Social class Lower lowers, upper lowers, working class, middle class, upper
middles, lower uppers, upper uppers

Table 3: The cost of using prepaid cards

Card Initial card Monthly Charge for Charge Cost to

issue fee fee ATM for reload the
withdrawal purchases card
 s
HSBC PREPAIDVisa Card £9.99 Nil  (But Nil Nil Free
annual fee
of £5.00
Virgin prepaidMasterCard £9.95 Nil 2.95% 2.95% Free at post
office or
via bank
transfer
Cash plus GoldMasterCard £4.95 £4.95 99p Nil Free
TuxedoMasterCard £9.95 £4.99 50p Nil 99p at post
office or
free via
bank
transfer
The BREAD cardMaestro £10.00 Nil £1.50 2.00% Free at post
office
OptimumMasterCard £9.95 £4.95 £1.50 Nil Free at post
office or
via bank
transfer
Splash PlasticMaestro £5.00 Nil (But £1.50 (plus 2.5% 30p per
£4.95 2% for £100
annual fee) withdrawals loaded at
over £50 post office

Appendix 3: Brief for Advertising Agency

Enclosed here are the main guidelines for the advertisement brief:

The Product:

The new current account package would include the HSBC’s Financial Manager and the HSBC’s
Budget Manager prepaid card. Both cards would include the following benefits:

 Preloaded with £10 after the customer pays the initial card issue fee
 The Financial Manager is a way to manage a monthly budget by transferring your
spending money from your bank account onto the card. It has an annual load limit of
£15,000. The Budget Manager on the other hand has a smaller annual load limit of
£2,000
 Fee-free while offering the same flexibility as a credit or debit card
 Real Time Balance Alerts
 Online Banking
 Optional Savings Account

Target Market:
The Financial Manager prepaid card would be targeted and customers with a higher net worth
while the Budget Manager would be targeted at individuals with lower net worth. Ideally, the
Budget Manager would also target individuals that have trouble getting qualified for credit cards
due to the lack of permanent income (students, etc.). Both prepaid cards should be seen as an
essential tool to help manage finances during the current economic recession happening in the
UK.

Advertising Objectives:

1. To raise consumer confidence towards HSBC as a responsible and secure financial

institution.
2. To change the perspective of the public towards HSBC that has been previously tarnished
by the turmoil happening in the financial world.
3. To increase the awareness of the public towards a new method to manage their finances
and keep themselves away from debt.
4. To create the image of HSBC as a local bank with global knowledge by introducing a
solution to the domestic problems in UK.

Form of Communication:

Above the line promotion:

 Press advertisements – half a page advertisement in the national newspapers with inserted
brochures
 Advertisement in certain magazines (Newsweek, the Economists)

Below the line promotion

 Brochures and posters for UK branch network

 Advertisement on the HSBC website
 Billboard advertisements on some of the main roads
 Press releases

Advertising Requirements:

All promotional material should use the colour and font that matches with HSBC.    
Advertisements should portray the new current account to be beneficial to customers as a tool
to manage their finances in difficult times. Promotional material should be reviewed at least 3    
months before their actual presentation to the public. A copy of the Gantt chart (that relates     
only to the promotional materials) should be given to the advertising company.

Appendix 4: Brief for Internal Circulation among Staffs

A note concerning the new current account package offered by HSBC should be circulated
internally in order to inform all employees of HSBC of the organisation’s plan in the coming
future. This note is important to help foster a company culture that encourages employee
participation and the alignment of interests among all internal stakeholders in HSBC. The note
should include:

 The marketing objectives of the new current account package

The marketing objectives include the targeted gain in market share after the launch of the new
current account package together with the expected increase in profitability from maintaining
current accounts. The new current account package also aims at rebuilding consumer confidence
towards HSBC by portraying the bank as a responsible and socially conscious financial
institution.

The new current account package also aims and building up HSBC’s corporate image and
branding theme of being global bank with local knowledge by introducing new products that are
in line with the current economic downturn.

 The new product features (the HSBC prepaid card)

While the basic current account is in many ways similar to what other financial institutions have
to offer, the new prepaid card that would be included together with new current accounts should
be seen as a practical tool to manage personal finances. Being able to created standing orders
through the internet would also ensure some innovativeness as compared to other competing
prepaid cards.

 The details on roughly when the launch of the new current account package would
be

The full Gantt chart should not be open to public viewing even for internal staffs and
stakeholders. Marketing plans should be revealed as least as possible in order to gain a ‘shock
effect’ on competitors. Furthermore, revealing marketing strategies to competitors would likely
mean that they would devise ways to counter a marketing plan. However, internal staffs should
be notified beforehand on the product and launch date so as to foster a more transparent and
unified organisation.

 The hopes and expectations of the senior management towards this new current
account package

It is important that the senior management in HSBC show their support and communicate their
expectations towards the new current account package. Senior management are more likely to
have the credibility necessary to enhance the level of acceptance among internal staffs. Approval
from the senior management is essential for a marketing plan to succeed.

Appendix 5: Step by Step Procedures

Enclosed here is a brief step by step guide that should be issued to front line staff in charge of
helping customers open new current accounts in HSBC.
 Steps Details
Step 1 Choose your prepaid card Finance ManagerBudget Manager
Step 2 Load up your card with cash Load your card by transferring cash from the
customer’s current account either through a bank
branch, ATM or the HSBC website
Step 3 Utilise your prepaid card The HSBC prepaid cards are secure chip and pin cards
that will be accepted like a normal Visa card almost
anywhere in the world
Step 4 Get real time balance alerts Free balance updates would be sent to the customer’s
mobile device whenever he/she utilises the prepaid
card

Appendix 6: Budget Explanation

Table 4: Budget
Item Amount (£) Contingency Total (£)
(5%)
Product Costs
Product development (Staff wages) 10,000 500 10,500
Negotiation with telecommunications company 5,000 250 5,250
Training Costs
Personal account managers 300,000 15000 315,000
Branch staff 200,000 10000 210,000
IT support staff 100,000 5000 105,000
Other staff 100,000 5000 105,000
Promotional Costs
Advertising agency 500,000 25000 525,000
Newspaper advertisements 8,000,000 400000 8,400,000
Outdoor advertising 3,000,000 150000 3,150,000
Brochures/Posters 300,000 15000 315,000
Bank’s cost
Sales Promotion 1,000,000 50000 1,050,000
Webpage advertisement 5,000 250 5,250
Research costs
Research agency’s fee 50,000 2500 52,500
Internal research costs 5,000 250 5,250
Total 13,575,000 678,750 14,253,750

Notes:

1. The budget does not include certain hidden costs that might be incurred when striking a
deal with the telecommunications company.
 2. Product development costs do not include the costs of the plastic cards to be issued by
HSBC.
3. The new current account package would not require HSBC to increase its workforce as
existing staffs are able to cope with the anticipated rise in new current accounts with the
help of advance information systems.
4. Outdoor advertising includes big posters on billboards that may be extremely costly for
HSBC

Objective Details Time Period

Finalising prepaid  5 weeks would be needed to finalise the features Week 37 –
card features of the new current account package (most week 41 (5
notably the prepaid card). weeks ending
 Brainstorming sessions would be conducted to September
ensure that the features included are practical and 2009)
simple to use.

Product  This process involves designing the current Week 37 –

development account package. week 50 (14
 Ways to carry out the 7Ps as effectively as weeks ending
possible would be finalised during this time October 2009)
interval.
 The new current account package would be ready
to go into the next phase as soon as inputs from
the new prepaid card are obtained.

Customising  This stage involves IT programmers customising Week 51 – 42

information systems information systems to suit with the new current (10 weeks
account package. ending
 Most notably is the ability to set standing orders October 2009)
to debit the new prepaid cards at the start of the
month (as long as there are enough funds in the
customer’s current account).

Negotiations:  Negotiations should be carried out with Week 49 –

telecommunications prospective telecommunications company in week 1 (6
company order to secure the ‘free balance update to mobile weeks ending
device’ feature. January 2010)

Front-line staff  Training and development of staff that are Week 51 –

training and immediately concerned with the new current week 15 (17
development account package. weeks ending
April 2010)
Support staff  Support staffs are help desks staff or any front- Week 2 –
training and line personnel that are not directly dealing with week 20 (19
development weeks ending
 the new current account package. May 2010

Notification of other  The brief for internal circulation would be Week 51 (1

personnel circulated during this time interval to ensure that week ending
all members of HSBC are aware of the new December
developments in the organisation. 2009)

Commissioning  The advertising agency would be commissioned Week 50 –

advertising agency during this stage and promotional material will week 12 (15
be designed by an external advertising agency. weeks ending
March 2010)
Pre-implementation  Research concerning consumer awareness and Week 1 –
research acceptance, initial market perception and week 4 (4
economic research would be done by external weeks ending
research company commissioned by HSBC. January 2010)

Promotional  Design of promotional materials should be ready Week 4 –

materials for production. week 15 (12
 Production of promotional materials by external weeks ending
company. April 2010)

Press conference  A press conference to announce the rolling out of Week 1

the new HSBC current account package. (ending
January 2010)
Web-page  The start of promotions through the internet. Week 2 –
advertisement week 17 (18
weeks ending
April 2010)
Newspaper  The start of newspaper advertising. Week 2 –
advertisement week 30 (29
weeks ending
July 2010)
Posters and  Posters and brochures should be up on bank Week 5 –
brochures branches in the UK. week 32 (28
weeks ending
August 2010)
Launch date  Launch of the new current account package. Week 18

Sales promotion  8 weeks of sales promotion in HSBC. Week 18 –

 Special counters should be set up on the first week 25 (8
month of the sales promotion. weeks ending
June 2010)
Post-implementation  Research conducted on market shares, consumer Week 18 –
research week 34 (17
 confidence and customer feedback/complaints. weeks ending
August 2010)

Appendix 8: Brief for Research Agency

Enclosed here is a research brief that should be sent to an external research agency to ensure that
the research carried out would yield results that are relevant to HSBC.

Research Research Objectives Details

Pre-implementation Consumer awareness and  Level of enquiries concerning the new
research acceptance current account package.

Initial market perception  A level of primary data is required to

determine the initial perception of the
new prepaid card as a means to
manage personal finances.

On-going economic  Economic conditions are currently

research highly unstable and on-going
economic research is needed to
forecast where the economy in the UK
is during the launch of the new current
account package.

Research during Tracking study  A tracking study should be done in

implementation of order to obtain primary data on
marketing plan consumer experiences concerning the
new current account package.
 The collective of individuals chosen
for the tracking study must be able to
represent the targeted market
segments.

Post- Market share  The increase of market share in

implementation current accounts for HSBC relative to
other major financial institutions.
 Also important is to note the
profitability of current accounts using
the new prepaid card.

Consumer confidence  Research needs to be conducted to

gauge the level of consumer
confidence after the launch of the new
current account package.
  This is essential as it is one of the
objectives of the marketing plan to
increase consumer confidence in
HSBC.

Customer  It is equally important to obtain

feedback/complaints customer feedback concerning the
practicality of the new prepaid cards
that were recently issued.

Appendix 9: Contingency Plans

Scenario Possible Responses

Further deterioration  The launch of the new current account package may have to be
of the UK economy postponed should the UK economy deteriorate at an
unexpected rate.
 Economic research in the pre-implementation stage should be
able to point out red flags on market conditions.
 Launching aggressive promotional campaigns during times of
widespread uncertainty would be unwise as the public would
be sceptical on the credibility of new products.

Failure of product as  This scenario is highly unlikely as the new current account
a tool of personal package should be thoroughly examined during product
finance development stage.
 Adding to that is the fact that other companies like O2 have
already launched their own prepaid card concept into market.
 Should the product fail to generate new current accounts,
additional features might have to be included to increase the
value of the package in the eyes of the customers.

Failure of HSBC to  The reason for the failure of HSBC to gain market share in the
increase its market current account market can be linked to economic or internal
share in the current reasons.
account market  Internal reasons include the failure of staff to market the new
current account package.
 Front-line staff may have to be retrained and new promotional
materials implemented in order to increase sales.
 Failure of gaining market share may also stem from aggressive
campaigning by competitors like O2.
 Should this be the case, HSBC may have to pump in more
resources to promote the new current account concept more
effectively.
Overwhelming success  Should the new current account package achieve
of the prepaid card overwhelming success when times are bad in the UK, HSBC
concept may want to consider opting for the market development
strategy.
 Currently, China and India holds the largest markets together
with high national savings rate.
 Extending this new concept to overseas market may prove
highly profitable.