Commercial Bank International
With 577 employees, Commercial Bank International is, arguably, among the principal financial institutions in the UAE. The financial institution, incorporated in the year 1991 and listed on the Abu Dhabi stock exchange eleven years later, has been in the banking industry for twelve years today. The organization is headquartered in Dubai and offers financial services across the United Arab Emirates to both corporate and individual clients. The official auditors of the company are known as Deloitte Touché Tohmatsu. In addition to banking services, the financial institution offers other services such as brokerage in international trade as well as the trading in securities (Rama, 2011). Commercial Bank International is a limited liability company that is publicly owned through the trading of shares. Talking of financial services, the organization has specialized in retail and corporate banking. This way, the organization offers both personal and business loans. The working hours, as per the roster of the company, are between 0800hours and 1300hours between Sunday and Thursday. Being an Islamist nation, most organizations in the United Arab Emirates do not operate on Friday, a day they observe as the day of worship. They resume work on Saturday, and work between 0800hours and 1200hours.
The micro and macro environment of the company
Much like all other organizations in Dubai’s busy environment, Commercial Bank International faces strong external forces as well as internal restructuring. Apparently, the internal environment of any organization is made up of the employees, the management, the organizational culture, and all other internal practices that are unique to the environment. The internal environment, also referred to as the microenvironment, is characterized by consultative yet organized management. According to the internal policies of the organization, the client is the most important stakeholder. This means that in case of any conflict, the client is given priority over any other stakeholder (Sandıkcı & Rice, 2011). The internal environment as well gives priority to the employee. The employees, commonly referred to as associates within the company, are considered the second most important stakeholders in the organization. This way, management works in consultation with the employee. The micro-environment of Commercial Bank International gives it competitive advantage over other organizations in the banking business. It is for this cause that many business analysts consider Commercial Bank International a market leader in the UAE.
The macro-environment is in such a way that the organization faces stiff competition from other financial organizations in the banking industry. Arguably, this is one of the industries in which differentiation is a major issue. Differentiating bank products is rather problematic considering that such products are in such a manner that they cannot be modified much. The competition that is characteristic of the external environment is the factor that triggers the need for marketing (Bhattacharjee, 2006). The macro environment as well embraces such socio-cultural factors as Islam. Islamic banking is among the novel ideas in the international banking community. Commercial Bank International offers such services and has structured its working days and hours in such a style that they do not interfere with the days and hours of worship. Another aspect of business in Dubai is technology. The level of technology in the UAE is considerably high considering that the UAE is among the busiest business centers in the world. Commercial Bank International employs the use of advanced technology such as the utilization of touch screen technology in their Automated Teller Machines (ATM). Additionally, they employ such technology as internet banking.
Debatably, this one of the most common intangible products offered by Commercial Bank International in the United Arab Emirates. The product was widely marketed in the UAE as it was unique in various ways. Among the factors that made the car loan unique is the fact that it seemed so much flexible, compared to the car loans offered by other financial institutions. The marketing of the product took quite a number of outlooks. The first and most significant being advertisement and sales promotion. In marketing the product, the organization employed many strategies, top among the list being identifying and focusing on the target market (Bhattacharjee, 2006). The facts about the loan were part of the marketing and included such things as central features of the car as well as the criteria used to establish whether or not the customer has qualified for the product.
The product was designed and meant to finance the acquisition of new and other pre-owned motor vehicles. The loan, which facilitates up to 80% of the total cost of procuring the car, is refunded through monthly installments that are affordable to the average, prospective car owner. The installments are normally spread over a 12 to 48 month period. This is meant to give an extensive assortment of options for the clients. For instance, the client, depending on financial strength and stability may opt to furnish the loan within a year. This, according to the rates of the bank, becomes cheaper. On the other hand, the client, especially one that is not financially stable, can elect to repay the loan over the maximum forty eight months. While this option is associated with cheaper installments, it becomes expensive in the long run since the cumulative costs are higher (Hoffman & Bateson, 2011). The major point that the marketing of the product is centered on is the fact that the loans are subject to quick approval and are associated with competitive interest rates. Unlike the competitors, Commercial Bank International offers rates that are averagely friendly for those willing to purchase new, as well as used cars.
The target market
The target market refers to the group or class that is most likely to buy the product. Apparently, the target group for cars loans is made up of the clients that have a stable income, and can demonstrate beyond realistic doubt that they can effortlessly pay for the loan that they are granted (Rama, 2011). This way, the Commercial Bank International associated its product of car loans with people that are salaried as well as those running private enterprises. According to the chief loans consultants of the organization, these groups can easily repay the loan. Additionally, the credit consultants argue that these classes need cars more than any other classes. In describing the target market, various variables are employed. The first variable is the age. The age of the potential creditor should be within the majority age bracket. The majority age bracket is described as the age that falls within the limits that are stipulated by the law. For this reason, the target market for the car loan product was described as being above the majority age of 18 years.
The second variable used in describing the target market is the income levels. The income of the potential levels had to be evaluated in two ways. The first evaluation focuses on the amount of income. This means that the prospective client has to have substantial income which can possibly cover the loan as collateral security. The third variable used in describing the target market was the possession of a driveling license. The product marketing efforts targeted the driving class such that they made a driving license one of the key requirements for one to qualify for the car loan. The fifth variable describing the target market is the residency of an individual. Rationally, it would be unreasonable to give a car loan to a client that could not prove residency (Hoffman & Bateson, 2011). As such, the marketing department made it clear that one had to provide a passport or a visa indicating legally recognized residency for, at least, three months. In addition to such requirement, the applicant had to produce a salary certificate and a valid accounts statement.
Marketing opportunity for Commercial Bank International
Considering that a car is a necessity rather than the luxury it was some years ago, Commercial Bank International has a significant marketing opportunity considering that most people in need of cars cannot afford to buy such cars on one installment. This may be because of several reasons such as instability in income levels, as well as low income levels and many financial obligations. Research indicates that an average working class man or woman in the UAE cannot buy a car on one installment (Sandıkcı & Rice, 2011). The market research carried out by the organization in 2007 indicated that majority of the working class people were willing but not able to buy. The research further indicated that such people were able to finance the loans, if such loans were offered at competitive rates. It is for this reason that the organization designed the car loans. The financial institution fixed lower rates after a thorough cost benefit evaluation of the idea. The banks already offering the product were doing so at exorbitant rates. In exploiting this opportunity, the financial organization employed competitive rates accompanied by intensive marketing which placed the organization a notch higher in the industry.
The marketing mix for Commercial Bank International
Much like all other organization that offer services, intensive marketing and the use of appropriate marketing mix are necessary. In the case of Commercial Bank International, the marketing mix, much like all other organizations handling invisible products is made up of people, pricing, place, product, promotion, processes and physical evidence (Mullineux & Murinde, 2003). The use of the Ps of marketing facilitated the use of the strategy designed by Commercial Bank International. The strategy used by Commercial Bank International was such that personal selling, advertisements, sales promotion and direct marketing were given prominence. The Ps used is outlined as:
The 7Ps were and are still employed in the marketing of all products of the organization. The element of price may be an ambiguous aspect of such a product as a loan. It is however interpreted as the reasonable rates at which the car loans are offered. Since the interests are low, the price of this product can be said to be a way or a contributory factor to the marketing endeavors of the organization.
The second P of marketing incorporated into the mix of Commercial Bank International is the aspect of people. Arguably, the people factor is the most important thing in the marketing of any service or intangible product (Kapoor et al, 2011). People are the single most important aspect of personal marketing. The extent to which Commercial Bank International employed the use of people in personal marketing is extremely remarkable. People, both on permanent employment and internship programs carried out intensive door to door personal marketing which entailed much convincing and persuasion.
The aspect of place, in service marketing is considerably crucial. The main reason why place becomes crucial is the reality that production and purchase of services is concurrent since, apparently, services and such products as loans cannot be stored for future transaction (Hoffman & Bateson, 2011). As such, Commercial Bank International came up with such a strategy that entailed field marketing. Such promotion was done in such a style that the personal marketers gave facts to the clients, took their contacts and directed them to the nearest branch for the actual transaction.
Promotion refers to the utilization of such things as advertisements on such media as television, print media as well as other forms of publicity (Sandıkcı & Rice, 2011). Commercial Bank International carried out intense promotion of the car loan as a novel product. This took the form of television adverts as well as newspaper classified promotions and advertisements.
The product itself, having taken advantage of the marketing opportunity, came out as a way of marketing itself. The loan, being exceptionally attractive in as far as the terms, conditions and requirements are concerned, is competitive compared to other organizations’ offers.
Recommendations on the marketing mi and strategy
While the marketing mix and strategies used by the organization were quite efficient in attracting many clients, there are some adjustments that can be made in relation to the strategy. Among the key recommendations is the fact that the strategy should try as much as possible to narrow down to the target market. This can be accomplished through quite a number of means. Key among the ways I would propose is the placing of such adverts in magazines that deal with cars, for instance, the popular international magazine known as Top Gear.
I would as well recommend that the organization embrace the people factor more than any other P. this is because, majorly, revolves around people. The process is initiated by people, and is aimed at convincing other people to purchase a product. Again, it is through the use of people that the organization can promote its products while carrying out market research and consumer feedback. Additionally, it is through the use of people that clients can engage in effective communication. This is because an advert for example, cannot answer or clarify a point to a prospective client.
In conclusion, it is quite clear that Commercial Bank International employs all the seven Ps in its marketing mix. Even so, it is noteworthy that people, price and promotion have been given obvious prominence. The car loan, as a new product has been performing well in the organization’s portfolio since it is associated with high demand among the clients. The returns of the company have improved since the establishment of the car loan in 2007. This is why; it is considered a prime factor in the portfolio.
Bhattacharjee, C. (2006). Services marketing: Concepts, planning and implementation. New Delhi: Excel Books.
Hoffman, K. D., & Bateson, J. E. G. (2011). Services marketing: Concepts, strategies, & cases. Mason, Ohio: South-Western Cengage Learning.
Kapoor, R., Paul, J., & Halder, B. (2011). Services marketing: Concepts & practices. New Delhi: Tata McGraw Hill Education.
Mullineux, A. W., & Murinde, V. (2003). Handbook of international banking. Cheltenham, U.K: Edward Elgar.
Rama, M. R. K. (2011). Services marketing. New Delhi: Pearson.
Sandıkcı, O., & Rice, G. (2011). Handbook of Islamic marketing. Cheltenham, UK: Edward Elgar.