Hongkong and Shanghai Banking Corporation

Question: Write an essay on "Hongkong and Shanghai Banking Corporation". Answer: Introduction HSBC is the largest multinational bank in the world with total assets of US$2.67 trillion. The full form of HDFC is the Hongkong and Shanghai Banking Corporation. HSBC has around 6,600 offices in around 80 countries. As per the records, HSBC became the sixth largest public company in the year 2014. In the major financial market in the world, HSBC has a vital presence (Mulder and Westerhuis 2015). HSBC provides a wide-ranging approach of the economical services to the customers, trades as well as organization with the help of a global network that is linked by a highly developed technology. In order to meet the requirements of its customers, HSBC hires almost 30,000 workers speaking over 100 languages. HSBC is known to finance the export of tea as well as silk from China. It also financed the export of jute from India and sugar from Philippines (Bean 2012). Target market and Positioning The target market in HSBC is the customers who are belonging to the age group of 18-30 years. It has reported that the individual within the age group of the youth has the propensity to save more as compared to the elder people. As per the recent trends, the young people are giving up their luxury life in order to save more. The age groups between 18-30 years are saving the largest proportion of their income as compared to the other age groups. As result, HSBC targets the individuals belonging to this age group. They are the customers of the target market for HSBC. The more these individuals will save the more it will be beneficial for HSBC (Yu 2014). It also targets the obtainable customers of the bank from the Personal Banking, possessions and savings and Personal funding Services through open market attainment bases their creditability. The customer base is compounded by HSBC while intensifying the revenue. The revenue is mainly intensified within the obtainable customers by augmenting the spending on the card. The groups of customers who share an identical set of requirements as well as needs belong to the market segment. Market segment helps in organizing and serving the exclusive segment by helping the administrator to find out the best marketing. The market segments are easy to get to, assessable and large enough in order to be worth targeted by an organization. In order to segment a market it is important to focus on the demographic and the environmental segmentation. Figure : The HSBC (Source: The Week UK, 2016) The act of scheming the contribution of the company and the representation to engage a distinguishing place in the minds of the target market is positioning. The data derived from the SWOT and the PESTAL analysis of the HSBC facilitates the marketers to describe the links between the point-of difference as well as point-of-parity. The points-of difference are those advantages that are related by the customers with the brand. They are positively assessed with a competitive brand (Jo 2012). Micro and macro environment The microenvironment factors are those factors that have a direct impact on the success of the organization. The factors, which are external as well as out of control and influence, the decision making of the organization is termed as the macro environment. The macro environment mainly contains the factors as well as the variables, which are outside the trade, which has both positive and negative influence on the expansion as well as the continued existence of the trade, which encourages the achievement of the objectives (Bosdriesz et al. 2012). The macro environment forces that affect HSBC are as follows: Environmental factors the environmental factors include the increasing concern related to globalization as well as the insufficiency of raw materials and the effluence targets. As a result, it has become vital to view an industry as a principled as well as a sustainable company. There has been increasing demand, which is coming as pressure from the end of the customers to source ethically and form a sustainable reserve (Martins et al. 2014). Political factors it measures the degree at which the government intervenes in the economy. The political factors that affect the HSBC are the taxation policies, labor law, environmental rule, excise as well as political constancy. Economic factors HSBC must enhance an understanding of the economical surroundings as the economic states of affairs of the country have an impact on the factor prices within the particular organization. Wages, inflation, GDP, rate of exchange are the factors that affect the economic macro environment (Sonenshine and Kraft 2015). Social factors these factors affects the standard of living of the individuals. The factor includes religious conviction, family, demographics as well as distribution of age and the living circumstance. Technological factors the way HSBC is developing a perceptive of the rapidly rising technology is taken into account by the technological factors (Gendron 2013). Figure 2: The Macro Environment (Source: Marketing Audit, 2014) The micro environment forces that affect HSBC are as follows: Competitors the competitors of HSBC are the Citigroup and the Barclays. So, it is important for HSBC to compare its rate of interest and the online features of banking with its competitors. It should also compare the level of customer service provided by its competitors. Public individuals are that group o which HSBC relies to succeed in the market. However, these individuals are not personified as one. These individuals can be directly or indirectly associated with the HSBC bank. The individuals includes the customers as well as the shareholders an also the media. Consumers the existing consumers enjoy the loyalty scheme offered by the HSBC bank. This reward is given by the bank as a gift for being a part of the organization. The bank not only offers new schemes to the probable consumers but they also offer a huge diversity of banking financial credit in order to make their bank appeals to as many customers as possible. Figure 3: The Micro Environment (Source: Environment, 2015) Consumer Perceptions and Behaviour To maintain a stable relationship with the customers it is very important to focus on the perception of the customers. The satisfaction of the customers results from the comparison of the expectations of the customers proceeding to purchase with insight after a purchase. A bank is a financial institution that helps an economy to grow. The opportunities in the banking sector have taken place due to globalization. In order to get a clear perception about the customer towards HSBC the following survey needs to be taken into consideration. The questionnaire should include the L/C opening cost, the processing time of the document, financial support, trade relation, any extra facilities, placement of the bank, level of contentment, risk associated with the trade and the overall contentment. L/C Opening Cost the relationship managers determines the L/C Opening Cost which in turn creates great impact on the customers. However, the volume of transaction also determines the L/C Opening Cost. Figure 4: The L/C Opening Cost. (Source: Hsbc.co.uk, 2016) From the above diagram it can be stated that most of the customers agrees for the L/C Opening Cost. With the help of this cost, the customers will be able to decide whether they want the bank account with HSBC or not (Parves 2013). The processing time of the document as per the perception of the customers, the processing time of the document is accurate. Reliability on the Security System Reliability on the Security System Yes A little bit Never Total No. 44 23 6 73 Percentage 60.3% 31.5% 8.21% 100 As per as the perception of customers regarding the online security system most of the customers are in the favour of the security system in HSBC. About 60.3 percent of the customers feel that the security system by HSBC is required for safe online banking (Wong and Wong 2015). Figure 5: HSBC bank online banking Survey (Source: Sasse 2015) The above diagram shows the level of satisfaction of the customers associated with the HSBC bank online banking. It can be seen that 8.21 percent of the customers are highly satisfied with the online banking facility of HSBC. However, the rest of the 46.57 percent are only satisfied (Krol et al. 2015). Marketing Mix The set of four decisions, which needs to be taken into consideration before launching a new product, is known as the marketing Mix. The four variables of marketing mix include the product, price, promotion and place (Borden 2015). Product As far as the product under marketing mix is concerned, product is the first variable of the marketing mix. The company should deal with the fact that what is the product they are selling as well as the quality of the product. Price the pricing of product mainly refers to the cost that is put for the product. Product it mainly refers to the item that is essentially being sold. The goods, which are sold, must deliver a minimal level of performance. Place if the customers finds it easier to buy the product then in that case, it will be convenient for the customers and this is where place plays an important role. Product: Personal banking the wealth management services, the retail banking, online banking as well personal loans are included under this category. Personal banking also includes the international credit that is available in two varieties that is classic and gold. The banking services are provided by the bank round the clock through a widespread ATM network (Davis 2016). Economical planning services the services offered to both the inhabitants and the non-residents of the country are termed as the economical planning services. This service includes the stock broking procedure as well as the insurance services and the investment prospects. Corporate banking HSBC shares a corporate relation with the domestic banks as well as the foreign banks. The service provided by the bank includes the financing of capital, corporate deposits, business facilities, syndications and organization of cash (Tambe and Mehta 2015). Trade banking the bank is known to provide trade vantage and account related to business to the small and the medium size business unit. The services provided by the bank to this business are doorstep banking and phone banking. Assets and capital markets this include the imitative in major coinage, money market and foreign exchange. Protection and clearance this includes the services such as the distribution of finance, the distribution of unit and the management of cash. The Marketing Mix of the HSBC Place in the marketing mix HSBC is the largest bank in the world in the capacity of assets and also in order to operate productively. HSBC has almost 6600 branches in at least eighty five countries. There are innumerable banks in different countries under diverse names but they have been branded jointly. With the aim to spread its broad network, the bank had expanded its branches all over the place. Various monetary and banking services are provided by HSBC to its international customers. HSBC is mainly set up in that location where it is able to offer the best probable services as well as execute its services effectively (Pavlou and Stewart 2015). The ATMs under HSBC are located at the tactical locations in approximately all the main positions so that the customers are easily pleased with their services. Skilled security guards are employed outside the ATMs in order to protect the customers while they are making the transaction (Luo et al. 2015). Price in the marketing mix The pricing policies of HSBC are subject to change as the bank is in a competitive market. The pricing policies changes as per the trends in the market well as the policy changes of its competitor. The policies are subject to invention at each level and any time period. In order to avoid the competition, HSBC has implemented the insistent pricing policy which in turn involves the achievement through obtainable funds (Gordon 2012). HSBC has played a dual role in the constituent of pricing in order to fix its policy of pricing. The company thought of attracting the customers firstly so that the customers can buy the various products and services that are offered by the bank and produce the revenues later on. The maximization of profits, survival policies, personal aims and the social considerations are the factors that manipulate the policy of pricing. The pricing policy is varied and dynamic for various goods and services (Huang and Sarigll 2012). The pricing for services such as that includes the current account have become fixed as the bank does not require any fees for the opening of the account. However, the bank depends on the interval of time in which the money drifts in the bank between the transactions. HSBC charges a very small amount for the credit card scheme in order to draw more customers. Under the pricing policy there is hardly any demarcation that can be put into practice. Promotion in the marketing mix HSBC has decided to implement an extensive promotional strategy in order to create understanding about its bank and the variety of services it provides. HSBC used advertising to create the understanding s it was the best tool that can be used. The advertisement was placed regarding the HSBC bank on the newspaper as well on the business magazines (Gupta 2013). The advertisement of the bank was related to the information of the bank that mainly emphasized on the product and services that is offered by the bank (Goi 2015). People in the marketing mix In spite of having the advancement in technology, HSBC requires the direct communication between the customers and the employees of HSBC. The interaction is required because it helps in strongly influencing the customers. It is highly important for a bank because the workers working for the bank are mostly the first line of contact with its consumers. This element is very crucial and important in the marketing mix and that is the very reason to meet this variable it important to give a particular attention to the training of the workers by taking into consideration the present account package. The concept related to the prepaid card also requires attention as its main objective is to the change of the position related to HSBC, which in turn concerns about the psychology of expenditure (Gordon 2012). The training should be mostly given to the employees of HSBC as they are directly involved in the package of present account. The back office staffs or the employees should also be little aware about the concept. This is done in order to ensure that the bank has an overall idea about the commodities and services provided by the bank. Physical evidence in the marketing mix The physical evidence comprises of the tangential evidence that mainly deals with the possession of the customers. However, it has little self-governing value as compared to that of the indispensable evidence, which has the independent value but is not possessed by the customers. The prepaid card is the tangential evidence in this case; however, the indispensable evidence includes the branches of the bank, the cash machines, placards and the flyers (Jackson and Ahuja 2016). Process in the marketing mix Under the marketing mix, the variable process mainly focuses on the mechanism which in turn helps to deliver the service. The service includes trade policies for the stipulation of service and the degree of automation. A test needs to conduct by bank employees in order to determine how effectual and well-organized the front line employees are (Barrett and Weinstein 2015). Conclusion and Recommendation It can be concluded that HSBC targets the individuals belonging to the age groups between 18-30 years. It can be recommended that the age group mentioned above should continue their method of saving. It is also concluded that the market position of the credit card can be strengthened with the help of marketing mix. The credit card that has been designed by HSBC mainly satisfies the demand of its customers. HSBC charges a very small amount for the credit card scheme in order to draw more customers. Wages, inflation, GDP, rate of exchange are the factors that affect the economic macro environment of HSBC. It can thus be recommended that the marketing mix of HSBC should be maintained well. The product and services should be maintained and also the price that is the loan facility should keep with a lower rate of interest. The place should also be in the right position that is the bank should be located in the place, which is easily available to the customers. References Assignment Point. (2016). Customer Perception about Trade Service of HSBC - Assignment Point. Barrett, H. and Weinstein, A., 2015. Corporate entrepreneurship, the marketing mix, and business performance. Bean, E., 2012. US Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History. Borden, N.H., 2015. 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