Introduction
The financial services sector is very dynamic and volatile and requires the need to adopt effective business-level strategies in order for the Barclays to turn out successful in the future (Darmon, 2007). In the light of this, marketing plans comes in handy in order to address future challenges and to effectively maintain competitive advantage and penetrate new market segments in the global platform.
Alkhafaji Abbass, a prominent author in the field of strategic management (2003) states that marketing communications entails the deployment of communication tools and resources at the disposal of the firm towards the development of a program that can be used in maximizing the impact on products consumers and end users at the least possible cost. Integrated Marketing Communications principally entails the management of customer relationship with the intention of increasing the brand value by use communication efforts. Darmon (2007) further notes that such communication efforts typically involve the use of cross-functional processes that aid in the formation of beneficial relationships with the consumers and the stakeholders of a business organization.
Haines Stephen (2004), a strategic management author, notes that the main idea of the marketing communications is to join together all the organizational essentials such as sales, public relations, and advertising. The outcome of the marketing communications model is that there is a single brand message that is used in all the marketing channels. Williamson Dean (2003), who an author in the field of strategic management, notes that integrated marketing communications usually has a significant role in the communication aspects of a business enterprise such as business-to-business communications, the marketing channels, business to customer communication and communications that are directed internally, which are core in the modern business environment. The purpose of this assignment is to develop a marketing plan for Barclays PLC basing on analysis of the Barclays PLC situation, its market overview, SWOT and competitor analysis and the market objectives and strategies.
Analysis of Barclays PLC situation
Financial summary
Barclays PLC is a global corporation that mainly specializes in the provision of banking and financial services, and has its headquarters in London, UK. At present, the company ranks 10th in the globe with regard to the financial and banking industry at the globe and comes 21st as the largest corporation globally (Barclays PLC, 2010). Barclays PLC has established its operations in at least 50 states in Africa, Europe, South and North America, serving over 48 million clients. After the end of the business period ending 30th June 2010, the total assets of the company totaled to € 1.94 trillion (Barclays PLC, 2010).
Barclays PLC considers itself a universal bank, with its business level strategies divided into two main categories including Corporate and Investment Banking and Wealth management. The second category of its business cluster includes Global Retail Banking. The first business cluster entails three core business units, which include Barclays Capital, Barclays Corporate and Barclays Wealth (Barclays PLC, 2010). The second business cluster mainly entails Barclaycard, which involves loan services and credit card services; Barclays Africa; Retail banking in the United Kingdom and Western Europe (Barclays PLC, 2010).
The following is the organizational chart for Barclays PLC
Barclays PLC has relied on the universal banking business model to address the demands of its stakeholders. The business model has enabled the company to establish a bank that provides the best solutions in the banking and financial services sector, and establish a global bank that bases on diversification and balanced along the lines of geography and its business strategies by the respective customers and the sources of funding for the business. In addition, the universal banking strategy guaranteed profitability in its operations during the recent global financial recessions; as a result, the company offered financial security for its clients and made significant contributions towards ensuring the financial system was stable (Barclays PLC, 2010). The following chart denotes the Barclays financial performance growth during 2010.
Mission statement
The mission of Barclays PLC is to establish confidence and the trust required to undertake what is right for its customers and the respective employees by developing an environment that is truly inclusive. This is achieved through fair treatment of people and embracing diversity among its employees and clients. Barclays reported a pre-tax profit of ÂŁ6,079 million during the 2010 trading period (Barclays PLC, 2010). This was a 33 percent increase compared to the previous trading period. The revenue for the company increased by approximately 8 percent to ÂŁ31,450 million, while Barclays Capital increased its total revenue by approximately 17 percent. It is arguably evident that Barclays PLC is one of the leading financial services providers in a global scale (Barclays PLC, 2010).
Market overview
Marketing Mix (product, pricing, place and promotion) & Positioning
Hill Charles & Jones Goreth (2007), who are authors in the field of global management consent that the marketing mix plays an integral role in determining the effectiveness of marketing strategies. It mainly comprises of 4P’s, which denotes the product, Place and promotion, and Price, which are all relevant in the case of Barclays.
Barclays PLC makes use of advertising to promote their products, which mainly denotes the communication strategies that the company uses to reach its target audience. With regard to the promotional strategies used by Barclays PLC, it mostly comprises of publicity in the media and sponsorship. Barclays PLC also engages itself in public relations activities, which aims at building its corporate image to the larger public. Advertising plays an integral role building the brand image of the Barclays PLC in the banking and financial services sector (Ulwick, 2002).
Barclays has for a long time used sponsorship to promote its business name, this is evident by the fact that company is a sponsor of the English Premier League. In return, Barclays PLC benefits due to being mentioned constantly in the programmes, publicity materials such as magazines and events that are associated with the English Premier League. Barclays also relies on the above-the-line advertising, which mainly involves the use of mass media for promotion. Public relations activities are also used by Barclays PLC as means of building its brand, this is achieved using seminars and conferences and publishing materials aimed at offering advice for start-up businesses (Ulwick, 2002).
With regard to product, Barclays PLC has diversified its product lines in order to meet the needs of the various customers in the banking and financial services industry. This is evident in its business units that include wealth management, retail banking and Barclays Capital (Ulwick, 2002). Product diversification provides an opportunity through which Barclays can engage in cross-selling, which in turn enhances the development of a new financial product.
The price represents the monetary value that the consumers pay to obtain the product or use a service. In relation to this, Barclays focuses on the provision of high-end services in the financial and banking industry. The place aspect represents the physical location of the target consumers or a marketing channel used by the marketers. Barclays PLC has managed to make global establishments, implying that it target customers are from all over the globe. This is attained in the company by a unification of its business units in all its branches that are found all over the world.
Duane Ireland& Hoskisson Robert (2008), who are prominent authors in contemporary business management notes that a significant revolution of the place concept in marketing is due to its consolidation associated with the onset of the internet, whereby marketers were faced with minimal challenges associated with geographical limitations. The promotion element of the marketing mix is also an important element of the marketing communications for Barclays PLC. Kwiatkowski Robert (2005), who is an author in business management claims that the aspect of promotion is applicable across all the four P’s. Advertising forms part of the promotional strategies that the Barclays should use to reach the target market and appropriate strategies to have an impact on the way their target customers perceive their financial products and services.
The positioning of Barclays PLC focuses on offering high-end financial services to its corporate and retail clients. High-end implies that Barclays PLC positions its products and services using a differentiation strategy that lays emphasis on premium banking. Positioning at a Barclays PLC is also based on product diversification, whereby Barclays categories its customers as either corporate and retail customers or its financial services are mainly divided into wealth management, Barclays Capital and retail banking. (Barclays PLC, 2010).
Market trends
Grant Robert, a business analysts states that the market trend denotes the direction of the market over a given duration of time (2005). A technical analysis is required to determine the market trends for the case of Barclays PLC. The banking and financial services significantly relies on the global financial positions, and that any occurrences of global financial recession are likely to impose significant marketing constraints for Barclays PLC. Similar sentiments were echoed by Perner Lars (2011), who is proffessional marketer. The internet revolutionized the market trend in the banking sector because its provides a framework through which the customers can execute the transactions without having to visit the bank physically; thus is a perfect opportunity for Barclays PLC to exploit in its integrating marketing communication strategies and tailor its business processes to meet the ever changing technology. Barclays reports that at least 56 percent of its retail banking clients are relying on online banking to undertake their transactions (Barclays PLC, 2010). This is facilitated by its strategy of contactless banking.
Market growth & the size of the market
The financial services and banking industry is always increasing, especially in the case of United Kingdom. The challenge facing the financial services market is increasing cases of financial meltdowns that threaten the profitability of the business and the amount of money and companies will be banking. The size of the market stated to be global, and Barclays PLC can opt to penetrate market segments such as Asia that have fewer financial institutions. Therefore, the market growth and size of Barclays PLC is expanding from both the domestic and international markets (Darmon, 2007). The market share for Barclays PLC is currently 36 percent in the United Kingdom.
SWOT analysis and Competitor analysis
Strengths
Hill Charles and Cronk Tom (2010), who are prominent authors in strategic management state that a SWOT analysis is used to recommend strategies to be used in ensuring the best alignment between the external and internal environment. Some of the strengths that Barclays PLC enjoys are that the bank enjoys an international presence, implying that the company can spread its risk and enjoy the benefits of operating on a large scale. This means that Barclays PLC enjoys cost advantages associated with economies of scale, global operation implies reduced business costs (Darmon, 2007).
The second strength of Barclays PLC is that it has a well established brand name in the banking and financial services sector. In addition, the company’s brand name is usually under constant promotion as in the case of the English Premier League football sponsorship (Barclays PLC, 2010). The third strength of Barclays PLC is that the company is mostly associated with innovative services in the financial services and banking sector.
Hodgetts Richards and Luthans Fred (2003), who are authors in international management notes that Barclays was the first to launch the credit card during 1996, after which it has engaged in persistent innovations in the banking and financial services industry. For instance, the company recently launched the One Pulse card combing Oyster, which is a credit card launched during 2007 that aimed at combining the Oyster card used for the Transport for London with visa credit card and diverse cashless functions for its customers located in London (Barclays PLC, 2010). Another strength that Barclays PLC enjoys is that the company has managed to open up many flagship branches. This is in concurrence with its refurbishment programme to addressing the demands of its customers relating to street presence (Darmon, 2007).
Weaknesses
There are also numerous weaknesses of Barclays PLC that may pose significant effects on the level of its profitability. Some of the weaknesses of Barclays PLC are that the company has not made any strategic plans in order to make payments on the dividends of its shares; this makes it relatively less attractive to potential investors. This means that there will be few people who are willing to buy its shares when publicly traded (Wheelen and Hunger, 2008). Another weakness of Barclays PLC is its past involvement in offering financial aid to government of Zimbabwe and its role in apartheid in South Africa; this raises concerns regarding the company’s ethical position and is likely to affect its corporate image. Large bonuses awarded to the company directors have also affected the company’s business image.
Opportunities
There are diverse opportunities for Barclays PLC that should be exploited to increase its profitability and market share. The first opportunity for Barclays PLC is that it offers diverse financial services on a global platform, which in turn offers numerous cross-selling opportunities. Cross-selling means that the company can use the existing products it offers as a basis to develop other financial products.
For instance, the company can use wealth management as a basis for marketing its retail banking services. Another opportunity for Barclays PLC is that the company managed to acquire most of the Lehman Brothers Holdings assets before it collapsed, this put the company in a better position to negotiate with the liquidators relating to the most effective business units that they can acquire from Lehman. Lehman Brothers Holdings was a financial services company operating globally that went bankrupt during 2008 (Barclays PLC, 2010). Asia still presents an opportunity that Barclays can exploit in its expansion strategy; the company is currently embarking on business establishments in the region (Barclays PLS, 2010).
Threats
The first threat facing Barclays PLC is that its strategy to expand to Asia can turn out to be risky because its business strategies cannot be effective in capitalist markets compared to other industry leaders. The second threat to the company is that diversity in services offered may push away clients who prefer companies that are more specialized. The third threat is that the extended economic downturn implies that the possession of Lehman’s assets could be misguided business strategy. In addition, Barclays has earned a name in closure of branches especially during 2000, and competitors are using this position to develop consumer-oriented services approach by ensuring that their branches are continuously open. This affected the business image of Barclays PLC, imposing negative effects on its brand image (Darmon, 2007).
Competitor analysis
Barclays is a major play in the banking and financial services sector in the United Kingdom and across the globe, this puts it in a better position compared to its major competitors (Ulwick, 2002). Barclays PLC faces significant competition within the local UK market and international financial services and banking industry (Barclays PLC, 2010). The main competitors that Barclays PLC faces at an international level include Citigroup, bank of America, HSBC Holdings, Royal Bank of Scotland, Lloyds Banking Group plc and JP Morgan Chase (Barclays PLC, 2010). RBS has a market share of 14.6%, Lloyds Banking Group has a market share of 30.2 %, while Barclays PLC has a market share of 15.8 percent.
An idea for a new product for Barclays PLC- venture capital services
Apart from the core financial and banking services provided by the Barclays PLC, an idea financial service that most banks in the United Kingdom and all over the globe have not been keen to execute is venture capital services. Venture Capital is a basically a form of financial capital that is awarded to start-up growing companies that are at their early stages of financial growth and faces imminent business risks (Darmon, 2007). The venture capital financial services will increase the profitability of the Barclays PLC through ownership of the equity that Barclays opts to invest in. This comes as a perfect business level strategy aimed at replacing its Private Equity services that the company found less profitable and placed significant constraints in its business operations (Wheelen and Hunger, 2008).
In Europe and other places in the world, there is an increasing need for venture capital services, especially after the recent financial recession that affected the globe. Successful venture capital services is an added advantage to the business reputation and image of the Barclays PLC owing to the fact it provides an opportunity through which the company can engage in alliances associated with strategic partners and administer advice regarding the strategic and financial plans that the partnering firms.
It is arguably evident that adopting venture capital services in its business level strategies presents a perfect opportunity for the company to increase its capital base and build its brand image through helping start-up businesses to turn out successful. In addition, Barclays PLC will benefit from the fact that most partnering businesses will be undertaking their financial operations with Barclays (Barclays PLC, 2010). This will present an opportunity for Barclays to enhance its customer base in the competitive financial and banking services market.
Wheelen Thomas and Hunger David (2008), who are authors in strategic management note that the only role that Barclays PLC has when introducing venture capital services is to implement effective marketing strategies to meet the increasing demand for venture capital services in the UK market and the larger global market. Ulwick Anthony (2002), a customer relationship specialist and an author, notes that venture capitals presents an opportunity through which Barclays can increase its services portfolio offered to its clients. The only focus that Barclays should focus is to reinforce the success of the start-up businesses. It is the success of the start-up firms that contribute towards the profitability of the firm (Williamson, 2003).
Market objectives and strategies
Market objectives
Krizan AC & Merrier Patricia (2007), who are authors in the field of business communication state that the market objectives denote the strategies that Barclays PLC will use to effectively implement the market segmentation strategy to increase its competitive advantage. Among the core market objectives at the disposal of the company that requires minimal resources is through word-of-mouth campaigns, advertising using online media, using direct mail to the potential venture partners and display of literature in the bank’s branches.
MacMillan Ian & McGrath Rita (1997), who are authors in marketing strategies, consent that the market objective also aims at establishing a long term relationship with the potential venture partners and targeting new customers on a yearly basis. This is in line with its strategic expansion goals and objectives of market segmentation. The fundamental argument that Barclays customers enjoy different services, implying that they denote distinct customer groups that require tailored services approach (Williamson, 2003). The stages that Barclays can implement in order to effectively meet its market objectives are outlined in the following figure.
Market segmentation
Michael Baker & Susan Hart (2007) defines market segmentation as a business level strategy that aims at meeting the demands of a specific market segment. The focus strategy is normally effective as a replacement for cases whereby the company cannot engage in cost leadership strategy. Morris Michael and Kuratko Donald (2002), who are prominent authors in corporate enterprenewurship claim that this business strategy requires the Barclays PLC to exploit all the constricted differences of the larger target market with the larger market through a separation of the particular group of customers (Williamson, 2003).
This can also be effectively implemented by a segmentation of its product line that aims at meeting the demands of the niche markets. For the case of the venture capital services, it has been largely ignored by the most of the firms offering financial services in the United Kingdom. Shimizu Koichi (2009), who is an author in advertising strategies notes that the market penetration of venture capital services does not require Barclays PLC to allocate significant financial and human resources for effective execution. The proposition to offer venture capital services in the UK and the globe can be argued to be an insight led strategy. It denotes how it is vital for a business organization to act in accordance with the demands of the market. Shimp, Terrence (2008), a prominent author in integrated marketing communications states that in order for the strategy for be effective, it is vital for Barclays PLC to target particular market segment, discover their demands and adopt a business level strategy that effectively addresses such needs.
Robbins Stephen & Coulter Mary (2007), who are authors in the fied of management consent that market research is an effective strategy that Barclays can exploit to have a comprehensive understanding of the needs of start-up businesses that are in dire need of venture capital financial services (MacMillan & McGrath, 1997). As a result, market segmentation strategy has the potential of increasing its market share in the financial services industry within the UK and the larger global market.
1 and 3-year forecast and budgets
Barclays has experienced a notable increase in pre-tax profit during 2010 irrespective of the persistent economic downturn and in the pitfalls in the financial and banking markets (Barclays PLC, 2010). There have been relatively low interest rates, uncertainties in the regulatory framework and slow-moving market segments. Despite the threats that imposed by the market conditions, Barclays business strategy was successful, as evident by the 2010 pre-tax profit. The three core priorities that Barclays plc should take into consideration when developing its future business strategies include the management of the risks, maintaining a close relationship with its customers are corporate clients and sustaining its strategic momentum (Barclays PLC, 2010).
With regard to maintaining a close relationship with its customers, the responsibility of Barclays PLC is to be supportive of their customers during the period of economic downturns and uncertainties. The retail banking business unit has the potential of increasing its revenue through maintaining a close relationship with its customers (Barclays PLC, 2010). This is not the case for Barclays Capital, which requires much effort to attain this strategic goal. Lending is also an important business aspect of Barclays plc that the company uses to offer support and ensure financial growth of its customers and corporate clients. During 2010, Barclays offered ÂŁ 43 billion in form of new lending and ÂŁ 7.5 billion of loans in the form of loans in the United Kingdom. These amounts should increase in future in order for Barclays to remain successful (Barclays PLC, 2010).
With regard to the sustenance of the company’s strategic momentum, Barclays plc is aiming at capitalizing in the value that its universal banking strategy brings to its corporate clients and retail customers. Major elements that Barclays should adopt when diversifying their business include geographical factors, the different types of customers, sources of financing and the business line (Barclays PLC, 2010).
Management of the Barclays plc risks is also an important business strategy that the company can use to steer growth in future. As such, Barclays should aim strengthening its positions on capital, liquidity and adjusted gross leverage. Balance sheet growth is also important for the success of the company in future. The execution priorities should focus on capital, returns, top-line growth and citizenship. Focusing on capital implies that the strategies adopted by the company should be effective to address the challenges in the financial and banking services sector. Returns should focus on the performance of the company, while citizenship aims at ensuring that there is job creation and fostering financial and economic growth to its customers and clients (Barclays PLC, 2010).
Conclusion
The paper has highlighted the core elements of the marketing plan for Barclays PLC. It is arguably evident that the financial services and banking sector is competitive and requires the deployment of effective marketing plans in order to penetrate the competitive market. Barclays PLC has relied on the universal banking business model to address the demands of its stakeholders. The business model has enabled the company to establish a bank that provides the best solutions in the banking and financial services sector, and establish a global bank that bases on diversification and balanced along the lines of geography and its business strategies by the respective customers and the sources of funding for the business. This implies that the marketing plan adopted should be in line with the business model adopted by Barclays PLC.
The paper has proposed that Barclays should adopt venture capital services as a new product that the bank can use to attain its strategic goals in line with its expansion. The market objective also aims at establishing a long term relationship with the potential venture partners and targeting new customers on a yearly basis. This is in line with its strategic expansion goals and objectives of market segmentation.
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