Mature Mortgages Segment
Customers in this segment comprise 17.3% of the total client base of the firm as this is indicated by the segment composition of the Society’s total customer base. The segment is aware of the products offered by the building society. The building society could communicate its products to this segment using various strategies. To begin with, advertising should be used (Pirakatheeswari 2009, p. 43).
However, it should be backed up using other communication strategies such as use of public relations, websites (internet) and direct marketing representatives (Kotler & Armstrong 2004, p. 92). The building society’s website, blogs, billboards and bulletins are good communication strategies as they reach out to many people (Ray 2004, p. 7). For instance, adverts on mortgages should focus on the discounted rates on which the mortgage is charged. Consequently, all adverts and promotions of the products and services offered by the Cambridge Building society to the mature market would have a specific message that is appealing to the mature market in UK (Kitchen & De Pelsmacker 2004, p. 106).
According to Kotler and Armstrong (2004), the distribution of the products is an important factor in the business environment. The Cambridge building society could distribute its products to this market using agents who will then sell the products to the consumer son behalf of the firm. Agents and brokers could include the direct marketing representatives of the company. These distribution strategy is important as it enables the consumers to be told the benefits of the products (Wedel and Kamakura, 2000).
The Multi-Product Market Segment
This segment makes up 14.9% of the total customer base of the Cambridge building society. It is characterized by financial stability and high incomes that make them consume long term savings accounts. The communication strategies suitable for this segments include the advertising, the use of the internet websites such as the company website, blogs, public relations and direct marketing representatives. Advertisements could increase the awareness of the products offered by the Cambridge society through their appealing messages on the products especially the benefits of the products to the consumers (Ray 2004, p. 12).
The interest in the Society’s products and services could be increased through holding of concerts in work places and workshops while ensuring that majority of the attendants are people in the age group of the segment (Yao 2011, p. 1). Concerts could increase the knowledge of consumers on the benefits that the products of the society provide to their daily and future needs such as home ownership. Creative communication strategies for this market segment could include a call for immediate action of opening premium saving accounts and some offers with winners getting a subsidized-interest mortgage. Media strategies could be added to increase awareness of the products to the market (Ray 2004, p. 15).
The building society should apply various distribution strategies such as agents and retailers to reach out to the consumers. The firm cannot do it on its own and it needs agents to act on its behalf. Agents are effective as they will be able to personalize the distribution of the products to individual consumers. Retailers on the other hand could act as outlets for the company products especially savings accounts (Schultz et al. 2007).
NEST Builder market Segment
This segment of the Cambridge Building Society market comprises of 5.9% of the total customer base, thereby being the smallest segment in the society. The segment is characterised by regular savings and investments. Consumers in the segment use credit cards and overdrafts to meet their daily financial needs that are well met (Kabani 2009).
Therefore, the objective of integrated marketing communication strategies should be to increase the number of clients in this segment to match other segments through utilization of communication strategies that would exploit the segment’s financial characteristics. All communication strategies that could increase the awareness of the company products to the market should be used. These may include strategies such as advertising, merchandise promotions, event sponsorship, direct marketing and use of public relations. The age group of this generation indicates that it is a large scale consumer of the internet and therefore, the website of the firm and other blogs could be used to market the products of the firm. Direct marketing through use of marketing representative would be necessary to meet consumers physically to enlighten them on the benefits of consuming the society’s products (Kevin 2003).
Product distribution channels to be used could be use of agents and retailers to reach out to the consumers (Mills 2002, p. 52). Retailers could act as immediate outlets in which the consumers could easily obtain the products and services of the firm. Direct marketing representatives could also act as agents of the company that market and sell the products of the company such as mortgages and savings accounts to the consumers (Kerin et al. 2003, p. 79).
Choice of best strategy: Acquisition vs. Retention
The priorities chosen for the different market segments differ. The above integrated marketing communication strategies aim at creating awareness, purchase and acquisition of new clients by the Cambridge building Society. The strategies are applied across all segments. However, there is need for choice. According to Schultz et al. (2007, p. 27), different organizations have different goals and objectives that also depend on different factors. Most young organizations that entre the market usually have their initial priority as acquisition of clients. They all strategies that could help them acquire new customers.
However, it is after the firm acquires enough clients that it realizes that it needs to retain the acquired customers in order to maintain consistency in sales revenue and market competitiveness. Cambridge Building Society is a different case as the firm is old in the industry and has already established its market niche and clients. A choice between acquisition of new customers and their retention could be based on different market segments of the building society as described below.
The mature segment of the building society is big enough as indicated by its percentage share of the total client base of the building society of 17.3%. The large number of clients in the segment calls for customer retention strategies. The reason for retention of clients in the segment is that it will help the Cambridge building society realize low costs that are incurred in recruitment of the firm (Kotler & Armstrong, 2004, p. 201). The overall effect is that the firm will be consistent in its sales while increasing profits due to reduced recruitment costs.
Customers in the multi-product segment comprise of about 14.9% of the total client base of Cambridge building society. The client base in this market is not yet sufficient because it is still lower than the maturity market segment. According to Kabani (2009), an organization should retain its clients as well as keep recruiting new clients to its products in order to increase its market share and competitiveness. For this reason, Cambridge Building society should retain its maturity market while recruiting new clients in its other segments that have few clients. The strategy to be applied to this segment should be both recruitment and retention (Wedel & Kamakura 2000).
Client acquisition strategy should be applied also because the customer base in the segment is lower than the maturity segment. The overall effect of these strategies is increased market share for the Cambridge Building society. Lastly, the reason behind acquisition of more customers in this segment is that they are twice likely to have premium savings accounts and mortgages compared to other segments, an indicator of the worth of the market to the building society (Kabani, 2009).
The NEST Builders segment is the smallest as its client base is only 5.9% of the building society’s client base. Being comprised of employed people aged 35-44 who earn higher than any other market segment for the building society, consumers in the group are anxious to save and own property including homes. Cambridge building society has not fully tapped into this market and there is need to increase its customer base in the segment (Kerin et al. 2003). Therefore, the client-acquisition strategy is preferred to retention in this segment. All integrated marketing communication strategies should be applied in this section. The company should being by increasing awareness in the market bearing in mind that clients in the segment are many and have enough financial resources to purchase the products of the building society (Ray 2004, p. 1).
Media strategies and creative strategies should be used to create interest among customers of the products of the firm. Creative strategies as indicated earlier include use of workshops, seminars and price rebates to encourage customers to purchase the products and services being offered such as mortgages and premium savings accounts. Cambridge building society should base their strategies on the fact that a third of clients in this section could purchase more than one product of the building society (Kevin 2003, p. 103).
Risks Associated with Brand Communication
Product branding is an important aspect of Cambridge building society. The branding communication exercise helps the organization make aware of its products to the public especially its different market segments (Kotler & Armstrong, 2004, p. 201). In spite of its benefits, branding communication could entail some risks that could affect the organization. The major risk involved in brand communication is time wastage (Kevin 2003). Branding communication involves the use of different integrated marketing strategies that calls for many preparations from the organization. Therefore, the management of the Cambridge Building Society may end up taking much time preparing for brand communication than attending to its clients. And if the building society achieves both, the costs could increase drastically.
According to McDonald Frow & Payne (2011, 112), technology has advanced in the world and many firms are updating their technologies in order to improve business. Integrated brand communication strategies utilize traditional brand advertising and marketing strategies (Kabani 2009, p. 89). Such strategies include the use of the traditional media strategies such as use of commercial adverts in the broadcast media, a method that is used by the Cambridge building society too. This technique may not be as effective as it used to be many years earlier in its use. This is because the modern society is surrounded by many adverts in the media that new technological devises such as TiVO and DVR are used by many people especially the average aged population to skip adverts by companies that come between programs (Yao 2011, p. 1).
As the Cambridge building society keeps on using adverts as forms of integrated marketing communication strategy for its last market segment, the NEST Builders, it should realize that the strategy may not be very effective. The alternative method for brand communication instead should be brand placement that highlights the brand of the firm and its uses to target audience. Brand placement involves the promotion of the major brand of the firm rather than other non-brand products with the focus being the impact of the product on the consumers (Yao 2011, p. 1).
According to Yao (2011, p. 1), traditional broadcast media has become less effective and its reliance by organizations such as the Cambridge building society may not sale the company products to its targeted audience in the NEST builders segment.
Advertisement of the brand of the building society through database marketing may not be cost effective for Cambridge building society. The costs that the building society could incur in setting up the required hardware are costly and could lead to escalated costs in the organization (Kabani 2009, p. 94). Moreover, advertising the brand of the society through electronic database demands the building society to have new skills including analytical and decision making skills that are common in marketing. This requirement could revamp the building society’s information system thereby causing the company to support only a new class of users (Yao 2011, p. 1). Lastly, database marketing is used as a tactical tool only and its use for marketing the brand of the building society might not yield the required outcome (Ray 2004). Therefore, brand marketing should be used carefully by the Cambridge Building society in order to ensure that the method is profitable to the building society.
List of References
IMC. 2011. Defining Integrated Marketing Communication. Web.
Kabani, S. 2009. The Zen of social media, an easier way to build credibility, generate buzz, and increase revenue, Benbella books, inc. Dallas. Web.
Kerin, R et al. 2003. Marketing, 7 Edn. McGraw-Hill Irwin, Boston. Web.
Kevin, L. 2003. Strategic Brand Management: Building, Measuring and Managing Brand Equity-Second Edition, Pearson Education Inc, New York. Web.
Kitchen, P & De Pelsmacker, P. 2004. Integrated marketing communications: A primer, Routledge, London. Web.
Kotler, P & Armstrong, G. 2004. Principles of marketing, Prentice-Hall, Upper Saddle River. Web.
Log-Mar. 2011. Marketing Communication. Web.
McDonald, M, Frow, P & Payne, A. 2011. Marketing plans for services, John Wiley & Sons Ltd, West Sussex. Web.
Mills, G 2002, Retail pricing strategies and market power, Melbourne University Publishing, Melbourne. Web.
Pirakatheeswari, P. 2009, Database Marketing: Its Advantages and disadvantages. Web.
Ray, C. 2004. Integrated Brand Communication: A powerful new paradigm. Web.
Schultz, D et al. 2007. In search of a theory of integrated marketing communication, Journal of Advertising Education, vol.11, no. 2, pp. 21-31. Web.
Wedel, M & Kamakura, W. 2000. Market segmentation: Conceptual and methodological foundations, Springer, New York. Web.
Yao, Y. 2011. The Next Big Thing in Brand Communication. Web.