Executive Summary
The First Abu Dhabi Bank is the largest in the UAE, with various outlets including some in Dubai. The flexible and highly fragmented financial industry has forced banks to come up with creative ways to position themselves in the market. This, coupled with a steady increase of foreign banks in the country, is one of the reasons why the Gulf Bank and the National Bank of Abu Dhabi resorted to the merger in an attempt to conquer the market. This new marketing plan proposes actions that should be taken to position the bank better both locally and internationally. A SWOT analysis of the bank will show that it has missed out on various opportunities based on the fact that it lacks a global presence. Additionally, the fact that it is susceptible to government interference is a threat to its profitability. Despite these, the bank has a strong presence in UAE and the suggestions made in this marketing proposal will ensure that it remains the number one banking partner for both individual and corporate parties.
Current Marketing Situation
The current market, the banking sector, is highly protected by the law. This has resulted in the difficulty of foreign banks to fully penetrate the United Arab Emirates market as they have to adhere to Sharia Law, and their financial guidelines, to operate in the country. However, because more foreigners are living and working in the UAE, the country has become more accepting of foreign banks over the last few years. One can argue that the market is fragmented, to mean that there is a lot of competition within the sector and no single bank is considered a monopoly in the sector. Interestingly, for the local banks to compete with the foreign, they decided to adopt the internal BASEL II approach, which they did not before.
This goes to show how flexible the market has become due to influence from the global community.
Market Description
As previously mentioned, the First Abu Dhabi Bank (FAB) was formed in 2016 after the merger of the Gulf Bank and the National Bank of Abu Dhabi. It can be argued that the need for the merger was necessitated by the rising competition in the market. Indeed, the bank retained a majority of its clients and even attracted more as it is considered the largest bank in the UAE. Interestingly, before the merger, the National Bank of Abu Dhabi was known for having the largest deposit and loan market share. This was not highly affected after the merger as customers of the Gulf Bank were also able to enjoy the same services at no extra costs. The merger also saw clients of both banks receive more efficient mobile and online banking services among other new features that were introduced.
Product Review
FAB offers several products to its clientele, but the essay will focus on five namely, mortgages, loans, savings, cards, and investment options. The company has four distinct products under their mortgage plan: national housing plan, residents living in UAE, small buildings, and guests. Each of these products is tailor-made to suit its target market. For example, people opening small businesses are encouraged to take up mortgages for small buildings instead of paying rent and agree on a suitable payment plan. Additionally, the company has 12 different products under the loans umbrella that range from personal loans to car loans. Additionally, they offer loan services to non-UAE residents who qualify for the same. There is also a wide range of cards that the clients can choose from, offering different advantages that are also highly customized to suit the client needs. The investment option offers the target market both money market funds and securities exchange whereas the savings section also includes saving money through digital platforms.
Competitive Review
The ease of access to the market by foreign banks has raised competition in the banking sector in the UAE. Initially, the law did not permit foreign banks to have more than eight branches in the entire country. Additionally, the foreign banks had to adhere to strict Sharia Law financial guidelines. Today, even though these banks still adhere to Sharia Law financial guidelines, the law was changed to allow them to open as many branches as they liked, provided that they got the permission from the respective government agency. Competition with other local banks is mildly moderate as they all use near-similar tactics to conquer the market. Debatably, more local banks have focused on the pressure the international banks have created compared to competition amongst themselves. It is this reason that pushed the local banks to adopt BASEL II into their systems for better efficiency and consumer support.
SW0T Analysis: Strengths, Weaknesses, Opportunities, Threats
As mentioned, FAB is the largest bank in the UAE and this offers it various added advantages over its competitors. This section looks at the bank’s strengths, weaknesses, opportunities, and threats as related to the current market.
Strengths
Large size. The company’s size offers it several advantages including the fact that more clients are able to easily access it from wherever they are situated. The company has opened over 130 branches and 600 ATMs outlets across the country to ensure that the target market is always aware of the bank’s presence regardless of whether they live in the city or not.
Tech savvy. The fact that the company offers both mobile and online banking is a strength as many of the local banks do not have this service. Clients are able to directly access their different accounts at shopping centers as well, making it easier and safer for them to go cashless.
Lending ability. As previously mentioned, this strength was borrowed from the lending power of the National Bank of Abu Dhabi. The lending ability of the bank has ensured that it attracts both personal and business banking partners.
Weaknesses
Business oriented. It is arguable that the company is highly business oriented. This means that the bottom line always comes first and at times, this has affected the quality of service offered to the clients. Debatably, loyalty from consumers is highly affected by their consumer journeys. The bank has not been keen on enhancing these journeys but has tried to remove some pain points for the consumer.
Limited global presence. Despite the fact that the Gulf Bank has a wide global presence, the brand FAB, does not. The company has only focused on its reach within the UAE. This is a weakness due to several reasons with the most important being the fact that the bank is losing out on Emirati clients living in other parts of the world. Additionally, UAE has a large foreign task force that is forced to use foreign banks, or other local banks with a foreign presence, to send money back to their respective countries.
Opportunities
Global expansion. The company has enough capital and clients to start global expansion. This will not only open up international markets but will also ensure that its clients can access the bank from whichever country they are in at the time. It is also important to note that there is added advantage in the exposure of working in international markets. It is expected that this exposure will ensure better product development and service to the target market.
Consumer service. As mentioned earlier, the company has tried to remove some pain points experienced along the consumer journeys for its target market. For instance, the introduction of mobile and online banking allows clients to skip long queues at the banking hall. However, more opportunities lie in the customer service as better experiences will lead to a more loyal clientele.
Threats
Foreign competition. Foreign competitors still prove a threat to the future profitability of the bank. Not only do the foreign banks offer better customer service (a weakness for FAB) but their global presence also ensures that both foreigners living in UAE and UAE residents visiting other countries, can easily access their accounts regardless of where they might be at that particular time of need.
Government interventions. FAB is highly regulated by the government and this can be a threat to its profitability due to two reasons. The first is the fact that constant interference from the government can lead to worse customer service. Secondly, it limits the impact the bank has on the target market compared to the international or foreign banks.
Objectives and Issues
Using the SWOT analysis done, there are ambitious objectives and issues that have been identified for the first and second years of the marketing plan.
Objectives
First year objectives. In the first year, the marketing plan will aim to increase clientele on the mortgage plan by 10% as this is the company’s lowest earning section.
Second year objectives. In the second year, the marketing plan will seek to advertise all products offered by the bank in 5 selected countries targeting UAE residents working, living and studying in those areas.
Issues
A major anticipated issue is the release of funds by management for the marketing plan, especially during the second year. This is anticipated due to the fact that the management has not yet been keen on tapping into the foreign markets and might need convincing from more than one department (Marketing) on the merit of the same.
Marketing Strategy
Products
The plan aims at using differentiation to show how the bank’s products are better than others for the target market. A value addition approach will enhance the plan’s ability to reach to a majority of the target market who might be weary of the lack of a global presence and the government influence on the bank.
Price
The pricing strategy will focus on offering low budget and premium services based on the client’s needs. Even though the pricing strategy offers two different approaches, quality that is offered in both will be the same. This will ensure that clients do not feel left out just because they are on the low budget plan.
Place
The company already has over 130 branches in the UAE. The place/distribution strategy will focus on how to get the brand into the international space. The idea will revolve around the use of the distribution network already established by Gulf Bank to introduce the brand into the international space.
Process
Using a flow charting service delivery, the plan will seek to identify the loop-holes that have so far been overlooked by management in regards to service delivery for the clients. People, possession, and information processing among the target market will be used as matrixes to monitor the different processes offered by the bank and how they affect clientele satisfaction.
People
The staff is critical for service engagement between the bank and its clientele. Thus, it is important that the right people are given the right jobs at the right time in order to take advantage of positive consumer experiences and journeys. The people strategy will focus on identifying, recruiting and keeping crucial talents within the company.
Promotion
The promotion strategy will emphasize the need for both traditional and digital advertising to reach the target market. Traditional advertising will include pamphlets on brochures, and TV and radio adverts while digital ones will include the use of social media to reach out to possible target markets. It is crucial to point out that the use of social media will also make it easier for the clients to get in touch with the bank at all times.
Physical Evidence
The appearance of the bank outlets and their ATMs will affect how clients perceive service offered. The physical evidence policy will look into how to make the banking halls more user friendly and comfortable for clients. For example, issues of long queues will create a negative perception that the bank outlets offer slow services and this will push clients to seek services elsewhere.
Positioning
It is critical that the bank positions itself as the number one financial agent in the country. This can only be done through a proper positioning strategy that will use differentiation approach to help the bank stand out from the rest. Also, the positioning strategy will also highlight various ways in which the bank management can position the brand internationally. This international positioning will have a long-term approach as much is still to be decided on the same internally.
Distribution Strategy
There are several distribution channel partners that will be used to deliver on the objectives of this marketing plan. First, the use of effective supply chain will ensure that the distribution of the brand is effective. Additionally, the use of downstream partners will enhance the bank’s engagement with its clientele.
Communication Strategy
Integrated marketing communications will also prove highly effective in enhancing the brand. As stated previously, a combination of digital and traditional communication channels will be used to engage with the bank’s clients. One of the advantages of using a combined approach is the fact that the majority of the target audience also depend on the combined communications channel approach to get their information. Therefore, it is almost assured that if a potential client does not see information about the brand on the traditional media, he or she will see it on the digital platform.
Marketing Research
Market research is important to establish what the target market expects from FAB. Indeed, before the roll-out of the marketing plan, market research will be done to first understand the public perception of the bank. This will be crucial in tailor-making different activities that will be guided by the plan. Additionally, the market research will be used to identify different matrixes that will serve as bases for monitoring and evaluating the plan. For example, if the market research shows a negative perception, then a matrix for measurement will be how well the plan has worked to change the perception of the public from negative to positive. Ideally, the market research will also help shape strategies that touch on other departments that work together with the marketing department including the communication department.
Marketing Organization
The marketing department will be categorized based on function, product, and locality. As previously mentioned, the bank offers various products that attract clients. However, some products do better than others and it is critical not to lump them together under the strategy as this will not help achieve the results desired. Also, a detailed work structure and departmental chart will be developed to ensure everyone in Marketing fully understands their roles and responsibilities.
Action Programs
The Marketing department will work closely with the Communications and Finance departments and has to coordinate their individual action programs for the benefit of the whole organization. In the first month of the launch of the plan, the department will work with both communications and finance to develop right messages for the target audience for in-country advertising of the different brands. The second month will be dedicated to working with finance and human resources to both train and/or recruit the right personnel for the department. It is critical to also note that the sixth month will require a financial review and evaluation of the achievements made to that point.
Budgets
It is expected that the Marketing budget will increase significantly due to this new plan. An approximation of an increase by 40% of the current budget purely for this plan is expected. The department does not anticipate a return on investment in the first year but expects the same from the second year of implementation of the plan. It is equally important to mention that the budget will cater for both direct costs and overheads as there will be training and new recruitment needs within the section. The budgeting needs of the department will not directly affect the pricing of the bank’s products.
Control
The management will access controls through thorough and reliable monitoring and evaluation tools. Several ideal matrixes will also be used to measure the success of the plan as depicted by its objectives. For example, the first year objective mentioned involves the increase of mortgage clientele by 10%. The goal in itself can be measured to determine how far the objective was achieved. However, smaller and more specific matrixes will be used to measure success as the first year rolls out. Financial monitoring and evaluation is also critical to determine how the budget that has been requested is being used, and how the activities done will ensure a steady return on investment. These evaluations will be done in two phases where the first phase will be the single team review. The single team refers to the individuals working on a specific activity as guided by the plan. The second phase will involve the departmental review that will also include the different departments identified in the action program coordination.