Sms Banking Marketing Plan

BankMuscat is I well known bank in Oman and consider the best financial organization and the winner of 8 in raw as “Bank of the year” (Times of Oman 2010). It provides large banking services which fulfills most country demands including consumers, businesses and government. The main divisions of the bank are retail banking and wholesale banking. Within these divisions there are E-channels which are call center, ATM, CDM, cards, Internet and mobile banking.

The demand for electronic banking services is increasing since Oman strategic is to convert the conventional system to E-government (e.oman 2010). While these changes in country is ongoing, most of organizations adapting to go electronically in order to compete in the market. BankMuscat is one of the leaders to adapt new innovative technologies which make them step ahead from other banks.

An opportunity exists for SMS banking for two reasons:

None of other banks yet provided transactions over SMS while BankMuscat SMS banking existing system support this feature.

Expand the language to Arabic in SMS banking to cover existing BankMuscat customer of non-users of SMS banking.

All other banks local not offering this type of services and they only were providing informative SMS banking rather than interactive transaction (Ecommerce Journal 2009). Our new service in existing SMS banking will lead the market since BankMuscat has a large portion of market share of customers. The current stats show a large usage in electronic services and people become more technology aware. The stats shows also huge increase in the number of registered customers with SMS banking and comparing total registration in 2009 by 110,099 while in 2010 the total registration as of month of November is 134,926 (appendix 1,2). Moreover, the increase also occurs in the usage of the service comparing it by last years and also comparing it with monthly transactions, 1,118,826 request in 2009 and 1,430,399 requests in 2010 (appendix 1,2). With all this increase if we applied the new services like transactions over SMS and Arabic enabled interface we will lead the market for years. This also will increase our commission profit for each SMS sent by customer and will attract more service providers to use our SMS banking service as a channel for bill payment.

Our target customers will be all type of customers’ capable of using mobile phones to send SMS. The rapid increase in cell phone market with cheap prices and good rates of service providers is our key of success. Also the growth in Oman and increase the percentage of roads traffic is changing the habit of customers of paying for their bills and prefer to do all this at their home at own suitable time.

Situation Analysis

In order to build good relationship with our all stake holders we have to understand our environment forces around all our relationships. In the next section I will describe BankMuscat Internal and external environments along with their analysis.

External environment (Mic, Mac)

As a bank its obvious other local banks are our competitors and the main force and we will analysis this with Porter’s Five forces analysis.

Porter’s Five forces

Competitive Rivalry: our rivalry banks are HSBC because it’s an international well known bank and locally NBO which the second successful bank in Oman. Both are very adaptive to the technology and always competing.

Threat of entry: misuse of SMS banking services may raise law issues which interferes the service as what happened to the NAWARS tel. bill payment portal shutdown by force of law. Also there is threat of leaks this new service to our competitors before launching will make a bad image of BankMuscat is imitating others initiatives.

The power of buyers: Our customer will intend to use the SMS banking service a lot because they are directly transfer amount from their account to utility bills which is easer from withdrawal money from bank and then visiting utility providers’ outlet to pay their bills.

The power of suppliers: since our utility providers are a few companies so there is limited of suppliers which will offer to market for their utility payments exclusively to BankMuscat because of the huge number of customers dealing with.

The Threat of substitutes: the major threat is using the other channel which internet banking since it’s become more popular because the government encourages this initiative by name of E-government.

Since we analyzed the microenvironment by using Porter’s analysis we also require doing another analysis in macro environment by using PEST analysis.

PEST analysis

Political Factors: Telecommunication Regulatory Authority may set rules and standards in order to protect the users from fraud by which will make the process of using SMS banking more complicated for users.

Economical Factors: after the recession which happened during end of 2008 the market growth increases again in 2009 recovery stage and in 2010 most of companies started to gain profits (Oman Observer 2010). This increased the salaries and buying power from customers. In other hand, BankMuscat makes good profit in the three quarters of 2010 by increase in 26% (Sharif 2010) which allowed increasing the budget for department for development.

Social Factors: The resist of change is one of the culture factors that are facing the banking developments. Some of interior customers still prefer to pay their bills by visiting the utility providers. But the good thing is our Arabic based SMS banking will capture those who don’t want to use other language to do their transactions. The go green campaign which sponsored by many environment organizations and with support of government is focusing in reduce papers in businesses and here comes SMS banking as free papers service which is widely accepted as eco-friendly.

Technological Factors: SMS banking has good opportunity because the bank strategies are to change the attention from visiting branches to do banking services remotely (BankMuscat 2009). Most companies prefer to do their transactions without using papers and this good sign change customer’s behavior towards our new electronic services. The availability of mobile coverage and the range of choice with cheap prices all adding value for using SMS banking as first alternative.

SWOT analysis

After we captured the information for from external environment we will use it in our SWOT analysis as opportunities and threats.

Strengths

Current system already has the function for bill payments

Current system is the latest in market

Current system has the capability to add additional languages

Management are very adaptive for new changes

Low cost upgrade

Weaknesses

Limited IT staff for implementation

Third party software needs support from vendor

Other departments not support in marketing of other products

Opportunities

Fastest bills payment with one step from account to utility provider.

Easy to capture more utility providers because of large base of customers in BankMuscat

Gain the market of non-English users

Government support and collaboration for new technologies

Threats

International banks are more advanced in technology

Law enforce in case of misuse of this service by customers

Internet banking may attract big portion of SMS banking customers

Marketing Objective

BankMuscat vision statement “Over one million satisfied customers by 2010 through continuous enhancement of stakeholder value”. In pursuit for customer satisfaction and comply with BankMuscat vision our new SMS banking system will fill the thirst of customers who deserve to get unique services at any time anywhere with no hassle of waiting.

Target Market

To get deep inside to our target market we will be using market segmentation process analysis.

1-Segmentation Variables

Geographic: since SMS banking is mobile technology based service, so there is no limits because it depends on the coverage of mobile network operator even its support international rooming. The Arabic based SMS is targeting customers especially in rural areas which they are not able to deal with English language.

Demographics: Targeted market customers with age range 18-65 years old both genders who are working in job or having business with all range of income with small level of knowledge in using mobile devices.

Psychographic: Targeted market customers can be any lifestyle orientations with personality open minded

Behavioral: Common variables of this segment are customers prefer easy and fast way of bill payment for medium usage in monthly rate and heavy usage for account enquiry. The user status can be ex-user, nonuser, potential user and existing user.

2- Market segment profile

After analyzing the market variables we will now gather the common share of who, what and why to build segment profile. Our customer looks like any gender between 18-65 years old living anywhere having account in BankMuscat and using text messaging of our local mobile operators with sufficient knowledge in using mobile devices. Our customers appeals to do their bill payments at any time faster than any service with both local and English languages. Customers who want to make their bill payment easier and faster on monthly basis in case of bill payments and frequently in case of account quires. Our customer needs are to provide them with fastest one-click anytime and anywhere with free of charge bill payments service, also at their convenient language.

3-Targeting strategy

Our marketing strategy will use a mix of undifferentiated and concentrated strategy. SMS Bill payment will satisfy any BankMuscat account holders who is having local mobile operator. But also our strategy will concentrate on special targeted customers who want to use SMS banking in Arabic version.

4-Evaluate of market segments

Currently the total registered customers for year 2010 are 110099 by comparing to 2009 was 981120 which we estimate the increase by 25% because of the new service and additional language. There is no comparison with other banks because this is new service to market. The cost will only occur in implementation stage because of the system upgrade, Ads, brochures and banners.

5-Selecting target market

Based on the overcome of the targeting strategy and along with BankMuscat vision we will use the mix of undifferentiated and concentrated marketing strategies to increase the usage between existing customers and to capture potential customers of our competitors to reach and exceeds the satisfactory levels.

6-Market positioning

We are offering our new service to our main two segments, existing and new customers who will use their mobiles’ SMS for the first time to do transactions which no other banks in Oman provide such service for their customers. The second segment is to provide existing SMS banking service and SMS bill payment service in Arabic-based for remaining BankMuscat account holders. Like before this is new service which our customers will experience exclusively.

7-Developing marketing mix

The next section we will be describing the marketing mix

Marketing Strategies, 7Ps

-Product: Our product is upgraded SMS banking service for account query and bill payments with both English and Arabic interface.

-Place: SMS banking service can be accessed by any BankMuscat accounts holders using their mobile phones through our local mobile operators locally or international rooming.

-Promotion: Ads will be announced in newspaper radio stations and BankMuscat web site before launching to keep the customer informed for the new service launching and after launching. Brochures and banners will be distributed to all branch channels and ATM/CDM.

-Price: SMS banking will remain free of charge service and only customer cost is for SMS as normal cost rate of sending SMS from mobile phone to another.

-Physical evidence: Customer will get confirmation SMS after the transaction with transaction code for reference. Customer can use their account statement as a record for their transactions.

-Participants: Customers will get support by direct interaction with call center agents and branch staff.

-Process: The service will be monitored by usual function in the bank core system with status of the customer. SMS banking team and billing team will have the access to daily reports of the transactions.

Budget

The budget for the project will divide into upgrading the system and marketing for the service. The system upgrade will cost OMR 55,000 including support from vendor. The second part is for publishing Ads through media newspapers and radio stations and this will cost OMR 13,000. Last part is for printing brochures and banners, which will cost around OMR 25,000. There will be yearly budget for the rewards of the best selling branch. Part of the budget we will get it after the approval from the management. We have good confidence in our management to support the new project as Sheik Abdul Malik Chairman of Bankmuscat described that BankMuscat is welcoming any opportunity to develop pioneered products and services meeting the market changes (Letha 2010).

Implementation

The action plan is represented in a timeline schedule in next page and will shows each activity time and assigned department with the managers of that activity

Evaluation and recommendation

Once we end with timeline of the project we will take deep insight view of how our new system is effectively meeting our goals. As we are providing a service we will have to depend on the reports of the system providing. The system will allow us to see for each branch how much registration they made in point of time. We will compare these reports by same month of the previous year to see the percentage of increase. Monthly we will extract reports of the number of bill payments starting from the launching moth of July and onward to see if the increase is happening from month to month. We will also check the payments of each of bill type and to see where the bill type is needs more attention to boost the sale of it. In case there is system failure easily our IT team are ready to switch the system maintenance mode which will stop any interaction with customers SMS and will send default replay as “the system under maintenance please try again later”. If the problem is persist in bill payment facility then we can disable this feature temporary and keep the normal account query facility working until we fix the problem. The bill payments complaint will be handled by bills team and to update any payments with utility provider. So the customer will not need to contact both the bank and the utility provider since we will do all the necessary actions to solve the customer’s issue.

Reference:

Times of Oman (2010) ‘BankMuscat wins top Banker award’. Times of Oman [online] 14 December 2010. Available from <http://www.timesofoman.com/searchdetail.asp?cat=&detail=40548&rand=k78uVOv8QOKYqI9oSfHNhKBRSu> [23 December 2010].

ITA (2010) ITA Vision [online] available from <http://www.oman.om/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hjA3cDA39LT1_vEF9HAyPjMDcvSx8zYxcXE_1wkA6zeAMcwNFA388jPzdVvyA7rxwA7n6oRg!!/dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfMzBHMDBPOUlNNFNWMTAySkZENThTNzJHMDc!/> [23 December 2010]

Ecommerce Journal (2009) ‘Electronic banking in the Sultanate of Oman’ Ecommerce Journal [online] available from <http://ecommerce-journal.com/articles/15282_electronic_banking_in_the_sultanate_of_oman> [23 December 2010]

Oman Observer (2009) ‘Oman’s economic fundamentals remain strong’. Oman Observer [online] 05 July 2010. available from < http://main.omanobserver.om/node/15296> [23 December 2010]

Sharif,A. (2010) ‘Bank Muscat Third-Quarter Net Income Increases 26% on Lending’. Business Week [online] 14 October 2010. Available from < http://www.businessweek.com/news/2010-10-14/bank-muscat-third-quarter-net-income-increases-26-on-lending.html> [23 December 2010]

BankMuscat (2009) BankMuscat widens reach of easy-to-use mobile banking service [online] available from < http://www.bankmuscat.com/en-us/PressReleases/Pages/pressreleases209.aspx> [23 December 2010]

Letha,J. (2010) ‘True leader’. Business Today [online] 01 Jun 2010. Available from <http://www.businesstoday.co.om/Archive/disCon.aspx?Cval=808> [23 December 2010]