Royal Bank of Scotland

Task 01 & 02 - Marketing Audit & Main Barriers to Marketing Planning

Executive Summary

I have selected the Royal Bank of Scotland (RBS) to apply the marketing plan and to discuss the entire report format as follows. RBS is a well established retail bank which is having around 700 branches located in major cities in the England and Wales.

Under the report I have discussed major four areas. As the first step marketing auditing / situational analysis there are two major parts as internal marketing audit and external marketing audit. SWOT, 7 S, Value chain analysis mainly focus internal situations and PESTEL, Porters 5 Forces analysis are focussing external environmental evaluations.

There are lot of barriers are arising when we are practicing marketing management into the organisations. We have to find them separately and take immediate actions to overcome the situation.

Marketing plan formulation is the backbone of the marketing. Should be identified correct market segment, target audience and correct positioning strategy prior to the marketing strategies. After that can apply some strategies as porters three generic, Ansoff matrix and collect accurate findings from above mentioned marketing audit. By using these strategies should manage the marketing mix as product features, decide accurate pricing policy, and develop distribution channels, promotional methods in effective media. Under extended marketing mix should consider people, process and physical evidence.

Finally I have briefly discussed ethical issues in marketing. Throughout the report I have used several theories and accepted methods which are related to the marketing management. The entire report is relevant to the RBS and all presented data are as per the current marketing conditions.

Task 01 & 02

Marketing Audit & Main Barriers to Marketing Planning

1.1 Company Background

RBS is also facing lot of difficulties due to the economical recession and bad financial conditions in all around the Europe. This situation is badly affecting to the bank and should find perfect solutions in urgently. Therefore the bank is processing to develop a new strategic plan with giving priority to marketing activities. Because of the loss made in the last year the bank is implementing restructuring program towards five year strategic plan.
The vision of the RBS is to “Become one of the world's premier financial institutions, anchored in the UK but serving institutional customers here and globally, and doing it well''
Currently the bank is focusing activities on serving enduring customer franchises with competitive positions and targeting to earn above 15% return on equity. Also it is giving priority to each and every customer. Company is focus long term quality and profitability through customer loyalty.
* There are more than 40,000,000 customers globally under the RBS group (50%) in the UK.
* Financial industry experience from last 280 years
* Reputed brand image and well known sub brands
* Extensive geographical reach
Further I have discussed possible major barriers to the marketing under all marketing information gathering part and marketing implementation issues under the company's situational analysis.

1.2 Marketing Audit / Situational Analysis

1.2.1 SWOT Analysis


· Strong, established brand identity and the product has been in the market for several years.

· The features/benefits of the account are regularly refreshed so do not become stagnant.

· Our MI data is very robust for our online channel so we can learn a lot about our customer's.

· Large branch network and several mobile van branches so should customers want to they can see a branch Customer Adviser very easily

· Experienced sales staff, which will help drive sales forward.


· Sales of Royalties Gold have declined since the financial crisis began.

· The Royalties Gold account has a monthly fee attached to it, which customers may not be able to afford as a result of the recession

· The price for the account went up a year ago, which could put us at a disadvantage due to the recession

· Our MI data is quite weak for in branch and telephony and quite difficult to determine where the product was bought between these two channels

· Our overall marketing budget has been reduced due to the financial crisis, which in turn means the budget for MTA current accounts has been reduced.

· We have a vast number of Customer Advisers across our branch and telephony networks and the level of service can be inconsistent


· Loyal customer base and seen as a trusted brand in Scotland as RBS' reputation in Scotland is better, despite the financial crisis

· Our competitors are facing the same financial crisis so in turn will also have reduced budgets meaning that we aren't at a disadvantage to our competitors

· Stephen Hester's close involvement with the government allows him a degree of lobbying power

· We are number one in Scotland for customer satisfaction

· As RBS is a large international company there is the finance and opportunity to buy out some of our suppliers, which would save on costs in the long run.


· Our brand reputation and customer trust has suffered due to the financial crisis.

· Not so loyal customer base in England and Wales as the financial crisis has hit us the hardest in these regions

· Our competitors are offering similar products.

· Our customer satisfaction in England and Wales is quite low.

· As we do add a competitor clause to supplier's contracts it increases their bargaining power for higher costs and more preferable terms.

1.2.2 External Environment Audit

Micro Factors






· Third parties who provide the benefits of the account e.g. Green Flag and Thomas Cook

· Creative agencies

· Contractual agreements

· Financial health of suppliers

· How long has RBS been using these suppliers?

· Supplier costs

· Supplier contracts

· Supplier annual reports

· Group Purchasing

· Contractual agreements are likely to be confidential

· May be difficult to find out if competitors are using the same supplier due to privacy issues


· Customers

· Employees

· UK Government

· Creative agencies

· Recruitment agencies

· What involvement do the ‘publics' have in the RBS Group?

· How much does their involvement cost the bank?

· Customer and staff surveys

· The media

· Human Resources department

· Group purchasing

· Contracts and confidentiality agreements may be private or have restricted access

· HR data will be confidential


· Royal Mail and other distributors

· Online search engines and comparison websites

· Brokers

· What level of commission do RBS' intermediaries take?

· Are there any other costs associated?

· Group purchasing

· Finance department

· Contracts and confidentiality agreements may be private or have restricted access


· Individuals who are buying the account

· Independent Financial Advisers

· The number of Gold customers

· The number of RBS UK customers

· Why are they choosing RBS?

· Customer account data

· Customer surveys

· Sales data from each medium

· No incentive for customers to complete surveys

· The data may not be reliable or a valid sample of RBS' customer base


· Other banks e.g. HSBC, Barclays

· Post Office

· Supermarkets offering financial products e.g. Tesco and Sainsburys

· What are the products that they have on offer that satisfy a similar need to Royalties Gold?

· Where does Royalties Gold sit in the market compared with these products?

· Third party financial research companies e.g. Defaqto, GFK, TNS- to answer all questions

· Customer and staff surveys

· No incentive for customers or staff to complete surveys

· The data may not be reliable or a valid sample of UK financial customers

Macro Factors





Political and Legal

· Prime Minister and/or governing party

· VAT and other taxes

· Financial regulation

· RBS' relationship with the Government

· Differing policies in the Country

· Employment law

· Which political party is currently in power?

· What financial /economic policies are?

· What financial regulatory powers does the EU have?

· What are the current competition/monopoly laws,

· The media, e.g. newspapers, TV, websites

· The political parties PR departments or websites

· Financial regulators websites

· Interview your local MPs or MEPs

· Validity and reliability of information

· Access to some information may be restricted or not easy to find

· There maybe bribes/payoffs or corruption in the political system


· Unemployment

· Recession/economic boom

· Inflation/deflation

· Interest rates

· Global economies

· Unemployment s

· How are other economies in Europe and the rest of the world performing?

· The Office of National Statistics

· The media e.g. newspapers, TV, websites

· The information may not be up to date as economies fluctuate

· Information about other economies may be difficult to access

Social and Cultural

· The age of the UK population

· Changes in household incomes driving lifestyle changes

· Education levels

· Social mobility

· Average age of the UK population , historical trends and future predictions

· Social class statistics

· Education statistics

· The Office of National Statistics

· The media e.g. newspapers, TV, websites

· UK census

· Reliability and validity of information

· Information may not be up to date


· Internet security

· ‘Digital Britain' programme

· Increased use of remote channel banking such as online and mobile

· An ageing population

· What security measures are currently in place to protect users online?

· What changes or measures are being introduced as part of the ‘Digital Britain' programme?

· Internet service providers

· Bank websites

· The Government website

· The media

· Mystery shops of competitor branches

· Reliability and validity of information

· Information may not be up to date

· Internet security information may not be available


· Environmental protection legislation

· The need to reduce carbon emissions

· Switching to paperless statements e.g. online and mobile phone bank statements

· What is the current environmental protection legislation?

· What are the current carbon emission reduction targets?

· Are there any other environmental protection targets?

· Government website

· The media

· Public questionnaires, vox pops and focus groups

· RBS online banking MI

· Reliability and validity of information

· Information may not be up to date

· Competitor information will be difficult to obtain as it is likely to be restricted

1.3 Findings of Marketing Audit / Situation Analysis

As part of RBS' situation analysis and marketing audit, it can be identified that RBS UK Retail's distinctive competencies, or core strengths, and critical success factors are:

Distinctive Competencies

1. Strong brand identity

2. Large branch network

3. A variety of purchasing mediums e.g. in branch, online and telephony

4. Loyal customer base in Scotland

5. Experienced loyal sales staff

Critical Success Factors

1. Good brand reputation

2. Loyal customer base throughout the entire UK

3. Independence from the UK Government

4. Differentiation from competitors

5. Staff to be motivated and sell well, even with lower or no staff incentives

From the above it can be summarised that RBS has some core strengths to support its critical success factors e.g. strong brand identity for good brand reputation and loyal customer base in Scotland for UK wide loyal customer base. It however can be seen that RBS is only part of the way towards regaining success in the UK. It does not have all the necessary core strengths to support its critical success factors and therefore currently has poor short-term growth opportunity. Much of this is out of RBS' control as it is a result of the financial crisis and recession. Once RBS regains standalone strength and independence from the UK Government its brand reputation will naturally begin to recover resulting in increased trust and loyalty from customers, motivated staff and differentiation from its competitors.

Task 03

How to Develop a Marketing Plan

2.1 Objectives

RBS' main corporate objective is to rebuild standalone strength by 2013 with integrity, transparency and by serving its customers well. One of the core objectives within this is to maximise shareholder value by increasing ROE from -28% to +15% so that the tax payer can eventually benefit from its large investment in the RBS Group.

Within RBS' main corporate objective stems its core objective for the UK Retail Division to be Britain's most helpful bank by 2013. We want to ensure that we are helping our customers cope financially with the recession, at a time that they need it the most. This will be measured by national customer surveys carried out by leading financial research institutions such as TNS and GFK.

Following on from our key marketing objective are the five key areas of focus for 2009:

1. Focus on and reinvigorate our super brands - NatWest and RBS

2. Customer value management - focus marketing resource and budget on the highest value and highest potential customers

3. Customer marketing - create a communication platform that is needs based and carries multiple product solutions

4. Brand ‘retailer' model and better conversion of existing traffic potential

5. Invest in key customer segments

2.2 Segmentation, targeting and positioning

Royalties Gold is a mass market packaged current account aimed at the following segments:

* UK (excluding Northern Ireland)

* Women and Men

* Aged 25-50

* Taking home no less than £1,000 per month (after tax)

* Professionals

* Families

The account is primarily targeted at young professionals who are moving into requiring multiple financial products, for example first time buyers who will require a mortgage as well as home insurance and life insurance. The reason for this is so that we can establish multiple relationships with one customer, as this is ultimately more cost efficient than cold acquisition. This type of audience will be ‘savvy' with their money and understand that by paying just £12.95 per month or £156 per year they will receive benefits worth up to £908 (after the fee). These customers will also not be so price sensitive and will have a moderate amount of disposable income.

Internally we position all of our packaged accounts as ‘The Hub' of the bank as many of our customer relationships with other products come from these accounts. Externally we position Royalties Gold as ‘the helpful account that makes your money goes further'. Our customers see this as an account that provides ‘value for money' and some of our younger customers see it as a status symbol as the account comes with a gold debit card, larger cheque guarantee limit and larger potential overdraft limit.

My recommendations for improvement would be to target the family market more, as many of the benefits can be tailored to this segment e.g. the travel insurance that covers the whole family and accidental death benefit (should the worst happen to a loved one). Also I wouldn't recommend expanding the age range as we have other current accounts that are targeted at those outside of 25-50. I would also not recommend changing the ‘helpful account' position as this fits well with our brand message ‘Here for you' and overall UK vision to be Britain's most helpful bank.

2.3 Strategy

As RBS is banking giant it is reasonable for it to consider and implement multiple growth strategies. The two main growth strategies used for the UK Retail division are market penetration and product development. The reason for this is most of our UK products are mass market, therefore targeted at anyone over the age of 18, or they are specifically designed for one market or customer segment e.g. our teen or student accounts, so cannot be introduced to new markets or segments.

In the past we have used a diversification strategy whereby we launched Polish and Indian current accounts to Polish and Indian immigrants living in the UK and a market development strategy whereby we adapted our student account and introduced it to international students living in the UK, however given our current financial situation it is too risky for us to adopt these strategies in the near future.

RBS uses all three competitive strategies across its UK Retail division. As we are a large company we can afford to achieve cost leadership through economies of scale, e.g. our mortgages are often some of the cheapest in the UK market. We use the diversification strategy and try to add a unique selling point to all of our products, e.g. our teen accounts (Adapt and Revolve) come with a range of benefits that are suited to 11-18 year olds, all free of charge. None of our competitors offer this on their youth accounts. Finally on a select few of our UK products we adopt the focus strategy, where we are appealing to a wealthy niche market, e.g. our Private Banking service. Strict criteria must be met in order to qualify for Private Banking and as it is so exclusive with great rewards customers are willing to pay a premium price. For full information on growth and competitive strategies see appendix two.

2.4 Tactics (Marketing Mix)

2.4.1 Product

The core service of the Royalties Gold current account is somewhere to keep your money that you use on a day to day basis.

* A Debit Card

* Optional Credit Card

* Cheque book

* Statements

* Online/mobile banking

* A welcome pack providing all the account information

* Bank branches

* Staff

* Telephony customer support

* Transfer money between accounts

* Direct Debits

* Standing orders

* Pay bills

* Financial guidance/advice (advice on certain financial areas only)

* Account benefits (see appendix two for full list)

As Royalties Gold is in the maturity stage of the PLC I would recommend achieving short term rejuvenation by adding three or four limited edition account benefits that would only be available for a short period of time e.g. extra money off holidays, new benefits from our suppliers; for example in the past we have offered discounts at, which isn't a standard account benefit.

2.4.2 Price

When considering a pricing strategy for Royalties Gold it must be considered that we are not pricing this account according to what a customer is willing to pay to satisfy their need. It is priced according to what a customer is willing to pay to satisfy their ‘want'. The ‘want' that Royalties Gold satisfies is to save money on services that a customer will use in day to day life. Based on this the pricing strategy used is intermediate pricing. The reason for this is although customers get value for money, the account is of a certain quality due to the benefits it provides. Based on the benefits it provides it is the cheapest in the market, however there are other carbon copies offering fewer benefits for less than half the price.

As Royalties Gold is the cheapest in the market based on the benefits offered I would not recommend changing the price. For full details on pricing strategies see appendix two.

2.4.3 Place

RBS adopts a dual distribution strategy for Royalties Gold whereby 90% of accounts sold are in its branches, 5% are sold via its telephony support route and 5% are sold online, either through direct traffic or price comparison websites. It operates an intensive strategy for its direct distribution, where accounts can be opened at all its branches; however for its indirect distribution, via price comparison websites, it operates a selective level of intensity, whereby Royalties Gold can only be found on certain price comparison websites.

RBS has vertical backward integration whereby it controls many of its suppliers, for example RBS owns Green Flag, which supplies one of the key benefits, car breakdown cover, of the Royalties Gold account. RBS also operates horizontal integration whereby it owns a number of affiliate companies which help make distribution of products and services more cost and time efficient, for example in the UK alone it also owns NatWest, Direct Line, Churchill, Lombard, Mint and operates joint ventures with O2 Money, Aviva and Tesco Personal Finance (TPF - only for a 2-3 more years while the handover is in progress).

My recommendation would be to only change the distribution strategy by adding in more price comparison websites and becoming a sponsored link on those sites. I would also recommend becoming a sponsored link on Google so that whenever a customer searched for ‘current account' or ‘packaged account' then our website would be one of the first to come up.

2.4.4 Promotion

We currently only do above the line advertising in Scotland so as not to compete too much with our NatWest brand in England and Wales. Due to our current financial situation and poor reputation we are also doing a lot of profile TV, press and outdoor advertising to rebuild our brands reputation, strength and customer loyalty. For this reason we are not doing any RBS product advertising on TV until we are confident that we have regained customer trust.

For Royalties Gold we are currently operating a mixture of push and pull promotional strategies. For our pull strategy we primarily promote Royalties Gold through a combination of cold and warm acquisition direct marketing to non-RBS customers as well as RBS customers who hold another product with us. As well as in-branch posters, leaflets and additional merchandise, such as sashes and badges, and online and press adverts (in Scotland only for press). We do this to drive demand and traffic into our branches, to our telephony centres and on to our website so that customers are enquiring about Royalties Gold. For our push strategy we use internal marketing to promote the benefits of Royalties Gold to frontline staff and encourage them to sell the account, with a mixture of training packs, DOFT sessions (training sessions run by branch managers) and target driven sales incentives.

I would recommend keeping our promotional objectives and push, pull and profile strategies the same as Royalties Gold is a mature well established product therefore we don't need to inform customers too much about it and due to financial regulatory rules we can't undertake too much comparative marketing whereby we're openly differentiating ourselves from our competitors, e.g. like Asda does on it's TV adverts comparing how many lower priced branded products it has with Tesco.

2.4.5 People, Process and Physical Evidence

As Royalties Gold is an intangible service we need to add additional aspects to overcome the four main limitations of services, intangibility, inseparability, inconsistency and perishability. Our staff are given excellent training and have different defined roles so that customers can differentiate who they should buy the products from, who they should do their day to day banking with and who they should complain to, helping to overcome inseparability. Most of our branches are of good quality to match our brand image and those that are not are currently going through a branch improvement programme. We try to have robust processes in place so that customers can conduct their banking and buying in a fast and convenient way. We are currently in the process of automating many of our processes which will eliminate waiting times and inconsistencies in staff service.

My only recommendation would be to improve staff training by adding sales and service workshops that staff can attend so that inconsistencies in service and selling are reduced whilst we are under taking the roll out of our automation programme.

Task 04

Ethical Issues in Marketing

I would like to discuss ethical issues arise in the Marketing Mix as follows;


* Should protect identity and privacy of each customer

* How valid or reliable will the staff and customer's answers be?

* The customer data may not already exist

* Budget restrictions or possible limited budget for the commissioning of research, if the data doesn't already exist

* It will be very time consuming to collect and sort the data

* Validity of data (up to date) and relevant?


* Should accept general financial policies

* Provide tax information and protect financial and fiscal policies

* How valid or reliable will the customer's requirements


* Socially acceptable distribution methods.

* How valid or reliable will the customer's answers are?

* Access to competitor data may be difficult and not acceptable

* Is the data up to date and relevant?

* Does the MI data even exist?


* Marketing plans may not be available for all years since the product was launched

* Should not do over promises through promotions

* How valid or reliable will the customer's answers are?

* Capturing competitor promotional strategies and response.


* Recruit experience staff members from competitors.

* As staff bonuses/incentive schemes at banks are a contentious issue both internally and externally, this could be difficult to obtain

* The information on staff could be confidential and may not be electronically stored so very timing consuming to analyse

* The information on staff could also be out of date


* Should be efficient and effective without wasting time.

* Comparison with competitor processes

* Competitor date may be difficult to obtain

Physical Evidence

* Should use socially acceptable retail banking physical look

* Cannot directly approach any industrial competitor


I would like to suggest that all recommendations given under each strategy, auditing methodology and other findings. Also it is necessary to implement proper controlling process tor and throughout the marketing strategy implementation.

Marketing budget should be based on each core factor and specifically define. There are some milestones can be fixed based on the each marketing objective. We can use some financial ratios to measure the progress of the marketing approach and measure the success of the time frame.

Finally I would like to suggest conducting comprehensive marketing audit which is focussed on the entire marketing approach of the RBS. The bank can outsource the research to outside research agency.


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