SERVICES MARKETING:

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SERVICES MARKETING

• RIVERSIDE CREDIT UNION CASE STUDY
• Presented to Ms. Gerona McGrath
• Presented by Adam Edwards
• Nathan Barrett
  
• Matthew Walsh
• Ross Foley
• Andrew
  Spurrell

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Whats the Issue?

• How can the customer segmentation analysis of
  Riverside Credit Union be used to determine
  individual member profitability, future
  profitability, and behaviour in order to promote
  cross selling?

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Goals Objectives

• Prevent further market share erosion
• Continue to emphasize relationship selling
• Determine the most profitable segment
• Determine the segment with most future potential
• Investigate member behaviour

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Internal Analysis

• How important are certain members of the Credit
  Union with respects to growth potential?
• How can the Credit Union benefit from paying
  particular attention to particular members?
• What has the Credit Union been doing to date?

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Internal AnalysisProducts

• Mortgages
• RRSPs
• Lines of Credit (LOC)
• Credit Cards
• Terms
• Loans
• Etc.

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Segmentation Results

• Segment 1
• Segment 2
• Segment 3
• Segment 4
• Segment 5
• Segment 6
• Segment 7

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Segments Results

• Segment 1 generated the highest average profit
  while using the most products per member
• Segments 6 and 7 had lowest average profit and
  cost money to serve
• Oddly enough, the majority of negative
  profitability were in Segment 4

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Internal Analysis
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Riverside Credit Union Marketing Mix

• Product
• Price
• Promotion
• Distribution (Place)

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Product

• Core service
• Intangible
• As a service, the product is not easily separated
  from the sales people.
• Heterogeneous Numerous products offered

• Everyday banking services loans,
  checking/savings accounts, etc.
• Also other products such as RRSPs, lines of
  credit (LOC), term deposits, etc.

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Price

• Characteristics of services (perishability,
  fluctuating demand) make it hard to pin point
• Can be based on competition
• Usually very price sensitive customers
• Different prices for the various services
  provided

• The idea of value is hard to define
• Will vary from customer to customer
• Customers need to feel that they have received a
  certain level of value from a product, based on
  the price paid for it

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Promotion

• Generally low key, non commercial ads
• Usually information pamphlets/brochures
• Now moved into the internet as well
• Some specials/sales advertised with reduced rates
• Some tangibles, such as a logo are a must

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Distribution

• Happens in-store
• Direct distribution
• Through salespeople
• No shipping
• A very short distribution chain

• All interactions occur either in person, over the
  phone or through technology (internet, ATM)

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What should be promoted?

• Focus on their strengths and stars
• RRSPs
• LOCs
• Term deposits
• Loans
• Mortgages

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External Analysis

• Demographic
• Economic
• Socio-Cultural
• Competitive
• Technology
• Political and Legal

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The Goods-Services Continuum
Riverside Credit Union
frozen foods
clothes
vehicles
carpets
restaurants
cleaning, dentistry
air travel
insurance, teaching
MOSTLY GOODS
MOSTLY SERVICES
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SWOT Analysis
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Growth Analysis

• What segments should Riverside Credit Union
  Target for Growth?
• Segments 1 through 4!

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(No Transcript)
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Questions?
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Alternatives

• Alternative 1 Conduct a full internal/external
  initial study
• Alternative 2 Focus more on members with
  greatest potential in growth (segments 1 through
  4)
• Alternative 3 Develop new image/approach
  towards young adults and those involved in post
  secondary education
• Alternative 4 Offer many different
  options/packages for all different segments
  within Riverside Credit Union

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Which segments do you need to protect from
competitors?

• Segments needed to protect from competitors
• Segment 1 They are members with the greatest
  profitability
• Segment 4 They are the members with the most
  potential for growth
• Realistically, and in relation to alternative 4
  Riverside Credit Union should protect all
  segments of the credit union (Status Quo)

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Status Quo

• Alternative 4
• Will not change much with respects to customer
  service and products available
• Not much potential to significantly increase
  profitability and assets
• Makes room for other potential competition who
  offer more change
• Continue to just focus on members with the most
  profitability

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Analysis of Alternatives
Alternative
Objectives Met
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Analysis of Alternatives
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Four Rs of Service Marketing

• Retention
• Referrals
• Relationships
• Recovery

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Recommendations

• Focus on Segments 1 through 4
• For Segments 1 and 2 promote RRSPs, LOCs, and
  Terms through personal selling
• For members in Segments 3 and 4, teach them about
  higher margin products

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Implications for Implementation

• The marketing team at Riverside Credit Union
  should
• Teach about higher margin products
• Consistently provide excellent customer service
• Reach out to members who show potential in the
  business community

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Questions?