. BSBMKG502 - ESTABLISH AND ADJUST THE MARKETING MIX Scenario: You are working f

Question

. BSBMKG502 - ESTABLISH AND ADJUST THE MARKETING MIX Scenario: You are working for an organisation that sells financial services which include insurance, superannuation, investment portfolios, retirement fund management etc. By comparison with competitor companies the cost of the services is quite high. They are located in the central business district. The marketing mix for the organisation includes advertising on television and they have a website customers can go to gather information. Consumers are expected to respond to the advertising and internet messages by contacting the company to organise a time for face-to-face interaction. The number of contacts has been very low lately and the organisation’s marketing objectives are not being achieved. The marketing manager is considering making changes to the marketing mix and has called you all in to the boardroom to present monitoring data and analyses and to discuss options. As a result of the discussion it is decided to isolate components of the marketing mix for testing, and evaluate the implications of altering one or more components of marketing mix in relation to market factors and consumer response. How would you do this? What data might be presented and what options might be looked at? Give sound reasons for your answers. What actions might be taken to change the marketing mix and why might this be necessary? Consider price, product, promotion and place. How do you think this would help? (200 words)

Explanation / Answer

Competition in our segments is based on a number of factors including scale, service, product features, price, investment performance, commission structure, distribution capacity, financial strength ratings and name recognition. We compete with a large number of financial services companies such as banks, mutual funds, broker-dealers, insurers and asset managers. Some of these companies offer a broader array of products, more competitive pricing, a greater diversity of distribution sources, better brand recognition or, with respect to insurers, higher financial strength ratings. Some may also have greater financial resources with which to compete or may have better investment performance at various times.

        Competition in the retirement services market is very fragmented. Our main competitors in this market include Fidelity, ING, Mass Mutual, Vanguard and John Hancock. We believe the infrastructure and system support needed to meet the needs of the small and medium-sized business market is a significant barrier to entry for our competitors. Many of our competitors in the mutual fund industry are larger, have been established for a longer period of time, offer less expensive products, have deeper penetration in key distribution channels and have more resources than we do. There were over 8,000 mutual funds in the U.S. as of December 31, 2007, according to the ICI 2008 Investment Company Fact Book. The institutional asset management market has grown at a rapid pace over the last decade. Our primary competitors in this market are large institutional asset management firms, such as Black Rock, PIMCO, J.P. Morgan Chase, Morgan Stanley Investment Management and T. Rowe Price, some of which offer a broader array of investment products and services and are better known. The asset management business has relatively few barriers to entry and continually attracts new entrants. The variable annuity market is also highly competitive. We will face strong competition from Lincoln Financial Group and John Hancock. Competition in the international markets in which we operate comes primarily from local financial services firms and other international companies operating on a stand-alone basis or in a partnership with local firms, including ING, AXA, Allianz and American International Group, Inc. ("AIG"). In the highly competitive life and health insurance business, our competitors include other insurers and managed health care organizations such as UNUM, Lincoln Financial Group, MetLife, Manulife, Blue Cross and Blue Shield, UnitedHealthcare, Aetna, and CIGNA. We believe we distinguish ourselves from our competitors through our:

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