Marketing mixture is required for an organization to plan and implement all new marketing strategies and tactics. There are four important elements in planning a marketing mixture: product, price, place, and promotion. Each of these elements are vital in developing, and implementing the plan. In this paper, one can see how Bank of America implemented a plan to increase new customer accounts.
Elements of Marketing Mix
Marketing mix is the position of controllable, strategic marketing tools that the organization uses to produce a reaction it wants within a target market (Perreault, Cannon, & McCarthy, 2009, p. 51). Marketing mix consist of the “four Ps”: product, price, place, and promotion (Perreault et al, 2010, p. 51).
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Product is the goods or services that the organization is offering to the consumer. For example, Dell will allow the consumer to custom build a computer on their website. Dell then builds the custom computer according to the choices the consumer has made. Next, the computer will be tested and shipped to the consumer. Multiple pieces of hardware went into this computer, and it comes with a one-year manufacture warranty. The warranty is equally a part of the custom computer as the computer itself.
Price is the cost in which the consumer is willing to pay for the product. For example, a car dealership has a suggested retail price. However, very rarely do they sell a car at that specific price. Most consumers will negotiate a lower price to suit his or her needs, wants, and desires. This would include “offering discounts, trade-in allowances, and credit terms” (Perreault et al, 2010, p. 51). In doing this, the dealership is altering the price of the automobile to the competitive circumstances and then the consumer chooses whether to purchase a vehicle from that particular dealership.
Place “includes company activities that make the product available to target consumers” (Perreault et al, 2010, p. 51). For example, chain restaurants that are independently owned, and operated by investors rather than by the organization. The chain restaurant organization chooses to allow these investors to run independently owned locations and they support them 100 percent. The chain restaurant trusts that the independent owners will run his or her restaurant just like any other chain restaurant that the organization may own.
Promotions “means activities that communicate the merits of the product and persuade target customers to buy it” (Perreault et al, 2010, p. 52). These actions are the organization’s way of offering discounts, rebates and lower rates to entice the consumer to buy a product from a specific organization. For example, when applying for a car loan, dealerships will offer additional incentives if the consumer finances with the manufacturing bank, if he or she qualifies rather than the consumer bringing his or her own financing with them. Some incentives are a lower interest rate or a zero percent interest for the term of the loan.
Four Elements affect Organization’s Marketing
The four elements affect the marketing strategy and tactics for Bank of America in its desire to bring additional accounts to the organization. The product could be any of the following: eBanking, personal checking, personal savings or CDs, business checking, business savings, car loans, home loans, lines of credit, credit cards, online services, investments, and military banking. The place would be at every banking center nationwide. The price would include what Bank of America is willing to pay for all the advertisement on television, billboards, online, and signs within the banking centers.
Promotion will be the biggest incentive to bring more customers to Bank of America. The promotion offers seen have been to apply for a Bank of America Credit Card either secured or unsecured and link it to his or her checking account for overdraft protection. Customers are required to have Secure cards if they have a low credit score or no credit at all. Customers will use these types of cards to rebuild or establish credit.
Another incentive to entice the new customer to open a Bank of America credit card is “Card members earn points that can add up to savings on a variety of BofA services — ranging from 10 points for $10 off monthly checking fees to 400 points for a 4 percent reduction on their BankAmericard interest rate” (n.a., 1998). Bank of America also offers a customer referral of $50 if an existing customer suggests Bank of America to a perspective customer and he or she tells the personal banker while opening his or her account. Bank of America will give the existing customer $50 after the new customer account has been open for six weeks and is in good standing. [pic]
How Each Element Is Implemented
Marketing implementation “is the process that turns marketing plans into marketing actions in order to accomplish strategic marketing objectives” (Perreault et al, 2010, p. 54). Implementing a marketing strategy can be difficult at times. It involves who, where, when and how the organization is going to put these elements into place and follow through to make sure that they succeed. In order for Bank of America to increase the number of new accounts, it is going to take a mixture of the elements to be successful, as well as the right staff implementing them. If the staff believes in the organization, he or she works for then so will the new customers.
The elements: product, place and promotion will show the new customers what Bank of America is offering as incentives to draw in the consumer to want to bank with the organization. For example, “eBanking is only one of a number of new and forthcoming solutions that will allow Bank of America customers to choose how they want to bank with us, as well as how they want to pay for the service and products we provide” (n.a., 2010). This is not an easy decision for some consumers. They may have banked with the same bank most of his or her life and choosing to bank with a competitor bank can be difficult decision for them. For example, my in-laws have banked with Washington Mutual for as long as I have known them.
While employed at Bank of America, I did my best to convince them that they should switch banks. They had better rates, more incentives, and better customer service. They were very unhappy with their bank but refused to consider a different bank simply because they had done business with them for so many years. Customer loyalty is a hard factor to break, but here is where Bank of America’s referral program comes into play. If a friend were to tell you about how excellent, their bank is and how happy he or she was with them, the perspective customer may consider that bank if he or she was unhappy with their current bank. Price is primarily decided by the organization’s budget and how much money is allocated for the organization to build up new customer accounts.
Organization and Industry
Bank of America is one of the leading financial institutions in the nation. Bank of America’s customers are “individual consumers, small- and middle-market businesses and large corporations” (Bank of America, 2010). Within the United States, Bank of America serves in the region of 57 million consumer and small business associations with 5,900 retail-banking offices. At this time, Bank of America services customers in approximately 40 countries worldwide. Bank of America does its best to stay ahead of the competition, by continuously reviewing their marketing strategies and tactics. Some of Bank of America’s competitors are Chase Bank, HSBC, Wells Fargo, as well as local banks and credit unions.
For Bank of America to be successful at implementing a marketing mixture, the organization must take all the right steps to plan it out first. The four P’s product, price, place, and promotion set a good basis for implementing this plan. Understanding how the four P’s will affect the development for the strategies and tactics to help the organization make its plan are essential if the organization wants to be successful. In addition, by understanding how each element will be implemented will leave little room for error. Bank of America continues to come up with new strategies and tactics to keep them as one of the worlds leading banks.