Marketing Strategy Essay: Redesigning Strategy for Commonwealth Bank
Question
Task: Designing a marketing mix (product, price, placement and promotion) is one of the critical challenges for marketers, especially implementing a balanced combination of each component. This is even more challenging for services products because of their intangible characteristics. So/For this reason, marketers need the “extended marketing mix” components (for example people, process, and physical evidence) for services product marketing.
Considering the current crisis created by the Covid-19 virus, write marketing strategy essay on how service producers in Australia (for example Commonwealth Bank or Flight Centre) should redesign their services marketing mix.
Answer
Introduction
Marketing mix strategy is one of the important process that is adopted by service sector to attain customer loyalty. Marketing mix process focus on planning set of activities that can help them attract customers and build relationship with them. According to Rumiyati and Syafarudin(2021) marketing mix practices allow the service organizations to achieve their objectives by understanding the needs of the customers affecting their choices. Unlike product marketing companies the service companies focus at accomplishing their success through 7Ps of marketing mix rathe than just 4Ps. This is because the service companies focus on process, people and physical evidence as an integral factor to provide their service to the customers in the most efficient way. For a company to offer best service it is important it plans out the process and place of delivering the service along with the areas in which the customers can find the products.
The essay aims at analyzing the ay covid-19 has impacted the service sector and the way service producers in Australia should redesign their service marketing mix by taking into consideration the extra 3Ps of marketing mix. The essay takes into consideration the two known service providers of Australia that is Commonwealth Bank as example for demonstrating the redesigning strategy under crisis situation.
Discussion
Covid-19 crisis has caused huge impact on the businesses by reducing their sales to making them change their business models and approach. Moreover, during the crisis the businesses has gone through rapid change and this has made it necessary for the businesses to plan and implement new strategies that can help them manage the customers. This has made it necessary for the companies, especially service firms to redesign their marketing mix strategies to effectively manage the negative impact of the crisis on the businesses. Covid-19 has also changed the way companies generate their revenues and run their operations or interact with the customers. This is because with the rise in covid-19 virus the focus of the customers has shifted to other products and services to urgent and necessity services that can help them protect and fight the virus (Seetharaman 2020). Adapting such changes in needs is highly challenging for the businesses and offers them both opportunities and threats.
Covid-19 virus has offered various kinds of opportunities to the service companies like commonwealth Bank. The virus has led to the emergence of new trends in the business that will be in high demand among firms post covid-19 world. Crisis has resulted huge demand for automation of services as the companies will try to reduce the costs. This will increase the opportunity for service companies to attain greater efficiency and gain control on their processes. Moreover, the virus has increased the opportunity for the service companies to work remotely with the customers during the crisis so that they are able to meet the needs of the customers (Othman et al. 2019). Further, the virus has given opportunities to the service businesses to be flexible in their processes and function to safeguard their costs and increase their value. This opportunity will help in safeguarding the profit margin of the businesses. This is because with the rise of the virus customers are demanding more health related and necessity services than leisure services. Similarly, companies have also planned to change their focus towards offering services and products that meets their necessity needs. Moreover, service and engagement are now demanding development of omni channel service strategy, automate service processes, digital services and customer service integration (Pwc 2021). Thus, the service marketing mix should be redesign keeping these opportunities into consideration.
Along with the opportunities the virus increase has also possessed various challenges for the service companies. Virus has led to the need for emergency pricing rules that focus at changing service pricing according to the demand. This make it challenging for service companies to analyze the ongoing payment ability of the customers and formulate new pricing strategies (Pwc 2021). Moreover, there has been increase in the risk for market consolidation where weak players in the market are being acquired by stronger competitors. Additionally, the crisis has changed the dynamic of the market and thus the service companies has to indulge in new analysis of the market to enable reactivation of the customers and calibrate targeting activities (Othman et al. 2019). It had become challenging for service businesses to speed up their technical abilities and implement app-based services rather than face to face service delivery.
Seeking to the opportunities and challenges that the covid-19 crisis has created for service sector it has become highly important for the service producers in Australia such as Commonwealth Bank for example to redesign their service marketing mix by focusing on these new opportunities and overcoming the challenges. One of the famous banks of Australia needs to redesign their service marketing mix in a way so that they can meet the new opportunities and needs of the customers and prepare themselves for such emergency situations in future. One of the major factors for service companies like Commonwealth Bank in Australia is to win the trust of the customers amid the pandemic when the customers are facing huge negative consequences. The service marketing mix should focus on encouraging the customer trust through various strategies over different factors of marketing mix. However, the marketing mix factors in service sector is expanding to other factors along with product, price, promotion and place and now includes other three elements such as process, people and physical evidence (Pwc 2021). Thus, the service producers in Australia for example the Commonwealth Bank will now have to redesign its strategy based on all 7Ps.
Product
The major product of a service-based company in Australia like the Commonwealth Bank is the kind of services it offers to the customers. With the crisis caused by covid-19 the service firms need to focus at rapid development of their information technology and initiate automation. Moreover, the service sector should also expand its services to emergency areas to support pandemic needs (Pwc 2021). Even if face to face communication between the customers and the service provider such as the Commonwealth Bank is limited, yet the customers can should not be discouraged. This means that the bank should expand their service to emergency banking services such as emergency credit, phone banking services and emergency funds. Moreover, Commonwealth banks should expand their services to other areas such as food banks, health related loans and other additional credit provision. In this light it is also seen that the banking service providers should now stress on introducing assistance packages and support such as loan repayment deferral arrangements, refund to customers, low interest and tighten their credit growth to the customers by limiting it to only emergency needs. The service companies in Australia should also focus at building their own application for helping them avail the service even after being at home. For example, the Commonwealth Bank should introduce new services and upgrade their applications for effective and easy customer service (Rumiyati and Syafarudin 2021). Thus, the expansion of banking services and high-quality banking services will help in determining customer satisfaction even during the pandemic.
Price
Along with service provision flexibility and change implementation it is also important for the service organizations to reevaluate their pricing strategies in the light of covid-19. The pandemic has increased the need for service providers to revise the prices they charge from the customers to obtain the service. In relation to banking services in Australia it can be stated that the banks should revise their pricing strategy for the service they provide to the customers. Amid covid-19 the banks can customize their fees that they charge from the customers and create a much reasonable pricing strategies that can help them support their paying power during the pandemic (Pwc 2021). The banks in Australia such as Commonwealth Bank is able to implement digital banking services wherein it has made it possible for the staffs to work remotely. This has helped in reducing the cost of the bank to some extent. Thus, with this respect the bank can now design a new pricing strategy wherein they can reduce the prices or charges for credit card and debit card usage. Moreover, the banks should also revise their pricing strategy by reducing their interest on loans they are offering for emergency services. This is because need for emergency rate cut is important and urgent to support the financial needs of the people and companies. Further, the service companies such as Commonwealth Bank should also comply with the government policies such as waiving minimum balance need in bank for saving accounts of the customers (Rumiyati and Syafarudin 2021). Thus, the major way the banking services providers in Australia such as Commonwealth Bank should redesign its pricing strategy by waiving all bank fees or charges related to various facilities and reducing interest rates. This will help them to overcome payment challenges from customers.
Place
The covid-19 is also demanding business model shifts among the service sector with the need to meet the expectations of the customers. Place is the activities that help the firm make the service available to the customers such as location, distribution channels and others. in terms of service providers, it can be stated that they should implement integration of omni channels for effective delivery of service where they can operate as a single channel and indulge in high value customer service on all touch points. In the Australian banking services like the Commonwealth Bank the implementation of omnichannel banking will help the customers to access the products and services of the bank from anywhere and anytime without being physically present in the bank amid covid-19 (Barbaschow2021). For the purpose it is effective for the bank to develop and upgrade their banking application where the customers can avail all the services with ease.
Promotion
In relates to the activities that help the service companies to convey the benefits of their service to the customers and persuade them to purchase it (aba2021). The service companies are also responsible for redesigning the promotional strategy to covey about their service. In relation to banking services in Australia such as in Commonwealth Wealth, the bank should redesign their promotional channels by moving towards social media and online advertising for reaching out to the customers. This will enable them to implement a cost-effectivestrategy and control the cost during the pandemic (Barbaschow 2021). Moreover, the bank should indulge in intensive marketing and promote their offers and benefits of the new services that has been developed for supporting the customers during the crisis period.
People
The Commonwealth Bank should redesign their strategy of people that offer the service directly to the customers. Most of the staffs should operate from home in serving customer needs (aba 2021). The bank should indulge in building extensive IT infrastructure to help the staffs work from home with all the process needs and serve the customers.
Process
Service delivery process is most important in support the success of service marketing and provide direct satisfaction to the customers. The Commonwealth Bank should redesign their processes by making various banking processes automated and integrated with reduced need for attention of staffs (aba2021). Moreover, the Bank should also make most of its services 24/7 to support the customers at the time of needs.
Physical evidence
The physical evidence of most of the service providers will be their own home and on digital platforms. In relation to Commonwealth Bank it is seen that the physical evidence should be redesign from physical layout to digital layout. The executives will be present virtually through calls and digital mediums (Rumiyati and Syafarudin 2021). The service of the banks should now be evident in digital mediums.
Conclusion
In conclusion it can be stated that with covid-19 crisis that the service companies in Australia such as the Commonwealth Bank should redesign their service marketing mix in various ways to support the customers and staffs along with protecting them from getting affected by the virus. The redesigning process should consider both the opportunities and challenges caused by the civid-19 crisis and focus at redesigning all the seven factors of the service marketing mix including people, process and physical evidence.
References
Aba, 2021. America’s Banks Are Here to Help. [online] Available at:
Barbaschow, A., 2021. Commonwealth Bank sees boost during COVID-19 with annual profit hitting AU$9.6b | ZDNet. [online] ZDNet. Available at:
Othman, B., Harun, A., Rashid, W., Nazeer, S., Kassim, A. and Kadhim, K., 2019. The influences of service marketing mix on customer loyalty towards Umrah travel agents: Evidence from Malaysia. Management Science Letters, 9(6), pp.865-876.
Pwc, 2021. Post covid-19 customer strategy implications. [online] www.pwc.de. Available at:
Seetharaman, P., 2020. Business models shifts: Impact of Covid-19. International Journal of Information Management, 54, p.102173.
