Topic nein - Market segmentation and product development Flashcards
What do geographic segmentation include
Grouping people according to where they live
What do Demographic segmentation include
Grouping according to age, gender, occupation and income group
What do behavioural segmentation include
Grouping according to service, usage, loyalty ans whether people buy on impulse
What characteristics do banks make current accounts based on
Income and wealth
Age
Loyalty
Money management needs
What are the benefits for a packaged account
Travel insurance
commision free travel-money
Home emergency cover
Cash back
Breakdown cover
Phone insurance
Identity theft protection
Exclusive interest rates
What does HSBC’s Premier bank account include
Relationship management, worldwide travel insurance, worldwide cash withdrawals and better mortgage, loan and saving rates
What does RBS’s Silver Account include
European travel insurance, phone insurance, good rates for travel money, and discounts on meals and cinema tickets
What was a criticism of packaged accounts in 2014
People where paying for benefits they didn’t know they had and didn’t want
OTher criticisms of packaged accounts
Too expensive
Make become over insured
Examples of packaged accounts not paying out
Phone cover often doesn’t cover the newest phones, like an iphone
Travel insurance can have terms about age, pensioners can’t claim through it
What must providers do with packaged accounts
Check the consumer can actually claim the policy’s it offers
Send each customer a pamphlet every 12 months showing the benefits they get
Ensures that the package is right for the consumer
What is barclays “Features Store”
Consumers can choose what add ons they want for their account
What is the typical fee paid on a balance transfer with an interest-free account
3%
what are the common terms and conditions for interest-free credit card balance transfers
The earn the promotion rates people must stay in their limits
They must pay of the amount that they transferred in the agreed period of months
How long is the average interest free period on a credit card
15 months
What segmentation of people is cashback aimed at
People who spend more money on personal consumption
What does a barclays reward card contain
a credit card, 0.25% cashback on certain purchases, discounts on entertainment tickets, access to ticket presales and attention entertainment venues
What does sainsburys “Nectar credit card” contain
Allows customers to earn nectar points, these can be exchanged for goods and services
What does sainsburys “Nectar credit card” contain
Allows customers to earn nectar points, these can be exchanged for goods and services
What is the cost of cashback and rewards
fee for account
Less favourable rates than other accounts
The extra sales make up for it
Examples of primary research
Questionnaires
Mystery shopping
Interviews
Focus groups
Examples of secondary research
Internal secondary information
External secondary data
Questions that should be asked if getting PPI
How much money do you owe
Are you employed or self-employed
How much of your income do you spend on loan repayments
How much could you spend on this policy
What questions are asked for feedback on packaged accounts
how satisfied are you with the account
How likely are you to be overdrawn
Do you think overdraft prices are too high or low
Would you prefer a simpler account that charged no fee
Example of a legal pestel analyse for banks
A provider must have up to date changes in legislation
Example of a political pestel analyse for banks
Must be aware of regulation changes
Example of a economic pestel analyse for banks
Monitor the level of unemployment
Example of a social pestel analyse for banks
Keep up to date with demographic changes
Example of a technological pestel analyse for banks
keep up to date with developments in cyber crime
What is primary research also known as
Field research
What 2 issues are taken into account when designing a script for an interview
The questions that will be asked
The identity of people called
What data do focus group receive
Qualitative
What is a focus group and what do they do
A group of people will meet up and discuss a product together, they will then send the provider a report of the things they talked about
What data do observations receive
Quantitative
What is the first and last step that mystery shoppers do
1st - Mystery shopper is given instructions by the firm on how to act
last - Mystery shopper prepares detailed feedback report for commissioning firm
What is a mystery shopper
A way where a firm will send someone in pretending they are a customer to see how their experience and what the problems are.
What type of research did the fca describe as “ useful way of bridging the gap between supervisory reports and information we receive from the customer”
Mystery shopper
What is secondary research also known as
Desk research
How can internal secondary data be used
Sales figure scan be compared to find trends
The marketing department can see how effective they have been
As financial data is mostly online providers can see how consumer use products, so they can target future promotions
An insurance study can use past claims to analyse its risk in the future
Example of public sector organisations and government departments
Office for national stats (ONS)
HM Treasury
Department for Business, Energy and industrial strategy
Examples of financial services regulators and complaints bodies
Bank of England
FCA
FOS
FSCS
Examples of professional organisations
The trade associations:
UK Finance
Building Societies Association
Association of british credit unions Ltd
Association of British Insurers
Examples of commercial market research organisations
Mintel international group LTD and savanta
Examples of competitors
Other:
Banks
Building Societies
Credit unions
Friendly societies
insurance companies
Examples of the media
Newspapers
Journals
Magazines
Factors of a product under development
An entirely new product that satisfies a new customers needs/wants
A product that satisfies an existing want or need
An existing product but slightly modified or presented in a new way
An existing product but with additional products
What is product opacity
When products all look the same
Example of a complex and opaque product
the interest rate switch:
A small business customer would pay a lower rate of interest on a business loan if the general bank rate was high and if the general rate was low, the business loan rate increases
Example of a new product from political and legal changes
Black Boxes
What pestel section does multi-car insurance fall under
Social changes
