Session 4 Product Development COM5407 1 Ansoff Product/Market Matrix COM5407 2 Airmiles AIA (China) Mortgage One Product Life Cycle (PLC) COM5407 3 Growth Maturity Decline Senility Introduction Sales Time Profit i-bond RMB FX-linked Deposits Forwards Passbook A/C Accumulators – “I-kill-you-later” – fad? Credit-linked notes/ Credit Default swaps – not for retail? Early adopters Early majority Late majority Laggards Innovators BCG Matrix Market share COM5407 5 Table 2.2 : Money supply1 貨幣供應1 Table 2.2.1 : Adjusted for foreign currency swap deposits (HK$ million) 就外幣掉期存款作出調整 (百萬港元) M1 M2 M3 貨幣供應量M1 貨幣供應量M2 貨幣供應量M3 As at end of HK$ F.C. Total HK$2 F.C.3 Total HK$2 F.C.3 Total 期末數字 港元 外幣 總計 港元2 外幣3 總計 港元2 外幣3 總計 201x Jan 1月 786,088 336,520 1,122,608 4,120,706 4,076,301 8,197,008 4,128,548 4,086,859 8,215,406 Feb 2月 838,271 365,458 1,203,729 4,214,947 4,081,519 8,296,465 4,222,341 4,093,216 8,315,557 Mar 3月 803,741 375,570 1,179,311 4,157,766 4,103,254 8,261,020 4,164,459 4,114,575 8,279,034 Apr 4月 820,975 396,541 1,217,516 4,182,098 4,164,245 8,346,343 4,188,681 4,176,051 8,364,732 Source: http://www.hkma.gov.hk/media/eng/doc/key-information/press-release/201x/20110729e5a1.pdf Profit impact of market strategies (PIMS) • Profit increases with market share • Return on capital and market share analysis, but only when certain critical market share is reached, it will fall. • Economies of scale, learning, technological improvements, simplifying products • Cost advantages • Experience curves • Strategies – Build, Harvest, Withdraw, Hold COM5407 6 Project management • Important skill to acquire as a marketing professional • Objective: – Quality, Budget, Timescale • Problems: – Teambuilding, Expected problems, Unexpected problems, Delayed benefit, Specialists, Stakeholders • Project Life Cycle: – Define, Design, Deliver, Develop • Project manager: – Outline planning, Detailed planning, Teambuilding and delegation, Communication, Co-ordinating project activities, Monitoring and control, Problem resolution, Quality control • Project planning tools – Gantt charts COM5407 7 Gantt chart COM5407 8 Customers Groups • Personal – High net-worth individuals • Corporate – Large, medium and small enterprises • Needs – Move money and make payments – Earn return on money – Defer payment and advance consumption – Manage risk – Need for information – Need for advice or expertise • Need to understand the exact wants, what are the triggers, and the product itself COM5407 9 My Dream Account COM5407 10 Core My Dream A/C Provide Kids account Tangible Reputation, conveniences, choices Augmented Limited edition by season and by deposit amount Potential Mickey Mouse Piggy Banks Islamic Financial Products • Murabaha – cost plus financing – avoid issues with.

1. Session 4
Product Development
COM5407 1
Ansoff Product/Market Matrix
COM5407 2
Airmiles
AIA (China)
Mortgage One
Product Life Cycle (PLC)
COM5407 3
Growth Maturity Decline Senility Introduction
Sales
Time
Profit i-bond RMB FX-linked
Deposits

2. Forwards Passbook
A/C
Accumulators – “I-kill-you-later” – fad?
Credit-linked notes/ Credit Default swaps – not for retail?
Early adopters Early majority Late majority Laggards
Innovators
BCG Matrix
Market share
COM5407 5
Table 2.2 : Money supply1
貨幣供應1
Table 2.2.1 : Adjusted for foreign currency swap deposits
(HK$ million)
就外幣掉期存款作出調整 (百萬港元)
M1 M2 M3
貨幣供應量M1 貨幣供應量M2 貨幣供應量M3
As at end of HK$ F.C. Total HK$2 F.C.3 Total HK$2 F.C.3
Total

3. 期末數字 港元 外幣 總計 港元2 外幣3 總計 港元2 外幣3 總計
201x Jan 1月 786,088 336,520 1,122,608 4,120,706 4,076,301
8,197,008 4,128,548 4,086,859 8,215,406
Feb 2月 838,271 365,458 1,203,729 4,214,947 4,081,519
8,296,465 4,222,341 4,093,216 8,315,557
Mar 3月 803,741 375,570 1,179,311 4,157,766 4,103,254
8,261,020 4,164,459 4,114,575 8,279,034
Apr 4月 820,975 396,541 1,217,516 4,182,098 4,164,245
8,346,343 4,188,681 4,176,051 8,364,732
Source: http://www.hkma.gov.hk/media/eng/doc/key-
information/press-release/201x/20110729e5a1.pdf
Profit impact of market strategies
(PIMS)
• Profit increases with market share
• Return on capital and market share analysis, but
only when certain critical market share is
reached, it will fall.
• Economies of scale, learning, technological
improvements, simplifying products
• Cost advantages
• Experience curves

4. • Strategies – Build, Harvest, Withdraw, Hold
COM5407 6
Project management
• Important skill to acquire as a marketing professional
• Objective:
– Quality, Budget, Timescale
• Problems:
– Teambuilding, Expected problems, Unexpected problems,
Delayed
benefit, Specialists, Stakeholders
• Project Life Cycle:
– Define, Design, Deliver, Develop
• Project manager:
– Outline planning, Detailed planning, Teambuilding and
delegation,
Communication, Co-ordinating project activities, Monitoring
and
control, Problem resolution, Quality control
• Project planning tools
– Gantt charts
COM5407 7

5. Gantt chart
COM5407 8
Customers Groups
• Personal
– High net-worth individuals
• Corporate
– Large, medium and small enterprises
• Needs
– Move money and make payments
– Earn return on money
– Defer payment and advance consumption
– Manage risk
– Need for information
– Need for advice or expertise
• Need to understand the exact wants, what are the triggers,
and the product itself
COM5407 9
My Dream Account
COM5407 10
Core
My Dream A/C

6. Provide Kids account
Tangible
Reputation, conveniences, choices
Augmented
Limited edition by season and by deposit amount
Potential
Mickey Mouse Piggy Banks
Islamic Financial Products
• Murabaha – cost plus financing – avoid issues with paying or
receiving
interest – bank buys the goods from third party and then sells it
at a
higher price to the customer.
• Musharakah – equity funding – business and bank invest in
venture,
profits are shared and both parties bear the losses.
• Mudarabah – Sleeping partner entrusts money to the
entrepreneur, when
project is complete, the principal is returned and pre-agreed
share of
profit.
• Al-ijara – Leasing finance – bank purchase an asset required

7. by customer
and then lease to customer at a rrate.
• Qard Hasan – interest free loan, borrower is obliged to repay
principal, but
additional payment is optional.
• Attractive to Muslim customers, with the tweet in the
products, it fits their
religious beliefs.
• In Malaysia, 70% of these products are offered to non-
Muslims.
[Source: Financial Services Marketing, Ennew, C, Nigel W,
2007]
COM5407 11
Understand your environment
• Customer changing tastes
• Competitors
• External environment
• Internal factors
COM5407 12
Managing existing product lines

8. • Features of existing product
– Means of differentiation – but can it last?
– E.g. 24-hour FX services, ForEx Switching, Technical,
functional, Intangible thru’ branding
• Product modification, line length modification
– Changing attributes to make it more attractive
– Creating new variant of existing product
– Improving performance e.g. Mortgage One, Cheque and
save account, 24-hour manned hotline
– Line Stretching e.g. Premium Accounts, appealing to a
segment – lower risk but sometimes it may not be the case
• Wrong segmentation, increase costs in systems and
maintenance,
migration of clients from legacy system to new system.
COM5407 13
New product development
• Major innovations – e.g. RMB products, MPF,
Structured Products
• Governments often are major drivers,
influence product policy, e.g. interest rate
deregulation, price caps, tax changes.

9. • New service lines – “Me-too” e.g. mortgage
One, Payroll account
COM5407 15
New-product development strategy
COM5407 16
NPD
strategy
Idea
generation
Idea
Screening
Development
and testing
Product
Launch
Evaluation &
tracking
International Trade Account

10. Idea Generation
• Data mining
• Existing client profile
• Profitability, sector, nature, transaction
pattern, decision makers
• Applied segmentation strategy
• Identify bank strategy – Increase deposit by x
billion
Idea Screening
• Segmentation by deposit size
• Segmentation by behavior
• Segmentation by sector
Decision factor: Positioning, differentiation,
profitability
Development and Testing
• Based on segmentation strategy
• Decide segment needs
• Work with IT, ops, trade, marketing, HR,

11. distribution in a 3 month working plan to
launch the product
• From idea generation to product launch and
marketing campaign: 3 months
Product Launch
• Product
• Place
• Promotion
• Price
• People
• Process
• Service Delivery
Evaluation
• Number of accounts
• Profitability
• Deposit and trade volume
• Sales incentives

12. • Complaints
• Service delivery standards
• Transfer best practice to other countries
INDIVIDUAL ASSIGNMENT
PROMOTION CAMPAIGN EVALUATION GUIDELINES
The selected campaign
Your task is to find a launched marketing communications
program for a brand in the financial
sector. Your assignment requires you to evaluate the
background of the brand and presents the
action program for the advertising and promotions campaign.
The scope of the individual assignment should include the
following:
Review of Marketing Plan (10%)
Industry/Company Review
A description of the industry in which your product competes,
its size, growth, current trends and
developments, and any key factors necessary for an
understanding of the setting. Also, a snapshot

13. of your company, including a very brief history, the firm's
present status, product lines, sales
history, target markets, current marketing mix, and other factors
making the company what it is
today.
Product Review/Buyer Analysis
A description of the product or service. Emphasis should be on
the product's sales history, market
share, strengths, weaknesses, key benefits, brand image, and
other factors important for an
understanding of the product's or service's performance and
place among its category competitors.
In addition, there should be identification of the various market
segments and the user
profile for the product, as well as a description of the consumer
decision process for the product
and the important factors influencing brand selection. Who buys
the product or service? Who is
the decider? The influencer? What are the demographic,
geographic, psychographic, and
behavioral factors that influence the buying decision? Is buying
behavior characterized by
extended or limited problem solving? Is the product/brand a
high-involvement or low-

14. involvement purchase? In short, what are the key factors that
influence buyer behavior for this
product or service?
Promotional Program Situation Analysis (20%)
Competitive Review
Identification of the important direct and indirect competitors
for the product. For each
competitor, focus should be on factors such as sales, market
share, growth, key benefits,
positioning, advertising and promotion budget, promotion
program mix, message and media
strategies, and an overall assessment of strengths and
weaknesses.
Segmentation, Targeting, and Positioning
Which of the market segments will be the target market for this
campaign? What will be our
positioning strategy?
Communications Objectives & Budget
What are the objectives of the campaign as they relate to brand
awareness, knowledge and

15. interest, favorable attitudes and image, and purchase intentions?
Apply communication/consumer
behavior theories as the basis for the communications
objectives.
Integrated Marketing Communications Program (20%)
Creative Strategy
A one-page statement including the following components
making up the message strategy:
objectives, key benefits, support, claims and promises,
reassurance, and tone. Determination of,
and rationale for, the source of the communication.
Integrated Marketing Communication (IMC) Mix
Identification of the major program elements of the IMC
campaign, the relative emphasis to be
placed on each (including a tentative percentage allocation of
the budget), the specific objectives
for each element, and the rationale for the recommended mix.
Attention should be given to the
objectives of the advertising, sales promotion, public relations,
Internet/interactive, direct
marketing, and personal selling components of the IMC
campaign.
Specific Media Objectives/Mix

16. Identification of the reach, frequency, and message weights
sought. What is the geographical
allocation of the media budget and why? Which media was used
and why? What scheduling
pattern was be employed? All of this should be accompanied by
a concise media rationale
statement as to the potential efficiency and effectiveness of the
campaign. A media plan flow
chart should be included.
TABLE 3.5 Selected Implementation Tools—A Checklist
Media Advertising
Radio
Television
Digital: banners, pay per click, contextual, and so on
Signage (outdoor, transit)
Co-op advertising
Print (newspapers; magazine, trade, and professional journals;
advertorials; Yellow Pages;
specialized directories and trade books)
Public Relations
Media and blogger relations
Media events
Public speaking
Bylined articles, blogs, and op-ed pieces
Event and Cause Sponsorship

17. Sponsorship of existing events (sporting, cultural, educational)
Cause marketing (working with a charitable group by donating a
portion of sales, providing goods or
services, or underwriting and
publicizing events)
“Activation” events associated with a sponsorship, including
contests, giveaways, special events
Interactive Marketing
Mail campaigns
Online campaigns
On-site or guerilla campaigns (such as product sampling)
Mobile Marketing including app development
Microsites for products or client segments
Intranet or other limited-access web sites
Content marketing campaigns
Social media campaigns
Personal Selling
Lead-generation campaigns
Personalized letters, calls, and meetings
Customized proposals
Presentation/sales materials
Sales training
Sales contests
Exhibiting at trade shows and industry events
Holding seminars for prospects and clients
Convened events, such as panels, symposia, and round tables
Relationship Marketing
Retention-marketing programs (special programs for new
customers, loyalty programs)
Cross-sell and up-sell programs
Referral marketing
Customer publications

18. Ehrlich, E., & Fanelli, D. (2012). Financial services marketing
handbook : tactics
and techniques that produce results (p.53)
Budget
How much money did the campaign spent (an estimate). Does it
spent wisely to match up with
the campaign objectives? How was the monies allocated? (How
much goes to traditional
advertising, sales promotions, new media, etc?)
Measuring Program Effectiveness (20%)
Evaluation Program
Use taught evaluation methods to appraise the effectiveness of
all program elements
used. Example below.
Ehrlich, E., & Fanelli, D. (2012). Financial services marketing
handbook : tactics and
techniques, p.55
Recommendations (30%)

19. What are your recommendations to the campaign, provide a
clear critique of the
promotion campaign and how would you improve the
effectiveness of the campaign?
Appendix
Attach the campaign’s visual / outputs in the APPENDIX
section of your paper.
These include visuals / outputs such as magazines, newspapers,
television, radio, billboard, transit,
out-of-home, Internet, and other media types.
References
A complete list of secondary sources used for the campaign
plan. Please use APA format.