Identify the selected product / services value proposition that differentiate themselves from the banking industry. The value proposition need to be unique. Explain the found differentiation of the value proposition.
The report helps in the overall analysis of the product or the market orientation which will be provided by the organization to the customers in the entire Malaysian market. The value propositions along with the differentiation aspects used by the company is required to be analyzed and identified in an effective manner which will be beneficial for the overall success of the bank in comparison to the other competitors.
The needs and wants of the customers are required to be addressed through proper segmentation and targeting strategy effectively. The different factors related to influencing the behavior of the consumers will be discussed. Lastly, the nature of the competition in the market of Malaysia will be identified to analyze the nature of the other competitors and the report will be ended with conclusion.
Malayan Banking Berhad is one of the Malaysian Universal banks wherein the major key operating of the bank is at Malaysia, Indonesia and Singapore (Maybank.com, 2018). The Malayan Banking Berhad is one of the most valuable banks of Malaysia and this is the largest bank in terms of the capitalization of the market. The bank was founded in the year 1960 and the key people who are involved in the creation of the bank are Abdul Farid Alias who is the president of the bank. Furthermore, the number of employees working in the organization is 45000 till the year 2015 and the net income of the bank till the year 2015 is RM6.84 billion. The bank has been ranked 91st in the top banker’s list which was among the 2000 leading companies in the entire world.
There are different kinds of products and services which are being offered by Malayan Banking Berhad are described as follows:
- ATM cards
- Savings Bank Account
- Term Deposit
- Current Account
- Housing loans
- Car loans
- Traveler’s cheques
- Digital Banking
- Remittance Facility
The service which has been selected from the above is housing loan which falls under the category of personal loan or services which is being offered by Malayan Banking Berhad. The housing loans are the ones which is being provided to the customers for the purchase of the house at low interest rate which is repayable over a long period (Achroll & Kotler, 2014).
This housing loan service is being offered by Malayan Banking Berhad which will be beneficial for them to attract large number of customers by offering high interest rate effectively. Moreover, this kind of loan falls under the personal category as this is being provided to the customers for purchasing their individual houses.
From the overview of the organization and the products which are being offered by the respective Malayan Banking Berhad bank, this can be identified that the respective company is offering the mixture of both product and market orientation. They develop various products keeping in view the demands of the various layers of the society and then the respective bank markets the same to improve their business.
For this purpose, the respective Malayan Banking Berhad bank has established a full-fledged department to develop different products keeping in view the economic scenario and demands. After the entire development of the products which are being offered by them, the marketing department reaches to various sectors to sell the same and receive the business for the bank (Malhotra & Peterson, 2014). The other perspective which is being followed by Malayan Banking Berhad is the customer oriented approach which is beneficial in nature in benefitting the customers which is helping them in gaining competitiveness in the entire market.
The unique and differentiating factor of the housing loan which is being offered by Malayan Banking Berhad is the competitive kind of interest rate which helps in attracting the clients of the entire Malaysian economy. The interest rate of the Malayan Banking Berhad Bank is 10.50% annually in the present scenario; on the contrary, in the other banks the range of the interest rate is more than 11% which is assisting them in succeeding in the overall aspect in a proper manner.
Moreover, the bank charges minimum processing along with other miscellaneous costs from the different clients who are the major customers of the Malayan Banking Berhad bank. As the rate of interest of the respective bank is less, this has helped in the higher economic growth and the high rate of inflation in the Malaysian economy.
Furthermore, this has been noticed that the processing time of the loan of Malayan Banking Berhad is kept at a minimal level in comparison to the other banks. Additionally, in comparison to the other banks, this can be analyzed that GDP rate of Malaysian economy is high in nature and this is the other competitive aspects of Malayan Banking Berhad Bank that can be helpful in managing the different kinds of activities in a proper manner (Malhotra & Peterson, 2014).
The needs, wants and the demands of the customers are the vital part of the marketing principles and the three words hold complex kind of meaning with high factor of differentiation.
The needs of the human beings are the basic requirements which are inclusive of food, shelter and clothing. The need is the desire of the customers for a particular products and services whether it is emotional or functional in nature.
The wants of the human beings are step ahead of the needs which are largely dependent on the different human beings itself. This is the desire of the customers in order to fulfill the different needs which will help them in satisfying the consumption of the products and services (Kotler & Keller, 2014).
The demands of the individuals are defined as the needs of the human beings along with the analysis of the ability of the humans to purchase the respective object or not (Kotler & Keller, 2014). The demand of the customers is about meeting the different inventory along with service demands and in the present scenario, the demands of the customers are far exceeded from the expectations of the customers in the market.
The products which have been selected from Malayan Banking Berhad Bank are housing loan which helps in meeting the needs of the customers in an efficient and operative manner. There are different importance of the housing plan which is being provided to the customers of Malaysia are being described as follows:
In Malaysia, more than 50% of the population does not have their own accommodation facilities and the majority has rented accommodation and they are at the mercy of the landlords. In this respective case, they look forward to their own accommodation which they cannot afford. At this junction, the housing loan provided by Malayan Banking Berhad Bank plays a pivotal role to this sector by offering long-term repayment at competitive interest rate.
Furthermore, the housing loan helps the ancillary sectors which are the cement industry, electrical industry along with the others to grow in the entire competitive kind of market. With the help of the same, the new employment is generated.
Additionally, the demand plays a strong role for the housing loans by the different customers in Malaysia. As discussed earlier, this has been noticed that there are more than 50% of the populations who are below the poverty line and this is effective in nature for the individuals to search a permanent residence for their living (Malhotra & Peterson, 2014). In order to improve the accommodation services, this is essential in nature for Malayan Banking Berhad Bank to understand the position and demand of the same and offer the similar products at an affordable rate.
Company’s Value Proposition and Differentiation
There are different kinds of bases which are being used by the banking industry in segmenting the market. The segmentation of the housing loan is being done by the Malayan Banking Berhad in the following manners which are as follows:
- Location- Metro along with different divisional cities
- Occupation- Business Individuals along with the salaried class
- Age- Minors and Senior Citizen
The different kinds of individuals who believe in modern banking aspects and approaches with high set of services such as internet banking technique
The places which are inclusive of the different divisional cities which will be beneficial for the success of the firm
The lifestyle of the individual is moderate and the person is having a regular income and salaried employee of an organization
The targeting strategy which has been applied by Malayan Banking Berhad is retail banking market wherein the bank is customer focused and service oriented in nature as well (Philip & Kotler, 2017). The bank has created a survey in which the different opinions of the customers have been taken into account which will be beneficial for the overall success of the firm in a positive manner (Moore et al., 2015). The bank has tried to position them as the one which helps in providing higher standards of services through proper innovation of the product along with analysis of the different needs of the customers effectively.
The value proposition which have been taken into consideration by Malayan Banking Berhad Bank in the entire Malaysian market is related to the competitive rate of the interest and charges minimal rate for the loan which is being taken and opted by the individuals from the respective bank as well. With the help of the positioning map, this can be analyzed that the bank is customer centric along with providing the housing loans at the minimal rate which attracts more customers in the market as well (Kotler & Keller 2015).
this can be analyzed that the respective bank is focusing mainly on providing the best quality services to the customers who will be beneficial for them in gaining success in the market effectively. Furthermore, the value proposition of housing loan at minimal interest rate is the main aspect which is being followed in the bank in comparison to the other competitors in the market of Malaysia as well (Sargeant & MACQUILLIN, 2016).
There are different kinds of factors which are influencing the behavior of the consumers in a positive manner. The different factors are inclusive of external and internal factors which are discussed as follows:
- Age-The age group of 25-55 years of age who are the most common customers who apply for the housing loans from the bank (Foxall, 2014)
- Lifestyle- The customers who do not have proper permanent accommodation to stay in the economy
- Income-The ones whose income is not high and they do not have the ability to purchase the property with their own money, they can apply for home loans (Weinstein & Pohlman, 2015)
- Profession-The profession of the individuals should be permanent and stable in nature and they should have a proper income statement to showcase in the bank as well
- Social Class-This is the first external factor which is required to be taken into consideration as this helps in determining the lifestyle along with interests of the individuals (Shaw, 2016).
- Reference Groups- The individuals will be using the references of the different customers in the market which will provide them a brief detail on the interest rate of the bank (Villeneuve & Pasquier, 2017)
- Role and Status- This is the other aspect which is required to be taken into consideration as the different groups have different kinds of values and beliefs (Chernev, 2018)
- Family- The family plays a major role in managing the buyer behavior in an effective manner which can affect the overall buying behavior of the individuals in a positive manner (Wagner & Eggert, 2016)
Customers’ Needs, Wants, and Demand
The nature of the market in which Malayan Banking Berhad is operating in the market is falling under the oligopolistic market. There are different kinds of characteristics of the bank which is inclusive of the interdependence of the firms in the process of decision-making. However, there is lack of uniformity and there is no unique kind of pattern for the pricing behavior as well. The level of competition in the respective market is high and this can affect the overall efficiency of the different firms in a negative manner (Miquel-Romero, Caplliure-Giner & Adame-Sánchez, 2014).
Reasons of Banking Industry Competing in Oligopolistic Market
The banking industry is competing in the oligopolistic market as this is the free kind of economy wherein all the banks have the independence on the process of decision-making (Kotler & Keller, 2014). Furthermore, this has been noticed that the entire pricing is being based on the demand and supply of the different customers in the market which will be effective in nature. Moreover, this has been noticed that there is huge competition in the market which can play a major role in the oligopolistic market (Bresler & Lubbe, 2014).
- Affin Bank Berhad
- Alliance Bank Malaysia Berhad
- AmBank (M) Berhad
- Bangkok Bank Berhad
- Money Lenders
- Private Finance Companies
- Credit Card Providers
From the above, this can be concluded that the Malayan Banking Berhad Bank is one of the best banks which are operating in Malaysia. The nature and level of the competition is oligopolistic in nature as there are different other public and private banks which are operating in Malaysian market which can be hugely competitive in nature. Furthermore, the different factors have been disclosed effectively which has influenced the behavior of the customers in the market in a negative market and this has helped Malayan Banking Berhad in becoming more successful in their different approaches. The different products and services of the bank have been taken into consideration which is inclusive of the housing loan that has helped them in becoming more effective in comparison to the other competitors in the market.
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