Customer behaviour towards priority banking by Barclays

All the renowned banks around the globe offer their prestigious customers with a service which is something more to banking. It is specially designed for customer’s utmost convenience and satisfaction; it gives customer a priority over regular customers and provides perks which others cannot enjoy. Standard Chartered calls it Priority Banking, Citi Bank calls it Citigold and Barclays calls it Barclays Premier.

Barclays Premier has witnessed a downward trend in its premier customers over the last two years. Management of Barclays Premier needs to analyze the behavior of their customers, the external and internal factors that influence this behavior and most importantly what has factors have led to a change in the behavior of their customers over the last two years.

This report will thoroughly study the factors influencing the behavior of Barclay’s customers and how has those factors led a fall in sales of Barclays Premier. After a complete analysis of the customer behavior, it will further devise strategies which may help to improve the worsening sales of Barclay’s Premier.

Contents

Executive Summary 1

Contents 2

Barclays Premier 3

Consumer Behaviour 3

External Factors Influencing Consumer Behaviour: 4

Cultural influences: 4

Global Culture 4

National and Sub-culture in British Society 5

Reference groups 5

Family and household influences 6

Other external factors affecting Consumer Behaviour 7

Positioning Strategy 7

The Two Basic Principles of Positioning 8

Benefits: 8

Unique selling proposition 9

Types of Positioning 10

Umbrella positioning 10

Positioning against the Competition 10

Positioning based on specific benefits 10

Finding an ‘unowned’ positions 10

Critical Reflection on Learning Outcomes 11

APPENDIX 12

Exhibit 1 (Leon G Schiffman, 2008) 12

Exhibit 2 (Leon G Schiffman, 2008) 13

Reference List 14

Barclays Premier

As Barclays Premier says: “Discover a world where the ordinary does not exist, where every day is special, where every moment is exceptional” (Barclays )

Barclays Premier is designed for a service that focuses on clients individual offshore banking needs. The clients of Barclays Premier take benefit from swift and efficient responses, and gain access to exclusive banking products with improved rates.

Barclays provides its customers with dedicated Relationship Managers, Premier clients can take pleasure of a complete peace of mind as Relationship Managers work with their clients to determine the solutions that best suit their needs. They focus on client’s long term requirements and anticipate their requirements in order to give their best to the prestigious clients. Moreover a dedicated team of professionals is also there at all the braches and service centers to assist clients, handle their requests and get your transactions done within impressive time. (Barclays )

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Barclay’s premier offers their clients with specially designed well-furnished Premier Corners. Here they carry out all their banking transactions quickly, conveniently and in complete privacy. Premier Corners are designed to provide clients with quality surroundings and all the amenities to make your visit productive and enjoyable. Premium corners even provide a kids place for kids while parents are at the corner Barclays claims about its Premier Corners that “Banks are designed for banking but Barclays Premier Centers are designed for Life” (BARCLAYS)

Moreover customers who travel abroad for business can pre-book the conference rooms and can use their lounges. This lets the customers off with all the hassle when they travel abroad for corporate tours and allows them to focus on work with all the banking facilities at their disposal.

Consumer Behaviour

Organizations need to understand consumer psyche in order provide them with exactly what, how and when they want. This helps them to flourish, there was an era when customer needs and requirements were not given specific importance but the major focus was on the product, it was assumed that consumes will buy the product that offers them with the highest quality, the best performance and most features but then things changed. Firms found that it was a lot easier to produce the products which were confirmed through research that customer wanted rather than persuading consumers to buy what firm has already produced. This is how firms’ behavior evolved overtime and studying consumer behavior became a necessity for firms in order to succeed. (Leon G Schiffman, 2008)

For this marketing concept to work, firms need to go through the hassle of consumer research, market segmentation, market targeting, positioning in order to provide customer value and achieve customer satisfaction. Its is also very important to understand how a consumer makes a decision. Consumer’s go through a series of specified steps when they take a decision (refer to exhibit 1 for more detail and graphical representation), and this really helps marketers in understanding the psyche of the consumers they intend to cater. (Evans, 2007)

Barclays Premier is designed for the people who need luxury, comfort and convenience while performing their banking transactions. Most of these people give utmost importance to time and so want their tasks to be performed swiftly without any effort and right when they want it to be done. They want all the banking services to be at their disposal all the time.

Accounts that Barclay’s Premier handles can be classified into two major types .i.e. business accounts and personal accounts. Majority of the clients of Barclays Premier are business tycoons, belong to a pretty rich family background and are above 40 years of age. So the services that the Bank provides need to be designed keeping the needs, requirements and psyche of such people in mind. A thorough study and analysis of their consumer behaviors’ of their clients and targeted clients will help the Barclays Premier to tailor its banking products and services that exactly match their requirements and position itself in such a way that it inspires its target clients. (Stock brokers)

External Factors Influencing Consumer Behaviour:

We just went through how consumers take their decision (exhibit 1) and we could see that decisions which customers take are not strictly their own personal decisions. The decisions of consumers do get affected by external forces either directly or indirectly. Some of these external influencing forces could be named as cultural influences which can further be divided to cultural, global, national or sub-cultures, family and household influences, opinion leader influences, reference group in fluencies and so on. All these influences will further in discussed in detail and with respect to the clients of Barclays Premier. (CN Krishna Naik, 1999)

Cultural influences:

Cultural influences affect individuals to a great extent and in such a way that they don’t even realize that their thoughts and beliefs are being affected. Cultural has an invisible hand and get into a man’s very basic beliefs of rights and wrongs. Culture is something that is learned by the practices generally prevailing in the society. Exhibit 2 graphically shows how culture influences on behaviour of an individual. (Ernest Henri Philippe Baudet, 1982)

Global Culture

The global trend of any product or a service does affect the usage of any product or a service. The culture is dynamic, things change, technology advances, methods of performing tasks change. The Global trend of using banking services is widely and so is the trend of premium and priority banking in particular. People are getting inclined towards better and efficient services, advanced technology, perks, comfort, convenience and more dedication when it comes to business and this is all what Barclays Premier offers. All the products and services are perfectly in line with the Global Culture and evolving with it. The Managers and Marketers should keep their products and services updated with respect to the recent trends for further improvement. So this is the area Barclays Premier does not need to worry about, for now at least. (Mazarr, 2007)

National and Sub-culture in British Society

British were once a society based too much on classes. People belonging to high classes were proud and arrogant and thought of themselves as superior to other. But today, multiculturalism and a changing economy are gradually eroding the British class system, but some features of the system still remain. (UK, 1987)

This service of premium banking does also somehow reflect this class thing to an extent. People who avail these services consider themselves to be prestigious and superior than the regular customers of Barclays itself. They are given more importance and preferred over other customers. This is the reason some people consider availing the premium banking services as a class and a status symbol rather than a need. People who are clients of Barclays Premier not only feel themselves to be superior as a customer but consider themselves as a different class. Some people become clients of Barclays Premier only because they want to show off for their money.

Sociologists define social class as the grouping of people by occupations. People in occupations like Doctors and lawyers and university teachers are given more status than unskilled labourers. The various positions symbolize different levels of power, influence and money. In previous days your class would affect your odds of getting a good education, a respectable job, etc. and it also used to influence the people who you could interact with and marry. Today this class system has reduced to a great extent and seen rarely in few cases with the high-profile exception of the Royal family. (Moii, 2004)

What Barclays Premier does is satisfying a need in the society which might have led to a bad thing like discrimination and class to very minute extent; or may be taking it the other way Barclays Premier got an edge or exploited something that was already prevailing in the British society. (news room)

A fall in sales in last two years may be because of this showing off and class thing largely discouraged by everybody recently. Society is heading towards promoting equality. What Barclays Premier needs to promote in order to retain its sales is that Barclays Premier is not about being discriminatory or belittling the clients who avail regular banking services. Barclays Premium is about facilitating those who are too busy in their errands and find ways to save time for their family and other work responsibilities. It is for the people, who being too busy in their work, are looking for a comfortable and friendly environment and consider luxury at work an entertainment and a way of relaxing their minds. Moreover Barclays Premier is taking banking services to a new level and setting new standards.

Reference groups

In order to understand the dynamic consumer behaviour, one needs to understand the influencing power of reference groups. A reference group may be defined as a person or a group that serves as a point of comparison for an individual in forming either general or specific values attitudes or a guide for their own behaviour. Theorists divide these reference groups into normative and comparative, normative may be your family as they do mould one’s consumption patterns but family influences will be discussed in detail later in the report. Comparative may be your neighbors who you can compare yourself to and their way of living seems pretty impressive and worth imitating to you. Another classification in reference groups could be indirect reference groups with whom you do not have any contact in person such as TV stars, sports heroes and politicians. The crux of the matter for a marketer is that these reference groups do affect consumption decisions of individuals. (C.L. Tyagi, 2004)

The relevant reference groups for a client of Barclays Premier could be like family (discussed later) and may be some family friends who lifestyle they inspire and or may be can relate to it. Their co-worker, colleagues or even competitors at market place may act as reference groups. He could most likely also have indirect reference groups such as sports celebrities, politicians, movie stars or may be some random impressive guy at workplace. As mentioned above, a reference group that is perceived as credible, attractive or powerful can easily influence a consumer’s attitude or behaviour towards a product or a service. For example is a person interested in availing the services of Barclays Premier would definitely refer to one or more of this comparative or normative reference groups before deciding to be a client of Barclays Premier.

Barclays Premier can use this valuable concept of reference groups to put into effect the desired changes in consumer behaviour of their clients or targeted clients. Barclay’s Relationship Managers should reach inspiring business individuals around, introduce them to Barclays Premier’s impressive services and offer special favours in terms of work relationships to convert potential clients into actual clients and to promote a positive image among the leading business community of the country. This would really benefit the Bank in terms of sales as well in terms of image. Those people may act as reference groups to several other potential and target customers, recommend them the premier services and so the cycle goes on. This reference groups can act as the best source of word-of-mouth advertisement which is ranked the highest and the most effective among all the advertising techniques used by marketers. Moreover, Managers should utilize their well off business as well as personal contacts to introduce and promote their premier services. (Cathy Neal, 2007)

Family and household influences

Family is the first contact that a human gets when he comes into this world and undoubtedly the things that you learn through this normative reference group at has a tinge throughout your life no matter where and in which culture you spend rest of your life in. Products and services a family is loyal to continue last for generations. (Schiffman, 2005)

This reference group cannot be directly influenced or contacted by Barclays Premier to like other reference groups mentioned earlier but they definitely do affect the consumer’s decision so they should be taken into account. Barclays while targeting the corporate world should also focus on Pvt. Limited companies and Sole proprietorships in particular. They may not be very big shots for the Bank but they can benefit for a longer run; loyalty of such clients has a tendency to last for very long time periods as it continue for generations if the services remain up to the mark and Barclays Premier offers the best. (Wright, 2006)

Other external factors affecting Consumer Behaviour

Other External factors that may affect consumer behaviour include the Economic conditions around the globe, economic conditions of UK in particular, spending and saving propensities of businesses and households in the country, trends of the banking industry. (Prosser)

The world has gone through a major recession and high inflationary pressures lately. This directly affected the liquid deposits of all the Banks including Barclays Premier. All the savings of businesses and households drained away. Due to high inflationary pressures, liquid money was losing value and people preferred not to keep their money in liquid form at all except for what was needed for day to day expenses of businesses and households due to which the liquid assets of Barclays Premier got worsened. (The times)

Moreover, researches show that the average propensity spending for an average Briton has decreased which leads to a fall in Bank deposits. Even if they are, they do not save in liquid forms rather buy financial instruments or fixed assets to save. (Prosser)

Barclays Premier cannot influence these external factors but can mould itself accordingly; it can come up with better range of saving products and at competitive prices. It can divert its attention away from promoting liquid deposits temporarily until the economic situation gets better. It can provide businesses and households with better ways and a greater range of saving instruments. Managers can advice their clients about the ways through which they can prevent their idle money lose value.

Positioning Strategy

There are numerous brands under each and every industry of the world. Two brands may even be producing similar goods and services at similar prices but one may have a far greater market share; because as mentioned earlier, nowadays its is not about product, its about marketing yourself. Once that the company has segmented its market and selected its target segment that can benefit it the most, comes the time for positioning itself in the minds of its target market.

Positioning can be defined as the development of a distinct image for a product or a service in the minds of the consumers, an image that will differentiate the offering from competing ones and squarely communicate to the target audience that the a particular product or service will fulfill their needs better than competing brands (Kumar, 2010)

In order to design an effective positioning strategy one needs to keep in mind the concepts of perception, self and attitude of the targeted consumers. Perception can be defined a process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world. How the consumer perceives different things depends on how his sensory receptors respond to stimuli (Leon G Schiffman, 2008)

Another concept of just noticeable difference is the minimal difference that can be detected between two similar stimuli and this will be important and relevant for Barclays Premier for two reasons: One that the negative changes are not readily discernible to the public and so that the product improvements are very apparent without being wastefully extravagant.(Leon G Schiffman, 2008)

An attitude can be defined as learned behaviour or predisposition and Barclays Premier needs to understand the attitude of their target clients before positioning itself. Theorists have designed different models to understand the attitude of the consumers which include the Tri component Attribute Model and Multi Attribute Attitude models. The major reason for designing these models is to study their consumers. Therefore Barclays need to analyze the behavior, the attitude, the likes and dislikes of their clients to cater their needs.

The Two Basic Principles of Positioning

The positioning revolves around two basic principles, the first is benefits and the other is unique selling proposition.

Benefits:

The benefits of Barclays Premier would be that is specifically designed to enable the most efficient banking service one can ever experience. A range of benefits a client of Barclays Premier can enjoy are listed below:

Premium Team

It provides you with a team of highly qualified experts for carrying out the client’s banking operations and providing the client with advice of managing their liquid assets called premium team. These specialists will provide the financial expertise, solutions and priority service you need to keep your money working for you round the clock. The team includes:

Premier Relationship Manager

Financial Planning Managers

Woolwich Mortgage Advisor

Your local branch staff

Life Rewards

Life’s Rewards is our membership program exclusive to Barclays Premier Life and is our way of saying thank you for the business you do with us. Look at the range of unique events, experiences and discounts

Premier Life Account

Our Premier Life Account offers everything you’d want from our exclusive Premier banking service. And you’ll get the support of a specialist team to help with all your money management needs.

Premier Loans

Our lending solutions can help give you the freedom and flexibility you need to achieve your goals.

Finer Home Insurance

If you want to protect your property and possessions with more than a standard insurance policy, our high value home insurance can give you reassurance.

Premier Credit Card

Available exclusively to Premier Life clients, the Barclays Premier Credit Card is designed to fit the way you live.

Moreover, it also provides Premier Mortgages,, investments and insurance. Managers can manage the client’s money even online or on phone. It does not facilitate the client in the home country but abroad as well. It provides the customers with meeting rooms and lounges abroad so that can handle their business peacefully and can concentrate on work during corporate tours rather doing the hassle of looking for appropriate places to work. (BARCLAYS)

Unique selling proposition

This is the distinct benefit that the organization has for the product or a service. Theory says that most of the products fail because they are not perceived by the consumers as distinct or any different from other products. In consumer behaviour language they are considered to be “me too” products who do not have any unique image or benefit. The unique features that Barclays Premium can claim to have would be:

Premium Corners

You can conduct all your banking transactions quickly, conveniently and in complete privacy at any of our Premier Corners. Our Premier Corners are designed to provide you with quality surroundings and all the amenities to make your visit productive and enjoyable

Global Access to Flagship Premier centres

Premier customers traveling abroad and needing venues for a meeting can pre-book a conference room at flagship Barclays branches or use their lounge. Your Barclays Premier VISA Debit card is all that you need to access the lounge – a sanctum where you can relax and conduct business in a stress-free environment.

24 hour call center

You can call us at 111-WEALTH (111-932-584) for immediate assistance. Our skilled professionals are always on hand to take care of your enquiries and requests with the utmost priority 24-hours a day, 7 days a week

Valet Parking

In order to make your visit to the bank more convenient, all our Premier Corners will offer you reserved and valet parking

Moreover, every element at Barclays Premium is specified to the highest quality, from technology to flooring, furniture, lighting and decor. Things are designed to facilitate the most resourceful banking service a client cal ever experience.

If a client needs to work, he can find a range of facilities to enable him to do whatever it is he needs to do. It can be a desk space, internet facility or a conference room. There is a special place for kids to play at every premium corner so that children can play while the parent is busy with work. (BARCLAYS)

Types of Positioning

Theory suggests different ways of positioning a product or a service. Barclays Premier can use the ne that suits or benefit it the most. These positioning tactics or ways are listed below:

Umbrella positioning

This strategy can be defined as creating an overall image of the company around which a lot of products can be featured individually. It we apply this in the case of Barclays Premier then it would be positioning Barclays as a whole through its benefits and unique selling propositions and then Barclays Premier and its products and services could automatically benefit from the positioning of Barclays in the minds of consumers. (Consumer Behaviour: buying, 2009)

Positioning against the Competition

This is when you compare yourself to your competitors in order to position yourself as different or better .e.g. Barclays Premier comparing its services to any other banking offering premium banking faculties such as CitiBank.

Positioning based on specific benefits

This is when the organization positions itself as different and better in minds of the consumers by listing down its unique characteristics and benefits that other find hard to provide. This kind of positioning would be most suitable for Barclays Premier as it has a list of benefits and unique features (listed in the report before). The Bank can use these unique and high class services to position itself differently in the minds of its target consumers.

Finding an ‘unowned’ positions

An organization can find a niche that is not already targeted by other organizations or something that is very challenging and hard but not something that cannot be done. (Assael, 1995)

Critical Reflection on Learning Outcomes

I had gone through the reading course material thoroughly before starting to work on the module and throughout the course but I was really looking forward to a practical experience or something which could help me clear my concepts in a pragmatic way. I really wanted to see the concepts and theories that I have studied in practice. I was intrigued to see how the firms make use of these theories in practical life and benefit from these theories at the market place.

I started my module by going through different products or services I find interesting so that I don’t lose interest while working on the module and I found the services offered by Barclays Premier inspiring so I selected as my subject for the module.

I was really enthusiastic and really looking forward to a great experience. I carried out a complete research while I was working on the module. I interviewed different people working at Barclays Premier and clients of Barclays Premier. I filled out questionnaires and visited different Premier Centers and observed things in practice. As I was working on my module puting myself into a position of a Marketing Manager at Barclays Premier, I really got confused that how the problem of declining sales could be solved.

Initially I could not dig out useful stuff out from me but then when I concentrated on the course material and tried putting each and every relevant concept in practice to solve the problem I came up with a lot of useful things and I felt like doing some thing real and productive.

But there was one thing which made me feel incomplete and that was that I could not apply all the useful theories and concepts that I have studied during the course. There was only a part of it which I could apply for the given situation and the problem that the Barclays Premier was assumed to go through.

Working on this was a great experience and it really enhanced my learning of consumer behaviour. I could practically apply some of concepts on some of the clients of Barclays Premier I interviewed. I could see how different factors could affect their behaviour and how prone their behaviour was to external factors. I learned how organizations can make use their consumer analysis to come up with tailored strategies that could help them prosper and solve different problems that they come across during their operations.

APPENDIX

Exhibit 1 (Leon G Schiffman, 2008)

External Influences

Psychological Field

Motivation

Perception

Learning

Personality

Attitude

Need Recognition

Prepurchase

Search

Evaluation of Alternatives

Film’s Marketing Efforts

Product

Promotion

Price

Channels and distribution

Sociocultural Environment

Family

Informal sources

Other non commercial sources

Social class

Culture an sub culture

“Input”

Consumer Decision Making

“Process “

Experience

Post decision

Behavior

Purchase

Trial

Repeat purchase

“Output”

Post purchase Evaluation

Exhibit 2 (Leon G Schiffman, 2008)

Cognitive Beliefs

Personality Traits

Attitude

Practices

Values

Va

SUBJECTIVE CULTURE:

Regional

Ethnic

Religious

Linguistic

National

Professional

Organizational

Group

behaviour

Behavioral Intension

Social Norms