A1. New Products or Services

The organization involved in this case is ABC Bank (fictitious name), which operates within the banking industry. Two new products or services that the bank can offer on a global market are a free bank account that is built around API (Application Programming Interface) and mobile ATM services for SME (small medium enterprises) customers. The free bank account built around the API will be used to supplement account services with innovative banking products and internet payments. With regards to the mobile ATM, it will be housed in an electronic vehicle and will operate as a secure multi-functional ATM and depository service.

A1a. Methods

There are three methods that were used in determining whether there is an existing global market as well as a need for the new product or service. The first method is using observation to assess the current trends in the banking industry. The observation shows that there are banks that are already implementing accounts under the API platform and also offering mobile ATM services.  Banks are adopting the API platforms in order to enhance digital transformation across various services and products. Obay (2014) asserts that this is something that is becoming urgent in the banking sector since the best-in-class app can make the difference between whether the bank retains its customers and it loses them to competitors. Among the banks that have embraced this concept are Silicon Valley Bank and Wipro Bank among others. Mobile ATM service is also a concept that is being adopted by other banks. There are banks that are going all the way to win awards on the grounds of this service. A good example is Idea Bank from Poland that initiated the mobile ATM services meant for SME consumers. In 2015, the bank received an award from the Global Banking Innovation Awards with regards to innovation in payments as a result of the mobile ATM service. A service that is attracting recognition in such a ceremony means that it has an existing global market. If other banks are adopting these services, it surely means there is a need and a favorable global market.

Another method that was used to determine the existing market and need for these services is conducting secondary research on matters pertaining to consumer demand. The research was based on relevant materials found in varied internet sources. A good example is research into the free account built around the API. Fidor Bank was identified as a favorable case study in this respect. Fidor Bank, which is located in Germany, established this service and the response was quite plausible. By February 2015, the bank had attained more than 75,000 legitimate banking customers. This was an increase from 25,000 that was prevailing two years prior (Skinner, 2015). This shows that it is service being demanded by customers hence it has an existing global market.

The third method was all about comparing the new service and product with what exists currently (i.e., bank accounts without API platforms and immobile ATMs). Among the major differences that existed is the one revolving around convenience. The new product and service are likely to bring more convenience to the customers compared to what exists currently. Anything that brings convenience to consumers definitely has a viable market. The convenience brought by the API platform is that it allows partners and customers to connect their computer systems directly with those of the bank. This open financial ecosystem will give app providers the opportunity to continuously increase service or product ranges in order to enable customers to choose what they want. The mobile ATM service, on the other hand, has an app for real-time tracking of the vehicles’ location so that a consumer can meet it or initiate an advanced booking. This service meets many customer related mobile solutions hence prompting people to put their money in banks something that increases their prospects of getting a loan in future (Skinner, 2015).

A1b. Competitive Advantage

The competitive advantage that ABC will have through offering the above services is efficiency as a result of adapting to current technologies. The bank will be efficient in that it will be delivering to customers what they want. The banking industry keeps changing every now and then as new trends come up. Changes in technology in this sector have been rampant in order to meet the needs of the consumers. Being at the forefront in adapting varied technological proponents will increase the bank’s efficiency since it will be providing consumers with products that they desire. The products and services introduced are also likely to bring convenience on the side of consumers. Convenience is something that many customers tend to look for before they engage with a given organization. No one wants to go through a lot of hassle in order to derive satisfaction from a product or service. As a result, the bank will have a competitive advantage in attracting new customers compared to the competitors that are lagging in the technological adoption.

A1c. Inherent Risks

The services elaborated above would help the organization to move forward, but they still have underlying risks that might make them detrimental to the organization. When it comes to the API platform, there is an inherent risk of developing poor quality APIs. Based on the developers that will be tasked with this responsibility, they might end making varying mistakes while developing the API. The mistakes might result in the development of an API that does not function appropriately on mobile devices one that breaks every now and then. This would lead to dissatisfaction on the side of consumers. This risk can be minimized by the organization have employed developers with proven prior track record with regards to APIs. Prior to the release, the API code also ought to be manually checked by a security expert in order to ascertain its condition.

When it comes to the mobile ATM service, the inherent risk is security. There might be the probability of armed robbery given the mobile nature of the ATMs. The physical attacks can be conducted in a variety of ways with the attempt of breaking into the vault or safe inside the ATM. In this case, robbers can steal the whole thing to go and break it at their leisure. This risk can be minimized by way of providing adequate security for the mobile ATMs. This will include the escort by guards that are adequately armed.

A2. Customer Relationship Management (CRM) Software

Oracle CRM seems to be the most favorable for this organization. This is based on the fact that this CRM has an impressive lead scoring capacity and advanced analytics and reporting. The CRM also offers tools for marketing departments to help track and improve the organization’s activities (Obay, 2014). In this case, the Oracle CRM will help in tracking the number of new customers that will have been induced to work with the bank as a result of introducing the API platform. Through the CRM it will also be possible to determine the products and services that are more appealing to customers within this platform in order to put more emphasis. For the mobile ATM service, the CRM will help in analyzing the demand patterns. It will make it easier to attain the different demographical analytics that will help in making decisions on the way forward.

Oracle makes things even better due to its scalability prospects. The CRM has numerous features compared to most competitors. This can be ascribed the to the fact that it emanates from a company that has been in operation for a long time hence making it possible for the company to develop products that offer more natural connections and integrated experience (Obay, 2014). Oracle CRM’s capacity to record, track, report and analyze is quite valuable. As a result, it will help the relevant organization more pertinent and emotional connections with the customers.

A3. Distribution Channel

The distribution channels to be used for these services are digital banking and advanced ATM kiosks. Digital banking will be associated with free bank accounts that are built around the Application Programming Interface (API). This API platform will be enabling partners and customers to connect directly to the bank’s computer systems. This makes digital banking as the most suitable distribution channel since customers will find it easy to engage through tablets, smartphones, and laptops among others. Surface Pro predicts digital banking will keep on growing coupled with the demand for parallel, seamless device-switchable services (Obay, 2014). This makes digital banking a suitable distribution channel for ABC Company. Advanced ATM kiosks, on the other hand, will act as the distribution channel for the mobile ATM service. The mobile ATMs are expected to perform a variety of banking tasks and ensure that all the operations have been synched in the customers’ accounts. ATMs are evolving to the extent where they can be used for advanced multi-functions. The banking industry commentators have started to view the ATM-mobile integration as something inevitable (Obay, 2014). This is something that boosts the prospects of advanced ATM kiosks as a favorable channel both at present and in future.

A3a. Key Considerations

Among the considerations that ABC Bank should bear while entering the global markets is trade agreements and political factors. When it comes to trade agreements, the bank should focus on those countries that have established free or favorable trade agreements with the parent country. This is because there will be the elimination of varied trade barriers hence making it easier to operate in these countries (Stadtler, 2013). With regards to political factors, they are usually pertinent to the regulations that are established within a certain industry. The banking sector is usually regulated, and as a result, ABC has to assess various regulations that are available in potential global markets in order to ensure that they will not hinder the desired operations. Failure to conduct sufficient research on the available regulations might be detrimental to the organization’s operational plans (Baylis et al., 2013).

A3b. Global Supply Chain

The complexity associated with the global supply chain is likely to affect the proposed services in varied ways. Emergence of globalization has come with the aspect of expecting quality products or services that are produced faster and cheaper. This aspect has made it even more tricky choosing suppliers in the array of the global suppliers that are available. Going for the lowest prices in this case while choosing the suppliers might result in poor customer experiences while interacting with the services (Christopher, 2016). This is because the services might not attain the desired satisfaction due to the use of substandard resources and technical know-how.

A4. Major Pricing Strategy

The major pricing strategy that is favorable in the introduction of these services is the penetration-based pricing. This pricing is deemed favorable since it will increase the potential of capturing a substantial market share and establishing customer loyalty. This pricing strategy will aim at setting the initial price lower and later move it to a standard price. This strategy will work in attracting customers that are on the look-out for a bargain price. When the price is then set to the standard level, the customers are expected to remain loyal given the quality of services that they will be offered. The convenience that these services bring to the consumers will help to retain them as it will be worth the increase in price.

A4a. Costs Associated with Development and Launch

The costs that will be included in developing and launching these services will be varied. Among them is the cost of establishing the API platform. There will be a need to employ competent developers that have a favorable track record in order to ensure that a quality platform has been developed (Stadtler, 2013). Costs of the acquisition of mobile ATMs and the vehicles to carry them will be incurred too. There will be costs of upgrading some of the ATM features in order to make them more secure. Investment on the security prospects to ensure that the ATMs have been protected from theft will be incurred too. During the launch process, there will be massive costs incurred too on the promotional aspects These are just but the major costs that are going to be incurred not putting much focus on other minor relevant costs.

A4b. Consumers Acceptance of Price

Consumers are likely to accept the set prices given that the prices are penetration-based. These are the lowest prices that the consumers can get hence the probability of acceptance is very high. Furthermore, the accounts being offered around the Application Programming Interface (API) will be free. As a result, consumers cannot have an issue with the pricing here. The mobile ATMs will also enable them to conduct varied banking services at lower costs while making things convenient for them at the same time. This is something that sounds very acceptable.

A4c. Competitor Prices

Not many banks are offering these exact services. The banks that have implemented them have opted for different approaches. With regards to accounts built around the API platform, there are banks operating them on a free while there are other making varied charges. However, it is not easy to ascertain the exact charges since there seem to be hidden charges that are never outlined clearly to the customers. For such reasons, it is not feasible to evaluate competitor prices.

A5. Promotional Strategy

The promotional strategy that will be used to promote the services will be the customer referral incentive program. This is a way of encouraging existing customers to refer other customers to the organization. Among the incentives, it would include discounts, cash rewards among others. Potential customers are likely to heed the advice of their colleagues and friends in case they refer a product or service due to the trust that exists (Christopher, 2016). Current customers will also be compelled to spread the word about the existing products due to the favorable experience that they will have experienced too.

A5a. Mass and Social Media Channels

The mass media channels that are going to be used for the promotional purposes are television and the newspaper publications. When it comes to social media, the company should opt for Facebook and Twitter.

A5ai. Justification of Media Channels

Television is among the oldest mass media channels that exist in the current market. This means that it is something that most people are aware of and encounter on their daily lives. As a result, the use of television will ensure that the message being conveyed will reach as many people as possible. The channel is also favorable for all the demographics (Christopher, 2016). When it comes to the newspaper, the media channel tends to bring more targeting options and it is not intrusive. The aspect of not being intrusive is because this media does not propagate force-fed messaging. Readers instead seek the advertisements since they are in designated areas. Since the readers do not feel as if they are being forced to view the adverts, they will view them with an open mind and are likely to take action since they will have a clear understanding (Stadtler, 2013). With regards to targeting options, newspapers offer a variety of ways to target the desired audience. This is through aspects such as zoning or using a niche publication to target a certain audience.

Facebook and Twitter have been chosen as the preferred social media channels due to their popularity among the masses. These are platforms that have been embraced by many people hence they will help in reaching out to a substantial number of potential customers. The platforms are also very influential as many people are out to observe what the others are doing so that they can also give it a try (Christopher, 2016). The more people will be seeing or talking about the services being offered by ABC the more curious the others will become and result to being prompted to experiment.

A5b. Sales Promotion Activities

The promotion activities that will be used will include discounts and loyalty incentives. Discounts will be offered on various charges that the organization has on varied products and services that customers will be consuming. A reduction on prices on various occasions is something that is likely to make customers happy and prompt them to continue utilizing the company’s products and services (Stadtler, 2013). Loyalty incentives, on the other hand, will be given to consumers that have used the prescribed services for a significant period. The incentives might come in monetary terms or other ways that the company deems it applicable. This will prompt people to continue using the services so that they can benefit in the long-run.

References

Baylis, J., Smith, S., & Owens, P. (2013). The globalization of world politics. OUP Oxford.

Christopher, M. (2016). Logistics & supply chain management (1st ed.). Harlow [etc.]: Pearson.

Obay, L. (2014). Financial Innovation in the Banking Industry (1st ed.). Hoboken: Taylor and Francis.

Skinner, C. (2015). The most innovative banks of 2015 – Chris Skinner’s blog. Chris Skinner’s blog. Retrieved 8 January 2017, from http://thefinanser.com/2015/10/the-most-innovative-banks-of-2015.html/

Stadtler, H. (2013). Special Topic Forum on Supply Chain Management in Emerging Markets: Critical Research Issues. Journal Of Supply Chain Management, 49(1), 116-116. http://dx.doi.org/10.1111/jscm.12017

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