El Banco and United Commercial Bank
1. Compare and contrast the strategic service vision of El Banco and United Commercial Bank.
Strategic Service Vision Element Service Delivery System Providing informal atmosphere to differentiate services Due to focus on the Hispanic customers, El Banco allocated the branch at a more convenient location for a easy accessible to the community Hire employees based on Spanish-speaking Operating Strategy Focused on fee-based services, such as cash third party checks Offers home mortgage financing to undocumented individuals Mimic Western Union and offer international money transfers Providing soundness and safety atmosphere to differentiate services Due to focus on the Chinese-American customers, they have 46 branches in California.
Hire employees based on Chinese-speaking Has a well-articulated cultural focus on South Asia Focused on time deposits Offers loan to business owned by Chinese-Americans and their families Providing high interest rate for savings accounts and time deposits Charges much lower account fees than other banks Offers a full-featured trade finance department, such as issues letters of credit Service Concept Focuses on the basic financial service desired by Hispanics Become the only bank that offers some services to the illegal aliens Mimic Western Union which is one of the most trusted financial services brands among Hispanics Target Market Segments Latino customers Undocumented individuals Some customers that focus on the safety of international funds transfers 2 El Banco United Commercial Bank – Providing soundness, safety and conservative service to the Chinese-American community – Focus on business and real estate lending within this famously entrepreneurial group. – Chinese-American customers Some customers that focus on the high interest rate and safety Some customers that work on import-export business 2.
Identify the service winners, qualifiers, and service losers for El Banco and United Commercial Bank. El Banco Qualifier Convenience Convenient location accessible to community Personalization Spanish speaking bank employees and informal branches atmosphere which are desired by Hispanic community United Commercial Bank Soundness and safety A bank should have a strong financial background and it should be careful in approving loans so that it will not collapse easily. For example, the average loan-to-value ratio for UCB’s commercial real estate loans is 58% while other banks are around 80% on average Convenience A bank should be reachable everywhere by its customers.
UCB has 46 branches in California and greater in Los Angeles. There is also 1 branch in Hong Kong Personalization It serves Asian-American Community so it is important to employ several Chinese-speaking representatives with whom the Chinese customers can communicate Service Winner Banking service Products include deposit accounts, fee-based check cashing, home mortgages, and international money transfers. Among the mentioned products, few of them are provided by the other banks which differentiate El Banco from the others Service Loser Pricing By charging high fees, El Banco may affluent customers who seek lower cost services Price UCB charges lower account fees than others.
Services facilitating import-export business UCB offers a full-featured trade finance department that issues letters of credit and other services that can facilitate the business The elements for the service loser will be the same as service qualifier. Since qualifier is the expected level attained on the competitive dimension, the elements become losers when the bank fails to deliver them at the expected level 3 3. What are the differentiating features of banks that target ethnic communities? Since the market size of banking industry is so big, while the marketing strategy base on ethnic communities divided people by ethnic, which also pertaining to different culture, languages, colors etc.
Such kind of strategy helps to simplify business and services guidelines and bankers could focus more on their target market. Functions of target on ethnic communities would be as follow: A. Limited market segment Since ethnicity marketing focus on the ethnic of the target market, which is in fact a limitation of the market size of the business. B. Centralize the business strategy As market size has been limited, business strategy could also be centralized since business or services is designed and provided to fulfill the need of certain ethnic with similar culture. Bankers could pay attention to the development of their target market and design services or products to fit their unique need. C.
Highlight a typical culture within the mass marketing environment Base on point 1 & 2, since ethnicity marketing focus on a group of people within the mass marketing environment, which is in some ways highlight the culture of a typical ethnic since there is differentiation when comparing with others. D. Get ethnic recognition Base on point 3, since what the bankers do is in fact do help on highlight the culture of certain ethnic to others, it’s more easy to get ethnic recognition and in fact, it’s potential of expanding the market size within the group – more people from the targeted group would be more willing or recommended to choose the bank under the influence of ethnic recognition. E.
Possibility of business expansion With a successful result of ethnicity marketing, bankers may consider to expand their business in few ways includes increasing the service points, building up new branch with marketing on different ethnic. Therefore possibility of business expansion could be larger and it’s true that the stronger a bank could be, the more confidence the customers would have. F. Create brand image and characteristic Since ethnicity marketing is different from traditional marketing strategy of most of the banks, while the services or products that a bank provide could also be every different from another if they are targeting in different ethnic, brand image and characteristic would be created since service style could be changed within different cultures. 4