Marketing at the Vanguard Group: Recommendation and Rationale Essay Example

of advice dependency.The products and services they are using also match Vanguard’s offering. The low level of supplementary actions to be implemented, combined with a decreasing competition for this segment of investors, as the competitors are fleeing from the below one million segment, leads to the expectation of high return on investment. Finally, even though the Managers are unlikely to be in the below one million segment, we believe that they are worthy of interest for Vanguard. Their high level of income, combined with their low level of advice dependency, makes their expected profitability high.

However, even though the products and services that they are looking for are matching Vanguard’s offering, the high level of competition in this investor segment mitigates the expected return on investment. Despite this last fact, the Managers are nonetheless an investor segment that Vanguard should aggressively market. The other investor segments of this alternative should not be focused on for the following reasons. The Financial Avoiders and the Live for Todayers have no money, and it is pretty self-explanatory that they are not possible Vanguard’s customers.The Adviser Dependants are also left aside, mostly because of the high costs related to serving them.

This leads to think that they might be unprofitable customers. There is also a lot of competition towards this investor segment. Finally, the Players are also disregarded in this recommendation. Even though they have a lot of money and could be relatively low cost to serve (through the development of an online trading platform), the kind of products that they are looking for does not match Vanguard’s offering.

There is also a lot of competition for this investor segment.These factors combined

lead to relatively low return on investment for marketing to them. We also disregarded Alternative 5: Try to attract new clients through the development of an outside distribution network (intermediaries). This situation seemed interesting for Vanguard because of the exponential increase in the number of potential clients, whom Vanguard doesn’t have to directly advise and serve about their products and services, combined with the high potential for profitability.

The development of this broad qualified sales force could also be done at relatively low development cost.The positive aspects of this alternative are somehow strongly counterbalanced by the fact that huge efforts of mass advertising would be required in order to inform the potential customers about Vanguard’s brand, and over whom Vanguard would have no control in the sale process. Vanguard would also have to face some strong competition in its relation with the intermediaries, who are not always the most loyal sales representatives. This weakens the expected return on investment for this alternative, and finally led to its rejection.