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Muscat bank is a public bank with founders known as Muscat, operating in the finance and insurance sector. This financial institution, with main individuals including Alissa AbdulRazak as the chief executive officer, is headquartered in Muscat, Oman. It offers products such as financial services that in the year 2011 produced revenues of nine hundred and sixty-one million dollars. In addition, its net income was $305.3 million in the same year, with total assets of $18.7 billion. In addition, Muscat Bank employees three thousand twenty-four people. In the sultanate of Oman, this bank is the leading financial services provider with strong presence in asset management, private banking, treasury, investment banking, retail banking and corporate banking. It has four thousand five hundred terminals, one hundred thirty-one CDMS, 386ATMS and over one hundred thirty branches. In addition, some of these branches are a representative office in Dubai, UAE, a branch in Kuwait, Saudi Arabia and in Riyadh, which are presumed to execute international operations. BMI Bank B.S.C Corporation, which is an independent bank in Bahrain, consists of forty-nine percent of Muscat bank stake. Furthermore, it also has a stake in Silbank Ltd, an investment banking entity in Saudi Arabia, a brokerage firm, ninety-seven percent in Muscat capital and forty-three percent stakes in Mangal Keshav Group, which is one of the most respected and oldest securities in the fasting growing Indian equities. For over seven years, this financial institution holds the rare distinction of being voted as the best bank in Oman by FT London the banker, Euro money and Global Finance for nine years in the arrow in the country of Pakistan. As the Middle East’s best employer, it is also the recipient of the prestigious Hewitt recognition. Hence, it was the first banking organization in the MENA region to be awarded the prestigious global recognition after it was declared an investor in people organization in the year 2007. In the Middle East, this institution was the first bank to be completely ISO9000:2000 certified in the year 2004.

Introduction and Objectives

Consumer banking or retail banking is the provision of bank services to individual clients instead of other banks, corporations and other companies. Services that fall under retail banking include credit cards, debit cards, personal loans, mortgages, transactional accounts and savings, although the institution also avails services of banking which caters for most of the government's demands and those of other businesses. Retail banking is one of the main divisions of the bank comprised of mobile and internet banking, cards, CDM, ATM and E-channels for the call center. Since Oman’s strategy is to increase the number of retail businesses, the demand for electronic banking services in various branches is also escalating (e.oman 2010). Moreover, most organizations are adapting to different retail business features like electronic transfers in order to remain relevant in the market which is becoming a common trend. This institution is one of the market leaders to adapt to retail business banking since the new innovative will separate it from other financial institutions which go for wholesale banking (MUSCAT, 2012).
Some of the banking entities are providing informative banking or wholesale banking rather than interactive transactions, which will give Muscat bank a competitive advantage over its rivals in offering this type of service (Ecommerce Journal 2009). Since Muscat bank has a large portion of the market share of customers, this new service will help in bridging the gap that exists between the customers and providers, for example, people will become more aware of the different banking services like internet banking, which is exhibited by the large usage of electronic services. According to statistics, in 2010, the total registration as per month of November was 134,926, 110,099 in 2009, which showed an increase in the number of registered customers and retail banking business. 1,430,399 in 2010 and 1,118,826 in 2009 were some of the increments made in the usage of services after they had been compared with the prior years. With the application of Arabic-enabled interface and other tools like SMS, there will be market dominance by the company for a given period because of the new services it would extend to its customers. Hence, this will attract more service provider to use retail business banking as a channel for bill payment, which will increase the revenues and profits of the organization.

Current Market And Company Situation Analysis

Situation Analysis

For purposes of understanding the environmental forces around all relationships of the bank, we shall have to build a good relationship with all the stakeholders which will characterize external and internal environments along with their evaluation.

External Environment

The analysis of external environment will be done with porter’s five forces of analysis because of other local banks which act as the main force of competition.

Porter's Five Forces

The first force is Competitive Rivalry on the local level. NBO, which is the second successful bank in Oman, will act as threat combined with HSBC, a competitor on the international level. It’s believed that they are always competing and they are very adaptive to technology. The second force is the threat of entry, whereby emphasis on retail business banking may create an event of law issues like the leaking of this new invention to the rivals prior to the date of launching it, which will look like the Muscat Bank is copying other banks' initiatives. The third force will be the power of the buyers, whereby customers will find it easy to use the service to withdraw their funds from any location for instance when paying for bills. The reason will be that they are transferring their amount of money physically to pay utility bills which will eliminate any form of fraud. Since the bank will be expanding to various locations, there will be many suppliers offering exclusive utility payments to the institutions because of a large number of clients it will be dealing with, hence improving on market share and efficiency. The last force will be the threat of substitutes like internet banking, which has become popular because of the initiative of the country to promote E-government. Therefore, there will be a need in doing another macro environmental analysis using the PEST when analyzing the microenvironment using Porter’s analysis (MUSCAT, 2016).

PEST Analysis

Political factors: The central bank may set standards and rules to make sure that interests of individual customers are protected from fraud, which may end up complicating the system of retail business banking.
Economic Factors: According to available data, the company started to gain profits in the year 2010 after it had recovered from the recession of 2008(Oman Observer 2010). It led to improvement in purchasing power of consumers and their salaries, whereby the entity was able to make good profits in the 3 quarters of 2010. Moreover, such improvements allowed development of the budget for departments accounted for by twenty-six percent (Sharif, 2010). In addition, it was also followed by social factors which affect the culture of doing things in the banking sector. It is also believed that this industry tends to be faced with rigidity when it comes to implementation of new ideas, for example, Arabic SMS banking meant to cater for retail banking will serve people who are not interested in other languages like English while executing their deals or businesses. Lastly, technological factors are also important while dealing with retail business banking because tools like the internet or SMS banking avails new avenues of doing business, for instance, shifting of attention from the daily visitation of physical branches to the remote way of receiving services (Bank Muscat 2009). The rationale of offering such services to individuals is that some people prefer to execute their transactions without the use of paper, which is a good strategy in making sure that all clients’ needs are catered for.

SWOT Analysis

This approach helps in capturing both the analysis of threats and opportunities of the external environmental factors. Since the bank has the largest market share, there will be low costs needed in terms of upgrading of some systems of retailing banking like saving accounts, current accounts, mortgages, personal loans and home equity loans among others. The management will be very adaptive to the new changes of this concept, and the current system will have the capability to add more language to cater for a variety of customers, acquiring of latest systems in the market of retail banking characterized by aspects like Themaar Education Savings for higher education or ensuring financial security for people after retirement (Themaar retirement savings plan), withdrawals and other payments services (Chen, 2013).
When it comes to weaknesses, other departments may not support in the marketing of this strategy. The application of different tools in this concept need support from the vendor and the limited employees to cater for the customer needs during the time of implementation, which is followed by opportunities of the new model. For instance, it will attract government collaboration and support since more people banking their money also benefits the government and there will be capturing of non-Arabic and non-English users in the market, faster bills payment by clients and a wider customer base tapped into by the Muscat institution. However, while executing this course of action, the bank is likely to face threats like law enforcement in case there is mismanagement of the service by the clients. International banks with advancement in technology may hinder the success of the strategy (ITA, 2010).

Market Segmentation

Target Market

Market segmentation analysis will be used in trying to get deep inside of the target market.

Target Market Selection

Concentrated marketing strategies and the mix of undifferentiated approaches will be applied by Muscat Bank as the targeting strategy to improve the satisfactory levels of clients and improvement of usage between potential customers and those that already exist.

Market Positioning

The bank will offer new services to the two segments that are crucial, new and existing clients who will have access to the services of retail business banking like social media account (Twitter) for customer service. Benchmarking and focus groups used for discussion and settlement of disputes for the first time and will be able to carry out transactions faster compared to if they had used other financial institutions in Oman. This will be followed by the second segment that will be responsible for the provision of SMS bill payment in Arabic to individual consumers and retail banking service based on the account holders of Muscat Bank (Alnsour and Al-Hyari, 2011).

Market Segment Evaluation

Since there will be new services and additional language to cater for individual consumers, there will be an estimation of customer increase by twenty-five percent compared to what was currently registered in 2009 (981,120 customers) compared to 110,099 customers in the year 2010. The organization will also incur costs during the implementation of retail banking in places where it has been ignored, and they will be in form of banners and brochures, ads and system upgrade to cater for increased number of individual customers.

Marketing Plan Objectives

The vision statement of Muscat Bank is to make sure that by 2010, it had accumulated over one million satisfied customers through continuous value addition to stakeholders. Moreover, retail business banking tools like internet and SMS banking will fill the thrust of customers who deserve to get unique services at any time anywhere with no hassle of waiting, which is one of the institution’s visions of making sure that there are compliance and customer satisfaction or we can do more as the improved version of the vision.

Marketing Mix Strategy Recommendations

Muscat bank account holders like the youth with ages between twenty-five and eighteen will be able to open up and hold a Shababi account on the international or local level. This will be followed by promotion Ads on the website of the company www.bankmuscat.com, radio station and in the newspapers to make sure that individual consumers are kept aware of the different services of the bank. All branch channels and ATM or CDM will receive banners and brochures. Customers like children are likely to win monthly prizes, for instance, in form of Al Mazyona Children’s Account rewards of OMR100 after they have maintained a monthly balance of OMR50. Moreover, their transactions will be recorded in their account statements. In addition, branch staff and call center agents will interact directly with customers (participants). The status of the customer will be established with a process that will be monitored by usual function in the banking core system for instance (Feedback Management System) or FMS will be able to access the daily report, quarterly or annual reports concerning the transactions of the entity(Times News Service,2015).

Evaluation Control and Recommendation

The bank will have to take a deep insight of how the system of retail business banking is effectively meeting its goals like covering the needs of different individuals consumers such as women, the youth education, among others at the end of the implementation time. Moreover, this will be done depending on the reports of the system while the institution is providing services. Since the bank has 140 branches, they will have to how much registration will be made at given period of time by the system. For purposes of establishing percentage increase, reports will be compared to the same months of the previous years.
However, while providing services to customers, Muscat bank may face some eventualities which will be offset by the products of bancassurance that the institution offers. This will be in partnership with some players AXA Gulf, which is a leading and the largest global insurance in the area. This will offer services to customers like health products and life insurance. Moreover, the bank would encourage strengthening its alliance with AXA Gulf because of the technical capabilities and regional expertise it will be bringing on board to deliver more services and value to the consumers of the bank’s products.

Budget

A table showing the implementation budget of retail business banking of Muscat institution

Item Quantity Price(OMR) Total(OMR in millions)
System upgrade 140 branches 55,000 7,700,000
Publishing ads on radio, newspapers 140 branches 13,000 1,820,000
Banners and brochures 140 branches 25,000 3,500,000
Overall TOTAL     13,020,000

 

 

 

 

 

 

 

The proposed budget for implementation of marketing services and system upgrading makes sure that more customers are lured into retail business banking, which will cost the following amount of money. Publishing Ads through radio stations and media newspapers will cost 1,820,000OMR for all the 140 branches, printing of banners and brochures will cost a total of 3,500,000 OMR for the one hundred forty branches, and then finally system upgrade will cost a total of 7,700,000 for all the branches. Moreover, this will also be accompanied by rewarding a branch that would have performed better in the region, and it’s from the above that the management is believed support the implementation of this Marketing Plan (Letha 2010).

References

BankMuscat (2009) BankMuscat widens reach of easy-to-use mobile banking service [online] availablefrom<http://www.bankmuscat.com/enus/PressReleases/Pages/pressreleases209.aspx> [23 December 2010]
Chen, C. (2013) "Perceived risk, the usage frequency of mobile banking services”, Managing Service Quality, Vol. 23, No. 5, 2013, pp. 410-436.
Ecommerce Journal (2009) 'Electronic banking in the Sultanate of Oman' Ecommerce Journal [online]availablefrom<http://ecommercejournal.com/articles/15282_electronic_banking_in_the_sultanate_of_oman> [23 December 2010]
ITA.(2010)ITAVision[online]availablefrom <http://www.oman.om/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hjA3cDA39LT1_vEF9HAyPjMDcvSx8zYxcXE_1wkA6zeAMcwNFA388jPzdVvyA7rxwA7n6oRg!!/dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfMzBHMDBPOUlNNFNWMTAySkZENThTNzJHMDc!/> [23 December 2010]
Letha, J. (2010) 'True leader'. Business Today [online] 01 Jun 2010. Available from <http://www.businesstoday.co.om/Archive/disCon.aspx?Cval=808> [23 December 2010]
M.S. Alnsour and K. Al-Hyari, (2011) “Internet banking and Jordanian corporate customers: Issues of security and trust”, Journal of Internet Banking and Commerce, vol. 16, No. 1, April 2011, p.1.
MUSCAT (2012).Bank Muscat Gives major thrust for Proactive Customer Service
MUSCAT (2016). Bank Muscat Launches Customer Service in Twitter
Oman Observer (2009) 'Oman's economic fundamentals remain strong'. Oman Observer [online] 05 July 2010. available from < http://main.omanobserver.om/node/15296> [23 December 2010]
Sharif, A. (2010) 'Bank Muscat Third-Quarter Net Income Increases 26% on Lending'. Business Week [online]14 October 2010.Available from < http://www.businessweek.com/news/2010-10-14/bank-muscat-third-quarter-net-income-increases-26-on-lending.html> [23 December 2010]
Times News Service (2015). Bank Muscat Committed to Sustainable Development of Oman. September 15| 3:02 PM
Times of Oman (2010) 'BankMuscat wins top Banker award'. Times of Oman [online] 14 December2010.Availablefrom<http://www.timesofoman.com/searchdetail.asp?cat=&detail=40548&rand=k78uVOv8QOKYqI9oSfHNhKBRSu> [23 December 2010].

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