Case Study: President’s Choice Financial
This case study is an analysis of President’s Choice Financial (PC Financial) impressive products and effective marketing position in the financial service industry. The study highlights the success and provides examples of how to transfer supermarket brand loyalty to financial service provisions (President’s Choice Financial: Retailer success in the banking space, 2010, p.1).
The President’s Choice (PC) brand is a sub-brand of the giant supermarket chain Loblaws based in Canada. PC spent a considerable amount of time and resources elevating the brand. Products are featured in a flyer called the Insider Report emphasizing on uniqueness and high quality (President’s Choice Financial: Retailer success in the banking space, 2010, p. 3).
In 1996, Loblaws and the Canadian Imperial Bank of Commerce (CIBC) came together in a joint venture called President’s Choice Financial. PC Financial utilizes the high quality and trust set by the PC brand to market products and services to customers. In comparison to other banks, PC Financial offers free banking which saves Canadian consumers $150 every year in service fees, offering competitive rates on mortgages, instant savings accounts to tax-free investment products, a MasterCard, and loyalty points.
The 2010 case study suggests the PC Financial model is a serious contender for a series of UK supermarkets. That 51 per cent of consumers would buy products from traditionally non-financial organizations like supermarkets. In the last nineteen years, PC has failed to keep up with technology and the structure of their loyalty program. They have maintained the same marketing strategy and campaign since 1996. The PC brand has been weakened by the departure of CIBC departure and its retention of the PC Financial service.
Marketing theories such as brand identity, target audience, marketing strategy, and marketing campaigns will be used in this report to analyze the information and to prepare a better solution. There is the assumption that PC Financial should be applied to the UK, or other, supermarkets. Given the fallout with CIBC in 2017 PC Financial is not the best model to use.
TECHNOLOGY AND THE STRUCTURE OF THE LOYALTY PROGRAM
Since the launch of PC Financial in 1996, technology and the structure of loyalty programs have changed drastically. Customers want to collect and redeem points faster. Instead of collecting loyalty points customers want cash rewards that can be saved towards larger purchases. The loss of the PC Financial debit card paired with PC points will be noticeable since Canadians on average only carry seven out of 12.2 loyalty cards an increase of 25 per cent in the last four years according to marketing agency Bond Loyalty (CIBC-PC Financial breakup just another change for consumers in world of loyalty points, 2017, para. 14). PC Financial may have been in the forefront in 1996 but they are seriously falling behind in the world of loyalty programs this can be seen in Appendix A. The value of one loyalty point converted into Canadian currency in comparison to similarly structured loyalty programs.
FREE BANKING AND FREEBIE MARKETING
PC Financial does not pay for expenses associated with a brick and mortar model. The PC Financial free chequing account is used as a free promotional product and in order to gain a profit, PC Financial needs customers to purchase its other financial products and PC products found in supermarkets. The PC point system is another promotional product that works as an incentive to encourage customers to filter money into the PC brand. Currently, when customers shop and purchase products the money isn’t directly filtering into PC Financial but its parent brand PC. The products that PC Financial would gain a profit on are mortgages, loans, and line of credit. However, they are not comparable to today’s current market this can be noticed in Appendix B. Customers, not satisfied, turn to other banking institutions for better prices but in the meantime still maintain the free banking. Comparison of chequing accounts and incentives are found in Appendix C.
WEAKENED THEIR BRAND
There is no doubt that the PC brand has been weakened by the departure of CIBC and the loss of PC Financial banking service. PC will continue forward by maintaining its MasterCard and loyalty program. The high quality and trust associated with the brand have now been broken.
PC Financial is no longer in the running with having the best loyalty program. There is no social need or self-fulfillment associated with the PC points program. In order to improve and maintain customer satisfaction with the program PC will need to revamp their marketing strategy. Refocus on brand loyalty, motivation, and personality associated with the brand. The advantages would be customers feeling loved, needed, and having a desire to be part of the PC brand and loyalty program. The disadvantages would be customers receiving the PC Plus card or downloading the app to never use it again. They may shop at Loblaws supermarkets but not as frequently.
Since 1996, PC Financial has continued to promote free banking while failing to compete with other online and transitional banking institutions. A business needs to have a consistent source of income in order to thrive. PC Financial created a disadvantage of maintaining the same promotional marketing strategy for nineteen years with funds depleting from its business. If PC Financial wanted to benefit they would have revisited their business model canvas and marketing strategy. There is still time for Loblaws to promote their newly established online store to sell food and non-food products. Appendix D shows a visual representation of how customers can shop online using the new platform. This would bring them back into the competitive market against Amazon. They would have an advantage of selling fresher food in comparison to Amazon.
The failure of the PC Financial brand is definitely reflected upon its parent company. In order to recuperate from this failure, PC will need to focus on marketing strategies to promote trust, relationship, and loyalty with the brand. Customers need to know that they can trust and connect back with the brand. However, failure of the PC Financial brand is an obstacle and customers may never forgive the PC brand.
There is no way of improving the PC Financial brand since it no longer exists with the Loblaws or PC company. In order to mend the PC brand, a new marketing strategy should be considered. The marketing strategy should be geared towards reestablishing the brand identity, relationship between the brand to the customer, trust, and loyalty. The PC loyalty program should be revamped to incorporate the brand loyalty established by the marketing strategy. If Loblaws were to create an online market and sell fresh food they could attach the PC loyalty program. This would allow another venue for customers to use PC points.
The best solution would be to maintain and promote the Loblaws an online store to market food and non-food products. This would give them an advantage over Amazon, their competitor, especially when it comes to the freshness of their products. Customers would be able to use their PC points across platforms from the brick and mortar model to the online platform. Work to establish a smoother transition between purchases and using the loyalty program. Develop the relationship marketing strategy which will help re-establish the brand identity, loyalty, and trust. Having an online platform would elevate Loblaws and its sub-brands making them modern in an age where customers buy the majority of their products online.
Loblaws needs to take action quickly in regards to the PC brand. They will need to establish a marketing strategy and improve their loyalty program as soon as possible. The break up from CIBC and the departure of the PC Financial brand is still fresh. Customers will need to know that Loblaws and the PC brand haven’t forgotten them. Relationship and trust are key in order to maintain the PC brand. Once the strength of the brand has been reestablished then can Loblaws move forward with developing an online platform to sell their products.
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