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PUBLIC BANK
1.0 BACKGROUND OF PUBLIC BANK MALAYSIA
A PREMIER BANKING GROUP IN MALAYSIA
The Public Bank Group is the third largest banking group in Malaysia by asset size with total
assets of RM305.73 billion as at the end of 2013. Public Bank is listed on the Main Board of
the Bursa Malaysia Securities with a market capitalisation of RM68.67 billion as at the end of
2013, and is ranked second among all the public listed companies on Bursa Malaysia
Securities in terms of market capitalisation.
The Public Bank Group primarily focuses on retail consumer banking business with leading
market shares in financing for residential properties, commercial properties and passenger
vehicles as well as in sales and management of unit trust funds in Malaysia. The Group has
been achieving consistent growth in its financial performance, giving it a track record of
unbroken profitability over 47 years since it commenced operations in 1966. Today, the
Group delivers the best in return on equity, cost efficiency and asset quality when compared
to its peer banking groups in Malaysia. As at the end of 2013, the Group achieved net return
on equity of 22.4%, cost to income ratio of 30.7% and gross impaired loans ratio of 0.7%.
47 YEARS OF GROWTH
Public Bank was conceptualised and established as "a bank for the public" by Tan Sri Dato'
Sri Dr. Teh Hong Piow, its Founder and Chairman. On 6 August 1966, Public Bank first
opened its doors for business in Kuala Lumpur with 32 pioneer staff. Within five weeks of its
first opening in Kuala Lumpur, the Bank opened a branch in Melaka, followed by another
branch in Ipoh the following year. Thereafter, the Bank continued to expand its network to
cover Penang, Johor Bahru and progressively covering the Peninsular and by the mid-1980s,
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to East Malaysia. On 6 April 1967, Public Bank was listed on Bursa Malaysia Securities (then
known as the Kuala Lumpur Stock Exchange).
In the early 1990s, Public Bank began its expansion overseas and ventured into banking
operations in Hong Kong, Cambodia, Vietnam, Laos and Sri Lanka.
To-date, the Public Bank Group has grown into a premier banking group with over 17,900
employees within the Group. In Malaysia, the Bank has 258 well distributed branches. The
Group's overseas operations comprise 124 branches, with 83 branches in Hong Kong, 3
branches in China, 25 branches in Cambodia, 7 branches in Vietnam, 4 branches in Laos, 2
branches in Sri Lanka and 2 representative offices in Shanghai & Shenyang.
The Public Bank Group has expanded its service offerings over the years and become a
leading financial services provider. The Group currently offers a comprehensive range of
financial products and services comprising, amongst others, personal banking, commercial
banking, Islamic banking, investment banking, share broking, trustee services, nominee
services, sales and management of unit trust funds, bancassurance and general insurance
products. The Group is serving a large customer base of individuals and business enterprises
totalling over eight million customers in Malaysia and in countries in which the Group
operates.
Public Islamic Bank, a wholly-owned subsidiary of Public Bank, commenced its full-fledged
Islamic banking business in 2008. Its focus is on Islamic consumer financing and retail
commercial financing to business enterprises.
Throughout its 47-year journey of growth, the Public Bank Group's sustained profitability
track record showed its strong commitment and capability to deliver excellence in providing
banking services to its customers, evidenced by the strongly visible PB Brand. Today, the PB
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Brand is synonymous with superior customer service, prudent management, strong corporate
governance, strong asset quality and sustainable profitability.
FOCUSED AND CONSISTENT GROWTH STRATEGY
The Public Bank Group's growth strategy remains consistent, which is to pursue organic
growth in the retail banking business, focusing on retail consumers and small and medium
enterprises ("SMEs"), and striving to further increase its leadership in the retail banking
market. The Group's retail banking business continues to target retail consumer and
commercial loans and financing, deposits and fee-based businesses.
To drive business growth and increase its market share in retail banking, the Public Bank
Group leverages on its well-established customer service infrastructure, processes and
practices to deliver prompt and consistent service to meet the needs of its customers.
In the retail lending business, the Public Bank Group continues to focus on growing
residential mortgages, passenger vehicle financing and lending to SMEs. Given the
increasingly competitive market where loan products are highly commoditised, the Group
actively competes in the market for business growth and increased market share by
differentiating itself through its highly efficient customer service delivery standards. As at the
end of 2013, the Public Bank Group achieved total loans and financing growth of 11.8%
which is higher than the domestic banking industry's growth rate of 10.6%. Public Bank
continued to lead in residential mortgages, passenger vehicle financing and commercial
property financing in Malaysia, with market shares of 19.6%, 26.5% and 33.8% respectively.
The Public Bank Group has a strong franchise in the deposit-taking business. Customer
deposits have been expanding steadily, both in terms of deposit customer base and the amount
of deposits placed with the Group. As at the end of 2013, total deposits from customers of
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Public Bank in Malaysia recorded a growth rate of 11.6%, which is above the domestic
banking industry's growth rate of 8.5%. This demonstrates the high level of customer
confidence in Public Bank in safeguarding their funds.
Growing fee-based revenue remains a key strategic focus of the Public Bank Group, with
emphasis on its unit trust business, bancassurance and various fee-generating products and
services. The Public Bank Group's wholly-owned subsidiary, Public Mutual, accounts for a
significant proportion of the non interest income of the Group. Public Mutual remains as a
dominant player in the private sector fund management industry in Malaysia with total assets
under management of RM62.50 billion, commanding a leading market share of 41.2% as at
the end of 2013 due to its superior fund performance, strong distribution capabilities and
strong branding.
STRONG FINANCIAL RATINGS
The Public Bank Group continues to be accorded strong credit and financial ratings. Standard
& Poor's reaffirmed Public Bank's A-long-term rating and A-2 short-term counterparty credit
rating with stable outlook. Moody's Investor Service also reaffirmed Public Bank's foreign
currency long-term deposit rating of A3 and short-term deposit rating of P-2, and revised its
foreign currency deposit rating outlook from stable to positive following the revision of
Malaysia sovereign rating outlook to positive from stable. Rating Agency Malaysia
reaffirmed the Bank's long-term rating of AAA, the highest rating accorded by Rating Agency
Malaysia, and its short-term rating of P1.
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AWARDS AND ACCOLADES
The Public Bank Group continues to earn accolades and appreciation for its sustainable
financial performance and superior management. In 2013, the Group was honoured with best
bank awards and excellence in corporate governance by national and international
publications, including the Minority Shareholder Watchdog Group. These were in recognition
of the Group's consistent record of financial performance and distinction in the key areas
expected of a banking institution by its shareholders.
Founder and Chairman of Public Bank, Tan Sri Dato' Sri Dr. Teh Hong Piow, continues to be
honoured with awards of excellence for his sterling leadership and extraordinary
achievements, as well as his invaluable contributions to the Public Bank Group, and to the
banking industry in Malaysia and in the region.
CORPORATE SOCIAL RESPONSIBILITY
The Public Bank Group remains committed to support the community as a responsible
corporate citizen. The Group's corporate social responsibility ("CSR") initiatives are focused
on nation building, enhancement of the marketplace, promotion of the workplace and
environment conservation. The Group supports the community through programmes such as
education, graduate employment, professional development and healthcare as well as support
of the underprivileged.
As a long-term business strategy, the Public Bank Group will consistently invest in staff
development to enhance core competencies of the staff, in order to boost their contribution,
productivity and efficiency. The Group also believes that implementation of CSR will
enhance the reputation and standing of the Bank, leading to greater competitiveness and
higher sustainability of returns to its stakehold
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PUBLIC BANK
OUR COMMITMENT
In an increasingly competitive financial landscape, the Public Bank Group will never rest on
its laurels. In spite of its success, the Group will strive harder to deliver value to its
stakeholders and sustain its legacy of strong growth and leadership. To its customers, the
Group commits to deliver excellent customer service and to be more innovative in providing
superior financial products and services to meet increasingly sophisticated customer demand.
To its shareholders and investors, the Group will continue to enhance shareholder value via
excellent financial performance and strong corporate governance. To its staff, the Group will
continue to invest in human capital development to enhance core competencies and
productivity.
COMPLIANCE
The Public Bank Group is required to comply with the regulatory Anti-Money Laundering
and Counter Financing of Terrorism (AML/CFT) requirement and the guidelines of the Bank
Negara Malaysia (Central Bank of Malaysia) to combat against the uses of the banking
system for money laundering and financing of terrorist activities.
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2.0 OBJECTIVE
This marketing strategies is for expanding selling and demanding of Public Bank
products and services to a rural people and city folks based on the experience of Public
Bank to increase profit. In particular, our focus more on the following actions:
i. To recreate client responsive product modification
ii. To achieve new or unconventional marketing and product education activities
iii. To create a virtual organization a technology and other existing distribution channels
iv. To build a phased rollout business before commencing operations
v. To achieve a customer value of cross-selling
vi. To achieve personal touch by Technology
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3.0 TYPE OF PRODUCT BY PUBLIC BANK
3.1 CREDIT CARD
Most if not alls today offer credit card facilities to its customer. Public Bank Berhad, one
of the most reputable banks in Malaysia offer both Visa and Mastercard Credit Cards
which are provided under several categories.
Credit card services are among the most popular products offered by Public Bank Berhad
for its customers where they are given a certain credit limit for spending on purchase of
products and services.
As it regulation from the goverment of Malaysia, customers who want to apply for a credit
card must fulfill all the following criteria :
They must be above 21 years of age with a constant source of income
Income per year must be at least RM24,000.
To apply for a credit card, you will need to provide the followings documents to prove
that you have met the criteria. This include :
The latest 3 months payslip from your current employer
Offer letter of the position you are holding
3.1.1 Types Of Card
Public Bank offers a wide range of credit cards which are either Visa or Mastercard.
These cards are then further expanded to provide additional services and privileges for
certain segments of customers which are commonly known as co-branded cards which are
colloboration between the bank and other companies. This means that you will enjoy extra
privileges when you are using the card for the specific co-brand.
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i. Classic and Gold Cards
The Classic and Gold visa and Mastercards are the most common types of credit cards.
Between the classic and gold cards, the main difference is the minimum income you
should have which will the govern the credit limit which will be offered to you.
ii. Visa and Mastercard Platinum
The platinum cards are targeted for those in the higher income bracket where you will
enjoy platinum privileges. However, this is mainly meant for those in the managerial
levels in which they will need more credit facilities.
iii. PB Visa Electron
The Pb Visa Electron card is actually a debit card offered by the bank with credit card
facilities.
iv. PB-Esso Mobil Visa Gold Credit Card
This card comes with privileges like a 5% returns on fuel and other non-fuel purchases at
Mobil, esso and Petron stations around the country.
v. Mutual Gold-PB Visa Platinum
This card is offered only to Mutual Gold and Mutual Gold Elite Members of the Public
Mutual Fund.
vi. PB Visa Infinite Credit Card
The Pb Visa Infinite Credit Card is a special card which is extended by invitation to
privileged customers who will enjoy more benefits and higher credit limit.
vii. PB Visa Commercial Card
The Visa Commercial Card is meant for coporate users which are often extended for its
employers for small operational purchases.
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viii. PB-AIA Visa Gold Credit Card
This card is meant for AIA insurance policy holders who will enjoy 2% cash rebates for
making their payment through the credit card and other purchases.
ix. PB Executive Mastercard
This card is among the standard cards offered by Public Bank. You will only need a
minimum of RM24,000 yearly income. This card is available in different colours to better
reflect the personality of the card holder.
3.2 DEBIT CARD
i. PB Day2Day Visa Debit Card
It is an ATM Debit Card with Visa Worldwide Acceptance for all purchase , enjoy
convenience of Online Transaction/Payment , 0.8% Cash Rebate and Unlimited Cash
Mega Bonus.
There are benefits of PB Day2Day Visa Debit Card :
Card for petrol , grocery and other retail purchases
0.8% cash rebate on any amount spent on petrol and grocery.
Unlimitd cash rebate of 0.3% on any other retail purchase. No maximum cash
rebate.
PB Day2Day is accepted in as many as 29 million Visa merchant locations
worldwide. You can also make online purchase from the convenience of your
home or wherever you are.
Use PB Day2Day Card to pay bills, transfer money or make online purchase via
the internet.
Convenience and no risk of carrying cash
It is good as cash. A fast and easy way to pay and it reduce the risk of carring cash.
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You can withdraw cash at all the domestic and overseas ATM wherever you see
PLUS or Visa logo. It’s absolutely convenient
3.3 UNIT TRUST / PRIVATE RETIREMENT SCHEME
i. Unit Trust – PB Series of Funds
Public Bank distributes a wide range of Unit Trust funds for example PB Series of Funds
that promotes various catagories of funds, namely equity fund, mixed assets fund, balance
fund, bond/fixed income fund and money market fund in order to cater for your various
investment strategies and risk tolorence levels.
ii. Private Retirement Scheme
Private Retirement Scheme (PRS) is a voluntary long-term contribution scheme designed
to help individuals accumulate savings for retirement. Public Bank also distributes a wide
range of PRS funds that you may choose to contribute based on your contribution time
horizon, risk appetite and age.
Both the unit Trust and PRS funds are managed by Public Mutual Berhad, currently the
largest private unit trust company in Malaysia with more than 30 years experience in fund
management.
Service available via Pbe are as follows :
Additional Investment for Public and PB Series of Funds
Additional Investment for PRS
Public Mutual Online Registration
The following services are currently not available via Pbe :
Application of new units
Redemption of existing units
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Switching of existing funds
Transfers of existing units
Exercising of cooling-off right
However, the above service can be done via Public Mutual Online or approach our Bank’s
Financial Executive at your nearest Public Bank branch.
3.4 INSURANCE
i. PB Health Care
PB Helath Care is a life product that has a unoque feature that covers 5 most common
types of diseases in Malaysia ( cancer, stroke, heart attack, diabetes related diseases and
hypertension related diseases). It also provides daily hospital allowance to compensate
you when you are unable to work. There will also be a death benefit payable to the
nominee to lessen financial burden in case the unfortunate happens to you.
This product is created exclusively for Public Bank account holders where payment can be
accepted via credit card/Day2Day Card/Public Bank Savings account.
There are benefit of PB Health Care :
Death Benefit : death benefit is payable in the event the insured erson suffers loss
of life.
Lifestyles Disease Benefit : these is payable in the event the insured person
suffers from any one of the 5 most common types of diseases in Malaysia (cancer,
stroke, heart attack, diabetes related diseases and hypertension related diseases).
Please refer to the policy contract for the details on the payout of the benefit.
Daily Hospital Income Benefit : these is payable in the event the insured person
is confined in the hospital due to illness or accident for a maximum of 120 days
per policy year. The total benefit payable shall not exceed 1,000 days per policy.
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Affordable Premium : these is for as little as RM1.33 per day, depending on your
entry age and the plan chosen.
Easy and Simple Enrolment Process : these is for where no medical examination
is required.
Convenient Premium Payment : it is via credit card/Day2day Card/Public Bank
Savings Account.
ii. PB Care PA
Protect your family from the unexpected and AIA wil take care of your needs for 24 hours
and 365 Days when you need it most. PB Care PA is a general insurance product which
provides compensation for you and your family in the event of injury, disability or death
caused solely by violent, accidental, external and visible means. Where an insured
person’s spouse and children are included for coverage, AIA will pay half of the sum
assured and amount of benefit payable to the Assured. This product is created exclusively
for Public Bank account holders where paymet can be accepted via auto debit from your
Public Bank account.
There are benefit of PB Care PA :
Accidental Death Benefit : Is payable if the insured person suffers loss of life due
to an injury caused by an accident within 365 days from the accident date.
Accidental Living Benefit : Is payable if any accidental event shall result in any
dismemberment condition (according to provisions stated in the schedule o
indemnities) within 365 days from the accident date.
Snatch Protection Benefit : Is payable if the insured person suffers loss of life
due to being a victim of a snatch beneft.
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Medical Reimbursement Benefits : Allows the insured person to claim for a
reimbursement of the medical bills, in th event of accidential injury.
Acidential Hospital Income Benefit : Is payable up to 365 days per accident.
Treatment Benefit : Which covers the in-patient treatment, in the event of
accidental injury.
Easy and Simple Enrolment Process : Where no medical examination is
required.
Convenient Premium Payment : Via auto debit from your preferred account.
3.5 PUBLIC BANK HOME LOAN
The Public Bank housing loan products offered by Public Bank include the 5 Home
Plan, which gives you the option to choose from a fixed, flexi and graduate loan
repayment and the more plan, which is optimised for property refinancing.
The Home Plan give borrowers the flexibility of choosing fixed or floating rate
pricing. There is also a graduate home loan option, which allows interest only payments
for the initial loan period in order to maximise affordability. An Islamic loan plan is
available under Public Bank housing loan which enable you to enjoy fixed profit rates that
are not subject to fluctuation in BLR. Public Bank Home Loans have a lock in period of 3
years, during which borrowers will need to pay a 2% early settlement fee if they decide to
refinance or sell their property. The early settlement penalty will be based on the
outstanding loan.
There are several benefits that you will gain when you sign up to this exclusive Public
Bank housing loan product. Fisrtly, you can save even more as interest rates are calculated
on daily basis. Via Public Bank housing loan, you are entitled to credit cards with
Exclusive Annual Fee waiver for the entire loan tenure for eligible customers. You can
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also option for redraw facility when you sign up to this particular Public Bank housing
loan.
Each of Public Bank’s Home loan plans offer a zero entry cost option. The margin of
financing for Public Bank Home Loans can go up to 100% inclusive of legal fee, stamp
duty and MRTA (Mortgage Term Reducing Assurance) financing. Home loans are
available for a tenure of up to 35 years, or until the borrower reaches 70 years of ages.
Purchase of MRTA and Personal Accident Insurance is compulsory.
Public Bank has an exclusive tool namely Public Bank home loan calculator for you
estimate your monthly repayment. So how to use this Public Bank home loan calculator ?
Just log on to brand new Public Bank official website and search for the costs of the
house, your monthly income and your desired loan tenure into the exclusive Public Bank
home loan calculator, then you will find out how much you could borrow and how much
you need to pay every month. That’s how the Public Bank home loan calculator works.
3.6 PUBLIC BANK SHARELINK
Introducing PB Sharelink, a product specifically designed to assists you with your
shares trading and margin financing needs on the Malaysia Securities Exchange Bhd
(MSEB). It offers you maximum purchasing power through leveraging against existing
funds or collateral to enable you to purchase and invest in shares to capitalise on any
emerging opportunities in the stock market.
Whether you are a first-time investor or are looking alternative investment options to
maximise your returns, we will help you find a plan suited to your needs :
Share Margin Financing : Lets you finance the shares purchased using the
margin balance available in your account.
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Margin Plus Trading : Provides you a combination of margin financing and
leveraged trading based on the value of the collateral you have in your account.
Cash Trading : Purchase shares using your own funds.
Collaterised Trading : For a higher trading limit with no margin financing.
Whichever plan you option for, PB Sharelink will take care of your banking and share
trading/investment needs as well as nominees services, all under one roof.
There are PB Sharelink benefits :
Competitive interest and brokeage rates
No commitment and rollover fees
Margin line of up RM5 million
Higher margin and trading multiples of up to 3.5 times the security value
Earn interest on your credit balance ( applicable to individual only)
Faster processing of your transactions through online routing
View real-tme shares prices and buy/sell shares via Pbe
We also have a team of dedicated share investment executives to assists you with your
trading activities and banking requirements. And its really simple and hassle-free to apply for
share investment service with us.
You can also apply for Share Margin Financing with Public Bank and option to
conduct your share transaction with any of our panel stockbrokers.
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4.0 MARKETING SEGMENTATION
A marketing term referring to the aggregating of prospective buyers into groups
(segments) that have common needs and will respond similarly to a marketing action. Market
segmentation enables companies to target different categories of consumers who perceive the
full value of certain prodcuts and services differently from one another. Generally three
chriteria can be used to identify different market segments which is homogeneity (common
needs with segments), distinction (unique from other groups) and reaction (similar response to
market). Its objective is to design a marketing mix that precisely matches the expectations of
customers in the targeted segments. The four basic market segmentation-strategies are based
on behavioral, demographic, psychographic and geographical differences.
Public Bank realize that there are two big market segmentation which is for rural
people and city folks. Rural marketing is a function which manages all those activates involve
in assessing, stimulating and converting the purchasing power into an effective demand for
specific products and services, moving them to the people in rural area to create satisfaction
and a standard of living to them and thereby achieves the goals of the organization. The rural
market environment is very different from the familiar surroundings of the urban market.
Rural consumers have customs and behaviour that the marketer may find difficult to contend
with. Meanwhile, city folks market environment is bigger that rural area. This is because their
demographic like education, income level, occupation and others is different with those lives
at rural area. Public Bank decides to make a different strategy to sell their product based on
these two market segmentation.
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5.0 RURAL PEOPLE
5.1 Objective
This marketing strategies is for expanding microfinance bank operations to a rural setting
based on the experience of Public Bank. In particular, our focus more on the following
actions:
i. Client responsive product modification
ii. New or unconventional marketing and product education activities
iii. Use of technology and other existing distribution channels to create a virtual
organization
iv. A phased rollout involving taking careful, sequential steps to build business
before commencing operations
The objective of this marketing strategies is to act as a resource for microfinance practitioners
that assists in the formulation and efficient execution of new outreach strategies to rural
clients.
This strategies covers each of the above action, and closes with an analysis of environmental
factors and strategic tradeoffs for other organizations to consider in developing their own rural
expansion plans.
5.1.1 Client-Responsive Product Modification
Public Bank found that the products it developed for the urban and pre-urban markets in
Malaysia did not translate easily into the rural context. They reduced the minimum loan size
of their group business loans and in order to retain the profitability of these loans they form
groups of 15 until up to 20 people. Public Bank takes advantage of the very strong social
cohesion found in rural areas by organizing rural groups into clusters where 5 until 8 groups
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meet on a monthly basis in a central location to avoid loan officers traveling to visit each
group. In some cases, the terms of agreement for the mutual guarantee have been adjusted so
that enforcement is at this cluster level rather than at the group level. For loans, the bank is
treating security requirements more flexibly due to the difficulty of legally registering
property in rural areas as well as the generally lower value of assets owned by small-scale
entrepreneurs. For example, Public Bank is considering alternatives to land titles for land
ownership verification, such as a letter from the local district office. Because most rural
households in Malaysia are only operating one business, at most, and this is controlled by the
male head of the household, Public Bank is starting its business primarily with this audience
in the rural areas. It is Public Bank intention to see how they can encourage women, as new
entrepreneurs in the rural area, to build businesses that serve as supplementary household
income and as a vehicle to transformation.
5.1.2 New Or Unconventional Marketing And Product Education Activities
In particular, Public Bank has found that catering to local opinion leaders, developing a road
show to build brand awareness, and utilizing radio as a key medium of communication are
important components of their strategy that have evolved through their experiences. Public
Bank focus is to develop a brand that the poor associate with an organization catering to their
needs rather than that of a standard bank which is considered exclusive and often prohibitive.
Instead of a focus on a physical presence in the area, OIBM’s goal is to have a virtual
presence for their clients. This is reinforced through the rural-poor friendly distribution
channels that bring the bank to them and their communities through mobile banking, POS
devices and others approach, rather than the typical branch model found at other banks.
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5.1.3 Use Of Technology And Other Existing Distribution Channels To Create A Virtual
Organization
As Public Bank expanded its presence outside of the urban areas, it used its three major
branches as hubs in which outlying areas could be covered through a mixture of mobile units,
kiosks and satellite centers. The goal was to reach rural places where people work and live in
order to reach a greater number of the population. Asit opens more outlets and becomes
virtually present in Malaysia, Public Bank has developed a strategy for initiating coverage in
new areas. Importantly, innovation requires incurring upfront costs related to adjustments that
must be made as the appropriate technologies and channels are developed in each area.
5.1.4 A Phased Rollout Involving Taking Careful, Sequential Steps To Build Business
Before Commencing Operations
The order of rollout optimizes growth opportunities and efficiently uses capital. By taking
careful steps to develop the market before starting operations, Public Bank created brand
awareness and targeted critical business partners and that became first adopters of its
technology, who were crucial in stimulating interest.
5.2 Environmental Factors
These action from Public Bank are given in the context of the environment within the
Malaysia market. Importantly, some of these local conditions dictate rollout strategies that
might not apply in other situations. Practitioners in other areas should consider conditions
such as:
Prevalence of microfinance and other financial services in the area – OIBM faces relatively
low levels of competition from other forms of formal financial institutions in these rural areas
and thus does not face many of the competitive threats that might occur in other locations.
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This factor can impact timing of the phased rollout as well as the amount of resources
required to subsidize early operations.
5.2.1 Infrastructure Conditions
Malaysia has main highways which allow for safe and efficient travel from more urban hubs.
Environments where consistent travel conditions do not exist could impact strategies reliant
on outreach through mobile delivery channels. In addition, technology can be a barrier that
complicates POS or ATM utilization, especially lack of an online access.
5.2.2 Security
Security of staff and assets is a key consideration and while security mechanisms are in place
as agreed with Central Bank in Malaysia, there will be areas where no level of security will
make this kind of operation safe.
5.2.3 Inability To Influence Opinion Leaders
While the types of opinion leaders vary between environments, so too does the ability to
influence them. If it is impossible to obtain positive approval, institutions will have a much
harder time attracting clients with this model.
5.2.4 Ability To Build Coalitions To Create Sustainable Institutions
Public Bank has been able to enter rural areas, in part, by creating partnerships with existing
institutions, such as international companies, aid agencies or other NGOs. These
organizations supplied a sufficient customer base or payment system fee service that provided
the initial financial foundation to enable operations. The support of these organizations
provided Public Bank the opportunity to serve the poor on a sustainable level without having
to shoulder the initial overhead expenses. Because the initial start-up costs were subsidized,
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Public Bank was able to provide services that clients could afford and was sustainable on a
marginal basis.
5.2.5 Client Mobility
Even though Public Bank is taking measures to bring the bank to rural areas, clients still are
required to travel to meet the bank for meetings and to utilize its services. More migratory
populations or restrictive travel areas would diminish the ability of institutions to reach rural
clients.
5.3 Strategic Tradeoff
5.3.1 Longer Lead Time With Advanced Planning vs More Immediate Product Delivery
A sequential process of building awareness and a gradual increase of capacity helps to more
evenly match captive demand with capital availability. An alternative option of initially
building a branch and having excess capacity that can more fully meet client needs would
require much greater initial capital. Competitive dynamics and capital availability would play
into this decision.
5.3.2 Urban Primacy vs Rural Focus
Public Bank has chosen to build out operations in urban areas first before moving into the
more challenging rural locations. Some microfinance institutions might prefer to focus on
rural areas first in order to meet the needs of that segment of the population. The strategy
highlighted above is reliant on support from these urban hubs and might not be as relevant for
a decentralized strategy. Telecommunications issues were a significant challenge in Malaysia
and were an important factor in deciding to start in the urban areas first. Ultimately the
demand from the rural areas and Opportunity’s poverty focus led to the outreach strategy. It is
commonly held that rural savers finance urban borrowers, in that the large deposit accounts in
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rural areas provide the necessary capital from an institutional view for increased lending in
established urban markets.
5.3.3 Creating New Delivery Channels vs Associating With Existing Institutions
An alternative strategy is to partner with organizations with access to rural populations and
use these organizations as the distribution channels for microfinance products. This requires
less management overhead, lower capital requirements, and potentially quicker timelines.
Risks that are faced with partnerships include the inability to control the relationship and the
limitation of services available to clients. Fraud, poor customer service and even client
poaching are all important brand risks to consider when forming partnerships. Public Bank
has attempted to mitigate these risks in its partnerships by looking for partners with similar
objectives, explaining partnerships to managers of both organizations and covering potential
problem points with covenants. Slow response time, particularly with non-profit partners, is a
constant challenge. For example, Opportunity Bank selects agri-businesses to partner with in
giving agricultural loans to smallholder farmers. The agri-businesses provide agronomy
advice as well as contracts to purchase the crops at set prices while Opportunity Bank
provides the loans and savings services along with basic financial education. These agri-
businesses must have excellent reputations with the smallholder farmers and operate in a
professional and profit-oriented manner.
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5.4 Challenges
1. As service is extended to additional rural areas, managing a larger and more
complicated organization from an administrative and resource standpoint is a
challenge that will continue to grow.
2. Achieving profitability in all areas of the country with this outreach strategy.
3. Choosing the appropriate technology to allow for scalability. Public Bank outgrew the
infrastructure capacity of the local smart card provider. The lack of an alternative
choice in providers resulted in growth and utilization constraints.
4. Switching costs associated with the introduction of new technology. As new and better
technologies are introduced into the market, there are tradeoffs to consider given costs
associated with adopting new standards and products as well as the timing of adoption.
Because Public Bank is attempting to push into new areas as a pioneer, it must
consider the pace of innovation and the costs associated with adoption.
5. Remaining focused on holistic transformation given the increased use of technology in
distribution which could potentially reduce the amount and impact of human interface.
6. Developing communication solutions that enable real time transactions.
7. Overcoming the scarcity of skilled labor with the appropriate skills and knowledge
often requiring relocation of qualified candidates from urban to rural areas
8. Educating government officials/regulators regarding unique outlets (mobile vans,
kiosks and satellite centers) that vary from typical branch regulations.
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6.0 CITY FOLKS
6.1 Objective
This marketing strategies is for expanding demanding products and services to city folks
based on the experience of Public Bank. In particular, our focus more on the following
actions:
i. The customer value of cross-selling
ii. The personal touch by Technology
iii. Customer-centric, not product-centric
6.2 Strategy Of The Objective
6.2.1 The Customer Value Of Cross-Selling
The core of our vision-based strategy is “cross-selling” . The process of offering
customers the products and services they need, when they need them, to help them succeed
financially. The more we give our customers what they need, the more we know about them.
The more we know about their financial needs, the easier it is for us to work together for them
to bring us more of their business. The more business they do with us, the better value they
receive and the more loyal they become. The longer they stay with us, the more opportunities
we have to satisfy even more of their financial needs. That’s the mutual benefit of cross-sell.
As a diversified financial services company, we have a clear cross-sell advantage over
companies that offer just a few financial products or that do so through only one channel. But
for a large company to work seamlessly across business lines to understand and fulfill all of
its customers financial needs isn’t easy. It takes years of hard work and dedication. When
accomplished, as in our case, it results in a true competitive advantage.
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By serving our customers well, we want to be the premier provider of financial
services and be known as the best in every product in every market in which we do business.
In retail banking, business banking, credit and investments. We want to be the first provider
our customers think of when they need their financial product.
More sales do not always lead to better service, but better service almost leads to more
sales. Put simply, our product is service. Our value added is our financial advice. The quality
of our service keeps customers coming back for more and is our single biggest driver of
revenue growth. We want our customers to find a friendly face in our bank, hear a warm voice
on the phone and find it easy to do business with us online or on the go. We want them to feel
like they are having conversation with someone interested in understanding them and helping
them succeed financially. When they do come to us with a problem, we want to fix it as
quickly as we can.
Here are 6 time-tested, common sense techniques that may Public Bank used of it:
1) Ask Questions : Consultative selling has been discussed the focus if the
banking industry for decades. In a nutshell, the process begins by clearly analyzing
a customer’s situation before presenting services or products. From the outset, a
failure to cross-sell a brand new customer is a failure to develop a consultative
relationship and a failure to ask the right questions. Without these questions, the
opportunity to open the right services initially or later in the relationship is made
more difficult. In addition, as opposed to going through a long set of questions that
make the banker and the customer feel uncomfortable, the dialogue should be free
flowing and natural. Another option is to engage the customer with tools that can
be used to complete the profile easily such as a tablet device.
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2) Start With The Lowest Hanging Fruit: The easiest sales that can be made
to current customers are engagement services that help a customer use an account
they already own. These ‘sticky services’ include a debit card, online banking,
direct deposit, bill pay, automatic savings transfer, personal line of credit and
security solutions such as privacy protection. These services help to ensure the
customer will use the products they own more frequently, will significantly
improve retention and will help to improve the overall customer experience.
3) Stay Connected : At Public Bank, we endavor to make your banking
experience safe and secure by providing important account related information like
transaction alerts, updates and exciting offers available to you. All the customers
need to do is to ‘Stay Connected’ by updating your latest contact details with us.
Updating latest contact details with us just got easier. Just follow a few simple
steps like fill up the form of ‘Stay Connected’. A single ‘Stay Connected’ form
will help you to update your contact address, mobile number, E-mail ID,
Permanent Account Number (PAN) and link all your banking relationships. This is
because model driven marketing programs usually focus on customers with
broader relationships.
4) Continually Evaluate Upsell Opportunities : Rather than using product-
driven programs that are done seasonally, consider funding more customer-focused
programs that evaluate each customer’s propensity to open one or more of the
products and services offer. Public Bank will evaluate each customer’s
transactional, product ownership and even behavioral characteristics to determine
what would be the most likely next purchase and whatever the propensity to
purchase is high enough to make an offer. The goal is to offer the right product, at
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the right time, to the right customer through the right channel. This takes customer
data analytics.
5) Leverage All Channels : Public Bank never assume that customers
understand all that bank organization offers or absorb communication the same
through all channels. Public Bank must continuosly get to know who the
customers are, understand their needs, are looking out for them and that willing to
reward them for their loyalty. Use as many direct channels as possible to reach out
to current customer base, including email, direct mail, statements inserts, banner
advertisement on bank website, ATM messaging, outbound calling efforts and
others. Digital retargeting of customers who visit the website or are part of direct
mail or email programs also is highly effective and very efficient way to cross-sell
performance.
6) Ask For Referrlas : One of the easiest ways to generate new business
and increase loyalty of current retail or business customers is to ask for referrals. If
a customer is happy with the way they are treated at the bank organization, they
usually want others to know. This is especially true with satisfied small businesses,
private banking customers and with retail customers that are part of bank-at-work
program. And it does not hurt if the bank provide an incentive to the current
customer.
Finally, remember that current customers like to be rewarded for their loyalty.
One of the best way to do this is to remember to include an offer with any cross-sell or
upsell message. Without an offer, the bank may be perceived as simply ‘pushing
product’ without leveraging the relationship value already in place. A strong offer will
not only generate a better response to the communication, but also remind the
customer of the value of doing business with the bank organization.
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6.2.2 The Personal Touch By Technology
We use technology to personalize service, not to depersonalize it. Technology allows
us to connect with our customers in new way every day. It enables our customers to control
when, where and how they want to do business with us, and it gives our customer-contact
team members the ability to quickly access the information they need to earn 100 percent of
every customer’s business. Using technology, we know how many products, which specific
products and who customer has with us. We can also predict the next product they will most
likely need based on account balances, life events, transaction history and how they access the
Public Bank webpage. Technology is also essential for cross-selling, targetted marketing and
protecting confidential information about our customers. We use it every day for analyzing
customer profitability as well as creating and pricing new products and services based on the
depth of existing customer relationships. When we focus our technology resources on services
to customers, we can achieve a true competitive advantage for Public Bank, but technology
alone does not guarantee such an advantage. What’s important is the creativity and speed with
which we put that technology to use to benefit our customers.
1. Digital Communities : Here’s one way Public Bank might connect with
people who need housing loans through digital communities. A prospective house
buyer has joined several online communities that are awaiting the release of a new
development. Many are planning to buy the house when it becomes available.
By joining the conversation, Public Bank might be offers housing loans could
establish itself as a resource for rates and other information. Prior to the house’s
release, Public Bank could develop an enticing offer and market it to these house
buyers. The loan could be executed on a borrower’s mobile phone using a Public
Bank apllications designed specifically for that purpose.
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The threat disintermediation is real and competitors offering various types of
financial services arise every day. Many banks still have the “hometown”
advantage in that their customers know them. They have spent decades, sometimes
centuries, building their names and reputations. That’s a great foundation but the
future is digital and that’s where banks need to be online, on the go and on top of
customer expectations.
6.2.3 Customer-centric, Not Product-centric
Public Bank do not view any product in isolation, but as part of a full and long-lasting
relationship with a customer and with that customer’s total financial needs. We start with
what the customer needs, not with what we want to sell them. Public Bank also want to offer
our products to customers in ways that are most convenient to them. That means all of our
distribution channels such as stores, phone banks, ATMs, the internet and mobile banking
channels are work together, integrated with our products, to benefit customers.
We know customers have a variety of financial needs. So, we do not want to offer our
customers especially new customers that just one product at a time. Public Bank will offer
them packages of products that save them time and money.
When it comes to serving our customers well, we are all salespeople and we are proud
of it. Superb salespeople know the importance of service. Our products are service and advice.
There is no sale without superb service from our entire team and from our customer-contact
people to our operations centers and everyone in between.
1. In-Memory Computing Provides Personal Touch : In-memory
computing is backbone of customer centricity. It provides real-times,
comprehensive and integrated data and predictive analytics. In-memory computing
gives banks new way to tailor products and services and market them directly to
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targeted audiences both online and in the physical world. Banks can be flexible
and fast with product and service offerings, better meeting the needs of each
customer and cementing customer relationships.
2. Get On Board With Mobile Explosion: Mobile is the present and the
future. Improving the mobile banking experience and expanding its capabilities are
essential to retain and attract customers. At this point, most banks do not need
convincing. They know a great mobile experience is fast becoming table stakes for
retail and commercial customers.
3. Go Where The Customers Are : As discussed earlier, online
communities, from groups of friend to those with similar interest, to business
networks, are ubiquitous and becoming increasingly influential. Banks must find
these entry points and inject themselves into ongoing discussions in a content-
based, not sales way. They also need to provide clear value and convenience.
4. PB Credit Card : Ask the customer what they want the advantage from the
credit card and approach them to apply the credit card from Public Bank. If the
customer had one, we can suggest the customer to kill the old credit card then
transfer the unpaid balance and it will change at the lower interest. Public Bank
will offer 24 hours services. In case, if the customers has lost the credit card then
the bank will stop the transaction immediately after get the report and the bank will
replace the credit card within 24 hours.
5. PB Islamic Investment : Nowadays, customers are very concerned about
halal and haram in businesses. They have a lot of information about what happen
actually in the investment world. So that, Public Bank proposes to establish a stock
investment according to Islamic Shariah for Muslim customers. Public Bank will
suggest a few features and benefit for this Islamic Investment. For example, low
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minimum investment amount, enjoy potentially higher return than traditional fixed
deposits, flexible in personalising to the Investment Tenure and specific shariah
compliance and cater to the future needs where the customers needs may be for
their investment or their childrens education purposes.
6. PB Students Care : Public Bank Students Care got you covered. Our
new, flexible policy insures the stuff that matters so you can relax and enjoy
university. Your laptops and gadgets will be cover by us. Public Bank will cover
accidental damage, theft (if your gadget is stolen, we will replace it in 24 hours),
liquid damage (we will replace your gadget , new for old, within 24 hours if it is
unrepairable), cracked screens (we repair cracked screens, unlike some other
providers) and worldwide cover (if you take your gadget abroad with you, it is
covered for up to 30 days). It is depends on the terms and conditions as well.
We understand that healthcare legislation has brought significant changes to
healthcare plan designs and delivery, particularly for institutions of higher
learning. As the bank that provide of health insurance solutions for students, we
help our broker partners and clients manage their student health and wellness
programs with compliant insurance solutions, customized to meet their needs,
responsive claims service and 24 hours access to administrative and student
assistance services. We also provide health, safety and wellness services to help
keep students healthy and help our clients manage their heatlh care costs. The
insured benefits are domestic and international plans, benefit maximum up to RM
100,000 , students accident using public transport, flexible plan terms and
coverages, option for medical evacuation and repatriation coverage, preferred
provider organization and pharmacy benefit manager capabilities and plans
available with no out of area limitations.
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6.3 Challenges
6.3.1 Geographic
The bank may decide to focus on a few, paying attention to the distinguishing characteristics
associated with each location. The needs of urban customers would differ significant from
that rural customers. Public Bank will concentrate on the Housing Loan because it well
demand in urban area compared to rural area. The amount expenses of the urban area are
totally different with the rural area. So that, Public Bank also will introduce and upgrade our
Credit Card features and benefit for customer’s benefit.
6.3.2 Demographic
Demographics are the quantifiable statistics of a given population. Demographics are also
used to identify the study of quantifiable subsets within a given population which characterize
that population at a specific point in time. Demography is used widely in public opinion
polling and marketing. Commonly examined demographics include age, gender, family size,
income, occupation, religion, race, nationality and education. Demographics trends describe
the historical changes in demographics in a population over time. Both distributions and
trends of values within a demographic variable of interest. Demographics can be viewed as
the essential information about the population of region and the culture of the people there.
For city folks, the sales person have to get a full knowledge of the products and services
because most of them have high education where they can seek knowledge at their fingertips
so far. Each of them must have smartphone, so they can get any information as easy as that.
Sales is an important function and a sales person plays a key role in bringing revenues to the
organizations.
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6.3.3 Psychographic
While banks usually take the time to understand demographic information,
psychographic is rare. Here Public Bank strive to understand insight into customer personality
traits, values, attitudes, interests and lifestyles. They are a good basis for identifying
differences in response and are a far better predictor of need. Since all the products a bank
offer should be positioned as the solution to a particular customer’s pain point, banks can use
psychographics as the window to identify the most likely customer to experience the pain
their problem solves.
Market research is a powerful way to identify customer segments using
psychographics criteria. A bank can conduct simple surveys on its own through its branches,
on its website or its social media pages. However, there are many 3rd party research reports
freely available online from the ABA, consulting firms like Accenture and by large banks that
can shed light on how consumers feel. These market research reports include customer
attitudes on mobile banking, branch banking, bank fees, credit card usage, online banking,
mobile payments and loan products.
For Public Bank, some of the more important psychographic factor for customers are:
Evangelists, loyalists, occasional bank users or reluctant customers?
Are they impulse buyers, crowd followers or the analytical type?
Are they first moves on new bank products or late adopters?
Comfort for conducting banking online or mobile device
Ability to get to a bank on a night or a weekend given current banking hours
Preference for speaking to someone face to face rather than by phone when conducting
certain transactions
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Willingness to drive to a bank’s ATM versus using the cash bank services at a grocery
store
Importances is the term used to identify the importance a customer attaches to specific
product benefit and characteristics. When customers can be grouped together based on the
similarity of their importances, Public Bank can create “benefit” segmentation. This strategy
has been particularly effective for credit card products and suitable for city folks since their
expenses and income are high. “Cash back” cards appeal to customers who prefer a benefit
that is transparent and simple. This type of incentive works best for consumers who pay off
their balances every month. Other customers prefer rewards programs tied to miles and/or
points. There is often an annual fee for these cards, and they appeal to customers who may
value status and perks as much as the actual value of the benefit from the rewards programs.
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7.0 CONCLUSION
Any effort in doing customer segmentation is a good investment for our bank, Public Bank.
Hopefully this primer will get Public Bank started in thinking further about the composition
of your current and desired customer base. The more time Public Bank take to understand and
segment our bank’s customer, the more successful it will be utilizing sales, marketing and
product design investment efficiently. Understanding our segments will allow Public Bank to
take next step towards doing Customer Lifetime Value analyses (CLTV) so that Public Bank
can determine how many marketing value that should spend per customer.
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8.0 REFERENCES
Banktech. (2014). How Banks Can Stay On Top Of Customer Expectations. Retrieved
November 16, 2014, from http://www.banktech.com/infrastructure/how-banks-can-
stay-on-top-of-customer-expectations/a/d-id/1296854?
Edward. S.J. (2000). Malawi Banking Sector. Life Issue, Malawi. Retrieved November 15
2014.
Icicibank. (2014). Stay Connected. Retrieved November 15, 2014 from
http://www.icicibank.com/stayconnected.page
Ismail Yaakob. (2003). Malaysia Banking Industry. Banking Weekly. Ilham Publisher.
Retrieved November 13, 2014.
Public Bank. (2014). Public Bank Credit Cards. Retrieved November 16, 2014, from
credit card.com.my/publicbank
Public Bank. (2014). Types Of Products. Retrieved November 15, 2014, from
http://www.pbebank.com/typesofproducts/publicbank
Public Bank Homepage. (2013). Company Profile. Retrieved November 10, 2014, from
www.securities.com/Public/companyprofile/MY/Public_Bank_Berhad.html
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