MARKETING PLAN

Duygu Altun, Miles Golson, Brittany Johnson, Antavious Mannings

NOVEMBER 20, 2014 MKT 600

Colorado State University

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Table of Contents

1. Executive Summary ............................................................................................................... 2

2. Situation Analysis .................................................................................................................. 4

2.1 Company Overview.......................................................................................................... 4

2.1.1 Strengths.................................................................................................................... 4

2.1.2 Weaknesses ............................................................................................................... 5

2.1.3 Opportunities............................................................................................................. 5

2.1.4 Threats....................................................................................................................... 6

2.2 Target Customers/ Market Overview ............................................................................... 6

3. Action Plan ............................................................................................................................. 7

3.1 Goals................................................................................................................................. 7

3.2 Strategy............................................................................................................................. 9

3.2.1 Target Market ................................................................................................................. 9

3.2.2 Value Proposition.................................................................................................... 10

3.2.3 Positioning Statement ............................................................................................. 11

3.3 Tactics ............................................................................................................................ 11

3.3.1 Product and Service ...................................................................................................... 11

3.3.2 Brand ....................................................................................................................... 12

3.3.3 Price ........................................................................................................................ 13

3.3.4 Incentives ................................................................................................................ 13

3.3.5 Communication ....................................................................................................... 13

3.3.6 Distribution ............................................................................................................. 14

3.4 Implementation............................................................................................................... 15

3.4.1 Organizational Infrastructure .................................................................................. 15

3.4.2 Communication Management ................................................................................. 15

3.4.3 Incentives Management .......................................................................................... 16

3.4.4 Product and Service Management........................................................................... 16

3.4.5 Brand Management ................................................................................................. 17

3.5 Control............................................................................................................................ 17

4. Appendices............................................................................................................................ 21

5. References............................................................................................................................. 27

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1. Executive Summary

First National Bank was founded in 1857 and has always been dedicated to customer

service and innovation in the banking industry. The bank has been present in Colorado since

1994 and is the only bank located on the Colorado State University campus. First National Bank

has been reaching the student body through the RamCard Plus, a card that acts as the student’s

identification card in addition to a debit card to their personal checking account with First

National Bank. (First National Bank, 2014)

According to information gained through surveying Colorado residents; only 12% of the

survey takers were users of First National Bank and 95% of survey takers were at the age of

eighteen or under when they opened their first checking account (Source: Own Survey). This

information illuminates the opportunity to gain market share of students currently attending

Colorado State University as well as incoming freshman. By implementing new, cost-effective

incentives that students and parents seek, we can encourage individuals to open an account with

First National Bank via the RamCard Plus.

57.58% of survey takers stated that their parents had the largest impact on their financial

decisions (Source: Own Survey). First National Bank and RamCard Plus take pride in the fact

that they teach financial literacy and responsibility; an incentive that peaks the interest of most

parents sending children off on their own for the first time. Targeting the parents in addition to

the incentives for students is key to the success of this marketing plan, because the goal of First

National Bank is to maintain these accounts beyond the average academic life of these students

(Colorado State University , 2014).

77.53% of individuals stated that upon graduation they stayed or intended to stay with

their current banking institution (Source: Own Survey). This is a large amount of retention for

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these banks and if First National Bank were to gain a larger number of students while entering

Colorado State University it is plausible that they could experience a significant increase in the

number of accounts that remain with them beyond graduation.

Many individuals are not likely to switch banks even if they are only relatively pleased

with the services offered due to the fact that changing institutions is complex and they do not

want to have to cancel automatic payments. Students coming to college have less to consider

when changing banking institutions, it is uncommon for most eighteen year old individuals to

have bills or many automatic payments each month. Many freshman students live in dormitories

and their basic purchases are food, entertainment and fuel, making changing less complicated

than later in life.

RamCard Plus will not only update the look of the card making it more easily identifiable

from the current RamCard Plus; it will also add incentives to students for their purchases on

campus. The RamCard Plus provides 5% back directly to the students First National Bank

savings account on purchases made at any on-campus location. The ultimate goal for this

offering is to gain 25% of the incoming freshman class and 1,000 of the current student body

annually. In the first year our goal is to gain 2,000 students to the RamCard Plus in total.

Marketing to students and parents upon acceptance to Colorado State University will

encourage parents and students to begin thinking about the financial incentives of the RamCard

Plus before attending CSU for orientation. The current strategy is to inform students and families

at orientation when students are obtaining their RamCards. This is an uneasy time for most

students and families and they are unlikely to make any serious financial decisions such as this

without having the opportunity to discuss it and gain more information.

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Hosting a short assembly during orientation is another way that RamCard Plus will reach

the target market. Discussing the incentives for both students and parents throughout this

assembly will provide transparency and better information to interested individuals and will also

provide the opportunity to start the discussion about responsibly maintaining finances.

Obtaining accounts from a young age customer segment is the key to success for First

National Bank. Many of the users are unlikely to leave the bank and tend to provide positive

lifetime value after graduation. 83.67% of survey-takers stated they would consider getting a

loan through their bank that they stayed with throughout school and upon graduation (Source:

Own Survey). Loans provide income for banks and this would ultimately provide a longterm

beneficial relationship for First National Bank. Making changes to the RamCard Plus would

increase its attractiveness and thus, attract more students at an early stage.

2. Situation Analysis

2.1 Company Overview

2.1.1 Strengths

The current partnership between Colorado State University and First National Bank

through the RamCard Plus allows a direct link and distribution channel to the target market.

This established partnership has proven to be beneficial for both CSU and First National Bank.

The bank is a Fort Collins based company and provides many benefits (First National Bank,

2014) and jobs to the community. The First National Bank checking account is a free account

with many perks and is viewed as a strong product amongst the Northern Colorado market.

Many students and parents utilize the RamCard Plus through First National Bank because it is an

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easy way for students to have the ability to withdraw funds directly from their checking account

and have access to ATM’s on campus.

2.1.2 Weaknesses

Only 9% of households switch checking accounts annually. Only 7.5% of consumers

open their first checking account within a 12 month period. (Marous, 2014) Students feel that

RamCard plus currently has too few incentives to switch from their current institutions to First

National Bank (Source: Own Survey).

2.1.3 Opportunities

One of the greatest opportunities for increasing revenues within a banking institution

such as First National Bank is creating long lasting, profitable relationships with clients.

Consumers view changing financial institutions to be inconvenient and often maintain their

accounts with banks for long periods of time. Therefore, acquisition of new clients is crucial to

continuous growth and maintenance of accounts. Young adults often open their first accounts

with the assistance of their parents (Source: Own Survey). After graduation, the accounts remain

open and are used well into the adult lives of these customers. Furthermore, financial

institution’s clients are inclined to deepen relationships with their institution with products such

as loans and credit cards before considering outside sources. Incentives offered to students of

CSU will drive account opening and subsequently increase First National Bank profits over the

long term. In order to gain market share, the opportunity to reposition RamCard Plus as a

learning tool is a crucial step in obtaining new accounts.

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2.1.4 Threats

External competition is a significant threat. According to our survey only 12% of people

use First National Bank, while the largest number of survey takers use Wells Fargo (25%) or

“Other” at 62% (Source: Own Survey).

2.2 Target Customers/ Market Overview

Based on the information we received from our survey 95% of surveyed individual

opened their first bank account at the age of 18 or under. This information suggests that First

National Bank will continually benefit from reaching out to individuals at Colorado State

University. As the overall purpose of the plan is to gain market share and maintain long-term,

profitable relationships, a checking account specifically catered to the needs of young adults will

be a central product offering. Additionally, data from our survey suggests that 40.4% opened

their accounts at the institution their parents used (See Exhibit 2). Therefore, in order to reach the

target market, parents must approve of the institution and be aware of the incentives RamCard

Plus offers. As bank customers do not often change their banking institutions, penetrating the

market to obtain relationships is the most crucial process in customer acquisition and retention.

Targeting the young adults at CSU will lead to customer retention and future product sales,

which will bring profits to First National Bank. 83.67% of surveyed individuals stated that they

would consider their current institutions for loans in the future (See Exhibit 3).

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3. Action Plan

3.1 Goals

The strategic goal of this marketing plan is to attract and retain young adults such as

college students that will remain First National customers in future. Creating long-term

relationships will eventually lead to increased profitability. In order to achieve the strategic

objective, several tactical and operational goals need to be set. This chapter of the Marketing

Plan will therefore present our SMART goals to achieve the strategic objective. A summary of

our goals presented in this chapter can be found in Exhibit 5.

In order to create long-term relationships with customers, First National needs to offer

superior incentives and customer service. This will eventually lead to a competitive advantage

and therefore help retain customers in the long-term. Besides, to reach and attract more

customers, the current distribution and advertising channels need to be increased. This helps First

National to achieve the goal of customer acquisition. However, our Marketing Plan will

primarily focus on the third tactical goal, i.e. increasing the usage of RamCard Plus.

As mentioned in the first section of this Marketing Plan, First National is the only bank

on the CSU campus. This cooperation creates a direct channel to reach the target market that

mainly consists of parents of incoming freshman. First National is offering a debit card that is

directly linked to the Student ID. The RamCard Plus allows students to withdraw money and

make purchases on campus. Attracting customers at a young age will finally give First National

opportunities to retain them. Our research shows that 77.53 % of people that took the survey

have remained with their bank upon completion of college or stated that they are likely to remain

with their current banks (See Exhibit 4). Therefore, First National needs to establish relationships

with customers as early as possible. The availability of First National on campus as well as the

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existence of RamCard Plus is a significant opportunity. However, we believe that the usage of

RamCard Plus must be increased, because our survey research shows that only 16% of CSU

students own this card along with their Student IDs (See Exhibit 1). This leads to the fact that

First National Bank has to increase the attractiveness of RamCard Plus in order to attract more

students and eventually retain them after graduation. Therefore, our operational objectives to

increase the usage of RamCard Plus consist of the following:

The current number of incoming freshman to Colorado State University is 4,350 students.

(Colorado State University , 2014) Our primary objective is to have 25% of the incoming

freshman and an additional 1,000 currently enrolled students to obtain the RamCard Plus. Thus,

the goal for the first year after implementing the marketing plan is to acquire 2,000 students to

sign up for the RamCard Plus.

First of all, to make RamCard Plus more attractive not only to students, but also to one of

our target market, i.e. the parents, First National may introduce a 5% saving system which will

be explained in more detail in the next chapters. In addition to that, the incentives of owning a

RamCard Plus need to be communicated more frequently. Also, the transparency of banking

with First National and the RamCard Plus has to be improved.

The accomplishment of operational objectives will allow the achievement of the tactical

goal. While the operational objectives are short term objectives and need to be implemented as

early as possible, the accomplishment of the tactical goal, i.e. the increase in usage of the

RamCard Plus, will take approximately 1 year. The successful implementation of the tactical

goal will eventually lead to achieving our ultimate, long-term strategic goal. The more incoming

freshman can be attracted to open their first checking account by means of the RamCard Plus,

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the higher the probability for First National to retain these customers after graduation assuming

that customer satisfaction is achieved.

We believe that the goals presented above are SMART, because they are specific and

realistic. Due to the existing resources, i.e. partnership between CSU and First National and

RamCard Plus, the goals are also achievable. Besides, goal achievement can be measured by

means of the increase in RamCard Plus usage. A tangible outcome of goal achievement is also

the saved amount of dollars that can be traced back to the suggested 5% savings policy.

3.2 Strategy

3.2.1 Target Market

As college is generally the first time of independence for young adults, it is often the first

time in which checking accounts are opened and financial responsibility is gained. Orientation

for incoming freshman is a perfect opportunity for marketing a banking product that not only is

convenient and reliable, but also teaches financial responsibility. Financial decisions at this stage

of life are often guided by parental input. The savings program built into RamCard Plus is an

attractive feature that parents can feel good about and students will appreciate saving money on

purchases made on campus.

From this, First National Bank plans to engage in two potential diverse target markets:

Colorado State University’s incoming freshman who may or may not have a checking account

and the parents who will advise early financial decision making for their students.

The scope of this marketing plan will address these target markets. The first target market

to be addressed is incoming freshman who are actively searching for financial independence. The

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second market is the parents of these freshman who have the greatest influence on their decision

making.

The target market can be reached through:

• During freshman orientation

• Emailing students and parents upon acceptance to Colorado State University

• On campus advertisements (posters, handouts on the plaza)

• Social Media (Facebook, Twitter, etc.)

3.2.2 Value Proposition

To increase the attractiveness of RamCard Plus we suggest the following value

proposition:

Ram Card Plus assists incoming freshman with gaining their financial independence by

providing students with a checking and savings account that will begin their process of learning

financial literacy, responsibility and money management skills.

We plan to alleviate the worries of parents by providing transparency to their students

and giving them the ease of depositing money into their student’s checking account through

checks, wire funds, transfers from online accounts such as PayPal or through an online bill

payment from another bank account. They can access account information anytime, anywhere

with online banking. Also, since we are the only bank located on campus, your student does not

have to travel very far to have their banking needs met.

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3.2.3 Positioning Statement

Opening a RamCard Plus account is the best option for CSU freshman because it gives

students the benefits of a student ID and a debit card in one. Students with RamCard Plus learn

financial literacy, responsibility and money management skills. The automatic 5% discount of

on-campus purchases is credited to savings accounts and the accumulation of savings helps to

illustrate how important saving is. The exclusive offer is only for CSU students and First

National Bank is the only bank on the CSU Campus.

3.3 Tactics

3.3.1 Product and Service

The RamCard Plus will continue to provide the RamCard Plus account, a free checking

account linked to the current student ID card for Colorado State University students. In addition

to all of the previous account features listed below the RamCard Plus product will now offer a

savings program in which students receive 5% discount on all on-campus purchases. The 5% of

total on-campus purchases will automatically be transferred to the customer’s savings account.

Current RamCard Plus Account features (First National Bank, https://www.1stnationalbank.com,

2014)

● No monthly service fee

● No minimum deposit to open or minimum balance requirement

● One Overdraft Forgiveness every 12 months†

● Free and non - Withdrawals (Other bank and ATM Operators' surcharges

may apply) There are 6 First National Bank ATM's on campus.

● Free bank logo checks

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● Free Visa® Debit Card

● Free Online Banking, BillPay, and Account Alerts

● Free Mobile Banking - pay bills, deposit checks and transfer money

● 0.25% rate discount on Auto, Home Equity and Personal Loans

● $200 Mortgage closing cost credit - see a Mortgage Loan Officer for complete details

● Free statements - online or paper

● $25 Safe Deposit Box discount

● Free Debit Card Fraud Monitoring

● Free cashier's checks

● Free incoming wires

● Free stop payments

● The only bank located on campus

3.3.2 Brand

The RamCard Plus is an established brand name on the Colorado State University

campus. First National Bank is a Fort Collins based bank with a large customer base in Northern

Colorado. Providing a card that is beneficial to the customers and local businesses throughout

Fort Collins, RamCard Plus upholds First National Banks goal of doing what is right for the

customers and the communities in which they serve. RamCard Plus separates itself in the market

by being the exclusive card offered by CSU and offering incentives only to CSU students. The

card itself has the CSU Ram logo, which creates a sense of pride and exclusivity for its holders.

This emotional benefit creates brand value beyond the financial perks of RamCard Plus.

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3.3.3 Price

Ramcard Plus will continue to be a free checking account service. The cost of the actual

card is the same as a CSU ID card, a mandatory purchase for incoming freshman. The current

Student ID cost for incoming students is $20.

3.3.4 Incentives

This savings plan offers incentives to parents who want their children to learn the

importance of savings. In addition, saving 5% on purchases including books and food will save a

significant amount of money over the course of a 4 year degree, a clear incentive for students. As

the exclusive and official card of CSU students, the value of the RamCard Plus brand is an

additional incentive.

3.3.5 Communication

Reaching the target market will begin after individual students declare their acceptance of

the CSU admission offer. The first communication will be in the form of an email to the student

and his or her guardian. The goal of the communication will be to show the great incentives that

RamCard Plus has to offer. The email will include the message that there is no replacement for

the financial lessons RamCard Plus can instill upon students, and that no other institution can

offer the savings that RamCard Plus allows its customers. It will outline the savin (Marous,

2014)gs program and how opening accounts is quick, easy, and can be done right on campus, at

CSU’s only on-campus bank. The email will include links to the RamCard Plus website where

more information about the free checking and savings accounts can be obtained.

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The next important communication will take place at new student orientation. A

representative of RamCard Plus at CSU will inform students of the offering in a short assembly.

The communication will include explanation of incentives, the financial lessons that can be

learned from a savings program, and how students can open a RamCard Plus account. Students

will be able to obtain the RamCard Plus accounts directly after the presentation.

On Campus communication will market RamCard Plus directly with students. This will

include posters that display the perks and emphasize the 5% savings for on-campus purchases.

The posters will state that students can open the card in the Lory Student Center or any First

National Bank location in Fort Collins, and will be located in the vicinity of vendors.

In the status quo, students obtain their student ID cards in the Lory Student Center.

During the transaction, CSU representatives explain the RamCard Plus and facilitate the opening

of the account by contacting First National Bank. This process will continue to communicate the

offering to potential customers.

3.3.6 Distribution

Customers are able to obtain the RamCard Plus through direct channels on the CSU

campus and at any of the 5 additional First National Bank locations within the Fort Collins City

limits. RamCard Plus can also be obtained through the internet at www.1stnationalbank.com.

Also, parents and students have the opportunity to sign up for RamCard Plus on orientation day

right after the presenting the features of the RamCard Plus.

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3.4 Implementation

3.4.1 Organizational Infrastructure

The existing infrastructure between CSU and First National Bank will remain intact to

facilitate the changes in the RamCard Plus offering. Training current employees on the new

product will occur at the existing First National Bank institutions. Retail bankers will meet

personal sales goals by opening new RamCard Plus accounts. The accounting department will

continually report the cost and benefit analysis of the RamCard Plus accounts for company

reporting.

3.4.2 Communication Management

As stated above the existing infrastructure will remain intact, including staff that

currently maintains communication between students, parents and First National Bank. The

primary communication to gain interest in the RamCard Plus will be to email recently accepted

students and their parents regarding information about the RamCard Plus, its incentives and the

learning tools it encompasses. CSU has access to all of the email information needed to reach

the parents and students to begin this communication. The email to the students would differ in

content from the parents and would focus primarily on the incentives of 5% back on the

purchases made on campus as well as house information about saving and the importance of

saving for their futures. The content of the email to the parents will discuss the learning tools

gained from this card as well as the cost savings available when their children use the card on

campus and how this will begin to grow their savings accounts. Receiving an email at the time

of acceptance is a trustworthy source rather than junk-mail and is also a less-expensive

customizable medium to reach both the students and parents. Posters throughout campus and

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dormitories will provide further information and channels through which students can get the

card.

3.4.3 Incentives Management

The 5% back in to the First National Bank savings account is the primary incentive

offered to RamCard Plus holders. The 5% of each purchase on campus is a cost that will be

incurred by the bank itself and transferred into the student’s savings account. Students will be

alerted on the bottom of the receipt how much of the purchase went into the account and thus

how much they saved on that purchase. This keeps students aware and excited about the savings

they are making while also understanding how much money is added to their savings account.

This is a cost that First National Bank can incur due to the fact that they are recovering funds on

the $0.24 per swipe each time the students swipe the debit card as well as when students use their

card at locations off of campus (White, 2013). Electronic notices via email keep students

informed about their balances, savings, and offer information about retirement savings,

mortgages and other important financial management information. Improving upon Northern

Colorado’s best checking account, RamCard Plus allows CSU students to save, learn, and

connect with the University.

3.4.4 Product and Service Management

The primary objective for the RamCard Plus is to provide superior service and

transparency of information for students and parents. In order to maintain this objective it is

necessary to ensure that each RamCard Plus representative is fully equipped with the information

and understanding of the incentives available to card holders. One of the primary concerns of

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most parents is the security of the funds and ensuring that this is a secure and safe debit card

needs to be of the utmost importance when communicating with parents. Students need to be

aware of the incentives and daily account questions. These are all a part of maintaining the

service that encompasses this card.

3.4.5 Brand Management

Maintaining the long standing relationship with Colorado State University as the only

bank represented on campus is a major influence in regards to the RamCard Plus and First

National Bank Brands. Changing the look of the card will also provide some diversification

from the existing RamCard that each student must have. The First National Bank brand is one of

trust, innovation and commitment to customer satisfaction; this is certainly a thought that should

be maintained and communicated through the RamCard Plus. Changing the look of the card

creates a more innovative distinguishable look and can encourage others interest in the RamCard

Plus. Ensuring that the card is secure and safe as well as meeting the needs of students and

parents eventually leads to customer satisfaction, trust and, thus retention.

3.5 Control

In order to evaluate the potential success of our marketing plan we have conducted a Cost-

Profit-Analysis which will be presented in this chapter of the Marketing Plan.

● Value creation by customer

The primary, short-term revenue stream for First National from issuing debit cards by means

of RamCard Plus will be the transaction fee income. Every time a debit card is swiped, the

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vendors pay banks on average a fee of $0.24 (White, 2013). Our survey reveals that those who

already have a RamCard Plus use it on average five times a week for purchases on campus (and

five times for purchases off-campus). Since the mean graduation time at CSU is 5 years,

(Colorado State University , 2014) we can compute the value each customer creates to First

National by means of the following formula:

(𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝒂 𝑺𝒂𝒍𝒆)

𝒙 (𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑹𝒆𝒑𝒆𝒂𝒕 𝑻𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏𝒔)

𝒙 (𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑹𝒆𝒕𝒆𝒏𝒕𝒊𝒐𝒏 𝑻𝒊𝒎𝒆 𝒊𝒏 𝑴𝒐𝒏𝒕𝒉𝒔 𝒐𝒓 𝒀𝒆𝒂𝒓𝒔 𝒇𝒐𝒓 𝒂 𝑻𝒚𝒑𝒊𝒄𝒂𝒍 𝑪𝒖𝒔𝒕𝒐𝒎𝒆𝒓)

(Sugars, 2012)

$𝟎. 𝟐𝟒 𝒙 𝟓𝟐𝟎 𝒚𝒆𝒂𝒓𝒍𝒚 𝒔𝒘𝒊𝒑𝒆𝒔 𝒑𝒆𝒓 𝒔𝒕𝒖𝒅𝒆𝒏𝒕 𝒙 𝟓 𝒚𝒆𝒂𝒓𝒔 = $𝟔𝟐𝟒 𝒑𝒆𝒓 𝒄𝒖𝒔𝒕𝒐𝒎𝒆𝒓

This shows us that each customer generates revenue of $624 in a 5 year period (or $124.80

per year). As mentioned above, our goal is to acquire 2000 students in the first year. This will

result in annual mean revenue of $249,600 generated only by swiping debit cards for purchases

on- and off-campus.

● Cost-Profit Analysis

In order to determine whether the revenue generated by swiping the debit card is covering

the total costs, we have conducted a cost analysis. Upon implementing this proposed Marketing

Plan, the primary variable cost for First National will be the 5% saving on purchases made on

campus. Hence, the first step in our cost analysis was calculating the contribution margin per

customer. Assuming that 25% of all customers will use their debit cards at the Bookstore on

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campus for purchasing their books at an average price of $1000 per year, the saving on these

purchases, and thus the variable cost for First National Bank, will be $25,000:

$𝟏𝟎𝟎𝟎 𝒑𝒖𝒓𝒄𝒉𝒂𝒔𝒆 𝒑𝒓𝒊𝒄𝒆 𝒙 𝟓% 𝒔𝒂𝒗𝒊𝒏𝒈 𝒙 𝟓𝟎𝟎 𝒔𝒕𝒖𝒅𝒆𝒏𝒕𝒔 = $𝟐𝟓,𝟎𝟎𝟎

In addition to that we have determined the cost of other on-campus purchases such as

food for First National. Assuming that the average purchase value is $6, we can compute the

total savings on on-campus purchases (260 swipes):

$𝟔 𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒑𝒖𝒓𝒄𝒉𝒂𝒔𝒆 𝒑𝒓𝒊𝒄𝒆 𝒙 𝟓% 𝒔𝒂𝒗𝒊𝒏𝒈 𝒙

𝟐𝟔𝟎 𝒐𝒏 − 𝒄𝒂𝒎𝒑𝒖𝒔 𝒔𝒘𝒊𝒑𝒆𝒔 𝒙 𝟐𝟎𝟎𝟎 𝒔𝒕𝒖𝒅𝒆𝒏𝒕𝒔 = $𝟏𝟓𝟔,𝟎𝟎𝟎

Thus, after implementing the Marketing Plan presented, the average savings First

National Bank would have to pay to students for on-campus purchases will be $181,000.

𝑻𝒐𝒕𝒂𝒍 𝒗𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝒄𝒐𝒔𝒕𝒔 = $𝟐𝟓,𝟎𝟎𝟎 + $ 𝟏𝟓𝟔,𝟎𝟎𝟎 = $𝟏𝟖𝟏,𝟎𝟎𝟎.

After calculating the potential revenue as well as the variable costs arising from

introducing the 5% savings policy, we continued our cost-profit analysis by calculating the

contribution margin per year:

𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏 𝒑𝒆𝒓 𝒚𝒆𝒂𝒓 = 𝑻𝒐𝒕𝒂𝒍 𝒓𝒆𝒗𝒆𝒏𝒖𝒆 − 𝑻𝒐𝒕𝒂𝒍 𝒗𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝒄𝒐𝒔𝒕𝒔

𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏 𝒑𝒆𝒓 𝒚𝒆𝒂𝒓 = $𝟐𝟒𝟗,𝟔𝟎𝟎 − $𝟏𝟖𝟏,𝟎𝟎𝟎 = $𝟔𝟖,𝟔𝟎𝟎

𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏 𝒑𝒆𝒓 𝒄𝒖𝒔𝒕𝒐𝒎𝒆𝒓 𝒑𝒆𝒓 𝒚𝒆𝒂𝒓 = $𝟔𝟖,𝟔𝟎𝟎 / 𝟐𝟎𝟎𝟎 = $𝟑𝟒.𝟑𝟎

20

Since CSU and First National already have a partnership, the additional fixed costs for

implementing the Marketing Plan are meagre. The only extra cost therefore, is the fixed

advertising cost for printing posters which would amount to $500.

As a result, we can conclude that the contribution margin First National Bank will

achieve by means of a 5% on-campus savings policy is more than enough to cover the additional

fixed costs and thus, leads to a short-term profitability for First National Bank.

Having identified the total fixed costs as well as the contribution margin per customer,

we can now calculate the breakeven point by dividing the Total fixed costs by the Contribution

Margin per customer:

𝑩𝒓𝒆𝒂𝒌𝒆𝒗𝒆𝒏 𝑷𝒐𝒊𝒏𝒕 = $𝟓𝟎𝟎

$𝟑𝟒. 𝟑𝟎 = 𝒂𝒑𝒑𝒓𝒐𝒙.𝟏𝟓 𝒄𝒂𝒓𝒅𝒔.

Based on our survey results, this Marketing Plan proves very profitable, since to cover the extra

costs generated by the introduction of a 5% savings policy and thus, to breakeven, First National

Bank only needs to sell 15 cards per year which is a realistic objective (See Exhibit 6 for

Breakeven Graph).

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4. Appendices

Exhibit 1.

Exhibit one quantifies a survey which asked CSU students if the new format of RamCard Plus

would increase their consideration of obtaining the product. (Source: Own Survey)

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Exhibit 2.

Exhibit two analyzes the number of survey-takers that stated they opened an account at their

current bank because of the fact that their parents used this bank. (Source: Own Survey)

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Exhibit 3.

Exhibit three depicts the number of individuals surveyed that would consider getting a loan

through their current bank at a future time. (Source: Own Survey)

24

Exhibit 4.

Exhibit four depicts the percentage of people surveyed that would consider remaining customers

of their current institution in future. (Source: Own Survey)

25

Exhibit 5.

Exhibit five is a summary of the operational, tactical and startegic goals of this marketing plan.

26

Exhibit 6.

Exhibit six depicts the breakeven chart for implementing a 5% savings policy.

27

5. References

Colorado State University . (2014). From Facts and Figures :

http://www.colostate.edu/features/facts-figures.aspx

First National Bank. (2014). https://www.1stnationalbank.com. From RamCard Plus:

https://www.1stnationalbank.com/site/personal/banking/checking-accounts/ramcard-

plus.fhtml

First National Bank. (2014). https://www.1stnationalbank.com. From About Us:

https://www.1stnationalbank.com/site/about-us/

Marous, J. (22. September 2014). Secrets of Customer Acquisition in Banking. From The

Financial Brand: http://thefinancialbrand.com/42383/checking-account-switching-

acquisition-research/

Sugars, B. (8. August 2012). http://www.entrepreneur.com. From How to calculate the lifetime

value of a customer: http://www.entrepreneur.com/article/224153

White, M. C. (28. March 2013). http://business.time.com. From Why Banks Love Debit Cards

Again: http://business.time.com/2013/03/28/why-banks-love-debit-cards-again/