The Marketing Plan

Contingency Planning

1. Executive Summary:

The Business Plan I have presenting is about Online Residential Mortgages. This is one of the unique business plans ever developed and if approved, Barclays will be the first one to head start this business plan.

With the launch of this product, the company will be able to save a lot of money unnecessary wasted i.e. The paper format charges, printing charges, filing and record keeping costs, storage and other relevant costs.

The project will require an estimated investment of 10.0bn and the expected profits after tax to be 467m. Within 3 years of launch the expected customer quantity is 600,000 and expected profits to rise to 531m

2. Situation Analysis:

2.1 Product / Service Analysis:

Mortgage: the transfer of an interest in property to a lender as a security for a debt (usually a loan). Usually in Mortgage we charge interest (above original price) on the land or property, to the borrower with certain terms and conditions and within certain time limits.

Mortgage Industry has been one of the most profitable industries all over the world. With careful considerations of investments, profits are boundless, because of this almost every other firm (retail, finance, etc) within UK has mortgage schemes. There are around 4000 different products within Mortgages to chose from. Few types of mortgages are listed below:

* Interest Only Mortgage

* Repayment Mortgage

* Endowment Mortgage

* Commercial Mortgages

* First Time Buyers

* Buy To Let Mortgages

* Spanish Mortgage (for holiday home)

* Pension Plan Mortgage

* ISA Mortgage

Banks, Building Societies and other finance lenders are the members of The Council of Mortgage Lenders, their combining undertake is around 94% of all residential mortgages in the UK. At present there are 11 million mortgages with loans of over 1.2 trillion.

2.2 UK Market Analysis:

The UK Mortgage market had been on peak in 2007 right before the market crisis. The economy is rising again and mortgage market is expected to peak at the end of year 2010. So far the market has seen a rise, previous 3 months (December 09, January 10 & February 10) has shown a rise of 1.3%, 0.4% and 0.9%, a comparison to previous year.1

Following are different statistics for different quarters in Mortgage lending.

Gross advances (New Loans) increased every quarter in 2009 after Q1, increasing to 41.2bn a 2% rise in last quarter.

Net advances (Gross Advances less Borrower Repayments) show a stable quarterly pattern. At 7.9bn, the amount rise was 1.4bn (22%) higher than in Q3 (2009) and only 8% below Q4 (2008) when advances of 8.6bn was made.

New commitments (New Lending for coming months) were 35.8bn, 6% lower than last quarter (38.1bn). In the quarter 4 of 2008, new commitments were 37.5bn.

3. SWOT Analysis:

3.1 Internal Strengths

* Barclays got a global presence, that lets Barclays to stretch its risks.

* Barclays brand has been frequently endorsed by different company sponsorships, i.e. Premier League football etc.

* Barclays has always faced innovation. Barclays produced the first credit card in 1966, Barclays has also produced the OnePulse Card merging Oyster Card, cashless and credit card facilities for London-based customers.

* To enable Strong presence within community and refocus on customers, Barclays has been opening and refurbishing several new flagship branches.

3.2 Internal Weaknesses

* There has been regular controversy for providing services to people in Zimbabwe, who are connected with Zanu PF. Barclays ethical position has been hit due to this controversy, which affected its investors

* A Large sum was distributed among Directors as bonuses this produced undesired attention by community and stockholders, and that’s why people started thinking that Barclays did not go to UK Govt. for help in recent recession because such bonuses will be ended then.

* Barclays is planning to develop in Asia, those planned held in the middle when ABN Amro bid went outbid by Barclays in 2006.

* The Investors did not like Barclays announcement to not pay dividends on its shares till the 2nd mid of 2009.

3.3 External Opportunities

* Barclays showed its interest to get hold of some of Lehman’s assets just before it collapsed, but then there was opportunity when Barclays got a better deal after its collapse.

* Barclays to this date considers Asia a chance to its spreading out. They have been setting out new plans at number of sites.

* Welfare provision has decreased in many countries because of the cost to governments, and Barclays sees self-provision as an increasing trend that it can utilise.

* There was a concern when Barclays banking charges was confronted in legal term but Barclays still can implement such charges as court dismissed such case.

3.4 External Threats

* There are good chances that if economy fails again and another market disaster is to happen, the assets Barclays took from Lehman could be risky for banks operations.

* A chance of legal penalty could be faced by Barclays as the bank had been revolving its losses from defeating investments linked to the sub-prime sector towards other investors.

* Customers can draw their attention towards other suppliers of same services if they offer same products at competitive level this provides a threat towards customar loyalty.

* By keeping banks branches open, bank can prove their financial stability, in the past Barclays has been closing its branches very often in 2002, but now they are back in routine and investors are happy with such decision.

4. Marketing Research:

4.1 Financial Objectives:

Market research will be thoroughly conducted in order to increase opportunities and profits for shareholders and to raise the accessibility of fairly price housing and community development money, as well as freedom of money and credit facilities to neglected regions and local communities. In carrying out exploration and spotting opportunities, stockholders, housing associates, the Council for Advices, public and non-public home and economy developing organizations etc will be consulted.

4.2 Marketing Objectives:

Market research will consist of two types of sources. i.e. Primary and Secondary.

Primary sources will contain consultations with people, focus on groups, perform reviews and direct annotations.

In Secondary sources all the data will be reviewed as well as study will be prepared.

Much of the research will be conducted in connection with the creation of the Bank’s Strategic Plan, which comprises of thorough analysis of present market conditions and credit gaps. The Bank will continuously supplement its Strategic Plan by research, focus group discussions and consultations. There is always potential for innovative products that could support our members’ needs in the area of housing and economic development.

4.3 Critical Issues:

Besides Strategic Plan, the Bank will perform a research study in analyzing the shock of the fore-closure and sub-prime lending catastrophe within bank. Current market data will be provided to the bank through such research. There search will be derived from a variety of reliable governmental and non-governmental sources.

5. Marketing Strategy:

5.1 Marketing Strategies & Tactics & (5.2) Measurement of Strategies:

The Marketing strategy will be through various channels.

Advertising can catch attention if customers are to be attracted by using sources like television, websites, greeting cards, letters, radio, print & online publications.etc.

* By creating listings in Business & Telephone directories as well as Online & Association listings will gather public attention. Sponsoring the research, community events, local charities, sports etc is Barclays’ traditional way of gaining attention.

* A Network can be created by getting response from current and future clients as well as other referees. There will be adverts to reach people via online social networking sites i.e. facebook etc; as well as provide guidance on blogs and through community events etc.

* Promotions such as mail outs, freebies and discount coupons can be mailed out to attract residential customers.

* Internal marketing can be applied using employee relations or referral incentives to promote the product.

6. Implementation:

6.1 Realistic Implementation Schedule

The above mentioned project can be implemented and fully working in as little as 8-12 Months.

6.2 Approximate Human Resources

This program will create various opportunities i.e.

* Chief Marketing Officer: CMO will include Brand & Advertising, Payment Innovations, Internet Channel Services, Strategy & Business Development, Corporate Affairs and Loyalty Marketing.

* Credit Risk Officer: to identify, assesses and manage all commercial activity.

* Decision Science: Decision Science will use statistical modelling and analytical techniques and will help decide whether or not to accept an application.

* Credit Risk: Analysts in this job will be performing following tasks:

a) use their statistical procedures to lessen risk and capitalize on rewards

b) increase value of customer relationships

c) perform a comprehensive tracking and examination to identify which actions to apply to a customers account and when.

* High Risk Account Management/Collections: This area will either:

a) spot accounts presentation early signs of financial tension so they can helped to get back control of their financial position and lessen potential loss to the business.

OR

b) help customers presently in financial stress to concur a repayment chart that will allow them to manage their sum unpaid in an affordable way.

Other opportunities, i.e. Management Information & Forecasting, Risk Delivery & Control etc.

6.4 What If Scenario:

In order to cope with different situations of stress, different scenarios will be built and tested to cope with the unforeseen circumstances.

Such scenarios will help us know when to increase sales and by what percentage or when to decrease sales or material cost and by what percentage.

7. Financial Summary:

7.1 Breakdown of Marketing Cost:

Marketing Cost will be calculated by following method:

Type of Cost

m

Preparation Cost

3.6

Packaging /Handling Costs

1.2

Labour

1.8

Transport Cost

1.0

Other Costs

1.0

Marketing fees

4.0

Marketing Agent fees

0.8

Total costs

13.40

7.1.1 Preparation costs: Marketing Product design and preparation cost at an initial level.

7.1.2 Handling costs: At all stages during the marketing chain marketing product will be packed and unpacked, loaded and unloaded, stored etc. All individual handling costs will not amount to much but the total of all handling costs will be significant figure.

7.1.3 Transport costs: The transportation and distribution cost is another cost in marketing.

7.1.4 Product losses: The treatment of losses in marketing, if there are no quantity losses there can still be quality losses,

7.1.5 Storage costs Storage is an important cost as marketing products will be kept in warehouses.

7.2 No. of Clients:

With addition to 824,000 present clients, our initial Focus is around 100,000 Clients in the start with an aim to have around 600,000 Clients within 3 years of running.

7.3 Approximate Revenue Estimate for 3 Years:

Following are expected revenues for next 3 years

Forecasted Income Statement

For the year ended 31st December 2012

2012

2011

2010

m

m

m

Interest income

2,801

2,530

218

Interest expense

(1,654)

(1,569)

(126)

Net interest income

1,147

961

92

Fee and commission income

948

867

80

Fee and commission expense

(108)

(97)

(8)

Net fee and commission income

840

770

72

Net trading income

132

375

36

Net investment income

68

121

9

Principal transactions

200

497

457

Net premiums from insurance contracts

109

101

10

Other income

37

18

2

Total income

2,333

2,347

633

Net claims and benefits incurred on insurance contracts

(23)

(49)

(5)

Total income net of insurance claims

2,310

2,298

628

Impairment charges and other credit provisions

(541)

(279)

(21)

Net income

1,769

2,019

607

Staff costs

(777)

(840)

(81)

Administration and general expenses

(566)

(414)

(39)

Depreciation of property, plant and equipment

(63)

(46)

(4)

Amortisation of intangible assets

(29)

(18)

(1)

Operating expenses

(1,435)

(1,318)

(125)

Share of post-tax results of associates and joint ventures

Profit on disposal of subsidiaries, associates and joint ventures

Gains on acquisitions

Profit before tax

610

704

486

Tax

(79)

(198)

(19)

Profit after tax

531

506

467

8. Controls and Measurement:

8.1 Product Launch & Performance Monitoring:

8.1.1 Timing: This will have a major and crucial attitude on a victorious launch. Our plan will consider all the pertinent inner and outer timing aspects to tell us the best time to come to the market. i.e.:

a) Season: Since our product is seasonal, there is always ideal timing to launch.

b) Inner aspects: There are few aspects which prove to be more admirable than others.

c) Macroeconomics: may also impact on period.

8.1.2 Location: have a greater influence over the launch of product. Mainly we will be looking at 3 levels to be regarded in the product launch strategy.

8.1.3 Area: The service will be a full national launch and limited to UK customers only.

8.1.4 Distribution: This is another factor to have an influence on launch. The crucial channels would be looked for. A launch plan will consider following factors, i.e. Policy for our trading, plans we have for promotions, profiles of our customer etc.

8.1.5 Promotion: At initial launch, promotions will be run to gain customer attention. Since it will be a product available to online customers only, customer awareness will be required to gain attention and attract customers.

The fragmentary monitoring of performance to generate statistics in order to judge the success or other required strategies, will be job of performance management. Performance enhancement will be achieved by proper information to the upper management about current performance. Progress will be monitored by Key Performance Indicators (KPIs), which will be identified to enable such progression.

Three areas of activity that are important for success will need to be looked outn:

* assessments regarding financial performance as well as development of business,

* Views of all the clients about professional service provided by the company,

* Data from personnel regarding their attitude towards the service company.

8.2 Contingency Planning:

The Contingency planning process will have three phases.

8.2.1 Pre-Planning Phase this area is where objectives will be distinct, alerted planed guesses will be made, duties will be clear and project management team will be incorporated etc

8.2.2 Planning Phase it will be a seven step contingency process. The process will be:

* Gain loyalty from executives, CEO and higher-ranking management

* launch a contingency development cluster

* perform a contingency plan capacity assessment

* execute the assessing of risk

* institute organization precedence

* View and classify needs for revival

* Come up with a concluding plan for contingency ops.

8.2.3 Post-Planning Phase: This is the phase where all the performance will be checked and recorded and used for training and development purpose.

8.2.4 Address all business-critical operations: An excellent plan will identify critical business functions, and outline a way to lessen losses.

8.2.5 Identify risks a range of risks will be identified that business might face and their potential to radically disrupt or damage our continuous business operations.

8.2.6 Prioritizing risks A careful equilibrium among over-preparation for unexpected that may never happen, and satisfactory preparation so that we can respond rapidly and effectively to a catastrophe situation, when needed.

References

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