Analysis of Commerce Bank Case Solution
Background
Mr. Hill, an innovator to serve the customers better as compared to his competitors, created the strategies which were quite different from the entire banking industry in regards to its operational standpoint and from the service delivery design and thus, he was successful in creating value for his customers in a very short time period. 7 P of Marketing
In analyzing the P of marketing
• Product: “Customers are always concerned with the product, which can provide more benefits in the lowest cost. Moreover, Commerce is successful in building its products which can guarantee more benefits at the lowest cost. • Price: The prices that Commerce charges to its products from its customers are very reasonable as compared to the other competitors. • Place: In analyzing the place of product, Commerce has successfully tackled this by opening branches in the locations, which can ensure proximity to them. • Promotion: ‘Commerce spent $500,000/branch in NYC on promotion…’ and ‘Red and blue painted Commerce vans with an emblazoned logo. • People: “This is not a job for someone who is interested in being cool or indifferent”. • Process: “Theway we look at credit and credit quality is a lot tougher…” - Falese • Physical Evidence: “They i.e. customers know what the deal is whenever they visit one of our banks” – John Cunningham (CMO)
Service Offering
The bank’s entire service offering comprises of some of the core offering as well as some supplementary offerings.
Core Offering
The core offerings of this bank are not very different from the other banks in the industry however,as Mr. Hill’s prime focus was on the deposit-base and not on the loan-base therefore, its core banking services include:
• Loans: Commerce’s value is not in its loan base but in its deposit base. Therefore,for the bank, the loans are not given out as easily as other banks in the industry, which indicates that growth is based on loans since growth in deposit can occur only with the lowest interest rate. However, credit quality checks for loan approval is very stringent. • ATMs: Withdrawals were available at any ATM and purchases anywhere through Visa were accepted.
Supplementary Offering
The supplementary offering as provided by Mr. Hill is summarized as below:
FACILITATORS DIFFERENTIATORS
Information
Commerce decided to use live agents over the phone instead of Voice Response Unit (VRU)to talk to customers Consultation...................
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