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Module code: CM0419
Module name: Contemporary Marketing
Module run: Jan 2019
Coursework title: Mid Assessment
Due Date: 12th April, 2019
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 Executive Summary

“This report compromises the present situation of Vanquis bank which is the leading provider of credit
cards to the people in the non-standard credit market, promotes financial inclusions by bringing credit
cards to people helping people to establish or rebuild their credit profiles and enjoy the increasing utility
of credit-based credit.” “Vanquis Bank is the only bank which provides credit card facilities even to the
bad credit history customers and has recorded 1,733k customers; 3.1% increase year-on-year, 86% of
Vanquis bank customers are satisfied with the service they have been provided with which catches
attention to study their strategies and to evaluate their yearly activities.” Another interesting fact is that
1m customers had registered for the mobile app since it launched in June 2017.

“Vanquish Bank’s ‘low and grow’ approach to extending credit and high levels of customer contact
underpin a sustainable , responsible lending model which produces consistently high levels of customer
satisfaction approaching 90%.”

“The report is generated using various marketing tools and techniques which provide a detail analysis of
the company from the perspective of marketing.”The investigation has been done on the current
products and detailed customer segmentation. The marketing mix which analyses 7 components has
been used to understand the position of market and the company’s marketing strategies relating to
acquire it. The SWOT and TOWS analysis indicates the internal and external factors affecting the
productivity of the company. After the detail analysis, future recommendation has also been given in
reference to the TOWS related strategies.

“Moreover, the report highlights the analysis and critiques of the entire operating of the company and
provides recommendations, suggestions for future growth, development and success of the company.”
 Table of contents

Contents

Introduction: ............................................................................................................................................. 4
1.1 Rationale ............................................................................................................................................. 5
2.0 Critique/ Evaluation of current products and services: .................................................................... 5
2.1. Products ............................................................................................................................................ 5
2.2. Current segment of customers: ......................................................................................................... 5
2.2.1 Demographic Segmentation: ....................................................................................................... 5
2.2.2. Behavioral Segmentation: ........................................................................................................... 5
2.3. BCG Matrix ......................................................................................................................................... 6
3. Evaluate the key concepts of marketing mix ............................................................................................ 7
4. Analysis with relative theories .................................................................................................................. 9
4.1 Marketing Concept ............................................................................................................................. 9
4.2 Maslow Theory.................................................................................................................................... 9
4.3 Positioning Map ................................................................................................................................ 10
4.4 Materiality Matrix ............................................................................................................................. 11
5. Recommendation.................................................................................................................................... 11
6. Critique of tools and techniques ............................................................................................................. 12
6.1 Porter’s five force model .................................................................................................................. 12
6.2 SWOT analysis ................................................................................................................................... 12
6.3 TOWS analysis ................................................................................................................................... 13
6.4 PESTLE analysis.................................................................................................................................. 13
7. Conclusion ............................................................................................................................................... 15
8. References .............................................................................................................................................. 16
8. Appendices .............................................................................................................................................. 17
SWOT Analysis......................................................................................................................................... 17
TOWS Analysis......................................................................................................................................... 18
PESTLE Analysis: ...................................................................................................................................... 19
Porter’s Five Forces ................................................................................................................................. 20
Introduction:

“Provident Financial PLC is a financial services provider group which has a history dating back to
1880, founded by Joshua Kelley Waddilove. The company operates through two divisions
namely, Consumer Credit and Vanquis Bank and operates its business across the UK, Republic
of Ireland and Central Europe through its subsidiaries and headquartered in Bradford, the UK.
The following shows us a picture of the brand which is in under Provident Financial PLC.
1.1 Rationale
The report mainly focuses on Vanquis bank, which is one of the greatest brands of Provident
Financial Group (PFG).
“Vanquis Bank which started in 2003 is the leading provider of credit cards to people in the
non-standard credit market, provides credit cards to people who are typically declined by
mainstream credit card providers.”
“Vanquis Bank’s ‘low and grow’ approach to extending credit and high level of customer
contact support a sustainable which produces consistently high levels of customer satisfaction
approach by 90% and due to this results it is worthy of a study.”

2.0 Critique/ Evaluation of current products and services:

2.1. Products
“Vanquis Bank offer two main credit building cards, the Vanquis Card, which has a
representative APR varying from 39.9% to 59.9% depending on the credit circumstances of the
applicant, and the Aquis card, which has a representative APR of 29.8%, both are licensed under
VISA.”

2.2. Current segment of customers:

2.2.1 Demographic Segmentation:

“Vanquis Bank has 1.8m customers which come from all across the UK and Ireland, typically
having low to average incomes, generated from a range of types of employment and state
support facilities, products are suitable as per different income levels of the people and their
credit history.” It offers a wide range of products that are not well served by the mainstream
credit providers by other banks (Vanquis). Below is the diagram which shows the fluctuation of
credit issues due to various reasons.

2.2.2. Behavioral Segmentation:

“The customers’ circumstances and needs tend to be more varied and change more over time
as a result of: (1) Unpredictable life evens; (2) the unexpected expenses of everyday life; (3)
being new to credit; and (4) their own product and service preferences.”
“The customers tend to have different needs and expectations and different levels of access to
products through their more varied credit journeys.”
2.3. BCG Matrix
BCG Matrix is used to analyze the product portfolio, profitable and unprofitable product of
Vanquish Bank. The figure which is presented shows the BCG Matrix of Vanquis Bank.
  Stars
Credit Cards and Retail credit accounts are the star of Vanquis Bank. For the fourth year
running (2018) Vanquis bank has won the Money facts Consumer Award for Credit
Builder Card Provider of the Year. Along with this, it was also winner of the Savings
Champion Awards- Best Long Term Fixed Rate Bond Provider in the year 2018
(www.vanquis.co.uk/about/our-awards).

 Question Mark
There are fears that the borrowers have slipped back into the bad habits from the days
of easy credit. Vanquish Bank provides a broad range of credit cards to help customers
choose a card that is right for their need by offering higher interest rates than its
competitors.

 Cash Cow
Products which Vanquis bank offers has high market share by providing credit card
services with competitively higher interest rates to the people who have been declined
by other credit card service providers.

 Dog
Vanquis Bank provides wide range of products and provides them mainly over the
internet and through direct mail. For those who do not use the internet or for whom the
company does not have an address the bank lacks the advantage to cover the overall
market areas.

3. Evaluate the key concepts of marketing mix

 Vanquis Card  Regular engagement

 Aquis Card  Targeting middle and lower
economy class people
 Higher interest rates than
competitors.

 Low pricing  Price Skimming

 Head office in London
 Mainly through Online
 Digital marketing
 Vanquis bank mobile app.
 Door to Door sales
 Client database of other
partnered brands.
 In-house training and nurturing
talents.
 Customer priority oriented and
timely services
 Customer’s risk profile and
affordability
 Historic payment patterns
 Proper banking infrastructures
 Online marketing
 Customers all over from the UK and
Ireland.
 Personalized services according to
the credibility.
 Through linking up with Parent
Company’s other brands such as
Money barn.
 Motivate teams
 Reinforcing behavior, cultures, and
values
 Invest in leadership, core
capabilities, and talents
 Build a sustainable future
 “The credit line is evaluated at the
point of application during the
agreement.”
 “The payment patterns are used to
access the applicant’s potential
default risk.”
 Expansion in order to cover wide
market range.
 Ensuring well-managed bank’s
branches.
4. Analysis with relative theories

4.1 Marketing Concept

“Vanquis Bank has over 14 years of experience in lending responsibly to its chosen target
market. Its success is based on a clearly defined strategy and a tailored approach to serve
customers in the non- standard credit market.”
“Extending the product range to displace the existing lender is a logical extension of Vanquis
Bank’s credit card offering and represents an attractive opportunity from which to build
from an unsecured loans business.”

4.2 Maslow Theory

Vanquis Bank targets its customers by their needs according to the Maslow Hierarchy need
of change of the buying behavior.
Relating to the theory, Vanquis Bank has been targeting its customers who are in high
Physiological needs, Safety needs which are basic needs and are very important for day to
day expenses. The majority of customers have a bad credit history and have been declined
the credit card facility by other banks. Due to this, Vanquis Bank targets and fulfils the
Psychological and as well as Self- fulfillments needs.
4.3 Positioning Map

With respect to the positioning mapping, it is obvious that Aqua Classic and Ocean Finance
credit card has situated its item as a high preference for quality and price, Barclays Forward
credit card in higher quality with a lower price and finally Marble Credit Card at low quality
with a low price.
4.4 Materiality Matrix

Vanquis Bank moreover locks in with their partners to guarantee that it oversees and report
on the customer relation issues that matter most to them. The Materiality Matrix was
referred to the data of 2017. The bank embraces materiality that is fabric to Provident
Financial. The above chart helps to make out a difference to illuminate the reasons and
customer relation technique.

5. Recommendation

To maximize the advantages of SWOT elements, Vanquis Bank should intensify showcasing
procedures to pull in unused customers by providing competitive interest rates and moreover
utilize social media and regularly update its mobile banking app. Similarly, to oversee dangers
they should capitalize their dissemination channel to anticipate credibility and lending systems.
Moreover, to overcome shortcomings, Vanquis Bank can capitalize openings or overcome risk
arising in future.
Vanquis Bank can plan business expansion and open up its branches where there has not been
able to reach as it has high recognition being awarded with Credit Provider of the year 2018 and
has aggressive growth rate for past few years. It can also improve through providing credit to
certain economy class people which has majority market with its awarded titles. It can also
plan strategies such as product mapping to reduce mismatch between assets and liabilities.

6. Critique of tools and techniques

6.1 Porter’s five force model

In spite of the fact that Porter’s competitive advantage was invited by administration
researchers and it is still thought in commerce that there are moreover those who forced
certain evaluates on his work in financial company. In his article Barney states that fetched
and separation cannot be taken as pioneers towards competitiveness allowed (Barney,
1991). In her book McGrath states that the term of inventive economy where “companies
are getting way better encounters, and at wresting unused efficiencies from existing assets”
(McGrath, 2013). “According to her, sustainable competitiveness is not just effective, it is
rather counterproductive”.
“Furthermore thinking about competition within a finance industry such as Vanquis Bank as
the significant threat, is very dangerous perception according to McGrath since there is no
pure inside industry competition any more, now business models compete with each other,
industries and product lines as well (Denning, 2010).” “Klein argues that the way Porter
explained road towards competitive advantage was quite prescriptive. He furthermore
questions the applicability of the latter, since a research in a financial sector found that
model was difficult to follow (Klein, 2001).” “Klein discredits Porter on the basis of
duplication as well, claiming that on more than 500 pages he repeats the term competitive
advantage without properly explaining what it really is, besides that a firm must have it.””

6.2 SWOT analysis

The main benefit of conducting a SWOT investigation is that it has small or no taken toll
which means anybody who gets it can perform a SWOT examination. There is much
utilization of SWOT investigation after less time to address a complex circumstance. This
implies merely can take steps towards moving forward without the cost of an outside
expert or consultant.
When conducting a SWOT analysis, things should be kept in mind that it is only one stage of
the business planning process. “For complex issues in financial companies such as Vanquis
Bank, proper conduct of in-depth research and analysis to make decision is required.”
 “SWOT Analysis only covers issues related to strength, weakness, opportunity or threat.
Due to this reason, it is difficult to address uncertain or two-sided factors, such as factors
that could either be strengths or a weakness or both, with a SWOT analysis."

6.3 TOWS analysis

“The TOWS analysis is a variant of the SWOT analysis, an analytical tool used for examining
the external and internal situation of an organization, product or service or an
individual.”“TOWS analysis involves identifying and defining the SWOT, as well as
formulating specifics strategies around these four general elements.”
“In any case, this explanatory device requires looking at to begin with outside
circumstances, particularly the dangers and openings, some time recently analyzing inside
circumstances by distinguishing shortcomings and qualities.”TOWS are fair in reverse
approach to SWOT.
“It is worth emphasizing that a TOWS examination puts emphasis on the outside
environment whereas a SWOT centers on the inside environment.” “For a few strategists
and organizers, analyzing dangers and openings to begin with can be more profitable
particularly on the off chance that qualities and shortcomings are as of now predefined
during past analysis.”

6.4 PESTLE analysis

“A PESTLE analysis is broadly utilized and carried out by corporate firms and business to
think about and understand the environment and market in which they operate.” “A PESTLE
analysis offers firm a chance to evaluate their performance and improve it by analyzing
external factors that influence them in the long run.”
“Though a PESTLE analysis is beneficial, it has certain limitations which can overshadow the
outcome and helps companies understand to study how political, economical, social,
technological and ethical factors affect them.”
“External factors change over time and need constant attention and reviewing.” “Since
external factors are based on assumptions and macro economic conditions, they are as a
barrier to the transparency of PESTLE analysis and make it vulnerable to discrepancies.”
“Firms need to employ or outsource expert research and development workforce bound to
the analysis and this increases expenses and costs, plus capital resources, weak assessment
might result in losses for the company.”
“PESTLE analysis requires expertise and experience from the people involved in the study
plus extensive research and knowledge for the result to be accurate.” “Firms need to invest
highly in research and development for the outcome to be according to the findings of the
analysis and need to bear the expenses and costs of the resources involved in the analysis,
depending on the nature and complexity of research.”
“A PESTLE analysis is not feasible and is insufficient for strategic planning since it focuses on
the external factors more than internal factors; both internal and external factors are
important for a competitive scenario.” “For strategic planning, a PESTLE analysis should be
combined with a SWOT analysis for better results.”
7. Conclusion

“Vanquis Bank delivered an adjusted profit before tax of $206.6m in 2017, 1.0% higher than
2016.” “Despite the growth in customer number and receivables, this primarily reflects a
reduction in margins due to the stable delinquency performance compared with the improving
profile in the first nine months of 2016 and the reduction in ROP income following the
voluntary cessation of sales in April 2016.” “In addition, the business has continued to make
additional investment in the initiatives to augment medium-term growth. As a result, the
business has delivered an annualized return on assets of 11.9% to December 2017, lower than
13.8% to December 2016.”

“Whilst the marketing activity of competitors in both the direct mail and internet channels has
continued, demand for non- standard credit cards continues to be strong.”“The business has
delivered 7.6% year-on-year increase in new credit card customer bookings, reflecting the
benefit from the actions put in place in the second half of last year to develop the credit card
proposition and enhance distribution.”

“The growth in customer numbers have established a sound payment history, generated a
14.6% increase in average receivables. “The focus currently remains on providing unsecured
loans to existing credit card customers prior to the development of an open market proposition
towards the end of the year.”
8. References

Vanquis.co.uk. (2019). Credit Builder Card Provider of the Year - Awards - Vanquis. [online]
Available at: https://www.vanquis.co.uk/about/our-awards [Accessed 12 Apr. 2019].

Mail Online. (2019). Provident share prices rise by 12.4 per cent. [online] Available at:
https://www.dailymail.co.uk/money/markets/article-4978976/Provident-share-prices-rise-12-4-cent.html
[Accessed 1 Apr. 2019].

This is Money. (2019). Bank flogs credit cards in the street as as household debt booms.
[online] Available at: https://www.thisismoney.co.uk/money/cardsloans/article-
3439468/Challenger-bank-Vanquis-flogs-credit-cards-40-rates-street-household-debt-
booms.html [Accessed 3 Apr. 2019].

Provident Financial Group PLC (PFG). (2019). [online] Available at:

https://www.providentfinancial.com/investors/annual-report-2018/ [Accessed 7 Apr. 2019].

Provident Financial Group PLC (PFG). (2019). [online] Available at:

https://www.providentfinancial.com/our-businesses/credit-card/vanquis-bank/ [Accessed 5 Apr. 2019].

Vanquis.co.uk. (2019). Our History - Vanquis. [online] Available at: https://www.vanquis.co.uk/about/our-

history [Accessed 8 Apr. 2019].
8. Appendices

SWOT Analysis:
 TOWS Analysis
Opportunities (O)
 O1- Aggressive growth in past
years.
 O2- Launched new credit card
facilities.
 O3- Received approval to issue
high yield bonds from FSA.
External  O4- Received a passport banking
Factors license to operate in Poland.
Threats (T)
 T1- Faces very high default risk
as it provides credit to
consumers who have bad credit
history.
 T2- Legislative moves affect the
bank adversely.
 T3- Risk due to changing interest
rates resulting in mismatch
between assets and liabilities.
Internal Factors
Strengths (S)
 S1- Awarded Credit Provider of
the year in 2018.
 S2- Two main products- Vanquis
Card and Aquis Card licensed
under VISA.
 S3- Crossed its breakeven point
within 5 years of establishment.
 S4- Involved in charitable causes
in educating children of Kenya.
S-O Strategy
 S1O1- Can plan business
expansion as it has been awarded
prices and looking at the growth
trend.
 S2O2- Can upgrade in terms of
technology with the new features
in the two products.
 S3O1- Can plan for profit as it
already crossed breakeven point.
S-T Strategy
 S1T1- Improvement through
providing credit to bad credit
history consumers to attract
majority market with awarded
title.
 S2T3- Product mapping to reduce
mismatch between assets and
liabilities.
 S2T2- being updated with the
changing regulation with the
products (Vanquis Card and Aquis
Card).
Weaknesses (W)
 W1- Faced Criticism on credit
forums for the high interest rates
charged.
 W2- Faces criticism regarding its
lending policy, from its own
collectors.
 W3- Relatively new brand having
limited reach compared to bigger
brands.
W-O Strategy
 W1O2- Can educate the
customers addressing interest
rate due to new product features.
 W2O2- Lending policy can be
organized with new facilities.
 W3O4- The market reach can be
broadened as it has opportunity
to operate in Poland.
W-T Strategy
 W1T1- Interest rate to be
subjected to credit consuming
behavior.
 W2T2- Proper lending system
according to the legislation to
improve lending policy.
 W3T3- Reach to be broadened by
penetrating interest rates to
compete with bigger brands.
PESTLE Analysis:

 Recent change in government laws due to BREXIT.

 Change in labor laws due to BREXIT.

 National and International Competitors

 Income level of people of UK
 Depreciation effect due to BREXIT

 Economy class
 Customized and personalized credit card services

 Regular Upgrade in mobile banking apps.

 Digital marketing
 Social media

 Favorable banking regulations

 Sustainable business model

 Contribution to society
 CSR activities
Porter’s Five Forces


 Loyal Customers
Its main competitors are Barclays,
Creation Financial services.
 Less threat as it already is well  Has high level of Competitors from
established national and International Banks

 Is very less comparatively.

 Has a growing customer base of
11.3% yearly.
 Less bargaining power of customers

 The threat is there but not as in immediate

threat.
 Because of its credit lending policy to bad
credit history customers, it stands unique
in Market.