MARKETING AT THE

VANGUARD GROUP
Akanksha Arora
14P004
Anup Kumar 14P009
Jenson Johny 14P021
Priyanshu Saxena 14P035
Shashank Gupta
14P046
Srishti Jain
14P050

INTRODUCTION

Vanguard is a mutual mutual funds organization

This implies that the clients and owners of the firm are the same.
So it provides a single point of focus and results in more efficient
and committed strategies

118 mutual funds accounted for 10% of all US mutual fund assets

Enjoyed good reputation in increasingly cluttered market

Ranked 1st or 2nd in net cash inflows for 8 out of 10 years

THE VANGUARD WAY

Multifunctional Teams
With the continuous training and job rotations, employees
becomes proficient in numerous functional domains.

Few Organizational levels

With a small hierarchy in the organization, the accountability and
efficiency remains high.

Rewarding employees on productivity basis

A partnership plan for employees has been devised based
significantly on Vanguard fund returns against competitor returns.
The rewards are based on performance and length of service

THE VANGUARD WAY

With the Vanguard Unmatchable Excellence program as a total

quality management process, Vanguard successfully cut $320
million out of annual shareholder expenses and cut its expense
ratio by 17% using tools like six sigma and dashboards

The DAWAW Principle

This principle stands for Dont ask who but why and was firmly
followed by Vanguard through dashboards. The various
performance attributes at every level of organization was recorded
in the form of dashboard and decisions were made based on
them. It also helps employees to fit themselves into the bigger
picture.

CUSTOMER SEGMENTS

Retail
Core with up to 250,000 $
Voyage with 250,000 $ to 1,000,000 $
Flagship more than 1,000,000 $

Institutional Clients
Full Service
Investment Only universities, hospitals etc.
Defined benefits services lower profile segment in which
Vanguard provided services to pension plans

STRENGTHS

Vanguard funds were no-load and purchased directly by

investors

Industrys lowest average expense ratio resulting in low

expenses to clients

Redemptions from Vanguard funds were at a rate that was half

the industrys rate

Good reputation in cluttered market

Highest loyalty scores in the industry

Single point of focus as clients and owners are same

WEAKNESSES

Measures of sales and marketing effectiveness represented 5%

of the total dashboard share

Companys marketing policies discouraged active traders, a

profitable segment for firms

Awareness was built by only on word-of-mouth basis

Advertising was product specific, not brand specific

Very less information about customers

Before the new structure no clear accountability and ownership

on objectives

Website was not developed for promoting sales of products and

services but to give information about them

RESTRUCTURING

Activities were organised into four client-service areasfullservice institutional, investment-only institutional, core retail, and
high-net-worth retail

Multiple points of client contact (Silo) reduced to centralized

customer relationship management

Clearer ownership and accountability for every objective

Proactive Marketing. Invest in our way of Investing rather than

product-specific marketing

Television advertising, a first, which provided significant tracking

and measurement capabilities

OPPORTUNITIES

Emerging mass-market
International Expansion opportunity
Build a brand

THREATS

Deregulation enabled 3 largest segments of financial services

industry to compete with each other
Sectors boom years were over as growth rate slowed

RECOMMENDATIONS
Make their marketing more aggressive. Target selective customers
actively
For example: Conduct investment seminars for the institutions
Inform current customers about benefits of marketing
Link up with brokerage firms
Mutual benefit to both brokerage firms and Vanguard
Broaden their influence in the emerging mass affluent segment
Refers to 8.9 million households with investable assets
ranging from $50,000 to $1 million
Target International markets such as Pacific Rim, Europe
Opportunity in U.S where even 1% market share gain is huge

THANK YOU