Marketing Mix of Bank of China and 7Ps (Updated 2024)

The Marketing mix of Bank of China analyses the 7Ps of Bank of China, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of Bank of China. Bank of China is a public company dealing in financial services and banking. It has the distinction of being one of the top five biggest commercial banks that is state-owned in China. The bank is one of the oldest in mainland China and was established in 1912 with its headquarters in Beijing, China. It was named so by the government as it wanted to establish it as a central bank.

Hence, it also issued banknotes for its government along with other banks. Bank of China has the fifth-largest market capitalization value in the global market and the second-largest lender total assets in the domestic market. It faces competition in the online platform of banking here in China from different banks, and some of its main competitors in online platforms are as follows-

• China Construction Bank Corporation
• Industrial and Commercial Bank of China Limited
• Agricultural Bank of China Tianjin Jinnan Sub-Branch

About Bank of China

• Type: State-owned commercial bank
• Industry: Banking
• Founded: 1912
• Founder: Chen Jintao
• Headquarters: Beijing, China
• Area served: Worldwide
• Key people: Yi Gang (Chairman) and Ouyang Xiaowen (CEO)
• Number of employees: 370,000

Bank of China Product Strategy

The product mix consulting services of a large bank like the Bank of China are typically quite diverse and comprehensive, covering various banking and financial service sectors. While I can provide a general overview of the current account and consulting services here, remember that specific offerings of correspondent banks can vary over time and across different regions.

The new Product Mix of the Bank of China in 2024 is as follows (Source).

1. Retail Banking Services: This includes personal accounts (savings, checking), personal loans, mortgages, credit cards, and wealth management services for individual customers.
2. Corporate Banking Services: Tailored for businesses and corporations, this segment offers services like business accounts, corporate loans, trade financing, and treasury services.
3. Investment Banking: This area covers services like underwriting, advisory services for mergers and acquisitions, debt and equity issuance, and other capital market services.
4. International Banking: This encompasses cross-border banking services, foreign exchange, overseas investment opportunities, and services for multinational corporations.
5. Online and Mobile Banking Services: Digital banking platforms offering online transactions, mobile banking apps, and other tech-driven banking solutions.
6. Private Banking and Wealth Management: Services for high-net-worth individuals, including bespoke investment advice, wealth management, and private banking services.
7. Insurance Products: This might include life insurance, health insurance, and various forms of asset insurance, often through subsidiaries or partnerships with insurance companies.
8. Asset Management: Providing services in fund management, portfolio management for individuals and institutions, and other investment management services.

Bank of China Pricing Strategy

The pricing strategy of the Bank of China, a leading player in the global banking sector, reflects a blend of competitive positioning, high-value put-based pricing, asset management and market segmentation. Here’s a detailed look at its pricing strategy.

1. Competitive Benchmarking: The Bank of China keenly assesses its competitors’ pricing structures within each market. By aligning its prices with or slightly below critical competitors, especially in saturated markets, the bank remains an attractive option for cost-conscious customers.
2. Value-Based Pricing: Recognizing the diverse needs of its customers, Bank of China employs a value-based pricing strategy for its premium services. This approach ensures that customers who seek more sophisticated banking products, like wealth management or specialized corporate finance services, feel they are receiving value commensurate with the pricing.
3. Segmented Pricing for Diverse Customer Base: Understanding the diversity of its customer base, the bank implements segmented pricing. This means different customer segments—retail account holders and large enterprises—are offered tailored pricing models based on their specific banking needs and service usage.
4. Dynamic and Flexible Pricing Models: In response to market dynamics, regulatory changes, and economic fluctuations, the Bank of China adopts flexible pricing models. This flexibility allows the bank to adjust interest rates, fees, and service charges in line with economic conditions, regulatory policies, and competitive pressures.
5. Bundled Services and Relationship Pricing: The bank often bundles services at a discounted rate to foster long-term customer relationships.

Bank of China Place Strategy

Bank of China is highly active in the global market and has branches in financial markets in every continent. Its first overseas branch was in London in 1929. It operates in nearly 27 countries, including the USA, Brazil, France, Germany, Australia, and Canada.

The place strategy of the Bank of China, which pertains to how the central bank does transfers and where it offers its services to financial markets in other countries, can be summarized in the following points:

1. Global Branch Network: The Bank of China maintains a vast network of branches and service outlets, not only in mainland China but also in major financial centers worldwide, ensuring accessibility for both local and international clients.
2. Strategic Location of Branches: The bank strategically locates its branches in both urban and rural areas, commercial districts, and areas with high Chinese diaspora populations, aiming to cater to a diverse range of customers, from individuals to large corporations.
3. Online and Digital Banking Platforms: Emphasizing digital transformation, the bank offers comprehensive online and mobile banking services, allowing customers to access financial services remotely, which is crucial in today’s digital age.
4. ATM and Self-Service Terminals: A widespread network of ATMs and self-service terminals enhances customer convenience, enabling access to essential banking services like cash withdrawals, deposits, and account inquiries without needing to visit a branch.
5. Collaborations and Partnerships: The Bank of China actively forms strategic alliances and partnerships with other financial institutions and service networks worldwide, enhancing its global presence and accessibility to customers in different regions.

Bank of China Promotion Strategy

Promotional activities are an essential part of any business venture, and the Bank of China has also taken its help to promote its various services and products in the domestic market. A 6% cash rebate was offered to overseas customers on shopping with a BOC Shop Card, 5% cash back with its credit card, lesser processing fees while transferring funds, home loans, and 25% off on travel insurance fees; the bank’s credit card clients were eligible for participation in more activities than their debit cards and card holders and shopping on particular solar term days enabled a customer to get a gift and other benefits. One of the vital considerations for such activities is to increase brand awareness and visibility as people tend to make mouth publicity whenever a new scheme is launched.

Some Recent Video ads and Print ads for the Bank of China are:

https://www.cnbc.com/2024/01/09/china-investors-will-be-asking-these-3-questions-in-2024.html

Bank of China People Strategy

When discussing the “People” component of the service marketing mix for the Bank of China, it’s essential to consider various aspects that influence customer perceptions and interactions with the bank. This encompasses the staff of customer solution managers and employees and the broader cultural and human resource strategies and credit policies that impact service delivery in corporate banking. Here are some points that might be relevant:

1. Customer Service Staff: The Bank of China, like any significant bank, significantly emphasizes the quality of its customer service staff. These individuals are the front line of the bank’s interaction with customers, and their professionalism, knowledge, and demeanor play a crucial role in shaping customer experiences and satisfaction.
2. Training and Development: The bank invests in continuous training and development programs for its employees to ensure they are well-versed in the latest banking practices, regulations, and technologies. This enables them to provide informed and efficient service to customers.
3. Diversity and Inclusion: Bank of China operates in multiple countries and serves a diverse customer base. Its commitment to diversity and inclusion is critical in ensuring that all customers feel valued and understood, regardless of their background or where they are.
4. Employee Satisfaction and Retention: The bank’s strategies for employee satisfaction and retention are also essential to the “People” component. Happy and engaged employees are more likely to provide superior service, contributing positively to the bank’s reputation and customer satisfaction.
5. Cultural Sensitivity: Given its global presence, the Bank of China’s staff are trained in cultural sensitivity to serve customers from various cultural backgrounds effectively. This is crucial for maintaining a respectful and understanding service environment.
6. Digital Literacy: With the increasing emphasis on digital banking solutions, the bank ensures its staff are digitally literate. This enables them to assist customers effectively with online and mobile banking services, which are increasingly becoming the primary banking channels for many customers.
7. Leadership and Management: The leadership and management teams at the Bank of China play a pivotal role in setting the tone for service excellence. Their approach to governance, customer service, and employee welfare directly impacts how the bank’s staff performs and how customers perceive the bank.
8. Cross-functional Teams: The bank employs cross-functional teams to deliver comprehensive solutions to customers. This holistic approach ensures that customers receive well-rounded support, whether their needs relate to personal banking, investments, or business services.
9. Compliance and Ethical Standards: Employees are trained and expected to adhere to high compliance and ethical standards. This is critical in the banking sector, where trust and integrity form the foundation of customer relationships.
10. Community Engagement: Lastly, the people at the Bank of China are involved in community engagement and corporate social responsibility initiatives. These activities contribute to the bank’s positive image and allow employees to develop a sense of purpose and connection with the broader community.

Bank of China Process Strategy

The “Process” component of the service marketing mix for the Bank of China refers to the procedures, mechanisms, and flow of activities by which banking services are consumed. This aspect is critical in ensuring customer satisfaction and operational efficiency in its branch overseas retail operations. Here are some points detailing the processes at Bank of China and retail operations:

1. Account Opening Procedures: The Bank of China has streamlined its account opening processes to make them as efficient and customer-friendly as possible. This includes online applications, minimal paperwork, and quick verification methods to enhance customer experience.
2. Loan Application and Approval Process: The bank has a clear and transparent process for loan applications and approvals, incorporating both online and offline methods. It uses credit scoring and risk assessment models to expedite approvals while ensuring due diligence.
3. Digital Banking Services: Emphasis on digital banking has led to the development of user-friendly online banking platforms and mobile banking apps. These digital services allow customers to conduct transactions, manage accounts, and access banking services 24/7 from anywhere.
4. Customer Service Channels: The process includes multiple customer service channels, such as in-branch services, online chatbots, telephone banking, and email support, ensuring that customers can reach the bank through their preferred mode of communication.
5. Transaction Processing: The bank employs advanced technology for fast and secure processing of transactions, whether they are domestic or international transfers, bill payments, or other banking transactions. Efficiency and security are key priorities.
6. Feedback and Complaint Resolution: Bank of China has a structured process for collecting customer feedback and resolving complaints. This involves clear communication channels for feedback submission, timely response mechanisms, and resolution procedures to address customer grievances effectively.
7. Banking Product Development Process: The bank follows a customer-centric approach to developing its products and services. This involves market research, customer feedback, and trend analysis to ensure that new offerings meet customers’ evolving needs.
8. Risk Management and Compliance: The process includes rigorous risk management and compliance protocols to protect customer interests and meet regulatory requirements. This encompasses anti-money laundering (AML) checks, Know-your-customer (KYC) processes and data protection measures.
9. Staff Training and Development: Continuous training programs ensure they are knowledgeable about the bank’s processes, products, and technologies. This is vital for delivering high-quality service and advice to customers.
10. Branch and ATM Network Management: The bank ensures that its physical presence, through branches and ATMs, is optimized for customer convenience and efficiency. This includes strategic placement, maintenance, and facility updating to meet customer banking needs.
11. Cross-Border Banking Services: For international banking, the Bank of China has processes in place to facilitate cross-border transactions, foreign exchange services, and international trade financing, considering the global nature of its customer base.
12. Sustainability and Environmental Considerations: In its processes, the Bank of China incorporates sustainability and environmental considerations, reflecting its commitment to social responsibility and reducing its ecological footprint.

Bank of China Physical Evidence Strategy

The “Physical Evidence” component of the service marketing mix refers to the environment in which the service is delivered, along with any tangible elements that facilitate the service or help consumers evaluate the service beforehand. For the Bank of China and other banks however, physical evidence plays a unique platform and crucial role in shaping perceptions of quality and trustworthiness. Here are some points detailing the physical evidence associated with business interaction with the Bank of China:

1. Branch Design and Layout: Bank of China branches’ physical design and layout create a welcoming and professional environment for customers. This includes clean, well-lit interiors, comfortable seating areas, and marked sections for different services, enhancing the customer experience.
2. ATM Networks: The extensive network of ATMs, strategically located in convenient and accessible locations, is physical evidence of the bank’s reach and commitment to providing round-the-clock banking services.
3. Branding Elements: The bank’s logo, colors, and branding elements are consistently displayed across branches, ATMs, official documents, and digital platforms. These visual elements help in building brand recognition and trust among customers.
4. Official Website and Mobile Banking App: The appearance, functionality, and user experience of the bank’s official website and mobile banking app are crucial forms of physical evidence. They reflect the bank’s commitment to providing secure, convenient, modern banking solutions.
5. Marketing Materials: Printed and digital marketing materials, including brochures, flyers, and online ads, are designed to be visually appealing and informative, providing tangible evidence of the bank’s products and services.
6. Bank Statements and Financial Reports: The quality and clarity of bank statements, financial reports, and other official documents are physical evidence of the bank’s professionalism and attention to detail.
7. Uniforms and Name Badges: The attire of bank staff, including uniforms and name badges, contributes to the professional image of the bank and makes it easy for customers to identify staff members and their roles.
8. Signage and Wayfinding: Clear signage and wayfinding systems within branches help customers navigate the space efficiently, enhancing the overall service experience.
9. Security Features: Visible security features, such as surveillance cameras, security guards, and secure transaction areas, reassure customers about the safety and confidentiality of their banking transactions.
10. Customer Feedback Systems: Physical and digital customer feedback systems, such as suggestion boxes or online feedback forms, are tangible evidence of the bank’s openness to customer input and commitment to continuous improvement.
11. Awards and Certifications: Displaying awards and certifications in branches or on digital platforms is physical evidence of the bank’s achievements and recognition in the financial industry, further building customer trust.
12. Corporate Social Responsibility (CSR) Initiatives: Information about the bank’s CSR initiatives, whether displayed in branches or through reports and press releases, provides physical evidence of the bank’s commitment to ethical practices and community engagement.

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