SHAHEED ZULFIQAR ALI BHUTTO INSTITUTE OF SCIENCE AND

TECHNOLOGY

TERM PROJECT REPORT

TOPIC: YOUTH SAVING ACCOUNT OF STANDARD CHARTERED

BANK PAKISTAN

SUBMITTED TO:

SIR MUBIN JALIAWALA

SUBMITTED BY:

SYED YASIR RAZA NAQVI (GROUP LEADER)

ADNAN FAROOQ

ADNAN AHMED MEMON

ABDUL SALAM SHAIKH

AMEET KUMAR ARIJA

MIR ASIF RAZA

DATED:

10TH NOVEMBER 2012

TABLE OF CONTENTS

Introduction

Executive Summary

Current Marketing Situation

Market Description

Product Review

Competitive Review

SWOT Analysis

Objectives and Issues

Marketing Strategies

Distribution Strategy

Marketing Mix

Marketing Communication Strategy

Marketing Research

Action Programs

Budget

Control

Introduction

Our growth:

Since 2000, we’ve made a number of alliances and acquisitions. These have made it possible to

broaden our locations and products in key regions and countries.

2011

Singapore – acquisition of GE Money’s Singaporean auto and personal loans provider 

Canada and Australia – acquisition of Gryphon Partners, a mining and metals corporate

advisory firm 

2010

Africa - acquisition of Barclays African custody business

China – we became an investor in Agricultural Bank of China, one of the top commercial banks

in China

India – we launched our first ever Indian Depository, allowing investors in India to participate in

our growth

2009

Africa – acquisition of First Africa Holdings Limited

Asia – acquisition of Cazenovia Asia

India – we increased our investment in UTI Securities to 74.9%

2008

Taiwan – acquisition of the 'good bank' portion of Asia Trust and Investment Corporation

Brazil – acquisition of Lehman Brothers team in Brazil

Vietnam – we announced raising our strategic stake in Vietnam's Asia Commercial Bank to 15%

South Korea – acquisition of South Korea's Yeahreum Mutual Savings Bank

Global – we completed the acquisition of American Express Bank, a wholly-owned subsidiary

of American Express Company, with operations in 47 countries

South Korea – Standard Chartered First Bank Korea Ltd acquires an 80% stake in South Korea's

A Brain, a funds administration company

India – acquisition of a 49% strategic stake in India's UTI Securities, a leading local broking

firm.

2007

Global – we completed the acquisition of Harrison Lovegrove, a leading global oil and gas

M&A advisory boutique

Global – we acquired Pembroke, an aircraft leasing, financing and management firm.

2006

Taiwan –  acquisition of Hsinchu International Bank (USD1.2bn)

Pakistan – acquisition of 95.37% of Union Bank (USD487m)

Indonesia – acquisition of a 26% stake in PermataBank by the consortium of Standard Chartered

Bank & PT Astra International Tbk (USD193m). Total stake held in PermataBank by consortium

today is 89%.

Africa – acquisition of 25% in First Africa Group Holdings Ltd.

2005

Acquisition of a 20% stake in Fleming Family & Partners (USD78m)

China – acquisition of 19.99% of China Bohai Bank (USD123m)

Bangladesh – acquisition of Amex Bank's Bangladesh business (USD25m)

Vietnam – acquisition of 8.56% stake in Asia Commercial Bank (USD22m)

Global – acquisition of a minority stake (6%) in Travelex as part of Apax-led consortium

South Korea – acquisition of Korea First Bank (USD3.3bn).

2004

Global – acquisition of ANZ's Project Finance business with assets

Indonesia – acquisition of 63% stake in PermataBank by the consortium of Standard Chartered

Bank & PT Astra International Tbk (USD355m)

Hong Kong – acquisition of Prime Credit

2000

Hong Kong – acquisition of Chase Manhattan Card Company (USD1.32bn)

Global – acquisition of ANZ Grind lays (USD1.34bn).

Our strategy:

We aspire to be the world's best international bank, leading the way in Asia, Africa and

the Middle East.

We focus on building deep and long-standing relationships with our clients and

customers and constantly look to improve the quality of our products and services.

Our success:

In the last nine years we have reported record income and profits. Twenty-four of our

markets now deliver over US$100 million of income, fourteen over US$100 million in

profit.

Listed on the London, Hong Kong and Mumbai stock exchanges, we rank among the top

20 companies in the FTSE-100 by market capitalization.

Our focus on basic banking

Our success is a result of being obsessed with the basics of banking - balancing the

pursuit of growth with a disciplined management of costs and risks and keeping a firm

grip on liquidity and capital.

Through our international network and expertise, we facilitate trade across markets,

enable multinational clients to conduct complex business transactions and service the

needs of an increasingly international consumer base.

Who We Are:

We are leading international banking group committed to build a sustainable business

over Long-Term.

Our Business :

We provide a wide range of products and services for personal and business Customer

across 70 Markets.

OUR BRAND AND VALUES

By doing things the right way, we can support our customers and clients while having a positive

impact on the wider economy.

Our History

Standard Chartered Wholesale Banking builds on over 150 years of banking experience in

Asia, Africa and the Middle East. In fact, we’re the only international bank with over 90 per

cent profits generated from these areas.

Our excellent local knowledge of attractive growing markets around the world consistently

places us in the top three providers for our clients’ wholesale banking needs. Known as ‘The

banker’s bank’, we are recognized for our unmatched on-the-ground expertise and

relationship-focused approach to business.

Did you know?

Over 60 nationalities are represented among our top 500 senior leaders

We’re the only international bank with over 90 per cent profits from Asia, Africa, and the

Middle-East

We’re the only international bank with a long unbroken banking history in India and China

We’re the largest international bank in India in terms of branch network and profits

We’re the only bank in the Falkland Islands

We’re one of three note issuing banks in Hong Kong.

The Standard Chartered Group: background

The Standard Chartered Group was formed in 1969 through a merger of two banks: The Standard Bank of

British South Africa founded in 1863, and the Chartered Bank of India, Australia and China,

founded in 1853.

This friendly merger allowed both banks to capitalize on the expansion of trade caused by the

increased movement of goods from Europe to the East and Africa.

In 1986 a hostile takeover bid was made for the Group by Lloyds Bank of the United

Kingdom. When the bid was defeated, Standard Chartered entered a period of change.

Provisions had to be made against third world debt exposure and loans to corporations and

entrepreneurs who could not meet their commitments. Standard Chartered began a series of

divestments notably in the United States and South Africa, and also entered into a number of

asset sales.

Since the early 90s, Standard Chartered has focused on developing its strong franchises in Asia,

Africa and the Middle East, using its operations in the United Kingdom and North America to

provide customers with a bridge between these markets. We have also focused on consumer,

corporate and institutional banking, as well as the provision of treasury services – areas in which

the Group has particular strength and expertise.

In the new millennium we acquired Grindlays Bank from the ANZ Group and the Chase

Consumer Banking operations in Hong Kong in 2000.

Since 2005, we have achieved several milestones with a number of strategic alliances and

acquisitions that will extend our client and geographic reach and enhance our capabilities. Some

of them include A Brain, American Express Bank, Cazenove Asia, Harrison Lovegrove and

Pembrok

Middle East, North Africa and Pakistan

Standard Chartered Middle East, North Africa and Pakistan offers expertise and services for:

Trade finance

Commodity trade finance

Cash management

Custody

Foreign exchange

Debt capital markets

Corporate finance

Supply chain finance

Islamic banking

In detail

Standard Chartered has been operating in Pakistan for over 140 years, with the Chartered Bank

first opening an office in Karachi in 1863. Today it is the largest international bank in Pakistan

with 127 branches. This follows the successful acquisition of ANZ Grindlays (in 2000) and the

Union Bank of Pakistan (in 2006).  We were the first international bank to receive an Islamic

banking license, and to be listed on all three of its stock exchanges.

We also offer a full array of banking services and cash management solutions across Bahrain,

Oman, Qatar, Jordan, Lebanon, and the UAE. We were the first bank to open a branch in Jordan,

and are now the largest international bank operating there today.

Standard Chartered is currently creating a major resourcing hub in the U.A.E at the Dubai

International Finance Centre (DIFC). The region is central to our entire geographic footprint and

will play an increasingly pivotal role in facilitating trade flows between Asia and Africa.

Standard Chartered was the first settlement bank for the Dubai International Financial Exchange

(DIFX), the first bank to purchase property in the DIFC and the first wholesale bank to receive a

licence there.  

Our Middle East and North Africa network also services several surrounding countries.

Executive Summary

We want to Suggest Standard Chartered to launch its Youth saving account in Pakistan as many

banks are only focusing on child saving accounts, old age saving accounts and business related

account which offers many services and products free and on discount rates along with higher

interest rates. SCB is willing to focus youth segment of Pakistan which is the 60% of the total

population. SCB will design this product according to the needs and wants of youth populations

so they can make good relations with the youth by offering discounts on dinning, shopping,

travelling, etc. also willing to add security related services like Life Insurance, Cash Growth

Facility on different amount which is to be save in account. The services which are unique as

they can offer insurance for accidental and normal death for their beneficiary like on accidental

death SCB will give 4 time multipliers of the total amount and 2 multipliers on normal death.

Current Marketing Situation:

As Standard Chartered is working in Pakistan since not very long but working at a pace like

many local banks fulfilling the banking needs of individual and corporate banking needs. SCB is

one of the leading multinational banks who cater on a local level with multinational Brand

Persona.

SCB is currently offering different products and services for individual, Business and Basic

banking needs along with Islamic products.

Following are the type of accounts with some product segment.

Basic Banking Accounts.

Special Saving Accounts.

Current Accounts.

Term Deposits.

Insurance Plans.

Investment Plans.

Dream Packs:

EASY Banking.

Spend & Save.

Secure the future.

Business Saver.

Saadiq Asaan.

Saadiq Bachat.

Categories:

General Banking

Priority Banking

As in current Market Situation, every bank is offering saving account for old age peoples and for

young savers with specialized rates.

We (SCB) are willing to come up with some innovation in banking for Youth Segment of our

country which is comprises of more then 50% of the total population. Not a single bank is

willing to cater this segment.

Market Description:

Standard Chartered Bank’s Market consists of consumers and business users, who prefer to do

banking for the security and safety concerns. More than that for the growth of the

money .Specific Segment being targeted during the previous years was the old age group people

who want profit to cope up with their daily expenses like medicines, grocery etc. and the young

saver, for them their parents save for their future. No bank is targeting the mass group of our

population. So Standard Chartered Bank is willing to take initiative to launch “Youth Saving

Account” along with the attractive offers and benefits which really attract the consumers of all

income group and students of universities and colleges.

Need & Corresponding Benefits of Standard Chartered Consumer Banking:

Target Segment Customer Needs Corresponding Features

Business Man > Business Transactions >Easy Banking Services.

> Banking Instruments >Personalize RM services to cater Individual business need.

>Online Transfer >All Banking instruments are free for business A/cs.

>Internet Banking > Also for Priority Banking Segment.

>Compatible Rates

Individual >Remittance >For Priority Customers invert remittance is for free and for general its is

also free but for transferring money will make them change.

>Online Banking >Internet Banking/Transfer is for free.

.>Internet Banking > ATM/Debit card first free issuance.

>Cheque Book first 25 leave is for free

Youth ______ > Account Maintenance >Category wise it depends.

>Attractive Offers > Online Banking is free.

>Online Banking >Cash Back Facility.

>Alliances > Discounts on Alliances for priority & general customers.

>Banking for the Future > Insurance Covered Account.

Product Review

Youth Saving Account offers the following standard features:

Banking for the segment age group (16-30) including collage/ university students and

office going youth segment of our country which mostly lives in urban areas.

Different banking instruments are free on first issuance like debit card, online banking, 1st

cheaque book and discounts on 2nd issuance, other are available on subsidized rate.

Youth Saving Account is available in all categories like this account segment is for

general banking and priority banking customers.

Personalized Customer founder member card which will be use to avail discounts on

different alliances.

Competitive Review

The emergence of youth saving account is on the customer demand and as per the market trend

to grab the un tapped youth segment of our society which increase in the NTBs (New to Bank)

customers in a easy way by targeting the existing customer’s family members initially and

become the part of our bank and start banking with confidence and also take active participation

in the bank’s growth.

Other banks like Barclays, HSBC, HBL, MCB and many other banks operating in Pakistan and

only offer good rates and discounts for old age groups who are above 60 and young saving

including age group under 12. The youth segment is neglected in recent banking trends as it is

the largest part of our population.

SCB will be the first bank in Pakistan’s history who initiate this step to introduce banking with

our youth and give them confidence as they said “Here for Good”.

SWOT Analysis

• Strengths:

1. Leading Multinational Bank

2. Proper Channel of Branch Distribution

3. First one to introduce this product

4. Big Market share as compared to other foreign banks

• Weakness:

1. Low Profit Margins

• Opportunity:

1. First one to introduce this product

2. Pakistan is a Youth Population Country

• Threats:

1. Poverty

2. Low Income of newly employed youth

3. Competitors

Distribution Review

Standard Chartered Bank’s products and services will be distribute through a network of retail

banking system in the Major cities which carry the urban population of youth like Karachi,

Islamabad, Lahore, Multan, Quetta initially.

Objectives & Issues

We have set aggressive but achievable objectives for the first and second year of market entry.

First Year Objective:

During the SCB’s youth saving account’s initial year on the market we are aiming for a 5 to 10

percent share of the urban market. We are not defining the sales growth objective because this

segment is bit shaky in terms of saving and investing money.

Second Year Objective:

Our second year objective are to achieve 10 to 15 percent share based on sales of youth saving

account and to design promotion activities in such a way youth will attract as by this initiative

other banks will all launch the youth related account

Issues:

In relation to the product launch, our major issue is to establish a well- regarded brand name

liked to a meaning full positioning. We must invest heavily in marketing to create a memorable

and distinctive brand image projecting innovation and customer value. We also must measure

awareness and response so we can adjust on marketing efforts as necessary.

Marketing Strategy

Youth saving account’s marketing strategy is based on a positioning by product differentiation.

Our primary consumer target is profiled collage’ university students an the youth who are initial

level of job or may running their business which build the self-esteem in them and association

with banking for them is more valuable an more like a fun thing. This segment can be describe

demographically by age (16-30) and education status.

Our secondary consumer target market is youth entrepreneur who initiate their businesses, we are

also targeting young doctors/engineers and business graduates.

As this age group has fear to deal with bank and usually they avoid using bank accounts because

the they didn’t find any charm an entertainment in banking.

Positioning

As Standard Chartered already position their brand “here For Good” youth saving account under

the umbrella of SCB. Awe is using product differention for youth saving account. We are

position it as the most convenient, fun loving and earned banking norms for the new users with

lots of new experiences in banking as the age group we target is 16-30, consumers in this age

group wants new things to try with adventure.

Marketing Mix

Product:

As earlier in this report we are launching “Youth Saving Account” in of Standard Chartered

Bank for the youth (age 16-30) with a lot of benefits and enjoyment in banking sector very first

time. Offers in both category i.e., priority and general banking.

FREE Insurance Cover

• All Youth accountholders will get a FREE Insurance Cover for their parents / guardians.

• Death due to Accident: 4 times the average deposit amount. Max coverage PKR 2

Million (cap PKR 2 Million)

• Average deposit amount: Three months average balance of the account prior to date of

death

• Death due to Sickness: 2 times the average deposit amount. Cap of PKR 1 Million.

Price:

Minimum Balance Requirement for opening Youth Saving Account:

Minimum Balance Requirement (MASS) : PKR 0

Minimum Balance Requirement (Priority): PKR 1,000,000 in Current Account, PKR

2,000,000 in Saving Account or PKR 3,000,000 Total Relationship Balance.

Place:

Youth Saving Account will be available at all branches of SCB in Karachi, Islamabad,

Lahore, Quetta & Multan initially.

Promotions:

Promotions include following benefits and alliances which will be offer to our customers.

BENEFITS FOR Youth Saving ACCOUNT

1.      First Free Cheque Book

2.      Free Bank Statement

3.      Free Insurance Cover

4.      Personalized Picture ID card for the Youth which will give him/her access to exciting

events & amazing offers at the alliance outlets

5.      Exclusive discount / offers at the selected alliance outlets in area of entertainment,

apparel, book stores etc.

Alliance partners for Youth Saving Account:

1. Arena

Discounts:

10% games

10% café mist,

10% membership,

10% birthday parties,

5 months free entry for priority a/c holders)

2. Pie In the sky

15% discount on all bakery products

Discount on outdoor catering

3. Liberty books

10% off on purchase of 1000/- or more

15% off on purchase of 2000/- or more

4. Nike

Rs 500 off crocs footwear worth Rs 5500/-

5. MetLife Alico

Insurance coverage for parents

Death due to accident: 4 times the average deposit amount. Max coverage 2 million

Death due to sickness: 2 times the average deposit amount. Max coverage 1 million

3 months average balance prior to death

6. Chocó lounge

20% discount on chocolates for Priority a/c

15% for Mass

10% discounts on giveaways minimum order Rs 50000/-

7. Café Down Town

20% discount on party arrangement

15% discount on fine dining

8. Scentsation

5% discount on all products

Scentsation loyalty card on a minimum purchase of PKR 8000 or above

Marketing Communication Strategy

For marketing we will start activations through ATLs & BTLs in which we design billboards,

kiosk, TV commercials etc,

We will start BTL activities in universities, colleges, malls and also focus on direct sales.

Marketing Research

We have conduct survey through word of mouth and one-on-one discussion to the youth of different Universities and market places at SZABIST, KU University, IQRA University, also at different Colleges of Karachi city, after survey and market test we identify the specific features and benefits that target market actually wanted in Youth Saving Account, also we measure the customers attitude towards other competing Banks and their products, Finally having seen customers needs and market test we design our product that will meet the customer’s needs and satisfaction.

Action Program:

The Youth Saving account will be introduced in January 2013, we as Standard Chartered Bank have certain action programs that we will be implementing in first 3 months of the next year to achieve our stated objectives. We will be taking following actions in the different months of the introductory year,

January: We will initiate with sales promotion campaign to educate our current and potential customers about Youth Saving Account and generate excitement for the product launch in February. We will exhibit at the major public places such as: Shopping Malls etc of the big cities of Pakistan e.g.: Karachi, Lahore and Islamabad initially. Our CRO’s will also be taking this responsibility of promoting the new product by informing the customers all about the features and benefits of Youth Saving Account.

February: February 2013 is the month of launching the Pakistan’s first ever Youth Saving Account which will be satisfying all the needs of youth of Pakistan, along with that we’ll increase the intensity of advertising on electronic media to aware the youth about the SCB’s new product.

March: After the launch of the product in February, March is the month of attracting the youth towards our product, we feel that the people of the age whom we are targeting might already have their accounts in different banks, to divert them from those banks and compelling them to open an account in SCB’s Youth Saving Account, We have decided to give them an offer of a gift worth Rs. 1000 on opening an account.

Budgets:

Total first year revenue for the Youth Saving Account 10000000 is projected by having 2000 account holders at a minimum amount is 5000.

Control:

We plan to have tight control measure to closely monitor quality and customer satisfaction. As a result it will enable us to react quickly in correcting any problems that may occur, it will also

make us proactive for occurring any problem in future so that we will have contingency plan to overcome the unfavorable situation. We will also have good accountability and control tools by which we can come to know about upcoming new trends, changes, technology and competition.

Reference: www.scb.com.pk

Interview related to product design was conducted by Mr.Ahsan Balooch (Branch Manager Sea

View Branch)