Marketing of Financial Products: Commonwealth Bank of Australia

Subject: Financial Marketing
Pages: 6
Words: 1535
Reading time:
7 min
Study level: College


The purpose of this paper is to re-propose to the board of the Commonwealth Bank of Australia the need to shift from the traditional transactional approach of marketing financial services to a more modern and strategic relationship marketing approach.

Background Information

The CBA marketing intelligence, as well as the financial marketing review committee, realizes the paradigm shift that marketing has undergone in the recent past and which it continues to undergo. They, therefore, assert that the bank must embrace the changes to remain strategic and competitive.

CBA has well curved its position in the Australian financial market. Indeed it is one of the leading financial institutions in both Australia as well as overseas countries1. In an elaborate diversification process, the bank has spread its operations in overseas markets such as UK, the United States, Japan Singapore, Hong Kong, Grand Cayman, Malta, Fiji, Indonesia china and Vietnam The bank offers a wide range of financial products and services with addition of fund management and insurance services. The bank has a wide range of customers, which ranges from individuals, small businesses as well corporate clients2.

On 30th June 2006, the bank’s marketing department after close consideration of its latest marketing intelligence made several proposals to the board concerning the most appropriate marketing strategies that the bank needed to put in practice to be in line with the emerging competition trend. Among the proposals was for the bank to adopt a relationship marketing approach to safeguard its customer base from the competitors as well as expand it through customer-oriented marketing and referrals together with specialized customer servicing3. In line with the proposals, the committee notes that the pace of their adoptions has been considerably slow hence the reforms are long overdue.

From a close review of market intelligence and research, the committee notes that the bank is threatened by the latest moves by close rivals to reform its marketing approach. For instance, the national Australian bank’s board in their meeting on 30th November 2008 approved a compressive marketing review proposal for the year 2009 whose aim was to obtain market leadership by the end of 20094. In the proposal, the shift from transactional marketing to relational marketing with minimum cost was among the major strategy. In a board meeting held on 30th June 2008, the ANZ board of directors approved a proposal to adopt relationship marketing strategy that would involve utilization of the current organizational ICT capabilities to establish world-class two way communication with its customers to ensure that the latter are provided with the best level of financial services in the market basing on their feedback on the services that the institution offers5.

The marketing review committee while appreciating the board’s commitment to enhancing the commonwealth Bank of Australia’s marketing effectiveness through approving its earlier proposals reminds the board that the financial market in Australia is becoming more competitive every other day. This therefore necessitates the banks to be on the move in creatively coming up with up-to-date and strategic marketing models in order to regain their favorable positions in the Australian financial sector. This fact forms the fundamentals of this paper.


Commonwealth bank of Australia operates in very competitive environment with the greatest rivalry coming from financial institutions such as reserve bank of Australia, the national Australian bank, NAZ and Westpac among others.

The committee notes that the board approved the acquisition of bank of western Australia ltd and the St Andrew’s Australia Pty Ltd in a move to lessen the competition in April 2008: a move that has drawn sharp criticism from the Australian financial sector union (FSU) and Australian competition and consumer commission(ACCC) thus seeking to oppose the move6. There are however better and more effective strategies to counter competition especially through creatively devising and adopting modern marketing approaches.

The committee notes that there is need to adopt a differentiated marketing approach from the traditional adversarial relationship with customers (that end with the purchase of the service of the product) to a more relational approach where the bank cares about the well-being of the customer even after the sale has been closed.

From the committee’s point of view the current CBA’s marketing models and approaches are not sufficient to beat the ranging competition. Currently the bank’s marketing model treats its clients just like mere customers. In adopting the relationship marketing approach the committee asserts that the bank will effectively own its current customers by virtually converting them into banks ‘partners’. It establishes a relationship between CBA and its clients in such a way that they become part and parcel of the bank to an extent that they have an opportunity to contribute to the banks’ policies and products development.

The strategy breaks the gap between the banks’ clients and management via creation of an efficient and effective two-way communication channel between the bank and the clients (partners). As such, it is easier to follow up on the customers’ experience on the products and services that CBA offers, levels of clients’ satisfaction, and proposals of areas to improve on. The achievement of the latter is that the bank will be able to maintain a highly satisfied consumer base beyond the reach of the rivals via provision of highly specialized and above-the-market products. In addition, the approach will enable the bank to provide its customers with products extras, over and above the bank mainstream financial services that have the highest potential to keep the customers wanting to extend their stay with the Commonwealth Bank of Australia. In addition the move is estimated to aid the bank in retaining close to 100% of its current customers and attracts 25% new customers in 2009

During the December 27th 2006 annual general meeting, the shareholders cried foul that the budget for the proposed bank’s marketing review was very high. They, therefore, asserted that it be reduced to be consistent with banks financial positions7. The committee, after closely considering the shareholders’ Views and the effects of the financial crises, trimmed the budget by 50 percent (see appendix 1) which was unanimously approved by shareholders in the December 28th 2008 annual general meeting8.

The relationship marketing approach will involve the establishment of a comprehensive customer database with features that make it possible for the bank to access each and every customer. This is projected to cost $12 million and should be before the first half of 2009. The committee notes that the bank’s current ICT facilities are sufficient to start off the process, but they will have to be enhanced at a projected cost of $4million. This will be pegged at expanding the bank’s customers’ call center to effectively accommodate the increased number of customers’ calls and collect feedback and proposals. In addition, the approach will see the bank train customers on the use of new IT facilities to support the approach at an estimated cost of $1 million. Also, the approach (if approved) will see the bank hold customers’ concerts and open forums. This will provide an opportunity for customers to meet, get entertained, and have an open chance to share, with the bank’s employees, the matters affecting them, as well as experiences while using the bank’s products and services. This is estimated to cost the bank $10 millions annually. In order to support the relationship marketing programs, the employees will be retrained for a cost of $500000.


The committee recommends that a comprehensive customer database that has details of all customers be established. Furthermore, it should be in use by the end of June 2009. The database should be in a position to allow the bank’s staff to contact each customer at will as well as for customers to effectively communicate with the bank.

The bank should hold an open concert every last Saturday of June that will bring together the banks’ customers and employees in every branch. The open forum will grant the customers an open opportunity to forward their life experiences and complaints if any to the bank. In addition, the concert will provide a forum for customers and employees to socialize and have fun. Furthermore, the bank should hold a family fun day every last Saturday before Christmas where all the banks customers together with their family will come together to have fun, be entertained and socialize on an occasion funded by the bank

The bank should form a marketing partnership with AAP telecommunications Australia, (the top telecommunication firm in Australia) to market the new approach to current and potential customers through cell phones service since it has the highest efficiency in terms of its extensive coverage ability.

The bank marketing and customer care staff should be retrained so as to be equipped with up-to-date customer servicing skills, which is the most efficient and effective way to support the new relationship marketing approach. The training should also be extended to the customer to make them able to use the new ICT facilities that come with the shift to relationship marketing.

More emphasis and funding to be channeled to gathering market intelligence to keep the track of the competitors thus helping commonwealth bank of Australia to maintain its lead not only in Australian financial market but also in other regions where it has operations.


  1. ANZ board meeting minutes- 2008
  2. Australian national banks board meetings minutes- 2008
  3. Aussie Home Loans and Commonwealth Bank to buy Wizard Home Loans
  4. Bank of Western Australia Limited (2008) Bank West and St Andrew’s sold to Commonwealth Bank, 2008.
  5. CBA annual general meeting minutes, 2006
  6. CBA annual general meeting minutes, 2008
  7. CBA to buy 33% Aussie Home Loans stake.
  8. Commonwealth Bank – Strategic vision and business goals.
  9. Commonwealth Bank – History – A brief history of the Commonwealth Bank.
  10. Commonwealth Bank of Australia (2008), Commonwealth Bank of Australia to acquire Bank West and St Andrew’s, 2008. Web.
  11. Commonwealth Bank position on Gunns Limited (2002).
  12. Common wealth bank of Australia-SWOT analyses.


Appendix 1: The tactical plan and projected budget

Proposal Facilitator Time frame Benefits Costs
Customer database/ customers training Customer care/ communication manager January to June 2009 Obtaining customers feedback
Communicating to customers about the banks policies
Collecting customers proposals on area to improve on
$12 millions
Extension of the call center. Operations manager/ customer care manager January to June 2009 Effectiveness an timeliness in handling the large number of customers queries $6 millions
Open concerts
Marketing manager/ operations manager Every last Saturday of June(annual) Handling of customers matters
Enhanced customer bank relationship
Maximum customer satisfaction
Near 100% maintenance of customers and 25% through referrals
$5 Millions
Family fan day Marketing manager Every last Saturday before charismas(annual) Maintenance of entertained cum satisfied customer base
Soliciting customers through referrals
$5 millions
Employees training Personnel development manager From January 2009 on continuous bases Efficiency and effectiveness in handling customers and supporting the relationship marketing strategy $500,000
Expansion of IT facilities IT manager January to December 2009 Increases capacity to support the relationship marketing focus $ 4 millions
Total cost $ 32.5 millions
Total overall benefits of the strategy (projected) Maintain the banks market leadership
Over 95% current customers maintenance
Addition of 25% average new customers annually

Appendix 2: Table showing commonwealth banks financial position (West Australia)

Financial institution Deposits Branches ATMs
CBA 22.5 11.9 19.7
Bank west 23.5 13.3 18.5
Merged entity 46.0 25.4 38.1
ANZ 14.3 13.2 22.6
NAB 11.9 11.3 10.3
WBC/St George 15.1 18.1 16.7
Bendigo/Adelaide 2.6 6.0 3.1
Elders <1 15.6
RaboBank <1 1.4
Others 9.0 9.1
Total 100 100 100

Source: ACCC


  1. Commonwealth Bank – Strategic vision and business goals
  2. Common wealth bank of Australia-SWOT analyses
  3. Common wealth bank of Australia-SWOT analyses
  4. Australian national banks board meetings minutes- 2008
  5. ANZ board meeting minutes- 2008
  6. Commonwealth Bank of Australia (2008), Commonwealth Bank of Australia to acquire Bank West and St Andrew’s
  7. CBA annual general meeting minutes 2006
  8. CBA annual general meeting minutes 2008