Capital one

Problem Definition:

>Management of direct mail was one of the most tactical challenges across all segments, hence Capital One had to use other mediums to segment their consumers.

> The basic reason for primary consumers to switch cards was that other cards provided reward programs with 27% better benefits.

>Lack of physical branches posed a challenge for face-to-face contact and building a relationship with customers.

>It also had to maintain its competition with Canadian banks.

>As they had limited budget Senior Brand Manager Clinton Braganza couldn't invest in all options, so to design his strategy he went with three main challenges: choosing an appropriate target, launching nationwide advertisements, and implementing the best plan to deliver their message to consumers.

Marketing Objective:

>To manage its growth not just within United States and Canada but also within the United Kingdom by providing excellent services to its current consumers.

>Expand its credit card product offerings and channels to acquire new customers.
>Organize consumer research and obtain internal approvals at different stages.

>Four objectives that Capital One put into motion for sustaining its business and maximizing its profits are:
∙       Improving marketing to build up new accounts.
∙       Retain its existing accounts.
∙       Minimizing credit losses.
∙       Minimizing costs.

Target Audience:

>They distinguished their audience in three segments on the basis of default risk:
∙       Super Prime-low risk for default.
∙       Sub Prime-high risk for default.
∙       Prime- between super and sub-prime.

>Within each segment there are two more segments divided into ‘transactors’ who pay off their credit balance every month and avoid interest charges and’ revolvers’ who pay minimum monthly payments but not their full amount.

Communication Objectives:

>Capital One speaks directly to the target segment about their services provided.

>Stay distinctive from its competitors by offering several different kinds of cards like Low-Rate Platinum MasterCard, 1% Cash Rebate Platinum MasterCard, Gold MasterCard and, Secured MasterCard.

>The advertisements successfully conveyed the message that a card is a much better medium to pay bills, is a safer option to carry rather than cash, and it helps consumers keep a record of their expenses.

>Their positioning strategy conveys a clear message that they can immediately deliver their services to their consumers and they do abide by it.

>A significant advertisement campaign was developed for various countries which created a very successful   awareness level of 98 percent in the United States and 95 percent in the United Kingdom.

>Balancing needs of driving new customer signals with the longer term goals of influencing consumer behavior, increasing satisfaction rate and reducing attrition.

Consumer Awareness:

>The ‘TROLL’ advertisement where a man is wrestling with his credit card balance and its high-interest rates, and the next moment his wife switches the balance over to Capital One card with no transfer charges with a saving of $500 a year. I really liked this idea which portrayed the fact that every individual has to deal with card balance and payment of interest rate and if he/she gets an opportunity wherein they can escape it, then it could really make their lives much easier. This advertisement shows an easy way of handling your card balance and payments which could really help the consumer know about the benefits for them and how they can save money.

>It concentrates on an introductory interest rate for bringing in new customers.

>Focusing on fraud protection.

>Makes consumer aware about the convenience of using Capital One as an easy daily life transaction medium