An article published on 18 May 2012 on Financial Time, ‘Backbone shares already a marketing incentive’, was talking about one Hong Kong-based brokerage company -‘8 Securities’ making use of the hype surrounding of Passbooks initial public offering, to create values to customers. It also described how this promising company expanded its brand awareness with zero-sum of advertising investment by giving out IIS$200 of Backbone shares to customers who opened an account with them.
In Intention Start- up Challenge 2012, the co-founder of 8 Securities, Abdullah mentioned his team was restated with the ‘legacy technology, not having product development, and most importantly, no own customer experience’ in the traditional industry. Being eager to develop these missing elements in the future investment market, Abdullah started up his own Web 2. 0 Company to launch the innovative ‘customized trading portal’ with acute insight and global ambitious.
In this essay, an analysis is conducted on 8 Securities’ marketing strategy that is mentioned in the article from the following various aspects. Recommendations on possible adjustment and improvement are also provided subsequently. 1. Promotion, in particular, free Backbone shares I Key Issue I * Ethics * Consumer behavior * Customer experience I Segmentation * Differentiation * Targeting I Less important | 2. Future Market and skill for future Marketers I Non- existent point 8 Securities utilized the Backbone shares as part of its promotion strategy.
With the clauses set on the eligibility for the free Backbone shares is to use their online trading services, 8 Securities successfully leverages Backbone as its ‘gimmicks’ to have created a significant market demand of its online trading services in return for the free share incentives. Although the process to receive the free shares was described as ‘simple by signing up’ by 8 Securities, the article brought up a minor ethic issue that in reality it would only deposit the shares to its customers’ account within 14 days instead of 8 minutes as claimed initially.
Despite of the fact that some customers ‘hoping to flip the free Backbone shares immediately after they start trading on Friday are out of luck, 8 Securities’ marketing promotion turned to be a win-win situation after all. Its customer received free shares as extra value on top of using new technology for riding activities, while 8 Securities differentiated itself from its rival by delivering the promotion messages directly to its specific target customers without huge spending on advertisement.
The article mentioned the targeting, though not completely the segmentation, of 8 Securities. The company strategically targeted at young, tech-savvy people who use the social network. Referring to Table 1 below, 8 Security aimed about 46% (1. 6 million) of the total Backbone users in Hong Kong. As such, its marketing promotion through the most popular online social-network channel is proven most effective in his dot. Com era for its reduction in cost and ability to reach out to its target audience instantly and directly globally.
However, as also indicated in Table 1, there are yet more than 50% of the Backbone users is out of its market scope. Porter’s theory ‘having everything for everyone is the generic marketing strategy. However, it will Analysis of the Marketing News Story By shenanigan more in new but different product development to cope the rest of groups respectively, so as to increase market share. Demographic Segmentation I Backbone User I Age 13-18 114% I Age 19-30 (Targeting) | |
Age 31-42 120% I Age 43 and above | | Table 1 : Demographic Segmentation by age distribution of Backbone users (* Backbone 2012 Hong Kong User Demographics) Geographic Segmentation I Area (Greater China) I Population I Percentage I China 1 198% I Hong Kong (Targeting) | | 1% | -rattan | I Macaw 1 552503 I Table 2: Geographic segmentations by population in Greater China (* Data from official estimates by respective government website) 8 Securities also chose geographic segmentation to divide its market into different geographical units, mainly the largest economies in Asia (Financial Times 2012), as
Abdullah sees ‘Asia has huge potential in the market, especially Greater China. There are still many people offline and coming online. ‘ Table 2 above spells out the market distribution in Greater China that 8 Securities targeted and planed to target, I. E. Hong Kong (1%), followed by China (98%). In spite of the huge potential of financial market in China for its wealthier and wealth-aware population, “China – so close yet so hard”, a comment from 8 Securities best describes China as complicated market to foreign investors.
Completely understanding of the culture, the financial regulations and the nonuser behavior in China becomes essential prior to entering the market. For example, one of the major challenges for 8 Securities is that the social networks like Backbone and Twitter are completely restricted therefore inaccessible in China region. Alternatives such as Weight (Watchstrap equivalent), Tenant (Backbone equivalent), Sins Webb (Twitter equivalent) are believed to be better distribution channels in the region. It is therefore recommended the company to invest in R&D for tailored product for China’s market. ALL of customers deserve excellent revive, innovative investing products and superior value’ is stated in the website of 8 Securities. It is believed that 8 Securities’ success is fully tied with the innovation and product development. Most importantly, without being prevented by the risks of new launches, it is the customer focused mind-set that has built its strong customer- centric corporate culture leading to the successful products. Well said Kettle (2005), ‘Customer satisfaction will only be achieved if the entire organization teams up to form a competitively superior customer value. Future marketers are suggested to pay ore attention to consumer behavior and customer experience so as to create demanding product/service to bring higher level of expectation and satisfaction to customers. In short, this article reported one of 8 Securities’ successful online article, such as promotion, ethic, segmentation, targeting, and the skills needed for future marketers. For the nature of this marketing strategy reported, this article would be recommended to be included in the chapter titled ‘Direct and online marketing: building direct customer relationships’ in a revised edition of Jostler’s book.