A New UK Government Backed Financial Product

Executive summary

This task of presenting a new government oriented financial product as commissioned by UK government is an overview, which will explain gradual stages staring from selection of such product to an effective market orientation. Here, a modified social security scheme has selected to promote by targeting lagging behind personnel and SMEs especially should be actually in touch of such assistance. The of late economic depression is a major causal variable for which that kind of personal financial item has elected. The report will start with an actual proof of conducting the study followed by mentioning of various marketing tools and techniques over it. The situation of current marketplace will show some functionality of existing relevant offers. Legal protection mechanism is a listing of several rules and regulations regarding the formation and functionality of public security system. Factor analysis and environmental awareness are the stages of explaining some internal and external variables affecting the issue by promoting public responsiveness. Marketing research will emphasise on conducting interview and observation as basic tools. Brand management and competitive theories will develop upon product orientation while communication and promotional part will focus upon use of IMC including advertisement, public awareness, and direct marketing programs. PLC, BCG, Ansoff’s model, pricing, and entry theory are further discussion for making specific decisions in terms of strategic, production and action planning. Finally, viability testing and audience justifications will be explained to make some suggestions for an ultimate outcome of validity and realistic.

Introduction

The recent economic edge is being highly experienced with global economic downturn that has changed the vision of public and private operational policies and techniques greatly. Unlike other economically developed countries, UK is also passing through that situation where government is the basic force to make significant contribution to control the depression through a number of welfare plans and schemes. Being well predictive marketing professionals, these researchers would like to place a feasible report to suggest the UK government for launching a new pattern of social security plan for adopting as a part of personal finance programs. Personal Finance has proved as an effective tool for gaining an optimistic existence during such recession period similar to some private entities like- Tesco, UK under the financial downturn of 2008. Among various combinations of personal financing options, social security has assumed to be more applicable because of some of its inherent characteristics, reformative opportunity, and mutual adjustability to achieve the intended goal. However, before analysing so, it is very much essential to have a clear understanding about such security scheme. It has popularly known as social insurance program for the motive of delivering social security against some socially identified problems like- old age, poverty, lack of employment etc. Thus, this program involves some basic components of insurance, income regulation, and community protection plans, which are blend together to reach at a specific solution of increasing public reserve and solving the extreme crisis of greater employment opportunity from local to national level. However, following the history of 1937, we can expect that a modified version of such policy would also be fruitful and accepted as a right solution at right time.

Evidence of originality

The basic purpose of this report is to introduce a government oriented financial product to public market which will assumed to be fruitful and practical in handling the financial stress in UK market. Reddin (1987) stated that several options would be available for such selection such as various types of personal financing which can be defined as an implementation of financial rules and procedures for making such forms of decisions individually or as a group like- savings account, loans and credit cards, investing stocks, insurance, income tax and social security plans etc. Among those different alternatives, the last one has been chosen for making such proposal because of various explicit and implicit benefits and amendment which can be assumed to be effective for maintaining the indicated situation contained by this item, such as:

• Social security scheme would be appropriate for acting effectively for a longer period of time rather than short or medium- run incentive.
• It involves sufficient forecasted liabilities and monetary provisions that are integral topic of continuous actuarial feedback.
• Prolonged planning relating with adaptive methods, precision, prediction, seriousness and distinguished decisions would be resulted into symbolizing professional value.
• Following the basic rules of personal finance, which indicates assessment, goal establishment, practical integration with intended goal, executive discipline, and adoption of continuous development with regular feedback and monitoring functions in an incorporated way will pose into meeting the overall objective of public security scheme.
• The projection will also maintain the basic standard of logical implementation, which will make the research for realizing the degree and timing of objective in terms of personal assessment, measurement of sufficient protection from recession period, necessary incentives for lowering income taxes or using progressive taxation method, adoption of investment objective, retirement and similar types of welfare planning which are assumed to generate sufficient level of general satisfaction in utilizing and experiencing immediately;
• After analysing the financial downturn, it can easily visualise that there exists an extreme need of huge urgent financial support flowing from the government or some other affordable sector, but other than government, there are actually no other affordable parties to rescue the nation because of several issues including legal laws, perfect measurement of macro needs and feasibility. In these circumstances, an introduction and promotion of security scheme will appreciated by addressing the major depressing points by serving poverty alleviation, insurance, non- contributory, global, means- tested and discretionary benefits, employment opportunity programs.
• Along with the basic nature of the proposed product for fitting with recent needs, the projective marketing techniques, models and theories in association with strategic evaluation and analysis of present and future outcome, segmenting, targeting and positioning of the scheme, contingency analysis, implementation of virtual and physical communicative devices and some other effective decision making tools in relation with problem are expected to be an effective device, which will also prove the originality of this planning in a credible manner

Use of marketing tools and models

This report will be a comprehensive representation of a productive market orientation, which will focus on various marketing tools and models need to incorporate in a logical way. Such orientation will emphasise upon various criteria of marketing and management related with product, price, place, and promotion in relation with evolution and commercialization of the selected social security scheme. So, some of such marketing representations are mentioned as below-

• Customer- centered marketing model: – This process theoretically explains a complete mixture of overall marketing strategy and the marketing mix revealing a process flow of segmenting, targeting and positioning which can be graphically shown as-

• Porter’s 5 forces model of competition: – This model will analyse the present competitive situation that the scheme may face from the private and public competitors. It involves 5 components, as-

• Product/ market expansion grid: – This grid will be helpful to make an overview for the identification of growth of the product by market penetration, market development, product development, or diversification (Manton 2008). This well- known marketing tool is also being recognised as Ansoff’s model which can be shown as-

• The Boston Consulting Group approach: – The BCG model is a portfolio planning technique for evaluating the government based social security units in terms of relative market growth rate and relative market share. It has four ingredients among which this security scheme is assumed to obtain the Question mark position, such as-

• Product Life Cycle (PLC) strategy: – With this strategic theory, the duration and expansion of the security scheme’s total sales and profits will be shown over its lifetime by the gradual development of five stages, as-

• SWOT analysis: – SWOT analysis is one of the most popular marketing management tools that are widely used to measure the related company or product strength, weakness, opportunity and threatening factors confronting the operative environment and market.
• PEST analysis: – PEST stands for political, economic, socio- cultural and technological factors affecting the launching item mostly acts as a major tool of analysing the internal and external environment.
• STP strategy: – It will introduce the process of market segmentation, targeting and positioning because of certain marketing variables.
• Integrated marketing communications model: By using the concept of IMC, it will be possible to carefully incorporate and communicate the desired communication channels for delivering a clear, steady, and compelling message about the system and the background of its provider, which means the UK government. At a zest, it can be visualized as-

Additionally, an effective communication model will be needed to develop which will cover the essential tasks from creating awareness to making purchase generally known as buyer- readiness stages as below-

• Push/ pull strategy: – These are major forms of promotional mix strategies, which will evaluate for adopting the best promotional decision for the discussing scheme.

Understanding the current marketplace

At present, UK is already experiencing with an existing scheme served for social security purpose that had undertaken by the government. Such system generally stands for the selective issues of comprehension, insurance plan, flat rate advantages and assistance, sufficiency with differentiated administration. Unfortunately, such planning was never been successful because of operational incompetence and utilization of scattered rules by several entities but still now national insurance captures majority of the community oriented security system over the country. Because of implementing deficiency, several factors are leading in this field like- income support, fiscal tax agreement along with professional and private advantages in terms of income assistance or situation demand up to earnings.

Recently, income supportive program has not given at adequate level but still recognised as one of the most effective part social security because of its assurance of least level of income for the collectors. In involves four integral ingredients as “applicable amount”“, premiums”“, housing costs” and “deductions”. The government makes two types of replies considering conversion of other advantages for hanging off the security net while the other is altering the individual pattern, complicated procedure of adopting many applicants. To solve the persistent unemployment problem, marginal employment program had been developed defining causal, seasonal and short- run workforce. From the last of 20^th century, “welfare to work”, “welfare reform” had been popularized in terms of giving personalization, individualization and contracting provisions for giving people diversified welfare opportunities. Regarding the pension benefit, the market is experiencing various types of pension credit including “Guarantee Credit”. Child benefit has provided on flat- rate without very high take up of merely 99%. Although the existing offers have several benefits, at the same time, it has confronted with some difficulties regarding horizontal distribution and inappropriate targeting method.

So, the inter- country insurance benefits feature can be summed up as

Legal protection methods and mechanisms

British social security scheme occupies a long history of around 40 years. Within this longer period, that scheme has renovated and modified up to situational demand and several bindings. All of such reformative actions require maintaining some historical specification of laws. By analysing history, it has been found out that most of the basic ingredients of the after- War social security legislation continuing until now. In 1960’s major reformations, the new structure had established. So, the most important laws and legislations acting for lawful protective measures have discussed as following-

• The Family Allowance Act, 1945 ensures the lower income families for receiving a threshold of income tax. Similarly, National Insurance Act, 1946 explains a general categorization of membership upon the amount of benefits could gain by each category.
• In respect with financial and administrative purpose, the proposed benefits has offered on flat- rate condition where the insured members pay a specific amount in each week in a conditional return of specific rate of per week profit along with extra allowances for dependents. The equivalent program is also required to make by the employer. This Act is enforced to secure the contribution of the overall enabled members regarding their age, sex and types of insurance.
• National Insurance Act, 1946 had been formed to assist industrial injuries as well as almost all types of industrial calamity and diseases. Under this law, four types of benefits must be paid regarding injury, disability, additional allowance and finally benefit at death.
• National Assistance Act, 1948 claims for the security for people without adequate assets with the conditional clauses regarding full- time employment factor, age factor and for “urgent cases” considering original taxation.
• “National Superannuation” 1957 states the alteration of recent flat- rate in terms of comparative involvement and payment of pension. It also offers security at various stages of job- life, after- retirement attrition of advantage for inflation and other related issues.
• National Insurance Act, 1959 is another version of providing security at limited level and only workable for retirement benefits. Here, regulations have been developed for issuing “contracted- out” workforce in terms of their professional pension liability for any alteration of their career path.
• Redundancy Payment Act had passed in 1965 within a boundary of giving security benefits of by considering the employee’s age, income, and duration of activity with the employer. Several restrictions exist here to define the legal range of transaction with each party.
• National Insurance Act, 1966 had passed to assure the beneficiaries in case of unemployment, sickness and the like. Here, no additional subsidy has made as well as no off- contact activity has allowed. Thus, it can recognise as a short- run beneficiary item of social security.
• Social Security Act, 1966 had formed up by the modified central Ministry. This is a reformative act containing several terms and conditions of previously noted acts.
• The Family Income Supplement Act, 1970 is a legal legislation that restricts the placement of stated security containing single- parent who also provides full- time labor in intended job. Here, income limitation also prevails that must be maintained to gain validity.
• National Insurance Act, 1970 containing 3 major provisions while the last one is scoping the subsequently extended incentives at a lower rate with necessary monitoring without tax requirement. An extended version of this act had passed in 1971 featuring long- term sickness conditioning.
• National Insurance Act, 1972, 1973 and 1974 had been established consequently ruling of extra advantages level and increasing of contributive motto and ceiling term of £62 with a contribution rate of 5.5%.
• Social Security Act, 1973 sates the financial assistance flows from employers to employees with a flat- rate annual review. Here, pay- as- you- go basis of payment is used. Such types of legislation is also enforces occupational pension schemes for protecting pension rights through a conservation of transfer before the movement of getting retired and reserve scheme legislates an obligatory payment for all workers aged between 21 and formal pension age. The 1975 act has made important reformation of 4.5% reduction of previous both party contribution with a sequential “guarantees” provided by the country for diminishing any discriminatory factor for women as a burden of the imposed rules.
• Income- related extra retirement pensions along with remembrance benefits have increased by 5% from 6 April 2009. Similarly, re- rating order has also raised from £8.10 to £12.05 for the involvement of 3 weeks classes.
• The new regulations of 2009 have improved the smaller and larger income restrictions of social security planning for class 1 from £95 to £844 along with the LET or Low Earnings Threshold from £13500 to £14000 in 2009- 2010.

Therefore, while introducing our proposed security scheme, all of such constitutions must studied properly so that the basic orientation and planned marketing approaches must fit to the philosophy of national laws and thus accepted by legislative bodies.

Internal/ external analysis and demonstration of environmental awareness

The internal and external analysis of the environment upon which the product will offer to compete is highly influential since environment plays a major role in formal generalization and marketing of the product (Hisrich & Peters 2006). However, the internal/ external environmental variables can analysed in light of the projected marketing system, such as-

External factors

As the diagram shows that, the external environment of the government social security system will be consisted of some variables, which are mostly uncontrollable in nature, such as-

• Economy: According to our prior knowledge, the present economic condition of Great Britain is going through the crisis paves because of global recession. Such phenomenon has changed the overall socio- economic scenario of the nation through the lower GDP, GNP, employment scopes, disposable income, and so one. Significantly, the depression has created huge unemployment problem throughout the country that is also acting as a major threat for economic efficiency.
• Culture: An evaluation in cultural changes may consider shifts in the population by demographics.
• Technology: Technological consideration in mega distribution of social security scheme had not yet been popular in UK with a special government support while there is a major potential by popularizing this term through an introduction of e- distribution channel by using internet.
• Legal concerns: As discussed in the prior section, there will be a large number of legal laws and public legislation, which has obeyed sincerely while a new scheme, is to orient to public. Besides the formulation of the scheme, the regulation may also impose burden upon prices, media exposition and planned marketing programs.
• Demand: As the hit global recession has touched UK economy severely, the need for such public welfare incentive is intense today rather than any other supportive actions like- credit card, banking, stock or bond (Telegraph Media Group Ltd 2009). As we know that government support towards mega, corporations have accomplished while any types of direct initiative for assisting the general population has not yet made properly. In this situation, an exposition of public supportive social security scheme can presumed to be highly demandable product.
• Competition: Here, competition actually exists within market demand of various basic financial and personal financing options.

Internal factors

Some of the most influential variables of internal environment are-

• Financial resources: The monetary resources will calculate upon the amount of funds needed to meet the goals and objectives desired to obtain through the product plan.
• Management team: The government must build up an effective management team and assign responsibilities for implementing the presented plan to be successful. Integration, transparency, and co- operation are also highly essential in contribution of that success.
• Goals and objectives: The proposed security scheme will be marketed by taking the broader mission of “support you best” with the associated goal and objective of serving the affected properly for adequately secure their intended needs. This proposition will help the core strategy for making long- run marketing decision.

The basic demonstration for creating environmental awareness program is one of the major difficult terms in the entire planning process since it can regard as a developing phase of making the product acceptable and affordable to the target audience. At present, along with mega ventures, both the SMEs and huge population of the country are suffering from a common problem of deficit of their personal funding in cash. Apart from the former one, our projected financial community security item will be develop to assist the later two specially in terms of flat- rate cash, incentive, short- term loan etc. In this case, if the intended audience is not alert about efficient measures for removing their sufferings, then they would not been able to adopt or enjoy the benefits of projected program. So, a prior exhibition regarding the general and comparative advantages of the product needs to carefully developed that can also consider as a portion of communication plan, which is also relating with demand creation technique. So, precisely explaining, in order to make an effective demonstration both public and private sector will need to work together. Here, different types of government owned financial agencies including bank, insurance, and stock exchange can adopt public awareness programs though their regular bulletins, publications, newsletters etc. Similarly, government can make direct campaign through newspapers, popular magazines, or billboards. Other than that, the financial agencies through which the security scheme will distribute to people can also pertain in the public awareness programs by means of brand development.

Market/ marketing research

Malhotra (2009) stated that the basic objective of conducting marketing research in this regard would be accumulation of data for determining such types of information in terms of who will purchase the offer, what will be the expected size of potential market. the other reasons are to determine what price will be appropriate to charge, what will be the most effective distribution channel as well as what will be the most effective promotion strategy for providing information and reaching to potential customers. Hence, the research task can conduct by the value-generating firm or here, the government or by an external consultant (Daykin 2001). In the simplest way, we would like to follow some stages in conducting the required market/ marketing research which are described as below-

• Define the purpose or objectives: – Here, a committee will form to make a list of the information, which will need to prepare the apparent parts of the plan. Some selective objectives would be-

  • How much the target audience will be willing to consume the security system?
  • How much amount they will be willing to pay for such utilization?
  • Why the potential customers will intend to buy the product rather than existing alternative ones?
  • Where they would like to hear or inform about such offer?
• Gathering data from secondary sources: – By assessing secondary sources, it will be possible to collect the information, which is already been processed. Notable secondary sources will be newspapers, libraries, magazines, books, government revenue, and tax and finance departments, non- government personal financing agencies, business reports and journals, annual budget bulletin, previously executed research findings and internet sources etc.
• Gathering Information from Primary Sources: For evaluating gained information from the secondary sources, primary data collection is very necessary here while research approach is one of the very crucial terminologies.
• Development of research approach– The research approach that develops the entire methodology will base on theory of descriptive or qualitative research along with inductive reasoning. Therefore, it is essential to build up a research approach for creating qualitative methodology, which prepares a precise research design for showing the forms of designing and collection of data with an integrated emphasise on logical relations. Descriptive research will use after understanding the objectives where the data will be measured upon the capacity and quality of information. In conducting qualitative research through descriptive approach, it must be considered that the inductive approach will be started with a question in order to describe it a while the deductive pattern will follow the issue by working with object background.

Among a number of primary data collection methods, interview and observation will use. Interview can define as an objective discussion between two or more participants. Here, it will construct upon the following surroundings

• What types of data will demand from the respondents,
• Who will be the respondents and for what reason?
• Where it will take place?
• How to describe the objective of the interview;
• Whether to govern and how to evaluate it

For interviewing, a questionnaire will develop to gather information from selected respondent groups who are a part of the actual customers. These groups will involve 100 individuals from XYZ Street of London, ABC Street of Liverpool and KLM Street from Lancashire between the age limits of 25 years to 65 years. The purpose of such interview will be to obtain insights of the customer response and pertaining in the probable consumption of the scheme. For avoiding perceptual bias, the interview will consider individual respondents from 3 zones and executives from 2 companies rather than one. Some other issues of the interview will be-

• Preparation: Before interviewing, two documents will send to executives while the 1^st one will show a primary introduction and the 2^nd will represent the purpose along with illustration of questions.
• Outlining interview session: Here, we will use a semi- structured and unstructured pattern of interviewing.
• Introduction: Each session will begin with narrow discussion regarding the interview goal and problem background. Finally, confidentiality level will need to be developed.
• General discussion: Here, a free- from conversation technique will implemented with containing both open- ended and closed- ended pattern with a vision of not missing any important aspect.
• Conclusion: At the ending, an informal conversation will observe for generating additional information from both kinds of respondents. The, a question will be asked about their perceived experience of the interview.

Observation is another simpler technique of collecting primary data, which respondents of that will observe identified zones regarding the relevant actions, behaviour, and situations. That observation would both disguise and non- disguised through which the researcher could observe the respondents at a presence of their knowledge has observed and without any knowledge of being tapped.

• Data analysis and interpreting the result: – While conducting the primary research, all the data will gathered before the original analysis for getting approval from the required senior government members along with the interviewer. After that, all the unrelated information will be sort out for removing bias. The analysis will go beyond the qualitative motive. Therefore, the “laddering” technique will use here for revealing means end hierarchies for idealising integrative relationships. It will induce a customized structure for identifying the linkage between values, outcomes and the integrated theory of connectivity. Then, the prior classification of interview will explain the relationship among three variables where attributes will explain the environment by utilizing inductive approach for alteration in management techniques, values will exemplify the environmental changes and outcomes are ultimate results.

However, the entire management of methodological review would surrounded by some positive and negative experiences which ca be noted as below.

Interview method:

• Advantages

  • Easily discovering the depth insight of the issue and product opinion;
  • Helpful and less complicated that any other methods for understanding the desired information.
  • Free exchange of information;
• Disadvantages

  • Constraint in finding out and engage skilled interviewers in conducting the interview.
  • Willingly made misinterpretations of the respondents;
  • Distance of decided survey areas may create location barriers in conduction.
  • Higher costs for the arrangement of entire session;
  • Difficulty in analysing the collected data;
  • Survey method;
• Advantages

  • Accumulating such information, which would not provided by the respondents willingly.
  • Avoidance of biasness;
• Disadvantages
• Costly and time-consuming method;
• Some things cannot observe like feelings, attitude, or motives of actual response.

Management of Brands

Kotler & Keller (2006, p. 274) argued that brand is a product or service that is unparallel to similar products to meet specific needs. The unparallel attributes can be logical, functional or tangible related with the brand’s actual performance. Again, these can be emotional and/or intangible with the appearance of brands. Keller, K. L. (2004, p. 3) argued that branding is a means of differentiating products or services from similar other products. It is a process of bestowing the supremacy of brand into products or services of any firm. Thus, the branding is all about the creation of differences among products and services intended to the target audiences- the consumers. It could apply in every kind of products and services where consumers have their preference to buy or consume (Kotler & Keller 2006, p. 275). However, it is a process of creating inimitable discernment- bonding emotional attachment between products and/or services and consumers (Ehrlich & Fanelli 2004, p. 62). On the other hand, brand equity is the value bestowed to products and services (Kotler & Keller 2006, p. 276). The brand equity can come from the consumers’ preference and/or from the out performance of the product/services. To develop brand equity, Organisations need to pass through several kinds of work those eventually help to promote new products and/or services.

Keller (2004, p. 64-75) stated different kinds of driver those are related with the building and strengthening of brand equity such as brand knowledge (i.e., where brand knowledge is thought as the basis of brand equity). The brand knowledge means the associations those consumers have in their mind regarding a particular brand. The brand knowledge has achieved through brand awareness (i.e., the ability of consumers to retrieve prior exposure to the brand and the ability to differentiate the brand from other brands). Brand awareness is a result of increased acquaintance of a brand through concurrent revelation. Its aim to increase the consumers experiences by making them see, hear, and think about the brand so that the consumers find it registered in their memory. These attempts can possible to attain by reinforcing the brand name, its logo, slogan, and others. Doing the same requires a large extent of promotional activities. Therefore, when a firm is branding its products, the newly branded products get large exposure of promotional activities. On the other hand, when there is a new product and/or service under existing brand (strongly paired with the existing brand) will enjoy the promotional advantage because the firm has already placed itself in the consumers mind by initial branding. Moreover, there are several positive advantages of brand awareness those connote the advantage of branding for the promotion of new product and/or service (Keller 2004, p. 64-75):

Advantage of learning: the very first effect created by the brand awareness is the configuration and potency of brand associations. Afterward, the association usually gets registration by new associations. Thus, the new product and/or service get more exposure in front of target consumer and more favour in choice and consumption sets.

Advantage of consideration: the learning effect usually affects the consideration set of consumers. The consumers think about the brand when they think of consuming similar products to which category the brand would select. If the consumers become aware about a brand, there is a chance that the brand would be in the consideration set of consumers and the consumers can eventually evaluate the products to purchase.

Advantage of choice: such an advantage dictates that if the consumers of a brand are aware well enough, the consumers would consider the brand in their purchase situation though there is no further association created with the brand.

These advantages can easily be availed by the new product and/or service when a firm adopts branding because the creation of brand knowledge requires large extent of promotional activities across various media types. On the other hand, the brand equity building requires different kind of marketing programs such as experiential marketing (i.e., connecting the brand knowledge with interesting experience), one-to-one marketing (i.e., direct relationship with consumers for the purpose of information gathering and rapid feedback), relationship advertising (i.e., building the strongest relationship with the consumers) and further strengthening the brand resonance etc. These strategies’ adoption in the branding job also works as the promotion of new products and services (Keller 2004, p. 229-252).

One important aspect of branding is the use of integrated marketing communications to build brand equity. The goal of integrated marketing communication includes short-term financial performance of the Organisation and long-term brand equity. Here, the Organisations undertake different kinds of promotional programs such as advertising (e.g., media advertising, direct response advertising, online advertising, place advertising, point of purchase advertising etc.), promotions (e.g., trade promotions, consumer promotions, event marketing and sponsorship etc.), publicity and public relations, and personal selling. These promotional activities have undertaken for the attainment of desired consumers’ knowledge about the Organisation and its brands. Thus, again the branding process works as the promotion for new product/service (Keller 2004, p. 283-285).

Organisations usually use weight of other elements (called secondary brand knowledge) to build the brand knowledge and eventually building the equity. There are various approaches of the same elements, which actually work for further proliferation of brand knowledge. The use of secondary brand knowledge also works as the promotion of new products and services (Keller, 2004, p. 350-360).

The brand management of an Organisation usually concentrates on brand equity (the profitability and brand awareness of the brand) and seeks to exploit more and more market share through competitive edge. The branding activities discussed above, all works for building and exploiting the brand equity. However, the main task relies on building up the brand awareness in the market since high calibre brands those have not exposed before customers cannot gain market acceptance. Therefore, formation of brand knowledge does the promotion of new products and services since the first task of new product or service marketing is also making the market aware about the new product or service.

Competitive theory

To know about the competition for income, it recommended knowing about what the competition is like to be and how the competitive forces of any industry are strong (Thompson & Strickland, 2008, p. 77). For the very purpose, the analysis tool (the five forces model) developed by Michael E. Porter (1979) is usually used by the academies. Porter (1979, p. 1) argued that there are five forces in any industry and the knowledge of these five forces would help a firm to grab a desirable position in the industry that is less likely to be attacked by others. The five forces of the UK personal finance industry and their competitiveness are as the following (Porter 1979, p. 7):

The competitive rivalry among existing firms (jockeying for competitive position): the strongest force among the five forces is jockeying for competitive position among the existing players in the industry (Thompson & Strickland, 2008, p. 81). Porter (1979, p. 1) argued that the competitive edge is the result of competing on price, product innovation, and advertising policies. In this industry, there are numerous players such as TESCO personal finance, Barclays Bank, Sainsbury Bank etc. The market growth of the industry has slowed down due to the recessionary effects. However, there are numerous closely alike products but in the Government backed programs, the switching cost is higher. The exit barriers in the industry are very high due to the long-term commitment with consumers. The competitors have also been taking price cuts and others competitive strategies for beating competition. Most of the competitors already have gone through mergers and acquisitions for securing better position. Moreover, the industry is a basket of diverse competitors including foreign firms. Thus, the competition becomes more intense (Thompson & Strickland, 2008, p. 83). Again, the entrance of competitors from unrelated business (i.e., TESCO Personal Finance from retailing) makes the industry more competitive. Therefore, the competitive rivalry between existing players is high in the industry.

The potential entry threats in the industry: new entrants in an industry usually come up with large investment base, new resources and differentiated offerings, and intense competitive pressure in an industry (Thompson & Strickland, 2008, p. 84). There are six prominent entry barriers in an industry such as (Porter 1979, p. 6):

• Economies of scale: If existing firms have such economies, new entrant needs to come with large investment or to allow cost disadvantage. The existing firm in the industry have such economies on research and development, advertisement, distribution channels, and adoption of information technology.
• Product differentiation: the existing firms’ brand image and service development usually hinder new entrants. The new entrant requires large promotional budget to overcome it. The product differentiation in the industry is high- importantly in the Government backed programs.
• Capital requirements: capital requirements in this industry are of funding the services. There are little requirements of investment in research and development but high requirements to create brand awareness.
• Disadvantages regarding cost: there are several firms having cost advantage those cannot exploited by new entrant’s independent of their size. Because these firms firmly have either proprietary technology or Government support or the few firms have both such as Government backed programs.
• Access to distribution channels: if a new entrant finds that the distribution channels have tied up by the existing players, it needs to develop distribution channel of its own- again large fund drain. The same is true for the industry.
• Government policy: since Government can discourage and even foreclose entrance in an industry, the new entrance becomes toughest. In this industry for the better access of new product, the Government can easily employ such regulations.

So the threat of new entry in this industry is low (i.e., high entry berries) but the Government would get it easy to enter the industry.

The substitution threats from substitute products: there are several similar product in the industry offered by diversified firms such as banks, insurance companies etc. The Government is also offering similar types of products. Those products could think as substitute to each other. However, due to less risk exposure and very long-term commitments, the Government’s products are standalone in this context. Therefore, the substitution threat to Government backed financial product is low.

The bargaining power of buyers: the bargaining power of buyers usually stems from concentrated purchasing (i.e., large volume purchase), undifferentiated competing products, low profitable buyers (i.e., profitability comes from cost minimization), indifferent product quality of buyers, inability to save buyers’ money etc. (Porter 1979, p. 6). The buyers of the industry do not require purchasing in large volume to profiting from the use of the products. Even to cut costs since they do not use them for further processing of their own product to the market. However, there are several undifferentiated product in the industry but the bargaining power of buyers is low since switching cost is high due to long-term commitments.

The bargaining power of suppliers: the bargaining power of suppliers usually stems from concentration of suppliers’ industry, differentiated product offerings, unimportant customer of the industry etc. (Porter 1979, p. 5). There are usually two kinds of suppliers in an industry such as large suppliers and small supplier. There are large suppliers only for information technology and they have high bargaining power. The rest suppliers are small and thereby they have low bargaining power.

Since the product has substantial strengths and numerous opportunities, the product can easily defence the competitive forces in the market place (Porter 1979, p. 2-9).

Communication and promotion theory

In terms of this aspect for developing the new security scheme, the concept of IMC will be highly emphasised which will immediately focus on awareness, image, or preference objective of target audience. However, in this regard, we will move towards the modern concept of building up of long- term customer relationship over time by an efficient utilization of each party in the intended communication process including sender, encoding, message, media, decoding, receiver, response, feedback and noise.

Before going through the depth, we will need to focus on several stages in effective communication of the scheme, as below-

Identifying target audience: – Here, the target audience has been defined based on social position, need and legislative condition.

Identification of communication objectives: – As early noted that a buyer- readiness stages concept will be implemented here which consists of 6 phases. The target market may be completely unaware or slightly aware of their needs while a communicator 1^st develops awareness and knowledge of the brand. After initiating favourable customer feeling about product orientation, liking and preference stages will overcome. Conviction means creating a belief that the delivered new security plan is best for them. Finally, some participants of the target audience will be fully convinced of the brand and by making actual purchase.

Designing a message: – Here, the popular AIDA (Attention, Interest, Desire, and Action) will be used. Some further decisions would be

• Message content: Among the three types of message appeals of rational, emotional, and moral, the 1^st will use because it will enlighten the audience’s self- interest by showing how the security scheme will solve their problems and maximize their benefits of social and financial assistance.
• Message structure: Here, a purposeful handling of decided pattern of message is required while there are also three options as making an ending or pass it to the audience, preparing a logical argument at first or last and preparing a single- sided or double- sided argument of the product. Among those, the 2^nd structure will choose.
• Message format: The newspaper and magazine ads will require specific headline, copy, illustration, and color. Additional decisions will made regarding message size and position, shape and movement for creating differentiation and special attention.

Choosing media: – The two most common forms of communication channels of both personal and non- personal will be used here, as

• Personal communication channels: In this way, personal communication occurs between two or more people through face- to- face, telephone, mail, or chatting with each other. This form would be highly effective in building brand awareness and recall by using the word- of- mouth concept where the initiator or the plan developer will create personal communication about the scheme between the needed people and family, neighbors, friends and several associates. Buzz marketing will be another effective tool through which opinion leaders will influence for spreading product information to their communities.
• Non- personal communication channels: Here, the vital media, atmosphere, and events will use to communicate directly.

Selecting the message source: – Credible celebrity endorsement would be used here like- political figures and financial executives.

Collecting feedback: – A number of questions will ask whether the selected audience would remember the message, counted times of exposition, important points, personal feelings, and their past and present experience about this government product upon which obligatory changes could made.

For setting the total promotional budget and mix involves two strategic portions discussed as following-

Setting the total promotional budget: – Among four methods of advertisement budgeting involving affordable, percentage- of- sales, competitive- parity and objective- and- task, the final one will be implemented since it incorporates the theme of defining promotional objectives, deciding the actions needed to achieve that and eventually estimating the performance expenditure.

Setting the overall communication mix: – It requires blending of promotional tools for building up a coordinated promotion mix, which will involve

• The characteristics of each promotional tool: By understanding our objective, we will use three forms of promotional tools of advertising, public relation and direct marketing which have selected upon intended communication purpose along with desired effectiveness.

Promotion mix strategies: – There are two popular promotion mix concepts naming as push and pull strategies. The former one refers to using the communication mix to push the product through marketing channels while the later one refers to a promotional strategy, which calls for spending huge advertisement and other communication tools for developing customer demand and when this effort becomes effective, customers will ultimately ask the channel members for using the product. After analysing these two, pull strategy seems to be perfect for the social security scheme as

This strategy seems to be applicable since the plan is focusing upon both B2B and B2C transaction. Such decision also affected by the intended PLC strategy.

Integrating the promotional mix: – Here, some issues must be considered, like- trend analysis, communication audit, identification of contact points, group planning, compatible thematic communication, performance measurement and appointment of a director for communicative persuasion.

Therefore, the three identical forms of communication process have discussed below-

Advertising: – Advertising is the most popular form for communicating with target customers. So, the vital advertising decision can shown as

Source: Self generated from Hitt Ireland, & Hoskisson (2001)

• Selecting advertising objectives: Among three alternatives, informative method would be applicable due to it is effectiveness in introducing a new product category for expressing about its workability and usages.
• Setting advertising budget: By adopting the objective and task, this decision will also reflect PLC and market share strategies.
• Developing advertising strategy: Creating message will involve message strategy, which must be meaningful, distinctive, and believable. Message execution will incorporate slice of life, lifestyle, personality symbolization, and endorsement. Media selection will involve decision regarding reach, frequency, and impact to choosing media like newspapers, television, radio, magazines, outdoor and internet. As an updated concept by developing product web site for providing information and services, affiliation of other government sites and banner ads, selection of TV vehicles as BBC and CNN and timing consideration regarding scheduling for a year through continuity and pulsing.
• Evaluation: Here, communication impact will evaluate for measuring activity of ads.

Direct marketing: – It is a mass-marketing strategy for targeting broad markets with standardised messages and offers through agencies by using customer databases. Some specialized tools will be-

• Telephone marketing: Utilization of phones for selling directly to individuals and business buyers;
• Direct- mail- marketing: it will send the offer, reminder, advantages, and other factors to a customer at a specific address using fax and e- mail.
• Catalog marketing: Use of print, e-catalogs, or video for mailing which are available at agencies and internet;
• Direct- response television marketing: Use of television as infomercial.

Moreover, an integrated direct marketing effort will also made by using all of those vehicles and numerous steps for improving response rates and demand.

Public relation: – There will be specialized PR team for generating business and marketing strategies, graphical and digital design, and internal participant grouping. Some PR services will be

• Auditing product
• Analysing image
• Managing risks and goodwill
• Internal and media integration
• Publishing editorial features and writing articles
• Training of media
• Managing web site and e- business
• Public lecture and oral orientation
• Managing events
• Developing brand identification programs
• Promotional and Organisational literature about the scheme
• Use of search engines for increasing web site visibility and traffic

Product life cycle

The product life cycle (PLC) is a concept that has used to know about the life stage of a product to define the most fruitful marketing, pricing, and promotion strategies. The PLC has usually demonstrated through a bell shaped curve. Kotler & Keller (2006, p. 322) stated that the concept is used to analyse product category, (product and/or brand) but every product does not exhibit bell shaped curve. Kotler (2000, p. 171) argued four different assumptions of PLC, such as

• limited life span of products;
• each stage of PLC creates different set of opportunities, challenge and problems to the seller when a product passes through the stages;
• Variability (i.e., slump and rise) of profitability also takes place in different stage of PLC; and
• Each stage of PLC requires different set of manufacturing, human resource, purchasing, marketing, and financial strategies. The hypothetical PLC curve looks like the following:

The PLC has four different stages with different kinds of profitability and marketing strategies requirement as the following (Kotler 2000, p. 171- 175):

Introduction

the stage is characterized with no or the least profitability due to large product introductory expenditure and slow growth of sales in the market. The firm requires large expenditure to attract distributors at this stage. Again, the promotional expenditure is high here due to the fund requirements, such as building consumers product knowledge, inducement of product trial, and employee distribution. Here firms pursue the readiest buyers (i.e., high-income group in the target market) for immediate consumption. The firms usually charge a high price at this stage to meet large production and promotional expenditures. There are various researchers argued that first-mover of an industry usually gets the most success in any industry such as Coca-Cola, Microsoft etc. For this reason, it is important to take Organisational decision when to enter into a market with a new product introduction.

Growth

the stage has blessed with rapid market acceptance and significant rise in profitability. The early adopters already have adopted product and other consumers adopt the product at this stage. Due to the substantial growth opportunity, competitors come into the play with similar products. However, price may slightly fall in this stage but sales growth defeats the promotional expenditures. The recommended strategies in this strategy include sustain and improve product quality and feature, new flanker products development, invading into new market, exploit new distribution channels to enhance distribution coverage, shifting to product preference advertising, price reduction to exploit price-sensitive consumers etc.

Maturity

at this stage, product actually faces stagnant market growth since all potential buyers have already adopted the product and due to increased competitive pressure in the marketplace, profitability becomes stagnant and/or slowed down. Therefore, the recommended strategies in this stage include market modification (i.e., increasing users of the product through converting non-users, new segments invasion, and converting competitors’ consumers), product modification (i.e., improvement of products, quality, and style), and marketing-mix modification.

Decline: at this stage, product shows complete slowed down in sales growth and the profitability becomes eroded. The recommended strategies in this stage include increasing investment, strengthening the competitive position, selective investments, harvesting the cash cows for quick cash inflows, and divesting the dogs advantageously.

The Social Security Scheme will certainly pass through similar type of PLC. At the beginning, it will require large promotional expenditure volume to gain consumers’ awareness.

Boston Consulting Group (BCG) Matrix

The BCG matrix works as a strategic tool in multi-divisional firms to manage the business portfolio of those firms. It has devised on relative market share and market growth rate regarding the business portfolio of a firm (Weihrich 2008, p. 1).

Question marks: the question marks are rapidly growing products in the highly competitive market. They usually consume more cash to grow up but generate less cash. When a new product comes into the play in a high growth market, if there is an existing market leader then the new product would consider as a question mark. A question mark has the potency to gain market share and to become star and eventually to become a cash cow when the market growth slumps down to earn more cash. If the product cannot become a market leader, it will become a dog when market growth slumps down. Here, the recommended strategy is to analyse whether a product has the potency to grow at the cost of intense investment (ACCA, p. 1 & Weihrich (2008, p. 4).

Stars: the stars are market leaders in the high growth industries. These still require investment to maintain growth and to strengthen market leadership. However, stars are marginally profitable but when growth rate of the market slumps down and the product go to mature stage of PLC, the return becomes attractive. Moreover, the cash consumption and generation in this state almost net out. They usually allow the firm for long-term growth and profitability. Since the stars pay out the firm its investment in the long run, the firm should increase its investment in stars (ACCA, p. 1 & Weihrich (2008, p. 4).

Cash cows: the cash cows are market leaders in the matured market (i.e., where market growth rate slumps down). Since the market matures, there is the least investment requirement in cash cows. They usually outperform to increase cash inflows through very high return on assets. The firms usually grab cash inflows from cash cows to invest in question marks and stars. The situation is also a result of economies of scale. The milking is the appropriate strategy in this position (ACCA, p. 1 & Weihrich (2008, p. 5).

Dogs: the products those fail to move from question marks to stars and to cash cows eventually become dogs (with low market share in low market growth). The position neither produces cash for the firm nor consumes cash of the firm. It has convicted in the sense that non-producing investment cannot do anything for firms rather just tie up investment. Thus, the dogs must be divested (ACCA, p. 1 & Weihrich (2008, p. 5).

The Social Security Scheme is the question mark for the Government. The investment activity should go through recurrent analysis.

Ansoff’s Matrix

The Anosoff’s matrix is a tool to analyse the opportunities a firm has if it wants to grow and progress its profitability and revenue- providing that there is a list of marketing options to achieve final goal (NGFL 2009, p. 1).

Market Penetration: the firms using the strategy try to increase sales volume in the existing market by inducing consumers. To apply the strategy, the firm has to be aware about the success factors of the existing product and success factor of the existing market. Here, the exploitation of existing relationship with consumers is the best way to achieve the ultimate goal. There are several related strategies such as exploiting irregular users to transfer them as regular users (i.e., the best way in the high growth market), attacking competitors’ consumers to turn them into Organisation’s consumers (i.e., the best way in the highly competitive market), and increasing sales to existing consumers (i.e., the best way for consumer durables) (NGFL 2009, p. 1-2).

Market Development: firms use the strategy to place its existing products in new market places or market segments. The recommended related strategies under this strategy are the exploitation of new markets with similar kind of needs as are in existing market (i.e., either geographic expansion or market niche targeting) and the exploration of consumers who do use the product in a different way (NGFL 2009, p. 2).

Product Development: here firms usually place new products in the existing market place (i.e., developing new products through innovation). The ultimate goal is to amplify profitability and expansion in the present market place by product innovation. The firms should build up similar type of products so that the new product has connotation with the existing consumers’ product perceptions. The same strategy is also applicable in the industrial goods too- the B2B marketing (NGFL 2009, p. 2-3).

Diversification: firms usually run after this strategy when there are exploitable market opportunities and the firms have enough investment funds to exploit these opportunities. The strategy is the most risky one and if is not well executed, the firms will loose its market share and substantial product development and promotional expenditures (NGFL 2009, p. 3).

The Social Security Scheme is the product development for the Government in the present personal finance of UK. Since the product is very new product in this context, the Government requires extensive product awareness creating promotional activities throughout the country.

SWOT Analysis

SWOT is an acronym used to represent Organisation’s internal strength and weaknesses and the environmental opportunities and threats those a firm may face in its operations.

Strengths

• Government Financed: – The financial product is government financed one that is the government is undertaking risk exposures. Naturally Government backed financial products have thought as risk free. Thus, the product had the extreme strength among relevant products.
• Strong financial position: the Government would fund a handsome amount for the purpose, thus it will be the strongest in the marketplace. For example, for a similar product the Government’s actuary estimated a cost of £74.9 billion for 2009-2010 (Llanwarne 2009, p. 3).
• Encompassing varied services: the financial product encompasses varied services for the intended consumers such as pension benefits, insurance facilities (i.e., life insurance, disability insurance) etc.
• Perceived quality and adaptability: since people are enjoying similar products financed by the Government, they will perceive it as of a better quality because of its innovation. Again, low risk exposure will let the product gain prompt adaptation in the market place.
• Well-equipped personnel and structural resources: there are several departments of Government working for the product such as Actuary Department, Social Security Department etc. These departments are working for the Government with extensive resource base. Since they are also dealing with existing products, they have the standalone experience of doing the business.
• Vast geography and consumer coverage: most people are risk-averse, so when they will get less risky Government backed financial product, they will eagerly adopt it. Again, the target market includes vast geographic concentration.
• Abilities to revolve resources into competitive advantages: the Government as the largest employer has the ability to revolve resources into competitive advantages by selecting required resources from vast resource base and has large investment in developing resources for its purpose.

Weaknesses

• Lack of differentiation: the Government already has similar kind of products, and benefits of those are quite similar with the new products. Therefore, it might be a problem to differentiate the product from the existing products. If consumers do not get any difference between these products, the new product will certainly fail.
• Large cash drain: the new product innovation, its promotion and distribution usually require a large cash drain. In this recessionary period, it will be a concern for the Government.
• Bureaucracy: since there are different Government departments working for the product, there is an inherent problem of bureaucracy.

Opportunities

• Brand positioning, awareness and image: the Government can easily position the product as brand and grab consumers’ awareness to build a unique brand image because of its less risk exposure, large investment fund, and well equipped information technology.
• Online presence: since the major players in the industry are enjoying competitive advantage of being online. The product can easily dominate the online presence to beat the competitive advantage of others.
• Rapid customer acceptance: the financial market of the country shows failures of current players thus the low risky financial product would be highly accepted by the consumers.
• High publicity facility: as a Government backed product, the product will get tremendous publicity at the initiation of the product because both printing and broadcasting media will grab the news as one of the prime news to address.
• Trumpet growth in building savings to lessen recessionary effects: Since the existing products are doing lavishly to lessen, recessionary effects in the country, the product will find new savings from the market to mitigate recessionary effects. Because of Government funding effect, more and more savings will be available.

Threats

• Substitute attack: there are many similar service providers such as Social Security Benefits and Social Security (Contributions) of the Government, numerous insurance companies, and retail banks. In future, the substitution threat would increase further due to the possible imitation of the new product.
• Structural change may increase risk: due to the recessionary effects, there are several structural changes have taken place in the country such as several amendments of financial policies. In addition, there are structural changes in the financial Organisations (i.e., acquisitions and mergers). All of these may threaten the product.
• Time-consuming brand awareness: the rand awareness creation is always a time consuming task. Moreover, the substitution threat would further increase the time requirement of building the brand.

Therefore, from the analysis it is clear that the product has numerous opportunities because of its substantial internal strength along with less weaknesses and threats. Therefore, the product initiation should follow the aggressive strategy- not letting others to gain competitive advantage.

PESTEL Analysis

PESTEL is an acronym that stands for Political, Economical, Social, Technological, Ecological, and Legal forces those has the potency to affect a firm’s operations. Morrison (2009) argued that the PESTEL analysis would use to discuss the macro-environment of an Organisation- the outsiders’ impact on an Organisation. The analysis for the Social Security Scheme is as the following:

Political Forces: the trading policies in the personal finance industry are highly dominated by the Government and are under direct observation to exclude recessionary effects from the industry. Llanwarne, T. (2009) The Government has been analysing the Social Security Benefits Up-rating Order 2009 and Social Security (Contributions) (Re-rating) Order 2009 draft to increase the benefits and payments. The existing market players have been applying their pressures on the Government to escape from the recession. Moreover, the Government has already announced several bailment plans as grants to save different economic sectors. The present immigration law is also a product of political and economic pressures.

Economical Forces: In the economic downturn, the UK also faces tremendous increase in the CPI index, which exerts upward shift in the inflation rate. In August 2009, the CPI inflation rate was 1.6%, which is.6% higher in the European Union regime (National Statistics Online, 2009).

Moreover, most of the UK families have seen slump in their disposable income by a larger extent- almost £150 a year (Gilmore, G., 2009). On the other hand, Equifax customer surveys (2009) found that almost 55% consumers saw a reduction of 20% in their disposable income. Thus, savings attitude of consumers has also changed due to the recessionary affect. However, to survive from the crisis, consumers certainly seek financial products that would give dependability.

The potion of total population engaged in employment decreased by 1.8% in 2009 and the unemployment rate increased by 2.1% in the same period. The total labour size in 2009 is 28.95 million which has decreased by 467,000 from the last year.

The Gross domestic product of the country amounted £315.5 (chained volume measure), Public Sector net debt was 59% of GDP, Public Sector net borrowing was £14.8 billion, the Trade balance was £-2.3 billion, Balance of Payments current account -£11.4 billion, Services index was 104.6 (which is 3.7 point less than that of the last year) in September, 2009. All these indicators are showing shrinkage in the economic system (National Statistics Online, 2009). Though the country’s economy has been experiencing the devastating recessionary effects for nearly two years but in the last quarter of 2009, financial service firms start enjoying new growth (WorkCricle, 2009).

Social Forces: the Government backed pensions plan and other personal financial products encompass intended groups of people by default such as the employed people. The Government backed financial services and assets have always regarded as the supreme options due to the inherent certainty of these services and assets. To maintain previous standards of living, the people of UK are seeking for personal financial products such as savings and insurance. The loose immigration policies ever gear up the trumpet growth of financial needs. Again due to the least earning capacity and facility and for such kind of risk, the needs for Government backed financial products increase in UK.

Technological Forces: the UK personal finance industry has well blessed with technology. Some acting players have technology as their competitive advantage (i.e., TESCO Personal Finance). The intellectual property act has also very strictly followed in the country thus, technologically benefited Organisation have extra privilege in the market place. Moreover, the consumers of the industry are also adapted and they prefer to use technological advancement. Again, the enthusiasm of financial product consumers in using technology paves the way for financial services providers to grab large promotional advantages in a very short span of time. Thus, the information technology let product development in the market place with ease.

Environmental Forces: the financial products are almost free from environmental concerns because these products do not harm the environment. However, the environment beneficiary Organisations can enjoy promotional advantage to act as to save the environment. For example, giving fund to environment concerned groups or environment beneficial programs usually provide Organisations with benefits of publicity and public relations. Again, promotion of environmental concerns though booklets of financial products can easily grab attention of concerned citizens.

Legal Forces: the personal finance sector of UK is highly controlled by the government regulations and new entrance to the industry is almost constrained. There are several acts governing the personal finance industry including National Insurance Act 1913, Employers’ Liability (Compulsory Insurance) Act 1969, and The Banking Act 2009. On the other hand, the Social Security Schemes are usually governed by Social Security Administration Act 1992 (SSA92), Social Security (Contributions) (Amendment) Regulations 2009, Social Security Pensions (Low Earnings Threshold) Order 2009, Pensions Act 2004 etc. Again, the industry also needs to follow regulation enforced by the European Union. Furthermore, different laws such as labour laws, exchange laws, and orders also dominate the Social Security Schemes. Since most of the personal finance provider already have their online presence (doing business online), the industry has been subject to more political bindings. Furthermore, the Government can act as either supplier or consumer of any product or industry. In this case, the Government is the provider (the supplier).

Therefore, from the above stated scenario, the Social Security Scheme would face little environmental bad effect in its operation.

Pricing theory

Bized (2006, p. 4) stated that the pricing of any firm relies on the market structure in which it does its business. It further argued that the pricing represents competitive strategy- not only for winning rivals’ consumers but also for sustaining own consumers. The economists think consumers as “price taker”- have no control over price. However, the marketers think consumers as price “price active”- actively judging prices through collecting price related information from different formal and informal media (Kotler & Keller 2006, p. 434). Kotler & Keller (2006, p. 434) stated that the consumers usually purchase product based on their perceptions about price not on the marketers stated price. Again, there are clear distinctions between services pricing and products pricing. Zeithaml & Bitner (2006, p. 513) named three major reasons of consumers’ different perceptions about prices of services such as:

• Consumers’ no or least information about reference prices of services: consumers seek to judge prices against reference prices from memory and/or external information regarding prices. However, due to the limited knowledge resulted from service variability, there is limited opportunities to grab price information of services (because there are different underlying costs in service Organisation), and invisibility of prices (Zeithaml & Bitner 2006, p. 514-516). Specifically, the consumers of financial services know very little about prices of services because they have only known about the rate of return and they are ignorant of their payment in the form of fund and insurance fees (Zenithal & Bitner 2006, p. 516).
• Prices are indicators of services quality: when consumers get little knowledge about the service providers, they use prices as the valuator of service quality. Thus, the firm’s reputation ties up with prices of its services.
• Consumers expend not only the monetary prices: services consumers need to incur not only the monetary costs but also non-monetary costs such as time costs, convenience costs etc.
• There are several types of pricing strategies available to price products and services as the following:
• Competitive pricing strategy: Zeithaml & Bitner (2006, p. 521-523) stated that the competition based pricing strategy does not mean pricing as competitors’ prices rather using competitors’ prices as an anchor to set prices. The pricing strategy is applicable only either in undifferentiated product industry or in the oligopolistic market. The possible challenges in this strategy are possibility of charging too low by small firms, non-comparable services, and inability of prices to reflect consumers’ value.
• Cost-based pricing: in this approach, Organisations first accumulate all relevant costs incurred to provide its offerings and then add up a profit margin to the accumulated costs to set prices. Kotler & Keller 2006, p. 434-460) mentioned that the challenges inherent in this strategy are tracing all costs is difficult, pricing labour is quite impossible, and the accumulation of costs may not connote with consumers price perceptions.
• Demand-based pricing: the pricing strategy sets prices based on the consumers’ perceptions of value (the consideration of lack of reference prices, non-monetary costs etc.). The challenges in this pricing strategy are adjustment of monetary prices with non-monetary costs and non-attentiveness of consumers to prices (Southeast University 2009).
• Brand-pricing strategies (market skimming): the pricing strategy would use when a firm already have the brand equity in the marketplace. The pricing has usually used in the premium product category, which has targeted to a consumer segment that is willing to pay premium prices for example, Mercedes-Benz. The pricing strategy has recommended at the introduction level of PLC.
• Penetration pricing: the strategy has used to set lower prices to grab immediate market share. It helps when the innovation is not that mush credible to grab market share before the innovation has copied.

Usually the financial service/product providers use cost-based pricing for their offerings. The rationale behind the story is the recovery of costs incurred to provide services along with a reasonable profit. Since the Social Security Scheme is new in the marketplace, it should adopt the usual strategy because the inherent objective of the innovation is to drive up the present recessionary effects from UK economy. It will give the Government handsome costs coverage and a fulfilment of basic objective of the innovation.

Market entry strategies

Anon (2009, p. 3-4) argued that the market entry strategy is a well-furnished way of distributing products and services to a target market segment. There are several market entry strategies available such as:

• Blitzkrieg Entry (Aggressive – Broad front): the strategy implies into a widely dispersed geography to invade every market segments. This strategy requires intense market penetration (i.e., the exploitation of existing relationship with consumers), thus it is only applicable when the market growth is substantial to let market penetration do work successfully.
• Cavalry Charge (Aggressive – Focused): the strategy also charges the application of every resource of an Organisation but in a special market segment (i.e., the niche market) in a specific geography. The strategy also requires a high growth market segment so that the firm has ways to avoid out charged by competitors.
• Strike Force (Non-aggressive – Focused): the strategy is useful when the target market of an Organisation has ambiguously defined and the market is very competitive due to existing competitive forces.
• Guerrilla tactics (Non-aggressive – Broad front): the strategy applies fewer resources to target a high growth competitive market. It has also used to focus on less competitive market.

There are several decision factors in judging what market entry strategy to use in what market segment such as:

The new product should go through guerrilla tactic to enter the UK personal finance. Because the strategy requires fewer resources but it suits in the competitive market. Moreover, it does well in situations such as restricted Organisational resources, diversity, every stage of market life cycle, strong proprietary protection.

Decision making phases

After analysing the new social security scheme’s various development and marketing aspects, it is the time to make final decision regarding each nook and corner of such aspects. Here, the decision phases have been divided into 3 parts in relation with marketing strategy, product itself and projected activity period that can be elaborated as-

Strategy related decisions: – The major effort in developing the product’s marketing strategy will engage in deciding upon segmenting, targeting, and positioning strategy, which generally incorporates the following stages-

• Market segmentation: It means segregating market into smaller units of customers in terms of their identified needs, nature, or behavior who would demand distinguished goods or marketing mixes. There are various ways of segmenting the intended customers, like- geographic, demographic, psychographic, and behavioral segmentation among those the first two will be selected to segment the security scheme market. Geography will involve selection of UK as a major dividing variable and demography will consider the use of age, gender, income, occupation, family size etc. variables.
• Market targeting: It can define as the technique of assessing attractiveness of individual segment and thus deciding one or more for entrance. Here, a target market will select in terms of considering a unit of buyers possessing common nature as individual people and small or mid- level firms affected by economic crisis. Among four types of alternative strategies, it has decided to go forward with differentiated marketing by which we will target various subsets of two major segments and thus design separate security offerings for each segment, such as- micro credit, income, retirement, insurance benefit etc. By adopting such decision, it has expected to gain higher market share and strong position within per segment although here, the development costs will be somewhat higher than general structure.
• Market positioning: By using positioning strategy, the scheme will be able to define by the target audiences on important criteria or the place that the product obtains in customer’s mind in relation with other financial products. Therefore, it will involve inserting the scheme’s unique advantages and differentiation in people’s mind.

  • Positioning map- The perceived brand positioning map of the scheme in terms of other competitive financial items can be shown as below

• • Choosing a positioning strategy- It will accomplish with sub- decisions as identification of possible competitive advantage, choosing of right competitive advantage and selecting an overall positioning strategy. In this planning, the 1^st option will focus on developing a competitive or differential advantage of the scheme through which it would be able to generate more value than other similar products in terms of lower price and grater benefits. That uniqueness will create here in terms of product, service, and channel factors. The 2^nd option will emphasise upon deciding on number of differences for promotion by an indication of importance, distinctiveness, superior, communicative, and affordable variables. In addition, the last option will target on generating complete mixes of value of the brand, which can call as value proposition. Among the various options of the following grid, “more for less” option will be chosen since the scheme will aim to generate more value than competitive ones in association with performing more public satisfaction with less monetary effort, such as

After deciding upon all those steps, development of a positioning statement will be necessary for reflecting the product’s positioning strategy. Such statement can shape as “Caring you for gearing needs”.

Therefore, zest points as can note the entire game plan

• Target market: Individuals and small and medium size enterprises who have been tremendously affected by the pressure of inflation, shortage of capital, unemployment problem as well as who are fallen under the courses of public security scheme.
• Positioning: “Caring you for gearing needs”;
• Product line: Addition of a modified social security scheme;
• Price: Price is somewhat lower and flexible than the existing schemes.
• Distribution outlets: Registered and selected financial agencies and product web site distribution.
• Service: Customized, flexible and need oriented service.
• Advertising: Development of new advertising campaign that supports positive positioning strategy, emphasise higher- sales units in ads with an adequate expenditure for a better exposition in various media, such as, radio, television, newspaper, magazine, billboard, and internet by incurring 15% of initializing capital for this purpose.
• Public relation: Developing brand awareness by estimating 10% of projected capital;
• Direct marketing: For such effort, 3% amount will incur.
• Research and development: Formulation of specialized Research and Development team by estimating 10% cost of total budget.
• Marketing research: Estimation of 10% amount of total fixed budget for initial operating successful marketing research for gaining an improved knowledge of customer- decision-making process and measuring actual needs by monitoring the overall operation.

Product related decisions: – As early mentioned, the new social security scheme is not completely new idea but it is new in that sense as it has modified in formulation technique, objective orientation, provision implementation, need recognition, functionality, and thus overall differentiation. Therefore, the basic decisions, which must adjust with the final scheme along with all the suggested criteria, have discussed as following

• Development of trust fund: Department of security and treasury would be in the management of this fund while the investment would come from marketable and non- marketable securities.
• Family protection scheme: Comparatively less complicated administrative formalities than the present ones, which will also accelerate women protection scheme in terms of reserve size and the case of retirement.
• Retirement, survivors, and auxiliary and disability programs: According to the employee’s career, the management will keep record of his/ her income because afterward the benefits will give in terms of that percentage of income as well as opportunity of taking micro credit from that fund.
• General retirement age: An employee who is late in taking such benefits may earn delayed retirement credits, which will raise their facilities up to 70 years. This credit benefit is also applicable for widows but excluding children.
• Spouse’s and widow’s benefits: There will be minimum 10 years marriage certificate for getting spouse benefit which will have no incremental option for successive years. Widows will get the security at minimum 60 years with a credit facility.
• Children’s benefit: It will be a general condition of formal security system regarded as “dependent” or “survivor” benefit. SSI or Supplemented Security Income is another version considering specific earning and threshold of worth.
• Social security trust fund: Although the trust fund has generally recognised for maintaining accounting policy, actually have no economic importance rather than general purpose of standard payments and interest.
• Development of OHA: This department will establish as “The Office of Hearings and Appeals” for maintenance of better quality final administration of this new security plan.
• Benefits payout comparison: Primary Insurance Amount or PIA formula will use to evaluate the degree of benefit. It would be highly progressive which will remove the historical problem of unfair treatment through an optional plan.
• Social Security Number: A new culture of giving SSN will introduce for the identification motive of beneficiaries. It will incorporate government agencies, like- UK Revenue Service along with private companies, like- banks, insurances, and employers.
• Online profitability assumption: The e- commerce orientation would be able to ensure online credit benefits through qualifying the interested applicants.
• Taxation and projective operations: The project revenue will derive from two basic ways of taxation and credit. For taxation, the major tax players will be self- employed people while for employment, both parties will held liable for 50% of total security tax but the self- employed individual will pay the entire tax.
• Intended benefits level: The new plan will consider the formal advantages thoughts in mind in terms of giving insurance benefits for contributors, means- tested benefits for low earning groups, non- contributory for disabled, universal for family and pension welfare and finally, discretionary broadly for pure welfare purpose.
• Concentration on income support: One of the major attributes of this social security is that it will highly cover the area of income support while in scaling, the special factor of unemployment will consider in association with problems regarding per week payment and housing. The visionary foundation of crisis from depression will act as the major catalyst for such decision.
• Issuance of micro credit and special support for SMEs: The differentiation strategy of this scheme will be highly emphasised upon a reformed concept of providing micro credit to individuals as well as small and medium companies who are the worse sufferers of recession (Telegraph Media Group Ltd 2009). The micro credit scheme will provide upon contribution level as well as specific legislations of law. Also by analysing depth of situational damage, such credit will provide to both parties. Additional requirements will also involve age, sex and class specification while the range for men will be 15- 70 and women from 15- 65. For selecting SMEs, minimum corporate life would be 3 years. Following these basic conditions, all benefits and assistance will be given by the government.
• Web site affiliation: In this modern era of e- commerce, our proposed security scheme will not be lagging behind for the adoption of new technology (Laudon & Traver 2002). Therefore, the online strategy will induce planning for designing a web site, development of essential infrastructure for that, specification of online contents like- about the social security scheme, information content involving nature of the scheme, basic advantage, rules and regulation, purpose, definition of classes, listed offerings, beneficiary specification and application criteria and finally, a log on option through which interested people can make a conduct directly with the management team or the appointed financial agencies.

Action related decisions: – Finally, the time will show the paves taking time oriented functionality decision as the plan has proposed to implement within one year with an expectation of complete accomplishment at the end of December 2010. However, before that, marketing research programs will be accomplished which would predict to complete within December 31, 2009. Therefore, the complete schedule of carrying out overall product development and marketing strategy will be-

• January: From the beginning of this month, a management committee will develop for distribution of each associated task. Within 31^st instant of the same month, Security Trust Fund will develop by starting its sole responsibility.
• February: Individual product web site will develop by accumulation of funds necessary for it, which will initially draw from existing government financing. At the middle of this month, web page designing, program management, information, log on and others info development will accomplish.
• March: Advertisement through newspapers will introduced first. Three national newspapers will chosen for this while from 15^th instant, TV, radio and billboard advertisement will be exposed hugely for the next three months.
• May: From 1^st instant of this month, online advertisement will primarily shown through affiliated sites while from the ending, own site will be completely run with adequate information and exchange offerings.
• July: 3 seminars and 2 cultural programs will project within 1^st 15 days. Similarly, at the last part of the month, 2 other public relation and awareness programs will take place.
• September: The management will start its 1^st exchange activity with an introduction of direct marketing of the product on test basis to the 100 selected customers of London.
• December: Annual feedback will take from the beneficiaries and others to estimate the effectiveness of such scheme, which will considered as an extended program of research.

Evidence of viability

The validity of this study is concerned with assessment of logical relationship with two types of research techniques. It can be analysed by a verification if inner and outer viability.

• Inner viability: – Inner viability will make a judgment whether the structure could evaluate for which it has conducted to perform. In qualitative research, the interviewee’s understanding regarding the questions would adjust with the interviewer’s understanding of the reply would create a problem. Clearly speaking, the respondents would agree to discuss on certain part of the topic, which would generate a partial view of “actual” reality. Here, one of the optimistic ways to handle this phenomenon will be arranging multiple interviews and utilization of secondary sources for covering maximum “reality” in accordance with affordability. This strategy will also kept up with a confidence that the methodology of draft version of interviews prior to original session would maintain satisfactory level of resemblance. However, a complete checking of secondary sources would not be possible because of some confidential and bureaucratic complicacy. Over the actual interview session, other difficulty of misinterpretation will tried to be lessening without affecting the reply. Employed authors will translate each interview independently so that the outcomes will be correct enough for making interpretation.
• Outer viability: – Outer viability evaluates the degree of possibility for generalizing the outcomes. Therefore, it is essential to keep a belief of generalizing the results in accordance with Yen’s generalization theory. According to him, analytical generalization could defined as the condition, which comes from a study for developing theories, incorporating structures by for implementing present theories of marketing for referencing besides that can be contrasted for findings. The given theoretical and analytical discussion will also be supportive for greater degree of generalization rather then dependence upon explicit research. Similarly, developing the intended questionnaire in terms of both open ended and closed ended format will give an opportunity to the interviewer for accessing more depth thinking of respondents as well as thoroughly turning them to the most specific financial, social or some political issues, which have related for utilization of social security. These entire efforts can also expected as being especial tool for helping the researcher to draw a specific conclusion of research findings as an extra measurement of generating validity and transparency.

Additionally, research related reliability would also ensure through a conduction of formal survey with individuals and small corporations. However, the use of semi- standardised interviewing pattern would lessen such reliability.

Justification of target audience

From previous sections, we have already come to know that the intended target audience has selected in terms of two mega segments. One is for personalized service and other is for group welfare. However, the base of such segmentation is reasoning for some issues among which the most important is need. Because of this basic variable, the entire plan has developed by selecting such group of population. Apparently, showing, the world is suffering with huge economic shock because of recession and UK is not excluding from that list. In this situation, the government needs to introduce a financial item in market, which would be effective in sense of actual public welfare. Running with these theme, we have chosen only those people and relatively small industries who are in need of greater sort of government monetary affiliation because it is much difficult for them to take some other forms of financial opportunities. For example, investment in stock market, borrowing a greater amount of credit from national or international banks or insured themselves by opening a larger amount of policy from any giant insurance companies like other bigger corporate bodies although these two groups constitute one of the major portions of recessionary victim. So, the target audience has chosen from the population who are the potential customers for the new scheme. Several secondary data have used to identify in terms of family income, rate of unemployment, retirement period etc. are the fundamental variables upon which a primary survey has conducted to locate the regions where most of the affected individuals can traced. Similarly, from trade journals and current reports, the name of two SMEs has sorted out to make the actual research.

Recommendation

Although the modified scheme has proposed to serve in market by conducting the best improvements, there are also some other factors which need to accomplished for creating a far better exposure. Some are-

• The late retirement benefit would motivate older people not to leave their jobs that would block better employment opportunity for the younger. Therefore, there should be a reasonable age limit for getting that advantage.
• Strong implementation of women and minorities benefits should emphasised since for increasing their financial and social participation.
• In formulation of Trust Fund and central management committee, the over influence of politicians should be avoided in exemption of tax related confusion that generally lies in public mind in order to generate reliability and trust.
• The practice of charging extra burden of tax for fund accumulation should avoided for developing better public acceptance.
• Try to increase higher return rate.
• The fund, which will accomplish through taxation from benefit holders, should invested in other profitable projects as another source of income, which can be distributed as a reward among the participants.
• Although the project will be highly regulated by present legal legislations and specific rules, to maintain further security for avoiding deception and illegal favorability, a supervision board should established.
• Several steps should take to form valid SSN along with relevant distinctive information.
• In association with internal security staff, CDI or Continuing Disability Investigation and other law enforcement bureaus should outsourced for increasing trustworthiness.
• Removal of complications in formal administration of security insurance;
• The child benefit scheme should well targeted by introducing both vertical and horizontal benefits.
• In methodological review, along with semi- structured model, structured technique needs to be involved for increasing reliability of the study, counteracting the previously sent survey paper and also keeping a standard emphasise for a group of questions to be used as a structure of that session.
• Increased diversification should put on tracking and interviewing respondents by covering more geographic area. There should be adequate internal and external support to conduct marketing research per year for continuously tracking audience, feedback, and level and usefulness from the scheme.
• The public awareness program should modified in advance stage through not only informing people about the usefulness of the scheme but also informing them about the ways by which they can easily apply and get advantage for a long period. However, before all types of awareness programs, a clear demonstration for removing numerous criticism and prejudice regarding social security should conducted.
• For justifying target audience, computer assisted monitoring technique should be used for search efficiency and effectiveness.
• Lastly, the overall marketing process should operated in terms of socially responsible way, which means, keeping a concern in mind that no one would be in difficulty for any aspect of product development and commercialization of the product by sustaining in its basic track of national welfare.

Conclusion

Finally, it can confidently said that a careful framework, observation, analysis, precaution, development, verification, and application of the discussed plan would have a higher level of optimism in operational success for achieving its ultimate objective since it represents an integrated tactic of presenting an old concept within new package along with a core theme of diversification in public exposure. It is very much common for some instances where a successful idea would not become equivalently successful because of lack of comprehensive exposition. Being alert from that taught, as a progressive marketer, it is wise to have a broader vision while representing a normal item. In this regard, the presented solution of developing a financial item for handling a major national crisis with government affiliation had highly being motivated to search for an option, which would be able to meet both public necessity as well as developing the paves. So that, this project could contribute to generate some revenue from the extra ordinary effort for ensuring extended security to the users. For that, a number of terms and conditions have arranged among which the most important are public awareness, multi- communication, branding, research execution, e- business orientation, and the like. With a suggestion of starting the project within one year, it will face some integral and operational barriers, which would be mostly legal, political, social, ethical, and financial in nature. However, proper willingness, power, and integration are core three factors, which would act as strong catalyst for lessening several barriers and making the plan evidentially fruitful.

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