PostFinance, a trusted Swiss banking partner and a unit of the Swiss Post, developed and piloted a mobile payment solution in Switzerland, in collaboration with Unisys. The next step is to decide whether to go live with the mobile payments. This would include giving a detailed proposal to the Board. This must include a strategic plan for PostFinance’s innovative solution.
To start, this paper will study the environment of PostFinance’s mobile payment solution by carrying out a situational analysis. This would mainly include all the internal and external factors that may help or hinder the development of this product. Further on in the paper, a strategic marketing plan will be conducted based on the strengths, weaknesses, opportunities, and threats
Situation Analysis
Situational analysis for PostFinance’s new mobile payment solution will help determine the internal strengths and limitations it possesses and the external prospects and threats in the market. These will be studies one by one, in a detailed manner.
Reputation and Good Will
PostFinance, as a service provider, has many strengths. One of these is its goodwill and reputation. It is a trusted banking partner in Switzerland and is known for always providing innovative solutions to its customers. Both these are very likely to work well together; there is nothing more attractive than a new product that the customers trust. So, if PostFinance develops something new, at least its existing customers would not hesitate to try it.
Distribution Channels
PostFinance has always provided its customers quick and easy access to services through its selected distribution channels. This makes these distribution channels a strength of the company. It has channels that it can rely on to provide a quick and easy way for its customers, and this works well for it.
History of Successful Collaborations
Another internal strength of PostFinance is its history of successfully collaborating with Unisys, a world-renowned and leading IT solution provider. Past solutions between the two companies have always worked. This strength will work for PostFinance because both parties have mutual understanding – and this is a great quality when working on new projects. Unisys understands the requirements of PostFinance clearly and PostFinance, on the other hand, clearly understands and trusts the solutions.
Technology
An internal weakness was PostFinance’s failure to provide this solution on an existing system. A separate terminal had to be installed by the retailers for this to work. Some of the retailers were doubtful about this. Therefore, the only thing PostFinance is expected to work on is its technology in making the solution even more usable.
On the other hand, the technology did fulfill the scalability, user-friendliness, and quick transactional requirements of a mobile payment system. Many private customers along with merchants were surprised at how simple and quick the system was.
Customers
One of the biggest external opportunities that PostFinance has is eager customers. This owes to its reputation as a trusted and innovative solution provider. Customers were enthusiastic about the new solution when it was piloted. They wanted to try it out. Apart from these private customers, merchants were also looking forward to deploying the system at their stores. For example, neighboring shops where it was piloted wished to make use of it.
Competition
Threats involve competition. This could be competition from competing banks, and also from other payment systems, mobile or not. Direct competition would include all the other mobile payment solution providers in Switzerland such as Sunrise, which is developing a mobile payment system (Mobile Payment Update, 2006). The direct competition also includes all the other competing banks, national or international, that customers may want to make payments with.
The indirect competition includes all other payments systems, cash, and cashless payments. These include debit cards, credit cards, innovative payment systems such as pay pal, and any other system which is used for making payments for general purchases. All these competitors play in the same targeted segments of the market; private customers and merchants mainly. A bank is generally involved also if the nature of the transaction is cashless.
External Factors
Switzerland is a relatively less complicated country to operate in, in terms of the Government, Judicial system, and transnational issues (CIA, 2009). However, even though many people carry cell phones in Switzerland, it only ranks 60 in the world with a total of 8,096,000 cell phones in 2007 (CIA, 2009). Therefore, there could be more potential for such a system in other markets with higher ranks and hence, a higher number of cell phone users.
Strategic Marketing Plan
Based on the factors discussed above, a strategic plan for PostFinance’s mobile payment solution has to be developed. It will take into account all its strengths, weaknesses, opportunities, and threats, and the general marketplace overview into account.
Market Segmentation
The major market segments for PostFinance are private customers, associations, companies, and public entities. Private customers are those who would make the transactions, companies are those firms that would sell their goods online through PostFinance’s mobile payment system. Associations are all those intermediaries that are essential for the completion of a transaction.
In my opinion, the segments of the most priority for PostFinance must be private consumers and companies. This is because if companies do not sell and consumers do not buy, this system would be useless. The needs of both these users are to have a hassle-free system that is quick, safe, and easy to use. Companies may require the additional feature of scalability also.
The differentiation that is being offered by this solution to these customers is based on user-friendliness, safety, speed, and simplicity.
Business Strategy
Vision, Goals, and Objectives
Profit growth will mainly come from the core service that this solution will provide, which is a mobile payment solution for all purchases. Other services include couponing but will contribute less to profit growth as compared to the core service. This core service will allow PostFinance to continue its goal of being an autonomous and profitable unit of Swiss Post. Therefore, budget dollars must be focused on this core service for projected growth of 20% of the unit.
The core market that PostFinance competes in is the financial market. The adjacent market it competes in is the IT market. Therefore, the aim is to become recognized in the It market as a solution provider and in the financial market, it must maintain its market share and preferably increase it by at least 15 percent by implementing this innovative system.
Marketing Plan Elements
Product
The product that is being offered to the segments is a mobile payment solution whereby consumers can purchase goods through their cell phones. The only requirement on the part of the customer is to have a text messaging-enabled cellphone, regardless of the manufacturer or the service provider. How this system works is that the user purchases something. To pay for it, he goes to the cashier and gives him the cell phone number (which can be read through a bar code), amount of purchase, and the PIN. PostFinance checks the balance with the relevant bank and allows the transaction. If allowed, a coded SMS is sent to the user which must be waved in front of the scanner. This closes the transaction.
Price
The price charged to companies or merchants would be a small fee PostFinance may charge merchants a fee per transaction made using mobile payment technology. Third-party banks will also be required to pay a licensing fee for the system use. Another thing that PostFinance may charge its private consumers and companies for is the ability to promote mobile couponing. Companies would pay for marketing while private consumers would pay for value-added services such as discount coupons.
Consumers are likely to be price-sensitive because there are many other alternatives available that are trusted and widely used for years such as credit cards and debit cards.
Distribution
PostFinance has selected distribution channels that it uses to provide satisfaction to its customers. These include an online portal where the customers may link with the company via yellowness for electronic payments and yellow for electronic security trading. PostFinance also connects to its customers at around 3,000 post offices and the PostFinance Consulting Centres, and finally, customers may contact the company over the phone.
Promotion
As suggested by the marketing department, a great promotion would be offering customers discount coupons on purchases. This would require getting merchants involved and enticing them with the widespread promotion they can offer to customers easily.
The pilot itself is a promotion also. Having it installed in a few select places entices the customers. It generates curiosity in them and prompts them to use the service.
The message that this product must give its customers is that of simplicity. All solution providers try to provide a quick and safe system, but not all can provide a simple one because of the many complexities involved in the process and technology.
Risk Assessment
Overall Risk Assessment
There are many prospects for successful implementation of the system if PostFinance decides to go live with it. This is demonstrated in the eagerness of the customers and merchants to try it immediately. Also, couponing is another ray of light for this system. It is also a differentiation factor. Although credit and debit card payments do provide such value-added services mobile payments do not.
Major uncertainties, on the other hand, include PostFinance’s decision to involve competitor financial institutions in implementing this completely. This would allow it to charge lower prices to consumers through market penetration. If these institutions are involved, it may distort the initial innovative image that PostFinance holds, and may harm the revenue generation from this system.
If this happens, a contingency plan must be developed. A new kind of advertisement campaign will need to be carried out that would have an emotional plus logical appeal. It would act as a reminder for the customers to remind them of th innovative company that PostFinance is and how the customers have always trusted its solutions in the past. However, more will need to be spent on advertisement and may further reduce income in the short run.
The only potential risk in this plan is the technology might be too heavy for some retailers as it requires them to set this up on a separate terminal rather than an existing one. This would need investments on their part and may make them reluctant. Also, they expect more simplicity from the solution provider. If limited retailers deploy this system, only limited customers can use it also. Other potential risks include limited customers because they may not be linked to PostFinance as their financial partner but with other banks. This means that ultimately banks will have to be involved in the process so that this solution can become more widespread.
Measurements
PostFinance would need to develop a method through which it can gather feedback about the system. This would enable it to upgrade it according to the requirements of the customers and it will tell it where they stand. Therefore, continuous feedback must be established in the first phase when it is deployed in the market.
Conclusion
PostFinance has developed a system that is innovative and has many potential uses other than the core service that it provides. It can be used as a marketing tool for many companies to get to customers conveniently. To maintain its reputation as a trusted and innovative solution providers, PostFinance must develop a marketing plan that it will allow its implementation to be successful for the different market segments that it caters to. This marketing plan will be aligned with its overall business strategy and goals and objectives.
Bibliography
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HEC (2006). Sunrise is working on mobile payments in Switzerland. Mobile Payments Updated. Web.
Kotler, P. & Armstrong, G. (2009) Principles of Marketing. India. Pearson Prentice Hall.
Marketing Scoop(2009) Strategic Planning. Market Scoop. Web.