Ing_Crisis_Communication_Management

INDEX 1. Company profile pag. 4 2. Crisis pag.5 3. Context analysis pag. 6 4. SMART marketing communication objectives pag. 11 5. Marketing communication strategies and tactics pag. 12 6. Actions pag. 13 7. Control and evaluation pag. 14 Referencing pag. 15 1. Company profile ING Bank ING Bank was established in the year 1991. ING (Internationale Nederlanden Groep) is a result of the merger between the ‘Nationale –Nederlanden’ and ‘NMB Postbank Group’. ING, a company with limited international business has evolved from an average Dutch company into a multinational company with various international activities. ING is a global financial organization of Dutch origin. Nowadays, ING offers services such as banking, investment, life insurance and retirement services. In addition, ING focuses on international retail, direct and commercial bank. Nevertheless, the company wishes to create an optimal found for its independent future business in insurance operations and investment management. ING is currently active in more than fifty countries and it serves millions of private, corporate and institutional customers all over the world and manages their financial future. (Europe, North- and Latin America, Asia and Australia). In 2009 ING made the decision to separate its banking and insurance services. This enables ING to concentrate on smaller number of stronger businesses going forward. In addition, the company sees this a opportunity to stand out not only as a company but as a brand as well that is known for making finance easier. Both services of ING (banking and insurance) carry the same name and logo. ING aims to provide its customers with smart, reliable and sustainable products and services to build and protect financial futures (ING, 2010). This report will particularly outline the services, business management- and operation of ING in Belgium. 2. Crisis Weekly cash withdrawal limit for 60+ aged customers at ING Belgium On august 3rd 2010, ING Belgium announced to limit the cash withdrawal at ATM’s for 60+ aged customers in Belgium from € 2.500 per week to € 1.000 per week. ING Belgium planned to execute this new measure from 11th august 2010 on. The reason for this action is that ING intended to protect its ‘elderly’ customers against fraud and scam. Immediately after this announcement politic, media and public opinions criticized ING Belgium. ING Belgium’s action was perceived as an exaggerated form of patronizing/nurturing of the elderly. It was even interpreted as discrimination. The public expressed very negative opinions about ING’s intention and did not appreciate to limit the cash withdrawal to € 1.000 for 60+ aged customers. The media called the ING proposed measure a huge PR blunder. The same day ING Belgium announced its planned action of limiting cash withdrawal for 60+ aged customers, the company published a press release stating it will discontinue the earlier announced measure. This was due to receiving many negative responds to its action. ING published in its press release: ‘From the responses that ING Belgium has received, it shows that unclearness may exist regarding the correct interpretation of the proposed measure’ (ING Belgium, 2010). The press release also included ING’s motivation of the proposed measure. ING says the measure implied that the regular weekly set withdrawal limit would be decreased from € 2.500 to € 1.000 for the 60+ aged customers. Clients would never loose their rights of adjusting the cash withdrawal limit to their own personal needs. ING also justified its intention of executing the new measure in its press release; according to statistics, fraud and scam during cash withdrawal from an ATM machine is doubled in the past four years. Particularly 60+ aged have been victims. Nonetheless, 98% of ING’s 60+ aged clients have a weekly cash withdrawal below €1.000. ING Belgium’s announcement of the proposed measure and later publishing a press release of discontinuing the proposed measure left the public and media with a confused perception of ING and finding ING a disorganised company. Additionally, social media (bloggers) massively judged ING in a negative way. ‘How could ING consider such a measure for 60+ customers and carry through' Who came up with this idea' Why did no one from within the ING organisation, especially the communication department, not warned or convinced the management that this measure would lead to a thunder of critics'’ (De Tijd, 2010). The above-described crisis occurred in Belgium and therefore this report will mainly focus on outlining the services, business management and operation of ING in Belgium. 3. Context analysis The context analysis outlines the current position of a company and it includes five contexts: * Internal * External * Customer * Business * Stakeholder 3.1 Internal context ING brand was established in 1991, as a result of a merger between a Dutch bank and insurer. The well recognized lion logo descents from its Dutch roots. A lion is the Netherlands’ national symbol whereas the color orange is the national color (ING, 2010). Since its existence, ING has developed a strong worldwide brand awareness and reputation. Additionally, ING has a strong corporate identity and a clear message that it sends out to its target audience: ‘ING aims to deliver its financial products and services in the way its customers want them delivered: with exemplary service, convenience and at competitive prices. This is reflected in our mission statement: to set the standard in helping our customers manage their financial future’ (ING,2010). ------------------------------------------------- STRENGHTS * ------------------------------------------------- The ING brand has been established in 1991 and is notable to many for its durability. The lion logo has always been present in its activities all over the world. This shows a strong identity that the company carries out. It is easy for people to recognize and link the lion logo to ING. * ------------------------------------------------- ING is a financial institution that is capable of cross selling its products and services. The company is active allover the financial industry. However they do have a very strong distinction in marketing and communicating its various products and services. * ------------------------------------------------- ING’s marketing communications are well coordinated and send out a consistent message that supports the company’s mission. * ------------------------------------------------- As ING is not a regular product manufacturer but a service provider, personal selling is one of their strongest foundations. Offering financial services and products request real face-to-face time, opportunity for (potential) clients to ask questions and providing understandable and credible information is crucial. ING makes this possible by branch offices throughout the country (Belgium) where potential as well as existing customers are enabled to schedule a meeting with a consultant. Nevertheless, ING can be contacted by post, email and telephone. * ------------------------------------------------- ING conducts and communicates having professional trained consultants and capability of understanding the financial market through years of experience in its advertising. * ------------------------------------------------- To emphasize its Dutch roots and create an even stronger ‘Orange emotion’ (orange color is the national color of the Netherlands) particularly among its Dutch clients and potential Dutch clients, ING has been sponsoring the KNVB (Royal Dutch Football Bond) team since 1996. In 2010 ING became the main sponsor of KNVB and ING will inter alia sponsor the national Dutch football team. Nevertheless, football touches the hearts of million civilians spread out over the world. Dutch football has increased in popularity and this is a very sharp strategic decision of ING as millions of people watch the European Cup and the World Cup. During these events ING can expose its identity trough the national Dutch football team to the world. Table 1: Strenghts ------------------------------------------------- WEAKNESSES * ------------------------------------------------- ING has a very strong position in the Dutch market and is active in more than fifty countries. However, in some countries ING has no branch offices. There is no physical evidence of the bank, which makes it hard for clients to accept ING as a company as it appears more as a ‘virtual financial institution’. Although ING markets and communicates itself as company who is close to the customer and on the market to help and serve customers, the lack of physical evidence is a tricky barrier to tackle through marketing communications. ING tries to fulfil the need of physical evidence through online video guides on its website and enquiry telephone lines. These two tools are intended to replace or even equalize with personal selling but due to lack of physical evidence (branch offices) this is very hard to implement in people’s mind as it is different from what people are used to from a financial institution * ------------------------------------------------- ING mainly focuses on young professionals. Many individuals perceive this as discriminating the elderly among the society. In its advertisements and communications there is little to none attention to the elderly. In addition, ING hasn’t used elderly people in its marketing communications. ING denies this group as their target but meanwhile they do have elderly clients in its clientele. It is hard for elderly to identify with the characters in ING’s advertisements. In addition, the crisis that occurred in Belgium shocked the public and lead to spreading rumours of ING intends getting rid of this client group. Table 2: Weaknesses 3.2 External context In order to provide a view of the external environment of ING, the PESTLE analysis on Belgium will be executed. Factors that may have or have influence on ING Belgium represent more information and only the most important information is provided. Political and legal factors * Belgium is a member of the European Union and therefore it must obey and respect the rules and legislation of the EU as well as its own regulations. * Belgium is a political stable country with a low corruption rate * Conclusion: There are no political threats to ING in Belgium Economical factors * Belgium has a 6.15% commercial bank prime leading rate (CIA, The World FactBook, 2010) * There is a current unemployment rate of 7.9% (CIA, The World FactBook, 2010) * ING did not suffer from the financial crisis as it received financial support from the Dutch government to PREVENT any issues. ING was healthy operating bank at the time, but due to bankruptcy of several banks, the government gave financial aid to ING to prevent any problems. * Conclusion: the unemployment rate due to the crisis can influence ING as Belgians will be more protective in loaning money. This can lead to income loss in Belgium. The turn side of this, is that Belgians will be more interested in saving money. ING can adapt this happening in the market by marketing its financial management skills. Socio –Cultural factors * Belgium has a population rate of 10,423,493 (CIA, The World FactBook, 2010) * 66.3% of the population is in between the age of 15 -64 years old (CIA, The World FactBook, 2010) * 17.6 % of the population is 65 years old or older (CIA, The World FactBook, 2010) * Median age in Belgium is 42 years (CIA, The World FactBook, 2010) * Belgium has a low population growth: 0.082% (CIA, The World FactBook, 2010) * Literacy rate of 99% (represents age 15 and over) (CIA, The World FactBook, 2010 * Belgium has a very low rate of telephone main lines in use: 4,255. This shows a change in lifestyle. Mobile phones have taken made a main line unnecessary. Belgium counts 12.419 million mobile phones and its population rate is 10.5 million. This means Belgians own more than 1 mobile phone. * Conclusion: The Belgian market is capable of understanding ING’s messages and communications. Median age in Belgium is 42 years old. ING should focus more on the 40 – 60 year olds as they represent a huge percentage of the market. At the moment ING is focusing more on 21 – 45 years old, leaving a huge potential target group out of their marketing communications. In addition, Belgium has very limited telephone main line users and high volume mobile phone users. ING should focus on text messaging marketing, free calls to hotlines from mobile phones to optimize its services and products to its customers. Technological factors * 4.465 million internet hosts (CIA, The World FactBook, 2010) * 7.292 million internet users (CIA, The World FactBook, 2010) * 90% of households have television and are able to watch broadcasts from TV stations (CIA, The World FactBook, 2010) * Conclusion: online advertisements have a high reach potential as Belgium has a high Internet connection rate. The same counts for TV advertisements. There are no threats detected yet but ING must keep up to date to the markets changing needs and wants of exchanging information. Not adopting new media tools can than become a serious threat. Ecological / Natural environment * Corporate Social Responsibility has become more and more important over the years. It is expected from companies to respect the environment, act ethical responsibly and give back to community. ING states on its website (ING, 2010): ‘ING wants to build its future on sustainable profit based on sound business ethics and respect for its stakeholders and be a good corporate citizen. For only by acting with professionalism and integrity, will we be able to maintain our stakeholders’ trust and preserve our reputation. Our Business Principles prescribe the corporate values we pursue and the responsibilities we have towards society and the environment: we act with integrity, we are open and clear, we respect each other and we are socially and environmentally responsible’. * Conclusion: By its statement of being corporate social responsible ING gains respect and trust from the community, stakeholders, customers and competitors. OPPORTUNITIES | THREATS | * Due to financial crisis and unemployment Belgians will be more interested in saving money. ING can adapt this happening in the market by marketing its financial management skills. | * Unemployment rate due to the crisis can have a negative influence on ING as Belgians will be more protective in loaning money. This can lead to income loss in Belgium. | * Belgium has very limited telephone main line users and high volume mobile phone users. * As median age in Belgium is 42 years old, ING should focus more on the 40 – 60 year olds as they represent a huge percentage of the market. At the moment ING is focusing more on 21 – 45 years old, leaving a huge potential target group out of their marketing communications. | * The low telephone main lines can withheld customers or potential customers to contact ING by telephone as mobile rates to main lines or hotlines are more expensive than phone calls from mobile to mobile. Belgians have a high mobile user rate. ING should focus on text messaging marketing, free calls to hotlines from mobile phones to optimize its services and products to its customers. * The older part of the community is not involved in ING’s marketing communications. This particular part of the community is not recognized as customers in ING marcoms but they are customers of ING. They also represent a huge percentage of the market but they feel left out. ING must adjust its marcoms to this group. | Table 3: Opportunities and Threats 3.3 Customer context ING’s customer profile can be described as young professionals, young families, double incomes no kids, educated individuals and students. As ING is a financial institution with various products and services it distinguishes different customer profiles. The three most important and open to the public customer profiles are discussed below: Commercial Banking ING target audience can be described as independent individuals from 18 years to 74 years old. However, in its marketing it focuses mainly on 25 – 45 year olds. Mortgage 18 year – 74 years old with a fixed income with legal residency and are able to prove income and other requested details can apply for mortgage. In ING’s marketing communications the customer profile for mortgages are couples, families with young kids, young professionals, double incomes no kids arranging in the age 28 – 45. However, single parents are also a target group but it is not expressed in their marcoms. Insurance (home, car, decease etc) The insurance service of ING is for families with young kids, young professionals, double incomes no kids, elderly, students and single parents. In its marcoms ING shows mainly families with young kids, young professionals and double incomes no kids in situations where a insurance is needed (house , car, house with young playing kids etc) 3.4 Business context The financial crisis has had a huge impact on the banking industry. Banks went bankrupt, people facing financial problems and increasing unemployment rate have all had their influences on the market. ING has survived the financial crisis and stood as a rock in this negative spiral. Customers have not lost their faith in ING. ING strong point was always been that it is there to serve its clients and manage their financials. When a DSB Bank (a huge bank in the Netherlands) went bankrupt, the country was in shock and people were afraid more banks would go down the same path. In Belgium the government had to help several banks because they were in financial trouble. ING communicated that it is not facing any financial problems and ensured its clients not to be afraid of losing their savings. In addition, the Dutch government gave financial aid to ING to prevent any issues. ING survived and even made profit during the financial crisis. ING has a very strong position in the Netherlands and Belgium. ING’s competive advantage is that it is in the market for years, and its experience and high skilled employees are here to stay and serve the customer, now and in the future. 3.5 Stakeholder context This part will focus on the connected- and external stakeholders. Connected ING is a financial institution and therefore its connected stakeholders are shareholders. As ING offers financial services there are no suppliers or distributors. ING is its self entitled body that serves its own financial services, there are no distributors involved in executing its financial services to its customers (in some countries ING operates under local banks. However ING is then as well mentioned in contracts, forms etc). Customers are explained earlier in the report (customer context) Shareholders, stock owners of ING must be kept up to date about ING’s activities and businesses. It is important for ING to stay transparent towards its stakeholders. It is ING’s responsibility to inform shareholders about any changes, new acquisitions, new markets, new services, new target groups and business performances as well as any possible threats. The annual report presented to its shareholders must cover these subjects. External Media is a very important external stakeholder of ING. As a multinational active in more than 50 countries, ING is in the centre of attention of the media. Any mistakes, faults, misplaced messages or even internal problems will be revealed to the public as media will bring this out, with or without ING’s comment. It is therefore important for ING to respects other cultures, act ethical, control and evaluate its business and performances. Additionally, it is important to stay transparent to media: they can make or break you. Nowadays, with the revolution of Internet news or rumours are spread out to the world in matters of seconds. ING must always make sure it communicates any relevant information towards its customers to prevent crisis. Nevertheless, media is a positive way to express communication. 4. Objectives The following objectives refer to the occurred crisis of ING in Belgium. These objectives are determined in order show how the crisis could have been approached in a different way. ING should not have just withdrawal its proposed measure for 60+aged customers in a press release. It should have done the following as stated in the 3 objectives: 1: Create awareness and correct understanding of fraud and scam at ATM’s during cash withdrawal through marketing campaign (which focuses on 60+ aged) in the next 6 months in order to implement new measure on 30% of current 60+aged clients within 12 months. Publish press release to announce this. Date: 3rd of August 2010. Achieve positive brand perception among this target group. 2: As 45 – 65 aged form a huge potential customer percentage, ING shall advertise for a period of 9 months spreading the message that ING respects and recognizes them and offers custom made services that appeal to their specific needs and wants without disrespecting this group. Achieve a product awareness of 40% among this target group within the 9 months of advertising. Achieve positive brand perception among this target group. 3: With above stated, ING intends to increase its clientele in the age of 45 – 65 years old by 7 % in 24 months. These objectives are chosen in order to minimize the effect of the crisis on 60+ aged existing- and potential clients. Additionally, as mentioned in an earlier stage in this report, ING must recognize the fact that Belgium has a huge population rate in between the age of 45 -65 years old. Offering its financial services adjusted to the wants and needs of this group will have a positive influence on incomes generated and positive corporate identity and reputation. This will also lead to a positive brand perception in people’s mind. 5. Strategy and tactics Strategy The strategy will support to carry out and achieve the earlier determined objectives. The most applicable strategy for ING in this case is the ‘B2C profile’ strategy. The profile strategy is very effective and very powerful to overcome a crisis. It is designed to create positive brand perception and that should is stated in the objectives. The negative perception of ING among clients, media and politics can be decreased with this strategy. ING should announce its new marketing campaign (objective 1) and its new financial services for a new target group (45-65 year old, objective 2) in a press release. A public relations technique isis recommended as it is credible, reaches a large scale of receptions and enables ING to maintain its strong position in the financial market in Belgium. Tactics Tactics are short-term actions that help to achieve the strategy. 1. Mix Marcoms The marketing campaign (objective 1) should be conducted through advertising, personal selling, direct marketing and public relations. First of all, a press release should be published to withdraw the proposed measure for 60+aged customers and announce a marketing campaign for objective 1 and announce its new financial service for objective 2. Advertising will follow to create awareness. Personal selling will be used to inform and explain all necessary information to (potential) clients. Direct marketing will be used to inform existing clients personally. These three marketing communication tools will help to create a positive brand image. 2. Media Broadcast media (TV) will be used for the advertisements. Print media will be used for the press release in financial newspapers and daily newspapers (the marketing communications tools are meant for average people and not multi billionaires). New media will be used for Internet advertisements on its own website and text messages will be used to inform existing clients and providing a direct Internet link. 3. Message In its intention to protect 60+aged customers ING failed tremendously. Therefore it is very important to send out a message that is very clear and interpreted correctly. A factual based message combined with slice of life is most applicable. Factual based message presents factual arguments. In this case, ING should present the fact that: In the past 4 years fraud and scam during cash withdrawal from an ATM machine is doubled. Emphasize that particularly 60+ aged have been victims. Nonetheless, 98% of ING’s 60+ aged clients have a weekly cash withdrawal below €1.000, they should become aware of this by ING. This enables the existing- and potential clients to relate to ING’s message. The slice of life message (in combination with the factual message) is to enable customers to identify themselves with the characters ( 60+ aged characters) and the problem (fraud and scam) that ING is putting forward. The slice of life message must deliver ING the perception in people’s mind as the solution. 6. Action Action implies implementation or execution of the planned marketing communication strategies and tactics. There are basic steps to be executed: * Setting the marketing communications budget * Prepare a GANTT chart and divide tasks and responsibilities of marketing communications to staff Budget The percentage of sales method should be used to set the budget. ING can use last year’s sales as basis to set its budget. ING can allocate 3-5% of its last year’s sales for the marketing communications of this action. A very high percentage is not required, as it only concerns one country (Belgium). In 2009 ING had a net result of € 962 million (globally). Obviously, 3-5% of € 962 million is overrated. Due to lack of figures published per country per financial activity it is not possible to determine a budget in amount of money based on facts. Therefore a fictional budget will be set on € 2.75 million. The budget in the GANTT chart is therefore fictional as well. GANTT chart Mix Marcoms activities | Time | Staff | Budget | TV advertisement | September 2010 – February 2011 | Advertisement agency | € 1.000.000 | Press release | August 3rd 2010 | Public relations manager | € 10.000 | News paper advertising | September 2010 – April 2011 | Marketing communication agency | € 100.000 | Internet advertising | September 2010 – April 2011 | Marketing communication agency | € 50.000 | Direct mail campaign | September 2010 – September 2011 | Marketing executive | € 500.000 | Text message campaign | September 2010 – February 2011 | Marketing communication agency | € 90.000 | Personal selling | September 2010 –until service is not available any more | ING staff: consultants | € 1.000.000 | 7. Control When the marketing communication plan start, it is important that ING’s management monitors and controls the process. Monitoring is checking and making sure everything is executed according to the plan. Control is the process of taking actions as soon as possible where necessary when things are not going as scheduled. This is to achieve the desired result. The method that ING can imply to measure and control its marketing communication is ‘brand survey’. As stated in the objectives, ING has to create a positive brand perception in people’s mind. A brand survey can be used to measure the perception of ING in people’s mind. This method can be used for objective 1 and objective 2. Profitability control method can be used to determine whether ING has achieved its objective of expanding its clientele with 7% of new clients in the age 45 -65 years old in 24 months. Referencing CIA, The World Fact Book, Belgium, 2010 [online] Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/be.html [Accessed 22 December 2010] De Tijd, De faux pas van ING [online] Available at: http://blogs.tijd.be/cif/2010/08/de-faux-pas-van-ing.html [Accessed 20 December 2010] ING, 2010, ING Brand [online] Available at: http://www.ing.com/group/showdoc.jsp'htmlid=425689_EN&menopt=abo|bra# [Accessed 20 December 2010] ING 2010, Profile & Fast facts [online] Available at: http://www.ing.com/group/showdoc.jsp'docid=092825_EN&menopt=abo|fct [Accessed 21 December 2010] ING, 2010, The history of the ING lion [online] Available at: http://www.ing.com/group/showdoc.jsp'docid=168408_EN&menopt=abo|his|hil [Accessed 21 December 2010] ING, 2010, Wekelijkse afhaallimieten bij ING België [online] Available at: http://www.ing.be/about/showhtml.jsp'htmlid=460301_NL [Accessed 20 December 2010]