Question 1: what level of the product hierarchy has ING Direct leveraged and how does this create value for both customers and the shareholders of ING Direct?
ING Direct has leveraged the product from basic product to augmented product. Basic product from a bank industry is simply providing bank service through branch or call centre, which has meet core need of their target customer. The introduction of virtual Internet banking, which has exceeded the customer expect. There were many arguments when this type of product was first introduced in 1999,that there was only a particular group were willing to use this new product. However, the customers are no spread across all age groups and different background. Product is contributing to brand and a brand is about using the marketing mix elements to create a differential position in the market. Once customers are satisfied, it will directly contribute this value- add to the brand. Therefore a good brand is the most effective way to orchestrate a firm’s marketing process for superior shareholder value.
Question2: how would the product mix determinants have influenced ING Direct’s decision to enter the Australian market? Outline how each of the product mix determinants would have been employed by ING Direct.
ING Direct has used strategic focus determinant, where it has shifted rom a volume to a productivity focus. The Australian banking sector has traditionally relied on high customer switching costs to maintain existing business had product offerings. ING Direct recognised this opportunity by introducing a low-cost internet banking, which has shorten the product line to cut cost, save on working capital and focus on the more profitable items. Core strategy: if the ING Direct focus on “ customer experience” core strategy determinant, they should provide more experiential value add for their customer, such as, video banking and internet chatting for any inquires. Targeted market...