charles schwab & co ppt

8/3/2019 Charles Schwab & Co PPT

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Adeyemi Makanjuola Conrad Parnell Maria Mangones

Charles Schwab & Co., Inc.Talk to ChuckAdvertising Campaign


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OUTLINE

A. Case Objectives

B. Introduction

C. Industry Background: Charles Schwab & Company

D. The Talk to Chuck Advertising Campaign

Marketing at Swab - Client Segmentation

Measuring Loyalty - A Declining Brand

Talk to Chuck - Designing the TTC Test - Reviewing the Results

E. SWOT Analysis

F. Financial Information

G. Conclusion & Recommendations


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CASE OBJECTIVES:

To effectively evaluate theadvertising campaign of Talk toChuck for Charles SchwabCorporation

To discuss case objectives andmessage strategy by providingmarketing recommendations


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THE CHARLES SCHWAB CORPORATION

Established in 1971 by Charles R. Chuck Schwab as a traditional, brick and mortar

brokerage firm and investment newsletter publisher.

May 1, 1975, the company became the first discount selfservice brokerage firm toallow investors to manage their assets and make transactions without the help oftraditional brokerages.

In 1983, Bank of America acquired Schwab for $ 57 million , but merely four yearslater, Schwab Corporation managed a buy back for 280 million and thereafter wentpublic.

By 2004, Schwab offered a range of services in three sectors: Schwab Investor,Schwab Institutional, and US Trust. Schwab decided to return as CEO to replace

David Pottruck.


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MARKETING AT SCHWAB

Mid 2004, Chuck began reengineering the company by implementing341 million in annualized cost reductions against an expense base ofapproximately 3.3 billion. As a result, Schwab trimmed down 508million, representing a 15 % cut.

Becky Saeger, previously head of marketing at Visa , joined thecorporation. She oversaw Schwabs marketing organization , whichevolved by 2006.

The company priced its brokerage services too high which restrictedcustomer access to research and information according to customertransaction volume.


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CLIENT SEGMENTATION

4 Approaches to its U. S. retailcustomers

1. Investment Attitudes

2.

Life Stage3. Invest Style

4. Hidden Assets

Results: Any Schwab client could

placed into one of the segments in eachof the four classifications.

Schwabs client base wasunderweighted in the high touch

segment and overweighed in the selfassured segment.


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MEASURING LOYALTY

Net New Assets = new assets deposited assets withdrawn

Market share was declining

Most frequently reason for moving assets out of Schwab:

Need money for major purchases 21%

Wanted to invest less in stocks 12%

Change in personal situation 11%

Wanted lower commissions and fees 9%

Wanted more investment advise 8%

Price reduction, by 2005 assets withdrawn were migrating in

similar percentage when compared to other competitors


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A Declining Brand

Brand Asset Valuator (BAV) study

Schwabs perceived differentiation declined 2002 2004


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Study of Brokerage Customers by Hill Holiday

MOMENTUM

Company on the way up 11%

Company holding steady 73%

Company on the way down 16%

More innovative than ever 10%

Innovation holding steady 67%

Less innovative than it use to be 23%

INNOVATION


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TALK TO CHUCK
http://www.youtube.com/watch?v=YBUn5YfZ0Akhttp://www.youtube.com/watch?v=YBUn5YfZ0Ak


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TALK TO CHUCK Advertising Account, competition between 4 agencies

Euro RSCG: Volvo and Nestle are part of their clients Fifth-largest global advertising agency

Euro RSCGs Objective: To exploit the satisfaction gap & broaden the brand beyond the

discount brokerage arena. To target mass-affluent: 35-54 years old investors with $50,000

to $2 million investable assets To build a long term relationship with customers

Pitch Meeting: Talkto Chuck Tag Line Mr. Chuck work Ethics and Attitude. Euro RSCG proposed to communicate chucks core values Campaign : Original Roots ( chucks Era of running company)


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Campaign Ads


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TTC TEST

Designing the TTC Test

Test Marketing

Goal: to measure campaign success by tracking net new assets and the number of new

households investing with Schwab.

Reform: the need to reach their growth objective by prioritizing on customers.

2005 brand budget spent on Tests

26 markets were selected with at least 1% of the us population. Criteria for Cities: BDI/CDI

perspective and Strong field sales presence

3 Test Markets: Chicago, Denver and Houston (accounted for 6% ofSchwabs invested asset)

Considered a high concentration of $250,000 portfolio markets with efficient &affordablemedia

Chucks Work Ethics: Visited Test Site to speak to Schwab field representative to make sure

they were comfortable with the campaign.

I talked to chuck today and I can talk to him tomorrow


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Test Review

Consumer Attitudes

Consumer rates

Additional Tracking Consumer who recalled vs. Nonrecallers (+6 points)

Unique alternative (+5points)

Gaining ground (+7points)


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Ranking of Financial Services Companies Based onResponse to National Consumer Tracking Survey


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THE CHARLES SCHWAB CORP

SALES EBIT DEPRECIATION

TOTAL NET

INCOME EPS

12/10 4,176.0 779.0 146.0 454.0 0.38

12/09 4,116.0 1,276.0 159.0 787.0 0.68

12/08 5,117.0 2,028.0 152.0 1,230.0 1.06

12/07 4,865.0 1,853.0 156.0 1,120.0 0.92

12/06 4,164.0 1,476.0 157.0 891.0 0.69

12/05 3,474.0 1,027.0 179.0 634.0 0.48

12/04 3,277.0 547.0 197.0 350.0 0.26

12/03 3,750.0 717.0 277.0 476.0 0.35

12/02 3,815.0 249.0 309.0 149.0 0.11

12/01 4,158.0 177.0 394.0 106.0 0.08

Financial data in U.S. Dollars

Values in Millions (Except for per share items)

Income Statement - 10 Year Summary (in Millions)


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SWOT ANALYSIS

Strengths:

Diversified product range

Brand image, Mr. Chuck

Customer focus

Weakness

Poor leadership (David Pottruck)

Poor strategic planning Declined perceived customer value

Opportunities:

Ageing population may increase

Diversification of portfolios

Curtailing Attrition

Threats:

Economy

Matching capabilities fromcompetitors


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Focus on customers and create more value

Maintain brand image and core values of the company

Invest in advertising and increase marketing budget

Promote growth by targeting current clients

Conclusion and Recommendations

charles schwab & co ppt

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