“Live Without Fear” Using Consumer Truth To Create Marketing History in Credit Cards

2 THE CLIENT A crowded market In 2001, there were five mn credit card in circulation in India Market growing at % CAGR Thirteen issuing banks already present All types of cards- classic, gold, co-branded, affinity….. ABN AMRO- a late entrant ABN AMRO a relatively small MNC bank –Just 10 branches and 200,000 customers in India Low salience and no historical retail equity

3 THE BRIEF To create a proposition so distinct and close to the customer’s heart that it would overcome challenges of being a late entrant in a crowded market, and create its own market To get to that something about the consumer that is unique and relevant and can be owned by ABN AMRO

Who should ultimately design the product? The customer, of course… - Philip Kotler

5 Cultural analysis, traditions & beliefs on savings and finance Understanding consumer needs, attitudes and usage habits with credit cards Developing and fine-tuning concepts for ABN AMRO credit card Disaster check of the communication prior to launch THE PROCEEDINGS - RK Laxman

6 THE PRACTICE Focus Group Discussions Couple Interviews Study of Live Interaction with Products (SLIPs) Depth Interviews Triadic Interactions

Consumers are people first and then users of products - Philip Kotler

8 THE ARGUMENT: Cultural Context… Self-restraint and sacrifice of pleasure is revered Deep emphasis on saving and aversion to debt Savings needed to Meet unknown contingencies To show “respect” for one’s income

9 However, changing values and lifestyles are leading to increase in spending THE ARGUMENT: Cultural Context… Emphasis on “Controlled Spending” “…jitni chadar hai pair utna hi failana chahiye..”

10 Seen as a loan, rather than a payment facilitator Promotes “unwanted” and impulse purchases Leads to overspending THE ARGUMENT: Credit Cards… “I should not” rather than “I cannot” “shuru se hi seekha hai…haath nahin faila sakte kisi ke saame…”

A look at the motivators and barriers to credit card usage

12 THE ARGUMENT: Motivators…. Power of always having money in hand –To deal with unpredictable situations –Flexibility to spend as one desires “you feel you don’t need anybody… you can do it on your own”

13 Power of always having money in hand Freedom to spend on anything… no restrictions Can deal with unforeseen eventualities Security- reduces unpredictability Confidence FEELS LIKE I AM IN CONTROL THE ARGUMENT: Motivators….

14 Credit cards seen as a “temptress” and a “debt mechanism” “credit card mein aap dekh nahin rahe ho.. Paisa.. Hota hai ne ki apne haathon se gin kar noton ka dena..” THE ARGUMENT: Barriers….

15 CREDIT CARDS No track of expenses- no cash exchange, less consciousness Increase ‘wants’, desires’ Impulse purchase Route to indulgence Accepted only in big shops… more expensive Overspending- LESS CONTROL ON MONEY “Paise ke upar control hi nahin rahta.. Pata hi nahi chalta” THE ARGUMENT: Barriers….

16 The barriers to subscription “it’s a sweet poison…a trap” The barriers to usage –Spend lightly, pay promptly “aakhir yeh udhar hi to hai na….” Fear of overspending and not remaining within one’s limits…. leading to Loss of Control THE ARGUMENT: Barriers….

THE RULING

18 Basis various needs, 5 concepts were developed We share here the concept that attracted maximum appeal.. and went onto become the Freedom Credit Card THE RULING: Concept….

19 “With a credit card one does not need to carry huge sums of cash in hand and plan day to day cash requirements.” The only problem is credit cards encourage impulse buying! Am used to living within my means and I feel credit cards will make me lose control over my spending Introducing the new ACCESS card. It offers you some unique features that make the card the most convenient way of making payments. It also helps you be in control of all the unnecessary expenditure Convenient credit, easy control THE RULING: Concept….

20 The facility of issuing cheques on your credit card - ………. The card itself is extremely easy to apply and use. Receive the card within 10 days of application or GET IT FREE! ……… You could also check your transaction details by simply accessing any of the nearest ATMs using your card. ……… THE RULING: Concept….

21 You will receive alerts the moment the spending on your credit card exceeds the pre-set limit specified by you at the time of applying for the credit cards, through mobile SMS, OR OR a letter. This pre-set limit can be increased or decreased depending upon your own requirements A consolidated annual statement of your transactions will be available on request. All your transactions will be segregated under separate heads such as spends on clothing, food, travelling, petrol etc., which will allow you to analyze your spending habits. This will help you budget and control expenses in the future THE RULING: Concept….

22 Compared to the ‘convenience’ features (cheque issuance, ATM usage) the ‘control’ features (alerts, pre-set limits, break up of expenses) found stronger appeal Convenience features were seen as relevant, but not unique…. “Hygiene benefits” Control features were seen as unique and highly relevant Recommendation: emphasize control features and mention convenience features briefly THE RULING: Reactions ….

23 Various names tested ‘Access’ and ‘Freedom’ both liked ‘Freedom’ met with greater enthusiasm ‘Freedom’ associated with –Freedom from worries of overspending –Freedom to choose own limit –Freedom to purchase anything THE RULING: What’s in a name….

24 ProductAttributeBenefit Personal Value Credit card Alerts Control mechanism Flexible credit limit ………. Functional Benefit Emotional Benefit Focus on ways to restrict spending Credit cards move from the domain of ‘temptation’ to act as the ‘conscience’ Security THE RULING: Means-End Theory….

THE CASE FILE

From “Temptress” to “Governess”

27 THE CASE FILE: Unveiling The Freedom Credit Card

LIVE WITHOUT FEAR The Commercials

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33 THE CASE FILE: Kiosks

34 THE CASE FILE: Drop Box

35 THE CASE FILE: Customized Envelopes

THE TESTAMENT

37 20,000 enquiries were generated within first 8 days of launch One of the fastest card ramp-ups –450,000 applications received & 50,000 cards issued within first 2 months THE TESTAMENT

38 Card activity rates were at about 70% as compared to industry standard which was less than 60% Average card spends were about 50% higher than industry average Business was set to achieve profitability 2- 3 years faster than any other player in Indian market THE TESTAMENT

THE VERDICT

40 THE VERDICT: This is a Consumer’s tale The battle very often is not one of “generating insights” from the consumer, the battle is in holding faith in what the consumer wants, and in single-mindedly working towards fulfilling that need, by weaving all aspects of the offering around it.

41 Thank You!