Identify an Existing Product/Service, Essay Example

Checking accounts

These are some of the traditional products offered by USAA Federal Savings Bank. These accounts are geared towards depositing funds into accounts so that individuals can pay bills directly without using cash payment. Checking accounts have been connected to debit cards, and this allows individuals to make payments without writing checks to individuals or companies (Goodman & Downess, 2003).

Current Situation

Research shows that the market share for checking accounts has significantly grown in the US market while declining in Japan, France, and Germany. Key players such as certificates of deposit accounts and money market deposit accounts have outperformed checking accounts in the market. However, checking accounts still dominates the market (King, 2006). Available figures indicate that last year, checking accounts generated $1.8B for USAA Federal Savings Bank: this was from 82.7% of the total market. Some banks have come up with competitive savings accounts, but USAA Federal Savings Bank has used its operating system in differentiating its products from competitors. As consumers in the market are shifting to competitors due to lower prices, USAA Federal Savings Bank is still raking in high profit margins from its products. The checking accounts have been combined with software that makes it a high performance account that results into high approval from consumers (Grant, 2006).

Internal/External Factors

Since its introduction in the market, the checking accounts have had a strong market demand. Available data shows that the accounts have maintained their influence on the buying decisions of consumers. The following are some of the external and internal factors that may affect USAA Federal Savings Bank’s checking accounts:

Social Proof: this is whereby the society influences the buying patterns of the consumers. Individuals who are unsure of the action to take when opening an account will depend on the behavior of the society. They use the judgment of others to determine their own course of action.

Influence of Groups Families: colleagues, families, and friends can influence an individual’s choice of a bank account. Such influences include reference by people who hold similar checking accounts and interactions with people who have used these accounts. An individual will often open a checking account if it fulfills the desire acknowledged by peers, family and other people associated with the accounts. Another factor that will affect these accounts is peer pressure: an individual will open a checking account because everyone has opened a checking account and they are talking about it (Grant, 2006).

Branding and Media Hype: every new release of a bank account must be covered in different media outlets. This includes radio news, TV, web, and print. USAA Federal Savings Bank has maintained its official website, which is fully loaded with solid marketing strategies. These strategies are meant to keep its checking accounts branding before the media. The bank relies on its revolutionary accounts that offer integrated features. Such features include saving time and energy affiliated with depositing checks by individuals. They can now pay checks automatically through depositing top the checking accounts.

SWOT Analysis

Strengths: The checking accounts have come with several features that add to its strength. This includes its linkage with debit cards that allow an individual to make payments without having to write checks. Such features are new to consumers, and they have been presented to a wide range of consumers. In addition, the checking accounts have received marketing support throughout the internet thus saving the bank over $400 million in advertising fees. Finally, USAA Federal Savings Bank is the first bank in delivering this product, and this is one of its greatest strengths.

Weaknesses: just like any new product, the checking accounts have a set of weaknesses. The fees associated with using these accounts include fees for customer service and a flat monthly rate. This is one of its serious weaknesses. Further, these accounts have a weakness associated with their overdraft: if an individual’s overdraft has few cents, then the bank is likely to charge over draft fees for this.

Opportunities: There is a high demand for a better checking account experience. The USAA Federal Savings Bank checking account combines its computing services into one system. Consumers have also realized that USAA Federal Savings Bank’s checking account can be seamlessly adapted for savings. In addition, this is the first step towards adopting an account based on the internet network (Goodman & Downess, 2003).

Threats: Most of the threats come from other accounts such as certificates of deposit accounts and money market deposit accounts with their respective cost of operating. Checking accounts are not the only product that stands to compete against certificates of deposit accounts and money market deposit accounts. The fact that checking accounts run on the oldest technology puts them behind in the speed race. The economy is still volatile, and the introduction of checking accounts has come at a time when people are cautious of which bank account to store their money (Wright, 2001).

Target market

The checking accounts have a compelling set of features that makes it attractive to a wide range of account holders. The target market for the checking accounts is limited by the high prices of its services. However, as much as the checking accounts will be functionally attractive to the public, it has been highly priced than other savings accounts. This is impossible for enterprises purchasers because they are typically sensitive about prices.

Secondary data research

This section used secondary sources of data including the internet and shops to capture the targeted demographic profile.

Analysis: the survey revealed that users of checking accounts tend to be younger and saved an average of $5000 dollars per month in their checking accounts. Additionally, 50% of checking account holders are between the ages of 20 and 40 with a household income of $ 120, 000 dollars or more.

Consumer Behavior

Individual Decision Making: the process of making decisions can be either collective or individualistic. When an individual makes an individualistic decision, he or she may open a checking account because the product is appealing. He people who open checking accounts are not seeking for other alternatives. This is because they conduct extensive research before opening the accounts thus making informed decisions. Therefore, they open the accounts instantly. Since the checking accounts have created a unique market niche, they remain at the top level of the product category. These accounts have dominated the market of saving accounts, and they generate over 50% of revenue to USAA Federal Savings Bank (Wright, 2001).

Role of Group Factors: when opening checking accounts, consumers can approach family members or a group of friends. Many people have a culture of discussing the most effective and efficient bank accounts. Individuals who have similar taste for banking services and products may associate with each other and give advice to each other. The opinions given about checking accounts can influence the decision of the consumer before he or she opens the account. This will depend on the loyalty and advice of the opinion leader to the consumer. Additionally, concerning making decisions at the household level, normally the parents make decisions on issues pertaining to savings accounts. Later, other members of the family may follow their decision. Moreover, the decision on checking accounts may be influenced by peer pressure. If they are not considered as trend setters, then they may be regarded as alien accounts (King, 2006).Consumer Purchasing Process

Checking accounts are available for everyone. Those who want to open a checking account at USAA Federal Savings Bank are advised to visit the bank’s customer service department. This includes visiting the bank’s website or physically going to the bank’s branches (Wright, 2001).

References

Goodman, J. & Downess, B. (2003). Finance and Investment Handbook. Northwestern: Barron’s Educational Series.

Grant, J. (2006). The Great Texas Banking Crash: An Insider’s Account. Texas, TX: University of Texas Press.

King, T. (2006). The Great Texas Savings and Loan Financial Debacle: An Insider’s Perspective 1984-1992. Cambridge, MA:  Author House.

Wright, D. (2001). Bank Marketing for the 90’s: New Ideas from 55 of the Best Marketers in Banking. New Hampshire: John Wiley & Sons.