Retail banking: What is a premium service?

Résumé du document

Deutsche Bank is a German bank, which was founded in 1870 in Berlin. Now, the bank has its registered office in Frankfurt am Main and is under the management of Josef Ackermann. Deutsche Bank is the most important bank in Germany, and the seventh in Europe, in terms of equity (2007). The subsidiaries of Deutsche Bank are present in more than 75 countries and the most important are in London, New-York and Singapore. (Annexes: figures 1 and 2 about Deutsche Bank's organization and Deutsche Bank's presence all around the World)

Our topic is about premium services and particularly these ones in Deutsche Bank. We wrote a short presentation about Deutsche Bank, so let's define briefly what a premium service is. A premium service is an offer strategy which combines two major dimensions: a tariff policy and a product or brand policy. A tariff policy aims at the heart of the market but which is not meant to be situated in the lower prices. A product or brand policy has the goal to improve the image of superior advantages, such as the quality, the performance or the band image. These strategies try to take important market shares by stressing a lot of benefits of the offer instead of proposing lower prices.

As far as today, the premium services in the financial sector, but also in the other sectors are still in the expansion phase. That's the reason why we will, in a first part, focus on the premium services market in the financial sector, but particularly in the retail banking branch. In a second part, we will talk about the questionnaire that we submitted to 50 persons of the German Nationality who are clients of different banks in order to understand what people think when we are speaking about premium services and in order to know what a bank can change in order to attract more clients for the premium services and products offers.

Extraits

[...] All this kind of banks are internationalized and propose premium services with almost the same advantages. That's why this force of Porter presents a risk quite high to the extent that the numerous competitors have to find a solution to diversify their offer on a constantly changing market. The power of negotiation of the customers: the purpose is to know the influence of customers on the market with their requirements on, prices, conditions of services and delivery deadlines, etc. Customers' needs are different from a country to another one. [...]

[...] The last thing to keep in mind is that premium cards are, as said before, proposed by Visa, MasterCard and American Express, and not from the banks themselves, so there are products that every bank can propose to its clients. But, some banks also propose some special offers, like account, card (CGL, subsidiary of Société Générale) or package, which are specific of the banks. That's what we will see now. Example of Deutsche Bank: BestKonto Deutsche Bank offers a multitude of services with the BestKonto: Travelling service: If you travel, you can benefit from advice of a specialized service and of reduction. [...]

[...] Figure No Yes Figure 6 : 4. Do you use Premium Services? No Yes Figure 3. Are you interested in Premium Services? Other(s) Financial products' Management Individual advices Credit card Figure 2. Of which product or service do you think, when we speak about Premium? I don't know Higher prices Additional services (theft insurance, loyalty points ) Individual services Figure 1. What is a premium service according to you? [...]

[...] In consequence, this market is hard to reach for the new comers. Threat of the substitutes : The substitutes are defined as answering the same needs of the clients as the existing products. In the premium service sector of the financial World, some substitutes, which we will talk about later, already exist. For example, the Plenium Sailing Card is targeted for the persons who are possessing a boat and proposes advantages which are answering to the clients' needs: assurances, preferential prices for the purchasing of boat accessories Not so much substitutes are existing as far as today. [...]

[...] Social developments The image of the banks after the financial crisis is getting worse and they are viewed as less popular nowadays. The banks are criticized on the fact that they increased their revenues and money. They were all the more criticized as they invested in the weapon industry. They can regain the trust of the population by taking time, money and energy for developing the corporate social responsibility. For Deutsche Bank, it would be very useful to develop the CSR and take it as an investment in the society and also for its own future. [...]