exclusivepapers.com
Sales Toll Free:
chat off
Home > Sample Essays > Economics > Pension Service Marketing in UK > Buy essay
← Market Failure Marketing Strategy for Airlines →
Live Chat

Custom Pension Service Marketing in UK essay paper writing service

Buy Pension Service Marketing in UK essay paper online

Financial services refer to economic facilities that are offered by the finance industry. The finance industry is one of the most important sectors in the economy of the United Kingdom. It is the industry that is concerned with the financial welfare of the people from the United Kingdom. It avails timely financial services to facilitate the running of the economy hence encouraging economic prosperity and financial welfare of the people. It is the backbone of the economy since all other sectors depends largely on it. The finance industry is made up of a wide range of financial organizations including banks, insurance companies, credit unions, government sponsored enterprises and pension services financial institutions among others. All these organizations offer unique financial services that promote both economic and social welfare to the citizens of United Kingdom. The pension services financial institutions are among the most developed organizations in the United Kingdom. They offer financial support to the old age generation (Mintel International Group Ltd. 2001).

The main reason for the quick growth of the pension institutions is the huge demand for pension services as a result of more and more people attaining the retirement age and hence seeking financial support to sustain them during their twilight years. The sector has developed to become one of the most prominent financial sectors in the country. In the United Kingdom, pension can be put in seven categories, which include occupational pensions, stakeholders’ pensions, group personal pensions, state second pension, basic state pension and individual pensions (Lovelock & Wirtz 2004). The basic state pension is provided by the government to guard against poverty in old-age. It is meant to sustain those people upon their retirement. Pension contributions provide a means of saving for the old age. In order to provide extra pension provisions above the basic state pension, the government of UK has come up with tree different schemes. Among these schemes there was the graduated pension also known as the graduated pension scheme. It existed between 1961 and 1975. In 1978, another scheme known as the second earnings-related pension scheme was introduced. This lasted until 2002.

Order now

In April 2002, the second state pension scheme was also introduced under this category. Individual pension is another category of pension in the UK market. This is a scheme that allows an individual to make contribution under a given arrangement made between the contributor and the pension providers. Contributions are then invested during ones working life and then later used to purchase a pension following retirement (Holde & Wild 2007). On the other hand, stake holders’ pension refers to a pension designed to meet the required government standards. Group pensions are personal pension linked to the employer. Various methods have been devised to make joining pension schemes and making contributions flexible and easily accessible by the clients. Automated enrolment and fast and easy creation of personal accounts are some of the steps taken to encourage employees and other pension clients to join pension schemes. There are various opportunities and threats that are facing the pension financial institutions in the United Kingdom (Nussbaum 2012).

Below is a table showing a pestel analysis of pension companies in UK.

Political-opportunities

Economic- opportunities

0
0
DAYS
:
0
0
HOURS
:
0
0
MINUTES
:
0
0
SECONDS
Discount Code

Social - opportunities

Technological- opportunities

Environmental- opportunities

Legal - opportunities

Political stability in UK

Large market/demand

The need to save for the future, growing individualism in UK., demographic patterns.

Advanced technology, rapid innovation and invention,

 

Supportive legal frame eg favorable tax laws.

THREATS

 

 

 

 

 

Plan to force pension transfers.

Stiff competition

Early retirements, high cost of living, high unemployment rates. increased job mobility.

 

Pollution/externalities.

 

Opportunities for the Pension Companies in the UK

The pension sector in the United Kingdom has a lot of potential. There are many opportunities that are signifying a bright future for the sector. Among the major opportunities that will propel these organizations include the following.

Increasing Demand for the Pensions

The demand for the pensions is on the rise in the United Kingdom. This is mainly contributed by the rapid changes in the demographic set up. More and more people are concerned of their welfare during retirement hence most of them are opting to save for their retirement as early as they get their first employment. With more people attaining the retirement age, pension providers are having more clientele than ever before. The need to provide competitive services to the pensioners has made most of the pension institutions to improve their efficiency and remain competitive in the market. This has resulted into a rapid growth in this sector. Between 1980 and 1996, the personal pension asset had grown by two fold showing the potential in this industry.

Threats Facing Pension Companies

Euro Zone Unemployment Rates

The employment rates in Europe including the United Kingdom have significantly dropped as a result of the decline in economic growth and the financial crisis that has hit European countries. The effects of financial crisis in the economies of its European trading partners have spilled over to the economy of the United Kingdom making many people to lose their jobs. Loss of jobs and other adverse effects of the financial crisis have made pension institutions to lose most of their clients, because they can no longer afford to contribute to pension schemes owing to their reduced disposable income. This has stagnated most of the insurance providers in the recent times (Nussbaum 2012).

Increased Job Mobility

This is mainly witnessed among the younger generations of the United Kingdom. Most of the employed young people tend to shift from one job to another as they seek better terms of employment to raise their incomes. This frequent and sometimes lifetime movement in the job market has made such employees to delay their pension decisions for a longer period of time and indefinitely for some of them. This is a serious challenge to the pension providers, because their clientele base has adversely been affected by this. Most of the pension firms might be forced to exit the market due to the decline in demand for pensions (Upshaw 1995).

High Administrative Cost for Private Pension Providers

For any firm to sustain itself economically, it must cut down its costs of operation to a sustainable level. Unfortunately, this is not the case in most of the private pension provider in the United Kingdom. The costs of operations are extremely high in some private pension providers when compared to other pension providers elsewhere in the world, for instance, in the United States of America. This country has serious financial consequences and negative impact on the reputation of such private companies discouraging customers from making pension savings with them. The revenues for such companies have been dropping with the increase in the cost of running them hence hindering their development (Nussbaum 2012).

Stiff Competition

Another threat facing the pensions sector in the United Kingdom is stiff and unhealthy competition witnessed amongst the pension providing institutions. The rapid rise in the pension providers might lead to a crisis in this sector if proper regulations are not in place to minimize the number of pension providers in the market. Rapid increase in pension providers has led to a cut throat competition and struggle for pension customers. Most of the companies have been forced to make decisions that are not sustainable given the economic circumstances in which they are in. The need to offer the most competitive pension schemes have led to serious financial implications, especially for less developed firms. This will hinder their development and the development of the pension sector in the UK with time (Ambachtsheer 2007). 

Early Retirement

Early retirement is another challenge that the pension sector in UK faces. The change in perception of most employees towards retirement has proved to be a major challenge for the pension providers. Since most of the working class decides to retire while still so young before they have done enough savings for their retirement. Decline in the retirement age has led to decline in pension contributions made to pension providers hence impacting negatively on their incomes (Nussbaum 2012). This is a serious threat, because with this trend most of the pension providers do not get enough revenue that they can use to invest in other profitable business. This has led to poor growth of such companies and a decline in the growth of the whole sector. If this problem continues to exist, then most of the pension firms might be forced to close due to the lack of adequate funds to sustain their operations and their growth in the future (David 2000).

High Cost of Living

The rapid increase in the cost of living is a major challenge that faces the pension sector in the United Kingdom. Reduction in disposable income has an adverse effect on the pension contributions. Most of the potential pension clients are struggling to make ends meet given the little income they have. The lower the income, the higher the propensity to consume leaving people with less income to save for their retirement. This has led to decline in the revenues that the pension institutions have to invest resulting to poor or stagnated growth of the pension firms (Garsten & De 2004).

High Rates of Inflation

The rise in the inflation rates is a challenge to the pension providers. Therefore, the money gotten from contributions of the clients is losing its purchasing power at an alarming rate. The decline in the purchasing power of the revenues collected from clients has made it difficult for companies to reap substantial benefits from investments made by the contributions of the clients. On the other hand, the interests generated from investment are too low to sustain the high rate of inflation (Nussbaum 2012).  The inflation rates in most cases almost exceed the interest rates from investments. The consequence for this is a stagnated growth of the companies involved and the whole sector.

Uncertainty of the World Economy

The uncertainty coupled with increase in public debt has made the economy of the UK and other nations so volatile and unpredictable. This state is a challenge to pension providers, because they find decision making on where to invest a very hard task. Also the recently witnessed financial crisis made most of the clients to lose their jobs hence they could no longer pay their contribution to the pension firms. Most investment decisions by pension firms have ended up being disastrous due to their unpredictability. If this trend persists then some of the firms may end up being declared bankrupt. This shows the correlation between a threat of the volatility of the economy and the pension financial providers.

Marketing Strategies Commonalities and Differences

There are various marketing strategies used by market pension products to the target clientele. The strategy chosen will depend on the level of completion the marketing firm faces, the group of customers that are being targeted and the available resource to carry out the strategy. The appropriate choice of marketing strategy will give the firm an advantage over other competitors hence the choice of strategy is very important. Most successful companies like virgin money, standard life company, JP Morgan and Aviva pension Co  have used well-planned strategies to market their products and this has created a competitive advantage for them against their rivals. Some of the most commonly used marketing strategies include the following.

Brand Management

Brand protection and management is perhaps one of the most commonly used strategies to market the products of a firm. Some companies have managed to build very strong brands that have stood the test of time.  Companies like standard life, Aviva, JPMorgan among others have built a very strong brand as a marketing strategy.  The creation of a strong brand over a long period of time has enabled some pension companies to build reputation and attract a huge customer base who have remained loyal and also helped in marketing the brand among their peers. This method is commonly used by most of the financial providers across UK. A good example of a pension companies that have built a strong brand includes the Virgin Money and the J.P. Morgan pension companies. Other financial institutions that have built a reputable brand include the Barclays Bank.

Customer Relation Management

Another commonly used method to market products in the financial sector is customer relation management. This helps to maintain a good relationship with the existing customers to ensure they remain loyal to the company. Furthermore, maintaining a good relationship with the customers helps to make the company more attractive to customers, therefore, giving it a competitive advantage over the other competitors. The use of this method is very advantageous to the marketing company, because it makes the existing customers marketing agents for the company. They help the company to communicate to the potential clients about the available products that they can get from the marketing company and how the products suit them. The all the major companies including JP Morgan, standard life, Aviva, Virgin Money among others have an elaborate customer relationship management systems. 

Cross Selling of Products

This is a kind of selling of new products to the existing customers that they are either not aware of or have not yet embraced them. As the customers come to purchase those products that they are interested in, the companies take that opportunity to make the customers aware of new products and encourage the customers to try them. This is one of the most efficient marketing strategy and one of the cheapest to carry out because the market is already created for the existing clients. It is one of the most effective methods to introduce the new policies to the potential clients. Since most of the existing clients are already loyal to the firm, it is much easier to convince them to use the new products since they have already built confidence in the products of the company. It is very effective where the company carrying out the strategy has a wide range of customers who are loyal to its products.

Market Segmentation

Market segmentation identifies a group of interest and focuses on it by coming up with products that target that group. The segmentation can be done on the bases of age, culture and lifestyle, economic activities carried by the group, their taste and preferences, their ability or their economic capabilities or by use of any other relevant means to categorize various clients into segments that have common features or similarities. It helps the pension firms and other financial organization to meet the specific needs of a particular clientele. It assists the firm to design products that are sensitive to the customers’ needs and that meet their expectations. It is the best method to use where market is made up potential customers with different needs (Boatright 2010). 

Differentiation of Products

This is a marketing strategy that involves coming up with products that have various and additional features to the existing products. Pension providers scrutinize the market and the existing products to find out any weakness that exist in them. They then come up with new products that have added features to make them more suitable than the existing products. This strategy is used in competitive environments where most of the products have already been introduced into the market by other competitor.

Use of Online Services like Social Media

This is the use of internet to market products. In the recent times, this strategy has been put in use to market products across a wide range of customers. The popularity of the internet and social media like Face book and emails has enabled companies to adopt this new method of marketing. It has now come easier to advertise products in the social media owing to the large number of potential customers using the internet. This method is cheaper and effective thus it has attracted so many companies to use it as a means of advertising/marketing their products. Most of the pension companies in UK use online services to market their policies.

Product Pricing

Various companies use pricing differently. Some used cost based pricing, others price their goods based on quality. This method is usually used in environments that have stiff completion. The UK market is one of the most competitive markets in the world with a large number of market players. As a result, financial institutions like pension providers have been force to engage in price wars. Companies compete to make their products the most affordable so as to win more customers than their competitors in the market. This strategy is commonly used by most of the pension providers to attract more clients to their side by offering them the most affordable products.

Virgin Money Pension Company

This is one of the most prominent pension companies in the United Kingdom. It offers a wide range of products and has managed to build a very strong brand that has made it one of the most reputable pension organizations in the world. 

Marketing Strategies Used by Virgin Pension Company

The company has developed various unique products for its clients thus giving it an upper hand against its competitors. Some of the major products it has include children pension, pension annuity service, personal pensions and employer pensions among others. This wide range of unique products has made the company very successful in attracting more and more customers to purchase their policies, which offer them a wide range of product to choose from. The company will continue focusing on the innovation and creativity for it to continue coming up with new products that are unique in terms of features and modification of some of its products to suit the current demand.

Marketing issues for virgin money for the next five years

Product Positioning

The company is focusing on positioning its products strategically in the market by ensuring that they are of high quality and have unique features that lack in most of the other similar products of its competitors. The introduction of children pension, for instance, attracted so many customers, because this product is unique and most of the other pension providers did not have it before. In the next five years, the company wants to continue positioning its products strategically to ensure they remain attractive to the customers and maintain its competitive advantage in the market.

Strategic Pricing

The company will use a competitive pricing strategy in order to attract more customers by offering relatively cheaper prices on its products. The company will use pricing as a strategy to beet other major competitors for the coming years.

Segmentation

In the next five years, the company will embark on segmentation of its clients to ensure that it comes up with the products that meet the needs of a given niche in the segment so as to broaden its market and to increase its sales. This will ensure it remains competitive in the market in the future.

Conclusion

The pension market in the United Kingdom is one of the strongest financial service-provider. The level of competition amongst various pension providers is very high and for one to survive they must adopt the most appropriate marketing strategy that will ensure they reach a large clientele without incurring too much cost in marketing. The better the marketing strategy adopted the higher the possibility of remaining profitable and competitive in the market compared to other businesses. Adoption of various marketing strategies will depend on the level of competition, the available infrastructure and also the financial implication of the strategy to the marketing organization.

Buy Pension Service Marketing in UK essay paper online

Buy essayHesitating

Related essays

  1. Marketing Strategy for Airlines
  2. Strategic Position and the Business Model of Starbuck Company
  3. Strategic Planning for Singapore Airline
  4. The Carilion Case
  5. US Advantages in Industrialization
  6. Market Failure
  7. VISTAPRINT: Future Business and Economic Prospects
  8. Business Operations and Systems
  9. Economics Assignment
  10. Malincho Case Study
What our customers say?
 
  • We accept:
  • Paypal
 
Thanksgiving2017
X