Barclays’ Market Research for the Student Account

1 Barclays’ Market Research for the Student Account Paper Outline I. Introduction II. Barclays’ primary and secondary research A. Use of questionnaires B. Focus panels and staff working in branches III. Secondary research A. Quantitative versus qualitative research B. Justifying Barclays’ need for qualitative research IV. Market research and value proposition V. Value proposition of Barclays’ customers via market research VI. Conclusion VII. References

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2 Barclays’ Market Research for the Student Account Introduction With rising competition for market share, firms are continuously finding innovative ways to stay ahead of their competitors. Market research is one way that businesses are using to find customer needs and find new customers. Market research involves assessing potential markets or market segments to find if they can provide a viable venture worth attention. A market in this sense constitutes different kinds of customers. In a bank situation for instance, corporates or individuals could be regarded as constituting two different markets. A market segment constitutes part of the whole customer group that can be grouped as having particular common characteristics (Kotler et al., 2001); for instance age, occupation, and geographical location.

Through such segmentation, a firm is able to address each group with respect to its unique needs, giving better value proposition to customers and also expanding the customer base.

Barclays is a multinational bank that provides a range of financial services to its customers. Its customers range from corporates to individuals. In effort to broaden its business and market share, it does market research in order to seek new opportunities and rationale to exploit them.

Barclays found the need to revise and improve its student account and increase its proposition and therefore carried out market research on it. It contracted an agency to gather information on the student account and drew conclusions that led to addition of new features to the existing student account. This paper discusses the rationale in Barclays’ market research on the student account. The methodology is discussed and opinion of other writers on the different issues discussed.

Barclays’ primary and secondary research

3 In an effort to find first hand information on various areas of interest, Barclays carried out a primary research that began with an internal effort to answer two questions: 

Who should our key customers be?



What are their needs?

They then contracted an external agency that carried out an opinion panel that did an

online questionnaire that gave both quantitative and qualitative findings.

Use of questionnaires Questionnaires are lists of questions to be completed by respondents and are the most commonly used tool in research (Kotler et al., 2001). They can be administered via mail, email or face to face. The questions therein range from simple yes/no questions, multiple choice or sliding scale where values are attached to an aspect and gauged by the respondents. They are an important tool for gathering primary marketing data for a firm (Proctor, 2000).

The advantage of questionnaires is that the researcher is able to reach large numbers and that they are easy and faster to create and interpret. They are also more objective and gathered in a standardised way (Porter, 2008). On the other hand, they have the disadvantage of being limited in explanation and respondents forgetting some issues. Some may even answer superficially while others especially students may not be willing to answer those questions. It is difficult to verify a response since when it has been returned, it will not be possible to identify the respondent (ICC/ESOMAR, 2008). Barclays was able to overcome much of the potential challenges by contracting an outside agency which specialises in such research and who could do a thorough job. Contracting such an external may pose some danger of not having touch of facts on the ground and may thus not always give good results. For this reason, it is important for

4 companies to engage their marketing, research and development departments in such undertakings (Proctor, 2000).

Focus panels and staff working in branches Barclays was able to further its research via its staff in various branches. From these, they were able to identify students’ priorities, concerns and their strength of feeling. The advantage of this is that they were able to establish needs in a real banking situation as opposed to questionnaires which give abstract or wishful situations. It is from this primary research that they established that: 

Students heavily relied on credit facilities like bank overdrafts for their upkeep in the university.



They wanted high tech gadgets.



They needed separate accounts for the sake of expenditure and borrowing.



They needed different forms of incentives to motivate them.

Primary research has an advantage of enabling multiple comparisons of variables,

generalisations to larger populations and verifying of information through re-questioning. They are also computer codable and this simplifies work. Their disadvantage is that meaning may be lost through over-reliance on computed data (John & Steven, 2008). Closed questions also limit responses and respondents may interpret questions in a different way. It is also very difficult to tell if respondents are answering honestly while their response rate may also be low and distribution non-random, distorting validity.

Secondary research Secondary research is the study of already existing data collected by other people for their own purpose. Secondary sources of data could be either internal or external (Proctor, 2000).

5 Internal data that is relevant to business comes from diaries, sales records by territory and customer type, discounts and order sizes. Financial, storage and transport data could also be relevant. External sources are government statistics, trade associations, commercial services and national or international institutions. Published texts, statistics and media are an important source too.

Secondary research by Barclays was done in form of study of market research reports, sales figures, and competitor marketing literature and government publications. From the secondary research, Barclays found that 0.4 million of the 5.4 million accounts were student accounts. Secondary research is cheap and easily accessible and is often the only resource for large scale trends and historical documents (Franke, Bond & Hofstede, 1991). On the on the other hand, it may lack consistency of perspective in that it was carried out with a different mission in mind. There is also no way to check biases and sometimes raises more questions than answers. The main concern is whether any data found in a secondary source can be totally separated from the context of its collection and applied in a different context (Proctor 2000). It is upon the qualitative and quantitative findings from the primary and secondary study that Barclays formed the new student account with new features.

Quantitative versus qualitative research According to Donna (1998), quantitative research could be differentiated from qualitative research in terms of the nature of data obtained. He identified three areas in which the difference in data could be described. How objective, explanatory and universal the data is, forms the basis of the difference. Even though there are no absolute terms to describe either as to fall on either qualitative or quantitative research, it will be found that these aspects fall more towards one than the other. Quantitative research is objective, seeks explanatory laws and tries to find universal

6 laws. On the other hand, qualitative research is subjective, aims at in-depth description and is not replicable as a law in that it is more particularistic in its findings (Donna, 1998).

Laakso and Paunonen-Ilmonen (2001) describe quantitative research as that which gives numerical data presentable in figures, charts or that is quantifiable. Qualitative research is described as that which gives non-numerical, descriptive results or draws opinions from the sources (ICC/ESOMAR, 2008). Kuhn (1970) adds an aspect to qualitative research describing it as a process that is inductive, where the researcher builds abstractions, concepts, hypotheses or even theories from the details he obtains.

Justifying Barclays’ need for qualitative research According to the quantitative research carried out by Barclays, they found that 81% of the students had a savings account while 32% already held investment savings account. Further, Barclays already had an existing student account. This was a clear indication that what Barclays needed was not a mere introduction of a student account but rather a student account that had unique features that would bring several new student account holders. The best way that Barclays could find what features they wanted or disliked was through a qualitative study to discover preferences, dislikes and other opinions.

Barclays therefore carried out this study to study perception of the students such as: 

How they felt about the products and services already in the market.



What they did not like.



What they would want featured in a new product.

Much of what led to the decision to establish the student account was from the opinions

of the students. The qualitative research is what identifies the need for action rather than the

7 quantitative research. The quantitative findings were only to find if the establishment of the student account was economically viable or reasonable.

Market research and value proposition When developing value proposition for a business, it is important to make it clear and concise (Franke, Bond & Hofstede, 1991). This is best done by first finding out what needs that target group have in common. This is where market research comes in. Value proposition gives the following benefits to your business: 

It increases both quality and quantity of leads.



It creates a strong competitive advantage.



It leads to increased market share in the targeted segments.



It improves operation efficiency.

It is important when doing this market research to look at both short term and long term

effects. Improving the customer’s life should form part of value focus. This can be done by being able to look into what the customer may need in future through looking at trends in the present (Kotler et al., 2001).

Value proposition of Barclays’ customers via market research By doing market research and identifying different needs within markets and market segments, Barclays is able to find ways to satisfy these needs. This ensures that every person who can hold a bank account is not left out but will always have a bank product suitable to meet his/her need. As is evident, Barclays has a continuing plan to re-evaluate its products so as to ensure they remain relevant to the target market. In the case of the student account, it is clear that Barclays added such features as: 

No monthly fee in order to keep cost down.

8 

The interest free overdraft facility was expanded to 2000 pounds right form the first year.



Barclays partnered with Orange to offer mobile banking and increased local branches for easier access. In the long run, Barclays surpassed its 25% student account target and hit 34%. This increased its market share and moved form third to second position of the top four market leaders.

The idea itself to look at the needs of a student was futuristic in that in the future, these

students may want to stay with a bank that identifies with their needs even after school.

Conclusion Primary research involves the search for new data aimed at creation of new or improvement of existing situations. It involves getting first hand information from sources. Even though it may be time consuming and expensive to carry out, it gives data that competitors do not have, giving a competitive edge (Whitson & Philip, 2009). Secondary research involves study of already published material in order to seek past methods of going about a task (Proctor, 2000). The secondary information is easy to elicit.

Qualitative research is the inductive process of obtaining descriptive, non-numeric and particularistic information. The data obtained is often not quantifiable. Quantitative research on the other hand is the search for objective, explanatory data that seeks to give a law that is universally acceptable. It often gets data in numeric forms that could be presented in graphs, tables and other charts. It can be obtained through scientific experiments, counts and other methods that yield quantifiable aspects (Donna, 1998).

In the quest to improve its already existing student account, Barclays was successful in its market research. The primary and secondary research it undertook was relevant and addressed the right questions. Administering questionnaires was a well guided decision for the agency that

9 did the study on behalf of Barclays. By looking for qualitative data, Barclays was able to find merit in the rationale to revise and re-brand its student account. Quantitative data on the other hand provided economic sense or gave a green light to the undertaking. Barclays went ahead to design its new student account that created an attractive proposition. The overall result was an increase of 34% against a target of 25%.

10 References Donna, L. (1998). Quantitative versus qualitative research: an attempt to clarify the problem.

Retrieved 30th December 2011, available on http://home.comcast.net/~lady.socrates/qvq.html Franke, R., Hofstede, G. and Bond H. (1991). Cultural roots of economic performance: a research note. Strategic Management Journal, 12, 165-173.

ICC/ESOMAR (2008). International code on market and social research. ICC/ESOMAR Amsterdam, the Netherlands, 4th ed. http://www.esomar.org/uploads/pdf/professionalstandards/ICCESOMAR_Code_English_.pdf John, R. & Steven, M. (1983). The indicators of a friendly market. Marketing Science, 2(4), 319360.

Kotler, P., Armstrong, G., Saunders, J. & Wong, V. (2001). Principles of marketing, third European Edition. New York, NY: Prentice Hall.

Kuhn, T. (1970). The structure of scientific revolutions. Chicago: University of Chicago Press.

Laakso, H. &Paunonen-Ilmonen, M. (2001). Mothers’ grief following the death of a child.

Journal of Advanced Nursing, 36(1), 69-77.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 35, 45-66 Proctor, T. (2000). Essentials of marketing research. UK: Financial Times-Prentice Hall Whitson, B. & Phillips, M. (2009). Library research using primary sources. Berkeley: Library, University of California, Berkeley. Retrieved 28th August 2009 from http://www.lib.berkeley.edu/TeachingLib/Guides/PrimarySources.html