Chapter 4
Marketing and Competitive Positioning
O
nce a transforming microfinance institution (MFI) has defined its vision, mission, and values, it needs to develop its marketing and competitive strategy. This process begins by clarifying who the expanded target market will be for the regulated institution and gathering marketing intelligence to understand the target market preferences, needs, and habits, as well as the products and services offered by competitors. This marketing intelligence becomes a key input into the transformation process—from strategic planning, to business and marketing plan development—helping the institution decide which products will best suit the revised target market, and how to develop, price, and deliver them. Marketing intelligence, in combination with a thorough analysis of the MFI’s strengths and core competencies, is also necessary for the MFI to determine how to position itself in the market relative to its competitors. This competitive position is solidified through branding— actively communicating a key concept, core benefit, or value proposition that becomes associated with
the regulated institution and helps shape its image. As shown in figure 4.1, matching institutional strengths with well-analyzed market opportunities must drive decision making so the MFI can develop a clear strategy going forward as a regulated institution. Through understanding its target market, determining the ideal product mix, and positioning itself in the market, the MFI can then develop its business plan, including financial projections, and test the viability of its decisions.1 The purpose of this chapter is to outline key areas related to marketing and competitive strategy that transforming MFIs need to master to successfully make the transition to and take full advantage of being a regulated financial institution. This chapter begins with a description of marketing and how it fits within the MFI as it transforms into a regulated institution. It then outlines the process for gathering marketing intelligence—the core of any marketing and competitive strategy. Once gathered, such marketing intelligence provides the information the transformed MFI needs to
This chapter was written by Monica Brand, Vice President, Marketing and Product Development, ACCION International. She would like to thank Jacqueline Urquizo, Director of Marketing Intelligence, and Nino Mesarina, Director of Product Development, both of ACCION International, for their contributions to this chapter. 95