Marketing at vanguard

Problem Definition

Senior executives at Vanguard are evaluating their marketing strategy. In particular, they are looking at their approach to market segmentation, the organization of the marketing function, and the emphasis placed on marketing metrics in the corporate dashboard in light of an economic and stock market downturn.

Situation Assessment

Strengths

· Low cost high value; extremely low advertising spending and no large sales force.

· Customer focused

· High morale; Low employee turnover; high productivity

· Management involvement

· Horizontal organizational structure

· Use of Six Sigma methodologies to cut expenses, gain efficiencies

· Excellent use of benchmarking

· Centralized customer relationship management

· Use Internet technology in transactions

Weaknesses

· Immature level of development of marketing efforts

· No clear strategy or roadmap of dealing with increased competition

Opportunities

· Improve crossover rates

· Overseas markets

Threats

· Excessive customer segmentation

· Unusual decline in stock market indexes

· High rollovers

· Increasing deregulation in the financial services industry

Vanguard prides itself on providing low cost and high value to the customer and it is Vanguard's core competency.

Diversification (marketing strategy)

Vanguard

Vanguard 3

However, Vanguard's world changed when in mid-2003, Vanguard's niche market was invaded by commercial banks, investment banks and insurance companies due to deregulation in the financial services industry.

Vanguard took advantage of the Internet technology for customer transactions and other innovations to offer no load funds to the investors. Vanguard successfully employed Six Sigma methodologies in order to continue to offer high value at the lowest cost to the customer.

Some of the threats that could endanger Vanguard's prosperity or survival in the future include excessive customer segmentation where the varied offerings available confuse the customer and the investment brackets are not particularly transparent. Vanguard could encounter a significantly challenging situation if it is inadequately prepared to compete with...