The business environment is characterized by numerous opportunities. However, such opportunities can only be exploited if entrepreneurs conduct a comprehensive environmental scan in order to identify the prevailing opportunities. New business ideas may be generated from internal and external sources. Examples of external sources include customers, suppliers, market trends and competitors.
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On the other hand, internal sources include employees and institutions’ operational processes. The environmental scanning process may lead to the identification of numerous business ideas. However, only viable ideas should be considered for exploitation (Pride & Ferrell, 2006).
This project entails developing a new product, which has not been in existence in the market. The product will target firms in the banking industry such as commercial banks and SACCOs. This paper outlines the various aspects that will be taken into account in order to ensure that the product is developed and introduced in the market effectively.
The banking industry across the world is characterized by intense competition arising from the adoption of diverse competitive strategies such as market expansion and adoption of new technologies. The degree of rivalry is further enhanced by an increment in the number of new entrants such as Islamic banks.
Technological advancements such as the invention of ATMs have increased the rate of market penetration. However, the effectiveness of ATMs in promoting banks’ competitiveness is threatened by the high rate of ATM fraud, which is threatening the banks’ quest to integrate electronic payment system (Mohammed, 2011).
One of the main causes of ATM fraud is personal identification number theft, for example through PIN cracking, ATM hacking, and phishing attacks. ATMs have become ubiquitous in the application by consumer banking transactions. Subsequently, they are being used in transmitting sensitive information. However, the breach in ATM security technology presents an opportunity to come up with a new product that will eliminate PIN theft.
Theft of ATM and loss of PIN details can lead to loss of consumer confidence. This aspect might limit the bank’s ability to attract and sustain a large number of customers. This project outlines the process of developing and marketing the new product (Mohammed, 2011).
This project entails developing an authentication technique by integrating a new feature in ATMs in order to enhance the security of the customers’ bank accounts. This goal will be achieved by designing a fingerprint scanner, which will be capable of obtaining the customers’ biometric information.
The scanner will convert the customers’ fingerprints into electronic information, which will be stored in the ATM’s database and the reading device. A customer will only be required to place his or her finger on the scanner in order to authenticate his or her account and then key in the PIN.
It is expected that the new product will successfully penetrate the market. However, this goal is only achievable the identified idea is developed effectively. Subsequently, the idea will be screened in order to determine its feasibility.
The idea of the screening process will entail assessing whether the target customers will benefit from the new product. A comprehensive evaluation of the prevailing market trends was conducted to determine the probability of future market growth. One of the aspects, which were evaluated, entailed the security needs of electronic payment systems.
During the idea generation process, it was revealed that ATM fraud would continue to be a major challenge for many firms in the banking industry. The idea screening process also entailed evaluating the probability of growth in the biometric authentication market.
The market identification process also covered the evaluation of the extent of market competition. The idea generation process revealed that there is a high probability of the intended new product penetrating the market successfully.
Concept development and testing
In order to determine the probability of market acceptance and market penetration, comprehensive market research was conducted. The research focused on diverse consumer needs. Some of the issues, which were assessed during the market research, entailed the expected product benefits, the most important product features to be implemented, and the cost of production.
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The concept development process also entailed evaluating the customers’ reaction to the new product. Furthermore, the concept development and the testing process entailed seeking the opinion of security experts on electronic payment systems. The process also entailed developing a prototype of the fingerprint scanner. Furthermore, research on the suitability of the model in fighting ATM fraud was conducted.
The respondents were enquired on the uniqueness and liking of the new product. The research findings were compared with predetermined benchmarks. The concept testing and development process played a critical role in assessing the likelihood of the new product addressing the target market needs. The concept testing and development stage showed that there is a high potential of the new product gaining market acceptance.
Marketing strategy development
During this stage, a comprehensive analysis of the business environment was conducted. The analysis entailed assessing a number of market variables such as competitors and consumers. Evaluation of the two variables played a critical role in determining the most effective marketing strategy.
Competitor market research played a significant role in determining the most effective marketing strategy to adopt in order to increase the competitive advantage of the new product. Information gathered from the market research played a critical role in determining the most effective pricing strategy to adopt in order to breakeven.
Segmentation, Target market, and positioning
Undifferentiated targeting strategy will be used in the process of introducing a Biometric Fingerprint Scanner in the market. Pride and Ferrell (2010) define undifferentiated strategy as a strategy used to market a particular product into an entire market. The presumption is that all the target customers have similar needs, and thus they will require a particular product.
Upon identifying the target market, it is important for marketers to undertake effective market segmentation. The new product will be developed specifically to address the security needs of firms that provide banking services. Subsequently, the type of organization will be used as the core market-segmentation variable.
Pride and Ferrell (2004) argue, “Different types of organizations require diverse product features” (p. 219). The new product will target various banking institutions such as SACCOs and conventional banks. These institutions have integrated ATM technologies in their quest to enhance their competitive edge. However, their success is threatened by the high rate of fraud in the industry.
Optimal product positioning is critical in the organizations’ efforts to penetrate the market. Additionally, positioning aids in enhancing a firm’s competitive advantage by improving the image of its products. Cohn and Hough (2008) assert that positioning can be based on different variables such as product usage, product benefits, and the products’ specific features.
Cohn and Hough (2008) further argue that positioning aids in organizations’ efforts to differentiate their operations. An effective positioning strategy will be adopted in the course of introducing the fingerprint scanner. The following positioning statement will be used in marketing the new product, “for financial institutions that need to eliminate ATM fraud, Biometric Fingerprint Scanner is the solution”.
Developing and managing the product and commercialization
The new product will be designed effectively in order to meet the target market needs. The biometric authentication technology will not only be aimed at improving the customers’ security of banking information but will also enhance the customers’ level convenience. First, using the customers’ biometric information protects their banking information, which can be stolen or lost.
Credit and debit cards may be stolen, thus exposing the customers’ banking information. Fraudsters may use the information without detection by the relevant authorities. Therefore, the new technology will eliminate the need for banks to issue debit and credit cards to their customers, which will improve the level of convenience with which customers interact with their banks.
The new technology will be designed in such a way that customers can easily utilize technology. This aspect will increase the rate of usability amongst customers in accessing their bank accounts.
The new product will be known as the Biometric Fingerprint Scanner [hereafter referred to as BFS]. The product’s name was derived from the fact that it will aid in the generation of the customers’ fingerprint biometric information. The product will aid in developing a database, which will aid in the identification of the customer’s biometric information. It was ensured that the name is short in order to make it easy to pronounce.
Adequate product support will be ensured in order to ascertain that customers are conversant with the new technology. This goal will be attained by establishing a team of experts on biometric authentication systems.
The team will be charged with the responsibility of training the target customers on how the new technology works. The team will develop a manual on not only how to operate the fingerprint scanner, but also how to undertake occasional maintenance in order to ensure that it operates seamlessly.
This stage entails structuring and managing a particular venture in order to achieve the profit maximization objective. Furthermore, commercialization also entails adopting various value addition processes in order to penetrate a market and attain substantial market competitiveness of new or existing services, products, processes, and technologies.
A number of activities will be undertaken in order to ensure that the new ATM technology is commercialized successfully. An example of such activities includes integrating a comprehensive marketing mix. The marketing mix development process will integrate diverse variables, which include launching the product, formulation of the pricing strategy, promotion, and distribution strategies.
Expectedly, the new product will be launched successfully. Subsequently, sufficient tests on the new technology will be tested prior to introducing the product into the market. Testing will aid in identifying and adjusting the prevailing gaps in the new technology. Product launching will be undertaken by organizing a launching event in which stakeholders in the target market will be invited.
Additionally, experts on public relations will be contracted to provide advice on the most effective issues that should be considered during the product-launching phase. The phrase “endless possibilities with BFS” will be used as the slogan. This catchword will aid in enhancing the relevance of the new technology amongst the target customers.
The price of the new technology will have a significant influence on the extent to which the target customers integrate the product in their ATMs. Subsequently, optimal pricing is critical. Biometric authentication technology has been in existence for the past few years. Subsequently, there are a number of competitors already established in the market. However, the market is not concentrated.
Despite this aspect, it is important for a comprehensive competitor market research to be conducted in order to understand the competitors’ pricing strategy. This move will give insight on how to counter the competition based on price. Furthermore, market research will aid in determining the degree of price sensitivity amongst the target customers.
Considering the view that BFS is a new ATM security technology, the penetration pricing strategy will be adopted. The decision to adopt this pricing strategy is further informed by the high market demand for secure electronic transactions through ATMs. The product’s price point will be set at a point relatively lower than the competitor’s product price.
The decision to adopt the penetration-pricing strategy is informed by the need to ensure that the product attracts a large number of customers. This aspect will increase the likelihood of the product gaining a high rate of market penetration. Furthermore, the penetration-pricing strategy is also adopted by taking into account the customer’s price sensitivity. The price of implementing the BFS technology in one ATM will be set at $ 400,000.
Creating sufficient market awareness is essential in an organization’s effort to introduce a new product in the market. This goal can be attained by developing an effective marketing communication strategy. Integrated Marketing Communication (IMC) will be adopted in the process of creating awareness on the existence of new biometric authentication technology in the market.
The strategy will entail adopting different marketing communication methods such as public relations, advertising, personal selling, and sales promotion. Public relations will be undertaken by hosting a conference dubbed ‘ATM security, an obligation of financial institutions’.
The conference is expected to attract a large number of institutional customers. One of the issues, which will be emphasized during the conference, entails creating influence on the significance of banks investing in fingerprint scanner technology in order to promote optimal security.
In a bid to develop a strong relationship with the target institutional customers, personal selling or direct marketing will be adopted. This goal will be achieved by contracting representatives to market the idea of implementing the BFS in their ATM network.
Direct marketing will also be conducted by sending newsletters to target customers. Other direct marketing methods that will be integrated include telemarketing and direct mailing. These methods will present the vendor with an opportunity to interact directly with clients.
With regard to sales promotion, the vendor will integrate a quantity discount as a technique to attract a large number of customers. The rationale for integrating quantity discount is to entice the target customers to purchase a substantial number of fingerprint scanners that they will integrate into their ATMs.
Considering the high cost of implementing the technology in one ATM and that banks and SACCOs have an expansive network of ATMs located in different regions of their market, it is expected that quantity discount will influence customers to integrate the technology.
The vendor will also integrate after-sale services in promoting the new technology. One of the after-sale services, which will be integrated, entails providing the banks and SACCOs with free maintenance and product updating services. This move will aid in nurturing a high degree of customer loyalty. Subsequently, the target customers will continue utilizing the new technology.
The probability of some stakeholders in the banking industry failing to attend the conference cannot be ignored. Subsequently, marketing communication will also be created through advertising by integrating diverse marketing communication mediums. Some of these mediums include television, print media, and outdoor advertising.
The intended message will be designed effectively in order to effectively communicate the intended message to the target customers. Outdoor advertising will be undertaken by contracting outdoor advertising companies. This aspect will aid in ensuring that the intended message is located strategically to the target customers. Print mediums such as newspapers and magazines on economic issues will be used in creating awareness.
Furthermore, emerging marketing communication technologies will also be integrated in the marketing communication. Various web-based technologies will also be adopted. First, the new technology will be advertised through an official website, which will be created. Information regarding the new technology will be posted on the website. Advertising will also be conducted on different search engines such as Yahoo, MSN, and Google.
These search engines will aid in creating awareness to different customers. Furthermore, different social networking mediums such as YouTube, Facebook, and Twitter will also be integrated. YouTube will provide an opportunity to demonstrate to the customers how the new technology works. Other social networking tools, which will be adopted in the integrated marketing communication process, include Wikis and Blogs.
These social networking technologies will create an opportunity for the target customers to interact with BFS vendors. For example, they will be in a position to conduct a further inquiry on the effectiveness and operation of the new technology.
Furthermore, adopting Internet marketing will play a critical role in creating awareness of a large number of customers in the global banking industry. Subsequently, there is a high probability of new technology penetrating the international market.
Product accessibility is essential in a firm’s effort to increase the rate of product penetration in the market (Pride & Ferrell, 2010). The direct method of distribution will be integrated in distributing the product into the market. The rationale for adopting this distribution strategy is that it will protect the new technology from compromise. Adopting an indirect distribution method may cause the new technology to be less effective considering its sensitive nature.
Furthermore, product distribution in the international market will also be conducted by contracting renowned and reputable dealers on electronic payment systems. The dealers will be required to ensure that the effectiveness of the new biometric authentication technology is not compromised.
Using dealers will improve the effectiveness with which the new technology penetrates the international market. This aspect will arise from the view that the dealers are conversant with the electronic payment system market in the international market. Subsequently, the likelihood of achieving the set sales objective will be improved.
Banks and other deposit-taking institutions such as SACCOs are committed to developing their competitive advantage. Growth is one of the strategies that such institutions have integrated into their quest to enhance their competitive edge. The emergence of new electronic payment systems such as Automated Teller Machines have provided banks and other financial institutions with an opportunity to achieve their desired level of growth.
Subsequently, banks are increasingly adopting ATMs as a strategy to gain market penetration. However, this research paper shows that the banking industry is experiencing a challenge in its quest to attain market growth by expanding its ATM network. The challenge arises from the increase in the rate of fraud through various methods such as ATM hacking, cracking, and phishing.
This phenomenon is identified as a potential source of business opportunity in an effort to resolve the problem faced. The idea generated relates to the development of a new biometric authentication technology -a fingerprint scanner known as Biometric Fingerprint Scanner [BFS]. However, the extent to which the new product penetrates the market is dependent on the effectiveness with which the entrepreneur implements the new product development process.
This paper has illustrated that there is a high market potential for the new technology considering the high rate of ATM fraud. By adhering to the above new product development process, the new technology may penetrate the global banking industry. Integrating a comprehensive commercialization strategy will increase the likelihood of the new product succeeding.
Commercialization will increase the extent to which customers are influenced to integrate the technology. The vendor will undertake the continuous improvement of the new technology. The improvement process will be informed by findings of the market research, which the vendor will undertake.
For example, the research will focus on identifying operational gaps in the new technology, which will aid in enhancing the effectiveness of the technology in dealing with emerging security challenges. Subsequently, the new technology will be in a position to attain future success.
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