Is BOC the No. 1 brand in SL?

One of my favourite hobbies is sharing the knowledge that I have picked up from the world of business and finance. The other day I got a group of MBA students that I teach at the University of Colombo to do a study on the focus of organisations to brand building as against driving sales – the former being a more long-term objective whilst the latter a more short-term objective. The findings were amazing. Let me share the key pick-ups.

BOC – No. 1 brand in SL

Established in 1939, Bank of Ceylon is the leading public sector commercial bank owned by the Government of Sri Lanka, holding the leadership position in its assets, deposits, and foreign currency remittances. With over 307 branches, 218 extension offices connected online and 350 BOC ATMs, it has the largest banking network in the country, standing by its slogan of ‘Bankers to the Nation’.

The bank is rated AA (Sri) by Fitch Rating, an internationally-reputed credit agency and is ranked among the 1,000 largest banks in the world. All of which brings added value and credibility to its new slogan: ‘BOC – the Bank you can trust’. Bank of Ceylon has also been ranked as the No. 1 brand in Sri Lanka by Brand Finance for the last three years.

Serving more than 10 million customers, it has become the largest bank among all the State and private banks in Sri Lanka with Rs. 15 billion net profit and a one trillion balance sheet by end 2012.

Best practice – theory

The Customer Based Brand Equity (CBBE) helps understand how a brand can influence customers’ perception or understanding of the brand based on the needs and wants of the customer. Brand equity can also be considered as a bridge that connects the past investment on marketing with present brand value and the future direction of your marketing activities.

The CBBE module involves the following: Brand Identity, Brand Meaning, Brand Response and Brand Relationship. The CBBE pyramid is the building block to creating brand equity.

Brand Salience: All the commercials done by Bank of Ceylon denote the category membership and persuasion for adequate consideration and consumption. The commercials indicate Bank of Ceylon should be the choice for any kind of banking activity and people should first consider BOC.

Performance: Performance features are prominently highlighted in the commercials during the period up to 2011. All commercials about products/services describe the service features and service effectiveness. Example – BOC leasing commercial

Brand imagery: Most of the BOC commercials try to win the emotional feelings of the customers by highlighting intangible aspects of the brand. The bank attempts to meet the psychological or social needs by highlighting the values, customs, history and heritage of the Sri Lankans. Examples: BOC Kaantha Ran Ginum commercial, BOC corporate commercial 2010 and 2011

Brand judgments: BOC commercials and other CSR work have helped the bank to build brand credibility, consideration and superiority. The outcomes of BOC marketing efforts show that customers see BOC as an expert, trustworthy and likeable bank which leads to brand equity.  Brand feelings: Due to the longstanding relationship with the community and due to marketing programs which evoke ownership, trust and close friendship, BOC has become deeply-rooted in the minds of consumers. Bank of Ceylon stands for ‘security’ out of brand building feelings where the brand produces a feeling of safety, comfort and self-assurance.

Brand resonance: The marketing programs such as the corporate commercial 2010 and 2011, the theme song and the tag line ‘Bankers to the Nation,’ in the backdrop of the patriotism created after the end of the 30-year civil war in the country, resulted in customers feeling that BOC is a national treasure and that they are a part of the BOC brand. The feeling of loyalty, attachment, sense of community and active engagement with the brand was created through these timely marketing campaigns.

Analysis

The BOC brand continued to remain as the No. 1 brand in 2012 as well. However, for 2012, the brand value has come down to Rs. 15.192 m from Rs. 16.794 m, a 10% reduction. The following could be reasons for the brand value to change:

Due to the intense market competition and the internal target set by themselves (to reach an asset level of Rs. 1 trillion and a profit level of Rs. 10 b by 2012 and to achieve the savings target of Rs. 1 trillion by 2014, BOC’s priorities and focus changed. As against the holistic approach taken to achieve the financial targets whilst enhancing the brand value shown in previous years, much attention was paid to achieving only the financial targets, thus neglecting the brand image.

If one were to carefully analyse the TV commercials of 2012 compared to the advertisements done prior to 2012 – Ithurum Mahagedara 2012 and BOC Megawasi – the corporate commercials were not run during the period of 2012 due to various reasons and the focus was more on accelerated savings, credit cards, and leasing. This has led to the following:

• BOC Megawasi commercial gives an impression that rather than capitalising on the brand image and value, the bank is trying to attract deposits by offering incentives.
• TV commercials done prior to 2012 mostly focused on the corporate image of the bank, the relationship of the bank with nation, heritage and ethnic harmony. However, the above two commercials done in 2012 targeted only the savings products.
• In these commercials no prominence is given to their well-established tagline ‘Bankers to the Nation’. Instead they are trying to promote the bank as ‘Ithurum Mahagedera’ (savings house), which will dilute their original tagline.

Commercials run in 2012 from customer based brand equity model

Performance features: Performance features of only the range of savings products are highlighted whereas bank is offering many more products and services. Example: Ithurum Mahagedera – 2012. Brand imagery: Compared to the commercials done on previous occasions, these commercials do not attempt to win the emotional feelings of the customers. Also they do not highlight the values, heritage and history associated with the brand BOC. One could argue that these commercials were done focusing on a specific product range. In that case, the bank should have done few other commercials to highlight the emotional feelings of the customers, thereby enhancing the brand image. Example: BOC Megawasi. Brand judgments and feelings: The recently-done TV commercials somewhat dilute the earlier impression created in the minds of customers of BOC as an expert, trustworthy and likeable bank. Especially the BOC Megawasi commercial gives a feeling that rather than capitalising on the strong brand image, the bank is attempting to mobilise deposits by offering incentives.

Brand positioning: Promoting a new tag line (Ithurum Mahagedera) dilutes the current positioning in the minds of customers that BOC is the ‘Bankers to the Nation’. When it comes to savings, NSB has strongly positioned in the minds of the customers as the top most brand for ‘savings’. By trying to promote the tagline ‘Ithurum Mahagedera,’ it creates confusion in the minds of the customers and finally leads to dilution of the current positioning as it is not easy to replace NSB as the ‘brand for savings’.

Point of difference: The points of difference criteria for BOC have been the largest and islandwide coverage and financial stability with Government backing which no other competitor could match. However, it is questionable whether the new TV commercials highlight these PODs. By offering incentives to attract deposits, one may wonder whether they could no longer rely on the Government backing and financial stability to mobilise deposits and have to offer incentives whereas there are some private banks that are very successful in canvassing deposits without offering any incentives.

Conclusion and recommendations

In view of the above, one can conclude that BOC has not done enough advertising to promote and enhance the brand image and value. Their main focus had been to achieve the internal financial targets set. Although it has spent Rs. 1.1 b as marketing expenses, out of this only about Rs. 250 million has been allocated for media advertising. The rest has been spent in sponsoring Government projects and functions. Even the TV commercials focused only on a specific product line in order to support their financial targets. Nothing has been done to promote the overall image of the brand. This the students felt resulted in the reduction of the brand value in 2012.

Based on their observations, the recommendations can be as follows:

1) More focus on managing the brand value with a separate brand manager and a department for the corporate office. Currently they don’t have a brand manager or a brand team.

2) The bank should closely monitor the brand value and should make sure they find reasons for change in brand value.

3) Brand plan for Bank of Ceylon – currently there is no written brand plan for the bank and becoming number one brand was merely a result of longstanding relationship with the customers and trust created through Government backing. But things will not remain the same. BOC will need more brand management skills, action plans, and close monitoring of the brand performance with the changing environment, especially in the light of competition.

4) Consistency in message delivery – commercials up to 2011 aimed at increasing customer-based brand equity but commercials run during 2012 didn’t contribute to increase the brand equity simply because those commercials lack the important aspects of customer-based brand equity model. Therefore the bank needs to make sure the commercials carry consistent brand values and reinforce the positioning instead of confusing customers.

5) Make use of the Bank of Ceylon theme song for brand equity building since this song plays a powerful role in connecting customers with the bank. Highlight the points of difference consistently in all advertising campaigns. This is because the commercials run in 2012 didn’t focus on POD. Identify proper brand marketing programs without blindly spending a huge budget on activities with less ROI.

(The thoughts are strictly personal views based on the research done and may have its own limitations of the study. The objective of the thought was to explain the importance of the relationship between brand value building and driving sales revenue/profitability.)