This document provides a marketing analysis of the Bank of East Asia's Beijing branch. It discusses the commercial banking industry in China, main problems faced, and analyzes Bank of East Asia's strengths, weaknesses, opportunities, and threats. The analysis finds Bank of East Asia has strong product offerings and risk management, but lacks customer relationship management. It recommends Bank of East Asia build a CRM framework, increase customer interaction, and provide a new lifestyle experience for customers to better serve them.

1. Bank of East Asia
Marketing
Analysis
Mengyu Chen
2/8/2013

2. Table of Contents
Bank of East Asia (Beijing Branch) Marketing Analysis ...................0
Introduction ........................................................................2
Commercial Bank Marketing in China .....................................2
Main Problems in China’s Commercial Banks ...........................3
Bank of East Asia.................................................................4
Bank of East Asia SWOT .......................................................4
Superior factors ..............................................................4
Weak factors ..................................................................6
Opportunity factors .........................................................7
Threat factors ................................................................8
Suggestion for their Marketing ..............................................8
Build a Customer Relationship Management (CRM) framework
....................................................................................8
Increase the interaction with customers ............................8
Provide a new lifestyle for customers ................................9
Works Cited ........................................................................... 10

3. Introduction
This article discusses the field of commercial bank marketing in China and its
main problems. Based on the author’s internship experience in the Marketing
Department of the Bank of East Asia, this article analyzes the bank’s marketing
strategy by using the SWOT method. Moreover, it provides recommendations
for the Bank of East Asia to reinforce its brand image and serve its customers
better.
Commercial Bank Marketing in China
The People’s Bank of China was founded in 1978. It functioned both as China’s
central bank and as the only commercial bank in China. The People’s Bank of
China could issue currency and regulate the financial industry. The bank also
offered banking and financial services to its customers. During this period,
marketing activity was still nonexistent due to the high monopolization of the
People’s Bank of China (China Financial Development History, 2012).
After the economic reform, the government segmented the financial market into
four parts: agricultural finance, international finance, constructional finance,
and commercial finance. Four state-owned banks were also established, namely,
Agricultural Bank of China, Bank of China, China Construction Bank, and China
Industrial and Commercial Bank. Each bank worked independently and was in
charge of one part of the financial market. There was no competition among the
banks. At this point, the value of marketing concepts was still not recognized by
the banks (China Financial Development History, 2012).
Since 1986, different commercial banks have come into being along with
China’s rapid economic development. Some local commercial banks became
very competitive with the flexible regime, advanced management standards,
and intensive marketing strategies (How Commercial Bank could Survive after
WTO accession, 2001). Under fierce competition, Chinese commercial banks
realized the importance of satisfying customers. The banks implemented the
concept of “Friendly Service” and spent more money on product innovation to
meet customer needs. After China’s accession to the WTO, its financial sector
underwent profound changes. Large-scale foreign banks entered the country,
which intensified the competition among banks, including the marketing of
commercial banks.
In the new competitive market environment, banks attempted to establish their
market position. Almost every bank created its own Marketing Department, and
the client manager system was applied by the commercial banks in China. In
addition, the banks continued to provide innovative products to their customers.

4. After years of exploration, the banks realized that new products and services
can easily be duplicated and that customers have limited time to determine the
differences between products. Branding became increasingly important in the
competition. Banks combined their respective strengths, innovated, and
enhanced their marketing management to establish a public image and promote
their corporate culture. For example, China Merchants Banks’ slogan “Changing
for you” (China Merchant Banks, 2011) intends to make customers feel that the
bank endeavors to serve its customers to the best of its abilities to fulfill their
needs.
Main Problems in China’s Commercial Banks
The rapid improvement of marketing has brought China’s commercial banking
sector into the new financial marketing era. However, several problems remain.
Some commercial banks—especially state-owned ones—do not place high value
to the importance of marketing. The marketing departments in those banks
have very limited influence. Many state-owned commercial banks have large
customer resources and solid relationships with state-owned enterprises (Heng)
whose brands are already well known. Even without a marketing department,
these banks can still receive a great amount of business. However, they
constantly ignore some essential details in their points of contact with
customers. For example, customers who go to banks not only seek to increase
the value of their funds, but to obtain intangible services as well, such as a
sense of security and personal privacy. When banks are unable to provide the
experience that their customers expect, they will lose their customers.
Some banks lack long-term marketing planning; they care more about
short-term interests and bank size. Banks set a sales target for every client
manager and compare their client managers’ sales performance to generate
competition among them. These banks seldom conduct marketing research into
their customers. Client managers care more about how many products they sold
without consider customers’ real needs. They consider less about providing
follow-on and new products based on economic situation as well as risk
preference.
Some financial products cannot meet customer needs. In recent years, many
Chinese customers have felt that some financial products are very difficult to
understand and do not actually assist them in increasing their wealth as
expected. Numerous bank products also lack innovation and banks only imitate
one another. Hence, products and services offered in the market are similar.
Banks without strong brand can easily lose customers.

5. Bank of East Asia
Incorporated in Hong Kong in 1918, the Bank of East Asia Limited (“BEA”) is the
largest independent local bank in Hong Kong. Even with more than 130
branches all over the world, Hong Kong remains BEA’s center of operation. In
1920, BEA opened its Shanghai branch in Mainland China. During World War II,
the Mao-led government forced foreign banks to leave the mainland; only BEA
was allowed to remain on the mainland, albeit on a limited scale (Bank of East
Asia Ltd. History, 2012).
BEA’s operation in Mainland China has steadily grown over the past 30 years of
economic reform. Today, BEA is recognized as one of the first foreign banks to
receive approval from the China Banking Regulatory Commission to establish a
locally incorporated bank in Mainland China (2007). BEA is also the first foreign
bank to launch Renminbi debit cards and credit cards in Mainland China. It offers
a full range of banking and financial services to customers in Mainland China,
including foreign currency savings, mortgage and consumer lending, credit
cards, online banking, syndication loans, and insurance products (BEA China,
2013).
Overseas, BEA has established branches in North America, the United Kingdom,
and Southeast Asia. BEA serves American customers through its New
York-based banking subsidiary. It has more than 220 outlets worldwide and
employs over 12,000 people (The Bank of East Asia, Limited, 2011).
BEA’s mission statement is as follows:
We at BEA strive to provide best in class financial services, always
demanding the highest standard of professionalism and integrity of
ourselves. With a commitment to quality of service, we focus on
satisfying customer needs. We aim to grow, together with our customers,
our shareholders and our colleagues (Mission Statement, 2013).
Bank of East Asia SWOT
Superior factors
There are numerous financial products available for different customers. BEA’s
services include retail banking, insurance and MPF services, investment services,
private banking, and trust and fiduciary services. Client managers help
customers choose the most suitable products based on their needs. For example,
BEA offers a variety of structured products linked to different underlying asset
classes for different risk appetites (The Bank of East Asia, Limited, 2011).

6. Customers have to take a risk appetite test before purchasing different financial
products. Client managers also recommend appropriate products to their
customers based on the test results. Likewise, customers can design their own
financial products linked to certain assets based on their preference in BEA.
China’s commercial banks also sell various kinds of financial products, but they
seldom design the products themselves. They always purchase products
directly from foreign commercial banks, which may not be suitable for their own
customers.
BEA has a well-established risk management committee. The independent
centralized risk management unit, Risk Management Division, is responsible for
monitoring the activities related to credit risk, market risk, operational risk,
liquidity risk, interest rate risk, strategic risk, legal risk, and reputation risk.
Internal auditors also perform regular audits on the business units to check their
compliance with policies and procedures. Owing to BEA’s effective risk
management ability, the bank can venture into innovation areas with higher risk
to achieve high returns. Nowadays, commercial banks in China pay more
attention to risk management (Wenlong, 2013). BEA, with its abundant
experience in controlling risk and ensuring sufficient cash flows to meet all of its
financial commitments and to capitalize on opportunities for business expansion,
has become very competitive in the Chinese financial sector.
BEA has profound knowledge of banking expertise in both China and overseas.
Along with the steady economic growth of China, Chinese customers have a
burgeoning demand for foreign currency investments. BEA has introduced a
number of offshore foreign currency-denominated fixed income funds.
Furthermore, the bank has a list of tradable currency pairs available to corporate
customers making different currency-linked deposits. After noticing a growing
interest in foreign equity trades, BEA launched a night desk service for foreign
equity trading in mid-2011 (The Bank of East Asia, Limited, 2011). Extending
service hours to the close of the US market through the night desk has been well
received by customers. Chinese commercial banks are also attempting to extend
their foreign-currency-related services. However, due to historical reasons, the
services of Chinese commercial banks remain in the beginning phase and the
banks still lack experience. Moreover, BEA’s foreign equity trade services are
even more superior than those of other foreign commercial banks in China. BEA
operates one of the most extensive branch networks of any foreign bank on the
mainland because it knows the China market very well.
BEA has sufficient human resources support. Most client managers have at least
a bachelor degree related to banking knowledge. BEA regularly holds lectures to
equip its client managers with the latest global economics information and
important knowledge about different financial products. The entire BEA team is
sensitive to customer needs. Under the uncertainty in global financial markets,

7. customers are now more cautious in investing and prefer to hold more assets in
cash equivalents than in past years (Private Banking prefers break even product,
2012). To comply with their customers’ preference, BEA's Private Banking
Department has selected industries and stocks with lower volatility.
BEA pays attention to all points of contact and long-term relationship with
customers. Besides providing customers with the best client managers, BEA also
cares about offering intangible services. BEA provides a well-decorated private
room where its client managers can meet with their customers. They exert effort
to make customers feel welcome and at home. To assist their customers in
realizing their lifetime goals, client managers in BEA also design long-term
investment plans for the customers based on the customers’ perspective, for
example, “Children Education Plan” and “Immigration Plan.” In 2011, BEA was
honored for providing the “Best Customer Services” in the Shanghai banking
industry (The Bank of East Asia, Limited, 2011). Many client managers in some
Chinese commercial banks work as sale managers. They know little about the
financial products and all they aim for is to sell as many products as possible.
Hence, they introduce the products to customers without considering their
needs.
There are various innovations in the products offered by BEA. Its online banking
service, for instance, has several unique features. BEA’s online banking system
has won the “Best Innovation for Online Banking Prize,” and has a very
customer-friendly interface. Customers can easily comprehend the system’s
different functions. In contrast, some state-owned commercial banks’ online
service procedures are complicated. Customers have to provide identification
information several times to realize a single function.
There are some other innovations offered by the BEA related to its financial
services. In recent years, parking lots have become more and more expensive.
BEA then launched a new mortgage lending service for parking lots which
increased its customer resources. BEA is also the first foreign bank that was
issued its new premium credit with IC chip in China. In 2011, the BEA iPhone
application was made available online. The application can introduce new
customers to new and enhanced features including "Stock Watch & Fast Trade"
and MPF functions (The Bank of East Asia, Limited, 2011).
Weak factors
The Chinese people are not familiar with BEA. China’s financial market opened
only a few years ago, and thus foreign commercial banks have just entered the
market. Many Chinese customers have already accepted the services of Chinese
commercial banks, and it may not be easy for them to switch to another bank.
Although BEA was founded in Hong Kong, many Chinese people in the Mainland

8. have not heard of BEA. A large number of people in the Mainland also believe
that BEA is a Japanese bank. Compared to Chinese commercial banks, BEA has
less outlets and branches on the Mainland, which may limit its aim of increasing
its customer resources.
Marketing is not highly valued in the BEA Beijing branch. Some marketers in the
Beijing branch still understand marketing as advertising and pushing sales. In
the Beijing branch, the Marketing Department creates marketing strategies
based in intuition, not on an analysis of their customers’ needs. BEA has less
interaction with its customers, who have very few ways to give their feedback to
the banks. In addition, there is less cooperation among the different
departments. Thus, customers may receive different services with different
standards, which may cause negative effect for BEA in building its brand.
Each client manager has too much customer resources on hand. BEA allows its
client managers to compete with one another in order to push sales and attract
higher deposits. Even though client managers desire to keep long-term
relationship with its customers, this practice results in client managers having
less energy to design the best long-term investment plan for different
customers, especially for BEA’s main target customers. Moreover, client
managers are the only people who know their customers’ detailed information.
The BEA Marketing Department in Beijing does not use Customer Relationship
Management (CRM) software to analyze customer information. Thus, the bank
encounters difficulties with regard to offering the best service to meet Beijing
customer needs.
Opportunity factors
After China opened its banking market, both the investment market and
housing mortgage of residents boomed. BEA not only knows the Chinese people
very well, but has extensive experience in operating commercial banks as well.
These factors make BEA very competitive in China’s banking market.
Along with China’s economic growth, the Chinese have become wealthier. In
2012, Chinese private assets that could be used as investments amounted to
more than $11,406 billion a 14% increase in asset value compared to that in
2011. Families with more than $1 million of investment assets are concentrated
in the southeastern part of China. In Beijing, more than 100,000 families have
investment assets of more than $1 million. These families prefer to invest in
financial products with fixed returns. In addition, trust funds are becoming more
and more popular recent years (China Wealth Report, 2013). BEA’s target
customers are people with high income, a target market that is growing. Thus,
the bank can design additional products to fulfill their customers’ needs.

9. Threat factors
To protect the businesses of Chinese commercial banks, the banking market in
China was not fully opened, and several government policies still limit the
activities of foreign commercial banks in China. The different investment
philosophy has also made some financial products unfit for the Chinese market.
Moreover, the lack of sufficient branches has limited the development of foreign
banks. For example, BEA was the first foreign bank to issue its own credit card
in China’s banking market. However, compared to Chinese commercial banks,
the number of BEA’s credit card holders is very few (Foreign Banks in China,
2012). From the perspective of Chinese customers, foreign commercial banks
have very expensive service fees. Owing to this misconception, many customers
in China are wary of choosing financial products from foreign commercial banks.
Suggestion for their Marketing
Build a Customer Relationship Management (CRM) framework
BEA’s Beijing branch can build a CRM data warehouse which all client managers
and departments can access to retrieve their customers’ detailed information.
In addition, different department should have more collaboration. In this way,
the entire bank can understand its customers better. When customers go to
different departments or transact with different client managers for different
services, the bank can easily assist their customers in confirming their account
information and help them to realize different financial activities by referring to
the customers’ detailed information. Thus, the bank can fulfill the customers’
requirements more effectively.
The application of CRM in commercial banks can also help the bank to develop a
market-oriented strategy for the local market as well as to innovate in products
and services to meet customers’ needs, especially Beijing customers’ needs.
The application can help the BEA Beijing branch to make customer-centered
strategies and help the bank to increase customer loyalty and contributions.
Increase the interaction with customers
Although BEA has tried different approaches to build its brand image, many of its
Chinese customers are still not very familiar with the brand. BEA can try
increasing its interaction with customers to reinforce its brand. Using social
media is an effective way to interact with its customers and promote its
businesses. Microblogging is currently the most influential social media in China.

10. BEA can open an official account on its social media website to post the latest
news or activities. It can answer customers’ questions and “listen” to customers’
ideas to learn more about them. For instance, BEA organizes social activities
such as wine tasting for its loyal customers. The bank can post photographs of
the activities on its social media website to interact with customers.
In addition, BEA can improve the interaction function of its smartphone
applications. For example, the bank can design a chat area in the application
allowing customers to upload their needs to the customer service center and
where an operator can answer customer questions anywhere and anytime. The
bank can also use the application to introduce new products and/or make
upgrades based on their customers’ investment preferences and personal
information. In this way, the customers will feel that the bank does not push
information their way, but rather provides only the information the customers
need. This could also help client managers save energy to design follow-up plans
for different customers. The client managers could concentrate more on banks’
target customers.
Provide a new lifestyle for customers
In recent years, the wealthy Chinese have become increasingly careful about
their quality of life (China Wealth Report, 2013). BEA can attempt to provide a
new lifestyle for its customers to improve their quality of life. For example, it can
provide basic financial services and various social activities for its loyal
customers to help them enjoy their life and increase their happiness. Some
wealthy people in Beijing spend too much time for work and seldom have time
to spend with their families. BEA can organize activities such as “travelling with
the family” to help wealthy people enjoy their beautiful lives. These activities
can enable BEA to establish a good relationship with its customers. The
activities can also bring business opportunities for BEA. The bank can, for
example, collaborate with hotel and travel agencies.

11. Works Cited
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http://finance.sina.com.cn/news/1999-12-21/15728.html
China Merchant Banks. (2011/6/10/). Date: 2013/1/16/，cite: Hexun Bank:
http://bank.hexun.com/2011-06-10/130420622.html
Bank of East Asia Ltd. History. (2012). Date: 2013/1/15/，cite: Funding Universe:
http://www.fundinguniverse.com/company-histories/bank-of-east-asia-ltd-history/
China Financial Develpoment History. (2012/5/8/). Date: 2013/1/16/，cite:
http://wenku.baidu.com/view/15f4be44336c1eb91a375d88.html
Foreign Banks in China. (2012/12/15/). Date: 2013/1/20/，cite: Stockstar:
http://finance.stockstar.com/MS2012121500000421.shtml
Private Banking prefers break even product. (2012/10/22/). Date: 2013/1/10/，cite: Howbuy:
http://www.howbuy.com/news/2012-10-22/1718524.html
BEA China. (2013). Date: 2013/1/15/，cite: Bank of East Asia:
http://eng.hkbea.com.cn/dyxx/dyjj/dyzg/index.shtml
China Wealth Report. (2013/1/). ChinaEcnomicWeekly.
Mission Statement. (2013). Date: 2013/1/15/，cite: Bank of East Asia:
http://eng.hkbea.com.cn/dyxx/dyjj/smxy/index.shtml
HengWei. Study on State-Owned Commerical Banks' Marketing Strategies. Date: 2013/1/17/，cite:
http://www.seiofbluemountain.com/upload/product/200911/2007qyczhy2z1a8.pdf
The Bank of East Asia, Limited. (2011). Annual Report 2011.
WenlongLou. (2013/2/2/). Commercial Banks Transformation. Date: 2013/2/5/，cite: Xihua:
http://news.xinhuanet.com/fortune/2013-02/02/c_124312813.htm