First, the document presents a case study on First Direct, a bank that innovated banking channels by eliminating branches and providing personal response to calls 24/7. Second, it discusses questions around why innovation in marketing channels is difficult and what gave First Direct differentiation at launch. Third, it provides context on First Direct's history and current success with over 1.16 million customers and high usage of online and mobile banking.

1. First Direct Case Study
Presented by
Danish N khan

2. Outline
• Key points of the Case Study
• Questions for Discussion
• Relevant Theory
• First Direct
• Our Views
• Questions?
• http://www.youtube.com/watch?v=HFma_Viuif8&feature=player_embedded

3. Case study: First Direct’s Innovative
Banking Channels
• Traditional Banking Structure and Channels
• Branches being the only point of contact
• Establishment of First Direct in 1989
• No Branches!!
• Personal response to calls 24x7x365
• Products offered are the same as competitors’
• Target Customers – Financially aware and independent
income earners
• Birth of a new breed of marketing channel – Telephone,
Online and Mobile Banking

4. Questions for Discussion
1. Why is innovation in the marketing channels generally
difficult to achieve?
2. Why was First Direct different from its rivals? What gave it
differentiation when it first launched?
3. Why might some potential customers of First Direct have
reservations about the innovative nature of the service?

8. Producer
Retailers
Wholesalers
Consumers
Conventional Marketing Channel
Creating
Utility
Facilitating
Exchange
Efficiencies
Alleviating
Discrepancies
Providing
Customer
Service
Standardising
Transactions

9. Factors Influencing Distribution Channels
• Organisational Objectives and Resources
• Market Characteristics
• Product Attributes
• Buying Behaviour
• Environmental Forces

10. 1. Why is innovation in marketing channels generally difficult to achieve?
Producer’s
Perspective

11. Competitor’s
Perspective
1. Why is innovation in marketing channels generally difficult to achieve?

12. Producer
Consumers
Providing
Customer
Service
First Direct’s Marketing Channel:
Direct Marketing

13. History
• First Direct was formed on 1st October, 1989 by Midland Bank
• Became a part of HSBC after it acquired Midland Bank
• Within five years of existence bank was serving to more than 500,000
customers
• The bank launched Internet Banking in 1998 and went on to launched
Mobile Banking a year later
Current Situation
• First Direct has 1.16mn customers, 0.9mn of them use Internet
Banking and 0.4mn customers use SMS Message Banking
• 44% of First Direct’s sales is via e-channels
• First Direct handles around 157,760 calls every week including 29,000
calls a day outside working hours