Which marketing strategy now for Northern Rock?
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So Northern Rock has been nationalised; taken into public ownership to run at “arms length” by the Government. The initial focus of NR’s new management team will be on reducing costs. Significant redundancies are expected, though this will largely depend on the decisions taken by NR about the size of the NR branch network.
In a large financial institution like NR, a potential cost casualty will be the marketing budget. In 2007, NR spent over £6m on advertising. NR is also the main sponsor of Newcastle United and Newcastle Falcons (rugby union). Will this sponsorship survive new ownership?
Visit the NR website and the marketing message is clear. It is business as usual. There has been a change of ownership, but NR will continue to offer its product range of savings, mortgages and loans.
The website front page gives a clue as to where the marketing strategy will focus in the short-term. Website visitors are first presented with an attractive fixed-rate savings offer. Existing savers are offered a loyalty bonus. The message is clear. Your savings are safe with us; we’re 100% backed by the Government. Invest your cash with us.
NR’s problems were partly caused by irresponsible lending - no suggestion from the website that lending is a major focus now!
Look out for the various promotional materials that NR will use over the next few months. The business has a new management team that will move quickly to reduce costs and refocus the business on safe, sensible growth. it could be a great case study - followed by a flotation or trade sale a year or two down the line.
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