All three questions in this section are compulsory and relate to the following short case. Read the case and answer the following questions.

Case Study

Since 2010, Queensland-based regional bank REGBANK has earn a solid reputation as a welcoming, receptive, and accountable regional community bank. The bank serves consumers, small to medium sized (SME) businesses, and some larger firms, almost exclusively in their home state. It offers bespoke services through a growing number of branches, with a focus on regional locations. Many of these locations lost traditional branch services (from larger national banks) as these larger banks closed their previous physical branches. REGBANK has filled this important void.

In addition to this brick and mortar branch offering, REGBANK is also embracing technology, as part of the bank's adoption of a human-digital strategy, which aims to align the bank with the needs and preferences of targeted customer segments. A large part of the human-digital strategy is the development and rollout of its first app, called the Best Financial Friend (BFF) app, where customers can text or video chat with their personal banker and complete all kinds of transactions this way. REGBANK management believe this level of service unrivalled in the regional banking sector will bring new customers to the bank.

During the testing and pilot phase of the BFF app, REGBANK was ready for 1,000 downloads. Instead, demand was so high it had to cap the first part of the pilot at 1,700 customers. Through testing, the bank established that 99% of the pilot participants preferred to text their chosen banker. It also found that the banks staff were able to build rapport with customers without in-person conversations.

On the back of this successful testing phase, and the early rollout of the human-digital strategy, the marketing team at REGBANK is now looking to creating separate marketing mixes for each of the banks customer segments ie. earlier in the case it was stated that the bank serves consumers, small to medium sized (SME) businesses, and some larger firms.

Question A.1 (7 marks)

Why do you think the marketing team at REGBANK is creating separate marketing mixes for each of the banks customer segments?

Question A.2 (7 marks)

Other than simply segmenting the banks two main customer segments as consumers and business, what additional categories of segmentation variables do you think REGBANK should use to improve the individual marketing mixes for each of the banks customer segments?

Question A.3 (6 marks)

Do you agree with REGBANKs decision to use a market test before launching its BFF app in the wider marketplace? Explain your answer.