Customer perceived benefits of Barclays bank

Customer perceived value, can be regarded as the opinion that a customer has or has formed of a particular product and how it is of value to him. Now value can have many different meanings to it, for example the price of the product in the market, it’s quality etc. The value also depends on the ability of the product to satisfy the needs of the customer.

Simply put, the customer perceived value of any product is the consumer’s overall assessment of the utility or use of a product based on perceptions of what the customer receives and what he is giving to get the desired service or product.

This concept can also be explained with the help of the following diagram:

Customer perceived value= Perceived Benefits


Perceived Sacrifice


Perceived benefits are the attributes of the service being received and the customer perceived quality and price of the product.

Perceived sacrifice are the customer costs involved in purchasing, such as time, travel etc.

Introduction to the organisation:

For the purpose of this assignment, the company that has been selected is BARCLAYS PLC; the following text would give a brief company profile followed by the identification of the customer perceived value for the organisation by the use of the Customer Value Hierarchy Model.

Company profile:

Barclays is one of the world’s leading financial institutions headquartered at 1 Churchill Place, London. It is a 300 year old corporation that became a major financial services provider engaged in retail and commercial banking, wealth management, credit cards, investment banking and management services provider for big global equity firms. It has an extensive international presence in Europe, Africa, Asia and off lately has started to expand in the United States market as well. It operates in more than 50 countries and employs more than 145,000 people worldwide. It moves, lends, protects and invests money for than 38 million customers and clients worldwide.

Barclays has two business clusters: Global Retail Banking and Corporate and Investment Banking and Wealth Management- both compromising world-class business and brands.

There are two other major areas where Barclays operates its business; one being the Group Centre and Absa, the Group Centre being their head office and support functions operation. The Absa Group is one of South Africa’s largest financial services businesses.

Before we take a look at the customer perceived value of the Barclays brand, the project would like to discuss the Customer Value Hierarchy Model, and then try to apply them to the customers of Barclays.

Customer Value Hierarchy Model:


Customer’s goal and purpose


Desired consequences in use situation


Desired products/services attribute and performances

The Customer Value Model consists of three layers, namely the Attribute layer, the Consequence Layer and the Objectives layer. The objective layer includes the ultimate motivations of customers, the consequence layer represents the customer experience desired by the person and finally the attribute layer specifies what actually are the needs of the customer.

From the bottom of the customer value hierarchy, customers would always firstly consider the attributes and availability of products.

At the second layer, customers begin to make expectations according to the attributes.

At the top layer, customers form expectations about the realization of their aim.

How do Barclay’s customers perceive their bank? That’s the question that this assignment would like to answer by giving the objectives, consequences and attributes desired by the customers, followed by a customer review.


Easy personal banking

Safety of the account at all times

Saving account options

Availability of loans at a good interest rate

Online banking to keep a record of their account details at all time

Ability to invest

Good mortgage options

Insurance options

Credit card facilities

Assistance while travelling


Easy accessibility to the account

Peace of mind as the customer is aware that the account details are secure and safe

More control over their own finances

The customer does not require to keep much cash with them at all times because of the debit cards

Saving for the rainy day

A secure and safe environment

Future is taken care off

Can start a business with the help of financial banking

More purchasing power


Pin- sentry device

Debit card

Online banking facilities which enable the customers to check account balances, make transfers, setup standing orders and direct debits.





Home insurance

Different types of savings accounts

Different types of current accounts

Overdraft facility


Car insurance

Travel services

Looking at the above attributes, consequences and objectives list one can identify the value of the brand as perceived by the customer. The brand Barclays is a very widely recognized name and almost every person in the UK is a big fan, of course with some exceptions which are bound to be there, the customers on a general note feel very happy with the huge array of services and products made available by the bank for its customers and are satisfied with the huge network of customer service centres spread all across the world providing 24/7 customer service, also the safe and secure online banking facility provided by Barclays is very user friendly and easy to use, letting the customers always keep a track of their money. So it’s safe to say that Barclays as a bank not only just for people but also for small businesses and big equity firms is a financial institution of repute and is trusted and respected by the people. Just to give a basic idea about how really people feel about the products and services offered by Barclays this project would like to include a customer review, which is as follow:

“Barclay has never let me down. I subsequently withdraw and deposit money with ease and have it connected to PayPal. It is extremely easy to use, I have had no login issues and their customer service cleared everything up to me. My favourite part is that unlike most banking companies; you don’t have to pay monthly fees. This really pleased me.”


Critically evaluate the existing value proposition of the product/division/ company you have chosen. Compare and contrast the value proposition with that of the leading competitor in your sector.

This part of the project would evaluate the value proposition or the customer value proposition of Barclays and contrast it with the customer value proposition of HSBC. But before we proceed to comparing and contrasting the value propositions of both the brands we first need to understand, what a customer value proposition really is? This is the question this project would answer first and then proceed on to discuss the variations in the value propositions of both the brands.

Customer Value Proposition:

In the subject of marketing, the customer value proposition consists of the sum total of benefits which a provider offers or promises a potential consumer which he will receive in return for the customer’s associated payment (or any other value transfer). A customer value proposition is a business or marketing statement that would describe why a customer should make use of the services and products being offered by the organisation. It is targeted towards potential consumers, rather than at other constituent groups such as suppliers, employees or partners.

It can also be looked from a viewpoint of a clearly defined statement, which is designed to convince the customers that this one particular product or service will add more value or better solve a problem than the other competitors in the same industry.

Why are customer value propositions so important? This question is of utmost importance to any business, because it is only these statements that give the customer an expectation of a desired service, it provides the consumers with a convincing reason to buy the desired good and also helps differentiate the product from the other services provided by the other competitors in the same industry. They help in gaining customer’s attention and if the customer value proposition is strong, and is able to gain the approval of the customer then it helps in building faster and more profitable sales and in increasing the market share of the organisation. Understanding of the customer needs is very vital as this would ensure the promotion and creation of a successful brand.

The word brand, is the perception of a service or product that is designed to stay in the minds of the targeted consumers. It is a very important and a cumbersome task to build a strong and positive brand in the minds of your customers, but the firms which are able to accomplish this task are the ones which rise to the top.

Types of Customer Value Propositions:

All benefits:

This is a list compilation of all the benefits of the products and services offered to the customers by the organisation. This approach requires the least market knowledge about customers and competitors and thus does not provide a good base when seen from a marketing perspective.

Favourable Points of Difference:

This type of value proposition explicitly recognizes the fact that the customer has different alternatives and it then focuses on how to differentiate one product or service from another. A product or service may have several points of difference, confusing the customer and thus complicating the customer’s understanding of the product which would offer him more value. Without a comprehensive understanding of the customer’s requirements and preferences, the suppliers might stress points of difference that relatively deliver little value to the targeted consumers.

Resonating Focus:

This approach is used by managers who directly deal with a supplier who fully grasps the critical issue in the product- consumer cycle and who can deliver a customer value proposition that’s simple yet powerfully captivating. The value proposition offered is superior in the few attributes that are of the most importance to the customers which convey a message to the targeted audience, that here is an organisation which is communicating a sophisticated understanding of the customer’s business priorities.

When talking about the value proposition of a financial institution we have to take into account the current market conditions and then arrive at the capital and funding strategy of the bank which in itself is a sort of value proposition available for the customers to have a look at and, then these consumers can decide for themselves whether they do need to associate themselves with the financial institution.

Analysis of value proposition of Barclays:

Capital Strategy:

Barclay’s capital management activities will attempt to maximise shareholders’ value by optimising the level and mix of its capital resources.

Barclay’s ability to operate as a bank is directly dependent upon the maintenance of adequate capital resources.

Barclays works according to a centralised capital management model considering regulatory and economic capital.

The Group’s capital management objectives are to:

Maintaining the sufficient capital required to meet minimum regulatory capital requirements set by the UK FSA.

Maintaining sufficient capital resources which can support the Barclays risk appetite and fulfil the economic capital requirements.

Support the bank’s credit rating

Ensure that the locally regulated subsidiaries can meet their minimum capital requirements without having to borrow from other financial firms.

Allocation of capital to support the strategic objectives set by Barclays, including optimum returns on economic and regulatory capital.

Funding strategy:

Barclays will manage the funding position to comply with the regulatory requirements prescribed by the UK FSA .Barclays operates on a centralised governance and control process that covers all of its liquidity risk and management activities.

Funding Structure

Global Retail and Commercial Banking, Barclays Wealth and Head Office Functions are to be self-funded through customer deposits and Barclays equity and other long-term capital. The Barclays Capital and Absa businesses will be funded through the wholesale secured and unsecured funding markets.

Major currency payment flows and payment system collateral are going to be monitored and managed, so it can be ensure that at all times there is sufficient collateral to make payments.

Day to day funding

Day to day funding will be managed through limits on wholesale and secured borrowings. This will ensure that on any day and over any period there is only a limited amount of refinancing requirement.

In addition to cash flow management, Barclays would also monitor the term mismatches between assets and liabilities, as well as the level and type of undrawn lending commitments, the usage of overdraft facilities and the impact of contingent liabilities such as standby letters of credit and guarantees.

Additional value propositions specific to a persona customer and not the global market:

Personal banking made easy by the debit card that is an internationally valid card which has many advantages like international assistance anytime anywhere, guaranteed transactions etc.

Wide range of current accounts available to suit different customer needs.(mobile phone insurance, car breakdown cover etc.)

Availability of loans at competitive rates

Online facilities giving easy accessibility to customer funds.

24/7 customer service

Wide array of savings and investment options

Credit card facilities

Insurance facilities(home, motor and life insurance)

Mortgage facilities(buying, building and renovating of property)

To understand the customer value proposition of Barclays and then to contrast it with the value proposition of HSBC, this project is going to use the SWOT analysis which is preceded by the mission statements and the vision statements of both Barclays and HSBC, thus giving us a better idea of what the customer expects from the brand and what are the promises being made by these institutions to potential and existing consumers.

Mission Statement:

This is a short, formal, written statement of the purpose of the company. It guides the actions of the company, benchmarks its goals, provides a sense of direction and guides in decision making. It provides a framework within which the strategies of the company are formulated.

Vision Statement:

This can be defined as statement that captures the long term picture of what the organisation wants to become. It gives a broad and an aspirational image of the future that an organisation wants to achieve. It is often inspirational and memorable.

Mission Statement of Barclays:

“To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank.”

Vision Statement of Barclays:

“We have a clear view of where growth will come from over the coming years. While there will be significant growth opportunities in the UK, we see many more internationally. Barclays will become a leading global universal bank.”

Mission Statement of HSBC:

“We aspire to be one of the world’s great specialist banking groups, driven by commitment to our core philosophies and values.”

Vision Statement of HSBC:

“We envision enabling HSBC to achieve its strategic objectives, driving excellence in our delivery through partnership with our customers and associates.”

SWOT Analysis of Barclays:


Extensive network in Europe providing business sustenance.

Focus on cost efficiencies which ensure relatively higher profitability.

Ability to lend amidst reduced size of the balance sheet.

Associated with innovation, brought out the first credit card in 1966, most recently the OnePulse card combining Oyster, credit cashless functions for its customers.

Opening of several new branches, along with a massive refurbishment programme.


Strained trading income impacting the revenue diversity.

Barclays Capital credit market exposures are impacting the financial position and performance.

Large bonuses for the Directors have attracted unwanted attention.

Expansion plans in the Asian market thwarted, when Barclays were outbid for ABN Amro in 2006.


Barclays was keen to acquire some of Lehman’s assets prior to its collapse but however, after the collapse, they have been able to negotiate a better deal with liquidators which also allowed them to be very selective in which parts of the business they actually wanted to acquire.

The bank’s strategy to offer a full portfolio of services worldwide, provides a wide range of cross-selling opportunities.

Asia continues to be an opportunity for expansion, and operations are being set up in a number of locations.

Welfare provision has decreased in many countries because of the cost to governments, and Barclays sees self-provision as an increasing trend that it can utilise.

The court recently found that Barclays banking charges, which had been challenged legally, were enforceable, thus repayment is not necessary and charges can continue to be enforced.

Positive outlook for buy to let market may bring business volumes.

Buoyant secured personal loans market in the UK could help the business.


Bleak outlook for the UK economy.

Regulatory fines can compress margins and financial position.

Increase in online fraud.

Barclays has been accused of loss-making investments associated with the sub-prime market from its accounts to those of other investors, and there is a risk it may be sued.

While offering a wide range of services provides opportunities, there is also the threat that customers may prefer to go to suppliers who present a more specialised approach.

Barclays acquired a reputation for closing branches because of a high incidence of this in 2000, and competitors have been able to position themselves as more consumer-friendly through a strategy of keeping branches open.

The Asia expansion is seen as risky given that Barclays are in a less strong position than banking industry leaders regarding capitalisation, and this may detract investors.

SWOT Analysis of HSBC:


The bank is well capitalised thus enabling it to perform relatively well against other banks in the recent economic conditions.

Going forward, the bank is unlikely to borrow from the UK government because of the huge market capitalization; this enables it to retain more autonomy.

HSBC has a strong presence in emerging markets, placing it in a good position to take advantage of future growth in those economies.

HSBC’s global presence in Europe, Asia and South America spreads the risk and offers significant economies of scale.

Rebranding relatively recently (1999), the HSBC bank has become well-established and is considered of great value within the industry circles.


HSBC strongly believes in investing in the small business sector, but the current economic situation has led to increased risks, which could potentially compromise the activity levels in the area of its operation.

HSBC’s involvement with sub-prime markets in the US has forced it to write off large figures lent to high-risk borrowers.

Despite cuts in the UK interest rate, HSBC has been increasing its mortgage rates. This can be perceived negatively by the borrowers and potential borrowers, which may add pressure to an already depressed housing market and can ultimately lead to more defaulting as borrowers would struggle with higher repayments.

A redundancy programme which was announced recently can affect morale among staff, leading to decreased productivity and loyalty.

HSBC’s branding emphasises its global presence, and this can be seen as negatively by some consumers in its implication of homogenisation and lack of personalisation.


HSBC’s high levels of market capitalisation place the bank, in a strong position which helps it to acquire assets.

Banks which find the trading conditions particularly difficult at present could be available at low costs.

HSBC has adequate capital which it can use to purchase stronger banks such as Bank Ekonomi in Indonesia, in which it has purchased a stake to continue its Asian expansion despite challenging economic times.

HSBC’s strong position presents the opportunity to outperform other banking competitors during the economic downturn which allows it to build a reputation of being one of the safer banks for depositors which in turn helps to increase resources for lending.

Negative press coverage of competitors such as HBOS can encourage customers to choose HSBC instead.


Decreased trust in the financial system overall, including HSBC due to financial losses suffered by investors may be a reason for them to invest elsewhere.

Financial losses which has affected the banking industry and investors on a global scale has resulted in less credit being available for customers. In the UK this coupled with increases in living cost has resulted in less money being saved.

The slump property market has led to a rise in numbers of homeowners with negative equity. If a property is worth less than what it was borrowed to finance its purchase, there is less likelihood that the bank will recoup all its losses if owners default.

Claims have been made against HSBC, about the bank understating losses resulting from US sub-prime markets, and this has led to undermining confidence in the bank by the customers.


Barclays is currently taking a conservative approach due to the recession. However, the downturn has provided the bank with many opportunities for consolidation. Also, with the BRIC and East Asian markets rebounding fast this region looks to be a source of potential revenues and provides opportunities for increasing operations. With the United Kingdom and the Americas looking at a slow and prolonged phase of recovery, Barclays will need to adopt a policy of looking east when it comes to operations.

The threats and problems that Barclays may face in the future will be the sustained economic situation being experienced in the United Kingdom, Europe and America which will lead to uncertainty within the retail consumer market and could result in shortage of availability of credit. This in turn makes it even more important for the Barclay’s to drive its overall corporate profitability and margin by seeking to offset the shortfalls in the UK domestic market with advances in emerging markets. All companies, like Barclays, are being forced to re-examine in particular the retail aspects of their operations seeking to remain competitive on the high street and also making cuts wherever necessary. In this current financial climate, banks are unwilling to finance each other and with the UK market on the verge of a projected severe recession, all of the retailing factors will influence Barclays competitiveness and it would depend largely on how the Bank of England and the Treasury seek to regenerate and reinforce the flagging confidence of the stock markets.

HSBC will concentrate on the strategic and prioritized areas of its worldwide operation with the further emphasis on HR management strategies and technologically-advanced applications within the group to keep a firm lead in the financial markets. HSBC’s conservative approach to banking, staying focused on keeping its capital base strong and liquid balance sheet have prevented its failure. Executing the HSBC’s strategy entails improving intra-group linkages by joining up the businesses and functions to more effectively create additional value. The HSBC brand and global networks are going to be leveraged to reach new customers and offer more services to the existing ones. Efficiency will be enhanced by taking the full advantage of local, regional and global economies. Appropriate objectives and incentives will be adopted to encourage the employees to be fully engaged in delivering the strategy.


In light of your analysis of your existing value proposition and what you have learnt in this module produce,

a new value proposition that will match the value criteria of your customers, and

a plan to implement the value proposition externally and internally

To create a new value proposition that would be acceptable to the customers of Barclays, all the weaknesses that the current business structure has would have to be removed and a new and better business plan would have to be drafted by identifying the opportunities and removing the weaknesses.

A New Value Proposition:

The trading income should be relaxed so that it does not impact the revenue diversity.

Capital bonuses should be distributed in accordance with the FSA and the bad practice of the directors receiving huge bonuses should be curtailed.

Barclay’s should provide the consumers with a full portfolio of services worldwide, rather than just concentrating in the UK, this move could enable cross-selling opportunities.

Barclay’s should look towards expanding in the world’s booming economies like India, China, Indonesia etc. so that these economies could provide Barclays with the market opportunities it is looking for, thus increasing the market capitalization. This project would propose that Barclays should have an aggressive expansion policy in the Asian market.

Barclay’s needs to invest in buy to let market, which would in turn bring business volumes.

Due to the economic crisis in the markets, Barclays needs to cut down its interest rates and mortgage rates, so as to become a people’s bank and thus raising the brand image.


To implement the new value proposition described above the project, will identify the key relationship-marketing issue, followed by refocusing of marketing effort: moving activities away from a marketing mix that creates a series of one-off transactions, to manage a complex network of relationships involved with the production of the whole consumer offering.


Marketing audit will be carried out so as to map out a plan that will be of most advantage to the customers and will be conducted in stages, namely at the beginning, the middle and at the end.

Marketing analysis in terms of the strengths, weakness, threats and opportunities.

A review must be undertaken to understand the new value propositions outlined above in the light of internal marketing.

A new strategy development process concentrating on differentiation, cost leadership and adequate response systems would have to be created.

Action programmes would have to be designed by managers so as to determine the most appropriate course to take in tackling the weakness of the organisation, with a determination of the like;ly costs which would be incurred.

The implementation plan would have to be monitored and controlled by keeping a track of staff performance, evaluation and appraisal schemes.

To ensure effective, appropriate and accurate results, basis for market segmentation would have to be identified, based on extensive market research.

Marketing orientation is going to be very important, the new value propositions must be made clear to all the employees and clearly defined individual goals should be set down to enable the employees to see their own contribution in achieving the organisation’s objectives.

Externally implementing the plan is going to be very important, and can be done by the use of media, electronic, print and sponsorships.

The new value propositions can be made available in the form of television advertisements, available for all the people to see.

The Barclays website can act as a powerful medium on which the new value propositions can be put up and made available. It should be designed in an effective and detailed manner so that the customers are aware about all the new services available to them.

Print media is another powerful form by which the new policies can be made available for the masses.

Barclay’s is a big sponsor for many big international events and meets and can use that as an active platform to educate the consumers about the new change in the policy structure.

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