Business Strategy

ING is an international banking and insurance company which uses the "business to consumer" type of e-commerce. When they created their company and business strategy, they decided to run an experiment communicating with customers by phone, mail and the internet. ING Direct uses three out of the four generic business strategies. It is global, low cost, and differentiated. It is an online global financial service. It is low cost because it is only used online. ING does not have a physical bank, so they save money because no staff is needed and no rent needs to be paid. The reason is it differentiated is because there is no other online bank that is online only ING is mainly an Internet based company, they have created a high interest rate banking environment to attract a larger customer base.

Marketing Mixes

ING takes advantage of several effective marketing mixes. The company does not have traditional branches as with other banking institutions, with no branch or agent network to sell its products, ING Direct is largely reliant on advertising to win customers. As a result, the bank is a huge advertiser throughout the world; its web site and related advertising are represented by a memorable image: a round orange ball. In addition to a strong array of print, billboard, and television advertising, ING DIRECT positions itself prominently in various community-specific events. Throughout 2006, the ING DIRECT Hot Air Balloon participated in many family festivals and balloon events in various places across the country. Recent community events have included sponsorship in the New York City Marathon, November 6, 2005. The substantial advertising budget has paid off with high brand awareness. According to INGs’ figures, more than 90 percent of adults in Italy and Spain are aware of ING Direct, as are 85 percent of Australians and three quarters of Germans, Canadians and Americans—up from nearly zero awareness in most countries before ING Direct launched. ING has become the most successful direct bank in the world, with 17million customers in nine countries. Study by Forrester Research (cues.org/forrester/)http://cues.org/forrester/ reveals that a simple strategy has driven ING's rapid growth.

The bank creates a differentiated proposition and attracts a lot of attention by offering a combination of: A few simple savings products. ING Direct has entered each market with a basic no-frills savings account, with no fees, minimum balance requirements or withdrawal penalties. As each operation has grown, the bank has gradually introduced other products like mortgages and investment funds, but it deliberately maintains a small product range. In each country, the bank launched with a highly competitive and typically market-leading savings rate—in some cases, double or more that was currently being offered by traditional branch banks. These rates are easy to market and catch the attention of consumers and the media. Other successful marketing strategies adopted by ING include online ads, e-mailing lists, and viral marketing. The bank relies almost entirely on the post, telephone and Internet to sell its products and serve customers. Outside Germany, where the bank is known as ING DiBa, ING Direct doesn't have any ATMs. Nor does it have a branch network to serve its customers. It does have a few cafes in major cities like Madrid, New York, Paris and Sydney that serve coffee and offer complimentary Internet access. But the sole purpose of the cafes is marketing. The cafes give the bank a high-profile physical presence and a venue for customer seminars—but customers can't perform financial transactions there.

Porter's 5 Forces

Buyer power seems to be the dominant force for ING. Customers have many choices because there are many banking institutions. However ING creates a competitive advantage by making their services more attractive for customers for example their high interest rates. They pay a 4.5% interest rate on savings accounts, while other banks pay a considerably lower percentage. ING Direct is continuing to grow and succeed.

Business Initiatives

The business initiatives that ING uses are strongly their business principles. Their business principles affect customer relationship management. ING as a company has very high principles that they abide by. In order to keep ING strong and running they have to keep their shareholders, customers, and stakeholders satisfied. To keep them satisfied they have strong beliefs such as integrity. Integrity plays a major role because it respects the rule of law and fairness. They use
this information to keep them in head of their competitors. The process is Business Intelligence. There are other principles such as aiming for above, being open and clear, respect for human rights, and respect for one another. ING relies heavily on the internet because it is their traditional way of keeping in contact with their customers. The internet is a top-line initiative because it is they way ING has developed.