Marketing at vanguard

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Problem Definition

Senior executives at Vanguard are evaluating their marketing strategy. In particular, they are looking at their approach to market segmentation, the organization of the marketing function, and the emphasis placed on marketing metrics in the corporate dashboard in light of an economic and stock market downturn.

Situation Assessment


· Low cost high value; extremely low advertising spending and no large sales force.

· Customer focused

· High morale; Low employee turnover; high productivity

· Management involvement

· Horizontal organizational structure

· Use of Six Sigma methodologies to cut expenses, gain efficiencies

· Excellent use of benchmarking

· Centralized customer relationship management

· Use
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How can Vanguard be expected to compete in face of other challenges such as institutional and regulatory hurdles as well as smaller populations overseas?

Marketing segmentation was a competency that has worked for Vanguard in the past. However, customers may resent excessive categorization based on perceived investing habits or income extrapolations by Vanguard. The customers may view 'Vanguard' as a Big Brother who pries into his or her personal lifestyle by monitoring their investment trends and then tailoring an investment plan for them with those assumptions.

If you examine the potential target market sizing, the United States presents a wide array of opportunities with its varied ethnic groups. Companies such as Metlife and Citibank have done well by tapping into those markets and creating an investment niche. Rather than market segmentation based on investment

habits, age or income; it may be advantageous for Vanguard to pursue these markets after conducting market tests or investment studies.

Even if Vanguard decided to 'aggressively' target certain niche targets in its sales and marketing campaign, the potential dividends reaped from doing so are far expected to outweigh the costs as it currently spends about 20 cents out of every $10,000 invested to drum up new business which is well below industry norms. Certainly newspaper advertisements as those

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