MARKETING PLAN:

“BDO Unibank Inc.”

“Ginebra San Miguel, Inc.”

Submitted by:

Orea, Donnan

BSBA - 2
 EXECUTIVE SUMMARY
Abstract
Philippine society is a unique blend of diversity and homogeneity. The country has
experienced some cultural trends such as; health food/diet craze, working women,
children as consumers early in life and youth as young investors which has paved a way
to the integration of more people to the banking industry. These eventually result to the
affection of cultural enterprise, industry development, household behavior, poverty
reduction, voice and participation and other Globalizing forces that drive one’s own
identity. The population density of the Philippines is high, but the distribution of wealth
over population is uneven. The problem that the banking sector faces due to this, lies in
the fact that almost 7.4% of the population was unemployed. This meant that an
estimated 7.4M Filipinos were not producing any income and were of no help for the
banking system. As for banking and gender, we have seen a great increase in men and
women approaching banks for their services such as savings, loans and even insurance
due to the growing instability of our economy and the fact that more and more people, not
just women, are being driven to work due to the economic crisis the country and the world
is facing. Many former home husbands or wives have opted to getting a job in order to
help sustain their family’s interests and needs.

Corporate Profile

BDO Leasing and Finance Inc. is a subsidiary of BDO Unibank and has an
established track record of service and innovation in the leasing and finance industry. It
is a recognized leader in the market it serves and this is further proven by its consistent
excellent financial results, as well as, a continuously growing clientele base.

Capitalizing on BDO Unibank’s extensive market reach and its wide product range, the
Company continued to be among the industry’s dominant players in terms of total assets,
capitalization and profitability. Net Income reached P504M in 2014, while total loans and
leasing portfolio levels reached PhP24.0 billion attributable to intensified marketing efforts
and expedient but prudent loan underwriting. It has also positioned its branches in
strategic locations to service growing needs of the country’s growth areas.
The Company also continued to have the highest approved ceiling for short term
commercial papers (STCP) in the financing industry, particularly with the recent approval
by the Securities and Exchange Commission to increase its STCP license to PhP25.0
billion. Further, the

Philippine Ratings Services Corp. (Phil Ratings) maintained its PRS2 rating (rated above
average) for the Company reflecting strong capability for payment of the commercial
paper issue on both interest and principal.

The BDO brand not only strengthened the Company’s position in the industry but also
revolutionized its capability to meet new sets of challenges and expectations.

Vision Statement

We shall be at the forefront of the leasing and financing industry in the Philippines
and in the Asia Pacific Region. We shall have the most extensive market reach and shall
be composed of highly trained, technically competent and upright professionals working
as a team and contributing to the growth of the nation and the communities we serve.
Recognizing that the customer is the focus of our activities, we shall lead the industry by
providing modern and relevant financial services which exceed their expectations.

Mission Statement

We are in business for our customers, shareholders and employees. We shall

deliver creatively innovative products and cross-sell the BDO Unibank Group’s services
supported by procedures, systems and processes which will ensure utmost customer
satisfaction. We shall recognize and reward excellence in our employees and shall
provide an environment conducive to maximizing their potentials as we work cohesively
as a team. We shall generate consistently high returns for our shareholders.
 SITUATIONAL ANALYSIS

Overview

BDO is a full-service universal bank in the Philippines. It provides a complete array of

industry-leading products and services including Lending (corporate and consumer),
Deposit-taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards,
Corporate Cash Management and Remittances in the Philippines. Through its local
subsidiaries, the Bank offers Investment Banking, Private Banking, Leasing and Finance,
Rural Banking, Life Insurance, Insurance Brokerage and Stock Brokerage services.
Production/Operations
Banco de Oro’s banking services can be classified into 4 categories: Personal
banking, Business banking, Investment banking and Wealth management.

Personal banking deals with: Wealth Management:

 Branch Banking
 Private banking
 Consumer Loans
 Credit Cards, Insurance  Investment & Advisory Services

 Remittance  Personal Trust Services

 Electronic Banking
 Unit Investment Trust funds
 Investment & Advisory Services
 Unit Investment and Trust Fund

For Business banking: Investment banking:

 Cash Management  Equity & Quasi Equity

 Merchant Acquiring
 Underwriting and Management

 Insurance Loans  Direct Equity Investment

 Trade Facilities
 Fixed- Income Underwriting
 Corporate Trust Services
 Packaging and Syndication

 Securitization

 Financial Advisory
Competencies

BDO has utilized its strengths in building customer loyalty throughout the years.
With their slogan, “We Find Ways”, the bank has been able to build a strong customer
base to the extent of operating in extensive banking hours. BDO is capable of meeting
the customers’ needs efficiently with the use of advanced technology. This allowed the
company to diversify and innovate its services through offering loans and deposits,
payments and settlement services, asset management, investment banking, dealership
and brokerage, insurance services, etc. In addition, BDO has a firm and competent
management operated by the Sy family, which pioneered the establishment of SM Malls.

Competitive Analysis
Metropolitan bank and Trust (Metrobank)
Metrobank offers commercial and investment banking services. Its principal
business activities involve borrowing and lending, trade finance, remittances, treasury,
investment banking, credit card and savings banking. It is also a major participant in the
foreign exchange market in the Philippines, and is accredited by the BSP as a government
securities dealer. The company's customer base covers a cross section of the top
Philippine corporate market, but has always been particularly strong in the middle market
corporate sector of the economy, a significant portion of which consists of Filipino-
Chinese businesses. Metrobank provides investment banking services through First
Metro Investment Corporation and retail banking through Philippine Savings Bank.
It continues on its expansion thrusts as it expects to end the year with a total of 552
domestic branches and an automated teller machine (ATM) network reaching 800. The
bank will intensify the promotion of its electronic banking services to retail customers,
including self-service channels like phone and Internet banking. While deposit taking is
still the key business of branch banking, the bank steadily expanded its other retail
businesses like housing and car loans, bancassurance and credit cards. It likewise
concluded its roll-out of its sales effectiveness program that helped re-engineer all
branches into sales-driven brick-and-mortar outlets.
 Bank of the Philippine Island (BPI)
BPI is the oldest bank in the Philippines still in operation and holds the record as
the largest bank in terms of market capitalization in the Philippines (P136 billion =
US$3.24 billion as of March 2008), and has consistently been the most profitable bank in
the Philippines. It is owned by the Ayala Corporation, the largest conglomerate in the
Philippines, and is based in Makati City's Central Business District. The Group's principal
activities are corporate banking, consumer banking, investment banking, asset
management, corporate finance, securities distribution and insurance services. The
Group derives its revenue from three operating business segments namely, Consumer
Banking, Investment Banking and Corporate Banking.BPI also pioneered rural banking in
the Philippines, as its countryside banking operations preceded that of many other banks'
rural banking operations by many years. Today, it maintains a large rural branch network,
with some branches dating bank to the Spanish or American colonial periods. Its branch
network of 830 branches is by far the largest branch network of any bank in the
Philippines.

Market Objectives

1.) To increase or maintain its market share in the industry.

Being in a high growth rate industry, BDO should remain vigilant for possible
takeover of competitors. They should increase or retain their market share to maintain
their sphere of influence and dominance in the industry. They should never be complacent
because with tough competition and being in a high growth rate industry, competitors may
take advantage and have an equal or if not, a greater market shares in just a short span
of time. To prevent this, BDO should increase their network branches. Comparing with
other tough competitors in the industry (Metrobank and BPI), BDO is only third in terms
of branches all over the country. They should put branches and ATM networks in key
strategic location. They should not only focus in Metro Manila but nationwide as well.
2.) Increase its deposits by encouraging investors and probable depositors.
The deposits have declined by 5.25% which indicates relatively poor banking
programs to attract probable depositors and retain existing ones. They should increase
their deposits because it is their source of funds which they can invest on certain portfolios
to earn money. With an increase in deposits, the firm can grab external opportunities and
minimize threats when they come around. A low deposit indicates poor management and
they should address it immediately to prevent future problems.
3.) Invest highly on Technology to increase customer transactions and to give them
convenience and satisfaction.
Nowadays, people are so busy that they can’t find time to go to the bank, if they
have, the banks are now close. To ease this problem, the company should invest on this
kind of high-end technologies like cash-less transaction, debit cards, cash cards and other
innovative ideas. The company can implement an online banking system. This online
banking system will be able to give customers and depositors alike a much greater
convenience than before which in return, the customers will be more willing to transact
with the bank.

4.) To have an increasing growth rate on loans, receivables and interest income.
One of the chief operating revenues of a bank is the interest on loans. That’s why
to increase the performance and income of the bank, loans should also increase. One
way to address it is an online loan application. The customers may avail the application
online provided that he or she has a good credit term. Another way is attracting new and
potential investors. Advertisement is a good way in attracting investors. Giving out loan
packages with special features is a good catch. BDO should have a 10% increase in its
loans for the next year and increase of 5% in the succeeding years for its improving
market share and enhanced service.
 Market Strategies

1.) Horizontal Integration

To lessen the competition in the industry, BDO must acquire some of its
competitors to increase its relative market share and to be the market leader in the
banking industry. It is hard for BDO to acquire its main competitors (Metrobank and BPI)
but the bank may acquire the other banks. They may also want to purchase their stocks
just to gain control, if they don’t want them to integrate it to their organization, to broaden
their influence in the industry. BDO should look at their internal weakness and address it
by acquiring other banks with internal strength that BDO lacks. By doing so, the firm can
increase its market share and can become the number one bank in the country. Seeking
stock control is almost the same as the acquisition but in a different aspect. BDO will not
have any problem with this, given the fact that it has a strong financial position.

2.) Market Development

BDO is a well-known established bank in the country especially in Metro Manila
and other key cities. It is known for its service and dedication. But in some part of the
country, in the rural areas and some provinces, people tend to transact with rural banks.
One move should BDO make is to establish a market in that specific area to have an
increase in transaction which equals an increase in income. Rural banks offer less interest
rate than those well-established banks but they are more prone to the global crisis that is
happening. Another way is to integrate those rural banks as part of the BDO conglomerate
or acquire them to lessen the competition in the rural areas.

3.) Product Development

BDO may be investing and inventing new ideas and programs but that’s also what
their competitors are doing. To differentiate their intermediation programs from the rest of
the group, the firm should think of a unique program that the competitor’s program has
not. Since there is a record high dollar remittance from OFWs, the firm may take the idea
of money transfer business firms. They may provide also such service but in a different
way. Product development means increasing the reliability and dependency of the
customers on the bank. More than the demand itself, the firm must be able to respond
urgently. By improving BDO’s product quality, or service, in terms of reliability and
dependency, it will be able to have a proactive stand on the perceived problems of the
customers which will make the company, the preferred bank.
The firm does not have a research and development team which could take
advantage of available technology to initiate innovation in the banking industry. The team
must invest on this and conduct studies, surveys, and research how to carry out their
service without interruptions and delay.

Action Plans
Based upon the internal and external analysis which are the basis of the matching
tools used for the formulation of strategies, three strategies stand out the company can
use to increase the market share and for better improvement. These strategies are:
Horizontal Integration, Market and Product Development. Of the three, horizontal
integration is the most appropriate. BDO has a high market share but in an industry with
a high relative growth rate. There are numerous players in the banking industry which
only means competition. The top three are Metrobank, BDO and BPI. Doing so would
increase the market share of the company.
 Activities Expected Timetable Unit(s) Responsible
Output

Opportunity Increase in Continuous Accounting and Finance

Analysis Capital Department, Treasury
regarding resources and Department, Strategic Planning
investment strategic Group, Property Management
and asset acquisitions Group
acquisitions

Advertising of Increase in the Continuous Marketing Department,

the company number of Branches
clients and
market share

Regular Development Quarterly All Departments

Planning and of better plans
Evaluation and strategies
Meetings for the
company,
assessment of
whether
objectives are
met by all parts
of the
organization

Maintaining Better Accounting and Finance

balance management Continuous Department, Treasury
between total and allocation Department
deposits and of funds,
total loans and greater profit
receivables from net
interest income

Employee Motivated Semi-annually Human Resource Management

Training and employees and
Development improvement in
for new their skills and
processes, competencies
standards, or
updates in
technology
 Updating Greater Once a year Technology Management
technologies competitive Group
of the advantage for
company the company,
higher
efficiency of
operations,
greater quality
of services
rendered

Strategy Evaluation, and Monitoring and Control

Proposed Performance Department in
Strategy Key Result Indicators Time Charge
Areas Frame

Horizontal An increase in Industry 2 to 3 Individual branches,

Integration number of Ranking based Years Strategic
branch on total branch Management Group
networks and networks
increase in
market share in
the banking
industry

Market Market share in Establishment 3 to 4 Marketing,

Development the rural areas of branches in years Finance/Accounting,
and certain key strategic Production, and
provinces locations on Operations Group
the said areas

Product Efficient Loans and 2 Years Marketing

Development operations receivables, Department,
increase in Net Due from other Strategic Planning
Income, banks, and net Group, Technology
technology income Management Group
advancement and Research and
Development Group
Financial Projections and Overall Evaluation of the Strategies Proposed
Banco De Oro has been performing well in its operation for the past years. Its main
operation is all in the Philippines and its transactions are denominated in Philippine peso
except for foreign currency transactions but they are denominated in Philippine peso at
the current exchange rate. The Financial statements of BDO attest to the claim that it is
in an excellent condition and good financial performance and position. As presented in
the table below, the figures have all increased significantly since the merger took place
with EPCIB.

Financial Highlights

*Billion PhP 2017 2018 % Change

Resources 628.88 617.42 -1.8%
Gross-Customer
Loans 257.96 297.03 15.1%

Deposit Liabilities 470.08 445.40 -5.3%

Capital Funds 52.42 60.54 15.5%

Net Income 6.39 6.52 2.0%

The recommended strategies for BDO are expected to maximize the company’s strength
and competitive advantage while minimizing the impact of threats and eliminating its
present weaknesses. These strategies have financial effects to the company and the
following are the financial projections considering the impact of these strategies
CONCLUSIONS

BDO is the top local bank in the Philippines and is largest in terms of assets and
loans. With the upcoming ASEAN integration, it should focus more on its strengths and
enhance its services to compete with its competitors. The main point is that BDO should
be better in terms of quality. Financially, it is doing very well from the years 2017 to 2018.
It is expected that it would be here for the long run. In its operations side, there are many
threats that hinder the bank for 2015. However, with the right strategy, BDO can compete
with international banks even with the increase of their presence domestically. It should
be noted that the bank must be able to compete internationally as well; currently, it still
has not attained this status. Further research must be done on other banks to compare
their different characteristics and determine the right strategy to face not only the ASEAN
integration, but also globalization in the future. At present, BDO is taking gradual steps to
improve its competitiveness, but the question of executing the strategies in time for the
future situations to come, still remains.

References:

BDO. (2012). 2011 annual report. Retrieved from

https://www.bdo.com.ph/sites/default/files/ pdf/PBAR11.pdf
BDO. (2014). 2013 annual report. Retrieved from
https://www.bdo.com.ph/sites/default/files/
pdf/BDO%20AR%202013%20Volume%201_ Main.pdf
BSP. (2014b). Ranking as to total loans, net. Retrieved November 25, 2014, from
http://www.bsp.gov.ph/banking/psoc/by_ra inks/loans.htm
Dumlao, D. C. (2014, December 24). BDO expands to Mindanao, buys big rural
bank. Philippine Daily Inquirer. Retrieved from
http://business.inquirer.net/183972/bdo- expands-in-Mindanao-buys-big-rural-
bank
Forbes.com LLC. (2014). #1 Henry Sy & family.
Retrieved from http://www.forbes.com/profile/henry-sy/

BDO Annual Report 2007

http://www.mobilephonebanking.org

http://bdo.com.ph