Phase 1 Project

MKTG 361 Section 1

02/12/20

Team Members
Feng Xu
Parker Evans
Phillip Baker
Kenny Chacon
T.J Agyakye

Company Overview
Wells Fargo is a financial and bank holding company providing retail, commercial and corporate banking
services through its subsidiaries. The company's divisions include: community banks, which provide a
range of financial products and services, including checking and savings accounts, credit and debit cards,
wealth and investment management, and service (Mergent Online, 2020). Founded in 1852, Wells Fargo
provides financial services through more than 8,400 locations and 13,000 ATMs (Wellsfargojobs.com).
This makes Wells Fargo one of the largest banks in the United States.

Industry Overview
Wells Fargo provides banking, insurance, investment, mortgage and consumer finance services by
operating a financial service industry in the commercial banking in the US. Wells Fargo & Company in
this industry as the main major player which owns 10% market share (Figure 1) versus JPMorgan Chase
& Co. (8,6% market share) and Bank of America Corp. (6.2% market share). Between 2014 and 2019,
Wells Fargo’s industry-specific revenue is expected to grow to $77.6 billion at an annual rate of 1.1%
(Gambardella, 2019).

Marketing Challenges
Consumer banking marketing strategies consist of two common goals, creating trust and value. They
worry about how much of its marketing strategies generate value for its customers. Of course, with any
financial institution there will be challenges with marketing.

Transparency
A challenge with our company’s marketing is understanding how to take steps to be more transparent.
Ever since the scandals with our company’s employees opening fake accounts for customers to meet a
certain quota, it has been hard to gain the trust back of Wells Fargo from the public.

Market Saturation
In the consumer banking industry, a challenge is having a lot more competition. This is a challenge for
marketing because consumer banks, like Wells Fargo, have to compete with banks like JP Morgan Chase
Co. and Bank of America Corp. The challenge is understanding these consumer banks and understanding
its advantages. Once we understand what they do right we will be able to find gaps or flaws in these
companies, meaning we will be able to figure out what they don’t do for customers.

Delivering an Experience
The most challenging aspect of consumer banking is delivering an experience. Customers do not want a
transactional relationship but rather a more personal relationship. They seek advice from consumer banks
in hopes of achieving their dream. Understanding it’s all about the experience should change marketing
strategies because it will be the only way to stay competitive. As a marketer for any financial institution,
it is a challenge to deliver an experience to customers in the online space. This is the challenge for
everyone because marketing campaigns need to be creative in order to acquire new customers and retain
current customers.

SWOTT Analysis
Strengths
Wells Fargo has been able to control the banking market share for so long with its branding and image,
which has rendered them a household name in the United States. With more than 8,400 branches across
the U.S., they have a wide variety of customers. They have been able to effectively attract customers from
the top 1% all the way to the everyday customer.

Weaknesses
Wells Fargo competes in a crowded banking industry and ardently fights for market share with a select
group of opponents. Unfavorable factors such as recent scandals, legal trouble, and concerns about
customer satisfaction could prove problematic for the financial giant. Currently, political sanctions have
the company operating under an asset cap, and they continue to suffer from negative news coverage and
public relations.

Opportunities
Wells Fargo is also working to take advantage of major opportunities to generate revenue through global
expansion and acquisition. With a large displeasure for the bank coming from the American public, Wells
Fargo has the chance to continue to grow in smaller towns and seize even more of a market share in order
to regain the trust of its customers.

Threats
The biggest threat to Wells Fargo is losing its top percentage of market share to direct competitors.
Moreover, regulatory challenges on both the federal and state level could spell trouble for Wells Fargo.
Political sanctions are still uncertain, and if Wells Fargo can’t shake the attention from Washington D.C.,
they could face even more backlash and unwanted observation.

Trends
Banking, an ever changing industry, has shown recent trends that will change the way banks operate.
Cryptocurrency and blockchain, as well as P2P transactional services under PayPal and Square have
given the traditional consumer new avenues to own and distribute cash. Adapting to and embracing these
emerging market trends will be essential for any bank to continue to remain at the forefront in the coming
years.

Current Competition
JP Morgan Chase Co. and Bank of America Corp are Wells Fargo’s biggest competition, as they are just a
few percentage points behind in major player market share (Figure 1). Data from Orbis shows that Wells
Fargo trails both these companies in operating revenue and total assets, but remains ahead of American
Express Company and CitiGroup Inc. With the goal of global expansion, Wells Fargo will go up against
international banking giants such as Japan Post Holding Co. and HSBC Holding PLC.

USP
When examining the unique selling proposition that encourages customers to adopt Wells Fargo we see
that there is a common trend. Customers adopt Wells Fargo because we strive to help customers succeed
financially. With recommitment that Wells Fargo made to customers in 2018, the promise of unparalleled
service and sustained excellence in banking for years to come is the proposition to induce the switch from
other banks.

Target Markets
Primary Market
Retail customer market makes up the largest portion of the commercial banking industry. Even though
these clients are based on small transactions, the number of clients for this portion completely outweigh
others. Retail customers account for 50.8% of the industry. Wells Fargo profits on this market by
consumers’ deposits as well as fees and investments made on deposits. The main goal of this market is to
retain and acquire customers. Retaining customers and ensuring they branch out past typical banking is
hugely valuable. Cross selling is very valuable in this industry and helps out a lot. These customers are
usually middle aged and are financially able to support themselves.

Secondary Market
Corporate clients are Wells Fargo’s second largest market. Not because of its large number of people but
for the fact that each person’s dollar value is so large. Similar to retail customers, corporate clients also
deposit cash into commercial banking accounts. Corporate accounts for 46.2% of the industry. Usually
large corporation clients have assets greater than $1 billion. Institutions with less than 1 billion in assets
are more likely to deal with residential mortgages, commercial real estate, and agricultural loans.

Tertiary Market
The final and smallest market is involved with customers that need student loan services, retirement
services, auto finance, and other forms of commercial real estate. There is a wide range of people
categorized in this market. College students vary in age from 18-24 on average. Americans on average
leave the workforce between 55 and 65. That is what makes this market so skewed and slightly difficult to
target. Although other clients only make up 3% of our target markets it is the most diverse for commercial
banking.

Summary
After analyzing Wells Fargo’s company and industry overviews, marketing challenges, SWOTT analysis,
and target markets, it is clear that Wells Fargo is a huge player in the financial service industry. The
company’s SWOTT analysis shows a full breakdown of trends and factors, internal and external, that
govern the company. Even with the mix of marketing targets, such as retail customer market, corporate
clients, and commercial real estate, there are some legitimate challenges that Wells Fargo needs to
overcome to continue to dominate market share, grow overall customer total, and expand and prosper.

Table 1

Location Favorable Unfavorable

 of Factor

Strengths Weaknesses
Internal ● Strong Brand Name ● Customer Satisfaction/Relationships
● Customers across Income Groups ● Bank Scandal
● Current Market Presence ● Legal Trouble
● Asset Cap

Opportunities Threats
● Growth outside the U.S. ● Competition of other top banks
● Growth in Smaller Towns ● Financial/Economic uncertainty
External ● Acquisitions

Trends
● Cryptocurrency, Blockchain
● AI
● Mobile Banking/ P2P Payments

Figure 1 (Gambardella, 2019)

Figure 2 (Gambardella, 2019)

Works Cited

About us. (n.d.). Retrieved from https://www.wellsfargojobs.com/about-us

Boehm, J. Ehite. (2019, March). Innovations in Banking - US - March 2019. Retrieved February 11,
2020, from https://reports-mintel-com.ezproxy3.library.arizona.edu/display/947600/

Facts, P. (2016, July). Consumer Banking and Borrowing: U.S. Market Trends. Retrieved February 11,
2020, from https://www-marketresearch-com.ezproxy4.library.arizona.edu/academ ic/Product/5916746

Foxall, G. R. (2019, July 3). Marketing firm performance: When does marketing lead to financial gains?
Retrieved February 11, 2020, from https://onlinelibrary-wiley-
com.ezproxy3.library.arizona.edu/doi/full/10.1002/mde.3046

Gambardella , A. (2020, February). Commercial Banking in the US. Retrieved February 11, 2020, from
https://my-ibisworld-com.ezproxy3.library.arizona.edu/us/en/industry/52211/major- companies#9795

Gambardella, A. (2019, June). Commercial Banking in the US. IBISWorld Industry Report 52211.
Retrieved from IBISWorld Database.

Wells Fargo. (2020). Company details. Retrieved from Mergent Online Database.

Wells Fargo & Company SWOT Analysis. (2019). Wells Fargo & Company SWOT Analysis, 1–7.
Retrieved from Business Source Ultimate.

Wells Fargo & Company. (n.d.). Retrieved from Orbis. https://orbis4-bvdinfo-

com.ezproxy3.library.arizona.edu/version-202026/orbis/1/Companies/report/Index?
format=_standard&BookSection=PEERREPORT&seq=0#