Essay: Leading mortgage firm serving

EXECUTIVE SUMMARY:

First Direct is a one on the leading mortgage firm serving the needs to individual home buyers and also to real estate professionals Customer with insufficient funds to buy property outright, to borrow money to buy home will qualify for this loan, with the present credit crunches effective most borrowers, waiting for another change in the base rate time has aroused to give them a relief.

Home Buyers looking for a mortgage loan can find the right one for them ONLINE LENDERS, offering more current information to help customers make better-informed decisions also allowing them to qualify for the Industrial Awards Scheme, which will enable them to earn points, these points can be converted into rewards or can be converted into making payment for their Home Owners Insurnance.In addition we will create a Escrow account for the buyer which is for property Insurance and Taxes and pay their escrow in advance which will be recollected instalments later.

This online service offers a wide range of mortgage sources differentiating loans with periodical information of loan terms and rates,

This plan gives brief information of UK Market, providing our competitor analysis and Swot analysis. Also discussing about making wiser and profitable decisions with the help of Financial budget and budget of allocation of resources for each segment of marketing, the pricing structure of the product and project earning.

Sufficient Information for Making Decision:

Our bank has come up a new Idea in this year, this service will enable customers to buy, retain and own property as they have the opportunity to get a fixed rate of interest, in spite of the financial situation affecting the business.

Also encouraging them to enrol them self for the Industrial Award Scheme. With this initiative our senior management believes that we can gain more popularity and earn some good profits,

SITUTATION ANALYSIS:

UK Market Analysis:

The last week has seen a flurry of fixed rate mortgages coming down in price, according to mortgage advisors John Charcol.(1)

Despite high swap rates and a static base rate, which continues to languish at 0.5 per cent for the tenth consecutive month, Chelsea, Coventry, Halifax, HSBC, Nationwide, and Yorkshire Building Society have all cut the cost of theirfixed rate mortgages.(1)

Rates wereleft unchanged again at 0.50%at the March meeting, the 12th month in a row. A Reuters poll of economists (10 Feb) predicted a rise to 0.75% in the fourth quarter (Oct to Dec 2010), and then to 1.25% in the first three months of 2011, reaching 1.75% by June. Bank rate forecasts have been on a roller coaster in the past month. (2)

Rising inflation figures –CPIrose from 1.9% to3.5% (16 Feb)in just two months – raised fears that rates may need to rise earlier than thought before to cool price pressure. Those fears have been heightened in March amid fears of a collapse in sterling. The further sterling falls, the more expensive it becomes to buy foreign goods, and effectively importing inflation – and that could force rate rises (2)

Few of the factors which has been taken into consideration

Market Size:

We have made analysis of the market size by means of government data and customer surveys to estimate the market size which will help us to determine the potential sale and if we have scope to expand

Market Trends:

As the market trends keeps on changing, the price sensitivity and quality emphasis are our main areas of concerns

Market Segmentation:

We have create a proper market segmentation to make sure that the work assigned to these groups have people best suited for that particular job .

Market Profitability:

As we are aware that the market has different levels of profitability, we have taken the average profit potential for the market to determine how difficult it might be to make profits in the market.

Distribution Channels:In the present scenario we have taken the

Existing distribution channels:In case the existing channel is sufficient or not?

Trends and emerging channels:Information on new emerging channels to gain the first mover advantage

.Product and Technology Analysis:

Banks	Name of Plan	Initial Fixed Rate	Until	Fees	Access	Max LTV
A Bank (3)	ONLINE LENDERS	3.29%	3 years	£998	Instant	75%
B Bank	LIVE E -PROVIDERS	3.41%	01 June 2012	£991	Instant	79%
C Bank	HOME ONLINE	3.36%	01 June 2012	£995	Instant	75%

Additional Features of the Scheme

This schemes allow the customer to utilise the opportunity to qualify for the Industrial Award Scheme which will also enable them to earn points which can be converted into rewards or can also be converted to make the Home Insurance payment.

Our prime objective is to encourage them to own a property and also reduce a little burden of the payment

Further there will be Awards given on annual basis, and they can utilise their points any time during the year.

Key Features

• Allowing to get in-depth knowledge of the Mortgage Market
• Reduced rate of interest and time consumption
• Excluding the Middle Men (Brokers, Realtors)
• Instant Access to their account
• 24/7 Customer Support (email/chat)
• Earning Rewards Points

Technology:

As being equipped with world class technology, the applications and the platform, with highly qualified staff ,we are ready to launch this product soon this software is being build on LIVE SUPPORT SYSTEM which will enable the customer to get updates instantly and with less margin of error.

SWOT ANALYSIS

Competitor Analysis:

In the past few years the credit crunches had shaken the economy but despite this fact the other banks are slowly capturing the market consumers are still buying,

In this situation there is scope market to increase potentially and for other bank also allowing expanding the business.

How to Exploit the Opportunities:

The interest charged on two-year fixed rate mortgages fell to a six-and-a-half-year low during February in a further sign that competition was slowly returning to the market, figures showed today.

The average cost of a two-year loan dropped to 3.88% during the month, down from 3.97% in January, to stand at its lowest level since July 2003, according to the Bank of England.

There was also a fall in the average cost of a five-year fixed rate mortgage, with this dropping to 5.49% from 5.56%, while tracker rates increased slightly to 3.69%, although they remained at their second lowest level since records began in 1997.

A number of banks and building societies cut their rates during February, with many launching new best-buy deals in a bid to tempt borrowers to remortgage away from their lenders’ standard variable rates.

There was also a big increase in the number of products available for people with only small deposits, as lenders became more comfortable with the risk these borrowers represented.

The number of different mortgage products available also broke through the 2,000 barrier for the first time in more than a year during the month. (4)

Given below are few opportunities that we can utilise

Banks have introduced low rate helping the UK market to grow and not only this due to this the share value increases and will also lead to good economic growth and improving the UK pensions plan which will allow good saving for the Buyers.

Our capital level is adequate that mean in future we would be enable us to retain more autonomy

With Various Analyst projecting a growth in a large scale in the coming months, it should allow the bank to rejoin and should provide more consumer confidence for people who want to take a out large scale mortgage over the coming next couple of years

How to Handle Weakness:

• As there are many others bank offer a reasonable rate of interest, we need to keep a track on not decreasing the rate very low, as that may lead to losses.
• The launch of this product will lead to affecting the moral among the staff, leading to decreased production and loyalty so we need to allow the staff to avail these promo and encourage them.
• Due to the current situation, and rate decreasing some existing customers might take this in a negative way, building up more frustration and leading to more defaults.

Threats

• Due to financial losses things have changed a lot, Investors faith in the bank have decreased which might lead to investment elsewhere.
• For a customer’s the availability of credit is less due to lot of financial losses that banks and investors had to bare ,and with the living cost increasing the customers are having hard time to save money
• Equity of many properties fell down due to loss of its value, and if the property value is less compared to the purchase price, there is less scope for the bank to compensate the loss if the borrower goes default.

Marketing Research

Required Information

As this plan is designed to provide the opportunities to middle and low level and keeping in mind the Current market situation and also the competitors.

Research Methodology:

Primary Resources we are planning to do a group interview and surveys and telephonic interviews directly with the customers.

Secondary Resources would be the reports and newspapers and journals we are contacting the trade associations and government agencies

Marketing Strategy

Direct Marketing:

Involving the sales person to does the campaign direct contacting with the consumer and this will include negotiation and also offering according to the need of the consumer.

Advertising

Advertisings the means of Radio, Television, Newspapers, and Internet, this will cover large sections of the society.

Public Relation

Developing public relations by means stake holders of the firm to build a positive perception in the minds of the public

Sales Promotions offers

Offering people with a negotiable rate of interest and also offering free gift with every registration

Sponsorship

Offering sponsors for major events and creating awareness about the brand to the public.

Measurements of the Strategies

Our Organisation consists of customized system in place to measure performance, which can readily gauge and continuously tune its market strategy depending on the requirement.

General Marketing Strategy, Decision Area Strategy

Implementation

Realistic Implementation Schedules

1. Selecting the Product Link and software platform to support the service.
2. Setting up the Technology Team to work on back end to launch the website
3. Updating the software to allow the consumer to register
4. Up skilling the Existing or new employees about the product and utilities

Approximate Human Resources

Our Staff will consist of 60 members, where 50 employees will be senior and 10 will be at junior level.

Critical Path

Task Activities Duration

1 Marketing review ———————————— 30 Days

2 Preview and Validate the Product ——————– 20 Days

3 Define and Develop Selling Promotion ————– 15 Days

4 Updating the Platform for Prelaunch —————– 5 Days

5 Training the Employees —————————– 20 Days

6 Portfolio Management Planning —————– 10 Days

7 Risk Analysis ——————————————- 60 Days

What If’s Scenario

What If ‘scenario is to determine the effect of different cost on the profit and other financial indicators.

We as a Bank are strong with capital so if the expected results are not seen and if customers have difficulty making the payments on time, we will offer them with options of Modifying the

loan, or deferment of payment

lumn1	Co n2	2010	Column3	Column4	Column5	2011	Column6	Column7	Column8	2012	Column9	Column10
Expenses	QT 1	QT 2	QT 3	QT 4	QT 1	QT 2	QT 3	QT 4	QT 1	QT 2	QT 3	QT 4
Research	150	150	150	150	180	180	180	180	180	180	180	180
Total	150	150	150	150	180	180	180	180	180	180	180	180
MEDIA EXP
Magazines	75	75	75	75	75	75	75	75	75	75	75	75
Radio	30	30	30	30	35	35	35	35	42	42	42	42
Internet	20	20	20	20	30	30	30	30	35	35	35	35
TV	30	30	30	30	35	35	35	35	35	35	35	35
Trade show	110	110	110	110	120	120	120	120	130	130	130	130
Sponsors	250	250	250	250	280	280	280	280	325	325	325	325
Direct Mail	5	5	5	5	5	5	5	5	8	8	8	8
Tele calls	50	50	50	50	50	50	50	50	70	70	70	70
Promotions	60	60	60	60	60	60	60	60	60	60	60	60
Outdoors	120	120	120	120	130	130	130	130	140	140	140	140
Total	900	900	900	900	1000	1000	1000	1000	1100	1100	1100	1100
Sales Force
Expenses	200	2002	2003	2004	210	2105	2106	2107	230	2308	2309	23010
Incentives	100	100	100	100	90	90	90	90	90	90	90	90
Total	100	100	100	100	90	90	90	90	90	90	90	90
Grant Total	1200	1200	1200	1200	1300	1300	1300	1300	1420	1420	1420	1420

Financial Summary

All Figures are in thousands. GBP is the Currency

Number of Clients

With the introduction of this product we are expecting to allocate this service to 500 customers, excluding the exciting customers and we expect to increase this number year by year.

Approximate Revenue estimates in next three years

		2010			2011			2012
		In Millions			In Millions			In Millions
Net Interest Income		200			220			245
Fee and commission		60			70			76
Trading Income		80			85			90
Operating Expenses		-75			-71			-68
Loans Impairment		-40			-36			-32
Net Profit Before Taxation		225			268			311

Control and Measurements

How would control the Product Launch

We have assigned team of professional who will planning out various activities on periodical basis and help them to enhance develop the product

Our have partnered with one the software package providers enabling us to update the software timely basis.

Measurements matrix of your estimations

There are various strategies that have been to evaluate the progress of the business, which is designed in such a way that every sector of division’s progress will be taken into consideration and the overall progress will be evaluated with the plan and these strategies will be enhanced as per the requirement.