1.

BARCLAYS – MACRO ENVIROMENTAL ANALYSIS

The purpose of this essay is to develop an understanding

of the main characteristics of the macro environment in
the context of financial services, with specific focus on
how a major multinational banking company, Barclays,
is influenced by them.
Barclays is mainly engaged in investment banking,
investment and wealth management. The bank
operates in more than 40 countries across the world, and
is therefore influenced by a great range of external
developments.
In order to continue, it is necessary to define what
exactly is intended with macro environment. The macro
environment is constituted of all the external elements
that indirectly impact on the company’s functioning.
Although the company itself doesn’t have any control
over them, these factors affect performance, strategies
and the decision-making process of the organization
(Harrison, 2000).

To begin with, economic and political matters must be

considered. Companies can thrive under positive
economic conditions while they are affected negatively
during recession times, not only in regards of the
amounts of capital they can access, but also in relation
to customer’s attitudes and behaviors. The decision to
invest or borrow money from banks largely depends on
factors such as unemployment and disposable income.
Although the UK economy is currently showing signs
of growth, companies and businesses are still trying to
face the challenges deriving from the 2008 financial
meltdown. More recent events have however affected
the UK scenario in the last two years: the UK vote to
leave EU impacted the value of pound sterling, which
was subject to depreciation in 2016 against the other
main currencies. The 12-month inflation rate rose to
2.7% in August 2017, the highest value for inflation
rates observed since April 2012. A possible
consequence of this is the raise of interest rates in the
final months of 2017 which, according to the Bank of
England, is very likely if the economy and pressures on
prices continue to grow (The Guardian, 2017).
The financial services sector is one of most heavily
regulated of the whole economy and the most likely
to be susceptible to political influence. To name an
example, new regulatory capital rules and new sub-
charges on bank profits introduced by UK government
during 2016 affected Barclays Africa’s subsidiary and
contributed to the final decision to sell down the
company’s shareholding.

Legal factors need to be taken into account when

analyzing the macro environment. In June 2017
Barclays’ four former Barclays executives had to face
criminal charges relating to raising capital in Qatar in
2008. These are all developments that can lead to
negative effects on Barclays’ operations, employees,
clients and customers, as well as its reputation and
brand image.
In the social environment there are various trends to
examine. The growing amount of single person
households could lead to an increase in the demand of
financial support in retirement; as the importance of
education grows across the world, more families
request services to save for their childrens’ studies; at
the same time internalization requires companies to
consider their clients’ cultural backgrounds and
preferences, adapting their products accordingly. A
particularly relevant demographic issue is the increase
in life expectancy, due to the improvement in
healthcare and lifestyles. In 2016, 18% of UK citizens
were aged 65 and over, and 2.4% aged 85 and over
(ONS 2017 report). This could be an opportunity for
companies to extend their offerings to older people, as
a study conducted by the FCA revealed that elders are
currently under-served by the financial services (FCA,
2017).

Technological advances, such as block chain

technology, biometrics, bitcoin and FinTech firms, are
revolutioning the financial services sector. Barclays
recognizes these opportunities and invests in research
and development of new technology to differentiate its
business’s offering (Barclays Annual report, 2016). The
company is in fact the first bank that, in collaboration
with Wave, started to use the block chain technology to
execute global trade transactions. At the same time,
new technologies present major risks in terms of
frauds, cyber-crime, security and data management.
For instance, PWC global economic crime survey shows
that “cybercrime is still the second most common type
of economic crime reported by Financial Services
businesses (after asset misappropriation)”.
The environment itself also presents risks, as
companies need to be constantly aware of the
environmental performance of their clients, and
opportunities. These come as investments into
sustainable projects that, given the intermediary role
that banks play, could be significant contributions to
the environment and at the same time satisfy
consumers’ demand for ethical choices.

The essay provided an outline of the key macro-

environmental factors that influence Barclays and, in
general, the financial services sector. From this
analysis, which included the examination of recent
issues that the company is facing, it can be concluded
that Barclays operates in a very dynamic and
challenging environment subject to different
influences, which affect it both in positive (technology
and social trends) and negative ways (legal and
economic factors).

Word count (excluding references): 799

REFERENCES

Barclays Annual Report (2016). Retrieved from

https://www.home.barclays/content/dam/barclayspu
blic/docs/InvestorRelations/AnnualReports/AR2016/B
arclays%20PLC%20Annual%20Report%202016.pdf

PWC (2017). 20th CEO Survey/Key findings in the

banking and capital markets industry. Retrieved from
http://www.pwc.com/gx/en/ceo-
survey/2017/industries/pwc-20th-ceo-survey-banking-
capital-markets.pdf

Financial Conduct Authority(2017). Ageing population

and financial services. Occasional paper 31. Retrieved
from https://www.fca.org.uk/publication/occasional-
papers/occasional-paper-31.pdf#exec

Partington, Clarke (2017) How has the Brexit vote

affected the UK economy? September verdict. The
Guardian. Retrieved from
https://www.theguardian.com/business/2017/sep/26
/how-has-brexit-vote-affected-uk-economy-
september-verdict

ONS (2017) Overview of the UK population: July

2017. Retrieved from
https://www.ons.gov.uk/peoplepopulationandcommu
nity/populationandmigration/populationestimates/art
icles/overviewoftheukpopulation/july2017#main-
points

Harrison (2000). Financial Services Marketing.

Pearson Education

2.MARKETING MIX – PROMOTION AND PLACE AT

BARCLAYS
This paper will examine two elements of the marketing
mix in the financial services sector, promotion and
place, in relation to Barclays: how this bank faces the
challenges of promotion and distribution will be the
major focus of the essay.
The Marketing Mix is defined by Kotler (2000) as “the set
of marketing tools that the firm uses to pursue its
marketing objectives in the target”. The mix is therefore
a combination of product, price, promotion and place.
Each of these components contribute to determine the
overall brand image for the company.
Promotion is the set of activities that allow the
company to communicate with the consumers. The
main objectives of a promotional strategy include making
the target audience aware of the company’s products,
increase sales through the acquisition of new clients and
raise brand loyalty (Jennifer Rowley, 1998).
This concept however needs to be reviewed in relation
to financial services, where two main issues can be
identified. The first one refers to the fact that banks
cannot present physical products to their clients. As a
result, it is essential to create find creative ways to make
services “tangible” to consumers. In addition, promotion
needs to develop messages that are capable of
differentiate the company from others and attract
attention, as the public is not usually interested in
financial products.
In addressing these issues, Barclays uses both “Above-
the-line advertising” (traditional tools such as press, TV
commercials and the Internet) and “Below the line
Advertising”, which refers to advertising techniques
tailored to single customers or segments (direct
marketing, email advertising, sponsorships).
TV commercials are extremely important because they
allow Barclays to reach a great range of consumers from
different segments. The company launched many
successful television ads through the years. One of the
most recent is the 2017 “Anti-fraud” campaign, whose
aim is to educate customers about the dangers of
traditional and digital fraud.
In regards of sales promotion, Barclays launched
different programs, such as the Blue Rewards (double
cash rewards on selected products), Uber discounts for
clients signing up to the service with a Barclays debit
card, and the Rewards on the go app, offering benefits
from Barclays partners to clients that have been loyal to
the bank. (Barclays, 2017).
Barclays effectively uses its internet channels to interact
with consumers and deepen its relationship with them,
giving advice or responding to specific concerns and
requests. The company runs a Facebook, Twitter and
Instagram account, as well as a YouTube channel offering
formative videos and ads about Barclays’ services.
Barclays’ website contains all the necessary information
about services and products, other than general advice
on saving, investing or borrowing. As for sponsorship,
the company sponsored the Dubai Tennis Championship
and the English Premier League, as well as the Cycling
event ‘Barclays Cycle Hire”. (Barclays, 2017)
According to Kotler and Armstrong (2010) the term
“place” in the marketing mix involves “all the company
activities that make the product available to target
consumers”. In the last
decade Barclays has been
renewing its outlets
(starting in 2008 with the
Piccadilly branch in
London). The main aim of
London Piccadilly Branch (Source: this restyling was to
Google) attract more customers
into the single branches, providing them with personal
and interactive experiences and hi-tech services. The
new outlets include self-service areas with deposit
machines and ATMs, assisted service devices and access
to video-chat facilities to get advice from specialists.
In addition, in 2014 Barclays opened several branches in
Asda supermarkets that offer flexible banking services
seven days per week, in order to give consumers the
chance to “bank while they shop” (Barclays, 2017).
As with promotion, there are several issues related to
the place component. The concept of distribution has in
fact radically changed in the last decades: place does not
refer anymore to the single banking store, but it is instead
related to every channel that contributes in reaching the
customer when and how is convenient for him.
Furthermore, due to technological advances, new
distribution methods are changing patterns in
consumer behavior. Barclays is taking advantage of
these developments, and strongly promotes its digital
channels where clients can access their accounts,
manage payments and check their statements from their
homes or mobile devices. The bank in fact currently has
over 4.5 million customers registered with its online
services only in the UK.
As a result of the
increasing demand
for online facilities,
Barclays is
progressively
reducing the number
of its branches.
While in 2011 it
presented more than
1600 branches in UK, at the end of 2016 there were only
about 1,300 outlets available to customers and this
number will be further diminished of 54 outlets by the
end of 2017.
Although this decision is allowing Barclays to cut costs
and increase the business’ efficiency, many consumers
still rely considerably on physical branches and face-to-
face interactions. Therefore, customer loyalty could be
at risk if banks continue to remove physical outlets.
The essay provided an outlook of the features of the
promotion and place components of the marketing mix
and on how Barclays is managing them. It clearly
emerges from this analysis that digital technologies are
significantly affecting the way in which banks reach their
customers. While these changes represent good
opportunities, traditional ways of connecting with the
target audience (such as physical branches or traditional
media) are still essential for banks to succeed in their
markets.
Word count (Excluding references): 822

REFERENCES
Barclays (2017). Barclays Essentials. Banking while you
shop. Retrieved from https://www.barclays.co.uk/ways-
to-bank/barclays-essentials-asda/.
Barclays (2017). Barclays About us. Sponsorship.
Retrieved from https://www.home.barclays/about-
barclays/sponsorship.html
Independent UK (2017) “Barclays plans to close around
54 branches by the end of 2017”. Retrieved from
http://www.independent.co.uk/news/business/news/b
arclays-branch-closures-54-end-2017-year-cut-costs-uk-
customers-high-streets-a7893656.html
Kotler Philip, Armstrong Gary (2010). Principles of
marketing (13th Edition). Pearson Education
Kotler Philip (2000) Marketing Management,
(Millennium Edition), Custom Edition for University of
Phoenix, Prentice Hall, 2000
Rowley, Jennifer (1998). Promotion and marketing
communications in the information marketplace. Library
Review Vol.47, Iss.8. Pages 383-387
https://doi.org/10.1108/00242539810239543

The Guardian (2016). Number of UK bank branches in

2011 and 2016. Retrieved and adapted from
http://axiscorporate.com/uk/article/330/