Phase 1

MKTG 361, Section 1

September 17th, 2018

Team 3
Aryan Janmejay
Austin Kelly
Richie Merritt
Ellie Neiman
Luke Pingry
Carly Rippel
Company Overview
Wells Fargo is diversified financial and bank holding company that provides retail, commercial,
and corporate banking services. The company utilizes banking locations and offices as
distribution channels to institutions, individuals, and businesses. Services primarily include
“wholesale banking, commercial finance, securities brokerage and investment banking, computer
and data processing services, and trust services.” (Mergent Online, 2018). The company,
founded in 1852, now operates in all 50 states, the District of Columbia, and various other
countries. Primarily operations are held within the United States via 8,200 operating locations,
13,000 ATMS, and online banking capabilities (Wells Fargo & Company, 2018). With the 2018
ad campaign, “Established in 1852. Re-established 2018 with a recommitment to you”, the
company is making strides towards their vision to help customers succeed financially.

Industry Overview
Wells Fargo operates in the commercial banking sector of the financial services industry made
up of banks providing service to business and retail clients in the form of deposits and loans. Due
to stringent regulations, mature companies, and strong competition, industry entry is difficult
(Refer to Figure 3). After the mortgage crisis in the late 2000’s, the industry saw a decrease in
performance between 2013 and 2017 (See Figure 4). 63 banks failed while many others were
profitless. With an 11% market share, Wells Fargo is considered a major player in the industry
alongside JP Morgan Chase & Co. (9.1% market share) and Bank of America Corporation (6.5%
market share) (Gambardella, 2108). As the economy continues to improve, banks with continue
to see a rise in performance. With 5,069 businesses nationally and $691bn in revenue in 2018,
revenue is expected to grow over the next 5 years with an annualized rate of 5%. (Gambardella,
2108) (See Figure 5).
Marketing Challenges
Recently, high-profile scandals have pushed consumers to question their trust in large banks. As
of 2018, only 32% of consumers agree that banks are more trustworthy than they were five years
ago (Peltz, 2018). When Wells Fargo internally created 3.5 million fake accounts in 2016,
customers became reluctant to trust the company with their finances. This challenged Wells
Fargo to re-brand themselves in 2018. The company continues to face scandal related marketing
challenges as controversy continues to flood the media.

In the financial services industry, advertising campaigns are a challenge within themselves but
are exacerbated by controversy and scandal. Recently, Wells Fargo released an apology
campaign. However, consumers did not take well to the release. Many consumers interpreted
Wells Fargo’s advertisements as “trying too hard” and questioned the company’s ability to face
this crisis. Although, the company has seen growth since the account crisis, Wells Fargo
continues to face advertising challenges related to recovery from the 2016 scandal (Peltz, 2018).

In an age of innovation, the financial services industry continues to rapidly evolve

technologically. With platforms such as Venmo, Cash App, and Paypal, the financial services
industry faces the threat of online and mobile payment methods. As seen in Figure 2, These
applications appeal to younger populations as being more trustworthy than other well-known
financial institutions. Because younger populations are the main consumers of online payment
methods, these technology advances are challenging institutions to adjust their marketing
strategy (Mintel, American Lifestyles: Markets in Motion, 2018).

SWOTT Analysis
As a leading commercial bank in the financial services industry, Wells Fargo faces JP Morgan &
Chase, Bank of America, and Citigroup Inc. as major competitors (Refer to Figure 1). Although
similar in services, each company has a specific marketing strategy used to attract consumers.
For example, JP Morgan & Chase is notorious for their reward system. Their travel reward credit
card offers global entity reimbursement fees and other sign up bonuses related to a unique point
system. Bank of America advertises opportunities for small business owners by introducing
guided investing via online services.

Wells Fargo stands out as unique amongst competitors to consumers by continuously adapting to
evolving consumer preferences and engaging in diversified income distribution sources. For
example, they are currently progressing their services via online and through mobile devices.
The company’s services range from retail and corporate banking, insurance, investment,
mortgage, and commercial finance services. However, in addition to financial services, Wells
Fargo incentivizes research with pricing and savings opportunities as well as offers consumer
education resources such as credit management and personal financing.
Like any company, Wells Fargo faces a variety of strengths, weaknesses, opportunities, threats,
and trends. Table 1 gives a detailed representation of these components. Please reference Table 1
for more information.
Target Markets
Primary Market
With value placed on diversity and inclusion, Wells Fargo aims to target the multicultural
portion of the United states. In particular, the primary focus of this population includes
millennials between the ages of 20 and 27. Of the 120 million multi-cultural people in the United
States, one in six of these individuals speak at least two languages. This is where Wells Fargo
puts the most emphasis on marketing their products to. Recent ad campaigns feature Hispanic
and Asian cultures. The purpose of these campaigns is to attract two of the fastest growing
minority populations in the United States and bring in new customer sets. Furthermore,
approximately 100 million people are major fans of soccer in the United States. A large
proportion of this population is made up of the Hispanic and Asian minority groups. For this
reason, Wells Fargo sponsors soccer teams with an emphasis on the Mexican team to delve
deeper into this target population.

Secondary Market
Apart from targeting diverse populations, Wells Fargo is working to effectively reach another
specific set of millennials and Generation X. As one of the largest wealth management banks in
the United States, Wells Fargo making strides to bring in customers with an interest in opening
new investment accounts. A reason behind this motive is the company’s new initiative of a robo-
advisor called the “Intuitive Investor”. This target market is comprised of 72 million retail
customers of which 22 million customers were born between 1965 and 1975. This target market
should already hold an online account with the company and be considered “tech savvy”.
Specifically, customers who already hold an account with Wells Fargo but are not currently
invested with the bank’s Wealth and Investment Management unit. The goal of this target market
is to target customers within this range willing to make an initial minimum investment of
$10,000 in products and services Wells Fargo currently offers.

Tertiary Market
In addition to the multicultural and tech savvy markets, Wells Fargo is actively working to
expand to college campuses by offering banking services to a set of consumers new to the
financial services industry. This market is made up of college students and recent college grads
ranging in age from 18-25. Wells Fargo currently operates in 31 universities and college
campuses across the United States with 6,000-50,000 students. Specifically, the company
focuses on universities made up of students belonging to families with an annual gross income at
least 3 times the national average. Evident on Wells Fargo’s Campus Card Program webpage,
heavy emphasis is placed on states in the West, Southwest, and Southeast regions of the United
State. This target market is important to the growth of the company as it is trying to gain young
customers that are likely to continue using their banking services and make future investments
with Wells Fargo.

As the third largest bank in the US, Wells Fargo faces a large spread of target markets. After
facing controversy and challenges, Wells Fargo is making strides to penetrate new target markets
moving forward in 2018. Please see Table 2 for a brief overview of the target markets described
above.

Summary
After a detailed analysis of company and industry overviews, SWOTT analysis, and target
markets, it is evident that Wells Fargo is amidst a corporate revolution. After a crash in the
financial industry in 2008 and a loss of brand loyalty due to fraudulent practices in 2016, the
company is aiming to re-establish itself as a strong competitor in the Financial Services Industry
as of 2018.

Wells Fargo’s SWOTT analysis reveals a variety of opportunities for the company to grow, as
well as threats and setbacks. As the industry shows a high growth potential for the next 5 years to
come, the company can use its high revenues as a means for growth in small towns. However,
dissatisfied customer relationships and high expansion costs pose as potential setbacks to these
industry trends and opportunities.

Strategies to overcome these obstacles involve penetrating three target markets. In short, these
markets include the multicultural portion of the United States, current customers not yet holding
investment accounts with the company, and college students or recent college graduates. All in
all, Wells Fargo continues to face marketing challenges, but is working towards reaching its
vision to help its customers succeed financially.
Table 1:

Location of Favorable Unfavorable

Factor
Strengths Weaknesses
Internal  Segment specific offerings in personal,  High real-estate expose
commercial, and small industry services  High costs due to expansion and legal charges
 High revenues ($88.39bil) and low risk related to the scandal
 Successful community banking ($12.1bil revenue)  52% dissatisfied customer relationships
Opportunities Threats
 5% annual international growth in the financial  Increased government regulations (Dodd-Frank Act)
services and commercial banking industries  Volatility and unrest in the financial services market
 Room for growth in small towns  Strong competition  JP Morgan & Chase, Bank of
 Increase customer base via acquisitions and America, Citigroup Inc.
External mergers
Trends
 Homeowners are refinancing mortgages
 Large commercial banks are acquiring smaller banks
 Increase in deposit insurance from government regulations
 Closures of 800 branches and advancements in online and mobile banking
 Millennial couples are holding separate bank accounts

Table 2:

Primary Market: Secondary Market: Tertiary Market:

Deposit Checking Accounts
 Millennials born 1977-1994
 Fluent in at least 2 languages
 Multigenerational families from
minority populations such as
Hispanics and Asians
 Fans of the Mexican soccer team
Figure 1 (Gambardella, 2108):
Wealth Management Deposit Checking Accounts
 Millennials and Gen X born  College students and recent college
1965-1994 grads aged 18-25
 Holding a Wells Fargo account  From families with an annual income
with no prior investment accounts 3x national average
 Ready to make a minimum  Attending or attended college in the
$10,000 starting investment west, southwest, or southeast regions
of the US
Figure 2: (Peltz, 2018)

Figure 3 (Gambardella, 2108): Figure 4 (Gambardella, 2108): Figure 5 (Gambardella, 2108):

 References
Freed, D. (2017, November 6). Wells Fargo targets post-boomer customers with
robo-adviser. Reuters. Retrieved from
https://www.reuters.com/article/us-wealth-wells-fargo/wells-fargo-
targets-post-boomer-customers-with-robo-adviser-
idUSKBN1D628A
Gambardella, A. (2018, July). Commercial Banking in the US. IBISWorld
Industry Report 52211. Retrieved from IBISWorld Database.
Wells Fargo. (2018). Company details. Retrieved from Mergent Online Database.
Mintel. (2017, June). Marketing Financial Services--US--June 2017. Retrieved from Mintel
Reports database.
Mintel. (2018, April). American Lifestyles: Markets in Motion--US-- April 2018. Retrieved from
Mintel Reports database.
Odell, P. (2015, February 6). Wells Fargo’s total market approach journey. Chief Marketer.
Retrieved from https://www.chiefmarketer.com/wells-fargos-total-marketing-
journey/

Peltz, J. F. (2018). Wells Fargo launches ad campaign to leave accounts scandal behind.
Retrieved from http://www.latimes.com/business/la-fi-wells-fargo-ad-campaign-
20180509-story.html#
Sloan, T. (2017, November). CEO Tim Sloan introduces the Wells Fargo vision, values, & goals.
Retrieved from https://stories.wf.com/ceo-tim-sloan
Wells Fargo & Company. (WFC) (2018). Profile, business summary. Yahoo! Finance. Retrieved
from https://finance.yahoo.com/quote/WFC/profile/
Wells Fargo Bank. (2018). The Wells Fargo campus card program. Retrieved from
https://www.wellsfargo.com/debit-card/campus-card/schools/