CASE STUDY - OCBC
OCBC Bank is the longest established Singapore bank, formed in 1932 from the merger of three local banks, the oldest of which was founded in 1912. It is now the second largest financial services group in Southeast Asia by assets and one of the world’s most highly-rated banks, with an Aa1 rating from Moody’s. Recognized for its financial strength and stability, OCBC Bank is consistently ranked among the World’s Top 50 Safest Banks by Global Finance and has been named Best Managed Bank in Singapore and the Asia Pacific by The Asian Banker.
OCBC Bank’s key markets are Singapore, Malaysia, Indonesia and Greater China. It has more than 610 branches and representative offices in 18 countries and regions. These include the more than 340 branches and offices in Indonesia under subsidiary Bank OCBC NISP, and over 100 branches and offices in Hong Kong, China and Macau under OCBC Wing Hang.
Understanding OCBC’s Objectives
We held our meeting with OCBC Global Consumer Financial Services department. OCBC’s credit card base expanded significantly to approximately half a million cards by end of 2002, following the launch of the co-branded Robinsons credit card. In 2008, several key initiatives were launched in Singapore and across the region as part of our continuing focus on service innovation and excellence. For example, SmartChange credit card feature. OCBC target is to be the top 3 banks or credit cards. In the same year credit card business grew 8%.
We positioned ourselves as a marketing extension of OCBC. To value-add, we discussed with OCBC marketing team their objective. They said that although their credit card base has grown, their spending has not. So, to encourage spending they want to drive more awareness with their retailers and get their support to drive more OCBC credit card usage with their cardmembers. However, many retailers have multiple partner bank card promotions and OCBC retailer charge rates are among the highest across consumer electronic retailers.
We recommended for OCBC to offer a gift for every minimum spend charged on their cardmember through the retailers.
For a minimum spent of $1,000 charged on OCBC credit card, the retailers would give away a wireless headphone worth SGD$99. The real cost a fraction (SGD$20) of the product perceived value.
OCBC agreed to the project.
We recommended OCBC customization in terms of product design, color, weight, packaging and materials used for the wireless headphones. After hand-drawn sketches were shown, we worked with our factory to produce working prototypes. At the product development stage, the most important is to run through with OCBC the cost and benefit analysis, we determine our price based on an open and transparent overview of the project cost. From the working prototype, we demonstrated to OCBC how the transmitter can connect with various TV brands and the headphone (receiver). At the same time, we calibrated the FM frequency to improve the sound reproduction from the headphones. After product evaluation is complete we document every feedback that OCBC has on the final product. We improved the initial prototype and got our factory to manufacture a final sample – we call it the golden sample. After the golden sample is confirmed. We then worked on the packaging box. Perhaps one of the most important aspect of the project. The packaging box was a crucial component of the gift and we developed a packaging box that looks premium yet a competitive price. With OCBC’s final agreement on the final sample we move on to the next stage – Production.
Before production started, we shared with OCBC our factory inspection report. The report showcase a summary of our factory’s capabilities and experience in managing global projects. The lead time at start of discussion was forecasted at 30 days for 10,000 wireless headphones. At every stage of production, we give a timely update to OCBC on the completed production line. Example, after the headphone parts are constructed we relayed the information to OCBC. In total, there were 20 different production lines to produce the wireless headphones. We took photos of each stage of production and informed OCBC.
For quality assurance and control, every material used for production is examined by our QC team. And in total there are 8 QC tests that are done for a completed wireless headphone. One of the critical test is the radio connection between the transmitter and the receiver (headphone). One of the challenge we solved was to calibrate the radio frequency that is acceptable in Singapore’s IDA telecommunication law; and at the same time offer good quality sound reproduction.
We completed the production in 25 days, 5 days ahead of time. We took a full day for quality inspection. Every headphone was inspected and after getting approved marked with a “QC passed” label. After updating the QC report to OCBC, we moved on to the next stage – shipment.
Product Shipment and Logistics
We stored boxes of wireless headphones in 5-ply carton boxes (we avoided 3-ply to give a better protection for the gift boxes). Each carton box holds 20 wireless headphones and are printed with our standard labels. We informed our shipping company to be extra careful when handling the carton boxes, and at the same time installed wooden crates for added protection. The shipment from China to Singapore took around 10 days.
The final push was to inform our Singapore shipping and logistics vendor to handle the stocks with care at the port during retrieval. With all shipping documents prepared, our wireless headphones are finally shipped to our warehouse.
OCBC was very pleased that the project was completed in time. We delivered the wireless headphones to all OCBC retailers. In 3 months after they ran the cardmember promotion, their cardmember usage sales posted healthy growth.
All wireless headphones were offered a 1 year warranty. We provided a 1-to-1 exchange within the warranty period. In 1 year, there were about 25 units exchange.