South-Western - Management  
Ad Beat: BofA’s Gentle Lecture on IRA’s Nuts and Bolts
Topic Strategy
Key Words Differentiation, strategy
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News Story

Bank of America’s new ad campaign, aimed at the affluent customer with assets of between $100,000 and $3 million, attempts to demystify IRAs using subtle, gentle humor. The ads are meant to give customers the belief that Bank of America offers knowledgeable, trustworthy advice for consumers who are planning their retirement.

The ad agency that produced the ads said that findings from focus groups told them that many people did not have even rudimentary knowledge about IRAs. The campaign’s central theme is to differentiate the bank by positioning it as a destination for worried investors with lots of questions and uncertainty about IRAs.

Critics note that the ads do not give a lot of detail explaining why Bank of America’s IRAs are better than other bank’s IRAs.

Questions
1.

What strategy is Staples implementing as it enters the Chicago market?

2.

Define differentiation, giving an example of a company that does a good job of differentiating its product. Why is differentiation a profitable strategy?

3.

If Bank of America were to choose cost leadership or focus as its competitive strategy, what would it emphasize in its ads, instead of education? Give an example for each strategy.

Source “Ad Beat: BofA’s Gentle Lecture on IRA’s Nuts and Bolts,” Banking Wire, April 10, 2008 p20.
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