MBNA - Satisfying a Need (1,330 words)
One reason a company may choose to market its product or service internationally is to increase sales, particularly if it is a mature company with little or no room for expansion or growth in its domestic market. Such was the case for U.S. credit-card marketer MBNA, who in 1993 entered the U.K. market after identifying a need it could satisfy.
Global Equals Growth
In the early 1990s, MBNA was a leader in an increasingly competitive U.S. credit card market. The credit culture in the United Kingdom, however, was complacent and underdeveloped. Four major banks—Barclay's, NatWest, Lloyds and Midland—provided the lion's share of U.K. credit cards.
The credit culture was polarized, explains Ian Feber, creative director for Black Hole Creative, a U.K.-based agency responsible for the marketing of the launch. While debt and credit had less of a stigma to the younger generation, the older generation disliked carrying debt. However, they enjoyed the convenience of a credit card. As a result, they always paid off the balance. Because the banks were not making enough off of interest charges, they made up the difference by charging a whopping 23-percent APR as well as a £12 (about U.S. $19) annual fee.
With an offer of a low APR and no annual fee, MBNA saw an opportunity to seize a share of the U.K. credit card market. A team to handle the launch was set in place. Along with Black Hole Creative, MBNA hired a U.K.-based employee to head up the team, and Experian U.K. provided data and analysis.
Starting from Scratch
One of MBNA's successful U.S. programs was an offer for applicants to receive a prestigious Gold Card and a Scenic Card—printed with a scene depicting the state of their choice— for the same account.
Unlike in the United States—where married couples often apply for joint accounts and receive duplicate cards—U.K. law prohibits sharing credit cards.