Southway Financial Corporation

Because of Southway's outstanding performance, it attracted the interest of NatEast Bank Corporation, which acquired Southway in a stock exchange in November 1993. Concerned that the level of customer service would decline as Southway became integrated into the larger organization, several depositors withdrew their funds after the acquisition. This research examines ways in which this defection can be mitigated, and considers how NatEast can ease the transition of Southway into the NatEast fold.

The goal of the marketing program will be to attract new customers to the NatEast family and to bring back customers who left when NatEast acquired Southway. Specifically, NatEast will hope to see a 15 percent increase in deposits from new customers, and

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st's prices are determined by the actions of the Federal Reserve, which dictates the federal funds rate and the discount rate. Large institutions, such as Citibank and Chemical Manufacturers', base their prime rates on these Fed rates, and smaller institutions typically follow the larger banks' leads. In this way, nearly all financial institutions offer similar products at similar rates. Because of this strategy, financial products are generally perceived as commodities by many consumers. This perception can work in NatEast's favor when trying to win back customers lost as a result of the acquisition. Since Southway excelled at customer service, and because price is not a significant differentiator among financial products, Southway and NatEast are well-positioned to establish customer service as a differentiator in consumers' minds, and can set out the ways in which NatEast provides higher customer satisfaction than its competitors. This approach requires the commitment of all employees, beginning with those at the highest level of NatEast and Southway. The biggest obstacle that NatEast has to overcome is the perception that it is a large, heartless institution committed only to profit and not to customer service. Promotio
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Approximate Word count = 2180
Approximate Pages = 9 (250 words per page)