The power of Marketypes on Share Price

By: Monika Evers

Was NAB's failing performance in the stock market linked just linked to performance or a hidden factor of influence. We believe the latter.

We know the banking industry across the board has been hit pretty hard with sub prime issues and related credit squeezes. But how is it that the NAB is becoming one of the least favoured shares by the marketplace.

To my mind it has less to do with performance and more to do with intangibles. Let me explain.

National Australia Bank was always been the pillar of the business banking. As an "Achiever" linked brand, it literally owned business banking and the “Achiever” brand and image as a result.

Recently however, we have been witnessing a great bank with massive brand value, slowly eating away at its market strength through naive changes to the way it is being positioned. These changes are killing its credibility and showing itself through the only tangible register of brand value...its decreasing share price.

Like many others in business, I was quite surprised at the announcement of the downsizing of its great National Australia Brand  to "nab" on February 13, 2006. Even though the press releases claimed it was done in order to "support the needs and aspirations of our customers".

Quite adventurous, I mused at the time...."owning" what you did with your clients uncleared funds (nab them!). After all, we suspected that banks used our money during those 2-3 days our incoming funds remain "uncleared" in the short term money market.  Actually renaming a bank based on this dubious feature of banking was quite refreshing, even though personally I had misgivings that it would not work for the National Australia Bank, long term interests to say the least.

It now appears my concerns have been vindicated. The move to "nab" has signalled more to the market place than a friendly banter around honesty or being in touch with the common use of the bank's name.

The influence stakes between the big banks has been an interesting watch over the past 6 years all round.

From my perspective ANZ made a few disastrous influence mistakes early on. There was the "crying baby campaign" that outraged women and was quickly replaced by the "we'll pay you $5 if you have to wait in line" campaign. It took many years to recover their lost esteem in the marketplace, including a not so successful repositioning in 2003, aimed at the women's market. However the repositioning had elements that did lay the foundations for its current position and the bank has finally found its feet in the past 18 months as the new "Achiever" business bank in the banking sector. This too has been reflected in its share price of late.

For the past 5 years Bendigo Bank too has been making a steady claim on its position in the banking marketplace. It now is the true “peoples" bank. Yet, with facilities like the ability to do a TT to anywhere in the world from your personal internet banking account, I would have to say it is truly the “modern people’s” bank.

Commonwealth is still floundering for dominance after fighting with the marketplace for years over its contentious image change. Now as time moves on...all is forgotten and forgiven. Image works that way given enough time but the bank is still lagging behind the true potential of its name.

In the end the share price says it all. NAB is weakest and under performing bank share compared to its rivals.

NAB 18% down on CTB Commonwealth shares for past 3 years
NAB 22 % down on BEN (Bendigo) shares for past 5 years
NAB equal to WTC  (Westpac) after a history of 20% superior performance.

Why did I even bother to look up share performance you may ask? It is because, this is the exact result I expected to find and it’s time to start writing the story of the power of Marketypes on share price.

Marketypes control marketplaces and share price

MarketypesTM are what I term the collected perceived values of brand, reflected in a "personality metaphor" that is known and held by your marketplace.

Metaphors are and have always been, the easiest and fastest way to change the  consciousness of a group, deliver change or learnings on mass.

So it makes sense that these Marketypes can capture and transform marketplaces, brand value, market understanding and hold the esteem of any business.

While there are some 84 submarketypes there are only 12 main marketypal groups in any given marketplace. Once you own a Marketype in any market space it is literally influence suicide to move from it or go towards another, like McDonald’s did.

They dictate and hold your market promises but also couch the values of the brand, the esteem of the services and the expectations of the customers and shareholders of performance. Change it and you lose a good proportion of the value of your goodwill along with it. 

Share price is the true indicator of market confidence and the tangible value of any listed company. Therefore if you want to see how successful the marketypal standing of a business is, then look at the changes in their share price.

Take yesterday...driving around I glanced up to see another billboard with "nab"'s new campaign..."know your enemy". I even can't remember the line underneath, but I vaguely remember it was a about some course they were offering. I found myself wondering why a bank would run a headline like that especially when it calls it self "nab"?

“Enemy” and “nab” is an automatic influence, negative cross-match or did they not connect the dots on that one.

Everything that goes out to your marketplace either confirms or detracts from your marketypal positioning. Most of the time correct marketypal positioning is made more by accident than the calculated strategy by Board or CEO that it should be.

What we are currently seeing playing out in the banking marketplace is the dynamics of marketypal positioning.

NAB is divesting itself of its "Achiever" business marketype for a confused offering that covers everything from "mateship" to a "mentor" offering.

"Everyman or the mateship" marketype though is taken, Bendigo Bank has already successfully claimed that and now exclusively owns this space.

"Achiever" is now slowly being taken over by ANZ.

Macquarie Bank now owns the “Creator” marketype and innovative business banking market.

Reserve Bank owns the "Ruler" space but doesn’t really trade like a normal bank, but it sets the interest rate, so who cares, it rules!

Commonwealth by name alone occupies a kind of deputy ruler status, but is still underdeveloped.

It begs the question is brand and influence really so intangible, when you can actually log its impact in share market performance?

NAB is losing its influence and it is sad to watch such a great business mismanage one its greatest influence assets, its Marketypal status.

In their recent annual report NAB stated their goodwill had increased by 3%. I hate to break the bad news, but goodwill isn’t tied to CPI. It is dynamic and reflected in consumer confidence and in also in share value, which in NAB’s case is currently 20% down compared to it’s banking peers.

The other way to think about "nabs" predicament is that they have a 20% share value deficit that they could begin to reverse by simply re-addressing this issue.

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