The marketing/ brand manager then develops a plan to establish and/or strengthen this association via marketing communications. These activities take up a large amount of company resources, in both management time and money. They are undertaken with the hope that if successfully executed, customers will be more likely to buy the brand and/or pay a higher price.

One of the aspects implicit in most positioning literature is that there are some positions with which it is better for the brand to be associated, than others. Some criteria given for this are that the positions are distinct from competitors (ie unique), strong, and prevalent among consumers. To date, little empirical research has been undertaken to test which attributes are better for positioning purposes. This is an important question given that in most marketing communications there is only the opportunity to communicate a simple message that is usually based around a single attribute. A marketing manager, therefore, has to decide upon the best position to communicate, but has little guidance available to make that decision.

This paper tests six different potential positioning strategies for financial services firms. To establish which position was ‘better’, the relationship between the positioning strategies and customer vulnerability was tested. A customer was considered to be vulnerable if they had a high probability of defecting from the brand they currently used. Defection in financial services is when a customer moves most or all of their banking business to an alternative financial institution. This is a key metric for financial services organisations as it can be a large influence on the company’s profitability. The premise of this research is that positioning attributes that are better for a brand to be associated with will have a stronger negative relationship with customer vulnerability. The relationship with customer vulnerability is tested over time, which is important for establishing the potential longevity of any better positioning attributes that are identified.

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Credit cards are given once an account has been approved by the credit provider, after which cardholders can use it to make purchases at shops accepting that card. When a purchase is made, the credit card user agrees to pay back the issuer. The person having credit card shows his will to pay by signing a receipt with a record of the card details and indicating the sum to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the internet, known as a ‘Card/Card holder Not Present’ (CNP) transaction. Electronic checking mechanism permits the vendors to check if the card is valid and the credit card customer has enough credit to cover the purchase in a few seconds, permitting the check to happen at time of purchase. Data from the card is obtained from a magnetic stripe which is called PIN, and more technically is an EMV card. Other types of verification systems are used by e-Commerce merchants to determine if the user’s account is valid and able to accept the charge.

It involves the cardholders providing additional information, such as the security code printed at the back of the card, or the address of the cardholders. Credit card issuers usually exempt interest charges if the balance is paid in full every month, but normally it charges full interest on the entire outstanding balance since the date of each purchase if the entire sum is not paid.