MEMORANDUM

To: Victor Piscitello, Kaitlyn NG

From: Team 78: Sam Alberts, Kameron Barzegar, Emily Brey, Lorena De Loera, Gianni Ristagno
Date: November 20, 2019
Subject: Goldman Sachs Marketing Issues and Solutions

Goldman Sachs is one of the front runners in the investment banking. Over the years, Goldman
has faced many scandals, and the company needs to maintain good public perception when under
scrutiny. The marketing issues we identified regards the way Goldman handles these scandals,
the most recent being the 1MBD scandal. The way Goldman has dealt with public perception,
corruption with foreign politicians, and lack of ownership all have tainted the company's
reputation. In this document, we will be providing recommendations to solve these marketing
failures to ensure that scandals in the future are handled more effectively.
Industry Description
Goldman Sachs competes in the investment banking industry (NAICS code [551111] 523110).
The investment banking industry is looking bright and should be remain in the growth stage for
the next five years as the industry will benefit from growing interest rates, increasing service
demand, and trade volumes (Gambardella, 2019). Goldman Sachs main competitors include:
JPMorgan, Morgan Stanley, and Bank of America. On a macro level Goldman Sachs’
competitors include: Barclays, Deutsche Bank, and UBS Group AG, for companies seeking
financial services. In the market share, Goldman Sachs holds 8.4% of the market (Refer to Figure
10). Overall, for Goldman Sachs to distance themselves from its competitors, their relations with
its clientele must be substantially better than its competitors.
SWOTT Analysis
Some strengths of Goldman Sachs' are career development, geographic presence, and its
operations performance, and some trends are big data, legal issues, technology, and student loans
(Figure 1). The workforce stays highly skilled from constant training programs offered by
Goldman. Countries outside the U.S. provide 40% of Goldman Sachs' revenue (Marketline,
2019). The operating margin ratio and net profit margin ratio have both increased recently, thus,
boosting investors' confidence and improving growth prospects. An article from Deloitte states
that big data helps investment banks evolve to mitigate and assess risks. Big data is the
availability and growth of data that people use and create daily. Legal controversies and scandals
are bound to happen in a company that transfers billions of dollars daily, such as Goldman Sachs.
Since the repayment benefit began repaying employee's student debt, this has been a large trend
for Goldman Sachs (Siew, 2019).
Top Three Target Markets
The primary target market is the main market identified with Goldman Sachs whom are high net
worth individuals with an annual generated income of $250,000 or more with the education of at
least a bachelor's degree or higher. The company offers financial services for these individuals
seeking maintenance of their finances. As seen in figure 9, asset management, mergers and
acquisitions, and financial services for larger organizations make up the "other" 35% (35.6%
exactly) of the market.
The secondary target market are the large financial operators who seek assistance in asset
management and trading services. These services include: "...underwriting and securities sales to
manage risk and raise capital, executing client trading orders and providing related financing,
research, financial advisory, and wealth-management services" (Gambardella, 2019). Also, these

companies' services and size are likely linked, noting that when company size increases, the
number of corporate lending and financial services available also increases.
The tertiary target market included is in the third-largest sector are companies associated with
"oil and gas, pipelines, exploration and production, and alternative fuels, among several other
activities" (Gambardella, 2019). These companies seek similar financial services as those in the
larger two markets; however, they may not receive similar services due to a relatively smaller
size in comparison (Figure 2).
Problems & Solutions
1. Install Safeguards
In having any form of correlation with corrupt foreign politicians, Goldman Sachs creates a
negative outlook not only to its investors, but the general public. A solution to this is to install
safeguards to better monitor relationships between Goldman employees and foreign politicians.
These safeguards would be more frequent audits to ensure employees are following lawful
procedures and better monitoring of employee financials. For alternative solutions to these
issues, refer to Figure 3. If we have not hired a crisis communication specialist by October 1,
2020, the contingency plan of implementing an improved protocol to answer questions regarding
scandals will be implemented.
2. Hire Crisis Communication Consultant
After a scandal occurs, like 1MBD, negative headlines hit the media, our shareholders become
concerned, and our stock drops. To improve public perception, we recommend that Goldman
hires a crisis communication consultant to help formulate a plan to better address the media and
our shareholders (Refer to Figure 11). The crisis communication consultant will help improve
public perception by sharing Goldman's side of the story before the press gets a hold of it. If this
does not have the intended outcome by October 1st, 2020, Goldman should use its current
communication team to own up to the scandal and be transparent and apologetic in the eyes of
the public.
3. Hire Crisis Communication Consultant
The final marketing issue is having a lack of ownership when a scandal occurs. For this issue, we
also recommend that Goldman hires a communication consultant. The communication consultant
will aid Goldman in strategizing ownership of responsibilities by appropriately apologizing
where needed, while maintaining an honest and transparent image. This will highlight our
trustworthiness and prove Goldman is in line with their values. If this recommendation does not
have intended outcome by October 1st, 2020, we recommend that Goldman implement a protocol
to answering questions about the scandal. This protocol will coach executives and employees on
how to properly address questions regarding scandals.
Plan of Action
Goldman Sachs should plan to implement these solutions as soon as possible to better the public
perception of the company as shown by the SMART goals and GANTT chart (Figure 6,7,8).
These solutions will help Goldman Sachs get in front of negative media, prevent scandals from
occurring, and own up to problems within the company. Overall, this should raise the company's
stock prices because the public and shareholders will have better trust in Goldman Sachs.
Goldman Sachs is a large investment bank that struggles to maintain a positive public perception.
This perception directly relates to how Goldman Sachs handles scandals with the public and their
shareholders. This issue has been discussed, and solutions to this problem have been provided
throughout the memorandum and the attachments. If you have any questions, please contact me
at ebrey@email.arizona.edu.

Attachments

Figure 1: Goldman Sachs SWOTT Analysis Chart

Strengths Weaknesses
• High-level customer satisfaction • Fraud cases
• In-house innovation has increased product • Legal issues
innovation • Ethical issues
• Human Capital-strong framework for • Controversy
career development • Cost efficiency
• Operating performance • Non-interest revenue has declined 8.9%
• Prominent geographic presence in over 30 • Net-interest revenue has declined 15.6%
countries
• Diverse client base
Opportunities Threats
• Online platform engaging new customers • Financial crisis
• Internet banking operations broadens • Rogue employees
funding • Negative press
• Global expansion of investment banking • Regulation and legislation changes
industry expected to grow 2.92% • Nearly 700 firms to compete against
• Demand for wealth management rises to • Policies lowering interest rates
67% ownership of people over age 55
Trends
• Transition to Big Data / Risk
• Legal issues
• Technology
• 26 million has gone towards eliminating student loan debt

Figure 2: Target Markets Breakdown Chart

Primary Target Secondary Target Tertiary Target
Market Market Market
Target Description High net worth High-end financial Energy and power
individuals seeking operators seeking operators seeking
wealth management investment financial services
and financial advisory management
services
Initial (N) 6 million individuals 30,000 operators 12,000 operators
Segment Basis 1 $250,000+ N/A N/A
(Level of Income)
Segment Basis 2 Bachelor's Degree or N/A N/A
(Education Level) Higher
Segment Basis 3 N/A About 200,000 About 10,000
(Average Size of employees employees
Operator)
Segment Basis 3 Individuals Operators Operators
(Operators or
Individuals)
Final Target Market About 1.7 million About 1,500 operators About 1,000 operators
Size

Figure 3: Identifications and Solutions of Marketing Problems

Problems Solution 1 Solution 2 Solution 3 Recommended Contingency Solution
Solution
Corruption Disconnect Place blame on Ensure that Solution 3 If solution 3 does not
with from the rogue executives work by 10/1/2020,
foreign situation and employees thoroughly solution 1 should be
politicians interactions understand implemented to not
with foreign who is with foreign
politicians who being politicians who have
may negatively placed in wrong the company
affect company these before and blame the
image situations politician. Also have
a screening process
before working with
another foreign
politician
Public Immediately Hiring Owning up Solution 2 If solution 2 does not
perception responding to communication to the work by 10/1/2020,
media consultant blame solution 3 should be
implemented to use
current
communication team
and take the blame in
the eyes of the media
and public
Lack of Hire Implement Place blame Solution 1 If solution 1 does not
Ownership communication better protocol on rogue work by 10/1/2020,
specialist to answer employees solution 2 should be
questions implemented and use
the protocol to answer
difficult questions and
ensure executives and
employees fully
understand the
protocol

Figure 4: Competitor Breakdown Chart

Company Current Strengths Weaknesses Competitive Advantage
Name Market
Cap
J.P. $371.36 • Large market • Fee based business • Scale
Morgan Billion presence model • Diversification
Chase & • Diverse product • Overdependence on • Risk
Co. portfolio North American management
• Leading/positive market
customer franchise • Failure to reach
target markets
effectively (failure
of Finn mobile app
targeted to the
millennial segment)
Morgan $69.3 • Asset quality • Lawsuits and • Sustainability
Stanley Billion • Business litigations • Technology
Performance: Wealth • Cost efficiency • Distribution
Management • Brand erosion Channels
Sector
• Investment in
technology
for infrastructure
Bank of $49.31 • Large market • Net interest margin • Organizational
America Billion presence in the U.S. • Low business development
Corporati • Asset quality diversification • Organizational
on • Marketing to Merrill • Overdependence on design
Lynch clientele due U.S. market
to acquisition
• Cost efficiency

Figure 5: Micro and Macro Competition

Micro Macro
• JP Morgan Chase - loans, retirement plans, • Barclays - credit cards, banking, insurance,
investments, personal banking mortgages, investment banking
• Bank of America - checking, savings, credit • Deutsche Bank - savings, mortgages,
cards, loans, businesses, student banking personal loans, credit cards, retail &
• Morgan Stanley - brokerage, investment investment banking
advisory, retirement plans, financial and • HSBC Holdings Plc. - commercial banking,
wealth planning investment banking, global banking, retail
banking, wealth management, private
banking
• UBS Group AG - investment, retail, and
corporate and institutional banking, wealth
management, and asset management

Figure 6: Timelines

Problem 1: Corruption with Foreign Politicians

Problem 2: Public Perception

Problem 3: Lack of Ownership

Figure 7: GANTT Chart

Solution 1: • Solution 2: • Solution 3: •

Figure 8: SMART Goals

Solution 1 Solution 2 Solution 3
Specific Install safeguards to Hire a communication Hire a communication
monitor interactions consultant in crisis specialist in crisis
between employees and management management
foreign politicians
Measurable Ensure that the Observe if public perceives Observe time spent
safeguards are not evaded Goldman in a better way discussing scandals on
and all money in foreign based on media earnings calls and stock price
countries is not being rising
transferred elsewhere
Achievable Install safeguards in Share Goldman’s side of the Work with executives to
computer systems and scandal before the media gets ensure they are responding
have a protocol for ahold of the story elsewhere correctly to the shareholders
employees to follow and when asked questions
ensure they do
Relevant Saves the company Ensuring the public preserves Ensure shareholders trust
money that is stolen, Goldman as a trust-worthy Goldman, therefor making
prevents lawsuits, and company they want invest in them less likely to leave and
ends bad publicity boost revenue
Timely Have the safeguards in Hire this consultant by Hire this consultant by
place by December 31, December 31, 2019 and train December 31, 2019 and train
2019 executives by March 7, 2020 executives by March 7, 2020

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