Product Life Cycle
H&R Block began its introduction stage in 1955 when two brothers, Henry W. Bloch and Richard A. Bloch decided to start their open tax preparation service to prepare taxes for people in their hometown. Very soon, word spread around and their customer base increased. H&R Block then entered its growth stage the business grows to become a brand and a franchising company. They open branches all over the United States, and international branches in Canada and Australia. Currently, H&R Block tax preparation service is in its maturity stage. It has been in this stage for a long time, and it will remain in that stage for a longtime to come. This is because the company has over 50 years of experience in taxes to back their services, and has remained committed to provide its customers with superior customer service and a pledge to stand behind its tax services provided to customers at all times. In its maturity stage, the service has grown from just being offered at retail offices to being offered online and at home using software.
Why Product Selected
I selected H&R Block Tax Preparation Service because; tax preparation service is a service that every person living in America that has a means of earning income needs to use to prepare their tax return. Everyone is obligated by the law to report their income to the IRS and to pay taxes on the income every year. I chose H&R Block Tax Preparation Service because the company has 55 years of experience and expertises in helping people file their tax returns. Lastly, I selected this service because it’s an important area of study in my major. I am an Accounting major and taxation is a huge part of the studies.
Market of Product
Customers for Product
H&R Block Tax Preparation service is used by individuals who have a source of income every year and are required to report their income to the IRS so as to pay taxes. Normally customers that are 18 years and above who have jobs use the tax preparation service. Also customers that want the help of tax experts when filing their tax returns also uses the services. In addition, small businesses, partnerships, and corporations use the service to report their yearly earnings to the IRS. Lastly, since the IRS requires people who earn more than $5000 to reports those earnings, the service is used by individuals that make more than $5000 in a year.
Why Product Needed
The H&R Block Tax Preparation Service is needed because everybody who is a citizen or residence of the United States is obligated by law to pay income taxes on their income they make every year. Since a person’s marginal tax rate may change yearly because of differences in earnings, people need this service to prepare their tax returns. This enables the person to find out whether he or she has paid more income taxes and must get a refund or has paid less and needs to pay the IRS the difference.
How Product Used
The Tax Preparation service is used by customers to file their tax returns to the IRS. Customers have to report income and then their expenses. Then other deductions and exemptions that the IRS has set is then used to determine the customers’ taxable income. The tax table is then used to find the customer’s tax rate based on their taxable income. The H&R Block tax service makes it easy for customer to file their taxes since their offices, software, and online systems do all the calculation for the customer.
When Product Bought
Customers normally patronize the H&R Block tax preparation service annually during tax season. Tax season is usually from January 1st to April 15th of every year. Since many people are not able to file their returns during this time, they usually file an extension that allows them until October 15th to file their tax returns. This means the service is used between January1 and October 15 of every year.
Product Position
Competitors Offering Products
H& R Block has many competing companies that it competes with for clients. Other companies that offer the tax preparation service include Jackson Hewitt, Liberty tax, Turbo Tax, and other local CPA firms.
Competing Products Features/Capabilities
Jackson Hewitt’s tax preparation service has two options that the customers can choose from. The first option is in-office service, where customers get the tax returns done in Jackson Hewitt’s tax retail stores. In the tax retail office, a tax preparer files the customers’ tax returns for them, and customers are assured with a free accuracy guarantee. The tax preparers also provide customers with free audit assistance if the customers are ever audited by the IRS and amendment of tax returns of customers previously filed tax returns. The second option is for customers to file their tax returns online. The online option provides customers with the ability to prepare their own tax return by following a quick and easy guide wizard. There are also support agents online that are always ready to help customer when the need arises. In addition, Liberty Tax Service also provides its customers with two ways to file their tax returns. The first way is for customers to go to any of the Liberty tax’s offices and get the help of a tax professional to file their returns. At the office, the tax professional will ask the customers some questions in order to provide the customer the biggest refund possible. The tax professionals are also there to provide the customers with audit services. The second way is for the customer to prepare their own tax returns online with Liberty tax’s e-Smart. The customers file their own tax returns by following a step by step instruction. Furthermore, Turbo tax is an online tax service company that provides its customers with a step by step guide in filing their own tax returns. They also offer their customers audit support and online agents to answer customers’ questions.
How Competing Product Different
Comparing H&R Block to Jackson Hewitt, there are a lot of differences between the tax preparation services offered by the two companies. One difference between H&R Block and Jackson Hewitt is that, H&R Block has been in the tax preparation services for a longer time than Jackson Hewitt. H&R Block as been in the tax preparation service for 55 years while Jackson Hewitt for 28 years. This implies that H&R block has more tax expertise to offer it clients. In addition, another difference between H&R Block and Jackson Hewitt is that, H&R block tax preparation service provides customers with three ways to file their tax returns while Jackson Hewitt provides them with two ways. H&R Block customers can file their tax returns using a tax retail office, At-Home software, and online software. On the other hand, Jackson Hewitt customers can file their tax returns by only using a retail office and online software.
Competing Products Evaluations
Jackson Hewitt’s tax preparation service offers its customers variety of ways to get their tax refunds. Customers can get their refunds as a direct deposited to their personal account, a bank issued check, and pre-paid card (ipower card). Jackson Hewitt tax preparation service also provides the customers that owe money to the IRS a flex-pay program to pay their debt. In addition Turbo tax provides customers with the best resources for fling their tax returns online. Since turbo tax is an online company they make sure they provide their customers with all the resources that will make their tax preparation easy and accurate. Turbo tax also has online tax agents that are ready to assist customers with their tax questions and problems.
All Products Market Share
H&R Block has the majority of the market share compared to the other tax preparation companies. During the year 2005 H&R block had 21% of the market share, Jackson Hewitt had 4%, Liberty tax had 1%, and major CPA firms had about 14% of the market share. In 2009, H&R Block had about 15.8% of the market share of US tax returns prepared. With the introduction of new tax companies and software, H&R Block’s market share is declining.
Product Marketing Channels
Current Product Marketing Channels
H&R Block uses a variety of marketing channels for its Tax Preparation Service. For instance, even though H&R Block as it own tax retail office around the country, they also sell franchises to individual people who want to open their own retail office. H&R Block entices people to acquire their franchise by offering the franchisee start-up loans, training on tax preparation, and advertising in the media. H&R Block also uses Employer Solution Program has part of its marketing. Employers that participate in this program assist their employees with filing their annual tax returns. The companies’ employees get the chance to file their tax returns with H&R Block at special prices and discounts. Some of the participating companies include Time Warner, AOL, K-Mart, Sprint, Hewlett Packard, WorldCom, and US Airways. In addition H&R also uses retail stores such as Wal-Mart, Target, and Best Buy to sell the tax preparation software.
Competitor(s) Marketing Channels
For competitors like Turbo tax, the marketing channel they use is providing the service directly to the customers online. Turbo tax service is received by the customers at their own convenient time. It can be received whenever, wherever, and however they want it. In addition Turbo Tax sells its tax software through retailers like Target, Wal-Mart, and Best Buy. Furthermore, Jackson Hewitt gives customers a 25% off coupon, which customers can use to get a discount off their payment when they prepare their tax returns at a Jackson Hewitt tax office. In addition, Jackson Hewitt sales its franchises to individuals who wants to start a tax business. They provide their franchisees with start-up and on-going training, marketing campaigns, and field support from a team with tax industry experience.
Advantages/Disadvantages of Current Channels
Some of the advantages of H&R Block’s current marketing channels are: The Employer Solution Program provides H&R Block with more customer base without spending valuable time searching for customers. The franchise selling also provides them the opportunity to increase their tax retail offices and thereby increasing their profits and revenue. In addition, the availability of Spanish speaking tax professionals in the tax retail office helps H&R Block increase its Spanish customers. On the other hand, the disadvantages of H&R Block’s current channels are: The Employer Solution Program reduces the company’s possible profit since the program is usually offered at a discount price. Another disadvantage is that the company may lose money if any of its franchise stores does not succeed. H&R Block may also lose money if the franchisees do not pay back the money H&R Block loaned to the franchisees.
Possible Alternative Channels
A possible alternative channel that H&R Block can use is offer customers who file their tax returns at tax retail offices a discount on their payment due. In this case customers will be enticed to use their services. Another possible channel is offer customers that refer new customers to their tax retail offices an incentive such as a discount on their tax return preparation. This channel will help H&R Block to increase its customer base.
Product Marketing Program
Overall Marketing Program
H&R Block’s overall marketing program has centered on the company’s slogan “Get It Right”. It is focused on communicating the company’s expertise to the public and also the company’s reputation of accessibility. This is to ensure customers that they can feel comfortable doing business with H&R block and not worry about there being a mistake in their tax returns or even not using all deductions available to the customers. The marketing program also includes advertising on the media such as the radio, television, newspapers, on the web.
Program Changes Made
H&R Block had to change their marketing program a little bit in order to communicate to the public on the recent changes in the tax laws and regulations by the IRS. For instance most of H&R Block’s advertising for this tax season had to do with customers needing answers to questions concerning these recent changes in tax laws. In addition, the company opened a customer service center called “H&R Block’s Tax Talk Line” where people can call and get their tax questions answered for free. Another change is H&R Block working with Apple in order for people to get tax answers on their iPhone, iPodtouch, and iPad from iTunes.
Product Advertising Program
H&R Block’s Tax Preparation Service is advertised on the radio, television, print media, and the web. It advertising focuses on helping people getting the right refunds they deserve. Most of its advertising focuses on communicating its 55 years in business and by so doing, it tells customers of the expertise they have over the other tax companies that have been in business for less than twenty years. Furthermore, part of its advertising focuses on answering questions customers have about their tax returns. The television advertising for example focuses on customers’ questions like, buying a new house, changing jobs, having a baby, and job hunting expenses.
Product Branding
H&R Block is a well know brand all over the country. The name has given the company a lot of brand equity. It is a brand that customers have come to trust over these past decades the company has been in existence. In addition, the company’s logo is a reminder to customers that, the company offers services and products that will meet customers’ financial needs. Lastly, the company slogan “Get it Right” assures customers that their tax returns will be prepared without mistakes and that the customers will receive the tax refund due to them.
Product Marketing Success
H&R Block’s partnership with companies like Sprint, Amazon, and Time Warner through the Employer Solution Program has enabled H&R Block to gain access to these companies’ customer bases, which has led to an increase in H&R block’s customer base. In addition these companies also have strong brands and their brand recognition among customers has reflected on H&R Block and by so doing, it has increased H&R Block’s brand identity among customers.
Exhibits
References:
- Kelli Ramey, Director of Brand Promotion, H&R Block, 816-854-5110
- Angela Kemp, Financial analyst, H&R Block, 816- 854-4257
Market share:
Citation1:
Hewitt, Jackson. “Jackson Hewitt Tax Service.” Jackson Hewitt Inc. http://www.jacksonhewitt.com (accessed April 1, 2010).
“Liberty Tax Service.” Liberty Tax Preparation Service. http://www.libertytax.com (accessed April 1, 2010).
Intuit. “TurboTax.” TurboTax Tax Preparation Software. http://turbotax.intuit.com (accessed April 1, 2010).
Citation2:
“The Wall Street Transcript: Questioning Market Leaders for Long Term Investors.” Wall Street Transcript (02/21/2005): 5. http://www.twst.com/pdf/ABC603.pdf (accessed April 3, 2010).