Financial Services
Financial Services
Introduction to financial
services marketing
References
Characteristics of services:
Intangible
Inseparability
Perishable
Heterogeneity
1.3 The differences between goods and services
Characteristics of services:
Intangible
Inseparability: the service does not exist
until a customer wishes to consume a
service experience; Services are produced
and consumed simultaneously
Perishable: they cannot be inventoried
Heterogeneity: variability in quality
Arguments
Successful segmentation
Customer characteristics:
customer-orientated segmentation
1. Demographic: 3. Geographic:
● age ● country of domicile
● gender ● region or locality
● family relationships ● metropolitan
● ethnic group ● urban v. rural
● religious affiliations 4. Psychographic:
● life stage ● attitudes
● educational attainment ● lifestyle choices
2. Socio-economic: ● beliefs
● income ● motives
● financial assets ● personality type.
● social class
● occupational status
Approaches to segmenting consumer
markets
To be commercially advantageous,
positioning should be based upon product
and service characteristics that:
● are relevant to the target segment
● achieve differentiation from the
competition
● can be communicated clearly to the
market
● can be sustained.
Examples
Advantage:
Clear to both consumer and supplier
A way of influencing consumer behaviour
Implicit or covert pricing
This is a system of pricing in which the actual
price to the consumer is unclear and appears not
to be paid by consumers.
Determination of price
1. Cost-based
2. Competitive
3. Market-orientated
The cost-based approach
1. Marketing strategy
2. Price–quality relationships
3. Product line pricing
4. Negotiating margins
5. Political factors
6. Costs
7. Effect on distributors and retailers
8. Competition
9. Explicability
10. Value to customer.
The marketing mix is a term used to describe the marketing tools
that a manager controls.
4-Ps
Price, Product, Promotion and Place
7-Ps
…+People, Process and Physical evidence
PRODUCT
1. The core. The core product represents the basic need that is being
provided
2. The tangible product. The next layer of the product is usually
described as the tangible product, and at this level the organization
will make the product identifiable by adding certain features, facilities,
brand name, etc.
3. The augmented product. The third layer, which is described as the
augmented product, is usually used to refer to those features which
organizations add to make their products distinct from the
competition.
4. The potential product. The final layer of the product is described as
the potential product. This refers to features that are either very new
or not yet available, but which can potentially be added to a product
to make it very distinct.
Promotion
Advertising
Below-the-line advertising
Personal selling
Personal selling is probably most common in corporate
markets, but is also widely used in personal markets in
relation to some of the more complex financial services.
Publicity/public relations
Reduced price.
Competitions.
Couponing
Distribution channels
● Specialist financial services branch outlets, such as
banks, building society branch offices, credit union offices
● Non-financial services retailers, such as supermarkets,
electrical goods, motor dealers, clothes shops, department
stores
● Quasi-financial services outlets, such as post offices, real
estate agents
● Face-to-face sales channels, such as financial advisers,
direct sales-forces, credit brokers, insurance agents
Distribution channels
● Bancassurance
● Telephone selling via both outbound and inbound call-
centres
● The Internet
● Direct mail
● Direct-response advertising, including newspapers
and magazines, commercial radio and television
● Affinity groups, such as employers, trades unions,
football clubs, universities.
LOGO
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