Presented by:Prof. Sunidhi jainProf. Harpreet kaurKCW Sidhwan Khurd

Marketing of financial services

Marketing Financial Service

MARKETINGMarketing is the process of determining consumerdemand for a product or service, motivating its saleand distributing it into ultimate consumption at aprofit.FinancialThe matter concerned with money is called finance.Servicesa service is any act or performance that one party canoffer to another that is essentially intangible and doesnot result is the ownership of anything. It’sproduction may or may not be tied to physicalproduct.

S.No. Physical Goods Services1 Tangible Intangible

2 Homogeneous Heterogeneous

3 Product and distribution separatedfrom consumption

Production, distribution andconsumption re simultaneous process

4 A Thing A activity

5 Core value produced factory Core value produced in buyer-sellerinteraction

6 Customers do not participate in theproduction process

Customers participate in production

7 Can be kept in stock Cannot be kept in stock

Intangibility, inseparability and heterogeneity are manifestedat both strategic and tactile levels in services marketing.Marketing strategy provides the organization with sustainablecompetitive advantage a suitable competitive advantage inthe markets it operates.Organization should understand consumer needs andidentifies how those consumers should be grouped intodifferent market segments.Product attributes, pricing decisions, methods of distributionand communication should all seek to reflect the chosenposition.

Provides services

Aimed to satisfy customer’s needs and wants

Needs and wants may be non financial in nature

Competitive element, efficiency and effectiveness

Organizational objectives are still the driving force

Commercial objective to make profit

Social objectives

0

5

10

15

20

25

30

35

40

45

currency deposits claims ongovernment

investmentin shares &debentures

contractualsavings

1998-1999

1999-2000

2000-2001

2001-2002

Cannot exist without customerCreate, win and keep customersOrganizational design should be oriented to be customerDeliver total satisfaction to the customerCustomer satisfaction is affected by the performance of all the personnel of the bank

Key concept in the modern marketingConsidered to be core of marketingIt is the set of tools that the firm uses to pursue its marketing objectives in the target marketDecisions must be made for both the distribution channels and the final consumers

Old New

Product Consumer

Price Cost

Place Convenience

Promotion Communication

Wining companiesare those that canmeet customerneeds economicallyand conveniently andwith effectivecommunicationServices marketingmix- 7P’sProduct, Price,Promotion, People,Physical Evidenceand Process

PRODUCTA product is anything that can be offered to a market for attention,acquisition, use or consumption that might satisfy a want or need.

PRODUCT PERSONALITYTHE CORETHE ASSOCIATED FEATURESTHE BRAND NAME & LOGOTHE PACKAGE AND LABEL

PRICINGPrice is the sum value of all the values that consumers exchange for thebenefits or having or using the product or service•Different forms- goods bought, hire charges, tution fees•Dynamic pricing- varying prices•Flexibility

DISTRIBUTION CHANNELMarketing channels are sets of independent organizations involved in theprocess of making a product or service available for use of consumption

PROMOTIONPromotion refers to raising customer awareness of a product or brand,generating sales, and creating brand loyalty.

Blending of 7 p’s with financial services:

PRODUCT:Convenience of paying duesKeeping recordsTransferring funds.Various depositsLoans& advancesConsultancy servicesInternational bankingsafe depositsCredit cardPRICE:In India, banks adopt administered pricing structure to some extent as the deposit & lending rates are prescribed by RBI.

PROMOTIONAll the promotional tools are essential right from the stage of newproduct. The objective is to make people aware of new product, topersuade customers, to remind customers, build image of the bank.An advertisement in bank is a promise. E.g.: newspaper, radio,television, magazines & hoardings.Sales promotion: brochures, calendars, diaries, pen stand.Publicity: customers tends to believe a news item rather than anadvertisement. WOM an important promotional tool.

PLACEMaking the banking service available & accessible to the customer.Selection of suitable location for the branch. Should have soundavailability of transportation, communication, electricity & othernecessary facilities for the smooth functioning of the branchPEOPLEBanking product cannot be separated from the people whomarkets them.Banks adopt internal marketing in order to make the wholebusiness customer-oriented.The product is known to the employees before they are effectivelymarked to the customers.PROCESSAccounting procedure for putting through a transaction. Throughautomation of transactions, accounting procedures & data handling.E.g.: loan application, clearance of cheque.

PHYSICAL EVIDENCEImagine designs of bank brochures, flashy cheque books.Attractive brand names, logos, symbols.Customers perception of service quality.

The FutureService marketing management through managing customerinterfaces, providing value for money products; value pricing andproduct innovation will separate the also-rans from the best. Thefuture technology road map (trajectory) will be full branchautomation: networking and expansion of ATMs and theintroduction of core banking solutions in branches. The state of arttechnology which is to be provided has to be backed by a committedworking force for its success - a work force committed to quality,single window delivery of service and in developing customerrelationship by delivery of high quality personalized professionalservice.