Marketing of Financial Services – Quick Revision Notes

Learning Outcomes

• Clarify market segmentation, effective market research, marketing of financial services, and the marketing mix (4Ps + 3Ps).

Marketing: Definition & Purpose

• Creates and sustains mutually beneficial customer relationships by delivering value.
• Chartered Institute: managerial process that profitably identifies, anticipates, satisfies consumer requirements.
• In financial services: promote & sell products, pinpoint targets, build awareness, comply with regulation and ethics.

Market Segmentation

• Concentrate efforts on specific customer groups to maximise value.
  • Students: saving accounts, education loans.
  • Working adults: car, credit, mortgage, personal loans.
  • Self-employed/SME: business loans, cash management.
  • High-net-worth: gold cards, investments, unit trusts, insurance-linked products.
  • Professionals: investment advice, large mortgages/loans.

Effective Marketing Strategy ( 4 Steps)

1. Situation analysis – assess economy, customer needs, product demand.
2. Customer-focused strategy – segmentation, targeting, positioning, branding; set objectives.
3. Marketing mix – product, price, place, promotion.
4. Implement & control – execute mix, monitor results.

Unique Characteristics of Financial Services

• Intangibility – cannot be seen/touched; value is experiential.
• Inseparability – sold then produced in customer presence.
• Perishability – produced on demand, cannot be stored.
• Variability – quality depends on staff; standardisation needed.
• Fiduciary responsibility – managing client funds; linked to economy & policy.
• Riskiness – abstract, infrequent purchases.
• Government control – heavy regulation.

Marketing Mix for Banks

Product

• Must meet evolving needs: savings, loans, cards, investments.

Price

• Driven by operating cost, cost of funds, risk, market/economic conditions, regulation, competition. Benchmarks: cost of funds, base lending rate, statutory resource cost.

Place

• Distribution via branches, ATMs, digital banking, mobile apps, e-wallets.

Promotion

• Tools: flyers, brochures, banners, mailers, TV/radio, corporate website.

Additional 3Ps for Services

• People – staff competence, attitude, service quality, local knowledge.
• Process – efficient, user-friendly delivery (e.g., simple loan forms).
• Physical evidence – tangible cues (branch ambience, documents) to reassure customers.

Key Takeaways

• Success hinges on precise segmentation, compliant & customer-oriented strategies, and a service-adapted marketing mix.
• Skilled staff and technology-enabled processes reinforce loyalty and competitive advantage.