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  • Topic: Marketing, Bank, Marketing strategy
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  • Published : January 28, 2013
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1
Marketing and financial
services: an overview

Contents
• Learning outcomes

6

• Introduction

7

• The financial services industry

12

• Marketing

13

• Marketing services

16

• Financial services

20

• Technology

22

• Corporate social responsibility

22

• After the credit crunch

22

• Summary

23

• References

24

• Further reading

24

• Exercises

25

• Case study: Long live mutuality! The friendly society

25

March 17, 2010 17:26

MAC/FARQ

Page-5

9780230_201187_03_cha01

6 d MARKETING FINANCIAL SERVICES

Learning outcomes
By the end of this chapter, the reader will be able to:
• Understand how marketing theory underpins the marketing of financial services
• Appreciate how recent thinking in marketing and services marketing applies to financial services
• Be able to identify key issues for marketers of financial services

March 17, 2010 17:26

MAC/FARQ

Page-6

9780230_201187_03_cha01

MARKETING AND FINANCIAL SERVICES: AN OVERVIEW

d7

Introduction
services: an offering in
which the dominant part
is intangible, which is the
case in most financial
services
value: the aim of
marketing is to
create/deliver an offering
that allows the
consumer/stakeholder to
derive benefits particular
to their needs/wants

Services are products that we purchase and consume in ever-growing quantities; they range from restaurant meals to university education. In business markets, services include such things as cleaning and IT. The businesses that provide these services understand that delivering value and customer satisfaction are key to ensuring their businesses survive and flourish. Such is the importance and pervasiveness of services provision that it is argued that services now dominate marketing (see Vargo and Lusch 2004), whereas goods used to have the upper hand.

What are financial services?
Financial services are any service or product of a financial nature that is traded in financial markets; specifically, they are financial instruments – for example, treasury bills and government bonds. There are a number of ways that financial instruments can be classified. Do they have a fixed or variable interest rate? How long to they take to mature? Are they offered by a deposit-taking or non-deposit taking intermediary? Financial services cover an extensive range of instruments and in the United Kingdom the Financial Services Authority (FSA) provides information to the consumer marketplace on bank accounts, equity release schemes and long-term care (moneymadeclear.fsa.gov.uk/products/products_explained.html). The marketplace for financial services is extensive, as banks, insurers and investment banks operate in a global marketplace and have a wide range of customers, including retail consumers, business customers of all sizes and other financial institutions. Other examples of financial services can be seen in Figure 1.1, which also shows services offered to businesses, domestic and global, for profit and not for profit.

From a marketing perspective, there are some important points to remember about financial services. Looking at Figure 1.1, it is clear that none of the products is very desirable, especially when compared with other things that money can be spent on, such as cars, designer handbags or holidays. In fact, several of the examples are downright unattractive, such as pensions and funeral plans. This lack of intrinsic desirability is key in the marketing of financial services. Marketers of these products have to be aware that customers, whether retail consumers or business customers, do not purchase these items because they are in themselves desirable or ‘must have’ products. What financial services generally do allow customers to do is to purchase or acquire those products and other services that are desired, such as holidays, or indeed the ‘must have’ handbag; or, for business customers, these products offer the possibility...
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