Marketing of Financial Services

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DP10

Marketing of Financial Services
16 APRIL 2004

1. 2. 3. 4. 5. 6.

Time allowed Total number of questions Number of questions to be answered

: Three (3) hours : Five (5) questions : Four (4) questions [25 marks each]

Begin each answer to a new question on a fresh page. Answer all questions in English. A blank page is provided at the end of the question paper for rough work.

ANSWER FOUR (4) QUESTIONS ONLY
1. (a) (b) (c) Explain the meaning of “marketing” in relation to the banking and financial services industry. [5] Explain the elements of marketing mix in relation to the banking and financial services industry. [8] Explain the differences between marketing and selling. [12] (Total:25 marks) [10]

2.

(a) (b) (c)

Explain Abraham Maslow’s Hierarchy of Needs theory.

Explain how you can apply Abraham Maslow’s Hierarchy of Needs to any two products in the banking environment. [8] Explain how financial institutions can apply Abraham Maslow’s Hierarchy of Needs in marketing their products to become the market leader. [7] (Total:25 marks) “Foreign banks are mostly ahead of the domestic banks in formulating marketing strategies.” Do you agree or disagree with the above opinion? Explain your answer. [13]

3.

(a)

(b)

“Despite having fewer branches, foreign banks tend to have a good share of the banking business in most of their locations.” Do you agree or disagree with the above opinion? Explain your answer. [12] (Total:25 marks) [12] [13] (Total:25 marks) [15]

4.

(a) (b)

What makes financial services different from physical goods? Explain Philip Kotler’s Services Marketing Triangle.

5.

(a) (b)

Explain the different types of distribution channels available to financial institutions.

What are the advantages and disadvantages of distributing financial services through a branch network? [10] (Total:25 marks)

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DBFS April 2004 – DP10

Institut Bank-Bank Malaysia

OUTLINE ANSWERS
• • Question 1 Candidates performed well in this question, especially in explaining the elements of marketing mix in relation to the banking and financial services industry. However, some were not clear in explaining the meaning of “marketing” in relation to the industry, and were unsure of the differences between marketing and selling. (a) Marketing – an approach to business in which the organisation focuses attention to develop products and services that meet consumer needs and which will result in consumer satisfaction. Implication of marketing – four main elements of marketing mix/4Ps: • Product – branding • Price • Promotion • Place • People – optional (b) Selling • Emphasis is on the product. • Company first makes the product and then figures out how to sell it. • Management is sales volume-oriented. • Planning is short run, focussing on today’s products and markets. • Short-term in nature. • Mostly one-time transactions. Marketing • Emphasis is on customers’ wants. • Company first determines what the customers want, and then figures out how to make and deliver a product to satisfy those wants. • Management is profit-oriented. • Planning is long run, focussing on new products, tomorrow’s markets, and future growth. • Long-term relationship. • Multiple transactions.

1.

Institut Bank-Bank Malaysia

DBFS April 2004 – DP10

3 of 7

Question 2 This question was well answered, as the Maslow’s Hierarchy of Needs theory is often used in marketing. Most candidates were also able to apply the theory to the products in the banking sector. 2. (a)

Self Actualisation Needs (Self-development) Esteem Needs (Recognition, status) Social Needs (Sense of belonging) Safety Needs (Security, protection) Physiological Needs (Food, shelter, etc.) The importance of the Hierarchy of Needs will influence the individual’s behaviour. The basic requirements from the need to eat, rest, having a home, feeling secure and to have the company of friends. As a result, people’s basic need goes to...
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