Marketing of Financial Products and Services

transcript

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Affiliated to Institution of G.G.S.IP.U, Delhi

Marketing of Financial

Products and Services (MFPS)

Manish SharmaAssistant Professor

Marketing of Financial Products and Services (MFPS)Paper Code: BBA (B&I) 303

Objectives:

• The basic objective of this course is toacquaint the students about the varioustypes of financial products and servicesand how these are to be marketed.

• It will also develop an understandingamong the students regarding recentdevelopments in Marketing of FinancialProducts & Services. 2

Scope of MFPS / Need of studying MFPS

• Specialization in Banking and Insurance• Knowledge about different financial products and

services and how these are to be marketed.• Jobs in Financial Service Sectors:Banking IndustryInsurance IndustryMutual Fund IndustryPension Fund IndustryStock Broking ServicesOther Financial Services

Course Contents:

Unit I No. of Hrs.:10Marketing of Financial Services- a conceptual framework. Types of FinancialMarkets in India- an overview. Concept of Marketing and Marketing Mix, 4P’s of Marketing.

Unit II No. of Hrs.:12Marketing of Banking Services – Banking products and services;Distribution, Pricing and Promotion Strategy for Banking Services;Attracting and Retaining bank customers. Marketing strategy of creditcards, debit cards, saving accounts and different types of loans, barter card.

Unit III No. of Hrs.:12Mutual Funds Markets in India and the Marketing strategies involved.Marketing of insurance products- Life and Non Life Products. Marketing ofPension Funds.

Unit IV No. of Hrs.:10Concept of Distribution, multiple delivery channels/ATM, EFT, CMS, POSand Bancassurance. Promotion- marketing information & research, publicrelations and publicity, image building. Globalisation and its impact onfinancial services.

Book for MFPSTitle:

“Marketing of Financial Products and Services”

Authors:

Manish Sharma & Sunil Kadyan

Publisher:

Triumph Publications

Other Books

Text Books:

1. Suri, R.K., “Services Management”,HimalayaPublication,2005.

2. Jha, S.M., “Bank Marketing”,HimalayaPublication,2003.

Reference Books:

1. Ratna,V.V., “Services Marketing”, Wisdom Publications, 2005.

2. Varshney, R.L and Gupta,S.L., “Marketing Management”,Sultan Chand & Sons, 2005. 6

Brief Introduction

about the Subject

Financial Market

• Financial Market is a mechanism that allows people to buy and sell financial securities (such as stocks and bonds) and items of value at low transaction cost. There are mainly two types of financial markets:

• Money Market is a market for short term financial assets that are close substitutes for money. (e.g. Call Money, Treasury Bills)

• Capital Market deals with funds having long maturity (more than a year) or an indefinite maturity. (e.g. Bonds, equities) 8

Types of Financial Markets in India

Financial Services that Need Marketing

• Banking Services Credit Cards

Debit Cards

Saving Accounts and Different type of Loans

• Mutual Funds

• Insurance Products Life

Non-Life

• Pension Funds

• Stock Broking Services

• Other Financial Services 10

What is Marketing…??

• Selling?

• Advertising?

• Promotions?

• Making products available in stores?

• All of the above, plus much

Marketing

Marketing is the social process by whichindividuals and groups obtain what they needand want through creating and exchangingproducts and value with others.

Philip Kotler

Dennis Adcock defines marketing as:

The right product, in the right place, at the righttime, at the right price.

Marketing is an art of selling satisfaction to a Customer. 12

Marketing Mix

1. Product

2. Price

3. Place

4. Promotion

1. Product / Service Package

2. Price

3. Place

4. Promotion

5. People

6. Process

7. Physical Evidence

Physical Goods: (4 P’s) Services: (7 P’s)

Physical Goods Vs Services

The first P: Service Product or Service Package

Services are benefits which are offered to the

target market.

• Education: Different courses that a Institute offers.

• Banking: Debit cards, credit cards, different types

of loans and current and saving accounts.

• Insurance: Life Insurance and Non-life Insurance.

The Second P: Pricing

The third P: Place or Distribution

Modern Thinking in Distribution of Services

If Customers Can’t Reach You,

Reach Your Customers

Under the concept of Bank on Wheels the following financial services are available to the rural Indians at their villages.

1. No Frills Savings Bank Account – Cash Deposits/Withdrawals

2. Savings Bank Tiny Recurring Deposits Account

3. Remittance / Money Transfer Facility

4. Loans / Overdraft Facility

5. Life Insurance Products

6. Other Services

No Frills Savings Bank Account

• Proof of Address is needed

• Proof of Identity is needed

• Passport size photos needed

• Filled in Account Opening form is needed

The Fourth P: Promotion

The fifth P: People

(People are) . . . All human actors who play a part in service delivery and thus influence the buyers' perceptions; namely, the firm's personnel, the customer, and other customers in the service environment.

Zeithaml et al (2008)

• People are an extremely important element of the marketing mix in services marketing 31

The Sixth P: Process

• (Process is) . . . The actual procedures,mechanisms, and flow of activities bywhich the service is delivered – theservice delivery and operating systems.

PROCESS

-Service Delivery

-Policies

-Procedures

-Customer Involvement

-Direction

-Workflow

-Complaints

-Response Time

The Seventh P: Physical evidence

(Physical evidence is) . . . Theenvironment in which the service isdelivered, and where the firm andcustomer interact, and any tangiblecomponents that facilitate performanceor communication of the service.

DesigningFacilitiesSignposts

EquipmentsInteriorsExteriorsDisplaysLighting

VentilationDrinking waterWaiting Lounge

ScentMusic

ReportsBrochures

ParkingDresses and UniformsColor Combinations

Physical Evidence and Attractions