CHAPTER 7- ADVERTISING IN FINANCIAL SERVICES

1. ADVERTISINGAdvertising is non-personal communication (perhubungan/komunikasi yang bukan bersifat langsung) directed at target audiences through various media in order to: present and promote products, services and ideas, the cost of which is borne by an identified sponsor or sponsors.Advertising in banking alerts a potential user that a service or product will help him to reach his objectives/goals./satisfied its needE.g: someone to keep his money safely or borrowing to buy a new house.

The principle missions of advertisingTo inform (MEMBERITAHU), while at the same time to persuade (MEMUJUK)To alert potential users to a service or product which will help them to reach an objective

What, when and how to advertise, however, should be determined only AFTER ..the organisations objectives, as well as customers needs, have been determined via market research!

ROLES OF ADVERTISINGThe banks came up against 2 basic problems.

Banks had a somewhat poor image and most people could not distinguish one bank from anotherThe various services available to the public were largely unknown quantities

As a result, the forms and roles of advertising are:Pioneer advertising, e.g. to announce a new fixed rate house mortgageCompetitive advertising, e.g. to promote a newly developed product, say telephone banking & SMS banking.nokia vs motorola h/p. Reinforcement advertising, whose task is to reduce dissonance (perkara yg jangkal @ tidak sedap didengar)..

*Objectives pengiklanan:1.To inform 2.To persuade, 3. To influence, 4.To convince 3.To remind

In order to meet these problems the advertising policies of the various banks have evolved through 3 main stages:

In the initial stageThe campaigns were based on the banks name, emphasizing strength in order to convey a guarantee of security.In the second phaseThe advertising tended to be geared towards announcements of new or important product @ services.The basic gimmick was the distinguishing of one bank from the others by the offer either of exclusive services or of services claimed to be exclusive!!!

3. Third StageTry to humanise themselves by creating an image designed to spark confidence in the customer. Eg: Focus on customer concern/care,assistance, advice, security protection,secured, etc.

The types of advertising that a bank may adopt will depend upon its short-term and long term objectives.For e.g : A bank that is attempting to achieve a long-term build up of its name will be particularly interested in institutional advertising.On the other hand , a bank that is more interested in building up a brand name would adopt a policy of brand advertising.

*Television, Radio, Posters, Newspapers,Direct mail

Leaflets, pamphlets, explanatory guides,manual

MAJOR TYPES OF ADVERTISING

Institutional advertisingInstitutional advertising generates the long term build up of a banks name. This can be broken into 2 aspects.Promotion of the banking image as a whole.Promotion of the products to be offered by the bank, but major emphasis is placed on the banks name! (lebih kpd strategi pengiklanan yg bertujuan utk menaikkan nama baik/imej sykt)

In other words, by using institutional advertising the bank is seeking , through its marketing communications, to build an impression upon the customer of the bank and also to impress the customer who wants the best range of financial services.(to attract the attention of the target customers and create an image that is honest, friendly and welcoming!)

ii) Brand advertisingBrand advertising is advertising of services. It aims to the recognition of the banks name but it is also advertising the banks different services.Brand advertising follows closely in the footsteps of institutional advertising.

Advertising channelsAbove the line advertisingThis consists of channels of communication such as: TelevisionRadioNewspapersPostersMagazinesCinema

Below the Line AdvertisingThis type of advertising forms a major part of the financial firms activities and comprises:Leaflets (risalah)Pamphlets (surat sebaran)FlyersExplanatory guidesManual instruction

Below the line advertising has the advantage of being cheap and very easy to produce, but it has severe limitations in that it must be used discreetly (secara senyap2/diam2 @ berhati2), it does not attract new customers but merely offers existing customers more services and it depends largely on personal selling for its effectiveness.

Direct Mail (Above the line)Direct mail it is often also known as direct mktgIt could be defined as offering a financial product and influencing the buying decision without a face to face meetingDirect mail is used (e.g. To promote low cost insurance, medical insurance for women) Has a tremendous impact on financial services mktg particularly insuranceE.g. about 10% of all new life assurance business is generated via direct mail by both insurance & building societies

*This method of communication has led to the development of mailing lists (rented, special club, groups, associations)

Advantanges of direct mailIt is possible to change market targets at short notice-It is possible to predict response rates and match costs accordinglyIt is highly cost effective method of reaching customers that are normally seen as an important target market for salespersons or intermediariesIt generally enhances customers awarenessskp

Disadvantages of direct mailClass Discussion!!!!

2. PromotionsThe term promotions refers to the use of persuasive information that, in conjunction with other elements of mktg mix, relates to the target market. The financial firm has to decide how information about the organisation and its services will be disseminated.

4 elements of the mktg communication mix are generally recognisedADVERTISING paid non personal presentation and promotion of goods and services by an identified sponsor .e.g: television, & radio.PERSONAL SELLING-verbal presentation of persuasive information to potential customers. In the banks this is generally confined to the branch manager, mktg staff.

PUBLICITY/PUBLIC RELATION- non personal stimulation of demand through news that is not paid for by sponsor. In banking, newspaper reports give various types of information about the banks. Homepage bank/internet banking/phone banking,sms.SALES PROMOTIONS-short term incentive to encourage use of a service.In banking these include the use of book tokens/diary, pictorial cheque books (cheq bergambar), open s/ac gets umbrella,coin box,teddy bear,pen & etc.Continuous promotionexample?

ELEMENTS OF MKTG COMMUNICATION MIX

MASS COMMUNICATIONPERSON-TO PERSON COMMUNICATIONSADVERTISINGPERSONAL SALESPUBLIC RELATIONSALES PROMOTION

Sales promotionsCan be defines as a short term incentives to encourage the purchase of sale of a product or services.Sales promotions have two distinctive qualities:1. Bargain chance2. Product demeaning

1. Bargain chanceTelling buyers of a chance that will not be available again something special (in the future)-eg: merdeka promotion!.2. Product demeaning (merendahkan product)If promotions are used too frequently & carelessly the potential buyer may be led to wonder whether the financial service is reliable or reasonably priced.

Financial services mgrs identify a number of objectives sought by using promotions:To attract new customersTo increase the level of deposit accountsTo lower the cost of acquiring new customers by seeking to avoid direct price competition with other financial institutionsTo increase market share in selected market segments

Personal SellingPersonal selling is defined as oral presentation in a conversation with one or more prospective purchasers for the purpose of making salesThis is perhaps the most important element in the communication process of the financial services industry

It can be and is used for many purposes.For example:creating product/service awareness,developing product/service preferencenegotiating prices & other terms (eg. Interest are negotiable)

The advantages of personal sellingPersonal confrontationCultivation (memupuk/memelihara) of financial services-customer relationshipsResponse (immediate feedback)

Personal confrontationPersonal selling enables an immediate and interactive relationship between buyer & sellerEach party can observe the others characteristics, needs & wants, & react accordinglyEach party has the opportunity to inspire trust, honesty, & responsibility, willingness to helpIn turn can help the interactive process of sellingskp

2. Cultivation of financial service-customer relationshipPersonal selling permits the growth of relationships to a level greater than a mere matter of fact selling.The sales person has the opportunity to win over the buyerskp

3. ResponsePersonal selling makes the buyer feel under some obligation to purchase the service that the sales representative has gone to some length to discuss.At the very least he or she feels a greater need to attend to what is being saidskp

In view of the importance of Personal Selling, particularly of insurance, the salesforce needs not only to be trained in the art of selling, but they must also be aware of all the services available & be able to explain clearly what each service offers. In addition they must be aware of the needs of their individual customers so that they can either refer customers to, say, the branch manager, or suggest appropriate services themselves. Staff must live up to the organisational image of trust, reliability, responsibility, familiarity & friendlines. In order to meet these requirements & to understand customers reservations & problems, (for example the insurance salesperson will make a sale).

PublicityPublicity is perhaps the least controllable element of the communications mix, since it is the media who will tend to decide what is newsworthy.Publicity gives positive & negative impact.E.g. Positive-high bank profits Negative-high insurance losses

Publicity can create a memorable impact on public awarenessLow budget required.Appoint public relation officer-PR (full-time job to generate publicity)The number & roles of specialized PR companies in financial service is growing!

Publicity can be a useful means of communication if it is properly & carefully manipulatedIts qualities include:High credibilityReliability newsSignificant news about certain services(through radio, tv, newspapers, internet & etc)Greater impacts

The roles of sponsorshipSponsorship is not as effective as advertising or other forms of promotionSponsorships main aim is to build brand/product/corporate awareness, or a corporate image! Financial services companies have for many years been sponsoring sports, arts & other events, including expedition, social & community projects, fashion, music, industry & commercial developments & etc.Social obligation & can enjoy tax exemptionBank Islam-sponsor forum perdanaTakaful Malaysia-sponsor seminar

ConclusionAdvertising plays an important part in the financial services mktg program, although it is unclear to what extent it contributes directly to sales.Its function are as follows:

It keeps a financial service organisations name in the foreground well known! (public should be aware of a specific firms existence)It can create an image for the financial firm (by creating a friendly, sharing, caring & competent/good image)It reinforces (pengukuhan) point of purchase communication & personal selling (enables people to choose and pick-up the leaflets & pamphlets that interest with them)(enables employees to refer their customers to comprehensive guides)It motives staff & boosts morale (staff more motivate, good image, team spirit & etc)

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*Proses Jualan PeribadiDalam proses jualan peribadi tahap-tahap berikut perlu dikaji oleh syarikat dan staf jualan bagi mengatur strategi jualan yang berkesan. Langkah-langkah dalam proses jualan peribadi adalah seperti berikut:1. Mengenalpasti bakal pembeli berpontensi2. Pra-Pendekatan3.Pendekatan4.Persembahan dan demonstrasi5.Mengendalikan bangkangan/soal jawab6.Penutup7.Susulan

*1. Mengenalpasti bakal pembeli yang berpontensiIa dapat dilakukan melalui pembeli sedia ada, pembekal, staf jualan dari syarikat bukan pesaing dan beberapa sumber lain seperti sumber bercetak. Tidak semua bakal pembeli boleh ditukarkan kepada pembeli. Mungkin hanya seorang pembeli yang telah dikenalpasti daripada ramai bakal pembeli (potential buyers) yang boleh menjadi pembeli.

*2.Pra-PendekatanSebelum berjumpa dengan bakal pembeli, staf jualan haruslah cuba mencari banyak maklumat tentang organisasi dan individu (pegawai) yang terlibat secara terus dengan aspek jualan dan pembelian dari organisasi pembeli. Staf jualan juga harus memikirkan jenis pendekatan yang paling sesuai sama ada melalui lawatan jualan, panggilan atau surat ke organisasi pembeli. Staf jualan perlu kenal pasti masa terbaik untuk perjumpaan dengan pembeli.

*3.PendekatanPendekatan adalah cara bagaimana staf jualan berhadapan dengan bakal pembeli. Pembuka bicara, tingkah laku serta tatatertib memainkan peranan bagi mendapatkan reaksi yang positif dari pembeli untuk tahap berikutnya.

*4. Persembahan & demonstrasiBagi produk baru, persembahan dan demonstrasi adalah lebih berstruktur iaitu mengikut skrip yang telah disiapkan oleh syarikat. Satu lagi pendekatan adalah dengan mengenalpasti keperluan pembeli dan berusaha untuk menerangkan bagaimana produk boleh menyelesaikan masalah syarikat

*5. Mengendalikan bangkangan/soal jawabBangkangan boleh berbentuk soalan negatif tentang produk dan membandingkan secara negatif produk lain dengan produk sedia ada.Staf jualan haruslah menggunakan pendekatannya yang positif dengan mencari maksud disebalik bangkangan dan menggunakan bangkangan sebagai alasan bagi pembeli untuk membeli produk. Staf jualan harus menjelaskan tentang kualiti, fungsi, harga serta jaminan produk dalam mengatasi bangkangan.

*6.PenutupStaf jualan harus mengenalpasti tanda-tanda persetujuan pembeli dan bakal pembeli untuk membeli. Staf jualan boleh juga menggunakan pendekatan tawaran harga atau kuantiti tambahan produk yang ingin dibeli sebagai alasan untuk menutup (mendapatkan persetujuan) proses pembelian. Apabila persetujuan diterima, tarikh penghantaran, syarat2 pembelian dan perkara berkaitan haruslah dilengkapkan.

*7. SusulanTindakan susulan penting bagi memastikan pembeli berpuas hati dengan pembeliannya dan kemungkinan membuat ulangan pembelian.

*3. PendekatanPendekatan adalah cara bagaimana staf jualan berhadapan dengan bakal pembeli.

*Perbezaan antara perhubungan awam dengan pengiklanan di dalam pemasaran perkhidmatan kewangan. Kredibiliti perhubungan awam dan publisiti adalah lebih tinggi berbanding pengiklanan Kos mengendalikan perhubungan awam & publisiti adalah lebih rendah berbanding dengan kos pengiklanan ataupun kos jualan peribadi.

*3.Lebih maklumat diperolehi melalui perhubungan dan publisiti berbanding pengiklanan yang singkat sahaja paparannya.4.Tiada kekangan masa. Maklumat boleh dihebahkan melalui sesi siding akhbar ataupun pihak syarikat menghantar bahan kepada pihak media untuk siaran berita. Pihak syarikat dapat menghebahkan sebarang maklumat pada kadar segera terutamanya apabila sesuatu yang tidak dijangkakan berlaku.Maklumat yang disampaikan kepada televisyen agak terbatas.

*5.Maklumat yang disampaikan oleh perhubungan lebih mudah dan tidak melibatkan banyak birokrasi manakala pengiklanan lebih banyak birokrasinya.