PART 1.

THEORETICAL BASIS ON MARKETING MIX FINANCIAL

BANKING SERVICES
1. What is Marketing? What is marketing mix?
- Marketing management is the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and services to create exchanges
that satisfy individual and organisational goals.
- Marketing Mix is the set of Marketing tools the firm uses to pursue its Marketing
objectives in the target market.
2. What are the elements of the financial services marketing mix?
- McCarthy classified these tools into the 4Ps: P1 - Product, P2 - Price, P3 - Place, and P4
- Promotion. Corresponding to 4P we have 4C which are: C1 - Customer solution; C2 -
Customer cost; C3 - Convenience; C4 - Communication
- However, for the banking and finance industry, in addition to the main 4Ps, which are
P1 - Product, P2 - Price, P3 - Place, and P4 - Promotion, there are also 3 more Ps that are
P5 - People, P6 -Physical Evidence and P7 - Process.
- Due to the limitation of the essay, we only focus on analyzing the main 4Ps to clarify
the impact of the Marketing Mix's influence on the bank's business.
2.1. P1 – Product
- Anything that can be offered to a market for attention, acquisition, use or consumption
that might satisfy a want or need. It includes physical objects, services, persons, places,
organizations and ideas.
- Service is a form of product that consists of activities, benefits, or satisfactions offered
for sale that are essentially intangible and do not result in the ownership of anything
- Three levels of product:
+ Core product is the most basic level which addresses the question: What is the buyer
really buying? It consists of the problem-solving or core benefits that consumers seeks.
+ An actual product may have as many as five characteristics: a quality level, features,
styling, a brand name and packaging. All are combined carefully to deliver the core
benefit a convenient, high-quality way.
+ An augmented product around the core and actual products including additional
consumer services and benefits. Today, most competition takes place at this level.
2.2. P2 – Price
- “Price is the amount of money charged for a product or service, or the sum of the values
that consumers exchange for the benefits of having or using the product or service.”
- For buyers: Product price is an amount of money that buyers have to pay sellers for
using or possessing that product.
- For sellers: Price of products is money gained from the buyers from provision of
products.
- Customer Value-Based Pricing: Understanding how much value consumers place on the
benefits they receive from the product and setting a price that captures that value.
- Importance of pricing strategies:
+ Strongly affect sales volume
+ Direct effect on the company’s income
+ Affect the development of product life cycle
+ A sharp and effective weapon in competition
+ Influence greatly other marketing strategies
2.3. P3 – Place
- A Marketing distribution channel is a set of interdependent organizations involved
in the process of making a product or service available for use or consumption by the
consumer or business user.”
- Supply chain - A system of efficiently and effectively producing, making and getting
products to end-users.
- A supply chain consists of two types of partners:
+ Upstream partners include raw material suppliers, components, parts, information,
finances, and expertise to create a product or service.
+ Downstream partners include the marketing channels or distribution channels that look
toward the customer.
- Roles of Marketing channel
+ Contribute to the needs of target market, making the product available on the market
in the right place.
+ Helps businesses increase market coverage and develop new market segments.
+ Helps businesses strengthen the relationship with customers, intermediaries.
+ Helps businesses further develop other activities of marketing such as introducing
new products, sales promotion, after-sales service and so on.
+ Helps businesses make a difference and become an effective competitive weapon.
+ Help businesses improve their business performance and achieve their marketing
objectives.
2.4. P4 – Promotion
- Communication mix or promotion mix is the specific mix of advertising, personal
selling, sales promotion and public relations that a company uses to pursue its advertising
and marketing objectives.”
- Aim: To stimulate sales and to communicate with customers
- Importance of communication strategy:
❖ For companies
+ As a competitive tool to enter new markets, maintaining market share.
+ Help improve sales, finding new customers.
+ Communication tools introduce products and businesses, and support strategic
positioning.
+ Establishing and encouraging the relationship with distributors.
+ Help build a positive image of the company, crisis management and to attract attention.
❖For customers
+ Provide information to consumers, saving effort and time while shopping.
+ Provide knowledge, helping raise awareness about the products.
+ Provide economic benefits to consumers.
+ Create competitive pressures which force firms to improve marketing activities to
better satisfy consumer demand.
❖For society
+ Improve media quality, cost saving, and diversification of products for the society.
+ Creating jobs for many people in manufacturing sector and related fields (market
research, advertising, PR ...).
+ As an evaluation benchmark for economic development.