MARKETING OF FINANCIAL SERVICES: Channelise savings of the society to investment activities.

Savings
refer to sacrifice of present consumption to have improved future consumption. Savings may refer not only to
sacrifice of present consumption for some future consumption but also to ensure security in future.So the most
important function/role of financial services is to channelise the savings of the society. What are the factors which
can be triggered/fiddled to channelise savings? Period , Return , Purpose or Family requirements.Generally
savings are contributions credited to any of array of assets which may be cash-based deposit accounts, equity-
based assets, or other asset-based accounts like precious metals, housing, art etc. In a way, savings get routed
to investments. Financial services mostly deal with such routing of savings to investments. Varieties of Savings:
Normal Savings accounts, Deposit accounts, Pensions, Savings endowments and mortgage endowments.
Typical characteristic of endowments is that a lump sum is payable to the beneficiary in the event of his death ,
Collective savings….. Lending: A very common feature of financial services is to provide loaning facility to the
sections who would like to invest. This notions of late changed & loans are provided for consumption needs also.
Depending on the needs/investments, loaning can be for short period, long period or for a very long period.
Varieties of financial institutions have emerged specialising in these segments. You have various types of
Loans :Unsecured Loans ,Secured Loans, Mortgages, Re-mortgages, Reverse mortgages International
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FINANCIAL SERVICE IN CUSTOMER IDENTIFICATION AND RECONGINATION
PROBLEM RECONGINATION Depends on needs & wants of consumers and the extent to which they are motivated to
satisfy. Need to draw difference between Personal customers and corporate clients – the latter are more educated, more
focused and knowledgeable about the service. Needs depend on personal circumstances in respect of persons and the
stage of development in respect of business firms. Personal Needs: Need to make payments (cheques, drafts etc), need to
defer payments (loans), need for protection (insurances), accumulate wealth (fund management) etc. CUSTOMERS MAY
NOT RECOGNIZE THEIR NEEDS DUE TO LACK OF INTRINSIC APPEAL OF SERVICE (example: Insurance). In these
cases marketing process starts to focus on identification and activation of the Needs. One issue of critical importance in
problem recognition and servicing is transparency. INFORMATION SEARCH: Customers gather information from:Own
search;From External sources – marketing communications such as advertisements, other customers & internet for
bank/company information and other competitors. ;Due to intangibility and inseparability of services information search
becomes difficult – means information about service is a perceived notions. It is all about what others tell the customer.
Word-of-mouth of others have large weight. ;Other issues are: service could be long term duration (housing loans), and
services are customized. As such, customers’ personal experience is partial. Lack of transparency compounds this
problem. EVALUATION OF ALTERNATIVES Alternatives are evaluated with specific reference to ones needs.;Credence
of claimed services are very important - credence to what the Institutions claim.;Role of advisors become important in
evaluation of alternatives. PURCHASE: Sometimes need of the service is created at the point of sale. So point of sale is
critical and it depends on front office who sells the service.; Since financial services are highly need-based and personal,
‘over-selling’ may lead to contempt (insurance agency). ; Since production is inseparable from consumption frontline
service employees play an important role. Standardization and percolation of organizational goals to the bottom is vital…..
With associated complexities with financial services, how do you acquire customers & what are the solutions? Services
being intangible, it is difficult for the customer to perceive it and the credibility is at doubt. Customers may not believe in
what you say. To circumvent the problem, banks are trying to make some aspects of services tangible and standardize
them – example: introductory kits. Branding is also useful in creating a sense of closeness to the service provided. (LIC &
SBI logo).. As the services are perishable (produced and consumed simultaneously), customers cant have advantage of
pre-purchase experience like test-driving a car. The customers go by experience of other customers. So it is a word of
Mouth which becomes critical. Services are heterogeneous – different services to different people. It has its advantages
and disadvantages. Standardization of work process may reduce the problem of heterogeneity. ACQUSITION OF
CUSTOMERS: What are the strategies used in acquiring and retaining customers? What is the market-mix that can be
adopted in acquisition of customer? Tools that make market-mix are 4 Ps. Product; Price; Promotion; Place & in respect
of services 3 Ps are People ; Process & Physical Evidence.. Product: Range of services offered, features, brand, quality,
packaging, warranties, terms & conditions etc. Price: Includes, listed price, discounts, payment period, credit terms etc.
Promotion: Includes advertisement, personal selling, sales promotion, publicity, public relations .. Place: Channels of
distribution, location, time
LOYALTY: What is loyalty? It could be repeat purchase/behaviour or lifelong relationship with the
Bank. It is a committed patronage behaviour. Loyalty leads to retention of customers and
increased profitability of the bank. Loyalty may arise as a bank as such or as a brand or it may
arise due to certain specific characteristics or facilities created by certain banks. What are the
drivers of loyalty or predictors of loyalty? Customer satisfaction; Perceived service quality &
Brand image.. Evaluative judgments of service quality could significantly influence customer
loyalty. What is customer satisfaction? Satisfaction is overall evaluation of the organization
based upon all experiences with that particular organization. It is also related to a specific
encounter with the organization. Satisfaction is also meeting or exceeding customer
expectations (customer delight). Nevertheless, level of satisfaction positively influences buying
intentions as well as actual behaviour. There is positive correlation between customer
satisfaction and behavioural loyalty or repeat behaviour. Service Quality or Perceived Quality
influences the level of customer satisfaction. Perceived quality is a function of expected quality
and experienced quality. It is perceived quality which influences consumer intentions to buy a
specific brand or product. Satisfaction is the result of both outcome aspects (final results) and
interactive aspects (day-to-day interactions).
It is also a result of functional and technical dimensions including tangible and intangible
dimensions. CUSTOMER LOYALITY: See very little differences in the services provided by the
banks. Any service of the bank is easily copied by others and there could be little differences.
Then how banks are trying to secure customer loyalty? Banks are looking at less tangible
determinants (softer determinants) of loyalty & depend more on customer evaluative
judgements like service, quality and satisfaction.
Banks also target different consumer groups and position their services as it is not possible to
satisfy all consumer groups. They may identify tangible and intangible attributes and
concentrate more on later. Arrange for corporate communication in tune with identified group
needs, capabilities of the organization so that the perceived quality of services is orchestrated
by the bank.