Pages: 6

We are delighted to introduce you to the fourth edition of Financial Services Marketing. We hope it will inform and inspire students, practitioners, policymakers, and others who care about the future of the financial services industry and its impact on consumer financial well-being. The first edition was published in 2007 and it is extraordinary to consider the nature and magnitude of changes that have occurred since that time. The world had yet to experience the credit crunch and subsequent financial and economic crisis; digital marketing was in its infancy and now we can hardly imagine a world without its game-changing impact on business models. Editions two and three enabled us to take account of those and, indeed, other drivers of change in the market and consumer behaviour. Since the third edition was published in 2017, the UK has left the European Union (EU), the world has experienced the coronavirus pandemic, Europe is experiencing a full-scale war within its borders, environmental, social and governance considerations (ESG) have become a core part of business activities, and artificial intelligence (AI) is becoming ubiquitous. The fourth edition will enable us to reflect these and other developments to ensure that its worldwide audience can benefit from the most up-to-date body of knowledge.

Pages: 272

No chapter abstract available.

Pages: 28

This chapter opens with an introduction to the economic, governmental, societal and personal contexts within which the financial services industry (FSI) operates. An understanding of this issue is fundamental to those who wish to succeed as marketers of financial services products (FSPs). It enables the reader to appreciate that FSPs play a vital role in serving the economic well-being of nations, reducing poverty and serving the public good. The two core forms of financial services company in terms of ownership and governance are discussed, namely: mutual and proprietary businesses. Using concrete examples an understanding is achieved of their respective merits. Importantly, the crucial issue of how industry sectors, individual companies and products are regulated is presented and discussed. This is to enable readers to appreciate the close interrelationship between successful marketing of FSPs and regulatory principles and rules.

Pages: 32

This chapter opens with an examination of the structure of the financial services industry (FSI) and of the five core sectors of which it comprises, namely: banking, savings and loans, insurance, investment, and credit and liquidity. Financial advice has a key role to play in the FSI and in this chapter the reader is introduced to the subject. The FSI represents a unique richness of product variants and the great majority likely to be encountered are presented. Each product is discussed in the context of the customer need it seeks to address. By so doing the book is unique in providing a solid grounding of all aspects of customer need and product relevance. The issue of the role played by digital as a disruptor of traditional business models is introduced and explored. The chapter is peppered with real-world examples that give extra clarity of the role played by FSPs in the lives of customers. The reader is also able to develop their appreciation of global dimensions concerning financial services products and services as well as the role played by reinsurance. Readers are also presented with a novel approach to assessing financial inclusion on a country-by-country basis.

Pages: 24

The purpose of this chapter is to outline how both services in general and financial services in particular may differ from physical goods and to explore the implications of these differences for the practice of marketing. The chapter begins by defining financial services; it then examines, from a marketing perspective, the differences between goods and services. The next section explains the distinctive characteristics of financial services and their marketing implications. As part of the discussion, a number of generic principles are identified which may be used to guide financial services marketing. The chapter concludes with an examination of service typologies and considers their relevance to financial services.

Pages: 29

This chapter deals with both strategy and planning in relation to marketing. The chapter will begin by defining strategic marketing. The next section will examine the structure of a marketing plan, and will briefly review stages in the planning process. Section 4.4 will examine strategy development and will explore the different tools that can be used to guide strategic thinking. The focus throughout will be on the strategic aspects of marketing planning, including strategies for growth, sources of competitive advantage and methods for planning the product portfolio.

Pages: 33

This chapter will introduce the key elements of environmental analysis that are relevant to financial services providers. The chapter will begin by defining the elements that comprise the marketing environment. Subsequent sections will review the process of analysing the external environment (both at a macro and a market level) and then explore the analysis of the internal environment focusing particularly on resources and capabilities. Finally, the nature of SWOT analysis will be explained as a method for summarising information about the marketing environment and identifying options for future strategy. By its very nature, the process of analysing the environment and attempting to anticipate how a market will develop in the future is not a once-off but, rather, a continuous process. The nature of the operating environment and the ways in which it changes is one of the main sources of uncertainty confronting marketing planners. Environmental analysis cannot remove this uncertainty, but it can help to reduce it.

Pages: 42

This chapter aims to provide an explanation of how consumers make decisions when buying financial services. The main focus will be on personal consumers but, where appropriate, the experiences of personal consumers will be contrasted with the experiences of business customers. The chapter begins with a discussion of consumer decision-making based around established information-processing models of consumer choice. It then proceeds to explore some aspects of behavioural economics and finance and shows how insights from this work help us to understand particular aspects of buyers decision-making and why people sometimes appear to make decisions that are not obviously rational. The chapter then proceeds to examine some of the marketing approaches that organisations might use. The chapter closes with a brief overview of the process of researching financial services consumers.

Pages: 37

In this chapter we see how the process of segmentation, targeting and positioning sit at the very core of marketing strategy and informs practical marketing actions. The benefits that accrue from effective segmentation and targeting are explored in detail and numerous concrete examples of segmentation in practice are presented. A world leader in the practice of segmentation strategy, Experian, shows some of the more subtle aspects of the segmentation of consumer markets. Business-to-business segmentation is also addressed and case studies from various countries are presented. Specific attention is given to positioning and the role it plays in enabling a company or brand to achieve marketplace differentiation. Also addressed is the concept of re-positioning and the ways in which it allows a brand to respond to changes in the market environment. World-leading branding agency Interbrand outlines how it approaches positioning in practice using examples from the world of banking in Italy in this chapter, and from South Korea in the case study section at the end of Part I.

Pages: 29

The purpose of this chapter is to provide an overview of the marketing dimensions relevant in the internationalisation of financial services in the context of growing volumes of trade in services. The first section explores the implications of the characteristics of financial services for the process of internationalisation, drawing on frameworks developed in earlier chapters. Thereafter, a brief review of the drivers of internationalisation in financial services is presented. The chapter then proceeds to outline different strategies for internationalisation strategies and considers their relevance to financial services. Finally, there is a brief discussion of the broader marketing challenges associated with operating in international environments.

Pages: 2

The following case studies are provided in relation to Part I of this book and they focus particularly on issues addressed in this section. They serve to complement the examples provided in each chapter through “marketing in practice” and can also be used for more extensive discussion of a range of marketing issues. Each case is provided with an indicative set of questions which may be useful for individual self-study or for group work and assessments. Case 1: Microinsurance Case 2: China Merchants Bank: We are here just for you. Case 3: Liiv Case 4: Prudential: international marketing strategy

Pages: 3

Microinsurance has been defined in various ways by authors, practitioners, regulators, and others. While the term was coined in the late 1990s, some argue that microinsurance already existed in the 19th and 20th centuries under the labels of “industrial insurance”, “cooperative insurance”, and “mutual insurance”. In those days, such terms were synonymous with insurance services catering to lower income workers and small businesses. Notable examples include the “working man’s” life insurance policies targeted at factory workers in United States in the 1870s, and, more recently, life insurance sold to Saskatchewan farmers after WWII by a cooperative life insurer initiated in 1945 by the farmers themselves. Today, microinsurance broadly refers to products designed to protect low-income populations and their economic activities in developing countries. Recognising that low insurance penetration is more about access to insurance rather than just income level, the segment has expanded to use the term “inclusive insurance” to describe insurance targeting those without access to insurance at all income levels. The two terms are used interchangeably with inclusive insurance becoming more common.

Pages: 5

The combination of government-instigated reform and a growth in domestic and international competition has transformed the banking sector in China over the past 30 years. The first policy initiatives to liberalise the Chinese economy appeared in 1978 and since then, the banking system has experienced three main phases of reform. During the first stage (1978 to 1993), the mono-bank system was dismantled and the four state-owned commercial banks (SOCBs) were established as independent entities (Bank of China [BoC], China Construction Bank [CCB], Agricultural Bank of China [ABC] and Industrial and Commercial Bank of China [ICBC]). In the second stage (1994 to 2000), the SOCBs transitioned to become more independent and the numbers of joint-stock and commercial banks expanded. During the third stage of reform (post-2001), further liberalisation was put in place as China worked towards and finally joined the World Trade Organisation (WTO), an important milestone in the process of opening up the country’s financial markets.

Pages: 2

In 2016, Interbrand helped KB Financial Group (based and operating in South Korea) launch a mobile financial platform designed to support customers in every aspect of their financial lives. As the top brand in traditional banking, KB was seeking to address the challenges posed by players venturing into the arena from the world of information technology, chiefly Kakao and Toss.

Pages: 4

Prudential Plc was founded in London in 1848 to provide loans and savings options for working and professional people. Its name and brand visuals come from “prudence” which, in Graeco-Roman tradition, is one of the four cardinal virtues: Prudence, Justice, Fortitude and Temperance. If something is described as prudent it is generally interpreted as being wise, based on foresight, intelligence and memory and hence grounded in an awareness of the past, present and future – exactly the image that Prudential wished to project. Its logo incorporates a Graeco-Roman head with the company name alongside in a distinctive and easily recognised red font.

Pages: 178

No chapter abstract available.

Pages: 31

This chapter begins Part II of the text in which the principles, processes and practices associated with the acquisition of new customers are addressed. As with Part I, the focus is upon real-world marketing, and many practical examples are given. Central to new customer acquisition is the marketing mix. The strengths and weaknesses of conventional approaches regarding how to conceptualise the marketing mix are considered. Of particular note is the authors’ presentation of a new and unique definition of the core components of the marketing mix. It is held that this new approach represents the most appropriate response to the needs of present day and future marketing professionals operating in the financial services marketplace, both globally and country specific. Close attention is given to how best to translate strategic marketing goals and imperatives into the annual tactical marketing plan. New to this edition is an augmented assessment of how digital is impacting new customer acquisition policies and practices. The chapter concludes with a discussion of some of the ethical issues associated with customer acquisition.

Pages: 29

In addition to the strategic issues associated with the management of the product portfolio there are also important tactical issues which must be considered. These relate to the development, presentation and management of products which are offered to the marketplace in order to satisfy certain customer needs. This chapter deals with these more tactical issues; it begins by providing an overview of financial services products, the benefits they offer and the associated marketing challenges. The next section examines the factors that will influence decisions about the development of the product element of the marketing mix. Here we revisit the product life cycle concept and consider its uses and limitations in further detail. Subsequent sections deal specifically with aspects of the product range strategy and the process of new product development in the financial services sector.

Pages: 33

This chapter addresses the issues surrounding the development of an effective communication strategy in financial services. It begins with an overview of the essentials of marcoms for financial services and briefly outlines some of the tools and the challenges that financial service providers may face. The next section examines the development of promotion campaigns. The chapter then proceeds to discuss the relative merits of the different forms of promotion the financial services organisations use. The final main section explores digital marcoms in much greater detail. A summary and conclusions are presented in Section 11.6.

Pages: 29

Arguably the least glamorous component of the marketing mix, pricing, is a discipline that lies at the heart of many of the controversies that surround financial services. In almost every other domain of consumer experience the price of a good or service is a simple concept to grasp. This is empowering as it enables consumers to compare and contrast competing options and, thereby, make a well-judged purchasing decision. In this chapter we explain the concept of “price”in the context of financial services in a way that demystifies this tricky subject. Some 37 different terms are used to describe price, or sacrifice, to the customer. With the use of worked examples the reader gains a unique insight into how pricing operates in the financial services industry. A clear exposition of the role played by price to both buyers and sellers is presented, and the methodologies used to determine price explored. Importantly, the chapter addresses the role pricing plays in the context of marketing strategy and product positioning. The digital era has profound implications for the pricing of financial services, not least so far as insurance is concerned, and these issues are explored.

Pages: 36

This is considered to be the most up-to-date and comprehensive exploration of the distribution of financial services in the world today. Commencing with an explanation of the distinguishing features of distribution within the marketing mix, the chapter proceeds to compare and contrast direct with indirect methods of distribution. This leads on to the controversial subject of the extent to which products are bought as opposed to pro-actively sold by product providers. A forensic examination of nine different methods by which consumers gain access to financial services is presented. Importantly, this section includes much that is new regarding digital forms of distribution. Many examples are given to show how each method works in practice. The role that artificial intelligence (AI) is playing in the distribution process is also addressed.

Pages: 2

The following case studies are provided in relation to Part II of this book and they focus particularly on issues related to customer acquisition. They serve to complement the examples provided in each chapter through “marketing in practice” and can also be used for more extensive discussion of a range of marketing issues. Each case is provided with an indicative set of questions which may be useful for individual self-study or for group work and assessments. Case 5:Aktif Bank Case 6: HDFC Bank Case 7: HUK24 Case 8: Nat West Accelerator

Pages: 4

Background

Pages: 5

Introduction

Pages: 4

Introduction

Pages: 3

Introduction

Pages: 171

No chapter abstract available.

Pages: 35

Whereas once financial services marketing focussed heavily on the acquisition of new customers, this is no longer the case. Here we consider the range of factors in the wider business, social, economic, and regulatory spheres that have acted as drivers of change. The result is that the management of a company’s customer base requires a wholly discrete marketing approach and skill set. This opening chapter of Part III of the book presents with clarity the financial and reputational benefits that accrue from effective customer relationship management (CRM). The concept of the customer relationship chain is presented as a means of explaining how a person can transition from the status of “suspect” to that of an advocate of a company or brand. Arguably, it is in the context of CRM that digital is making its impact felt most acutely - eCRM. The rise of artificial intelligence (AI), blockchain and crypto has had profound implications for the financial services industry, but social media is a key medium to engage and interact with customers. And so, at least fifty percent of this chapter is rightly devoted to digital marketing and its impact on CRM.

Pages: 29

This chapter provides an overview of service delivery in financial services and highlights some of the issues associated with managing quality. The chapter begins by introducing the concept of the service profit chain as a way of thinking about the service delivery process and its impact on customers. Thereafter, the discussion focuses more specifically on quality and begins by defining service quality and highlighting its key features. The next sections discuss models of service quality, the service delivery process and the areas where problems may arise with respect to service delivery. The final section in the chapter examines the outcomes of service quality paying particular attention to the issue of service failure and service recovery.

Pages: 35

It is vital that organisations develop the means by which they can acquire a well-founded knowledge of how they are viewed by their customers. Indeed, information about customer perceptions can yield valuable insights well in advance of the impact upon levels of sales. This chapter will explore consumer evaluations of a service with particular reference to both satisfaction and value. The chapter will begin by defining satisfaction and value and will then move on to examine specifically how organisations approach satisfaction measurement. The second part of the chapter then examines issues relating to trust and fairness and their implications for the way in which organisations engage with their customers.

Pages: 29

Since the previous edition of this book was published in 2017 environmental, social and governance (ESG) has replaced much of the profile previously given to corporate social responsibility (CSR). Such has been the prominence attributed to ESG-related factors that this whole new chapter has been introduced on the subject. The origins of CSR are discussed, and the genesis of ESG articulated. Readers will readily appreciate the distinctions drawn between CSR and ESG. In the wake of various United Nations’ initiatives, businesses around the world are engaging actively in the issue of sustainability, and financial services is no exception. Through the medium of a number of compelling case studies and examples, the reader will be exposed to vivid evidence of the positive ways in which financial services providers are responding across the globe. ESG guru, Sallie Pilot, provides convincing testament to how the sustainability issue is developing and gives practical advice on how to navigate the challenges posed by ESG. An important aspect of ESG is inclusion and the topic is explored from the point of view of financial exclusion on socio-economic grounds. Another new issue explored, concerns exclusion based upon disabilities of one form or another. Examples are given of how financial companies are making their products and services more inclusive as a way of fulfilling companies’ ESG responsibilities.

Pages: 24

This concluding chapter concerns the need to integrate marketing at both the strategic and tactical level within the culture of an organisation. As such it explores cultural dimensions of marketing and the imperative to place the delivery of good customer outcomes at the heart of a company’s culture. The chapter begins by emphasising the penalties – financial and reputational – of cultures that fail to treat customers fairly. It then explores the origins of the study of culture in the business context, and its relationship with competitive advantage. Core aspects of marketing activity are subjected to scrutiny to explore their cultural dimensions including: people, culture; product considerations; pricing and value, a single customer view; advertising and promotion; distribution and access; and processes. The latter topic of “processes” includes concluding observations regarding the direction of travel in respect of innovations in the field of IT. It is appropriate that the chapter ends by exploring how to go about evaluating the effectiveness of marketing’s contribution to corporate performance. Through empirical research the reader will see just how pivotal the roles of CEOs and main Board Directors are in providing leadership for marketing-oriented culture. Practical approaches to evaluating the effective use of marketing resources are presented and it concludes with a gap analysis of how to assess the impact of marketing activities on customers.

Pages: 2

The following case studies are provided in relation to Part III of this book and they focus particularly on customer relationship and broader corporate responsibility. They serve to complement the examples provided in each chapter through “marketing in practice” and can also be used for more extensive discussion of a range of marketing issues. Each case is provided with an indicative set of questions which may be useful for individual self-study or for group work and assessments.

Pages: 4

American Express (Amex) is one of the best known and most respected brand names in the world. In 2023 it was the second highest ranked financial services brand in Interbrand’s global rankings. The company started in the middle of the 19thcentury in the US freight forwarding market. It rapidly established a reputation as a trusted transport provider for people’s most valuable possessions. Building on its reputation and its US network, the end of the 19th and early 20th century saw American Express diversifying into travel services and financial services (see Figure CS9.1) – both areas in which it could build on the idea of helping to support the everyday lives of its customers. In 1891, the Travellers Cheque was launched; in 1915, Amex started selling rail and steamship tickets and in addition to its established offices in the US and Europe, it also opened in Buenos Aires, Manila and Hong Kong. Three years later Amex left the rail transport side of its business and focused instead on the travel and financial markets. Figure CS9.1 American Express moves into travel services “American Express Tours and Cruises 1922” by Nesster licensed under CC BY 2.0.  “American Express: Mauretania Winter Cruise to the Mediterranean, 1922” by Nesster licensed under CC BY 2.0. Two scanned photographs of vintage American Express advertisements. The left ad promotes travel in Europe, with information and booking services. The right ad announces a special charter for a winter cruise to the Mediterranean on the RMS Mauretania, sailing from New York in February 1923. https://www.w3.org/1999/xlink" orientation="portrait" position="float" xlink:href="https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781003398615/f368a691-30ff-4870-88ae-8ad41208dc85/content/fig21_1.tif"/>

Pages: 4

Introduction

Pages: 3

Context

Pages: 4

Climate change is one of the biggest challenges that we face globally, and Starling is 100% committed to playing its part in the fight against it, not just in the lead up to 2030, but starting right away. This is urgent and we know that our customers expect no less from us.