MFS

WHAT IS MARKETING?

1. Process by which individuals and groups obtain what they need and want through creating and
exchanging products and value with others.

WHAT ARE FINANCIAL SERVICES?

2. Financial services can be defined as the products and services offered by institutions like banks
of various kinds for the facilitation of various financial transactions and other related activities in
the world of finance like loans, insurance, credit cards, investment opportunities and money
management as well as providing information on the stock market and other issues like market
trends

GOALS OF MARKETING

• To attract new customers

• To keep and grow existing ones

The Marketing Process

1. Understanding the marketplace/ Marketing Concepts

2. Designing a customer driven marketing strategy

3. Preparing an integrated marketing plan

4. Building Customer Relationship

5. Capture Value from Customer

The Changing Marketing Landscape

• Uncertain Economic Environment

• Digital Age

• Rapid Globalization

• Call for Social Responsibility

• Growth of Not for Profit Marketing

Marketing Environment

There are two environments, these are:

The Company’s Microenvironment

Actors close to the company that affects its ability to serve its customers

They include:

• The company

• Suppliers

• Marketing intermediaries

• Customer markets

• Competitors

• Publics

Macro environment

It is made up of the larger societal forces that affect the microenvironment. Broader factors that affect
the actors in microenvironment.
 • Demographic Environment (Worldwide Population Growth, Ethnic Markets, Geographical
Shifts in Population, Population Age Mix)

• Economic Environment (Income Distribution, Raw-material-exporting economies, Industrial

economies)

• Natural Environment (Higher Pollution Levels, Increased Costs of Energy, Shortage of Raw
Materials)

• Technological Environment (Accelerating Pace of Change, Unlimited Opportunities for

Innovation, Varying R & D Budgets, Increased Regulation)

• Culture Environment (Views That Express Values; Of Oneself, Of Others, Of the Universe, Of
Society, Of Nature)

What is a service?

A service is a transaction in which no physical goods are transferred from the seller to the buyer. The
benefits of such a service are held to be demonstrated by the buyer's willingness to make the exchange.

Characteristics of Services

o Intangibility: Can’t be seen, tasted, felt, heard, or smelled before purchase.

o Inseparability: Can’t be separated from service providers.
o Variability: Quality depends on who provides them and when, where and how.
o Perishability: Can’t be stored for later sale or use.

INTANGIBILITY

 Services cannot be seen, felt or touched

 Services are experienced only when performed.

 Difficult for clients to understand.

 Difficult to display and communicate to clients.

 Quality is hard to determine for clients.

MARKETING STRATEGIES FOR INTANGIBILITY

 Develop strong visual symbols for firms to suggest fast service.

 Equipments like computers, fax, desk etc. should be state of the art .
  Present professional qualifications of staff in advertisements.

 Promise customers and deliver.

 Portray the firm as caring in the adverts

INSEPARABILITY

o Services are produced and consumed simultaneously

o Client is required to participate in production
o Service delivered is tied to a particular provider.
o Amount of service depends upon provider.

MARKETING STRATEGIES FOR INSEPARABILITY

o Continual training about quality, policies, and production techniques.

o Training for frontline staff

o service and complaint resolution.

o Hire competent employees who know marketing

VARIABILITY

o Services normally vary not only from firm to firm but sometimes even within the firm.

o Services are not always performed the same.

o Team selling can compound this problem.

o Variable quality raises perceived risk for client.

MARKETING STRATEGIES FOR VARIABILITY

o Standardize with automation of routine services to ensure quality.

o Monitor customer satisfaction periodically

o Provide satisfaction guarantees for services.

o Hire and train people and motivate them

PERISHABILITY

o Services cannot be inventoried, returned, or resold.

o Opportunity to sell services is quickly lost.

o Idle services during slow times represent revenue lost forever.

MARKETING STRATEGIES FOR PERISHABILITY

o Increase personal selling for new clients during slow times.

o Increase selling new services to existing clients during slow times.

o Set higher fees at peak usage times and lower fees at non peak times.

o Use reservation system to sell services in advance.

o Cross-train personnel for surges in demand.

Marketing Mix

Set of controllable variables and their levels that a firm uses to influence target market

SERVICES MARKETING MIX

 Product

 Price: What customers must give up to receive your product

 Place: Physical locations and ways you deliver your services, distribution channel,

 Promotion: Messages and vehicles used to let customer know what products and services are
available

 People: Services are provided by people. They make up an organisation.

 Process: All the backend transactions that go on before the good/service is delivered at the
front end. Procedures, mechanisms and flow of activities by which services are consumed.

 Physical Evidence: Physical structures one see around the delivery of service. The environment
in which the service is delivered. They are directly or indirectly involved in the consumption of a
service.

STRATEGIC MARKETING PLANNING PROCESS

Strategic marketing Planning process is a management process that involves the development of
marketing plans, implementation, evaluation of their results, adjustment and fine tuning of the entire
package.

Marketing planning process

Responding properly to the forces at work in the market place and the right things that are most
important to the owners and managers of the bank. A common method used to help plan a marketing
plan is an acronym called AOSTC.

1. Analysis – Of environment (S.W.O.T, Porters five forces)

2. Objectives – Setting yourself SMART objectives.

3. Strategies – For segmentation and growth, targeting and positioning.(Marketing mix strategies(price,
product, promotion and distribution) (BCG matrix, Ansoff matrix)
4. Tactics – Used i.e. marketing mix decisions

5. Control. – How you will monitor that you are achieving objectives.

S.M.A.R.T

• Specific: Clearly state what you want to achieve.

• Measurable: Is it easy to measure the objectives you set by monitoring sales, market share
figures?

• Achievable: Set yourself attainable objectives.

• Realistic: Can you really achieve them with the current resources you have?

• Timed Bound: Set a realistic time scale for the objectives.

BCG Growth-Share Matrix

The four categories are:

• Stars - Stars generate large amounts of cash because of their strong relative market share, but
also consume large amounts of cash because of their high growth rate.If a star can maintain its
large market share, it will become a cash cow when the market growth rate declines. The
portfolio of a diversified company always should have stars that will become the next cash cows
and ensure future cash generation.

• Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that is greater
than the market growth rate, and thus generate more cash than they consume. Such business
units should be "milked", extracting the profits and investing as little cash as possible. Cash cows
provide the cash required to turn question marks into market leaders, to cover the
administrative costs of the company, to fund research and development, to service the
corporate debt, and to pay dividends to shareholders. Because the cash cow generates a
relatively stable cash flow, its value can be determined with reasonable accuracy by calculating
the present value of its cash stream using a discounted cash flow analysis.

• Dogs - Dogs have low market share and a low growth rate and thus neither generate nor
consume a large amount of cash. However, dogs are cash traps because of the money tied up in
a business that has little potential. Such businesses are candidates for divestiture.

• Question marks - Question marks are growing rapidly and thus consume large amounts of cash,
but because they have low market shares they do not generate much cash. A question mark
(also known as a "problem child") has the potential to gain market share and become a star, and
 eventually a cash cow when the market growth slows. If the question mark does not succeed in
becoming the market leader, then after perhaps years of cash consumption it will degenerate
into a dog when the market growth declines. Question marks must be analyzed carefully in
order to determine whether they are worth the investment required to grow market share.

Under the growth-share matrix model, as an industry matures and its growth rate declines, a business
unit will become either a cash cow or a dog, determined solely by whether it had become the market
leader during the period of high growth.

Ansoff’s Product/market matrix

The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth
strategy. It suggests that a business’ attempts to grow depend on whether it markets new or existing
products in new or existing markets.

Market penetration

Market penetration is the name given to a growth strategy where the business focuses on selling
existing products into existing markets.

Market development
Market development is the name given to a growth strategy where the business seeks to sell its existing
products into new markets.

Product development

Product development is the name given to a growth strategy where a business aims to introduce new
products into existing markets. This strategy may require the development of new competencies and
requires the business to develop modified products which can appeal to existing markets.

Diversification

Diversification is the name given to the growth strategy where a business markets new products in new
markets. This is an inherently more risk strategy because the business is moving into markets in which it
has little or no experience.

What is a product?

A product is anything that can be offered to a market for attention, acquisition, use or consumption that
might satisfy a need or want.

Levels of a product

 Core product
 Actual product
 Augmented product

Product classifications

Consumer products: products bought by final consumer for personal consumption-convenience

products, shopping products, specialty products and unsought products.

Industrial products: products bought by individuals and organizations for further processing or for use in
conducting a business-materials and parts, capital items, supplies and services (convenience)
New Product Development

A firm can obtain new products in two ways:

1. Through acquisition by buying a whole company, patent or license to produce someone else’s
product

2. Through new product development in the company’s own research and development

department. The development of original products, product improvements, product

modifications, and new brands through the firm’s own R & D efforts.

The New Product Development

• Idea Generation

• Idea Screening

• Concept development and testing

• Marketing strategy development

• Business Analyses

• Product development

• Test marketing

• Commercialization

Product life cycle

The course of a product’s sales and profits over its lifetime:

• Product development

• Introduction

• Growth
 • Maturity

• Decline

SERVICE

A Service is a form of product that consist of activities, benefits, or satisfactions offered for sale that are
essentially intangible and do not result in the ownership of anything.

Service Decisions

• Nature and significance of services

• Characteristics of services

• Issues of service quality

• Marketing implications for services

Marketing strategies for service firms

Successful service firms focus their attention on both their customers and employees. They make use of
the service-profit chain(the chain that links service firm profits with employee and customer satisfaction

1. Internal service quality

2. Satisfied and productive service employees

3. Greater service value

4. Satisfied and loyal customers

5. Healthy service profits and growth

Types of marketing in service industries

• Internal marketing: Train and effectively motivate its customer contact employees and all the
supporting service people to work as a team to provide customer satisfaction

• External marketing: The normal marketing involving the 4p’s

 • Interactive marketing: A firm that recognizes that perceived service quality depends heavily on
the quality of buyer-seller interaction.

Managing service quality

• Customer retention is the best measure of quality

• Consistency of value delivery

• Good service recovery through empowering front line employees

• Watch service performance closely(both their own and that of competitors)

• Communicate concerns about service quality to employees and provide performance feedback.

Managing service productivity

With cost rising service firms are under pressure to increase service productivity.

• Train current employees better

• Hire new employees who will work harder or more skillfully

• Increase the quantity of their service by giving up some quality

• Harness the power of technology

• However companies must avoid pushing productivity so hard that doing so reduces quality.

Individual Product and Service Decisions

• Product and Service Attributes

• Branding

• Packaging

• Labeling

• Product Support Services

Product Attributes
 • Product Quality- freedom from defect. Ability of product to satisfy customer needs.

• Product Features- competitive tool for differentiating a company’s product.

• Product Style and Design- a way to add customer value is through product style and design.
Style-appearance of a product. Design- how consumers will use and benefit from the product.

BRANDING

Brand: A name, term, sign, symbol or design, or a combination of these intended to identify the goods or
services of one seller or group of sellers and to differentiate them from those of competitors.

Importance of branding

• Assures customers

• Identifies the firm that manufactured the product.

• Helps address new target market

• Hel p consumers identify products that might benefit them

• Tells buyers about product quality

• Offers security to buyers during repeat purchases

• For firms the brand name serves as a basis on which a whole story of the products quality is built

• Provides legal protection against competitors

• Establish an image for a product or company

Brand equity

The value of a brand, based on the extent to which it has high brand loyalty, name, awareness,
perceived quality, strong brand associations, and other assets such as patents, trademarks and channel
relationships

Importance of high brand equity to firm

• Competitive advantages

• High level of consumer brand awareness and loyalty

• More leverage in bargaining with resellers

 • Because the brand name carries credibility, the company can more easily launch line and brand
extensions

• Offers defense against fierce price competition

Major branding decisions-building strong brands

• Brand positioning- attributes, benefits, beliefs and values

• Brand name selection: suggest product benefit, MMLTAP

• Brand sponsor: manufacturers brand, private brand, licensed brand, co-branding

• Brand strategy or development: Line extensions, brand extensions, new brands, multibrands

Brand name selection

• It should suggest something about product benefit and qualities

• Easy to pronounce, recognize and remember

• Should be distinctive

• The name should translate easily into foreign languages

• Should be capable of registration and legal protection

• Once chosen the name should be protected

Brand sponsor

• Manufacturer’s brand(national brand):selling their output under their own manufacturer’s

brand names

• Private brand: Manufacturers sell to resellers who give it a private brand(store brand or
distributor brand)

• Licensing: acquiring and using names and symbols previously created by other known firms for a
fee

• Co-branding: two companies joining forces to co brand a product

Brand strategy
• Line extension: existing successful brand names extended to new forms ,sizes and flavors of an
existing product category

• Brand extensions: existing successful brand name to launch a new or modified product in a new
category

• Multibrands: new brand names introduced in the same product category e.g. Procter and
Gamble in the detergent market with tide, Ariel etc

• New brands: A firm may create a new brand name when it enters a new product category for
which none of the company’s current brand names are appropriate