Marketing Financial Services
SECTION 1: Identify and review some of the strategies that the company
uses to deal with the difficulties presented by the specific features
of financial services marketing.
SECTION 2: What market segmentation approaches does the company use
and how effective do you think these are?
SECTION 3: In what ways do the forces within the Macro OR the Micro
marketing environment affect the company's ability to market its
SECTION 4: Select 2 components of the marketing mix and review the
ways in which the company addresses these and incorporates them into
its marketing approach.
Note: I will be using the Bank of Scotland for examples in each
The financial services sector is one of the most competitive markets
in the UK. There are now many companies (providers) offering many
similar products. This makes it difficult for the providers to
distinguish their organisation and their products from the
competition. If this is not done successfully then they will not
attract and retain customers thus not generate profits.
This also makes the market confusing from a consumer point of view.
This is a big challenge for the providers to overcome.
Firstly what do we mean when we mention financial services?
"The meaning of the term financial services, as it is applied in the
UK, is broadly understood to include banking, insurance, building
societies, stockbroking and investment services"
A market is a pool of potential customers sharing a particular need or
want, and who may be willing to do business to satisfy that need or
want. Each of these potential customers will be different so, can be
divided into groups on the basis of their needs and wants, (market
segmentation). This also makes the marketing process more manageable.
Marketing is very important, especially in financial services.
Deregulation and technological developments (such as the telephone and
Internet) have helped make entering the market easier. Subsequently
there are many new entrants capitalising on this and intensifying
competition. Marketing is an ongoing process that companies must do.
Marketing of financial services is slightly different to that of soft
drinks products for example. The main differentiating features are:
· Fiduciary Responsibly. This is an important feature of the financial
service sector. Mckechnie (1992) regarded fiduciary Responsibility as
being peculiar to financial service marketing.
"The implicit responsibility of financial service orgainisations for
the management of their customer funds and the nature of the financial
advice supplied to their customers"