Marketing Financial Products


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Marketing Financial Products Textbook | Courseware

Credit Cards - Chapter 6

Credit cards, charge cards, and debit cards facilitate cashless transactions. The credit card business is a low margin, high volume business. Branding is of immense significance in the credit card industry. Different types of branding strategies are used of which co-branding is the most commonly used approach. Co-branding involves the alliance of two brands for mutual benefit. Effective branding requires an understanding of brand metrics and the focus areas for effectiveness. The pricing of credit cards is a difficult task. The primary factors influencing pricing are the consumer price awareness and the price-quality cue. Annual percentage rates (APR) and fees are two important components in pricing. Risk-based pricing is a commonly followed pricing method where the pricing of credit cards is based on an assessment of the risk profile of the customer. The major components of pricing are the annual percentage rate (APR) and the different types of fees that are charged by credit card marketers. Credit card marketers make use of all the elements of the promotional mix. The advertising campaigns are created with certain advertising objectives.

The advertisements can have different types of appeals. The focus of the content also segregates ads into ads with soft value and ads with hard value. Promotional offers are the most prevalent approach to sales promotion. A thorough study of the market and the competitors is needed for devising an effective sales promotion strategy. Sales promotion techniques include introductory offers, cash back schemes, rewards programs, and cause-related marketing.

Another element of the promotional mix is personal selling. Credit card marketers use direct sales personnel, direct selling agents, direct mail, and the Internet as personal selling tools. Credit card marketers also use public relations (PR) efforts as part of their promotional mix. The Reserve Bank of India has issued guidelines to curb unethical promotional practices.

The kind and number of distribution channels, the sales force, and strengthening of the branch network are to be given emphasis as part of the channel decisions. The sales and distribution channels are common for most marketers. Bank branches are the predominant means of distribution. In addition, the advent of technology has led to the use of call centers, the Internet, and creation of terminals at merchant establishments.

The various trends and issues in the credit card industry in India include -- ways to increase credit card usage by retail consumers and corporate customers, importance of CRM, technology in marketing, issues related to credit card fraud, aggressive selling, and privacy related issues.

Chapter 6 : Overview

Branding Strategies
Brand Measurement

Factors Influencing Pricing decisions
Pricing Issues
Guidelines for Pricing

Promotional Mix
Credit Card Advertising
Sales Promotion

Personal Selling
Public Relations
RBI Regulations on Credit Card Promotions

The Current Scenario
Credit Card Usage
Credit Cards for Corporate Use
Fraudulent Practices
Privacy Issues and Soft Targeting
CRM in Credit Card Marketing