Marketing Financial Products

Marketing Financial Products: Contents

Detailed Contents

Part One: Marketing Financial Products – The Big Picture

1. MARKETING FINANCIAL PRODUCTS – AN INTRODUCTION 3
Financial Products in the Services Spectrum 4
Characteristics of Financial Products 4
The Business Environment of the BFSI Sector 9
Macro Environment 9
Micro Environment 13
Internal Environment 13
Marketing Financial Products 14
Transformation in Marketing Practices 15

2. CUSTOMER FOCUS IN MARKETING FINANCIAL PRODUCTS 18
Consumer Behavior 19
Factors Affecting Financial Services Buyer Behavior 19
Consumer Behavior: A Situational Approach 22
Marketing and Strategy 25
Marketing at the Corporate Level 26
Marketing at Business Unit/ SBU Level 27
Marketing at Functional/ Operating Level 27
The Role of Marketing Research 29
Market Analysis 29
Information Needs for Decision Making 31
Market Segmentation 33
Need for Segmentation 33
Segmentation Approaches 33
Segmentation Bases 34
Target Market Selection 36
Undifferentiated Marketing 37
Differentiated Marketing 37
Concentrated Marketing 38
Positioning 38
Organizational Positioning in Financial Markets 39
The Customer Service Imperative 40
Need for Customer Service 40
Ways of Improving Customer Service 41
Dimensions of Service Quality 42

3. PRODUCT MANAGEMENT AND CUSTOMER RELATIONSHIP MANAGEMENT 45
The Product Concept and Product Management 46
Levels of a Product 47
Factors Influencing Product Strategies 47
Product Mix Strategies 49
Branding in Financial Products 50
Importance of CRM in Marketing Financial Products 52
Need for CRM in Marketing Financial Products 52
Benefits of CRM 52
CRM and Relationship Marketing 53
Two Types of Relationship Marketing 54
Levels of Relationship Marketing 54
CRM and One-to-One Marketing 56
CRM Concepts 57
Customer Knowledge 57
Customer Loyalty 58
Customer Switching 59
CRM Implementation and Evaluation 61
Customer Knowledge Management 61
Role of Technology in CRM Implementation 63
Performance Evaluation of a CRM Program 65
Future Outlook for CRM Usage in India 67

Part Two: Marketing Financial Products – A Closer Look

4. CORPORATE BANKING 73
Customers and Relationships in Corporate Banking 74
Corporate Customers 74
The Bank-Corporate Customer Relationship 75
Factors Influencing the Bank-Corporate Customer Relationship 75
The Partnership-Relationship Lifecycle 76
Benefits of Partnership Relationship 78
The Product Mix 79
Liability Products 80
Asset Products 81
New Product Development & Innovation 82
New Product Development 82
Other Innovations in Bank Marketing 83
Pricing 84
Pricing Factors 84
Promotion 87
Personal Selling 88
Advertising 88
Public Relations 88
Sales Promotion 90
Distribution 90
Bank Branches and Direct Sales Force 91
Internet Banking and Phone Banking 91
The SME Segment 92
Factors Influencing Bank Lending to SMEs 92
The Changing Scenario 93

5. RETAIL BANKING 96
Retail Banking in India 97
The Paradigm Shift 97
Differences between Retail and Corporate Banking 99
Factors Contributing to the Growth in Retail Banking 100
Competition to Retail Banks 101
Types of Retail Banking Products 101
Liability Products 102
Asset Products 105
Credit/Debit Cards 107
Investment Products 108
New Product Development 108
Generic New Products 108
Banking to HNIs and NRIs 109
Pricing 110
Price Elasticity of Demand 110
Pricing of Liability Products 111
Pricing of Asset Products 112
Covert and Overt Pricing 112
Promotion 113
Advertising 113
Sales Promotion 114
Branding 115
Personal Selling 116
Telemarketing 117
Direct Mail and Direct-response Advertising 117
Public Relations 118
Distribution 118
Branch Banking 119
ATM 120
The Internet 121
Phone and Mobile Banking 121
EFTPOS 121
Direct Selling Agents (DSA) 122
Call Centers 122
Distribution Network of Alliance Partners 123
Cross-selling 123
Need for Cross-selling 123
Issues in Cross-selling 125

6. CREDIT CARDS 128
Branding 129
Branding Strategies 129
Co-branding 131
Brand Measurement 132
Pricing 133
Factors Influencing Pricing decisions 134
Pricing Issues 134
Guidelines for Pricing 136
Promotional Mix 136
Credit Card Advertising 137
Sales Promotion 140
Personal Selling 141
Public Relations 142
RBI Regulations on Credit Card Promotions 142
Distribution 144
The Current Scenario 145
Credit Card Usage 145
Technology 146
Credit Cards for Corporate Use 146
Fraudulent Practices 146
Privacy Issues and Soft Targeting 147
CRM in Credit Card Marketing 148

7. NON-LIFE INSURANCE 151
Product Range in Non-life Insurance 152
Retail Products in Non-life Insurance 152
Corporate Products in Non-life Insurance 154
Product Planning and Development 158
New Product Development 158
Customization 158
Pricing of Non-life Insurance Products 159
Life Insurance vs. Non-life Insurance 159
Factors Affecting the Pricing of Non-life Products 160
Pricing Objectives 160
Promotional Mix 161
Advertising 161
Distribution 164
Designing a Distribution System 164
Distribution Channels 164
The Current Scenario 166
Joint Ventures 166
Detariffing 167

8. LIFE INSURANCE 170
Introduction to Life Insurance 171
Differences between Life and Non-Life Insurance Products 172
Types of Life Insurance Products 172
New Product Development and Branding of Life Insurance Products 176
New Product Development (NPD) 176
Idea Screening to Product Launch 177
Branding of Life Insurance Products 178
Pricing of Life Insurance Products 180
Importance of Pricing 181
Pricing Approaches 181
Underwriting 181
Rating Methods 182
Promotional Mix in Life Insurance Marketing 183
Advertising 183
Sales Promotion 184
Public Relations (PR) 185
Personal Selling 186
Distribution Channels for Life Insurance Products 186
Direct Sales Force 186
Network of Agents and Brokers 187
Branch Network 187
Cross-selling Life Insurance Products 188

9. SMALL SAVINGS AND RETIREMENT PLANNING 192
Types of Products 193
Savings Schemes 193
Retirement Schemes 196
Pricing 201
Small Savings Schemes 201
Retirement Plans 202
Advertising, Sales Promotion, and Public Relations 203
Media Strategy 203
Advertisement Appeals for Retirement Solutions 205
Sales Promotion 207
Public Relations 208
Distribution 209
Distribution of Small Savings Schemes 210
Distribution of Retirement Products 211
The Changing Scenario 212

10. MUTUAL FUNDS 215
Evolution of Mutual Funds in India 216
Organizational Set-up of a Mutual Fund 218
Types of Mutual Funds 219
Classification Based on the Structure of the Mutual Fund 219
Classification Based on the Investment Objectives 220
Classification Based on Specific Purpose 221
Innovation and New Fund Launches 223
Designing a Mutual Fund Product 223
Systematic Investment Plan (SIP) 224
Factors Influencing New Fund Launch 225
Pricing 226
Terms in Pricing 226
New Fund Pricing 228
Distribution 228
Types of Distribution Channels 229
Cross-selling through Mutual Banking 230
Promotion 231
Advertising 232
Sales Promotion 234
Branding 234
Public Relations (PR) 234

11. FEE-BASED SERVICES 238
Importance of Fee-based Services 239
Corporate Fee-based Services 240
Cash Management Services 241
Letter of Credit and Bank Guarantee 242
Bill Discounting, Factoring, and Forfaiting 242
Foreign Exchange Services 244
Merchant Banking 244
Registrar, Underwriting, and Custodial Services 245
Leasing 246
Credit Rating 246
Retail Fee-based Services 247
Money Transfer and Payment Services 247
Wealth Management and Online Trading 250
Other Value Added Services 251
Pricing 251
Factors Influencing Pricing 252
Pricing of Different Fee-based Services 252
Distribution and Promotion 253
Distribution of Fee-based Services 253
Promotion of Fee-based Services 255
People 256
Process 256

Part Three: Trends and International Perspectives

12. TRENDS IN BANKING AND INSURANCE MARKETING 261
Technology and Marketing 262
Kiosks as Marketing Tools 262
Stored Value Cards 263
Digital Security 263
Business Intelligence 264
Enterprise-wide IT Solutions 264
Trends in Bank Marketing 265
Bancassurance 265
Mutual Banking 267
Rural Banking and Technology Inclusion 267
Financial Inclusion 268
Microfinance 269
SMEs: The New Focus of Banks 270
Overseas Banking 271
Universal Banking 271
Electronic Fund Transfers & Clearing Services 272
M-Commerce 272
Code of Commitment from Banks 273
Trends in Insurance Marketing 273
Micro-insurance 274
Film Insurance 274
Health Insurance 274
Insurance for Women 275

13. THE GLOBAL SCENARIO 278
Marketing Financial Products in the United States 279
Bank Marketing in the US 279
Insurance Marketing in the US 281
Marketing of Pension Plans and Mutual Funds in the US 283
Marketing Financial Products in the United Kingdom 283
Bank Marketing in the UK 283
Insurance Marketing in the UK 284
Marketing of Mutual Funds in the UK 285
Marketing Financial Products in China 286
The Banking Sector in China 286
The Insurance Sector in China 287
Marketing of Mutual Funds in China 287