Marketing of

Financial
Services – An
Introduction
CHAPTER 1
Growth of Financial
Services
Issues and
Challenges
THE ROLE OF MARKETING
In the News
Article 1.1
D Q 1 . 1 : V I S I T R B I H A N D S T U DY VA R I O U S P R O J E C T S
TA K E N U P BY T H E M . P R E PA R E A W R I T E - U P O N O N E O F
TH EM A N D P RES EN T I T TO TH E C L A SS .
Course Objectives

Financial Services Regulatory System Services Marketing Critical and

and Institutions Strategies and Participative
Framework thinking
 Services Marketing, Ninth edition 2023,
World Scientific Publications by Jochen
Wirtz and Christopher Lovelock

Marketing Management, 16th edition,

2021, Pearson by Philip Kotler, Kevin
Text Books Keller, Alexander Chernev, Jagdish N Sheth

Services Marketing, Integrating Customer

Focus Across the Firms, Eighth edition
2024, McGraw Hill by Valerie Zeithaml,
Mary Bitner, Dwayne Gremler and Ajay
Pandit
 CO1: An ability to recognise and analyse
functional issues of service gaps and consumer
behaviour for financial services

CO2: An ability to use the segmentation,

targeting, positioning, and branding framework
for devising marketing strategies for financial
Learning products in the global context

Outcomes CO3: An ability to analyse and interpret the core

and supplementary needs for developing a
financial product offering

CO4: An ability to develop financial services

using the 7Ps of the financial service mix that
meets the ethical and social needs of the
customers
 Specific
% AOL
Assessment
Weightag Instrument Intended CLOs to be Assessed
Methods /
e s
Task
CO 1 CO 2 CO 3 CO 4 Tentative Schedule
Yes Yes After 30 and 56
Class Test 10% Quiz No No sessions
(5) (5)

Assessment Class
Participation
10%
Discussion
Questions
Yes
(5)
No
Yes
(5)
Between 3-15
No sessions and 31-45
sessions
Developing a Submission is due
Yes Yes after 55 sessions
Project work 10% Financial No No
(5) (5)
Service
Embedded Yes Yes After 30 sessions
Midterm 20% No No
questions (10) (10)
After the
Term End Embedded Yes Yes Yes Yes
50% completion of 60
Exam questions (10) (10) (15) (15)
sessions
Applying Marketing Concepts in
Financial Services

Scope and Customer Consumer

demand state Value Behaviour

Brand
Segmentation positioning
Marketing Mix
and Targeting and Brand
equity
Critical
Thinking
D Q 1 . 2 : U S I N G YO U R B AC K G R O U N D I N M A R K E T I N G ,
A SS E SS W H I C H C O N C E P T S W I L L B E A P P L I E D I N
E AC H O F T H E T O P I CS U N D E R C R I T I C A L T H I N K I N G .
In the News
Article 1.2
DQ1.3: OUTLINE THE MARKETING
S T R AT E G I E S R E Q U I R E D F O R A G O L D LO A N
P R OV I D E R U S I N G C R I T I C A L T H I N K I N G .
Financial
Services
In the News
Article 1.3
DQ1.3: OUTLINE THE MARKETING
S T R AT E G I E S R E Q U I R E D F O R A G O L D LO A N
P R OV I D E R U S I N G C R I T I C A L T H I N K I N G .
 Financial markets
Scope of
Financial
services Financial
institutions
operating in these
markets
14
 Equity

Financial
Currency
Markets
Fixed Income
Commodity
derivatives
15
 RBI
Financial
Institutions SEBI
in Indian
context
under the IRDA
purview of

PFRDA
16
 Commercial Banks

Non-banking financial
Under companies (NBFCs)
RBI
Asset Reconstruction
Companies (ARCs)

Primary Dealers (PDs)

17
Commercial
banks
Schedules commercial banks
◦ Public sector banks
◦ Private sector banks
◦ Foreign banks
◦ Urban Co-operative banks
◦ Small Finance banks
◦ Payment banks

18
In the News
Article 1.4
DQ1.4: RECALL THE CONCEPT OF THE SCOPE OF
MARKETING. IDENTIFY THE MARKETING
ENTITY/ENTITIES AND THE DEMAND S TAT E
M E N T I O N E D I N T H E A RT I C L E .
In the News
Article 1.4
D Q 1 . 5 : D E S I G N A P R O M O T I O N A L C A M PA I G N U S I N G
ANY TWO TYPES OF MEDIA OTHER THAN PRINT
M E D I A F O R T H E I SS U E D I S C U SS E D I N T H E A RT I C L E .
What are
differences
between
Banks and
NBFCs?
In the News
Article 1.5
D Q 1 . 6 : C O M PA R E A N D C R I T I C A L LY A N A LY S E T H E
R E P O RT O N T H E N B F C B A N K S P U B L I S H E D BY
P W C A N D A S R E P O RT E D BY N O M U R A .
 Member brokers Depository
Exchanges Depositories
and sub-brokers participants

Foreign
Alternative
Mutual funds Institutional Custodial agencies
investment funds
Investors

Portfolio
Distributors for
Under SEBI
Investment Investment mutual funds and
management
bankers advisors other investment
companies
products

Self regulated
organizations
Registrars and Debenture (SROs) such as
transfer agents trustees Association of
Mutual Funds of
India (AMFI)

23
 General Health
Under insurance insurance
Insurance companies companies
Regulatory
and Reinsuranc
TPAs e
developmen companies
t Authority
of India Insurance
(IRDAI) brokers

24
 Under Pension Fund Regulatory and
Development Authority (PFRDA)
 National Pension System (NPS)
 Voluntary , defined contribution retirement savings scheme
 Institutions
 NPS Trust
 Central Record Keeping Agency (CRA)
 Pension Funds
 Trustee Bank
 Custodian
 Aggregators
 Points of presence
 Government Nodal Offices

25
  Clearing Corporation of India Limited (CCIL)
 Set up by major banks and financial institutions with support of the RBI
 Manage risks in settlements of transactions in debt, money and forex markets

Financial  Credit rating agencies

 6 agencies viz. CRISIL, CARE, ICRA, Fitch, Brickworks ratings and SME rating
agency are registered with SEBI

institutions  Primary role is to give credit rating to various debt issuances, this helps
investors to understand the credit risks associated with various debt issuances

with  Credit Information Bureau of India limited (CIBIL)

 Was set up by SBI,HDFC, D&B and TransUnion International

developme  Primary role is to provide credit related information about the individual
borrowers to lenders and credit card companies

ntal  Discount and Finance House of India limited (DFHIL)

 Was set up by the RBI, Public sector banks and financial institutions

perspective  Primary role is to make market and provide liquidity in the Money Market

 Securities Trading Corporation of India limited (STCI)

 Was set up by the RBI, public sector banks and financial institutions
 Primary role is to create active secondary market in the government
securities

26
In summary:
coverage of financial services would be
through the following categories

Asset
Consumer banking Institutional Stock broking,
management
(which would banking (including distributors of
companies ( MFs,
include NBFC investment investment
portfolio
products as well) banking) products
managers, AIFs)

Credit rating
Life Insurance General Insurance
agencies

27
The Nature of
Services
 SWOT
• Gap analysis (as part of SWOT analysis)
• Gaps in own offerings
• Gaps in competitors’ offerings

Business Strategy
We follow in • Go/No-go

this course • Making choices about aspects of the business: products,

customer segments, markets, human resources, capital mix,

the following
locations, make-vs-buy
• Marketing strategy
• Segmenting customers : choice about method(s) used to
framework segment the universe of potential customers. This would be
based on the understanding of consumer behaviour
for analysis • Making choices about
• Targeting Customer segments
• Positioning of the product/service attributes to the chosen
customer segments

Marketing plan
• 7 Ps of the Marketing Plan

29
 Product
Traditional Price
Hence 4 + 3 marketing Promotion
framework
“P”s : Placement

Marketing
Mix for Physical
For services
Services marketing,
evidence
Process
additionally People

30
 Hybrid Service: A major
service with
accompanying minor
goods and services, like
Categorising banking services.
Services
Pure service: It is
primarily an intangible
service, for example,
valuation advice.

31
 Current account
Overdraft against current account
Letter of credit
Loan syndication
Fund raising through IPO
Categorize M&A
into Hybrid Valuation opinion

vs Pure Balance sheet restructuring

service Equity fund management

Housing loan
Valuation of house along with loan against residential
property
Life insurance bundled with housing loan
Financial plan for wealth management
Execution of investments for implementing financial plan

32
 Intangible: you cannot see,
taste, or touch them.

Inseparable: you cannot

Services in separate production from
marketing consumption.
context Perishable: you cannot store
them, save them, or return
them.
Heterogeneous: you cannot
mass produce them as they are
unique.
33
In the News
Article 1.6
DQ1.7: HOW ARE DIFFERENT FINANCIAL SERVICES
U S I N G B R A N D E L E M E N T S T O C R E AT E TA N G I B L E S ?
D I S C U SS TW O EXA MP L ES O F D I FFER EN T TY P ES O F
SERVICES.
Locating Financial Services
Example : 7 Ps for
Savings Account
◦ Product : features such as “sweep” facility available or not, net
banking, electronic fund transfer, daily transactions and balance
information, security
◦ Price : rate of interest
◦ Promotion : loyalty scheme, preferred customer scheme,
benefits in other bank products such as discounted personal
loans etc
◦ Place : bank branch / online internet
◦ Physical evidence : account statement, can make payments
successfully and smoothly out of the account
◦ Process : funds transfer ( signature verification, two factor
password protection for online transfer ), statement of accounts
periodicity, balance information, change of address etc
◦ People: responsiveness and empathy of the bank branch
service persons

36
Managin
g Service
Quality
Distinctive
Characteristics
of Financial
Services
Role of
Regulatio
ns
Trust
Risk
Disruptive
Technology