MARKETING OF FINANCIAL SERVICES
Module I
Introduction
l GROWTH OF SERVICE SECTOR ECONOMY
We are living in a service era
Service sectors account for 70% of employment opportunities
Economies dominated by Service Sector
Rising contribution of service sector to GDP an indicator of development
Amity Business Schoo
Rapid evolution of new services
l DEFINITION
“A service is any act or performance that one can offer to the other. It is essentially intangible
and does not result in the ownership of anything. Its production may or may not be tied to a
physical product”
TYPES OF SERVICES
Pure stand alone services
o -counseling, consultancy , nursing.
Combination of service and goods
o -restaurants, retail stores
Service as a component of goods
-after sales service of home appliances
Products or services
Financial Services as PRODUCTS
Separability–production of many financial products can be separated from their
consumption –checking account, debit cards
Lack of Perishability–unlike a dinner reservation, a credit card will be there when a
customer wants it; its supply can be adjusted as per demand
Mass Production –while many financial services are individualised, others can be mass
produced and mass marketed –insurance policies, data analysis systems
Financial Services as
Services
Financial Services ‘Products’ are not entirely products, because
they contain an important service element which remains intangible.
Features of Financial Services
Low cost of entry – few barriers to creating/copying some of
the financial services.
Speed to market – idea is the product
Lack of exclusivity– because of few protections and low
entry cost –2 in 1 bank accounts/balanced mutual funds
Service is what
it is all about
Product differentiation is difficult in financial services
Additional value has to come from somewhere other than the
product itself
Service is always the major differentiator
Quality control is possible for products in manufacturing process
With a service, quality is added(or not) by the people who the
service or manage the clients
Thus controlling service quality is the biggest challenge
Financial Products
Every one wants to save some money for future needs and unforeseen circumstances
After saving, the question crops up :
What do I do with the money saved until I need it -where do I
keep it?
Either, one can just keep it at some safe place or invest it to earn and grow
the savings
The instruments of investment of savings form one part of financial
products/ services.
Examples : Bank & Post Office Deposit Accounts, Equity Shares, Debt
Instruments( Bonds/Debentures) Mutual Funds, ULIPs etc..
What do you do, if there is a need to spend, but you don’t have the
money?
Borrow money from someone –take a loan
Loans and financing options form the other part of financial
products/services
Examples: Personal Loans(consumer finance –auto loans, housing
loans,otherEMI based purchases, credit cards etc…)
Business Loans( term loans, cash credit facility, overdrafts etc…)
Banking Products & Services
Deposit Products
o Saving Deposits/Accounts
o Current Deposits/Accounts
o Fixed Deposits
o Recurring Deposits
o Hybrid/Flexi Deposits
o Loan Products & Other Products
--) Fund Based Credit Facilities
Working Capital Finance
Cash Credit
Overdraft
Demand Loan
Bills Purchased/Discounted
Term Loans/ Project Finance
Non Fund Credit Facilities
Letter Of Credit
Bank Guarantee
Retail Banking Products
Channels of Retail Banking Services
o ATMs
o Telebanking
o Internet Banking
o Retail Banking Products
Home Loans
Auto Loans
Consumer Durable Loans
Personal Unsecured Loans
Education Loans
Credit / Debit Cards
Insurance Products & Services
Life Insurance
o Term Policy
o Whole Life Policy
o Endowment
o Annuities
o Unit Linked Policy
o Group Life Insurance
General Insurance
o Fire.
o Marine.
o Motor/Accident.
o Health/Medical.
o Liability.
Mutual Fund Products & Services
Products/Funds
o Equity Funds.
o Bond/Debt/Income Funds.
o Hybrid Funds.
o Money Market/ Liquid Funds.
Options/Plans
o Growth/Dividend/Reinvestment
o Systematic Investment.
o Systematic Withdrawal
o Switching
o Gifts
Other Financial Services
o Leasing
o Hire –purchase Finance
o Factoring & Forfaitting
o Bills Discounting
o Housing Finance
o Venture Capital Financing
o Merchant Banking & Other Fee Based Advisory Financial Services
