Download MIDLANDS STATE UNIVERSITY FACULTY OF COMMERCE

MIDLANDS STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF MARKETING MANAGEMENT
Course Outline: Marketing Of Financial Services (MMRK812)
Lecturer: Mr N. Nkomazana, Msc.
Phone: 0774 382 517
Email: [email protected]
COURSE OBJECTIVES:
This course builds on key principles learned in marketing of services and places them in the
context of the financial services sector. The course seeks to study how consumers decide to
purchase financial services and contrast this process with how non-financial services and
goods are purchased. As traditional distinctions among types of financial institutions continue
to blur, competitive edge in this marketplace will require strategic not just tactical marketing.
Marketing of financial services give students an opportunity to examine the contribution that
marketing can make to the success of an organization that operates in this industry. The focus
is on learning how to solve marketing problems and applying marketing theories to “real life”
situations. This will help students and practitioners to understand key issues and future trends
that surround the financial services sector. Having completed this course, students should be
able to manage consumer marketing activities for a wide array of financial products and to
optimize tactical and strategic components of marketing plans for financial services
organizations.
ASSESSMENT:
Coursework will constitute 30% of the final mark, with the final examination at the end of the
semester contributing the remaining 70%. Coursework will be made up of one individual
assignment and one group presentation.
COURSE CONTENT
The course contents are as follows:
1. The role of marketing in financial institutions
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Main players in the financial services sector and their functions
Trends in the Zimbabwean financial services sector
Categories of financial products and services
Challenges of marketing financial services
Main characteristics of financial services
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2. Customer decision process in financial services
 Rational consumer decision making
 Heuristic decision making
 Framework for understanding consumers’ financial decisions
Decision patterns related to human cognitive circuitry
Behavioural patterns related to emotions
Behavioural patterns related to insufficient consumer knowledge
 Ethical implications of the consumer decision process
3. Pricing
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Challenges in pricing financial services
Common approaches to pricing financial services
Category specific pricing practices
Strategic consideration in pricing
4. Advertising
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Unique aspects of advertising in financial services
Framework for financial services advertising
Advertising basics
Success factors in financial services advertising
Steps in advertising financial services
regulation and financial services advertising
5. Distribution
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Strategic role of distribution in financial services marketing
Distribution systems used in financial services marketing
The agency system
Determining distribution system characteristics
Impact of technology in financial services distribution
Financial services distribution strategy
6. New product introduction in financial services markets
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New product opportunities in the product attribute space
How new products and services are created
Methods of identifying new product needs
Testing the market acceptance of new financial services
The product life cycle
7. Segmenting financial services markets
 The segmentation process
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 Cluster analysis
 Targeting customer segments
 Segmenting customers based on existing relationships
8. Customer satisfaction with financial services
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Benefits of customer satisfaction with financial services
Determinants of customer satisfaction
Measuring customer satisfaction
Dimensions of customer satisfaction with financial services
Improving customer satisfaction using Gap analysis
Customer relationship management
Methods of strengthening customer relationships
9. Strategic market planning in financial services
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The need for financial services marketing strategies
Strategic challenges in financial services marketing
The DIAMOND framework for financial services marketing
Developing a Marketing plan
TEXTBOOKS
A number of alternative textbooks are considered suitable for the material covered in this
course. The following are some of the recommended texts:
Ayadi, D. (1994) Advertising and Promotion: the Marketing of Financial Services, 2nd
Edition.
Cetina, I. and Mihail, N. (2000) Price strategies in Banking Marketing. Journal of
Banking Marketing, 3:21-28.
Clapp, B. A. and Vaglio, N. (2008) Shifts happens: The new age of bank marketing –
How changing lifestyles and customer experience are challenging bank marketers.
CreateSpace Publishing: USA
Estelami, H. (2007) Marketing Financial services, Dog Ear Publishing, Indianapolis:
USA.
Naggeman, J. (2009) The professional’s guide to financial services marketing: Bitesized insights for creating effective approaches. John Wiley & Sons, Inc. New Jersey:
Canada
INDIVIDUAL ASSIGNMENT QUESTION
a) Identify a specific financial category that you find interesting.
b) Develop the specifications of an innovative financial product that can be introduced
into this market.
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c) Determine the optimal pricing and advertising strategy.
d) Establish which methods are best suited for distributing the product to your target
market.
e) Establish the investment requirements and the return on investment for launching this
financial service in the Zimbabwean market and provide a 3-year timetable of
required marketing activities.
Due date: 30 March 2012
GROUP PRESENTATIONS
Group one:
Using an organization of your choice within the financial services sector, critically review the
marketing strategy adopted and prepare a report which assess the effectiveness of the
following:
a) The company’s approach to market segmentation.
b) The strategies it uses to differentiate itself and its offerings from the competition.
Group two:
In addition to the traditional channels through insurance agents or brokers, people can now
buy insurance through direct channels (e.g. Internet or telephone) or banks. What are the
relative advantages and disadvantages of each channel of distribution for insurance? What are
the consumers’ attitudes towards these channels? In view of the industry restructuring, what
is the future of the insurance companies?
Group three:
There is a trend towards adopting self-service technologies in the financial services sector
(e.g. internet, telephone, ATM, etc). What are the consumers’ attitudes towards these selfservice technologies? What will be the impact of these self-service technologies on the future
of the financial industry?
Group four:
Examine the specific financial needs of small businesses. How do their needs differ from
large corporations? How do the banks manage their relationships with the small businesses?
What would you suggest to improve the small business-bank relationships?
Group five:
“Foreign banks are mostly ahead of the domestic banks in formulating marketing strategies”
Discuss.
Due date: These are to be presented on the last day of the block (20 January 2012).
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