Q.1. Compare the marketing strategy of any financial services company with another.

Ans:- The role of financial services in stimulating and sustaining economic growth is wellknown. Financial services because of their intangible nature and the fact that services delivery is variable have traditionally been considered more difficult to market than physical products. However, the service organisations make an attempt to tangibalise their services with the help of something. For e. g. LICs logo of two hands protecting the light of the lamp indicates the protection assured by the company. Services are inseparable from the one who is providing it. Services cannot be sold like goods wherever the customer wants it. Whenever a service like banking is given, the banker and the customer must come together for an interaction. Though the technology is trying to make some changes in this regard; separation of the service provider and the service receiver has not been achieved completely. Services are also perishable. Because of their intangibility, they cannot be stored. The intangibility of the service also makes it heterogeneous in nature. The service provided by one stock broker will be completely different from the other one. The services provided by ICICI Bank and those provided by Vijaya Bank differ completely. Because of the heterogeneity of the service, it becomes very difficult to standardize them. Because of all the above-mentioned features, providing a consistent level of service becomes a major challenge to the marketer in todays competitive environment. Marketing Strategies for services Marketing strategies refer to the plan of action that the organization will have to adopt as regards its marketing mix elements are concerned. Marketing mix is defined as the elements an organization controls that can be used to satisfy or communicate with customers. The traditional marketing mix is composed of the four Ps: product, price, place (distribution) and promotion. These elements appear as are decision variables in any marketing text or marketing plan. The marketing mix philosophy implies that there is an optional mix of the four factors for a given market segment at a given point of time. The concept of four Ps is very essential to the successful marketing of services. However, the strategies for the four Ps require some modifications when applied to services. In case of marketing of products, the 4th P i.e., Promotion include advertising, sales promotion, publicity No doubt, the promotion is important in services too, but as the employees are also involved in the real time marketing in addition to their regulars operational roles, the promotion includes training the service delivery people, their dress, appearance etc. Moreover, in the absence of a physical product, convincing the customer about the features of the service is more challenging. At the same time, fixing the right price for the intangible $ service is a very difficult task. Now let us try to understand the decisions that the marketer has to take regarding the Product, Price, Place and Promotion. The following sections deal with the important decisions that the manager has to take to satisfy the customer in a better way.

Q.3. Discuss the considerations of marketing products at different stages of the family life cycle. Ans:- In our society, family is a very influential factor that influences an individuals buying activities. Here we have to understand the influence of two types of families in an individuals life. They area) Family of orientation consisting of parents. b) Family of procreation consisting of ones spouse and children. The family of orientation influences an individuals activities and thinking in the early part of his life. Marketer should know the role and relative influence of husband, wife and children in the decision-making activities. Personal factors Personal factors influencing the buying decision are

Age and family cycle stages, Occupation Economic circumstances, life style Personality.

Age and life cycle stages- People buy different products in different stages of their life cycle. The products that are purchased in the early part of the life may not be preferred in the later part of their life. The family life cycle concept was developed in the 1960s as a tool for segmenting the market for goods and services. It was based an age, marital status, number and age of children and work status-each of which affects the consumers needs, wants and ability to buy. The following table presents the several stages in the family life cycle and the financial needs that are most likely to be experienced at each stage. Family life cycle and financial services Stage Young: Single Financial Situation Banking Needs Few financial burden, Low cost checking, auto independent Recreation loan, credit cards oriented Home purchasing at peak Credit card; home loans, low liquid assets; Investments in shares, planning about security, Insurance Good, stable financial Educational loan, position more expenses

Full Nest: Youngest Child Under six Full Nest: with dependent children

Empty Nest: Older couples with no children

investment in real estates, term deposits, other investment services. Significantly reduced Retirement plans, saving income, fewer expenses certificates, long term deposits.

Occupation:- A persons occupation affects the goods and services brought. Blue collar workers tend to buy more work clothes; where as white collar workers buy more suits and ties. Marketers try to identify the occupational groups that have an above overage interest in their products and services. Economic Circumstances:-A persons economic situation will affect the product choice. Because income changes over time, an individuals ability to use financial services will also change. Personal economic factors such as income, savings, net worth and ability to borrow affect peoples power to buy all types of goods and services, but they are especially relevant to the purchase of financial services. Personality:- Personality can be defined as the aggregate of an individuals trait or characteristics that make him or her unique. Some are extroverts, some are sky some are perfectionists other are casual minded. Some are risk takes: others are cautions. A study found that ATM users were more soft, self- reliant, impulsive, innovative, curious, and active than nonusers. In short, they were considered to be on a faster track. A television act for such a product should consist of fast paced cuts from one scene to another, showing individuals in various situations that suggest spontaneity, independence and a high level of activity. Life Style:- Life style refers to a persons pattern of living. Marketers must find the relationship between the product and life style. The measurement of life style is known as VALS (Values and Life Style). Based on the lifestyle, we can classify the people as below: Believers-conservatives, conventional and orthodox. Strivers- uncertain, try to follow successful people, have limited resources and exposure. Struggler- lower incomes, lowest renounces, brand loyal, buy on purpose. Makers- Practical, self -sufficient, family- oriented, buy on purpose. Achievers- successful, work- oriented, status- conscious. Actualizes- Highest income, self- oriented, image-conscious, wide range of interests. Fulfilled- Mature, responsible, and well-educated professionals. Experiences- outgoing, young, risk- takers, and youthful customers.

Consumers living in the same geographic area do not necessarily buy for the same reasons. Demographics are another easily understood and readily accessible characteristic of markets. Demographic factors include consumers age, income, education, gender, religion and

nationality. Changing age distributions signaling an ageing population, for example, can have a significant impact on the way an organization markets its products, e.g. Marketing to the baby boomers in the US. Demographic characteristics are a commonly used segmentation variable and secondary data is widely available, e.g. The national census. For simple everyday products, demographic criteria can work well in explaining differences in consumer behaviour, e.g. The Economic Times is purchased more frequently by people in higher income brackets. For more complex products, such as financial services, finer distinctions are required. The demographic classification of life stage or life cycle can be a useful way to segment potential markets. Differences in purchasing behaviors between two people of the same age and gender can often be accounted for by the fact that they are at different life cycle stages. Life stage classifications include: Bachelors (young singles living away from home) Newly married, no children Full nest I (youngest child under 6) Full nest II (youngest child 6 or over) Full nest III (older, dependent children still at home) Empty nest I (couple still earning, children left home) Empty nest II (couple retired, children left home) Solitary survivor (still earning) Solitary survivor (retired).

Individuals in different life stages will often have quite different financial positions and buying behavior. Consider the list of the stage classifications in relation to decisions about saving, spending, borrowing and investing. Q.3 Explain the mechanism of securitization and the benefits for a company.
Ans;- Mechanism of Securitisation

The concept of securitisation is best understood by considering a typical transaction.

In securitisation, the originator sells receivables to a Special Purpose Vehicle (SPV) established to isolate the receivables and to perform other functions (e.g. restructuring of cash flows and provision of credit enhancement and liquidity support). The SPV is usually structured as a bankruptcy-remote trust or incorporated entity. The SPV finances the purchase of receivables by issuing securities (usually notes, commercial paper, bills, bonds, or preferred stock) to investors. Legal agreements delineate the rights and obligations of all parties to the transaction, including the appointment of an administrator to manage the receivables where necessary. One or more financial institutions are usually involved in structuring and marketing the securities issued by the SPV. To facilitate investor demand, credit rating agencies assess the likelihood that the SPV will default on its obligations and assign an appropriate credit rating. Credit enhancement and liquidity support is usually obtained by the SPV to ensure a high rating for the securities. Features of Securitisation A securitized instrument generally has the following features: Wide distribution: The basic purpose of securitization is to distribute the product. The extent of distribution which the originator would like to achieve is based on a comparative analysis of the costs and the benefits that can be achieved. Wider distribution leads to a cost-benefit in that the issuer is able to market the product with lower return and hence, lower financial cost to him. In practice, securitization issues are still difficult for retail investors to understand. Hence, most securitizations are privately placed with professional investors. However, it is likely that in the future, retail investors could be attracted into buying securitized products. Homogeneity: To serve as a marketable instrument, the instrument should be packaged into homogenous lots. Most securitised instruments are broken into lots affordable to the marginal investor, and hence, the minimum denomination becomes relative to the needs of the small investor. The need to break the whole lot to be securitized into several homogenous lots makes securitization an exercise of integration and differentiation; integration of several assets into one lump and then differentiation into uniform marketable lots.

Marketability: The purpose of securitization is to ensure marketability to financial claims. Liquidity is afforded to a securitised instrument either by introducing it into an organized market or by one or more agencies acting as market makers i.e. agreeing to buy and sell the instrument at their market determined prices. This is one of the most important features of a securitised instrument, and the others that follow are mostly imported only to ensure this one. The concept of marketability involves two postulates: (a) the legal and systemic possibility of marketing the instrument; (b) the existence of a market for the instrument. Merchantable quality: To be market-acceptable, a securitised product should be of saleable quality. This concept, in case of physical goods, is something which is acceptable in normal trade. When applied to financial products, it would mean that the financial commitments embodied in the instruments are secured to the investors satisfaction. In case of securitization of receivables, the concept of quality undergoes a drastic change, making rating a universal requirement for securitizations. The quality of the debtors claim assumes significance, which at times enables investors to rely purely on the credit rating of the debtors and hence, make the instrument totally independent of the originators own rating. Deconstruction: Securitisation is the process of deconstruction wherein, if one envisages an entitys assets as being composed of claims to various cash flows, the process of securitization would split apart these cash flows into different buckets, classify them, and sell these classified parts to different investors according to their needs. Thus securitization breaks the entity into various sub-sets. Integration and differentiation: Securitisation is the process of integration and differentiation where the entity that securitises its assets first pools them together into a common pool. This is called the process of integration. Then, the pool itself is broken into instruments of fixed denomination. This is the process of differentiation. Commoditisation: Securitisation is the process of commoditization, where the basic idea is to take the outcome of this process into the capital market. Thus, the result of every securitization process, whatever might be the area to which it is applied, is to create certain instruments which can be placed in the market.