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1. Introduction:
Access to financial services is very difficult for low-income groups in the developing world.
Microfinance has proven to be a successful model for viably providing credit and other financial services
to the poor. Unbanked people are forced to rely on a narrow range of expensive and risky informal
services. This constrains their ability to participate in economic exchanges, increase their incomes and
contribute to economic growth. Improving access to financial services for underserved groups in the
developing world can have strong development impacts, particularly at an individual or community level.
It empowers the poor to establish livelihoods, improve incomes, build assets and act as a buffer against
high exposure to economic shocks. Informal activities to manage risk selling assets, reducing
consumption, and taking on expensive informal loans are inefficient, not cost-effective and often have
damaging effects on livelihoods and quality of life.
2. Financial Products and Services:
A product is defined as Anything that has the capacity to provide the satisfaction use or perhaps, the
profit desired by the customer. Product and service are the words used interchangeably in banking
parlance. The bank products are deposit, borrowing or other product like credit card or foreign exchange
transaction which are tangible and measurable whereas service can be such products plus the way or
manner in which they are offered that can be expressed but cannot be measured i.e. intangibles. Better
service is more important than just a good product in the marketing of banking service, so the focus
should be on the want and need of satisfying that product or service.
Services that help in borrowing or lending, investing, buying, selling securities, enabling payment
and settlements,
Comprises services provided by FIs.
Enable raising of funds and efficient distribution of financial products
Examples- underwriting, stock-broking, Hire purchase, leasing, factoring, credit rating,
depositories, etc.
Various services provided by banks collection of bills or cheques, BGs, LCs, locker facilities
etc.

2.1 Elements of Markets
Investors
Issuers
Intermediaries
Regulators
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Financial
Markets
Capital
Market
Equity
Market
Primary
market
Secondary
Market
Derivatives
Market
Debt
Market
Money
Market
2.2 Financial Markets:



2.2 Marketing Financial Services:
Marketing Approach to Banking Services-
Identifying the customers financial needs and wants.
Develop appropriate financial products and services to meet customers needs.
Determine the prices for the products or services developed.
Advertise and promote the product to existing and potential customer of financial services.
Set up suitable distribution channels and branches.
Forecasting and research of future market needs.
Any business organizations have little value without the existence of the customer. The key task of the
bank is not only to create and win more and more customers but also to retain them through effective
customer service. Customers are attracted through promises and are retained through satisfaction of
expectations, needs and wants.
Marketing as related to banking is to define an appropriate promise to a customer through a range of
services and also to ensure effective delivery through satisfaction. The actual satisfaction delivered to a
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customer depends upon how the customer is interacted with. It goes on to emphasize that every employee
from the topmost executive to the junior most employee of the bank is market. The role of marketing in
an organizations existence and growth need not be overemphasized in todays competitive environment.
According to Peter Drucker, marketing is so basic that it cannot be considered a separate function. It is
the whole business seen from the point of view of its final result, that is, customers point of view.
Survival of an organization depends upon its ability to acquire resources necessary for its sustenance. The
objective of marketing is to maximize the markets consumption of an organizations products and
services. Marketers set the goal at maximizing consumer satisfaction, rather than consumption. The
organization, in the long run, is likely to benefit from a customer oriented approach to marketing. Needs
and wants of a person keep changing with time, circumstances and the immediate environment in which
he is operating.
Marketing management essentially involves the efforts to achieve the need satisfaction of the target group
the institution is trying to serve. The basic step involves identifying the needs of the customers and
developing products to suit their needs or modifying the existing products accordingly. It also requires the
need for foreseeing wants of the customers in future and developing suitable products of their
requirement.
As the financial services sector has become more competitive, financial institutions need to consider,
ways of developing relationships with their existing customers in order to defend their market share. As a
result of this the emphasis has switched from transaction-based marketing focused on the single sale to an
ongoing relationship over the long term based on high levels of customer service, customer contact and
quality. This necessitates a strategic approach to markets by carefully considering the products offered
and markets served and should provide an organization with the means to allocate its resources effectively
and efficiently in the pursuit of the specified objectives. Strategic dimension of marketing should focus on
the direction that an organization would take in relation to a specific market or set of markets in order to
achieve a specified set of objectives.
Deryk Weyer of Barclays Bank attempted a comprehensive definition for financial product marketing.
According to him, it consists of identifying the most profitable markets now and in future; assessing the
present and future needs of customers; setting business development goals and marketing plans to meet
them and managing the various services and promoting them to achieve the plans, all in the context of a
changing market environment. Achieving higher business standards and operational performance through
marketing of financial services should be one of the directional goals of the organization.


1.3 Challenges of marketing Financial Services:

Financial organizations today are operating in a highly competitive and rapidly changing environment. In
the changing economic scenario, a professional approach to business development is essential and the
survival of a financial institution depends on its ability to take up challenges coming up in the
environment. Developing business through marketing of banks services is one of the crucial areas which
need attention of the bankers to ensure profitable survival.
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Financial services marketing executives face many challenges in their quest to identify, educate, motivate,
acquire and keep the right customers for their companys products or services. Ranging from getting
better creative to being more consistent with their brand messaging, marketing executives said that the
greatest challenges encountered are in the areas of measurement.

Financial products and services are a particular type of good that pose special challenges to marketing
(developed on the basis of Meidan, 1996). These challenges include the following:

Intangibility
Inseparability
Limited Differentiation
Trust
Geographic Dispersion
Growth Balanced with Risk
Fiduciary Responsibility
Labor Intensity

According to the research paper The Challenges of Financial Services Branding: Majoring On
Category Or Brand Values by Leslie de Chernatony and Fiona Harris:

H1: The values of financial services brands are not unique brand values, but rather generic category
values.
H2: Financial services brands will have more functional values than emotional values.
H3: Services brand marketers perceptions about the values of their brand differ.

In this research paper they have tested these hypotheses. They have said that financial services brands
have little brand differentiation and have been considered almost a commodity with a lack of perceived
differences between suppliers and numerous suppliers offering similar products focusing predominantly
on costs or financial benefits. Branding in financial services is still a fairly recent development.
Successful values management requires understanding and agreement about a brands values by those
responsible for brand strategy, before they can be cascaded to staff and consumers.
The findings indicate that in spite of the intense competition among financial services brands, these
brands were failing to differentiate themselves on the basis of unique emotional values, but were instead
focusing on functional category values.

To better understand these challenges and how they were being addressed, the firm undertook a research
project in 2004. The survey was conducted with senior marketing executives from a total of 67 financial
services institutions in the USE. Based on the analysis made by MCorp, a strategic brand and marketing
consultancy there are two key areas which must be addressed by financial services marketers
a lack of critical brand and marketing performance-related information and the systems and
programs to track it
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A perceived lack of top-down, organizational understanding of the importance, value and
meaning of brand.
These results are indicated that the respondent group of about 50 percent who are comparatively
dissatisfied with their performance against several different brand and marketing success measures .On
the one hand, financial services marketers lack key information about customers, brand, and marketing
campaign and programme success. They also feel they lack information about touch point efficacy,
competition, and customer value and customer relationships. But their organizations lack information,
too.
According to the Journal of Marketing Research Article, 2011, American Marketing Association,
Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in
India by Sarthak Gaurav, Shawn Cole, and Jeremy Tobacman, the article says that Sarthak Gaurav,
Shawn Cole, and Jeremy Tobacman conducted a research on the marketing complexes of financial
products. This paper offers practical answers to what the International Labor Organization identifies as a
critical constraint to the spread of micro-insurance: Achieving scale through cost-effective distribution is
one of the biggest challenges facing insurers in low premium environments where customers are typically
unfamiliar with insurance products and often skeptical of providers


2.4 Recommendations to overcome the challenges:

To overcome the challenges, there are some areas which must be addressed by financial services
marketers:
First is the day-to-day challenge of how to improve continually the efficacy of strategic and
tactical marketing, branding and customer relationship initiatives.
Second is how to overcome direct and indirect barriers to measuring, funding and implementing
marketing and branding best-practices programmes.
Ignoring the regular and consistent gathering of data and their subsequent analysis make it very difficult
to defend the efficacy of marketing initiatives, programmes or departments, much less increase internal
support for and understanding of the importance of brand and marketing initiatives. Ultimately, the author
believes that those financial services firms that continue to underperform in these areas will see increased
competitive pressure and a loss of strategic advantage, leading to a decrease in valuation over time.
Marketing management has to take some measure to overcome the challenges. These could be-
First, FIs should define their corporate mission and objectives.
Second, they should define and implement corporate and marketing strategies to serve as guiding
principles to achieve the corporate mission and objectives.
Third, FIs need to define the marketing mix of operational policies necessary to achieve the strategic
marketing objectives as part of the overall corporate strategy. Marketing management goes beyond
defining strategies and objectives. It is a continuous process that includes planning, implementing and
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evaluating performance. The planning stage includes the setting of clear goals and the design of strategies
to achieve those goals. The implementation stage includes forming and staffing the marketing team and
directing the actual operation of the team according to plan. The evaluation stage includes analyzing
performance in relation to the organizational goals. This third stage indicates the interrelated, continuous
nature of the management process. The results of evaluations are used to plan goals and strategies for the
future. Planning, implementation and evaluation form a continuously revolving and intertwined
management process.

2. Conclusion:
Financial services organizations need to ensure their brands values are correctly understood by members
of their brand team, before attempting to communicate their brands values to staff and subsequently
consumers. Banking sector reforms have changed the traditional way of doing banking business. Mainly
technology is the outcome of banking reforms. Customer is now the king and customer focus or
satisfaction of customer is the main aim of the banks. With the introduction of new products and services
competition has grown up among the banks. Only those banks will survive who face the competition with
the effective ways of marketing.