Marketing of Financial Services

  • Post last modified:3 August 2023
  • Reading time:25 mins read
  • Post category:Finance
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Marketing of Goods and Services

A product is an offering by an organization to satisfy the needs and wants of customers. A product may include goods, services, information, and ideas. An organization needs to take several crucial decisions regarding the effect it produces. It needs to determine the product mix, conduct product line analysis, and establish the requirement to develop new products.

While planning for any market offering, a marketer considers the five levels of the product that are: the core benefit, the basic product, the expected product, the augmented product, and the potential product. Products can be classified based on durability and reliability. More classification can be done as consumer goods and business goods categories.

The product mix of any organization can be categorized based on width, length, depth, and consistency. Organizations improve their product mix through line extension and product modification. The success and failure of an organization largely depend on whether it takes effective and efficient product decisions or not.

Services are intangible products, such as accounting, banking, insurance, consultancy, education, medical treatment, and transportation. Services are sold without transferring possession or ownership from the manufacturer to customers. Sometimes services are not easily identifiable because they are closely associated with a physical good. For example, classroom teaching is a combination service, such as lectures and tangibles, including classroom and laboratory.

Services comprise the soft parts or intangible products, such as knowledge, attention, advice, and experience to improve productivity and performance. The basic characteristic of the service sector is to provide these services to organizations or end users. The services also include activities, such as transportation, distribution, wholesaling, retailing, and sale of goods from the producer to a customer.

However, the focus of the service sector is more on the interaction between customer and employee than simply transferring physical goods. Over the last 30 years, industrialized nations have seen a substantial shift to the tertiary sector. The services sector is the largest sector of the Western nations and is also the fastest-growing sector.

Service marketing is not only relevant to the service industry but also to the organizations that offer products to their customers. In the beginning years of India’s independence, India grew on the export of labor-intensive products. After the 1970s, India realized the growing importance of services and moved towards optimizing the potential opportunities in the field of services. Some economists raised doubts about the improvement in service sector activities.

They observed that this sector has relatively little scope to improve productivity. According to them, a labor-abundant nation such as India cannot rely on services to help people move out of low-productivity agriculture. Many economists show concern that the fast growth of the service sector employment simply reflects the outsourcing of services. In other words, they see it as little more than a relabeling of the existing employment than creating new jobs.

Distinct Characteristics of Financial Services

The following are the main characteristics of financial services:

  • Complex: Financial services are more complex as compared to normal products and services. This is because financial services are less transparent and involve complex workflows.

  • Intangible: Financial services are intangible.

  • Inseparable: Financial services are produced and consumed simultaneously within the financial sector. Clients are directly involved in the consumption of services via front offices.

  • Perishable: Financial services cannot be stored for future use. This is because these services are consumed when they are offered.

  • Variable: Each service unit is a separate and unique event. Therefore; every event is experienced exclusively by each customer. Therefore, a considerable amount of variation is perceived when a financial services company delivers the same service to different customers.

In addition, the distinct characteristics of financial services are enlisted below:

  • Financial services are planned or targeted to transform savings into investments.

  • The savings in financial services are channelized into investments in such a manner that they can be made approachable to other corporate or individuals in times of need.

  • Financial services comprise a wide range of activities and are thus subdivided into traditional and modern activities.

  • Both capital and money market activities are imparted by financial services.

  • The operations in financial services are executed under regulatory bodies like SEBI and other government agencies or bodies.

  • Financial services provide project-based advisory services for new as well as ongoing projects. Not only this, but it also assists in collaboration and acquisition activities.

8Ps of Service Marketing Mix

A marketing mix can be defined as a collection of tools that can be used in achieving marketing objectives. It uses the four Ps as its tools to decide the marketing strategy. In other words, a marketing strategy relates to the formulation and implementation of the marketing mix that is product, price, place, and promotion. However, the services marketing mix has an additional 4Ps, which are physical evidence, process, productivity, and people.

Let’s discuss the 8Ps of the service marketing mix:


Includes goods, services, events, persons, places, ideas, and information offered to customers by producers. In simple words, a product implies what a seller sells and what a buyer buys. It is the most visible element of marketing. The product involves decisions about factors, such as product design, features, sizes, quality, and packaging.


This is an important aspect of the marketing mix that generates revenue. It is an important element as it determines the value of sales or what customer recognizes as the value of the good on sale. The price implies the monetary value given by a buyer to a seller to get a product. The price strategy involves a decision about the price to be charged to a customer and includes deciding the selling price, discounts, and credit limits.

The factors deciding price are an organization’s objectives, costs, competition, and customer demands. Apart from this, setting the right price involves costs of manufacturing, examining the customer’s perception, and the price of rival products. Research done on the customer’s opinion is very important before setting up the price as it helps in understanding what the customer is looking for in the item and how much he is willing to pay for the product or service. Occasionally the price differs according to the situation and time. It depends on corporate and business objectives.


This is where one can hope to catch the target customers and where selling can actually be done. Place refers to looking for precise distribution channels to reach customers. In other words, place refers to distribution channels through which the final products of manufacturers reach end users. It covers the distance between the manufacturer and the customer.

A distribution channel apart from ensuring the availability of products carries various other functions too such as risk-taking, financing, providing value-added services that may include servicing, maintenance, or home delivery of the product, and negotiation on behalf of manufacturers and customers.

Distribution channels play a vital role in making the product available at the right time for its sustenance in the market. The wholesalers and retailers enable the organization in distributing the goods to the customers. Wholesalers purchase the products in bulk, directly from manufacturers or agents, and sell them to retailers. On the other hand, retailers buy products from wholesalers, agents, or manufacturers and sell them to end users for their personal or family use.


This is nothing but the business of communicating with the customers. It is a combination of all the promotional tools that are used by an organization to provide information on goods and services to customers. These promotional tools include advertising, direct marketing, personal selling, public relations, and sales promotion techniques such as push-up sales promotion and pull-up sales promotion.

These tools inform customers about the product and persuade them to buy it. Promotional plans and policies are developed to deal with the basic question of what promotional activities should be adopted by the company to increase sales.


It refers to employees and customers involved in the creation and consumption of services. People are the essential ingredients for any service delivery. The employees of a service organization require to have good interpersonal skills, attitude, and service knowledge in order to deliver quality services to the customers.

Therefore, it becomes essential to recruit and train the right staff to ensure the proper delivery of services and gain a competitive advantage.


It is a system that assists an organization in delivering services. For example, customers walk into an insurance agency and get plans according to his/her need and requirements. This prompt service delivery involves a process where a person is attended by some staff to understand his/her insurance needs, suggest a plan accordingly, and assist in purchasing the plan.


It is a measure of the rate at which output is produced per unit of input. It depends on a number of factors, such as the availability of resources, change in business cycles, and government policies. Different industries measure productivity differently.

For example, in the service sector, it is measured based on the total revenue generated by employees. Higher productivity leads to lower costs, improved competitiveness, and high profits for an organization.

Physical evidence

It encompasses all tangibles involved in the process of service delivery. Physical evidence is basically associated with the location where a service is delivered to customers and helps them judge the organization.

For example, when customers go to a bank, they judge the bank not only on the basis of the services they receive but also on the basis of physical evidence such as cleanliness, appearance, and seating arrangements of the bank.

The service marketing mix plays a very important role in selling financial services to customers. The financial services should be designed in such a way that they fulfill the needs of the customers.

In addition, the pricing strategy of the products should be such that customers buy the services. The services should be available where the customers want to avail the services. And, finally, the right promotional strategies should be used to inform and convince the customers.

Features of B2B Marketing of Financial Services

B2B marketing, short for Business-to-Business marketing, refers to the process of promoting and selling products or services from one business to another. In B2B marketing, the customers are businesses, organizations, or institutions rather than individual consumers, as seen in Business-to-Consumer (B2C) marketing. B2B marketing strategies are tailored to meet the specific needs and preferences of the target businesses, with a focus on building relationships, providing solutions, and demonstrating value.

With the advancement of the Internet, the marketing of goods and services has come together as a whole new concept. In the case of marketing financial services, B2B marketing is a very important tool.

The following are the key features of B2B marketing of financial services:

Setting up goals and objectives

This is the crucial aspect of the B2B marketing as without any clear objective no venture can become a success. The target should be crystal clear and should constitute aspects like the wants of the customers as well as the marketers.

Developing a strategy to meet the objectives

After setting the goal, it is important to plan the strategies required in achieving that goal.

Setting the content which is authentic and is able to engage the customer

This is another important fact that needs to be taken care of as any content which is not genuine or that is suspicious will cause the failure of the product in the market. Also, the content or the product should be engaging and it should be able to lure the customer and build his interest in it.

Measuring the response of the customers

The B2B marketing is the commercial dealings between a producer and a merchant or between the trader and a vendor. This marketing approach should be able to measure the response of customers about their prod- ucts. To acquire customer reviews is very significant.

What is Online Marketing?

Online marketing, also known as internet marketing or digital marketing, refers to the process of promoting products, services, or brands using digital channels and technologies on the internet. It encompasses a wide range of marketing tactics and strategies that leverage the power of the internet to reach and engage with a target audience. Online marketing has become increasingly prevalent in the modern business landscape due to the widespread adoption of the internet and digital technologies.

Online marketing is also known as Web-based marketing. Web-based marketing uses a website or online tool to market a product or service. It is a dynamic marketing technique that increases the number of potential customers by giving them various benefits, such as fast service and links to visit related websites. Nowadays, many customers like to shop, play, and study online with the help of various websites. An organization should incorporate several essential features in its website to attract visitors.

The essential features of a website are as follows:

  • Navigation: Facilitates visitors to easily access useful information available on any part of the website. The website can incorporate a few additional links to directly navigate customer-specific information.

  • About Us Section: Describes core business, products, services, and history of the organization. It gives an idea to visitors about the usage of the website.

  • Fun, Games, and Prizes: Attract or distract visitors. Therefore, games and prizes should match the nature of the product.

Some of the Web tools that play an important role in Web-based marketing are as follows

  • Website: Refers to a set of interconnected Web pages. If the website of an organization has features like easy navigation and comprehensive information, it can attract a huge number of customers. The success of the Web-based marketing campaign depends on the design of the website. A website may display banner ads and cross-linking features.

  • Online Directory: Refers to a tool that functions as interactive yellow pages. An online directory helps customers who need specific products. The information uploaded on the online directory attracts customers to buy the product. The organization frequently visits online directories to upload and update information.

  • E-mail Advertising Campaigns: Refer to compiling e-mail addresses of potential customers and delivering information about upcoming sales discounts, locations, offers, and events of the organization.

  • Affiliate Program: Allows organizations to advertise their products and services on various marketing websites and charge a certain fee for every click by visitors on the advertisement. An affiliate program also charges a commission from the organization on the sale of the product.

The points that are required to be taken into account while online marketing are as follows:

  • With online marketing, customers have complete control of the website. This is a pivotal feature that needs to be taken care of. If the content is uninteresting to the customer, the customer will access the content and instead will shift to another website.

  • The content should be striking and must be able to flaunt the latest changes in new products quickly. A slight delay on this part will have severe outcomes.

  • The cost of obtaining the customers has gone down drastically which means the fall of new techniques, strategies, etc. must be developed and installed so as to recover the customers the competitor’s financial products will acquire the customer which would be a loss.

  • Technology advancement also plays a pivotal role in online marketing. The adaption of new technological devices by the marketer is very important.

  • The customers’ fidelity is necessary to be maintained at any cost which implies that the commitments should be strictly adhered to.

Negotiation Skills

After understanding the facets and challenges that are required in the marketing of financial services, the next stage that comes is the technique of developing negotiation skills.

These traits are very important due to the fact that when it comes to marketing of services, the person handling the marketing is required to have remarkable negotiation skills. In the absence of this important skill, the company will suffer by losing the client and thus will have severe outcomes.

This expertise assumes all the more importance because of the fact that severe online marketing as it creates hyper-competition.

Negotiation is a very important tool for selling financial services because investors evaluate a number of things before putting their hard-earned into financial services. In the case of financial services, investors evaluate factors such as the risks involved in the financial service, the expected returns from the services, the timeframe of returns, the reputation of the service provider, etc. In addition, financial services are high-involvement purchases.

The following are the important aspects of negotiation in the case of financial services:

  • The negotiator should be able to convince the customer that a particular service fulfills the needs of the customer.

  • The negotiator should listen to the concerns of the customer and he/she should be able to address the concerns.

  • The negotiator should offer the services to customers according to their requirements.

Challenges in Marketing Financial Services

After comprehending the different aspects of financial services, let us now dwell on the ordeals faced in the marketing of financial services. The challenges which are faced by the marketers are enlisted below:

Dealing with the customers’ requirements

This is the biggest trial that marketers have to face on account of the fact that the customer himself does not know what he is looking at i.e. what are his targets and objectives. This makes marketing a very challenging task.

Availability of information

The information concerning customers is available to all competitors. This makes it all the more testing as every competitor wants to utilize this information and lead from the front.

Usage of analytics and measurements

This is another trial that the marketer has to bear with the data through the usage of data analytics and pattern generation.

Meeting the requirement of the regulations

This is another problem that marketers are required to meet. As the competition rises, the regulations become more rigorous and all of these are necessary to be complied with.

Cultures and Societies Aspect of Social Media

Understanding social media and marketing in social media so as to meet the requirement of different cultures and societies. This is the challenge that marketers are required to meet due to the breaking down of geographical hurdles and boundaries.

Article Reference
  • Ennew, C., Watkins, T. and Wright, M. (1995). Marketing Financial Services. Oxford, England: Butterworth-Heinemann.

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