Marketing financial services

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SECTION 1: Identify and review some of the strategies that the company uses to deal with the difficulties presented by the specific features of financial services marketing.

SECTION 2: What market segmentation approaches does the company use and how effective do you think these are?

SECTION 3: In what ways do the forces within the Macro OR the Micro marketing environment affect the company’s ability to market its products successfully?

SECTION 4: Select 2 components of the marketing mix and review the ways in which the company addresses these and incorporates them into its marketing approach.



Note: I will be using the Bank of Scotland for examples in each section.


The financial services sector is one of the most competitive markets in the UK. There are now many companies (providers) offering many similar products. This makes it difficult for the providers to distinguish their organisation and their products from the competition. If this is not done successfully then they will not attract and retain customers thus not generate profits.  

    This also makes the market confusing from a consumer point of view. This is a big challenge for the providers to overcome.

     Firstly what do we mean when we mention financial services?

“The meaning of the term financial services, as it is applied in the UK, is broadly understood to include banking, insurance, building societies, stockbroking and investment services”

(Anderton, 1995)

A market is a pool of potential customers sharing a particular need or want, and who may be willing to do business to satisfy that need or want. Each of these potential customers will be different so, can be divided into groups on the basis of their needs and wants, (market segmentation). This also makes the marketing process more manageable.


Marketing is very important, especially in financial services. Deregulation and technological developments (such as the telephone and Internet) have helped make entering the market easier. Subsequently there are many new entrants capitalising on this and intensifying competition. Marketing is an ongoing process that companies must do.

Marketing of financial services is slightly different to that of soft drinks products for example. The main differentiating features are:

  • Fiduciary Responsibly. This is an important feature of the financial service sector. Mckechnie (1992) regarded fiduciary Responsibility as being peculiar to financial service marketing.

“The implicit responsibility of financial service orgainisations for the management of their customer funds and the nature of the financial advice supplied to their customers”

(Mckechnie, 1992)

People expect to be able to trust financial service providers. They expect their funds to be safe and managed reliably. If providers do not provide this then they will not attract and retain customers. If they are successful at this then customers will remain with them and also tell friends about them, the importance of word-of-mouth. This is very important in today’s competitive market. Surveys show that the Bank of Scotland is enjoying high levels of customer satisfaction and has an increase of 14% on profits. This shows that they are attracting and retaining customers.

  Consumers believe that they will be able to rely on well known financial services organisaitons taking all the steps necessary to ensure that they recognize and meet their fiduciary responsibility. There are substantial regulations in place to ensure this. Although in light of recent press the issue of miss selling has been highlighted, especially in pensions and endowment policies. Because of this new regulations where brought in, the Financial Services and Markets Act 2000.

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    The Bank of Scotland groups marketing strategy is very important here, as is the role of people. The employees must have good product knowledge and customer service skills.

            Technology is increasing within the industry. Consumers’ can now purchase services over the Internet and telephone and some believe that the reliability and consistancy of information provided is preferable. Bank of Scotland offers telephone, Internet, branch, and post banking. .

  • Two-Way Information Flows. This emphasis the amount of contact between the customer and the provider. This point also acknowledges that with such contact ...

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