marketing in wealthmanagement
Content
Role of Marketing in Wealth Management.
Marketing can be defined as a total system of business activities to plan ,price, promote, and distribute need and want satisfying products ,services and ideas to target markets in order to achieve organisation objectives. Importantly , marketing involves an exchange of value . Value is the customer’s estimate of the product’s capacity to satisfy its needs. Organisations need to identify ways of creating more value in their products. Simply stated “Marketing means giving the customer what he needs “.With Globalisation and opening up of the Markets, competition has increased ,the consumer has a choice and he is also well informed. All these have made effective Marketing all the more important. Moreover with intense competition and rapidly changing markets retaining customers is as important as attracting them. Satisfied customers will tend to repeat purchase , thus increasing revenue for the business over time. Moreover satisfied customers are likely to refer friends and associates to the business.This is particularly important source of new customers in financial services. Relationship marketing. A major goal of marketing is to build long term relationship with customers. This process is referred to as relationship marketing as marketers aim to move their customers from prospects to advocates. Relationship Marketing.
Since the deregulation of the financial system ,financial services organisations have become increasingly marketing focussed.This has become necessary because of increased competition ,the entry of foreign competitiors, a wider variety of products available to consumers,increased customer sophistication and increased emphasis on profitability. Due to increase in affluence and customer sophistication Wealth Management is assuming importance. The Financial services industry faced with severe competition and shrinking margins has become more customer focussed and is targeting the niche group of HNI with unique products tailor made to suit their needs.This way with smaller market share the Financial institutions are doing profitable business. The HNI is mostly a Global citizen, is well informed , tech savvy , and is more concerned with time and convenience .As a marketing strategy FI’s especially the new generation Pvt banks havekept pace with technological developments and satisfied the needs of HNI’s FI’s have also gone in for product expansion to meet the needs of wealthy clients. The development of derivatives market by investment banks is a prime example in this category. for example Bankers Trust developed a range of new commodity derivatives to assist clients who had exposures to commodity prices to manage their risks. The financial services industry has been transformed by information technology and telecommunications.In the retail banking sector for ex. electronic banking through ATM’s and EFTPOS (Electronic funds transfer at point of sale)NETWORKS has changed the way people do their banking.Customers transcating electronically is more cost effective for banks which are encouraging ebanking rather than than the physical distributin channel. Click banking is replacing Brick and Mortar banking. Electronic banking is evolving as more customers embrace the INTERNET AND ONLINE BANKING SERVICES. Accordingly the financial service providers are also evolving. E-Trade in the stock broking business. Stock broking firms were known for their advice based on their inhouse research employing the best available equity analyst. But shifts in the external environment has changed customer needs.The informed customer did not need paid advice.Brokers offered low cost internet based share trading to meet the needs of this segment.
The use of information technology in the banking and financial services industries is an essential aspect of their daily operations.In the securities industry information technology is a major source of competitive advantage. Banks market Housing loans offering Floating rates option to take care of interest rate changes. To take care of customers having varying incomes during the year SBI has a flexi repayment scheme for housing loans. Desire for convenience. The combination of an increase in purchasing power and less time has led to substantial increase in consumers desire for convenience. The convenience of online banking for many people for example is likely to be a stronger factor than fear of technology. Easier access to information for example via internet has increased customers ability to make their own decisions about investments and other financial services. Today’s retail consumers are more aware and astute about financial information than previous generations. One of the most significant marketing trends over the past decade is the growth of direct marketing and the drop in importance of mass marketing . Rather than aiming to reach thousands of buyers with a single product and message , marketers are increasingly using new media tools such as email to reach customers on a one to one basis. The process of marketing involves many interrelated activities broadly called the marketing mix. Marketers should combine these activities in a way that best achieves their marketing objectives. the basic elements of a marketing mix or elements of marketing are: product promotion(communication) place (distribution) price.
The product (service) and how it performs is the most important and fundamental aspect of the marketing mix in satisfying customer needs ie does the product or service perform as the customer expects and meet their needs? The product planning process includes developing new products ,branding,changing existing products etc. Promotional communication .The promotional element of the marketing mix involves the various means that firms employ to communicate with customers.The role of communication is to inform about firms product/services.and might involve advertising,personal selling,sales promotion or a combination of these.The emphasis on different promotional methods varies with the type of customer the firm is seeking to attract. Price . Perceived value ie what it is worth , and the benefit that the product provides.Pricing in Financial services is complicated by the fact that the base cost is outside the control of the financial institution,and it is the margin above that base that is the core consideration. Place or Distribution. Distribution channels or intermediaries.A distribution channel involves the chain of organisations and/or individuals involved in bringing a product from the producer to the ultimate consumer and may be physical or virtual. Market Segmentation. It is the process of dividing a market into groups or segments of customers with similar needs.The market segments that are selected by an organisation for marketing its products are its target markets.The markets may be youth market,the retirement market or the small business market. The firm can design its marketing programs to meet the needs of these segments The benefits of market segmentation include: Assisting the organisation to identify their profitable market segment and develop their strategy to attract new profitable customers. Enabling the organisation to allocate its marketing resources more effectively.
increasing customer satisfaction because customers are receiving products tailored to their needs. Identifying market segments. Geographic segmentation.This is according to geographic distribution of population and culture. Demographic. Factors include consumers age,income, education,occupation gender ,religion and nationality. For products like financial services the demographic classification of lifestage or life cycle can be a useful way to segment potential market.Differences in purchasing behaviour between two people of the same age and gender can often be accounted by the fact that they are at different life cycle stages. Life stage classification include: Bachelor(young single 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 , DEPENDANT CHILDREN STILL AT HOME) empty nestI ( couple still earning,children at home) empty nest II(couple retired children at home) solitary survivor( still earning) solitary survivor (retired) Individuals in different life stages will often have quite different financial position and buying behaviour. Geo demographic Combination of geographic and demographic information. PSYCHOGRAPHICS. FACTORS INCLUDE LIFESTYLE,PERSONALITY AND SOCIAL CLASSIFICATIONS. Service is a critical differentiation point for financial institutions today. the quantity and quality of customer service is becoming more important because it is often difficult to differentiate service businesses and consumers are more demanding. Flexibility and conveniencemany consumers will pay extra for convenience in order to save time for other pursuits. A fund management’s performance is measured interalia by the way it communicates with and services its customers.
Communication Above the line communication includes all mass activity that can be seen and audited.This includes TV advertising , media articles,mass promotions,internet advertising and magazine advertising. Below the line advertising include all localised or direct activity that is not so readily seen and usually not audited.This includes direct mail , telemarketing,local sponsorships seminars events,hoardings,and bus train side advertising. Example, A fund manager advertisement could say, “Visit our website for details of our special offer”The brochures would include website address and the sales person visiting the investment advisor would explain the benefits of the website to encourage the advisors client to use it. Advertisements. The fundamental purpose of advertising is to sell something. Objectives of advertising introduce a new product eg the launch of RAMS home loans. attract a new market segment e.g. American Express Platinum card. Present a special offer,e.g.debenture interest rates available for a limited period Telemarketing. is being increasingly used in place of personal selling.Customer service staff might Cross sell additional services to new or existing customers.eg A home insurance as an addition to a home loan. Financial service representatives need to interpret what the customer wants and provide the appropriate services.If the customers need cannot be met with existing products it is the responsibility of the representative to feed this information back to the company so that new products and services can be developed. Technology.advances like laptops and mobiles have greatly influenced the efficiency of the sales process. Data base marketing. involves building , maintaining customer data bases for the purpose of contacting and transcating Data bases contain customer profiles including the products and services the customer has used,product preferences,risk profiles for investment products,demographic and other relevant information..
With this information a financial service organisation can achieve target marketing precision more effectively. Customer Relationship management systems(CRM).Information technology plays an increasing role in the provision of customer service where there is demand for fast responses and convenience. Customer Relationship Management (CRM) is a package of information systems , which encompasses areas such as call centers and data base marketing.A fully integrated CRM system would, for example give customers direct control over their account and service details via the internet and allow call center personnel to instantly access those details when the customer calls with an enquiry. CRM Systems also allow companies to target specific audiences of customers by interest and send them personally tailored messages . However implementing CRM Systems is not simple as it requires the restructuring of every area of a companys operations around the customer-financial distribution, sales,marketing and customer servicedepartments. the aim is to have a complete integrated view of the customers, but the rebuilding process can require a cultural change in the organisation.Newer organisations without the legacy of old IT Systems can be better placed to take full advantage of CRM.Used comprehensively CRM provides an extremely effective way for organisations to market products, provide quality services and achieve highly satisfied customers.
Marketing can be defined as a total system of business activities to plan ,price, promote, and distribute need and want satisfying products ,services and ideas to target markets in order to achieve organisation objectives. Importantly , marketing involves an exchange of value . Value is the customer’s estimate of the product’s capacity to satisfy its needs. Organisations need to identify ways of creating more value in their products. Simply stated “Marketing means giving the customer what he needs “.With Globalisation and opening up of the Markets, competition has increased ,the consumer has a choice and he is also well informed. All these have made effective Marketing all the more important. Moreover with intense competition and rapidly changing markets retaining customers is as important as attracting them. Satisfied customers will tend to repeat purchase , thus increasing revenue for the business over time. Moreover satisfied customers are likely to refer friends and associates to the business.This is particularly important source of new customers in financial services. Relationship marketing. A major goal of marketing is to build long term relationship with customers. This process is referred to as relationship marketing as marketers aim to move their customers from prospects to advocates. Relationship Marketing.
Since the deregulation of the financial system ,financial services organisations have become increasingly marketing focussed.This has become necessary because of increased competition ,the entry of foreign competitiors, a wider variety of products available to consumers,increased customer sophistication and increased emphasis on profitability. Due to increase in affluence and customer sophistication Wealth Management is assuming importance. The Financial services industry faced with severe competition and shrinking margins has become more customer focussed and is targeting the niche group of HNI with unique products tailor made to suit their needs.This way with smaller market share the Financial institutions are doing profitable business. The HNI is mostly a Global citizen, is well informed , tech savvy , and is more concerned with time and convenience .As a marketing strategy FI’s especially the new generation Pvt banks havekept pace with technological developments and satisfied the needs of HNI’s FI’s have also gone in for product expansion to meet the needs of wealthy clients. The development of derivatives market by investment banks is a prime example in this category. for example Bankers Trust developed a range of new commodity derivatives to assist clients who had exposures to commodity prices to manage their risks. The financial services industry has been transformed by information technology and telecommunications.In the retail banking sector for ex. electronic banking through ATM’s and EFTPOS (Electronic funds transfer at point of sale)NETWORKS has changed the way people do their banking.Customers transcating electronically is more cost effective for banks which are encouraging ebanking rather than than the physical distributin channel. Click banking is replacing Brick and Mortar banking. Electronic banking is evolving as more customers embrace the INTERNET AND ONLINE BANKING SERVICES. Accordingly the financial service providers are also evolving. E-Trade in the stock broking business. Stock broking firms were known for their advice based on their inhouse research employing the best available equity analyst. But shifts in the external environment has changed customer needs.The informed customer did not need paid advice.Brokers offered low cost internet based share trading to meet the needs of this segment.
The use of information technology in the banking and financial services industries is an essential aspect of their daily operations.In the securities industry information technology is a major source of competitive advantage. Banks market Housing loans offering Floating rates option to take care of interest rate changes. To take care of customers having varying incomes during the year SBI has a flexi repayment scheme for housing loans. Desire for convenience. The combination of an increase in purchasing power and less time has led to substantial increase in consumers desire for convenience. The convenience of online banking for many people for example is likely to be a stronger factor than fear of technology. Easier access to information for example via internet has increased customers ability to make their own decisions about investments and other financial services. Today’s retail consumers are more aware and astute about financial information than previous generations. One of the most significant marketing trends over the past decade is the growth of direct marketing and the drop in importance of mass marketing . Rather than aiming to reach thousands of buyers with a single product and message , marketers are increasingly using new media tools such as email to reach customers on a one to one basis. The process of marketing involves many interrelated activities broadly called the marketing mix. Marketers should combine these activities in a way that best achieves their marketing objectives. the basic elements of a marketing mix or elements of marketing are: product promotion(communication) place (distribution) price.
The product (service) and how it performs is the most important and fundamental aspect of the marketing mix in satisfying customer needs ie does the product or service perform as the customer expects and meet their needs? The product planning process includes developing new products ,branding,changing existing products etc. Promotional communication .The promotional element of the marketing mix involves the various means that firms employ to communicate with customers.The role of communication is to inform about firms product/services.and might involve advertising,personal selling,sales promotion or a combination of these.The emphasis on different promotional methods varies with the type of customer the firm is seeking to attract. Price . Perceived value ie what it is worth , and the benefit that the product provides.Pricing in Financial services is complicated by the fact that the base cost is outside the control of the financial institution,and it is the margin above that base that is the core consideration. Place or Distribution. Distribution channels or intermediaries.A distribution channel involves the chain of organisations and/or individuals involved in bringing a product from the producer to the ultimate consumer and may be physical or virtual. Market Segmentation. It is the process of dividing a market into groups or segments of customers with similar needs.The market segments that are selected by an organisation for marketing its products are its target markets.The markets may be youth market,the retirement market or the small business market. The firm can design its marketing programs to meet the needs of these segments The benefits of market segmentation include: Assisting the organisation to identify their profitable market segment and develop their strategy to attract new profitable customers. Enabling the organisation to allocate its marketing resources more effectively.
increasing customer satisfaction because customers are receiving products tailored to their needs. Identifying market segments. Geographic segmentation.This is according to geographic distribution of population and culture. Demographic. Factors include consumers age,income, education,occupation gender ,religion and nationality. For products like financial services the demographic classification of lifestage or life cycle can be a useful way to segment potential market.Differences in purchasing behaviour between two people of the same age and gender can often be accounted by the fact that they are at different life cycle stages. Life stage classification include: Bachelor(young single 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 , DEPENDANT CHILDREN STILL AT HOME) empty nestI ( couple still earning,children at home) empty nest II(couple retired children at home) solitary survivor( still earning) solitary survivor (retired) Individuals in different life stages will often have quite different financial position and buying behaviour. Geo demographic Combination of geographic and demographic information. PSYCHOGRAPHICS. FACTORS INCLUDE LIFESTYLE,PERSONALITY AND SOCIAL CLASSIFICATIONS. Service is a critical differentiation point for financial institutions today. the quantity and quality of customer service is becoming more important because it is often difficult to differentiate service businesses and consumers are more demanding. Flexibility and conveniencemany consumers will pay extra for convenience in order to save time for other pursuits. A fund management’s performance is measured interalia by the way it communicates with and services its customers.
Communication Above the line communication includes all mass activity that can be seen and audited.This includes TV advertising , media articles,mass promotions,internet advertising and magazine advertising. Below the line advertising include all localised or direct activity that is not so readily seen and usually not audited.This includes direct mail , telemarketing,local sponsorships seminars events,hoardings,and bus train side advertising. Example, A fund manager advertisement could say, “Visit our website for details of our special offer”The brochures would include website address and the sales person visiting the investment advisor would explain the benefits of the website to encourage the advisors client to use it. Advertisements. The fundamental purpose of advertising is to sell something. Objectives of advertising introduce a new product eg the launch of RAMS home loans. attract a new market segment e.g. American Express Platinum card. Present a special offer,e.g.debenture interest rates available for a limited period Telemarketing. is being increasingly used in place of personal selling.Customer service staff might Cross sell additional services to new or existing customers.eg A home insurance as an addition to a home loan. Financial service representatives need to interpret what the customer wants and provide the appropriate services.If the customers need cannot be met with existing products it is the responsibility of the representative to feed this information back to the company so that new products and services can be developed. Technology.advances like laptops and mobiles have greatly influenced the efficiency of the sales process. Data base marketing. involves building , maintaining customer data bases for the purpose of contacting and transcating Data bases contain customer profiles including the products and services the customer has used,product preferences,risk profiles for investment products,demographic and other relevant information..
With this information a financial service organisation can achieve target marketing precision more effectively. Customer Relationship management systems(CRM).Information technology plays an increasing role in the provision of customer service where there is demand for fast responses and convenience. Customer Relationship Management (CRM) is a package of information systems , which encompasses areas such as call centers and data base marketing.A fully integrated CRM system would, for example give customers direct control over their account and service details via the internet and allow call center personnel to instantly access those details when the customer calls with an enquiry. CRM Systems also allow companies to target specific audiences of customers by interest and send them personally tailored messages . However implementing CRM Systems is not simple as it requires the restructuring of every area of a companys operations around the customer-financial distribution, sales,marketing and customer servicedepartments. the aim is to have a complete integrated view of the customers, but the rebuilding process can require a cultural change in the organisation.Newer organisations without the legacy of old IT Systems can be better placed to take full advantage of CRM.Used comprehensively CRM provides an extremely effective way for organisations to market products, provide quality services and achieve highly satisfied customers.
