MFS Topic 7 Advertising and Communication PDF

M School of Economics, A H A IZ Finance and Banking U DR M...

M School of Economics, A H A IZ Finance and Banking U DR M Universiti Utara Malaysia T A N O Marketing Financial Services Topic 7 Advertising and Communication A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 1  A M A IZ U H The D R MRoles of Advertising T A N O The financial services were against two basic problems in the beginning of the introduction of the banking services: i. most people could not really distinguish one financial service from another; ii. the various services available to the public were largely unknown quantities. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 2  A M A IZ U H Advertising D R M T A N O Evolution of Advertising Policies in Financial Services Initial Stage Focus on the bank's name and strength. Emphasis on security and trust. Second Stage Advertising geared towards new or important services. Efforts to differentiate by offering exclusive or unique services. Current Stage Shift towards humanizing the institution. Create customer confidence by addressing three key challenges: Intangible nature of financial services. Similarity of offerings across institution. Customer expectations of advice, security, and understanding. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 3  A M A IZ U H Principal D R M Mission of Advertising T A N O 1) Inform and Persuade Provide information while convincing customers of the value. 2) Alert Potential Users Highlight products/services that can help achieve customer objectives. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 4  A M A IZ U H M DR T A N O A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 5  A M A IZ U H Types D R M of Advertising in Financial Services T A N O Based on Objectives: Institutional Advertising Used for long-term name building (e.g., banks). Brand Advertising Focused on building brand recognition (e.g., insurance companies). Classified Advertising Provides information about special sales, services, or events. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 6  A M IZ Institutional advertising generates the long-term build-up of a Institutional MU HA financial organisation's name. This can be broken down into two aspects: Advertising O T A D R promotion of the firm's image as a whole; N promotion of the products to be offered by the financial services with major emphasis to be placed on the specific firm's name organisation. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 7  A M A IZ U H DBrand R M Advertising T A N O Brand advertising is advertising of services. It aims for recognition of the bank's name but it also advertises the bank's different services; the one reinforces the other. Brand advertising follows closely in the footsteps of institutional advertising. Having attracted the attention of the customer, or at least having created an awareness, it is then necessary to hold the customer's interest by offering something that will appeal and be of benefit to him or her. These individual campaigns must be compatible in tone and presentation with the image the bank has created, so that they reinforce one another. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 8  A M A IZ U H Key D R MConsideration T A N O Advertising Strategy should be based on: Organizational objectives. Customer needs identified through market research. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 9  A M A IZ U H Consideration D R M for Advertising Choice T A N O 1.Budget Relate communication costs to organizational benefits. Ensure messages stimulate action within budget constraints. 2.Target Audience Identify specific segments (e.g., women). Understand motivations, characteristics, and financial authority. Ensure the advertisement resonates with the target audience. 3.Message Tailor content to elicit the desired response. Utilize rational appeals that address the audience's self-interest and highlight functional benefits of products/services. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 10  A M IZ Advertising H A MU Channels A DR for T NOFinancial Firms Types of Advertising 1.Above-the-Line Advertising Utilizes mass communication channels. 2.Below-the-Line Advertising Not discussed in detail, but typically involves targeted, direct marketing efforts. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 11  A M IZ U H A Above-the-Line M DR Advertising T A N O Channels Includes television, radio, newspapers, posters, magazines, and cinema. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 12  A M A IZ U H Television D R M Advertising T A N O 1.Advantages Combines sound, picture, color, and movement for engaging presentations. Effective in stimulating quick responses and raising awareness of financial services. 2.Disadvantages Cost - High expenses make frequent campaigns difficult for many firms. Message Length - Short format (e.g., 30 seconds) limits complexity in messaging, especially for topics like insurance. Direct Response Challenges - Difficult to ensure that responses lead to the advertiser's brand rather than competitors. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 13  A M A IZ U H Radio D R M and Cinema T A N O Radio and Cinema Radio is as unselective as television in audience reach. Cinema viewership is declining. Best for financial organizations with geographically limited areas to use: Posters Local radio Local press for cost-effectiveness. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 14  A M A IZ U H M DR T A O Posters N Delivers repeated messages to the same audience, which aids in reinforcement. Requires concise messaging due to size constraints. Poster sites' atmosphere is influenced by their physical location (e.g., airports, business districts). A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 15  A M A IZ U H M DR T A O Newspapers N More selective in audience, particularly in financial pages. Editorial tone of each newspaper influences reader attitudes. Disadvantages: Often limited to black and white, reducing visual impact. Difficult to stand out among competitors. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 16  A M A IZ H M U Below the line advertising DR O T A in Financial Services N Definition Comprises leaflets, pamphlets, explanatory guides, and manuals. Supports selling activities for specific services. Role and Effectiveness Difficult to distinguish from general promotion. Assumes customers will engage with materials upon visiting premises. Serves as useful information tools and reminders at the point of sale, backing personal selling. Advantages Cost-effective and easy to produce. Limitations Must be used discreetly; does not attract new customers. Relies heavily on personal selling for effectiveness. Channel Selection Depends on marketing strategy, target audience, and budget. Importance of well-planned and coordinated advertising to enhance value. Challenges External factors (e.g., government policy changes) can disrupt planned advertising campaigns. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 17  A M IZ PromotionsH A in MU Financial A DR T NOServices 1.Definition of Promotions Persuasive information targeting specific markets. Integrated with the marketing mix to convey the organization’s services. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 18  A M A IZ H M U Marketing Communication DR O T A Mix Elements N 2.Marketing Communications Mix Elements Advertising: Paid, non-personal promotion (e.g., TV ads for banks). Personal Selling: Direct verbal presentation (e.g., branch managers in banks). Publicity: Unpaid demand stimulation through news (e.g., newspaper reports on insurance firms). Sales Promotions: Short-term incentives to boost service usage (e.g., book tokens, debit card discount). A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 19  A M A IZ U H M DR T A N O 3.Sales Promotions Characteristics 'Bargain' Chance: Attention-grabbing offers to overcome buyer inertia but may lead to low brand loyalty. Product Demeaning: Overuse may create doubts about service reliability or pricing. 4.Effectiveness Sales promotions are most effective when used alongside advertising. Financial firms must assess relevance, usefulness, and cost-effectiveness. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 20  A M IZ M U H A Objectives of DR O T A Promotions N 5.Primary Objectives of Promotions Attract new customers. Increase deposits and savings market share. Lower customer acquisition costs while avoiding direct price competition. Increase market share in selected segments. 6.Secondary Objectives of Promotions Target specific market segments (e.g., working women). Modify the company’s image. Secure deposits for loan or mortgage operations. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 21  Steps Hfor A Effective Promotion in Financial IZ A M U Services DR M T A N O 1 2 3 4 5 Customer Customer Staff Morale Corporate Public Image and Acquisition Retention Focus on Stability Awareness Essential for Value existing employees, not Promote trust Engage with business customers to just customers. and reliability to broader survival. maximize Staff impact stakeholders. audiences, New customers profitability. customer Demonstrates beyond direct can be from: Costs of satisfaction and fiduciary contacts. New life stages acquiring new retention. responsibility Maintain a suitable for the customers Internal and positive public product. exceed those of marketing confidence. image and good Competitors retention. boosts staff Positive public (switching Promotion morale and promotion relations. customers). fosters loyalty company signals Promote Promotion and encourages image. credibility to socially builds cross-selling. customers and responsible awareness and investors. activities to highlights counter competitive negative advantages. perceptions. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 22  A M IZ M U H A Personal Selling in DR O T A Financial Services N 1.Overview Personal selling involves direct oral presentations to prospective buyers with the goal of making sales. Traditionally faced reluctance among staff but now incentivized through profit-sharing schemes in banks, building societies, and insurance companies. 2.Purpose and Importance Creates product/service awareness. Develops product/service preference. Negotiates prices and terms (e.g., some bank charges are negotiable). Closes sales and provides post-sale reassurance. Crucial for long-term customer relationships, particularly in financial services. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 23  A M A IZ U H Advantages D R M of Personal Selling T A N O 3.Advantages of Personal Selling Personal Confrontation: Enables real-time interaction, trust- building, and a better understanding of buyer needs. Cultivation of Relationships: Allows for deeper customer relationships beyond transactional selling. Increased Response: Personal interaction obligates customers to pay attention and engage, unlike impersonal advertising. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 24  A M A IZ U H Staff D R Training M T A N on Promotions O 4.Training and Expertise Sales staff must be well-trained in selling techniques and knowledgeable about all services offered. Staff need to understand individual customer needs and refer them to appropriate services when necessary. Must uphold the company's image of trust, responsibility, and friendliness. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 25  A M A IZ U H Long-Term D R M Relationships T A N O 5.Building Long-Term Relationships Banking and financial services require building lasting relationships, as customers rarely switch banks once they've made a choice. Personal selling helps enhance the bank’s reputation by ensuring customer satisfaction and personalized service. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 26  A M IZ The Role Hof A MU Personal A DR Selling T NOin Banking 6.The Role of Personal Selling in Banking Personal selling in banking is vital as customer needs are complex and often require professional assistance. Attracts new customers and sells additional services to existing customers. Works alongside sales and promotional activities to finalize deals. Reassures existing customers and strengthens relationships. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 27  Attracting H A Young Customers in IZ Personal A M U Selling D R M T A N O 7.Attracting Young Customers Personal selling is effective in attracting young people by creating a less intimidating image. Educational leaflets, school visits, and setting aside special days for students help engage younger customers. Example: In Finland, banks dedicate one day per week for schoolchildren to interact with bank employees. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 28  Existing H A Customers Relationship IZ A M in Personal U Selling D R M T A N O 8.Maintaining Relationships with Existing Customers Personal selling fosters trust, reliability, and familiarity with existing customers. Helps build long-lasting relationships and ensures the offering of appropriate services tailored to customer needs. 9. Importance for Existing Customers Builds trust, reliability, friendliness, and familiarity. Creates long-term relationships with customers. Enables offering appropriate services based on customer needs. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 29  A M A IZ U H M DR T A N O 10. Requirements for Staff to Conduct Personal Selling Knowledge of all services (or the ability to refer customers to the right person). Understanding of customer problems. Ability to solve problems and persuade customers to accept solutions. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 30  A M A IZ U H Publicity D R M in Financial Services T A N O Publicity in Financial Services 1.Nature of Publicity Least controllable element of the communications mix. Media decide what is newsworthy, often leading to negative coverage (e.g., high profits or losses). 2.Objectives of Publicity Secures editorial space rather than paid space. Aims to assist in meeting sales goals and enhance public relations. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 31  A M IZ M U H A Publicity and Public DR O T A Relationships N 3.Advantages of Publicity Low budget compared to advertising. High credibility and ability to dramatize information. Can create memorable public awareness and stimulate demand. 4.Role of Public Relations (PR) Increasing importance in financial services. Growth of press officers and PR companies dedicated to generating publicity. 5.Risks and Requirements Requires constant effort to maintain high customer service standards. A single slip can lead to negative press coverage. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 32  Sponsorship H A in Financial IZ A M U Services D R M T A N O Sponsorship in Financial Services 1.Effectiveness Less effective than advertising for promoting specific products. Primarily used to build brand awareness and corporate image. 2.Hidden Costs Requires marketing of the sponsored event to gain attention. 3.Sponsorship Activities Financial firms sponsor various events (sports, arts, community projects). Examples include decentralized sponsorship programs by firms like Bank Islam’s Sadaqa House , allowing local spending in communities. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 33  M Contribution H A of Advertising and IZ A Communications U toDRFinancial M Services Marketing T A N O Contribution of Advertising and Communications to Financial Services Marketing The significant role that advertising and communications play in shaping effective marketing campaigns within the financial services sector consist of the following: Brand Awareness: Advertising increases visibility of financial services brands in a competitive market. Consistent messaging across various platforms helps establish brand identity. Target Audience Engagement: Tailored communications strategies allow for targeted outreach to specific demographics. Engaging content, such as informative articles and videos, fosters a connection with potential customers. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 34  A M IZ M U H A Advertising’s Role in DR O T A Financial Services N Trust and Credibility: Effective advertising builds trust through transparency and clear messaging. Testimonials and case studies in communications enhance credibility and reliability. Product Education: Advertising campaigns can educate consumers about complex financial products and services. Clear explanations and visual aids help demystify financial concepts for the audience. Customer Retention: Ongoing communications, such as newsletters and updates, keep existing customers informed and engaged. Personalized marketing efforts can enhance customer loyalty and retention. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 35  A M A IZ U H Advertising’s D R M Role in Financial Services T A N O Multi-Channel Approach: Utilizing various platforms (social media, email, print) ensures a broader reach and caters to different audience preferences. Integrated campaigns create a cohesive message that reinforces brand recognition. Performance Measurement: Advertising and communications strategies can be tracked and analyzed for effectiveness. Metrics such as engagement rates and conversion rates provide insights for future campaigns. Crisis Management: Effective communication strategies are essential during financial crises to maintain customer trust. Timely and transparent messaging can mitigate negative perceptions and reinforce brand reliability. A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 36  A M A IZ M U H Functions of Advertising DR O T A in Financial Services N 1.Innovation and Adaptation: The financial services industry is rapidly evolving; advertising and communications must adapt to new trends and technologies. Innovative campaigns can capture attention and differentiate brands in a crowded marketplace. 2.Limited Knowledge of Effectiveness Little is known about the success of individual advertising campaigns. Most resources focus on pretesting and launching, with minimal post-testing for effectiveness. 3.Challenges in Measuring Impact Difficulty in correlating advertising with actual purchases. Hard to determine if advertisements directly lead customers to purchase services. 4.Need for Advertising Essential for competing with other financial institutions. Success is influenced by knowledge of target segments and external factors (e.g., economy, competition). A241 BWBBK3053 MARKETING FINANCIAL SERVICES (2024 VERSION) 37