8.1 Managing the customer relationship Flashcards
Marketing mix definition
A tool used by marketing professionals to describe what a firm is offering
A provider adopting a customer-led approach needs to consider what?
- What do customers need to do?
- How can a product be designed that allows them to do it?
What does the Santander ‘123 Current Account’ do?
Gives customers cash back and interest
- E.g. 1%, 2%, or 3% cash back on different types of household bills that are paid by direct debt and 1%, 2%, or 3% interest on their current account balance depending on the amount held
Range of personal current accounts offered by HSBC and their features:
- The ‘Bank Account’ - a traditional current account with no add-ons/fee
- ‘HSBC Advance’ offers preferential rates of savings and loans, requires customers to pay in a minimum amount each month
- ‘HSBC Premier’ aimed at people on a higher income, offers wealth management and international services, charges a monthly fee
- The ‘Bank Account Pay Monthly’ helps with managing money, charges a monthly fee and requires a minimum pay in each month
Price charged for a financial services product depends on:
- Cost of providing
- Demand
- Competitors prices
- Image provider wishes to promote
What is the pricing of an insurance policy based on?
Risk
Why have banks and building societies been criticised for not paying interest on current accounts?
They are sourcing money without paying for it, however there is a return for customers as they can use services that accompany current account
What does ‘place’ or ‘channel’ refer to?
The means by which the products are delivered to the customers
Main way in which financial products are delivered:
- Face to face
- Online banking
- Mobile banking
- Telephone banking
What do peer-to-peer firms, such as Zopa, do?
Put potential borrowers in touch with potential savers without an intermediary
Why do online only accounts usually pay a slightly higher interest rate?
They are cheaper for the provider to supply
Factors that determine channels used by providers to promote:
- Cost
- Target market
- Effectiveness
- Competitors
What did NatWest promise in its 2010 ‘customer charter’?
That it would never close a branch if it was the last branch in a town but in 2013 they announced they were dropping the charter and closing 40 branches
Two reasons an individual provider advertises:
- Create awareness of the generic product
- Influence those who have decided to buy the generic product to choose a particular brand
Stages of successful advertising:
- Customer unaware
- Customer aware
- Customer understands
- Customer appreciates benefits
- Customer convinced to buy
- Customer buys
- Customer continues to buy
