Topic 7 - Marketing Materials And Their Effectiveness Flashcards
1
Q
EFFECTIVENESS
What is the basic definition of ‘effectiveness’ in a marketing campaign?
A
refers to the ability of a campaign to achieve its objectives, such as selling more products. However, it also includes factors like customer quality, long-term engagement, and brand reputation.
2
Q
In the context of a building society, what wider meaning does effectiveness have beyond increasing account numbers?
A
A: Effectiveness also refers to the quality of accounts, such as larger deposits and long-term savings, which are more beneficial for lending and financial planning
3
Q
Why do building societies prefer larger deposits left for longer periods?
A
provide more funds for lending and reduce the need to repay customers quickly. This supports long-term lending strategies and financial stability
4
Q
How should marketing materials be designed for a new savings account?
A
A: They should target customers likely to deposit large amounts for longer periods and emphasize benefits like higher interest rates for longer-term deposits.
5
Q
How can a marketing campaign for one product benefit other products?
A
A: It increases brand awareness, making customers more likely to consider other services like mortgages or insurance policies offered by the same provider
6
Q
Why is brand awareness important in marketing campaigns?
A
A: Brand awareness makes the provider’s name familiar to potential customers, helping the brand become associated with reliability, savings, and good service over time
7
Q
How does long-term marketing effectiveness differ from short-term results?
A
A: Long-term effectiveness includes brand recognition, reputation, and customer loyalty, while short-term focuses mainly on immediate increases in customer numbers or product uptake.
8
Q
How did the 2007–08 financial crisis affect the reputation of the financial sector?
A
A: The crisis and scandals like the mis-selling of PPI damaged public trust, making people believe banks prioritize profit over customer service.
9
Q
What must financial providers do to rebuild trust post-financial crisis?
A
A: They must prove they put customers first, using good customer service and effective, targeted marketing to rebuild their reputation.
10
Q
How can newer banks like Virgin Money differentiate themselves from established banks?
A
A: By emphasizing ethical policies and customer-focused values in their marketing to show they are more trustworthy and different from traditional banks.
11
Q
TARGETING CONSUMER GROUPS
What is the first stage of the marketing process?
A
A: Targeting particular groups of customers to persuade existing ones to buy more or differently, and to attract new customers
12
Q
What is market segmentation?
A
is the practice of dividing a market into groups of people with similar characteristics and tailoring the product’s features, price, and delivery to their preferences
13
Q
What are common characteristics used to define market segments?
A
A: Age, gender, family status, income, occupation, leisure activities, and lifestyle traits that indicate financial needs.
14
Q
What is a mass market approach?
A
A: Targeting a very broad group of customers with different demographics. Example: marketing personal current accounts to a wide population
15
Q
What is an example of a narrowly defined target group?
A
A: High-income individuals targeted with a savings account that requires a high minimum deposit
16
Q
What is the benefit of targeting a specific group?
A
A: Maximizes sales and ensures the best return on marketing budget by focusing on those most likely to be interested
17
Q
Give examples of distinct groups for financial product marketing.
A
A: University students, retired people, and families with young children
18
Q
Why might a bank avoid marketing mobile banking to elderly people?
A
A: It may assume they are less likely or able to use mobile technology
19
Q
How could a bank encourage elderly people to use mobile banking?
A
A: By including an elderly person in advertisements to show it is accessible for them.
20
Q
What is the most useful type of categorisation for financial services providers?
A
A: Defining people by their product-buying behaviour, e.g., ‘homeowners’ or ‘motorists’
21
Q
Why is product-buying behaviour a powerful categorisation method?
A
A: It combines with other traits (age, location) to help predict financial product needs and effective persuasion strategies
22
Q
MARKETING MATERIALS AND INFO
Having identified and describes the appropriate market segments towards which a particular product is to be targeted, a provider will then prepare marketing materials. The materials produced must:
A
- be carefully designed to appeal to the target group
- be phrased in language to which the target group can relate
- refer to a lifestyle that they recognise
- reflect their values
23
Q
THE SMALL PRINT AND REGULATORY REQUIREMENTS
What are the FCA’s rules for financial promotions?
A
- Promotions must not hide important information.
- Risks must be clearly explained (applies to all media, including online).
- Warnings should be relevant to the audience but not make the ad unclear.
24
Q
What standards must financial ads meet under the advertising standards authority (ASA)?
A
Ads must be:
- Legal, decent, honest, and truthful.
- Risk warnings must be prominent, early in the ad, and in large font.
25
How does the Plain English Campaign influence financial marketing?
- Awards a **Crystal Mark** to firms using **simple, clear language** in customer materials.
- Ensures literature is **understandable** for all readers
26
Why is small print used, and what issues can it cause?
- **Purpose:** Discloses **legal terms, conditions, and limitations** not emphasized in headlines.
- **Issues:** May hide **unattractive terms** (e.g., minimum deposits, limited access to funds).
- **Example:** A high-interest savings account might require £2,000+ and a 5-year lock-in (details in small print).
27
What legal obligations do providers have regarding marketing?
- Must **balance benefits with drawbacks/risks** (e.g., penalties, limitations).
- Small print must be **reproduced legibly** in actual contract documents (e.g., policy terms).
- **Consequence of non-compliance:** Bad reputation, complaints, or **mis-selling allegations**.
28
How might a savings account ad be misleading?
- **Key Lesson:** Always read small print to **avoid surprises**.
29
Why should providers avoid confusing marketing?
- **Customer backlash:** Complaints about **lack of transparency**.
- **Reputation damage:** Loss of trust.
- **Legal risks:** Potential **mis-selling claims**.
30
DIFFERENT TYPES OF MARKETING
What are the main forms marketing activity can take?
A: Marketing activity can take several different forms, such as printed media, the internet, or a combination of both.
31
What types of content can advertising activity include?
A: Advertising can include text (e.g., in printed media or online), film, and photographs. It often combines both forms.
32
What can advertising be used to promote?
both the provider itself and the specific products it wishes to advertise
33
How do providers promote their name or products besides advertising?
A: Providers often sponsor sporting or entertainment events to promote their name or branded products
34
Give an example of a company that uses sponsorship as a marketing method.
A: Barclays Bank sponsors performing arts venues like Sadler’s Wells and the Barclays Center in New York City
35
What is Barclays Front Row, and how is it related to marketing?
is a marketing initiative offering £10 front-row seats. It’s operated in partnership with the Donmar Warehouse theatre in London’s West End, promoting Barclays through event sponsorship
36
Why is sponsoring events an effective marketing strategy?
A: It increases brand visibility and associates the brand with popular or prestigious events, enhancing public perception
37
Name the different types of marketing
Text- based materials
Films and photographs
38
- Text based materials
What is the main purpose of text-based marketing materials?
A: To convey information and details about a product using the written word, which can be communicated in various ways to the target audience
39
How are leaflets used in marketing and what is their limitation?
A: Leaflets are placed in bank branches, each describing a product or service. Customers are free to choose which to take, but may ignore unfamiliar ones, making it harder to introduce new products. Also, they mostly reach existing customers, not the wider market
40
What are mailshots and give an example of when they might be used?
are promotional materials sent to potential customers identified via databases. For example, a new dog owner might get mail about pet insurance
41
What are the limitations of mailshots?
A: Only a small percentage lead to sales, requiring large-scale distribution. They’re less relevant today due to digital marketing trends and are criticized from an environmental perspective.
42
Where can text-based adverts appear online and what is a key limitation?
A: On a provider’s website or in a customer’s online account. The limitation is that it only reaches people already interested or visiting the site—mainly existing customers.
43
How can providers increase exposure using comparison websites?
A: By ensuring their product details appear in comparison lists or consumer product searches, increasing the chance of attracting new customers
44
Why are mobile pop-ups and text messages effective for marketing?
A: They’re increasingly popular and suitable for younger age groups who use mobile devices frequently.
45
- film and photographs
Why are films and photographs powerful marketing tools?
A: They directly influence consumer behavior and leave a strong impression. Films are used on TV, in cinemas, and online, while photos can be posters and billboards
46
What role do commercial films play in marketing?
A: They promote the provider’s name and must be shown repeatedly to stay memorable. In a competitive market, constant reminders are needed to keep consumers engaged
47
What features make an advertising film memorable?
A: Music, animated characters, celebrities, a consistent colour scheme, and logos help embed the brand in consumers’ minds
48
How did Halifax use film in its advertising?
A: Halifax ran ads showing how it helped different customers, like teachers, using a consistent theme and soundtracks. In 2017, they used cartoon characters like Top Cat and The Flintstones
49
Why is timing important in film advertising?
A: Because airing time and season influence effectiveness. E.g., new savings products air during peak times; holiday insurance ads run after Christmas when people plan holidays
50
DIFFERENT ADVERTISING METHODS
- the need for advertising
Why is advertising important for banks and other financial service providers?
A: Advertising is crucial due to the competitive nature of the banking sector. It helps banks differentiate themselves in an oligopoly where price competition is limited. Advertising also boosts brand awareness and attracts customers
51
What is an oligopoly and how does it relate to UK retail banking?
A: An oligopoly is a market structure with few dominant firms. In UK retail banking, four main ‘big banks’ dominate. Due to this, firms avoid price wars and instead compete through advertising and product quality
52
Why don’t banks in an oligopoly often change their prices?
A: If one bank changes its prices, others follow to retain competitive advantage, leading to no real gain. Therefore, it’s better for all banks to charge similar prices, especially since interest rates are influenced by the Bank of England’s rate
53
What happens if a bank cuts back on its advertising?
A: It risks losing sales and market share as rivals continue advertising, maintaining their brand presence and attracting more customers
54
What are the main advertising media used by financial providers?
A:
• Sponsorship
• Newspapers and magazines
• Television and radio
• The Internet (including websites, emails, banner ads, pop-ups, and sponsored links)
• Cinema adverts
• Billboards
• Leaflets and mailshots
55
How did banks traditionally market themselves?
A: By operating branches on high streets. The physical presence acted as a form of passive marketing, increasing visibility and customer interest
56
What trend has emerged in UK banking over the last decade?
A: Banks are closing physical branches and shifting to online and mobile banking, using digital marketing methods such as texts, websites, and app pop-ups
57
Why are banks moving away from high street branches?
A: To reduce costs and meet customer demand for digital services. However, this reduces their physical brand presence, making digital marketing even more vital
58
How many branches did Barclays close between January 2019 and December 2022?
A: 453 branches
59
List the number of branches closed by major UK banks between Jan 2019 and Dec 2022.
A:
• Barclays: 453
• TSB: 330
• Santander: 304
• HSBC: 120
60
- choosing a medium and a message
What is the significance of choosing the right medium and message in advertising?
A:
Choosing the right medium and message is crucial because:
• It ensures the message is repeated and reinforced effectively.
• Large providers often use a combination of media formats to enhance impact.
• The aim is to reach different audiences across platforms (e.g., TV + sponsorship + printed mailshots).
• A well-chosen medium supports campaign goals like brand visibility, engagement, and conversion
61
- cost
Cost is a primary factor in selecting advertising media:
• TV advertising is expensive, especially during peak times.
• Local radio and billboards are cheaper alternatives.
• The cost must be weighed against the audience size reached.
• TV = mass audience, wide market segments.
• Local radio = limited audience
62
How does cost influence the type of advertising chosen by different financial institutions?
A:
• Large banks are more likely to afford prime-time TV ads due to bigger budgets and the need to reach a mass audience.
• Smaller providers (e.g., credit unions) typically choose local radio stations or newspapers to control costs and target more specific markets.
• The reach vs. cost trade-off is central to strategic advertising choices
63
Under the heading of “cost,” what two main factors must be considered regarding a marketing provider?
A: The size of the provider and the amount of resources it can devote to its marketing activities
64
What advantages does a large multinational banking group have in terms of marketing?
A:
• Has a large advertising budget.
• Can buy prime TV time and spaces in the national press.
• Can spend on internet space.
• Can afford expensive advertising agencies.
• Able to produce high-quality films and publicity photos.
• Targets a national market with multiple segments
65
How does a small local building society typically handle marketing?
A:
• Has limited resources.
• Targets only a local audience.
• May use only local press and radio.
• Might create local radio adverts in-house.
• May hire a local photographer for poster campaigns
66
How does the marketing strategy of a credit union differ from that of a large corporation?
A:
• Membership is limited to specific geographic or occupational groups.
• Advertises only within that locality or job context.
• Example: A police credit union markets only to police stations
67
Why might a multinational company use expensive advertising agencies?
A: To produce high-quality films and publicity photographs, aiming to reach many different market segments on a national scale.
68
- targetability
What is the definition of targetability in advertising?
A: Targetability refers to the extent to which an advertisement can be tailored to reach a specific group of people. It involves selecting a suitable medium that effectively delivers the advertising message to the intended audience
69
How is the choice of medium linked to targetability?
A: The medium chosen affects how well the message reaches the targeted audience. Different groups respond better to different media, so the effectiveness of targeting depends on matching the medium to the audience
70
How might an insurance company use targetability for a mailshot campaign?
A: The insurance company would target individuals it believes are more likely to purchase its products by accessing databases or using segmentation services to identify people with suitable market profiles
71
What kind of data might be used to improve targetability in advertising?
A: Businesses may use databases listing details of people with specific market profiles or behavioural segmentation lists provided by specialized firms
72
How might an insurance company promote a new type of motor insurance using targetability?
A: It would target individuals who own a car and already have insurance with a different company by using data-driven methods to identify and reach this audience
73
What is the importance of choosing a suitable medium when targeting a market segment?
A: The medium must match the preferences and habits of the target market. An inappropriate medium can result in the message not reaching or not resonating with the intended audience.
74
What medium is suitable for promoting annuities to newly retired people and why?
A: A postal mailshot is more suitable because newly retired people are more likely to engage with printed communication
75
What medium is more appropriate for promoting new mobile banking services to younger audiences?
A: Text messages are more appropriate, as younger market segments are more likely to respond to mobile communications
76
- objective
What is meant by the “objective” of a provider in advertising?
A: It refers to what the provider aims to achieve—such as making sales, generating profit, or promoting a certain image—which influences the choice of advertising medium
77
What objectives does a large bank typically have?
A: A large bank aims to make as many sales as possible, maximise profit, and compete with similar providers by projecting an attractive image.
78
How do large banks use advertising to achieve their objectives?
A: They use catchy slogans, memorable tunes, or amusing scenarios in commercials to shape their image and attract customers
79
How might a large building society’s objective differ from a bank’s?
A: It may highlight its mutuality—its aim to benefit savers and borrowers rather than to make a profit—by acting in the interest of its customers
80
Give an example of a building society slogan that reflects its objective.
A: Nationwide’s slogan “On your side” reflects its mutual purpose and customer-first approach
81
How would a small friendly society likely approach advertising differently?
A: With a smaller budget, it would use simple, factual marketing that clearly presents its products and explains how people can access them
82
- economic climate
How does the economic climate affect advertising decisions?
A: It influences what products are promoted and how providers choose to advertise, based on people’s borrowing or saving behaviour during different economic periods.
83
What was the advertising focus during the pre-crisis years?
A: Banks heavily promoted lending products, aiming to appear more willing than competitors to offer credit, especially at lower interest rates
84
What shift occurred as people became more overindebted before the crisis?
A: Credit companies (not major banks) began promoting consolidation loans secured on home equity to help borrowers manage debt.
85
How did advertising change after the financial crisis?
A: As credit became harder to get, banks shifted focus to savings products, encouraging customers to save more and reduce debt—supporting the trend toward deleveraging
86
ETHICS, SUSTAINABILITY, CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL ISSUES IN MARKETING LITERATURE
- ethics
What does the FCA require for all financial promotions?
The FCA requires that all financial promotions must be **clear, fair, and not misleading**, regardless of the media type
87
What must marketing materials for savings accounts disclose?
- The **interest rate** (and whether it’s guaranteed).
- **When interest is paid**.
- Any **set-up fees** or **penalties** for moving the account.
- **Limitations**, like minimum deposit periods for higher rates.
- **Risks**, such as investments in the stock market.
- Any **important small-print details** highlighted for attention.
88
What actions can the FCA take against misleading financial advertisements?
The FCA can:
- Demand changes or removal of the ad.
- Require the provider to **contact misled customers**.
- Order **compensation** for losses caused by the ad.
- **Fine the firm**.
89
What is the ASA’s role in UK advertising?
The ASA (Advertising Standards Authority):
- Regulates ads across **all media**.
- Monitors compliance with **Advertising Codes**.
- Investigates and judges **alleged breaches**.
- Aims to ensure all UK ads are **responsible**.
90
What ethical principles must marketing literature follow?
It must:
- Avoid **discrimination** or offensive content.
- Not condone **criminal/unacceptable behavior**.
- Navigate **grey areas** carefully, as reactions vary.
91
Why is ethical marketing difficult for firms?
Due to **grey areas** and the inability to predict **everyone’s reactions** to images/campaigns.
92
How must marketing reflect societal values?
By aligning with **ethics, sustainability, CSR, and environmental standards**, ensuring content respects societal norms.
93
- corporate social responsibility, sustainability and environmental issues
What is Corporate Social Responsibility (CSR), and why is it important for large companies?
- CSR refers to a company's commitment to engage in activities that benefit society beyond shareholders or stakeholders.
- It minimizes negative societal impacts and aligns with public expectations.
- Measured using **ESG factors** (Environmental, Social, Governance).
- **Example:** Barclays’ "Building Young Futures" program helps disadvantaged youth gain skills for employment.
94
What are the three key ESG factors used to measure a business’s societal impact?
1. **Environmental** – Minimizing ecological harm (e.g., climate change initiatives).
2. **Social** – Supporting communities (e.g., education, employment programs).
3. **Governance** – Ethical leadership and transparency in operations.
95
How does Barclays justify its CSR efforts in its Citizenship Plan?
- Banks connect capital providers and users, playing a key societal role.
- Success is tied to the progress of people, communities, and businesses they serve.
- **Example:** "Building Young Futures" (with UNICEF) trained youth in six countries for entrepreneurship/jobs.
96
What is the focus of HSBC’s citizenship policy?
- Prioritizes **sustainability** and climate action.
- Funds global partnerships for sustainable projects.
- **Example:** "Climate Solutions Partnership" improves soil health for US farmers, enhancing food system resilience.
97
What are NatWest’s sustainability focus areas?
- Minimizing climate change impact.
- Championing enterprise (supporting small businesses).
- Supporting education (inside/outside the bank).
- Aligned with **7 UN Sustainable Development Goals (SDGs)**.
98
How can CSR efforts double as marketing strategies?
- Enhances brand image and builds customer goodwill.
- **Positive Example:** Banks advertising loans for hybrid cars (eco-friendly).
- **Criticism Risk:** Promoting multi-car insurance may seem unsustainable, but it responds to social trends (e.g., young adults living with parents).
99
Why is multi-car insurance controversial from a sustainability perspective?
- **Criticism:** Encourages car ownership (environmentally unfriendly).
- **Defense:** Addresses social needs (e.g., young adults sharing households due to high living costs).
100
What dual sustainability goals do financial providers often have?
1. **Financial sustainability** – Long-term profitability.
2. **Environmental sustainability** – Reducing ecological harm (e.g., HSBC’s climate partnerships).
101
EVALUATING THE MARKET EFFORT
What is the main purpose of evaluating marketing efforts?
A: To assess how successful a marketing campaign and the overall marketing approach have been in delivering the intended objectives. Providers evaluate the effectiveness using specific criteria
102
What are the three key criteria for evaluating marketing?
A:
1. Efficiency
2. Quality
3. Consistency
103
What does ‘Efficiency’ mean in evaluating marketing?
A: It measures how effectively the provider has communicated the desired message to the target audience. It also looks at whether marketing has improved the provider’s reputation and increased product knowledge
104
How is efficiency measured in marketing evaluation?
A: Through market research that checks:
• Impact on the provider’s reputation
• Increase in audience knowledge of product type
• Understanding of the specific product being marketed
105
Give an example of marketing efficiency.
A: A successful bank ad for a savings account promotes the bank as a safe place to deposit money, explains the benefits of saving, and persuades people to choose that savings account
106
What does ‘Quality’ mean in evaluating marketing?
A: It refers to how good and clear the information provided is. Good marketing uses clear language, gives accurate information, and improves the audience’s understanding of the product
107
What are key aspects of quality in marketing evaluation?
A:
• Use of clear, understandable language
• Accuracy of information
• Whether it improves the audience’s knowledge of the product
108
What can happen if the marketing quality is poor?
A: If marketing overpromises or uses misleading language (e.g., saying a business loan is easy to get but hiding strict conditions), it creates a mismatch between expectations and reality, leading to customer frustration and damaged trust.
109
What does ‘Consistency’ mean in evaluating marketing?
A: It checks whether the marketing message aligns with the provider’s reputation and what customers would expect in the given business context.
110
Give an example of consistency in marketing.
A: A building society or credit union using ethical messaging in its lending advertisements matches customer expectations because such organisations aim to benefit their members
111
HOW DIFFERENT APPROACHES FIT DIFFERENT BUSINESS CONTEXTS
What are the three key criteria for evaluating marketing?
A:
1. Efficiency
2. Quality
3. Consistency
112
What does ‘Efficiency’ mean in evaluating marketing?
A: It measures how effectively the provider has communicated the desired message to the target audience. It also looks at whether marketing has improved the provider’s reputation and increased product knowledge
113
How is efficiency measured in marketing evaluation?
A: Through market research that checks:
• Impact on the provider’s reputation
• Increase in audience knowledge of product type
• Understanding of the specific product being marketed
114
Give an example of marketing efficiency.
A: A successful bank ad for a savings account promotes the bank as a safe place to deposit money, explains the benefits of saving, and persuades people to choose that savings account.
115
What does ‘Quality’ mean in evaluating marketing?
A: It refers to how good and clear the information provided is. Good marketing uses clear language, gives accurate information, and improves the audience’s understanding of the product
116
What are key aspects of quality in marketing evaluation?
A:
• Use of clear, understandable language
• Accuracy of information
• Whether it improves the audience’s knowledge of the product
117
What can happen if the marketing quality is poor?
A: If marketing overpromises or uses misleading language (e.g., saying a business loan is easy to get but hiding strict conditions), it creates a mismatch between expectations and reality, leading to customer frustration and damaged trust.
118
What does ‘Consistency’ mean in evaluating marketing?
A: It checks whether the marketing message aligns with the provider’s reputation and what customers would expect in the given business context.
119
Give an example of consistency in marketing.
A: A building society or credit union using ethical messaging in its lending advertisements matches customer expectations because such organisations aim to benefit their members
120
What are the key questions to ask when evaluating efficiency in marketing?
A:
• Has the provider’s reputation improved?
• Has the audience’s knowledge of the product type improved?
• Do people now understand the specific product better?
121
What was the original name of the organization now known as the Financial Services Culture Board (FSCB), and what is its purpose?
- Originally named the **Banking Standards Review Council (BSRC)**, later renamed the **Banking Standards Board**, and relaunched as the **FSCB in 2021**.
- **Purpose:** Publishes annual reports on bank successes/failures to share good practices across the sector.
- **Funding:** Membership fees from UK financial firms.
- **Powers:** No statutory/sanctioning authority; relies on a **voluntary code of practice**.
122
How did Antony Jenkins, former CEO of Barclays, describe the timeline for restoring the bank’s reputation post-crisis?
- Estimated it would take **5–10 years** to restore Barclays’ reputation (BBC News, 2013b).
- **Challenges during his tenure:** Fines for past wrongdoings, struggles to rein in risky investment activities.
- **Outcome:** Replaced in 2015 by Jes Staley, who focused on restructuring and collaboration with regulators.
123
Why is marketing alone insufficient for banks to restore trust post-crisis? What additional strategy is critical?
- **Reason:** Bad press requires more than image-focused marketing; trust must be rebuilt through tangible actions.
- **Additional Strategy:** **Public relations (PR) campaigns** (covered in Topic 8).
- **Modern Marketing Themes:** Emphasize safety, responsible lending (e.g., to small businesses), and long-term customer relationships.
124
How did Lord Turner (ex-chairman of the UK Financial Services Authority) characterize public trust in banks post-2008 crisis?
- Stated trust in banks/bankers had **eroded** (Turner, 2012).
- Public doubted whether banks acted in their **best interests**.
125
What was the role of the Banking Standards Review Council (BSRC), and who led its initial formation?
- **Role:** Raise standards in the banking sector post-crisis.
- **Interim Leader:** Sir Richard Lambert (ex-director general of the CBI).
126
Name three key themes in current financial services marketing campaigns post-crisis.
1. **Safety of operations**.
2. **Responsible lending** (especially to small businesses).
3. **Long-term customer relationships**.
127
What broader industry context shapes financial services marketing? (List 4 factors.)
1. **Ethics** (e.g., CSR, sustainability).
2. **Post-crisis reputation damage**.
3. **Regulatory scrutiny**.
4. **Public demand for transparency**.
128
MARKETING AND THE WIDER INDUSTRY CONTEXT
- What is the FSCB, and what role does it play in the UK financial sector?
- The FSCB (Financial Services Culture Board) is an organization funded by UK financial sector firms.
- It evolved from the Banking Standards Review Council (BSRC) and later the Banking Standards Board.
- Publishes annual reports on bank successes/failures to share good practices.
- Operates under a voluntary code of practice; lacks statutory/sanctioning powers (FSCB, 2021).
129
- the reputation of the sector post-crisis
How did the 2007–08 financial crisis impact the reputation of banks?
- Trust in banks eroded; public doubted if banks acted in their interests (Lord Turner, 2012).
- The Banking Standards Review Council (BSRC) was created to raise standards (led by Sir Richard Lambert in 2014).
- Barclays’ CEO Antony Jenkins estimated 5–10 years to restore reputation after fines and past wrongdoings (BBC News, 2013b).
130
How did Barclays attempt to restore its reputation post-crisis?
- Under CEO Antony Jenkins, Barclays faced fines and struggled to align investment activities with ethical standards.
- Jenkins was replaced by Jes Staley in 2015, who restructured the bank and improved regulator collaboration (Treanor, 2015).
131
Why is PR increasingly important for financial services providers?
- Marketing alone is insufficient to counter bad press; PR campaigns are critical for rebuilding trust.
- Campaigns now emphasize:
- Safe operations.
- Responsible lending (e.g., to small businesses).
- Long-term customer relationships.
132
What broader industry factors influence financial services marketing?
- Marketing must align with:
- Ethics, sustainability, CSR, and environmental practices (see section 7.7.2).
- Reputation damage from the 2007–08 crisis forced a shift in messaging (e.g., transparency, customer-centric values).
133
What did Lord Turner and Sir Richard Lambert say about banking post-crisis?
- **Lord Turner (2012):** Trust in banks eroded; public doubts banks prioritize their interests.
- **Sir Richard Lambert (2014):** Led the BSRC to address declining standards in the sector.
134
- competition and new entrants
How is the UK retail banking sector described in terms of competition?
The sector is very concentrated, meaning it is dominated by a few large established banks with limited competition.
135
What do the UK government and financial regulators aim to achieve in the retail banking sector?
They want to introduce more competition by encouraging the entry of challenger banks.
136
What opportunity does the current banking landscape provide for new entrants?
New entrants (challenger banks) can highlight their differences from established banks and market themselves as better performers in areas where big banks have been criticized.
137
How can challenger banks effectively market themselves?
By emphasizing their differences from established banks and showcasing strong performance in areas where big banks have faced criticism (e.g., customer service, transparency, innovation).
138
What are challenger banks?
New or smaller banks that aim to compete with established, larger banks by offering innovative services, better customer experiences, or addressing gaps left by big banks.
139
Why might challenger banks have an advantage over big banks?
Big banks have been widely criticized in certain areas (e.g., poor customer service, lack of transparency), allowing challenger banks to position themselves as better alternatives.
140
- society’s expectations
What are the two main societal expectations of organizations mentioned in the text?
1. Adopt a **stakeholder approach** (not just focus on shareholder profit).
2. Address **environmental issues** and societal needs (e.g., fair treatment of customers/employees, long-term environmental impact).
141
What does the "stakeholder approach" to corporate behavior entail?
- Organizations should satisfy the needs of **multiple stakeholder groups** (not just shareholders).
- Example: A bank must pay dividends to shareholders **and** treat customers/employees fairly, while considering environmental/quality-of-life impacts.
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How have large financial companies responded to societal expectations?
1. **CSR (Corporate Social Responsibility) policies**.
2. **Citizenship and sustainability policies**.
- Example: Banks support **community programmes** for poorer countries and promote **environmentally friendly practices**.
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Provide an example of how a bank balances stakeholder needs.
- **Shareholders**: Pays dividends.
- **Customers/Employees**: Treats them fairly.
- **Society/Environment**: Considers long-term investment effects (e.g., environmental impact, quality of life).
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What broader focus must organizations have beyond profit?
- **Ethical behavior** (fair treatment).
- **Sustainability** (environmental and social impact).
- **Stakeholder inclusivity** (customers, employees, communities).
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What specific actions do large banks take to meet societal expectations?
- Fund **community programmes** (e.g., aid to poorer countries).
- Promote **environmentally friendly practices** (e.g., sustainable investments).
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MARKETING AND THE CHANGING FINANCIAL SERVICES INDUSTRY
- a stricter regulatory regime
regime introduced into the UK financial services industry?
A: It was introduced in response to the 2007–08 financial crisis. The crisis exposed weaknesses in the industry that led the government to create a new regulatory framework
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What does the stricter regulatory regime require from financial providers?
A: Providers must show a higher level of prudence and treat customers more fairly. They must comply with more rules while also working to restore their damaged reputations
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How can financial providers use this new regulatory environment in their marketing?
A: They can promote themselves as a ‘safer bank’ or a ‘more ethical insurer’, using the improved regulatory compliance and increased consumer protection as a marketing advantage
149
What impact did the financial crisis have on public confidence, and how is marketing being used to address this?
A: Public confidence was badly hit by the crisis. Providers now use the perceived safety and trustworthiness of their services as a key selling point in marketing
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- retail ring-fencing
What is retail ring-fencing as introduced in the Financial Services (Banking Reform) Act 2013?
A: It is the requirement that the accepting of deposits (a core activity) must be separated (‘ring-fenced’) from riskier bank activities, to protect customers and the financial system
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What marketing opportunity does retail ring-fencing offer banks?
A: Banks can promote themselves as safe deposit-takers by emphasizing the ring-fenced nature of their deposit-taking activities in their marketing materials.
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Does ring-fencing give any single bank a competitive marketing advantage?
A: No, it does not give one bank an advantage over another, but all banks can use it in marketing to promote sector-wide safety and trust
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- the state of the economy
Why is the financial services sector considered an important part of the UK economy?
A: It has links with all other industries through the products it provides. In 2020, it contributed £164.8 billion to the UK economy, accounting for 8.6% of total economic output
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How is the financial services sector connected to the state of the overall economy?
A: The sector’s health is closely tied to economic indicators like inflation, unemployment, economic growth, and the housing market
155
What economic indicators affect the financial services sector?
A: Key indicators include the rate of inflation, the rate of unemployment, the degree of economic growth, and the state of the housing market.
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How does the level of economic activity influence the marketing of financial services?
It determines people’s ability to consume financial services, affecting the messaging and products promoted in marketing materials
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How might financial marketing differ in a time of high unemployment and low economic growth?
A: Marketing will likely focus less on savings and more on short-term loans to help people manage financial crises
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How does the marketing focus change during economic expansion?
A: Banks will emphasize personal loans and mortgages, aligning with increased consumer confidence and spending
159
The most useful type of segmentation for financial services providers is one that defines people by their:
Socio-economic status
Product-buying behaviour
Age and gender
Employment status
Product-buying behaviour
160
Credit unions tend to advertise:
Locally
Nationally
Internationally
Global
Locally
161
Targeting particular groups of customers is known as market :
Analysis
Position
Segmentation
Targeting
Segmentation
162
Which of the following organisations emphasises it’s mutuality in its advertising?
Nationwide
NatWest
Halifax
Lloyds
Nationwide
163
The ‘Crystal Mark’ is awarded by the:
-Advertising standards agency
-Plain English campaign
-FCA
-Agency of advertising standards
Plain English campaign
164
The FCA rules that apply to advertising on the internet are:
-Irrelevant as they do not apply
- as stringent as those for other forms of advertising
- more stringent as those for other forms of advertising
as stringent as those for other forms of advertising
165
Most financial services providers are mutuals
True
False
False
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The advertising industry is policed by
-Trading standards
-The advertising association
-The advertising standards authority
+MI5
The advertising standards authority
167
Firms operating under conditions of oligopoly tend not to compete on:
Service
Price
Quality
Range of products
Price
168
‘Small print’ in a contract describes the legal terms and conditions and the technical details
True
False
True
169
An effecting marketing campaign for a building society would result in customers:
- placing large deposits for a long period of time
- placing large deposits for a short period of time
- placing small deposits for a long period of time
- placing small deposits for a short period of time
placing large deposits for a long period of time
170
The most expensive of the following three advertising media is:
Radio
Tv billboards
Magazines/newspapers
Tv
