Unit 4 Topic 7 Flashcards
What is the primary objective of financial services marketing?
To communicate information about financial products to potential and existing customers, influencing their behavior to purchase or engage with the service.
Why is effective marketing important for financial providers?
Because marketing materials are expensive to produce, they must be designed to maximize their impact and return on investment.
What are the key measures of effectiveness in financial marketing?
Increased sales, high-quality customers (e.g., those making larger or longer-term deposits), and long-term brand awareness.
How does brand awareness contribute to marketing effectiveness?
It ensures customers recognize and trust a provider, making them more likely to consider its products in the future.
What is market segmentation?
Dividing potential customers into groups based on characteristics such as age, income, occupation, or financial behavior.
Why do financial providers use market segmentation?
To tailor products and marketing strategies to specific customer needs, maximizing the effectiveness of their campaigns.
What are some common forms of financial marketing materials?
Leaflets, websites, mailshots, text messages, pop-ups, and television advertisements.
How does HSBC tailor its marketing materials for different segments?
It uses different designs and messaging for HSBC Premier (wealthier customers) and standard current accounts (general customers).
Why is small print important in financial marketing materials?
It provides detailed terms and conditions that may not be highlighted in the main advertisement.
What is an example of misleading financial advertising?
A bank advertising a high interest rate without making it clear that it only applies to large deposits or for a limited time.
Why do banks invest heavily in advertising?
Because competition is strong, and banks must differentiate themselves without relying solely on pricing strategies.
What are the main advertising media used by financial institutions?
Television, newspapers, magazines, billboards, sponsorships, and digital channels such as websites and social media.
How do regulators ensure financial marketing is fair?
The Financial Conduct Authority (FCA) requires that marketing materials be clear, fair, and not misleading.
What is this an example of? Payday loan advertisements targeting children, creating the impression that borrowing is easy and risk-free.
An unethical financial marketing practice
How do financial institutions integrate CSR into marketing?
By promoting sustainability, ethical investments, and community support programs, such as Barclays’ “Building Young Futures.”
Why do banks emphasize environmental and social responsibility in marketing?
Because consumers increasingly prefer brands that demonstrate ethical and sustainable business practices.
What are the three key criteria for evaluating marketing effectiveness?
Efficiency (reach and impact), quality (clear and accurate information), and consistency (alignment with brand and values).
Why is customer trust important in financial marketing?
Because past financial scandals, like the mis-selling of PPI, have damaged the reputation of financial institutions.
