G7 - 35 - May Thazin-1

MBF(Day 5th Batch)
MBF123 Marketing Financial Products

December, 2023
Mid-term Exam
Name : May Thazin
Roll No : MBFI-35
Date : 10th December, 2023
Question 1. Financial services have different generic characteristics compared with other types of
products in marketing. As a marketing manager, discuss how you consider the nature of strategies
employed in relation to the unique services to overcome the problems.
Answer
Financial services possess distinct characteristics that set them apart from other products in
marketing. These characteristics - intangibility, inseparability, variability, and perishability -
require tailored strategies for effective marketing. As a marketing manager, understanding these
traits is crucial in formulating strategies to overcome the challenges they present.
1. Intangibility: Financial services lack physical presence or tangible attributes. To address

this, emphasizing tangible elements becomes pivotal. This involves using visual aids like
branded materials, intuitive user interfaces for online platforms, or creating welcoming
physical spaces (if applicable) to evoke a sense of tangibility and credibility in the minds
of consumers.
2. Inseparability: This characteristic refers to the simultaneous production and consumption
of financial services. To navigate this challenge, focus on enhancing the overall customer
experience. Invest in seamless online platforms, efficient customer service, and
streamlined processes to ensure a hassle-free interaction, regardless of the touchpoint.
3. Variability: Financial services often exhibit variability due to factors like changing market
conditions or individual client needs. Strategies should prioritize consistency and
reliability. Implement robust systems, stringent quality controls, and standardized
processes to ensure consistent service delivery, minimizing the impact of variability.
4. Perishability: Financial services can be time-sensitive, and opportunities may have
expiration dates. To counteract this, create marketing strategies that leverage urgency.
Offer time-limited incentives, communicate the immediacy of certain financial
opportunities effectively, and prompt quick decision-making among customers.
In relation to these unique characteristics, marketing strategies should also focus on:
• Trust and Credibility: Develop strategies centered around building trust, utilizing client
testimonials, industry certifications, awards, and endorsements to establish credibility and
reliability.
• Personalization and Customization: Tailor services to individual needs by offering
personalized solutions and communication, meeting specific customer requirements.
• Educational Content: Simplify complex financial concepts through educational content,
such as blogs, webinars, or seminars, establishing the brand as an expert to empower
informed decision-making.
• Technology and Innovation: Leverage technology to enhance accessibility, convenience,
and security in financial services. Offer innovative solutions like mobile apps, AI-driven
platforms, or online tools to meet evolving customer expectations.
• Compliance and Transparency: Adhere strictly to regulations and ensure transparency
in all communications and operations, building trust and credibility.
• Feedback and Continuous Improvement: Encourage and act on customer feedback to
continuously improve services, adapting strategies based on evolving customer needs,
market trends, and technological advancements.
By acknowledging and addressing these distinctive characteristics through tailored strategies,

marketing managers in financial services can effectively overcome challenges and position their
services favorably in the market, fostering customer trust and satisfaction.
Question 3. Choose a financial service provider (FSP) in our economy. Explore the opportunities
and threats that the macro environment creates.
Answer
Financial service provider (FSP) are financial institutions that provide services to consumers. The
most typical of the service providers are banks, payment providers, insurers, receivables managers,
intermediaries, funds and investment fund.
In our economy, let's consider a financial service provider (FSP) like a retail bank. Exploring the
macro-environment for this bank entails identifying both opportunities and threats that arise from
external factors affecting the financial services industry:
Opportunities:
1. Technological Advancements: Embracing technological innovations presents a

significant opportunity for FSPs. Digital banking, mobile apps, AI-driven customer
service, and blockchain technology can enhance efficiency, customer experience, and
operational effectiveness.
2. Economic Trends: Economic growth and stability provide opportunities for FSPs to
expand their services, offer more loans, and invest in new markets. Low-interest rates can
encourage borrowing, benefiting the FSP through increased lending activity.
3. Regulatory Changes: Certain regulatory changes might favor FSPs. For instance, relaxed
regulations or incentives supporting financial inclusion initiatives can open up new
customer segments and markets for the bank.
4. Globalization: Access to international markets allows FSPs to diversify revenue streams
and offer specialized financial products and services to a broader customer base. It also
facilitates opportunities for mergers and acquisitions to expand market presence.
Threats:
1. Regulatory Challenges: Stringent regulations or sudden changes in regulatory

frameworks can pose significant threats to FSPs. Compliance costs might increase,
affecting profitability and restricting certain operations.
2. Cybersecurity Risks: With the rise in digital transactions and data storage, FSPs face
increased cybersecurity threats. Breaches could compromise sensitive customer
information, leading to financial losses and damaging the institution's reputation.
3. Economic Instability: Economic downturns, recessions, or fluctuations in interest rates
can impact the profitability of FSPs. Reduced consumer spending, increased loan defaults,
or declining investment opportunities could affect the bank's financial health.
4. Competition and Disruption: The financial services industry is highly competitive, with
the emergence of fintech startups and tech giants offering financial products. These
disruptors can capture market share and challenge traditional FSPs by providing
innovative, customer-centric services.
5. Changing Consumer Behavior: Shifts in consumer preferences towards digital banking
or alternative financial services might threaten the traditional banking model. Failure to
adapt to changing consumer behavior could lead to loss of market share.
For a retail bank, understanding and responding to these macro-environmental factors are critical
for devising strategies that capitalize on opportunities while mitigating threats. Adapting to
technological advancements, maintaining regulatory compliance, enhancing cybersecurity
measures, and staying agile to changing market demands can help navigate the complexities of the
macro environment and ensure sustainable growth for the financial service provider.

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MBF(Day 5th Batch)

MBF123 Marketing Financial Products

1. Intangibility: Financial services lack physical presence or tangible attributes. To address

By acknowledging and addressing these distinctive characteristics through tailored strategies,

1. Technological Advancements: Embracing technological innovations presents a

1. Regulatory Challenges: Stringent regulations or sudden changes in regulatory

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