The influence of marketing communications strategy on consumer purchasing behaviour in the financial services industry in an emerging economy

The financial services sector is characterised by a high level of consumer perceived risk and irrational behaviour in decision-making, which is predominantly influenced by the effect of communication and the application of heuristics as a function of communication in consumer decision-making. This situation promotes marketing communication as one of the most essential activities that financial institutions rely on to mitigate the perceived risks and to satisfy consumers’ quest in understanding financial products. Hence the importance of this research is to establish the effects of marketing communication on consumer purchasing behaviour in emerging economies that are experiencing expanded financial markets but limited corresponding research insight. To achieve the aim of this study, the research uses data from 360 customers of selected financial institutions in Ghana. The hypotheses are tested using the structural equations modelling technique. The results of the study reveal marketing communication strategies evaluated have positive and significant impacts on consumer purchase behaviour. However, amongst the marketing communication strategies tested advertising and celebrity endorsement were found to have an insignificant relationship with consumer purchase behaviour. The study offers practical and theoretical insights into understanding the dynamics and nuances of the integrated marketing communication mix and how they influence the purchase behaviours of consumers.

     

The make-buy decision in marketing financial services for poverty alleviation

In this article, we suggest how poverty reduction can be achieved through alleviation measures that enable the poor to satisfy their needs by focusing on the needs of others. Instead of a direct focus on the consumption needs of the poor, we suggest an indirect approach to satisfying these needs, by providing the poor with credit and consulting services for entrepreneurial businesses that focus on the needs of buyers. Loans to the poor who lack collateral are increasingly based on group lending techniques that rely on joint liability to secure repayment, which have come to be known as microfinance. We suggest that in addition to credit, financial services for the poor must include strategic advice and assistance to select markets, and make the products (goods and services) for sale in their output markets with the financial services bought in their input markets. Financial services for the poor must include not only money to invest in a business but also consulting services to help the business succeed. The provision of consulting services will also facilitate monitoring and enforcement, increasing loan repayment. Depending on poverty levels, the extent of bundling credit and consulting services will vary with one or more organizations emerging to meet the needs of different segments. We suggest that poverty alleviation is achieved by the poor focusing on the needs of others in their output market, and outsourcing financial services to one or more suppliers in their input markets.     

Consent to direct marketing in the financial services sector

The development of communications technology in recent years has led to an expansion in ‘cold calling’, particularly as a means of selling financial services. While encouraging new entrants into the market and thereby increasing consumer choice and competitive prices, this is often viewed as an infringement of personal privacy. This paper attempts to reconcile the complex legal framework that has been put in place to restrict the use of unsolicited direct marketing and to show how, through the use of a carefully drafted data protection notice, the direct marketing of financial services may be conducted lawfully.     

The split capital investment trust saga: Lessons for financial services marketing

The split capital investment trust boom at the end of the 1990s demonstrated that product innovation and financial engineering can lead to the creation of dangerous products whose risks are not understood by investors. It also emphasised the need for careful marketing of investment products. This involves identifying the needs of investors, creating products to meet those needs, promoting and selling those products, and managing client relationships after the sale. Particular issues that should be addressed include the need to educate clients and adequate stress testing of new products.     

A cross-category examination of consumer price awareness in financial and non-financial services

Consumer awareness of prices is a fundamental requirement for sound purchase decisions. However, while in recent years the volume of research on consumer price awareness for manufactured goods has grown significantly, studies of price awareness in services, and in particular in financial services are almost nonexistent. As a result, the overall understanding of the level price awareness for financial services and its potential determinants has been limited. This paper profiles the level price awareness for a series of financial services as well as non-financial services. Systematic differences between financial and non-financial services are empirically examined, and the related drivers are contrasted between the two types of service. The paper concludes with a discussion of the implications of the findings on the pricing and marketing of financial services.     

Risk preferences and the marketing of financial services: Segmentation by birth order

Traditional investment questionnaires may yield an incomplete measure of clients’ risk tolerance. Birth order has the potential to provide additional insight into the true nature of customers’ risk aversion, thereby assisting financial advisors to formulate the optimal investment portfolio for each client. We summarize research findings on birth order-related personality traits that have potential impact on the financial services industry. Marketing implications for investment firms are discussed in a framework that considers customers’ birth order differences in risk tolerance, patience, financial goals and conformity.     

The relationship marketing orientation of Hong Kong financial services industry managers and its links to business performance

The importance of a relationship marketing orientation (RMO) in the Hong Kong financial services industry is examined and a RMO construct tested for its impact on business performance. Following an earlier study of RMO that found a significant positive association with business performance in a sample dominated by a Hong Kong wholesaling, retailing, and associated activities, our study of RMO in the financial services sector found a similar association but of greater strength. RMO factors, however, vary in their effect on particular business performance indicators, complicating the picture of how RMO works to improve business performance. For example, communication is the only factor with a significant association with customer retention but is unimportant for market share. Although the elements of RMO are interdependent, differences in contribution to achieving particular business performance outcomes suggest the need for a fine-grained approach to building a RMO strategy, one crafted to the service context and particular business performance goals.     

A review of consumer decision-making models and development of a new model for financial services

It is recognised that existing theories of Consumer Decision Making (CDM) are not well suited for financial services and there have been calls for development of a new conceptual model. This article reviews prominent models of CDM and identifies strengths and limitations. A new conceptual model that is applicable to financial services is developed. An important element of the model is the recognition that the components interact rather than a consumer following a linear progression through a series of stages. The new model better reflects the iterative decision-making process relevant to financial services and enhances marketers’ understanding of the process and thus their ability to influence it to increase the likelihood of positive outcomes for all. The model has three main components: inputs, processes and outcomes. Inputs include the purchase situation (contextual and environmental variables), consumer characteristics (psychological and social influences) and information sources (marketing mix and interpersonal). Processes include need arousal, information utility, criteria development and evaluation of alternatives. Outcomes include the decision (that may be to abort the purchase), the purchase itself and post-decision evaluation. Further research is required to test the relationships between the variables in different contexts, and thus enable refinement and/or validation of the model.     

Design and marketing of financial products

Marketing costs are introduced into the security design environmentoutlined in Allen and Gale (1988). It is shown that splittingthe firm's cash flow between products enhances their investorappeal and reduces marketing costs. We also explain how theextremal product design in Allen and Gale is thereby avoidedand how in simple cases, debt, equity, or warrants can be optimal.Furthermore, we illustrate in general terms how the optimalsolution employs portfolios of option-type products, and wegive an example of two optimal products that share profits inseven of eight states.     

我国商业银行消费信贷的营销缺陷分析

造成消费信贷“叫好不叫座”的原因除了客观环境因素外 ,商业银行本身在营销上的缺陷也是一个重要方面。本文着重分析了商业银行在推行消费信贷中存在的各种营销缺陷 ,并针对性地提出了改进意见。     

Pricing financial services innovations

The number of innovative financial solutions introduced to markets has grown considerably in the past decade owing to emerging digital technologies, deregulation and market fragmentation. Examples are abundant in the worldwide markets for insurance, credit products and transaction processing services. A question of growing interest is how firms should price these innovations. The optimal introductory pricing of financial innovations may vary as a function of factors such as price sensitivity of the market and competitors’ ability to introduce competing financial solutions. In this article, we examine the role of these factors in the optimal pricing of a financial innovation. Using an agent-based simulation framework, introductory pricing strategies that maximize profitability under various market conditions are identified. Results indicate that lower levels of market price sensitivity and longer time horizons for competitive entry create pricing opportunities for financial innovators. However, the relationship becomes more complex as market price sensitivity increases or competitive market entry becomes more immediate. Detailed recommendations for optimal pricing of financial innovations under various market conditions are provided, and the article concludes with strategic recommendations for pricing innovative financial services.     

国外金融消费权益保护改革进展及启示

加强金融消费权益保护成为危机后国际金融监管改革的重要共识。文章分别以美国、欧盟、英国和日本为代表介绍了国外金融消费权益保护改革取得的进展,在借鉴国外金融消费权益保护改革举措和发展方向的基础上,就完善我国金融消费权益保护工作提出相关建议。     

2007年度中国金融营销十佳

2007年12月28日,由本刊和中国金融市场研究中心联合主办的中国金融营销十佳奖揭晓,来自16个金融机构的20个精彩营销案例分别获得评委会特别大奖、十佳奖、优秀奖和公益营销奖.这是国内首次有关金融营销的评奖活动.