Question

What is the general issue for marketers in the financial industry? Justify your answer with examples

Answer 1

Marketers in the financial industry face a unique challenge, in the sense that the products they offer are not something a person without sound financial knowledge can understand. Commoditization is one of the issues, especially in recent times. Due to the digital age, there are a plethora of financial players in the financial services industry, with a similar product offering by multiple companies. In such a case, it becomes difficult to develop brand loyalty. Let's consider an insurance product. A general layman person considers only the type of insurance and the premium associated with it. Health insurance is offered by multiple companies, with little difference in the offering. In such a case, marketing a product is a challenge since the customer becomes indifferent to marketing tactics.

As against any other products, financial market products suffers from a lack of trust in the market. This is because, unlike a commodity or a unique product, the quality of the product cannot be maintained uniformly. For eg. consider a mutual fund. Here, the returns are subject to market factors, beyond the control of any firm. However, the marketing of such products become difficult in adverse scenarios.

Other than this, financial products are difficult to visualize and are do not attract general public attention. For eg., a motorbike manufacturer can instantaneously attract public attention by showing catching images. In the finance industry, however, a thorough analysis needs to be done in order to know whether the product is beneficial or not. In other would, the financial industry is intangible and is perceived as mundane by the general public.

Finally, since the financial industry is the backbone of any country, there are severe regulations by the law of the land in place to prevent any mis-selling. These regulations often limit marketers' creative ideas to market the financial product. The regulatory agencies closely monitor any advertisement content to check if there is any breach of regulatory compliance.