Marketing of Retail Financial Services

Extract

1.1 In recent years insurance companies have begun to employ marketing techniques in search of greater success in an increasingly competitive market place. Several companies have Marketing Departments. However, those who have used marketing techniques most efficiently are not necessarily those with the largest departments.

1.2 Too often marketing is confused with promotion which is but one facet of a multi-faceted discipline. Another common mistake is to regard marketing as a subset of selling. This is understandable because most senior marketing appointments in the insurance industry have gone to people with a sales background. Levitt in his classic article Marketing Myopia in Harvard Business Review said:

“Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.

The selling concept starts with the company's existing products and calls for heavy promotion and selling to achieve profitable sales. The marketing concept is a customers' needs and wants orientation backed by integrated marketing effort aimed at generating customer satisfaction as a key to satisfying customer goals.

The determination of what is to be produced should not be in the hands of the companies but in the hands of the customers. The companies produce what the consumers want and in this way maximize consumer welfare and earn their profits.”