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Current position: China Education Abstracts > Management Papers > Management Theory > Paper Content Product Bundling Strategy in Financial Services Marketing Author: Anonymous Source: Unknown Date of Release: 2008-8-218: 5106 Publisher: lsy 1 chj 2 wdh 3[ Abstract] With the development of the financial industry, As well as the increase of total wealth and the change of wealth structure, financial institutions can provide products according to the customer's life cycle, which provides the feasibility for financial institutions to bundle sales. By bundling sales, it can not only meet the needs of customers, but also improve the wealth utility of customers; It also allows financial institutions to improve sales efficiency. This paper analyzes the current situation and existing problems in the sales of financial services and products in China, and puts forward corresponding countermeasures for these problems.
[Keywords:] financial services marketing products life cycle bundled lifestyle
I. Introduction
Product bundling in financial service marketing refers to the organic combination of various products and services in the marketing process of financial institutions, which can enable financial institutions to conduct more transactions with consumers, thus improving the profitability of financial institutions (Harrison, 2004). By bundling products, financial institutions can be helped to achieve the following goals: reducing transaction costs between financial institutions and customers; Establish good relationship management; Strengthen the human capital of financial institutions; Enhance the knowledge management ability of financial institutions; Reduce the operational risks of financial institutions.
By bundling products, financial institutions can not only improve their own operating conditions, but also help customers to add value, realize the increase of customer value, enhance profitability and improve social welfare.
Second, the environment for implementing product bundling strategy.
1. Competition among financial institutions has intensified.
After China's accession to the WTO, all kinds of financial institutions will be open to the outside world. With the deepening of openness, new competitors appear constantly, and the competition in the financial industry continues to strengthen. China's traditional banking-led financial system will be greatly impacted, and various new financial institutions will emerge. For example, savings associations, housing credit banks, auto financing companies and various financial institutions such as insurance companies, trust institutions and financial institutions will emerge. The old competitive pattern of the financial industry will be broken, and the banking industry will shift from the traditional consumer acquisition strategy to the maintenance of consumers and the cultivation of loyalty.
2. Changes in the structure and total amount of personal income and personal wealth
After more than 20 years of rapid economic growth in China, the wealth of China has greatly increased, and the wealth structure has also undergone great changes. Before the reform and opening up, people's income sources were poor, the total wealth was small, and the variety was single; People's income mainly depends on wage income. With the growth of China's economy, people's income is also increasing, and the channels for obtaining wealth are also increasing. With the increase of income and diversification of wealth sources, people's demand for financial services and products will increase.
3. Changes in population and family structure
In recent years, great changes have taken place in China's population and family structure. According to the report "Demographic and Economic Analysis of China's Pension Policy-Silver-haired China" funded by Prudential Financial Group, the elderly population in China accounted for 1 1% of the total population in 2004. But the United Nations predicts that by 2040, the elderly population in China will account for 28% of the total population. This poses a challenge to the shrinking 4 ~ 2 ~ 1 family pension system. According to Joe, a demographer in China, by 2025, urban women aged 65 will have only 1.3 children, while rural women will have an average of 2.2 children. The rapidly declining population is in sharp contrast to the expanding mouths of the elderly. Accordingly, the demand for financial products has also put forward new standards.
4. The continuous development of science and technology information technology
The development of science and technology provides technical support for the bundling of financial services and products. Traditional financial business and information are recorded on paper, so it is not easy to classify, save and organize these information, let alone accurately market customers. The application of information technology enables customers to contact financial institutions through various channels. For example, the invention of ATM provided customers with 24-hour uninterrupted service. The opening of online banking enables customers to make all-round financial consumption anytime, anywhere and in any way. At the same time, with the help of information technology, the establishment of customer financial consumption database can identify each consumer, effectively track consumer behavior and life cycle, and accurately sell customers. On this basis, it can help consumers determine appropriate financial products and services, and financial enterprises can improve marketing efficiency.
Third, the theoretical analysis of product sales bundling strategy of financial institutions.
1. life stage analysis method
The life stage analysis method is that people's consumption behavior in different life stages has a great influence due to the occurrence of major life events, thus causing changes in the demand for financial products and services. Lifecycle marketing can gain customer intimacy because it is closely related to the customer's life experience, thus enhancing the relationship between banks and customers (Divanna, 2005).
2. Lifestyle analysis method
As a lifestyle analysis method, financial institutions evaluate personal consumption and savings behavior through lifestyle analysis method, so as to determine what kind of financial products to introduce to adapt to the current lifestyle. It is quite effective to arrange financial products and services according to customers' financial product needs. However, the disadvantage of this method is that financial institutions usually don't re-evaluate customers' product needs after their lifestyle changes. Sometimes, financial products are no longer suitable for customers' lifestyles, but customers still have to pay high product costs, which will ruin Gu 3. Analysis of customer life stages and lifestyles (Divanna, 2005).
This analysis method is a combination of life stage analysis and lifestyle analysis, which takes into account the changes of customer life cycle and customer lifestyle, and organically combines the two, so as to rationally locate customers' consumption behavior, rationally bundle financial products, enable financial institutions to accurately locate customers and improve marketing accuracy.
Fourth, the current situation and analysis of financial service marketing in China.
1. The sales model is single, and it lacks attention to the lifelong value of customers.
At present, the marketing of financial services in China is still dominated by single product sales. Many financial services and sales are based on the internal evaluation and marketing purposes of financial institutions. They are oriented to achieve sales goals, have a strong sense of compulsory sales, and lack attention to customers' lifelong value, life cycle and lifestyle.
China's financial institutions operate separately, and the sales and research and development of financial products are greatly restricted. Without comprehensive and systematic product development and design for customers, financial institutions cannot combine various services and bundle products, and cannot provide bundled product sales across secondary market segments.
2. The pricing mechanism of financial services and products lacks flexibility and flexible marketing mechanism.
At present, the prices of financial services and products in China are strictly controlled, and they lack pricing power, so they cannot be bundled with customers on the basis of price changes. The performance is that the interest rate of the banking industry and the interest rate determined by insurance products are not marketized.
3. Financial institutions lack the management of customer knowledge.
At present, the sales mode in China is still product sales, especially in personal financial consumption habits, behaviors, lifestyles, religious beliefs, cultural traditions and so on. , there is no effective analysis, sorting and refining of customers, and there is a lack of guidance for financial product sales. Even if some information exists in banks, it is still scattered in various departments of financial institutions, which has not been effectively sorted out and has become instructive knowledge for sales.
4. Lack of customer segmentation
The core of modern strategic marketing is called STP marketing, that is, segmentation, target and product positioning. Market segmentation is in the primary position in marketing strategy, because the big market of financial services gradually decomposes into hundreds of micro-markets in the process of developing into small markets, which shows that different buyers pursue different products through different distribution channels and adopt different communication methods (kotler, 1996). The development of the financial industry also follows this law. In China, due to the bank-led financial system, the development of other financial institutions has been seriously inhibited, and the lack of other financial institutions has led to unreasonable market segmentation, inability to provide suitable products for these markets, and inability to meet the financial needs of society; In addition, factors such as social wealth structure, changes in consumer behavior and psychology, and differentiation of social classes also make financial consumption appear segmentation trend.
5. Lack of product development technology
Due to the short opening time of China's financial industry, in the development and research of financial products, China's financial institutions are still in the process of product development based on market perception, lacking accurate market positioning. Information technology is not based on extensive customer data, the existing data has not been effectively developed and utilized, and the "direct contact with end users" based on the pervasive distribution of extensive customer data has not been established, and the products have not been designed and developed separately. Therefore, the ability of financial institutions to combine and reorganize products flexibly and quickly is weak.
6. Low quality of human resources
Financial business must always be sold with other additional skills. Other skills include social experience, economic theory knowledge, emotion and other elements, which can be integrated to form the high efficiency of sales behavior. This requirement puts forward higher human capital requirements for employees of financial institutions. At present, the quality of employees in financial institutions in China is low, most of them have not received a good and systematic professional education, lack basic financial knowledge and skills, and lack the ability to combine various financial services and products.
Verb (abbreviation of verb) countermeasures
1. Financial institutions turn single sales into combined sales to provide wealth management services for customers.
The essence of wealth management is to reasonably combine various assets of customers and help maximize the return on assets. Among customer wealth, financial assets are widely concerned because of their largest share. In the process of selling financial products, we should match various financial products according to the life stage and lifestyle analysis method, meet the needs of different stages of customer life cycle and changes in consumption behavior, and maximize the utility value of customers. The total account balance of HSBC proves the advantages of this combination marketing (Divanna, 2005).
2. Flexible pricing strategy should be implemented in product bundling.
The goal of any strategy is to create more value for customers than their cost (Porter, 1988). The same is true of the strategic objectives of financial institutions. Bundling sales can not only sell more products to customers, but also implement preferential sales policies for customers who buy more services, which can provide customers with value that exceeds their costs.
3. Strengthen customer relationship management and establish information-driven learning relationship. The establishment of customer relationship can help marketers get rid of price incentives and establish one-on-one interactive learning relationship with customers, because it is more meaningful to customers. Strengthen customer relationship management and (1) interact with customers. Interaction, dialogue and information exchange are the basis of customer relationship management, and the relationship between the two parties can be strengthened through this interaction. Foreign financial institutions, such as ABN Amro and Bank of East Asia, will notify as many target customers as possible by mail and telephone when launching new products. (2) Provide tailor-made intimate services to customers. An important condition for developing customer relationship is to adjust service content according to customer demand. If an enterprise can provide this customized flexibility, it will be able to shape the uniqueness of its products and services, successfully distinguish them from competitors' products and services, and become an important key to maintain customer loyalty. Of course, to strengthen customer relationship and management, we must change the operation mode of financial institutions, from handling affairs to helping customers solve problems, from obtaining orders to helping customers, and often provide all kinds of information that customers need to help customers make financial consumption decisions and complete their life goals, so as to develop an interdependent relationship with customers.
4. Implement brand strategy and enhance human capital.
The importance of brand equity is paid more and more attention by financial institutions. When implementing the bundling strategy, we should pay attention to the brand strategy of financial institutions. Among the constituent elements of financial brands, human capital is the most important factor. Therefore, in the process of implementing bundled sales, we should attach importance to human capital and strengthen the training of account managers in financial institutions. Financial services are imperceptible, indivisible, different and unsalable. At the same time, it has the characteristics of fiduciary responsibility and two-way information exchange. Customers' feelings about financial products and services and financial institutions are transmitted through account managers. The sale of financial products also implies the transmission of the culture and ideas of financial institutions, and the transmission of these cultures and ideas needs the correct grasp of the account manager, and at the same time, it needs to transmit its own professional knowledge, life values, life experiences and emotions to customers to help them complete the sales. Therefore, in the process of implementing bundled sales, help account managers strengthen human capital and improve the knowledge content in the sales process.
References:
Tina Harrison: Financial Services Marketing. Machinery Industry Press, March 2004.
[2] Joseph A. Diwana: The Future of Retail Banking [M]. China Financial Publishing House, March 2005.
[3] Sun Li: "One-on-one marketing" [M]. China Economic Publishing House, February 2002.
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