Financial services differ from goods in that they are intangible, inseparable from their production and consumption, perishable, heterogeneous, involve fiduciary responsibility, and often form long term relationships. These differences require financial services to be marketed differently than goods, with an emphasis on building trust, reducing risk, customizing services, and ensuring consistency of service through standardized processes and motivated, informed staff.

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1.1. Identify how and why financial services areIdentify how and why financial services are
different from goods; anddifferent from goods; and
1.1. Explain how these differences affect theExplain how these differences affect the
marketing of financial services.marketing of financial services.

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Financial services deal with individual, organizations and
their finances.
Financial services are different from physical goods.
Goods is something that is possessed whereas service is
something that is experienced. E.g. bank account.
Financial service may be very short term(e.g. buying and
selling stocks) while others are very long term(e.g.
mortgages and pensions).

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Intangibility
Inseparability
Perishability
Heterogeneity
Fiduciary responsibility
Long term

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This Is cited as the key
features that distinguishes
services from goods.
Service do not have a
physical form and can not
be seen, touch,display,felt.

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Service are
characterized by a
predominance of
experience and
credence quality.
Physical goods are
characterized by a
predominance of search
quality.

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The following issues are
important
•Providing physical evidence or
some physical representation of the
product.
•Placing particular emphasis on the
benefits of the service.
•Reducing perceived risk and helping
consumers feel more confident about
the out come of their purchase
•Building trust and confidence to
reassure consumers that what they
perceive will be of appropriate
quality

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Are produce and consumed
simultaneously.
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As service are interactive,
the way in which the
service is perform may be
as significant to customer
as the actual service itself.
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The following issues will be particularly significant.
•Ensuring that the processes of service delivery are
clearly specified and customer oriented.
•Ensuring that all staff involved in service provision
appreciate important of a customer oriented
approach.
•Identifying ways of encouraging customers to
participate in providing the service by undertaking
certain simple task themselves.
•Identifying policies and principles to deal with
problem customers.

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This refers to the fact
that services, including
financial services,
cannot be stored, in that
they are produce
simultaneously.
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Service can only be
produced as consumers
wish to buy them.

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•Exploring the mechanisms that
are available for forecasting
demand and whether they could
be used to plan capacity
availability.
•Is there the opportunity to
adjust capacity to accommodate
variability.

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Service variables can be interpreted in
two ways:
•That service are not standardized.
•That the service experienced may
vary from customer to customer-even
those with similar needs-or may vary
from time to time for a particular
customer.
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If a customer experiences a
varying quality of service a
different times, this will lead
them to feel uncertain about
the type of service they can
or should expect.
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The obvious implications for marketing are:
Having flexibility in service processes to
adapt to different needs
Empowering staff to respond to different
needs and situations, such that processes
can be adapted as when necessary
becomes increasingly important.
Motivating and rewarding staff for
providing good and consistent service.
Mechanizing services, which are simple
from the consumer perspective, to limit
quality variability.
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Implicit responsibility
which financial services
organizations have in
relation to the
management of funds and
the financial advice they
supply to their customer.
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The long term relationship
between customer and
provider, reinforced by the
amount of information that
providers have about their
customers, creates
considerable potential for
cross selling.
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It requires internal
marketing to ensure that
service staff have the
motivation and information
to deliver the service.
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