Branding and brand development through direct marketing in the consumer financial services sector: METHODOLOGY

Branding and brand development through direct marketing in the consumer financial services sector: METHODOLOGY

This paper represents part of an ongoing PhD study of brand commitment in a consumer banking context. The author is currently engaged in conducting research among personal banking consumers, examining the influences that keep customers with their ‘main bank’ or financial provider.

From the literature review it was concluded that consumers’ views on branding in financial services and on direct mail/direct marketing have already been researched (albeit separately) by academics and commercial bodies. On the other hand, literature on direct marketing in consumer financial services from an expert and DM agency perspective was lacking and it was found that brand commitment or loyalty had not been explored in this context.

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Branding and brand development through direct marketing in the consumer financial services sector: The role of direct marketing

DMIS (2000a) Financial Cards Sector Report finds that although there is recall for the highest volume brands and direct mail does make customers more likely to deal with the sender, consumers hold negative attitudes towards direct mail. While brand relevance is a key component of brand strength, consumers underestimate the difficulties for direct marketers of acquiring and maintaining high quality data and of targeting, and ‘do not think direct mail is hard to do’, with more than 50 per cent of respondents questioning the relevance of card mailings: ‘they do not think senders have made much effort to find out what they are interested in’.

This reveals a strategic deficiency in financial services direct marketing, namely a relational objective, which is advocated by many writers. Research supports the argument that there is a weak level of relationship marketing in financial cards direct marketing:

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Branding and brand development through direct marketing in the consumer financial services sector: LITERATURE REVIEW

Branding in the financial services sector

A brand definition that recognises the brand in the service domain and the brand’s role in securing brand commitment, or a resistance to switching, is made by de Chernatony and McDonald:

‘A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs closely. Furthermore, its success results from being able to sustain these added values in the face of competition.

De Chernatony and McDonald also note an increasing trend towards stressing the company as brand. When discussing brand in a financial services context, in most cases this means the company or corporate brand, the highest level in Keller’s (1999) brand hierarchy. ‘Product brands in financial services are relatively few and far between, at least on this side of the Atlantic. Morrison (1997) states that ‘The banking and financial services industry has long been characterised by monolithic identities’. Saunders and Watters (1993) and Morrison (1997)¬†also underline the difficulty of achieving differentiation at the banking product level, since product attributes in this sector can be copied so quickly.

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Branding and brand development through direct marketing in the consumer financial services sector

Branding and brand development through direct marketing in the consumer financial services sector

INTRODUCTION

Direct mail volume is heavy in the consumer financial services sector, with 3,123 million items mailed in 1998 but branding is thought to be weak in consumer financial services, in the sense that consumers do not recognise many brands within this sector.

‘Most strikingly 50 per cent of consumers did not know the name of any [financial card] company which had mailed them.

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Representative APR 391%

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