Adopting an effective marketing channel has become a critical factor today since a marketing channel plays pivotal role that impacts in positioning, placement, promotions, advertising, pricing and other important marketing decision. Studies indicate that meeting diverse needs of customers requires marketing channel decisions that ensures services and products are competently offered to consumers for consumption.
Manzerolle and Smeltzer (2011, p.330) posit that in the financial sector, different financial organizations utilize diverse marketing channels that are either direct or which involve intermediaries to meet various needs of their customers. As this paper analyses, all marketing channels have a common factor linking an end customer with a producer but vary in efficiency.
It is against this backdrop that this paper focuses on zero level marketing channels and how effective they are in selling financial services and products to customers. In addition, it compares this approach with other approaches used by other established organizations in the financial sector.
Direct marketing channel, also called zero level channel has become a major marketing conduit that most financial organizations like banks are using to take products and services directly to customers via means like infomercials, telemarketing, direct sales as well as through mails.
Sun and Wu (2011, p. 342) posit that the use of traditional model of utilizing retail channels to penetrate to customers has been regarded as less cost effective and infeasible for companies that are not well established or in the middle market. Direct marketing has emerged as an effective medium for marketing and selling financial services since it leverages on a one-on-one intimate selling.
Manzerolle and Smeltzer (2011, p.332) indicate that in the current fast-paced competitive market, the use of zero level channels makes it possible to spread word of a service or a product to customers more effectively, faster and in a wide area due to the availability of mass communication media. Such media include video conferencing, the internet, fax machines, electronic mail, adverting, computer and televisions.
The effectiveness of communication within this channel has increasingly grown due to the development of technology. Consequently, this growth and development has made marketing of financial services by marketers in the financial sector to consumers to be rapid and proficient when compared to other channels.
A producer to consumer channel has been lauded by scholars of marketing management studies like Kim, Hibbard and Swain (2011, p. 524) as a channel which enhances a marketer’s profit margin. The option to adopt a zero level channel has been considered to be attractive by many financial organizations whose objectives have been to maximize profits.
Indeed, as Mary Jo Hatch posits in her model of business dynamics, adopting a zero level marketing channel is a key business concept that enables a producer to manage favorably his sales, reach customers and enjoy all the profits without having to share with distributors or other intermediaries (Manzerolle and Smeltzer 2011, p.332).
Indeed, this channel has become a favorite choice of most businesses such as CityBank, which sell its services and products directly to consumers. Additionally, direct marketing is a common practice and involves aspects such as telephone selling, direct mail and direct response advertising. A typical example is Western Union.
Approaches used by other businesses
Studies indicate that using effective market channels has become a central pillar for most financial organizations seeking to win greater national and international markets. An effective market channel has the capacity to link consumers with respective organizations, and as a method of branding, developing loyalty and levering demand for continued market dominance and profitability.
Established financial service organizations like the Western Union and the American International Group have used their various marketing channels to act as major branding forces that seek to reach, persuade and establish customer bases where all consumers and stakeholders consider and feel part the company.
Financial markets are becoming highly competitive because of high specificity of consumers and the levels of marketing channels involved. Gabisch and Gwebu (2011, p. 310) explain that this competitive environment makes marketing complex as businesses are seeking effective ways of reaching customers. Large financial service organizations like AIG have adopted strategies aimed at utilizing superior marketing channels involving complex intermediaries to reach and put across their messages to consumers.
The scenario is even more difficult for small and medium new entrant enterprises that see the move as key threats to their existence. Competition is even more difficult to counter because existing organizations are run with government having major interests in them. The near monopolistic nature of the market is less tolerant to emerging competitors since it is very difficult to penetrate.
The last two decades have seen information technology emerge as an unbeatable force and platform for marketing to reach their target consumers with ease. Sun and Wu (2011, p. 340) explain that many financial organizations in the UK and US have therefore turned to direct marketing because it offers them a chance to provide unlimited information to their consumers. In UK, most organizations have developed websites where marketing communicators post their messages for consumers to read.
It is imperative to note that the large number of people having access to internet makes it easy to reach a large number of populations with great ease. Similarly, companies operating in the US use their websites to post information to their clients. It has been particularly successful because the language can be customized for the customers to select what they are comfortable with.
Emails are further used to reach respective consumers that companies have in their mailing lists. Unlike a website where general information is posted, emails are personal and their use is considered to have a great effect to consumers.
Uematsu and Mishra (2011, p. 10) posit that this is because when consumers are sent emails, they easily get the sense of touch to their respective organizations. Besides, like the website, a lot of information can be sent to consumers through attachments, photos, music and even videos.
To sum up, the paper has noted that marketing channels are important parameters that financial organizations use to reach their customers with products and services. Different organizations use diverse marketing channels to perform marketing functions and improve value.
References
Gabisch, J, and Gwebu, K 2011, ‘Impact of virtual brand experience on purchase intentions: the role of multichannel congruence’, Journal of Electronic Commerce Research, vol. 12, no. 4, pp. 302-319.
Kim, S, Hibbard, J, and Swain, S 2011, ‘Commitment in marketing channels: mitigator or aggravator of the effects of destructive acts?’ Journal of Retailing, vol. 87, no. 4, pp. 521-539.
Manzerolle, V, and Smeltzer, S 2011, ‘Consumer databases and the commercial mediation of identity: A medium theory analyses’, Surveillance & Society vol. 8, no. 3, pp. 323-337.
Sun, T, and Wu, G 2011, ‘Trait predictors of online impulsive buying tendency: a hierarchical approach,’ Journal of Marketing Theory and Practice, vol. 19, no. 3, pp. 337-346.
Uematsu, H and Mishra, A 2011, ‘Use of direct marketing strategies by farmers and their impact on farm business income’, Agricultural and Resource Economics Review, vol. 40, no. 1, pp. 1-19.