Why are Brands in Focus
The commercial banking industry has undergone significant change in the past years. “Today, large commercial banks operate in a far more dynamic marketplace. The cost of funds fluctuates rapidly and there is increased competition from both inside and outside the traditional banking industry.“ With growing competitiveness in the banking industry, and similarity of services offered by banks, it has become increasingly important that banks identify the factors that determine the basis upon which customers choose between providers of financial services. Aaker and Joachimsthaler state “in an increasingly crowded marketplace, fools will compete on price. Winners will find a way to create lasting value in the customer’s mind.”2 But considering the national bank market many banks still do exactly this. They compete on price as the latest campaign of the ‘Commerzbank’ shows (3.1% p.a. until the end of February 2005). Although the last years proved that in times of rapid economic change many German banks are not protected. They experienced the decline of profits, the loss of customers towards new financial providers and reacted with closures of branches and the dismissal of thousands of employees. Then they stepped into the war on price advantages without realising that other banks, like the direct banks, strive to a position that allows cheaper banking. Additionally the image of the national bank representatives is actually influenced by discussion about unethical payment in the management boards and some managers were recently under suspect of agreeing to payments that for other managers who did not deserve it in consideration of the general public. The same customers that receive this news every day shall be the customers that trust the bank employees and do business with them. Modern consumers are even more critical and better informed before stepping into banks. By mass media and sources like the internet they are informed or even inform themselves so it is harder to satisfy them because their general knowledge about banking products is better than a few years ago. Besides they learned from their experiences made in the last years. Hence it is necessary to have a tool to be able to persuade and tie consumers in different ways than the price on the current account. The brand can and must fill this gap. Consumers still are human beings and have emotions that can be influenced.
Table of Contents
- 1 Basics
- 1.1 Why are Brands in Focus
- 1.2 Way of Analysis and Work Objectives
- 1.3 Basic Definitions
- 1.3.1 Brand
- 1.3.2 Branding
- 1.3.3 The Brand as a Concept
- 2 Marketing Communication (MC)
- 2.1 Attributes to be Integrated
- 2.3.1 Employees
- 2.3.2 Customers and business partners
- 2.3.3 Databases
- 2.2 Contents of Marketing Communication
- 2.3 Integrated Marketing Communication (IMC)
- 2.4 Corporate Communication
- 2.4.1 Components and Objectives
- 2.4.2 Corporate Branding
- 2.4.3 Corporate Banking
- 3 Building Strong Brands
- 3.1 Brand Identity versus Brand Image
- 3.1.1 Sending Out Brand Identity
- 3.1.2 Brand Image Perception
- 3.1.3 Brand Identity versus Brand Image
- 3.1.4 The Need for Differentiation
- 3.1.5 Tools for Building Strong Brands
- 3.1.5.1 The Differ Model
- 3.1.5.2 The Brand Identity System
- 3.1.5.3 Comparing Differ and The Brand Identity System
- 3.2 Brand Value
- 3.2.1 Brand Added Value
- 3.2.2 Defining Brand Equity
- 3.2.3 Measurement of Brand Valuation
- 3.3 Brand Loyalty
- 3.3.1 The Concept of Brand Loyalty
- 3.3.2 How to create Commitment
- 3.3.3 Building Brand Community
- 3.3.4 Loyalty in the Financial Sector
- 4 Services and Brands
- 4.1 Growing Importance of Services
- 4.2 Services Branding
- 4.2.1 Intangibility
- 4.2.2 The Inseparability of Production and Consumption
- 4.2.3 Heterogeneity
- 4.2.4 Perishability
- 4.3 The Positive 'Vicious Circle'
- 4.4 The Peculiarity of Financial Service Brands
- 4.5 Criteria for Successful Service Brands
- 4.5.1 Focused Position
- 4.5.2 The Importance of the Consistent Message
- 4.5.3 Creation of (New) Values
- 5 Analysis of Financial Suppliers
- 5.1 Daimler Chrysler Bank
- 5.2 Case Study - Postbank
- 5.3 Case Study - Citibank
Objectives and Key Themes
This work aims to analyze the importance of branding within the increasingly competitive financial services sector. It explores how brands can differentiate financial institutions and build customer loyalty in a market where services are often similar. The text examines various branding strategies and their application in the financial industry, using case studies to illustrate practical examples.
- The growing importance of branding in the financial sector due to increased competition and service similarity.
- Strategies for building strong brands in the financial industry, including brand identity, brand image, and brand value.
- The unique challenges and opportunities of branding in the service sector, specifically concerning financial services.
- The role of marketing communication and integrated marketing communication (IMC) in creating and maintaining a successful brand identity.
- Case studies illustrating successful branding practices in different financial institutions.
Chapter Summaries
1 Basics: This introductory chapter sets the stage by highlighting the intensified competition within the commercial banking industry. It emphasizes the shift from price-based competition to the crucial role of brand building in attracting and retaining customers. The chapter underscores the evolving expectations of modern, well-informed consumers and the need for banks to leverage branding to create lasting value and emotional connections beyond mere price advantages. The limitations of price-focused strategies are discussed in the context of recent economic downturns and ethical concerns impacting the public perception of banks.
2 Marketing Communication (MC): This chapter delves into the multifaceted aspects of marketing communication within the financial sector. It explores the essential elements to be integrated into a comprehensive marketing strategy, including employee engagement, customer relationship management, and the strategic utilization of databases. It introduces the concept of Integrated Marketing Communication (IMC) and its significance in creating a unified and consistent brand message across all communication channels. The section on corporate communication details the objectives and components of building a strong corporate brand identity, highlighting corporate branding and its implications for financial institutions.
3 Building Strong Brands: This chapter focuses on the core principles of constructing robust and enduring brands in the financial industry. It draws a distinction between brand identity and brand image, outlining strategies for effectively communicating brand identity and managing brand perception. The chapter introduces models and tools for achieving differentiation, analyzing concepts like brand value, brand equity, and methods for their measurement. A significant part of this chapter is dedicated to the concept of brand loyalty, encompassing strategies to build customer commitment and foster brand community, especially within the financial sector.
4 Services and Brands: This chapter explores the specific characteristics of branding within the service sector, particularly in the context of financial services. It addresses the inherent intangibility, inseparability, heterogeneity, and perishability of services, highlighting the unique challenges these characteristics present for brand building. The chapter explores the concept of a positive feedback loop between strong branding and service quality, demonstrating the symbiotic relationship between successful service delivery and brand reputation. Finally, it outlines the critical criteria for establishing successful service brands, emphasizing the importance of a clearly defined positioning, consistent messaging, and the creation of new value for customers.
5 Analysis of Financial Suppliers: This chapter provides case studies analyzing specific financial institutions such as Daimler Chrysler Bank, Postbank, and Citibank. These analyses exemplify the practical application of the branding concepts discussed in previous chapters. By dissecting the successful strategies (or failures) of these banks, the chapter offers valuable real-world insights into effective brand management in the financial sector. Each case study likely provides a unique perspective on how diverse financial institutions adapt and implement the overarching themes of branding, marketing communication, and customer loyalty.
Keywords
Financial branding, brand equity, brand loyalty, integrated marketing communication (IMC), corporate branding, service branding, customer relationship management, brand differentiation, competitive advantage, financial services marketing, case studies, brand value, brand image, brand identity.
Frequently Asked Questions about "A Comprehensive Language Preview on Financial Branding"
What is the overall topic of this text?
This text provides a comprehensive overview of financial branding, exploring its importance, strategies, and application within the competitive financial services sector. It analyzes how brands differentiate financial institutions, build customer loyalty, and navigate the unique challenges of the service industry.
What are the key themes covered in the text?
Key themes include the growing importance of branding in the financial sector due to increased competition; strategies for building strong brands (including brand identity, image, and value); the unique challenges and opportunities of branding in the service sector, specifically financial services; the role of marketing communication and integrated marketing communication (IMC); and case studies illustrating successful branding practices in different financial institutions.
What topics are discussed in each chapter?
Chapter 1 (Basics): Introduces the intensified competition in commercial banking and the crucial role of brand building in attracting and retaining customers. It discusses the limitations of price-focused strategies. Chapter 2 (Marketing Communication): Explores marketing communication aspects in the financial sector, including employee engagement, customer relationship management, IMC, and corporate communication. Chapter 3 (Building Strong Brands): Focuses on constructing robust brands, differentiating between brand identity and image, and analyzing brand value, equity, and loyalty. Chapter 4 (Services and Brands): Addresses the specific challenges of branding in the service sector (intangibility, inseparability, heterogeneity, perishability) and criteria for successful service brands. Chapter 5 (Analysis of Financial Suppliers): Presents case studies of Daimler Chrysler Bank, Postbank, and Citibank, illustrating practical applications of branding concepts.
What are the main objectives of the text?
The text aims to analyze the importance of branding in the competitive financial services sector; explore how brands differentiate financial institutions and build customer loyalty; examine various branding strategies and their application in the financial industry; and use case studies to illustrate practical examples.
What specific branding strategies are discussed?
The text discusses brand identity, brand image, brand value, brand equity, brand loyalty, integrated marketing communication (IMC), corporate branding, and service branding. It also explores models and tools like the Differ model and the Brand Identity System for achieving brand differentiation.
What case studies are included?
The text includes case studies of Daimler Chrysler Bank, Postbank, and Citibank, analyzing their branding strategies and providing real-world insights into effective brand management in the financial sector.
What are the key challenges of branding in the financial services sector?
Key challenges include the intangibility, inseparability, heterogeneity, and perishability of financial services, as well as intense competition and the need to build trust and loyalty in a sector often impacted by economic downturns and ethical concerns.
What is the role of Integrated Marketing Communication (IMC)?
IMC plays a vital role in creating a unified and consistent brand message across all communication channels, ensuring a cohesive brand experience for customers. This is crucial for building a strong and recognizable brand identity within the financial services sector.
What keywords best describe this text?
Financial branding, brand equity, brand loyalty, integrated marketing communication (IMC), corporate branding, service branding, customer relationship management, brand differentiation, competitive advantage, financial services marketing, case studies, brand value, brand image, brand identity.
- Quote paper
- Steffen Leditschke (Author), 2004, Successful Branding in the Financial Sector, Munich, GRIN Verlag, https://www.grin.com/document/38114
