Financial products act as an investment avenue and provide the required financia

l security to the
investors based on the risk-return profile of the financial products.
In the past, traditional financial
products were offered in India through government initiatives by Public Sector B
anks (PSBs) (deposit
account, credit account), Life Insurance Corporation (LIC), and postal departmen
t (recurring deposit,
National Saving Certificate, Kisan Vikas Patra).
However, in recent years with the advent of liberalization
of financial services industry, diverse financial products have been introduced
through participation of
private and foreign entities in addition to the public sector enterprises.
These include products such as
debit and credit cards by banks, open-end and closed-end mutual fund schemes (Ex
change Traded
Funds (ETFs), Index Funds, Systematic Investment Plans (SIP), sector funds, etc.
), life and non-life
insurance schemes (Unit Linked Investment Plans (ULIPs), pension plans, children
education plans, etc.).
It further includes shares and debt securities offered by various entities, inve
stments in which are mainly
facilitated by the brokerage houses. This has led to rising competition through
introduction of innovative
and attractive products, regulatory initiatives and growth in the investor base
along with increased
marketing activities in the financial sector.

The increased activities in the financial sector could be

reflected in the growth in the aggregate deposits with banks, which has increase
d from 16% in FY03 to
24% in FY07. The capital markets are also on the growth trajectory where volumes
and market
capitalization, both have registered growth.
The market capitalization1 to GDP ratio has increased from
22% in FY 03 to 82% in FY07 and the turnover (NSE) has registered a CAGR of 26%
from FY03 to FY
07. Similarly, activities in the mutual funds have also reflected growth with th
e Assets Under
Management (AUM) increasing at a CAGR of 33% during the same time period. The nu
mber of new
mutual fund schemes introduced has risen from 41 in FY01 to a staggering 414 in
FY072.
Further, in the
insurance sector, total life insurance premium collected by all the life insuran
ce companies has grown at
CAGR of 23% from FY03 to FY07. Also, the number of new life insurance policies i
ntroduced in FY07
stood at 208 as compared to merely 20 in FY013.
The introduction of varied products has increased the scope of the financial sec
tor to a very large extent.
Even though these products have been targeted towards urban markets as well as r
ural markets in India,
the rural markets have remained largely untapped (See Exhibit 1). This is mainly
due to the concentrated
distribution activities by some players in the urban markets.
Rural households mainly invest in products such as bank deposits, post office sa
vings and LIC policies
that involve fewer risks as compared to the relatively risky investments such as
mutual funds and bonds
as shown in Exhibit 1.
Further, the investments in these products have been propelled by higher
penetration of these products in rural areas that has been facilitated by growin
g network of the banks,
post offices and LIC branches mostly driven by regulatory policies.
The factors responsible for limited
distribution networks of other investment products could include lack of willing
ness from the service
providers as well as lack of awareness of the rural households, which is further
explained in the note.

Marketing model for products

Product marketing deals with the first of the "7P"'s of marketing, which are Pro
duct, Pricing, Place, and Promotion, Packaging, Positioning & People
Product marketing, as a job function within a firm, also differs from other mark
eting jobs such as marketing communications ("marcom"), online marketing, advert
ising, marketing strategy, etc.
Product marketing in a business addresses five important strategic questions:
[1]What products will be offered (i.e., the breadth and depth of the product lin
e)?
Who will be the target customers (i.e., the boundaries of the market segments to
be served)?
How will the products reach those (i.e., the distribution channel and are there
viable possibilities that create a solid business model)?
At what price should the products be offered?
How will customers be introduced to the products (i.e., advertising)?

Marketing strategy is a process that can allow an organization to concentrate i

ts limited resources on the greatest opportunities to increase sales and achieve
a sustainable competitive advantage.[3] A marketing strategy should be centered
around the key concept that customer satisfaction is the main goal.

Marketing strategy is a method of focusing an organization's energies and resour

ces on a course of action which can lead to increased sales and dominance of a t
argeted market niche. A marketing strategy combines product development, promoti
on, distribution, pricing, relationship management and other elements; identifie
s the firm's marketing goals, and explains how they will be achieved, ideally wi
thin a stated timeframe. Marketing strategy determines the choice of target mark
et segments, positioning, marketing mix, and allocation of resources. It is most
effective when it is an integral component of overall firm strategy, defining h
ow the organization will successfully engage customers, prospects, and competito
rs in the market arena. Corporate strategies, corporate missions, and corporate
goals. As the customer constitutes the source of a company's revenue, marketing
strategy is closely linked with sales. A key component of marketing strategy is
often to keep marketing in line with a company's overarching mission statement.[
4]
Basic theory:
1.Target Audience
2.Proposition/Key Element
3.Implementation

Types of strategies
Marketing strategies may differ depending on the unique situation of the individ
ual business. However there are a number of ways of categorizing some generic st
rategies. A brief description of the most common categorizing schemes is present
ed below:
Strategies based on market dominance - In this scheme, firms are classified base
d on their market share or dominance of an industry. Typically there are four ty
pes of market dominance strategies:
Leader
Challenger
Follower
Nicher
Porter generic strategies - strategy on the dimensions of strategic scope and st
rategic strength. Strategic scope refers to the market penetration while strateg
ic strength refers to the firm s sustainable competitive advantage. The generic st
rategy framework (porter 1984) comprises two alternatives each with two alternat
ive scopes. These are Differentiation and low-cost leadership each with a dimens
ion of Focus-broad or narrow.
Product differentiation (broad)
Cost leadership (broad)
Market segmentation (narrow)
Innovation strategies - This deals with the firm's rate of the new product devel
opment and business model innovation. It asks whether the company is on the cutt
ing edge of technology and business innovation. There are three types:
Pioneers
Close followers
Late followers
Growth strategies - In this scheme we ask the question, How should the firm grow? .
There are a number of different ways of answering that question, but the most c
ommon gives four answers:
Horizontal integration
Vertical integration
Diversification
Intensification
A more detailed scheme uses the categories[6]:
Prospector
Analyzer
Defender
Reactor
Marketing warfare strategies - This scheme draws parallels between marketing str
ategies and military strategies.
Strategic models
Marketing participants often employ strategic models and tools to analyze market
ing decisions. When beginning a strategic analysis, the 3Cs can be employed to g
et a broad understanding of the strategic environment. An Ansoff Matrix is also
often used to convey an organization's strategic positioning of their marketing
mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined s
trategy.
There are many companies especially those in the Consumer Package Goods (CPG) ma
rket that adopt the theory of running their business centered around Consumer, S
hopper & Retailer needs. Their Marketing departments spend quality time looking
for "Growth Opportunities" in their categories by identifying relevant insights
(both mindsets and behaviors) on their target Consumers, Shoppers and retail par
tners. These Growth Opportunities emerge from changes in market trends, segment
dynamics changing and also internal brand or operational business challenges.The
Marketing team can then prioritize these Growth Opportunities and begin to deve
lop strategies to exploit the opportunities that could include new or adapted pr
oducts, services as well as changes to the 7Ps.