Final answer:
The Marketing Mix for financial services differs from that of goods in that services are intangible, complex, and require relationship-based marketing with an emphasis on trust and service quality. The inclusion of 'people' as an additional element in the marketing mix for financial services is essential, given the vital role of provider expertise. The complexity of decisions in financial markets, considering the expected rate of return, risk, and liquidity, requires a nuanced approach to marketing.
Step-by-step explanation:
The ways in which the Marketing Mix for financial services differs from the marketing mix for goods such as biscuits or bread are numerous because financial services are intangible, have higher levels of complexity, and generally require a relationship-based approach. Services cannot be seen, touched, or sampled before they are purchased, which means elements like trust, reputation, and service quality become even more critical. Trust is especially crucial because customers are often forced to rely on the provider's expertise and assurances.
Additionally, financial services often involve more complex decisions and a greater level of consumer involvement than purchasing everyday goods. This complexity and the long-term nature of many financial products, like insurance policies or investment accounts, require an additional component of the marketing mix known as people. The competence and behavior of financial service providers can greatly influence customer experiences and perceptions of service quality.
In the context of financial services, there is the concept of deferred consumption, as consumers are deciding when they prefer to consume goods: now or in the future. This introduces more variables to the evaluation of services, such as the expected rate of return, the perceived risk, and the liquidity of the investment. People supplying financial capital must decide how much to save and how to allocate these savings among different investment options.
Understanding these nuances is vital when discussing the Marketing Mix in the realm of financial services. Recognizing the role of trust, service quality, and the importance of the personnel behind the service (people) reinforces why additional elements are crucial when marketing financial services. On the Scale of Market Entities (Product-Service Continuum), financial services are situated more towards the service end indicating a higher importance of intangible factors in their marketing strategies.