Developing and Branding Innovative Internet-Based Delivery for Financial Institutions

By Bauer, James L. | The Journal of Bank Cost & Management Accounting, January 1, 2000 | Go to article overview

Developing and Branding Innovative Internet-Based Delivery for Financial Institutions


Bauer, James L., The Journal of Bank Cost & Management Accounting


The growth of the Internet as a marketing medium presents most "traditional" retail financial institutions with significant challenges. A"traditional" financial institution can be defined as one that offers one more products or services to individual consumers or small businesses primarily through physical branch offices or through a field force of agents. The common theme is that marketing, sales and service are conducted through high cost, physical and highly personalized channels. Were the products and services being sold complex, high value, high priced or high margin, could such physical distribution channels be economically justified? However, given the power of the Internet as a low-cost, massmarket marketing, sales and service channel, the growth of the Internet provides a major challenge to those institutions with extensive physical and human distribution channels.

For"traditional" financial institutions, the problem becomes even more complex because of the need to transition from the "old" model of physical distribution and personal service to the "new" model of Internet-based direct marketing and delivery. 'Traditional" products and services have one set of features, benefits, cost structures and pricing. Internet-based products, because of the nature of the delivery channel, have a significantly lower cost and delivery structure. The "traditional" products represent the source of current profits and funding for the development of new products. However, by offering Internet-based products with different pricing structures, the"traditional" institution runs the risk of cannibalizing its existing profit stream as customers migrate to lower-cost offerings. Yet, at the same time, new competitors, unencumbered by the existing infrastructure, can offer lower-cost Internet-based products and steal customers from the traditional competitors. Were these the only issues that needed to be addressed, they would present management with significant challenges. Still another level of complexity is added by the fact that "traditional" financial institutions consider one of their primary assets to be their brand. For most "traditional" financial institutions, the brand has been established over the period of many decades. While the brand may include negative connotations based on such real-life experiences as poor service, inflexible policies, high prices or mistakes, most financial brands retain strong connotations of trust, stability and security. All of these positive attributes of brand ran be of great value to "traditional" financial institutions in developing their Internet-based value propositions and marketing programs.

While branding is clearly important for products and services, it takes on special import for providers of services. With physical goods (for example, soft drinks or athletic shoes) the variability of the product is easier to control than with services. Assuming the product meets the manufacturers' quality control standards and the actual physical product meets or exceeds the consumers' expectations, the brand promise has been met.

The physical product, combined with the consumers' expected experience, as generated by the marketing and advertising, should be complementary. With services (in particular financial services), the brand promise needs to be supported by the actual service experience. This is particularly important in financial services, which, since they involve people's money, are a high-involvement, high emotion product. Consumers' interactions with their financial service providers are generally highly repetitive and long-term, measured in years or even decades. For some products, for example, transaction accounts, there are hundreds if not thousands of contacts or interactions each year. Other products, for example, investments or insurance, may have fewer interactions but have larger economic or emotional value at stake.

The quandary that most traditional financial institutions face with branding on the Internet is the fact that success in the off-line (or physical) world does not represent a guarantee of success in the Internet (or virtual) world. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Developing and Branding Innovative Internet-Based Delivery for Financial Institutions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.