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Title: New consumer financial services : the determinants of success and failure
Author: Storey, Christopher D.
Awarding Body: University of Manchester
Current Institution: University of Manchester
Date of Award: 1995
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The aim of this research was to close gaps in the literatures on new product development and on the marketing of services. This thesis presents the results of a survey into the development, launch and marketing of a large sample of typical new products introduced into the consumer financial services market within the United Kingdom. Previous research into new product success concentrates on product-related benefits (the revenues, sales, profit or market share achieved). However evaluating new products concentrating solely on product benefits ignores half of the potential benefits to the firm. The other benefits reflect a wider set of issues such as improved competitive advantage and creating a window of opportunity. The research identifies three underlying dimensions of performance for new financial services. The first was sales performance, which includes straightforward sales, sales growth and market share measures. Enhanced opportunities captures less tangible measures such as enhanced image and opening up windows of opportunity (these are termed company benefits). The third performance dimension was profitability, which shows that profit has both short-term and long-term aspects. A model of new product success is developed which embraces the concept of the augmented service offering (ASO). The ASO is the service core, its augmentation and the marketing which supports the service offering. The overall success of a new service is determined by the extent to which it achieves product-related benefits and company-related benefits. These benefits are a consequence of the ASO interacting with the marketplace. This thesis shows that the ASO, being the outcome of the new product development (NPD) process, is the key to success. Good practice in development on its own is insufficient to achieve success. The research demonstrate the complementary and mutually supporting role of the components of the ASO for new service performance. Whilst the constituents of the ASO are examined in detail, no one constituent is seen to be of overriding importance. Contrary to previous research into physical new products, the key success factor was not found to be product advantage. In new services this is only of secondary importance as financial service institutions face difficulties in differentiating their core product. However, one aspect of the basic service, namely product quality, was found to be important for performance. A further aspect of quality was also found to be important. This is the quality of the service delivery (the service experience), part of service augmentation. An additional element of service augmentation was found to be a key success factor: effective communications (ie. advertising and promotion creating awareness, creating customer understanding and creating a strong image). Aspects of the final part of the ASO, ie. marketing support, are also related to performance. Of particular importance are the people in the service process (ie. their skills and expertise), distribution strength (ie. the access of the sales force) and knowledge of the marketplace. A final part of the research identified the strategies employed by financial service companies to market specific products. The mix of distribution routes employed in the marketing of UK consumer financial products has been found to constitute four strategies. Three of which are multi-channel systems: balanced, arm's length and networks. The final strategy identified consists almost entirely of the use of intermediaries. It was found that no one strategy was clearly the best, but further analysis presented strong evidence to suggest that the adoption of multiple channels of distribution is associated with more success.
Supervisor: Easingwood, Chris Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available