MKTG2003 - Marketing for Financial Services - Blog Post 8

The concept/model that interested me the most in Unit 7 (Pricing in Financial Services) was the Price-Quality Matrix. The model consists of 9 strategies with Quality on one side ranging from High Quality to Low and Price on the other side ranging from High Price to Low price. The viable strategies for financial companies in the long run are as follows: Premium strategy (High Price and High quality) - these are firms that sell high quality services and for that reason charge high prices. For example Macqurie Bank gives high quality financial services like loans, investment strategy options etc but also charge give this service only to top credit rating firms thus preventing individual customers from using this service. This maintains a sense of exclusivity. Next comes the 'High and Superb Value' strategies (High quality for medium/low price) - these are firms that also sell high quality services however they are less exclusive and allow for more reasonably exchanges at a decent interest rate. For example Commonwealth, ANZ, Westpac and NAB offer high quality services for interest rates and loan amounts which an individual customer can have access to.  The other viable strategies include Medium Value (Medium quality and medium price), Good Value (Medium quality and low price) and Economy (Low Quality, low price) strategies. There are 3 other strategies that exist namely Overcharging strategy (High Price and Medium Quality), Rip-off (High Price and Low Quality) and False economy (Medium Price and low quality) strategies however these will not last in the long run as customers will become aware of the mispricing of the services.