1. Making Microfinance Work Managing for Improved Performance Version May 2007 Markets and Marketing Section II

2. Making Microfinance Work Managing for Improved Performance Marketing: A 7-Step Process 1.Select a target market 2.Identify what the target market values 3.Develop profitable products that are valued by the target market 4.Communicate your products’ value to the target market 5.Deliver your products in a way that maximizes their value 6.Monitor the delivery to learn from both client and institutional experiences 7.Make adjustments that increase the value for both clients and the institution 7.2

3. Making Microfinance Work Managing for Improved Performance Version May 2007 Communicating Value Module 7

4. Making Microfinance Work Managing for Improved Performance Training Objectives By the end of this session, you will: Articulate the rationale for market segmentation Construct a marketing mix Use the 8Ps to facilitate competition analysis Design components of an effective marketing message Analyze a marketing communications mix to ensure its appropriateness and cost-effectiveness. 7.4

5. Making Microfinance Work Managing for Improved Performance Ideas for Segmenting Your Market  Demographics  Geographic variables  Type of business or economic sector of employment  Size of business  Level of income  Source of income  Financial service needs  User status  Usage frequency  Usage intensity  Attitude toward a product or institution  Benefit sought  Psychographic variables 7.5

6. Making Microfinance Work Managing for Improved Performance Designing Your Marketing Message THINK… 1.Benefits 2.Brand 7.6

7. Making Microfinance Work Managing for Improved Performance What are you actually selling? 7.7

8. Making Microfinance Work Managing for Improved Performance Turning Features into Benefits Product designCustomer solution PriceClear, Competitive Cost Physical evidenceCleanliness, Creativity PromotionCommunication PlaceConvenience, Comfort PositioningCommitment, Consistency PeopleCourteous, Competent Care ProcessConcise, Confidential 7.8

9. Making Microfinance Work Managing for Improved Performance Designing Your Marketing Message THINK… 1.Benefits 2.Brand 7.9

10. Making Microfinance Work Managing for Improved Performance What is a Brand? A brand is the essence of what your institution stands for in the market. It’s your organization’s personality. It is a reflection of who your organisation is, what products it offers and how it serves its clients. It differentiates you from the competition. 7.10

11. Making Microfinance Work Managing for Improved Performance What is a Brand? Brand Customer Company A Bridge… 7.11

12. Making Microfinance Work Managing for Improved Performance Analysing a Brand 7.12

13. Making Microfinance Work Managing for Improved Performance 7.13

14. Making Microfinance Work Managing for Improved Performance The Value of a Brand Brands are often thought of as logos or taglines, but they are much more than that… Jenny Hoffmann, Managing Director of TEBA Bank: “I think the main benefit that branding has brought is a clarity of expectations, both of ourselves, aligning the look of the organization, the way we present ourselves, and our products, to our vision, and our mission and our values, both for our customers and for our clients.” CocaCola’s overall stock market value is $164billion, but the actual value of the company is $6.6 billion. Thus $158 billion (96.3%) = brand value. 7.14

15. Making Microfinance Work Managing for Improved Performance A solid, attractive brand can provide… Instant recognition Differentiation Credibility Warranty Facilitated promotion Word-of-mouth marketing Goodwill Unifying focus Increased profitability 7.15

16. Making Microfinance Work Managing for Improved Performance What Is Your Brand? 7.16

17. Making Microfinance Work Managing for Improved Performance Sales Promotion Advertising Personal Selling Direct Marketing …must give consistent, clear, compelling messages Public Relations Marketing Communications Mix 7.17

18. Making Microfinance Work Managing for Improved Performance Personal Selling Face-to-face sales Most direct, most personal and most commonly used microfinance sales technique Examples? 7.18

19. Making Microfinance Work Managing for Improved Performance Advertising Aims to generate demand for products through non face-to-face communication channels Indirect sales strategy Can reach more potential customers more quickly at a lower cost than personal selling Examples? 7.19

20. Making Microfinance Work Managing for Improved Performance Direct Marketing Directly links an MFI with potential customers Has most impact when applied by institutions that have a database which allows market segmentation and analysis Examples? 7.20

21. Making Microfinance Work Managing for Improved Performance Sales Promotions Short-term activities designed to boost sales for a limited time or entice new customers to experiment with the MFI’s products Typically time-bound, activity-based and/or segment focused  Open an account before…  Bring in X customers…  Special rates for students… Examples? 7.21

22. Making Microfinance Work Managing for Improved Performance Public Relations Deliberate, planned and sustained efforts to establish and maintain positive relationships between an MFI and the public Helps the public to better understand the MFI Demonstrates that the MFI cares about the community in which it operates Examples? 7.22

23. Making Microfinance Work Managing for Improved Performance Which components of the MCM are being used here? MoneyGram in Uganda ran a competition with local radio stations that required people to write an essay in less than 50 words: “Why I should win Ush. 1,000,000 to educate my kids” It generated lots of interest, discussion and free publicity for MFIs linked to MoneyGram. After the month-long competition their business had grown 75%. 7.23

24. Making Microfinance Work Managing for Improved Performance Training Objectives By now, you should have: Articulated the rationale for market segmentation Identified your MFIs value position Used the 8Ps to facilitate competition analysis Practiced converting product features into benefit statements Explored the message your brand is communicating Assessed the cost-effectiveness of a marketing communications 7.24

25. Making Microfinance Work Managing for Improved Performance Main Messages 1.Communicate value in different ways to different market segments. 2.The middle of the value triangle is like the Bermuda triangle—position your organisation in a corner or on the side. 3.Use the 8 Ps to build customer-responsive products. 4.An MFI’s brand should communicate value. 5.When designing a marketing strategy, consider the five components of the marketing and communications mix. 7.25