Exercise 2: Are financial services products or services?

Financial products are neither products nor services but have elements of each.

Unlike many services, the production of many financial products can be separated from its consumption. A checking account is "manufactured" in advance of its sale and subsequent use.

Financial services are not perishable and this makes it easier for the financial provider to manage supply and demand.

Services are typically created and delivered one at a time while products are mass produced. Many financial products are mass produced and mass marketed like savings accounts, car loans and mortgages.

Financial services are not entirely products because they are intangible.

Financial products have low cost of entry. There is little cost to manufacture or distribute a financial product. There may be legal restrictions and expenses associated with marketing but the capital costs of creating new financial products are low.

Financial products lack exclusivity. In contrast, new manufactured products can be protected by patents or trademarks to prevent competitors from using the same formulation.

Financial products are rapidly marketed. In contrast with manufactured goods that need to build models, test integrity o design, reengineer prototypes before they are test-marketed.

What product is this ad trying to sell?

What type of client is this ad targetting?

Who would pay attention to this ad?
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