Marketing and Regulation Mutual Fund

8/4/2019 Marketing and Regulation Mutual Fund

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Marketing and distribution ofMutual Funds


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1.Introduction2.Market analysis3.Factor affecting marketing of mutualfund4.Segmentation5.Targeting (10 p)6.Positioning7. Example


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Mutual fund serve as an instrument of capitalformation and financial intermediaries to bridgebetween the supply and demand of capital in themarket

They relieve the investor of problem of investing their

saving and dealing with them effectively as well asensuring a low risk steady return , liquidity andcapital appreciation

Mutual fund also attract foreign capital flow into thecountry and secure profitable investment avenueabroad for domestic saving thought the opening of

offshore fund in various foreign sectors All of these factors have necessitated the need for a

sophisticated investment instrument for growth andsafety.


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The response of these has been an aggressivemarketing of mutual fund.

For successful mutual fund marketing mustcreate confidence among potential investor

and strengthen their desire to invest theirmoney with a particular fund

Additionally ,organization image ,visibility ofoperational policies and quality of

management form and indirect butnevertheless important part of mutual fundmarketing.


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R = Research STP = Segmentation, targeting and

positioning

MM = Marketing mix I = Implementation

C = Control

R IM cTP


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PROBLEM DEFINATION GOAL SETTING

MARKET SEGMENTATION

CUSTOMER ANALYSIS


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Market analysis is


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Distribution The act of spreading or apportioning.

The commercial activity of transporting and

selling goods and services from one producerto consumer.

Channel:

Any distinct part of distribution system

through which a supplier reaches a customer.


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1.Government policy2. Inflation

3. Strong competitor

4. Market volatility


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Demographical

PsychographicalBehavioral

Geographical

states, region, cities,density &climate

Age, sex, income ,

size of family,occupation&education.

social class,personality &life style.

knowledge,attitude &response


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Education Earning Years Post Retirement Years

Phase I Phase II Phase III

Age- 22 yrs Age- 60 yrs

Marriage

Child birth

Childs Education

Childs Marriage

Housing

22 yrs 38 yrs 10- 20 yrs


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60Retirement

40Middle Age

27Young Married

22Young Independent

Earnings

Consumption

Savings

All individuals have a finite period to save for their investment goals


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1. Knowing the perception, attitudes andunderstanding of investors. understanding the profile of investors. Awareness and attitude towards various modes of

saving.

Motivation behind the investment.

2. Market growth and size.3. Analyzing the market. production of economy. Rate of saving. Distribution of investor.


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The part of the qualified available market thecompany decide to pursue.

Target market

produ

ct

Pric

e

Plac

e

promoti

on

people

Physicalevidence

Processperforman

cepartner

perception


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Product line to be offered, quality, design,range of service

Branding-selection of product name,brandpolicy


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Entry Load : Nil

Exit Load** : For redemption/switch-out of units

within 365 days from the date of allotment: 1.00%of applicable NAV. For redemption/switch-out ofunits after 365 days from the date of allotment: Nil.

Exit / Entry Load is NIL for units issued in Bonus &

Dividend. Reinvestment.


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AMC

TIER AGENCIESBANKSBROKERDIRECT

MARKETINGINTERNET

Institutional

brokerIFAS

LARGECORPOR

ATE

CORPORATE

HNWCUSTO

MERS

RETAILCUSTO

MERS


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Promotion is communicating with the public inan attempt to influence them toward buying

your products and/or services

Advertising(electronic and print media)

Campaign

Through existing customer

Education programs


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InvestorsEmployee of the organization

Fund mangers


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To shaping first impression

Managing trust

Facilating quality of serviceChanging the image

Socializing employee

Example-Scheme, APPREANCE

Behavior, ARCHITECTURE COLOUR


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It assures service availability and consistentquality.

It should be customer friendly


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Entry Load - 0% Exit Load - If redeemed bet. 0 to 1 Year it is

1%.


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Frontend load or sales charge Back-end load 12b-1 fees No-load funds Share classes


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Advertisement should be true ,clear and fair. The sale offers should contain only information

which is included in current prospectus of funds

Advertisement should not be so framed so as

exploit the lack of experience of investors.Advertisement should not contain information

,the accuracy of which depend on an assumption.

If an advertisement guarantees a minimum return

it should mention the resource of guarantee


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The mutual funds should not use any unethical meansto sell, market or induce any investor to buy theirschemes.

maintain high standards of integrity and fairness in alltheir dealings

It was made mandatory for all distributors and agentsof mutual funds,, to pass the AMFI certificationexamination (SEBI circular dated September 25,2001)

the mutual funds shall monitor the activities of their

agents/distributors to ensure that they do not indulgein any kind of malpractice or unethical practice whileselling/marketing mutual funds units.


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Take necessary steps to ensure that the clients interest is protected. Adhere to SEBI Mutual Fund Regulations and guidelines related to

selling, distribution and advertising practices

Provide full and latest information of schemes to investors in theform of offer documents, performance reports, fact sheets, portfolio

disclosures and brochures

Highlight risk factors of each scheme, avoid misrepresentation andexaggeration, and urge investors to go through offer documents/keyinformation memorandum before deciding to make investments.

Avoid commission driven malpractices such as

that all investor related statutory communications (such as changesin fundamental attributes, exit/entry load, exit options, and othermaterial aspects) are sent to investors reliably and on time.


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SEBI had done away with entry load in cases where theinvestors directly invested in mutual funds without goingthrough an agent or a distributor.

Who will benefit? Of course, the investors! How? Because now that there will be no entry load on the money

invested, all the money would be used to buy mutual fundunits unlike earlier when 2.25 per cent were lopped offand the rest invested

Distributors will get a fee for their advice and hencedistributors will have to give the right advice rather thanpromoting schemes, which offer them superior brokerage

Who loses?


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The retail distributors, the fund houses to some extent,

and the relationship managers of banks who made aneat commission out of their advice to investors onwhich funds to buy and sell.

How? They will now have to negotiate with the clients and

decide on a fee (smart investors can negotiate this totheir own benefit) whereas initially they used to get afixed brokerage from the fund house.

The retail distributors may reduce or may entirely stopselling mutual funds as it may no longer be lucrative tothem. This will hamper the business of fund houses.

Why SEBI removed it?

To increase investment in mutual funds. Government was not getting any direct benefit from

the entry load charged.

Marketing and Regulation Mutual Fund

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