THE EFFECTIVENESS OF STRATEGIC MARKETING IN NIGERIAN BANKS (A CASE STUDY OF SOME SELECTED BANKS)
ABSTRACT
The research project focuses on the effectiveness of strategic marketing in Nigerian Banks. Three selected banks namely All States Trust Bank. Citizens bank and Afribank Plc were used as case study. Some of the objectives of the study included;
(i) To determine whether the use of strategic marketing strategies enable banks to achieve financial intermediation objectives.
(ii) To find out the strategic marketing tools banks use most in building/sustaining customer confidence in the banking industry.
(iii) To also ascertain whether banks’ adoption of strategic marketing tools has increases customer patronage.
(iv) And to, find out, if the adoption of strategic marketing principles builds a favourable corporate image of banks.
Literature on strategic marketing topics, customer relations, banking industry was extensively reviewed. Both primary and secondary data were used for the study. Initially some high ranking officers of the three banks were interviewed and information obtained from them quite useful in pursuing certain area of inquiring and which later formed the basis for the construction of the questionnaire and formulation of hypothesis.
For the methods of data analysis, percentages, tables and chi-square were used. Chi-square was used in testing of hypothesis. The findings made include:
(1) The use of strategic Marketing strategies makes achieve their individual financial intermediation objectives.
(2) Adoption of marketing public relations tools in the operation of a bank helps her in build customers confidence on the banking industry.
(3) Strategic marketing also helps in the increase of customer’s patronage etc.
It was concluded that, bank in carrying out her intermediation services, it needs to employ result-oriented marketing strategies, such as customizing her services/payment, introduction of innovative products etc. Bases on these same recommendations were made.
TABLE OF CONTENTS
Title Page…………………………………………………………… i Certification……………………………………………………… ii
Dedication………………………………………………………….. iii
Acknowledgement……………………………………………….. iv
Abstract………………………………………………………… v
Table of Contents vii
CHAPTER ONE: 1
Background of the Study……………………………..1
Statement of the Problem……………………………2
Objectives of the Study……………………………….3
Hypotheses Formulation……………………………..4
1.5 Significance………………………………………….. 4
1.6 Scope of the Study…………………………………. 5
Limitation of the Study………………………………5
Definition of Terms……………………………………5
References……………………………………………. 7
CHAPTER TWO: Literature Review 8
2.1 Introduction………………………………………….. 8
History of the Banking Industry in Nigeria……………8
The Banking Industry in Nigeria: Review of Major Contextual
and Theoretical Underpinning………………………… 9
Understanding the Application of Marketing Principles in the Banking Industry……………………………………………14
Strategic Marketing Objectives of Banks……………………20
Strategic Marketing Planning (SMP)………………………..21
2.7 Services of Banks…………………………………………… 22
Marketing in Nigerian Banks25
Marketing Concept in the Banking Industry…28
Tips for Front – Line Officers on How to Relate with the Customers and Other Key Publics at the Branch Level30
References 33
CHAPTER THREE 37
Research Methodology…37
Introduction37
Research Design…37
Population of the study…37
Sampling and Sampling Techniques38
Data Collection/Gathering Instruments38
Reliability/validity of Research Instrument39
Methods of Data Analysis……………………………………39
Methods of Data Analysis…………………………………..40
References…………………………………………………… 41
CHAPTER FOUR 42
Data Presentation and Analysis42
Introduction42
Allocation of Questionnaire ad rate of returns42
Analysis of Bio-Data of Respondents…………………………
Analysis of Relevant Questions43
Testing of Hypotheses49
CHAPTER FIVE 58
Summary of Major Findings, Conclusion and Recommendations 58
Summary of Major Findings58
Conclusion…58
Recommendation…59
Suggestions for Further Research60
Bibliography… 61
Appendix 1 64
Appendix 11… 65
CHAPTER ONE
BACKGROUND OF THE STUDY
Given the trend of every aspects of economic activities globally and particularly Nigeria, it is imperative for business entities to adopt measures that should strategically reposition them so as to remain afloat. With much increase in the level of customer awareness in response to their needs and wants or satisfaction, firms should also discuss their old marketing strategies that are not result-oriented. They should acknowledge the paradigm shift from old marketing concept to the new marketing concept, which is a customer driven, technology-driven era in modern marketing management (Johnson, 1990:48).
One of the industries which have gradually started repositioning its operation to suit customer’s needs and wants is the banking industry Nigerian banking system is characterized by internal and external competition. The upsurge of new banks created room for innovation and further market sharing. A proxy to determine the extent of competition is the intensity of advertising by banks in recent times. The system has witness sophistication in the style and designing of new financial products (Anyafo, 1999:137) concluding the charting of the prospects of the banking industry in Nigeria for the 1980s and beyond (Vincent, 1980:19) envisaged that the service demanded of the banking industry will ground more sophisticated in response to change in the nature of the business they are called upon to finance and as their customers become more knowledgeable and discriminating.
A few years ago, bank did not see the need for providing adequate service and encouraging patronage. It is a common knowledge that the Nigerian banking system has over the nineteen-decade and part of 20th century been experiencing a crisis of confidence a situation in which
customers doubt the integrity of the banking system in delivering the financial intermediation services under such circumstances has strategic marketing any role towards the restoration of mutual confidence between the operators in the banking system and the customer public and shareholder publics.
The issue is that a financial system thrives on public confidence and the erosion of that confidence result to disintermediation thereby undermining the ability of the financial system to perform its essential role of savings mobilization. The nature of banking service is that, bank have to build up an image of respectability, capability and reliability through satisfying their customers.
Today, with the increase in the level of awareness of Nigerians towards banking operations banking institution face unusual challenges. The challenges are becoming stronger and tougher at the water of the present millennium. In the light of the above and more, a bank has to engage in marketing activities if it is to gain a fair share of the market. Through marketing its service, the constantly informs and reminds its customer about itself in order to build a friendly corporate.
STATEMENT OF THE PROBLEM
Banks are custodians of the customers’ wealth. They provide financial service; they provide peace of mind to the customer. As a result of this, banks marketing plans should ensure that the customer is well informed of its plans, problems and its solution to such problems.
Marketing activities especially strategic marketing, therefore should almost be the main pre-occupation of any bank. The main problems confronting some banks were as follows:
a. The implementation of strategic marketing strategies.
b. The choice of selecting the best strategic marketing strategies by
banks
c. The adoption of the best strategic marketing principles. The questions then are:
1. Do banks use more of strategic marketing strategies in achieving financial intermediation objectives?
2. Which of the strategic marketing strategies do banks employ most in building sustaining customers confidence in the banking industry?
3. Has the banks adoption of strategic marketing principles tools increased customer patronage?
4. Does adoption of strategic marketing principles help in building a favourable corporate image of banks?
OBJECTIVES OF THE STUDY
The objectives of the study include:
i. To determine whether the use of strategic marketing strategies enable banks to achieve financial intermediation objective.
ii. To find out the strategic marketing tools banks use most in building/sustaining customer confidence in the banking industry.
iii. To, also ascertain whether banks adoption of strategic marketing tools has increased customer patronage.
iv. And, to find and if the adoption of strategic marketing principles builds a favourable corporate image of banks.
v. And, finally to make appropriate recommendation based on our results.
HYPOTHESES FORMULATION
The following have been put forward for testing
1. H0: The use of strategic marketing strategies does not enable banks achieve their financial intermediation.
H1: The use of strategic marketing strategies enables banks achieve their Financial intermediation objectives.
2. H0: Banks that adopt marketing public relative tools are not likely to build/sustain customer’s confidence in the banking industry.
H1: Banks who adopt marketing public relative tools in their operation are likely to build/sustain customers confidence in the banking industry.
3. H0: Banks adoption of strategic marketing principles does not increase customer’s patronage.
H1: Banks adoptions of strategic marketing principles increase customers’ patronage.
SIGNIFICANCE OF THE STUDY
The era of set down and wait for customer or arm chair kind of banking has been over taken by challenges in the industry. A bank with the state-of-the-art technologies and service may still not make such heavy profits if it does not engage in proper marketing of its products cum services.
Therefore, the study is significant as it will benefit banks, customers and other financial publics in the following ways: Banks through the findings of the study may be able to build more confidence on customers. They also know more ways of performing financial intermediation roles or objective. Customers will also benefit through the findings of the study as banks will now reposition themselves as reliable and responsive
organization to do business with. The other financial publics will be able to fish out indices for the evaluation of the banks performances or corporate failures.
SCOPE OF STUDY
The scope of the study in within the confines of strategic marketing and its effects in the banking industry. Three banks are used as case study namely All States Trust Bank Limited (ASTB). Afri Bank Plc and Citizens International Banks Plc. They are sampled from Port-Harcourt, Rivers State.
LIMITATION OF THE STUDY
This study has been limited by a numbered factor which is as follows:-
Time: Time is a hunting factor as the students are given limited period to complete and submit his project
Finance: It is another major problem, as the researcher has to travel to various places in search of materials it sudden rise in the transport fare in the country.
Problem of Data Collection: Some people find it difficult to release one data needed by the researcher, although some of them co- operated to a great extent.
DEFINITION OF TERMS
In order to make work a bit clearer, certain terms will be defined:
1. BANK: Any person who carries on banking business and includes a commercial bank, a mortgage bank acceptance house a discount house, a discount house and other financial institutions.
2. MARKETING: The sensing and serving of customers needs through an exchange relationship aimed at creating value in from of profit; and satisfaction to the consumers.
3. STRATEGY: This is a technique developed to gain advantage over the competitor; it is a tactical plan for carrying out formulated policies, to achieve a set objective.
4. PROMOTIONAL ACTIVITIES: These are various promotional techniques used by marketers. They are called promo tools or elements of the promotion mix and include advertising, person selling, ales promotion and public relations.
REFERENCES
Anyafo, A.M.O (1999), Nigerian Financial Marketing and Institutions: An Anatomical Analysis of Issues in Money and Banking in the Nigeria Financial System, Enugu: B & F Publications, UNEC.
Burden, P.A. (1996), General Banking, New York: Mc Milliam Inc. Cole, Lucky (1997), Banks and Public, Doubling: Thomas Hill Inc. Johnson, Mc Potter (1990), Managing Relationship, Bristo: Site Inc.
Vincent, O.O. (1980), The Banking Industry In the 1980s, Management in Nigeria: Journal of Nim, Vol, No. 9 September.
CHAPTER FIVE
SUMMARY OF MAJOR FINDINGS, CONCLUSION AND RECOMMENDATIONS.
SUMMARY OF MAJOR FINDINGS
Based on the analysis and interpretations of data the following findings were made:
1. Consistent use of strategic marketing strategies makes banks achieve their individual financial intermediation objectives.
2. When banks adopt marketing public relations tools in their operation there is every likely that customer’s confidence on the banking industry is built or sustained.
3. It was also found out the banks’ adoption of strategic marketing principles increase customer’s patronage.
4. Banks use persuasive strategic marketing communication strategies such as public relations, advertising, promotion, etc in carrying out their saving or fund mobilization.
5. Among the needs of customers, total satisfaction is rated as highly needed.
CONCLUSION
Based on the finding of the study, it can be seen that strategic marketing has strong place in the operations of banks. Most especially, strategic marketing tools are needed in the marketing of financial services and products
Banks who have recognized the paradigm shift from old marketing of selling to the market to the customer concept, which emphasizes customer satisfaction will benefit in the long run. Given the volatile
nature of banking environment coupled with competition marketing concepts and principles become the only answer that can help banks to remain a lot in business.
In carrying out her intermediations services’ a bank needs to employ resulted-oriented marketing strategies, such as customizing services/products, bringing in more innovations and above all retraining her staff especially, the font office staff (cashier) in the new techniques of scouting for customers. Finally, we conclude that marketing strategies have been recognized world over as among the antidote that can represent a bank for a greater test ahead. Its contribution cannot be over-stressed.
RECOMMENDATION
The following recommendations are made in the instance of the findings and conclusion:
1. Banks which have not really explored the advantages of strategic marketing in the performance of financial inter-mediatory role should do so. The earlier the better because the business in which the banking industry operates is faced with stiff competition.
2. Banks should confine to adopt sound and ethical marketing practices in the savings mobilizations. They should also adopt the new marketing concept, which aims at satisfying customer needs at profit.
3. Both bank executives and cashiers should always be retrained to meet up with marketing challenges of banking services.
4. Total quality service or product should be the hallmark of the banking industry’s total market offerings. If there is no quality in the service delivery of a bank, there is every prospect that the customer will not be this satisfied. They may likely turn their back against that particular bank.
SUGGESTIONS FOR FURTHER RESEARCH
As result of the constraints earlier mentioned the researcher could not sample one quarter of banks operating in Nigeria, therefore, researchers who are interested in going beyond what has been done here should consider these areas.
1. The application of the new advertising in the achievement of financial intermediation objectives of banks.
2. The application of the total quality concept in the operations of banking services
3. To the present study should be enlarge in order to accommodate more banks as case studies.
.