APPLICATION
OF MARKETING CONCEPT IN COMMERCIAL BANKING AND IT EFFECTIVENESS IN CONSUMER
SATISFACTION
(A CASE STUDY OF GT BANK PLC)
ABSTRACT
The primary objective of this research work is to
carry out proper investigation on “the application of marketing concept in
commercial banking and its effectiveness in consumer satisfaction” at Guaranty
Trust Bank Murtala Muhammed Square Branch Kaduna. To highlight the result of
the investigation of the subject matter. Background, statement of general
problem, purpose, significance, research question and delimitation of the
study. Chapter two is the literature review relevant material were used in
order to acquire full information about marketing, the marketing concept. Nigeria
financial system and banking. Author whose book were consulted in this research
work were acknowledge, chapter three deals with the research methodology,
primary data were gathered through the utilization of personal interview and
detailed questionnaire. The total population size of Guaranty Trust Bank
Management/staff in the branch is 40 out of which 15 were randomly selected and
administered questionnaire. 20 respondent of the total customers population
were also randomly selected. All the respondents responded to the questions
asked which were later tabulated. The simple random sampling is the method
employed by the researcher in determining the sample size, the statistical
technique used in testing the hypothesis was simple percentage method
justification of samples, sampling method employed etc. were all discussed
extensively. The hypothesis tested is;
Ho: Marketing concept has no effect on the customer’s
satisfaction.
H1: Marketing concept has effect on the customer’s
satisfaction.
Chapter four deals with data presentation and
analysis; all the data collected were analyzed in this chapter, result obtained
from the data and proof of hypothesis was accepted often careful analysis of
the alternate hypothesis, this chapter result obtained from the data and proof
of hypothesis was accepted often careful analysis of the alternate hypothesis.
It proved that marketing concept. Application has effect on consumer
satisfaction. Finally chapter fiver contain the summary of the major finding of
the research and recommendation were made based on conclusion. The
recommendation include A well coordinated marketing planning programme must be
adopted by Guaranty Trust Bank to ensure that all departments are giving total
participation towards customer’s satisfaction. All effort should be directed
towards reducing customer waiting time to the barest minimum which is highly
important. These can assist management in marketing their products effectively
while ensuring customer satisfaction.
TABLE OF CONTENTS
Title page i
Declaration ii
Approval page iii
Dedication iv
Acknowledgement v
Abstract viii
Table of contents x
CHAPTER
ONE: INTRODUCTION
1.0 Introduction 1
1.1 Background of the study 3
1.2 Statement of the study 5
1.3 Purpose of the study 7
1.4 Significance of the study 9
1.5 Research questions 11
1.6 Statement of Hypothesis 12
1.7 Delimitation of the study 12
1.8 Definition of terms 13
CHAPTER
TWO: LITERATURE REVIEW
2.0 Introduction 16
2.1 Historical Perspective of Research
Area 16
2.2 Review of current Literature 18
2.2.1 Marketing Concept 22
2.2.2 Contrast Between sales
and Marketing Concept 23
2.2.3 An Overview of
Nigerian Financial System 24
2.2.4 Classification of the
Nigerian Financial System 25
2.2.5 The Role of Marketing
in Nigerian Financial 26
2.2.6 Marketing of Banking
Service in Nigeria 27
2.2.7 Application of
marketing mix in the Banking Industry 28
2.2.8 Total Quality
Management 41
2.2.9 Customer Satisfaction 46
2.2.10 State of the Banking Industry 48
CHAPTER
THREE: RESEARCH METHODOLOGY
3.0 Introduction 53
3.1 Area of study 54
3.2 Research design 54
3.3 Population of the study 55
3.4 Sample and sampling technique 55
3.5 Instrument for data
collection 56
3.6 Administration of the
instrument 58
3.7 Method of data analysis and
presentation 58
CHAPTER
FOUR
4.0 Introduction 59
4.1 Characteristics of
respondents and classification 59
4.2 Data presentation and
analysis 61
4.3 Answer to research question 75
CHAPTER
FIVE
5.0 Introduction 78
5.1 Summary 78
5.2 Conclusion 80
5.3 Recommendations 81
Bibliography 84
Appendix/Questionnaire 86
CHAPTER
ONE
1.0 INTRODUCTION
Marketing concept is a customer oriented philosophy which states that customer’s
satisfaction is the economic and social justification of firm’s corporate
existence. These philosophies hold that the company should be customer
oriented. Strive for profitability. Sales volume and coordinate all its
marketing activities. Marketing management however is the vehicle that business
uses to capture the marketing concept.
Kurtz (1992. Pg 3) defines marketing management as a unifying approach
marshalling and directing the total resources of a business firm towards the
determination and satisfaction of a customer and consumer wants in a way
planned to enhance the firm overall profit position.
Where the marketing concept is recognized, there is a total change in
the basic philosophy of business. Instead of trying to sell what can be
produced. Management produces what is really needed by the customer though
profit criterion is there. The element of serving and keeping the customer
satisfied are equally important to the company. By realizing that it is not
merely selling a particular product but particular need of a customer is
satisfied effectively. The essence of banking services marketing is to provide
the desired satisfaction to customers and make the business of banking maintain
a sound footing and sustainable growth in the short and long run.
The current industrial, commercial and technological metamorphosis with
increased competitive pressure. Customer expectation and other unstable
environmental faces are clear indications that a business either adopts
marketing concepts philosophy or goes out of existence. The recent
proliferations of banks in Nigeria
denote a more intense competition in which only those capable of adopting
dynamically would be able to maintain a sustained growth and profitability. The
present economic changes in Nigeria
no doubt, pose greater challenges to commercial banks. These trends of changes have
made banks to realize that their customers can no longer just be treated in an
off head manner. Banks therefore employs marketing experts who actually go out
and solicit customers patronage and loyalty. Banks now realized the importance
of maintaining close relationship with customers and getting the service closer
to them as possible. Most banks set up marketing research department or as the
case maybe in order to gather more facts about customer needs, attitude,
motives and preference.
1.1 BACKGROUND
OF THE STUDY
This study tries to examine the contribution of marketing concept
philosophy and the marketing mix elements in the effort of satisfying
customer’s need effectively in commercial banking. The orientation of banking
service started with production concept which believes that customer would buy
the services offered to them by banks provided it is accessible and affordable.
Thus banks thinks of offering useful services and open out more branches to
make their service accessible.
Later the bank moves to product concept under the assumption that
customers would buy such services that offers the best quality and value for
the price that is being offered. Thus banks direct their efforts in improving
the quality of their services.
However, at the later stage of their development, sales orientation
comes into effect i.e. selling concept which believes that customers would not
buy enough from them unless a positive extra effort is made to sale the product
due to increase in competition and awareness. Today, the application of
marketing concept makes banks to accept the fact of finding out the needs and
wants of customers and to provide banking service package that will best
satisfy such needs and wants profitably.
The marketing concept has been viewed as the correct philosophy in
achieving a long – term commercial success. Thus making the task of persuading
customers to buy the service that bank offered very easy. Therefore customer
satisfaction becomes inevitable. The marketing concept is directed towards
answering the question as to, who are our customers. To whom do we produce?
What marketing techniques do we employ? Why are we selling this product? Who do
we sell to? Also to find out what the customer want and where he wants to buy
the product and how he want it delivered in order to create a cordial
relationship between the organization and its customer so as to achieve maximum
satisfaction.
1.2 STATEMENT
OF GENERAL PROBLEM
The marketing concept doesn’t seem to receive complete recognition by
the Nigeria
commercial banks. The integrated marketing idea that business should be
organized in such a way as to satisfy the customers by committing the whole
system of the organizations activities towards a single objective has been a
myth to the commercial banks rather than a reality. Consequently, customers are
not given the adequate attention they required in the banks as that which is
appropriate in the service organization. Furthermore, banks charge
discriminatory interest rates on borrowed funds which causes untold hardship to
customers. The banking profession in Nigeria had until – recently been
characterized by what expert refers to as arm chair banking, where bankers are waiting
in their offices for work to come and meet them. This approach to banking
business is deficient because the bank had not fully embraced marketing
concept: its philosophy and function. Their perception of marketing is still
narrowly defined. Marketing of bank services actually transcend these myopic
ends.
Nigeria
commercial banks need to adopt the marketing concept programmes for a
purposeful and customer oriented approach to the business of banking.
As a result of the above factors, this research is designed to answer
the following questions.
1) To
research into and find out those areas the banks have found to be of interest
in satisfying customers.
2) To
ascertain the opinions of banking staff towards their customers and vice –
versa.
3) To find
out the place and role of marketing in the organizational structure of
commercial banks and to what extent marketing functions have been applied.
4) To
ascertain the effectiveness and efficiency of marketing concept application.
5) To make
useful recommendation towards improvement
1.3 PURPOSE
OF THE STUDY
The marketing concept has not received the attention it deserved in
most commercial banks in the country. The importance of this research focuses
on the effect of marketing concept on the Nigerian banking sector using
Guarantee Trust Bank Plc Kaduna as a case study. The research attempt to
highlight the importance of the marketing in the banking industry. Accordingly,
attempt will be made to critically examine the various marketing mix elements
and their effect on the banking sector.
The researcher is essentially interested in looking at marketing as a
critical factor for the increase in patronage of the banking industry. And
equally ascertains the extent of marketing in the sector. The concept of
marketing is directed towards customer satisfaction. Marketing is a consumer
oriented programme which start by focusing on the consumer wants. How best to
satisfy him and how best to communicate and bring service to him at the price
he can be willing to pay with added emphasis on convenience.
In fact the purpose of
the study is
1) To provide
a valid picture of what is happening in the commercial banks in term of
marketing and customer satisfaction.
2) To
analyses customer response as to service rendered by commercial banks.
3) To
evaluate the compatibility of bank resources with the environmental factor.
(service and customers)
4) To measure
commercial banks corporate offer and customer acceptability.
5) To
recommend on solving problems based on findings which will help to improve
other marketing strategies implementation.
1.4 SIGNFICANCE
OF THE STUDY
This research is necessary because some officials have not fully
displayed through their attitude the relevance of the customer as the key
player in the banking service.
The research is timely and important because of the role marketing
plays in the banking industry. It will also prove or refute the hypothesis that
Banks believes in the application of marketing concept in order to bring about
objective satisfaction to customers needs.
Customer’s needs and wants are dynamic in nature. Some customers are
not aware of various products and services rendered by banks apart from mere
deposit and withdrawal from their accounts. The effect of marketing will
therefore serve as impetus for drawing the attention of the customer to the existence
of their services. It will also serve as a useful tool in setting overall
corporate objective, prosperity, growth and continued existence of business.
The commercial banks needs to constantly structure their services in such a way
that they cater for the financial needs of not only the customers but also the
prospective customers.
The research finding is hoped towards providing qualitative and
quantitative knowledge and idea in applying the concept of marketing in
achieving corporate objective and customer satisfaction. Also student of
marketing can use this research work as a guide or reference when information
on marketing concept and the marketing mix element are desired in customer
satisfaction. It is often said that the end of research work is the beginning
point of another, so it will act as a fore ground for staff and students who
will find this philosophy worth while or unavoidably expedient.
1.5 RESEARCH
QUESTIONS
The research questions are formulated on the basis of the purpose of
the study to guide the entire research work. These questions will serve as
guide to the researcher in designing the questionnaire and in providing
solution to the problems discovered. Thus the questions are set as follows;
v
What is the status of marketing concept in GT bank
v
How long have GT bank adopt the marketing concept
v
Does the concept increases patronage by customers
v
What is the effect of the concept to the
organization
v
How would the concept improve customers satisfaction
v
What is the nature of relationship that exist between
GT bank staff and its customers?
v
What effort is the management of GT bank doing to
improve that relationship
1.6 STATEMENT
OF HYPOTEHSIS
Two hypotheses have been formulated and would be tested in the course
of this study, which are the Null hypothesis and the Alternate Hypothesis.
Ho: Marketing concept has significant effect on
customer satisfaction.
Hi: Marketing concept has no significant effect on
customer satisfaction.
1.7 DELIMITATION
OF THE STUDY
In conducting a research of this nature, definitely one is bound to
face some challenges. Therefore the research focuses only on the management and
customer of GT Bank Murtala Mohammed Square Branch Kaduna due to financial
constraint. Time limits and other environmental constraints.
a)
Finance: Due to
the high cost associated with transportation, visitation was only restricted to
the branch office in question. Also materials that are needed have to be
bought, while some are obtainable from the net. Typing and binding of the
entire work is another area that needs serious consideration.
b)
Time
Constraint: Time was a major constraint to the research and this was compounded by
the fact that the research work was to be conducted and its report submitted
within a short period of time. Data collected analysis classification of such
data’s, interview was also conducted and the respondent’s attention based on
their most convenient time.
c)
Inadequate
Material: Research work of this nature requires information from textbooks, journals
and periodic reports of which some of these materials are either confidential,
difficult to obtain or too expensive.
1.8 DEFINITION
OF TERMS
Some of the terms used in this research work are defined below for easy
understanding and interpretation.
v
Marketing
Concept: The philosophy which states that customers satisfaction is the
economic and social justification for a firm existence.
v