ABSTRACT
This study is designed to reveal to banks especially the three selected commercial banks, the importance of marketing in the banking industry. However, because of the increase in competition in the industry these days, banks are marketing conscious and are restless in their services development and innovation pursuits. This study is set, to determine the role (s) which marketing plays in banking activities.
However, the sample survey method was used to gather information from bank staff and customers of First Bank Nig. Plc.,
Union Bank Nig. Plc., and Chartered Bank Nig. Plc., all located in Onitsha metropolis. Some selected customers and bank staff were used in the formulation of sample size of 80 for the customers and 86 for the bank staff. The researcher tested the hypotheses through the use of chi-square and presented the
results in tables reflected in chapter four.
However, after analyzing the various data gathered, the researcher came up with the following findings. That First Bank of
Nig. Plc., Union Bank Nig. Plc. And Chartered Bank Nig. Plc., Onitsha are marketing oriented banks and undertake many marketing functions.
There are good cordial customers relationship between the banks and their customers, hence the institution and designation of the position of relationship marketing officer in these banks. The banks are customer oriented and have integrated marketing in their operations arising from the adoption of marketing concept.
In the light of the foregoing, the following recommendations were made, viz:-
1. That Banks must be customers oriented in order to
remain at the apex of the industry.
2. That Banks must find out what the customers wants are, and develop profitable products and services to meet them so that satisfied customers are guaranteed to enable them remain leaders and maximize profits.
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3. That bank must restructure and harness the benefits arising from re-engineering, through training and development of their human resources.
CHAPTER ONE
INTRODUCTION
1.1BACKGROUND OF THE STUDY
Engaging an expert with marketing orientation in a bank many years ago would have been considered a misnomer. This is because marketing was considered applicable only to goods and not services for which commercial banks belonged. In order words, banks are now fully marketing conscious and have an equipped marketing department with an expert in the field at the helm. However, before inept insight on “the Role of Marketing in the Commercial Banks in Anambra State” a purview of the development of commercial banks industry in Nigeria is necessary.
The business of modern banking started in Nigeria in1892 with the establishment of African Banking Corporation. The bank existed for two years and had its assets and liabilities taken over by the bank of British West African in 1894, which later changed to the Standard Bank and is now known as the First Bank of Nigeria Plc. In 1917, Colonial Bank (Barclays Bank and now Union Bank of Nigeria Plc.) was established.
Other banks that were established during the
Neophytic banking era include, the Nigeria Merchant Bank
(1931), Agbommagbe Bank, 1945 (now Wema Bank), the
African Continental Bank Plc (now ACB International Bank Plc. 1947) to mention a few. The failure of many banks during the outset of the neophytic banking era led to the regulated banking era of 1952. it is on record that the activities of these banks centered on commercial banking with much emphasis on the financing of exports and imports activities and does not contribute much on
industries until recently.
Nigeria has got to the realm of world awareness with amazing speed in the recent past. The present economic situation in Nigeria portrays different pictures to what the situation was some twenty to thirty years ago; hence, it caught the fancy of many industries and commercialists from every sector of the global activities.
There is the changing industrial and technological landscape in the attempt to diversify the economy, the changing management and administrative technique in all the sectors, the increasing international outlook of the business sector and above all, the changing tastes expectation and increasing sophistication of the people all of which have had tremendous impact on the marketing of goods and services in Nigeria.
Marketing has increasingly become necessary in today’s banks competitive environment. Competition from other financial institutions has forced banks to think seriously on effective competition. This has made them to pay increasing attention to marketing techniques required for banking services.
However, as emphasized by FOLUSO OLALUSI (1989) in his book, “The practice of banking” the marketing of banking services relate to identifying and stimulating client needs which can be profitable satisfied by the banks”. Marketing search light in banking focuses on increasing the deposit base of the banks and inducing credits worthy customers to borrow at a profit.
This differ clearly from marketing of goods which is merely to stimulate customers into buying while the banks ‘buys’ the deposit of customers, it again ‘sells’ the deposit to borrowing customers at a rate slightly higher than the price paid for the deposit. In other words, banks lend at a rate slightly higher than the prime rate.
The need for the marketing of banking services has become necessary as a result of the continuous change in the social economic technological and political environment and this has effect on the shape and nature of markets served by the banking industry. Equally, the increase in the number of banks and other financial institutions and their operating branches has given rise to competition among institutions producing financial services. Also, banks operate in a near perfect market. No bank can substantially influence the homogeneity in services rendered.
Therefore, the marketing of banking services by the commercial banks require a calculated and planned orientation with best blend and effective marketing mix to know what, who, where and how to tackle this over dynamic situation for the survival of the banks and the achievement of their corporate objective. No wonder Joseph C. Massie 1979 describes marketing mix as the apportionment of effect and the combination designed and integration of the element of marketing into a programme which on the basis of appraisal of the market forces will best achieve the objective of an enterprise in a given period. The marketing mix includes pricing, product, promotion and distribution.
Marketing of banking services is not just seeing the services from the eyes of the bank users, but also being in the right market at the right time with the right service at the right place. This entails planning, support of top management, improved trend in banker – customer relationship and organization of wide acceptance of the marketing philosophy.
The introduction and adoption of the concept of
marketing principles as they apply in the marketing of bank services would therefore, help the commercial banks in general to have an edge over their competitors.
1.2STATEMENT OF PROBLEM:
Banks do not consider marketing necessary. But with competition, changing taste, desires and needs of customers, banks are now marketing conscious and they are up on their toes, in their attempt to deliver value to their customers.
However, it looks like most banks have not adopted the marketing concept, or integrated Marketing in their operations.
Therefore, banks need to be customer oriented in order to create and maintain customers, whose patronage will always be assured or guaranteed.
In the light of the foregoing, it has become necessary to determine the role (s) which marketing play in commercial banks vis-à-vis the three selected banks under study.
1.3OBJECTIVE OF THE STUDY
This topic has been chosen because marketing of banking services in Nigeria is now facing serious
competition. However, this study is aimed at finding out the following: –
1. To find out the role which marketing plays in banking
activities.
2. To find out why are there slow procedures for
granting bank facilities.
3. To find out the extent to which marketing concept has been adopted by commercial banks.
4. To find out whether there are qualified marketing professionals in the banks.
1.4RESEARCH HYPOTHESES
Under the working hypotheses the under listed items will be used for Null Hypotheses (H0) and alternative (Hi). These include:-
1, Hi – Banks that apply marketing concept do not have satisfied customers.
Hi – Banks that apply marketing concept have
satisfied customers.
2.Hi– Cordial relationship between bank staff and bank customers will result in high customer loyalty.
1.5SIGNIFICANCE OF THE STUDY
This study will make it possible to examine the operational efficiency of the three selected commercial banks in Onitsha Metropolis in order to evaluate the effect of the introduction of marketing concept and adoption of integrated marketing in their operations and their services.
The three selected commercial banks will know how to satisfy their customers. The studies will therefore, reveal to the three-selected commercial banks the importance of customer relationship and complaint management. Also the importance of marketing in the banking industry will be exposed through this study. The study will benefit the three selected banks, as findings of this study will improve their services to their customers and profit for the banks.
1.6LIMITATION OF THE STUDY
The study of this nature entails that a lot of hurdles will have to be crossed. For the success of this study, several hindrances were encountered. These include
constraints, difficulties and financial predicaments.
However, in spite of all this impediments, several materials were eventually sourced by the researcher including information from the commercial banks, which include: – (First Bank of Nigeria Plc., Union Bank of Nigeria Plc., and Chartered Bank of Nigeria Plc., all in Onitsha metropolis).
1.7SCOPE OF THE STUDY
This study aims at the role of marketing in commercial banking services will be limited to the following banks, First
Bank of Nigeria Plc., Union Bank of Nigeria Plc., and Chartered Bank of Nigeria Plc., all located within the Onitsha metropolis.
In view of the foregoing, the scope of the study among others covered the following areas:- 1.Role of marketing in commercial banking services.
2. The need for marketing of banking services.
3. The need for cordial relationship between the bank customers and bank staff.
1.8DEFINITION OF TERMS
Banks: – A bank is simply an institution, which accepts deposits from the public and in turn advances loans by creating credit.
Again, ordinary banking business consists of changing cash for bank deposits and bank deposits for cash; transferring bank deposit from one person to corporation (one depositor) to another giving bank deposits in exchange e.g. government bonds etc.
Old Generation Banks
Old generation banks are banks established during the colonial government.
New Generation Banks
They are banks, which sprang up and got quoted in the Nigerian Stock Exchange during 1980s and 90s.
Marketing
Marketing involves identifying customers’ needs and providing goods or services to meet those needs profitably.
Marketing Services
This may be different from marketing goods because services are intangible, different from each individual buyer and often dependent on the person providing the service.
Marketing Strategies
Successful bank marketing needs to be related to the bank’s overall strategy.
Marketing Plan
Marketing should be based on a plan, which uses an analysis of the present situation to identify objectives, which can in turn lead to action plans. Marketing plan needs to be flexible enough to meet the needs of different levels of the organization as circumstances changes.
Marketing Research
This involves carrying out research to make sure marketing plans are relevant to customers needs. This may take the narrow form of market research or the broader marketing research.
Marketing Decision
Most marketing decisions are related to four key areas, the four elements of the marketing mix, product, price, place and promotion.
Marketing Mix
Is defined as the blending of product, place or distribution and promotion achieving marketing objectives.
Product
Anything that can be offered to the market for attention, acquisition or consumption. It includes physical object services, personalities, place organizations and ideas.
New Product
Products new to the firm major modifications of existing products (re-launches) duplication of competitors produce and the product line acquisition of which involves assimilation of something “new” into the product line.
Bank Product
In banking, the term product refers to the services offered to customers. Product ranges need to be changed continuously as new products are developed and old product dropped.
Pricing Decision
Pricing decision are not simple a matter of calculation costs and adding on some profit. A number of factors influence pricing decision, in particular customer attitudes. Different pricing methods are used according to the circumstances.
Promotion
In banking promotion of financial services has increased enormously:- The most important of promotion is advertising, for the major banks, this includes extensive television and press advertising. Banks have also tried a number of other forms of promotion.
Personal Selling
Personal selling is the process of assisting and/or persuading a prospective client to buy a bank service or to act favourably on an idea that has commercial significance. In banking, personal selling is of special importance in financial services because customers expect good advice and may see branch staff as financial experts.
Intangibility
That which cannot be touched or grasped by the
mind.
Service
All activities, benefits or satisfactions, which are offered for sale or are provided in connection with the sales of goods.
REFERENCE CHAPTER ONE
1. Chartered Bank Annual Report and Accounts, June, 2003,
P. 4
2. Ekezie, E.S. (1999) “The Elements of Banking” Africana Fep. Publishers Ind., Onitsha, P. 122
3. First Bank (1998) In House journal, Lagos, Nigeria P. 4 – 20
4. Henderson, M.J. (1988) “Banking Operations” D.P.
Publications Ltd., London P. 104
5. Massie, Joseph C. (1979), “Essentials of Management”,
Prentice – Hall, U.S.A., P. 10
6. Nkem, K.N.I. (1999) “Sales Promotion, Onitsha: Kinin
Publishing Company.
7. Nkem, K.N.I. Lecture Practicum, MBA 2000/2001 class works on “Marketing Management” Dept. of Marketing, Unizik P.G. School, Awka.
8. Olalusi, Faluso (1989) “The practice of banking”, Tradon Publishers Nigeria P. 24
9. Onuigbo, Okonkwo (1986) “Banking & Finance for Professional Examination” Vol. 1 (Aba), JONKES Standard
Press Ltd., P. 216.