MARKETING OF BANKING SERVICE IN NIGERIA (A CASE STUDY OF COMMERCIAL BANKS IN OWERRI MUNICIPAL OWERRI IMO STATE)

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MARKETING OF BANKING SERVICE IN NIGERIA (A CASE STUDY OF COMMERCIAL BANKS IN OWERRI MUNICIPAL OWERRI IMO STATE)

ABSTRACT

This study is on the marketing of banking service with reference to First bank of Nigeria p-lc.

The main purpose was to find out the effectiveness of the marketing of banking service as it affects the bank itself and the banking industry, the customers welfare and profitability of the bank and national economy in general. There is however a rapid increase in the number of banks and this led to number of banks and this led to competition among banks. This competition became so fierce that banks began to seek means of survival.

In the course of achieving the above objectives both primary and secondary data were used to gather information. For the primary method data collection, both questionnaires and interview method are used. Whereas for the secondary data collection, information were sought from Bank libraries, journals and text books.

The questionnaires used were distributed to both bank staff and customers of Oceanic bank of Nigeria Plc.

After the analysis of data collected, the researcher ascertained that commercial banks face competition in marketing of their services. Banks conduct marketing research as to achieve their target profit motive; banks have some problem that preventing them form rendering efficient banking services to their customer.

However, some recommendations were made based on the finding above. That bank should organize more training for their staff especially concerning their attitude towards banks customers; Banks should also embark on research that will enable them identify their customers needs and the ways of meeting such needs.

Why are banks established? Actually banks are established to make profit. Are these profit made at the expenses of the customers? Or is it as a result of the services provided by these banks?

It the aim of this research work to find out if banks apply the marketing concepts. Is customers satisfaction what these banks attain to achieves. This research work has five chapter.

Chapter one contain a general discussion of the marketing concepts as seen by different people. It went further to skate the problem to be studied and why this study was carried out. The scope and limitation of the study and finally the proposition and definition of terms.

A number of past related literature examine by other studies as it relates to the an appraisal of the application of marketing concept in the banking services are highlighted in chapter two.

Chapter three deals with the design of the study. The method use in collecting relevant data. It also deals with way the questionnaire were distributed and the treatment of data.

The data gotten from the research survey were analyzed and interpreted. Also similar questions on both questionnaire were compared.

Finally, the summary of finding, conclusion on the research and recommendation made by the researcher are all in chapter five.

If banks would put the recommendation made in the study into use, there will not only be satisfied customers with services offered, but a continuous increase in profit made, there by making the problem of the banks a thing of the past.

TABLE OF CONTENTS

Title page

Approval page

Dedication

Acknowledgement

Abstract

CHAPTER ONE

INTRODUCTION

Background of the study
1. Statement of problem
1. Need for the study
1. Scope and limitation of study’
1. Significance of the study
1. Definition of terms

CHAPTER TWO

REVIEW OF RELATED LITERATURE

CHAPTER THREE

Design of the study
- Selection of population
- Development of research material
- Research procedure
- Treatment of data

CHAPTER FOUR

Presentation, analysis and interpretation of data

CHAPTER FIVE

Summary of finding

Conclusion

Recommendation

References

Appendix

CHAPTER ONE

1.0 INTRODUCTION

This is the starting point for improving the profitability particularly in the area of satisfying customer requirements.

(Hill et al 1971) The marketing concept calls for and extrovert approach to business. Having expressed more specially it state that a customer orientation for an organization that is having a detailed understanding of the needs, wants and behavior of customers and the integration of all corporate activities in the market place are the key to move profitable sales. The concept also implies that profitability of a company operations can be move effectively improved, if top marketing concentrated a higher proportion of its efforts in over seeing the marketing activities rather than other functional areas such as production, finance purchasing or personnel.

However, customer orientation of any business does not mean that firm should fragment its activities across a whole range of possible customers need to be broken down groups whose members have similar buying characteristics. A marketer should be quick at capitalizing or newly identified needs on how consumers must be aware of the match and be persuade in a good match and some how the products must be available to consumers and appear more desirable than other competing alternative or substitutes Ejionume 1993.

The tenants of the marketing concepts or sales morality dictate that all efforts of the marketer should be guarded towards the satisfaction of the needs of consumer more effectively and efficiently than competitions. The Commercial bank Plc plc is one of the numerous public manufacturing industries set up by the federal marketing of Nigeria primary to provide utility to the public. It also undertakes the delivery of document, parcels, keeping of valuables and money perittances. The service rendered by Commercial bank Plc Aba (COMMERCIAL BANK PLC ABA ) is very crucial and indispensable that all diligence is needed to deliver it to right quality at the right time, is the improvement in the services that necessitate the use of marketing concept.

As competition between business geared up it became imperative to turn attention to customers needs and wants which are naturally insatiable. The marketing concept arose to challenge all other previous concepts. The marketing concepts hold that the key to achieving organizational goals consists in determining the needs and wants of target market and delivering the desired satisfaction more effectively and efficiently than competitors. The marketing concept is a frame of mind which the marketer work with. It is base on a market focus, customer orientation, co-ordinated marketing and profitability.

The marketing concept start with a well defined market. The organiation determine who its market will be, who he hopes to satisfy, even after the market has been defined, a company can still fail at customer orientation. By customers orientation, the customer need is define from the customer view point and not from that of the company. The customer orientationsecks to crown the customer as “kind” recognizing that he is the life blood of the organization and aims at satisfying the desires of the consumer. A Japanese businessman once said that ‘our aim goes beyond satisfying the customer; our aim is to delight the customer”. In facts this a higher standard and a deeper quest and may the secret of great marketers. Co-ordinated marketing answers that all the various marketing function like advertising, marketing research, sales force and so on are properly integrated and must be well co-ordinated with other departments in the company. The major goals of most profit oriented companies is to make profit. A company will make more money if it satisfies its customers needs better than competitors. Therefore in applying the market concept, companies would produce, what the customer wand and by so doing, they maximize profit.

BACKGROUND OF THE STUDY

The deregulation of the financial services market which the Nigeria economy has witnessed under the structural adjustment programme, has exposed financial institution to the types of competitive and tough market environment which their counter parts in the advanced economics have witnessed for many years.

The banking and financial institution which have survived the turbulence which those changes brought in their wake, are those which have encourage & embrace the marketing philosophy as a corporate culture for the organization. The Nigeria experiences is no different from that of those of our counterparts in the advanced world and we have the benefit of adopting the well tested and established method which help them to achieve excellence in the face of apparent odds.

The argument in this research work is that it enhance profits and in fact the entire issue of corporate survival, excellency, competitive edge stand out corporate image, can only be achieved if financial industries adopt the marketing concept as the philosophy which guides the way we deliver our services.

Besides, the advent of deregulation and the ensuring cut-throat competition the financial market in which we operate is characterized by homogeneity of products or services rendered by all banks and commercial banks. As with other service industries, they do not have the advantage which the physical product marketing companies have in product differentiation through improvement of product functioning and peck presentation.

Banks and commercial banks are selling essentially the same basic products or service and therefore have very limited degree of freedom to enhance competitiveness on the basis of product differentiation.

Competitive advantage can therefore only be achieve through adoption of outstanding service delivery systems and customer oriented attitude towards the satisfaction of customer demands and expected.

This study is thus designed to examine how leadway assurance can create a competitive edge through the application of marketing to its.

Several author have started the need for all business entities to adopt the marketing concept in their various activities. Most companies do not really grasp or embrace the marketing concept until they are driven to it by circumstance like; sales deline, slow growth, changing of buying patterns by customers, increasing competition and increase in market expenditure.

These companies have not arrived at fill marketing maturity but think that because they have a market manager, product manager, they are implementing the market concept. From what is been seen and read today in the society, not all business organization adopt the marketing concept. For example, in the modest of security, the consumer is not the king, rather it is the seller that is the king.

As interesting and entirely logical result of the marketing concept relates to the central purpose of business which is to obtain and serve customers. Since profit is vital requirement of business it is conventional to regard it as the first central purpose. For all we know, it is possible to run a business without profit for a time. It is not possible for business to survive for one day without customers. Customers are the nerve of any business. Without a total commitment to them on the part of the company as a whole, the application of advanced marketing techniques can only have limited and brief effects.

The emergance of banking services in Nigeria can be trace back to more than 100 years ago. The activities of eh transnational corporation, the financial transaction of the colonial government, the deeline of the bater system of trade and the increasing acceptance of British silver currency all these required an institution in the form of a commercial bank for safety and transmission of fund the importation and distribution of British silver coins and provision of credit to government and trading company who need them. These banks were out to make profit fro interest got from the deposits made by customer without actually satisfying the customers, they never really thought of the customer as the life blood of the organization.

In the past, banks were operating in a seller’s market which made marketing possible but the environment is dynamic, such that if banks are to continue to prosper they must adopt the change that are taking place in industry and commerce so only the bank that are efficient and effective can satisfy customers. Thus in scarce and abundant economics alike, the red problem is not production, but marketing if only we accept the truth that mass marketing is a pre-requisite for successful mass production. Marketing considerations than becomes the most critical factor in any business planning.

In any economic set up, there are various institutions engaged in Commercial activities with the cardinal aims of strengthening their financial base and quality service to the society through the marketing of their products and services; thereby establishing themselves firmly within the given economic environment.

Before the Mid-1950’s banks had no understanding or regard for marketing because they were supplying needed services. Marketing came into banks in the late 1950’s not in the form of “Marketing Concept”, but in the form of advertising and promotion concept. The financial institutions especially the banks feature prominently in competitive economic atmosphere principally focusing their operations in the marketing of their services to the general public.

However, some of these services include among other, the granting of loans and overdrafts, issue and purchase of securities, provision of sate depositories to customers as well as facilities for making payments through bank notes and cheques. It is therefore a simply obvious that an institution like bank should evolve sound management techniques coupled with effective marketing and services strategies within its socio-economic and political ambient. It also follows that certain operational problems may try to impinge on the efforts of the Bank to stand firm amidst the winds of economic vacillation and constant policy changes.

The Oceanic bank of Nigeria (Plc) one of the leading Banks in the marketing of Bank services has taken various strategic steps in a bid to improving its marketing operations and liquidity strength, customer relations, credibility, and effective participation in the resuscitation of the economy. This will receive due attention in the course of this work. Suggestions and recommendations will also be given to the possible way of solving the various problems affecting the marketing of banks services within the system.

1.2 PROBLEM OF THE STUDY

Banking is in the services industry. The quality of services rendered by our banks have been attracting criticism from people in all works of life the government functionaries, businessmen, the media and the general public are all very critical of banking services. The complaints range from those of inefficiency favoritism, long delay in cashing cheques or making with drawls, tardiness in granting loans and or credits, to unfriendly attitude of bank workers. Even government that own a sizeable proportion of the shares in most banks is known to have constantly accuse bank of not identifying enough with the nations aspiration. The chief of general staff had a cause to appeal to bankers to leave arm chair banking and adopt the marketing concept in carrying out banking activities. As early as 1943, Dr. Nnamdi Azikiwe said that “I was fustrated because of the shoddy way and manner the manger of the marina Branch of the bank of British West Africa Limited treated me with rebuff not only did he keep me standaing in his offices for some minutes, he was curt and condescending as if I was seeking for favour. Naturally my pride was hurt and it down on me that the struggle for Nigeria freedom has many front and that political freedom was not enough economic freedom must be won also” most bank don’t put their customer in the prime place as they are supposed to be. There is now keen competition and to compete means to apply the marketing concepts. Are there criticisms justified or are they just a mere rundown of the banking industry because they are making profit in an era of economic slump?

1.3 OBJECTIVE OF THE STUDY

There have been criticism about the banking industry in the way they rander services to their customers. They do not see the customer as king. The researcher want to carryout research on what bank do and find out if they adopt the marketing concept in their condition of services. The resarcher also wants to have an ephirial base either to support all the soruce about the poor impression people have of the banks and to advice the bank on how to improve their services by adopting the marketing concepts. The magic formula is the adoption of Marketing as a way of life. A business must learn to think of itself not as producing goods or services but as buying customers and doing the things which make people want to deal with it. Do bank really know their customer and are they wooing them as men woo girls they fancy and love? If my finding are not valid, I would say there are no base for the criticism, but that they arise because the bank are doing well. If their services are poor, why should they make so much profit. Are they doing this at the detriment of their customers?

From all that has been written above, it is the aim of this study to take a segment of the banking industry and study the approach of the bank to their customers.

whether or not banks apply the marketing services as a base for rendering services to their customer.
If customer are satisfied with the services rander by bank
To formulate marketing strategies and make recommendation that would be more effective in the marketing of banking services.
Examine the ways commercial banks in Nigeria practice the marketing concept.
Determining the degree of customer awareness of the banking services.
Ascertaining the stage of marketing to financial serves in Nigeria.
To identify the problems the financial industry’s face in the application of the marketing concept.

1.4 RESEARCH QUESTIONS

The study seeks to answer the following questions.

The extent to which there has been improved quality of services rendered to bank customers due to the introduction of marketing of bank services?
What are the prospects and problems posed to bankers by this marketing of banks services?
What is the rationale for developing this marketing of bank’s services?
The extent to which the marketing strategies adopted by commercial banks have helped to achieve maximum benefit and services to customers.
How marketing of bank’s services are known to the external public and the extent to which they are known to them?
1. RESEARCH HYPOTHESIS

In an attempt to reach decision, it is useful to make assumptions and guesses about the population involved. Such assumptions or statements which may not be true, are called statistical hypotheses. Generally, they are statements about the probability distribution of the population.

NULL HYPOTHESIS:

The null hypothesis is a hypothesis formulated with the sole purpose of rejecting or nullifying it.

Ho denotes it.

ALTERNATE HYPOTHESIS

Any hypothesis, which differs from a given null hypothesis, is called the alternate hypothesis, denoted by Hi.

For the purpose of this study, the following hypotheses have been formulated, which will be tested in the chapter four.

HYPOTHESIS

1. Ho: Commercial banks do not face competitions in marketing of their bank’s services

Hi: Commercial banks face competition in marketing of their bank’s services.

2. Ho: Banks do not conduct marketing research as to achieve their target profit.

Hi: Banks conduct marketing research as to achieve their target profit.

3. Ho: Banks do not have some problems that prevent them from rendering efficient banking services to their customers.

Hi: Banks have some problems that prevent them from rendering efficient banking services to their customers.

SIGNIFICANCE OF THE STUDY

The economic transformation of the rural/urban communities in any state carries with it a lot of the relief of the burden which it has in the area of capital development. The Banks with the marketing of their services are capable of playing a vital role and have in fact played a vital role in the sustenance of the economy. This fact has a direct linkage to the importance of basic industries and small and medium scale enterprises to the industrial and technology advancement of any country.

The reason why most banks are into marketing of banks services is to face the high competitive nature of banking business as well as to achieve higher profit base. The success of this research project will help the bank to withstand further intense competition on marketing of bank services in acquisition of new customers and the retention of old ones.

The project work shall bring to the notice of the bank how much impact it has been able to make in the banking industry due to the development or introduction marketing of bank’s services.

It is also expected that the result of the study will help the bank to evaluate the strength of its staff, quantitative and qualitative to enable it adjust and re-adjust in their marketing services processes.

It will however bring to the notice of the bank how effective its marketing strategies have been so far and what it can do to improve on these strategies now and in future.

This research work shall also help the bank to actually know whether there has been improved customer bankers relationship or not and what it can do to further improve on this relationship.

The study will certainly be important to the Department of Banking and Finance, Institute of Management and Technology Enugu, as it may form a basis for further investigation on the subject.

The marketing of bank’s services in Nigeria generally will help to attract more awareness in banking operations.

The increase sophistication of the Nigeria financial sector, the higher level of education and awareness among the populace means they now have higher taste and their needs are now mere complex and advance. They know their rights and what they want and will demand for it. The financial industry which does not deliver the right service is deserted for the other, which is better positioned to give the customer what he or she wants.

This research work is aimed at finding out the needs of the customer and dissatisfaction among bank and financial industry that is yet to be solved. In finding the solution to the dissatisfaction, this project work will be justified in these grounds.

To examine some gain that leadway assurance can be derived if it adopt full marketing of services.
To justify on how quickly the clients can receive their claims.
To evaluate the level of involvement, marketing of services have helped leadway assurance in rending their services successfully.

The amount of time spent by customers in various banks during a normal banking transaction
the reaction of customers as to the rendering of bank services.
how banks staff and customers relates to one another.
if banks staff and customers enjoy enough services and infrastructure facilities and amenities.
if bank apply the marketing concept by satisfying their customers in the way they rander their services.

1.7 SCOPE OF THE STUDY

The scope of this study is very wide if it has to be carried out in all commercial banks in Nigeria. The study is limited, based on the fact that there is no time and material resources to see to the whole nation. This study is limited to Owerri and the finding may not reflect the situation in the whole banks in Nigeria, but by and large, what happens in Banks in Owerri can be said to apply to other banks.

1.8 LIMITATION OF THE STUDY

In carrying out this project, there are some unavoidable handicaps to this study which include the un-encouraging and secretive attitude of some officials and members of society, particularly as regards disclosing vital information concerning the society.

Also financial constraints on the part of the writer hinders to some extent the proper collection and competition of relevant materials for the project.

Lastly, the study will help to estimate the changes required or to re-interpret the activities and revise the objectives of the society.

1.9 DEFINITION OF TERMS

The following terms used in this study should be taken to mean the following.

MARKETING

Marketing is a human activity directed at satisfying needs and wants through exchange process.

MARKETING: Is the performance activity that directs the flow of goods from the producers to the consumer. Marketing also means a social and marketing process by which individuals and groups obtain what they want and need through greatly and exchanging products and values with others.
MARKETING CONCEPT: Is defined as customer oriented backed by integrated marketing aimed at generating customer satisfaction as the key to satisfy organizational goals.
CUSTOMER ORIENTATION: Means that then markets gears his activities towards customer needs, that has being oriented of learning favourable towards the customer.
CUSTOMER SATISFACTION: Means customer problem solving by giving the customer those goods, services or things of value need at the right price, in the right place and in the right combination.
PHILATELIC SERVICES: Mean expert knowledge of collecting postage stamps.
EXTROVERT APPROACH: Means a person coming nearer to be more interested in what goes on around him that in his own thoughts and feeling.
COMMERCIAL BANK PLC ABA : Means Commercial bank Plc Aba .

BANKING

Banking is defined in the 1969 Act as “the business of receiving money from outside source as deposit irrespective of the payment of interest, and the granting of money loans and acceptance of credits or the purchase of bills and cheques or the purchase and sale of securities for account of other or the incurring of the obligation to acquire claims in respect of loans prior to their maturity or the assumption of quarantines and other warranties for others or the effecting of transfers and clearings and such other transaction as the commissioner may, on the recommendation of the central bank, by order published in the federal Gazette designate as banking business.

The marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target market and delivering the desired satisfactions more effectively and efficiently than competitors.

PRODUCT

A product is something that is viewed as being capable of satisfying needs or wants.

SERVICES

These are separately identifiable intangible activities which provide want satisfaction when marketed to customer and or industry users and which are not necessarily tied to the sale of a product or another services.

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