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THE IMPACT OF MARKETING STRATEGY IN NIGERIAN BANKING INDUSTRY

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THE IMPACT OF MARKETING STRATEGY IN NIGERIAN BANKING INDUSTRY

ABSTRACT

The Nigeria banking sector has undergone tremendous competition since the introduction of the Structural Adjustment Programme (SAP) on 1st of July, 1986, which has led to stiff competition in the industry.

Marketing strategies is a written plan, usually comprehensive describing all activities involved in a particular marketing objective and their relationship to one another in both time and magnitude which include all the necessary activities which an organization can use to achieve its long term objectives which are growth and profitability.

This research study focus on the impact of marketing strategy in Nigeria banking industry using First Bank of Nigeria as a case study,

The study focus on the use of primary source of data by using administering of questionnaire both to the employee of the bank and also to the customer of the bank and observation method was also used in obtaining data.

The research used multiple bar charts to give a pictorial diagram of the data analysis for the demographic data while T-test was employed to test the various hypotheses formulated. The hypotheses are five in number.

At the end of the study, it was revealed that marketing strategy does not only have impact on marketing of physical product alone but also on marketing of service in order to achieve the overall organization objective of profitability and growth.

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

                                                                                      PAGE

TITLE                                                                                       I

CERTIFICATION                                                                      II

DEDICATION                                                                            III

ACKNOWLEDGEMENTS                                                          IV  

ABSTRACT                                                                              VI

TABLE OF CONTENTS                                                            VIII

 

CHAPTER ONE

INTRODUCTION

1.1     Background Information                                                   1

1.2     Statement of the Problem                                                 3

1.3     Objectives of the Study                                                    4

1.4     Significance of the Study                                                5

1.5     Scope of the Study                                                5

1.6     Plan of the Study                                                            6

1.7     Definition of Key terms                                                     6

 

CHAPTER TWO

LITERATURE REVIEW

2.1     Introduction                                                                     9

2.2     The Meaning of Marketing                                               10

2.3     Marketing Concept                                                          13

2.4     Marketing Environment                                                    15

2.5     Types of Markets                                                            20

2.6     The Product                                                                    23

2.7     Product Life Cycle                                                           25

2.8     Price                                                                               28

2.9     Marketing Banking Services                                            30

2.10   Objectives of Customer Services in First Bank Plc 31

2.11   First Bank Products                                                         32

2.12   Marketing Strategies in Financial Institution                     47

2.13   Banking and the Impact of Marketing Strategy                 50

2.14   Corporate Planning                                                          54

 

 

 

CHAPTER THREE

RESEARCH METHODOLOGY

  • Introduction                              32
  • Historical Background of First Bank of Nigeria Plc 57
  • Research Design 58
  • Data Specification 59
  • Research Hypotheses 60
  • Sampling Frame 62
  • Method of Data Analysis 63

 

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1     Introduction                                                                     65

4.2     Analysis of Research in First Bank Plc, Ilorin                   65

4.3     Demographic Analysis for Staff                                        67

4.4     Test of Hypotheses                                                         70

4.5     Demographic Analysis of Customers                               80

4.6     Test of Hypotheses                                                         84

4.7     Discussion of Research Findings                                     92

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

  • Summary 94
  • Conclusion                                                                    95
  • Recommendations           96

Bibliography                                                                              99

Appendix                                                                                   101

 

 

 

 

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND INFORMATION

Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services, organization and event to create and maintain relationships that will satisfy individual and organizational objectives. It is fundamental to business growth. It basically includes getting goods and services to the final consumer satisfactorily.

The Nigeria banking sector has changed tremendously since the introduction of the Structural Adjustment Programme (SAP) on 1st July, 1986. Prior to this period, most Nigerian banks engaged in an effort aimed at encouraging certain classes of customer resulting in rejection of deposits or accepting them on dictated terms due to the fact that there were few banks to render services to a considerably large numbers of customers which led to a decline profit volume.

However, the period between the SAP and now has witness various amendments of banking laws and policies ranging from BOFID 1991, to universal banking policy of 2001, various increased in the capital base e.t.c. these changes have therefore necessitated the need to find a way of promoting banking services, which is possible with the impact of marketing strategies in the banking sector.

It is surprising that banks have not been able to come up with a competitive and comprehensive approach for marketing of banking services and product. A close look at the recently concluded re-capitalization process showed evidently the above assertion. This process witnessed what is called “Aggressive Marketing” which is not a replete of what banking stands for in terms of integrity and utmost good faith.

The trend of the introduction of marketing department (marketing strategies) in banks is a welcome development and has made arm-chair banking part of the history of the banking sector. Bank marketing was thus defined as “that part of banking services profitability to selected customers”. The need for marketing in banks evolved from the intense competition from not only rival banks but also non-financial institutions. Staffs are placed on target to be achieved and are compensated or promoted using their ability to or not to meet their targets.

However, customers should be at the forefront in terms of the banks planning and corporate thinking. An organization cannot be talking of profit without considering the customers patronage that yields that profit. The strategic or corporate planner therefore has to take cognizance that the survival of a business rest solely on the customer. It can be seen that the relevance or importance of marketing to the banking industry cannot be over estimated.

The banks needs to make adequate returns because they are accountable to their shareholders who have invested with the purpose of receiving good returns. Also, the substantial cost incurred in the day-to-day operation must be sufficiently covered from the profit earned. For any bank therefore to meet these needs, the bank needs to make adequate returns. Meeting these needs is termed maximizing the shareholder’s wealth.

 

1.2       STATEMENT OF THE PROBLEM

Despite the importance of marketing strategy in the banking industry, there is a problem in their financial services and activities with particular reference to First Bank of Nigeria Plc.

During the era of arm-chair banking, the banks were very few and patronized by the indigenous people with no option, but following the increment of indigenous ones between 1945 – 1960 and the recent re-capitalization of banks’ capital base to N25billion has necessitated a dire need for banks to take marketing of their products very seriously. It is obvious that competition amongst banks would increase and as such there is need for real marketing strategies to be applied to further professionalize the industry.

It is believed that banks with more funds would be well positioned to become one of the leaders in the dynamic and competitive sector and marketing plays a pivotal role in deposit attraction and sourcing of funds.

 

1.3       OBJECTIVES OF THE STUDY

The general objectives of the study is to determine the impact of marketing strategies in Nigerian banking industry and how they are used to attain stated objectives. This study will evaluate impact of marketing strategies in relation to external factors operation and proffer solutions based on the data collected and the scope of the researcher.

Other specific objectives of this study include:

  1. To examine an existing marketing principles and theories.
  2. To examine product marketing strategies of banks in relation to external factors.
  3. To evaluate how these strategies has been in achieving their objectives.
  4. To examine the associated constraints in the incrementation of these marketing strategies.
  5. To make necessary recommendations for an efficient banking policy.