ABSTRACT
This study focused on the Effect of Marketing Concept on Customer Satisfaction in Nigeria Financial Institution, A study of Diamond bank Nigeria Ltd. High Profiteering and target-based marketing imposed on staff by management gave credence to this study to evaluate the extent of the application of marketing concept and its effect on customer satisfaction, patronage and profitability of the firm. The study was carried out in Umuahia, Abia state. Both bank customers and staff and management of Diamond bank were used as respondents for the study. 170 Customers and 30 staff were sample using a combination of Multistage and purposive sampling Techniques. Diamond bank has three branches. Data were solicited and collected with the instrument of questionnaire made of open ended and likert scale type of questions. Information received were analyzed with simple descriptive statistics, Spearman’s correlation model and t-test statistics. The hypothesis were tested at 5% level of significance. Findings indicates that the higher the evidence and application of marketing Concepts Strategies, the higher the level customers satisfaction and increase in profitability. Services challenges were found to still exist in their operation which has the same effect on customer at all time, tested at different branches. Employee’s service quality were measured using srviQUAL model. item like Empathy and Responsiveness were found to be low, which means that employee periodical training and coaching is highly necessary.
TABLE OF CONTENT
Title Page……………………………………………………………………i
Declaration…………………………………………………………………..ii
Certification …………………………………………………………………iii
Dedication……………………………………………………………………iv
Acknowledgement……………………………………………………………v
Table of content………………………………………………………………vi
List of table …………………………………………………………………..viii
Abstract……………………………………………………………………….ix
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study ……………………………………………….1
1.2 Statement of Problem…………………………………………………..4
1.3 Research Questions……………………………………………………..5
1.4 Objectives of the Study…………………………………………………6
1.5 Research Hypothesis…………………………………………………….6
1.6 Significance of the Study………………………………………………..7
1.7 Scope of the Study……………………………………………………….7
1.8 Limitation of the Study…………………………………………………..7
CHAPTER TWO
LITERATURE REVIEW
2.1 Historical Background of Diamond Bank Nigeria Plc…………………..9
2.1 Banking Business……………………………………………………….10
2.2 Banks and Marketing…………………………………………………….11
2.2.1 Marketing Research………………………………………………………13
2.2.2 Product Determination……………………………………………………14
2.2.3 Pricing…………………………………………………………………….15
2.2.4 Place (Distribution)………………………………………………………16
2.2.5 Promotion…………………………………………………………………16
2.3 Marketing Concepts: Nature and Applications…………………………20
2.4 Factors that Enhance the Adoption of Marketing Concept…………….25
2.5 The Premises and Features of the Marketing Concept………………….26
2.5.1 Customer Orientation (Consumer Concern)……………………………..30
2.5.2 Integrated Effort (Integrated Operation)…………………………………30
2.5.3 Profit Reward……………………………………………………………..31
2.7 Bank Marketing as Service Delivery…………………………………….34
2.8 The Application of the Marketing Concept in the Commercial Banking Sector……………………………………………………………………..41
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Area of the Study…………………………………………………………42
3.2 research design……………………………………………………………42
3.3 Population of the Study…………………………………………………42
3.4 Sampling Procedure and Techniques……………………………………43
3.5 Data Collection…………………………………………………………..44
3.6 Data Analysis Procedure…………………………………………………45
3.7 Model Specification………………………………………………………45
CHAPTER FOUR
RESULT AND DISCUSSION
4.1 Data Presentation and Analysis………………………………………..47
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1 Summary………………………………………………………………..53
5.2 Conclusion………………………………………………………………54
5.3 Recommendation……………………………………………………….54
5.4 Suggestion for Further Research……………………………………….55
REFERENCES
APPENDIX 1
APPENDIX II
LIST OF TABLE
Table 4.1 Analysis of Response Rate…………………………………………47
Table 4.2: Distribution of Respondents Based on Socio-Economic characteristics……………………………………………………….47
Table 4.3: Distribution of Respondents Based on Marital Status…………….48
Table 4.4: Distribution of Respondents Based on Education Qualification…48
Table 4.5: Distribution of Respondents Based on Occupation………………49
Table 4.6: Do you have Account with other Banks………………………….49
Table 4.7: How do you come to bank with Diamond bank………………….50
Table 4.8: Analysis of Research Hypothesis…………………………………50
Table 4.9: Effective of Service Irregularities on customer satisfaction……….52
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Early in man’s history it became clear that no household could be economically self sufficient for long; specialization in production and exchange of items produced with items needed were introduced. Thus marketing was born. Marketing is a crucial human invention, which embraces the activities people engage in to satisfy economic needs and wants. Different individuals and organizations require different goods and services at different periods, places and occasions in order to satisfy their different needs and wants. These individual make or are ready to make certain sacrifices in terms of money, time and human effort spent and at last they expect to get satisfied for those resources given out. in order to satisfy these individual and organizations, different business enterprise go into the business of producing certain goods and services, selling them at a specific points or markets where their costumers could easily see/ get them and promoting them intensively to create awareness and persuade and remind people to buy and buy more. These is the essence of marketing and exchange of relationship between producers of goods and services and receivers and /or consumers of goods and services in the market place.
It is on these bases of this concept that Srivatava and Agrawal (1980) defined marketing as the process of ascertaining consumers needs, converting them into products and services and then moving the product or services to the final consumer or user to satisfy such needs and wants of specific customer segments with emphasis on profitability while ensuring the optimum use of the resources available to the organization.
Agbonifoh, Ogwo and Nnolim (1998) see marketing as consisting of individual and organizational activities designed to sense and serve the consumer’s needs and to facilitate and expedite exchanges with a view to achieving the goals of the individual or organization through the satisfaction of the consumer’s needs.
The two definitions imply the essence of marketing is costumer or consumer satisfaction. Satisfaction here means person feelings of pleasure or disappointment resulting from comparing a product’s perceived performance or outcome in relation to his or her expectation. A customer is dissatisfied when the performance falls short of expectation, satisfied when it matches the expectations, and highly satisfied or delighted when performance exceeds expectations. it is for this purpose of satisfying the customer that marketing concept comes in.
Marketing concept as Stanton (1981) puts it is a philosophy, an attitude, or a course of business thinking. In fact, marketing concept is a philosophy of business which states that the customer’s want or satisfaction is the economic and social justification of a company’s existence. All the company’s activities, both in engineering, production, finance as well as marketing must be devoted to it.
Nwokoye (2000) sees marketing concept as a philosophy of being customer oriented at a profit. A marketer conducts his business for the ultimate purpose of meeting the needs of his customers and achieving his own objectives such as profit.
Marketing concept according to Onah & Thomas (1993) is a corporate state of mind under which management requires that all marketing functions should be integrated and company policies built on the basis that customers needs and wants are the operation of a firm in which customer and customer needs are recognized as of utmost importance. It is a management of business orientation from the customer satisfaction view point by the organization an all efforts undertaken by the firm are done profitably through an integration of the firm’s activities.
The company management should remain sensitive to market needs operate the enterprise in a market oriented manner. It is in support of this view that Morden (1991) saw marketing concept as a common sense of managerial orientation that understands the needs and wants of customers in the market, and adapts the operations of the organization to deliver the right goods and services more effectively than the company’s competitors.
Marketing concept recognizes that searching for better ways of serving customers is the route to both customer satisfaction and long-run company profit.
Thus, Agbonifoh, Ogwo & Nnolim (1998) remarked that it is a management philosophy which emphasizes the achievement of an organization’s short and long-term goals through the satisfaction of the consumer and the harmonization and integration of all marketing as well as all organizational effort in this direction. The import of the above definition therefore is that a company adopting marketing concept should:
1. Seek to be consumer-oriented so as to adequately satisfy consumer needs as a way attracting and retaining customers and thus servicing competition;
2. Consider the impact of all its planned activities, not only on the attainment of short-run but also of long-run goals; and
3. Strive to harmonize and gear all marketing as well as all corporate efforts towards the satisfaction of consumer needs.
As a philosophy of thinking, attitude to business, and a way of living, the marketing concept is applicable to both product oriented and service oriented organizations. The orientation of management should be the same whether the product is tangible goods or intangible service. This orientation or concept should focus on the firm remaining sensitive to market needs, by the management of the organization being aware of the nature of market demand and changes that occur there in. The nature of market demand and the need to supply it effectively, although with profit, should be the driving force behind the decisions of all company’s managers, not just its marketing function.
The application of marketing concept cuts across all business ventures, institutions like deposit money banks (DMB) inclusive. Banks are profit oriented service rendering organization with customers/consumers to satisfy their needs. Needs come in various forms like accepting deposits, giving credits, money transfers etc. Deposit money Banks should perform these functions to the satisfaction of their customers without prejudice to the organizational goal. The question remains to what extent do the Banks in Nigeria live up their expectation in terms of customer satisfaction?
The question becomes relevant because of the unethical way some Banks operate and un-courteous manner in which their officials treat their customers; the much emphasis on profits at the expense of their customers; the long queues of customers generally observed in the Banking halls and above all, the mismanagement syndrome that has characterized deposit money Banks’ operations in Nigeria which has led to the failure of many of such Banks and sacking of most chief executives of banks.
1.2 Statement of problem
Most deposit money Banks in Nigeria seem not to have incorporated or adopted marketing concept in their provision of banking services. The absence of the application of marketing concept is evident in the provision of services of most deposit money banks. The application of marketing concept is a total commitment that requires every integral unit of the organization of participate. The lack of its application in most of our banks is observed from the first contact point (the gateman) through the cashiers and other officers to the manager. The complaints of customers cut across the staffers of the bank.
The huge profits declared by the deposit money banks every year are mostly at the expense of their customers’ satisfaction.
The incessant bank failures and financial distress in the industry is traceable to the neglect of the concept of integration, lack of proper communication, co-ordination, and co-operation among the management and staff of such banks.
1.3 Objectives of the study
The major objective of this study is to measure the effect of marketing concept on customers satisfaction in Nigeria financial institution.
While the specific objective were to:
i. Measure the effect of service quality on customer satisfaction.
ii. Measure the relationship between marketing concept and customer satisfaction (profitability).
iii. Examine the reason why depositors hold more than one account with different banks.
1.4 Research question
i. What are the effects of service quality to customer satisfaction?
ii. Does marketing concept has any significant effect on customer satisfaction?
iii. What are the reasons why customers hold more than one account with different banks?
1.5 Research hypothesis
In the course of this study, the following hypotheses were formulated.
H01: Service quality does not have any significant effect on customer satisfaction.
H02: There is no significant relationship between marketing concept and customer satisfaction.
H03: Customers do not have relevant reason to hold more than one account
1.6 Significance of the study
The essence of marketing concept is customer satisfaction by an organization seeing their operation from the customer’s point of view, integrating their resources, making profitable and sales volume. The application of marketing concept therefore favors most companies whose products or services satisfy best. This means that the more customers an organization satisfies their needs, the sales and the more the profit.
It is expected that at the end of this exercise, the management of Diamond bank Nigerian Plc will see the benefits associated with the adoption of marketing concept in their business operation. They will fully integrate their resources for optimal result. The recommendations and suggestions made at the end of the study will improve their operation and annual profit. Ultimately, the banking public will benefit from their improved services.
1.7 Scope of the study
The banking industry is made up of about fifteen (15) consolidated firms with a capitalization fund of over twenty-five billion naira each. There are other microfinance banks which also complement the banking industry. The scope of the study therefore will cover an in-depth review of marketing concept, customer relationship management, customer purchase behavior, integrated marketing communication policies and information system and its effect on the objectives of the firm.
1.8 Limitation of the study
The researcher wishes to say frankly that this study was carried out within limits imposed by considerations of money and time involved.
The researcher was also constrained by the attitude of respondents. Some were skeptical in completing the questionnaire. They claimed to be too busy and could not make themselves available for oral interview to complement the facts in the questionnaire, while some bank staff were too officious and saw the completion of the questionnaire as divulging official information.
The researcher could not lay hands on any previous work done directly on the topic to study to review the spirit of the extensive literature research conducted. There were some logistics problems in reaching all the consumers of the banks product.
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