ABSTRACT
This project investigates the effect of
marketing concepts on the performance of commercial banks, focusing on Eco Bank
and First Bank Nigeria Plc. The study's primary objective is to explore how
marketing strategies influence bank performance, customer retention, and
satisfaction. Employing a descriptive cross-sectional research design, the
study encompasses the entire commercial banking sector, with a sample size of
90 staff members selected from the two banks. Data collection involved primary
sources through questionnaires and secondary data from bank reports, analyzed
using profit regression models and correlation coefficients.
The findings reveal that the marketing
concept is not extensively applied within the banks, highlighting a need for
increased orientation on its benefits. The analysis showed that marketing
strategies significantly affect customer retention, with a pseudo R-square
value of 0.55, indicating that effective marketing practices can account for
55% of the variations in customer retention. Furthermore, a strong positive
correlation (0.897) exists between marketing concepts and bank performance,
suggesting that well-implemented marketing strategies can substantially enhance
overall performance. Customer satisfaction is also positively influenced by
marketing efforts, with a pseudo R-square value of 0.681, indicating that 68%
of customer satisfaction variations can be attributed to marketing practices.
The study concludes that the long-term
success of commercial banks heavily relies on the effective implementation of
marketing concepts. The marketing concept, which emphasizes total customer
satisfaction, is crucial for developing beneficial relationships between banks
and their customers. The findings underscore the importance of customer
retention and satisfaction in achieving corporate performance goals. To remain
competitive, banks must innovate and anticipate customer needs by offering new
services, ensuring that customer satisfaction remains central to their
operations. The study recommends a shift in focus from internal perspectives to
customer viewpoints, better coordination of marketing programs with other
business activities, and a profit-oriented approach centered on customer
satisfaction.
Overall, the project provides valuable
insights into the significant role of marketing concepts in enhancing the
performance of commercial banks, suggesting that strategic marketing practices
are essential for sustainable growth and competitiveness in the banking
industry.
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3
Objective of the Study
1.4 Research
Questions
1.5 Hypotheses
1.6 Significance of Study
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework
2.1.1 Application of the Marketing Concept in
Financial Institution
2.1.2 The Marketing Concept as a Survival Strategy in
Banking Industry
2.2 Theoretical Framework
2.2.1 Market Focus Theory
2.3 Empirical Framework
2.4 The History of Selected Banks
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1 Research Design
3.2 Area of the Study
3.3 Population of the Study
3.4 Determination of Sample Size
3.5 Method of data Collection
3.5.1 Validity of Research Instrument
3.5.2 Reliability of Research Instrument
3.6 Sampling Techniques
3.7 Method of Data Analysis
3.8 Model Specification
CHAPTER
FOUR
PRESENTATION
AND ANALYSIS OF DATA
4.1 To
Ascertain the Extent to Which Marketing Concept is Applied by the
Commercial
Banks
4.2 Effect
of Marketing Concept on Customer Retention
4.4 Effect
of Marketing Concept on Customer Satisfaction
CHAPTER
FIVE
SUMMARY,
CONCLUSION, RECOMMENDATION
5.1 Summaries
of Findings:
5.2 Conclusions
5.3 Recommendations
REFERENCES
APPENDIX: QUESTIONAIRE
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Marketing has become increasingly a vital
ingredient for business success. Marketing virtually affects our day-to-day
lives, it is embedded in everything we do (Kotler, 2006) Marketing practices
are continually being refined and reformed in virtually all industries to
increase the chances of success. Marketing is very important in an
organization, that one could equate it with finance. While finance may be
considered as the life wire of business, especially startup capital, marketing
is the only thing needed so that the capital invested could be recouped and for
the business to continue to exist. There is no business that exists except
there is market for such business. While market may be viewed as a point where
exchanges takes place, marketing is considered as a set of human activities
directed at facilitating and consummating mutually satisfying exchange
relationship between the marketer and the market (Linus, 1997). This definition
justifies the dependence of business on marketing. Marketing being the bedrock
for business survival is commonly believed to have progressed through five
distinct phases of evolution since the beginning of the time.
A brief history of marketing in Nigerian
banking, shows how economic, political and social environment have influenced
the marketing of financial services in Nigeria. Although conventional banking
began in Nigeria in 1891 with the establishment of the African Banking
Corporation which later became Bank Of British West Africa, little has been
done in marketing because the banks were established mainly to serve the
foreigners (that is the British) commercial interests that existed then in the
Nigerian colony; so they were not interested in developing new banks or clients
(Abdullahi, 2012).
Studies have shown that Nigeria has the
second largest financial services sector in Sub-Saharan Africa, after South
Africa and it is fast growing and expanding internationally (Becker, 2008). Marketing in years past has
played a significant role in the banking system of any country and Nigeria is
not an exception. Marketing is the most useful and prime tool for the banking
sector and it aims at satisfying customers and bankers since the products of
banks have to be marketed in order to tap the potential customers. Due to the
level of globalization which has turned the world into a global village, the
Nigerian banking system is facing tough competition from global banks. In this
situation it is a must to have a functional marketing department and
appropriate marketing strategy. In the current scenario, marketing is a very
useful tool for the banking sector in attracting customers for their various
products. The old days are gone for banking wherein the customer had to walk
into his bank and ask for services, due to increased competition, it has become
imperative for banks to use marketing practices to increase their market share
by providing awareness of their products to their prospective customers. Banks
have to provide knowledge of their products to their customers and create
enlightenment of their products among the prospective customer and for that
marketing has become an important tool which connects the customers and
products offered by the bank. Banks need to break their shell and design new
avenues for reaching their target group. The emergence of new generation banks
and other foreign players have also increased the competition amongst banks
thus a clear alignment of the needs and wants of the target group and the
marketing strategies of banks is the key to revenue generation and also the
solution necessary to attain growth and survival (Mohan, 2009).
The importance of marketing is viewed to the
extent that financial success is said to depend on marketing ability. Finance,
operation, accounting and other business functions will not really matter if
there is not sufficient demand for products and service so the company can make
a profit.
According to Kofo (2006), marketing provides
the necessary cash and credit to produce, transport, and store, promote, sell,
and buy products. The foregoing are however achieve through revenue generated
from sales. The traditional business focus is to produce and sell to the market
(customer), whereas, a firm can never be sure that customers will want to buy
its product. Therefore, the modern marketing idea emphasizes the identification
and understanding the needs and wants of customer in the market, and adapting
the operation of the organization to deliver the right goods and services more
effectively and efficiently than its competitors for their satisfaction and
mutual benefit.
According to Paul (1995), satisfying the
customer is what marketing concept is basically all about. Marketing fuels
competition and better deals for consumers, it encourages innovation in an
attempt to satisfy customers better. The basic premise of the marketing concept
is that its adoption will improve business performance. Marketing is an acid
test of the effect that its use has key corporate indices such as profitability
and market share. In line with this, banks today are operating in a highly
competitive and rapidly changing environment. In the changing economic scenario,
a professional approach to business development is essential and the survival
of a banking institution depends on its ability to take up challenges coming up
in the environment. Developing business through marketing of bank’s services is
one of the crucial areas which need attention of the bankers to ensure
profitable survival. Bank marketing like any other marketing philosophy, in any
context, refer to the need satisfaction of the institution clients. The basic
step involves identifying the needs of the customers and developing products to
suit their needs or modifying the existing products accordingly. It also
requires the need for foreseeing wants of the customers in future and
developing suitable products of their requirements.
1.2 Statement of the Problem
The Nigerian banking industry displays one of
the highest level of marketing resource utilization but when investigated
exhibits a high degree of marketing myopia in their activities (Osakwe, 2003).
This heightened level of poor marketing concept application and knowledge in
the sector is said to partially account for the low quality of service delivery
Cravens (2001); Robinson (2014); Kotter (2004); and Gronros, (2000).
Research shows that unethical marketing
behavior impacts consumer’s behavior in the market place. Nigerian banks are
mostly found of this behavior which resulted to poor handling of customer
complaints. Lack of courtesy, failed promises, the pain and stress which
customers of certain banks are made to go through in a single transaction can
be highly frustrating and devastating. The long queues and huge crowds in the
banking halls can also be discouraging most time, especially when the weekend
is near. Most times, these long queues are as a result of the cashier pushing
duty to one another, as to who is to attend to the customer or not. The issue
of money transfer in banks is one major problem that customers of certain banks
have been made to experience. In most cases, the customer hardly receives the
payment of the money transferred in his account immediately. Apparently, it may
be concluded that the impact of marketing concept particularly as it relates to
implementation among these is statement implementation gap need to be
investigated and in the instance, Zenith bank Plc Umuahia Branch is used as a
case study.
1.3 Objective of the Study
The
broad objective of the study is to investigate the effect of marketing concept
on the performance of selected banks in Abia State, Nigeria. Other Subsidiary objectives
are to:
I.
Examine the effect of
marketing concept on customer retention.
II.
Ascertain the
relationship that exist between marketing concept and bank performance
III.
Examine the effect of
marketing concept on customer’s satisfaction
1.4 Research Questions
The
following research questions are:
I.
How does marketing
concept affect customers retention
II.
How is marketing concept
related to banks performance
III.
What marketers concept
influence customers satisfaction
1.5 Hypotheses
The
formulated hypotheses are stated in their null forms:
HO1:
marketing concept does not influence customers retention.
HO2:
There is no significant relationship between marketing concept and banks performance
HO3:
There are no marketing concepts and customer’s satisfaction.
1.6 Significance of Study
The importance and relevance of marketing
concept in Banks in Nigeria cannot be over emphasized or under-estimated, been
that marketing orientation use to enhance profitability. There will be serious
implications in many ways. For example the following are likely essential
benefit from this study.
Customers: the customers will benefit as the service render to them by the bank
will be satisfactory
Banks: the
core of the marketing concept is to help organization to achieve their
objectives and also to understand your customer and their importance to your
business. Banks benefits profitably. It would lead to customer satisfaction and
retention.
Academia: the
study would be helpful to any researcher carrying out a research of this
nature. It could serve as a resource material
Economically: it will help in establishing a functional marketing department in banks
there by creating more employment opportunities for our marketing graduates and
others.
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