ABSTRACT
This research examines the effect of relationship marketing practice on bank performance. The objective is to ascertain the effect of relationship marketing practice in MOUAU micro-finance bank. The researcher used Taro Yahmen sample determination and primary data were adopted in getting the required information. In testing hypothesis probit regression analysis and correlation coefficient were used for they study data were obtained from 20 respondents of the marketing practice on bank performance. Based on findings, the researcher recommends that the implication of goods is moderately positive and direct relationship customer loyalty and market share. Also it can be concluded that the customer loyalty within the banking industry play a major role in improving the market share.
TABLE OF CONTENTS
Title
page
i
Declaration
ii
Certification
iii
Dedication
iv
Acknowledgement
v
Table
of Content
vi
List
of Tables
ix
List
of Figures
x
Abstract
xi
CHAPTER ONE
1.0
INTRODUCTION 1
1.1 Background of the Study 1
1.2
Statement of the Problem 4
1.3 Objectives of the Study 5
1.4 Research Questions 6
1.5 Research Hypotheses 6
1.6
Significance of the Study 7
1.7 Scope of the Study 8
CHAPTER TWO
2.0 REVIEW
OF RELATED LITERATURE 9
2.1
Conceptual Framework 9
2.1.1 The effects of relationship
marketing on consumer satisfaction: 11
2.1.2 Essential measures of controlling
consumers behavior 12
2.1.3 Benefits of Relationship Marketing
to Bank 15
2.1.4 Relationship Quality
16
2.2 Theoretical Framework 16
2.2 Empirical Review 20
CHAPTER THREE
RESEARCH METHODOLOGY 24
3.1 Research
Design 24
3.2
Area of the Study 24
3.3
Population of the Study 25
3.4
Sampling Size and Sample Procedure 25
3.5
Source of Data and Method of Data Collection 27
3.6
Validity of the Instrument 27
3.7
Reliability of the Instrument 27
3.8 Method of Data
Analysis 27
3.9 Model
Specification 28
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
4.1
Extent of relationship marketing practices in MOUAU
Micro
Finance Bank 30
4.2
Extent to which marketing research influences the
Profitability
of MOUAU Micro Finance Bank 31
4.3
Effect of Customer Satisfaction on Profitability 32
4.4
Effect of Customer Retention on Return on Investment (ROI) 33
4.5
Relationship Between Customer Loyalty and Market Share 35
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS 38
5.1
Summary of finding 38
5.2
Conclusion 40
Recommendations 41
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Banking
industry is an important sector in the business world which has a growing
impact on all other sectors of the economy because it render financial services.
At this age of competition financial institutions were not left out as they are
seriously affected by the level of competition both locally and internationally
(Adekunle, 2014).
The
business environment for banking industry today is highly volatile; Nigerian
banks therefore needs to develop effective technique relationship management to
enhance the interaction of customers and the bank staff. The complexity in the
banking industry has made bank managers to focus on how to create close
affiliation with their customers. No wonder why Nigeria banks now create a
separate department in the bank known as customers care unit to address
customer issues and complaint in order to ensure that customers get value for
their money thereby enhancing customer loyalty, building and maintaining
customer’s cordial relationship in order to achieve an advantage that can lead
to customer retention and increase profitability. According to Doyle (2012) it
is more profitable to have a long term relationship between a customer and a
company rather than a one off transaction.
Furthermore,
loyal customers can provide the foundation for growth which leads to
competitiveness in the industry. Also, the belief that relationship marketing
(RM) investment builds stronger, more trusting customers relationship and
improves financial performance has led to massive spending on customer
relationship programme (Morgan and Hunt,
2013)
Relationship
marketing is all about acquiring new customers and retaining existing
customers. The concept of relationship marketing has received a great deal of
attention from Scholars in the field of marketing. The concept has been
investigated from many perspectives and examined in many ways indicating its
conceptual and practical importance. Relationship marketing concept is based on
the paradigm of a true balance between "giving and getting" as a key
benefit to encourage an active role and is conducive in delivering two- way
value, where loyalty is based on trust and partnership, will prove to be one of
the most significant policies to be pursued in development and sustenance of
competitive advantage (Ismail, 2013, Gronroos, 2014).
Christopher
(2012), opined that the real purpose of business is to create and
sustain mutually beneficial relationships, especially with selected customers.
With the main proposition which assume that successful relationships is the
two-way flow of value.
Relationship
marketing usually results in strong economic, technical and social ties among
the stakeholders parties thereby reducing their transactions costs and
increasing exchange efficiencies included in relationship marketing which are
not only buyers or sellers exchanges but also business partnerships, strategic
alliances, and cooperative marketing networks. The relationship typically
involves seller- customer exchange, but it could involve any stakeholder's relationship
(Morgan and Hunt, 2012 Gronroos 2014).
Ismail
(2014) opines that relationship marketing emphasizes that relationships are
partnerships with emphasis on social bonding, co-operation, and joint problem
solving, sharing resources and activities, and basing relationship on common
goals. He, however, challenged that the benefit should be relational and dyadic
too. Most of the studies have been emphasizing the effect of relationship
marketing on organization performance neglecting customer benefits.
Moreover, relationship marketing emphasizes
that long-term relationships are mutually beneficial. In any genuine
relationship, both parties involves should be beneficiaries of the outcome of
such relationship. Ismail (2009) observed that if genuine partnerships, as
relationship marketing suggests exist, relational quality and relational
benefits must be of great value
1.2
Statement of the Problem
Severe
competition experienced in banking industry today makes bank managers to be
desperate such that ‘Bank A’ manager does not only see ‘Bank B’ manager as
competitor but a branch manager of the same Bank sees each other as a
competitor. This increased level of competition has made bank managers to focus
on how to be in a close contact with their customers in order not to lose their
active customer to their presupposed competitors (Adekunle, 2014).
Bank
services are increasing in Nigeria, yet the level of failure in their services
indicate that ineffective relationship with customers seems to be pronounced.
This gap indicates that there is much to learn about how to develop close
contact with customer using the appropriate relationship strategies (Adekunle,
2014).
Banks
generally today has become a chameleon in nature thereby changing from one
service provision to the other, most time combining many services together
relocating or establishing another branch so as to meet the needs of their
customers and to show to the generality of public that their services are
unique and better than the others.
However,
these services or branches established have not translated to customer
satisfaction as customers’ experienced human traffic while trying to access
these services. This has destabilized customers thereby forcing them to open
more than one account across the banking industry in order to satisfy their
financial need. This movement of customers from one bank to the other has
created serious apprehension among the banks executives thereby leading to the
provision of customers’ service point in most bank branches across the country for
the purpose of having a relationship that can lead to a consistent patronage by
their customers (Udoh, 2012).
It
is on the basis of the inability of Nigerian bank managers to take cognizance
of the impact of relationship marketing
orientation on bank performance that
this study will be carry out.
1.3 Objectives of the Study
The
broad objective of this study will be to examine the effect of relationship marketing
on bank performance of Microfinance banks in Michael Okpara university of
Agriculture, Abia state.
The
specific objectives are;
i.
To ascertain the effect of relationship marketing on the profitability of the selected
bank.
ii.
To determine the effect of relationship marketing on the return of asset of the
bank.
iii.
To empirically investigate the effect of relationship marketing on the return
of investment of the bank.
iv.
To evaluate the effect of relationship marketing on the market share
of the bank.
1.4 Research Questions
1.
What are the effect of relationship marketing on the profitability of the bank?
2.
To what extent does relationship marketing affect return of asset of the bank?
3.
How does relationship marketing affect the return of investment of the bank?
4.
What are the effects of relationship marketing on the market share of the bank?
1.5 Research Hypotheses
The
following hypotheses will be stated in null form;
H01:
Relationship marketing has no significant effect on
profitability of the bank
H02:
Relationship marketing has no significant effect on return of asset of the bank
H03:
Relationship marketing has no significant effect on return of investment of the bank
H04:
Relationship marketing has no
significant effect on market share of the bank.
1.6 Significance of the
Study
The
research work will focus on the impact
of relationship marketing orientation on bank performance with reference to
mouau microfinance bank. The research will be immense benefit to the following
group;
Management
of bank will find this work useful, on
how to related well with their customers
Policy
maker will also benefit from the work in that, it will recommend ways in which
bank will relate with their customers..
Finally,
Researchers and students interested in a similar field of study in future will
find this work useful conceptual guide and reference material.
1.7 Scope of the Study
The
research work will focus on the impact
of relationship marketing orientation on bank performance in selected
commercial banks in Abia state.
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