ABSTRACT
This study examined the effect of banks’ marketing strategies on deposit mobilization. Thus, this work will not only stress and present the tools for good marking strategies but will also help to know how to apply them in order to mobilize more deposits and mostly time series. The study employed the Ordinary Least Squares [OLS] involving multiple regression technique in order to determine the effect of banks’ marketing strategies on deposit mobilization between the period 2005 and 2016. Deposit mobilized by banks was adopted as the dependent variable while Corporate Social Responsibility, number of complaints resolved, Personnel expenses, advertisement and branches networks were the independent variables. The empirical result shows that corporate social responsibility, number of complaints resolved, personnel expenses and advertisements had a significant effect on deposit mobilization by banks in Nigeria. This research therefore recommended amongst others, that banks should invest extensively on corporate social responsibility and personnel expenditure and desist from operating non-vibrant branches.
TABLE
OF CONTENTS
Title
Page - - - - - - i
Certification
- - - - - - ii
Dedication - - - - - - iii
Acknowledgements
- - - - - - iv
Abstract
- - - - - - v
Table
of Contents - - - - - - vi
CHAPTER
ONE
1.0 INTRODUCTION
1.1
Background to the Study - - - - - - 1
1.2
Statement of the Problem - - - - - - 3
1.3
Objectives of the Study - - - - - - 4
1.4
Research Questions - - - - - - 6
1.5
Research Hypotheses - - - - - - 7
1.6
Significance the Study - - - - - - 8
1.7
Scope of the Study - - - - - - 8
CHAPTER
TWO
2.0 REVIEW OF RELATED
LITERATURE
2.1
Conceptual Framework -
- - - - - 10
2.1.1
Marketing Concept - - - - - - 10
2.1.2
Marketing and Bank Services - - - - - - 12
2.1.3
Marketing Strategies - - - - - - 13
2.1.4.
Market- Leader Strategy -
- - - - - 17
2.1.5
Market- Challenger Strategy
- - - - - - 18
2.1.6 Market- Follower Strategies - -
- - - - 18
2.1.7 Market- Nicher Strategies - - - - -
19
2.1.8 Concept Product - - - - - 19
2.1.9 Product Mix -
- -
- -
21
2.1.10
Product- Marketing Strategy - - -
- - 22
2.1.11
Concept of Market Segmentation - - -
- 22
2.1.12
Concept of Marketing Mix -
- -
- 25
2.1.13
The product (Development, Mix or Range) - - -
29
2.1.14
Concept of Pricing -
- -
29
2.1.15 Distribution and Selling - -
- 30
2.1.16
Concept of Promotion -
- - - - 32
2.1.17
Market Research - - -
- -
- 33
2.1.18
Need for Marketing in the financial Service Industry - 33
2.1.19
Constraints to the Marketing of Banks Services in Nigeria 36
2.1.20
Increasing Calls for Efficient Marketing -
- 39
2.1.21
The Growing Difficult in Differentiating Market Events 40
2.1.22
Fewer Resources to Attend the Growing Number of Events 41
2.1.23
The Growing Competition In Financial Services -
- 41
2.1.24
The Complex Nature of Financial Products and Services - 42
2.2
Theoretical Review - - - -
- -
43
2.2.1
Resource- Based Theory - -
-
- - 43
2.2.2
Dynamic Capabilities Theory - -
-
- 43
2.2.3
Marketing Impact Theory - -
-
- - 44
2.2.4
Marketing Efficiency Theory -
- - - 45
2.3
Empirical Review -
- - - 45
2.4
Summary of Literature Review -
-
- - 54
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Research Design - - - - - - 56
3.2 Method of Data Collection - - - - - - 56
3.3 Model Specification - - - - - - - 57
3.4 Method of Data Analysis - - - - - - - 59
3.4.1 T- statistic -
- - - - - - - - 59
3.4.2 F- statistic - -
- - - - - - - 60
3.4.3 R-squared -
- - - - - - - - 60
3.4.4 Durbin- Watson statistic - - - - - - - 60
3.5 Description of Variables - - - - - - - 60
3.5.1 Dependent Variable - - - - - - - 60
3.5.2
Independent Variable - - - - - - - 61
[
CHAPTER FOUR
4.0 DATA
ANALYSIS AND DISCUSSION OF FINDINGS
4.1 Data Analysis - - - - - - - - 63
4.2 Test of Hypothesis - - - - - - - 79
4.3 Discussion of Findings - - - - - - - 82
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
5.1 Summary of Findings - - -
- - - - 86
5.2 Conclusions - -
- - - - - - 87
5.3 Recommendations - - - -
- - - - 88
References
- - - - - - - - - 89
Appendix
- - - - - - - - - 98
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There
is increasing evidence which suggests that today, more than ever before, banks
are working in an atmosphere of anxiety and stress (Oke, 2012). A fundamental
and dynamic change has emerged in the banking industry. Such structural changes
include downsizing, mergers, acquisitions and restructuring, changing products
and services and introduction of new technology. The importance of all these
and other factors to the survival of the banks necessitated the iiitro4iction
of different marketing strategies by the different banks (De Nicolo &
Gianni, 2003). Marketing is not just physical selling of goods and services, it
entails much more. Marketing implies the identification of customers, their
needs, what motivates them, effort to satisfy their needs, continuous appraisal
of competitions and above all the willingness to improve on banking services
and carry out useful innovation (Brassington & Pettitt, 2000). Little
wonder, marketing of financial services has attracted considerable attention in
recent times especially within the context of fundamentals of marketing
(Starton, 2001). Due to the excessive competition in the banking sector, the
desire for marketing strategies arose in banks. This is against the backdrop
that the essence of banks’ marketing strategies is to meet the need of the
aforementioned needs of the customers, mobilize more deposits by banks as well
as make profit for their shareholders.
Banks
marketing strategies and allied financial services are most relevant and
necessary for the growth of most economies including Nigeria. These services
are numerous and relate to not only the solution of one financial need or the
other hut the entire citizenry. Due to dynamism in the banking industry and the
need to keep pace with economic growth, economic development and economic needs
as well as meet the financial needs of the Nigeria populace, a number of the
services have emerged (Gruca & Rego, 2005). Sadly, in the past, banks in
Nigeria could hardly be said to be aggressively marketing-oriented. But in recent
times the Nigerian banks have become highly marketing-oriented due to
increasing competition, customer; complexity and education. As a result of
these, the mode of banks’ marketing has also been changing over the years with
the tastes and sophistication of the people and business community put into
consideration. It suffices at this point to say that banking industry operates
in an environment that is partially similar to a perfect market having almost
the same products and services sold but with variation in prices. This is seen
in the different rates charged on services. products, advances and interest
paid on deposits by different banks (Nwankwo. Eze and Nwankwo, 2014).
It
needs not be over emphasized that all the banks are striving for survival as a
result of these intense competitions. They compete through the quality of
products and services they provide, location, customer loyalty, personnel
motivation, social responsibility, building and premises and ownership
structure.
Competition
has also been intensified through innovation and adoption of modern
technological devices like computer, electronic payment system, debit cards etc
(Akinyele, 2011). These competitive forces pose some threat like fear of new
entrants, bargain powers of the buyers (customers) and suppliers (Banker) and
fear of similar products or services.
Within
the context of these competitions, one wonders whether the marketing strategies
adopted by the banks influence the level of deposit mobilization in Nigeria. To
unravel this puzzle motivated this study. Marketing is the primary tool used in
the banking sector since it is of immense benefit to both customers and
bankers.
1.2 STATEMENT OF THE
PROBLEM
Banks
marketing strategies constitute a part of financial services available in Nigeria.
These strategies vary in nature and the manner in which they are provided.
Given that these banks are many, competition becomes inevitable. In the face of this,
marketing has continued to assume increasing importance in the survival and
growth of these banks in Nigeria.
An
efficient marketing strategy attracts more customers to deposit their money
with the banks which is the raw material with which banks operate. When these marketing
strategies are not made known clearly or rendered to the customers effectively,
it will reduce the volume of fund available to the banks thus making them
unable to meet their financial obligations, granting of loans and advance, meeting
up with their customers’ withdrawals and C.B.N. requirements. The availability
of fund determines the volume of credit to be extended to the economy. When it
is high, it will increase investment and thus employment rate which leads to
economic development and vice versa. Conversely, if it is low, it reduces
investment and economic development. However, there is an increasing controversy
whether these strategies would field increase in deposit mobilized by banks.
Goyit and Namdu [2016] investigated the relationship between service quality
and deposit mobilization in Nigeria banks. Findings revealed that service
quality is what customers need from their bankers in order to patronize them.
Also, Nwankwo, Eze and Nwankwo [2014] argued that different rates changed on
services products, advances and interest paid on deposit are what attract
customers to banks and subsequently increase their deposit mobilization.
According
to Akinyele [2011] banks mobilize more deposit through innovation and adoption
of modern technological devices like computer, electronic payment system, debit
cards, etc. there is doubt whether marketing strategies are the effective tools
for enhancing deposit mobilization by banks. This is the problem this research
work attempt to address.
1.3 OBJECTIVES OF THE
STUDY
The
broad objective of the study is to investigate the effect of banks’ marketing strategies
on deposit mobilization using selected commercial banks in Nigeria.
Specifically
the study aims to achieve the following:
(i) To
identify the effect of corporate social responsibility expenditures on total deposit
mobilized by commercial banks in Nigeria.
(ii) To
investigate the effect of number of complaints resolved on total deposits
mobilized by commercial banks in Nigeria.
(iii) To investigate the impact of personnel expenses on total deposits
mobilized by commercial banks in Nigeria.
(iv) To
investigate the impact of advertisement and other forms of publicity on total
deposits mobilized by commercial banks in Nigeria.
(v) To
investigate the impact of branch networks on total deposits mobilized by commercial
banks in Nigeria.
[vi] To
examine the aggregate of the marketing strategies on corporate
responsibilities.
1.4
RESEARCH QUESTIONS
In
line with the specific objectives, the study seeks to provide answers to the
following questions:
(i) To
what extent do corporate social responsibility expenditures affect total deposits
mobilized by commercial banks in Nigeria?
(ii) To
what extent does number of complaints resolved by commercial banks affect total
deposits mobilized by commercial banks in Nigeria?
(iii) What is the impact of personnel expenses on total deposits
mobilized by commercial banks in Nigeria?
(iv) What
is the impact of advertisement and other forms of publicity on total deposits
mobilized by commercial banks in Nigeria?
(v) What is the impact of branch
networks on total deposits mobilized by commercial banks in Nigeria’?
1.5
RESEARCH HYPOTHESES
The
following hypotheses are raised in line with the objectives of the study and
they include:
Hoi:
Corporate social responsibility expenditures do not have significant effect
on total deposit mobilized by commercial banks in
Nigeria.
H02: Number
of complaints resolved by the commercial banks does not have significant effect
on total deposits mobilized by commercial banks in Nigeria.
H03: Personnel
expenses do not have significant effect on total deposits mobilized by
commercial banks in Nigeria.
H04: Advertisement
and other forms of publicity do not have significant impact on total deposits
mobilized by commercial banks in Nigeria.
H05: Branch networks do not have
significant impact on total deposits mobilized by commercial banks in Nigeria.
1.6
SIGNIFICANCE OF THE STUDY
[i] To the Banks
The
philosophy of marketing has unavoidably remained important in relatively all
business and quasi business sectors of the economy.
Banks
are no exception thus, with the competitiveness and dynamic nature of business
environment, resources, scarcity, future and shock evident in the banking sector,
it became highly necessary to embrace the concept of marketing as a survival
strategy. Thus, this work will not only stress and present the tools for good
marketing strategies but will also help the banks to know how to apply them in order
to mobilize more deposits and increase their overall performance.
(ii) To Academics
It
will also provide students of Banking and Finance as well as accounting
discipline as a basic for future research work.
1.7 SCOPE OF THE STUDY
This
research work is concerned with the effect of Banks’ marketing strategies on
deposit mobilization (a study of selected commercial banks from 2005 to 2016).
The year 2005 was considered the starting point for the study because emphasis
in the study is restricted to the post-consolidation era in the banking
industry in Nigeria. The banks involved are: UBA Plc, GTB Plc and Zenith Bank
Plc.
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