Marketing is a new phenomenon in the
Nigerian banking sectors. Banks in
general were slow in embracing the marketing concept. Prior to 1986 banks were
practicing armchair banking with little innovation. But with the advent of SAP (Structural
Adjusted Programme) in 1986, the entire economy was liberalized and many new
banks came into existence. Consequently, the banking environment became very
competitive and banks have no option than to imbibe in marketing philosophy. In
carrying out this research study, an attempt has been made to find out and
establish the relationship between three important aspects of bank marketing,
namely, marketing efforts, product innovation quality of service and its effect
on customer patronage. These innovations services of the bank have largely
helped in retaining existing customers and also creating potential customers.
TABLE OF CONTENTS
Title page ii
Certification / Approval page iii
Table of contents. vi
List of Tables vii
to the study 1
of the problem 2
Development of Banking in Nigeria
Background in Union Bank of Nigeria PLC
of the study 2
of the study 3 – 4
of the study 4
of the study 5
methodology and hypothesis 5 – 6
REVIEW 7 – 20
THREE: RESEARCH METHODOLOGY
of Research Hypothesis 21
of Research Question 22
selection of the case study 22
population and sample 22
used for Research 23 – 24
of Data Analysis 24
FOUR: DATA PRESENTATION AND ANALYSIS
of Results 25
of Hypothesis 26
of Research Question 34 – 35
CONCLUSIONS AND RECOMMENDATIONS
Summary 36 - 37
Recommendation 39 – 40
1.1 BACKGROUND OF THE STUDY
The world economy faces many
challenges that test every nation’s ability to meet the demands of a global
market place. In response to and as a
reflection of this development, the Nigerian economy in advancing and
meaningful, the component industries and sector of the economy must in
consonance respond to the same challenges.
Nigerian banking industry is one of such industries undergoing the greatest
liberalization of the licensing of a new financial institution gave birth to
new banks and non-bank financial institutions.
proliferation presets a special challenge, which has led to keen competition in
the banking industry.
challenge comes from the technological environment. Electronic banking has posed a great
challenge especially to the older banks because of their size and location of
their rural branches where there are no facilities.
these abound with the availability of differentiated products indicate to an
extent the most competitive period in the Nigerian banking strategies, an
increase in the quality of bank services, though under a restrictive monetary
1.2 STATEMENT OF PROBLEM
has now become a large and complex service industry, there by making the task
of identifying the changing needs of customer as complex as the marketing task
in the product industries. Due to the
rapid changes in customer needs and the business environment, the continued
success of a bank will depend on its ability to respond rapidly and correctly
to the changing environment and provide the broadest range of profitable
financial services to the greatest number of people. It is therefore imperative that banks should
thoroughly appreciate the importance of marketing philosophy in forming an
integral part of the corporate objectives of banks.
are the days, when banks waited for business, the banks now have to look for
the services they can offer and go out of their way to approach the client to
whom such services are sold. They must
take pains to study the potential customer requirement before approaching them
and the services must be offered with maximum satisfaction to existing and
is no doubt a revolution, a transition from passive and quiet banking to the
active and aggressive banking.
primary objective of this study is to identify the relevance of the marketing
concept (marketing strategies, mix and importance of quality) to the banking
services in Nigeria.
it is intended to determine.
significant relationship between marketing efforts adopted by the bank and
significant relationship between product innovation and customer patronage.
identify the effect of quality of services on customer patronage.
1.4 SIGNIFICANCE / JUSTIFICATION FOR THE
Banking occupies a central
place in a nation’s financial system, and it is an essential process for the
growth of the national economy across the world today, concurrent forces of
regulatory reforms, intense competition and technological advancement have
pushed banks into now and unfamiliar directions.
In Nigeria, the
banking industry is undergoing the greatest challenges today. These challenges can be closely associated
with the adoption of the Structural Adjustment Programme (SAP) aimed at
improving the health of the nation’s economy.
Essentially; an attempt is being made to reduce the size of the
government expenditure while economic prices are to be determined increasingly
by market forces of demand and supply.
As part of these
programmes, the financial system of which the banking sector is predominant was
liberalized. This came in two major
respects viz, market entry liberalization and deregulation of interest
creates. As a consequence, the number of
banks has skyrocket from 40 in 1985 to 50 at the end of 1996. Various policies were put in place to ensure
public interest. However they resulted
in a myriad of specialized banking programme.
From the scenario
described above, the result is a cutthroat competition among the banks. This has therefore placed the customers in
their rightful position as “kings”. This
has led banks in general to be very innovative in services and purposeful in
With an increasing number
of commercial banks, “the new challenges of emerging services” and the
activities of legalized bureau-de-change.
All these abounding with the availability of differentiated products
indicates to an extent the most competitive period in the Nigerian banking
industry. Thus, banks are compelled to
get engaged in strong marketing strategies, an increase in the quality of bank
services, though under a restrictive monetary policy regime.
Many banks are also
becoming financial supermarkets offering a diverse range of financial services
and many other are involved in the trade of exotic financial instruments with
significant tendency away from orthodox banking.
So far, in this era of
deregulation, one significant consequence of the financial liberalization
policy is the high spate of competition which was brought about by the
considerable physical expansion in the banking industry, have meant that banks
be highly innovative and aggressive in all the facets of finance. The seller’s market in which banks operated
neither to, and which could be backed up by highly conservative doctrines has
now changed into a buyers market requiring new concepts, ideas and orientations
in the field of bank marketing to attract new customers and retain existing
As a result of the facts
that banks are now “market driven” as discuss above has made this study very
1.5 SCOPE OF STUDY
The research is limited to
the commercial banking sector, specifically; this research word is a case study
of the UNION BANK OF NIGERIA PLC, with emphasis on the branches in Kwara and Lagos states.
This study will seek to
meet the set objectives.
1.6 LIMITATIONS OF THE STUDY
A study of this nature
cannot be devoid of one problem or the other, and thus the researcher is
expected to face few problems especially during the course of data collection.
The first anticipated
problem is that some respondent may not return their questionnaires.
Also responses to the
questions might not necessarily represent the opinion of the respondents.
Secondly, some of the
interviewers may be relunctant to answer questions because of the fear that
their answers might have a negative effect on the bank.
Thirdly, time and finance
constraints are another expected problems.
However, I will try to
reach out to many respondents and I will try to educate them, on the purpose of
the research project.
1.7 RESEARCH METHODOLOGY AND HYPOTHESIS
This research study is to
attempt to illustrate and evaluate the extent of bank marketing in Union Bank
of Nigeria PLC and the effect on its customer patronage, in this competitive
Ho: There is no
significant relationship between Union Bank’s marketing efforts and their
Ho: There is no significant
relationship between Union Bank’s product innovation and their customer’s
attitude towards the bank.
Hi: There is no
significant relationship between the quality of services rendered by Union Bank
and the frequency of customer’s transactions with the bank.
The research population
used, consisted of customers of the branches in Kwara and Lagos
states of Union Bank (Nigeria)
A total sample of one
thousand, one hundred and twenty customers are to be use. Thus, the method of data collection will be
The nature of the research
called for the testing of some hypothesis and it therefore calls for analysis
to be made, and the use of some statistical tools such as:
chi square test
simple percentage analysis.
Finding from the results
of the hypothesis and research questions should be to
extent to which Union Bank of Nigeria PLC was able to survive as a result of
new product development.
extent to which the quality of services rendered has a positive impact on the
customers and also the positive effect on the profitability of the bank.
what benefit is the introduction of computers to the quality of services
rendered by the banks.