ABSTRACT
The
purpose of the study is to gain a better understanding of the theoretical and
empirical relationship between market orientation practices (intelligence
generation, intelligence dissemination and responsiveness, customer focus,
competitor orientation and inter - functional coordination) and some measures
of organizational performances (profitability customer satisfaction, long term
objectives, short term objectives) of Nigerian banks.
A
Cross Sectional Survey research design was adopted; while data were generated
by means of structured question. Aides administered to members of staff of the
following selected banks in Lagos metropolis; First bank, FCMB, Sterling bank,
DBA and Zenith bank.
The
study generated a ninety percent (90%) response rate from two hundred
questionnaires that were given out.
Responses
from the survey were statistically analyzed using simple frequency percentage,
descriptive statistics, factor analysis and Pearson product moment correlation
with the aid of SPSS.
Results
of the study indicate that the studied banks were market oriented to a very
large extent. It is apparent from the findings that banks attached great
importance to obtaining relevant market intelligence and responding
appropriately in order to gain competitive advantage.
The
study also revealed that market orientation practices of the banks have
significant correlation with aforementioned performance measures.
Finally,
conclusions, recommendations and suggestions for further studies were
highlighted to demonstrate the generalization of the results of the study.
TABLE OF CONTENTS
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of content vi
CHAPTER TWO (Introduction)
1.1 Background of the study 1
1.2 Statement of the problem 3
1.3 Research questions 4
1.4 Research hypothesis 4
1.5 Objectives of the study 5
1.6 Scope of the study 6
1.7 Significance of the study 6
1.8 Operational definition of terms 7
References 9
CHAPTER TWO (Literature Review)
2.0 Introduction 10
2.1 Historical perspective of marketing 10
2.2 What is Market Orientation 11
2.3 The determinants of market orientation 16
2.4 Market orientation versus marketing orientation 19
2.5 Services marketing and marketing orientation 19
2.6 Alternative model in Services context 23
2.7 Different views on market orientation 26
2.8 The Nigerian banking industry 29
2.9 Brief history of case study 31
2.10 Conclusions based on literature review 34
References 36
CHAPTER THREE (Research Methods)
3.0 Introduction 38
3.1 Research design 38
3.2 Re-statement of research questions 39
3.3 Re-statement of research hypothesis 39
3.4 Population of the study 40
3.5 Sample size and sampling technique 40
3.6 Data collection methods 41
3.7 Data analysis methods 43
3.8 Limitation of the study 43
References 44
CHAPTER FOUR (Data Analysis and Interpretation)
4.0 Introduction 45
4.1 Analysis of questionnaires 45
4.2 Analysis of demographic variables 45
4.3 Analysis of responses to research questions 49
4.4 Factor of Analysis 51
4.5 Test of hypothesis 55
4.6 Keys of variables used in data analysis 58
CHAPTER FIVE (Summary, Conclusion and Recommendations)
5.1 Summary 60
5.2 Conclusions 62
5.3 Recommendations 63
5.4 Suggestions for further studies 65
Bibliography 66
Appendices 69
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
An
Organization is primarily established to achieve certain predetermined
objectives, once of which could be the production and distribution of products
and services which fulfils the needs and satisfaction of its consumers.
Thus,
the needs of the consumers must be identified appropriately by organizations in
order to produce goods and services that will satisfy the consumers on one hand
and generate sales and profit for the organizations on the other hand. This
assertion underscores the very essence of marketing in value creation and
organizational performance-Marketing researchers have long stressed the
importance of the marketing concept and have regarded it as a foundation of the
marketing discipline. Recent researcher provide the much needed theoretical
framework for the effect of marketing orientation the implementation of a
marketing concept on business performance and shows some empirical support
(e.g, Jaworski and Kohli 1993, Narver and Slater 1990. Tung-Zougchan and Su s.c
2004)
Fundamentally,
Kotler (2002) identified five business philosophies toward the market place.
These philosophies include: Production concept which state that consumers will
purchase those products which are available in the greatest quantity and at the
lowest cost of the, product concept which state that consumers will favour
goods that are superior to others in quality or features. The se1ling concept
shifts the emphasis from the product to aggressive selling and promotions
closing the sales is goal of this orientation, while societal marketing
emphasizes the need for organizations to offer quantity products to maintain or
improve the consumers and society's wellbeing.
Finally,
the marketing concept otherwise regarded as the production of market
orientation according to Kotler, eschews the notion that the most important
element in business philosophy is either the production capability or capacity
or aggressive sales. Instead, this concept focuses on needs and wants, both
present and future of potential customers.
Kotler
juxtaposed clearly that ‘selling focuses on the needs of the seller; marketing
on the needs of the buyer" (Kolter 2002; Juffery D. Derrick, 2002).
In
the same vein, Kolter and Jaworski who have researched extensively on market
orientation defined the concept as the 'implementation of the marketing
concept" They also emphasized three basic element of market orientation
which include Intelligence Generation (includes demand assessment, examination
of external factors, competitors and customer needs); Intelligence
Dissemination (Sharing the data secured among functional units) and
Responsiveness (selecting the target markets) designing new product or changing
existing ones in response to consumers input, anticipating picture customer's
needs and distributing and promoting products that elicit a favorable action on
the part of the customer (Jeffery D and Derrick, M.S 2000). Thus,
responsiveness may appropriately be considered the spring broad to becoming a
more market-oriented firm.
Accordingly,
Geoff Lancaster et al (2000) emphasized the important of adapting a market-oriented
organizational structure in becoming a marketing oriented firm.
According
to them, although the proper organizational structure is an important element
in a becoming market oriented, such an orientation is not achieved simply by
adopting an organization chart. Management must also adopt and use the
marketing concept as a business philosophy. Hence, in a marketing-orientated
firm, marketing is not confined to the marketing director and marketing
department rather it must permeate the whole company. A change of labels and
tittles will not achieve the necessary fundamental change in company attitudes.
It is the company's whole approach to business problems that is the key issue.
It is the adoption of a business philosophy that put customers’ satisfaction at
the centre of management thinking throughout the organization. It is the
understanding, recognition, appreciation and delivery of customer's value and
desired satisfactorily than competitors do. It is this that distinguishes as
market-oriented firm from a production or sales oriented firm.
Suffice
to mention here that the relevance of market orientation practices in Nigerian
banking sector, considering the volatility and competitive nature of Nigerian
business environment, cannot be over emphasized.
Although,
one would notice a sharp disparity in the degree of market orientation
practices in the pre-consolidation and post consolidation banking era in
Nigeria.
In
the pre-consolidation era, the prevailing or dominant business philosophy could
best described as 'Quasi Marketing". This practice was characterized by
low competition, little or no customer service, and poor service delivery and
above all, customers were considered to be at the mercy of the banks. In
contrary, the post consolidation period has witnessed an unprecedented
turn-around in the marketing of banking products and services in Nigeria. The
hitherto over hundred banks in the pre-consolidation period were whittle down
to twenty five (25) mega banks with minimum capital base of twenty five billon
naira (N25 billion).
The
development has contributed greatly to improvement in market orientation
practices among banks such that the new banks are beginning to redefine their
scope, vision, mission, orientation and business focus by identifying the basic
banking needs of the people and designing products, services, strategies and processes
to facilitate superior service delivery. Thus, today banking sector has put on
a new look that is driven by intense competition, business re-engineering, customer
focus, continuous products improvement, customer-oriented organizational
cultured, precision, information technology, total quality management and
impeacable speed of operations among other variables and determinants of
economic (business) and non-economic performance .
1.2 STATEMENT
OF THE PROBLEM
Nigerian
banking sector has come of age and a number of reforms have been implemented by
the apex bank to reposition and reenergize the sector to meet greater challenges,
for improved performance locally and internationally and for other socio-
economic justifications.
Today,
most banks in Nigeria are growing in lips and bounds and their performance and
service delivery have improved considerably.
However,
the problem of this study is to find out whether this performance is determined
by market orientation practices. Thus, in the light of the above and given the
volatility, competitiveness and dynamism of Nigerian business environment
nowadays there is undoubted task before the banks to consolidate their market
orientation practices.
To
this end therefore, it is imperative to carry out an intelligent, systematic,
objective and holistic assessment of the level of market orientation practices
in Nigerian banking sector. The study shall focus on the following selected
banks as cases to be studied; First bank, First city, Sterling bank, UBA, and
Zenith bank.
1.3 RESEARCH QUESTIONS.
The
study is aimed at addressing the following salient research questions;
1. What
are the impacts of market orientation practices on the performance (profitability,
business growth, market share etc) of Nigerian banks?
2. Is
there any relationship between market orientation and customer satisfaction in
Nigerian banking sector?
3. To
what extent do environment all dynamics affect market orientation in Nigerian
banking sector?
4. Is
there any relationship between the antecedents
to market orientation and the overall effectiveness of market orien1tion in
Nigerian banks?
1.4 RESEARCH HYPOTHESES
Based
on the research questions the following hypotheses are proposed for the study.
HYPOTHESIS ONE
Ho: The greater the market orientation practices
of an organization, the lower the performance.
Hi: The greater the market
orientation practices of an organization, the higher its performance.
HYPOTHESIS TWO
Ho: The greater the market orientation practices
of an organization the lower its customer satisfaction.
Hi: The greater the market
orientation practices of an organization the greater its customer satisfaction.
HYPOTHESIS THREE.
Ho:
That environmental dynamics of market
turbulence, competitive intensity and technological turbulence would have
negative effect on the relationship between market orientation and
organizational performance.
Hi: That environment dynamics
of market turbulence, competitive intensity and technological turbulence would
have positive effect on the relationship between market orientation and
organizational performance.
HYPOTHESIS FOUR.
Ho:
The greater the antecedents to market
orientation (Top management emphasis, interdepartmental dynamics and
organizational systems) the lower the overall market orientation of the
organization.
Hi: The greater the
antecedents to market orientation (Top management emphasis, interdepartmenta1
dynamics and organizational systems) the greater the overall market orientation
of the organization.
1.5 OBJECTIVE OF THE STUDY
The
following are the objective of the study.
1. To
determine the impact of market orientation practices on the performance of the Nigeria
banks.
2. To
determine the relationship between market orientation practices and customer satisfaction
in Nigerian banks.
3. To
examine the relationship between the antecedents to market orientation and the
overall effectiveness of market orientation in Nigerian banks.
4. To determine the extent at which environmental
dynamics affect market
orientation
practices of Nigerian banks.
1.6 SCOPE OF THE STUDY.
In
the course of the study effect shall be made to cover various dimensions or
aspects of market orientation in the selected banks (First bank, First city,
Sterling bank, UBA, Zenith bank). The study shall look into the processes of
intelligence generation, dissemination as well as responsiveness of the banks
to customers' needs, product/services improvement and service.
The
study will also cover other aspect of market orientation such as competitor's
orientation and profitability. The study will investigate how competitor's
intelligence is gathered, analyzed and acted upon to gain better insight into
new ways/ approaches of improving banking operations and to facilitate
customers satisfaction and organizational profitability.
1.7 SIGNIFICANCE OF THE STUDY.
The
study will be relevant to the extent that it will have theoretical and
practical significance.
On
one hand, marketing practitioners especially those in the banking facet of the economy
will find this study handful, as they will give a better insight into the impact
of market orientati6n on business performance. The study wills them to improve
on their existing marketing strategies and be more customers - focused without
losing sight of the marketing strategies of competitors.
On
the other hand, marketing academics (Students, Researchers, Scholars and
Tutors) will also benefit-from this study as it will not only serve as a
reference point for further researches, but also provide an empirical
understanding of the concept of market orientation.
1.8 OPERATIONAL DEFINITION OF TERMS.
For
better understanding of the study, some salient operational terms and concepts
are explained here;
1. MARKET: This is used to
mean a set of potential and actual buyer of a product or service.
2. BUSINESS PHILOSOPHY:
This consists of basic beliefs and values that are expected to guide
organizational members in conducting organizations business.
3. MARKET ORIENTATION (MO):
This is used to mean an organization wide generation, dissemination and
responsiveness to market intelligence.
4. BANKS CONSOLIDATION:
This is used to mean strategic alliance of banks through merge, and acquisition
to enhance service delivery and compete internationally.
5. ANTECEDENTS OF MARKET ORIENTATION:
This mean organization factors that enhance or impede the implementation of the
business philosophy represented by the marketing concept.
6. PRODUCT CQNCEPT:
The ideas that consumers will favour products that offers the most quality,
performance and features.
7. PRODUCTION CONCEPT:
The ideas that consumers will favour products that are available and highly
affordable.
8. SELLING CONCEPT:
The ideas that consumers will not buy enough of the organization products
unless the organization undertakes a large scale selling and promotion effort.
9. SOCIETAL MARKETING CONCEPT:
The ideas that organization should determine the needs, wants and interests of
target market and delivery the desired satisfactions move effectively than do
competitors in a way that maintains or improves the consumers and society's
well-beings.
10. MARKETING INTELLIGENCE: This is the day
to day information about happenings or developments in the marketing
environment that assist managers prepare and adjust marketing plans.
11. CUSTOMER LOYALTY: This is the behavior
exhibits when customers make frequent repeat
purchases of a particular brand such that they become brand additive.
12. ORGANISATION CULTURE: This is a set of common understandings around which action
is organized in a clearly distributive manner by members of a group organization,
13. INTERNAL MARKETING: Marketing by a
service firm to train and effectively motivate its customer employees and all
the supporting service people to work as a
term to provide customer satisfaction.
14. CUSTOMER SATISFACTION: The extent to
which a product's perceived performance a buyer's expectations.
15. CUSTOMER VALUE: The, customer's
assessment of the product overall capacity to satisfy
his or her needs.
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