THE PLACE OF MARKETING IN FINANAICAL INTERMEDIATION (STUDY OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA)

ABSTRACT

This study is centered on the place of marketing in financial intermediation. Marketing plays an important role in the mobilization of financial resources for long and short term investment through financial intermediation. It uses study of (selected deposit money Banks in Nigeria) to illustrate the positive effect of marketing on consumer satisfaction on these banking industries. Its main objective is to examine the roles, operations and functions for marketing in financial intermediation. The project was embarked on to know the role, operation and function of marketing in financial intermediation, and also to know if actually marketing has contributed to attracting and sustaining depositors’ and borrowers’ interest, and also value creation among shareholders in banks. Data were presented in tables to show the degree of correlation analysis and responses. A random sampling techniques was adopted to get a sample size of 105, thus 105 questionnaires were distributed. However, it is important that standardization of money deposit banks services based on different account holdings and services rendered should be very effective in customer attraction and sustenance. The researcher found out that most financial intermediaries do not know the importance of the risk and marketing information generated. The researchers thus recommend that there should be an effective proficiency in collecting and analyzing marketing information for investors as shareholders.   

TABLE OF CONTENTS

Title i

Declaration ii

Certification iii

Dedication iv

Acknowledgment v

Table of contents vi

List of Tables ix

Abstract x

CHAPTER ONE

INTRODUCTION

1.1    Background of the Study 1

1.2    Statement of Problem 3

1.3    Research Questions 4

1.4 Objectives of the Study 4

1.5    Significance of the Study 5

1.6    Research Hypothesis 5

1.7 Limitation of the Study 6

CHAPTER TWO

LITERATURE REVIEW

2.1 Bank Marketing Programme 7

2.2 Consideration for a Successful Marketing Programme 8

2.2.1 A Bank Mission Statement, Objective and Goals 8

2.2.2 Marketing Environment 9

2.2.3 Marketing Mix 9

2.3 Financial Intermediaries as Markets for Firm Assets 11

2.4 Interest Rates Determination and Structure 12

2.4.1 Interest Rate Determination 13

2.5 Money Market Purpose and Structure 14

2.5.1 The Role of Money Market 14

2.5.2 Money Market Segments 15

2.6     Role of Marketing in Attracting and Sustaining

Customers Interest and   Relationship 16

2.7 Factors that Attracts and Retains Customers in a Bank 18

2.7.1 Effective Communications 18

2.7.2 Achievement Drive 19

2.7.3 Daily planning and Personal Management 20

2.8    Importance of Service Quality and Customer

Satisfaction in Banking Sector 20

2.8.1  Customer Satisfaction 21

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design 22

3.2 Area of the Study 22

3.3 Population of the Study 22

3.4 Sample and Sampling Techniques 23

3.5 Sources of Data Collection 23

3.5.1 Primary Data Collection.   23

3.5.2 Secondary Data Collection 24

3.6 Validity of the Data 24

3.7 Reliability of Instrument 24

3.8  Method of data Collection 25

3.9 Model Specification 26

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Distribution and Retrieval of Copies of Questionnaire 27

4.2 Analysis 28

4.2.1 Test 1 28

4.2.2 Testing of hypothesis one 30

4.3.1 Table 2 31

4.3.2 Hypothesis two 32

4.5.1 Test 3 35

4.6 Testing of hypothesis 3 37

4.7 Discussion of findings 38

CHAPTER FIVE

SUMMARY, RECOMMENDATION AND CONCLUSION  

5.1 Summary of Finding 40

5.2 Conclusion     40

5.3 Recommendations 41

REFERENCES 42

APPENDIX

LIST OF TABLES

Table 4.1 Distribution and Retrieval of Questionnaire 27

Table 4.2: Assessment of the impact of buying

and selling on financial intermediation. 29

Table 4.3: Buying and selling and customer satisfaction 30

Table 4.4: Standardization of service and financing and 32

 customer relationship

Table 4.5 standardization of service and customers relationship 34

Table 4.6: Assessment for Rise Taking and Information 36

CHAPTER ONE

INTRODUCTION

1.8     BACKGROUND OF THE STUDY

A financial intermediary is a financial institution that connects and deficit agents. The classic example of a financial intermediary is a bank that consolidates deposits and uses the funds to transform them into loans. A financial intermediary is typically an institution that facilitates the channeling of funds between lenders and borrowers indirectly. That is, savers give funds to an intermediary institution such as a bank, and that institution gives those funds to spender. This may be in the form of loans or mortgages. Alternatively they may lend the money directly via the financial markets, which is known as financial disintermediation. Financial intermediaries are also firms that borrow from savings surplus centre and lend to companies in the saving deficit that need resources for investments.

A market is a place or a mechanism through which buyers and sellers exchange goods and services using a generally accepted medium of exchange (i.e. money). Thus, just like any other market, financial market is a specialized market that is responsible for channeling financial resources from the surplus units to the deficit unit to carry out some form of economic activities. The financial market therefore constitute of all financial institution that receive financial resources from the surplus unit of the economy in the from of savings and transfer them to the deficits units through lending activities. This role of transferring financial resources from the surplus units to the deficit units is what is referred to as financial intermediation.

Financial markets play an important role in the mobilization of financial resources for long term investment through financial intermediation. There are various financial markets which are institutional that facilitate the intermediation of funds in an economy. The financial market is segmented into two: one is the money market which deals in short term funds and the other, the capital market that is for long term dealing in loanable funds.

The basis of distinction between the money market and the capital market lies in the degree of liquidity of instruments bought and sold in each of the market, which can be further sub-divided into the primary and secondary markets.

While the primary market is concerned with the raising of new funds, the secondary market exists for the sale and purchasing of existing securities that are already in peoples’ hands. The existing money markets facilitate trading in short term debt instruments to meet short term needs of large users of funds such as Governments, Banks and similar institution.

1.9     STATEMENT OF PROBLEM

Asymmetric information is a problem in financial markets such as borrowing and lending. In these markets the borrower has much better information about his financial state than the lender. The lender has difficulty knowing whether it is likely the borrower will default. The consequence is that lenders will charge higher rates to compensate for the risk. If there was perfect information, banks wouldn’t need to charge this risk.

Basic problems include

i. Ignorance of the importance and need of marketing in financial intermediation.

ii. Ignorance of perfect information about the quality of financial instruments.

iii. The absence of effective and efficient financial market.

1.10    RESEARCH QUESTIONS

For the purpose of achieving the objective of this study, the following questions will be attended to;

i. To what extent has marketing created positive effect on consumer satisfaction in financial intermediaries?

ii. How has marketing facilitated the creation of and interest between depositors and borrowers in financial intermediation?

iii. To what extent has marketing created value in financial intermediaries?

1.11 OBJECTIVES OF THE STUDY

The main objective of this study is to examine the roles, operations and functions of marketing in financial intermediation.

The specific objectives are to:

i. determine the place of marketing in creating consumer satisfaction in financial intermediation.

ii. evaluate the role of marketing in attracting and sustaining Depositors and Borrowers interests and relationship.

iii. assess the place of marketing at creating value for shareholders.

1.5 RESEARCH HYPOTHESIS

The following Hypothesis will be tested:

Ho₁: There is no significant relationship between marketing activities of buying and selling and customer satisfaction in financial intermediaries.

Ho₂:  Marketing activities of grading (standardization) and financing do not significantly contribute to attracting and sustaining depositors and borrowers interest and relationship in financial intermediation.

Ho₃: Marketing activities of risk taking and marketing information do not significantly contribute to value creation among shareholders in Banks, based financial intermediation.

1.6 SIGNIFICANCE OF THE STUDY

The research work will reveal the factors that militate against roles of marketing in financial intermediation in a banking firm.

The research work will also enlighten the management of money deposit banks on the importance and necessary impact of marketing in the bank.

The research work will also help students that fall within the range of studying marketing management and practicing marketing, of the impact of marketing in an organization.

1.7 LIMITATION OF THE STUDY

The researcher had the following limitations in carrying out this research work.

i. Low rate of compliance by workers.

ii. Difficulties in transportation are among areas of vigor encountered during the research.

iii. Poor finance which made impossible to reach out to other money deposit banks.

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