EFFECTIVENESS OF MARKETING STRATEGIES IN NIGERIAN BANKS

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(A Survey of Selected Banks in Port Harcourt)

Abstract

The research titled “The Effectiveness of Marketing Strategies in Nigerian Banks.” The overall objective of the study is to examine the relationship between marketing strategies and performance of selected commercial Banks in Port Harcourt. In arriving at the sample size of the study, the judgemental sampling techniques was used to select 45 respondents from Skye bank plc and Zenith bank plc, Aba Road, in Port Harcourt. Data for the study was gotten through the direct delivery of questionnaires to the target population by the researcher while the data were analyzed electronically with Statistical Packages for Social Sciences (SPSS), using the Pearson Product Moment Correlation (PPMC). From the analysis, it was deduced that the dimensions of marketing strategies relates with marketing performance of commercial banks in Port Harcourt. Based on the above findings, the following recommendations were made among others: that commercial banks should maintain a stable price that will motivate customers to by their product and services, that commercial banks should ensure their product and services are distributed adequately to avoid product scarcity and that commercial banks should ensure they adopt effective promotional strategies. This will help their product and services do well in the market.

Table of Content

Title Page    i

Cover Page ii

Declaration iii

Certification         iv

Dedication  v

Acknowledgements        vi

Abstract      vii

Table of Content  viii

CHAPTER ONE  1

INTRODUCTION         1

1.1 BACKGROUND OF THE STUDY     1

1.2     STATEMENT OF THE PROBLEM 2

1.3 OBJECTIVE OF THE STUDY  3

1.4     RESEARCH QUESTION       4

1.5     RESEARCH HYPOTHESES  4

1.6     SIGNIFICANCE OF THE STUDY  5

1.7     SCOPE OF THE STUDY       5

1.8     LIMITATION OF THE STUDY       6

1.9     DEFINITION OF TERMS      6

CHAPTER TWO 8

REVIEW OF RELATED LITERATURE   8

2.1 Introduction   8

2.2 Conceptual Framework     8

2.1.2 Concept Of Marketing Strategies      9

2.1.3 Dimension Of Marketing Strategies   10

2.1.8 Concept Of Sales Performance 17

2.1.8 Measures Of Sales Performance        18

2.1.12 Marketing Strategies And Performance     22

2.2 Theoretical Framework     24

2.2.1 Porter’s Five Forces Of Competitive Position Analysis 24

2.3 Review Of Related Empirical Studies   25

2.4 Summary Of Literature Review  26

CHAPTER 3        27

RESEARCH METHODOLOGY      27

3.1 Introduction   27

3.2 Research Design      27

3.3 Population of the Study    27

3.4Sampling Techniques Used          28

3.5 Sample Size    28

3.6 Source of Data         28

3.6.1 Primary Source (s) of Data      28

3.6.2 Secondary Source of Data       28

3.7 Research Instrument for Data Collection       28

3.8 Validity and Reliability of Instrument  29

3.9 Techniques for Data Analysis     29

CHAPTER FOUR         30

DATA PRESENTATION AND ANALYSIS       31

4.1 Questionnaire and analysis of response         31

4.3 Test of Hypotheses: 38

4.4 Discussion of Findings:     40

CHAPTER FIVE 43

SUMMARY, CONCLUSION AND RECOMMENDATIONS         43

5.1 Summary       43

5.2 Conclusion     44

5.3 Recommendation     45

Appendix II          52

Questionnaire       52

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Given the trend, every aspects of economic activities globally and particularly Nigeria, it is imperative for business entities to adopt measure that should strategically reposition them so as to remain afloat. With much increase in the level of customer awareness in response to their needs and wants or satisfaction, firms should also discuss their old marketing strategies that are not result oriented. They should acknowledge the paradigo shift from old marketing concept to the new concept, which is customer driven, technology-driven era in modern marketing management (Johnson 1990).

One of the industries which have gradually started repositioning its operation to suit customer’s needs and wants is the banking industry. Nigerian banking system is characterized by internal and external competition. The up surge of new banks created room for innovations and further market sharing.

Louise and David (1989) in Orji (2010) pointed out that marketing strategy is the overall company programme for selecting a target market and satisfying the target consumers through a blending of the marketing mix elements. The component of the marketing mix such as product, price, distribution and promotion represent subset of the marketing strategy. These key elements must be coordinated and put into a unified effective strategy where product must perform well in the market. The marketing strategy is direct and useful in business and in marketing.

Firms performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).

According to Richard, (2009), performance encompasses three specific areas of firm outcomes: (a) financial performance (profit, return on assets, return on investments, etc.); (b) product market performance (sales, market share, etc); (c) shareholder return (total shareholder return, economic value added, etc.). Performance could be evaluated by organizational performance. Drucker, (1999) pointed out the measurement of performance through non-financial ways that Operating Performance was segmented by time; the short-term objective should consider the value of shareholders, while the long-term objective aimed to balance the sustainable operation and survival. Robbins, (2001) indicated that financial performance and marketing performance were generally used for operating performance of a business. Financial performance contained rate of return, return on sales, pretax income, volume of sales, and sales growth rate, while market shares were the representative of marketing performance. Erdogan, (2001) considered that the denouncement and problems in operation could be discovered through the measurement of operating performance aiming at the operational performance and the employees’ work performance. In other words, operating performance of a business stands for the business performance of the organization interacting with external environments. From the foregoing therefore, the study seeks to examine the effectiveness marketing strategies on bank performance in some selected deposit money banks in Port Harcourt.

1.2     Statement of the Problem

Most commercial banks have been operating under difficult conditions in an effort to survive the harsh Nigerian business environment that’s why effective marketing strategies have contributed immensely towards the achievement of post satisfaction, on the side of customer who make use of a given product/services in the market Esiele, 2008). Commercial banks which intends to improve on its marketing has to create good marketing strategy for its efficient and effective operations. These strategies if effectively used should increase the profitability of such commercial bank and will also enable the bank to achieve its set goals/objectives, Nwaizugbo (2004). The various products/services of banks such as internet banking, telephone banking, mobile banking, POS, ATM etc have been contributing towards the success of the banks, due to efficient and effective marketing strategies designed by them. In recent times commercial banks have been experiencing poor performance as a result of unavourable external business environment, inability to face other competes in the market (Nwaizugbo, 2004). As a result of these aforementioned problems the researcher intends to find solution to the problems and offer appropriate solutions.

1.3 Objective of the Study

The overall objective of the study is to examine the relationship between marketing strategies and performance of selected commercial Banks in Port Harcourt. The specific objectives are as follows:

1.       To examine the relationship between product strategy and performance of banks.

2.       To examine the relationship between pricing strategy and performance of banks.

3.       To examine the relationship between promotion strategy and performance of banks.

4.       To examine the relationship between distribution strategy and performance of banks.

1.4     Research Question

In line with the objectives of the study, the following questions will be answered.

1.       What is the relationship between product strategy and performance of banks?

2.       What is the relationship between pricing strategy and performance of banks?

3.       What is the relationship between promotion strategy and performance of banks?

4.       What is the relationship between distribution strategy and performance of banks?

1.5     Research Hypotheses

          The following research hypotheses were formulated to guide the researcher:

H01:  There is no significant relationship between product strategy and performance of banks

H02:  There is no significant relationship between pricing strategy and performance of banks

H03:  There is no significant relationship between promotion strategy and performance of banks

H04:  There is no significant relationship between distribution strategy and performance of banks

1.6     Significance of the Study

The era of set down and wait for customers or arm chair kind of banking has been over taken by challenges in the industry. A bank with the state of the art technologies and service may still not make such heavy profits if it does not engage in proper marketing of its products cum services.

Therefore, the study is significant as it will banks, customers and other financial publics in the following ways: Banks through the findings of the study may be able to build more confidence on customers. They also know more ways of performing financial intermediation roles or objective. Customers will also benefit through the findings of the study as banks will now reposition themselves as reliable and responsive organization to do business with. The other financial publics will be able to fish out indices for the evaluation of the banks performance or cooperate failures

1.7     Scope of the Study

The study is delimited under the following heading: content scope, geographical scope and unit of analysis.

Content Scope: The content scope of this study involves an investigation to ascertain the effectiveness of marketing strategies on bank performance. The dependent variable is performance, measured by profitability, market share and sales volume. While independent variable is marketing strategies measure by product strategies, price strategies, distribution strategies and promotion strategies.

Geographical Scope: This study is delimited in Port Harcourt Rivers State with references to selected commercial Banks which include Skye bank plc and Zenith bank plc, Port Harcourt, Rivers State.

Unit of Analysis: The unit of analysis in this research involves both senior and junior staffs of Skye bank plc and Zenith at the time of carrying out the study. Hence, it is a macro level study.

1.8     Limitation of the Study

This study has been limited by a numbered factor which is as follows:-

Time: Time is a handing factor as he student are given limited period to complete and submit his project.

Finance: It is another major problem, as the researcher has to travel to various places in search of materials it sudden rise in the transport fare in the country.

Problem of data collection: Some people find it difficult to release on data needed by the researcher, although some of them co-operated to a great extent.

1.9     Definition of Terms

In order to make work a bit clearer, certain terms will be defined:

       Bank: Any person who carries on banking business and includes a commercial bank, a mortgage bank, acceptance house, a discount house, and other financial institution.

       Marketing: The sensing and serving of customers needs through an exchange relationship aimed at creating value in from of profit, and satisfaction to the consumers.

       Strategy: This is a techniques developed to gain advantage over the competitor, it is a tactical plan for carrying out formulated policies, to achieve a set objective.

       Promotional activities: These are various promotional techniques used by marketers. They are called promo tools or elements of the promotion mix and include; Advertising, personal selling, sales promotion and public relations.

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