THE RELEVANCE OF MARKETING RESEARCH IN THE NIGERIA BANKING INDUSTRY

(A CASE STUDY OF DIAMOND BANK PLC)

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ABSTRACT

This research work has examined the relevance of marketing research in the Nigeria banking industry. The main objective of the study is to examine the relevance of marketing research in the Nigeria banking industry. The specific objectives are to evaluate if marketing research can survive a firm economically, to determine whether marketing research can be used as a measure of development in a firm, to determine the extent to which marketing research can be used in satisfying customers, to analyze the usefulness of marketing research to a firm, to find out how marketing research could be used as tool for marketing decision toward product development. Related literatures were reviewed on the subject matter. The sample size of this study is judgmental sample of 15 respondents which comprise of all marketing staffs. Based on the objective of the study summary conclusion and recommendations were made that in marketing research practice, the management of Diamond bank must pay great attention to the marketing research department, if the company wants to perform the above average level, since the discoveries had revealed that there is greater need for marketing research in product development, then it is essential that research activity should be the priority in Diamond bank, in order for marketing researchers to perform above its present performance, management must monitor and control the activities of marketing research department like other functional departments, management should gear all its efforts towards achieving new product ideas through marketing research, the application of marketing research will enable Diamond bank to produce and develop product that will survive in the market, application of marketing research helps to nevitalize product in order to prolong the mature stage of the product life cycle, having examined the impact of marketing research on customer’s satisfaction in Diamond bank, it is paramount that re-enforcement for purchase of being derived from product through effective market research, the management of Diamond bank should know that they have very but interesting challenges to increase it’s share capital based in the financial market, with regards to the statement of the CBN Governor Sanusi Lamido Sanusi, those financial institutions should make product that will fit into consumer’s need and performance by doing a total consumer research.

 

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Today the need for a product is carefully explored before it is produced on a large scale; often people are assigned as product managers and given the responsibilities for co-ordinating product development and marketing. When developing a product to meet a marketing demand, attention must be given to potential competition and to possible change in customers want.

The American marketing Association (AMA) study showed that over 73 percent of larger companies have their own marketing research department. And to be precise each department has established in the past five years.

With the growing emphasis on supply the individual needs of particular kinds of customers, where ever they may be. It is essential that some organized research should be undertaken to identify market opportunity. The competitive conditions of trading which characterize practically every market today, both nationally and internationally, demands of flow of reliable marketing intelligence (CHISNALL 1981).

According to Tall and Hawkers (1980:1) marketing research has an adversary role in marketing management. It is used to acquire and analyze information and to make recommendation to management as to how market problems should be resolved.

According to Zikmund (1987:11) the prime managerial value of marketing research is that it reduces uncertainty by providing information that facilitate decision making about marketing strategies and tactics used to achieve an organizations strategic goals.

Developing and implementing marketing strategy involves the following:

  1. Identifying and evaluating opportunities used
  2. Analyzing market segments and selecting target market

iii. Planning and implementing a marketing mix that will satisfy customers need and meet the objectives of the organization and analyzing market performance.

As a means of implementing marketing concept, marketing research helps in obtaining information that identifies the consumer’s problem and needs, bridge gap between marketing executives and the customers.

In the long history of business enterprise, management has devoted most of its attention to managing money, material, machines and men. Management has paid less attention to the fifth recourses of the form information. Many firms in Nigeria have not yet adapted to the intensified information requirement for effective and efficient method of harnessing their resources. This will also make for speedy economic development of the country.

Marketing research is the systematic, gathering; recording and analysis of data about issues relating to marketing products and services. The term is commonly interchanged with market research however; expert practitioner may wish to draw a distinction in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.

Marketing research is often partitioned into two sets of categorical pairs, either by target market.

  1. Consumer marketing research and
  2. Business – to – business (B2B) marketing research.

Or, alternatively, by methodological approach

  1. Qualitative marketing research and
  2. Quantitative marketing research.

Consumer marketing research is a form of applied sociology that concentrates on understanding the preferences, attitudes and behaviors’ of consumers in a market-based economy and it aims to understand the effect and comparative success of marketing campaigns. The field of consumers marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the AC Nielsen Company in 1923.

African Banking Corporation which established its first branch in Lagos was the first bank to open its doors in 1892. The colonial masters established the bank solely for their trade in Nigeria which was then a British colony.

According to Ugwanyi (2002:66) other banks come into existence such as British bank for West Africa (BBWA) now first bank of Nigeria Plc in 1894, and other Barclay’s banks. Dominion colonial and oversees (D.C.O) now union bank of Niger Plc. The British and French bank that was established in 1949. The entire expatriate bank dominated the banking arena and was discriminatory against the indigenous customer service the expatriate banks, such as discrimination obviously resulted in the indigenes clamour for the establishment of indigenous banks.

According to Adeleanye (1983: 79 – 80) between 1930 and 1940 the Nigeria activists spearheaded the move to establish indigenous banks that would render creditable services to the indigenes, as the expatriate of such services. Their efforts yielded divided in the 1940’s with the establishment of many banks in Nigeria.

The importance of the banking industry became more pronounced with the establishment of the central bank of Nigeria (CBN) in July 1989, which was sequel to the promulgation of the CBN ordinance of 1958. As a result of various regional governments and co-operative movement established banks in order to enhance economic development of their regions in particular and country as a whole.

Accordingly, the growth of the banking industry become more vivid with the indigenization policy in the early 1970 when more banks were opened by the end of 1981, there were 27 banks with 1,213 branches in Nigeria.

The spring up and survival of the banking industry can be attributed to marketing research.

A systematic approach to the problem of management of modern business. One of the principal functions of management is to make decision. Marketing decisions are peculiarly difficult to make and their effect are felt throughout the business world.

The emphasis on the indispensable role of marketing research as a framework is principally accounted for in the growth and development of any organization. In recent years, interest in the role of marketing research to product, planning and development in banks has grown.

1.2   STATEMENT OF PROBLEM

This concerns the relationship that exists between the concept “marketing research” as a measure of a firm’s surviving economically and developing.

Marketing research brought the consumer orientation concept known as the “marketing concept” it entails the organization to find out from the customers and consumers about their needs developing or acquiring the product to fill those needs.

A variety of scholars and practitioners have suggested that a major difficulty in the organization is that very little attention has so far been paid to problems and opportunities of marketing in general and marketing research in particular. In view of this, Peter Drucker not that in some countries, marketing and marketing research are often neglected in the productive field or organization.

This assertion seems closely related to an assumption that the marketing and marketing research system of any country are essentially passive or adoptive in it’s relation to economic system and production thereof.

The question is how does the firm learn about changing customers wants, new competitor initiatives new modes of distribution and so on. The answer is that banks or organization must develop and maintain a marketing information system and can have the skills of carrying out marketing research.

The essence of marketing is that a firm will make what it can sell rather than sell what it can make marketing therefore, requires an assessment of customers need through market research and the orientation of all the firm activities towards the satisfaction to those needs. Identification of consumers needs entail some systematic investigation into market either those being currently supplied or new marketing areas of potential interest.

Firm or organization that is not yet acquainted with the concept of marketing research cannot produce products that will fit into consumers needs. This is where the problem of the study lies. It constitutes an inquiry into ascertaining the useful and role of marketing research in surviving and developing the banking industry.

1.3   PURPOSE AND OBJECTIVE OF THE STUDY

The main objective of the study is to examine the relevance of marketing research in the Nigeria banking industry. The specific objectives are as follows:

  1. To evaluate if marketing research can survive a firm economically.
  2. To determine whether marketing research can be used as a measure of development in a firm.

iii. To determine the extent to which marketing research can be used in satisfying customers.

  1. To analyse the usefulness of marketing research to a firm.
  2. To find out how marketing research could be used as tool for marketing decision toward product development.

1.4   RESEARCH QUESTIONS

The researcher has the main task of finding out the following:

  1. To what extent can marketing research survive a firm economically?
  2. What marketing research activities does the company engage in to ensure customer’s satisfaction?

iii. Are customer’s satisfied with the product of the company as they are being offered?

  1. Can banks use marketing research strategy to maximize profit?
  2. Is there any relationship between the economical survival and development of the bank and marketing research?

1.5 HYPOTHESIS

Ho:  Marketing research have the capability to improve and develop the banking industry.

HI:   Marketing research does not have the capability to improve and develop the banking industry.

1.6 SIGNIFICANT OF THE STUDY

This was motivated by the constantly changing environment of business which could be attributed to increase technological advancement, shortage in raw material supplied, the emergence of consumerism activist group, the constantly changing taste and preference, demographic and psychological environment of business.

This study is also important because of the need for marketing research in the industry. The banking industry through marketing research introduces an E – Banking called “FLASH DIRECT” to pay government ministries, departments and Agencies. Flash Direct, an e-payment solution specifically conceived to revolutionize electronic payment to multiple beneficiaries, is facilitating Nigeria migration to a cashless society, which is one of the hallmarks of the federal government’s policy on e-payment.

The product guarantees secure and timely payment to beneficiaries and offers them instant feedback through SMS and e-mail alert as their account are credited with flash direct, it is all convenience as transactions can be done at ministries, department and Agencies offices while payment approval can be done anytime anywhere by the authorizer.

Apart from the ease of report generation and reconciliation, flash direct reduces turnaround time in processing salary payment while eliminating the stress of paper work and sharp practices associated with manual payment process for successful transaction on the flash direct, beneficiaries should confirm their most recent account number in their respective banks and send them to the ministry, parastatals and agencies which in turn prepare payment schedule in the format advised by their bankers. The flash direct payment solution makes easy tracking of payments and improves the quality of financial reporting’s.

The role of marketing research cannot be neglected in banking industry because of its importance some of which are:

  1. Product creation and development.
  2. Decision making in the organization.
  3. Good policy formulation.
  4. Product discovery.
  5. Customer satisfaction etc.

However, since this research work is designed to cover the banking industry in Nigeria and a case study of Diamond Bank Refinery branch. It believe this would be of a great help and encouragement to such banks and business firm that lack the human and financial resources to organize this kind of research work in their organization.

1.7 SCOPE OF THE STUDY

The study limits scope to the relevance of marketing research in the Nigerian banking industry with emphasis on Diamond Bank PLC Refinery Branch as a case study.

1.8 LIMITATION OF THE STUDY

This study is limited to only the management and employees of Diamond Bank PLC Refinery Branch.

This study is also conducted under the ambit of human limitation, since human beings are imperfect and the researcher been human the study is not expected to be 100% correct.

The difficulty of getting questionnaire returned would invariably put limitation. There is also time and financial constraint. Time is usually not enough to carryout the research and the cost it takes to carryout the research is also usually high, this is also a limitation in the study.

1.9   DEFINITION OF TERMS

Marketing Research

Marketing research is the systematic gathering, recording and analysis of data about issues relating to marketing products and services.

 

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