OKOYE, SYLVIA C.

PG/MBA/99/30815

PG/M. Sc/09/51723

APPLICATION OF MARKETING CONCEPT IN COMMERCIAL BANKS (A

CASE STUDY OF DIAMOND BANK LIMITED, ENUGU BRANCH)

MARKETING

A THESIS SUBMITTED TO THE DEPARTMENT OF MARKETING, FACULTY OF

BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA ENUGU CAMPUS

Webmaster

Digitally Signed by Webmaster’s Name

DN : CN = Webmaster’s name O= University of Nigeria, Nsukka

OU = Innovation Centre

MAY, 2001

APPLICATION OF MARKETING CONCEPT IN COMMERCIAL BANKS (A CASE STUDY OF

DIAMOND BANK LIMITED, ENUGU BRANCH)

BY

OKOYE, SYLVIA C.

PG/MBA/99/30815

DEPARTMENT OF MARKETING

UNIVERSITY OF NIGERIA

ENUGU CAMPUS

MAY, 2001

APPLICATION OF MARKETING CONCEPT IN

COMMERCIAL BANKS (A STUDY OF DIAMOND BANK

LIMITED, ENUGU BRANCH)

BY

OKOYE, SYLVIA C.

PG/MBA/99/30815

BEING A PROJECT REPORT SUBMITTED IN PARTIAL

FULFILMENT OF THE REQUIREMENTS FOR THE AWARD

OF MASTER OF BUSINESS ADMINISTRATION(MBA)

DEGREE IN MARKETING

DEPARTMENT OF MARKETING

UNIVERSITY OF NIGERIA

ENUGU CAMPUS

CERTIFICATION

Okoye, Slyvia C, a postgraduate student in the Department of Marketing

with Registration Number PG/MBA/99/30815 has satisfactorily completed

the requirements for course and research work for the degree of Masters of

Business Administration (MBA) in Marketing.

…………………………… ……………………………

Prof (Mrs) D.A. Nnolim Dr. (Mrs) J.O.Nnabuko

Supervisor Head of Department

DEDICATION

I dedicate this project, most especially to Almighty God who has

made it possible to see me through the course of my study, to my

dear mother, Mrs. F. N. Okoye, who has assisted me both morally

and financially and also to my brothers, sister and dear friends

ACKNOWLEDGEMENTS

I shall start by thanking Almighty God for his infinite blessings and

guidance throughout this study.

This project was carried out in fulfillment of the requirements for the award

of Master of Business Administration (MBA) Degree in Marketing.

I am therefore thankful to the University Authority for offering me the

opportunity to gain this experience. At the same time, I would like to express

my profound gratitude to my project supervisor, Prof. (Mrs.) D. A. Nnolim,

for her motherly guidance and counseling throughout the course of writing

this paper.

Finally, I am using this medium to express my sincere gratitude and thanks

to my mum and friends, all those who in one way or another, have

contributed to the successful completion of my course of study in this

University.

TABLE OF CONTENTS

PAGE

Title Page - - - - - - - - - ii

Certification - - - - - - - - - iii

Dedication - - - - - - - - - iv

Acknowledgements - - - - - - - vi

Abstract - - - - - - - - - viii

CHAPTER ONE

1.0 Introduction - - - - - - - 1

1.1 Background of the Study - - - - - - 1

1.2 Statement of the Problem - - - - - - 6

1.3 Objectives of the Study - - - - - - 8

1.4 Formulation of Hypotheses - - - - - 9

1.5 Significance of the Study - - - - - - 9

1.6 Limitation of the Study - - - - - - 10

CHAPTER TWO

2.0 Review of Related Literature - - - - - 12

2.1 Background Information (Historical Perspective) - - 12

2.2 The History of Diamond Bank Limited - - - 14

2.3 Definition of Marketing Concept - - - - 15

2.4 The Application of Marketing Concept in Financial Institution 16

2.5 The Role of Marketing Management in Banking - - 17

2.6 The Marketing Concept as a Survival Strategy in Banking Industry 21

2.7 Application of Marketing Concept as a Panacea to the Over

Concentration of Banks in Urban Centres to the Detriment of

Rural Areas - - - - - - - - - 23

CHAPTER THREE

3.0 Research Design and Methodology - - - 27

3.1 Research Methodology - - - - - - 27

3.2 Method of Investigation - - - - - - 27

3.3 The Sources of Data - - - - - - 27

3.3.1 Primary Data - - - - - - - 28

3.3.2 Secondary Data - - - - - - - 29

3.4 Population/Sample Size - - - - - - 30

3.5 Data Presentation - - - - - - - 30

3. 6 Data Treatment - - - - - - - 31

CHAPTER FOUR

4.0 Data Presentation and Analysis - - - - - 33

4.1 Breakdown of Questionnaire, Sample Size and Analysis 33

CHAPTER FIVE

5.0 Results and Discussion - - - - - - 45

CHAPTER SIX

6.0 Summary of Findings, Recommendations and Conclusion 48

6.1 Findings - - - - - - - - 48

6.2 Recommendations - - - - - - - 50

6.3 Conclusion - - - - - - - - 52

Appendix I - - - - - - - - 54

Bibliography - - - - - - - 58

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The manufacturers of consumer products in Britain were the earliest to

prosper. This was necessitated by their firm believe and adherence to their

Business Philosophy which says: ‘‘You must give people what they want;

the right product at the right price, in the right place at the right time and

with the right promotional tools”.

The Institute of Marketing defined marketing as satisfying customer

requirements profitably. Kottler defined marketing as “customer orientation

backed up by integrated marketing, aimed at achieving organization goal”.

According to him, the purpose of business is to create and keep a customer.

The objective of the marketing process is profitable sales of services that

satisfy customer financial requirements and need. The organization should

learn to stop looking inwards at the company and concentrate on the outward

aspect which is the customer’s with the sole aim of satisfying the customers.

Organisations should stop thinking only about producing goods and services

and selling them to satisfy customers’ needs.

Drucker, one of the world leading writers on business management made

the importance of the customer and the marketing very clear when he said

that, ‘‘it is the customer who determines what business is”. His statement

cannot be over-emphasized, this is because the maxim says that “the

customer is always right” has its origin in the writing on economic and

social theory.

Adam Smith who was known as one of the earliest writers on economics,

recognized the importance of the marketing concept as far as 1770’s when

he stated that consumption is the sole and only purpose of all productions

and the interest of the producer ought to be attended to only so far as it may

be necessary for promotion.

Therefore, the essence of marketing concept is to eradicate:

(a) The business or organizations or firms with production as the over-

riding and main business activity. Production is only necessary in

order to facilitate the achievement of marketing goal.

(b) The communication gap that form the mass production of foods and

employment of intermediary organization for example, wholesalers

and retailers. The marketing concept services in this contact a set link,

that is to bring the suppliers (company) and the buyers (customers)

together in so doing, the customer’s knowledge about the company

and its products is enhanced. And more importantly, the company

operates with a better knowledge of its target market and market

requirements.

Drucker concluded by saying that, the purpose of a business or company

has only two fractions and these include:

(a) Innovations;

(b) Marketing

He is therefore of the opinion that marketing and innovation produce result

while all the others are regarded as cost of the company. Marketing as a

concept and a discipline is undesirably a central function of management at

all levels, and for the specialist such as market researcher or advertising

executive that might be found in marketing department.

.

Nigeria has actually been characterized by a limited number of banks since

1892 when the first Nigerian bank, the African Banking Corporation was

established. This exposed the public to only a few banks, where the problem

is not selling but producing because anything and everything sells, therefore,

leading to the total neglect of customers’ needs, which has 40 incessant

condemnation and criticisms from people in all walks of life. The most

notable condemnation came from the former President of

Nigerian/American Chamber of Commerce, Chief Ogunbanjo, who accused

Nigerian banks of financial terrorism.

But it has became pertinent that banks should move away from the sales

orientation which hitter has characterized the marketing of financial services

in Nigeria and change over to the practicing marketing concept, because of

the increasing rate of competition in the banking industry. The increasing

number of banks in Nigeria in recent times has made the environment in-

patient for stagnant banks that are hamstrung with age-long tradition.

The day is now being carried by the progressive and dynamics bankers

improving his skills at all times and is constantly scanning the environment

and developing customers’ needs. Marketing for banks therefore, is the

creation and delivery of customer oriented or satisfying services at a profit to

the bank.

Some banks consider marketing as essentially advertising and public

relations, which are only two tools of marketing out of many. Banks should

try as much as possible to revise their parochial idea of marketing and start

practicing marketing with all its components, and all techniques it embodies.

It is also necessary to stress that the tools of modern marketing, however

elaborate and scientific are in the end no more than levers, inert and even

dull artifacts when not in use, but are capable of reducing dynamics result

when they have a point where they can be forced and an agreed direction in

which the leverage should be exerted.

Finally, while marketing may not be the most important aspect of the

banking industry, it serves as a major adopted and applied function every

banking environment.

1.2 STATEMENT OF THE PROBLEM

Since the commercial banks in the country want to practice real marketing,

there is every need for them to market their services to their numerous

customers

The problem of poor quality services should not be found in banking

industry alone, rather, it should be seen as a general problem of this nation.

The quality of services rendered by commercial banks in Nigeria, with

reference to the Diamond Bank Limited, has been attracting incessant

criticisms from its customers. A notable one as stated earlier was that of

Chief Chris Ogunbanjo, former President of Nigeria/America Chamber of

Commerce; who described banks as “an instrument of financial terrorism”.

According to him, “there is urgent need for reform in the Nigerian banking

industry and such reforms must fall squarely on the Central Bank and the

entire banking industry.

There is actually need for banks to take an in-depth look so as to make

necessary adjustments. In fact, the shortcoming of our banking system is that

when customers go to banks to withdraw their money, they spend their

whole day waiting to be attended to and when the customers complain or

needs inquiry, their complaints are met with rudeness from the staff, who

seem to forget that they were employed to serve this customers, not minding

how big or small the customer is. Based on the above allegations and

experiences of bank customers, managers of banks are not sure of the extent

to which banks practice the marketing concept.

Therefore, this topic was chosen in other to find out how the marketing

concept can help the Diamond Bank Limited and the entire banking industry

in improving their market performances. The research went ahead to develop

some research questions which are intended to give an insight to the problem

when answered.

1.3 OBJECTIVES OF THE STUDY

The main objective of this work is to carry out a critical analysis of the

appraisal of the marketing concept in Diamond Bank Limited, and to take an

in-depth look at the operation of the Diamond Bank Limited, as it relates to

customer services. The objectives of this study include the following:

a. To ascertain the level of good customer relationship that exists

at the Diamond Bank Limited.

b. To ascertain how customers get informed about the availability

of services rendered at the Diamond Bank Limited.

c. To determine if Diamond Bank Limited is customer-oriented

and if not, what are the possible solutions towards improving

their operations.

d. To determine if marketing departments exist within Diamond

Bank Limited and other Commercial banks, and if so, what are

their activities.

e. Finally, to make recommendations with regard to what can be

done within the banking industry to improve the services

extended to their customers.

1.4 RESEARCH QUESTIONS

The following are the research questions:

(a).Does Diamond Bank maintain a good relationship with their customers?

(b).How do customers get informed about the availability of services

rendered at the Diamond Limited?

(c).Is Diamond Bank Ltd customer-oriented?

(d).Does Marketing Departments exist within Diamond Bank Limited?

(e).Are customers satisfied with the standard of services rendered by the

Diamond Bank Ltd?

(f).Are Customers’ problems solved within the shortest possible time at

Diamond Bank Ltd?

(g).Is the employment of the marketing concept within Diamond Bank Ltd

satisfactory?

1.5 HYPOTHESES

In order to properly investigate the problems arising from the appraisal of

the marketing concept in Diamond Bank Limited, the following hypotheses

have been made. The null hypotheses (Ho) and the alternative hypotheses

(HI) are formed as shown below.

1. HO: Customers are not satisfied with the standard of services rendered

by the Diamond Bank Limited.

HI: Customers are satisfied with the standard of services rendered by the

Diamond Bank Limited.

2. HO: Customers’ problems are not solved within the shortest possible

time

HI: Customers’ problems are solved on time

3. HO: The extent to which Diamond Bank employs the marketing

concept in its operations is unsatisfactory.

HI: The extent to which Diamond Bank employer the marketing concept

in it operations is satisfactory.

1.6 SIGNIFICANCE OF THE STUDY

The result obtained from the study will be of benefit to the Management

of Commercial Banks and the entire banking industry; the government;

non-financial institutions; business entrepreneurs; students of Marketing

Department and other related courses and the general public as a whole.

1.7 SCOPE OF THE STUDY

The study centers on the marketing concept applied by the banking

industry, with particular focus on Diamond Bank Ltd.

1.8 LIMITATIONS OF THE STUDY

The researcher achieved quite a great success with the use of the

questionnaire, since most of the respondents that filled the questionnaire

were quite happy with Diamond Bank Limited and the entire banking

industry in Nigeria.

They were eager to air views to toward this direction.

However, this study could have been more comprehensive and elaborate,

but for the uncooperative attitude of the bank. The bankers found it

difficult to give out vital information, which would have been useful to

this study and the commercial banks in Nigeria.

Another limitation is inadequate funds at the disposal of the researcher

and also, the researcher was carrying out this study in her final semester

and enough time was not available. Whatever information that is

contained in this paper was made more possible by the fact that the

researcher later gave all respondents an assurance that all information

obtained will be treated in the strictest confidence and that it was a mere

academic exercise.

CHAPTER TWO

2.0 REVIEW OF THE RELATED LITERATURE

2.1 BACKGROUND OF THE STUDY

The original banking business in Nigeria dates back to 1892, when the First

Banks, the African Banking Corporation was established.

The Bank of British West African Limited (BWA) was established in Lagos

in 1894 and took over the African Banking Corporation that was established

two years earlier in 1892. This bank was later known as Bank of West

Africa.

In 1965, the Bank of the West African joined with Chase Manhattan Bank to

become the Standard Bank of Nigeria, which presently is known as the First

Bank of Nigeria Limited.

As transactional trading firms accelerated and trade expanded more banks

were opened which included the colonial bank in1936; Barclays Bank

Dominion, Colonial Bank in 1925 to form together with Anglo-Egyptian

Bank and National Bank of South Africa, the New Barclays Bank Dominion

in the indigenous sector. The National Bank of Nigeria, established on the

11th February, 1933, has the unique distinction of being the first successful

indigenous bank in the Country. It had an authorized paid-up capital of

N500,000.00 but only N1,520.00 was initially paid up. This increased to

N11,754.00, and by 30the June, 1984, it had again increased to N70,876.00.

The second indigenous bank was African Continental Bank Limited. This

started as a private company in 1937 as Tinubu Properties Limited with an

authorized paid-up capital N500,000.00. Ten years later, in January 1947,

the name was changed to Tinubu Bank registered as the African Continental

Bank (A.C.B) Limited, with authorized capital of N20,000.00 of which

N10,000.00 had been issued and paid up by June 1948.

The period between when the First Bank was established and when the First

Banking Ordinance of 1952 was enacted is referred to as the Free Banking

Era. During this period, many banking firms were established but only few

survived; the few that survived where African Continental Banks, the

Agbomagbe Bank of Nigeria.

Due to the growth in economic/commercial activities, Nigeria presently has

banks, which include Commercial Banks, Merchant Banks, Development

Banks and Mortgage Banks.

2.2 THE HISTORY OF DIAMOND BANK LIMITED

Diamond Bank limited was founded in 1990 with Paschal G. Dozie as the

Chairman. The Bank has nine (9) Directors who are: Professor Theophilus

A. Ogunbiyi, Professor Anya O. Anya, Senator Venmark K. Dangin,

Engineer Micheal I. Ufoeze, Daniel N. Akujobi, Clement Onwunna, Philip

Oduoza (the Executive Director), Mercy Wachukwu (Mrs) Executive

Director. During the year, Diamond Bank obtained the necessary approvals

to make an equity investment of 80% in the shareholding of the proposed

Diamond Bank Limited (DBL) Cotonou, Republic of Benin. The balance of

20% is owned by Republic of Benin Nationals, Diamond Bank Limited,

Cotonou has been set up to provide commercial banking services to its

customers and facilitate trade flows between Nigeria and the Republic of

Benin for existing and potential customers of the bank. The directors believe

that the bank is strategically poised for continued growth and development.

Diamond Bank Limited was licensed in Nigeria on the 20th of December,

1990, to carry on commercial banking business. The bank started operation

on 21st of March, 1991. Their mission is to create a unique international

bank focused on providing creative solutions to customer’s business

problem, with an absolute commitment to quality. The bank strategic focus

is driven by its core competence in the areas of investment management,

investment banking and electronic banking.

2.3 THE MARKETING CONCEPT

The literature review of this study shows that a lot has been done mostly in

the area of “Appraising the Marketing Concept in Banking”

The Marketing Concept according to Philip Kotler, “is a customer and wants

oriented backed by integrated marketing effort, aimed at generating

customer satisfaction as the key to ‘Satisfying Organizational Goal’. He

therefore went further to say that marketing concept mostly starts with the

firms target towards customers, their wants and needs.

The firm plans a well-coordinated set of products and programmes, to solve

these needs and wants, and in the process derives its profits through creating

customer satisfaction. The determination of what and what is to be produced

should not be in the hands of the government or in the hands of the

firms/organizations but in the hands of the consumers.

The marketing concept is the company’s commitment to the time honoured,

a concept in economics theory, otherwise known as consumer sovereignty.

The company can only earn their profit when they maximize their consumer

welfare by trying to produce what the consumer wants.

Melver and Major (1980) said in their book, “Marketing Financial Services”,

that “the tool of marketing, however elaborate and scientific, are in the end

no more than lever, insert and even dull artifacts when not in use, but

capable of producing dynamics--- when they have a point where they can be

fixed, an agreed direction in which the leverages should be put forth.

2.4 APPLICATION OF THE MARKETING CONCEPT IN FINANCIAL

INSTITUTION

Chisnall (1998) says that “the terms marketing and banking were considered

to be mutually exclusive by British Bankers, no need was perceived for

marketing their services professionally. It was not until the early 70’s that

British Bankers started to recognize and accept the importance of being

customers oriented. However, banks in United States of America set the

pace when they began applying the concept in the 1960’s ten years after.

Marketing Concept is a philosophy of business, which states the economic

and social justification of a company’s existence”.

Consequently, all company activities in production, engineering and finance

as well as marketing must be devoted first to determine what the customers

want and then satisfying these while still making profit.

Drucker, who is perceived to be the world’s leading writer on the field of

management says, “it is the customer who actually determines what a

business is. It is the customer alone whose willingness to pay for goods and

services, that converts economic resources into wealth, things into goods’.

What the business thinks if produced is not of first importance at least not to

the future of the business and its success, what the customer thinks he is

buying, what he considers as value, is decisive; it determines what a

business is, what is produced and whether it will prosper. Again what a

customer buys and considers as value is to create a customer, the business

has two and only two basic functions: marketing and innovation to produce

result, all the rest are cost.

2.4 THE ROLE OF MARKETING MANANGEMENT IN BANKING

Maiden (1983) in his article titled, “the role of Marketing Management in

Banking”, observes that marketing is becoming increasingly necessary in

banking activities due to intensified rivalry from other institutions.

According to him, those changes are felt, showing, and must be anticipated

as early as possible so as to cope with challenges of ever changing

conditions. Marketing jobs should not be seen as an ordinary job that should

concentrate more on formulating theories or policies, strategies or plans to

reach and affect the target market or the market that has been selected for

exploration.

He went further to state that the marketing approach in banking refers to

fours steps namely:

(a). Designing of new services or innovation of old ones according to

findings.

(b). Carrying out research to determine customers and prospects of financial

requirement.

(c). Marketing services to customers for whom they were researched and

designed (and this includes pricing, promotion and distribution at a profit

and,

(d). In so doing, satisfying the customers financial needs. Maiden went on to

present the banking approach in a circular form as shown in the figure 1

below. If you look at it very well, you will observe that it starts and ends

with identifying and satisfying customers needs. Stages two through to four

of this process are called the Marketing Mix and have a special importance

in any marketing programme.

FIGURE 2: THE MARKETING APPROACH TO BANKING SERVICES

Identify the Customer’s Financial Need and Wants

(6) (2)

Forecasting and Research Develop Appropriate Banking

Financial Market Product and Services to Marketing

Customers Needs

(5) (3)

Distribution Set up Suitable Pricing: Determine the Price of

Distribution Channels and Products and Services

Developed.

Banks Branches

(4)

Advertise and Promote the Products to

Existing and Potential Customer of

Financial Services

In the Nigeria perspective, the banks see themselves as producers of services

and marketers of services. They tend to equate marketing with selling.

This is very wrong and myopic of marketing. Hence, Chukwuano (1985)

observes that, the services rendered by Nigerian banks seem to be fixed or

rather unchangeable as they are still operating in sellers market. She on her own

advices that traditional concepts and values in every aspect of enterprises and

industries (including banking firms) are being forced to take a fresh look at

themselves.

Also, in Nigerian banks, the only activity of marketing practice by Nigerian

banks is advertising which refers to “any paid form of non-personal

presentation and promotion of ideas, goods and services by an identified

sponsor”. This is not to say that banks are market-oriented, rather, they are

advertising and promotion-oriented trying to push their services to non-

identified customers. The Chairman of the Board of Directors of the Nigeria

International Bank, in his speech during the official opening ceremony of the

bank in Lagos, said, “our philosophy states that the only way we can make

positive contributions to the development of financial services in Nigeria is to

ensure that the quality of services must be that of excellence delivered with

speed and creativity”. He described the standard of professionalism in banking

services in Nigeria during the past ten years as very poor and deplorable and

promised that Nigeria International Bank is all out to ensure that it offers its

customers courteous and satisfying banking services and also that the bank is

fully equipped to provide its customers banking services.

2.6 THE MARKETING CONCEPT AS A SURVIVAL STRATEGY IN

BANKING INDUSTRY

Nwankwo (1980) has in his opinion noted that if banks were to market their

services efficiently (to all classes of customer) much money would be

mobilized to save the economy and fought against inflation.

He said that at least, if 10 million out of 80 million or more Nigerians have up

to N10,000.00 each in their pockets; a fat sum of N100.00 million would be

mobilized immediately. It is fair to say that the width of the product mix is

inadequate. The depth of the product mix is also unsatisfactory because the

commercial banks have failed in the segmentation of their market and have

been unimaginative in designing the individual services they offer. The failure

to segment means, of course, lack of product differentiation within the

individual commercial banks.

Emordi, in his view on “The Need for Effective Marketing”, expresses a

different viewpoint in relation to banking and marking. According to him,

banks have continuously been involved in marketing process, offering high

rates to attract depositors and attempting to lend such deposits at rate profitable

to justify their existence. He went further to say that for them to do it

successfully, it is very necessary for banks to employ the hands of qualified and

experienced marketers to handle marketing activities.

Eribri (1983) shares the same opinion with Shankey, as concerns the banking

industry in Nigeria. He is of the opinion that, whichever way or angle the

Nigeria banking industry is viewed, the clear evidence is that the whole system

is faulty. Banking industry in Nigeria has therefore carved for itself an image of

rapid growth at the expense of quality. The establishment of new banks should

be encouraged to generate healthy competition in the banking industry, which

will help promote the quality of consumer services and remove the arrogance of

some bankers who have constituted themselves into a log in the shale of

progress in the banking industry.

Adukwu (1983) in his contribution examined ways of developing good bank

relation. According to him, in recent times, good customer or public relations

has come to be recognized as element of primary importance in banks’

operations, and as elements without which individual banks and indeed the

entire banking industry or system cannot survive. If the long range of banking

industry is to continue to operate as elements of private enterprise economy and

the goal of the individual bank is to grow and prosper, the practice of public and

customer relation is very vital for these banks to keep pace and more ahead;

bankers have to develop, create new variety of service to respond to customers

want and some to anticipate the customers by providing services they had not

known they wanted. The banking system in Nigeria is characterized by poor

distributional system. Nnolim (2003) observes that the limited number of bank

branches especially in the rural areas and the poor distribution of such branches

have contributed immensely to the reluctance of most people to accept cheques.

2.7 APPLICATION OF MARKETING CONCEPT AS A PANACEA TO

OVER CONCENTRATION OF BANKS IN URBAN CENTRES TO THE

DETRIMENT OF THE RURAL AREAS.

A research carried out by Soyode and Onyejide in 1973/74, shows that banks

were highly concentrated in the Urban Areas of Lagos, Enugu, Kaduna, Port-

Harcourt and many others. Statistics shows that 75% of Nigerian populations

live in the rural areas. Many rural dwellers are denied of banking facilities

hence, they lack access to bank credit to promote their business in the essential

areas of agriculture, handicrafts, and other basic small-scale enterprises.

To avoid the obvious predicament that are inherent, the Central Bank in 1977

began a concession and deliberate policy to direct banks into rural areas.

Rural banking programme finally kicked off in July 1977 with the aim of

cultivating banking habits among the rural populace, reducing urban migration,

mobilization of rural savings, creating credit for rural dwellers, developing

agriculture and providing employment for rural youths.

The first phase of the programme lasted for three years (July 1977 to June

1980) while the second phase, originally scheduled to expire to December 1983

lasted for four years and five months (August 1980 to December 1984). The

third phase, which was launched on the 1st of August, 1985, was scheduled to

end in July 1987.

While a total of 200 branches were allocated to 18 commercial banks in the first

phase, 266 branches were allocated to 20 commercial banks in the second

phase, and 28 commercial banks shares 300 branches in the third place.

In locating these braches, priority was to be given to Local Government

Headquarters and Industrial Commercial Centers in the rural areas. It is very

unfortunate that many banks do not comply with the Central Bank of Nigeria

guideline on rural banking. By the end of the first phase, only 188 braches were

opened as against the total allocation of 200 and by the end of the second phase,

only 181 branches were established as against the total allocation of 226.

Also, of relevance is the study of Lawal (1982) on “Recruitment and Training

Policy in Commercial Banks”. According to him, one of the major

shortcomings of banking systems in this country is the absence of public

relations attitude towards customers. This shortcoming is a product of a poorly

structured recruitment and training policy of our banks. A situation in which a

secondary school product, graduate/certificate holder is recruited and

immediately deployed without any formal orientation programme, that

emphasized the uniqueness of the banking industry, the responsibilities and

obligations of bank employees and their expected behavioural patterns, is at

best unprogressive system and at worst, a harmful omission.

It is therefore, strongly recommended, that the recruitment effort of prospective

state banks should be backed with a well designed/planned orientation

programme. However, there are numbers of situation in which the marketing

approach is sometimes maintained to be inappropriate.

Wilhamson (2003) gave three examples of such situations as:

(a) SELLER’S MARKET: This is in a condition where the sellers and not

the buyers are the key influence for example, when goods are in short

supply, this situation may rise.

(b) HIGH TECHNOLOGY: Where the company future is believed to

depend on its technical research ability to keep ahead of competition

above everything else. This attitude is common in the electronic market

for example.

(c) OTHER BOTTLENECKS: Where other influences than the market

provide the critical factor that determines the company profitability and

its ability to grow. These might include: Management limitations,

shortage of skilled labour, availability of finance, and contractual or legal

restrictions of the company’s operations. He concludes by saying that

more of these approaches can provide a corporate sense of direction that

is valid in the longer form in any way that the disciplines of the market

do, though, marketing concept is not a substitute for management

experience and discretion.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

In this chapter four of this study, it shows how the necessary information and

data were collected, sources and techniques employed in the interpretation and

analysis. In this chapter, data collected were presented and analyzed. The

findings from this data were used either to support or reject the application of

marketing concept in Diamond Bank Limited.

TABLE 1

4.1 Lists of questionnaires

Name of Sample Area Number Given Number Returned

Bank Staff 33 33

Customers 12 12

Total 45 45

TABLE 2

Question 1: What does your bank offer to it customers

Responses Variable Number Percentage (%)

Computer services and

good sitting arrangement

4 8.89

Spacious Hall 12 26.6127

None of the above 29 64.4

Total 45 100

Analysis

From above table, 29 respondents, about 64.44% are of the opinion that

Diamond Bank does not offer any of the options mentioned above. While 12

respondents, representing 26.6127% agree that Diamond Bank offers spacious

hall, 4 respondents, representing 8.89% say that Diamond Bank offer computer

services and good sitting arrangement to their customers.

Fig 4.1 PIE CHART

a. 12 x 360

45 1 =960

b. 29 x 360

45 1 =2320

c. 4 x 360

45 1 =320

Table 3

Question 2: Does your bank have different account for different class of

customer

Responses Variable Number Percentage (%)

Yes 31 68.89

No 11 24.44

Do not know 3 6.67

total 45 100

Analysis

The table above equally shows that 31 respondents representing about

68.89% said that Diamond has different account for different class. 11

respondents, representing 24.44% said no while 3 respondents representing

about 6.69%, has no knowledge of account differentiation.

Fig 4.11 BAR CHART

35

30

25

20

15

10

5

0

Yes NO Do not know

TABLE 4

QUESTION 3: Does your bank meet up with all their services

Responses Number Percentages (%)

Yes 13 28.89

No 27 60

Do not know 5 11.11

Total 45 100

Key

Yes

No

Do not know

ANALYSIS

From the above table, 13 respondents are of the view that their bank meet up

with all their services, while 27 respondents, representing 60% are of the

opinion that they don’t meet up and 11.11% claimed to have no knowledge

at all.

FIG III HISTOGRAM

30

25

20

15

10

5

0

Yes No Don’t know

TABEL 5

QUESTION 4: If yes to the previous question, how are their charges?

Responses Number Percentages (%)

Very high 9 20

High 11 24.40

Moderate 25 55.60

Low - -

Total 45 100

ANALYSIS

Table above shows that 25 respondents (55.60%) are of the opinion that the

bank charges are moderate, 9 respondents, about 20% said that the charges

are very high while 11 respondents, representing 24.40% said that they are

high.

TABLE 6

QUESTION 5: A Does your bank advertise your services

Responses Number Percentages (%)

Yes 3 6.70

No 39 87.00

Do not know 3 6.70

Total 45 100

FIG V BAR CHART

35

30

25

20

15

10

5

0

Yes No Do not know

Yes No Do not know

TABLE 7

QUESTION 6: Will the introduction of advertisement and gift incentives

increase your loyalty to your bank

Responses Number Percentages (%)

Yes 37 82.22

No - -

Do not know 8 17.77

Total 45 100

ANALYSIS

From the above table, 37 respondents, representing 82.22 are of the opinion

that it boosts their loyalty while 8 respondents had no idea.

Fig VI PIE CHART

a. 37 x 360

45 1 =295.990

b. 8 x 360

45 1 =63.990

TABLE 8

QUESTION 7: Do you feel that Nigeria has sufficient number of

banks/branches

Responses Number Percentages (%)

Yes 25 55.60

No 17 37.80

Do not know 3 6.60

Total 45 100

ANALYSIS

25 respondents, representing 55.66% feel that Nigeria has sufficient number

of banks/branches. 17 respondents said no while 3 respondents representing

6.60% said that they do not know.

TABLE 9

QUESTION 8: Do your bank has market segmentation

Responses Number Percentages (%)

Yes 4 8.89

No 3 6.67

Do not know 38 84.44

Total 45 100

ANALYSIS

4 agreed that the bank has market segmentation while 3 respondents said no

and 38 claimed ignorance of the marketing segmentation.

Fig 4 VII BAR CHART

30

25

20

15

10

5

0

Yes No Do not know

TABLE 10

QUESTION 9: Does your bank have preferential treatment to some of their

customers

Responses Number Percentages (%)

Yes 33 73.30

No 7 15.60

Do not know 5 11.10

Total 45 100

ANALYSIS

From table 10 above, 33 respondents, representing 73.30% said that banks

give preferential treatment, 7 respondents said No, while 5 respondents

representing 11.10% of the percentage claimed to have no idea.

TABLE 11

QUESTION 10: How would you summarize your impression about bank

services to the general public?.

Responses Number Percentages (%)

Satisfactory 15 33.33

Unsatisfactory 28 62.22

Do not know 2 4.44

Total 45 100

ANALYSIS

From the above table, 28 respondents, representing 62.22% are of the

opinion that their services are not commendable, 15 respondents are satisfied

with their services while 2 respondents, representing 4.44% claimed to have

no idea at all.

BAR CHART

30

25

20

15

10

5

0

Yes No Do not know

CHAPTER FIVE

5.0 RESULT AND DISCUSSION

The aim of this chapter is to ascertain the extent to which data representation

is in line with literature review in chapter two. On provision of amenities to

the customers, majority of the respondents feel that their banks offer none of

the amenities listed; the revelation portrays our banks in a very bad light,

which simply means that Nigeria banks are only after their customers.

They don’t think about their customers’ well-being. This attitude of the

banks will soon have counter effect on them because of proliferation of new

banks.

On the area of charges for services, table 5 indicates that 20% of the

respondents feel that the charges are very high; 24.40% consider banks

charges as high, while 55.60% of the respondents were of the opinion that

bank charges are moderate.

None of the respondents were of the view of the view that bank charges

were low. The data were in line with the opinion of Soleya the then Minister

of Finance, in the literature review where he reminded banks of the dangers

inherent in over-pricing services out of the reach of their client.

The implications will be a reduction of their profit margins and thereby

offend their shareholders.

On segmentation, majority of the respondents that is 84.44% were ignorant

of the existence of this. This figure portrays the fact that banks do not

practice market segmentation, otherwise, majority could have known. Since

the need and wants of every customer is not identical, banks should establish

such practice in order to satisfy the need of all classes of customers.

ADVERTISEMENT: Table 6 shows that the majority of the respondents

were of the opinion that banks do not advertise their services. Even if they

do they prefer electronics media (Television or Radio) for advertisement to

non-electronic media (Newspaper, Poster and Display). The few bank

managers interviewed orally stressed that they embark on controlling their

advertisement a lot because they want to minimize cost of their operations.

If the above assertion is true, banks are doomed, because if you do not say

where you are, nobody will know your where about and existence.

Advertisement will be invaluable asset for that job aided with gift incentives.

Both will build good public relations for any bank.

Insufficient number of banks/branches: The result shows that 37.80% held

the view that bank branches are not enough in the country. This shares the

same opinion with Erihir (1983), where he states that the establishment of

new banks should be encouraged to generate healthy competition in the

baking industry which will promote the quality of consumers’ services and

remove the arrogance of some bankers who have constituted themselves as

log in the wheel of progress in banking industry.

In conclusion, therefore, there is need for more banks in Nigeria, since we

do not have enough. This will definitely help in improving their quality of

services to customers as relates to conveniences, time-wasted and so.

CHAPTER SIX

6.0 SUMMARY OF FINDINGS, RECOMMENDATIONS AND

CONCLUSION

6.1 SUMMARY OF FINDINGS

The findings of the study are restricted to the results of the data analysis and

the reports of the banks.

Banks are in the business of rendering financial services to the customers.

Their ability to perform well depends on their adoption of marking concept

as the central purpose of business. Nigerian banks have been characterized

by time wasting in offering services to its customers and this can be

attributed to inability of the banks to fully computerize their various

branches to help in reducing the delays in banks, and to take care of the

inadequate number of banks and branches to carter for growing populace.

The table 4.II helped us to ascertain that air-conditioned hall, spacious hall

and other amenities help the customers to patronize the bank under study.

Again, the computerization of their services equally goes along way to boost

their transactions.

Regarding the analysis done in table 4.III, it was noted that Diamond Bank

has different account for different class of customers. A total of 31,

respondents, representing 68.89% were of the opinion that the banks have

different account for different class of customers.

Based on the analysis on table 4.IV, it was revealed that the Diamond Bank

do not meet up with all their customers services. By this, it was 27

respondents, representing 60% of the total number that agreed on the fact

that Diamond bank do not meet up with all their services.

The issue of their charges, we can infer from table 4.V that these Diamond

Bank charges are moderate. By this figure 25 respondents, representing

55.60% were of the opinion that their charges are moderate.

As shown in table 4.VI, it was revealed that bank under study do advertise

their services. A total of 39 respondents representing 87.00% were in favour

of the fact that the bank advertises its services.

Based on the analysis on table 4.VIII, it was shown that the Diamond Bank

under study will increase their customer loyalties.82.22 were of this opinion.

This same table showed that the Diamond Bank have marketing department

which will be a boost to their operation. A total of 38 respondents

ascertained that marketing department is among the departments within

bank. The marketing department according to a source in the bank said that

marketing department exists only at the Head-Office where they sit down in

office and append signature on approval of loans and overdraft to their value

customers.

The issue on table 4.IX is concerning preferential treatment, shows that 33

respondents, representing 73.30% were of the opinion that the bank under

study gives preferential treatment to their classified valued customers.

Finally, on the table 4.XX, it showed that Diamond Bank services to

customer’s and the general public are unsatisfactory. A total of 28

respondents, representing 62.22% opined in favour of the issue on the above

table.

6.2 RECOMMENDATIONS

For Diamond Bank to achieve its goal in banking industry, it must improve

on its services to satisfy its customers and retain their patronage.

It is therefore, recommended that the branch manager should lead by

example by providing good and effective leadership as this is one of the

determining factors with regard to quality of services offered to customers.

Again, the bank should embark on intensive training programme for all

categories of its staff, especially in the areas of public relations and human

relations management so that at each time while at work, the workers could

know the importance of being customer-oriented.

The banks should be aware that services are intangible and consumption and

sales are the major determinants of the good delivery to bank services. The

banking industry should establish a marketing department, that is good,

adequate and efficient that will see to the satisfaction of customers needs.

The major aim of marketing is “customer satisfaction”. Banks should try and

utilize professional marketing graduates in top banking management post,

apart from the marketing departments.

The banks should segment its market and work towards meeting the needs of

all categories of its potential and actual customers, because the more

characteristics the market is segmented by the more practice the manager’s

knowledge of customers is. The customers especially the unenlightened ones

should be made to feel as part and parcel of the business because they are

customers and without them, the bank cannot exist.

The delays in cashing cheques or in doing other transactions should be

reduced by computerizing. The bank should embark on aggressive

promotional activities so that the customers could be informed more

regularly about the services and bank offers. This will help the bank to be on

its proper footing in this era of competitive banking.

The bank should adhere strictly to the level provided in Central bank of

Nigeria guidelines about the level of charges they charge customers. Other

charges of the bank for their services should be made to a reasonable level

without risking profit. The banking industry should stop giving preferential

treatment to their so-called valued customers whom they give out loans

without collateral, which may result in the bank being distressed. They

should increase their marketing awareness to customers by intensifying their

efforts in making calendars, pens diaries etc, so as to instigate customers to

bank with them.

Finally, the Central Bank of Nigeria should monitor properly all activities of

commercial banks in Nigeria so as to control effectively the state of affairs

in banking industry in this our wailing economy.

6.3 CONCLUSION

This is the era of change in banking operations. The present trend in

competition in the banking industry creates a path towards re-orientation of

the banking business. The importance of customer to the successful

operations of any business needs not to be over emphasized. Proper bank

marketing can help the banking industry to adapt to needs of the customers.

In the light of efficiency, it is hoped that with the adaptation of the

recommendations above, the bank will improve its efficiency of operation

through the rendering of good quality services and staff showing optimum

courtesy when dealing with the customers. Not until banks begin to establish

marketing department and starts practicing marketing concept, which is

customers’ satisfaction, Nigerian banks still have a long way to go.

It should also be realized that the banking industry provides a wheel through

which the economy revolves. Hence, the proper operations of banking

business have a great impact on the economic development of our battered

economy.

APPENDIX 1

PROJECT QUESTIONNAIRE

Department of Marketing

University of Nigeria,

Enugu Campus.

May 3, 2001.

Dear Sir/Miss Madam,

APPLICATION OF MARKETING CONCEPT IN NIGERIA

COMMERCIAL BANKS (A STUDY OF DIAMOND BANK

LIMITED)

I am a postgraduate student of the above department conducting a research

work on the above subject. I wish most humbly to solicit your co-operation

in providing relevant answers to underlisted questionnaire items.

The survey is entirely on academic exercise and you are therefore assured

that all information resulting from this research will be treated in the strictest

confidence.

Thanks for your co-operation.

Yours faithfully,

Sylvia Okoye

FOR BANK OFFICIALS

1. Name:___________________________________________________

2. Department:______________________________________________

3. Designation:______________________________________________

4. How long have you worked with U.T.B.?_______________________

(a) 6 months – 1 year ( ) (b) 1 year – 5 year ( )

(c) 5 years and above ( )

5. What amenities does your bank offer to their customers?

(a) Computer services good sitting arrangement ( )

(b) Air-conditional hall spacious hall ( )

(c) None of the above ( )

6. Does your bank have different account for different class of

customers?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

7. Do your bank advertise their service?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

8. Do you feel that Nigeria has sufficient number of banks/branches?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

9. Do your bank have market segmentation?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

10. do your bank give preferential treatment to some of their customers?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

11. How would you summarize you impression about bank services to

the general public?

(a) Satisfactory ( ) (b) Unsatisfactory ( )

(a) Do not know ( )

INSTRUCTIONS FOR CUSTOMERS

You are required to mark (x) against the answer of your choice

1. How long have you been banking with Diamond Bank?

(a) 6 Months – 1 year ( ) (b) 1 year – 5 years ( )

(c) 5 years and above ( )

2. What type of account do you maintain?

(a) Saving Account ( ) (b) Current Account ( )

(c) Fixed/Investment Deposit Account ( )

3. Do your bank meet up with all your services?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

4. If “yes” to above, how are their charges?

(a) Very high ( ) (b) High ( ) (c) Moderate ( )

5. will the introduction of advertisement and gift incentives increase your

loyalty to your bank?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

6. Do you feel that Nigeria has sufficient number of bank/branches?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

7. Do your bank have marketing department?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

8. Do your bank gives preferential treatment to some customers?

(a) Yes ( ) (b) No ( ) (c) Do not know ( )

9. How would you summarize your impression about bank services to the

general publics?

(a) Satisfactory ( ) (b) No ( ) (c) Do not know ( )

BIBLOGRAPHY

1. Achukwu, M.A., “Developing Good Bank Customer Relation”,

Business Times, Sept. 27, 1982

2. Emodi, E., “The Need for Effective Marketing” Business Times

Dec. 3, 1984.

3. Erihri P., “Restructuring of Banking Industry in Nigeria”

Business Times, Aug. 22, 1983.

4. Lawal, B., “Recruitment and Training Policy in Commercial

Banks Financial Fund. Oct. 27, 1982.

5. Median, A., “The Role of Marketing Management in Banking”

Institute of Marketing Quarterly Review, April 3

1983.

6. MC Lever, C & Nagar G., Marketing Financial Services, Institute of Bankers,

Press, London, 1980.

7. Central Bank Bullion, Annual Report, Central Bank of Nigeria, 1986.

8. Shankey, C.S., “Banking in Nigeria” Weekly Concord, April 1, 1985.

9. Delozier, M.W & Woodsid A., Marketing Management Strategies and Cases:

Cahrles E. Merill publishing company London,

1980

10. Drucker, P., Management Task, Responsibilities and practice,

Prentice Hall inc., Ltd., U.S.A 1979.