University of Nigeria Research Publications
UMANTA, Chinwe Sandra
A
utho
r
PG /M.BA/ 02/37010
Title
An Appraisal of Marketing Strategies in
Commercial Banks (A Study of Selected Banks in Enugu Metropolis)
Facu
lty
Business Administration
Dep
artm
ent
Marketing
Dat
e March, 2004
Sign
atur
e
AN APPRAISAL OF MARKETING STRATEGIES IN
COMMERCIAL BANKS
(A STUDY OF SELECTED BANKS IN ENUGU METROPOLIS)
UMANTA CHIWE SANDRA
PG/MBA/02/37010
DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
SCHOOL OF POSTRADUATE STUDIES
UNIVERSITY OF NIGERIA
(ENUGU CAMPUS)
MARCH 2004
AN APPRAISAL OF MARKETlNG STRATEGIES IN
COMMERCIAL BANKS
(A STUDY OF SELECTED BANKS IN ENUGU METROPOLIS)
UMANTA CHIWE SANDRA
PG/MBA/02/37010
A THESIS PRESENTED IN PARTIAL FULFILMENT OF THE
REQUIREMENTS FOR THE AWARD OF MASTERS OF
BUSINESS ADMINISTRATION (MBA) DEGREE
DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
SCHOOL OF POSTGRADUATE STUDIES
UNIVERSITY OF NIGERIA, ENUGU CAMPUS
MARCH 2004
SUPERVISOR: PROF J. O.0,NAH
CERTIFICATION
I certifL that this research work by Umanta Chinwe Sandra with
registration NO.PG/MBAl02/37010 was completed under my supervision
and approved as having met the requirement of the DepaJ-tment of
Marketing, Faculty of Business Administration, University of Nigeria,
Enugu Campus, for the award of Masters of Business Administration
UMANTA CHINWE SANDRA
PG/MBA/02/37010
PROF. J .O. ONAH (Project Scrpervisor)
J.0 NNABUKO (t--e-O$ (Head, Dept of Mkt.)
DEDICATION
To the Glory of God, this work is dedicated to my unborn child-1-.II.
I csprcss rny gratitulc to all tlwsc who wcrc ir~strr~~nc:ntal i l l
~naking this work a success. I am particularly thankful my wortderfiil
friends at tlie other banks for their contributions and assistance in getting
the materials used and i n ~naking sure that my qucstio~~naire where
distributed and duly retirrned on time. 'l'lwy include Mrs. Retl~a Alirrrucl~i
Ajike, Nwachukwu c n and Mrs Edith Nwobi, (the area accountant) all of
IJnion Dank Plc, Brono Onyekpe Ndu ,Ozoko Demian of %,enitll I3ank
P L C , Cyril Onaga,Mr. E. C. Ka~w, the I'ublic Relation Oll'icer, 01' First
Rank PIC, Mbonu David of Guaranty 7'rust a11d 111;111? ~ ~ I I c ~ s ~ ' 1 1 0 for
wait of space cannot bc rnentioncd . I love, your c=l'ti)~-ts are by
appreciated.
I am immensely tlia~lkl'iil to niy project s~~pervisor, Prof. J.O. C)nali,
for tlie pains taken to guide correct and direct this work.. To my Head of
Department, Dr Mrs. J.O. Nnabrko, 1 say many thanks.
I am greatly indebted to other f i ie~ds (such as t l~c 11-ulos, the
Ifernes, the Mbanugos and the Okoyes), relations rind all lor their useful
advice.
Finally 1 remember wit11 pride and special thanks all ~iiemblers of
m y family whose forbearance ~iioral support and prayers ~ m d e it possible
for me to reach this conclrrsive fulfilment.
Though I have enjoyed tlie counsel, assistance and encouragement
of many, the final responsibility for what yo11 read rests with me ard you
can confidently attribute to me any error and shortcoming. you my
encounter.
Umanta Chinwe Sandra
- v
ABS'IKAC'I'
"An Appraisal of Marketing Strategies in Commercial 13anks" is a
study of some selected coinmercial banks in 1':nugu metropolis.
The commercial bank environment has continued to witness keen
competition as the operators evolve strategies to face the challenge of the
deregulated economy.
Prior to the deregulation oC the banking industry in Nigeria,
competition in the commercial banking sub-sector was not so stiff to -
cause any threat to the survival of the banks. The deregulation, however,
paved the way for new entrance into the sector and as more players enter
the scene competition is intensified and every bank strives to have
compctitive edgc ovcr othcrs. I n ordcr to mcct thc compctition, banks
have used various strategies such as: Automation of their operations,
aggressive market segmentation and product development, intensive
advertising, and maintilining attractive physical environment to attract
new patronagc, even with all these, the banks arc not still surc whctlier
these strategies are good enough to cope with thc compctitive banking
environment. The objectives of this study are therefore:
To determine whether the strategies adoptcd by commercial
bunks enhance their ability to generate profit.
To ascertain whether the strategies adopted by the banks
enhances their efficiency, encourage new patronage as well
as enh~nce public confidence on the banks.
To ascertain the appropriateness of each strategy adoptcd by
the commercial banks in coping with the competitive
environment of the banks.
To determine whether there is a difference between the
attitude to work of the old and new generation bank.
. . ( t i ) 1 0 dctcst~ii~ic wlictl~cs tlicrc is a ~li~'lki~c:~i~c l w t \ v i x i ~ t l~c
attitude to work of the old arid ricw gelicr-at ion bani\:
(e) To identify tlic sliort crmii~gs of cilcli strategy adopted by
the banks i n coping with the coiripetitive Imking
environment atid
(f) To proffer recotnmendations that are in line with our
observation.
As we know, tllerc are several coinri~ercial b;lill\s iri Nigeria.
Today, hug11 ~netropoiis alone has over. t\velity comir~crcin'l banE.s made
up of both the old and new geiicsat ion banks all having I'lc as #he last
word.
These banks include:
(1 ) First Bank of Nig. ;
(2) Union Bank of Nig.;
(3) United Bank for Africa;
(4) ACB International Bank; " . . . (5) African Intertmtional Bank;
( 6 ) Diamond Bank;
- . 7 Guaranty Trust I3ank;
(1 0) International Bank;
(1 1) Continental 'Tnist Bank;
(1 2) Broad Bank of Nig.
f '1 3) Hallmark Bank of Nig.
( I 4) Standard Trust Rank of Nig.
(1 5 ) Allstatcs Bank of Nig.
(1 8) Wcina l3ank of Nig.
(19) Citizens Bank of Nig.
(20) First Atlantic Rank.
(21) Afex Bank of Nig.
(22) Oceanic Bank of Nig.
The iirst live are among what is categorized as the old generation while
the rest are among the new generation category.
Six banks (3 of the old generation) namely U13A First Bank and Union
and (3 of' the new generation) namely Diamond, Zenith and Guaranty
Trust were selected for the study.
I11 pursuance of the ob-jective of the study, the researcher ecplorecl
data from Primary and Secondary source ol'data.
Primary data wcrc gcneratcd through dircct obscrvation, personal
interview and two sets questionnaire- one to bank staff, and another to
bank customers.
Secondary sources are from literature revicw based on past works
done on the field, textbooks, journals and newspapers.
Four hypotheses were formulated and tested using statistical tools..
I11 order to get information for the study, a total of276 survey
questionnaire were
administered to six selectcd commurcial banks in Ilnugu nlctropolis out of
which 255 rornis were properly coinpleted and collected for the study.
This represents .92% of the sample size. This was supported by interview
and literature. In structuring the questionnaire, the researcher used closcd-
ended questions which is known as structured controlled response
questions in order to draw out ncccssary and required responses with
deviation.
At the end of the research work, some important findings were made.
'l'llcsc lindings include:
1. That the survival of any bank in the high competitive banking
cnvironmcnt, dependent on tllc strcngtll of'it stratcgics;
2. That marketing strategies used by the banks are basically the same-
the difference is in the approach;
3. 'I'hat the dilr'crcnt in approach is the nir~,jor reason why the lxw
generation banlts are more articulate in scrvicc dclivcry;
4. That although the approach dif'f'cr, the banks have one common to
be the best in ternis of customcr satisl'action;
5. That some of the stratcgics actually cncouragc custonicr
patronage; and
6. That the best strategy is the marketing mix that ensures customer
satisfaction.
13ased on the findings, the researcher made the li)llcwing
recommendations:
1. That banks should adopt strategies that is customcr oriented a:i
i t w i l l cnsurc repeal palronagc;
2. Banks staff should be trained on the need to effect strategies
formulated;
3. That the comniitmcnt approach of the old gencration banks
shbuld be embraced all the old generation ones;
4. That the banks should face out those services like the use of'
credit card that do not elicit customers satishctions; and
5. That the notion that customers like cheap products/scvices
should bc reviewed by banks.
CEHrl'I 1'1 CA'I'I ON ............................................................ I1
DEDICATION ................................................................. I11
ACKNOWLEDGICMENT .................................................... IV
ABSIHAC'I'. .................................................................... V
TABLE OF CONTENTS ................................................... IX
CIIAI'TER ONIC
INTRODUCTION ....................................................... I IIACKGKOIJNU 017 'I'l IE SrI'UDY ................................. 3
S'1'Ar1'15M EN'I' O F '1'1 11' 1'1<013L15M ............................. ..A
4' RESEARCH QUESTIONS: ............................................ 1
S O M E O F T H E BANKS SrTRAl'lC<~l ITS: ......................... 5
PURI'OSli:Ol~'I'Illi:S'I'UI)Y ...................................... G
OBJECTlVES OF T H E STUDY .................................. 6
HYPOTHESES ................................................ 6
S C O P E OF 'I'IICC S1'1JI)Y: ........................................... 7
SIGNIIiICANC15 017 '1'1115 S'IIUI)Y ................................ 8
1.10 LIMITATION O F T I I E STUDY ................................... 8
CHAPTER T W O 2.0 I IEVIEW O F RELATED I. IrI'ERA'l'UIIl~. ..................... I 6
2.1 UNDEIISTANDING T H E CONCli:PrI 01' MAR1<15'1'1N(; STIIATEGY: ......................................................... 16
2.2 THE BUSINESS OF COMMERClAL BANKING ......... 19
'1'1 I I!: MAl<liE'I'ING S'I'KA'I'EGIES OF COMMERCIAL
BANKS. ............................................................... 21
T H E EFFECT O F T H E STRATEGIES ON
................................................... COMI'ETITION. 31
T H E EFFECT O F T H E STRATEGIES ON PROMOTION. PRODUCTS DISTRIBUTION AND I'J<ICING/INTEKEST RATE. ................................................................ 36
BANK CUSTOMEHS AND T H E I R NEEDS ................ 38
A BANK'S STRATEGY ......................................... 40
BUILDING GOOD RANKING RELA'I'IONSIIIP: ........ 43
COMMERCIAL BANK AND MODERN .................................................. TECHNOLOGY. 47
REFERENCES. .................................................. . S O
CHAPTER THREE
........... RESEARCH DESIGN AND METHODOLOGY 53
...................................... SOURCES . . OF DATA 53
............................. 'RESEARCH M ETI.IOI)OLOGY. 55 . .
E PILOT SURVEY ................................................... ,6
INS'I'HUM ENrI' USED. .......................................... 57
.................... .DETERMINATION 0 1 ' SAMI'L15 SIZE 57
SAMPLING PROCEDURE. .................................... 58
METHOD OF ANALYSIS ..................................... 59
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS ............... 60
4.1 QUESTIONNAIIIE DISTRIBUTED AND RETURNED.60
5.2 COMMERCIAL BANKS NEW I I O D l J C I (SERVICES) AND CUSTOMERS SATISFACTION : ........................... 75
5.3 T H E IMPACT O F INTENSIVE r\l)\'I~H'I'lSIN(; ON BAiUKS SALES ..................................................................... 77
5.5 'THE NEW GENERA'I'ION VERSES 'l'llli: 0 l . D . Tlf I I R DIFFERENT BANKING AYI'KOACI1 GEhlERA'TION: .... 80
................................. 5.6 HYPOTHESES VERIFICA'I'ION $2
REFERENCES: ....................................................... 92
C11Al''l'l~R SIX
6.0 SUMMARY. GONCL. USION AND HECON1 MENDA'I'ION .. 9.3
6 . I SUMMARY ............................................................... 93
......................................................... 0.2 CONCI. \ISION 96
............................................... 6.3 RECOMM ENDA'I'ION 97
6.4 HECOh/lh/IENDArI'ION FOR FUK'I'HEK STUDY ............. 98
BIBLIOGRAPHY ..................................................... 99
APPENDICES ........................................................ A04
S T R A T E G I E S A S COMPETI'I ' ION SUKVIVAI, 'TO01,S. .............................................................. -62
RISASONS F O R CORI11'1J'I'EI<I%INC; ( 'ORlhl l ~ I l ~ ' l i l l , BANKS OPEHA'I'IONS: ........................................... 02
1'1 IE IMI'AC'I' O I J '1.1 IF; MAI<KI?rI'INC~ S ' l X A f l ~ I ~ ( ~ I l<S O N C O M M I ~ K C I A I . BANKS A1311,l'I'Y 'rO G E N ~ l U ' l ' l ~ P R O F I T .......................................... ,,.. ................. -04
VIfI I \ ' N I<\!' SISl<\iICE INNOVA'I'ION/I~IEOI)tlC:'I'S ARK IN'l'l<ODIIC~EI) IN ClOhlMERClAL BANKS ................. 64
NEW S E R V I C E IN COMNIERCIAL BANKS AND T I I E I R IMI'AC'I' O N PArI'RONAGk: ............................. 65
REASONS FOR ADVEH'I'ISING T H E C O M M E R C I A L ................................................. BANKS SERVICES: 66
O N 1,INII Sl<HVIC:ES 01' '31'11k: C:ORIMI'NCIAIJ I3ANK:S .............................................................. SERVICES 67
'1'1 1E tlSE Ol? ' l l IlC 13ANKS BLIILDING AND r l l l l l ~ YIIYSIC:Al, ENVIHONR4ENT QUALI'TY SERVICE 017 T H E BANKS A S AN ADVER'I'ISEMENT TO
..................................... A T T R A C T PATRONAGE.. ..67
T H E I M P A C T 01' INI'ENSIVE A1)VEH'I'ISING ON ... T H E SA1,IKS O F COMMERCIAI , BANKS SEHVICI<S: 68
15. AW'OMATION 01; '1'111;: IIANK Ol'k=RAl'lONS AND TlIE QUALITIES O F I'IIEIR SERVICES ............................. 71
16. '1'1-IE IMPACT O F THE CB~II\/IEHC:IA1~ HANKS NEW SERVICES ON CUSrrOhl E M . . . .. . ... .. . . . . . .. ... . . . . . . . .. . .. .... 72
1.0 INTKODIJC'I'ION
The co~n~nercial banking erlvironment in Nigeria has witnessed an
~~~ip~xxedentcd conipct itioli i l l t lie past dccacte as the operators i l l the
sector evolve strategies to face the challenges of a deregulated economy
(Hugo and Adeleke, 1998 p.28).
Prior to the deregulatim of the banking illdust ry, the q u l ity of'
colnlnercial banks services were generally very poor, this was because
banks were few arid there was 110 serious cotnpctitio~l of any kind. (Peter
2001 p.8)
'I'hc deregulation of the economy in 1986,close to two decades now led lo
a liberalized approval and issue of banking licerises, wliicli resdtcd to a
rapid gowtli in the iiumbcr of newly licensed banks operati~ig in the
comtry (Ebliodaghe, IW7:8) According to I lassa~l and Oluycmi ( 1994
p.56) the new banks brought, dy~ia~nis~rl, cllallcngcs, cor~~pct i t ion and
growth to the sector. The number of banking licenses issued so far in
G Nigeria as at March 2004 is overwhel~ning.
As co~npetitio~i conlinl~cs lo i~wcasc, c ~ t o ~ l l c ~ s I ~ ~ o ~ l i c Inorc wlcclivc. " '!his is because competition creates awarclicss and tllm Ilclps crrstoliler t o
discrimillate more ~rlea~~iugf~rll y. I lciicc, i t 1.)cco111cs I I I ~ I - C
important for commercial banks to takc steps to stay close to what tlal::
customer wants. (Andrew 1 992 p.20).
Consequently, commercial bank have bcco~rlc responsible to t l~c
~ieeds of their clientele for efficie~it, courteo~~s and excellent delivery 01'
more value added services (Hugo and Adeleke ,1998).
In the search deposits, co~nmercial banks havc carrictl tlleil-
services to the door-post of the colisulner by dcvelopi~ig as Inany
brariclies as possible.
is "Convenience". 'I'llus to ~rlako o I I k 1 scl-viccs
convenient for customers, \ ) ~ ~ I I C I I C S ~ I C Iocatcd at strategic places i l l tow^
01- co~ll~nimities. Where applicable, con~mescial banks arc locatcd around
business centers of a community with a good sing board that depicts the
presence of a bank (Banking A~lnual 2002 p. 03). Co~nn~ercial bank 113s
develop Inany branches, due to the increasi~ig cost to\vastls providing
qualities of balk services were still very poor
Apart from spending considerable length of time at the counter,
most bank custo~ncrs Iiavc had to co~ltend with inefficiencies in varying
degrees such as wrong posting in statcrllcnts 01' accounts and mbelievable
arithmetical errors in cash paid and received over tlie counter,(First Balk
Monthly Business a~ld Ikmno~llic I<c:-port L)cccmbcr, 2000 p. 1 ). ' l h ~ ~ s
some co~n~nercial banks saw the need to place greater prc~niu~n OH
qualitative training and retraining of their \vor-1.; l'orce to ensrlre efficient
scrvicc dclivcry, with the Ilopc Illat this will i~ic~casc c ~ ~ s t o ~ l ~ c r s
satisfactio~l as well as attract cr~stonlcr liom other balks.
I n recognition of the c~o~tributio~l and important role of stat'f'to the
achievc~nent of' its objective and tlie overall srlccess of the banks, it also
become imperative for many com~nercial banks to offer high salary as
well as many other attractive fi-inge be~lelits to ~iiotive theis staff fbr
greater performance towards achieving the balk's objective. To go to
bank in the ~norning to drop a chequc only to set111-11 aftcs the day's
business to collect t llc cash. 'I'llc ugly sc.elw 01' cro\\.clcti banking Ilalls,
o I . 1 BACKGROUND OF T H E S1'lIDl'
Rank of Nigeria PIC was establislled to takc ovcr t l ~ Afi-icn Banking
C'orporntion. 111 19 17, Barclays Bank, now Union L3n1lk o r Nigeria PIC
joined the British Bank for West Afi-ica.
initially through private individual initiatives and later tll~.ol~~!Il dclibcrate
government policy. 'I'lle first indige~lor~s bank was the National 13;mk 01'
Nigeria. I t was incorporatecl ill 1933. 'l'lle African Continelltal I3allk
a~lotlier indigenous Bank also joined il l 1974. Other \)allks also joi~led
later. Many other banks joined in the 1985 to 2000. 'Today, we have over
89 commercial banks with over 3,000 branches in Nigeria thus making
the ballking industry very (;ompet itive
IHowever, comnlercial banki~lg witllin these periods up to 1986,
was described as 'armchair' ballking. 'T'llis is because banks were Sew
and competit ion in whatever form during 1 he period was not so stif'f as to
cause any threat to the srirvival of any colnlnercial bank. As sucli,
commcscial banks services were sub-standard and highly inefficient.
The deregulation ol' the 1)allkillg system i n 1986, which brought
about a liberalized bank licensing policy by the govcrll~ne~lt cl~cor~l-agccl a
rapid increase in the nu~nbers of banks and other financial inst i t r r t ions
operation in the country. Conseclr~ently upon this, the number of
com~~~crcial h l h s r ~ l l c l t l l c ~ I N illlcllcs rose, tcsl)cclivcly, I I O I I I .JO ;111d ( r 7 1 1 1
1986 and 78 in I996 a d as at March 2004, we have over 89 coln~l~crcli;il
banks with over 3,000 natiotiwide. Said Okeke (2004 p. 15) ". . . .last
1;ritlay CI3N IWW rcgdation oti clcaring took oll'witli only 7 banks as
'scttlement' balks cIt:a~.ing f0r he others (72) as agents'. . This rise in the number of market participants engendered a keen
conlpet i t ion thus giving rise to t lic applicat iou 01' strategies to cnhancc
customer satisfaction as well as to \YOO I ~ C W C I I S ~ O I ~ I C I . ~ .
Sincc tlic dercgulat ion of the banki~lg industry in N igel-ia: tllc
conin~ercial I~anki~lg cnvil-onr~icnt has col~til~i~cd to witness serious
competition, In recent times, the degrcc of cornpet it ion within the scc,tos
have been so stiff that the operators hiive hiid to look for alternatives
ways oi'compet ing.
The challenges ol'the banking survival, the tiecd to ensrlrc cf'Scctivc 0 mobilization and cl~~annelization of' fiilld, and the desire to cnliancc
competitive brancli ofiiccs at variorls stl-atcgic loci~tio~ls in towns, acquire
appropriate technology that enable tllcm off'cr- innovative scrviccs for tlic
convenience of custo~ners, developing ncw prodiicts and eITectively
ciclivering them to selected segliients of the nlaskct, and i~itensive
promotional activities to enllancc their i m g c ;IS wcll as ~liai~ltai~iing
attractive environment to woo new ct~stoniers.
Does strategizing help the comnlercial banks sur-vivc competitioi~')
Do the strategies adopted bv the comrncr-cia1 h k s oftcrl crlcour;lge
new patronage of tllcir servicesf?
Do the strategies elicit ci~stoiners' sat ishction?
110 quality of'service of the co~nniercial banks have any significant
relation ship with IIICI-c ability to ~ilobilizc deposits?
Has intensive promotion any positive impact on the sales ;7f'
co~n~nercial b a k s services?
To what extclicl do these strategies cnl~ance public confidence on
the banks?
The research sliow that some of the banks marketing strategies inclutle:
r EfTect ive service dclivcry;
; Market Penetration;
r New PI-ocli~ct Developlncnt;
> Different iat iotl /Seg~nelita t ion;
o r Customer Ser-vim;
r Manpower Developtneut alld O ~ I I C I - S .
Each of the above stratcgies will be discr~sscd md appriliscd il l litcr-at I I I ~
I-cvicw .
1.5 PURI'OSE 01 ; '1.1 1 I< STUDY
'l'lle pwpose of tllc study is to appt-aisc mat-keting strategies
adopted by com~iiercial banks with a view to deteni~ining wlletliel- t l ~ q
are good e~iough to cope with irlcreasirlg compctitio~l i l l thc ba~lki~lg
ilidirstry.
I .O Ol3.JlX~'l'lVK O F 'l'lll5 Sr l l l l )~ '
'I'lie major objective of'tlw study irlclutfc:
r Firid out why banks strategize.
r To determine how the stratcgies atloptcd by co~lit~iercial I:)irnhs
e~ilia~lce their ability to gematc polit.
r To ascertain whet her tlie strategies adoptcd by tllc ban hc e~)li:s~icc
8 their ef'ficiency, encourage ncw patronage of their scr-viccs, as well
as c~~liance j)uI)lic cc~~l ' rdc~~cc O I I t l ~ c I ) ; I I I I \
o r' To ascertaitl the npp-opriatc~icsh ol' cacll sl I ;)ley! loptccl in
lr co~iiniercial badis in coping \\/it11 hc compct i t ikc c~ik rr.o~i~neril o t'
tlie banks.
r '1'0 establish whctllcr t l l u r r is a tl~l ' ii .~~c~~cc 1xI\\w11 .job :iplxoacII~ of
tlie old generatio11 bank c71d the 11ew ~ C I I C I . ; I ~ I O I I OIICS.
r TO identify the sliortcornings of each stl-atcyy adopted by the banks
i l l coping with the cor~ipetitive barikirlg c~~vircm~iic~~t . and
r To proffer recommeridntions that are in line \\ i t l i U I I I obsercat ion:;
1 .7 HYI'O'I'I I ICSW
'l'he following liypotlicses will be testcd il l thc st rrdy.
HO' Intensive advertising in commercial banks does not liave
significant impact on their salcs.
Ho4 Quality service of a batik is not a major consideration in custoli~er's
choice of co~nmercial batik.
1.8 SCOPE OF 'I'IlE S'TLJDY
'The scope of this research work is specifically limited to the operations of'
six commercial balks in I %ugu ~iict ropolis \\.liicll arc rep-CSVII tcd by t I I C
f'ollowi~ig batiks:
First Bank
Union Bank a d i 7- Old Generat ion
Uni tcd Bank for Afi-ica,
'Tlic above are known as the big three. J
Diamond Bank
Lcnitli Batik
Tlicre would have been no \?jay 01' covering tllc entire spectrum of
commercial banking i n Nigeria. F3ut i t will bc ~mrealistic to cover over 89
commercial banks with over 3000 branches opcrat i ng i n t lie corlntry. So
t lic researcher has selected 6 banks witliiii I % I I ~ I ii~ctropolis to represent
~j A . =.
' 4
operate, their asset base and the size of deposits tlicy Iioltl \\ 111ch is a 1~lea1
L indication of the size of patroilage they ~iiaintain. Wll~le wc me the ollw i'J
\ ' t three Diamond Banli, Zc~litli Bank and Gi1a1.a11ty I'ri~st I3adi so as to 4
v show how favorably the new generation banks compute wit11 old \I
. \ \ ,U' I ' 'I generation ones.
I 9 SIGNIIi'ICANCK 01; 'I'IIK STIJDY
This study is significant for various reasons:
The information data so obtained would add to the field of academic. F. I he result of the research is expected to give all insiglit into the probleni
of marketing strategies i n comlnercial banks. 7'1ie researclm- also hope
that this will arouse the interest of otller scliolsrs and resea~dlers in the
field of marketing s~rategics as i t relate to the operations 01' com~nercial
Lmks.
'I'lie study wlien co~npleted will serve as a reference check as source of
secondary data for hture rcscarclw i l l tllc field.
Above all, the study will gcilcrate IW\V Ii~*pof llcscs Sor Sutw.c ~'cseal-cll. n
f~uldamental process underlying marketing strategies i l l co~n~nercial
banks.
'rhe execution of this research was not without problems. I t has v
been particularly constrailled by i~inccessildity to solile relevant dala for
analysis.
1 . I 1 . T H E BANKS UNDER STLID]'
(A) - U N I - 1 -
United Bmk for Africa I'lc was cstablisl~cd i n 1961 and it was tlic
first of the inter~iationnI banks opcmting at tile t i ~ w to be rcgistt.ld . - --
under Nigeria11 law. As at h4arcl1. 20041 the banks 11as o\w 238
bl-aticlles across N i gcria and two off'sliore bl-a~lclics i ri NCW 1'01-I<
and C;rand Cavnian Island.
Mission Statement- 'To provide first class service t o t our
customers delivcrcd by wcl l (railled a d Iiiglily rnot i \~:~lcd ~ I I . I . u ~ I I :
aided by the best tecllnology, ge~lcrati~ig supcl-iot I-ctm-1s io
sllarellolders while positively impacting the corn~nr~nity scrvccl.'
10\v cost and stablc deposit wil'li responsiveness arid qualit!.
service delivery.. .
(B). FIKS'I' D.?NK 01' NIGILRIA ( l l 3 N ) PLC-
FBN was established in the year 1984. i t got listcd on tllc Nigcriarl
Stock excliange ill 107 1 m d has gro\wi li-om strcngtli to strength
over the years. 111 the cllairma~l, IJmaru Muttallab, (2004)ow11
words---"over the years. the baud has esperie~lced pllcno~nenal
gro\vtI~ of -N -55.6 milliotl i n 1980, to - -N 7.75 11) xs at M:~~-cli,
2004. Total assets h s c 3 12.5b \vliilc deposit stood at - N 207.18b.
as at saliie date''.
Mission Statement------- 'Hetnaiti true to our name by providing
the best financial services possible'
Marketing Strntegies-
i Delivering superior sl~areholders value;
4 > Intensify broadelling services orf'cred;
Mittatlab U a, had this to say ahor~t their ~iiarkct ing st~-ategies-
"Accordingly, awe shall remai~l focuscd O I I our strategy of progressive
inter-~latiorializatioti to take filll advantage of' the burgeonitlg trod flow
arising from the economy's growi~lg i~rtegrat ion wi tli global ecolionly".
of branch network b c i m balds indegenizat ion 01' 1970 to 3 1 3 br allcli
network as at the end of 2OO3./2OO4 financial year.
Mission S1;ltcrncnt.----"'I'o 1)c tlic forclriost I'i~la~lcial itistitutioll with tllc
tnost satisfied cr~sto~ncrs".
Marketing Strategies---- Survival strategies inclr~de the followings-
i Technology Innoval ion;
'r Convenience banking;
r Asset-liability I I ~ ~ I I ~ ~ C I I I ~ I I ~ strategy;
T 1 ~xpallsioll;
T l'rodrrct diversi ficat im.
G .A.'I' Oboll (2003 pp. 13,17) ,the Group Managing I>irector/Chicf'
Executive officer of the bank Iias this to say wllctl discrtssing tllc
(I)). GUARANTY 'l'lil JSI' IIAN K-
'I'l~is is one of the Ilew ge~lcraf irm baill\s cstaldisliccl 111 t l~c I 000s.
Wlission Statement-"a crlltrrse yo;^ call bank on."
Marketing Strntcgics-
Product develop~nent;
r Geogri~pllical ~narketing;
r Orga~rizat iord stsuctur-iug;
r Diversi ticat ioll;
r Manpower dcvclopment etc
Its profit bet'ore tax h r tllc year 100312004 s r d at ~-1\1=-5b,
ixy-escrrting a 24% irlcrcase over thc prcvious ,car-. EClicie~ll
~llilll;\g~lll~~It o f cost of' fu~ld S C S I I I ~ C ~ ill a 179,h i ~ w ~ ~ l l l in I I C ~
l~lterest inasgin from -=N-5.4b to =N-6.5b in year XO3I2OO4.
Said the GTB Chief Executive, Tayo Adcri~~ol<un 1(2004) L L concenli~lg his stratcgic.c;- . as p 1 1 of'orll- I ~ I I I ~ < L ~ ~ I I I ~ ! sL~';:t~'y\.
we began a new rcgional orga~lizat~cm strr~ctur-c li,~ .. diversification in march, 2004.. . ..
operates as a universal ball with OC'CI. 45 IKIJ ICI ICS nit11111 1 1 1 ~ ' co~~ntr!.. - I
asset base of over ==N=59b as at the clid of' I'ir~awial year 2003/2004
ci~storners business probleliis with an adet1rl:ite cor~il\iitliie~~t to qmlity".
St ra tegics-----
r Wealth creation;
Y l'ecl~~wlogical iti~io\~atiot~:
r Matlprwcr devclopl~lc~lt
I Product ~nodificat ioii
r Scrvicc cxcellelice stralcgy ctc
(17). ~ I N I ' I I I .IN'I'KHNATIO_NAL BANK (ZIR) P I X
ZIB PIX was establisllcd in May, 1900. I t has its corporate ol'ticc
at 84 Ajose Adeogu~i St!-cct, Victoria Islalid I ,ages. As a1 tlic clad ol'
Mission Statement---- " to contiriw to illvest il l the best people,
Market pelietrat ion;
tecli~iological innovation;
I~iter~iatjolializatio~~;
Sta 11' devcloprncnt ;
a3 Diversification etc
' * . . govenlarice i n lilie with global Ixst pi-act iccs.
3.0 l<k!VI L C W OF l<E lJA'l ' l l l l , l T l l < A ' l ' ~ Jl<l< 3 _ . I I~NI)EIWl'ANI)IN(: I ' I ~ I ~ <'OV('KID'I' 0 1 ; f i I A l < K k ; I ' l N ~ ~
S ~ l ' I < f i ' l ~ l ~ ~ G J ' ' According to Acllwlba (7000) t l l t \\lord st~:\lcc\ L - conics lioril tlic ( i r o c ~ l ~
word strstcgia wliicli Illcalls llic X I or scicrlcc 01' I w i ~ ~ g ;I gcricral.
El'fective generals are cspcctctl to Icad all arm!; to Iiold territories arid
wipe out the 'e~ie~ily. Wiping out 'the C I ~ C I N ! ~ ( C O I I I ~ C ~ I ~ O ~ S ) i n the fiice of
stiff cornpetition is what ~narketing strategy all about. Strategy is also
broad arid basic plan ol 'actio~ by \~.llicll ill) orga~limtio~l iritc~ids to rcacli
its goal. The goal of ~nnrkcting is to pricc. place. ~ ) ~ o ~ i i o t c and dlcsig~l
products, services and idcas 1 1 ~ 1 1 will sat ~sl) co i i s r~~ l~c~ .; a1 a 111 ol'it.
Tlicref'ore by ~iia~kcting str;~tcpies \vc 11ie;i11 ilw ~ C C I I I I I ~ I I C . ~ ; I I I C I \ W \ S i l l
which all orgmiz:~tion \visIw to achic\.c its goal.
Corlsequently, niarketing strategies can be clcl'i~icd as a ~)rcdctcrr~~i~lcd
place to guide the deploy~nent of resorrrces i n an effort to ge~watc
growth. All articr~latcd marketing strategy performs nrllnerorrs functiorl
Sol- an orga~li~ations of \vliicli thc corn~llercial banks are no esccptions.
Marketing strategy is tlic ti~~~:lo~ncntal ~narketi~ig logic by wllicll
business i ~ i l i t iiite~ids to acliicve its ~iiarkcting olxjecti\.e. I t consists of' a
coordinated set or tiesign, targct ~iiarket, ~liarketi~ig ~ n i s aid ~nalkcling
espendit~~i-e leyel. N\vosri (3001) i n his on co~itribution had defined
marketing strategy as - < < as a g r a d cicsigii 01- p h i v f actio~i to identify current and prospcct ivc o r pokwlial c~~stonlers. proiilotc or corli~ilunicate with tllc~ii about our products and services and i~liplc~rlent pla~l~lcd activities that will Iielp to emure the they buy these products at ~nr~tr~atty acceptable distribritio~ clla~lnels".
cco~loniic co~lstrai~lts itrltl opportunities ol' the p~-esetit titile i i ~ l c l l i~ti~rc
time.'.
According to Ililary (1098) ;I s i~~iplc way of' urlrlcrsta~di~y tire
concept of' ~narketitlg strategy is to indicate that every fir111 ~iecds what
I I M ~ be refesred to a s ;i reference poilit for all aspects of its ~narketing
decisio~i arid programmes. 7'liese I-cferencc point serve as a gr~iditig force
that dictate the I.; iuds of tlecis~ow anti programmes taken ill t lic
controllable variables of it bank's ~ilaking effort. l'lic co~itrollablc
variables include: tile prod~tcts (scrwice ol'lixcd), (distrihtio~i or ~ I ; I c c ) .
Derek and David (1985 p.55) share similar view with tlilary in this
regard. 'I'llcy saw str;ltcgy ;IS tllc 1.11 ~ n ' s I.CSJ~OIISL' to, 01. : ~ n t icil);lt iorl 01:
changes i n its cstel-rial crlviroumcnt, its cilstu~ncr, ccmpctitors,
technology etc. from their stand point, strategy is the bank's plan to
achieve competitive advantage in the market place by ~naximizing its
ability to give customer value, and improved customer llantiillg product
packaging and distribution.
Ilbdaghe (1992) noted that, tlw hr~rlr~latio~l 01' ~na~-l\ctwg str'atcgy
squired the following three decisions.
a 1 . Where to Compete: 'l'his rulrlircs comnlcr c.i:~l \);1111..s 10 (Icli,:tc il'.
or more seg~nents).
2 . How to Compete: 'I'llis require a co~nmcrcia
means for competing (for exanlple, introducing a new product
(service) to meet customers needs or estnblisll a new image f i : ~ an
misting prodrict .
Corstjens (1900:2 15) argued that, in practice, a firm's marketing
strategy will usr~:llly corlsist of state~r~ent on two crit icd indicators
namely,
- The target market or prospects for the product and
- 'The diffcrcirt id advantages which makes i t t l ~ c most appropriate lo
satisfy the target group.
'I'lic target rliarlict corlstitutcs tlic scglllc~its 01' t l~c market to wlmm tlic
bank's pr-oclr~ct (scr-vicc) will bc oSfi:~-cd, wldc tlic diSfcrcritial iidvanlaps
cncapsi~lates llow tllc product (service) will be positioned with rel'i3sc11cc
to the competition in the market place. Positioning comniercial biunk's
product simply i~nplies a nianner of' itle~itificatio~i of the brand or thal
particular product or tlic bank itself i l l the co~ls r~~~icr ' s mind. According to
Corstjens, this is usually d o ~ c by associati~ig the product with ce~tain
cl~aracteristics, benefits, symlmls ctc i n tllc corr;~~r~icr's rnirltl
Shirley eta1 (2003), believed that tlic overall stratcgy of any Fjslii
comprises decisions on five key aspects.
1. Customer mix
2. Product mix
3. Geographic limits of thc 111arkct to bc scrvccl.
4. Co~npetit ive etnpliasis and
5. Objective (performance critesia).
.I7I~csc 01' cot~ssc dct'i~ic tllc I M ~ ~ I I C 0 1 % liic !>;111li-s 1 . ~ 1 i ) t i o r i \ h ~ p \o I 15
0
cliviro~l~iic~it. 'This rt:latio~isl~ip lias to OC S I I C I ~ t l ~ i l t I I I C C I C I I S ~ O I I I C I . S I I C C L ~
- 1 satisfaction at a profit.
2.2 THE BUSINESS O F COR1RlEItC~IA1, IMNKING
Begg, Fischer and anor ( I987:484) defined coni~nercial banks as
Financial Intermediaries with a gover~i~nent l ice~~sc to makc loall and
issue deposits, including deposits against \vliicli cliequcs can he \vn t k n .
According to them, a bank is a business atid i t $ O \ \ ~ I ~ C I s 01. 1llilll;IgCI.S ail11
to rnaxiniizc profits. Co~nrncrcial ba~iks make prol'its by Ic~idi~i!: and
bo~rowing. 'I o get money in, the Oank of't'ers favorable term to potciitinl
depositors. Begg et ill said, in 1986, British clearing banks ol'l'cr inicrest
on Current accounts only to important custotners, but they r~sually c:,ff'cl
free chequing f'acilities to people whose sight deposits or cun-ent account
011 t imc dcposits.
The nest, tlie batiks does is to find profitable ways to lerid what has
been borrowed. According to Begg et al, most is lent out as advance of'
overdrafts to Iiouse1ic~)lds and liniis, irsi~ally at interest rates well it1 excess
of tlie rate simultatieously bci~lg paid to tlie bank customers with time
deposits. Some firnds are used to pilrcllase government securities. Sonie
funds are more prudently invcstcd in liquid asscts. Altliougli tl~eses do not
pay such a high rate of intcrest, the bank knows it can get its money back
quickly if customers start witlldrawi~ig a lot of Iiioney fiom their current
Ikgg ct al believed that, the eco~ioinic services the Conl~nercial
banks provides is the transfot.~nation of liouseliold loans to the bank into
loans to a wide range of ~~eople-gover~~me~its wishing to fi~iatice a budget
deficit, firms borrowing to building a IICW hctory, and individuals
borrowing to start a uew busilless or buy rl ~lc\\: Iiotilc. 'l'llc. I~arili rise:; i t s
specialist expertise to acquirc a diversified portfolio of' i11i.cst nicnts
*
. - would have neitlicr the time !lor the erpe~tise to decide wllicll o!' tlmc
loans or investments to makc. 'l'lle ititcrmcdiary fimction provided by the
bank is the economic services it providc.
A Central Banks of N igeriaINigeria11 Deposit I~isurance
Corporation collaborative study (October 1995) acree ,I wit11 this line of
argument. The study see com~nercial banks as "retail i ~ l ~ t i t ~ ~ ~ i o ~ i ! j " tliat
accept deposits and make short-term credits a\~niI;lhlc. to g,o\.cr.tlri~cnt,
private business enterprises arid iridiviclrrals. 'I'lic stud!, ti~rllicr gavc
Iiigliliglit of some of tlicir fimctio~ls as irlclwlmg: i~cccl)t~~i!: deposits
through current and saviligs accot111t: g r a ~ ~ i n g 01' I O ; I I ~ S a11d ~ I ~ V ~ ~ I I C C ;
cquipnicrlt Icasi~ig; loall sy~~clicatio~\; li~la~lci~lg aclvisory scl-viccs; t ~ x l c
and export finance; other i~lvcst~nent atid for-cign reniitta~~ccs.
Afolabi (1994:56-57) in liis contribution added that, the firs(
paramount concern of any commel-cia1 banks is tlie need to ~nobilize
deposit which constitute the vast post of loanable funds fro111 wliicli the
lending business of the balks can be conducted. The deposits generation
ability lie said will depend alnollg other tllings on what
popularly adopted as the tlircc C's of banking: Confidence,
and Cost.
- CONI~IDENCli: re1i.1-s to tlic conficlc~icc people have i l l the hank
and tile believe that the moncy tlicy dcposit is sali.. 'l'llis is i l l fad
sylionjmous with the overall ranking of tlie bank i n the rliarket.
- CONVENIENCE: on the other land is the ease with wliicli
ities the waiting
,l~ilc t l~c
A glance at the strategies of' tlic erirlicr ~ncntioned banks are
basically the same in theory and could be viewed fimn the other angle of
what research has shown.
(Pride and crel l , 1 . I ) said tIii11 wsto~ncr- oriclltcd r~iarkctinp
sfrategies are being applied il l tllusl ~ I I S ~ I ~ C S S ~ r g a n i m t i o ~ ~ s includi~lg
Ixmks. Clia~inon D. I:( 1092 p.(i70), also ~.cviccvs son~c ol' tllc ~niirkcting
strategies used in financial service ~nal-kctirlg. l'llcy arc as fi)llocv;:-
Segment collsolidat ion slratcgics f 111s IILIS i 1 ~ ~ o ~ l
c:llitalizing o ~ i tlic cvisting strcngtlls, i c r ~ s i ~ g 111ilizalto1i.
existing assets, \vicIcning scl-vicc, prodt~ct:oi~ , acicti~ig
co~nplementary products or services and increasirlg thc stt'cng~ll:.,
and depth of segment provision;
Market Pelletrat ion strategics- involves Ilicreasi ng c o ~ npet it io11
withill misting markets and segments and expanding the a\7ailable
~narkct;
New Market Stl-alegy- which involves the creation of a l'resli
market Sor existing services;
New Product Strategy- wllicll i~lvolvcs the crcat ing of tlcw
prodr~cts and scrviccs to satisfjl tllc cvist ing scg~llc~it/ilii~~-ket:
Diversi licat iow which involves creat in? new pr-cxhicls arid w-\.ices
atld new ~narkets: (711~1 could be I~orizo~~tal, co~lcentl-ic 01' vertical.
Channon's prescribed strategies can be criticized for focusing tnorc
on the balik' profit ob-jective t h t than on custorner satisl'nctior~ . Yct i t has
some positive side if \\!ell applicd.
Although the abo+e strategies exist in the banks, ckllot is iluportall~ is hocv
to use them to customer and bank satisfactions.
USIIIW (1090 p..3 1 ) poi111s O U ~ t l ~ i ~ t ~ I I o ~ I ~ I I 1 1 1 ~ I \ I ; I I ~ I ~ ~ ! ~ I I I ~ ~ S I K I ~ C I J I C S
o varied from balk to ba~ik. they gc1~1.aI1y i ~ ~ \ w I \ c all or ; I cor~~bir~atio~i 0 1 '
11e following:
Geographical expa~isio~l tllroupll hm~ich networks:
Market J'enctratio~i;
New marketshew product devclopinc~~t;
Market leader strategies; and -I;? N: q f i p Market challenger strategies. d ~ m n ~m
il
From the ongoing reviews, a collation of strategies, I~ich I)nrlks 1:or11d
us inclrrde-
I . New Product Development
2. Relationship Banking/Internal Marketing
3. Tecl~nological Innovations
4. Customer Service
5. Defining Marketing For Banks
6. L>iffe~.e~~tiation/Segmcntatio~~
7. Staff Development
Each of these strategies have Ben recommended by studies on the
strengths of their capability to make ~narketing more practicable.
1. New P~wduct 1)eveloprnerrt
'I'he development of new products and services for banks is an
important ~narketiug strategies (C11annon.p 35). Commercial 'banks
must develop financial services in order to compete succesrd'ully
with other financial institutions. Once its custo~ncrs wants and
needs are identified, a bank s l~o~~lcl develop and Inanage i t s
products and services to fulfill these desires (Crosse and
I Ienlpcl,( 1 980 p.299).
custo~rier service wliicli clnpllasizts 11lc co~~i i~ luor~s rclatiot~ship
wliicli should exist between a service yrovidcr ( i n tliis case. a. hailk
( and its customers wit11 empllasis on quality scrvicc dclivery.
The grtideline to be followed by a sen.ice firm that \\ants to adopt
the strategy by relationship, as or;tlil~cd by Morde~l ( 199 1 p.7 13)
are-:
(i) developing effective pcrsoilal relrlt io~~sliiys with custoniers;
adopting a professional approach, co~ii~nr~nicatiiig personal
and corporate competence and a tl~orough technical Icnowledge
of the service being sold or rendered;
enhancing personal and corporate rcputatiori within tllc widc
context of custoirler reference and peer grorlps, and especially
amo~igst opinion leaders influential witlli~i those groups; and
make the transaction easy by reducing the level of risk and
lrticertainty associated with the patronage decision.
A more practical approach to the third point is that guidelines
slioufd be for a bank to attempt to colninunicate and publish evidence of
existing satisfied custoiners, special problems solved for customers, and
its reputation' within relevant professional organization or governmental
bodies. A lot of Nigerian banks have, indced, attempted the use of this
strategy. For instance, there are no banks posing to he specialists ill
specific banking areas i n the economy.
Relationship banking, no matter from which persycctive it is
looked at advocates for a close contact between bank staff and banli
crtstomcr scrvicc which c~ilpllasizcs tl~c contmuor~s rcl;~li~~i~sllip
wliich sliould exist bct\vee~i a service provider (ill this caw, n t m k
( and its customers with emphasis on quality service delivery.
The guideliiie to be followed by a ser\.icc firm tliat wants to adopt
the strategy by relatioilship, as orltlillcd by Molden ( 199 1 p.7 1.7)
are-:
( i ) developing effccti\;e personal rclatiorisliips \vit l l custolriers;
(i i)
(iii)
adopting a professio~ial approach, conin~l~~lic;itily .. 11cr:;oml .
a~id corporate competencc and a tliororlglj techiiical kriowlccigc
of the service being sold or rcl~rlcrctl;
enhancing personal and corporate reputation within the wide
context of customer reference and peer groups, and especially
amongst opinion leaders influential wit liin those groups; and
make the transaction easy by redilcing the Icvcl of risk a t~d
irrwxtainty associat.ed with the patrollage decisiori.
A more practical approach to the third point is tliat guiclelilics
should be for a bank to attempt to comrrrunicate and publish evidence of
existing satisfied custo~ners, special problems solved for customers, and
its reputatio'n within relevant professional organiza.tion or governmental
bodies. A lot of Nigerian banks have, indeed, attempted the use of this
strategy. For instance, there are no banks posing to be specialists i n
specific banking areas in the econouly .
Relationship banking, no matter from which perspective i t is
looked at advocates f'or a close contact between bank staff a d b a d
customers. 'I'liis rmkes i t very necessary tool in today's highly
personalized systeni oi' banking.
Martins (1991 p.30) equally supports the idea of adopting i t ill
banks. Although lie did not use explicitly tlic term 'relationship ba~llti~ig'
11 noted that since corn~riercial banking has every retail business feature,
the idea of convenience niust be upheld. "l'lle closeness of the bank to its
customers, the vital for the success of this marketing strategy.
2. Technological Innovations
Another marketing strategy in use by the banks is technollogical
innovations.
They include the of evolving new \vays mid I I I C ~ I I S of doi~ig
banking job. Teclinological innovations sucli as the application of
computer in offering on-line real time bank services a~ld tlir: use of
smart cards, value car.ds as I ~ I O ~ C of' pay~iient arc some .of tlic
outcome of cl~anges in the global fi~imicial s y s t o l \ ~
While talking about tlic impot-tance baliks attached to tecluwlogy,
Oboli (2003 p. 14), said about his bank- U13N PIC ". . . . the bzrnk Iias
developed a number of technology-driven products/service lor the
convenience of our numerous customers . These i~lclude:- PP Corporate lieasures ' Window, Eiectronic Data Ir~tercrcltnr/ge . . .. .
Tliis is to show the importance banks attaclied to tccl~nology
Even if ihey to do so just to met col~ipctitiocl and i ~ ~ ~ p l a v e the
quality and efficie~icy of services of i red to custonie~-s.
Highlighting the need for banks to take up this
(2001p. 19), states that banks effort to satisfy
demands of toady's bank customers have
chal leilge, Crlawale
the ever changing
really led to the
adaptation 01' i i r i t c ~ ~ i ~ i allti irllbrii~airo~~ !cch~wlogy.
Nwankwo (199 1 p.220) argucd tliat banks liave c~iibrncccl cvolving
technological ili~lovatio~is ill a bid io sort tlic provisiw of liigli
qualify services to custonlers at tllc lowcst possiblc cost. He
highlights some relatively low cost new tcchniqrles of providing
banking services such as the ATMs, EI"I'Os, CI1AI's, AN11 Cl~lII's.
As a result these teclinological dc\clop~iic~lis, Niplcria~i I~mks.
today are involved in electronic banki~ig (tliroi~gli the use of the or)
line real time, value cartis, sinart cards, t~nificcl barikirig s.:ystc~~~.
and some other electronically based money transfer tec1inique:s.
3. Customer Service
Banks can cqually improve their adaptations of the marketing
strategy t l~ro~~gl i the provision of' ciistolner service. A lot of banks
today already have designated ofice for this. Bovee and Tl~ill
(1992), described customer service to encompass anytliing a
company does to satisfy its customel-s and to help them realize the
greatest possible value fi.orn tlte goods and services they are
purcliasing. According to Lauk and Wcinbcrg ( 1993 :583), the term
refers to a collective term used to describe all tlic si~pplementary
services provided by and organization to satisfy customexs and
combat competition. From this, it can be seen that customer service
is just a general term for all tlie extra services provided by a bank,
for illstance. so as to inai~~tnin cr~sioniers patrollage :and loyalty. Of
course, such patronage can be ~nairitained if ' tlic c.ustori~s Ikcl
satisfied with the service offered to tlicm.
In advanccd countries, cr~storner wrvice is recopized as the
fu lcrm of banking biwtt~css (l111;1po, 1084 11 0 I t fbllo\\ s-
tlierefore, that the acceptance -and adoption ol' ; i n \ siraregy ol-
i l l tlicir t ~ i c l to win IWI-c w s t o ~ r w s a~icl rcmain disti~lctive ~ I I W I I ~ :
competitors, have come to terms ~ ~ i t l l the strategy ol' cuslo~~lcr
service.
Morden (pg.7 1 5) specifically points out that the realization of the
fir11 benefits accnring from the marketing
organization should endeavor to i~lclr~tle, ; is
mix people and customer service.
Customer service does not take placc at
point-may be tikc Illany baliks do, creating
concept, or service
1 x 1 of its marketing
tracking down people's co~nplaints a~ld issuillg slips a ~ ~ d stai.elne~~t
of accounts. Tlie strategy is fBr beyond that. Being part ol' a, ssel-vicc
firm's marketing mix (in addition to product, price, promotion, a d
people). Custorner service nii~st be established with tlie streamlirie
of policies and progralnmes and must be felt in all tlie operations of
tlie bank. 'To this effect, banks (or any ocher service firm) will
need to include assessment of degree of staff-customer-orientation
and perceived level of customer service anlongst its operational
measure of perfor~ilance effectiveiless and efficiency. Also i t will
need to ensure that all lcvels of staft- are illvolved in customer
service.
~ o t only is costomer service aimed at providing qualitative
services, we also pointed out that such provisions is usually made
tlirough the instrumentality of some extra services. This is why
Evans and Berman (pg.623) recog~lize what they called peripheral
services in bank ~narketing. 'I'l~ey stated. that ac illll a~lcillil~.\.'
measure, a bank desiring to satisfy its cirstomers nced to install
some peripheral services; anti defirle the maill fhciis of such
scrviccs as being thc crcation of a co~npetitivc edge. Exa~nples o f
such services as thcy app!y to lmlks arc parking fhcilities for.
crlsto~ners, cash centcrs, cad\-collcctio~i n~-ra~igw\c~~ts , statcrlit:~~t 01'
account home delivery, and adequate security arrangc~wnts.
This step is necessary because 01' tllc I i ~ t that nlarketing, a!; has
been earlier identified, is a relatively 11cw plienomenon ill banking
which came as the new generation banks joined the banking world.
Again, customers are found to lack insights into banking activities
and their attendant product/service quality. In a simplcr tenii, it can
be posited that the definition is necessary bccarrse 111c banks rlr:ed
to understand the customers and custor~lwi also llccrl to rlrltlerstmd
the bank, for a condwive banking relationship to exist.
Defining ~narketing fhr banks is not all say task 1-at1icr. C I I R I ~ ~ I I O I ~
(1992 p.14) in his analysis, empliasized that defining thc marke~s a
bank is engaged in is actually a very difficult task and requires a
substaut ial degree of creative effort. 'This notwitllstandiilg, some
authors have tried to define marketing as it pertains to banks.
Crosse and Hempel (1 980) defined marketing in relation to banks
"as both the creation and delivery of consumer satisfyi~lg products
at a profit to the bank". The three key elernents of this definition
are creation of products, consumers satisfaction, and profit
objective. 'These are not different from the characteristics of
11ia1-keting in physical product ~narketing. Much morc slxcifically,
Lord Seebohrn (1971) identifies the following as the element of
nlarketing defit~ition for banks:
i . identifying prcscnt and ruture ~narkcting for services;
i i . selecting which ma1 ket:; to scl-vc ant1 idc~itifjring cr1stolue1.s
needs within them;
i i i . selecting long and short term goals for the progress of cxisling
and new serviccs and
iv. tnanaging the scrviccs so ;IS lo pcrsrlitdc cr~stoliic~s lo usc fbcrll
at a profit, arid contl-olling of'swccss in so doing.
The indication her is that banks str-atcgizing its marketing
operations must see marketing not as it applies to every sector, but s it
applies to banking. Such banks must imbibe tile ingredients of bank
marketing definition into their policies and programmes.
5. Segmentation and Differentiation
Market segmentation is dcfilled by Martin (pg.192) as the analysis
of a particular total market demand into its constituent parts, t i o that
sets of buyers can be differentiated. This means that the essence 01'
segmentation is to enable a firm to differentiate its ~narkets. I f '
Ogr~ntade's description of [he competitive environment, as one
which homogellous products and services are sold by the various
banks to customers hold, then, the need for segmerltatiol~ is very
glaring.
Channon is referring to the need for segmentation wllen lie
emphasizes that in practice, vil-ttrally no bank endeavotrrs to service
all the needs of all potential customers. Instead, the bank is said to
operate in a series of 'served7 ~narkets. each of which is a subset of'
the total market. 'file concept of' 'served7 market breaks down the
total mar-kct to that scgnicnt or those segments ot' wllicli the bank
will purposefully trv and sell products or serviccs.
On the benefits of scgt~icritntion, Martin cxpt-csscs that ~ ~ C I I I - n t c
scgmcntation and targeting of'p~.ospccts mtl custo~ricrs is central to
devcloping and improving custo~ner-hn relationships engender
profitable t~msaclional rclat ionship. 1 t is also lxlic\ul to 11c: a \ r c ~ >.
b . important tool uscd to prlrwc c.f'lic;ic~it sen rccs 1 0 I \ , l r ~ l , cr~sti,sr~~ci.s r
According to Nwankwo, the bcnefits of' segtilc!llalio11 to b d s r
include enabling the banks to sclcct tllc potentially no st prolitable
segments, and to c o ~ l c ~ ~ ~ f r a t ~ ICSOIII-ccs 011 the s c g ~ ~ e n t s C I I O S C ~ ,
thus making activity bctter fimscd and lcss wastefill. I t is also a
good strategy of solving the problems associated with the
homogeneity of financial services. Rcsearclm Iiavc Ii)ll~id O I . I ~ tliat
in such circu~nstances where cotnpctil1g products arc alike, tlic
strategy tend to enlcrge as lhe real oppol-t uni t y li,~ tl ist i11g1-I islling
one band from its coliipet i t ion.
I h v can a ba~lk scgnent i t mar-kets? Seg111cntation m n be
geographic, detnog-apliic, psyclio graphic, bel~aviouri~~i (>I
institutional (Nwankwo, 199 1 :23 1 ). It is geographic wlierl bascd
011 location; demographic wlleli based on age, sex, income,
occupation, religion, education etc; psycho graphic when based on
lifestyle or- personality bellaviouristic when base on knowledge,
attitude or bellavior~r;; and institutional when based on size and
individual types.
2.4 THE EFFECT OF '1'1 i E STRA'I'ECJIES ON COMPETITION
Competition as an cnviron~nental filctor is r~su;llly f i ~ ~ g l i ? with
~ilarketing effort and strategies. Banks do ~ o t joke with tllc issm of'
competition as they know that to do so will be at their own risk. Tlic chief
executive ofliccr of' tllc b'I3N plc , Jacobs Ajiekigbe (2004. 18) while
com~nenting OH his ba~llis ;~cllievc~i~ent Sot- ycar 2004 in the Ske ol'
competition had this to say-
This explai~is why the co~riniercial banks are hustling to embrace
the modern marketing strategy, which has emphasis on customers'
satisfaction. In a bid to satisfy thc crtsloniers. these ba111is use ,111
strategies the make it possible for tlierii to at rurl on anotl~cr and woo
customers thus creating bank options for custoniers. 'The widely used
r
The effect of these strategics (.MI cor~~pctitiorl c:in bc disc~~ssed r.111dcr two-
(a) THE STRATEGIES WORKING IN FAVOtJR
(SATISFACTION) THE OF CUS'I'OMERS
The banks are becoming increasingly aware that custolllc~ s' pat ~.o~l;~gc is
dependent 011 tlioir posit ion . Every custolncr dcniand courtcoris trcatr nent
and attention by his or her choice bank. Customers are attracted by clean,
well laid out banking ha11 and conveniences. So as part of strategies to
attract customers and make them comfortable througli out their
transactions, banks have spent a lot of' money 011 ~iiaintai~iing a clean
environment cond~rcivc for business. Mmy bcautili~l picccs 01'
architecture mi11 the country today, tliey say belong to banks. "ft.-low
~nag~lificc~lt a h k ' s p~ul~iscs , puts a nlcasurc of co~lficic~icc on tlic
cr~stomer. The cr~sto~ners are also relaxed in the bank where their inkrest
are well protected most com~nercial banks are very much aware of i t . The
customer service strategy and the reiationsllip p strategy used banks
ensure that custorners7 interest arc well protected. Any dissatisfied
customer has the right to complain the custo~ners service department or to
his I-elationsliip officer, and such complaiilts are usually rectified. 'X'hese
are to the interest of the cr~stomers. Eve11 tllc Central I h k of' this
cormtry, the CBN, advised OH the above. Alao (2004) while talking about
the CBN stand on customers' intcrest stated:
l'lic acivc~~isir~g ructllods use by rnosl ol' ihc \);III\<S tl~;~l,e i\ casicr b
lbr &stoiners to identify their banks. . s 'Today many ba~lks call be ident i l'icd by t h r rmiclue structure, Iiaving
given their offices a uniqr~e identity. 'I'llis the\- say exte~ld inside where
the banking hall is kept clean and well-ventilated custon~ers are provided
with conveniences, packing space and toilets. 'This fact i~idicate that
co~i~mercial banks have used their buildings arid thc premises as
advertisement to attract patronage. Afolabi mt! Osila ( 1007 1). 56-57) also
agree with this view as tliey said "many of ow- bml\s IIX! t ; lko~i r;~tlio,
television, newspaper as well as Bill I3oa1-d advertising. In 111ost of 111~'
nations' principal cities, some banks added a ~icw rather espenslvc
dimension of advertise~rle~lt in the erection or acquisition of
arcl~itecturall y captivating bra~lcll oll'iccs a!ld attractive prcnliscs. sortlc
times provided with packing spaces. This strategy however, also
promotes tlie banks.
E.U. Il~emedu ( 1 39.1 3) also in agreeing with these fact explained
how advertising as a prolnotional strategy work to enhance bank sales. fie
said "it is a known Tact tliat effectivc advertising over a period of time
creates receptivity to the bank's services'?. This strateby he said was
rccogrlized long ago by tile "big three", first Dank, United Bank fbr
African and Bank. 'Today they are housellold names, no matter the quality
of the service. Most of the new generation banks have also adopted the
policy of corporate visibility, before long they equally bcco~ne well
know, e.g. of such banks he said include; bank etc. Commercial Bank,
Guarantee Trust Bank, Chartered Rank, Diamond Bank, Zenith Bank etc.
They also added thal apart from cl'fectivc arid irllaginative aclvwtisinp
campaigns, direct custo~ner solicitation can cseatc a dif'fcse~lt between one
bank and another. He said that calls on current or prospective custowrrers
have k e n vcry cl'li'cl ivc i n CII\IC;II ing 1 1 1 ~ li11 get grm~p ;h>1it spcci fic b product/scrvices. l ic fi~rtller srlicl, tliat to mcct t l ~ c con1pc.1 i t I \ c prcss~ imrcs
r and growing sophistication il l the corpoiate market tlcrlla~lds. tllc IIW)
generation banks adopt this stratcgjr arid I w c s~~ccccdcd i n garning
competitive edge over the old generation banks. The concept of
Relationship officers is been used to improve their marketing efforts. 'I'he
relationship officers are seen as the principal interface betwee11 the bank
and its customer. He or she possesses suf'ficient p r ~ d ~ ~ c t k twwledge to
provide a competitive level of service to the nccormts Ilandled a ~ ~ d
knowledge and be able to diagnose cl~sto~licrs, ~ c c d st~f'licicl~~ly. 'I'his
strategy E.U 1llemad11 said has been srtccessfr~l in all the bnilhs that adupt
tlie strategy in tliat thc officer is made to.
( I Find his own custotiicr
I 1 Understand tllc cr~stolncrs' liccds ;tiid problctns and bc 131. )1~ to
providc help and guidance
I I Be wl~olly dedicated to thc relatively small rir~rntw of'corporatc
accoi~nt S,
I I I3e constantly seeking to providc licw opporttrliilics to j)rc:~~ile
additional service.
Tecl~nological innovation wliicli tlic banks embrace also inakes today's
banking the customers delight. Customers can now transact Iheir
business in any of the branches of the banks irrespective of the br-mch
network ,as well 11e process of decision making have become faster.
The banks Iiowcver, I~cliclit imriienscly of technoiogical innovation
wliicli brought about rapid advances in informat ion and cornmunicatio~~
technology has made it possible for most of them to become major
agents for international moriey transfer cornl>anies. In fact, it is on record
that some of these commercial banks have been able to become direct
agents for money transfers with the overseas banks because they arc not
doing badly at all. Alao Salinion (2004) said particularly almut % h i t 1 1
Bank PLC:
130th First I3ank of Nigcria and IJnited 1h r i k for Africati I~iivc bcco~iic
Gram. Union Bank, ' *
Diamond, Zetiitli, (Iceauic, C;uarmty 'I'rust Ik~iik and All Stiltcs Tri~sl
Bank have equally entered into the Money trausler market as they are
. C agents for vigor I-cmittar~cc irlcorpor;ltcd iri New Y odi arl ci ~Jnitctl
(b) BANKS IN'I'EREST-1 t is througli that most o f the st rntcgien of tlic
banks work in the iiltercst of' cr~sto~ircss satist'action. yet there are
soinc that are cxclusivcly to the banks advantage. !kme of tlic
banks strategies like market penetration; market leadcs/sl~src and
diversification are coinpletely in the banks interest.
The major reason a bank diversifies is to be able to capture enough
market i.e penetration. Diversification involves creating avenues to
cope increasing corripetition witlii~l existing markets and segments
and thereby expanding the avililablc ~narket. Too ~nucli pellet rat ion
will bring about too much familiarity with the customers which
will bring about blind loyalty on the part of the customers.
2.5.1 I'l<OR10'1'1(lN: Is the means of making people aware s f the
existence of a product and stimulating demand for them. It is the
combioat/on of advertising , personal selling, sales pro~notion, pc~hlicit~~
and other promotools wliicll may inclrde non-personal oncs like Sact to
face, person itsecl to acliicvi~~g ell'ect ivcncss of ihc ria^ ket iilg
programmes. In the new product strategy advertishg is extensively used.
A srrccessfrll advisement can make a new product a succcss d~nos t
overnight. Now prodirct strategy ~llnlics c\tci\si\.e use of'pr-ot!~oiional nil\:
in order to get such new accepted bv tlic custo~ncrs.
2.5.3.DISTH~13~1'1'10N- In rrsirig the expansion or segmentation
strategy, the banks are now located even in rural areas so that it is
accessible by wliosoever deems it fit. Competition has made IWIIK
banks break new groi~nds withi11 the countries geognpllical areas
arid beyond. Businessmen no longer carry cash around as the
banks not only located at all nooks and cra~itiies but also prnvidc
one custolner one batik servjces. Ualiking in Nigoria Itad gone
2.5.2 PROl)1IC'l'S- I'roduct develop~ncnt which is one of the
marketing strategies and the banks disposal makes it possible: for
the banks to determine w l ~ l a prodr~ct is old and no longcr a
appreciated by custo~iiers. Such old products arc rwally rcplaced
by new ones or modifies by these banks in a cr~sto~ncr fiiendly way
to attract patronage. I t is no doubt that prodrrcts development I-lave
served as a veritablt tool Sol. ~rtcct ing the e \ w clla~lgitl;r tieer'ls 01 '
bank customers, the world ovtx. Must of' tlicscs i)~ocIr~r:ts liLc
telephone banking valr~c card s y s t c ~ ~ ~ I w e given banks a rice fjce
in addition o the traditio~~ currc~it and savittgs a~cvunt products.
The customers are better ofl' for i t . Most new products are
teclinologically driven for the convenience of the custo~ners. Such
products include the UBN- "Corporate 'Treasures" Witidow/ IJBA
AV designed to enable corporate cl ic~~ts \ ic\\. tllc~r account at the
comfort of the offices. Said G.A.'I' Oboh (2003) tlw cl~ici' cucr: 111 i\.c
officer of UI3N PIC \vliile talking abo11t tlicir p.odr~ct ~ I ~ ~ c I o p ~ n c ~ i t
as a strategy to \+;eather cowpet i t ion. C L . . . . . . Apart from tllcsc, the banks has developed a ~~r~tllbcr. of'
technologically driven product for the convenience of --tlie
ci~stoiners".
travelers' clicqrles atid tradc credit. 'Tlie internationalizatic.>n of'
banks are to tlic idvatitagcs of the custoiners a d are viewed
seriously by most of tlie cotnmercial banks. 'Tlic FBN PIX'S,
Chairman, Mutallab IJ. A (2004 p. 15) wliile commenting
progressive i~~ternatio~ialization, to take full adwitagt: pf'
hrgeoning trade flow arising from tlie econo~ny*~ grc)wi~ig
have increase slightly to the dis;~dvaritagc of tlic crrstorners and 1.0 the
favour of the banks yet the researcl~ sliowed that crtstolners do riot
mind prompt service delivery even at an extra cost. Oral interview
carried out in tlie cause of the research sliowed tliat it is in tlie area of
Cost on Turnover (C 0 1') that some banks went rip li-or~ 3 pcr lir i l l to
5 per mill. (Per mill is a banks terminology rlscti to (Ics~t~iIw tlic cost OS
withdrawal per c==N== 1,000.00 to cust ori~ers in banks.
111 tlie general, iritcrcst rates has bce~i llrictriatirig eitlicr as a rc:sr~l{
of CBN regulation. Said Mutallab U.A (2003) ''I3anks intcrest ratc
deposit with various tenors fall fiom 8.8- 14.4% bracket in .lanuary.
2003 to 6.05-12.0 1%. Average deposit rate from 3.6 - 3.1 over the
same period".
2.6 BANK CUSIOMENS A N D TIiElR NEEDS
Andrew & Edwin (997 11.29) says tliat "the custonicrs'~ is tlic lriost
important and inotivati~y ibrcc for the orgmization, and ally company
tl19t f n r r m + m b L l - ' .. .-
international banks assist tlieil c;rrstonlcrs in purring credit card,
travelers' cheques and trade credit. The inter~iationalization of
banks arc to tllc arlvaritagcs of tlic custorrws and arc viewed
seriously by most of' the comlnercial banks. 'The 1TiN PI,C,"s.
l i r i i Mutallab IJ. A (2004 p.15) while conilnenli~ig
intcrliationalizatiolis "We sliall renlain focused on our strategy of
pr-ogessive internationalization, to take full advantage pf
burgeoning trade flow arising from tlie econo~rly's growing
integration with global econolny".
2.5.4:PRCINGI INTEREST RAT& Pricing of tlic ~ , rohc t s rimy
have illcrease s l ~ g l ~ l l ~ . lo l l ~ c t l ~ s ; ~ t l \ ; ~ ~ ~ l a ~ ~ c ol'llw cr~stolncss ;ind lo l l ~ c b favour of the barilts yet tlie rescar-cll sllowcrt that C I I S ~ O I I I C I c; do 1101
r
* mind prompt service delivery evcli at ';11i cutr'n cost. (ha1 i111crv1mv
carried out in the cause of' tliu suscarcli ~ I i o \ \ ~ d that i t is 111 tlie ;lrCil of
Cost on Turnover (C 0 T) that some bmks .cc.cnt up frolri 3 per mill to
5 per mill. (Per mill is a balks terlninology used to describe the cost of
withdrawal per =N= 1,000.00 to custoniers in ball ks.
111 the general, interest rates has been fli~ctiraiing eitlles way as a rcsult
of CBN regulation. Said Mutallab IJ.A (2003) " lhiks I nlcscst lratc
deposit with various tetlors fall fi-om 8.8- I 4.4" v 0 1 ; d d 111 .laliu;tt)*.
2003 to (>.OS-I2.0l%. Average deposit ratc from 3.0 3.1 ovcr the
same period".
2.6 BANK CUSTOMERS AND THEIR NEEDS
Andrew & Edwin (997 p.29) says that "the customers" is the most
important and ~noti\/;~tilig fosce for tlie orga~iizatio~i, atid any colnpany
tllat forgets thic I n = - . G k - I L ' - - -
become larger, and more diverse, its becomes more important to take
steps to stay closcr to what t l~c ci~stonier wants and what Ile thinks of' you
and what you are offering. 111 fact, custonicrs arc assets to the bank and
their satishctior~ i-em;lins tlie cornerstone of'successli~l banking.
To i~ndcrscore this point, Edwin further quoted Maliatliia Glia~:~dsi'
or retailers serve two broad group of ciisto~~ie~-s, tlic individual customers
as well as corporate customers. And the 11eeds of these Iwo categories of
customers differ significantly. According to )lie book, individual
customers are interested in banks facilities tliat will enable tlietn cash
tlieir money as quickly as possible and have I-cad\: acccss to somc fbrm of
credit, while the demands of corporate custotners cstcrlc! I))! bi.!.otld that
point.
Corporate custo~iiers need cash nianagenietit advice. cash flow
forecast and global import and export service tliat will rcplacc today liri~c
consuming document encumbered system. The book says that both
groups of customers also deserve faster and safer ~ n e a ~ i s of tratisferriag
fimds. I i s il l other ward implies tliat customers will patronize
co~nmercial banks tliat will aieet or satisfy tlieir need. Tlius, the operating
pliilosopliy of corn~nercial batiks sliould be to seek for tlie satisfaction of
tlie ever-increasing population of sopl~isticated clientele.
This the ba11k can do by segmenting its markets based on their
needs and satisfying t llc ~lccds in each ~narket tllrougll developin~; anrl
designing appropriate product (services), usi~lg the right advert king and
other promotional tools and the most effective delivery system that
maximize the bank's profitability objectives.
According to Robert .I. I>ola11 ( 199 1 :476) the first requirement Tor
effwtive marketing is that the key managers recognize the yri~nacy of
stuclyi~lg the market, disthguishing the nlany opportunities, selecting the
best part of the market to serve, and gearing up to offer superior valw to
the chosen customers in terms of their 11ccds mid ants. 'l'i~is ~ - c ~ ~ ~ ~ I - ~ I : I c I I I
seems elementary, yet mauy Nigeria11 bank csecritivcs never- grasp it.
3 7. A BANK'S STRATE'I'Gl' -.
. * defined and well utlderstood i~lternally, i t will ~~t-oikte n ~llasiiiil:: oriented
on all organized basis have come to be recog~lized m o n g leading
success. Strategic planning he said is co~~ccr~lcd with lil~ldamc~r~al
ester~lal forces a~ld mjos intesilnl dcvc lop~l~ t~ t s that cl'l'cct t l ~ i l 1o11g -
term si~cccss of the busi~less as a11 iiltcgrated nllolc. C'o~ll~ilcscial ba11l;'s
strategy call bc'~nost successfi~lly orie~lted to the customers and the
masket by concentrating on four strategic ele~nents.
1 . Product performatlce
2. Service
3. F3ra1ld Acceptailce: a~id
4. Price.
2.7.1. Product Performance
Commercial Banks should d e r s t a n d that tlic customer patronize illeir
scrvices (products) basically because it will do so~iict l~ing \vcwt l I n 111 lc fi)s
him and offer better satisfaction than conipetitions off'cr. C'w$o~iiers
scrvice, brand acceptance and price asidc, the reasons \\.l.ry u s m
(custo~i~crs) mi&! prcf'cr a bard, ~)rorlrlct ( c c ~ ~ ~ c ' c ) ale Icgicvl A I I ~ s o ~ ~ ~ l t I a
bank's strategy fociises first, co~lstantly, scsol~~tcl! , iltld rnl;)gt ll.lii\ c I ~ oil
super product preference for the riser (custonlcr). I h t is t llc I\t ' i~ \\ a;y to
build the values the entitle the bank to largc p1-01'its. Accordi~ig to I3owcr,
the margin of superiority needs not be grcat, I n ! in a competing
environment it must be authentic. The role of niarkcting manager will be
\vcll assured if this fundamental marketing concept is kept in the forefront
or very manager's mind.
2.7.2 . Service
The custoinci-s or user m y patronize a balk PI-odrict (service) becarlse tllc
bank offer better service than coinpctitors. A batik product t lmt ol'lcrz; I I O
edge in performance may sell well because of service. The service
advantage may take ' many forms. The product (service) may simple be . - Inore converiient to purchase. Ihe delivery may be prompter or more
liable. Bower ~ioted tliilt, siipcrior service could add strength to corporate
strategy.
2.7.3 Brand Acctbptance
Tlie user or collsrlmcr may plc1i:r your PI-oduct (service) to tl~osc o f
competitors because he has rnore contidence on your bank or brand,
based on experience direct or indirect with product performance or
service. For example, a pewm may wish to cotlsulne a partici~lar product
of the bank because a friend who patronizes the product or bank says it is
better or it satisfy better. Bower said, confidence in a brand or the
company may come from advertising, provided product performarm
lives up the advertising claims. f lc, llowc\w, said most c~rstorners twy
nationally advertised brand because they have coi~lc to r-ecogt~izecl that
quality and other performance claims of ~lational adccrlisers can
According to Bower, t~nlcss conlpanics give llic uscs ;rrrfllc~ltit;: a id
recognizable product yerfortnancc, SCI-\ice or- l~rand - acceptance reasons
for buyi~ig the product, it rnirst rcsorl to lowcr price in ordcr to offer
competitive value that will command share - of -market at a profit.
This however is not cotiilnorl i n cotnrrm-cia1 brl~lhitlg. Tliis is because the
interest rate ceiling is fixed by the Monetary Autltcwity (C'c~ilrd lhnk of
Nigeria). Although banks can still pay withill 111c limit sjwif'~ed b!.
Ce~ltral I3arlk of Nigeria. l h \ cr cqi~ally stated Illat lower- I N iccs namw -
gross profit rnargiri and lowcr 1-dur11 on investment alld t lwc arc
competitive penalties that any bank nlust pay if it fails to deve!op 3
strategy that gives the user a rnore colrlpetitive package of non-pricc
values. This four point -way of thinking about the role of marketing in
managing can, if bc com~ni~nicated to manager at all levels, will provide
tl~cln with a d p n i i i lianwvork aild set of gi~ideline for decisiol~s arid
actions that will keep the birsilless geared to its cirstomer and markels.
a 2.8.1 Production Concept r
, 'fllis concept Ilolds that c l ic~~ts will f ;~\~our li~ia~icial scn.iccs that i l ~
widcly available and low ill cost. Co~i~~ricrcial h 1 1 k with this ~ ) I ~ i I ~ s ~ p l i y
adopt strategies that aim at achieving high operation efficimcy arid
clistribution network, assuming that cr~stomers are yriniary interested in
service availability and low rate. Although, the production concept is
very effective in lianding a large number of tra~wctio~is pcr Ilorrr-. 1 Irl~~cter-
said, i t is opcu to two worrying conseilllclwx: I ~ ~ ~ l ~ ~ : ~ ~ s c ~ n n ~ i I ~ ~ :mil
customer insensitivity which can alli'ct tlic b;ml\-s pu1'ital)ility.
2.8.2 Product Concept
This concept holds that clients will favour high quality financial sesviccs.
Here "focus is on the good products that are improved upon over time"
Nnabuko (1 998 p.2 1 ).
Thesefbre, com~nescial banks. wllicli fhvour this philosophy, adopt
strategies that aim to high quality offerings and try to improve them over
time. Even so, Hunder said, since markets and buyer habits are consta~itl!;
changing, offerings that satisfy today's needs \voold be largely are
irrelevant min the future. As such, commercial banks that liold this
philosophy have most often tlian not, resulted in a misu~iclersta~lding of
c~lsto~ner's wants.
2.8.3 Selling Concept
l'liis concept mi\i~lt;\ius t l ~ t cr~storncrs, if lclt ~ I O I I C ' , WOUICI or~linarily no1
patronize bank's services. As sucli, banks rrli~st u~idertake aggressive
selling and promotin;; effort. Clial-actcristically, co~nmercial banks with
this approach concenlrate on strategies tliat aim at selling what they can
offer rather than what they call sell - i.e. wllal custo~ncr actually wa!~tc:d
Thus customers satisfaction ca11 not be acllievcd. this also at'tect the ban
k's profi~ability objective. Because selling concept does not cncoutage
repciit bwi~icss, (Aclluri~l~ii 9000 p 73) I;w I l i m " ~ l l i l t . I i ~ t i ~ i ~ I M S C ~ or1 I I ~ - ( 1
n selling carries Iligli risk".
2.8.4 Marketing Conccpt
According to Hunder, this co~lccpt awse to clia
corlcepts. I t is described in sucli colorti~l tcr~ns i j s
Ilenge the previous
"li~id wants and fill
you can make" and t l~e~n" "make wliat will sell, not trying to scll wliat
love the customers, not the product".
Tlie new lnarketing concept emphases tlie idcnti l k a t ion an! l \ i ~ tisl'ac;l ion
of' thc needs of the custolilc~s . . ." (Nwosu 200 1 p.0). It I \ tlic CII ot.
caveat vc~ldor (seller bct.11)" t lie ciisto~mer is the king. Co~n~iicr-cia1 banks
must tl~erefor-e ellibrace this co~iccpt to survive. This co~icep! holds 11iat
tlie key to achieving the bank's goals lies in determining tile ~~eccls
effectively and efficiently than competitors. In essence, the markc~ing
concept is aimed at ge~lerating customer satisfaction as key to satisfj?ing
business goals. Tlwefore, co~nmercial banks that hold the marketing
colicept adopt strategies illat ail11 at satisfying their clients. This is based
on the fact that a satistied client, to be sure, would 1101 only buy again but
will talk favorably to others about his bankers, he would also pay less
attention to competitors and patronize new products tliat' the ban k later
add to its range, impacting cross - scllins positivcl~.
2.8.5 Effcclivc Itclalionshil)
For co~nmercial bank to go beyolid tlieir advertised interest in satisfying
h c custonlcr illto building cl'fkctivc rclatior~ships, ~nrlst know ard
~~nclcrstanrt tlic custc.)r~~ur so well that thc scrvicc they of'fcr fits him and
sells itself'. This is tlic nlarketing concept approach. Under this
orientation, relationship banking goes beyond mere satisfying the
customer. I t means delighting him. This deepcr qaest is tlie secret of most
swxss f i~ l coill~iicrcial banks hdny. As tllcsc h k s go I)c)'o~ld ~nectitiv
the mere expectation of clients. According to I luntlcr, i n p;wticda.r- and
under the aegis of the niarket ing conccpt, cotnmcrcial hmks ~ n m t
inttxnnlizc fiJ111. I ~ a s i c I I - I I O I ~ C ' I - to h ~ i l d SI.IC(:.C:SS~III a relationship wliilc tearing dow11 ~ ~ I I - I * ~ C I . S to SC'I .V~CC (li.:li\. ( :I . \
r
O Firstly, the I m k must I X 111arkct - ~ ~ C I I S C ~ 1) !: tllc i t t l l ~ ~ ' i l \ . i:ii~.)~leiil 1~111I\
do not attempt to opcratc ill v q * ~llxlict ;111(l s;~fisfj.ing c\.cI-\. IICCI;~, a11d
they can not do a good job w c n within one h a d market, envisioned
com~nercial banks thercforc adopt strntcgics that li~iirt tlic~r operatio~ls to
olie or some segment of the market which nceds it can Inere efficiently
givcn its resotlrces.
Secondly. the bank must be c i~s to~rw - oricrit cd 1 3 ~ t h r ~ I il~rlclcr, Incans
that, aggressive banks carcli~lly dclirlcd c r ~ s t o n i c ~ ' ~ r l ~ ~ t l s f ~ o i ~ l c~~stoi~iels
point of vicw, not tllc b a n k Co~il~i~c~.ci i~l hank sl~orlltf tl~cw:lhl-e a im ;I!
making a sale tlirotrgh ~nectiilg the wstoincr. ~lccds. Satislicd cr~sll,)nlur\
are more effective aclvcrtiscrs tlian adverts placcd in the media. '1'1111s a
bank strategy that aim at satisfying customers need will increase
customers patronage of the services. I n contrast, the complains of
dissatisfied custonws a lmr~~ tlwir about banks can easily position public
' 'Inn hwk- l 'o tx ~111-c of t l i q i-lunder said i l l 011 study
' -I q h 1 1 t l~e i r banks
to more than 20 people, and cach of these told about 1 1 persons and so
no. To minimizc cwto~ncrs' complaints, t lrrndcr suggested that banks
should install computer koisks around the bank making it easier for
customers to make suggestion on strategies.
Relatedly, recognizing that cornrncrcial banks earnings come fi-om two
groups: new cr~stomers arid rcpeatcd ~ ~ I S ~ O I W I - S , n ~ ~ d that i t is al~vnys Itlose
costly to attract new custo~ncrs than retain cursent ones, building exist i ~ ~ g
relationship must taken very seriorrsly by adopting strategies that is based
on customer - oriented banking.
'Thirdly cooperate governance i n bank must appreciate the placc of
coordinated marketing ill the sclicrnc o f t l l i ~ ~ c c T l ~ i ~ t i ~ o tl~ia!gs:
coordinating the various marketing ft~nctio~l 0I'a bail k (cristo~wr relation,
advertising, ~narketing research, etc) from tllc custo~ncrs, pornt of vie\\.
and then coordinnti~lq all other ticpal trncnt ii i t 1 1 llle ~nxkctin~l (Icpartrs~cnt
put together a11 employee sllould tlc. ~ n x l c to ;~pprcci;ltc I l r , \ x b ( !K~II c l l ; ~ tc.
impact customers' satisfactitm. Cn~i~rncrci;ll I , i l ~ l l < ~ 111 parlicr!l;w 41ould go
so far as to include in every job dcscript~un an csplanation ol' Ilow that
job relates to serving the custo~ners. I'hc prc~nises manser, For instance,
should know that a inere visit by a prospect to a bank can sell a potential
ci~stomer if the premises in clcan, and if he is proud to explain to the
prospect how bank property is rnainta incd 1 0 cuppo~ t cli~;llity SCI vicc
delivery.
The fourth principle is that of' pi-ofrtnbility. C 'o~l l~~wclal t);~nl\s
shoi~ld recognize the profit, cvhicli is the 1nai11 goal of their l)usines:- n.111
be generated through creating custonw satisfaction. Commercial banks
have three (3) iml~ortant groups to satisfy these in tllcir order ol'
.--- ; n ~ l l l & . Customer, Employee, and Stockl~older. -
1-iuber therefore said, the employees nu st of all bc ~notivntion that they
will love their job and feel a sense of pride il l tlie orgmizatioi~. and llml
b bmk. this in turn results to Iligller polit ul1ic.11 s;lt~sl:\, tlrc :~~oc.kholclc.~.s I
I This mi11 e l k t iniplies that the ct~storlier i s rllti~natcl\ tlx kcy to
profitability and I'or \vliosc satisfactioil ally strategy sliould !i)cr~s on.
Building effective banking relationships is not just about saving money or
granting loan. More funda~nentally, it is abor~t understanding the
ctrsto~iier so well that selling becomes superllr~ous ( I h c k e r 1973). AY-id it
is only by understanding the ciisto~ncr; tliillking like l i i ~ n and hence
gaining, satisfaction will commercial bank Iinvc ol la iu 01' ~xxtorilig.
Confidence in banking rclat ionship.
Robert ( 199 1 :37G) llavc wtctl that inarketing et'f'cctivc~icss tlcpcr~ls on
wlietlier management can design a profitable strategy out of its
pliilosopliy, organizat.ion and inforination resources.
This lie said will requires: firstly, a formul system for annual and long-
range marketing planning. Secondly, tlie system sl~ould lead to a care
strategy that is clear, i~i~iovation, data based thirdly, management sl~ould
look ahead towards continge~it act ions that might be acquil-ed by
development in the market place and fbw-tlily, marketing plans do to bear
fruit unless they are efficiently carricd out at various levels of the batik
operation. Therefore, for strategies to be efrective and profitable to the
bank, the interest of the customers must be of paramount concern to
cniployees tlirouglloi~t the O I ~ I I ~ Z ~ I ~ ~ O I ~ .
2.9 COiCIICIEI<C:IAL BANI<S AND RIODERN TECIINOIAOG\'
With the help of modern tecllnology tlie banking today is more
transformed than what it was 10 to 20 ycai-s ago espccially here in
Nigeria.
Commercial banks now have products and services that make it possible
for their customer to transaction tlieir bi~siricss witliotlt sweat or rancor.
Most of the Nigeria co~n~ncrcial I)miks I ~ O W 111;11i~ auton~atic t ~ : I l ~ ~ . i ~ i g . * niacliine smart card, pass card ctc. I hc LISC of' t IIC'SC products is tni~clc
possible by electronic banking.
111 the Imhing irdrlc;tr.y of today 'bll~c c lcc t~or~~c Ixl~ihi~ig s\ \ IC ' I I I is c r w x
b beconiing i~ivariabk" Fi1111iii OIayi1~k;i(2003). A 1 ) ; 1 1 1 1 ~ t l l ; t i li-b;~nkii~g I
I service that is now widely med ig the &mi~nercial b i i~ ih~ i s otil i~~c I ~ 1 1
time banking services.
With the on line real time scr-vice i t is one customer, or~c bank. This
I I I C ~ I ~ S a c ~ ~ s t o ~ n e r of a co111111crci~1 hank say Ze~iitli l ~ i l ~ l l i ~ 1 1 1 operale his
accor~nt fio~ii any part 01' the couritry irrcspcctive of' tlic branch were his
account is domiciled.
So E-banking prodrlct now ~iiadc available I)! 4 0 1 1 1 ~ ~ ) I I I I ~ I C ' I C ~ ~ ~ Iml,
natiori wide include Accoi~~it viewing (AV)- \i l ~ c ~ c a custcwer can vic\v
his account at the co~nf'ort of' his lwmc. I'lcctl-onic paylnc~lt pwx:slsin!:
(EPP)- f i l l - ~xmitta~ices into ricco~~~its, custo~iiized payiiierit I.rltirc awl
view (CPEV)-where instead of' writing cheques or getting bank draft a
customer just providc a list of paynicnt lie wants to rnake to tlic banking
who does the processing wli~le the c:ustomer view his account to ensure
complia~m.
Modern tecliriology has really made it possible for com~ncrcial
banks to increase their cfliciency and effectiveness in servicing their
customers. I-Iugo and Adeleke (1998 p.28) confirmed that satisfy their
customers with rnoder~i tecliriology wlieri they said:
describing services rendered by the co~n~ncrcial Ixl~ks. UIC i ~ ~ ~ l ) ; i c t cjl ' ti-.
banking i n co~nrnerciai banks technology is eltonnous. 'I'hcr-e i s even this
0 card.
without anybody knowi~~g i~ .
I . Acliuniba, I . C. (2000): Strategic Marketing Managetnen, In 'She 2 1" Century, Chorlolte N C, Mac-Millia~~s C:apit;~l Publisliers Inc., USA.
4. Hiliary, C. (I 988): Services Marketing Strategies, l ~ g o s , Business Ti~iies, Arlg, 24, P.6.
5 . Derek ,K. and David 13. (1 985): Markcti~lg Co11ipcti(io11 I H l;il:~ws~ Lagos , Fi~iaricial Times, Ja11 6. P.55.
8. Afolabi I,. .(I 994): I'hc ----. Niceria 12ankct-s-g . I O I I I ' I I ~ ~ of 'l'hc Chartered I~istitutio~i Of Bmkcrs, April - .lune ,Lagos, 1 2 Balongu ti Street, Nigeria.
9. Pride, U .M And Ferell 0 .C.( 1997):L4xk3ing, 130sto~\, f-ioughton. P 13.
I I . Channon, D .F (1992): Banks Stratepic Management and Marletink Chcliester, Jolin Wiley Arid Sotis, ---
Pp.14,121,134.
Usman 'I'., 7 , P.M.
Crossc AM\ \ \ ampcl ( I OW): ~lil~l:lgc~~,~!~jJ-<~!j.g-~g~jj:~.r.!~~~~~~~~~-~-~~ Dank.; '3"' IIJ, Ncw Jersey, Prentice Hall Pp.293,299. - - -LA -
Ogu~itade M.A. ( 1987): Marketing of E3anks Services, I..agos Busilicss 'I'irnes, Feb,2, P.7.
M a n , 7'. ( 9 9 I ): c r v c i r e M e I,oncfon; Mcgr-aw I la11 13oc.)l; Cor~ip;lny 1) 1 S , 102.
Modern, A.R.( 190 I): Element Of Market illg, lm~tlon I:$ Publicat ions, P.6,669.
Obo11 G.A:1'.(2003): Unioli 13mk ( 11' Niy. 1'1 A ', At1~111;ll ljk~,~w'j-j-i~!-! Accou~ts 1,;lpos Nigcrin. _ _ . A _
Bovee, C. 1 and 'l'llill, .I. V.( I OW): Ma1 ksll!~, New Yolk; Mc-Gr-aw liill Inc. I) 697.
Modcrn, A. R : Op Cit.
Evans, J. R. and Bonnan, R.(1937): M,:j-I;.~kc~~g, 3"' I'd. New York? Mc-Milliam, l'p 14,023.
Cliannon, D. 1:. ( 190 1 ) : Op Cit.
1,ot-d Sealioll~n ( 197 1 ): 'I'lle I\/larketing I'ro~~amnlc 111,Sg~vicr: Bankit% I ,olldo~ ,'l'l~e Institute ol' 13atlkers.
Martin, T. ( 199 1 ): Op Cit. Oguntade, h/i. A. (1987): Op Cit.
Ajickigbc, J.M. (2004): First Bank of Nig. Plc, Annual Report and Accoirrlts, I .ages, Nigeria. -.---
Also S. (2004): "C:olnrnerci;ll Batiks F'osit ion in N igeria,'?Lagos, Uusirlcss ' I ' i~ixs~ March 29- April 4, P.6. ----. . .
Ajayi, P. (2000): Onitcd Bmk for Africa PIC, Annual K e p o r ! : ~ ~ Accou;it, 1'.26. --..-
Ebdagl~e, J.( 1992): "Survival Strategies lor Drrsiness", Finaincial Aug. 2.5 ,P. 15.
Rowcr, M .( 1070): C'o~nprtriy Strategy, Ncw York, Mcmillian Publ islicrs.
Ilonclcr, M. (1098): Marketi~ig Stntcgies, 5'h Ed, New Jersey, t3rwtiw I lall ]lit. P.22.
Kottler, P.(l994): Marketi~ig Maila~eli lgg~ Analysis, Planning lmple~nentation arid Co11t1-01, Ncw Jci-scy, J're~~tice I la11 lnt., USA.
Nnabuko, J.0.(1998): Marketing Ma~taficmcnt, Inug~r, Orecision Printers Alid I'oblishers, Nigcria, P.2 I .
Nnww . I . 17.: 01) Cit
Olayinka, F. (2003): b"fl~i~igs To Tcll J'ow C.'r~ston~crs", Wise Choice, Ul3A Quarterly., VoI. 7, M ~ I - c I I ~ Nigeria. p-.
I lugo, M and Adeleke, E-3. (1 996): A I<ellectioii of Banking O m t i o n in Nigeria, Dank Anrlrnl, Vo1.8, 0"' Ed. -
Oboh ,G. A.'T (2003): Op Cit.
lmaga, E K(1984): Banking C)istinc-, Lagos, Bmincss Ti~nes, March 5, P.9.
'T'llc purpose of this sl~ldy as carlicl- stillul is lo ; ~pp :~ iw rll;t~.kt:tili&>.
strategies in co~nnicrcial h i k s . 'I'liis cliaptcr is tllercthrc cicsig~rcd to
discr~ss tile sorlrces ol' data riscd and tllc applied rnctltotlolop i l l 1 1 1 ~
study.
The study will not be too general, but will focus on a sample 01' tltc
major co~n~nercial banks, wliicli we considcr to be a good estimate of tlic
cl~aracteristics of'tlic elitire populations. The banks used for the study as
had earlier been ~rientio~iecl arc First Rank of Nigeria, PLC. Union hand
of Nigeria PLC and U~iitecl bank of Nigeria PLC.
(for the old generation banks); Ze~~i th Bank PLC, Diamond Hank PI,('
And Guaranty Trust Bank YLC (for the new generation ones).
'Tlie researcliers dccisio~i on those banks is based OH the ~ir.miber-
of branches they operate, heis asset base and the size of deposits they
1101d wliicll is a clear indication of tile size ol'paironage they t~~aintain.
Two major sources of data used in this strrdy were gatliered li-om
primary ant1 secondary sorlrccs
Primary data were obtained fi-om respoliscs li-om pel-soml i ~ i t e ~ - \ ~ ~ c w
direct obserf~ation and questionnaires aclministcr-ecl on the lxmk stafl' and
cr~stoliws. Wliilc sccolidarv data were ;issc~itbled l'ro~ri
b relevant tcst tiooks, jorll-rials ~nagazirtcs , ttc\\sli;~lwrs . I ~ - ~ . ? I I I ~ . rlOFC am1
. r bank a~lnr~als. Sccoiid:11-y data provided (lie ~iccdcd tl i~rct ton : I I ~ ilil;ipI~t
into the research.
3. I . I 'IIIE I ' l t I ~ ~ Al t l ' l )~ l r I ' , i
As has already becil stated, our r i : data are made lip of
cluestionnaires , direct observation and pcrsona intcrvicws.
(a) Direct Observation / Monitoring:
As a stair of one of the banks irnder strrclj.. tlw I-cscrlrc-11::: \~~;ls 2bI1: 1 0
carry out keel1 olwxvation on tllc major issr~cs coriccn\irlg tlw rcscard~
tliroirgh out tlie dwat ion of the str~dy. Such obscn*at l o l l p d c d tlw
researcher in arriving at somc of the coliclr~siolis and I-ecoril~iie~ttlativlls
reached in the study.
(b) Oral /Personal Interview :
During the tinic of ~Oscrvation the researcllcd made personal contact ill
form of oral interview with the bank staff'and customers of the brmclles.
These oral discussions/i~iterviews were unstructured but its esselwe w a s
to elicit iriformatiorl, which c \ ~ u l d not Imve been obtained tlaroi~glt
questionnaire.
(c) - The Questiqnnai~-c:
L~I-ect infi)~-mc?tion \vas obtained from the responses of those issued with
questiol~naires. 111 strilct wing the questionnaire, the researcl~ar use
closed-ended questions, \~vhicli are known, as stnlctured controlled
response questions in order to dra\\f out necessary and reclr~irecl r'es;ponsc
without deviations. The qucst i o ~ m i ~ - e provitled 1 hc ~-esj)oriclctit s \vi& a sct
of alternative answers and asked them to select those that apply. 'l'llis help
for easy tabi~lations, elimination of error, calcrrl:~tion md it~~c~.p~-et:i~tiot~s
of the result.
A covering letter \\:xi attaclled lo the qr~cs~iol~~laircs. \\Ilicli espl:ii~~
tllc topic of' tlie st~.~d~s, mcl strcsscd o11 tllc i~ilportar~cc o!' the cic!;ir.ccl
~.cspo~lder~t to the silcccss of tlic rescarcl~. Ii also I-cvcalcci IKW the rcsult
and the frridings of t l ~ s t ~ ~ d y will hc ~lscd arid seek their co-opcratiom
Two sets of questionnaire were prepared. 'l'lle first set was ~neaiit to be
co~iipleted by 126 staff of tlw selcctccl comrlcr-cia1 batllts wllilt: tlic
sccond set was meant to be completed by 150 c~rsto~iiers of the selected
corn~nercial banks.
Each of the questionnaires contailis questio~ls rclating to:
1 Commercial banks rnarkcting stratcgics : I I ~ t lwir ;dj i l i l v 10
generate profit.
2 New scrvices i n com~iiercial and custotiicrs satisljcticm
3 Intensive advertising in colii~ncrcial bank as a pro~iioticwl strntq!~;
and its impact of their sale and
4 The quality service of comir~ercial banks and its influence on
patronage.
3.1.2 SECONDARY DATA
The secondary data used in the study came from marketing and
financial text books, joun~nls, semiliar repoils, research reports, lecture
notes as well as articles in newspapers and unpublished woks. Egirally
extensively used, were the annual reports and statement of accounts of
t l~c banks under sl u d ~ . .
3.2 RESI!:AKCI I M E'T'I 10DO1,OGY
The method of the research is purely empirical. Although its basis
could be found in a con'eptr~al 1iteratr.11-e review, personal intcl-views was
used arid played only a supplementary sole.
Initially, a preliminary survcy was ca~ricc! out in \chic11 s o t ~ x :;taI'I
and customers of tlie selected co~ii~i~ercial banks were risked verbal
cluestions to confirm the existing belief and precoriceptio~~s glear~cd from
t11c literature revicn. To wscss llle wl~dit!~ oS ptwsiting cct-lain iJtcns of'
c4 inquiry and to generate ideas and ficts a l m ~ t somc info1 r 11;li i 0 1 1 I I I I~; :O\CI a!
. . during the survey were vnluable with ~'espcct to providiry (lir-cction a ~ ~ d
guideline for preparing structured q11estio1111ai1-e. As .a resull of' the above,
structured questionnaire numbering 276 \were adrni~~istered to both the
staff and customer of tlie selected conin~crcial ballks. l'htts structured
qwstionnaire represent tlie main research i~~strr~ment that yielded primary
data for tlie study.
Scveral draRs were prcpared based OH tlie analysis o f (lie proOlcm and
purpose of tlie investigatio~i. 'fl~ese wcrc rnodil'iud md ~wiobi l iz~: imtil
tlie final one was evenlmlly prodrlccd after a series ot' col~strr~ci~\c
criticism and suggestions.
Likewise before the questionnaires were administered, thc
researcher used pre-contest method to get the positive and negativc
response of the study population. Ilrrring this pre-contest period, a close
relation was established between tlie researcher and respondents.
3.3 PILOT SURVEY
Before the researcher finally arri~vcs at the quest ions therein
contained she the researcher conducted a pilot survey to determine tlic
proportion of the respondents that give response as to whether marketing
strategies adopted by co~n~ncrcial l ~ n k s ed~ance ctis~oi~~ci-s satisf;w:tio~~.
T l~c lastlit was that from a randomly selected twenty (20) respondents in
the banks, 18 or 90(% of tlie respo~ideiits indicated that strategies atluptecl
by coinmercial banks enhances customers satisfaction while 2 or 10°h of
the respondents says marketing strategies adopted by con.inlc~.ciai tmks
The instrumellts (cluestionrlaires) rrsuti for this strlciy were
personally distributed by the rese:lrcller to t l~e banks staff. Wliilt: the
scsearclier used tlie bank staff who are insitlcrs to reach their customers.
'I'he customer relation officer of each of tlie banks was a collecting point
for bank staf'f and customers. A period of tu.0 \vcel;s cre givm to
ensure adequate return. At the end of the pcriotl given, tlic t~csearcher
personally collected the clucstionnaires fr-orn tlw crrsl,wlcr rellation
officers. This mctllocl is 11scs SO ilx to ;n:oid tlw qrlesfio~wi~cs gt~lli~ig
lost in transit if mailing ~netliod was used. 'I'lie ~netllotl \\;IS casj- as thc
researcher happens to be a staff of one of tlie banks in qucs~isn 311d has
friends in the other banks.
3.5 DI<'I'EHRI IN A'l'ION OF SAMPLE SIZE
Based on the result of the pilot where from a randomly selected
twenty (20) respondents in the banks, 18 or 90% of the responderlts
indicated that strategies adopted by co~ilmcrcial barks enlmlces
customers satisfaction while 2 or 10% of the respondents says marketing
strategies adopted by co~nr~w-cia1 banks do not enllmce customers
satisfaction.
saniple size was determined using the following statistical h r ~ ~ u r l a :
N = z2pq
E~
Where
3.6 SAMPLING H'KOCEDURE
The technique adoptcd fix- obtaining il random sarnplc for this
alphabet:, A,B,C,D,E arid F. Therefore, the population was chided. into e t \vo strata of batik staff and bank cr~sto~ncrc. 'T'l~us A. r3.C'.I),I and T:
were used to represent staff in each of the six banks first bank, unioi~
bank, united bank for Africa. diamorid bank. r.cnitl1 bank a i d guaranty
bank respectively while k B ~ , c2, Il2, E~ and I;' wcrc usccl to rcprcsetit
their customers. Random sampling were r~seci in order to give e m h
(x') statistics (at 5% level of sigiilicancc) was e~nployecl to tleternii~~e if
the differences between the observed and espected Srcqr~eiwies are
significant or not. The chi-square test static is dellole by
Fo = observed lrequeilcics
Fe - expected frequency
& - alpha - 5% or 0.05 level of significance
c1.f = degree of freedom = N. 1
The chi-square (x2) is a measure of the extent to whicli in a give11
situation, pairs of or?servctl and expected fi-equencies agree. The naturc of
x2 is such that when there is close agreement between observed ;md
expected frequencies, it is snlall and when the agreement is poor it is
large.
Conscql~ently, only a si~flicielit ly large value of X' will cij.t-t.se
se.iection of'tl~c 1m11 Iqq~otliesis.
ClIAPTlCl3 1:OI I l X
4.0 1)Al'A PHISSliN'I'~~'I'I0N AN11 ANALYSIS
The objcctivc of this chapter is to present and the analysis. data
obtained ti-om the study. It also aims at looking critically at thee all
analysis of the various data will1 n view to testiug the opcratmnl
hypotliesis postulated earlier.
(92%) percent of the samplc sizc, ~ I ~ C I - C propc~ 131 coiriplctcd a ~ d rctul-lied
for the analysis. Thus, the resmrcllcr workcd with nincly two perce~~t of
tlie sample size for the analysis.
Summarized below are the analysis of tlie ctistribr~tion atid return of
questionnaire.
TABLE 4.1
- - - -- - - -- - - - - - - - - - -- - - - - - - -- -- - - - -. -
~ e s p o n d e n t / Nlmiber of f o r m -- - 1 Number of form I I'crrentagz I I
I I
. -- .--. - - . -- - . . - . - -. . , . .. . -. -
[ ~ X ~ a n k Plc - 6 t 40 14.49
17.0.3 -- -- -- - . . . - -- . - . . - - .- -. . . - -
Guaranty Trust 14.49 i t-------pl------- Total -1 1 92% I
TABLE 4 1.1
QllES'I'!ONNAlRE 1;OItMS I)ISrrRIBU'~EI> TO B.4NK STAFF .. - - -- --
Responder~ t I NunMr of form
I Distributed Ret II rned I .
First Bank PLC --
Union Bank PLC 1 I9
-- - - - - - -. . . - Diamond Rank r 2 0
Guaranty Trust
I'ABLK 4 .1.2
QUESTIONNAIRE FORMS D S R J l 0 IlANfi
-. -- . -. . . . .
Respondent Nunr1)cl- of f o m s
IXsf rib11 tcd
First Bank ~ l ' c .
Union Bank Plc.
UBA
Diamond Bank
Zenith Bank
Guaranty Trust --
Total
PRESENTATION AND ANAYSIS OF THE RESPONSES
STRATEGIES AS COM I'E'I'I'I'ION S?.JRVIVAI L 'TOOL
/ Responses I
I.. -. 1 Total 1 *O
104 Respondents representing 86.67% of the total staff that
responded to the questionnaire agreed strategies are adequate cornpetition
tool , while I6 respondents (ix. 13.3316) tlisagrecd .What this mcrtris is
that strategizing is the only way out for a banks to rclnain in busiixss
. v OPERATIONS
I IS i~nprovc thc qualit!. o f scrviccs 1 cllfcrcd
1 -- - - a .
1 . 1 ' 0 cnablc thcm
scrviccs . - - - Totnl
1
SOURCE -
(age!
., .
A total of 52 staff representitlg 43.34";) 01' tllc staft' tha t rcspl:rntlccI
to the questioniiaire bclicvcd 1 1 ~ t co~ii~ncrci:rl IxiirI,~ c-rwll~~tc.ri;lc t l i r ~ r
operations to improvc tlic qriality of scl-vice ofl'crcrl, 34 I . C S ~ I ~ C ~ I ~ S (ic
28.33%) also have thc belie~qc that cointncrcial banks ctmputcrizcr tlluii.
operation to enliancc their ability to generate profit, while 34 resportdents
representing 28.33% hold the view that commercial banks co~nputcrizc
their operations to enable them offer innovative services to customers.
TABLE 4.4
STRATEGIES ENHANCES INNOVATIVE SERVICES
1 Responses 1 No of U A I I ~ StdT Responde~~ls
FBN ' U R N -
-- Yes 18 13
- -- NO 2 5
. A DIAMOND ZENI'T'II
107 out of the 120 staff that responded to the questio~inaire (i.e.
89.16% of the respotldents) agree that auto~i~atiorl o f tlic stralcgizinp
enllances their ability to provide intwvati\v s u \ i x s , uhi lc . O I I tlic oLlw
hand 13 respondents representing 10.84% do not agree 1 1 ~ t st ratcgizing
criable Ilie cornrnercial banks offer innovnti\.c senice to c ~ ~ s t o i ~ ~ c r s .
a cost effective method of I>arlkiiig just as arlto~mtion enlia~iccs
innovation. What these rnean i s that to them, bailking without
computerization would be unthinkable.
BANKS' ABI LI'I'Y ' 1 ' 0 GENEIIA'I'IC PIIO FIT
No 4 6
I6 12 25 86.67 --...----. --
Total 20 18 2 5 20 22 15 120 100 ---- -- . i
Source: Staff Questi-onnaire. Question No .9
104 Staff representing 86.67% of the r-espondents agreed that
strategizing has impact on the colnrnercial banks ability to generate
profit, while a total of 16 rcspondcrlts r~:prcs~ntiilg 13.33% clo not agrce
profit.
TABLE 4.6 - WI1Y NEW SERVICE /PRODUCT INTROD1!C'l'lON IN COMMERCYAI,
RANKS
---- UBA UBN
customers To& satisfy the unsatisfiei nced s[ the esisting customers - - - ---- To increase the source of
Source: Staff Questionnaire. Question No. I.-! -. - -. - --
The above table shows that total of 54 respondent representing
45.00Y0 of the total staff that responded 10 l11c clr~cstionrl;~ir~c h c l i c w t l l ; i t
30.83?4 also hold t lic view that corn~iict.cial l m k iritsotlr lcc8 ~)t:\\. s c n i x . * often to satisfy the u~isatisficd nectl of tlwir. cuisti~lg c~~sto~~lc:- . ;
Source: Dank StaiTOuestio~inaj~e~Q.uestioti No. 12
The table above revealed that a total of 68 respondent (i.e. 56.67%
of the rcspo~idc~lt) agsee tliat new services i~~troduced by cotnlnercial
bank do otte~l c~~co~lr-agcs new p:~tso~i;lg~ of' tlieir banks while 52
representing 43.33% rcspo~;dents do not ag-ee that ncw services
introduced by the bank o f en encoura,ge new patronage of the banks.
awareness
'1-0 educate the
public about the
new qi~ality of
sel-vice offered
by the banks
56 out of the 120 staff (i.e. 46.6794) that respo~~clecl to tlw
questionnaire hold the view that the banks advertise their services lo
enhance their sales. 27 I-espondents representing 22.50% also held thc
view that the bank advertise to create public awareness about the bank
and its services its scrvicc and 37 ~cspo~idmts idso representing 30.83
maintain that the banks advcrtise to educate the public about the quality
of service offered by the banks.
COMMERCIAL, IIANK
I Responses No of Bank Staff Responderils I Total 1 Pcrrcntage 1 L
questionnaire agree t h t Il~cir bn~il,s arc onl ir~c \vl~ilc 15 ~cpr-esonting
12.5% disagreed. A reillark obsciwt ion I W I c. f i 0111 the tnblc 4.1 I below is
that all the staff of the New Gcl~crat io~~ 13a1ik arc al'f'irliied been online
while the 12.5% that said No are all froln the Old Generation F3anks.
Source: Staff Questionr~a~e,~Qu-cs~ioil N O . 16
Table 4.9 made know that 58 respondcl.iits (i.e.73.33) agree that I-lic
bank building arid their physical environnwlt serve as all advertisement
to attract patronage \vllile 32 (i.e. 26.67%) of the total respondent tilo no
agree that the building and the physical environment was meant to serve
as an advertisement to at tract patronage.
TABLE 4.10
THE IMPACT O F IN'TENSIVE AI)VERl'ISlN(; ON '1'IIE SAILES OF
C0MMERCI: l I . BANKS SERVICKS
Yes t- Source: ---
-
17 . . . . .-
20 18 20
3ank Staff Questionnaire. Question No. 17
Source: Bank Costomer Qucsiionnai~-c, Qyest ion Nu.3
The above table showed that 25 respondcut I-epresc~ltir~g 20.74'% t.11'
the banks customers that responded to the questionnaire claim that die
banks advertisement placed on radio appeal more to t l im, 34 (or 25.10%)
claimed televisions place~nent appeal more to tllem, 16 (1 1.54%) claimed
that tlie banks advert iscimmt placed 911 bill board appeal more to t l ~t:m,
yet another 34 (or 25.1 9) claim that tlie adverts placed on Ncw papers
appeal more to them, wliile 23 respondents or 17.3doh of t l x rcspo~lderlts
claim that the banks advert place or1 mngazi~le appeal more to them.
28 respondent reprcseliting 20.74?./0 of the hanks c~rstoriws I : ~ I ~ I
1.~7pondcd to thc qucstiormairc claim that the banks advertisaiie~~t placed
on radio appeal .lnorc to tlmn, 34 (or 25.19%) clairlletl tclevisians
placement appeal more to tlic~il, I6 ( 1 1.54%) claimed that the banks
advertisement placed on bill board appeal more to the~n, yet another 34
(or 25.19) claim that the adverls placctl or, Nc\i i>il\>Crs ;~ppc;iI nwrc 1 0
them, wliile 23 respondents or 17.34% of tllc ~-expolldcnts claiw that i he
banks advert place on magazine appeal more to thcm.
'I'AlBI,lt 4-12
FACTORS THAT INFLUENCE CUSTOMERS CHOICE OF THE
BANKS -- . . .- - -- .- - - - -- --. -, - - . - I~csl~onses No of Bank Customers Responde~rls 1 Totill
--
Advertisement t t--T-- Location I 9 / I 1
Rank Building -. -
Services
facilities
J..
Source: Bank Customer Questionnaire, 011estion NOS
On the factors that influences customers choice of banks, the 23
respondent or 17.34% says that the advertise~netit of the bank was the
factor that influence their choice of the bank, (or 23.70) claim that thc
location of the banks was the factor that in~lticnced their choice of the
bank, 12 or (8.89) were influenced by the banks buildings, and then 5 1 or
(37.715%) were inflr~enced by the services rendered while 1 7 ( 1 2.29%)
wcrc also influcnccd by the banking facilities of the banks. 'This is sl~ow
in the table above. -r* M --F*@l Id1))\ h v
-
TABLE 4.13
--- -- [ ~ e s ~ o n s e s I No of Bank Customers Respondents r-kercentage 1
i. - L I I . L I J Sorrrce: Bank customer Questionnaire, Qrrestio~r No.5
7'11~ lnblc a h o w slio\v~cl I I 2 t c s ~ ~ ~ ~ i ( I c i ~ t (1.c. 82,00°0) I I W ~1t1i.I lit?
of service is a major consideratio~i fix clloosi~ly the banks \ v h i le 2.3 or
( I 7.04) of the respondent do not make tile clilality service of the banks a
ma-jor consideration in tlicir clioicu of (Ilc I)alil\s
TABLE 4.14
CUSTOMERS PERFORMANCE lWI1 A~l'l'OWl A'I'ION 0 1 ;
CORIhlKRCIAL BANKING OPERA'I'IONS
- -
Yes 20 20
. - - - - - - -.- . -.
SOURCE: BANK CUSTOMER OUESTIONNAIRE, QUESTION N0.7
The whole custoniers (i.e. 135 or 100%) that respo~lded to the
questionnaire prefer ai~tornatecl banking operation to the manual operation
of banking services.
Table 4.14.
TABLE 4.15
AUTOMATION OF TIIE BANK OPEUAI'IONS A N D 1'1 11: 01 1 A1.1 1'11-5 ( ) I . 'I l I l ' l ? ~
IICS~IO~SPS 1 No of Bank Cnston~ers Hespo~~dents 1 Total I Percentage -- I
- - - - - . . . .- - - - - - - -. - -. - - -. .-- -
Yes 20 20 - -. - - - -.
NO 0 0 0 0 - -
'rota1 20 20 17 ,100 . I
Source: Bank Customer Ouestionnaire, Ouestion NO.8
From the above table, all the custotners ( 1.77 01- 1 OO''4) rcsponticr~ls 4 0 tlw
qi~estionnaire agreed that automation o f banking operation improve the
quality of the comnercial banks services.
I I -- I - - - - I L - 1 .
Sourcc: StafT Quesiioo~~aire, Ouestion No. 6
A total of 99 resyotldent (73.33%) says that ilt'w S C ' I . V ~ C ~ S
introduced by the banks often appeal to then1 whilc 30 (36.07) said that
new services introduced by tile commercial banks do riot oftctl appcal to
'I'AULE 4.11
THE COMMERCIAL BANKS CREDIT C A W SERVICES A N D
CUSTOMERS SATISFACTION
.. - I -- ~ a t r l 1 20 1 2 0 f ~ r 28 t 25 1 2 5
Source: Bank Customer Ouestionnaire, O~~estion N0.14
114 (Or 84.44) of the respondent did not agree that credit card services
ofrered by the co~ntnercial hank o f h elicit custon~crs sntisfhctio~i. while
2 1 respondet~ts (or1 5.56%) agrecd (disagreed) that value card services
ofkred by the bank often elicit custoniers satisfactions.
5.0 RESULTS AND DISCUSSION
I; 'I'he findings of' the study arc discussed under tlw li)llowi;l~g
Iicadinys 1 1
5.1 'I'IIIC S' l ' l<A'l ' l<C~lKS /\S A ~ ~ O ~ l l ' l C ' l ' l ' l ' l O N St ll<Vl14,1,
1'00 1,
Every fact tends to indicate that tllc C ~ I I I I I I C ~ C I ; \ ~ banking
c~lvironinents Ilavc remained compet i t ivc, md l i ~ any bank to succeed i n
this c~~viroi~inent, the bank must have an edgc i n the co~ilpetition. It rnr~st
be able to attract deposits at a con~petitive rate. attract safe borro\vers of
excess funds at a profitable ratc and above all the stocltastic cm iron~nent
also require ttiat tllc bank IMS to bc d ~ i c i c ~ ~ t 111 ~ C I ~ ~ ) I I I I ~ I I ~ 11s cco~wmic
scrviccs.
This therefore implies that there has to be all improved ~iletliod and
processes of delivering bankitlg scrvice. 'l'lle finding of the study i n tables
4- 5, 4- 15 indicated that i t is in the bid to erlliance their co~npctitivc~~csc
that ~ilirst coili~ilcrcial banks havc placed inorc emphasis on
computerizing Inany of their operatio~ls that are previously operated
~nanuall j/ as this help to redi~ce processing activities and give faster
disseminatio~l of infornlation to custonicrs. Ar~tomation have not only
improved the quality of service delivery but also e~isured operational
efficiency of the banks as this ~llethod combirle many activities and
perform them at a very fitst sped :rnd accrlrncy.
The findings of the study as analyzed i n fnhlc 4-4 aid ( 1 - gave tlw
i~ldicatio~l that airtoillation of' conlmercial services has positive impact on
their ability to gcilcrate profit.
Moreover, Layi Afblabi ( 1904 p.8) agrees with this finding. H i s
findings disclosed tliat "inability to adopted uioder~i tccllnoio~y was onc
of tlie causes of poor profitability in banks cspccially tllc satc owiicd
in such balks do ~ o t put them i l l conlpct i t ivc position arid I 11;lt I'actos
seriously affected their conipct i t ivc~lcss and probably Sacili tateci their
railure.
Si~ice tlie ability to generate profit determilie tlie fi~ture of a bank
(thc jounlal of charted institute of banks Vol. 8 NO. I 1 , 1090 p.32) also
co~if'ir~ii that tlie competitive bank of tornc,rro\v i s thc o w wl~icli cq1.1ips
itself today with a strategy to be a winner to~not-~-o\v \\ ill1 tcch~~ology that
fiilfills tlie strategy, tecl~nology for countcr trarisactions, coi~tiscling l m i k
office work case Iia~idling cash dispe~lsing, enqi~ries, stnt't' [raini~lg and
co~iirnunication.
The finding in table 4-4 also revealed that apart t iom being
C O S ~ ef'fective, strategizing enhances tech~~ological innovation which
ofTer tlie bank ample opportrmities to provide innovation services tliat
greatly contribution to tlicir profitability. Okafor ( I 998) in line with this
view confirmed that a single ~nacliine autcmatcd 'I'ellcr Macliinc (ATM)
for instance can ofkr 24-hours services for a wide range of financial
services including cash witlidra\val, balance enquiry, movement of funds
accounts, deposit of cash clleqi~es etc. 1 liigo and Adclcke (2002) also
confirnied tliat the inno\~ation of customer 6iendly services and financial
prodiict such as UBA value card, lJRA inoiley Grain, Diamond savings
Card, Diamond pay Card and Electro~iic S1na1-1 Card Accoimt (LiSCA) of'
tlie Guaranty 'I'riist Bank, is rnade possible by automation.
Also in trying to tap the benefits of strategizing, tlie banks should
also be aware of its weaknesses (13r1sirlc.s~ 'I'iriws, 0ctol)ct-, 19 1092) liw
instance disclose that "plastic li-iwd" i l l 1900 cost I3ritisIl 13anl;s I- IOOrn.
Computer fraud is not only rising is value bt1t is beconling more
sophisticated. As computers become ~nol-c \\iitlcl y rlsccl tlic l i -n rd stars
battle against fraud. A good cxalnl~lc is the ~ccliriology fiw iclcnlilicatiw
01'cardliolders. Banks sliorlltl tilake cl'lixiivc rlsc 01' Il~esc i ~ i s t r u ~ ~ ~ c ~ ~ l s as
tliey strive to exploit thc benefit of autolnatccl operation.
5.2 COMMERCIAI, I3ANKS NICW I N I ' (SEKVl<1FtS)
AND CUSTOMERS SA'I'ISFACTION
With tlie increase competitive in tlic batikitig c~~\iroi i~~ict i t .
corn~iiercial banks saw the l w r j to diversily by scg~iicntt~~g il~cir ~liarkct
mid dcwl~pitlg I ~ C W fi~ia~~cial ~ I ~ I I C ~ S to sr~sttiin tlicni. I'he f'indllig ;IS
shows in table 4-6 indicated that, this attempt was to eiil~ance tlicir source
of deposit mobilization. Altl~ougl~ the findings indicated in table 4--7 that
ncw services ol'fered by the banks have made more impact oil custo~nct s.
Also the analysis as presented in table 4-17 sliows that credit cards
services offered by the banks do not oftell elicit ci~sto~ners satisfactions.
This because they do not carry out enough research on the a ~ d wants of
their target customers before developing and pushing si~ch product into
the market. 'l'llc banks sllould the filcc this out iwcl introcfucc ;I ~nodified
product.
I-Iowever. oral interview carried out o ~ l cr~stomcrs by tllc rcscar-cll
co~lccrning c~.cclit c;mf rcvciilctl tlwt tlic c~~storlicrs c~tllcr do !lot wliat i t is
o r ncver enjoyed it.
A stlrvey conducted by 1 lugo and Adeleke ( 1998 p.28) also confir~ncd
1111s. 'I'llcir l'intfings sllo\vs 1 1 ~ 1 wllilc llrc Iiist I\vo years Ilils sccti t l m t
entrance of many new products it1 the commercia1 banks market, tnajonty
of the existing financial prodr~cts arc perfi>rrni~lg below expectation, s m e
of the spo~~soring bank l l i l ~ ~ c ~ ~ I I c ' I . lost i n t c ~ u t i n p r o ~ ~ l o t ill!; 1ltt:sc-
products or having dutnped tlletil lbr good. Altllougll tllcir- sludy f'ttrilter
disclosed that, product development i n comtnercial banking is a veritable
conceptualization has often resulted to frequent repackaging and
ruplacement to existing once.
modilkation and product cleletiotl is a key cletrw~t i l l tlic clc\cloprnent
and maintenance of' a yl-duct range. The product range nii~st meet tile
ever- changing need of the bank customers. It is therefore necessary to
stress here that unless a batik product satisfy its target market it cannot
achieve the desired competitive edge for the banks.
Also, the c o ~ l s t r a ~ ~ ~ t s I I I~ ICIUI ! 111 !OC ill>O\l~' st~.;~tcg)/, L I C C O I ~ ~ I I ~ 10 Lj.1).
Ihcrnadu (I994 p.3) is that illarkct seg~i~clitatio~l tens to limit a b;iliI.; 'S
potential market, ill the wliilc c~nphasizing OH a par~icular segments, the
balks may be out of' toucli wit11 thc devclop~ncnts in otllcr segments. I t
~nealis therefore, that for a bank to adopt this competitive strategy, it m ~ s l
be sure tliat the market scg~ncnt is served is large eliougll to be worthy of
clope~ilcnt i l l the t lwe i s 111i11.kci I-esc;wlt 111;11 \i i l l co~tti~luc: 10 ~~trmslos
devclopnlent il l the otlier nlai-kct scglnents.
5.3 I l l I M A I * 0 l N r l l N S l l A l l l ' l ' l S l N O N I3ANKS
SALE
As co~ripetition continue to increirse i l l tlw conimcr~ial hiking
environment the need also arise for the banks to seek for ways lo (3 rnasimizc sale. The batiks 11avc tliescforc continued to tlcvclop tcchriiqircs
eSSective advertising over a pcriod ol' time CI-cates ieceptivity to the
bank's services. Therefore by intensive advcl-tisitlg, they could be able to
increase their sales. 'I'he findings oi' the study as analyzed i n table 4- 10
cor~lirriicd that intensive advcrting I w c p s i t ivc impact o ~ l t llc salcs of
co~ii~~iercial banks.
Moreover, the views of I<ussel Collcy qrwtcd i l l I lilar-). ( )/oh ( 1008
p.158) stated that: "Advertisi~ig create the right 111ctal and a~titudi~~al
fi-me that will bc conducive to eventual corlsumcr patso~lage.. rI'llits is
more or less a confirmation of this finding.
E.U, Ihemedu ( 1 994 p.3) in agreeing with this fact, says tliat this stratcgy
was recognized long ago by the "Big Three", Fist Bank, URA, and Union
I h r ~ k . And totlay, tlicy ;wc l~or~scl~oltl I I ~ I I I C S , no I I I ~ C I . t l~c c l r ~ : i l ~ l y 0 1 l l ~ i : ~ ~
scrvices .
They study Sitrtl~er disclosed in table 4-9 that in banking, advertising is
11ot liliiitcd to the krwwi 111cdia 01' advet-tisirig 1 ~ 1 t cxtci~ds lo tlic use 01'
otlier visible assets , atid provision ol'qiiality scsvice of the banks to insert
confidence in the customers. A customer who is well served in a bank
will market that bank to peoplc. And this will credit a trust relationship
between the bank its custoniers. Coliimercial banks who pet-sitatle
ci~sto~iiers to entrust persotitiel Iiiotiev or corporate funds to their care
mr~st also sl~ow visible wir1~11cc lbr ~ I I C scc~trity o f tlicir I I ~ O I \ C , V . 111 fl~(,:t.
111o.rt ol'tllc tic\\. gclicratio~~ I)a~~lis srlcli as: I>i;~r~iord Bank, Lc~litil I3anl~;,
Grraranty ?'ritst I3ank, Cllarterr:tJ I3a11k Conlnierce Bank etc. haw adopted
tlic corporate visibility strategy m c l Ilavc equally 1)ccornc wcll kww. 'fhc
views of' Af'olabi and Osita (1 997 p.56-57) also conlbrln this fi~idj~ig thc:y
said that " tna~~y of our baliks Iiad taken to radio, tcI~\:ision. ~ic\~pal.)c;tl. 11s
well as bill- board advertising, in most of' the riation's p~i~c.ipal cities.
Scme batiks adtlcd a new rather expensive tlinwision of advert iscnient i n r
tllc crcclion or acquisitiori o f at-cltitc:ct~~l-all~- cripli\-alillg l~,rnl~cl~ ol ' lkxs
and attractive premises, sotnetirlie pt'ovitlccl with pal.kirlg :;p~c'cci.
Nwakoye and Mustayha (1998 p.Sj filrtllcr confilm ~liis. ' I ' l ~ ~ y said.
"many beautiful pieces of' architccturc i l l ~ I I C cormi~y today bclo~lg l a )
banks. Now tnagnificerit a Hank's premises, puts a Incasure of confidence
in the ciisto~ners.'Today Inany banks can be i(icnti1'icd by their r.~niq~.re
st ruct itre, liaving given their oflrlces a unicluc idcnt ity. 'fhis extetds inside
where the banking hall kept clean and ventilatcrl, cr~stolncrs arc provide~:l
n it11 convince as packing space and toilets.
Altiiougl~, ititewive advertising has posilive
banks 11ak.c to co~isidcr rlie cosl tw~iclit rcli\ti
5.4 QUALJTY OF SERVICE OF COMMERCIAL BANKS AS .A MAJOR
CONSII~ERA'l ' ION FOR C U S T O M E R S P T R O N A G E
I'lw study I-cccalctl tIiaI pliysicr~l ct~vi~-ot~rnc~~t/qr~nlity of' servo of'
corn~nercial banks has tilajor iniitrences oil their patronage. These '. L influences could be direct wllerl they related to convenielices such as
convenient locat ion t i mrikc fix casy acccssibil i t y I caw irl
transacting business with the batik.. For iristnllce, the study sliows in iablc
4.13 that 23.70% patronage of cotimercial banks is irilluencecl by
location. Sivagric ~111~1 Ginget- (1987) also ccwf'irriictl ilia1 ~.csc:~rcli I l i l ~ c
r-cpcatedly slloiv that C ~ I I V ~ I I ~ L ' I I ~ Ioc;~tiot~ is a ~ii;~jor c~tisidcr;ltiori fat'
cotntncrcial bank seicctioti and patl-onage.
O n tllc otller I~md, the physical envirotinlent of l m k s also I I ~ V C
- indirect infl~rcrice on patronage i l l tllc sc~lsc that tlic e11vi1-OIIIIIL'II~ has a
way ol'cot~l~l~u~licating with t l~c cut-rctit a r d i)tosjxctivc C ' I I S ~ ~ I I ~ L ' I - S . 'I'his I 4 impression may be true or false, but the f k t that i t has passeti tllc
f l message silently to the mind of the prospects Moreover, pcople want to
n toilct arid otllcr sl)ecializcd sct-vices they Sccl ~ c c o p i / ~ d I I I C i~id~rrct
E influences therefore has to do with psychologicnl influences, t l,c. physical .- envir-onlnent has on the banks pat~-otlagc. I ' l l ~ filldi~lgs of' the stud~r as
sllown in the analysis in t a l k 4.14. also gaiv this iridicatio~i that the I?, I,
badly located and the office br~ildi~lg vcry a~~cient
some of its customers and scare awav prospective crtstomers'..
C'o~nmercial banks there fore, ought to i~sc its ol'ticc struct ured and
locations or the convenience and appreciatio~l ol' its c r ~ s t o ~ ~ ~ c r s , stall' and
gc~ieral public. Conlnlercinl bank esyeciall\~ 11cc~1 to $ 1 I pwcl
strr~ctr~res located at straicgic plnccs. I t is cvcrl bcttcr to s ~ t c ;I co~lwcrcial
bank sllor~ltf also provide C C I I ~ L ' ~ 0 1 ' ;I tow11 ;IS \ v c I I ;IS good ~ ~ I C S I I - I ~ I I
rcach. The bank should also providt: a good package space litr both the
staff and customers. I t is necessary too for the bank to have a good bl:)arcl,
distinctively to depict the presence of bank.
Apatt fi-om the esterilal environtnent, the banks, ought also to coi~cern
the~nselves with the i~iterml parts of the building. TIIIS is bccairse the
impressions a customer gets wlle~i 11c enters the banking I d 1 determi nc
his next action, relationship with ihe bank. Moreover, a conchivc
atmosphere in the bank For csa~nple will 11ot only appeal to the customers
but will also enable t l x staff' to concentrate ~ I I tllcir job.
5.4 'PIIIC OI,I).VIZKSK'I'tIK N E W GE:NERA'I'ION BANK'TIIE:IIt
L)II.'I;EREN'I' UANkING AI'I'ROACII
01le striking discovered during the course of this stirdy was tlwi the
new generation banks staff were more dedicated to banks. Tile research
has taken time returned fornlcrl out illat on tllc wl~olc, 00 pcrcct~t (,I' that
those to the new generation banks staff and tllcir cirstomcrs were duly
filled and returned while it is not so with the old ge~~cratio~l ones
I'c~.so~l;~l obsc~.\.i\tioll cat t ~ctl a1 111 tllc I ) ; I I I I \ \ I)ct\\ C'C'II ~ I I C 1 51 . JL I IN*
2004, left n11rch to L)c desired in tllc attituclc ol' the stall' 01' the old
C) generation to services ended to customers.
I Iliitl \\all,ctl l l l t 0 O l l C 0 t. I I lC old ~ ) : l l \ I \ ~ > 1 0 \ \ ; i 1 (15 ll1c (-lo>llw. l1t b t l l h
0 , a11d bkhcld a dl-cam betwcen a custor~w- a1111 a Il; l i i l i ~ t ; ~ l ' l ' ~ 1 ~ 1 I i ~ ! I
I Tilt: custo~~icr who was sta~ldiny 11~fi)rc ( 1 1 ~ ' ( c I I c I - \vas \\;litilly 1 0 bc
served. With a snarl to Imx voicc f'enlale tcllcr as if she hat1 seen an
apparition by forgotten asked scrioid y "liov did !wu come in'?" This
angcred the customer and an agree~uent ensured.
This is uot the kind of things to say to (me's customer i n this time
of stiff banking co~npetitiori and except Ilim to s\!;lllo\\ i t . 1 1 ) I'aci. ii IS
among "the verbal miscues a client must not Iwar fi.o~n 11%" I : ~ I I I I U I
Olayinka (2003). Agreed the ~~urnial may Ilacc apl)eilr ol' l)c..li,rc. I ~ c r
after the not-rllal bmhing 11oi11.s Ijc IlliI! I i a ~ c hew solilcb \vlwc clw
within the balk discmsi~ig business. Some wscrupulu~rs security 111;111
may ever have let him in.
Another observation fro111 a new genei-ation bank gave a recipe for
that kind of situation-- serve the cwto~ner who was inside already. How
he got in call was s o ~ ~ c d out later (ill-llouse) i f needed be. Persolla1
interview with some staff of the old generation ba~lks concerning the
belligerent nature, spoke of i l l no ti vat ion a11d work load. While that of
new generation banks staff revealed that they are \ d l motivated wliicli
make them love their job and feel a sense of pride a11d serve the
customers well.
I I ~ the cause of the str~dy, i t \vas disccnc~cd !hat t11c 1ict t l~c r ~ c w
gcncration banks have fully en~braccd the effective relationship strategy
wl~cre tllc dil-cctly solicit f i ~ custo~ners and got ~ ~ c r s o ~ ~ a l l y involved it1
the activities of these ciisto~ners thus creating a difference between tlmn
and the old generation ones. This strategy has really llclp tlw ~icw
5.6 H\'POrI'llESES C'ICHI I~IC:l'I'RON
Haviug enumerated the postulated Ilypotlmes at tlic carly stage of
this research work, the aim llerc is to subject t
tcsts with a view to accepting to re.iecting
hypotheses would be picked one by one.
5.6.1 Testing I lypothcsis 1
hein to rclevant statistical
tlic~ii. 111 h i u ~ this, the
I , '1-he cotii~nercial I~aliks ~nat-kct ing stratcgics d o not I~a\.c.
positive impact on their ability to gencrate profit.
IiA Thc co~n~ncrcial banks ~nasketing strategies I w e positive
impact on their ability gcrlcriitc profit.
Where H, represent the null I1ypotllesis and HA the alternative
hj~othesis. In testing the above 11ypothesis, the researcher used the data
collected from the responses to questiori 9 of the questionnaire
administered to tlie staff of the selected coln~nercial banks under study
(See Appendix 1 1 )
Question:
Decision Rules:
Reject the null hypothesis (110) i f x2 calculalcti is gcatar than ?<' table va l~~c
at 95% confidence level with a 0.05 level ufsignilicallcc, othcswise d o not reject H,,
'I'a ble 5 . 6 - la
Hypothesis 1 - Observed and Expectc.cl I;t-cqucnciars
I Yes 1 Response 1 N o
-- - - . - - - . - -- - - - - . - - . .- - . . . - .- -.. - .. - . . - - . . - - .- - . - .. . -.- 1 First Bank ::: /S::: - -- . . . - . - - -. -. -- - - . a . . - . - . - - . -. - .
Union Bank G . - -- - . - .- . - - -
UBA 2.5 22.5 - 3 5 .. - 1 -- . - ,.- -- ~iamond- 2 .OO 1 8 .OO 20 Hank 1 GTB Bank 15 Total 1 12A I 1 120 3::
Note: Expected values above were derived by using formula:
' I otal row x tot&~,I~iin!i~
Grand total
A,B and C were r w d represtilt iota1 row, fotal colr~~nn and gl-a~ld total
respectively.
(A x A' ) /C for I-ow 1 c o l r ~ m ~ ~ 2 - 2 .00
(I3 x A')/ C ibr row I c o l u ~ m 4 = I SO0
(i ivel~ dcp-cc of' ti-ectlom (dl) (r- I ) (C- I )
Niri~lber of row
Comment: ' I l ~ c t;~hlc V;IIW 01' X' 5 dcgicc 01' li-wdo~ii: i.c. 5 X' ~~~~i
1 1 .070 w l ~ ~ l c tllc c;~lcl~latcd valuc of' X' as s l~ow~i above 1s X' - 10.77.
'lIlc~-cli)rc, since t l~c v;d[~c ol' x2 calculated is grcatcr than the table valw
(i.e. 19.77 1 11.070) we rcjcct tllc nrdl hypotllesis wliicl~ states that
"Commercial banks strategies Iiavc 110 positivc impact on tlicir ability to
generate profit" is rejected, while [he altel-native hyyothesis wliich statcd
that "Co~nlnercial batiks I I ~ ~ I - k c t ing st rrltegies lime positive impact on
their ability to generate profit is tlicr-ehre ;~cccptetl
I .0.2 ' l ' l X l . I N ( ; l l ~ ' l ' 0 ' I ' l I I S l S 2
I I , , :Cr~storiiers lilcc cheap prodr~cts ir.rcspccti\;e of'
the spent.
H A :Custo~ners c l o not likc cl~cap products.
In testing this Iiypotliesis, tfie researcllcr used cfat;l collcctud hm
A
, Question:
Do you agree?
llsing cli-square (x') distribution to test the liypotlicsis;
not reject 1-10
Union ( 3 1 3.11 I l 7 Bank I I I
Diamond I 1 1 4.36 1 27
Bank 1 Zenith I 2 3 . 8 9 1 2 3
I
iY Orl' E : Tlie rorniula for espectcd valr~e is thc same as in i ly~wtliesis
TABLE 5-6.2B
Comment: From the above table. the calculated value of'x2 = 12.995
Therefore, since l2.995O is greater t h a ~ 1 1.070 (i.e. 12.9950 1 1.0700)
wc re-ject the null .l~ypotlwis whicli states t11;it C ' I I S ~ ~ ~ C S S like clie;tp
products irrespect ive of' ti me spent for i t , a d accept the alternative
hypothesis wliich states that customers do not like cheap products .
5.6.3 TESTING I-IYPOTHESIS
1 : Intensive advertising in con~~nercial ba~iks as jmmotional strategy
do not have significant Impact o n thcir sales.
(>ocstiun:
Inletisive advct lisitig ol'llic banks has tio signilicant iliipacl OII i15 sales do yuir
agree?
IJsiiig the chi-sqrlare distribution fbr the test
Dccision Rule:
Reject the Null Ilypotllcsis of X' cnlculatctl i s greater tl~au 1 1.0700,
olllenvise do not re-iect 1 I,,
..-... ....
First Dank 1 3 3 .35
Table S.6.3b
Ilypothcsis 3- An~lysis of tllc Kcsl~onscs
I I;,, ..-
lie I (FO-FF)
* - - - - .--I I8 I f ; I -0 15
collected fiom the responses to qrlcst ion 5 ol' t l ~ c rl~lesl iorwaire from
Question:
"The quality services of the balk is 1 1 0 1 a I o ~ ~ i i s ~ t i ill
square distribution for the test i .e .
x2 =
Decision Kulc:
Reject the null
otherwise d o no1
I~ypotl~esis I I , , if X' calculatcd is greater i l l a l l 1 1.0700
wicc:t I I , ,
Table 5.6.421
Hypothesis 4-Observcd and cspectcd frccpcncies
4. FBN Plc (2000). Monthly Business And I~ccmo~iiic I<cpc)~-t, a
5. AIol:~bi. 1. A, ~ I K I Osila( I 007 :): ~\-II~?I.~~s!.I~Ic.{~I.I.~II-.~~~.~~.. Q!. Ccmpetitim 111 thc N i ~ ~ 1 . i i 1 13a11I,in~! l115111st I;!:. I : \ ! I : !,:.. NIll(.' --A .I--.- +.-- ----- - ---. - - ,.
0 Q~arlerly, Vol. 7. March 1007. N t ~ l ~ t w I . I < c s L ~ ; : I c ~ ~ I l .k~~l. r.11' NIIIC, Nigeria. P.56-57. w
8. Modern A.R.(199 1 ): Elenlent OF Markctinc, l.,o11do11 Dp Publicatioils.
9. Pride, U .M and Ferrell 0 .C .( I997):Mi1~:h~t irm ,-- Ihlston. I louglltoll.
I 1 .~bhoda~l le ' ,.J. U . (I997):SaTe and Sound Banking Practices 111
Nigeria, (Selected Essay), Lagos: Page Publishers Ltd .
13.CIia11non, D .F ( I : Banks Strategic ManagementawJ Marketing, Cldwster, .lo1111 Wiley and Sons.
sustain the loyalty and confidence of crlstomcrs ss well as to woo new
patroliagc.
Each of these strategies, Iiowever, Jim its 011 11 I W C ~ I I I ; I I I I I ~ ~ ~ I C I ~ I . : ~ 0 1 1
patronage of'tlle bank services as well as colitl'il)i~tcs il l 11s ulllclrle way lo
tlic overall sl~l-ci\~al ol' the bank in tlic co~npctitivc environil~crit. I! t \ ' i )s
tccl~nological i~lnova~ion i s a very good ~ilnrketing strategy ;IS i t workt; lipr
customers satisfactio~l and b a ~ k inter(:st..
It achieved this by comt)ining several processing act i v i t ics arid
performi~ig them at a faster speed. T'lirrs it helps to processi~ig activities
and give faster disscminatio~i O F inf~~r~nat io~i to custo~ners. I n this way
quality of service delivcry as well as ensurc operational efficicwy. It c w
ef'fect ive because it requires only few workers to perform balking
operation and it also offer ample upporturlities for banks to provide
innovative service. I~iability to computerise ballking operat ion has also
bee11 identified as one of'tlle cairse of' poor yrof'itabil i t y iri banks.
The constraints Ilowc\w banks will l k c with a u t o ~ l l a t ~ t l olwnt ~oii
i n 0111. c~ivit.o~mle~it is the problem of itregular electricity supply NEPA
and poor telecomlnunication. 'I'lie banks liavc to own gencratil~g set to
back up NI'PA supply of elcctricit!: so as lo bc able lo ~rlnkc: tlw
~naximuln bcncfits from coliipr~tcriscd opcriit ion.
Tlic banks slior~ld also bc awiirc that co~lipr~tcr Sraud is ~iot only
rising in value but is beconling Inore sophisticated. As con~prltcrs become
riiorc widcly rlscd, tllc li-arldstcrs also po\v iri r i r r ~ u l w . 13;inl\s ;~lso i )avc it.)
tiikc app-opriate ~neasrlres i n prVevel~ting tllc liegalive effects n)av Iiaw on
their br~silicss. I'he filidillg 01' the study also revealed that product
development in co~nmercial bank is intended to enhance their sourccs of
deposits mobilisation. Altliorlgli tlic st r d y revealcd that product
tlcvelopment is a verital~le \\Jay ol' pmcralll~g tlcposits I I I cc\~nrlic~l:~;ll
banking. However, the findings further sliow that crcciit card service
offered by tlie bank do not elicit crrston~ers satisfaction, and as a result
they perlim: bclo\\, cspc.clatio~l This ic I,::: ;\rlw l l~c 1);mLs (lo nc:t stud! o tl~cir'target ~narket, before dcvcloping mid par*l;i~;g 1 1 1 1 . c . ~ ~ * ! l ~ f cald
I products atid pusliilip tlieni to the ~ii:~rkct. 'l'liis sil~glc I'actw I I ; I \ 8: (Icn~cd
the banks of the colnpetitivc edgc they sccli from such p roc l~ t s i t is
therefore stressed that the new plmlrlct dcvclol~ilc~it prucess remain the
approach for developing srlcli new products h n k tilust study their group,
tllcir life style, spending habit, financial status and otlicr vital fact that
would assists to determine the viability of' the 01-odr~ct l w n g dc\&qmi
arid packaged for the custoriiers before l c l i i wch prod~~ct.
Successfi~l market segmentaticm has brortglit a lot of' intio~ra~iw pi-od~~cts
in recent time. Inl~ovation Iwwever, do not OL'CIII- accidctit, 111cy are a:;
result of carelill study of !he crlsto~ners illld bank setisi~iv~ty to !heir
potential needs. The finding also disclosed that product ideas sometimes
do come from competing banks, in a bid to lure loyal customers away
l'rorn their traditional bankers. No mattcr where tlie ideas come from they
have to be sif'ted to detcrnline (hcir viability and ability to meet custo~ners
~lccds. I t has also been a k~irnw l i l d that cl'tkctivc atl\utisl~ig o\lc~; a
pcriod oft inic cl-catcs rcccptivily to t llc i m k ' s SL'I.VICUS.
Tllcre had always bee11 the erroneous believe that customers like
cheap products and do not like paying for quick service. nut a rna,jor
findings sliowed illat this believe is incorrect as customer do no mind
paying a little ~riorc an(! gct quick serkice.
The new generations banks such as Dia~llond Bank, Zenith bank
,Guarantee Trust Baiik and Cliartcrcd Dank corporate visibi!it y strategy,
and relationship strategy and tlicsc strategies have been very successfid in
co~nbating cowpet ition.
i l w a s also found that quality of services is a ~najor corlsidcrittiorr in
cr~ston~er's clioice of tlie hank. It was discovered both attract cussoliiers.
'The fact is that if'a bank premises is badly located and tlie office building
very ancient such a bank may l o ~ s c some of its customer-s. and scare
away prospuctivc c~~sto~iicrs. A balk I r t l ~ t i ~ i l i ~ ~ ~ i d i i t i r i p
environment but render bad service is as bad as a ~nuslir.oo~ii. 13ariks 1111.1t
have realised this fact have contiliued to pay 11io1-c ~)rerniuni to their
c~iv i ro~l~~ie~l t makitig i t : ~ I ! i x t i ~ c a i i d p o \ i d i ~ i ~ : tlie c o ~ i \ m i c ~ - ~ x
and appreciatio~l of their cus to~~lc~s , stall' a r d the pmcral pr~bl~c. 'l'licy
should be Iocated'at strategic locution, \\/it11 good signboard, the interior
part should also be well fi~rnislied as tlie i~iipression this will give to
cr~stoliier
will determine their future relationship with tlic banks.
The Diversification strategy of the banks ~nakes i t possiblc liw hanks to
break now grounds and take over tlie ~narlict casily.
r
colnpetitivc br~si~less mr~cll I I I ~ I . ~ ;I h;u~J\ing I I I I S I I I U S S .
Morden's idea of cr~stolllcr scrvicc cf lkct t~c~~css wllcl-c stall' or 11unia11
resources development is the the best is HI^ i d ~ i ~ l i l l otlier lo gct the best
of service from tlie work force. A high molivated work force will give
their best in providing even ancillary scrviccs to satisf'y crtstoniers , this
I n deed, competition in the commercial banking environment liavc comc
to stay, the strrlgglc anlong bauks lor survival have bcco~nc a continrror~s
one. Tlie custonler remains the king, and the satisfaction of the king also
remain the goal and the justification of any operation in the com1nercia1
banking environment. This is because the success of any bank (Icpend
invariable on how it serve him and to satistjl h im requires staying closc~.
to him. 'l'hc satislilctio~i of' tlic custo~iicr o1'11iust be done profit. I t is nou
left for tlie banks to devicc s\~rvival strategies.
1t is equally necessary fbr the bank t o illvcstipte t I ~ c of 1 1 ~ 1 - hallli
competing in tlie sector a~id how they are positiwi~lg tllc~ilsclvcs \v I i i~ I i i n
essence is trying to understand the conlpetitioll ovcrall strategy. 'J'llis will
I n spite ol'tlic size of' tlic olcl gct~cl-atiori Imks, tllal ci~n st111 use tllc
I-elationsliip strategy to their advarltage just like the Iiew o ~ c be employ
my Iiands and assigning acco~~nts to tlienl
I 3 Kli;COMMli;L)A'I'ION
Base on the finding of tlie study, tlic fidlo\\ ing I C C O I I ~ t~icti(l;lt i o n s
are made:
( I ) Since tlie results of' tlic I'i1i~111ig sIio\\ s I l l i l l \ aluc card
services of'l'erecl by tllc banks ol'tell elicit customers
satisfactjo~i, tllc ba~lks slio~~ld imp-ove on i t . l h ~ l l . ; S I I I . N I I C I
also knock out no~i-perfor~ni~lg proili~cts withi11 their
portfolio and replace them with good ones.
111 developi~ig new service to replace the phased out product,
the banks should rely on the product development processes.
Customers should be tnade to participate in the
((,)'lIla( thc old g c ~ ~ c ~ - i ~ l i o ~ i I ~ a ~ i k s slior~ltl c ~ i i b ~ ~ i ~ x i l~c C ~ I I ~ I ~ ~ ~ ~ I I I C I I ~
approach of tlic ncw generatioil banks.
Above all, the ba~iks sl~ould study thc cr~stomcr ~ I ~ V ~ I O I I I I I C I I ~
carefi~lly before applying any sil-ategy so as to maxiniise lllc
expected result from the strategy so adopted.
6.4 RECOMMEiVDArI'ION FOR FUHI'HEK STUDY
In view of time, fitlance data collection and othcr constraints, this
research was limited to all appraisal of tnarketitlg st n~tegies i 11
cotn~nercial banks, Li~rtlw rcscarch studics sliould t)e dircctcd at
investigating.
1 . Citsto~net. '~ c\~aluat ioli of coiii~iies~ial I~a~ iks xi\- c ~ f isin:!.
2. I'roblet~is of' p-oduct packagil~g in co~rll~icrcial batiks.
3. S i x as a tliSSc~~eticc bctwccn the old and ticw pmcmtio~i
banks banking approach.
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Cliannon, D .F ( 1 992): & ~ i k s Stratevic Management and Markctitig, Cllcllester, .lo1111 Wiley and Solns.
Csosse and I lampel ( IOW): Managerne11t Policies for Co~nrriercial Banks, 3'" lid, New Sarscy, Iknticc. USA.
.Enyinnaya ,C. ( 1992) ---.-- Practice of R a n k i ~ ~ O r m a t i o r ~ : Lagos. 1)act. Publ iclier, Nigeria.
Evans, .I. K. and 13onna1i. U.( 1937): Markcti~u, 3"' Ed, New York, Mc- Millian.
Kottler, P.(1994): Marketing Mana~e~nent , Amlyxis. I~Ianni~ig Inqde~nentation an(1 Control, New Jersey, Prentice Hall l n t .. IJSA.
Mart i n 'I'. ( 199 1 ): financial Serviced Direct M~~&ctj!ng, I Jondori; Mcgraw I Iall Book Company 1' 18,102.
Nnabuko J.O ( 1908) : b l d w t i n ~ Ma~a~emcl l t , Enitgit: I'recisioti pri~ntcr 5
and I'ublisliers, Nigeria.
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Pride, U .M and Perell 0 .C .( I907~Marketi11~, Boston, I loughton. P
Swayne L arid Ginter W. (19991.: Cases 111 Strategic r\/lal~I~c:ti~i~, Ncw Jersey:Prentice 1 Iall, I t i t . Edit ioli USA
Alao, S . (2004): L'C'olmiercial Uanks I'osit~oli 111 N1gcria."L,3gos. Bi~si~iess I'inics, Marc11 LO- April 4.
Abolo, E. ( 1998): Profit Growth Str(?_tezies for Banks, Lagos. Business Times. Jau. 26'" .
Hassan C and Oluyelni K , ( 1994).'New Balrking', h g o s ; Tl~c C;ual-dian. February 9.
Hillary 0. ( 1988): Serviccs Marketing Strate~~~ies, L,agos, Business 'I'i~llcs, Aug, 24.
. l o l~n~ I!.( 1002): "S~~rvival Stratcgics for I ~ I J S ~ I W S S ~ ' , I ~ i i ~ a i ~ ~ c i ~ ~ I - , ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ! , Aug. 25 .
Oglntadc M A . (1987): Marketing Of Ranks Sct-viccs, Lagos Ihsiness Times, Feb,2, P.7. I d . Nigeria.
Okeke Marcel (2004).' Banking, New Innovation, Fresh C h a l l e ~ c s ' , 'l'lte Guardian, Tuesday, April 6 .
Peter Y .O ( 199 1 ) Goodye to A r ~ n c ~ I ~ ~ ~ L a g o s , The Financial Post, Vol. 3 N o 18 April. 2001 IT Co~nmr~~lication Ltd. Nigeria.
URA Plc, (200 I ) . Bmking Annual .
Wliicli of these grot~ps do you belong'? r -
(a) Maringemcnt Staff I-- 1 (c) i l i i ~ i ~ r ~ t i ~ l i ) - j (b) Sctlror Stall'
Do you think strategizir~g is importatit for batlks s~~rvi\~;ll i i l tIw face of colnpeti tion?
Is cornprterisatioi~ tccl~iwlogical improvelnent part of your banks marketing strategy'?
If yes, why was tile opcratioli ol'tl~e batik coliiprtterized? 7 -
Iloes your bank offer online (Electroriic) Ranking service'?
Does the Bank often introduce new products (sc~.viccs)'?
(a) Yes (h) N6 i 1
(c) To increase the banks source of' deposit mobilisation C 1 Do srlch new service often encoiiragc rlcw patroni~gt.'.?
(a) Yes r i (I)) No L!
(a) Poor Rescarch
(b) Inability to study the customers before developing prodticts
(c) wrong product positioning
(d) 1 1 1 cl'fkct ivc advcrtisitlg ~illll[)aigll~
Do the bank promote (advertise) its services?
(a) Yes
(c') 7'0 educate the public about the bank and its u~iiyueticss
;Fyt;ee; pat[u~ge'? ) No [ --I 17. "Tlie intensive advertising activities of the I ~ i ~ l c has no
The qi~estiont~aire is designed to cnablc m u gcricr.;ite data to hc weti in the study,. I tlicref'ore soIicit for yorrr I-cspo~ws o ~ i llic qr~cstiori containr:d tlicrciri. I assure yo11 Illat inf'orltiation obtaiticd will tx usctl solcly Sor :~cademic work and will be treated as confideiltial.
l'lease fell vcry free to give my addition infixniation, t \ l i i c , l i 111 yaw. opinion woi~ld help in tlic rcscarcli.
GUIDELINES: please tick (I), O N E BOX ONLY
1 . Which of tlic co~nrncrcial banks do you patronise?
(a) First Bank
2. How did you know about the bank? through
(a) Advertising [ I (c) Ikisorial Observation r' -1 L -l
( 1 ) A cwtcmer (Friend) r -1
3. Whicli cl~:trlrlel of the I3ark's Advertiselilcrlt ol'len appeal to y c ~ ? r- -I
(a) Radio L J (d) Newspaper
(b) Television r i (e) Magazine
(c) f3ill Board 1- .-I
r i
Advct-t isenretlt I-: - I Locat ion /I
lity of Services of' the consideration in your choice of the bmk" I >o you Agrcc?
7. Do you prefer conlputcriscd operation to ~nanual s y s t c ~ ~ of banking
operation?
(a) Yes L- -1
8 . Do you think compr~tcriscd opel-at iorl ilnprovc the quality of
scrvice dclivcry in t llc h k ' ?
(a) Yes
0. Is tl~c bank you pstronisc online'? r..- . .-.
(a) Yes [ I1
12. If yes how do you see such new serviccs? Do they oflen ;~ppcal t o
you'?
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