MARKETING STRATEGIES IN THE NIGERIA BANKING INDUSTRY (A CASE STUDY OF COMMERCIAL BANKS IN UYO METROPOLIS)

ABSTRACT

This research project on marketing strategies in the Nigeria Banking Industries in Commercial Banks in Uyo Metropolis has been critically designed to offer strategic and tactical strategies for marketing or Banking Services in Uyo Metropolis. The importance of marketing strategies in the Nigeria banking industries cannot be over emphasized; since clearly and good marketing strategies can help ensure a banking services in Uyo Metropolis, while at the same time satisfying customers and therefore contributing to more effective operation of the micro and macro system of Nigeria. The study attempted to highlight a peculiar marketing strategies that should be adopted by these banks. More so, the need for directional focus or the core customers has also been highlighted to boost their success in the industry. Already, the study has grouped the subject matter as demonstrated in the introduction, state of the problem and formulation of hypotheses. Appropriate research methodology to problems being investigated has also been adopted. The researcher has also presented and analyzed the data logically and meaningfully with a focus data interpretations. A comprehensive review of related literature has been incorporated in this study to widen understanding of readers/users. Data has been presented and analyzed using simple percentage method and chi-square probability test. Appropriate referencing style, correct grammar format and modern typing device have been adopted for the study. A simple sentence structure has also been adopted for the explanation of fact to faster understanding of users. Above all, this research paper would hopefully contribute immensely to business problems solving, if the recommendation proffers in chapter five of the study are properly utilized. Finally, the following recommendations were made: that effective marketing strategies should be adopted by the commercial banks in Uyo Metropolis, that various marketing oriented products should be offered to the customers, that minimum interest rates should be charge by the banks and the customers; relationship profile should improve.

CHAPTER ONE

INTRODUCTION

1.0     Background of the Study

Before the Mid-1950’s banks had no understanding or regard for marketing because they were supplying needed services. Marketing came into banks in the late 1950’s not in the form of “Marketing Concept”, but in the form of advertising and promotion concept. The financial institutions especially the banks feature prominently in competitive economic atmosphere principally focusing their operations in the marketing of their services to the general public.

However, some of these services include among other, the granting of loans and overdrafts, issue and purchase of securities, provision of sate depositories to customers as well as facilities for making payments through bank notes and cheques. It is therefore a simply obvious that an institution like bank should evolve sound management techniques coupled with effective marketing and services strategies within its socio-economic and political ambient. It also follows that certain operational problems may try to impinge on the efforts of the Bank to stand firm amidst the winds of economic vacillation and constant policy changes.

But in recent times, marketing is playing a very important role in the development of the Banking industry and the economy generally.

According to Akpan, 199:12, a Bank is defined by BOFID, 1991 (Section 61) as an institution licensed to carry on banking business which the same defines as:

The business of receiving deposits on current account, savings accounts or other similar account, paying or collecting cheques drawn by or paid in by customers, provision of finance or such other business as the Governor may, by order published in the Gazette, designate as banking business.

          Banks serves industrial markets and ultimate consumer markets. These two markets can be subdivided into five main types namely: the governments and the public sector, the private sector, the commercial sector, industrial and lastly the international markets.

          Meanwhile, one of the major problems in Nigeria’s banking industry today is how to identify and satisfy customers needs and wants profitably. Commercial banks which are the focus of this study have not fully integrated all the marketing strategies into their banking operations, and some of the banks still find it difficult to change their system of operation from the existing traditional banking practices.

          Furthermore, the banking industry in Nigeria has not really considered a possible marketing strategy as a crucial element in their operation. The reason for this could be because banks are in the ‘sellers market’. Instead of banks prospecting for accounts, and maintaining good relationship with them, the customers have to look for banks which are contrary to what are obtainable in the banking industries like America.

          Applications of marketing strategies are a welcome development to some of the banks like First Bank, for instance their new product “First Money”.

          It is important at this point to note that commercial banks have not fully integrated all the marketing strategies into their banking operations as customer are seen to be queuing at the banks for hours before they could get any service. The First Bank of Nigeria (Plc) one of the leading Banks in the marketing of Bank services has taken various strategic steps in a bid to improving its marketing operations and liquidity strength, customer relations, credibility, and effective participation in the resuscitation of the economy. Suggestions and recommendations will also be given to the possible way of solving the various problems affecting the marketing of banks services within the system.

          This research titled “Marketing Strategies in the Banking Industry” intends to look into the various marketing strategies open to commercial banks and strongly believed that these banks would tailor their operations towards customer’s orientation.

1.1     Statement of the Problem

          As noted earlier, the major problems in Nigeria’s banking industry today is how to identify and satisfy customers’ needs and wants profitably. How to identify the various problems affecting banking operations in Uyo Metropolis and ways of effecting positive changes in banking operations.

The Banking industry has been identified over the years as having the potential of transforming the basic economy of any community, state or nation, if properly established and well constituted, controlled and managed. In the banking industry today, certain problems affected the effective and efficient services; thereby preventing them from achieving their target aim.

One of the major problems in the banking industry is the poor customer services shown by long but avoidable delays in accomplishing simple transaction. These transactions range from encashment of cheques, opening of new accounts to processing of loan and overdraft applications. This delay of services is obviously detrimental to office owners, international businessmen and students, as they sneak out of their different places of work to withdraw some small amount of money.

Secondly, it appears that banks are face by incompetent staff carrying out infection transactions. This is because staff are not employed by merit rather they are more often employed by god fatherism.

Another problem is the need to bring to the fore, a thorough understanding of the impact of marketing of bank services in the quest for continuous relevance and survival by banks.

Finally, there is also the problem of the banks to turn the economic table around effectively, if the courage and the prudence are present to propel them into action.

The commercial objective of banks is to maximize profit, if their operations are not well coordinated with effective marketing strategies.

          However, marketing strategies seem not to have been fully employed and the various marketing strategies may not have been exposed to the banks in Uyo Metropolis. And this makes customers to wait for hours before they could get services in the banks. This research is therefore conducted to prove the practically of marketing strategies in the banking industry of commercial banks in Uyo Metropolis.

1.2     Objectives of the Study

          For any research paper to be complete and at the same time posses some level of validity, some objectives must be set and standardized. Based on the statement of the problems for this study, the following objectives were set to guide the research process:  

  • To identify the marketing strategies being used by banks in Uyo Metropolis.
  • To identify the various marketing orientated products offered to customers by banks in Uyo Metropolis.
  • To investigate into the various interest rate charged by and offered by banks in Uyo Metropolis.
  • To investigate into the branch distribution network of the banks.
  • To investigate into the promotional strategies of the banks in Uyo Metropolis.
  • To identify the various promotional media used by banks in Uyo Metropolis.
  • To investigate into the bank/customers relation profile of the banks.
  • To identify the various problems affecting banking operations in Uyo Metropolis.
  • To make recommendations that could help improve the operations of the banks.

1.3     Research Questions

          The following research questions were formulated to give direction to the study.

  • What are the marketing strategies being used by banks in Uyo Metropolis?
  • What are the various marketing oriented products offered to customers by banks in Uyo Metropolis?
  • What are the various interest rate charged by and offered by banks in Uyo Metropolis?
  • How effective is the branch distribution network of the banks?
  • What are the promotional, strategies of the banks in Uyo Metropolis?
  • What are the various promotional media used by banks in Uyo Metropolis?
  • How satisfactory is/are the customers relation profile by the banks?
  • What are the various problems affecting banking operations in Uyo Metropolis?
  • What are the problems that hinder effective operations of the banks?

1.4     Research Hypotheses

          To actually determined whether commercial banks in Uyo Metropolis do carry out any marketing strategy activity and how successful such, activities have been, the following research hypothesis were formulated to be tested.

  • There is no significant relationship between the marketing oriented products offered by the banks and customers satisfaction.
  • There is no significant relationship between the interest rate charged and offered by the banks and customers satisfaction.
  • There is no significant relationship between the promotional strategies of the banks in Uyo Metropolis and customers satisfaction.
  • There is no significant relationship between customers satisfaction and the level of profitability.

1.5     Assumptions

          For the study, the assumptions made included:

  • That any respondent so selected to take part in the study should have at least reached the maturity age of eighteen years to fully understand the issues under discussion.
  • That such respondents so selected should posses a formal education not less than a First School Leaving Certificate and above.
  • That not less than 80% of the questionnaire given out would be given correctly filled and returned on schedule.
  • That the questionnaire so returned would contain information or relevance to the study in order to be able to meet the objectives so set.
  • That the research report would contain a measure of validity to guarantee possible marketing strategies carried out in commercial banks in Uyo Metropolis and beyond.
  • That the research report would be timely ready.

1.6     Significance of the Study    

This study would not have been necessary to conduct if it could not contribute to the development of knowledge and help solve some underlying problems.

The ultimate goal of any industry concerned is the minimization of the firms product or service sales hence profits. This goal would only be achieved in the Banking Industry through an application of effective marketing strategies in their operations.

For this reason, it is believed that the research report would be very useful to the Banking Industry and to the commercial banks in particular in Uyo Metropolis and beyond.

The study would enable the banks to regulate their marketing mix towards the satisfaction of varying needs and wants of their motives.

It is hoped that the research would act as reference material to those in the marketing/business research profession and would be of great value in the development of the profession.

Lastly, the report would be useful to other students who might wish to carry out research in this field or relevant ones as it would provide them with the needed reference materials for further study.

1.7     Limitations and Scope of the Study

          As a result of the shorter duration of time within which this study report was expected to be submitted, some prevailing circumstances, factors and problems, it only had to concentrate on the marketing strategies in the banking industry of commercial banks in Uyo Metropolis.

          This research is designed to give an insight into the application of marketing strategies in the banking industry.

          The research was constrained by the following factors, Time Material and Cost.

Time: Time placed a significant limitation in the conduct of this research. A study of this nature could have better been handled within two semesters but the short period the researcher had to carry out the study greatly affected its scope and general exercise.

Research Materials: The lack of materials for this study also equally, limited its scope. Such materials included reference works done in the field and related fields as well as the writing materials required, to put out the report virtually in all Universities across the country today, the Libraries are sometimes not stocked with outdated reference materials. The researcher therefore had much problems locating some, source materials. Therefore, the books in the University Library and relevant marketing and banking journals were used in the analysis of the research.

Cost: Another limitation of this study was finance. Research work involves a lot of money to set into the field and to purchase materials. Financial constraints which is typical of this ‘soppy’ era also limited at ability of the researcher to conduct a more ambitious study. Also, a lot of money was required to reach the respondent who could not be available as many times as the researcher visited them.

1.8     Organization of the Study

          For the purpose of clarity and simplicity this research study was organized into five chapters.

          Chapter one which was the introductory chapter contained the statement of the problem, objectives of the study, research questions, research hypotheses, assumptions, significance of the study and the organization of the study.

          Chapter two dealt with a review of related literature and unveiled what authorities in the researchers area of the study may have said about marketing strategies in the banking industry.

Chapter three, presented the design of the study, which included introduction, research methodology, instruments used for data collection, population and selection of sample and method of data collected.

In chapter four, the data collected was analyzed and interpreted with the use of tables and figures to fully explain the findings.

          Chapter five, being the final chapter justified the study with data analyzed in the previous chapters. It contained the summary, conclusions and recommendations.