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.

A~ldrew, K. (2002) : l'he I3auk Marketing I Imdou!, 3"' Wood I-Ieard .Faulkner Limited. USA.

Bower, M .( 1970): (.Yompanv Stratcgy, NC\Y YO&, Mclnilliali I'ublisl~crs.

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.

Nwalrkwo, G.O.( 190 1 ): I3mk Ma~~aggncnt Principles and l'ractiws, I.,agos, Maltli l lortsc I'rcss Ltd.,l'I 1,228.

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

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