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OKOYE, SYLVIA C.
PG/MBA/99/30815
PG/M. Sc/09/51723
APPLICATION OF MARKETING CONCEPT IN COMMERCIAL BANKS (A
CASE STUDY OF DIAMOND BANK LIMITED, ENUGU BRANCH)
MARKETING
A THESIS SUBMITTED TO THE DEPARTMENT OF MARKETING, FACULTY OF
BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA ENUGU CAMPUS
Webmaster
Digitally Signed by Webmaster’s Name
DN : CN = Webmaster’s name O= University of Nigeria, Nsukka
OU = Innovation Centre
MAY, 2001
APPLICATION OF MARKETING CONCEPT IN COMMERCIAL BANKS (A CASE STUDY OF
DIAMOND BANK LIMITED, ENUGU BRANCH)
BY
OKOYE, SYLVIA C.
PG/MBA/99/30815
DEPARTMENT OF MARKETING
UNIVERSITY OF NIGERIA
ENUGU CAMPUS
MAY, 2001
APPLICATION OF MARKETING CONCEPT IN
COMMERCIAL BANKS (A STUDY OF DIAMOND BANK
LIMITED, ENUGU BRANCH)
BY
OKOYE, SYLVIA C.
PG/MBA/99/30815
BEING A PROJECT REPORT SUBMITTED IN PARTIAL
FULFILMENT OF THE REQUIREMENTS FOR THE AWARD
OF MASTER OF BUSINESS ADMINISTRATION(MBA)
DEGREE IN MARKETING
DEPARTMENT OF MARKETING
UNIVERSITY OF NIGERIA
ENUGU CAMPUS
CERTIFICATION
Okoye, Slyvia C, a postgraduate student in the Department of Marketing
with Registration Number PG/MBA/99/30815 has satisfactorily completed
the requirements for course and research work for the degree of Masters of
Business Administration (MBA) in Marketing.
…………………………… ……………………………
Prof (Mrs) D.A. Nnolim Dr. (Mrs) J.O.Nnabuko
Supervisor Head of Department
DEDICATION
I dedicate this project, most especially to Almighty God who has
made it possible to see me through the course of my study, to my
dear mother, Mrs. F. N. Okoye, who has assisted me both morally
and financially and also to my brothers, sister and dear friends
ACKNOWLEDGEMENTS
I shall start by thanking Almighty God for his infinite blessings and
guidance throughout this study.
This project was carried out in fulfillment of the requirements for the award
of Master of Business Administration (MBA) Degree in Marketing.
I am therefore thankful to the University Authority for offering me the
opportunity to gain this experience. At the same time, I would like to express
my profound gratitude to my project supervisor, Prof. (Mrs.) D. A. Nnolim,
for her motherly guidance and counseling throughout the course of writing
this paper.
Finally, I am using this medium to express my sincere gratitude and thanks
to my mum and friends, all those who in one way or another, have
contributed to the successful completion of my course of study in this
University.
TABLE OF CONTENTS
PAGE
Title Page - - - - - - - - - ii
Certification - - - - - - - - - iii
Dedication - - - - - - - - - iv
Acknowledgements - - - - - - - vi
Abstract - - - - - - - - - viii
CHAPTER ONE
1.0 Introduction - - - - - - - 1
1.1 Background of the Study - - - - - - 1
1.2 Statement of the Problem - - - - - - 6
1.3 Objectives of the Study - - - - - - 8
1.4 Formulation of Hypotheses - - - - - 9
1.5 Significance of the Study - - - - - - 9
1.6 Limitation of the Study - - - - - - 10
CHAPTER TWO
2.0 Review of Related Literature - - - - - 12
2.1 Background Information (Historical Perspective) - - 12
2.2 The History of Diamond Bank Limited - - - 14
2.3 Definition of Marketing Concept - - - - 15
2.4 The Application of Marketing Concept in Financial Institution 16
2.5 The Role of Marketing Management in Banking - - 17
2.6 The Marketing Concept as a Survival Strategy in Banking Industry 21
2.7 Application of Marketing Concept as a Panacea to the Over
Concentration of Banks in Urban Centres to the Detriment of
Rural Areas - - - - - - - - - 23
CHAPTER THREE
3.0 Research Design and Methodology - - - 27
3.1 Research Methodology - - - - - - 27
3.2 Method of Investigation - - - - - - 27
3.3 The Sources of Data - - - - - - 27
3.3.1 Primary Data - - - - - - - 28
3.3.2 Secondary Data - - - - - - - 29
3.4 Population/Sample Size - - - - - - 30
3.5 Data Presentation - - - - - - - 30
3. 6 Data Treatment - - - - - - - 31
CHAPTER FOUR
4.0 Data Presentation and Analysis - - - - - 33
4.1 Breakdown of Questionnaire, Sample Size and Analysis 33
CHAPTER FIVE
5.0 Results and Discussion - - - - - - 45
CHAPTER SIX
6.0 Summary of Findings, Recommendations and Conclusion 48
6.1 Findings - - - - - - - - 48
6.2 Recommendations - - - - - - - 50
6.3 Conclusion - - - - - - - - 52
Appendix I - - - - - - - - 54
Bibliography - - - - - - - 58
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The manufacturers of consumer products in Britain were the earliest to
prosper. This was necessitated by their firm believe and adherence to their
Business Philosophy which says: ‘‘You must give people what they want;
the right product at the right price, in the right place at the right time and
with the right promotional tools”.
The Institute of Marketing defined marketing as satisfying customer
requirements profitably. Kottler defined marketing as “customer orientation
backed up by integrated marketing, aimed at achieving organization goal”.
According to him, the purpose of business is to create and keep a customer.
The objective of the marketing process is profitable sales of services that
satisfy customer financial requirements and need. The organization should
learn to stop looking inwards at the company and concentrate on the outward
aspect which is the customer’s with the sole aim of satisfying the customers.
Organisations should stop thinking only about producing goods and services
and selling them to satisfy customers’ needs.
Drucker, one of the world leading writers on business management made
the importance of the customer and the marketing very clear when he said
that, ‘‘it is the customer who determines what business is”. His statement
cannot be over-emphasized, this is because the maxim says that “the
customer is always right” has its origin in the writing on economic and
social theory.
Adam Smith who was known as one of the earliest writers on economics,
recognized the importance of the marketing concept as far as 1770’s when
he stated that consumption is the sole and only purpose of all productions
and the interest of the producer ought to be attended to only so far as it may
be necessary for promotion.
Therefore, the essence of marketing concept is to eradicate:
(a) The business or organizations or firms with production as the over-
riding and main business activity. Production is only necessary in
order to facilitate the achievement of marketing goal.
(b) The communication gap that form the mass production of foods and
employment of intermediary organization for example, wholesalers
and retailers. The marketing concept services in this contact a set link,
that is to bring the suppliers (company) and the buyers (customers)
together in so doing, the customer’s knowledge about the company
and its products is enhanced. And more importantly, the company
operates with a better knowledge of its target market and market
requirements.
Drucker concluded by saying that, the purpose of a business or company
has only two fractions and these include:
(a) Innovations;
(b) Marketing
He is therefore of the opinion that marketing and innovation produce result
while all the others are regarded as cost of the company. Marketing as a
concept and a discipline is undesirably a central function of management at
all levels, and for the specialist such as market researcher or advertising
executive that might be found in marketing department.
.
Nigeria has actually been characterized by a limited number of banks since
1892 when the first Nigerian bank, the African Banking Corporation was
established. This exposed the public to only a few banks, where the problem
is not selling but producing because anything and everything sells, therefore,
leading to the total neglect of customers’ needs, which has 40 incessant
condemnation and criticisms from people in all walks of life. The most
notable condemnation came from the former President of
Nigerian/American Chamber of Commerce, Chief Ogunbanjo, who accused
Nigerian banks of financial terrorism.
But it has became pertinent that banks should move away from the sales
orientation which hitter has characterized the marketing of financial services
in Nigeria and change over to the practicing marketing concept, because of
the increasing rate of competition in the banking industry. The increasing
number of banks in Nigeria in recent times has made the environment in-
patient for stagnant banks that are hamstrung with age-long tradition.
The day is now being carried by the progressive and dynamics bankers
improving his skills at all times and is constantly scanning the environment
and developing customers’ needs. Marketing for banks therefore, is the
creation and delivery of customer oriented or satisfying services at a profit to
the bank.
Some banks consider marketing as essentially advertising and public
relations, which are only two tools of marketing out of many. Banks should
try as much as possible to revise their parochial idea of marketing and start
practicing marketing with all its components, and all techniques it embodies.
It is also necessary to stress that the tools of modern marketing, however
elaborate and scientific are in the end no more than levers, inert and even
dull artifacts when not in use, but are capable of reducing dynamics result
when they have a point where they can be forced and an agreed direction in
which the leverage should be exerted.
Finally, while marketing may not be the most important aspect of the
banking industry, it serves as a major adopted and applied function every
banking environment.
1.2 STATEMENT OF THE PROBLEM
Since the commercial banks in the country want to practice real marketing,
there is every need for them to market their services to their numerous
customers
The problem of poor quality services should not be found in banking
industry alone, rather, it should be seen as a general problem of this nation.
The quality of services rendered by commercial banks in Nigeria, with
reference to the Diamond Bank Limited, has been attracting incessant
criticisms from its customers. A notable one as stated earlier was that of
Chief Chris Ogunbanjo, former President of Nigeria/America Chamber of
Commerce; who described banks as “an instrument of financial terrorism”.
According to him, “there is urgent need for reform in the Nigerian banking
industry and such reforms must fall squarely on the Central Bank and the
entire banking industry.
There is actually need for banks to take an in-depth look so as to make
necessary adjustments. In fact, the shortcoming of our banking system is that
when customers go to banks to withdraw their money, they spend their
whole day waiting to be attended to and when the customers complain or
needs inquiry, their complaints are met with rudeness from the staff, who
seem to forget that they were employed to serve this customers, not minding
how big or small the customer is. Based on the above allegations and
experiences of bank customers, managers of banks are not sure of the extent
to which banks practice the marketing concept.
Therefore, this topic was chosen in other to find out how the marketing
concept can help the Diamond Bank Limited and the entire banking industry
in improving their market performances. The research went ahead to develop
some research questions which are intended to give an insight to the problem
when answered.
1.3 OBJECTIVES OF THE STUDY
The main objective of this work is to carry out a critical analysis of the
appraisal of the marketing concept in Diamond Bank Limited, and to take an
in-depth look at the operation of the Diamond Bank Limited, as it relates to
customer services. The objectives of this study include the following:
a. To ascertain the level of good customer relationship that exists
at the Diamond Bank Limited.
b. To ascertain how customers get informed about the availability
of services rendered at the Diamond Bank Limited.
c. To determine if Diamond Bank Limited is customer-oriented
and if not, what are the possible solutions towards improving
their operations.
d. To determine if marketing departments exist within Diamond
Bank Limited and other Commercial banks, and if so, what are
their activities.
e. Finally, to make recommendations with regard to what can be
done within the banking industry to improve the services
extended to their customers.
1.4 RESEARCH QUESTIONS
The following are the research questions:
(a).Does Diamond Bank maintain a good relationship with their customers?
(b).How do customers get informed about the availability of services
rendered at the Diamond Limited?
(c).Is Diamond Bank Ltd customer-oriented?
(d).Does Marketing Departments exist within Diamond Bank Limited?
(e).Are customers satisfied with the standard of services rendered by the
Diamond Bank Ltd?
(f).Are Customers’ problems solved within the shortest possible time at
Diamond Bank Ltd?
(g).Is the employment of the marketing concept within Diamond Bank Ltd
satisfactory?
1.5 HYPOTHESES
In order to properly investigate the problems arising from the appraisal of
the marketing concept in Diamond Bank Limited, the following hypotheses
have been made. The null hypotheses (Ho) and the alternative hypotheses
(HI) are formed as shown below.
1. HO: Customers are not satisfied with the standard of services rendered
by the Diamond Bank Limited.
HI: Customers are satisfied with the standard of services rendered by the
Diamond Bank Limited.
2. HO: Customers’ problems are not solved within the shortest possible
time
HI: Customers’ problems are solved on time
3. HO: The extent to which Diamond Bank employs the marketing
concept in its operations is unsatisfactory.
HI: The extent to which Diamond Bank employer the marketing concept
in it operations is satisfactory.
1.6 SIGNIFICANCE OF THE STUDY
The result obtained from the study will be of benefit to the Management
of Commercial Banks and the entire banking industry; the government;
non-financial institutions; business entrepreneurs; students of Marketing
Department and other related courses and the general public as a whole.
1.7 SCOPE OF THE STUDY
The study centers on the marketing concept applied by the banking
industry, with particular focus on Diamond Bank Ltd.
1.8 LIMITATIONS OF THE STUDY
The researcher achieved quite a great success with the use of the
questionnaire, since most of the respondents that filled the questionnaire
were quite happy with Diamond Bank Limited and the entire banking
industry in Nigeria.
They were eager to air views to toward this direction.
However, this study could have been more comprehensive and elaborate,
but for the uncooperative attitude of the bank. The bankers found it
difficult to give out vital information, which would have been useful to
this study and the commercial banks in Nigeria.
Another limitation is inadequate funds at the disposal of the researcher
and also, the researcher was carrying out this study in her final semester
and enough time was not available. Whatever information that is
contained in this paper was made more possible by the fact that the
researcher later gave all respondents an assurance that all information
obtained will be treated in the strictest confidence and that it was a mere
academic exercise.
CHAPTER TWO
2.0 REVIEW OF THE RELATED LITERATURE
2.1 BACKGROUND OF THE STUDY
The original banking business in Nigeria dates back to 1892, when the First
Banks, the African Banking Corporation was established.
The Bank of British West African Limited (BWA) was established in Lagos
in 1894 and took over the African Banking Corporation that was established
two years earlier in 1892. This bank was later known as Bank of West
Africa.
In 1965, the Bank of the West African joined with Chase Manhattan Bank to
become the Standard Bank of Nigeria, which presently is known as the First
Bank of Nigeria Limited.
As transactional trading firms accelerated and trade expanded more banks
were opened which included the colonial bank in1936; Barclays Bank
Dominion, Colonial Bank in 1925 to form together with Anglo-Egyptian
Bank and National Bank of South Africa, the New Barclays Bank Dominion
in the indigenous sector. The National Bank of Nigeria, established on the
11th February, 1933, has the unique distinction of being the first successful
indigenous bank in the Country. It had an authorized paid-up capital of
N500,000.00 but only N1,520.00 was initially paid up. This increased to
N11,754.00, and by 30the June, 1984, it had again increased to N70,876.00.
The second indigenous bank was African Continental Bank Limited. This
started as a private company in 1937 as Tinubu Properties Limited with an
authorized paid-up capital N500,000.00. Ten years later, in January 1947,
the name was changed to Tinubu Bank registered as the African Continental
Bank (A.C.B) Limited, with authorized capital of N20,000.00 of which
N10,000.00 had been issued and paid up by June 1948.
The period between when the First Bank was established and when the First
Banking Ordinance of 1952 was enacted is referred to as the Free Banking
Era. During this period, many banking firms were established but only few
survived; the few that survived where African Continental Banks, the
Agbomagbe Bank of Nigeria.
Due to the growth in economic/commercial activities, Nigeria presently has
banks, which include Commercial Banks, Merchant Banks, Development
Banks and Mortgage Banks.
2.2 THE HISTORY OF DIAMOND BANK LIMITED
Diamond Bank limited was founded in 1990 with Paschal G. Dozie as the
Chairman. The Bank has nine (9) Directors who are: Professor Theophilus
A. Ogunbiyi, Professor Anya O. Anya, Senator Venmark K. Dangin,
Engineer Micheal I. Ufoeze, Daniel N. Akujobi, Clement Onwunna, Philip
Oduoza (the Executive Director), Mercy Wachukwu (Mrs) Executive
Director. During the year, Diamond Bank obtained the necessary approvals
to make an equity investment of 80% in the shareholding of the proposed
Diamond Bank Limited (DBL) Cotonou, Republic of Benin. The balance of
20% is owned by Republic of Benin Nationals, Diamond Bank Limited,
Cotonou has been set up to provide commercial banking services to its
customers and facilitate trade flows between Nigeria and the Republic of
Benin for existing and potential customers of the bank. The directors believe
that the bank is strategically poised for continued growth and development.
Diamond Bank Limited was licensed in Nigeria on the 20th of December,
1990, to carry on commercial banking business. The bank started operation
on 21st of March, 1991. Their mission is to create a unique international
bank focused on providing creative solutions to customer’s business
problem, with an absolute commitment to quality. The bank strategic focus
is driven by its core competence in the areas of investment management,
investment banking and electronic banking.
2.3 THE MARKETING CONCEPT
The literature review of this study shows that a lot has been done mostly in
the area of “Appraising the Marketing Concept in Banking”
The Marketing Concept according to Philip Kotler, “is a customer and wants
oriented backed by integrated marketing effort, aimed at generating
customer satisfaction as the key to ‘Satisfying Organizational Goal’. He
therefore went further to say that marketing concept mostly starts with the
firms target towards customers, their wants and needs.
The firm plans a well-coordinated set of products and programmes, to solve
these needs and wants, and in the process derives its profits through creating
customer satisfaction. The determination of what and what is to be produced
should not be in the hands of the government or in the hands of the
firms/organizations but in the hands of the consumers.
The marketing concept is the company’s commitment to the time honoured,
a concept in economics theory, otherwise known as consumer sovereignty.
The company can only earn their profit when they maximize their consumer
welfare by trying to produce what the consumer wants.
Melver and Major (1980) said in their book, “Marketing Financial Services”,
that “the tool of marketing, however elaborate and scientific, are in the end
no more than lever, insert and even dull artifacts when not in use, but
capable of producing dynamics--- when they have a point where they can be
fixed, an agreed direction in which the leverages should be put forth.
2.4 APPLICATION OF THE MARKETING CONCEPT IN FINANCIAL
INSTITUTION
Chisnall (1998) says that “the terms marketing and banking were considered
to be mutually exclusive by British Bankers, no need was perceived for
marketing their services professionally. It was not until the early 70’s that
British Bankers started to recognize and accept the importance of being
customers oriented. However, banks in United States of America set the
pace when they began applying the concept in the 1960’s ten years after.
Marketing Concept is a philosophy of business, which states the economic
and social justification of a company’s existence”.
Consequently, all company activities in production, engineering and finance
as well as marketing must be devoted first to determine what the customers
want and then satisfying these while still making profit.
Drucker, who is perceived to be the world’s leading writer on the field of
management says, “it is the customer who actually determines what a
business is. It is the customer alone whose willingness to pay for goods and
services, that converts economic resources into wealth, things into goods’.
What the business thinks if produced is not of first importance at least not to
the future of the business and its success, what the customer thinks he is
buying, what he considers as value, is decisive; it determines what a
business is, what is produced and whether it will prosper. Again what a
customer buys and considers as value is to create a customer, the business
has two and only two basic functions: marketing and innovation to produce
result, all the rest are cost.
2.4 THE ROLE OF MARKETING MANANGEMENT IN BANKING
Maiden (1983) in his article titled, “the role of Marketing Management in
Banking”, observes that marketing is becoming increasingly necessary in
banking activities due to intensified rivalry from other institutions.
According to him, those changes are felt, showing, and must be anticipated
as early as possible so as to cope with challenges of ever changing
conditions. Marketing jobs should not be seen as an ordinary job that should
concentrate more on formulating theories or policies, strategies or plans to
reach and affect the target market or the market that has been selected for
exploration.
He went further to state that the marketing approach in banking refers to
fours steps namely:
(a). Designing of new services or innovation of old ones according to
findings.
(b). Carrying out research to determine customers and prospects of financial
requirement.
(c). Marketing services to customers for whom they were researched and
designed (and this includes pricing, promotion and distribution at a profit
and,
(d). In so doing, satisfying the customers financial needs. Maiden went on to
present the banking approach in a circular form as shown in the figure 1
below. If you look at it very well, you will observe that it starts and ends
with identifying and satisfying customers needs. Stages two through to four
of this process are called the Marketing Mix and have a special importance
in any marketing programme.
FIGURE 2: THE MARKETING APPROACH TO BANKING SERVICES
Identify the Customer’s Financial Need and Wants
(6) (2)
Forecasting and Research Develop Appropriate Banking
Financial Market Product and Services to Marketing
Customers Needs
(5) (3)
Distribution Set up Suitable Pricing: Determine the Price of
Distribution Channels and Products and Services
Developed.
Banks Branches
(4)
Advertise and Promote the Products to
Existing and Potential Customer of
Financial Services
In the Nigeria perspective, the banks see themselves as producers of services
and marketers of services. They tend to equate marketing with selling.
This is very wrong and myopic of marketing. Hence, Chukwuano (1985)
observes that, the services rendered by Nigerian banks seem to be fixed or
rather unchangeable as they are still operating in sellers market. She on her own
advices that traditional concepts and values in every aspect of enterprises and
industries (including banking firms) are being forced to take a fresh look at
themselves.
Also, in Nigerian banks, the only activity of marketing practice by Nigerian
banks is advertising which refers to “any paid form of non-personal
presentation and promotion of ideas, goods and services by an identified
sponsor”. This is not to say that banks are market-oriented, rather, they are
advertising and promotion-oriented trying to push their services to non-
identified customers. The Chairman of the Board of Directors of the Nigeria
International Bank, in his speech during the official opening ceremony of the
bank in Lagos, said, “our philosophy states that the only way we can make
positive contributions to the development of financial services in Nigeria is to
ensure that the quality of services must be that of excellence delivered with
speed and creativity”. He described the standard of professionalism in banking
services in Nigeria during the past ten years as very poor and deplorable and
promised that Nigeria International Bank is all out to ensure that it offers its
customers courteous and satisfying banking services and also that the bank is
fully equipped to provide its customers banking services.
2.6 THE MARKETING CONCEPT AS A SURVIVAL STRATEGY IN
BANKING INDUSTRY
Nwankwo (1980) has in his opinion noted that if banks were to market their
services efficiently (to all classes of customer) much money would be
mobilized to save the economy and fought against inflation.
He said that at least, if 10 million out of 80 million or more Nigerians have up
to N10,000.00 each in their pockets; a fat sum of N100.00 million would be
mobilized immediately. It is fair to say that the width of the product mix is
inadequate. The depth of the product mix is also unsatisfactory because the
commercial banks have failed in the segmentation of their market and have
been unimaginative in designing the individual services they offer. The failure
to segment means, of course, lack of product differentiation within the
individual commercial banks.
Emordi, in his view on “The Need for Effective Marketing”, expresses a
different viewpoint in relation to banking and marking. According to him,
banks have continuously been involved in marketing process, offering high
rates to attract depositors and attempting to lend such deposits at rate profitable
to justify their existence. He went further to say that for them to do it
successfully, it is very necessary for banks to employ the hands of qualified and
experienced marketers to handle marketing activities.
Eribri (1983) shares the same opinion with Shankey, as concerns the banking
industry in Nigeria. He is of the opinion that, whichever way or angle the
Nigeria banking industry is viewed, the clear evidence is that the whole system
is faulty. Banking industry in Nigeria has therefore carved for itself an image of
rapid growth at the expense of quality. The establishment of new banks should
be encouraged to generate healthy competition in the banking industry, which
will help promote the quality of consumer services and remove the arrogance of
some bankers who have constituted themselves into a log in the shale of
progress in the banking industry.
Adukwu (1983) in his contribution examined ways of developing good bank
relation. According to him, in recent times, good customer or public relations
has come to be recognized as element of primary importance in banks’
operations, and as elements without which individual banks and indeed the
entire banking industry or system cannot survive. If the long range of banking
industry is to continue to operate as elements of private enterprise economy and
the goal of the individual bank is to grow and prosper, the practice of public and
customer relation is very vital for these banks to keep pace and more ahead;
bankers have to develop, create new variety of service to respond to customers
want and some to anticipate the customers by providing services they had not
known they wanted. The banking system in Nigeria is characterized by poor
distributional system. Nnolim (2003) observes that the limited number of bank
branches especially in the rural areas and the poor distribution of such branches
have contributed immensely to the reluctance of most people to accept cheques.
2.7 APPLICATION OF MARKETING CONCEPT AS A PANACEA TO
OVER CONCENTRATION OF BANKS IN URBAN CENTRES TO THE
DETRIMENT OF THE RURAL AREAS.
A research carried out by Soyode and Onyejide in 1973/74, shows that banks
were highly concentrated in the Urban Areas of Lagos, Enugu, Kaduna, Port-
Harcourt and many others. Statistics shows that 75% of Nigerian populations
live in the rural areas. Many rural dwellers are denied of banking facilities
hence, they lack access to bank credit to promote their business in the essential
areas of agriculture, handicrafts, and other basic small-scale enterprises.
To avoid the obvious predicament that are inherent, the Central Bank in 1977
began a concession and deliberate policy to direct banks into rural areas.
Rural banking programme finally kicked off in July 1977 with the aim of
cultivating banking habits among the rural populace, reducing urban migration,
mobilization of rural savings, creating credit for rural dwellers, developing
agriculture and providing employment for rural youths.
The first phase of the programme lasted for three years (July 1977 to June
1980) while the second phase, originally scheduled to expire to December 1983
lasted for four years and five months (August 1980 to December 1984). The
third phase, which was launched on the 1st of August, 1985, was scheduled to
end in July 1987.
While a total of 200 branches were allocated to 18 commercial banks in the first
phase, 266 branches were allocated to 20 commercial banks in the second
phase, and 28 commercial banks shares 300 branches in the third place.
In locating these braches, priority was to be given to Local Government
Headquarters and Industrial Commercial Centers in the rural areas. It is very
unfortunate that many banks do not comply with the Central Bank of Nigeria
guideline on rural banking. By the end of the first phase, only 188 braches were
opened as against the total allocation of 200 and by the end of the second phase,
only 181 branches were established as against the total allocation of 226.
Also, of relevance is the study of Lawal (1982) on “Recruitment and Training
Policy in Commercial Banks”. According to him, one of the major
shortcomings of banking systems in this country is the absence of public
relations attitude towards customers. This shortcoming is a product of a poorly
structured recruitment and training policy of our banks. A situation in which a
secondary school product, graduate/certificate holder is recruited and
immediately deployed without any formal orientation programme, that
emphasized the uniqueness of the banking industry, the responsibilities and
obligations of bank employees and their expected behavioural patterns, is at
best unprogressive system and at worst, a harmful omission.
It is therefore, strongly recommended, that the recruitment effort of prospective
state banks should be backed with a well designed/planned orientation
programme. However, there are numbers of situation in which the marketing
approach is sometimes maintained to be inappropriate.
Wilhamson (2003) gave three examples of such situations as:
(a) SELLER’S MARKET: This is in a condition where the sellers and not
the buyers are the key influence for example, when goods are in short
supply, this situation may rise.
(b) HIGH TECHNOLOGY: Where the company future is believed to
depend on its technical research ability to keep ahead of competition
above everything else. This attitude is common in the electronic market
for example.
(c) OTHER BOTTLENECKS: Where other influences than the market
provide the critical factor that determines the company profitability and
its ability to grow. These might include: Management limitations,
shortage of skilled labour, availability of finance, and contractual or legal
restrictions of the company’s operations. He concludes by saying that
more of these approaches can provide a corporate sense of direction that
is valid in the longer form in any way that the disciplines of the market
do, though, marketing concept is not a substitute for management
experience and discretion.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
In this chapter four of this study, it shows how the necessary information and
data were collected, sources and techniques employed in the interpretation and
analysis. In this chapter, data collected were presented and analyzed. The
findings from this data were used either to support or reject the application of
marketing concept in Diamond Bank Limited.
TABLE 1
4.1 Lists of questionnaires
Name of Sample Area Number Given Number Returned
Bank Staff 33 33
Customers 12 12
Total 45 45
TABLE 2
Question 1: What does your bank offer to it customers
Responses Variable Number Percentage (%)
Computer services and
good sitting arrangement
4 8.89
Spacious Hall 12 26.6127
None of the above 29 64.4
Total 45 100
Analysis
From above table, 29 respondents, about 64.44% are of the opinion that
Diamond Bank does not offer any of the options mentioned above. While 12
respondents, representing 26.6127% agree that Diamond Bank offers spacious
hall, 4 respondents, representing 8.89% say that Diamond Bank offer computer
services and good sitting arrangement to their customers.
Fig 4.1 PIE CHART
a. 12 x 360
45 1 =960
b. 29 x 360
45 1 =2320
c. 4 x 360
45 1 =320
Table 3
Question 2: Does your bank have different account for different class of
customer
Responses Variable Number Percentage (%)
Yes 31 68.89
No 11 24.44
Do not know 3 6.67
total 45 100
Analysis
The table above equally shows that 31 respondents representing about
68.89% said that Diamond has different account for different class. 11
respondents, representing 24.44% said no while 3 respondents representing
about 6.69%, has no knowledge of account differentiation.
Fig 4.11 BAR CHART
35
30
25
20
15
10
5
0
Yes NO Do not know
TABLE 4
QUESTION 3: Does your bank meet up with all their services
Responses Number Percentages (%)
Yes 13 28.89
No 27 60
Do not know 5 11.11
Total 45 100
Key
Yes
No
Do not know
ANALYSIS
From the above table, 13 respondents are of the view that their bank meet up
with all their services, while 27 respondents, representing 60% are of the
opinion that they don’t meet up and 11.11% claimed to have no knowledge
at all.
FIG III HISTOGRAM
30
25
20
15
10
5
0
Yes No Don’t know
TABEL 5
QUESTION 4: If yes to the previous question, how are their charges?
Responses Number Percentages (%)
Very high 9 20
High 11 24.40
Moderate 25 55.60
Low - -
Total 45 100
ANALYSIS
Table above shows that 25 respondents (55.60%) are of the opinion that the
bank charges are moderate, 9 respondents, about 20% said that the charges
are very high while 11 respondents, representing 24.40% said that they are
high.
TABLE 6
QUESTION 5: A Does your bank advertise your services
Responses Number Percentages (%)
Yes 3 6.70
No 39 87.00
Do not know 3 6.70
Total 45 100
FIG V BAR CHART
35
30
25
20
15
10
5
0
Yes No Do not know
Yes No Do not know
TABLE 7
QUESTION 6: Will the introduction of advertisement and gift incentives
increase your loyalty to your bank
Responses Number Percentages (%)
Yes 37 82.22
No - -
Do not know 8 17.77
Total 45 100
ANALYSIS
From the above table, 37 respondents, representing 82.22 are of the opinion
that it boosts their loyalty while 8 respondents had no idea.
Fig VI PIE CHART
a. 37 x 360
45 1 =295.990
b. 8 x 360
45 1 =63.990
TABLE 8
QUESTION 7: Do you feel that Nigeria has sufficient number of
banks/branches
Responses Number Percentages (%)
Yes 25 55.60
No 17 37.80
Do not know 3 6.60
Total 45 100
ANALYSIS
25 respondents, representing 55.66% feel that Nigeria has sufficient number
of banks/branches. 17 respondents said no while 3 respondents representing
6.60% said that they do not know.
TABLE 9
QUESTION 8: Do your bank has market segmentation
Responses Number Percentages (%)
Yes 4 8.89
No 3 6.67
Do not know 38 84.44
Total 45 100
ANALYSIS
4 agreed that the bank has market segmentation while 3 respondents said no
and 38 claimed ignorance of the marketing segmentation.
Fig 4 VII BAR CHART
30
25
20
15
10
5
0
Yes No Do not know
TABLE 10
QUESTION 9: Does your bank have preferential treatment to some of their
customers
Responses Number Percentages (%)
Yes 33 73.30
No 7 15.60
Do not know 5 11.10
Total 45 100
ANALYSIS
From table 10 above, 33 respondents, representing 73.30% said that banks
give preferential treatment, 7 respondents said No, while 5 respondents
representing 11.10% of the percentage claimed to have no idea.
TABLE 11
QUESTION 10: How would you summarize your impression about bank
services to the general public?.
Responses Number Percentages (%)
Satisfactory 15 33.33
Unsatisfactory 28 62.22
Do not know 2 4.44
Total 45 100
ANALYSIS
From the above table, 28 respondents, representing 62.22% are of the
opinion that their services are not commendable, 15 respondents are satisfied
with their services while 2 respondents, representing 4.44% claimed to have
no idea at all.
BAR CHART
30
25
20
15
10
5
0
Yes No Do not know
CHAPTER FIVE
5.0 RESULT AND DISCUSSION
The aim of this chapter is to ascertain the extent to which data representation
is in line with literature review in chapter two. On provision of amenities to
the customers, majority of the respondents feel that their banks offer none of
the amenities listed; the revelation portrays our banks in a very bad light,
which simply means that Nigeria banks are only after their customers.
They don’t think about their customers’ well-being. This attitude of the
banks will soon have counter effect on them because of proliferation of new
banks.
On the area of charges for services, table 5 indicates that 20% of the
respondents feel that the charges are very high; 24.40% consider banks
charges as high, while 55.60% of the respondents were of the opinion that
bank charges are moderate.
None of the respondents were of the view of the view that bank charges
were low. The data were in line with the opinion of Soleya the then Minister
of Finance, in the literature review where he reminded banks of the dangers
inherent in over-pricing services out of the reach of their client.
The implications will be a reduction of their profit margins and thereby
offend their shareholders.
On segmentation, majority of the respondents that is 84.44% were ignorant
of the existence of this. This figure portrays the fact that banks do not
practice market segmentation, otherwise, majority could have known. Since
the need and wants of every customer is not identical, banks should establish
such practice in order to satisfy the need of all classes of customers.
ADVERTISEMENT: Table 6 shows that the majority of the respondents
were of the opinion that banks do not advertise their services. Even if they
do they prefer electronics media (Television or Radio) for advertisement to
non-electronic media (Newspaper, Poster and Display). The few bank
managers interviewed orally stressed that they embark on controlling their
advertisement a lot because they want to minimize cost of their operations.
If the above assertion is true, banks are doomed, because if you do not say
where you are, nobody will know your where about and existence.
Advertisement will be invaluable asset for that job aided with gift incentives.
Both will build good public relations for any bank.
Insufficient number of banks/branches: The result shows that 37.80% held
the view that bank branches are not enough in the country. This shares the
same opinion with Erihir (1983), where he states that the establishment of
new banks should be encouraged to generate healthy competition in the
baking industry which will promote the quality of consumers’ services and
remove the arrogance of some bankers who have constituted themselves as
log in the wheel of progress in banking industry.
In conclusion, therefore, there is need for more banks in Nigeria, since we
do not have enough. This will definitely help in improving their quality of
services to customers as relates to conveniences, time-wasted and so.
CHAPTER SIX
6.0 SUMMARY OF FINDINGS, RECOMMENDATIONS AND
CONCLUSION
6.1 SUMMARY OF FINDINGS
The findings of the study are restricted to the results of the data analysis and
the reports of the banks.
Banks are in the business of rendering financial services to the customers.
Their ability to perform well depends on their adoption of marking concept
as the central purpose of business. Nigerian banks have been characterized
by time wasting in offering services to its customers and this can be
attributed to inability of the banks to fully computerize their various
branches to help in reducing the delays in banks, and to take care of the
inadequate number of banks and branches to carter for growing populace.
The table 4.II helped us to ascertain that air-conditioned hall, spacious hall
and other amenities help the customers to patronize the bank under study.
Again, the computerization of their services equally goes along way to boost
their transactions.
Regarding the analysis done in table 4.III, it was noted that Diamond Bank
has different account for different class of customers. A total of 31,
respondents, representing 68.89% were of the opinion that the banks have
different account for different class of customers.
Based on the analysis on table 4.IV, it was revealed that the Diamond Bank
do not meet up with all their customers services. By this, it was 27
respondents, representing 60% of the total number that agreed on the fact
that Diamond bank do not meet up with all their services.
The issue of their charges, we can infer from table 4.V that these Diamond
Bank charges are moderate. By this figure 25 respondents, representing
55.60% were of the opinion that their charges are moderate.
As shown in table 4.VI, it was revealed that bank under study do advertise
their services. A total of 39 respondents representing 87.00% were in favour
of the fact that the bank advertises its services.
Based on the analysis on table 4.VIII, it was shown that the Diamond Bank
under study will increase their customer loyalties.82.22 were of this opinion.
This same table showed that the Diamond Bank have marketing department
which will be a boost to their operation. A total of 38 respondents
ascertained that marketing department is among the departments within
bank. The marketing department according to a source in the bank said that
marketing department exists only at the Head-Office where they sit down in
office and append signature on approval of loans and overdraft to their value
customers.
The issue on table 4.IX is concerning preferential treatment, shows that 33
respondents, representing 73.30% were of the opinion that the bank under
study gives preferential treatment to their classified valued customers.
Finally, on the table 4.XX, it showed that Diamond Bank services to
customer’s and the general public are unsatisfactory. A total of 28
respondents, representing 62.22% opined in favour of the issue on the above
table.
6.2 RECOMMENDATIONS
For Diamond Bank to achieve its goal in banking industry, it must improve
on its services to satisfy its customers and retain their patronage.
It is therefore, recommended that the branch manager should lead by
example by providing good and effective leadership as this is one of the
determining factors with regard to quality of services offered to customers.
Again, the bank should embark on intensive training programme for all
categories of its staff, especially in the areas of public relations and human
relations management so that at each time while at work, the workers could
know the importance of being customer-oriented.
The banks should be aware that services are intangible and consumption and
sales are the major determinants of the good delivery to bank services. The
banking industry should establish a marketing department, that is good,
adequate and efficient that will see to the satisfaction of customers needs.
The major aim of marketing is “customer satisfaction”. Banks should try and
utilize professional marketing graduates in top banking management post,
apart from the marketing departments.
The banks should segment its market and work towards meeting the needs of
all categories of its potential and actual customers, because the more
characteristics the market is segmented by the more practice the manager’s
knowledge of customers is. The customers especially the unenlightened ones
should be made to feel as part and parcel of the business because they are
customers and without them, the bank cannot exist.
The delays in cashing cheques or in doing other transactions should be
reduced by computerizing. The bank should embark on aggressive
promotional activities so that the customers could be informed more
regularly about the services and bank offers. This will help the bank to be on
its proper footing in this era of competitive banking.
The bank should adhere strictly to the level provided in Central bank of
Nigeria guidelines about the level of charges they charge customers. Other
charges of the bank for their services should be made to a reasonable level
without risking profit. The banking industry should stop giving preferential
treatment to their so-called valued customers whom they give out loans
without collateral, which may result in the bank being distressed. They
should increase their marketing awareness to customers by intensifying their
efforts in making calendars, pens diaries etc, so as to instigate customers to
bank with them.
Finally, the Central Bank of Nigeria should monitor properly all activities of
commercial banks in Nigeria so as to control effectively the state of affairs
in banking industry in this our wailing economy.
6.3 CONCLUSION
This is the era of change in banking operations. The present trend in
competition in the banking industry creates a path towards re-orientation of
the banking business. The importance of customer to the successful
operations of any business needs not to be over emphasized. Proper bank
marketing can help the banking industry to adapt to needs of the customers.
In the light of efficiency, it is hoped that with the adaptation of the
recommendations above, the bank will improve its efficiency of operation
through the rendering of good quality services and staff showing optimum
courtesy when dealing with the customers. Not until banks begin to establish
marketing department and starts practicing marketing concept, which is
customers’ satisfaction, Nigerian banks still have a long way to go.
It should also be realized that the banking industry provides a wheel through
which the economy revolves. Hence, the proper operations of banking
business have a great impact on the economic development of our battered
economy.
APPENDIX 1
PROJECT QUESTIONNAIRE
Department of Marketing
University of Nigeria,
Enugu Campus.
May 3, 2001.
Dear Sir/Miss Madam,
APPLICATION OF MARKETING CONCEPT IN NIGERIA
COMMERCIAL BANKS (A STUDY OF DIAMOND BANK
LIMITED)
I am a postgraduate student of the above department conducting a research
work on the above subject. I wish most humbly to solicit your co-operation
in providing relevant answers to underlisted questionnaire items.
The survey is entirely on academic exercise and you are therefore assured
that all information resulting from this research will be treated in the strictest
confidence.
Thanks for your co-operation.
Yours faithfully,
Sylvia Okoye
FOR BANK OFFICIALS
1. Name:___________________________________________________
2. Department:______________________________________________
3. Designation:______________________________________________
4. How long have you worked with U.T.B.?_______________________
(a) 6 months – 1 year ( ) (b) 1 year – 5 year ( )
(c) 5 years and above ( )
5. What amenities does your bank offer to their customers?
(a) Computer services good sitting arrangement ( )
(b) Air-conditional hall spacious hall ( )
(c) None of the above ( )
6. Does your bank have different account for different class of
customers?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
7. Do your bank advertise their service?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
8. Do you feel that Nigeria has sufficient number of banks/branches?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
9. Do your bank have market segmentation?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
10. do your bank give preferential treatment to some of their customers?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
11. How would you summarize you impression about bank services to
the general public?
(a) Satisfactory ( ) (b) Unsatisfactory ( )
(a) Do not know ( )
INSTRUCTIONS FOR CUSTOMERS
You are required to mark (x) against the answer of your choice
1. How long have you been banking with Diamond Bank?
(a) 6 Months – 1 year ( ) (b) 1 year – 5 years ( )
(c) 5 years and above ( )
2. What type of account do you maintain?
(a) Saving Account ( ) (b) Current Account ( )
(c) Fixed/Investment Deposit Account ( )
3. Do your bank meet up with all your services?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
4. If “yes” to above, how are their charges?
(a) Very high ( ) (b) High ( ) (c) Moderate ( )
5. will the introduction of advertisement and gift incentives increase your
loyalty to your bank?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
6. Do you feel that Nigeria has sufficient number of bank/branches?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
7. Do your bank have marketing department?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
8. Do your bank gives preferential treatment to some customers?
(a) Yes ( ) (b) No ( ) (c) Do not know ( )
9. How would you summarize your impression about bank services to the
general publics?
(a) Satisfactory ( ) (b) No ( ) (c) Do not know ( )
BIBLOGRAPHY
1. Achukwu, M.A., “Developing Good Bank Customer Relation”,
Business Times, Sept. 27, 1982
2. Emodi, E., “The Need for Effective Marketing” Business Times
Dec. 3, 1984.
3. Erihri P., “Restructuring of Banking Industry in Nigeria”
Business Times, Aug. 22, 1983.
4. Lawal, B., “Recruitment and Training Policy in Commercial
Banks Financial Fund. Oct. 27, 1982.
5. Median, A., “The Role of Marketing Management in Banking”
Institute of Marketing Quarterly Review, April 3
1983.
6. MC Lever, C & Nagar G., Marketing Financial Services, Institute of Bankers,
Press, London, 1980.
7. Central Bank Bullion, Annual Report, Central Bank of Nigeria, 1986.
8. Shankey, C.S., “Banking in Nigeria” Weekly Concord, April 1, 1985.
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Cahrles E. Merill publishing company London,
1980
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Prentice Hall inc., Ltd., U.S.A 1979.