Application of Marketing Concept in Commercial Banking and Its Effectiveness in Consumer Satisfaction
The primary objective of this research work is to carry out a proper investigation on “the application of marketing concept in commercial banking and its effectiveness in consumer satisfaction” at Guaranty Trust Bank Murtala Muhammed Square Branch Kaduna. To highlight the result of the investigation of the subject matter. Background, statement of general problem, purpose, significance, research question, and delimitation of the study. Chapter two is the literature review of relevant material that was used to acquire full information about marketing, and the marketing concept. Nigeria’s financial system and banking. Authors whose books were consulted in this research work were acknowledged, chapter three deals with the research methodology, and primary data were gathered through the utilization of personal interviews and detailed questionnaires. The total population size of Guaranty Trust Bank Management/staff in the branch is 40 out of which 15 were randomly selected and administered questionnaires. 20 respondents of the total customer population were also randomly selected. All the respondents responded to the questions asked which were later tabulated. Simple random sampling is the method employed by the researcher in determining the sample size. The statistical technique used in testing the hypothesis was a simple percentage method justification of samples, sampling method employed, etc. were all discussed extensively. The hypothesis tested is;
Ho: Marketing concept does not affect the customer’s satisfaction.
H1: Marketing concept has effect on the customer’s satisfaction.
Chapter four deals with data presentation and analysis; all the data collected were analyzed in this chapter, and the result obtained from the data and proof of hypothesis was accepted often careful analysis of the alternate hypothesis, this chapter result obtained from the data and proof of hypothesis was accepted often careful analysis of the alternate hypothesis. It proved that marketing concept. The application affects consumer satisfaction. Finally, chapter five contains the summary of the major finding of the research,h, and a recommendation was made based on the conclusion. The recommendation includes A well-coordinated marketing planning program that must be adopted by Guaranty Trust Bank to ensure that all departments are giving total participation in customer satisfaction. All effort should be directed towards reducing customer waiting time to the barest minimum which is highly important. These can assist management in marketing their products effectively while ensuring customer satisfaction.
The marketing concept is a customer-oriented philosophy that states that customer satisfaction is the economic and social justification of a firm’s corporate existence. These philosophies hold that the company should be customer-oriented. Strive for profitability. Sales volume and coordinate all its marketing activities. Marketing management however is the vehicle that business uses to capture the marketing concept.
Kurtz (1992. Pg 3) defines marketing management as a unifying approach marshaling and directing the total resources of a business firm towards the determination and satisfaction of a customer and consumer wants in a way planned to enhance the firm overall profit position.
Where the marketing concept is recognized, there is a total change in the basic philosophy of business. Instead of trying to sell what can be produced. Management produces what is needed by the customer through the profit criterion is there. The element of serving and keeping the customer satisfied is equally important to the company. By realizing that it is not merely selling a particular product but a particular need of a customer is satisfied effectively. The essence of banking services marketing is to provide the desired satisfaction to customers and make the business of banking maintain a sound footing and sustainable growth in the short and long run.
The current industrial, commercial, and technological metamorphosis with increased competitive pressure. Customer expectation and other unstable environmental faces are clear indications that a business either adopts marketing concepts and philosophy or goes out of existence. The recent proliferation of banks in Nigeria denotes a more intense competition in which only those capable of adapting dynamically would be able to maintain sustained growth and profitability. The present economic changes in Nigeria no doubt, pose greater challenges to commercial banks. These trends of changes have made banks realize that their customers can no longer just be treated in an off head manner. Banks, therefore, employ marketing experts who go out and solicit customers’ patronage and loyalty. Banks now realized the importance of maintaining a close relationship with customers and getting the service as closer to them as possible. Most banks set up a marketing research department or as the case may be to gather more facts about customer needs, attitudes, motives, and preferences.
1.1 BACKGROUND OF THE STUDY
This study tries to examine the contribution of marketing concept philosophy and the marketing mix elements in the effort of satisfying customers’ needs effectively in commercial banking. The orientation of banking service started with the production concept which believes that customers would buy the services offered to them by banks provided it is accessible and affordable. Thus banks think of offering useful services and opening out more branches to make their service accessible.
Later the bank moves to the product concept under the assumption that customers would buy such services that offer the best quality and value for the price that is being offered. Thus banks direct their efforts to improve the quality of their services.
However, at the later stage of their development, sales orientation comes into effect i.e. selling concept which believes that customers would not buy enough from them unless a positive extra effort is made to sell the product due to an increase in competition and awareness. Today, the application of the marketing concept makes banks accept the fact of finding out the needs and wants of customers and provide banking service packages that will best satisfy such needs and wants profitably.
The marketing concept has been viewed as the correct philosophy for achieving long–term commercial success. Thus making the task of persuading customers to buy the service that the bank offered very easy. Therefore customer satisfaction becomes inevitable. The marketing concept is directed toward answering the question of, who are our customers. To whom do we produce? What marketing techniques do we employ? Why are we selling this product? Who do we sell to? Also to find out what the customer wants and where he wants to buy the product and how he wants it delivered to create a cordial relationship between the organization and its customer to achieve maximum satisfaction.
1.2 STATEMENT OF GENERAL PROBLEM
The marketing concept doesn’t seem to receive complete recognition from the Nigerian commercial banks. The integrated marketing idea that business should be organized in such a way as to satisfy the customers by committing the whole system of the organization’s activities towards a single objective has been a myth to the commercial banks rather than a reality. Consequently, customers are not given the adequate attention they required in the banks as that which is appropriate in the service organization. Furthermore, banks charge discriminatory interest rates on borrowed funds which causes untold hardship to customers. The banking profession in Nigeria had until – recently been characterized by what expert refers to as armchair banking, where bankers are waiting in their offices for work to come and meet them. This approach to the banking business is deficient because the bank had not fully embraced the marketing concept: its philosophy and function. Their perception of marketing is still narrowly defined. The marketing of bank services transcends these myopic ends.
Nigeria’s commercial banks need to adopt the marketing concept programs for a purposeful and customer-oriented approach to the business of banking.
As a result of the above factors, this research is designed to answer the following questions.
1) To research into and find out those areas the banks have found to be of interest in satisfying customers.
2) To ascertain the opinions of banking staff towards their customers and vice–versa.
3) To find out the place and role of marketing in the organizational structure of commercial banks and to what extent marketing functions have been applied.
4) To ascertain the effectiveness and efficiency of marketing concept application.
5) To make useful recommendations for improvement
1.3 PURPOSE OF THE STUDY
The marketing concept has not received the attention it deserved in most commercial banks in the country. The importance of this research focuses on the effect of the marketing concept on the Nigerian banking sector using Guarantee Trust Bank Plc Kaduna as a case study. The research attempt to highlight the importance of marketing in the banking industry. Accordingly, an attempt will be made to critically examine the various marketing mix elements and their effect on the banking sector.
The researcher is essentially interested in looking at marketing as a critical factor for the increase in patronage of the banking industry. And equally ascertains the extent of marketing in the sector. The concept of marketing is directed toward customer satisfaction. Marketing is a consumer-oriented program that starts by focusing on the consumer’s wants. How best to satisfy him and how best to communicate and bring service to him at the price he can be willing to pay with added emphasis on convenience.
The purpose of the study is
1) To provide a valid picture of what is happening in the commercial banks in terms of marketing and customer satisfaction.
2) To analyze customer response to service rendered by commercial banks.
3) To evaluate the compatibility of bank resources with the environmental factor. (service and customers)
4) To measure commercial banks’ corporate offer and customer acceptability.
5) To recommend solving problems based on findings that will help to improve other marketing strategies implementation.
1.4 SIGNIFICANCE OF THE STUDY
This research is necessary because some officials have not fully displayed through their attitude the relevance of the customer as the key player in the banking service.
The research is timely and important because of the role marketing plays in the banking industry. It will also prove or refute the hypothesis that Banks believes in the application of the marketing concept to bring about objective satisfaction to customers’ needs.
Customers’ needs and wants are dynamic. Some customers are not aware of various products and services rendered by banks apart from mere deposit and withdrawal from their accounts. The effect of marketing will therefore serve as an impetus for drawing the attention of the customer to the existence of their services. It will also serve as a valuable tool in setting overall corporate objective, prosperity, growth and continued existence of business. Commercial banks need to constantly structure their services in such a way that they cater to the financial needs of not only the customers but also the prospective customers.
The research finding is hoped towards providing qualitative and quantitative knowledge and idea in applying the concept of marketing in achieving corporate objective and customer satisfaction. Also, students of marketing can use this research work as a guide or reference when information on marketing concepts and the marketing mix element is desired in customer satisfaction. It is often said that the end of research work is the beginning point of another, so it will act as a foreground for staff and students who will find this philosophy worthwhile or unavoidably expedient.
1.5 RESEARCH QUESTIONS
The research questions are formulated based on the purpose of the study to guide the entire research work. These questions will serve as a guide to the researcher in designing the questionnaire and in providing solutions to the problems discovered. Thus the questions are set as follows;
v What is the status of the marketing concept in GT bank
v How long has GT bank adopted the marketing concept
v Does the concept increases patronage by customers
v What is the effect of the concept on the organization
v How would the concept improve customers satisfaction
v What is the nature of the relationship that exists between GT bank staff and its customers?
v What effort is the management of GT bank doing to improve that relationship
1.6 STATEMENT OF HYPOTEHSIS
Two hypotheses have been formulated and would be tested in the course of this study, which is the Null hypothesis and the Alternate Hypothesis.
Ho: Marketing concept has a significant effect on customer satisfaction.
Hi: Marketing concept has no significant effect on customer satisfaction.
1.7 DELIMITATION OF THE STUDY
In conducting research of this nature, one is bound to face some challenges. Therefore the research focuses only on the management and customer of GT Bank Murtala Mohammed Square Branch Kaduna due to financial constraints. Time limits and other environmental constraints.
a) Finance: Due to the high cost associated with transportation, visitation was only restricted to the branch office in question. Also, materials that are needed have to be bought, while some are obtainable from the net. Typing and binding of the entire work is another area that needs serious consideration.
b) Time Constraint: Time was a major constraint to the research and this was compounded by the fact that the research work was to be conducted and its report submitted within a short period. Data collected analysis classification of such data’s, interview was also conducted and the respondent’s attention based on their most convenient time.
c) Inadequate Material: Research work of this nature requires information from textbooks, journals, and periodic reports of which some of these materials are either confidential, difficult to obtain, or too expensive.
1.8 DEFINITION OF TERMS
Some of the terms used in this research work are defined below for easy understanding and interpretation.
Marketing Concept: The philosophy states that customer satisfaction is the economic and social justification for a firm existence.
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