THE impact OF MARKETING STRATEGY IN NIGERIAN BANKING INDUSTRY
THE IMPACT OF MARKETING STRATEGY IN NIGERIAN BANKING INDUSTRY
INTRODUCTION TO CHAPTER ONE OF THE IMPACT OF MARKETING STRATEGY IN THE NIGERIAN BANKING INDUSTRY
1.1 BACGROUND INFORMATION
Marketing is the process of conceptualising, pricing, promoting, and distributing ideas, goods and services, organisations, and events in order to build and maintain relationships that will achieve individual and organisational objectives. It is critical for corporate growth. It essentially entails bringing goods and services to the final consumer in a satisfactory manner.
Since the implementation of the Structural Adjustment Programme (SAP) on July 1, 1986, the Nigerian banking sector has altered dramatically. Prior to this period, most Nigerian banks engaged in an effort to encourage certain classes of customers,
resulting in deposit rejection or acceptance on predetermined terms due to the fact that there were few banks to render services to a significantly large number of customers, resulting in a decline in profit volume.
However, between the SAP and now, there have been numerous revisions to banking laws and policies ranging from BOFID 1991 to the universal banking policy of 2001, as well as various increases in the capital base, e.t.c.
These changes have forced the need to find a means to promote financial services, which is possible with the influence of banking marketing tactics.
It is surprising that banks have not developed a competitive and complete marketing strategy for banking services and products. A detailed examination of the recently completed re-capitalization procedure demonstrated unequivocally the aforesaid assertion.
This procedure witnessed “Aggressive Marketing,” which is not representative of what banking stands for in terms of ethics and absolute good faith.
The tendency of establishing marketing departments (marketing strategies) in banks is a good development that has made arm-chair banking a part of banking history. Bank marketing was therefore described as “that portion of the profitability of banking services to selected customers.”
The demand for marketing in banks arose as a result of increasing rivalry from both competing banks and non-financial organisations. Staff are assigned goals to attain and are compensated or promoted based on their ability or inability to meet those goals.
Customers, on the other hand, should be at the heart of the bank's planning and corporate thinking. Profit cannot be discussed in an organisation without discussing the customers who generate that profit.
The strategic or corporate planner must therefore recognise that a company's survival is entirely dependent on the consumer. As can be seen, the importance of marketing in the banking business cannot be overstated.
Banks must make acceptable returns because they are responsible to their shareholders, who have invested with the expectation of earning a good return.
Furthermore, the significant costs incurred in day-to-day operations must be properly covered by the profit gained. In order to meet these objectives, each bank must generate appropriate returns. Meeting these needs is referred to as maximising shareholder wealth.
1.2 STATEMENT OF THE PROBLEM
Despite the importance of marketing strategy in the banking business, there is a problem with First Bank of Nigeria Plc's financial services and activities.
During the era of arm-chair banking, banks were few and patronised by indigenous people who had no choice, but the increase in indigenous ones between 1945 and 1960, as well as the recent re-capitalization of banks' capital base to N25 billion,
has necessitated a dire need for banks to take product marketing very seriously. It is apparent that competition among banks will expand, necessitating the use of genuine marketing tactics in order to further professionalise the business.
Banks with more money are thought to be better positioned to become leaders in the dynamic and competitive business, and marketing plays an important role in deposit acquisition and fund sourcing.
1.3 OBJECTIVES OF THE STUDY
The study's overarching goal is to examine the influence of marketing tactics in the Nigerian banking industry and how they are employed to achieve stated goals.
Based on the data gathered and the scope of the researcher, this study will assess the influence of marketing tactics in connection to external variables of operation and propose remedies.
Other specific goals of this research include:
1. To investigate existing marketing ideas and theories.
2. To investigate bank product marketing tactics in connection to external issues.
3. To assess how successful these techniques have been in accomplishing their goals.
4. To investigate the associated limits in the expansion of various marketing methods.
5. To propose the required recommendations for an effective banking policy.
1.4 THE IMPORTANCE OF THE STUDY
All organisations are founded to achieve their goals, and the banking business is no exception. To achieve some of these established objectives, they must be translated into marketing objectives, which necessitates the establishment of a clear marketing strategy and well-thought-out supporting initiatives.
There hasn't been much research done on marketing strategy in the past to bring out and justify the necessity of the study.
However, given the current level of rivalry among banks, the researcher observed the need for modern banks to adapt and participate in marketing strategy.
1.5 SCOPE OF THE STUDY
This research was limited to commercial banks with reference to First Bank of Nigeria Plc as a case study, and only the First Bank of Nigeria Plc, Ilorin branch was chosen for the purpose of the study, because the bank employs a policy that impacts all branches' operations.
1.6 OVERALL PLAN OF THE STUDY
This study effort was divided into five chapters, which were given in the following logical and sequential order:
Background information, a statement of the research topic, objectives of the study, significance of the study, scope of the study, strategy of the study, and definition of words (keynotes) are all included in Chapter One.
The second chapter offers a survey of several related literatures on marketing strategies authored by some writers and other researchers on marketing strategy, scope, and components. It also investigates marketing tactics in the banking industry, marketing research, and a chapter summary.
The third chapter discusses research technique, which includes the history of the First Bank of Nigeria Plc, Ilorin branch, sampling size, data collection source, data analysis method, and study hypothesis.
Chapters four and five focus on data analysis and presentation, as well as summary, conclusion, and recommendation.
1.7 DEFINITION OF KEY TERMS
(Peter Drucker, 1973) described marketing as “human activity directed at satisfying need and wants through exchange processes.”
However, (Wroe Anderson, 1976) described marketing as human and organisational activities that try to facilitate and expedite exchanges within a system of dynamic environmental pressures.
MARKETING CONCEPT: This is a corporate concept that argues consumer want-satisfaction is the economic and social rationale for a company's existence. It emphasises that all business actions should be centred on or aimed towards customer happiness.
MARKETING ENVIRONMENT: This refers to all internal and external factors and forces that influence marketing decision making. Internal forces, such as organisational structure and the 4M's (Man, Money, Machine, and Materials), are controllable.
However, the uncontrollable external forces that fall outside the firm represent the biggest potential and hazards to the enterprise. Economic conditions, socio-cultural influences, competitors, customers, the political and legal environment, foreign impacts, technological considerations, and so on are all examples.
A PRODUCT is an idea, a service, a good, or any combination of the three. It can also be defined as anything that can be supplied to the market in exchange for attention,
acquisition, use, or consumption in order to meet a demand. This suggests that tangible, goods, services, people, locations, organisations, and ideas are all products.
MARKETING STRATEGIES: A marketing strategy is a written plan that describes all activities involved in achieving a specific marketing objective and their relationship to one another in both time and magnitude.
It will include short and long term sales forecast, production and profit target, pricing policy, promotional and selling strategy, staffing requirement, as well as the chosen marketing mix and expense budget.