THE MARKETING OF COMMERCIAL BANK SERVICES
CHAPTER ONE
INTRODUCTION
1.1BACKGROUND OF THE STUDY
The importance of effective marketing of services in the Nigeria banking industry is only being realized in the part, marketing was not linked to services industries like banking, insurance, law etc. In recent years however, marketing activities is the banking industry have acquired increased importance assuming a new dimension and attraction more than attention. The reason for this phenomenon is easy to appreciate, for competition in banking has increased. Apart from increase in the number of banks, other financial institutions exist and after certain services capable to those offered by commercial banks. This competition this arises as a good condition for ie to exist, such other financial institution includes saving and loan association credit venous, mutual funds, investment clubs, and even the money lending institution and credit cooperative societies, the have also increased, multiplied and expanded their services based to intensity their competition too demand and time deposits etc, from their customers or numbers. They are seen as strong competitors to banks, they operate within environments where the clients know them and rather chose to patronize them either because of nearness of fauritsarity or even a good setting for personal selling and convictions. Added to the above, it should be realized that the bank customers has become quiets sophisticated in his need of the non-basic service of commercial banks through a greater percentage of the population is yet to non and avail themselves of these services which these have. For these reasons, marketing which has an important roles to play is any organization does this for the banks to over come all these, the banks must adopt to the changing environment and requirements of their customers. As it is known, operation orientation has dominated the banking activities while marketing has not played any significant role since it is regarded as part of public relation or ordinary advertising
The stock in trade of commercial banks in Nigeria is the provision of financial services to their customers. These services of their customers include depositing services comprising of collection and payment of cheques bills and premium etc. granting of credit facilities by giving loans and overdrafts acting as trusties and executors, issuing of banker’s draft, buying and selling of stock and share among others. All these services constitute the commercial banks product mix and the way and manners in which these banks tailor the above service constitute their marking strategies, these marketing strategies includes the attitude of their staff otherwise called personal selling quick or prompt attendance to customers, opening of more branches conducting their banking is clean and benefiting creation of good public image, good publicity etc.
Then looking at the way and manner bankers services are being rendered in Nigeria today. It should be observed, and is nothing near the required standard. There will exist traces of the proved arm chair banking” the banks provide very poor conveniences to customers and even treat them with levity as the banks staff behave it is right to deliberately delay customers resulting from their nonchalant attitude to work. The resultant effect of all these is the long queues noticed in the banks even from cashy ordinary cheques or withdrawal or deposit from a savings or current account, converting new cheques books or pass books etc. the question of getting cheques takes weeks and months while loan request and approval run into months and years. The customers feel dissatisfied and express this through their criticism of the banks and sometimes closing their accounts with the banks while others refuse to have anything to do with these banks. These effects the money supply, which is still is currency with the ratios of bank money to money supply varying between 49% to 60% in recent times. Loss of customers and liability to get new prospective customers effect the banks liquidity position also, so is the light above the other unmentioned maladies play the banking scene. It is seen that banks should not intensify their marketing activities and mend their attitude to their customers for better. They should need to the advise of customers so that banks now have to cultivate the habit of marketing their services in a way to improve and promote their image. Thus helping to increase their patronage by existing and intending depositors.
1.2 STATEMENT OF THE PROBLEM
Banking is a service industry, which must be marketed similarly. The main theme of a bank’s marketing activities is to perform a coordinating function in assisting the banks to achieve its objective of identifying, anticipating and satisfying customer’s need and giving customers better value for money at a profit. The marketing of a bank’s services concerns itself an new banking services should be marketed and made properly accessible to customers in line with modern day banking practice. In trying to do this, banks encounter some difficulties. These are areas of competitors who is their own features say have been older and penetrate more into our own towns, and villages with our people participating more fully in their organization. They include money-lending houses, Isusu clubs the saving and loan association, investment clubs, co-operative societies etc. another problem is that people are largely illiterate and can neither easily perceive nor appreciate the services as being better than those ones they are used to.
However, today in Nigeria especially in Enugu, banking is still operated largely is its orthodox manner where bankers sit and wait for customers to bring in business or where attempts are not made at all to look for customers. They are not properly directed to those who do not know of bank existence or the services. People wait for endless hours trying to get the undifferentiated services of these banks in their over crowded and ill ventilated banking halls. The nonchalant attitude of people in opening accounts in banks and in asking for other services is a direct result of one or more of the followings;
i. Lack of proper information and conviction that these services will be efficiently provided.
ii. Poor attitude of banks workers.
iii. Inefficiency of banks workers
iv. Preference for these services from competing organization existing around.
The banks on the other hand have to decide on the number of these services of those services to be provided since the cost incurred is providing the service the resultant effect is terms of satisfying the existing customers and also getting new ones are considered. This is difficult to decide since providing two much service will involve too much costs while not providing enough services capacity will not satisfy existing customers and also create the required awareness to get more prospective customers to join as customers.
The ultimate goal therefore, is to strike on economic balance between the cost of services and the number of new customers and satisfaction of existing ones so as to retain them since the customers of these banks are highly discontented with this service rendered them. The major problem then identified in this study is that services provided by commercial banks in Nigeria are not been forming banking habit because of the inefficient services and that banks have stiff competition which hinder their rendering these services effectively.
1.3 OBJECTIVE TO THE STUDY
Both goods and require to be marked so as to create awareness and bring increased clientele for more profit. The broad objective of this study is to asses how commercial banks employ good marketing strategies in marketing their services in Nigeria in Nigeria and how this has affected the formation of banking habit by the people.
The objectives include;
1. To assess the extend of services being rendered by commercial banks in Nigeria.
2. To find out those marketing strategies applied by commercial banks in marketing service in Nigeria.
3. To identify those factors that against the efforts of banks in rendering their service.
4. To attempt to make our honest recommendations for improvement in the areas required.
5. To assess the efficiency of banks in rendering those services.
1.4 SIGNIFICANT OF THE STUDY
The study of this topic is relevant because of the following reasons:
Money plays a very important role in any economy even though money is not the penance to economic development. We agree those money matters since economic development. Nigeria is a developing economy, which needs to increase its mobilization of savings for finance to carry out development programs. Banks are in a good position to mobilize these funds. They could do this through effective and efficient marketing of their service to attract customers. The availability of finance is a prerequisite for the rapid development of any nation’s economy. This is perhaps why F.W perish and R.J. British said that “probably the only living creatures which do not require any form of finance are those for whom the enjoyment of the fruits of their efforts to obtain food is simultaneous with the making of the efforts.
Since the provision and management of this scarce resources is best facilitated by the existence and appropriate functioning of financial institutions in the economy, ie follows that banks have a vital role to play in the development of the economy. It will also helps in overcoming the competing efforts of other credit organization like Isusu clubs, savings and loans, mutual funds, co-operative societies etc. efficiency and provision of diversified services be their tools in succeeding in their task. Efficiency could been in terms of providing guide and diversified service of customers, commercial banks learnt to be indifferent to delays and dissatisfaction of their customers with competition increasing fast in the banking industry. The problems of delays in banks cannot be over looked especially if they have to retain their customers and be able to get new ones. Inefficiency, poor attitude and like cause dissatisfaction, loss of customers and eventually a decline in their profit. This study will make an invaluable contribution of banks in the marketing of their service by discovering the reasons for their inefficiency and how to overcome their competitions and getting new customers.
1.5 LIMITATION OF THE STUDY
The research work is limited to commercial banks operating in Nigeria Metropolis. Also consideration will be made on these aspects of banks marketing strategies that concern promotional activities attitude of their staff, branching and communication.
