APPRAISAL OF THE MARKETING CONCEPT IN THE BANKING INDUSTRY
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APPRAISAL OF THE MARKETING CONCEPT IN THE BANKING INDUSTRY
Chapter One: An Examination of the Marketing Concept in the Banking Industry Introduction
1.1Background of the Research
As the level of competition among firms intensifies, it becomes increasingly crucial to prioritise the identification and fulfilment of customers’ insatiable demands and desires.
The marketing notion emerged as a response to and critique of preceding concepts. Orjih (1998) discusses the topic of banking and finance in his book titled “Seminar in Banking and Finance.”
It has been determined that the marketing idea plays a crucial role in attaining organisational objectives by identifying the requirements and desires of target markets and providing the desired level of satisfaction in a more effective and efficient manner compared to competitors.
The marketing notion encompasses a mindset that emphasises market focus, customer orientation, coordinated marketing efforts, and ultimately, profitability.
The marketing concept commences with the establishment of a clearly defined market and the identification of the target audience by the organisation, as stated by Melver and Geoffrey (1980) in their book “Marketing Financial Services.”
Customer orientation refers to the approach wherein the customer’s needs are determined based on their perspective, rather than being assessed just from the company’s standpoint.
The concept of customer orientation aims to elevate consumers to a position of utmost importance, acknowledging their vital role as the driving force behind an organization’s success.
According to a statement made by a company professional, the objective extends beyond just client satisfaction. The coordination of marketing activities necessitates the correct integration and effective coordination of diverse functions such as advertising, marketing research, sales forces, and other relevant departments within the organisation.
The primary objective of companies is to generate financial gains. A company stands to generate greater profits by effectively meeting the needs of its customers in a superior manner compared to its competitors.
Hence, in the implementation of the marketing concept, organisations would manufacture goods and services that align with customer preferences, thereby optimising their profitability.
Numerous scholars have emphasised the necessity for commercial organisations to embrace the marketing concept. Kotler (1997) discusses marketing management analysis, planning, and control in his book titled “Marketing Management: Analysis, Planning, and Control.”
It has been suggested that the majority of organisations do not fully comprehend or adopt the marketing concept until they are compelled to do so due to various circumstances, such as a decline in sales, sluggish growth, shifts in client purchasing behaviour, intensified rivalry, or an escalation in marketing expenses.
The inception of banking sectors and its associated services in Nigeria may be historically traced back to a century ago. The establishment of commercial banks was necessitated by various factors, including the operations of transactional corporations, financial transactions conducted by the colonial government,
the deterioration of the existing trade system, and the growing acceptance of British silver currency. These circumstances called for an institution that could facilitate the secure and efficient transfer of funds,
handle the importation and distribution of British silver coins, and provide credit to both the government and trading companies that relied on the services offered by the banking sector.
Banks prioritised profit generation through the collection of interest on loans extended to clients, often neglecting to adequately meet the needs and expectations of these customers. The banking industries did not consider the customers as the primary source of sustenance.
Historically, banks operated within a seller’s market, allowing for the implementation of demarketing strategies. However, the banking sector has evolved into a dynamic environment. Consequently, in order to successfully compete in the industry and meet consumer demands, banks must prioritise efficiency and effectiveness.
In both scarce and plentiful economic contexts, the primary challenge lies not in the manufacturing process itself, but rather in the domain of marketing.
A crucial factor for achieving successful mass production is the recognition and acceptance of the fact that widespread marketing efforts are essential. Hence, the consideration of marketing emerges as the paramount issue in all aspects of corporate strategy.
1.2 Statement of the Problems
The banking industry has been subject to widespread criticism regarding the quality of services provided by banks, drawing attention from individuals across various sectors of society. Banking services are subject to significant criticism from several stakeholders, including government officials, business professionals, media outlets, and the general people.
The grievances encompass a variety of concerns, including issues related to operational effectiveness, perceived bias, extended wait times for cheque processing and withdrawals, delays in loan or credit approvals, and an unsatisfactory demeanour exhibited by bank personnel.
The government, which holds a significant number of shares in most banks, is frequently accused of banks’ insufficient alignment with the nation’s aspirations. That is the reason why one time the general staff had a cause to call to banks to leave arm chair banking and adopt the marketing concept in carrying out banking activities.
Many banks fail to prioritise their customers as they are expected to do. In the current landscape, a high level of competition exists, and achieving accuracy in competition necessitates the application of marketing concepts.
Are these criticisms of banks warranted, or are they simply a comprehensive analysis of the banking industry’s profitability during a period of economic downturn?
1.3 Research Objectives
The primary objective of this study is to select a certain segment within the banking business and analyse the banks’ attitude towards their customers.
The objective of this study is to assess the use of the marketing idea by banks as a fundamental approach for providing services to their clients.
The objective of this study is to examine the diverse strategies employed by banks in marketing their services to customers in the banking industry.
The objective of this study is to assess the efficacy of the marketing mix in the promotion of financial services.
In order to ascertain the challenges associated with the marketing of banking services, an analysis must be conducted.
In order to provide remedies for the issue pertaining to the marketing of financial services.
In order to evaluate marketing strategies and provide suggestions for enhancing the effectiveness of marketing services, a comprehensive assessment is necessary.
1.4 Research Questions
What is the duration of time that clients typically spend in various banks during a standard banking transaction?
What is the response of customers about the provision of banking services?
– What is the nature of the relationship between bank workers and customers?
Do banks offer sufficient services and infrastructure facilities?
Do banks employ marketing principles to meet client satisfaction in the provision of their services?
1.5 Research Hypothesis
The purpose of this project is to determine whether to adopt the null or alternative hypothesis, as mentioned below.
Hypothesis: The application of marketing concepts does not serve as the foundation for delivering effective service to bank clients by banks.
Greetings, The application of marketing concepts serves as the foundation for banks to provide excellent services to their clients in the banking industry.
Hypothesis: The issue of time consumption is not a significant problem within the realm of financial services.
Greetings, One of the challenges encountered in the provision of financial services is the significant amount of time required.
The null hypothesis posits that the marketing of banking services does not have a substantial impact.
Greetings, The marketing of banking services has played a substantial role in enhancing the profitability of banks.
1.6 Significance of the Research
The banking industry has faced numerous concerns over their provision of services to customers. The company does not perceive its customers as the primary authority. The researcher intends to conduct a study on the practises of banks and ascertain their use of the marketing concept within the context of their services.
The researcher seeks to establish an empirical foundation to substantiate existing sources regarding the negative perception of banks among individuals. Additionally, the researcher aims to provide recommendations to banks on enhancing their services through the implementation of marketing strategies.
The adoption of marketing as a way of life might be seen as a magical formula. In order to succeed, a business should shift its perspective from being solely focused on creating goods and services to actively acquiring customers and implementing strategies that will attract individuals to engage with the company.
To what extent do banks possess comprehensive knowledge about its clientele, and do they prioritise customer-centricity or profit maximisation? If my conclusions are deemed invalid, it might be argued that the critiques lack a solid foundation,
as they appear to stem from the banks’ overall success. If the banks’ services were truly inadequate, it would be perplexing to witness such substantial profitability. Are they engaging in these practises to the harm of their customers?
1.7 Scope and Limitations of the Study
The extent of this study would be extensive if it were to be conducted across all commercial banks in Nigeria. The study is constrained by limitations in terms of time and resources, which prevent a comprehensive examination of the entire nation.
The scope of this study is restricted to the city of Enugu, and therefore, the generalizability of the findings to all banks in Nigeria may be limited. However, it is reasonable to infer that the observations made regarding banks in Enugu can be reasonably extrapolated to other banks in the country.
1.8 Definition of Terms
Marketing is an essential business function that involves the identification and comprehension of client needs and desires, followed by the provision of goods or services that effectively meet those needs.
The Chartered Institute of Marketing has provided a definition of marketing as the managerial process that entails the identification, anticipation, and profitable satisfaction of consumer needs.
Banking is defined by the Banking Act of 1979 and the Bank and Other Financial Institutions Act (BoFIA) of 1991, Section 25. According to these acts, banking encompasses various activities such as accepting deposits and collecting cheques and other instruments on behalf of customers,
facilitating the payment of cheques drawn by customers, offering financial assistance to customers through overdrafts or loans, providing foreign exchange services to individuals and corporate customers engaged in m
The marketing concept is a managerial perspective that asserts the primary objective of an organisation is to identify the needs and desires of a specific market segment and subsequently ensure that the organisation is capable of delivering the desired satisfactions in a more effective and efficient manner compared to its competitors.
Products refer to tangible or intangible items that are made available to the market with the purpose of attracting attention, being acquired, used, or consumed.
Services refer to intangible activities that are distinct and identifiable, aiming to satisfy the needs and desires of consumers and/or industry users. It is important to note that services are distinct from other services.
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