THE ROLE OF MARKETING IN THE CONSOLIDATED BANKING SECTOR

CHAPTER ONE

INTRODUCTION

1.1     Brief Background of the Essay

Marketing is a social phenomena and great stimulus for economic progress of most societies in the world. Marketing practice makes improvement productivity possible and gives the society the improve standard of living that is required for dynamic society. Every organization whether it’s a product or a services oriented needs marketing strategy for its products or services to be existing and potential customers in other generate more revenue, make profit and remain in business.

The role of marketing in the Nigerian banking industry is relatively new. However, the need for marketing in bank stem for intense competition, not only from other banks, but also from their financial institutions. It involves the practice in the banking’ industries has brought a lot of improvement to the banking sector of our economy in terms of customer satisfaction, increase revenue generation, profitability and efficient management. The word is dynamic where change is constant on a daily bases. Therefore marketers are forced with a constantly changing environment with its attendant challenges of the needs of the customer, thereby necessitating the designing of innovative beautiful ideas and service to meet these challenges. Consequently, in order for the banks to remain viable, they keep on introducing new products and service. The success of a bank depends largely on her ability to satisfy the financial needs of the customers. Successful marketing actions are the result of management information and of applied common sense. Prosperous marketing companies or banks are those that think positively about their business environment, so developing an organization capable of seeking profitable opportunities, recognizing potentials and new product development which is a service industry. Its product cannot be touched or felt. smelt, heard tasted, and seen before purchase. These features distinguish work hard since the service includes intangibility, imperishability and lack of ownership or title transfer. Having a good knowledge helps the bank staff to perform excellently in the range of services they offered to their numerous customers.

The role of marketing in the banking industry ntai1s the use of the marketing mix strategies known as 4 pieces namely, product (services) price, place and promotion and other strategy of marketing bank services to their customers.

1.2     Statement of Problems

In Nigeria today producers and manufacturers use various media in the marketing of their goods and services in order to communicate ideas and information to groups of people in order to change or reinforce a behaviour.

Opinion is divided that amarketing has a remarkable impact on the behaviour of consumer because buyers are informed and educated about company’s offering, thereby guiding them in making a wise decision.

While another group is of the opinion that marketing is exaggerating and useful leading to low appraised of the social value of marketing. This research seeks to answer these problems and offer useful suggestion for improvement. It is very difficult to measure the effectiveness of marketing. One problem is our inability to identify the result of any given marketing or campaign. By the nature of the marketing mix, all elements including marketing are so entertained that measurement of any one by it self is impossible many factors besides marketing influence sales success. Essentially, there are only two parts to marketing i.e. what is said and how it is said. There is the problem of inadequate qualified marketing companies to handle marketing effectively and efficiently as requires by the clients. Some organizations do not recognize the importance of marketing relegated its importance to the background and by not making any budgetary allocation to it. Marketing in Nigeria exaggerates, misrepresents the abilities of products or services (Russel T. Rusell J.T, 2006)

Finally, another problem observed with some company marketing is choosing the medium that will appeal to the generality of the entire population. Companies concentrate most of their marketing on television to radio. However, this does not go well with some segment of the consumers in the society particularly the rural dwellers common medium is the radio

 1.3    Objectives of the Essay

The main objectives of this research work is to examine the role of marketing in the banking industry in post consolidation era in Nigeria. Other objectives are:

i.                    To identify the role of Marketing in Banking sector

ii.                 To investigate the impact of marketing on service promotion

iii.               To highlight the problem of  marketing in the banking sector

iv.               To examine the contributions of Marketing in  banking sector

v.                  To give useful recommendation to the identified problems

1.4       Significance of the Study

The importance of this study (Research Work) is to help banking sector that would like to embark on marketing, so as to help them in establishing a well rooted bank through the enhancement of services.  It is also of great importance to other banks in that at the end of the study, they would diligently make reference to this work and also take the necessary measures to meet up with efficient and effective marketing information system that will improve their levels of sales.

1.5       Research Hypothesis

Ho: Marketing plays an important role in the banking sector

H1: Marketing do not play important role in the banking sector

1.6       Scope Of The Study

The study is conducted in  Union bank of Nigeria Plc. This project work is particularly concerned about the Role of marketing information system and its impact in the organization.

1.7       Limitation of the Study

Inadequate fund during the course of the study compounded the limitation during the field work, which as such prevented the researcher from extending this project work to other companies.  Therefore, the study only covers the Ideal Flour Mills Ltd, Kaduna.  i.e. the geographical, social, economic and the cultural set up of the locality, types of marketing information and method of getting information to assist the marketing managers in their dealings.

1.8 HISTORICAL BACKGROUND OF GUARANTY TRUST BANK

Guaranty Trust Bank Plc was incorporated in July 1990 as a Private Limited Liability Company, wholly owned by Nigerian individuals and institutions. The bank was licensed as a commercial bank in august 1990 and commended operation in February 1991.

In September 1996, Guaranty Trust Bank pie became a public quoted company, winning the prestigious president’s award in its first year in the stock exchange and again in the year 2000 and 2003. Guaranty Trust Bank held its public offer in 2001.These was over subscribed by 1.17% and is a testimony to the bank’s liability as a profitable investment.

The bank has over the years been committed to awarding cash return on shareholder investment, remaining on of the existing institutions in Nigeria that pays both interim and final dividend each in financial year.

Guaranty Trust Bank Plc obtained universal banking license in February 2002. the bank’s reputation on an excellent financial services provider, and it’s financial capacity to meet obligation and when they fall due, these has led to a consistent appreciation of its risk assets rating to triple A (AAA), the highest rating on the Augusto & Co. limited rating scale.

They have picked up amongst others the corporate issues table award (Renter- SBA research) for 2001/2002, 2001 dividend yield award in market excellence categories of the Nigerian stock market (pearl award) and the 2001 sectional leadership award (banking sector) of the Nigerian stock market (pearl award).

In 2003, the bank was nominated and won the consumer sensitivity award in the banking sector for customer services excellence. Guaranty Trust Bank Plc remains the only Nigerian owned organization upon which the prestigious Harvard University has conducted 3 case studies. Cornfield University in the United Kingdom is also university in the United Kingdom is also compiling a brand case study on the bank.

The bank is today recognized as one of the most professional and profitability run banks in Nigerian. From a start-up capital of #25 million in 1991 the bank’ s share holder funds have grown to over #11.7 billion, with an asset base of over #150 billion. Annual revenues generated exceed #18 billion.

Customer service is at the very top of their operation they believe that the customer is king and to keep the customer satisfied they must exceed their expectation at all times. Starting from when a customer walks into any of their branches through to the completion of a transaction, their customers can feel the quality of service they will receive. A service that superseded their expectation every single time.

Furthermore, Guaranty Trust Bank has an achievement

ACHIEVEMENTS

With a capital base of 34 billion, which is well above the 25 billion minimum capital requirement of the Central Bank of Nigeria (CBN), Guaranty Trust Bank is solid stance and sound financial rooting is not in doubt.

The bank is also one of the seven settlement banks so appointed by central bank in December 2003.

GTB did not stop in Nigeria it also enters other African sister countries.

That is Guaranty Trust Bank Plc is set to commence operation soon in Accra,

Ghana following approvals received by the bank from central banks of both

Nigeria and Ghana, the bank already has two offshore subsidiaries namely

Guaranty Trust Bank (Gambia) and Guaranty Trust Bank (Sierra Leona) Ltd.

GTBANK also wins bank of the year award as a mark of Guaranty Trust Bank Plc’s outstanding performance in financial services industry in the last year the bank clinched the “bank of the year” award at the this day 0l anniversary excellent and governance award held at the expo hail of the Eko hotel and suites in Lagos on Sunday February 7th 2005.

The bank currently has over 50 branches with 30 more schedule to open by December 2005.

GTBANK total assets for the year ending February 28, 2005 stood about 2.2bilion as against the figure of #153 billion projected for the financial period ending February 2006. Profit before tax for the financial period being reviewed was #7bilion as against #5.9billin PBT project for the fiscal year ending February 2006.

1.9       Definition of Related Terms

The researcher took the pains in giving the definitions of some uncommon terms used in this study; this is done in order to make it possible for the project work to have the full knowledge of marketing information system even without being a marketer.

The following are some of the related terms used in the study:

a)     Marketing:- Marketing is a set of activities that facilitates the exchange of transaction involving “Economic goods and services,” for the ultimate purpose of satisfying human needs.  Marketing process involves planning and distribution of Ideals, goods and services to create exchange that satisfy the organisation objectives.

b)     Information:- Information is an acquired knowledge that has meaning.  In most cases, information elicited some sort of reaction or responses on the part of the receiver, i.e. information affect behaviour (Observable behaviour) i.e. movement of speech or in observable behaviour i.e. change in attitude because of the information.

c)     Marketing Environment:- This is the environment where marketing activities are being carried out and this is sub-divided into external and internal environment to the firm.  The external forces cannot be controlled by the form while the internal forces can be controlled.

d)     Marketing Intelligence:- this is the set of procedures and sources used by executives to obtain their everyday information about pertinent development in the marketing environment.

e)     Variables:- These are characteristics possessed by the member of the population.  These characteristics may be only in manner of controlling on how attend to marketing situation.

f)      Controllable Variables:- These are variables that can be controlled by the marketers in solving the marketing problems of the organisation.  These controllable variables could ne price, product, place of distribution and promotion.

g)     Data:- These are bits and prices of fast which usually take the form of recorded observation.  Data do not provide meaning unless when processed or analysed to become information i.e. meaningful knowledge.

h)     Primary Data:- These are data collected by the researcher usually for the first time, this is specifically for the purpose of solving the research problem.  The data are usually from oral interview, questionnaire etc.

i)       Secondary Data:- These are data that have been collected for the purpose of solving another research problem or data collected for other purpose, other than that of the present research being undertaken.

j)       Marketing Research:- This may be defined as the objective and systematic collection, recording, analysing interpretation and reporting of information about existing or potential market, marketing strategies and tactics, and the interaction between market, marketing methods and current or potential products or services.

k)     Uncontrollable Variables:- These are variables that cannot be controlled ordinarily by the marketers and are therefore classified as environmental constraints: They include competition, the rate of technology, the state of the economy consumers, suppliers and middlemen, the physical environment such as natural resources and the larger society with it culture.