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THE MARKETING OF COMMERCIAL BANK SERVICES

CHAPTER ONE

INTRODUCTION

1.1BACKGROUND OF THE STUDY

Marketing in relation to commercial bank’s services in Nigeria has not been able to play its part or role in the banking sector for the reason that it is being regarded as mere advertisement or ordinary public relation. And so, marketing was linked to manufacturing firms, with service inductance such as banks, insurance etc being left to roast. In present time, marketing activities have acquired increased importance. This is due to the fact that competition in banks has increased.

Apart from the increase in the number of banks, other types of financial institutions exist coupled with the fact that the federal military government in 1992 introduced community banking in Nigeria under the community bank’s decree (1992) promulgated by ibralim babangida, the then head of s Tate. These institutions offer services similar and comparable to those offered by commercial banks. In this way competition arises as a good concidtion for marketing to exist in the banking industry or sector. Some of the example, of these other financial institutions are finace house, investment club, credit co- operative societies, and loan association etc. they have also expanded their services in order to compete favorably for demand and time deposits etc for their customers banks for the simple reason that they operate in environment near and know to their clients.

Although the bank customer has and is becoming more and more sophisticated in his needs of the non basic services of commercial banks, still the greater percentage of the Nigeria population is yet to know and avail themselves the opportunity. For instance, in some local communities even with the introduction of community banking, about 90 percent of their inhabitant, if not more are yet to know and avail themselves of these services. Again most of these commercial banks are situated in urban area, thereby marketing the services to the urban dealers who are already aware of such services. At least a proportion if not in totality. And this is the reason customers cluster at banks offices with the bankers paying little or no attention to their customers.

To overcome all these, the banks must adapt to the changing environment and requirements of their customers. Since operation orientation had dominated the banking activities while marketing has not played and significant role.

The provision of financial services to customers is the stock in trade of commercial banks in Nigeria. Some of the services of include: collection and payments of cheques, granting of credit facilities, acting as trustees and executors, buying and selling of stock and shares, issuing of bankers draft etc.

            All the above make up their stock in trade and the way and manner in which these services are carried out constitute their marketing strategies.

Therefore, it is obvious that these marketing strategies in this sense is, the attitude of their staffs, quicks attendance to customers, creation of good public image i.e communication, opening of more branches (distribution)etc.

            All these, being said but not actually done, since the way banks services near the required standard. Banks treat their customers the way they like, infect most banks in Nigeria believe that it is their right to delay customer.

 These has resulted to long queues in banks with customer sitting and even some standing waiting for their turns.

            In view of all these it is obvious that banks should start or increase their marketing activities since some have not started at all.

The era or period of the sellers market has come and gone. And so banks should cultivate the habit of marketing their services in a way to improve and promote image and also increase their patronage.

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.

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