DEPARTMENT OF BANKING &FINANCE, IMPACT OF MARKETING OF FINANCIAL SERVICES ON NIGERIA BANKING SYSTEM “USING UNION BANK OF NIGERIA PLC
IMPACT OF MARKETING OF FINANCIAL
SERVICES ON NIGERIA
BANKING SYSTEM
“USING UNION BANK OF NIGERIA PLC, ILORIN
BRANCH AS A CASE STUDY,
TABLE OF CONTENT
Title Page
Certification
Dedication
Acknowledgment
Table of contents
CHAPTER
ONE INDUCTION
1 .1 Historical background of the study https://www.facebook.com/obinotech
1 .2 Statement of the study
1 .3 Justification of the study
1.4 Objective of the study
1.5 Scope and limitation of the study
1.6 Definition of term
1.7 Research methodology
1.8 Capitalization
CHAPTER TWO LITERATURE
REVIEW
2.0 Review of literature
2.1 Historical background of
union bank plc 15
2.2 Strategy of marketing
banks service. 18
23 Marketing philosophies in the context of
services in the commercial bank.
2 4 Business advisory services
CHAPTER
THREE RESEARCH METHODOLOGY
3.0 Research methodology
3.1 Types and source of data collection
3.2 Primary data
3.3 Secondary data
3.4 Method of data collection
3.5 Impact of marketing service on banking system
3.6 Problem of marketing banking services.
CHAPTER
FOUR DATA PRESENTATION AND ANALYSIS
4.0 Data presentation and analysis
4.1 Introduction
4.2 Presentation and analysis of data according
research Questionnaire
4.3 Data technique
4.4 Data design
4:5 Hypothesis
4.6 Generalization base on Tested hypothesis
CHAPTER
FIVE: FINDING, SUMMARY, CONCLUSION,
RECOMMENDATION
5.0 Finding
5.1 Summary
5.2 Conclusion
5. 3 Recommendation
References
Appendix
CHAPTER
ONE: INTRODUCTION
1.O
HISTORICAL BACKGROUND OF THE STUDY
The
economic turbulence of the last decades has posed many challenges to marketing
management all over the world. Changes in growth rate, relatively high
inflation rate, high interest rate necessary more aggressive rivals are facing
many firms and need to respond and adapt for survival and prosperity has made
many firms in which banks are not exempted to appreciate the importance of a
good marketing philosophy.
Success
of a firm means finding way of doing things to achieve maximum effectiveness in
the application of resources to meet customer’s need.
In
this way, firms are obliged to scrutinize every area of expenditures to
minimize waste and maximize returns.
The introduction of 13-
point Reform Agenda in which 2 (two) out of them has been implemented i.e. with
drawl of public fund from banks and introduction of .N100 billion
re-capitalization has led to sanity in the banking industry and also made the
sector to remain for the survival of the fittest. These has led to the
introduction of a lot of restructuring and introduction of innovative services
upon which good and comprehensive marketing strategies of various banking
services are built to attract more customers and retain the patronage of the
existing ones.
The
introduction of this research work cannot be completed without looking or
tracing the historical background of the commercial bank in Nigeria. The
initiative for the establishment of bank was taken in the Lagos office of Eider Dumpster Company by the
people who were merchants without any special knowledge of banking and with the
support of the colonial government, the formation of bank of British West
Africa (BBWA) was announced in may, 1893. The bank was renamed Bank of West Africa
(BWA) in 1956 to reflect the new independent status of the West
Africa countries served by the bank. In 1969, following changes in
ownership structure of the parent company in the U.K. The bank was further renamed
Standard bank Nigeria Limited (SBNL). Basic changes in the equity structure of
the bank leading to majority equity holdings by Nigerian institutions and
individuals during the period 1973 — 1978 necessitated further change of name
and in 1978, the company was renamed First Bank of Nigeria Limited. Other
important aspects of development took place in the equity structure, management
and loans policies of the bank.
Commercial
banking predicts central and merchant banking in Nigeria; hence the awareness for
making institutionalized savings was primarily induced by the commercial banks.
These banks form the nucleus of the banking system.
Their
major sources of funds are deposit liabilities applied primarily to, investment
in financial and fixed assets, loans and advances.
Commercial
banking later spread to Europe and became more organized through the activities
of Gold Smith in Britain.
In
the quest for looking for a place to keep their valuables, the people have
considered some members of the public for the purpose, including the
Accountants, Solicitors (who were formerly called scriveners) the king and the
Gold smith.
The
Gold Smith issued receipts to cover various deposits made with them by the
people, these receipts were in denominations and DEARER of the receipts.
The
Imperativeness of this business to the Gold Smith attracted the king’s
attention and subsequently led to the establishment of bank of England.
1.2 STATEMENT OF THE PROBLEM:
This
research work will focus on the importance of the marketing of the bank
services as well as the difficulties posed at achieving their marketing goals..
It is a known fact today that the banking industry is highly competitive and
volatile in nature i.e. the bank will want to maximize its profit through the
increase in the number of customers that patronize it.
In
banking system of today, banks are faced with problem of marketing strategy to
adopt, to increase the new trend of its customer.
The
practice of universal banking in Nigeria is likely to create
practical problems with regulatory and ethical standard.
It
is Greed, insider abuse and sharp practices in the banking sector attributed to
image banks
Banks
customers are already complaining in excess bank charges and unexplained debit
to their accounts.
Banks
also faced with the problem of the kind of service to initiate so as to attract
the customers.
This
research work is all out to provide solution to all these stated problems,
which faced the banks in the marketing of financial services.
1.3 JUSTIFICATION OFTHE STUDY:
Marketing
is a concept, which has not be given due and serious attention among banks in Nigeria because of the seller’s market nature of
Nigeria
banking industry.
But,
due to deregulation of the industry in 1985 and the implementation of the
economic reform program of the present administration couple with the increased
competition and persistent increase in the numbers of enlighten customers,
banking has changed from “sit down” or “arm chair” to a more sophisticated,
advance, mobile and electronic system. Hence, the need for banks to be more
focused and conscious in formulating their marking programs in other words,
banks need to build a strong and comprehensive marketing strategies in order to
conquer large portion of the midst of competitors.
The
major importance of this research work is to provide and enlightened materials
for both management and staff of banks, students and the general public in
appreciating the importance of an effective marketing concept.
This
project will also be useful for any researcher who may want to make further
Enquirer on this topic
1.4
OBJECTIVE AND PURPOSE OF THE STUDY:
The
major aim and objective of this study is to identify, examine, highlight and
analyze the importance of marketing of business advisory services in the
Nigerian banking industry. Be side this, there are some other minor goals of
this project. These include: -
1. To evaluate the importance of marketing in banking service.
ii. To highlight the peculiar challenges in marketing banks
service.
iii.
To examine how marketing concept can
be used in achieving hank’s objectives.
iv. `To examine the roles of customers in
drawing marketing program.
v. To analyze the problem associated with
marketing bank’s service.
vi. To enumerate the impact of marketing bank services.
1.5
SCOPES AND LIMITATION OF THE STUDY:
The
research work only focused on the banking industry with special emphasis on
Union Bank Plc, llorin branch being the case study organization, It also
restricts findings on relevance of marketing of banking services with emphasis
on the business advisory service.
This
project, like any similar academic research work, has some constraints.
These
are:
i. Time available is too short to combine
this project work with any other academic programs.
ii. Financial constraint: With current
economic situation in the it impossible to get enough financial assistance,
which also determines the extent to which the study can be carried out. jr
iii. Material and data in adequacy: banks
staff own their customers duties of screening.
These
alone will make it impossible to get enough data and information as regard
primary source of information.
1.6 DEFINITIONS OF TERM
1. Marketing: A set of activities involve in
getting the right goods or service to the right place at the right price in the
right qualities and quantities at the right time.
2. Market: - Numbers of current and
prospective consumer of a product.
3. Marketing philosophy: - The idea or system
of formulating and implementing marketing policies.
4. Marketing concept: - Marketing principles,
which say that customer’s satisfaction must not be over — emphasis at all
stages of production.
5. Seller’s market: - a market where a
producer has automatic customers for his product.
6. Patronage:- The rate at which customer demand for a products.
7. Marketing Strategies: - Marketing plan programs.
8. Arm chair system: - Passive or quiet
banking system with little or no marketing promotional activities.
9. Sophisticated system: - Banking system that
makes use of advance technology in marketing their products e.g. mobile banking
and electronic banking.
10. Financed wash — up: - financial hardship.
11. Economics Turbulence: - Economics re- shake
up or re — adjustment.
12. Business Advisory service: -The areas covered
commercial bank business advisory services.
I.7
RESEARCH METHODOLOGY:
This
is descriptive and inferential in nature. The types and sours of data employed
are both primary and secondary data. Those primary data collected directly from
the staffs of Union Bank of Nigeria Plc, Ilorin
through the administration of questionnaires, Interviews and observation etc.
The
secondary data were those obtained from published
material
like textbooks, personal records, newspapers and journal,.
etc.
1.8
PLAN AND ORGANIZATION
This
project is divided into five chapters. Chapter one contains the introduction,
statement of the problem, need for the study, objective of the study,
limitation of the study, scope of the study and Definition of terms
organization and plan of the study.
Chapter
two treat past and current literature review which include review of
literature, marketing philosophies in the context of banking services, strategy
of marketing bank service, business advisory service, characteristic of
marketing bank services.
Chapter
three highlight research method and case study effect of the topic includes
research methodology, types and sources of data collection, primary data,
secondary data, method of data collection impact of marketing
Banking
service on banking system, problem of marketing banking services.
Chapter
four discusses, the data presentation analysis, data techniques, data design
and hypothesis.
Finally
chapter five throw light on the findings, summary, conclusion and
recommendation
CHAPTER
TWO
LITERATURE
REVIEW
2.0
REVIEW OF LITERATURE
There
are different definitions of marketing as given by different marketing
scholars, institutions, and association e.t.c. According to Philip Kotler
(1988) Marketing is a human activities directed at satisfying needs and want
through the exchange process. For a better understanding of this definition we
have to look at some marketing concepts.
Nwokoye
(1991) defined marketing as a set of activities that facilitate exchange
transaction involving economic goods and services for ultimate purpose of
satisfying human needs.
British
Institute of Marketing (BIM) defined it as managerial process for anticipation,
identification and satisfaction of needs and wants of the target marketing at a
profit to the organization.
Until
recent, Nigerian banking industry has been characterized by what experts called
“arm chair banking”, Arm Chair in the sense that, bank managers usually relax
in their offices, expecting customers to come and discuss their business
matters with them.
This
feature of banking in Nigeria,
according to Alli J.O. (1992) is not surprising when one considers the fact
that the banking industry had hitherto been dominated “by few bigs” expatriate
indigenous banks. This situation created what economists refers to as seller
market where seller dictates the trend of the market as to what to sell, whom
to buy his product and at what price.
Since
competition was more or less unknown in the immediate post-banking era, there
was little or no need for marketing techniques. But the introduction of
Structural Adjustment program (SAP) pave way for the increase in the numbers of
licensed banks as result of deregulation, made competition keener in the
banking industry. The new generation banks according to All, (1999) came with
sophisticated computer equipment which facilities business transactions thus,
giving them an edge over the old generation banks in term of efficiency. Mostly
probably, the new banks know quit well that old bank were already established
and also occupied large part of the market. Hence, the need for aggressive
marketing strategies to able to complete favorably and as well capture
reasonable part of the market.
The
new banks also saw the need to develop and package, a financial service which
people want and not just sell to people what they (the banks) have as it was in
the case of Alli J.O (1991)
With
these trends, it is therefore, imperative for banks to market their Service as
observed by Nwankwo G.O. (1991)
He
said it is pertinent, indeed imperatwe that, practical bankers should
understand and fully appreciated the importance and strategies of marketing in
banking services.
Therefore,
banking like any other service industry, depend largely on the marketing place
for its profitability and survivals and must adapt to change in the business
environment (economic, legal, Technological, political and social cultural)
where it operates.
Marketing
a product or service is different from selling a product or service selling a
product, according to Olatunji, S.O (1991) simply implies putting a product
across to customers, marketing a product mean more than that. It involves
identifying customer’s needs and tailoring the product or services toward the
needs.
Kotler
P. (1988) definer marketing as a social and managerial process by which
individual and groups obtain what they needs want through the creating and
promotion.
Nwankwo
G.O. (1991) defines marketing as management process that identifies,
anticipates, and satisfies customer’s requirements profitably. Contained in
this definition are a concept and a several techniques. The concepts place the
customers in the forefront of the corporate thinking while the techniques
permits the concept to be successfully, economically a profitably implemented.
From
the definition above, it can be deduced that he marketing to be effectively and
efficiently done, there is need to embrace and appreciate the role of marketing
mix i.e. the appropriate and profitable combinations factors that aids the
achievement of marketing objectives otherwise know as 4ps of marketing
(product, place, price and promotion) Boom and Bither. Olatunji S.c. Year 19991
even proposes 7ps for services marketing mix by including other, 3ps, which are
people, process and physical evidence (environment) to the original 4ps. He
argues that marketing mix of 4ps is rather inadequate for service marketing.
Kotle
P. (1988) described customer’s satisfactions as the “peak” of marketing
concept; the largest hurdle a firm has to overcome to develop a marketing
orientation. Therefore banks must see themselves as existing to satisfy the
financial needs of individuals, business and other entities. Customers are the
central theme of any business and survival of any business begins and ends with
the customers without his or her support the business would inevitably fail.
Nwankwo G.O. (1991) in effective marketing therefore, the focus should be on
the customer for without a total commitment to him on the part of the company
as a whole, the application of advanced marketing techniques on banking service
will only have limited and brief effects.
Nwankwo
G.O. (1991) observed that effective marketing starts with need identification
once a need has been identified, for the customers, the firm develops product
to suit this need. Profit is therefore made through the satisfaction of the
need of the firms product or services in dynamic situation in which the firm
has to keep scouting the environment to see whether it’s service is still
satisfying a need and to know about the emerging need of the customer. Guiding
by the marketing concept, bank would satisfy customer financial need. This
would allow banks to realize that financial needs vary among different groups
of people and that the services to meet those needs should be differentiates
according to the customer type. Nwankwo G.O (1991) further identified some
strategies for effective marketing of banking services.
2.1
HISTORICAL BACKGROUND OF UNION BANK PLC
BRIEF
HISTORY OF UNION BANK OF NIGERIA,
PLC
The
present day union bank of Nigeria,
plc is one of the first generation banks in Nigeria establishes in1917 during
the colonial era. Its first office in Nigeria was located at the old marina Lagos. The other branches
were opened in Jos and Port Harcourt
the same year. In those days, it was known as Barclay bank DCO that is Dominion
colonial oversea.
The
period of 1958 —1978 was a landmark ion the history of the Nigeria banking
industry, as it marked the establishment of central bank of Nigeria in 1958 and
in enactment of CBN act of the same years which among other things introduce
mandatory liquidity ratio in the banking system.
The
period marked the transformation of union bank to its present position. Asa
result of this, development the bank was able to set up over 50 additional
branches between 1959 and 1970. This trend has a since continued.
Today,
the union bank of Nigeria,
has well over 250branch throughout the country
In
1969 a banking Decree was enacted to repeal the earlier Banking legislation in
the country .the new low made it mandatory for bank to register as Nigeria
companies like other foreign business operating in the country.
After
complaining with the new law the bank change it name to
Barclays
Bank of Nigeria Limited but then it was still a wholly owned subsiding of
Barclay Bank International Limited London.
One
of the landmarks of the Bank’s took place in 1979 when Barclay’s bank decided
to sell 50% of it shareholding in the Bank to Nigeria thus reduced their equity
shareholding to 20%. As a result of the development name of the bank was
changed in 1979 from Barclays Bank of Nigeria Limited to Union Bank of Nigeria
Limited to reflect to the new image and new ownership structure of the bank.
In
1986, the bank was the first Nigeria Bank to record Ni billion marks in saving
deposits. It won the Nigerian stock exchange merit award in the financial
sector for six consecutive years from 1989- 1994 for quality presentation of
its annual account and the conduct of its Annual General Meeting.
The
Bank has a dynamic organizational structure, which can with stand the
challenges of our time. Union Bank is made up of thousand of people working
together for a common goal, profit, through efficient services. The various
levels of official cannot function effectively without the co-operation of one
another. The area manages for instance cannot function successfully alone
unless his branch managers perform. In the same vein, Branch manager relies to
a large extent on his accountant and heads of department in order to perform
efficiently. Likewise the head office relies heavily on both the area and
branch offices.
The
introductions of the new capital base of banks (N25 million in year 2005
necessitated the merging of the bank with its subsidiaries such as Union
Merchant Bank Limited Union saving and loan limited in order to survive the
huddles and challenges of re-capitalization and consolidation Union Bank is
among the 25mega banks that were able to escape the huddles of
re-capitalization
The
Bank was announced to be the most capitalized bank in the country at the floor
of exchange.
In
the current bank capital base requirement, union Bank has been the largest
capital base bank with the sum of N100 billion and only Union Bank has the best
share price now.
2.2
STRATEGIES OF MARKETING BANKING SERVICES
Nkwankwo
G.O (1991) further identified some strategies for effective marketing of bank
services, includes among others: -
1. Knowledge:- In marketing as in ordinary
ways of life, no planning, or strategy has any chance of success or like by to
effective, if it does not derive from knowledge. Knowledge alone
of
course, is not enough, but its absence in any endeavor spells doom out is
catastrophic in effect. Effective marketing must have its foundation in
knowledge.
2. Banking Environment:- Banks operate in an
environment. The environment defined the strength and aggravates the
weaknesses, but if the environment is properly analyzed, understood and
appreciated, it can prove an invaluable asset to the achievement of cooperate
goals of which effective marketing is one. It follows therefore, that effective
marketing enquire a through analysis and appreciation of the environment in
which the bank operates. Banking environment includes, political, economic,
legal technology, and social, cultural environment.
3. Another very important information put in
effective marketing as NWANKWO G.O (2001) identifies is the psychology of
finance.
This
is summarized as business banking customer profile and environment inputs.
Business of banking as any other business has the interest of shareholders. But
it has other important objectives of minimizing liquidity in the interest of
its depositors and the objective to contribute to the country. The conflicts in
these most attempt and successfully reconcile the three objectives.
Customers
profile involves identification of the types of customer, what are their
financial needs? What is their level of awareness of band services? Where, when
and what price to sell the project? Environment input require an understanding
of the prevailing political and economic issues at any point in time and
government policies and approach on ways and means of dealing with the issues.
4. Another weapon identified by Nwankwo is
market research to determine among other things the level of market penetration
achieved by the banks various services. It is also necessary to identify the
gap or gaps in the market in which new products are most likely to be
successful and to measure customer reaction to and customer’s satisfaction with
the new product.
5. Segment is another strategy with the
information acquired in market research, the level and extent of market
segmentation can be determined to enable groups of customer with broadly
similar interest to be identified, so that services can be tailored to their
specific requirements and product customers groups, which can be emphasized or
de-emphases, can be identified.
6. Public relations and advertising are the
last instruments identifid by Nwankwo. They are the tools the marketing manager
uses to “Puch” his services to the customers.
CHARACTERISTIC OF MARKETING BANKING
SERVICE
Banking
services have certain characteristic which makes their marketing different from
that of tangible products which are identified by Olatunji S.O (1991) as: -
A. Intangibility: - This mean that services
cannot be seen, felt, tasted, touches or otherwise experience by the senses.
B. Inseparability: - This implies that
services cannot be separated from their services or selling.
C. Heterogeneity: - This refers to the fact
services product cannot be standardized, for example it is not possible to
deliver the same standard of banking service in all branches.
0. Perishability: - These mean that services
cannot be stored. The four characteristic of service product stated above, pose
marketing challenges in planning price, promotion and distribution.
However,
banks marketing must perform two major functions, it must attract deposits on
one hand and attracts borrowers and users of other bank services on the other
essentially, a bank has to device marketing strategy to attract deposit which
stands as the raw materials input and also market its output in the form of
loan and advance, and other annularly services targeted market. The
intermediation nature of banking services (i.e. double sided nature) creates
special marketing problems which appears more complex than those normally faced
by commercial enterprises.
The
post Structural Adjustment Programme (SAP) era Nigeria witnessed great effort by
banks to embrace the marketing concept. Also the reforms of the banking
industry necessitated the invention of many innovative products such as
computer networking, electronic banking (E. Banking) flash card of first inland
bank, vault card, Automated Teller Machine (AT M). Money grams etc. are such
ways of managing the input and output end for banking service using marketing
concept.
2.3
MARKETING PHILOSOPHIES IN THE CONTEXT OF BANKING SERVICES
Marketing
banking services have certain marketing philosophies which at sometime or
another have been held by the managers of business organization. These are the
product concept, the production concept, the selling concept and the marketing
concept. These could been describe as follows:
iii. THE
PRODUCT CONCEPT: - Consumers will buy those services that offer the best
quality and value for the price. According to this approach, a bank should
therefore direct its efforts at improving their quality of this approach, a
bank should therefore direct its efforts at improving their quality of service,
and by doing so, customers will ‘buy’ them.
ii. THE
PRODUCTION CONCEPT: - Managers assume that customers will ‘buy’ the
services that a bank offers to them, provided that they are accessible and
affordable.
According
to this approach, banks should therefore develop services that they consider
useful, at an affordable price, and they will easily sell them.
iii.
THE
SELLING CONCEPT: - Banks assume that customers will not buy their services,
or will not buy enough of them, unless a positive effort is made by the bank to
sell them. The production and product concepts are based on the view that
customers will buy if the product or services is available at the right
quality. The selling concept, in contrast, is that a bank should develop its
services, but then goes out and sell them hard. For bank, this concept implies
the need not only for advertising and other sales promotion activities but also
the aggressive selling or active “persuasive” selling of services by branch
managers. The selling concept does not properly consider whether customers
really want the services in the first place, it is concerned with selling them
to anyone who can be persuaded to buy.
iv. THE
MARKET CONCEPT: -This is a concept which has been developed since 1950’s
and which is now regarded as the ‘correct’ philosophy for long-term commercial
success. Bank accept that the task is to find out the needs and wants of target
market, and to adapt to their organization and products or services to
satisfying those needs and wants more effectively and efficiently than
competitor. The task of persuading customers to buy the services that the bank
is offering will therefore be much easier.
2.4 BUSINESS
ADVISORY SERVICES
In
the business world, there is no all — knowing self-sufficient and embodiment of
leer in the business. At one time or the other, there will be need for advice
or word of knowledge from those business people who know better and more
experienced in that field more than the person seeking the idea,
Banks
provides business advisory service to their customers since the bank or banker
is regarded as epitome of business acumen, so many people behave in their
banker when it comes to business advisory services.
Corporate
advice is also available to businesses from merchant
banks, for example on: -
(a) Raising loan capital or equity capital;.
(b) The prospects for a stock market S. S. M
flotation.
(c) Take-over and mergers.
A
merchant bank often represents the ‘predator’ company.
In
this chapter, we shall concentrate on the more general range of business advice
that commercial bank might offer:
(I) Through its branch managers.
(ii)
Through its bank advisory
specialists. What sort of advice provided?
The
areas covered by a commercial banks include the following:
1. Objectives of the business: - Helping the business to identify
its
corporate objectives, to establish a corporate (long term) plan for the achievement
of those objectives, the communication of objective to manager and other
employees responsible for their achievement and the measurement of actual
results against corporate planning targets.
2. Budgeting: - emphasizing and explaining the
importance of budgets for a business, as a means for planning in detail for the
achievement of corporate objectives; explaining’ how budgets are prepared and
the assumption’ that might be made to prepare them, measuring actual
performance against the budget and perhaps quantifying variations, in a system
of budgetary control.
3. Costing:- Helping the customer to choose a
costing system and giving advice on how to set it up in operation. Costing
techniques such as marginal costing, absorption, costing and standard costing
and costing contract work e.g. building construction contracts can be
explained.
4. Pricing policy: - Advice may cover
explanations of various ways of setting prices, the sensitivity of market
demand to price changes and providing the customer with market data that may
assist pricing decisions. (Advice on pricing policies may be needed if the
customer’s turnover and / or profits are suffering from poorly-conceived
pricing of products and services).
5. Credit Control: - the client may be given
advice on the amount and length of credit offered to trade customers, the
client’s debt experience and the efficiency of his debt collection procedures.
6. Cash Flow:- Adequate management of the
planning and control of cash flow is essential to every business. The client
may be given advice on the importance of cash flow, forecasting the frequency
and the forecast period (e.g. weekly cash flow forecasting, or monthly,
quarterly, annual forecasting etc)
monitoring
actual cash flow by comparing it with the budget.
7. Stock control: - Helping the client to
determine the appropriate
level
of stock to hold, keeping adequate and accurate stock records, liaison between
production, control and the sales staff for control of finished goods stock
levels in a manufacturing business, advice on the insurance of stock.
8. Management accounting reports: - If the
client is poorly served with management accounting reports, advice might be
offered on the type of information system that ought to be established within
the business. (e.g. on the profitability of the business, and of different sectors
of the business).
9. Book keeping and financial accounting: -
where a client has an inadequate book keeping system, advice can be given about
the installation of a suitable system and the office equipment needed to
operate it, audit procedures and the preparation of financial account (P& L
account, balance sheet etc).
10. Capital investment appraisal: - Advice and
assistance could be offered about the evaluation of projects for capital
spending, including the techniques of investment appraisal such as DCF.
11. Financing: - Advice on sources of finance
including loans, sale and leaseback, leasing and bill discounting. Also advice,
on whether the client is utilizing his assets efficiently, or whether too much
finance is being used (i.e. too many assets are being used) to carry out the
operation of the business.
12. Import /export business:- Methods of
financing international trade, finding agents or distributors abroad, providing
information about overseas markets and advice on the use of N E X I M facilities
or international factor.
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.0
RESEARCH METHODOLOGY
3.1 TYPES
AND SOURCES OF DATA COLLECTION
The
research will use both primary and secondary source of information.
Primary
sources are those methods collect data to directly used from the staff of Union
Bank of Nigeria Plc, Ilorin, through the. Administration of questionnaire which
was done mainly buy hand to various individual respondents.
Secondary
sources were those obtained from published materials, like textbooks, journals,
records, financial report, newspapers and Internets database etc.
3.2 PRIMARY DATA
In
the process of the data collection, the primary data is based on
questionnaires, which were responded to accurately by the staff and management
of the case study. The researcher also carried out personal interview with the
management and staff of Union Bank of Nigeria Plc.
Primary
source is when a research makes a surucy to gather information on a particular
issue, to ask question through personal interviews, observation, discussion,
questionnaire Generally, information obtained through personal contact or by
sending questionnaire is called primary data. These include the used of company
records, Annual report notes and letter. Primary data determine the originality
if research work. They enable the researcher to express himself in his own way
without following the bases of other people. Primary data must be used with
caution since they need a lot of imagination annualizing and interpreting the
materials to suet the subject of the research.
To
sit the purpose of this research one type of questionnaire was printed and
distributed to the staff of the Union Bank in Ilorin. The questionnaire contains general
question where respondent will simply tile the appropriate choice or option
however, not all the questions are related to the hypothesis some questions are
to confirm or disconfirm the researcher’s previous assumptions whole others are
to test the objectivity of the respondents in previous question. But the researcher
has more in using questionnaire as the main source of getting primary
information on the research topic. 30 questionnaires has been administered in
the course of carrying out the research,
they were distributed to the appropriate personnel (Union Bank staff).
3.3
SECONDARY DATA
These
are data that others have already documents including books, magazine,
journals, Annual report, newspaper, miscellaneous sources and Internet.
3.4
METHOD OF DATA COLLECTION.
As
pointed out earlier that the main source of data are both the primary and
secondary sources. This was done through the administration of questionnaire
completed by bank staffers of different status and customer of Union Bank of
Nigeria Plc.
The
method used in analyzing the data are both description and inferential
statistics.
The
descriptive method involves the use of tables and bar graph while the
inferential statistic method involves the use of chi- square and hypothesis
distribution of model was used to test whether the data collection would lead
to the acceptance or rejection of either the null hypothesis (Ho) and
alternative hypothesis (Hi).
Chi-square test:- x2 = E (Fo - Fe)2
Fo
Where Fo = Observed
frequency.
Fe = Expected or theoretical
frequency.
E = Expected
Outcome.
X2 = E(x-m)2
O
Where
X = Variable
M = mean.
Fo —
Fe = Observed frequency — expected frequency.
X2
2 = Chi square calculated
X2
Chi square table.
V = degree of freedom
(Row—i) (Column—i)
The level of significance to
be used is 5% where expected = rt + ct
N
FE expected frequency = £ rt
x ct decision
N
RULE
OPTION.
If X2
C <X2 + accept H1 and reject H0
If X2
C > X2 + accept H0 and reject H1.
3.5
THE IMPACT OF MARKETING FINANCIAL SERVICES ON
BANKING
SYSTEM.
Marketing
of financed service has impacted the economy in a tremendous way. The essence
of marketing is to make people aware of the benefit accrued to them by banking
with a particular banks using union bank of Nigeria as a case study. This bank
has impacted the economy through the availability of numerous customers. The
following are the inapt of marketing financial service;
i. Marketing of financial service enable the
customers of a particular bank to have access to some required service.
Corporate customers of bank through the available service makes the enayury on
their account down load and print statements from the comfort and convenience
of their offices. This service offered by bank has helped the corporate bodies
to have access to their accent all the time.
ii. Marketing of financial service has improved or developed
banking
habit in the society because most people are ignorant, of the relevance of the
bank to the society so they fond it difficult to bank with any bank. But
through the unbroken marketing strategy
adopted by banks they started banking with banks.
iii.
Marketing financial service has
brought about new innovation in the banking industry. Banking industry is
competitive in nature, many bank would like to increase their patronage and
also maintain the existing customer. They can only increase the patronage by
effective marketing of their services i.e new products introduced that others
have not invented.
lv. Marketing of financial service has
brought good relationship between the banks and their customers. Most banks of
nowadays always have marking department, this department moves out of banking’
halls to the people in the town or city to relate with them and accept their
saving.
3.6
CONSTRAINTS OR PROBLEMS OF MARKETING BANKING
SERVICES
Marketing
of financial services has encountered a quite number of problems in the
available services.
To mention but few out of
those problem are:
i. Misconception: people have misunderstood
the marketing the marketing strategy being used by bankers eg Banks using
female personnel as marketing craw, people have mistaken them for corporate
prostitution.
ii. In ability to realize fully the purpose of
inventing a product or service.
CHAPTER
FOUR
DATA
PRESENTATION AND ANALYSIS
4.0 DATA
PRESENTATION AND ANALYSIS
4.1 INTRODUCTION.
This
chapter contains the descriptive and inferential statistical presentation,
interpretation and analysis of the data collection through the questionnaire
using chi-square method of data analysis, simple bar — chart and hypothesis.
The
data were collected through the questionnaire administered to various officials
of the union bank Plc, liorin branch.
A
total number of questionnaire is thirty (30) but only twenty five were returned
and so data were analyzed based on the numbers of questionnaire returned.
4.2
PRESENTATION AND ANALYSIS OF DATA ACCORDING TO RESEARCH QUESTIONNAIRE.
The
total number of questionnaire administered was thirty (30) however twenty-five
(25) were returned while five were not returned at all.
Percentage
of questionnaire returned = 25130 x 100 = 83%
Percentage
of questionnaire not returned = 5130 x 100 17%
The
table below shows the distribution of the respondents’ intern of the above
listed data i.e. sex, age and marital status.
SECTION
A
PERSONAL DATA OF RESPONDENTS
Table
1. In analyzing the data collected through the administered questionnaire, the
sex of the respondents were classified in to male and female, the table below
shows the sex distribution of the respondents.
Table 1
From
the table 1, out of the total numbers of respondent who returned their
questionnaire 18 (72%) are males while 7 (28%) are females.
Bar chart representing sex
distribution of the respondent
Figure 1
Froth
the table above, out of the twenty-five (25) respondents, Eighteen (18) are
males while seven (7) are females. This means that
the greater numbers of
respondents in the Union Sank Pie. Ilorin
branch are male.
This
implies that male has the highest population than female.
Marital status. This
classification is show below:
TABLE
II
From the table II, out of
the total numbers of respondents who returned their questionnaire 21 (84%) are
married which 4 (16%) one single.
Bar
chart representing marital status of the respondents.
The
above table represents the market status bar chart of the respondents in Union
Bank Plc, Ilorin.
The married are 21(84%) while single was 4(16%). This shows that the number of
married respondents is higher than single, This shows that married people has
the greater number at union bank Plc liorin.
TABLE
Ill: In
the analysis, data collected through the administration of questionnaire, the
age of the respondents were classified into various categories.
Table iii
From
the above, out of the total numbers of respondent who returned their
questionnaire, 22 are between the age of 18-30 (88%), 3 are between the age of
31-40 years which is 12%.
Bar char representing age
distribution of the respondent.
From
the table above, out of the twenty (20) respondents 13-30 years of age were 22
with 88% while the 31-40 years of age, which is 12%s.
Conclusion,
this means that greater part of the respondents are
18-30 years age classified
above at Union Bank Plc Ilorin which
means that the highest
number of Union Banks Plc Ilorin is between
31-40 years of age.
Questionnaire,
according to impact of marketing of financial service on Nigerian banking
system. it contains section B questions relating to subject of the study.
Marketing of banking services will emphasis on business advisory services.
THE IMPACT OF MARKETING OF FINANCIAL
SERVICE ON NIGERIA
BANKNG SYSTEM
TABLE
IV
From
the above table 89.7% of the respondent favour questions asked by answering
“yes” while 10.3% respondent by answering “No” which show that they disagreed.
The
graphical representation of the analysis is as follows: -
Note: - “Y” axis represents
percentage of “Yes” or “No” ticked by respondents “X’ axis represents the
alternations Le. Yes / No.
The
Impact of banking service on banking system
Both the table and the graph
revealed that marketing of banking services has great impact on the bank
itself.
SECTION
C:
- According to the respondents of this section, it contain problem of marketing
banking service with solution to their problem.
PROBLEM
OF MARKETING OF BANKING SERVICE WITH SOLUTION
TABLE
V
This
table and the graph reveal that marketing has a great effect on marketing
banking services. This shows that marketing strategies employed by banks really
influence and motivate customer’s patronage and this result to positive
solution on banks.
4.3 DATA TECHNIOUES
The
techniques used in analyzing the data collected through the data collection
instrument (questionnaire) include simple bar charts.
Inferential
statistics was used to test the working hypothesis formulated from the general
hypothesis. The technique used is chi -square (X2) to analyze the
research hypothesis and the following formula were applied.
ef =
(r - I) (c -1)
Where df = Degree of
frequency
f=
Number of rows
c =
Number of columns
fe (a,bc) (RT) (CT)
CT
Where te = frequency
expected
CT =
Column total
CT =
Total Population of the sample
a = Column Position of the observed frequency
b = Row Position of the observed frequency
X2C= (fo-fe)
Fe
Where
fe = frequency expected
Fo =
frequency observed
x2c
= Calculated Chi-square
4.4
DATA DESIGN
This
research work was carried out at the Union Bank Plc,Ilorin branch. The study was conducted
basically through administration of questionnaire to the staffs and management
of the bank.
This
research used bottle structured arid the needed information for the project
work. The analysis of the data collected was tasked through the use of
descriptive and inferential techniques. The conclusion arrived out will enable
the researcher to draw an appropriate recommendations and conclusion on the
study.
GENERAL
COMMENT
Marketing
of financial services is what can make people aware of banks products and
services.
Marketing
at financial service is an essential tool towards an improved profitability.
Marketing
of banking services is one of the ways to solve the problem of bank liquidity.
The
use of halt naked of female staff to market bank services should be
discouraged.
Finally,
as matter of fact marketing services is very crucial in the banking industry
and it has to be done regularly.
4.5 HYPOTHESIS
This
section aims at analyzing data gotten from section B — D of the questionnaire.
Section B discussed the impact of marketing of financial service on Nigerian
banking system and section C discussed problems of marketing of financial
services with solution and section JJ discussed general comments.
All
the questions in each section were cross tabulated and similarities stated.
An
alpha and value were set out from the table at 5%, which are our expected
values. Any working hypothesis falling within the set value will be accepted
while those that falls after the set value will be rejected base on the
decision rule to be made.
WORKING HYPOTHESIS FOR SECTION B
Ho = marketing does not have any impact on
bank services.
Hi = Marketing has impact on bank service.
Where
Ho= Null hypothesis
Hi = Alternate hypothesis.
Fo
(a) = 25, Fo (b) 0, Fo (c) 25, Fo (d) =0
Fo
(e) =25, Fo (f) = 0, Fo (g) 24, Fo (h) =1
Fo
(i) =16, Fo(j) = 9, Fo (k) =21, FO (L) 4
Fo
(m) 21, Fo (n) = 4
Fe (a) = (157) (25) 22.4, Fe
(b) = (18) (25) 2.57
175 175
All cells under “YES” Le a,
c, e, g, I, k, m.
=
22.4 each
All cells under “NO” i.e b,
d, f, h, j, I, n.
=
22.57 each
df=
(r-1) (c-I)
Where r = rows = 7
C = columns = 2
df= (7-1)(2-1)
(6)
(1)
df =
6
Using
5% level of significance, therefore, 6,0.05 from the table 12.59: X2t=
12.59.
Level of significance = 5%
or the critical region is 6, 0.5 from the table
= 12.59.
Decision
Rule
It
chi-square calculated is greater than chi-square tabulated (x2c>x2t)
Now the value of x2 is 29.325 and is greater than value of critical
which is 12.592.
Therefore,
Hi (i.e. alternative hypothesis) which says that “marketing has impact on banks
service is accepted”.
4.8
WORKING HYPOTHESIS FOR SECTION C
Ho =
marketing does not have problem in bank services.
Hi =
marketing has problem in the bank services.
Fe = Data generated from
questionnaire
Fe = Expected Frequency
Fo (a) = 25 Fo (b) = 0, Fo
(C), = 8, Fo (d) 17
Fo (e) = 23, Fo (j) = 2, Fo
(g), = 23, Fo (h) = 1,
Fo (I) = 10, Fo, (j) = 15,
Fo (k) = 20, Fo (L) = 5, Fom = 25,
Fo (n) = 0, Fo (o) 23, Fo
(p) = 2.
Fe (a) = (1 58) (25) =
19.75, Fo (b)= (42) (25) = 5.25
200 200
All cells on “Yes” column =
19.75 each
All cells on” No column =
5.25 each
df=
(r -1) (c-I)
Where
df = degree of freedom
r =
rows
c =
columns
r =
8, c 2
df =(8-1) (2-I) 7 1
=7
Using 5% level of significance,
therefore 7, 0.05 from the table
= 14.067x2t
Note:
Level of significance = 5%
and critical region is 7,05 from the table
= I 4.049x2t
4.6
GENERALIZATION BASE ON TESTED HYPOTHESIS
It
can be generalized that marketing of banking service has impact on banking
services. That results to the reacceptance of alternative hypothesis (Hi), and
reject null hypothesis (Ho) that says marketing does not have input on banking
service.
It
is also formulated the test hypothesis that marketing does not have problem on
the bank services, this result to the reject of null hypothesis (Ho) and
acceptance of an alternative hypothesis, (Hi) says that marketing has problem
on bank services.
Decision
rule:
If x2c (1.0
chi-square calculate) is greater than x2t (i.e chi - square table)
the value of boundary is the critical region, which is 14.049x2t and the value
of chi- square is 46.2644. Which is greater than the critical region of x2t.
Therefore
marketing of banking services has problem on bank service accepted.
CHAPTER FIVE
Finding, Summary, Conclusion and
Recommendation.
50
Finding, Summary, Conclusion and
Recommendation.
5.1
Findings
Base
on the outcome of the tested hypothesis, it is now found out that marketing is
relevant or has major impact on banking services which has been shown in the
rejection of null hypothesis to the acceptance of the alternative hypothesis.
These
are issues discovered in the course of research carried out in chapter three
and four.
The impacts of marketing on
banking service are: -
Banks.
should engage in marketing of bank service for them to increase the number of
the customer in term of patronages.
Also,
banks needs marketing of bank services to boost their profit through the large
number of patronage enjoyed. It is also discovered that bank needs marketing of
bank services to keep the public more informed about the service and products
of such bank.
Some
problems of marketing strategies are also discovered during the research
process, which include the following:
Banks
are faced with the problem of marketing strategies to adopt or increase the new
trend of its customer’s growth. Banks are also faced with the problem of the
kind of service to initiate so as to attract the customers.
As
regards the above problems the following possible solutions can make.
The
creation of customer complaint unit and establishment of public complaint desks
where customer’s complaint could be lodged.
There
should be frequent re-organization of marketing orientation programs such as
seminars, workshop for both the management and the staff of banks.
5.2
SUMMARY:
In
summary, this research work has been able to identify the relevance of
marketing of bank services to the banking industry. Through the research, the
strategies of marketing of banking service which include knowledge banking
environment and other very important information inputs in effective marketing.
The characteristic of marketing of banking service were discussed which are
intangibilfty, inseparability, heterogeneous and Perishability.
The
marketing philosophies were also highlighted; they are the production concept,
product concept, selling concept and lastly marketing cohcept.
The
areas such as objective of the business, budgeting, costing, pricing policy and
cash flow etc.
It
is evident that marketing of banking services has impacted the banking system
in a positive manner in terns of their profitability, patronage by customers
and services being rendered by banks to the general public.
However,
marketing of banking services are faced with problems in the banking industry.
But in the course of the study the following problems were discovered:
i. Inadequate support by the top management
of banks in adopting and implementing marketing philosophy general in marketing
their services of banks in adopting and implementing marketing full blown in
marketing their service of banks in adopting and implementing marketing
philosophy full blown in marketing their service.
ii. There is no serious attention or provision
for appraising, monitoring and analyzing the result expected product from a
target market and certain product.
iii.
It was also discovered that there was
no customers care unit and complaint desk where customers’ complaints could be
lodged and addressed.
iv. Also, there is lack of effective model,
which can speed up the rate, and time of attending to customers to reduce the
usual long queue observed in the banking hall.
However,
if all the above highlighted problems are adequately taken care of, bank will
be able to secure position for them selves in the new generation competitive
environment.
5.3 CONCLUSION: -
The
activities of modern marketing should cover marketing research and other
marketing information system, marketing planning, marketing philosophy and how
to organize activities and control, and of course, other issues relating to
product, prices, promotion and distribution decisions. Only few banks in Nigeria
could be said to have embraced marketing activities as required looking at the
current economic condition and the under developed nature of the Nigerian
economy, the operators of the economy are bound to change.
In
view of the above mentioned points it is essential that each bank was a vision
of what its takes to be in the future. It must go beyond its present’s
situation and develop a long term stately to meet changing conditions.
5.4
RECOMMENDATION
In
the era of “arm — chain “system where there is quite banking system i.e. when
there is little or no marketing promotional activities then banking system has
gone for good. But one-way by which banks can service he challenges of recent
reforms is to adopt and implement all the marketing concept philosophy. In
order to overcome the discovered problem observed in the course of conducting
this study, the following measures as to be put in place.
i. Top management must support the adoption
and application of all the marketing principles.
ii. There should be frequent re-organization
of marketing orientation programs such as seminars, workshop for both the
management and the staff of the banks.
iii.
There should be constant monitoring,
appraisal and analysis of result expected from a target market or particular
product.
iv. Creation of customer complaint unit and
establishment of public of complaint desk where customer complaint could be lodged
and addressed.
v. Banks to discard and reduce the problem
of long and cumbersome the always-witnessed in banks should adopt effective
queuing modal.
vi. Total quality should be offered to
customers.
APPENDIX
LETTER
OF INTRODUCTION
BANKING AND FINANCE,
I.B.V.S
KWARA STATE POLYTECHNIC,
ILORIN
P.M.B 1375,
KWARA STATE, ILORIN
The Manager,
Union Bank Plc.
Muritala Muhammed Road
Ilorin Branch,
Kwara State,
Dear
sir/Ma,
QUESTIONNAIRE
I am
a final year student of the department of Banking and Finance, Kwara State
Polytechnic ilorin, and am writing a research project on “Marketing of Banking
Services in Nigeria with emphasis on business advisory services. “Using Union
Bank of Nigeria PLC, Ilorin Branch as a Case study, as part of the requirement
for the partial award of HND Higher National Diploma in Banking and Finance.
I
shall therefore be very grateful if the attached questionnaire could be
responded to as objectively as possible.
Please
be assured that any information given in this regard will be treated confidentially
and use only for the purpose of this academic exercise.
Thanks
for your co-operation.
Yours
faithfully,
QUESTION
ON MARKETING OF BANKING SERVICE WFFH EMPHASIS ON BUSINESS ADVISORY SERVICE
Kindly
complete the question below by putting letter X in the
appropriate
boxes and write in space provided.
SECTION A: PERSONAL INFORMATION
1. Name of the organization…………………………………………
2. Department……………………………………………………………
3. Sex: Male ( ) Female ( )
4. Age…………………………………………………..
5. Marital Status (a) Married ( ) (b) Single (
)
6. Education Qualification
7. Present Position in the organization
SECTION
B:
IMPACT OF MARKETING OF FINANCIAL SERVICES ON NIGERIA BANKING
SYSTEM
8. Is it true that marketing of financial
service have positive
impact
on the Profit of Banking Industry. (a) Yes ( )
(b) No ( ) (C) I don’t Know ( )
9. Do you think effective Marketing can be
realized by bank
through
the use of friend and qualified staff. (a) Yes ( )
(b) No ( ) (C) I don’t know ( )
10. Do you think Marketing of financial Service
has rally promoted Banking Culture in Nigeria. (a) Yes ( ) (b) No ( )
(C)
I don’t know ( )
II. In your own view, Marketing of financial
service has positively impacted Nigeria
economy. (a) Yes ( ) (b) No ( )
(C)
I don’t know ( )
SECTION C: PROBLEM OF MARKETING OF
FINANCIAL
SERVICE
12. Do you think government
regulation on bank pose any problem
on
bank on the marketing of financial service. (a) Yes ( ) (b)
No() (c) I don’t know ( )
13. Are you of the opinion that many Bank go
extract length in convincing Customer which brings about bad image of such
banks. (a) Yes ( ) (b) No ( ) (c) I don’t Know ( )
14. Do you think inability to initiate new
product in Banking Service poses a problem on Banks Marketing of service. (a) Yes ( )
(b)
No ( ) (c) I don’t know ( )
15. Do you have any other related problems on
marketing of financial service. (a) Yes (b) No ( ) (c) I don’t know ( )
16. If yes, Mention Few………………………………………………………………………………………………………………………………………………………………………………………………………………………..
SOLUTION TO THE PROBLEM
17. Do you think involvement of government in
marketing of financial services can bring any form of solution. (a) Yes
(b)
No( ) (C) I don’t know ( )
18. How do think government can be involved………………………………………………………………………………………………………………………………………
19. Do you think introduction of new products can
solve the problem faced by marketing financial service. (a) Yes ( b) No
(c) l don’t
know( )
SECTION
D
21. If you were to excess Bank marketing
activities will then say it
has
enhance bank performance. (a) Yes ( ) No ( )
22. General Comment…………………………………………………………………………………………………………………………………….
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