THE EFFECT OF MARKETING STRATEGIES ON DEPOSIT BANK PERFORMANCE CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The purpose of business as asserted by Peter Drucker is to create customers and provide them with two basic functions of marketing and innovation. In today’s intense competitive business environment, these words ring more bells. A well-designed marketing strategy can make all the difference between success and failure in the marketplace. While marketing is commonly associated with consumers and good companies such as Nokia Company, it would be myopic to restrict the relevance of marketing to such instances alone. Marketing ultimately is about understanding and shaping behavior (Amitav, 2012). Consequently, banks and other financial institutions, government, medical and non-profit organization from those that design and sell financial product to those that implement government policy (i.e. those saddle with reducing drunk driving) have all found out that a well thought out marketing strategy can be critical to the success or failure of business in the marketplace. It is almost undoubted that it has become more deeply and widely for global integration of economy and financial system, presently the international competence of the banks in Nigeria cannot keep up with the foreign banks. In market economy in which Nigeria economy can be related, analysis and evaluation of marketing performance is objective request of enterprise, investor and creditors. The process of evaluating and analyzing marketing performance can reveal the effect of an enterprise marketing strategies, judge its marketing efficiency, analyze the cause for its success or failure which is of great significance towards the improvement of enterprise management, enhancing the effectiveness of marketing decision making (Andy, 2012). Marketing is becoming increasingly necessary in today’s banking competitive environment, intensified rivalry from other financial institutions has caused the banks to think seriously about how they compete effectively and increased attention on marketing strategies and techniques.
The success of a bank depends upon the ability to satisfy customer`s financial needs. An effective use of marketing strategies is becoming recognized as a vital instrument to a successful banking operation. Traditionally, many service industry and companies executive are not oriented towards marketing and have been slow in adopting various marketing strategies and methods in their activities. The need for a marketing strategy in banks started because of intense competition, not only from other banks, but also from other financial companies, government loan scheme, credit unions, insurance companies, building society etc. Also this competition within and outside the banking sector had resulted into reforming strategies i.e. marketing strategies.
Baker (2008) simply defined marketing strategy as a process that can allow organization to concentrate it limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy also refer to a strategy that integrate an organizational goal into a cohesive whole, ideally drawn from market research, it focus on the ideal product mix to achieve maximum profit potential (businessdictionary.com 2014). It serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives , commonly marketing strategies are developed as a multi-year plans with a tactical plan detailing specific actions to be perform in the current year, however the speed at which the environmental change increases shorten this time horizon (Daker, 2008). Marketing strategies involve a dynamic process i.e. It is partially planned or sometimes unplanned. Marketing strategies involve a careful scanning of the internal and external environment (Hausman, 2000). The internal environment factors to be scan include the marketing mix (4P`s) performance analysis and strategic constraint. External environmental factors include customer analysis, competitor analysis, target market analysis as well as evaluating the element of technological, economic, cultural, or political/legal environment that are likely to influence the organization success. Marketing strategy is often drawn from marketing research. A marketing research is a systematic gathering, recording and analysis of data about issue relating to marketing, product and services, the goal of marketing research is to assess how changing elements of the marketing mix impacts customers behavior.
An effective marketing strategies i.e. process of designing sound portfolio of business and product that is best for the company (i.e. deposit banks) usually help to determine the organization performance. The performance of deposit bank or any organization can be measure in terms of its effectiveness, efficiency, market share, liquidity and profitability; these tools are used by organization to determine the impact of marketing strategies on its performance. Organization performance is a major tool use to determine the success, growth capability of the organization, which in turn ensures survival of the organization. The key function of marketing strategy is often to keep marketing activities in line with the overarching mission statement (Baker, 2008). After completing the scanning process, a strategic plan will be develop to identify business alternatives, establish challenging goal and determine the optimal mix to attain these goal. The marketing mix consist of the 4p`s of product price promotion and place and the additional 4p`s of physical evidence, process, people and planet (environment).
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