RELATIONSHIP MARKETING ON CUSTOMERS PATRONAGE OF MONEY DEPOSIT BANKS IN PORT HARCOURT
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RELATIONSHIP MARKETING ON CUSTOMERS PATRONAGE OF MONEY DEPOSIT BANKS IN PORT HARCOURT
ABSTRACT
The competitive character of our capitalist economy has clearly forced the use of certain strategies by banks in order to maintain customer loyalty, stay in business, and outwit competitors. Herein lies the substance of connection as a communication, marketing and public relations approach targeted at sustaining customers’ patronage.
On that basis, this study, among others, investigates the impact of relationship marketing on bank patronage, with a focus on Zenith Bank’s Port Harcourt city branch. For the purpose of this study, a survey research design was used to study a representative size of the population.
A total of 371 samples were studied from a target population of 1,452 academic staff of the College of Health Sciences Port Harcourt campus and a target population of 2568 business men, 200 of whom were studied. Similarly, a sample of 6 was purposefully selected from a total of 30 Zenith bank staff of the Port Harcourt city branch.
Questions constructed in the Likert Scale Format were utilised as the primary data collecting tool, with mean scores used for analysis. The findings demonstrated that Zenith Bank’s Port Harcourt city branch frequently carried out numerous relationship activities in accordance with the socio-cultural norms of the people of Port Harcourt
, which had a favourable impact on client patronage. The study indicates that such relationship marketing activities highlight why the College of Health Sciences Port Harcourt Campus of the University of Port Harcourt Awka still uses Zenith Bank as their official bank, despite staff members advocating for a change of bank. The study also found that businessmen accepted Zenith Bank’s relationship marketing.
As a result, the report suggests that Zenith Bank PLC increase its community social responsibility initiatives in order to maintain a consistent long-term relationship marketing and patronage focus.
Chapter one
INTRODUCTION
1.1 Background of the Study.
Relationship marketing (RM) tries to build, maintain, and improve relationships between an organisation and its clients for a profit in order to meet the organization’s objectives. When a relationship is developed between customers and the company, brand loyalty is created through recurrent purchases, which leads to increased revenues for the company (Victor 1990:36).
Relationship marketing is a concept that has gained prominence in recent years. Companies and banks are realising the importance of building relationships with their customers. As a result, they are now more proactive in developing meaningful relationships.
Leonard Berry first established this notion in 1983, stating that relationship marketing was built on creating a long-term relationship with a consumer for the aim of patronage while keeping in mind that other competitors are always available (Yan and Wu, 2007).
According to Doyle and Stern (2006:3), relationship marketing is a long-term, continuous sequence of transactions between partners in which one believes the other to deal fairly, dependably, and helpfully. Relationship marketing has so evolved as “a popular new paradigm” as the focus shifts from customer acquisition to customer retention.
It is likely to evolve once again and will transform into customer relationship management (CRM) with a hybrid of marketing relationship programs that vary from relation to out sourcing market exchange and customer interactions” (Sheth & Kellstall,2002:30).
It follows that when a positive working relationship is established, bargaining time and expenses are decreased, and transaction patterns become more predictable and secure.
Because of rising competition, today’s banks are learning about and implementing relationship marketing strategies. To keep these consumers, banks are now focusing on developing meaningful relationships with key customers, as well as managing those relationships more proactively (Connor, Galvin, Evans, 2004:16).
Relationship marketing aims to offer a more holistic, personalised brand experience (service) in order to strengthen consumer relationships. According to Kottler and Armstrong (2009:14), a variety of organisations now provide services and relevant facts to individual clients based on information such as previous transactions, demographics, psychographics, media, and distribution preferences.
By focusing on their most profitable customers, products, and channels, there is a strong chance of achieving profitable growth and capturing a larger portion of each client’s expenditure through high customer loyalty.
Relationship marketing focuses on retaining existing customers because acquiring new consumers can cost up to five times as much as keeping an existing client.
If Zenith Bank PLC and other commercial banks in Port Harcourt, Rivers State, want to grow their customer base, they must train their workers to cross-sell and up-sell their goods.
Long-term partnerships between businesses and their consumers must be recognised for the benefits of decreased costs and higher profitability. Customers, on the other hand, will benefit from transactions with an organisation that understands them and their needs, as well as a trustworthy financial service provider.
Simply expressed, therefore, relationship marketing encompasses all activities and efforts of the business organization targeted at developing and sustaining healthy relationship with the customers.
This is necessary since the client is at the centre of organisational activity. There is credence in the increasing pace of competition in corporate circles, particularly in the banking industry. Victor (1970:11) recognised that “the key to successful marketing is having the right product at the right price in the right place with the right promotion”.
Finally, it is up to the client to decide whether these four characteristics are appropriate. The consumer is thus fundamental to the four Ps of marketing: price, place, promotion, and product. The customer determines the significance of the 4Ps through patronage. Thus, the 4Ps of marketing may be aimed at patronage.
However, relationship marketing appears to go beyond patronage and seeks to secure the customer’s loyalty. In this case, the corporation should not define the business organisation solely in terms of profit, but rather as a responsible citizen whose primary goal is to provide for the well-being of its consumers.
On this point, business organisations like as banks and even GSM service providers participate in programme sponsorships and community social responsibility projects in their respective localities,
and, in most cases, beyond. In his apparent eulogy to this, Arens (2006:241) stated, “A market-driven firm’s overarching goal is to produce happy, committed consumers.
Customers, not products, are the lifeblood of the firm.” This is demonstrated by the fact that “customers can select from a wide range of products and services offered by producers located all over the world.”
As a result, the client connection, of which the sale is merely the beginning, is the critical strategic resource of the successful twenty-first century corporation (Fredrick 1994:22).
It follows that any organisational effort to keep clients’ patronage by developing a healthy relationship counts as relationship marketing. In reality, public relations and advertising as promotional tools qualify as relationship marketing approaches, so too do integrated marketing communications.
The preceding is supported by public relations, which is based on goodwill between the organisation and its stakeholders (markets), resulting in relationship marketing.
Arens (2006: 338) defines public relations as “the management function that focuses on the relationships and communications that individuals and organisations have with other groups (called publics) for the purpose of creating mutual goodwill.” This supports the preceding statement.
As a result, it is not surprising that organisations such as banks do corporate image research on occasion in order to determine how the organisation is seen by its stakeholders.
The findings of the studies help the organisation to re-strategize its actions in order to project a positive corporate image in the eyes of its stakeholders. This means that effective communication is a prerequisite for relationship marketing. Providing the right information at the right time to the right people keeps the target market up to date on the organization’s activities.
Little wonder then that Mckenna (1988:88), acknowledged that all these communications or brand connections sponsored or not, establish an integrated product in the consumer’s imagination.
The style and manner in which words are structured determines the meaning they conjure in the minds of the public, as well as the extent to which such organisations secure the loyalty and trust of their customers.
Regardless, the level of increased competitiveness in this global age necessitates the mixing of such disciplines as advertising, public relations, marketing, and the like (thus, integrated marketing communication) in order to build and sustain relationship marketing.
Integrated marketing communication is thus defined as the process of designing and co-coordinating a strategic communication strategy to build and strengthen mutually profitable relationships with employees, customers, other stakeholders, and the general public.
According to Shultz, such communication allows them to have a positive interaction with the firm brand via various media or other connections. Why the emphasis on relationship marketing?
Fredrick (1992:1) may have supplied a solution when he stated that to thrive, “companies must focus on managing loyalty among carefully chosen customers and stakeholders (employees, centres of influence, stakeholders, the financial community, and the press).”
According to Gary, this is reportedly significant since, “No amount of promotion is going to win back a consumer lost due to subpar products or poor service. The actual profit lost is a company’s lifetime customer value (LTCV).
Furthermore, research evidence has consistently demonstrated that “90 percent of a manufacturer’s profit comes from repeat purchases” (Gary 1993:21). It therefore makes financial sense to secure and retain the loyalty, patronage, and understanding of clients because it costs less than attracting new ones.
Regardless, the topic of the degree of influence (if any) that such relationship marketing activities have on customers in a competitive market economy like Nigeria has been arisen.
In particular, increased competition among banks, particularly those located in commercial nerve centres such as Port Harcourt in Rivers State, has resulted in aggressive advertising and marketing of their products and services, sparking controversies and worry.
People have so continued to question the impact of their direct marketing strategy, sale promotion, advertising, media mix techniques, and other relationship marketing activities on customers, as well as their overall patronage and perception of such organisation.
However, there is a scarcity of literature that provides answers to questions about how these techniques promote client loyalty at banks in Port Harcourt, particularly Zenith Bank.
This gap has the potential to obstruct understanding of how relationship marketing can or cannot aid attempts to maintain client loyalty and enhance sales.
This, in turn, serves as the foundation for this study, which, among other things, investigates the impact of relationship marketing on Zenith bank customers’ long-term patronage using Port Harcourt Town as a case study.
As a result, the findings of this study will either justify the human and material resources invested in relationship marketing initiatives, or not.
The purpose of this study is to assess the impact of Zenith Bank’s relationship marketing initiatives on public perception, loyalty, and patronage, with a justified bias towards banks in Port Harcourt, Rivers State.
1.2 Statement of the Problem
The increased rivalry in the banking sector has required the necessity for banks to develop long-term relationships with consumers, as wooing a customer costs more than retaining an existing customer’s patronage. This explains why Zenith Bank, like other banks, seeks to implement relationship marketing tactics such as public relations, advertising, integrated marketing communications, direct sales, and so on.
However, it is unclear in the literature whether, despite the large sums spent on this effort, people may still lack the requisite passion and excitement to create businesses that function with such banks.
A literature search revealed that this problem has not been recorded, leaving a gap in our understanding of the impact of relationship marketing on consumers’ continued usage of Zenith Bank’s services in Port Harcourt.
It is on this assumption therefore that the researcher wants to find out the influence of relationship marketing on customers continued patronage of banks, using Zenith bank ( in Port Harcourt) relationship marketing efforts on Port Harcourt people as a reference point.
1.3 Objectives of the Study
This study basically intends to:
To learn how Zenith Bank Port Harcourt regularly engages in relationship marketing.
To examine the various relationship marketing tactics used by Zenith Bank in Port Harcourt.
To analyse the relevance of such relationship marketing tactics in light of the socioeconomic reality of Port Harcourt residents.
To investigate people’s perceptions of such relationship marketing strategies.
To assess the overall impact of such relationship marketing tactics on client purchases of Zenith Bank products and services.
1.4 Research Questions.
The research for this study was guided by the following research questions:
How frequently does Zenith Bank Port Harcourt engage in relationship marketing?
What are the different relationship marketing tactics used by Zenith Bank Port Harcourt?
To what extent are Zenith Bank’s relationship marketing strategies relevant in light of the socioeconomic realities of the Port Harcourt people?
How does the public perceive Zenith Bank’s relationship marketing strategies?
To what extent has Zenith Bank’s relationship marketing campaign in Port Harcourt town influenced customer behaviour?
1.5 Significance of the Study
This study will be significant for the following:
Academically, this study will look into topics related to relationship marketing. This would highlight the interconnections between diverse academic subjects such as mass communication, marketing, and other relevant fields.
The study would investigate pertinent theories that provide insight and comprehension of the subject matter, as well as serve as a theoretical foundation for future research endeavours.
Professionally, the survey would also assist bank professionals in evaluating their relationship marketing tactics and efforts to determine whether they deliver the expected results. Such an approach would allow them to fine-tune remedial or corrective activities for increased efficiency and production.
1.6 Delimitation/Scope of the Study
This study is confined to Zenith Bank employees, the Port Harcourt city branch, and employees in various departments of the College of Health Sciences at the University of Port Harcourt, Port Harcourt Campus, Rivers State.
In addition, a cross-section of businessmen from Port Harcourt Market were recruited for the study. The researcher’s choice of staff category stems from the fact that they are educated, and the majority of the staff utilise the bank as their primary bank.
They may also easily analyse various relationship marketing strategies of the bank under consideration and express in simple terms their opinion, perception of such techniques, and the bank’s imprinted image in their brains.
1.7 Operational Definitions of Terms
Influence is the extent to which a phenomenon can respond or react to stimuli. In this study, customers’ responses to Zenith Bank’s induced relationship marketing tactics are examined.
Relationship Marketing- Zenith Bank’s efforts to foster a good relationship with its clients based on trust and mutual benefit.
Customers are those who use Zenith Bank Port Harcourt’s banking services.
Patronage entails doing banking transactions with Zenith Bank based on the services provided by the bank.
1.8 Company Profile
Zenith Bank is a Nigerian multinational financial services firm. The Central Bank of Nigeria, the country’s banking authority, has licenced it as a commercial bank. Zenith Bank is a major financial services company in Nigeria and Anglophone West Africa.
As of December 31, 2016, the company’s total assets were ₦:4,739,825 million, with shareholders’ equity of ₦:616,353 million. The company’s stock is listed on both the Nigerian and London stock exchanges.
Zenith Bank was legally created in May 1990, and banking operations began in July of that year. Its initial capital basis was $4 million. It commenced operations during a time of government banking liberalisation in which the central bank gave up to twenty banking licences to investors each year.
The bank’s first office was a domestic house on Victoria Island that was converted into a banking hall. In its early years, the bank experienced remarkable expansion. Zenith expanded its capitalization to 500 million naira in 1997, in response to a rule requiring banks to strengthen their capital bases.
1.9 Organisation of Study
The study is organised into five chapters. The first chapter introduces the study and provides background information. Chapter two examines connected and pertinent literature.
The research technique is presented in Chapter 3, and the data analysis and interpretation are presented in Chapter 4. The study closes with Chapter 5, which discusses the summary, conclusion, and recommendations.
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