THE IMPACT OF MARKETING ON CUSTOMERS’ PATRONAGE OF MONEY DEPOSIT BANKS IN PORT Harcourt
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ABSTRACT
Clearly, the competitive nature of our capitalist system has compelled the use of certain strategies by banks in order to maintain customer loyalty, continue in business, and outwit competitors. Herein lies the essence of relationship as a communication, marketing, and public relations strategy for retaining customers. This study studies, among other things, the impact of relationship marketing on bank clients, with a particular focus on the Port Harcourt branch of Zenith bank. For the purpose of this study, a survey research design was employed to study a representative sample of the population. A total of 371 samples were drawn from a target population of 1,452 academic staff at the College of Health Sciences Port Harcourt campus, and 200 samples were drawn from a target population of 2,568 businessmen. Similarly, a sample of six was picked on purpose from a total of thirty Zenith bank employees at the Port Harcourt city branch. Questions in the Likert Scale Format were utilized as the primary instrument for data collection, while the mean score was employed for data analysis. This has resulted in a good impact on the bank’s patronage among its clients, as seen by the fact that the Port Harcourt city branch of zenith bank regularly engages in relationship-building initiatives that are in keeping with the socio-cultural norms of the people of Port Harcourt. The study concludes that the College of Health Sciences Port Harcourt Campus of the University of Port Harcourt Awka’s continued use of Zenith bank as their official bank despite no staff members advocating for a switch is due to such relationship marketing initiatives. In addition, the research found that businessmen accepted the relationship marketing of Zenith Bank. In accordance with the emphasis of relationship marketing, the study suggests that Zenith bank PLC improve its community social responsibility activities for stable long-term relationship marketing and patronage.
FIRST PART
INTRODUCTION
1.1 Background of the Research
Relationship marketing (RM) strives to build, maintain, and enhance profitable relationships between a business and its clients in order to achieve the organization’s goals. When a relationship is developed between a company and its consumers, brand loyalty is created through the customers’ repeated purchases, resulting in increased profitability for the company (Victor 1990:36).
In recent years, the concept of relationship marketing has grown in favor. Companies and banks are beginning to recognize the importance of establishing relationships with customers. Consequently, they are now actively pursuing the development of meaningful relationships. Leonard Berry first presented this notion in 1983 when he underlined that relationship marketing was founded on the concept of creating a long-term relationship with a consumer for the goal of patronage despite the availability of other competitors (Yan and Wu, 2007).
According to Doyle & Stern (2006:3), relationship marketing is a long-term, continuous sequence of transactions between parties in which one party trusts the other to conduct business fairly, dependably, and helpfully. As a result of the shift in emphasis from customer acquisition to customer retention, relationship marketing has become “a popular new paradigm.” Customer relationship management (CRM) with a combination of marketing connection programs ranging from relation to outsourced market exchange and customer contacts is expected to evolve once more (Sheth & Kellstall,2002:30). It shows that when a good working connection is established, negotiation time and expenses are decreased, and transaction patterns become more secure and predictable.
Due to increased rivalry, modern banks are beginning to comprehend and utilize relationship marketing tactics. To keep these consumers, banks are now attempting to cultivate meaningful ties with their most valuable clients and to more actively manage these customer relationships (Connor, Galvin, Evans , 2004:16).
Relationship marketing aims to offer a more encompassing, customized brand experience (service) in order to strengthen consumer bonds. According to Kottler and Armstrong (2009:14), a variety of businesses offer services and pertinent information to individual clients depending on their transaction history, demographics, psychographics, media and distribution preferences. By focusing on their most profitable consumers, goods, and channels, the company has high hopes of achieving profitable growth by capturing a higher portion of each customer’s spending and fostering a high level of customer loyalty. Relationship marketing aims to maintain existing clients, as acquiring new ones can be up to five times more expensive than retaining an existing one.
If Zenith Bank PLC and other commercial banks in Port Harcourt, Rivers State wish to expand their customer base, they must train their workers in cross-selling and up-selling. There is a need to realize the benefits of reduced expenses and enhanced profitability from enterprises’ and consumers’ long-term partnerships. On the other side, customers will enjoy conducting business with a company that understands them and their needs, and they will have access to a dependable financial services provider.
Relationship marketing encompasses all activities and efforts of a commercial organization aimed at establishing and maintaining healthy customer relationships. This is necessary since the client is the focal point of organizational activity. The increasing rate of competition in corporate circles, particularly the banking industry, lends credence. Victor (1970:11) agreed on this note that “the secret to successful marketing is having the right product at the right price in the right place with the proper promotion.” The customer ultimately determines the appropriateness of these four factors. The consumer is consequently the focal point of the four Ps of marketing: price, place, promotion, and product. Through patronage, the client judges the relevance of the 4Ps. Patronage is undoubtedly the objective of the four Ps of marketing.
However, relationship marketing appears to go a step further and seek to secure the customer’s loyalty. In this scenario, the corporation should not limit the definitions of its business organization to profit maximization, but should instead view itself as a responsible citizen whose priority is the well-being of its customers. Consequently, business organizations such as banks and even GSM service providers engage in program sponsorships and community social responsibility projects in their business locations and, in the majority of cases, beyond. In an apparent eulogy, Arens (2006:241) stated, “A market-driven firm’s primary objective is to produce satisfied, loyal consumers. Customers, not things, are the business’s lifeblood. This is reinforced by the fact that, “customers can choose from a vast array of items and services offered by manufacturers located throughout the world. Therefore, the client connection, of which the sale is only the beginning, is the most important strategic asset for a successful firm in the twenty-first century (Fredrick 1994:22).
Relationship marketing is therefore defined as any effort by a firm to retain clients by fostering healthy relationships. Relationship marketing approaches include public relations and advertising as promotional tools, as well as integrated marketing communications. Relationship marketing is supported by public relations, which rely on goodwill between the organization and its publics (markets). Arens (2006: 338) defines public relations as “the management function that focuses on the connections and communications that individuals and organizations have with other groups (called publics) in order to create mutual goodwill.”
Therefore, it is not surprising that businesses such as banks periodically do corporate image research to determine how the organization is seen by its publics.
The outcome of the research permits the organization to re-strategize its actions in order to create a positive corporate image in the minds of its audiences. This indicates that effective communication is a prerequisite for relationship marketing. The target market is kept appropriately informed of the organization’s operations by providing the correct information at the right time to the right group. Mckenna (1988:88) recognized that all of these messages or brand encounters, whether sponsored or not, build an integrated product in the consumer’s mind. The style and manner in which words are constructed impacts the connotation they evoke in the minds of the public, as well as the extent to which a business gains the loyalty and trust of its customers.
Nevertheless, the degree of increased rivalry in the current global era has forced the integration of advertising, public relations, marketing, and similar operations (thus, integrated marketing communication) in order to build and maintain relationship marketing. Consequently, integrated marketing communication is the process of establishing and strengthening mutually beneficial connections with employees, customers, other stakeholders, and the general public through the development and coordination of a strategic communication program. According to Shultz, such communication enables them to have a positive experience with the company’s brand via a range of media and other contacts (Shultz 1993:5). Why is relationship marketing so important? Fredrick (1992:1) perhaps supplied an answer when he stated, “Companies must focus on managing loyalty among carefully selected customers and stakeholders in order to prosper” (employees, centers of influence, stakeholders, the financial community and the press).
According to Gary, this is crucial since “no amount of promotion is likely to bring back a consumer lost due to inferior products or service.” The actual profit lost is a company’s lifetime customer value (LCV). In addition, research continues to demonstrate that 90 percent of a manufacturer’s profit derives from recurring purchases (Gary 1993:21). Since retaining consumers costs less than acquiring new ones, it makes economic sense to secure and maintain their loyalty, patronage, and understanding. In spite of this, the influence (if any) of relationship marketing on clients in a competitive market economy like Nigeria has been questioned on numerous occasions.
In particular, however, the increased competitiveness among banks, particularly those located in commercial nerve centres such as Port Harcourt in the state of Rivers, which has resulted in aggressive advertising and marketing of their products and services, has also sparked controversies and raised concerns. People have consequently continued to question the impact of their direct marketing strategy, sale promotion, advertising, media mix strategies, and other relationship marketing activities on their customers, as well as their overall patronage and perception of the business. In contrast, the literature on how these methods affect client loyalty in Port Harcourt banks, and Zenith bank in particular, is scarce. This deficiency may limit insight into how relationship marketing may or may not contribute to attempts to maintain consumer loyalty and grow patronage.
This forms the foundation for this study, which among other things investigates the impact of relationship marketing on Zenith bank’s customers’ continued patronage using Port Harcourt Town as a case study. Therefore, the outcome of this study would either justify the human and financial resources invested in relationship marketing activities, or it would not.
The purpose of this study is to determine the extent to which the relationship marketing efforts of Zenith bank affect public opinion, loyalty, and patronage in Port Harcourt, Rivers State, with a justifiable bias toward banks.
1.2 Statement of the Issue
Increasing competition in the banking industry has compelled banks to establish long-term relationships with consumers, as it is more expensive to acquire a new customer than to keep an existing one. This explains why Zenith bank, like other banks, seeks to use relationship marketing strategies, which include public relations, advertising, integrated marketing communications, direct selling, etc. Insofar as the literature is concerned, it is unknown if, despite the enormous sums spent on this effort, individuals may not demonstrate a commensurate level of enthusiasm and interest in starting businesses that operate with such institutions. The literature search revealed that this issue has not been recorded, leaving a knowledge gap about the effect of relationship marketing on consumers’ continued consumption of Zenith bank, Port Harcourt’s services. On the basis of this premise, the researcher seeks to determine the effect of relationship marketing on consumers’ continued patronage of banks, utilizing the relationship marketing activities of Zenith bank (in Port Harcourt) as a point of reference.
1.3 Objectives of the Investigation
This study’s primary objectives are:
To determine how Zenith Bank Port Harcourt customers engage in relationship marketing.
To examine the relationship marketing strategies utilized by Zenith Bank in Port Harcourt.
To evaluate the applicability of such relationship marketing strategies within the context of Port Harcourt’s socioeconomic realities.
To investigate how individuals view these relationship marketing strategies.
Determine the impact of such relationship marketing strategies on consumer preference for Zenith bank products and services.
1.4 Questions for Further Research
The following research questions led the investigation for this study:
What is the frequency with which Zenith bank Port Harcourt engages in relationship marketing?
What distinct relationship marketing strategies does Zenith Bank Port Harcourt employ?
How relevant are Zenith bank’s relationship marketing strategies in light of the socioeconomic reality of Port Harcourt residents?
How does the public perceive the relationship marketing strategies of Zenith Bank?
How has the relationship marketing initiative of Zenith bank in Port Harcourt affected client loyalty?
1.5 Significance of the Investigation
This research will be significant for the following:
This academic project will investigate pertinent relationship marketing challenges. This would highlight the interconnections between many academic areas such as Mass Communication, Marketing, and others.
The study would investigate pertinent theories that provide insight and comprehension of the topic, as well as provide a theoretical foundation for future research endeavors.
Professionally, the study would aid bank professionals in evaluating their relationship marketing tactics and efforts to determine if they are producing the expected results. This would allow them to fine-tune corrective or remedial actions for increased productivity and efficiency.
1.6 Limitation and Study Scope
This research is limited to employees of Zenith bank, the Port Harcourt city branch, and the College of Health Sciences, University of Port Harcourt, Port Harcourt Campus, Rivers State. In addition, a cross-section of Port Harcourt Market merchants were selected for the study. The researcher chose this type of personnel since the majority of them use the bank as their primary financial institution and they are educated. They also may readily examine various relationship marketing strategies of the bank under consideration; and express in simple terms their opinion, perception of such techniques and the imprinted picture of the bank on their thoughts.
1.7 Definition of Operational Terms
Influence – The extent to which a phenomenon is capable of responding or reacting to stimuli. It is the response or reaction of Zenith Bank’s clients to the bank’s induced relationship marketing strategies.
Relationship Marketing – Zenith Bank’s efforts to develop a trusting, mutually beneficial relationship with its consumers.
Customers — Those for whom the Zenith bank services are intended and who utilize the Zenith bank Port Harcourt’s banking services.
Patronage – Conducting banking transactions with Zenith bank on the basis of the services provided by the bank.
1.8 Company description
The Nigerian international financial services company Zenith Bank. The Central Bank of Nigeria, the nation’s banking authority, has authorized it as a commercial bank. The Zenith Bank is a significant provider of financial services in Nigeria and Anglophone West Africa. As of December 31, 2016, its total assets were :4,739,825 million, while its shareholders’ equity was :616,355 million. The company’s shares are listed on both the Nigerian Stock Exchange and the London Stock Exchange.
In July of the same year, Zenith bank was formally established in May 1990 and began operations in July. It had a $4 million capital base upon its founding. It commenced operations during a time when the government liberalized the banking industry and the central bank issued as many as twenty banking licenses per year to investors. The bank’s first location was a residence on Victoria Island that had been converted into a banking hall. In its early years, the bank experienced fast expansion. Zenith expanded its capitalization to 500 million naira in 1997 in response to a directive requiring banks to strengthen their capital basis.
1.9 Organization of Research
The study consists of five chapters. The first chapter discusses the study’s start and provides context for the study. The second chapter reviews pertinent and related literature. The research technique is described in chapter three, while data analysis and interpretation are provided in chapter four. The final portion of the study covers the summary, conclusion, and recommendations.
THE IMPACT OF MARKETING ON CUSTOMERS’ PATRONAGE OF MONEY DEPOSIT BANKS IN PORT Harcourt
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