Effect Of Market Promotions On The Performance Of Commercial Bank (A Case Study Of First Bank Branches In Enugu City)

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Effect Of Market Promotions On The Performance Of Commercial Bank (A Case Study Of First Bank Branches In Enugu City)


Abstract


The study was conducted to determine the effects of market promotions on performance of commercial banks.It was conducted between September and November 2021 at First Bank branches in Enugu city in Enugu state Nigeria. The study was done because in most cases commercial banks uses some promotional strategies but the effects of these promotional strategies on sales performance has not been unveiled. The study adopted a case study as a research design. The researcher used questionnaires and interview schedule to collect data from 50 respondents, which were taken from a target population of 70 respondents. The researcher used census on the employees and used convenience sampling to sample the customers. Data was analyzed and presented using descriptive statistics including frequency tables, and percentages. The findings indicated that the organization uses personal selling as a major promotional strategy. Others are sales promotion, publicity and advertisements. The study also noted the following from the findings as the major challenges facing the organization in sales promotion, they are sometimes expensive, and government regulates promotions, misinterpretation of the promotion, organization structure and policy. The possible solution revealed by the study are, doing research before rolling out any promotional strategy, drawing a good budget , hiring as consultant to run the promotion on your behalf, following the government regulation on product promotion. The study recommended that sales promotion in the organization should be outsourced so as to curb the problem which comes out when the organization conducts. Finally, the researcher suggested that further research be done on other variables that cause variation in sales level.


Table of Contents


Chapter One

1.0 Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objectives of the study
  • 1.4 Research Questions
  • 1.5 Significance of the Study
  • 1.6 Limitation of the Study
  • 1.7 Scope of the Study

Chapter Two

2.0 Literature Review

  • 2.1 Introduction
  • 2.2 Review of the past studies
  • 2.3 Critical Review
  • 2.4 Summary

Chapter Three

3.0 Research Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Target Population
  • 3.4 Sampling Design
  • 3.5 Data collection instruments
  • 3.6 Data collection procedure
  • 3.7 Validity and Reliability of Research Instruments
  • 3.7.1 Reliability
  • 3.7.2 Validity
  • 3.8 Data Analysis

Chapter Four

4.0 Data Analysis, Presentation and Interpretation

  • 4.1 Introduction
  • 4.2 Return rate
  • 4.3 Demographic information
  • 4.4 Specific information on the questionnaire
  • 4.5 Specific information on the interview schedule

Chapter Five

5.0 Summary of Findings, Conclusion and Recommendations

  • 5.1 Introduction
  • 5.2 Demographic information
  • 5.4 Specific information on the questionnaire
  • 5.6 Specific information on the interview schedule
  • 5.6 Conclusions
  • 5.7 Recommendations
  • 5.8 Suggestion for further studies
  • References
  • Appendix
  • Questionnaire

Chapter One


1.0 Introduction

1.1 Background of the Study

In the last four. decades, marketing strategies have evolved from “transactional” to “relationship” marketing. The business model of yesterday supported mass marketing, mass production, and standardized products and services. Companies that continue to rely and operate on this obsolete model will fall behind the competition. (Berry, et al 2002). The reasons for this development are several but include the following; more sophisticated and knowledgeable customers; dramatic changes in technology; the rise of competition; and declining product differentiation in the global business environment. Today’s business world continues to change and has become more volatile in nature. It is against this background that Weinstein & Johnson (2003) recommend that at least 75% of an organization’s marketing effort should be focused on customer retention, by building and maintaining strong relationships with customers.

According to McDonald (2016) in developing on integrated marketing communication strategy a company combines the promotion mix element balancing the strength and weakness of each, to produce an affective promotional campaign promotional management involves coordinating the promotion mix elements to develop a controlled integrated program of effective marketing communication. The marketer must coordinate and consider which promotional programs including the type of product the target market the buyer decision process, the storage of product life cycle and the channel of distribution companies selling programs products and services generally rely on advertising through mass media to communicate with customers.

According to Kottler (2016), Business to business markets, who generally sell expense risky and often compiles product and services, more often use personal selling, business to business marketer such as Honey well do use advertising to perform important function such as building awareness of the sales force and assuring customers about the purchase they have made. Of the sales force andsales promotion objective are derived from promotion objectives which are derived from more bases marketing objectives development for the product. The specific objectives set for sales promotion vary with target market. for consumers objectives including purchasing large-size units building trial among non-users and attracting switchers away from competitors hands. For retailers the objective include persuading them to any new items and higher levels of investing encouraging all season buying –encouraging stocking related items or setting competitive promotion, building brand loyalty and gaining entry into new retail outfits. For sales face objective include encouraging support of a new product or model encouraging more prospecting and stimulating of seasons sales (Kottler 2016).

Commercial banks operate in a new dynamic environment caused by the increasing speed and turbulence of changing customer needs and expectations, technological change, and the move to global and multi-cultural organizations. Emphasis on marketing strategies in commercial banks is gaining faster attention in Nigeria. In the changing environment, commercial banks have increasingly recognized marketing strategies as the engine, which drives the service-profit chain. Hackett (2014), argues that for the commercial banks to survive the competitive environment they need to adopt a new marketing approach based on the changing needs and expectations of customers. Every marketing strategy is unique, but if they are abstract from individualizing details, each can be reduced to a generic marketing strategy. There are no given sets of marketing strategies adopted universally, and different schools of thought have their own unique ideas but the following categorizations are the most accepted.
The first strategy is that of product strategies, which ask the question, “How should the SME product be developed features, design and quality?” The other strategy is that of Price Strategies, which asks, “How should the SME product be priced?” Third strategy is that of Place or Distribution Strategies and this asks, “Where should the outlet be located?” The fourth and the last strategy is the Market promotions and ask, “Is the firm using any communication form to inform or persuade prospects?”

Commercial banks started its operations recently and has seemed to gain favor with the customers. But the price factor is one of the challenges that are facing the firm. This is because customers do compare prices of products or services before they decide to purchase a product. The issue of quality also arises. Therefore price and quality goes hand in hand since they are perceived to be key factors each organization has to consider.

The fast food sector in Nigeria is facing increased competition from more %established fast food chains mainly from Southern Africa. It is therefore necessary to identify the critical marketing strategies needed for this industry to be competitive. Thus, commercial banks need to identify key marketing strategies that are needed for sales success. This study will then render itself towards relating market promotions to sales of the fast food baronesses, in Nigeria.


1.2 Statement of the Problem

According to Aaker (2018), for a long time there is need to recognize the need to develop focused marketing strategies as the nerve center for sales growth and sustainability of an SME. Globally, the sales of products produced by entrepreneurs gives on stagnating because these entrepreneurs have low education levels as far as sales promotions is concern, yet it is an essential ingredient to increase business success. They lack effective networks, which help in product marketing and sales acceleration.

In Nigeria, there are a lot of commercial banks that they struggle for survival in the market yet they produce a lot of good and quality products to satisfy the market. They utilize the sales market promotions that they have knowledge on.

Most of these commercial banks utilize the promotional strategies to survive the intense competition in the market. In most cases the organization may seem to be either small to employ these strategies or it may lack resources but still they use a variety of promotional strategies that the organization uses. Commercial banks also is an example of these commercial banks that employees promotional strategy. The scope of the effects of these promotional strategies is what a remains mystery to the researcher. It is from this background that the current study will be undertaken to examine the impact of market promotions on sales. This consists of various elements known as promotion mix. They include advertising, personal selling, sales promotion, publicity and public relation. However, the current study will concentrate its effort on market promotions only.


1.3 Objectives of the Study

The main objective of this study was to investigate on the effect of market promotions on the performance of commercial banks.

However, the specific objectives were

  1. To identify market promotions being used in First bank branches in Enugu City
  2. To assess the impact of market promotions on sales volume at First bank branches in Enugu City
  3. To find out how the promotional strategies enhance stability at First bank branches in Enugu City
  4. To identify challenges facing First bank branches in Enugu City In using promotion strategy advertising

1.4 Research Questions

The study seeks to answer the following research questions

  1. What market promotions are being used in First bank branches in Enugu City?
  2. What are the impacts of market promotions on sales volume at First bank branches in Enugu City?
  3. How can the promotional strategies enhance stability at First bank branches in Enugu City
  4. What are the challenges facing First bank branches in Enugu City using the promotional strategies?

1.5 Significance of the Study

This study would be important and valuable to the following persons and institutions:

Academicians

Persons in academia such as college students and lectures will find the results of this study useful as learning materials and for research reference.

Entrepreneurs

Entrepreneurs or the investors in the fast food industry will find the results of this study useful, as it will highlight pertinent market promotions that can drive sales in their enterprises.

Financial Institutions

Financial institutions that provide financing to the fast food industry to start up and continue operations will use these findings to enable them understand the needs of commercial banks, so as to develop financial products relevant to them.

Customers

Customers or the fast food buyers of products from fast food industry will benefit from the results of market promotions that are geared towards meeting their needs.

Competitors

The rival enterprises in the same industry will benefit from a better understanding of effective use of market promotions to enhance sales.

Potential Entrepreneurs

These are enterprises or ventures interested in having a stake in the fast food industry. They will us use results of this study to make informed decisions on whether or not to invest in the fast food industry.

Marketing Intermediaries

Marketing intermediaries such as advertising and research agencies will find the results of this study useful as they carry out their activities based on a wider knowledge platform.


1.6 Scope of the Study

The study focused on the effects of market promotions on performance of commercial banks. The study was undertaken between September 2021 and October 2021, using a case study design. The study targeted a total population of 70 respondents. A sample size of 50 respondents was selected using census sampling technique for the employees and convenience sampling technique for the customers. Questionnaires and interview schedule were employed to collect data. Data collected was analyzed using frequencies and percentages and was later presented in tabular form. The study was carried out in First Bank branches in Enugu city.


1.7 Limitation of the Study

In conducting this research, a number of challenges were faced by the researcher and could have effects on the interpretation and use of the final findings. The organization policies are so rigid such that some respondents were unwilling to freely share the information. This was mainly seen at junior level because of fear of not knowing whether the information will go to the manager with negative percussions. Most of the respondents refused to release full information in fear of the information will be used to track their performance. Nevertheless, the researcher overcame these limitations by explaining to them the objectives of the study and promises them any information provided would be treated with confidentiality.


Chapter Five


5.0 Summary of Findings, Conclusion and Recommendations

5.1 Introduction

This chapter presents the summary of findings, conclusions and makes recommendations based on the study findings in chapter four. In addition, suggestion for further study in specific area related to the variables under study.


5.2 Demographic Information

This is the summary of findings on the demographic information of the respondents. The information on background of the study include, gender, age, level of education and working experience.

5.2.1 Gender of Respondents.

It was established from the findings that 60% of the respondent were male, while 40% respondents were female employees. On the other hand 70% of the customers were female while 30% were male.

5.2.2 Age Bracket.

The findings revealed that majority of the respondents i.e.30% are aged between 34-41 years, 20% were aged between 18-25 years which were same as the ones having an age between 26-36 years. The remaining 10% felt in the age bracket of 42-49 years. On the side of the interviews the researcher found out that majority 40% were aged between 18-25 years, 30% were aged between 26-33 years, some 20% falls in the age group of 34-41 years. Other few 10% having an age bracket of 42-49 years and there were no employee who had an age of over 50 years.

5.2.3 Level of Education for Respondents.

The field findings indicated that, majority of the respondents are diploma holders as represented by 40% of the respondents, 30% were degree holders, 20% were certificate graduate and the remaining 10% hold a second degree. The customers’ level of education was also sought. It was established that 50% of the customers had attained certificate level, 30% were diploma holders and 20% were degree holders. There was no customer with masters as the highest level of education.

5.2.4 Working experience for respondents.

The findings revealed that majority of the employees had worked between 3-5 years as represented by 40%, 30% had worked for a period between 6-8 years. The other 20% had worked for a period ranging between 6-8 years and 10% of the respondent had worked for over 8 years.

5.2.5 Duration in which the customer had been dinning in the organization

The findings indicated that most of the respondents had been visiting the organization for a period of 0-2 years as represented by 40%. 30% of the respondent cited that they have been visiting the organization for a period ranging between 3-5 years, there were 20% of the respondent who cited that there have been using the organization for a period of 6-8 years. The remaining 10% cited that they have been using the organization for a period of over 8 years.


5.4 Specific Information on the Questionnaire

This section discuses the research objectives and tries to answer the research questions as per the employees of the organization that is commercial banks

5.4.1 Promotional strategies that your organization uses to promote sales

It was established from the findings that 40% of the respondent felt that the organization uses personal selling as a promotional strategy. There was 30% of the respondent who cited that they use sales promotion, 20% cited that the organization uses publicity as a promotional strategy. While only 10% said that it uses advertisements.

5.4.2 Impacts of market promotions on sales

The findings from the field indicated that increase in sales is a major impact of promotional strategies in the organization; this was according to 40% of the respondent. It was also realized that expansion of sales territory stands also as an impact this was according to 30% of the respondent. The remaining 20% felt that increase in organizational profit is also an impact and only 10% cited that it is the improvement of the organizational image.

5.4.3 How promotional strategies enhance stability at the organization

The researcher established from the field findings that, increase of profit stands as a major indicator of stability brought by the use of promotional strategies; this was according to 50% of the respondents. 33% of the respondents cited that increase of organization capital is another way on which promotional strategies enhances organizational stability. There were only 10% of the respondents citing that promotional strategies enhance stability by increase in customers leading to high sales. The remaining 7% felt that customer’s loyalty leads to stability.

5.4.4 Challenges facing First bank branches in Enugu City using the promotional strategies

The researcher established the following from the findings as the major challenges.

  1. They are sometimes expensive
  2. Government regulates promotions
  3. Misinterpretation of the promotion
  4. Organization structure and policy
5.4.5 Possible solutions to the challenges mentioned

The respondent gave the following possible solutions

  1. Doing research before rolling out any promotional strategy
  2. Drawing a good budget
  3. Hiring as consultant to run the promotion on your behalf
  4. Following the government regulation on product promotion

5.6 Specific Information on the Interview Schedule

This section tries to answer the research questions as per the customers opinion, that is the interview carried out as the customers being respondent.

5.5.1 Promotional strategies that organization has been using

The researcher found out from the findings that publicity and personal selling are the major types of promotional strategies employed by the organization this was according to 40% of the respondent. The remaining 20% felt that sales promotion is also a type. There were no respondent who cited that the organization uses advertisement.

5.5.2 Impacts of promotional strategies

The researcher established from the findings that 40% of the respondent cited that the major impact that promotional strategies brings is increaser in sales turnover, 30% cited that expansion of sales territory and 20% felt that it is improvement of organizational image. The remaining 10% cited that promotional strategies increase organizational profits.

5.5.3 How promotional strategies enhance stability at the organization

The researcher established from the field findings that, majority that is 50% of the respondents cited that increase in customer’s leading to high sales is a way that the promotional strategies can enhance organization’s stability, 30% of the respondents cited that increase of profit is also an indicator whereas only 20% of the respondents cited increase in organizations capital. There were no respondents who cited customer loyalty as a way of sales promotion enhancing stability

5.5.4 Problems that consumer normally see in the promotional strategies

The researcher established the following as the major problems cited by the respondent

  1. Customers are alienated
  2. Customers unfelt needs are not met
  3. Incompetent employees
  4. Inflexible organizational policy
5.5.5 Possible solutions to the problems mentioned above

It was established from the field that the following could be possible solutions

  1. Involve customers in promotion
  2. Doing research on customers needs
  3. Outsourcing sales promotion services
  4. Training employees on customer care

5.6 Conclusions

The study established that the organization uses personal selling as a major promotional strategy. Others are sales promotion, publicity as and advertisements. The findings further indicated that increase in sales is a major impact of promotional strategies in the organization; the other impacts realized are expansion of sales territory, increase in organizational profit is and improvement of the organizational image.

The study also revealed that increase in customer’s leading to high sales is a way that the promotional strategies can enhance organization’s stability others are increase of profit, increase in organizations capital

The study also noted the following from the findings as the major challenges facing the organization in sales promotion, they are sometimes expensive, and government regulates promotions, misinterpretation of the promotion, organization structure and policy. The possible solution revealed by the study are, doing research before rolling out any promotional strategy, drawing a good budget , hiring as consultant to run the promotion on your behalf, following the government regulation on product promotion


5.7 Recommendations

Based on the findings of this study on promotional strategies and its effects on sales, the researcher would like to make the following as the recommendations

All the sales market promotions type are very necessary when doing product promotion, but the organization should chose from the many one type which is effective, pocket friendly and also better understood by customers
Sales promotion is not an easy task so the organization should take great care when doing it. And if possible the organization should consider hiring a sales promotion firm to carry out on its behalf. This will rule out the aspect of employee incompetence and conflicts from the government.


5.8 Suggestion for further studies

This study presents significant findings that can facilitate and enhance the impact of promotional strategies employed by fast food business in enhancing its sales performance so as to foster organizational growth, however there is still much that can be done in the same capacity. The researcher suggested that further research be done on other variables that cause variation in sales level since market promotions are not the only factors that cause such variations and also there is a possibility that market promotions impact on sales jointly with other variables or factors that may not have been exhausted by the researcher.


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