The Importance Of Marketing Research In The Nigerian Banking Industry: A Case Study Of Bank PHB

Project and Seminar Material for Business Administration and Management BAM

The Importance Of Marketing Research In The Nigerian Banking Industry: A Case Study Of Bank PHB


Abstract


Due to the economic condition of Nigerian business environment, Banks undertaking new product and services are faced with an environment which is characterized by long lead times from basic research to industrial application, a commercialization phase with short lead times and an increasingly accelerated rate of obsolescence under the global competition of the Product and service development process. Marketing problems are numerous and inevitable as most products are not doing well to satisfy the consumers, as a result of poor marketing research to improve the quality of the product. The basic objective is to address the importance of marketing research on Product and service development and also examine the circumstances under which marketing research can likely be used in the stage of product and service development and its impact on profitability. The questionnaire and interview methods were used to collect data for presentation and analysis. The simple percentage justified the entire findings and the statistical techniques of chi-square explicitly show that market research is pivotal tool for new product and management decision. The entire findings of the study shows that in an attempt to evaluate the use of marketing assessment on new product, the entire area of the study needs a proficient market research development, more budgetary allocation is needed to propel marketing research to boost new product. And the finding of this study is that Bank’s Organizational structures, reveal lack of marketing research department of its own and budgetary allocation to marketing research is inadequate. The recommendation clearly stated that Banks should take note of the type of research approach to use at the stage which is concerned with comparing the concepts with or against existing market of the competitor. Bank PHB believe that new product/service is their life blood; it can be the better way to survive firmly and be more competitive. In addition, the strategy of how to manage new product/service process effectively and efficiently is becoming a powerful way of achieving a competitive edge.


Chapter One


Introduction

1.1 Background to the Study

Today’s world is characterized by major changes in market and economic conditions, coupled with rapid advances in technologies. Banks invest in marketing research on Product and service development (new product/service) to ensure future success in the market. However, most marketing research on new products development are often more likely to fail than to succeed, addressing changing tastes with new products is essential in maintaining customer loyalty, so that good new product / service becomes a key factor in competitiveness. New products development can succeed if Banks change the way they do marketing research. (Hollingsworth 1996, and Jeffery 1998) recommended that new product/service strategies and process should change to follow changes in market and technology.

It is widely recognized that effective Product and service development processes are causally important in generating long-term firm success (Cooper, 1993; Ulrich and Eppinger, 1995; Wheelwright and Clark, 1995). They can lead to a core competence that either differentiates a firm from its competitors (Prahalad and Hamel, 1990) or provides a threshold competency that is necessary just to survive in fast-changing and innovative industry sectors. Given the importance and value of new product / service to firm performance, researchers have developed descriptive frameworks based on linear, recursive, and chaotic system perspectives, which provide different insights and descriptive theories about new product/service process structure and behavior. These are then often the basis for normative research, which seeks to predict and prescribe causality in new product / service processes (Griffin,1997).

The process of new product/service is crucial within an Bank, but it is a complicated and time-consuming process in which several different activities are involved. new product/service is commonly defined by a number of researchers as the transformation of a market  opportunity into a product as a result of the integrative coupling of market assumptions with technological possibilities (Krishnan and Ulrich, 2001., Griffm and Hauser, 1992,1996). The Product Development and Management Association (PDMA) in 2006 defined new product / service as an overall process of strategy, Bank, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product. This means that new product / service is a process that begins with opportunity identification and ends with a set of information that adds value to customers and brings returns to an enterprise.


1.2 Statement of the Problem

Marketing research is a crucial aspect in Product and service development it‟s the very first step to which determines the success of any product. It acts as the foundation and cornerstone of any product.

Unfortunately the importance of marketing research is the aspect that receives the least attention; business need not only rely on promotional strategies, but have to fine tune their marketing research programme with view of improving the quality of their product.

To obtain the desired and appropriate results from marketing research, an Bank must be guided by certain plans to satisfy all or at least most of the Bank objectives for it to be worthwhile.

Thus marketing research if well defined, and formulated has an impact on Product and service development of an Bank and extent to which the firms put marketing research into practice or effect in solving their marketing problems is what this study intends to examine.

Marketing research is now widely accepted as one of the most important asset possessed by Banks


1.3 Objectives of the Study

  1. Highlighting and emphasizing the importance of marketing research on Product and service development on the Nigerian banking sector.
  2. To examine the effect / extent of marketing research contribution to Product and service development in Bank PHB
  3. Examine circumstances under which marketing research is more likely to be used in the stage of Product and service development in Bank PHB
  4. Identify the factors that influence marketing research on Product and service development in Bank PHB.

1.4 Research Questions

  1. What are the importance of marketing research on Product and service development on the Nigerian banking sector?
  2. What is the effect / extent of marketing research contribution to Product and service development in Bank PHB?
  3. What are the circumstances under which marketing research is more likely to be used in the stage of Product and service development in Bank PHB?
  4. What are the factors that influence marketing research on Product and service development in Bank PHB?

1.5 Significance of the Study

The important area focused by the study is the importance of marketing research on the Nigerian Banking sector; it is intended to achieve two aims; to contribute to both theory and practice of marketing in Nigeria.

One of the greatest and surest ways of achieving customer satisfaction is the planning and implementation of proper marketing research programme in any business Bank.

Moreover, the new marketing concept emphasizes on customer satisfaction and integration in the Bank towards achieving the single purpose. Therefore, to make these possible, marketers must research properly so as to know the changing need of their customers and the activities of their competitors.

Also the need to re-examined other tools which could be used to reduce the high rate of product failure instead of relying heavily on promotional activities with other tools in marketing to establish whether or not new product will be accepted in the market, it will also expose other areas that have inherent characteristics that make marketing research inevitable instrument for product development.


1.6 Scope of the Study

This study is analytical in nature to Product and service development found in commercial Banks; the reason behind this delimitation is because the study intends to assess the importance of marketing research on Product and service development in the Nigerian banking sector.

The scope of this study is limited in four respects: the unit of measure for this research, the classification of the firm, the type of technology of the firm and identification of firms for the study. First, consider the unit of measure for this research. The unit of measure for this research is the product/service of the firm, classification of the firm is financial institution, type of technology is ICT and identification of firm is bank PHB.


1.7 Limitations of the Study

Some constraints were encountered, during this project. These limitations do not suggest that it is an unfulfilled activity, it only suggest that the activity was conducted with proper care and caution which will make the activity meaningful and result oriented;

Miscellaneous limitation problem developed due to changing environment.

Uncertainty of conclusions consumer is the focal point, buying motives are difficult to judge precisely and accurately which bring some sort of uncertainty.

Complexity of the subject it fails to give complete and correct guidance to the management on marketing issues.
Also cost expensive and time consuming activity it take longer period for completion and the finding when available may prove to be outdated due to fast changing market environment and cannot study all new marketing product.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

The research is an assessment of the Importance of marketing Research on the Nigerian Banking sector, which is divided into five chapters.

Chapter one introduced the study, it states how marketing has been an important tool for determining the success rate of a new product generating more revenue for the entire success of Bank PHB. It also consists of the statement of the problems, significance of study, limitation of the study, scope of the study, limitation of the study and definition of terms. The objective of the study was to examine the contribution and the importance of marketing research on Product and service development, and examine circumstances under which marketing research is more likely to be used in the stage of new products development and the importance of marketing research on the profitability.

The chapter two explains why the researcher has decided to go into the area of study. The literature consists of the area of product control, sales, targeting and sales forecasting, it states that although, marketing performance in the market, not much emphasized in most Banks. Attempt has been made to look at some theories, research in marketing and the types of research that exist in the field of marketing such as product research, consumer marketing analysis, sales promotion, primary research, distribution research etc.

Chapter three explain the research design of study, techniques and sample size, methods of data collection, method of data analysis and research instruments used. In all, the chapters explain how the research came about, how the data was collected and how the data was analyze to help solve the problem at hand.

Chapter four dealt with the analysis of the relevant data collected for the research, the chapter also dealt with interpretation of the data.

Chapter five is just the summary of all that is contained in the first four chapters.

It contains the summary, conclusion, recommendation and references.


5.2 Conclusion

Despite the huge amount of money spent for the promotion activities in most Banks, the products are not well recognized. This means that the planning and development stage of the Bank are the most important areas to consider before any other thing.

Banks succeed more with uniqueness rather than uniformity. Uniqueness entails doing things completely different from the usual way adopted by competitors and other Banks. To have uniqueness in methods, procedures, processes and systems, Banks need to have the right caliber of people to bring about these changes to stimulate them and to live with them for the purpose of gaining a competitive edge and advantage over the competitors. To achieve these, Bank must spend a lot on marketing research to achieve uniqueness and product delivery.

If sufficient research is undertaken, then the chances of failure are reduced. Indeed, the danger that many Banks wish to avoid is the development of products without any consideration of the market.

Marketing research would lead to higher new product/service success, and that the integration of marketing research would be the most important of the factors contributing to success in new product/service of Bank PHB. Banks which use marketing research intensively and understand consumer response in great depth are more likely to have higher success rates. The more extensive use of marketing research appears to be related to more experience in doing new product/service and a larger role for new products in the Banks. Use of marketing research also allows Banks to set quantitative goals for new products, and more carefully evaluate performance after launch.
Also most Banks can be regarded as pace setters or market leaders in their various markets, if only they take time in doing marketing research on Product and service development.


5.3 Recommendations

In order to undertake a systematic product planning and development, in marketing research, the researcher is making the following recommendations.

  1. Most Banks should invest in promotional activities to enable the product sell in the market and to increase the profitability of the Bank.
  2. Also Banks should adopt the scientific method of product planning and development within the context of marketing research.
  3. Another recommendation that can be put forward is that, more money should be invested in promotional activities to enable the product sell in the market.
  4. That they should also conduct gap analysis of the existing products by interviewing a representative of consumers to find out their views about the Bank’s existing products before thinking of producing another one.
  5. They should also take note of the types of research approach used at the stage which includes monadic approach which is concern with comparing the concept with or against existing market after of the competitors. The Holistic approach of data about the marketing mix variable such as price, promotion package and distribution.

Although the Banks conduct testing, it may suggestion that the Bank studies very well the procedure of product testing which varies from Bank to Bank and product to product. It is also expensive since it involves raw materials, machinery, and accuracy of new skill production.

Like product testing, marketing test also involve some procedure of which I will suggest Banks to adopt to ensure successful marketing test, and take note of the information required during the marketing test.


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