THE RELATIONSHIP MARKETING ON CUSTOMERS PATRONAGE OF MONEY DEPOSIT BANKS IN PORT HARCOURT (A CASE STUDY OF ZENITH BANK PH CITY)
TABLE OF CONTENTS
Abstract
CHAPTER ONE: 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 Delimitation/Scope of Study
1.7 Definition of terms
1.8 Company profile
1.9 Organization of study
References
CHAPTER TWO: LITERATURE REVIEW
2.1 Focus of Review
2.1.1 Perception of Relationship Marketing and its Influence On Organisational Corporate Image
2.1.2 Media Mix and Relationship Marketing Techniques
2.1.3 Influence of Relationship Marketing on Custormers’ Patronage
2.1.4 Relationship Marketing within the context of socio-economic Realities
2.2 Summary of the Review
2.3 Theoretical frame work
Social Relationship Theory
Image Restoration Theory
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research design
3.2 Population of Study
3.3 Sample size
3.4 Sampling techniques
3.5 Measuring Instrument
3.6 Validity
3.7 Reliability
3.8 Method of Data Analysis
3.9 Determination of the Cut-off Point
References
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Description of the sample
4.2 Data Presentation and Analysis
4.3 Discussion of finding
References
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendation
BIBLIOGRAPHY
APPENDCES
ABSTRACT
The competitive nature of our capitalist economy has obviously necessitated the application of certain techniques by banks in a bid to sustain customer patronage, remain in business and outwit competitors. Herein lies the substance of relationship as a communication, marketing and public relations technique aimed at sustaining customers’ patronage. On this note therefore, this study among others, examines the influence of relationship marketing in customers’ patronage of banks with focus on Zenith bank Port Harcourt city branch. For the purpose of this study, the survey research design was used to study a representative size of the population total of 371 sample size was studied from a target population of 1,452 which is the population of academic staff of College of Health Sciences Port Harcourt campus and a target population of 2568 business men of which 200 were studied.Similarly a sample of 6 was purposely selected from a total number of 30 Zenith bank staff of Port Harcourt city branch. Questions designed in the Likert Scale Format was used as major instrument for the collection of data while mean score was used for the analysis of the research data. Findings revealed that zenith bank Port Harcourt city branch regularly carried out various relationship efforts in line with the socio- cultural norms of the people of Port Harcourt and this has translated to positive influence on patronage by its customers. The study therefore concludes that such relationship marketing efforts underscores why College of Health Sciences Port Harcourt Campus of University of Port Harcourt Awka still retains Zenith bank as their official banks without staff members agitating for a change of bank. The study revealed also that the business men accepted the relationship marketing of the Zenith Bank. Deriving from this therefore, the study recommends that Zenith bank PLC should increase the community social responsibility efforts for a steady long term relationship marketing and patronage in line with the focus of relationship marketing.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Relationship marketing (RM) aims at establishing, maintaining and enhancing relationships between the organization and the customers at a profit so that the organization’s objectives are met. When the relationship is established between the customers and the company, brand loyalty is created from the customer’s repeat purchase and this translates to more profits for the company (Victor 1990:36).
Relationship marketing is a concept that has gained popularity over the recent years. Companies and banks are beginning to understand the value of creating a relationship with the customers. Consequently, they are now striving to develop meaningful relationship more proactively. This concept was originally introduced by Leonard Berry in 1983 when he emphasized that relationship marketing was based on the concept of developing a long term relationship with a customer for the purpose of patronage bearing in mind that other competitors are always available (Yan and Wu, 2007).
According to Doyle & Stern (2006:3), relationship marketing is a long term continuous series of transactions between parties which occurs when each trusts other to deal fairly, reliably and helpfully. Relationship marketing has therefore emerged as “a popular new paradigm due to shift in focus from customer acquisition to customer retention. It is likely to shift once again and will transform into customer relationship management (CRM) with a hybrid of marketing relationship programs that range from relation to out sourcing market exchange and customer interactions” (Sheth & Kellstall,2002:30). It therefore suggests that when a good working relationship is built, negotiating time and costs are reduced and the patterns of transactions become more predictable and secure.
Due to increased competition, today’s banks are beginning to understand and employ the techniques of relationship marketing. To retain these customers, banks are now striving to develop meaningful relationships with key customers and moreso to manage those customer relationships more proactively (Connor, Galvin, Evans , 2004:16).
Relationship marketing therefore attempts to create a more holistic, personalized brand experience (service) to create stronger customer ties. According to Kottler and Armstrong, (2009:14) a number of companies are today offering services and relevant facts to individual customers based on information about past transaction, demographics, psychographics, media and distribution preferences. By focusing on their most profitable customers, products and channels, there is a firm hope to achieve profitable growth capturing a larger share of each customer’s expenditure by building high customer loyalty. Relationship marketing is aimed at retaining existing customers since attracting new customers may cost up to five times more than retaining an existing customer.
If Zenith Bank PLC and other commercial banks in Port Harcourt, Rivers State aim at increasing the size of their customers, the banks must train their employees in cross selling and up selling their products. There is need to realize the benefits from lowered costs and increased profitability from long term relationships between firms and their customers. On the other hand, customers will enjoy the transactions of an organization that understands them and their requirements and they will also have a reliable financial service provider.
Simply put, therefore, relationship marketing involves all activities and efforts of the business organization aimed at creating and sustaining healthy relationship with the customers. This is necessitated by the fact that the customer is central to organizational activities. There is credence by the increasing rate of competition in the business circles especially in the banking sector. It is on this note therefore that Victor (1970:11) acknowledged that; “the key to successful marketing is having the right product at the right price in the right place with the right promotion”. In the end, the person who decides the rightness of these four elements is the customer. The customer is therefore central to the 4Ps of marketing which are: Price, Place, Promotion and Product. It is the customer that determines the relevance of the 4Ps through patronage. Patronage therefore, is arguably the target of the 4Ps of marketing.
However, relationship marketing seems to go a little beyond patronage and aims at securing the loyalty of the customer. The company, in this instance, should not limit the definitions of the business organization to the confines of profit making but should see it as a responsible citizen whose interest is to provide customers’ well being. It is on this note therefore, that business organizations such as banks and even GSM service providers get involved in programme sponsorships and community social responsibility projects in their business locations and in most cases, beyond. In his seeming eulogy to this, Arens (2006:241) noted that, “A market driven firm’s overriding purpose is to create happy, loyal customers. Customers, not products, are the live-blood of the business”. This is underscored by the fact that, “customers can choose from a wide variety of products and services offered by producers located around the world. As a result, the customer relationship, which the sale is only the beginning, is the key strategic resource of the successful twenty-first century business (Fredrick 1994:22).
It therefore suffices that every organizational efforts at retaining customers’ patronage through building a healthy relationship qualifies as relationship marketing. In fact, public relations and advertising as promotional tools qualify as relationship marketing techniques, so also do integrated marketing communications. The above gains support from public relations which leans on goodwill between the organization and its publics (markets) hence, relationship marketing. It is therefore in support of the above that Arens (2006: 338) explained public relations as: “The management function that focuses on the relationships and communications that individuals and organizations have with other groups (called publics) for the purpose of creating mutual goodwill.”
It therefore stirs no surprise that organizations like banks intermittently engage in corporate image research with a view to finding out how the organization is being perceived by its publics.
The result of the studies enables the organization to re-strategize its activities in order to make for good corporate image in the minds of its publics. It therefore implies that effective communication is a sine-qua- non for relationship marketing. Providing the right information at the right time to the right group keeps the target market adequately informed on the organizational activities. Little wonder then that Mckenna (1988:88), acknowledged that all these communications or brand contacts sponsored or not, create an integrated product in the consumer’s mind. The way and manner words are framed determines the meaning it conjures in the mind of the public which also determine the degree at which such organization secures the loyalty and trust of the customer.
Be that as it may, the degree of heightened competition in this global age has necessitated the combination of such practices as advertising, public relations, marketing and their likes (hence, integrated marketing communication) at establishing and sustaining relationship marketing. Definitively, therefore, integrated marketing communication is the process of building and reinforcing mutually profitable relationships with employees, customers, other stakeholders and the general public by developing and co-coordinating a strategic communication programme. According to Shultz, such communication enables them to have a constructive encounter with the company brand through a variety of media or other contacts (Shultz 1993:5). Why much emphasis on relationship marketing? Fredrick (1992:1), arguably provided an answer when he noted that to succeed, “companies must focus on managing loyalty among carefully chosen customers and stakeholders (employees, centers of influence, stakeholders, the financial community and the press).
According to Gary, this is supposedly important since, “No amount of advertising is likely to win back a customer lost from shoddy products or poor service. The real profit lost is the lifetime customer value (LTCV) to a firm. Moreso, research evidence has continued to show that, “90 percent of a manufacturer’s profit comes from repeat purchases” (Gary 1993:21). It therefore makes business sense to secure and retain the loyalty, patronage and understanding of customers since such costs less than wooing new ones. Be that as it may, the question has often been raised on the degree of influence (if any) such efforts at relationship marketing do have on customers in a competitive market economy like Nigeria.
In specifics, however, the heightened competition among banks especially those located in commercial nerve centres such as Port Harcourt in Rivers State which have led to aggressive advertising and marketing of their products and services have also stirred debates and concern. People have therefore continued to question the influence of their direct marketing approach, sale promotion, advertising; media mix approaches and other efforts at relationship marketing on the customers; and overall customers’ patronage and perception of such organization. On the other hand, literature suggesting answers to questions on how these strategies influence customer loyalty in banks in Port Harcourt and in Zenith bank specifically are scanty. This lacuna has the potentials of preventing insight into how relationship marketing may be or not be of benefit to efforts at preserving customer loyalty and increase patronage.
This, therefore, provides basis for this study which among others pries into the influence of relationship marketing on customers’ continuous patronage of Zenith bank using Port Harcourt Town as a case study. Hence, the result of this study would either provide justification for the human and material resources infused into relationship marketing efforts or not.
Herein, lies the substance of this study which is geared towards measuring the degree of influence Zenith bank’s efforts at relationship marketing do have on public perception, loyalty and patronage with a justified bias for banks in Port Harcourt town of Rivers State.
1.2 Statement of Problem
The increasing competition in the banking sector has necessitated the need for banks to build a long term relationship with customers since it costs more to woo a customer than to retain the patronage of an existing customer. This underscores why Zenith bank like other banks seek to embark on relationship marketing techniques which inter alia includes such promotional efforts as public relations, advertising, integrated marketing communications, direct sale, etc. However, it is not known in the literature whether despite the huge amount spent on this effort, people still may not arguably show corresponding interest and enthusiasm to open business that operate with such banks. Literature search showed that this problem has not been documented and this poses a gap in the understanding of the influence of relationship marketing in customers’ continual patronage of the services of Zenith bank, Port Harcourt. It is on this premise therefore that the researcher aims to find out the influence of relationship marketing on customers continuous 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 primarily aims at:
- To find out how regular Zenith Bank Port Harcourt engage in relationship marketing?
- To evaluate various relationship marketing techniques adopted by Zenith Bank in Port Harcourt town.
- To assess the relevance of such relationship marketing approaches within the context of socio- economic realities of Port Harcourt people.
- To examine people’s perception of such relationship marketing approaches.
- To determine the overall influence of such relationship marketing approaches on customers’ patronage of Zenith bank products and services.
1.4 Research Questions
The following research questions guided the research for the purpose of this study:-
- How regular does Zenith bank Port Harcourt engage in relationship marketing?
- What are the various relationship marketing techniques adopted by Zenith Bank Port Harcourt?
- To what extent are relationships marketing techniques of Zenith bank relevant within the context of the socio-economic realities of Port Harcourt people?
- How do the public perceive Zenith bank relationships marketing approaches?
- To what level has a relationship marketing effort of Zenith bank in Port Harcourt town influence customers’ patronage?
1.5 Significance of the Study
This study will be important to the following:
Academically, this study will examine relevant issues related to relationship marketing. This would bring to the fore the inter linkages between various academic disciplines like Mass Communication, Marketing and other related disciplines.
Theoretically related to the above is the fact that the study would explore relevant theories which provide insight and understanding of the subject matter just as it would provide theoretical basis for further research efforts.
Professionally, the study would also help bank professionals to assess their relationship marketing techniques and efforts in a bid to ascertain if it yields desired benefit. Such would enable them tune remedial or corrective actions for better efficiency and productivity.
1.6 Delimitation/Scope of Study
This study is delimited to Zenith bank, staff, Port Harcourt city branch and staff in the various departments of the College of Health Sciences, University of Port Harcourt, Port Harcourt Campus, Rivers State. Also, a cross section of the businessmen in Port Harcourt Market were recruited in the study. The researcher’s choice of category of staff derives from the fact that they are educated, majority of the staff use the bank as their official bank. They also can easily analyze various relationship marketing techniques of the bank under study; and explain in simple terms their opinion, perception of such techniques and the imprinted image of the bank on their minds.
1.7 Operational Definition of Terms
Influence – The degree to which a phenomenon can respond or react to stimuli. In this study, it is the response or reaction to zenith bank’s induced relationship marketing approaches by her customers.
Relationship Marketing- Zenith Bank’s efforts at building a healthy relationship based on trust and mutual benefits with the customers.
Customers – Those for who the Zenith bank services are targeted at and who patronize the banking services of Zenith bank Port Harcourt.
Patronage – Engaging in banking transactions with Zenith bank based on the services offered by the bank.
1.8 Company profile
Zenith Bank is a Nigerian multinational financial services provider. It is licensed as a commercial bank by the Central Bank of Nigeria, the national banking regulator. Zenith Bank is a large financial service provider in Nigeria and Anglophone West Africa. As at 31 December 2016, its total assets was ₦:4,739,825 million with shareholders’ equity of ₦:616,353 million. The shares of stock of the company are listed on the Nigeria Stock Exchange and the London Stock Exchange.
Zenith bank was formally established in May 1990 and commenced banking operations in July of the same year. At inception it had a capital base of $4 million. It began operations during a period of government liberalization of the banking sector, when the central bank granted up to twenty banking licences a year to investors.The bank’s first office was originally a residential house in Victoria Island that was modified into a banking hall. In its early’s years, the bank witnessed a period of rapid growth. In 1997, following a directive for banking institutions to shore up their capital base, Zenith increased its capitalization to 500 million naira.
1.9 Organization of Study
The study is divided into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.
References
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Connor J., Galvin E., Evans M. (2004: 16). Electronic Marketing Companion. Financial Times Press. Uk.
Fredrick, W. (1992). The changing role of marketing in the corporation. Journal of Marketing, October 1992.
Fredrick, W. (1994). Defining the new marketing concept. Management. No.2 Vol. 4.
Gary, L. (1993). Wonder man: personalized marketing will gain dominance.Advertising Age. July-12.
Kotler P, Armstrong G. (2009) Principles of Marketing. Pearson Prentice Hall, New Jersey.
Mason, R, Patrice and Ross. (1980). Marketing practices and principles. (3rd ed.):W.A. McGraw Hill .
Philip, K. & Gary A. (1994). Principles of marketing. Engle land Cliffs :N.J Prentice Hill.
Regis, M. (1993) Four Basic Rules of Ground work for integration. Marketing news.
Victor, B. (1990) Hand book of Modern marketing. New York: McGraw-Hill.
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