Marketing Mix for Banking Sector

Topics: Marketing, Marketing plan, Strategic management Pages: 15 (4410 words) Published: February 18, 2013

The deregulation of the Nigerian economy through SAP affected the Nigerian financial system in many ways (Umunnaehila, 1996). These include methods of licensing new banks and financial institutions, the pricing of credits and deposits, foreign exchange management, the sectoral matrix of credits and deposits, and banks' branch networking, among others. The restructuring policy of SAP, also, brought deregulations in the Nigerian banking system which encouraged many new banks to enter into the Nigerian banking industry, the results of which were shown in intense competition within and without the Nigerian banking industry. This increased competition resulted in banks seeking for clients and designing services that would meet clients' needs and wants. Consequently, Nigerian banks started designing new approaches and strategies to ensure survival and growth (Umoh, 1992). However, the performance of banks in the Nigerian banking system does not seem to have been good enough because while some banks appear to have brought dynamism, challenges, competition, and growth in the banking sector, others seem to have lost some of the confidence which their clients had in them, in addition to poor performance indices in their operations, which have resulted into all forms of distress. This unclear nature of the effectiveness of the approaches utilised by Nigerian banks to cope with changes in the banking environment constituted the major research problem of this study.

The poor condition of some Nigerian banks is a function of some interrelated problems. According to Sheng (1991), the causes of bank distress, or poor performance, are due to micro-economic factors (bank management practices and strategies) or macroeconomic factors (environmental factors). Mamman and Oluyemi (1994) have, however, posited that bank failure/poor performance in Nigeria is a function of mismanagement of relevant dimensions of organisational activities. Informed normative thought is of the impression that superiority of management is a major consideration which differentiates excellent (effective) banks from less successful (ineffective) banks, and this is in contrast to the impression that macro economic variables are the salient factors in all banking failures (Aristobulo, 1991).

Faced with the compelling need to achieve their organizational goals, Nigerian banks can explore new avenues, approaches, strategies or practices to achieve set goals and objectives. Many approaches can be used to achieve set corporate goals and objectives. These approaches are generally called strategic management, and the thrust on strategic management has given rise to strategic marketing (Jain, 1983). Marketing considerations, together with those of other functional areas of business, play an important role in designing and implementing corporate policies and strategies. Once corporate policies and strategies are designed and implemented, the role of marketing is to contribute to their achievement (Cravens, Hill & Woodruff, 1980). Marketing success is a major determinant of organisational success (Adler, 1967), and the future survival and growth of any organisation (including banks) in an economy can be said to be a function of the efficiency and effectiveness of its marketing practices (Udel, 1972).

The changes in the Nigerian banking system demand the adoption of efficient and effective marketing strategies. Nigerian banks need to adjust to the changes in the banking industry. To understand and take advantage of the changes in the industry, which may be opportunities or threats, Nigerian banks need to understand the important factors shaping the Nigerian banking industry and the relevant strategic decisions to be taken. These strategic decisions must take into account the relevant competitive, economic, political, regulatory, legal, technological, and socio-cultural factors, in addition to considering their strengths and weaknesses, among others....
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • MArketing mix Essay
  • marketing mix Essay
  • Service Marketing in Banking Sector. Research Paper
  • Essay about Marketing Mix
  • Banking Service Marketing Mix Essay
  • Marketing Mix Essay
  • Marketing Mix Essay
  • Marketing Mix Essay

Become a StudyMode Member

Sign Up - It's Free