International Journal of Business and Management
Vol. 5, No. 8; August 2010
Positioning a Bank Service in Nigeria: A Conceptual Framework OLALEKAN ASIKHIA Lecturer, Department of Business Studies College of Business and Social Sciences, Covenant University, Ota, Canaan land Km.10, Idiroko, P.M.B.1023, Ota, Ogun state, Nigeria Tel: 234-0803-3951-474 Abstract The study looks at positioning of bank service in a competitive environment like Nigeria. Positioning was examined from the various definitions in the literature and the major components and strategies of positioning were discussed. The bank service in Nigeria was seen to be best positioned through non-functional and functional benefits. The non-functional benefits involve the bank’s corporate identity and brand image, this were seen to be well suited for old banks with high public acceptance, and positioning through functional benefits, which involve developing new attributes for the product or altering the old attributes of the product was found to be well suited for both old and new banks, and a framework for this was also developed. Keywords: Positioning, Bank service, Banks, Conceptual framework, Nigeria 1. Introduction A bank service helps to distribute resources of a nation from a high concentrated area to a low concentrated area, to facilitate national growth and development. But numerous external forces shape the market of bank service (Zeithaml, Bitner, and Gremler, 2009)). The service is affected by economic, technological, demographic, socio-cultural, political and legal factors. The level of prosperity, changing levels of disposal income, inflation rates, stock market performance, the rate of unemployment, shortages of raw material – all these affect the packaging and delivery of a bank service. The combination of interest rates, consumers’ short term and long-term expectations concerning its direction as well as the general level of competition create marketing challenges for the bank service. Education and occupation have a definite relationship with social class and consumer banking behavior and government exerts some amount of influence on bank service in order to protect consumers, the economy and other related entities through different regulatory frameworks. All of these put together affect the bank service. Most of prudential regulation of banking was predominant in United States in the mid – 70s emanating as a result of the single-office banking system and traumatic experience of bank failures, particularly during the great depression of the 1980s. And when addressing the Lombard Association in April 1987 on the Central banking origins of the bank’s supervision, the deputy governor of the Bank of England said he never remembered hearing that word ‘supervision’ used in the bank before 1974. The traumatic experiences of the fringe banking crises and bank failures of 1973/74 in the United Kingdom and the similar crisis and failure in the highly regulated banking system of Europe and America further enhance bank regulation all over the world, thus banks regulation becomes a prominent factor to envisaged and build into banking operations in order to survive. Nigeria is not different, the bank failure of 1990 – 1994 and recapitalization policy of December, 2005 and the toxic loans saga of 2009 have affected the practice of banking. Adding to this is the fact that banks have gradually realized that due to the presence of globalization and changing technology there is dire need to overhaul their payment and service delivery systems and operations so as to prosper in the new millennium. Based on the foregoing, it becomes paramount to advance a conceptual framework that would serve as a guide to position the bank service in this turbulent environment of operations. 2. Literature Review Positioning: Definitional Approach Kotler (2003) defines positioning as the act of designing a firm’s offering and image to occupy a distinctive...
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