A Critical Study of the Effect of Relationship Marketing , a Case Study of the Nigerian Banking Sector

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A critical study of the effect of relationship marketing
A case study of the Nigerian banking sector

ABSTRACT.

Relationship building and management or what has been labelled “relationship marketing” is one of the leading new approaches to marketing and customer retention, which has eventually entered the marketing literature. The ultimate aim of a relationship marketing approach is for the customer to become a ‘partner’ of the organisation, by contributing to marketing decisions through a one-to-one relationship. Christopher, M (1991) consider relationship marketing an approach that aligns marketing, customer service and quality, with an emphasis on a focus on customer retention, an orientation on product benefit, a long time- scale, a high customer service orientation, a high customer commitment and a high customer contact as well as on the notion that quality is the concern of all. The purpose of this paper is to show how the elements of relationship marketing can have a positive effect in the Nigerian banking sector thus leading to customer retention and profit making in the long run. The interaction and network approach of industrial marketing & modern service marketing approach clearly views marketing as an interactive process in a social context where relationship building and management are a vital cornerstone, Motivated by the substantial changes in the Nigerian banking industry, a theoretical approach model was developed to determine the existence of the elements of relationship marketing. This research was carried out using a survey from customers’ in three different banks in Nigeria (UBA, SKYE and DIAMOND BANK) conducted by means of questionnaires. Information gathered showed that through, service quality perception, commitment, and trust with customers’ organisations can develop a marketing mix that is more likely to create customer satisfaction and lead to customer retention. However before conclusions can be drawn we need to do a further research as the above conclusion was drawn based on three banks out of twenty (20) banks presently in Nigeria. The purpose of this research is targeted at

* Analyzing the current situation in the Nigerian Banking sector in relationship marketing context. * Reviewing factors that drive the effectiveness of relationship marketing * Examine the effect service performance and technology management n relationship marketing * Assessing the effectiveness of Customer Relationship Management approach to relationship marketing

Nevertheless it is strongly recommended that banks in today’s business environment adopt the relationship marketing approach in order to have a competitive edge and build a meaningful and lasting relationship with their customers that will lead to customer retention.

INTRODUCTION
Nigerian Banks are suddenly investing heavily in relationship marketing as a strategy for winning and keeping their customers. In spite of the availability of new technology driven channels, the customer expects a humane relationship with his/her banker in addition to low pricing, flexible terms etc. There still seems to be no substitute for a face-face meeting, either on advice on loan, a house purchase or Insurance services. First generation banks in Nigeria, that is; First Bank, Union Bank and United Bank for Africa (UBA) seem not to be pushing technology-driven strategies as much as the second generation banks like GT bank, Diamond bank, Zenith bank, etc. because a large part of their profits and growth are from older customers whom they provide with personal services as a result of the long term relationship that they have built with them. Bank management thus need to continuously access the customer’s decision-making process as well as the formation of attitudes, preferences and satisfaction in order to be relevant in the industry. Relationship marketing has gained the interests of academics and practitioners (Gummesson 1996), as a strategy to...
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