Relationship Marketing as a Tool for Achieving Organizational Objectives

Description
A goal is a desired result a person or a system envisions, plans and commits to achieve a personal or organizational desired end-point in some sort of assumed development. Many people endeavor to reach goals within a finite time by setting deadlines.

Relationship Marketing as a Tool for Achieving Organizational Objectives
INTRODUCTION 1.0 Background Information of the Study

The ongoing process of economic reforms has completely changed the operational environment for the whole banking industry in the country. Banks are now required to cope with stiff competition in business and also the complex regulatory norms regarding capital adequacy and provisioning. Banks are forced to adopt various marketing techniques and approaches. Thus, marketing has become imperative for all banks including those in the public sector. Marketing in banks can be stated as a new phenomenon that is shaping well over the past one decade. Public sector bank hardly considered marketing as a tool for business. The competition, deregulation that followed the reforms has changed the

environment for banks, where marketing has occupied the place in the business of banks. Today‘s, marketing in the banking industry is
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characterized by many innovations in products and services, use of advanced technology in product design, up gradation of delivery system, advertising and sales promotion activities, whether in public sector or private sector. Banks now have a firm believe that effective relationship marketing strategies alone can brighten the future of banking business. Marketing in banks has become synonymous with customer and banks are found engaged in several activities of discovering, creating and satisfaction customer needs. Nigerian banking is at cross roads today, with the deregulation process in full swing, the consequent policy changes introduced in the financial system in general and banking in particular are effecting unprecedented changes in its functioning. With the emerging changes did spring up new challenges of commercial viability, cost effectiveness, effective marketing strategy, etc. Market oriented policies also gave birth to new players like foreign and private sector banks and subsidiaries offering varied high tech and cost effective Service. There was an absolute shift from sellers into buyers‘ market, establishing the ?consumer‘ as the key factor in the market. The dictum ?as the bank
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exists because of its customers, has become more pronounced and relevant in the present context?. Thus, relationship marketing constitutes the key strategy for banks to retain good customers and also anticipate their future demands.

Any organization whether business oriented or not will always strive to grow. Organizational growth thus refers to the ?positive changes experienced overtime by organizations in its operations in terms of size, material resources as well as human and outputs/offerings of such organizations. The offerings of an organization and it marketability are two vital factors in achieving an organizations objectives, such objective is a factor of relationship between the producing

organizations/manufacturers and end users/consumers.

Competition in the market place has for a long time infringed on the operations of the market. The absence of the application of consumer oriented service in the Nigerian market can be said to have emanated from a lack of competition especially as it relates to the banking industry since most banks make their customers feel that
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they are doing the customer a great favour with the services they are receiving. Loans are granted to customers grudgingly, to cash a cheque one will need to wait for a long period without any consideration for customer‘s time. Despite this most organizations strive for growth by achieving their set objectives. Indeed while some have achieved their objectives and sustained it, others have found it very difficult to achieve theirs. What then are the possible factors responsible for this inability to achieve set objectives? The answer to this question obviously is the level of relationship and when we say relationship, we mean relationship marketing which is defined as ?the delivery of value to customers? it encompasses all related marketing strategy which is aimed at re-orienting the production/service process such that product and services are delivered with a consistent quality, in a timely fashion which at least meet customer requirements. It is obvious that organizations need these customers before they can achieve their objectives, and just as customers generally desires to be happy, they want to be sure that they are receiving value and that the organization with whom they are dealing values them.
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For objectives to be achieved in an organization, relationship marketing becomes the most relevant marketing approach. It calls for an adequate knowledge and experience of the customer, its business environment and needs. Considering the importance of relationship marketing and the need for organization to achieve its objectives, this research study will be looking at the various ways in which the banking industry has made use of this vital tool and how UBA PLC has applied it in its operations overtime.

1.1

Statement of the Research Problem

As mentioned earlier most organizations desires to achieve their set objectives; but while some have actually achieved their objectives some are on a serious decline, yet they operate within the same environment and have almost equal amount of resources. What then is the problem with those experiencing decline?

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Inability to achieve set objectives has been attributed to the wrong application of marketing programmes or strategies. Ultimately this has affected the profitability and growth of most firms. The issue of being able to satisfy customer needs and requirement no longer exist instead organizations struggle to survive through rigorous efforts, while shareholders are complaining about the rate of returns on their investments which is declining year in year out. This research study will evaluate the role of relationship marketing

[

in achieving organizational objectives. i.e. how its application has made some organizations to achieve their set objectives with particular attention on the operations of UBA Plc.

1.2

Significance of the Study

Considering the desires of organization for the achievement of their objectives, the adoption of the right strategy is always seen as a right step in the right direction. But what constitutes the right strategy remains a puzzle for most organization. The identification and adoption of relationship marketing as a technique for achieving organizational objectives can be said to be one of such right steps,
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thus a research study of this nature is significant in the sense that it enables organizations not only to build but also maintain a direct relationship with their customers which in the end will help to facilitate the process of achieving organizations objectives.

This study is also justified because it will aid decision making on issues that borders on achieving organizational objectives as well as serve as contribution to knowledge and a reference point for future research endeavour.

1.3

Objectives of the Study

The major objective of this research study is to evaluate the role of relationship marketing as a technique for achieving organizational objective and see how it application ultimately affect the operations of UBA Plc.

The study has the following other objectives: i. to examine the concept of relationship marketing in the banking industry;

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ii. to examine how the concept has been contributing to the growth of the business organization; iii. to determine the requirements for effective marketing of banking services; iv. to examine the various levels of relationship marketing; and v. to highlight the factors essential for relationship building in the organization.

1.4

Scope of the Study

The study focuses on the role of relationship marketing as a technique in achieving organizational objectives at UBA Plc for a period of ten years from 2000 - 2010. The study examines the various concepts of relationship marketing, customer services and 3 branches in the Ilorin office was used as a focal point. This study is to cover a period of six months where all investigations are expected to have been analyzed and result known.

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CHAPTER TWO LITERATURE REVIEW

2.0

Introduction

Since the term ?relationship marketing‘ was known, more than twenty years ago, it has increasingly attracted the attention of researchers and practitioners. Notwithstanding the existence of a large and growing body of literature on the subject, there continues to be ambiguity about the nature of marketing relationships and the benefits that accrue to organizations and their partners. In part this vagueness may reflect the variety of experience across different contexts and the difficulty of measuring some types of benefits. Where benefits have been evaluated, researchers have typically focused on either the organization, or the customer but rarely both. However, relationship marketing emphasizes that relationships are partnerships. The emphasis is on social bonding, co-operation, and

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joint problem solving, sharing resources and activities, and basing relationship on common goals.

Moreover, relationship marketing emphasizes that long-term relationships are mutually beneficial. If we have genuine

partnerships, as relationship marketing suggests, we might expect to see both sides of the dyad sharing similar views about the nature of a relationship. Being able to understand relationships from the perspectives of both parties is potentially of great value, not least because it provides a degree of triangulation in empirical findings. Using UBA Plc as a case study attention is given to the role of bonds in structuring relationships and their roles in achieving

organizational objectives.

2.1

Nature and Essence of Marketing

Many definition of marketing exist with differing emphasis on the process of marketing, the functional activities that constitute marketing and the orientation (or philosophy) of marketing. For example, the chartered institute of marketing defined marketing as

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follows: ?Marketing is the management process for identifying, anticipating and satisfying customer requirements profitably?1. The American Marketing Association (2008) said that ?Marketing is

no longer a function – it is an educational process.? In their definition of marketing, marketing was presented as a broader activity ?Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and

exchanging offerings that have value for customers, clients, partners, and society at large.?2
McDonald (2003) defined marketing as ?a management process whereby the resources of the whole organization are utilized to satisfy the needs of selected customer groups in order to achieve the objectives of both parties?3. Marketing then is first and foremost an attitude of mind rather than a series of functional activities. Heidi Cohen (2008) put forward a definition of marketing as ?the process of getting a product or service from a company to its end customers from product development through to the final sale and post purchase support?4. She further explained that in line with a
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firm‘s

business

goals,

marketing

attracts

consumers‘

scarce

resources, attention and disposable income, to drive profitable revenues, and that marketing strategy consists of business goals, target customers, marketing strategies, marketing tactics and related metrics. As a function, marketing extends across the customer‘s entire purchase process including research, engagement, purchase, post-purchase (including supplemental support and returns) Marketing as customer focused. ?Marketing is about knowing the market, creating the right product, creating desire for that product and letting the right people know you have it?5 The old adage that says, ?If you build a better mousetrap people will beat a path to your door? doesn‘t hold true without marketing. You might indeed have a better mousetrap, but if people don‘t know you have it, and they don‘t know where your door is, there will be no path beating and no conversation going on. Barbell (2004) in his contribution on the essence of marketing stated that business now attempt to make profit ?by identifying, anticipating and satisfying consumer needs and desires?6. The importance which the customers are to business has been further
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emphasized in the marketing philosophy, which is a business philosophy that states: the customer want satisfaction is the main justification for a company‘s existence?7. Consequently, all

companies activities in production, finance as well as in marketing must be devoted to determining what the customer wants to buy (or can be persuaded to buy) and to satisfy those wants while still making a reasonable profit. This therefore replaces the former practice of industries providing what they think the customer might want to buy and producing the quantity they also thought the market could absorb. Gwinner, and Gremler (2000) asserts that Marketing builds relationships between consumers and brands. The many disciplines that go into the process, together create a brand personality designed to be compatible with the target. Marketing romances the consumer in the hopes of establishing a long term commitment. This takes persuasion and nothing moulds opinion like the third party endorsement power of PR. The importance of marketing to virtually every business endeavour was further highlighted by Ahmed, Rafiq, and Norizan M. Saad
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(2003) where they stated that ?marketing is here to stay and that it‘s not just wishful thinking. While the need for many of its traditional activities have changed or simply disappeared, marketing‘s broadened contribution to today‘s business organization will ensure its survival as a management discipline?8.

2.2

Marketing of Banking Services

If you‘re ready to make a difference in your sales numbers, you must train your sales team to understand that everything they do and say to facilitate a sale must focus on helping customers make their lives easier, better, and more convenient, and delivering knockyour-socks-off customer service at the same time. Most banks and credit unions offer a myriad of free services that are designed to make doing business easier, cheaper, and more convenient for the customer, but the customer never buys the product, they buy what the product delivers in terms of benefits, and they respond to the way in which they are treated by the employees – the level of customer service they experience.

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Customer emotions play as important a role in the sales process as the benefits of the products and services being offered. If people feel as if they are being cared for at your institution better than they are at the competition, and if they are educated on the benefits of products and services based on their particular needs, realizing how their lives can be made easier, sales will occur naturally and consistently, no pushing required. A Marketing person without adequate marketing skills will destroy sales instead of increasing it. Marketing of financial products need not only selling skills, but adequate knowledge about banking world also. A good salesperson require right soft skills like positive attitude, good communication etc.?Nothing happens in a company unless a product or services is sold, everything else is cost.?

Wilson and Gilligan (2001) have identified three categories of services namely: a. Intangible benefits offered for sale independently of other goods or services (e.g. insurance and banking).

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b. Intangible activities which requires the use of tangible goods (e.g. transport services), and c. Intangible activities purchased jointly with other tangible activities (e.g. credit, training etc.).

Banking services falls under the first category of services, that is, intangible benefits offered for sale independently of other goods or services. The American Marketing Association (AMA) have provided a definition to the issue of marketing of banking services, when it referred to same as ?identifying and stimulating demand for the banks services, meeting that demand by making available the banking services in the most effective manner to present and potential customer; and achieving the profit and other objectives related to the identification, stimulation and satisfaction of demand for the bank service?. Ahmed, Parvaiz, and Rafiq (2002) also emphasizes the importance of marketing in their article ?what is a Bank? When he said, ?a bank is not just one business. Whilst accepting that all banks have their

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differences, they must perform three key roles – selling/marketing, deposit taking, credit assessing and processing. These three roles must not be confused. They will sometimes conflict. Each role requires dedicated staff. If the total quality management process can be achieved in all these three areas simultaneously, then the bank will not only succeed it will achieve its objectives with a difference?.

2.3

Requirements For Effective Marketing of Banking Services

Given the above justification for banking services, it is very important that the enabling environmental conditions for an effective marketing of banking services be discussed. Olalusi (1998) stated that the prerequisite for effective marketing of banking services includes: a. The top management hierarchies of the banks most lend credence in principle and practice to the marketing concept as being the guiding philosophy of the bank. By adopting this philosophy, training programmes should be geared towards this, so as to provide the
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climate, leadership and discipline required for a successful marketing programme. b. The concept of marketing in banking should not be the sole responsibility of a department. A customer‘s concern should be seen as the concern of all the departments. For example the rudeness of a bank teller may affect the corporate image of the bank, hence the bank tellers should be conscious of the fact that the customer is right‘ except when civil or criminal offence is committed by the customer.

The overall bank policy must be defined in terms of the customer‘s wants rather than the banks profit. There cannot be profit in the absence of customer patronage. Definition of the bank marketing policy in terms of customer and market enables the bank to quickly monitor the changing needs of its market. For the bank to understand the changing needs in the market, it must know: 1. 2. 3. The nature of the people in the environment The commonest jobs performed in the area The commonest jobs performed in the area
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4. 5.

The savings pattern The number of banks and non-banks

Innovativeness is required in planning and developing a service, therefore, a bank located in an area whose predominant occupation is farming can segment its market by: a. Designing the products and services to meet the farmers needs, and b. The bank may even motivate them by granting interest free agricultural loans. This apart from enhancing banking culture will build the image of the bank within that locality and other adjoining environ.

2.4

Customers’ Satisfaction As A Focus

Toby (2005) in his article customer service and the future of banking states that ?customers almost universally view banks at best with quiet suspicions, at worst with local hostility! They are a necessary evil, but not a valued service industry:. This is an attestation that customer at one time or the other and even presently are dissatisfied
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with the banking industry. This therefore gave rise to the need to answer to the question on which is the unique selling proposition (USP) to adopt? Toby summarized it all when he said? no matter the myriad of forces that will shape banking in the near future, deregulation, strict regulation , technology, cost pressure, customers expectations and economic environment, one issue looks set to dominate bank thinking and that is the issue of customer service. This is supported by the word of Levitt that ?the purpose of a business is to create and keep a customer?. The bank should therefore see service as the key to doing this successfully. Customer service as a philosophy is not new to the financial institutions; it is only the focus that has undergone series of changes. Thus banks are expected to inculcate this into their corporate objective and they must also strive to ensure that customers are satisfied at all times in all spheres of banking products and services offerings. Driving and sustaining growth means getting bigger by getting better at identifying and articulating customer opportunities and turning these into commercial success stories that others cannot
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easily copy. These means going just beyond putting more innovative products and services on the market quicker, faster, cheaper to develop deep and lifelong relationships with customers in chosen markets by giving them exactly what they want, when, where and how they want it. In the light of the above, banks are therefore advised to get to know their customers better if they are to compete successfully. Vandermerwe (1997) has explained the power of customer focus by saying ?be they new or old, large or small, modern business can only succeed by being enterprising. Yet being enterprising without focusing efforts, energy and resources on customers does not lead to a sustainable growth?14.

2.5

Role of Relationship Managing in Achieving Organizational Objectives

Corporate goals and objectives are result of a demonstrated competence in the bank‘s marketing of its relationship to its target market. This therefore is one of the reasons why banks effort to institutionalize relationship marketing is considered important since
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it enables the bank to achieve the necessary competence in interacting with its target market. Banks that achieve their objectives are those that are market driven, adapting their products (services) to fit the customer‘s needs and strategies. A bank‘s ability to respond in a timely way to challenging needs of the customers is possible only if because of the bank‘s adaptability, flexibility and responsiveness, the organization is able to connect with the customer.); Banks can achieve their business objective and grow in three ways?15. a. Attracting more new customers b. Doing more business with existing customers c. Reducing loss of customers

While marketing to attract more new customers is desirable, it must be realized that it is just an intermediate step in the marketing process. Once a prospect has turned a customer, what the bank does to nurture the relationship with the customer, to build it, to strengthen it is crucial to the bank‘s marketing effectiveness and

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efficiency. To work hard to attract new customers and then to be complacent in strengthening the relationship makes little or no sense, therefore, for most banks the most significant marketing opportunity occurs after prospects become customers. On the other hand, banks that direct their marketing resources at the existing customers address two possibilities for achieving their set objective. a. They increase the opportunity to expand customer relationships, and b. Decrease the chances that the customers move over to competitors. Marketing in banks is unique in the sense that what the banks actually looks for is the possibility of attracting a potential customer‘s willingness to do business with it, that is have a relationship with the customer. It is in fact the winning and actualizing a relationship with a customer that is the essence of relationship marketing. The art of relationship marketing revolves around the delivery of value to customers. Value is that which reflects the total benefit customers receive for the total cost they incur. It is because the perception of value drives relationship that
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quality service is important. Central to the service benefits that customer perceive is the convenience, reliability, responsiveness assurance and congeniality of the service. Delivering value to customers defines the potential for relationship marketing, and delivering high value quality service directly influences the potential for value.

2.6

Levels of Relationship Marketing

The number of bonds that a bank uses to foster customer loyalty determines the level at which one can practice relationship marketing. Studies have suggested that the higher the level at which relationship marketing is practiced the greater the opportunity to create loyal customers. There are three levels of relationship marketing and these are represented by three types of bonds, which are; a. b. c. Financial bond, Social bond, and Structural bond
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Banks that provide all three types of bonds and generally deliver a high quality service are most likely to deliver the level of value that creates true customers.

Level 1 Relationship Marketing: Financial Relationship under this bond between customer and the bank is purely financial. Bank marketers primarily use pricing incentives to encourage customers to bring more of their businesses to the bank. Banks may offer higher interest for larger or longer tenured deposits. Furthermore at this level of relationship marketing, the degree of service customization is low. Unfortunately results from this level of marketing do not endure and true customer loyalty does not occur. Price is the most easily imitated element of the marketing mix and in and of itself does not offer a sustainable competitive advantage. At this level of relationship marketing therefore the potential for sustained competitive differential is low. Banks that seeks to build the strongest possible customer relationships needs to establish needs to establish bonds that are important to customers but difficult for competitors to imitate

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Level 2 Relationship Marketing: Social This relationship goes beyond pricing incentive in building relationships. This level does not ignore the importance of price competition, but on top of financial bonds, seeks to build social bonds as well. Emphasis at this level is therefore on personalized service delivery and transformation of the bank from ?what can I sell to the customer?? to ?how can I help the customer achieve his larger goals?? level two marketers therefore stress staying in touch with the customers learning about their wants and needs, customerisation of relationship based on what is learned and continually reselling the benefits of relationship. While social bonding usually will not overcome a significant price or service weakness, however, it can encourage customers to remain in a relationship in the absence of strong reasons to shift and thereby give the bank opportunity to respond to service weaknesses or competitor threats before the customer defect.

Level 3 Relationship Marketing – Structural

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Here marketing solidifies relationships with structural bonds in addition to social and financial bonds. Structural bonds are created by providing services that are valuable to customers and not readily available from other sources. These services are often

technologically based and intended to help customers be more efficient or productive. The services are designed into the delivery system rather than being dependent upon the relationship of building behaviours of individual personnel. The key to level three relationship marketing is to provide value – adding services that are difficult or expensive for customers to provide for themselves and that are not readily available elsewhere. It therefore calls for cleverness, creativity and commitment to the philosophy of relationship marketing. At this level of relationship marketing, the degree of service customization is high service delivery which is the primary marketing strategy and the potential for sustained competitive differentiation is high.

2.7

Factors Essential for Relationship Building

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The perceived service quality and types of bonds a bank offers its customers are key drivers of perceived value. Perceived value in turn, determines the level and strength of bank – customer relationships. There are a number of manifestations of quality service that are particularly relevant to relationship building. These are: 1. Mutual Trust and Fair Play: customer bank relationship

requires respect and trust, and the basis for trust is fair play. It is most unlikely that customers will like to build relationship with a bank that they perceive to be unfair and therefore cannot be trusted. Fairness involves creating a condition of interaction in which both the customer and the bank can realize their objectives, listening to the customer and being sensitive to their concerns, disclosing accurate information relevant to the transaction, selling the right products and keeping promises. In order to build true relationships, a bank must be prepared to subject every customer policy and action to the fairness test. The bank may gain short – term benefits from unfair practices, but it cannot establish an enduring loyal customer relationships.
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2.

One–on–One Marketing: customers must be perceived as

individuals and not account numbers. Communication and customization are particularly important in relationship building. The following are the prerequisites of one – on – one marketing: a. Accessibility to service and service provider:. Customers must have access to service. The service provider must be readily accessible to customers in order to provide information or service or solve problems as the need arises. b. Two – way communication: communication must be two ways, bank – initiated and customer – initiated. Customers are less likely to perceive they have a relationship if they always have to initiate the contact. c. Customization of products and services: cost effective customization is achieved through product variety to provide choice and service. Customization is the capacity to deal with a customer in a unique way, and it recognizes the uniqueness of each and every customer. Relying on knowledge and experience of customers, a bank must establish organizational
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and informational means to efficiently tailor service to customers‘ specific requirements. 3. Service Augmentation: this involves incorporating ?extras? in

to the service offerings to differentiate it from competitive offerings. The essence of service augmentations is to identify extras that are valued by customers and not easily copied by competitors. Services augmentation efforts that fit a bank‘s culture and reflect social and structural bonding, hold the greatest potential for bonding. 4. Relationship quality can be regarded as a metaconstruct

composed of several key components reflecting the overall nature of relationships between companies and consumers. Although there is not a common consensus regarding the conceptualization of relationship quality, there has been considerable speculation as to the central constructs comprising this overarching relational construct (Hennig - Thurau 2000). Components or dimensions of relationship quality proposed in past research include cooperative norms (Baker, Simpson, and Siguaw 2002), opportunism (Dorsch, Swanson, and Kelley 1998), customer orientation (Dorsch,
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Swanson, and Kelley 2000; Palmer and Bejou 2001), seller expertise, and conflict, willingness to invest, and expectation to continue. However, there is general agreement that customer satisfaction with the service provider‘s performance, trust in the service provider, and commitment to the relationship with the service firm are key components of relationship quality (Baker, Simpson, and Siguaw 2002). In relationship quality research, the three core variables of satisfaction, trust, and commitment are treated as interrelated rather than independent. 5. The Relational Benefits approach assumes that both parties

in a relationship must benefit for it to continue in the long run. For the customer, these benefits can be focused on either the core service or on the relationship itself (Hennig-Thurau, Gwinner, and Gremler 2000). The latter types of benefits are referred to as relational benefits (i.e., benefits customers likely receive as a result of having cultivated a long-term relationship with a service provider).

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Relational benefits include confidence benefits, which refer to perceptions of reduced anxiety and comfort in knowing what to expect in the service encounter; social benefits, which pertain to the emotional part of the relationship and are characterized by personal recognition of customers by employees, the customer‘s own familiarity with employees, and the creation of friendships between customers and employees; and special treatment benefits, which take the form of relational consumers receiving price breaks, faster service, or individualized additional services. These relational benefits are benefits that exist above and beyond the core service provided. Gwinner, Gremler, and Bitner (2009), 6. Awareness among Customers: Modern technology has made aware of the developments in the economic

customers

environment, which includes the financial system. Financial needs of the customers have grown multifold into various forms like quick cash accessibility, money transfer, asset security, increased return on surplus funds, financial advice, deferred payments etc. With a wide network of branches, even in a dissimilar banking scenario, customers expect the banks to offer a more and better service to
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match their demands and this has compelled banks to take up marketing in right earnest. 7 Quality as a Key Factor: With the opening up of the economy, fast

change has been experienced in every activity, and banking has been no exemption. Quality is the watch word in the competitive world, which is market driven and banks have had to face up to this emerging scenario. In fact, it may not be out of place to reiterate that quality will in future be the sole determinant of successful banking ventures and marketing has to focus on this most crucial need of the hour.

2.8

Internal Marketing

Empirical research on internal marketing has focused on outcomes at the employee level. These include job satisfaction (e.g., Ahmed, Rafiq, and Saad 2003; Hwang and Chi 2005), work motivation (e.g., Bell, Menguc, and Stefani 2004), and organizational commitment (e.g. Mukherjee and Malhotra 2006). Few studies have explicitly examined customer-related outcome of internal marketing, such as service quality (e.g., Bell and Menguc 2002; Bell, Menguc, and
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Stefani 2004). Previous research on internal marketing, both conceptual and empirical, concurs on three important themes. First, it is crucial that employees are ?well-attuned to the mission, goals, strategies, and systems of the company?. Second, internal marketing builds on the formation of a corporate identity or collective mind (Ahmed and Rafiq 2002). Third, internal marketing must go beyond short-term marketing training programs and evolve into a management philosophy that requires multilevel management to continuously encourage and enhance employees‘ understanding of their roles and organizations (Berry, Hensel, and Burke 2003).

2.9

Relationship Marketing Outcomes

All relationship marketing activities are ultimately evaluated on the basis of the company‘s overall profitability. However, as a firm‘s profitability is influenced by a number of variables largely independent of relationship marketing activities, it seems

appropriate to conceptualize relationship marketing outcomes on a more concrete level when investigating possible antecedents. Two constructs are referred to in the marketing literature as key

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relationship marketing outcomes: customer loyalty and (positive) customer word-of-mouth communication. Customer loyalty, as we conceptualize it, focuses on a customer‘s repeat purchase behavior that is triggered by a marketer‘s activities. Evolving out of, and contradictory to, early definitions that were solely behavioral, customer loyalty today is usually viewed as comprising both behavioral and attitudinal components (Day 1969; Jacoby and Kyner 1973).

Loyalty is a primary goal of relationship marketing and sometimes even equated with the relationship marketing concept itself. The connection between loyalty and profitability has been the focus of both theoretical and empirical studies (Oliver 2000; Payne and Rickard 2001). With regard to cost reduction effects, it is widely reported that retaining loyal customers is less cost intensive than gaining new ones and that expenses for customer care decrease during later phases of the relationship life cycle due to the growing expertise of experienced customers. Customer loyalty is also reported to contribute to increased revenues along the relationship
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life cycle because of cross-selling activities and increased customer penetration rates. Positive word-of-mouth communication, defined as all informal communications between a customer and others.

2.10 Relationship Marketing and UBA Plc
Today‘s United Bank for Africa is the product of the merger of the Nigeria‘s 3rd and 5th largest banks, namely the old UBA and the erstwhile Standard Trust Bank Plc (STB) respectively, and a subsequent acquisition of the erstwhile Continental Trust Bank limited (CTB). The union emerged as the first successful corporate combination in the history of Nigeria. UBA‘s history dates back to 1948 when the British and French bank limited (?BFB?) commenced business in Nigeria and the erstwhile STB and CTB in 1990. Today, UBA Plc, having adopted the holding company model is one of Africa‘s leading financial institutions offering universal banking to more than 7.2 million customers across 750 branches in 18 African countries UBA has undergone a lot of transformation over the years in terms of
structure and product / service marketing. As one of the pioneer banking
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institutions in Nigeria, the phenomenal growth that UBA has experienced within the banking industry can be attributed to its marketing activity which centers principally on relationship building and sustenance.

With a structure which comprise various units, which are all integrated to ensure a smooth operating/marketing process geared towards offering the best banking service in the industry. The bank presence in all the thirty six states with a network of over three hundred branches and its recent adoption of the on-line banking is an attestation to its vision of providing an hour personalized service to it numerous clienteles. The strength of the bank has been based on the superior experience, focus and dedication of the board of Directors and the management. The bank singular commitment to ensure a strong and viable bank is no doubt an invaluable asset in the bank‘s pursuit of its objectives. Aside mobilizing deposits from customers, UBA Plc offers a comprehensive range of banking services which includes: capital market operations, financial advisory services, investment

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management, services.

international

operations,

lending

and

treasury

2.11 Summary
This chapter has reviewed some related literatures on relationship marketing as a Tool for achieving organizational objectives. It examines marketing from different perspectives. While the

American Association of marketing defines it as a process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individual and organizational objectives, authorities like Drucker believed that marketing is so basic that it cannot be considered a separate function on a par with others such as manufacturing or personnel. He said marketing is first a central dimension of the entire business. It is the whole business seen from point of view of it final result. Marketing of banking products/services is service incline that requires identifying and stimulation of demand and satisfying such demands at a profit. Effective marketing of banking services
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requires the commitment of the entire department and it starts from top management. Marketing in the banking industry is unique in the sense that what the banks are actually looking for is the possibility of attracting a potential customer‘s willingness to do business with it and actualizing a relationship.

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CHAPTER THREE

RESEARCH METHODOLOGY
3.0 Introduction

This section focuses on the research design, research questions, hypothesis testing, methods of data analysis, population and sample size determination, instrument for data collection, and methods of data analysis 3.1 Research Design

The research design is intended to specify the methods and procedure of the study and also state the nature of the study. There are three broad classes of design. These are: 1. 2. 3. Exploratory or historical research design Descriptive research design Experimental research

In the presentation of this research study, both the exploratory and descriptive research designs were used. The justification for this, is that both method deals with determination, evaluation and
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explanation of past events essentially for the purpose of gaining a better and clearer understanding of the present and making a more reliable prediction of the future.

3.2

Research Questions This research questions attempt to answer the following questions. i. Of what importance is relationship marketing to the achievement of organizational objectives? ii. Can relationship marketing be said to be the most ideal tool for achievement of organizational

objectives? iii. What are the roles of relationship marketing in achievement of organizational objectives? iv. What are the basic requirements for marketing banking services? v. What are the various levels of relationship marketing? vi. What are the essential factors for relationship building?

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3.3

Statement of Hypotheses Two hypotheses have been formulated and will be tested in the course of this study.

HYPOTHESIS 1 H0 : Relationship marketing is not a significant tool in achieving organizational objectives. H1: Relationship marketing is a significant tool in achieving organizational objectives.

HYPOTHESIS 2 H0 : Customer loyalty cannot be achieved through relationship marketing.

H1: Customer loyalty can be achieved through relationship marketing.

3.4

Methods of Data Collection

The data used in this research were mainly from two sources: 1. The primary source which involves the carrying out of survey study through the administration of questionnaire to a group of selected respondents, and

42

2. The secondary source includes extracts from text books, literatures, journals and publications. This source constitutes a large portion of the literature review and all relevant extractions have been duly acknowledged.

3.5

Population and Sample Size Determination

Population can be defined as any group of people or objects, which are similar in one or more ways and which form the subject of studying in a particular survey. In this study, the population constitutes the number of customers, which include customers from Challenge branch = 20, Unity Branch = 25 and Taiwo branch = 35, which totals = 80. The population of staff and customers of the bank is very large, hence the population size will be less but large enough to elicit precise decisions. Since for obvious reasons a study cannot accommodate all the population a sampling technique was adopted. A study of this nature requires adequate sample size that is representative of the diverse nature of the population under consideration. Apart from the criterion of adequate representation, there is also the need to avoid taking a large sample size, so that repetition of respondent‘s answers will be
43

guided against. A total of 100 questionnaires will be administered to both staff and customers of UBA Plc in major part of the metropolis. Using the simple random sampling technique 80 questionnaires will be given to customers and 20 questionnaires to staff.

3.6

Instruments for Data Collection

The research instrument used in collecting data for this research work includes; Questionnaire, personal interview and observations and extracts from documents texts and records.

Questionnaire
One of the most important techniques for collecting data which was employed by the researcher was the questionnaire method. This is the formal method of collecting information for testing and analyzing hypothesis stated in the research work. Questionnaire is a device for getting responses which are direct views of respondents and it is suitable for the research study because it enables the researcher to group responses of the respondents according to

44

various category needed. The close and open-ended questionnaires were used so that responses can be easily evaluated. Personal Interview Cum Observation This is a technique used for collecting information from the respondents in a face-to-face contact. Direct and prepared questions were asked and the respondents were allowed to talk freely and this even ensures the flexibility and objectivity of the research study, while observation enables the researcher to see things for himself by studying the behavior of people and its most important advantage is that it is possible to record behavior as it happens. Documents and Records This includes extractions made from available documents and records that were related to the topic under consideration. These records and documents include text books, journals, and magazines and so on. Bulk of which constitute the literature review in chapter two.

45

3.7

Method of Data Analysis

Relationship marketing can be rated according to the importance and organizational performance. The responses to these questions raised in the study are to be analyzed using the SPSS soft ware (Statistical Package for Social Science) linear regression and Pearson correlation coefficient analysis. The objective of the analysis is to establish the extent of variation between the observed frequency (level of Relationship to organizational objective) and the expected frequency (statistical expectation regarding respondent‘s perception of the concept of Relationship marketing). It will therefore aim at testing the independence of perception held by the respondents.

46

CHAPTER FOUR DATA PRESENTATION AND ANALYSIS

4.0

PRESENTATION OF DATA

The data presented was based on the information collated from the questionnaire administered in the course of this study. A total of 100 questionnaires were administered and were duly returned, representing 100% of the questionnaire administered.
Table 4.1 AGE OF RESPONDENTS N0. OF RESPONSES PERCENTAGE % 18-27 YEARS 15 15% 28-37 YEARS 16 16% 38-47 YEARS 26 26% 48-57 YEARS 25 25% 58 AND ABOVE 18 18% TOTAL 100 100%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.2

SEX RESPONDENTS MALE 71 71%
SOURCE: AUTHORS FIELD WORK 2012

N0. OF RESPONSES PERCENTAGE %

FEMALE 29 29%

TOTAL 100 100%

47

Table 4.3 MARITAL STATUS OF RESPONDENTS N0. OF RESPONSES PERCENTAGE % SINGLE 68 68% MARRIED 27 27% DIVORCE 5 5% TOTAL 100 100%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.4 HOW LONG HAVE YOU BEEN ASSOCIATED WITH UBA PLC ? N0. OF RESPONSES PERCENTAGE % 0-4 YEARS 13 13% 5-9 YEARS 19 19% 10-14 YEARS 17 17% 15-19 YEARS 21 21% 20 AND ABOVE 30 30% TOTAL 100 100%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.5 YOUR RELATIONSHIP WITH UBA PLC CAN BE SAID TO BE SATISFACTORY? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 12 12%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

68 68%

5 5%

11 11%

4 4%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.6 UBA PLC IS POISE AT RESOLVING YOUR BANKING PROBLEMS / ISSUES AT ALL TIMES? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 27 27%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

43 43%

8 8%

21 21%

11 11%

SOURCE: AUTHORS FIELD WORK 2012

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Table 4.7 UBA PLC RENDERS PROFESSIONAL/BANKING/BUSINESS ADVICE TO ITS CUSTMERS? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 15 15%

AGREE

INDIFFER ENCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

43 43%

12 12%

20 20%

10 10%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.8 THE SERVICES RENDERED BY UBA PLC ARE QUALITATIVE AND UP – TO DATE? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 7 7%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100 %

52 52 %

8 8%

24 24%

9 9%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.9 WHAT ARE THE CHALLENGES YOU FACE AS CUSTOMERS OF UBA PLC? N0. OF RESPONSES
PERCENTAGE %
LOW TURNARO UND TIME

POOR RECEP TION

INSUFFICI ENT PRODUCTS

POOR NETWORK

POOR CUSTOMER RELATION

TOTAL 100 100 %

40 40%

11 11%

12 12%

15 15%

20 20%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.10 ORGANIZATIONS THAT PRACTICES RELATIONSHIP MARKETING CAN EASILY ACHIEVE THEIR SET OBJECTIVES? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 52 52%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

23 23%

11 11%

10 10%

4 4%

SOURCE: AUTHORS FIELD WORK 2012

49

Table 4.11 RELATIONSHIP MARKETING HAS NO IMPACT IN ACHIEVING ORGANIZATIONAL OBJECTIVES? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 2 2%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

10 10%

3 3%

47 47%

28 28%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.12 RELATIONSHIP MARKETING BETWEEN UBA PLC AND ITS CUSTOMERS? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

CREATES
DISAGREE

A

BONDING TOTAL 100 100%

AGREE 8 8%

AGREE

INDIFFERE NCE

STRONGLY DISAGREE

57 57%

15 15%

13 13%

7 7%

SOURCE: AUTHORS FIELD WORK 2012

Table 4.13 RELATIONSHIP MARKETING HAS EFFECT ON CUSTOMER LOYALTY? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 48 48%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

29 29%

3 3%

15 15%

5 5%

SOURCE: AUTHORS FIELD WORK 2012

ON

Table 4.14 RELATIONSHIP MARKETING DOES NOT HAVE ANY EFFECT CUSTOMER LOYALTY? N0. OF RESPONSES
PERCENTAGE %
STRONGLY

AGREE 4 4%

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

TOTAL 100 100%

27 27%

4 4%

47 47%

18 18%

SOURCE: AUTHORS FIELD WORK 2012

50

Table 4.15 IN THE FIERCENESS OF PRESENT COMPETITION IN THE BANKING SECTOR, THE RELATIONSHIP MARKETING STRATEGY EMPLOYED BY UBA IS ADEQUATE? N0. OF RESPONSES
PERCENTAGE %
YES NO

30 30%
SOURCE: AUTHORS FIELD WORK 2012

70 70%

TOTAL 100 100%

Table 4.16 UBA PLC NEEDS TO INTRODUCE A BETTER MARKETING STRATEGY? N0. OF RESPONSES
PERCENTAGE %
YES NO

72 72%
SOURCE: AUTHORS FIELD WORK 2012

28 28%

TOTAL 100 100%

Table 4.17 TAKING INTO CONSIDERATION THE DEVELOPMENT IN TECHNOLOGY, UBA PLC HAS DONE ENOUGH TO MATCH CUSTOMERS NEED? N0. OF RESPONSES
PERCENTAGE %
YES NO

58 42
SOURCE: AUTHORS FIELD WORK 2012

42 42%

TOTAL 100 100%

4.1

DATA ANALYSIS

In order to analyze the data obtained, paragraph-by – paragraph analysis of each table would be given.

51

In table 4.1:

100 questionnaires were administered and duly

returned. 15%, 16%, 25%, and 18% of the respondents claimed to be within the ages of 18-27 years, 28-37 years, 38-47 years, 48-57 years and 58 and above years old respectively. In table 4.2: of the 100 questionnaires returned 71% of the

respondents are male, while the remaining 29% are women. In table 4.3: of the 100 questionnaires returned 68% are bachelors, 27 are married and 5% are divorced. In table 4.4: of the 100 questionnaires returned 13% , 19%, 17%, 21% and 30% claimed to have been associated with UBA Plc for a period ranging from 0-4 years, 5-9 years, 10-14 years, 15-19years, 20 and above years respectively. In table 4.5: of the 100 questionnaires returned 12% strongly agreed, 68% agreed, 5% were in deferent, 11% disagreed and 4% strongly disagreed that their relationship with UBA Plc can be said to be satisfactory. In table 4.6: of the 100 questionnaires returned 27% strongly agreed, 43% agreed,8% were in deferent, 21% disagreed and 11% strongly
52

disagreed that UBA Plc is poised at resolving their banking issues at all times In table 4.7: of the 100 questionnaires returned 15% strongly agreed, 43% agreed, 12% were in deferent, 20% disagreed and 10% strongly disagreed that UBA Plc renders professional/banking/business advice to its customers. In table 4.8: of the 100 questionnaires returned 7% strongly agreed, 52% agreed, 8% were in deferent, 24% disagreed and 9% strongly disagreed that the services rendered by UBA Plc are qualitative and up- to –date. In table 4.9: of the 100 questionnaires returned 40%, 11%, 12%, 15% and 20% faces the challenges of low turnaround time, poor reception, inadequate product, poor network, and poor customer relations. In table 4.10: of the 100 questionnaires returned 52% strongly

agreed, 23% agreed, 11% were in deferent, 10% disagreed and 4% strongly disagreed that Organizations who practices relationship marketing can easily achieve their set objectives.
53

In table 4.11: of the 100 questionnaires returned 2% strongly agreed, 10% agreed, 3% were in deferent, 47% disagreed and 28% strongly disagreed that Relationship marketing has no impact in achieving organizational objectives. In table 4.12: of the 100 questionnaires returned 8% strongly agreed, 57% agreed, 15% were in deferent, 13% disagreed and 7% strongly disagreed that Relationship marketing creates a bonding between UBA plc and its customers. In table 4.13: of the 100 questionnaires returned 48% strongly

agreed, 29% agreed, 3% were in deferent, 15% disagreed and 5% strongly disagreed that Relationship marketing has effect on customer loyalty. In table 4.14: of the 100 questionnaires returned 4% strongly agreed, 27% agreed, 4% were in deferent, 49% disagreed and 18 strongly disagreed that Relationship marketing does not have any effect on customer loyalty. In table 4.15: of the 100 questionnaires returned 30% accepted the fact that in the fierceness of competition in the banking sector the
54

relationship marketing strategy employed by UBA Plc is adequate while, 70% did not yield to the employed strategy. In table 4.16: of the 100 questionnaires returned 72% agreed that UBA Plc needs a better marketing strategy, while the remaining 28% do not see the need for a new strategy. In table 4.17: of the 100 questionnaires returned 52% accented to the fact that with the advancement in technology in Nigeria UBA Plc has actually tried to satisfy customers needs, while 48% said they have not done enough to satisfy customers needs.

4.2

TEST OF HYPOTHESES

Two hypotheses were tested, the first was to examine if relationship marketing was a significant tool in achieving organizational objectives and the second is to examine if relationship marketing can improve customer loyalty.

55

HYPOTHESIS 1 H1: Relationship marketing is a significant tool in achieving organizational objectives. H0 : Relationship marketing is not a significant tool in achieving organizational objectives.

The hypothesis was tested the Pearson correlation coefficient (r). The Pearson correlation coefficient result is presented in table 4.3.1 below while the detailed of the generated computer output of Correlation Coefficient and corresponding linear regression are presented in appendix II. Table 4.3.1. Test statistical effect of relationship marketing on organizational objectives (correlation coefficient).
Pearson Correlation Sig (1- tailed) N OO RM OO RM OO RM OO 1.000 .899 .019 5 25 RM .899 1.000 .019 5 5

SOURCE: FIELD WORK

The Pearson correlation coefficient r = 0.899 which was highly significant at P =0.000 while the degree of freedom (df) = 1 Similarly, linear regression shows that there exist strong effects of relationship marketing and organizational objectives. Specifically,
56

the coefficient of determination (r2) = 0.744 shows that relationship marketing accounted for the 74% objectives achieved by

organizations. Hence improvement in relationship management will boost organizations. Table 4.3.2. Test statistical effect of relationship marketing on organizational objectives (linear Regression).
Unstandardized Coefficients B -12.700 10.900 RM a. Dependent variable OO
SOURCE: FIELD WORK

Model 1 (constant)

Std error 10.167 3.065

Standard coefficients Beta .899

1 Sig -1.249 3.556 300 0.38

In linear regression the general form for equation for any straight line on the graph is Y= a + bx, where Y is the dependent variable that is (Organizational Objectives), a is the constant, b is the Beta or the slope of the line and x is the independent variable (relationship marketing) base on the result of the regression analysis see table 4.3.2. The regression equation is Y = -12.700 + .899x

57

4.3.1 INTERPRETATION OF RESULTS From the result obtained from various tests conducted, it is therefore possible to interpret the results presented in the table above. The regression showed that the parameters conform to the aprior expectation criterion. The interpretation has a positive relationship with b, showing a positive relationship as expressed in the apriori expectation.

4.3.2 STUDENT T-TEST
This is also used to test the significance of the parameter estimate. The hypothesis can thus be stated as follows. H0: there is no significant difference between the parameter estimates and zero if and if the value of the calculated statistics is less than the value of the tabulated t-statistics. H1: there is significant difference between the parameter estimates and zero if and if the value of the calculated statistics is greater than the value of the tabulated t-statistics.

58

However the rule of thumb (decision rule) is that, accept the null hypothesis H0 when he calculated t-value is less than 2 and reject if greater or equal to 2. The student t-test for b of 3.556 is greater than 2 therefore, we reject the H0 and conclude that b is a significant and efficient estimate of the true population parameter.

4.3.3 THE F-TEST
The test analyses and judge the significance and reliability of the regression equation. The decision rule is that, if the value of F-test is less than four, accept the null hypothesis of insignificant nature of the regression equation and vice versa. The F-testof the result shows 12.644 therefore, we reject the null hypothesis and conclude that the regression model is significant and is a good measure of fit.

4.3.4 COEFFICIENT OF DETERMINATION (R2)
This is used to measure the relationship between the dependent and independent variables. It is a measure of fit and it explains how best
59

the independent variables explain the variation in the dependent variable. The R2 obtained is 0.744 which indicates a strong effect of independent variables on the dependent variables. This implies that about 74% of the variation in organizational development is explained by human resource management and utilization.

4.3.5 DISCUSSION OF RESULT
Since the SPSS output is greater than the tabulated value (3.556 >2) hence, the null hypothesis is rejected and we accept the alternative hypothesis which states that ?relationship marketing is a significant tool in achieving organizational objectives? since the F-Value is greater than the table value (12.644 >4), it implies that the effect the effect of relationship marketing on organizational objective is highly significant. The implication of this is that for any bank to effectively achieve it set objectives, they must pay significant attention to relationship marketing.

60

HYPOTHESIS 2 H0 : Customer loyalty cannot be achieved through relationship marketing.

H1: Customer loyalty can be achieved through relationship marketing.

The hypothesis was tested the Pearson Correlation Coefficient (r). The Pearson correlation coefficient result is presented in table 4.3.3 below while the detailed of the generated computer output of correlation coefficient and corresponding linear regression are presented in appendix III. Table 4.3.3. Test statistical effect of relationship marketing on customer loyalty (correlation coefficient).
Pearson Correlation Sig (1- tailed) N OP HRM OP HRM O HRM CL 1.000 .844 .036 5 25 RM .844 1.000 .036 5 5

SOURCE: FIELD WORK

The Pearson correlation coefficient r = 0.844 which was highly significant at P =0.036 while the degree of freedom (df) = 1 Similarly, linear regression shows that there exist strong effects of relationship marketing on customer loyalty. Specifically, the
61

coefficient of determination (r2) = 0.616 shows that relationship marketing accounted for the 61% of customer loyalty achieved by the organizations. Hence improvement in relationship management will increase customer loyalty. Table 4.3.2. Test statistical effect of relationship marketing on organizational objectives (linear Regression).
Unstandardized Coefficients B Std error -10.000 12.171 10.000 3.670 Standard coefficients Beta .844

Model 1 (constant) RM a.

1 .822 2.725

Sig .472 0.72

Dependent variable OP
SOURCE: FIELD WORK

In linear regression the general form for equation for any straight line on the graph is Y= a + bx, where Y is the dependent variable that is (Organizational Objectives), a is the constant, b is the Beta or the slope of the line and x is the independent variable (relationship marketing) base on the result of the regression analysis see table 4.3.2. The regression equation is Y = -10.000 + .844x

62

4.3.6 INTERPRETATION OF RESULTS From the result obtained from various tests conducted, it is therefore possible to interpret the results presented in the table above. The regression showed that the parameters conform to the aprior expectation criterion. The interpretation has a positive relationship with b, showing a positive relationship as expressed in the apriori expectation. 4.3.7 STUDENT T-TEST This is also used to test the significance of the parameter estimate. The Hypothesis can thus be stated as follows. H0: there is no significant difference between the parameter estimates and zero if and if the value of the calculated statistics is less than the value of the tabulated t-statistics. H1: there is significant difference between the parameter estimates and zero if and if the value of the calculated statistics is greater than the value of the tabulated t-statistics.

63

However the rule of thumb (decision rule) is that, accept the null hypothesis H0 when he calculated t-value is less than 2 and reject if greater or equal to 2. The student t-test for b of 2.725 is greater than 2 therefore, we reject the H0 and conclude that b is a significant and efficient estimate of the true population parameter. 4.3.8 THE F-TEST The test analyses and judge the significance and reliability of the regression equation. The decision rule is that, if the value of F-test is less than four, accept the null hypothesis of insignificant nature of the regression equation and vice versa. The F-test of the result shows 7.426 therefore, we reject the null hypothesis and conclude that the regression model is significant and is a good measure of fit. 4.3.9 COEFFICIENT OF DETERMINATION (R2) This is used to measure the relationship between the dependent and independent variables. It is a measure of fit and it explains how best the independent variables explain the variation in the dependent variable.
64

The R2 obtained is 0.616 which indicates a strong effect of independent variables on the dependent variables. This implies that about 74% of the variation in organizational development is explained by human resource management and utilization. 4.3.10 DISCUSSION OF RESULT

Since the SPSS output is greater than the tabulated value (2.725 >2) hence, the null hypothesis is rejected and we accept the alternative hypothesis which states that ?customer loyalty can be achieved through relationship marketing? since the F-Value is greater than the table value (7.426>4), it implies that the effect of relationship marketing on customer loyalty is highly significant. The implication of this is that for any bank to effectively achieve complete customer loyalty, they must pay significant attention to relationship marketing.

4.4

MANAGERIAL IMPLICATIONS

What the result means to management and stakeholders in the business industry is that relationship marketing is a fundamental technique for organizations that aspire to achieve objectives in the
65

industry considering the fierce competition that has taken over the industry. The implication on this on management is that any banking institution that any banking institution that neglects relationship marketing stands the chance of losing its customers to those ones that innovates in areas of goods and services and as well stimulates and sustains customer relationship. Thus, the research suggests that bank management should devote more time to build relationship with their customers

66

CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION

5.1

SUMMARY

The dynamic and competitive nature of the Nigerian economic environment coupled with the sophistication of customers and liberalization of the banking industry has made the key operators of the industry to abandon armchair marketing and engage themselves in marketing through the adoption of various marketing strategies. After a comprehensive study of data generated and analyzed, the result of this study reveals that relationship marketing is a strategic tool for achieving organizational objectives especially in the banking industry in Nigeria. The introductory aspect of the study introduced the concept of relationship marketing; the objectives of the research were identified as well as the research problems. In the review of literature issues such as the nature and essence of marketing, marketing of banking services roles and levels of relationship marketing, customer
67

satisfaction as focus, factors responsible for relationship marketing, internal marketing and outcomes of relationship marketing. Two hypotheses were tested in the course of the study; the first one was based on how relationship marketing can be used to achieve organizational objectives and the other on how relationship marketing can be used to achieve customer loyalty. Questionnaires were used as instruments of data collection and the data collected were analyzed using linear regression and correlation coefficient analysis using the SPSS soft ware (Statistical Package for Social Science). Results of the finding reveals that relationship marketing is a significant tool in achieving organizational objective as well as achieving customer loyalty.

5.2

CONCLUSION

From the results of this study, the adoption of the relationship marketing is strategic to achieving organizational objectives in the banking industry. This study reveals the need for bank management

68

should lay more emphasis on the development of relationship marketing strategies and should be involved in continuous innovation in areas of service and product development. Marketing is not an in itself but a means to an end and as such not be relegated to the background. 5.3 RECOMMENDATION

Relationship marketing has been revealed to be a vital tool for sustaining organizational growth in the banking industry, thus indicating that marketing has contributed and will continue to contribute positively to the growth and development of the banking industry in Nigeria. It is in the light of this that the following recommendations were made to the stakeholders in the industry as a way of further enhancing the growth and further sustenance of the industry: 1. To maintain the success recorded in the area of marketing and relationship building, management have a responsibility of designing policies that will aid the attainment of marketing

69

objective and the overall corporate mission and this policy should center on the following; a. Attitude: everyone in the organization needs a positive marketing attitude. Commitment and responsibility is the glue that holds the policy together. Involving the managers and banking officers in the drafting of the marketing policies and strategies and ensuring that they understand both the strategies and it implications for the organization are essential tasks. b. Accuracy: the marketing policy should be a milestone and not a millstone; it will need to set out goals and targets in an open and constructive way. The receipts of the customers whether customers, staff or other stakeholders will need to know that the target set is realistic. c. Adequate resources: adequate resources are needed to bring the strategies to life so it is not just a paper exercise which wastes everybody‘s time. Resources might include staff time and some financial investment. The mix allocation will depend on identified priorities.

70

d. Awareness: communication both internally and externally is essential. The action of staff will add credibility and staff will need to be empowered to integrate the strategies with their own activities in the work place. On a wider front, the customer will like to know about the evolving products and services and the strategies for marketing them. e. Action: quality management is a journey and not a destination, therefore the strategies will need to reflect this by indicating how it will be kept up-to-date and monitor in order to achieve continuous improvement. 2. The bank should continuously improve upon it focus on customers and the achievement of customers‘ satisfaction. The bank should therefore continuously engage in those activities that direct most of their time to satisfying the needs and desires of their clientele as this will facilitate the continuous build up of existing customer – focused culture. 3. Management should as much as possible devote time to meeting with customers so as to know them and even improve the chances of winning more business from the customers.
71

4. The current appraisal of staff should be made to incorporate the rating of officers attitude towards customers vis-à-vis customers complaints and commendations on the respective contact officer of the bank. This is important because no officer having known what awaits him/her if a customer should complain about his/her attitude that will engages in any activity that causes unwanted dissatisfaction to the customers. This however needs to be continuously implemented. The above recommendation is in line with frequent complaints about few officers of the bank who seem to portray them as clogs in the wheel of progress of the bank in trying to achieve satisfied customers. 5. Customer satisfaction should be assessed across the bank‘s service offerings as it concerns the channels of distribution and this assessment should take high priority and should be treated as equally important as the measure of budgeting performance of the groups. This means emphasis on customers relationships and retention as well as product/service performance and

profitability.
72

6. Finally to achieve set objectives in the banking industry, management should commit more resources to organizing seminars and workshops for their staff and customers and promotional strategies such as award of cash and gifts to customers who have consistently remained loyal. This should be used from time to time as a means of showing appreciation to loyal customers 5.4 SUGGESTIONS FOR FURTHER STUDIES

Since it is know that this research study is not conclusive on its own I hereby suggest that further research should be carried out by any interested person or groups of persons on the phenomenal of total quality marketing in relations to relationship marketing and organizations objective. This will enhance the understanding of the role of relationship marketing in the banking industry.

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BIBLIOGRAPHY
Ahmed, Parvaiz K. and Mohammed Rafiq (2002), Internal Marketing: Tools and Concepts for Customer-Focused Management. Oxford: Butterworth Heinemann. Ahmed, Rafiq, and Norizan M. Saad (2003), ?Internal Marketing and the Mediating Role of Organizational Competencies,? European Journal of Marketing, 37 (9), 1221–41. Baker, Thomas L., Penny M. Simpson, and Judy A. Siguaw (2002), ?The Impact of Suppliers‘ Perceptions of Reseller Market Orientation on Key Relationship Constructs,? Journal of the Academy of Marketing Science, 27 (Winter), 50-57. Barbell, C. (2004) Marketing Philosophy and its Impact on Product Development; The Nigerian Accountant, p6. Bell, Menguc, and Sara L. Stefani (2004), ?When Customers Disappoint: A Model of Relational Internal Marketing and Customer Complaints,? Journal of the Academy of Marketing Science, 32 (2), 112–26. Bell, Simon J. and Bulent Menguc (2002), ?The Employee– Organization Relationship, Organizational Citizenship

Behaviors, and Superior Quality,? Journal of Retailing, 78 (2), 131– Doyle, P. (2002) Marketing and the British Chief Executive; Journal of Marketing Management vol3 N02 Winter. Pp 121-32 Goulandris, J (2004). What is a Bank? Banking World Magazine p27. Gwinner, and Dwayne D. Gremler (2000), ?Why Customers Build Relationships with Companies—and Why Not,? in Relationship
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Marketing: Gaining Competitive Advantage through Customer Satisfaction and Customer Retention, Thorsten Hennig-Thurau and Ursula Hansen, eds. Berlin, Germany: Springer, 369-91. Gwinner, Kevin P., Dwayne D. Gremler, and Mary Jo Bitner (2001), ?Relational Benefits in Services Industries: The Customer‘s Perspective,? Journal of the Academy of Marketing Science, 26 (Spring), 101- 14. Hennig-Thurau, Thorsten (2000), ?Relationship Quality and

Customer Retention through Strategic Communication of Customer Skills,? Journal of Marketing Management, 16 (1/3),5579. http://heidicohen.com/marketingdefinition Hwang, Ing-San and Der-Jang Chi (2005), ?Relationships Among Internal Marketing, Employee Job Satisfaction and International Hotel Performance: An Empirical Study,? International Journal of Management, 22 (2), 285–93. Martilla, J.A. and John, C.T (2007) Importance of Performance Analysis; Journal of Marketing; pp 77-79. McDonald, B (2001), Ten Barriers to Marketing Planning; Journal of Marketing Management Vol.5 pp 1-8 Mukherjee, Avinandan and Neeru Malhotra (2006), ?Does Role Clarity Explain EmployeePerceived Service Quality??

International Journal of Service Industry Management, 17 (5), 444– 73.

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Toby, A. (2005), Customer Service and the Future of Banking. The Nigerian Accountant: July/September. Vandeumewe, S. (2006) A Marketing Mission for Success, Management This day. A Financial Times News Services October, 18 p26. Wilson, R. and Gilligan, C (2001), Strategic Marketing Management: Planning Implementation and Control; 2nd ed. Butterworth Heinemann. www.admis.com www.marketingpower.com

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APPENDIX I

SAMPLE QUESTIONNAIRE ON THE ROLE OF RELATIONSHIP MARKETING AS A TECHNIQUE FOR ACHIEVING ORGANIZATIONAL OBJECTIVES. A CASE STUDY OF UBA PLC ILORIN

1. AGE 18-27 YEARS 28-37 YEARS 38-47 YEARS 48-57 YEARS 58 AND ABOVE

2. SEX MALE FEMALE

3. MARITAL STATUS SINGLE MARRIED DIVORCE

4. HOW LONG HAVE YOU BEEN ASSOCIATED WITH UBA PLC ? 0-4 YEARS 5-9 YEARS 10-14 YEARS 15-19 YEARS 20 AND ABOVE

77

5. YOUR RELATIONSHIP WITH UBA PLC CAN BE SAID TO BE SATISFACTORY?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

6. UBA PLC IS POISE AT RESOLVING YOUR BANKING PROBLEMS/ISSUES AT ALL TIMES?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

7. UBA PLC RENDERS PROFESSIONAL/BANKING/BUSINESS ADVICE TO ITS CUSTMERS?
STRONGLY

AGREE

AGREE

INDIFFER ENCE

DISAGREE

STRONGLY DISAGREE

8. THE SERVICES RENDERED BY UBA PLC ARE QUALITATIVE AND UP – TO DATE?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

9. WHAT ARE THE CHALLENGES YOU FACE AS CUSTOMERS OF UBA PLC?
LOW TURNARO UND TIME

POOR RECEP TION

INSUFFICI ENT PRODUCTS

POOR NETWORK

POOR CUSTOMER RELATION

10. ORGANIZATIONS THAT PRACTICES RELATIONSHIP MARKETING CAN EASILY ACHIEVE THEIR SET OBJECTIVES?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE
78

11. RELATIONSHIP MARKETING ORGANIZATIONAL OBJECTIVES?
STRONGLY

HAS NO

IMPACT

IN

ACHIEVING

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

12. RELATIONSHIP MARKETING CREATES A BONDING BETWEEN UBA PLC AND ITS CUSTOMERS?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

13. RELATIONSHIP MARKETING HAS EFFECT ON CUSTOMER LOYALTY?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

14. RELATIONSHIP MARKETING DOES NOT HAVE ANY EFFECT ON CUSTOMER LOYALTY?
STRONGLY

AGREE

AGREE

INDIFFERE NCE

DISAGREE

STRONGLY DISAGREE

15. IN THE FIERCENESS OF PRESENT COMPETITION IN THE BANKING SECTOR, THE RELATIONSHIP MARKETING STRATEGY EMPLOYED BY UBA IS ADEQUATE?
YES NO

16. UBA PLC NEEDS TO INTRODUCE A BETTER MARKETING STRATEGY?
YES NO

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17. TAKING INTO CONSIDERATION THE DEVELOPMENT IN TECHNOLOGY, UBA PLC HAS DONE ENOUGH TO MATCH CUSTOMERS NEED?
YES NO

80



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