1.1 Introduction
Marketing is defined as the process of identifying, anticipating, and satisfying customer needs and wants through the creation, communication, and delivery of value (Kotler & Keller, 2016). In the context of financial services, marketing involves promoting banking products and services such as savings accounts, loans, insurance, investment opportunities, and digital banking solutions to attract and retain customers (Opara, 2018). Unlike tangible goods, financial services are intangible, perishable, and often require trust and personal interaction, making their marketing more complex and strategic (Akinlo & Adeyemi, 2017).
The Nigerian banking industry has undergone significant transformations over the past decades, including deregulation, technological advancement, and the emergence of new financial products to meet diverse customer needs (Adegbite, 2019). According to Eze (2020), banks in Nigeria are increasingly adopting modern marketing strategies such as digital advertising, social media engagement, and customer relationship management to enhance visibility and maintain competitive advantage (Obalola, 2020).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.
1.2 Background of Study
Marketing of financial services is a critical aspect of the banking industry, particularly in emerging economies such as Nigeria. According to Kotler and Keller (2016), marketing involves the identification, anticipation, and satisfaction of customer needs through the creation and delivery of value. In the context of financial services, marketing goes beyond the promotion of products; it encompasses building customer relationships, educating consumers, and fostering loyalty (Opara, 2018). Banks in Nigeria are increasingly adopting marketing strategies to differentiate their services in a highly competitive environment, as they contend that effective marketing is key to sustaining profitability and growth (Akinlo & Adeyemi, 2017).
It is reported that the Nigerian banking sector has witnessed significant reforms over the last two decades, including deregulation, technological innovations, and the emergence of new financial products designed to meet diverse consumer demands (Adegbite, 2019). These developments have necessitated a shift from traditional marketing approaches to more sophisticated and customer-centric strategies. According to Eze (2020), banks are now employing digital marketing channels, social media campaigns, and personalized services to reach broader audiences and enhance customer engagement. On the other hand, Obalola (2020) asserted that the rapid growth of fintech companies has intensified competition, requiring traditional banks to continuously innovate and adopt modern marketing techniques.
Studies have affirmed that marketing of financial services in Nigeria faces multiple challenges. Okwu and Okwu (2016) reported that low financial literacy among consumers limits their understanding and utilization of banking products, thereby reducing the effectiveness of marketing initiatives. Similarly, Udo (2019) stated that regulatory restrictions imposed by the Central Bank of Nigeria constrain banks from implementing certain aggressive marketing strategies, making it necessary for banks to strike a balance between compliance and customer acquisition. Additionally, Adeniran and Igwe (2021) contended that economic instability, fluctuating interest rates, and inflation further complicate marketing efforts, as these factors affect consumers' purchasing power and responsiveness to banking promotions.
Nwankwo (2017) affirmed that inadequate market segmentation and lack of customer behavior analysis result in generalized marketing campaigns that do not resonate with specific target groups. On the other hand, Oni (2017) reported that banks that adopt innovative approaches, including mobile banking, online financial advisory services, and targeted advertising, are more successful in enhancing customer satisfaction and loyalty. According to Adeoye and Elegunde (2015), effective marketing not only promotes the adoption of banking products but also supports financial inclusion by making banking services accessible and understandable to diverse population segments. This study is set against the backdrop of these developments and challenges in the Nigerian banking sector. It seeks to investigate how banks market their financial services, the strategies they employ, the challenges they face, and the overall impact of marketing on customer engagement and loyalty.
1.3 Statement of Problems
Investigation revealed that the marketing of financial services by banks in Nigeria is increasingly becoming a complex and challenging task due to the dynamic nature of the banking sector. According to Adeoye and Elegunde (2015), the rapid growth of financial products and services is creating a competitive environment where banks struggle to effectively communicate the value of their offerings to potential customers (Oni, 2017).
Additionally, there is intense competition from non-bank financial institutions and fintech companies, which aggressively market alternative financial solutions that appeal to younger and tech-savvy customers (Obalola, 2020).
Furthermore, the challenges in marketing financial services are further compounded by consumer distrust and low financial literacy levels. Studies have affirmed that a significant portion of the Nigerian populace lacks sufficient knowledge of available banking products, making it difficult for banks to achieve optimal market penetration (Okwu & Okwu, 2016). It is against this backdrop that this study seeks to investigate the challenges and strategies associated with the marketing of financial services by the Nigerian banking industry.
1.4 Aim and Objectives of Study
The aim of this study is to investigate the effectiveness of marketing strategies employed by Nigerian banks in promoting financial services.
The specific objectives of the study include:
- To examine the marketing strategies adopted by Nigerian banks in promoting their financial services.
- To identify challenges faced by banks in marketing financial services effectively.
- To assess the impact of marketing strategies on customer satisfaction and loyalty.
- To provide recommendations for improving the marketing of financial services in Nigerian banks.
1.5 Research Questions
Based on the objectives stated above, the study will seek to answer the following research questions:
- What marketing strategies are currently employed by Nigerian banks in promoting their financial services?
- What challenges do Nigerian banks face in marketing their financial services?
- How do marketing strategies influence customer satisfaction and loyalty in Nigerian banks?
- What measures can be adopted to enhance the marketing of financial services in Nigerian banks?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H0: Marketing strategies employed by Nigerian banks do not have a significant impact on customer satisfaction and loyalty.
- H1: Marketing strategies employed by Nigerian banks have a significant impact on customer satisfaction and loyalty.
1.7 Significance of Study
It is believed that at the completion of the study, the findings will guide banks in adopting effective strategies to reach a wider audience, increase product adoption, and improve customer loyalty. It will also guide regulatory authorities, such as the Central Bank of Nigeria, in shaping policies that support fair and effective marketing practices.
Furthermore, the study will inform investors about the potential profitability of banks that employ effective marketing strategies.
Lastly, the study will serve as a reference point for future research in banking and marketing in Nigeria.
1.8 Scope of Study
The scope of the research is focused on the marketing of financial services by banks operating in Lagos State, Nigeria, with specific attention to First Bank of Nigeria Limited.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.10 Definition of Terms
Marketing:
Marketing is the process of identifying, anticipating, and satisfying customer needs through the creation, promotion, and delivery of value (Kotler & Keller, 2016). In this study, marketing refers to how banks promote financial products and services to attract and retain customers.
Financial Services:
Financial services refer to products and services offered by banks and other financial institutions, including savings accounts, loans, investments, insurance, and digital banking solutions (Opara, 2018).
Banking Industry:
The banking industry encompasses all licensed banks operating within Nigeria, including commercial, retail, and investment banks (Adegbite, 2019).
Customer Satisfaction:
Customer satisfaction is the degree to which a customer's expectations are met or exceeded by a product or service (Eze, 2020).
Customer Loyalty:
Customer loyalty is the commitment of customers to continue using a bank's services and recommending them to others (Obalola, 2020).
Marketing Strategy:
Marketing strategy refers to the plan and methods adopted by banks to promote their products, reach target customers, and gain competitive advantage (Akinlo & Adeyemi, 2017).
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