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INFLUENCE OF ADVERTISING AND PERSONAL SELLING ON NEW PRODUCT OF COMMERCIAL BANKS IN OWERRI (A STUDY OF UBA NIG PLC)

INFLUENCE OF ADVERTISING AND PERSONAL SELLING ON NEW PRODUCT OF COMMERCIAL BANKS IN OWERRI (A STUDY OF UBA NIG PLC)

ABSTRACT

In today’s highly competitive marketing environment, marketers do not stop at developing a good product, pricing it attractively and making it readily available to the target customers they must communicate it to the target audience for them to succeed. This research work has therefore been made to appraise the influence of advertising and personal selling on new products of commercial banks in Owerri metropolis with specific interest on United Bank for African (UBA) Nig. Plc.

Generally speaking, economic growth is closely related to the commercial banks as their concern is to provide services to their customers, new product development and innovation are deemed necessary by operators so as to meet the immediate needs to its customers for minimum satisfaction, yet, customers show no sign of improved favourable relationship even at the instance of radical improvement that has taken place in the product itself and promotional tools via advertising and personal selling.

In carrying out this research work, the researcher identified some objectives he tends to achieve. However, to achieve the goal of the study, the data needed for the analysis were collected through questionnaire. The researcher made use of frequency tables and percentage in data presentation which chi-square and analysis of variance were used to test the hypothesis formulated.

After the analysis, it was discovered that commercial banks still have to put more efforts on advertising and personal selling. It was also discovered that commercial banks do expose their advert messages on bill boards and radio while the prospects are mostly exposed to television. Recommendations were also made via the findings. The commercial banks were advised to create a separate marketing department who will identify their advertising efforts and also embark on media research together with recruitment and selection.

      CHAPTER ONE

  • INTRODUCTION

Advertising is a particular promotional tool that attracts the greatest controversy as to roles and contributions in social, economic and ethical spines. It is not the only communication tool which organizations utilize  in trying to communicate the existence and quality of their products to the potential and/ or prospective buyers but, it is the most commonly used and the most noticed of all the promo tools.

It is the only one that gets to the greatest number of the firm’s target audience at the same time. It is not done by profit oriented organizations alone but, politicians, government and even non- profitable organization do adverts.

Advertising can therefore be defined as any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor. The word “any paid form” distinguishes advertising from publicity because every organization that wants to advertise will surely purpose space or time in the chosen medium to tell the story about a product or service.

“Non-personal” distinguished advertising for personal selling because advertising reaches large number of audience through mass media which are non-personal and do not have the chance for immediate feedback as personal selling does. Ideas, goods and services established that advertising is not restricted to tangible products but also intangible products.

Advertising is used by profit and non-profit making organization to promote their products. “An identified sponsor” indicates that the source of every advertising messages is always made public and this differentiates advertising from propaganda and rumor (Adilika , Ebua and Nnolim, 1996).

On the other hand, personal selling is a direct personal communication (face-to- face or over the phone) aimed at influencing purchase decision. Personal selling derives its undisputable unique importance from the business maxim which says that “production is not complete until consumption takes place”.

Personal selling is seen as the last bus stop in the promotional journey. The overall marketing objective or goal is to increase profitable sales of an organization’s offering.

Of all the promotional functions, personal selling stands out as the singular element that can get buying action and transfer of title. It must however be noted that personal selling must work in tandem with other elements of the promotional mix to gain full expectations of the strategic marketing goal. Personal selling dominates the promotion policy of most firms, and attracts more expenditure than any other marketing function.  Personal selling is likely to carry the bulk of the promotional load in a situation where.

  • The market is concentrated geographically in a few industries or in a few customers
  • The product has a high unit value, is quite technical in nature or requires demonstrations.
  • The product must be fitted to an individual customer’s needs as in the case of securities and insurance.
  • The sale involves a trade in.
  • The product is in the introductory stage of its life cycle.
  • The organization does not have enough money to sustain an adequate advertising campaign.

In contrast, advertising may be most effective in achieving awareness and encouraging the buyer’s initial interest in the product or service, but it takes personal selling to convince the customer of the product’s unique attributes as against competitive alternatives. Personal selling presentation is flexible and can be tailored to the peculiar needs and behaviour of each customer. With personal selling, customer’s reaction to a particular sales message can be discovered and necessary adjustments made without delay.

1.1   BACKGROUND OF THE STUDY

Any organization that creates a product or a service and then sits back and wait for things to happen, usually discovered that nothing much does happen. The organization needs to tell its story, to communicate with its potential customers. The fact is that after the best (new) products have been created, brilliantly packaged, rightly priced, magnificently distributed and well positioned to best suit the needs of the customers. All these marketing efforts would be a waste if, it has not been brought to the notice of the customers (current and potential) such is the essence of advertising and personal selling amongst others.

New products or ideas as the case may be, are not just produced to fulfill the creative instincts of man but to fill the demand gap originally discovered through research. This however, justifies the notion that marketing begins and ends with consumers.

In the mean time, it should be emphasized and not be over-emphasized of the basic goals and objectives of business as well established by capitalist theorist, hence, the emergence of cut- throat competition in business today. It is this unbridled struggle that has persisted among cooperate bodies in the quest for survival that necessitated various strategic measures for maximizing interest.

These strategies not only cover product creation and improvement, but extends to asking the question, “how do  people get to know that we have something new” this knowledge however, gives rise to advertising which forms the best possible means of transmitting the desired appeal to sensitize people of that which will satisfy their pressing needs.

A time came when the issues are no more routed to awareness creation in relation to existence of a product owing to intense advertisement, this unfavourable eruption gave rise to the question, “how do we reach consumers and make sure that our products reach them at maximum satisfaction. The bothering concern on this necessitated the adoption of personal selling which has of recent become a traditional adage among corporate bodies that innovate. All these however, are the validation that advertising and personal selling have some anticipated positive effects on new products.

To this end, this research therefore wants to know the pattern of behaviour of theses concepts and what they can proffer if applied accordingly. For this purpose therefore, the research work analysis is limited on United Bank for African Plc, in Owerri metropolis.

HISTORICAL BACKGROUND OF UNITED BANK FOR AFRICA (UBA) PLC

United Bank for Africa Plc (UBA) is a public limited liability company incorporated in Nigeria.

OVERVIEW

UBA Is large financial services provide in Nigeria with subsidiaries in 20 sub-Saharan countries, with representative offices in France, the United Kingdom and the United States of America. It offers universal banking services to more than 7 million customers across 750 brunches. Formed by the merger of the commercially focused UBA and the retail focused Standard Trust Bank in 2005, the bank purports to have a clear ambition to be the dominant and leading financial services provider in African.

Listed on the Nigerian stock exchange in 1970, UBA claims to be rapidly evolving into a pan- African full service financial institution. The group adopted the holding company model in July 2011. As of December 2011, the valuation of UBA Group’s total assets was approximately US $ 12.3 billion (NGN: 1.94 trillion) with shareholder equity of about US $ 1.07 billion (NGN : 170 billion).

HISTORY

UBA’s history dates to 1949 when the British and French Bank Limited (BFB) commenced business in Nigeria. Following Nigeria’s independence from Britain, UBA was incorporated in 1961 to take over the business of BFB. Today’s United Bank for African plc (UBA) is the product of the merger of Nigeria’s 3rd and 5th largest banks, namely, the old UBA and the former Standard Trust Bank plc, and a subsequent acquisition of the erstwhile continental Trust Bank limited (CTB).

 OWNERSHIP

The stock of UBA and its subsidiaries (the UBA group) was listed on the Nigeria stock exchange, where it was publicly trade under the symbol UBA. The detailed shareholding in the stock of the company is not publicly known at this time.

CORPORATE PROFILE

Since its historical emergence from the merger of former standard Trust Bank and UBA plc, the UBA group has positioned itself to be Nigeria’s dominant bank and a leading player on the African continent. In 2000, Europe’s frontline Finance and economy magazine, euro money named UBA the Best Domestic Bank in Nigeria, in recognition of the banks exponential growth in the past couple of years and the comparatively higher inflow of investment from global finance players. In 2007, pan-African newsmagazine awarded UBA the Emerging Global Bank Award, indicative of the international bank which has most positively influenced the African continent.

UBA has consistently positioned itself as the bank to beat in Nigeria’s financially strong banking industry. It has grown its total assets by over 345 percent in the last five years, up from NGN 198.68 billion ($1.656 billion) in 2002 to NGN 884.14 billion ($ 7.368 billion) in 2006. More recently, at the end of the 2008 financial year, it recorded gross earnings of NGN 169.6 billion, profit before tax and exceptional items of NGN 56.8 billion, profit after tax of NGN 40.8 billion and total assets of NGN 2.2 trillion.

UBA has the largest distribution network in Nigeria with over 6.5 million customers in personal, commercial and corporate market segments. As of 30th September, 2008, it has over 650 business offices, 296 deployed POS and 1332 ATMs and pioneered cheque acceptance ATMs in Nigeria. Its over 14,000 staff globally are also referred to as “lions and lionesses”.

Regionally, the group has a presence in 18 African countries and in all major financial centers. The bank currently operates in Nigeria, Ghana, ivory coast, Cameroon, Sierra Leone, Liberia, Uganda, Benin, Burkina Faso and Senegal and has unfolded plans to expand its banking operations to 15 additional countries in African come 2009.

Records indicate that UBA is the only sub-Saharan bank with dual presence in the U.S  and the UK with a U.S regulated branch presence in New York since 1984, UBA capital (Europe ) in London which was established as UK regulated investment banking operation in January 2008 and a representative office in Paris, France.

 ORGANIZATION

UBA group’s operating structure is organized around seven Strategic Business Unit (SBUs) and four Strategic Support Units (SSUs), informed by the need to reinforce its leadership in service delivery, relationship management and the execution of its strategy. In addition, the GMD/ CED is supported by the Group Executive Officer consisting of the Strategy Office, the Corporate Transformation Office, the Chief of Staff and Advisers to the GMD/CEO.

1.2        STATEMENT OF THE PROBLEM

Despite the fact that scholars have continually stressed the role of Advertising and personal selling in organizational growth and economic development, quite a number of firms have not taken it seriously.

The primary concern of commercial bank is to provide services to its customers. New product development and innovations are borne out of the genuine desire by operators to take a fresh look at their customers needs while ensuring maximum satisfaction and returns for their customers.

The services offered by banking industry are very sensitive and complex in nature. The Nigeria populace needs to be enlightened and constructly convinced to register their interest if at all any meaningful head-way must be achieved. It would be fallacious to say that advertising and personal selling have not been adequately applied nor its merits and demerits not considered before application, yet the following problems arise:

 

  • Advertising does not seem to have a favourable effect on new product of commercial banks.
  • It seems as if the aims and objectives of increasing advertising programmes are not worthwhile since customers’ turn up and patronage seem to have remained the same.
  • Many advertising media has been used and not withstanding, some members of the society seem not to have been reached.
  • Customers show no sign of improved favourable relationship even at the instance of radical improvement that had taken place in the product itself and the promo tools – advertising and personal selling.

Nevertheless, the advertising and personal selling practices of most firms have been unproductive because they are characterized by poor recruitment and selection, low motivation, poor training and development programmes, poor supervisions and performance evaluation. It was, for these reasons that this study was embarked upon to investigate the extent of the relationship existing among advertising and personal selling and marketing growth on new product of commercial banks.

1.3 OBJECTIVE OF THE STUDY

 This study was conducted primarily to investigate the extent of the relationship existing among advertising and personal selling and marketing growth on new product in banking industry in Imo State.

Furthermore, the study will determine the following specific objectives;

  • To analyze the effects of advertising and personal selling on new product of commercial banks
  • To reveal areas of neglect by commercial bank operators and professional marketers
  • The relevance of recruitment and selection in achieving organizational growth in the banking industry.
  • How motivation affects sales people productivity in the banking industry.
  • What contributions training and development have on sales force performance in banking industry
  • The role of supervision and performance evaluation in attaining banking effectiveness in the banking service sector.
  • How moderating factors (competition, technology, economic factors and government policy) interfere in the relationship among advertising and personal selling and marketing of new product of commercial banks.
  • To make necessary recommendations.

1.4 RESEARCH QUESTION

In this face of problems, numerous questions do arise. Though they may not have direct answers but may give solution to the identified problems.

The following questions become imperative in the face of existing problem:

  • What effect does advertising have on new product of commercial banks?
  • Does an increase in advertising leads to a positive increase in the number of customers?
  • What advertising medium/ media have significance positive effect on the target market with regards to commercial banks’ new product?
  • Does an increase in personal selling effort of the bank result to a positive increase in the number of customers?
  • How positively has the combination of adverting and personal selling effect the new products of commercial banks?
  • What relevance is recruitment and selection in achieving organizational growth in the banking industry?

1.5 STATEMENT OF HYPOTHESIS  

Ho A:      Advertising and personal selling do not have effect on commercial banks’ new products.

Hi A:      Advertising and personal selling have effect on commercial banks new products.

Ho B:     Advertising and personal selling do not contribute nor help in the profit maximization of commercial banks.

Hi B:     Advertising and personal selling contribute and help in the profit maximization of commercial banks.

Ho C:     Moderating factors do not interfere in the relationship among advertising, personal selling and new product of commercial banks.

Hi C:      Moderating factors interfere in the relationship among advertising, personal selling and new product of commercial banks.

INFLUENCE OF ADVERTISING AND PERSONAL SELLING ON NEW PRODUCT OF COMMERCIAL BANKS IN OWERRI (A STUDY OF UBA NIG PLC)

1.6 SIGNIFICANCE OF THE STUDY

This study was undertaken to investigate the theoretical and practical application of advertising, personal selling in the banking industry.

As such the findings will reveal the extent as well as the effectiveness of its application in the banking industry. In so doing, the recommendation and qualitative solution would serve as a framework to all insurance firms, banking institutions, manufacturers, companies, investors, consumers, government, publics and the global economy that are affected.

Also students and researchers besides falling back on this as a source of secondary data, would find this piece as a stepping stone to which further research study can build upon.

Furthermore, this study which focuses on the influence of advertising and personal selling on commercial banks’ new product is an academic exercise designed to evaluate the effect of advertising and personal selling on new products of commercial bank and understand how it influences the perception of banks’ customers.

Finally, firms both in the industrial and consumer markets, the entire banking industry, government and non-governmental organization, other institutions who engage in innovations and production of commercial services and particularly commercial banks, will find this work of immense benefit. This is because the work will establish the most economic and viable means of audience response in terms of clientele.

1.7 SCOPE OF THE STUDY  

The extent of coverage of this study is defined within the framework of the research topic “the influence of advertising and personal selling on new product of commercial banks in Owerri”

Nevertheless, there are many kinds of commercial banks with similar concerns but the area of specialization is Owerri metropolis, the capital of Imo state of Nigeria.

The researcher concentrated on three branches of the bank in Owerri, it comprises:

  • United bank for Africa: 3, Assumpta Avenue (bank road) Owerri.
  • United bank for Africa: 60 Wetheral road, by Akoku, street, Owerri.
  • United bank for Africa: 34, Douglas road, Owerri.

Emphasis will be drawn on response models designed to know the stages of the banks’ customers so as to ascertain the level of response of the target audience in the purchase response process. This will help in the formation of the message content in the promotion activities.

In essence, this research work is designed to access the influence of advertising and personal selling on new product of commercial bank. Also, the work is designed to know the impact new products play in commercial banks.

1.8 LIMITATION OF THE STUDY

In the course of carrying out this study, several constraints confronted the researcher which might in a way affect the quality of the study. In essence, it has been the wish of the researcher to study every thing on the influence of advertising and personal selling on new product of commercial banks but, based on the nature of the topic, time and financial constraints constrained the researcher to concentrate only on three branches of the bank in Owerri metropolis. Also, problems like non- response and response error as a result of administrative bottlenecks syndrome in the bank was encountered. The management were strict in releasing some vital information needed for the research study.

1.9 DEFINITION OF TERMS 

ADVERTISING

According to William O. Bearden at al (2004:401), advertising is a marketing communication element that is persuasive and disseminated through mass channels of communication to promote the adoption of goods, services, persons or ideas.

 

ALTERNATIVE HYPOTHESIS

In the words of Ezirim A.C et al (2004:20), alternative hypothesis is the hypothesis that we are willing to accept if we reject null hypothesis.

APPEAL

An appeal is an act to persuade a targeted audience to behave in a particular way by suggesting that it is fair reasonable and honest thing to so.

COMPEITION

Competition is the struggle or anything done for the sake for survival among firms that produce similar products (goods or services) in the some industry.

HYPOTHESIS

According to Ezirim A.C et al (2004:20), hypothesis is a statement or assumption about an unknown population parameter.

INNOVATION

According to Anyanwu A (1999:51), innovation is the development and spread of new ideas and /or products.

PERSONAL SELLING

According to Onuoha J.K and Egbuta A.O (2007:284), personal selling is a face–to-face interaction between two or more people – the seller and the buyer, with the aim of closing the sale.

POTENTIAL CUSTOMERS

According to Kotler Philip (2004:44), potential customers are the set of customers who profess a sufficient level of interest in a market offer but either lacks income or access to a particular offer.

 CUSTOMER

They are individual/corporate bodies interested in a product (patronizers).

SELLING

This is the personal presentation of tangible or intangible product and services/ideas to a potential customer

ADVERTISER

This is a person or a company that wants to convey a message to the audience with a promotional message.

 

ADVERTISING MEDIUM

This is a channel trough which the advertising message is delivered to the target audience e.g. newspaper, radio or television.

 

ADVERTISING COPY

This refers to the words and pictures that make up the advertisement and the way they are laid down to create a total impression

 

PRODUCTION

Anything this is offered to the market for attention, acquisition or consumption that might satisfy needs and wants of the customers.

RESEARCH

According to Ezirim, A.C at al (2004:2), research is an investigation undertaken in order to discovers new facts, get additional information, or resolve conflicting ideas or confirm the validity of existing ideas.

INFLUENCE OF ADVERTISING AND PERSONAL SELLING ON NEW PRODUCT OF COMMERCIAL BANKS IN OWERRI (A STUDY OF UBA NIG PLC)

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